EXHIBIT 10.32
February 29, 2000
Xx. Xxxxxx Xxxxxx
MCI WorldCom
0000 Xxxxx Xxxxxxx Xxxxxxx, #000
Xxxx Xxxxx, XX 00000
Dear Xxxxxx:
This will confirm our agreement regarding my continued employment and the
termination thereof as follows:
1. Term of Employment
------------------
Effective December 31, 1999, I ceased to be an executive officer or a
director of MCI WORLDCOM, Inc. or any of its subsidiaries but remained an
employee of the company until February 29, 2000.
2. Severance Benefits
------------------
From March 1, 2000 until August 31, 2000, I will receive severance
payments aggregating $300,000 (less applicable withholdings and
deductions), to be paid in accordance with the company's customary payroll
practice. In addition, on or promptly after August 31, 2000, I will
receive a lump-sum severance payment in the amount of $300,000 (less
applicable withholdings and deductions). The foregoing severance payments
are subject to forfeiture for cause, as defined below.
I will be entitled to any other rights, compensation (excluding severance
payments), and/or benefits as may be due to me in accordance with the
provisions of any benefit plans or programs of the company.
For purposes of this agreement, "cause" shall mean a breach of a material
provision of this agreement (including the appendices hereto) by me, which
is not cured within 30 days after receipt of notice from the company,
which specifies the manner in which the company believes I have breached
this agreement.
3. Stock Options, Incentive Compensation, and Other Awards
-------------------------------------------------------
On February 29, 2000, all unvested stock options held by me as of such
date and identified in Schedule A attached hereto, shall automatically
vest and become fully exercisable. Such stock options and any additional
stock options held by me that are vested as of the date hereof shall
remain exercisable until February 28, 2001. In addition, all unvested
stock units held by me as of the date of this letter and identified in
Schedule B shall automatically vest and be paid on or promptly after
February 29, 2000. The amount of deferred compensation to which I am
entitled shall be determined as of February 29, 2000 and be paid promptly
thereafter. Except as otherwise provided herein, the terms and conditions
of such options and awards shall continue to be governed by the underlying
agreements and plans. The company shall take all corporate action
necessary to effectuate the foregoing.
4. Certain Benefits
----------------
I will continue to receive medical, dental, and life insurance coverage
for me and my eligible dependents on the same basis as is in effect on the
date of this agreement, subject to changes of general applicability for
senior executive officers, until the earlier of (a) December 31, 2000, or
(b) the commencement of coverage with a subsequent employer. At the
termination of my employment with the company, my dependents and I will be
eligible for continued coverage under COBRA, if applicable.
During the term of my continued employment by the company, the company
shall reimburse me for any reasonable business expenses incurred by me in
accordance with the company's policies for senior executive officers.
5. Release and Covenant Not To Xxx
-------------------------------
As part of this agreement, the company and I have executed the mutual
release and covenant not to xxx attached as Appendix A. At the company's
option, upon satisfaction of the company's obligations hereunder, we will
execute another release and covenant not to xxx, in a mutually
satisfactory form.
6. Directors and Officers Insurance
--------------------------------
For six (6) years following the date of my termination as an officer
and/or director of the company, the company will cover me by such officers
and directors insurance coverage on substantially the same terms and
levels that it provides to its senior executive officers, at the company's
sole cost. In addition, the company shall indemnify and hold me harmless
to the fullest extent provided by its Articles of Incorporation and Bylaws
as they exist on the date hereof with regards to actions or inactions in
relation to my duties performed at the company on or before the date of
this agreement.
7. Non-Competition
---------------
As part of this agreement, I have executed the covenant not to compete
attached as Appendix B.
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8. Confidentiality
---------------
I agree that I will continue to be bound by the terms of Paragraph 14(a)
of the Employment Agreement, dated November 9, 1997, between me and MCI
Communications Corporation and that the terms of this agreement will
constitute Confidential Information for purposes of said Employment
Agreement, except that I shall be permitted to discuss its contents with
my accountant(s), my lawyer(s), and members of my immediate family on a
need-to-know basis, whom I shall ask to keep the terms confidential.
9. Cooperation after Termination
-----------------------------
I will cooperate with the company as reasonably necessary and upon
receiving reasonable notice, provided that such cooperation shall not
unreasonably interfere with, or be prohibited by my other activities or
pursuits. After February 29, 2000, the company will pay me reasonable
compensation and reimbursement for expenses, such as travel, incurred in
connection with such assistance.
10. Return and Protection of Information and Property
-------------------------------------------------
At or prior to the time of my termination, I will return any company
property in my possession, including business, financial, customer, or
similar materials.
11. Assignment
----------
This agreement inures to the benefit of and is binding upon, me, including
my executors, descendants, ancestors, dependents, administrators,
successors, heirs, and assigns, and upon MCI WorldCom, including its
affiliates, assigns, predecessors, successors, agents, officers,
directors, shareholders, and employees.
12. Entire Agreement
----------------
Other than Section 14(a) of the Employment Agreement and the various stock
option agreements between me and the employer, this agreement constitutes
the entire agreement, arrangement and understanding between me and the
company with respect to its subject matter; it may not be modified or
canceled in any manner except by a writing signed by both me and the
company. Except as otherwise provided in, or modified by, this agreement
including, without limitation, Section 3 (relating to stock options and
stock units), this agreement supersedes any prior or contemporaneous
agreement, arrangement or understanding on this subject matter.
13. Disputes
--------
Any contest or dispute that may arise between the parties with respect to
this agreement shall be submitted to final and binding arbitration in
accordance with the rules and procedures of the Employment Dispute
Resolution Rules of the American Arbitration Association. This agreement
shall be governed and enforced in accordance with the laws of the state of
New York.
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As always, I appreciate your constructive and professional approach to working
through this.
Best regards,
/s/ Xxxxxxx X. Xxxxx
--------------------
Xxxxxxx X. Xxxxx
Attachments
Understood and Agreed,
/s/ Xxxxxx Xxxxxx
-----------------
Xxxxxx Xxxxxx
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Appendix A Release and Covenant Not to Xxx
-------------------------------
MCI WORLDCOM, Inc., including its affiliates, assigns, predecessors and
successors (the "Company") and I, including my executors, descendants,
ancestors, dependents, administrators, successors, heirs, and assigns, hereby
release any and all claims they may have against one another, (including, but
not limited to, claims by me for discrimination under Title VII of the Civil
Rights Act (as amended), the Age Discrimination in Employment Act, or other
state, federal or local law), arising out of or relating to my employment by the
Company or termination of such employment except for any claims for
indemnification that I may have as a former officer and/or director of the
Company and except for any claims of the Company related to or arising out of
(i) material acts or omissions of deliberate or intentional malfeasance
involving self-dealing on my part, or (ii) claims made by third parties. I have
had at least 21 days to consider this agreement, have been advised that I have
had an opportunity to consult with an attorney, and have been advised of my
right to revoke this agreement, which would also revoke the letter agreement to
which this agreement is appended, prior to the eighth calendar day following the
execution of this agreement.
/s/ Xxxxxxx X. Xxxxx 3/06/00
-------------------- -------
Xxxxxxx X. Xxxxx Date
/s/ Xxxxxx Xxxxxx 3/07/00
----------------- -------
For the Company Date
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Appendix B Covenant Not to Compete
-----------------------
For the period ending August 31, 2000, I agree that I will not do any of the
following anywhere in the world: (a) accept employment from, carry on, or be
engaged in, any business which is in direct competition with the business of the
company or its affiliates, (b) solicit for employment, or employ, without the
written permission of the company, any person who is an employee or contractor
for the company or its affiliates, or who has been an employee or contractor for
the company or its affiliates within one year of the date of this agreement; (c)
solicit, influence, or attempt to influence, any actual or prospective customer
or provider, with regard to the actual or prospective customer's or provider's
relationship with the company or its affiliates (nb. for the purpose of this
section, "prospective" means under negotiation with the company or its
affiliates). Under no circumstances shall my membership or service on the board
of directors of a company as approved by the President and CEO of MCI WorldCom
be precluded by this covenant nor shall actions in which I am not involved by
such company be attributed to me for purposes hereof.
It is agreed that any breach or threatened breach of any of the provisions of
this covenant will result in immediate and irreparable injury to the company
and/or its affiliates and will entitle them to obtain an injunction, restraining
order, and/or specific performance as well as to seek other legal or equitable
remedies to which they may be entitled including, but not limited to, money
damages.
It is the intention of the parties that the provisions of this covenant shall be
enforced by the courts of each state and jurisdiction in which enforcement is
sought to the fullest extent permissible under the law and public policy.
Accordingly, if any part of this covenant shall be adjudicated to be invalid or
unenforceable by a court of competent jurisdiction, whether in its entirety or
as modified as to duration, territory or otherwise, then such part shall be
deemed deleted or amended, as the case may be, with respect to the state or
jurisdiction involved in order to render the remainder hereof valid and
enforceable. The invalidity or unenforceability of any particular provision of
this covenant shall not affect the other provisions hereof.
/s/ Xxxxxxx X. Xxxxx 03/06/00
-------------------- --------
Xxxxxxx X. Xxxxx Date
/s/ Xxxxxx Xxxxxx 03/07/00
----------------- --------
For the Company Date
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Schedule A
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VESTED STOCK OPTIONS
--------------------
Any previously unvested options included in the following table shall vest as
of February 29, 2000, with the total number of vested option shares being as
indicated in the table:
Total Number
Grant Date of Shares
---------- ------------
12/7/94 12,688
1/31/95 72,955
1/30/96 143,764
2/5/97 107,287
2/4/98 107,287
8/31/98 252,000
There will be no further vesting of options under the August 31, 1998 grant.
Schedule B
----------
ADDITIONAL ISU AWARD VESTING
----------------------------
The following additional ISUs shall vest as of February 29, 2000 under the
specified ISU awards:
Award Date ISUs to Vest
---------- ------------
2/4/98 6,011
8/31/98 13,727
------
Total: 19,738*
* Subject to reduction for tax withholding, estimated to be 7,294 ISUs,
resulting in an estimated 12,444 net shares to be issued.
