AGREEMENT AND RELEASE
This AGREEMENT is made this _____ day of May, 1997 by and between AT&T
Corp., (hereinafter "Company" or "AT&T") and Xxxxxxx X. Xxxxxx (hereinafter
"Employee").
WHEREAS, Employee has been employed by AT&T since August 9, 1993; and
WHEREAS, Employee and the Company have decided to settle fully and finally
all obligations related to Employee's employment and resignation from the
Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, the parties agree as follows:
1. Employee will resign his active employment with the Company on or before
June 2, 1997, this date or such later resignation date under Paragraph 8,
hereinafter "Resignation Date".
2. Should Employee die after executing this Agreement but before the
intended Resignation Date, this Agreement shall be null and void in its
entirety.
3. As special consideration for this Agreement, the Company will provide
the following:
a. Special AT&T Performance Share Treatment: In accordance with the terms
and conditions of such grants, Employee's 12,436 AT&T Performance
Shares/Stock Units for the 1995-1997 performance period, 12,436 AT&T
Performance Shares/Stock Units for the 1996-1998 performance
period and 17,000 AT&T Performance Shares for the 1997-1999
performance period would be canceled as of the Resignation Date.
However, notwithstanding the foregoing, the Company agrees that for
the sole purpose of such three Performance Share grants, the Company
will treat Employee as if he were a Service Pensioner under the AT&T
Management Pension Plan, i.e., the Company will permit Employee to
retain 100% of all three undistributed Performance Share grants. Such
retained Performance Shares will be continued after the Resignation
Date under the terms and conditions applicable to a Service
Pensioner. For grants related to performance periods 1995-97
and 1996-98, payout will be at 100% of target per the resolution of
the Compensation Committee of the Board, and for the grant related to
performance period 1997-99, the payout will be based on achievement
of corporate performance criteria established by the Board for such
period. All payouts/distributions associated with these grants will
not be eligible for deferral under the AT&T Senior Management
Incentive Award Deferral Plan.
b. Special AT&T Stock Option Treatment: In accordance with the terms of
such awards, Employee's AT&T Stock Options granted in 1994 and any
prior year which are unexercised as of the Resignation Date would be
canceled as of such Resignation Date and Employee's AT&T Stock Options
granted on January 3, 1995, September 25, 1995 and January 31, 1997,
which are unexercised as of the Resignation Date would be canceled 90
days after such Resignation Date. However, notwithstanding the
foregoing, all such AT&T Stock Options and related Lucent/NCR SARs
will not be canceled (See Appendix A). All such outstanding Options
and SARs, with the exception of Leveraged Stock Option grant dated
September 25, 1995, will continue to be exercisable in accordance with
their terms applicable to a Service Pensioner. With respect to the
September 25, 1995 Leveraged Stock Option grant, such grant shall
continue to vest and be exercisable in accordance with its provision
without regard to the term which provides for cancellation upon
termination of employment.
c. Restricted Stock Units: In accordance with the terms of such awards,
Employee's 30,008 AT&T Restricted Stock Unit Award granted September
25, 1995, and unvested as of the Employee's Resignation Date would be
canceled as of such Resignation Date. However, notwithstanding the
foregoing, Employee will be permitted to retain such Restricted Stock
Units in accordance with its terms without regard to the term which
provides for cancellation upon termination of employment.
d. Annual Incentive Treatment: In March 1998, Employee will receive
prorated 1997 AT&T Performance Award (APA) and Merit Award (MA). The
amount of such APA/MA will be determined in accordance with plan
provisions.
e. Special Pension Treatment: The Company will pay Employee for his
lifetime an individual non-qualified Special Pension payable
monthly from operating income in the amount of $9,750 per month
commencing on the first of the month following the month of
Resignation. (This is a single life annuity and, therefore, no
surviving spouse benefit is payable. In the event any "ad hoc"
inflation adjustment is made after Employee's Resignation Date to
the AT&T Non-Qualified Pension Plan (AT&TNQPP), the amount of
Special Pension payable to Employee will be increased by same
percentage which is applicable to Service Pensioners who retired
on Employee's Resignation Date and utilizing any other terms and
conditions of such ad hoc adjustment provision.
4. Except as provided in Paragraphs 3 and 4 of this Agreement, Employee
hereby waives any and all claims to salary, incentives, payments, or benefits of
any kind, including, but not limited to, any entitlements Employee may have
under his Employment Agreement with the Company signed and dated by Employee on
October 26, 1993 and any amendments thereto, other than:
a. Employee and/or his survivors, will receive payout of previously deferred
incentive plan awards made under the AT&T Senior Management Incentive Award
Deferral Plan in accordance with Employee's elected payout schedules and with
the terms and conditions of the plan.
b. Those payments and other benefits shown in Appendix B.
5. Except as required by law or valid legal process, Employee shall not
disclose or discuss, other than with legal counsel, personal tax or financial
advisors, or members of Employee's immediate family, any facts concerning the
negotiation, execution or implementation of this Agreement. Moreover, Employee
specifically agrees that he will not criticize, denigrate or otherwise speak
adversely or originate, disclose or otherwise be the source of any negative
information about the operations, management or performance of the Company,
affiliates of the Company, or about any director, officer, employee or agent of
any of the foregoing; or the circumstances related to his resignation, other
than to state that Employee was Senior Executive Vice President and Chief
Financial Officer - AT&T and that he resigned voluntarily therefrom to pursue
other opportunities.
6. Employee specifically covenants that:
Paragraphs 3 (a), 3 (b) and 3 (c), provide for the extension of certain
grants made under the AT&T 1987 Long Term Incentive Program (the
"Program"), ____ after ____ the Resignation Date (under the terms and
conditions of the Program and/or related individual grant agreements, such
grants would have been canceled at the Resignation Date or within 90 days
of such Resignation Date). Continuation and payout of such Program grants
under the provision of the Program and/or related individual grant
agreements and this Agreement, are conditioned upon Employee adhering to
and not violating the AT&T Non-Competition Guideline (Appendix C). Benefits
provided for under Paragraphs 3 (d) and 3(e) will also be conditioned upon
Employee adhering to and not violating the AT&T Non-Competition Guideline.
Such Guideline, in addition to _____ Non-Competition constraints includes a
provision which calls for forfeiture of benefits in the event Employee
engages in activities in conflict with or adverse to the interest of the
Company.
b. The Employee recognizes and acknowledges that the Company considers its
confidential and proprietary information and trade secrets to be among its
most valuable assets, including, but not limited to, its customer and
vendor lists, databases, computer programs, frameworks, models, its
marketing programs, its sales, financial, marketing, training and technical
information, and any other information, whether communicated orally,
electronically, in writing or in other tangible forms concerning how AT&T
creates, develops or maintains its products, services and its marketing
plans, targets its potential customers and operates its business. The
parties to this Agreement recognize that AT&T has invested, and continues
to invest, considerable amounts of time and money in obtaining and
developing the goodwill of its customers, its other external relationships,
its data systems and data bases, and all the proprietary and other
information described above (hereinafter collectively referred to as "AT&T
Confidential Information"), that it is essential to the protection of
AT&T's goodwill and to the maintenance of AT&T's competitive position and
that AT&T Confidential Information be kept secret and that Employee not
disclose AT&T Confidential Information to others or use AT&T Confidential
Information to Employee's own advantage or the advantage of others, and
agrees that any misappropriation or unauthorized disclosure of AT&T
Confidential Information (including trade secrets) in any form would
irreparably harm AT&T. (Such AT&T Confidential Information does not include
any publicly available material.) Employee affirms his obligation to keep
secret all AT&T Confidential Information and that he will not disclose it
to any third party in the future.
c. Employee acknowledges that the restrictions set forth in this Paragraph
6 are necessary and reasonable to prevent the use and disclosure of AT&T
Confidential Information and to otherwise protect the legitimate business
interests of the Company. Employee further acknowledges that when
Employee's employment with AT&T terminates, he will be able to earn a
livelihood without violating any of the foregoing restrictions.
7. Employee acknowledges that remedies at law, and those remedies
contained in Paragraph 11, for any breach by Employee of the provisions of
Paragraph 6 will be inadequate and that the Company shall be entitled to
injunctive relief against Employee in the event of any such breach, in addition
to any other remedy and damages available. Employee acknowledges that the
restrictions contained therein are reasonable, but agrees that if any court of
competent jurisdiction shall hold such restrictions unreasonable as to time,
geographic area, activities, or otherwise, such restrictions shall be deemed to
be reduced to the extent necessary in the opinion of such court to make them
reasonable. Any waiver, or failure to seek enforcement or remedy for any breach
or suspected breach of any provision of this Agreement by the Company in any
instance shall not be deemed a waiver of such provision in the future or any
other provision.
8. If Employee becomes disabled after executing this Agreement, but before
June 2, 1997, and if he is receiving or entitled to receive sickness or
accident disability benefit payments from the Company as of June 3, 1997, then:
a. Should Employee die while disabled and receiving sickness or accident
benefit payments, this Agreement shall be null and void in its entirety; OR
b. Should Employee's period of disability be determined by the Company to
terminate prior to the expiration of the period during which in accordance wit
the terms of the Sickness and Accident Disability Benefit Plan, he could become
entitled to receive sickness and accident disability benefit payments, Employee
will resign his active employment with the Company effective on the day
following the last day of disability for which he receives such payments
(hereinafter his "actual resignation date"); further, Employee understands and
agrees that, in such event, the total amount of the incentive/pension payments
specified in Paragraph 3 above shall be reduced by the total amount of sickness
or accident disability benefit payments which he has received from the Company
for the period of disability after his intended resignation date, i.e., June 2,
1997 to his actual resignation date inclusive and shall be paid out in
accordance with Paragraph 3 above OR
c. Should Employee be determined by the Company to continue to be disabled at
the expiration of the period during which he is entitled to receive sickness or
accident disability benefit payments, Employee understands and agrees that he
will thereupon be retired by action of the Company's Benefit Committee,
effective on the day following the last day of eligibility for such sickness or
accident disability payments (hereafter his "actual resignation date") and that,
under such circumstances, the total amount of the incentive/pension payments
specified in Paragraph 3 above shall be reduced by the total amount of sickness
or accident disability benefit payments which he has received from the Company
for the period of disability after his intended resignation date, i.e., from
June 2, 1997 to his actual resignation date inclusive and shall be paid out in
accordance with Paragraph 3 above.
9. The Employee agrees that he will submit all vouchers for reasonable
business expenses prior to his Resignation Date or as soon thereafter as is
practicable. The Employee understands and agrees that after his Resignation Date
he will no longer be authorized to incur any expenses, obligations or
liabilities on behalf of the Company.
10. In accordance with his existing and continuing obligations to the
Company, Employee agrees (except as indicated in the last sentence of this
Paragraph) to return to the Company, on or before his Resignation Date, all
Company property or copies thereof, including, but not limited to, files,
records, computer access codes, computer programs, instruction manuals,
documents, business plans and other property which he received or prepared or
helped to prepare in connection with his employment with the Company, and to
assign to the Company all right, title and interest in such property, and any
other inventions, discoveries or works of authorship created by Employee during
the course of his employment. Employee may retain the Company equipment listed
in Appendix E.
11. Employee understands and agrees that a violation of any portion of
Paragraphs 5, 6, or 10, relating to the negotiation of the Agreement, disclosure
of adverse information about the Company, violation of the AT&T Non-Competition
Guideline, the return of Company property, (except the Company car if Employee
elects to purchase such vehicle), and the use or disclosure of AT&T Confidential
Information, will be considered a material breach of this Agreement, for which
Employee will forfeit all benefits (other than tax qualified welfare and
retirement plan benefits) as well as any monies not already paid under this
Agreement and/or be obligated to return immediately all monies which have
already been paid under this Agreement - except $1,000.00. The provisions of
this Paragraph 11 in no way limit the Company's right to also commence an action
for damages and/or pursue other legal or equitable remedies in the event
Employee breaches any provision of this Agreement. In the event that the Company
takes such action, all of Employee's other obligations under this Agreement
shall remain in full force and effect.
12. Employee acknowledges that there are various state local
and federal laws that prohibit employment discrimination on the basis of age,
sex, race, color, national origin, religion, disability, sexual orientation or
veteran status and that these laws are enforced through the Equal Employment
Opportunity Commission, Department of Labor and State or Local Human Rights
agencies. Such laws include, without limitation, Title VII of the Civil Rights
Act of 1964 as amended 42 U.S.C. Sec. 2000 et. seq.; the Age Discrimination in
Employment Act, 29 U.S.C. Sec. 621 et. seq.; the Americans with Xxxxxxxxxxxx
Xxx, 00 X.X.X. Xxx. 00000; the Employee Retirement Income Security Act, as
amended 29 U.S.C. Sec. 1001 et. seq.; and 42 U.S.C. Section 1981, and other
state and local human or civil rights laws as well as other statutes which
regulate employment; and the common law of contracts and torts. In consideration
of this Agreement, Employee hereby waives and releases any rights he may have
under these laws as to events which have occurred prior to the date of this
Agreement or Resignation Date, whichever is later. Employee, also waives any
right to become, and promises not to consent to become, a member of any class in
a case in which claims are asserted against any Releasee that is related in any
way to his employment or the termination of his employment with AT&T, and that
involve events which have occurred as of the date of this Agreement or
Resignation Date. If Employee, without his prior knowledge and consent is made a
member of a class in any proceeding, he shall opt out of the class at the first
opportunity afforded to him after learning of his inclusion. In this regard
Employee agrees that he will execute, without objection or delay, an "opt-out"
form presented to him either by the court in which such proceeding is pending or
by counsel for any Releasee who is made a defendant in any such proceeding.
13. Employee, on behalf of himself, his heirs, executors,
administrators, successors and assigns, releases and discharges the Company and
its successors, assigns, subsidiaries, affiliates, directors, officers,
representatives, agents and employees ("Releasees") from any and all claims,
including claims for attorney's fees and costs, charges, actions and causes of
action, including but not limited to those with respect to his employment or
termination of employment with the Company, as well as from all claims for
personal injury, actual or potential, to the date of this Agreement or
Employee's Resignation Date, whichever is later. This includes, but is not
limited to, claims arising under federal, state, or local laws prohibiting age,
sex, race or any other forms of discrimination or claims growing out of any
legal restrictions on the Company's right to terminate its employees. Employee
represents that he has not filed any charge or lawsuit against the Company with
any governmental agency or Court and that he will not institute any actions
against the Company or any Releasee for any reason. With respect to any
administrative charges that have been or may be filed concerning events or
actions relating to his employment or the termination of his employment that
occurred on or before Resignation Date, Employee waives and releases any right
he may have to recover in any lawsuit or proceeding brought by him or by an
Administrative Agency on his behalf. If Employee breaches this Paragraph,
Employee understands that he will be liable for all expenses, including costs
and reasonable attorney's fees, incurred by any Releasee in defending the
lawsuit or charge of discrimination. Employee agrees to pay such expenses within
thirty (30) calendar days of written demand. This Paragraph is not intended to
limit Employee from instituting legal action for the sole purpose of enforcing
this Agreement.
14. Except to the extent expressly provided herein, nothing in
this Agreement shall be deemed to alter, amend, modify or otherwise affect any
employee benefit, compensation or other plan, program or policy maintained by
the Company or any provision thereof.
15. If any provision, or portion thereof, of this Agreement is
determined to be invalid under applicable statute or rule of law, only such
provision, and only to the extent determined to be invalid, shall be deemed
omitted from this Agreement, the remainder of which shall remain fully in force
and effect.
16. The construction, interpretation and performance of this
Agreement shall be governed by the laws of the State of New Jersey without
regard to Conflict of Laws principles.
17. Employee understands that, pursuant to the Older Workers
Benefit Protection Act of 1990, he has the right to consult with an attorney
before signing this Agreement, he has 21 days to consider the Agreement before
signing it and he may revoke the Agreement within seven (7) calendar days after
signing it. Employee further understands that the Agreement will not become
effective or enforceable until the seven day revocation period has expired.
18. Employee promises and agrees that in consideration of a
payment of one thousand dollars ($1,000) to be made within ten business days
subsequent to his Resignation Date, in addition to the benefits set forth in
Paragraph 3 and 4, Employee will execute a release of all claims relating to his
employment during the period from the execution of this Agreement to his
Resignation Date. A copy of such release is attached as Appendix D to this
Agreement.
19. This Agreement, consisting of eight pages containing
nineteen paragraphs and three Appendices constitutes the entire agreement
between the Company and Employee with respect to the subject matter hereof and
shall not be amended, modified, or amplified without specific written provision
to that effect, signed by both parties. No oral statement of any person
whosoever shall, in any manner or degree, modify or otherwise affect the terms
and provisions of this Agreement. Accordingly, this Agreement supersedes and
completely replaces any prior oral or written communication on this subject.
By signing this Agreement, Employee states that;
a) He has read it and has had sufficient time to consider its terms;
b) He understands it and knows that he is giving up important
rights;
c) He agrees with everything in it;
d) He is aware of his right to consult an attorney before signing it;
and has been so advised
e) He has signed it knowingly and voluntarily.
Witnesses:
---------------------- -------------------------- ----------------
Employee Date
---------------------- -------------------------- ----------------
For the Company Date
THIS IS A LEGAL AGREEMENT, RELEASE
AND COVENANT NOT TO XXX
XXXX CAREFULLY BEFORE SIGNING
Appendices
Xxxxxxx Xxxxxx Stock Option/SAR Status as of: 3/18/97
Option
Number Date Type Price Granted Excercised Cancelled* Vested Unvested Outstanding Excercisable
24228 8/9/93 NQ $44.1746 36,981 0 13,405 23,576 0 23,576 23,576
24229 8/9/93 NQ $44.1746 71,448 0 25,899 45,549 0 45,549 45,549
24389 1/3/94 NQ $36.9580 36,981 0 13,405 23,576 0 23,576 23,576
26137 1/3/95 NQ $34.9461 44,699 0 16,202 18,998 9,499 28,497 18,998
LV0006 9/25/95 NQ $44.4371 357,246 0 0 0 357,246 357,246 0
32431 1/31/97 NQ $39.3125 128,000 0 0 0 128,000 128,000 0
675,355 0 68,911 111,699 494,745 606,444 111,699
*Cancellations due to impact of balancing stock options at Lucent and NCR spin. See SAR information below.
Lucent SAR Status
Option
Number Date Type Price Granted Excercised Cancelled* Vested Unvested Outstanding Excercisable
24228 8/9/93 SAR $50.9241 10,396 0 0 10,396 0 10,396 10,396
24229 8/9/93 SAR $50.9241 20,086 0 0 20,086 0 20,086 20,086
24389 1/3/94 SAR $42.6048 10,396 0 0 10,396 0 10,396 10,396
26137 1/3/95 SAR $40.2855 12,565 0 0 8,376 4,189 12,565 8,376
53,443 0 0 49,254 4,189 53,443 49,254
NCR SAR Status
Option
Number Date Type Price Granted Excercised Cancelled* Vested Unvested Outstanding Excercisable
24228 8/9/93 SAR $40.2545 1,473.500 0.000 0.000 1,473.500 0.000 1,473.500 1,473.500
24229 8/9/93 SAR $40.2545 2,846.813 0.000 0.000 2,846.813 0.000 2,846.813 2,846.813
24389 1/3/94 SAR $33.2961 1,473.500 0.000 0.000 1,473.500 0.000 1,473.500 1,473.500
26137 1/3/95 SAR $31.3553 1,781.063 0.000 0.000 1,187.375 593.688 1,781.063 1,187.375
7,574.876 0.000 0.000 6,981.188 593.688 7,574.876 6,981.188
Appendix B
Item Treatment
a) Base Salary Employee receives base salary through
Resignation Date.
b) Employee Benefits and Employee will be covered under
Senior Management Benefits general employee benefit plans and
(except as otherwise noted Senior Management benefit and
below) prerequisite plans/programs and
practices through Resignation Date.
c) AT&T Long Term Incentive Program
Any awards granted to Employee
under this Program which are not
specified in Paragraph 3 will be
cancelled as of the Resignation Date.
d) Medical/Dental/Vision (After Company paid Medical/Dental/Vision
Resignation Date) will continue through the Resignation
Date. Under COBRA (Consolidated
Omnibus Budget Reconciliation Act of
1985), coverage can be continued at
Employee's expense for lesser of 18
months or until Employee becomes
eligible for coverage under another
employer's plan.
The Federal government's rules of
regarding participation in tax
qualified medical plans currently
precludes your participation in the
Company's post-retirement medical
plan for all Management employees.
However, the Company is currently
considering the implementation of a
special medical plan for certain
retired Senior Managers.
In the event this special Senior
Management program is approved prior
to the expiration of your COBRA
medical coverage, you will be
permitted to participate in this
program on the same basis as service
pension eligible Senior Managers (or,
as determined by the company, a
comparable program for non-Service
Pension eligible Senior Managers.)
f) AT&T Senior Management Coverage will cease on Resignation
Individual Life Insurance Date. Employee may assume policy if
Program (AT&T SMILIP) (After he so elects by paying 100% of the
Resignation Date) premium. Company premium
contributions to policy cease on
Resignation Date and Company will
withdraw all prior premium
contributions.
g) AT&T Senior Management Employee's coverage will cease on
Basic Life Insurance (After Resignation Date.
Resignation Date)
h) Supplemental Variable Employee, via insurance carrier, will
Universal Life Insurance be given the option to continue
on an individual basis.
i) AT&T Senior Management Bills submitted for service prior to
Telephone Reimbursement Program Resignation Date will be covered.
Reimbursement privileges cease at
Resignation Date.
j) Financial Counseling Employee, upon Resignation Date,
will not be eligible to participate
in the program. The Company will
pay for any services provided prior
to Resignation Date as well as income
tax preparation in 1998 for 1997.
k) Company Car If Employee elects not to purchase
his leased automobile, such vehicle
will be returned to the Company on or
before the Resignation Date.
l) Vacation Days The June 2, 1997 Resignation
Date is predicated on employee
utilizing all vacation and carryover
vacation days prior to such date.
Appendix C
AT&T
Non-Competition
Guideline
Summary
INTRODUCTION
In order to protect the interests of the Company, its shareholders, its
employees and its customers, AT&T requires that an employee who is eligible to
receive benefits under various Senior Management incentive and compensation
plans forfeit those benefits if he or she competes with the Company after
termination of employment. The standard used to determine "competing" and an
explanation of the administrative process used to evaluate activity are
described in full in the AT&T Non-Competition Guideline, which has been approved
by the AT&T Board of Directors.
This brochure summarizes the Guideline and is intended as a reference guide
only. A copy of the complete Guideline may be obtained by requesting a copy from
the Director, Executive Human Resources, AT&T Corporate Headquarters.
GENERAL INFORMATION
Responsibility for interpreting, administering and implementing the provisions
of the Guideline rests with the AT&T Management Committee, which was established
and authorized by the Board to resolve all questions and handle all matters in
connection with competition and forfeiture of benefits. At least three, but no
more than five, Senior Officers serve on the Committee.
The Committee may make minor changes in the Guideline and to those incentive and
compensation plans which are subject to the Guideline's procedures. Changes may
be made without notice whenever the Committee considers the changes necessary to
fairly and consistently administer the Guideline and to protect the Company's
interests. The Committee's decisions about forfeiture of benefits and what is
competitive activity are final.
No act of the Company, the Committee or any employee acting in connection with
the Guideline and its provisions is in any way intended to interfere with any
individual's right to consider, accept, continue or terminate employment to
engage in any activity or to establish any kind of business or ownership
interest with any enterprise.
FORFEITABLE BENEFITS
Under the terms of the following plans, the benefits they pay are forfeitable
(or immediately payable): AT&T Senior Management Short Term Incentive Plan, AT&T
Senior Management Long Term Incentive Plan, AT&T 1984 Stock Option Plan, AT&T
Non-Qualified Pension Plan, AT&T Senior Management Life Insurance Program, AT&T
Senior Management Long Term Disability and Survivor Protection Plan, AT&T Senior
Management Individual Life Insurance Program, AT&T Incentive Award Deferral
Plan, AT&T Deferred Compensation Plan for Non-Employee Directors, AT&T Senior
Management Financial Counseling Program and the AT&T Mid-Career Pension Plan.
The Board or Committee may make other plans subject to this Guideline.
AFFECTED INDIVIDUALS
An individual whether a present or former employee, is subject to the Guideline
and to having activity evaluated if he or she has received, is receiving or is
entitled to receive benefits according to any of the Plans listed above.
WHAT IS COMPETITIVE ACTIVITY
An individual's activity is competitive activity and his or her benefits are
forfeitable if that individual either (A) engages in activity in conflict with
or adverse to the interests of the Company or (B) establishes a relationship
with a competitor of the Company.
"Establishing a relationship" includes founding, organizing, establishing,
becoming associated with, becoming employed by, rendering services to,
consulting or acting as consultant to, being a partner in or owning a
substantial interest in as shareholder or otherwise (such as, for example, an
interest subject to the reporting requirements of Section 13(d) of the
Securities Exchange Act of 1934).
A "competitor of the Company" is a business, entity or enterprise which either
(A) designs, develops, manufactures, produces, offers for sale or sells a
product or service which can be used as a substitute for, performs substantially
the same function as, is a practical alternative for or is generally intended to
satisfy the same customer or client needs for any product or service designed,
developed, manufactured, produced, offered for sale or sold by the Company or
(B) is a business which the Committee, based upon review of the individual facts
and circumstances and in its discretion and judgment, determines, in order to
protect the best interests of the Company, to be a competitor within the spirit
and intent of the Guideline and the non-competition clauses of various Plans.
THE EVALUATION PROCESS
Anyone who is considering engaging in an activity which a reasonable person
might consider competitive activity as described above should notify the
Director, Executive Human Resources, and request that the Company evaluate the
activity to determine whether it is competitive.
To insure that the Company's evaluation is fairly based on all relevant facts
and circumstances, an individual who requests a determination should provide the
Company in writing with all information he or she believes to be relevant to the
inquiry as well as a full explanation of the contemplated activity which
describes
- the contemplated relationship, including (as applicable) the proposed
position, title, responsibilities and the nature and extent of the ownership
interest;
- the nature of the business, including, for example, all products and/or
services currently being or expected to be designed, developed, manufactured,
produced, offered for sale or sold by the business; and
- the most recently available financial information on the business
The Company has the right to initiate an evaluation of an individual's activity.
An evaluation will be instituted when it is requested by or on behalf of the
head of any of the Company's lines of business or a member of the Board or the
Committee. The Director, Executive Human Resources, will notify the individual
in writing that an evaluation has been initiated and of the opportunity to
submit within a stated period of time information for the evaluators' and the
Committee's consideration. An individual whose activity is being evaluated is
strongly encouraged to provide the Committee with a written submittal such as
that described above.
An individual's contemplated or actual activity will be separately evaluated by
- the head and an attorney serving as counsel to the head of each of the
Company's lines of business responsible for the design, development,
manufacture, production, offer for sale of the product or service with which the
activity is suspected to be in competition;
- the head of each entity responsible for paying benefits under any of the
Plans listed above, or a delegate;
- a Corporate Vice President-Law of the Company; and
- any other individual whose evaluations the Committee designates as
appropriate.
Individuals who, for personal or professional reasons, have a conflict of
interest which they feel would prevent their fair and objective evaluation will
not participate but will delegate their responsibility to another in their line
of business or organization. Evaluations will be based on the individual's
submittal, the financial state of the line of business, the competitive
marketplace, the impact of the individual's leaving on his or her line of
business, the extent to which activity is adverse to the Company's interests and
all other relevant facts and circumstances. After evaluating the activity, each
person doing an evaluation will make to the Committee a recommendation of
appropriate action, identifying, if there are any, those facts or circumstances
not readily apparent from the submittal or not generally known but upon which
facts or circumstances the recommendation was based.
DETERMINATION
Final determination of whether an individual's activity is or is not competitive
activity will be made by the Committee and the Committee alone. The
determination will be based on the recommendations as described above, the best
interests of the Company and on all other facts and circumstances the Committee
deems pertinent.
After the Committee's determination, the Director, Executive Human Resources,
will notify the individual of the decision in writing.
If the Committee's determination is that activity is not competitive activity,
the individual may receive a letter advising of that determination. In such
case, the Committee reserves the right to seek, at whatever intervals it deems
appropriate, written assurance from the individual that the facts and
circumstances on which the evaluations and the determination were based have not
changed.
An individual who has not yet engaged in activity which would be considered
competitive activity will have the opportunity to provide the Company within a
reasonable period of time written assurance that he or she has not and will not
engage in such activity. If the Company receives such assurances no forfeiture
will result. If the individual fails to provide such assurance or if he or she
is already engaged in competitive activity and does not withdraw from it, then
the Director, Executive Human Resources, will coordinate termination of all
benefits with the Payroll, Benefit and all other affected organizations. The
Committee or its delegate may also take legal steps to recover any benefits
already paid.
OPPORTUNITY TO WITHDRAW
After activity has been evaluated and recommendations submitted as described
above, the Committee may determine that there are unusual or special
circumstances which are persuasive that withdrawal or denial of benefits is not
appropriate. In that case, the Committee may, in its discretion and judgment,
withhold termination or denial of benefits and offer the competitive activity.
An individual who receives such an offer will have a reasonable period of time
from the date of the offer to accept it and to provide the Committee assurance
in writing that the withdrawal has been accomplished, or the offer will lapse
and a notice to terminate benefits will be issued.
REEVALUATION
Even though activity has been previously evaluated and regardless of a prior
determination, the Company reserves the right without prior notice to reevaluate
activity if the Committee believes it is warranted. In case of a reevaluation,
the individual will be advised by the Director, Executive Human Resources, that
a reevaluation has been instituted and that he or she has the opportunity to
make a submittal such as that described above.
SUBSEQUENT COMPETITIVE ACTIVITY
If an individual establishes a relationship with a business which is not at that
time a competitor of the Company, but AT&T later engages in a line of business
which is competitive with any such product and/or service of the business, no
question of forfeiture arises. However, the Company may require forfeiture if
the person knew (or had reason to know) at the time the relationship was
established that AT&T intended to design, develop, manufacture, produce, offer
for sale or sell a competitive produce or service.
The Company may also invoke forfeiture if, within a reasonable time-normally
three years-after the individual engages in an activity, it becomes adverse to
AT&T's interests or competitive with AT&T. In such case, if the person advises
the Director, Executive Human Resources, that the activity may have become
competitive, he or she will have the opportunity to withdraw as described above,
without forfeiture. If the Company is not advised, or if the withdrawal is not
accomplished within the stated time, then all benefits paid after the point when
the activity became competitive are forfeitable.
CONSENT TO COMPETE
In very extraordinary circumstances and despite the fact that the individual's
competitive activity would be grounds for requiring forfeiture of benefits, the
Company may consent to the activity if the Committee determines that the
situation is only technically competitive and the facts are overwhelmingly
compelling that relief is warranted. In such a case, the Director, Executive
Human Resources, will provide a letter advising the individual of the Company's
decision. However, the Company does not waive by such consent the right to
withdraw the consent after it is issued, without prior notice, and to invoke the
non-competition clauses if, within a reasonable time-normally three years-
thereafter, the facts and circumstances change and it becomes in the Company's
best interest to require forfeiture.
This guideline is published by the Executive Human Resources group of AT&T
Corporate Headquarters. Questions and requests for additional copies may be
directed to Director, Executive Human Resources, AT&T Corporate Headquarters,
000 Xxxxx Xxxxx Xxxxxx, Xxxx 0000X0, Xxxxxxx Xxxxx, XX 00000.
October 1994
APPENDIX D
GENERAL RELEASE OF ALL CLAIMS
Employee, on behalf of himself, his heirs, executors, administrators,
successors and assigns, releases and discharges the Company and its successors,
assigns, subsidiaries, affiliates, directors, officers, representatives, agents
and employees ("Releasees") from any and all claims, including claims for
attorney's fees and costs, charges, actions, and causes of action with respect
to, or arising out of, his employment or termination of employment with the
Company, as well as from all claims for personal injury, actual or potential,
relating to the period from May ____ , 1997 to Employee's Resignation Date. This
includes, but is not limited to, claims arising under federal, state or local
laws prohibiting age, sex, race, or any other forms of discrimination or claims
growing out of any legal restrictions on the Company's right to terminate its
employees. Employee represents that he has not filed any charge or lawsuit
against the Company with any governmental agency or Court and that he will not
institute any actions against the Company of any Releases for any reason . With
respect to any administrative charges that have been or may be filed concerning
events or actions relating to his employment or the termination of his
employment that occurred on or before Resignation Date, Employee waives and
releases any right he may have to recover in any lawsuit or proceeding brought
by him or by an Administrative Agency on his behalf. If Employee breaches this
Paragraph, Employee understands that he will be liable for all expenses,
including costs and reasonable attorney's fees, incurred by any Releasee in
defending the lawsuit or charge of discrimination. Employee agrees to pay such
expenses within thirty (30) calendar days of written demand. This Paragraph is
not intended to limit Employee from instituting legal action for the sole
purpose of enforcing this Agreement.
Employee understands that, pursuant to the Older Workers Benefit Protection
Act of 1990, he has the right to consult with an attorney before signing this
General Release of All Claims, he has 21 days to consider the Release before
signing it and he may revoke the Release within seven (7) calendar days after
signing it. Employee further understands that the Release will not become
effective or enforceable until the seven day revocation period has expired and
that the Special Payment (and other benefits provided in this Agreement) will
not be paid until such period has expired.
Notwithstanding the above provisions of this Appendix D, Employee shall not
be precluded from pursuing the enforcement of this Agreement in any manner.
By signing this Agreement and Release of All Claims, Employee states that:
a) He has read it and has had sufficient time to consider its terms;
b) He understands it and knows that he is giving up important rights;
c) He agrees with everything in it;
d) He is aware of his right to consult an attorney before signing it and
has been advised;
e) He has signed it knowingly and voluntarily.
Witnesses:
-------------------- ----------------------- --------------------
Employee Date
-------------------- ----------------------- --------------------
For the Company Date
APPENDIX E
COMPAQ DESKPRO PERSONAL COMPUTER
HP 4L PRINTER
HP 950 FAX
TELEPHONE RECEIVERS (MOST 1993 VINTAGE)
2 TRIMLINE 230
2 FEATURE 705
1 XXX 0000
1 CORDLESS 5470
1 VIDEOPHONE 2500
1 PORTABLE CELLULAR 3760
1 DIGITAL CORDLESS 9100
