Exhibit (10) (iii)(A)19
EMPLOYMENT AGREEMENT
THIS AGREEMENT, effective August 9, 1993, by and between
the American Telephone and Telegraph Company, A New York
Corporation with its headquarters at 32 Avenue of the Americas,
Xxx Xxxx, Xxx Xxxx 00000 (hereinafter called the"Company"), and
Xxxxxxx X. Xxxxxx (hereinafter called the "Employee").
WHEREAS the Employee has accepted employment with the
Company; and
WHEREAS the Company has assigned and appointed the
Employee to a Senior Management position as Executive Vice
President and Chief Financial Officer of the Company, and in
this capacity, Employee will be a member of the Operations
Committee and the Management Executive Committee and will
report directly to the Chairman of the Board and Chief
Executive Officer of the Company.
NOW, therefore, for and in consideration of the promises
and the mutual agreements hereinafter contained, the Company
and Employee do hereby agree as follows:
1. EMPLOYMENT. Subject to the provisions set forth
elsewhere in this Agreement, the Company hereby employs the
Employee and the Employee hereby accepts employment with the
Company as a Senior Manager for the term set forth in Section 2
of this Agreement. Employee represents and warrants that there
are no agreements or arrangements, whether written or oral, in
effect which would prevent him from rendering exclusive
services to the Company during the term hereof, and that he has
not made and will not make any commitment, agreement or
arrangement, or do any act in conflict with this Agreement.
Such employment shall be upon the terms and conditions
hereinafter contained.
2. TERM OF AGREEMENT. The term of employment hereunder
shall be at the will of each party to this Agreement and
subject to the terms and conditions thereof commencing on
August 9, 1993. Except as expressly set forth herein, the
Employee shall have no further rights or entitlements beyond
the terms of this Agreement, including but not limited to the
right of continued employment.
3. EMPLOYEE'S COMPENSATION AND BENEFITS. Except as
otherwise provided in this Agreement and as more fully set
forth hereinbelow, the Employee shall be treated in the same
manner as and be entitled to such benefits and other
perquisites and terms and conditions of employment as other
Senior Managers of the Company at a similar level and with
comparable responsibilities.
(a) BASE SALARY. The Company agrees to pay and
the Employee agrees to accept for services to be rendered
hereunder and during the term of this Agreement a base salary
of not less
than $540,000.00 per year, payable in installments on a monthly
or other periodic basis in accordance with the prevailing
payroll practices of the Company.
(b) PERQUISITES. During the term of this
Agreement, the Company shall (i) provide the Employee with
perquisites of employment as are commonly provided to an
Employee of the Company at a similar level and with comparable
responsibilities, and (ii) reimburse the Employee for
reasonable and necessary business expenses incurred in
connection with his employment, in accordance with employee
business expense practices applicable to employees of the
Company at a similar level and with comparable
responsibilities.
(c) BENEFITS. Subject to the terms and provisions
of this Agreement, the Employee shall be entitled to coverage
under or benefits in accordance with those employee and Senior
Management benefit plans and programs as are made available, or
which may subsequently become applicable, to other Senior
Managers of the Company at comparable levels. The Employee
shall be entitled to five (5) weeks of annual vacation
applicable to 1993 and subsequent years. The Employee shall
also be entitled to relocate under the terms of the AT&T
Management Relocation Plan.
(d) INCENTIVE PLANS. During the term of this
Agreement, the Employee will be eligible for consideration for
both long and short term awards pursuant to the terms of the
Company's 1987 Long Term Incentive Program and short-term
annual incentive arrangements, respectively, (the "Incentive
Plans") under the terms of such Incentive Plans as are in
effect from time to time. Short-term annual incentives for
AT&T Senior Managers currently take the form of AT&T
Performance Awards (APA), Merit Awards (MA), Unit Performance
Funding (UPF), and Superior Achievement Awards (SAA). Both the
UPF and SAA programs are newly instituted in 1993. Award
levels under the APA, UPF and SAA programs are predicated on
overall corporate performance and award levels under the MA
program are determined by individual and team contributions.
The Incentive Plans are designed to address the conditions of
an ever-changing marketplace. Accordingly, the Company cannot
guarantee the continuation of the current Incentive Plan
format. Moreover, except as detailed in the next two sentences
(for the APA/MA/UPF and SAA) and the following paragraph (for
Performance Shares and Stock Options), the Company cannot make
a definitive representation regarding the size, if any, of
individual Incentive Plan awards in any given year. Employee's
1993 Short Term incentives payable in 1994 will not be prorated
to reflect partial service in 1993. Moreover, the sum of all
annual cash incentives (i.e. APA/MA/UPF/SAA) paid to Employee
in 1994 for 1993 performance will not be less than $250,000.
The Company will award 7,397 Performance Shares to the
Employee as of the effective date of this Agreement under the
Company's 1987 Long Term Incentive Program covering the 1993-
1995 performance period. In addition and in accordance with
the terms of this award, the Employee shall receive quarterly
Dividend Equivalents with payment to begin November 1, 1993.
Distributions of Long Term Performance Shares will be in
accordance with the applicable 1987 Long Term Incentive Program
and award provisions. Also, as of the effective date of this
Agreement, 25,880 Stock Options will be granted to the Employee
under the Company's 1987 Long Term Incentive Program. In
addition to the above awards of Performance Shares and Stock
Options which represent the 1993 standard grants to a Senior
Manager at Employee's level, Employee will be granted: (1)
8,932 Performance Shares attributable to the 1991-1993
performance period and 8,932 Performance Shares attributable to
the 1992-94 performance period. Employee shall receive
quarterly Dividend Equivalents on these special Performance
Share Awards. (2) 50,000 Stock Options, one-third (1/3) of
which will vest on the first anniversary, one-third (1/3) on
the second and the final one-third (1/3) on the third
anniversary of such special grant.
(e) SUCCESSOR PLANS AND PROGRAMS. The
compensation, incentive and employee/Senior Management benefit
and perquisite plans, programs, and practices outlined in this
Agreement reflect their current provisions. The Company
reserves the right to modify, suspend, change or terminate any
such plans, programs or practices at any time. In the event
that after the date of this Agreement the Company establishes
any new, replacement or additional pension, retirement,
disability or annuity plans, programs or practices of incentive
compensation for Senior Managers of the Company at comparable
levels, the Employee shall also be eligible, at the Company's
discretion, for coverage under such pension, retirement,
disability and annuity plans, programs or incentive
compensation practices in accordance with the terms thereof.
4. SPECIAL PENSION ARRANGEMENT.
In the event the Employee's employment is
terminated, pursuant to any Employee or Company initiated
termination for any reason other than disability or "Cause,"
eight years or more after the effective date of this Agreement,
the Company agrees to provide an immediate special pension
benefit based on actual Company Net Credited Service and
calculated under the then-existing Company qualified and non-
qualified pension formulas (including the AT&T Mid-Career
Pension Plan formulas), but without reference to age and
service eligibility requirements. Non-qualified pension
benefits included in the calculation of this special benefit
pension would include the AT&T Non-Qualified Pension Plan and
the AT&T Mid-Career Pension Plan (but specifically would
exclude the Minimum Retirement Benefit and Surviving Spouse
Benefit payable under the AT&T Senior Management Long-Term
Disability and Survivor Protection Plan). The special pension
benefit amount which results from the application of the AT&T
Management Pension Plan formula shall be used as an offset in
the calculation of the benefit payable under the alternate
formula of the AT&T Non-Qualified Pension Plan. Special
pension benefit payments shall be paid to the Employee from
Company operating income. The total pension amount which
results from application of this Section 4 will be reduced by
all amounts actually received by Employee under any other AT&T
or subsidiary or affiliated company's qualified or non-
qualified pension, retirement, disability or annuity plan,
program or practice, except the AT&T Long-Term Savings Plan for
Management Employees and the AT&T Senior Management Incentive
Award Deferral Plan. Pension benefits payable under this
Section 4 will be afforded the same "ad hoc" inflation
adjustments as may be applicable to the AT&T Non-Qualified
Pension Plan from time to time. Moreover, Employee's Company-
paid Senior Management Basic Life Insurance Program ("SMBLIP")
benefit, equal to one times base salary, will be maintained
after such termination as if Employee was eligible for a
Service Pension under the AT&T Management Pension Plan. All
other terms and conditions of the SMBLIP will continue to
apply. Moreover, and following a termination under this
Section 4, Employee will be entitled to the following post-
termination ancillary entitlements, administered in a manner
consistent with the then-current (i.e., at Employee's
termination of employment and thereafter) treatment of Service
Pension eligible Senior Managers and in accordance with the
terms and conditions applicable to each Senior Management plan
or practice:
- COBRA entitlements (as mandated by Federal statutes)
- Continuation of outstanding Company Stock Options
and Performance Shares and continuation of Senior
Management Telephone Concession Service, may be
provided but only to the extent such benefits are
provided to Service Pension eligible Senior Managers
at the time Employee terminates employment with the
Company.
5. SPECIAL RELOCATION PROVISION. Employee will be
eligible for a special capital loss provision which provides a
capital loss benefit equal to the lesser of $200,000 or the
actual capital loss sustained by Employee. This amount will be
grossed-up for income tax purposes in accordance with the
provisions of the AT&T Management Relocation Plan (AT&TMRP).
Eligible improvements will be determined in accordance with
AT&TMRP provision but ignoring the 50% constraint. Any capital
loss benefits payable under the terms of the AT&TMRP are
offsets to this special capital loss provision.
6. POWERS AND DUTIES. The Employee shall devote his
full time, interests and abilities to the performance of duties
under this Agreement, it being understood in connection
therewith that he may, in his discretion and subject to not
interfering with his duties and responsibilities hereunder,
devote time to civic, public and professional activities and
may serve as a Director of other business corporations not
engaged in competition with the Company or any subsidiary or
affiliate of the Company; provided, however, that he shall not
accept directorships on more than three boards of other
business corporations; and provided, further, that for purposes
of the immediately preceding clause, directorships on the
boards of two or more companies with at least 50% common
ownership shall count as a single company.
7. OPERATION OF AGREEMENT. Notwithstanding any other
term or provision to the contrary, all rights, benefits and
entitlements available under and in accordance with the terms
of this Agreement, except for those provided in Sections 4 and
9, are contingent and dependent upon the Employee maintaining
and continuing employment as a Senior Manager of the Company.
8. RESTRICTIVE COVENANTS.
(a) COMPETITION. Notwithstanding any other
provisions of this Agreement, any and all payments (except
those made from Company-sponsored Tax Qualified Pension or
Welfare Plans), benefits or other entitlements to which the
Employee may be eligible in accordance with the terms hereof,
may be forfeited, whether or not in pay status, at the
discretion of the Company, if the Employee, at any time without
the consent of the Company is employed by, becomes associated
with, renders service to, or owns an interest in any business
that is competitive with the Company, any subsidiary or
affiliate of the Company, or any business in which the Company
or any such subsidiary or affiliate has a substantial interest
(other than as a shareholder with a non-substantial interest in
such business), all as determined by the Company.
(b) CONFIDENTIALITY. The Employee agrees that he
will not, at any time during his employment pursuant to this
Agreement or thereafter, disclose or use any trade secret,
proprietary or confidential information of the Company or any
subsidiary or affiliate of the Company, obtained during the
course of his employment, except as required in the course of
such employment or with the written permission of the Company
or, as applicable, any subsidiary or affiliate of the Company.
Further, the Employee agrees not to disclose or discuss the
terms and provisions of this Agreement with anyone except for
his legal and financial advisors and members of his immediate
family.
The Employee agrees that at the time of the
termination of his employment with the Company, whether at the
instance of the Employee or the Company, and regardless of the
reasons therefore, he will deliver to the Company, and not keep
or deliver to anyone else, any and all notes, files, memoranda,
papers and, in general, any and all physical matter containing
information, including any and all documents significant to the
conduct of the business of the Company or any subsidiary or
affiliate of the Company, except for any documents for which
the Company or any subsidiary or affiliate of the Company has
given written consent to removal at the time of the termination
of the Employee's employment.
(c) Violation by the Employee of any of the
provisions of this Section 8 may result, at the discretion of
the Company, in the cancellation of all rights and entitlements
of the Employee hereunder and shall give the Company any other
rights it may have under applicable law to restrict the use of
any information and/or documents and/or for the return of any
such information and/or documents.
9. TERMINATION PROVISIONS.
(a) If at any time during the period beginning from
the effective date of this Agreement and ending three years
thereafter, Employee is terminated by the Company for any
reason other than Cause or disability the Employee will be
entitled to:
(i) If Employee is terminated during the
first twenty-four months, Employee will
receive the higher of (1) $1,080,000 or
(2) 200% of Employee's annual base
salary rate in effect as of the date of
Employee's termination;
(ii) If Employee is terminated during the 12-
month period subsequent to Employees
initial 24 months of service, Employee
will receive an amount determined in
accordance with the following schedule:
THE GREATER OF:
PERCENT OF
TERMINATION ANNUAL
IN MONTH DOLLARS BASE SALARY
25 $1,020,600 189
26 961,200 178
27 907,200 168
28 858,600 159
29 810,000 150
30 761,400 141
31 718,200 133
32 680,400 126
33 642,600 119
34 604,800 112
35 572,400 106
36 540,000 100
(b) The Company may terminate the Employee for
Cause after written notice specifying the cause of such action
shall have been given to Employee by the Company. For purposes
of this Agreement, Cause shall mean:
(i) Employee's breach of any of the terms of
this Agreement;
(ii) Employee's conviction (including a plea
of guilty or nolo contendere) of a
felony or any crime of theft, dishonesty
or moral turpitude;
(iii) Gross omission or gross dereliction of
any statutory or common law duty of
loyalty to the Company.
(c) If the Employee terminates his employment with
the Company at any time for personal or other reasons or if
Employee dies or is terminated because of long-term disability
or is terminated by the Company for Cause, as specified in
Section 9(b) hereinabove, and except as provided in Section 4
of this Agreement, he will be treated in the same manner as any
other Senior Manager of the Company without reference to any
provision of this Agreement.
(d) Any payments made pursuant to this Section 9
are subject to: (1) the provisions, restrictions and
limitations of Section 8 above, (2) the AT&T Non-Competition
Guideline, (3) payable in twelve (12) equal monthly
installments commencing the month after the month of
termination and (4) subject to Employee signing a standard
Release and Agreement not to xxx the Company. The form of such
Release and Agreement will be that then in use by the Company
in connection with terminated Senior Managers.
10. DISPUTE RESOLUTION. At the option of the Employee or
the Company, any dispute, controversy, or question arising
under, out of or relating to this Agreement or the breach
thereof, shall be referred for decision by arbitration in the
State of New Jersey 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 thirty (30) days after each
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 the appointment of a neutral
arbitrator, or, if such Association is not then in existence or
does not desire to act in the matter, either party may apply to
the Presiding Judge of the Superior Court of any county in New
Jersey for the 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 binding on
all interested persons and no action at law or in equity shall
be instituted or, if instituted, further prosecuted by either
party other than to enforce the award of the neutral
arbitrator.
In the event that the Employee is successful in pursuing
any claim or dispute arising out of this Agreement, the Company
shall pay all of the Employee's attorneys' fees and costs,
including the compensation and expenses of any Arbitrator,
unless (1) the Arbitrator, or any court in which litigation is
filed, finds the Company to be without liability on material
issues raised or (2) the dispute or lawsuit is frivolous in
nature. In any other case, the Employee and the Company shall
each bear all their own costs and attorney fees, except that
the Company shall pay the costs of any Arbitrator appointed
hereunder.
11. ASSIGNMENT.
(a) EMPLOYEE. This Agreement is a personal
contract and the rights and interests of the Employee hereunder
may not be sold, transferred, assigned, pledged or hypothecated
by him.
(b) COMPANY. This Agreement shall inure to the
benefit of and be binding upon the Company, its successors and
assigns, including but not limited to any subsidiary or
affiliate of the Company to which the Employee may be employed
or assigned, by or with the consent of the Company. If the
Employee is assigned to or becomes employed by any subsidiary
or affiliate of the Company during the term of this Agreement,
such subsidiary or affiliate shall be considered to have been
assigned all rights of the Company and accepted all obligations
of the Company hereunder.
12. TAXES. It is understood that all payments and
benefits provided under this Agreement are subject to
withholding for applicable federal, state and local income (or
similar) taxes.
13. ENTIRE AGREEMENT ;AMENDMENTS. This Agreement
comprises 13 pages, 15 Sections and an Appendix which
represents the entire Agreement between Employee and the
Company in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or
representative of any party hereto. No amendments or
modifications to this Agreement may be made except in writing
signed by the Company, through its authorized representative,
and the Employee.
14. SEVERABILITY. If any provisions of this Agreement
shall be invalid or unenforceable, such invalidity or
unenforceability shall not invalidate or render unenforceable
this entire Agreement, but rather this entire Agreement shall
be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and
obligations of the parties shall be construed and enforced
accordingly.
15. GOVERNING LAW. This Agreement shall be construed
and enforced in accordance with the laws of the State of New
Jersey, without reference to any applicable conflict of law
provisions.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement and the Company has affixed its corporate seal as of
the day and year first above written.
Company:
By: ______________________
X. X. Xxxxxxxxxx
Date: ______________________
Witnessed:______________________
Date: ______________________
Employee:______________________
Xxxxxxx X. Xxxxxx
Date: ______________________
Witnessed:______________________
Date: ______________________
