Agreement
---------
AGREEMENT, dated as of September 1, 1994, between NYNEX Corporation, a
Delaware corporation (the "Company"); and Xxxx X. Xxxxxx, an individual residing
at 0 Xxxx 00xx Xxxxxx, Xxx Xxxx, XX 00000 (the "Executive").
In consideration of the mutual agreements and covenants contained
herein, the Company and the Executive hereby agree as follows:
1. Executive Duties. The Company hereby employs the Executive, and the
----------------
Executive hereby agrees to serve the Company, in the capacity of
Executive Vice President and Chief Financial Officer. The Executive
will devote his entire business time and best efforts during the Term
of Employment (as hereinafter defined) to the performance of his
duties, as now or hereafter assigned to him by the Vice Chairman
Finance and Business Development, the Chairman and Chief Executive
Officer, or the Board of Directors of the Company. If Executive
terminates employment during the Term of Employment because of a
material change in duties, reporting relationship whereby the Executive
reports to someone below the Vice Chairman level, or working
conditions, payments pursuant to paragraph 3 hereof shall be governed
by subparagraph 3(g)(v) hereof.
2. Term of Employment. The term of employment (the "Term of
------------------
Employment"), except as otherwise specified herein, shall commence on
September 1, 1994 and shall end on August 31, 1997.
3. Compensation. Except as hereinafter provided, the Company shall
------------
pay to the Executive, and the Executive shall accept from the Company,
for the services and duties to be rendered and performed by the
Executive during the Term of Employment:
(a) Base Compensation.
-----------------
(i) For the period September 1, 1994 to December 31,
1994, base compensation at the annual rate of
$400,000 (subject to applicable withholding and other
taxes), payable in equal monthly installments on or
before the first day of the month following each of
the months during such period.
(ii) For the period January 1, 1995 to August 31,
1997, this annual base rate, $400,000, shall be
increased by the same percentage increase and at the
same time as the Senior Managers' Compensation
Structure for members of the Senior Management
Compensation Group is increased during the Term of
Employment.
(b) Short Term Incentive Plan. During the Term of
-------------------------
Employment, the Executive shall participate in the
Company's Senior Management Short Term Incentive Plan
(the "STIP"). The maximum award earned by the
Executive shall be $600,000 per year prorated in
accordance with the terms of the STIP. For the period
September 1, 1994 to December 31, 1994, the Standard
Award for the Executive will be $l00,000, payable in
accordance with the terms of the STIP.
-2-
(c) Long Term Incentive Plan. During the Term of Employment,
------------------------
the Executive shall participate in the NYNEX Senior
Management Long Term Incentive Plan (the "LTIP") to the same
extent awards are made to members of the Senior Management
Compensation Group. The Company will award the Executive
$128,000 for the 1994-1997 Performance Period pursuant to
the LTIP.
(d) Stock Options. During the Term of Employment, the Executive
-------------
will be eligible to participate in all NYNEX stock option
plans to the same extent as members of the Senior Management
Compensation Group; provided, however, that subject to the
approval of the Committee on Benefits of the Board of
Directors of the Company (the "Committee"), should the
Executive be terminated without cause, the provisions of
clause (x) of subparagraph 3(g)(v) hereof will apply to
options granted to the Executive. Subject to the approval
of the Committee, the Company will grant the Executive
options for 56,000 shares as of the date the Executive
commences employment, pursuant to the NYNEX 1990 Stock
Option Plan.
(e) Other Benefits. In addition to the compensation and
--------------
STIP, LTIP and Stock Option Plan grants and awards provided to
the Executive pursuant to this Paragraph 3, the Company shall
provide the following benefits to the Executive during
the Term of Employment:
(i) The Executive, to the extent eligible, shall
participate in the current and future employee benefit plans
and programs sponsored by NYNEX, including but not limited
to the NYNEX Mid-Career Hire Program, the NYNEX Mid-Career
Pension Plan, and any medical, dental, and life insurance
plans and programs;
(ii) The Company will provide the Executive with split
dollar life insurance having an initial death benefit of
$2,000,000, and estimated cash values in accordance with the
illustration provided to the Executive by the Company,
pursuant to and in accordance with the terms and conditions
of the NYNEX Supplemental Life Insurance Plan;
(iii) The Executive shall be entitled to all perquisites
and benefits available members of the Senior Management
Compensation Group; and
(iv) If the Company Board of Directors does not approve the
defined contribution pension plan currently under
consideration, at termination of employment for any reason,
the Executive shall have a choice of (i) a cash payment or
annuity payments equal to what would have been provided by
-3-
the defined contribution pension plan to the extent
Executive would have been eligible under the conditions of
his termination or (ii) benefits payable under existing
pension plans to the extent eligible.
(f) Sign-on Bonus. Subject to the approval of the Committee,
-------------
as soon as practical after commencement of employment, the
Company will grant to the Executive $600,000 worth of shares
of restricted stock under, and in accordance with, the terms
of the NYNEX 1987 Restricted Stock Award Plan, subject to
the restrictions that if the Executive is still employed on
the following dates, the restrictions shall lapse as
follows:
August 31, 1995 one-third of the shares;
August 31, 1996 one-third of the shares;
August 31, 1997 one-third of the shares.
(g) Termination of Payments. Payments under this subparagraph 3
-----------------------
shall terminate as follows:
(i) If the Executive voluntarily terminates his employment
with the Company at any time during the Term of Employment,
except for any reason set out in paragraph 1 of this
Agreement, (w) the Company shall make no further payments to
the Executive pursuant to subparagraph 3(a) hereof for any
period of time subsequent to the date of such termination;
(x) grants and awards previously made to the Executive
pursuant to the STIP, LTIP and the Stock Option Plan shall
be governed by the terms of those plans; (y) all benefits
provided pursuant to subparagraph 3(e) hereof shall cease as
of the date of such termination, except as may be provided
in the plans or programs or as required by law; and (z)
rights to all restricted stock for which the restrictions
have not lapsed pursuant to subparagraph (f) hereof shall be
forfeited.
(ii) If the Executive dies at any time during the Term of
Employment, (w) the Company shall make no payments under
paragraph 3(a) of this Agreement to the Executive or his
executors, administrators, assigns, beneficiaries or estate
for any periods of time subsequent to the date of the
Executive's death; (x) grants and awards previously made to
the Executive pursuant to the STIP, LTIP and the Stock
Option Plan shall be governed by the terms of those plans;
(y) the continuation, expiration and termination of the
benefits provided pursuant to subparagraph 3(e) hereof shall
be governed by the terms of the employee benefit plans and
programs applicable in the event of the death of an employee
as in effect on the date of death; and (z) rights to all
restricted stock for which the restrictions have not lapsed
-4-
pursuant to subparagraph (f) hereof shall immediately vest
and all restrictions shall lapse.
(iii) If the Executive's employment is terminated for cause
as defined in Paragraph 4 hereof, (w) the Company shall be
released and discharged of and from all obligations to make
payments pursuant to 3(a) for periods of time subsequent to
the date of such termination; (x) grants and awards
previously made to the Executive pursuant to the STIP, LTIP
and the Stock Option Plan shall be governed by the terms of
those plans; (y) all benefits provided pursuant to
subparagraph 3(e) hereof shall cease as of the date of such
termination, unless otherwise provided by the terms of the
benefit plans and programs in effect at the date of such
termination; and (z) rights to all restricted stock for
which the restrictions have not lapsed pursuant to
subparagraph (f) hereof shall be forfeited.
(iv) If the Executive becomes and remains totally disabled
during the Term of Employment, (w) the Company shall
continue to pay the monthly payments specified in
subparagraph 3(a) hereof to the Executive, in accordance
with the terms of the NYNEX Sickness and Accident Disability
Plan and the NYNEX Senior Management Long Term Disability
and Survivor Protection Plan; (x) grants and awards
previously made to the Executive pursuant to the STIP, LTIP
and the Stock Option Plan shall be governed by the terms of
those plans; (y) all benefits provided pursuant to
subparagraph 3(e) hereof shall continue to be provided
pursuant to the terms of the benefit plans and programs as
in effect at the time; and (z) restricted stock for which
the restrictions have not lapsed pursuant to subparagraph
(f) hereof shall continue to vest.
(v) If the Executive's employment is terminated by the
Company without cause, (v) the Company shall continue to pay
the monthly payments specified in subparagraph 3(a) hereof
to the Executive to the end of the Term of Employment; (w)
grants and awards previously made to the Executive pursuant
to the STIP and LTIP shall be governed by the terms of those
plans; provided, however, Executive shall be paid $300,000
per year for the remainder of the Term of Employment,
prorated in accordance with the terms of the STIP, as if the
payments were made pursuant to the STIP; (x) stock options
that have not become exercisable pursuant to the terms of
the Stock Option Plan shall immediately vest and become
exercisable as of the date the Executive is notified of the
termination; provided, however, the Executive shall be given
sixty (60) days prior notice so that he will have sixty (60)
days to exercise the vested options and no option or part
thereof shall be exercisable prior to the first anniversary
-5-
of the date the option is granted; (y) the continuation,
expiration and termination of all other benefits provided
pursuant to subparagraph 3(e) hereof shall be governed by
the terms of the employee benefit plans and programs as in
effect on the date of such termination; and (z) restricted
stock for which the restrictions have not lapsed pursuant to
subparagraph (f) hereof shall immediately vest and all
restrictions shall lapse.
4. Termination of Employment.
-------------------------
(a) The Executive may voluntarily terminate his employment with
the Company at any time during the Term of Employment by
giving thirty (30) days written notice to the Company.
(b) The Executive's employment may be terminated by the Company
during the Term of Employment with or without cause at the
sole discretion of the Company. The term "cause" shall mean
grossly incompetent performance or substantial or continuing
inattention to or neglect of the duties and responsibilities
assigned to the Executive, in the sole discretion and
judgment of the Board of Directors of the Company, including
but not limited to fraud, misappropriation, embezzlement, or
the like, involving the Company or any of its subsidiaries
or affiliates; or commission of any felony of which the
Executive is finally adjudged guilty in a court of competent
jurisdiction; or a willful breach of Paragraphs 8, 9, 10, or
11 of this Agreement. In the event that the Company
terminates the employment of the Executive for cause, it
will state in writing the grounds for such termination and
provide this statement to the Executive within 10 business
days after the date of termination. In the event that the
reason for termination for cause was grossly incompetent
performance or substantial or continuing inattention to or
neglect of the duties and responsibilities assigned to the
Executive, then the Company will give the Executive 60
calendar days prior written notice and an opportunity to
cure his performance within these 60 calendar days. In the
event that the Executive challenges a for cause
determination and a court of law determines that the
termination was not for cause as defined in this Agreement,
the Company will pay the Executive's court costs and
reasonable attorney fees.
5. Expenses. In accordance with the Company's usual practices and
--------
procedures, the Company agrees to reimburse the Executive for his
reasonable travel expenses (other than normal commutation expenses) and
other reasonable out-of-pocket expenses directly related to his work
for the Company.
-6-
6. Holidays and Vacation. The Executive shall have the 11 holidays per
---------------------
calendar year recognized by the Company for its management employees.
During 1994 the Executive shall be entitled to 2 management personal
days and 15 vacation days. During each subsequent calendar year during
the Term of Employment, the Executive shall have an aggregate of 4
management personal days and 25 vacation days. Notwithstanding the
foregoing, such management personal days and vacation days shall be
scheduled at such times and in such number with due regard to the needs
of the business.
7. Capacity.
--------
(a) The Executive hereby warrants and represents that he
is legally capable and now physically capable of
performing the duties contemplated in this Agreement
and that such performance will not violate any
agreements he has with, or breach any duties he owes
to, any other employer or organization.
(b) The Executive hereby warrants and represents that he has not,
and covenants and agrees that he will not, disclose or
appropriate to his own use or to the use of the Company
or its subsidiaries or affiliates any secret or confidential
information pertaining to the business of GAF/ISP Corporation
or Xerox Corporation, or its clients or
prospective clients obtained by the Executive while he was
employed by GAF/ISP Corporation or Xerox Corporation, where
such disclosure or appropriation would violate any
agreements he has with, or would breach any duties he owes
to GAF/ISP Corporation or Xerox Corporation, or its clients
or prospective clients.
(c) The Company hereby warrants and represents that this
Agreement has been duly and validly authorized,
executed and delivered.
8. Non-Competition and Non-Solicitation.
------------------------------------
(a) Without the prior written consent of the Company, the
Executive shall not, during the Term of Employment and for
a period of two years from the date of voluntary termination
of employment, or for a period of six months from the date
of termination of employment for any other reason including
voluntary termination under paragraph 1 of this Agreement,
with the Company, or any of its subsidiaries or affiliates,
either for himself or as an agent, partner, joint venturer
or employee of any Person, other than the Company, or any of
its subsidiaries or affiliates, or in any other capacity,
directly or indirectly:
-7-
(i) engage in Competitive Services for (x) any Client or
(y) any Prospective Client; or
(ii) contact, solicit or attempt to solicit, whether
for his own account or for the account of any Person
other than the Company, or any of its subsidiaries or
affiliates, (x) any Client or (y) any Prospective
Client; or
(iii) induce away from the Company, or any of its
subsidiaries or affiliates, or facilitate the
inducement away from the Company, or any of its
subsidiaries or affiliates, any personnel of the
Company, or any of its subsidiaries or affiliates, or
interfere with the faithful discharge by such
personnel of their contractual and fiduciary
obligations to serve the interests of the Company, or
any of its subsidiaries or affiliates and their
Clients; or (iv) invest in or otherwise be connected
with, in any manner, any Person that provides or
intends to provide products or services of the type
provided by the Company, or any of its subsidiaries
or affiliates for (x) any Client or (y) any
Prospective Client.
(b) For purposes of this Paragraph 8, the following terms shall
have the following definitions:
(i) "Affiliate" of a Person means any Person directly or
indirectly controlling, controlled by, or under
common control with, such other Person.
(ii) "Client" means any Person for whom the Company
performed Competitive Services within the 18 months
immediately preceding the Executive's termination of
employment.
(iii)"Competitive Services" means any business
activity which was being conducted by the Company, or
any of its subsidiaries or affiliates, at the time of
the Executive's termination of employment and in
which business activity the Executive participated
during his employment with the Company, or any of its
subsidiaries or affiliates.
(iv) "Person" means an individual, a corporation, a
partnership, an association, a trust or any other
entity, including a government or political
subdivision or an agency or instrumentality thereof.
-8-
(v) "Prospective Client" means any Person to whom the
Company submitted, or assisted in the submission of,
a proposal for Competitive Services during the 18
months immediately preceding the Executive's
termination of employment.
(c) Ownership of less than 5% of the securities in a
publicly traded corporation shall not constitute a
violation of this Agreement.
9. Intellectual Property and Proprietary Information.
-------------------------------------------------
The Executive has executed the NYNEX Employee Agreement Regarding
Intellectual Property and Proprietary Information which is attached
hereto as Appendix A and made a part of this Agreement.
10. Company Rules; Code of Business Conduct. The Executive agrees to
---------------------------------------
abide by all of the rules applicable to Company employees as such rules
are made known to him from time to time. The Executive has received and
read the publication entitled the NYNEX Code of Business Conduct.
11. Modification of Final Judgment. The Executive has received and read
------------------------------
the publication entitled NYNEX Policy for Compliance with the
Modification of Final Judgment (August 1988) and has executed the
Acknowledgment attached thereto. Such Acknowledgment is attached hereto
as Appendix B and made a part of this Agreement.
12. Additional Remedies. In addition to any other rights or remedies,
-------------------
whether legal, equitable or otherwise, which each of the parties may
have:
(a) The Executive acknowledges that Paragraphs 8, 9, 10 and 11
of this Agreement are essential to the continued good will
and profitability of the Company and its subsidiaries and
affiliates and further acknowledges that the application and
operation thereof shall not involve a substantial hardship
upon his future livelihood. Should any court determine that
any or all of such paragraphs of this Agreement are
unenforceable in respect of scope, duration or geographic
area, such court shall substitute, to the extent
enforceable, provisions similar thereto or other provisions,
so as to provide to the Company and its subsidiaries and
affiliates, to the fullest extent permitted by applicable
law, the benefits intended by this Agreement.
(b) The parties hereto further recognize that irreparable
damage to the Company and its subsidiaries and
affiliates will result in the event that Paragraphs
8, 9, 10 and 11 of this Agreement are not
specifically enforced and that monetary damages will
not adequately protect the Company and its
subsidiaries and affiliates from a breach of this
Agreement. If any dispute
-9-
13. Waiver. Failure to insist upon strict compliance with any of the
------
terms, covenants or conditions hereof shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or
relinquishment of any right or power hereunder at any one or more times
be deemed a waiver or relinquishment of such right or power at any
other time or times.
14. Reformation and Severability. The Executive and the Company agree
----------------------------
that the agreements contained herein shall each constitute a separate
agreement independently supported by good and adequate consideration,
shall each be severable from the other provisions of the Agreement,
and shall survive the Agreement. If a court of competent jurisdiction
determines that any term, provision or portion of this Agreement is
void, illegal or unenforceable, the other terms, provisions and
portions of this Agreement shall remain in full force and effect and
the terms, provisions and portions that are determined to be void,
illegal or unenforceable shall be limited so that they shall remain in
effect to the extent permissible by law.
15. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if delivered by
hand or messenger, transmitted by fax, telex or telegram or mailed by
registered or certified mail, return receipt requested and postage
prepaid, as follows:
(a) If to the Company, to:
NYNEX Corporation
0000 Xxxxxxxxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Attention: Executive Vice President and General Counsel
(b) If to the Executive, to:
0 Xxxx 00xx Xxxxxx
Xxxxxxxxx 00X
Xxx Xxxx, XX 00000
or to such other person or address as either of the parties shall
hereafter designate to the other from time to time by similar notice.
16. Assignability. This Agreement is personal in nature. The Executive
-------------
shall have no right to assign or transfer this Agreement. In the event
of any attempted assignment or transfer by the Executive of his duties
and obligations contrary to this paragraph, all the Executive's rights
under this Agreement shall be forfeited, and the Company shall have no
further liability under this Agreement. The Company may assign or
transfer its rights under this Agreement only to a subsidiary or
affiliate of the Company so long as such assignment shall not
substantially change the current status of this Agreement or its place
of performance. No assignment by the Company shall relieve the Company
of the liabilities and responsibilities created by this Agreement.
-10-
17. Entire Understanding. This Agreement constitutes the entire
--------------------
understanding between the Company and the Executive with respect to the
subject matter hereof, superseding any and all prior written or oral
understandings which may have existed.
18. Amendment. This Agreement may be amended or modified, in whole or
---------
in part, only by an agreement in writing signed by the Company and the
Executive.
19. Headings. The headings in this Agreement are inserted for
--------
convenience of reference only and are not to be considered
in the construction of the provisions herein.
20. Governing Law. This Agreement shall be governed by, and construed
-------------
in accordance with, the laws of the State of New York without regard
to the principles of conflicts of laws of that State.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year first above written.
EXECUTIVE NYNEX CORPORATION
By
--------------------- ---------------------
Xxxx X. Xxxxxx X. X. Xxxxxxx
Vice Chairman Finance and
Business Development