EXHIBIT 10b
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 1st day of
June, 1998, by and between Xxxx Atlantic Corporation, its successors and assigns
("Xxxx Atlantic"), and Xxxxx X. Xxxxxx, President and Chief Executive Officer -
Telecom Group of Xxxx Atlantic (the "Key Executive"). In this Agreement, "Xxxx
Atlantic Companies" means all of, and "Xxxx Atlantic Company" means any one of,
Xxxx Atlantic, all corporate subsidiaries or other companies affiliated with
Xxxx Atlantic, all companies in which Xxxx Atlantic directly or indirectly owns
a substantial equity interest, and their successors and assigns.
WHEREAS, Xxxx Atlantic and the Key Executive have previously entered into
an Employment Agreement dated July 10, 1996 (the "Prior Agreement"); and
WHEREAS, Xxxx Atlantic and the Key Executive wish to supersede, in its
entirety, the Prior Agreement;
NOW, THEREFORE, for good and valuable consideration, the Key Executive and
Xxxx Atlantic hereby agree as follows:
1. Term of Employment. The term of employment under this Agreement (the
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"Term of Employment") shall commence on June 1, 1998 and end on the third
anniversary of such date.
2. Obligations of the Xxxx Atlantic Companies. During the Term of
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Employment, the Xxxx Atlantic Companies shall have the following obligations and
duties and shall provide the following compensation to the Key Executive.
(a) Salary. One or more Xxxx Atlantic Companies shall employ the Key
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Executive as an officer and senior manager and shall compensate the Key
Executive at a base salary of (i) not less than his current base salary for
the period June 1, 1998 through August 13, 1998, and (ii) not less than
$750,000 per year (pro-rated for August 14, 1998 through December 31, 1998)
for the remainder of his Term of Employment.
(b) STIP. The Key Executive shall participate in the Xxxx Atlantic
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Senior Management Short Term Incentive Plan or any successor to that plan
("STIP") and shall be eligible each year during the Term of Employment for
a potential maximum award which shall not be less than the potential
maximum award he is eligible to receive for the performance year 1998.
(c) Stock Options. The Key Executive shall participate in the Xxxx
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Atlantic 1985 Incentive Stock Option Plan or any successor to that plan
(the "Stock Option Plan") and shall receive an annual grant of options
thereunder with a value equal to or greater than 1.6 multiplied by the Key
Executive's base salary on the date of the grant.
(d) Vacation. The Key Executive shall have the same holidays per
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calendar year recognized by his employing company for its management
employees (presently 10) and shall have an aggregate of 4 management
personal days and 5 weeks vacation per calendar year, provided that such
management personal days and vacation days shall be scheduled with due
regard to the needs of the business.
(e) Corporate Aircraft. Subject to the needs of the business, the Key
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Executive shall be entitled to personal use of corporate aircraft for three
trips per year without geographic restriction, and unlimited reasonable
personal use of corporate aircraft within the Xxxx Atlantic footprint. The
Key Executive shall be responsible for the payment of taxes on imputed
income attributable to personal use of corporate aircraft, except that,
whenever the Key Executive uses corporate aircraft for business purposes
and is accompanied by an immediate family member whose use of corporate
aircraft results in the imputation of income to the Key Executive, the
Company shall pay the Key Executive additional cash compensation in an
amount sufficient to allow the Key Executive to pay taxes on (i) such
additional compensation, plus (ii) the income imputed to the Key Executive
because of such family member's use of corporate aircraft.
(f) Apartment. The Key Executive shall be entitled to use a corporate
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owned or leased apartment located in New York City on an as-needed basis.
(g) Other Benefit Plans. To the extent not otherwise modified by the
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terms of this Agreement, the Key Executive shall be eligible to participate
in all of the benefit and compensation plans, and the programs or
perquisites, applicable to similarly-situated senior managers of Xxxx
Atlantic, as those plans and programs may be amended, supplemented,
replaced or terminated from time to time.
(h) Board of Directors. The Key Executive shall be nominated for
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election to the Board of Directors of Xxxx Atlantic (the "Board") at each
annual meeting of shareowners which occurs prior to the end of the Term of
Employment.
3. Obligations of the Key Executive. During the Term of Employment, the
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Key Executive shall have the following obligations and duties.
(a) Director and Officer. The Key Executive shall continue to fully and
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faithfully perform his duties and responsibilities (i) as a director, so
long as he is elected and serving, and (ii) as an officer, reporting only
to the Chief Executive Officer and the Board.
(b) Executive. The Key Executive shall serve in such executive
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capacities, with such titles and authorities, as the Board or the Chief
Executive Officer may from time to time prescribe, and the Key Executive
shall perform all duties incidental to such positions, shall cooperate
fully with the Board and the Chief Executive Officer, and shall work
cooperatively with the other officers of the Xxxx Atlantic Companies.
(c) Entire Business Efforts. The Key Executive shall continue to
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diligently devote his entire business skill, time and effort to the affairs
of the Xxxx Atlantic Companies in accordance with the duties assigned to
him, and shall perform all such duties, and otherwise conduct himself, in a
manner reasonably calculated in good faith
by him to promote the best interests of the Xxxx Atlantic Companies. Prior
to the Key Executive's termination of employment, except to the extent
specifically permitted by the Chief Executive Officer or the Board, and
except for memberships on boards of directors which the Key Executive holds
on the date of this Agreement, the Key Executive shall not, directly or
indirectly, render any services of a business, commercial or professional
nature to any other person or organization other than a Xxxx Atlantic
Company or a venture in which a Xxxx Atlantic Company has a financial
interest, whether or not the services are rendered for compensation.
4. IDP Credit. Upon the Key Executive's execution of this Agreement, Xxxx
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Atlantic shall credit $891,512 to the Company Contribution sub-account contained
within the Key Executive's account under the Xxxx Atlantic Income Deferral Plan
("IDP"). The parties acknowledge that such credit is in complete satisfaction
of, and will fully discharge, any right or entitlement that the Key Executive
may have, now or in the future, to the retirement pension benefits provided for
in Section 5 of the Prior Agreement.
5. Stay Incentive.
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(a) Initial Payment. If the Key Executive has remained an "Employee in
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Good Standing" (as hereinafter defined) of a Xxxx Atlantic Company from the
date of this Agreement to July 1, 1998, then Xxxx Atlantic will cause the
Xxxx Atlantic Company which then employs the Key Executive (i) to pay him,
not later than July 31, 1998, an amount of cash equal to (A) two times the
Key Executive's Pay as of July 1, 1998, less (B) $500,000, and (ii) to
credit $500,000 to his account under the IDP, in accordance with the
deferral election previously made by the Key Executive.
(b) Additional Payment. If the Key Executive has remained an Employee
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in Good Standing of a Xxxx Atlantic Company from the date of this Agreement
to August 14, 1999, then Xxxx Atlantic will cause the Xxxx Atlantic Company
which then employs the Key Executive to pay him an additional amount equal
to 100 percent of his Pay as of August 14, 1999. This payment shall be made
in a single cash payment, not later than September 13, 1999.
(c) Definition of Pay. As used in this Section 5, "Pay" means the sum
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of (i) an amount equal to the Key Executive's then current base salary,
plus (ii) the greater of (A) the value of the Key Executive's most recent
award under the STIP or (B) 75% of the potential maximum award for the Key
Executive under the STIP for the performance year that includes the
relevant date. In the event that the most recent STIP award was prorated
for a portion of a year, the STIP award shall be annualized.
(d) Definition of Employee in Good Standing. For purposes of this
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Agreement, the Key Executive will be considered to be an "Employee in Good
Standing" on a given date if, on or before that date, the Key Executive has
not terminated employment for any reason (other than "constructive
discharge" as defined in Section 7(d) of this Agreement), has not tendered
oral or written notice of intent to resign or retire effective as of a date
on or before the given date (other than pursuant to a "constructive
discharge" as defined in Section 7(d) of this Agreement), and has not
behaved in a manner that would be grounds for discharge with cause as
defined in Section 7(b) of this Agreement.
6. Phantom Shares.
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(a) Phantom Share Award. Upon the Key Executive's execution of the
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Agreement, Xxxx Atlantic shall establish a notional account on behalf of
the Key Executive and credit to that account 30,000 shares of Xxxx Atlantic
stock ("Phantom Shares"). This account shall further be credited, on each
subsequent dividend payment date for Xxxx Atlantic stock, with an amount
equivalent to the dividend payable on the number of shares of Xxxx Atlantic
stock equal to the number of Phantom Shares in the Key Executive's account
on the record date for such dividend. Such amount shall immediately be
converted to a number of additional Phantom Shares calculated by dividing
such amount by the value of Xxxx Atlantic stock, as determined pursuant to
Section 6(c)(i) of this Agreement.
(b) Cash Payment. Provided the Key Executive remains an Employee in
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Good Standing from the date of this Agreement to June 1, 2001, the Key
Executive shall be entitled to receive, not later than July 1, 2001, a cash
payment in an amount equal to the value of the Key Executive's Phantom
Shares in his notional account on June 1, 2001, as determined pursuant to
Section 6(c)(ii) of this Agreement.
(c) Value of Shares. The value of Xxxx Atlantic stock or Phantom Shares
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shall be determined as follows:
(i) for purposes of Section 6(a) of this Agreement, such value
shall be the average of the high and low sale prices of Xxxx Atlantic
stock on the New York Stock Exchange ("NYSE") on the applicable
dividend payment date;
(ii) for purposes of Section 6(b) of this Agreement, such value
shall be the greater of (A) the average of the high and low sale prices
of Xxxx Atlantic stock on the NYSE on June 1, 2001, or (B) the average
of the daily high and low sale prices of Xxxx Atlantic stock on the
NYSE for the period of twenty trading days ending on June 1, 2001, or
the period of twenty trading days immediately preceding June 1, 2001 if
the NYSE is closed on that date; and
(iii) for purposes of Section 7(c)(iii) of this Agreement, such
value shall be determined in the manner described in clause (ii) above,
except that the Key Executive's separation date shall be used instead
of June 1, 2001.
(d) Stock Split. The number of Phantom Shares provided for in this
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Section 6 shall be adjusted to reflect the two for one split of Xxxx
Atlantic stock that is scheduled to occur in June, 1998, plus any further
stock splits, corporate reorganizations or other changes in capital
structure that may occur.
7. Terminations of Employment.
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(a) Voluntary Resignation, Retirement, or Discharge for Cause. In the
event that, prior to the end of the Term of Employment, the Key Executive
voluntarily resigns or retires for any reason (except a "constructive
discharge", as hereinafter defined), or is discharged by Xxxx Atlantic for
"cause" (as hereinafter defined), the Key
Executive shall forfeit any and all rights to receive the compensation and
benefits set forth in Sections 2 and 5 of this Agreement which as of the
relevant date have not yet been earned under this Agreement, and shall
forfeit the right to receive the compensation set forth in Section 6 of
this Agreement, but shall otherwise be eligible to receive any and all
compensation and benefits for which a similarly-situated senior manager
would be eligible under the applicable provisions of the compensation and
benefit plans in which he is then eligible to participate, as those plans
may be amended from time to time.
(b) Cause. For purposes of this Agreement, the term "cause" shall mean
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(i) grossly incompetent performance or substantial or continuing
inattention to or neglect of the duties and responsibilities assigned to
the Key Executive; fraud, misappropriation or embezzlement involving any
Xxxx Atlantic Company; or a material breach of the Employee Code of
Business Conduct or Paragraphs 9 (Non-Compete/No Solicitation), 10 (Return
of Property; Intellectual Property Rights) or 11 (Proprietary and
Confidential Information) of this Agreement; each of the foregoing as
determined in the reasonable discretion and judgment of the Chief Executive
Officer of Xxxx Atlantic, or (ii) commission of any felony of which the Key
Executive is finally adjudged guilty in a court of competent jurisdiction.
In the event that Xxxx Atlantic terminates the employment of the Key
Executive for cause, it will state in writing the grounds for such
termination and provide this statement to the Key Executive within 10
business days after the date of termination.
(c) Involuntary Terminations. Except in the case of a discharge for
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cause, in the event that Xxxx Atlantic discharges the Key Executive, or the
Key Executive is "constructively discharged" (as hereinafter defined),
prior to the end of the Term of Employment, then the Key Executive shall be
entitled to receive, as liquidated damages, subject to signing and
delivering the Release (attached as Exhibit A), the following payments,
credits and benefits in lieu of any payment, credit, or benefit otherwise
provided in Sections 2, 5 and 6 of this Agreement, provided that each
payment, credit and benefit shall be contingent upon the absence, at the
time such payment, credit or benefit is due, of any act that would
constitute a material breach of this Agreement:
(i) Salary: through the Term of Employment, on a monthly basis,
an amount equal to the monthly salary which would have been paid to the
Key Executive under Section 2 of this Agreement, assuming that his
annual rate of salary would have been increased each January 1 by the
greater of (A) 5%, or (B) the general percentage increase, if any,
approved by the Human Resources Committee ("HRC") of the Board for
comparable positions in the senior management group based on the HRC's
review of market-median values for such comparable positions;
(ii) Short-Term Incentives: through the Term of Employment, on an
annual basis, not later than 30 days after the date on which incentives
are awarded by Xxxx Atlantic under the STIP for the prior year's
performance, an amount equal to the value of the potential maximum
award which the Key Executive would have been entitled to receive under
the STIP based on the
maximum STIP award for comparable positions in the senior management
group, without adjustment for individual performance;
(iii) Phantom Shares: not later than 30 days after the Key
Executive's separation from service, an amount equal to the total value
of the Phantom Shares in the Key Executive's Phantom Shares' account on
the date of such separation from service, as determined pursuant to
Section 6(c)(iii) of this Agreement;
(iv) Stock Options: through the Term of Employment, on an annual
basis, within 30 days of the granting of stock options for the year to
senior managers, an amount equal to 1.6 multiplied by the annual salary
amount determined in accordance with clause (i) above; provided
further, with respect to any and all Xxxx Atlantic stock options which
are outstanding on the date of the Key Executive's separation from
service, the Key Executive shall be deemed, for purposes of determining
the duration of the Key Executive's right to exercise any and all such
stock options, to have remained in active service with Xxxx Atlantic
continuously through the Term of Employment, and then to have separated
from service with whatever rights would then be applicable to a holder
of such options under the Stock Option Plan;
(v) IDP Benefits: through the Term of Employment, company
credits to the Company Contribution sub-account contained within the
Key Executive's account under the IDP to the fullest extent provided,
and at the same time such amounts would have been credited, as if the
Key Executive had remained actively employed until the end of the Term
of Employment and received the salary and maximum STIP awards
determined in accordance with clauses (i) and (ii) above; provided
further, that Xxxx Atlantic shall also credit to such IDP sub-account
an amount each year equal to the sum of (A) the amount which the Key
Executive would otherwise have been eligible to receive as company
matching contributions under the Xxxx Atlantic Savings Plan or any
successor to that plan (if he had fully participated in contributions
to that plan) and (B) the pay credits which the Key Executive would
otherwise have been eligible to receive under the Xxxx Atlantic Cash
Balance Plan or any successor to that plan;
(vi) Split- Dollar Benefits: regardless of whether the Key
Executive is retirement eligible at the time of his separation from
service, split-dollar life insurance benefits applicable to a retiring
participating senior manager, under the terms of the Xxxx Atlantic
Senior Management Estate Management Program;
(vii) Flexible Perquisites: through the Term of Employment, on a
monthly basis, $2,500 in lieu of the Flexible Perquisites Account
allowance that the Key Executive would have been entitled to receive;
and
(viii) Stay Incentive: on the dates specified in Section 5(a) and
5(b), the amounts specified in those sections, provided that, for
purposes of calculating the Section 5(b) amount, if the separation from
service occurs prior to January 1, 1999, the Key Executive's salary and
maximum STIP award shall be determined in accordance with clauses (i)
and (ii) above.
(d) Constructive Discharge. The Key Executive shall be deemed to have
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been "constructively discharged" for purposes of this Agreement if the Key
Executive is an Employee in Good Standing and he terminates his employment
for any of the following reasons: Xxxx Atlantic (or the Key Executive's
employing company) has materially breached this Agreement; the Key
Executive's responsibilities have been significantly reduced in type or
scope; there has been a significant adverse change in the Key Executive's
reporting relationship; there has been a significant adverse change in the
Key Executive's relative compensation (including a negative individual
performance adjustment which causes the Key Executive's STIP award for a
particular year to be reduced by 10% or more); Xxxx Xxxxxxxxxx is not
elected Chairman of the Board by December 31, 1998 or is removed from or
resigns from that position during the Term of Employment (unless the Board
determines that such event results from Xx. Xxxxxxxxxx'x death,
"Disability" (as defined in Section 4(a) of his Employment Agreement, dated
as of August 14, 1997), or his election to terminate his employment
"without Good Reason" (as provided in Section 4(c) of his Employment
Agreement)); or there has been a "change of control" of Xxxx Atlantic. For
purposes of this Agreement, a change of control of Xxxx Atlantic shall mean
that any of the following events or circumstances has occurred:
(i) any "Person" (as such term is used in sections 13(d) and
14(d)(2) of the Securities Exchange Act of 1934) becomes a beneficial
owner, directly or indirectly, of shares of one or more classes of
stock of Xxxx Atlantic representing 20% or more of the total voting
power of Xxxx Atlantic's then outstanding voting stock, provided,
however, that if such beneficial ownership is acquired in a transaction
that has been negotiated and approved by the Board, such acquisition of
beneficial ownership shall not be treated as a change of control of
Xxxx Atlantic for purpose of this Agreement;
(ii) a tender offer (for which a filing has been or is required to
be made with the Securities and Exchange Commission under section 14(d)
of the Securities Exchange Act of 1934) is made for the stock of Xxxx
Atlantic, and the Person making the offer owns or has accepted for
payment shares of one or more classes of Xxxx Atlantic stock which
represent, when combined with any shares otherwise acquired and owned
by such Person, 20% or more of the total voting power of Xxxx
Atlantic's then outstanding stock, provided, however, that if such
tender offer has been negotiated and approved by the Board, such tender
offer and stock acquisition shall not be treated as a change of control
of Xxxx Atlantic for purposes of this Agreement; or
(iii) there ceases to be a majority of the Board comprised of
individuals who either (A) have been members of the Board continuously
for a period of not less than two years, or (B) are new directors whose
election by the Board or nomination for election by shareowners of Xxxx
Atlantic was approved by a vote of at least two-thirds of the directors
then in office who either were directors described in clause (A) hereof
or whose election or nomination for election was previously so
approved.
(e) Disability or Death. If, during the Term of Employment at a time
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when the Key Executive is an Employee in Good Standing, the Key Executive
terminates employment on account of disability (within the meaning of the
applicable disability benefit plans in which the Key Executive participates
from time to time) or dies, and provided Xxxx Atlantic receives a Release
in the form of Exhibit A from the Key Executive (in the case of disability)
or from his estate (in the case of death), then Xxxx Atlantic shall pay to
the Key Executive (in the case of disability) or pay to the Key Executive's
estate (in the case of death) the amounts determined as if, at the date of
termination of employment on account of disability or death, the Key
Executive had been terminated without cause under Section 7(c) of this
Agreement; provided, however, that in the case of a termination of
employment on account of disability, the amounts paid pursuant to Sections
7(c)(i) and (ii) of this Agreement shall reduce dollar for dollar the
disability benefits which would otherwise be payable to the Key Executive
during the remainder of the Term of Employment under the various disability
benefit plans in which he participates.
8. Payments Subject to Excise Tax. In the event that it shall be
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determined, in the manner described in Exhibit B, that any payment or
distribution by any Xxxx Atlantic Company to or for the benefit of the Key
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, Xxxx
Atlantic shall pay the Key Executive an additional amount, determined in
accordance with and subject to the provisions of Exhibit B, to compensate the
Key Executive for his excise tax cost.
9. Prohibition Against Competitive Activities.
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(a) Prohibited Conduct by the Key Executive. During the period of the
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Key Executive's employment with any Xxxx Atlantic Company, and for a period
of 24 months following the Key Executive's termination of employment for
any reason from all Xxxx Atlantic Companies, the Key Executive, without the
prior written consent of the Chief Executive Officer of Xxxx Atlantic shall
not:
(i) personally engage in "Competitive Activities" (as defined in
Section 9(b) of this Agreement); or
(ii) work for, own, manage, operate, control or participate in the
ownership, management, operation or control of, or provide consulting
or advisory services to, any individual, partnership, firm, corporation
or institution engaged in Competitive Activities, or any company or
person affiliated with such person or entity engaged in Competitive
Activities; provided, however, that the Key Executive's purchase or
holding, for investment purposes, of securities of a publicly-traded
company shall not constitute "ownership" or "participation in
ownership" for purposes of this paragraph so long as the Key
Executive's equity interest in any such company is less than a
controlling interest.
(b) Competitive Activities. For purposes of this Agreement,
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"Competitive Activities" means business activities relating to products or
services of the same or similar type as the products or services which (i)
are sold (or, pursuant to an existing business plan, will be sold) to
paying customers of one or more Xxxx Atlantic
Companies, and (ii) for which the Key Executive then has responsibility to
plan, develop, manage, market or oversee, or had any such responsibility
within the prior 24 months. Notwithstanding the previous sentence, a
business activity will not be treated as a Competitive Activity if the
geographic marketing area of the relevant products or services sold by the
Key Executive or a third party does not overlap with the geographic
marketing area for the applicable products and services of the Xxxx
Atlantic Companies.
(c) No Solicitation of Xxxx Atlantic Employees. During the period of
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the Key Executive's employment with any Xxxx Atlantic Company, and for a
period of 24 months following the Key Executive's termination of employment
for any reason from all Xxxx Atlantic Companies, the Key Executive shall
not, without the consent of the Chief Executive Officer of Xxxx Atlantic:
(i) recruit or solicit any active employee of any Xxxx Atlantic
Company for employment or for retention as a consultant or service
provider;
(ii) hire or participate (with another company or third party) in
the process of hiring (other than for a Xxxx Atlantic Company) any
person who is then an active employee of any Xxxx Atlantic Company, or
provide names or other information about Xxxx Atlantic employees to any
person or business (other than a Xxxx Atlantic Company) under
circumstances which could lead to the use of that information for
purposes of recruiting or hiring; or
(iii) interfere with the relationship of any Xxxx Atlantic Company
with any of its employees, agents, or representatives.
(d) Waiver. Nothing in this Agreement shall bar the Key Executive from
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requesting, at the time of the Key Executive's termination of employment or
at any time thereafter, that the Chief Executive Officer of Xxxx Atlantic
waive, in his sole discretion, Xxxx Atlantic's rights to enforce some or
all of this Section.
10. Return of Property; Intellectual Property Rights. The Key Executive
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agrees that on or before the Key Executive's termination of employment for any
reason with all Xxxx Atlantic Companies, the Key Executive shall return to the
appropriate Xxxx Atlantic Company all property owned by each such company or in
which any such company has an interest, including files, documents, data and
records (whether on paper or in tapes, disks, or other machine-readable form),
office equipment, credit cards and employee identification cards. The Key
Executive acknowledges that Xxxx Atlantic or an applicable Xxxx Atlantic Company
is the rightful owner of any programs, ideas, inventions, discoveries, copyright
material or trademarks which the Key Executive may have originated or developed,
or assisted in originating or developing, during the Key Executive's period of
employment with any Xxxx Atlantic Company, where any such origination or
development involved the use of company time or resources, or the exercise of
the Key Executive's responsibilities for or on behalf of any such company. The
Key Executive shall at all times, both before and after termination of
employment, cooperate with Xxxx Atlantic in executing and delivering documents
requested by any Xxxx Atlantic Company, and taking any other actions, that are
necessary or requested by Xxxx Atlantic to assist any Xxxx Atlantic Company in
patenting, copyrighting or registering any programs, ideas, inventions,
discoveries, copyright material or trademarks, and to vest title thereto in the
applicable company.
11. Proprietary and Confidential Information. The Key Executive shall at
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all times preserve the confidentiality of all proprietary information and trade
secrets of any and all Xxxx Atlantic Companies, except to the extent that
disclosure of such information is legally required. "Proprietary information"
means information that has not been disclosed to the public, and which is
treated as confidential within the business of any Xxxx Atlantic Company, such
as strategic or tactical business plans; undisclosed financial data; ideas,
processes, methods, techniques, systems, patented or copyrighted information,
models, devices, programs, computer software or related information; documents
relating to regulatory matters and correspondence with governmental entities;
undisclosed information concerning any past, pending or threatened legal
dispute; pricing and cost data; reports and analyses of business prospects;
business transactions which are contemplated or planned; research data;
personnel information and data; identities of users and purchasers of any Xxxx
Atlantic Company's products or services; and other confidential matters
pertaining to or known by one or more Xxxx Atlantic Companies, including
confidential information of a third party which the Key Executive knows a Xxxx
Atlantic Company is bound to protect.
12. Nondisclosure. Unless and until the precise terms of this Agreement,
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and the precise amount of any payment eligible to be paid or actually paid under
this Agreement, are disclosed in writing to the public by any Xxxx Atlantic
Company, the Key Executive shall hold the terms of this Agreement and the amount
of any payment, benefit, credit, or right hereunder in strict confidence, except
that the Key Executive may disclose such details (i) on a confidential basis to
his spouse (if any), and to any financial counselor, tax adviser or legal
counsel retained by the Key Executive, or (ii) to the extent such disclosure is
legally required.
13. Assignment by Xxxx Atlantic. The obligations of Xxxx Atlantic
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hereunder shall be the obligations of any and all successors and assigns of Xxxx
Atlantic. Xxxx Atlantic may assign this Agreement without the Key Executive's
consent to any company that acquires all or substantially all of the stock or
assets of Xxxx Atlantic, or into which or with which Xxxx Atlantic is merged or
consolidated. This Agreement may not be assigned by the Key Executive, and no
person other than the Key Executive (or the Key Executive's estate) may assert
the rights of the Key Executive under this Agreement.
14. Non-Benefit Bearing Payments. The amounts to be paid, provided or
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credited under Sections 4, 5, 6, 7, and 8 of this Agreement shall not be treated
as compensation for purposes of computing or determining any additional benefit
to be paid, provided or credited under any savings plan, insurance plan, pension
plan, or other employee benefit plan maintained by any Xxxx Atlantic Company.
15. Deferrals under IDP. Amounts otherwise payable to the Key Executive
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under Sections 5, 6, or 7 of this Agreement may be deferred under the IDP or any
successor plan, but only if and to the extent that a valid deferral election is
in place and deferral of such amounts is permitted under the terms of the IDP or
successor plan.
16. Forfeiture of IDP Amounts. The Key Executive acknowledges that if he
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breaches Section 9 (Non-Compete/No Solicitation) of this Agreement or engages in
serious misconduct that is contrary to written policies of Xxxx Atlantic and is
harmful to any Xxxx Atlantic Company or its reputation, he may forfeit any
balance remaining in any Company Contribution sub-account contained within his
account under the IDP.
17. Waiver. Failure to insist upon strict compliance with any of the
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terms, covenants or conditions of this Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
18. Additional Remedies. In addition to any other rights or remedies,
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whether legal, equitable or otherwise, which each of the parties may have, the
Key Executive acknowledges that Sections 9 (Non-Compete/No Solicitation), 10
(Return of Property), 11 (Proprietary and Confidential Information), and 12
(Nondisclosure) of this Agreement are essential to the continued good will and
profitability of Xxxx Atlantic and further acknowledges that the application and
operation thereof shall not involve a substantial hardship upon the Key
Executive's future livelihood. The parties hereto further recognize that
irreparable damage to Xxxx Atlantic will result in the event that these sections
of the Agreement are not specifically enforced and that monetary damages will
not adequately protect Xxxx Atlantic from a breach of these sections of the
Agreement. If any dispute arises concerning the violation by the Key Executive
of these sections of the Agreement, the parties hereto agree that an injunction
may be issued restraining such violation pending the determination of such
controversy, and no bond or other security may be required in connection
therewith.
19. Reformation and Severability. The Key Executive and Xxxx Atlantic
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agree that the agreements contained herein and within the Release shall each
constitute a separate agreement independently supported by good and adequate
consideration, and shall each be severable from the other provisions of the
Agreement and the Release. If an arbitrator or court of competent jurisdiction
determines that any term, provision or portion of this Agreement or the Release
is void, illegal or unenforceable, the other terms, provisions and portions of
this Agreement or the Release shall remain in full force and effect and the
terms, provisions and portions that are determined to be void, illegal or
unenforceable shall either be limited so that they shall remain in effect to the
extent permissible by law, or such arbitrator or court shall substitute, to the
extent enforceable, provisions similar thereto or other provisions, so as to
provide to Xxxx Atlantic, to the fullest extent permitted by applicable law, the
benefits intended by this Agreement and the Release.
20. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if delivered by hand or
messenger, transmitted by telex or telegram or mailed by registered or certified
mail, return receipt requested and postage prepaid, as follows:
(a) If to Xxxx Atlantic, to:
Xxxx Atlantic Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice President
and General Counsel
(b) If to the Key Executive, to:
000 Xxxx Xx.
Xxxxxxxxxx, Xxxxxxxx 00000
or to such other person or address as either of the parties shall hereafter
designate to the other from time to time by similar notice.
21. Arbitration. Any dispute arising out of or relating to this
-----------
Agreement, except any dispute arising out of or relating to Sections 9 through
12 of this Agreement, shall be settled by final and binding arbitration, which
shall be the exclusive means of resolving any such dispute, and the parties
specifically waive all rights to pursue any other remedy, recourse or relief.
With respect to disputes by Xxxx Atlantic arising out of or relating to Sections
9 through 12 of this Agreement, Xxxx Atlantic has retained all its rights to
legal and equitable recourse and relief, including but not limited to injunctive
relief, as referred to in Section 18 of this Agreement. Notice of the existence
of a dispute which a party wishes to have resolved by arbitration shall be
provided pursuant to Section 20 of this Agreement. The arbitration shall be
expedited and conducted in New York, New York pursuant to the Center for Public
Resources ("CPR") Rules for Non-Administered Arbitration of Employment Disputes
in effect at the time of notice of the dispute before one neutral arbitrator
appointed by CPR from the CPR Panel of Neutrals unless the parties mutually
agree to the appointment of a different neutral arbitrator. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16,
and judgment upon the award rendered by the arbitration may be entered by any
court having jurisdiction. The finding of the arbitrator may not change the
express terms of this Agreement and shall be consistent with the arbitrator's
understanding of the findings a court of proper jurisdiction would make in
applying the applicable law to the facts underlying the dispute. In no event
whatsoever shall such an arbitration award include any award of damages other
than the amounts in controversy under this Agreement. The parties waive the
right to recover, in such arbitration, punitive damages.
22. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of New York.
23. Entire Agreement. Except for the terms of other compensation and
----------------
benefit plans in which the Key Executive participates, this Agreement shall set
forth the entire understanding of Xxxx Atlantic and the Key Executive and shall
supersede all prior agreements and communications, whether oral or written,
between Xxxx Atlantic and the Key Executive including, without limitation, the
Prior Agreement. This Agreement shall not be modified except by written
agreement of the Key Executive and Xxxx Atlantic.
24. Tax Withholding. Any payment made pursuant to this Agreement will be
---------------
subject to applicable withholding taxes under federal, state and local law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first set forth above.
XXXX ATLANTIC CORPORATION
By:
-----------------------------
Xxxx Xxxxxxxxxx
Chief Executive Officer
THE KEY EXECUTIVE
------------------
Xxxxx X. Xxxxxx
EXHIBIT A
---------
THIS RELEASE (the "Release") is entered into by _____________________ (the
"Key Executive"), for the benefit of XXXX ATLANTIC CORPORATION (the "Company"),
and all companies, and their officers, directors and employees, which are
affiliated with the Company or in which the Company owns a substantial economic
interest, and any benefit plan maintained by any Xxxx Atlantic Company (or any
plan administrator of any such plan). Capitalized terms in this document which
are not otherwise defined herein shall have the respective meanings assigned to
them in the Employment Agreement between the Company and the Key Executive,
dated ____________, _____ (the "Agreement").
WHEREAS, the Key Executive has separated from service with the Key
Executive's employing company (the "Employer") on __________ , _____ (the
"Separation Date") pursuant to the terms of the Agreement, and the Key Executive
wishes to execute this Release as contemplated under the terms of the Agreement.
NOW, THEREFORE, the Key Executive affirms as follows:
1. The Key Executive hereby waives any and all claims which the Key
Executive might have against any Xxxx Atlantic Company, and any benefit plan
maintained by any Xxxx Atlantic Company (or any plan administrator of any such
plan), for salary payments, vacation pay, incentives, bonuses, or other
remuneration or employee benefits of any kind, with the exception of any
obligations of the Company or Employer arising after the Separation Date under
Sections 7 and 8 of the Agreement.
2. Except as provided in Section 1 hereof, the Key Executive hereby
voluntarily releases and discharges each and every Xxxx Atlantic Company and
their successors and assigns, and the directors, officers, employees, and agents
of each of them, and any benefit plan maintained by any Xxxx Atlantic Company
(or any plan administrator of any such plan), of and from any and all debts,
obligations, claims, demands, judgments or causes of action of any kind
whatsoever, known or unknown, in tort, contract, by statute or on any other
basis, for equitable relief, compensatory, punitive or other damages, expenses
(including attorneys' fees), reimbursements or costs of any kind which the Key
Executive might have or assert against any of said entities or persons as of the
Separation Date by reason of the Key Executive's employment by any Xxxx Atlantic
Company or the termination of said employment, and all circumstances related
thereto, including but not limited to, any and all claims, demands, rights and
causes of action, including those which might arise out of allegations relating
to a claimed breach of an alleged oral or written employment contract, or
relating to purported employment discrimination or civil rights violations, such
as, but not limited to, those arising under Title VII of the Civil Rights Act of
1964 (42 U.S.C. Section 2000e et seq.), the Civil Rights Acts of 1866 and 1871
-- ---
(42 U.S.C. Sections 1981 and 1983), Executive Order 11246, as amended, the Age
Discrimination in Employment Act of 1967, as amended (29 U.S.C. Section 621 et
--
seq.), the Equal Pay Act of 1963 (29 U.S.C. Section 206(d)(1)), the
---
Rehabilitation Act of 1973 (29 U.S.C. Sections 701-794), the Civil Rights Act of
1991, the Americans with Disabilities Act, the Employee Retirement Income
Security Act ("ERISA") or any other applicable federal, state or local
employment discrimination statute or ordinance.
3. The Key Executive hereby reaffirms all covenants and promises given by
the Key Executive under the Agreement, and all other terms and conditions of the
Agreement, in all respects.
4. Should any provision of this Release be declared or be determined by
any court to be illegal or invalid, the validity of the remaining parts, terms
or provisions shall not be affected thereby, and said illegal or invalid part,
term or provision shall be deemed not to be a part of this Release.
STATEMENT BY THE KEY EXECUTIVE WHO IS SIGNING BELOW: THE COMPANY HAS
---------------------------------------------------
ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
RELEASE. THE COMPANY HAS FULFILLED ITS DUTIES TO ME UNDER THE OLDER WORKERS
BENEFITS PROTECTION ACT, AND I ACKNOWLEDGE THAT THIS RELEASE IS LEGALLY
ENFORCEABLE BY THE COMPANY. I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE
PROVISIONS OF THIS RELEASE AND HAVE HAD SUFFICIENT TIME AND OPPORTUNITY (OVER A
PERIOD OF SUBSTANTIALLY MORE THAN 21 DAYS) TO CONSULT WITH MY PERSONAL TAX,
FINANCIAL AND LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT, AND I INTEND TO
BE LEGALLY BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE THIS RELEASE
WITHIN SEVEN (7) DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL NOT BECOME
ENFORCEABLE OR EFFECTIVE UNTIL THAT SEVEN-DAY PERIOD HAS EXPIRED.
THE UNDERSIGNED, intending to be legally bound, has executed this Release
as of the ___ day of _________, _____, that being the Key Executive's Separation
Date.
THE KEY EXECUTIVE
Signed:
------------------------------
THIS IS A RELEASE
READ CAREFULLY BEFORE SIGNING
EXHIBIT B
---------
Determination of Gross-Up Payment. In the event that any payment
---------------------------------
or benefit received or to be received by the Key Executive pursuant to the terms
of the Agreement (the "Contract Payments") or of any other plan, arrangement or
agreement of any Xxxx Atlantic Company ("Other Payments" and, together with the
Contract Payments, the "Payments") would be subject to the excise tax (the
"Excise Tax") imposed by section 4999 of the Internal Revenue Code (the "Code")
as determined in accordance with this paragraph, Xxxx Atlantic shall pay to the
Key Executive, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Key Executive, after
deduction of the Excise Tax on Payments and any federal, state and local income
tax and the Excise Tax upon the Gross-Up Payment, and any interest, penalties or
additions to tax payable by the Key Executive with respect thereto, shall be
equal to the total present value (using the applicable federal rate (as defined
in Section 1274(d) of the Code) in such calculation) of the Payments at the time
such Payments are to be made. For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) the total amount of the Payments shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, except to the extent that, in the written opinion
of independent counsel selected by Xxxx Atlantic and reasonably acceptable to
the Key Executive ("Independent Counsel"), a Payment (in whole or in part) does
not constitute a "parachute payment" within the meaning of section 280G(b)(2) of
the Code, or such "excess parachute payments" (in whole or in part) are not
subject to the Excise Tax; (ii) the amount of the Payments that shall be treated
as subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Payments or (B) the amount of "excess parachute payments" within
the meaning of section 280G(b)(1) of the Code (after applying clause (i)
hereof); and (iii) the value of any noncash benefits or any deferred payment or
benefit shall be determined by Independent Counsel in accordance with the
principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Key Executive shall be
deemed to pay federal income taxes at the highest marginal rates of federal
income taxation applicable to individuals in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation applicable to individuals as are in effect in the
state and locality of the Key Executive's residence in the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals subject to
federal income tax at the highest marginal rates.
Timing of Gross-Up Payment. The Gross-Up Payments provided for in
--------------------------
this Exhibit B shall be made upon the earlier of (i) the payment to the Key
Executive of any Payment or (ii) the imposition upon the Key Executive or
payment by the Key Executive of any Excise Tax.
Adjustments to Gross-Up Payment. If it is established pursuant to a
--------------------------------
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, the Key Executive shall repay to
Xxxx Atlantic within thirty (30) days of
the Key Executive's receipt of notice of such final determination or opinion the
portion of the Gross-Up Payment attributable to such reduction (plus the portion
of the Gross-Up Payment attributable to the Excise Tax and federal, state and
local income tax imposed on the Gross-Up Payment being repaid by the Key
Executive if such repayment results in a reduction in Excise Tax or a federal,
state and local income tax deduction) plus any interest received by the Key
Executive on the amount of such repayment, provided, however, that if any such
amount has been paid by the Key Executive as an Excise Tax or other tax, the Key
Executive shall cooperate with Xxxx Atlantic in seeking a refund of any tax
overpayments, and shall not be required to make repayments to Xxxx Atlantic
until the overpaid taxes and interest thereon are refunded to the Key Executive.
If it is established pursuant to a final determination of a court or an Internal
Revenue Service proceeding or the written opinion of Independent Counsel that
the Excise Tax exceeds the amount taken into account hereunder (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), Xxxx Atlantic shall make an additional Gross-
Up Payment in respect of such excess within thirty (30) days of Xxxx Atlantic's
receipt of notice of such final determination or opinion.
Change in Law or Interpretation. In the event of any change in, or
--------------------------------
further interpretation of, sections 280G or 4999 of the Code and the regulations
promulgated thereunder, the Key Executive shall be entitled, by written notice
to Xxxx Atlantic, to request a written opinion of Independent Counsel regarding
the application of such change to any of the foregoing, and Xxxx Atlantic shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable. All fees and expenses of Independent Counsel incurred in connection
with this Exhibit B shall be borne by Xxxx Atlantic.
