Document:

Exhibit No. 10(i)

 

SECOND
AMENDED AND RESTATED

CHANGE
IN CONTROL SEVERANCE AGREEMENT

 

This second
amended and restated agreement (the “Agreement”) is made as of the 31st day of
December, 2008, by and between CONSTELLATION ENERGY GROUP, INC. (the “Company”)
and John R. Collins (the “Executive”).

 

WHEREAS, the Company and the Executive are parties to
a an Amended and Restated Change in Control Severance Agreement dated as of January 27,
2006 (the “Original Agreement”);

 

WHEREAS, the Company and the Executive modified the
Original Agreement by letter agreement dated February 15, 2006 (“the
Amended Agreement”);

 

WHEREAS, the Company and the Executive desire to amend
and restate the Original and Amended Agreements so that they will be replaced
in its entirety with this Agreement;

 

WHEREAS, the
Company wishes to encourage the orderly succession of management in the event
of a Change in Control (as hereinafter defined);

 

WHEREAS, the
Company desires to maintain a severance benefit for the Executive covering the
period from the date of a Change in Control until the end of the twenty-four
month period following the date of a Change in Control, to avoid the loss or
the serious distraction of the Executive to the detriment of the Company and
its stockholders prior to and during such period when the Executive’s undivided
attention and commitment to the needs of the Company would be particularly
important; and

 

WHEREAS, the
Executive desires to devote the Executive’s time and energy for the benefit of
the Company and its stockholders and not to be distracted as a result of a
Change in Control.

 

NOW, THEREFORE,
the parties agree as follows:

 

1.                                      Definitions.

 

1.1                                Annual
Award Amount.  The term “Annual Award
Amount” means, as of the applicable date of determination, the average of the
two highest annual incentive awards under the Company’s annual incentive plan
(or the annual incentive plan maintained by a successor Company or a
Subsidiary) payable or actually paid under the terms of such annual incentive
plan for the performance year during which the date of determination occurs,
and in respect of the last four years to the Executive prior to the date of
determination; provided, however, that (a) if the Executive
has not been employed by the Company or a Subsidiary for a sufficient length of
time to have been eligible for payment of at least two annual incentive awards,
deemed target award payout shall be used for the one or two 

 

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years for which
the Executive was not so eligible, except that the maximum payout shall be used
for the performance year in which the date of determination occurs; (b) for
any year during which an annual incentive award was paid or is payable to the
Executive that was prorated because of less than a year of plan participation,
such award shall be annualized, except that for the year in which the date of
determination occurs, the maximum payout shall be used; and (c) for any
year during which a guaranteed minimum annual incentive award amount was paid
or is payable to the Executive, such full (not prorated because of less than a
full year of plan participation) guaranteed annual incentive amount shall be
used for such year.

 

1.2                                Board.  The term “Board” means the Board of Directors
of the Company.

 

1.3                                Cause.  The term “Cause” means the occurrence of any
one or more of the following:

 

(a)                                  The
Executive is convicted of a felony involving moral turpitude or that involves
the misappropriation of property of the Company or a Subsidiary; or

 

(b)                                 The
Executive engages in conduct or activities that constitutes disloyalty to the
Company or a Subsidiary and such conduct or activities are materially damaging
to the property, business or reputation of the Company or a Subsidiary; or

 

(c)                                  The
Executive persistently fails or refuses to comply with any written direction of
an authorized representative of the Company other than a directive constituting
an assignment described in Section 1.7(a); or

 

(d)                                 The
Executive embezzles or knowingly, and with intent, unlawfully appropriates any
corporate opportunity of the Company or a Subsidiary.

 

A
termination of the Executive’s employment for Cause for purposes of this
Agreement shall be effected in accordance with the following procedures.  The Company shall give the Executive written
notice (“Notice of Termination for Cause”) of its intention to terminate the
Executive’s employment for Cause, setting forth in reasonable detail the
specific conduct of the Executive that it considers to constitute Cause and the
specific provision(s) of this Agreement on which it relies, and stating
the date, time and place of the Board Meeting for Cause.  The “Board Meeting for Cause” means a meeting
of the Board at which the Executive’s termination for Cause will be considered,
that takes place not less than ten (10) and not more than twenty (20)
business days after the Executive receives the Notice of Termination for
Cause.  The Executive shall be given an
opportunity, together with counsel, to be heard at the Board Meeting for Cause.  The Executive’s Termination for Cause shall
be effective when and if a resolution is duly adopted at the Board Meeting for
Cause by a two-thirds vote of the entire membership of the Board, excluding
employee directors, stating that in the good faith opinion of the Board, the
Executive is guilty of the conduct described in the Notice of Termination for
Cause, and that conduct constitutes Cause under this Agreement.

 

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Notwithstanding the
foregoing, no event described hereunder shall constitute Cause if such event is
a result of an isolated, insubstantial and inadvertent action that is not taken
in bad faith and that is remedied by the Executive within ten (10) days
after receipt of the Notice of Termination for Cause by the Executive from the
Company.

 

1.4                                Change in Control. 
The term “Change in Control” means the occurrence of any one of the
following events:

 

(a)                                  individuals who, on January 24,
2003, constitute the Board (the “Incumbent Directors”) cease for any reason to
constitute at least a majority of the Board, provided that
any person becoming a director subsequent to January 24, 2003, whose
election or nomination for election was approved by a vote of at least
two-thirds of the Incumbent Directors then on the Board (either by a specific
vote or by approval of the proxy statement of the Company in which such person
is named as a nominee for director, without written objection to such
nomination) shall be an Incumbent Director; provided, however,
that no individual initially elected or nominated as a director of the Company
as a result of an actual or threatened election contest with respect to
directors or as a result of any other actual or threatened solicitation of
proxies by or on behalf of any person other than the Board shall be deemed to
be an Incumbent Director;

 

(b)                                 any “person” (as such term is defined in Section 3(a)(9) of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and as
used in Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is
or becomes a “beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the “Company
Voting Securities”); provided, however, that the event described
in this paragraph (b) shall not be deemed to be a Change in Control
by virtue of any of the following acquisitions:  (A) by the
Company or any Subsidiary, (B) by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary, (C) by
any underwriter temporarily holding securities pursuant to an offering of such
securities, (D) pursuant to a Non-Qualifying Transaction (as defined in
paragraph (c)), or (E) pursuant to any acquisition by Executive or any
group of persons including Executive (or any entity controlled by Executive or
any group of persons including Executive);

 

(c)                                  there is consummated a merger,
consolidation, statutory share exchange or similar form of corporate
transaction involving the Company or any of its Subsidiaries (a “Business
Combination”), unless immediately following such Business Combination:  (A) more than 60% of the total voting
power of (x) the corporation resulting from such Business Combination (the
“Surviving Corporation”), or (y) if applicable, the ultimate parent
corporation that directly or indirectly has beneficial ownership of at least
95% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting
Securities that were outstanding immediately prior to such Business 

 

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Combination (or, if
applicable, is represented by shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportion as the voting
power of such Company Voting Securities among the holders thereof immediately
prior to the Business Combination, (B) no person (other than any employee
benefit plan (or related trust) sponsored or maintained by the Surviving
Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 20% or more of the total voting power of the
outstanding voting securities eligible to elect directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving Corporation)
and (C) at least a majority of the members of the board of directors of
the Parent Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors at the time of the Board’s approval of the execution of the
initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A), (B) and (C) above
shall be deemed to be a “Non-Qualifying Transaction”); or

 

(d)                                 the stockholders of the Company approve a
plan of complete liquidation or dissolution of the Company, or the consummation
of a sale of all or substantially all of the Company’s assets.

 

Notwithstanding the foregoing, a Change in Control of
the Company shall not be deemed to occur solely because any person acquires
beneficial ownership of more than 20% of the Company Voting Securities as a
result of the acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding; provided, that
if after such acquisition by the Company such person becomes the beneficial
owner of additional Company Voting Securities that increases the percentage of
outstanding Company Voting Securities beneficially owned by such person, a
Change in Control of the Company shall then occur.

 

1.5                                Effective Date. 
The term “Effective Date” means the first date during the term of this
Agreement on which a Change in Control occurs provided that the Executive is
employed by the Company or a Subsidiary on such date.  Anything in this Agreement to the contrary
notwithstanding, if the Executive’s employment with the Company or a Subsidiary
has terminated for any reason prior to the first date on which a Change in
Control occurs, this Agreement shall be null and void as of the date of such
termination of employment; provided, however, that if it is
reasonably demonstrated that such termination (i) was at the request of a
third party who has taken steps reasonably calculated to effect a Change in
Control, or (ii) otherwise arose in connection with or anticipation of a
Change in Control, then for all purposes of this Agreement the “Effective Date”
shall mean the date immediately prior to the date of such termination.

 

1.6                                Eligible
to Retire.  The term “Eligible to
Retire” means an Executive who has met the eligibility requirements for
retirement under any Company or Subsidiary supplemental 

 

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executive
non-qualified defined benefit retirement plan in which the Executive participated
immediately prior to the occurrence of a Qualifying Termination.

 

1.7                                Good
Reason.  The term “Good Reason”
means, without the Executive’s express written consent, the occurrence after
the Effective Date of any one or more of the following:

 

(a)                                  The
assignment to the Executive of duties materially inconsistent with the
Executive’s authorities, duties, responsibilities, and status (including
offices, title and reporting relationships) as an executive and/or officer of
the Company or a Subsidiary immediately prior to the Effective Date, or a
material reduction or alteration in the nature or status of the Executive’s
authorities, duties, or responsibilities from those in effect immediately prior
to the Effective Date, (including as a type of such reduction or alteration for
an Executive who is an officer of a publicly traded company immediately prior
to the Effective Date, the Executive occupying the same position or title but
with a company whose stock is not publicly traded), unless such act is remedied
by the Company or such Subsidiary within 10 business days after receipt of
written notice thereof given by the Executive; or

 

(b)                                 A
reduction by the Company or a Subsidiary of the Executive’s base salary in
effect immediately prior to the Effective Date or as the same shall be
increased from time to time, unless such reduction is less than ten percent
(10%) and it is either (i) replaced by an incentive opportunity equal in
value; or is (ii) consistent and proportional with an overall reduction in
management compensation due to extraordinary business conditions, including but
not limited to reduced profitability and other financial stress (i.e., the base
salary of the Executive will not be singled out for reduction in a manner
inconsistent with a reduction imposed on other executives of the Company or
such Subsidiary); or

 

(c)                                  The
relocation of the Executive’s office more than 50 miles from the Executive’s
office immediately prior to the Effective Date; or

 

(d)                                 Failure
of the Company or a Subsidiary (whichever is the Executive’s employer) to
provide (i) the Executive the opportunity to participate in all applicable
incentive, savings and retirement plans, practices, policies and programs of
the Company or such Subsidiary to the same extent as other senior executives
(or, where applicable, retired senior executives) of the Company or such
Subsidiary, and (ii) the Executive and/or the Executive’s family, as the
case may be, the opportunity to participate in, and receive all benefits under,
all applicable welfare benefit plans, practices, policies and programs provided
by the Company or such Subsidiary, including, without limitation, medical,
prescription, dental, disability, sick benefits, accidental death and travel
insurance plans and programs, to the same extent as other senior executives
(or, where applicable, retired senior executives) of the Company or such
Subsidiary; or

 

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(e)                                  Failure
of the Company or a Subsidiary (whichever is the Executive’s employer) to
provide the Executive such perquisites as the Company or such Subsidiary may
establish from time to time which are commensurate with the Executive’s
position and at least comparable to those received by other senior executives
at the Company or such Subsidiary; or

 

(f)                                    The
aggregate benefits provided to the Executive by the Company following a Change
in Control are materially less than the aggregate benefits made available to
the Executive immediately prior to such Change in Control; or

 

(g)                                 The
failure by the Company to comply with paragraph (c) of Section 14 of
this Agreement; or

 

(h)                                 Any
other substantial breach of this Agreement by the Company that either is not
taken in good faith or is not remedied by the Company promptly after receipt of
notice thereof from the Executive.

 

The Executive’s
right to terminate employment for Good Reason shall not be affected by the
Executive’s incapacity due to physical or mental illness.  The Executive’s continued employment shall
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason herein; provided, however,
a termination of employment by the Executive for Good Reason for purposes of
this Agreement shall be effectuated by giving the Company written notice (“Notice
of Termination for Good Reason”) of the termination, at any time during the
Protection Period, setting forth in reasonable detail the specific conduct of
the Company that constitutes Good Reason and the specific provision(s) of
this Agreement on which the Executive relied. 
Unless the parties agree otherwise, a termination of employment by the
Executive for Good Reason shall be effective on the thirtieth (30th) day following the date when
the Notice of Termination for Good Reason is given during which time the
Company shall have the opportunity to remedy the conduct, unless the notice
sets forth a later date (which date shall in no event be later than sixty (60)
days after the notice is given); provided, however, that no event
described hereunder shall constitute Good Reason if such event is a result of
an isolated, insubstantial and inadvertent action that is not taken in bad
faith and that is remedied by the Company within ten (10) days after
receipt of the Notice of Termination for Good Reason by the Company from the
Executive.  If the Executive continues to
provide services to the Company after one of the events giving rise to Good
Reason has occurred, it will be in no way considered a waiver of the Executive’s
right to terminate his employment at any time during the Protection Period for
Good Reason in connection with such event.

 

1.8                                Ineligible
to Retire.  The term “Ineligible to
Retire” means an Executive who has not met the eligibility requirements for
retirement under any Company or Subsidiary supplemental executive non-qualified
defined benefit retirement plan in which the Executive participated immediately
prior to the occurrence of a Qualifying Termination.

 

1.9                                Qualifying
Termination.  The term “Qualifying
Termination” means

 

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(a)                                  The
occurrence of any one or more of the following employment termination events
during the period beginning with the Effective Date and ending on the second
anniversary of such date, shall constitute a “Qualifying Termination”:

 

(i)                                     The
Company’s termination of the Executive’s employment without Cause (as defined
in Section 1.3); or

 

(ii)                                  The
Executive’s resignation for Good Reason (as defined in Section 1.7).

 

(b)                                 A
Qualifying Termination shall not include a termination of employment by reason
of death, disability, the Executive’s voluntary termination of employment
without Good Reason, or the Company’s termination of the Executive’s employment
for Cause.

 

(c)                                  The
date of a Qualifying Termination shall be the date the Executive has a
separation from service under Internal Revenue Code Section 409A and the
regulations thereunder.

 

1.10                          Protection
Period.  The Term “Protection Period”
means the two (2) year period commencing on the Change in Control and
ending on the second anniversary of the Change in Control.

 

1.11                          Subsidiary.  The term “Subsidiary” means any corporation
with respect to which the Company owns a majority of the outstanding shares of
common stock or has the power to vote or direct the voting of sufficient securities
to elect a majority of the directors.

 

2.                                     Term
of Agreement.  The term of this
Agreement commences on the date hereof and shall continue until the third
annual anniversary of the date hereof; provided, however, that
commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof
hereinafter referred to as the “Renewal Date”), the term of this Agreement
shall be extended automatically so as to terminate on the third anniversary of
such Renewal Date, unless at least 60 days prior to the Renewal Date the Board
affirmatively votes not to so extend the term of this Agreement.  Notwithstanding the foregoing, upon a
Qualifying Termination, the term of this Agreement shall continue until the
Company or its successor shall have fully performed all of its obligations
hereunder with respect to the Executive, with no future performance being
possible.  This Agreement may be
terminated at any time by the Board with the written consent of the
Executive.  Notwithstanding the
foregoing, this Agreement shall automatically terminate upon cessation of
Executive’s employment with the Company and its Subsidiaries prior to the
Effective Date.

 

3.                                      Severance Benefits for an Executive Ineligible to
Retire.  Upon the
occurrence of a Qualifying Termination with respect  to
an Executive who is Ineligible to Retire:

 

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(a)                                  Severance
Payment.  The Company shall pay to
the Executive an amount equal to two times the sum of (i) the greater of (A) the
Executive’s annual base salary as of immediately prior to the occurrence of the
Change of Control or (B) the Executive’s annual base salary (as  in effect on the date of the Qualifying Termination, not
reduced by any reduction described in Section 1.7(b) above that would
constitute Good Reason) and (ii) the greater of (A) the Annual Award
Amount, determined with the date of the Change of Control as the date of
determination, or (B) the Annual Award Amount, determined with the date of
the Qualifying Termination as the date of determination.  The payment shall be made in a lump sum after
the Qualifying Termination, and within 5 business days after the Company
receives the executed agreement referred to in 3(e) below but in no case
prior to the expiration of any period during which the Executive is permitted
to revoke such agreement.

 

(b)                                 Supplemental
Retirement Benefits.  For purposes of
determining the Executive’s supplemental retirement benefits which the
Executive is entitled to under the Company’s supplemental non-qualified
retirement plan in which the Executive participated immediately prior to the
Qualifying Termination (or the supplemental retirement plan maintained by a
successor company or a Subsidiary), (i) the Executive’s service percentage
shall be computed by adding two years of executive-level service to the
Executive’s actual service; (ii) any minimum age and service eligibility
requirements for such benefits shall be waived and such benefits shall be fully
vested; (iii) Annual Award Amount shall be used to compute such benefits
in lieu of any other annual incentive award amount under such plan and (iv) for
purposes of computing the present value of the benefit to be paid to the
Executive at age 62, two years will be added to the Executive’s age.  Notwithstanding the foregoing, on a
Qualifying Termination, the Executive will be entitled to receive an amount
equal to the greater of (i) the amount that would have been payable under
this Section 3(b) under the supplemental non-qualifed retirement plan
in which he participated had the Qualifying Termination occurred on the Change
in Control or (ii) the amount payable under this Section 3(b) under
the supplemental non-qualified retirement plan in which he participated as of
the date of the Qualifying Termination.

 

(c)                                  Severance Health Benefits.  Commencing upon a Qualifying Termination and
continuing through the second anniversary of such Qualifying Termination, the
Executive and/or the Executive’s family, as the case may be, shall receive all
medical and dental benefits and any life insurance coverage provided to active
employees of the Company, and such benefits shall be provided on an insured
basis. In addition, if the Executive has attained age fifty (50) as of his
Qualifying Termination (or would have attained age fifty (50) had he remained
employed through the period ending on the second anniversary of his Qualifying
Termination), the Company shall make available to the Executive insured medical
and dental benefits at prevailing retiree coverage rates (based on the
executive’s age and deemed service on the second anniversary of his Qualifying
Termination), 

 

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beginning upon the second anniversary of the Executive’s Qualifying
Termination and lasting for the Executive’s life. The Executive must elect
retiree medical and dental coverage within five (5) years after the second
anniversary of his Qualifying Termination, in order to be entitled to the
benefit described in the second sentence of this paragraph, and will commence
receiving such coverage effective as soon as practicable after the date of such
election in accordance with the terms of the applicable retiree medical and
dental programs.  If the Company either
cannot, or chooses not to, provide the benefits in the first or second
sentences, as applicable, the Company may provide such benefits on a
non-insured basis or may instead provide adequate compensation to the Executive
such that he may purchase the benefit from a 3rd party on a tax
neutral basis.

 

(d)                                 Release.  The benefits described in this Section 3
are payable by the Company to the Executive only if after the date of the
Qualifying Termination, the Executive executes (and does not subsequently
revoke) in writing and submits to the Company a mutual release and waiver of
legal claims, including those against the Company and its Subsidiaries, in the
form attached hereto. Following receipt of the Executive’s signed mutual
release pursuant to this Agreement, which release shall be delivered to the
Company no later than sixty (60) days following the date of the Qualifying
Termination (absent the existence of a material dispute between the parties
regarding the benefits) the Company shall have ten (10) days from the date
such release becomes irrevocable to execute the release and deliver a copy to
the Executive.  If the Company fails to
execute such release within the time frame established by the preceding
sentence, the release shall be deemed to have been signed by the Company and
shall be fully enforceable by each party against the other.

 

(e)                                        Benefits
Paid to Estate of Executive on Death. 
If the Executive dies (i) after termination of the Executive’s
employment without Cause or (ii) after providing the Company with Notice
of Termination for Good Reason during the Protection Period and a Good Reason
event has occurred, but before all payments or benefits due to him under this
Agreement have been paid, then in such case any payments and benefits due to
him at the time of his death under this Agreement, shall be paid to his estate
in accordance with the same terms as described in the provisions of this
Agreement. Such benefits shall expressly include continuation of any severance
health benefits for which the Executive was eligible under Section 2(c) for
the Executive’s family.

 

4.                                   Severance
Benefits for an Executive Eligible to Retire.  Upon the occurrence of a Qualifying
Termination with respect to an Executive who is Eligible to Retire:

 

(a)                                        Severance
Payment.  The Company shall pay to
the Executive an amount equal to the amount determined under Section 3(a) of
this Agreement.  The payment shall be
made in a lump sum after the Qualifying Termination, and within 5 business days
after the Company receives the executed agreement referred to in Section 

 

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4(e) below,
but in no case prior to the expiration of any period during which the Executive
is permitted to revoke such agreement.

 

(b)                                 Supplemental
Retirement Benefits.  For purposes of
determining the Executive’s supplemental retirement benefits which the
Executive is entitled to under the Company’s supplemental non-qualified
retirement plan in which the Executive participated immediately prior to the
Qualifying Termination (or the supplemental retirement plan maintained by a
successor company or a Subsidiary), (i) the Executive’s service percentage
shall be computed by adding two years of executive-level service to the
Executive’s actual service; (ii) Annual Award Amount shall be used to
compute such benefits in lieu of any other annual incentive award amount under
such plan; and (iii) for purposes of computing the present value of the
benefit to be paid to the Executive at age 62, two years will be added to the
Executive’s age.   Notwithstanding the
foregoing, on a Qualifying Termination, the Executive will be entitled to
receive an amount equal to the greater of (i) the amount that would have
been payable under this Section 4(b) under the supplemental
non-qualified retirement plan in which he had participated had the Qualifying
Termination occurred on the Change in Control or (ii) the amount payable
under this Section 4(b) under the supplemental non-qualified
retirement plan in which he participated as of the date of the Qualifying
Termination.

 

(c)                                  Severance
Health Benefits.  Commencing upon a
Qualifying Termination and continuing through the second anniversary of such
Qualifying Termination, the Executive and/or the Executive’s family, as the
case may be, shall receive all medical and dental benefits and any life
insurance coverage provided to active employees of the Company, and such
benefits shall be provided on an insured basis. 
In addition, if the Executive has attained age fifty (50) as of his
Qualifying Termination (or would have attained age fifty (50) had he remained
employed through the period ending on the second anniversary of his Qualifying
Termination), the Company shall make available to the Executive insured medical
and dental benefits at prevailing retiree coverage rates (based on the
executive’s age and deemed service on the second anniversary of his Qualifying
Termination), beginning upon the second anniversary of the Executive’s
Qualifying Termination and lasting for the Executive’s life. The Executive must
elect retiree medical and dental coverage within five (5) years after the
second anniversary of his Qualifying Termination, in order to be entitled to
the benefit described in the second sentence of this paragraph, and will
commence receiving such coverage effective as soon as practicable after the
date of such election in accordance with the terms of the applicable retiree
medical and dental programs.  If the
Company either cannot, or chooses not to, provide the benefits in the first or
second sentences, as applicable, the Company may provide such benefits on a
non-insured basis or may instead provide adequate compensation to the Executive
such that he may purchase the benefit from a 3rd party on a tax neutral basis.

 

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(d)                                 Release.  The benefits described in this Section 4
are payable by the Company to the Executive only if after the date of the
Qualifying Termination, the Executive executes (and does not subsequently
revoke) in writing and submits to the Company a mutual release and waiver of
legal claims, including those against the Company and its Subsidiaries, in the
form attached hereto. Following receipt of the Executive’s signed mutual
release pursuant to this Agreement, which release shall be delivered to the Company
no later than sixty (60) days following the date of the Qualifying Termination
(absent the existence of a material dispute between the parties regarding the
benefits), the Company shall have ten (10) days from the date such release
becomes irrevocable to execute the release and deliver a copy to the
Executive.  If the Company fails to
execute such release within the time frame established by the preceding
sentence, the release shall be deemed to have been signed by the Company and
shall be fully enforceable by each party against the other.

 

(e)                                  Benefits Paid to
Estate of Executive on Death.  If the
Executive dies (i) after termination of the Executive’s employment without
Cause or (ii) after providing the Company with Notice of Termination for
Good Reason during the Protection Period and a Good Reason event has occurred,
but before all payments of benefits due to him under this Agreement have been
paid, then in such case any payments and benefits due to him at the time of his
death under this Agreement, shall be paid to his estate in accordance with the
same terms as described in the provisions of this Agreement. Such benefits
shall expressly include continuation of any severance health benefits for which
the Executive was eligible under Section 4(c) for the Executive’s
family.

 

5.                                      Grant
of Replacement Options upon a Change in Control.  Some or all of the outstanding options to
purchase common stock of the Company outstanding under the Company’s equity
compensation plans (the “Equity Plans”) as of the occurrence of a Change in
Control will be cashed-out in accordance with the terms of the applicable plans
in connection with any Change in Control (the “Cashed-Out Options”).  As soon as practicable following the
occurrence of a Change in Control, the Company shall, subject to shareholder
approval, cause the applicable committee or committees administering the Equity
Plans to grant the Executive additional stock options (the “Replacement Options”)
to purchase common stock of the Company (or, if the Company is not the
surviving entity in connection with a Change in Control, common stock of the
surviving entity).  The Replacement
Options will (i) be granted on substantially the same terms and conditions
as the Cashed-Out Options (including provisions related to the term), (ii) have
an exercise price equal to the greater of (A) the fair market value of the
underlying common stock at the time of grant and (B) the exercise price of
the Cashed-Out Options to which they relate, as adjusted to take into account
the transaction or transactions that resulted in the Change in Control, (iii) relate
to the same number of shares as the Cashed-Out Options (as adjusted to take
into account the transaction or transactions that resulted in the Change in
Control), (iv) vest in accordance with the terms of the schedule of the
Cashed-Out Options to which they relate (excluding any vesting that occurs as a
result of such Change

 

11

 

in Control and, for purposes of determining the vesting schedule, the
Replacement Options will be deemed to have been granted at the time of grant of
the Cashed-Out Options to which they relate), and (v) will remain
exercisable for the same period as the Cashed-Out Options would have been
exercisable had they not been terminated. The Replacement Options shall vest in
full as of a Qualifying Termination. 
Notwithstanding anything to the contrary set forth herein, the
Replacement Options will not vest in connection with a subsequent transaction
(the “Subsequent Transaction”) following the Change in Control in which such
Replacement Options were granted (the “Initial Change in Control”) that would
constitute a Change in Control if such Subsequent Transaction merely increases
the percentage ownership of common stock of the Company held by the person or
entity whose initial acquisition of common stock of the Company triggered the
Initial Change in Control.

 

6.                                      Non-Exclusivity of Rights.  Nothing in this Agreement shall prevent or
limit the Executive’s continuing or future participation in any plan, program,
policy or practice provided by the Company or a successor company or a
Subsidiary (whichever is the Executive’s employer) for which the Executive may
qualify, nor shall anything in this Agreement limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company or a successor Company or such Subsidiary.  However, if the Executive receives severance
benefits under this Agreement, the Executive is not also entitled to any
benefit under any other severance plan, program, arrangement or agreement
maintained by the Company or a Subsidiary. 
Vested benefits and other amounts that the Executive is otherwise
entitled to receive under any incentive compensation (including, but not
limited to any restricted stock or stock option agreements), deferred
compensation and other benefit programs listed in Section 1.7(d), life
insurance coverage, or any other plan, policy, practice or program of, or any
contract or agreement with, the Company or a successor Company or such
Subsidiary on or after the date of the Qualifying Termination shall be payable
in accordance with the terms of each such plan, policy, practice, program,
contract or agreement, as the case may be, except as explicitly modified by
this Agreement.

 

7.                                      Full Settlement.  The Company’s obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action that the Company may have against the Executive or
others.  In no event shall the Executive
be obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Executive under any of the provisions
of this Agreement and, such amounts shall not be reduced, regardless of whether
the Executive obtains other employment.

 

8.                                      Certain Additional Payments by the Company.

 

(a)                                  Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution (including an acceleration of vesting, or a
lapse of restrictions on amounts otherwise subject to vesting) by the

 

12

 

Company to or for the benefit of the Executive (a “Payment”) would be
subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code of 1986, as amended (the “Code”) or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively referred to
as the “Excise Tax”), then the Executive shall be entitled to receive an
additional payment (a “Gross-Up Payment”) in an amount such that after payment
by the Executive of all taxes (including any interest or penalties imposed with
respect to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereon) and Excise Tax imposed
upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payment.

 

(b)                                 Subject to the
provisions of paragraph (c) of this Section 8, all determinations
required to be made under this Section 8, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
one of the major internationally recognized certified public accounting firms
(commonly referred to, as of the date hereof, as a Big Four firm) designated by
the Executive and approved by the Company (which approval shall not be
unreasonably withheld) (the “Accounting Firm”), which shall provide detailed
supporting calculations both to the Company and the Executive within fifteen
(15) business days of the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company.  In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group affecting
the change of control, the Executive shall designate another Big Four
accounting firm (subject to the approval of the Company, which approval shall
not be unreasonably withheld) to make the determinations required hereunder
(which accounting firm shall then be referred to as the Accounting Firm
hereunder).  All fees and expenses of the
Accounting Firm shall be borne solely by the Company.  Any Gross-Up Payment, as determined pursuant
to this Section 8, shall be paid by the Company to the Executive within
five (5) days of the receipt of the Accounting Firm’s determination.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”)
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to paragraph (c) of this Section 8 and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company to or
for the benefit of the Executive.

 

13

 

(c)                                  The Executive shall
notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up
Payment. Such notification shall be given as soon as practicable but no later
than ten (10) business days after the Executive is informed in writing of
such claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid.  The Executive shall not pay such claim prior
to the expiration of the thirty (30) day period following the date on which the
Executive gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:

 

(i)                                   give
the Company any information reasonably requested by the Company relating to
such claim,

 

(ii)                                take
such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,

 

(iii)                             cooperate
with the Company in good faith in order effectively to contest such claim, and

 

(iv)                             permit
the Company to participate in any proceedings relating to such claim;

 

PROVIDED, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses.  Without limitation on the foregoing
provisions of this paragraph (c) of Section 8, the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the
Executive agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; PROVIDED, however, that if
the Company directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on an
interest-free basis and shall indemnify and hold the Executive harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to
any imputed income with respect to such advance; and PROVIDED, further, that
any extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested amount
is claimed to

 

14

 

be due is limited solely to such contested amount.  Furthermore, the Company’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(d)                                 If, after the receipt by
the Executive of an amount advanced by the Company pursuant to paragraph (c) of
this Section 8, the Executive becomes entitled to receive any refund with
respect to such claim, the Executive shall promptly take all necessary action
to obtain such refund and (subject to the Company’s complying with the
requirements of paragraph (c) of this Section 8) upon receipt of such
refund shall promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto).  If after the receipt by the
Executive of an amount advanced by the Company pursuant to paragraph (c) of
this Section 8, a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the amount
of such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.

 

(e)                                  Notwithstanding
anything herein to the contrary, the Company shall pay all amounts that it is
required to pay to or on behalf of the Executive under the foregoing provisions
of this Section 8 not later than the end of the calendar year following (1) the
calendar year in which the related Taxes are remitted to the applicable taxing
authority, or (2) in the case of amounts relating to a claim described in Section 8(c) that
does not result in the remittance of any Taxes, the calendar year in which the
claim is finally settled or otherwise resolved.

 

9.                                      Certain
Additional Agreements under Section 409A.

 

(a)                                  In the event the
payment of any amounts under this Agreement would be treated as non-qualified
deferred compensation under Section 409A of the Code, such payment will be
delayed for six (6) months after the date of the Executive’s Qualifying
Termination if required in order to avoid additional tax under Section 409A
of the Code; provided, however, that if the Executive incurs a separation from
service within the meaning of Code section 409A prior to his Qualifying
Termination, then such six (6) month delay period shall commence with the
date of his prior separation from service. If the Executive dies within six (6) months
following a Qualifying Termination (or his prior separation from service, if
applicable), any such delayed payments shall not be further delayed, and shall
be immediately payable to the Executive’s estate in accordance with the
applicable provisions of this Agreement.

 

15

 

(b)                                 The Company intends
that this Agreement will comply and be administered in accordance with the rules and
requirements of Section 409A of the Code, including the applicable
exemptions thereunder.  The Company will
not take any action that would expose any payment or benefit to the Executive
under this Agreement or under any plan, arrangement or other agreement to the
additional tax imposed under Section 409A of the Code, unless (i) the
Company is obligated to take the action under an agreement, plan or arrangement
to which the Executive is a party, (ii) the Executive requests the action,
(iii) the Company advises the Executive in writing that the action may
result in the imposition of the additional tax and (iv) the Executive
subsequently requests the action in a writing that acknowledges that he will be
responsible for any effect of the action under Section 409A of the Code.  The Company will hold the Executive harmless
for any action it may take in violation of this paragraph.

 

(c)                                  It is the parties’
intention that the benefits and rights to which the Executive could become
entitled in connection with the termination of employment covered under this
Agreement comply with Section 409A of the Code, including the applicable
exemptions thereunder.  If the Executive
or the Company believes, at any time, that any of such benefit or right does
not so comply, he or it will promptly advise the other party and will negotiate
reasonably and in good faith to amend the terms of such arrangement such that
it complies (with the most limited possible economic effect on the Executive
and on the Company).

 

(d)                                 Any
obligation of the Company to reimburse the Executive for legal, accounting or
any other type of professional fees shall continue for the Executive’s life
and, if later, until the complete disposition of all relevant claims.  In addition, all benefits in the nature of
reimbursements or in-kind services shall comply with the requirements of Treas.
Reg. § 1.409A-3(i)(1)(iv) to the extent applicable.  For this purpose, (i) the amount of
expenses eligible for reimbursement, or benefits provided, in one calendar year
shall not affect the expenses eligible for reimbursement, or benefits to be
provided, in any other calendar year, (ii) the reimbursement of any
expense shall be made promptly, but in no event later than the last day of the
calendar year next following the calendar year in which the expense was
incurred, and (iii) the right to any reimbursement or benefit shall not be
subject to liquidation or exchange for any other benefit.

 

(e)                                  Each
payment made pursuant to Sections 3(a) or (c) and Sections 4(a) or
(c) shall constitute a separate payment for 409A purposes.

 

(f)                                    Any
payment made pursuant to this Agreement that would constitute a gross-up
payment under Treasury Regulation 1.409A-3(i)(1)(v) shall be made in
accordance with the timing requirements set forth in that regulation.

 

16

 

10.                               Amendment
of Agreement.  This
Agreement may be amended at any time by the Board with the written consent of
the Executive.

 

11.                               Construction.  Wherever any words are used herein in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form, they shall be construed as though they
were also used in the plural form in all cases where they would so apply.

 

12.                               Governing Law.  This Agreement shall be governed by the laws
of Maryland.

 

13.                               Dispute
Resolution.  The parties agree
that any disputes, claims, complaints or causes of action of any type or kind
(including but not limited to any disputes relating in any way to this
Agreement) which the parties may have between themselves shall be resolved by
final and binding arbitration using a single arbitrator from the American
Arbitration Association pursuant to its then existing commercial arbitration
rules. The arbitration proceedings shall be conducted in Baltimore, Maryland,
unless the parties mutually agree in writing to a different location. Prior to
presiding over any such dispute, any arbitrator shall be required to consent in
writing that he or she shall reach a final decision within four (4) months
after a claim has been filed and within sixty (60) days after final submission.
Any award rendered in the arbitration may be enforced in any court of competent
jurisdiction. Pending the resolution of any such claim or dispute, the
Executive (and his beneficiaries) shall continue to receive all payments and
benefits due under this Agreement or otherwise, except to the extent that the
arbitrators otherwise provide.

 

14.                                                                               Successors
and Assigns.

 

(a)                                  This
Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.

 

(b)                                 This
Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.

 

(c)                                  The Company shall
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or
assets of the Company expressly to assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would have been
required to perform it if no such succession had taken place.  As used in this Agreement, “Company” shall
mean both the Company as defined above and any such successor that assumes and
agrees to perform this Agreement, by operation of law or otherwise.

 

15.                               Director &
Officer Insurance and Indemnification. 
During the Protection Period and, upon a Qualifying Termination, for so
long thereafter as the Executive could be subject to liability, the Company
shall keep in place a directors’ and officers’ liability insurance

 

17

 

policy (or policies) providing comprehensive coverage to the Executive
for claims relating to the Executive’s service as an employee, officer, or
director of the Company, on terms and conditions no less favorable to the
Executive (e.g., with respect to scope, amounts and deductibles) provided to
then-existing officers and directors of the Company.  The Company shall indemnify the Executive to
the fullest extent permitted by the general laws of the State of Maryland and
shall provide indemnification expenses in advance to the extent permitted
thereby.  The Company will follow the
procedures required by applicable law in determining persons eligible for
indemnification and in making indemnification payments and advances.   The indemnification and advance of expenses
provided by the Company pursuant to this Agreement shall not be deemed
exclusive of any other rights to which the Executive may be entitled under any
law (common or statutory), or any agreement, vote of stockholders or
disinterested directors or other provision that is consistent with law, both as
to action in his official capacity and as to action in another capacity while
holding office or while employed or acting as agent for the Company, shall
continue in respect of all events occurring while the Executive was a director
of or employed by the Company after the Executive has ceased to be a director
of or employed by the Company, and shall inure to the benefit of the estate,
heirs, executors and administrators of the Executive.

 

16.                               Reimbursement
of Legal Fees.  The
Company will pay all reasonable fees and expenses, if any, (including, without
limitation, legal fees and expenses) that are incurred by the Executive to
enforce this Agreement and that result from a breach of this Agreement by the
Company.

 

17.                               Notice.  Any notices, requests, demands, or other
communications provided for by this Agreement shall be sufficient if in writing
and if sent by registered or certified mail to the Executive at the last
address the Executive has filed in writing with the Company, or in the case of
the Company, to its principal offices.

 

18.                               Severability.  The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. 
If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.

 

19.                               Withholding.
Notwithstanding any other provision of this Agreement, the Company may withhold
from amounts payable under this Agreement all federal, state, local and foreign
taxes that are required to be withheld by applicable laws or regulations.

 

20.                               Entire
Agreement. Unless otherwise specifically provided in this
Agreement, the Executive and the Company acknowledge that this Agreement
supersedes any other agreement between them or between the Executive and the
Company or a Subsidiary, concerning the subject matter hereof.

 

18

 

21.                               Alienability.  The rights and benefits of the Executive
under this Agreement may not be anticipated, alienated or subject to
attachment, garnishment, levy, execution or other legal or equitable process
except as required by law.  Any attempt by
the Executive to anticipate, alienate, assign, sell, transfer, pledge, encumber
or charge the same shall be void. 
Payments hereunder shall not be considered assets of the Executive in
the event of insolvency or bankruptcy.

 

22.                               Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed an original, and said counterparts
shall constitute but one and the same instrument.

 

IN WITNESS
WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to
the authorization of the Board, the Company has caused this Agreement to be
executed in its name on its behalf, all as of the day and year first above
written.

 

	
   

  	
  CONSTELLATION ENERGY GROUP, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Charles A Berardesco

  
	
   

  	
   

  	
  Name:  Charles A. Berardesco

  
	
   

  	
   

  	
  Title: Senior Vice President and General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ John R. Collins

  
	
   

  	
   

  	
  John R. Collins

  

 

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  Exhibit 10.33    
    

 
  SEPARATION AGREEMENT AND GENERAL RELEASE

        This
Separation Agreement and General Release ("Agreement") is entered into by and between John N. Hobbs ("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 will be terminated effective December 31, 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 Thousand Dollars ($500,000.00). Such payment shall be made in a lump sum
distribution as soon as administratively feasible after the effective date of this Agreement (as set forth in Paragraph 14(d)) but in no event later than April 1, 2009. 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 ("OSO 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, EMPLOYEE'S fully vested OSO's shall, consistent with the terms of the OSO Master Award Agreement, be exercisable for a period of one year following EMPLOYEE'S termination date.
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 that are not vested prior to the termination date shall be forfeited.

	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 December 31, 2008, 602,898
RSUs have restrictions that have not lapsed. Notwithstanding the terms of the Amended 

1

 

Master
Deferred Issuance Stock Agreement, the restrictions on 477,898 RSUs shall all lapse on December 31, 2008.  

	3.3
	EMPLOYEE
shall receive the full amount of any discretionary bonus awarded to EMPLOYEE for calendar year 2008, as such bonus amount is determined in the sole
discretion of the Level 3 Communications, Inc.'s Compensation Committee, taking into account the COMPANY'S performance, the EMPLOYEE's performance, and other such factors as the
Compensation Committee deems appropriate. EMPLOYEE agrees that any discretionary bonus amount determined by the Compensation Committee for calendar year 2008 shall only be paid to EMPLOYEE as a
severance benefit. Such bonus payment, if any, shall be made in a lump sum distribution as soon as administratively feasible, but in no event later than May 1, 2009.

	3.4.
	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.

	3.5
	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 delivery of securities 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 deliveries can be made without violating the requirements
of Section 409A(a) (2)(B)(i) of the Code, there shall be paid or delivered to EMPLOYEE, in a single cash lump sum or delivery, as the case may be, an amount equal to the aggregate amount of all
payments or deliveries 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 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 

2

 

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)
	with
the exception of the COMPANY issued personal computer ("COMPANY Computer") 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 Chief Executive Officer 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. Prior to his Termination Date, EMPLOYEE will make the COMPANY Computer available to allow COMPANY to remove all COMPANY information it deems necessary.
EMPLOYEE shall not be allowed to take ownership of the COMPANY Computer unless and until he has allowed COMPANY access as set forth herein. 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 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 

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the
Chief Executive Officer 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. 

        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;

4

 

	(c)
	EMPLOYEE acknowledges that he was provided this Agreement on December 31, 2008 and that he has up to forty-five
(45) 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 31st day of December, 2008 

			
	 
	 	 

	 	 	EMPLOYEE
	

 	
 	
/s/ John N. Hobbs

  John N. Hobbs
	

 	
 	
COMPANY
	

 	
 	
/s/ Thomas C. Stortz

  By: Thomas C. Stortz

Title: EVP

5

QuickLinks

Exhibit 10.33

SEPARATION AGREEMENT AND GENERAL RELEASE

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