Employment Agreement - Qwest Communications International Inc. and Stephen Jacobsen
This Employment Agreement ("Agreement") is entered into as of this 18th day
of October, 2000, by and between Qwest Communications International Inc., a
Delaware corporation (the "Company"), and Stephen Jacobsen (the "Employee").
WHEREAS, the Company desires to retain the Employee as President of Global
Business Markets and Internet and Multi-Media Markets, and the Employee desires
to accept such employment.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter
contained, and for other good and valuable consideration, it is hereby agreed as
1. Term. The term of this Agreement shall commence as of October 18, 2000,
(the "Commencement Date") and continue for three (3) years therefrom (the
"Term"); provided, however, that either party may terminate this Agreement
consistent with paragraph 7 below at any time upon thirty (30) days written
notice to the other party.
2. Duties. Employee is being promoted to the President of Global Business
Markets and Internet and Multi-Media Markets. In his capacity as President of
Global Business Markets and Internet and Multi-Media Markets, his duties will
include management of all financial, marketing, distribution, operations, brand
management and product management for internet services associated with business
customers. The foregoing responsibilities may not be materially altered,
diminished and/or increased without Employee's prior written approval. Employee
shall report directly to the Chief Executive Officer and shall perform his
obligations under this Agreement in Denver, Colorado except for normal business
trips outside of Denver, Colorado.
3. Consideration as Chief Executive Officer. If Employee is successful in
the position of President of Global Business Markets and Internet and
Multi-media Markets, the Company's Board of Directors will, in good faith,
consider him for the position of Chief Executive Officer either during the Term
or immediately thereafter. If the Company offers Employee the position of Chief
Executive Officer, it will renegotiate, in good faith, the terms and conditions
of this Agreement to reflect the additional responsibilities the Employee will
4. Indemnification. During the Term and all times thereafter, Company shall
indemnify the Employee to the fullest extent permitted by applicable law, and
the Employee shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers, with respect to all costs, charges and expenses, including attorney's
fees, whatsoever incurred or sustained by the Employee in connection with any
action, suit or proceeding to which he may be made a party by reason of being or
having been a director, officer, shareholder or employee of the Company, or his
serving or having served any other enterprise as a director, officer or employee
at the request of the Company.
5. Compensation. During the Term, the Company shall pay to the Employee:
(a) Base Salary. The Company shall pay Employee a base salary of Six
Hundred Thousand Dollars ($600,000) per annum. Such Base Salary shall be payable
in accordance with Company's regular payroll policies. Additionally, such Base
Salary shall be subject to review at the end of each employment year (October
18th) for possible increase, but shall in no event be decreased from its then
(b) Performance Bonus Payments. Employee shall be eligible to
participate in the Company's bonus program. Commencing with the Fourth Quarter
of Calendar Year 2000, Employee's target bonus will be 105%.
(c) Other Benefits. During the Term, the Employee shall be entitled to
participate in all of the employee benefit plans, programs, perquisites and
arrangements of the Company in effect during the Term that are generally
available to the President Worldwide Operations and other direct reports to the
Chief Executive Officer of the Company subject to, and on a basis consistent
with, the terms, conditions and overall administration of such plans, programs
and arrangements as applied to the President Worldwide Operations and other
direct reports to the Chief Executive Officer.
(d) Business Expenses. During the Term, the Company shall reimburse the
Employee for all documented reasonable and customary business expenses incurred
by the Employee in the performance of his duties under this Agreement and in
accordance with the Company's policies regarding reimbursement of such expenses.
(e) Stock Options. Company hereby grants an incentive stock option
pursuant to the Company's stock option plan as amended October 4, 2000, to
purchase 1,000,000 shares of the Company's common stock at an exercise price
equal to the price of the Company's stock at the close of trading on October 18,
2000 (the "Option"). The Option vests over four (4) years in accordance with the
following schedule: 200,000 options vest on October 18, 2001; 300,000 options
vest on October 18, 2002; 250,000 options vest on October 18, 2003; and 250,000
vest on October 18, 2004. The term of the Option shall be ten (10) years from
the date of the grant.
6. Most Favored Nation. During the Term, the Employee's compensation
"package" including, but not limited to, Base Salary, Performance Bonus
Payments, and stock options, will be, in each instance, at least as lucrative as
the compensation "package" provided to any other officer of Company except for
the one received by the Chief Executive Officer. This provision applies
prospectively and does not apply to the "packages" already being received by any
other officer of the company.
(a) Termination for Cause by Employer or Resignation Without Good Reason
by Employee. If Employee's employment is terminated for Cause (as defined below)
or if Employee resigns without Good Reason (as defined below), the Company shall
only be obligated to pay Employee his salary for work previously performed, a
pro rata portion of Employee's Performance Bonus Payment, reimbursement of all
outstanding business expenses, and it shall handle Employee's stock option
rights in accordance with the provisions of the Stock Option Agreement, attached
hereto as Exhibit "A." Additionally, Employee shall be eligible to continue any
benefits required pursuant to federal or state laws and regulations, including
(b) Termination Without Cause by Employer or Resignation With Good
Reason by Employee. If Employer terminates this Agreement without Cause (as
defined below) or if Employee resigns for Good Reason (as defined below),
Employee shall be entitled to receive two times his base pay and performance
bonus. Finally, Employee shall be eligible to continuation of any benefits
required pursuant to federal or state laws and regulations, including all COBRA.
(c) Termination Upon Death. If Employee's employment is terminated as a
result of his death, the Company shall pay to Employee's spouse and/or estate
Employee's salary for work previously performed, a pro rata portion of
Employee's Performance Bonus Payment, and reimbursement of all outstanding
business expenses. The Company shall also provide Employee's spouse and/or
estate the rights available to
them by law or pursuant to the terms and conditions of the Company's benefit
plans, and any and all health, life or other insurance policies. Additionally,
Company shall handle Employee's stock rights in accordance with the provisions
of the Stock Option Agreement, attached hereto as Exhibit "A."
"Cause," as it relates to termination by the Company, shall mean Employee's
(i) conviction for a felony and/or any crime involving moral turpitude, (ii) act
of fraud against, or the misappropriation of property belonging to the Company,
and (iii) knowing and intentional breach in any material respect of the terms of
this Agreement and the failure to cure such breach within ten (10) days of
written notice of such breach by the Company.
"Good Reason," as it relates to resignation by the Employee, shall mean the
Company's (i) material breach of any provision of this Agreement and its failure
to cure such breach within ten (10) days of written notice thereof; (ii) filing
of a petition of bankruptcy or being adjudicated as bankrupt or insolvent, the
making of an assignment for the benefit of creditors, any arrangement pursuant
to any bankruptcy law, or if the Company discontinues its business or if a
receiver is appointed for the Company which is not discharged within thirty (30)
days thereafter; (iii) material diminution during the Term of the Employee's
duties or responsibilities; (iv) change in Employee's current reporting
relationship to the Chief Executive Officer; or (v) requirement that Employee
perform his services for the Company outside of Denver, Colorado, with the
exception of normal business trips outside of Denver, Colorado.
9. Amendment. This Agreement may not be amended, waived, changed, modified
or discharged except by an instrument in writing executed by or on behalf of the
party or parties against whom enforcement of such amendment, waiver, change,
modification or discharge is sought.
10. Authority. The Company hereby covenants and represents that the person
executing this Agreement on its behalf has both the authority to execute this
Agreement on behalf of the Company and to bind it to the obligations set forth
11. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered or mailed, by certified mail, return receipt requested, to the other
party at his or its last known address. The date of such delivery shall be the
date on which the notice, request or demand is actually received. All such
notices should be addressed as follows:
Qwest Communications International Inc.
12. Assignability. Neither the Employee nor the Company may assign,
transfer, pledge or encumber its interest in this Agreement without the written
consent of the other party. Subject to the foregoing, this Agreement shall be
binding upon, and shall inure to the benefit of, the parties' assigns, heirs,
executors, administrators and legal representatives.
13. Separability. In the event that any provision of this Agreement would
be held to be invalid, prohibited or unenforceable for any reason, such
provision shall be ineffective to the extent of such invalidity, prohibition or
unenforceability, without invalidating the remaining provisions of this
14. Integration. This Agreement supersedes all other employment agreements
between the Company and Employee but does not affect any of Employees existing
rights under any previous agreement including, but not limited to, any previous
stock option grants that have been made to Employee.
15. Waiver. The failure of a party to insist upon strict adherence to any
term, condition or other provision of this Agreement shall not be considered a
waiver or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term, condition or other provision of this
16. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
QWEST COMMUNICATIONS INTERNATIONAL INC.