Exhibit 10.5

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 (the “Date of Grant”) xxx shares of
Restricted Stock, par value $.01 (the “Award”).  This Award 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 such time, your Award will fully vest and become
non-forfeitable on the first date on which the closing price of a share of the
Company’s Common Stock equals or exceeds $17.50 (the “Price Threshold”) for no
less than twenty (20) trading days during the thirty (30) consecutive
trading-day period ending on such date;  except that, if such date occurs during
a period in which the Company’s trading window under its insider-trading policy
is not open,  the vesting date will be the next open trading date to occur after
the date on which such Price Threshold is achieved on which such trading window
is open (the “Performance-Vesting Schedule”). 

The closing price of a share of the Company’s Common Stock upon which the
Performance-Vesting Schedule is based shall be adjusted as the Committee shall
determine to be equitably required in the event (a) there occurs a
reorganization, recapitalization, stock split, spin-off, split-off, stock
dividend, issuance of stock rights, combination of shares, merger, consolidation
or distribution to stockholders other than a normal cash dividend; (b) the
Company engages in a transaction Code Section 424 describes; or (c) there occurs
any other transaction or event which, in the judgment of the Committee,
necessitates such action.  The issuance by the Company of stock of any class, or
securities convertible into 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 conversion of stock or obligations of
the Company convertible into such stock or other securities, shall not affect,
and no adjustment by reason thereof shall be made with respect to, the closing
price of a share of the Company’s Common Stock upon which the
Performance-Vesting Schedule is based. 

In addition to the Performance-Vesting Schedule above, the following enhanced
vesting provision shall also apply to your Award shares.

·

In the event your employment with the Company and its Affiliates is terminated
involuntarily and without Cause by the Company or an Affiliate in contemplation
of a Change in Control, then your entire Award will vest and become
non-forfeitable 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 and the price
per share the shareholders receive for their Common Stock in connection with the
Change in Control equals or exceeds the Price Threshold.  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 was 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 will
be 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 Award shares shall be forfeited
upon the earlier of (i) the one (1) year anniversary of the termination of your
employment if the

 

 

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Control Change Date of the Change in Control in contemplation of which your
employment was terminated has not occurred by such time, (ii) the Control Change
Date of the Change in Control in contemplation of which your employment was
terminated if the price per share the shareholders receive for their Common
Stock in connection with the Change in Control does not equal or exceed the
Price Threshold and (iii) the abandonment of the transaction in contemplation of
which your employment was terminated. 

·

Your entire Award will vest and become non-forfeitable upon a Change in Control
provided (i) you have remained continuously employed with the Company or an
Affiliate from the Date of Grant until such Change in Control and (ii) the per
share price the shareholders receive for their Common Stock in connection with
the Change in Control equals or exceeds the Price Threshold.  If you remain
continuously employed with the Company or an Affiliate from the Date of Grant
until the Change in Control but the per share price the shareholders receive for
their Common Stock in connection with the Change in Control does not equal or
exceed the Price Threshold, then your entire Award (if still outstanding after
the Change in Control) will continue to be eligible to vest and become
non-forfeitable on the first date on which the Performance Vesting Schedule is
achieved as described above, subject to your continued employment with the
Company or an Affiliate until such time. 

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.

For purposes of this Agreement, if the shares of the Company’s Common Stock are
not traded on any national stock exchange or quotation system (including
NASDAQ), the Committee in its sole discretion shall determine the Fair Market
Value of a share of the Company’s Common Stock for purposes of your Award.  The
Committee in its sole discretion shall determine the fair market value of any
non-cash consideration received in connection with the Change in Control.

Unless otherwise provided by the Committee, any Award shares that are not vested
and non-forfeitable as of your Termination Date shall be forfeited as of your
Termination Date with no further consideration due to you.

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

Confidentiality

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 and its
Affiliates, 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

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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 and its Affiliates 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.

Taxes

Under the Internal Revenue Code (the “Code”), your restricted stock grant is
taxed as ordinary income when the shares vest.   Upon vesting of your stock, you
will be required to pay applicable withholding tax on the stock’s value prior to
the issuance of the stock certificate to you.  You may forfeit shares of vested
stock to satisfy all or part of your tax liability  (if the Company specifically
permits you to forfeit shares to satisfy your tax liability), or you may elect
to have all or part of the withholding tax deducted from your regular pay;
deducted from a bonus check (if applicable); or make payment directly to Lumos
Networks by a personal check. You may be eligible to make a Section 83(b)
election.  You should seek advice from a qualified tax advisor immediately if
you are considering this election.

Dividends

Prior to the vesting of your restricted stock, you will not be eligible to
receive any dividends that are declared unless otherwise determined by the
Committee in its sole discretion.  

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
Award, 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 Award, 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. 

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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 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
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 Award 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 Award to the extent it deems
appropriate to carry out the terms of the Plan.  The construction and
interpretation of any provision of this Award 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 Award 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:

 

 

 

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