-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, G79YrH8jSDal69B26lV2yU3gSZQgW/IWNyPoQDK5uMdkE+zW5W4LrahdZdDo7d/2 oiyt8DyvuE7eeO7rNnYVgA== 0000895813-07-000031.txt : 20070226 0000895813-07-000031.hdr.sgml : 20070226 20070226160741 ACCESSION NUMBER: 0000895813-07-000031 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20070220 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070226 DATE AS OF CHANGE: 20070226 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Consolidated Communications Holdings, Inc. CENTRAL INDEX KEY: 0001304421 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 020636095 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-51446 FILM NUMBER: 07649358 BUSINESS ADDRESS: STREET 1: 121 SOUTH 17TH STREET CITY: MATTOON STATE: IL ZIP: 61938 BUSINESS PHONE: (217) 235-3311 MAIL ADDRESS: STREET 1: 121 SOUTH 17TH STREET CITY: MATTOON STATE: IL ZIP: 61938 FORMER COMPANY: FORMER CONFORMED NAME: Consolidated Communications Illinois Holdings, Inc. DATE OF NAME CHANGE: 20040927 8-K 1 x226-8k.txt ====================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of Earliest Event Reported): February 20, 2007 CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. (Exact name of registrant as specified in its charter) DELAWARE 000-51446 02-0636095 (State of (Commission File) (IRS employer Incorporation) Number identification no.) 121 South 17th Street Mattoon, Illinois 61938-3987 (Address of principal (Zip code) executive offices) Registrant's telephone number, including area code: (217) 235-3311 NOT APPLICABLE (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ====================================================================== ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS. Employment Security Agreements ------------------------------ On February 20, 2007, Consolidated Communications Holdings, Inc. (the "Company") approved entering into Employment Security Agreements (the "Agreements") with the following executive officers of the Company: Steven L. Childers, Robert J. Currey, Joseph R. Dively, Steven J. Shirar, C. Robert Udell, Jr., and Christopher A. Young. A complete copy of a form of the Agreements is filed with this Current Report as Exhibit 10.1 and incorporated herein by this reference. Payments under the Agreements are provided if (i) there is a change in control of the Company and (ii) within two years following the change in control, either the executive's employment is terminated by the Company without "cause" (i.e., commission of a felony, fraud, negligence in the performance of duties, or violation of the Company's code of conduct resulting in termination of employment) or the executive terminates his employment for "good reason" (i.e., reduction in salary, bonus or job responsibilities, or relocation more than 30 miles away). Change in control is defined in the Agreements and includes the acquisition of a majority of the Company's common stock, certain mergers, consolidations and asset transfers, or the election of a majority of the directors not recommended by the incumbent board. Change in control benefits under the Agreements generally include a lump sum cash payment equal to one year base salary and bonus, a prorata bonus for the year in which the termination occurs, and continuation of medical, dental, life insurance and similar benefits for one year. The Agreements also provide for reimbursement to the executive for any excise tax imposed on payments under the Agreements or otherwise in connection with the change in control as well as taxes imposed on such reimbursement amounts. The Agreements include covenants that prohibit the executives from competing and from soliciting Company employees for one year following a termination of employment. Executive Long-Term Incentive Program ------------------------------------- Also on February 20, 2007, the Compensation Committee of the Board of Directors of the Company adopted the Executive Long-Term Incentive Program, which provides a methodology for determining the amount of stock awards made to senior executives under the Company's 2005 Long- Term Incentive Plan. A complete copy of the Executive Long-Term Incentive Program is filed with this Current Report as Exhibit 10.2 and incorporated herein by this reference. The program is intended to provide eligible executives with long-term incentive compensation at or near the 50th percentile of such compensation paid to executives holding comparable job positions at the companies within the Company's custom comparator group. Half of this value is paid to the executive in an award of restricted shares and half is paid to the executive in an award of performance shares. The restricted shares vest at a rate equal to 25% per year on each December 5th following the date of grant. The performance shares entitle the executive to receive an award of restricted shares in the next subsequent year if certain goals based on current year Company performance are attained. Attainment of the goals at the target levels will result in the target number of performance shares awarded as restricted shares, and attainment of the goals at above or below the target levels will result in an increased or decreased number of restricted shares awarded. The restricted shares awarded pursuant to the performance shares also vest at a rate equal to 25% per year on each December 5th following the date of grant. Except for the grants described in the next sentence, in determining the number of shares subject to the awards, restricted shares are valued at the fair market value of the common stock on the date of grant, and performance shares are valued by applying a discount to the fair market value of the common stock on the date of grant, which is intended to reflect the risk of attaining performance goal results at below the target levels (the discount for 2007 is 10%). The Compensation Committee expects to grant awards in March 2007, which, if granted, will be made pursuant to the program's methodology described above, except that the long-term equity incentive compensation levels and the fair market value will be based on November 2006 data (with the fair market value based on the average of the closing price of the shares for the month of November), which is the date the initial calculation of awards was determined, as contemplated by the Compensation Committee. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS. (d) Exhibits. Exhibit No. Description ----------- ----------- 10.1 Form of Employment Security Agreement with certain of the Company's executive officers. 10.2 Executive Long-Term Incentive Program, effective as of February 20, 2007. ______________________________________________________________________ SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: February 23, 2007 Consolidated Communications Holdings, Inc. By: /s/ Steven L. Childers ------------------------------ Name: Steven L. Childers Title: Chief Financial Officer ______________________________________________________________________ EXHIBIT INDEX Exhibit No. Description ----------- ----------- 10.1 Form of Employment Security Agreement with certain of the Company's executive officers. 10.2 Executive Long-Term Incentive Program, effective as of February 20, 2007. _____________________________________________________________________ EX-10 2 xex10-1.txt EXHIBIT 10.1 ------------ EMPLOYMENT SECURITY AGREEMENT ----------------------------- THIS EMPLOYMENT SECURITY AGREEMENT (the "Agreement") is entered into this _____ day of ____________, 2007, 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: 1. PAYMENTS AND BENEFITS UPON A CHANGE IN CONTROL. If within two (2) years after a Change in Control (as defined below), (i) the Company shall terminate Executive's employment with the Company without Cause (as defined below), or (ii) Executive shall voluntarily terminate such employment with Good Reason (as defined below), the Company shall provide the benefits and, within thirty (30) days of Executive's Employment Termination (as defined below), make the payments, described below. (a) Cash Payment. The Company shall make a lump sum cash payment to Executive equal to the Executive's Annual Compensation (as defined below). (b) Short-Year Bonus. The Company shall make a lump sum cash payment to Executive equal to a pro rata portion (based on the date on which Executive's Employment Termination occurs) of the average of the annual amounts paid to Executive under all cash-based incentive or bonus plans or arrangements of the Company, with respect to the last three full fiscal years of Executive's participation in such plans or arrangements prior to Employment Termination or, if higher, prior to the Change in Control. For purposes of the preceding sentence, if Executive's number of full fiscal years of participation in any such plan or arrangement prior to the Change in Control is less than three, the average amount shall be calculated as the average of the annual amounts paid to Executive over the number of full fiscal years of Executive's participation in the plan or arrangement prior to the Change in Control, or the number of full fiscal years of Executive's participation in the plan or arrangement prior to Employment Termination, whichever produces a higher average annual amount. (c) Welfare Benefit Plans. With respect to each Welfare Benefit Plan (as defined below), for the period beginning on Executive's Employment Termination and ending on the earlier of (i) one year following Executive's Employment Termination, or (ii) the date Executive becomes covered by a welfare benefit plan or program maintained by an entity other than the Company which provides coverage or benefits at least equal, in all respects, to such Welfare Benefit Plan, Executive shall continue to participate in such Welfare Benefit Plan on the same basis and at the same cost to Executive as was the case immediately prior to the Change in Control (or, if more favorable to Executive, as was the case at any time hereafter), or, if any benefit or coverage cannot be provided under a Welfare 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. (d) Salary to Date of Employment Termination. The Company shall pay to Executive any unpaid salary or other compensation of any kind earned with respect to any period prior to Executive's Employment Termination and a lump sum cash payment for accumulated but unused vacation earned through such Employment Termination. 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 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 Richard A. Lumpkin, is or becomes the beneficial owner (as defined in Rule 13d-3 under the 1934 Act) 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 Section 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 Section 2(c)(iv)(A) of the beneficially owned shares of the successor or survivor corporation and the number described in Section 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 Section 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 average of the annual amounts paid to Executive under any cash-based incentive or bonus plans or arrangements in which Executive participates with respect to the last three full fiscal years of Executive's participation in such plans or arrangements prior to Employment Termination or, if higher, prior to the Change in Control. For purposes of the preceding sentence, if Executive's number of full fiscal years of participation in any such plan prior to the Change in Control is less than three, the amount under this paragraph shall be calculated as the average of the annual amounts paid to Executive over the number of full fiscal years of Executive's participation in the plan or arrangement prior to the Change in Control, or the number of full fiscal years of Executive's participation in the plan or arrangement prior to Employment Termination, whichever produces a higher average annual amount. 3. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY. (a) Gross-Up. 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, but determined without regard to any additional payments required under this Section 3) (the "Payments") is determined to be an "excess parachute payment" pursuant to Code Section 280G or any successor or substitute provision of the Code, with the effect that Executive is liable for the payment of the excise tax described in Code Section 4999 or any successor or substitute provision of the Code, or any interest or penalties are incurred by Executive with respect to such Payments (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then Executive shall be entitled to receive an additional payment (the "Gross-Up Payment") in an amount such that after payment by Executive of all taxes imposed upon the Gross-Up Payment, including, without limitation, federal, state, local or other income taxes, FICA taxes, and additional Excise Tax (and any interest and penalties imposed with respect to such taxes), Executive retains a portion of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. (b) Determination of Gross-Up. Subject to the provisions of Section 3(c), all determinations required to be made under this Section 3, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally-recognized public accounting firm designated by Executive, other than the firm that serves as the Company's auditors (the "Accounting Firm"), which shall provide detailed supporting calculations both to the Company and Executive within 15 business days of the receipt of notice from the Company or Executive that there have been Payments, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 3, shall be paid by the Company to Executive within five days after the receipt by the Company and Executive of the Accounting firm's determination. If the Accounting Firm determines that no Excise Tax is payable by Executive, it shall furnish Executive with a written opinion that failure to report the Excise Tax on Executive's applicable federal income tax return would not result in the imposition of a negligence or similar penalty. Any determination by the Accounting Firm shall be binding upon the Company and Executive, except as provided in paragraph (c) below. (c) IRS Claims. As a result of the uncertainty in the application of Section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that the Internal Revenue Service or other agency will claim that a greater Excise Tax is due, and thus a greater amount of Gross-Up Payment should have been made by the Company than that determined pursuant to paragraph (b) above (an "Underpayment"). In the event that Executive is required to make a payment of any such Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred, if any, and such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive. Executive shall notify the Company in writing of any claim by the Internal Revenue Service or other agency that, if successful, would require the payment by the Company of the Gross-Up Payment or an Underpayment. 4. PAYMENT DELAYED IN CERTAIN CIRCUMSTANCES. Notwithstanding anything in this Agreement to the contrary, if at Executive's Employment Termination Executive is a "Key Employee" as defined in Section 416(i) of the Internal Revenue Code (without reference to paragraph 5 thereof), to the extent any amounts payable to Executive pursuant to this Agreement are subject to Section 409A of the Internal Revenue Code ("Section 409A"), payment of such amounts shall not be made until six months following Executive's Employment Termination. 5. MITIGATION AND SET-OFF. Executive shall not be required to mitigate Executive's damages by seeking other employment or otherwise. Except as provided in Section 1(c) of this Agreement, the Company's obligations under this Agreement shall not be reduced in any way by reason of any compensation or benefits received (or foregone) by Executive from sources other than the Company after Executive's Employment Termination, or any amounts that might have been received by Executive in other employment had Executive sought such other employment. Executive's entitlement to benefits and coverage under this Agreement shall continue after, and shall not be affected by, Executive's obtaining other employment after his Employment Termination, provided that any such benefit or coverage shall not be furnished if Executive expressly waives the specific benefit or coverage by giving written notice of waiver to the Company. 6. LITIGATION EXPENSES. The Company shall pay to Executive all out- of-pocket expenses, including attorneys' fees, incurred by Executive in the event Executive successfully enforces any provision of this Agreement in any action, arbitration or lawsuit. 7. RESTRICTIVE COVENANTS. While Executive is employed by the Company and for one year following any Employment Termination, Executive shall not be associated, directly or indirectly, as an employee, proprietor, stockholder, partner, agent, representative, officer, or otherwise, with the operation of any business that is competitive with any line of business of the Company for which Executive has provided substantial services, in any geographic area in which such line of business was active at the time of Executive's Employment Termination, without the prior written consent of the Company, which shall not unreasonably be withheld, except that Executive's ownership (or that of his wife and children) of less than 1% of any class of publicly-traded securities of any such business shall not be considered a violation of this Section. For purposes of the preceding sentence, Executive shall be considered as the "stockholder" of any equity securities owned by his spouse and all relatives and children residing in Executive's principal residence. 8. NO SOLICITATION OF CUSTOMERS, REPRESENTATIVES, AGENTS OR EMPLOYEES. Executive agrees that he shall not, while Executive is employed by the Company and for one 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. 9. CONFIDENTIALITY. Executive acknowledges that preservation of a continuing business relationship between the Company and its customers, representative, and employees is of critical importance to the continued business success of the Company and that it is the active policy of the Company to guard as confidential the identity of its customers, trade secrets, pricing policies, business affairs, representatives and employees. In view of the foregoing, Executive agrees that he shall not, while employed by the Company and thereafter, without the prior written consent of the Company (which consent shall not be withheld unreasonably), disclose to any person or entity any information concerning the business of, or any customer, representative, agent or employee of, the Company which was obtained by Executive in the course of his employment by the Company. This section shall not be applicable if and to the extent Executive is required to testify in a legislative, judicial or regulatory proceeding pursuant to an order of Congress, any state or local legislature, a judge, or an administrative law judge. 10. ASSIGNMENT; SUCCESSORS. This Agreement may not be assigned by the Company without the written consent of Executive but the obligations of the Company under this Agreement shall be the binding legal obligations of any successor to the Company by merger, consolidation or otherwise, and in the event of any business combination or transaction that results in the transfer or substantially all of the assets or business of the Company, the Company will cause the transferee to assume the obligations of the Company under this Agreement. This Agreement may not be assigned by Executive during Executive's life, and upon Executive's death will inure to the benefit of Executive's heirs, legatees and legal representatives of Executive's estate. 11. WITHHOLDING. The Company may withhold from any payment that it is required to make under this Agreement amounts sufficient to satisfy applicable withholding requirements under any federal, state or local law. 12. AMENDMENT OR TERMINATION. This Agreement may be amended at any time by written agreement between the Company and Executive. The Company may terminate this Agreement by written notice given to Executive at least two years prior to the effective date of such termination, provided that, if a Change in Control occurs prior to the effective date of such termination, the termination of this Agreement shall not be effective and Executive shall be entitled to the full benefits of this Agreement. Any such amendment or termination shall be made pursuant to a resolution of the Board. 13. FINANCING. Cash and benefit payments under this Agreement shall constitute general obligations of the Company. Executive shall have only an unsecured right to payment thereof out of the general assets of the Company. Notwithstanding the foregoing, the Company may, by agreement with one or more trustees to be selected by the Company, create a trust on such terms as the Company shall determine to make payments to Executive in accordance with the terms of this Agreement. 14. 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. SEVERABILITY. In the event that any provision or portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force and effect. 16. OTHER AGREEMENTS. This Agreement supersedes and cancels any prior written or oral agreements and understandings relating to the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first written above. Consolidated Communications Holdings, Inc. By: ________________________ ____________________________ Executive Its: ________________________ EX-10 3 xex10-2.txt EXHIBIT 10.2 ------------ CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. 2005 LONG-TERM INCENTIVE PLAN EXECUTIVE LONG-TERM INCENTIVE PROGRAM 1.1 GRANTS. Under the terms and provisions of the Consolidated Communications Holdings, Inc. 2005 Long-Term Incentive Plan (the "Plan"), the terms of which are hereby incorporated by reference, the Compensation Committee (the "Committee") of the Board of Directors of Consolidated Communications Holdings, Inc. (the "Company") may grant awards based on shares of the Company's Stock, including Stock Grants, to eligible employees in such amounts as the Committee shall determine. This Executive Long-Term Incentive Program ("Executive LTIP") establishes a methodology for determining Stock Grants under the Plan to selected senior executives of the Company or any Subsidiary or Affiliate ("Key Employees") in 2007 and subsequent years. The Committee will make Restricted Stock Grants and Performance Stock Grants to Key Employees pursuant to the guidelines set forth below. 1.2 GUIDELINES. The number of shares subject to Stock Grants awarded to a Key Employee will be determined as follows: (a) Target Value. ------------ On or prior to March 31 of each calendar year, the Committee will determine for each Key Employee (by comparable position), the economic value of target annualized long-term incentive equity compensation, based on a value reflecting approximately the 50th percentile of the general industry index selected by the Committee (the "Target Value"). (b) Restricted Stock Grants. ----------------------- (i) It is intended that initial Restricted Stock Grants will be made in March, 2007, will cover a three-year period, and will be made as follows: Employee Restricted Stock Grant Robert J. Currey [TBD] Steven L. Childers 13,591 Joseph R. Dively 13,591 Steven J. Shirar 13,591 C. Robert Udell 13,591 Christopher Young 10,297 (ii) In any subsequent year in which the Committee determines to make Restricted Stock Grants, the Committee will authorize a Restricted Stock Grant to each Key Employee for a number of shares equal to (i) 50% of the Target Value in effect for such year for such Key Employee, divided by the Fair Market Value of a share of Common Stock on the date of grant; multiplied by (ii) the number of years the Restricted Stock Grant is intended to cover. Fractional shares will be rounded up. The shares will be subject to restrictions on transfer that will lapse at a rate equal to 25% per year beginning on December 5th of the year in which the Restricted Stock Grant was awarded, and each anniversary thereafter. (c) Performance Stock Grants. ------------------------ (i) On or prior to the March 31 of each calendar year constituting a performance period, the Committee will authorize a Performance Stock Grant to each Key Employee that entitles the Key Employee to receive a number of shares of Restricted Stock in the next calendar year based on achievement of performance goals for such performance period. The performance goals and achievement levels will be established by the Committee prior to such March 31. (ii) Following the completion of the applicable performance period, the Committee will determine the extent to which the performance goals have been achieved at the target and other applicable levels established pursuant to subsection (c)(i) above. If performance goals for 2007 are achieved at the target level, the following shares of Restricted Stock will be authorized for payment: Performance Employee Stock Grant -------- ----------- Robert J. Currey [TBD] Steven L. Childers 5,034 Joseph R. Dively 5,034 Steven J. Shirar 5,034 C. Robert Udell 5,034 Christopher Young 3,814 If performance goals for any subsequent year are achieved at the target level, the Committee will authorize payment to each Key Employee of a number of shares of Restricted Stock equal to 50% of the Target Value in effect for the year in which the Performance Stock Grant was authorized to such Key Employee, divided by the product of (A) the Fair Market Value of a share of Common Stock on the date of grant of the Performance Stock Grant, and (B) a percentage determined by the Committee at the beginning of the applicable performance period to reflect the probability of achieving results at the target levels. (iii) If the performance goals are achieved at above or below the target level, then the number of shares to be paid to the Key Employee will be adjusted to reflect achievement at the different levels. If there is more than one performance goal, the Committee will determine achievement of the performance goals on a blended basis that takes into account the weighting assigned to each individual goal. The performance goals that apply for each performance period, the weighting of such goals, and the payout levels commensurate with various levels of achievement of such goals will be detailed in the Performance Stock Grant Certificate. Fractional shares will be rounded up. The shares of Restricted Stock received pursuant to the Performance Stock Grant will be subject to restrictions on transfer that will lapse at a rate equal to 25% per year beginning on December 5th of the year in which such shares are received, and each anniversary thereafter. (iv) Notwithstanding the foregoing, no individual who is not employed by the Company or any Subsidiary or Affiliate on the date the Committee determines achievement of the performance goals for a performance period will be eligible to receive shares of Restricted Stock under this Section 1.2(c). 1.3 STOCK GRANT CERTIFICATES. Each Stock Grant awarded pursuant to this Executive LTIP will be evidenced by a Certificate, which will specify the number of shares subject to the award, the vesting schedule, the payment provisions, and such other provisions as the Committee determines. A Restricted Stock Grant Certificate will be delivered to each Key Employee as soon as practicable after the Committee determines the amount of such Restricted Stock Grant in accordance with Section 1.2(b), and a Performance Stock Grant Certificate will be delivered to each Key Employee as soon as practicable after the Committee sets the performance goals in accordance with subsection 1.2(c)(i). 1.4 CAPITALIZED TERMS. Capitalized terms used but not defined herein have the meanings assigned to such terms pursuant to the Plan. -----END PRIVACY-ENHANCED MESSAGE-----