Exhibit 10.1
FORM OF EXECUTIVE SEVERANCE AND
NONCOMPETITION AGREEMENT
THIS AGREEMENT
(“Agreement”), dated as of May 10, 2005
(“Effective Date”), is between Broadwing Corporation, a
Delaware corporation, on behalf of itself, its affiliates,
subsidiaries, successors and assigns (collectively
“Broadwing” or the “Company”), and FIRST
NAME LAST NAME (“Executive”). The terms used in
this Agreement and not otherwise defined herein have the meanings
assigned to such terms in the attached Exhibit A.
RECITALS:
A. Executive is a key employee of
Broadwing, and has made and is expected to continue to make
significant contributions to the profitability, growth, and
financial strength of Broadwing.
B. To promote retention, continuity
of management in the event of an actual or threatened change in
control, and other benefits to Broadwing, Broadwing desires to
establish a severance benefit for Executive.
C. Broadwing has assessed the costs
and benefits of providing severance benefits as provided in this
Agreement and similar agreements for other key employees, and has
determined that it is cost-effective and in the best interests of
Broadwing to enter into this Agreement and such similar
agreements.
D. The Company and Executive may be
parties to one or more prior similar subject matter Agreement(s)
(“Prior Agreement”). Except at expressly stated
otherwise in this Agreement, Broadwing and Executive desire that,
as of the Effective Date, such Prior Agreement, if any, is
modified, amended and superseded by the terms of this Agreement.
Accordingly, except as expressly stated otherwise in this
Agreement, in the event that the terms of this Agreement conflict
with the terms of any Prior Agreement, the terms of this Agreement
shall control.
NOW, THEREFORE, as condition of
Executive’s continued employment with Broadwing and for other
good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, Broadwing and Executive agree as
follows:
1. Nature of Employment .
Except as expressly provided otherwise in a separate written
agreement between the Executive and the Company, Executive
acknowledges that he or she is an “employee at will”
and the period of Executive’s employment (“the
Employment Period”) shall continue until the earliest to
occur of Executive’s resignation, death, Disability (as
defined below), or termination by the Company. The Company may
terminate Executive’s employment at any time with or without
Cause (as defined below), and Executive may terminate his
employment at any time with or without Good Reason (as defined
below) upon giving written notice of his resignation to the Company
at least 30 days prior to the date of such termination, or such
shorter period as may be agreed between Executive and the
Company.
2. Termination of Employment
.
(a) If Executive’s employment
is terminated due to Executive’s death, the Company will pay
to Executive’s estate accrued and unpaid current base salary
accrued through the date of termination.
(b) If Executive’s employment
is terminated due to Executive’s Disability, Executive will
be entitled to receive (i) his or her accrued and unpaid current
base salary (together with all unused vacation benefits accrued in
accordance with the Company’s vacation accrual policies)
accrued through the date of termination, (ii) the cash payment set
forth in Section 2(d)(ii) below, and (iii) such benefits as are
available under the Company’s long-term disability insurance
plans as in effect on the date of termination. Executive will be
“Disabled” only if, as a result of his or her
incapacity due to physical or mental illness, (i) he or she is
considered disabled under the Company’s long-term disability
insurance plans referred to in the preceding sentence, or (ii) he
or she is determined to be unable to fulfill his or her job related
functions for Broadwing for a period in excess of 60 consecutive
days as determined by a physician of Broadwing’s
choosing.
(c) If Executive’s employment
is terminated due to Executive’s resignation other than for
Good Reason or a termination by the Company for Cause, Executive
will be entitled to receive his or her accrued and unpaid current
base salary accrued through the date of such
termination.
(d) If Executive’s employment
is terminated due to Executive’s resignation for Good Reason
or a termination by the Company (other than for Cause) within 24
months after a Corporate Transaction, then Executive will be
entitled to receive:
(i) his or her accrued and unpaid
current base salary accrued through the date of
termination;
(ii) a cash payment, which will be
payable over the 20.88 month period commencing on the date of such
termination in equal installments on the same pay schedule as
applicable to base salary prior to such termination, equal to 20.88
divided by 12 and then multiplied by his or her annual Highest Base
Salary (defined for this Agreement as Executive’s highest
base compensation during the 12-month period immediately prior to
termination);
(iii) a continuation for the 20.88
month period following the month of termination in the
Company’s health and other insurance benefit programs for
which senior executive employees are generally eligible (unless at
any time during such benefit-continuation period Executive obtains
other employment with substantially comparable health and other
insurance benefits)
provided that, with respect to clauses (ii) and (iii),
Executive will be entitled to receive such amounts if and only if
Executive has executed and delivered to the Company the
General
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Release substantially in form and substance as
set forth in Exhibit A attached hereto and only so long as
Executive is in compliance with the provisions of paragraphs 3, 4
and 5 hereof.
(e) Except as otherwise expressly
provided herein, all of Executive’s rights to salary,
bonuses, employee benefits and other compensation hereunder which
would have accrued or become payable after the termination or
expiration of the Employment Period shall cease upon such
termination or expiration, other than those expressly required
under applicable law (such as COBRA). Broadwing and Executive
acknowledge and expressly agree that the terms of this Agreement
shall not be construed to modify, amend or supersede any agreement
regarding restricted stock or stock options grants to Executive
under Broadwing’s 1997 Stock Option Plan or 2000 Long Term
Incentive Plan or any similar plan adopted by the
Company.
(f) For purposes of this Agreement,
“Cause” shall mean Executive’s (i) habitual
intoxication, (ii) illegal drug use or illegal drug addiction,
(iii) conviction of a felony (or plea of guilty or nolo contendre),
(iv) a material failure or inability to perform duties or
obligations as an employee, other than from illness or injury, (v)
willful misconduct or negligence in the performance of duties or
obligations as an employee, or (vi) any material breach of this
Agreement, or other agreement entered into between the Company and
Executive; provided , however, that in the case of (i),
(ii), (iv) or (iv) (with respect to negligence only) above,
Executive shall have received written notice from the Company of
the acts purportedly constituting Cause and shall have failed to
cure such acts within 30 days following receipt of such
notice.
(g) For purposes of this Agreement,
a termination by Executive for “Good Reason” will mean
Executive’s voluntary resignation after any of the following:
(i) a material reduction in the Executive’s compensation,
(ii) a material reduction in the Executive’s position, duties
or responsibilities, (iii) a requirement that the Executive move
his or her principal residence because his primary place of
employment or service is moved to a location greater than 50 miles
away from its then current location, or (iv) Broadwing (or a
successor) has not paid to the Executive when due any salary, bonus
or other material benefit.
(h) For purposes of this agreement,
the term “Corporate Transaction” means the first to
occur of any of the following: (i) any sale, lease, exchange, or
other transfer (in one transaction or a series of transactions) of
all or substantially all of the assets of Broadwing; (ii)
individuals who, as of the Effective Date, constitute the entire
Board of Directors (“Incumbent Directors”) 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 was approved by a
vote of a majority of the then Incumbent Directors shall be, for
the purpose of this provision, considered as though such individual
were an Incumbent Director; (iii) any consolidation or merger of
Broadwing with any other entity where the stockholders of Broadwing
immediately prior to the consolidation or merger (other than any
stockholder directly or indirectly acquiring control in said
consolidation or merger), would not, immediately after the
consolidation or merger, beneficially own, directly or indirectly,
50% of the combined voting power of all of the outstanding
securities of the entity issuing cash or securities in the
consolidation or merger (or its parent corporation, if any); (iv) a
person or entity becomes the beneficial owner, directly or
indirectly, of securities of Broadwing representing 75% or more of
the total number of votes that may be cast for the election of the
directors of
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Broadwing; or (v) the Board, by vote
of a majority of all of the directors, adopts a resolution to the
effect that a Corporate Transaction has occurred for purposes of
the Agreement. In addition, for purposes of this Agreement (and not
for any other purpose) a Corporate Transaction shall be deemed to
have occurred if there is a transaction which includes or involves
a sale or transfer, to a party that is not owned or controlled by
the Company or any of its affiliates, of substantially all of the
Telecommunications Services Business (as defined below) of the
Company without the sale or transfer of substantially all of the
stock or assets of the Company. For the purpose of this Agreement,
the phrase “substantially all of the Telecommunications
Services Business” means the sale or transfer of Company
assets representing 50% or more of the Telecommunications Services
Business gross revenues generated by the Company during the 12
month period immediately prior to the date of such sale or transfer
of assets. “Telecommunication Services Business” means,
for the purpose of this Agreement, any commercial service(s)
involving the transmission of voice and/or data through any medium
by means of electrical impulses and includes all aspects of
transmitting and receiving information. Further,
“Telecommunication Services Business” also includes,
but is not limited to, digital, analog, voice, data, message, and
video transmissions, including the terminal, transmission and
switching facilities of government and public telecommunications
systems, as well as operating and network software.
3. Confidential Information
.
(a) Executive acknowledges that the
information, observations, training and data (including trade
secrets) obtained by him or her while employed by the Company and
its subsidiaries concerning the business or affairs of the Company
or any subsidiary (“Confidential Information”) are the
property of the Company or such subsidiary. The Confidential
Information sought to be protected includes, without limitation,
information pertaining to: (i) the identities of customers or
clients with which or whom the Company does or seeks to do
business, as well as the point of contact persons and
decision-makers at these customers or clients, including their
names, addresses, e-mail addresses and positions, whether contained
in the Company’s computer database system or any written
report distributed to employees; (ii) the past or present
purchasing history of each customer or client; (iii) the volume of
business and the nature of the business relationship between the
Company and its customers or clients, including any computerized
documents or files and/or written reports summarizing such
information; (iv) the financing methods employed by and
arrangements between the Company and its existing or potential
customers or clients; (v) the pricing of the Company’s
services and products, including any deviations from its standard
pricing for particular customers or clients; (vi) the
Company’s business plans and strategy, including customer
assignments and rearrangements, sales and administrative staff
expansions, marketing and sales plans and strategy, proposed
adjustments in compensation of sales personnel, revenue, expense
and profit projections, industry analyses, and any proposed or
actual implemented technology changes; (vii) information regarding
the Company’s employees, including their identities, skills,
talents, knowledge, experience, compensation, and preferences;
(viii) information about the Company’s financial results and
business condition contained on the Company’s computer
network or in any written or printed documents; (ix) computer
programs and software developed by the Company and tailored to the
Company’s needs by its employees, independent contractors,
consultants or vendors; (x) software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering,
hardware configuration information; and (xi) all technology
developed, enhanced,
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produced and/or distributed by the
Company, including the Company’s training programs and
techniques. Therefore, Executive agrees, for a period of at least
10 years following termination of Executive’s employment with
the Company, that he or she shall not disclose to any unauthorized
person or use for his own purposes any Confidential Information
without the prior written consent of the Company, unless and to the
extent that the Confidential Information becomes generally known to
and available for use by the public other than as a result of
Executive’s acts or omissions. Executive shall deliver to the
Company at the termination or expiration of the Employment Period,
or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and
other documents and data (and copies thereof) embodying or relating
to the Confidential Information, Work Product (as defined below) or
the business of the Company or its subsidiaries which he or she may
then possess or have under his or her control; provided that
the Company shall provide Executive with reasonable access during
normal business hours to all such materials to the extent
reasonably required with respect to any dispute or matter with
respect to which Executive may have personal liability, and all
such materials made available to Executive shall continue to be
subject to the confidentiality provisions set forth in this Section
3.
(b) Executive shall be prohibited
from using or disclosing any confidential information or trade
secrets that Executive may have learned through any prior
employment. If at any time during this employment with the Company
or any subsidiary, Executive believes he or she is being asked to
engage in work that will, or will be likely to, jeopardize any
confidentiality or other obligations Executive may have to former
employers, Executive shall immediately advise the Company so that
Executive’s duties can be modified appropriately.
(c) Executive represents and
warrants to the Company that Executive took nothing which belonged
to any former employer when Executive left such former employer and
that Executive has nothing that contains any information which
belongs to any former employer. If at any time Executive discovers
this is incorrect, Executive shall promptly return any such
materials to Executive’s former employer. The Company does
not want any such materials, and Executive shall not be permitted
to use or refer to any such materials in the performance of
Executive’s duties hereunder.
4. Intellectual Property,
Inventions and Patents .
(a) Executive acknowledges that all
discoveries, concepts, ideas, inventions, innovations,
improvements, developments, methods, designs, analyses, drawings,
reports, patent applications, copyrightable work and mask work
(whether or not including any confidential information) and all
registrations or applications related thereto, all other
proprietary information and all similar or related information
(whether or not patentable) which relate to the Company’s or
any of its subsidiaries’ actual or anticipated business,
research and development or existing or future products or services
and which are conceived, developed or made by Executive (whether
above or jointly with others) while employed by the Company and its
subsidiaries, whether before or after the date of this Agreement
(“Work Product”), belong to the Company or such
subsidiary. Executive shall promptly disclose such Work Product to
the Company and, at the Company’s expense, perform all
actions reasonably requested by the Company (whether during or
after the Employment Period) to establish and confirm such
ownership (including, without limitation, assignments, consents,
powers of attorney and other instruments).
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If Executive is based in Illinois, in accordance
with Section 2872 of the Illinois Employee Patent Act, Ill. Rev.
Stat. Chap. 140, § 301 et seq . (1983),
Executive is hereby advised that this paragraph 4 regarding the
Company’s and its subsidiaries’ ownership of Work
Product does not apply to any invention for which no equipment,
supplies, facilities or trade secret information of the Company or
any subsidiary was used and which was developed entirely on
Executive’s own time, unless (i) the invention relates to the
business of the Company or any subsidiary or to the Company’s
or any subsidiaries’ actual or demonstrably anticipated
research or development or (ii) the invention results from any work
performed by Executive for the Company or any
subsidiary.
5. Non-Compete,
Non-Solicitation .
(a) Executive acknowledges and
agrees with the Company that in the course of employment with the
Company Executive will become familiar with the Company’s
trade secrets and with other confidential and proprietary
information concerning the Company and its subsidiaries, that
Executive’s services to the Company and its
subsidiaries
