RCN CORPORATION
AMENDED AND RESTATED CHANGE OF CONTROL SEVERANCE
PLAN
1. Term of Plan; General . This
Plan shall become effective on the Effective Date. For the sake of
clarity, no benefits shall be provided hereunder in respect of a
Participant’s termination of employment for any reason prior
to the Effective Date. Capitalized terms not otherwise defined
shall have the meanings set forth on Exhibit A
hereto.
2. Participants Covered . This Plan
shall apply to Participants who are employed by RCN immediately
prior to a Change of Control.
3. Selection of Participants . The
Compensation Committee of the Board (the “ Committee
”) shall designate those employees of the Employer who shall
be considered to be Participants hereunder through a formal
designation letter (the “ Designation Letter ”)
specifying the terms and conditions of the employee’s
participation. An employee who has not received a Designation
Letter from the Committee shall not be a Participant hereunder.
Except as set forth in the Designation Letter, the Committee may
revoke an employee’s designation as a Participant at any
time, provided, however, that the Committee may not revoke an
employee’s designation as a Participant (i) at the
request of a third party in contemplation of a Change of Control,
or otherwise in connection with or in anticipation of a
specifically-contemplated Change of Control, and in either case,
such Change of Control occurs within one year after such
revocation, or (ii) if any severance obligations owed to such
Participant remain outstanding and unpaid at the time of
revocation.
4. Compensation Upon Termination .
The Participant shall be entitled to the severance benefits
provided in this Section 4 hereof in the event that a Change
of Control occurs during the Protection Period, and the
Participant’s employment with all Employers is subsequently
terminated during the Protection Period by an Employer without
Cause or by the Participant for Good Reason (a “
Qualifying Termination ”). Notwithstanding the
foregoing, the Participant shall not be entitled to severance
benefits in the event of a termination of employment due to the
Participant’s voluntary termination without Good Reason, an
Employer’s termination of the Participant for Cause or on
account of death or Disability. Upon termination of the
Participant’s employment as provided above, each Participant
shall be entitled to the following benefits:
a. Severance . In the event of a
Qualifying Termination during the Protection Period, a Participant
shall be entitled to a lump sum payment equal to (i) his or
her then-Base Salary for a twelve (12) month period,
(ii) an amount equal to such Participant’s target bonus,
and (iii) a prorated portion of the Participant’s target
bonus (based upon the portion of the year of termination elapsed
prior to the Participant’s Qualifying Termination, calculated
as if the Company had achieved 100% of any bonus targets for the
year of termination); provided that to receive any such payments,
the Participant shall be required to execute and not revoke a
customary form of separation and release agreement (the “
Release ”).
b. Additional Payments . In addition to
the severance payment in (a), above, the Participants shall receive
the following additional payments, payable in a lump sum promptly
after the Participant’s Termination Date: (i) any
accrued but unpaid Base Salary through the Termination Date,
(ii) any accrued but unpaid bonus payments attributable to
periods prior to the year of termination, and (iii) an amount,
if any, equal to any accrued vacation in full satisfaction of the
Participant’s rights thereto.
c. Equity Acceleration . Upon a
Qualifying Termination, all options, restricted stock awards,
restricted stock units or other similar awards then held by the
Participant shall become vested and, as applicable,
exercisable.
d. Welfare Benefits . RCN and the
Participant shall continue to make such contributions as were
required to be paid by RCN and the Participant immediately prior to
the Termination Date for, and the Participant shall continue to
receive, medical, dental, and vision benefits for the Participant
and the Participant’s eligible dependents on the same basis
as in effect prior to the Change of Control or the
Participant’s Termination Date, whichever is deemed to
provide for more substantial benefits, for the one-year period
following the Participant’s date of termination (the “
Severance Period ”); thereafter, the Participant may
continue to be covered under the plans of the Employer providing
such benefits at the Participant’s expense at the applicable
COBRA rate for the duration of the Consolidated Omnibus
Reconciliation Act of 1985, as amended (“ COBRA
”) period which begins to run as of the Termination Date of
the Participant; provided , however , in the event
that the Participant commences comparable benefit coverage with a
subsequent employer during the Severance Period, such Employer
benefit coverage shall cease. RCN shall be entitled to reduce the
amount of the payment to be made under Section 5(a) in the amount
of the sum of the contributions required to be made by Participant
during the Severance Period in respect of the benefits to be
provided to Participants under this Section 5(c) (the
“Participant Contributions”); provided that, in the
event Participant commences comparable benefit coverage with an
alternative provider prior to the end of the Severance Period, RCN
shall pay unused portion of the Participant Contributions to
Participant promptly.
e. Section 409A . Any payments
required to be made hereunder during the six month period following
a Participant’s Qualifying Termination shall be deferred and
paid at the expiration of such period.
f. Withholding . Payments and benefits
provided pursuant to this Section 5 shall be subject only to
any applicable payroll and other taxes required to be
withheld.
g. No Mitigation . The Participant shall
not be required to mitigate the amount of any payment provided for
in this Plan by seeking other employment or otherwise and no such
payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Participant in any
subsequent employment, other than is set forth in
Section 5(c).
h. Offset for Other Severance . In the
event that the Participant is eligible for severance under any
other plan or agreement of RCN or any Employer, then any cash
severance amounts payable pursuant to this Plan shall be reduced by
the amount of any cash severance payments payable under such other
plan or agreement.
5. Gross-Up . Except as otherwise
provided in a Participant’s Designation Letter (which letter
may not eliminate the requirement that any payments to Participant
exceed the Safe Harbor Limit by greater than 10% before such
Participant would be entitled to a Gross-Up Payment), each
Participant shall additionally be entitled to the benefits
specified in Exhibit B attached hereto.
6. Notices . Termination of the
Participant by an Employer for any reason shall be made by delivery
to the Participant a written notice specifying the basis for such
termination (“ Notice of Termination ”). For the
purposes of this Plan, notices and all other communications
provided for in the Plan shall be in writing and shall be deemed to
have been duly given when personally delivered, delivered by a
nationally recognized overnight delivery service, or sent by
certified mail, return receipt requested, postage prepaid,
addressed to the respective addresses last given by each party to
the other, provided that all notices to RCN shall be directed to
the attention of the General Counsel with a copy to the Secretary
of RCN. All notices and communications shall be deemed to have been
received on the date of delivery thereof or on the third business
day after the mailing thereof, except that notice of change of
address shall be effective only upon receipt.
7. Amendment and Termination . This
Plan may not be amended or terminated during the Protection Period.
The Board may amend, modify or terminate the Plan prior to the
Effective Date; provided , however , that the Board
may not amend, modify, or terminate the Plan (i) at the
request of a third party in contemplation of a Change of Control,
or otherwise arose in connection with or anticipation of a
specifically-contemplated Change of Control, and such Change of
Control occurs within one year after such amendment or termination
or (ii) until all severance obligations under the Plan have
been performed, if any such amendment or modification is adverse to
any Participant.
8. Non-exclusivity of Rights .
Nothing in this Plan shall prevent or limit the Participant’s
continuing or future participation in any benefit, bonus, incentive
or other plan or program provided by RCN or any of its subsidiaries
and for which the Participant may qualify, nor shall anything
herein limit or reduce such rights as the Participant may have
under any agreements with RCN or any of its subsidiaries (although
any such severance benefits reduce the severance payable under this
Plan). Amounts which are vested benefits or which the Participant
is otherwise entitled to receive under any plan or program of RCN
or any of its subsidiaries shall be payable in accordance with such
plan or program, except as explicitly modified by this
Plan.
9. Joint and Several Liability .
Each entity included in the definition of “Employer”
and any successors or assigns shall be jointly and severally liable
with RCN under this Plan.
10. Governing Law; Disputes . This
Plan shall be governed by and construed and enforced in accordance
with the laws of the State of New York without giving effect to the
conflict of law principles thereof. For purposes of jurisdiction
and venue, RCN and each Employer hereby consents to jurisdiction
and venue in any action, suit or proceeding in any court of
competent jurisdiction in any state in which the Participant
resides at the commencement o
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