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EXHIBIT 10.38
IXC COMMUNICATIONS, INC.
1999 STOCK APPRECIATION RIGHTS PLAN
1. PURPOSE. The purpose of the IXC Communications, Inc. 1999 Stock
Appreciation Rights Plan is to provide stock-based compensation payable in the
form of cash to a select group of senior executives of IXC Communications, Inc.
2. EFFECTIVE DATE. The effective date of the Plan is April 8, 1999.
3. DEFINITIONS. For purposes of this Plan, the following terms shall
have the meanings set forth below:
(a) "Base Price" means the Fair Market Value of the Common Stock
on the date on which the Stock Appreciation Right was granted.
(b) "Board of Directors" means the Board of Directors of the
Company.
(c) "Cap" means the maximum amount of the Fair Market Value of
the Common Stock that may be taken into account in determining the
amount of the benefit payable upon the exercise of the Participant's
Stock Appreciation Right.
(d) A "Change in Control" will be deemed have transpired upon the
occurrence of any of the following events:
(i) The date of consummation of the sale of all or
substantially all of the assets of the Company;
(ii) The date of completion of a successful tender offer for
greater than fifty percent (50%) of the outstanding capital stock
of the Company; or
(iii) The date of consummation of a merger or consolidation
of the Company with any other corporation in which the parties
who were the stockholders of the Company immediately preceding
such merger or consolidation will not hold a majority of the
outstanding capital stock of the surviving corporation (whether
or not the Company is the surviving corporation) immediately
after such merger or consolidation.
(e) "Committee" means the committee designated in accordance with
Section 4 below that is responsible for the administration of the
Plan.
(f) "Common Stock" means the common stock of the Company or any
security issued in substitution, exchange, or in lieu thereof.
(g) "Company" means IXC Communications, Inc., a Delaware
corporation, or any successor corporation.
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(h) A "Constructive Discharge" of a Participant will be deemed to
have occurred if there is (i) any material reduction in the
Participant's compensation, (ii) any material reduction in the level
or scope of job responsibility or status of the Participant occurring
without the consent of the Participant, or (iii) any relocation to an
office of the Company which is more than thirty (30) miles from the
office where the Participant was previously located to which the
Participant has not agreed.
(i) The "Fair Market Value" of Common Stock shall be determined
in accordance with the general rules stated in Subparagraph (i) below
and the special rule contained in Subparagraph (ii) below.
(i) The following general rules shall apply for valuation
purposes.
(A) If the Common Stock is admitted to trading or
listed on a national securities exchange, its Fair Market
Value shall be 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.
(B) If the Common Stock is not listed or admitted to
trading on any national securities exchange, its Fair Market
Value shall be 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.
(C) If the Common Stock is not traded or listed on a
national securities exchange or included in the Nasdaq
National Market, its Fair Market Value shall be 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.
(D) If the Common Stock is not described in (A), (B),
or (C) above, its Fair Market Value shall be 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 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 (whichever is applicable) is closed on such date, the "Fair
Market Value" shall be
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determined as of the last preceding day on which the Common Stock was
traded or for which bid and ask prices are available.
(ii) Notwithstanding the provisions of Subparagraph (i)
above, in the case of a Change in Control, the Fair Market Value
of the Common Stock shall be the value of the consideration paid
for it in the transaction that effects the Change in Control.
(j) "Participant" means an employee of the Company who has been
granted a Stock Appreciation Right.
(k) "Plan" means this IXC Communications, Inc. 1999 Stock
Appreciation Rights Plan, as it may be amended from time to time.
(l) "Related Stock Option" means the stock option previously
granted to the Participant for the same number of shares as to which
the Participant's Stock Appreciation Right applies.
(m) "Stock Appreciation Right" means the right to receive the
difference between the (i) Base Price and (ii) the Fair Market Value
of the Common Stock on the date that the right is exercised. However,
in no event will the portion of the Fair Market Value of the Common
Stock in excess of the Cap (if applicable) be taken into account in
determining the amount payable to the Participant.
4. ADMINISTRATION.
(a) This Plan shall be administered by the Board or a committee
appointed by the Board. (In either case, the responsible entity shall
be referred to as the "Committee.") It is expressly intended that this
Plan be treated as a formula plan for purposes of Rule 16b-3
promulgated by the Securities and Exchange Commission so that the
approval of the Plan by the Board of Directors constitutes the
approval of all grants under the Plan.
(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.
(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
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connection with the interpretation and administration of this Plan
shall be binding upon all parties.
(d) The Committee is authorized to make such modifications to
this Plan 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 the Participants, the Plan, or of the Company.
5. PARTICIPATION AND BENEFITS. Schedule A contains a list of (a) those
senior executives of the Company who have been granted Stock Appreciation Rights
as of the Effective Date of this Plan ("Initial Participants"), (b) the number
of shares of Common Stock subject to each Stock Appreciation Right, (c) the Base
Price of each Stock Appreciation Right, and (d) the Cap for each Stock
Appreciation Right, and (e) the date of the Related Stock Option. The terms of
any additional grants (whether to Initial Participants or to new Participants)
shall be set forth in additional Schedules.
6. VESTING.
(a) Except as otherwise provided in the grant, each Participant
shall earn a vested right to exercise the number of shares subject to
his or her Stock Appreciation Right at the rate of twenty-five percent
(25%) on each anniversary of the date of the grant.
(b) The termination of the Participant's employment (whether by
reason of death or otherwise) shall not accelerate the number of
shares with respect to which this Stock Appreciation Right may be
exercised. Also, this Stock Appreciation Right shall be exercisable
following termination of employment only to the extent (if at all) it
was exercisable at the time of termination of employment.
(c) In the event there is a Change in Control of the Company and
(i) a Participant's employment is terminated without cause by the
Company (or its successor) or (ii) a Participant is Constructively
Discharged by the Company (or its successor), in each case during the
one (1) year period immediately following the consummation of the
Change in Control ("Employee Termination Date"), the Stock
Appreciation Right shall fully vest on the Employee Termination Date,
provided that it had not previously been terminated. A Change in
Control without the occurrence of an event described in (i) or (ii) of
the immediately preceding sentence during the one (1) year period
immediately following the consummation of the Change in Control will
not in any way change the vesting schedule set forth in Paragraph (a)
of this Section 6.
7. EXERCISE OF RIGHTS. A Stock Appreciation Right may be exercised by
the Participant by delivering to the Committee written notice specifying the
number of full shares with respect to which it is to be exercised. Participants
may not exercise their Stock Appreciation Rights with respect to a fractional
share. Except as otherwise provided in the grant, if the Stock Appreciation
Right is granted in tandem with a stock option, the Participant may exercise his
or her Stock Appreciation Right only at the same time and with respect to the
same number of shares as to which the Participant exercises his or her Related
Stock Option.
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8. TERMINATION OF RIGHTS. Except as otherwise specified in the grant,
all Stock Appreciation Rights will end on the tenth (10th) anniversary of the
date of the grant. If the Stock Appreciation Right is granted in tandem with a
stock option, the Stock Appreciation Right will remain exercisable following the
termination of the Participant's employment (whether by reason of death,
disability, or otherwise) only to the extent (if at all) that the Participant
could exercise his or her Related Stock Option following termination of
employment.
9. FORM OF BENEFIT PAYMENTS. Benefits will be paid in the form of a
lump sum distribution of cash equal to the difference between (a) the Fair
Market Value of the Common Stock (but not to exceed the Participant's Cap, if
applicable) on the date that the Participant exercises the Stock Appreciation
Right and (b) the Base Price of the Stock Appreciation Right.
10. DESIGNATION OF BENEFICIARY. In the event of the death of a
Participant prior to the date on which the Participant's entire benefit under
the Plan is paid, the benefit (or the remaining portion thereof) shall be paid
to the Participant's estate, unless the Participant has designated a beneficiary
in accordance with such rules and procedures as the Committee may prescribe.
11. PAYEES UNDER A LEGAL DISABILITY. If any payee is a minor, or if the
Committee reasonably believes that any payee is legally incapable of giving a
valid receipt and discharge for any payment due the payee, the Committee may
have the payment made to the person (or persons or institution) whom it believes
is caring for or supporting the payee. Any such payment shall be a payment for
the benefit of the payee and shall be a complete discharge of any liability
under the Plan to the payee.
12. PAYMENT OF BENEFITS. All payments under the Plan shall be delivered
in person or mailed to the last address of the Participant (or, in the case of
the death of the Participant, to that of the Participant's estate or of the
Participant's designated beneficiary, whichever is applicable). Each Participant
shall be responsible for furnishing the Committee with his or her current
address and that of his or her beneficiary (if applicable).
13. CHANGES IN CAPITALIZATION. 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 make such adjustments as it may deem
appropriate to each Stock Appreciation Right relating to (a) the number of
shares of Common Stock to which it applies, (b) the Base Price, and (c) the Cap
(if applicable).
14. NON-TRANSFERABILITY OF GRANTS. Stock Appreciation Rights are not
assignable or transferable except by will or the laws of descent and
distribution.
15. AMENDMENT AND TERMINATION. The Board may amend or terminate this
Plan at any time.
16. NO ADDITIONAL RIGHTS. Neither the adoption of this Plan nor the
participation of any Employee in this Plan shall (a) affect or restrict in any
way the power of the Company to
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undertake any corporate action otherwise permitted under applicable law, (b)
confer upon any Participant the right to continue performing services for the
Company, or (c) interfere in any way with the right of the Company to terminate
the services of any Participant at any time, with or without cause, subject to
the terms of any applicable employment agreement.
17. SECURITIES LAW RESTRICTIONS. No Participant will be allowed to
exercise a Stock Appreciation right if the Company determines that such exercise
would violate (a) applicable federal or state securities law, (b) the rules of
any stock exchange (or other securities market) on which the Common Stock is
traded, or (c) the IXC Communications, Inc. Statement of Policy regarding
Securities Transactions and Confidentiality (or any successor document).
18. WITHHOLDINGS. Any payments from the Plan may be subject to
withholding for taxes as may be required by any applicable federal or state law.
19. INDEMNIFICATION. To the maximum extent permitted by law, the
Company shall indemnify each member of the Board of Directors, as well as any
other employee of the Company with duties under this Plan, against any and all
liabilities and expenses (including any amount paid in judgment or settlement)
reasonably incurred by the individual in connection with any claims against the
individual 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.
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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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