EXHIBIT 10.1

 

RESTRICTED STOCK AWARD

 

Name: Dave Schaeffer

Cogent Communications Holdings, Inc.

Grant Date: May 3, 2017

2017 Incentive Award Plan (the “Plan”)

 

1.                                      Grant:  Effective as of the Grant Date
specified above you have been granted 84,000 (eighty-four thousand) Shares
(“Time Vesting Shares”) and up to 105,000 (one hundred five thousand)
performance-vesting Shares of (the “Performance Vesting Shares” and along with
the Time Vesting Shares the “Restricted Shares”) of Cogent Communications
Holdings, Inc. (the “Company”) subject to the vesting requirements described
below.  Defined terms used but not otherwise defined herein will have the
meaning set forth in the Plan.

 

2.                                      Normal Vesting:  You will become vested
in 7,000 of the Time Vesting Shares on January 1, 2020 and in an additional
7,000 of the Time Vesting Shares on the first day of each month thereafter, with
vesting full vesting of 84,000 Time Vesting Shares completed on December 1,
2020.  The Performance Vesting Shares shall vest on January 1, 2021 only if the
Company’s total shareholder return (“TSR”) for the performance period beginning
April 1, 2017 through December 31, 2020 (the “Performance Period”) is positive. 
If Company’s TSR is positive, then the number of Performance Vesting Shares that
will be vested is determined by dividing the Company’s TSR by the TSR of the
Nasdaq Telecommunications Index (“NTI”) for the Performance Period and
multiplying that percentage by 84,000 (the target number of Performance Vesting
Shares); provided, however that the number of Performance Vesting Shares that
will vest shall not exceed 105,000 Shares.  If the Company’s TSR for the
Performance Period is zero or negative then no Performance Vesting Shares will
vest.   Any Performance Vesting Shares which do not vest at the end of the
Performance Period will be forfeited and cancelled.  TSR is calculated by
comparing an amount invested in the Company to the same amount invested in the
NTI at the beginning of the performance period with all dividends reinvested
during the performance.  In calculating the TSR the average stock price of the
Company’s stock in the 20 trading days prior to the measurement date shall be
used.

 

3.                                      Accelerated Vesting:  Notwithstanding
Section 2, vesting in the Restricted Shares upon the following events will be
treated as follows:

 

(a)                                 Upon the termination of your employment by
reason of death, or disability you will fully vest in all unvested Time Vesting
Shares and 84,000 of Performance Vesting Shares.  Upon termination of your
employment due to retirement you will fully vest in all Time Vesting Shares and
upon expiration of the Performance Period you will vest in any Performance
Vesting Shares in accordance with Section 2 based on actual performance through
and at the end of the Performance Period.

 

(b)                                 If your employment is terminated entitling
you to severance under the terms of your employment agreement either prior to a
Change in Control or more than six months after a Change in Control, then you
will vest in (i) the number of Time Vested Shares you would have vested in had
you remained employed during the severance period, which is the number of months
used to calculate severance under your employment agreement( e.g. 6 months or 12
months) and (ii) at the end of the Performance Period you will vest in the
number of Performance Vesting Shares that vest in accordance with Section 2
above based on actual performance through and at the end of the Performance
Period, but pro-rated based on the

 

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number of days elapsed from the beginning of the Performance Period through the
last day of your severance period.

 

(c)                                  Immediately prior to a Change in Control
the Performance Period will end and the number of Performance Vesting Shares in
which you will be eligible to vest in will be determined based on TSR through
such date provided you remain employed through January 1, 2021; provided,
however, you will be fully vested in such number of Performance Vesting Shares
(i) if during the six months following the Change of Control the Company
terminates your employment without cause (as defined in your employment
agreement with the Company) or you terminate your employment for Good Reason (as
defined in your employment agreement with the Company) or (ii) as otherwise
provided in Section 3(a) above treating the Performance Vesting Shares which
vest under the provisions of this Section 3(c) as Time Vesting Shares for such
purposes.

 

4.                                      Nontransferable:  The Restricted Shares
or any interest or right therein or part thereof may not be disposed of by
transfer, alienation, anticipation, pledge, hypothecation, encumbrance,
assignment or any other means, whether such disposition be voluntary or
involuntary or by operation of law by judgment, levy, attachment, garnishment or
any other legal or equitable proceedings (including bankruptcy), until vested,
and any attempted disposition prior thereto shall be null and void and of no
effect.  The foregoing notwithstanding, transfers of the Restricted Shares may
be permitted for estate planning purposes with the prior written consent of the
Committee and subject in each case to the provisions of the Plan and the same
restrictions and forfeiture provisions under this Agreement that the Restricted
Shares had in your hands.

 

5.                                      Dividends/Voting:  You will be entitled
to vote the Restricted Shares.  However, you will only be entitled to receive
any dividends that are paid on shares of the Restricted Shares once they are
vested.  Any dividends paid on unvested Restricted Shares shall be held by the
Company, without interest thereon and paid to you at the time the Restricted
Shares on which such dividends were paid vest.

 

6.                                      Certificates:  The Company shall cause
the Restricted Shares to be issued and a stock certificate or certificates
representing the Restricted Shares to be registered in your name or held in book
entry form, but if a stock certificate or certificates are issued, they shall be
delivered to, and held in custody by the Company until the shares of Restricted
Shares vest.  You agree to give to the Company a stock power for all unvested
Restricted Shares.  If issued, each such certificate will bear such legends as
the Company may determine.

 

7.                                      No Other Rights:  The grant of
Restricted Shares under the Plan is a one-time benefit and does not create any
contractual or other right to receive an award of Restricted Shares or benefits
in lieu of Restricted Shares in the future.  Future awards of Restricted Shares,
if any, will be at the sole discretion of the Company, including, but not
limited to, the timing of the award, the number of shares and vesting
provisions.  The grant of Restricted Shares under the Plan does not entitle you
to any rights to remain employed with the Company, nor does it constitute a
contract of employment.

 

8.                                      Miscellaneous:  The shares of Restricted
Shares are granted under and governed by the terms and conditions of the Plan,
as may be amended from time to time.  Defined terms used herein shall have the
meaning set forth in the Plan, unless otherwise defined herein.

 

9.                                      280G:  Notwithstanding anything in this
Agreement to the contrary, if the acceleration of vesting and any other payments
to be made you (a “Payment”) would (i) constitute a “parachute

 

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payment” under Section 280G of the Code and (ii) but for this Section 9 be
subject to the excise tax imposed by Section 4999 of the Code (the “Excise
Tax”), then either (A) such Payments shall be reduced to the maximum amount that
could be paid to you without any portion of the Payment (after reduction) being
subject to the Excise Tax, or (B) the entire Payment, shall be paid if after
taking into account all applicable federal, state and local taxes and the Excise
Tax would provide a more favorable net after tax benefit to you (i.e., because
the after tax proceeds to you of the reduced Payments and other benefits under
this Agreement would exceed the after tax proceeds to you of Payments in the
absence of any reduction, taking into account the Excise Tax applicable to such
Payments).  If a reduction in a Payment is to be made under clause (ii)(A), then
the reduction will be made as determined by the Company in a manner that results
in your retaining the largest amounts of Payments which are payable in cash or
equity at or as close to the event giving rise to the change in control as
possible, such as by first reducing your rights to any Payments that are
contingent upon the occurrence of later events (such as severance).   Any
determination of whether any portion of the Payments constitutes a “parachute
payment” within the meaning of Section 280G(b) of the Code,   shall be made by 
a nationally recognized accounting firm selected by the Company, which may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable good faith interpretations concerning the application of
Sections 280G and 4999 of the Code.  In no event will the Company or any
stockholder be liable to Executive for any amounts not paid as a result of the
operation of this Section 9.

 

Cogent Communications Holdings, Inc.

 

By:

/s/Robert Beury

 

 

Robert Beury on behalf of the Board of Directors and the Compensation Committee

 

 

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