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SEPARATION AGREEMENT AND GENERAL
RELEASE
This Separation Agreement and General Release
(“Agreement”) is entered into by and between Kevin J.
O’Hara (“EMPLOYEE”) and LEVEL 3 COMMUNICATIONS,
LLC, its parent and affiliated companies (“COMPANY”).
In the event that the EMPLOYEE signs and does not revoke this
Agreement, the Agreement shall become effective and enforceable on
the expiration date of the seven day revocation period referenced
in paragraph 14 (the “Effective Date”).
In connection with certain organizational changes,
COMPANY and EMPLOYEE have determined that it is in their mutual
best interests to end their employment relationship. Because
COMPANY wants to recognize the service of EMPLOYEE and because
EMPLOYEE and COMPANY wish to end the relationship without any
disputes or differences following execution of this Agreement, and
in consideration for the mutual promises contained herein, EMPLOYEE
and COMPANY agree as follows:
1.
EMPLOYEE’S employment with and position as an
officer of the COMPANY has been terminated effective March 10,
2008. EMPLOYEE shall execute the Resignation attached hereto as
Exhibit “A”.
2.
If EMPLOYEE signs and does not revoke this
Agreement, subject to the terms of this Agreement, on the Effective
Date, COMPANY will pay to EMPLOYEE, in all cases less withholding
for federal and state taxes and less appropriate payroll
deductions: the amount of Five Hundred Eighty-Five Thousand Dollars
($585,000). In addition, if EMPLOYEE elects such coverage, COMPANY
will provide to EMPLOYEE COBRA benefit continuation coverage for
one month. The costs associated with these additional benefits
shall be deemed separation pay that COMPANY has offered to EMPLOYEE
freely and without obligation and in consideration for this
Agreement.
3.
As additional consideration for this Agreement,
subject to the terms of this Agreement, if EMPLOYEE signs and does
not revoke this Agreement, upon the Effective Date, EMPLOYEE will
be entitled to the following:
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3.1
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Outperform Stock Options (“OSOs”).
EMPLOYEE and COMPANY are parties to an Outperform Stock Option
Master Award Agreement, which incorporates and is governed by the
Level 3 Communications, Inc. 1995 Stock Plan, as amended and
restated (the “Stock Plan”). Notwithstanding the terms
of the OSO Master Award Agreement, as of March 10, 2008, all of
EMPLOYEE’S OSO’s shall be fully vested and exercisable
until the earlier of the respective expiration of the OSO, or
September 9, 2009. No OSOs shall be exercisable beyond the date
upon which they expire under the terms of the applicable OSO Master
Award Agreement. In addition, EMPLOYEE expressly recognizes and
agrees, notwithstanding the terms of the OSO Master Award
Agreement, that with respect to any OSO award where the period in
which to exercise has been modified herein, the Adjusted Initial
Price may never be below the Initial Price as set forth in the
Outperform Stock Option Award Letter of the corresponding OSO(s).
Any OSO awards awarded after March 2007, shall be
forfeited.
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3.2
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Restricted Stock Units (“RSUs”).
EMPLOYEE and COMPANY are parties to an Amended Master Deferred
Issuance Stock Agreement, which incorporates and is governed by the
Stock Plan. Consistent with the above-referenced Amended Master
Deferred Issuance Stock Agreement, EMPLOYEE has been awarded RSUs,
and as of March 10, 2008, 684,057 RSUs have restrictions that have
not lapsed. Notwithstanding the terms of the Amended Master
Deferred Issuance Stock Agreement, the restrictions on said 684,057
RSUs shall all lapse on April 1, 2008.
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3.3.
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COMPANY reserves the right to make, and the EMPLOYEE
hereby consents to, any amendments to the Plan, the
EMPLOYEE’S Amended Master Issuance Deferred Stock Agreement,
RSU Award Letters, OSO Master Award Agreements, and Outperform
Stock Option Award letters, as COMPANY deems necessary to comply
with the provisions of Section 409A of the Internal Revenue Code of
1986, and the applicable rules and regulations
thereunder.
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3.4
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Except as provided here in, EMPLOYEE will not be
entitled to any additional awards or vesting in any of the
COMPANY’S stock plans, stock option plans, or other benefit
plans. In addition, nothing in the
Agreement is intended to nor shall modify the actual expiration
date of any award of OSOs.
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4.
Notwithstanding any provision in this Agreement to
the contrary, any payment, or issuance, otherwise required to be
made hereunder to EMPLOYEE, at any date as a result of the
termination of EMPLOYEE’S employment (other than any payment
made in reliance upon Treas. Reg. Section 1.409A-1(b)(9)
(Separation Pay Plans) or Treas. Reg. Section 409A-1(b)(4)
(Short-Term Deferrals)) shall be delayed for such period of time as
may be necessary to meet the requirements of Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended
(the “Code”). On the earliest date on which such
payments, or issuance, can be made without violating the
requirements of Section 409A(a) (2)(B)(i) of the Code, there shall
be paid to EMPLOYEE, in a single cash lump sum or issuance, an
amount equal to the aggregate amount of all payments, or RSUs
delayed pursuant to the preceding sentence.
5.
Except as provided herein, this Agreement shall
expressly and unconditionally supersede and render void any and all
claims, rights, title or interest in or with respect to any
employee compensation, commission payments, or benefit to which
EMPLOYEE may have been entitled by virtue of his employment with
COMPANY, excluding claims relating to social security,
workers’ compensation or unemployment insurance
benefits.
6.
Release and Covenant Not To Sue. In exchange for the
benefits offered herein, EMPLOYEE hereby releases and discharges
COMPANY, its directors, officers, employees, agents or successors
and assigns, of and from any demands or claims, of whatever kind or
nature, whether known or unknown, arising out of his employment or
separation from employment with COMPANY, except for the
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