Exhibit 10.1(a)
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of May 24, 1993, as
amended and restated through February 22, 2000, by and between CenturyTel,
Inc., a Louisiana corporation (the "Company"), and Xxxxxx X. Xxxxxxxx
("Executive").
WITNESSETH:
WHEREAS, as of May 24, 1993, the Company and Executive entered into an
employment agreement providing benefits on terms and conditions substantially
similar to those set forth herein (the "Original Agreement");
WHEREAS, the Company and Executive amended the Original Agreement by an
instrument dated February 27, 1996 to provide Executive with benefits
substantially similar to those set forth in Section 5.05(b) hereof;
WHEREAS, the Company and Executive desire to further modify the
Original Agreement (as amended on February 27, 1996) to more closely align the
severance benefits afforded to Executive hereunder to those afforded to other
executive officers of the Company on the date hereof;
WHEREAS, the Company considers the continued services of Executive to
be in the best interests of the Company and its shareholders and desires to
assure the continued services and undivided loyalty of Executive on behalf of
the Company on an objective and impartial basis, free from personal distraction,
in the event of an attempt to obtain control of the Company;
WHEREAS, in consideration of the covenants of the Company contained
herein, Executive is willing to remain in the employ of the Company upon the
terms and conditions specified below; and
WHEREAS, in order to induce Executive to remain in the employ of the
Company, this Agreement sets forth the compensation and benefits payable to
Executive, including the severance benefits that the Company agrees will be
provided to Executive if Executive's employment with the Company is terminated;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties herein contained, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. POSITION, DUTIES AND PLACE OF PERFORMANCE
1.1 Employment as Chairman of the Board. Subject to the terms and
conditions of this Agreement and applicable law, the Company hereby agrees to
continue to employ Executive, and Executive agrees to continue to serve, as the
Chairman of the Board of Directors of the Company during the term of this
Agreement. Executive shall report to and be subject to the supervision of the
Company's Board of Directors (the "Board"), and his powers, authority and duties
shall be governed by the Company's Bylaws.
1.2 Duties. (a) Executive shall devote his full business time (with
allowances for vacations and sick leave), attention and best efforts to the
affairs of the Company, its subsidiaries and Affiliates (as defined in Section
7.02) during the term of this Agreement.
(b) Notwithstanding paragraph (a) above, the Company acknow-
ledges that Executive may, subject to his obligations under Section 1.03
hereof, serve as a director of other corporations and entities and may engage in
other activities to the extent that they do not inhibit the performance of his
duties hereunder, or conflict with the business of the Company, its subsidiaries
or Affiliates.
1.3 Outside Directorships. Executive has reviewed with the Board his
directorships and any other positions held by him in business organizations that
are not affiliated with the Company, and has received the Board's approval for
his continuance in such capacities unless the Board should later determine in a
particular case that there has arisen a potential conflict with the Company's
best interests. Prior to serving any other unaffiliated business organization,
Executive shall obtain the Board's approval. Nonbusiness activities, such as
service on the boards or for the benefit of educational, religious or other
similar institutions, need not be reviewed or approved by the Board.
1.4 Place of Performance. In connection with Executive's employment
by the Company, Executive shall be based at the principal executive offices of
the Company in Monroe, Louisiana, except for required travel relating to the
Company's business to an extent substantially consistent with Executive's prior
business travel practices.
1.5 Other Offices; Indemnification. While employed by the Company,
Executive agrees to serve, without additional compensation, if elected or
appointed thereto, as a director or executive officer of any of the Company's
subsidiaries, provided that Executive is indemnified for serving in any and all
such capacities on a basis no less favorable than is currently provided by (i)
the Indemnification Agreement, dated May 16, 1988, by and between the Company
and Executive (the "Indemnification Agreement"), (ii) the Company's Bylaws or
(iii) otherwise.
2. TERM
Unless Executive's employment is terminated at an earlier date under
Section 4 or 5, this Agreement shall continue in full force and effect through
December 31, 2000 and from year to year thereafter subject to the right of
Executive or the Company to terminate this Agreement as of such date or any
subsequent December 31 by written notice given to the other party at least 60
days prior to such termination date. Termination of this Agreement by either
party in accordance with the preceding sentence shall not require a statement of
the reason therefor. All provisions herein governing the parties' rights and
obligations upon the termination of Executive's employment shall survive the
termination of this Agreement.
3. COMPENSATION AND RELATED MATTERS
In consideration of the services and duties to be performed by
Executive during the term of this Agreement, the Company agrees to pay and
provide for Executive the compensation and benefits described below:
3.1 Salary. The Company shall pay to Executive a salary at a rate of
not less than $707,616 per annum in equal biweekly installments. This salary may
be increased from time to time by the Board, and, if so increased, shall not
thereafter be decreased during the term of this Agreement. The salary payable to
Executive hereunder as of any particular date shall hereinafter be referred to
as the "Annual Base Salary."
3.2 Expenses. Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by Executive in performing
services hereunder, including all expenses of travel and living expenses while
away from home on business and in the service of the Company, provided that such
expenses are incurred and accounted for in accordance with the Company's
policies and procedures then in effect.
3.3 Other Benefits. (a) Executive shall be entitled to participate in
any employee benefit plans or arrangements the Company makes available now or in
the future to its employees, generally, or to any or all of its executive
officers, specifically, on the same basis and subject to the same requirements
and limitations that are or may be made applicable to other executive officers,
including, without limitation, the Company's Stock Bonus Plan, Employee Stock
Ownership Plan, Dollars & Sense Plan, Retirement Plan, Supplemental Retirement
Plan, Supplemental Executive Retirement Plan, 1983 Restricted Stock Plan,
Chairman and Chief Executive Officer Short-Term Incentive Plan, 2000 Incentive
Compensation Program, Supplemental Dollars & Sense Plan, Supplemental Defined
Contribution Plan, Supplemental Defined Benefit Plan, Salary Continuation
(Disability) Plan for Officers, Supplemental Life Insurance Plan, and Medical
Reimbursement Plan (and all successors to such plans), or any other pension and
retirement plan or arrangement, stock option plan, stock bonus plan, stock
ownership plan, incentive compensation plan, life insurance and
health-and-accident plan or arrangement, medical insurance plan, disability
plan, survivor income plan, relocation plan, vacation plan or other welfare plan
(collectively, the "Benefit Plans"). The Company shall not directly or
indirectly make any changes in any Benefit Plan that would adversely affect
Executive's rights or benefits thereunder, unless such changes do not result in
a proportionately greater reduction in the rights of or benefits to Executive
compared with any other executive officer of the Company.
(b) Any payments or benefits payable to Executive hereunder
in respect of any calendar year during which Executive is employed by the
Company for less than the entire year shall, unless otherwise provided in the
applicable Benefit Plan, be prorated in accordance with the number of days in
such calendar year during which he is so employed.
(c) For each year during the term hereof, the Company shall
make available to Executive without charge, for his personal convenience, use of
Company aircraft for no fewer than the number of hours per annum to which he has
typically used the Company aircraft in prior years or such greater number of
hours as may be approved by the Board.
3.4 Vacation. Executive shall be entitled to the number of vacation
days in each calendar year, and to compensation in respect of earned but unused
vacation days, determined in accordance with the Company's vacation plan.
Executive shall also be entitled to all paid holidays the Company confers upon
its executives.
3.5 Facilities; Secretarial Assistance. The Company shall furnish
Executive with office space, secretarial assistance and such other facilities
and services as shall be suitable to Executive's position and adequate for the
performance of his duties.
4. TERMINATION OF EMPLOYMENT
4.1 Death. Executive's employment shall terminate upon his death.
4.2 Disability. If a duly qualified physician chosen by the Company
and reasonably acceptable to Executive or his legal representatives certifies in
writing that Executive is incapable of discharging the essential functions of
his job as the Chairman of the Board of Directors for a period of 120
consecutive days because of physical or mental impairment, then Executive shall
be deemed disabled and the Company shall have the continuing right and option
during the period such disability continues to terminate Executive's employment
by providing Executive with a Notice of Termination as contemplated by Section
4.05. Any such termination shall become effective 30 days after such Notice of
Temptation is given, unless within such 30-day period the physician referred to
above certifies in writing that Executive is no longer impaired and is capable
of discharging the essential functions of his job.
4.3 With or Without Cause. (a) The Company may terminate Executive's
employment with or without Cause. For purposes of this Agreement, the Company
shall have "Cause" for (i) the willful and continued failure by Executive to
substantially perform his duties hereunder (other than any such failure
resulting from Executive's disability as specified in Section 4.02) after demand
for substantial performance is delivered by the Company that specifically
identifies the manner in which the Company believes Executive has not
substantially performed his duties, (ii) the conviction of a felony or (iii) the
adoption by the Company's shareholders at any time prior to a Change of Control
of the Company (as defined in Section 4.04(c)) of any resolution removing
Executive from the Board or failing to re-elect Executive to the Board during
the term of this Agreement (unless such action is preceded by any act of the
Board described in Section 4.04(b)(i)).
(b) For purposes of this Section 4.03, no act or failure to
act on Executive's part shall be considered "willful" unless done, or omitted to
be done, in bad faith and without reasonable belief that his action or omission
was in the best interests of the Company. Any act, or failure to act, by
Executive that is based upon authority given pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be done, or omitted to be done, by Executive in good
faith and in the best interests of the Company. Notwithstanding the foregoing,
Executive may not be terminated for Cause without delivery to Executive of a
Notice of Termination as contemplated by Section 4.05 setting forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under clause (i), (ii) or (iii) of Section
4.03(a), provided, however, that if clause (i) above forms the basis for such
termination, (A) the Company must have delivered to Executive a demand for
substantial performance in accordance with clause (i) of Section 4.03(a), (B)
the Notice of Termination must be preceded by written notice to Executive (1)
specifically identifying the manner in which the Company believes Executive has
not substantially performed his duties after the Company's demand for
substantial performance and (2) providing an opportunity for Executive, together
with his counsel, to be heard before the Board, and (C) the Company must have
delivered to Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three- quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose, finding that, in the good
faith opinion of the Board, Executive is guilty of the conduct described in
clause (i) of Section 4.03(a).
(c) No action or inaction shall be deemed the basis for Cause
unless Executive is terminated therefor within 120 days after such action or
omission is known to the Chief Executive Officer of the Company.
(d) In the event that the existence of Cause shall become an
issue in any action or proceeding between the Company and Executive, the Company
shall, notwithstanding the finding of the Board referenced above, have the
burden of establishing that the actions or inactions deemed the basis for Cause
did in fact occur and do constitute Cause and that the Company has satisfied the
procedural requirements of this Section 4.03. The satisfaction of the Company's
burden shall require clear and convincing evidence. Any purported termination of
employment of Executive by the Company which does not meet each and every
substantive and procedural requirement of this Section 4.03 shall be treated for
all purposes under this Agreement as a termination of employment without Cause.
4.4 Termination by Executive. (a) Executive may terminate his
employment at any time for any reason, including (i) for Good Reason (as
defined below) or (ii) in the event of a Change of Control of the Company
(as defined below).
(b) For purposes of this Agreement, "Good Reason" shall mean:
(i) the adoption by the Board of any resolution
during the term of this Agreement (A) removing Executive from
the position of Chairman of the Board of Directors of failing
to re-elect Executive to such position or (B) removing
Executive as a member of the Board, convening a shareholder
meeting for such purpose or failing to make Executiv as a
nominee or proposed nominee for re-election to the Board
upon expiration of his designated term, except in both
cases in connection with a termination by the Company of
Executive's employment in accordance with the terms and
conditions of Section 4.01, 4.02 or 4.03;
(ii) a diminution in Executive's duties, responsibilities
or position in the management of the Company and its
subsidiaries, including, without limitation,(A) the assignment
to Executive of duties or responsibilities that are
inconsistent with Executive's position as Chairman of the
Board of Directors of the Company, (B) the demotion of
Executive, or (C) the failure of the Company to perform its
obligations under Section 3.05, which failure continues for a
period of 10 days after Executive gives the Company notice
thereof;
(iii) the failure by the Company to pay to Executive
any installment of his Annual Base Salary or to pay any other
amounts owed under this Agreement, which failure continues for
a period of 10 days after Executive gives the Company notice
thereof;
(iv) the failure by the Company to provide the benefits
specified in Section 3.03, unless comparable benefits or
compensation are provided in lieu thereof;
(v) any directive requiring Executive to be based
anywhere other than Monroe, Louisiana, except for required
travel in the ordinary course of the Company's business and
consistent with past practices;
(vi) the failure by the Company to obtain the assumption
of its obligations under this Agreement by any successor or
assign as contemplated by Section 6.01; or
(vii) a failure by the Company to comply with Section
1.02(b), Section 1.03, or any other material provision of this
Agreement, which failure continues for a period of 10 days
after Executive gives the Company notice thereof.
(c) For purposes of this Agreement, a "Change of Control" of
the Company shall mean:
(i) the acquisition by any Person (as defined in
Section 7.02) of Beneficial Ownership (as defined in Section
7.02) of 30% or more of the outstanding shares of the
Company's Common Stock, $1.00 par value per share (the "Common
Stock"), or 30% or more of the combined voting power of the
Company's then outstanding securities entitled to vote
generally in the election of directors; provided, however,
that for purposes of this clause (i), the following
acquisitions shall not constitute a Change of Control:
(A) any acquisition (other than a Business
Combination which constitutes a Change of Control
under Section 4.04(c)(iii) hereof) of Common Stock
directly from the Company,
(B) any acquisition of Common Stock by the Company
or its subsidiaries,
(C) any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company, or
(D) any acquisition of Common Stock by any
corporation pursuant to a Business Combination that
does not constitute a Change of Control under Section
4.04(c)(iii) hereof; or
(ii) individuals who, as of February 22, 2000,constitute
the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to such date whose election, or nomination for
election by the Company's shareholders, was approved by a vote
of at least two-thirds of the directors then comprising the
Incumbent Board shall be considered a member of the Incumbent
Board, unless such individual's initial assumption of office
occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or
on behalf of a Person other than the Incumbent Board; or
(iii) consummation of a reorganization, share
exchange, merger or consolidation (including any such
transaction involving any direct or indirect subsidiary of the
Company), or sale or other disposition of all or substantially
all of the assets of the Company (a "Business Combination");
provided, however, that in no such case shall any such
transaction constitute a Change of Control if immediately
following such Business Combination,
(A) the individuals and entities who were
the Beneficial Owners of the Company's outstanding
common stock and the Company's voting securities
entitled to vote generally in the election of
directors immediately prior to such Business
Combination have direct or indirect Beneficial
Ownership, respectively, of more than 50% of the then
outstanding shares of common stock, and more than 50%
of the combined voting power of the then outstanding
voting securities entitled to vote generally in the
election of directors, of the Post-Transaction
Corporation (as defined in Section 7.02), and
(B) except to the extent that such ownership
existed prior to the Business Combination, no Person
(excluding the Post-Transaction Corporation and any
employee benefit plan or related trust of either the
Company, the Post-Transaction Corporation or any
subsidiary of either corporation) Beneficially Owns,
directly or indirectly, 20% or more of the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or
more of the combined voting power of the then
outstanding voting securities of such corporation,
and
(C) at least a majority of the members of
the board of directors of the Post-Transaction
Corporation were members of the Incumbent Board at
the time of the execution of the initial agreement,
or of the action of the Board, providing for such
Business Combination; or
(iv) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
4.5 Notice of Termination. Any termination of Executive's employment
by the Company or by Executive (other than termination pursuant to Section 4.01)
shall be communicated by written Notice of Termination delivered to the other
party hereto as provided in Section 7.03. For purposes of this Agreement, a
"Notice of Termination" shall mean a notice that shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated. Except
as expressly set forth in Section 4.03, the failure by Executive or the Company
to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Cause, Disability or Good Reason shall not waive any
right of Executive or the Company, respectively, hereunder or preclude Executive
or the Company, respectively, from asserting such fact or circumstance in
enforcing Executive's or the Company's rights hereunder.
4.6 Date of Termination. For purposes of this Agreement, "Date of
Termination" shall mean (i) if Executive's employment is terminated by his
death, the date of his death; (ii) if Executive's employment is terminated
pursuant to Section 4.02, 30 days after Notice of Termination is given (unless,
as provided in Section 4.02, Executive is certified to have successfully resumed
performing his duties on a full-time basis during such 30-day period) and (iii)
if Executive's employment is terminated pursuant to Sections 4.03 or 4.04, the
date specified in the Notice of Termination (which shall not be more than 30
days after the date such notice is given); provided that if, within 30 days
after any Notice of Termination is given, a dispute exists concerning the
termination, the Date of Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement of the parties or by a
final and nonappealable judgment, order or decree of a court of competent
jurisdiction.
5. COMPENSATION UPON TERMINATION OR DURING DISABILITY
5.1 Death. If Executive's employment is terminated by his death, in
addition to all other death benefits provided by the Company, the Company shall
pay to Executive's spouse or, if he leaves no spouse, to his estate, in a lump
sum in cash within 30 days of the Date of Termination the sum of the pro rata
amount of Executive's Annual Base Salary earned through the Date of Termination
to the extent due but not paid and any compensation previously deferred by
Executive (together with any accrued interest thereon) and any accrued vacation
pay, in each case to the extent not previously paid (collectively, "Accrued
Obligations"). The Company shall also timely pay or provide to such person any
other amounts or compensation required to be furnished to Executive under any
Benefit Plan ("Other Benefits").
5.2 Disability. During any period that Executive is deemed to be
disabled under Section 4.02 ("disability period"), Executive shall continue to
receive his full Annual Base Salary at the rate then in effect for such period
until his employment is terminated pursuant to Section 4.02, provided that
payments so made to Executive shall be reduced by the sum of the amounts, if
any, payable to Executive under disability benefit plans of the Company. Upon
termination of Executive's employment under Section 4.02, the Company shall pay
to Executive in a lump sum in cash within 30 days of the Date of Termination all
Accrued Obligations and shall timely furnish to Executive all Other Benefits.
5.3 Terminations for Cause or Resignations Without Good Reason. If
Executive's employment shall be terminated for Cause by the Company, or
voluntarily terminated by Executive other than for Good Reason, this Agreement
shall terminate without further obligation to Executive other than for Accrued
Obligations, which shall be paid in a lump sum in cash within 30 days of the
Date of Termination, and for Other Benefits, which the Company shall timely
furnish to Executive.
5.4 Terminations other than Death, Disability or Cause; Good Reason;
Change of Control. If during the term of this Agreement (i) the Company or any
of its Affiliates shall terminate Executive's employment, other than for death,
disability or Cause, or (ii) Executive shall terminate his employment for Good
Reason or following a Change in Control of the Company, then, subject to Section
5.05(b),
(a) the Company shall pay to Executive in a lump sum in cash
within five business days of the Date of Termination an amount equal to three
times the sum of (i) the Executive's Annual Base Salary, plus (ii) the greater
of (x) the average of the annual bonuses paid or to be paid to Executive with
respect to the immediately preceding three fiscal years or (y) the target bonus
(cash and stock) for which Executive is eligible for the fiscal year in which
the Date of Termination occurs, assuming achievement at the target level of the
objective performance goals established with respect to such bonus and
achievement of 100% of any subjective performance goals or criteria otherwise
applicable with respect to such bonus; provided, however, that, if Executive has
in effect a deferral election with respect to any percentage of the annual bonus
which would otherwise become payable with respect to the fiscal year in which
termination occurs, such lump sum payment shall be reduced by an amount equal to
such percentage times the bonus component of the lump sum payment (which
reduction amount shall be deferred in accordance with such election);
(b) the Company shall pay to Executive in a lump sum in cash
within five business days of the Date of Termination an amount calculated by
multiplying the annual bonus that Executive would have earned with respect to
the entire fiscal year in which termination occurs, assuming achievement at the
target level of the objective performance goals established with respect to such
bonus and achievement of 100% of any subjective performance goals or criteria
otherwise applicable with respect to such bonus, by the fraction obtained by
dividing the number of days in such year through the Date of Termination by 365;
provided, however, that, if Executive has in effect a deferral election with
respect to any percentage of the annual bonus which would otherwise become
payable with respect to the fiscal year in which termination occurs, such lump
sum payment shall be reduced by an amount equal to such percentage times the
lump sum payment (which reduction amount shall be deferred in accordance with
such election);
(c) if, at the Date of Termination, the Company shall not yet
have paid to Executive (or deferred in accordance with any effective deferral
election by Executive) an annual bonus with respect to a fully completed fiscal
year, the Company shall pay to Executive in a lump sum in cash within five
business days of the Date of Termination an amount determined as follows: (i) if
the Board (acting directly or indirectly through any committee or subcommittee)
shall have already determined the amount of such annual bonus, such amount shall
be paid, and (ii) if the Board shall not have already determined the amount of
such annual bonus, the amount shall be equal to the annual bonus that Executive
would have earned with respect to such completed fiscal year, based solely upon
the actual level of achievement of the objective performance goals established
with respect to such bonus and assuming the achievement of 100% of any
subjective performance goals or criteria otherwise applicable with respect to
such bonus; provided, however, that, if Executive has in effect a deferral
election with respect to any percentage of the annual bonus which would
otherwise become payable with respect to such completed fiscal year, such lump
sum payment shall be reduced by an amount equal to such percentage times the
lump sum payment (which reduction amount shall be deferred in accordance with
such election); provided, further, that any payment under this paragraph (c) (or
any payment under any other provision of this Agreement calculated by reference
to prior or target bonus amounts) shall be payable notwithstanding any provision
to the contrary set forth in any bonus plan or program of the Company;
(d) for a period of three years following the Date of
Termination, or such longer period as may be provided by the terms of the
appropriate Benefit Plan (the "Continuation Period"), the Company shall at its
expense maintain and administer for the continued benefit of Executive all
Benefit Plans in which Executive was entitled to participate as an employee of
the Company at any time during the one-year period prior to the Date of
Termination, provided that Executive's continued participation is possible under
the general terms and provisions of such plans and all applicable laws. The
coverage and benefits (including deductibles and costs) provided under any such
Benefit Plan in accordance with this Section 5.04(d) during the Continuation
Period shall be no less favorable to Executive and his dependents and
beneficiaries than the most favorable of such coverages and benefits during the
one-year period prior to the Date of Termination; provided, however, in the
event of the disability of Executive during the Continuation Period, disability
benefits shall, to the maximum extent possible, not be paid for the Continuation
Period but shall instead commence immediately following the end of the
Continuation Period. If Executive's participation in any such Benefit Plan is
barred or any such Benefit Plan is terminated, the Company shall arrange to
provide Executive with compensation or benefits substantially similar or
comparable in value to those Executive would otherwise have been entitled to
receive under such plans. At the end of the Continuation Period, Executive shall
have the option to have assigned to him, at no cost and with no apportionment of
prepaid premiums, any assignable insurance owned by the Company that relates
specifically to Executive. To the maximum extent permitted by law, Executive
will be eligible for coverage under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") at the end of the Continuation Period or earlier
cessation of the Company's obligation under the foregoing provisions of this
Section 5.04(d) (or, if Executive shall not be so eligible for any reason, the
Company will provide equivalent coverage);
(e) for a period of one year following the Date of
Termination, the Company shall make available to Executive without charge, for
his personal convenience, use of Company aircraft or aircraft of a comparable
make and model as used by the Company on the Date of Termination for that number
of annual flight hours permitted to Executive immediately prior to such date;
(f) upon Executive's written request, the Company at its cost
shall provide to Executive outplacement assistance by a reputable firm
specializing in such services for the period beginning with the termination of
employment and ending upon the lapse of the term of this Agreement;
(g) the Company shall pay or provide to Executive all Accrued
Obligations and Other Benefits; and
(h) the Company shall discharge its obligations under all
other applicable sections of this Agreement, including Sections 5.05(a), (b),
(c) and (d) and 7.16.
The payments and benefits provided in this Section 5.04, Section 5.05 and under
all of the Company's employee benefit and compensation plans shall be without
regard to any plan amendment made after any Change of Control that adversely
affects in any manner the computation of payments and benefits due Executive
under such plan or the time or manner of payment of such payments and benefits.
After a Change of Control no discretionary power of the Board or any committee
thereof shall be used in a way (and no ambiguity in any such plan shall be
construed in a way) which adversely affects in any manner any right or benefit
of Executive under any such plan. If Executive becomes entitled to receive
benefits under this Section 5.04, the Company shall not be required to make any
cash severance payment to Executive under any other severance or salary
continuation policy, plan, agreement or arrangement in favor of other officers
or employees of the Company or its Affiliates unless such other policy, plan,
agreement or arrangement expressly provides to the contrary in a provision that
specifically states that it is intended to override the limitation of this
sentence.
5.5 Other Change of Control Benefits.
(a) Stock Options and Other Incentives. The foregoing benefits
provided for in Section 5.04 or this Section 5.05 are intended to be in addition
to the value or benefit of any stock options, restricted stock, performance
shares or similar awards, the exercisability, vesting or payment of which is
accelerated or otherwise enhanced upon a Change of Control pursuant to the terms
of any stock option, incentive or other similar plan or agreement heretofore or
hereafter adopted by the Company or the Post-Transaction Corporation; provided,
however, that, upon any termination of Executive other than for Cause within
three years following a Change of Control, all of Executive's then-outstanding
vested stock options, whether granted before or during the term of this
Agreement, shall remain exercisable until the later of the 190th day after the
Date of Termination or the end of the exercise period provided for in the
applicable option agreement or plan as then in effect, but in no event shall
such exercise period continue after the date on which such options would have
expired if Executive had remained an employee of the Company, the
Post-Transaction Corporation or one of their respective Affiliates.
(b) Excise Tax Payments. (i) Notwithstanding any other
provisions of this Agreement, if a Change of Control occurs during the original
or extended term of this Agreement, in the event that any payment or benefit
received or to be received by Executive in connection with the Change of Control
or the termination of Executive's employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the Company, any
Person whose actions result in the Change of Control or any Person affiliated
with the Company or such Person) (all such payments and benefits, including
without limitation the payments and benefits under Sections 5.04, 5.05(a), (c)
and (d) and 7.16 hereof, being hereinafter called "Payments") would be subject
(in whole or in part) to an excise tax imposed by section 4999 of the Internal
Revenue Code of 1986, as amended from time to time (the "Code"), or any interest
or penalties are incurred by Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), the Company shall pay to
Executive at the time specified in clause (iv) below an additional amount (the
"Gross-up Payment") such that the net amount retained by Executive, after
deduction of any Excise Tax on the Payments and all taxes (including any
interest or penalties imposed with respect to such taxes), including without
limitation any federal, state and local income or payroll tax and any Excise
Tax, imposed upon the Gross-up Payment provided for by this clause (i), but
before deduction of any federal, state and local income or payroll tax on the
Payments, shall be equal to the Payments.
(ii) For purposes of determining whether any of the
Payments and the Gross-up Payment (collectively, the "Total Payments") will be
subject to the Excise Tax and the amount of such Excise Tax, (A) the Total
Payments shall be treated as "parachute payments" within the meaning of section
280G(b)(2) of the Code, and all "excess parachute payments" within the meaning
of section 280G(b)(1) shall be treated as subject to the Excise Tax, except to
the extent that in the opinion of tax counsel selected by the Company's
independent auditors ("Auditors") and reasonably acceptable to Executive ("Tax
Counsel") such Total Payments (in whole or in part) do not constitute "parachute
payments", or such "excess parachute payments" (in whole or in part) are not
subject to the Excise Tax and (B) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Auditors in accordance
with the principles of sections 280G(d)(3) and (4) of the Code. The Auditors
shall perform the calculations in conformance with the foregoing provisions and
within 15 business days of the date that any Payments are made under this
Agreement shall provide Executive with a detailed written statement setting
forth the manner in which the Total Payments are calculated and the basis for
such calculations, including without limitation any opinions or other advice the
Company has received from Tax Counsel, the Auditors or other advisors or
consultants (and any such opinions or advice which are in writing shall be
attached to the statement).
(iii) For purposes of determining the amount of the
Gross-up Payment, Executive shall be deemed to pay federal income taxes at the
highest marginal rates of federal income taxation applicable to individuals in
the calendar year in which the Gross-up Payment is to be made and state and
local income taxes at the highest marginal rates of taxation in the state and
locality of Executive's residence in the calendar year in which the Gross-up
Payment is to be made, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes, taking
into account any limitations applicable to individuals subject to federal income
tax at the highest marginal rates.
(iv) The initial Gross-up Payment, if any, as determined
pursuant to this Section 5.05(b), shall be paid to Executive within five days of
the receipt of the Auditors' determination. If the Auditors determine that no
Excise Tax is payable by Executive, the Company shall cause the Auditors to
furnish Executive with an opinion that failure to report any Excise Tax on
Executive's applicable federal income tax return would not result in the
imposition of a negligence or similar penalty.
(v) If it is established pursuant to a final
determination of a court or Internal Revenue Service proceeding or the written
opinion of Tax Counsel that the Excise Tax is less than the amount taken into
account hereunder at the time the Gross-up Payment is made, Executive shall
repay to the Company within 30 days of Executive's receipt of notice of such
final determination or opinion the portion of the Gross-up Payment attributable
to such reduction (plus the portion of the Gross-up Payment attributable to the
Excise Tax, federal, state and local income tax and Excise Tax imposed on the
portion of the Gross-up Payment being repaid by Executive if such repayment
results in a reduction of Excise Tax or federal, state and local income tax),
plus interest on the amount of such repayment at the rate provided in section
1274(b)(2)(B) of the Code. Notwithstanding the foregoing, in the event any
portion of the Gross-up Payment to be refunded to the Company has been paid to
any federal, state and local tax authority, the payment thereof (and related
amounts) shall not be required until actual refund or credit of such portion has
been made to Executive, and interest payable to the Company shall not exceed the
interest received or credited to Executive by such tax authority for the period
that it held such portion. Executive and the Company shall endeavor to mutually
agree upon the course of action to be pursued (and the method of allocating the
expense thereof) if Executive's claim for refund or credit is denied. If it is
established pursuant to a final determination of a court or an Internal Revenue
Service proceeding or the written opinion of Tax Counsel that the Excise Tax
exceeds the amount taken into account hereunder at the time the Gross-up Payment
is made (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Gross-up Payment), the Company
shall make an additional Gross-up Payment in respect of such excess (plus any
interest or penalties payable with respect to such excess), as determined by the
Auditors, within 30 days of the Company's receipt of notice of such final
determination or opinion.
(vi) In the event of any controversy with the Internal
Revenue Service (or other taxing authority) with regard to the Excise Tax,
Executive shall permit the Company to control issues relating to the Excise Tax
(at its expense), provided that such issues do not potentially materially
adversely affect Executive, but Executive shall control any other issues. In the
event that the issues are interrelated, Executive and the Company shall in good
faith cooperate so as not to jeopardize resolution of either issue, but if the
parties cannot agree, Executive shall make the final determination with regard
to the issues. In the event of any conference with any taxing authority as to
the Excise Tax or associated income taxes, Executive shall permit a
representative of the Company to accompany Executive, and Executive and
Executive's representative shall cooperate with the Company and its
representative. The Company and Executive shall promptly deliver to each other
copies of any written communications, and summaries of any verbal
communications, with any taxing authority regarding the Excise Tax covered by
this Section 5.05(b).
(vii) The Company shall be responsible for all
charges of the Tax Counsel and the Auditors.
(viii) Notwithstanding any other provision in this
Agreement to the contrary, if it is determined by the Auditors that the gross-up
provisions in this Section 5.05(b) as they relate to the accelerated vesting of
nonqualified stock options or restricted stock issued by the Company would be
the sole reason precluding the use by the Company of the pooling of interests
method of accounting, then the tax gross-up provisions of this Section 5.05(b)
shall not apply to such nonqualified stock options or restricted stock as the
case may be, unless the Gross-up Payment can be altered, modified or delayed to
allow it to be paid without precluding the use of the pooling of interest method
of accounting. The Company will use its best efforts to alter, modify, or delay
the payment so that the Gross-up Payment can be made.
(c) Indemnification. If, in connection with any agreement
related to a transaction that will result in a Change of Control of the Company,
an undertaking is made to provide the Board with rights to indemnification from
the Company (or from any other party to such agreement), Executive shall, by
virtue of this Agreement, be entitled to the same rights to indemnification as
are provided to the Board pursuant to such agreement. Otherwise, Executive shall
be entitled to indemnification rights on terms no less favorable to Executive
than those available under any Company indemnification agreements or the
articles of incorporation, bylaws or resolutions of the Company at any time
after the Change of Control to his peer employees of the Company. Such
indemnification rights shall be with respect to all claims, actions, suits or
proceedings to which Executive is or is threatened to be made a party that arise
out of or are connected to his services at any time prior to the termination of
his employment, without regard to whether such claims, actions, suits or
proceedings are made, asserted or arise during or after the term of this
Agreement.
(d) Directors and Officers Insurance. If, in connection with
any agreement related to a transaction that will result in a Change of Control
of the Company, an undertaking is made to provide the Board with continued
coverage following the Change of Control under one or more directors and
officers liability insurance policies, then Executive shall, by virtue of this
Agreement, be entitled to the same rights to continued coverage under such
directors and officers liability insurance policies as are provided to the
Board, and the Company shall take any steps necessary to give effect to this
provision.
5.6 Benefit Plans and Other Agreements. Except to the extent
otherwise provided in the Other Agreements (defined below) and except to the
extent expressly provided to the contrary in Section 5.05(a), the termination of
this Agreement (either under Section 4 or 5 or upon expiration of the term of
this Agreement under Section 2) shall not terminate, modify or otherwise affect
any of Executive's rights arising under or in connection with any Benefit Plans,
the Indemnification Agreement, or any other agreements or instruments issued or
delivered in accordance with any Benefit Plans prior to or after the date
hereof. The plans, agreements and other instruments referred to in this Section
5.06 are referred to collectively as the "Other Agreements."
5.7 Set Off; No Mitigation. The obligations of the Company and its
Affiliates to make the payments provided for in this Agreement and otherwise to
perform its obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company or its Affiliates may have against Executive or others. It is the intent
of this Agreement that in no event shall Executive be obligated to seek other
employment or take any other action to mitigate the amounts or benefits payable
to Executive under any of the provisions of this Agreement.
5.08 Certain Pre-Change-of-Control Terminations. Notwithstanding any
other provision of this Agreement, Executive's employment shall be deemed to
have been terminated by Executive following a Change of Control pursuant to
Section 5.04 (and Executive shall be entitled to receive all payments and
benefits associated therewith) if the Agreement is terminated by the Company in
accordance with Section 2 (whether or not a Change of Control actually occurs)
and such termination (i) was at the request or direction of a third party who
has taken steps designed to effect a Change of Control or otherwise arose in
connection with or in anticipation of a Change of Control or (ii) occurred after
discussions with a third party regarding a possible Change of Control
transaction commenced and such discussions produced (whether before or after
such termination) either a preliminary or definitive agreement with respect to
such a transaction or a public announcement of the pending transaction (whether
or not a Change of Control actually occurs). If Executive takes the position
that the foregoing sentence applies and the Company disagrees, the Company shall
have the burden of proof in any such dispute.
6. SUCCESSORS; ASSIGNMENT
6.1 Successors. (a) This Agreement and all rights of Executive
hereunder shall inure to the benefit of and be enforceable by Executive's
personal or legal representative, executors, administrators, successors, heirs
and legatees. If Executive should die while any amounts would still be payable
to him hereunder had he continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Executive's heirs and legatees or Executive's estate, as appropriate.
(b) This Agreement shall be binding upon and inure to the
benefit of the Company and any of its successors or assigns. In addition, the
Company shall require any successor or assign (whether direct or indirect, by
purchase of all or substantially all of the Company's assets or capital stock,
share exchange, merger, consolidation or otherwise) to (i) assume
unconditionally and expressly this Agreement and (ii) agree to perform or cause
to be performed all of the obligations under this Agreement in the same manner
and to the same extent as would have been required of the Company had no
assignment or succession occurred, such assumption to be set forth in writing
reasonably satisfactory to Executive. In the event of any such assignment or
succession, the term "Company" as used in this Agreement shall refer also to
such successor or assign.
(c) The Company shall also require all entities that control
or that after the transaction will control (directly or indirectly) the Company
or any such successor or assign to agree to cause to be performed all of the
obligations under this Agreement, such agreement to be set forth in a writing
reasonably satisfactory to Executive.
(d) The obligations of the Company and Executive which by
their nature may require either partial or total performance after the
expiration of the term of the Agreement shall survive such expiration.
6.02 Assignment by Executive. Without the consent of the Company,
neither this Agreement nor any of its benefits may be assigned by Executive
other than such rights or benefits as are transferred by will or the laws of
descent and distribution.
7. MISCELLANEOUS
7.1 Status of Other Employment Agreements. Notwithstanding any
provisions thereof, this Agreement supersedes any and all prior agreements
between the Company and Executive that provide for the employment of Executive
or severance benefits in the event of a Change of Control of the Company, as
defined therein.
7.2 Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings:
(a) "Affiliate" (and variants thereof) shall mean a Person
that controls, or is controlled by, or is under common control with, another
specified Person, either directly or indirectly.
(b) "Beneficial Owner" (and variants thereof), with respect to
a security, shall mean a Person who, directly or indirectly (through any
contract, understanding, relationship or otherwise), has or shares (i) the power
to vote, or direct the voting of, the security, or (ii) the power to dispose of,
or direct the disposition of, the security.
(c) "Person" shall mean a natural person or entity, and shall
also mean the group or syndicate created when two or more Persons act as a
syndicate or other group (including, without limitation, a partnership or
limited partnership) for the purpose of acquiring, holding, or disposing of a
security, except that "Person" shall not include an underwriter temporarily
holding a security pursuant to an offering of the security.
(d) Unless a Change of Control results from a Business
Combination (as defined in Section 4.04(c)(iii) hereof), "Post-Transaction
Corporation" shall mean the Company after the Change of Control. If a Change of
Control results from a Business Combination, "Post-Transaction Corporation"
shall mean the corporation or other entity resulting from the Business
Combination unless, as a result of such Business Combination, an ultimate parent
corporation controls such resulting entity, the Company or all or substantially
all of the Company's assets either directly or indirectly, in which case "Post-
Transaction Corporation" shall mean such ultimate parent corporation.
7.3 Notice. Any notice permitted or required to be deemed under this
Agreement by one party shall be in writing and shall be delivered by hand,
overnight delivery service or U.S. registered or certified mail, postage prepaid
with return receipt requested, to the other party at the address set forth
opposite such party's name on the signature page hereof until notice of a change
in address is delivered as provided in this Section 7.03. Notices shall be
deemed to be given, in the case of (i) by hand delivery, upon receipt; (ii)
overnight delivery service, on the business day after timely delivery to a
recognized overnight delivery service; and (iii) U.S. mail, upon the third
business day after deposit with the U.S. mail.
7.4 Waiver. Except as expressly provided herein to the contrary, the
failure by any party to enforce any of its rights hereunder shall not be deemed
to be a waiver of such rights, unless such waiver is an express written waiver.
Waiver of any one breach shall not be deemed to be a waiver of any other breach
of the same or any other provision hereof.
7.5 Withholding. Executive agrees that the Company has the right to
withhold, from the amounts payable pursuant to this Agreement, all amounts
required to be withheld under applicable income or employment tax laws, or as
otherwise stated in documents granting rights that are affected by this
Agreement.
7.6 Entire Agreement. Except for the rights and obligations of the
parties under the Other Agreements, this Agreement sets forth the entire
understanding and agreement between the parties hereto with respect to
Executive's employment by the Company.
7.7 Choice of Law. This Agreement shall be governed by and
interpreted in accordance with the internal laws of the State of Louisiana
without regard to principles of conflict of laws.
7.8 Amendment. The parties may amend this Agreement only by a
written instrument signed by both parties.
7.9 Severability. If any term or provision of this Agreement, or the
application thereof to any Person or circumstance, shall at any time or to any
extent be invalid, illegal or unenforceable in any respect as written, Executive
and the Company intend for any court construing this Agreement to modify or
limit such provision so as to render it valid and enforceable to the fullest
extent allowed by law. Any such provision that is not susceptible of such
reformation shall be ignored so as to not affect any other term or provision
hereof, and the remainder of this Agreement, or the application of such term or
provision to Persons or circumstances other than those as to which it is held
invalid, illegal or unenforceable, shall not be affected thereby and shall be
valid and enforced to the fullest extent permitted by law.
7.10 Remedies Not Exclusive. No remedy specified herein shall be
deemed to be such party's exclusive remedy, and accordingly, in addition to
all of the rights and remedies provided for in this Agreement, the parties
shall have all other rights and remedies provided to them by applicable law,
rule or regulation, including without limitation the right to claim interest
with respect to any payment not timely made hereunder.
7.11 Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit Executive's continuing or future participation in any plan,
program, policy or practice provided by the Company or any of its Affiliates and
for which Executive may qualify, nor shall anything herein limit or otherwise
restrict such rights as Executive may have under any contract or agreement with
the Company or any of its Affiliates. Executive shall not be obligated to
furnish a release of any rights or claims against the Company or its Affiliates
as a condition of receiving benefits hereunder.
7.12 Confidentiality. Upon receipt of the payments or benefits
contemplated by Sections 5.04 or 5.05 hereof, Executive agrees to refrain for a
period of three years from divulging any non- public, confidential or
proprietary information concerning the Company or its Affiliates to any Person
other than the Company, its Affiliates or their respective officers, directors
or advisors, provided that this obligation shall lapse prior to the end of such
three-year period with respect to any information that (i) is or becomes
generally available to the public other than as a result of a breach of this
Section 7.12, (ii) is or becomes available to Executive on a non-confidential
basis from a source other than the Company or its representatives, provided that
such source is not known by Executive to have violated any confidentiality
agreement with the Company in connection with such disclosure, or (iii) is
acquired or developed independently by Executive without violating this Section
7.12.
7.13 Demand for Benefits. Unless otherwise provided herein, the
payment or payments due hereunder shall be paid to Executive without the need
for demand, and to a beneficiary upon the receipt of the beneficiary's address
and social security number. Nevertheless, Executive or a Person claiming to be a
beneficiary who claims entitlement to a benefit can file a claim for benefits
hereunder with the Company. Unless otherwise provided herein, the Company shall
accept or reject the claim within five business days of its receipt. If the
claim is denied, the Company shall give the reason for denial in a written
notice that refers to the provision of this Agreement that forms the basis of
the denial. If any additional information or material is necessary to perfect
the claim, the Company will identify these items in writing and explain why such
additional information is necessary.
7.14 Authority. The Company represents and warrants that (i) the
amendment and restatement of this Agreement was duly authorized by the
Shareholder Relations Committee of the Board and the Compensation Committee of
the Board on February 21, 2000 and by the Board on February 22, 2000, and (ii)
no other corporate proceedings are necessary to authorize the Company's
execution, delivery and performance of this Agreement.
7.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
7.16 Expenses. The Company agrees to pay as incurred, to the full
extent permitted by law, all legal fees and other expenses (including expert
witness and accounting fees) which Executive may reasonably incur as a result of
any contest (regardless of the outcome thereof) by the Company, Executive or
others of the validity or enforceability of, or liability under, any provision
of this Agreement (including as a result of any contest by Executive about the
amount or timing of any payment pursuant to this Agreement) or which Executive
may reasonably incur in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code to any
payment or benefit provided under this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date and year first above written.
CenturyTel, Inc. CENTURYTEL, INC.
000 Xxxxxxx Xxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000 By: /s/ Xxxx X. Post III
---------------------------------
Attention: Xxxx X. Post, III Xxxx X. Post III,
Vice Chairman of the Board,
President and Chief Executive Officer
Xxxxxx X. Xxxxxxxx
X.X. Xxx 000
Xxx Xxxxx, Xxxxxxxxx 00000 /s/ Xxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxx X. Xxxxxxxx
