Document:

Exhibit 10.1

 

 

FIRST AMENDMENT TO CREDIT AGREEMENT AND CONSENT

 

 

This FIRST AMENDMENT TO CREDIT AGREEMENT AND CONSENT (this “Agreement”) is made and entered into as of June 3, 2011, by and among (i) SureWest Communications  (the “Borrower”), (ii) the Subsidiaries of the Borrower identified on the signature pages hereto (each, individually, a “Guarantor” and collectively, the “Guarantors”), (iii) CoBank, ACB (the “Administrative Agent”), as Administrative Agent, Lead Arranger, Bookrunner, Issuing Lender, Swingline Lender and a Lender, and (iv) certain of such other Lenders as are party to the Credit Agreement defined below.  Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in the Credit Agreement defined below.

 

RECITALS

 

WHEREAS, the Borrower, the Guarantors, the Administrative Agent and the Lenders have entered into that certain Credit Agreement, dated as of March 2, 2011 (as the same may be amended, modified, supplemented, extended or restated from time to time, the “Credit Agreement”);

 

WHEREAS, SureWest Telephone desires to sell its parcel of real property located at 99 Yosemite Avenue, Roseville, California 95678 (the “Yosemite Property”), which property is currently mortgaged to the Administrative Agent for the benefit of the Secured Parties, and has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, consent to such sale;

 

WHEREAS, the Borrower has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, amend Section 3.3 of the Credit Agreement in order to permit the Loan Parties to make Investments that are not currently permitted by such Section in an aggregate amount of up to $10,000,000;

 

WHEREAS, the Borrower has requested that the Lenders party hereto, in their capacity as Requisite Lenders under the Credit Agreement, amend Section 3.6 of the Credit Agreement in order to permit the Loan Parties to dispose of assets pursuant to clauses (vi) and (viii) of such Section in partial or total consideration of a note or other form of delayed payment; and

 

WHEREAS, the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, have agreed to consent to the sale of the Yosemite Property and to amend Section 3.3 of the Credit Agreement and clauses (vi)(c) and (viii)(c) of Section 3.6 of the Credit Agreement.

 

NOW, THEREFORE, in consideration of the foregoing and the agreements set forth in this Agreement, each of the Borrower, the Guarantors and the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, hereby agree as follows:

 

 

SECTION 1.  Amendments.

 

(A)       Upon the effectiveness of this Agreement as provided below, Section 3.3 of the Credit Agreement is hereby amended and restated by replacing such Section in its entirety with the following:

 

Investments.  The Loan Parties will not, and will not permit any of their respective Subsidiaries to, directly or indirectly, make or own any Investment in any Person that is prohibited by Borrower’s Investment Policy, except for the following:

 

(A)       the CoBank Equities, as set forth in Subsection 2.7;

 

(B)       Permitted Acquisitions and Investments acquired in connection with Permitted Acquisitions; and

 

(C)       any other Investments, so long as (i) each such Investment and all transactions related thereto are consummated in accordance with Applicable Law in all material respects, (ii) after giving effect to each such Investment, no Default or Event of Default has occurred and is continuing, (iii) each such Investment is related to the telecommunications and/or the broadband industry, (iv) the consideration paid for all such Investments does not exceed $10,000,000 in the aggregate during the term hereof, and (v) Borrower is in pro forma compliance after giving effect to each such Investment with the covenants set forth in Subsections 4.1 through 4.3 for the most recently ended test period under such Subsections as if such Investment had occurred on the first day of such test period.

 

Without the consent of Administrative Agent, Borrower will not amend or modify its Investment Policy in any manner that Administrative Agent determines in its reasonable judgment is materially adverse to the interests of the Lenders hereunder or under any other Loan Document.  Administrative Agent shall provide or withhold its consent to any proposed amendment or modification to Borrower’s Investment Policy within 10 days of Administrative Agent receiving notice of such proposed amendment or modification in accordance with Subsections 4.4(L) and 9.3.  If Administrative Agent fails to respond within such 10-day period it shall be deemed to have consented to such proposed amendment or modification.

 

(B)       Upon the effectiveness of this Agreement as provided below, clause (vi)(c) of Section 3.6 of the Credit Agreement is hereby amended and restated by replacing such clause in its entirety with the following:

 

(c) as to any Asset Disposition with respect to which the fair market value of the assets disposed of exceeds $15,000,000, unless otherwise agreed to by the

 

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Administrative Agent, in its sole discretion, the sole consideration received is cash or other assets (other than a note or other delayed payment transaction),

 

(C)       Upon the effectiveness of this Agreement as provided below, clause (viii)(c) of Section 3.6 of the Credit Agreement is hereby amended and restated by replacing such clause in its entirety with the following:

 

(c) as to any Asset Disposition with respect to which the fair market value of the assets disposed of exceeds $15,000,000, unless otherwise agreed to by the Administrative Agent, in its sole discretion, the sole consideration received is cash or other assets (other than a note or other delayed payment transaction),

 

SECTION 2.  Consent.  Pursuant to clause (vi) of Section 3.6 of the Credit Agreement, the Loan Parties may dispose of assets pursuant to such clause of such Section if all of the conditions set forth in such clause of such Section are satisfied, including that the sole consideration received in respect of such disposition is cash or other assets (other than a note or other delayed payment transaction).  The Borrower has requested that the Requisite Lenders consent to SureWest Telephone disposing of the Yosemite Property in partial consideration of a note from the purchaser (the “Yosemite Property Sale”).  In reliance on the representations, warranties and agreements provided and made by the Borrower to the Lenders herein and in connection with the request for such consent, upon the effectiveness of this Agreement as provided below, the Lenders party hereto, in their collective capacity as Requisite Lenders under the Credit Agreement, hereby consent under the Credit Agreement to the Yosemite Property Sale.

 

SECTION 3.  Condition to Effectiveness.  This Agreement shall be effective only upon receipt by the Administrative Agent of an execution counterpart hereto signed by the Borrower, each Guarantor, and such Lenders party to the Credit Agreement that collectively constitute Requisite Lenders thereunder.

 

SECTION 4.  This Agreement shall not constitute a novation of the Credit Agreement or any other Loan Document.

 

SECTION 5.  All references to the Credit Agreement in the Credit Agreement or in any other Loan Document, shall be deemed a reference to the Credit Agreement as amended by this Agreement.  Except as expressly provided in this Agreement, the execution and delivery of this Agreement does not and will not amend, modify or supplement any provision of, or constitute a consent to or a waiver of any noncompliance with the provisions of, the Credit Agreement or the other Loan Documents, and the Credit Agreement and the other Loan Documents shall remain in full force and effect.

 

SECTION 6.  Each of the Borrower and the Guarantors hereby represents and warrants to the Lenders as follows:

 

(A)      Such entity has the right and power, and has taken all necessary action to authorize it, to execute, deliver and perform this Agreement in accordance with its terms.  This Agreement has been duly executed and delivered by such entity and is a legal, valid and binding obligation of it, enforceable against it in accordance with its terms.

 

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(B)      The execution, delivery and performance of this Agreement in accordance with its terms do not and will not, by the passage of time, the giving of notice or otherwise,

 

(1)        require any governmental approval or violate any Applicable Law relating to such entity;

 

(2)        conflict with, result in a breach of or constitute a default under the organizational documents of such entity, any material provision of any indenture, agreement or other instrument to which it is a party or by which it or any of its properties may be bound or any governmental approval relating to it; or

 

(3)        result in or require the creation or imposition of any lien (except as permitted by the Loan Documents) upon or with respect to any property now owned or hereafter acquired by such entity.

 

(C)       That, after giving effect to the amendments and consent set forth in this Agreement, the representations and warranties of such entity set forth in the Loan Documents to which it is a party are true and correct in all material respects as of the date hereof as if made on the date hereof.

 

(D)       That, after giving effect to the amendments and consent set forth in this Agreement, no Event of Default under the Loan Documents has occurred and is continuing as of this date.

 

SECTION 7.  The Borrower, as the maker of certain Security Documents and certain other related documents, hereby confirms and agrees that (a) each such document is and shall continue to be in full force and effect, and (b) the obligations secured by each such document include any and all obligations of the Borrower to the Lenders under the Credit Agreement, as amended hereby.

 

SECTION 8.  Each of the Guarantors, as the makers of certain guarantees set forth in the Credit Agreement, certain Security Documents and certain other related documents, hereby confirms and agrees that (a) its respective guarantee of the Guaranteed Obligations is and shall continue to be in full force and effect, (b) each such document is and shall continue to be in full force and effect, and (c) the obligations guaranteed or secured, as applicable, by each such applicable document include any and all obligations of the Borrower to the Lenders under the Credit Agreement, as amended hereby.

 

SECTION 9.  The Borrower agrees to pay the Lenders, on demand, all out-of-pocket costs and expenses incurred by the Lenders, including, without limitation, the reasonable fees and expenses of counsel retained by the Lenders, in connection with the negotiation, preparation, execution and delivery of this Agreement and all other instruments and documents contemplated hereby.

 

SECTION 10.  This Agreement may be executed in any number of counterparts and by the different parties hereto in separate counterparts, each of which when executed shall be deemed to be an original and shall be binding upon all parties and their respective permitted

 

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successors and assigns, and all of which taken together shall constitute one and the same agreement.

 

SECTION 11.  Except to the extent governed by applicable federal law, this Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to choice of law doctrine.

 

[Signatures commence on the following page.]

 

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Witness the due execution hereof by the respective duly authorized officers of the undersigned as of the date first written above.

 

	
 
    	
SUREWEST   COMMUNICATIONS, a
   California corporation, as Borrower
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    	
 
    
	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
President and Chief   Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
SUREWEST   BROADBAND, a   California
   corporation,
    
	
 
    	
SUREWEST   KANSAS HOLDINGS,
   INC., a Delaware   corporation,
    
	
 
    	
SUREWEST   TELEVIDEO, a   California
   corporation,
    
	
 
    	
SUREWEST   KANSAS, INC., a   Delaware
   corporation, and
    
	
 
    	
SUREWEST   TELEPHONE, a   California
   corporation, each as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    	
 
    
	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
President and Chief   Executive Officer
    
	
 
    	
 
    
	
 
    	
SUREWEST KANSAS CONNECTIONS,
    LLC, a Delaware limited liability   company,
   as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
SureWest Kansas   Holdings, Inc.,
   its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    
	
 
    	
 
    	
 
    	
Steven C. Oldham
    
	
 
    	
 
    	
 
    	
President and Chief   Executive
   Officer
    
						

 

 

[Signatures Continued on Following Page]

 

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
SUREWEST   KANSAS LICENSES, LLC,
    SUREWEST KANSAS OPERATIONS,
   LLC, and

SUREWEST KANSAS PURCHASING,
   LLC, each a Delaware limited liability
   company, each as a Guarantor
    
	
 
    	
 
    
	
 
    	
By:
    	
SureWest Kansas   Connections, LLC,
   its manager
    
	
 
    	
By:
    	
SureWest Kansas   Holdings, Inc.,
   its manager
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ STEVEN C. OLDHAM
    
	
 
    	
 
    	
 
    	
Steven C. Oldham
   President and Chief Executive
   Officer
    	
 
    

 

 

[Signatures Continued on Following Page]

 

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
COBANK, ACB,   as Administrative Agent, Lead Arranger, Bookrunner, Issuing Lender, Swingline   Lender and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 /s/ Victor Padilla
    
	
 
    	
 
    	
Victor Padilla
    
	
 
    	
 
    	
Vice President
    

 

 

[Signatures Continued on Following Page]

 

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
ROYAL BANK OF CANADA,   as Syndication
   Agent, Bookrunner, Lead Arranger and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ D.W. Scott
    
	
 
    	
 
    	
Name:
    	
D.W. Scott Johnson
    
	
 
    	
 
    	
Title:
    	
Authorized Signatory
    

 

 

[Signatures Continued on Following Page]

 

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
UNION BANK,   as Documentation Agent, Lead
   Arranger and a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ David Hill
    
	
 
    	
 
    	
Name:
    	
David Hill
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
RBC BANK (USA),   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Richard Marshall
    
	
 
    	
 
    	
Name:
    	
Richard Marshall
    
	
 
    	
 
    	
Title:
    	
Market Executive –   National Division
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
RAYMOND JAMES BANK, FSB,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Joseph A. Ciccolini
    
	
 
    	
 
    	
Name:
    	
Joseph A. Ciccolini
    
	
 
    	
 
    	
Title:
    	
Vice President-Senior   Corporate
    
	
 
    	
 
    	
 
    	
Banker
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
BANK OF THE WEST,   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
Edward Unwin
    
	
 
    	
 
    	
Name:
    	
Edward Unwin
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
BROWN BROTHERS   HARRIMAN & CO., 
   as a Lender
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Scott C. Meves
    
	
 
    	
 
    	
Name:
    	
Scott C. Meves
    
	
 
    	
 
    	
Title:
    	
SVP
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
FARM CREDIT BANK OF TEXAS,   as a 
   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Nicholas King
    
	
 
    	
 
    	
Name:
    	
Nicholas King
    
	
 
    	
 
    	
Title:
    	
Vice President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
FARM CREDIT SERVICES OF   AMERICA, FLCA, as a Voting Participant 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ John Zhang 
    
	
 
    	
 
    	
Name: John Zhang 
    
	
 
    	
 
    	
Title:  Vice President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
NORTHWEST FARM CREDIT SERVICES,   
   as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeremy A. Roewe
    
	
 
    	
 
    	
Name:  Jeremy A. Roewe 
    
	
 
    	
 
    	
Title:    Account Manager
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
UNITED FCS, FLCA, d/b/a FCS 

COMMERCIAL FINANCE GROUP,   as a 
   Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeremy Voigts
    
	
 
    	
 
    	
Name:  Jeremy Voigts
    
	
 
    	
 
    	
Title:    Vice-President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
FCS FINANCIAL, FLCA,   as a Voting 
   Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Lee Fuchs
    
	
 
    	
 
    	
Name:  Lee Fuchs
    
	
 
    	
 
    	
Title:    Vice President
    

 

 

[Signatures Continued on Following Page]

 

[Signature Page to First Amendment to Credit Agreement and Consent]

 

 

[Signatures Continued from Previous Page]

 

 

	
 
    	
FARM CREDIT SERVICES OF THE   MOUNTAIN PLAINS, FLCA, as a Voting Participant
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Bradley K. Leafgren
    
	
 
    	
 
    	
Name:  Bradley K. Leafgren
    
	
 
    	
 
    	
Title:    Senior Vice President
    

 

 

[Signature Page to First Amendment to Credit Agreement and Consent]Exhibit 10.2

 

	
 
    	
 
    
	
Notice of Grant of Award
    	
SureWest Communications
    ID:  68-0365195
   8150 Industrial Avenue 
   Roseville, CA 95678
    
	
and Award Agreement
    
	
 
    
	
 
    
	
 
    

 

 

	
Name [Insert recipient’s name]
    	
Award Number: [Insert Award Number]
    
	
Address [Insert recipient’s address]
    	
Plan: 2000
    
	
City, State Zip
    	
 
    
	
 
    	
 
    

 

 

Effective [Insert date], you have been granted a performance award of [Insert number of shares awarded]  shares of SureWest Communications (the Company) common stock.  These shares are restricted contingent upon the achievement of the associated Goal(s).

 

The current total value of the performance award is $ [Insert dollar value of award].

 

The Goal will be measured in increments on the date(s) shown.

 

 

	
 
    	
 
    	
 
    	
 
    	
Final
    
	
Vest
    	
 
    	
 
    	
 
    	
Measurement
    
	
Period
    	
 
    	
Shares
    	
 
    	
Date
    

 

 

 

 

Page 1 of 2

 

	
 
    	
 
    
	
 

Notice of Grant of Award 
   and Award Agreement
    	
SureWest Communications 
    ID:  68-0365195 
   8150 Industrial Avenue 
   Roseville, CA 95678
    
	
 
    	
 
    
	
(Continued)
    	
 
    
	
 
    	
 
    

 

 

	
Name [Insert recipient’s name]
    	
Award Number: [Insert Award Number]
    
	
Address [Insert recipient’s address]
    	
Plan: 2000
    
	
City, State Zip
    	
 
    
	
 
    	
 
    

 

 

Goal Metric(s) associated with these shares:

 

	
Vest
    	
 
    	
Target
    	
 
    	
 
    
	
Period
    	
 
    	
Date
    	
 
    	
Metric
    

 

 

 

 

	
 
    
	
By your   signature and the Company’s signature below, you and the Company agree that   this award is granted under and governed by the terms and conditions of the   Company’s Award Plan as amended and the Award Agreement, all of which are   attached and made a part of this document.
    
	
 
    

 

 

	
 
    	
 
    	
 
    
	
SureWest   Communications
    	
 
    	
Date
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Recipient’s   signature
    	
 
    	
Date
    

 

Page 2 of 2

 

SUREWEST COMMUNICATIONS

2000 EQUITY INCENTIVE PLAN

 

RESTRICTED STOCK AGREEMENT

(PERFORMANCE BASED)

 

	
Payment for Shares
    	
 
    	
No payment is required   for the Shares you receive.
    
	
 
    	
 
    	
 
    
	
Vesting
    	
 
    	
The Shares vest in   installments upon achieving the performance targets within the time   constraints provided for in the Notice of Grant of Award, provided the eleven   day average closing stock price for the period commencing five days before   the Target Date, and ending five days after the Target Date, equals or   exceeds the amounts set forth opposite the Target Date (Metric), or, at any   later Target Date, if the Metric is achieved at such later Target Date as   determined in the same manner, but in no event shall any shares corresponding   to a Target Date vest prior to such corresponding date.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
In addition, the Shares   vest in full if any of the following two events or conditions or   circumstances occur:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
1.  Your service as an Employee or Consultant   terminates because of death or long-term disability. (For all purposes under   this Agreement, “long term disability” shall be determined in accordance with   the 2000 Equity Incentive Plan and Section 409A and applicable regulations   of the Internal Revenue Code), or

 

2.  The Company is subject to a “Change in   Control” (as defined in the Plan and under Section 409A and applicable   regulations of the Internal Revenue Code) while you are an Employee or   Consultant of the Company, and there is a Change of Control agreement which   vests your rights hereunder pursuant to a “Qualifying Termination”, and all   conditions and contingencies relating to the vesting have occurred, in which   event any acceleration shall be governed and controlled by the terms and   conditions of such agreement.

 

The vesting terms under   this agreement can be accelerated partially or in whole by the Compensation   Committee at its sole discretion, but accelerated vesting shall not permit   any distribution except in
    

 

 

	
 
    	
 
    	
compliance with   Section 409A and applicable regulations under the Internal Revenue Code   if any apply.
    
	
 
    	
 
    	
 
    
	
Shares Restricted
    	
 
    	
Unvested Shares will be   considered “Restricted Shares.”  You   may not sell, transfer, pledge or otherwise dispose of any Restricted Shares,   except as provided in the next sentence.    With the consent of the Compensation Committee of the Company’s Board   of Directors, you may transfer Restricted Shares to your spouse, children or   grandchildren or to a trust established by you for the benefit of yourself or   your spouse, children or grandchildren.    A transferee of Restricted Shares must agree in writing on a form   prescribed by the Company to be bound by all provisions of this Agreement.
    
	
 
    	
 
    	
 
    
	
Forfeiture
    	
 
    	
Except as otherwise   provided for or set forth below or elsewhere in this document, if your   service as an Employee of or Consultant to the Company terminates for any   reason (except as provided in this Restricted Stock Agreement), then your   Shares will be forfeited to the extent that they have not vested before the   termination date and do not vest as a result of the termination. This means   that the Restricted Shares will immediately revert to the Company. You   receive no payment for Restricted Shares that are forfeited.
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
The Company determines   in its sole discretion when your service terminates for this purpose.
    
	
 
    	
 
    	
 
    
	
Stock Issuance
    	
 
    	
Your Restricted Shares   will be issued and held for you by the Company. After Shares have vested,   shares will be released to you not later than two and one half months after   the end of the tax year in which the shares have become vested, except to the   extent compliance with Section 409A   otherwise requires, and then, only at such time as Section 409A permits   so as to remain in compliance.
    
	
 
    	
 
    	
 
    
	
Voting and Dividend Rights
    	
 
    	
You have the same   voting, dividend and other rights as the Company’s other shareholders.
    
	
 
    	
 
    	
 
    
	
Withholding 
    	
 
    	
 
    
	
Taxes
    	
 
    	
No shares will be   issued to you unless you have made acceptable arrangements to pay any   withholding taxes that may be due as a result of this award or the vesting of   the Shares. As determined by the Committee, these arrangements may include   withholding Shares of Company stock that otherwise would be released to you   when they vest. As determined by the Committee, these arrangements may also   include surrendering Shares of Company stock that have been owned by you for   no less than six months prior to the date delivered to the Company if such   shares were
    

 

 

	
 
    	
 
    	
acquired upon the   exercise of an option or upon the vesting of restricted stock or restricted   stock units. The fair market value of the Shares you surrender, determined as   of the date when taxes otherwise would have been withheld in cash, will be   applied as a credit against the withholding taxes.
    
	
 
    	
 
    	
 
    
	
Restrictions on
    	
 
    	
 
    
	
Resale
    	
 
    	
By signing this Agreement,   you agree not to sell any Shares at a time when applicable laws or Company   policies prohibit a sale. This restriction will apply as long as you are an   Employee of or Consultant to the Company, or for any other waiting or other   period following separation from service as may be required by   Section 16 of the Securities Exchange Act of 1934 or regulations   promulgated thereunder.
    
	
 
    	
 
    	
 
    
	
No Retention Rights
    	
 
    	
Your award or this   Agreement does not give you the right to be employed or retained by the   Company or a subsidiary of the Company in any capacity.
    
	
 
    	
 
    	
 
    
	
Adjustments
    	
 
    	
As more fully described   in the Plan, in the event of a stock split, a stock dividend or a similar   change in Company stock, the number of Restricted Shares that remain subject   to forfeiture will be adjusted accordingly.
    
	
 
    	
 
    	
 
    
	
Applicable Law
    	
 
    	
This Agreement will be   interpreted and enforced under the laws of the State of California (without   regard to choice-of-law provisions).
    
	
 
    	
 
    	
 
    
	
The Plan and
    	
 
    	
 
    
	
Other 
    	
 
    	
 
    
	
Agreements
    	
 
    	
The text of the   SureWest Communications 2000 Equity Incentive Plan is incorporated in this   Agreement by reference, and shall prevail over any inconsistent provisions   herein, except in cases where you have a change of control agreement in which   case the agreement shall govern and control vesting, distribution and   payment.
    
	
 
    	
 
    	
 
    
	
Deference to Plan
    	
 
    	
 
    
	
Administrator
    	
 
    	
The Administrator of   the 2000 Equity Incentive Plan has discretionary authority with respect to   the construction and interpretation of this Award, including in determining   and deciding whether the performance targets have been achieved and if so,   when they have been achieved. In any dispute between or among the Committee,   Board, Company, Plan Administrator, you, any Participant, Beneficiary, or   Alternate Payee, the court, arbitrator or other decision-maker with authority   to resolve the dispute shall defer to the Plan Administrators construction or   interpretation of
    

 

 

	
 
    	
 
    	
this Award.  The decision-maker shall similarly defer to   any finding of fact by the Plan Administrator or other determination with   respect to yours, any Participant’s Beneficiary’s or Alternate Payee’s   entitlements hereunder.
    

 

This Agreement and the Plan constitute the entire understanding between you and the Company regarding this award.  Any prior agreements, commitments or negotiations concerning this award are superseded.  This Agreement may be amended only by another written agreement, signed by both parties.

 

BY SIGNING THE COVER SHEET OF THIS AGREEMENT,

YOU AGREE TO ALL OF THE TERMS AND CONDITIONS

DESCRIBED ABOVE AND IN THE PLAN.  IN THE EVENT OF

A CONFLICT BETWEEN THE TERMS OF THIS AGREEMENT

AND THE PLAN, THE PLAN SHALL GOVERN.

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