AGREEMENT, dated as of the 5 th day
of May, 2006 (this
“Agreement”), by and between Alltel Corporation, a
Delaware corporation (the
“Company”), and Scott T. Ford (the
“Executive”).
WHEREAS, the Board of Directors of the Company
(the “Board”), has determined that it is in the best
interests of the Company and its stockholders
to assure that the Company will have the
continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as
defined herein). The Board believes it is imperative to diminish
the inevitable distraction of the Executive by virtue of the
personal uncertainties and risks created by a pending or threatened
Change of Control and to encourage the Executive’s full
attention and dedication to the Company in the event of any
threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control that ensure that the compensation and benefits
expectations of the Executive will be satisfied and that provide
the Executive with compensation and benefits arrangements that are
competitive with those of other corporations. Therefore, in order
to accomplish these objectives, the Board has caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS
FOLLOWS:
Section 1.
Certain
Definitions . (a) “Effective Date” means the first
date during the Change of Control Period (as defined herein) on
which a Change of Control occurs. Notwithstanding anything in this
Agreement to the contrary, if a Change of Control occurs and if the
Executive’s employment with the Company is terminated prior
to the date on which the Change of Control occurs, and if it is
reasonably demonstrated by the Executive that such termination of
employment (1) was at the request of a third party that has taken
steps reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then “Effective Date” means the date
immediately prior to the date of such termination of
employment.
(b) “Change of Control Period” means the
period commencing on the date hereof and ending on the tenth
anniversary of the date hereof;
provided , however , that, commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof, the
“Renewal Date”), unless previously terminated, the
Change of Control Period shall be automatically extended so as to
terminate three years from such Renewal Date, unless, at least 60
days prior to the Renewal Date, the Company shall give notice to
the Executive that the Change of Control Period shall not be so
extended.
(c) “Affiliated Company” means any
company controlled by, controlling or under common control with the
Company.
(d) “Change of Control”
means:
(1) Any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) becomes the beneficial owner (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (A) the then-outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or
(B) the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in the
election of directors (the “Outstanding Company Voting
Securities”); provided , however , that,
for purposes of this Section 1(d), the following acquisitions shall
not constitute a Change of Control: (i) any acquisition directly
from the Company, (ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company or
(iv) any acquisition by any corporation pursuant to a transaction
that complies with Sections 1(d)(3)(A), 1(d)(3)(B) and
1(d)(3)(C);
(2) Any time at which individuals who, as of the
date hereof, 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 date hereof
whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose 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
Board;
(3) Consummation of a reorganization, merger,
statutory share exchange or consolidation or similar transaction
involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the
Company, or the acquisition of assets or stock of another entity by
the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business
Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 50% of the then-outstanding
shares of common stock (or, for a non-corporate entity, equivalent
securities) and the combined voting power of the then-outstanding
voting securities entitled to vote generally in the election of
directors (or, for a non-corporate entity, equivalent governing
body), as the case may be, of the entity resulting from such
Business Combination (including, without limitation, an entity
that, as a result of such transaction, owns the Company or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business
Combination or any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more
of, respectively, the then-outstanding shares of common stock of
the corporation resulting from such Business Combination or the
combined voting power of the then-
outstanding
voting securities of such corporation, except to the extent that
such ownership existed prior to the Business Combination, and (C)
at least a majority of the members of the board of directors (or,
for a non-corporate entity, equivalent governing body) of the
entity resulting from such Business Combination 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
(4) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
Section 2.
Employment
Period . The Company hereby agrees to continue the
Executive in its employ, subject to the terms and conditions of
this Agreement, for the period commencing on the Effective Date and
ending on the third anniversary of the Effective Date (the
“Employment Period”). The Employment Period shall
terminate upon the Executive’s termination of employment for
any reason.
Section 3.
Terms of
Employment . (a) Position and Duties
. (1) During the Employment Period, (A) the
Executive’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 30-day period immediately preceding the Effective Date
and (B) the Executive’s services shall be performed at the
office where the Executive was employed immediately preceding the
Effective Date or at any other location less than 35 miles from
such office.
(2) During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period, it
shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B)
deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an
employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that, to the extent that any such
activities have been conducted by the Executive prior to the
Effective Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date shall not thereafter be deemed to
interfere with the performance of the Executive’s
responsibilities to the Company.
(b)
Compensation
.
(1) Base Salary
. During the Employment Period, the Executive shall
receive an annual base salary (the “Annual Base
Salary”) at an annual rate at least equal to 12 times the
highest monthly base salary paid or payable, including any base
salary that has been earned but deferred, to the Executive by the
Company and the Affiliated Companies in respect of the 6-month
period immediately preceding the month in which the
Effective Date
occurs. The Annual Base Salary shall be paid at such intervals as
the Company pays executive salaries generally. During the
Employment Period, the Annual Base Salary shall be reviewed at
least annually, beginning no more than 12 months after the last
salary increase awarded to the Executive prior to the Effective
Date. Any increase in the Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement. The Annual Base Salary shall not be reduced after any
such increase and the term “Annual Base Salary” shall
refer to the Annual Base Salary as so increased.
(2)
Short-Term
Bonuses . In addition to the Annual Base Salary, the
Executive shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the “Annual Bonus”)
in cash at least equal to the annualized amount of the
pre-established maximum short-term bonus(es) that may be earned by
the Executive under the Company’s short-term incentive
plan(s), or any comparable bonus under any predecessor or successor
plan(s), including, without limitation, the Company’s
Performance Incentive Compensation Plan and the Executive Incentive
Compensation Plan, in each case, as in effect from time to time
(the “Short-Term Bonus Plans”), for the fiscal year in
which the Effective Date occurs or, if no short-term bonus(es) are
established for such year, the fiscal year immediately preceding
the fiscal year in which the Effective Date occurs (the
“Maximum Annual Bonus”). Each such Annual Bonus shall
be paid no later than 30 days after the end of the fiscal year for
which the Annual Bonus is awarded, unless the Executive shall elect
to defer the receipt of such Annual Bonus pursuant to an
arrangement that meets the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the
“Code”).
(3)
Long-Term Cash Incentive
Bonuses . In
addition to the Annual Base Salary and Annual Bonus, the Executive
shall be awarded, for each fiscal year ending during the Employment
Period, a long-term cash incentive bonus (the “LTIP
Bonus”) at least equal to the pre-established maximum bonus
that may be earned by the Executive under the Company’s
long-term cash incentive compensation plan(s), or any comparable
bonus under any predecessor or successor plan(s), including,
without limitation, the Company’s Long-Term Performance
Incentive Compensation Plan as in effect from time to time (the
“LTIP”), for the performance period commencing
immediately prior to the Effective Date, but excluding for this
purpose the LTIP Bonus granted to the Executive with respect to the
period commencing on the Distribution Date (as defined in the
Distribution Agreement by and between Alltel Corporation and Alltel
Holding Corporation Dated as of December 8, 2005) and ending on
December 31, 2007 (the “Maximum LTIP Bonus”) on terms
and conditions no less favorable, in the aggregate, than the most
favorable of those provided by the Company and the Affiliated
Companies for the Executive under such plans as in effect at any
time during the 6-month period immediately preceding the Effective
Date or, if more favorable to the Executive, those provided
generally at any time after the Effective Date to other peer
executives of the Company and the Affiliated Companies. Each such
LTIP Bonus shall be paid no later than 30 days after the end of the
performance period for which the LTIP Bonus is awarded, unless the
Executive shall elect to defer the receipt of such LTIP Bonus
pursuant to an arrangement that meets the requirements of Section
409A of the Code.
(4)
Equity Incentive, Savings
and Retirement Plans . During the Employment Period, the Executive
shall be entitled to participate in all equity incentive, including
without limitation any stock option, stock appreciation right,
restricted stock, restricted stock unit or other equity or
equity-based compensation plans, practices, policies, and programs
(other than the LTIP) and savings and retirement plans, practices,
policies, and programs, in each case, applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with equity incentive opportunities (measured with
respect to both regular and special incentive opportunities, to the
extent, if any, that such distinction is applicable), savings
opportunities and retirement benefit opportunities, in each case,
less favorable, in the aggregate, than the most favorable of those
provided by the Company and the Affiliated Companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 6-month period immediately preceding
the Effective Date or, if more favorable to the Executive, those
provided generally at any time after the Effective Date to other
peer executives of the Company and the Affiliated
Companies.
(5)
Welfare Benefit
Plans . During the Employment Period, the Executive
and/or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) to the extent applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 6-month period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(6)
Expenses
.
During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with
the most favorable policies, practices and procedures of the
Company and the Affiliated Companies in effect for the Executive at
any time during the 6-month period immediately preceding the
Effective Date or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and the Affiliated Companies.
(7)
Fringe
Benefits . During the Employment Period, the Executive
shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club
dues, and, if applicable, use of an automobile and payment of
related expenses, in accordance with the most favorable plans,
practices, programs and policies of the Company and the Affiliated
Companies in effect for the Executive at any time during the
6-month period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
the Affiliated Companies.
(8)
Office and Support
Staff . During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most
favorable of the foregoing provided to the Executive by the Company
and the Affiliated Companies at any time during the 6-month period
immediately preceding the Effective Date or, if more favorable to
the Executive, as provided generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(9)
Paid-Time
Off . During the Employment Period, the Executive
shall be entitled to paid vacation, sick leave, sabbatical, holiday
and other paid-time off (“Paid-Time Off”) in accordance
with the most favorable plans, policies, programs and practices of
the Company and the Affiliated Companies as in effect for the
Executive at any time during the 6-month period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies. Without limiting the generality of the foregoing, during
the Employment Period, in no event shall the Executive receive
fewer paid vacation days and holidays (including floating holidays)
than the Executive was eligible to receive at any time during the
fiscal year immediately prior to the year in which the Effective
Date occurs.
Section 4.
Termination of
Employment . (a) Death or Disability
. The Executive’s employment shall terminate
automatically if the Executive dies during the Employment Period.
If the Company determines in good faith that the Disability (as
defined herein) of the Executive has occurred during the Employment
Period (pursuant to the definition of “Disability”), it
may give to the Executive written notice in accordance with Section
11(b) of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with
the Company shall terminate effective on the 30th day after receipt
of such notice by the Executive (the “Disability Effective
Date”), provided that, within the 30 days after such
receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties.
“Disability” means the absence of the Executive from
the Executive’s duties with the Company on a full-time basis
for 180 consecutive business days as a result of incapacity due to
mental or physical illness that is determined to be total and
permanent by a physician selected by the Company or its insurers
and acceptable to the Executive or the Executive’s legal
representative.
(b)
Cause
.
The Company may terminate the
Executive’s employment during the Employment Period with or
without Cause. “Cause” means:
(1) the willful and continued failure of the
Executive to perform substantially the Executive’s duties (as
contemplated by Section 3(a)(1)(A)) with the Company or any
Affiliated Company (other than any such failure resulting from
incapacity due to physical or mental illness or following the
Executive’s delivery of a Notice of Termination for Good
Reason), after a written demand for substantial performance is
delivered to the Executive by the Board or the Chief Executive
Officer of the Company that specifically identifies the manner in
which the Board or the Chief Executive Officer of the
Company
believes that the Executive has not substantially performed the
Executive’s duties, or
(2)
the willful engaging by the
Executive in illegal conduct or gross misconduct that is materially
and demonstrably injurious to the Company.
For purposes of
this Section 4(b), no act, or failure to act, on the part of the
Executive shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’s action or
omission was in the best interests of the Company. Any act, or
failure to act, based upon authority (A) given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company (the “Applicable Board”) or (B) based upon
the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in
good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive a
copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters of the entire membership of the Applicable
Board (excluding the Executive, if the Executive is a member of the
Applicable Board) at a meeting of the Applicable Board called and
held for such purpose (after reasonable notice is provided to the
Executive and the Executive is given an opportunity, together with
counsel for the Executive, to be heard before the Applicable
Board), finding that, in the good faith opinion of the board, the
Executive is guilty of the conduct described in Section 4(b)(1) or
4(b)(2), and specifying the particulars thereof in
detail.
(c)
Good
Reason . The Executive’s employment may be
terminated by the Executive for Good Reason or by the Executive
voluntarily without Good Reason. “Good Reason”
means:
(1) the assignment to the Executive of any duties
inconsistent in any respect with the Executive’s position
(including status, offices, titles and reporting requirements),
authority, duties or res
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