AGREEMENT
This Agreement, dated February 15, 2001, is made by and between ALLTEL
Corporation, a Delaware corporation (as hereinafter defined, the "Corporation"),
and Xxxxx X. Xxxxxxxx (as hereinafter defined, the "Executive").
WHEREAS, the Corporation recognizes that the possibility of a Change in
Control (as hereinafter defined) of the Corporation exists and that such
possibility, and the uncertainty it may cause, may result in the departure or
distraction of key management employees of the Corporation or of a Subsidiary to
the detriment of the Corporation and its stockholders; and
WHEREAS, the Executive is a key management employee of the Corporation
or of a Subsidiary; and
WHEREAS, the Corporation desires to encourage the continued employment
of the Executive by the Corporation or a Subsidiary and the continued dedication
of the Executive to the Executive's assigned duties without distraction as a
result of the circumstances arising from the possibility of a Change in Control;
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Corporation and the Executive hereby agree as
follows:
1. Defined Terms. For purposes of this Agreement, the following terms
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shall have the meanings indicated below:
(A) "ALLTEL Group" shall mean, collectively, the Corporation
and each Subsidiary of the Corporation from time to time, and a
"member" of the ALLTEL Group shall mean the Corporation or any of such
entities.
(B) "Board" shall mean the Board of Directors of the
Corporation, as constituted from time to time.
(C) "Cause" for termination by the Corporation of the
Executive's employment shall mean (i) the willful failure by the
Executive substantially to perform the Executive's duties with the
Corporation or a Subsidiary, other than any failure resulting from the
Executive's incapacity due to physical or mental illness or any actual
or anticipated failure after the issuance of a Notice of Termination
for Good Reason by the Executive in accordance with paragraph (A) of
Section 6, that continues for at least 30 days after the Board delivers
to the Executive a written demand for performance that identifies
specifically and in detail the manner in which the Board believes that
the Executive willfully has failed substantially to perform the
Executive's duties, or (ii) the willful engaging by the Executive in
misconduct that is demonstrably and materially injurious to the
Corporation or any Subsidiary, monetarily or otherwise, or (iii) a
breach by the Executive of any of the Executive's covenants set forth
in Section 7. For purposes of clause (i) and clause (ii) of this
definition, no act, or failure to act, on the Executive's part shall be
deemed "willful" unless done, or omitted to be done, by the Executive
not in good faith and without reasonable belief that the Executive's
act, or failure to act, was in the best interest of the Corporation and
its Subsidiaries.
(D) A "Change in Control" shall mean, if subsequent to the
date of this Agreement:
(i) Any "person," as defined in Section 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than the Corporation, any of its
subsidiaries, or any employee benefit plan maintained by the
Corporation or any of its subsidiaries, becomes the
"beneficial owner" (as defined in Rule l3d-3 under the
Exchange Act) of (A) l5% or more, but no greater than 50%, of
the outstanding voting capital stock of the Corporation,
unless prior thereto, the Continuing Directors approve the
transaction that results in the person becoming the beneficial
owner of 15% or more, but no greater than 50%, of the
outstanding voting capital stock of the Corporation or (B)
more than 50% of the outstanding voting capital stock of the
Corporation, regardless whether the transaction or event by
which the foregoing 50% level is exceeded is approved by the
Continuing Directors;
(ii) At any time Continuing Directors no longer
constitute a majority of the directors of the Corporation; or
(iii) A record date is fixed for determining
stockholders entitled to vote upon (A) a merger or
consolidation of the Corporation, statutory share exchange, or
other similar transaction with another corporation,
partnership, or other entity or enterprise in which either the
Corporation is not the surviving or continuing corporation or
shares of common stock of the Corporation are to be converted
into or exchanged for cash, securities other than common stock
of the Corporation, or other property, (B) a sale or
disposition of all or substantially all of the assets of the
Corporation, or (C) the dissolution of the Corporation; or
(iv) The Corporation enters into an agreement with
any Person, the consummation of which would result in the
occurrence of an event described in clause (i), (ii) or (iii)
above of this paragraph (D).
(E) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(F) "Continuing Directors" means directors who were directors
of the Corporation at the beginning of the 12-month period ending on
the date the determination is made or whose election, or nomination for
election by the Corporation's stockholders, was approved by at least a
majority of the directors who are in office at the time of the election
or nomination and who either (i) were directors at the beginning of the
period, or (ii) were elected, or nominated for election, by at least a
majority of the directors who were in office at the time of the
election or nomination and were directors at the beginning of the
period.
(G) "Corporation" shall mean ALLTEL Corporation and any
successor to its business or assets, by operation of law or otherwise.
(H) "Date of Termination" shall have the meaning stated in
paragraph (B) of Section 6 hereof.
(I) "Disability" shall be deemed the reason for the
termination by the Corporation of the Executive's employment, if, as a
result of the Executive's incapacity due to physical or mental illness,
the Executive shall have been absent from the full-time performance of
the Executive's duties with the Corporation or a Subsidiary for a
period of six consecutive months, the Corporation shall have given the
Executive a Notice of Termination for Disability, and, within 20
business days after the Notice of Termination is given, the Executive
shall not have returned to the full-time performance of the Executive's
duties.
(J) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(K) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence, without the
Executive's express written consent, of any one of the following:
(i) a substantial adverse alteration in the nature
or status of the Executive's responsibilities from those in
effect immediately prior to the Change in Control;
(ii) a reduction by the Corporation in the
Executive's annual base salary to any amount less than the
Executive's annual base salary as in effect immediately prior
to the Change in Control;
(iii) the Corporation's requiring the Executive to be
based more than 35 miles from the location of the Executive's
principal office immediately prior to the Change in Control,
except for required business travel to an extent substantially
consistent with the Executive's business travel obligations
immediately prior to the Change in Control;
(iv) if the Executive was based at the principal
executive offices of the Corporation or of a Subsidiary, as
the case may be, immediately prior to the Change in Control,
the Corporation's requiring the Executive to be based anywhere
other than the principal executive offices of the Corporation
or Subsidiary, as the case may be, except for required
business travel to an extent substantially consistent with the
Executive's business travel obligations immediately prior to
the Change in Control;
(v) the failure by the Corporation to pay to the
Executive any portion of the Executive's current compensation,
or to pay to the Executive any deferred compensation under any
deferred compensation program of the Corporation, within five
days after the date the compensation is due or to pay or
reimburse the Executive for any expenses incurred by the
Executive for required business travel;
(vi) the failure by the Corporation to continue in
effect any compensation plan in which the Executive
participates immediately prior to the Change in Control that
is material to the Executive's total compensation, including
but not limited to, stock option, restricted stock, stock
appreciation right, incentive compensation, bonus, and other
plans, unless an equitable alternative arrangement embodied in
an ongoing substitute or alternative plan has been made, or
the failure by the Corporation to continue the Executive's
participation therein (or in a substitute or alternative plan)
on a basis not materially less favorable, both in terms of the
amount of compensation provided and the level of the
Executive's participation relative to other participants, than
existed immediately prior to the Change in Control;
(vii) the failure by the Corporation to continue to
provide the Executive with benefits substantially similar to
those enjoyed by the Executive under any of the Corporation's
pension, profit-sharing, life insurance, medical, health and
accident, disability, or other employee benefit plans in which
the Executive was participating immediately prior to the
Change in Control; the failure by the Corporation to continue
to provide the Executive any material fringe benefit or
prequisite enjoyed by the Executive immediately prior to the
Change in Control; or the failure by the Corporation to
provide the Executive with the number of paid vacation days to
which the Executive is entitled in accordance with the
Corporation's normal vacation policy in effect immediately
prior to the Change in Control; or
(viii)any purported termination by the Corporation
of the Executive's employment that is not effected in
accordance with a Notice of Termination satisfying the
requirements of paragraph (A) of Section 6 hereof.
(L) "Notice of Termination" shall have the meaning stated in
paragraph (A) of Section 6 hereof.
(M) "Payment Trigger" shall mean the occurrence of a Change in
Control during the term of this Agreement coincident with or followed
at any time before the end of the 12th month immediately following the
month in which the Change in Control occurred, by the termination of
the Executive's employment with the Corporation or a Subsidiary for any
reason other than (A) by the Executive without Good Reason, (B) by the
Corporation as a result of the Disability of the Executive or with
Cause, or (C) as a result of the death of the Executive.
(N) "Person" shall have the meaning given in Section 3(a)(9)
of the Securities Exchange Act of 1934, as amended from time to time,
as modified and used in Sections 13(d) and 14(d) thereof; except that,
a Person shall not include (i) the Corporation or any Subsidiary, (ii)
a trustee or other fiduciary holding securities under an employee
benefit plan of the Corporation or any Subsidiary, or (iii) an
underwriter temporarily holding securities pursuant to an offering of
such securities.
(O) "Subsidiary" shall mean any corporation or other entity or
enterprise, whether incorporated or unincorporated, of which at least a
majority of the securities or other interests having by their terms
ordinary voting power to elect a majority of the board of directors or
others serving similar functions with respect to such corporation or
other entity or enterprise is owned by the Corporation or other entity
or enterprise of which the Corporation directly or indirectly owns
securities or other interests having all the voting power.
2. Term of Agreement. This Agreement shall become effective on the date
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hereof and, subject to the second sentence of this Section 2, shall continue in
effect until the earliest of (i) a Date of Termination in accordance with
Section 6 or the death of the Executive shall have occurred prior to a Change in
Control, (ii) if a Payment Trigger shall have occurred during the term of this
Agreement, the performance by the Corporation of all its obligations, and the
satisfaction by the Corporation of all its obligations and liabilities, under
this Agreement, (iii) any date the Corporation may, in its sole and absolute
discretion, designate which is on or after the third year anniversary of the
date on which notice in writing is given by ALLTEL to the Executive in
accordance with Section 11 that this Agreement will so terminate (hereinafter,
the "Nonrenewal Date"), if, as of the Nonrenewal Date, a Change in Control shall
not have occurred and be continuing, or (iv) in the event, as of the Nonrenewal
Date, a Change in Control shall have occurred and be continuing, either the
expiration of such period thereafter within which a Payment Trigger does not or
can not occur or the ensuing occurrence of a Payment Trigger and the performance
by the Corporation of all of its obligations and liabilities under this
Agreement. Any Change in Control during the term of this Agreement that for any
reason ceases to constitute a Change in Control or is not followed by a Payment
Trigger shall not effect a termination or lapse of this Agreement.
3. General Provisions.
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(A) The Corporation hereby represents and warrants to the
Executive as follows: The execution and delivery of this Agreement and
the performance by the Corporation of the actions contemplated hereby
have been duly authorized by all necessary corporate action on the part
of the Corporation. This Agreement is a legal, valid and legally
binding obligation of the Corporation enforceable in accordance with
its terms. Neither the execution or delivery of this Agreement nor the
consummation by the Corporation of the actions contemplated hereby (i)
will violate any provision of the certificate of incorporation or
bylaws (or other charter documents) of the Corporation, (ii) will
violate or be in conflict with any applicable law or any judgment,
decree, injunction or order of any court or governmental agency or
authority, or (iii) will violate or conflict with or constitute a
default (or an event of which, with notice or lapse of time or both,
would constitute a default) under or will result in the termination of,
accelerate the performance required by, or result in the creation of
any lien, security interest, charge or encumbrance upon any of the
assets or properties of the Corporation under, any term or provision of
the certificate of incorporation or bylaws (or other charter documents)
of the Corporation or of any contract, commitment, understanding,
arrangement, agreement or restriction of any kind or character to which
the Corporation is a party or by which the Corporation or any of its
properties or assets may be bound or affected. The Corporation shall
not at any time assert that any provision of this Agreement is invalid
or unenforceable in any respect or to any extent, irrespective of the
outcome of any action, suit, or proceeding.
(B) No amount or benefit shall be payable under Section 4 or
Section 5 unless there shall have occurred a Payment Trigger during the
term of this Agreement. In no event shall payments in accordance with
this Agreement be made in respect of more than one Payment Trigger. Any
transfer of the Executive's employment from the Corporation to a
Subsidiary, from a Subsidiary to the Corporation, or from one
Subsidiary to another Subsidiary shall not constitute a termination of
the Executive's employment for purposes of this Agreement and shall not
limit, reduce or terminate any of the Executive's rights or benefits
under this Agreement.
(C) This Agreement shall not be construed as creating an
express or implied contract of employment, and, except to the extent
(if any) otherwise agreed in writing between the Executive and the
Corporation, the Executive shall not have any right to be retained in
the employ of the Corporation or of a Subsidiary and the Corporation
and any Subsidiary may in its sole and absolute discretion at any time
terminate the Executive's employment for any reason (but the
Corporation shall be obligated, subject to the provisions of this
Agreement, to make the payments described in Section 4 and Section 5 if
a Payment Trigger occurred during the term of this Agreement,
including, without limitation, a Payment Trigger that occurs as a
result of any such termination of the Executive's employment).
Notwithstanding the immediately preceding sentence or any other
provision of this Agreement, no purported termination of the
Executive's employment that is not effected in accordance with a Notice
of Termination satisfying paragraph (A) of Section 6 shall be effective
for purposes of this Agreement. The Executive's right, following the
occurrence of a Change in Control, to terminate the Executive's
employment under this Agreement for Good Reason shall not be affected
by the Executive's Disability or incapacity. The Executive's continued
employment shall not constitute consent to, or a waiver of rights with
respect to, any act or failure to act constituting Good Reason under
this Agreement.
4. Payments Due Upon a Payment Trigger.
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(A) The Corporation shall pay to the Executive the payments
described in this Section 4 upon the occurrence of a Payment Trigger
during the term of this Agreement.
(B) Upon the occurrence of a Payment Trigger during the term
of this Agreement, the Corporation shall pay to the Executive a lump
sum payment, in cash, equal to the product of:
(i) one multiplied by
(ii) the sum of --
(a) the higher of the Executive's annual base
salary in effect immediately prior to the occurrence of
the Change in Control or the Executive's annual base
salary in effect immediately prior to the Payment
Trigger, plus
(b) the higher of the aggregate maximum amounts
payable to the Executive pursuant to all incentive
compensation plans for the fiscal year or other
measuring period commencing coincident with or most
recently prior to the date on which the Change in
Control occurs or the aggregate maximum amounts payable
to the Executive pursuant to all incentive compensation
plans for the fiscal year or other measuring period
commencing coincident with or most recently prior to
the date on which the Payment Trigger occurs, in each
case, assuming that the Executive were continuously
employed by the Corporation or a Subsidiary on the
terms and conditions, including, without limitation,
the terms of the incentive plans, in effect immediately
prior to the Change in Control or Payment Trigger,
whichever applies, until the last day of that fiscal
year or other measuring period.
The amount determined under the foregoing provisions of this paragraph (B) shall
be reduced by any cash severance benefit otherwise paid to the Executive under
any applicable severance plan or other severance arrangement. For purposes of
this paragraph (B), amounts payable to the Executive pursuant to an incentive
compensation plan for the fiscal year or other measuring period commencing
coincident with or most recently prior to the date on which the Change of
Control or Payment Trigger, as applicable, occurs (the "applicable year/period")
shall not include amounts attributable to a fiscal year or other measuring
period that commenced prior to the applicable year/period and that become
payable during the applicable year/period. For purposes of this paragraph (B),
incentive compensation plans shall include, without limitation, the ALLTEL
Corporation Performance Incentive Compensation Plan as in effect from time to
time, the ALLTEL Corporation Long-Term Performance Incentive Compensation Plan
as in effect from time to time, and any incentive bonus plan or arrangement that
provides for payment of cash compensation, and shall exclude, without
limitation, the ALLTEL Corporation Executive Deferred Compensation Plan as in
effect from time to time, any plan qualified or intended to be qualified under
Section 401(a) of the Code and any plan supplementary thereto, executive fringe
benefits, and any plan or arrangement under which stock, stock options, stock
appreciation rights, restricted stock or similar options, stock, or rights are
issued.
(C) Notwithstanding any provision of any incentive
compensation plan, including, without limitation, any provision of any
incentive plan requiring continued employment after the completed
fiscal year or other measuring period, the Corporation shall pay to the
Executive a lump sum amount, in cash, equal to the amount of any
incentive compensation that has been allocated or awarded to the
Executive for a completed fiscal year or other measuring period
preceding the occurrence of a Payment Trigger under any incentive
compensation plan but has not yet been paid to the Executive.
(D) The payments provided for in paragraphs (B) and (C) of
this Section 4 shall be made not later than the fifth day following the
occurrence of a Payment Trigger, unless the amounts of such payments
cannot be finally determined on or before that day, in which case, the
Corporation shall pay to the Executive on that day an estimate, as
reasonably determined in good faith by the Corporation, of the minimum
amount of the payments to which the Executive is clearly entitled and
shall pay the remainder of the payments (together with interest at the
rate provided in Section 1274(b)(2)(B) of the Code) as soon as the
amount thereof can be determined but in no event later than the
thirtieth day after the occurrence of a Payment Trigger. In the event
the amount of the estimated payments exceeds the amount subsequently
determined to have been due, the excess shall constitute a loan by the
Corporation to the Executive, payable on the fifth business day after
demand by the Corporation (together with interest at the rate provided
in Section l274(b)(2)(B) of the Code). At the time that payments are
made under this Section 4, the Corporation shall provide the Executive
with a written statement setting forth the manner in which the payments
were calculated and the basis for the calculations including, without
limitation, any opinions or other advice the Corporation has received
from outside counsel, auditors or consultants (and any opinions or
advice that are in writing shall be attached to the statement).
5. Gross-Up Payments.
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(A) This Section 5 shall apply if a Payment Trigger shall have
occurred during the term of this Agreement.
(B) In the event it shall be determined that any payment or
distribution by the Corporation or other amount with respect to the
Corporation to or for the benefit of the Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 5 (a "Payment"), is (or will be)
subject to the excise tax imposed by Section 4999 of the Code or any
interest or penalties are (or will be) incurred by the Executive with
respect to the excise tax imposed by Section 4999 of the Code with
respect to the Corporation (the excise tax, together with any interest
and penalties, are hereinafter collectively referred to as the "Excise
Tax"), the Executive shall be entitled to receive an additional cash
payment (a "Gross-Up Payment") from the Corporation in an amount equal
to the sum of the Excise Tax and an amount sufficient to pay the
cumulative Excise Tax and all cumulative income taxes (including any
interest and penalties imposed with respect to such taxes) relating to
the Gross-Up Payment so that the net amount retained by the Executive
is equal to all payments received pursuant to the terms of this
Agreement or otherwise less income taxes (but not reduced by the Excise
Tax).
(C) Subject to the provisions of paragraph (D) of this Section
5, all determinations required to be made under this Section 5,
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 the determination, shall be made by a nationally recognized
certified public accounting firm designated by the Executive (the
"Accounting Firm") which shall provide detailed supporting calculations
both to the Corporation and the Executive within 30 days after the
receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Corporation. In the event that
at any time relevant to this Agreement the Accounting Firm is serving
as accountant or auditor for the individual, entity or group or Person
effecting the Change in Control, the Executive shall appoint another
nationally recognized certified public accounting firm 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 Corporation. Any
Gross-Up Payment, as determined in accordance with this Section 5,
shall be paid by the Corporation to the Executive within five days
after the receipt of the Accounting Firm's determination. If the
Accounting Firm determines that no Excise Tax is payable by the
Executive, it shall so indicate to the Executive in writing. Any
determination by the Accounting Firm shall be binding upon the
Corporation and the Executive. As a result of uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm, it is possible that Gross-Up
Payments that the Corporation should have made will not have been made
(an "Underpayment"), consistent with the calculations required to be
made hereunder. In the event the Corporation exhausts its remedies in
accordance with paragraph (D) of this Section 5 and the Executive
thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of Underpayment that has
occurred and the Underpayment shall be promptly paid by the Corporation
to or for the benefit of the Executive.
(D) The Executive shall notify the Corporation in writing of
any claim by the Internal Revenue Service that, if successful, would
require a Gross-Up Payment (that has not already been paid by the
Corporation). The notification shall be given as soon as practicable
but no later than ten business days after the Executive is informed in
writing of the claim and shall apprize the Corporation of the nature of
the claim and the date on which the claim is requested to be paid. The
Executive shall not pay the claim prior to the expiration of the 30-day
period following the date on which the Executive gives notice to the
Corporation or any shorter period ending on the date that any payment
of taxes with respect to the claim is due. If the Corporation notifies
the Executive in writing prior to the expiration of the 30-day period
that it desires to contest the claim, the Executive shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to the claim;
(ii) take any action in connection with contesting
the claim as the Corporation shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to the claim by an
attorney reasonably selected by the Corporation;
(iii) cooperate with the Corporation in good faith
in order effectively to contest the claim; and
(iv) permit the Corporation to participate in any
proceedings relating to the claim.
The Corporation shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with the 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 the representation and payment of costs and expenses.
Without limitation of the foregoing provisions of this Section 5, the
Corporation shall control all proceedings taken in connection with the 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 the claim and may, at its sole option, either direct the Executive to
pay the tax claimed and xxx for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute the contest to a determination
before any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Corporation shall determine. If the
Corporation directs the Executive to pay the claim and xxx for a refund, the
Corporation shall advance the amount of the 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 the advance or with
respect to any imputed income with respect to the advance; and any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which the contested amount is claimed to be due
shall be limited solely to the contested amount. The Corporation'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.
(E) If, after the receipt by the Executive of an amount
advanced by the Corporation pursuant to paragraph (D) of this Section
5, the Executive becomes entitled to receive any refund with respect to
the claim, the Executive shall, subject to the Corporation's compliance
with the requirements of paragraph (D) of this Section 5, promptly pay
to the Corporation the amount of the 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 Corporation
pursuant to paragraph (D) of this Section 5, a determination is made
that the Executive shall not be entitled to any refund with respect to
the claim and the Corporation does not notify the Executive in writing
of its intent to contest the denial of refund prior to the expiration
of 30 days after the determination, then the advance shall be forgiven
and shall not be required to be repaid and the amount of the advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
(F) Notwithstanding any other provision of this Section 5, to
the extent that the Executive is entitled to a tax "gross-up" payment
with respect to a Payment from the Corporation, any Subsidiary, or any
affiliate of the Corporation under any other agreement, the foregoing
provisions of this Section 5 shall not apply to that Payment.
6. Termination Procedures.
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(A) During the term of this Agreement, any purported
termination of the Executive's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one
party hereto to the other party hereto in accordance with Section 11
hereof. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice that indicates any provision in this Agreement
relied upon, and, if applicable, the notice shall set forth in
reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision
so indicated. Further, a Notice of Termination for Cause shall include
a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the entire membership of the Board at a meeting of
the Board that was called and held for the purpose of considering the
termination finding that, in the informed, reasonable, good faith
judgment of the Board, the Executive was guilty of conduct set forth in
the definition of Cause in Section 1(C), and specifying the particulars
thereof in detail.
(B) "Date of Termination" with respect to any purported
termination of the Executive's employment during the term of this
Agreement (other than by reason of death) shall mean (i) if the
Executive's employment is terminated for Disability, 20 business days
after Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during that 20 business day period) and (ii) if the Executive's
employment is terminated for any other reason, the date specified in
the Notice of Termination, which, in the case of a termination by the
Corporation, shall not be less than ten business days except in the
case of a termination for Cause, and, in the case of a termination by
the Executive, shall not be less than ten business days nor more than
20 business days, respectively, after the date such Notice of
Termination is given.
7. Protective Covenants By The Executive.
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(A) Return of Property. Within five days after the date of
termination of the Executive's employment with the ALLTEL Group, the
Executive shall deliver to the Corporation all of the ALLTEL Group's
property in the Executive's possession, custody or control, including,
without limitation, all keys and credit cards, all computers and fax
machines, and all files, documents, data and information in any medium
relating in any way to the ALLTEL Group or its employees, suppliers,
customers or business.
(B) Non-Disclosure. The Executive acknowledges that in the
course of the Executive's employment with the ALLTEL Group he has had
and will have access to confidential information and trade secrets
proprietary to ALLTEL Group, including but not limited to, information
relating to the ALLTEL Group's products, suppliers, and customers, the
sources, nature, processes, costs and prices of the ALLTEL Group's
products, the names, addresses, contact persons, purchasing and sales
histories, and preference of the ALLTEL Group's suppliers and
customers, the ALLTEL Group's business plans and strategies, and the
names and addresses of, amounts of compensation paid to, and the
trading and sales performance of the ALLTEL Group's employees and
agents (hereinafter referred to as the "Confidential Information"). The
Executive further acknowledges that the Confidential Information is
proprietary to the ALLTEL Group, that the unauthorized disclosure of
any of the Confidential Information to any person or entity could
result in immediate and irreparable competitive injury to the ALLTEL
Group, that could not adequately be remedied by an award of monetary
damages. Accordingly, the Executive shall not disclose at any time any
Confidential Information to any person or entity who is not properly
authorized by the Corporation to receive the information, without the
prior written permission of the Corporation's Chief Executive Officer.
(C) Non-Interference. The Executive shall not during the
Executive's employment with the ALLTEL Group and thereafter until the
expiration of 12 calendar months immediately following the calendar
month in which occurs the Executive's termination of employment with
the ALLTEL Group knowingly employ, or knowingly assist any person or
entity other than the ALLTEL Group in employing, any employee of any
member of the ALLTEL Group. The Executive shall not during the term of
the Executive's employment with the ALLTEL Group and thereafter until
the expiration of 12 calendar months immediately following the calendar
month in which occurs the Executive's termination of employment with
the ALLTEL Group knowingly solicit, or knowingly assist any person or
entity to solicit, any employee of any member of the ALLTEL Group to
leave the ALLTEL Group's employment or to become employed by any entity
that is not a member of the ALLTEL Group.
(D) Harmful Statements. The Executive shall not at any time
knowingly disseminate any information or knowingly make any statements,
whether written, oral or otherwise, that are negative, disparaging or
critical of the Corporation, any other member of the ALLTEL Group, or
any of their parents, subsidiaries, affiliates, or their respective
officers, directors, employees, shareholders, trustees, administrators,
or employee benefit plans, or the representatives, employees, agents,
predecessors, successors, heirs, or assigns of any of the foregoing
(hereinafter, the "ALLTEL Parties"), or their business or operations,
or that place any of the ALLTEL Parties in a bad light, other than any
such statement or information that is made or disseminated by the
Executive in a good faith belief as to their truth or accuracy and is
either required by law or is reasonably necessary to the enforcement by
the Executive of any right the Executive has related to the Executive's
employment with the ALLTEL Group
.
(E) Resignations. Within five days after the termination of
the Executive's employment with the ALLTEL Group, the Executive shall
execute and deliver to the Chief Executive Officer of the Corporation
such resignations as a director and officer of the Corporation and any
other members of the ALLTEL Group, in such form, as may be reasonably
requested by the Corporation's Chief Executive Officer.
(F) Challenge to Validity. The Executive shall not at any time
assert that any provision of this Agreement is invalid or unenforceable
in any respect or to any extent, irrespective of the outcome of any
action, suit or proceeding.
(G) Executive Assistance. If a Payment Trigger occurs during
the term of this Agreement and if the Corporation is not in breach of
any of the Corporation's covenants set forth in this Agreement, the
Executive shall, until the expiration of 12 calendar months immediately
following the calendar month in which the Payment Trigger occurred,
provide such information and assistance as the Corporation may
reasonably request as necessary or appropriate to assist any ALLTEL
Group member in the arbitration or litigation or potential arbitration
or litigation of any claim, action, suit or proceeding by any person or
entity other than the Executive against any ALLTEL Group member arising
from events occurring during the Executive's employment with the ALLTEL
Group, if the Corporation pays all out-of-pocket expenses incurred by
the Executive in complying with this paragraph (G). The Executive shall
not, however, be required to provide assistance that would interfere
with any activity for remuneration or profit in which the Executive is
then actively engaged.
8. No Mitigation. The Executive shall not be required to seek other
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employment or to attempt in any way to reduce any amounts payable to the
Executive by the Corporation pursuant to this Agreement. Further, the amount of
any payment or benefit provided for in this Agreement shall not be reduced by
any compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Corporation or a Subsidiary, or otherwise.
9. Disputes; Remedies.
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(A) If a dispute or controversy arises out of or in connection
with this Agreement, the parties shall first attempt in good faith to
settle the dispute or controversy by mediation under the Commercial
Mediation Rules of the American Arbitration Association before
resorting to arbitration or litigation. Thereafter, any remaining
unresolved dispute or controversy arising out of or in connection with
this Agreement shall, upon a written notice from the Executive to the
Corporation either before suit thereupon is filed or within 20 business
days thereafter, be settled exclusively by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration
Association in a city located within the continental United States
designated by the Executive. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. Notwithstanding
the foregoing provisions of this paragraph (A):
(i) The Executive shall be entitled to seek
specific performance of the Corporation's obligations
hereunder during the pendency of any dispute or controversy
arising under or in connection with this Agreement; and
(ii) The Corporation shall be entitled to seek the
injunctive relief described in paragraph (E) of this Section 9
during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
(B) Any legal action concerning this Agreement, other than a
mediation or an arbitration described in paragraph (A) of this Section
9, whether instituted by the Corporation or the Executive, shall be
brought and resolved only in a state court of competent jurisdiction
located in the territory that encompasses the city, county, or parish
in which the Executive's principal residence is located at the time
such action is commenced. The Corporation hereby irrevocably consents
and submits to and shall take any action necessary to subject itself to
the personal jurisdiction of that court and hereby irrevocably agrees
that all claims in respect of the action shall be instituted, heard,
and determined in that court. The Corporation agrees that such court is
a convenient forum, and hereby irrevocably waives, to the fullest
extent it may effectively do so, the defense of an inconvenient forum
to the maintenance of the action. Any final judgment in the action may
be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.
(C) The Corporation shall pay all costs and expenses,
including attorneys' fees and disbursements, of the Corporation and, at
least monthly, all reasonable costs and expenses, including reasonable
attorney's fees and disbursements, of the Executive in connection with
any legal proceeding (including arbitration), whether or not instituted
by the Corporation or the Executive, relating to the interpretation or
enforcement of any provision of this Agreement. The Corporation shall
pay prejudgment interest on any money judgment obtained by the
Executive as a result of any such proceeding, calculated at the rate
provided in Section 1274(b)(2)(B) of the Code. Notwithstanding the
foregoing provisions of this paragraph (C):
(i) If the Executive instituted the legal
proceeding and the judge, arbitrator, or other individual
presiding over the proceeding affirmatively finds that the
Executive instituted the proceeding in bad faith, no
reimbursement pursuant to this paragraph (C) shall be due to
the Executive, the Executive shall repay the Corporation for
any amounts previously paid by it pursuant to this paragraph
(C), and the Executive shall pay all reasonable costs and
expenses, including reasonable attorney's fees and
disbursements, of the Corporation in connection with the
proceeding;
(ii) With respect to any dispute in which the
Executive challenges the validity or enforceability of any
provision of this Agreement in any respect or to any extent,
no reimbursement or no further reimbursement pursuant to this
paragraph (C) shall be due to the Executive, and the Executive
shall repay the Corporation for any amounts previously paid by
it pursuant to this paragraph (C); and
(iii) With respect to any dispute or controversy
regarding the provisions of Section 7, other than a dispute to
which the immediately preceding clause (ii) applies, if the
Executive does not prevail (after exhaustion of all available
remedies), no further reimbursement pursuant to this paragraph
(C) shall be due to the Executive, and the Executive shall
repay the Corporation for any amounts previously paid by it
pursuant to this paragraph (C) in respect of such dispute.
(D) The Executive acknowledges and agrees that the Executive's
sole and exclusive remedy with respect to any and all claims arising
under this Agreement or for breach hereof by the Corporation shall be
the right to receive such amounts as are provided for under Section 4,
Section 5, and paragraph (C) of this Section 9, to which the Executive
is otherwise entitled pursuant to the terms and conditions of this
Agreement.
(E) The Executive acknowledges and agrees that each and every
covenant contained in Section 7 (hereinafter, the "Protective Covenants
") is reasonable and is necessary to protect the trade secrets,
confidential information, and other business interests of the ALLTEL
Group and that the Executive's compliance with each of the Protective
Covenants is necessary to protect the ALLTEL Group from unfair injury.
The Executive acknowledges that the Protective Covenants are a
principal inducement for the willingness of the Corporation to enter
into this Agreement and make the payments and provide the benefits to
the Executive under this Agreement and that the Corporation and the
Executive intend the Protective Covenants to be binding upon and
enforceable against the Executive in accordance with their terms,
notwithstanding any common or statutory law to the contrary.
Notwithstanding any other provision of this Agreement, the obligations
of the Corporation under this Agreement are conditioned upon compliance
by the Executive with each of the Protective Covenants, and failure by
the Executive to comply, in all material respects, with the Protective
Covenants shall entitle the Corporation to all rights and remedies
available at law or in equity. The Executive acknowledges that a
breach, in any material respect, of the Protective Covenants could
result in irreparable and continuing harm and damage to the ALLTEL
Group for which there may be no adequate remedy at law. In the event of
a breach, in any material respects, of any of the Protective Covenants,
each and every member of the ALLTEL
Group shall be entitled to injunctive relief in addition to any other
remedy or relief to which any of them may be entitled.
10. Successors; Binding Agreement
-----------------------------
(A) In addition to any obligations imposed by law upon any
successor to the Corporation, the Corporation shall require any
successor (whether direct or indirect, by purchase, merger,
consolidation, or otherwise) to all or substantially all of the
business or assets of the Corporation expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that
the Corporation would be required to perform it if no such succession
had taken place. Failure of the Corporation to obtain the assumption
and agreement prior to the effectiveness of any succession shall be a
breach of this Agreement and shall entitle the Executive to
compensation from the Corporation in the same amount and on the same
terms as the Executive would be entitled to hereunder if the Executive
were to terminate the Executive's employment for Good Reason
immediately after a Change in Control and during the term of this
Agreement, except that, for purposes of implementing the foregoing, the
date on which any succession becomes effective shall be deemed the
Payment Trigger occasioned by the foregoing deemed termination of
employment for Good Reason immediately following a Change in Control.
The provisions of this Section 10 shall continue to apply to each
subsequent employer of the Executive bound by this Agreement in the
event of any merger, consolidation, or transfer of all or substantially
all of the business or assets of that subsequent employer.
(B) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees,
and legatees. If the Executive shall die while any amount would be
payable to the Executive hereunder if the Executive had continued to
live, the amount, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to the executors, personal
representatives, or administrators of the Executive's estate.
11. Notices. For the purpose of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, or to such other address as either party
may have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon actual receipt:
To the Corporation:
ALLTEL Corporation
Xxx Xxxxxx Xxxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Attention: Chairman of the Board
To the Executive:
Xxxxx X. Xxxxxxxx
0 Xxxxxx Xxxxx
Xxxxxx Xxxx, XX 00000
12. Miscellaneous. No provision of this Agreement may be modified,
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waived, or discharged unless such waiver, modification, or discharge is agreed
to in writing and signed by the Executive and an officer of the Corporation
specifically designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement. The validity, interpretation, construction, and performance of this
Agreement shall be governed by the laws of the State of Delaware. All references
to sections of the Exchange Act or the Code shall be deemed also to refer to any
successor provisions to such sections. Any payments provided for hereunder shall
be paid net of any applicable withholding required under federal, state, or
local law and any additional withholding to which the Executive has agreed.
13. Validity. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. Counterparts. This Agreement may be executed in several
------------
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date set forth above.
ALLTEL CORPORATION
Attest:
/s/ Xxxxxxx X. Xxxxxx /s/ Xxx X. Xxxx
____________________________ By:__________________________________
Name: Xxxxxxx X. Xxxxxx Name: Xxx. X. Xxxx
Title: Secretary Title:
Witness:
/s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx