Exhibit 10zz
AGREEMENT
THIS AGREEMENT is made and entered into this 18th day of October, 2000,
by and between BellSouth Corporation, a Georgia corporation ("Company"), and
Xxxxxxx X. Xxxxxxxx ("Executive"):
Reasons for this Agreement. Company has identified Executive as an
individual with significant skills and experience critical to the business of
Company. In view of the significant and growing demand for executive talent, the
potential impact on Company's executives of the transformational changes
occurring within our industry and company, and the need to ensure continuity of
Company's senior executive team, Company desires to provide Executive through
this Agreement with certain incentives to remain in Company's employment. This
Agreement is also designed to provide additional motivation for meeting
Company's goals and objectives, to address potential long term employment
concerns of Executive, and to impose certain reasonable restrictions on
Executive's activities designed to protect Company's interests should
Executive's employment terminate.
Executive has been employed by Company and its Affiliated Companies
since 1981 and, during his tenure, has served in a variety of senior capacities.
Since January 1, 2000, Executive has served as Company's President-Customer
Markets, reporting to Company's Chairman, and having responsibility for all
sales, marketing and customer care activities across the Company's domestic
retail and carrier customer markets for voice, advanced data, Internet and video
services. From January 1, 1998 until January 1, 2000, Executive served as
Company's Group President-Complex Business Services and was responsible for
coordinating and marketing Company's large business efforts. Prior to January 1,
1998, Executive served as Vice President-Marketing, responsible for
multi-product offerings, Company's competitive local exchange carrier (CLEC),
and its managed network solutions business operations.
Executive acknowledges that Company and Affiliated Companies have
disclosed or made available Confidential Information to Executive which could be
used by Executive to Company's or Affiliated Companies' detriment. In addition,
in connection with his employment, Executive has developed important
relationships and contacts with employees valuable to Company and Affiliated
Companies.
Executive further acknowledges that the covenant not to compete and
other restrictive covenants in this Agreement are fair and reasonable, that
enforcement of the provisions of this Agreement will not cause him undue
hardship, and that the provisions of this Agreement are reasonably necessary and
commensurate with the need to protect Company and Affiliated Companies and their
business interests and property from irreparable harm.
Agreement. In consideration of the mutual promises contained in this
Agreement and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, Executive and Company agree as follows:
1. Restricted Shares Award. In connection with execution of this
Agreement, Company shall grant to Executive an award of one hundred thousand
(100,000) restricted shares of Company's common stock (such award being referred
to in this Agreement as the "Restricted Shares Award"). The Restricted Shares
Award shall be granted pursuant to an agreement (the "Restricted Shares Award
Agreement") substantially identical to the BellSouth Corporation Restricted
Shares Award Agreement attached hereto as Exhibit "A" and incorporated by this
reference herein.
2. Minimum SERP Benefit. In determining the amount of benefits payable
with respect to Executive under SERP, upon completion by Executive of at least
ten (10) additional years of "Net Credited Service" (as such term is defined in
SERP) after the date of this Agreement (as set forth above), Executive shall be
entitled to benefits equal to the greater of:
(i) an aggregate annual benefit based on (A) sixty
percent (60%) of "Included Earnings" (as such term is
defined in SERP), increased by two (2) percentage
points for each such additional year of Net Credited
Service in excess of ten (10) (such percentage not to
exceed, however, in the aggregate seventy percent
(70%) of Included Earnings), instead of the formula
described in section 4.4(a)(i)(A) of SERP, and (B) an
early retirement discount of one-quarter percent
(0.25%) for each calendar month by which Executive's
"Pension Commencement Date" (as such term is defined
in SERP) precedes his sixty-second (62nd) birthday,
instead of the otherwise applicable early retirement
discount described in section 4.4(c) of SERP; and
(ii) the benefits provided to Executive under SERP without
regard to this Section 2.
Except as otherwise provided in this Section 2, all other terms and
conditions of SERP shall govern Executive's entitlement to benefits thereunder.
In the event SERP shall be amended or restated or redesigned, benefits payable
with respect to Executive under such amended, restated or redesigned plan shall
include a benefit enhancement designed to approximate as nearly as reasonably
possible the SERP benefit enhancement described in this Section 2.
3. Termination Allowance. In the event Executive's employment is
terminated under circumstances described below in this Section 3, Company shall
pay to Executive a termination allowance. The termination allowance shall be an
amount equal to the sum of (i) two hundred percent (200%) of Executive's Base
Salary in effect on the date of Executive's termination of employment, plus (ii)
two hundred percent (200%) of the standard award amount applicable to Executive
under the BellSouth Short Term Incentive Award Plan ("STIAP") for the year in
which his date of termination occurs, less all applicable withholdings, payable
in a single lump sum payment. Payment of the termination allowance shall be made
as soon as practicable following Executive's termination of employment under
circumstances entitling him to such
payment, and satisfaction of all conditions described in this Agreement on
Executive's entitlement to such payment.
For purposes of this Agreement, "Base Salary" shall refer to the gross
annual base salary payable to Executive including (i) the amounts of any
before-tax contributions made by Executive from such salary to the BellSouth
Retirement Savings Plan, or any other tax-qualified cash or deferred arrangement
sponsored by Company, and (ii) the amount of any other deferrals of such salary
under any nonqualified deferred compensation plan(s) maintained by Company.
Executive's employment shall be deemed to have been terminated under
circumstances described in this Section 3 only if all of the following
conditions are satisfied:
(A) Executive's employment is terminated either (1) by
Company, other than for Cause, or (2) by Executive
for Good Reason; and
(B) Executive executes a release satisfying the terms of
Section 6(b) of this Agreement; and
(C) Executive executes an agreement regarding competition
with Company and Affiliated Companies satisfying the
terms of Section 9(b) of this Agreement; and
(D) Executive is not transferred to or reemployed by an
Affiliated Company.
4. Vesting of Executive Benefits. In the event Executive's employment
is terminated under circumstances described in Section 3 of this Agreement, all
benefits of Executive under the BellSouth Corporation Nonqualified Deferred
Compensation Plan, the BellSouth Nonqualified Deferred Income Plan, the
BellSouth Split-Dollar Life Insurance Plan, the BellSouth Supplemental Life
Insurance Plan, and the SERP, shall be determined as if Executive, upon his
termination of employment, had been eligible for a service pension under the
terms and conditions of the BellSouth Personal Retirement Account Pension Plan.
This provision shall be disregarded in determining benefits of (or with respect
to) Executive under any other Company-sponsored compensation or benefit plan or
program, including without limitation the Stock Plan.
5. Non-Vested Stock Options. In the event Executive's employment is
terminated under circumstances described in Section 3 of this Agreement, Company
shall pay to Executive an amount with respect to all Options (as such term is
defined in the Stock Plan) to acquire Company stock which are forfeited by
virtue of having not been vested and exercisable at the time of such termination
of employment, determined:
(i) by multiplying the number of Options in each such
grant by the amount, if any, by which the Fair Market
Value of Company's
common stock subject to the Option exceeds the
exercise price of those Options; and
(ii) by then multiplying the amount determined in (i)
above with respect to each such Option grant by a
fraction, the numerator of which is the number of
whole calendar months which shall have elapsed from
the grant date of such Option through the date of
Executive's employment termination date, and the
denominator of which is the number of calendar months
in the full vesting period applicable to such grant.
Payment of the amount so determined, less all applicable withholdings,
shall be made in a single lump sum payment as soon as practicable following
Executive's termination of employment under circumstances entitling him to such
payment, and satisfaction of all conditions described in this Agreement on
Executive's entitlement to such payment.
For purposes of this Agreement, "Fair Market Value" shall mean the
average of the high and low sales prices of one share of Company stock subject
to the Option on the New York Stock Exchange for the last business day (on which
the New York Stock Exchange operates and is open to the public for trading) of
each of the three (3) months preceding the month in which Executive's
termination of employment occurs.
6. Discharge and Waiver. (a) Executive fully releases and forever
discharges Company and Affiliated Companies, and any employee, officer,
director, representative, agent, successor or assign of Company and Affiliated
Companies (both in their personal and official capacities), and all persons
acting by, through and under or in concert with any of them, from any and all
claims, demands, causes of action, remedies, obligations, costs and expenses of
whatever nature, whether under the common law, state law, federal law (including
but not limited to the Age Discrimination in Employment Act of 1967) or
otherwise, through the date of this Agreement, including those arising from or
in connection with the terms and conditions of employment with Company (and
Affiliated Companies). This paragraph is not intended to and shall not affect
benefits to which Executive may be entitled under any pension, savings, health,
welfare, or other benefit plan in which Executive is a participant.
(b) Furthermore, Company's obligations under this Agreement upon
termination of Executive's employment, and Executive's entitlement to any such
benefits, are expressly conditioned upon execution by Executive, upon
termination of his employment, of a release agreement substantially in the form
of the release agreement attached to this Agreement as Exhibit "B," which is
incorporated herein by this reference.
7. Covenant Not to Xxx. Executive covenants and agrees not to make or
file any claim, demand or cause of action or seek any remedy of whatever nature,
whether under the common law, state law, federal law (including but not limited
to the Age Discrimination in
Employment Act of 1967) or otherwise, arising from or in connection with the
matters discharged and waived in Section 6, above.
8. Confidential Information. Executive agrees to protect 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. For purposes of this
Agreement, "Confidential Information" shall mean information, whether generated
internally or externally, relating to Company's business or to 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, and financial data (including
marketing information and strategies and personnel data). 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, but shall continue to include trade secrets as long as information
remains a trade secret under applicable law.
9. Employment with Competitors. (a) While employed by Company or an
Affiliated Company, and during the period of eighteen (18) months after the
termination of such employment, Executive agrees not to provide services (as
more fully described below) in competition with Company or any Affiliated
Company to any person or entity which provides products or services identical to
or similar to products and services provided by Company or Affiliated Companies
in the same market(s), whether as an employee, consultant, independent
contractor or otherwise, within the Territory.
For purposes of this Agreement, the term "Territory" shall mean the
territory in which Executive provides services to Company and Affiliated
Companies, consisting of those portions of Alabama, Florida, Georgia, Kentucky,
Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee, and those
additional markets listed on Exhibit "C" attached hereto and incorporated herein
by this reference, in which Company or Affiliated Companies are engaged in
business. Executive agrees that because of the widespread nature of Company's
business, breach of this Agreement by engaging in competitive activity anywhere
in this broad Territory would irreparably injure Company or Affiliated Companies
and that, therefore, a more limited geographic restriction is neither feasible
nor appropriate.
The services which Executive has provided to Company and Affiliated
Companies, and which Executive shall be prohibited from providing in competition
with Company or Affiliated Companies in accordance with the terms of this
Agreement shall be management, planning, administration, or other participation
in or providing advice with respect to the communications services business,
including without limitation all forms of wireline (including without limitation
local exchange, exchange access and intraLATA toll) telecommunications services,
systems and products, all forms of wireless (including without limitation
cellular, personal communications
service, and mobile data) communications services, systems and products, all
forms of electronic commerce or communications including internet and other web
based applications, data transmission and networking, entertainment services,
systems and products, paging services, systems and products, and advertising and
publishing, to the extent engaged in by Company and Affiliated Companies on the
date of this Agreement.
Executive represents to Company that Executive's education, training
and experience are such that this covenant not to compete will not jeopardize or
significantly interfere with Executive's ability to secure other gainful
employment.
(b) After Executive's termination of employment, Company's obligation
to provide any of the benefits, entitlements or payments described in this
Agreement or in the Restricted Shares Award Agreement are expressly conditioned
upon execution by Executive of an agreement, in form and substance reasonably
acceptable to Company, and reflecting terms substantially identical to the terms
of Section 9(a) of this Agreement updated, however, to reflect, as of the date
of Executive's termination of employment, (i) the products and services provided
by Company and Affiliated Companies, (ii) the territory in which such products
and services are provided by Company and Affiliated Companies, and (iii) the
nature of the services provided, and activities engaged in, by Executive, on
behalf of Company and Affiliated Companies. Upon execution of such agreement,
the provisions of Section 9(a) of this Agreement shall thereafter be void.
(c) In the event that Executive either (i) fails or refuses to execute
an agreement satisfying the terms of Section 9(b) of this Agreement following
his termination of employment, or (ii) fails to comply with the terms of Section
9(a), the agreement described in Section 9(b), or Section 10 of this Agreement,
then, in addition to all other rights and remedies available to Company and
Affiliated Companies under this Agreement or at law or in equity:
(A) all amounts otherwise payable by Company or an
Affiliated Company to (or on behalf of) Executive
pursuant to the terms of this Agreement for periods
subsequent to the date of termination of employment,
with regard to clause (i) above, or of such failure,
with regard to clause (ii) above, as the case may be,
shall be forfeited and Company and Affiliated
Companies shall cease to be under any further
obligation to Executive with respect to the
compensation and benefits described in this
Agreement;
(B) Executive shall refund to Company promptly any and
all amounts previously paid to or on behalf of
Executive pursuant to the terms of this Agreement for
periods subsequent to the occurrence of any event
described in clause (ii) above of this Section 9(c);
and
(C) Executive shall promptly return to Company all shares
of Company's common stock delivered to Executive
pursuant to the
Restricted Shares Award plus, if any of such shares
shall have been previously disposed of, a cash amount
equal to the proceeds from such disposition (or the
fair market value of such shares on the date of such
disposition, if disposed of for less than fair market
value).
10. Hiring or Solicitation of Company Employees. While employed by
Company or an Affiliated Company, and during the period of eighteen (18) months
after the termination of such employment, Executive will not hire or induce or
attempt to induce or solicit to leave employment with Company or Affiliated
Companies, for himself or on behalf of any other Person, anyone who is or was,
during Executive's employment with Company, an employee of Company or Affiliated
Companies. However, Executive may offer employment on behalf of himself or on
behalf of any company or entity to any such employee who terminated his or her
employment without any inducement or attempted inducement or solicitation by
Executive.
11. Interpretation; Severability of Invalid Provisions. Executive
acknowledges and agrees that the limitations described in this Agreement,
including specifically the limitations upon his activities, are reasonable in
scope, are necessary for the protection of Company's and Affiliated Companies'
business, and form an essential part of the consideration for which this
Agreement has been entered into. It is the intention of the parties that the
provisions of this Agreement be enforced to the fullest extent permissible under
applicable laws and public policies. Nonetheless, the rights and restrictions
contained in this Agreement may be exercised and shall be applicable and binding
only to the extent they do not violate any applicable laws and are intended to
be limited to the extent necessary so that they will not render this Agreement
illegal, invalid or unenforceable. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable by a court of competent
jurisdiction, the remaining provisions shall remain in full force and effect.
The provisions of this Agreement do not in any way limit or abridge Company's or
Affiliated Companies' rights under the laws of unfair competition, trade secret,
copyright, patent, trademark or any other applicable law(s), all of which are in
addition to and cumulative of Company's or Affiliated Companies' rights under
this Agreement. Executive agrees that the existence of any claim by Executive
against Company or any Affiliated Company, whether predicated on this Agreement
or otherwise, shall not constitute a defense to enforcement by Company or any
Affiliated Company of any or all of such provisions or covenants.
12. Relief. The parties acknowledge that a breach or threatened breach
by Executive of any of the terms of this Agreement would result in material and
irreparable damage and injury to Company or Affiliated Companies, and that it
would be difficult or impossible to establish the full monetary value of such
damage. Therefore, Company and Affiliated Companies shall be entitled to
injunctive relief in the event of Executive's breach or threatened breach of any
of the terms contained in this Agreement. In the event of any breach of this
Agreement by Executive, if Company or any Affiliated Company should employ
attorneys or incur other expenses for the enforcement of any obligation or
agreement of Executive contained herein, Executive agrees that, on demand and to
the extent permitted by law, Executive shall reimburse Company or the Affiliated
Company for its reasonable attorneys' fees and such other reasonable expenses so
incurred.
13. Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement, or the breach, termination or invalidity hereof
(collectively, a "Claim") shall be settled by arbitration pursuant to the rules
of the American Arbitration Association. Any such arbitration shall be conducted
by one arbitrator, with experience in the matters covered by this Agreement,
mutually acceptable to the parties. If the parties are unable to agree on the
arbitrator within thirty (30) days of one party giving the other party written
notice of intent to arbitrate a Claim, the American Arbitration Association
shall appoint an arbitrator with such qualifications to conduct such
arbitration. The decision of the arbitrator in any such arbitration shall be
conclusive and binding on the parties. Any such arbitration shall be conducted
in Atlanta, Georgia.
14. Agreement Binding. This Agreement shall be binding upon and inure
to the benefit of Company and Affiliated Companies, and their successors,
assignees, and designees, and Executive and Executive's heirs, executors,
administrators, personal representatives and assigns.
15. Entire Agreement; Previous Agreement. This Agreement contains the
entire agreement between the parties and no statements, promises or inducements
made by any party hereto, or agent of either party, which are not contained in
this Agreement shall be valid or binding; provided, however, that 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. This
Agreement may not be enlarged, modified or altered except in writing signed by
the parties.
16. Nonwaiver. The failure of Company or any Affiliated Companies to
insist upon strict performance of the terms of this Agreement, or to exercise
any option herein, shall not be construed as a waiver or a relinquishment for
the future of such term or option, but rather the same shall continue in full
force and effect.
17. Notices. All notices, requests, demands and other communications
required or permitted by this Agreement or by any statute relating to this
Agreement shall be in writing and shall be deemed to have been duly given if
delivered or mailed, first-class, certified mail, postage prepaid, addressed as
follows:
To Company: Xxxxxxx X. Xxxxxx
Executive Vice President and
General Counsel
BellSouth Corporation
2002 Campanile
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, XX 00000
To Executive: Xxxxxxx X. Xxxxxxxx
0000 Xxxx Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
(or such other address as shall be provided by
Executive to Company from time to time)
18. Pooling of Interests Accounting Treatment. Notwithstanding anything
to the contrary in this Agreement, if the application of any provision(s) of
this Agreement, including without limitation the Restricted Shares Award
described in Section 1, 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 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). 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 Company. The Board of
Directors of Company shall, in its sole and absolute discretion, make all
determinations necessary under this Section; provided, that determinations
regarding the application of the pooling of interests accounting rules for these
purposes shall be made by Company, with the concurrence of Company's independent
auditors at the time such determination is to be made.
19. Nonduplication. Notwithstanding any other provisions of this
Agreement, if Executive becomes entitled to benefits under Article III of the
CIC Agreement, (i) the severance benefits described in Article III(a) of the CIC
Agreement shall be in lieu of any termination allowance to which Executive is
otherwise entitled under Section 3 of this Agreement; (ii) Article III(d) of the
CIC Agreement shall apply in lieu of the provisions of Section 4 of this
Agreement; and (iii) Article IV of the CIC Agreement shall apply in lieu of the
provisions of Section 5 of this Agreement. Except as otherwise specifically
provided in this Section 19, both this Agreement and the CIC Agreement shall
continue in full force and effect, and Article X(e) of the CIC Agreement shall
be interpreted consistently herewith.
20. Nondisclosure. Executive shall not disclose the existence or terms
of this Agreement to any third party (excluding Executive's spouse and
children), except to receive advice of legal counsel, financial advisors or tax
advisors (who shall also be required to maintain its confidentiality) or to
comply with any statutory or common law duty; provided that these
restrictions on disclosure shall not apply to the extent that the existence of
this Agreement are disclosed by Company or any Affiliated Company as part of its
periodic public filings and disclosures or otherwise.
21. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
22. Governing Law. This Agreement shall be construed under and governed
by the laws of the State of Georgia. Executive has been advised to consult with
an attorney, acknowledges having had ample opportunity to do so and fully
understands the binding effect of this Agreement. In this regard, Executive
acknowledges that a copy of this Agreement was provided to Executive for review
and consideration for up to twenty-two (22) days. Further, Executive understands
that this Agreement may be revoked by Executive within seven (7) days from the
date of execution of this Agreement.
23. Definitions. For purposes of this Agreement, the following terms
shall have the meaning specified below:
(a) "Affiliated Companies" - shall mean Company and each entity in
respect of which Company owns directly or indirectly (i) with respect to a
corporation, stock that represents at least ten (10%) percent of the total
combined voting power of all classes of stock in the corporation in connection
with the election of directors of such corporation, or (ii) in the case of a
joint venture, partnership, limited liability company or similar entity, and
interest of at least ten (10%) percent in the capital or profits of such entity.
(b) "Base Salary" - shall have the meaning ascribed to such term in
Section 3 of this Agreement.
(c) "Cause" - shall mean Executive's (i) engaging in an act (or acts)
of willful dishonesty involving Company or Affiliated Companies or their
business(es) that is demonstrably injurious to Company or Affiliated Companies;
(ii) refusal or failure to follow reasonable instructions of Company's Chief
Executive Officer or Board of Directors; or (iii) conviction of a crime
classified as a felony.
(d) "CIC Agreement" - the Executive Severance Agreement entered into by
and between Executive and Company on ________, providing certain benefits in the
event of a change in corporate control of Company, as amended from time to time.
(e) "Confidential Information" - shall have the meaning ascribed to
such term in Section 8 of this Agreement.
(f) "Fair Market Value" - shall have the meaning ascribed to such term
in Section 5 of this Agreement.
(g) "Good Reason" - shall mean, without Executive's express written
consent a reduction in Executive's Base Salary, or his compensation band, as in
effect immediately prior to such reduction, or the failure to pay a bonus award
to which Executive is otherwise entitled under any of the short term or long
term incentive plans in which Executive participates (or any successor incentive
compensation plans) at the time such awards are usually paid.
(h) "Person" - shall mean any individual, corporation, bank,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, governmental or other legal or business entity.
(i) "Restricted Shares Award" - shall have the meaning ascribed to
such term in Section 1 of this Agreement.
(j) "Restricted Shares Award Agreement" - shall have the meaning
ascribed to such term in Section 1 of this Agreement.
(k) "SERP" - the BellSouth Corporation Supplemental Executive
Retirement Plan, as amended from time to time.
(l) "Stock Plan" - the BellSouth Corporation Stock Plan and related
award agreements, as amended from time to time.
(m) "Territory" - shall have the meaning ascribed to such term in
Section 9 of this Agreement.
IN WITNESS WHEREOF, Company has caused this Agreement to be executed by
its duly authorized representative, and Executive has executed this Agreement,
as of the date written above.
EXECUTIVE: BELLSOUTH CORPORATION:
/s/ Xxxxxxx X. Xxxxxxxx By:/s/ X. X. Xxxxxxxxxx
XXXXXXX X. XXXXXXXX Title: Vice President - Human Resources
