Exhibit 10.2
AMENDED MASTER DEFERRED ISSUANCE STOCK AGREEMENT
This Amended Deferred Issuance Stock Agreement (along with the Exhibits
hereto, this "Agreement") is entered into as of _____________________, 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 Xxxxxxx Xxxxxxx 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 Xxxxxxx Xxxxxxx Policy, and (iii) at that time, the
Company is not, with respect to the Employee, using a method 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 the
Employee's retirement (in accordance with the Company's retirement benefit then
in effect), 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 or retirement in accordance with
the Company's retirement benefit then in effect), 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. (a) Notwithstanding anything contained
herein to the contrary, other than Section 8 and Section 9, the Company will not
be obligated to issue the Deferred Shares or the Delayed Issuance 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. To the extent that the Employee desires to pay the Withholding Taxes
in cash or by certified or cashier's check, with respect to a specific Issuance
Date, the Employee must deliver a separate Withholding Taxes Cash Payment
Notification to the Company's stock plan administrator substantially in the form
of Exhibit B no later than 45 days prior to that specific Issuance Date. To the
extent that the Employee elects to pay the Withholding Taxes in cash or by
certified or cashier's check, such payment must be received by the Company's
stock plan administrator no later than one (1) Business Day after the Issuance
Date of any Deferred Shares that is the subject of the Withholding Taxes Cash
Payment Notification.
(b) 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, unless
the Company has received a properly executed and delivered Withholding Taxes
Cash Payment Notification from the Employee, 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 Stock that is withheld by the Company as part of the net
issuance (the "Withheld Shares") will be sold on behalf of the Employee as
contemplated by subsection (c) of this Section 4; provided, however, that at the
sole discretion of the Company, the Withheld Shares may be retained by the
Company and the Company will satisfy the Withholding Taxes from the Company's
available cash. The Company reserves the right to change its method with respect
to the Employee for the collection of Withholding Taxes that may be owed by the
Employee at any time in its sole discretion, upon notice to the Employee, which
notice may be written or electronic notice.
2
(c) By the execution of this Agreement, to the extent that the
Company elects to issue the Deferred Shares as a net issuance, and, the Employee
has not properly executed and delivered to the Company's stock plan
administrator a Withholding Taxes Cash Payment Notification, the Employee hereby
irrevocably instructs the Company and a broker of the Company's choosing, to
sell on behalf of the Employee at the "market price," that number of shares of
Stock required to generate sufficient funds to equal the Withholding Taxes
required to be paid by the Employee pursuant to this Section 4. The Employee
represents to the Company and the broker that the Employee is entering into this
Agreement in good faith. The Employee shall have no ability to modify these
instructions other than by the proper execution and delivery to the Company's
stock plan administrator of a Withholding Taxes Cash Payment Notification. It is
the Employee's intention that this provision comply with the requirements of
Rule 10b5-1 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934.
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.
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
3
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.
(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.
4
(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.
5
IN WITNESS WHEREOF, this Agreement is entered into by the Employee and
by the Company as of the date first above written.
XXXXX 0 COMMUNICATIONS, INC.
By: ___________________________
Title: __________________________
EMPLOYEE
------------------------------
Name:
Date of Hire:____________________
6
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):
XXXXX 0 COMMUNICATIONS, INC.
BY:
-------------------------------------------------
ITS:
------------------------------------------------
EMPLOYEE:
-------------------------------------------
7
EXHIBIT B
LEVEL 3 COMMUNICATIONS, INC.
WITHHOLDING TAXES CASH PAYMENT NOTIFICATION
This Withholding Taxes Cash Payment Notification is being delivered by
the individual whose name appears on the signature line below (the "Employee")
in reference to an Award of Deferred Shares made to the Employee by Level 3
Communications, Inc. (the "Company") pursuant to that certain Amended Master
Deferred Issuance Agreement dated as of ________________ between the Company and
the Employee (the "Master Agreement"). Capitalized terms used in this
Withholding Taxes Cash Payment Notification without definition have the meaning
given to those terms in the Master Agreement.
This Withholding Taxes Cash Payment Notification relates to the Award
of Deferred Shares granted to the Employee pursuant to the Award Letter issued
to the Employee dated _____________________, the restrictions on which will
lapse as to _____________ Deferred Shares on ____________________ (the
"Referenced Award").
The Employee hereby irrevocable elects to pay any Withholding Taxes
that are owed by the Employee upon the Issuance Date in cash or by certified or
cashier's check made payable to Level 3 Communications, Inc. within one (1)
Business Day of the Issuance Date. All payments of Withholding Taxes are to be
made to the Company's stock award administrator.*
The Employee hereby represents and warrants to the Company that on the
date hereof, the Employee is not in possession of material non-public
information regarding the business or financial condition of the Company and its
subsidiaries.
To the extent that the Employee is subject to the Company's Xxxxxxx
Xxxxxxx Policy's restrictions on the ability to trade the Company's securities
other than during an open trading window, the Employee expressly acknowledges
that: (a) the Employee has executed this Withholding Taxes Cash Payment
Notification during an open trading window pursuant to the Company's Xxxxxxx
Xxxxxxx Policy; and (b) the Employee may not sell any shares of Stock that are
distributed to the Employee on the Issuance so long as the trading window is
closed.
Employee:
---------------------------------------
(Please sign)
Name:
--------------------------------------------------
(Please print)
Date of Hire:
------------------------------------------
Date:
--------------------------------------
* Delivery information with respect to the payment of Withholding Taxes must be
obtained from the Company's stock plan administrator.
8
