UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): May 5, 2009
CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 000-51446 02-0636095
(State of Incorporation) (Commission (IRS employer
File Number) identification no.)
121 South 17th Street
Mattoon, Illinois 61938-3987
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (217) 235-3311
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under
the Exchange Act (17 CFR 240.13e-4(c))
ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF
DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS;
COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
AMENDED AND RESTATED CONSOLIDATED COMMUNICATIONS HOLDINGS, INC.
2005 LONG-TERM INCENTIVE PLAN
On May 5, 2009, the stockholders of Consolidated Communications
Holdings, Inc. (the "Company") approved the Consolidated
Communications Holdings, Inc. 2005 Long-Term Incentive Plan (As
Amended and Restated Effective May 5, 2009) (the "Plan"). The Board
of Directors of the Company (the "Board") had approved the Plan on
March 9, 2009 subject to stockholder approval.
The Plan is a compensation plan that provides for grants of stock
options, stock appreciation rights, stock awards and stock unit awards
to eligible employees and non-employee directors and grants of cash
awards to eligible employees.
The Plan was submitted for approval by the Company's stockholders
to ensure that certain awards qualify as "performance-based
compensation" under Section 162(m) of the Internal Revenue Code (the
"Code"), and are thus fully deductible by the Company for federal
income tax purposes. In addition, the Plan has been amended to among
other things: (i) expand the list of performance criteria to which
awards may be subject; (ii) provide for the payment of dividends with
respect to stock unit awards as well as stock awards, but limit the
payment of dividends on performance-based stock and stock unit awards
such that they are paid only to the extent the related performance
goals are satisfied; (iii) add share withholding as an alternative by
which to pay the option exercise price; and (iv) provide for the
settlement of stock unit awards in shares of stock as well as cash.
The material terms of the Plan are:
NUMBER OF SHARES AND MAXIMUM CASH INCENTIVE PAYMENTS. The number
of shares of the Company's common stock that may be issued under the
Plan remains at 750,000 shares. Of these 750,000 shares: (i) the
maximum number of shares issued as stock options to any participant in
any calendar year is 300,000; (ii) the maximum number of shares
pursuant to which stock appreciation rights are issued to any
participant in any calendar year is 300,000; (iii) no stock awards or
stock unit awards made in any calendar year can relate to shares
having a fair market value on the date of grant that exceeds
$6,000,000; and (iv) the maximum number of non-forfeitable shares
subject to stock awards or stock unit awards that may be issued under
the Plan is 300,000. In addition, no more than $5,000,000 may be paid
to a participant for each year in any performance period under a Cash
Incentive Program.
Shares issuable under the Plan may be authorized but unissued
shares or treasury shares. If there is a lapse, forfeiture,
expiration, termination or cancellation of any award made under the
Plan for any reason, the shares subject to the award will again be
available for issuance. In addition, any shares subject to an award
that are used as payment for an award or payment of withholding taxes
due in connection with an award will again be available for issuance,
and such shares will not count toward the number of shares issued
under the Plan. The number of shares of common stock issuable under
the Plan is subject to adjustment in the event of certain changes in
the capital structure of the Company or similar transactions, and in
each case, the Committee (as defined below) has the discretion to make
adjustments it deems necessary to preserve the intended benefits under
the Plan.
No award granted under the Plan may be transferred, except by
will and the laws of descent and distribution, or as permitted by the
Committee with respect to a stock-based award transferred without
value by the participant during his lifetime for estate planning
purposes.
ADMINISTRATION. The Plan is administered by the Compensation
Committee of the Board (the "Committee"). All members of the
Committee satisfy the "non-employee director" definition under
Rule 16b-3 of the Securities Exchange Act of 1934 and the "outside
director" definition under Section 162(m) of the Code. The Committee
has full authority to select the individuals who will receive awards
under the Plan, determine the form and amount of each of the awards to
be granted and establish the terms and conditions of awards.
ELIGIBILITY. All employees of the Company designated by the
Committee and all non-employee directors of the Company are eligible
to receive awards under the Plan.
AWARDS TO PARTICIPANTS. The Plan provides for awards of stock
options, stock appreciation rights, stock awards and stock unit awards
to all participants and for cash awards to participants who are
employees. Each stock-based award made under the Plan will be
evidenced by a written award agreement specifying the terms and
conditions of the award as determined by the Committee in its sole
discretion, consistent with the terms of the Plan.
STOCK OPTIONS. The Committee has the discretion to grant non-
qualified stock options and incentive stock options to participants
and to set the terms and conditions applicable to the options,
including the type of option, the number of shares subject to the
option and the vesting schedule; provided that the exercise price of
each stock option shall not be less than the closing sales price of
the Company's common stock on the date on which the option is granted
("fair market value") and each option shall expire 10 years from the
date of grant. Additional rules apply to incentive stock options.
STOCK APPRECIATION RIGHTS. The Committee has the discretion to
grant stock appreciation rights to participants. Each right entitles
the participant to receive the difference between the fair market
value of the common stock on the date of exercise of the right and the
exercise price thereof, multiplied by the number of shares with
respect to which the right is being exercised. The stock appreciation
right may be issued independently or together with a stock option, in
which case the exercise of a stock appreciation right will cancel the
related option with respect to the same number of shares for which the
stock appreciation right was exercised, and the exercise of an option
will cancel the related stock appreciation right with respect to the
same number of shares for which the option was exercised. Upon
exercise, the stock appreciation right will be paid in cash or in
shares of common stock (based upon the fair market value on the date
of exercise) or a combination thereof, as set forth in the award
agreement. The Committee has the discretion to set the terms and
conditions applicable to stock appreciation rights, provided that
(i) the exercise price of each stock appreciation right will be not
less than the fair market value of the common stock on the date of
grant, and (ii) each stock appreciation right will expire 10 years
from the date of grant.
STOCK AWARDS. The Committee has the discretion to grant stock
awards to participants. The number of shares awarded to each
participant, and the restrictions, terms and conditions of the award,
will be at the discretion of the Committee. Subject to the
restrictions, a participant will be a stockholder with respect to the
shares awarded to him and will have the rights of a stockholder with
respect to the shares, including the right to vote the shares and
receive dividends on the shares; provided that dividends otherwise
payable on any performance-based stock award, or stock dividends
otherwise payable with respect to any stock award, will be held by the
Company and will be paid only to the holder of the stock award to the
extent the restrictions on such stock award lapse.
STOCK UNIT AWARDS. The Committee has the discretion to grant
stock unit awards to participants. Each stock unit entitles the
participant to receive, on a specified date or event set forth in the
award agreement, one share of common stock of the Company or cash
equal to the fair market value of one share on such date or event, as
provided in the award agreement. The number of stock units awarded to
each participant, and the terms and conditions of the award, will be
at the discretion of the Committee. A participant will not be a
stockholder with respect to the stock units awarded to him prior to
the date they are settled in shares of common stock. Until the
restrictions on the stock units lapse, the participant will be paid an
amount equal to the dividends that would have been paid had the stock
units been actual shares; provided that such dividend equivalents
otherwise payable on any performance-based stock unit award, or stock
dividend equivalents otherwise payable on any stock unit award, will
be held by the Company and will be paid only to the holder of the
stock unit award to the extent the restrictions on such stock unit
award lapse.
CASH INCENTIVE AWARDS. The Committee has the discretion to adopt
one or more Cash Incentive Programs, pursuant to which employees will
be eligible for cash payments based upon the level of attainment of
pre-established performance goals set by the Committee with respect to
a performance period (which the Committee sets with a duration of one
to five years). The Committee has the discretion to set the terms and
conditions applicable to the cash incentive award, including the
eligible employees, the performance criteria and goals and the amount
of payments to be made upon attainment of the goals.
PERFORMANCE-BASED COMPENSATION. The Committee in its discretion
may provide that any stock award or stock unit award will be subject
to attainment of performance goals, including those that qualify the
awards as "performance-based compensation" under Section 162(m) of the
Code so that they are fully deductible by the Company for federal
income tax purposes. Payments under any Cash Incentive Program shall
be subject to the attainment of performance goals, including those
that qualify the payment as performance-based compensation under
Section 162(m) of the Code. In such case, the Committee will establish
performance goals for certain performance periods and targets for
achievement of the performance goals, and the performance-based
restrictions on the stock award or stock unit award will lapse, and
cash incentive payments will be made, if the performance goals and
targets are achieved for the designated performance period. The
performance goals will be based on one or more of the following
criteria: (i) free cash flow; (ii) free cash flow per share;
(iii) earnings before interest, taxes, depreciation, and amortization
("EBITDA"); (iv) improvement in EBITDA margins; (v) revenue growth;
(vi) maintenance of targeted capital structure and leverage ratios;
(vii) pre- or after-tax net income; (viii) earnings per share;
(ix) share price performance; (x) total stockholder returns;
(xi) economic value added; (xii) dividend payout ratio;
(xiii) broadband subscriber net additions; (xiv) customer service
operating results; (xv) network performance; and (xvi) any other
criteria the Committee deems appropriate. Performance goals may be
adjusted for any extraordinary items or other unusual or non-recurring
items (including acquisition expenses, extraordinary charges, losses
from discontinued operations, restatements and accounting charges and
restructuring expenses), as may be determined by the Committee.
PROVISIONS RELATING TO A "CHANGE IN CONTROL" OF THE COMPANY. The
Plan provides that if there is a "change in control" of the Company
(as defined in Section 15 of the Plan), and there is no assumption of
outstanding awards by the successor entity, or conversion of
outstanding awards into comparable equity awards of the successor
entity, then as of the effective date of the change in control all
stock options and stock appreciation rights will vest and all
restrictions on all outstanding stock awards and stock unit awards
will lapse, and if any restrictions relate to satisfying performance
goals, the performance goals will be deemed satisfied at target levels
(unless the target level was exceeded for any performance goal before
the effective date of the change in control, in which case the
restrictions will lapse based on actual attainment of the performance
goal). If required by the terms of the transaction, the Committee has
the right to cancel such grants after having given the participants a
reasonable time to exercise the options and stock appreciation rights
and take necessary action to receive stock or cash pursuant to stock
and stock unit awards. The Plan also provides that if in connection
with the change in control the Plan awards are assumed or converted by
the successor entity as described above, and within 24 months
following the effective date of the change in control the
participant's employment is terminated without cause or the
participant terminates employment for good reason, or a participant
who is a director is asked to resign for other than cause, all stock
options and stock appreciation rights will vest and all restrictions
on all outstanding stock awards and stock unit awards will lapse, and
if any restrictions relate to satisfying performance goals, the
performance goals will be deemed satisfied at target levels (unless
the target level was exceeded for any performance goal before the date
of termination of employment or service, in which case the
restrictions will lapse based on actual attainment of the performance
goal).
AMENDMENT AND TERMINATION OF THE PLAN; TERM OF THE PLAN. The
Board may terminate, suspend or amend the Plan from time to time,
without the approval of the stockholders, unless such approval is
required by applicable law or stock exchange rule, provided that
(i) no amendment shall be made to the Plan's change in control
provisions after the date of the change in control which would
adversely affect any rights that would vest on the effective date of
the change in control, and (ii) no amendment shall result in the
modification or cancellation of an award without the written consent
of the participant, unless there is a dissolution, liquidation, change
in control or change in capital structure of the Company.
Notwithstanding the foregoing, there shall be no amendment to the Plan
or any award agreement that results in the repricing of stock options
without stockholder approval (except in the case of an equitable
adjustment to the awards to reflect changes in the capital structure
of the Company or similar events).
TERM OF PLAN. The term of the Plan has been extended from July
21, 2015 to May 5, 2019 (i.e., 10 years after the effective date of
the Plan as amended and restated).
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(d) EXHIBITS.
Exhibit No. Description
----------- -----------
10.1 Consolidated Communications Holdings, Inc. 2005 Long-
Term Incentive Plan (As Amended and Restated Effective
May 5, 2009) (incorporated by reference to Exhibit A to
the Company's 2009 Proxy Statement for the Annual
Meeting held on May 5, 2009).
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: May 5, 2009
Consolidated Communications Holdings, Inc.
By: /s/ Steven L. Childers
--------------------------------------
Name: Steven L. Childers
Title: Senior Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
10.1 Consolidated Communications Holdings, Inc. 2005 Long-
Term Incentive Plan (As Amended and Restated Effective
May 5, 2009) (incorporated by reference to Exhibit A to
the Company's 2009 Proxy Statement for the Annual
Meeting held on May 5, 2009).