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EXHIBIT 10.37
QWEST DIGITAL MEDIA, LLC
GROWTH SHARE PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 1, 2000)
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TABLE OF CONTENTS
Page
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Section 1 - INTRODUCTION 1
1.1 Establishment 1
1.2 Purposes 1
1.3 General Plan Description 1
Section 2 - DEFINITIONS 1
2.1 Definitions 1
2.2 Gender and Number 5
Section 3 - PLAN ADMINISTRATION 6
3.1 Administration by the Board 6
3.2 Adoption of Rules 6
Section 4 - PARTICIPATION IN THE PLAN 6
4.1 Eligibility for Participation 6
4.2 Plan Agreement 6
Section 5 - PERFORMANCE CYCLE 7
5.1 Determination of Performance Cycle 7
5.2 Normal Performance Cycle 7
Section 6 - GROWTH SHARE GRANTS 7
6.1 Grants 7
6.2 Number of Growth Shares; Adjustments 7
6.3 Establishment of Individual Growth Share Accounts 8
Section 7 - VESTING OF GROWTH SHARES 8
7.1 Normal Vesting Schedule 8
7.2 Vesting in Other Circumstances 8
7.3 Termination for Cause 8
Section 8 - Initial Public Offering 9
8.1 Value of Growth Shares Capped Upon Initial Public Offering 9
8.2 Issuance of Non-Qualified Stock Options 9
Section 9 - PAYMENTS TO PARTICIPANTS 9
9.1 Value of Growth Shares 9
9.2 Payments to Participants - In General 9
9.3 Form of Payment 10
9.4 Use of Common Stock for Payment 10
9.5 Exceptional Payments 11
Section 10 - RIGHTS OF EMPLOYEES 11
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Page
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Section 11 - DESIGNATION OF BENEFICIARIES 12
Section 12 - CHANGES IN ACCOUNTING RULES 12
Section 13 - OTHER EMPLOYEE BENEFITS 12
Section 14 - PLAN AMENDMENT, MODIFICATION AND TERMINATION 13
Section 15 - SETOFF 13
Section 16 - PLAN FUNDING 13
Section 17 - NON-ASSIGNABILITY OF RIGHTS 13
Section 18 - WITHHOLDING TAXES 14
Section 19 - REQUIREMENTS OF LAW 14
19.1 Requirements of Law 14
19.2 Governing Law 14
Section 20 - SEVERABILITY 14
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QWEST DIGITAL MEDIA, LLC
GROWTH SHARE PLAN
SECTION 1
INTRODUCTION
1.1 Establishment. Qwest Digital Media, LLC, a Delaware limited
liability company, (as defined in subsection 2.1(j), the "Company") adopted the
Qwest Digital Media, LLC Growth Share Plan (the "Plan") effective as of March
23, 1999. The Plan is hereby amended and restated in its entirety as set forth
below, effective as of June 1, 2000. The Plan permits the grant of Growth Shares
(as defined in subsection 2.1(n)) to certain key employees of the Company and
its Affiliated Entities (as defined in subsection 2.1(a)) or to other
individuals selected by the Board.
1.2 Purposes. The purposes of the Plan are to provide the persons
selected for participation in the Plan with added incentives to continue in the
service of the Company and to create in such persons a more direct interest in
the future success of the operations of the Company by relating incentive
compensation to the achievement of long-term growth and financial performance.
The Plan is also designed to attract key employees and to retain and motivate
participating employees by providing an opportunity for such persons to
participate in the long-term growth, profitability and performance of the
Company, thus enhancing the value of the Company.
1.3 General Plan Description. Participants in the Plan will
receive Growth Shares (as defined herein) in the Company. The Growth Shares will
entitle the holders to a portion of the increase in value of the LLC Interests
(as defined in subsection 2.1(p)) or the Common Stock (as defined in subsection
2.1(i)), as applicable, of the Company, as described in Section 9. Except as
otherwise provided in Sections 9.3 and 9.4, the Growth Shares will not, however,
entitle the holders to acquire actual securities of the Company, nor shall the
holders of the Growth Shares have actual ownership rights, such as voting
rights, in the Company. Regardless of any difference in the attributes of the
various classes of Membership Interests (as defined in subsection 2.1(s)) in the
Company, all such classes of membership interests shall be treated as equivalent
for purposes of the Plan.
SECTION 2
DEFINITIONS
2.1 Definitions. The following terms shall have the meanings set
forth below:
(a) "Affiliated Entity" means any corporation, partnership,
limited liability company or other entity which is affiliated with the Company
through stock ownership or otherwise and is treated as a common employer under
the provisions of Sections 414(b) and (c) of the Internal Revenue Code, or is
otherwise designated as an Affiliated Entity by the Board.
(b) "Agreement" or "Plan Agreement" means the written
agreement entered into between the Company and the Participant to carry out the
provisions of the Plan with respect to the Participant and in accordance with
the Plan's terms and conditions.
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(c) "Appraised Value" means the fair market value of the
Company, which shall be the cash price that would be paid for the Company by an
arm's length purchaser, or the Company's assets less its liabilities, determined
by appraisal in accordance with the following provisions, divided by the number
of LLC Interests or shares of Common Stock outstanding, determined on a fully
diluted basis. If the Company is converted into a corporation and if the LLC
Interests are converted into a class of Common Stock of such new corporation,
the "Appraised Value" shall be determined based upon the outstanding shares of
such Common Stock. When Appraised Value is to be used to determine the Ending
Value, the Appraised Value shall be initially determined by an independent
investment banking firm nationally recognized in the telecommunications or media
industry selected by the Board (the "First Appraisal"). For purposes of this
subsection 2.1(c), an investment banking firm shall be considered to be
"independent" regardless of whether the investment banking firm has previously
been retained by the Company or by an Affiliated Entity to provide investment
banking or other financial services. The Company shall furnish the investment
banking firm, and any additional investment banking firm engaged in accordance
with the provisions of this subsection 2.1(c), with access to all financial
records of the Company reasonably necessary for purposes of conducting the
appraisal. The costs and expenses of the First Appraisal shall be borne by the
Company. The First Appraisal shall be completed and delivered to the Board and
all Participants within forty-five (45) days following the applicable Triggering
Event. If any Participant or group of Participants does not agree with the
Appraised Value as so determined, the Participant or Participants may engage an
independent investment banking firm nationally recognized in the
telecommunications or media industry to conduct a second appraisal (the "Second
Appraisal"). The costs and expenses of the Second Appraisal shall be borne pro
rata by the Participant or Participants who elect to have the Second Appraisal.
The Participant or Participants desiring a Second Appraisal must notify the
Board, in writing, of their election within forty-five (45) days following
receipt of the First Appraisal by the Participants. Within twenty (20) business
days after the Board receives written notice from a Participant or Participants
requesting a Second Appraisal, the Board shall notify all Participants in
writing that a Second Appraisal has been requested and any other Participants
may, within twenty (20) business days following the receipt of notice from the
Board, elect to participate in the Second Appraisal by delivering a written
election to the Board. Any Participant who does not elect to conduct a Second
Appraisal shall have the Appraised Value determined pursuant to the First
Appraisal used to determine the Ending Value with respect to his or her Growth
Shares. The Second Appraisal must be completed and delivered to the Board and
the Participants within forty-five (45) days following the notification to the
Board of an election by Participants to conduct the Second Appraisal. If the
Second Appraisal produces an Appraised Value that is not more than 15 percent
higher than the First Appraisal, the First Appraisal determination of Appraised
Value shall be used for purposes of determining the Ending Value. If the Second
Appraisal produces an Appraised Value that is more than 15 percent higher than
the First Appraisal, then a third appraiser that is an independent investment
banking firm nationally recognized in the telecommunications or media industry
shall be selected by the first appraiser and the second appraiser to determine
the Appraised Value (the "Third Appraisal"). The third appraiser shall be
selected by the first appraiser and the second appraiser within ten (10) days
after the completion of the Second Appraisal and shall complete the Third
Appraisal and deliver it to the Board and the Participants within forty-five
(45) days following the date of its appointment. The Appraised Value that shall
be used to determine the Ending Value with respect to the Participants who
requested the Second Appraisal shall be the average of the two Appraised Values,
as determined pursuant to the First Appraisal, the Second Appraisal and the
Third Appraisal, that are closest in value. The costs and
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expenses of the third appraiser shall be borne 50 percent by the Company and 50
percent by the Participants, pro rata, who elected to have the Second Appraisal.
(d) "Award" means the amount payable to the Participant in
accordance with the terms and provisions of the Plan.
(e) "Beginning Value" means such value per LLC Interest or
share of Common Stock as shall be specified by the Board for any grant of Growth
Shares. The Beginning Value with respect to a grant of Growth Shares shall be
specified in the Plan Agreement with each Eligible Employee.
(f) "Board" means the Management Committee or other equivalent
body, including but not limited to a Board of Directors, of the Company.
(g) "Cause" means willful misconduct, a willful failure to
perform the Eligible Employee's duties, insubordination, theft, dishonesty,
conviction of a felony or any other willful conduct that is materially
detrimental to the Eligible Employee's performance of his or her duties or is
materially detrimental to the Company or an Affiliated Entity or such other
cause as the Board in good faith reasonably determines provides cause for the
discharge of an Eligible Employee.
(h) "Change of Control" shall be deemed to have occurred if
any individual, entity, or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), other than (i) Qwest Communications International Inc. ("Qwest"), (ii)
any entity or organization controlled by Qwest, or (iii) any entity or
organization affiliated with Qwest, acquires beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of more than fifty
percent (50%) of either (i) the then-outstanding Membership Interests or Common
Stock of the Company ("Outstanding Shares") or (ii) the combined voting power of
the then-outstanding voting securities of the Company entitled to vote generally
in the election of directors ("Voting Power"). A "Change of Control" shall not
occur if Qwest is merged with or into any other company or all of the stock of
Qwest is acquired by any other company.
(i) "Common Stock" means the common stock of the Company that
is issued in replacement or substitution for the LLC Interests at such time as
the Company is converted into a corporation.
(j) "Company" means Qwest Digital Media, LLC, a Delaware
limited liability company, or any entity which is a successor thereto as a
result of merger, consolidation, liquidation or other reorganization, and, where
the context requires, any Affiliated Entity.
(k) "Effective Date" means the effective date of the Plan,
March 23, 1999.
(l) "Eligible Employees" means those key employees (including,
without limitation, officers and directors who are also employees) of the
Company or an Affiliated Entity, non-employee members of the Board or an
Affiliated Entity, and any other individuals selected by the Board who are
designated for participation in the Plan pursuant to Section 4.
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(m) "Ending Value" means the per share value (determined on a
fully diluted basis) of the LLC Interests or the Common Stock, as the case may
be, used to determine the amount, if any, of an Award payable to a Participant,
which will be determined based on the Triggering Event for the redemption of the
Growth Shares in question, as follows:
(i) If a Triggering Event is the end of the Performance
Cycle, the Ending Value will be the Appraised Value at the end of the
Performance Cycle.
(ii) If the Triggering Event is the termination of the
Plan before the end of the Performance Cycle, the Ending Value will be
the Appraised Value as of the last day of the month coincident with or
immediately following the date as of which the termination of the
Plan occurs.
(iii) If the Triggering Event is a Change of Control
of the Company, the Ending Value will be the Appraised Value
immediately after the date of the Change of Control.
Notwithstanding the foregoing, if the Common Stock is traded
on an established securities market as of the time Ending Value is to be
determined and the Company is subject to the reporting and disclosure
requirements of the Exchange Act, the Ending Value will be equal to the per
share Market Value of such Common Stock on the date of the Triggering Event,
subject to the provisions of Section 8.
(n) "Growth Share" means a unit of value as determined under the
provisions of Section 9 of the Plan.
(o) "Internal Revenue Code" means the Internal Revenue Code of
1986, as it may be amended from time to time.
(p) "LLC Interests" means all of the various Membership Interests
in the Company outstanding from time to time. For purposes of this Plan, all
Membership Interests in the Company shall be treated as equivalent.
(q) "Market Value" means the average of the mean between the bid
and the asked prices of the Common Stock, or the closing price, as applicable,
on the principal stock exchange, NASDAQ or other market on which such equity
security is traded, over the 20 consecutive trading days ending on the date
specified by the relevant provision of the Plan as of which Market Value is to
be determined.
(r) "Measuring Period" means the time period between the date as
of which Beginning Value is determined with respect to the grant of a Growth
Share to a Participant and the date as of which Ending Value is determined.
(s) "Membership Interests" means all classes of outstanding
Membership Interests in the Company.
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(t) "Participant" means an Eligible Employee who has been
selected for participation under the Plan pursuant to Section 4, who has
executed a Plan Agreement and who has outstanding grants of Growth Shares under
the Plan.
(u) "Performance Cycle" means the period established by the Board
at the time of each grant of Growth Shares at the end of which Ending Value is
determined (unless another Triggering Event has occurred prior to the end of the
Performance Cycle) for purposes of calculating the value of such Growth Shares
under the Plan. The Performance Cycle with respect to each grant of Growth
Shares shall be determined by the Board at the time of grant and shall be
specified in the Plan Agreement with respect to such grant of Growth Shares.
(v) "Permanent Disability" means any physical or mental condition
which permanently prevents a Participant from performing the material duties of
his or her current employment. If a Participant makes application for disability
benefits under the Company's long-term disability program, as now in effect or
as hereafter amended, and qualifies for such benefits, the Participant shall be
presumed to qualify as permanently disabled under this Plan.
(w) "Plan" means the Qwest Digital Media, LLC Growth Share Plan
as set forth in this document.
(x) "Retirement" means termination of employment with the Company
and all Affiliated Entities on or after reaching the normal retirement age of
sixty-five.
(y) "Triggering Event" means any event that triggers the
redemption of and payment for the Growth Shares and the determination of Ending
Value, as follows:
(i) end of the Performance Cycle;
(ii) termination of the Plan; or
(iii) Change of Control.
(z) "Vested" or "Vesting" means the portion of a Participant's
Award payable to the Participant in the case of termination of employment with
the Company and all Affiliated Entities for reasons other than Cause as provided
in Section 7. A Participant shall be subject to separate Vesting with respect to
each grant of Growth Shares under the Plan. A Participant shall forfeit any
unvested Growth Shares on the date of termination of employment with the Company
and all Affiliated Entities and the Participant shall not become entitled to
payment with respect to such forfeited Growth Shares as a result of any
subsequent Triggering Event, or otherwise. A Participant who is not an employee
of the Company or an Affiliated Entity shall have Vesting determined in
accordance with the provisions established by that Participant's Plan Agreement.
2.2 Gender and Number. Except when otherwise indicated by the context,
the masculine gender shall also include the feminine gender, and the definition
of any term herein in the singular shall also include the plural.
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SECTION 3
PLAN ADMINISTRATION
3.1 Administration by the Board. The Plan shall be administered by
the Board. The Board shall have exclusive and final authority, without modifying
or changing the Plan, to interpret the Plan consistent with the intent of the
Plan, to prescribe, amend, and rescind rules and regulations relating to the
Plan, to delegate such responsibilities or duties as are allowable under the
Plan or by law and as it deems desirable, and if it so determines, to cause an
audit of the Plan's operations to be conducted by an independent certified
public accounting firm selected by the Board, and to make all other
determinations necessary or advisable for the administration of the Plan. In
exercising its authority and discretion under the Plan, unless the context
clearly provides otherwise, all decisions of the Board shall be made in the sole
and absolute discretion of the Board. If a Compensation Committee is established
by the Board, the Board may, if it so determines, delegate all or any portion of
its authority under the Plan to the Compensation Committee.
3.2 Adoption of Rules. The Board may from time to time adopt such
rules and regulations for carrying out the purposes of the Plan as it may deem
proper and in the best interests of the Company. The Board may correct any
defect, supply any omission or reconcile any inconsistency in the Plan or in any
agreement entered into hereunder in the manner and to the extent it shall deem
expedient and it shall be the sole and final judge of such expediency. The
determinations, interpretations and other actions of the Board pursuant to the
provisions of the Plan shall be binding and conclusive for all purposes and on
all persons.
SECTION 4
PARTICIPATION IN THE PLAN
4.1 Eligibility for Participation. The Board shall establish the
criteria for participation of Eligible Employees in the Plan, select the
Participants, determine the number of Growth Shares to be granted to each
Participant, and the provisions applicable to such Growth Shares, which may
include provisions in addition to or different than the provisions of the Plan.
The Board may delegate the authority and responsibility to select Participants
and determine the number of Growth Shares to the Compensation Committee or to
the Chairman of the Board. As a general matter, Plan participation shall be
extended to those Eligible Employees of the Company and Affiliated Entities who,
in the opinion of the Board, have the opportunity to significantly enhance the
long-term financial success of the Company. The Board shall have the power and
authority to designate any individual, whether or not an employee of the Company
or an Affiliated Entity, as an "Eligible Employee" for purposes of participation
in the Plan. An Eligible Employee shall become a Participant in the Plan upon
designation as an Eligible Employee by the Board, and the execution by the
Participant and the Company of a Plan Agreement.
4.2 Plan Agreement. The Plan Agreement will specify the terms and
conditions of a grant of Growth Shares to a Participant, including the number of
Growth Shares granted, the date as of which Beginning Value shall be calculated,
and the amount of Beginning Value, for purposes of calculating the value of the
Growth Shares, the Performance Cycle associated with
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the Growth Shares, the beginning date for the Measuring Period with respect to
the Growth Shares, the Vesting arrangement that shall apply to the Participant's
Growth Shares, and any other provisions that shall apply to the Participant's
Growth Shares, which may include provisions in addition to or different than the
provisions of the Plan. The Plan Agreement must be signed by the Participant and
by an authorized officer of the Company (other than the Participant).
SECTION 5
PERFORMANCE CYCLE
5.1 Determination of Performance Cycle. The Board shall determine
at the time of each grant of Growth Shares hereunder when the Performance Cycle
with respect to the grant of such Growth Shares shall begin and end.
5.2 Normal Performance Cycle. The normal Performance Cycle shall
be a five (5) year period, but the Board may specify shorter or longer
Performance Cycles with respect to any specific grant of Growth Shares. The
beginning and ending of the Performance Cycle will be specified for each grant
of Growth Shares in the Plan Agreement with each Participant.
SECTION 6
GROWTH SHARE GRANTS
6.1 Grants. Growth Shares shall be granted to a Participant based
upon the Board's assessment of the anticipated role and contribution of the
Participant over the applicable Performance Cycle. Growth Shares will ordinarily
be granted to Participants only at the beginning of a Performance Cycle,
provided, however, that the Board in its sole discretion may grant additional
Growth Shares with respect to a Performance Cycle at any time during the
Performance Cycle. The Beginning Value of the Growth Shares as determined by the
Board for each grant will be specified in the Participant's Plan Agreement for
purposes of calculating the value of the Growth Shares.
6.2 Number of Growth Shares; Adjustments. Each Growth Share shall
represent the equivalent of one LLC Interest or the equivalent number of shares
of Common Stock into which one LLC Interest is converted upon conversion of the
Company into a corporation. The maximum number of Growth Shares that may be
awarded under the Plan shall not exceed an aggregate of 12,750,000. If the
outstanding LLC Interests or shares of Common Stock of the Company, as the case
may be, are changed as a result of a stock dividend or any other distribution
upon such shares payable in Common Stock, or through a stock split, subdivision,
consolidation, combination, reclassification, recapitalization or other similar
change in the LLC Interests or the Common Stock, the number of Growth Shares
then held by Participants and covered by the Plan, the Beginning Value with
respect to such Growth Shares and the number of Growth Shares that may be
awarded under the Plan, shall be correspondingly adjusted by the Board to
equitably reflect such change and any such adjustment shall be conclusive and
binding for all purposes of the Plan. If the total number of outstanding LLC
Interests or shares of Common Stock, as the case may be, are increased after the
Effective Date as a result of a merger,
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acquisition, consolidation, reorganization or similar corporate transaction, or
through the sale of additional LLC Interests or shares of Common Stock, no
adjustment shall be made with respect to outstanding Growth Shares or the Growth
Shares available for issuance under the Plan, unless the Board determines that
the Company has not received at least equivalent value for the additional LLC
Interests or shares of Common Stock in which case the Board shall make
appropriate adjustments to the outstanding Growth Shares to equitably reflect
any dilution in value of the outstanding LLC Interests or Common Stock. The
Board shall retain sole discretion to determine the total number of Growth
Shares to be granted at the beginning of any Performance Cycle and the number of
Growth Shares to be awarded to any specific Participant. The Company anticipates
that only a portion of the total Growth Shares allocated to the Plan will be
granted initially, so that a number of Growth Shares will be reserved for grants
to new Participants and for grants pursuant to new Performance Cycles. If a
Growth Share has been redeemed and an Award made to a Participant in accordance
with the provisions of Section 8, or if a Growth Share has been forfeited or
canceled for any other reason, the Growth Share shall again be available for
grant under the Plan.
6.3 Establishment of Individual Growth Share Accounts. The Company
shall establish, or shall cause to be established, individual accounts for each
Participant which will be unsecured and unfunded and will be maintained for each
grant of Growth Shares to a Participant under the Plan. The account for each
Participant shall reflect the number of Growth Shares granted and held by such
Participant and the Beginning Value of each such Growth Share.
SECTION 7
VESTING OF GROWTH SHARES
7.1 Normal Vesting Schedule. Growth Shares granted under the Plan
shall Vest at the rate of 20 percent for each full year of employment with the
Company or an Affiliated Entity (or as specified in the Plan Agreement for a
particular Participant) completed after the effective date of the grant of the
Growth Shares unless the Board specifies a different Vesting arrangement with
respect to the grant of Growth Shares to a particular Participant. The manner in
which each Participant's Growth Shares shall Vest shall be set forth in the Plan
Agreement with the Participant. Different Vesting arrangements may apply with
respect to the grant of Growth Shares to different Participants.
7.2 Vesting in Other Circumstances. A Participant shall become 100
percent Vested in all his or her Growth Shares in the event of the Participant's
death, Permanent Disability or Retirement. A Participant shall also become 100
percent Vested in all of his or her Growth Shares upon the occurrence of a
Triggering Event described in subsection 2.1(y)(ii) or (iii). The end of a
Performance Cycle shall not cause any acceleration of Vesting for any
Participant.
7.3 Termination for Cause. If a Participant's employment is
terminated for Cause, he shall forfeit all of his or her Vested Growth Shares
and shall not be entitled to any Award or payment under this Plan with respect
to any Growth Shares previously granted to such Participant.
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SECTION 8
INITIAL PUBLIC OFFERING
8.1 Value of Growth Shares Capped Upon Initial Public Offering.
Notwithstanding the provisions of subsection 2.1(m), in the event that the
Company sells shares of its Common Stock to the public in an underwritten public
offering under the Securities Act of 1933, or any equivalent applicable law (an
"IPO"), the Ending Value of a Participant's Growth Shares shall not exceed the
price to the public per share in such IPO established by the pricing committee
at the pricing meeting held to establish such price, or the equivalent event
(the "Initial Public Price"). The IPO shall not accelerate the Vesting with
respect to any Growth Shares nor accelerate the payment for such Growth Shares,
and the provisions of this Plan shall remain applicable to all such Growth
Shares.
8.2 Issuance of Non-Qualified Stock Options. In the event of an
IPO as described in Section 8.1, each Participant then holding Growth Shares
shall receive a non-qualified stock option from the Company entitling the
Participant to purchase an equivalent number of shares of the Company's Common
Stock at a price per share equal to the Initial Public Price and with a vesting
schedule identical to the vesting schedule then in place with respect to such
Participant's Growth Shares. The non-qualified stock option shall become
effective at the time of the IPO. The non-qualified stock option shall contain
such other customary terms and conditions as may be determined by the Board in
its sole discretion.
SECTION 9
PAYMENTS TO PARTICIPANTS
9.1 Value of Growth Shares. The value of a Participant's Growth
Shares will be calculated according to the following formula: (A - B - C + D) x
E, as follows: (A) Ending Value, less (B) Beginning Value, less (C) an amount
equal to 9% of each capital contribution or addition to the capital of the
Company, divided by the number of outstanding LLC Interests or shares of Common
Stock determined on a fully diluted basis at the time of such capital
contribution or addition to the capital, compounded annually for the period
beginning on the date of each such capital contribution or other addition to the
capital of the Company through the end of the Measuring Period, reduced
appropriately for any returns of capital, plus (D) total distributions made with
respect to all LLC Interests or dividends paid on the Common Stock and any
withdrawal of capital or redemptions of stock by the parent or shareholder(s) of
the Company over the Measuring Period, divided by the number of LLC Interests or
shares of Common Stock outstanding at the time (determined on a fully diluted
basis), multiplied by (E) the number of Growth Shares granted to the Participant
for which value is being determined. The value of each Participant's Growth
Shares shall be determined as soon as practicable before or after the applicable
Triggering Event, but in no event later than ninety (90) days after the
Triggering Event.
9.2 Payments to Participants - In General. Except as otherwise
provided in this Section, a Participant in the Plan shall receive payment for
his or her Vested Growth Shares that are affected by the applicable Triggering
Event within thirty (30) days following the final determination of value
referenced in Section 9.1 above. If a Participant is not 100% Vested at
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the time of, or because of, a Triggering Event, the Participant shall receive
payment for his or her Vested Growth Shares covered by such Triggering Event in
accordance with the provisions of this Section 9.2 and shall receive payment
with respect to the unvested Growth Shares at such time as such Growth Shares
become Vested in accordance with the provisions of the Plan. The amount of any
payment that is delayed in accordance with the foregoing provision shall be
equal to the payment that would have been made to the Participant if the Vested
Growth Shares with respect to which the Participant becomes entitled to payment
had, in fact, been Vested at the time of the Triggering Event and the delayed
payment shall be made in the same medium (cash or Common Stock of the Company as
provided in Sections 9.3 and 9.4) used for the payment to Participants at the
time of the Triggering Event. If a Participant does not become Vested with
respect to any Growth Shares that are unvested at the time of a Triggering
Event, the Participant shall not be entitled to any payment with respect to such
Growth Shares.
9.3 Form of Payment. Except as provided below, payment shall be
made to the Participant either in a cash lump sum or in shares of the Company's
Common Stock, as determined by the Board, subject to applicable withholding of
income tax and other amounts, no later than thirty (30) days after the final
determination of the value of the Growth Shares. Notwithstanding the foregoing,
if at the time of the Triggering Event the shares of the Company's Common Stock
satisfy the requirements of Section 9.4(b), payment shall be made in shares of
the Company's Common Stock with a Market Value as of the date of the Triggering
Event equal to the value of the Participant's Growth Shares determined under
Section 9.1. A Participant who is not 100% Vested at the time of a Triggering
Event for which payment is made in shares of the Company's Common Stock shall
receive payment for his Vested Growth Shares, at the time specified in Section
9.2, of the same number of shares of the Company's Common Stock that would have
been issued to him at the time of the Triggering Event with respect to such
number of Vested Growth Shares.
9.4 Use of Common Stock for Payment.
(a) If the Board elects to make payment of amounts due under
this Plan in shares of the Company's Common Stock at a time when such Common
Stock is not actively traded on an established securities market and the Company
is not subject to the reporting and disclosure requirements of the Exchange Act,
the Company will take such actions as it may determine to be necessary to comply
with applicable federal, state and foreign securities laws with respect to such
participant. If the shares of the Company's Common Stock to be received by a
Participant hereunder may not be immediately sold by the Participant because of
restrictions imposed by federal, state or foreign securities laws, the Board
shall permit the Participant to elect to pay the applicable income and other
taxes required to be withheld by causing the Company to withhold from the shares
otherwise issuable to the Participant sufficient shares to satisfy the
withholding obligation, provided, however, that the amount of shares of Common
Stock withheld shall not exceed the minimum applicable withholding rate. The
value of the Company's Common Stock for purposes of determining the number of
shares of such Common Stock to be issued to Participants in payment for their
Growth Shares for purposes of this Section 9.4(a) shall be determined by
appraisal in accordance with the provisions of Section 2.1(c) as of the last day
of the Measuring Period.
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(b) Shares of the Company's Common Stock shall be used in
payment of amounts due under this Plan if such Common Stock is actively traded
on an established securities market and the Company is subject to the reporting
and disclosure requirements of the Exchange Act. Prior to the issuance of shares
of the Company's Common Stock as payment hereunder, the Company shall file a
registration statement (on Form S-8 or other form selected by the Company) and
take such other actions as may be reasonably required to permit the Participants
to sell immediately such shares. If the shares of the Company's Common Stock to
be received by a Participant hereunder may not be immediately sold by the
Participant because of restrictions imposed by federal or state securities laws,
the Board shall permit the Participant to elect to pay the applicable income and
other taxes required to be withheld by causing the Company to withhold from the
shares otherwise issuable to the Participant sufficient shares to satisfy the
withholding obligation, provided, however, that the amount of shares of Common
Stock withheld shall not exceed the minimum applicable withholding rate.
9.5 Exceptional Payments. Notwithstanding the foregoing provisions
of this Section 9, the Board may cause any payments due hereunder to be made in
two equal annual installments. As provided in Section 9.2 above, the first such
payment shall be made within thirty (30) days after the final determination of
the value of the Growth Shares payable to the Participant and the subsequent
annual payment shall be made on the anniversary of such date, together with
interest thereon at the consolidated prime rate, as published in the Wall Street
Journal, in effect on the date of the payment of the first annual installment,
plus one percentage point. Notwithstanding the foregoing, payment of amounts
required as a result of a sale of the Company (or its assets) that constitutes a
Change of Control and a Triggering Event shall be made immediately prior to the
effective time of the applicable Triggering Event. Such payment may be made by
the Company or by the principal shareholder of the Company, as determined in the
sole discretion of such shareholder.
SECTION 10
RIGHTS OF EMPLOYEES
Nothing contained in the Plan or in any Growth Share granted under the
Plan shall confer upon any Participant any right with respect to the
continuation of his or her employment by the Company or Affiliated Entity, or
interfere in any way with the right of the Company or Affiliated Entity, subject
to the terms of any separate employment agreement to the contrary, at any time
to terminate such employment or to increase or decrease the compensation of the
Participant. Whether an authorized leave of absence, or absence in military or
government service, shall constitute a termination of employment for any purpose
of this Plan shall be determined by the Board, subject to the requirements of
applicable law, if any.
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SECTION 11
DESIGNATION OF BENEFICIARIES
A Participant may designate a beneficiary or beneficiaries to receive
all or part of the amounts earned by the Participant under the Plan in case of
death. A designation of beneficiary may be replaced by a new designation or may
be revoked by the Participant at any time. A designation or revocation shall be
on a form to be provided by the Company for this purpose and shall be signed by
the Participant and delivered to the Company prior to the Participant's death.
In the case of the Participant's death, the amounts to be distributed to the
Participant under the Plan with respect to which a designation of beneficiary
has been made (to the extent it is valid and enforceable under applicable law)
shall be distributed in accordance with the Plan to the designated beneficiary
or beneficiaries. The amount distributable to a Participant upon death and not
subject to a valid beneficiary designation shall be distributed to the
Participant's estate. If there shall be any question as to the legal right of
any beneficiary to receive a distribution under the Plan, the amount in question
may be paid to the estate of the Participant, in which event the Company shall
have no further liability with respect to such amount.
SECTION 12
CHANGES IN ACCOUNTING RULES
Notwithstanding any other provision of the Plan to the contrary, if,
during the term of the Plan, any changes in the financial or tax accounting
rules applicable to Growth Shares shall occur which, in the sole judgment of the
Board, may have a material adverse effect on the reported earnings, assets or
liabilities of the Company, the Board shall have the right and power to modify
as necessary any then outstanding Growth Shares, provided, however, that no such
modification shall in any manner adversely affect any Growth Shares theretofore
granted under the Plan without the consent of the Participant holding such
Growth Shares.
SECTION 13
OTHER EMPLOYEE BENEFITS
The amount of any compensation deemed to be received by a Participant
as a result of the receipt of Growth Shares or cash payments for such Growth
Shares shall not constitute "earnings" with respect to which any other employee
benefits of such employee are determined, including without limitation benefits
under any pension, profit sharing, 401(k), life insurance or salary continuation
plan.
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SECTION 14
PLAN AMENDMENT, MODIFICATION AND TERMINATION
The Board may at any time terminate, and from time to time may amend or
modify the Plan. The Plan shall terminate upon the sale of all or substantially
all of the assets of the Company, a distribution of all or substantially all of
the assets of the Company to its shareholders, or the merger or reorganization
of the Company if the Company is not the surviving entity. Upon termination of
the Plan, no further Growth Shares shall be issued, but the provisions of the
Plan shall remain applicable to all Growth Shares then outstanding at the time
of Plan termination. No amendment, modification or termination of the Plan shall
in any manner adversely affect any Growth Shares theretofore granted under the
Plan, without the consent of the Participant holding such Growth Shares.
SECTION 15
SETOFF
All or part of any amount otherwise due and payable to a Participant
under the Plan may be setoff or applied by the Company against any liability or
reimbursement then due and payable by the Participant to the Company.
SECTION 16
PLAN FUNDING
Obligations to Participants under the Plan will not be funded,
trusteed, insured or secured in any manner. The Participants under the Plan
shall have no security interest in any assets of the Company, shall have no
interest or right as a shareholder in the Company and shall be only general
creditors of the Company.
SECTION 17
NON-ASSIGNABILITY OF RIGHTS
Except as provided in the Plan, no grant, right, benefit or account of
a Participant under this Plan shall be subject to anticipation, alienation,
sale, assignment, pledge, encumbrance, or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber, or charge the same shall be void. No
right or benefit under the Plan shall in any manner be liable for or subject to
the debts, contracts, liabilities, or torts of the person entitled to such
benefits except as expressly provided herein. If any Participant should become
bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber, or
charge any right or benefit hereunder, then such right or benefit shall, in the
discretion of the Company, cease, and in such event, the Company may hold or
apply the Participant's Growth Shares or any part thereof for the benefit of the
Participant or the Participant's spouse, children, or other dependents, or any
of them in such manner and in such proportions as the Board shall deem proper.
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SECTION 18
WITHHOLDING TAXES
The Company shall have the right to deduct from all amounts payable to
a Participant any taxes or other impositions required by law to be withheld upon
such payment.
SECTION 19
REQUIREMENTS OF LAW
19.1 Requirements of Law. The issuance of Growth Shares and the payment
of cash pursuant to the Plan shall be subject to all applicable laws, rules and
regulations.
19.2 Governing Law. The Plan and all agreements hereunder shall be
construed in accordance with and governed by the laws of the State of Colorado
without the application of any conflicts of laws or principles otherwise
applicable under Colorado law.
SECTION 20
SEVERABILITY
In the event that any provision of the Plan is held invalid, void or
unenforceable, the same shall not affect, in any respect whatsoever, the
validity of any other provision of the Plan.
QWEST DIGITAL MEDIA, LLC
ATTEST:
- ------------------------------
By:
------------------------------------
Dated:
------------------------
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QWEST DIGITAL MEDIA, LLC
GROWTH SHARE PLAN AGREEMENT
THIS AGREEMENT is made and entered into as of _________________, 19___,
by and between Qwest Digital Media, LLC (the "Company") and
___________________________ (the "Participant").
WHEREAS, the Company has adopted the Qwest Digital Media, LLC Growth
Share Plan (as Amended and Restated effective June 1, 2000) (the "Plan"), and
WHEREAS, the Plan requires that an Agreement be entered into between
the Company and the Participant setting out certain terms and benefits of the
Plan as they apply to the Participant;
NOW, THEREFORE, the Company and the Participant hereby agree as
follows:
1. The Plan is hereby incorporated into and made a part of this
Agreement as though set forth in full herein. Capitalized terms that are used
herein shall have the meanings assigned to such terms by the Plan, unless
another definition is specified in this Agreement. The parties shall be bound
by, and have the benefit of, each and every provision of the Plan, including but
not limited to the provisions relating to amendment and termination of the Plan
which are set forth in the Plan.
2. The beginning of the Performance Cycle for Growth Shares granted
under this Agreement will be ____________________.
3. The end of the Performance Cycle for Growth Shares granted under
this Agreement will be ____________________.
4. The Participant is hereby granted _____________ Growth Shares under
this Agreement.
5. The Beginning Value per LLC Interest or share of Common Stock, as
the case may be, for the purpose of determining the value of the grant is
[$____________].
6. The Measuring Period with respect to the Growth Shares granted under
this Agreement will begin on _________________.
7. Growth Shares granted under this Agreement will vest according to
the following schedule:
19
Period of Time Since
[Effective Date of
Grant] (Years) Annual Vesting Cumulative Vesting
---------------------- -------------- ------------------
8. This Agreement shall inure to the benefit of, and be binding upon,
the Company, its successors and assigns, and the Participant and his
Beneficiaries.
9. This Agreement may be modified or amended only by means of a written
instrument executed by the parties hereto.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
on the date first above written.
QWEST DIGITAL MEDIA, LLC
By:
---------------------------------
PARTICIPANT
------------------------------------
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DESIGNATION OF BENEFICIARY FOR PAYMENTS
DUE UNDER QWEST DIGITAL MEDIA, LLC
GROWTH SHARE PLAN
The undersigned is a Participant in the Qwest Digital Media, LLC Growth
Share Plan (as Amended and Restated effective June 1, 2000) (the "Plan")
established by Qwest Digital Media, LLC (the "Company").
Pursuant to Section 11 of the Plan, the undersigned hereby designates
the following persons or entities as primary and secondary beneficiaries and
primary and secondary appointees as my legal representative of any amount due to
me under the Plan with respect to the grant of Growth Shares effective as of
_________________ and payable by reason of my death or disability, respectively:
DEATH
Primary Beneficiary:
Name: Address: Relationship:
- -------------------------- ----------------------- ---------------
-----------------------
Secondary (Contingent) Beneficiary:
Name: Address: Relationship:
- -------------------------- ----------------------- ---------------
-----------------------
DISABILITY
Primary Appointee:
Name: Address: Relationship:
- -------------------------- ----------------------- ---------------
-----------------------
Secondary (Contingent) Appointee:
Name: Address: Relationship:
- -------------------------- ----------------------- ---------------
-----------------------
THE RIGHT TO REVOKE OR CHANGE ANY BENEFICIARY OR APPOINTEE DESIGNATION IS HEREBY
RESERVED. ALL PRIOR DESIGNATIONS (IF ANY) OF BENEFICIARIES AND APPOINTEES, OF
ANY KIND, ARE HEREBY REVOKED.
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The Company shall pay all sums payable under the Plan by reason of my
death to the Primary Beneficiary, if he or she survives me, and if no Primary
Beneficiary shall survive me, then to the Secondary Beneficiary, and if no named
beneficiary survives me, then the Company shall pay all amounts in accordance
with Section 11 of the Plan. In the event that a named beneficiary survives me
and dies prior to receiving the entire amount payable under the Plan, then and
in that event, the remaining unpaid amount, payable according to the terms of
the Plan, shall be payable to the personal representative of the estate of said
deceased beneficiary, who survives me, but dies prior to receiving the total
amount due under the Plan. This same payment scheme shall apply to Primary and
Secondary Appointees except that no amount payable under the Plan shall be paid
to the estate of a Primary or Secondary Appointee. Should the Secondary
Appointee not survive me and not receive the full amount payable under the Plan,
then such remaining amount shall be payable to my guardian or conservator as
appointed by a court of competent jurisdiction.
IN WITNESS WHEREOF, the undersigned has executed this document on the
day and year hereinafter indicated, in the presence of the witnesses indicated
below who each signed as witnesses in the presence of the undersigned and each
other.
--------------------------------
Name
--------------------------------
Signature
--------------------------------
Date
WITNESSES:
- ------------------------------
Name
- ------------------------------
Signature
- ------------------------------
Name
- ------------------------------
Signature
NOTE: In preparing this Designation of Beneficiary, you should consult with your
attorney to determine the appropriate method of designation consistent
with your personal estate plan.