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EXHIBIT 10.22
IXC COMMUNICATIONS, INC.
1998 STOCK PLAN
1. PURPOSE. The purpose of the IXC Communications, Inc. 1998 Stock Plan
("Plan") is to promote the interests of IXC Communications, Inc. ("Company") and
its shareholders by enabling it to offer grants of stock to better attract,
retain, and reward its employees, directors, and other persons providing
services to it and, accordingly, to strengthen the mutuality of interests
between those persons and the Company's shareholders by providing those persons
with a proprietary interest in pursuing the Company's long-term growth and
financial success.
2. DEFINITIONS. For purposes of this Plan, the following terms shall
have the meanings set forth below.
(a) "Board" means the Board of Directors of IXC Communications,
Inc.
(b) "Code" means the Internal Revenue Code of 1986. Reference to
any specific section of the Code shall be deemed to be a reference to
any successor provision.
(c) "Committee" means the administrative Committee of this Plan
that is provided in Section 3 of this Plan.
(d) "Common Stock" means the common stock of the Company or any
security issued in substitution, exchange, or in lieu thereof.
(e) "Company" means IXC Communications, Inc., a Delaware
corporation, or any successor corporation. Except where the context
indicates otherwise, the term "Company" shall include its Parent and
Subsidiaries.
(f) "Disabled" means permanent and total disability, as defined
in Code Section 22(e)(3).
(g) "Exchange Act" means the Securities Exchange Act of 1934.
(h) "Fair Market Value" of Common Stock for any day shall be
determined in accordance with the following rules.
(i) If the Common Stock is admitted to trading or listed
on a national securities exchange, the last reported sale price
on that day regular way, or if no such reported sale takes place
on that day, the average of the last reported bid and ask prices
on that day regular way, in either case on the principal
national securities exchange on which the Common Stock is
admitted to trading or listed.
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(ii) If not listed or admitted to trading on any
national securities exchange, the last sale price regular way on
that day reported on the Nasdaq National Market ("Nasdaq
National Market") of the Nasdaq Stock Market ("NSM") or, if no
such reported sale takes place on that day, the average of the
closing bid and ask prices regular way on that day.
(iii) If not traded or listed on a national securities
exchange or included in the Nasdaq National Market, the last
reported sale price on that day regular way, or if no such
reported sale takes place on that day, the average of the
closing bid and ask prices regular way on that day reported by
the NSM, or any comparable system on that day.
(iv) If the Common Stock is not included in (i), (ii) or
(iii) above, the last reported sale price on that day regular
way, or if no such reported sale takes place on that day, the
closing bid and ask prices regular way on that day as furnished
by any member of the National Association of Securities Dealers,
Inc. ("NASD") selected from time to time by the Company for that
purpose.
If the national securities exchange, Nasdaq National Market, NSM, or
NASD as applicable, are closed on such date, the "Fair Market Value"
shall be determined as of the last preceding day on which the Common
Stock was traded or for which bid and ask prices are available. In the
case of an Incentive Stock Option, "Fair Market Value" shall be
determined without reference to any restriction other than one that, by
its terms, will never lapse.
(i) "Incentive Stock Option" means an option to purchase Common
Stock that is an incentive stock option within the meaning of Code
Section 422.
(j) "Insider" means a person who is subject to Section 16 of the
Exchange Act.
(k) "Non-Qualified Stock Option" means any option to purchase
Common Stock that is not an Incentive Stock Option.
(l) "Option" means an Incentive Stock Option or a Non-Qualified
Stock Option.
(m) "Parent" shall mean any corporation (other than IXC
Communications, Inc.) in an unbroken chain of corporations ending with
IXC Communications, Inc. if each of the corporations (other than IXC
Communications, Inc.) owns stock possessing fifty percent (50%) or more
of the total combined voting power of all classes of stock in one of the
other corporations in the chain, as determined in accordance with the
rules of Code Section 424(e).
(n) "Participant" means a person who was been granted an Option
or Restricted Stock under the Plan.
(o) "Plan" means this IXC Communications, Inc. 1998 Stock Plan,
as it may be amended from time to time.
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(p) "Restricted Stock" means shares of Common Stock issued under
Section 9 of this Plan below that are subject to restrictions upon
assignment or alienation prior to vesting.
(q) "Severance" means, with respect to a Participant, the
termination of the Participant's provision of services to the Company as
an employee, director, or independent contractor, whether by reason of
death, disability, or any other reason. For purposes of determining the
exercisability of an Incentive Stock Option, a Participant who is on a
leave of absence that exceeds ninety (90) days will be considered to
have incurred a Severance on the ninety-first (91st) day of the leave of
absence, unless the Participant's rights to reemployment are guaranteed
by statute or contract. However, a Participant will not be considered to
have incurred a Severance because of a transfer of employment between
the Company and a Subsidiary or Parent (or vice versa).
(r) "Subsidiary" means any corporation or entity in which IXC
Communications, Inc., directly or indirectly, controls fifty percent
(50%) or more of the total voting power of all classes of its stock
having voting power, as determined in accordance with the rules of Code
Section 424(f).
(s) "Ten Percent Shareholder" means any person who owns (after
taking into account the constructive ownership rules of Code Section
424(d)) more than ten percent (10%) of the stock of the IXC
Communications, Inc. or of any of its Parents or Subsidiaries.
3. ADMINISTRATION.
(a) This Plan shall be administered by a Committee appointed by
the Board; provided, however, that the Board may administer the Plan for
any grants to Participants who are not subject to Code Section 162(m).
The Board may remove members from, or add members to, the Committee at
any time. To the extent possible and advisable, the Committee shall be
composed of individuals that satisfy Rule 16b-3 under the Exchange Act
and Code Section 162(m). Notwithstanding anything herein to the
contrary, any action which may be taken by the Committee may also be
taken by the Board.
(b) The Committee may conduct its meetings in person or by
telephone. A majority of the members of the Committee shall constitute a
quorum, and any action shall constitute the action of the Committee if
it is authorized by:
(i) A majority of the members present at any meeting
conducted in accordance with the Company's bylaws; or
(ii) The unanimous consent of all of the members in
writing without a meeting.
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(c) The Committee is authorized to interpret this Plan and to
adopt rules and procedures relating to the administration of this Plan.
All actions of the Committee in connection with the interpretation and
administration of this Plan shall be binding upon all parties.
(d) Subject to the limitations of Sections 10 and 14 of this
Plan, the Committee is expressly authorized to make such modifications
to this Plan and to the grants of Options and Restricted Stock hereunder
as are necessary to effectuate the intent of this Plan as a result of
any changes in the tax, accounting, or securities laws treatment of
Participants, the Company and the Plan.
(e) The Committee may delegate its responsibilities to others
under such conditions and limitations as it may prescribe, except that
the Committee may not delegate its authority with regard to the granting
of Options or Restricted Stock to Insiders if that would cause such
grants to fail to satisfy Rule 16b-3 under the Exchange Act or Code
Section 162(m).
4. DURATION OF PLAN.
(a) This Plan shall be effective as of July 30, 1998, provided
it is approved by the majority of the Company's shareholders, in
accordance with the provisions of Code Section 422, within twelve (12)
months before or after the date of its adoption by the Board.
(b) In the event that this Plan is not so approved, this Plan
shall terminate and any Options granted under this Plan shall be void.
(c) This Plan shall terminate on July 29, 2008, except with
respect to Options then outstanding.
5. NUMBER OF SHARES.
(a) The aggregate number of shares of Common Stock which may be
issued pursuant to this Plan shall be Three Million One Hundred Fifty
Thousand (3,150,000). The maximum number of shares that may be issued to
a single Participant is Two Hundred Thousand (200,000).
(b) Upon the expiration or termination of an outstanding Option
which shall not have been exercised in full, the shares of Common Stock
remaining unissued under the Option shall again become available for use
under the Plan.
(c) Upon the forfeiture of shares of Restricted Stock, the
forfeited shares of Common Stock shall again become available for use
under the Plan.
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6. ELIGIBILITY.
(a) Persons eligible for Options under this Plan shall consist
of employees, directors, and other persons providing services to the
Company. However, Incentive Stock Options may only be granted to
employees.
(b) Notwithstanding anything in this Plan to the contrary, in
the event that the Company acquires another entity, the Committee may
authorize the issuance of Options ("Substitute Options") to individuals
or entities in substitution of stock options previously granted to those
individuals or entities in connection with their performance of services
for such acquired entity upon such terms and conditions as the Committee
shall determine but which shall not be contrary to applicable law,
taking into account the limitations of Code Section 424(a) in the case
of a Substitute Option that is intended to be an Incentive Stock Option.
7. FORM OF OPTIONS.
(a) Options shall be granted under this Plan on such terms and
in such form as the Committee may approve, which shall not be
inconsistent with the provisions of this Plan; provided, however, that
in the event a grant of any Options by the Committee would not be exempt
under Section 16b-3 of the Exchange Act, the Board may grant such
Options under this Plan on such terms and in such form as the Board may
approve, which shall not be otherwise inconsistent with the provisions
of this Plan.
(b) The exercise price per share of Common Stock purchasable
under an Option shall be set forth in the Option, which in all cases
shall be at least equal to the Fair Market Value of the Common Stock on
the date of the grant.
(c) The exercise price of an Incentive Stock Option granted to a
Ten Percent Shareholder shall be no less than one hundred ten percent
(110%) of the Fair Market Value of the Common Stock on the date of the
grant.
8. EXERCISE OF OPTIONS.
(a) Unless otherwise determined by the Board or the Committee,
each Option shall be exercisable in four equal annual installments to
begin in most instances with the start date of a Participant's
employment with the Company and be subject to such other terms and
conditions as may be set forth in the Option. Any Option shall be
exercisable following the date of the Participant's Severance only to
the extent (if at all) such Option was exercisable on the date of
Severance.
(b) The aggregate Fair Market Value (determined as of the date
of grant) of the number of shares of Common Stock with respect to which
Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year shall not exceed one
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hundred thousand dollars ($100,000) or such other limit as may be
required by Section 422 of the Code. To the extent this limit is
exceeded, the surplus shares shall be treated as acquired upon the
exercise of a Non-Qualified Stock Option. For this purpose, the shares
will be taken into account in the order in which the underlying Options
were granted.
(c) Options shall only be exercisable for whole numbers of
shares.
(d) Options are exercised by payment of the full amount of the
purchase price to the Company.
(i) The payment shall be in the form of cash or such
other forms of consideration as the Committee shall deem
acceptable, such as the surrender of outstanding shares of
Common Stock owned by the Participant (that have been held a
sufficient period of time (if any) to avoid adverse accounting
treatment) or by withholding shares that would otherwise be
issued upon the exercise of the Option.
(ii) If the payment is made by means of the surrender of
Restricted Stock, a number of shares issued upon the exercise of
the Option equal to the number of shares of Restricted Stock
surrendered shall be subject to the same restrictions as the
Restricted Stock that was surrendered.
(iii) After giving due considerations to the
consequences under Rule 16b-3 under the Exchange Act and under
the Code, the Committee may also authorize the exercise of
Options by the delivery to the Company or its designated agent
of an irrevocable written notice of exercise form together with
irrevocable instructions to a broker-dealer to sell or margin a
sufficient portion of the shares of Common Stock and to deliver
the sale or margin loan proceeds directly to the Company to pay
the exercise price of the Option.
9. RESTRICTED STOCK.
(a) The Committee may issue grants of Restricted Stock upon such
terms and conditions as it may deem appropriate, which need not be the
same for each such grant.
(b) Restricted Stock may not be sold to Participants for less
than Fair Market Value.
(c) A Participant shall not have a vested right to the shares
subject to the grant of Restricted Stock until satisfaction of the
vesting requirements specified in the grant. The Participant may not
assign or alienate the Participant's interest in the shares of
Restricted Stock prior to vesting.
(d) The following rules apply with respect to events that occur
prior to the date on which the Participant obtains a vested right to the
Restricted Stock.
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(i) Stock dividends, shares resulting from stock splits,
etc. that are issued with respect to the shares covered by a
grant of Restricted Stock shall be treated as additional shares
received under the grant of Restricted Stock.
(ii) Cash dividends constitute taxable compensation to
the Participant that is deductible by the Company.
10. MODIFICATION OF GRANTS.
(a) The Committee may modify an existing Option, including the
right to:
(i) Accelerate the right to exercise it;
(ii) Extend or renew it; or
(iii) Cancel it and issue a new Option.
However, no modification may be made to an Option that would impair the
rights of the Participant holding the Option without the Participant's
consent. Similar modifications can be made to grants of Restricted
Stock.
(b) Whether a modification of an existing Incentive Stock Option
will be treated as the issuance of a new Incentive Stock Option will be
determined in accordance with the rules of Code Section 424(h).
(c) Whether a modification of an existing grant of Restricted
Stock or of an Option granted to an Insider will be treated as a new
grant will be determined in accordance with Rule 16b-3 under the
Exchange Act.
11. TERMINATION OF OPTIONS.
(a) Except to the extent the terms of an Option require its
prior termination, each Option shall terminate on the earliest of the
following dates.
(i) The date which is ten (10) years from the date on
which the Option is granted or five (5) years in the case of an
Incentive Stock Option granted to a Ten Percent Shareholder.
(ii) The date which is one (1) year from the date of the
Severance of the Participant to whom the Option was granted, if
the Participant was Disabled at the time of Severance.
(iii) The date which is one (1) year from the date of
the Severance of the Participant to whom the Option was granted,
if the Participant's death occurs:
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(A) While the Participant is employed by the
Company; or
(B) Within three (3) months following the
Participant's Severance.
(iv) In the case of any Severance other than one
described in Subparagraphs (ii) or (iii) above, the date that is
three (3) months from the date of the Participant's Severance.
12. NON-TRANSFERABILITY OF GRANTS.
(a) No Option under this Plan shall be assignable or
transferable except by will or the laws of descent and distribution.
(b) Grants of Restricted Stock shall be subject to such
restrictions on transferability as may be imposed in such grants.
13. ADJUSTMENTS
(a) In the event of any change in the capitalization of the
Company affecting its Common Stock (e.g., a stock split, reverse stock
split, stock dividend, recapitalization, combination, or
reclassification), the Committee shall authorize such adjustments as it
may deem appropriate with respect to:
(i) The maximum number of shares of Common Stock that
may be issued under this Plan;
(ii) The number of shares of Common Stock covered by
each outstanding Option;
(iii) The exercise price per share in respect of each
outstanding Option; and
(iv) The maximum number of shares that may be issued to
a single individual.
(b) The Committee may also make such adjustments in the event of
a spin-off or other distribution of Company assets to shareholders,
other than normal cash dividends.
14. AMENDMENT AND TERMINATION.
(a) The Board may at any time amend or terminate this Plan.
However, no modification may be made to the Plan that would impair the
rights of the Participant holding an Option without the Participant's
consent.
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(b) Without the approval of the majority of the shareholders of
the Company, the Board may not amend the provisions of this Plan
regarding:
(i) The class of individuals entitled to receive
Incentive Stock Options; or
(ii) The maximum number of shares of Common Stock that
may be issued under the Plan, except as provided in Section 13
of this Plan.
15. NOTICE OF DISQUALIFYING DISPOSITION. A Participant must notify the
Company if the Participant disposes of stock acquired pursuant to the exercise
of an Incentive Stock Option issued under the Plan prior to the expiration of
the holding periods required to qualify for long-term capital gains treatment on
the disposition.
16. TAX WITHHOLDING.
(a) The Company shall have the right to take such actions as may
be necessary to satisfy its tax withholding obligations relating to the
operation of this Plan.
(b) If Common Stock that was surrendered by the Participant is
used to satisfy the Company's tax withholding obligations, the stock
shall be valued based on its Fair Market Value when the tax withholding
is required to be made.
17. NO ADDITIONAL RIGHTS.
(a) Neither the adoption of this Plan nor the granting (or
exercise) of any Option or Restricted Stock shall:
(i) Affect or restrict in any way the power of the
Company to undertake any corporate action otherwise permitted
under applicable law; or
(ii) Confer upon any Participant the right to continue
performing services for the Company, nor shall it interfere in
any way with the right of the Company to terminate the services
of any Participant at any time, with or without cause.
(b) No Participant shall have any rights as a shareholder with
respect to any shares covered by an Option granted to the Participant or
subject to a grant of Restricted Stock until the date a certificate for
such shares has been issued to the Participant.
18. SECURITIES LAW RESTRICTIONS.
(a) No shares of Common Stock shall be issued under this Plan
unless the Committee shall be satisfied that the issuance will be in
compliance with applicable federal and state securities laws.
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(b) The Committee may require certain investment (or other)
representations and undertakings by the Participant (or other person
exercising an Option or purchasing Restricted Stock by reason of the
death of the Participant) in order to comply with applicable law.
(c) Certificates for shares of Common Stock delivered under this
Plan may be subject to such restrictions as the Committee may deem
advisable. The Committee may cause a legend to be placed on the
certificates to refer to these restrictions.
19. INDEMNIFICATION. To the maximum extent permitted by law, the Company
shall indemnify each member of the Board, as well as any other employee of the
Company with duties under this Plan, against expenses (including any amount paid
in settlement) reasonably incurred by the individual in connection with any
claims against him or her by reason of the performance of the individual's
duties under this Plan, unless the losses are due to the individual's gross
negligence or lack of good faith.
20. GOVERNING LAW. This Plan and all actions taken thereunder shall be
governed by and construed in accordance with the laws of the State of Delaware.
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