Exhibit 10o
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 10th day of July, 1996, by and
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between Xxxx Atlantic Corporation, its successors and assigns ("Xxxx Atlantic"),
and Xxxxxxxx X. Xxxxxx, Xx., a Vice Chairman and employee of Xxxx Atlantic (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, or a company in which Xxxx Atlantic directly or indirectly
owns a substantial equity interest, their successors and assigns, and,
subsequent to any merger of Xxxx Atlantic with or into any other entity, any
company which is an affiliate of the successors and assigns of Xxxx Atlantic
subsequent to such merger, or a company in which any such successor or assignee
owns a substantial equity interest.
WHEREAS, pursuant to the terms of an Agreement and Plan of Merger,
dated April 21, 1996, between Xxxx Atlantic, NYNEX Corporation ("NYNEX") and
Seaboard Merger Company, and any amendment or restatement thereof (the
"Definitive Agreement"), Xxxx Atlantic contemplates a corporate combination of
the Xxxx Atlantic and NYNEX businesses on a date which is yet to be decided (the
"Closing Date"), and Xxxx Atlantic contemplates that the achieving of the
closing of the transactions contemplated by the Definitive Agreement (a
"Closing"), and a successful combination of the two businesses, will depend on
achieving numerous approvals by third parties, completing other conditions of
closing, and developing of business integration plans, in addition to the
continuation of efforts to manage and grow the existing lines of Xxxx Atlantic's
business; and
WHEREAS, Xxxx Atlantic acknowledges that the period from the date of
this Agreement to a date not later than the second anniversary of the Closing
Date is likely to be a period of extraordinary transition;
WHEREAS, Xxxx Atlantic wishes to provide additional financial security
to the Key Employee, and to retain the services of the Key Employee as Vice
Chairman, and to provide for an effective transition upon any change in the
Chief Executive Officer of Xxxx Atlantic, for the period through the second
anniversary of the Closing Date; and
WHEREAS, Xxxx Atlantic and the Key Employee have previously entered
into an Employment Agreement dated May 2, 1995 (the "Current Employment
Agreement"), which shall, as amended, continue to remain in effect until the
Closing; and
WHEREAS, Xxxx Atlantic and the Key Employee wish to set forth in this
Agreement the terms and conditions applicable to the continuing employment of
the Key Employee after the Closing, which shall be effective upon the Closing;
NOW, THEREFORE, for good and valuable consideration, the Key Employee
and Xxxx Atlantic hereby agree as follows:
1. Term of Employment During "Transition Period". The term of
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employment under this Agreement (the "Transition Period") shall commence on the
Closing Date and end on the second anniversary of the Closing Date. The parties
intend that the obligations of Xxxx Atlantic and the Xxxx Atlantic Companies
under this Agreement shall become the obligations of
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Employment Agreement Page 1 Xxxxxxxx X. Xxxxxx, Xx.
the successors and assigns of Xxxx Atlantic and the Xxxx Atlantic Companies
subsequent to the Closing.
2. Obligations of the Xxxx Atlantic Companies during the Transition
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Period. During the Transition Period:
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(a) one or more Xxxx Atlantic Companies shall employ the Key
Employee as an officer and Senior Manager at a salary grade not lower
than Salary Grade 38;
(b) the employing Xxxx Atlantic Company shall (i) compensate
the Key Employee at an annual base salary of not less than $700,000 on
and after the Closing Date, and at an annual base salary of not less
than $750,000 on and after the first anniversary of Closing, and (ii)
to the extent not otherwise modified by the terms of this Agreement,
the Key Employee shall be eligible to participate in all of the
benefit and compensation plans, and the programs of perquisites,
applicable to similarly-situated Senior Managers of Xxxx Atlantic, as
those plans and programs may be amended from time to time; and
(c) the Key Employee shall be nominated for election to the
Board of Directors of Xxxx Atlantic, and, on and after the Closing
Date, the parent corporation of the combined businesses, at each
annual meeting of the respective shareowners which occurs prior to the
end of the Transition Period.
3. Obligations of the Key Employee during the Transition Period.
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During the Transition Period, the Key Employee shall have the following
obligations and duties.
(a) The Key Employee shall continue to fully and faithfully
perform his duties and responsibilities (i) as a director, so long as
he is elected and serving, and (ii) as an officer, reporting only to
the Chief Executive Officer and the Board.
(b) The Key Employee shall serve in such executive capacities,
titles and authorities with respect to the Xxxx Atlantic Companies as
the Board or the CEO may from time to time prescribe, and the Key
Employee shall perform all duties incidental to such positions, shall
cooperate fully with the Board and the CEO, and shall work
cooperatively with the other officers of the Xxxx Atlantic Companies.
(c) The Key Employee shall continue to diligently devote his
entire business skill, time and effort to the affairs of the Xxxx
Atlantic Companies in accordance with the duties assigned to him that
are not inconsistent with the terms hereof, and shall perform all such
duties, and otherwise conduct himself, in a manner reasonably
calculated in good faith by him to promote the best interests of the
Xxxx Atlantic Companies. Prior to the Key Employee's retirement from
Xxxx Atlantic, except to the extent specifically permitted by the
Chief Executive Officer or the Board and except as set forth below,
the Key Employee shall not, directly or indirectly, render any
services of a business, commercial or professional nature to any other
person or organization other than a Xxxx Atlantic Company or a venture
in which a Xxxx Atlantic Company has a financial interest, whether or
not the services are rendered for compensation.
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Employment Agreement Page 2 Xxxxxxxx X. Xxxxxx, Xx.
(d) The failure of the Key Employee to perform his obligations
pursuant to paragraphs (a) through (c) above shall be excused when
such failure is on account of the Key Employee's disability within the
meaning of the applicable disability benefit plans in which the Key
Employee participates from time to time.
4. Termination of this Agreement. In the event that the Key Employee
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is elected Chief Executive Officer on or after the Closing Date but prior to the
second anniversary of the Closing Date, this Agreement shall terminate upon such
election and shall be of no further force or effect.
5. Retirement Pension Benefits.
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(a) Eligibility for Waiver of Early Retirement Pension
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Discount. If the Key Employee remains in active service with Xxxx
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Atlantic through July 1, 1998 in accordance with the terms of this
Agreement, the Key Employee shall at any time thereafter be entitled,
subject to signing and delivering the Release, to retire with a two-
year waiver of any applicable early retirement pension discount under
the terms of the Xxxx Atlantic Senior Management Retirement Income
Plan or any successor to that plan which applies to Senior Managers,
as that plan may be amended from time to time ("RIP"), as more fully
described in the following paragraph. The parties acknowledge that the
pension enhancement described in this Section is part of the
consideration given by Xxxx Atlantic in exchange for the Release and
the non-compete and proprietary information covenants granted by the
Executive under Sections 10 and 11 of this Agreement.
(b) Calculation of Waiver of Early Retirement Pension Discount.
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If the Key Employee qualifies for the waiver of early retirement
pension discount, as described in the previous paragraph, the Key
Employee's target pension under RIP shall be equal to the greater of:
(i) The target pension determined under the applicable
pension formula under RIP which is in effect and applicable to
the Key Employee at the time of the Key Employee's retirement,
after adding two additional years to the Key Employee's age at
the time of retirement for purposes of determining the amount of
any applicable early retirement discount (but not for any other
purpose under RIP); or
(ii) The target pension which would have been applicable
to the Key Employee if he had retired at any time during the
Transition Period, under the terms of any early retirement
incentive, pension window, or other special provision of RIP
which may then have been in effect but which is no longer in
effect at the time of the Executive's actual retirement. In such
a case, the calculation of the RIP enhanced benefit shall not be
subject to further supplementation by the discount waiver
provisions of the prior paragraph.
6. Stay Incentive.
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(a) Stay Bonus on Second Anniversary of Closing: Subject to the
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terms and conditions of this Agreement:
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Employment Agreement Page 3 Xxxxxxxx X. Xxxxxx, Xx.
(1) if there is a Closing of the transactions contemplated in
the Definitive Agreement, and
(2) if the Key Employee has remained an employee "in good
standing" (as hereinafter defined) of a Xxxx Atlantic Company, or of a
succession of two or more Xxxx Atlantic Companies, from the date of
this Closing to the second anniversary of the Closing Date;
then, unless such payment is deferred pursuant to Section 12(c), not
later than 30 calendar days following such anniversary of the Closing
Date, Xxxx Atlantic will cause the Xxxx Atlantic Company which then
employs the Key Employee to pay the Key Employee a Stay Bonus in an
amount equal (before withholding of taxes) to 100 percent of the Key
Employee's Pay as of the second anniversary of the Closing Date.
(b) Definition of Pay. As used in this Agreement, "Pay" shall
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have the meaning set forth in the Key Employee's First Amendment to
Employment Agreement, dated as of the date of this Agreement.
(c) Definition of Employment in Good Standing. For purposes of
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Section 6(a), the Key Employee will be considered to be "in good
standing" on a given date if, on that date, the Key Employee has not
terminated employment for any reason from the date of this Agreement
to the given date, has not tendered oral or written notice of intent
to resign or retire effective as of a date on or before the given
date, and is not in receipt of notice from his employing Xxxx Atlantic
Company that the employer has determined that the Key Employee's
employment is to be terminated because the Key Employee has committed
a violation of law or a breach of the Employee Code of Conduct or
other written policy of the employing company which is of sufficient
severity to be cause for termination for misconduct.
7. Further Consideration for Non-Compete Agreement.
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(a) If the Key Employee has remained an employee "in good
standing" (as defined in Section 6(c)) of a Xxxx Atlantic Company, or
of a succession of two or more Xxxx Atlantic Companies, from the date
of this Agreement to July 1, 1998, and if this Agreement is in effect
as of that date, then Xxxx Atlantic shall pay the Key Employee the
amount described in the following paragraph. The parties acknowledge
that the payment described in this Section is part of the
consideration given by Xxxx Atlantic in exchange for the non-compete
and proprietary information covenants granted by the Executive under
Sections 10 and 11 of this Agreement. At the time of determination
that an amount is payable under Section 6 or 7 of this Agreement,
such amount may be deferred in accordance with the provisions of
Section 12(c).
(b) The payment described in this paragraph shall be equal to
two times the Key Employee's Pay as of July 1, 1998. This payment
shall be payable in a single cash payment, not later than July 31,
1998 (unless deferred pursuant to Section 12(c)).
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Employment Agreement Page 4 Xxxxxxxx X. Xxxxxx, Xx.
8. Retirement, Discharge for Cause, and Certain Involuntary
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Terminations of Employment.
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(a) Voluntary Resignation, Retirement, or Discharge for Cause.
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In the event that, prior to July 1, 1998, the Key Employee voluntarily
resigns or retires for any reason (except a "constructive discharge",
as defined in Section 8(e)), or is discharged by Xxxx Atlantic for
"cause" (as hereinafter defined) at any time prior to the end of the
Transition Period, the Key Employee shall forfeit any and all rights
to receive the benefits and other benefits set forth in Sections 5, 6,
and 7 of this Agreement which as of the relevant date have not yet
been earned under this Agreement, but shall otherwise be eligible to
receive any and all compensation and benefits for which a similarly-
situated retiring Senior Manager would be eligible under the
applicable provisions of the compensation and benefit plans, as those
plans may be amended from time to time. In such event, the Key
Employee shall be subject to the terms of the covenant not to compete,
as described in Section 10 of this Agreement, for the period described
therein.
(b) Cause. For purposes of this Agreement, the term "cause"
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shall mean a violation of law (other than a traffic violation or other
minor civil offense), or behavior that Xxxx Atlantic concludes amounts
to a material breach of any company policy or provision of the
Employee Code of Business Conduct, and including, by way of example:
dishonesty; working outside the Xxxx Atlantic Companies in violation
of Sections 3(c) or 10 of this Agreement in competition with any Xxxx
Atlantic Company; other conduct that poses a material conflict of
interest; revealing confidential or proprietary information of any
Xxxx Atlantic Company in violation of Section 11 of this Agreement; or
a substantial and deliberate abuse of the voucher or expense
reimbursement processes of any Xxxx Atlantic Company.
(c) Consequences of Certain Involuntary Terminations. Except in
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the case of a discharge for cause, in the event that Xxxx Atlantic
involuntarily discharges the Key Employee, or the Key Employee is
"constructively discharged" (as hereinafter defined), prior to the end
of the Transition Period, then the Key Employee shall be entitled to
receive, as liquidated damages, subject to signing and delivering the
Release, an amount of cash equal to the compensation and benefits
which he would have been entitled to receive had Xxxx Atlantic
fulfilled its obligation to employ and compensate the Key Employee in
accordance with the provisions of Sections 2, 6, 7 and 8 of this
Agreement, calculated and paid in accordance with paragraph (d) of
this Section. In such a case, in addition to the liquidated damages
described in the previous sentence, subject to signing and delivering
the Release described in Section 12(d), the Key Employee shall be
entitled to receive the benefits set forth in Sections 5, 6 and 7 of
this Agreement, but calculated as though the Key Employee had actually
remained in active service with Xxxx Atlantic, earning the
compensation described in Section 2 of this Agreement, until the end
of the Transition Period, with payment to be made within 30 days after
the termination of employment date. Under the circumstances described
in this paragraph, the Key Employee shall be subject to the non-
compete covenants of this Agreement through the period ending on the
second anniversary of the date of termination of the Key Employee's
employment.
(d) Calculation and Payment of Liquidated Damages. The
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liquidated damages described in the first sentence of the previous
paragraph shall consist of all
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Employment Agreement Page 5 Xxxxxxxx X. Xxxxxx, Xx.
five of the following items, but only the following items. All of the
following items of liquidated damages shall be subject to applicable
withholding taxes. Each payment contemplated by this subsection (d)
shall be contingent upon the absence, as of the time of such payment,
of any knowing and material violation by the Key Employee of any of
the covenants contained in Sections 10 and 11.
(i) Salary: The liquidated damages shall be paid monthly in
cash, in an amount each month equal to the salary which would
have been paid to the Key Employee under Section 2 of this
Agreement, assuming salary adjustments annually at a percentage
equal to the merit increase budget percentage for Xxxx Atlantic
Senior Managers.
(ii) Short-Term Incentives: The liquidated damages for foregone
short-term incentives under STIP shall be paid annually in cash,
not later than 30 days after the date on which incentives are
awarded by Xxxx Atlantic under the STIP for the prior year's
performance, in an amount equal to the value of the cash and
deferred stock which the Key Employee would have been entitled to
receive under the STIP, without adjustment for individual
performance.
(iii) Long-Term Incentives: The liquidated damages for foregone
long-term incentives shall be paid annually in cash, within 30
days of the granting of stock options for the year, in an amount
equal to the Black-Scholes value of options which the Key
Employee would have been entitled to receive. Furthermore, for
purposes of the Key Employee's long-term compensation in the form
of any and all Xxxx Atlantic stock options which are outstanding
on the date of the Key Employee's separation from service, the
Key Employee shall be deemed, for purposes of determining the
duration of the Key Employee's right to exercise any and all such
stock options, to have remained in active service with Xxxx
Atlantic continuously through the second anniversary of the
Closing Date, and then to have retired on that date with whatever
rights to continue to exercise then-outstanding stock options
subsequent to such date which would then be applicable to a
retiring holder of such options under the terms of the respective
stock option agreements and certificates. The provisions of this
paragraph shall cease to apply if and when the Key Employee
violates any covenant under Section 9 or 10 of this Agreement.
Notwithstanding the provisions of this paragraph, any incentive
stock options held by the Key Employee shall be recharacterized
as nonqualified stock options at the end of the 90th day after
the actual date of the Key Employee's separation from service
from any and all Xxxx Atlantic Companies.
(iv) RIP Pension Benefits: The RIP target pension will be
recalculated after July 1, 1998 taking into account the
liquidated damages under paragraphs (i) and (ii) above as though
they were earned as salary and short-term incentives during a
period of employment ending on the last day of the Transition
Period, and (A) Xxxx Atlantic shall pay the Key Employee a true-
up payment based on said recalculation if the Key Employee
has elected a lump-sum payment of the benefit provided by
Section 5(a), and (B) if the Key Employee has elected a pension
in the form of an annuity, the Key Employee's RIP pension
benefits thereafter shall be based on said recalculation.
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Employment Agreement Page 6 Xxxxxxxx X. Xxxxxx, Xx.
(v) Miscellaneous Benefits: The liquidated damages for all
other foregone benefits shall be paid monthly in an amount equal
to the sum of: (A) the Xxxx Flex allowance that the Key Employee
would have been entitled to receive, plus (B) one-twelfth of the
annual maximum company matching contribution that the Key
Employee would have been eligible to receive if the Key Employee
made the maximum contributions to the Xxxx Atlantic Savings Plan
then permitted by law.
(e) Constructive Discharge. The Key Employee shall be deemed to
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have been "constructively discharged" for purposes of this Agreement,
if, in the absence of conduct amounting to cause for discharge on the
part of the Key Employee, and without the Key Employee's express
written consent, any of the following events has occurred within 12
months prior to the Key Employee electing to retire: (i) Xxxx Atlantic
(or the Key Employee's employing company) has breached Section 2(a) or
2(b) of this Agreement; (ii) the Key Employee has suffered a negative
individual performance adjustment which causes the Key Employee's
short term award under the STIP for a particular year to be reduced by
25% or more; or (iii) the Key Employee's responsibilities have been
substantially reduced in type or scope, other than in a general
reorganization of the management functions of one or more Xxxx
Atlantic Companies, with the result that the Key Employee has
materially less status and authority. Except as provided herein,
nothing in this Section 8(e) shall limit or qualify any of the
obligations of Xxxx Atlantic under all subsections of Section 2 of
this Agreement, which are absolute.
(f) Death. In the event of the death of the Key Employee after
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the Closing on any date after the date of this Agreement on which the
Key Employee was an employee "in good standing" immediately prior to
the death, then Xxxx Atlantic shall continue to pay to the Key
Employee's estate to the end of the Transition Period the amounts
determined as if at the date of death the Key Employee had been
terminated without cause under Section 8(c).
9. Certain Limitations Upon Payments. Anything in this Agreement or
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in the Employment Agreement to the contrary notwithstanding, Xxxx Atlantic and
the Key Employee agree to follow the procedures set forth in Attachment A with
respect to the applicability of the provisions of Section 280G of the Internal
Revenue Code of 1986, as amended.
10. Prohibition Against Competitive Activities.
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(a) Prohibited Conduct by the Key Employee. During the period
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of the Key Employee's employment with any Xxxx Atlantic Company, and
for a period of 24 months following the Key Employee's retirement or
termination of employment for any other reason from any and all Xxxx
Atlantic Companies, the Key Employee, without the prior written
consent of the Chief Executive Officer of Xxxx Atlantic (or the
designee of that officer), shall not:
(i) personally engage in "Competitive Activities" (as
defined in paragraph (b)) within any geographic area in which any
Xxxx Atlantic Company is then engaged (or, at the time of the Key
Employee's termination of employment, had a board-approved
business plan under which it planned to engage) in such
Competitive Activities;
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Employment Agreement Page 7 Xxxxxxxx X. Xxxxxx, Xx.
(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 within any geographic area described in
Section (a)(i); 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;
(iii) directly or indirectly attempt to divert from any
Xxxx Atlantic Company any business in connection with Competitive
Activities.
(b) Competitive Activities. For purposes of Section (a) hereof,
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"Competitive Activities" means business activities relating to
products or services of the same or similar type as those for which
the Key Employee had responsibility to plan, develop, manage or
oversee within the last 24 months of the Key Employee's employment
with any Xxxx Atlantic Company.
(c) No Solicitation of Xxxx Atlantic Employees. During the
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period of the Key Employee's employment with any Xxxx Atlantic
Company, and for a period of 24 months following the Key Employee's
retirement or termination of employment for any other reason from any
and all Xxxx Atlantic Companies, the Key Employee shall not interfere
with the relationship of any Xxxx Atlantic Company with any of its
employees, agents, representatives, suppliers or vendors under
contract, or joint venturers. During said 24-month post-separation
period, the Key Employee will not solicit any employee of any Xxxx
Atlantic Company to accept employment with, or provide services to,
any person or entity which is not a Xxxx Atlantic Company.
(d) 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. For a period of 15 days after the giving of such notice, the Key
Employee shall have the opportunity to respond and discuss with Xxxx
Atlantic the underlying facts and the basis for Xxxx Atlantic's belief
that the Key Employee is in breach of this Section. During such 15-day
period, Xxxx Atlantic shall not pursue any remedy provided by this
Agreement or at law or in equity.
(e) Forfeiture of Benefits. The Key Employee acknowledges that
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his violation of any of the prohibitions of this Section 10, either
during a period of employment with a Xxxx Atlantic Company, or during
the 24 months following termination of employment, may result in the
Key Employee's forfeiture of any and all rights to benefits under the
nonqualified pension plan in which the Key Employee participates, or
the forfeiture of rights to payments or benefits under any other
compensation or benefit plan which may contain similar prohibitions or
conditions on benefits.
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Employment Agreement Page 8 Xxxxxxxx X. Xxxxxx, Xx.
(f) Waiver. Nothing in this Agreement shall bar the Key
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Employee from requesting, at the time of the Key Employee's retirement
or at any time thereafter, that the officer named in Section 10(a)
waive Xxxx Atlantic's rights to enforce the non-compete covenants of
this Section, and said officer shall have the power to agree to such a
waiver if said officer determines that it is not inconsistent with the
interests of Xxxx Atlantic to do so.
11. Prohibition Against Disclosure of Proprietary Information.
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(a) Prohibited Conduct by the Key Employee. The Key Employee
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acknowledges that, as one of the most senior officers of the Xxxx
Atlantic Companies, the Key Employee has continuing access to
confidential and proprietary information of Xxxx Atlantic Companies.
The Key Employee shall, therefore, at all times during the period of
active employment with any Xxxx Atlantic Company, and for a period of
three years thereafter, preserve the confidentiality of all
proprietary information of any Xxxx Atlantic Company. The three-year
limitation under this paragraph shall not in any way limit any Xxxx
Atlantic Company's common law and statutory rights to protect its
trade secrets or intellectual property rights at any time, to the full
extent of the law. "Proprietary information" includes, but is not
limited to, information in the possession or control of a Xxxx
Atlantic Company that has not been fully disclosed in a writing which
has been generally circulated to the public at large, and which gives
the Xxxx Atlantic Company an opportunity to obtain or maintain
advantages over its current and potential competitors, such as
strategic or tactical business plans, undisclosed financial data;
ideas, processes, methods, techniques, systems, patented or
copyrighted information, models, devices, programs, computer software
or related information; documents relating to regulatory matters and
correspondence with governmental entities; undisclosed information
concerning any past, pending or threatened legal dispute, pricing and
cost data; reports and analyses of business prospects; business
transactions which are contemplated or planned; research data;
personnel information and data; identities of users and purchasers of
any Xxxx Atlantic Company's products or services; and other
confidential matters pertaining to or known by one or more Xxxx
Atlantic Companies, including confidential information of a third
party which a Xxxx Atlantic Company is bound to protect.
(b) Obligation to Return Company Property. If and when the Key
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Employee terminates employment for any reason with all Xxxx Atlantic
Companies, the Key Employee shall, prior to the last day of active
employment and without charge to any Xxxx Atlantic Company, return to
the employing Xxxx Atlantic Company (or the rightful Xxxx Atlantic
Company) all company property, including, without limitation,
originals and copies of records, papers, programs, computer software,
documents and other materials which contain Proprietary Information,
as defined in the previous paragraph. The Key Employee shall
thereafter cooperate with each applicable Xxxx Atlantic Company in
executing and delivering documents requested by the company that are
necessary to assist the Xxxx Atlantic Company in patenting or
registering any programs, ideas, inventions, discoveries, copyright
material or trademarks, and to vest title thereto in the Xxxx Atlantic
Company.
(c) Forfeiture of Benefits. The Key Employee acknowledges that
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a violation of the prohibitions of this Section 11 may result in the
Key Employee's forfeiture of any
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Employment Agreement Page 9 Xxxxxxxx X. Xxxxxx, Xx.
and all rights to benefits or awards under the nonqualified pension
plan in which he or she participates, and any other benefit or
compensation plan containing similar prohibitions and requirements.
(d) Remedies in Addition to Forfeiture of Benefits. The Key
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Employee recognizes that irreparable injury will result to one or more
Xxxx Atlantic Companies, and to the business and property of any of
them, in the event of a breach by the Key Employee of any of the
provisions of this Section 11. In the event of any breach of any of
the Key Employee's covenants under this Section 11, any Xxxx Atlantic
Company that is damaged by such breach shall be entitled, in addition
to curtailing the payment of any post-separation payments hereunder,
and in addition to any other remedies and damages which may be
available at law, to injunctive relief to restrain the violation of
such covenants by the Key Employee or by any person or persons acting
for or with the Key Employee in any capacity whatsoever.
12. Miscellaneous Provisions.
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(a) Key Employee's Duty to Treat this Agreement as
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Confidential. Unless and until the terms of this Agreement, and the
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amount of any payment eligible to be paid or actually paid under this
Agreement, are disclosed in writing to the public by any Xxxx Atlantic
Company pursuant to any applicable legal duty to disclose such
information, it shall be a condition of eligibility to receive any
payment hereunder that the Key Employee hold the terms of this
Agreement and the amount of any payment hereunder in strict
confidence, except that the Key Employee may disclose such details on
a confidential basis to his spouse (if any), and to any financial
counselor, tax adviser or legal counsel retained by the Key Employee.
A breach by the Key Employee of his duty of confidentiality under this
paragraph shall constitute cause for Xxxx Atlantic to terminate this
Agreement.
(b) Assignment by Xxxx Atlantic. The obligations of Xxxx
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Atlantic hereunder shall be the obligations of any and all successors
and assigns of Xxxx Atlantic. Xxxx Atlantic may assign this 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.
(c) Bonus and Other Payments Not Applicable to Pension,
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Savings Plan or Other Benefit Plans. The amounts described in Sections
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6 and 7 under this Agreement shall not be eligible to be contributed
to any qualified savings plan, and shall not be benefit-bearing
compensation for purposes of any group term life insurance plan,
pension plan, or other employee benefit plans. Nothing in this
Agreement is intended to supersede or modify any rights which the Key
Employee may have under any other compensation or benefit plan in
which the Key Employee participates. At the time of determination that
an amount is payable under Section 6 or 7 of this Agreement, such
amount may be deferred under any nonqualified deferred compensation
plan in which the Key Employee is then eligible to participate, but
only if
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Employment Agreement Page 10 Xxxxxxxx X. Xxxxxx, Xx.
and to the extent then permitted under the terms of any such
nonqualified deferred compensation plan.
(d) Release. As a condition of eligibility to receive the
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pension and severance benefits described in Sections 5 and 8 of this
Agreement, the Key Employee shall sign and deliver a legal release in
the form attached to this Agreement as Attachment B, which shall be
signed by the Key Employee at the time of his retirement or other
termination of employment from Xxxx Atlantic (the "Release"), and the
Key Employee shall not revoke his signature.
(e) Waiver. The waiver by Xxxx Atlantic of a breach by the
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Key Employee of any provision of this Agreement shall not be construed
as a waiver of any subsequent breach.
(f) Governing Law. This Agreement shall be construed and
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enforced in accordance with the laws of the Commonwealth of Virginia.
(g) Entire Agreement. Except for the terms of other
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compensation and benefit plans in which the Key Employee participates,
effective upon the Closing, this Agreement shall set forth the entire
understanding of Xxxx Atlantic and the Key Employee and shall
supersede all prior agreements and communications, whether oral or
written, between Xxxx Atlantic and the Key Employee, including the
Non-Compete and Proprietary Information Agreement, between Xxxx
Atlantic and the Executive, dated August 10, 1993 and January 24,
1994, and the Current Employment Agreement. This Agreement shall not
be modified except by written agreement of the Key Employee and Xxxx
Atlantic. During the Transition Period and during any period of
employment with Xxxx Atlantic following the Transition Period, the
terms of Sections 10 and 11 of this Agreement shall supersede the
terms of any Non-Compete and Proprietary Information Agreement to
which the Key Employee and any Xxxx Atlantic Company are parties.
Until the closing, the Current Employment Agreement shall be
enforceable to the full extent of its terms.
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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Xxxxxxx X. Xxxxx,
Chairman of the Board and Chief Executive Officer
THE KEY EMPLOYEE
-------------------------------------------------------
Xxxxxxxx X. Xxxxxx, Xx.
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Employment Agreement Page 11 Xxxxxxxx X. Xxxxxx, Xx.
Attachment A
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Certain Limitations upon Payments
---------------------------------
(a) Tax Code Limitations. Anything in this Agreement or the Current
--------------------
Employment Agreement to the 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 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) Calculations by Independent Firm. All determinations to be made
--------------------------------
under this Section shall be made by Xxxx Atlantic's independent public
accountant or such law firm as is acceptable to the Key Employee and Xxxx
Atlantic (the "Independent Firm"), immediately if the Key Employee separates
from service under circumstances which make the Key Employee eligible to receive
post-separation payments under this Agreement, or at such other times as Xxxx
Atlantic may determine. The parties agree that the Independent Firm shall render
a preliminary opinion on the applicability of Section 280G to this Agreement and
to the Current Employment Agreement within sixty (60) days of the date of
Execution of this Agreement. The Independent Firm shall provide its
determinations and any supporting calculations both to Xxxx Atlantic and the Key
Employee within ten (10) days of the effective date of termination of
employment, or when such calculations are otherwise made. Any such determination
by the Independent Firm shall be binding upon Xxxx Atlantic and the Key
Employee. Within five (5) days after this determination, Xxxx Atlantic shall
commence to pay (or cause payments to commence to be paid) 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 the uncertainty in
------------------------------
the application of Section 280G of the Code at the time of the initial
determination by the Independent Firm 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, the Independent Firm
shall review the determination made by it pursuant to the preceding paragraph.
In the event that the Independent Firm 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 the Independent Firm 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) All of the fees and expenses of the Independent Firm in performing
the determinations referred to in subsections (b) and (c) above shall be borne
solely by Xxxx Atlantic.
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Employment Agreement Page 12 Xxxxxxxx X. Xxxxxx, Xx.
Attachment B
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Release
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THIS RELEASE (the "Release") is entered into by [NAME]
----------------------
(the "Key Employee"), for the benefit of ______________________ (the "Company"),
and for the benefit of all companies affiliated with the Company (collectively,
"Xxxx Atlantic Companies"), and the officers, directors and employees of each of
them.
WHEREAS, the Key Employee has separated from service with the Company
on _____________, 1996 (the "Separation Date") pursuant to the terms of a
Separation and Non-Compete Agreement, dated _______________, 1996, between Xxxx
Atlantic Corporation and the Key Employee (the "Agreement"), and he 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, as his free and voluntary act, hereby releases
and discharges the Company, its affiliates, and their successors and assigns,
and the directors, officers, employees, and agents of each of them, 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,
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.) as amended by the Civil Rights Act of 1991, the
-- ---
Civil Rights Acts of 1866 and 1871 (42 U.S.C. Sections 1981 and 1983), Key
Employee 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 Rehabilitation Act of 1973 (29 U.S.C. Sections
701-794), the Americans with Disabilities Act, or any other applicable federal,
state or local employment discrimination statute or ordinance, which the Key
Employee might have or assert against any of said entities or persons (a) by
reason of the Key Employee's active employment by the Company or any affiliated
company, or the termination of said employment and all circumstances related
thereto; or (b) by reason of any other matter, cause or thing whatsoever which
may have occurred prior to the date of execution of this Release. Moreover, the
Key Employee waives any and all rights under the Employee Retirement Income
Security Act of 1974 (ERISA) to assert any claim to any severance benefits, or
other remuneration on account of separation from service, other than as stated
in the Agreement.
2. The Key Employee hereby reaffirms the terms and conditions of the
Agreement in all respects.
3. 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.
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Release under Employment Agreement Page 1 Xxxxxxxx X. Xxxxxx, Xx.
STATEMENT BY THE KEY EMPLOYEE WHO IS SIGNING BELOW: THE COMPANY HAS
--------------------------------------------------
ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
RELEASE. 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 __________, 199__, that being the Key Employee's
Separation Date.
THE KEY EMPLOYEE
Signed:
--------------------------------------
THIS IS A RELEASE
READ CAREFULLY BEFORE SIGNING
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Release under Employment Agreement Page 2 Xxxxxxxx X. Xxxxxx, Xx.
