Exhibit 10s
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made this 30th day of June, 1996, by
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and between Xxxx Atlantic Corporation, its successors and assigns ("Xxxx
Atlantic"), and Xxxxx X. Xxxxxx, 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 Xxxxx X. Xxxxxx
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. During
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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 Xxxxx X. Xxxxxx
(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 is
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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 Discount. If
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the Key Employee remains in active service with Xxxx 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. If the
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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 terms
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and conditions of this Agreement:
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Employment Agreement Page 3 Xxxxx X. Xxxxxx
(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 have the
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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 Section
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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 Xxxxx X. Xxxxxx
8. Retirement, Discharge for Cause, and Certain Involuntary Terminations
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of Employment.
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(a) Voluntary Resignation, Retirement, or Discharge for Cause. In the
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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" shall mean
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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 the
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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 liquidated
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damages described in the first sentence of the previous paragraph shall
consist of all
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Employment Agreement Page 5 Xxxxx X. Xxxxxx
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 Xxxxx X. Xxxxxx
(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 have
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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 the
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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 in
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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 of the
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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 Xxxxx X. Xxxxxx
(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 period of
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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 notice
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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 his
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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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(f) Waiver. Nothing in this Agreement shall bar the Key Employee from
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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 a
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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 Xxxxx X. Xxxxxx
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 Employee
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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 Confidential.
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Unless and until the terms of this Agreement, and the 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 Atlantic
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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, Savings
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Plan or Other Benefit Plans. The amounts described in Sections 6 and 7
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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 Xxxxx X. Xxxxxx
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 pension
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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 Key
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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 enforced
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in accordance with the laws of the Commonwealth of Virginia.
(g) Entire Agreement. Except for the terms of other compensation
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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: _________________________________________
Xxxxxxx X. Xxxxx,
Chairman of the Board and Chief Executive Officer
THE KEY EMPLOYEE
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Xxxxx X. Xxxxxx
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Employment Agreement Page 11 Xxxxx X. Xxxxxx
Attachment A
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Certain Limitations upon Payments
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(a) Tax Code Limitations. Anything in this Agreement or the Current
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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 00 Xxxxx X. Xxxxxx
Xxxxxxxxxx X
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Release
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THIS RELEASE (the "Release") is entered into by [NAME]
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(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 Xxxxx X. Xxxxxx
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. 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 Xxxxx X. Xxxxxx
