Exhibit 10.26
CITIZENS COMMUNICATIONS COMPANY
NON-EMPLOYEE DIRECTORS' COMPENSATION SUMMARY
Non-Employee Directors' Equity Incentive Plan (the "Plan")
Approved and effective May 25, 2006
SIGN-ON OPTIONS
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As approved by the Compensation Committee and subject to Section 3 of the Plan,
upon commencement of service on the board each non-employee director will be
awarded a grant of 10,000 options to purchase the Company's common stock. These
options are exercisable six months after their grant. The price of these options
is the Fair Market Value (closing price) of the Company's common stock on the
day of the director's election to the board. Options expire ten years after the
Grant Date or, if earlier, on the first anniversary of a director's termination
of service with respect to options granted after May 25, 2006.
FORMULA PLAN AWARDS
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Pursuant to Section 4.1(a) of the Plan, each non-employee director will receive
a grant of 3,500 stock units on the first business day of each Plan Year.
QUARTERLY RETAINER FEE
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A non-employee director may elect to receive an annual retainer of either
$40,000 cash or 5,760 stock units, in each case payable in quarterly
installments as of the first business day of each calendar quarter ($10,000 or
1,440 stock units per quarter).
QUARTERLY MEETING FEES AND STIPENDS
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A non-employee director may elect to receive meeting fees and stipends, when
applicable, in cash or stock units, or a combination of the two forms of
compensation.
Each in-person board and committee meeting is valued at $2,000 and each
telephonic board and committee meeting is valued at $1,000.
Each Committee Chair and the Lead Director will also receive quarterly stipends
as follows:
Non-Employee Director Stipends Qtrly Annualized
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Lead Director $3,750 $15,000
Audit Committee Chair $6,250 $25,000
Compensation Committee Chair $3,750 $15,000
Nominating and Corporate Governance Committee Chair $1,875 $7,500
Retirement Plan Committee Chair $1,250 $5,000
Meeting fees and stipends are paid on the last business day of the calendar
quarter in which they were earned.
VALUATION OF STOCK UNITS
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Fees: The number of units to be awarded to a director who elects to defer all or
part of his or her fees and/or stipends in stock units is determined as follows:
The cash value of the fees and/or stipends payable to the director are
divided by 85% of the Fair Market Value (the closing price) of the
Company's common stock on the last business day of the calendar quarter in
which the fees or stipends were earned.
Dividends: As of the date of any payment of a stock dividend or stock split by
the Company, a director's Stock Unit Account will be credited with Stock Units
equal to the number of shares of Common Stock (including fractional share
entitlements) which are payable by the Company with respect to the number of
shares (including fractional share entitlements) equal to the number of Stock
Units credited to the director's Stock Unit Account on the record date for such
stock dividend or stock split. As of the date of any dividend in cash or
property or other distribution payable to holders of Common Stock, the
director's Stock Unit Account shall be credited with additional Stock Units
equal to the number of shares of Common Stock (including fractional share
entitlements) that could have been purchased at the Fair Market Value as of such
payment date with the amount which would have been received as a dividend or
distribution on the number of shares (including fractional share entitlements)
equal to the Stock Units credited to the director's Stock Unit Account as of the
record date.
ELECTION RULES AND PROCEDURES
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Each director must elect by December 31 of the preceding year (or within 30 days
after the individual becomes a director) whether he or she will receive his or
her meeting fees, stipends, and retainer in cash or stock units, or an equal
combination of the two forms of compensation. All elections made are
irrevocable.
DISTRIBUTION UPON TERMINATION OF SERVICE
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Upon termination of service as a director, a director's stock unit account shall
be paid out in the form of cash (valuing each stock unit at the Fair Market
Value [closing price] of a share of the Company's common stock on the
termination date) or Company common stock, at the election of the director (one
share of common stock shall be distributed for each stock unit in the director's
stock unit account). Absent a valid election, stock units shall be paid out in
common stock.