Form 8-K
8-K — Lumen Technologies, Inc.
Accession: 0000018926-26-000065
Filed: 2026-10-23
Period: 2026-10-22
CIK: 0000018926
SIC: 4813 (TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE))
Item: Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers: Compensatory Arrangements of Certain Officers
Item: Financial Statements and Exhibits
Documents
8-K — lumn-20261022.htm (Primary)
EX-10.1 (lumenexecutiveseverancepla.htm)
EX-10.2 (ceokatejohnsonarchangeofco.htm)
GRAPHIC (lumn-20261022_g1.jpg)
XML — IDEA: XBRL DOCUMENT (R1.htm)
8-K
8-K (Primary)
Filename: lumn-20261022.htm · Sequence: 1
lumn-20261022
0000018926false00000189262026-10-222026-10-220000018926us-gaap:CommonStockMember2026-10-222026-10-220000018926lumn:A6.5NotesDue2056Memberlumn:QwestCorporationMember2026-10-222026-10-220000018926lumn:A6.75NotesDue2057Memberlumn:QwestCorporationMember2026-10-222026-10-22
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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): October 22, 2026
Lumen Technologies, Inc.
(Exact name of registrant as specified in its charter)
Louisiana
001-07784
72-0651161
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification No.)
100 CenturyLink Drive
Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)
(318) 388-9000
(Telephone number, including area code)
___________________________________
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of any registrant under any of the following provisions:
☐
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered by Lumen Technologies, Inc. pursuant to Section 12(b) of the Act:
Registrant
Title of Each Class
Trading
Symbol(s)
Name of Each Exchange
on Which Registered
Lumen Technologies, Inc.
Common Stock, no-par value per share
LUMN
The Nasdaq Stock Market LLC
Qwest Corporation 6.5% Notes Due 2056 CTGG
The Nasdaq Stock Market LLC
Qwest Corporation 6.75% Notes Due 2057 CTHH
The Nasdaq Stock Market LLC
Indicate by check mark whether any registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02
Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
(e) Adoption of the Lumen Executive Severance Plan
In an effort to simplify the administration of its executive and broad-based severance programs, on October 22, 2026, Lumen Technologies, Inc. (the “Company”) amended the Lumen Executive Severance Plan (the “Prior Plan”) to remove, among others, the Company’s Chief Executive Officer, Kate Johnson, and its other named executive officers (the “Participating Officers”) as participants, renamed the Prior Plan as the “Lumen Severance Plan,” and, with the consent of each Participating Officer, terminated the individual change of control agreements previously maintained with such officers. Concurrently, the Company entered into participation agreements with each Participating Officer, providing for severance benefits under the newly adopted Lumen Executive Severance Plan (the “New Executive Severance Plan”). These changes were implemented to streamline and consolidate the administration of the Company’ severance arrangements and did not result in any material change to the severance or change in control benefits previously provided to the Participating Officers.
The New Executive Severance Plan preserves substantially the same benefits previously provided under the Prior Plan, including that upon termination of a Participating Officer’s employment without “cause,” or a resignation by the Participating Officer for “good reason,” at any time other than during the period beginning three months before, and ending 24 months after, a “change in control,” as defined in the New Executive Severance Plan (a “Non-CIC Termination”), the Participating Officer is entitled to cash severance of 52 weeks of his or her base salary, any earned but unpaid annual bonus for the prior fiscal year, his or her prorated annual target bonus for the year of termination (adjusted per the terms of the New Executive Severance Plan), a 12-month COBRA premium subsidy, and outplacement assistance.
If the Participating Officer’s termination or resignation occurs during the period beginning three months before, and ending 24 months after, a change in control (a “CIC Termination”), he or she is entitled to a cash payment equal to two times the sum of his or her current base salary and the average annual bonus earned for the three fiscal years preceding the year of termination, a prorated annual bonus for the year of termination based on actual performance and determined without regard to any effect of the change in control, any annual bonus earned but unpaid for the prior fiscal year, a 24-month COBRA premium subsidy, and outplacement assistance.
All benefits are conditioned on the Participating Officer’s execution and non-revocation of a separation and release agreement and continued compliance with all relevant restrictive covenants. Payments to the Participating Officer may become subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Excise Tax”), and will be reduced to the extent that such reduction produces a better net after-tax result for the Participating Officer, with no excise tax gross-up provided.
Amended and Restated Change of Control and Severance Agreement with Kate Johnson
Consistent with the goals of streamlining and consolidating the administration of the Company’s severance arrangements, on October 22, 2026, the Company entered into an amended and restated Change of Control and Severance Agreement with Ms. Johnson (the “Restated Johnson Agreement”), which amends and restates in its entirety the Change of Control Agreement between the Company and Ms. Johnson effective as of November 7, 2022 (the “Prior CEO Agreement”). Upon a Non-CIC Termination, Ms. Johnson is entitled to the same severance benefits as the other Participating Officers, except that her cash severance is equal to 104 weeks of her base salary plus her target annual bonus, consistent with the terms of the Prior CEO Agreement.
As was the case under the Prior CEO Agreement, upon a termination without “cause” or a resignation for “good reason” within 24 months following a change in control (or, in certain limited cases, after steps have been taken, or negotiations commenced, to effect a change in control), Ms. Johnson is entitled to a cash payment equal to 2.5 times the sum of her base salary and her target annual bonus, her prorated annual bonus for the year of termination, any annual bonus earned but unpaid for the prior fiscal year, two years of continued life insurance, disability, medical, dental, and hospitalization benefits at the Company's expense, and outplacement assistance for one year.
The Restated Johnson Agreement conforms the definition of “good reason” to the definition used in the New Executive Severance Plan and removes her non-competition covenant to comply with Washington Engrossed Substitute House Bill 1155, which comes into effect on June 30, 2027.
Ms. Johnson’s benefits are conditioned on her signing a release of claims, and payments to her may become subject to the Excise Tax and will be reduced to the extent that such reduction produces a better net after-tax result, with no excise tax gross-up provided.
The foregoing summaries are not complete and are qualified in their entirety by reference to the full text of the New Executive Severance Plan and the Restated Johnson Agreement, copies of which are filed as Exhibit 10.1 and Exhibit 10.2, respectively, to this Current Report on Form 8-K and incorporated in this Item 5.02 by reference. Any capitalized term used and not defined in this Item 5.02 has the meaning set forth in the New Executive Severance Plan or the Restated Johnson Agreement, as applicable.
Item 9.01
Financial Statements and Exhibits
(d) Exhibits. The following exhibits are filed with this Current Report on Form 8-K:
Exhibit No. Description
10.1
Lumen Executive Severance Plan, effective as of October 22, 2026.
10.2
Amended and Restated Change of Control and Severance Agreement, effective as of October 22, 2026, between Lumen Technologies, Inc. and Kate Johnson.
104 Cover page formatted as Inline XBRL and contained in Exhibit 101.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, Lumen Technologies, Inc. has duly caused this Current Report on Form 8-K to be signed on its behalf by the undersigned officer hereunto duly authorized.
LUMEN TECHNOLOGIES, INC.
Dated: October 23, 2026
By:
/s/ Jennifer Hodges
Jennifer Hodges
Executive Vice President, Chief Legal Officer
EX-10.1
EX-10.1
Filename: lumenexecutiveseverancepla.htm · Sequence: 2
Document
Exhibit 99.1
LUMEN EXECUTIVE SEVERANCE PLAN
DRAFT - Effective As Of October 22, 2026
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Exhibit 99.1
TABLE OF CONTENTS
Page
ARTICLE I PURPOSE OF THE PLAN 1
ARTICLE II DEFINITIONS 3
ARTICLE III ELIGIBILITY FOR SEVERANCE BENEFITS 11
ARTICLE IV SEVERANCE BENEFITS 12
ARTICLE V TIMING OF PAYMENT AND LIMITATION ON BENEFITS 16
ARTICLE VI RESTRICTIVE COVENANTS 19
ARTICLE VII PLAN ADMINISTRATION 22
ARTICLE VIII AMENDMENT AND TERMINATION 25
ARTICLE IX CLAIMS PROCEDURES 25
ARTICLE X MISCELLANEOUS 27
ARTICLE XI GENERAL PLAN INFORMATION 30
EXHIBIT A PARTICIPATION AGREEMENT A-1
ARTICLE I
PURPOSE OF THE PLAN
Section 1.01 Purpose of the Plan. Lumen Technologies, Inc. (“Lumen”) has established the Lumen Executive Severance Plan, effective as of October 22, 2026 (the “Plan”), to provide severance benefits for the Company’s senior executives (excluding the Company’s chief executive officer) upon a Non-CIC Termination or a CIC Termination, as each term is defined herein, who otherwise satisfy the terms and conditions of the Plan. The Plan is intended to be an unfunded “top hat” plan under Sections 201(2), 301(a)(3) and Section 401(a)(1) of ERISA.
The Plan is administered by the Plan Administrator, with benefits provided in accordance with the provisions of this Plan document.
The legal rights and obligations of any individual shall be determined solely by the provisions of the Plan, as interpreted by the Plan Administrator in the exercise of its sole and absolute discretion, including whether an individual shall be an Eligible Employee. Nothing in the Plan shall be construed to give any individual or Employee any right to continue in the employment of the Company or a Subsidiary or Affiliate of the Company.
Section 1.02 Application of the Plan. The Plan supersedes any other plan, policy, program, or arrangement, including, but not limited to, benefits payable under the Lumen Severance Plan (known as the Lumen Executive Severance Plan prior to October 22, 2026), and provides
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Exhibit 99.1
severance benefits in the event of (i) a Non-CIC Termination of an Eligible Employee and (ii) a CIC Termination of an Eligible Employee that occurs on and after October 22, 2026 (the “Effective Date”). Notwithstanding any other provision hereof, there is intended to be no duplication of severance benefits to an Eligible Employee. If an Eligible Employee has any vested rights under another severance or change in control plan, policy, arrangement or contract for severance benefits following termination of employment, the amount of such benefits an Eligible Employee becomes entitled to shall be offset against any amounts owing under the Plan.
Section 1.03 Gender and Number.
Whenever used herein, the masculine pronoun shall include the feminine and the singular shall encompass the plural, and vice versa.
ARTICLE II
DEFINITIONS
The following words and phrases, when the initial letter of the term is capitalized, will have the meanings set forth in this Article II, unless a different meaning is plainly required by the context:
“Affiliate” (and variants thereof) means a person or entity that controls, or is controlled by, or is under common control with, another specified person or entity, either directly or indirectly.
“Base Salary” means an Eligible Employee’s annual rate of base pay, as reflected in the Company’s payroll or personnel records, in effect as of the Employee’s Termination Date.
“Board” means the Board of Directors of the Company.
“Cash Severance Benefit” means the Severance Benefit paid under Section 4.01 or 4.02 of the Plan.
“Cause” means
(a)prior to a Change in Control, the Employee’s: (i) failure to substantially comply with supervisor directives; (ii) willful misconduct; (iii) conduct that violates the Company’s ethics and compliance programs and policies, including its Code of Conduct, insider trading policies, policy against harassment, discrimination and retaliation and policy against the abuse of drugs and alcohol in the workplace; (iv) conduct that is injurious to the Company’s reputation, customer relationships, employees or finances; (v) act(s) that, if proven in a court of law, would constitute a felony, (vi) act(s) of dishonesty, fraud or moral turpitude; (vii) participation in the reporting of any information by the Company to the SEC that was impacted or influenced by the Employee’s knowing or intentional fraudulent or illegal conduct; or (viii) willful action that causes a material restatement of the Company’s financials. The Plan Administrator, in its sole discretion, shall determine whether the elements of Cause have been met, including whether the
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Exhibit 99.1
facts and circumstances indicate that the Employee’s actions constitute a violation of the Company’s ethics and compliance program and/or are injurious to the Company.
(b)On or after a Change in Control, the Employee’s (i) willful breach of the covenants under Article VI of the Plan; (ii) conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving dishonesty or moral turpitude; (iii) workplace conduct resulting in the payment of civil monetary penalties or the incurrence of civil non-monetary penalties that will materially restrict or prevent the Employee from discharging the Employee’s obligations to the Company; (iv) habitual intoxication during working hours or habitual abuse of or addiction to a controlled substance; (v) material breach of the Company’s ethics and compliance programs and policies, insider trading policies, or any other Board-adopted policies applicable to management conduct; (vi) participation in the public reporting of any information contained in any report filed by the Company with the SEC that was impacted by the Employee’s knowing or intentional fraudulent or illegal conduct; or (vii) substantial, willful and repeated failure to perform duties as instructed by or on behalf of the Board in writing. The Employee’s employment shall not be deemed terminated for Cause unless the Company shall have delivered to the Employee a termination notice with a copy of a resolution adopted by the affirmative vote of not less than three-quarters of the entire Board at a meeting called partly or wholly for such purpose (after reasonable notice is provided to the Employee and the Employee has had an opportunity, with counsel, to be heard by the Board) finding that the Employee should be terminated for Cause and specifying in reasonable detail the grounds therefor. No action or inaction shall be deemed the basis for Cause unless the Employee is terminated therefor prior to the first anniversary of the date on which such action or omission is first known to the CEO.
“CEO” means the Chief Executive Officer of the Company as designated by the Board.
“Change in Control” means:
(a)the acquisition by any Person of Beneficial Ownership of 30% or more of the outstanding shares of the Company’s Common Stock, no par value per share (the “Common Stock”), or 30% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change in Control
(i)any acquisition (other than a Business Combination which constitutes a Change in Control under subsection (c) below) of Common Stock directly from the Company;
(ii)any acquisition of Common Stock by the Company or its subsidiaries;
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Exhibit 99.1
(iii)any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or
(iv)any acquisition of Common Stock by any entity pursuant to a Business Combination that does not constitute a Change in Control subsection (c) below; or
(b)individuals who, as of the Effective Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Effective Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or
(c)consummation of a reorganization, share exchange, merger or consolidation (including any such transaction involving any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”); provided, however, that in no such case shall any such transaction constitute a Change in Control if immediately following such Business Combination,
(i)the individuals and entities who were the Beneficial Owners of the Company’s outstanding Common Stock and the Company’s voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect Beneficial Ownership, respectively, of more than 50% of the then outstanding shares of Common Stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Post-Transaction Company, and
(ii)except to the extent that such ownership existed prior to the Business Combination, no Person (excluding the Post-Transaction Company and any employee benefit plan or related trust of the Company, the Post-Transaction Company or any subsidiary of either corporation) Beneficially Owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 20% or more of the combined voting power of the then outstanding voting securities of such corporation, and
(iii)at least a majority of the members of the board of directors of the Post-Transaction Company were members of the Incumbent Board at the time
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Exhibit 99.1
of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(d)approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, in the event the Plan Administrator determines any amount payable in connection with a Change in Control constitutes deferred compensation subject to Section 409A of the Code, such Change in Control must also constitute a “change in control event” within the meaning of Section 409A of the Code.
For purposes of this definition of a Change in Control:
(1)“Beneficial Owner” (and variants thereof), with respect to a security, means a Person (as defined in subsection (2) below) who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, or (ii) the power to dispose of, or direct the disposition of, the security.
(2)“Person” means a natural person or entity, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that “Person” shall not include an underwriter temporarily holding a security pursuant to an offering of the security.
“CIC Cash Severance Benefit” means an amount equal to two times the sum of the Eligible Employee’s (i) Base Salary as of the Termination Date and (ii) the average annual bonus earned for the completed three fiscal years immediately preceding the year of Termination (or, if less, the number of completed fiscal years immediately preceding the year of CIC Termination).
“CIC Good Reason Resignation” means any of the following events or conditions that occur during the Protective Period, but only if the Eligible Employee shall have provided written notice to the Company within 90 days of the initial existence or occurrence of such event or condition following a Change in Control and the Company shall have failed to cure such event or condition within 30-day Cure Period (as defined below) following receipt of such notice:
(a)Any failure of the Company to provide the Eligible Employee with a position, authority, duties and responsibilities at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 180-day period immediately preceding the Change in Control. The Eligible Employee’s position, authority, duties and responsibilities after a Change in Control shall not be considered commensurate in all material respects with the Eligible Employee’s position, authority, duties and responsibilities prior to a Change in Control unless after the Change in Control the Employee holds an equivalent position with, and exercises substantially equivalent authority, duties and responsibilities on behalf of, either the Post-Transaction Company or the Company.
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Exhibit 99.1
(b)The assignment to the Employee of any duties inconsistent in any material respect with the Employee’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities, or any other action that results in a diminution in any material respect in such position, authority, duties or responsibilities.
(c)A reduction of the Employee’s Base Salary or Targeted Bonus Opportunity in effect as of the date of the Change in Control without the Eligible Employee’s consent.
(d)Any change or action by the Company or its Affiliates that is a failure in any material respect to comply with any of the provisions of the Plan.
(e)The relocation of the Eligible Employee’s principal work location such that (i) the driving distance from the work location of the new position to the current position held immediately prior to the change in job location is more than 35 miles and (ii) the increase in commuting distance from the Employee’s current home location to the Employer’s location (comparing current position location against the new position location) is more than 35 miles. If an Eligible Employee’s current position or new position is classified as “work at home” (i.e., with no assigned office at a Company facility), then the Employee’s home address will be deemed the Employee’s work location.
Notwithstanding the foregoing, the written notice of resignation shall not constitute a CIC Good Reason Resignation if the Company fully corrects the circumstances which gave rise to the Employee’s claim that there has been a CIC Good Reason Resignation within 30 days following receipt of written notice from the Eligible Employee (the “30-day Cure Period”). If the Company does not fully correct the circumstances that gave rise to the CIC Good Reason Resignation within the 30-day Cure Period, the Eligible Employee’s resignation shall be deemed to be a CIC Good Reason Resignation as long as the Eligible Employee terminates no later than two years following the expiration of the 30-day Cure Period or the Company’s notice that it does not intend to cure, whichever is earlier. For the avoidance of doubt, reference to the Company includes a Post-Transaction Company for purposes of a CIC Good Reason Resignation.
“CIC Termination” means an Involuntary Termination or CIC Good Reason Resignation during the Protective Period.
“COBRA” means the Consolidated Omnibus Budget Reconciliation Act of 1985, as codified in Code Section 4980B and Part 6 of Title I of ERISA and as amended by subsequent legislation.
“COBRA Subsidy Period” means (a) if the Eligible Employee incurs a Non-CIC Termination, 12 months and (b) if the Eligible Employee incurs a CIC Termination, 24 months.
“Code” means the Internal Revenue Code of 1986, as amended, and regulations thereunder.
“Committee” means the Human Resources and Compensation Committee of the Board.
“Company” means Lumen Technologies, Inc. and any successor to or assignee of (whether direct or indirect, by purchase, share exchange, merger, consolidation or otherwise) all or
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Exhibit 99.1
substantially all of the assets or business of the Company that assumes the Plan by operation of law or otherwise.
“Comparable Position” means a position offered by the Company or by another entity (e.g., an entity providing services to or purchasing assets from the Company) in connection with a reduction in headcount, an outsourcing to a vendor, a reorganization impacting two or more distinct business groups, a sale of distinct business groups, or a merger or acquisition other than a Change in Control, that is not a Non-Comparable Position.
“Effective Date” means October 22, 2026.
“Eligible Employee” means an Employee who (a) is (i) a Senior Vice-President or Executive Vice-President reporting directly to the CEO, (ii) an officer of the Company, other than the CEO, designated on an annual or other periodic basis as a Section 16 Officer of the Company, or (iii) an officer of the Company, other than the CEO, designated by the Committee as a Senior Officer (as such term is defined in such Committee’s charter) and (b) has entered into a Participation Agreement with the Company. The foregoing notwithstanding, an Employee who is otherwise an “Eligible Employee” shall not be eligible for Severance Benefits under the Plan if the Employee has signed and not revoked a binding contract or is covered by the provisions of a different severance plan or is a party to an individual employee agreement with the Company (including its predecessors) or a Subsidiary or Affiliate of the Company providing for severance benefits upon the Employee’s Termination.
“Employee” means an individual who is employed by the Company or a Subsidiary or Affiliate of the Company within the United States as a full-time salaried employee and excludes any individual who is working for the Company or a Subsidiary or Affiliate of the Company through a temporary service or on a leased basis or as an independent contractor or consultant.
“Equity Plan” means the Amended and Restated 2024 Equity Incentive Plan of Lumen Technologies, Inc. or a successor equity plan.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and regulations thereunder.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Involuntary Termination” means the Termination of an Eligible Employee’s employment by the Company (or Post-Transaction Company) for any reason other than Cause, Permanent Disability or death.
“Non-CIC Cash Severance Benefit” means an amount equal to 52 weeks of Total Targeted Cash Compensation.
“Non-CIC Good Reason Resignation” means that an Eligible Employee’s written notice to the Company, delivered within seven (7) calendar days of the offer to the Employee of a Non-Comparable Position, declining such offer and resigning employment as provided herein. The written notice of resignation shall not constitute a Non-CIC Good Reason Resignation if the
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Exhibit 99.1
Company fully corrects the event or circumstances giving rise to the Non-CIC Good Reason Resignation within the 30-day Cure Period (as defined in the definition of “CIC Good Reason Resignation”). If the Company does not fully correct the event or circumstances that gave rise to the Non-CIC Good Reason Resignation within the 30-day Cure Period, the Eligible Employee’s resignation shall be deemed to be a Non-CIC Good Reason Resignation as long as the Eligible Employee terminates no later than two years following the expiration of the 30-day Cure Period or the Company’s notice that it does not intend to cure, whichever is earlier.
“Non-CIC Termination” means an Involuntary Termination prior to a Change in Control or a Non-CIC Good Reason Resignation.
“Non-Comparable Position” means a position offered by the Company or by another entity (e.g., one providing services to or purchasing assets from the Company) in connection with a reduction in headcount, an outsourcing to a vendor, a reorganization impacting two or more distinct business groups, a sale of distinct business groups, or a merger or acquisition other than a Change in Control, and either of the following clause (a) or (b) applies:
(a)a relocation of the Eligible Employee’s principal work location such that (i) the driving distance from the work location of the new position to the current position held immediately prior to the change in job location is more than 35 miles and (ii) the increase in commuting distance from the Employee’s current home location to the Employee’s work location (comparing current position location against the new position location) is more than 35 miles. If an Eligible Employee’s current position or new position is classified as “work at home” (i.e., with no assigned office at a Company facility), then the Employee’s home address will be deemed the Employee’s work location.
(b)Total Targeted Cash Compensation is less than 90% of the Eligible Employee’s current Total Targeted Cash Compensation.
“Participation Agreement” means the written agreement and consent of an Eligible Employee to participate in the Plan, in the form attached to the Plan as Exhibit A, which includes the Eligible Employee’s acknowledgement of the Employee’s restrictive covenants, as applicable, with which all Eligible Employees must abide to be eligible to receive Severance Benefits under the Plan, which must be signed and returned to the Plan Administrator within thirty (30) days of receipt of the agreement.
“Permanent Disability” means a condition that would entitle the Eligible Employee to receive benefits under the long-term disability plan or policy applicable to the Company’s officers at the time because the Eligible Employee is totally disabled or partially disabled, as such terms are defined in the plan or policy then in effect. If the Company has no long-term disability plan in effect, a Permanent Disability shall occur if (i) the Eligible Employee is rendered incapable because of physical or mental illness of satisfactorily discharging the Employee’s duties and responsibilities to the Company for a period of 90 consecutive days, (ii) a duly qualified physician chosen by the Company and acceptable to the Employee or the Employee’s legal representatives so certifies in writing, and (iii) the Board determines that the Eligible Employee has become disabled.
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Exhibit 99.1
“Plan” means the Lumen Executive Severance Plan, as set forth herein and as it may be amended from time to time.
“Plan Administrator” means the Committee or another duly constituted committee of members of the Board, or any person to whom the Plan Administrator has delegated any authority or responsibility with respect to the Plan pursuant to Article VII of the Plan, but only to the extent of such delegation.
“Post-Transaction Company” means, unless a Change in Control results from a Business Combination (as defined in subsection (c) of the Change in Control definition), the Company after consummation of a Change in Control. If a Change in Control results from a Business Combination, then Post-Transaction Company means the corporation or other entity resulting from the Business Combination unless, as a result of such Business Combination, an ultimate parent entity controls such resulting entity, the Company or all or substantially all of the Company’s assets either directly or indirectly, in which case Post-Transaction Company means such ultimate parent entity.
“Protective Period” means the period commencing 3 months prior to the consummation date of a Change in Control and ending on the 24-month anniversary of the consummation date of the Change in Control.
“SEC” means the U.S. Securities and Exchange Commission.
“Separation and Release Agreement” means the agreement, in the form approved by the Company, in its sole discretion, required to be executed (without revocation) by the Eligible Employee as a condition to receive Non-CIC Termination Severance Benefits under the Plan, which includes among other terms a general release of the Company, its Affiliates and Subsidiaries (including the Subsidiary or Affiliate that employs the Employee), and other released parties from claims or causes of action through the date of signing and, as applicable, confidentiality, non-solicitation and other restrictive covenants. For the avoidance of doubt, the Separation and Release Agreement is required to receive CIC Termination Severance Benefits.
“Severance Benefits” means the severance amounts and benefits set forth in Article IV of the Plan.
“Severance Period” means 52 weeks.
“STI Program” means the Lumen Short-Term Incentive Plan-Annual or successor annual bonus plan or program of the Company.
“Subsidiary” means a U.S.-based entity in which the Company owns a majority economic or voting stake.
“Targeted Bonus Opportunity” means the targeted annual incentive opportunity under the Company’s STI Program.
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Exhibit 99.1
“Termination” or “Terminated” means a separation from service with the Company as defined in Treasury Regulation § 1.409A-1(h).
“Termination Date” means the date on which the active employment of the Eligible Employee is severed by reason of an Involuntary Termination, Voluntary Resignation, CIC Good Reason Resignation, Non-CIC Good Reason Resignation or Termination for Cause.
“Total Targeted Cash Compensation” means the Eligible Employee’s annual rate of Base Salary in effect on a specified date plus the Eligible Employee’s Targeted Bonus Opportunity.
“Voluntary Resignation” means any Termination by the Employee that is not by the Company other than Non-CIC Good Reason Resignation or CIC Good Reason Resignation.
ARTICLE III
ELIGIBILITY FOR SEVERANCE BENEFITS
Section 3.01 Eligibility.
(a)Eligibility for, and receipt of, any Severance Benefits under the Plan are expressly conditioned on the Eligible Employee’s
(i)if a Non-CIC Termination, execution of a Separation and Release Agreement without revocation within the time period specified in Section 5.01 and compliance with all the terms and conditions of the Separation and Release; and
(ii)compliance with all the terms and conditions of the restrictive covenants set forth in Article VI.
(b)If the Plan Administrator determines that the Eligible Employee has not fully complied with any of the terms of the Plan or, if applicable, the Separation and Release Agreement, the Plan Administrator, acting on behalf of the Company, may deny Severance Benefits not yet paid or discontinue the payment of the Eligible Employee’s Severance Benefits and may require the Eligible Employee to repay any portion of any Severance Benefits already received under the Plan, by providing written notice of such repayment obligation to the Eligible Employee. If the Plan Administrator notifies an Eligible Employee that repayment of all or any portion of the Severance Benefits received under the Plan is required, such amounts shall be repaid within 30 calendar days of the date the written notice is sent. Any remedy under this subsection (b) shall be in addition to, and not in place of, any other remedy, including injunctive relief, that the Company may pursue.
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Exhibit 99.1
ARTICLE IV
SEVERANCE BENEFITS
Section 4.01 Non-CIC Termination Cash Severance Benefit. An Eligible Employee who incurs a Non-CIC Termination shall, subject to the terms and conditions of the Plan and contingent upon the Eligible Employee timely executing a Separation and Release Agreement (without revocation), receive the Non-CIC Cash Severance Benefit paid in accordance with Article V.
Section 4.02 CIC Termination Cash Severance Benefit. An Eligible Employee who incurs a CIC Termination shall, subject to the terms and conditions of the Plan, receive the CIC Cash Severance Benefit, paid in accordance with Article V. The foregoing notwithstanding, if the Eligible Employee has a deferral election in effect with respect to any percentage of the annual bonus which would otherwise become payable with respect to the fiscal year in which termination occurs, then the CIC Cash Severance Benefit shall be reduced by an amount equal to the deferred amount which reduction amount shall be deferred in accordance with such election.
Section 4.03 Additional Severance Benefits. An Eligible Employee who incurs a Non-CIC Termination or a CIC Termination will receive the following additional Severance Benefits, subject to the terms of the Plan and, if a Non-CIC Termination, contingent upon the Eligible Employee timely executing a Separation and Release (without revocation):
(a)Employee Benefits. Medical (including prescription drug), vision and dental benefits for the Eligible Employee and the Eligible Employee’s dependents, if enrolled in the Company’s Health Care Plan at the time of Termination, will continue through the last day of the month in which the Termination occurs. Eligibility for life insurance coverage and short-term disability coverage and benefits end on the Termination Date; provided, however, in accordance with applicable laws and the respective plan documents, notice of any rights to continue, convert, or obtain replacement coverage will be provided to Eligible Employees.
(b)COBRA Continuation Coverage. Eligible Employees, and if applicable, their dependents, who participate in the Company’s Health Care Plan may elect under COBRA to continue coverage for a monthly charge beyond the date coverage would otherwise terminate, subject to the provisions of the applicable plans and COBRA (“COBRA Continuation Coverage”). Employees who wish to enroll in COBRA Continuation Coverage must return the COBRA enrollment forms within 60 days from receipt of the COBRA notification by the Company. Eligible Employees who elect COBRA Continuation Coverage following a Non-CIC Termination or a CIC Termination will be eligible for subsidized COBRA payments (“COBRA Subsidy”) during the COBRA Subsidy Period. The COBRA Subsidy means that the Eligible Employee will pay the same premium contribution rate for medical/prescription, vision and dental coverage during the COBRA Subsidy Period. The COBRA Subsidy will terminate upon the earliest of: (i) the date the
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Exhibit 99.1
Eligible Employee discontinues COBRA Continuation Coverage or otherwise becomes ineligible for COBRA Continuation Coverage, (ii) the date the Eligible Employee is eligible to enroll (regardless of whether the Eligible Employee actually enrolls) in medical coverage sponsored by a subsequent employer of the Eligible Employee, or (iii) the date the COBRA Subsidy Period expires. Notwithstanding the foregoing, if (1) any plan pursuant to which COBRA Continuation Coverage is provided is not, or ceases prior to the expiration of the continuation coverage period to be, exempt from the application of Code Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (2) the Company is otherwise unable to continue to cover the Eligible Employee or the Eligible Employee’s dependents under its group health plans, or (3) the Company cannot provide COBRA Continuation Coverage without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), then, in any such case, an amount equal to each remaining COBRA Subsidy shall thereafter be paid to the Eligible Employee in substantially equal monthly installments over the COBRA Subsidy Period (or remaining portion thereof). Following the expiration of the COBRA Subsidy Period, if the Eligible Employee is eligible to continue healthcare coverage in accordance with COBRA, such coverage will be at the Eligible Employee’s expense.
(c)Annual Bonus.
(i)Payment in Lieu of STI Program Payment for Non-CIC-Termination. If during the year of Termination the Eligible Employee who incurs a Non-CIC Termination has at least three (3) months of consecutive employment, in lieu of the annual incentive bonus that may be payable under the STI Program, the Company will pay the Eligible Employee, a lump sum cash payment (subject to withholding) equal to the Eligible Employee’s last applicable Targeted Bonus Opportunity for the year of Termination prorated for the portion of the year the Eligible Employee is employed from January 1 of the Termination year through the Eligible Employee’s Termination Date, adjusted by the Corporate Performance Factor (as defined in the STI Program), capped at 100%, multiplied by 0.90, to be paid following the Determination and Approval Period as defined in the STI Program. In addition, if the Company has not paid an Eligible Employee (or deferred in accordance with any effective deferral election by the Employee) the annual bonus earned under the STI Program for the completed fiscal year ending immediately prior to the fiscal year of a non-CIC Termination, the Eligible Employee will be paid the determined bonus amount in a lump sum cash payment (subject to withholding) at the same time as the Company pays the STI Program bonuses to active Employees participating in the STI Program in accordance with the terms of the STI Program.
(ii)Payment of STI Program Payment for CIC Termination. If the Termination of the Eligible Employee is a CIC Termination, then the Company shall pay to the Eligible Employee in a lump sum cash payment, as promptly as practicable but in no event later than sixty (60) days following the CIC Termination date, a pro rata annual performance bonus for the year of Termination. The
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Exhibit 99.1
prorated bonus shall be equal to the annual bonus the Eligible Employee would have earned under the STI Program for the entire fiscal year in which the Termination occurs, determined by the Board or the Committee (as applicable) in good faith based on performance results excluding the effects of the Change in Control (including without limitation excluding the effects of any non-recurring transaction costs or any changes in overhead, interest, tax, intercompany or other expenses arising out of such transaction), multiplied by a fraction, the numerator of which is the number of days elapsed in the fiscal year through the CIC Termination date and the denominator of which is 365, subject to any deferral election in effect for such fiscal year as provided in Section 4.02. If the applicable bonus performance period is shorter than a fiscal year, the foregoing provisions shall be applied by substituting the applicable performance period and number of days.
(d)Annual Bonus Payable Earned But Not Paid for Fiscal Year Prior to CIC Termination. If the Company has not paid an Eligible Employee (or deferred in accordance with any effective deferral election by the Employee) the annual bonus earned under the STI Program for the completed fiscal year ending immediately prior to the fiscal year of a CIC Termination, then the Company will pay the Eligible Employee a lump sum cash payment (subject to withholding) within five business days of the CIC Termination date, but in no event after the 15th day of the third month following the end of the fiscal year in which the CIC Termination occurs, equal to: (i) the amount determined by the Board or the Committee (as applicable), but not paid as of the CIC Termination date, or (ii) if not so determined, the greater of (x) the average of the annual bonuses paid to the Eligible Employee for the three fiscal years immediately preceding the year in which the Change in Control occurs (or, if less, the number of completed fiscal years preceding the year of CIC Termination) or (y) the annual bonus amount the Eligible Employee would have earned under the STI Program for such completed fiscal year, with deemed achievement of 100% for any applicable subjective goals or criteria, subject to any deferral election in effect for such fiscal year as provided in Section 4.02. Any payment under this subsection (d) calculated by reference to prior or target bonus amounts shall be payable notwithstanding any provision to the contrary set forth in the STI Program.
(e)Retirement Plans. The provisions of any applicable qualified and/or nonqualified defined contribution plan maintained by the Company pursuant to which the Eligible Employee participates shall control with respect to any recognition of service during the Severance Period and the eligibility for benefits before, during and after the Severance Period.
(f)Equity. The provisions of the Equity Plan and equity award agreements for any outstanding equity awards shall control with respect to the treatment of the Eligible Employee’s outstanding equity grants as of the Eligible Employee’s Termination Date.
(g)Outplacement Assistance. The Company, at its cost, shall provide to the Eligible Employee outplacement assistance by a reputable firm specializing in such services. Such assistance shall comply with the requirements of the duration rules of
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Exhibit 99.1
Treasury Regulation § 1.409A-1(b)(9)(v)(A). Any failure to execute a Separation and Release Agreement following a Non-CIC Termination within the time period set forth in Section 5.01 will result in the forfeiture of the Severance Benefits (if any), contingent upon execution of a Separation and Release Agreement (without revocation).
Section 4.04 Voluntary Resignation; Termination for Death or Permanent Disability. If the Eligible Employee’s employment terminates on account of the Eligible Employee’s (a) Voluntary Resignation, (b) death, or (c) Permanent Disability, then the Eligible Employee shall not be entitled to receive Severance Benefits under the Plan and shall be entitled only to those benefits (if any) as may be available under the Company’s Equity Plans and equity award agreements, other separation or severance plans, policies, or arrangements, and any other employee health, welfare, retirement or benefit plan.
Section 4.05 Termination for Cause; Subsequently Discovered Cause or Breach. If the Company terminates the Eligible Employee’s employment for Cause, the Eligible Employee shall not be entitled to receive Severance Benefits under the Plan. Notwithstanding any other provision of the Plan to the contrary, if the Plan Administrator determines at any time within two (2) years following an Employee’s Termination Date that the Eligible Employee engaged in conduct that constitutes Cause at any time prior to such Employee’s Termination Date, any Severance Benefits payable to the Eligible Employee shall immediately cease, and the Employee shall be required to return promptly upon notice from the Company any Severance Benefits paid to the Eligible Employee prior to such determination. Likewise, if the Plan Administrator determines at any time within two (2) years following an Eligible Employee’s Termination Date that the Employee has breached any covenant in Article VI of the Plan, any Severance Benefits payable to the Employee shall immediately cease and the Employee shall be required to return promptly upon notice from the Company any Severance Benefits paid to the Employee prior to such determination. The Company may, in its sole discretion, withhold paying Severance Benefits under the Plan pending resolution of an inquiry that could lead to a determination that Cause exists or that the Eligible Employee breached the covenants of Article VI.
Section 4.06 Deductions from Severance Benefits. The Plan Administrator reserves the right to make deductions in accordance with applicable law for any monies owed to the Company or a Subsidiary or Affiliate of the Company by the Eligible Employee or the value of Company property that the Eligible Employee has retained in the Employee’s possession, e.g., if an Employee (a) retained a company laptop or other property or (b) used a Company corporate credit card for unauthorized personal purchases. To the extent applicable, any such deduction from Severance Benefits shall be made in compliance with Code Section 409A. To the maximum extent allowed by applicable law, Eligible Employees are deemed, by their participation in the Plan and, if applicable, execution of a Separation and Release Agreement (which is a pre-condition to receipt of Non-CIC Termination Severance Benefits hereunder), to have consented in writing to such deductions.
Section 4.07 Repayment of Severance Benefits upon Subsequent Rehire. Employees rehired by the Company before the expiration of the period covered by their Severance Benefit will be required to repay all or part of the Severance Benefit upon rehire. The “Repayment Percentage” is obtained by dividing the number of days remaining in the Severance Period (i.e., the total
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Exhibit 99.1
number of days included in the Severance Benefit calculation minus the number of prior days in reduction in force status) by the total number of days included in the Severance Benefit calculation. The amount to be repaid is equal to the total Severance Benefit multiplied by the Repayment Percentage.
ARTICLE V
TIMING OF PAYMENT AND LIMITATION ON BENEFITS
Section 5.01 Timing and Method of Payment.
(a)Non-CIC Cash Severance Benefits. Except as otherwise provided in this Article, a Non-CIC Cash Severance Benefit shall be paid periodically, in prorated installments on a bi-weekly basis in accordance with the Company’s normal payroll cycle, less withholding for all applicable federal, state and local taxes and other applicable withholdings and deductions, over the Eligible Employee’s Severance Period. The first installment (including any retroactive installments) shall begin no later than 90 days after the Eligible Employee’s Termination Date, subject to the Eligible Employee’s execution of a Separation and Release Agreement and, if applicable, the expiration of any revocation period for such Separation and Release Agreement within such 90-day period.
(b)CIC Cash Severance Benefit. Except as otherwise provided in this Article, a CIC Severance Benefit shall be paid in a single lump sum cash payment, less withholding for all applicable federal, state and local taxes and other applicable withholdings and deductions, no later than 5 business days after the Eligible Employee’s Termination Date.
(c)General Rules. In the event of the Eligible Employee’s death after the Eligible Employee becomes entitled to Severance Benefits under the Plan, but prior to full payment of all Severance Benefits due to such Eligible Employee, any remaining Severance Benefits due to the Eligible Employee under Section 4.01 or Section 4.02 shall be paid to the Eligible Employee’s estate in a lump sum payment within 90 days following written notification of the Eligible Employee’s death. Interest will not be credited on any unpaid Severance Benefit due to an Eligible Employee. Payment(s) shall be made by direct deposit or by mailing to the last address provided by the Eligible Employee to the Company or such other reasonable method as determined by the Plan Administrator.
(d)Six-Month Delay for Specified Employees. To the extent that any portion of the Severance Benefit is subject to Code Section 409A, (i) the payment of that portion of the Severance Benefits shall be designed and administered to comply with Code Section 409A and the Treasury Regulations thereunder, and (ii) notwithstanding anything in the Plan to the contrary concerning the time of payment of that portion of the Severance Benefit, if the Employee is a “specified employee,” as defined in Treasury Regulation Section 1.409A-1(i) on the date of the Employee’s “separation from service”, as described in Code Section 409A, then to the extent any portion of such payment is paid
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Exhibit 99.1
upon or as a result of the Employee’s “separation from service” such amount shall be accumulated and not paid until the date that is six (6) months after the date of the Employee’s “separation from service” (or, if earlier than the end of the six (6) month period, the Employee’s date of death). Such accumulated amounts shall be paid in a single lump sum payment on such delayed payment date.
(e)Application of Code Section 409A. To the extent that the Company determines that any compensation or benefit payable under the Plan constitutes nonqualified deferred compensation within the meaning of Code Section 409A and the Treasury Regulations thereunder, the Plan, with respect to such compensation or benefit, will be construed and interpreted to comply with the requirements of Code Section 409A and the Treasury Regulations thereunder or one or more applicable exceptions thereto, in accordance with the statutory provisions of Code Section 409A and the Treasury Regulations and other interpretive guidance issued thereunder. Notwithstanding any provision of the Plan to the contrary:
(i)No Guaranty of Tax Liability. In no event does the Company guarantee any particular tax consequences, outcome or tax liability to Eligible Employees. No provision of the Plan shall be interpreted or construed to transfer any liability for failure to comply with the requirements of Code Section 409A from an Eligible Employee or any other individual to the Company.
(ii)Additional Actions Permitted. In the event the Company determines that any compensation or benefit payable hereunder may be subject to Code Section 409A, the Company (without any obligation to do so or obligation to indemnify any Eligible Employee for any failure to do so) may adopt, without the consent of any Eligible Employee, such amendments to the Plan or take any other actions that the Company in its sole discretion determines are necessary or appropriate for such compensation or benefit to either: (a) be exempt from Code Section 409A; or (b) comply with the requirements of Code Section 409A and the Treasury Regulations thereunder.
(iii)Actual Payment Date. Whenever a payment under the Plan specifies a payment period, the actual date of payment within such specified period shall be within the sole discretion of the Company, and no Eligible Employee shall have any right (directly or indirectly) to determine the year in which such payment is made.
(iv)Installments. Each installment payment payable hereunder shall be deemed to be a separate payment for purposes of Code Section 409A and the Treasury Regulations thereunder. With respect to compensation or benefits subject to Code Section 409A that are paid pursuant to the Company’s payroll schedule, in the event of any change in that payroll schedule after such compensation or benefits are no longer subject to a substantial risk of forfeiture, each installment or payment to be made to an Eligible Employee under the Plan shall be made according to such new payroll schedule in effect at the time of such payment, but in any event within thirty (30) days of the payroll date that would have
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Exhibit 99.1
applied pursuant to the payroll schedule in effect on the date that the compensation or benefits to such Employee were no longer subject to a substantial risk of forfeiture.
(v)Reimbursements. To the extent that any amounts payable hereunder are deemed to be reimbursements and other separation payments under Treasury Regulation §1.409A-1(b)(9)(v), they shall not be deemed to provide for the deferral of compensation governed by Code Section 409A. If they do constitute deferral of compensation governed by Code Section 409A, they shall be deemed to be reimbursements or in-kind benefits governed by Treasury Regulation § 1.409A-3(i)(1)(iv). If the previous sentence applies: (i) the amount of expenses eligible for reimbursement or in-kind benefits provided during the Employee’s taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year, provided that the foregoing shall not be violated by any lifetime or annual limits contained in the Company’s group health plans; (ii) the reimbursement of an eligible expense must be made on or before the last day of the Eligible Employee’s taxable year following the taxable year in which the expense was incurred; and (iii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
(vi)Exceptions to Application of Section 409A. Application of the exceptions to Code Section 409A and the Treasury Regulations thereunder are additive, that is, the exceptions may be “stacked” and used in combination with other exceptions, including but not limited to the short-term deferral exception and the separation pay exception.
Section 5.02 Limitation on Benefits Under Section 280G.
(a)Notwithstanding anything set forth in the Plan to the contrary, if any payment or benefit, including the Severance Benefits, an Eligible Employee would receive from the Company (a “Payment”) would: (i) constitute a “parachute payment” within the meaning of Code Section 280G; and (ii) but for this sentence, be subject to the excise tax imposed by Code Section 4999 (the “Excise Tax”), then such Payment shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either: (i) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax; or (ii) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in the Eligible Employee’s receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits (or a cancellation of the acceleration of vesting of stock options or equity awards) constituting “parachute payments” is necessary so that the Payment equals the Reduced Amount, such reduction and/or cancellation of acceleration shall occur in the order that provides the maximum economic benefit to the Eligible Employee. In the event that acceleration of vesting of a stock option or equity award is to be reduced, such acceleration of vesting
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Exhibit 99.1
also shall be canceled in the order that provides the maximum economic benefit to the Eligible Employee.
(b)The Company shall appoint a nationally-recognized accounting firm with appropriate subject matter expertise to make the determinations required under this Section 5.02.
(c)The Company shall bear all expenses with respect to the making of the determinations by such accounting firm required to be made under this Section 5.02. The accounting firm engaged to make the determinations under this Section 5.02 shall provide its calculations, together with detailed supporting documentation, to the Company and the Eligible Employee as soon as practicable after the date on which the Eligible Employee’s right to a Payment is triggered (if requested at that time by the Company or the Eligible Employee) or such other time as requested by the Company or the Eligible Employee. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish the Company with an opinion reasonably acceptable to the Eligible Employee that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made under this Section 5.02 shall be final, binding, and conclusive upon the Company and the Eligible Employee.
ARTICLE VI
RESTRICTIVE COVENANTS
Section 6.01 Code of Conduct. Each Eligible Employee shall adhere in all respects to the Company’s ethics and compliance program, Code of Conduct, Employee Handbook and/or other applicable policies, as they may from time to time be established, interpreted, amended or terminated.
Section 6.02 Proprietary Information.
(a)Each Eligible Employee shall acknowledge that, during the course of employment, the Eligible Employee has learned or will learn or develop Proprietary Information. Each Eligible Employee shall further acknowledge that unauthorized disclosure or use of such Proprietary Information, other than in discharge of the Eligible Employee’s duties, will cause the Company irreparable harm. Except in the course of the Eligible Employee’s employment with the Company, in pursuit of the business of the Company, or as otherwise required in employment with the Company or by applicable law, each Eligible Employee shall not, during the course of the Eligible Employee’s employment or at any time following termination of Eligible Employee’s employment, directly or indirectly, disclose, publish, communicate, or use on the Employee’s behalf or
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Exhibit 99.1
another’s behalf, any Proprietary Information. If during or after the Eligible Employee’s employment, the Eligible Employee has any questions about whether particular information is Proprietary Information, the Eligible Employee shall consult with the Company’s Chief Legal Officer or other representative designated by the Company.
(b)Each Eligible Employee shall also agree to promptly disclose to the Company any information, ideas, or inventions made or conceived by the Employee that results from or are suggested by services performed by the Eligible Employee for the Company, and to assign to the Company all rights pertaining to such information, ideas, or inventions. Knowledge or information of any kind disclosed by the Eligible Employee to the Company shall be deemed to have been disclosed without obligation on the part of the Company to hold the same in confidence, and the Company shall have the full right to use and disclose such knowledge and information without compensation to the Eligible Employee.
Section 6.03 Non-Solicitation of Employees and Customers. During an Eligible Employee’s employment with the Company and (i) if a Non-CIC Termination, the period following an Eligible Employee’s Termination Date set forth in the Separation and Release Agreement or (ii) if a CIC Termination, the 18-month period (or, if less, the period allowed by applicable law) (as applicable, the “Restrictive Period”), each Eligible Employee shall agree, to the maximum extent allowed under applicable law and as set forth in the Separation and Release Agreement, not to, directly or indirectly, solicit any employee, consultant, agent or customer of the Company or its Subsidiaries.
Section 6.04 No Adverse Actions. During the Restrictive Period, each Eligible Employee shall not, without the prior written consent of the Company, in any manner, solicit, request, advise or assist any other person to (a) undertake any action that would be reasonably likely, or is intended, to result in a reorganization, merger, share exchange, transfer of ownership of 50% or more of the outstanding voting securities of the Company, consolidation or sale or disposition of all or substantially all of the assets of the Company, or (b) seek to control or change the composition of the Board in any material manner.
Section 6.05 Return of Property. Each Eligible Employee shall, upon the Eligible Employee’s Termination Date, return to the Company all property of the Company in the Eligible Employee’s possession, including all notes, reports, sketches, plans, published memoranda, or other documents, whether in hard copy or in electronic form, created, developed, generated, received, or held by the Eligible Employee during the Eligible Employee’s employment, concerning or related to the Company’s business, whether or not containing or relating to Proprietary Information. Each Eligible Employee shall not remove, by e-mail, by file transfer, by removal of computer discs or hard drives, or by other means, any of the above property containing Proprietary Information, or reproductions or copies thereof, or any apparatus from the Company’s premises without the Company’s written consent.
Section 6.06 Non-Disparagement. Each Eligible Employee shall agree to refrain from making any statements about the Company, its Subsidiaries or their officers or directors that would
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Exhibit 99.1
disparage, or reflect unfavorably upon the image or reputation of the Company, its Subsidiaries or any such officer or director.
Section 6.07 Assistance with Claims.
(a)Each Eligible Employee shall agree, that, during and after the Eligible Employee’s employment by the Company, the Eligible Employee shall assist the Company, on a reasonable basis, in the defense of any claims or potential claims that may be made or threatened to be made against it in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative (“Proceeding”) and shall assist the Company in the prosecution of any claims that may be made by the Company in any Proceeding, to the extent that such claims may relate to the Eligible Employee’s services.
(b)Each Eligible Employee shall agree, unless precluded by law, to promptly inform the Company if the Eligible Employee is asked to participate (or otherwise become involved) in any Proceeding involving such claims or potential claims.
(c)Each Eligible Employee shall also agree, unless precluded by law, to promptly inform the Company if the Eligible Employee is asked to assist in any investigation (whether governmental or private) of the Company or its Subsidiaries (or its actions), regardless of whether a lawsuit has then been filed against the Company or its Subsidiaries with respect to such investigation.
Section 6.08 Reasonableness. In the event that any of the provisions of this Article should ever be adjudicated to exceed the time, geographic, service, or other limitations permitted by applicable law in any jurisdiction, then such provisions shall be deemed reformed in such jurisdiction to the maximum time, geographic, service, or other limitations permitted by applicable law.
Section 6.09 Equitable Relief.
(a)Each Eligible Employee shall acknowledge that the restrictions contained in this Article are reasonable and necessary to protect the legitimate interests of the Company, its Subsidiaries and its affiliates, that the Company would not have established the Plan in the absence of such restrictions, and that any violation of any provision of this Article will result in irreparable injury to the Company. Each Eligible Employee shall represent that the Employee’s experience and capabilities are such that the restrictions contained in this Article will not prevent the Eligible Employee from obtaining employment or otherwise earning a living at the same general level of economic benefit as is currently the case. Each Eligible Employee shall further represent and acknowledge that the Employee (i) has been advised by the Company to consult the Employee’s own legal counsel in respect of the Plan, and (ii) has had full opportunity, prior to agreeing to participate in the Plan, to review thoroughly the Plan with the Employee’s own legal counsel.
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Exhibit 99.1
(b)Each Eligible Employee shall agree that the Company shall be entitled to preliminary and permanent injunctive relief, without the necessity of proving actual damages and without posting a bond or other security, as well as an equitable accounting of all earnings, profits and other benefits arising from any violation of this Article VI, which rights shall be cumulative and in addition to any other rights or remedies to which the Company may be entitled.
(c)Each Eligible Employee shall also irrevocably and unconditionally consent to the service of any process, pleadings, notices or other papers in a manner permitted by the notice provisions of Section 10.04.
Section 6.10 Survival of Provisions. The obligations contained in this Article VI shall survive the termination of each Eligible Employee’s employment with the Company and shall be fully enforceable, to the maximum extent allowed under applicable law, thereafter.
ARTICLE VII
PLAN ADMINISTRATOR
Section 7.01 Authority and Duties. The Lumen Plan Design Committee, through its delegated authority from the Board, established the Plan on behalf of the Company. The “Plan Sponsor” is the Company. The Committee, which approved the establishment of the Plan, shall serve as the Plan Administrator for purposes of ERISA and shall have primary responsibility for the operation and administration of the Plan. The Plan Administrator may, in its sole discretion and on such terms and conditions as it may provide, (i) delegate in writing to the Lumen Employee Benefits Committee or one or more officers of the Company all or any portion of its authority or responsibility with respect to the Plan, and (ii) act for the Company (in a non-fiduciary capacity) as to any matter pertaining to the Plan; provided, however, that any Plan amendment or termination or any other action that reasonably could be expected to increase materially the cost of the Plan must be approved by the Board or the Lumen Plan Design Committee . To the extent of such delegation, the delegate shall have all of the authority, discretion and powers of the Plan Administrator. It shall be the duty of the Plan Administrator to properly administer the Plan. The Plan Administrator shall have the full power, authority and discretion to construe, interpret and administer the Plan, to make factual determinations, to correct deficiencies therein, and to correct omissions. The Plan Administrator may adopt such rules and regulations and may make such decisions as it deems necessary or desirable for the proper administration of the Plan.
Section 7.02 Indemnification. The Plan Administrator shall be indemnified by the Company against personal liability from all losses, claims, costs or other liabilities arising from acts or omissions taken in good faith in the discharge of the Plan Administrator’s duties. In addition, officers and employees of the Company, and the members of the Board, shall be indemnified by
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Exhibit 99.1
the Company from all losses, claims, costs or other liabilities arising from their acts or omissions in connection with the administration, amendment or termination of the Plan, to the maximum extent permitted by applicable law. This indemnity will cover all such liabilities, including judgments, settlements and costs of defense. The Company will provide this indemnity from its own funds to the extent that insurance does not cover such liabilities. This indemnity is in addition to, and not in lieu of, any other indemnity provided to such person by the Company.
Section 7.03 Records, Reporting and Disclosure. The Plan Administrator shall keep a copy of all records relating to the payment of Severance Benefits to Eligible Employees and all other records necessary for the proper operation of the Plan. The Plan Administrator (or its delegate) shall prepare and file as required by law or regulation any reports, forms, and documents (except that the Company, as payor of the Severance Benefits, shall prepare and distribute to the proper recipients all forms relating to withholding of income or wage taxes, Social Security taxes, and other amounts that may be similarly reportable).
Section 7.04 Discretion. Any decisions, actions or interpretations to be made under the Plan by the Plan Administrator shall be made in its sole and absolute discretion, subject to the terms of the Plan and applicable law, and need not be uniformly applied; such decisions, actions or interpretations shall be final, binding and conclusive upon all parties, with respect to denied claims for Severance Benefits. Not in limitation to, but in amplification of, the foregoing and of the authority conferred upon the Plan Administrator, the Plan Sponsor specifically intends that the Plan Administrator and its duly authorized delegates have the greatest permissible discretion to construe the terms of the Plan and to determine all questions concerning eligibility, participation and benefits. The decisions by the Plan Administrator or any delegates shall be conclusive and binding, and any interpretation, determination or other action by them is intended to be subject to the most deferential standard of review. Such standard of review is not to be affected by any real or alleged conflict of interest on the part of the Plan Administrator or its delegates to resolve ambiguities or inconsistencies. All such authorizations, interpretations, determinations, decisions and settlements shall be final and binding for purposes of the Plan.
Section 7.05 Implementation of the Plan is Non-Fiduciary. The decision to implement the Plan and as to which Employees, if any, will be Eligible Employees, as well as all other management decisions, including but not limited to, offering ongoing employment, shall be determined by management as Plan Sponsor functions and not in any fiduciary capacity.
ARTICLE VIII
AMENDMENT AND TERMINATION
Section 8.01 Amendment and Termination. Except as otherwise provided in this Article VIII or in the Participation Agreement, the Plan may be amended or terminated, without prior notice, in
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Exhibit 99.1
whole or in part at any time by written approval of the Board or the Lumen Plan Design Committee; provided, however, that, without an Eligible Employee’s written approval or consent, no amendment or termination shall impair an Eligible Employee’s right to retain any amount paid to the Employee prior to the date of the amendment or termination (except as expressly provided herein) or cause the cessation of Severance Benefits after (i) an Eligible Employee has executed a Separation and Release Agreement (without revocation) as required under Article III if there has not been a Change in Control or (ii) the date a Change in Control occurs, as applicable. Amendment or termination of the Plan with respect to any Subsidiary of the Company shall not affect the rights of any Eligible Employee to any Plan benefit to which such Eligible Employee may have become irrevocably entitled under the Plan prior to the date such amendment or termination is adopted. On termination of the Plan, all rights to benefits end unless an Eligible Employee already has become entitled to such benefits. Any amendment or termination shall operate prospectively only and shall not impair an Eligible Employee’s right to retain any amount paid to the Employee prior to the date of the amendment or termination (except as expressly provided herein or in a Participation Agreement) or cause the cessation of Severance Benefits after (i) an Eligible Employee has executed a Separation and Release Agreement if there has not been a Change in Control or (ii) the date a Change in Control occurs, as applicable.
Section 8.02 Continuation of Plan. Subject to Section 8.01, the Plan shall continue and shall be binding on the Company and its successors until the Company and/or its successors have fully performed all of the Company’s obligations under the Plan with respect to all Eligible Employees covered under the Plan. In the event of an actual or contemplated Change in Control, the Company will require the Post-Transaction Company to unconditionally assume all of the obligations of the Company hereunder and to continue the Plan without amendment or termination, during the Protective Period. Failure of the Company to obtain an agreement from the Post-Transaction Company to assume such obligations shall constitute a CIC Good Reason Resignation event that will be deemed to have occurred on the date the Company advises the Eligible Employee of the Post-Transaction Company’s failure to agree to assume the obligations of the Plan.
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Exhibit 99.1
ARTICLE IX
CLAIMS PROCEDURES
Section 9.01 Claims. The Plan Administrator, in its sole discretion, shall determine eligibility for Severance Benefits and the amount of Severance Benefits, as well as the administration of Severance Benefits, in accordance with the terms of the Plan. An Eligible Employee or the Eligible Employee’s beneficiary (as applicable, the “claimant”) may contest such determinations by completing and filing with the Plan Administrator a written request for review in the manner specified by the Plan Administrator within 90 days following the Eligible Employee’s Termination Date. The claimant must send a written claim to the Plan Administrator at the Plan Administrator’s address set forth in Article XI of the Plan. Each such application must be supported by such information as the Plan Administrator deems relevant and appropriate. The claimant may not bring an action for any alleged wrongful denial of Plan benefits in a court of law unless the claims and appeals procedures described in this Article are exhausted and a final determination has been made by the Plan Administrator or its delegate. If the claimant challenges a decision by the Plan Administrator or its delegate, any review by a court of law will be limited to the facts, evidence and issues presented to the Plan Administrator during the claims procedure set forth in this Article. Facts and evidence that become known to the claimant after such individual has exhausted the claims procedure must be brought to the attention of the Plan Administrator for reconsideration. Issues not raised with the Plan Administrator will be deemed waived.
Section 9.02 Initial Claim. In the event that any claim under Section 9.01 is denied, in whole or in part, the claimant whose claim has been so denied shall be notified of such denial in writing by the Plan Administrator, or its delegate, within ninety (90) days after the receipt of the claim for benefits. This period may be extended an additional ninety (90) days if the Plan Administrator, or its delegate, determines such extension is necessary and the Plan Administrator, or its delegate, provides notice of the extension to the claimant prior to the end of the initial ninety (90) day period. The notice advising of the denial shall:
(i)specify the reason or reasons for denial:
(ii)make specific reference to the Plan provisions on which the determination was based;
(iii)describe any additional material or information necessary for the claimant to perfect the claim (explaining why such material or information is needed); and
(iv)describe the Plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of ERISA following an adverse benefit determination on review.
Section 9.03 Appeals of Denied Administrative Claims. All appeals of denied claims shall be made by the following procedure:
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Exhibit 99.1
(a)A claimant whose claim has been denied shall file with the Plan Administrator a written notice of appeal of the denial. Such notice shall be filed within sixty (60) calendar days of receipt of notification by the Plan Administrator of the denial of a claim, shall be made in writing, and shall set forth all of the facts upon which the appeal is based. Appeals not timely filed shall be barred.
(b)The Plan Administrator shall consider the merits of the claimant’s written presentations, the merits of any facts or evidence in support of the denial of benefits, and such other facts and circumstances as the Plan Administrator shall deem relevant.
(c)The Plan Administrator shall render a determination upon the appealed claim which determination shall be accompanied by a written statement as to the reasons therefor. The determination shall be made to the claimant within sixty (60) days of the claimant’s request for review, unless the Plan Administrator determines that special circumstances require an extension of time for processing the claim. In such case, the Plan Administrator shall notify the claimant of the need for an extension of time to render its decision prior to the end of the initial sixty (60) day period, and the Plan Administrator shall have an additional sixty (60) day period to make its determination. The determination so rendered shall be binding upon all parties. If the determination is adverse to the claimant, the notice shall:
(i)provide the reason or reasons for denial;
(ii)make specific reference to the Plan provisions on which the determination was based;
(iii)state that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claimant’s claim for benefits; and
(iv)state that the claimant has the right to bring a civil action under section 502(a) of ERISA.
Section 9.04 Deadline to Bring a Plan Claim, Arbitration or Civil Suit.
(a)Claims regarding any benefit under the Plan must be submitted in writing within six (6) months of the earlier of:
(i)the date a claimant has reason to believe that the Plan has not been properly administered; or
(ii)the date that a claimant did not receive a benefit under the Plan to which the claimant believes the claimant was entitled.
(b)Plan claims and appeals procedures as explained above must be completely and timely exhausted by a claimant or Eligible Employee. A civil lawsuit,
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Exhibit 99.1
arbitration or other proceeding must be filed not later than one (1) year after the exhaustion of these internal Plan remedies as described in this Article.
ARTICLE X
MISCELLANEOUS
Section 10.01 Waiver of Jury Trial.
(a)THE COMPANY WAIVES, AND EACH EMPLOYEE UPON BECOMING AN ELIGIBLE EMPLOYEE IN THE PLAN SHALL WAIVE, HIS, HER OR ITS RIGHT TO A JURY TRIAL IN ANY COURT ACTION ARISING UNDER THE PLAN OR OTHERWISE AND WHETHER MADE BY CLAIM, COUNTER-CLAIM, THIRD-PARTY CLAIM OR OTHERWISE.
(b)If for any reason the jury waiver is held to be unenforceable, but only in that event, the Eligible Employee and the Company agree to binding arbitration for any dispute arising out of the Plan or any claim arising under any federal, state or local statutes, laws or regulations, pursuant to the arbitration terms set forth in the Eligible Employee’s Dispute Resolution Agreement.
(c)The agreement of the Eligible Employee to waive the Employee’s right to a jury trial will be binding on the Employee’s beneficiaries or assigns and will survive the termination of the Plan.
Section 10.02 Forum Selection. Except as the laws of the United States may otherwise require, any and all disputes relating to or arising under the Plan to enforce or interpret the Plan must be brought by civil action. Any court proceeding brought by the Employee or the Company to enforce rights or obligations related to or arising under any provision of the Plan (a “Claim”) must be brought in the United States District Court in Denver, Colorado or, if and only if another proceeding is pending between the Eligible Employee and the Company in another jurisdiction and a Claim would be related to such pending proceeding, in such other jurisdiction (as applicable, the “Court”). Each party agrees to personal jurisdiction in either venue. Each Eligible Employee, by virtue of the Employee’s participation in the Plan, irrevocably consents to the jurisdiction and venue in the Court and that any and all disputes shall be adjudicated solely by the Court, and further irrevocably waives any defense based on lack of venue, personal jurisdiction, forum non conveniens, transfer, priority doctrines, and any defense(s) of similar type or import except that, as noted in Section 10.01, if the Court refuses to enforce the jury waiver in Section 10.01, the case shall proceed in arbitration.
Section 10.03 Non-Alienation of Benefits. None of the payments, benefits or rights of any Eligible Employee shall be subject to any claim of any creditor of any Employee, and, in particular, to the fullest extent permitted by law, all such payments, benefits and rights shall be
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Exhibit 99.1
free from attachment, garnishment (if permitted under applicable law), trustee’s process, or any other legal or equitable process available to any creditor of such Employee. No Eligible Employee shall have the right to alienate, anticipate, commute, pledge, encumber or assign any of the benefits or payments that the Eligible Employee may expect to receive, contingently or otherwise, under the Plan, except for the designation of a beneficiary.
Section 10.04 Notices. All notices and other communications required hereunder shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service. In the case of the Eligible Employee, mailed notices shall be addressed to the Employee’s home address most recently communicated to the Company in writing. In the case of the Company, mailed notices shall be addressed to the Plan Administrator (provided in Article XI).
Section 10.05 No Mitigation. Eligible Employees shall not be required to mitigate the amount of any Severance Benefits provided for in the Plan by seeking other employment or otherwise, nor shall the amount of any Severance Benefits provided herein be reduced by any compensation earned by other employment or otherwise, except if the Eligible Employee is re-employed by the Company, in which case the Severance Benefits shall cease.
Section 10.06 Certain Pre-Change in Control Terminations. Notwithstanding any other provision of the Plan, an Eligible Employee’s employment shall be deemed to have been a CIC Termination due to an Involuntary Termination (and the Eligible Employee shall be entitled to receive the Severance Benefits for CIC Termination) if the Eligible Employee’s employment is terminated by the Company or a Subsidiary or Affiliate of the Company without Cause prior to a Change in Control (whether or not a Change in Control actually occurs) and such Termination (i) was at the request or direction of a third party who has taken steps designed to effect a Change in Control or otherwise arose in connection with or in anticipation of a Change in Control or (ii) occurred after discussions with a third party regarding a possible Change in Control commenced and such discussions produced (whether before or after such Termination) either a preliminary or definitive agreement with respect to such a Change in Control transaction or a public announcement of the pending Change in Control transaction.
Section 10.07 Legal Fees. In the event of a CIC Termination, the Company or Post-Transaction Company, as applicable, shall reimburse the Eligible Employee for all legal fees and other expenses which the Eligible Employee may reasonably incur as a result of any contest by the Company or the Post-Transaction Company of the validity or enforceability of, or liability under, any provision of the Plan, but only if, when and to the extent the Eligible Employee prevails with respect to such contest. With respect to a Termination other than a CIC Termination, the parties shall each bear their own legal fees and other expenses incurred in connection with the Plan.
Section 10.08 No Contract of Employment. Neither the establishment of the Plan, nor any modification thereof, nor the payment of any benefits shall be construed as giving any Eligible Employee or any person whosoever the right to be retained in the service of the Company or a Subsidiary or Affiliate of the Company, and all Eligible Employees shall remain “at-will employees” subject to discharge to the same extent as if the Plan had never been adopted.
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Exhibit 99.1
Section 10.09 Severability of Provisions. If any provision of the Plan is held invalid or unenforceable, its invalidity or unenforceability will not affect any other provision of the Plan, and the Plan will be construed and enforced as if such provision had not been included.
Section 10.10 Unfunded Plan. The Plan shall not be funded. No Employee or Eligible Employee (or their dependents) shall have any right to, or interest in, any assets of the Company that may be applied by the Company to the payment of Severance Benefits. Payments of Severance Benefits under the Plan shall be paid from the Company’s general assets, in accordance with the terms of the Plan.
Section 10.11 Payments to Incompetent Persons. Any Severance Benefits payable to or for the benefit of a minor, an incompetent person or other person incapable of receipting therefor shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Company, the Plan Administrator and all other parties with respect thereto.
Section 10.12 Controlling Law. The Plan shall be construed and enforced according to the laws of the State of Colorado to the extent not superseded by Federal law and without reference to any conflicts of laws principles. Any provision of the Plan that is determined by a court to be in conflict with any applicable Federal or State laws shall be deemed amended by this paragraph to conform to the minimum requirements of such laws, except to the extent they are preempted by ERISA.
Section 10.13 Clerical Error. By participation in the Plan, each Eligible Employee agrees that any amount paid in error will be returned promptly to the Company and a payment error does not create a legally binding right to payment under the Plan. If a clerical error or other mistake occurs, however occurring, including but not limited to, by the Plan Administrator, its delegates, members of the Employee Benefits Group of the Company’s Human Resources Organization, vendors or an Eligible Employee, such clerical error or mistake does not and shall not create a right to a Benefit under the Plan. When an error is found, it will be corrected or adjusted appropriately as soon as practicable. Interest shall not be payable by the Plan, the Plan Administrator or any delegate with respect to a benefit corrected or adjusted.
Section 10.14 Exclusive Benefits. Unless otherwise provided for in an Eligible Employee’s Participation Agreement and except as provided below, the Severance Benefits, if any, provided under the Plan will be the exclusive benefits for an Eligible Employee related to the Employee’s Termination of employment with the Company and supersede and replace any severance and/or change in control benefits set forth in any offer letter, employment or severance agreement and/or other agreement between the Eligible Employee and the Company. The foregoing notwithstanding, the Plan does not supersede or otherwise modify or apply to an Eligible Employee’s equity awards granted under the Equity Plan and outstanding as of the Eligible Employee’s Termination Date and such outstanding equity awards shall continue to be governed by the terms and conditions of the Equity Plan and applicable equity award agreement(s).
Section 10.15 Headings. Headings in this Plan document are for purposes of reference only and will not limit or otherwise affect the meaning hereof.
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Exhibit 99.1
ARTICLE XI
GENERAL PLAN INFORMATION
Section 11.01 Plan Information.
Plan Year - The fiscal year of the Plan begins on January 1 and ends on December 31; provided, however, that the initial Plan Year begins on the Effective Date and ends on December 31, 2026.
Plan Type and Name – Lumen Executive Severance Plan, a “top hat” plan under ERISA.
Plan Funding and Administration – The Plan is an unfunded severance plan. All benefits are paid by the Company from its general assets.
Plan Sponsor – Lumen Technologies, Inc. is the Plan Sponsor. The address for the Plan Sponsor is:
Lumen Technologies, Inc.
100 CenturyLink Drive
Monroe, LA 71203-2041
Federal tax identification number is 72-0651161.
Plan Administrator – Human Resources and Compensation Committee of the Board of Directors of Lumen Technologies, Inc. is the Plan Administrator of the Plan. The address for the Plan Administrator is:
Human Resources and Compensation Committee
Plan Administrator – Lumen Executive Severance Plan
Lumen Technologies, Inc.
931 14th Street
Denver, CO 80202
Service of Legal Process - Legal Process may be served on the Company’s registered agent, CT Corporation System, at the following address:
CT Corporation System
3867 Plaza Tower Dr.
Baton Rouge, LA 70816
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Exhibit 99.1
Plan Administrator’s Discretion and Authority - The Company has delegated and reserved to the Plan Administrator the right to interpret and resolve any ambiguities in the Plan or any document relating to the Plan in its sole and absolute discretion. Participation in the Plan does not create a contract of employment.
Executed this 22nd day of October 2026, effective as of the Effective Date.
Lumen Technologies, Inc.
/s/ Marina Pearson__________________
Name: Marina Pearson
Title: Vice President, Benefits & Policy, Human Resources
& Member, Lumen Plan Design Committee
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Exhibit 99.1
EXHIBIT A
PARTICIPATION AGREEMENT
[Attached]
Exhibit 99.1
Lumen Executive Severance Plan
Participation Agreement
Lumen Technologies, Inc. (the “Company”) is pleased to inform you that you are eligible to participate in the Company’s Executive Severance Plan (the “Plan”) as an Eligible Employee, effective [DATE].
A copy of the Plan was delivered to you with this Participation Agreement. Your participation in the Plan is subject to all of the terms and conditions of the Plan. The capitalized terms used but not defined herein will have the meanings ascribed to them in the Plan.
In order to become an Eligible Employee, you must complete and sign this Participation Agreement and return it to Denise Mabile no later than [DATE].
The Plan describes in detail certain circumstances under which you may become eligible for Severance Benefits, as described more fully in the Plan, if you experience an Involuntary Termination, a Non-CIC Good Reason Resignation or a CIC Good Reason Resignation, as each is defined in the Plan.
In order to receive any Severance Benefits for which you otherwise become eligible under the Plan due to a Non-CIC Termination, you must sign and deliver to the Company the Separation and Release Agreement, which must have become effective and irrevocable within the requisite period, and otherwise comply with the requirements under Article VI of the Plan.
The benefits, if any, provided under the Plan will be the exclusive Severance Benefit for a Participant related to his or her termination of employment with the Company and/or a Change in Control of the Company and will supersede and replace any Severance Benefits provided under any offer letter, employment or severance agreement and/or other agreement between you and the Company; provided, however, that treatment of any equity awards outstanding as of your Termination Date will be governed by the terms of the equity award agreements and Equity Plan.
For the avoidance of doubt, if as of the date of this Participation Agreement you are otherwise eligible to participate in any other Company severance and/or change in control plan, policy or agreement (whether or not subject to ERISA), your participation in the Plan will supersede such other plan, policy or agreement. To the extent you become eligible for severance benefits in a plan, policy or agreement after the date of this Participation Agreement, your benefits under the Plan will be offset by such future benefits. Notwithstanding the foregoing, any provision in your existing offer letter, employment agreement, and/or equity award agreement with the Company that provides for vesting of your outstanding equity awards upon your termination, will not be superseded by the Plan or this Participation Agreement, and will continue in full force and effect pursuant to its existing terms.
By your signature below, you and the Company agree that your participation in the Plan is governed by this Participation Agreement and the provisions of the Plan. Your signature below confirms that:
Exhibit 99.1
(1)You have received a copy of the Lumen Executive Severance Plan;
(2)You have carefully read this Participation Agreement and the Lumen Executive Severance Plan and you acknowledge and agree to its terms and conditions, including all restrictive covenants;
(3)You agree and consent to the termination effective as of [DATE] of any Change of Control Agreement you entered into with the Company that is currently in effect;1 and
(4)Decisions and determinations by the Plan Administrator under the Plan will be final and binding on you and your successors.
LUMEN TECHNOLOGIES, INC.
By:
Title:
ELIGIBLE EMPLOYEE
[NAME]
Attachment: Lumen Executive Severance Plan
1 NTD: Include in the agreements for current SLT with Change of Control Agreements.
EX-10.2
EX-10.2
Filename: ceokatejohnsonarchangeofco.htm · Sequence: 3
Document
Exhibit 99.2
CHANGE OF CONTROL AND SEVERANCE AGREEMENT
This CHANGE OF CONTROL AND SEVERANCE AGREEMENT (this “Agreement”) is entered into effective as of October 22, 2026 (the “Agreement Date”) by and between Lumen Technologies, Inc., a Louisiana corporation (the “Company”), and Kate Johnson (the “Employee”) and amends, restates and supersedes in its entirety that Change of Control Agreement effective as of November 7, 2022 (the “Original Effective Date”) between the Company and the Employee (the “Prior Agreement”).
W I T N E S S E T H:
WHEREAS, pursuant to an offer letter entered into between the Company and the Employee on the Original Effective Date (the “Offer Letter”), the Company and the Employee agreed that the Employee will be provided with certain change of control protections commensurate with her position as President and Chief Executive Officer of the Company;
WHEREAS, the Board of Directors of the Company (the “Board”) has determined that it is in the best interests of the Company and its shareholders to provide the benefits set forth in this Agreement to the Employee; and
WHEREAS, the Board believes that the benefits set forth herein are reasonably designed to retain the services of the Employee and to assure the full dedication of the Employee, free from personal distraction, in the event of an actual or pending termination of employment or change of control of the Company;
NOW, THEREFORE, the parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Affiliate. “Affiliate” (and variants thereof) shall mean a Person that controls, or is controlled by, or is under common control with, another specified Person, either directly or indirectly.
1.2 Beneficial Owner. “Beneficial Owner” (and variants thereof), with respect to a security, shall mean a Person who, directly or indirectly (through any contract, understanding, relationship or otherwise), has or shares (i) the power to vote, or direct the voting of, the security, or (ii) the power to dispose of, or direct the disposition of, the security.
1.3 Business. “Business” shall mean, as of any particular date, the business of (i) providing local or long distance communication services (including CLEC’s, ILEC’s and international communication services providers with a presence in the United States), network access, Internet access, data, video and IPTV services, web development, hosting, cloud computing, web and managed hosting, content delivery network services, IT services, big data analytics, security; (ii) selling communications products in connection with providing such services or (iii) providing any other material services or selling any other material products then performed or sold by the Company or its Affiliates.
1.4 Cause. “Cause” shall mean the Employee’s (i) willful breach of Section 4.1 or 4.2 of this Agreement; (ii) conviction of, or plea of guilty or nolo contendere to, a felony or other crime involving dishonesty or moral turpitude; (iii) workplace conduct resulting in the payment of civil monetary penalties or the incurrence of civil non-monetary penalties that will materially restrict or prevent the Employee from discharging her obligations to the Company; (iv) habitual intoxication during working hours or habitual abuse of or addiction to a controlled substance; (v) material breach of the Company’s insider trading, corporate ethics and compliance policies and programs or any other Board-adopted policies applicable to
1
Exhibit 99.2
management conduct; (vi) participation in the public reporting of any information contained in any report filed by the Company with the Securities and Exchange Commission that was impacted by the Employee’s knowing or intentional fraudulent or illegal conduct; or (vii) substantial, willful and repeated failure to perform duties as instructed by or on behalf of the Board in writing.
The Employee’s employment shall not be deemed terminated for Cause unless the Company shall have delivered to the Employee a termination notice with a copy of a resolution adopted by the affirmative vote of not less than three-quarters of the entire Board at a meeting called partly or wholly for such purpose (after reasonable notice is provided to the Employee and the Employee has had an opportunity, with counsel, to be heard by the Board) finding that the Employee should be terminated for Cause and specifying in reasonable detail the grounds therefor.
No action or inaction shall be deemed the basis for Cause unless the Employee is terminated therefor prior to the first anniversary of the date on which such action or omission is first known to the Chairman of the Board or the Chair of any standing committee of the Board.
1.5 Change of Control. “Change of Control” shall mean:
(a) the acquisition by any Person of Beneficial Ownership of 30% or more of the outstanding shares of the Company’s Common Stock, $1.00 par value per share (the “Common Stock”), or 30% or more of the combined voting power of the Company’s then outstanding securities entitled to vote generally in the election of directors; provided, however, that for purposes of this subsection (a), the following acquisitions shall not constitute a Change of Control:
(i)any acquisition (other than a Business Combination which constitutes a Change of Control under Section 1.5(c) hereof) of Common Stock directly from the Company,
(ii)any acquisition of Common Stock by the Company or its subsidiaries,
(iii)any acquisition of Common Stock by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company, or
(iv)any acquisition of Common Stock by any entity pursuant to a Business Combination that does not constitute a Change of Control under Section 1.5(c) hereof; or
(b) individuals who, as of the Agreement Date, constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to the Agreement Date whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least two-thirds of the directors then comprising the Incumbent Board shall be considered a member of the Incumbent Board, unless such individual’s initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Incumbent Board; or
(c) consummation of a reorganization, share exchange, merger or consolidation (including any such transaction involving any direct or indirect subsidiary of the Company), or sale or other disposition of all or substantially all of the assets of the Company (a “Business Combination”); provided, however, that in no such case shall any such transaction constitute a Change of Control if immediately following such Business Combination,
2
Exhibit 99.2
(i)the individuals and entities who were the Beneficial Owners of the Company’s outstanding common stock and the Company’s voting securities entitled to vote generally in the election of directors immediately prior to such Business Combination have direct or indirect Beneficial Ownership, respectively, of more than 50% of the then outstanding shares of common stock, and more than 50% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, of the Post-Transaction Company (as defined in Section 1.13 hereof), and
(ii)except to the extent that such ownership existed prior to the Business Combination, no Person (excluding the Post-Transaction Company and any employee benefit plan or related trust of the Company, the Post-Transaction Company or any subsidiary of either corporation) Beneficially Owns, directly or indirectly, 20% or more of the then outstanding shares of common stock of the corporation resulting from such Business Combination or 20% or more of the combined voting power of the then outstanding voting securities of such corporation, and
(iii)at least a majority of the members of the board of directors of the Post-Transaction Company were members of the Incumbent Board at the time of the execution of the initial agreement, or of the action of the Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
1.6 Code. “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
1.7 Confidential Information. “Confidential Information” shall mean any information, knowledge or data of any nature and in any form (including information that is electronically transmitted or stored on any form of magnetic or electronic storage media) that directly or indirectly relates to the past, current or prospective business of the Company and its Affiliates, whether generated by the Company, any of its Affiliates, or any of their respective employees, officers, directors, representatives, consultants, agents or independent contractors, and whether or not marked confidential, including without limitation information relating to operations, products, services, assets, liabilities, franchises, customers, financial condition, results of operations, finances, prospects, strategies, business plans, budgets, projections, pricing information, business acquisitions, joint ventures, processes, research and development ideas, trade secrets, supplier lists, supplier information, distribution and sales data, consultants’ reports, marketing strategies, proprietary computer software, and internal notes and memoranda relating to any of the foregoing; provided, however, that “Confidential Information” shall not include any information that (a) is or becomes generally available to the public other than as a result of a breach of this Agreement, or (b) is or becomes available to the Employee on a non-confidential basis from a source other than the Company, its Affiliates or their respective representatives, provided that such source is not known by the Employee to have violated any confidentiality agreement with the Company in connection with such disclosure.
1.8 Company. “Company” shall mean Lumen Technologies, Inc. and shall include any successor to or assignee of (whether direct or indirect, by purchase, share exchange, merger, consolidation or otherwise) all or substantially all of the assets or business of the Company that assumes and agrees to perform this Agreement by operation of law or otherwise.
1.9 Disability. “Disability” shall mean a condition that would entitle the Employee to receive benefits under the long-term disability insurance policy applicable to the Company’s officers at the time because the Employee is totally disabled or partially disabled, as such terms are defined in the policy then in effect. If the Company has no long-term disability plan in effect, “Disability” shall occur if (a) the Employee is
3
Exhibit 99.2
rendered incapable because of physical or mental illness of satisfactorily discharging her duties and responsibilities to the Company for a period of 90 consecutive days, (b) a duly qualified physician chosen by the Company and acceptable to the Employee or her legal representatives so certifies in writing, and (c) the Board determines that the Employee has become disabled.
1.10 Employment Term. “Employment Term” shall mean the period commencing on the date of a Change of Control and ending on the 24-month anniversary of such date.
1.11 Good Reason. “Good Reason” shall mean any of the following events or conditions described in this Section 1.11, but only if the Employee shall have provided written notice to the Company within 90 days of the initial existence or occurrence of such event or condition and the Company shall have failed to cure such event or condition within 30 days of its receipt of such notice:
(a)Any failure of the Company or its Affiliates to provide the Employee with a position, authority, duties and responsibilities at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 180-day period immediately preceding the Change of Control. The Employee’s position, authority, duties and responsibilities after a Change of Control shall not be considered commensurate in all material respects with the Employee’s position, authority, duties and responsibilities prior to a Change of Control unless after the Change of Control the Employee holds an equivalent position with, and exercises substantially equivalent authority, duties and responsibilities on behalf of, the Post-Transaction Company;
(b)The assignment to the Employee of any duties inconsistent in any material respect with the Employee’s position (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Section 3.1(b) of this Agreement, or any other action that results in a diminution in any material respect in such position, authority, duties or responsibilities;
(c)A reduction of the Employee’s base salary in effect as of the date of the Change of Control without the Employee’s consent, except for across-the-board salary reductions similarly affecting all or substantially all similarly-situated officers of the Company and the Post-Transaction Company;
(d)Any change or action by the Company or its Affiliates that is a failure in any material respect to comply with any of the provisions of this Agreement; or
(e)Any directive requiring the Employee to be based at any office or location other than as provided in Section 3.1(b)(2) hereof or requiring the Employee to travel on business to a substantially greater extent than required immediately prior to the Change of Control.
1.12 Person. “Person” shall mean a natural person or entity, and shall also mean the group or syndicate created when two or more Persons act as a syndicate or other group (including, without limitation, a partnership or limited partnership) for the purpose of acquiring, holding, or disposing of a security, except that “Person” shall not include an underwriter temporarily holding a security pursuant to an offering of the security.
1.13 Post-Transaction Company. Unless a Change of Control results from a Business Combination (as defined in Section 1.5(c) hereof), “Post-Transaction Company” shall mean the Company after the Change of Control. If a Change of Control results from a Business Combination, “Post-Transaction Company” shall mean the corporation or other entity resulting from the Business Combination unless, as a result of such Business Combination, an ultimate parent entity controls such resulting entity, the Company or all or substantially all of the Company’s assets either directly or indirectly, in which case “Post-Transaction Company” shall mean such ultimate parent entity.
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Exhibit 99.2
1.14 Specified Employee. “Specified Employee” shall mean the Employee if the Employee is a key employee under Treasury Regulations Section 1.409A-1(i) because of final and binding action taken by the Board, its Human Resources and Compensation Committee or such committee’s delegate, or by operation of law or such regulation.
ARTICLE II
NON-CHANGE OF CONTROL SEVERANCE BENEFITS
The terms and conditions of the Lumen Executive Severance Plan (as amended and/or restated and as hereafter may be further amended and/or restated, the “Severance Plan”) relating to a Non-CIC Termination (as defined in the Severance Plan) are hereby incorporated by reference as if the Employee was an Eligible Employee (as defined in the Severance Plan) for Non-CIC Termination related Severance Benefits (as defined in the Severance Plan); provided, however, that (i) the Employee’s Non-CIC Cash Severance Benefit (as defined in the Severance Plan) shall be equal to 104 weeks of Total Target Cash Compensation (as defined in the Severance Plan) and (ii) the Employee’s Severance Period (as defined in the Severance Plan) shall be equal to 104 weeks. For the avoidance of doubt, in the event the Employee experiences a Non-CIC Termination, the Employee shall be eligible to receive the Severance Benefits for a Non-CIC Termination set forth in the Severance Plan on the terms and conditions of the Severance Plan, as modified in accordance with the immediately preceding sentence.
ARTICLE III
CHANGE OF CONTROL BENEFITS
3.1 Terms of Employment after Change of Control.
(a)This Agreement shall commence on the Agreement Date and continue in effect through December 31, `; provided, however, that, commencing on January 1, 2027 and each January 1 thereafter, the term of this Agreement shall automatically be extended for one additional year unless, not later than June 30 of the preceding year, the Company or the Employee shall have given written notice that it does not wish to extend this Agreement; provided, further, that, notwithstanding any such non-extension notice by the Company, if a Change of Control of the Company shall have occurred during the original or extended term of this Agreement, this Agreement shall continue in effect through the 24-month anniversary of the Change of Control, subject to any earlier termination of the Employee’s status as an employee pursuant to this Agreement; provided, further, that in no event shall any termination of this Agreement result in any forfeiture of rights that accrued prior to the date of termination.
(b)During the Employment Term, the Company hereby agrees to continue the Employee in its employ, subject to the terms and conditions of this Agreement. During the Employment Term, (1) the Employee’s position (including status, offices, titles and reporting requirements), authority, duties and responsibilities shall be at least commensurate in all material respects with the most significant of those held, exercised and assigned at any time during the 180-day period immediately preceding the Change of Control and (2) the Employee’s services shall be performed during normal business hours remotely at the Employee’s residence or another work location selected by the Employee. The Employee’s position, authority, duties and responsibilities after a Change of Control shall not be considered commensurate in all material respects with the Employee’s position, authority, duties and responsibilities prior to a Change of Control unless after the Change of Control the Employee holds an equivalent position with, and exercises substantially equivalent authority, duties and responsibilities on behalf of, the Post-Transaction Company.
3.2 Compensation and Benefits. During the Employment Term, the Employee shall be entitled to the following compensation and benefits:
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Exhibit 99.2
(a) Base Salary. The Employee shall receive an annual base salary (“Base Salary”), which shall be paid in at least monthly installments. The Base Salary shall initially be equal to 12 times the highest monthly base salary that was paid or is payable to the Employee, including any base salary which has been earned but deferred by the Employee, by the Company and its Affiliates with respect to any month in the 12-month period ending with the month that immediately precedes the month in which the Change of Control occurs. During the Employment Term, the Employee’s Base Salary shall be reviewed at such time as the Company undertakes a salary review of her peer employees (but at least annually), and, to the extent that salary increases are granted to her peer employees of the Company (or have been granted during the immediately preceding 12-month period to her peer employees of any Affiliate of the Company), the Employee shall be granted a salary increase commensurate with any increase granted to her peer employees of the Company and its Affiliates. Any increase in Base Salary shall not serve to limit or reduce any other obligation to the Employee under this Agreement. Base Salary shall not be reduced during the Employment Term (whether or not any increase in Base Salary occurs) and, if any increase in Base Salary occurs, the term Base Salary as utilized in this Agreement shall refer to Base Salary as so increased from time to time.
(b) Annual Bonus. In addition to Base Salary, the Employee shall be awarded, for each fiscal year ending during the Employment Term, an annual cash bonus (the “Bonus”) in an amount at least equal to the average of the annual bonuses paid to the Employee with respect to the three fiscal years that immediately precede the year in which the Change of Control occurs under the Company’s annual bonus plan, or any comparable bonus under a successor plan; provided, however, that if the Company has never paid an annual bonus for a full year to the Employee, the Employee shall be awarded a Bonus in an amount at least equal to the target bonus for which the Employee is eligible for the fiscal year in which the Change of Control occurs, assuming achievement at the target level of the objective performance goals established with respect to such bonus and achievement of 100% of any subjective performance goals or criteria otherwise applicable with respect to such bonus. Each such Bonus shall be paid after the end of the fiscal year and no later than the 15th day of the third month of the fiscal year next following the fiscal year for which the Bonus is awarded, unless the Employee shall timely elect to defer the receipt of such Bonus pursuant to any deferred compensation plan sponsored by the Company. For purposes of determining the value of any annual bonuses paid to the Employee in any year preceding the year in which the Change of Control occurs, all cash and stock bonuses earned by the Employee shall be valued as of the date of the grant.
(c) Fringe Benefits. The Employee shall be entitled to fringe benefits commensurate with those provided to her peer employees of the Company and its Affiliates, but in no event shall such fringe benefits be less favorable than the most favorable of those provided by the Company and its Affiliates for the Employee at any time during the one-year period immediately preceding the Change of Control or, if more favorable to the Employee, those provided generally at any time after the Change of Control to her peer employees of the Company and its Affiliates.
(d) Expenses. The Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in accordance with the most favorable agreements, policies, practices and procedures of the Company and its Affiliates in effect for the Employee at any time during the one-year period immediately preceding the Change of Control or, if more favorable to the Employee, as in effect generally at any time thereafter with respect to her peer employees of the Company and its Affiliates.
(e) Benefit Plans. (i) The Employee shall be entitled to participate in all incentive, savings and retirement plans, practices, policies and programs applicable generally to her peer employees of the Company and its Affiliates, but in no event shall such plans, practices, policies and programs provide the Employee with incentive opportunities (measured with respect to both regular and special incentive opportunities to the extent that any such distinction is applicable), savings opportunities and retirement benefit opportunities, in each case, less favorable than the most favorable of those provided by the Company
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Exhibit 99.2
and its Affiliates for the Employee under any agreements, plans, practices, policies and programs as in effect at any time during the one-year period immediately preceding the Change of Control or, if more favorable to the Employee, those provided generally at any time after the Change of Control to her peer employees of the Company and its Affiliates.
(i) The Employee and her family shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its Affiliates (including, without limitation, medical, prescription drug, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs) to the extent applicable generally to her peer employees of the Company and its Affiliates, but in no event shall such plans, practices, policies and programs provide the Employee and her family with benefits, in each case, less favorable than the most favorable of those agreements, plans, practices, policies and programs in effect for the Employee and her family at any time during the one-year period immediately preceding the Change of Control or, if more favorable to the Employee and her family, those provided generally at any time after the Change of Control to her peer employees of the Company and its Affiliates.
(ii) Without limiting the generality of the Company’s obligations under this subsection (e), the Company shall comply with all of its obligations under the benefit plans, practices, policies and programs of the Company and its Affiliates that arise in connection with a Change of Control of the Company, including without limitation all obligations that require the Company to (A) fully vest participants under the Company’s qualified or non-qualified retirement plans and (B) extend the benefits described in Section 3.5.
(f) Office and Support Staff. The Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, commensurate with those provided to her peer employees of the Company and its Affiliates.
(g) Vacation. The Employee shall be entitled to paid vacation in accordance with the most favorable agreements, plans, policies, programs and practices of the Company and its Affiliates as in effect for the Employee at any time during the one-year period immediately preceding the Change of Control or, if more favorable to the Employee, as in effect generally at any time thereafter with respect to her peer employees of the Company and its Affiliates.
(h) Indemnification. If, in connection with any agreement related to a transaction that will result in a Change of Control of the Company, an undertaking is made to provide the Board with rights to indemnification from the Company (or from any other party to such agreement), the Employee shall, by virtue of this Agreement, be entitled to the same rights to indemnification as are provided to the Board pursuant to such agreement. Otherwise, the Employee shall be entitled to indemnification rights on terms no less favorable to the Employee than those available under any Company indemnification agreements or the articles of incorporation, bylaws or resolutions of the Company at any time after the Change of Control to her peer employees of the Company. Such indemnification rights shall be with respect to all claims, actions, suits or proceedings to which the Employee is or is threatened to be made a party that arise out of or are connected to her services at any time prior to the termination of her employment, without regard to whether such claims, actions, suits or proceedings are made, asserted or arise during or after the Employment Term.
(i) Directors and Officers Insurance. If, in connection with any agreement related to a transaction that will result a Change of Control of the Company, an undertaking is made to provide the Board with continued coverage following the Change of Control under one or more directors and officers liability insurance policies, then the Employee shall, by virtue of this Agreement, be entitled to the same rights to
7
Exhibit 99.2
continued coverage under such directors and officers liability insurance policies as are provided to the Board, and the Company shall take any steps necessary to give effect to this provision. Otherwise, the Company shall agree to cover the Employee under any directors and officers liability insurance policies as are provided generally at any time after the Change of Control to her peer employees of the Company.
3.3 Obligations upon Termination after a Change of Control.
(a)Termination by Company for Reasons other than Death, Disability or Cause or by the Employee for Good Reason. If, after a Change of Control and during the Employment Term, the Company or any of its Affiliates terminates the Employee’s employment, as defined in Treasury Regulations 1.409A-1(h)(1) (“Separation from Service”), other than for Cause, death or Disability, or the Employee terminates employment for Good Reason, subject to Section 3.3(d) and Section 3.6, if applicable:
(i)the Company shall pay to the Employee in a lump sum in cash within five business days of the date of termination an amount equal to two and one-half (2½) times the sum of (1) the amount of Base Salary in effect pursuant to Section 3.2(a) hereof at the date of termination plus (2) the Employee’s target annual bonus amount for the fiscal year in which the date of termination occurs; provided, however, that, if the Employee has in effect a deferral election with respect to any percentage of the annual bonus which would otherwise become payable with respect to the fiscal year in which termination occurs, such lump sum payment shall be reduced by an amount equal to such percentage times the bonus component of the lump sum payment (which reduction amount shall be deferred in accordance with such election);
(ii)the Company shall pay to the Employee in a lump sum in cash, as promptly as practicable but in no case later than the 15th day of the third month following the end of the fiscal year of the Company in which the termination occurs, a pro rata performance bonus, the amount of which shall be determined by multiplying the annual bonus that the Employee would have earned with respect to the entire fiscal year in which the termination occurs, assuming that the Employee had served for the entire fiscal year and calculated by the Company in good faith to exclude the effects of the Change of Control on the applicable performance metrics used to calculate such bonus (including without limitation excluding the effects of any non-recurring transaction costs or any changes in overhead, interest, tax, intercompany or other expenses arising out of such transaction), by the fraction obtained by dividing the number of days in such year through the date of termination by 365; provided, however, that, if the Employee has in effect a deferral election with respect to any percentage of the annual bonus which would otherwise become payable with respect to the fiscal year in which termination occurs, such lump sum payment shall be reduced by an amount equal to such percentage times the lump sum payment (which reduction amount shall be deferred in accordance with such election); and, further provided, that if the bonus performance period in effect at the date of termination is less than a year, then the foregoing paragraph will apply with respect to such shortened performance period and all references to an annual period or 365 days shall mean the applicable shortened period or shortened number of days to the extent the context requires;
(iii)if, at the date of termination, the Company shall not yet have paid to the Employee (or deferred in accordance with any effective deferral election by the Employee) an annual bonus with respect to a fully completed fiscal year, the Company shall pay to the Employee in a lump sum in cash within five business days of the date of termination but in no case after the 15th day of the third month following the end of the fiscal year of the Company in which the termination occurs, an amount determined as follows: (A) if the Board (acting directly or indirectly through any committee or subcommittee) shall have already determined the amount of such annual bonus, such amount shall be paid, and (B) if the Board shall not have already determined the amount of such
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Exhibit 99.2
annual bonus, the amount to be paid shall be the greater of the amount provided under Section 3.2(b) hereof or the annual bonus that the Employee would have earned with respect to such completed fiscal year, based solely upon the actual level of achievement of the objective performance goals established with respect to such bonus and assuming the achievement of 100% of any subjective performance goals or criteria otherwise applicable with respect to such bonus; provided, however, that, if the Employee has in effect a deferral election with respect to any percentage of the annual bonus which would otherwise become payable with respect to such completed fiscal year, such lump sum payment shall be reduced by an amount equal to such percentage times the lump sum payment (which reduction amount shall be deferred in accordance with such election); provided, further, that any payment under this subsection (iii) (or any payment under any other provision of this Agreement calculated by reference to prior or target bonus amounts) shall be payable notwithstanding any provision to the contrary set forth in any bonus plan or program of the Company;
(iv)for a period of two years following the date of termination of employment, or such longer period as may be provided by the terms of the appropriate plan, program, practice or policy (the “Continuation Period”), the Company shall at its expense continue on behalf of the Employee and her dependents and beneficiaries the life insurance, disability, medical, dental and hospitalization benefits (including any benefit under any individual benefit arrangement that covers medical, dental or hospitalization expenses not otherwise covered under any general Company plan) provided (x) to the Employee at any time during the one-year period prior to the Change of Control or at any time thereafter or (y) to other similarly-situated employees who continue in the employ of the Company or its Affiliates during the Continuation Period. If the Employee is a Specified Employee governed by Section 3.3(d), to the extent that any benefits provided to the Employee under this Section 3.3(a)(iv) are taxable to the Employee, then, with the exception of medical insurance benefits, the value of the aggregate amount of such taxable benefits provided to the Employee pursuant to this Section 3.3(a)(iv) during the six-month period following the date of termination shall be limited to the amount specified by Section 402(g)(1)(B) of the Code for the year in which the termination occurred. The Employee shall pay the cost of any benefits that exceed the amount specified in the previous sentence during the six-month period following the date of termination, and shall be reimbursed in full by the Company during the seventh month after the date of termination. The coverage and benefits (including deductibles and costs) provided in this Section 3.3(a)(iv) during the Continuation Period shall be no less favorable to the Employee and her dependents and beneficiaries than the most favorable of such coverages and benefits during any of the periods referred to in clauses (x) or (y) above; provided, however, in the event of the Disability of the Employee during the Continuation Period, disability benefits shall, to the maximum extent possible, not be paid for the Continuation Period but shall instead commence immediately following the end of the Continuation Period. The Company’s obligation hereunder with respect to the foregoing benefits shall be limited to the extent that the Employee obtains any such benefits pursuant to a subsequent employer’s benefit plans, in which case the Company may reduce the coverage of any benefits it is required to provide the Employee hereunder as long as the aggregate coverages and benefits of the combined benefit plans is no less favorable to the Employee than the coverages and benefits required to be provided hereunder. At the end of the Continuation Period, the Employee shall have assigned to her, at no cost and with no apportionment of prepaid premiums, any assignable insurance owned by the Company that relates specifically to the Employee unless such assignment is inconsistent with the terms of any split dollar arrangement with the Employee. The Employee will be eligible for coverage under the Consolidated Omnibus Budget Reconciliation Act at the end of the Continuation Period or earlier cessation of the Company’s obligation under the foregoing provisions of this Section 3.3(a)(iv) (or, if the Employee shall not be so eligible for any reason, the Company will provide equivalent coverage);
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Exhibit 99.2
(v)the Company at its cost shall provide to the Employee outplacement assistance by a reputable firm specializing in such services for the period beginning with the termination of employment and ending one year later; and
(vi)the Company shall discharge its obligations under all other applicable sections of this Article III, including Sections 3.4, 3.5, 3.6 and 3.7.
To the extent that the amounts payable under Section 3.3(a)(iv), Section 3.3(a)(v), or Section 3.7 are deemed to be reimbursements and other separation payments under Treasury Regulations Section 1.409A-1(b)(9)(v), they shall not be deemed to provide for the deferral of compensation governed by Section 409A of the Code. If they do constitute deferral of compensation governed by Section 409A of the Code, they shall be deemed to be reimbursements or in-kind benefits governed by Treasury Regulations Section 1.409A-3(i)(1)(iv). If the previous sentence applies, (1) the amount of expenses eligible for reimbursement or in-kind benefits provided during the Employee’s taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits in any other taxable year, (2) the reimbursement of an eligible expense must be made on or before the last day of the Employee's taxable year following the taxable year in which the expense was incurred and (3) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit.
The payments and benefits provided in this Section 3.3(a) and under all of the Company’s employee benefit and compensation plans shall be without regard to any plan amendment made after any Change of Control that adversely affects in any manner the computation of payments and benefits due the Employee under such plan or the time or manner of payment of such payments and benefits, excluding plan amendments that the Company is required by law to implement. After a Change of Control no discretionary power of the Board or any committee thereof shall be used in a way (and no ambiguity in any such plan shall be construed in a way) which adversely affects in any manner any right or benefit of the Employee under any such plan.
(b)Death; Disability; Termination for Cause; or Voluntary Termination. If, after a Change of Control and during the Employment Term, the Employee’s status as an employee is terminated (1) by reason of the Employee’s death or Disability, (1) by the Company for Cause or (2) voluntarily by the Employee other than for Good Reason, this Agreement shall terminate without further obligation to the Employee or the Employee’s legal representatives (other than the timely payment or provision of those already accrued to the Employee, imposed by law or imposed pursuant to employee benefit or compensation plans, programs, practices, policies or agreements maintained by the Company or its Affiliates).
(c)Notice of Termination. Any termination by the Company for Cause or by reason of the Employee’s Disability, or by the Employee for Good Reason, shall be communicated by a Notice of Termination to the other party given in accordance with Section 5.2 of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (1) indicates the specific termination provision in this Agreement relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated and (3) if the effective date of the termination is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than 30 days after the giving of such notice), provided that the effective date for any termination by reason of the Employee’s Disability shall be the 30th day after the giving of such notice, unless prior to such 30th day the Employee shall have resumed the full-time performance of her duties. The failure by the Employee or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause, Disability or Good Reason shall not waive any right of the Employee or the Company, respectively, hereunder or preclude the Employee or the Company, respectively, from asserting such fact or circumstance in enforcing the Employee’s or the Company’s rights hereunder.
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Exhibit 99.2
(d)Six-Month Delay for Specified Employees. Notwithstanding any other provision hereof, payments hereunder which constitute deferred compensation under Section 409A of the Code and the Treasury Regulations thereunder and which are not exempt from coverage by Section 409A of the Code and the Treasury Regulations thereunder shall commence, if Employee is then a Specified Employee and payment is triggered by her Separation from Service, on the first day of the seventh month following the date of the Specified Employee’s Separation from Service, or, if earlier, the date of death of the Specified Employee. On the first day of such seventh month or on the first day of the month following the earlier death of the Specified Employee, the Specified Employee or her estate or spouse, as the case may be, shall be paid in a lump sum the amount that the Specified Employee would have been paid hereunder over the preceding six months (or, if earlier, the months preceding the date of death) but for the fact that she was a Specified Employee. Nevertheless, for all other purposes of this Agreement, the payments shall be deemed to have commenced on the date they would have had the Employee not been a Specified Employee, and payment of any remaining benefits shall be made as otherwise scheduled hereunder.
3.4 Accrued Obligations and Other Benefits. It is the intent of this Agreement that upon termination of employment for any reason following a Change of Control the Employee or her legal representatives be entitled to receive promptly, and in addition to any other benefits specifically provided, (a) the Employee’s Base Salary through the date of termination to the extent not theretofore paid, (b) any accrued vacation pay, to the extent not theretofore paid, and (c) any other amounts or benefits required to be paid or provided or which the Employee or her legal representatives are entitled to receive under any plan, program, policy, practice or agreement of the Company.
3.5 Stock Options and Other Incentives. The foregoing benefits provided for in this Article III are intended to be in addition to the value or benefit of any stock options, restricted stock, restricted stock units, performance shares or similar awards, the exercisability, vesting or payment of which is accelerated or otherwise enhanced upon a Change of Control pursuant to the terms of any stock option, incentive or other similar plan or agreement heretofore or hereafter adopted by the Company or the Post-Transaction Company.
3.6 Conditional Payment Reductions.
(a) Notwithstanding any other contrary provisions in any plan, program or policy of the Company, if all or any portion of the benefits payable under this Agreement, either alone or together with other payments and benefits that the Employee receives or is entitled to receive from the Company, would constitute a “parachute payment” within the meaning of Section 280G of the Code, the Company shall reduce the Employee’s payments and benefits payable under this Agreement to the extent necessary so that no portion thereof shall be subject to the excise tax imposed by Section 4999 of the Code, but only if, by reason of such reduction, the net after-tax benefit shall exceed the net after-tax benefit if such reduction were not made. “Net after-tax benefit” for these purposes shall mean (i) the sum of the total amount payable to Employee under the Agreement, plus all other payments and benefits which Employee receives or is then entitled to receive from the Company that, alone or in combination with the payments and benefits payable under the Agreement, would constitute a “parachute payment” within the meaning of Section 280G of the Code (each such benefit hereinafter referred to as an “Additional Parachute Payment”), less (ii) the amount of federal income taxes payable with respect to the foregoing calculated at the maximum marginal income tax rate for each year in which the foregoing shall be paid to the Employee (based upon the rate in effect for such year as set forth in the Code at the time of the payment under the Agreement), less (iii) the amount of excise taxes imposed with respect to the payments and benefits described in clause (i) above by Section 4999 of the Code. The parachute payments reduced under this section shall be those that the Employee determines provide the Employee the best economic benefit and, to the extent any parachute payments are economically equivalent with each other, each shall be reduced pro rata; provided, however, that the Employee may elect to
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Exhibit 99.2
have the non-cash payments and benefits due the Employee reduced or eliminated prior to any reduction of the cash payments due under this Agreement.
(b)All determinations required to be made under this Section 3.6 shall be made by the accounting firm that was the Company’s independent auditor prior to the Change of Control or any other third party mutually acceptable to the Employee and the Company (the “Accounting Firm”). The Accounting Firm shall provide detailed supporting calculations both to the Company and the Employee. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Absent manifest error, any determination by the Accounting Firm shall be binding upon the Company and the Employee.
(c)For purposes of determining whether and the extent to which any payments would constitute a “parachute payment” (i) no portion of any payments or benefits that the Employee shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be taken into account, (ii) no portion of the payments shall be taken into account which, in the opinion of tax counsel (“Tax Counsel”) reasonably acceptable to the Employee and selected by the Accounting Firm, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the excise tax, no portion of such payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (within the meaning set forth in Section 280G(b)(3) of the Code) allocable to such reasonable compensation, and (iii) the value of any non-cash benefit or any deferred payment or benefit included in the payments shall be determined by the Accounting Firm in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
3.7 Legal Fees. The Company agrees to reimburse the Employee for all legal fees and other expenses which the Employee may reasonably incur as a result of any contest by the Company or the Post-Transaction Company of the validity or enforceability of, or liability under, any provision of this Agreement, but only if, when and to the extent the Employee prevails with respect to such contest.
3.8 Set-Off; Mitigation. After a Change of Control, the obligations of the Company and its Affiliates to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company or its Affiliates may have against the Employee or others, other than as expressly provided to the contrary in Section 3.3(a)(iv), Section 3.10 or Section 4.3. It is the intent of this Agreement that in no event shall the Employee be obligated to seek other employment or take any other action to mitigate the amounts or benefits payable to the Employee under any of the provisions of this Agreement.
3.9 Certain Pre-Change of Control Terminations. Notwithstanding any other provision of this Agreement, the Employee’s employment shall be deemed to have been terminated following a Change of Control by the Company without Cause (and the Employee shall be entitled to receive all payments and benefits associated therewith) if the Employee’s employment is terminated by the Company or any of its Affiliates without Cause prior to a Change of Control (whether or not a Change of Control actually occurs) and such termination (1) was at the request or direction of a third party who has taken steps designed to effect a Change of Control or otherwise arose in connection with or in anticipation of a Change of Control or (2) occurred after discussions with a third party regarding a possible Change of Control transaction commenced and such discussions produced (whether before or after such termination) either a preliminary or definitive agreement with respect to such a transaction or a public announcement of the pending transaction (whether or not a Change of Control actually occurs).
3.10 Other Severance Plans. If the Employee becomes entitled to receive severance benefits under this Article III, the Company shall not be required to pay the Employee any additional severance
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Exhibit 99.2
payment under any other severance or salary continuation policy, plan, agreement or arrangement maintained by the Company or its Affiliates unless such other policy, plan, agreement or arrangement expressly provides to the contrary.
ARTICLE IV
NON-DISCLOSURE, NON-SOLICITATION AND NON-DISPARAGEMENT
4.1 Non-disclosure of Confidential Information. The Employee acknowledges and agrees that in the course of the Employee’s employment the Employee has been in a position to have access to and develop Confidential Information and will continue to be in position to receive and develop Confidential Information during the Employee’s tenure as an employee of the Company or any of its Affiliates. As long as the Employee is an employee of the Company or any of its Affiliates, the Employee shall hold in a fiduciary capacity for the benefit of the Company all Confidential Information which the Employee obtained during the Employee’s employment (whether prior to or after the Agreement Date) and shall use such Confidential Information solely in the good faith performance of her duties for the Company and its Affiliates. If the employment of the Employee is terminated for any reason, then, commencing with the termination date and continuing until the fifth anniversary of such date, the Employee shall (a) not communicate, divulge or make available to any Person (other than the Company and its Affiliates) any such Confidential Information, except with the prior written consent of the Company or as may be required by law or legal process, and (b) deliver promptly to the Company upon its written request any Confidential Information in her possession, including any duplicates thereof and any notes or other records the Employee has prepared with respect thereto, provided that Employee need not deliver to the Company, and may retain, one copy of any personal diaries, calendars, or personal notes of correspondence. If the provisions of any applicable law or the order of any court would require the Employee to disclose or otherwise make available any Confidential Information to a governmental authority or to any other third party, the Employee shall give the Company, unless it is unlawful to do so, prompt prior written notice of such required disclosure and an opportunity to contest the requirement of such disclosure or apply for a protective order with respect to such Confidential Information by appropriate proceedings.
Notwithstanding the foregoing, and in accordance with 18 U.S.C. § 1833, nothing herein prohibits Employee (1) from disclosing Confidential Information (a) in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney, and (b) solely for the purpose of reporting or investigating a suspected violation of law; or (2) from disclosing Confidential Information in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Disclosures to attorneys, made under seal, or pursuant to court order are also protected in certain circumstances under 18 U.S.C. § 1833. Further, nothing in this Agreement shall prohibit or is intended to restrict or impede the Employee from exercising the Employee’s rights under Washington’s Silenced No More Act or from disclosing or discussing (a) illegal acts of discrimination, harassment, retaliation, wage and hour violations, sexual assault, or other conduct recognized as being against a clear mandate of public policy occurring in the workplace, at work related events, between employees, or between an employer and an employee, whether on or off the employment premises, or (b) information about unlawful acts in the workplace, such as harassment or discrimination or any other conduct that the Employee has reason to believe is unlawful.
4.2 Non-solicitation and Non-disparagement.
(a) The Employee agrees that, during the term of this Agreement and for a period following the termination date of 18 months if the Employee’s employment is terminated by the Company or one of its Affiliates for Cause or by the Employee without Good Reason or one year if the Employee’s employment is terminated for any other reason (such period, the “Restricted Period”), the Employee will not,
13
Exhibit 99.2
directly or indirectly, in any capacity whatsoever, either on the Employee’s own behalf or on behalf of any other Person with whom the Employee may be employed or otherwise associated:
(i)contact any customer of the Company or its Affiliates, with which the Employee established or substantially developed a direct relationship with through the Employee’s work for the Company, to solicit, divert or entice away the business of such customer, or otherwise disrupt the relationship between such customer and the Company or its Affiliates;
(ii)make contact with any employee of the Company or its Affiliates for the purpose of soliciting such employee for hire, whether as an employee, independent contractor, consultant or otherwise, or otherwise disrupting such employee’s relationship with the Company or its Affiliates; or
(iii)make any statement or disclose any information to any customers, suppliers, lenders, lessors, licensees, other employees of the Company or its Affiliates or others that is defamatory or derogatory with respect to the business, operations, management or other employees of the Company or its Affiliates, or take any other action (excluding making truthful, non-defamatory statements in good faith that do not violate any other provision of this Agreement) that could reasonably be expected to injure the Company in its business relationships with any of the foregoing parties or result in any other detrimental effect on the Company or its Affiliates.
(b) For the avoidance of doubt, the Restricted Period applicable to the obligations set forth in Section 4.2(a)(ii) shall, in no event, be longer than eighteen months following the Employee’s termination of employment.
(c) The Employee agrees that: (i) the covenants and agreements set forth in this Article IV are reasonable in scope and duration, (ii) the Company would not have entered into this Agreement but for such covenants of the Employee, (iii) such covenants have been made as a result of arm-length bargaining in order to induce the Company to enter into this Agreement, and (iv) such covenants and agreements are reasonable and necessary for the protection of the Confidential Information, assets, goodwill and business of the Company. To the extent permitted by applicable law, the Employee covenants and agrees not to institute, maintain, prosecute or in any way aid in the institution, maintenance or prosecution of any lawsuit, action, claim, arbitration or other proceeding against the Company or any of its Affiliates with respect to the enforceability of the covenants contained in this Article IV.
4.3 Injunctive Relief; Forfeiture of Future Payments and Benefits; Other Remedies. The Employee acknowledges that a breach by the Employee of Sections 4.1 or 4.2 herein would cause immediate and irreparable harm to the Company for which an adequate monetary remedy does not exist; hence, the Employee agrees that, in the event of a breach or threatened breach by the Employee of the provisions of Sections 4.1 or 4.2 herein during or after the effective date of the Employee’s termination, the Company shall be entitled to injunctive relief restraining the Employee from such violation without the necessity of proof of actual damage or the posting of any bond, except as required by non-waivable, applicable law. Nothing herein, however, shall be construed as prohibiting the Company from pursuing any other remedy at law or in equity to which the Company may be entitled under applicable law in the event of a breach or threatened breach of this Agreement by the Employee, including without limitation the recovery of damages, costs or expenses, such as reasonable attorneys’ fees, incurred by the Company as a result of any such breach or threatened breach. In addition to the foregoing remedies, the Company shall have the right upon the occurrence of any breach of any non-disclosure, non-solicitation, and non-disparagement covenant contained in this Article IV, to cancel any unpaid severance payments, salary, bonus, commissions or reimbursements
14
Exhibit 99.2
otherwise outstanding at the termination date, including the suspension, reduction or elimination of payments and benefits under Article III. The Employee acknowledges that any such suspension, reduction or elimination of payments would not constitute, and should not be characterized as, liquidated damages.
4.4 Governing Law of this Article IV; Consent to Jurisdiction. Any dispute regarding the reasonableness of the covenants and agreements set forth in this Article IV or the scope and duration thereof or the remedies available to the Company upon any breach of such covenants and agreements, shall be governed by and interpreted in accordance with the laws of the State of Washington. The parties mutually agree that any such disputes shall be resolved in the United States District Court for the Western District of Washington or the King County Superior Court in Seattle, Washington. The parties agree that it is their mutual intent that the provisions of this Agreement be enforced to the fullest extent permitted under applicable law, whether now or hereafter in effect, and, to the extent permitted by applicable law, the parties waive any provision of applicable law that would render any provision of Article IV invalid or unenforceable.
ARTICLE V
MISCELLANEOUS
5.1 Binding Effect; Successors.
(a)This Agreement shall be binding upon and inure to the benefit of the Company and its successors or assigns, but the Company may assign this Agreement only (i) to an Affiliate or (ii) 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 under this Agreement, either contractually on the terms specified below or as a matter of law.
(b)This Agreement is personal to the Employee and shall not be assignable by the Employee without the consent of the Company (there being no obligation to give such consent) other than such rights or benefits as are transferred by will or the laws of descent and distribution, which shall inure to the benefit of the Employee’s legal representatives.
(c)The Company shall require any successor to or assignee of (whether direct or indirect, by purchase, share exchange, merger, consolidation or otherwise) all or substantially all of the assets or businesses of the Company (1) to assume unconditionally and expressly this Agreement and (2) to agree to perform or to cause to be performed all of the obligations under this Agreement in the same manner and to the same extent as would have been required of the Company had no assignment or succession occurred.
(d)The Company shall also require all entities that control or that after the transaction will control (directly or indirectly) the Company or any such successor or assignee to agree to cause to be performed all of the obligations under this Agreement.
(e)The obligations of the Company and the Employee which by their nature may require either partial or total performance after the expiration of the term of the Agreement shall survive such expiration.
15
Exhibit 99.2
5.2 Notices. All notices hereunder must be in writing and shall be deemed to have been given upon receipt of delivery by: (1) hand (against a receipt therefor), (2) certified or registered mail, postage prepaid, return receipt requested, (3) a nationally recognized overnight courier service or (4) telecopy transmission with confirmation of delivery. All such notices must be addressed as follows:
If to the Company, to:
Lumen Technologies, Inc.
931 14th Street
Denver, Colorado 80202
Attn: Chief Legal Officer
If to the Employee, to:
The last address that the Company has in its personal records for the Employee.
or such other address as to which any party hereto may have notified the other in writing.
5.3 Governing Law. This Agreement shall be construed and enforced in accordance with and governed by the internal laws of the State of Washington without regard to principles of conflict of laws.
5.4 Withholding. The Employee agrees that the Company has the right to withhold, from the amounts payable pursuant to this Agreement, all amounts required to be withheld under applicable income or employment tax laws, or as otherwise stated in documents granting rights that are affected by this Agreement.
5.5 Amendment and Compliance with Law. No provision of this Agreement may be modified or amended except by an instrument in writing signed by both parties. Notwithstanding any other provision of this Agreement, it is the intention of the parties to this Agreement that no payment or entitlement pursuant to this Agreement will give rise to any adverse tax consequences to the Employee under Section 409A of the Code and Treasury Regulations and other interpretive guidance issued thereunder, including those issued after the date hereof (collectively, “Section 409A”). This Agreement and any amendments hereto shall be interpreted and administered to that end and (i) to the maximum extent permitted by law, no effect shall be given to any provision herein, any amendment hereto or any action taken hereunder in a manner that reasonably could be expected to give rise to adverse tax consequences under Section 409A and (i) the parties shall take any corrective action reasonably within their control that are necessary to avoid such adverse tax consequences.
5.6 Severability. If any term or provision of this Agreement, or the application thereof to any person or circumstance, shall at any time or to any extent be invalid, illegal or unenforceable in any respect as written, the Employee and the Company intend for any court construing this Agreement to modify or limit such provision so as to render it valid and enforceable to the fullest extent allowed by law. Any such provision that is not susceptible of such reformation shall be ignored so as to not affect any other term or provision hereof, and the remainder of this Agreement, or the application of such term or provision to persons or circumstances other than those as to which it is held invalid, illegal or unenforceable, shall not be affected thereby and shall be valid and enforced to the fullest extent permitted by law.
5.7 Waiver of Breach. Except as expressly provided herein to the contrary, the failure by any party to enforce any of its rights hereunder shall not be deemed to be a waiver of such rights, unless such waiver is an express written waiver. The waiver by either party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof.
16
Exhibit 99.2
5.8 Remedies Not Exclusive. No remedy specified herein shall be deemed to be such party’s exclusive remedy, and accordingly, in addition to all of the rights and remedies provided for in this Agreement, the parties shall have all other rights and remedies provided to them by applicable law, rule or regulation, including without limitation the right to claim interest with respect to any payment not timely made hereunder.
5.9 Company’s Reservation of Rights. The Employee acknowledges and understands that (1) the Employee is employed “at will” by either the Company or one of its Affiliates (the “ Employer”), (2) the Employee serves at the pleasure of the board of directors of the Employer, and (3) the Employer has the right at any time to terminate the Employee’s status as an employee, or to change or diminish her status during the Employment Term, subject to the rights of the Employee to claim the benefits conferred by this Agreement. Notwithstanding any other provisions of this Agreement to the contrary, this Agreement shall not entitle the Employee or her legal representatives to any severance or other benefits of any kind prior to a Change of Control or to any such benefits if Employee is not employed by the Company or one of its Affiliates on the date of a Change of Control, except in each case for those rights afforded under Section 3.9.
5.10 Non-exclusivity of Rights. Subject to Section 5.9, nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any plan, program, policy or practice provided by the Company or any of its Affiliates and for which the Employee may qualify, nor shall anything herein limit or otherwise restrict such rights as the Employee may have under any contract or agreement with the Company or any of its Affiliates. For the avoidance of doubt, however, this Agreement amends, restates and supersedes the Prior Agreement in its entirety and the Employee shall not be eligible to participate in the Severance Plan except to the extent incorporated in this Agreement.
5.11 Demand for Benefits. Unless otherwise provided herein, the payment or payments due hereunder shall be paid to the Employee without the need for demand, and to a beneficiary upon the receipt of the beneficiary’s address and social security number. In all such cases, the Employee or beneficiary shall provide all required tax withholding information or forms upon the Company’s request. Nevertheless, the Employee or a Person claiming to be a beneficiary who claims entitlement to a benefit can file a claim for benefits hereunder with the Company. Unless otherwise provided herein, the Company shall accept or reject the claim within ten business days of its receipt. If the claim is denied, the Company shall give the reason for denial in a written notice that refers to the provision of this Agreement that forms the basis of the denial. If any additional information or material is necessary to perfect the claim, the Company will identify these items in writing and explain why such additional information is necessary.
5.12 Authority. The Company represents and warrants that (1) its execution and delivery of this Agreement has been duly authorized by the Board and (2) no other corporate proceedings are necessary to authorize the Company’s execution, delivery and performance of this Agreement.
5.13 Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.
5.14 Interpretation. Any reference to any section of the Code or the Treasury Regulations shall be deemed to also refer to any successor provisions thereto.
5.15 The Employee’s Acknowledgment. The Employee represents to the Company that she has read and understands, and agrees to be bound by, each of the terms of this Agreement, including Article IV.
17
Exhibit 99.2
IN WITNESS WHEREOF, the Company and the Employee have caused this Agreement to be executed as of the Agreement Date.
LUMEN TECHNOLOGIES, INC.
By: /s/ Jennifer Hodges _____________________
Jennifer Hodges
Executive Vice President, Chief Legal Officer and Secretary
EMPLOYEE
/s/ Kate Johnson____________________________
Kate Johnson
Chief Executive Officer
18
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