Exhibit 10.2(a)
AMENDMENT NO. 1
to
EMPLOYMENT AGREEMENT
Amendment No. 1, dated as of February 27, 1996, to the Employment Agreement
dated as of May 24, 1993 (the "Employment Agreement"), between Century Telephone
Enterprises, Inc., a Louisiana corporation (the "Company"), and Xxxxxx X.
Xxxxxxxx ("Executive").
WITNESSETH:
WHEREAS, the Employment Agreement provides Executive with various benefits
if the Company terminates Executive without cause or if Executive resigns under
certain specified circumstances, including the right, under certain
circumstances following a Change in Control of the Company (as defined therein),
to receive such additional cash payments as may be necessary to compensate
Executive for any federal excise taxes imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended ("Gross-Up Payments");
WHEREAS, subsequent to the date of the Employment Agreement other officers
of the Company have been granted contractual rights to receive Gross-Up Payments
pursuant to certain severance agreements (the "Severance Agreements")'
WHEREAS, the Company believes that the contractual rights to receive
Gross-Up Payments afforded to the Company's other officers under the Severance
Agreements are more comprehensive and better advance the objectives of such
provisions than those contractual rights currently provided to Executive under
the Employment Agreement; and
WHEREAS, the Company believes it is necessary and appropriate, and in the
Company's best interests, to provide Executive with the right to receive
Gross-up Payments identical to those held by the Company's other officers;
NOW, THEREFORE, the parties agree as follows:
1. Effective as of the date hereof, Section 5.05 of the Employment
Agreement is hereby amended in its entirety to read as follows:
5.05 Change in Control. If, following a Change in Control of the
Company, the Company terminates Executive's employment, other than for
death, disability or Cause, or Executive terminates his employment (whether
or not for Good Reason), the Company shall, contemporaneously with any
payments due under Section 5.04 and in addition to any other amounts due,
pay in cash to Executive an additional amount (the "Gross-up Payment") such
that the sum of all such payments will enable Executive to receive on a net
basis, after deducting any excise tax imposed on Executive by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code"), in
connection with his receipt of all such payments and any federal, state and
local income taxes imposed on Executive in connection with his receipt of
all such payments, the same dollar amount as Executive would receive on a
net basis (after deducting any applicable federal, state and local income
taxes) if no such excise tax were payable under Section 4999 of the Code.
In connection with making the Gross-up Payment, the Company shall cause the
Auditors (as defined below) to furnish written calculations of (a)
Executive's "base amount" within the meaning of Section 280G of the Code
and the regulations promulgated thereunder (the "Base Amount"), (b) the
amount of any "parachute payment" deemed to have been received by Executive
with respect to the Change in Control of the Company within the meaning of
Section 280G of the Code and the regulations promulgated thereunder (the
"Parachute Payment") and (c) the aggregate marginal income tax rate
applicable to Executive, after taking into account all applicable federal,
state and local income taxes (the "Applicable Rate"). Upon receipt of these
calculations from the auditors, the parties shall, unless they mutually
agree in writing to the contrary, determine the amount of the Gross-up
Payment in accordance with the following formula:
G = (.2P - .2B) / (.8 - R)
where G is the amount of the Gross-up payment, P is the amount of the
Parachute Payment, B is the Base Amount and R is the Applicable Rate. If
the Auditors fail to timely complete and deliver the calculations referred
to above, the Company may defer making the Gross-up Payment (but not other
payments contemplated hereunder) until such calculations are received,
provided that no deferral shall be permitted if the Auditor's untimeliness
is caused directly or indirectly by the Company's failure to cooperate in
good faith with the Auditors and further provided that in no event
whatsoever shall this payment be deferred by more than 10 business days.
For purposes hereof, "Auditors" shall mean the Company's regular
independent auditors as of the earlier of (i) the day of the public
announcement of a Change in Control of the Company or a proposal that
results in a Change in Control of the Company or (ii) the date that the
Board enters into negotiations with any person or entity, which
negotiations result in a Change in Control of the Company.
2. Notwithstanding any differences between Section 1.6 of the Severance
Agreements and Section 4.04(c) of the Employment Agreement, any event that
constitutes a "Change in Control" under the Severance Agreements shall be deemed
to also constitute a "Change in Control of the Company" under the Employment
Agreement.
3. The Employment Agreement, as amended by Sections 1 and 2 hereof, is, and
shall continue to be, in full force and effect and is hereby ratified and
confirmed in all respects.
IN WITNESS WHEREOF, the parties have duly executed this instrument as
of the date and year first above written.
CENTURY TELEPHONE ENTERPRISES, INC.
By: /s/ Xxxx X. Post, III
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Xxxx X. Post, III
Vice Chairman, President and
Chief Executive Officer
EXECUTIVE:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
