Exhibit 10.1
MASTER DEFERRED ISSUANCE STOCK AGREEMENT
This Deferred Issuance Stock Agreement (along with Exhibit A hereto, this
"Agreement") is entered into as of April 1, 2005, by and between Level 3
Communications, Inc., a Delaware corporation (the "Company"), and the individual
whose name appears on the signature page to this Agreement (the "Employee"), an
"Employee" as defined in the Company's 1995 Stock Plan (Amended and Restated as
of April 1, 1998, and as further amended from time to time, the "Plan").
The Company, pursuant to a grant of authority from the Compensation
Committee of the Company's Board of Directors (the "Committee"), may, from time
to time, grant to the Employee the opportunity to acquire a certain number of
shares of its common stock, par value $.01 per share (the "Stock"), in order to
retain the Employee as an employee of the Company or a Subsidiary, pursuant to
the Plan (an "Award").
The parties agree as follows:
1. Obligation to Issue Deferred Shares. Subject to the terms and conditions
of this Agreement, the Company, from time to time in its sole discretion, may
grant Awards to the Employee relating to a specified number of shares of Stock
that, under certain circumstances and in accordance with the terms hereof, may
result in the Employee having the right to receive shares of Stock (the
"Deferred Shares"). Each Award will be evidenced by a Deferred Issuance Stock
Award Letter (an "Award Letter") in the form attached as Exhibit A hereto (or
such other form as approved by the Company), which sets forth the date of the
Award (the "Award Date"), the number of Deferred Shares that are the subject of
the Award, and the dates on which the Company will issue the Deferred Shares to
the Employee subject to the terms of this Agreement and any further terms that
may be set forth in the applicable Award Letter (each such date, an "Issuance
Date"). To the extent that (i) the Employee is subject to the provisions of the
Company's Insider Trading Policy that restrict an employee's ability to sell
shares of Stock to open "trading windows," (ii) the Issuance Date would be a day
that the Employee is otherwise precluded from selling shares of Stock by the
Company's Insider Trading Policy, and (iii) at that time, the Company is not
using a mechanism to issue the Deferred Shares that provides for a "net"
issuance of shares as contemplated by Section 4 below, the Issuance Date shall
be delayed until the first business day of the next open trading window (a
"Delayed Issuance"), but in no event later than the Last Issuance Date (as
defined below).
2. Acceleration of Issuance of Deferred Shares. Notwithstanding Section 1,
the Company will issue all unissued Deferred Shares to the Employee, including
any Delayed Issuance Shares (as defined below) (i) promptly after the death of
the Employee or the Permanent Total Disability of the Employee, or (ii)
immediately before a Change in Control. The Employee shall be considered to have
suffered a Permanent Total Disability if the Committee determines that the
Employee is permanently unable to earn any wages in the same or other
employment.
3. Forfeiture of Right to Acquire Deferred Shares. If the Employee ceases
to be an employee of the Company or of a Subsidiary (other than as a result of
death or Permanent Total
Disability), the Company no longer will be obligated to issue any unissued
Deferred Shares to the Employee, and the Employee will forfeit any right to
acquire any unissued Deferred Shares from the Company; provided, however, that
to the extent that any unissued Deferred Shares are unissued as a result of a
Delayed Issuance ("Delayed Issuance Shares"), the Company shall issue the
Delayed Issuance Shares to the Employee, but shall have no obligation to issue
any other unissued Deferred Shares.
4. Taxes; Withholding. The Company will not be obligated to issue the
Deferred Shares unless the Employee has paid (in cash or by certified or
cashier's check) to the Company all withholding taxes required to be collected
by the Company under Federal, State, local or foreign law as a result of the
issuance of the Deferred Shares ("Withholding Taxes"). The Company shall be
responsible for the determination of the amount of any Withholding Taxes based
on the last sale price for the Stock on the Stock's principal trading market on
the Issuance Date or the last trading date if the Issuance Date is not a day
upon which the Stock has traded. The Company, in its sole discretion, may permit
the Employee to pay any or all Withholding Taxes through delivery of outstanding
Stock or by the Company withholding a portion of the Deferred Shares issuable
pursuant to this Agreement. The Employee, however, will have no absolute right
to pay the Withholding Taxes with Stock, and, if such payment is permitted by
the Company, such payment must be made in strict compliance with rules for such
payments established by the Company. As of the date of this Agreement, the
Company currently intends to have the Withholding Taxes paid through the
withholding of Stock issuable upon satisfaction of the terms and conditions set
forth in this Agreement (a "net issuance"). The Company reserves the right to
change this mechanism for the collection of Withholding Taxes at any time, upon
notice to the Employee, which notice may be written or electronic notice.
5. Share Certificates. Share certificates for Deferred Shares will not be
issued. Upon issuance, Deferred Shares will be deposited into an account for the
Employee that is established by the Company.
6. Non-Transferability of Right to Receive Deferred Shares. Unless
specifically permitted by the Committee, the Employee may not transfer, assign,
pledge or hypothecate the right to receive the Deferred Shares, and the right to
receive the Deferred Shares may not be transferred or assigned by operation of
law, or be subject to execution, attachment or similar process other than by
will or the laws of descent and distribution.
7. Changes in Capital Structure. The number of Deferred Shares subject to
this Agreement is subject to adjustment pursuant to Section 9.1 of the Plan upon
the occurrence of the events described in that Section.
8. Change in Control. Notwithstanding Section 1, upon a Change in Control
of the Company, the Company will, in its sole discretion, either (a) issue all
unissued Deferred Shares to the Employee in accordance with Section 9.2(a) of
the Plan or (b) pay the Employee in a combination of cash and stock the value of
the Deferred Shares in accordance with Section 9.2(b) of the Plan.
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9. Gross-Up. If the issuance of Deferred Shares would result in "excess
parachute payments" to the Employee pursuant to Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), the Company will pay the Employee
an amount sufficient to put the Employee in the same position as the Employee
would have been if the taxes imposed on the Employee pursuant to Section 4999 of
the Code had not been imposed. Any such payment will include payment of an
amount equal to any income taxes assessed on the Employee with respect to
payments pursuant to this Section. The Company will make any such payment not
later than the date upon which such excise tax payment is due pursuant to
Section 4999 of the Code. Any such payment will in all other respects be made in
accordance with the rules, regulations and procedures adopted by the Company
from time to time with respect to such payments under the Plan.
10. Costs. The Company will pay all original issue and transfer taxes with
respect to, and all other costs, fees and expenses incurred by the Company in
connection with, the issuance of Deferred Shares. Upon issuance, the Employee
shall be responsible for all brokerage expenses associated with the permitted
sale of any Deferred Shares.
11. Applicable Law. No Deferred Shares will be issued and delivered unless
and until, in the opinion of legal counsel for the Company, such securities may
be issued and delivered without causing the Company to be in violation of or
incur any liability under any federal, state or other legal requirement,
including applicable securities laws.
12. The Plan. This Agreement is subject to, and the Employee agrees to be
bound by, all of the terms and conditions of the Plan. The Employee acknowledges
that the Plan may be amended from time to time, and that under the Plan, the
Committee has conclusive authority to interpret and construe the Plan and this
Agreement and is authorized to adopt rules for carrying out the Plan. In the
event of any inconsistency or discrepancy between the provisions of this
Agreement and the terms and conditions of the Plan, the provisions of the Plan
will govern and prevail. No amendment to or interpretation of the Plan, however,
may deprive the Employee of any of his or her rights under this Agreement.
13. Issuance of Shares. Notwithstanding any provision of this Agreement to
the contrary, any Deferred Shares issuable upon satisfaction of the terms and
conditions of this Agreement will be issued by the Company to the Employee prior
to the date that is 2 1/2 months after the end of the first calendar year in
which the Deferred Shares are no longer subject to a "substantial risk of
forfeiture," as such term is defined for purposes of Section 409A of the
Internal Revenue Code of 1986; provided, that if the Employee has not complied
by such date with the provisions of Section 4 of this Agreement relating to
payment of all required Withholding Taxes with respect to such Deferred Shares,
the Employee's right to receive such Deferred Shares shall be forfeited.
14. Miscellaneous. (a) The Employee will not have any interest in, or any
dividend, voting or other rights of a stockholder with respect to, the Deferred
Shares until the Deferred Shares are issued in accordance with this Agreement.
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(b) Any notice to be given to the Company must be in writing addressed to
the Company in care of the Administrator, at its principal office, and any
notice to be given to the Employee must be in writing addressed to the Employee
at the address for the Employee in the records of the Company or by email or
other electronic means using a system maintained by the Company or its
Subsidiary. Any such notice will be deemed duly given when delivered by hand,
deposited in the United States mail, registered or certified mail or transmitted
electronically without a notice of failed delivery.
(c) The Employee is an employee at will, and nothing in this Agreement
confers upon the Employee any right to continued employment with the Company or
limits in any way the right of the Company to terminate the employment of the
Employee at any time.
(d) This Agreement must be construed in accordance with the laws of the
State of Colorado, other than choice of law rules thereof calling for the
application of laws of another jurisdiction.
(e) Terms used but not defined in this Agreement have the meanings ascribed
to them under the Plan.
(f) Although any information sent to or made available to the Employee
concerning the Plan and this Award is intended to be an accurate summary of the
terms and conditions of the Award, this Agreement and the Plan are the
authoritative documents governing the Award and any inconsistency between the
Agreement and the Plan, on one hand, and any other summary information, on the
other hand, shall be resolved in favor of the Agreement and the Plan.
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IN WITNESS WHEREOF, this Agreement is entered into by the Employee and by
the Company as of the date first above written.
LEVEL 3 COMMUNICATIONS, INC.
By: ___________________________
Title: __________________________
EMPLOYEE
______________________________
Name:
Date of Hire:____________________
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EXHIBIT A
LEVEL 3 COMMUNICATIONS, INC.
DEFERRED ISSUANCE STOCK AWARD LETTER
This Deferred Issuance Stock Award Letter (the "Award") when taken together
with the Master Deferred Issuance Stock Agreement ("Master Agreement")
constitutes an award to the individual whose name appears on the signature line
below ("Employee") of Deferred Shares with respect to the shares of common stock
of Level 3 Communications, Inc. (the "Common Stock") under the Level 3
Communications, Inc. 1995 Stock Plan (Amended and Restated as of April 1, 1998,
and as further amended from time to time).
The terms and conditions of this Award are set forth below and in the
Master Agreement, the provisions of which are incorporated herein by reference.
A. The date of this Award is __________ (the "Award Date").
B. The number of Deferred Shares with respect to which this Deferred Issuance
Award Letter relates is __________.
C. The Issuance Date(s) for the Deferred Shares are as follows:
D. The following are conditions to the occurrence of the Issuance Date(s):
LEVEL 3 COMMUNICATIONS, INC.
BY:
ITS:
EMPLOYEE:
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