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EXHIBIT 10.2
EMPLOYMENT AGREEMENT
AGREEMENT by and between Tele-Communications, Inc., a Delaware
corporation (the "Company" or "TCI), and Xxxxxx Xxxxx (the "Executive"), dated
as of the 14th day of July, 1999 (the "Effective Date").
WHEREAS, the Executive is employed as of the Effective Date by the
Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is in the best interests of the Company and its shareholders
to employ the Executive and the Executive desires to serve in that capacity;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
Executive shall serve the Company, on the terms and conditions set forth in
this Agreement, for the Employment Period (as defined in the next sentence).
The "Employment Period" shall mean the period beginning on the Effective Date
and ending on March 31, 2000, unless earlier terminated as set forth herein.
2. Position and Duties. (a) During the Employment Period, the
Executive shall serve in the position and have the duties and responsibilities
set forth on Exhibit A hereto.
(b) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive shall
devote reasonable attention and time during normal business hours to the
business and affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Executive under this Agreement, use the
Executive's reasonable best efforts to carry out such responsibilities
faithfully and efficiently. It shall not be considered a violation of the
foregoing for the Executive to (A) serve on corporate, civic or charitable
boards or committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the
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performance of the Executive's responsibilities as an employee of the Company
in accordance with this Agreement.
(c) The Executive's services shall be performed primarily at the
principal office location where the Executive performed his duties immediately
prior to the Effective Date (or otherwise within 35 miles of such office),
subject to any travel requirements necessary to perform his duties hereunder.
3. Compensation. (a) Base Salary. During the Employment Period, the
Executive shall be paid an annual base salary ("Annual Base Salary") at a rate
equal to the rate set forth on Exhibit B hereto, payable pursuant to the
Company's normal payroll practices.
(b) Benefits. During the Employment Period, the Executive shall be
entitled to participate in savings and welfare benefit plans, practices,
policies and programs of the Company that are provided generally to similarly
situated employees of the Company.
(c) Expenses. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable business expenses
incurred by the Executive in accordance with the Company's policies, practices
and procedures.
(d) Vacation. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the plans, policies, programs and
practices of the Company.
(e) TCI Equity Awards. Effective as of the Effective Date, the
Company shall accelerate the vesting of the Executive's outstanding unvested
stock options and shares of restricted stock that are set forth on Exhibit C
hereto (the "Exhibit C Grants"). All remaining stock options and restricted
stock initially granted to the Executive with respect to the Company or Liberty
Media Corporation prior to the Effective Date, which do not become vested
pursuant to the immediately preceding sentence ("Remaining TCI Awards"), shall
continue to vest during the Employment Period pursuant to their scheduled
vesting terms and, if not previously vested, shall become immediately vested on
March 31, 2000. In the event the Executive exercises a stock option or sells a
share of stock that had been restricted stock (in
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each case, that was an Exhibit C Grant or Remaining TCI Award) within 60 days
after the earlier of (i) the vesting of such stock option or share of restricted
stock pursuant to the terms of such award or (ii) March 31, 2000 (or any earlier
vesting date under this Agreement), the Company shall pay the Executive, with
respect to each such stock option or share, a cash payment (the "Equity
Payment"), within 10 days following the exercise of the stock option or sale of
stock, equal to the excess, if any, of: (A) with respect to Exhibit C Grants or
Remaining TCI Awards denominated in AT&T Corp. common stock, $57.81 over the
average of the high and low price of AT&T Corp. common stock on the New York
Stock Exchange on the date of such exercise or sale, as applicable, and (B) with
respect to Exhibit C Grants or Remaining TCI Awards denominated in "AT&T Liberty
Tracking Shares," $26.67 over the average of the high and low price of AT&T
Liberty Tracking Shares on the New York Stock Exchange on the date of such
exercise or sale, as applicable. Each Equity Payment amount shall be subject to
equitable adjustment in the event of any adjustment in the capitalization of
AT&T Corp. (e.g., stock split, spin-off, extraordinary dividend, reorganization
or similar corporate transaction, including any adjustments relating to the AT&T
Liberty Tracking Shares) which occurs following the Effective Date and prior to
the date of any such exercise or sale.
(f) Supplemental Payment. Except as otherwise provided in Section
5(b) of this Agreement, the Company shall pay the Executive a lump sum cash
payment equal to the amount set forth on Exhibit D hereto (the "Supplemental
Payment") within 30 days following the expiration of the Employment Period or
pursuant to the provisions of Section 5 of this Agreement.
4. Termination of Employment. (a) Death or Disability. The Executive's
employment shall terminate automatically upon the Executive's death during the
Employment Period. The Company shall be entitled to terminate the Executive's
employment because of the Executive's Disability during the Employment Period.
"Disability" means that (i) the Executive is unable to perform the Executive's
duties under this Agreement for a period of not less than 180 consecutive days,
as a result of physical or mental illness or injury, and (ii) a physician
selected by the Company or its insurers, and acceptable to the Executive or the
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Executive's legal representative, has determined that the Executive's
incapacity is total and permanent. A termination of the Executive's employment
by the Company for Disability shall be communicated to the Executive or the
Executive's legal representative by written notice, and shall be effective on
the 10th day after receipt of such notice by the Executive or the Executive's
legal representative (the "Disability Effective Date").
(b) By the Company. The Company may terminate the Executive's
employment during the Employment Period for Cause or without Cause. "Cause"
shall mean illegal conduct or gross misconduct by the Executive, in either case
that is willful and results in material and demonstrable damage to the business
or reputation of the Company or any of its affiliates.
(c) By the Executive. (i) The Executive may terminate employment for
Good Reason or without Good Reason. "Good Reason" means, without the
Executive's written consent:
A. the Company's assignment to the Executive of any duties
inconsistent in any material respect with the duties described in
Exhibit A of this Agreement; provided, that a diminution or
reduction in the Executive's duties, responsibilities or authority
shall not be a basis for Good Reason;
B. any failure by the Company to comply with any material
provision of Section 3 of this Agreement;
C. any requirement by the Company that the Executive's services be
rendered primarily at a location or locations other than that
provided for in Section 2(c) of this Agreement; or
D. any failure by the Company to comply with Section 10(c) of this
Agreement.
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An isolated, insubstantial and inadvertent failure or action by the Company
that is not taken in bad faith and is remedied by the Company promptly after
receipt of notice thereof from the Executive shall not be a basis for Good
Reason. A termination of employment by the Executive for Good Reason shall be
effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth in reasonable detail the
specific conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement upon which the Executive is relying. A
termination of employment by the Executive for Good Reason shall be effective
(unless disputed by the Company) on the fifth business day following the date
when the Notice of Termination for Good Reason is received by the Company,
unless the notice sets forth a later date (which date shall in no event be later
than 30 days after the notice is received by the Company).
(d) Date of Termination. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date, the date on which the
termination of the Executive's employment by the Company or by the Executive for
Good Reason is effective, or the last day the Executive provides services under
this Agreement, in the case of the Executive's termination of employment without
Good Reason, as the case may be.
5. Obligations of the Company upon Termination. Following the
Executive's Date of Termination, the Company shall have the obligations to the
Executive set forth in this Section 5, and shall have no further obligations
under this Agreement, other than, if applicable, any obligations to reimburse
expenses due to the Executive under Section 3(c) or to make an Equity Payment
to the Executive under Section 3(e).
(a) Other Than for Cause; Death or Disability; Good Reason. If,
during the Employment Period, the Company terminates the Executive's
employment, other than for Cause, or the Executive's employment is terminated
because of death or Disability, or the Executive terminates employment for Good
Reason, the Company shall make the payments and provide the benefits set forth
in (i) and (ii) below. In addition, if the Executive's employment is terminated
by the Company other than for Cause or Disability, or by the Executive for Good
Reason, the Company shall provide the Executive with reasonable
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outplacement services. The payments and benefits provided pursuant to this
Section 5(a) are intended as liquidated damages for a termination of the
Executive's employment by the Company other than for Cause, or for the actions
of the Company leading to a termination of the Executive's employment by the
Executive for Good Reason, or for the Executive's termination of employment as a
result of death, and shall be the sole and exclusive remedy therefor.
(i) The Company shall pay the Executive the amounts set forth below
in a lump sum in cash within 30 days following the Date of Termination:
The sum of (1) the Executive's Annual Base Salary through the
Date of Termination, (2) the value of the Executive's accrued,
but unused, vacation days, in each case to the extent not
theretofore paid (the sum of the amounts described in clauses
(1) and (2) shall be hereinafter referred to as the "Accrued
Obligations") and (3) the Supplemental Payment; and
(ii) All unvested Remaining TCI Awards shall become immediately
vested. In the event of the Executive's death or Disability, the payments under
this Section 5(a) may be made to the Executive's estate or legal
representatives, if applicable.
(b) Cause; Other than for Good Reason. If, during the Employment
Period, the Executive's employment is terminated by the Company for Cause or
the Executive voluntarily terminates employment other than for Good Reason, the
Company shall pay the Executive the Accrued Obligations in a lump sum in cash
within 30 days following the Date of Termination and, notwithstanding anything
in this Agreement to the contrary, the Company shall have no obligation to make
the Supplemental Payment, and the Remaining TCI Awards that are not vested as
of the Date of Termination shall be forfeited immediately.
6. Full Settlement. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or
other claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek
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other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced, regardless of whether the Executive obtains other
employment.
7. Confidential Information; Noncompetition; Nonsolicitation. (a) The
Executive shall hold in a fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to the Company
and its respective businesses that the Executive obtains during the Executive's
employment by the Company (before and after the Effective Date) and that is not
public knowledge (other than as a result of the Executive's violation of this
Section 7(a)) ("Confidential Information"). The Executive shall not
communicate, divulge or disseminate Confidential Information at any time during
or after the Executive's employment with the Company, except with the prior
written consent of the Company or as otherwise required by law or legal
process.
(b) For purposes of Sections 7(b), (c) and (d) the "Noncompetition
Period" means the period during which the Executive is employed by the Company
pursuant to this Agreement and 24 months after the first to occur (i) the
Executive's Date of Termination or (ii) the end of the scheduled Employment
Period. During the Noncompetition Period, the Executive shall not solicit any
business of the type engaged in by the Company from any clients, customers,
former clients or customers, or prospects of the Company who were solicited
directly by the Executive when the Executive was an employee of the Company or
with respect to which the Executive supervised, directly or indirectly, in
whole or in part, the solicitation activities related to any such persons when
the Executive was an employee of the Company.
(c) During the Noncompetition Period, the Executive shall not
solicit any business of the type engaged in by the Company from any person
whatsoever if such solicitation involves a product of the Company which the
Board deems, in its reasonable judgment, to be proprietary to the Company and
otherwise non-public.
(d) During the Noncompetition Period, the Executive shall not
induce or solicit any employee of the Company to terminate his or her
employment.
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(e) The provisions of Sections 7(b), (c) and (d) shall remain in
full force and effect until the expiration of the Noncompetition Period
notwithstanding the earlier termination of the Executive's employment
hereunder. In the event of a breach of the Executive's covenants under this
Section 7, it is understood and agreed that the Company shall be entitled to
injunctive relief, as well as any other legal remedies. For purposes of Section
7, the "Company" shall include all entities controlling, controlled by or under
common control with the Company ("affiliates").
8. Dispute Resolution. At the option of the Executive or the Company,
any dispute, controversy, or question arising under, out of or relating to this
Agreement or the breach thereof, other than that for injunctive relief to this
Agreement or the breach thereof, other than that for injunctive relief under
Section 7(e), shall be referred for decision by arbitration in the State of
Colorado by a neutral arbitrator selected by the parties hereto. The proceeding
shall be governed by the Rules of the American Arbitration Association then in
effect or such rules last in effect (in the event such Association is no longer
in existence). If the parties are unable to agree upon such a neutral arbitrator
within 30 days after either party has given the other written notice of the
desire to submit the dispute, controversy or question for decision as aforesaid,
then either party may apply to the American Arbitration Association for an
appointment of a neutral arbitrator, or if such Association is not then in
existence or does not act in the matter within 30 days of application, either
party may apply to the Presiding Judge of the District Court of any county in
Colorado for an appointment of a neutral arbitrator to hear the parties and
settle the dispute, controversy or question, and such Judge is hereby authorized
to make such appointment. In the event that either party exercises the right to
submit a dispute arising hereunder to arbitration, the decision of the neutral
arbitrator shall be final, conclusive and biding on all interested persons and
no action at law or equity shall be instituted or, if instituted, further
prosecuted by either party other than to enforce the award of the neutral
arbitrator. The award of the neutral arbitrator may be entered in any court that
has jurisdiction. In the event that the Executive is successful in pursuing any
material claim(s) or dispute(s) arising out of this Agreement, the Company shall
pay the Executive's attorney and expenses of any Arbitrator in connection with
such claims or
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disputes. In any other case, the Executive and the Company shall each bear all
their own costs and attorneys fees, except the Company shall in all events pay
the costs of any arbitrator appointed hereunder.
9. Successors. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by
the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company shall require any successors (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of its business and/or assets expressly to assume and agree
to perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession had taken
place. Except as specifically provided, herein, as used in this Agreement,
"Company" shall mean both the Company as defined above and any such successor
that assumes and agrees to perform this Agreement, by operation of law or
otherwise.
10. Miscellaneous. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall
be in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
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If to the Executive: Mr. Xxxxxx Xxxxx
00 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000.
If to the Company: Telecommunications, Inc.
c/o AT&T Corp.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Executive Vice President,
Human Resources and
Executive Vice President,
Merger and Joint Venture
Integration of AT&T Corp.
or to such other address as either party furnishes to the other in writing in
accordance with this Section 10(b). Notices and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement. If any provision of this Agreement shall be held
invalid or unenforceable in part, the remaining portion of such provision,
together with all other provisions of this Agreement, shall remain valid and
enforceable and continue in full force and effect to the fullest extent
consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement.
(f) Except as to (i) the "Special Continuees benefit program
letter" to the Executive, dated March 8, 1999, as clarified by the letter to
the Executive dated June 23, 1999, and (ii) the Tax Protection Agreement
between the Executive and the Company, dated
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as of March 1, 1999, the Executive and the Company acknowledge that this
Agreement supersedes any other agreement between them or between the Executive
and AT&T Corp. and/or any Company plan or practice (or plan or practice of
Liberty Media Corporation) concerning the subject matter hereof, including the
Company's Severance Pay Plan or any other severance policy of the Company, AT&T
Corp. or any of their affiliates (collectively, the "Severance Plans"). The
Executive hereby irrevocably waives any rights to severance benefits under the
Severance Plans or to acceleration of equity awards under the Severance Plans or
any equity award plan of the Company, Liberty Media Corporation or AT&T Corp.,
except as may be provided in this Agreement.
(g) The Executive shall be covered under the indemnification
policies of the Company applicable to similarly situated officers of the
Company.
(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand, and the Company has caused this Agreement to be executed in its name on
its behalf, all as of the day and year first above written.
/s/ XXXXXX XXXXX
----------------------------------------
[Executive]
TELE-COMMUNICATIONS, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------------------
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EXHIBIT A
JOB DESCRIPTION
XXXXXX XXXXX
EXECUTIVE VICE PRESIDENT
PRIMARY DUTIES & RESPONSIBILITIES:
Xx. Xxxxx will serve as Executive Vice President - AT&T Broadband & Internet
Services. His duties include advising Xxx Xxxxxxx on operational issues and
implementation of Digital and @Home. He will also assist Xxxx Xxxxxxxxxx on
budget, planning and special projects.
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EXHIBIT B
Xxxxxx Xxxxx
Annual Base Salary of $612,346
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EXHIBIT C
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SCHEDULE B
XXXXXX XXXXX
The following stock options will be accelerated upon the Effective Date as
defined herein:
July 23, 1997, grant (AT&T) (formerly TCOMA)
May 15, 1997, grant (AT&T) (formerly TCOMA)
July 23, 1997, grant (Liberty Media) (formerly TCIVA)
The following restricted stock grants will be accelerated upon the Effective
Date as defined herein:
None.
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GRANTS NOT ACCELERATED
XXXXXX XXXXX
The following stock options will not be accelerated upon the Effective Date:
May 15, 1997, grant (Liberty Media) (formerly TCIVA)
The following restricted stock grants will not be accelerated upon the
Effective Date:
December 10, 1998, grant (AT&T) (formerly TCOMA)
September 3, 1998, grant (AT&T) (formerly TCOMA)
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EXHIBIT D
Xxxxxx Xxxxx
2 times annual base salary ($612,346) for an amount equal to $1,224,692
