Exhibit 10.3

 

 

Employee Name:

 

 

 

(Please Print)

 

AMENDED MASTER DEFERRED ISSUANCE STOCK AGREEMENT

 

This Amended Master Deferred Issuance Stock Agreement (along with the Exhibits
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 “Employee”), an
“Employee” as defined in the Company’s Level 3 Communications, Inc. Stock Plan
(as further 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 Employee the opportunity to acquire a certain number of shares of
its common stock, par value $.01 per share (the “Stock”), in order to retain the
Employee as an employee of the Company or a Subsidiary, 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 Employee relating to a
specified number of shares of Stock that, under certain circumstances and in
accordance with the terms hereof, may result in the Employee 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 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 Employee 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 Employee (i) promptly after the death of the Employee, or the
Permanent Total Disability of the Employee, 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 Employee 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; provided,
however, that if the Employee is a “specified employee” as defined in Treasury
Regulation 1.409A-1(i)(1), the issuance of the Deferred Shares shall be delayed
until the date that is six months and one day following the date of the
Employee’s Separation from Service as a result of retirement.  For purposes of
this Agreement, “Permanent Total Disability” means that:  (i) the Employee 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,
or (ii) the Employee is, by reason of any medically determinable physical or
mental

 

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impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months, receiving income replacement
benefits for a period of not less than three months under an accident or health
plan covering employees of the Company.  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 Employee ceases to be an employee of the Company or of a
Subsidiary (other than as a result of death, Permanent Total Disability,
Separation from Service on account of retirement, in accordance with the
Company’s retirement plan then in effect or Separation from Service on account
of a termination of the Employee’s employment by the Company without Cause
following a Change in Control), the Company no longer will be obligated to issue
any unissued Deferred Shares to the Employee, and the Employee will forfeit any
right to acquire any unissued Deferred Shares from the Company.

 

4.                                       Taxes; Withholding. 
(a) 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 Employee has paid (in cash or by certified or cashier’s check)
to the Company all withholding taxes required 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 Employee is entitled to receive the Deferred Shares, the Employee
shall forfeit such Deferred Shares.  The Company shall be responsible for the
determination of the amount of any Withholding Taxes based on the last sale
price for the Stock on the Stock’s principal trading market on the Issuance Date
or the last trading date if the Issuance Date is not a day upon which the Stock
has traded.  To the extent that the Employee desires to pay the Withholding
Taxes in cash or by certified or cashier’s check, with respect to a specific
Issuance Date, the Employee must deliver a separate Withholding Taxes Cash
Payment Notification to the Company’s stock plan administrator substantially in
the form of Exhibit B no later than 45 days prior to that specific Issuance
Date.  To the extent that the Employee elects to pay the Withholding Taxes in
cash or by certified or cashier’s check, such payment must be received by the
Company’s stock plan administrator no later than one (1) Business Day after the
Issuance Date of any Deferred Shares that is the subject of the Withholding
Taxes Cash Payment Notification.

 

(b)  The Company, in its sole discretion, may permit the Employee to pay any or
all Withholding Taxes through delivery of outstanding Stock or by the Company
withholding a portion of the Deferred Shares issuable pursuant to this
Agreement.  The Employee, however, will have no absolute right to pay the
Withholding Taxes with Stock, and, if such payment is permitted by the Company,
such payment must be made in strict compliance with rules for such payments
established by the Company.  As of the date of this Agreement, unless the
Company has received a properly executed and delivered Withholding Taxes Cash
Payment Notification from the Employee, the Company currently intends to have
the Withholding Taxes paid through the withholding of Stock issuable upon
satisfaction of the terms and conditions set forth in this Agreement (a “net
issuance”).  The Stock that is withheld by the Company as part of the net
issuance (the “Withheld Shares”) will be sold on behalf of the Employee as
contemplated by

 

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subsection (c) of this Section 4; provided, however, that at the sole discretion
of the Company, the Withheld Shares may be retained by the Company and the
Company will satisfy the Withholding Taxes from the Company’s available cash.
The Company reserves the right to change its method with respect to the Employee
for the collection of Withholding Taxes that may be owed by the Employee at any
time in its sole discretion, upon notice to the Employee, which notice may be
written or electronic notice.

 

(c)  By the execution of this Agreement, to the extent that the Company elects
to issue the Deferred Shares as a net issuance, and, the Employee has not
properly executed and delivered to the Company’s stock plan administrator a
Withholding Taxes Cash Payment Notification, the Employee hereby irrevocably
instructs the Company and a broker of the Company’s choosing, to sell on behalf
of the Employee at the “market price,” that number of shares of Stock required
to generate sufficient funds to equal the Withholding Taxes required to be paid
by the Employee pursuant to this Section 4.  The Employee represents to the
Company and the broker that the Employee is entering into this Agreement in good
faith.  The Employee shall have no ability to modify these instructions other
than by the proper execution and delivery to the Company’s stock plan
administrator of a Withholding Taxes Cash Payment Notification.  It is the
Employee’s intention that this provision comply with the requirements of
Rule 10b5-1 promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934.

 

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

 

6.                                       Non-Transferability of Right to Receive
Deferred Shares.  Unless specifically permitted by the Committee, the Employee
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 Employee in accordance with
Section 10.2.1 of the Plan or (b) pay the Employee in a combination of cash and
stock the value of the Deferred Shares in accordance with Section 10.2.2 of the
Plan.  In the event that there is a Change in Control that does not qualify as a
409A Change in Control, if the Employee undergoes a Separation from Service on
account of his termination of employment by the Company without Cause following
such Change in Control, the Company will, in its sole discretion, either
(a) issue all unissued Deferred Shares to the Employee in accordance with
Section 10.2.1 of the Plan or (b) pay the Employee in a combination of cash and
stock the value of the Deferred Shares in

 

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accordance with Section 10.2.2 of the Plan; provided, however, that if the
Employee is a “specified employee” as defined in Treasury Regulation
1.409A-1(i)(1), the issuance of the Deferred Shares or cash shall be delayed
until the date that is six months and one day following the date of such
Separation from Service.  For purposes of this Agreement, “Cause” means: 
(i) the Employee’s conviction of or pleading guilty or no contest to a felony,
(ii) the Employee’s habitual use of drugs (including alcohol) which adversely
affects the Employee’s job performance, or (iii) the Employee’s engaging in
willful misconduct or willful neglect which is injurious to the Company.

 

9.                                       Gross-Up.  If the issuance of Deferred
Shares would result in “excess parachute payments” to the Employee pursuant to
Section 280G of the Internal Revenue Code of 1986, as amended (the “Code”), the
Company will pay the Employee an amount sufficient to put the Employee in the
same position as the Employee would have been if the taxes imposed on the
Employee pursuant to Section 4999 of the Code had not been imposed.  Any such
payment will include payment of an amount equal to any income taxes assessed on
the Employee with respect to payments pursuant to this Section.  The Company
will make any such payment no later than the end of the Employee’s taxable year
following the Employee’s taxable year in which such tax owed by such Employee
that is subject to the tax gross-up payment is remitted to the applicable taxing
authority.  Any such payment will in all other respects be made in accordance
with the rules, regulations and procedures adopted by the Company from time to
time with respect to such payments under the Plan.

 

10.                                 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 Employee shall be responsible for all brokerage expenses
associated with the permitted sale of any Deferred Shares.

 

11.                                 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.

 

12.                                 The Plan.  This Agreement is subject to, and
the Employee agrees to be bound by, all of the terms and conditions of the
Plan.  The Employee 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 Employee of any of his or
her rights under this Agreement.

 

13.                                 Miscellaneous.  (a) The Employee 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.

 

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(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 Employee must be in writing
addressed to the Employee at the address for the Employee in the records of the
Company or by email or other electronic means using a system maintained by the
Company or its Subsidiary.  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)                                  The Employee is an employee at will, and
nothing in this Agreement confers upon the Employee any right to continued
employment with the Company or limits in any way the right of the Company to
terminate the employment of the Employee at any time.

 

(d)                                 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.

 

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

 

(f)                                    Although any information sent to or made
available to the Employee 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 Employee 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 Employee a notice of any amendments made to this Agreement
pursuant to this subsection.

 

(h)                                 To the extent that the Company has issued a
Deferred Issuance Stock Award Letter to the Employee on a date prior to the date
of this Agreement, the terms of this Agreement shall supersede, amend and
restate the terms of any such previously executed agreement governing such
Deferred Issuance Stock Award Letter between the Company and the Employee with
respect to the issuance of Deferred Shares; provided, however, that the terms of
any outstanding Deferred Issuance Stock Award Letter as to the number of
Deferred Shares that is the subject of the Deferred Issuance Stock Award Letter
and the applicable Issuance Date(s) set forth in the Deferred Issuance Stock
Award Letter shall remain in full force and effect.

 

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

 

 

 

LEVEL 3 COMMUNICATIONS, INC.

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

 

EMPLOYEE

 

 

 

 

 

 

 

Name:

 

 

 

Date of Hire:

 

 

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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 Amended Master Deferred Issuance Stock Agreement (“Master Agreement”)
constitutes an award to the individual whose name appears on the signature line
below (“Employee”) 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 further 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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EXHIBIT B

LEVEL 3 COMMUNICATIONS, INC.

WITHHOLDING TAXES CASH PAYMENT NOTIFICATION

 

This Withholding Taxes Cash Payment Notification is being delivered by the
individual whose name appears on the signature line below (the “Employee”) in
reference to an Award of Deferred Shares made to the Employee by Level 3
Communications, Inc. (the “Company”) pursuant to that certain Amended Master
Deferred Issuance Agreement dated as of                                  between
the Company and the Employee (the “Master Agreement”).  Capitalized terms used
in this Withholding Taxes Cash Payment Notification without definition have the
meaning given to those terms in the Master Agreement.

 

This Withholding Taxes Cash Payment Notification relates to the Award of
Deferred Shares granted to the Employee pursuant to the Award Letter issued to
the Employee dated                                           , the restrictions
on which will lapse as to                            Deferred Shares on 
                                         (the “Referenced Award”).

 

The Employee hereby irrevocable elects to pay any Withholding Taxes that are
owed by the Employee upon the Issuance Date in cash or by certified or cashier’s
check made payable to Level 3 Communications, Inc. within one (1) Business Day
of the Issuance Date.  All payments of Withholding Taxes are to be made to the
Company’s stock award administrator.*

 

The Employee hereby represents and warrants to the Company that on the date
hereof, the Employee is not in possession of material non-public information
regarding the business or financial condition of the Company and its
subsidiaries.

 

To the extent that the Employee is subject to the Company’s Insider Trading
Policy’s restrictions on the ability to trade the Company’s securities other
than during an open trading window, the Employee expressly acknowledges that: 
(a) the Employee has executed this Withholding Taxes Cash Payment Notification
during an open trading window pursuant to the Company’s Insider Trading Policy;
and (b) the Employee may not sell any shares of Stock that are distributed to
the Employee on the Issuance so long as the trading window is closed.

 

 

Employee:

 

 

 

(Please sign)

 

 

 

 

 

Name:

 

 

 

 

 

(Please print)

 

Date of Hire:

 

Date:

 

 

 

 

 

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* Delivery information with respect to the payment of Withholding Taxes must be
obtained from the Company’s stock plan administrator.

 

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