EXHIBIT 10mm
FORM OF
STAY INCENTIVE AGREEMENT
(Xxxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx)
THIS STAY INCENTIVE AGREEMENT (the "Agreement") is made as of the 23rd
day of November, 1998, by and between Xxxx Atlantic Corporation, its successors
and assigns ("Xxxx Atlantic"), and ________________________________, an employee
of a Xxxx Atlantic Company (the "Key Employee"). In this Agreement, "Xxxx
Atlantic Company" means any or all of the following: Xxxx Atlantic, a corporate
subsidiary or other company affiliated with Xxxx Atlantic, a company in which
Xxxx Atlantic owns directly or indirectly an equity interest of at least ten
percent, and the successors and assigns of any such company.
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger,
dated as of July 27, 1998, among Xxxx Atlantic, GTE Corporation ("GTE") and Beta
Gamma Corporation (the "Definitive Agreement"), Xxxx Atlantic contemplates a
merger of the Xxxx Atlantic and GTE businesses (the "Merger") on a date which is
yet to be decided (the "Closing Date");
WHEREAS, Xxxx Atlantic considers the Key Employee to be an employee
whose continuing services, leadership and support are and will be valuable,
especially during the period prior to the Closing Date; and
WHEREAS, subject to the terms of this Agreement, Xxxx Atlantic wishes
to incent the Key Employee to remain an employee in good standing during this
period;
NOW, THEREFORE, for good and valuable consideration, the Key Employee
and Xxxx Atlantic hereby agree as follows:
1. Stay Incentive.
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(a) Stay Incentive Bonus at Closing. If the Merger occurs pursuant to
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the Definitive Agreement, and if the Key Employee has remained an "Employee in
Good Standing" (as defined in Section 1(c) of this Agreement) of a Xxxx Atlantic
Company from the date of this Agreement to the Closing Date, then, not later
than 30 calendar days following the Closing Date, Xxxx Atlantic will cause the
Xxxx Atlantic Company which then employs the Key Employee to pay the Key
Employee a special stay incentive bonus (a "Stay Bonus") consisting of a single
cash payment in an amount equal (before withholding of taxes) to the greater of
the Key Employee's annual rate of base salary on the date of this Agreement, or
such salary as of the Closing Date.
(b) Adjusted Stay Incentive Bonus if Merger Plan is Terminated. If the
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Definitive Agreement is terminated without the Merger occurring, and the Key
Employee has remained an "Employee in Good Standing" of a Xxxx Atlantic Company
from the date of this Agreement to the date the Definitive Agreement is
terminated, then, not later than 30 calendar days following the date of
termination of the Definitive Agreement, Xxxx Atlantic will cause the Xxxx
Atlantic Company which then employs the Key Employee to pay the Key Employee a
special adjusted stay incentive bonus (an "Adjusted Stay Bonus") consisting of a
single cash payment in an amount equal (before withholding of taxes) to 25
percent of the Stay Bonus described in Section 1(a) of
this Agreement, except that the date of termination of the Definitive Agreement
shall be substituted for the Closing Date for purposes of calculating such
amount.
(c) Definition of Employee in Good Standing. For purposes of this
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Agreement, the Key Employee will be considered to be an "Employee in Good
Standing" on a given date if, on that date, the Key Employee is employed by a
Xxxx Atlantic Company, has not tendered oral or written notice of intent to
resign or retire effective as of a date on or before the given date, and has not
behaved in a manner that would be grounds for discharge for "Cause" as defined
in Section 1(d) of this Agreement.
(d) Definition of Cause. For purposes of this Agreement, the term
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"Cause" shall mean grossly incompetent performance or substantial or continuing
inattention to or neglect of the duties and responsibilities assigned to the Key
Employee as determined by the Key Employee's current supervisor, with the
concurrence of the Executive Vice President - Human Resources of Xxxx Atlantic;
fraud, misappropriation or embezzlement involving any Xxxx Atlantic Company; a
material breach of the Employee Code of Business Conduct or this Agreement; or
commission of any felony of which the Key Employee is finally adjudged guilty in
a court of competent jurisdiction.
2. Termination of Employment.
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(a) Voluntary Resignation, Retirement, or Discharge for Cause. In the
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event that, prior to the Closing Date or termination of the Definitive
Agreement, the Key Employee voluntarily resigns or retires for any reason or is
discharged by a Xxxx Atlantic Company for Cause, the Key Employee shall forfeit
any and all rights to receive a Stay Bonus or an Adjusted Stay Bonus under
Section 1 of this Agreement.
(b) Involuntary Terminations. In the event that a Xxxx Atlantic Company
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discharges the Key Employee other than for Cause, and either (i) the Merger
subsequently occurs pursuant to the Definitive Agreement, or (ii) the Definitive
Agreement is terminated without the Merger occurring, then Xxxx Atlantic shall
cause the Key Employee's last employing Xxxx Atlantic Company to pay the Key
Employee a bonus equal in amount to the Stay Bonus or Adjusted Stay Bonus which
would otherwise have become payable under Section 1 (a) or (b) of this
Agreement, provided that the payment of such bonus shall be contingent upon the
absence, at the time of payment, of any act by the Key Employee that would
constitute a material breach of this Agreement, and provided further that the
date of discharge shall be substituted for the dates described in Section 1 (a)
or (b) for purposes of calculating the dollar amount of such bonus. Such bonus
shall be paid not later than the date on which the Stay Bonus or Adjusted Stay
Bonus would otherwise have become payable.
(c) Payment in Case of Death or Disability. In the event that the Key
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Employee dies, or terminates his or her employment on account of disability
(within the meaning of the applicable disability benefit plan in which the Key
Employee participates from time to time) on a date on which the Key Employee was
an Employee in Good Standing, and the Merger subsequently occurs pursuant to the
Definitive Agreement, Xxxx Atlantic shall cause the Key Employee's last
employing Xxxx Atlantic Company to pay the Key Employee, or the Key Employee's
estate in the event of death, a single cash payment which shall be equal (before
withholding of taxes) to the Stay Bonus multiplied by the following fraction:
the numerator shall be the number of days that have elapsed between the date of
this Agreement and the date of the Key Employee's death or disability, and the
denominator shall be the number of days that
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have elapsed between the date of this Agreement and the Closing Date of the
Merger. Such payment shall be made in accordance with the timetable prescribed
in Section 1(a) of this Agreement, substituting the date of death or disability
for the date described in Section 1(a) for purposes of calculating the dollar
amount of the payment. If the Definitive Agreement is terminated without the
Merger occurring after the Key Employee's death or disability, and if the Key
Employee was an Employee in Good Standing on the date of such death or
disability, a single cash payment shall be made to the Key Employee, or the Key
Employee's estate in the event of death, in an amount equal (before withholding
of taxes) to the Adjusted Stay Bonus. Such payment shall be made in accordance
with the timetable prescribed in Section 1(b) of this Agreement, substituting
the date of death or disability for the date described in Section 1(b) for
purposes of calculating the dollar amount of the payment.
3. Prohibition Against Recruiting or Hiring. Commencing on the
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effective date of this Agreement and at all times thereafter through the second
anniversary of the Key Employee's termination of employment for any reason from
all Xxxx Atlantic Companies, the Key Employee shall not, without the consent of
the Executive Vice President - Human Resources of Xxxx Atlantic:
(i) recruit or solicit any active employee of any Xxxx Atlantic
Company for employment or for retention as a consultant or
service provider;
(ii) hire, or participate (with another company or third party) in
the process of hiring (other than for a Xxxx Atlantic Company)
any person who is then an active employee of any Xxxx Atlantic
Company, or provide names or other information about Xxxx
Atlantic employees to any person or business (other than a Xxxx
Atlantic Company) under circumstances which the Key Employee
knows or should know could lead to the use of that information
for purposes of recruiting or hiring; or
(iii) interfere with the relationship of any Xxxx Atlantic Company
with any of its employees, agents, or representatives.
4. Confidentiality. The Key Employee agrees not to disclose or
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discuss, other than with the Key Employee's legal counsel, financial or tax
adviser, and spouse (if any) either the existence of or any details of this
Agreement. The Key Employee will make a good faith effort to ensure that any
such legal counsel, financial or tax adviser, or spouse will not disclose or
discuss the existence or any details of this Agreement with any other person.
5. Proprietary Information. The Key Employee shall at all times
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preserve the confidentiality of all proprietary information and trade secrets of
any and all Xxxx Atlantic Companies. "Proprietary information" means information
obtained or developed by the Key Employee during the Key Employee's employment
with any Xxxx Atlantic Company that has not been fully disclosed in a writing
generally circulated to the public at large, and which is treated as
confidential within the business of any Xxxx Atlantic Company.
6. Deferrals under IDP. Amounts otherwise payable to the Key
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Employee under Sections 1 or 2 of this Agreement may be deferred under the Xxxx
Atlantic Income Deferral Plan ("IDP") or any successor plan in accordance with
the terms of the IDP.
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7. Assignment by Xxxx Atlantic. Xxxx Atlantic may assign this
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Agreement without the Key Employee's consent to any company that acquires all or
substantially all of the stock or assets of Xxxx Atlantic, or into which or with
which Xxxx Atlantic is merged or consolidated. This Agreement may not be
assigned by the Key Employee, and no person other than the Key Employee (or the
Key Employee's estate) may assert the rights of the Key Employee under this
Agreement.
8. Business Discretion of Xxxx Atlantic. Nothing in this Agreement
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is intended to limit the discretion of any Xxxx Atlantic Company to take any
action with regard to the Merger which Xxxx Atlantic may consider appropriate,
including, without limitation, postponing the Closing Date or terminating the
Definitive Agreement. This Agreement is not a contract to retain the Key
Employee in the employ of any Xxxx Atlantic Company for any prescribed period or
term. This Agreement does not modify the employment-at-will status of the Key
Employee.
9. Non-Benefit Bearing Payments. Any amount to be paid under Section
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1 or Section 2 of this Agreement shall not be treated as compensation for
purposes of computing or determining any additional benefit payable under any
savings plan, insurance plan, pension plan, or other employee benefit plan
maintained by any Xxxx Atlantic Company.
10. Remedies. The Key Employee acknowledges that irreparable injury
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will result to Xxxx Atlantic, and other Xxxx Atlantic Companies, and to their
business, in the event of a material breach by the Key Employee of any of the
Key Employee's covenants and commitments under this Agreement. In the event of a
material breach of any of the Key Employee's covenants and commitments under
this Agreement, the Key Employee, in the sole discretion of Xxxx Atlantic, may
forfeit any amount otherwise payable to the Key Employee under Sections 1 or 2
of this Agreement. In addition, Xxxx Atlantic and any affected Xxxx Atlantic
Company reserves all rights to seek any and all remedies and damages permitted
under law, including, but not limited to, injunctive relief, equitable relief
and compensatory damages.
11. Governing Law. This Agreement shall be interpreted and enforced
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in accordance with the law of the State of New York.
12. Severability. If any clause, phrase or provision of this
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Agreement or the application thereof to any person or circumstance shall be
invalid or unenforceable under any applicable law, this shall not affect or
render invalid or unenforceable the remainder of this Agreement. Furthermore, in
the event that a court of law or equity determines that the duration of any
restrictions under this Agreement is not enforceable, this Agreement shall be
deemed to be amended to the extent necessary, but only to the extent necessary,
to permit the enforcement of the terms of this Agreement, as so amended.
13. Waiver: The waiver by Xxxx Atlantic of a breach by the Key
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Employee of any provision of this Agreement shall not be construed as a waiver
of any subsequent breach.
14. Entire Agreement: This Agreement sets forth the entire
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understanding of Xxxx Atlantic and the Key Employee, and supersedes all prior
agreements and communications, whether oral or written, pertaining to
eligibility for stay incentives of the type described herein, and covenants
pertaining to recruiting or hiring, and proprietary information. This Agreement
shall not be modified except by written agreement of the Key Employee and Xxxx
Atlantic.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
XXXX ATLANTIC CORPORATION
By:
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THE KEY EMPLOYEE
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pmgteret5.doc
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