EXECUTIVE SEVERANCE AGREEMENT
THIS AGREEMENT is made and entered into this ____ day of ______________,
19__, by and between BellSouth Corporation, a Georgia corporation (the
"Company"), and ____________________ (the "Executive").
REASONS FOR THIS AGREEMENT. The Company recognizes the valuable services
that the Executive has rendered and continues to render to the Company and its
Affiliated Companies. On behalf of itself, its Affiliated Companies and its
shareholders, the Company desires to encourage the Executive's continued service
and dedication in the performance of the Executive's duties, and attention to
the business and affairs of the Company and its Affiliated Companies,
notwithstanding the possibility, threat or occurrence of a change in control.
The Company believes that it is in the best interests of the Company and its
shareholders to minimize the distractions, risks and uncertainties for the
Executive which may be expected to arise in connection with a change in control
by providing assurances to the Executive that the Executive will not be
materially disadvantaged by a change in control.
AGREEMENT. In consideration of the Executive's continued service to the
Company, the covenants and agreements contained in this Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Executive and the Company agree as follows:
I. DEFINITIONS.
For purposes of this Agreement, the following terms shall have the meanings
specified below:
(a) "AFFILIATED COMPANIES" shall mean all of the Company's subsidiaries,
divisions, and other affiliated companies or entities.
(b) "CAUSE" shall mean the Executive's willfully engaging in conduct that
is demonstrably and materially injurious to the Company. For purposes of this
subsection I(b), no act, or failure to act, on the part of the Executive shall
be deemed "willful" unless committed by the Executive in bad faith and without
reasonable belief that such action or omission was in the best interest of the
Company. Notwithstanding the foregoing, the Executive shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to the Executive a certificate of a resolution duly adopted by the affirmative
vote of not less than seventy-five percent (75%) of the entire membership of the
Board of Directors of the Company, at a meeting of the Board (after reasonable
notice to the Executive and an opportunity for the Executive, together with the
Executive's legal counsel, to be heard before the Board),
finding that in the good faith opinion of the Board, the Executive has engaged
in the conduct set forth in this subsection I(b) and specifying the particulars
thereof in detail.
(c) "CHANGE IN CONTROL" shall mean:
(i) any "person" (as such term is defined in the Securities
Exchange Act of 1934, as amended), other than a trustee or other fiduciary
holding securities under an employee benefit plan of the Company (or of
another entity owned directly or indirectly by the shareholders of the
Company in substantially the same proportions as their ownership of stock
of the Company), becomes the "beneficial owner" (as defined in Rule 13d-3
under said Act), directly or indirectly, of securities of the Company
representing 20% or more of the total voting power represented by the
Company's then outstanding voting securities;
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the Board of Directors of the
Company and any new director whose election by the Board of Directors or
nomination for election by the Company's shareholders was approved by a
vote of at least two-thirds of the directors who either were directors at
the beginning of the two year period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof;
(iii) the consummation of a merger, plan of reorganization,
consolidation, share exchange, or other transaction, in one or a series of
related transactions, involving the Company, if immediately following such
merger, plan of reorganization, consolidation, share exchange, or other
transaction or transactions the holders of the voting securities of the
Company outstanding immediately prior thereto hold securities representing
seventy percent (70%) or less of the combined voting power represented by
the voting securities of the Company or such surviving entity outstanding
immediately after such merger, plan of reorganization, consolidation, share
exchange, or other transaction or transactions;
(iv) the consummation of a transaction involving the sale or other
disposition by the Company or one or more of its Subsidiaries, in one or a
series of related transactions, of interests in an entity or entities, or
of assets, which for the most recent audited twelve-month period produced
total operating revenues or net income aggregating more than thirty percent
(30%) of the total operating revenues or net income of the Company and its
Subsidiaries (taken as a whole), if following such transaction or
transactions, any such entity is no longer a Subsidiary or such assets are
no longer held by a Subsidiary;
(v) the complete liquidation or dissolution of the Company or the
sale of all or substantially all of the assets of the Company; or
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(vi) the consummation of any other transaction which a majority of
the Board of Directors of the Company, in its sole and absolute discretion,
shall determine constitutes a Change in Control.
(d) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(e) "CONFIDENTIAL INFORMATION" shall mean information, whether generated
internally or externally, relating to the Company's business or to the
Affiliated Companies' businesses which 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, financial data (including
marketing information and strategies and personnel data), lists of actual or
potential customers or suppliers, and information relating to regulatory and
business policies, plans, and strategies. For purposes of this Agreement,
Confidential Information does not include information which is not a trade
secret three (3) years after termination of Executive's employment with Company.
(f) "DISABILITY" shall mean an illness, injury or other incapacity which
qualifies the Executive for long-term disability benefits under the principal
management long-term disability plan of the Executive's employer.
(g) "EXCISE TAX" shall have the meaning ascribed to such term in
subsection VII(a) of this Agreement.
(h) "GOOD REASON" shall mean the occurrence after a Change in Control,
without the Executive's express written consent, of any of the following
circumstances:
(i) the assignment to the Executive of duties inconsistent with the
Executive's status or responsibilities as in effect immediately prior to a
Change in Control, including imposition of business travel obligations
which differ materially from business travel obligations immediately prior
to the Change in Control;
(ii) diminution in the status or responsibilities of the Executive's
position from that which existed immediately prior to the Change in
Control, whether by reason of the Company ceasing to be a public company,
becoming a subsidiary of a successor public company, or otherwise;
(iii) a reduction in the Executive's annual base salary as in effect
immediately before the Change in Control or the failure to pay a bonus
award to which the Executive is otherwise entitled under any of the
short-term or long-term
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incentive plans in which the Executive participates (or any successor
incentive compensation plans) at the time such awards are usually paid;
(iv) a change in the principal place of the Executive's employment,
as in effect immediately prior to the Change in Control, to a location more
than thirty-five (35) miles distant from the location of such principal
place at such time;
(v) the failure by the Company to continue in effect any bonus,
incentive compensation, or stock option plan in which the Executive
participates immediately prior to the Change in Control, unless an
equivalent alternative compensation arrangement (embodied in an ongoing
substitute or alternative plan) has been provided to the Executive, or the
failure by the Company to continue the Executive's participation in any
such bonus, incentive compensation or stock option plan on substantially
the same basis, both in terms of the amount of benefits provided and the
level of the Executive's participation relative to other participants, as
existed immediately prior to the time of the Change in Control;
(vi) (A) except as required by law, the failure by the Company to
continue to provide to the Executive benefits substantially equivalent, in
the aggregate, to those enjoyed by the Executive under the qualified and
nonqualified employee pension and welfare benefit plans of the Company,
including, without limitation, any pension, life insurance, medical,
dental, health and accident, disability, retirement or savings plans in
which the Executive was eligible to participate immediately prior to the
Change in Control; (B) the taking of any action by the Company which would
directly or indirectly materially reduce or deprive the Executive of the
perquisites enjoyed by the Executive immediately prior to the Change in
Control (including Company-paid and/or reimbursed club memberships,
financial counseling fees and the like); or (C) the failure by the Company
or a successor to provide the Executive with the number of paid vacation
days (and the policies and practices for taking such days) as was provided
under the Company's vacation policy or practice as was in effect
immediately prior to the Change in Control;
(vii) the failure of the Company or any successor to obtain a
satisfactory written agreement from any successor to assume and agree to
perform this Agreement, as contemplated in subsection IX(a); or
(viii) any purported termination of the Executive's employment that is
not effected pursuant to a Notice of Termination satisfying the
requirements of subsection II(b). For purposes of this Agreement, no such
purported termination shall be effective except as constituting Good
Reason.
The Executive's continued employment shall not constitute consent to, or a
waiver of rights with respect to, any circumstances constituting Good Reason
hereunder.
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(i) "GROSS-UP PAYMENT" shall have the meaning ascribed to such term in
subsection VII(a) of this Agreement.
(j) "NOTICE OF TERMINATION" shall have the meaning ascribed to such term
in subsection II(b) of this Agreement.
(k) "PAYMENTS" shall have the meaning ascribed to such term in subsection
VII(a) of this Agreement.
(l) "POTENTIAL CHANGE IN CONTROL" shall mean:
(i) the Company (or an Affiliated Company) enters into an
agreement, the consummation of which would result in the occurrence of a
Change in Control;
(ii) an individual or entity, or a group or groups of individuals or
entities, acquires rights, whether pursuant to an agreement with the
Company (or an Affiliated Company) or otherwise, the exercise of which
would result in the occurrence of a Change in Control;
(iii) an individual or entity (including the Company), or a group or
groups of individuals or entities, publicly announces an intention to take
or to consider taking action(s) which, if taken, would result in the
occurrence of a Change in Control; or
(iv) the Board of Directors of the Company adopts a resolution to
the effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.
(m) "RETIREMENT" shall mean the Executive's voluntary termination of
employment with the Company, other than for Good Reason, and in accordance with
the Company's retirement policy generally applicable to its employees or in
accordance with any outstanding or contemporaneous retirement arrangement
established with respect to the Executive.
(n) "SUBSIDIARY" shall mean any corporation of which fifty percent (50%)
or more of the total combined voting power of all classes of stock is owned
directly or indirectly by the Company and any joint venture, partnership or
limited liability company (or other similar entity) of which fifty percent (50%)
or more of the capital or profits interest is owned directly or indirectly by
the Company.
(o) "TAX COUNSEL" shall have the meaning ascribed to such term in
subsection VII(b) of this Agreement.
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(p) "TERMINATION" shall have the meaning ascribed to such term in
subsection II(a) of this Agreement.
(q) "TERMINATION DATE" shall mean:
(i) if the Executive's employment is terminated for Disability,
thirty (30) days after Notice of Termination is given (provided that the
Executive shall not have returned to the full-time performance of his
duties during such thirty (30) day period); and
(ii) if the Executive's employment is terminated for Cause or Good
Reason or for any reason other than death or Disability, the date specified
in the Notice of Termination (which in the case of a termination for Cause
shall not be less than thirty (30) days and in the case of a termination
for Good Reason shall not be less than thirty (30) days nor more than sixty
(60) days, respectively, from the date such Notice of Termination is
given).
(r) "TIER I OFFICER" shall mean the chief executive officer of the
Company, the Company's senior strategic planning officer, the Company's senior
mergers and acquisitions officer, the chief financial officer of the Company,
the chief legal officer of the Company, and any other officer of the Company or
of a Subsidiary, elected by the Company's Board of Directors, who is assigned to
the Company's officer compensation Band A (or successor compensation level).
(s) "TIER II OFFICER" shall mean any officer of the Company or of a
Subsidiary, elected by the Company's Board of Directors, who is assigned to the
Company's officer compensation Band B (or successor compensation level) and who
is not described in subsection I(r).
II. TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN CONTROL.
(a) ENTITLEMENT TO BENEFITS. If at the time a Change in Control occurs
the Executive is either a Tier I Officer or a Tier II Officer, the Executive
shall be entitled to the benefits provided in Section III hereof upon the
subsequent termination of his employment with the Company (or its successor)
within two (2) years after the occurrence of the Change in Control, unless such
termination is (i) a result of the Executive's death or Retirement, (ii) for
Cause, (iii) a result of the Executive's Disability, or (iv) by the Executive
other than for Good Reason. Such termination of the Executive's employment
which is not as a result of the Executive's death, Retirement or Disability and
(x) if by the Company, is not for Cause, or (y) if by the Executive, is for Good
Reason, shall be referred to hereinafter as a "Termination."
If, within two (2) years after the occurrence of a Change in Control, such
Executive's employment shall be terminated for Cause or by the Executive for
other than Good Reason, the Company shall pay the Executive his full base salary
through the
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Termination Date at the rate in effect at the time Notice of Termination is
given and shall pay any amounts to be paid to the Executive pursuant to any
other compensation plans, programs or employment agreements then in effect, and
the Company shall have no further obligations to the Executive under this
Agreement.
(b) NOTICE OF TERMINATION. Any termination of the Executive's employment,
within two (2) years after the occurrence of a Change in Control, by the Company
or by the Executive, shall be communicated by written Notice of Termination to
the other party hereto. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which shall indicate the specific provision of
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
(c) POTENTIAL CHANGE IN CONTROL. If, after a Potential Change in Control
has occurred, the Executive's employment with the Company or a Subsidiary
employing the Executive is terminated under circumstances which would constitute
a Termination if a Change in Control had occurred, and such termination was at
the request of a party who has taken steps to effect a Change in Control or who
is otherwise involved in the Potential Change in Control, or was otherwise
caused by the Potential Change in Control, then for all purposes of this
Agreement, (i) a Change in Control shall be deemed to have occurred at the time
such Potential Change in Control occurred, and (ii) such termination shall be
deemed to have been a Termination (if such termination would have constituted a
Termination had it followed an actual Change in Control). Notwithstanding the
foregoing, the two (2) year period described in the first sentence of subsection
II(a) of the Agreement shall not commence upon any such deemed Change in
Control.
III. COMPENSATION UPON TERMINATION OF EMPLOYMENT FOLLOWING CHANGE IN
CONTROL.
Upon a Termination of the Executive's employment, the Executive shall be
entitled to the following benefits:
(a) SEVERANCE PAYMENT. The Company shall pay to the Executive as a
severance allowance, no later than the seventh (7th) day following the
Termination Date, a lump sum cash payment equal to the applicable percentage of
the sum of (1) the Executive's Base Salary in effect immediately before the
Change in Control plus (2) the amount of the Standard Award applicable to the
Executive under the BellSouth Corporation Short Term Incentive Plan, or
successor plan ("STIP"), for the Award Year in which the Change in Control
occurs. The "applicable percentage" as used in the preceding sentence shall be
(i) 300%, if immediately before the Change in Control the Executive was a Tier I
Officer and (ii) 200%, if immediately before the Change in Control the Executive
was a Tier II Officer.
For purposes of this Section III, (A) the term "Base Salary" shall
refer to the gross annual base salary payable to the Executive including the
amount of any before-
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tax and after-tax contributions made by the Executive from such salary to or
under any Code Section 125 plan, to or under any Code Section 401(k) plan, such
as the BellSouth Retirement Savings Plan or other plan(s) sponsored by the
Company or an Affiliated Company, or a successor to any such plan, and the
amount of any other deferrals of such salary under any nonqualified deferred
compensation plans or arrangements maintained by the Company or an Affiliated
Company, and (B) the terms "Standard Award" and "Award Year" shall have the
meanings ascribed to such terms under STIP, or comparable terms used in any
successor plan.
(b) SHORT TERM AWARD. The Company shall pay the Executive, no later than
the seventh (7th) day following the Termination Date, a lump sum cash payment
equal to the amount of the Standard Award applicable to the Executive under STIP
for the Award Year in which the Termination occurs, multiplied by the greater of
(i) one hundred percent (100%), or (ii) the percentage which would be payable
under STIP based on actual performance results as of the most recently completed
calendar quarter, in either case pro rated to the Termination Date. Such amount
shall offset (dollar for dollar) any obligation the Company or any Affiliated
Company may have under STIP to the Executive, but the Executive shall in no
event be required to repay any such amount should, for example, it exceed the
amount to which the Executive would otherwise have become entitled under STIP.
(c) LONG TERM AWARD. The Company shall pay to the Executive, no later
than the seventh (7th) day following the Termination Date, a lump sum cash
payment equal to the amount determined by multiplying the number of units
outstanding for the Executive for all performance periods under the BellSouth
Corporation Shareholder Return Cash Plan, or successor plan ("SRCP"), by the
value of all dividends accrued under SRCP to such date and by multiplying such
amount by the greater of (i) one hundred percent (100%), or (ii) the percentage
which would be payable under SRCP based on actual performance results as of the
most recently completed calendar quarter. Such amount shall offset (dollar for
dollar) any obligation the Company or any Affiliated Company may have under SRCP
to the Executive, but the Executive shall in no event be required to repay any
such amount should, for example, it exceed the amount to which the Executive
would otherwise have become entitled under SRCP.
(d) VESTING OF EXECUTIVE BENEFITS. All benefits of the Executive under
nonqualified deferred compensation plans and agreements (including without
limitation the BellSouth Corporation Deferred Compensation Plan, the BellSouth
Corporation Deferred Income Plan, the BellSouth Corporation Compensation
Deferral Plan, and the successors(s) to any such plan(s)), nonqualified
supplemental retirement and excess benefit plans (including without limitation
the BellSouth Corporation Supplemental Executive Retirement Plan and the
nonqualified excess benefit plan described in the BellSouth Personal Retirement
Account Pension Plan, and the successor(s) to any such plan(s)), and life
insurance plans or arrangements available only to executives or senior
management (including without limitation the BellSouth Corporation Executive
Life Insurance Plan and the BellSouth Corporation Senior Manager Life Insurance
Plan, and
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the successor(s) to any such plan(s)), in which the Executive is a participant
or to which the Executive is a party, shall be immediately vested and all
benefits and rights earned or accrued under such plans and agreements through
the Termination Date shall thereafter be nonforfeitable. Without limiting the
generality of the foregoing, all such benefits shall no longer be subject to any
reduction or forfeiture under, for example, any requirement, provision or
restriction in any plan or agreement regarding competition with BellSouth or any
Affiliated Company, recalculation of benefits as a result of changes in the law
(or interpretations thereof), or the continued performance of services to the
Company or Affiliated Companies.
(e) OUTPLACEMENT SERVICES. The Company shall make available to the
Executive, at the Company's expense, outplacement services, the scope and
provider of which shall be selected by the Executive. The maximum amount for
which the Company shall be responsible under this subsection III (e) shall be
(i) $30,000, if immediately before the Change in Control the Executive was a
Tier I Officer and (ii) $20,000, if immediately before the Change in Control the
Executive was a Tier II Officer.
(f) NO MITIGATION. The Executive shall not be required to mitigate the
amount of any payment provided for in this Section III, nor shall the amount of
any payment or benefit provided for in this Section III be reduced by any
compensation earned by the Executive as the result of employment by another
employer or by retirement or other benefits received after the Termination Date
or otherwise. The Company's obligation to make payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right
or action which the Company or any Affiliated Company may have against the
Executive or other parties.
IV. STOCK OPTIONS.
Upon a Change in Control, all nonqualified stock options, incentive stock
options, and stock appreciation rights previously granted to the Executive under
the BellSouth Corporation Stock Option Plan and the BellSouth Corporation Stock
Plan, and any successor plan(s), which are not already vested, shall be vested
and immediately exercisable (subject to the otherwise applicable terms of such
plans and related option agreements).
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V. LEGAL FEES AND EXPENSES.
The Company shall pay to the Executive all legal fees and expenses as and
when incurred by the Executive in contesting or disputing any termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement,
regardless of the outcome, unless in the case of a legal action brought by or in
the name of the Executive, a final determination is made by a court of competent
jurisdiction that such action was not brought by the Executive in good faith.
VI. INTEREST.
If the Company fails to make, or cause to be made, any payment provided for
herein by the date on which the payment is due, the Company shall make such
payment together with interest thereon. The interest shall accrue and be
compounded monthly. The interest rate shall be a per annum rate equal to 120
percent of the prime rate as reported by The Wall Street Journal for the first
business day of each month, effective for the ensuing month. The interest rate
shall be adjusted at the beginning of each month.
VII. GROSS-UP FOR EXCISE TAXES.
(a) GROSS-UP PAYMENTS. In the event that any payment or the value of any
benefit received or to be received by the Executive in connection with the
Executive's Termination or contingent upon a Change in Control, whether received
or to be received pursuant to the terms of this Agreement or of any other plan,
arrangement or agreement (the "Payments"), would be subject to the excise tax
imposed by Code Section 4999 or any comparable federal, state or local excise
tax (such excise taxes, together with any interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), as determined as
provided below, the Company shall pay to or for the benefit of the Executive an
additional amount (the "Gross-Up Payment") such that the net amount retained by
the Executive, after deduction of the Excise Tax on the Payments and any
federal, state and local income tax and Excise Tax upon the payment provided for
by this Section VII, and any interest, penalties or additions to tax payable by
the Executive with respect thereto, shall be equal to the total value of the
Payments. The intent of the parties is that the Company shall be solely
responsible for and shall pay any Excise Tax on any Payments and the Gross-Up
Payment and any income and employment taxes (including, without limitation,
penalties and interest) imposed on any Gross-Up Payments as well as any loss of
deduction caused by the Gross-Up Payment.
(b) DETERMINATIONS REGARDING GROSS-UP PAYMENTS. All determinations
required to be made under this Section VII, including without limitation whether
and when a Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determinations, shall be
made by tax counsel selected by the Company and reasonably acceptable to the
Executive ("Tax Counsel"). The Company shall instruct the Tax Counsel to timely
provide the data required by this Section VII to the Executive. All fees and
expenses of the Tax Counsel
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shall be paid solely by the Company. Any Excise Tax as determined pursuant to
this subsection VII(b) shall be paid by the Company to the Internal Revenue
Service or other appropriate taxing authority on the Executive's behalf promptly
after receipt of the Tax Counsel's determination. If the Tax Counsel determines
that there is substantial authority, within the meaning of Section 6662 of the
Code (or appropriate authority under any successor provisions), that no Excise
Tax is payable by the Executive, the Tax Counsel shall furnish the Executive
with a written opinion that failure to disclose or report the Excise Tax on the
Executive's federal income tax return will not constitute a substantial
understatement of tax or be reasonably likely to result in the imposition of a
negligence or similar penalty. Any determination by the Tax Counsel shall be
binding upon the Company, absent manifest error.
(c) OVERPAYMENTS, UNDERPAYMENTS. As a result of the uncertainty in the
application of Section 4999 of the Code, at the time of the initial
determination by the Tax Counsel hereunder it is possible that Gross-Up Payments
not made by the Company should have been made ("underpayments"), or that
Gross-Up Payments will have been made by the Company which should not have been
made ("overpayments"). In either such event, the Tax Counsel shall determine
the amount of the underpayment or overpayment that has occurred. In the case of
an underpayment, the amount of such underpayment shall be promptly paid by the
Company to or for the benefit of the Executive. In the case of an overpayment,
the Executive shall, at the direction and expense of the Company, take such
steps as are reasonably necessary (including the filing of returns and claims
for refund), follow reasonable instructions from, and procedures established by,
the Company, and otherwise reasonably cooperate with the Company to correct such
overpayment; provided, however, that (i) the Executive shall not in any event be
obligated to return to the Company an amount greater than the net after-tax
portion of the overpayment that he has retained or has recovered as a refund
from the applicable taxing authorities and (ii) this provision shall be
interpreted in a manner consistent with the intent of this Section VII, which is
to make the Executive whole, on an after-tax basis, from the application of the
Excise Tax, it being understood that the correction of an overpayment may result
in the Executive repaying to the Company an amount which is less than the
overpayment.
VIII. CONFIDENTIAL INFORMATION.
Executive agrees to protect all Confidential Information. Executive will
not use, except in connection with work for Company or Affiliated Companies,
threaten to use, disclose or threaten to disclose, give or threaten to give to
others any Confidential Information.
IX. SUCCESSORS; ENFORCEMENT; DISPUTE RESOLUTION.
(a) OBLIGATIONS OF SUCCESSORS. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or
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substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company is required to perform it. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as the
Executive would be entitled hereunder if the Executive had terminated employment
for Good Reason following a Change in Control of the Company, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Termination Date. As used in this
Agreement, the "Company" shall mean the Company as hereinabove defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(b) ENFORCEABLE BY BENEFICIARIES. This Agreement shall inure to the
benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees (the "Beneficiaries"). In the event of the death of the
Executive while any amount would still be payable hereunder if such death had
not occurred, all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to the Executive's Beneficiaries.
(c) POOLING OF INTERESTS ACCOUNTING TREATMENT. Notwithstanding anything
to the contrary in this Agreement, if the application of any provision(s) of
this Agreement, or of the Agreement in its entirety, would preclude the use of
pooling of interests accounting treatment with respect to a transaction for
which such treatment otherwise is available and to be adopted by the Company,
this Agreement shall be modified as it applies to such transaction, to the
minimum extent necessary to prevent such impact, including if necessary the
invalidation of such provisions (or the entire Agreement, as the case may be) to
the extent they otherwise would have been triggered by such transaction. If the
pooling of interests accounting rules require modification or invalidation of
one or more provisions of this Agreement as it applies to such transaction, the
adverse impact on the Executive shall, to the extent reasonably possible, be
proportionate to the adverse impact on other similarly situated employees of the
Company. The Board of Directors of the Company shall, in its sole and absolute
discretion, make all determinations necessary under this subsection; provided,
that determinations regarding the application of the pooling of interests
accounting rules for these purposes shall be made by the Company with the
concurrence of the Company's independent auditors at the time such determination
is to be made.
(d) GOVERNING LAW. Except as otherwise expressly provided herein, this
Agreement and the rights and obligations hereunder shall be construed and
enforced in accordance with the laws of the State of Georgia.
(e) DISPUTE RESOLUTION. The parties agree to attempt in good faith to
resolve any controversy or claim arising out of or relating to this Agreement by
mediation in
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accordance with the Center for Public Resources Model Procedure for Mediation of
Business Disputes. If the matter has not been resolved pursuant to the
aforesaid mediation procedure within 60 days of the commencement of such
procedure (which period may be extended by mutual agreement), or if either party
will not participate in a mediation, the controversy shall be settled by
arbitration in accordance with the Center for Public Resources Rules for
Non-Administered Arbitration of Business Disputes, by a sole arbitrator. The
arbitration shall be governed by the United States Arbitration Act,
9 U.S.C. Sections 1-16, and judgment upon the award rendered by the arbitrator
may be entered by any court having jurisdiction thereof. The place of
arbitration shall be Atlanta, Georgia, unless otherwise agreed upon. The
arbitrator is not empowered to award punitive or other damages that are in
excess of actual, contractual damages.
X. GENERAL PROVISIONS.
(a) TERM OF AGREEMENT. This Agreement shall become effective on the date
hereof and shall continue in effect until the earliest of (a) January 1, 2000,
if no Change in Control or Potential Change in Control has occurred before that
date or, if as of such date a Potential Change in Control shall have occurred,
the earliest date thereafter on which the threat of such Potential Change in
Control becoming a Change in Control is eliminated; (b) the termination of the
Executive's employment with the Company for any reason prior to a Potential
Change in Control; (c) the termination of the Executive's employment with the
Company, other than as described in subsection II(c), prior to a Change in
Control; (d) the Company's termination of the Executive's employment for Cause,
or the Executive's resignation for other than Good Reason, following a Change in
Control. Notwithstanding the foregoing, commencing on January 1, 2000 (or such
later expiration date prescribed by clause (a) of the preceding sentence), and
on the third anniversary of such date, and successive third anniversaries
thereafter, the expiration date prescribed by clause (a) of the preceding
sentence shall automatically be extended for an additional three (3) years
unless, not later than one hundred eighty (180) days prior to the date on which
this Agreement would otherwise automatically be extended, one of the parties
hereto shall have given notice to the other party that it (or he or she) does
not wish to extend the term of this Agreement. Notwithstanding anything to the
contrary in this Agreement, this Agreement shall in no event terminate before
both the Company and the Executive have fulfilled, or have had satisfied, all of
their rights, obligations and liabilities under this Agreement.
(b) AMENDMENT. No amendment or modification to this Agreement shall be
effective unless in writing and signed by both the Company and the Executive.
(c) DISPOSITION OF EMPLOYER. In the event the Executive is employed by a
Subsidiary, the terms of this Agreement shall expire if such Subsidiary is sold
or otherwise disposed of prior to a Change in Control (and in a transaction
which is not a Change in Control) unless the Executive continues in employment
with the Company or a Subsidiary after such sale or other disposition. If the
Company or Subsidiary employing
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the Executive is sold or disposed of following a Change in Control, this
Agreement shall continue through its original term or any extended term then in
effect.
(d) WITHHOLDING. All payments made hereunder shall be reduced by any
applicable federal, state, or local withholding or other taxes or charges as may
be required by applicable law.
(e) NONDUPLICATION. If an Executive who becomes entitled to the benefits
described in Section III shall also be entitled to severance pay or enhanced
benefits, or both, under the terms of a contract or arrangement (other than a
benefit plan or arrangement generally applicable to executives), including
without limitation agreements entered into by the Executive and the Company or a
Participating Company in connection with executive succession planning, the
Executive shall be entitled to the benefits under Section III only if the
Executive waives and relinquishes all rights to all such payments and benefits
under such other contract or arrangement.
(f) NOTICES. All notices provided for in this Agreement shall be in
writing. Notices to the Company shall be deemed given when personally delivered
or sent by certified or registered mail or overnight delivery service to Room
19A01, 0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxxxx, Xxxxxxx 00000-0000, Attention:
Corporate Secretary. Notices to the Executive shall be deemed given when
personally delivered or sent by certified or registered mail or overnight
delivery service to the last address for the Executive shown on the records of
the Company. Either the Company or the Executive may, by notice to the other,
designate an address other than the foregoing for the receipt of subsequent
notices.
(g) WAIVERS. No waiver of any provision of this Agreement shall be valid
unless approved in writing by the party giving such waiver. No waiver of a
breach under any provision of this Agreement shall be deemed to be a waiver of
such provision or any other provision of this Agreement or any subsequent
breach. No failure on the part of either the Company or the Executive to
exercise, and no delay in exercising, any right or remedy conferred by law or
this Agreement shall operate as a waiver of such right or remedy, and no
exercise or waiver, in whole or in part, of any right or remedy conferred by law
or herein shall operate as a waiver of any other right or remedy.
(h) SEVERABILITY. If any provision of this Agreement shall be held
unlawful or otherwise invalid or unenforceable in whole or in part, such
unlawfulness, invalidity or unenforceability shall not affect any other
provision of this Agreement or part thereof, each of which shall remain in full
force and effect. If the making of any payment or the provision of any other
benefit required under this Agreement shall be held unlawful or otherwise
invalid or unenforceable, such unlawfulness, invalidity or unenforceability
shall not prevent any other payment or benefit from being made or provided under
this Agreement, and if the making of any payment in full or the provision of any
other benefit required under this Agreement in full would be unlawful or
otherwise invalid or unenforceable, then such unlawfulness, invalidity or
unenforceability shall not prevent
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such payment or benefit from being made or provided in part, to the extent that
it would not be unlawful, invalid or unenforceable, and the maximum payment or
benefit that would not be unlawful, invalid or unenforceable shall be made or
provided under this Agreement.
(i) AGENTS. The Company may make arrangements to cause any agent or other
party, including an Affiliated Company, to make any payment or to provide any
benefit that the Company is required to make or to provide hereunder; provided,
that no such arrangement shall relieve or discharge the Company of its
obligations hereunder except to the extent that such payments or benefits are
actually made or provided.
(j) HEADINGS. The headings of the various sections and subsections of
this Agreement are solely for convenience and shall not be relied upon in
construing the provisions of the Agreement. Any reference to a section or
subsection shall refer to a section or subsection of the Agreement unless
specified otherwise.
(k) GENDER AND NUMBER. Any use of gender in this Agreement will be deemed
to include all genders when appropriate, and use of the singular number will be
deemed to include the plural when appropriate, and vice versa in each instance.
(l) ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and no statements, promises or inducements made by any party
hereto, or agents of either party, which are not contained in this Agreement
shall be valid or binding; provided, however, that except as expressly provided
herein the matters dealt with herein supersede previous written agreements
between the parties on the same subject matters only to the extent such previous
provisions are inconsistent with this Agreement and other provisions in written
agreements between the parties not inconsistent with this Agreement are not
affected.
(m) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute a single instrument.
(n) EMPLOYMENT. Except in the event of a Change in Control and,
thereafter, only as specifically set forth in this Agreement, nothing in this
Agreement shall be construed to (i) limit in any way the right of the Company or
a Subsidiary to terminate the Executive's employment at any time for any reason
or for no reason; or (ii) be evidence of any agreement or understanding,
expressed or implied, that the Company or a Subsidiary will employ the Executive
in any particular position, on any particular terms or at any particular rate
remuneration.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
EXECUTIVE: BELLSOUTH CORPORATION
By:
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Title:
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