Exhibit 10.4

 

MASTER DEFERRED ISSUANCE STOCK AGREEMENT

FOR NON-EMPLOYEE DIRECTORS

 

This Master Deferred Issuance Stock Agreement for Non-Employee Directors (along
with the Exhibit hereto, this “Agreement”) is entered into as of
                                          , by and between Level 3
Communications, Inc., a Delaware corporation (the “Company”), and the individual
whose name appears on the signature page to this Agreement (the “Director”), an
“Employee” as defined in the Company’s Level 3 Communications, Inc. Stock Plan
(as amended from time to time, the “Plan”).

 

The Company, pursuant to a grant of authority from the Compensation Committee of
the Company’s Board of Directors (the “Committee”), may, from time to time,
grant to the Director the opportunity to acquire a certain number of shares of
its common stock, par value $.01 per share (the “Stock”), in consideration of
the Director’s service as a member of the Company’s Board of Directors, pursuant
to the Plan (an “Award”).

 

The parties agree as follows:

 

1.                                       Obligation to Issue Deferred Shares. 
Subject to the terms and conditions of this Agreement, the Company, from time to
time in its sole discretion, may grant Awards to the Director relating to a
specified number of shares of Stock that, under certain circumstances and in
accordance with the terms hereof, may result in the Director having the right to
receive shares of Stock (the “Deferred Shares”).  Each Award will be evidenced
by a Deferred Issuance Stock Award Letter (an “Award Letter”) in the form
attached as Exhibit A hereto (or such other form, including electronic form, as
approved by the Company), which sets forth the date of the Award (the “Award
Date”), the number of Deferred Shares that are the subject of the Award, and the
dates on which the Company will issue the Deferred Shares to the Director
subject to the terms of this Agreement and any further terms that may be set
forth in the applicable Award Letter (each such date, an “Issuance Date”).

 

2.                                       Acceleration of Issuance of Deferred
Shares.  Notwithstanding Section 1, the Company will issue all unissued Deferred
Shares to the Director (i) promptly after the death of the Director, or the
Permanent Total Disability of the Director, or (ii) upon or following a Change
in Control, as provided in Section 8.  In addition, the Company will issue all
unissued Deferred Shares to the Director promptly after the date of the
Employee’s Separation from Service (as defined below) on account of retirement
in accordance with the Company’s retirement plan then in effect.  For purposes
of this Agreement, “Permanent Total Disability” means that:  (i) the Director is
unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of less than 12
months.  For purposes of this Agreement, “Separation from Service” shall mean a
separation from service as defined in Treasury Regulation 1.409A-1(h)(1).

 

3.                                       Forfeiture of Right to Acquire Deferred
Shares.  If the Director ceases to be a member of the Company’s Board of
Directors (other than as a result of death, Permanent Total Disability or
Separation from Service on account of retirement, in accordance with the

 

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Company’s retirement plan then in effect), the Company no longer will be
obligated to issue any unissued Deferred Shares to the Director, and the
Director will forfeit any right to acquire any unissued Deferred Shares from the
Company.

 

4.                                       Taxes; Withholding.  (a) As of the date
of this Agreement, the Director is not subject to Withholding Taxes (as defined
below).  Notwithstanding anything contained herein to the contrary, other than
Section 8 and Section 9, the Company will not be obligated to issue the Deferred
Shares unless the Director has paid (in cash or by certified or cashier’s check)
to the Company all withholding taxes required as of date after the date of this
Agreement to be collected by the Company under Federal, State, local or foreign
law as a result of the issuance of the Deferred Shares (“Withholding Taxes”);
provided, however, that if the Withholding Taxes are not paid within thirty (30)
days following the date on which the Director is entitled to receive the
Deferred Shares, the Director shall forfeit such Deferred Shares.

 

5.                                       Share Certificates.  Share certificates
for Deferred Shares will not be issued.  Upon issuance, Deferred Shares will be
deposited into an account for the Director that is established by the Company.

 

6.                                       Non-Transferability of Right to Receive
Deferred Shares.  Unless specifically permitted by the Committee, the Director
may not transfer, assign, pledge or hypothecate the right to receive the
Deferred Shares, and the right to receive the Deferred Shares may not be
transferred or assigned by operation of law, or be subject to execution,
attachment or similar process other than by will or the laws of descent and
distribution.

 

7.                                       Changes in Capital Structure.  The
number of Deferred Shares subject to this Agreement is subject to adjustment
pursuant to Section 10.1 of the Plan upon the occurrence of the events described
in that Section.

 

8.                                       Change in Control.  Notwithstanding
Section 1, upon a Change in Control of the Company that also qualifies as a
“change in control event” as defined in Treasury Regulation 1.409A-3(i)(5)(i) (a
“409A Change in Control”), the Company will, in its sole discretion, either
(a) issue all unissued Deferred Shares to the Director in accordance with
Section 10.2 of the Plan or (b) pay the Director in a combination of cash and
stock the value of the Deferred Shares in accordance with Section 10.2 of the
Plan.

 

9.                                       Costs.  The Company will pay all
original issue and transfer taxes with respect to, and all other costs, fees and
expenses incurred by the Company in connection with, the issuance of Deferred
Shares.  Upon issuance, the Director shall be responsible for all brokerage
expenses associated with the permitted sale of any Deferred Shares.

 

10.                                 Applicable Law.  No Deferred Shares will be
issued and delivered unless and until, in the opinion of legal counsel for the
Company, such securities may be issued and delivered without causing the Company
to be in violation of or incur any liability under any federal, state or other
legal requirement, including applicable securities laws.

 

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11.                                 The Plan.  This Agreement is subject to, and
the Director agrees to be bound by, all of the terms and conditions of the
Plan.  The Director acknowledges that the Plan may be amended from time to time,
and that under the Plan, the Committee has conclusive authority to interpret and
construe the Plan and this Agreement and is authorized to adopt rules for
carrying out the Plan.  In the event of any inconsistency or discrepancy between
the provisions of this Agreement and the terms and conditions of the Plan, the
provisions of the Plan will govern and prevail.  No amendment to or
interpretation of the Plan, however, may deprive the Director of any of his or
her rights under this Agreement.

 

12.                                 Miscellaneous.  (a) The Director will not
have any interest in, or any dividend, voting or other rights of a stockholder
with respect to, the Deferred Shares until the Deferred Shares are issued in
accordance with this Agreement.

 

(b)                                 Any notice to be given to the Company must
be in writing addressed to the Company in care of the Administrator, at its
principal office, and any notice to be given to the Director must be in writing
addressed to the Director at the address for the Director in the records of the
Company or by email or other electronic means using a system maintained by the
Company.  Any such notice will be deemed duly given when delivered by hand,
deposited in the United States mail, registered or certified mail or transmitted
electronically without a notice of failed delivery.

 

(c)                                  This Agreement must be construed in
accordance with the laws of the State of Colorado, other than choice of law
rules thereof calling for the application of laws of another jurisdiction.

 

(d)                                 Terms used but not defined in this Agreement
have the meanings ascribed to them under the Plan.

 

(e)                                  Although any information sent to or made
available to the Director concerning the Plan and this Award is intended to be
an accurate summary of the terms and conditions of the Award, this Agreement and
the Plan are the authoritative documents governing the Award and any
inconsistency between the Agreement and the Plan, on one hand, and any other
summary information, on the other hand, shall be resolved in favor of the
Agreement and the Plan.

 

(g)                                 Notwithstanding anything herein to the
contrary, this Agreement may be amended by the Committee from time to time
without the consent of the Director to the extent the Committee deems it
appropriate to cause this Agreement and/or each Award hereunder to comply with
Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)
(including the distribution requirements thereunder) or be exempt from
Section 409A and/or the tax penalty under Section 409A(a)(1)(B).  The Company
will provide to the Director a notice of any amendments made to this Agreement
pursuant to this subsection.

 

[Signature page follows]

 

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IN WITNESS WHEREOF,  this Agreement is entered into by the Director and by the
Company as of the date first above written.

 

 

 

LEVEL 3 COMMUNICATIONS, INC.

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

 

DIRECTOR

 

 

 

 

 

 

 

Name:

 

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EXHIBIT A

 

LEVEL 3 COMMUNICATIONS, INC.

DEFERRED ISSUANCE STOCK AWARD LETTER

 

This Deferred Issuance Stock Award Letter (the “Award”) when taken together with
the Master Deferred Issuance Stock Agreement for Non-Employee Directors (“Master
Agreement”) constitutes an award to the individual whose name appears on the
signature line below (“Director”) of Deferred Shares with respect to the shares
of common stock of Level 3 Communications, Inc. (the “Common Stock”) under the
Level 3 Communications, Inc. Stock Plan (as amended from time to time).

 

The terms and conditions of this Award are set forth below and in the Master
Agreement, the provisions of which are incorporated herein by reference.

 

A.                                   The date of this Award is
                     (the “Award Date”).

 

B.                                     The number of Deferred Shares with
respect to which this Deferred Issuance Award Letter relates
is                     .

 

C.                                     The Issuance Date(s) for the Deferred
Shares are as follows:

 

D.                                    The following are conditions to the
occurrence of the Issuance Date(s):

 

 

 

LEVEL 3 COMMUNICATIONS, INC.

 

 

 

 

 

BY:

 

 

ITS:

 

 

 

 

 

 

EMPLOYEE:

 

 

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