Exhibit 10.1

 

RETIREMENT AGREEMENT AND GENERAL RELEASE

 

This Retirement Agreement and General Release (“Agreement”) is entered into by
and between Thomas C. Stortz (“RETIREE”) and LEVEL 3 COMMUNICATIONS, LLC
including its direct and indirect parent, subsidiary, and affiliated entities
(“COMPANY”).

 

In consideration of the promises contained in this Agreement, the COMPANY and
RETIREE agree as follows:

 

1.             Retirement.  RETIREE’S retirement from the COMPANY will be
effective April 1, 2011 (the “Retirement Date”) and RETIREE shall no longer be
employed with COMPANY following the Retirement Date.  Effective automatically
upon the Retirement Date, or such prior date(s) as RETIREE and COMPANY may agree
upon, RETIREE hereby resigns all director and/or officer positions that the
RETIREE holds with the COMPANY and any COMPANY affiliates.

 

2.             Retirement Payment and Continuing Eligibility for Other Benefits.

 

a.               Provided that RETIREE signs and does not revoke this Agreement,
upon the expiration of the seven day revocation period explained in paragraph 17
or as soon thereafter as administratively feasible, and provided that RETIREE
complies with the terms and provisions of this Agreement and in consideration of
RETIREE’s years of service to the COMPANY, notice provided with respect to his
retirement, and his efforts in transitioning his responsibilities, COMPANY will
pay RETIREE $712,500, equal to eighteen months base salary, less any legally
required withholdings and/or any applicable deductions. Such payment shall be
made in a lump sum distribution as soon as administratively feasible after the
Retirement Date, but in no event later than June 6, 2011, or at such time as
otherwise required in accordance with Section 3 of this Agreement.

 

b.              RETIREE shall remain eligible for, and neither this Agreement
nor RETIREE’s retirement shall affect, COMPANY’s payment of any discretionary
bonus to RETIREE for calendar year 2010, if the COMPANY’s Compensation Committee
shall determine to award RETIREE a bonus for 2010, as determined in its sole
discretion.  In addition, if COMPANY pays a discretionary bonus to its current
employee base for calendar year 2011, RETIREE will be eligible to receive
twenty-five percent of RETIREE’s targeted bonus amount of $475,000, multiplied
by the percentage to which COMPANY funds any such discretionary bonus for
calendar year 2011, to be paid by COMPANY to EXECUTIVE on the date that COMPANY
pays any such discretionary bonus to its then-current employees.  All bonus
amounts shall be paid less any legally required withholdings and/or applicable
deductions.

 

c.               RETIREE shall remain eligible for, and neither this Agreement
nor RETIREE’s retirement shall affect, COMPANY’s vesting of certain
Outperforming Stock Options

 

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(“OSOs”) and Restricted Stock Units (“RSUs”) in accordance with COMPANY’s
current retirement benefit program, as follows:

 

(i)                                     RETIREE and COMPANY are parties to one
or more Outperform Stock Option Master Award Agreements (the “OSO Master Award
Agreements”), which incorporates and is governed by the Level 3
Communications, Inc. Stock Plan, as amended from time to time (the “Stock
Plan”).  RETIREE was granted certain OSO awards consistent with the OSO Master
Award Agreements and 1,032,247 OSO awards will be unvested and outstanding as of
the Retirement Date.  In accordance with COMPANY’s current retirement benefit
program and the terms of the OSO Master Award Agreements, RETIREE’S 1,032,247
unvested and outstanding OSOs shall not expire on the Retirement Date and shall
remain outstanding until the Settlement Date (as that term is defined in each
Award Letter issued pursuant to the OSO Master Award Agreements).

 

(ii)                                  RETIREE and COMPANY are parties to an
Amended Master Deferred Issuance Stock Agreement (“RSU Agreement”), which
incorporates and is governed by the Stock Plan.   RETIREE was granted certain
RSU awards consistent with the above-referenced Amended Master Deferred Issuance
Stock Agreement and 773,779 will remain restricted as of the Retirement Date. 
In accordance with COMPANY’s current retirement benefit program and the terms of
the RSU Agreement, the restrictions on 773,779 RSUs shall lapse on the
Retirement Date.

 

d.              Upon the Retirement Date, in consideration of this Agreement and
all other benefits RETIREE shall receive in accordance with COMPANY’s current
retirement benefit program, RETIREE agrees to execute a separate release with
terms substantially the same as set forth in this Agreement.

 

Except as provided herein, RETIREE will not be entitled to any additional
vesting in any of the COMPANY’S stock plans, stock option plans or other benefit
plans, including the RSU Agreement and OSO Master Award Agreements, and all
unvested RSU and OSO awards shall be forfeited.  COMPANY reserves the right to
make, and the RETIREE hereby consents to, any amendments to the Plan, the
RETIREE’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. This Agreement is not intended to nor shall it modify the expiration
date of any award of OSOs or RSUs.

 

3.             Tax Requirements.   Notwithstanding any provision in this
Agreement to the contrary, any payment otherwise required to be made hereunder
to RETIREE, at any date as a result of the termination of RETIREE’S employment
(other than any payment made in reliance

 

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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 can be made without violating the requirements of
Section 409A(a)(2)(B)(i) of the Code, they shall be paid to RETIREE, in a single
cash lump sum, an amount equal to the aggregate amount of all payments delayed
pursuant to the preceding sentence.

 

4.             RETIREE’S Obligation To Satisfy Loans And/Or Debts.  RETIREE
agrees that it is a condition of this Agreement that he will satisfy fully any
debt, loan or other financial obligation that RETIREE has with COMPANY.  COMPANY
reserves the right to deduct any outstanding debt or obligations from the
retirement payment.

 

5.             Breach Of Agreement.  RETIREE agrees that if he breaches this
Agreement, COMPANY may bring an action in a court of competent jurisdiction and
seek to recover damages and COMPANY’s costs and attorney’s fees.   The parties
agree that the exact harm to the COMPANY by virtue of any breach of Sections 11
(Confidential Information), 12 (Non-Solicitation), and 13 (Non-Disparagement and
Cooperation) of this Agreement would be impossible to calculate and that
liquidated damages are appropriate.  RETIREE agrees that if he breaches or acts
in a manner inconsistent with Sections 11 (Confidential Information), 12
(Non-Solicitation), and 13 (Non-Disparagement and Cooperation) of this
Agreement, COMPANY may bring an action in a court of competent jurisdiction and
recover as liquidated damages any amounts RETIREE has received pursuant to this
Agreement, plus the COMPANY’S costs and attorney’s fees.

 

6.             Return of Property.  RETIREE will immediately return to the
COMPANY’S Chief Executive Officer (“CEO”) any information in his custody that is
(i) considered a COMPANY record; (ii) subject to a legal hold; or
(iii) otherwise critical to the conduct of Level 3 business.  RETIREE represents
that he has not deleted, removed or altered and will not delete or otherwise
remove or alter any data or configuration from any COMPANY equipment or system
that he is not authorized to remove in the ordinary course of business without
prior written approval from the CEO.  Additionally, RETIREE will promptly return
to COMPANY all COMPANY equipment, Confidential Information (as defined in
paragraph 11), and other materials; provided, however, that following COMPANY’s
imaging of RETIREE’s laptop computer on or after RETIREE’s Retirement Date and
deletion of COMPANY information as deemed appropriate in COMPANY’s discretion,
COMPANY will return such laptop to RETIREE for his personal use.

 

7.             Release Of Claims By RETIREE.  RETIREE releases and discharges
COMPANY, and any COMPANY-sponsored benefit plans in which RETIREE participates,
and all of their respective owners, officers, directors, trustees, shareholders,
agents, employees, attorneys, insurers, predecessors, successors and assigns,
past, present, and future, from any and all claims, actions, causes of action,
rights, benefits, compensation, incentives, or damages, (including costs and
attorneys’ fees), of whatever nature, whether known or unknown, suspected or
unsuspected, matured or unmatured, now existing or arising in the future from
any act,

 

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omission, or event, prior to the date RETIREE signs this Agreement arising out
of or in any way related to RETIREE’S employment with COMPANY.  This release
includes but is not limited to any claims under any federal, state, or local
laws prohibiting discrimination in employment, including Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act, Americans with
Disabilities Amendment Act, and the Uniformed Services Employment and
Reemployment Rights Act; based upon any other law governing the workplace, based
upon any workplace policy, representation, or compensation plan including the
Employee Retirement Income Security Act of 1974; based upon any employment
agreement, severance plan, or change in control agreement; and based upon any
alleged legal restriction on COMPANY’S right to terminate its RETIREE’S
employment.  This release does not include, however, any claims that cannot be
released by private agreement.  RETIREE understands that RETIREE is releasing
potentially unknown claims, and that RETIREE has limited knowledge with respect
to some of the claims being released.  RETIREE acknowledges that there is a risk
that, after signing this agreement, RETIREE may learn information that might
have affected RETIREE’s decision to enter into this Agreement.  RETIREE assumes
this risk and all other risks of any mistake in entering into this Agreement. 
RETIREE agrees that this release is fairly and knowingly made.  The foregoing
release does not waive any rights or claims with respect to any other claim that
cannot be released by private agreement.  RETIREE warrants that RETIREE has no
known workplace injuries other than those RETIREE has already reported as of the
date of this Agreement and that RETIREE has been paid and/or has received all
leave (paid or unpaid), compensation, wages, bonuses, commissions, and/or
benefits to which RETIREE may be entitled and that no other leave (paid or
unpaid), compensation, wages, bonuses, commissions, and/or benefits are due to
RETIREE, except as provided or otherwise referenced in this Agreement.  RETIREE
agrees that the retirement benefits described herein exceed any claim that
RETIREE might have to any other wages, compensation, or benefits of any kind
earned by RETIREE by operation of law or agreement, and that the retirement
benefits therefore includes consideration for the remainder of RETIREE’s
promises in this Agreement.  The foregoing release does not waive any rights or
claims with respect to: (a) RETIREE’s vested interest in any RETIREE benefit
plan (other than severance plans) maintained by COMPANY; (b) RETIREE’s rights
under this Agreement; (c) COMPANY’s indemnity obligations to RETIREE under
COMPANY’s or any of its affiliates’ (including its parent company’s) articles or
certificates of incorporation or formation, bylaws, or other documents providing
such indemnity obligations, respecting all claims associated with or otherwise
arising from RETIREE’s actions taken within the scope of his employment as an
employee, officer or director of COMPANY or any of its affiliates, including its
parent company, prior to the Retirement Date, which shall include the
availability of all insurance coverages that may apply to such claims; and
(d) RETIREE’s rights under the worker’s compensation laws of the State of
Colorado.

 

8.             Releases Apply To Representative Actions.  This release applies
to any claims brought by any person or agency on behalf of RETIREE, or any class
or representative action pursuant to which RETIREE may have any right or
benefit. RETIREE covenants and agrees not to participate in any class or
representative action that may include or encompass any of the released claims.
 RETIREE promises not to accept any recoveries or benefits which may be obtained
on her/his behalf by any other person or agency or in any class or
representative action

 

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that may include or encompass any of the released claims, and RETIREE assigns
any such recovery or benefit to the COMPANY or its successors and assigns.

 

9.             No Claims Filed or Assigned.  RETIREE warrants that RETIREE has
not filed any claim against COMPANY or any of the individuals or entities
released in paragraph 7, and that RETIREE will not do so at any time in the
future concerning any of the claims released in this Agreement.  RETIREE
covenants that RETIREE has the necessary authority to execute this Agreement,
and has not assigned any interest in any claims to a third party.  COMPANY
covenants that it has the necessary authority to execute this Agreement and has
not assigned any interest in any claims to a third party.

 

10.           Parties Bound.  This Agreement is binding on and shall inure to
the benefit of the parties and to those individuals and entities released in
paragraph 7, as well as to all of their heirs, successors, and assigns.

 

11.           Confidential Information.  RETIREE acknowledges that, as a result
of his employment by COMPANY, he has been exposed to confidential information
that is not generally known to the public, all of which information is owned by
COMPANY.  This includes information developed by RETIREE, alone or with others,
or entrusted to RETIREE by customers or others.  COMPANY’S confidential
information includes, without limitation, information relating to its personnel,
human resources, legal issues, finances, business and strategic plans, trade
secrets, know-how, procedures, purchasing, accounting, marketing, sales,
customers and executives.  RETIREE agrees that as long as such information is
not made public by the COMPANY, RETIREE shall hold such information in strict
confidence and not disclose or use it except as specifically authorized by the
COMPANY and for the COMPANY’S benefit.  RETIREE further acknowledges and agrees
that he continues to be bound by the COMPANY’S Intellectual Property and
Confidential Information Agreement.

 

12.           Non-Solicitation.  In recognition of the consideration set forth
in this Agreement, RETIREE agrees that beginning on the Retirement Date and for
twelve (12) months thereafter, RETIREE will not: (i) directly or indirectly
solicit the services of, induce away from employment with, or hire any employee
of COMPANY or its affiliates during their employment with the COMPANY;
(ii) solicit from any corporation, firm, or organization that is a customer of
COMPANY any business, service, or product that the COMPANY provides to said
customer; or (iii) induce or attempt to induce any customer, supplier, licensee
or other business relation of the COMPANY to cease doing business with the
COMPANY or interfere with the relationship between any such customer, supplier,
licensee or business relation and COMPANY; or (iv) without the express written
consent of the CEO or the Chief Operating Officer of the Company, which consent
shall not be unreasonably withheld, directly or indirectly engage in, own,
manage, be employed by, assist, loan money to, or promote business for any
person or entity who or which is a competitor of COMPANY.

 

13.           Non-Disparagement And Cooperation. RETIREE will not directly or
indirectly, publicly or privately disparage COMPANY or any of its officers,
directors, methods, services, or products.  COMPANY agrees not to directly or
indirectly, publicly or privately, disparage

 

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RETIREE.  COMPANY’S obligations with respect to non-disparagement hereunder
shall be applicable to COMPANY’S officers with the title of president, executive
vice president, or higher.  RETIREE further agrees to reasonably cooperate with
COMPANY and its representatives in all pending and future claims, litigation,
and/or legal or regulatory matters involving the COMPANY and to otherwise
reasonably assist the COMPANY in such matters.  COMPANY shall pay all reasonable
expenses incurred by RETIREE resulting from RETIREE’s cooperation in litigation
and related matters.

 

14.           No Admission.  This Agreement is intended to set forth the terms
of RETIREE’s separation from the COMPANY and the terms and conditions
surrounding this cessation of his employment with the COMPANY.  Nothing
contained herein shall be construed as an admission of any wrongdoing or
liability by the COMPANY.

 

15.           Voluntary Agreement.  RETIREE understands the final and binding
effect of this Agreement and is signing it voluntarily.  RETIREE acknowledges
that RETIREE has been advised to consult with an attorney and that RETIREE has
had the opportunity to do so, if desired, prior to signing this Agreement.

 

16.           Review Period.  RETIREE has the right to consider this Agreement
for a period of twenty-one (21) calendar days from his last day of employment
before signing it, though RETIREE may elect to sign the Agreement prior to the
expiration of that time.

 

17.           Effective Date and Right of Revocation.  RETIREE has the right to
revoke this Agreement for a period of seven (7) calendar days following the
signing of this Agreement.  To revoke this Agreement, RETIREE must notify
COMPANY in writing, directed to Lon Licata, Senior Vice President, Legal, Level
3 Communications, LLC, 1025 Eldorado Blvd., Broomfield, CO  80021.  This
Agreement shall become effective when this revocation period has expired.

 

18.           Entire Agreement.  This Agreement constitutes a single integrated
contract expressing the entire agreement of the parties and supersedes all prior
and contemporaneous oral and written agreements and discussions with respect to
the subject matter.  There are no other agreements, written or oral, express or
implied, between the parties, concerning the subject matter.  This Agreement may
not be amended or modified except by written agreement signed by RETIREE and an
officer of the COMPANY. If any of the provisions of the Agreement are held to be
invalid or unenforceable, the remaining provisions will nevertheless continue to
be valid and enforceable.

 

19.           Governing Law.  This Agreement shall be construed in accordance
with the laws of the State of Colorado.

 

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20.           No Waiver.  Failure by any party to enforce any of its rights or
remedies provided to it in this Agreement shall not be deemed a waiver of those
rights.

 

THIS IS A RELEASE - MY SIGNATURE BELOW ACKNOWLEDGES THAT I HAVE READ THIS
AGREEMENT CAREFULLY IN ITS ENTIRETY BEFORE SIGNING AND THAT I KNOW AND
UNDERSTAND ITS CONTENTS AND VOLUNTARILY AGREE TO ALL OF ITS TERMS.

 

DATED this 16th day of February, 2011.

 

 

/s/ Thomas C. Stortz

 

Thomas C. Stortz

 

 

 

 

 

Level 3 Communications, LLC

 

 

 

/s/ James Q. Crowe

 

By: James Q. Crowe

 

Title: CEO

 

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