Exhibit 10.2
SEVERANCE
AGREEMENT
This Severance Agreement (“Agreement”), which is
effective as of
September 12, 2008
(the “Effective
Date”), is by and between
Joseph J. Euteneuer
(“Executive”),
who is Executive Vice President and Chief Financial Officer of Qwest
Communications International Inc., a Delaware corporation having its principal
executive offices in Denver, Colorado
(together with Qwest Corporation, (the “Company”)):
WHEREAS, the Company wishes to encourage Executive’s
continued service and dedication in the performance of Executive’s duties; and
WHEREAS, in order to induce Executive to remain in
the employ of the Company, and in consideration for Executive’s continued
service to the Company, the Company agrees that Executive shall receive the
benefits set forth in this Agreement in the event that Executive’s employment
with the Company is terminated in the circumstances described herein.
Therefore, in consideration of the mutual promises
set forth below, Company and Executive hereby agree as follows:
1.
TERM OF EMPLOYMENT; AT-WILL
EMPLOYMENT
. This Agreement does not contain any promise
or representation concerning the duration of Executive’s employment. Executive’s employment is at-will, and may be
altered or terminated by either Executive or the Company at any time, with or
without cause, and with or without notice.
This at-will employment relationship may not be modified unless in a
written agreement signed by Executive and either the Chief Executive Officer or
the Chief Administrative Officer.
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.
CHANGE IN CONTROL
a.
CHANGE IN CONTROL DEFINED:
For purposes of this Agreement,
“Change in Control” shall have the definition currently in the Qwest Equity
Incentive Plan (“Stock Plan”).
3.
TERMINATION
.
a.
Termination for Cause
. The Company may, in its sole discretion,
immediately terminate this Agreement and Executive’s employment for Cause by
giving notice to Executive. If Executive’s
employment is terminated for Cause pursuant to this paragraph 3.a., Executive
shall not be entitled to any severance payment or any other post-employment
obligation provided under this Agreement.
Any one or more of the following events shall, for purposes of this
Agreement, constitute Cause:
(1)
Commission
of an act deemed by the Company in its sole discretion to be an act of
dishonesty, fraud, misrepresentation or other act of moral turpitude that would
reflect negatively upon Qwest or compromise the effective performance of
Executive’s duties;
(2)
Unlawful
conduct that would reflect negatively upon Qwest or compromise the effective
performance of Executive’s duties, as determined by the Company in its sole
discretion;
(3)
Conviction
of (or pleading nolo contendere to) any felony or a misdemeanor involving moral
turpitude;
(4)
Continued
failure to substantially perform Executive’s duties to the satisfaction of the
Chief Executive Officer (other than such failure resulting from Executive’s
incapacity due to physical or mental illness) after the Chief Executive Officer
delivers written notice to Executive specifically identifying the manner in
which Executive has failed to substantially perform his or her duties and
Executive has been afforded a reasonable opportunity of at least thirty days to
substantially perform his or her duties; or
(5)
A
willful violation of the Qwest Code of Conduct or other Qwest policies that
would reflect negatively upon Qwest or compromise the effective performance of
Executive’s duties as determined by the Company in its sole discretion.
For two years following a
Change in Control, a termination for Cause shall require the approval of the
Company’s Board of Directors.
b.
Severance Payments When
Termination Not By Executive or By Executive With Good Reason.
The parties agree that the Company may terminate Executive’s employment
without Cause or that Executive may terminate his employment for Good Reason
(as defined below). Except under
circumstances described in subparagraph 3.c below, if Company terminates
Executive’s employment without Cause or if Executive terminates his employment
for Good Reason, and Executive signs a complete waiver and release of claims
against Qwest in the form attached hereto as Attachment A (“Waiver”), then
Company shall pay Executive the “Standard Severance Amount” defined below. The Waiver includes, among other terms, a
provision requiring Executive to pay back to Qwest any severance received by
Executive if after the payments are made it is determined that, while employed
by Qwest or any Qwest entity, Executive engaged in conduct constituting Cause. The Waiver does not include a release of
Qwest’s obligations, if any, to indemnify Executive under Qwest bylaws or
applicable state law. The Standard
Severance Amount will equal one and one-half times Executive’s highest annual
base salary in effect during the 12 months preceding the termination of
Executive’s employment. The Standard
Severance Amount will be paid over an 18 month period through the Company’s
regular management payroll processes, commencing on the Severance Payment Date,
as defined in Section 22.d. If, at
the end of the 18 month period, Executive
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has
not breached or threatened to breach any part of this Agreement, Executive will
also receive a lump-sum payment equal to one and one-half times Executive’s
highest target annual bonus in effect during the 12 months preceding the
termination of Executive’s employment, minus any applicable or legally-required
withholdings.
(1)
Termination for Good Reason
.
Executive may terminate his or her employment for Good Reason after
giving written notice to the Company within 60 days after an event constituting
Good Reason; provided, however, that the Company shall have 30 days after such
notice is given to cure.
Good Reason shall mean:
(A)
a reduction of either Executive’s base salary
or Executive’s target annual bonus, where the salary or annual target bonus are
measured immediately prior to such reduction, as opposed to at the time of
Executive’s execution of this Agreement;
(B)
a reduction in Executive’s title from
Executive Vice President and Chief Financial Officer of the Company, or a
requirement that Executive report to any person other than the Chief Executive
Officer of the Company or the Company’s Board of Directors;
(C)
a material reduction of Executive’s
responsibilities, where such responsibilities are measured immediately prior to
such reduction, as opposed to at the time of Executive’s execution of this
Agreement;
(D)
Company’s material breach of this Agreement;
(E)
Company’s failure to obtain the agreement of
any successor to honor the terms of this Agreement; or
(E)
A requirement that Executive’s primary work
location be moved to a location that is greater than thirty-five straight line
miles from Executive’s primary work location immediately prior to the
imposition of such requirement.
“Good
Reason” shall not include any other circumstances, including but not limited
to, Executive’s discharge for Cause, Executive’s resignation or retirement
(other than in the circumstances set forth in (A) – (E) above), or
any leave of absence.
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c.
Change in Control Termination
. If
Company (with the required approval of the Company’s Board of Directors)
terminates Executive’s employment without Cause or Executive terminates his
employment for Good Reason within two years following a Change in Control,
then, provided Executive signs a Waiver, as described in subparagraph 3.b
above, Company shall pay Executive the Change in Control Severance Amount
defined in the following sentence: The
Change in Control Severance Amount payable to Executive will equal (a) (i) 2.99
times Executive’s annual base salary in effect at the time of the termination
of Executive’s employment, or, if greater, Executive’s annual base salary in
effect at the time of the Change in Control, plus (ii) 2.99 times
Executive’s target annual bonus in effect at the time of the termination of
Executive’s employment, or, if greater, Executive’s target annual bonus in
effect at the time of the Change in Control.
The Change in Control Severance amount will be paid in a lump sum on the
Severance Payment Date, as defined in Section 22.d.
d.
COBRA Coverage
. If
Executive’s employment is terminated pursuant to subparagraph 3.b above, Executive
may be eligible for Qwest-subsidized COBRA for a period of 18 months (unless
Executive becomes ineligible for or forfeits severance benefits pursuant to the
terms of this Agreement) following the Executive’s election of COBRA health
care continuation coverage (generally beginning as of the first day of the
first month following the month in which Executive is designated as terminated
on the Qwest payroll system) on the same basis as for active employees under
the group medical plan. This provision shall
not extend the period for which any Executive is eligible for COBRA
continuation coverage.
4.
OFFSET
. To
the extent permitted by law, any severance benefits received under this
Agreement may be reduced by the amount(s) of any outstanding monetary debts
Executive owes to Qwest. Such debts will
be treated as satisfied to the extent of the withheld payments.
It is the express intent of
Qwest that the monies received under this Agreement be a set-off against
amounts to which you are entitled under any applicable state unemployment
statute.
5.
NONDISCLOSURE
.
Executive will not disclose outside of Qwest or to any person within
Qwest who does not have a legitimate business need to know, any Confidential
Information (as defined below) during Executive’s employment with the Company
or any other Qwest entity. Executive
will not disclose to anyone or make any use of any Confidential Information of
Qwest after Executive’s employment with Qwest ends for any reason, except as
required by law after timely notice is given by Executive to Qwest. This agreement not to disclose or use
Confidential Information means, among other things, that Executive, for a
period of 18 months beginning on the effective date of the termination of
Executive’s employment with the Company or any other Qwest entity for any
reason, may not take or perform a job whose responsibilities would likely lead
Executive to disclose or use Confidential Information. Executive
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acknowledges and agrees that the assumption and
performance of such responsibilities, in that situation, would likely result in
the disclosure or use of Confidential Information and would likely result in
irreparable injury to Qwest. Moreover,
during Executive’s employment with Qwest, Executive shall not disclose or use
for the benefit of Qwest, Executive or any other person or entity any
confidential or trade secret information belonging to any former employer or
other person or entity to which Executive owes a duty of confidence or
nondisclosure of such information. If a
court determines that this provision is too broad, Executive and Company agree
that the court shall modify the provision to the extent (but not more than is)
necessary to make the provision enforceable. “Confidential Information” is any
oral or written information not generally known outside of Qwest, including
without limitation, trade secrets, intellectual property, software and
documentation, customer information (including, without limitation, customer lists),
company policies, practices and codes of conduct, internal analyses, analyses
of competitive products, strategies, merger and acquisition plans, marketing
plans, corporate financial information, information related to negotiations
with third parties, information protected by Qwest’s privileges (such as the
attorney-client privilege), internal audit reports, contracts and sales
proposals, training materials, employment and personnel records, performance
evaluations, and other sensitive information.
This agreement does not relieve Executive of any obligations Executive
has to Qwest under law. Nothing in this agreement shall limit, restrict,
preclude or influence Executive’s testimony in any way or cause Executive not
to provide truthful testimony or information in any manner or in response to
any inquiry by a governmental official.
6.
NONCOMPETE
. In
light of Executive’s senior level position with Qwest, an international
corporation engaged in a highly competitive business environment, for a period
of 18 months beginning on the effective date of the termination of Executive’s
employment with the Company or any other Qwest entity, regardless of the reason
for the termination and regardless of the party bringing about the termination,
Executive agrees not to, directly or indirectly, engage in any business or
activity which is in direct competition with the Company or of any of its
subsidiaries or affiliates in the telecommunications business. The foregoing shall not limit Executive’s
right to accept employment with an investment bank or public accounting firm,
provided Executive does not work or advise on any matters regarding or
involving Company without Company’s written permission, and shall not apply to
passive investments by Executive of up to 2% of the voting stock of any
publicly traded company or 5% of the voting stock or other securities of any
privately held company, or to service by Executive on boards of directors of
companies as permitted under this Agreement, regardless of whether such company
competes with the Company. If a court or arbitrator determines that this
provision is too broad, Executive and Company agree that the court or
arbitrator should modify the provision to the extent (but not more than is)
necessary to make the provision enforceable.
7.
NONSOLICITATION/NO-HIRE
. For
a period of one year beginning on the effective date of the termination of
Executive’s employment with the Company or
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any other Qwest entity, regardless of the reason for
the termination and regardless of the party bringing about the termination,
Executive agrees not to induce any employee of Qwest to leave Qwest’s
employment. This agreement means, among
other things, that Executive may not have any part in hiring anyone who is a
Qwest employee, even if Executive is contacted by the Qwest employee
first. For these purposes, employees of
Qwest shall include all persons who are employed by the Company or any other
Qwest entity at the time Executive violates this paragraph 7 or were employed
by the Company or any other Qwest entity at any time during the six months
preceding such violation. If a court
determines that this provision is too broad, Executive and Company agree that
the court should modify the provision to the extent (but not more than is)
necessary to make the provision enforceable.
8.
REMEDIES
FOR VIOLATION OF PARAGRAPHS 5, 6, OR 7.
The
Executive agrees that it would be difficult to measure any damages caused to
Qwest which might result from any breach by the Executive of the promises set
forth in paragraphs 5, 6, and 7, and that in any event money damages would be
an inadequate remedy for any such breach.
Accordingly, subject to paragraph 9, the Executive agrees that if the
Executive breaches, or proposes to breach, any portion of this Agreement, Qwest
or the Company shall be entitled, in addition to all other remedies that it may
have, to an injunction or other appropriate equitable relief to restrain any
such breach without showing or proving any actual damage to Qwest. The Company acknowledges that Executive has
disclosed the name of his spouse’s current employer to the Company and agrees
that the fact of such employment shall not, in and of itself, be treated as a
basis for finding that Executive has breached this Agreement.
9.
DISPUTE RESOLUTION
; ARBITRATION
.
Executive and the Company agree
that in the event a dispute arises concerning or relating to Executive’s
employment with the Company, or any termination therefrom, the parties first
shall attempt in good faith to resolve such dispute through mediation. If a resolution through mediation is not
reached, then such dispute shall be submitted to binding arbitration in
accordance with the employment arbitration rules of Judicial Arbitration
and Mediation Services (“
JAMS
”) by a single impartial arbitrator
experienced in employment law selected as follows: Company and Executive will attempt in good
faith to agree upon impartial arbitrator within thirty days of a request for
arbitration. If the parties cannot
agree, they shall request a panel of ten arbitrators from JAMS and select an
arbitrator pursuant to the JAMS rules.
The arbitration shall take place in Denver, Colorado, and both Executive
and the Company agree to submit to the jurisdiction of the arbitrator selected
in accordance with JAMS’ rules and procedures. The Federal Arbitration Act, as amended, 9
U.S.C. § 1
et seq.
, (“
FAA
”) and not state
law, shall govern the arbitrability of all claims, provided they are
enforceable under the FAA. Other than as
set forth herein, the arbitrator shall have no authority to add to, detract
from, change, amend, or modify existing law.
The arbitrator shall have the authority to order such discovery as is
necessary for a fair resolution of the dispute.
The arbitrator shall also have the authority to award any and all relief
or remedies provided under the statute or other law pursuant to which an
asserted prevailing claim or defense is raised, as if the matter were being
decided in court. The arbitrator may award punitive damages, if and
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only
to the extent allowed by Title VII of the Civil Rights Act of 1964, as amended;
the Civil Rights Act of 1991, as amended; the Age Discrimination in Employment
Act of 1967, as amended; and the Americans with Disabilities Act of 1990, as
amended; and the arbitrator shall be bound by any limitations on the amount of
punitive or other damages imposed by said statutes. The arbitrator has no other
authority to award punitive damages. The
arbitrator will apply applicable statutes of limitation, including contractual
statutes of limitations, will honor claims of privilege recognized by law, and
will take reasonable steps to protect confidential or proprietary information,
including the use of protective orders. The prevailing party in any arbitration
shall be entitled to receive reasonable attorneys’ fees, only to the extent
such fees are provided by the statute or other law pursuant to which an
asserted claim or defense is raised, as if the matter were being decided in
court. The arbitrator’s decision and award shall be final and binding, as to
all Claims that were or could have been raised in the arbitration, and judgment
upon the award rendered by the arbitrator may be entered by any court having
jurisdiction thereof. Executive will pay
the arbitrator’s fees and expenses up to $150 and Qwest will pay any arbitrator
fees and expenses in excess of such amount. Qwest will pay all of the
arbitrator’s fees and expenses if it commences the arbitration. The existence
and subject matter of all arbitration proceedings, including without
limitation, any settlements or awards there under, shall remain confidential
and be subject to the Confidentiality provision of this Agreement. Executive
and Qwest agree that if any term or portion of this Arbitration provision is,
for any reason, held to be invalid or unenforceable or to be contrary to public
policy or any law, then the invalid or unenforceable term or portion shall be
severed in its entirety from this Agreement and the remainder of this
Arbitration provision shall not be affected by any such invalidity or
unenforceability but shall remain in full force and effect, as if the invalid
or unenforceable term or portion thereof had not existed within the Arbitration
provision. Executive understands that
Qwest would suffer irreparable harm in the event of breached confidentiality,
and such harm would not be fully compensable in monetary damages. If any party
hereto files a judicial action asserting Claims subject to this Arbitration
provision, and another party successfully stays such action and/or compels
arbitration of such Claims, the party filing the initial judicial action shall
pay the other party’s costs and expenses incurred in seeking such stay and/or
compelling arbitration, including reasonable attorneys’ fees. THE COMPANY AND EMPLOYEE FURTHER AGREE THAT
THE DISPUTE RESOLUTION PROCEDURE AS PROVIDED IN THIS PARAGRAPH 9 SHALL BE THE EXCLUSIVE AND BINDING METHOD FOR
RESOLVING ANY SUCH DISPUTE AND WILL BE USED INSTEAD OF ANY COURT ACTION, WHICH
IS HEREBY EXPRESSLY WAIVED, EXCEPT FOR ANY REQUEST BY EITHER PARTY HERETO FOR
TEMPORARY OR PRELIMINARY INJUNCTIVE RELIEF, OR A CHARGE OF DISCRIMINATION FILED
WITH AN ADMINISTRATIVE AGENCY.
10.
COOPERATION AND REIMBURSEMENT
. Executive agrees, both during
Executive’s employment and following the termination of Executive’s employment,
to cooperate reasonably with the Company or any other Qwest entity in
connection with any dispute, lawsuit, arbitration, or any internal or external
investigation
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involving Qwest or any of their predecessors (a “Proceeding”)
with respect to which Qwest believes in good faith that Executive may possess
relevant information. In that event,
upon reasonable notice and at reasonable times, and for reasonable periods,
Executive agrees to make himself or herself available for interviews, witness
preparation sessions, and appearances in connection with any Proceeding (including,
but not limited to, appearances at depositions, hearings and trials).
Recognizing that upon Executive’s separation from Company, participating in
interviews or witness preparation sessions may be a burden, Company agrees to
reimburse Executive for the time Executive spends involved in interviews and
witness preparation sessions requested by Qwest at a rate equal to Executive’s
final base salary, computed on an hourly basis (assuming a 40 hour work week),
for such time actually spent in such interviews or witness preparation
sessions. In addition, Company will
reimburse Executive for reasonable expenses Executive incurs in connection with
such interviews and witness preparation sessions. Company will not be obligated to reimburse
Executive for lost wages, lost opportunities, or other financial consequences
of such cooperation, or to make any other payment to Executive other than the
payments by Company referred to in the two previous sentences of this paragraph
of this Agreement; provided, however, nothing in this paragraph 10 shall impair
or limit any rights or entitlement Executive may have to indemnification,
advancement and director’s and officer’s liability insurance coverage. The parties further agree that Company will
not, and will not be obligated to, reimburse Executive for any time spent
testifying in any Proceeding (including, but not limited to, appearances at
depositions, hearings and trials), although Company will reimburse reasonable
expenses for such appearances, as provided above. Nothing in this Agreement shall limit,
restrict, preclude, require or influence Executive’s testimony in any
Proceeding or cause Executive not to provide truthful testimony or information
in any matter or in response to any inquiry by a government official or
representative. Company’s obligation to
reimburse Executive as described above is conditional upon Executive providing,
at all times, information that he objectively, reasonably and in good faith
believes to be truthful in connection with any Proceeding. The Company shall also pay the reasonable
expenses of an attorney Executive engages to advise him in connection with the
foregoing, but only if there is a conflict of interest that would prevent the
Company’ own outside or inside legal counsel from adequately representing
Executive’s interest as well as the Company’s interests and with the Company’s
prior approval.
11.
INDEMNIFICATION
. Both during Executive’s employment and after
the termination of Executive’s employment for any reason, Company, or any
subsidiary or successor of Company of which Executive is an officer or member
of the board of directors, shall indemnify Executive and the Company shall
advance Executive’s related expenses when and as incurred, including but not
limited to attorney fees to the fullest extent required or permitted by the
current Bylaws and applicable law.
During his employment by the Company and thereafter so long as the
Executive may have liability arising out of his obligations as an officer of
the Company, the Company agrees to continue and maintain a director’s and
officer’ liability insurance policy
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covering the Executive with coverage no less than
that available to active officers of the Company.
12.
SUCCESSORS AND ASSIGNS
. This Agreement is intended to bind and inure
to the benefit of and be enforceable by Executive, Executive’s assigns, the
Company, any other Qwest entity, and their successors and assigns.
13.
CHOICE OF LAW
. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by the internal
law, and not the law of conflicts, of the State of Colorado.
14.
SEVERABILITY
. If one or more terms, provisions or parts of
this Agreement are found by a court or arbitrator to be invalid, illegal, or
incapable of being enforced by any rule of law or public policy, the
terms, provisions or parts shall be modified to the extent (but not more than
is) necessary to make the provision enforceable. Additionally, all other terms, provisions and
parts of this Agreement shall nevertheless remain in full force and effect.
15.
COMPLETE AGREEMENT
. This Agreement and the Offer Letter
(Attachment B) in conjunction with which
this Agreement is being entered into (collectively, for purposes of this
Paragraph 15, the “Agreement”) contains the entire understanding of the parties
with respect to the matters addressed in this Agreement, and supersedes all
prior representations, understandings and agreements of the parties with
respect to the matters addressed in this Agreement, including, but not limited
to, any and all prior agreements for the payment of severance benefits. The parties acknowledge that no promises or
representations have been made to induce Company or Executive to sign this
Agreement other than as expressly set forth in this Agreement, and that each
party has signed this Agreement as a free and voluntary act. No term or provision of this Agreement may be
modified or extinguished, in whole or in part, except by a writing which is
dated and signed by both Executive and the Chief Executive Officer or Chief
Administrative Officer of Company and approved by the Company’s Board of
Directors.
16.
CONSTRUCTION; REPRESENTATION
. In any interpretation of this
Agreement, any ambiguities shall not be construed against any party on the
basis that the party was the drafter.
Executive represents that Executive is knowledgeable and sophisticated
as to business matters, including the subject matter of this Agreement, that he
has read this Agreement and that he understands its terms. Executive acknowledges that, prior to
assenting to the terms of this Agreement, Executive has been encouraged to, and
has been given a reasonable amount of time to review it, to consult with
counsel of Executive’s choice, and to negotiate at arm’s-length with the
Company as to its contents. Executive
and Company agree that the language used in this Agreement is the language
chosen by the parties to express their mutual intent, and that they have
entered into this Agreement freely and voluntarily and without pressure or
coercion from anyone.
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17.
CONDITIONAL REPAYMENT OF PAYMENTS
AND BENEFITS.
If Executive receives benefits
under Paragraph 3.b above, and, within two years following Executive’s
termination of employment, Company determines that during Executive’s
employment with Qwest, Executive engaged in conduct that would have constituted
“Cause” for termination (as defined in 3.a above), regardless of (i) when
during Executive’s employment with Qwest such conduct occurred, (ii) when
Qwest knew or learns of such conduct or should have known of such conduct, or (iii) what
Qwest now knows or should have known about Executive’s conduct, then Company shall provide to Executive (or, if
applicable, Executive’s estate or beneficiary) written notification of such
determination, which written notification shall expressly set forth the basis
for Company’s determination in reasonable detail. After Company provides this written
notification to Executive, it may stop or withhold any payments which have not
been made under this Agreement. If
Executive disputes that such Cause exists or existed, Executive and his or her
counsel shall make a presentation to the Company to request that Company
withdraw such determination. If the
matter is not settled or resolved after Executive’s presentation to the
Company, either party may commence an arbitration pursuant to the procedure set
forth in Paragraph 9. In addition, if
Executive breaches Executive’s obligations under the Nondisclosure or
Noncompete provisions of this Agreement, Company may stop or withhold any
payments which have not been made under this Agreement.
If a court finds that Cause exists or existed or that
Executive has breached Executive’s obligations under the Nondisclosure
(Paragraph 5) or Noncompete (Paragraph 6) provisions of this Agreement, or if
Executive does not timely commence an arbitration disputing Company’s Cause determination,
Executive shall make prompt repayment to Company of the cash payments provided
in Paragraph 3.b of this Agreement and other benefits received by Executive
pursuant to this Agreement (including, but not limited to, the value of any
discounted COBRA coverage)
.
Consistent with applicable law, any repayments
shall include an interest factor equal to the applicable federal short term
interest rate pursuant to Internal Revenue Code section 1274. Interest shall begin to accrue on the 31st
day after Executive (or, if applicable, Executive’s estate or beneficiary)
received Company’s written notification of its determination that such Cause
exists or existed, and shall continue to accrue until complete repayment is
made to Company. If Company
notifies Executive (or, if applicable, Executive’s estate or beneficiary) in writing of the
determination that Cause for termination exists prior to having made the
payment required pursuant to Paragraph 3.b of this Agreement, such payment
shall not be made unless the Company withdraws its determination, if the
arbitrator determines that Cause did not exist, or if the parties agree
otherwise.
18.
RE-EMPLOYMENT
. Executive agrees that if at any time during
Executive’s severance period Executive accepts employment with Qwest
Communications International Inc., Qwest Corporation, any of their wholly-owned
subsidiaries or any successor(s) thereto, all severance benefits to which
he or she is
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entitled for the remainder of the severance period
shall cease effective the date Executive accepts the position.
19.
WAIVER OF BREACH
. The waiver by either Company or Executive of
a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any prior or subsequent breach by either party.
20.
HEADINGS
. The headings contained in this Agreement are
for convenience only, do not constitute part of the Agreement and shall not
limit, be used to interpret or otherwise affect in any way the provisions of
the Agreement.
21.
NOTICES
. Any notices provided hereunder must be in
writing and shall be deemed effective on the earlier of personal delivery
(including personal delivery by telecopy or private overnight carrier) or the
third day after mailing by first class mail to the recipient at the address
indicated below:
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To the Company:
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Executive Vice President,
General Counsel and
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Chief Administrative
Officer
Qwest Communications International Inc.
1801 California Street
Denver, CO 80202
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To Executive:
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Joseph J. Euteneuer
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At
the address on file with the Company
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With a copy to:
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Stephen T. Lindo
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Willkie Farr &
Gallagher LLP
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787 Seventh Avenue
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New York, NY 10019
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or to such other address or
to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party.
22.
COMPLIANCE
WITH SECTION 409A OF THE
INTERNAL REVENUE
CODE
.
Notwithstanding
any other provision of this Agreement, in the event that any payment or the
provision of any benefit provided under this Agreement is treated as “deferred
compensation” within the meaning of Section 409A of the Code and any
related guidance or regulations (“Section 409A”),
after application of all available exceptions
and exclusions from such treatment,
(collectively “Section 409A Deferred Compensation”), the following
provisions shall apply:
a.
Separation
from Service
. In any case where
Executive’s employment with the Company has terminated but Executive continues
to provide services of any nature following such termination, whether as an
employee or independent contractor to the Company, or to any of the Company’s
subsidiaries or affiliates, the payment (or commencement of a series of
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payments) under the Agreement of any Section 409A Deferred
Compensation otherwise required to be paid upon a termination of employment
shall instead be delayed until such time as the circumstances of such
termination are also treated as a “separation from service” under Section 409A
(“Separation from Service”). All such
deferred compensation shall instead be paid (or commence to be paid) to
Executive on the schedule set forth in Agreement, as if Executive had undergone
such termination of employment on the date of his ultimate Separation from Service.
b.
Six
Month Delay
. If Executive is a
“specified employee” within the meaning of Section 409A, then the payment or
provision of Section 409A Deferred Compensation shall be made as set forth
below; provided, however, no such payment or provision shall be made before the
date that is six months after Executive’s Separation from Service (or, if
earlier, the date of Executive’s death) (the “6-Month Delay”). The determination of whether Executive is a
“specified employee” shall be made by the Company in accordance with Section
409A.
(1)
Payment
of Cash Benefits
. Any cash payment
hereunder to Executive, including, but not limited to the Standard Severance
Amount, shall be paid according to the following provisions:
(A)
the
Standard Severance Amount shall be paid out as follows:
(i)
a
lump sum payment equal to one-third of the Standard Severance Amount will be
paid within
15 business days following the
6-Month
Delay;
(ii)
the
remainder of the Standard Severance Amount will be paid, in equal installments
in accordance
with
the Company’s regular management
payroll processes for 12 months beginning as soon as administratively feasible
after the payment under paragraph 22(b)(1)(A)(i) is made; and
(iii)
if,
at the end of the 18-month period
following Separation
from Service
, Executive has not breached or
threatened to breach any part of this Agreement, Executive also will receive a
lump-sum payment equal to one and one half times Executive’s highest annual
target bonus in effect during the 12 months preceding the termination of
Executive’s employment, minus any applicable or legally-required withholdings
, and such payment
will be paid within 15 business days following the end of the 18-month period
following Executive’s Separation from Service
.
(B)
Any
other provision
of
cash benefits
that are subject to and
not covered by applicable exceptions to Section 409A and
that are payable before the 6-Month Delay shall be paid as follows:
(i)
a
lump sum payment equal to one-third of the total cash benefit will
be within 15
business days
following the 6-Month Delay; and
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(ii) the
remainder of the total cash benefit will be paid, in equal installments in
accordance with the Company’s regular management payroll processes for 12
months beginning as soon as administratively feasible after the payment under
paragraph 22(b)(1)(B)(i) is made.
(2)
Payment of Noncash Benefits
. The payment for any noncash benefits that
constitute Section 409A Deferred Compensation, including, but not limited to,
any applicable premium payments related to such noncash benefits, shall be made
by Executive during the 6-Month Delay, and Executive shall be reimbursed by the
Company for such payments as soon as administratively practicable following the
expiration of the 6-Month Delay. The
Company shall provide timely notice to Executive of all required payments and
rights of election, in accordance with applicable law and the terms of
applicable plan documents, but the Executive shall be solely liable for all
timely payments and elections as may be necessary to retain such noncash
benefits, and the Company shall not be liable to Executive, any dependent
and/or qualified beneficiary for any loss of any kind, including the loss of
noncash benefits relating to Executive’s failure to timely make any payments or
elections as required under the applicable benefit plan or this paragraph
22. By signing this Agreement, Executive
acknowledges this provision and the ramifications, including the potential loss
of benefits, of the failure to comply with this provision.
c.
Modification
. The payment or provision of benefits under
any other arrangement under this Agreement that is subject to Section 409A may
be modified or amended in order to comply with Section 409A.
d.
Waiver
. To the extent any payments due under the
Agreement as a result of Executive’s Separation from Service are subject to
Executive’s execution and delivery of a Waiver, in the absence of a bona
fide dispute regarding the amounts owed, (1) the payments shall commence
on the Severance Payment Date, (2) if Executive fails to execute
such Waiver on or prior to the Severance Payment Date or timely
revokes such Waiver thereafter, Executive shall not be entitled to
any payments or benefits otherwise subject to the Waiver, and (3) in
any case where the Separation from Service date and the Severance
Payment Date fall in two separate taxable years, any payments required to be
made to Executive that are subject to the Waiver and are treated as
nonqualified deferred compensation for purposes of Section 409A shall be
made in the later taxable year. The
term “Severance Payment Date” shall mean the date that is 45 days after
the Executive’s Separation from Service.
e.
Section 409A Compliance
. All provisions of this Agreement are meant to
be exempt from compliance with Section 409A, to the maximum extent permitted,
and otherwise to comply with Section 409A.
Accordingly, all provisions of this Agreement shall be construed in a
manner consistent with avoiding taxes or penalties under Section 409A. Notwithstanding the foregoing,
13
the Company does not guarantee any particular tax treatment and the
Company shall have no liability with regard to any failure to comply with Section 409A.
23. NO MITIGATION OF DAMAGES
. Executive shall not be required to mitigate
damages or the amount of any payment provided for under this Agreement by
seeking other employment or otherwise, nor shall the amount of any payment
provided for under this Agreement be reduced by any compensation earned by
Executive as a result of employment by another employer or by retirement
benefits after the Date of Termination.
The provisions of this Agreement, and any payment provided for
hereunder, shall not reduce any amounts otherwise payable, or in any way
diminish Executive’s then existing rights, or rights which would accrue solely
as a result of the passage of time, under any Company benefit plan or other
contract, plan or arrangement.
IN WITNESS WHEREOF, the parties now execute this
Agreement, to be effective as of the Effective Date.
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QWEST COMMUNICATIONS
INTERNATIONAL INC.:
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By:
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Richard N. Baer
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Executive Vice President, General
Counsel and
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Chief Administrative Officer
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EXECUTIVE:
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By:
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Joseph J. Euteneuer
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14
ATTACHMENT A
WAIVER AND RELEASE AGREEMENT
1.
Release and Waiver of Claims and
Covenant Not to Sue
.
As
a free and voluntary act, you hereby release and discharge and covenant not to
sue, Qwest Communications International Inc., any present or former subsidiary
or affiliated Company, any predecessor (including U S WEST and all its
affiliates) or successor, and the directors, officers, employees, shareholders
and agents of any or all of them, (hereinafter “Qwest”), from any and all
debts, obligations, claims, liability, damages, punitive damages, demands,
judgments and/or causes of action of any kind whatsoever, including
specifically but not exclusively:
·
all
claims relating to or arising out of your employment with Qwest and/or U S
WEST;
·
all claims arising out of your
Severance Agreement (except for claims arising under this Agreement);
·
all claims relating to or arising
from any claimed breach of an alleged oral or written employment contract,
quasi-contracts, implied contracts, payment for services, wages or salary
and/or promissory estoppel;
·
any alleged tort claims;
·
any claims for libel and/or
slander;
·
all claims relating to purported
employment discrimination or civil rights violations or arising under any
federal or state employment statutes including, without limitation, claims
under Title VII of the Civil Rights Act of 1964, as amended; claims under the
Civil Rights Act of 1991; claims under the Age Discrimination in Employment Act
of 1967, as amended; claims under 42 U.S.C. § 1981, § 1981a, § 1983, § 1985, or
§ 1988; claims under the Family and Medical Leave Act of 1993; claims under the
Americans with Disabilities Act of 1990, as amended; claims under the
Rehabilitation Act of 1973; claims under the Fair Labor Standards Act of 1938,
as amended; claims under the Worker Adjustment and Retraining Notification Act;
claims under the Colorado Anti-Discrimination Act; and claims under the Employee
Retirement Income Security Act of 1974, as amended; or any other applicable
federal, state or local statute or ordinance, including claims for attorneys’
fees;
15
·
any claim for any disability
payments under the Qwest Disability Plan or Qwest Pension Plan after your
termination date. The reference to the
Qwest Disability Plan and Qwest Pension Plan includes any successor or predecessor
of such plans such as the former Sickness and Accident Disability Plan or Long
Term Disability Plan of any Qwest or U S WEST entity and all benefits
thereunder;
·
any and all claims which you might
have or assert against Qwest (1) by reason of your employment with and/or
termination of employment from Qwest and all circumstances related thereto; or (2) by
reason of any other matter, cause, or dispute
whatsoever between you and Qwest which arose prior to the effective date
of this Agreement. This Agreement
excludes any claims you may make under (1) the applicable state
unemployment compensation laws, (2) applicable workers’ compensation
statutes, (3) for indemnification or advancement to the extent permitted
or required by the bylaws of a Qwest company, your Severance Agreement or applicable
state law; (4) claims as a shareholder of Qwest; (5) the right to
enforce the severance and benefit continuation provisions of your Severance
Agreement and any other provision of your Severance Agreement that by its terms
extends beyond your termination of employment; (6) claims for vested
employee benefits; and (7) claims which arise after the execution of this
Waiver and Release Agreement;
·
your right to seek individual
relief on your own behalf for any charges of discrimination filed with any
federal, state or local agency, pending or otherwise, arising from or related
to your employment or termination of employment with Qwest.
2.
Dispute Resolution; Arbitration
.
By
signing this Waiver and Release Agreement, you voluntarily, knowingly and
intelligently reaffirm your agreement to paragraph 9 (Dispute Resolution;
Arbitration of your Severance Agreement.
3.
You agree that
the monies and benefits described above are considerations to which you would
not otherwise be entitled unless you sign this Agreement, and that these
considerations constitute payment in exchange for signing this Agreement.
4.
If one or more
terms, provisions or parts of this Agreement are found by a court or arbitrator
to be invalid, illegal, or incapable of being enforced by any rule of law
or public policy, the terms, provisions or parts shall be modified to the
extent (but not more than is) necessary to make the provision enforceable. You agree that if any portion of this
Agreement is found to be unenforceable or prohibited, the remainder of this
Agreement shall remain in full force and effect, unless the
16
material
terms and intent of this Agreement are materially changed by the fact that a
portion of this Agreement is unenforceable or prohibited. .
5.
You agree that this Agreement shall not be
admissible in any proceeding as evidence of any improper conduct by Qwest
against you and Qwest denies that it has taken any improper action against you
in violation of any federal, state, or local law or common law principle.
6.
You acknowledge that no promises or
representations have been made to induce you to sign this Agreement other than
as expressly set forth herein and that you have signed this Agreement as a free
and voluntary act.
7.
You acknowledge that this release means, in
part, that you give up all your rights to damages and/or money based upon any
claims against Qwest of age discrimination.
You do not waive your rights to make claims for damages and/or money
which arise after the date this Agreement is signed. Under the Age Discrimination in Employment
Act, you have the right within seven days of the date you sign this Agreement
to revoke your waiver of rights to claim damages and/or money. In the event you revoke your agreement to be
obligated to the terms of this Agreement, the benefits offered herein shall be
null and void, meaning you will receive no involuntary termination benefits
under your Severance Agreement. To be
effective, your revocation must be in writing and delivered to Executive Vice
President, General Counsel and Chief Administrative Officer, Qwest Communications
International, Inc. 1801 California Street, Denver, Colorado 80202, within
the seven-day period. If by mail, the
revocation must be (1) postmarked within the seven-day period, (2) properly
addressed, and (3) sent by certified mail, return receipt requested.
8.
You acknowledge that you (a) have had
sufficient opportunity (not less than 45 days) to review this Waiver and
Release Agreement, (b) have been encouraged to consult with and have had
sufficient opportunity to consult with your attorney and financial advisor
before signing this Waiver and Release Agreement, and (c) that you
understand and agree to all of the terms of this Waiver and Release Agreement.
17
AGREEMENT
I have read and I understand
the terms of the foregoing Waiver and Release, and I hereby agree to all of the
terms of the foregoing Agreement.
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Executive’s
Signature
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(Date)
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Please
return all pages of this signed agreement to:
Executive
Compensation
1801
California Street
45
th
Floor
Denver,
Colorado 80202
18
Exhibit 10.3
NON-QUALIFIED STOCK OPTION AGREEMENT
This Option
Agreement (the “Agreement”) is made between Qwest Communications International
Inc., a Delaware corporation (the “Company”), and (the
“Optionee”).
WHEREAS, pursuant to
the Qwest Communications International Inc. Equity Incentive Plan (the “Plan”),
the Company desires to afford the Optionee the opportunity to purchase shares
of Company Common Stock, par value $.01 per share (the “Common Shares”).
NOW, THEREFORE, in
connection with the mutual covenants hereinafter set forth and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS;
CONFLICTS.
Capitalized terms
used and not otherwise defined herein shall have the meanings given thereto in
the Plan. The terms and provisions of
the Plan are incorporated herein by reference.
In the event of a conflict or inconsistency between the terms and
provisions of the Plan and the terms and provisions of this Agreement, the
terms and provisions of the Plan shall govern and control. In the event of a conflict or inconsistency
between the terms and conditions of this Agreement and any agreement between
Optionee and U S WEST, Inc. and/or its subsidiaries, the terms and
conditions of this Agreement shall govern and control. In the event of a conflict or inconsistency
between the terms and conditions of this Agreement and any employment agreement
between Company and Optionee (other than an agreement between the Optionee and
U S WEST, Inc. and/or its subsidiaries), such employment
agreement shall govern.
2.
GRANT
OF OPTIONS.
The Company hereby
grants to the Optionee the right and option (the “Option” or “Options”) to
purchase up to, but not exceeding in the aggregate,
Common Shares, on the terms and conditions
herein set forth. This grant is made and
effective as of
(the “Grant Date”).
3.
PURCHASE
PRICE.
The purchase price
of each Common Share covered by the Option shall be
(the “Purchase Price”).
4.
TERM
OF OPTIONS.
The term of the
Option shall be ten years from the Grant Date, subject to earlier termination
as provided in Sections 6 and 8 hereof.
5.
VESTING
OF OPTIONS.
The Option,
subject to the terms, conditions and limitations contained herein, shall vest
and become exercisable with respect to the Common Shares in one-third
installments upon each of the first three anniversaries following the Grant
Date; provided that, with respect to each installment, the Optionee has
remained in continuous employment with the Company from the Grant Date until
the date such installment is designated to vest.
Notwithstanding
the vesting schedule set forth above, the Options will vest and become
immediately exercisable in the event of the Optionee’s death or Disability and
under the circumstances described in Section 7 below.
6.
TERMINATION
OF EMPLOYMENT.
(a)
Termination of Employment for Reasons other than Death, Disability, Retirement
or Cause.
In the event the
Optionee’s employment with the Company terminates for reasons other than
Optionee’s death, Disability, Retirement or Cause, the Option shall remain
exercisable for a period of up to 90 calendar days after the date of Optionee’s
termination of employment (but not beyond the term of the Option), to the
extent vested and exercisable on the date
of Optionee’s termination of employment.
(b)
Termination of Employment Because Optionee Dies, Becomes Disabled or
Retires.
In the event
Optionee’s employment with the Company terminates because Optionee dies,
becomes Disabled (as defined in the Plan) or Retires, the Option shall remain
exercisable for two years after Optionee’s termination of employment (but not
beyond the term of the Option), to the extent vested and exercisable at the
time Optionee’s employment terminated.
For purposes of this Agreement, the terms “Retire” and “Retirement”
shall mean that, at the time of Optionee’s termination of employment, Optionee
meets one of the following age and service combinations:
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Age at Retirement
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Term of Employment
(as defined in the
Qwest Pension Plan)
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Combination 1
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Any Age
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at least 30 years
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Combination 2
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50-54
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at least 25 years
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Combination 3
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55-59
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at least 20 years
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Combination 4
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60-64
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at least 15 years
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Combination 5
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65 and older
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at least 10 years
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(c)
Termination of Employment for Cause.
In the event Optionee’s employment with the
Company is terminated by the Company for Cause, the Option shall be forfeited
as of the date of such termination, whether or not otherwise vested or
exercisable on such date. For purposes of this Agreement, “cause” shall mean:
(1)
Commission of an act deemed by the Company in
its sole discretion to be an act of dishonesty, fraud, misrepresentation or
other act of
2
moral turpitude that would reflect negatively upon Qwest or compromise
the effective performance of Optionee’s duties;
(2)
Unlawful conduct that would reflect negatively
upon Qwest or compromise the effective performance of Optionee’s duties, as
determined by the Company in its sole discretion;
(3)
Conviction of (or pleading nolo contendere
to) any felony or a misdemeanor involving moral turpitude;
(4)
Continued failure to substantially perform
Optionee’s duties to the satisfaction of his or her supervisor (other than such
failure resulting from Optionee’s incapacity due to physical or mental illness)
after the delivery of written notice to Optionee specifically identifying the
manner in which Optionee has failed to substantially perform his or her duties
and Optionee has been afforded a reasonable opportunity to substantially
perform his or her duties; or
(5)
A willful violation of the Qwest Code of
Conduct or other Qwest policies that would reflect negatively upon Qwest or
compromise the effective performance of Optionee’s duties, as determined by the
Company in its sole discretion.
(d)
Unvested Options Forfeited Upon Termination of Employment.
Any portion of the Option that has
not vested as of the date Optionee’s employment terminates shall be forfeited
immediately upon termination of Optionee’s employment with the Company.
7.
CHANGE
IN CONTROL.
Subject to the
conflict provisions in Paragraph 1 of this Agreement, in the event of a Change
in Control, the Option shall vest in full and become immediately exercisable
and shall remain vested and exercisable during the remaining term thereof.
8.
FORFEITURE
OF OPTION.
(a)
Performance for Competitors.
Notwithstanding
any other provision of this Agreement, Optionee shall immediately forfeit all
rights under the Option, if, Optionee accepts employment with a Competitor (as
defined herein) or during the 18 month period beginning on the date of Optionee’s
termination of employment, Optionee owns
more than 2% of the common stock of, or is employed by, advises,
represents or assists in any other way any Competitor and if the Company, in
its sole discretion, determines that such actions by Optionee are, or could be,
detrimental to the Company. For the
purposes of this Agreement, “Competitor” means a person or entity that competes
with, or intends to compete with, the Company with respect to any product sold
or service performed by the Company in any state or country in which the
Company sells such products or performs such services, and if the Company, in its sole discretion, determines that such
actions by Grantee are
3
detrimental to the Company
.
Notwithstanding the foregoing, if Optionee is an attorney, Optionee may,
subject to the applicable rules of ethics and the nondisclosure provisions
herein, perform services solely in his or her capacity as an outside attorney
on behalf of any person or entity, even if such person or entity competes with
Qwest or sells goods or services similar to those Qwest sells.
(b)
Non-solicitation of Employees.
Notwithstanding
any other provision of this Agreement, Optionee shall immediately forfeit all
rights under the Option, if, during the one-year period beginning on the date
of Optionee’s termination of employment, Optionee induces any employee of Qwest
to leave Qwest’s employment, and if the Company, in its sole discretion,
determines that such actions by Optionee are detrimental to the Company.
(c)
Nondisclosure.
Optionee will not disclose outside of the Company or to any person
within the Company who does not have a legitimate business need to know, any
Confidential Information (as defined below) during Optionee’s employment with
the Company. Optionee will not disclose
to anyone or make any use of any Confidential Information of the Company after
Optionee’s employment with the Company ends for any reason, except as required
by law after timely notice is given by Optionee to the Company. This agreement not to disclose or use
Confidential Information means, among other things, that Optionee, for a period
of 18 months beginning on the effective date of the termination of Optionee’s
employment with the Company or any other Qwest entity for any reason, may not
take or perform a job whose responsibilities would likely lead Optionee to
disclose or use Confidential Information.
Optionee acknowledges and agrees that the assumption and performance of
such responsibilities, in that situation, would likely result in the disclosure
or use of Confidential Information and would likely result in irreparable
injury to the Company. Moreover, during
Optionee’s employment with the Company, Optionee shall not disclose or use for
the benefit of the Company, himself or any other person or entity any
confidential or trade secret information belonging to any former employer or
other person or entity to which Optionee owes a duty of confidence or
nondisclosure of such information. If a
court determines that this provision is too broad, Optionee and Company agree
that the court shall modify the provision to the extent (but not more than is)
necessary to make the provision
enforceable. “Confidential Information” means any oral or written information
not generally known outside of the Company, including without limitation, trade secrets, intellectual property,
software and documentation, customer information (including, without
limitation, customer lists), company policies, practices and codes of conduct,
internal analyses, analyses of competitive products, strategies, merger and
acquisition plans, marketing plans, corporate financial information,
information related to negotiations with third parties, information protected
by the Company’s privileges (such as the attorney-client privilege), internal
audit reports, contracts and sales proposals, training materials, employment
and personnel records, performance evaluations, and other sensitive
information. This agreement does not
relieve Optionee of any obligations Optionee has to the Company under law. If Optionee fails to comply with the
provisions of this paragraph 8(c), Optionee shall immediately forfeit all
rights under the Option if the Company, in its sole discretion, determines that
such actions by Optionee are, or were, detrimental to the Company. Nothing in
4
this paragraph
shall prevent or limit Optionee’s ability to provide truthful responses to
legitimate inquiries from governmental agencies.
(d)
Post-termination finding of
Cause.
Notwithstanding any
other provision of this Agreement, Optionee shall immediately forfeit all
rights under the Award and shall repay to Company all proceeds from the vesting
or lapsing of the Award occurring after Optionee’s termination of employment,
if, within the two-year period beginning on Optionee’s termination date, the
Committee determines that Optionee, while employed by the Company, engaged in
conduct constituting Cause. Consistent with applicable law, any repayments shall
include an interest factor equal to the applicable federal short term interest
rate pursuant to Internal Revenue Code section 1274. Interest shall begin to accrue on the 31st
day after Optionee (or, if applicable, Optionee’s estate or beneficiary) received
the Company’s written notification of its determination that such Cause exists
or existed, and shall continue to accrue until complete repayment is made to
the Company. This
provision shall not be effective after a Change in Control.
9.
TRANSFERABILITY
OF OPTION.
Except to the
extent permitted by the Committee in accordance with the provisions of the
Plan, the Optionee may not voluntarily or involuntarily pledge, hypothecate,
assign, sell or otherwise transfer the Option except by will or the laws of
descent and distribution, and during the Optionee’s lifetime, the Option shall
be exercisable only by the Optionee.
10.
NO
RIGHTS AS A SHAREHOLDER.
The Optionee shall
have no rights as a shareholder with respect to any Common Shares until the
date of issuance to the Optionee of a certificate evidencing such Common
Shares. No adjustments, other than as
provided in Article IV of the Plan, shall be made for dividends (ordinary
or extraordinary, whether in cash, securities or other property) or distributions
for which the record date is prior to the date the certificate for such Common
Shares is issued.
11.
REGISTRATION: GOVERNMENTAL APPROVAL.
The Option granted
hereunder is subject to the requirement that, if at any time the Company
determines, in its discretion, that the listing, registration, or
qualifications of Common Shares issuable upon exercise of the Option is
required by any securities exchange or under any state or Federal law, rule or
regulation, or the consent or approval of any governmental regulatory body or
other person is necessary or desirable as a condition of, or in connection
with, the issuance of Common Shares, no Common Shares shall be issued, in whole
or in part, unless such listing, registration, qualification, consent or approval
has been effected or obtained free of any conditions or with such conditions as
are acceptable to the Committee.
12.
METHOD
OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement,
the Option may be exercised by contacting the stock broker designated by the
Company from time to time and following such
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broker’s instructions. Alternatively, if Optionee wishes to use his
or her personal stock broker, Optionee may provide written notice to the
Company, Attention: Manager, Stock Administration. Such notice shall state the election to
exercise the Option and the number of Common Shares in respect of which the
Option is being exercised, shall be signed by the person or persons so exercising
the Option and shall be accompanied by payment in full of the Purchase Price
for such Common shares.
Payment of such
Purchase Price shall be made in United States dollars by certified check or
bank cashier’s check payable to the order of the Company or by wire transfer to
such account as may be specified by the Company for this purpose. Subject to such procedures and rules as
may be adopted from time to time by the Committee, the Optionee may also pay
such Purchase Price by (i) tendering to the Company Common Shares with an
aggregate Fair Market Value on the date of exercise equal to such Purchase
Price provided that such Common Shares must have been held by the Optionee for
more than six (6) months, (ii) delivery to the Company of a copy of
irrevocable instructions to a stockbroker to sell Common Shares or to authorize
a loan from the stockbroker to the Optionee and to deliver promptly to the
Company an amount sufficient to pay such Purchase Price, or (iii) any
combination of the methods of payment described in clauses (i) and (ii) and
in the preceding sentence. The certificate for Common Shares as to which the
Option shall have been so exercised shall be registered in the name of the
person or persons so exercising the Option.
All Common Shares purchased upon the exercise of the Option as provided
herein shall be fully paid and non-assessable.
The Company’s
Insider Trading Policy 110 requires that all
Insiders must pre-clear with the Law Department all proposed transactions in
Qwest Securities, including, but not limited to, exercises of options prior to
effecting such transaction.
13.
INCOME
TAX WITHHOLDING.
The Company may
make such provisions and take such steps as it may deem reasonably necessary or
appropriate for the withholding of all federal, state, local and other taxes
required by law to be withheld with respect to the exercise of the Option and
the issuance of the Common Shares, including, but not limited to, deducting the
amount of any such withholding taxes from any other amount then or thereafter
payable to the Optionee, or requiring the Optionee, or the beneficiary or legal
representative of the Optionee, to pay to the Company the amount required to be
withheld or to execute such documents as the Company deems necessary or
desirable to enable it to satisfy its withholding obligations.
14.
COMMITTEE
DISCRETION.
Any decision,
interpretation or other action made or taken in good faith by the Committee
arising out of or in connection with this Agreement, the Plan or the Option
shall be final, binding and conclusive on the Company, Optionee and any
respective heir, executor, administrator, successor or assign.
15.
NON-QUALIFIED
STOCK OPTION.
The Option granted
hereunder is not intended to be an “incentive stock option” within the meaning
of Section 422 of the Code.
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16.
WAIVER
OF RIGHT TO JURY.
By signing this
Agreement, Optionee voluntarily, knowingly and intelligently waives any right
he or she may have to a jury trial for all claims relating to this Agreement
and any other claim relating to Optionee’s employment with Company. The Company also hereby voluntarily,
knowingly, and intelligently waives any right it might otherwise have to a jury
trial for all claims relating to this Agreement and any other claim relating to
Optionee’s employment with the Company.
17.
GOVERNING
LAW.
This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to the
conflict of laws provisions of any state.
Any action to enforce this Agreement shall be brought in Colorado state
or federal district court and the parties waive any objection to the
jurisdiction or venue of such courts.
18.
HEADINGS.
Headings are for
the convenience of the parties and are not deemed to be part of this Agreement.
19.
EXECUTION.
This Agreement is
voidable by the Company if the Optionee does not execute the Agreement within
30 days of execution by the Company.
IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on the dates set forth
opposite their signatures to be effective as of the Grant Date.
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QWEST COMMUNICATIONS
INTERNATIONAL INC.
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By:
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Executive Vice
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General Counsel and
Chief Administrative Officer
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OPTIONEE:
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Date
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7
RESTRICTED
STOCK AGREEMENT
This Restricted Stock
Agreement (“Agreement”) is made between Qwest Communications International
Inc., a Delaware corporation (the “Company”), and
(the “Grantee”).
WHEREAS, pursuant to the
Qwest Communications International Inc. Equity Incentive Plan (the “Plan”), the
Company desires to grant shares of Common Stock, par value $0.01 per share, of
the Company (“Common Stock”) to the Grantee subject to the restrictions and on
the terms and conditions specified below.
NOW THEREFORE, in
connection with the mutual covenants hereinafter set forth and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS;
CONFLICTS.
Capitalized terms used
and not otherwise defined herein shall have the meanings given thereto in the
Plan. The terms and provisions of the
Plan are incorporated herein by reference.
In the event of a conflict or inconsistency between the terms and
provisions of the Plan and the terms and provisions of this Agreement, the
terms and provisions of the Plan shall govern and control. In the event of a conflict or inconsistency
between the terms and conditions of this Agreement and any agreement between
Grantee and U S WEST, Inc. and/or its subsidiaries, the terms and
conditions of this Agreement shall govern and control. In the event of a conflict or inconsistency
between the terms and conditions of this Agreement and any employment agreement
between Company and Grantee (other than an agreement between the Grantee and
U S WEST, Inc. and/or its subsidiaries), such employment
agreement shall govern.
2.
GRANT
OF RESTRICTED STOCK.
The Company hereby grants
to the Grantee
shares
(the “Shares”) of Common Stock
(the “Restricted Stock”), effective as of
(the “Transfer Date”). After the Grantee
becomes the holder of record with respect to the Restricted Stock, the Grantee
shall be treated as the beneficial owner of the Restricted Stock and shall have
the right to receive all amounts, including cash and property of any kind,
distributed with respect to the Restricted Stock.
3.
RESTRICTIONS.
The Grantee shall not
sell, assign, transfer by gift or otherwise, pledge, hypothecate, or otherwise
dispose of, by operation of law or otherwise, any of the Shares for the period
commencing on the Transfer Date and ending on the Expiration Date (as defined
in Section 4 below), except as otherwise provided in Section 4 or Section 5
or as otherwise permitted by this Agreement or the terms of the Plan.
If any transfer of Shares
is made or attempted to be made contrary to the terms of this Agreement, the
Company shall have the right to acquire for its own account, without the
payment of any consideration therefor, such Shares from the owner thereof or his
transferee, at any time before or after such prohibited transfer. In addition to any other legal or equitable
remedies it may have, the Company may enforce its rights to specific
performance to the extent permitted by law and may exercise such other equitable
remedies then available to it. The
Company may refuse for any purpose to recognize any transferee who receives
Shares contrary to the provisions of this Agreement as a stockholder of the
Company and may retain and/or recover all dividends on such Shares that were
paid or payable subsequent to the date on which the prohibited transfer was
made or attempted.
4.
VESTING; LAPSE OF RESTRICTIONS.
Except as otherwise
provided in this Agreement, the Shares of Restricted Stock shall vest in
one-third installments upon each of the first three anniversaries following the
Transfer Date; provided that, with respect to each installment, the Grantee has
remained in continuous employment with the Company from the Transfer Date until
the date such installment is designated to vest.
The Restricted Stock
shall be fully vested and this Agreement shall terminate on the last vesting
installment date described in the paragraph immediately above (the “Expiration
Date”). Shares that have become vested
and as to which the restrictions have lapsed shall be referred to as Vested
Shares. Shares that have not become
vested and as to which the restrictions have not lapsed shall be referred to as
Unvested Shares.
Notwithstanding the
vesting schedule set forth above, the Unvested Shares will immediately become
Vested Shares in the event of the Grantee’s death or Disability, or upon a
Change in Control.
The Grantee may, at
Grantee’s discretion and subject to the policies of the Company, sell, assign,
transfer by gift or otherwise, hypothecate, or otherwise dispose of, by
operation of law or otherwise, any of the Vested Shares not withheld by the
Company for tax withholding purposes pursuant to Section 9.
5.
TERMINATION OF EMPLOYMENT;
FORFEITURE OF UNVESTED SHARES.
In the event the Grantee’s
employment with the Company is terminated for any reason other than due to
death or Disability, all Unvested Shares shall be forfeited and the Grantee
shall immediately transfer and assign to the Company, without the requirement
of consideration, all Unvested Shares, which shall promptly be tendered to the
Company by the delivery of certificates, if any, for such Unvested Shares, duly
endorsed in blank by the Grantee or the Grantee’s representative or with stock
powers attached thereto duly endorsed, at the Company’s principal offices, all
in form suitable for the transfer of such Shares to the Company without the
payment of any consideration therefor by the Company. After the time at which any such Shares are
required to be delivered to the Company for transfer to the Company, the
Company shall not pay any dividend to the
2
Grantee on account of
such Shares or permit the Grantee to exercise any of the privileges or rights
of a stockholder with respect to such Shares, but shall, in so far as permitted
by law, treat the Company as the owner of such Shares.
6.
ADJUSTMENT OF THE SHARES.
Upon the occurrence of an
event described in Article IV of the Plan, the Shares shall be adjusted in
accordance with Article IV.
7.
FORFEITURE OF UNVESTED SHARES.
(a)
Performance for Competitors.
Notwithstanding any other
provision of this Agreement, Grantee shall immediately forfeit all rights under
the Restricted Stock Award, if,
Grantee accepts employment with a Competitor (as
defined herein) or
during the 18 month period beginning on the date of
Grantee’s termination of employment, Grantee owns more than 2% of the common
stock of, or is employed by, advises, represents or assists in any other way
any
Competitor and if
the Company, in its sole discretion, determines that such actions by Grantee
are, or could be, detrimental to the Company.
For the purposes of this Agreement, “Competitor” means a
person or
entity that competes with, or intends to compete with the Company with respect
to any product sold or service performed by the Company in any state or country
in which the Company sells such products or performs such services, and if the
Company, in its sole discretion, determines that such actions by Grantee are
detrimental to the Company. Notwithstanding the foregoing, if Grantee is an
attorney, Grantee may, subject to the applicable rules of ethics and the
nondisclosure provisions herein, perform services solely in his or her capacity
as an outside attorney on behalf of any person or entity, even if such person
or entity competes with Qwest or sells goods or services similar to those Qwest
sells.
(b)
Non-solicitation of Employees.
Notwithstanding any other
provision of this Agreement, Grantee shall immediately forfeit all rights under
the Restricted Stock Award, if, during the one-year period beginning on the
date of Grantee’s termination of employment, Grantee induces any employee of
Qwest to leave Qwest’s employment, and if the Company, in its sole discretion,
determines that such actions by Grantee are detrimental to the Company.
(c)
Nondisclosure.
Grantee will not disclose outside of the
Company or to any person within the Company who does not have a legitimate
business need to know, any Confidential Information (as defined below) during
Grantee’s employment with the Company. Grantee will not disclose to anyone or
make any use of any Confidential Information of the Company after Grantee’s
employment with the Company ends for any reason, except as required by law
after timely notice is given by Grantee to the Company. This agreement not to
disclose or use Confidential Information means, among other things, that
Grantee, for a period of 18 months beginning on the effective date of the
termination of Grantee’s employment with the Company or any other Qwest entity
for any reason, may not
3
take or perform a job whose
responsibilities would likely lead Grantee to disclose or use Confidential
Information. Grantee acknowledges and agrees that the assumption and
performance of such responsibilities, in that situation, would likely result in
the disclosure or use of Confidential Information and would likely result in
irreparable injury to the Company. Moreover, during Grantee’s employment with
the Company, Grantee shall not disclose or use for the benefit of the Company,
himself or any other person or entity any confidential or trade secret
information belonging to any former employer or other person or entity to which
Grantee owes a duty of confidence or nondisclosure of such information. If a
court determines that this provision is too broad, Grantee and Company agree
that the court shall modify the provision to the extent (but not more than is)
necessary to make the provision enforceable. “Confidential Information” is any
oral or written information not generally known outside of the Company,
including without limitation, trade secrets, intellectual property, software
and documentation, customer information (including, without limitation,
customer lists), company policies, practices and codes of conduct, internal
analyses, analyses of competitive products, strategies, merger and acquisition
plans, marketing plans, corporate financial information, information related to
negotiations with third parties, information protected by the Company’s
privileges (such as the attorney-client privilege), internal audit reports,
contracts and sales proposals, training materials, employment and personnel records, performance evaluations,
and other sensitive information. This agreement does not relieve Grantee of any
obligations Grantee has to the Company under law. If Grantee fails to comply
with the provisions of this paragraph 7(c), Grantee shall immediately forfeit
all rights under the Restricted Stock Award
if the Company, in its sole discretion, determines
that such actions by Grantee are, or were, detrimental to the Company.
Nothing in this paragraph shall prevent or
limit Grantee’s ability to provide truthful responses to legitimate inquiries
from governmental agencies.
(d)
Post-termination finding of Cause.
Notwithstanding any other
provision of this Agreement, Grantee shall immediately forfeit all rights under
the Restricted Stock Award and shall repay to Company all proceeds from the
vesting or lapsing of the Award occurring after Grantee’s termination of
employment, if, within the two-year period beginning on Grantee’s termination
date, the Company determines that Grantee, while employed by Company, engaged
in conduct constituting Cause (as defined by any employment agreement between
Company and Grantee, or if there is no employment agreement, as defined by the
Plan). Consistent with applicable law, any repayments shall include an interest
factor equal to the applicable federal short term interest rate pursuant to
Internal Revenue Code section 1274.
Interest shall begin to accrue on the 31st day after Grantee (or, if
applicable, Grantee’s estate or beneficiary) received Company’s written
notification of its determination that such Cause exists or existed, and shall
continue to accrue until complete repayment is made to Company. This provision shall not be effective
after a Change in Control (as defined in Section 5.4(b) of the Plan).
4
8.
ENFORCEMENT OF RESTRICTIONS.
If a certificate or
certificates representing Shares is issued, it shall bear the following legend:
“The Shares of
stock represented by this Certificate are subject to all of the terms of a
Restricted Stock Agreement between Qwest Communications International Inc. and
the registered owner of this Certificate (the “Agreement”) and to the terms of
the Qwest Communications International Inc. Equity Incentive Plan. Copies of the Agreement and the Plan are on
file at the office of the Company. The
Agreement, among other things, limits the right of the Owner to transfer the
Shares represented hereby and provide in certain circumstances that all or a
portion of the Shares must be returned to the Company.”
The Company may, in its
sole discretion, require the Grantee to keep the certificate, if any,
representing the Unvested Shares, duly endorsed, in the custody of the Company
while the Unvested Shares are subject to the restrictions contained in Section 2. The Company may, in its sole discretion,
require that the certificate, if any, representing the Unvested Shares, duly
endorsed, be held in the custody of a third party while the Unvested Shares are
subject to the restrictions contained in Section 3.
The Company’s
Insider Trading
Policy 110 requires that all Insiders must pre-clear with the Law Department
all proposed transactions in Qwest Securities prior to transaction.
9.
TAX WITHHOLDING.
Notwithstanding any Plan
provision to the contrary, upon the vesting of any portion of the Shares, the
Company shall withhold from the Vested Shares a number of Shares having a value
equal to the minimum amount required to be withheld under applicable federal,
state and local income and other tax laws (collectively, “Withholding Taxes”). In such case, the value of the Shares to be
withheld shall be based on the closing price of the Company’s common stock as
reported on the New York Stock Exchange on the date the amount of the
Withholding Taxes is determined (the “Tax Date”).
10.
BINDING EFFECT.
This Agreement shall be
binding upon the heirs, executors, administrators and successors of the parties
hereto.
11.
WAIVER OF RIGHT TO JURY.
By signing this
Agreement, Grantee voluntarily, knowingly and intelligently waives any right he
or she may have to a jury trial for all claims relating to this Agreement and
any other claim relating to Grantee’s employment with Company. The Company also hereby voluntarily,
knowingly, and intelligently waives any right it might otherwise have to a
5
jury trial for all claims
relating to this Agreement and any other claim relating to Grantee’s employment
with the Company.
12.
GOVERNING LAW.
This Agreement shall be
construed and interpreted in accordance with the laws of the State of Delaware,
without regard to the conflict of laws provisions of any state. Any action to enforce this Agreement shall be
brought in Colorado state or federal district court and the parties waive any
objection to the jurisdiction or venue of such courts.
13.
HEADINGS.
Headings are for the
convenience of the parties and are not deemed to be part of this Agreement.
14.
EXECUTION.
This Agreement is
voidable by the Company if the Grantee does not execute the Agreement within 30
days of execution by the Company.
IN WITNESS WHEREOF, the
parties hereto have executed this Agreement on the dates set forth opposite
their signatures to be effective as of the Transfer Date.
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QWEST COMMUNICATIONS
INTERNATIONAL INC.
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Date:
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By:
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Executive Vice
President,
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General Counsel and
Chief Administrative Officer
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GRANTEE:
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Date:
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6
PERFORMANCE
SHARE AGREEMENT
This Performance Share
Agreement (“Agreement”) is made between Qwest Communications International
Inc., a Delaware corporation (the “Company”), and
(the “Grantee”).
WHEREAS, pursuant to the
Qwest Communications International Inc. Equity Incentive Plan (the “Plan”), the
Company desires to grant an Award to the Grantee subject to the terms and
conditions herein.
NOW THEREFORE, in
connection with the mutual covenants hereinafter set forth and for other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
1.
DEFINITIONS; CONFLICTS.
Capitalized
terms used and not otherwise defined herein shall have the meanings given
thereto in the Plan. The terms and
provisions of the Plan are incorporated herein by reference.
2.
GRANT OF PERFORMANCE SHARES.
(a)
Performance Shares.
The
Company hereby grants to the Grantee
Performance Shares on
, 20 (the “Grant Date”). Except as provided below, the Performance
Shares will be unvested and forfeitable.
(b)
Performance Period
. The “Performance
Period” begins on
,
and ends on the earlier of (i)
or (ii) the closing date of a Change in Control.
(c)
Vesting of Performance Shares.
Except
as provided in paragraph 3(c) below,
the
Performance Shares will vest on the last day of the Performance Period provided
that the Grantee remains employed with the Company for the entire Performance
Period.
(d)
Performance Payout.
As
soon as practicable after the end of the Performance Period, the Company will
calculate the percentage, if any, of the Performance Shares to be paid out
pursuant to the formula set forth in Exhibit 1, hereto.
(e)
Settlement in Shares or Cash
. The amount payable
to the Grantee for the Grantee’s vested Performance Shares, as adjusted as
described in the formula set forth in Exhibit 1, may be paid either in shares of Common Stock
par value $0.01 per share, of the Company (“Common Stock”), in cash based on
the fair market value of the Common Stock, (determined based on the closing
price for the Common Stock on the last day of the Performance Period, as
reported on the New York Stock Exchange), as elected by Grantee in writing
except that cash shall be
distributed
in lieu of any fractional share of Common Stock or if no election is made. Each Performance Share is equal to one share
of Common Stock. An election to be paid
in Common Stock is subject to Qwest’s Insider Trading Policy.
(f)
Payment Date
. Settlement pursuant to paragraph 2(e) will
occur within five business days after the end of the Performance Period.
3.
TERMINATION OF EMPLOYMENT DURING
PERFORMANCE PERIOD.
(a)
Resignation or Retirement.
In the event Grantee
resigns or retires his or her employment with the Company during the
Performance Period all Performance Shares and rights thereto will be forfeited
and canceled immediately upon such termination of employment and the Grantee
will have no further rights under this Agreement with respect to such
Performance Shares.
(b)
Involuntary
Termination of Employment With or Without
Cause
. In the event the
Grantee’s employment with the Company is involuntarily terminated during the
Performance Period without Cause (as defined by any employment agreement
between Company and Grantee, or if there is no employment agreement, as defined
by the Plan) or during or after the Performance Period for Cause, all
Performance Shares and rights thereto will be forfeited and canceled immediately
upon such termination of employment and the Grantee will have no further rights
under this Agreement with respect to such Performance Shares.
(c)
Termination Because Grantee Dies or Becomes
Disabled
. In the event the Grantee’s employment with
the Company is terminated during the Performance Period due to the Grantee’s
death or Disability, the Grantee’s Performance
Shares shall immediately vest.
The Company will determine the total amount, if any, to be paid to the
Grantee for such vested Performance Shares at the end of the Performance Period
as set forth in paragraph 2(d) of this Agreement. The amount paid to Grantee will be prorated
based on the ratio of the number of months the Grantee was employed during the
Performance Period to the total number of months in the Performance
Period. Partial months or employment
will be counted as full months for the purposes of this paragraph. Payment for the vested Performance Shares will
be made as provided in paragraphs 2(e) and (f).
(d)
Termination of Employment After Performance
Period.
In
the event the Grantee’s employment with the Company is terminated after the end
of the Performance Period for any reason other than for Cause, but before
payment has been made, the Performance Shares shall be payable as provided
herein as if such termination had not occurred.
4.
ADJUSTMENT OF PERFORMANCE SHARES.
Upon the occurrence of an
event described in Article IV of the Plan, the number of Performance
Shares granted herein shall be adjusted in accordance with Article IV.
2
5.
FORFEITURE OF PERFORMANCE SHARES.
(a)
Performance for
Competitors.
Notwithstanding any other provision of
this Agreement, Grantee shall immediately forfeit all Performance Shares
(whether or not vested) and all rights under this Agreement if, prior to the
payment of the Performance Shares, Grantee accepts employment with a Competitor
(as defined herein) or Grantee owns more than 2% of the common stock of, or is
employed by, advises, represents or assists in any other way any Competitor and
if the Company, in its sole discretion, determines that such actions by Grantee
are, or could be, detrimental to the Company.
For the purposes of this Agreement, “Competitor” means a person or
entity that competes with, or intends to compete with the Company with respect
to any product sold or service performed by the Company in any state or country
in which the Company sells such products or performs such services, and if the
Company, in its sole discretion, determines that such actions by Grantee are
detrimental to the Company.
Notwithstanding the foregoing, if Grantee is an attorney, Grantee may,
subject to the applicable rules of ethics and the nondisclosure provisions
herein, perform services solely in his or her capacity as an outside attorney
on behalf of any person or entity, even if such person or entity competes with
the Company or sells goods or services similar to those the Company sells.
(b)
Non-solicitation of
Employees.
Notwithstanding any other provision of
this Agreement, Grantee shall immediately forfeit all Performance Shares
(whether or not vested) and all rights under this Agreement if, prior to the
payment of the Performance Shares, Grantee induces any employee of the Company
to leave the Company’s employment, and if the Company, in its sole discretion,
determines that such actions by Grantee are detrimental to the Company.
(c)
Nondisclosure.
Grantee will not disclose outside of the Company or to
any person within the Company who does not have a legitimate business need to
know, any Confidential Information (as defined below) during Grantee’s
employment with the Company. Grantee
will not disclose to anyone or make any use of any Confidential Information of
the Company after Grantee’s employment with the Company ends for any reason,
except as required by law after timely notice is given by Grantee to the
Company. This agreement not to disclose
or use Confidential Information means, among other things, that Grantee, for a
period of 18 months beginning on the effective date of the termination of
Grantee’s employment with the Company, or any subsidiary or parent of the
Company, for any reason, may not take or perform a job whose responsibilities
would likely lead Grantee to disclose or use Confidential Information. Grantee acknowledges and agrees that the
assumption and performance of such responsibilities, in that situation, would
likely result in the disclosure or use of Confidential Information and would
likely result in irreparable injury to the Company. Moreover, during Grantee’s employment with
the Company, Grantee shall not disclose or use for the benefit of the Company,
himself or any other person or entity any confidential or trade secret
information belonging to any former employer or other person or entity to which
Grantee owes a duty of confidence or nondisclosure of such
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information. If
a court determines that this provision is too broad, Grantee and Company agree
that the court shall modify the provision to the extent (but not more than is)
necessary to make the provision enforceable.
“Confidential Information” is any oral or written information not
generally known outside of the Company, including without limitation, trade secrets,
intellectual property, software and documentation, customer information
(including, without limitation, customer lists), company policies, practices
and codes of conduct, internal analyses, analyses of competitive products,
strategies, merger and acquisition plans, marketing plans, corporate financial
information, information related to negotiations with third parties,
information protected by the Company’s privileges (such as the attorney-client
privilege), internal audit reports, contracts and sales proposals, training
materials, employment and personnel
records, performance evaluations, and other sensitive information. This Agreement does not relieve Grantee of
any obligations Grantee has to the Company under law. If Grantee fails to comply with the
provisions of this paragraph 5(c), Grantee shall immediately forfeit all
Performance Shares and all rights under this Agreement if the Company, in its
sole discretion, determines that such actions by Grantee are, or were,
detrimental to the Company. Nothing in
this paragraph shall prevent or limit Grantee’s ability to provide truthful
responses to legitimate inquiries from governmental agencies.
6.
TRANSFERABILITY OF PERFORMANCE
SHARES.
The Grantee may not
voluntarily or involuntarily pledge, hypothecate, assign, sell or otherwise
transfer any Performance Shares held by the Grantee, except by will or the laws
of descent and distribution, and during the Grantee’s lifetime, payment for the
Performance Shares shall be made only to the Grantee.
7.
NO RIGHTS AS A SHAREHOLDER.
The Grantee shall have no
rights as a shareholder with respect to any shares of Common Stock that may be
payable for the Performance Shares until the Grantee becomes a holder of record
of those shares. No adjustments, other
than as provided in Article IV of the Plan, shall be made for dividends
(ordinary or extraordinary and whether in cash, securities or other property)
or distributions for which the record date is prior to the date on which the
Grantee becomes the holder of record of the shares of Common Stock.
8.
REGISTRATION; GOVERNMENTAL
APPROVAL.
The grant of Performance
Shares hereunder is subject to the requirement that, if at any time the Company
determines, in its discretion, that the listing, registration, or qualifications
of shares of Common Stock issuable upon payment for the Performance Shares is
required by any securities exchange or under any state or federal law, rule or
regulation, or the consent or approval of any governmental regulatory body or
other person is necessary or desirable as a condition of, or in connection
with, the issuance of shares of Common Stock, no shares shall be issued, in
whole or in part, unless such
4
listing, registration,
qualification, consent or approval has been effected or obtained free of any
conditions or with such conditions as are acceptable to the Company.
9
.
TAX WITHHOLDING.
The Company may make such
provisions and take such steps as it may deem reasonably necessary or appropriate
for the withholding of all federal, state, local and other taxes required by
law to be withheld with respect to the vesting of and payment for the
Performance Shares. Notwithstanding any
Plan provision to the contrary, upon the issuance of any shares of Common Stock
for the Performance Shares pursuant to paragraph 2(e), above, the Company shall
withhold from those shares a number of shares having a value equal to the
minimum amount required to be withheld under applicable federal, state and
local income and other tax laws (collectively, “Withholding Taxes”). In such
case, the value of the Shares to be withheld shall be based on
the closing market price of the Common
Stock on the date the amount of the Withholding Taxes is determined.
10.
COMMITTEE DISCRETION.
Any decision,
interpretation or other action made or taken in good faith by the Committee
arising out of or in connection with this Agreement, the Plan or the
Performance Shares shall be final, binding and conclusive on the Company, the
Grantee and any respective heir, executor, administrator, successor or assign.
11.
BINDING EFFECT.
This Agreement shall be
binding upon the heirs, executors, administrators and successors of the parties
hereto.
12.
WAIVER OF RIGHT TO JURY.
By signing this Agreement,
Grantee voluntarily, knowingly and intelligently waives any right he or she may
have to a jury trial for all claims relating to this Agreement and any other
claim relating to Grantee’s employment with Company. The Company also hereby voluntarily, knowingly,
and intelligently waives any right it might otherwise have to a jury trial for
all claims relating to this Agreement and any other claim relating to Grantee’s
employment with the Company.
13.
GOVERNING LAW.
This Agreement shall be
construed and interpreted in accordance with the laws of the State of Delaware,
without regard to the conflict of laws provisions of any state. Any action to enforce this Agreement shall be
brought in Colorado state or federal district court and the parties waive any
objection to the jurisdiction or venue of such courts.
5
14.
HEADINGS.
Headings are for the
convenience of the parties and are not deemed to be part of this Agreement.
15.
EXECUTION.
This Agreement is voidable
by the Company if the Grantee does not execute the Agreement within 30 days of
execution by the Company.
16.
COMPLIANCE WITH SECTION 409A OF THE INTERNAL REVENUE CODE
.
To the extent applicable,
the provisions of this Agreement shall be read consistent with Section 409A
of the Internal Revenue Code and the final Treasury Regulations issued
thereunder. Payments for Performance Shares shall not be accelerated
except as expressly permitted under Code Section 409A or the final
regulations issued thereunder.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement on the dates
set forth opposite their signatures to be effective as of the Grant date.
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QWEST COMMUNICATIONS
INTERNATIONAL INC.
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Date:
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By:
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Executive
Vice President,
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General
Counsel and Chief Administrative Officer
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GRANTEE:
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Date:
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6
EXHIBIT 1
PERFORMANCE TARGETS and CALCULATION OF PAYOUTS
The
percentage, if any, of the vested Performance Shares that will be paid to the
Grantee in accordance with, and subject to the terms and conditions of, the
Agreement will be calculated as follows (rounded to a full basis point):
[(Average
Qwest TSR Percentage - Average Telecom Peer TSR Percentage) x 5] + 100%;
provided, however,
that
the maximum percentage of the vested Performance Shares that will be paid to
the Grantee is 200%. The table below is
provided only as an example of the calculation above:
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If the Average Qwest TSR
Percentage minus the
Average Telecom Peer TSR
Percentage equals:
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Then the percentage of the
vested Performance Shares
that will be paid to the
Grantee will be:
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20% or more
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200
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%
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10%
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150
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%
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0%
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100
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%
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-10%
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50
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%
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-20% or less
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0
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%
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For purposes of the calculation above:
1.
“
Average Qwest TSR Percentage
” is the percentage increase or
decrease in (a) the average of the closing market price of one share of
Common Stock (as adjusted for all dividends paid, assuming they are reinvested
on the applicable payment dates) on each trading day in the Measurement Period,
as compared to (b) the closing market price of one share of Common Stock
on the first day of the Performance Period.
2.
“
Average Telecom Peer TSR Percentage
” is calculated as
follows:
(a)
For
each company in the Telecom Peer Group, calculate the percentage increase or
decrease in (i) the average of the closing market price of one share of
the company’s common stock (as adjusted for all dividends paid, assuming they
are reinvested on the applicable payment dates) on each trading day in the
Measurement Period, as compared to (ii) the closing market price of one
share of the company’s common stock on the first day of the Performance Period;
and
(b)
Calculate
the average of the percentages calculated under paragraph 2(a) above.
3.
“
Measurement Period
” is the 60 consecutive trading days on
the New York Stock Exchange ending on the last day of the Performance Period
(or the immediately preceding trading day if the last day of the Performance
Period is not a trading day);
provided, however,
that in the event of a Change in Control the “
Measurement
Period
” is only the closing date of the Change in Control.
4.
“
Telecom Peer Group
” is AT&T, CenturyTel, Cincinnati
Bell, Citizens Communications Company, Embarq, Verizon and Windstream Communications. The definition of the Telecom Peer Group is
subject to change in the sole and exclusive discretion of the Committee should
one or more members of the Telecom Peer Group cease to be in existence or undergo
a material change in its business.
