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Exhibit 10.12
[LETTERHEAD OF AT&T]
June 7, 1996
Mr. Xxxx Xxxxxx
0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Dear Xxxx:
This letter agreement (Agreement) will supplement your offer of
employment dated April 18, 1995 (attached), provided however, that certain
provisions of this Agreement will replace and supersede the following provisions
of the April 18, 1995 letter: "Special Individual Award", "Severance Benefit"
and "Special Pension Arrangement", and such three provisions are null and void
in their entirety. Moreover, this Agreement supersedes all verbal and written
communication with you relative to your compensation, which occurred subsequent
to the April 18, 1995 offer letter and prior to this Agreement.
(1) Completion Bonus: You will be provided a Completion Bonus by XXX Xxxxxxxxxxx
("NCR") or the spun-off NCR ("Newco"), based solely on your continued employment
by NCR or Newco, as follows:
Date Amount
June 1, 1996 $ 375,000
June 1, 1997 $ 375,000
June 1, 1998 $ 375,000
June 1, 1999 $3,875,000
In the event of your (1) death, (2) "Disability" (as defined below),
(3) involuntary termination for other than "Cause" (as defined below), or (4)
"Termination for Good Reason" (as defined below), you (or your estate in the
event of your death) will be provided a one-time payment within 45 days of such
termination or death, equal to $5,000,000 offset by what you have already
received under the above schedule of payments.
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For purposes of this Agreement, "Cause" shall be defined as follows:
(1) your conviction (including a plea of guilty or nolo contendere) of a felony
or any crime of theft, dishonesty, or moral turpitude; or (2) gross omission or
gross dereliction of any statutory or common law duty of loyalty to your
employer. "Disability" shall be defined as your termination of employment for
disability with eligibility to receive long term disability benefits under the
terms of a company plan; and "Termination for Good Reason" shall be defined as
voluntary termination by you on or before June 1, 1999 following (a) a reduction
in annual total compensation (i.e., base salary, target annual incentive, "Long
Term Incentive" as valued below) to less than $3,000,000, or (b) your ceasing to
hold the position of Chief Executive Officer ("CEO") of NCR or Newco. For
purposes of these definitions only (and not Sections (3) and (4) below), the
dollar value of your annual "Long Term Incentive" grants shall be determined by
valuing Performance Shares, Performance Units, Stock Units, Restricted Stock,
Restricted Stock Units etc., at the market price at grant and assuming 100%
performance achievement if such grants include performance criteria, and Stock
Options and SARs will be valued at 50% of the market price of the shares or
related shares at grant, as applicable.
Moreover, if, (1) you continue to be employed as CEO of NCR or Newco,
and (2) you are asked and you agree to sign an employment contract for an
additional two year period beyond June 1, 1999, upon the later of (1) execution
of that employment contract or (2) June 1, 1999, you will be paid a
Re-enlistment Bonus of $2,000,000.
(2) 1995 Special Equity Grant: In September, 1995 you were provided a Special
Equity Grant of 400,000 AT&T Leveraged Stock Options and 35,000 AT&T Restricted
Stock Units. In the event of a spin-off of NCR and your continued employment
with Newco, these Options and Restricted Stock Units will continue to become
exercisable or vest, as applicable, in accordance with the schedule under which
these incentive awards were granted.
In the event of your (1) involuntary termination from NCR or Newco for other
than Cause or (2) Termination for Good Reason from NCR or Newco, these Options
and Restricted Stock Units will continue to become exercisable or vest, as
applicable in accordance with the schedule under which these incentive awards
were granted, subject to the terms and conditions of these incentive award
agreements as if you continued to be actively employed by Newco.
In the event of your death or Disability, these Options and Restricted Stock
Units will become immediately exercisable or released of restrictions, as
applicable.
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(3) Spin-Off Payout: In the event of a spin-off of NCR, Newco will provide (and
AT&T will cause Newco to provide) to you a Newco Stock Option grant with a
$5,000,000 "face value" (i.e., market price per share at grant times the number
of shares under this Stock Option grant = $5,000,000, with the "market price"
per share being deemed to be the average of the daily high and low trading
prices in the five trading days immediately following the date of the spin-off
of NCR) and a grant of $5,000,000 "face value" (computed in the same manner) in
Newco Restricted Shares/Units. These Stock Options and Restricted Shares/Units
will become exercisable or xxxxx xxxx, as applicable, in September, 1999. In the
event of your (1) involuntary termination from Newco for other than Cause or (2)
Termination for Good Reason from Newco, these Options and Restricted Stock
Shares/Units will continue to become exercisable or vest, as applicable, in
accordance with the schedule under which these awards were granted, subject to
their terms and conditions, i.e., as if you continued to be employed by Newco).
In the event of your death or Disability, these Options and Restricted
Shares/Units will become immediately exercisable or released of restrictions, as
applicable.
(4) Long Term Incentives at Newco: It is anticipated that, at least initially,
long term incentives provided to you at Newco will be generally comparable to
those currently provided to you at NCR.
All of your unexercised AT&T Stock Options, and all of your
undistributed/unvested AT&T Performance Shares/Stock Units, including the
Leveraged Stock Option grants in (2) above, will be replaced with comparable
awards based on Newco stock with share numbers and exercise prices, as
applicable, adjusted to preserve the value (including any aggregate spread) of
such awards at spin-off; provided, however, the Restricted Stock Units granted
under (2) above will remain denominated in AT&T shares.
(5) Special Pension Arrangement Buyout: The terms of your April 18, 1995 offer
of employment anticipated your ability to receive benefits under the Special
Pension Arrangement after attainment of 10 years of service with AT&T or an
affiliate of AT&T (e.g., NCR). The planned spin-off of NCR would prevent you
from attaining such years of service. Accordingly, AT&T will pay you, upon
consummation of the spin-off, a lump sum of $1,900,000 in lieu of all potential
benefits and entitlements payable under the Special Pension Arrangement of your
April 18, 1995 offer of employment. If you desire, AT&T will assist you
in using this money (after income and employment tax withholding) to purchase a
deferred annuity, payable at age 60, provided, that you expressly acknowledge
that you will be subject to income taxation on such amount and AT&T makes no
representation as to whether such amount will be adequate to purchase such an
annuity which would approximate (based on a number of financial and actuarial
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assumptions) the stream of payments you would have received under the Special
Pension Arrangement had you remained with AT&T/NCR for 10 years.
************
Prior to spin-off, AT&T will cause NCR to establish a Rabbi Trust
(Trust) with assets sufficient to fund the portion of the Completion Bonus that
will be unpaid at the time of the spin-off, as well as the Re-enlistment Bonus.
Under current IRS regulations, establishment of the Trust would not result in
immediate taxable income to you. Benefits payable from the Trust, however, would
be taxable income to you at the time of payment. The foregoing should not be
considered tax advice to you, for which you should consult your own tax advisor.
It is understood and agreed that prior to the date NCR is no longer an
affiliate of AT&T (i.e., the date of the spin-off), you will sign an Agreement
and Release (A&R) not to sue AT&T, NCR, or Newco, except to enforce obligations
under the A&R. This A&R will identify those obligations under (1) this Agreement
and (2) my April 18, 1995 employment letter agreement or (3) any subsequent
letter agreement(s) amending or replacing these two letter agreements, which at
the time of the spin-off have not been fully met and which Newco will assume.
Other than such identified post spin-off obligations, you will waive any and all
claims to salary, incentives payments or benefits of any kind. Additionally the
A&R would include the following provision.
"Employee, as his free and voluntary act and on behalf of himself, his
heirs, administrators, executors, successors and assigns, hereby
releases and discharges AT&T, NCR, and their respective subsidiaries
and affiliates 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 in tort,
contract, by statute, or on any other basis for compensatory, punitive
or other damages, expenses, reimbursements or costs of any kind,
including, but not limited to, any and all claims, demands, rights,
and/or causes of action arising 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 Acts of 1964 (42 U.S.C. Section 2000e, et seq.),
the Civil Rights Acts of 1866 and 1871 (42 U.S.C. Sections 1981 and
1983), Executive Order 11246, as amended, the Age Discrimination in
Employment Act of 1967 (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 New Jersey Law Against
Discrimination (N.J.S.A. 10:5-1-30), the New York Human Rights Law
(N.Y. Civil Rights Law Section 290, et seq.), or any other applicable
state or local employment discrimination statute or ordinance] which
he might have or assert against any of said entities or persons (1) by
reason of his
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active employment by AT&T or NCR or the termination of said employment
relationship and all circumstances related thereto; or (2) by reason
of any other matter, cause or thing whatsoever, from the first date of
employment to the date of execution of this A&R."
If you agree with the foregoing, please sign this Agreement in the
space provided below and return the executed copy to me.
Sincerely,
/s/ Xxx Xxxxxxxxxx
_______________________________________
Attachment
/s/ X. Xxxxxx
____________________________________ _____________________________
Acknowledged and Agreed to Date
X. Xxxxxx
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[LETTERHEAD OF AT&T]
April 18, 1995
Mr. Xxxx Xxxxxx
Minister Laan Forty
0000 XX Xxxxxxxxx
Holland
Dear Xxxx:
This letter completely replaces my April 6 and April 11, 1995 offer
letters to you and all other written and oral communications on the subject.
It gives me great pleasure to offer you a Senior Management position
within AT&T Corp. (the "Company" or "AT&T"). In addition to confirming my offer,
this letter will detail the terms and conditions of your employment and outline
the current major features of AT&T's compensation and benefit plans and
practices.
Assumption of Duties: On or about June 1, 1995, you would assume the
position of Chairman and CEO, AT&T Global Information Solutions
Company ("AT&T GIS"), reporting to Xxxxxx X. Xxxxx, Chairman and CEO,
AT&T. You will also be a member of the AT&T Management Executive
Committee and the Global Operations Team. It is understood that a
start date as late as August 1, 1995 may be required to accommodate
your current employment situation. Moreover, since the Company
recognizes that you have vacation plans in July, the six month waiting
period will be waived for purposes of your 1995 vacation.
Base Salary: Your initial base salary will be $600,000 per year. This
rate will increase annually to reflect individual performance and base
salary structure changes applicable to similarly situated Senior
Managers. Your first review for your base salary level will be
effective March 1, 1996.
Annual Incentive: The annual incentives for Senior Managers currently
take the form of (1) AT&T Performance Award (APA), (2) Merit Award
(MA), and (3) Unit Performance Award (UPA).
(1) AT&T Performance Award (APA) is predicated on
corporate performance.
(2) Merit Award (MA) is driven by individual and
team contributions.
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(3) Unit Performance Award (UPA) is predicated on your organization
meeting its financial targets.
Except as reflected below in the "Guaranteed 1995 Annual Incentive"
provision, the Company cannot make any definitive representations regarding the
continuation of the APA/ MA/UPA format or the size of individual awards under
these plans. The following information, however, will provide a frame of
reference regarding the potential size of your annual incentive. Based on your
initial base salary, your 1995 target (not actual) APA/MA is $383,000 and your
target (not actual) UPA is $207,000. These awards are payable in the first
quarter of 1996 and will be prorated to reflect partial 1995 service.
Guaranteed 1995 Annual Incentive Amount: In the event that your earned prorated
1995 APA/MA/UPA (see above provision) is less than $590,000, you will be
provided a lump sum that, when combined with your actual earned APA/MA/UPA, will
total $590,000. In the event that your earned 1995 APA/MA/UPA is higher than
$590,000, you would receive that higher amount and no lump sum would be payable
under this Guaranteed 1995 Annual Incentive Amount provision.
The amount payable under this guaranteed 1995 Annual Incentive
provision will not be included as compensation under any employee or Senior
Manager benefit plan. It is understood that this minimum guaranteed incentive
award for performance year 1995 shall not in any way construed as a precedent
for future performance years.
AT&T Long Term Incentive Program:
-- AT&T Performance Shares: Effective within 30 days of your date of hire, you
will receive 10,555 AT&T Performance Shares covering the 1995-1997 performance
period (payout, if any, is in the first quarter of 1998). This is the 1995
standard grant for your Senior Management position. Historically, such awards
have been made annually. Performance Shares, which are equivalent in value to
AT&T common shares, are awarded based on position rate at the beginning of a
three-year performance period. Payout of from 0% to 150% of such Performance
Shares is made in the form of cash and/or AT&T shares at the end of the
performance period based on attainment of the Company's return to equity
performance criteria as established annually by the Compensation Committee of
the Board of Directors. Dividend equivalents are paid quarterly on all
undistributed Performance Shares.
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-- AT&T Stock Options: Effective within 30 days of the date of your hire, you
will be awarded 38,484 AT&T Stock Options. This is the 1995 standard grant for
your Senior Management position. Historically, standard stock option grants have
been made in January of each year to Senior Managers. Currently, the term of the
stock option grant is ten years. Assuming continued Company employment, stock
options vest as follows: one-third of the options will vest on the first
anniversary of the date of grant, one-third on the second anniversary, and
one-third on the third anniversary of the date of grant. The option price is
100% of market price on date of grant. As with the Annual Incentive Awards, Long
Term Incentives are closely linked with the Company's strategy to meet the
challenges of an ever changing marketplace. Accordingly, other than the initial
grant, the Company cannot guarantee continuation of the Stock Option plan in its
current format, nor can it guarantee annual grant levels to individual
participants.
Special Education Arrangement: You will receive an annual cash payment of up to
$10,000 to address education costs for your son in Sweden payable each December
during the time he is a student. As payment will include an additional tax
reimbursement amount sufficient to pay the income and employment taxes that you
incur with respect to both the educational reimbursement and the tax
reimbursement amount itself.
Hiring Bonus: In order to address certain forfeitures, (e.g., possible 1994
annual incentive amount) prompted by your leaving your current employer and to
incent you to join AT&T, the Company will provide you with the following:
You will be granted the following "Seasoned" AT&T Performance Shares
under the Company's Long Term Incentive Program:
-- 7,397 AT&T Performance Shares (1993-1995 Perfor-
xxxxx Period payable 1996)
-- 8,783 AT&T Performance Shares (1994-1996 Perfor-
xxxxx Period payable 1997)
In the event that the 1996 payout of your AT&T Performance Shares covering
the 1993-1995 performance period is less than 100% of the target, you will
be provided a special one-time cash lump sum payment equal to the
difference between the payout for this three-year cycle at target and the
actual payout for the 1993-1995 performance period. This special payment
will not be considered
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Hiring Bonus (Cont'd)
a Performance Share Award under the Long Term Incentive Program. Moreover,
it is understood that this special payment shall not in any way be
construed as a precedent for future performance periods.
It is anticipated you will receive a 1994 (payable 1995) annual bonus
award from your current employer. However, in the event your current
employer does not pay all or a portion of this annual award, the
Company will make up the difference, payable in US dollars, at the
later of your date of hire or 30 days from receipt of your letter to
us indicating the magnitude and circumstances of this forfeiture. It
is understood and agreed that you will make all reasonable efforts to
secure this annual incentive from your current employer, e.g., exhaust
all internal appeals but not including litigation.
Special Individual Award: You will be eligible for a special cash award of
$375,000 payable one year from your date of hire, and three additional awards of
$375,000 each, payable two, three, and four years, respectively, from date of
hire. This Special Individual Award is predicated on continued employment only,
except as otherwise treated under the "Severance Benefit" provision below.
Severance Benefit: In the event of any Company initiated termination other than
for disability or for "cause" (as defined below), from the effective date of
your employment to the day prior to your 56th birthday, you will be entitled to:
-- A payment equal to the higher of (1) $1,200,000 or (2) 200% of
your annual base salary in effect on the date of such
termination, such payment to be made in the month following the
month of termination.
-- Any portion of the $1,500,000 cash amount, as described above in
the Special Individual Award provision, which is unpaid as of the
termination date will be payable in the month following the
month of termination.
-- You will be entitled to the Home Sale Provision under the AT&T
Management Relocation Plan (AT&TMRP). With respect to the capital
loss provision of the AT&TMRP, you will be reimbursed 100% of
the calculated loss (instead of the plan's 90% provision), where
the calculated loss will take into account 100% (instead of 50%)
of eligible capital improvements (as defined in the plan). The
maximum reimbursement provision of the AT&TMRP (i.e., the greater
of
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$50,000 or 10% of the purchase price plus 50% of eligible capital
improvements) will also not be applicable in your situation.
Such payments and other entitlements, as described above in the
Severance Benefit provision, will be conditioned upon your signing a release and
agreement not to sue the Company. The form of this release and agreement will be
that then in use for AT&T Senior Managers.
For purposes of this employment letter, "cause" shall be defined as
follows: (1) your conviction (including a plea of guilty or nolo contendere) of
a felony or any crime or theft, dishonesty or moral turpitude; or (2) gross
omission or gross dereliction of any statutory or common law duty of loyalty to
the Company or (3) violation of the Company's Code of Conduct.
Senior Management/Employee Benefit Plans: Attachment A is a brief outline
describing the employee and special Senior Management benefits in which you will
participate.
Special Pension Arrangement: The Company will develop a special individual
pension for you (the Special Pension). The minimum service required for
eligibility for a pension benefit under this Special Pension will be ten years
service with AT&T and/or an affiliate of AT&T). Other than the minimum ten year
AT&T service requirement, the provisions of this Special Pension will be
generally comparable to the pension benefit arrangement you are now covered
under by your current employer provided, however, that the benefit formula of
AT&T's Special Pension is reduced to reflect the value of the 4% of base salary
employee contribution to your current plan. (You will not be required to make
contributions to the Special Pension). The Special Pension formula is 1.82% of
your final year's base salary, up to $75,000, plus 1.32% of your final year's
base salary in excess of $75,000, multiplied by total years from January 1,
1977 to your retirement from AT&T (prorated to the nearest month). Your initial
eligibility for an unreduced immediate pension under the Special Pension is at
age 60. However, an immediate reduced pension is available as early as your
attainment of ten years of AT&T and/or affiliate service with a 6% reduction per
year for each year (prorated to the nearest month) prior to age 60, e.g., a 30%
reduction if your retirement occurs on your 55th birthday. Alternatively, if you
retire after ten years of AT&T and/or affiliate service prior to age 60, you can
defer receipt of your pension until age 60 and avoid the early retirement
reduction. The pension benefits payable under the Special Pension will be
reduced by:
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Special Pension Arrangement: (Cont'd)
-- Any pension benefits payable to you by your current and prior
employers' pension plans in both Sweden and the Netherlands. It
is understood that you will comply with requests from the Company
to document your retirement benefits payable from your current
and prior employers as well as data relating to your Social
Security benefits.
-- Swedish, Dutch and US Social Security payments.
-- All benefits payable to you under any qualified and/or
non-qualified (SERP, i.e., Special Executive Retirement Plan,
including AT&T restricted stock which is considered part of an
overall AT&T GIS SERP) retirement/pension plans of AT&T and/or
any affiliate of AT&T, other than AT&T and/or AT&T GIS savings
plans or the AT&T Senior Management Incentive Award Deferral
Plan.
The above details the most important provisions of the Special
Pension. Other details relating to (1) survivor protection, (2) disability
benefits, and (3) pension or deferred pension for retirement prior to the above
referenced 10 year minimum eligibility requirement, will be addressed when we
secure more details regarding comparable provisions to your current pension
plan(s). As indicated in Attachment A, however, from your date of hire at AT&T,
you will be provided significant disability and death benefit protection under
employee and Senior Management plans already in effect and these benefits will
be considered when we address what, if any, additional death and disability
protection should be incorporated in this Special Pension. Please be assured
that we have every intention of working with you to ensure that the final
version of the individual Special Pension Arrangement, together with the
AT&T/AT&T GIS qualified and non-qualified pension, death and disability plans,
will be generally comparable to your current pension arrangement.
In the event you retire and meet the minimum ten year eligibility
requirement for a Special Pension, you will be entitled to the following
post-termination ancillary entitlements available to and administered in a
manner consistent with then current treatment of Service Pension eligible Senior
Managers and in accordance with the terms and conditions then applicable to each
Senior Management plan or practice:
-- 1 times base salary Senior Management Basic Life Insurance
Program benefit
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-- 1-1/2 times base salary Senior Management Individual Life
Insurance (Split Dollar - contributory).
-- Continuation of outstanding Company Stock Options and Performance
Shares (the regular annual grants) but only to the extent such
treatment is then (i.e., when you terminate) available to Service
Pension eligible Senior Managers.
-- Continuation of Senior Management Telephone Concession Service
but only to the extent such benefit is then available to Service
Pension eligible Senior Managers.
Amounts payable to you under this Special Pension will be made from
the Company's operating income.
Relocation Plan: You will be eligible for relocation benefits under a
combination of the International Relocation Plan and the AT&T Management
Relocation Plan (AT&TMRP) as described in Attachment B. Moreover, if your job
responsibilities require a move from Dayton, Ohio, to another AT&T location,
e.g., the northern New Jersey area, the capital loss provision of the AT&TMRP
(Section 3.R) will be modified for you as follows: You will be reimbursed 100%
of the calculated loss (instead of the plan's 90% provision), where the
calculated loss will take into account 100% (instead of 50%) of eligible capital
improvements (as defined in the plan). The maximum reimbursement provision of
the AT&TMRP (i.e., the greater of $50,000 or 10% of the purchase price plus 50%
of eligible capital improvements) will also not be applicable in your situation.
It is agreed and understood that you will not talk about, write about
or otherwise disclose the terms of existence of this employment letter or any
fact concerning its negotiation or implementation. You may however, discuss the
contents of this letter with your spouse, legal and/or financial counselor.
As indicated in the attached AT&T Non-Competition Guideline
(Attachment C), a number of AT&T incentive arrangements and non-qualified
pension and benefit plans are subject to non-competition constraints.
This letter reflects the entire agreement regarding the terms and
conditions of your employment. Accordingly, it supersedes and completely
replaces any prior oral or
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written communication on this subject. This letter is not an employment contract
and should not be construed or interpreted as containing any guarantee of
continued employment. The employment relationship at AT&T is by mutual consent
("Employment-At-Will"). This means that managers have the right to terminate
their employment at any time and for any reason. Likewise, the Company reserves
the right to discontinue your employment with or without cause at any time and
for any reason.
The incentive plans as well as the employee and Senior Management
benefit plans, programs and practices as briefly outlined in this letter,
reflect their current provisions. Payments and benefits under these plans and
programs, as well as other payments referred to in this letter, are subject to
Internal Revenue Service rules and regulations with respect to tax withholding
and reporting, and will not be grossed-up for taxes unless specifically stated.
The Company reserves the right to discontinue or modify any such plans, programs
and practices. Moreover, the very brief summaries contained herein are subject
to the terms of such plans, programs and practices.
For purposes of the Senior Management and employee benefit plans, the
definition of compensation is as stated in the plans. Currently, pensions at
AT&T are based on base salary and annual incentives. Other benefits are based on
either base salary or base salary plus annual incentives. All other compensation
and payments reflected in this offer, e.g., Hiring Bonus, Special Individual
Award, Relocation, Long Term Incentives, are not included in the calculation of
employee or Senior Management benefits (except for the AT&T Incentive Deferral
Award Plan, which currently permits the deferral of Annual Incentives and
Performance Shares).
An attorney, whose practice is limited to immigration and nationality
law, will be retained, at the Company's expense, to assist your efforts to
secure the appropriate work visa in the United States. A tax gross-up will also
be provided to the extent the cost of such service is deemed imputed income to
you. Of course, the Company will provide all needed documentation to facilitate
these visa endeavors.
It was my hope that at the outset of your employment you could be
elected an officer of AT&T Corp. As discussed, however, there is one legal issue
that precludes us from making you an officer of AT&T Corp. It is the firm
intention of Xxx Xxxxx and myself to take all reasonable steps that would permit
your election in the future as an officer of AT&T Corp. It is likely that we
will need to seek the consent of the US government to accomplish this, and such
consent would not be forthcoming by the date we hope to bring you on board,
e.g., within the next month assuming your current
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employer will not demand adherence to the three month notification period.
Accordingly, in the interim, you will be hired as an employee and officer of
AT&T Global Information Solutions (AT&T GIS). As indicated in the first page of
this offer of employment, you will report to Xx. Xxxxx and be a member of the
AT&T Management Executive Committee (MEC) and the Global Operations Team. For
purposes of your basic employee benefits (e.g., medical, group term life
insurance) you will be covered under AT&T GIS plans and programs. However, for
purposes of both Annual Incentives (i.e., APA, MA, UPA) and Long Term Incentives
(i.e., AT&T Stock Option and AT&T Performance Shares), you will be covered by
AT&T practices applicable to the other members of the MEC. Moreover, you will be
covered by the special AT&T Senior Management plans (e.g., deferral, disability
and individual life insurance plans) applicable to your colleagues on the MEC.
In some cases these are stand-alone benefit plans, while in other cases they are
"wrap around" plans which will supplement the AT&T GIS employee benefits.
You have informed us that your current employer has restrictions on
competitive employment. However, you have confirmed that your proposed
employment responsibilities with AT&T are not competitive with your current
employer nor do they contravene any such restrictions. Accordingly, in the event
that litigation is commenced, the Company agrees to indemnify you for all costs
(including potential damages as well as litigation costs) relating to any action
brought by your current employer related to: (1) your termination of employment
with such employer and/or (2) your employment with the Company. In addition, in
the event that your employment with the Company causes you to forfeit all or
part of the stock option grant you had planned to exercise on April 26, 1995,
the Company will reimburse such forfeiture, after your diligent and reasonable
efforts to ensure compliance with this entitlement. The reimbursement from the
Company would be payable within 30 days of the later of (1) your date of hire,
or (2) our receipt of a letter from you quantifying and detailing the
circumstances of such forfeiture, and outlining your efforts in this regard with
your current employer.
By your acceptance of this offer, you agree that no trade secret or
proprietary information belonging to your current employer will be disclosed or
used by you at AT&T, and that no such information, whether in the form of
documents, memoranda, software, drawings, etc., will be retained by you or
brought with you to AT&T.
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Xxxx, I feel the package we have developed for you is attractive and
anticipates that you will make a critical contribution to the business as it
develops over the coming years. We look forward to having you join us. If you
have any questions, please don't hesitate to call me or Xxxxx X'Xxxxxxx on (908)
221-3596.
If you agree with the foregoing, please sign this letter by April 28,
1995 in the space provided below and return the original executed copy to me.
Sincerely,
/s/ Xxx Xxxxxxxxxx
_____________________________________
Attachments
/s/ Xxxx Xxxxxx 27 April 1995
____________________________________ ________________________
Acknowledged and Agreed to Date
X. Xxxxxx
16
ATTACHMENT A
X. Xxxxxx
BENEFIT SUMMARY
Combines Mid Career, Employee and Senior Management Benefits
MEDICAL - Company provided coverage during first two months
- Eligible to enroll in Personal Choice Flex Benefit
Plan.
- Under the Flex Plan, there are different levels of
coverage and plans from which to elect (i.e.,
Medical, Dental, Dependent Life Insurance,
Reimbursement Accounts, etc.).
DEATH BENEFITS - Minimum 15% of Pay* for spouse's lifetime until
pension plan for employees generally exceeds such
percentage
- 1 x Salary Company Paid Senior Management Basic
Life Insurance Program
- 1 or 1.5 x Salary Employee/Company paid Senior
Management Individual Life Insurance
- Up to 2 x Salary Employee Paid Group Term Life
Insurance
- 2 x Base Salary Company paid Group Term Life
Insurance (Max. $1.2 million)
SICKNESS DISABILITY - 52 weeks at full salary
LONG TERM - 60% of Salary LTD benefit to age 65 is provided
DISABILITY by Company. Option to elect an additional 10%
through Flex program with employee contribution
for the additional 10%
VACATIONS - 5 weeks vacation annually after six months
service
SAVINGS PLAN - Eligible to enroll after one year anniversary of
Company service; Company matches 75% of employee
contribution up to first 3% of Salary and 50% for
the next 3%
17
2
DEFERRAL PLAN - Option to defer Short and Long Term
Incentives (i.e., Performance Shares and
dividend equivalents). Current interest rate is
10 year U.S. Treasury notes plus 5%**.
FINANCIAL - May participate in Financial Counseling program
COUNSELING utilizing one of three approved firms (Asset
Management Group, Ayco and Coopers & Xxxxxxx) for
investment advice, tax advice and preparation,
estate planning, will and trust preparation.
TELEPHONE - 100% of Inter-LATA long distance
CONCESSION charges and International Calls (excluding Cuba
and North Korea) and 100% on certain Intra-LATA
long distance calls.
AUTOMOBILE - Company provided leased U.S. automobile, e.g.,
Cadillac Seville, Oldsmobile Aurora, Jeep Grand
Cherokee, Lincoln Town Car, etc. The Company
provides insurance and maintenance. Employee pays
for gasoline. Fair market value of the lease
imputed annually to the employee.
* Base salary plus annual incentive awards (APA/UPA/MA)
** Interest rate established by AT&T Board and subject to change from
time to time
Terms and conditions of Employee, Senior Management and Mid-Career Benefit
plans, programs and practices, are subject to change by the Company. The above
is only a very brief outline of such benefit plans, programs and practices.
Actual entitlements will be determined by the legal documents governing these
plans, programs and practices. If there is any conflict between the information
presented in this outline and such legal documents, the legal documents will
govern.
4/4/95
18
ATTACHMENT B
X. Xxxxxx
RELOCATION PLAN OUTLINE
Lump Sum Payment Paid in advance based on an individual formula which
includes home search trips, interim living costs,
meals, transportation, lodging, etc., for employee
and family
Enroute Expenses (Day(s) Travel expenses to U.S. for employee and family
of Move) members
Miscellaneous Household 1 month new salary*
Allowance
Home Sale Closing Costs Selling Commissions, Notary Fees, Recording Fees.
Also, assistance in selling home through the Managed
Sale Program of EuroHome Corporate
Services
Loan For Down Payment Interest free loan up to 95% of the estimated equity
(Equity Advance) in prior home
Home Purchase Closing Cost Most fees paid, e.g., attorneys, recording loan
origination/discount points (maximum 2 pts.)
Moving/Storage Packing, moving and unpacking of household goods Two
40 Foot surface container plus 2000 pounds air
shipment
Appliance purchase Reimbursement for major appliance purchase when not
provided as part of housing. Includes refrigerator,
stove/oven, washer/dryer, dish washer and microwave
oven.
Automobile Loss Reimbursement for the loss on sale of up to two
personally owned automobiles
Tax Gross-Up For non-deductible moving expense reimbursements
(Misc. Allowance not included)
* 5% of new annual salary if renting at the new location.
The above is only a brief outline of such benefits. Any benefits or rights will
be determined by the specific plan provisions as they apply in each case.
4/3/95
