Exhibit 10.14
AMENDED EMPLOYMENT AGREEMENT
Mary A. Wilderotter
This AMENDED EMPLOYMENT AGREEMENT (the
"Agreement") is dated as of December
29, 2008 (the "Effective Date")
by and between Frontier
Communications
Corporation (the "Company") and Mary A. Wilderotter
("Executive").
WHEREAS, Executive and the
Company entered into an employment agreement
(the "Original Agreement") as of November
1, 2004 (the "Original Effective
Date"), embodying the terms of Executive's
employment and pursuant to which
Executive has been serving as President and
Chief Executive Officer of the
Company;
WHEREAS, this Agreement amends
and restates the Original Agreement as of
the Effective Date in order, inter alia, to
evidence formal compliance with
Section 409A of the Internal Revenue Code of 1986, as
amended, and the guidance
thereunder (such Section, referenced herein as
"Section 409A"; and such code,
referenced herein as the "Code");
NOW, THEREFORE, in
consideration of the premises and mutual
covenants
herein and for other good and valuable
consideration, the parties agree as
follows:
1. Term of Employment.
Subject to the provisions of Section 8 of
this
Agreement, Executive shall be
employed by the Company, and
any of its
subsidiaries that the Board of Directors of the
Company (the "Board") shall
designate for a period commencing on the Original
Effective Date and ending on
the fifth anniversary thereof (the "Initial Term"), on the
terms and subject to
the conditions set forth in this Agreement. Following the Initial
Term, the term
of employment under this Agreement shall automatically be renewed
for additional
terms of one year on the last day of the Initial Term and
each anniversary of
the last day of the Initial Term (the Initial Term and any
annual extensions of
the term of this Agreement, referenced
together herein as the "Employment
Term"), subject to Section 8 of this
Agreement, unless the Company or the
Executive gives the other party written notice of
non-renewal at least 90 days
prior to such last day or anniversary. A written notice of
non-renewal given by
the Company to the Executive shall be
considered a Notice of Termination
(pursuant to Section 8(e) of this Agreement) of a
termination without Cause by
the Company and shall constitute a termination without Cause
under Section 8(c)
of this Agreement at the expiration of such
Employment Term for all purposes
hereunder.
2. Position.
a. During the Employment Term, Executive
shall serve as President and Chief
Executive Officer of the Company and shall report directly to the
Board. In such
position, Executive shall have such duties and
authority commensurate with the
position of chief executive officer of a company of similar
size and nature. As
soon as practicable after the Original Effective Date,
Executive shall become a
member of the Board.
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b. During the Employment
Term, Executive will devote Executive's
full
business time and best efforts (excluding any periods of vacation
or sick leave)
to the performance of Executive's duties
hereunder and will not engage in any
other business, profession or occupation for
compensation or otherwise which
would conflict or interfere with the rendition of such
services either directly
or indirectly, without the prior written consent
of the Board; provided that
nothing herein shall preclude Executive (i) subject to the prior
approval of the
Board, from accepting appointment to
or continue to serve on any board of
directors or trustees of any
business corporation or
any charitable
organization, or (ii) from making personal or
family investments; provided,
however, in each case under this Section 2(b)(i) or (ii) that
such activities,
in the aggregate, do not conflict
or interfere with the performance
of
Executive's duties hereunder or conflict with Section 10 of this
Agreement.
3. Base Salary. During the Employment
Term, the Company shall pay Executive
a base salary at the annual rate of
$700,000, payable by payroll check in
substantially equal periodic payments in accordance with the
Company's practices
for other executive employees, as such practices may be
determined from time to
time. Executive shall be entitled to such increases in
Executive's base salary,
if any, as may be determined from time to time in the
sole discretion of the
Board. Executive's annual base
salary, as in effect from time to time, is
hereinafter referred to as the "Base Salary".
4. Annual Bonus. During the Employment
Term, Executive shall be eligible to
earn an annual cash bonus award (an "Annual Bonus"),
payable by payroll check,
with a target bonus amount equal to
100% of the Base Salary (the "Target
Bonus"), with adjustments based on the
schedules set forth in the Citizens
Incentive Plan or any successor plan, as each may be
amended from time to time
(the "Incentive Plan") but the adjustments shall in no
event be less favorable
to Executive than those set forth in such
Plan for the 2004 calendar year;
provided, however, that in no event shall the
Annual Bonus in respect of the
2004 calendar year be less than $700,000. The Annual
Bonus for a calendar year
shall be paid no later than permitted under the Incentive Plan and
no later than
the date that other senior executive
officers of the Company are paid their
annual bonuses for such calendar year.
5. Long-Term Incentive. As soon as
practicable after the Original Effective
Date, Executive shall upon commencement of her employment
hereunder, receive a
grant of 150,000 restricted shares of
Common Stock (with the other grants
hereunder, the "Restricted Shares"). With respect to each fiscal
year during the
Employment Term after 2004, the Company shall grant no later
than each March of
the following year (commencing with
March, 2006) to Executive a number of
Restricted Shares with an aggregate value
on the date of each grant equal to
between $1,000,000 and $2,000,000, as determined by the
Compensation Committee
of the Board (the "Compensation Committee"). Subject to
Section 8(b)(ii)(D) and
Section 8(c)(iii)(E), below, each annual grant of
Restricted Shares shall vest
and become non-forfeitable as to 20%
(25%, commencing with the grant
in
February, 2007) of the shares initially granted, on each
anniversary of the date
of grant and shall be fully vested and
100% non-forfeitable upon the fifth
anniversary (fourth anniversary, commencing with the grant in
February, 2007) of
the date of grant; provided, however, that
Executive shall be entitled to
participate in any program the Company
maintains to allow employees to use
vested shares for the payment of applicable taxes at the time of
such vesting.
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6. Employee Benefits; Business
Expenses.
a. Employee Benefits.
During the Employment Term, Executive (and
her
eligible dependents) shall be entitled to participate in the
Company's pension,
profit sharing, medical, dental, life insurance and other employee
benefit plans
(other than severance plans) (the "Company
Plans"), as in effect from time to
time (collectively the "Employee Benefits") on the same basis
as those benefits
are generally made available to other senior
executives of the Company, at a
level of participation commensurate with her position.
b. Business Expenses and Perquisites.
(i)
Expenses. During the Employment Term, reasonable business
expenses
incurred by Executive in the
performance of Executive's duties hereunder
shall be reimbursed by
the Company in accordance with
the Company's
policies.
(ii)
Perquisites. During the Employment Term,
Executive shall be
entitled to receive such
perquisites as are generally made available
to
other senior executives of the Company at
a level that is commensurate with
her position.
7. Relocation Period.
During the period commencing on
the Original
Effective Date and ending no later than the
first anniversary thereof (the
"Relocation Period"), Executive
is expected to arrange relocation
from
California to Connecticut on a
permanent basis for her, her spouse and her
dependents. The Company shall, during the
Relocation Period, pay or reimburse
Executive for all reasonable expenses incurred
for temporary housing, local
ground transportation, travel to and from California for her, her
spouse and her
dependents, closing costs and moving expenses in
connection with the purchase
and sale of permanent housing and other costs and expenses during
the Relocation
Period related to her maintaining a
residence separate from her family and
relocating to Connecticut; provided,
however, that no later than November 1,
2005, Executive shall have relocated to Connecticut and no
further payments for
expenses under this Section 7 that are incurred after the end
of the Relocation
Period shall be borne by the Company.
The Company shall pay or reimburse
Executive under this Section 7 for all costs and
expenses incurred during the
Relocation Period in an aggregate amount up to $500,000.
8. Termination.
Executive's employment hereunder may be
terminated by
either party at any time and for any reason; provided
that Executive will be
required to give the Company at least 60 days
advance written notice of any
resignation of Executive's employment (30 days if such
resignation is for "Good
Reason" (as hereinafter defined)). Notwithstanding any
other provision of this
Agreement other than Section 13(l) through (p), the provisions of
this Section 8
shall exclusively govern Executive's rights upon termination
of employment with
the Company.
a. By the Company for
Cause or by Executive Resignation Without
Good
Reason.
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(i) The
Employment Term and Executive's employment
hereunder may be
terminated by the Company for Cause (as
defined below) and shall terminate
automatically upon Executive's
resignation without Good Reason; provided
that Executive will be
required to give the Company at least 60
days
advance written notice of such
resignation. For purposes of this Agreement,
a failure by Executive to
have effected a relocation to
Connecticut,
reasonably acceptable to the Board before
November 1, 2005, shall be deemed
to be a resignation
without Good Reason by Executive for all
purposes
hereunder, effective as of
November 1, 2005; provided, however, if the
Board does not accept that such
relocation has occurred before November 1,
2005, Executive shall be given
written notice of that fact by the Board as
soon as reasonably practicable upon
such determination and the resolution
of such issue shall be dealt
with using the same procedures as would be
used in the last two sentences of Section
8(a)(ii).
(ii) For
purposes of this Agreement, "Cause" shall mean
Executive's
(A) willful and continued
failure (other than as a result of physical or
mental illness or injury) to perform
her material duties (provided such
duties are as described in
Section 2) to the Company or its subsidiaries
which continues beyond 10
days after a written demand for
substantial
performance is delivered to
Executive by the Company (the "Cure Period"),
which demand shall
identify and describe such failure with
sufficient
specificity to allow
Executive to respond; (B) willful or
intentional
conduct that causes
material and demonstrable injury,
monetarily or
otherwise, to the Company; (C)
conviction of, or a plea of nolo contendere
to, a crime constituting (x) a
felony under the laws of the United States
or any state thereof, or (y) a
misdemeanor involving moral turpitude; or
(D) material breach of a material
provision of this Agreement, including,
without limitation,
engaging in any action in breach of
Section 9 or
Section 10 of this Agreement,
which continues beyond the Cure Period (to
the extent that, in the
Board's reasonable judgment, such breach can
be
cured). For purposes of this Section
8(a)(ii), no act, or failure to act,
on the part of Executive shall
be considered "willful" or "intentional"
unless it is done, or omitted to be
done, by Executive in bad faith and
without reasonable belief that
Executive's action or inaction was in the
best interests of the
Company. Any act, or failure to act, based
upon
authority given pursuant to a resolution
duly adopted by the Board or based
upon the advice of counsel for the Company
shall be conclusively presumed
to be done, or omitted to be done,
by Executive in good faith and in the
best interests of the Company. Any
determination that Executive has engaged
in conduct for which the Board wishes to
terminate Executive's employment
shall be made after a meeting of the
nonemployee directors of the Board at
which Executive shall be invited to
appear, with counsel, to respond to the
allegations set forth in
the written notice to the Executive
of such
meeting (which notice
shall provide sufficient specificity
to allow
Executive to respond to such
allegations). The Board may terminate the
Executive for "Cause"
hereunder following such meeting only upon
the
affirmative vote of at least 60 percent of
the nonemployee directors.
(iii)
If Executive's employment is
terminated by the Company for
Cause, or if Executive
resigns without Good Reason, Executive shall
be
entitled to receive:
(A) the Base Salary through the date of
termination, paid in substantially
equal periodic installments on the schedule specified in Section 3
(but not less
frequently than monthly);
(B) any Annual Bonus earned but
unpaid as of the date of termination for
any previously completed fiscal year, paid no
later than permitted under the
Incentive Plan and no later than the date that other senior
executive officers
of the Company are paid their annual bonuses for any such year;
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(C) reimbursement for any
unreimbursed business expenses properly incurred
by Executive in accordance with Company policy prior to the
date of Executive's
termination, paid at the time specified in Section 13(m);
(D) any accrued but unpaid
vacation, paid in accordance with the terms of
the Company's vacation policy; and
(E) such Employee
Benefits, if any, to which Executive may be
entitled
under the applicable Company Plans or hereunder (including,
without limitation,
if applicable, any Restricted Shares) upon termination of
employment hereunder
(the payments and benefits described in
clauses (A) through (E) hereof being
referred to, collectively, as the "Accrued Rights").
As necessary for
compliance with the
requirements of the Code and
notwithstanding any contrary provision of this
subsection, payments under this
subsection are subject to Section 13(l) through (p).
Following such termination
of Executive's employment by the Company for Cause or
resignation by Executive,
except as set forth in this Section 8(a)(iii) and Section
8(g), Executive shall
have no further rights to any compensation or any
other benefits under this
Agreement.
b. Disability or Death.
(i)
Executive's employment hereunder shall terminate upon
Executive's
death and may be terminated by the Company
if Executive becomes physically
or mentally
incapacitated and is therefore unable for a
period of six
consecutive months or for an aggregate of
nine months in any 12 consecutive
month period to perform Executive's
duties (such incapacity is hereinafter
referred to as
"Disability"). Any question as to the
existence of the
Disability of Executive as to which
Executive and the Company cannot agree
shall be determined
in writing by a qualified independent
physician
mutually acceptable to
Executive and the Company. If Executive and
the
Company cannot agree as to a
qualified independent physician, each shall
appoint such a physician and those two
physicians shall select a third who
shall make such determination in
writing. The determination of Disability
made in writing to the Company and
Executive shall be final and conclusive
for all purposes of the Agreement.
(ii) Upon
termination of Executive's employment hereunder for
either
Disability or death, Executive or
Executive's estate (as the case may be)
shall be entitled to receive:
(A) the Accrued Rights;
(B) continued payment
of Executive's Base Salary during
the period
commencing on the date of Executive's termination
of employment and ending on
the date that is six months after the
date of Executive's termination of
employment (applying the definition of such term
in Section 13(n)), paid in
substantially equal periodic installments on the
schedule specified in Section
3, but not less frequently than monthly (such continued
Base Salary shall only
be subject to the six-month delay to the extent
applicable under Section 13(o)
and (p));
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(C) a pro rata portion of the Annual
Bonus, equal to the product of (I) the
Annual Bonus that Executive would have received
pursuant to the Incentive Plan
for the calendar year of Executive's termination of employment if
her employment
had continued indefinitely, and (II) a
fraction whose numerator equals the
number of days the Executive was employed during such year and
whose denominator
is 365, payable as a cash lump sum no later than
permitted under the Incentive
Plan and no later than the date that other senior
executive officers of the
Company are paid their annual bonuses for such year; and
(D) all Restricted
Shares that have been granted as of
the date of
Executive's termination shall be fully vested and
non-forfeitable as of such
date, and all options granted to Executive that are not
vested as of such date
shall become vested and fully exercisable, and
Executive shall not be entitled
to any further annual grants of
Restricted Shares under Section 5 of this
Agreement.
(iii)
Upon termination of Executive's
employment hereunder due to
Executive's death or Disability, in
addition to the benefits described in
Section 8(b)(ii) above, the Company
shall provide Executive (in the event
of her Disability) and
Executive's spouse with medical, dental,
life
insurance and other health
benefits (pursuant to the same Company Plans
that are medical, dental, life insurance
and other health benefit plans and
that are in effect for active
employees of the Company), until the second
anniversary of the date of Executive's
death or Disability.
(A) To the extent that such
medical, dental or other health benefit plan
coverage is provided under a self-insured plan maintained by the
Company (within
the meaning of Section 105(h) of the Code):
(I) the
charge to Executive for each month of coverage will equal
the
monthly COBRA charge established by
the Company for such coverage in which
the Executive or the
Executive's spouse (as applicable) is enrolled from
time to time,
based on the coverage generally
provided to salaried
employees (less the amount of any
administrative charge typically assessed
by the Company as part of its COBRA
charge), and Executive will be required
to pay such monthly charge in accordance
with the Company's standard COBRA
premium payment requirements; and
(II) on the
date of Executive's termination of employment within
the
meaning of Section 13(n), the Company will
pay Executive a lump sum in cash
equal, in the aggregate,
to the monthly COBRA charge established by the
Company on the payment date for family
coverage with respect to the highest
value health
coverage provided to salaried
employees under such
self-insured plan for each month of
coverage in the two year period. For
this purpose, the Company's
monthly COBRA charge for family coverage will
be increased by 10% on each January
in the projected payment period and
such increased amount shall apply to
each successive month in the calendar
year in which the increase became
applicable.
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(B) To the extent that such
medical, dental or other health benefit plan
coverage is provided under a fully-insured medical
reimbursement plan (within
the meaning of Section 105(h) of the Code), there will be no charge
to Executive
for such coverage.
As necessary for
compliance with the
requirements of the Code and
notwithstanding any contrary provision of this
subsection, payments under this
subsection are subject to Section 13(l)
through (p). Following Executive's
termination of employment due to death or
Disability, except as set forth in
this Section 8(b) and Section 8(g), Executive shall
have no further rights to
any compensation or any other benefits under this Agreement.
c. By the Company
Without Cause or by Executive Resignation
with Good
Reason.
(i)
Executive's employment hereunder may be
terminated (A) by the
Company without Cause (which shall not
include Executive's termination of
employment due to her death or
Disability) or (B) by Executive with Good
Reason (as defined below).
(ii) For
purposes of this Agreement, "Good Reason" shall mean:
(A) the material
failure of the Company to pay or
cause to be paid
Executive's Base Salary or Annual Bonus, or grant the Restricted
Shares when due
hereunder,
(B) any substantial and
continuing diminution in Executive's
position,
authority or responsibilities from those described in Section 2
hereof,
(C) a material relocation of
Executive's principal office location, for
this purpose, a relocation more than 50
miles from the Company's Stamford,
Connecticut headquarters area will be automatically deemed
material, or
(D) any other material breach of a
material provision of this Agreement;
provided that any of the events described in subparagraphs
(A), (B), (C) or (D)
of this Section 8(c)(ii) shall constitute Good
Reason only if (I) the Company
fails to cure such event within 30 days after receipt from
Executive of written
notice of the existence of the event or circumstances
constituting Good Reason
specified in any of the preceding clauses, which notice must
be provided to the
Board within 90 days after Executive learns of
the initial existence of such
event or circumstances with sufficient
specificity from Executive for the
Company to respond to such claim, and (II) Executive
terminates employment with
the Company within two years after
the initial existence of such event or
circumstances.
(iii) If
Executive's employment is terminated by the Company
without
Cause (other than by reason of death
or Disability) or by Executive with
Good Reason,
subject to Executive's
satisfaction of the release
requirements set forth in Section
8(f)(ii), the Company (1) shall then pay
or provide to the Executive
the compensation and benefits described in
subparagraphs (A) and (D)
below, (2) shall begin paying to the Executive
the compensation
described in subparagraphs (B) and
(C), and (3) the
vesting provided for by subparagraph (E)
below shall apply, in each case on
the Expiration Date (as defined in Section
8(f)(ii)):
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(A) the Accrued Rights;
(B) subject to Executive's
continued compliance with the provisions of
Section 9 and Section 10 of this Agreement, the amount
that is equal to 1/36th
of the sum of -
(I) three
times Executive's annual Base Salary in effect on the
date
of Executive's termination of employment
(the "Termination Date"), and
(II)
two times Executive's annual Target
Bonus in effect on the
Termination Date,
shall be paid each month for the 36-month period
commencing on the Termination
Date (it being understood that Executive
shall receive no payment until the
Expiration Date at which time Executive shall receive a
catch-up payment on the
Expiration Date that includes all monthly installments
due for the period from
the Termination Date through the Expiration Date)
(with such 36-month period
constituting the "Severance Period")
(such catch-up payment and continued
installments shall be subject to a six-month delay only to the
extent applicable
under Section 13(o) and (p)); provided, however, that payments
described in this
subparagraph (B) that are exempt from Section
409A shall be reduced or offset
entirely, at the time such payments are otherwise required to be
made under this
subparagraph (B), by any amounts due and owing by
Executive to the Company for
funds borrowed from or advanced by the Company (to the
extent permitted under
applicable law);
(C) continuation of
medical, dental, life insurance and
other health
benefits (pursuant to the same Company Plans that
are medical, dental, life
insurance and other health benefit plans
and that are in effect for active
employees of the Company) with health
benefit coverage retroactive to the
Termination Date (once the Expiration Date is
reached and the release is in
effect), and then continuing until
the earlier to occur of the end of the
Severance Period and the date on which Executive
becomes eligible to receive
comparable benefits from any subsequent employer.
(I) To the
extent that such medical, dental or other health
benefit
plan coverage is provided
under a self-insured plan maintained by
the
Company (within the meaning of Section
105(h) of the Code):
(1) the charge to Executive for each month of coverage will
equal
the monthly
COBRA charge established by the Company for such coverage
in which the
Executive or the Executive's spouse (as
applicable) is
enrolled
from time to time, based on the coverage generally
provided
to
salaried employees (less the amount of any
administrative charge
typically assessed by the Company as part of its COBRA
charge), and
Executive will be required to pay such monthly charge
in accordance
with the
Company's standard COBRA premium payment requirements; and
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