EXHIBIT 10.7
FORM OF MANAGEMENT CONTRACTS AS AMENDED WITH EACH OF MESSRS.
BITTNER, MASSARO, XXXX AND XXXXXXX
August 16, 1995
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Frontier Corporation
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Dear Mr. :
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The Board of Directors (the "Board") of Frontier Corporation, on behalf of
Frontier and its subsidiaries and affiliates (together, the "Company") has
determined that it is in the best interests of the Company and its shareowners
to be able to avail itself of your continued dedication and service to the
Company in the immediate future and in case of Change of Control, as defined
later in this letter agreement ("Agreement"). It is therefore the intent of
this Agreement to encourage your complete dedication to the Company by providing
you with compensation and benefits arrangements while you fulfill your duties
now and during the pendency of a Change of Control, should such an event occur,
which provide you with a measure of security commensurate with your importance
to the Company.
Therefore, upon your signature on a counterpart of this Agreement, the following
terms and conditions shall become effective as of August 16, 1995 and shall
supersede any prior agreements between the Company and you related to the
subject matter hereof. However, this Agreement does not supersede any stock
option agreements, restricted stock grant agreements or agreements related to
the bridging of your prior service with other employers for pension service
credit purposes which may exist as of August 16, 1995 between the Company and
you, all of which shall remain in full force and effect.
1. Employment.
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1.1 Term. The Company shall employ you in a senior executive
management capacity as the Company, with your consent, may from time to time
designate. This Agreement shall become effective as of August 16, 1995 and
shall continue until December 31, 1998, unless earlier terminated or extended in
accordance with its terms. Beginning on January 1, 1998 and on each anniversary
of that date thereafter, the term of this Agreement (the "Term") shall
automatically be extended for one additional year unless either the Company or
you has given written notice to the other no later than September 30 of the
preceding year that the giver of the notice does not elect to extend the Term.
Even if the Company has given you such a notice, if a Change of Control has
occurred during the Term and you have met your obligations in the next paragraph
of this Section 1.1, the Term will be automatically extended and this Agreement
will remain in full force and effect until the last day of the 36th month
following the month in which the Change of Control occurs. You acknowledge that,
except as set forth in this Agreement, your employment is "at will".
If, during the Term, a person (as that term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) commences any action that, if consummated, would result in a Change of
Control of the Company, or if any person publicly announces an intention or
proposal to commence any such action, you agree that you will not leave the
Company's employ (other than as a result of death, Disability or Retirement) and
will render the services contemplated in this Agreement for the reasonable
duration of the Company's defense against such action and until such action has
been abandoned or terminated or a Change in Control has occurred.
Any termination of your employment during the Term for reasons other
than your death shall be evidenced by a written Notice of Termination, which
shall specify the provision of this Agreement relied upon for such termination
and describe with reasonable detail the facts and circumstances claimed by the
sender of such Notice of Termination to provide the basis for termination. Any
such Notice of Termination shall also specify the effective date of termination
(the "Termination Date"). If you die during the Term the Termination Date shall
be the date of your death.
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1.2 Duties. You shall perform all duties incidental to your
position with the Company, or as may be assigned to you by the Chief Executive
Officer of the Company or the Board. You agree to use your best efforts in the
business of the Company and to devote your full time attention and energy to the
business of the Company. You agree not to work, either on a part-time or
independent contracting or consulting basis, with or without compensation, for
any other business or enterprise during the Term without the Company's prior
consent. Such consent shall not be unreasonably withheld in the case of service
on the boards of directors of other corporations and community organizations.
1.3 Base Compensation. The Company shall pay you as base
compensation an annual salary of $___,___, in installments in accordance with
the Company's policies from time to time in effect, until January 1, 1996.
Thereafter, your annual salary may be adjusted by the Company consistent with
the Company's results and your performance during the prior year. However,
unless the annual salaries of all senior executives of the Company are reduced
across-the-board, your annual salary in any year shall not be less than your
annual salary during the prior year.
1.4 Incentive Compensation. The Company shall establish and review
with you from time to time the performance goals ("Performance Goals") for the
Company and you individually, and a methodology for calculating the amount of
incentive compensation to be paid upon achievement of such Performance Goals.
Incentive compensation shall be payable to you at such time or times as are
established under the Company's policies (including the Company's Executive
Compensation Program) in effect from time to time.
1.5 Benefits; Perquisites. You shall be entitled to receive the
retirement and welfare benefits and perquisites provided by the Company under
its Executive Compensation program in effect from time to time for executives at
the Executive Vice President level.
1.6 Expenses. You shall be reimbursed for any reasonable expenses
you incur in connection with your employment during the Term, upon presentation
to the Company of an itemized account and receipts of such expenses as required
by the Company's policies from time to time in effect.
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2. Developments and Intellectual Property. You acknowledge that all
developments, including but not limited to trade secrets (including strategies,
business plans and customer lists), discoveries, improvements, ideas and
writings which either directly or indirectly relate to or may be useful in the
business of the Company (the "Developments") which you, either alone or in
conjunction with any other person or persons, shall conceive, make, develop,
acquire or acquire knowledge of during the Term are the sole and exclusive
property of the Company. You will cooperate with the Company's reasonable
requests to obtain or maintain rights or protections under United States or
foreign law with respect to all Developments. The Company will reimburse you
for all reasonable expenses incurred by you in order to comply with this
provision of this Agreement, regardless of when such expenses may be incurred.
3. Confidential Information. You acknowledge that by reason of your
employment by the Company, especially as a senior executive thereof, you will in
the future have (and you have had prior to August 16, 1995), access to
information of the Company that the Company deems to be confidential and/or
proprietary, including but not limited to, information about the Company's
strategies, plans, products and services, methods of operation, employees,
sales, profits, expenses, customer lists and the relationships between the
Company and its customers, suppliers and others who have business dealings with
the Company. You covenant and agree that during the Term and thereafter, you
will not disclose any such information to any person without the prior written
authorization of the Chief Executive Officer of the Company or the Board.
4. Non-Competition.
4.1 Covenant. In consideration of the benefits provided to you
under this Agreement, which you acknowledge are independent consideration, you
covenant and agree that during the Restricted Period (as defined below), you
will not, directly or indirectly, without the Company's prior consent: (i) own,
manage, operate, finance, join, control or participate in the ownership or
control of, or be associated as an officer, director, executive, partner or
principal, agent, representative,
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consultant or otherwise with, or use or permit your name to be used in
connection with, any enterprise that directly or indirectly competes (as defined
below) with the business of the Company in a Restricted Area (as defined below);
or (ii) offer or provide employment to, or solicit, interfere with or attempt to
entice away from the Company any individual who either is employed by the
Company at the time of such offer, employment, solicitation, interference or
enticement or has been so employed by the Company within 12 months prior to such
offer, employment, solicitation, interference or enticement. This Section shall
not be construed to prohibit the ownership by you of not more than 1% of any
class of securities of any corporation which competes with the Company and which
has a class of securities registered pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act").
4.2 Definitions.
4.2.1 "Competes" means the production, marketing or selling of any
product or service of any person or entity other than the Company which
resembles or competes with a product or service produced, marketed or sold by
the Company (or to your knowledge was under development by the Company) during
the period of your employment by the Company (whether under this Agreement or
otherwise).
4.2.2 "Restricted Area" means:
(a) The Standard Metropolitan Statistical Area (or the equivalent)
in which any office, place of employment, business address or POP maintained by
the Company is located; or
(b) Any state of the United States, any province of Canada or any
foreign country from which the Company or any of its material subsidiaries or
affiliates derives 5% or more of its annual net income.
4.2.3 "Restricted Period" means:
(a) The period of your employment by the Company (whether under this
Agreement or otherwise), if your employment
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is terminated because of your death or Disability;
(b) The period of your employment by the Company (whether under this
Agreement or otherwise) and 24 months thereafter, if your employment is
terminated because of your Retirement, or by the Company for Cause or without
Cause (and not by the Company following Change of Control);
(c) The period of your employment by the Company (whether under this
Agreement or otherwise) and, if this Agreement is still in effect at the
Termination Date, the number of months remaining in the Term at the Termination
Date or 12 months, whichever is longer (but in no event more than 24 months), if
you terminate your employment voluntarily (and not for Good Reason); or
(d) The period of your employment by the Company under this
Agreement, if your employment is terminated by you for Good Reason or by the
Company following Change of Control.
4.3 Savings Clause. If any of the provisions of this Section 4 are
ever determined by a court to exceed the time, geographic scope or other
limitations permitted by applicable law in any jurisdiction, then such excessive
provisions shall be deemed reduced, in such jurisdiction only, to the maximum
time, geographic scope or other limitation permitted in such jurisdiction.
5. Equitable Relief. You acknowledge that the restrictions
contained in Sections 2, 3 and 4 of this Agreement are, in view of the nature of
the business of the Company, reasonable and necessary to protect the legitimate
interests of the Company, and that any violation of the provisions of those
Sections will result in irreparable injury to the Company. You also acknowledge
that the Company shall be entitled to preliminary and permanent injunctive
relief, without the necessity of proving actual damages, and to an equitable
accounting of all earnings, profits and other benefits arising from such
violation. These rights shall be cumulative and in addition to any other rights
or remedies to which the Company may be entitled. You agree to submit to the
jurisdiction of any New York State court located in Monroe County or the United
States
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Xxxxxxxx Xxxxx for the Western District of New York or of the state court or the
federal court located in or presiding over the county in which the Company has
its corporate headquarters at the applicable time in any action, suit or
proceeding brought by the Company to enforce its rights under Sections 2, 3
and/or 4 of this Agreement.
6. Company's Obligations upon Termination. The sole obligations of
the Company upon the termination of your employment prior to the failure of
either you or the Company to extend the Term in accordance with Section 1.1 of
this Agreement are as set forth in this Section 6. Any and all amounts to be
paid to you in connection with your termination shall be paid in a lump sum
promptly after the Termination Date, but not more than 30 days thereafter.
6.1 Termination upon Disability or Death. If your employment with
the Company ends by reason of your death or Disability (as defined later in this
Agreement), the Company shall pay you all amounts earned or accrued through the
Termination Date but not paid as of the Termination Date, including:
6.1.1 Base compensation;
6.1.2 Reimbursement for reasonable and necessary expenses incurred
by you on behalf of the Company during the Term;
6.1.3 Pay for earned but unused vacation and floating holidays;
6.1.4 All compensation you previously deferred (if any) to the
extent not yet paid; and
6.1.5 An amount equal to your "Pro Rata Bonus". Your Pro Rata Bonus
shall be determined by multiplying the "Bonus Amount" (as defined below) by a
fraction, the numerator of which is the number of days in the fiscal year
through the Termination Date and the denominator of which is 365. The term
"Bonus Amount" means: (i) a bonus calculated using the performance
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metrics of the Company's results and your individual performance for the fiscal
year ended prior to the year in which the Termination Date occurs, applied to
the payouts set forth under the incentive compensation program in effect for the
year in which the Termination Date occurs; or (ii) if the Termination Date
occurs after the end of a fiscal year but before any bonus related thereto was
paid, the bonus you would have received for that fiscal year.
The amounts described in Sections 6.1.1 through 6.1.4, inclusive, are
called elsewhere in this Agreement, collectively, the "Accrued Compensation".
Except as otherwise provided in this Section 6.1, your entitlement to any other
compensation or benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs and practices then in
effect.
6.2 Termination Without Cause. If the Company terminates your
employment without Cause (as defined later in this Agreement), the Company shall
pay you:
6.2.1 All Accrued Compensation;
6.2.2 A Pro Rata Bonus (as defined in Section 6.1.5 above);
and
6.2.3 Severance ("Severance") equal to: (a) twice the sum of
(i) the annual base compensation you would have received for the entire fiscal
year in which the Termination Date occurs plus (ii) the Bonus Amount plus
(iii) $ (being the agreed cash equivalent of the annual value of the
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perquisites provided to you under the Company's Executive Compensation Program)
plus (iv) the Company contributions which would have been made on your behalf to
the 401(k) retirement savings plan maintained by the Company (b) reduced by the
present value (determined as provided in Section 280G(d)(4) of the Internal
Revenue Code of 1986 as amended (the "Code")) of any other amount of severance
relating to salary or bonus continuation to be received by you upon termination
of your employment under any severance plan, policy or arrangement of the
Company.
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In addition, the Company shall continue to provide to you and your
family at the Company's expense, for 24 months following the Termination Date,
the life insurance, disability, medical, dental, vision and hospitalization
benefits provided to you and your family immediately prior to the Termination
Date.
Lastly, the Company shall credit you with an additional 24 months of
service and age for the purposes of determining the level of your retirement
benefits under any qualified or nonqualified defined benefit pension,
supplemental or excess retirement plan maintained by the Company in which you
are a covered employee (the "Retirement Plans").
Except as otherwise provided in this Section 6.2, your entitlement to
any other compensation or benefits shall be determined in accordance with the
Company's employee benefit plans and other applicable programs and practices
then in effect.
6.3 Termination for Cause or Voluntary Termination. If your
employment is terminated for Cause (as defined later in this Agreement), or if
you voluntarily terminate your employment other than for Good Reason, the
Company shall pay you all Accrued Compensation. Except as otherwise provided in
this Section 6.3, your entitlement to any other compensation or benefits shall
be determined in accordance with the Company's employee benefit plans and other
applicable programs and practices then in effect.
6.4 Termination for Good Reason or by Company Following Change of
Control. If you terminate your employment for Good Reason or the Company
terminates your employment following a Change of Control, the Company shall pay
you:
6.4.1 All Accrued Compensation;
6.4.2 A Pro Rata Bonus;
6.4.3 Severance equal to: (a) three times the sum of (i)
the annual base compensation you would have received for the entire fiscal year
in which the Termination Date occurs plus (ii) the Bonus Amount plus (iii)
$ (being the agreed cash equivalent of the annual value of the
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perquisites provided to you under the Company's Executive Compensation Program)
plus (iv) the
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Company contributions which would have been made on your behalf to the 401(k)
retirement savings plan maintained by the Company (b) reduced by the present
value (determined as provided in Section 280G(d)(4) of the Code or any other
amount of severance relating to salary or bonus continuation to be received by
you upon termination of your employment under any severance plan, policy or
arrangement of the Company;
6.4.4 An amount equal to your "Supplemental Retirement Amount".
Your Supplemental Retirement Amount shall be equal to the difference between (a)
the benefit payable under the Retirement Plans which you would have received had
your employment continued for 36 months following the Termination Date and (b)
your actual benefit paid or payable, if any, under the Retirement Plans. Your
Supplemental Retirement Amount will be determined in accordance with the
procedures set forth in an Addendum to this Agreement, which is made a part
hereof (the "Addendum"); and
6.4.5 An amount equal to your "SERP Payment". Your SERP Payment
shall satisfy the Company's obligations to you under the supplemental or excess
retirement plan or plans maintained by the Company for its executive employees
(the "SERP") and shall be the actuarial equivalent (using the Actuarial
Assumptions, as defined in the Addendum) of your benefit accrued under the SERP
through the Termination Date. If all or a part of the SERP Payment is funded
through a trust of which you are a beneficiary, the SERP Payment shall be paid
from such trust to the extent of such funding.
In addition, the Company shall continue to provide to you and your family at the
Company's expense, for 36 months following the Termination Date, the life
insurance, disability, medical, dental, vision and hospitalization benefits
provided to you and your family immediately prior to the Termination Date.
The Company shall reimburse you for all reasonable legal fees and expenses which
you may incur following a Change of Control as a result of the Company's
attempts to contest the validity or enforceability of this Agreement or your
attempts to obtain or enforce any right or benefit provided to you under this
Agreement, unless a court determines your actions to be frivolous.
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Except as otherwise provided in this Section 6.4, your entitlement to any other
compensation or benefits shall be determined in accordance with the Company's
employee benefit plans and other applicable programs and practices then in
effect.
7. Gross-Up Payment. Notwithstanding anything else in this
Agreement, if it is found that any or all of the payments made to you, including
but not limited to payments made by the Company, or under any plan or
arrangement maintained by the Company, to you or for your benefit (other than
any additional payments required under this Section 7) (the "Payments") would be
subject to the excise tax imposed by Section 4999 of the Code or you incur any
interest or penalties with respect to such excise tax (such excise tax, together
with any such interest and penalties, collectively the "Excise Tax"), then you
are entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that, after you pay all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, you will retain an amount of the Gross-Up
Payment equal to the Excise Tax imposed upon the Payments. The procedures for
the calculation and contesting of any claim that such Excise Tax is due are set
forth in the Addendum.
8. No Obligation to Mitigate Damages. You are not required to
mitigate damages or the amount of any payment provided for under this Agreement
by seeking other employment or otherwise, and the amounts to be paid to you
under Section 6 of this Agreement shall not be reduced by any compensation you
may earn from other sources. However, if, during any period that you would
otherwise be entitled to receive any payments or benefits under this Agreement,
you breach your obligations under Section 2, 3 or 4 of this Agreement, the
Company may immediately terminate any and all payments and the provision of
benefits (to the extent permitted by law and the terms of the benefit plans
maintained by the Company from time to time) hereunder.
9. Successor to Company. The Company will require any successor or
assignee to all or substantially all of the business and/or assets of the
Company, whether by merger, sale of assets
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or otherwise, by agreement in form and substance reasonably satisfactory to you,
to assume and agree to perform the Company's obligations under this Agreement in
the same manner and to the same extent that the Company would be required to
perform them if such succession or assignment had not taken place. Such
agreement of assumption must be express, absolute and unconditional. If the
Company fails to obtain such an agreement within three business days prior to
the effective date of such succession or assignment, you shall be entitled to
terminate your employment under this Agreement for Good Reason.
10. Survival. Notwithstanding the expiration or termination of this
Agreement, except as otherwise specifically provided herein, your obligations
under Sections 2, 3 and 4 of this Agreement and the obligations of the Company
under this Agreement shall survive and remain in full force and effect. This
Agreement shall inure to the benefit of, and be enforceable by, your personal
and legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you die while any amounts are still
payable to you, all such amounts, unless otherwise provided in this Agreement,
shall be paid in accordance with the terms of this Agreement to your devisee(s),
legatee(s) or other designee(s) or, if there is no such designee(s), to your
estate.
11. Definitions. Whenever used in this Agreement, the following
terms shall have the meanings below:
11.1 "Cause" means:
11.1.1 You have willfully and continually failed to substantially
perform your duties (other than due to an incapacity resulting from physical or
mental illness or due to any actual or anticipated failure after you have given
a Notice of Termination for Good Reason) after a written demand for substantial
performance is delivered to you by the Chief Executive Officer or the Board
which specifically identifies the manner in which it is believed that you have
not substantially performed your duties; or
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11.1.2 You have willfully engaged in conduct which is demonstrably
and materially injurious to the Company (monetarily or otherwise); or
11.1.3 You have willfully engaged in conduct which is illegal or in
violation of the Company's Code of Ethics; or
11.1.4 You have been convicted of a felony; or
11.1.5 You have violated the provisions of Section 2 and/or Section
3 and/or Section 4 of this Agreement
and, in any of the events described in Sections 11.1.1 through 11.1.5 above, the
Board adopts a resolution finding that in the good faith opinion of the Board
you were culpable for the conduct set forth in any of Sections 11.1.1 through
11.1.5 and specifying the particulars thereof in detail. For the purposes of
this Agreement, no act or failure to act on your part shall be considered
willful unless done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best interests of the
Company. Any such resolution of the Board must receive the affirmative vote of
not less than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for the purpose of considering the issue, and you
must receive reasonable notice of the meeting and have an opportunity, with your
counsel, to present your case to the Board.
11.2 "Change of Control" means:
11.2.1 The consummation of a consolidation or merger of the Company
in which the Company is not the continuing or surviving corporation or pursuant
to which the shares of the Company's common, voting equity are to be converted
into cash, securities or other property. For the purposes of this Agreement, a
consolidation or merger with a corporation which was a wholly-owned direct or
indirect subsidiary of the Company immediately before the consolidation or
merger is not a Change of Control; or
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11.2.2 The sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the Company's assets; or
11.2.3 The approval by the Company's shareowners of any plan or
proposal for the liquidation or dissolution of the Company; or
11.2.4 Any person, as that term is used in Section 13(d) and 14(d)
of the Exchange Act (other than the Company, any trustee or other fiduciary
holding securities of the Company under an employee benefit plan of the Company,
a direct or indirect wholly-owned subsidiary of the Company or any other company
owned, directly or indirectly, by the shareowners of the Company in
substantially the same proportions as their ownership of the Company's common,
voting equity), is or becomes the beneficial owner (within the meaning of Rule
13d-3 under the Exchange Act), directly or indirectly, of 30% or more of the
Company's then outstanding common, voting equity; or
11.2.5 During any period of two consecutive years, individuals who
at the beginning of such period constitute the Board, including for this purpose
any new director (other than a director designated by a person who has entered
into an agreement with the Company to effect a transaction described in this
Section 11.2.5) whose election or nomination for election by the Company's
shareowners was approved by a vote of at least two-thirds of the directors then
still in office who were directors at the beginning of the period or whose
election or nomination for election was previously so approved (the "Incumbent
Board"), cease for any reason to constitute a majority of the Board.
11.3 "Disability" means:
11.3.1 Your absence from your duties with the Company on a full-time
basis for 180 consecutive business days as a result of incapacity due to mental
or physical illness; or
11.3.2 A physical or mental condition which prevents you from
satisfactorily performing your duties with the Company and such incapacity or
condition is determined to be total and
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permanent by a physician selected by the Company or its insurers and reasonably
acceptable to you and/or your legal representative.
11.4 "Good Reason" means:
11.4.1 Without your express written consent, after a Change of
Control, the assignment to you of duties with the Company or with a person, as
that term is used in Section 13(d) and 14(d) of the Exchange Act, in control of
the Company materially diminished from the duties assigned to you immediately
prior to a Change of Control; or
11.4.2 Without your express written consent, after a Change of
Control, any reduction by the Company or any person, as that term is used in
Section 13(d) and 14(d) of the Exchange Act, in control of the Company in your
annual base compensation or annual bonus at Standard (or equivalent) rating from
the amounts of such compensation and/or bonus in effect immediately before and
during the fiscal year in which the Change of Control occurred (except that this
Section 11.4.2 shall not apply to across-the-board salary or bonus reductions
similarly affecting all executives of the Company and all executives of any
person in control of the Company); or
11.4.3 Without your express written consent, after a Change of
Control, the failure by the Company or any person, as that term is used in
Section 13(d) and 14(d) of the Exchange Act, in control of the Company to
increase your annual base compensation or annual bonus at Standard (or
equivalent) rating at the times and in comparable amounts as they are increased
for similarly situated senior executive officers of the Company and of any
person, as that term is used in Section 13(d) and 14(d) of the Exchange Act, in
control of the Company; or
11.4.4 Without your express written consent, after a Change of
Control, the failure by the Company or by any person, as that term is used in
Section 13(d) and 14(d) of the Exchange Act, in control of the Company to
continue in effect any benefit or incentive plan or arrangement (except any
benefit plan or arrangement which expires by its own terms then in effect upon
the occurrence of a Change of Control) in which you are
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participating at the time of the Change of Control, unless a replacement plan or
arrangement with at least substantially similar terms is provided to you; or
11.4.5 Without your express written consent, after a Change of
Control, the taking of any action by the Company or by any person, as that term
is used in Section 13(d) and 14(d) of the Exchange Act, in control of the
Company which would adversely affect your participation in or materially reduce
your benefits under any benefit plan or arrangement or deprive you of any other
material benefit (including any miscellaneous benefit which is not represented
and protected by a written plan document or trust) enjoyed by you at the time of
a Change of Control; or
11.4.6 You terminate your employment (other than because of your
death, Disability or Retirement) by giving the Company a Notice of Termination
with a Termination Date not later than the first anniversary of the Change of
Control; or
11.4.7 Any failure by the Company to comply with any of its material
obligations under this Agreement, after you have given notice of such failure to
the Company and the Company has not cured such failure promptly after its
receipt of such notice.
11.5 "Retirement" means a voluntary or involuntary termination of
your employment after age 65 or any voluntary termination at age 65 or earlier
that entitles you to receive a normal or early retirement service pension under
the Retirement Plans (or any successor or substitute plan or plans the Company
puts into effect prior to a Change in Control).
12. Notice. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed given
when mailed by certified mail, return receipt requested, or by nationally
recognized overnight courier, receipt requested, when addressed to you at your
official business address when employed by the Company or at your home address
as reflected in the Company's records from time to time and when addressed to
the Company at its corporate headquarters, to the attention of the Board, with a
required copy to the Company's Corporate Counsel.
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13. Amendment and Assignment. This Agreement cannot be changed,
modified or terminated except in a writing. You may not assign your duties with
the Company to any other person.
14. Severability. If any provision of this Agreement or the
application of this Agreement to anyone or under any circumstances is determined
by a court to be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect any other provisions or applications of
this Agreement which can be effective without the invalid or unenforceable
provision or application, and such invalidity or unenforceability shall not
invalidate or render unenforceable such provision in any other jurisdiction.
15. Remedies Cumulative; No Waiver. No remedy conferred on you or
on the Company by this Agreement is intended to be exclusive of any other
remedy, and each and every remedy shall be cumulative and shall be in addition
to any other remedy given under this Agreement or now or later existing at law
or in equity. No delay or omission by you or by the Company in exercising any
right, remedy or power under this Agreement or existing at law or inequity shall
be construed as a waiver of such right, remedy or power, and any such right,
remedy or power may be exercised by you or the Company from time to time and as
often as is expedient or necessary.
16. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to any applicable conflicts of laws.
17. Counterparts. This Agreement may be signed by you and on behalf
of the Company in one or more counterparts, each of which shall be one original
but all of which together will constitute one and the same instrument.
If this Agreement correctly sets forth our agreement on its subject matter,
please sign and return to me the enclosed copy of this Agreement. Please keep
the other copy for your records.
Sincerely,
FRONTIER CORPORATION
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By:
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Agreed to on
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ADDENDUM TO LETTER AGREEMENT DATED AUGUST 16, 1995
The following provisions shall apply to the determination of the
Supplemental Retirement Amount in accordance with Section 6.4.4 of the
Agreement.
1. The Supplemental Retirement Amount shall be determined using the
actuarial equivalent of the benefit payable under the Retirement Plans which you
would have received had your employment continued for 36 months following the
Termination Date and, using the Actuarial Assumptions (as defined below) of your
actual benefit paid or payable, if any, under the Retirement Plans. The
actuarial equivalent shall be determined by using the actuarial assumptions
applied by the Company during the 90 day period immediately prior to a Change of
Control in connection with the Retirement Plans (the "Actuarial Assumptions").
2. The calculation of your Supplemental Retirement Amount shall also
be based on the assumptions that your annual base and incentive compensation
would have remained the same over those 36 months, all accrued benefits under
the Retirement Plans are fully vested and the benefit accrual formulas are those
provided for in the Retirement Plans during the 90 day period immediately prior
to a Change of Control.
3. If all or a part of your Supplemental Retirement Amount is derived
under a supplemental or excess retirement plan maintained by the Company for its
executive employees (a "SERP"), then the amount of your Supplemental Retirement
Amount which is derived from the SERP shall be paid from any trust of which you
are a beneficiary to the extent of funding actuarially available in that trust
to pay your Supplemental Retirement Amount.
The following provisions shall apply to the calculation and procedures
relating to the Gross-Up Payment in accordance with Section 7 of the Agreement.
1. The Company's independent auditors in the fiscal year in which the
Change of Control occurs (the "Accounting Firm") shall determine whether and
when a Gross-Up Payment is required, the amount of such Gross-Up Payment and the
assumptions to be used in making such determination. The Accounting Firm shall
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provide detailed supporting calculations, together with a written opinion with
respect to the accuracy of such calculations, to you and the Company within 15
business days of the receipt of a written request from either you or the
Company. If the Accounting Firm is serving (or has served within the three years
preceding the Change in Control) as accountant or auditor for the person in
control of the Company following the Change of Control or any affiliate thereof,
you may appoint another nationally recognized accounting firm to make the
determinations required in connection with the Gross-Up Payment and the
substitute accounting firm shall then be referred to as the Accounting Firm).
The Company shall pay you any Gross-Up Payment, determined in accordance with
this Addendum, within five days of the receipt of the Accounting Firm's
determination. If the Accounting Firm determines that you will not be liable for
any Excise Tax, it shall furnish you with a written opinion that your failure to
report the Excise Tax on the applicable federal income tax return would not
result in the imposition of a negligence or similar penalty. Any determination
by the Accounting Firm shall be binding upon you and the Company.
2. If there is uncertainty about how Section 4999 is to be applied
when the Accounting Firm makes its initial determination, and as a result the
Gross-Up Payment made to you by the Company is determined (after following the
procedures set forth in this Addendum) to be less than it should have been made
(an "Underpayment"), and you are thereafter required to pay any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment and any such
Underpayment shall be promptly paid by the Company to you or for your benefit.
3. You shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the Company to pay
you the Gross-Up Payment. Your notice shall be given as soon as practicable but
no later than ten business days after you have been informed in writing of such
claim and shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. You shall not pay such claim prior to
the expiration of the 30 day period following the date on which you gave such
notice to the Company (or any shorter period, if the taxes claimed are due
sooner). If the Company notifies you in writing prior to the expiration of such
period that it desires to contest such claim, you shall:
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(a) give the Company any information reasonably requested by it relating to such
claim, (b) take such action in connection with contesting such claim as the
Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company, (c) cooperate with the Company
in good faith in order effectively to contest such claim, and (d) permit the
Company to participate in any proceedings relating to such claim.
4. The Company shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in connection with the claim and may, at its sole option, either
direct you to pay the tax claimed and xxx for a refund or contest the claim in
any permissible manner, and you agree to prosecute the contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts as the Company shall determine.
5. Any extension by the Company of the statute of limitations relating
to payment of taxes for the taxable year for which such contested amount is
claimed to be due shall be limited solely to such contested amount. The
Company's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable under this Agreement and you shall be
entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
6. If the Company directs you to pay such claim and xxx for a refund,
the Company shall advance the amount of such payment to you, on an interest-free
basis, and shall indemnify and hold you harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance.
7. If you receive a refund of any amount advanced to you by the
Company, you will promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If the Company advanced
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to you any amounts and a determination is made that you will not be entitled to
any refund with respect to such claim and the Company does not notify you in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and you
will not be required to be repay it. The amount of such advance shall offset the
amount of the Gross-Up Payment required to be paid.
8. The Company shall pay all fees and expenses of the Accounting Firm.
The Company shall bear and pay directly all costs and expenses (including
additional interest and penalties) incurred in connection with such contest and
shall indemnify and hold you harmless, on an after-tax basis, for any Excise Tax
or income tax (including interest and penalties with respect thereto) imposed as
a result of such representation and payment of costs and expenses.
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