1
EXHIBIT 10.26
October 13, 1997
Xx. Xxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxxxx X.
Xxxx Xxxxx, Xxxxxxx 00000
Dear Xxxx,
You have been advised that today, October 13, 1997, is your
final day at Frontier. It is our intention to honor your
employment agreement ("Agreement") as explained below. We assume
that you, too, have honored it to date, and will continue to
honor those provisions that continue to apply in the future. You
should recognize below that your service and your contribution to
the Company have led us to take some additional steps that we
believe are uniquely favorable to you.
The Agreement itself will not be renewed, and will be
terminated today as explained below. Likewise, the Change of
Control provisions in that Agreement are to be terminated at the
same time.
There are a number of issues that must be addressed that are
outside the scope of the Agreement. These include: your pension
arrangements, certain stock option and restricted stock issues,
and your continued availability with respect to any Frontier
matters in which you were an active participant. This Agreement
is intended to resolve all of these issues at one time, and to
permit Frontier and you to pursue other interests without facing
any complicating disagreements.
We intend to address these issues as follows. We expect
that in consideration of the mutual promises and benefits,
explained below, your signature will show that you and Frontier
agree to these arrangements. In the event you do not sign, we
2
will implement this arrangement unilaterally, but may elect not
to make any disbursements pending your acceptance.
1. The effective date of the termination of the Agreement
is to be today, October 13, 1997. (This will also include
ending, by resignation, removal or replacement, as appropriate,
any positions that you hold as an officer or director of Frontier
or any of its affiliates or subsidiaries.)
You will receive a severance payment that has been
calculated under the terms of the Agreement. Since the
likelihood of a bonus in 1997 for the employees at your level is
doubtful, there will be no bonus component in your severance, and
no bonus will be paid in the future. You may elect to discuss
with Xxx Xxxxxxxxxx the opportunity to obtain the severance as
salary continuation as a part of your tax planning.
The amounts actually provided to you will be net of federal,
state and local taxes and other withholdings of a kind such as
are normally made to your pay. The total will be paid in a lump
sum as soon as administratively practical after seven days after
the date of your signature. Once we have made normal
withholdings and related payments to the government, any tax that
may be owed or payable is your sole responsibility, excluding any
FICA payments. You must indemnify Frontier should any liability
be imposed on it for taxes, interest or penalties that you owe or
that are payable by you on the severance payments.
The amounts set out above are separate from and in addition
to any benefits or amounts that you are eligible to receive under
any Frontier benefit plan in which you participate. Your rights
to such standard benefits or amounts shall continue to be as set
forth in the relevant plan documents. Payouts of money invested
in the Supplemental Retirement Savings Plan will commence in
accord with the payment schedule you have previously selected.
Finally, assuming you elect to retire, you will retain the
opportunity to obtain a payout under the existing restricted
stock plans in which you participate, if the targets set out in
the applicable plans are achieved within the time frames
3
established. In addition, as a retiree, the options for Frontier
shares under the Management Stock Incentive Plan that you now
hold will continue to vest, and may be exercised during the term
under which they were granted.
If there are any cash advances or expenses that must be
cleared, you must advise us and resolve them.
2. The terms and conditions of your Agreement include
provisions that will survive your termination of employment. We
expect that you will strictly honor the provisions related to
confidential information, non-solicitation, non-competition, and
intellectual property. If there should be an opportunity
afforded to you that may implicate the non-competition provision,
we expect you to identify it to us in confidence, and we will
address it with you to seek a fair resolution. In accordance
with the Frontier Corporation Code of Ethics and Business
Conduct, you have agreed that after your employment you will not
publish, disclose, use, or authorize anyone else to publish,
disclose or use any private, confidential or proprietary
information that you may have in any way acquired, learned,
developed or created by reason of your employment with Frontier.
3. We will agree with you to accelerate and to complete
the previously-agreed bridging of your pension eligibility, by
providing you with the minimum additional years remaining to be
bridged under the Supplemental Management Pension Plan. This
will be additional consideration for your unconditional agreement
to adhere strictly to the various Agreement provisions that
survive, and to be available to Frontier at reasonable times with
respect to investigations, litigation or business transactions.
4. There is no further vacation or PTO time which is
available to you after today. Unused vacation or PTO time will
be prorated in relation to the calendar year, and paid as the law
requires. You will also be paid for any vacation time that was
banked.
We require that you promptly vacate your apartment, leave it
in good condition, and return the keys. Also, you currently have
4
available to you for your use an automobile that is owned or
leased by Frontier. This automobile and all keys must be
returned promptly to Frontier in good condition. All other
Frontier property must also be returned.
5. Benefits and perquisites made available to you, such as
payments or reimbursements related to club memberships,
telecommunications services, financial counseling and the like,
will terminate when your employment terminates. You will receive
the required COBRA bridging or transitional coverage if you elect
it. More information on COBRA is available to you on request.
6. To clarify the matters related to investigations,
business transactions and litigation, you may have been involved
in a number of situations in which your future involvement or
counsel may be needed. We expect you to make yourself available
to Frontier at reasonable times stipulated by Frontier to assist
Frontier on these matters. Frontier will pay for the reasonable
costs of your travel and related expenses. We expect you to
cooperate fully in the handling of such matters, which are to be
controlled by counsel for Frontier. If you require your own
counsel, it must be confirmed in advance, and we will then pay
such reasonable fees as are incurred and documented. You agree
to travel so as to assist Frontier, to provide information
truthfully and to the best of your knowledge and recollection,
and where requested, to provide sworn testimony.
7. We require you to release and discharge Frontier, its
officers, agents, employees, subsidiaries, affiliates and
successors in interest from any and all claims of any kind which
you, or anyone acting on your behalf or claiming rights through
you, including agents, executors, heirs, devisees or assigns, now
have or ever had, whether known or unknown, up to and including
October 13, 1997, or arising out of your employment with Frontier
or any Frontier Company, including any rights or claims under
this Agreement, except as specifically set out here.
In return, Frontier, its subsidiaries, affiliates and agents
will release, waive and discharge you and your heirs, assigns,
and agents from each and every claim, action, or right of any
sort, known or unknown, relating to events or matters occurring
5
or arising on or before October 13, 1997. No matter specifically
addressed here will be deemed in violation of the Agreement.
8. We require that you will keep confidential the terms
and conditions of this Agreement, and you will not disclose them
to any person other than your legal and/or financial advisor(s),
and your immediate family, unless compelled by law to do so. If
a person not a party to this Agreement requests or demands, by
subpoena or otherwise, that you disclose or produce this
Agreement or any terms or conditions thereof, you will notify us
and give us time to respond before taking any action or making
any disclosure. We will make those disclosures required of us.
We will respond to inquiries in a manner that is consistent
with our policy of verifying the fact of employment, the position
and the length of service. We invite you to seek personal
references within the Company with whom you feel comfortable.
9. YOU SHOULD READ THE FOLLOWING DISCLOSURE THAT IS
REQUIRED BY LAW. THE RELEASE FROM YOU WE REQUEST HERE INCLUDES
BUT IS NOT LIMITED TO CLAIMS, ACTIONS OR CAUSES OF ACTION
ASSERTED OR WHICH COULD HAVE BEEN ASSERTED UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED, TITLE VIII
OF THE CIVIL RIGHTS ACT OF 1964, THE NEW YORK (OR ANY OTHER
STATE'S) HUMAN RIGHTS LAW, THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT, OR THE AMERICANS WITH DISABILITIES ACT, AS ANY HAVE
BEEN AMENDED, and any claims, actions or causes of action for
wrongful discharge, unjust dismissal, constructive discharge,
breach of any written, oral or implied promise or agreement
related to employment, salary, severance payments, benefits,
other compensation, or attorneys' fees or costs related to
employment or compensation.
IN EXECUTING THIS AGREEMENT, YOU AGREE THAT YOU HAVE BEEN
GIVEN AT LEAST 45 DAYS IN WHICH TO CONSIDER SIGNING THIS LETTER
AGREEMENT AND THE RELEASE SET OUT JUST ABOVE, EVEN THOUGH YOU MAY
EXECUTE IT WITHIN THAT TIME. YOU ACKNOWLEDGE AND AGREE THAT YOU
HAVE HAD THE OPPORTUNITY TO CONSULT WITH AN ATTORNEY OF YOUR
CHOICE CONCERNING THIS AGREEMENT. YOU AGREE THAT YOU HAVE
CAREFULLY READ AND FULLY UNDERSTAND ALL THE PROVISIONS OF THIS
AGREEMENT, AND ARE ENTERING INTO THIS AGREEMENT VOLUNTARILY. YOU
6
AGREE THAT THE COMPENSATION YOU ARE RECEIVING FOR EXECUTING THIS
AGREEMENT IS GREATER THAN WHAT YOU WOULD HAVE BEEN ENTITLED TO IN
THE ABSENCE OF THIS AGREEMENT. YOU HAVE NOT RELIED UPON ANY
REPRESENTATION OR STATEMENT, WRITTEN OR ORAL, NOT SET FORTH IN
THIS AGREEMENT.
YOU HAVE THE RIGHT TO REVOKE THIS AGREEMENT WITHIN SEVEN
DAYS OF SIGNING IT, AND IT WILL NOT BECOME EFFECTIVE UNTIL THE
SEVEN DAY PERIOD HAS EXPIRED. IF YOU HAVE RECEIVED ANY
COMPENSATION WITHIN THIS SEVEN DAY PERIOD RELATED TO THIS
AGREEMENT, YOU AGREE TO RETURN SUCH COMPENSATION TO FRONTIER
IMMEDIATELY AFTER ANY REVOCATION.
10. You should also recall that you are a Section 16
"insider", and that there are obligations with respect to
holding such status that continue for a period of six months into
the future. We require that you will comply with the rules
applicable to this status.
We believe that what is set out above reflects a fair
reading of the Agreement and a reasonable method to wind things
up. If you should elect to reject this proposed resolution of
the Agreement, Frontier reserves the right to take other steps
available to it under the Agreement, and may elect to make no
disbursements pending resolution of the Agreement and other
issues.
If you are willing to agree with the terms of this
Agreement, please signify your consent by signing this letter in
the place provided below, and returning the original to me.
You should contact Xxx Xxxxxxxxxx at 000-000-0000 with any
questions about the implementation of this action. Thank you.
Very truly yours,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Chief Executive Officer
7
AGREEMENT
I have reviewed this Agreement, including the recitals set
out in paragraphs 9 and 10, and by signing below, signify that I
agree with what is stated above, I have had sufficient
opportunity to seek outside legal advice, and I am willing to,
and do agree with its terms and conditions. The effective date
of this Agreement is October 13, 1997.
/s/ Xxxx X. Xxxxxxx
Dated: October 13, 1997 -----------------------------
Xxxx X. Xxxxxxx
8
RESIGNATION
I resign from any and all positions as officer or director
of Frontier or any Frontier affiliate or subsidiary, effective
immediately.
/s/ Xxxx X. Xxxxxxx
Dated: October 13, 1997 ----------------------------
Xxxx X. Xxxxxxx
