Exhibit 10n(i)
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
BETWEEN
XXXX ATLANTIC CORPORATION AND XXXXXXXX X. XXXXXX, XX.
This First Amendment to the Employment Agreement between Xxxx Atlantic
Corporation ("Xxxx Atlantic") and Xxxxxxxx X. Xxxxxx, Xx. (the "Key Employee")
dated May 2, 1995 (the "Employment Agreement") is made this 10th day of July,
1996.
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated
April 21, 1996 between Xxxx Atlantic, NYNEX Corporation ("NYNEX") and Seaboard
Merger Company, and any amendment or restatement thereof (the "Definitive
Agreement"), Xxxx Atlantic contemplates a corporate combination of the Xxxx
Atlantic and NYNEX businesses on a date which is yet to be decided (the "Closing
Date"), and Xxxx Atlantic contemplates that the achieving of the closing of the
transactions contemplated by the Definitive Agreement (a "Closing"), and a
successful combination of the two businesses, will depend on achieving numerous
approvals by third parties, completing other conditions of closing, and
developing of business integration plans, in addition to the continuation of
efforts to manage and grow the existing lines of Xxxx Atlantic's business; and
WHEREAS, Xxxx Atlantic acknowledges that the period from the date of this
Agreement to the Closing Date is likely to be a period of extraordinary
transition; and
WHEREAS, Xxxx Atlantic wishes to provide additional financial security to
the Key Employee, and to retain the services of the Key Employee as Vice
Chairman to the Closing Date.
NOW, THEREFORE, for good and valuable consideration, the Key Employee and
Xxxx Atlantic hereby agree as follows:
1. Stay Incentive.
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(a) Stay Bonus at Closing. Subject to the terms and conditions of this
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Agreement:
(1) if there is a Closing of the transactions contemplated in the
Definitive Agreement, and
(2) if the Key Employee has remained an employee "in good
standing" (as hereinafter defined) of one or more Xxxx Atlantic Companies
from the date of this Agreement to the Closing Date;
then, not later than 30 calendar days following the Closing Date, Xxxx
Atlantic will cause the Xxxx Atlantic Company which then employs the Key
Employee to pay the Key Employee a special bonus consisting of a single cash
payment (a "Stay Bonus") in an amount equal (before withholding of taxes) to
100 percent of the Key Employee's Pay as of the Closing Date. As used in this
Agreement, "Pay" means the sum of (i) an amount equal to the Key Employee's
then current annual rate of base salary, plus (ii) the greater of (a) the
value of the Key Employee's most recent award of cash and stock (in either
case, whether or not deferred) under the Senior Management Short Term
Incentive Plan or any successor to that
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Amendment to 1995 Employment Agreement Page1 Xxxxxxxx X. Xxxxxx, Xx
plan (the "STIP"); or (b) 150% of the target STIP award for the Key
Employee's salary grade as of the relevant date. In the event that the most
recent short term award was prorated for a portion of a year, the short term
award shall be annualized.
(b) Stay Bonus if Merger Plan is Terminated. Subject to the terms and
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conditions of this Agreement, if:
(1) the Definitive Agreement is terminated, thereby canceling the
plan of merger of the Xxxx Atlantic and NYNEX businesses, and
(2) the Key Employee has remained an employee "in good standing" (as
hereinafter defined) of one or more Xxxx Atlantic Companies, from the
date of this Agreement to the date the Definitive Agreement is
terminated;
then, not later than 30 calendar days following the date of termination of
the Definitive Agreement, Xxxx Atlantic will cause the Xxxx Atlantic Company
which then employs the Key Employee to pay the Key Employee a special bonus
consisting of a single cash payment in an amount equal (before withholding of
taxes) to 25 percent of the amount described in Section 1(a) of this
Agreement (substituting the date of termination of the Definitive Agreement
for the Closing Date, for purposes of calculating the then applicable Pay in
Section 1(a)).
(c) Payment in Case of Death. Subject to the terms and conditions of this
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Agreement, in the event of the death of the Key Employee on any date after the
date of this Agreement on which the Key Employee was an employee "in good
standing" immediately prior to the date of death, and prior to the Closing
Date or the date of any termination of the Definitive Agreement, Xxxx Atlantic
shall cause the Key Employee's last employing Xxxx Atlantic Company to pay the
Key Employee's estate a single cash payment which (before withholding taxes)
shall be equal to a fraction of the amount described in Section 1(a). The
numerator of the fraction shall be the number of days that have elapsed
between the signing of this Agreement and the Key Employee's date of death,
and the denominator of the fraction shall be the number of days that elapse
between the signing of this Agreement and the Closing Date. Such payment shall
be made in accordance with the timetable prescribed in Section 1(a), and
substituting the date of death for the date described in Section 1(a) for
purposes of calculating Pay in those subsections. If the Definitive Agreement
is terminated as provided in Section 1(b) after the Key Employee's date of
death, a payment shall be made to the Key Employee's estate (in lieu of the
foregoing payment) in an amount equal (before withholding of taxes) to 25
percent of the amount described in Section 1(a) of this Agreement and
substituting the date of death for the date described in Section 1(a) for
purposes of calculating the then applicable Pay in Section 1(a).
(d) Definition of Employment in Good Standing. For purposes of Section 1(a)
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through 1(c), the Key Employee will be considered to be "in good standing" on
a given date if, on that date, the Key Employee has not terminated employment
for any reason from the date of this Agreement to the given date, has not
tendered oral or written notice of intent to resign or retire effective as of
a date on or before the given date, and is not in receipt of notice from his
employing Xxxx Atlantic Company that the employer has determined that the Key
Employee's employment is to be terminated because the Key Employee has
committed a violation of law or a breach of the Employee Code of Conduct or
other written policy of the
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Amendment to 1995 Employment Agreement Page 2 Xxxxxxxx X. Xxxxxx, Xx
employing company which is of sufficient severity to be cause for termination
for misconduct.
(e) Stay Bonus Payment Not Applicable to Pension, Savings Plan, or Other
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Benefit Plans. The amounts described in this Section of the Agreement shall
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not be eligible to be contributed to any qualified savings plan, and shall not
be benefit-bearing compensation for purposes of any group term life insurance
plan, pension plan, or other employee benefit plans. Nothing in this Agreement
is intended to supersede or modify any rights which the Key Employee may have
under any other compensation or benefit plan in which the Key Employee
participates. At the time of any award of a stay bonus under Section 1(a) or
1(b) of this Agreement, such bonus may be deferred under any nonqualified
deferred compensation plan in which the Key Employee is then eligible to
participate, but only if and to the extent then permitted under the terms of
any such nonqualified deferred compensation plan.
2. Additional Death Benefit. In the event of the death of the Key Employee
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on any date after the date of this Agreement (but prior to the Closing) on which
the Key Employee was an employee "in good standing" immediately prior to the
death, then Xxxx Atlantic shall continue to pay to the Key Employee's estate to
the second anniversary of the Closing Date (or for two years following the date
of death if the Definitive Agreement is terminated as provided in Section 1(b)
after the Key Employee's death) the Key Employee's Pay in effect on the date of
death.
3. Certain Limitations Upon Payments. Anything in this Agreement or in the
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Employment Agreement to the contrary notwithstanding, Xxxx Atlantic and the Key
Employee agree to follow the procedures set forth in Attachment A with respect
to the applicability of the provisions of Section 280G of the Internal Revenue
Code of 1986, as amended.
4. Except as modified herein, in all other respects, the terms of the
Employment Agreement shall continue in full force and effect until the Closing,
or, in the event the Definitive Agreement is terminated, the Employment
Agreement will remain in force according to its terms, as amended herein.
IN WITNESS WHEREOF, the parties hereto have executed this First Amendment
to the Employment Agreement on the date first set forth above.
XXXX ATLANTIC CORPORATION
By:
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Xxxxxxx X. Xxxxx,
Chairman of the Board and Chief Executive Officer
THE KEY EMPLOYEE
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Xxxxxxxx X. Xxxxxx, Xx.
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Attachment A
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Certain Limitations upon Payments
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(a) Tax Code Limitations. Anything in this Agreement or the Employment
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Agreement to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by Xxxx Atlantic to or for the
benefit of the Key Employee, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), would constitute an "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), the
aggregate present value of amounts payable or distributable to or for the
benefit of the Key Employee pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be subject to taxation under Section 4999 of the Code. For purposes
of this Section, present value shall be determined in accordance with Section
280G(d)(4) of the Code.
(b) Calculations by Independent Firm. All determinations to be made under
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this Section shall be made by Xxxx Atlantic's independent public accountant or
such law firm as is acceptable to the Key Employee and Xxxx Atlantic (the
"Independent Firm"), immediately if the Key Employee separates from service
under circumstances which make the Key Employee eligible to receive post-
separation payments under this Agreement, or at such other times as Xxxx
Atlantic may determine. The parties agree that the Independent Firm shall render
a preliminary opinion on the applicability of Section 280G to this Agreement and
to the Employment Agreement within sixty (60) days of the date of execution of
this Agreement. The Independent Firm shall provide its determinations and any
supporting calculations both to Xxxx Atlantic and the Key Employee within ten
(10) days of the effective date of termination of employment, or when such
calculations are otherwise made. Any such determination by the Independent Firm
shall be binding upon Xxxx Atlantic and the Key Employee. Within five (5) days
after this determination, Xxxx Atlantic shall commence to pay (or cause payments
to commence to be paid) to or for the benefit of the Key Employee such amounts
(if any) as are then due to the Key Employee under this Agreement.
(c) Overpayments and Underpayments. As a result of the uncertainty in the
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application of Section 280G of the Code at the time of the initial determination
by the Independent Firm hereunder, it is possible that Agreement Payments will
either have been made by Xxxx Atlantic which should not have been made
("Overpayment"), or that additional Agreement Payments which have not been made
by Xxxx Atlantic could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
effective date of termination of employment, the Independent Firm shall review
the determination made by it pursuant to the preceding paragraph. In the event
that the Independent Firm determines that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to the Key Employee
which the Key Employee shall repay to Xxxx Atlantic together with interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Code (the
"Federal Rate"); provided, however, that no amount shall be payable by the Key
Employee to Xxxx Atlantic if and to the extent such payment would not reduce the
amount which is subject to taxation under Section 4999 of the Code. In the event
that the Independent Firm determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the appropriate Xxxx Atlantic Company to
or for the benefit of the Key Employee together with interest at the Federal
Rate.
(d) All of the fees and expenses of the Independent Firm in performing the
determinations referred to in subsections (b) and (c) above shall be borne
solely by Xxxx Atlantic.
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