Exhibit 10yy
TRANSITION AGREEMENT
THIS AGREEMENT is made and entered into this 11th day of August, 2004,
by and between BellSouth Corporation, a Georgia corporation ("Company"), and
Xxxxxxx X. Xxxxxx ("Executive") (each, a "Party" and, collectively, the
"Parties"):
Reasons for this Agreement. Executive has been employed by Company and
its Affiliated Companies since 1998. During his tenure, Executive has served as
Company's General Counsel, having overall responsibility for the legal affairs
of Company and reporting to Company's Chief Executive Officer.
Executive acknowledges that Company and Affiliated Companies have
disclosed or made available Confidential Information to Executive that could be
used by Executive to Company's or Affiliated Companies' detriment. In addition,
in connection with his employment, Executive has developed important
relationships and contacts with employees valuable to Company and Affiliated
Companies.
Executive further acknowledges that the restrictive covenants in this
Agreement are fair and reasonable, that enforcement of the provisions of this
Agreement will not cause him undue hardship, and that the provisions of this
Agreement are reasonably necessary and commensurate with the need to protect
Company and Affiliated Companies and their business interests and property from
irreparable harm.
Executive has agreed to separate from service with Company on the terms
and conditions stated in this Agreement.
Agreement. In consideration of the mutual promises contained in this
Agreement including, among other things, substantial additional compensation and
benefits to Executive, and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, Executive and Company agree as
follows:
1. Separation Date. Executive separates and resigns from employment
with Company effective August 9, 2004 ("Separation Date").
2. Compensation. Company shall pay to Executive the gross sum of Seven
Hundred Eighty Thousand Three Hundred and 00/100 Dollars ($780,300.00), less
withholdings, in two equal installments. The first such installment, in the
amount of Three Hundred Ninety Thousand One Hundred Fifty and 00/100 Dollars
($390,150.00), shall be paid within thirty (30) days following execution of this
Agreement (but, in no event, sooner than the eighth day following execution of
this Agreement). The second such installment, also in the amount of Three
Hundred Ninety Thousand One Hundred Fifty and 00/100 Dollars ($390,150.00), less
withholdings, shall be paid as soon as administratively practicable after
January 1, 2005, but in
no event later than January 10, 2005. Executive understands and acknowledges
that, absent this Agreement, he would not be entitled to such payments under
Company's existing policies.
3. BellSouth Supplemental Life Insurance Plan. As of the Separation
Date, Executive shall be deemed to have retired while eligible for a SERP
service benefit for purposes of the BellSouth Supplemental Life Insurance Plan.
4. BellSouth Corporation Stock Plan Grants.
(a) Stock Options. With respect to Non-Qualified Stock Options (as such
term is defined in the Stock Plan) granted to Executive pursuant to the Stock
Plan that, at the Separation Date, are not exercisable, Company shall pay to
Executive an amount determined by multiplying the pro rata number of options in
each such grant (determined by multiplying the total number of options awarded
in any grant by a fraction, the numerator of which is the number of whole or
partial calendar months elapsed from the date of grant until the Separation Date
and the denominator of which is the number of calendar months in the full
vesting period) by the amount, if any, by which $26.86 exceeds the applicable
exercise price. Such amount, less withholdings, shall be payable in a single
lump sum at the same time as payment of the first installment described in
Section 2 of this Agreement.
(b) Restricted Shares. Restricted Shares (as such term is defined in
the Stock Plan) awarded to Executive pursuant to the Stock Plan, to the extent
not vested on the Separation Date, shall vest on the Separation Date pro-rata
(determined by multiplying the total number of Restricted Shares awarded in any
grant by a fraction, the numerator of which is the number of whole or partial
calendar months elapsed from the date of grant until the Separation Date and the
denominator of which is the number of calendar months in the full vesting
period), notwithstanding provisions to the contrary contained in the Award
Agreements; provided, that Executive shall not sell or otherwise dispose of the
net (after tax withholding) number of shares delivered to Executive as a result
of vesting pursuant to this Section 4(b) prior to the first anniversary of the
Separation Date.
(c) Performance Shares. Performance Shares (as such term is defined in
the Stock Plan) awarded to Executive pursuant to the Stock Plan shall be
pro-rated (determined by multiplying the Performance Shares awarded in any grant
by a fraction, the numerator of which is the number of whole or partial calendar
months elapsed from the date of grant until the Separation Date and the
denominator of which is the number of calendar months in the full performance
period), with Executive entitled to payments, if any, with respect to such
pro-rata number of Performance Shares under the terms of the Award Agreements as
if his employment had not terminated.
5. 2004 Short Term Bonus. Executive shall be entitled to an award under
the BellSouth Officer Short Term Incentive Award Plan ("STIAP") for the calendar
year 2004 performance period, equal to 100% of Executive's standard award under
STIAP for 2004. Such amount, less withholdings, shall be payable in a single
lump sum at the same time as payment of
the first installment described in Section 2 above, and shall be subject to all
other terms and conditions of STIAP.
6. COBRA Coverage. If Executive, following his termination of
employment, shall elect continuation coverage of Company health benefits under
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), Company
shall pay to Executive an amount equal to the applicable monthly premium for
Executive's COBRA coverage at commencement multiplied by eighteen (18). Such
amount shall be paid, less withholdings, in a single lump sum at the same time
as payment of the first installment described in Section 2 of this Agreement.
7. Financial Counseling. Executive shall be entitled to reimbursement
for financial counseling services for a period of one (1) year after the
Separation Date, such reimbursement and services to be provided in such form and
manner and subject to such rules and conditions as shall apply under procedures
implemented by Company from time to time with respect to such financial
counseling services for separating officers.
8. Outplacement Services. Executive shall be entitled to outplacement
services to be provided by Xxx Xxxxx Xxxxxxxx under its BellSouth Executive
Career Transition Service, with executive suite office space, for a period of
six (6) months following the Separation Date (or until the date Executive
becomes employed on a substantially full-time basis, if sooner); provided that
total outplacement costs to be borne by Company shall in no event exceed
$2,400.00 per month.
9. Discharge and Waiver. Executive fully releases and forever
discharges Company and Affiliated Companies, and any employee, officer,
director, representative, agent, successor or assign of Company and Affiliated
Companies (both in their personal and official capacities), and all persons
acting by, through and under or in concert with any of them, from any and all
claims, demands, causes of action, remedies, obligations, costs and expenses of
whatever nature, whether under the common law, state law, federal law (including
but not limited to the Age Discrimination in Employment Act of 1967) or
otherwise, through the date of this Agreement, including those arising from or
in connection with the terms and conditions of employment with Company (and
Affiliated Companies). This paragraph is not intended to and shall not affect
benefits to which Executive may be entitled under any pension, savings, health,
welfare, or other benefit plan in which Executive is a participant.
10. Covenant Not to Xxx. Executive covenants and agrees not to make or
file any claim, demand or cause of action or seek any remedy of whatever nature,
whether under the common law, state law, federal law or otherwise, arising from
or in connection with the matters discharged and waived in Section 9, above.
Notwithstanding the foregoing, in the event Executive files a charge or lawsuit
under the Age Discrimination in Employment Act of 1967 (ADEA), and thereby
challenges the validity of the release described in Section 9, such charge or
lawsuit will not be considered a breach of this Section 10.
11. Executive Cooperation. Executive shall cooperate fully with and
provide assistance to Company and Affiliated Companies and shall, upon
reasonable notice, furnish such information to Company and Affiliated Companies
as may reasonably be requested by Company, in connection with legal and other
matters involving Company or an Affiliated Company with respect to which
Executive was involved during his tenure.
12. Return of Property. Executive agrees that he will return to Company
any and all Company and Affiliated Company property in his possession or
control, including, but not limited to, all personal items or equipment provided
to Executive by Company or an Affiliated Company for use during his employment,
together with all written or recorded materials, documents, computer discs,
plans, records, notes, files, drawings or papers, and any copies thereof,
relating to the affairs of Company or an Affiliated Company, including in
particular, all notes or records relating to legal affairs of Company or any
Affiliated Company.
13. Nondisparagement of BellSouth by Executive. Executive agrees not to
encourage, support or solicit claims against Company or any Affiliated Company.
Executive further agrees not to make any oral or written statement or take any
other action that is detrimental or hostile to Company or any Affiliated Company
or which disparages or criticizes Company's or any Affiliated Company's
management or practices, damages Company's or any Affiliated Company's good
reputation, or impairs their normal operations; provided, however, that nothing
herein shall be construed to prohibit Executive from making disclosures required
by law or pursuant to compulsory process issued in connection with any
administrative or judicial proceeding or if such disclosure is required by a
lawfully issued subpoena.
14. Confidential Information. Executive agrees to protect Confidential
Information from misuse or unauthorized disclosure. In addition to complying
with all applicable laws governing trade secret and confidential information
disclosure, Executive will not (i) use, except in connection with work for
Company or Affiliated Companies, or threaten to use, or (ii)disclose,
communicate or give others access to (orally, in writing, electronically or
digitally) or threaten to disclose, communicate or give other access to any
Confidential Information. For purposes of this Agreement, "Confidential
Information" shall mean information, whether generated internally or externally,
whether in written, oral, digital, electronic or any other form or format,
relating to Company's or Affiliated Companies' businesses that derives economic
value, actual or potential, from not being generally known to other Persons and
is the subject of efforts that are reasonable under the circumstances to
maintain its secrecy or confidentiality, including, but not limited to, studies
and analyses, technical or nontechnical data, programs, patterns, compilations,
devices, methods, models (including cost and /or pricing models and operating
models), techniques, drawings, processes, employee compensation data, and
financial data (including marketing information and strategies and personnel
data). For purposes of this Agreement, Confidential Information does not include
information that is not a trade secret three (3) years after termination of
Executive's employment with Company, but shall continue to include trade secrets
as long as information remains a trade secret under applicable law. Executive
acknowledges that any use of, reliance upon, disclosure or other
misappropriation of Confidential Information inconsistent with the terms of this
Agreement (including without limitation
acceptance by Executive of a position in which the inevitability of such use,
reliance, disclosure or misappropriation is reasonably anticipated) would result
in material and irreparable damage and injury to Company or Affiliated
Companies. Notwithstanding the foregoing, Executive agrees to maintain forever
the confidentiality of all communications protected by the attorney-client and
work-product privilege.
15. Limitation on Solicitation of Company Personnel. In consideration
of the additional payments, benefits and other rights that are being provided to
Executive under this Agreement, while employed by Company or an Affiliated
Company and during a period of two (2) years after any termination of his
employment, Executive will not, directly or indirectly, induce or solicit any
employee or other personnel, director, advisor or independent contractor of
Company or any Affiliated Company to sever his or its relationship with Company
or the Affiliated Company, or recruit or attempt to recruit such parties to
enter into a substantially similar relationship with another business; provided,
however, that after termination of Executive's employment this restriction shall
apply only to parties with whom Executive had material contact within two (2)
years prior to the termination of his employment. However, Executive may hire or
otherwise engage on behalf of himself or on behalf of any company or entity any
party who terminated his or its relationship with the Company or an Affiliated
Company without any inducement or attempted inducement or solicitation by
Executive.
16. Interpretation; Severability of Invalid Provisions. Executive
acknowledges and agrees that the limitations described in this Agreement,
including specifically the limitations upon his activities, are reasonable in
scope, are necessary for the protection of Company's and Affiliated Companies'
business, and form an essential part of the consideration for which this
Agreement has been entered into. It is the intention of the Parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
applicable laws and public policies. Nonetheless, the rights and restrictions
contained in this Agreement may be exercised and shall be applicable and binding
only to the extent they do not violate any applicable laws and are intended to
be limited to the extent necessary so that they will not render this Agreement
illegal, invalid or unenforceable. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, the remaining provisions shall
remain in full force and effect. The provisions of this Agreement do not in any
way limit or abridge Company's or Affiliated Companies' rights under the laws of
unfair competition, trade secret, copyright, patent, trademark or any other
applicable law(s), all of which are in addition to and cumulative of Company's
or Affiliated Companies' rights under this Agreement. Executive agrees that the
existence of any claim by Executive against Company or any Affiliated Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to enforcement by Company or any Affiliated Company of any or all of
such provisions or covenants.
17. Relief. (a) The Parties acknowledge that a breach or threatened
breach by Executive of any of the terms of this Agreement would result in
material and irreparable damage and injury to Company or Affiliated Companies,
and that it would be difficult or impossible to establish the full monetary
value of such damage. Therefore, Company and Affiliated Companies shall be
entitled to injunctive relief in the event of Executive's breach or threatened
breach of any of the terms contained in this Agreement. In the event of any
breach or threatened breach of this Agreement by Executive, if Company or any
Affiliated Company should employ attorneys or incur other expenses for the
enforcement of any obligation or agreement of Executive contained herein,
Executive agrees that, on demand and to the extent permitted by law, Executive
shall reimburse Company or the Affiliated Company for its reasonable attorneys'
fees and such other reasonable expenses so incurred.
(b) In the event that Executive fails to comply with the terms
of this Agreement, in addition to all other rights and remedies available to
Company and Affiliated Companies under this Agreement or at law or in equity,
all amounts otherwise payable by Company or an Affiliated Company to (or on
behalf of) Executive pursuant to the terms of this Agreement in excess of $100
for periods subsequent to the date of such failure shall be forfeited and
Company and Affiliated Companies shall cease to be under any further obligation
to Executive with respect to the compensation and benefits described in this
Agreement, and Executive shall refund to Company promptly any and all amounts
previously paid to or on behalf of Executive pursuant to the terms of this
Agreement in excess of $100 for periods subsequent to the occurrence of such
failure.
18. Arbitration. Except for the right to seek temporary restraint or
interim injunctive relief from a court of competent jurisdiction as provided in
Section 17, any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity of any provision hereof
(collectively, a "Claim") shall be settled by arbitration pursuant to the
National Rules for the Resolution of Commercial Disputes of the American
Arbitration Association. Any such arbitration shall be conducted by one
arbitrator, with experience in the matters covered by this Agreement, mutually
acceptable to the Parties. If the Parties are unable to agree on the arbitrator
within thirty (30) days of one party giving the other party written notice of
intent to arbitrate a Claim, the American Arbitration Association shall appoint
an arbitrator with such qualifications to conduct such arbitration. The decision
of the arbitrator in any such arbitration shall be conclusive and binding on the
Parties. Any such arbitration shall be conducted in Atlanta, Georgia.
The Parties indicate their acceptance of the foregoing arbitration
requirement by initialing below:
/s/ RDS /s/ CRM
---------------------- ------------------------
Company Executive
19. Agreement Binding. This Agreement shall be binding upon and inure
to the benefit of Company and Affiliated Companies, and their successors,
assignees, and designees, and Executive and Executive's heirs, executors,
administrators, personal representatives and assigns.
20. Entire Agreement; Previous Agreement. This Agreement and all
exhibits to this Agreement (which are incorporated into the Agreement by
reference) contain the entire
agreement between the Parties and no statements, promises or inducements made by
either Party, or agent of either Party, which are not contained in this
Agreement shall be valid or binding; provided, however, that the matters dealt
with herein supersede the terms of Company benefit plans and agreements between
the Parties entered into pursuant to such plans only to the extent the
provisions of such plans and related agreements are inconsistent with this
Agreement and other provisions of such plans and related agreements not
inconsistent with this Agreement are not affected. This Agreement may not be
enlarged, modified or altered except in writing signed by the Parties.
21. Nonwaiver. The failure of Company or any Affiliated Companies to
insist upon strict performance of the terms of this Agreement, or to exercise
any option herein, shall not be construed as a waiver or a relinquishment for
the future of such term or option, but rather the same shall continue in full
force and effect.
22. Notices. All notices, requests, demands and other communications
required or permitted by this Agreement or by any statute relating to this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered or mailed, first-class, certified mail, postage prepaid, addressed to
Company or Executive at the address reflected on Exhibit "A" attached hereto and
incorporated by herein by this reference.
23. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
24. Governing Law; Consultation with Counsel. This Agreement shall be
construed under and governed by the laws of the State of Georgia. Executive has
been advised to consult with an attorney, acknowledges having had ample
opportunity to do so and fully understands the binding effect of this Agreement.
In this regard, Executive acknowledges that a copy of this Agreement was
provided to Executive for review and consideration for up to twenty-two (22)
days. Further, Executive understands that this Agreement may be revoked by
Executive within seven (7) days from the date of execution of this Agreement.
Executive further acknowledges that he is a sophisticated businessperson and
that given his opportunity to review, negotiate and reject this Agreement, has
bargaining power equal to that of Company. Therefore, the provisions of this
Agreement shall not be construed against Company.
25. Definitions. For purposes of this Agreement, the following terms
shall have the meaning specified below:
(a) "Affiliated Companies" shall mean those subsidiaries and affiliates
of Company listed on Exhibit "B" attached hereto and incorporated herein by this
reference and any direct successors to those companies through acquisition or
merger or by way of name change.
(b) "Award Agreements" shall mean the agreements and documents pursuant
to which grants of Restricted Shares and Performance Shares, as the case may be,
have been made to Executive under the Stock Plan.
(c) "Confidential Information" shall have the meaning ascribed to such
term in Section 14 of this Agreement.
(d) "Separation Date" shall have the meaning ascribed to such term in
Section 1 of this Agreement.
(e) "Person" shall mean any individual, corporation, limited liability
entity, bank, partnership, joint venture, association, joint stock company,
trust, unincorporated organization, governmental or other legal or business
entity.
(f) "SERP" shall mean the BellSouth Corporation Supplemental Executive
Retirement Plan, as amended from time to time.
(g) "Stock Plan" shall mean the Amended and Restated BellSouth
Corporation Stock Plan, effective April 24, 1995, as amended.
IN WITNESS WHEREOF, Company has caused this Agreement to be executed by
its duly authorized representative, and Executive has executed this Agreement,
as of the date written above.
EXECUTIVE: BELLSOUTH CORPORATION
/s/ Xxxxxxx X. Xxxxxx By: /s/ X. X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxx Title: Vice President - Human Resources
EXHIBIT A
NOTICES
To Company: Xxxxxxx X. Xxxxxxxxxx
Vice President - Human Resources
BellSouth Corporation
Suite 2003
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
To Executive: Xxxxxxx X. Xxxxxx
x/x Xxxxxx X. Xxxxxxx, Xxx.
Xxxxxxxxx, Xxxxxx & Xxxxxx, LLP
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
(or at such other address as Executive provides to
Company from time to time)
