Exhibit 10.1
LEVEL 3 COMMUNICATIONS, INC.
OSO MASTER AWARD AGREEMENT
THIS OSO MASTER AWARD AGREEMENT (the "Agreement") is dated as of
_____________________________, between Level 3 Communications, Inc., a Delaware
corporation (the "Company"), and the individual whose name appears on the
signature page to this Agreement (the "Grantee"), an "Employee" as defined in
the Company's 1995 Stock Plan (as amended from time to time) (the "Plan").
WHEREAS, 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 Grantee a certain number of outperform
stock appreciation rights, which are referred to as "OSOs" (each such grant an
"Award"), as described below, pursuant to the Plan.
NOW, THEREFORE, the parties agree as follows:
1. Grants of Awards. Pursuant to the provisions of Section 8.1 of the Plan,
the Company, from time to time in its sole discretion, may grant Awards to the
Grantee relating to a specified number of OSOs that, under certain circumstances
and in accordance with the terms hereof, may result in the Grantee having the
right to acquire shares of common stock of the Company, par value $.01 per share
(the "Award Shares"). Each Award will be evidenced by an Outperform Stock
Appreciation Right 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 OSOs that are the
subject of the Award, and the "Initial Price" of the Award Shares covered by the
Award. This Agreement sets forth general terms and conditions applicable to all
Awards granted on, or after the date hereof.
2. Terms and Conditions of Awards
2.1. Adjustment of Initial Price. The "Adjusted Price" shall be the Initial
Price, adjusted upward or downward as of the Settlement Date, by a percentage
equal to the aggregate percentage increase or decrease (expressed as a whole
percentage point followed by three decimal places) in the Standard and Poor's
500 Index over the period (the "Period") beginning on the Trading Day
immediately preceding the Award Date applicable to the Award and ending on the
Trading Day immediately preceding the relevant Settlement Date (the "Aggregate
Percentage S&P Performance"). For purposes of this Agreement, the "Settlement
Date" shall mean the earlier to occur of (i) the date set forth in the
applicable Award Letter as the Settlement Date of the Award and (ii) the
effective date of a Change in Control, as defined below. For purposes of
determining the Aggregate Percentage S&P Performance with respect to any Period,
the Standard and Poor's 500 Index as of the first day of the Period shall be
deemed to equal the closing value of such index on the Trading Day immediately
preceding the Award Date, and the Standard and Poor's 500 Index on the last day
of the Period shall be deemed to equal the average closing value of such index
over the ten-consecutive-Trading Day period immediately preceding the Settlement
Date. Notwithstanding anything in this Agreement to the contrary, under no
circumstances will the Adjusted Price be less than the Initial Price on the
Settlement Date. In addition, if the provisions of this Section 2.1 would cause
the Adjusted Price to be less than the Initial Price, the Adjusted Price shall
be fixed at the Initial Price.
2.2. Term. The term of each Award shall be three (3) years from the grant
date set forth in the related Award Letter (subject to such shorter period as
set forth in Section 4 hereof), after which the Award shall expire.
2.3. Vesting. Subject to Section 2.4 hereof, the OSOs granted under an
Award shall vest on the Settlement Date.
2.4. Accelerated Vesting upon Change in Control. Notwithstanding anything
herein or in the Plan to the contrary, and in accordance with the authority
granted to the Committee in Section 9.2(b) of the Plan, on the effective date of
a "Change in Control" (as defined in the Plan), (i) each Award shall be
canceled, and (ii) the Company or its successor shall pay to the Grantee in
consideration thereof an amount of cash equal to the value of any OSOs
(regardless of whether the OSOs were theretofore vested), assuming for this
purpose that the effective date of the Change in Control had been the day during
the prior 60-day period ending on the effective date of the Change in Control
which produces the highest such value, and (iii) any required withholding
related to such payment shall be satisfied by withholding the appropriate amount
of cash from such payment.
2.5. Consideration. Vested OSOs shall be settled on the Settlement Date as
set forth in this Agreement. As promptly as practicable, the Company shall
deliver or pay to the Grantee with respect to and in cancellation of each vested
OSO, consideration (the "Settlement Consideration") equal to the product
obtained when (a) the Fair Market Value (as defined in Section 9.1) of a share
of Stock as of the day prior to the Settlement Date, less the Adjusted Price for
the relevant Award Shares, is multiplied by (b) the Multiplier (as defined in
Section 2.6 below); provided, that the Settlement Consideration would be a
positive number. The Settlement Consideration, if any, may be paid in (a) cash,
(b) Stock or (c) any combination of cash or Stock, at the Committee's sole and
absolute discretion. In the event that the Company elects to pay some or all of
the Settlement Consideration in Stock, the number of shares of Stock to be
delivered shall be determined by dividing that portion of the Settlement
Consideration to be paid in Stock by the Fair Market Value of a share of Stock
as of the day prior to the Settlement Date. The payment of the Settlement
Consideration, if any, shall be, in each case, subject to withholding in
accordance with Section 9.5. For purposes of this Agreement, "Stock" shall mean
the Company's common stock, par value $.01 per share.
2.6. Multiplier. For purposes of this Section 2.6,
the following terms are defined:
(a) "S&P Start Number" means the closing value of the Standard and Poor's 500
Index on the Trading Day immediately preceding the relevant Award Date.
(b) "S&P End Number" means the simple arithmetic average of the closing value
of the Standard and Poor's 500 Index over the ten-consecutive-Trading Day
period immediately preceding the Settlement Date.
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(c) "Stock Start Number" means the Fair Market Value of the Stock on the
Trading Day immediately preceding the relevant Award Date.
(d) "Stock End Number" means the simple arithmetic average of the Fair Market
Value of the Stock over the ten-consecutive-Trading Day period immediately
preceding the Settlement Date.
(e) "Duration" means the length of the relevant Period, measured in years and
fractions of years (expressed as a whole number followed by three decimal
places).
(f) "Annualized Percentage S&P Performance" means the annualized increase (or
decrease) between the S&P Start Number and the S&P End Number over the
Period (expressed as a whole percentage point followed by three decimal
places), captured by the following formula:
S&P End Number - S&P Start Number x 100%
--------------------------------- ----
S&P Start Number Duration
(g) "Annualized Percentage Company Stock Price Performance" means the
annualized increase (or decrease) between the Stock Start Number and the
Stock End Number over the Period (expressed as a whole percentage point
followed by three decimal places), captured by the following formula:
Stock End Number - Stock Start Number x 100%
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Stock Start Number Duration
The "Multiplier" shall be based on the "Outperform Percentage," which is the
excess, if any, of the Annualized Percentage Company Stock Price Performance
over the Annualized Percentage S&P Performance. The Multiplier shall be
expressed as a whole number and decimals, rounded to three decimal places, and
be determined as follows:
With respect to each Award that has an Award Date that is on or after the date
of this Agreement:
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If Outperform Percentage is: The Multiplier will equal:
---------------------------- -------------------------
0% or less 0
More than 0%
but less than 11% The Outperform Percentage multiplied
by 100 multiplied by 4/11. (E.g., if
Outperform Percentage = 5%,
the Multiplier = 5.000
times 4/11 = 1.818)
11% or more 4.000
In no event will the Multiplier exceed 4.000 for Awards in which the Award Date
is on or after the date of this Agreement.
3. Exempt 162(m) Treatment. The terms and conditions relating to Awards are
designed so that each Award will qualify as performance-based compensation
within the meaning of Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"), and the provisions of this Agreement shall be construed
accordingly. Consequently, if at the time of any purported exercise of an Award
by the Grantee, the Grantee is a "covered employee" within the meaning of
Section 162(m) of the Code, such purported exercise shall not be effective prior
to the time that the Company's shareholders have issued such approvals, and such
other actions have been taken as may be required, to qualify the Award as such
performance-based compensation.
4. Termination of Employment/Expiration of Award.
4.1. Unvested OSOs. Except as set forth in Section 4.2 below, Awards shall
expire as to any unvested Awards as of the date the Grantee ceases to be
employed by the Company or any of its Affiliates for any reason .
4.2. Death, Disability and Retirement. Notwithstanding the provisions of
Section 4.1 above, if the Grantee ceases to be employed by the Company as a
result of the Grantee's death, retirement (in accordance with the Company's
Retirement Benefit then in effect), or "Permanent Total Disability" (as defined
in the following sentence), each Award shall not expire and shall remain
outstanding until the Settlement Date. The Grantee shall be considered to have
suffered a Permanent Total Disability if the Committee determines that the
Grantee is permanently unable to earn any wages in the same or other employment.
5. Non-Transferability. Except as specifically allowed by the Committee in
writing, an Award and the related OSOs shall not be transferable other than by
will or the laws of descent and distribution, and OSOs may be exercised, during
the lifetime of the Grantee, only (i) by the Grantee or (ii) on the Grantee's
behalf by a court-appointed legal guardian. More particularly (but without
limiting the generality of the foregoing), except as provided above an Award,
OSOs, and the right to receive Settlement Consideration may not be assigned,
transferred, pledged or hypothecated in any way, shall not be assignable by
operation of law, and
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shall not be subject to execution, attachment or similar process. Any attempted
assignment, transfer, pledge, hypothecation or other disposition of an Award,
OSOs, or the right to receive Settlement Consideration contrary to the
provisions hereof and the levy of any execution, attachment or similar process
upon an Award, OSOs, or the right to receive Settlement Consideration shall be
null and void and without effect.
6. Changes in Capital Structure, Etc. Section 9.1 of the Plan shall apply
to each Award, provided that no action may be taken by the Committee pursuant
thereto which would prevent a Pooling Transaction from qualifying as such.
7. Golden Parachute Gross-Up.
(a) In the event it is determined (as hereafter provided) that any payment
or distribution by the Company to or for the benefit of the Grantee pursuant to
the terms of the Agreement, whether paid or payable or distributed or
distributable, including without limitation the lapse or termination of any
restriction on or the vesting of an Award or OSOs granted under the Agreement (a
"Payment"), would be subject to the excise tax imposed by Section 4999 of the
Code (or any successor provision thereto) or to any similar tax imposed by state
or local law, or any interest or penalties with respect to such excise tax (such
tax or taxes, together with any such interest and penalties, are hereafter
collectively referred to as the "Excise Tax"), then the Grantee will be entitled
to receive an additional payment or payments (a "Gross-Up Payment") in an amount
equal to the Excise Tax plus any penalties or taxes imposed on the Grantee by
virtue of such Gross-Up Payment such that, after payment by the Grantee of all
taxes (including any interest or penalties imposed with respect to such taxes),
including any Excise Tax imposed upon the Gross-Up Payment, the Grantee retains
the full value of an Award and the OSOs thereunder, with the exception of any
regular income taxes owed by the Grantee on account of exercise of OSOs.
(b) Subject to the provisions of Section 7(d) hereof, all determinations
required to be made under this Agreement, including whether an Excise Tax is
payable by the Grantee and the amount of such Excise Tax and whether a Gross-Up
Payment is required and the amount of such Gross-Up Payment, will be made by an
outside "Big 4" or similar international accounting firm chosen by the Company
(the "Accounting Firm"). The Grantee will direct the Accounting Firm to submit
its determination and detailed supporting calculations to both the Company and
the Grantee within 15 calendar days after the effective date of the Change in
Control, and any other such time or times as may be requested by the Company or
the Grantee. If the Accounting Firm determines that any Excise Tax is payable by
the Grantee, the Company will pay the required Gross-Up Payment to the Grantee
within five business days after receipt of such determination and calculations.
If the Accounting Firm determines that no Excise Tax is payable by the Grantee,
it will, at the same time as it makes such determination, furnish the Grantee
with an opinion (addressed to both the Grantee and the Company) or other
evidence reasonably acceptable to the Grantee that the Grantee has substantial
authority not to report any Excise Tax on the Grantee's federal, state, local
income or other tax return. Any determination by the Accounting Firm as to the
amount of the Gross-Up Payment will be binding upon the Company and the Grantee.
As a result of the uncertainty in the application of Section 4999 of the Code
(or any successor provision thereto) and the possibility of similar uncertainty
regarding
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applicable state or local tax law at the time of any determination by the
Accounting Firm hereunder, it is possible that Gross-Up Payments which will not
have been made by the Company should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder. In the event
that the Company exhausts or fails to pursue its remedies pursuant to Section
7(d) hereof and the Grantee thereafter is required to make a payment of any
Excise Tax, the Grantee will direct the Accounting Firm to determine the amount
of the Underpayment that has occurred and to submit its determination and
detailed supporting calculations to both the Company and the Grantee as promptly
as possible. The amount of any such Underpayment will be promptly paid by the
Company to, or for the benefit of, the Grantee within five business days after
receipt of such determination and calculations.
(c) The Company and the Grantee will each provide the Accounting Firm
access to and copies of any books, records and documents in the possession of
the Company or the Grantee, as the case may be, reasonably requested by the
Accounting Firm, and otherwise cooperate with the Accounting Firm in connection
with the preparation and issuance of the determination contemplated by Section
7(b) hereof.
(d) The federal, state and local income and other tax returns filed by the
Grantee will be prepared and filed on a consistent basis with the determination
of the Accounting Firm with respect to the Excise Tax payable by the Grantee.
The Grantee will make proper payment of the amount of any Excise Tax, and at the
request of the Company, provide to the Company true and correct copies (with any
amendments) of the Grantee's federal income tax return as filed with the
Internal Revenue Service and corresponding state and local tax returns, if
relevant, as filed with the applicable taxing authority, and such other
documents reasonably requested by the Company, evidencing such payment. If prior
to the filing of the Grantee's federal income tax return, or corresponding state
and local tax return, if relevant, the Accounting Firm determines that the
amount of the Gross-Up Payment should be reduced, the Grantee will within five
business days pay to the Company the amount of such reduction.
(e) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Sections
7(b) and (d) hereof will be borne by the Company. If such fees and expenses are
initially advanced by the Grantee, the Company will reimburse the Grantee the
full amount of such fees and expenses within five business days after receipt
from the Grantee of a statement therefor and reasonable evidence of his payment
thereof.
(f) The Grantee will notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification will be given as promptly as
practicable but no later than 10 business days after the Grantee actually
receives notice of such claim and the Grantee will further apprise the Company
of the nature of such claim and the date on which such claim is requested to be
paid (in each case, to the extent known by the Grantee). The Grantee will not
pay such claim prior to the earlier of (a) the expiration of the 30-calendar-day
period following the date on which he gives such notice to the Company, and (b)
the date that any payment of an amount with respect to such claim is due. If the
Company notifies the Grantee in writing prior to
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the expiration of such period that it desires to contest such claim, the Grantee
will (i) provide the Company with any written records or documents in the
Grantee's possession relating to such claim reasonably requested by the Company,
(ii) take such action in connection with contesting such claim as the Company
will reasonably request in writing from time to time, including without
limitation accepting legal representation with respect to such claim by an
attorney competent in respect of the subject matter and reasonably selected by
the Company, (iii) cooperate with the Company in good faith in order effectively
to contest such claim, and (iv) permit the Company to participate in any
proceedings relating to such claim; provided, however, that the Company will
bear and pay directly all costs and expenses (including interest and penalties)
incurred in connection with such contest and will indemnify and hold harmless
the Grantee, on an after-tax basis, from and against any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a result
of such representation and payment of costs and expenses. Without limiting the
foregoing provisions of this Section 7(f), the Company may, at its option,
control all proceedings taken in connection with the contest of any claim
contemplated by this Section 7(f) and, at its sole option, may pursue or forego
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim (provided, however, that the
Grantee may participate therein at his own cost and expense) and may, at its
option, either direct the Grantee to pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and the Grantee agrees to prosecute
such contest to a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts, as the Company will
determine; provided, however, that if the Company directs the Grantee to pay the
tax claimed and xxx for a refund, the Company will advance the amount of such
payment to the Grantee on an interest-free basis and will indemnify and hold the
Grantee harmless, on an after-tax basis, from any Excise Tax or income tax,
including interest or penalties with respect thereto, imposed with respect to
such advance; and provided further, however, that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the Grantee
with respect to which the contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of any such
contested claim will be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Grantee will be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(g) If, after the receipt by the Grantee of an amount advanced by the
Company pursuant to Section 7(f) hereof, the Grantee receives any refund with
respect to such claim, the Grantee will (subject to the Company's complying with
the requirements of Section 7(f) hereof) promptly pay to the Company the amount
of such refund (together with any interest paid or credited thereon after any
taxes applicable thereto). If, after the receipt by the Grantee of an amount
advanced by the Company pursuant to Section 7(f) hereof, a determination is made
that the Grantee will not be entitled to any refund with respect to such claim
and the Company does not notify the Grantee in writing of its intent to contest
such denial or refund prior to the expiration of 30 calendar days after such
determination, then such advance will be forgiven and will not be required to be
repaid and the amount of such advance will offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid pursuant to this Agreement.
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(h) If Grantee takes action to enforce this Section 7 against the Company
(which for this purpose shall include making preparations for taking such
enforcement action), and such enforcement action is in whole or part successful
(whether by decision of a court or arbitrator, by settlement, by mutual
agreement of Grantee and the Company, or otherwise), the Company shall promptly
pay directly or, at Grantee's election, reimburse Grantee for, all legal and
other expert fees and expenses incurred by Grantee in connection with such
action.
8. General. Subject to the provisions of Section 2.5 with respect to the
form of the payment of the Settlement Consideration, the Company shall at all
times during the term of this Agreement reserve and keep available such number
of shares of Stock, as determined by the Compensation Committee from time to
time, as will be sufficient in the Compensation Committee's good faith
determination to satisfy the requirements of this Agreement, shall pay all
original issue and transfer taxes with respect to the issue and transfer of
shares of Stock pursuant hereto and all other fees and expenses necessarily
incurred by the Company in connection therewith, and will from time to time use
its best efforts to comply with all laws and regulations which, in the opinion
of counsel for the Company, shall be applicable thereto.
9. Miscellaneous
9.1. Fair Market Value and Trading Day. For purposes of this Agreement, the
"Fair Market Value" of the Stock shall mean as of any date of determination (i)
the closing price per share of Stock on the national securities exchange on
which the Stock is principally traded as of 4:15 pm New York City Time, or (ii)
if the Stock is not listed or admitted to trading on any such exchange, the last
sale price of a share of Stock as reported by the NASD, Inc. Automated Quotation
("NASDAQ") system, or (iii) if the Stock is not then listed on any securities
exchange and prices therefore are not then quoted in the NASDAQ system, then the
value determined by the Committee in good faith. The term "Trading Day" means
any day on which the Stock is traded, as contemplated by subsection (i) or (ii)
above.
9.2. No Stockholder Rights. The Grantee shall not have any of the rights of
a stockholder with respect to the Award Shares resulting from any Award prior to
the issuance of Stock, if any, to the Grantee upon the due exercise of the OSOs.
9.3. No Abrogation of Company's Rights. Nothing in this Agreement shall
confer upon the Grantee any right to continued employment with the Company or
interfere in any way with the right of the Company to terminate the Grantee's
employment at any time. The transfer of employment between any combination of
the Company and any Affiliate of the Company shall not be deemed a termination
of employment.
9.4. Effect of the Plan. The terms and provisions set forth in the Plan are
incorporated herein by reference as if they were set forth herein; provided,
however, that in the event of a direct conflict between the terms of the Plan
and the terms of this Agreement, the terms of this Agreement shall govern.
Reference to provisions of the Plan are to such provisions as they shall be
subsequently amended or renumbered; provided that no amendment to the Plan which
adversely affects an Award shall be effective as to that Award without the
written consent of the Grantee. The Grantee acknowledges that a current version
of the Plan is available on the
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Company's intranet site, and the Company agrees to supply to the Grantee a paper
copy of the current version of the Plan upon the Grantee's request.
9.5. Withholding. (a) Notwithstanding anything contained herein to the
contrary, other than Subsection 2.4 and Section 7, the Company will not be
obligated to issue the Settlement Consideration unless the Grantee 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 value of the Settlement Consideration. To the
extent that the Grantee desires to pay the Withholding Taxes in cash or by
certified or cashier's check, the Grantee must deliver a Withholding Taxes Cash
Payment Notification to the Company's stock OSO administrator substantially in
the form of Exhibit B no later than 45 days prior to the Settlement Date of any
Award issued under this Agreement. To the extent that the Grantee elects to pay
the Withholding Taxes in cash or by certified or cashier's check, such payment
must be received by the Company's OSO administrator no later than one (1)
Business Day after the Settlement Date of any Award that is the subject of the
Withholding Taxes Cash Payment Notification.
(b) The Company, in its sole discretion, may permit the Grantee to pay any
or all Withholding Taxes through delivery of outstanding Stock or by the Company
withholding a portion of the Settlement Consideration issuable pursuant to this
Agreement. The Grantee, 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 Grantee, 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 whenever
the Settlement Consideration is delivered by the Company in the form of shares
of Stock (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
Grantee as contemplated by Section 9.9 of this Agreement; 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 Grantee for the collection of Withholding Taxes that may be
owed by the Grantee at any time in its sole discretion, upon notice to the
Grantee, which notice may be written or electronic notice.
9.6. Plan and Agreement Govern. Although any information sent to or made
available to the Grantee 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.
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9.7. Affiliate. The term "Affiliate" shall have the mean ascribed to it in
the Plan.
9.8. Amendments. Notwithstanding anything herein to the contrary, this
Agreement may be amended by the Committee from time to time without the consent
of the Grantee to the extent the Committee deems it appropriate to cause this
Agreement and/or each Award hereunder to comply with Section 409A of the
Internal Revenue Code of 1986, as amended ("Section 409A") (including the
distribution requirements thereunder) or be exempt from Section 409A and/or the
tax penalty under Section 409A(a)(1)(B).
9.9 Authorization to Trade. By the execution of this Agreement, to the
extent that the Company elects to issue the Settlement Consideration as a net
issuance for the settlement of any Award of OSOs, and, the Grantee has not
properly executed and delivered to the Company's OSO administrator a Withholding
Taxes Cash Payment Notification, the Grantee hereby irrevocably instructs the
Company and a broker of the Company's choosing, to sell on behalf of the Grantee
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
Grantee pursuant to Section 9.5. The Grantee represents to the Company and the
broker that the Grantee is entering into this Agreement in good faith. The
Grantee shall have no ability to modify these instructions other than by the
proper execution and delivery to the Company's OSO administrator of a
Withholding Taxes Cash Payment Notification. It is the Grantee'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.
[Signature page follows]
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IN WITNESS WHEREOF, this Agreement is executed by the Grantee and by an
authorized officer on behalf of the Company, as of the date first above written.
XXXXX 0 COMMUNICATIONS, INC.
BY:
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ITS:
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GRANTEE:
-------------------------------
(Please sign)
Name:
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(Please print)
Date of Hire:
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EXHIBIT A
LEVEL 3 COMMUNICATIONS, INC.
OSO AWARD LETTER
This OSO Award (the "Award") when taken together with the OSO Master
Award Agreement dated as of ________________ and the individual whose name
appears on the signature line below (the "Grantee") (the "Master Agreement")
constitutes an award to of outperform stock appreciation rights that are
referred to as OSOs under the Level 3 Communications, Inc. 1995 Stock Plan (as
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 grant of this Award is __________ (the "Award Date").
B. The Initial Price per share for each Award Share covered by this
Award is $__________.
C. The Settlement Date of this Award is ______________.
LEVEL 3 COMMUNICATIONS, INC.
BY:
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ITS:
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GRANTEE:
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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 "Grantee") in
reference to an OSO Award granted to the Grantee by Level 3 Communications, Inc.
(the "Company") pursuant to that certain OSO Master Award Agreement dated as of
________________ between the Company and the Grantee (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 OSO
Award granted to the Grantee pursuant to the Award Letter issued to the Grantee
dated _____________________, the Settlement Date of which OSO Award is
____________________ (the "Referenced OSO Award").
The Grantee hereby irrevocable elects to pay any Withholding Taxes that
are owed by the Grantee upon the Settlement Date of the Referenced OSO Award in
cash or by certified or cashier's check made payable to Level 3 Communications,
Inc. within one (1) Business Day of the Settlement Date of the Referenced OSO
Award. All payments of Withholding Taxes are to be made to the Company's OSO
award administrator.*
The Grantee hereby represents and warrants to the Company that on the
date hereof, the Grantee 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 Grantee 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 Grantee expressly acknowledges
that: (a) the Grantee has executed this Withholding Taxes Cash Payment
Notification during an open trading window pursuant to the Company's Xxxxxxx
Xxxxxxx Policy; and (b) the Grantee may not sell any shares of Stock that are
distributed to the Grantee upon the expiration of the Referenced OSO Award, so
long as the trading window is closed.
GRANTEE:
----------------------------------------
(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 OSO administrator.
14
