Exhibit 10.2
SEVERANCE
AGREEMENT
This Severance Agreement
(“Agreement”), which is effective as of
September 12, 2008 (the “Effective Date”),
is by and between Joseph J. Euteneuer
(“Executive”), who is Executive Vice President and
Chief Financial Officer of Qwest Communications International Inc.,
a Delaware corporation having its principal executive offices in
Denver, Colorado (together with Qwest Corporation, (the
“Company”)):
WHEREAS, the Company wishes to
encourage Executive’s continued service and dedication in the
performance of Executive’s duties; and
WHEREAS, in order to induce
Executive to remain in the employ of the Company, and in
consideration for Executive’s continued service to the
Company, the Company agrees that Executive shall receive the
benefits set forth in this Agreement in the event that
Executive’s employment with the Company is terminated in the
circumstances described herein.
Therefore, in consideration of the
mutual promises set forth below, Company and Executive hereby agree
as follows:
1.
TERM OF EMPLOYMENT; AT-WILL
EMPLOYMENT . This
Agreement does not contain any promise or representation concerning
the duration of Executive’s employment.
Executive’s employment is at-will, and may be altered or
terminated by either Executive or the Company at any time, with or
without cause, and with or without notice. This at-will
employment relationship may not be modified unless in a written
agreement signed by Executive and either the Chief Executive
Officer or the Chief Administrative Officer.
2 .
CHANGE IN CONTROL
a.
CHANGE IN CONTROL
DEFINED: For
purposes of this Agreement, “Change in Control” shall
have the definition currently in the Qwest Equity Incentive Plan
(“Stock Plan”).
3.
TERMINATION
.
a.
Termination for Cause
. The Company may, in its sole
discretion, immediately terminate this Agreement and
Executive’s employment for Cause by giving notice to
Executive. If Executive’s employment is terminated for
Cause pursuant to this paragraph 3.a., Executive shall not be
entitled to any severance payment or any other post-employment
obligation provided under this Agreement. Any one or more of
the following events shall, for purposes of this Agreement,
constitute Cause:
(1)
Commission of an act deemed by the
Company in its sole discretion to be an act of dishonesty, fraud,
misrepresentation or other act of moral turpitude that would
reflect negatively upon Qwest or compromise the effective
performance of Executive’s duties;
(2)
Unlawful conduct that would reflect
negatively upon Qwest or compromise the effective performance of
Executive’s duties, as determined by the Company in its sole
discretion;
(3)
Conviction of (or pleading nolo
contendere to) any felony or a misdemeanor involving moral
turpitude;
(4)
Continued failure to substantially
perform Executive’s duties to the satisfaction of the Chief
Executive Officer (other than such failure resulting from
Executive’s incapacity due to physical or mental illness)
after the Chief Executive Officer delivers written notice to
Executive specifically identifying the manner in which Executive
has failed to substantially perform his or her duties and Executive
has been afforded a reasonable opportunity of at least thirty days
to substantially perform his or her duties; or
(5)
A willful violation of the Qwest
Code of Conduct or other Qwest policies that would reflect
negatively upon Qwest or compromise the effective performance of
Executive’s duties as determined by the Company in its sole
discretion.
For two years following a Change in
Control, a termination for Cause shall require the approval of the
Company’s Board of Directors.
b.
Severance Payments When
Termination Not By Executive or By Executive With Good
Reason. The parties
agree that the Company may terminate Executive’s employment
without Cause or that Executive may terminate his employment for
Good Reason (as defined below). Except under circumstances
described in subparagraph 3.c below, if Company terminates
Executive’s employment without Cause or if Executive
terminates his employment for Good Reason, and Executive signs a
complete waiver and release of claims against Qwest in the form
attached hereto as Attachment A (“Waiver”), then
Company shall pay Executive the “Standard Severance
Amount” defined below. The Waiver includes, among other
terms, a provision requiring Executive to pay back to Qwest any
severance received by Executive if after the payments are made it
is determined that, while employed by Qwest or any Qwest entity,
Executive engaged in conduct constituting Cause. The Waiver
does not include a release of Qwest’s obligations, if any, to
indemnify Executive under Qwest bylaws or applicable state
law. The Standard Severance Amount will equal one and
one-half times Executive’s highest annual base salary in
effect during the 12 months preceding the termination of
Executive’s employment. The Standard Severance Amount
will be paid over an 18 month period through the Company’s
regular management payroll processes, commencing on the Severance
Payment Date, as defined in Section 22.d. If, at the end
of the 18 month period, Executive
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has not breached or threatened to
breach any part of this Agreement, Executive will also receive a
lump-sum payment equal to one and one-half times Executive’s
highest target annual bonus in effect during the 12 months
preceding the termination of Executive’s employment, minus
any applicable or legally-required withholdings.
(1)
Termination for Good
Reason . Executive
may terminate his or her employment for Good Reason after giving
written notice to the Company within 60 days after an event
constituting Good Reason; provided, however, that the Company shall
have 30 days after such notice is given to cure.
Good Reason shall mean:
(A)
a reduction of either
Executive’s base salary or Executive’s target annual
bonus, where the salary or annual target bonus are measured
immediately prior to such reduction, as opposed to at the time of
Executive’s execution of this Agreement;
(B)
a reduction in Executive’s
title from Executive Vice President and Chief Financial Officer of
the Company, or a requirement that Executive report to any person
other than the Chief Executive Officer of the Company or the
Company’s Board of Directors;
(C)
a material reduction of
Executive’s responsibilities, where such responsibilities are
measured immediately prior to such reduction, as opposed to at the
time of Executive’s execution of this Agreement;
(D)
Company’s material breach of
this Agreement;
(E)
Company’s failure to obtain
the agreement of any successor to honor the terms of this
Agreement; or
(E)
A requirement that Executive’s
primary work location be moved to a location that is greater than
thirty-five straight line miles from Executive’s primary work
location immediately prior to the imposition of such
requirement.
“Good Reason” shall not
include any other circumstances, including but not limited to,
Executive’s discharge for Cause, Executive’s
resignation or retirement (other than in the circumstances set
forth in (A) – (E) above), or any leave of
absence.
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c.
Change in Control
Termination . If
Company (with the required approval of the Company’s Board of
Directors) terminates Executive’s employment without Cause or
Executive terminates his employment for Good Reason within two
years following a Change in Control, then, provided Executive signs
a Waiver, as described in subparagraph 3.b above, Company shall pay
Executive the Change in Control Severance Amount defined in the
following sentence: The Change in Control Severance Amount
payable to Executive will equal (a) (i) 2.99 times
Executive’s annual base salary in effect at the time of the
termination of Executive’s employment, or, if greater,
Executive’s annual base salary in effect at the time of the
Change in Control, plus (ii) 2.99 times Executive’s
target annual bonus in effect at the time of the termination of
Executive’s employment, or, if greater, Executive’s
target annual bonus in effect at the time of the Change in
Control. The Change in Control Severance amount will be paid
in a lump sum on the Severance Payment Date, as defined in
Section 22.d.
d.
COBRA Coverage
. If Executive’s
employment is terminated pursuant to subparagraph 3.b above,
Executive may be eligible for Qwest-subsidized COBRA for a period
of 18 months (unless Executive becomes ineligible for or forfeits
severance benefits pursuant to the terms of this Agreement)
following the Executive’s election of COBRA health care
continuation coverage (generally beginning as of the first day of
the first month following the month in which Executive is
designated as terminated on the Qwest payroll system) on the same
basis as for active employees under the group medical plan.
This provision shall not extend the period for which any Executive
is eligible for COBRA continuation coverage.
4.
OFFSET . To the extent permitted by law, any
severance benefits received under this Agreement may be reduced by
the amount(s) of any outstanding monetary debts Executive owes
to Qwest. Such debts will be treated as satisfied to the
extent of the withheld payments.
It is the express intent of Qwest
that the monies received under this Agreement be a set-off against
amounts to which you are entitled under any applicable state
unemployment statute.
5.
NONDISCLOSURE
. Executive will not disclose
outside of Qwest or to any person within Qwest who does not have a
legitimate business need to know, any Confidential Information (as
defined below) during Executive’s employment with the Company
or any other Qwest entity. Executive will not disclose to
anyone or make any use of any Confidential Information of Qwest
after Executive’s employment with Qwest ends for any reason,
except as required by law after timely notice is given by Executive
to Qwest. This agreement not to disclose or use Confidential
Information means, among other things, that Executive, for a period
of 18 months beginning on the effective date of the termination of
Executive’s employment with the Company or any other Qwest
entity for any reason, may not take or perform a job whose
responsibilities would likely lead Executive to disclose or use
Confidential Information. Executive
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acknowledges and agrees that the assumption and
performance of such responsibilities, in that situation, would
likely result in the disclosure or use of Confidential Information
and would likely result in irreparable injury to Qwest.
Moreover, during Executive’s employment with Qwest, Executive
shall not disclose or use for the benefit of Qwest, Executive or
any other person or entity any confidential or trade secret
information belonging to any former employer or other person or
entity to which Executive owes a duty of confidence or
nondisclosure of such information. If a court determines that
this provision is too broad, Executive and Company agree that the
court shall modify the provision to the extent (but not more than
is) necessary to make the provision enforceable.
“Confidential Information” is any oral or written
information not generally known outside of Qwest, including without
limitation, trade secrets, intellectual property, software and
documentation, customer information (including, without limitation,
customer lists), company policies, practices and codes of conduct,
internal analyses, analyses of competitive products, strategies,
merger and acquisition plans, marketing plans, corporate financial
information, information related to negotiations with third
parties, information protected by Qwest’s privileges (such as
the attorney-client privilege), internal audit reports, contracts
and sales proposals, training materials, employment and personnel
records, performance evaluations, and other sensitive
information. This agreement does not relieve Executive of any
obligations Executive has to Qwest under law. Nothing in this
agreement shall limit, restrict, preclude or influence
Executive’s testimony in any way or cause Executive not to
provide truthful testimony or information in any manner or in
response to any inquiry by a governmental official.
6.
NONCOMPETE
. In light of
Executive’s senior level position with Qwest, an
international corporation engaged in a highly competitive business
environment, for a period of 18 months beginning on the effective
date of the termination of Executive’s employment with the
Company or any other Qwest entity, regardless of the reason for the
termination and regardless of the party bringing about the
termination, Executive agrees not to, directly or indirectly,
engage in any business or activity which is in direct competition
with the Company or of any of its subsidiaries or affiliates in the
telecommunications business. The foregoing shall not limit
Executive’s right to accept employment with an investment
bank or public accounting firm, provided Executive does not work or
advise on any matters regarding or involving Company without
Company’s written permission, and shall not apply to passive
investments by Executive of up to 2% of the voting stock of any
publicly traded company or 5% of the voting stock or other
securities of any privately held company, or to service by
Executive on boards of directors of companies as permitted under
this Agreement, regardless of whether such company competes with
the Company. If a court or arbitrator determines that this
provision is too broad, Executive and Company agree that the court
or arbitrator should modify the provision to the extent (but not
more than is) necessary to make the provision
enforceable.
7.
NONSOLICITATION/NO-HIRE . For a period of one year beginning on
the effective date of the termination of Executive’s
employment with the Company or
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any other Qwest entity, regardless of the reason
for the termination and regardless of the party bringing about the
termination, Executive agrees not to induce any employee of Qwest
to leave Qwest’s employment. This agreement means,
among other things, that Executive may not have any part in hiring
anyone who is a Qwest employee, even if Executive is contacted by
the Qwest employee first. For these purposes, employees of
Qwest shall include all persons who are employed by the Company or
any other Qwest entity at the time Executive violates this
paragraph 7 or were employed by the Company or any other Qwest
entity at any time during the six months preceding such
violation. If a court determines that this provision is too
broad, Executive and Company agree that the court should modify the
provision to the extent (but not more than is) necessary to make
the provision enforceable.
8.
REMEDIES FOR VIOLATION OF
PARAGRAPHS 5, 6, OR 7. The Executive agrees that it would
be difficult to measure any damages caused to Qwest which might
result from any breach by the Executive of the promises set forth
in paragraphs 5, 6, and 7, and that in any event money damages
would be an inadequate remedy for any such breach.
Accordingly, subject to paragraph 9, the Executive agrees that if
the Executive breaches, or proposes to breach, any portion of this
Agreement, Qwest or the Company shall be entitled, in addition to
all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without
showing or proving any actual damage to Qwest. The Company
acknowledges that Executive has disclosed the name of his
spouse’s current employer to the Company and agrees that the
fact of such employment shall not, in and of itself, be treated as
a basis for finding that Executive has breached this
Agreement.
9.
DISPUTE RESOLUTION;
ARBITRATION . Executive and the Company agree that in
the event a dispute arises concerning or relating to
Executive’s employment with the Company, or any termination
therefrom, the parties first shall attempt in good faith to resolve
such dispute through mediation. If a resolution through
mediation is not reached, then such dispute shall be submitted to
binding arbitration in accordance with the employment arbitration
rules of Judicial Arbitration and Mediation Services (“
JAMS ”) by a single impartial arbitrator experienced
in employment law selected as follows: Company and Executive
will attempt in good faith to agree upon impartial arbitrator
within thirty days of a request for arbitration. If the
parties cannot agree, they shall request a panel of ten arbitrators
from JAMS and select an arbitrator pursuant to the JAMS
rules. The arbitration shall take place in
Denver, Colorado, and both Executive and the Company agree to
submit to the jurisdiction of the arbitrator selected in accordance
with JAMS’ rules and procedures. The Federal
Arbitration Act, as amended, 9 U.S.C. § 1 et seq. ,
(“ FAA ”) and not state law, shall govern the
arbitrability of all claims, provided they are enforceable under
the FAA. Other than as set forth herein, the arbitrator shall
have no authority to add to, detract from, change, amend, or modify
existing law. The arbitrator shall have the authority to
order such discovery as is necessary for a fair resolution of the
dispute. The arbitrator shall also have the authority to
award any and all relief or remedies provided under the statute or
other law pursuant to which an asserted prevailing claim or defense
is raised, as if the matter were being decided in court. The
arbitrator may award punitive damages, if and
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only to the extent allowed by Title
VII of the Civil Rights Act of 1964, as amended; the Civil Rights
Act of 1991, as amended; the Age Discrimination in Employment Act
of 1967, as amended; and the Americans with Disabilities Act of
1990, as amended; and the arbitrator shall be bound by any
limitations on the amount of punitive or other damages imposed by
said statutes. The arbitrator has no other authority to award
punitive damages. The arbitrator will apply applicable
statutes of limitation, including contractual statutes of
limitations, will honor claims of privilege recognized by law, and
will take reasonable steps to protect confidential or proprietary
information, including the use of protective orders. The prevailing
party in any arbitration shall be entitled to receive reasonable
attorneys’ fees, only to the extent such fees are provided by
the statute or other law pursuant to which an asserted claim or
defense is raised, as if the matter were being decided in court.
The arbitrator’s decision and award shall be final and
binding, as to all Claims that were or could have been raised in
the arbitration, and judgment upon the award rendered by the
arbitrator may be entered by any court having jurisdiction
thereof. Executive will pay the arbitrator’s fees and
expenses up to $150 and Qwest will pay any arbitrator fees
and