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:

 

 

3.1

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

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.

 

 

3.3.

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.

 

 

3.4

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.

 

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
unwaivable claims referred to above and any indemnification rights available in
the Certificate of Incorporation or by-laws at the time of an indemnification
claim, if any. EMPLOYEE waives these claims on behalf of himself and on behalf
of his heirs, assigns, and anyone who may or does make a claim in his behalf.
The claims waived and discharged include, but are not limited to: claims of
breach of express or implied contract, promissory estoppel, detrimental
reliance, wrongful discharge, infliction of emotional distress, claims under

 

 

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the Employee Retirement Income Security Act of 1974 or the Family and Medical
Leave Act of 1993, the WARN Act, or claims of discrimination under the Title VII
of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act of 1967, as amended, the Americans with Disabilities Act of 1990,
the Sarbanes Oxley Act of 2002, the Internal Revenue Code, or any other local,
state or federal law or regulation, as of the date of this Agreement. EMPLOYEE
specifically agrees and covenants not to sue COMPANY, its predecessors,
successors and assigns, as well as past and present officers, directors, and
employees for any of the above mentioned claims, or any other claim related to
his employment and EMPLOYEE represents and warrants that he has not filed any
such claim to date.

 

7.             Non Disparagement; Cooperation. EMPLOYEE will engage in no
conduct and make no statements that are derogatory about or detrimental to
COMPANY or any of its officers or employees. COMPANY, through any of its
leadership at the level of Group Vice President and above, will engage in no
conduct and make no statements that are derogatory about or detrimental to
EMPLOYEE. EMPLOYEE further agrees to continue to cooperate with the COMPANY and
its representatives in all pending and future claims and litigation against the
COMPANY for which he may have information and knowledge, and further agrees to
cooperate with COMPANY with respect to wrapping up matters where he was
involved, including necessary debriefings.

 

8.

Company Information, Property and Intellectual Property.

 

EMPLOYEE affirms that

 

(a)      s/he has turned over to his/her manager any information in his/her
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; and that he/she
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 without
prior written approval from his/her direct supervisor; and

 

(b)   s/he has returned or will promptly return to COMPANY all COMPANY
equipment, Confidential Information, and other materials and that s/he will not
at any time, except as authorized by the President of COMPANY, for his/her own
benefit or the benefit of any other person or entity, disclose or cause to be
disclosed any information, materials, systems, procedures, processes, manuals,
forms, customer or employee lists, business plans or other trade secrets or
confidential information regarding COMPANY. EMPLOYEE further acknowledges and
agrees that s/he continues to be bound by the COMPANY’S Intellectual Property
and Confidential Information policies, previously acknowledged by EMPLOYEE,
copies of which are attached hereto as Exhibit “B”.

 

9.             No Solicitation/No Competition. EMPLOYEE agrees, for a period of
12 months beyond EMPLOYEE’S termination date set forth in paragraph 1 above,
that he will not: (a) 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 COMPANY; (b) solicit from any corporation, firm, or
organization that is a customer of COMPANY any business, service, or product
that the COMPANY is providing said customer; (c) induce or attempt to induce any

 

 

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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 (d)
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 engaged
in the same business as COMPANY, offers for sale the same products or services
as the COMPANY, or otherwise is a competitor of COMPANY, without the express
written consent of the Chairman of the Compensation Committee of the COMPANY.
Section 9(d) shall be limited to: (i) companies that include within their
corporate structure competitive local exchange carrier(s) and/or incumbent local
exchange carrier(s), which with affiliates have, for their most recent fiscal
year, annual consolidated total communications revenue equal to or greater than
$1 Billion; or (ii) providers of content delivery network services which with
affiliates have, for their most recent fiscal year, consolidated total content
delivery network revenues greater than $50 million; or (iii) international
communication services providers which with affiliates have a presence in the
United States and, with affiliates, have, for their most recent fiscal year,
annual consolidated total revenue equal to or greater than $1Billion; or (iv) XO
Holdings, Inc., Global Crossing Ltd., Qwest Communications International Inc.,
AT&T Inc., Sprint Nextel Corporation, Time Warner Telecom Inc., Verizon
Communications Inc., Limelight Networks, Inc., Akamai Technologies Inc., PAETEC
Holding Corp., Reliance Communications Venture Limited, including in each case
their affiliates, successors and assigns.

 

10.           Remedies. EMPLOYEE agrees further that if he breaches or otherwise
acts inconsistent with the provisions of Paragraphs 6, 7, 8 or 9, COMPANY’S
obligations under the provisions of Paragraphs 2 and 3 are terminated, and
COMPANY may bring an action in a court of competent jurisdiction and recover as
liquidated damages pursuant to the terms of Paragraph 2 and 3 of this Agreement,
its costs and attorney’s fees and any other available remedy. EMPLOYEE also
expressly acknowledges that any breach or threatened breach of Paragraphs 8 or 9
might cause irreparable injury to the COMPANY and that money damages may not
provide an adequate remedy at law for such injury. To the extent there is
litigation involving this Agreement, the party who substantially prevails shall
be entitled to their fees and expenses.

 

11.           Non-Admission. This Agreement will not in any way be construed as
an admission by COMPANY of a violation of any federal, state or local law or
ordinance, or any enforceable right of EMPLOYEE, and COMPANY specifically denies
any wrongdoing on its part, or on the part of its directors, employees or
agents.

 

12.           Headings. The headings of the sections herein are included solely
for convenience of reference and, whether included or not, shall not control the
meaning or interpretation of any of the provisions of this Agreement.

 

13.           Review and Acknowledgment. This Separation Agreement and General
Release sets forth the entire agreement between EMPLOYEE and COMPANY and may not
be modified or canceled in any manner except in writing and signed by both
parties. EMPLOYEE hereby acknowledges that COMPANY has made no representations
or promises to me other than those contained in this Agreement. If any provision
of this Agreement is found to be unenforceable, that provision will be enforced
to the greatest extent permitted by law and all other provisions will remain
fully enforceable.

 

 

 

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This Agreement will be governed by Colorado law. Any action to enforce the terms
of this Separation Agreement and General Release will be brought exclusively in
state or federal court located in the City and County of Denver, Colorado and
EMPLOYEE and COMPANY consent to personal jurisdiction and venue in those courts.

 

14.           EMPLOYEE acknowledges that he has read and understands the
following notifications:

 

 

(a)

EMPLOYEE is advised to and understands his opportunity to consult with an
attorney regarding the Agreement before executing it;

 

 

(b)

EMPLOYEE acknowledges that he executes this Agreement having been advised and
understands that it releases any and all claims under the Age Discrimination in
Employment Act of 1967;

 

 

(c)

EMPLOYEE acknowledges that he was provided this Agreement on March 12, 2008 and
that he has up to twenty-one (21) days in which to consider and accept this
Agreement;

 

 

(d)

EMPLOYEE may revoke this Agreement at any time within seven (7) days following
execution of this Agreement by delivering written notice of such revocation to
Thomas C. Stortz, Executive Vice President, 1025 Eldorado Boulevard, Broomfield,
Colorado 80021, and that this Agreement will not become effective or enforceable
until the expiration of this seven (7) day revocation period;

 

 

(e)

by entering into this Agreement, EMPLOYEE has read and understands the terms of
this Agreement, that his signature below is truly voluntary, and that he has
entered into this Agreement knowingly and willfully.

 

DATED this 20th day of March, 2008

 

EMPLOYEE

 

 

/s/ Kevin J. O’Hara              

Kevin J. O’Hara

 

 

COMPANY

 

By: /s/ Thomas C. Stortz     

Title: EVP                               

 

 

 

 

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