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EXHIBIT 10.2
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PHONETEL TECHNOLOGIES, INC.
1999 MANAGEMENT INCENTIVE PLAN
1. PURPOSE
This Plan is intended to encourage the managers of PhoneTel
Technologies, Inc. (the "Company") to think and act as owners and, as a result,
to foster and promote the long term growth and performance of the Company and
increase the market price of its Shares. To achieve this purpose, this Plan
provides authority for the grant of stock and other performance-based
incentives.
2. DEFINITIONS
(1) "Affiliate and Associate" -- These terms have the meanings
given to them in Rule 12b-2 under the Exchange Act.
(2) "Award" -- A grant of Stock Options, or other stock and
performance-based incentives under this Plan.
(c) "Beneficial Owner"-- This term has the meaning given to it
in Rule 13d-3 under the Exchange Act.
(d) "Board of Directors" -- The Board of Directors of the
Company.
(e) "Change in Control" -- A "Change in Control" will be
deemed to occur if at any time after the date of the adoption of this
Plan:
(1) Any Person (other than the Company, any
subsidiary of the Company, any employee benefit plan or
employee share ownership plan of the Company or any subsidiary
of the Company, or any Person organized, appointed, or
established by the Company or any subsidiary of the Company
for or pursuant to the terms of any such plan), alone or
together with any of its Affiliates or Associates, becomes the
Beneficial Owner of 50% or more of the Shares then
outstanding.
(2) At any time during a period of 24 consecutive
months, individuals who were Directors at the beginning of the
period no longer constitute a majority of the members of the
Board of Directors unless the election, or the nomination for
election by the Company's shareholders, of each Director who
was not a Director at the beginning of the period is approved
by at least a majority of the Directors who are in office at
the time of the election or nomination and were Directors at
the beginning of the period.
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(3) The date that the shareholders of the Company
affirmatively vote to approve (A) a merger or consolidation of
the Company with another corporation, partnership, business
trust, real estate investment trust or other entity in which
the Company is not the surviving or continuing entity or in
which all or part of the outstanding Shares are to be
converted into or exchanged for cash, securities, or other
property, (B) a sale or other disposition of all or
substantially all of the assets of the Company, or (C) the
dissolution of the Company.
(f) "Code" -- The Internal Revenue Code of 1986, or any law
that supersedes or replaces it, as amended from time to time.
(g) "Committee" -- The Compensation Committee of the Board of
Directors, or any other committee of the Board of Directors that the
Board of Directors authorizes to administer this Plan. The Committee
will be constituted in a manner that satisfies all applicable legal
requirements, including satisfying the non-employee director standard
set forth in Rule 16b-3 under the Exchange Act and the outside director
requirement under Section 162(m) of the Code.
(h) "Covered Employee" -- An officer of the Company whose
compensation is subject to the $1,000,000 limit on deductibility under
Section 162(m) of the Code, or any provision that supersedes or
replaces Section 162(m) of the Code, as amended from time to time.
(i) "Exchange Act" -- Securities Exchange Act of 1934, and any
law that supersedes or replaces it, as amended from time to time.
(j) "Fair Market Value" of Shares -- The value of Shares
determined by the Committee, or pursuant to rules established by the
Committee, on a basis consistent with regulations under the Code.
(k) "Incentive Stock Option" -- A Stock Option that meets the
requirements of Section 422 of the Code, or any provision that
supersedes or replaces Section 422 of the Code, as amended from time to
time.
(l) "Participant" -- Any person to whom an Award has been
granted under this Plan.
(m) "Performance Goal" -- Such goal or goals for a Participant
as the Committee may from time to time determine, and subject to
shareholder approval as necessary to comply with Section 162(m) of the
Code.
(n) "Restricted Stock" -- An Award of Shares that are
subject to restrictions or risk of forfeiture.
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(o) "Rule 16b-3" -- Rule 16b-3 under the Exchange Act, or any
rule that supersedes or replaces it, as amended from time to time.
(p) "Shares" -- Shares of Common Stock, $0.01 par value, of
the Company or any equity security or securities of the Company that
are issued in substitution or exchange therefor in a recapitalization
of the Company.
3. ELIGIBILITY
All employees of the Company or any of its Affiliates who, in the
judgment of the Committee, have responsibilities that affect the performance of
the Company and the market price of its Shares over the long term, are eligible
for the grant of Awards.
4. SHARES AVAILABLE UNDER PLAN; ADJUSTMENT
(1) NUMBER OF SHARES. The number of Shares that may be subject
to Awards granted under this Plan is subject to the following
limitations:
(1) The maximum number of Shares that may be subject
to Awards granted throughout the term of this Plan is 391,647.
(ii) The Committee shall determine, from time to time
the maximum number of Shares that may be issued upon exercise
of Incentive Stock Options.
The assumption of awards granted by an organization acquired
by the Company or any of its Affiliates, or the grant of Awards under
this Plan in substitution for any such awards, will not reduce the
number of Shares available for the grant of Awards under this Plan.
Shares subject to an Award that is forfeited, terminated,
canceled, or surrendered without having been exercised (other than
Shares subject to an Award that is surrendered in payment of the
exercise price of a Stock Option) will again be available for grant
under this plan, without reducing the number of Shares that may be
subject to Awards or that are available for the grant of Awards in any
fiscal year.
(2) NO FRACTIONAL SHARES. No fractional Shares will be
distributed under this Plan; the Committee will determine the manner in
which fractional Shares will be treated.
(3) ADJUSTMENT. In the event of any change in the Shares by
reason of a merger, consolidation, reorganization, recapitalization, or
similar transaction, or in the event of a stock dividend, stock split,
distribution to shareholders (other than normal cash dividends), or
rights offering or similar sale of Shares for less than their Fair
Market Value at the time of sale, the Committee will adjust the number
and class of shares that may be issued under
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this Plan, the number and class of shares subject to outstanding
Awards, the exercise price applicable to outstanding Awards, and any
value determinations applicable to outstanding Awards.
5. ADMINISTRATION
(1) COMMITTEE. This Plan will be administered by the
Committee. The Committee will, subject to the terms of this Plan, have
the authority to (i) select the eligible employees who will receive
Awards, (ii) determine the number and types of Awards to be granted,
(iii) determine the terms, conditions, vesting periods, and
restrictions applicable to the Awards, (iv) prescribe the forms of any
notices, agreements, or other instruments relating to the Awards, (v)
grant the Awards, (vi) adopt, alter, and repeal administrative rules
and practices governing this Plan, (vii) interpret the terms and
provisions of this Plan and Awards granted under this Plan, and (viii)
otherwise supervise the administration of this Plan. All decisions by
the Committee will be made with the approval of not less than a
majority of its members.
(2) DELEGATION. The Committee may delegate any of its
authority to any other person or persons that it deems appropriate,
provided the delegation does not (i) cause this Plan, or any Awards
granted under this Plan, to fail to qualify for the exemption provided
by Rule 16b-3 under the Exchange Act or (ii) result in a reduction in
the amount of compensation associated with any Award that is deductible
for federal income tax purposes under Section 162(m) of the Code.
(3) DECISIONS FINAL. All decisions by the Committee, and by
any other person or persons to whom the Committee has delegated
authority, will be final and binding on all persons.
6. AWARDS
(1) GRANT OF AWARDS. The Committee will determine the type or
types of Awards to be granted to each employee and the terms,
conditions, vesting periods, and restrictions applicable to each Award,
which terms shall be set forth in an Award Agreement to be in
substantially the form attached hereto as Exhibit A. More than one
Award may be granted to the same employee. Awards may be granted singly
or in combination or tandem with other Awards. The Company may assume
awards granted by an organization acquired by the Company or may grant
Awards in replacement of, or in substitution for, any such awards.
(2) TYPES OF AWARDS. Awards may include, but are not limited
to, the following:
(1) Stock Appreciation Right -- A right to receive a
payment, in cash or Shares, equal to the excess of (A) the
Fair Market Value of a specified number of Shares on the date
the right is exercised over (B) the Fair Market Value of the
Shares
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on the date the right is granted, all as determined by the
Committee. The right may be conditioned upon the occurrence of
certain events, such as a Change in Control of the Company, or
may be unconditional, as determined by the Committee.
(2) Stock Award -- An Award that is made in Shares,
Restricted Stock, or Stock Equivalent Units. The grant or
vesting of any Stock Award made to a Covered Employee (other
than Stock Equivalent Units representing deferred amounts
under Section 7) must be contingent upon the achievement of a
Performance Goal or Performance Goals established by the
Committee at or before the time of grant; the grant or vesting
of any Stock Award made to a Participant other than a Covered
Employee may, in the discretion of the Committee, be
contingent upon the achievement of Performance Goals or other
objectives established by the Committee.
(3) Stock Option -- A right to purchase a specified
number of Shares, during a specified period, and at a
specified exercise price, all as determined by the Committee.
A Stock Option may be an Incentive Stock Option or a Stock
Option that does not qualify as an Incentive Stock Option. In
addition to the terms, conditions, vesting periods, and
restrictions established by the Committee, Incentive Stock
Options must comply with the requirements of Section 422 of
the Code. The exercise price of a Stock Option granted to a
Covered Employee must be at least the Fair Market Value of the
Shares on the date the Stock Option is granted, unless the
grant or vesting of the Stock Option is contingent upon the
achievement of a Performance Goal or Performance Goals
established by the Committee at or before the time of grant.
(4) Cash Award -- An Award denominated in cash. The
grant or vesting of any Cash Award made to a Covered Employee
must be contingent upon the achievement of a Performance Goal
or Performance Goals established by the Committee at or before
the time of grant. The grant or vesting of any Cash Award made
to Participants other than Covered Employees may, in the
discretion of the Committee, be contingent upon continued
service or the achievement of Performance Goals or other
objectives established by the Committee.
7. DEFERRAL OF PAYMENT
The Committee may, in its discretion, permit Participants to defer the
payment of some or all of the Shares, cash, or other consideration subject to
their Awards, as well as other compensation, in accordance with procedures
established by the Committee to ensure that the recognition of taxable income is
deferred under the Code. Deferred amounts may, to the extent permitted by the
Committee, be credited as cash or in units valued by reference to the Fair
Market Value of the Shares. The Committee may also establish rules and
procedures for the crediting of interest on deferred cash payments and dividend
equivalents on Stock Equivalent Units.
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8. PAYMENT OF EXERCISE PRICE
The exercise price of a Stock Option (other than an Incentive Stock
Option) and any other Stock Award for which the Committee has established an
exercise price, may be paid in cash, by the transfer of Shares, by the surrender
of all or part of an Award (including the Award being exercised), or by a
combination of these methods, as and to the extent permitted by the Committee.
The exercise price of an Incentive Stock Option may be paid in cash, by the
transfer of Shares, or by a combination of these methods, as and to the extent
permitted by the Committee at the time of grant, but may not be paid by the
surrender of all or part of an Award. The Committee may prescribe any other
method of paying the exercise price that it determines to be consistent with
applicable law and the purpose of this Plan, including loans by the Company.
In the event shares of Restricted Stock are used to pay the exercise
price of a Stock Option, a number of the Shares issued upon the exercise of the
Stock Option equal to the number of shares of Restricted Stock used to pay the
exercise price will be subject to the same restrictions as the Restricted Stock.
9. TAXES ASSOCIATED WITH AWARD
Prior to the payment of an Award, the Company may withhold, or require
a Participant to remit to the Company, an amount sufficient to pay any federal,
state, and local taxes associated with the Award. The Committee may, in its
discretion and subject to such rules as the Committee may adopt, permit a
Participant to pay any or all taxes associated with the Award (other than an
Incentive Stock Option) in cash, by the transfer of Shares, by the surrender of
all or part of an Award (including the Award being exercised), or by a
combination of these methods. The Committee may permit a Participant to pay any
or all taxes associated with an Incentive Stock Option in cash, by the transfer
of Shares, or by a combination of these methods, but not by the surrender of all
or part of an Award.
10. TERMINATION OF EMPLOYMENT
If the employment of a Participant terminates for any reason, all
unexercised, deferred, and unpaid Awards may be exercisable or paid only in
accordance with rules established by the Committee.
11. TERMINATION OF AWARDS UNDER CERTAIN CONDITIONS
The Committee may cancel any unexpired, unpaid, or deferred Award at
any time if the Participant is not in compliance with all applicable provisions
of this Plan or with the terms or conditions of the Award or if the Participant,
without the prior written consent of the Company, engages in any of the
following activities:
(i) Renders services for an organization, or engages in a
business that is, in the judgment of the Committee, in competition with
the Company.
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(ii) Discloses to anyone outside of the Company, or uses for
any purpose other than the Company's business, any confidential
information or material relating to the Company, whether acquired by
the Participant during or after employment with the Company.
The Committee may, in its discretion and as a condition to the exercise
of Award, require a Participant to acknowledge in writing that he or she is in
compliance with all applicable provisions of this Plan and with the terms and
conditions of the Award and has not engaged in any activities referred to in
clauses (i) and (ii) above.
12. CHANGE IN CONTROL
(a) EFFECT ON AWARDS. In the event of a Change in Control of the
Company, (i) all Stock Appreciation Rights and Stock Options then outstanding
will become fully exercisable as of the date of the Change in Control, (ii) all
restrictions and conditions applicable to Restricted Stock and other Stock
Awards will be deemed to have been satisfied as of the date of the Change in
Control, and (iii) all Cash Awards will be deemed to have been fully earned as
of the date of the Change in Control.
(b) SECTION 280G. Notwithstanding anything contained in this Plan to
the contrary, to the extent that any acceleration of exercisability,
satisfaction of restrictions or conditions, deemed earnings of an Award or
acceleration of vesting of any payment, Award or distribution of any type to or
for a Participant under the Plan, either in and of itself or when aggregated
with any payment or distribution of any type to or for the Participant by the
Company, any Affiliate of the Company, any person who acquires ownership or
effective control of the Company or ownership of a substantial portion of the
Company's assets (within the meaning of Section 280G of the Code and the
regulations thereunder), or any Affiliate of such person, whether paid or
payable or distributed or distributable pursuant to the terms of this Plan or
otherwise (the "Total Payments") is or will be subject to the excise tax imposed
under Section 4999 of the Code (the "Excise Tax"), then the Total Payments shall
be reduced (but not below zero) if and to the extent that a reduction in the
Total Payments will result in the Participant retaining a larger amount, on an
after-tax basis (taking into account federal, state and local income taxes and
the Excise Tax), than if the Participant received the entire amount of such
Total Payments. The Participant shall have the right to specify the order in
which the Total Payments shall be reduced hereunder in order to effectuate the
foregoing.
13. AMENDMENT OR SUSPENSION OF THIS PLAN; AMENDMENT OF OUTSTANDING AWARDS
(1) AMENDMENT OR SUSPENSION OF THIS PLAN. The Board of
Directors may amend or suspend this Plan at any time; however, no
amendment may be adopted without the consent of the Company's
shareholders that would:
(i) increase the aggregate number of Shares that may be
issued under this Plan;
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(ii) modify the requirements affecting eligibility to
participate in this Plan; or
(iii) materially increase the benefits accruing to
corporate insiders under this Plan.
The preceding sentence is intended solely to satisfy the requirements
of Code Section 422, and it is not intended to confer upon Participants
any rights to have this Plan continued without amendment.
Shareholder approval for any such amendment will also be
required only to the extent necessary (i) to preserve the deductibility
of compensation associated with any Award for federal income tax
purposes under Section 162(m) of the Code and (ii) to comply with any
limitations upon amendments as may be imposed by an stock exchange on
which the Shares are then traded.
(2) AMENDMENT OF OUTSTANDING AWARDS. The Committee may, in its
discretion, amend the terms of any Award, prospectively or
retroactively, but no such amendment may impair the rights of any
Participant without his or her consent. The Committee may, in whole or
in part, waive any restrictions or conditions applicable to, or
accelerate the vesting of, any Award.
14. NONASSIGNABILITY
Unless otherwise determined by the Committee, (i) no Award granted
under this Plan may be transferred or assigned by the Participant to whom it is
granted other than by will, pursuant to the laws of descent and distribution, or
pursuant to a qualified domestic relations order and (ii) an Award granted under
this Plan may be exercised, during the Participant's lifetime, only by the
Participant or by the Participant's guardian or legal representative.
15. GOVERNING LAW
The interpretation, validity, and enforcement of this Plan will, to the
extent not otherwise governed by the Code or the securities laws of the United
States, be governed by the laws of the State of Ohio.
16. RIGHTS OF EMPLOYEES
Nothing in this Plan will confer upon any Participant the right to
continued employment by the Company or limit in any way the Company's right to
terminate any Participant's employment at will.
17. TERMINATION DATE
This Plan will continue in effect until December 31, 2009.
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EXHIBIT A
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PHONETEL TECHNOLOGIES, INC.
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AWARD AGREEMENT
Date of Grant: _____________________
THIS AWARD AGREEMENT, dated as of the date of grant stated above (the
"Date of Grant"), is delivered by PhoneTel Technologies, Inc., an Ohio
corporation (the "Company"), to ______________________ (the "Grantee"), who is
an employee of the Company. (This instrument is sometimes hereinafter referred
to as this "Award" or this "Award Agreement".)
WHEREAS, the Company has adopted PhoneTel Technologies, Inc. 1999
Management Incentive Plan (the "Plan") effective ____________, 1999;
WHEREAS, the Plan provides, among other things, for the granting of
stock options by the Compensation Committee of the Board of Directors of the
Company (the "Committee") to certain employees of the Company. Options issued
pursuant to the Plan entitle the holder thereof to purchase shares of common
stock, $_____ par value, of the Company (the "Common Stock"), in accordance with
the terms and provisions thereof; and
WHEREAS, the Committee considers the Grantee to be a person who is
eligible for a grant of stock options under the Plan and has determined that it
would be in the best interest of the Company to grant the stock options
documented herein.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions hereinafter set forth,
the Company, with the approval and at the direction of the Committee, hereby
grants to the Grantee, as of the Date of Grant, an option (the "Option") to
purchase up to ______________ shares of Common Stock at a price of
________________ per share (the "Option Price"). The "Date of Grant" shall mean
the effective date of the grant under the Plan. The shares of Common Stock
purchasable upon exercise of the Option are hereinafter sometimes referred to as
the "Option Shares."
2. TERMINATION OF OPTION.
(a) The Option and all rights hereunder with respect thereto, to the
extent such rights shall not have been exercised, shall terminate and become
null and void after the expiration of
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______ years from the Date of Grant (such period is sometimes hereinafter
referred to as the "Option Term") or such earlier date as shall be provided in
this Award Agreement or the Plan.
(b) Upon the Grantee's ceasing for any reason to be employed by the
Company (such occurrence being a "termination of the Grantee's employment"),
this Option, to the extent not previously exercised, shall terminate upon and
not be exercisable at any time after, the earlier of (i) the expiration of the
Option Term, or (ii) the expiration of three (3) months after the termination of
the Grantee's employment. Notwithstanding the foregoing, if the termination of
the Grantee's employment is by reason of disability (for purposes of this Award
Agreement, the Grantee shall be deemed to be disabled if he is "permanently and
totally disabled" as defined in Section 22(e)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) or death, this Option, to the extent not
previously exercised, shall terminate upon and not be exercisable at any time
after, the first anniversary of the date of the termination of the Grantee's
employment by reason of disability or death. In no event, however, shall this
Option be exercisable after the termination of the Option Term. For purposes of
the Award Agreement, the determination of whether a termination of employment
has been on account of disability shall be made by the Committee in its sole and
absolute discretion.
(c) In the event of the death of the Grantee, the Option may be
exercised by the personal representative of the Grantee's estate or by the
person or persons to whom the option is transferred pursuant to the Grantee's
will or in accordance with the laws of descent and distribution. In no event,
however, shall this Option be exercisable after the termination of the Option
Term.
(d) A transfer of the Grantee's employment between the Company and any
subsidiary of the Company, or between any subsidiaries of the Company, shall not
be deemed to be a termination of the Grantee's employment.
(e) Notwithstanding any other provisions set forth herein or in the
Plan, if the Grantee shall:
(i) commit a fraud upon or embezzle from the Company,
(ii) commit a felony involving moral turpitude or be
convicted for any other felony,
(iii) act recklessly or with malfeasance in a manner that
would have the effect of materially harming the
Company's relationships with its employees, customers
or suppliers (provided, however, that acts undertaken
in good faith and in the exercise of the Grantee's
reasonable business judgment shall not be deemed to
be within this clause (iii)), or
(iv) as determined by the Committee in its discretion,
violate any confidentiality, non-competition or
non-disparagement covenant to which he is subject
(including, without
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limitation, any such covenant contained in his
employment agreement with the Company), THEN
any unexercised portion of the Option immediately shall terminate, be void and
may not at any time thereafter be exercised.
3. EXERCISE OF OPTIONS.
(a) The notice of exercise shall specify the number of Option Shares as
to which the Option then is to be exercised and the date of exercise thereof,
which date shall be at least five days after the giving of such notice unless an
earlier date shall have been mutually agreed upon.
(b) The exercise price shall become immediately due upon exercise of
the Option and shall be payable either in cash or by check made payable to the
Company's order or by the delivery by the Grantee to the Company of shares of
Common Stock that have been endorsed over to the Company having a Fair Market
Value (as determined by the Committee in accordance with Section 5 hereof) on
the date of delivery equal to the exercise price or by a combination of any of
the foregoing.
(c) On the exercise date specified in the Grantee's notice or as soon
thereafter as is practicable, the Company shall cause to be delivered to the
Grantee, a certificate or certificates for the Option Shares then being
purchased (out of theretofore unissued shares or treasury shares, as the Company
may elect) upon full payment for such Option Shares. The obligation of the
Company to deliver certificates for the Option Shares then being purchased
shall, however, be subject to the condition that if at any time the Committee
shall determine in its discretion that the listing, registration or
qualification of the Option or the Option Shares upon any securities exchange or
under any state or federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the Option or the issuance or purchase of Option Shares thereunder, the
Option may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Committee.
(d) If the Grantee fails to pay for any of the Option Shares specified
in the Grantee's notice of exercise or fails to accept delivery thereof, the
Grantee's right to purchase such Option Shares may be terminated by the Company.
The date specified in the Grantee's notice as the date of exercise shall be
deemed the date of exercise of the Option, provided that payment in full for the
Option Shares to be purchased upon such exercise shall have been received by
such date.
4. ADJUSTMENT OF AND CHANGES IN SHARES OF COMMON STOCK OF THE COMPANY.
(a) In the event that at any time prior to the expiration of the Option
Term each of the outstanding shares of Common Stock of the Company (except
shares held by dissenting shareholders) shall be changed to or exchanged for a
different number or kind of shares of Common Stock or other securities of the
Company or of another corporation, whether through reorganization,
recapitalization, stock split-up, combination of shares, merger, consolidation
or otherwise, then for all purposes of this Option there shall be substituted
for each share of Common Stock purchasable hereunder the number and kind of
shares of Common Stock or other securities into which each such share shall be
so changed, or for which each such share shall be so exchanged, and the
Committee shall make such adjustment in the Option Price as the Committee, in
its sole discretion, may determine is equitably required by such change or
exchange, and such adjustment so made shall be effective and binding for all
purposes under this Option Agreement.
(b) In the event that the Company shall issue a stock dividend in
shares of stock with respect to the shares of Common Stock of the Company, the
number of shares then purchasable hereunder shall be adjusted by adding to each
such share the number of shares which would have been distributed as a stock
dividend thereon had such share been outstanding on the record date for payment
of the stock dividend, and each such share together with said additional shares
shall be purchasable at the Option Price as provided in this Award Agreement.
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(c) In the event that there shall be any other change in the number or
kind of outstanding shares of Common Stock or other securities of the Company,
or of any shares of stock or other securities into which such shares shall have
been changed or for which they shall have been exchanged, then the Committee
shall make such adjustment in the number or kind of shares of Common Stock or
other securities subject to purchase hereunder at the Option Price as provided
in this Award Agreement, as the Committee, in its sole discretion, may determine
is equitably required by such change, and such adjustment so made shall be
effective and binding for all purposes under this Award Agreement.
(d) Anything to the contrary in this Section 4 notwithstanding, the
Grantee shall not be entitled to purchase a fraction of a share of Common Stock
or of any other share of stock or other security under this Award Agreement.
5. FAIR MARKET VALUE.
The Fair Market Value of a share of the Common Stock shall be
determined by the Committee in good faith without regard to any restriction
other than a restriction which, by its terms, will never lapse. The
determination of the Committee shall be final and binding on all persons.
6. NO RIGHTS OF STOCKHOLDER.
Neither the Grantee nor any personal representative shall be or shall
have any of the rights and privileges of a stockholder of the Company with
respect to any shares of Common Stock purchasable or issuable upon the exercise
of the Option, in whole or in part, prior to the date of purchase of such
shares.
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7. NON-TRANSFERABILITY OF OPTION.
During the Grantee's lifetime, the Option shall be exercisable only by
the Grantee or, in the event of the disability of the Grantee, by any guardian
or legal representative of the Grantee, and the Option shall not be transferable
except, in case of the Grantee's death, by will or the laws of descent and
distribution, nor shall the Option be subject to attachment, execution or other
similar process. In the event of (a) any attempt by the Grantee to alienate,
assign, pledge, hypothecate or otherwise dispose of the Option, except as
provided for herein, or (b) the levy of any attachment, execution or similar
process upon the rights or interest hereby conferred, the Option automatically
shall terminate and be null and void.
8. EMPLOYMENT NOT AFFECTED.
Neither the granting of the Option nor its exercise shall be construed
as granting to the Grantee any right with respect to continuance of employment
with the Company. Except as may otherwise be limited by a written agreement
between the Company and the Grantee, the right of the Company to terminate at
will the Grantee's employment with it at any time (whether by dismissal,
discharge, retirement or otherwise) is specifically reserved by the Company and
acknowledged by the Grantee.
9. AMENDMENT.
This Award Agreement may be amended by the Company only with the
written consent of the Grantee.
10. NOTICE.
Any notice to the Company provided for in this Award Agreement shall be
addressed to it in care of its President at its executive offices at 1001
Lakeside Avenue, Seventh Floor, Cleveland, Ohio 44114, and any notice to the
Grantee shall be addressed to the Grantee at the current address shown on the
payroll records of the Company. Any notice shall be deemed to be duly given if
and when properly addressed and posted by registered or certified mail, postage
prepaid.
11. INCORPORATION OF PLAN BY REFERENCE.
This Award has been granted pursuant to the terms of the Plan, the
terms of which are incorporated herein by reference, and this Award Agreement
shall in all respects be interpreted in accordance with the Plan. In furtherance
of the foregoing, this Award Agreement shall be subject to all of the provisions
of the Plan as from time to time in force, and in the event of any inconsistency
between this Award Agreement and the Plan, the Plan shall control. Unless the
context clearly requires otherwise, any capitalized term used in this Award
Agreement, but not defined herein, shall have the meaning given to such term in
the Plan.
12. MISCELLANEOUS.
(a) Notwithstanding any contrary provision in any employment agreement
or other agreement between the Company and the Grantee, all provisions in the
Grantee's employment agreement or any other agreement with the Company dealing
with performance units shall be null and void and of no force or effect.
(b) The validity, construction, interpretation and effect of this Award
Agreement shall exclusively be governed by and determined in accordance with the
laws of the State of Ohio, except to the extent preempted by federal law, and to
the extent so preempted, shall be governed by and determined in accordance with
federal law.
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IN WITNESS WHEREOF, the Company has caused its duly authorized officers
to execute this Award Agreement, and the Grantee has placed his or her signature
hereon, effective as of the Date of Grant.
PHONETEL TECHNOLOGIES, INC.
By: ________________________________
Its: _______________________________
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Grantee
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EXHIBIT B
ANTICIPATED INCOME TAX TREATMENT OF AWARDS
GRANTED UNDER
1999 MANAGEMENT INCENTIVE PLAN
Incentive Stock Options
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In general, an employee will not recognize taxable income at the time
an Incentive Stock Option is granted or exercised. However, the excess of the
Fair Market Value of the Shares acquired upon exercise of the Incentive Stock
Option over the exercise price is potentially subject to the alternative minimum
tax. Upon disposition of the Shares, capital gain or capital loss will be
recognized in an amount equal to the difference between the sale price and the
exercise price, provided that (1) the employee has not disposed of the Shares
within two years of the date of grant or within one year from the date of
exercise and (2) the employee has been employed by the Company or one of its
subsidiaries at all times from the date of grant until the date three months
before the date of exercise (one year in the case of permanent disability). If
the employee disposes of the Shares without satisfying both the holding period
and employment requirements (a "Disqualifying Disposition"), the employee will
recognize ordinary income at the time of the Disqualifying Disposition to the
extent of the difference between the exercise price and the lesser of the Fair
Market Value of the Shares on the date the Incentive Stock Option is exercised
or the amount realized in the Disqualifying Disposition. Any remaining gain or
loss is treated as a capital gain or capital loss.
The Company is not entitled to a tax deduction either upon the exercise
of an Incentive Stock Option or upon the disposition of the Shares acquired
thereby, except to the extent that the employee recognizes ordinary income in a
Disqualifying Disposition.
Non-Qualified Stock Options
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In general, an employee will not recognize taxable income at the time a
stock option, that does not qualify as an Incentive Stock Option (a
"Non-Qualified Stock Option"), is granted. An amount equal to the difference
between the exercise price and the Fair Market Value, on the date of exercise,
of the Shares acquired upon exercise of the Non-Qualified Stock Option will be
included in the employee's ordinary income in the taxable year in which the
Non-Qualified Stock Option is exercised. Upon disposition of the Shares acquired
upon exercise of the Non-Qualified Stock Option, appreciation or depreciation
after the date of exercise will be treated as either capital gain or capital
loss.
Generally, the Company will be entitled to a tax deduction in the
amount of the ordinary income realized by the employee in the year the
Non-Qualified Stock Option is exercised.
Stock Appreciation Rights
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The grant of Stock Appreciation Rights will have no immediate tax
consequences to the Company or the employee receiving the grant. The amount
received by the employee upon the exercise of the Stock Appreciation Rights will
be included in the employee's ordinary income in the taxable year in which the
Stock Appreciation Rights are exercised. The Company will be entitled to a
deduction in the same amount in that year.
Restricted Stock
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Unless an employee makes an election under Section 83(b) of the Code,
the employee will recognize no income, and the Company will be entitled to no
deduction, at the time Restricted Stock is awarded to the employee. When the
restrictions on Restricted Stock lapse or are otherwise removed, the employee
will recognize compensation income equal to the excess of the Fair Market Value
of the Restricted Stock on the date the restrictions lapse or are otherwise
removed over the amount, if any, paid by the employee for the Restricted Stock,
and the Company will be entitled to a deduction in the same amount if it
satisfies applicable withholding requirements. Dividends paid on Restricted
Stock during any restriction period will constitute income to the employee
receiving the dividends, and the Company will be entitled to a deduction in the
same amount. Upon disposition of Shares after the restrictions lapse or are
otherwise removed, any gain or loss realized by an employee will be treated as
short term or long term capital gain or loss depending upon the period of time
between the disposition and the earlier lapse or removal of the restrictions on
those Shares.
If an employee files an election under Section 83(b) with the Internal
Revenue Service within 30 days after the grant of Restricted Stock, the employee
will, on the date of the grant, recognize compensation income equal to the
excess of the Fair Market Value of the Shares on that date over the price paid
for those Shares, and the Company will be entitled to a deduction in the same
amount if it satisfies applicable withholding requirements.
The Company believes that, under the terms of the Plan, any Award of
Restricted Stock will constitute performance-based compensation and, as such,
will not be subject to the $1 million limit under 162(m) of the Internal Revenue
Code of 1986.
Stock Equivalent Units
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The grant of Stock Equivalent Units will not have any immediate tax
consequences to the employee receiving the Stock Equivalent Units or to the
Company. In general, at the time the Company pays any amount to the employee
with respect to the Stock Equivalent Units, the employee will recognize
compensation income equal to the amount of that payment, and the Company will be
entitled to a deduction in that amount.
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