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EXHIBIT 10-11
EXECUTIVE SEVERANCE AGREEMENT
This AGREEMENT ("Agreement") dated as of January 8, 1996, by
and between GTE Service Corporation, a New York corporation (the "Company"),
and Xxxxxxx X. Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company recognizes the valuable services that the
Executive has rendered thereto and desires to be assured that the Executive
will continue to attend to the business and affairs of the Company without
regard to any potential or actual change in control of GTE Corporation, a New
York corporation and the Company's sole shareholder ("GTE"); and
WHEREAS, the Executive is willing to continue to serve the
Company, but desires assurance that he will not be materially disadvantaged by
a change in control of GTE;
NOW, THEREFORE, in consideration of the Executive's continued
service to the Company and the mutual agreements herein contained, the Company
and the Executive hereby agree as follows:
ARTICLE I
ELIGIBILITY FOR BENEFITS
Section 1.1. Qualifying Termination. The Company shall
not be required to provide any benefits to the Executive
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pursuant to this Agreement unless a Qualifying Termination occurs before the
Agreement expires in accordance with Section 6.1 hereof. For purposes of this
Agreement, a Qualifying Termination shall occur only if
(a) a Change in Control occurs, and
(b) (i) within two years after the Change in Control, the
Company terminates the Executive's employment other
than for Cause; or
(ii)(A) within two years after the Change in Control,
a Good Reason arises, and (B) the Executive
terminates employment with the Company within (I) six
months after the Good Reason arises or (II) two years
after the Change in Control, whichever occurs later;
provided, that a Qualifying Termination shall not occur if the Executive's
employment with the Company terminates by reason of the Executive's Retirement,
Disability, or death. A Qualifying Termination may occur even though the
Executive retires from employment with the Company other than by reason of
Retirement or Disability.
Section 1.2. Change in Control. Except as provided below,
a Change in Control shall be deemed to occur when and only when the first of
the following events occurs:
(a) an acquisition (other than directly from GTE) of
securities of GTE by any Person, immediately
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after which such Person, together with all Affiliates
and Associates of such Person, shall be the
Beneficial Owner of securities of GTE representing 20
percent or more of the Voting Power or such lower
percentage of the Voting Power that, from time to
time, would cause the Person to constitute an
"Acquiring Person" (as such term is defined in the
Rights Plan); provided that, in determining whether a
Change in Control has occurred, the acquisition of
securities of GTE in a Non-Control Acquisition shall
not constitute an acquisition that would cause a
Change in Control; or
(b) three or more directors, whose election or nomination
for election is not approved by a majority of the
members of the "Incumbent Board" (as defined below)
then serving as members of the Board, are elected
within any single 12-month period to serve on the
Board; provided that an individual whose election or
nomination for election is approved as a result of
either an actual or threatened "Election Contest" (as
described in Rule 14a-11 promulgated under the
Securities Exchange Act of 1934, as amended from time
to time) or other actual or threatened
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solicitation of proxies or consents by or on behalf
of a Person other than the Board (a "Proxy Contest"),
including by reason of any agreement intended to
avoid or settle any Election Contest or Proxy
Contest, shall be deemed not to have been approved by
a majority of the Incumbent Board for purposes
hereof; or
(c) members of the Incumbent Board cease for any reason
to constitute at least a majority of the Board;
"Incumbent Board" shall mean individuals who, as of
the close of business on April 19, 1995, are members
of the Board; provided that, if the election, or
nomination for election by GTE's shareholders, of any
new director was approved by a vote of at least
three-quarters of the Incumbent Board, such new
director shall, for purposes of this Agreement, be
considered as a member of the Incumbent Board;
provided further that no individual shall be
considered a member of the Incumbent Board if such
individual initially assumed office as a result of
either an actual or threatened Election Contest or
other actual or threatened Proxy Contest, including
by reason of any agreement intended to
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avoid or settle any Election Contest or Proxy
Contest; or
(d) approval by shareholders of GTE of:
(i) a merger, consolidation, or reorganization
involving GTE, unless
(A) the shareholders of GTE, immediately
before the merger, consolidation, or reorganization,
own, directly or indirectly immediately following
such merger, consolidation, or reorganization, at
least 50 percent of the combined voting power of the
outstanding voting securities of the corporation
resulting from such merger, consolidation, or
reorganization (the "Surviving Corporation") in
substantially the same proportion as their ownership
of the voting securities immediately before such
merger, consolidation, or reorganization;
(B) individuals who were members of the
Incumbent Board immediately prior to the execution of
the agreement providing for such merger,
consolidation, or reorganization constitute at least
a majority of the board of directors of the Surviving
Corporation; and
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(C) no Person (other than GTE or any
subsidiary of GTE, any employee benefit plan (or any
trust forming a part thereof) maintained by GTE, the
Surviving Corporation, or any subsidiary of GTE, or
any Person who, immediately prior to such merger,
consolidation, or reorganization, had Beneficial
Ownership of securities representing 20 percent (or
such lower percentage the acquisition of which would
cause a Change in Control pursuant to paragraph (a)
of this definition of "Change in Control") or more of
the Voting Power) has Beneficial Ownership of
securities representing 20 percent (or such lower
percentage the acquisition of which would cause a
Change in Control pursuant to paragraph (a) of this
definition of "Change in Control") or more of the
combined Voting Power of the Surviving Corporation's
then outstanding voting securities;
(ii) a complete liquidation or dissolution of GTE;
or
(iii) an agreement for the sale or other disposition
of all or substantially all of the assets of GTE to
any Person (other than a transfer to a subsidiary of
GTE).
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For purposes of this Section, the following terms shall have
the definitions set forth below:
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended from time to time.
"Board" means the Board of Directors of GTE.
"Non-Control Acquisition" means an acquisition by (1) an
employee benefit plan (or a trust forming a part thereof) maintained by GTE or
any of its subsidiaries, (2) GTE or any of its subsidiaries, or (3) any Person
in connection with a "Non-Control Transaction."
"Non-Control Transaction" means a transaction described in
clauses (A) through (C) of paragraph (d)(i) of the definition of "Change in
Control" herein.
"Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, or other entity.
A Person shall be deemed the "Beneficial Owner" of, and shall
be deemed to "beneficially own," any securities:
(x) which such Person or any of such Person's Affiliates
or Associates beneficially owns, directly or
indirectly;
(y) which such Person or any of such Person's Affiliates
or Associates has (i) the right or
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obligation to acquire (whether such right or
obligation is exercisable or effective immediately or
only after the passage of time) pursuant to any
agreement, arrangement, or understanding (whether or
not in writing) or upon the exercise of conversion
rights, exchange rights, rights (other than the
rights granted pursuant to the Rights Plan), warrants
or options, or otherwise; provided that a Person
shall not be deemed the "Beneficial Owner" of, or to
"beneficially own," securities tendered pursuant to a
tender or exchange offer made by such Person or any
of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or
exchange; or (ii) the right to vote pursuant to any
agreement, arrangement, or understanding (whether or
not in writing); provided that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially
own," any security under this clause (ii) if the
agreement, arrangement, or understanding to vote such
security (A) arises solely from a revocable proxy
given in response to a public proxy or consent
solicitation made pursuant to, and in accordance
with, the
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applicable rules and regulations of the Securities
Exchange Act of 1934, as amended from time to time,
and (B) is not also then reported by such person on
Schedule 13D under the Securities Exchange Act of
1934, as amended from time to time (or any comparable
or successor report); or
(z) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate
thereof) with which such Person or any of such
Person's Affiliates or Associates has any agreement,
arrangement, or understanding (whether or not in
writing), or with which such Person or any of such
Person's Affiliates or Associates have otherwise
formed a group for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as
described in clause (ii)(A) of subparagraph (y),
above), or disposing of any securities of GTE.
"Rights Plan" means the Rights Agreement, dated as of December
7, 1989, between GTE and State Street Bank and Trust Company (now administered
by the First National Bank of Boston), as it may be amended from time to time,
or any successor thereto.
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"Voting Power" means the voting power of all securities of GTE
then outstanding generally entitled to vote for the election of directors of
GTE.
Section 1.3. Termination for Cause. The Company shall
have Cause to terminate the Executive for purposes of Section 1.1 hereof only
if the Executive (a) engages in unlawful acts intended to result in the
substantial personal enrichment of the Executive at the Company's expense, or
(b) engages (except by reason of incapacity due to illness or injury) in a
material violation of his responsibilities to the Company that results in a
material injury to the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to him a notice, consisting of a copy of a resolution
duly adopted by the affirmative vote of not less than three quarters of the
entire membership of GTE's Board of Directors at a duly held meeting of the
Board of Directors (with reasonable notice to the Executive and an opportunity
for the Executive, together with counsel, to be heard before the Board of
Directors) ("Notice of Termination"), finding that the Executive has engaged in
the conduct set forth above in this Section 1.3 and specifying the particulars
thereof in detail. GTE's Board of Directors may not delegate or assign its
duties under this Section 1.3.
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Section 1.4. Termination for Good Reason. The Executive
shall have a Good Reason for terminating employment with the Company only if
one or more of the following occurs after a Change in Control:
(a) a change in the Executive's status or position(s)
with the Company that, in the Executive's reasonable
judgment, represents a demotion from the Executive's
status or position(s) in effect immediately before
the Change in Control;
(b) the assignment to the Executive of any duties or
responsibilities that, in the Executive's reasonable
judgment, are inconsistent with the Executive's
status or position(s) in effect immediately before
the Change in Control;
(c) layoff or involuntary termination of the Executive's
employment, except in connection with the termination
of the Executive's employment for Cause or as a
result of the Executive's Retirement, Disability, or
death;
(d) a reduction by the Company in the Executive's total
compensation (which shall be deemed, for this
purpose, to be equal to his base salary plus the
greater of (i) the most recent award that he has
earned under the GTE Corporation
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Executive Incentive Plan, as amended from time to
time, or any successor thereto (the "EIP"), or (ii)
an EIP award equal to the Executive's Average
Percentage of the annual value ( i.e., the dollar
amount) of the normal payment under the EIP for the
Executive's salary level (such annual value and
normal payment being those that are in effect under
the EIP immediately before the date on which the
Change in Control occurs for the Executive's salary
level immediately before the date on which the Change
in Control occurs)). For purposes of this paragraph
(d), the Executive's "Average Percentage" means the
average of the Executive's Annual Percentages for the
Determination Years. For purposes of this paragraph
(d), the Executive's "Annual Percentage" for each
Determination Year means a fraction (expressed as a
percentage), the numerator of which is the EIP award
earned by the Executive for such Determination Year,
and the denominator of which is the annual value of
the normal payment under the EIP for the Executive's
salary level (such annual value and normal payment
being those that were in effect under the EIP for
such Determination Year for
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the Executive's salary level for such Determination
Year). For purposes of this paragraph (d), a
"Determination Year" means each of the last three EIP
plan years ending before the date on which the Change
in Control occurs (or, if less, the number of those
three plan years during which the Executive was a
participant in the EIP);
(e) a material increase in the Executive's
responsibilities or duties without a commensurate
increase in total compensation;
(f) the failure by the Company to continue in effect any
Plan in which the Executive is participating at the
time of the Change in Control (or plans or
arrangements providing the Executive with
substantially equivalent benefits) other than as a
result of the normal expiration of any such Plan in
accordance with its terms as in effect at the time of
the Change in Control;
(g) any action or inaction by the Company that would
adversely affect the Executive's continued
participation in any Plan on at least as favorable a
basis as was the case on the date of the Change in
Control, or that would materially reduce the
Executive's benefits in the future
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under the Plan or deprive him of any material
benefits that he enjoyed at the time of the Change in
Control, except to the extent that such action or
inaction by the Company is required by the terms of
the Plan as in effect immediately before the Change
in Control, or is necessary to comply with applicable
law or to preserve the qualification of the Plan
under section 401(a) of the Internal Revenue Code,
and except to the extent that the Company provides
the Executive with substantially equivalent benefits;
(h) the Company's failure to provide and credit the
Executive with the number of days of paid vacation,
holiday, or leave to which he is then entitled in
accordance with the Company's normal vacation,
holiday, or leave policy in effect immediately before
the Change in Control;
(i) the imposition of any requirement that the Executive
be based anywhere other than within 25 miles of where
his principal office was located immediately before
the Change in Control;
(j) a material increase in the frequency or duration of
the Executive's business travel;
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(k) the Company's failure to obtain the express
assumption of this Agreement by any successor to the
Company as provided by Section 6.3 hereof;
(l) any attempt by the Company to terminate the
Executive's employment that is not effected pursuant
to a Notice of Termination satisfying the
requirements of Section 1.3 hereof or that does not
afford the Executive the procedural protections
prescribed by that Section; or
(m) any violation by the Company of any agreement
(including this Agreement) between it and the
Executive.
Notwithstanding the foregoing, no action by the Company shall give rise to a
Good Reason if it results from the Executive's termination for Cause,
Retirement, or death, and no action by the Company specified in paragraphs (a)
through (d) of the preceding sentence shall give rise to a Good Reason if it
results from the Executive's Disability. A Good Reason shall not be deemed to
be waived by reason of the Executive's continued employment as long as the
termination of the Executive's employment occurs within the time prescribed by
Section 1.1(b)(ii)(B) hereof. For purposes of this Section 1.4, "Plan" means
any compensation plan, such as an incentive, stock option, or restricted stock
plan, or any employee benefit plan, such as a thrift, pension, profit-sharing,
stock bonus,
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long-term performance award, medical, disability, accident, or life insurance
plan, or a relocation plan or policy, or any other plan, program or policy of
the Company that is intended to benefit employees.
Section 1.5. Retirement. For purposes of this Agreement,
"Retirement" shall mean the Executive's termination of employment upon or after
attaining age 65.
Section 1.6. Disability. For purposes of this Agreement,
"Disability" shall mean an illness or injury that prevents the Executive from
performing his duties (as they existed immediately before the illness or
injury) on a full-time basis for six consecutive months.
Section 1.7. Notice. If a Change in Control occurs, the
Company shall notify the Executive of the occurrence of the Change in Control
within two weeks after the Change in Control.
ARTICLE II
BENEFITS AFTER A QUALIFYING TERMINATION
Section 2.1. Basic Severance Payment.
(a) If the Executive incurs a Qualifying Termination, the
Company shall pay to the Executive a cash amount
equal to 200% of the Base Amount. The Base Amount
shall be an amount equal to the greater of:
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(A) the sum of (I) the Executive's base
annual salary immediately before the Change in
Control plus (II) the Executive's Average Percentage
of the annual value (i.e., the dollar amount) of the
normal payment under the EIP for the Executive's
salary level (such annual value and normal payment
being those that are in effect under the EIP
immediately before the date on which the Change in
Control occurs for the Executive's salary level
immediately before the date on which the Change in
Control occurs). For purposes of this paragraph (A),
the Executive's "Average Percentage" means the
average of the Executive's Annual Percentages for the
Determination Years. For purposes of this paragraph
(A), the Executive's "Annual Percentage" for each
Determination Year means a fraction (expressed as a
percentage), the numerator of which is the EIP award
earned by the Executive for such Determination Year,
and the denominator of which is the annual value of
the normal payment under the EIP for the Executive's
salary level (such annual value and normal payment
being those that were in effect under the EIP for
such Determination Year for
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the Executive's salary level for such Determination
Year). For purposes of this paragraph (A), a
"Determination Year" means each of the last three EIP
plan years ending before the date on which the Change
in Control occurs (or, if less, the number of those
three plan years during which the Executive was a
participant in the EIP); or
(B) the sum of (I) the Executive's base annual salary
immediately before the Qualifying Termination plus
(II) the Executive's Average Percentage of the annual
value (i.e., the dollar amount) of the normal payment
under the EIP for the Executive's salary level (such
annual value and normal payment being those that are
in effect under the EIP immediately before the date
on which the Qualifying Termination occurs for the
Executive's salary level immediately before the date
on which the Qualifying Termination occurs). For
purposes of this paragraph (B), the Executive's
"Average Percentage" means the average of the
Executive's Annual Percentages for the Determination
Years. For purposes of this paragraph (B), the
Executive's "Annual Percentage" for each
Determination Year means a
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fraction (expressed as a percentage), the numerator
of which is the EIP award earned by the Executive for
such Determination Year, and the denominator of which
is the annual value of the normal payment under the
EIP for the Executive's salary level (such annual
value and normal payment being those that were in
effect under the EIP for such Determination Year for
the Executive's salary level for such Determination
Year). For purposes of this paragraph (B), a
"Determination Year" means each of the last three EIP
plan years ending before the date on which the
Qualifying Termination occurs (or, if less, the
number of those three plan years during which the
Executive was a participant in the EIP).
(b) The Company shall make the payment to the Executive
pursuant to subsection (a) of this Section 2.1 in a
lump sum within 30 days of the Qualifying
Termination.
Section 2.2. Insurance. If the Executive incurs a
Qualifying Termination, the Company shall provide the Executive, at the
Company's expense, for a period beginning on the date of the Qualifying
Termination, the same medical insurance and life insurance coverage as was in
effect
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immediately before the Change in Control (or, if greater, as in effect
immediately before the Qualifying Termination occurs); such coverage shall end
upon the earlier of (a) the expiration of 24 months after the Qualifying
Termination or (b)(i) with respect to medical insurance coverage, the date on
which the Executive first becomes eligible for medical insurance coverage
provided by a firm that employs him following the Qualifying Termination, or
(ii) with respect to life insurance coverage, the date on which the Executive
first becomes eligible for life insurance coverage provided by such firm.
Section 2.3. Outplacement Counseling. If the Executive
incurs a Qualifying Termination, the Company shall make available to the
Executive, at the Company's expense, outplacement counseling that is at least
equivalent to the outplacement counseling that the Company provided to its
terminated senior executives during 1995. Subject to the foregoing, the
Executive may select the organization that will provide the outplacement
counseling; provided, that this sentence shall not require the Company to
provide the Executive with outplacement counseling that is more costly to the
Company than the outplacement counseling that this Section 2.3 otherwise
requires the Company to provide to the Executive.
Section 2.4. Financial Counseling. If the Executive
incurs a Qualifying Termination, the Company shall, within 30 days of the
Qualifying Termination, make available to
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the Executive three individual financial counseling sessions, of at least two
hours each and at times and locations that are convenient to the Executive,
with a nationally recognized financial counseling firm. At the financial
counseling sessions, the financial counseling firm shall provide the Executive
with detailed financial advice that is tailored to the Executive's particular
personal and financial situation. The Company shall specify to the Executive
the information regarding his personal and financial situation that he must
provide to the financial counseling firm in order for the firm to provide the
counseling services required by this Section 2.4. The Company shall take all
reasonable and appropriate measures to assure that the financial counseling
firm preserves the confidentiality of all information conveyed by the Executive
to the counseling firm.
Section 2.5. Benefit Credit. If the Executive incurs a
Qualifying Termination,
(a) the Executive shall receive service credit, for the
purpose of receiving benefits and for vesting,
retirement eligibility, benefit accrual, and all
other purposes, under all employee benefit plans
sponsored by the Company (including, but not limited
to, health, life insurance, pension, savings, stock,
and stock ownership plans, but excluding the
Company's
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short-term and long-term disability plans) in which
he participated immediately before the Change in
Control, for 24 months;
(b) for purposes of determining the Executive's benefits
under all defined benefit pension plans maintained by
the Company, including the GTE Service Corporation
Supplemental Executive Retirement Plan ("SERP"), the
Executive's compensation shall include the amount
payable to the Executive pursuant to Section 2.1
hereof, and for purposes of this subsection (b), the
Executive shall be deemed to have received such
amount in monthly installments, each equal to 1/24th
of the amount payable to the Executive pursuant to
Section 2.1 hereof;
(c) if the Executive has not completed at least 10 years
of service for purposes of determining whether he has
a nonforfeitable interest in his accrued benefit
under a funded defined benefit pension plan
maintained by the Company in which he participated
immediately before the Change in Control, then in
addition to any service credit that the Executive
receives pursuant to Section 2.5(a) hereof, the
Executive shall receive credit for each year of
service with which he is
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otherwise credited (without regard to Section 2.5(a)
hereof) for vesting, retirement eligibility, benefit
accrual, and all other purposes under the plan, under
the SERP, and under the GTE Executive Retired Life
Insurance Plan (or any predecessor or successor
thereto) in accordance with the following table:
Years of Service
Otherwise Credited Service Credited
Without Regard to Pursuant to this
Section 2.5(a) Section 2.5(c)
------------------ ----------------
5 or less 2 times years of
service otherwise
credited
more than 5, but 10 years of service
not more than 10
more than 10 years of service
otherwise credited;
and
(d) the Executive shall be considered to have not less
than 76 points and 15 years of Accredited Service for
purposes of determining his eligibility for early
retirement benefits under the Company's defined
benefit pension plans (including, but not limited to,
the SERP), for purposes of determining his
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eligibility for benefits under the GTE Executive
Retired Life Insurance Plan (or any predecessor or
successor thereto) and for purposes of determining
his eligibility for benefits under the Company's post
retirement medical benefits plan (as in effect
immediately prior to the Change in Control).
Notwithstanding the service credit granted under subsection (a) of this Section
2.5 and the compensation recognized under subsection (b) of this Section 2.5,
nothing in this Section 2.5 shall prevent the Executive from receiving any
benefits to which the Executive is entitled under any defined benefit or
defined contribution pension plan maintained by the Company, including the SERP
(as such benefits are modified by this Agreement) in any form permitted by such
plans (including but not limited to a lump-sum distribution) immediately
following the Executive's Qualifying Termination. To the extent that the
Company's tax-qualified retirement plans cannot provide the benefits specified
by this Section 2.5 without jeopardizing the tax qualification of such plans,
the Company shall provide such benefits under the SERP and, in the case of the
Company's post retirement medical benefits plan as specified in Section 2.5(d),
if the benefit cannot be provided on a tax-free basis, the Company shall
provide such benefit on a basis that avoids an adverse income tax effect upon
the Executive (for example, by purchasing third party insurance).
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Section 2.6. Nonduplication.
(a) Nothing in this Agreement shall require the Company
to make any payment or to provide any benefit or
service credit that GTE or the Company is otherwise
required to provide under any other contract,
agreement, policy, plan, or arrangement.
(b) Subsection (a) shall not apply to the benefits
provided in accordance with the second and third
sentences of the paragraph entitled "Pension
Arrangement" of the letter agreement, dated October
20, 1994, executed by Xxxxxxx X. Xxx and Xxxxxxx X.
Xxxxx, providing for a life annuity pension of
$200,000 per year and the continuation of that
annuity to the Executive's wife after the Executive's
death.
Section 2.7. Prior Agreement. This Agreement supersedes
any prior Executive Severance Agreement entered into between the Company and
the Executive ("Prior Agreement"). On and after the date of this Agreement,
such Prior Agreement shall have no force or effect.
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ARTICLE III
EFFECT ON HUMAN RESOURCES POLICY 104
Section 3.1. Effect on Policy 104. If the Executive
becomes entitled to receive benefits hereunder, the Executive shall not be
entitled to any benefits under GTE Human Resources Policy 104, as amended from
time to time, or any successor policy, or under any other Company severance or
salary continuation policy (including but not limited to any benefits pursuant
to an involuntary separation program or similar program maintained under a
pension plan sponsored by the Company).
ARTICLE IV
TAX MATTERS
Section 4.1. Withholding. The Company may withhold from
any amounts payable to the Executive hereunder all federal, state, city or
other taxes that the Company may reasonably determine are required to be
withheld pursuant to any applicable law or regulation.
ARTICLE V
COLLATERAL MATTERS
Section 5.1. Nature of Payments. All payments to the
Executive under this Agreement shall be considered either payments in
consideration of his continued service to the
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Company or severance payments in consideration of his past services thereto.
Section 5.2. Legal Expenses. The Company shall pay all
legal fees and expenses that the Executive may incur as a result of the
Company's contesting the validity, the enforceability or the Executive's
interpretation of, or determinations under, this Agreement; provided, that this
Section 5.2 shall be operative only if and to the extent that (a) the Company
fails to establish a trust that defrays all such legal fees and expenses or (b)
the Company establishes such a trust, but the trust fails to pay all such legal
fees and expenses.
Section 5.3. Mitigation. The Executive shall not be
required to mitigate the amount of any payment provided for in this Agreement
either by seeking other employment or otherwise. The amount of any payment
provided for herein shall not be reduced by any remuneration that the Executive
may earn from employment with another employer or otherwise following his
Qualifying Termination.
Section 5.4. Interest. If the Company fails to make, or
cause to be made, any payment provided for herein within 30 days of the date on
which the payment is due, the Company shall make such payment together with
interest thereon. The interest shall accrue and be compounded monthly. The
interest rate shall be equal to 120 percent of the prime rate as reported by
The Wall Street Journal for the first business
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day of each month, effective for the ensuing month. The interest rate shall be
adjusted at the beginning of each month.
Section 5.5. Authority. The execution of this Agreement
has been authorized by the Board of Directors of the Company and by the Board
of Directors of GTE.
ARTICLE VI
GENERAL PROVISIONS
Section 6.1. Term of Agreement. This Agreement shall
become effective on the date hereof and shall continue in effect until the
earliest of (a) July 1, 1999, if no Change in Control has occurred before that
date; (b) the termination of the Executive's employment with the Company for
any reason prior to a Change in Control; (c) the Company's termination of the
Executive's employment for Cause, or the Executive's resignation for other than
Good Reason, following a Change in Control and the Company's and the
Executive's fulfillment of all of their obligations hereunder; and (d) the
expiration following a Change in Control of two years and six months and the
fulfillment by the Company and the Executive of all of their obligations
hereunder. Notwithstanding the foregoing, commencing on July 1, 1999, and on
July 1 of each year thereafter, the expiration date prescribed by clause (a) of
the preceding sentence shall automatically be extended for an additional year
unless, not later than December 31 of the
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immediately preceding year, one of the parties hereto shall have given notice
to the other party hereto that it (or he) does not wish to extend the term of
this Agreement. Furthermore, nothing in this Article VI shall cause this
Agreement to terminate before both the Company and the Executive have fulfilled
all of their obligations hereunder.
Section 6.2. Governing Law. Except as otherwise expressly
provided herein, this Agreement and the rights and obligations hereunder shall
be construed and enforced in accordance with the laws of the State of New York.
Section 6.3. Successors to the Company. This Agreement
shall inure to the benefit of and shall be binding upon and enforceable by the
Company and any successor thereto, including, without limitation, any
corporation or corporations acquiring directly or indirectly all or
substantially all of the business or assets of the Company, whether by merger,
consolidation, sale or otherwise, but shall not otherwise be assignable by the
Company. Without limitation of the foregoing sentence, the Company shall
require any successor (whether direct or indirect, by merger, consolidation,
sale or otherwise) to all or substantially all of the business or assets of the
Company, by agreement in form satisfactory to the Executive, expressly,
absolutely and unconditionally to assume and to agree to perform this Agreement
in the same manner and to the same extent as the Company would have been
required to
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perform it if no such succession had taken place. As used in this Agreement,
"Company" shall mean the Company as heretofore defined and any successor to all
or substantially all of its business or assets that executes and delivers the
agreement provided for in this Section 6.3 or that becomes bound by this
Agreement either pursuant to this Agreement or by operation of law. As used in
this Agreement, "GTE" shall mean GTE as heretofore defined and any successor to
all or substantially all of its business or assets.
Section 6.4. Noncorporate Entities. If any provision of
this Agreement refers to the board of directors of an entity that has no board
of directors, the reference to board of directors shall be deemed to refer to
the body, committee, or person that has duties and responsibilities with
respect to the entity that most closely approximate those of a board of
directors of a corporation.
Section 6.5. Successor to the Executive. This Agreement
shall inure to the benefit of and shall be binding upon and enforceable by the
Executive and his personal and legal representatives, executors,
administrators, heirs, distributees, legatees and, subject to Section 6.6
hereof, his designees ("Successors"). If the Executive should die while
amounts are or may be payable to him under this Agreement, references hereunder
to the "Executive" shall, where appropriate, be deemed to refer to his
Successors; provided,
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that nothing in this Section 6.5 shall supersede the terms of any plan or
arrangement (other than this Agreement) that is affected by this Agreement.
Section 6.6. Nonalienability. No right of or amount
payable to the Executive under this Agreement shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, hypothecation,
encumbrance, charge, execution, attachment, levy or similar process or to
setoff against any obligations or to assignment by operation of law. Any
attempt, voluntary or involuntary, to effect any action specified in the
immediately preceding sentence shall be void. However, this Section 6.6 shall
not prohibit the Executive from designating one or more persons, on a form
satisfactory to the Company, to receive amounts payable to him under this
Agreement in the event that he should die before receiving them.
Section 6.7. Notices. All notices provided for in this
Agreement shall be in writing. Notices to the Company shall be deemed given
when personally delivered or sent by certified or registered mail or overnight
delivery service to GTE Service Corporation, Xxx Xxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Attention: Corporate Secretary. Notices to the Executive
shall be deemed given when personally delivered or sent by certified or
registered mail or overnight delivery service to the last address for the
Executive shown on the
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records of the Company. Either the Company or the Executive may, by notice to
the other, designate an address other than the foregoing for the receipt of
subsequent notices.
Section 6.8. Amendment. No amendment to this Agreement
shall be effective unless in writing and signed by both the Company and the
Executive.
Section 6.9. Waivers. No waiver of any provision of this
Agreement shall be valid unless approved in writing by the party giving such
waiver. No waiver of a breach under any provision of this Agreement shall be
deemed to be a waiver of such provision or any other provision of this
Agreement or any subsequent breach. No failure on the part of either the
Company or the Executive to exercise, and no delay in exercising, any right or
remedy conferred by law or this Agreement shall operate as a waiver of such
right or remedy, and no exercise or waiver, in whole or in part, of any right
or remedy conferred by law or herein shall operate as a waiver of any other
right or remedy.
Section 6.10. Severability. If any provision of this
Agreement shall be held unlawful or otherwise invalid or unenforceable in whole
or in part, such unlawfulness, invalidity or unenforceability shall not affect
any other provision of this Agreement or part thereof, each of which shall
remain in full force and effect. If the making of any payment or the provision
of any other benefit required under
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this Agreement shall be held unlawful or otherwise invalid or unenforceable,
such unlawfulness, invalidity or unenforceability shall not prevent any other
payment or benefit from being made or provided under this Agreement, and if the
making of any payment in full or the provision of any other benefit required
under this Agreement in full would be unlawful or otherwise invalid or
unenforceable, then such unlawfulness, invalidity or unenforceability shall not
prevent such payment or benefit from being made or provided in part, to the
extent that it would not be unlawful, invalid or unenforceable, and the maximum
payment or benefit that would not be unlawful, invalid or unenforceable shall
be made or provided under this Agreement.
Section 6.11. Agents. The Company may make arrangements to
cause any agent or other party, including an affiliate of the Company, to make
any payment or to provide any benefit that the Company is required to make or
to provide hereunder; provided, that no such arrangement shall relieve or
discharge the Company of its obligations hereunder except to the extent that
such payments or benefits are actually made or provided.
Section 6.12. Definitions. All upper case terms used
herein shall have the meaning set forth in this Agreement.
Section 6.13. Captions. The captions to the respective
articles and sections of this Agreement are intended
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for convenience of reference only and have no substantive significance.
Section 6.14. Counterparts. This Agreement may be executed
in any number of counterparts, each of which shall be deemed to be an original
but all of which together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
GTE SERVICE CORPORATION
By: /s/ J. Xxxxxxx XxxXxxxxx
------------------------
J. Xxxxxxx XxxXxxxxx
Senior VP-Human Resources
and Administration
By: /s/ Xxxxxxxx Xxxxx
------------------------
Xxxxxxxx Xxxxx
VP and Associate General
Counsel-Finance & Corporate
Secretary
By: /s/ Xxxxxxx X. Xxxxx
----------------------------
XXXXXXX X. XXXXX
