Exhibit 10.2

DATE

 

Dear :

 

Pursuant to the Lumos Networks Corp. 2011 Equity and Cash Incentive Plan, as
amended (the “Plan”), the Plan’s administrative committee (the “Committee”)
granted to you effective March 1, 2013 an Incentive Stock Option (“Option”) to
purchase  xxx shares of Common Stock, par value $.01 at an Exercise Price of
 $xx.xx per share. Your Option is intended to be an Incentive Stock
Option.  However, your Option will be treated as an Incentive Stock Option only
to the extent that (i) the number of Option shares with respect to which this
Option and any other Incentive Stock Options granted to you become exercisable
for the first time in any calendar year multiplied by (ii) the Exercise Price of
the Option does not exceed one hundred thousand dollars ($100,000) (or such
other amount as is set as the limit for Incentive Stock Options).  To the extent
such dollar limitation is exceeded in any calendar year, then this Option may
nevertheless be exercised as a Non-Qualified Stock Option for the excess number
of Option shares.  You may direct that any exercise of this Option be deemed an
exercise of the Incentive Stock Option or the Non-Qualified Stock Option portion
to the extent available hereunder.

This Option is subject to the applicable terms and conditions of the Plan, which
are incorporated herein by reference, and in the event of any contradiction,
distinction or difference between this letter and the terms of the Plan, the
terms of the Plan will control.  All capitalized terms used herein have the
meanings set forth herein or in the Plan, as applicable.

Subject to your continued employment with the Company or an Affiliate on and
after the Date of Grant until the applicable vesting date, your Option will vest
and become exercisable as follows (the “Time-Vesting Schedule”):

With respect to 40% of the Option shares (rounded down to the nearest whole
share) on March 1, 2015; and

 

With respect to an additional 20% of the Option shares (rounded down to the
nearest whole share) on each of March 1, 2016 and March 1, 2017; and

 

With respect to the remaining Option shares on March 1, 2018, until your Option
is vested and exercisable in full. 

In addition to the Time-Vesting Schedule above, the following enhanced vesting
provisions shall also apply to your Option shares:

·

In the event your employment with the Company and its Affiliates is terminated
involuntarily and without Cause in contemplation of a Change in Control, then
your entire Option will fully vest as of your Termination Date but the Option
will only become exercisable on the Control Change Date of the Change in Control
in contemplation of which your employment was terminated (notwithstanding the
termination of your employment) if the Control Change Date of the Change in
Control in contemplation of which your employment was terminated occurs prior to
the one (1) year anniversary of the termination of your employment, in which
case the Option will remain outstanding for the later of (i) the number of days
the Option remains outstanding in accordance with the terms of the Plan or (ii)
ten (10) days following the Change of Control (except that none of the
provisions hereof will extend the term of the Option beyond the Expiration
Date).  Your employment will be considered to have been terminated “in
contemplation of” a Change in Control (which consideration is not, and will not
be construed to be, an admission of any liability or wrongdoing) only if the
Company makes a public announcement or files a report or proxy statement with
the Securities and Exchange Commission disclosing a transaction or series of
transactions which, if completed, would constitute a Change in Control and your
employment is terminated by the Company or an Affiliate without Cause during the
period beginning with such disclosure and ending on the earlier of (x) the date
that the Board, acting in good faith, adopts a resolution stating that the
transaction or series of transactions have been abandoned or (y) the date that
such transaction or series of transactions is completed.  You will not be
entitled to receive this enhanced vesting if your employment terminates on
account of your death, Disability, or Retirement, if your employment is
terminated by the Company or an Affiliate for Cause or if you voluntarily resign
for whatever reason.  Your Option shall be forfeited upon the one (1) year
anniversary of the termination of your employment if the Control Change Date of
the Change in Control in contemplation of which your employment was terminated
has not occurred by such time.

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·

In the event no provision is made for the continuance, assumption or
substitution by the Company or its successor of your Option in connection with a
Change in Control, then your entire Option will fully vest and become
exercisable as of the Change in Control, provided you have remained continuously
employed by the Company or an Affiliate from the Date of Grant until the Change
in Control.  If provision is made for the continuance, assumption or
substitution by the Company or its successor of your Option in connection with
the Change in Control, then if your employment with the Company and its
Affiliates is terminated involuntarily and without Cause by the Company or an
Affiliate on or within twelve  (12) months after the Change in Control, your
entire Option will fully vest and become exercisable as of your Termination
Date.  You will not be entitled to receive this enhanced vesting if your
employment terminates on account of your death, Disability, or Retirement, if
your employment is terminated by the Company or an Affiliate for Cause or if you
voluntarily resign for whatever reason.

·

In the event your employment with the Company and its Affiliates terminates, at
any time, on account of your death or Disability, then your Option will be
vested and exercisable as of your Termination Date with respect to no less than
20% of your Option shares (rounded down to the nearest whole share) for each
full year of your continued employment with the Company or an Affiliate
subsequent to the date of grant of your Option.  You will not be entitled to
receive this enhanced vesting if your employment terminates on account of your
Retirement, if your employment is terminated by the Company or an Affiliate with
or without Cause or if you voluntarily resign for whatever reason.

For purposes of this Agreement, and notwithstanding the definition set forth in
the Plan, Cause means “Cause” as such term is defined in any employment or
service agreement between the Company or any Affiliate and the Participant as in
effect as of the date hereof.  If no such employment or service agreement exists
as of the date hereof or if any such existing employment or service agreement
does not contain any such definition, “Cause” shall include the following:  (i)
Participant’s breach of or failure to perform any obligations under any
agreement entered into by such Participant and the Company or any Affiliate,
including but not limited to any non-compete, non-solicitation, or business
opportunity covenant; (ii) Participant’s failure to adhere to or follow the
lawful directives of the Company or any Affiliate; (iii) Participant’s failure
to satisfactorily perform Participant’s employment duties as reasonably
determined by Participant’s supervisors or management of the Company or any
Affiliate which employs Participant, without regard to any potential or pending
transaction including the Company or an Affiliate (after written notice and on
opportunity to cure (not to exceed thirty (30) days)); (iv) Participant’s
misconduct in connection with performance of Participant’s duties, including but
not limited to any breach of fiduciary duty, the misappropriation of funds or
property of the Company or any Affiliate, or securing or attempting to secure
personal profit in connection with any Company or Affiliate transaction or
prospective transaction; (v) Participant’s conviction or plea of guilty or nolo
contendere to any felony or any other crime involving dishonesty, fraud or moral
turpitude; and (vi) the Company’s reasonable suspicion that Participant has
committed any dishonest or fraudulent act in connection with his
employment.  Any grounds for “Cause” shall be determined by the Company in its
sole discretion and shall be upheld so long as the determination is reasonable.

Subject to the terms of the Plan and your continued employment through such
date, the vested and exercisable portion of the Option will remain available for
exercise until the tenth anniversary of the grant date (the “Expiration
Date”).  However, notwithstanding the foregoing, upon your Termination Date, the
Option shall remain exercisable only in accordance with the terms set forth
herein and in the Plan (the “Exercise Period”).  Any vested and exercisable
portion of your Option that is not so exercised within the applicable Exercise
Period shall be forfeited with no further compensation due to
you.  Additionally, unless otherwise provided by the Committee, and except as
otherwise provided above, any portion of your Option that is not vested and
exercisable as of your Termination Date shall be forfeited as of your
Termination Date with no further compensation due to you.

All or part of the exercisable Option may be exercised by you upon (a) your
written notice to the Company of exercise and (b) your payment of the Exercise
Price and any applicable withholding taxes in full at the time of exercise in
any manner provided for under the terms of the Plan.

By accepting this Option, you agree upon grant of your Option to be bound by the
following confidentiality and non-solicitation restrictions: 

Confidentiality

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You understand and acknowledge that during your employment with the Company or
an Affiliate, you have been and will be making use of, acquiring or adding to
the Company’s Confidential Information (as defined below).  In order to protect
the Confidential Information, you will not, during your employment with the
Company or an Affiliate or at any time thereafter, in any way utilize any of the
Confidential Information except in connection with your employment by the
Company or an Affiliate.  You will not at any time use any Confidential
Information for your own benefit or the benefit of any person except the Company
and its Affiliates.  At the end of your employment with the Company or an
Affiliate, you will surrender and return to the Company and its Affiliates any
and all Confidential Information in your possession or control, as well as any
other Company and Affiliate property that is in your possession or control.  The
term “Confidential Information” shall mean any information that is confidential
and proprietary to the Company and its Affiliates, including but not limited to
the following general categories: (a) trade secrets; (b) lists and other
information about current and prospective customers; (c) plans or strategies for
sales, marketing, business development, or system build-out; (d) sales and
account records; (e) prices or pricing strategy or information; (f) current and
proposed advertising and promotional programs; (g) engineering and technical
data; (h) the Company’s and its Affiliates’ methods, systems, techniques,
procedures, designs, formula, inventions and know-how; (i) personnel
information; (j) legal advice and strategies; and (k) other information of a
similar nature not known or made available to the public or the Company and its
Affiliates’ competitors.  “Confidential Information” shall also include any such
information that you may prepare or create during your employment with the
Company or an Affiliate, as well as such information that has been or may be
created or prepared by others.  This promise of confidentiality is in addition
to any common law or statutory rights of the Company to prevent disclosure of
its trade secrets and/or Confidential Information.

 

Non-Solicitation

While you are employed by the Company or an Affiliate and for one (1) year after
your Termination Date, you will not, directly or indirectly, solicit or
encourage any employee of the Company or an Affiliate to terminate employment
with the Company or an Affiliate; hire, or cause to be hired, for any employment
by a Competitor, any person who within the preceding 12 month period has been
employed by the Company or an Affiliate, or assist any other person, firm, or
corporation to do any of the foregoing acts.  Additionally, while you are
employed by the Company or an Affiliate and for one (1) year after your
Termination Date, you will not, directly or indirectly, sell, attempt to sell,
provide or attempt to provide, any telecommunication services, including but not
limited to internet services, of the type offered by the Company or an
Affiliate, to any person or entity who was a customer or an actively sought
prospective customer of the Company or an Affiliate, at any time during the
Executive’s employment with the Company or an Affiliate.

In the event you breach any of foregoing confidentiality or non-solicitation
restrictions, in addition to any contractual or common law right the Company and
its Affiliates may have against you, you will waive and forfeit any and all
rights to any further benefits under this letter or under the Plan and you will
repay the Company and its Affiliates for the gross amount of any benefit you may
have already received under this letter or under the Plan.

Stock Ownership Requirement

The Company has established Common Stock Ownership and Retention Guidelines for
Directors and Officers (the “Guidelines”) to emphasize the link between officers
and the long-term interests of shareholders of the Company and to enhance the
Company’s image by openly communicating to investors, market analysts and the
public that officer interests are tied directly to the long-term success of the
Company through personal capital investment in Company stock.  By accepting this
Option, you acknowledge that you have received a copy of the Guidelines and
agree to adhere to the terms and conditions contained therein. 

 

By accepting this Option, you acknowledge and agree that you will accumulate and
hold shares of the Common Stock of the Company pursuant to the Guidelines. If
you are promoted into another position, you acknowledge and agree that you will
accumulate and hold additional shares pursuant to the Guidelines.  Prior to any
sale of your stock, you agree to seek clearance and to notify the Company’s
Chief Financial Officer that you will not go below your target stock ownership
level (other than sales to pay taxes permitted by this letter).  You are also
expected to comply with all relevant securities regulations at the time of any
sale of Company stock. 

You also agree to certify as the Committee requests whether or not you are in
compliance with the Guidelines. You agree that until such time as you have
reached your stock ownership guideline, you will hold 100% of the shares of
common stock received upon lapse of the restrictions upon restricted stock and
upon exercise of stock options (net of any shares utilized to pay for tax
withholding and the exercise price of the option).  You also agree to sell or
otherwise dispose of any

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Company stock you own once your stock ownership level is met only to the extent
that your remaining holdings do not fall below the minimum stock ownership
level.  The Committee in its sole discretion can make hardship exceptions to the
Guidelines or to permit sales pursuant to Rule 10b5-1 sales plans to the extent
the Committee deems appropriate.  The Committee reserves the right to interpret,
modify or terminate the Guidelines at any time except that no such change or
modification will adversely affect you without your prior consent.

The Company may impose any additional conditions or restrictions on the Option
or the exercise of the Option as it deems necessary or advisable to ensure that
all rights granted under the Plan satisfy the requirements of applicable
securities laws.  The Company shall not be obligated to issue or deliver any
shares if such action violates any provision of any law or regulation of any
governmental authority or national securities exchange.

The Committee may amend the terms of this Option to the extent it deems
appropriate to carry out the terms of the Plan.  The construction and
interpretation of any provision of this Option or the Plan shall be final and
conclusive when made by the Committee. 

Nothing in this letter shall confer on you the right to continue in the service
of the Company or its Affiliates or interfere in any way with the right of the
Company or its Affiliates to terminate your service at any time, which rights
shall be subject to the terms and conditions of any applicable employment
agreement or other contractual relationship between you and the Company, if such
agreement or other relationship exists.

Please sign and return a copy of this agreement to Joe Leigh, Vice President,
Human Resources, designating your approval of this letter.  This acknowledgement
must be returned within thirty (30) days; otherwise, the Option will lapse and
become null and void.   Your signature will also acknowledge that you have
received and reviewed the Plan and that you agree to be bound by, and comply
with, the applicable terms of this letter and the Plan.  

Very truly yours,

LUMOS NETWORKS CORP.

By:

 

 

Timothy G. Biltz

 

Chief Executive Officer

 

 

ACKNOWLEDGED AND ACCEPTED

 

Dated:

 

20335082v12  

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