Deferred Compensation Plan for Nonemployee Directors - Qwest Communications International Inc.
QWEST COMMUNICATIONS INTERNATIONAL INC.
DEFERRED COMPENSATION PLAN
FOR NONEMPLOYEE DIRECTORS
EFFECTIVE AS OF JULY 1, 2000
QWEST COMMUNICATIONS INTERNATIONAL INC.
DEFERRED COMPENSATION PLAN
FOR NONEMPLOYEE DIRECTORS
QWEST COMMUNICATIONS INTERNATIONAL INC., a Delaware corporation, hereby
adopts the Qwest Communications International Inc. Deferred Compensation Plan
for Nonemployee Directors (the "Plan"), effective as of July 1, 2000 (the
"Effective Date"), to permit certain nonemployee members of its Board of
Directors to defer receipt of all or a portion of their anticipated Director's
Whenever used herein, the following terms shall have the respective
meanings set forth below, unless the context clearly indicates otherwise. In
addition, unless some other meaning or intent is apparent from the context, the
plural shall include the singular and vice versa; and masculine, feminine and
neuter words shall be used interchangeably.
1.1 "Account" means, with respect to each Participant, the Phantom Unit
Account established pursuant to Article IV below.
1.2 "Administrator" means the Executive Vice President - Human
Resources or his successor or designee.
1.3 "Beneficiary" means the person, trust or other entity designated by
the Participant in accordance with Section 6.7 below to receive payment under
the Plan in the event of the Participant's death. If the Participant fails to
designate a Beneficiary, or if all of the Participant's designated Beneficiaries
predecease the Participant, then the Participant's Beneficiary shall be his or
1.4 "Board" means the Board of Directors of the Company.
1.5 "Code" means the Internal Revenue Code of 1986, as now or hereafter
amended and in effect.
1.6 "Common Stock" means the Company's $.01 par value common stock.
1.7 "Company" means Qwest Communications International Inc., a Delaware
1.8 "Company Matching Deferrals" means the amounts allocated to a
Participant's Account as a matching deferral in accordance with the provisions
of Article III.
1.9 "Committee" means the Compensation Committee of the Board or such
other committee, officer or person as the Board may designate from time to time.
1.10 "Director" means a member of the Board of the Company.
1.11 "Director's Fees" means any retainer, attendance fees, committee
membership fees, or other compensation, paid in cash or stock by the Company to
a Director for services as a Director.
1.12 "Eligible Director" means a Director who (a) is not an employee of
the Company or any subsidiary of the Company and (b) does not own, directly or
indirectly, 5% or more of the outstanding shares of the Company's Common Stock.
1.13 "Participant" means an Eligible Director who has elected to defer
payment of Director's Fees under the Plan. A person remains a Participant so
long as he or she has an Account balance under the Plan, whether or not such
person remains an Eligible Director.
1.14 "Phantom Units" shall mean units held in a notational account in
which each unit represents a value equivalent to one share of Common Stock of
1.15 "Plan" means the Qwest Communications International Inc. Deferred
Compensation Plan for Nonemployee Directors, as set forth herein, together with
all amendments hereto.
1.16 "Unforeseeable Emergency" means a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant, of the Participant's spouse or of a dependent (as defined in Code
section 152(a)) of the Participant, loss of the Participant's property due to
casualty, or other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the control of the Participant. The need to pay
college tuition and the desire to purchase a home will not be considered to
constitute Unforeseeable Emergencies.
2.1 Deferral Elections. An Eligible Director may elect to irrevocably
defer all or any portion of the Director's Fees that he or she anticipates
earning. Such election shall be made and filed with the Company no later than
(i) the last day of the calendar year prior to the calendar year in which such
Director's Fees would otherwise be payable, if the Director initiates the
election, or (ii) three months prior to the date the Director's Fees would
otherwise be payable if a deferral election is solicited from all Directors by
the Company. Such elections shall be made by filing a written notice with the
Company in such form, in such manner and by such time as the Administrator shall
specify. Notwithstanding the foregoing, a Director who first becomes an Eligible
Director during a calendar year may, within thirty days following the date on
which he or she becomes an Eligible Director, elect to defer Director's Fees
that he or she has not yet earned (as of the date such Director files a deferral
election with the Company) but that are payable in such calendar year.
2.2 Changes in Deferral Elections. A Participant's deferral election
shall remain in effect until terminated or modified by the Participant pursuant
to this Section 2.3. A Participant
may terminate or modify his or her deferral election by filing a new deferral
election with the Company in accordance with the provisions of Section 2.1
above. New deferral elections shall become effective on the later of (i) the
date specified in the election, or (ii) three months after the election if the
change is solicited by the Company.
2.3 Suspension of Deferrals. A Participant may suspend his or her
deferrals under the Plan during a calendar year if the Committee determines that
the Participant has experienced (or would experience, if suspension were not
permitted) an Unforeseeable Emergency that cannot be relieved through
reimbursement or compensation by insurance or otherwise or by liquidation of the
Participant's assets (to the extent the liquidation would not itself cause
severe financial hardship). Any Participant who wishes to suspend his or her
deferrals during a calendar year pursuant to this Section must file a written
request for such suspension, together with such supporting documentation as the
Committee may require, with the Committee for review and approval. Such
suspension shall become effective as soon as administratively practicable after
it is approved by the Committee. A Participant who has suspended his or her
deferrals under this Section may not recommence those deferrals until the first
day of the following calendar year.
2.4 Accounting. The Company shall credit a Participant's deferrals
during a calendar year to the Account established for such Participant for such
year, pursuant to Article IV below, as of the date on which the amount deferred
would otherwise have been paid or made available to the Participant.
COMPANY MATCHING DEFERRALS
At the time that Participant deferrals are credited to a Participant's
Account under the Plan, the Company shall also credit an amount equal to 50% of
the Participant deferrals to the Account as a Company Matching Deferral. The
Company Matching Deferral shall be fully vested and shall be accounted for in
the same manner as all other amounts allocated to a Participant's Account.
4.1 Establishment and Nature of Participant Accounts. The Company shall
establish and maintain, in the name of each Participant, Accounts to reflect the
Participant's interest under the Plan. A separate Account shall be established
and maintained for each Participant for each year in which such Participant
makes deferrals under the Plan. The maintenance of such Accounts is for
recordkeeping purposes only. No funds or other assets of the Company shall be
segregated or attributable to the amounts that may be credited to a
Participant's Accounts from time to time, but rather benefit payments under the
Plan shall be made solely from the general assets of the Company at the time any
such payments become due and payable.
4.2 Account Earnings. Deferrals credited to a Participant's Account
will be credited in Phantom Units in accordance with standard recordkeeping
procedures. Additional Phantom Units shall be credited each quarter to the
Participant's Accounts to reflect dividends paid on Company
Common Stock. The number of additional Phantom Units credited shall be
calculated by multiplying the number of Phantom Units held in the Participant's
Accounts as of the record date by the dividend payable per share and then
dividing the result by the fair market value of Company Common Stock. The fair
market value is determined by averaging the closing price of Company Common
Stock over the three trading days ending on the payment date of the applicable
4.3 Change in Outstanding Shares. In the event of any change in
outstanding Company shares by reason of any stock dividend or split,
recapitalization, merger, consolidation or exchange of shares or other similar
corporate change, the number of Phantom Units then credited to the Participant's
Accounts shall be increased, decreased or changed in like manner as if such
Phantom Units were actual shares of Company Common Stock and had been issued and
outstanding, fully paid and nonassessable at the time of such occurrence. In
addition, in the event of any such corporate changes, the Board shall make such
other adjustments, if any, that it deems appropriate in the number or other
features of Phantom Units then credited to the Participants' Accounts. Any and
all such adjustments shall be conclusive and binding upon all parties concerned.
4.4 Account Statements. After the close of each calendar year, or more
frequently as the Administrator, in its sole discretion, determines, the Company
shall furnish each Participant with a statement of the value of his or her
A Participant shall be fully vested in his or her Accounts at all
times, subject only to his or her status as a general unsecured creditor of the
Company in the event of the Company's insolvency or bankruptcy.
6.1 Timing and Form of Distribution. (a) Except as provided otherwise
in this Article VI, each of the Participant's Accounts shall be distributed or
commence to be distributed to the Participant on, or as soon as administratively
practicable after, the earlier of the distribution date specified for such
Account by the Participant or the termination of the Plan. Subject to subsection
6.1(c) below, the Participant shall specify the date on which each of his or her
Accounts shall be distributed or shall commence to be distributed at the time he
or she makes, and as a part of, an election to defer the Director's Fees
credited to that Account. The Participant may make a separate election with
respect to each of his or her Accounts.
(b) Except as provided otherwise in this Article VI, each of the
Participant's Accounts shall be distributed to the Participant in the form
elected for such Account by the Participant. The Participant may elect to have
an Account distributed in either a cash lump sum, annual cash installments over
a period not to exceed ten (10) years or such other form as the Administrator
may approve. Subject to subsection 6.1(c) below, the Participant shall specify
the form in which
each of his or her Accounts is to be distributed at the time such Participant
makes, and as a part of, an election to defer the Director's Fees credited to
that Account. The Participant may make a separate election with respect to each
of his or her Accounts.
(c) A Participant may change the timing and/or form of distribution for
one or more of his or her Accounts at any time, so long as such change is
requested in writing (and such request is filed with the Company) at least six
months prior to the date on which any of the Accounts to which it relates is
scheduled to be distributed or to commence to be distributed; provided, however,
that the Participant may not make more than one such change with respect to his
or her Accounts in any sixty consecutive month period. Any change that is
requested by a Participant within six months of the date on which any of the
Accounts to which it relates is scheduled to be distributed or to commence to be
distributed, or within sixty months of a previous change to the timing and/or
form of distribution for any of the Participant's Accounts, shall be null and
6.2 Disability. Notwithstanding Section 6.1 above, if a Participant
becomes disabled and ceases to be a Director as a result, or if the Participant
becomes disabled after he or she ceases to be a Director, then the Committee
may, in its sole discretion, direct that his or her undistributed Account
balances be distributed to such Participant in a lump sum on, or at any time
after, the later of the date on which he or she ceases to be a Director and the
date on which a determination of disability is made by the Committee. For
purposes of the Plan, a Director shall be considered to be disabled if, as a
result of an illness, injury or similar incapacity, such Director is unable to
perform those daily activities that he or she was performing immediately prior
to the illness, injury or other incapacity, and such condition is expected to
last for a period of at least six (6) months. The existence of a disability
shall be determined by the Committee, and shall be based upon such medical and
other evidence as the Committee deems appropriate; provided, however, that a
Participant shall be considered to be disabled if he or she is totally and
permanently disabled within the meaning of Code section 22(e)(3).
6.3 Competition. Notwithstanding Section 6.1 above, if a Participant
ceases to be a Director and becomes a proprietor, officer, partner or employee
of, or otherwise becomes affiliated with, any business that is in competition
with the Company or any of its subsidiaries, or becomes employed by a
governmental agency having jurisdiction over the activities of the Company or
any of its subsidiaries, as determined by the Committee in its sole discretion,
then such Participant's undistributed Account balances shall be distributed to
him or her in a cash lump sum on, or as soon as administratively practicable
after, the date on which he or she ceases to be a Director.
6.4 Change of Control. (a) Notwithstanding Section 6.1 above, upon a
"Change of Control," as defined in subsection 6.4(b) below, the Participant's
undistributed Account balances shall be funded into a trust or distributed to
the Participant in a lump sum within thirty days after such Change of Control.
(b) For purposes of this Section 6.4, a "Change of Control" shall be
deemed to have occurred if either (i) any individual, entity, or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the 1934 Act), other than
Anschutz Company, The Anschutz Corporation, any entity or organization
controlled by Philip F. Anschutz (collectively, the "Anschutz Entities") or a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company, acquires beneficial ownership (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of fifty percent (50%) or more of either (A) the
then-outstanding shares of Stock ("Outstanding Shares") or (B) the combined
voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors ("Voting Power") or (ii)
at any time during any period of three consecutive years (not including any
period prior to the Effective Date), individuals who at the beginning of such
period constitute the Board (and any new director whose election by the Board or
whose nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds of the directors then still in office who either
were directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
6.5 Unforeseeable Emergency. Any Participant, who the Committee
determines has experienced (or would experience, if a withdrawal were not
permitted) an Unforeseeable Emergency, shall be entitled to withdraw such amount
from his or her Accounts as reasonably is needed to satisfy the emergency need.
A Participant shall be required to submit a written request for such a
withdrawal, together with such supporting documentation as the Committee may
require, to the Committee for review and approval. Such request may specify the
Account(s) from which the Participant wishes to make the withdrawal. If the
request fails to do so, or if the balances in the specified Account(s) are
insufficient to cover such withdrawal, then any amounts for which no designation
has been made (or which are in excess of the designated balances) shall be
withdrawn from the Participant's Accounts, from oldest to newest, until the
withdrawal amount is satisfied. Upon the approval of a Participant's request for
such a withdrawal, the Participant's deferrals under the Plan shall be suspended
and the Participant shall be precluded from making further deferrals under the
Plan until the first day of the following calendar year. A distribution under
this Section 6.5 shall occur as soon as administratively practicable after the
Committee approves the Participant's request. Notwithstanding the foregoing,
distribution under this Section 6.5 may not be made to the extent that the
hardship is or may be relieved through reimbursement or compensation by
insurance or otherwise, by liquidation of the Participant's assets (to the
extent the liquidation would not itself cause severe financial hardship) or by
cessation of deferrals under the Plan.
6.6 Other In-Service Distributions. A Participant shall be entitled to
withdraw all or any portion of his or her undistributed Account balances under
the Plan at any time; provided, however, that there shall be deducted from any
such withdrawal and forfeited to the Company an amount equal to ten percent of
the amount withdrawn. A Participant shall be required to submit a written
request for any such in-service withdrawal to the Administrator for review and
approval. Such request may specify the Account(s) from which the Participant
wishes to make the withdrawal. If the request fails to do so, or if the balances
in the specified Account(s) are insufficient to cover such withdrawal, then any
amounts for which no designation has been made (or which are in excess of the
designated balances) shall be withdrawn from the Participant's Accounts, from
oldest to newest, until the withdrawal amount is satisfied. Upon the approval of
the Participant's request for such a withdrawal, the Participant's deferrals
under the Plan shall be suspended and the Participant shall be precluded from
making further deferrals under the Plan until the first day of the second
calendar year beginning after the calendar year in which the withdrawal occurs.
A distribution under this Section 6.6 shall occur as soon as administratively
practicable after the Administrator approves the Participant's request.
6.7 Payment of Benefits Following Death. (a) Upon the death of a
Participant, any undistributed balances in the Participant's Accounts shall be
distributed or commence to be distributed to the Participant's Beneficiary(ies)
as soon as administratively practicable in the form specified by the
Participant. A Participant shall designate a Beneficiary(ies) and the form(s) in
which his or her undistributed Account balances shall be distributed to such
such form (filed with the Company) as the Administrator shall prescribe. The
Participant may change a Beneficiary designation at any time by filing a new
Beneficiary designation with the Company. Any such change shall be effective
only if the Participant is alive at the time the Company receives such change.
The most recent Beneficiary designation on file with the Company shall be
(b) The forms of distribution that may be designated by a Participant
pursuant to this Section 6.7 are as follows:
(i) For any Accounts with respect to which distributions have
commenced prior to the Participant's death, the Participant
may specify either that the form(s) in which such Accounts are
being distributed to him or her at the time of death shall
continue with respect to his or her Beneficiary(ies) or that
any undistributed Account balances shall be accelerated and
distributed to such Beneficiary(ies) in a cash lump sum.
(ii) For any Accounts with respect to which distributions have not
commenced prior to the Participant's death, the Participant
may specify that the balances in such Accounts shall be
distributed either in a cash lump sum or in such other form of
distribution as the Administrator may approve.
If a Participant fails to specify in his or her Beneficiary designation the
form(s) in which his or her undistributed Account balances are to be distributed
upon his or her death, then such Account balances shall be distributed to the
Participant's Beneficiary(ies) in a cash lump sum.
6.8 Distribution in Event of Taxation. Notwithstanding any provision in
the Plan to the contrary, if the Internal Revenue Service or a court determines
that any amounts credited to a Participant's Accounts under the Plan are
currently taxable under the Code, the Committee may, in its discretion, cause
such taxable amounts to be distributed to the Participant during the year in
which such amounts are taxable or during any subsequent year.
7.1 Plan Administration. (a) The Administrator shall have and exercise
all discretionary and other authority to control and manage the operation and
administration of the Plan, except such authority as is specifically allocated
otherwise by or under the terms hereof, and shall have the power to take any
action necessary or appropriate to carry out such responsibilities. Without
limiting the foregoing, and in addition to the authority and duties specified
elsewhere herein, the Administrator shall have the discretionary authority to
construe, interpret and apply the terms and provisions of the Plan; to prescribe
such rules and regulations, and issue such directives, as it deems necessary or
appropriate for the administration of the Plan; and to make all other
determinations and decisions as it deems necessary or appropriate for the
administration of the Plan. The Administrator may correct any defect or supply
any omission or reconcile any inconsistency in the Plan in the manner and to the
extent it deems expedient. Decisions of the Administrator shall be final and
binding upon the Participants, and their legal representatives and
(b) No Director may decide, determine or act on any matter that affects
the distribution, nature or method of settlement of solely his or her Accounts
under the Plan, except in exercising an election available to that Director in
his or her capacity as a Participant.
7.2 Claims Procedure. A Participant or Beneficiary, as applicable,
shall file any claim for payments under the Plan with the Administrator, which
shall consider such claim and notify the claimant of its decision with respect
thereto within ninety (90) days (or within such longer period, not to exceed one
hundred eighty (180) days, as the Administrator determines is necessary to
review the claim; provided that the Administrator notifies the claimant of the
extension within the original ninety (90) day period). If the claim is denied,
in whole or in part, the claimant may appeal such denial to the Committee,
provided he or she does so within sixty (60) days of receiving the
Administrator's determination. The Committee shall consider the appeal and
notify the claimant of its decision with respect thereto within sixty (60) days
(or within such longer period, not to exceed one hundred twenty (120) days, as
the Committee determines is necessary to review the appeal; provided that the
Committee notifies the claimant of the extension within the original sixty (60)
day period). The Committee's decision upon any appeal shall be final and binding
on all parties.
7.3 Expenses. All expenses and costs incurred in connection with the
administration and operation of the Plan shall be borne by the Company.
AMENDMENT, MODIFICATION AND TERMINATION
This Plan may be amended, modified or terminated at any time by the
Committee; provided, however, that no such amendment, modification or
termination may adversely affect the rights of any Participant, without his or
her consent, to any benefit under the Plan to which he or she was entitled prior
to the effective date (or, if later, the adoption date) of such amendment,
modification or termination. In the event of the termination of this Plan
pursuant to this Article VIII, a Participant's Accounts shall be distributed to
the Participant pursuant to Article VI above.
9.1 Unfunded Plan. The Plan shall be unfunded and all benefits under
the Plan shall be paid solely from the Company's general assets. The Plan
constitutes a mere promise by the Company to make benefit payments in the
future. No Participant or Beneficiary shall have any preferred claim to the
amounts credited to a Participant's Accounts or to any assets of the Company on
account of a Participant's participation in the Plan prior to the time such
amounts are actually paid to the Participant or Beneficiary, and then only to
the extent of any such payment. Participants and Beneficiaries shall have the
status of general unsecured creditors of the Company.
9.2 Withholding for Taxes and Other Deductions. The Company shall have
the right to deduct from any deferral to be made or any distribution or
withdrawal to be paid under the Plan
any applicable taxes that it is required by law to withhold and any amounts owed
by the Participant to the Company.
9.3 No Right to Directorship. Nothing contained in the Plan or in any
Deferral Agreement executed by a Participant in connection herewith shall be
construed to (a) confer upon any Director any right to continue as a Director,
(b) restrict in any way any right the Company may have to terminate or change
the terms or conditions of any Director's directorship at any time, or (c)
confer upon any Director or any other person any claim or right to any
distribution under the Plan except in accordance with its terms.
9.4 Alienation Prohibited. Neither the Participant nor any Beneficiary
shall have any right or ability to alienate, sell, transfer, assign, pledge or
encumber, either voluntarily or involuntarily, any amount due or expected to
become due under the Plan. Nor shall any such amounts be subject to garnishment,
execution, levy or other seizure by any creditor of a Participant or
9.5 General Limitation of Liability. Subject to applicable law and the
Certificate of Incorporation and Bylaws of the Company, as in effect from time
to time, neither the Company, the Board, the Committee, the Administrator nor
any other person shall be liable, either jointly or severally, for any act or
failure to act or for anything whatsoever in connection with the Plan, or the
administration thereof, except, and only to the extent of, liability imposed
because of willful misconduct, gross negligence or bad faith. All benefit
payments shall be made solely from the Company's general assets.
9.6 Applicable Law. The Plan shall be construed and its validity
determined in accordance with the laws of the State of Colorado to the extent
such laws are not preempted by federal law.
9.7 Successors and Assigns. The terms and conditions of the Plan, as
amended and in effect from time to time, shall be binding upon the Company's
successors and assigns, including without limitation any entity into which the
Company may be merged or with which the Company may be consolidated.
Dated: , 2000.
QWEST COMMUNICATIONS INTERNATIONAL INC.