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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modified, amended and superseded by the terms of this Agreement.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 are
special and unique in nature and of an extraordinary value to the
Company, and that the Company would be irreparably damaged if
Executive were to provide similar services to any Person
competing
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