-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L1hCzfoYBrQFgRue5nj+45GEtnGerNpV9ME2Bo3ZRlSx51xvs/iwvXwj1UV0VW++ /i+6QBsofpjfciwsdC7k8Q== 0001104659-07-017118.txt : 20070307 0001104659-07-017118.hdr.sgml : 20070307 20070307170027 ACCESSION NUMBER: 0001104659-07-017118 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070301 ITEM INFORMATION: Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070307 DATE AS OF CHANGE: 20070307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: QWEST COMMUNICATIONS INTERNATIONAL INC CENTRAL INDEX KEY: 0001037949 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 841339282 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-15577 FILM NUMBER: 07678465 BUSINESS ADDRESS: STREET 1: 1801 CALIFORNIA ST CITY: DENVER STATE: CO ZIP: 80202 BUSINESS PHONE: 3039921400 MAIL ADDRESS: STREET 1: 1801 CALIFORNIA ST CITY: DENVER STATE: CO ZIP: 80202 FORMER COMPANY: FORMER CONFORMED NAME: QUEST COMMUNICATIONS INTERNATIONAL INC DATE OF NAME CHANGE: 19970416 8-K 1 a07-7093_18k.htm 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT

TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported):  March 1, 2007

QWEST COMMUNICATIONS INTERNATIONAL INC.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

(State or Other Jurisdiction of Incorporation)

001-15577

 

84-1339282

(Commission File Number)

 

(IRS Employer Identification No.)

 

 

 

1801 California Street, Denver, Colorado

 

80202

(Address of Principal Executive Offices)

 

(Zip Code)

 

(303) 992-1400

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o            Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o            Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o            Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o            Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 




Item 5.02(c). Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

As previously announced, the Board of Directors (the “Board”) of Qwest Communications International Inc. (“Qwest” or the “Company” or “we” or “us” or “our”) has appointed John W. Richardson to the position of Executive Vice President and Chief Financial Officer effective as of the effective time of Oren G. Shaffer’s resignation as Vice Chairman and Chief Financial Officer.  On March 1, 2007, the Compensation and Human Resources Committee of our Board approved Mr. Richardson’s compensation for his new position.

Mr. Richardson will receive an annual base salary of $525,000 and a target bonus percentage of 150%. We will grant the following equity awards (the “Awards”) to Mr. Richardson on March 5, 2007: (i) a non-qualified option to purchase 257,000 shares of our common stock at an exercise price equal to the closing market price of our common stock on that date; and (ii) a restricted stock award equal to $977,500 divided by the closing market price of our common stock on that date (rounded to the nearest 1,000 shares). Each of the Awards will be granted under our Equity Incentive Plan and will vest generally as follows:

·                       The Awards will fully vest on March 5, 2010 if Mr. Richardson is employed by us on that date and if at any time after March 5, 2007 the average closing price of our common stock equals or exceeds the then applicable Share Price Target for any period of 90 consecutive trading days beginning on or after March 5, 2007.  The “Share Price Target” is originally $10.50 and will be adjusted downward for any dividends paid on our common stock and adjusted appropriately for any capital structure changes.  In addition, the Awards will fully vest prior to March 5, 2010 upon death, disability, termination of employment by Mr. Richardson for good reason or termination of employment by us without cause if either the 90-day performance condition with respect to Share Price Target has theretofore been satisfied or the average closing price of our common stock equals or exceeds the then applicable Share Price Target for a period of 22 or more consecutive trading days during the 30 consecutive trading days immediately prior to the date of death, disability or termination of employment.

·                       The Awards will fully vest prior to March 5, 2010 upon the closing of a merger, consolidation, asset sale, or similar transaction in which Qwest is not the surviving entity or in which Qwest is the surviving entity and Mr. Richardson is not offered a comparable position and compensation package.

To the extent not previously vested, the Awards will be immediately forfeited upon the earlier of a termination of employment for any reason whatsoever (unless the termination results in full vesting of the Awards) or March 5, 2010. If we grant future equity awards to Mr. Richardson prior to 2010, those awards will vest on the anniversary of their respective grant dates in 2010, subject to all terms and conditions of the applicable equity agreements.

Mr. Richardson will be entitled to severance benefits consistent with the benefits we provide generally to other employees at the executive vice president level.  Among other things:

·                       If we terminate Mr. Richardson’s employment without cause, we will pay him (i) an amount equal to 1½ times his annual base salary, payable over an 18-month period and (ii) a lump-sum amount equal to 1½ times his target annual bonus, payable at the end of the 18-month period.

·                       If we terminate Mr. Richardson’s employment without cause, or he terminates his employment for good reason, within 2 years following a change in control, we will pay him an amount equal to 3 times his annual base salary, plus 3 times his target annual bonus and a prorated bonus payment for the year of termination.

In either case, we will also pay Mr. Richardson’s premiums for continuing health care coverage under COBRA for up to 18 months, plus an amount necessary to cover any excise taxes to which he may be subject as a result of his severance benefits.

The foregoing descriptions do not purport to be complete and are qualified in their entirety by reference to the text of the compensation agreements attached hereto as Exhibits 10.1, 10.2 and 10.3 and incorporated herein by reference.

2




Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.

 

 

 

Description

Exhibit 10.1

 

Letter Agreement, dated March 2, 2007, between John W. Richardson and Qwest Services Corporation

Exhibit 10.2

 

Agreement, dated as of March 7, 2007, by and between John W. Richardson and Qwest Communications International Inc.

Exhibit 10.3

 

Severance Agreement, dated as of April 1, 2007, by and between John W. Richardson and Qwest Services Corporation

 

Forward Looking Statements Warning

This filing may contain projections and other forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by us with the Securities and Exchange Commission, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including but not limited to: access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives, among others; our substantial indebtedness, and our inability to complete any efforts to de-lever our balance sheet through asset sales or other transactions; any adverse outcome of the current investigation by the U.S. Attorney’s office in Denver into certain matters relating to us; adverse results of increased review and scrutiny by regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings, including any adverse outcome of current or future legal proceedings related to matters that are or were the subject of governmental investigations; potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete including the effects of consolidation in our industry; changes in demand for our products and services; acceleration of the deployment of advanced new services, such as broadband data, wireless and video services, which could require substantial expenditure of financial and other resources in excess of contemplated levels; higher than anticipated employee levels, capital expenditures and operating expenses; adverse changes in the regulatory or legislative environment affecting our business; changes in the outcome of future events from the assumed outcome included in our significant accounting policies; and our ability to utilize net operating losses in projected amounts.

The information contained in this filing is a statement of Qwest’s present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest’s assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest’s assumptions or otherwise. The cautionary statements contained or referred to in this filing should be considered in connection with any subsequent written or oral forward-looking statements that Qwest or persons acting on its behalf may issue. This filing may include analysts’ estimates and other information prepared by third parties for which Qwest assumes no responsibility.

Qwest undertakes no obligation to review or confirm analysts’ expectations or estimates or to release publicly any revisions to any forward-looking statements and other statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

By including any information in this filing, Qwest does not necessarily acknowledge that disclosure of such information is required by applicable law or that the information is material.

3




SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, Qwest has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

QWEST COMMUNICATIONS INTERNATIONAL INC.

 

 

 

 

 

 

 

 

 

 

DATE: March 7, 2007

 

 

By:

 

/s/ STEPHEN E. BRILZ

 

 

 

 

 

 

 

Name:

Stephen E. Brilz

 

 

 

 

 

 

 

Title:

Assistant Secretary

 

4




EXHIBIT INDEX

Exhibit No.

 

 

 

Description

Exhibit 10.1

 

Letter Agreement, dated March 2, 2007, between John W. Richardson and Qwest Services Corporation

Exhibit 10.2

 

Agreement, dated as of March 7, 2007, by and between John W. Richardson and Qwest Communications International Inc.

Exhibit 10.3

 

Severance Agreement, dated as of April 1, 2007, by and between John W. Richardson and Qwest Services Corporation

 

5



EX-10.1 2 a07-7093_1ex10d1.htm EX-10.1

Exhibit 10.1

March 2, 2007

John W. Richardson
1801 California Street
Denver, CO  80202

Dear John:

Giving people the opportunity to develop professionally through new challenges is an investment in our greatest resource — employees.  Fostering and developing the talent of employees is critical to the success of the business and to our future.  With that, I am pleased to offer you a promotion to the position of EVP — Chief Financial Officer, effective April 1, 2007. I am confident of the value you will continue to bring to the business.

1.               Base Salary:  Your base salary increases to $525,000 per annum.

2.               Annual Bonus Plan:  You will be eligible to participate in the annual bonus plan for 2007.  Your target bonus increases to 150% of your annual base pay prorated to reflect your promotion date.

3.               Equity Incentive Plan: As will be more fully set forth in an equity agreement to be provided, you will receive a non-qualified stock option grant of 257,000 shares of Qwest common stock pursuant to the Equity Incentive Plan (“EIP”), as amended. The purchase price of each share covered by this grant will be the closing price of Qwest stock on March 5, 2007.

In addition, as will be more fully set forth in the equity agreement to be provided, you will also receive a restricted stock award having an approximate value of $977,500.  The number of shares of restricted stock granted will be determined by dividing the dollar value above by the closing price of Qwest stock on March 5, 2007, and then rounding to the nearest 1,000 shares.

If you are granted future equity awards prior to 2010, such awards will vest on the anniversary of the grant date in 2010, subject to all terms and conditions of the applicable equity agreement.

4.               Residence Closing Costs.  Should you purchase a residence in Colorado within 12 months of your promotion, the Company will pay the reasonable costs incurred in taking title to the property.  The types of expenses that will be reimbursed are set forth in the Company’s Tier I Relocation Policy at page 27.

5.               Attorneys’ Fees For Review of Employment and Equity Agreements.  The Company will reimburse you for the reasonable attorneys’ fees you incur for a review of your employment and equity agreements.

6.               Executive Perquisite: For 2007, your executive perquisite benefit is $50,000 (grossed up for income taxes). You received $25,000 in January and an additional $25,000 will be paid to you on or before April 20, 2007.




7.               Executive Benefits: As an Executive Vice President, you are eligible for the following:

a)              35 days of time off with pay per year

b)             Supplemental Executive Retirement Plan — This plan makes up the difference between what would be paid under the Qwest Pension Plan, without IRS limits on compensation, and what is actually paid under that plan.

c)              Supplemental Executive Disability Coverage — You are eligible to receive up to 52 weeks of short term disability benefits. This benefit pays 70% of your base pay plus target bonus with no maximum monthly benefit. In addition, if your employment ends as a result of a disability, you are eligible to receive a long-term disability benefit of 60% of base pay plus target bonus with no maximum monthly benefit.

7.               Severance Agreement:  As a condition of this promotion, you are required to sign the attached Severance Agreements within 30 days and return one copy to Jana Venus at 1801 California Street, 23rdFloor, Denver, CO  80202. You may retain the other copy for your files.

Congratulations on this wonderful opportunity, John.  Your hard work and commitment to delivering the Spirit of Service is genuinely appreciated.

Sincerely,

Richard C. Notebaert
Chairman and CEO



EX-10.2 3 a07-7093_1ex10d2.htm EX-10.2

Exhibit 10.2

AGREEMENT

THIS AGREEMENT (the “Agreement”) is made and entered into on March 7, 2007, by and between John W. Richardson (the “Executive”) and Qwest Communications International Inc., a Delaware corporation (together with its wholly owned subsidiaries, the “Company”).

WITNESSETH THAT:

WHEREAS, the parties desire to provide for the grant of certain non-qualified stock options and shares of restricted stock to the Executive as set forth herein;

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, it is hereby covenanted and agreed by the Executive and the Company as follows:

1.             Stock Option and Restricted Stock Award.  The Executive shall be granted options under the Qwest Communications International Inc. Equity Incentive Plan, as amended (the “Plan”), to acquire shares of the common stock (“Common Stock”) of Qwest Communications International Inc. (“QCII”) and restricted shares of Common Stock under the Plan, in accordance with the following:

(a)           On March 5, 2007 (the “Grant Date”), the Executive shall be granted non-qualified options to acquire 257,000 shares of Common Stock (the “Option Award”).  Each option shall have a ten year term commencing on the applicable Grant Date, subject to vesting or earlier forfeiture as provided in subparagraphs (d) and (e) below.

(b)           The option price (“Option Price”) with respect to the 257,000 share option granted on the Grant Date is the closing price per share of the Common Stock reported on the New York Stock Exchange, or such other national stock exchange on which the Common Stock may then be listed and which constitutes the principal market for the Common Stock, on March 5, 2007. Upon the exercise of any such options, the Option Price with respect thereto shall be paid in accordance with the terms and conditions of the Plan.

(c)           On the Grant Date, the Executive shall be granted shares of restricted Common Stock having an approximate value of $977,500 (the “Restricted Stock Award”) subject to vesting or forfeiture as provided in subparagraphs (d) and (e) below. The number of shares of restricted Common Stock granted pursuant to this Agreement shall be determined on the Grant Date by dividing the dollar value above by the closing price per share of the Common Stock reported on the New York Stock Exchange, or such other national stock exchange on which the Common Stock may then be listed and which constitutes the principal market for the Common Stock, on March 5, 2007, then rounding to the nearest 1,000 shares.

(d)           The Option Award and the Restricted Stock Award shall vest and the Option Award shall become exercisable on March 5, 2010, if Executive is employed by the Company on such date and, at any time following the Grant Date, the average closing price for the Common Stock reported on the New York Stock Exchange, or such other national stock

1




Exhibit C

exchange on which the Common Stock may then be listed and which constitutes the principal market for the Common Stock (the “Closing Price”), shall have equaled or exceeded the then applicable Share Price Target, as defined in the following sentence, for any period of 90 consecutive trading days that begins on or following the Grant Date.  The “Share Price Target” shall be (i) $10.50 or (ii) following the declaration and payment of one or more dividends on the Common Stock, $10.50 less the aggregate per share amount of any dividends so declared and paid.  If a period of consecutive trading days occurs prior to the declaration and payment of a dividend on the Common Stock, during which the average Closing Price equals or exceeds the Share Price Target (prior to such payment of a dividend), such period of consecutive trading days shall be added to any subsequent period of consecutive trading days during which the average Closing Price equals or exceeds the then applicable Share Price Target for purposes of determining whether the requirement of 90 consecutive trading days with an average Closing Price at or above the Share Price Target has been satisfied.  In the event that there is any change in the Common Stock by reason of any stock dividend, stock split, combination of shares, or like change in the capital structure of the Company, the Share Price Target shall be appropriately adjusted at the time of such event to take into account the impact of such change in capital structure.

(e)           The Option Award and the Restricted Stock Award shall vest, and the Option Award shall become exercisable prior to March 5, 2010, under the following circumstances:

(i)            If the Executive dies, becomes Disabled, terminates his employment by reason of Termination for Good Reason, which shall be treated for all purposes of this Agreement as a termination by the Company without Cause, or is terminated by the Company without Cause, during the three year period following the Grant Date, the Restricted Stock Award and the Option Award shall fully vest, and the Option Award shall become exercisable on the date the Executive dies, becomes Disabled or is terminated by the Company without Cause, if at the time of such death, Disability, or termination by the Company without Cause, either (A) the performance conditions set forth in Section 1(d) above shall have been achieved (without regard to the Executive’s employment status with the Company on March 5, 2010), or (B) the average Closing Price for a period of 22 or more consecutive trading days during the 30 consecutive trading days immediately prior to the date of death, Disability or termination by the Company without Cause shall have equaled or exceeded the then applicable Share Price Target.  If the Executive dies, becomes Disabled or is terminated by the Company without Cause and the provisions of this subparagraph have been satisfied at the time of such event, the Restricted Stock Award and the Option Award shall fully vest, and the Option Award shall become exercisable, on the date of the Executive’s death, Disability or termination by the Company without Cause, or

(ii)           If both of the following conditions ((A) and (B)) have been satisfied prior to the third anniversary of the Grant Date, the Restricted Stock Award and the Option Award shall fully vest, and the Option Award shall become exercisable, on the date specified in the immediately following sentence: (A) the approval by a majority of the Incumbent Board (as defined below) of either

(1)           a merger, consolidation, reorganization or sale of QCII, or substantially all of its assets in which QCII is not the surviving entity and which results in all of the stockholders of QCII immediately prior to the closing

2




Exhibit C

of such transaction receiving cash, marketable securities or a combination of both in exchange for all of their shares of QCII; or

(2)           any other merger, consolidation, reorganization, sale of QCII or its assets, or a transaction in which shares of QCII or cash, or a combination of both, are issued for the acquisition of another company or assets, where the Executive is not offered the continued position of CFO of QCII, or if QCII is not the surviving company, the position of CFO of the surviving company in such transaction, with the Executive having substantially the same or greater compensation, authority, power, responsibility and duties as prior to the transaction.;

and (B) the closing and consummation of such a transaction.  Upon the closing and consummation of a transaction described in clause (A)(1) or (A)(2) (but, in the event of the closing and consummation of a transaction described in (A)(2), only if the Executive has not been offered the position of CFO on the terms described in that clause), the Restricted Stock Award and the Option Award shall fully vest, and the Option Award shall become exercisable on the date of the closing and consummation of such transaction.  If the Executive dies, becomes Disabled or is terminated by the Company without Cause after the Incumbent Board has approved such a transaction but before the closing and consummation of such transaction, and the Restricted Stock Award and the Option Award otherwise would have vested upon closing under this subparagraph (e)(ii) if the Executive had not died, become Disabled or been terminated without Cause, then the Restricted Stock Award and the Option Award shall fully vest, and the Option Award shall become exercisable, upon the closing and consummation of such transaction.

(f)            Except as otherwise provided in subparagraph (e)(ii) above, unless the termination of the Executive’s employment results in full vesting of the Option Award and Restricted Stock Award in accordance with subparagraphs (e)(i) or (ii) above, the Option Award and the Restricted Stock Award shall be immediately forfeited in the event of a termination of the Executive’s employment for any reason whatsoever, including but not limited to death, voluntary resignation, termination by the Company, or otherwise.  If not previously vested, the Option Award and the Restricted Stock Award shall be forfeited on the third anniversary of the Grant Date.

(g)           In the event that the Executive resigns from the employ of the Company (other than pursuant to a Termination for Good Reason (as defined below) or by reason of a Disability, as defined below)) prior to January 1, 2008, or is terminated by the Company for Cause (as defined below), any vested option or unexercised portion thereof granted under subparagraph (a) above may be exercised, to the extent such option would have been exercisable by the Executive on the date on which the Executive ceased to be an employee, within three months of such date, but in no event later than the date of expiration of the term of the option.  In the event of a termination of the Executive’s employment by the Company without Cause or by the Executive by reason of a Termination for Good Reason, any such vested option shall be exercisable for six (6) years following such date of termination of employment, but in no event later than the expiration of the term of the option.  In the event of termination of employment due to death or Disability of the Executive while an employee of the Company or in the event of death within not more than

3




Exhibit C

three months after the date on which the Executive ceases to be an employee, any such vested option or unexercised portion thereof may be exercised, to the extent exercisable at the date on which the Executive ceased to be an employee, by the Executive or the Executive’s personal representatives, heirs or legatees at any time prior to six (6) years after the date on which the Executive ceased to be an employee, but in no event later than the date of the expiration of the term of the option, and only to the extent that under Section 409A of the Internal Revenue Code of 1986, as amended, this extension of time to exercise would not be viewed as a deferral of compensation.

(h)           In the event of any change in corporate capitalization, such as a stock split, or a corporate transaction, such as any merger, consolidation, separation, including a spin-off, or other distribution of stock or property of QCII, any reorganization (whether or not such reorganization comes with the definition of such term in Section 368 of the Internal Revenue Code) or any partial or complete liquidation of QCII, the number and class of shares subject to options awarded in accordance with subparagraph (a) above, and the Option Price for such options under subparagraph (b) above, shall be adjusted in accordance with the provisions of the Plan to prevent dilution of the Executive’s rights.

(i)            Options or restricted shares of Common Stock granted in accordance with subparagraph (a) above may be transferred by the Executive to the Executive’s spouse, children or grandchildren (“Immediate Family Members”) or to a trust or trusts for the exclusive benefit of such Immediate Family Members or to a partnership in which such Immediate Family Members are the only partners.

(j)            The Company shall take all steps necessary or desirable to register the shares subject to the foregoing Option Award and the Restricted Stock Award under the Securities Act of 1933, as amended, on a Form S-8 or other appropriate form and to list such shares on the New York Stock Exchange.

(k)           Upon the vesting of any portion of the Restricted Stock Award or the exercise of any portion of the Option Award (other than a cashless exercise involving a same-day sale), the Company shall withhold a number of shares of Common Stock subject to such award having a value equal to the minimum amount required to be withheld under applicable federal, state and local income tax laws (collectively, “Withholding Taxes”).  The value of shares of Common Stock to be withheld shall be based on the closing price of such shares on the date the amount of Withholding Taxes is determined.

2.             Definitions.

(a)           “Cause” shall have the same definition as paragraph 3.a of Executive’s Severance Agreement, dated April 1, 2007;

(b)           “Termination for Good Reason” shall have the same definition as paragraph 3.c.1 of Executive’s Severance Agreement, dated April 1, 2007;

4




Exhibit C

(c)           “Disability” means that the Executive is disabled within the meaning of the Company’s long-term disability plan or, if there is no such plan in effect, that (i) the Executive has been substantially unable, for 120 business days within a period of 180 consecutive business days, to perform the Executive’s duties as CFO, as a result of physical or mental illness or injury, and (ii) a physician selected by the Company or its insurers, and reasonably acceptable to the Executive or the Executive’s legal representative, has determined that the Executive is disabled.  A termination of the Executive’s employment by the Company for Disability shall be communicated to the Executive by written notice, and shall be effective on the 30th day after receipt of such notice by the Executive (the “Disability Effective Time”), unless the Executive returns to full-time performance of the Executive’s duties before the Disability Effective Time.

(d)           “Incumbent Board” means individuals who at the beginning of any two consecutive year period following the Effective Date of this Agreement,  constitute the Board of Directors of QCII (“the QCII Board”) and any new director (except for a director designated by a person who has entered into an agreement with QCII to effect a transaction described elsewhere in the definition of Change in Control contained in the Equity Incentive Plan) whose election by the QCII Board or nomination for election by QCII’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved cease for any reason to constitute at least a majority of the QCII Board;

3.             Assignability, Binding Nature.  Except as otherwise provided in this Section, this Agreement shall be binding upon and inure to the benefit of the parties and their respective successors, heirs (in the case of the Executive) and assigns.  No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights or obligations may be assigned or transferred pursuant to a merger or consolidation in which the Company is not the continuing entity, or the sale or liquidation of all or substantially all of the assets of the Company, provided that the assignee or transferee is the successor to all or substantially all of the assets of the Company and such assignee or transferee assumes the liabilities, obligations and duties of the Company, as contained in this Agreement, either contractually or a matter of law.  The Company further agrees that, in the event of a merger or consolidation in which the Company is not the continuing entity or a sale of assets or liquidation as described in the preceding sentence, it shall take whatever action it legally can in order to cause the successor, assignee or transferee to expressly assume the liabilities, obligations and duties of the Company hereunder.  No rights or obligations of the Executive under this Agreement may be assigned or transferred by the Executive other than his rights with respect to options that may be transferred in accordance with subparagraph 1(i) of this Agreement.

4.             Amendment.  This Agreement may be amended or canceled only by mutual agreement of the parties in writing without the consent of any other person.  So long as the Executive lives, no person, other than the parties hereto, shall have any rights under or interest in this Agreement or the subject matter hereto except that in the event of the Executive’s Disability so as to render him incapable of such action, his legal representative may be substituted for purposes of such amendment.

5




Exhibit C

5.             Applicable Law.  The provisions of this Agreement shall be construed in accordance with the internal laws of the State of Colorado, without regard to the conflict of law provisions of any state.

6.             Severability.  The invalidity or unenforceability of any provision of this Agreement will not affect the validity or enforceability of any other provision of this Agreement, and this Agreement will be construed as if such invalid or unenforceable provision were omitted (but only to the extent such provision cannot be appropriately reformed or modified).

7.             Waiver of Breach.  No waiver by any party hereto of a breach of any provision of this Agreement by any other party, or of compliance with any condition or provision of this Agreement to be performed by such other party, will operate or be construed as a waiver of any subsequent breach by such other party or any similar or dissimilar provisions and conditions at the same or any prior or subsequent time.  The failure of any party hereto to take any action by reason of such breach will not deprive such party of the right to take action at any time while such breach continues.

8.             Notices.  Notices and all other communications provided for in this Agreement shall be in writing and shall be delivered personally or sent by registered or certified mail, return receipt requested, postage prepaid, or sent by facsimile, or prepaid overnight courier to the parties at the facsimile phone numbers or addresses set forth below (or such other addresses or facsimile numbers as shall be specified by the parties by like notice):

to the Company:

Qwest Communications International Inc.
1801 California Street, Suite 5200
Denver, Colorado 80202

Attn:  Chairman of the Compensation Committee of the Board of Directors; and

General Counsel

1801 California Street, Suite 5200
Denver, Colorado 80202
Facsimile:  (303) 383-8444

or to the Executive:

at the address and facsimile number maintained in the Company’s business records

Each party, by written notice furnished to the other party, may modify the applicable delivery address, except that notice of change of address shall be effective only upon receipt.  Such notices, demands, claims and other communications shall be deemed given in the case of delivery by overnight service with guaranteed next day delivery, the next day or the day designated for delivery; or in the case of certified or registered U.S. mail, five days after deposit in the U.S. mail; or, in the case of facsimile, the date upon which the transmitting party received confirmation of receipt by facsimile, telephone, or otherwise; provided, however, that in no event shall any such communications be deemed to be given later than the date they are actually received.

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Exhibit C

9.             Waiver of Right to Jury.  By signing this Agreement, you voluntarily, knowingly and intelligently waive any right you may have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to your employment with or termination from the Company.  The Company also hereby voluntarily, knowingly, and intelligently waives any right it might otherwise have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to your employment with or termination from the Company.

10.           Survivorship.  Upon the expiration or other termination of this Agreement, the respective rights and obligations of the parties hereto shall survive such expiration or other termination to the extent necessary to carry out the intentions of the parties under this Agreement.

11.           Entire Agreement.  Except as otherwise noted herein, this Agreement  constitutes the entire agreement between the parties concerning the subject matter hereof and supersedes all prior and contemporaneous agreements, if any, between the parties relating to the subject matter hereof.

12.           Counterparts.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

IN WITNESS WHEREOF, the Executive has hereunto set his hand, and the Company has caused this Agreement to be executed in its name and on its behalf, all on the day and year first above written.

EXECUTIVE:

 

COMPANY:

 

 

 

JOHN W. RICHARDSON

 

QWEST COMMUNICATIONS
INTERNATIONAL INC.

 

 

 

 

 

By:

 

 

 

 

 

 

Teresa Taylor

 

 

 

 

EVP — Human Resources

 

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EX-10.3 4 a07-7093_1ex10d3.htm EX-10.3

Exhibit 10.3

SEVERANCE AGREEMENT

This Severance Agreement (“Agreement”), which is effective as of April 1, 2007 (the “Effective Date”), is by and between John W. Richardson (“Executive”), who is an officer of Qwest Communications International, Inc., a Delaware corporation having its principal executive offices in Denver, Colorado or one of its subsidiaries or affiliates (“Company”) and who is employed by Qwest Services Corporation, a subsidiary of the Company, and Company and any successor thereto:

WHEREAS, the Company wishes to encourage Executive’s continued service and dedication in the performance of Executive’s duties; and

WHEREAS, in order to induce Executive to remain in the employ of the Company, and in consideration for Executive’s continued service to the Company, the Company agrees that Executive shall receive the benefits set forth in this Agreement in the event that Executive’s employment with the Company is terminated in the circumstances described herein.

Therefore, in consideration of the mutual promises set forth below, Company and Executive hereby agree as follows:

1.           TERM OF EMPLOYMENT; AT-WILL EMPLOYMENT.  This Agreement does not contain any promise or representation concerning the duration of Executive’s employment.  Executive’s employment is at-will, and may be altered or terminated by either Executive or the Company at any time, with or without cause, and with or without notice.  This at-will employment relationship may not be modified unless in a written agreement signed by Executive and either the Chief Executive Officer or the Chief Human Resources Officer.

2.           CHANGE IN CONTROL

a.             CHANGE IN CONTROL DEFINED:  For purposes of this Agreement, “Change in Control” shall have the definition currently in the Qwest Equity Incentive Plan (“Stock Plan”).

b.             STOCK OPTIONS/EQUITY:  The Board of Directors may, in its discretion, periodically grant Executive additional stock options or other awards under the Stock Plan.  Pursuant to the Board of Directors’ resolution effective September 19, 2002, upon a Change in Control, all awards granted to Executive after September 19, 2002 under the Stock Plan other than those Awards that include specific corporate, individual or share price performance goals, targets or objectives, shall immediately vest and all stock options shall remain exercisable for the full term of such option notwithstanding the terms of any stock option or restricted stock agreement to the contrary.  Awards granted to Executive after March 1, 2007 that include specific corporate, individual or share price performance goals, targets or objectives will be governed by the terms and conditions established by the Board of Directors as set forth from time to time in Executive’s Stock Option and Restricted Stock Agreements.




3.     TERMINATION.

a.             Termination for Cause.  The Company may, in its sole discretion, immediately terminate this Agreement and Executive’s employment for Cause by giving notice to Executive.  If Executive’s employment is terminated for Cause pursuant to this paragraph 3.a., Executive shall not be entitled to any severance payment or any other post-employment obligation provided under this Agreement.  Any one or more of the following events shall, for purposes of this Agreement, constitute Cause:

(1)           Commission of an act deemed by the Company in its sole discretion to be an act of dishonesty, fraud, misrepresentation or other act of moral turpitude that would reflect negatively upon Qwest or compromise the effective performance of Executive’s duties;

(2)           Unlawful conduct that would reflect negatively upon Qwest or compromise the effective performance of Executive’s duties, as determined by the Company in its sole discretion;

(3)           Conviction of (or pleading nolo contendere to) any felony or a misdemeanor involving moral turpitude;

(4)           Continued failure to substantially perform Executive’s duties to the satisfaction of the Chief Executive Officer (other than such failure resulting from Executive’s incapacity due to physical or mental illness) after the Chief Executive Officer delivers written notice to Executive specifically identifying the manner in which Executive has failed to substantially perform his or her duties and Executive has been afforded a reasonable opportunity to substantially perform his or her duties; or

(5)           A willful violation of the Qwest Code of Conduct or other Qwest policies that would reflect negatively upon Qwest or compromise the effective performance of Executive’s duties as determined by the Company in its sole discretion.

For two years following a Change in Control, a termination for Cause shall require the approval of the Board of Directors.

b.           Severance Payments When Termination Not By Executive.

(1)           Termination without Cause by Company. The parties agree that the Company may terminate Executive’s employment without Cause.  Except under circumstances described in subparagraph 3.b(2) below, if Company terminates Executive’s employment without Cause, and Executive signs a complete waiver and release of claims against Qwest acceptable to Company in the form attached hereto as Attachment A (“Waiver”), then Company shall pay Executive the “Standard Severance Amount” defined below.  The Waiver includes, among other

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terms, a provision requiring Executive to pay back to Qwest any severance received by Executive if after the payments are made it is determined that, while employed by Qwest or any Qwest entity, Executive engaged in conduct constituting Cause.  The Waiver does not include a release of Qwest’s obligations, if any, to indemnify Executive under Qwest bylaws or applicable state law.  The Standard Severance Amount will equal one and one-half times Executive’s highest annual base salary in effect during the 12 months preceding the termination of Executive’s employment.  The Standard Severance Amount will be paid over an 18-month period through the Company’s regular management payroll processes.  If, at the end of the 18-month period, Executive has not breached or threatened to breach any part of this Agreement, Executive will also receive a lump-sum payment equal to one and one-half times Executive’s highest target annual bonus in effect during the 12 months preceding the termination of Executive’s employment, minus any applicable or legally-required withholdings.

(2)           Change in Control Termination.  If Company (with the required approval of the Board of Directors) terminates Executive’s employment without Cause within two years following a Change in Control, then, provided Executive signs a Waiver, as described in subparagraph 3.b.(1) above, Company shall pay Executive the Change in Control Severance Amount defined in the following sentence:  The Change in Control Severance Amount payable to Executive will equal (a) (i) three times Executive’s annual base salary in effect at the time of the termination of Executive’s employment, or, if greater, Executive’s annual base salary in effect at the time of the Change in Control, plus (ii) three times Executive’s target annual bonus in effect at the time of the termination of Executive’s employment, or, if greater, Executive’s target annual bonus in effect at the time of the Change in Control plus (b) a pro rata bonus payment for the portion of the bonus payment measurement period in which Executive was employed before the termination of Executive’s employment, calculated using individual, business unit and company performance at 100% of target.  The Change in Control Severance amount will be paid in a lump sum within 30 days of receiving the signed Waiver.

c.             Change in Control Termination for Good Reason.  Executive may terminate his or her employment for Good Reason after giving written notice to the Company within sixty (60) days after an event constituting Good Reason, (as defined in subparagraph 3.c.(1) below).  If Executive terminates Executive’s employment for Good Reason within two years following a Change in Control, then, provided Executive signs a Waiver (as defined in subparagraph 3.b.(1) above), Company shall pay Executive the Change in Control Severance Amount,

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as described in subparagraph 3.b.(2) above in a lump sum within 30 days of receiving the signed Waiver.

(1)           Termination for Good Reason Following a Change in Control.   For purposes of this subparagraph 3.c., Good Reason shall mean:

(A)                                                                              a reduction of either base salary or Executive’s target annual bonus, where the salary or annual target bonus are measured immediately prior to such reduction, as opposed to at the time of Executive’s execution of this Agreement;

(B)                                                                                a material reduction of Executive’s responsibilities, where such responsibilities are measured immediately prior to such reduction, as opposed to at the time of Executive’s execution of this Agreement;

(C)                                                                                Company’s material breach of this Agreement;

(D)                                                                               Company’s failure to obtain the agreement of any successor to honor the terms of this Agreement; or

(E)                                                                                 A requirement that Executive’s primary work location be moved to a location that is greater than thirty-five straight line miles from Executive’s primary work location immediately prior to the imposition of such requirement.

“Good Reason” shall not include any other circumstances, including but not limited to, Executive’s discharge for Cause, Executive’s resignation or retirement (other than in the circumstances set forth in (A) — (E) above), or any leave of absence.

d.             COBRA Coverage.  If Executive’s employment is terminated pursuant to subparagraph 3.b. or 3.c. above, Executive may be eligible for Qwest-subsidized COBRA for a period of 18 months (unless Executive becomes ineligible for or forfeits severance benefits pursuant to the terms of this Agreement) following the Executive’s election of COBRA health care continuation coverage (generally beginning as of the first day of the first month following the month in which Executive is designated as terminated on the Qwest payroll system) on the same basis as for active employees under the group medical plan.  This provision shall not extend the period for which any Executive is eligible for COBRA continuation coverage.

4.             SPECIAL TAX PROVISION.

a.             Anything in this Agreement to the contrary notwithstanding, in the event that the Executive receives any amount or benefit (collectively, the “Covered

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Payments”) (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any person whose actions result in a change of ownership or effective control covered by Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) or any person affiliated with the Company or such person) that is or becomes subject to the excise tax imposed by or under Section 4999 of the Code (or any similar tax that may hereafter be imposed) and/or any interest or penalties with respect to such excise tax (such excise tax, together with such interest and penalties, is hereinafter collectively referred to as the “Excise Tax”) by reason of the application of Section 280G(b)(2) of the Code, the Company shall pay to the Executive an additional amount (the “Tax Reimbursement Payment”) such that after payment by the Executive of all taxes (including, without limitation, any interest or penalties and any Excise Tax imposed on or attributable to the Tax Reimbursement Payment itself), the Executive retains an amount of the Tax Reimbursement Payment equal to the sum of (i) the amount of the Excise Tax imposed upon the Covered Payments, and (ii) without duplication, an amount equal to the product of (A) any deductions disallowed for federal, state or local income tax purposes because of the inclusion of the Tax Reimbursement Payment in Executive’s adjusted gross income, and (B) the highest applicable marginal rate of federal, state or local income taxation, respectively, for the calendar year in which the Tax Reimbursement Payment is made or is to be made.  The intent of this paragraph 4 is that after the Executive pays federal, state and local income taxes and any payroll taxes, the Executive will be in the same position as if the Executive were not subject to the Excise Tax under Section 4999 of the Code and did not receive the extra payments pursuant to this paragraph 4, and this paragraph 4 shall be interpreted accordingly.

b.             Except as otherwise provided in subparagraph 4(a), for purposes of determining whether any of the Covered Payments will be subject to the Excise Tax and the amount of such Excise Tax, such Covered Payments will be treated as “parachute payments” (within the meaning of Section 280G(b)(2) of the Code) and such payments in excess of the Code Section 280(G)(b)(3) “base amount” shall be treated as subject to the Excise Tax, unless, and except to the extent that, the Company’s independent certified public accountants or legal counsel (reasonably acceptable to the Executive) appointed by such public accountants (or, if the public accountants decline such appointment and decline appointing such legal counsel, such independent certified public accountants as promptly mutually agreed on in good faith by the Company and the Executive) (the “Accountant”), deliver a written opinion to the Executive, reasonably satisfactory to the Executive’s legal counsel, that, in the event such reporting position is contested by the Internal Revenue Service, there will be a more likely than not chance of success with respect to a claim that the Covered Payments (in whole or in part) do not constitute “parachute payments,” represent reasonable compensation for services actually rendered (within the meaning of Section 280G(b)(4) of the Code) in excess of the “base amount” allocable to such reasonable compensation, or such “parachute payments” are otherwise not subject to such Excise Tax (with appropriate legal authority, detailed analysis and explanation provided therein by the Accountant); and the value of any Covered Payments which are non-cash benefits or deferred payments

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or benefits shall be determined by the Accountant in accordance with the principles of Section 280G of the Code.

c.             For purposes of determining the amount of the Tax Reimbursement Payment, the Executive shall be deemed to pay federal, state and/or local income taxes at the highest applicable marginal rate of income taxation for the calendar year in which the Tax Reimbursement Payment is made or is to be made, and to have otherwise allowable deductions for federal, state and local income tax purposes at least equal to those disallowed due to the including of the Tax Reimbursement Payment in the Executive’s adjusted gross income.

d.             (1)           (A)          In the event that prior to the time the Executive has filed any of the Executive’s tax returns for a calendar year in which Covered Payments are made, the Accountant determines, for any reason whatsoever, the correct amount of the Tax Reimbursement Payment to be less than the amount determined at the time the Tax Reimbursement Payment was made, the Executive shall repay to the Company, at the time that the amount of such reduction in the Tax Reimbursement Payment is determined by the Accountant, the portion of the prior Tax Reimbursement Payment attributable to the Excise Tax and federal, state and local income taxes imposed on the portion of the Tax Reimbursement Payment being repaid by the Executive, using the assumptions and methodology utilized to calculate the Tax Reimbursement Payment (unless manifestly erroneous), plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code.

(B)           In the event that the determination set forth in (A) above is made by the Accountant after the filing by the Executive of any of the Executive’s tax returns for a calendar year in which Covered Payments are made, the Executive shall file at the request of the Company an amended tax return in accordance with the Accountant’s determination, but no portion of the Tax Reimbursement Payment shall be required to be refunded to the Company until actual refund or credit of such portion has been made to the Executive, and interest payable to the Company shall not exceed the interest received or credited to the Executive by such tax authority for the period it held such portion (less any tax the Executive must pay on such interest and which the Executive is unable to deduct as a result of payment of the refund).

(C)           In the event that the Executive receives a refund pursuant to (B) above and repays such amount to the Company, the Executive shall thereafter file for any refunds or credits that may be due to Executive by reason of the repayments to the Company.  The Executive and the Company shall mutually agree upon the course of action, if any, to be pursued (which shall be at the expense of the Company) if the Executive’s claim for such refund or credit is denied.

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(2)           In the event that the Excise Tax is later determined by the Accountant or the Internal Revenue Service to exceed the amount taken into account hereunder at the time a Tax Reimbursement Payment was made (including by reason of any payment the existence or amount of which could not be determined at the time of the earlier Tax Reimbursement Payment), the Company shall make an additional Tax Reimbursement Payment in respect of such excess (plus any interest or penalties payable with respect to such excess) once the amount of such excess is finally determined.

(3)           In the event of any controversy with the Internal Revenue Service (or other taxing authority) under this paragraph 4, subject to the second sentence of subparagraph (1)(C) above, Executive shall permit the Company to control issues related to this paragraph 4 (at its expense), provided that such issues do not potentially materially adversely affect the Executive, but the Executive shall control any other issues.  In the event the issues are interrelated, the Executive and the Company shall in good faith cooperate so as not to jeopardize resolution of either issue.  In the event of any conference with any taxing authority as to the Excise Tax or associated income taxes, the Executive shall permit the representative of the Company to accompany the Executive, and the Executive and his or her representative shall cooperate with the Company and its representative.

(4)           With regard to any initial filing for a refund or any other action required pursuant to this paragraph 4 (other than by mutual agreement) or, if not required, agreed to by the Company and the Executive, the Executive shall cooperate fully with the Company, provided that the foregoing shall not apply to actions that are provided herein to be at the Executive’s sole discretion.

e.             The Tax Reimbursement Payment, or any portion thereof, payable by the Company shall be paid not later than the fifth day following the determination by the Accountant, and any payment made after such fifth day shall bear interest at the rate provided in Code Section 1274(b)(2)(B) to the extent and for the period after such fifth day that Executive has an obligation to make payment or estimated payment of the Excise Tax.  The Company shall use its best efforts to cause the Accountant to deliver promptly the initial determination required hereunder with respect to Covered Payments paid or payable in any calendar year; if the Accountant’s determination is not delivered within ninety (90) days after Covered Payments are paid or distributed, the Company shall pay the Executive the Tax Reimbursement Payment set forth in an opinion from counsel recognized as knowledgeable in the relevant areas selected by Executive, and reasonably acceptable to the Company, within five days after delivery of such opinion.  The Company may withhold from the Tax Reimbursement Payment and deposit into applicable taxing authorities such amounts as they are required to withhold by applicable law.  To the extent that the Executive is required to pay estimated or other taxes on amounts received by the Executive beyond any withheld amounts, the Executive shall promptly make such payments.  The amount of such payment shall be

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subject to later adjustment in accordance with the determination of the Accountant as provided herein.

f.              The Company shall be responsible for (i) all charges of the Accountant, (ii) if subparagraph (e) is applicable, the reasonable charges for the opinion given by the Executive’s legal counsel, and (iii) all reasonable charges in connection with the preparation and filing of any amended tax returns on behalf of the Executive required by the Company, required hereunder, or required by applicable law.  The Company shall gross-up for tax purposes any income to the Executive arising pursuant to this subparagraph (f) so that the economic effect to the Executive is the same as if the benefits were provided on a non-taxable basis.

The Executive and the Company shall mutually agree on and promulgate further guidelines in accordance with this paragraph 4 to the extent that any are necessary to effect the reversal of excessive or shortfall Tax Reimbursement Payments.  The foregoing shall not in any way be inconsistent with subparagraph 4(d)(1)(C).

5.             OFFSET.  To the extent permitted by law, any severance benefits received under this Agreement may be reduced by the amount(s) of any outstanding monetary debts Executive owes to Qwest.  Such debts will be treated as satisfied to the extent of the withheld payments.

It is the express intent of Qwest that the monies received under this Agreement be a set-off against amounts to which you are entitled under any applicable state unemployment statute.

6.             NONDISCLOSURE.  Executive will not disclose outside of Qwest or to any person within Qwest who does not have a legitimate business need to know, any Confidential Information (as defined below) during Executive’s employment with the Company or any other Qwest entity.  Executive will not disclose to anyone or make any use of any Confidential Information of Qwest after Executive’s employment with Qwest ends for any reason, except as required by law after timely notice is given by Executive to Qwest.  This agreement not to disclose or use Confidential Information means, among other things, that Executive, for a period of 18 months beginning on the effective date of the termination of Executive’s employment with the Company or any other Qwest entity for any reason, may not take or perform a job whose responsibilities would likely lead Executive to disclose or use Confidential Information.  Executive acknowledges and agrees that the assumption and performance of such responsibilities, in that situation, would likely result in the disclosure or use of Confidential Information and would likely result in irreparable injury to Qwest.  Moreover, during Executive’s employment with Qwest, Executive shall not disclose or use for the benefit of Qwest, Executive or any other person or entity any confidential or trade secret information belonging to any former employer or other person or entity to which Executive owes a duty of confidence or nondisclosure of such information.  If a court determines that this provision is too broad, Executive and Company agree that the court shall modify the provision to the extent (but not more than is) necessary to make the

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provision enforceable. “Confidential Information” is any oral or written information not generally known outside of Qwest, including without limitation, trade secrets, intellectual property, software and documentation, customer information (including, without limitation, customer lists), company policies, practices and codes of conduct, internal analyses, analyses of competitive products, strategies, merger and acquisition plans, marketing plans, corporate financial information, information related to negotiations with third parties, information protected by Qwest’s privileges (such as the attorney-client privilege), internal audit reports, contracts and sales proposals, training materials, employment and personnel records, performance evaluations, and other sensitive information.  This agreement does not relieve Executive of any obligations Executive has to Qwest under law. Nothing in this agreement shall limit, restrict, preclude or influence Executive’s testimony in any way or cause Executive not to provide truthful testimony or information in any manner or in response to any inquiry by a governmental official.

7.             NONCOMPETE.  In light of Executive’s senior level position with Qwest, an international corporation engaged in a highly competitive business environment, for a period of 18 months beginning on the effective date of the termination of Executive’s employment with the Company or any other Qwest entity, regardless of the reason for the termination and regardless of the party bringing about the termination, Executive agrees not to work for, own more than 2% of the common stock of, advise, represent or assist in any other way any person or entity that competes with, or intends to compete with the Company or any other Qwest entity with respect to any product sold or service performed by the Company or any other Qwest entity in any state or country in which the Company or any other Qwest entity sells such products or performs such services.  If a court determines that this provision is too broad, Executive and Company agree that the court should modify the provision to the extent (but not more than is) necessary to make the provision enforceable.

8.             NONSOLICITATION/NO-HIRE.  For a period of one year beginning on the effective date of the termination of Executive’s employment with the Company or any other Qwest entity, regardless of the reason for the termination and regardless of the party bringing about the termination, Executive agrees not to induce any employee of Qwest to leave Qwest’s employment.  This agreement means, among other things, that Executive may not have any part in hiring anyone who is a Qwest employee, even if Executive is contacted by the Qwest employee first.  For these purposes, employees of Qwest shall include all persons who are employed by the Company or any other Qwest entity at the time Executive violates this paragraph 8 or were employed by the Company or any other Qwest entity at any time during the six months preceding such violation.  If a court determines that this provision is too broad, Executive and Company agree that the court should modify the provision to the extent (but not more than is) necessary to make the provision enforceable.

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9.             REMEDIES FOR VIOLATION OF PARAGRAPHS  6, 7, OR 8.   The Executive agrees that it would be difficult to measure any damages caused to Qwest which might result from any breach by the Executive of the promises set forth in paragraphs 6, 7, and 8, and that in any event money damages would be an inadequate remedy for any such breach.  Accordingly, subject to paragraph 10, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of this Agreement, Qwest or the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other appropriate equitable relief to restrain any such breach without showing or proving any actual damage to Qwest.

10.             WAIVER OF RIGHT TO JURY.  By signing this Agreement, Executive voluntarily, knowingly and intelligently waives any right he or she may have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to Executive’s employment with or termination from the Company.  The Company also hereby voluntarily, knowingly, and intelligently waives any right it might otherwise have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to Executive’s employment with or termination from the Company.

11.          COOPERATION AND REIMBURSEMENT.  Executive agrees, both during Executive’s employment and following the termination of Executive’s employment, to cooperate reasonably with the Company or any other Qwest entity in connection with any dispute, lawsuit, arbitration, or any internal or external investigation involving Qwest or any of their predecessors (a “Proceeding”) with respect to which Qwest believes in good faith that Executive may possess relevant information.  In that event, upon reasonable notice and at reasonable times, and for reasonable periods, Executive agrees to make himself or herself available for interviews, witness preparation sessions, and appearances in connection with any Proceeding (including, but not limited to, appearances at depositions, hearings and trials). Recognizing that upon Executive’s separation from Company, participating in interviews or witness preparation sessions may be a burden, Company agrees to reimburse Executive for the time Executive spends involved in interviews and witness preparation sessions requested by Qwest at a rate equal to Executive’s final base salary, computed on an hourly basis (assuming a 40 hour work week), for such time actually spent in such interviews or witness preparation sessions.  In addition, Company will reimburse Executive for reasonable expenses Executive incurs in connection with such interviews and witness preparation sessions.  Company will not be obligated to reimburse Executive for lost wages, lost opportunities, or other financial consequences of such cooperation, or to make any other payment to Executive other than the payments by Company referred to in the two previous sentences of this paragraph of this Agreement; provided, however, nothing in this paragraph 11 shall impair or limit any rights or entitlement Executive may have to indemnification and director’s and officer’s liability insurance coverage.  The parties further agree that Company will not, and will not be obligated to, reimburse Executive for any time spent testifying in any Proceeding

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(including, but not limited to, appearances at depositions, hearings and trials), although Company will reimburse reasonable expenses for such appearances, as provided above.  Nothing in this Agreement shall limit, restrict, preclude, require or influence Executive’s testimony in any Proceeding or cause Executive not to provide truthful testimony or information in any matter or in response to any inquiry by a government official or representative.  Company’s obligation to reimburse Executive as described above is conditional upon Executive providing, at all times, information that he objectively, reasonably and in good faith believes to be truthful in connection with any Proceeding.

12.          INDEMNIFICATION.  Both during Executive’s employment and after the termination of Executive’s employment for any reason, Company, or any subsidiary or successor of Company of which Executive is an officer or member of the board of directors, shall indemnify Executive to the fullest extent required or permitted by its Bylaws and applicable law.

13.          SUCCESSORS AND ASSIGNS.  This Agreement is intended to bind and inure to the benefit of and be enforceable by Executive, Executive’s assigns, the Company, any other Qwest entity, and their successors and assigns.

14.          CHOICE OF LAW.  All questions concerning the construction, validity and interpretation of this Agreement shall be governed by the internal law, and not the law of conflicts, of the State of Colorado.

15.          SEVERABILITY.  If one or more terms, provisions or parts of this Agreement are found by a court or arbitrator to be invalid, illegal, or incapable of being enforced by any rule of law or public policy, the terms, provisions or parts shall be modified to the extent (but not more than is) necessary to make the provision enforceable.  Additionally, all other terms, provisions and parts of this Agreement shall nevertheless remain in full force and effect.

16.          COMPLETE AGREEMENT.  This Agreement contains the entire understanding of the parties with respect to the matters addressed in this Agreement, and supersedes all prior representations, understandings and agreements of the parties with respect to the matters addressed in this Agreement, including, but not limited to, any and all prior agreements for the payment of severance benefits.  The parties acknowledge that no promises or representations have been made to induce Company or Executive to sign this Agreement other than as expressly set forth in this Agreement, and that each party has signed this Agreement as a free and voluntary act.  No term or provision of this Agreement may be modified or extinguished, in whole or in part, except by a writing which is dated and signed by both Executive and the Chief Executive Officer of Company and approved by the Board Of Directors.

17.          CONSTRUCTION; REPRESENTATION.  In any interpretation of this Agreement, any ambiguities shall not be construed against any party on the basis that the party was the drafter.  Executive represents that Executive is knowledgeable and

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sophisticated as to business matters, including the subject matter of this Agreement, that he or she has read this Agreement and that he understands its terms.  Executive acknowledges that, prior to assenting to the terms of this Agreement, Executive has been encouraged to, and has been given a reasonable amount of time to review it, to consult with counsel of Executive’s choice, and to negotiate at arm’s-length with the Company as to its contents.  Executive and Company agree that the language used in this Agreement is the language chosen by the parties to express their mutual intent, and that they have entered into this Agreement freely and voluntarily and without pressure or coercion from anyone.

18.          CONDITIONAL REPAYMENT OF PAYMENTS AND BENEFITS.  If Executive receives benefits under Paragraph 3.b.(1) above, and, within two years following Executive’s termination of employment, Company determines that during Executive’s employment with Qwest, Executive engaged in conduct that would have constituted “Cause” for termination (as defined in 3.a. above), regardless of (i) when during Executive’s employment with Qwest such conduct occurred, (ii) when Qwest knew or learns of such conduct or should have known of such conduct, or (iii) what Qwest now knows or should have known about Executive’s conduct, then Company shall provide to Executive (or, if applicable, Executive’s estate or beneficiary) written notification of such determination, which written notification shall expressly set forth the basis for Company’s determination in reasonable detail.  After Company provides this written notification to Executive, it may stop or withhold any payments which have not been made under this Agreement.  If Executive disputes that such Cause exists or existed, Executive and his or her counsel shall make a presentation to the Company to request that Company withdraw such determination.  If the matter is not settled or resolved after Executive’s presentation to the Company, either party may commence an action in a court of competent jurisdiction, subject to the waiver of any right to jury trial in Paragraph 10 above.  In addition, if Executive breaches Executive’s obligations under the Nondisclosure or Noncompete provisions of this Agreement, Company may stop or withhold any payments which have not been made under this Agreement.

If a court finds that Cause exists or existed or that Executive has breached Executive’s obligations under the Nondisclosure (Paragraph 6) or Noncompete (Paragraph 7) provisions of this Agreement, or if Executive does not timely commence an action disputing Company’s Cause determination, Executive shall make prompt repayment to Company of the cash payments provided in Section 3 of this Agreement and other benefits received by Executive pursuant to this Agreement (including, but not limited to, the value of any discounted COBRA coverage).  Consistent with applicable law, any repayments shall include an interest factor equal to the applicable federal short term interest rate pursuant to Internal Revenue Code section 1274.  Interest shall begin to accrue on the 31st day after Executive (or, if applicable, Executive’s estate or beneficiary) received Company’s written notification of its determination that such Cause exists or existed, and shall continue to accrue until complete repayment is made to Company.  If Company notifies Executive (or, if applicable, Executive’s estate or beneficiary) in writing of the determination that Cause for termination exists prior to

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having made the payment required pursuant to Section 3 of this Agreement, such payment shall not be made unless the Company withdraws its determination, if the arbitrator determines that Cause did not exist, or if the parties agree otherwise.

19.          RE-EMPLOYMENT.  Executive agrees that if at any time during Executive’s severance period Executive accepts employment with Qwest Communications International, Inc., Qwest Services Corporation, any of their wholly-owned subsidiaries or any successor(s) thereto, all severance benefits to which he or she is entitled for the remainder of the severance period shall cease effective the date Executive accepts the position.

20.          WAIVER OF BREACH.  The waiver by either Company or Executive of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any prior or subsequent breach by either party.

21.          HEADINGS.  The headings contained in this Agreement are for convenience only, do not constitute part of the Agreement and shall not limit, be used to interpret or otherwise affect in any way the provisions of the Agreement.

22.          NOTICES.  Any notices provided hereunder must be in writing and shall be deemed effective on the earlier of personal delivery (including personal delivery by telecopy or private overnight carrier) or the third day after mailing by first class mail to the recipient at the address indicated below:

To the Company:                                                    Executive Vice President and
Chief Human Resources Officer
Qwest Communications International, Inc.
1801 California Street
Denver, CO 80202

To Executive:                                                                        John W. Richardson
4550 Cherry Creek South Drive
Apartment 703
Glendale, CO  80246

With a copy to:                                                                                                               

or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.

23.          COMPLIANCE WITH SECTION 409A OF THE CODE.  Notwithstanding any other provision of this Agreement, in the event that any payment or the provision of any benefit provided under this Agreement constitutes a “deferred compensation plan” within the meaning of Section 409A of the Code and any related guidance or regulations

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(including proposed regulations) (collectively “Section 409A”), the following provisions shall apply:

a.             Separation from Service.  No payment or provision of benefits shall be made upon a “termination of employment” unless such termination of employment also constitutes a “separation from service” under Section 409A (“Separation from Service”).

b.             6-Month Delay.  If Executive is a “specified employee” within the meaning of Section 409A, then the payment or provision of benefits shall be made as set forth below; provided, however, no such payment or provision shall be made before the date that is six months after Executive’s Separation from Service (or, if earlier, the date of Executive’s death) (the “6-Month Delay”).  The determination of whether Executive is a “specified employee” shall be made in accordance with Section 409A using an identification date of December 31.

(1)           Payment of Cash Benefits.  Any cash payment hereunder to Executive, including, but not limited to the Standard Severance Amount, shall be paid according to the following provisions:

(A)          the Standard Severance Amount shall be paid out as follows:

(i)            a lump sum payment equal to one-third of the Standard Severance Amount will be paid as soon as administratively practicable following the 6-Month Delay;

(ii)           the remainder of the Standard Severance Amount will be paid, in substantially equal installments, through the Company’s regular management payroll processes for 12 months beginning on the first regular payroll period following the payroll period in which the payment under paragraph 23(b)(1)(A)(i) is made; and

(iii)          if, at the end of the 12-month period following termination, Executive has not breached or threatened to breach any part of this Agreement, Executive also will receive a lump-sum payment equal to one and one half times Executive’s highest annual target bonus in effect during the 12 months preceding the termination of Executive’s employment, minus any applicable or legally-required withholdings.

(B)           Any other 409A arrangement which provide cash benefits that are payable before the 6-Month Delay shall be paid as follows:

(i)            a lump sum payment equal to one-third of the total cash benefit will be paid as soon as administratively feasible following the Six-Month Delay; and

(ii)           the remainder of the total cash benefit will be paid, in equal installments, through the Company’s regular management payroll processes for 12 months beginning on the first regular payroll period the payroll period in which the payment under paragraph 23(b)(1)(B)(i) is made.

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(2)           Payment of Noncash Benefits.  The payment for any noncash benefits, including, but not limited to, any applicable premium payments related to such noncash benefits, shall be made by Executive during the 6-Month Delay, and Executive shall be reimbursed by the Company for such payments as soon as administratively practicable following the expiration of the Six Month Delay.  Executive shall be solely liable for all timely payments and elections as may be necessary to retain such noncash benefits, and the Company shall not be liable to Executive, any dependent and/or qualified beneficiary for any loss of any kind, including the loss of noncash benefits relating to Executive’s failure to timely make any payments or elections as required under the applicable benefit plan or this paragraph 23.  By signing this Agreement, Executive acknowledges this provision and the ramifications, including the potential loss of benefits, of the failure to comply with this provision.

c.             Modification.  The payment or provision of benefits under any other arrangement under this Agreement that is subject to Section 409A may be modified or amended in order to comply with Section 409A.

IN WITNESS WHEREOF, the parties now execute this Agreement, to be effective as of the Effective Date.

QWEST COMMUNICATIONS INTERNATIONAL INC.:

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

Teresa A. Taylor

 

 

 

Executive Vice President and

 

 

 

Chief Human Resources Officer

 

 

 

 

 

 

 

Executive:

 

 

 

 

 

 

 

 

 

By:

 

 

 

 

 

John W. Richardson

 

 

 

EVP — Chief Financial Officer

 

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ATTACHMENT A

WAIVER AND RELEASE AGREEMENT

1.                                       Release and Waiver of Claims and Covenant Not to Sue.

As a free and voluntary act, you hereby release and discharge and covenant not to sue, Qwest Communications International Inc., any present or former subsidiary or affiliated Company, any predecessor (including U S WEST and all its affiliates) or successor, and the directors, officers, employees, shareholders and agents of any or all of them, (hereinafter “Qwest”), from any and all debts, obligations, claims, liability, damages, punitive damages, demands, judgments and/or causes of action of any kind whatsoever, including specifically but not exclusively:

·              all claims relating to or arising out of your employment with Qwest and/or U S WEST;

·              all claims arising out of your Severance Agreement (except for claims arising under this Agreement or from Qwest’s failure to pay any amount due to you under the terms of the Severance Agreement after the date of this Agreement);

·              all claims relating to or arising from any claimed breach of an alleged oral or written employment contract, quasi-contracts, implied contracts, payment for services, wages or salary and/or promissory estoppel;

·              any alleged tort claims;

·              any claims for libel and/or slander;

·              all claims relating to purported employment discrimination or civil rights violations or arising under any federal or state employment statutes including, without limitation, claims under Title VII of the Civil Rights Act of 1964, as amended; claims under the Civil Rights Act of 1991; claims under the Age Discrimination in Employment Act of 1967, as amended; claims under 42 U.S.C. § 1981, § 1981a, § 1983, § 1985, or § 1988; claims under the Family and Medical Leave Act of 1993; claims under the Americans with Disabilities Act of 1990, as amended; claims under the Rehabilitation Act of 1973; claims under the Fair Labor Standards Act of 1938, as amended; claims under the Worker Adjustment and Retraining Notification Act; claims under the Colorado Anti-Discrimination Act; and claims under the Employee Retirement Income Security Act of 1974, as amended; or any other applicable federal, state or local statute or ordinance, including claims for attorneys’ fees;

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·              any claim for any disability payments under the Qwest Disability Plan or Qwest Pension Plan after your termination date.  The reference to the Qwest Disability Plan and Qwest Pension Plan includes any successor or predecessor of such plans such as the former Sickness and Accident Disability Plan or Long Term Disability Plan of any Qwest or U S WEST entity and all benefits thereunder;

·              any and all claims which you might have or assert against Qwest (1) by reason of your employment with and/or termination of employment from Qwest and all circumstances related thereto; or (2) by reason of any other matter, cause, or dispute  whatsoever between you and Qwest which arose prior to the effective date of this Agreement.  This Agreement excludes any claims you may make under (1) the applicable state unemployment compensation laws, (2) applicable workers’ compensation statutes, (3) for indemnification to the extent permitted or required by the bylaws of a Qwest company or applicable state law; and (4) claims which arise after the execution of this Agreement;

·              your right to seek individual relief on your own behalf for any charges of discrimination filed with any federal, state or local agency, pending or otherwise, arising from or related to your employment or termination of employment with Qwest.

2.                                       Waiver of Right to Jury.  By signing this Agreement, you voluntarily, knowingly and intelligently waive any right you may have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to your employment with or termination from the Company.  The Company also hereby voluntarily, knowingly, and intelligently waives any right it might otherwise have to a jury trial for all claims arising out of or relating to this Agreement and any other claim arising out of or relating to your employment with or termination from the Company.

3.                                       You agree that the monies and benefits described above are considerations to which you would not otherwise be entitled unless you sign this Agreement, and that these considerations constitute payment in exchange for signing this Agreement.

4.                                       If one or more terms, provisions or parts of this Agreement are found by a court or arbitrator to be invalid, illegal, or incapable of being enforced by any rule of law or public policy, the terms, provisions or parts shall be modified to the extent (but not more than is) necessary to make the provision enforceable.  You agree that if any portion of this Agreement is found to be unenforceable or prohibited, the remainder of this Agreement shall remain in full force and effect, unless the

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material terms and intent of this Agreement are materially changed by the fact that a portion of this Agreement is unenforceable or prohibited.

5.                                       You agree that this Agreement shall not be admissible in any proceeding as evidence of any improper conduct by Qwest against you and Qwest denies that it has taken any improper action against you in violation of any federal, state, or local law or common law principle.

6.                                       You acknowledge that no promises or representations have been made to induce you to sign this Agreement other than as expressly set forth herein and that you have signed this Agreement as a free and voluntary act.

7.                                 You acknowledge that this release means, in part, that you give up all your rights to damages and/or money based upon any claims against Qwest of age discrimination.  You do not waive your rights to make claims for damages and/or money which arise after the date this Agreement is signed.  Under the Age Discrimination in Employment Act, you have the right within seven days of the date you sign this Agreement to revoke your waiver of rights to claim damages and/or money.  In the event you revoke your agreement to be obligated to the terms of this Agreement, the benefits offered herein shall be null and void, meaning you will receive no involuntary termination benefits under your Severance Agreement.  To be effective, your revocation must be in writing and delivered to Executive Vice President and Chief Human Resources Officer, Qwest Communications International, Inc. 1801 California Street, Denver, Colorado 80202, within the seven-day period.  If by mail, the revocation must be (1) postmarked within the seven-day period, (2) properly addressed, and (3) sent by certified mail, return receipt requested.

8.                                 You acknowledge that you (a) have had sufficient opportunity (not less than 45 days) to review this Waiver and Release Agreement, (b) have been encouraged to consult with and have had sufficient opportunity to consult with your attorney and financial advisor before signing this Waiver and Release Agreement, and (c) that you understand and agree to all of the terms of this Waiver and Release Agreement.

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AGREEMENT

I have read and I understand the terms of the foregoing Waiver and Release, and I hereby agree to all of the terms of the foregoing Agreement.

 

 

 

 

(Employee’s Signature)

 

(Date)

 

 

Please return all pages of this signed agreement to:

Executive Compensation
1801 California Street
23rd Floor
Denver, Colorado  80202

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