EXHIBIT 10pp
FORM OF
MERGER AGREEMENT
(Xxxxxxxxx X. Xxxxx, Xxxxxxx X. Xxxxxx)
THIS MERGER AGREEMENT (the "Agreement) is made as of the 29th day of
January, 1999, by and between Xxxx Atlantic Corporation, its successors and
assigns ("Xxxx Atlantic"), and ________________________, an employee of a Xxxx
Atlantic Company (the "Key Employee"). In this Agreement, "Xxxx Atlantic
Company" means any or all of the following: Xxxx Atlantic, a corporate
subsidiary or other company affiliated with Xxxx Atlantic, a company in which
Xxxx Atlantic owns directly or indirectly an equity interest of at least ten
percent, and the successors and assigns of any such company.
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger, dated as
of July 27, 1998, among Xxxx Atlantic, GTE Corporation ("GTE") and Beta Gamma
Corporation (the "Definitive Agreement"), Xxxx Atlantic contemplates a merger of
the Xxxx Atlantic and GTE businesses (the "Merger") on a date which is yet to be
decided (the "Closing Date");
WHEREAS, the period from the date of this Agreement to at least the second
anniversary of the Closing Date is likely to be a period of difficult
transition, with heightened concern about job security due to possible
reductions in force in connection with the Merger;
WHEREAS, Xxxx Atlantic wishes to provide additional financial security to
the Key Employee in the form of eligibility for post-separation payments, which
the Key Employee would be eligible to receive in case of a termination of
employment without cause during such period; and
WHEREAS, Xxxx Atlantic and the Key Employee wish to set forth the terms and
conditions applicable to such post-separation payments.
NOW, THEREFORE, for good and valuable consideration, the Key Employee and
Xxxx Atlantic hereby agree as follows:
1. Period of Agreement. The Period of this Agreement shall be the
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period beginning on the date of this Agreement and ending on the second
anniversary of the Closing Date; provided, however, that, in the event that the
Definitive Agreement is terminated without the Merger occurring, the Period of
this Agreement shall end on the date on which the Definitive Agreement is
terminated.
2. Post-Separation Payments.
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(a) Pay. If, during the Period of this Agreement, a Xxxx Atlantic
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Company discharges the Key Employee without "Cause" (as defined in Section 2(d)
of this Agreement), or the Key Employee is "Constructively Discharged" (as
defined in Section 2(e) of this Agreement), Xxxx Atlantic shall cause the Xxxx
Atlantic Company which then employs the Key Employee to pay to the Key Employee,
in cash, an aggregate amount equal (before withholding of taxes) to "Pay" (as
defined in Section 2(b) of this Agreement).
(b) Pay. For purposes of this Agreement, "Pay" means an amount
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equal (before withholding of taxes) to the greater of (i) the sum of the Key
Employee's annual rate of base salary and 50% of the Key Employee's maximum
short term incentive under the Xxxx Atlantic Senior Management Short Term
Incentive Plan (or other applicable short-term incentive plan), both as of the
date of this Agreement, or (ii) the sum of such items, both as of the date the
Key Employee's employment is terminated.
(c) Payment of Installments. The payment described in this Section
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shall be payable in cash, less applicable withholding taxes, in a series of 12
approximately equal monthly installments, with the first installment commencing
within 30 days of the eighth day following delivery of the legal release
provided for in Section 2(g) of this Agreement. If the Key Employee dies after
termination of employment, all unpaid installments will be paid in a lump sum to
the Key Employee's estate.
(d) Cause. For purposes of this Agreement, the term "Cause" shall
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mean grossly incompetent performance or substantial or continuing inattention to
or neglect of the duties and responsibilities assigned to the Key Employee as
determined by the Key Executive's current supervisor, with the concurrence of
the Executive Vice President - Human Resources of Xxxx Atlantic; fraud,
misappropriation or embezzlement involving any Xxxx Atlantic Company; a material
breach of the Employee Code of Business Conduct or this Agreement; or commission
of any felony of which the Key Employee is finally adjudged guilty in a court of
competent jurisdiction.
(e) Constructive Discharge. The Key Employee shall be deemed to
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have been "Constructively Discharged" for purposes of this Agreement if the Key
Employee is an "Employee in Good Standing" (as defined in Section 2(f) of this
Agreement) and terminates his or her employment for either of the following
reasons: (i) the Key Employee has refused to relocate to a new principal place
of work which would require a commute of more than 35 miles greater than the Key
Employee's existing commute; or (ii) the Key Employee is assigned to a position
where the sum of the annual rate of base salary plus the maximum amount of
annual short term incentive the Key Employee would be eligible to receive per
year is less than 90% of the sum of the corresponding items of salary and short
term incentive for the Key Employee's existing position.
(f) Employee in Good Standing. For purposes of this Agreement, the
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Key Employee will be considered to be an "Employee in Good Standing" on a given
date if, on that date, the Key Employee is employed by a Xxxx Atlantic Company,
has not tendered oral or written notice of intent to resign or retire effective
as of a date on or before the given date (other than pursuant to a Constructive
Discharge), and has not behaved in a manner that would be grounds for discharge
with Cause.
(g) Legal Release. Notwithstanding any provision of this Agreement
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to the contrary, no post-separation payments shall be payable under the terms of
this Agreement unless the Key Employee executes a legal release in a form
contained in Exhibit A.
3. Prohibition Against Recruiting, Hiring or Solicitation.
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Commencing on the effective date of this Agreement and at all times thereafter
through the second anniversary of the Key Employee's termination of employment
for reasons which entitle the Key Employee to
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receive separation payments under Section 2 of this Agreement, the Key Employee
shall not, without the consent of the Executive Vice President - Human Resources
of Xxxx Atlantic:
(i) recruit or solicit any active employee of any Xxxx Atlantic
Company for employment or for retention as a consultant or
service provider;
(ii) hire, or participate (with another company or third party) in
the process of hiring (other than for a Xxxx Atlantic Company)
any person who is then an active employee of any Xxxx Atlantic
Company, or provide names or other information about Xxxx
Atlantic employees to any person or business (other than a
Xxxx Atlantic Company) under circumstances which the Key
Employee knows or should know could lead to the use of that
information for purposes of recruiting or hiring;
(iii) approach any customer of any Xxxx Atlantic Company in an
effort to persuade such customer to purchase, from a competing
company, products or services of the same or similar type as
the products or services which are sold (or, pursuant to an
existing business plan, will be sold) to paying customers of
one or more Xxxx Atlantic Companies; or
(iv) interfere with the relationship of any Xxxx Atlantic Company
with any of its customers, employees, agents, or
representatives.
4. Competition.
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(a) Prohibited Conduct. During the period of the Key Employee's
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employment with any Xxxx Atlantic Company through the first anniversary of the
Key Employee's termination of employment for reasons which entitle the Key
Employee to receive separation payments under Section 2 of this Agreement, the
Key Employee, without the prior written consent of the Executive Vice President
- Human Resources of Xxxx Atlantic, shall not:
(i) personally engage in "Competitive Activities" (as defined in
Section 4(b) of this Agreement; or
(ii) work for, own, manage, operate, control or participate in the
ownership, management, operation or control of, or provide
consulting or advisory services to, any individual,
partnership, firm, corporation or institution engaged in
Competitive Activities; provided, however, that the Key
Employee's purchase or holding, for investment purposes, of
securities of a publicly-traded company shall not constitute
"ownership" or "participation in ownership" for purposes of
this paragraph so long as the Key Employee's equity interest
in any such company is less than a controlling interest.
(b) Competitive Activities. For purposes of this Agreement,
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"Competitive Activities" means business activities relating to products or
services of the same or similar type as the products or services which (i) are
sold (or, pursuant to an existing business plan, will be sold) to paying
customers of one or more Xxxx Atlantic Companies, and (ii) for which the Key
Employee had responsibility to plan, develop, manage, market or oversee, within
the prior 24 months or, if the Key Employee's employment has been terminated,
within the 24 months preceding termination of employment. Notwithstanding the
previous sentence, a business activity will not be treated as a
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Competitive Activity if the geographic marketing area of the relevant products
or services does not overlap with the Xxxx Atlantic territory (as such territory
exists at the time the Key Employee's employment is terminated).
(c) Notice. Xxxx Atlantic shall send the Key Employee written
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notice in the event that Xxxx Atlantic believes that the Key Employee has
violated any of the prohibitions of this Section, provided, however, that any
failure by Xxxx Atlantic to give notice under this provision or to enforce its
rights under this Agreement in any one or more instances shall not be a bar to
Xxxx Atlantic giving notice and taking action to enforce its rights under this
Agreement at any later time.
(d) Waiver. Nothing in this Agreement shall bar the Key Employee
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from requesting that the Executive Vice President - Human Resources of Xxxx
Atlantic, in that officer's sole discretion, waive in writing Xxxx Atlantic's
rights to enforce the competition covenant of this Section with respect to an
opportunity or activity contemplated by the Key Employee and which the Key
Employee describes in writing to said officer.
5. Confidentiality. The Key Employee agrees not to disclose or
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discuss, other than with the Key Employee's legal counsel, financial or tax
adviser, and spouse (if any) either the existence of or any details of this
Agreement. The Key Employee will make a good faith effort to ensure that any
such legal counsel, financial or tax adviser, or spouse will not disclose or
discuss the existence or any details of this Agreement with any other person.
6. Proprietary Information. The Key Employee shall at all times
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preserve the confidentiality of all proprietary information and trade secrets of
any and all Xxxx Atlantic Companies. "Proprietary information" means information
obtained or developed by the Key Employee during the Key Employee's employment
with any Xxxx Atlantic Company that has not been fully disclosed in a writing
generally circulated to the public at large, and which is treated as
confidential within the business of any Xxxx Atlantic Company.
7. Assignment by Xxxx Atlantic. Xxxx Atlantic may assign this
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Agreement without the Key Employee's consent to any company that acquires all or
substantially all of the stock or assets of Xxxx Atlantic, or into which or with
which Xxxx Atlantic is merged or consolidated. This Agreement may not be
assigned by the Key Employee, and no person other than the Key Employee (or the
Key Employee's estate) may assert the rights of the Key Employee under this
Agreement.
8. Non-Benefit Bearing Payments. The amounts to be paid under
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Section 2 of this Agreement shall not be treated as compensation for purposes of
computing or determining any additional benefit payable under any savings plan,
insurance plan, pension plan, or other employee benefit plan maintained by any
Xxxx Atlantic Company.
9. Certain Limitations Upon Payments.
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(a) Tax Code Limitations. Anything in this Agreement to the
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contrary notwithstanding, in the event that it shall be determined that any
payment or distribution by Xxxx Atlantic to or for the benefit of the Key
Employee, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise (a "Payment"), would constitute an
"excess parachute payment" within the meaning of Section 280G of the Internal
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Revenue Code of 1986, as amended (the "Code"), the aggregate present value of
amounts payable or distributable to or for the benefit of the Key Employee
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value of
Agreement Payments without causing any Payment to be subject to taxation under
Section 4999 of the Code. For purposes of this Section, present value shall be
determined in accordance with Section 280G(d)(4) of the Code.
(b) Determinations by Outside Counsel. All determinations to be
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made under this Section of the Agreement shall be made by Xxxx Atlantic's
outside counsel ("Outside Counsel"). Outside Counsel shall provide its
determinations and any supporting calculations both to Xxxx Atlantic and the Key
Employee within 10 days of the effective date of termination of employment. Any
such determination by Outside Counsel shall be binding upon Xxxx Atlantic and
the Key Employee. Within five days after this determination, Xxxx Atlantic or
the appropriate Xxxx Atlantic Company shall commence to pay to or for the
benefit of the Key Employee such amounts (if any) as are then due to the Key
Employee under this Agreement.
(c) Overpayments and Underpayments. As a result of uncertainty in
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the application of Section 280G of the Code at the time of the initial
determination by Outside Counsel hereunder, it is possible that Agreement
Payments will either have been made by Xxxx Atlantic which should not have been
made ("Overpayment"), or that additional Agreement Payments which have not been
made by Xxxx Atlantic could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. Within two years
after the effective date of termination of employment, Outside Counsel shall
review any determination made by it pursuant to Section 9(b) of this Agreement.
In the event that Outside Counsel determines that an Overpayment has been made,
any such Overpayment shall be treated for all purposes as a loan to the Key
Employee which the Key Employee shall repay to Xxxx Atlantic together with
interest at the applicable Federal rate provided for in Section 7872(f)(2) of
the Code (the "Federal Rate"); provided, however, that no amount shall be
payable by the Key Employee to Xxxx Atlantic if and to the extent such payment
would not reduce the amount which is subject to taxation under Section 4999 of
the Code. In the event that Outside Counsel determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the appropriate Xxxx
Atlantic Company to or for the benefit of the Key Employee together with
interest at the Federal Rate.
(d) Outside Counsel Fees. All of the fees and expenses of Outside
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Counsel in performing the determinations referred to in Sections 9(b) and (c) of
this Agreement shall be borne solely by Xxxx Atlantic.
10. Remedies. The Key Employee acknowledges that irreparable
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injury will result to Xxxx Atlantic and other Xxxx Atlantic Companies, and to
their business, in the event of any breach by the Key Employee of any of the Key
Employee's covenants and commitments under this Agreement. In the event of a
breach of any of the Key Employee's covenants and commitments under this
Agreement, Xxxx Atlantic and any affected Xxxx Atlantic Company reserves all
rights to seek any and all remedies and damages permitted under law, including,
but not limited to, injunctive relief, equitable relief and compensatory
damages. In addition to the foregoing, the Key Employee shall forfeit all unpaid
installment payments under Section 2 of this Agreement, and shall have an
obligation to immediately repay any installment payment previously received.
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11. Governing Law. This Agreement shall be interpreted and
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enforced in accordance with the law of the State of New York.
12. Severability. If any clause, phrase or provision of this
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Agreement or the application thereto to any person or circumstances shall be
invalid or unenforceable under any applicable law, this shall not affect or
render invalid or unenforceable the remainder of this Agreement. Furthermore, in
the event that a court of law or equity determines that the geographic scope of
any covenants, or the duration of any of the restrictions under this Agreement,
are not enforceable, or if any provision of this Agreement conflicts with any
applicable requirement of a code of conduct that pertains to an employee
licensed to practice a profession governed by such code, this Agreement shall be
deemed to be amended to the extent necessary, but only to the extent necessary,
to permit the enforcement of the terms of this Agreement, as so amended, and to
avoid a conflict with said code of conduct.
13. Waiver. The waiver by Xxxx Atlantic of a breach by the Key
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Employee of any provision of this Agreement shall not be construed as a waiver
of any subsequent breach.
14. Entire Agreement.
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(a) Post-Separation Payments. This Agreement sets forth the entire
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understanding of Xxxx Atlantic and the Key Employee and supersedes all prior
agreements and communications, whether oral or written, pertaining to
eligibility for post-separation payments, except as follows. This Agreement
shall not affect the rights of the Key Employee under the compensation and
benefit plans in which the Key Employee participates; provided, however, that in
exchange for the separation payments described in this Agreement, the Key
Employee hereby waives, during the Period of this Agreement, any rights he or
she may have to participate in the Xxxx Atlantic Executive Separation Pay Plan
or any other Xxxx Atlantic plan that provides for severance payments.
(b) Certain Covenants. Except for the terms of compensation and
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benefit plans in which the Key Employee participates, Sections 3 (Prohibition
Against Recruiting, Hiring or Solicitation), 4 (Competition), and 6 (Proprietary
Information) of this Agreement shall supersede the terms or provisions of any
prior covenant or agreement between the Key Employee and any Xxxx Atlantic
Company covering the same subject matter; provided, however, that any such prior
covenants or agreements shall again be enforceable to the full extent of their
terms if (i) the Key Employee remains employed by a Xxxx Atlantic Company
subsequent to the Period of this Agreement (or any extension of such Period), or
(ii) during the Period of this Agreement, the Key Employee terminates his
employment, or such employment is terminated by Xxxx Atlantic, for reasons which
do not entitle the Key Employee to receive separation payments under Section 2
of this Agreement.
(c) Modification of Agreement. This Agreement shall not be
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modified except by written agreement of the Key Employee and Xxxx Atlantic.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
XXXX ATLANTIC CORPORATION
By:
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THE KEY EMPLOYEE
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EXHIBIT A
RELEASE
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THIS RELEASE (the "Release") is entered into by _____________________
(the "Key Employee"), for the benefit of XXXX ATLANTIC CORPORATION (the
"Company"), and all companies, and their officers, directors and employees,
which are affiliated with the Company or in which the Company owns a substantial
economic interest, and any benefit plan maintained by any Xxxx Atlantic Company
(or any plan administrator of any such plan). Capitalized terms in this document
which are not otherwise defined herein shall have the respective meaning
assigned to them in the Separation Agreement between the Company and the Key
Employee, dated as of January 29, 1999 (the "Agreement").
WHEREAS, the Key Employee has separated from service with the Key
Employee's employing company (the "Employer") on __________ , _______(the
"Separation Date") pursuant to the terms of the Agreement, and the Key Employee
wishes to execute this Release as contemplated under the terms of the Agreement.
NOW, THEREFORE, the Key Employee affirms as follows:
1. The Key Employee hereby waives any and all claims which the Key
Employee might have against any Xxxx Atlantic Company, and any benefit plan
maintained by any Xxxx Atlantic Company (or any plan administrator of any such
plan), for salary payments, vacation pay, incentives, bonuses, or other
remuneration or employee benefits of any kind, with the exception of any
unfulfilled obligations of the Company or Employer under Section 2 of the
Agreement.
2. Except as provided in Section 1 hereof, the Key Employee hereby
voluntarily releases and discharges each and every Xxxx Atlantic Company and
their successors and assigns, and the directors, officers, employees, and agents
of each of them, and any benefit plan maintained by any Xxxx Atlantic Company
(or any plan administrator of any such plan), of and from any and all debts,
obligations, claims, demands, judgments or causes of action of any kind
whatsoever, known or unknown, in tort, contract, by statute or on any other
basis, for equitable relief, compensatory, punitive or other damages, expenses
(including attorneys' fees), reimbursements or costs of any kind which the Key
Employee might have or assert against any of said entities or persons by reason
of the Key Employee's employment by any Xxxx Atlantic Company or the termination
of said employment, and all circumstances related thereto, including but not
limited to, any and all claims, demands, rights and/or causes of action,
including those which might arise out of allegations relating to a claimed
breach of an alleged oral or written employment contract, or relating to
purported employment discrimination or civil rights violations, such as, but not
limited to, those arising under Title VII of the Civil Rights Act of 1964 (42
U.S.C. Section 2000e et seq.), the Civil Rights Acts of 1866 and 1871 (42 U.S.C.
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Sections 1981 and 1983), Executive Order 11246, as amended, the Age
Discrimination in Employment Act of 1967, as amended (29 U.S.C. Section 621
et seq.), the Equal Pay Act of 1963 (29 U.S.C. Section 206(d)(1)), the
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Rehabilitation Act of 1973 (29 U.S.C. Sections 701-794), the Civil Rights Act of
1991, the Americans with Disabilities Act, the Employee Retirement Income
Security Act ("ERISA") or any other applicable federal, state, or local or
foreign employment discrimination statute or ordinance.
3. The Key Employee hereby reaffirms all covenants and promises
given by the Key Employee under the Agreement, and all other terms and
conditions of the Agreement, in all respects.
4. Should any provision of this Release be declared or be
determined by any court to be illegal or invalid, the validity of the remaining
parts, terms or provisions shall not be affected thereby, and said illegal or
invalid part, term or provision shall be deemed not to be a part of this
Release.
STATEMENT BY THE KEY EMPLOYEE WHO IS SIGNING BELOW: THE COMPANY HAS
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ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
RELEASE. THE COMPANY HAS FULFILLED ITS DUTIES TO ME UNDER THE OLDER WORKERS
BENEFITS PROTECTION ACT, AND I ACKNOWLEDGE THAT THIS RELEASE AND THE AGREEMENT
ARE LEGALLY ENFORCEABLE BY THE COMPANY. I HAVE CAREFULLY READ AND FULLY
UNDERSTAND THE PROVISIONS OF THIS RELEASE AND HAVE HAD SUFFICIENT TIME AND
OPPORTUNITY (OVER A PERIOD OF SUBSTANTIALLY MORE THAN 21 DAYS) TO CONSULT WITH
MY PERSONAL TAX, FINANCIAL AND LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT,
AND I INTEND TO BE LEGALLY BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE
THIS RELEASE WITHIN SEVEN (7) DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL
NOT BECOME ENFORCEABLE OR EFFECTIVE UNTIL THAT SEVEN-DAY PERIOD HAS EXPIRED.
THE UNDERSIGNED, intending to be legally bound, has executed this
Release as of the ___ day of _________, ____, that being the Key Employee's
Separation Date.
THE KEY EMPLOYEE
Signed:
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THIS IS A RELEASE
READ CAREFULLY BEFORE SIGNING
