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Exhibit 10.4(a)
AMENDED AND RESTATED
CHANGE OF
CONTROL AGREEMENT
AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT (this
“Agreement”), dated effective January 1, 2008 (the
“Restatement Date”), between CenturyTel, Inc., a
Louisiana corporation (the “Company”), and Glen F.
Post, III (the “Employee”).
W I T N E S S E T H:
WHEREAS , the Company and Employee entered into a change of
control agreement (the “Original Agreement”) dated
effective as of February 22, 2000 (the “Agreement
Date”);
WHEREAS , in connection with entering into the Original
Agreement, the Board of Directors of the Company (the
“Board”) determined that (i) it was in the best
interests of the Company and its shareholders to take steps
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 change of control of the Company,
and (ii) the Original Agreement accomplished these and other
related objectives; and
WHEREAS , in order to ensure that the Original Agreement
complies with Section 409A of the Internal Revenue Code of 1986 and
the regulations promulgated thereunder by the U.S. Department of
the Treasury (the “Treasury Regulations”), the Board
has determined that it is necessary and appropriate to amend and
restate (i) various provisions in Article III of the Original
Agreement relating to the payment of benefits thereunder and (ii)
certain other related provisions and definitions;
NOW , THEREFORE , the parties
agree to amend and restate the Original Agreement so that it reads
in its entirety 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
Cause.
(a) “Cause” shall
mean:
(i) conviction
of a felony;
(ii) habitual
intoxication during working hours;
(iii) habitual
abuse of or addiction to a controlled dangerous substance;
or
(iv) the
willful and continued failure of the Employee to perform
substantially the Employee’s duties with the Company or
its Affiliates (other than any such failure resulting from
incapacity due to physical or mental illness or the
Employee’s termination of employment for Good Reason)
for a period of 15 days after a written demand for substantial
performance is delivered to the Employee by the Board which
specifically identifies the manner in which the Board believes
that the Employee has not substantially performed the
Employee’s duties.
(b) For
purposes of this Section 1.3, no act or failure to act on the
part of the Employee shall be considered “willful”
unless it is done, or omitted to be done, by the Employee in
bad faith and without reasonable belief that the
Employee’s action or omission was in the best interests
of the Company or its Affiliates. Any act, or
failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions
of a senior officer of the Company or based upon the advice of
counsel for the Company or its Affiliates shall be
conclusively presumed to be done, or omitted to be done, by
the Employee in good faith and in the best interests of the
Company or its Affiliates. Any termination by the
Company or any of its Affiliates of the Employee’s
employment during the Employment Term (as defined in Section
1.8) shall not be deemed to be for Cause unless the
Employee’s action or inaction meets the foregoing
standard and until there shall have been delivered to the
Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice is provided to
the Employee and the Employee is given an opportunity,
together with counsel, to be heard before the Board), finding
that, in the good faith opinion of the Board, the Employee is
guilty of the conduct described in subparagraph (a) above, and
specifying the particulars thereof in detail.
(c) No
action or inaction shall be deemed the basis for Cause unless
the Employee is terminated therefor within 120 days after such
action or omission is known to the Chairman of any committee
of the Board.
(d) In
the event that the existence of Cause shall become an issue in
any action or proceeding between the Company and the Employee,
the Company shall, notwithstanding the finding of the Board
referenced above, have the burden of establishing that the
actions or inactions deemed the basis for Cause did in fact
occur and do constitute Cause and that the Company has
satisfied the procedural requirements of this
provision. The satisfaction of the Company’s
burden shall require clear and convincing
evidence. Any purported termination of employment
of the Employee by the Company which does not meet each and
every substantive and procedural requirement of this provision
shall be treated for all purposes under this Agreement as a
termination of employment without Cause.
1.4
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 1.4(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 corporation pursuant to a
Business Combination that does not constitute a Change of
Control under Section 1.4(c) hereof; or
(b) individuals
who, as of the Restatement 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 Restatement 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,
(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 Corporation (as defined in
Section 1.11 hereof), and
(ii) except
to the extent that such ownership existed prior to the
Business Combination, no Person (excluding the
Post-Transaction Corporation and any employee benefit plan or
related trust of either the Company, the Post-Transaction
Corporation or any subsidiary of either corporation)
Beneficially Owns, directly or indirectly, 20% or more of the
then outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or more of the
combined voting power of the then outstanding voting
securities of such corporation, and
(iii) at
least a majority of the members of the board of directors of
the Post-Transaction Corporation were members of the Incumbent
Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business
Combination; or
(d) approval
by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
1.5
Code.
“Code” shall mean the Internal Revenue
Code of 1986, as amended from time to time.
1.6
Company.
“Company” shall mean CenturyTel, 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.
1.7
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 either 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 rendered incapable because
of physical or mental illness of satisfactorily discharging
his 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 his legal
representatives so certifies in writing, and (c) the Board
determines that the Employee has become disabled.
1.8
Employment
Term. “Employment Term” shall
mean the period commencing on the date of a Change of Control
and ending on the third anniversary of such date.
1.9
Good
Reason. (a) Any act or failure
to act by the Company or its Affiliates specified in this
Section 1.9 shall constitute “Good
Reason” unless the Employee shall otherwise expressly
agree in a writing that specifically refers to this Section
1.9:
(i) 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
Corporation;
(ii) 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 such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith
that the Company remedies within 10 days after its receipt of
written notice thereof from the Employee;
(iii) A
material increase in the Employee’s responsibilities or
duties without a commensurate increase in total
compensation;
(iv) Any
failure by the Company to comply with and satisfy Sections 4.1
(c) or (d) of this Agreement;
(v) Any
failure by the Company or its Affiliates to comply with any of
the other provisions of this Agreement, other than an
isolated, insubstantial and inadvertent failure not occurring
in bad faith that the Company remedies within 10 days after
its receipt of written notice thereof from the
Employee;
(vi) Any
directive requiring the Employee to be based at any office or
location other than as provided in Section 3.1(b)(ii) hereof
or requiring the Employee to travel on business to a
substantially greater extent than required immediately prior
to the Change of Control; or
(vii) Any
purported termination of the Employee’s employment
otherwise than as expressly permitted by this
Agreement.
(b) For
purposes of this Section 1.9, any good faith determination of
“Good Reason” made by the Employee shall be
conclusive and binding for all purposes, unless the Company
establishes by clear and convincing evidence that the Employee
did not have any reasonable basis for such
determination.
(c) No
action or inaction by the Company shall be deemed the basis
for Good Reason unless the Employee asserts his right
hereunder to terminate employment with Good Reason prior to
the first anniversary of the date on which the Employee
obtained actual knowledge of such act or
omission. Except as otherwise provided in the prior
sentence, neither the Employee’s continued employment
with the Company or its Affiliates nor any delay in the
Employee’s assertion of his rights to terminate
employment with Good Reason shall be deemed to constitute a
waiver of any of the Employee’s rights
hereunder.
(d) Anything
in this Agreement to the contrary notwithstanding, a
resignation by the Employee for any reason during the 30-day
period immediately following the first anniversary of the
Change of Control shall be deemed to be a termination for Good
Reason and the Employee shall be entitled to receive all
payments and benefits hereunder associated
therewith.
1.10
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.
1.11
Post-Transaction
Corporation. Unless a Change of Control
results from a Business Combination (as defined in Section
1.4(c) hereof), “Post-Transaction Corporation”
shall mean the Company after the Change of
Control. If a Change of Control results from a
Business Combination, “Post-Transaction
Corporation” shall mean the corporation or other entity
resulting from the Business Combination unless, as a result of
such Business Combination, an ultimate parent corporation
controls such resulting entity, the Company or all or
substantially all of the Company’s assets either
directly or indirectly, in which case “Post-Transaction
Corporation” shall mean such ultimate parent
corporation.
1.12
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 or its
Compensation Committee, or by operation of law or such
regulation.
ARTICLE II
STATUS OF CHANGE OF CONTROL AGREEMENTS
Notwithstanding
any provisions thereof, as of the Restatement Date, this
Agreement amends and restates the Original Agreement and
supersedes any and all prior agreements between the Company
and the Employee that provide for severance benefits in the
event of a Change of Control of the Company, as defined
therein.
ARTICLE III
CHANGE OF CONTROL BENEFITS
3.1
Employment
Term and Capacity after Change of Control.
(a) This Agreement was originally
effective as of the Agreement Date and has been in effect
continuously thereafter. Commencing on January 1, 2002 and
each January 1 thereafter, the term of this Agreement has been
and shall automatically be extended for one additional year
unless, not later than June 30 of the preceding year, the
Company 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 third 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, (i) 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 (ii) the
Employee’s services shall be performed during normal
business hours at the location of the Company’s
principal executive office at the time of the Change of
Control, or the office or location where the Employee was
employed immediately preceding the Change of Control or any
relocation of any such site to a location that is not more
than 35 miles from its location at the time of 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
Corporation.
3.2
Compensation
and Benefits. During the Employment Term,
the Employee shall be entitled to the following compensation
and benefits:
(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 his
peer employees (but at least annually), and, to the extent
that salary increases are granted to his peer employees of the
Company (or have been granted during the immediately preceding
12-month period to his peer employees of any Affiliate of the
Company), the Employee shall be granted a salary increase
commensurate with any increase granted to his 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 15 th
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 the CenturyTel, Inc. Supplemental Dollars &
Sense Plan. 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 (including, but not limited to, any cash
payments made in lieu thereof) commensurate with those
provided to his 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 his 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 his 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 his
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 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 his peer
employees of the Company and its Affiliates.
(ii) The
Employee and his 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 his peer employees of the Company and
its Affiliates, but in no event shall such plans, practices,
policies and programs provide the Employee and his 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 his family at any time during
the one-year period immediately preceding the Change of
Control or, if more favorable to the Employee and his family,
those provided generally at any time after the Change of
Control to his peer employees of the Company and its
Affiliates.
(iii) 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,
(B) fully vest employees meeting certain age and service
requirements with post-retirement medical, dental and life
insurance, or (C) 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 his 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 his 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, t
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