Exhibit 10.2(b)
FORM OF AMENDED AND RESTATED SEVERANCE AGREEMENT
(for Executive Officers)
SEVERANCE AGREEMENT, dated as of _______________, as amended and restated
as of May 23, 1995, and as further amended and restated as of November 16, 1995,
by and between Century Telephone Enterprises, Inc., a Louisiana corporation (the
"Company"), and _________________ ("Executive").
W I T N E S S E T H:
WHEREAS, as of ______________ the Company and Executive entered into an
agreement providing for severance benefits on terms and conditions substantially
similar to those set forth herein (the "Original Agreement");
WHEREAS, the Company and Executive amended and restated the Original
Agreement as of May 23, 1995 to effect various modifications approved by the
Compensation Committee of the Company's Board of Directors (the "Compensation
Committee") on May 22, 1995 and ratified by the full Board on May 23, 1995; and
WHEREAS, the Company and Executive wish to further modify the Original
Agreement (as amended and restated as of May 23, 1995) to completely amend and
restate Section 3.2 thereof, as approved by the Compensation Committee on
November 16, 1995 and ratified by the full Board as of the same date;
NOW, THEREFORE, in consideration of the premises and the respective
covenants and agreements of the parties contained herein, and intending to be
legally bound hereby, the parties agree that the Original Agreement (as amended
and restated as of May 23, 1995) is hereby amended and restated in its entirety
to read as follows:
SECTION 1
DEFINITIONS
As used herein, the following terms shall have the meanings specified.
1.1 The "Act" - the Securities Exchange Act of 1934, as amended.
1.2 "Announcement Date"- the earlier of (i) the day of the public
announcement of a Change in Control (as hereinafter defined) or a proposal that
results in a Change in Control or (ii) the date that the Board enters into
negotiations with any person or entity, which negotiations result in a Change in
Control.
1.3 "Auditors" - the Company's regular independent auditors as of the
Announcement Date.
1.4 "Board" - the Board of Directors of the Company.
1.5 "Cause" - conviction of a felony, habitual intoxication, abuse of or
addiction to a controlled dangerous substance, excessive absenteeism, the
willful and continued failure by Executive to substantially perform his duties
hereunder (other than any such failure resulting from Executive's incapacity due
to physical or mental illness) 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, or the
willful engaging by Executive in misconduct which is materially injurious to the
Company, monetarily or otherwise. For purposes of this paragraph, no act or
failure to act on Executive's part shall be considered "willful" unless done, or
omitted to be done, by him not in good faith and without reasonable belief that
his action or omission was in the best interest of the Company. Notwithstanding
the foregoing, Executive shall not be deemed to have been terminated for Cause
without (i) reasonable notice to Executive setting forth the reasons for the
Company's intention to terminate for Cause, (ii) an opportunity for Executive,
together with his counsel, to be heard before the Board, and (iii) delivery to
Executive of notice from the Board finding that, in the good faith opinion of
the Board, Executive has been guilty of conduct set forth above in the preceding
sentence, and specifying the particulars thereof in detail.
1.6 "Change in Control" - (i) the occurrence of an event with respect to
the Company of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Act; (ii) any
"person" (as such term in used in Section 13(d) and 14(d) of the Act), other
than the Company or any "person" who on the date hereof is a director, officer,
an employee benefit plan or related trust or affiliate of the Company, becoming
the "beneficial owner" (as defined in Rule 13d-3 under the Act), directly or
indirectly, of securities of the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities entitled to
vote generally in the election of directors; (iii) the Company, its capital
stock, or all or substantially all of its assets are acquired by or combined
with (either through a merger, consolidation, reorganization, share exchange or
otherwise) with another entity and less than a majority of the outstanding
voting power of the parent or surviving corporation are owned, immediately after
consummation of such transaction, by Century's shareholders immediately prior to
such time; or (iv) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board ceasing for any reason to
constitute at least a majority thereof, unless the election of each director who
was not a director at the beginning of such period shall have been approved in
advance by directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period.
1.7 "Code" - Internal Revenue Code of 1986, as amended.
1.8 "Company" - Century Telephone Enterprises, Inc. or any successor
thereto.
1.9 "Compensation Amount" - the sum of (i) Executive's annual salary as of
the Announcement Date plus (ii) all cash and stock bonuses (valued on the date
of grant) earned by Executive for the most recent twelve-month period ending
before the effective date of a Change in Control.
1.10 "Effective Termination" - following an Announcement Date, any action
taken by the Company or any controlling entity of the Company in relation to
Executive's salary, duties or position as an executive officer of the Company,
other than an isolated, insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company (or any controlling entity of the
Company) within three days after receipt of notice thereof given by Executive,
that, in Executive's reasonable judgment, results in any of the following: (a) a
reduction in Executive's salary as of the Announcement Date or a reduction in
the value of the benefits received by Executive under any pension or welfare
employee benefit plan maintained by the Company as of the Announcement Date; (b)
a diminution in Executive's duties, responsibilities and position in the
management of the Company and its subsidiaries including, without limitation,
(i) the permanent assignment to Executive of duties not consistent with
Executive's position as an executive officer of the Company, (ii) the demotion
of Executive or (iii) the failure to provide Executive with secretarial
assistance and all support, staff, office, equipment and other facilities
necessary to carry out his functions as an executive officer of the Company; (c)
the relocation of Executive to an office outside of the city in which he
performed his services for the Company immediately prior to the Announcement
Date; or (d) the refusal to allow Executive to attend to matters or engage in
activities not directly related to the business of the Company which are of the
type which he attended to or engaged in prior to the Announcement Date or was
permitted to attend to or engage in by the Chief Executive Officer or the Board
prior to the Announcement Date.
SECTION 2
TERM
This Agreement shall terminate on the earlier of (i) May 24, 2000 or (ii)
the date that Executive ceases to be an employee of the Company at any time
prior to an Announcement Date.
SECTION 3
COMPENSATION UPON TERMINATION
3.1 Compensation and Severance Benefits. (a) If, during the period
beginning on the Announcement Date and ending three years following the
effective date of a Change in Control, the Company (or any controlling entity of
the Company) shall terminate Executive's employment with the Company, other than
for Cause, or if Executive resigns because an event constituting an Effective
Termination has occurred, Executive shall receive, in addition to all amounts to
which he is entitled pursuant to the Company's termination policies and plans
then in effect, as severance pay, an amount equal to the Compensation Amount
multiplied by the number three. Such severance payment shall be made in a lump
sum within five business days of the date that Executive's employment is
terminated or the date that Executive notifies the Company that an event
constituting an Effective Termination has occurred.
(b) Contemporaneously with any payments due under paragraph (a) and in
addition to any other amounts due, the Company shall 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 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 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 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 no 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.
3.2 Election of Benefits. If during the period beginning on the
Announcement Date and ending three years following the effective date of a
Change of Control, the Company (or any controlling entity of the Company) shall
terminate Executive's employment with the Company, other than for Cause, or if
Executive resigns because an event constituting an Effective Termination has
occurred, the Company shall, at its cost, continue for three years following
such termination date health, dental and life insurance benefits to Executive
and his family at least equal to those generally applicable to other peer
executives of the Company and its affiliated companies (to the same extent as if
Executive had continued to serve in such capacity), but in no event shall such
benefits be less favorable than those in effect for Executive immediately prior
to the Announcement Date; provided, however, that if Executive becomes
reemployed with another employer and becomes eligible to receive comparable
benefits under another employer-provided plan, the benefits described herein
shall be secondary to those provided under such other plan during such
applicable period of eligibility. In the event that Executive's participation in
any such insurance plan, program or arrangement is barred, or any such plan,
program or arrangement is discontinued or the benefits thereunder materially
reduced, the Company shall arrange to provide Executive with benefits
substantially similar to those which Executive would otherwise be entitled to
receive hereunder. At the end of the period of coverage hereinabove provided
for, 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. All medical and dental
continuation coverage provided under this section shall run concurrently with
COBRA coverage under Section 4980B(f) of the Internal Revenue Code of 1986.
3.3 Additional Obligations of the Company. Nothing herein shall relieve the
Company of its obligations to Executive under any qualified or non-qualified
retirement plan, deferred compensation plan, incentive compensation plan, stock
purchase plan, stock option plan, stock ownership plan, bonus plan, supplemental
plan, insurance program or plan, or any other compensation, benefit or welfare
plan or arrangement, or any agreement entered into thereunder.
SECTION 4
SUCCESSORS; ASSIGNMENT
4.1 Successors to Executive. This Agreement and all rights of Executive
hereunder shall inure to the benefit of and be enforceable by the Executive's
personal or legal representative, executors, administrators, successors, heirs,
distributes, devises 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 devise, legatee, or other designee or, if
there be no such designee, to Executive's estate.
4.2 Successors to Company. This Agreement and all obligations of the
Company hereunder shall be binding on the Company and on any successor to the
Company. The Company hereby agrees that it will not enter into any agreement to
consolidate, amalgamate or merge with another entity or to convey all or
substantially all of its assets to another entity unless such agreement provides
for the rights set forth in this Agreement.
4.3 Assignment by Executive. Neither this agreement nor any of its
benefits may be assigned by Executive.
SECTION 5
MISCELLANEOUS
5.1 Notice. Any notice provided for in this Agreement shall be actual
notice and shall be deemed to have been duly given when actually received by
Executive.
5.2 Waiver. 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.
5.3 Whole Agreement. This Agreement constitutes the entire understanding
and agreement among the parties hereto with respect to the subject matter
hereof, and there are no agreements or understandings among the parties other
than those set forth herein or provided hereby. Without limiting the generality
of the foregoing, Executive acknowledges that any and all prior employment
agreements between the Company and Executive lapsed on or prior to the date of
the Original Agreement, and Executive has no rights thereunder.
5.4 Choice of Law. The validity of this Agreement, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be governed by and construed in accordance with the laws of the State of
Louisiana applicable to contracts made and to be performed wholly within such
state.
5.5 Amendment. The parties may amend this Agreement by an instrument in
writing signed by both parties.
5.6 Severability. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
5.7 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.
5.8 Expenses. The Company shall reimburse Executive all expenses, including
attorneys' fees, actually and reasonably incurred by Executive in any proceeding
to enforce any of his rights under this Agreement.
5.9 Confidentiality. Upon receipt of the payments or benefits contemplated
by Section 3 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 subsidiaries to any person or entity other than
the Company, its subsidiaries 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, (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.
5.10 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.
IN WITNESS WHEREOF, the parties have executed this instrument as of
the date and year first above written.
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