Exhibit 10-y
THIS AGREEMENT ("Agreement") by and between SBC COMMUNICATIONS INC., a Delaware corporation ("SBC"),
SBC MANAGEMENT SERVICES, L.P. (the "Company") and XXXXXX X. XXXXXXXX, XX. ("Employee") is effective the 16th
day of November, 2001.
WITNESSETH THAT:
WHEREAS,
Employee presently is Chairman of the Board and Chief Executive Officer of SBC
and possesses executive skills and experience which SBC acknowledges are of
substantial value and importance to the success of SBC’s present and future
business operations; and
WHEREAS,
SBC, the Company and Employee desire to provide for the terms and conditions
upon which Employee will continue in the employ and service of SBC and the
Company,
NOW,
THEREFORE, in consideration of the mutual promises, covenants and agreements
herein set forth, the parties hereto agree as follows:
| 1. |
Employment and Duties. The Company hereby employs Employee, and Employee
agrees to continue in the employ of the Company, for the term herein specified
(the “Employment Term”). During the Employment Term, Employee shall
serve SBC and the Company as Chairman of the Board and Chief Executive Officer
and shall devote his full time, attention and effort to the business and affairs
of SBC and its affiliates. |
| 2. |
Term. Subject to Section 4 below, the Employment Term shall be a five (5)
year period commencing November 16, 2001 and ending November 15, 2006;
provided, however, upon notice provided by either party to the other within
60 days prior to the second anniversary of this Agreement, the Employment
Term shall end on the third anniversary of this Agreement. |
| 3. |
Consideration, Benefits and Compensation. |
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a.
Consideration. In consideration of Employee’s agreement to enter
into this Agreement and to make the non-compete, non-solicitation and
confidentiality covenants provided in Section 7, SBC agrees to make a one-time
grant to Employee of 2,500,000 SBC options with an exercise price equal to the
closing price of SBC Communications Inc. stock on the New York Stock Exchange on
the effective date hereof. The options shall be granted under the 2001 Incentive
Plan or another plan of SBC or as a special grant having terms substantially
similar to the 2001 Incentive Plan. The terms of this agreement shall supercede
any conflicting terms contained in any such grant. The options shall only vest
upon completion of the earliest to occur of: (A) the end of the fifth (5th) year
of the Employment Term; however, three-fifths (3/5) of the options shall vest
after the first three (3) years of the Employment Term; (B) termination of the
Employee’s employment due to death or Disability, as that term is used in
the 2001 Incentive Plan; (C) a change in control, as that term is used in the
2001 Incentive Plan; or (D) in the event the Company terminates the
employment of Employee without Cause. In the event the Employee voluntarily
terminates his employment prior to the end of the first 3 years of the
Employment Term, he shall forfeit all options under this grant. In the event the
Employee voluntarily terminates his employment prior to the end of the
Employment Term but after the first three years of the Employment Term, he shall
forfeit unvested options under this grant. |
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b.
Benefits. In consideration of Employee’s provision of services to
SBC and the Company throughout his career with SBC and its affiliates, SBC
agrees to continue to provide to Employee, for the duration of Employee’s
life, (i) health and welfare benefits on terms and conditions that are at least
equivalent to the health and welfare benefits provided to Employee and his
eligible dependents as of the date of this Agreement, (the employee’s
spouse shall also be eligible to receive company provided health and welfare
benefits on terms no less favorable than exist as of the date of employee’s
retirement in the event employee shall pre-decease her) and (ii) access to and
U.S. domestic use of SBC’s aircraft for a maximum of ten (10) hours per
month, office facilities and support staff, and an automobile or automobile
benefits at least equivalent to those provided to Employee as of the date of
this Agreement; provided, however, Employee shall be responsible for the payment
of all taxes incurred by him because of personal use of such aircraft. |
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c.
Compensation. In order that SBC and the Company may continue to benefit
from Employee’s experience, knowledge, reputation and contacts and in
consideration of his services, Employee shall earn and the Company shall pay,
during each calendar year of the Employment Term, base salary to be set by the
SBC Board of Directors, which shall not be less than the rate of base salary
earned by Employee during calendar year 2001, and, during the Employment Term,
Employee’s short-term and long-term targets shall not be less than his
short-term and long-term targets for calendar year 2001. In addition, Employee
shall participate in SBC’s health and welfare, pension and other benefit
plans and programs applicable generally to employees of SBC and its affiliates,
and in any fringe benefit programs presently existing or hereafter adopted for
the benefit of executive employees of SBC and its affiliates that are
commensurate with Employee’s position. In the event that any of such
programs require future action by the Board of Directors of SBC or a Committee
of such Board (for example, as in the case of future stock grants, stock option
grants, or long term incentive programs), Employee shall be a candidate for
participation in such programs commensurate with Employee’s position on the
basis applicable to other eligible executive employees of SBC and its
affiliates. SBC and the Company may, from time to time, also consider the award
of other forms of compensation to Employee. |
| 4. |
Effect of Termination of Employment. The Employment Term and, except as
provided in this Section 4, Employee’s right to salary and compensation
(including benefits) as provided for in Section 3(c) shall terminate only (a)
upon the expiration of the Employment Term pursuant to Section 2, (b) if
Employee shall die during the Employment Term, (c) if Employee shall voluntarily
terminate his employment, or (d) if Employee’s employment is terminated for
Cause during the Employment Term. The Company reserves the right to terminate
the employment of Employee for any other reason not specified in the preceding
sentence, but in such case, the Company shall be obligated to continue to
provide Employee with the salary and compensation through the end of the then
current Employment Term and to pay fees and benefits during the consulting
period described below. |
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For
purposes of this Agreement, the term Cause shall mean (i) a willful failure or
refusal of Employee to perform his employment or consulting duties and
obligations hereunder; (ii) any fraud, embezzlement or other dishonesty of
Employee, or (iii) the conviction of Employee of a felony committed in the
performance by him of services on behalf of SBC or its affiliates. |
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Employee’s
right to salary and compensation (including benefits) shall not be limited or
affected by any illness or disability of Employee, or on account of any accident
or other event (except as provided herein) which either temporarily or
permanently, or wholly or partially, shall prevent Employee from performing his
employment duties hereunder. |
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Employee
shall continue to participate, so long as he continues in the employ of the
Company or any affiliate of SBC, in employee benefit plans and other fringe
benefit programs available to employees generally and to any group or class of
employees to which he belongs on the same terms and conditions applicable to
employees generally or to such group or class of employees, as the case may be. |
| 5. |
Consulting. Employee agrees that commencing upon Retirement, provided he has
completed as least three (3) years of the Employment Term,he will provide
consulting services and advice to SBC when and as reasonably requested by the
Chief Executive Officer or by the Board of Directors of SBC until the earliest
of the third anniversary of Employee’s Retirement or the Employee’s
death (the “Consulting Term”). In consideration of such services, SBC
or its affiliates shall, pay Employee an annual consulting fee equal to 50% of
his annual rate of base salary in effect at his Retirement (the “Consulting
Fee”), payable in monthly installments. In addition to the benefits
specified in Section 3(b), SBC shall provide Employee continued access during
the Consulting Term to SBC’s facilities and services comparable to those
provided to him prior to his Retirement, including club memberships, financial
planning, automobile or allowance therefore, and an office and support staff
(collectively referred to as “Consulting Benefits”), on the same basis
as such facilities and services were provided to Employee prior to his
Retirement. During the Consulting Term, SBC shall also reimburse Employee, upon
the receipt of appropriate documentation, for reasonable expenses, which he
incurs in providing such consulting services at the request of the Chief
Executive Officer or the Board of Directors of SBC. During the Consulting Term,
Employee and SBC agree and acknowledge that Employee shall be an independent
contractor. Notwithstanding the foregoing, in the event his employment is
terminated for Cause during the Employment Term, the obligation to perform
consulting services and advice shall not begin and the Company shall not be
obligated to pay Employee any fees, benefits, or expenses. |
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The
Consulting Term and Employee’s right to the Consulting Fee and Consulting
Benefits as provided for in this Section 5 shall terminate only (a) upon the
expiration of the Consulting Term pursuant to this Section 5, (b) if Employee
shall die during the Consulting Term, or (c) if Employee’s consulting
arrangement is terminated by SBC for Cause during the Consulting Term.
Employee’s right to the Consulting Fee and Consulting Benefits shall not be
limited or affected by any illness or disability of Employee, or on account of
any accident or other event (except as provided herein) which either temporarily
or permanently, or wholly or partially, shall prevent Employee from performing
his consulting duties hereunder. |
| 6. |
Change of Control. Notwithstanding anything to the contrary herein, in the
event that Employee receives a payment pursuant to that certain change in
control/severance agreement between Employee and SBC dated March 1, 1989, as
amended in an agreement dated March 25, 1998, as a result of a “change in
control of the Corporation” (as that term is defined in such change in
control/severance agreement, as amended), the Employment Term shall expire on
the date such payment is made; provided, however, the number of days in the
Employment Term that expire pursuant to this Section 6 shall be added to the
Consulting Term, whereupon the Employee shall be entitled to receive the
Consulting Fees and Consulting Benefits as described in Section 5 during the
Consulting Term as extended by this Section 6. |
| 7. |
Non-Disclosure, Non-Solicitation and Non-Compete Agreements. Employee agrees
that he will not disclose to any other firm or person any of SBC’s or its
affiliates’ trade secrets or any confidential information relating to its
or their business. Employee further agrees that, for the three year period
commencing upon the expiration of the Employment Term (but excepting any period
following a termination by SBC with Cause), or if longer, at any time during the
Consulting Term, he will not without the prior consent of SBC, (a) enter the
employ of, or have any material interest in, directly or indirectly, any
business in this country in competition with SBC or any of its affiliates, (b)
contact, solicit or attempt to solicit, directly or indirectly any customer of
SBC or any of its affiliates, or (c) induce, directly or indirectly, any
personnel of SBC or any of its affiliates to leave SBC or any of its affiliates
nor interfere with the faithful discharge by such personnel of their duties to
serve SBC or its affiliates. |
| 8 |
Miscellaneous. Neither this Agreement nor any rights hereunder shall be assignable by either party
hereto. |
This
Agreement shall be construed and interpreted under the laws of the State of
Texas. If any payments or benefits provided by SBC, the Company or any of their
respective affiliates to Employee are subject to golden parachute excise tax,
then SBC shall make Employee whole for such excise taxes on an after-tax basis.
Any dispute arising out of or relating to this Agreement, except any dispute by
SBC arising out of or relating to matters addressed in Section 7, shall be
settled by final and binding arbitration, which shall be the exclusive means of
resolving any such dispute, and the parties specifically waive all rights to
pursue any other remedy, recourse or relief. Any such arbitration shall be
expedited and conducted in San Antonio, Texas and shall be governed by the
United States Arbitration Act, 9 U.S.C. Section 1-16, and judgment upon the
award rendered by the arbitration may be entered by any court having
jurisdiction.
IN
WITNESS WHEREOF, the parties have executed this Agreement, as amended, this
16th day of November, 2001.
By: /s/ Xxxx X. Xxx
Printed Name: Xxxx X. Xxx
Its: Chairman, Human Resources
Committee of the Board of Directors
EMPLOYEE
/s/ Xxxxxx X. Xxxxxxxx, Xx.
Xxxxxx X. Xxxxxxxx, Xx.
