EXHIBIT 8
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT (the "Agreement") entered into on April 26, 1999,
by and between FORE Systems, Inc., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxx, a resident of Xxxxxxx Park, Pennsylvania ("Executive").
WHEREAS, Executive is currently employed as the Senior Vice President and
Chief Financial Officer of the Company and is a participant in the Company's
Change in Control Separation Plan, as amended and restated effective September
4, 1998, (the "Plan"); and
WHEREAS, the Company has contracted to enter into a transaction whereby,
upon the closing of the transaction (the "Closing"), the Company will become a
wholly-owned indirect subsidiary of The General Electric Company, p.l.c. (the
"Parent Company"), which transaction will constitute a "Change in Control" as
defined by Article II(e) of the Plan; and
WHEREAS, after negotiation, the Company and Executive wish to enter into a
contract that will provide for Executive's continued employment by the Company,
to take effect immediately prior to the time of Closing (the "Effective Date"),
in partial exchange for and full replacement of any obligation the Company might
have thereupon incurred under the Plan to Executive, except as provided in
Section 1 below, which Executive hereby waives; and
WHEREAS, both parties also desire to enter into this Agreement to reflect
Executive's role in the Company's business and to provide for Executive's
continued employment by the Company, upon the terms and conditions set forth
herein, and to set forth certain obligations of Executive not to misuse the
Company's Confidential Information, as defined below, and not to compete with
the Company or solicit its Principal Customers, as defined below;
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby
agree as follows:
1. Employment. On the Effective Date, the Company hereby agrees to employ
----------
Executive, and Executive hereby accepts such employment and agrees to perform
Executive's duties and responsibilities, in accordance with the terms,
conditions and provisions hereinafter set forth. In consideration for the terms
set forth in this Agreement, Executive hereby waives any further participation
in the Plan which shall no longer apply to him on or after the Effective Date;
provided, however, that the provisions of Section 4.4 of the Plan shall continue
to apply to Executive should any of the actions, payments or benefits under this
Agreement require the additional payments called for by that Section in
connection with the Change in Control that will occur as a result of the
transaction referred to above; and, provided, further, that any interest and
penalties imposed upon Executive related to such event under that Section shall
be covered by the Company as well on a net after-tax basis to Executive assuming
he is in the highest marginal tax bracket for Federal, state and local income
and employment taxes.
1.1. Employment Term. The term of Executive's employment under this
---------------
Agreement shall be indefinite but shall commence on the Effective Date and shall
continue until terminated in accordance with Section 5. The period commencing
as of the Effective Date and ending on the date on which the term of Executive's
employment under the Agreement shall terminate is hereinafter referred to as the
"Employment Term".
1.2. Duties and Responsibilities; Extent of Service. During the
----------------------------------------------
Employment Term, Executive shall accept all responsibilities incident to such
positions as may be assigned to him by the Board or the Company's Chief
Executive Officer, a majority of which responsibilities shall be consistent with
or not in diminution of Executive's position on the Effective Date, and agrees
2
to use Executive's best efforts to carry out Executive's duties and
responsibilities. Executive shall devote substantially all Executive's business
time, attention and energy to the Company. Executive agrees not to become
engaged in any other business activity which, in the reasonable judgment of the
Board, is likely to interfere with Executive's ability to discharge Executive's
duties and responsibilities to the Company.
1.3. [Intentionally omitted]
1.4. Base Salary. For all the services rendered by Executive hereunder,
-----------
the Company shall pay Executive a base salary ("Base Salary"), commencing on the
Effective Date, at the annual rate of $275,000, payable in installments at such
times as the Company customarily pays its other senior level executives (but in
any event no less often than monthly). Executive's Base Salary shall be
reviewed annually for appropriate adjustment (but shall not be reduced below
that in effect on the Effective Date, or as subsequently increased, without
Executive's written consent) by the Board pursuant to its normal performance
review policies for senior level executives.
1.5. Short-Term Incentive Compensation. Executive shall be entitled to
---------------------------------
participate in any short-term incentive compensation programs established by the
Company for its senior level executives generally, depending upon achievement of
certain annual individual or business performance objectives specified and
approved by the Board (or a Committee thereof) in its sole discretion; provided,
however, that Executive's "target opportunity" and "maximum opportunity" under
any such program shall be at least 60% and 100%, respectively of Executive's
Base Salary. Executive's short-term incentive compensation shall be paid to
Executive not later than such payments are made to the Company's senior level
executives generally.
3
1.6. Long-Term Incentive Compensation. Executive shall also be entitled
--------------------------------
to participate in any long-term incentive compensation programs established by
the Company for its senior level executives generally, depending upon
achievement of certain business performance objectives specified and approved by
the Parent Company's Board of Directors (or a Committee thereof) in its sole
discretion. Executive's long-term incentive compensation, either in shares of
the Parent Company, options or cash, as applicable from time to time, shall be
paid to Executive not later than such payments are made to the Company's senior
level executives generally.
1.7. Initial Stock Option Grant. Immediately following the Closing,
--------------------------
Executive shall be granted a non-qualified phantom share option (for a term
expiring ten years thereafter) to purchase phantom ordinary shares of the Parent
Company, the number of which shall equal two times Executive's Base Salary
divided by the then current fair market value of a share of the Parent Company
(the "Option"). Executive's right to exercise the Option shall vest in 25%
increments on each of the first four anniversaries of the Effective Date, if, in
each case, Executive is then employed by the Company (except that in the case of
death, disability, as defined in Section 5.1, or removal without cause, as
provided in Section 5.4(b), Executive shall be fully vested in the Option). The
terms of the Option, to the extent not inconsistent with the provisions outlined
in this Section, shall be made subject to the terms of the Parent Company's
Phantom Share Option Scheme.
2. Confidential Information. Executive recognizes and acknowledges that
------------------------
by reason of Executive's employment by and service to the Company during and, if
applicable, after the Employment Term, Executive will have access to certain
confidential and proprietary information relating to the business of the
Company, which may include, but is not limited to, trade secrets, trade "know-
how", customer information, supplier information, cost and pricing
4
information, marketing and sales techniques, strategies and programs, computer
programs and software and financial information (collectively referred to as
"Confidential Information"). Executive acknowledges that such Confidential
Information is a valuable and unique asset of the Company and Executive
covenants that Executive will not, unless expressly authorized in writing by the
Board, at any time during the course of Executive's employment use any
Confidential Information or divulge or disclose any Confidential Information to
any person, firm or corporation except in connection with the performance of
Executive's duties for the Company and in a manner consistent with the Company's
policies regarding Confidential Information. Executive also covenants that at
any time after the termination of such employment, directly or indirectly,
Executive will not use any Confidential Information or divulge or disclose any
Confidential Information to any person, firm or corporation, unless such
information is in the public domain through no fault of Executive or except when
required to do so by a court of law, by any governmental agency having
supervisory authority over the business of the Company or by any administrative
or legislative body (including a committee thereof) with apparent jurisdiction
to order Executive to divulge, disclose or make accessible such information, in
which case Executive will inform the Company in writing promptly of such
required disclosure, but in any event at least 15 business days prior to
disclosure or the amount of time Executive has to respond to the required
request minus one day if shorter. All written Confidential Information
(including, without limitation, in any computer or other electronic format)
which comes into Executive's possession during the course of Executive's
employment shall remain the property of the Company. Unless expressly authorized
in writing by the Board, Executive shall not remove any written Confidential
Information from the Company's premises, except in connection with the
performance of Executive's duties for the Company and in a manner consistent
with the
5
Company's policies regarding Confidential Information. Upon termination of
Executive's employment, Executive agrees immediately to return to the Company
all written Confidential Information in Executive's possession. For the purposes
of this Section 2 and Section 4, the term "Company" shall be deemed to include
the Company and Affiliates, as defined in as defined in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934 (the
"Exchange Act").
3. Non-Competition; Non-Solicitation; Consideration.
------------------------------------------------
(a) The Company hereby agrees to pay Executive the amounts described
under this Agreement as being expressly conditioned on Executive's undertakings
under this Section and also agrees to provide Executive with, at Executive's
election, either, or in combination, (i) in exchange for the cancellation and
termination of the relevant options as of the Closing, a cash payment equal to
the value of the spread on all stock options previously granted to Executive by
the Company, whether or not vested as of the Effective Date, based upon the
price paid for shares of the Company by the Parent Company in the transaction
described above (which payment for options not vested prior to the Effective
Date shall be made in accordance with the terms set forth in the Agreement and
Plan of Merger), or (ii) that number of options to purchase phantom shares of
the Parent Company that preserves the inherent value of those stock options,
based on the conversion calculation attached hereto as Appendix A, previously
granted to Executive by the Company, whether or not vested as of the Effective
Date, that Executive elects to convert to fully-vested options to purchase
phantom shares of the Parent Company based upon the price paid for shares of the
Company by the Parent Company in the transaction described above. In exchange
for the consideration provided in the preceding sentence, during Executive's
employment by the Company and for a period of one year after Executive's
6
termination of employment for any reason, Executive will not anywhere in the
world, except with the prior written consent of the Company's Board of
Directors, directly or indirectly, own, manage, operate, join, control, finance
or participate in the ownership, management, operation, control or financing of,
or be connected as an officer, director, employee, partner, principal, agent,
representative, consultant or otherwise with, or use or permit Executive's name
to be used in connection with, any business or enterprise that is competitive
with any business or enterprise in which the Company is engaged in the fiscal
year of the Company in which Executive's termination of employment occurs or any
business or enterprise in which the Company has a written plan to become
engaged.
(b) The foregoing restrictions shall not be construed to prohibit the
ownership by Executive of less than five percent (5%) of any class of securities
of any corporation which is engaged in any of the foregoing businesses, provided
that such ownership represents a passive investment and that neither Executive
nor any group of persons including Executive in any way, either directly or
indirectly, manages or exercises control of any such corporation, guarantees any
of its financial obligations, otherwise takes any part in its business, other
than exercising Executive's rights as a shareholder, or seeks to do any of the
foregoing.
(c) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, directly or indirectly, (i) solicit, divert, take away, or attempt to
solicit, divert or take away, any of the Company's "Principal Customers,"
defined for the purposes hereof to include any customer of the Company, from
which $100,000 or more of annual gross revenues are derived at such time, or
(ii) encourage any Principal Customer to reduce its patronage of the Company.
7
(d) Executive further covenants and agrees that during Executive's
employment by the Company and for the period of one year thereafter, Executive
will not, except with the prior written consent of the Board, directly or
indirectly, solicit or hire, or encourage the solicitation or hiring of, any
person who was an employee of the Company at any time during the Employment Term
by any employer other than the Company for any position as an employee,
independent contractor, consultant or otherwise. The foregoing covenant of
Executive shall not apply to any individual after 12 months have elapsed
subsequent to the date on which such individual's employment or engagement by
the Company has terminated.
4. Equitable Relief.
----------------
(a) Executive acknowledges and agrees that the restrictions contained
in Sections 2 and 3 are reasonable and necessary to protect and preserve the
legitimate interests, properties, goodwill and business of the Company, that the
Company would not have entered into this Agreement in the absence of such
restrictions and that irreparable injury will be suffered by the Company should
Executive breach any of the provisions of those Sections. Executive represents
and acknowledges that (i) Executive has been advised by the Company to consult
Executive's own legal counsel in respect of this Agreement, (ii) Executive has
had full opportunity, prior to execution of this Agreement, to review thoroughly
this Agreement with Executive's counsel, and (iii) the provisions of Sections 2
and 3 are reasonable and these restrictions do not prevent Executive from
earning a reasonable livelihood.
(b) Executive further acknowledges and agrees that a breach of any of
the restrictions in Sections 2 and 3 cannot be adequately compensated by
monetary damages. Executive agrees that the Company shall be entitled to
preliminary and permanent injunctive relief, without the necessity of proving
actual damages, as well as provable damages and an
8
equitable accounting of all earnings, profits and other benefits arising from
any violation of Sections 2 or 3 hereof, which rights shall be cumulative and in
addition to any other rights or remedies to which the Company may be entitled.
In the event that any of the provisions of Sections 2 or 3 hereof should ever be
adjudicated to exceed the time, geographic, service, or other limitations
permitted by applicable law in any jurisdiction, it is the intention of the
parties that the provision shall be amended to the extent of the maximum time,
geographic, service, or other limitations permitted by applicable law, that such
amendment shall apply only within the jurisdiction of the court that made such
adjudication and that the provision otherwise be enforced to the maximum extent
permitted by law.
(c) Executive irrevocably and unconditionally (i) agrees that any
suit, action or other legal proceeding arising out of Sections 2 or 3 hereof,
including without limitation, any action commenced by the Company for
preliminary and permanent injunctive relief and other equitable relief, may be
brought in the United States District Court for the Western District of
Pennsylvania, or if such court does not have jurisdiction or will not accept
jurisdiction, in any court of general jurisdiction in Pittsburgh, Pennsylvania,
(ii) consents to the non-exclusive jurisdiction of any such court in any such
suit, action or proceeding, and (iii) waives any objection which Executive may
have to the laying of venue of any such suit, action or proceeding in any such
court. Executive also irrevocably and unconditionally consents to the service
of any process, pleadings, notices or other papers in a manner permitted by the
notice provisions of Section 8 hereof.
5. Termination. The Employment Term shall terminate upon the occurrence
-----------
of any one of the following events:
9
5.1. Disability. The Company may terminate the Employment Term if
----------
Executive is unable substantially to perform Executive's duties and
responsibilities hereunder to the full extent required by the Board by reason of
illness, injury or incapacity for six consecutive months, or for more than six
months in the aggregate during any period of twelve calendar months; provided,
however, that the Company shall continue to pay Executive's Base Salary until
the Company acts to terminate the Employment Term. If the Company terminates
the Employment Term, Executive shall be entitled to receive (i) any amounts
earned, accrued or owing but not yet paid under Section 1 above, and (ii) any
other benefits in accordance with the terms of any applicable plans and programs
of the Company. Otherwise, the Company shall have no further liability or
obligation to Executive for compensation under this Agreement. Executive
agrees, in the event of a dispute under this Section 5.1, to submit to a
physical examination by a licensed physician selected by the Board.
5.2. Death. The Employment Term shall terminate in the event of
-----
Executive's death. In such event, the Company shall pay to Executive's
executors, legal representatives or administrators, as applicable, an amount
equal to the installment of Executive's Base Salary set forth in Section 1.4
hereof for the month in which Executive dies. In addition, Executive's estate
shall be entitled to receive (i) any other amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company. Otherwise,
the Company shall have no further liability or obligation under this Agreement
to Executive's executors, legal representatives, administrators, heirs or
assigns or any other person claiming under or through Executive.
5.3. Cause. The Company may terminate the Employment Term, at any time,
-----
for "cause" upon written notice, in which event all payments under this
Agreement shall cease,
10
except for Base Salary to the extent already accrued, but Executive shall remain
entitled to any other benefits in accordance with the terms of any applicable
plans and programs of the Company. For purposes of this Agreement, Executive's
employment may be terminated for "cause" if (i) Executive is convicted of or
pleads guilty or nolo contendere to a felony or misdemeanor involving moral
---- ----------
turpitude, (ii) in the reasonable determination of the Board, Executive has (x)
committed an act of fraud, embezzlement, or theft in connection with Executive's
duties in the course of Executive's employment with the Company, (y) caused
intentional, wrongful damage to the property of the Company or intentionally and
wrongfully disclosed Confidential Information, or (z) engaged in gross
misconduct or gross negligence in the course of Executive's employment with the
Company or (iii) Executive materially and intentionally breached Executive's
obligations under this Agreement and shall not have remedied such breach within
30 days after receiving written notice from the Board specifying the details
thereof. For purposes of this Agreement, an act or omission on the part of
Executive shall be deemed "intentional" only if it was done by Executive not in
good faith and without reasonable belief that the act or omission was in the
best interest of the Company.
5.4. Termination Without Cause.
-------------------------
(a) The Company may remove Executive, at any time, without cause from
the position in which Executive is employed hereunder (in which case the
Employment Term shall be deemed to have ended) upon prior written notice to
Executive; provided, however, that, in the event that such notice is given,
Executive shall be under no obligation to render any additional services to the
Company and, subject to the provisions of Section 3 hereof, shall be allowed to
seek other employment. For purposes hereof, if the Company requires the
Executive to be based at a location in excess of fifty (50) miles from the
location of the Executive's principal job
11
location or office immediately prior to the Effective Date, except for required
travel on the Company's business to an extent substantially consistent with the
Executive's business travel obligations immediately prior to the Effective Date,
and the Executive refuses such assignment and resigns his position, such
resignation shall be treated as a removal without cause by the Company. Upon any
such removal, Executive shall be entitled to receive, as liquidated damages for
the failure of the Company to continue to employ Executive, only the amount due
to Executive under the Company's then current severance pay plan for employees.
No other payments or benefits shall be due under this Agreement to Executive,
but Executive shall be entitled to (i) any amounts earned, accrued or owing but
not yet paid under Section 1 above, and (ii) any other benefits in accordance
with the terms of any applicable plans and programs of the Company.
Notwithstanding anything in this Agreement to the contrary, on or after the date
Executive attains age 65, he shall not be eligible for any severance benefits
provided under this Agreement.
(b) Notwithstanding the provisions of Section 5.4(a) (other than the
last sentence), in the event that Executive executes and does not revoke a
written release upon such removal, substantially in the form attached hereto as
Annex 1, (the "Release"), of any and all claims against the Company and all
related parties with respect to all matters arising out of Executive's
employment by the Company (other than any entitlements under the terms of this
Agreement or under any other plans or programs of the Company in which Executive
participated and under which Executive has accrued a benefit), or the
termination thereof, Executive shall be entitled to receive, in lieu of the
payment described in Section 5.4(a), which Executive agrees to waive;
(i) as liquidated damages for the failure of the Company to
continue to employ Executive, a single cash payment, within 30 days after the
effective date of the removal,
12
equal to Executive's Base Compensation, as defined in Section 5.6 below;
provided, however, that the payment shall equal two multiplied by Executive's
Base Compensation in the event that the removal occurs prior to the second
anniversary of the Effective Date;
(ii) for a period equal to two years following the end of the
Employment Term, Executive and Executive's spouse and dependents shall be
eligible for a continuation of those Benefit Coverages, as in effect at the time
of such termination or removal, and as the same may be changed from time to
time, as if Executive had been continued in employment during said period or to
receive cash (including a tax equivalency payment for Federal, state and local
income and employment taxes assuming Executive is in the maximum tax bracket for
all such purposes) in lieu of such benefits or premiums, as applicable, where
such Benefit Coverages may not be continued (or where such continuation would
adversely affect the tax status of the plan pursuant to which the Benefit
Coverage is provided) under applicable law or regulations;
(iii) any other amounts earned, accrued or owing but not yet paid
under Section 1 above;
(iv) any other benefits in accordance with the terms of any
applicable plans and programs of the Company;
(v) as additional consideration for the confidentiality, non-
competition and non-solicitation covenants contained in Section 2 and 3, a
single cash payment, within 30 days after the effective date of the removal or
non-renewal, equal to Executive's Base Compensation; and
13
(vi) the Option, to the extent not already vested prior to the
removal, shall be fully vested and the Option shall be immediately exercisable
within 12 months after the removal.
5.5. Voluntary Termination. Executive may voluntarily terminate the
---------------------
Employment Term upon 30 days' prior written notice for any reason. In such
event, after the effective date of such termination, no further payments shall
be due under this Agreement except that Executive shall be entitled to (i) any
amounts earned, accrued or owing but not yet paid under Section 1 above, and
(ii) any benefits due in accordance with the terms of any applicable plan and
programs of the Company.
5.6. Base Compensation. "Base Compensation" shall mean Executive's
-----------------
annualized Base Salary as would be reported for federal income tax purposes on
Form W-2 for the respective calendar years within which the fiscal year of the
Company falls, together with any and all salary reduction authorized amounts
under any of the Company's benefit plans or programs for such fiscal year, and
all short-term incentive compensation at the target level to be paid to
Executive in all employee capacities with the Company attributable to such
fiscal year even if to be paid in the following fiscal year. "Base
Compensation" shall be the Base Compensation for the full fiscal year
immediately prior to Executive's removal. "Base Compensation" shall not include
the value of the Option, the grant of any subsequent stock options or any
exercise thereunder.
6. Survivorship. The respective rights and obligations of the parties
------------
under this Agreement shall survive any termination of Executive's employment to
the extent necessary to the intended preservation of such rights and
obligations.
14
7. Arbitration; Expenses. In the event of any dispute under the
---------------------
provisions of this Agreement other than a dispute in which the primary relief
sought is an equitable remedy such as an injunction, the parties shall be
required to have the dispute, controversy or claim settled by arbitration in the
City of Pittsburgh, Pennsylvania in accordance with National Rules for the
Resolution of Employment Disputes then in effect of the American Arbitration
Association, before a panel of three arbitrators, one of whom shall be selected
by the Company, one by the Executive, and the third of whom shall be selected by
the other two arbitrators. Any award entered by the arbitrators shall be final,
binding and nonappealable and judgment may be entered thereon by either party in
accordance with applicable law in any court of competent jurisdiction. This
arbitration provision shall be specifically enforceable. The arbitrators shall
have no authority to modify any provision of this Agreement or to award a remedy
for a dispute involving this Agreement other than a benefit specifically
provided under or by virtue of the Agreement. If Executive prevails on any
material issue which is the subject of such arbitration or lawsuit, the Company
shall be responsible for all of the fees of the American Arbitration Association
and the arbitrators and any expenses relating to the conduct of the arbitration
(including the Company's and Executive's reasonable attorneys' fees and
expenses). Otherwise, each party shall be responsible for its own expenses
relating to the conduct of the arbitration (including reasonable attorneys' fees
and expenses) and shall share the fees of the American Arbitration Association.
8. Notices. All notices and other communications required or permitted
-------
under this Agreement or necessary or convenient in connection herewith shall be
in writing and shall be deemed to have been given when hand delivered or mailed
by registered or certified mail, as follows (provided that notice of change of
address shall be deemed given only when received):
If to the Company, to:
15
FORE Systems, Inc.
0000 XXXX Xxxxx
Xxxxxxxxxx, XX 00000-0000
Attention: Vice President, Corporate Counsel and Secretary
With a required copy to:
Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxxxxx xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Esquire
16
If to Executive, to:
Xxxxx X. Xxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx Xxxx, XX 00000
or to such other names or addresses as the Company or Executive, as the case may
be, shall designate by notice to each other person entitled to receive notices
in the manner specified in this Section.
9. Contents of Agreement; Amendment and Assignment.
-----------------------------------------------
(a) This Agreement sets forth the entire understanding between the
parties hereto with respect to the subject matter hereof and cannot be changed,
modified, extended or terminated except upon written amendment approved by the
Board and executed on its behalf by a duly authorized officer and by Executive.
(b) All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective heirs,
executors, administrators, legal representatives, successors and assigns of the
parties hereto, except that the duties and responsibilities of Executive under
this Agreement are of a personal nature and shall not be assignable or
delegatable in whole or in part by Executive. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation,
reorganization or otherwise) to all or substantially all of the business or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly to assume and agree to perform this Agreement in the same
manner and to the extent the Company would be required to perform if no such
succession had taken place.
17
10. Severability. If any provision of this Agreement or application
------------
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction. If any provision is held void, invalid or unenforceable
with respect to particular circumstances, it shall nevertheless remain in full
force and effect in all other circumstances.
11. Remedies Cumulative; No Waiver. No remedy conferred upon a party by
------------------------------
this Agreement is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to any other
remedy given under this Agreement or now or hereafter existing at law or in
equity. No delay or omission by a party in exercising any right, remedy or
power under this Agreement or existing at law or in equity shall be construed as
a waiver thereof, and any such right, remedy or power may be exercised by such
party from time to time and as often as may be deemed expedient or necessary by
such party in its sole discretion.
12. Beneficiaries/References. Executive shall be entitled, to the extent
------------------------
permitted under any applicable law, to select and change a beneficiary or
beneficiaries to receive any compensation or benefit payable under this
Agreement following Executive's death by giving the Company written notice
thereof. In the event of Executive's death or a judicial determination of
Executive's incompetence, reference in this Agreement to Executive shall be
deemed, where appropriate, to refer to Executive's beneficiary, estate or other
legal representative.
13. Miscellaneous. All section headings used in this Agreement are for
-------------
convenience only. This Agreement may be executed in counterparts, each of which
is an original. It shall not
18
be necessary in making proof of this Agreement or any counterpart hereof to
produce or account for any of the other counterparts.
14. Withholding. The Company may withhold from any payments under this
-----------
Agreement all federal, state and local taxes as the Company is required to
withhold pursuant to any law or governmental rule or regulation. Executive
shall bear all expense of, and be solely responsible for, all federal, state and
local taxes due with respect to any payment received under this Agreement.
15. Governing Law. This Agreement shall be governed by and interpreted
-------------
under the laws of the Commonwealth of Pennsylvania without giving effect to any
conflict of laws provisions.
16. Establishment of Trust. The Company may but is not required to
----------------------
establish an irrevocable trust fund pursuant to a trust agreement to hold assets
to satisfy any of its obligations under this Agreement. Funding of such trust
fund shall be subject to the Board's discretion, as set forth in the agreement
pursuant to which the fund will be established.
19
IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have
executed this Agreement as of the date first above written.
FORE SYSTEMS, INC.
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxx
___________________________ By:_______________________
Title: President and
Chief Executive Officer
20
ANNEX 1
GENERAL RELEASE
---------------
1. I, Xxxxx X. Xxxxx, for and in consideration of certain payments to be made
and the benefits to be provided to me under Section 5.4(b) of the Agreement to
which this Annex 1 is attached, dated April 26, 1999, (the "Agreement") with
FORE Systems, Inc. (the "Company"), and conditioned upon such payments and
provisions, do hereby REMISE, RELEASE, AND FOREVER DISCHARGE the Company and
each of its subsidiaries and affiliates, their officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators (hereinafter collectively included
within the term the "Company"), acting in any capacity whatsoever, of and from
any and all manner of actions and causes of actions, suits, debts, claims and
demands whatsoever in law or in equity, which I ever had, now have, or hereafter
may have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with FORE Systems, Inc. to the date of these presents arising from or
relating in any way to my employment relationship, and the terms, conditions and
benefits payments resulting therefrom, including the payments and benefits under
Section 5.4(b) of the Agreement, my retirement and the termination of my
employment relationship with FORE Systems, Inc., including but not limited to,
any claims which have been asserted, could have been asserted, or could be
asserted now or in the future under any federal, state or local laws, including
any claims under the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C.
(S)621 et seq., Americans with Disabilities Act ("ADA"), 42 U.S.C. (S)2000e et
-- --- --
seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C. (S)2000e et seq., any
--- -- ---
contracts between the Company and me and any common law claims now or hereafter
recognized and all claims for counsel fees and costs; provided, however, that
this General Release shall not apply to (i) any entitlements under the terms of
the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit nor (ii) to my right to be
indemnified by the Company, pursuant to the bylaws of the Company, for any
liability, cost or expense for which I would have been indemnified for actions
taken on behalf of the Company during the term and within the scope of my
employment by the Company.
2. Subject to the limitations of paragraph 1 above, I expressly waive all
rights afforded by any statute which expressly limits the effect of a release
with respect to unknown claims. I understand the significance of this release
of unknown claims and the waiver of statutory protection against a release of
unknown claims.
3. I further agree and covenant that neither I, nor any person, organization or
other entity on my behalf, will file, charge, claim, xxx or cause or permit to
be filed, charged, or claimed, any action for personal equitable, monetary or
other similar relief against the Company (including any action for damages,
injunctive, declaratory or other relief), arising from or relating in any way to
my employment relationship, and the terms, conditions and benefits payments
resulting therefrom, including the payments and benefits under Section 3 of the
Agreement, my retirement and the termination of my employment relationship with
the Company, except as may be necessary to enforce the obligations of the
Company to me in accordance with the express terms
of the Agreement or under any other plans or programs of the Company in which I
participated and under which I have accrued a benefit, involving any matter
occurring from the beginning of my employment with FORE Systems, Inc. to the
date of these presents, or involving any continuing effects of any actions or
practices which may have arisen or occurred from the beginning of my employment
with FORE Systems, Inc. to the date of these presents, including any charge of
discrimination under Title VII of the Civil Rights Act of 1964, or ADEA. In
addition, I also agree and covenant that should I, or any other person,
organization or entity on my behalf, file, charge, claim, xxx or cause or permit
to be filed, charged, or claimed, any action prohibited by the preceding
sentence for personal equitable, monetary or other similar relief, despite my
agreement not to do so hereunder, or should I otherwise fail to abide by any of
the terms of this General Release, and any claim is made against the Company
that might result in liability of the Company to Executive, except to the extent
not covered by this General Release as stated above, then I will pay all of the
costs and expenses of the Company (including reasonable attorneys' fees)
incurred in the defense of any such action or undertaking.
4. I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on ___________________ and the Company has
no obligation, contractual or otherwise to me to hire, rehire or re-employ me in
the future. I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.
5. I hereby agree and acknowledge that the payments and benefits provided by
the Company are to bring about an amicable resolution of my employment
arrangements and are not to be construed as an admission of any violation of any
federal, state or local statute or regulation, or of any duty owed by the
Company and that the Agreement and this General Release are made voluntarily to
provide an amicable resolution of my employment relationship with the Company
and the termination of the Employment Agreement.
6. I hereby certify that I have read the terms of this General Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects. I acknowledge, further, that I am executing
this General Release of my own volition with a full understanding of its terms
and effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Employment Agreement, which I
acknowledge is adequate and satisfactory to me. None of the above-named
parties, nor their agents, representatives, or attorneys have made any
representations to me concerning the terms or effects of this General Release
other than those contained herein.
7. I hereby acknowledge that I have been informed that I have the right to
consider this General Release for a period of 21 days prior to execution. I
also understand that I have the right to revoke this General Release for a
period of seven days following execution by giving written notice to the Company
at 0000 XXXX Xxxxx, Xxxxxxxxxx, XX 00000-0000, Attention: Vice President,
Corporate Counsel and Secretary.
8. I hereby further acknowledge that the terms of Sections 2 and 3 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.
Intending to be legally bound hereby, I execute the foregoing General Release
this ______ day of _______________, ______.
--------------------- ---------------------------
Witness Xxxxx X. Xxxxx
APPENDIX A
At the Effective Time under the Agreement and Plan of Merger, each outstanding
Employee Option which the executive elects shall not be canceled or exercised
but shall be amended and converted into phantom stock units equivalent to a
number of ordinary shares of GEC, p.l.c. ("GEC Shares") (rounded down to the
nearest whole share) determined by multiplying the number of shares subject to
such Employee Option by the Conversion Ratio (as defined below), at a price per
GEC Share equivalent (rounded up to the nearest whole xxxxx) equal to (A) the
exercise price for the shares previously purchasable pursuant to such Employee
Option converted into pounds sterling at the Noon Buying Rate (as defined below)
divided by (B) the Conversion Ratio (each, as so adjusted, a "Substitute Phantom
Unit"). The value of each Substitute Phantom Unit will be payable upon exercise
(less applicable withholding Taxes), at Parent Company's election, in cash or
GEC Shares (provided that such GEC Shares are publicly traded on the London
Stock Exchange or a U.S. stock exchange) valued at the closing sales price for a
GEC Share on the London Stock Exchange (the "LSE") on the date of exercise and
shall have other terms and conditions comparable to those of the Employee Option
replaced by such Substitute Phantom Unit. The "Conversion Ratio" shall be equal
to U.S. $35 converted into pounds sterling at the noon buying rate in New York
City for cable transfers in pounds sterling as certified for customs purposes by
the Federal Reserve Bank of New York on the date of the Effective Time (the
"Noon Buying Rate") divided by an amount equal to the average of the closing
price for a GEC Share on the LSE for the twenty trading days preceding the
Effective Time and weighted for trading volumes of GEC Shares on each such day.
In the event another company becomes the successor ultimate parent of Parent,
the shares of such successor will be substituted for GEC Shares on an equitable
basis.
