Exhibit 10.1
AGREEMENT AND GENERAL
RELEASE
THIS Agreement made as of the 19th
day of December 2006, between Embarq Corporation, a Delaware
corporation (the “Company”), and Michael B. Fuller (the
“Executive”).
I. BACKGROUND
A. The Company, or one of it
subsidiaries, currently employs Executive as its Chief Operating
Officer and the Company (as successor to Sprint Corporation) and
Executive are parties to that certain Special Compensation and
Non-Compete Agreement, dated August 12, 1997 (the
“Non-Compete Agreement”), and that certain Contingency
Employment Agreement, dated August 12, 1997, as amended
June 30, 1999 (the “Contingency Employment
Agreement”), and the Company has assumed all obligations to
Executive under the Sprint Corporation January 2005 Retention
Program (the “Retention Program”).
B. The Company and Executive wish to
enter into an agreement whereby (i) Executive agrees to
additional restrictive covenants and provides a release by
Executive of the Company, as further described herein, and
(ii) assuming that Executive complies with, executes, and does
not revoke this Agreement, Company agrees to provide Executive with
the benefits and entitlements described below.
II. SUBSTANTIVE
PROVISIONS
In consideration of the mutual
promises contained in this Agreement, the Company and Executive,
intending to be legally bound, agree as follows:
1. The Company and Executive have
mutually agreed that Executive’s position will be eliminated,
effective after December 31, 2006, and that, after
transitioning his duties, he will leave the Company on
January 12, 2007 (the “Separation Date”). The
Company and Executive also agree that this Agreement will
constitute the written notice of termination as required by section
1 of the Non-Compete Agreement. Executive shall cease to be an
executive officer after December 31, 2006 and shall resign
from all other officer and director positions. Thereafter, until
the Separation Date, he shall transition his duties and
responsibilities to other executives designated by the
Company’s Chief Executive Officer but shall have no executive
responsibilities or power to bind the Company after
December 31, 2006. Executive agrees that the Contingency
Employment Agreement is terminated and of no further force or
effect, nor does Executive have any further right or claim under
the Contingency Employment Agreement, on the date of this
Agreement.
2. In exchange for Executive’s
agreement to additional restrictive covenants and the release by
Executive as to any claims that might be asserted by the Executive,
as further described herein, the Company will accelerate the
vesting of Executive’s unvested 2006 equity grants at the end
of Executive’s severance period which shall be on
July 12, 2008.
3. In exchange for the payments and
benefits set forth in Section 2 above, Executive agrees as
follows:
EXECUTION COPY
(a) Until July 12, 2008,
Executive shall not engage in Competitive Employment, whether paid
or unpaid and whether as a consultant, employee, or otherwise
including, without limitation, the ownership of any interest in,
the provision of any financing, management or advisory services to,
any connection with or being a principal, partner or agent of any
Competitor, provided that the Executive may passively own less than
1% of the outstanding shares of any Competitor whose shares are
traded in the public market. For the purposes of this Agreement,
“Competitive Employment” shall mean any business that
competes with any material portion of the business of the Company
as its business (including its geographic scope) exists from time
to time and “Competitor” shall mean any business that
competes with any material portion of the Company’s business
as its business (including its geographic scope) exists from time
to time;
(b) By reason of his employment by
and service to the Company, he has had access to confidential
information of the Company, and, therefore, hereby reaffirms his
obligations under, and agrees that he will continue to be subject
to, the terms of Non-Compete Agreement, including section
2.02;
(c) Consistent with
Executive’s business and personal affairs, after the
Separation Date, he will assist the Company in the defense of any
claims or potential claims that may be made or threatened to be
made against it in any action, suit or proceeding, whether civil,
criminal, administrative, or investigative
(“Proceeding”), and will assist the Company in the
prosecution of any claims that may be made by the Company in any
Proceeding, to the extent that such claims may relate to
Executive’s services provided to the Company or are within
Executive’s knowledge. Executive agrees, unless precluded by
law, to promptly inform the Company if Executive is asked to
participate (or otherwise become involved) in any Proceeding.
Executive also agrees, unless precluded by law, to promptly inform
the Company if Executive is asked to assist in any investigation
(whether governmental or private) of the Company (or its actions),
regardless of whether a lawsuit has then been filed against the
Company with respect to such investigation. The Company agrees to
reimburse Executive for all of Executive’s reasonable
out-of-pocket expenses associated with such assistance, including
travel expenses and any attorneys’ fees; and, if Executive is
required to spend more than two full days on any one Proceeding the
Company will pay Executive a per diem amount of $3,000 for each
full day thereafter;
(d) Until July 12, 2008
, Executive will not, without prior written consent of the
Company, in any manner, solicit, request, advise, or assist any
other person to undertake any action that would be reasonably
likely to, or is intended to, result in a Change in Control (as
defined in section 6.02 of the No
