EXHIBIT 10gg
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is made as of the 27th day
of October, 1998, by and between ▇▇▇▇ Atlantic Corporation, its successors and
assigns ("▇▇▇▇ Atlantic"), and ▇▇▇▇▇▇▇▇▇ ▇. Good, the Executive Vice President -
Strategy and Corporate Development of ▇▇▇▇ Atlantic (the "Key Executive"). In
this Agreement, "▇▇▇▇ Atlantic Companies" means all of, and "▇▇▇▇ Atlantic
Company" means any one of, ▇▇▇▇ Atlantic, all corporate subsidiaries or other
companies affiliated with ▇▇▇▇ Atlantic, all companies in which ▇▇▇▇ Atlantic
directly or indirectly owns a substantial equity interest, and their successors
and assigns.
WHEREAS, ▇▇▇▇ Atlantic and the Key Executive have previously entered
into a Separation and Non-Compete Agreement dated May 3, 1996 (the "Prior
Agreement"); and
WHEREAS, ▇▇▇▇ Atlantic and the Key Executive wish to supersede, in its
entirety, the Prior Agreement;
NOW, THEREFORE, for good and valuable consideration, the Key Executive
and ▇▇▇▇ Atlantic hereby agree as follows:
1. Term of Employment. The term of employment under this
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Agreement (the "Term of Employment") shall commence on the date first set forth
above and end on May 31, 2001.
2. Obligations of the ▇▇▇▇ Atlantic Companies. During the Term of
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Employment, the ▇▇▇▇ Atlantic Companies shall have the following obligations and
duties and shall provide the following compensation to the Key Executive.
(a) Salary. One or more ▇▇▇▇ Atlantic Companies shall employ
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the Key Executive as an officer and senior manager, and shall
compensate the Key Executive at a base salary of not less than his
current base salary
(b) STIP. The Key Executive shall participate in the ▇▇▇▇
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Atlantic Senior Management Short Term Incentive Plan or any successor
to that plan ("STIP") and shall be eligible each year during the Term
of Employment for a potential maximum award which shall not be less
than the potential maximum award he is eligible to receive for the
performance year 1998.
(c) Stock Options. The Key Executive shall participate in the
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▇▇▇▇ Atlantic 1985 Incentive Stock Option Plan or any successor to that
plan (the "Stock Option Plan") and shall receive an annual grant of
options thereunder with a value equal to or greater than 1.2 multiplied
by the Key Executive's base salary on the date of grant.
(d) Vacation. The Key Executive shall have the same holidays
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per calendar year recognized by his employing company for its
management employees and shall have an aggregate of 4 management
personal days and 5 weeks vacation per calendar
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Employment Agreement Page 1 ▇▇▇▇▇▇▇▇▇ ▇. Good
year, provided that such management personal days and vacation days
shall be scheduled with due regard to the needs of the business.
(e) Other Benefit Plans. To the extent not otherwise modified
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by the terms of this Agreement, the Key Executive shall be eligible to
participate in all of the benefit and compensation plans, and the
programs or perquisites, applicable to similarly-situated senior
managers of ▇▇▇▇ Atlantic, as those plans and programs may be amended,
supplemented, replaced or terminated from time to time.
3. Obligations of the Key Executive. During the Term of
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Employment, the Key Executive shall have the following obligations and duties.
(a) Officer. The Key Executive shall continue to fully and
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faithfully perform his duties and responsibilities as an officer,
reporting only to the Chief Executive Officer, provided that, for
purposes of this Agreement, the term "Chief Executive Officer" shall
include a Co-Chief Executive Officer.
(b) Executive. The Key Executive shall serve in such
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executive capacities, with such titles and authorities, as the Board of
Directors of ▇▇▇▇ Atlantic (the "Board") or the Chief Executive Officer
may from time to time prescribe, and the Key Executive shall perform
all duties incidental to such positions, shall cooperate fully with the
Board and the Chief Executive Officer, and shall work cooperatively
with the other officers of the ▇▇▇▇ Atlantic Companies.
(c) Entire Business Efforts. The Key Executive shall continue
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to diligently devote his entire business skill, time and effort to the
affairs of the ▇▇▇▇ Atlantic Companies in accordance with the duties
assigned to him, 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 ▇▇▇▇ Atlantic Companies. Prior to
the Key Executive's termination of employment, except to the extent
specifically permitted by the Chief Executive Officer or the Board, and
except for memberships on boards of directors which the Key Executive
holds on the date of this Agreement, the Key Executive shall not,
directly or indirectly, render any services of a business, commercial
or professional nature to any other person or organization other than a
▇▇▇▇ Atlantic Company or a venture in which a ▇▇▇▇ Atlantic Company has
a financial interest, whether or not the services are rendered for
compensation.
4. Retention Award.
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(a) Credit. As of the date of this Agreement, ▇▇▇▇ Atlantic
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shall credit $1,000,000 to the Key Executive's account under the ▇▇▇▇
Atlantic Income Deferral Plan ("IDP"). This credit shall be allocated
to the Global Balanced Fund maintained under the IDP, and shall
continue to be allocated to such fund until the credit becomes vested
as provided in Section 4(b) of this Agreement. The $1,000,000 credit,
plus any earnings or loss credited thereto, shall constitute the
"Retention Award".
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Employment Agreement Page 2 ▇▇▇▇▇▇▇▇▇ ▇. Good
(b) Vesting. Provided the Key Executive remains an "Employee
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in Good Standing" (as hereinafter defined) of a ▇▇▇▇ Atlantic Company
from the date of this Agreement to May 31, 2001, the Key Executive's
rights under the IDP to the Retention Award shall vest on May 31, 2001,
and the amount of the Retention Award shall be paid to the Key
Executive in accordance with any distribution election or elections
that the Key Executive has made pursuant to the terms of the IDP.
(c) Definition of Employee in Good Standing. For purposes of
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this Agreement, the Key Executive will be considered to be an "Employee
in Good Standing" on a given date if, on or before that date, the Key
Executive has not terminated employment for any reason (other than
"constructive discharge" as defined in Section 6(d) of this Agreement),
has not tendered oral or written notice of intent to resign or retire
effective as of a date on or before the given date (other than pursuant
to a "constructive discharge" as defined in Section 6(d) of this
Agreement), and has not behaved in a manner that would be grounds for
discharge with cause as defined in Section 6(b) of this Agreement.
5. Stay Bonus.
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(a) Closing of Merger. If ▇▇▇▇ Atlantic and GTE Corporation
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("GTE") merge their businesses (the "Merger") pursuant to the terms of
the Agreement and Plan of Merger dated as of July 27, 1998, among ▇▇▇▇
Atlantic, GTE, and Beta Gamma Corporation (the "Definitive Agreement"),
and if the Key Executive has remained an Employee in Good Standing of a
▇▇▇▇ Atlantic Company from the date of this Agreement to the closing
date of the Merger (the "Closing Date"), then, not later than 30
calendar days following the Closing Date, ▇▇▇▇ Atlantic shall cause the
▇▇▇▇ Atlantic Company which then employs the Key Executive to pay the
Key Executive a special bonus (a "Stay Bonus") consisting of a single
cash payment in an amount equal (before withholding of taxes) to 1.5
multiplied by the sum, as of the Closing Date, of (i) the Key
Executive's annual rate of base salary, and (ii) 50% of the Key
Executive's maximum short-term incentive under the STIP.
(b) Business Discretion of ▇▇▇▇ Atlantic/Termination of
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Merger Plan. Nothing in this Agreement is intended to limit the
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discretion of any ▇▇▇▇ Atlantic Company to take any action with regard
to the Merger which ▇▇▇▇ Atlantic may consider appropriate, including,
without limitation, postponing the Closing Date or terminating the
Definitive Agreement. If the Definitive Agreement is terminated without
the Merger occurring, the Key Executive shall have no right to receive
the Stay Bonus or any portion of such bonus.
6. Terminations of Employment.
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(a) Voluntary Resignation, Retirement, or Discharge for
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Cause. In the event that, prior to the end of the Term of Employment,
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the Key Executive voluntarily resigns or retires for any reason (except
a "constructive discharge", as hereinafter defined, or is discharged by
▇▇▇▇ Atlantic for "cause" (as hereinafter defined), the Key Executive
shall forfeit any and all rights to receive the compensation and
benefits set forth in Sections 2 and 5 of this Agreement which as of
the relevant date have not yet
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Employment Agreement Page 3 ▇▇▇▇▇▇▇▇▇ ▇. Good
been earned under this Agreement, and shall forfeit the right to
receive the Retention Award set forth in Section 4 of this Agreement,
but shall otherwise be eligible to receive any and all compensation and
benefits for which a similarly-situated senior manager would be
eligible under the applicable provisions of the compensation and
benefit plans in which he is then eligible to participate, as those
plans may be amended from time to time.
(b) Cause. For purposes of this Agreement, the term "cause"
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shall mean (i) grossly incompetent performance or substantial or
continuing inattention to or neglect of the duties and responsibilities
assigned to the Key Executive; fraud, misappropriation or embezzlement
involving any ▇▇▇▇ Atlantic Company; or a material breach of the
Employee Code of Business Conduct or Sections 8 (Non-Compete/No
Solicitation), 9 (Return of Property; Intellectual Property Rights) or
10 (Proprietary and Confidential Information) of this Agreement; each
of the foregoing as determined in the reasonable discretion and
judgment of the Chief Executive Officer of ▇▇▇▇ Atlantic, or (ii)
commission of any felony of which the Key Executive is finally adjudged
guilty in a court of competent jurisdiction. In the event that ▇▇▇▇
Atlantic terminates the employment of the Key Executive for cause, it
will state in writing the grounds for such termination and provide this
statement to the Key Executive within 10 business days after the date
of termination.
(c) Involuntary Terminations. Except in the case of a
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discharge for cause, in the event that ▇▇▇▇ Atlantic discharges the Key
Executive, or the Key Executive is "constructively discharged" (as
hereinafter defined), prior to the end of the Term of Employment, then
the Key Executive shall be entitled to receive, as liquidated damages,
subject to signing and delivering the Release (attached as Exhibit A),
the following payments, credits and benefits in lieu of any payment,
credit, or benefit otherwise provided in Sections 2, 4 and 5 of this
Agreement, provided that each payment, credit and benefit shall be
contingent upon the absence, at the time such payment, credit or
benefit is due, of any act that would constitute a material breach of
this Agreement:
(i) Salary: through the Term of Employment, on a
monthly basis, an amount equal to the monthly salary which
would have been paid to the Key Executive under Section 2 of
this Agreement, assuming that his annual rate of salary would
have been increased each January 1 by the greater of (A) 5%,
or (B) the general percentage increase, if any, approved by
the Human Resources Committee ("HRC") of the Board for
comparable positions in the senior management group based on
the HRC's review of market-median values for such comparable
positions;
(ii) Short-Term Incentives: through the Term of
Employment, on an annual basis, not later than 30 days after
the date on which incentives are awarded by ▇▇▇▇ Atlantic
under the STIP for the prior year's performance, an amount
equal to the value of the potential maximum award which the
Key Executive would have been entitled to receive under the
STIP based on the maximum STIP award for comparable positions
in the senior management group, without adjustment for
individual performance;
(iii) Retention Award: immediate vesting under the
IDP of the Retention Award provided for in Section 4 of this
Agreement;
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(iv) Stay Bonus: if the Merger subsequently occurs
pursuant to the Definitive Agreement, a single cash payment,
not later than 30 days after the Closing Date of the Merger,
which shall be equal (before withholding of taxes) to the Stay
Bonus which would otherwise have become payable under Section
5(a) of this Agreement, provided that the date of discharge
shall be substituted for the Closing Date for purposes of
calculating the dollar amount of such payment;
(v) Stock Options: through the Term of Employment, on
an annual basis, within 30 days of the granting of stock
options for the year to senior managers, an amount equal to
1.2 multiplied by the annual salary amount determined in
accordance with clause (i) above; provided further, with
respect to any and all ▇▇▇▇ Atlantic stock options which are
outstanding on the date of the Key Executive's separation from
service, the Key Executive shall be deemed, for purposes of
determining the duration of the Key Executive's right to
exercise any and all such stock options, to have remained in
active service with ▇▇▇▇ Atlantic continuously through the
Term of Employment, and then to have separated from service
with whatever rights would then be applicable to a holder of
such options under the Stock Option Plan;
(vi) IDP Benefits: through the Term of Employment,
company credits to the Company Contribution sub-account
contained within the Key Executive's account under the IDP to
the fullest extent provided, and at the same time such amounts
would have been credited, as if the Key Executive had remained
actively employed until the end of the Term of Employment and
received the salary and maximum STIP awards determined in
accordance with clauses (i) and (ii) above; provided further,
that ▇▇▇▇ Atlantic shall also credit to such IDP sub-account
an amount each year equal to the sum of (A) the amount which
the Key Executive would otherwise have been eligible to
receive as company matching contributions under the ▇▇▇▇
Atlantic Savings Plan or any successor to that plan (if he had
fully participated in contributions to that plan) and (B) the
pay credits which the Key Executive would otherwise have been
eligible to receive under the ▇▇▇▇ Atlantic Cash Balance Plan
or any successor to that plan;
(vii) Split- Dollar Benefits: regardless of whether
the Key Executive is retirement eligible at the time of his
separation from service, split-dollar life insurance benefits
applicable to a retiring participating senior manager, under
the terms of the ▇▇▇▇ Atlantic Senior Management Estate
Management Program; and
(viii) Flexible Perquisites: through the Term of
Employment, on a monthly basis, $2,000 in lieu of the Flexible
Perquisites Account allowance that the Key Executive would
have been entitled to receive.
(d) Constructive Discharge. The Key Executive shall be deemed
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to have been "constructively discharged" for purposes of this Agreement
if the Key Executive is an Employee in Good Standing and he terminates
his employment for any of the following reasons: ▇▇▇▇ Atlantic (or the
Key Executive's employing company) has materially breached this
Agreement; the Key Executive's responsibilities have been significantly
reduced in type or scope; there has been a significant adverse change
in the
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Key Executive's reporting relationship; there has been a significant
adverse change in the Key Executive's relative compensation (including
a negative individual performance adjustment which causes the Key
Executive's STIP award for a particular year to be reduced by 10% or
more); ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ is not elected Chairman of the Board by December
31, 1998 or is removed from or resigns from that position during the
Term of Employment (unless the Board determines that such event results
from ▇▇. ▇▇▇▇▇▇▇▇▇▇'▇ death, "Disability" (as defined in Section 4(a)
of his Employment Agreement, dated as of August 14, 1998), or his
election to terminate his employment "without Good Reason" (as provided
in Section 4(c) of his Employment Agreement); or there has been a
"change of control" of ▇▇▇▇ Atlantic. For purposes of this Agreement, a
change of control of ▇▇▇▇ Atlantic shall mean that any of the following
events or circumstances has occurred:
(i) any "Person" (as such term is used in sections
13(d) and 14(d)(2) of the Securities Exchange Act of 1934)
becomes a beneficial owner, directly or indirectly, of shares
of one or more classes of stock of ▇▇▇▇ Atlantic representing
20% or more of the total voting power of ▇▇▇▇ Atlantic's then
outstanding voting stock, provided, however, that if such
beneficial ownership is acquired in a transaction that has
been negotiated and approved by the Board, such acquisition of
beneficial ownership shall not be treated as a change of
control of ▇▇▇▇ Atlantic for purpose of this Agreement;
(ii) a tender offer (for which a filing has been or
is required to be made with the Securities and Exchange
Commission under section 14(d) of the Securities Exchange Act
of 1934) is made for the stock of ▇▇▇▇ Atlantic, and the
Person making the offer owns or has accepted for payment
shares of one or more classes of ▇▇▇▇ Atlantic stock which
represent, when combined with any shares otherwise acquired
and owned by such Person, 20% or more of the total voting
power of ▇▇▇▇ Atlantic's then outstanding stock, provided,
however, that if such tender offer has been negotiated and
approved by the Board, such tender offer and stock acquisition
shall not be treated as a change of control of ▇▇▇▇ Atlantic
for purposes of this Agreement; or
(iii) there ceases to be a majority of the Board
comprised of individuals who either (A) have been members of
the Board continuously for a period of not less than two
years, or (B) are new directors whose election by the Board or
nomination for election by shareowners of ▇▇▇▇ Atlantic was
approved by a vote of at least two-thirds of the directors
then in office who either were directors described in clause
(A) hereof or whose election or nomination for election was
previously so approved.
(e) Disability or Death. If, during the Term of Employment
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at a time when the Key Executive is an Employee in Good Standing, the
Key Executive terminates employment on account of disability (within
the meaning of the applicable disability benefit plans in which the Key
Executive participates from time to time) or dies, and provided ▇▇▇▇
Atlantic receives a Release in the form of Exhibit A from the Key
Executive (in the case of disability) or from his estate (in the case
of death), then ▇▇▇▇ Atlantic shall continue to pay to the Key
Executive (in the case of disability) or pay to the Key Executive's
estate (in the case of death) the amounts determined as if, at the date
of termination of employment on account of disability or death, the Key
Executive had been
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Employment Agreement Page 6 ▇▇▇▇▇▇▇▇▇ ▇. Good
terminated without cause under Section 6(c) of this Agreement;
provided, however, that in lieu of the amount described in Section
6(c)(iv) of this Agreement (the "Stay Bonus Amount"), the Key Executive
(or his estate) shall receive the Stay Bonus Amount multiplied by the
following fraction: the numerator shall be the number of days that have
elapsed between the date of this Agreement and the date of the Key
Executive's death or disability, and the denominator shall be the
number of days that have elapsed between the date of this Agreement and
the Closing Date of the Merger; and, provided further, that in the case
of a termination of employment on account of disability, the amounts
paid pursuant to Sections 6(c)(i) and (ii) of this Agreement shall
reduce dollar for dollar the disability benefits which would otherwise
be payable to the Key Executive during the remainder of the Term of
Employment under the various disability benefit plans in which he
participates.
7. Payments Subject to Excise Tax. In the event that it shall be
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determined, in the manner described in Exhibit B, that any payment or
distribution by any ▇▇▇▇ Atlantic Company to or for the benefit of the Key
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, ▇▇▇▇
Atlantic shall pay the Key Executive an additional amount, determined in
accordance with and subject to the provisions of Exhibit B, to compensate the
Key Executive for his excise tax cost.
8. Prohibition Against Competitive Activities.
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(a) Prohibited Conduct by the Key Executive. During the period
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of the Key Executive's employment with any ▇▇▇▇ Atlantic Company, and
for a period of 24 months following the Key Executive's termination of
employment for any reason from all ▇▇▇▇ Atlantic Companies, the Key
Executive, without the prior written consent of the Chief Executive
Officer of ▇▇▇▇ Atlantic shall not:
(i) personally engage in "Competitive Activities" (as
defined in Section 8(b) of this Agreement); or
(ii) work for, own, manage, operate, control or
participate in the ownership, management, operation or control of,
or provide consulting or advisory services to, any individual,
partnership, firm, corporation or institution engaged in Competitive
Activities, or any company or person affiliated with such person or
entity engaged in Competitive Activities; provided, however, that
the Key Executive'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 Executive's equity interest in any such
company is less than a controlling interest.
(b) Competitive Activities. For purposes of this Agreement,
"Competitive Activities" means business activities relating to products
or services of the same or similar type as the products or services
which (i) are sold (or, pursuant to an existing business plan, will be
sold) to paying customers of one or more ▇▇▇▇ Atlantic Companies, and
(ii) for which the Key Executive then has responsibility to plan,
develop, manage, market or oversee, or had any such responsibility
within the prior 24 months. Notwithstanding the previous sentence, a
business activity will not be treated as a
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Competitive Activity if the geographic marketing area of the relevant
products or services sold by the Key Executive or a third party does
not overlap with the geographic marketing area for the applicable
products and services of the ▇▇▇▇ Atlantic Companies.
(c) No Solicitation of ▇▇▇▇ Atlantic Employees. During the
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period of the Key Executive's employment with any ▇▇▇▇ Atlantic
Company, and for a period of 24 months following the Key Executive's
termination of employment for any reason from all ▇▇▇▇ Atlantic
Companies, the Key Executive shall not, without the consent of the
Chief Executive Officer of ▇▇▇▇ Atlantic:
(i) recruit or solicit any active employee of any
▇▇▇▇ Atlantic Company for employment or for retention as a
consultant or service provider;
(ii) hire or participate (with another company or
third party) in the process of hiring (other than for a ▇▇▇▇
Atlantic Company) any person who is then an active employee of
any ▇▇▇▇ Atlantic Company, or provide names or other
information about ▇▇▇▇ Atlantic employees to any person or
business (other than a ▇▇▇▇ Atlantic Company) under
circumstances which could lead to the use of that information
for purposes of recruiting or hiring; or
(iii) interfere with the relationship of any ▇▇▇▇
Atlantic Company with any of its employees, agents, or
representatives.
(d) Waiver. Nothing in this Agreement shall bar the Key
Executive from requesting, at the time of the Key Executive's
termination of employment or at any time thereafter, that the Chief
Executive Officer of ▇▇▇▇ Atlantic waive, in his sole discretion, ▇▇▇▇
Atlantic's rights to enforce some or all of this Section.
9. Return of Property; Intellectual Property Rights. The Key
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Executive agrees that on or before the Key Executive's termination of employment
for any reason with all ▇▇▇▇ Atlantic Companies, the Key Executive shall return
to the appropriate ▇▇▇▇ Atlantic Company all property owned by each such company
or in which any such company has an interest, including files, documents, data
and records (whether on paper or in tapes, disks, or other machine-readable
form), office equipment, credit cards and employee identification cards. The Key
Executive acknowledges that ▇▇▇▇ Atlantic or an applicable ▇▇▇▇ Atlantic Company
is the rightful owner of any programs, ideas, inventions, discoveries, copyright
material or trademarks which the Key Executive may have originated or developed,
or assisted in originating or developing, during the Key Executive's period of
employment with any ▇▇▇▇ Atlantic Company, where any such origination or
development involved the use of company time or resources, or the exercise of
the Key Executive's responsibilities for or on behalf of any such company. The
Key Executive shall at all times, both before and after termination of
employment, cooperate with ▇▇▇▇ Atlantic in executing and delivering documents
requested by any ▇▇▇▇ Atlantic Company, and taking any other actions, that are
necessary or requested by ▇▇▇▇ Atlantic to assist any ▇▇▇▇ Atlantic Company in
patenting, copyrighting or registering any programs, ideas, inventions,
discoveries, copyright material or trademarks, and to vest title thereto in the
applicable company.
10. Proprietary and Confidential Information. The Key Executive shall
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at all times preserve the confidentiality of all proprietary information and
trade secrets of any and all ▇▇▇▇ Atlantic Companies, except to the extent that
disclosure of such information is legally required.
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"Proprietary information" means information that has not been disclosed to the
public, and which is treated as confidential within the business of any ▇▇▇▇
Atlantic Company, 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 ▇▇▇▇ Atlantic Company's products or services; and other
confidential matters pertaining to or known by one or more ▇▇▇▇ Atlantic
Companies, including confidential information of a third party which the Key
Executive knows a ▇▇▇▇ Atlantic Company is bound to protect.
11. Nondisclosure. Unless and until the precise terms of this
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Agreement, and the precise amount of any payment eligible to be paid or actually
paid under this Agreement, are disclosed in writing to the public by any ▇▇▇▇
Atlantic Company, the Key Executive shall hold the terms of this Agreement and
the amount of any payment, benefit, credit, or right hereunder in strict
confidence, except that the Key Executive may disclose such details (i) on a
confidential basis to his spouse (if any), and to any financial counselor, tax
adviser or legal counsel retained by the Key Executive, or (ii) to the extent
such disclosure is legally required.
12. Assignment by ▇▇▇▇ Atlantic. The obligations of ▇▇▇▇ Atlantic
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hereunder shall be the obligations of any and all successors and assigns of ▇▇▇▇
Atlantic. ▇▇▇▇ Atlantic may assign this Agreement without the Key Executive's
consent to any company that acquires all or substantially all of the stock or
assets of ▇▇▇▇ Atlantic, or into which or with which ▇▇▇▇ Atlantic is merged or
consolidated. This Agreement may not be assigned by the Key Executive, and no
person other than the Key Executive (or the Key Executive's estate) may assert
the rights of the Key Executive under this Agreement.
13. Non-Benefit Bearing Payments. The amounts to be paid, provided or
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credited under Sections 4, 5, 6, and 7 of this Agreement shall not be treated as
compensation for purposes of computing or determining any additional benefit to
be paid, provided or credited under any savings plan, insurance plan, pension
plan, or other employee benefit plan maintained by any ▇▇▇▇ Atlantic Company.
14. Deferrals under IDP. Amounts otherwise payable to the Key Executive
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under Section 5 and 6 of this Agreement may be deferred under the IDP or any
successor plan, but only if and to the extent that a valid deferral election is
in place and deferral of such amounts is permitted under the terms of the IDP or
successor plan.
15. Forfeiture of IDP Amounts. The Key Executive acknowledges that if
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he breaches Section 8 (Non-Compete/No Solicitation) of this Agreement or engages
in serious misconduct that is contrary to written policies of ▇▇▇▇ Atlantic and
is harmful to any ▇▇▇▇ Atlantic Company or its reputation, he may forfeit any
balance remaining in any Company Contribution sub-account contained within his
account under the IDP.
16. Waiver. Failure to insist upon strict compliance with any of the
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terms, covenants or conditions of this Agreement shall not be deemed a waiver of
such term, covenant or condition, nor shall any waiver or relinquishment of any
right or power hereunder at any one or
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Employment Agreement Page 9 ▇▇▇▇▇▇▇▇▇ ▇. Good
more times be deemed a waiver or relinquishment of such right or power at any
other time or times.
17. Additional Remedies. In addition to any other rights or remedies,
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whether legal, equitable or otherwise, which each of the parties may have, the
Key Executive acknowledges that Sections 8 (Non-Compete/No Solicitation), 9
(Return of Property), 10 (Proprietary and Confidential Information), and 11
(Nondisclosure) of this Agreement are essential to the continued good will and
profitability of ▇▇▇▇ Atlantic and further acknowledges that the application and
operation thereof shall not involve a substantial hardship upon the Key
Executive's future livelihood. The parties hereto further recognize that
irreparable damage to ▇▇▇▇ Atlantic will result in the event that these sections
of the Agreement are not specifically enforced and that monetary damages will
not adequately protect ▇▇▇▇ Atlantic from a breach of these sections of the
Agreement. If any dispute arises concerning the violation by the Key Executive
of these sections of the Agreement, the parties hereto agree that an injunction
may be issued restraining such violation pending the determination of such
controversy, and no bond or other security may be required in connection
therewith.
18. Reformation and Severability. The Key Executive and ▇▇▇▇ Atlantic
----------------------------
agree that the agreements contained herein and within the Release shall each
constitute a separate agreement independently supported by good and adequate
consideration, and shall each be severable from the other provisions of the
Agreement and the Release. If an arbitrator or court of competent jurisdiction
determines that any term, provision or portion of this Agreement or the Release
is void, illegal or unenforceable, the other terms, provisions and portions of
this Agreement or the Release shall remain in full force and effect and the
terms, provisions and portions that are determined to be void, illegal or
unenforceable shall either be limited so that they shall remain in effect to the
extent permissible by law, or such arbitrator or court shall substitute, to the
extent enforceable, provisions similar thereto or other provisions, so as to
provide to ▇▇▇▇ Atlantic, to the fullest extent permitted by applicable law, the
benefits intended by this Agreement and the Release. If ▇▇▇▇ Atlantic's
Independent Certified Public Accountants determine that Section 6(d) of this
Agreement, in whole or in part, prevents ▇▇▇▇ Atlantic from complying with the
provisions of Section 7.16 of the Definitive Agreement, then the Key Executive
agrees to amend Section 6(d) of this Agreement to the extent necessary to permit
compliance with such Section 7.16.
19. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if delivered by hand or
messenger, transmitted by telex or telegram or mailed by registered or certified
mail, return receipt requested and postage prepaid, as follows:
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Employment Agreement Page 10 ▇▇▇▇▇▇▇▇▇ ▇. Good
(a) If to ▇▇▇▇ Atlantic, to:
▇▇▇▇ Atlantic Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Executive Vice President
Human Resources
(b) If to the Key Executive, to:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
or to such other person or address as either of the parties shall hereafter
designate to the other from time to time by similar notice.
20. Arbitration. Any dispute arising out of or relating to this
-----------
Agreement, except any dispute arising out of or relating to Sections 8 through
11 of this Agreement, shall be settled by final and binding arbitration, which
shall be the exclusive means of resolving any such dispute, and the parties
specifically waive all rights to pursue any other remedy, recourse or relief.
With respect to disputes by ▇▇▇▇ Atlantic arising out of or relating to Sections
8 through 11 of this Agreement, ▇▇▇▇ Atlantic has retained all its rights to
legal and equitable recourse and relief, including but not limited to injunctive
relief, as referred to in Section 17 of this Agreement. Notice of the existence
of a dispute which a party wishes to have resolved by arbitration shall be
provided pursuant to Section 20 of this Agreement. The arbitration shall be
expedited and conducted in New York, New York pursuant to the Center for Public
Resources ("CPR") Rules for Non-Administered Arbitration of Employment Disputes
in effect at the time of notice of the dispute before one neutral arbitrator
appointed by CPR from the CPR Panel of Neutrals unless the parties mutually
agree to the appointment of a different neutral arbitrator. The arbitration
shall be governed by the United States Arbitration Act, 9 U.S.C. Sections 1-16,
and judgment upon the award rendered by the arbitration may be entered by any
court having jurisdiction. The finding of the arbitrator may not change the
express terms of this Agreement and shall be consistent with the arbitrator's
understanding of the findings a court of proper jurisdiction would make in
applying the applicable law to the facts underlying the dispute. In no event
whatsoever shall such an arbitration award include any award of damages other
than the amounts in controversy under this Agreement. The parties waive the
right to recover, in such arbitration, punitive damages.
21. Governing Law. This Agreement shall be construed and enforced in
-------------
accordance with the laws of the State of New York.
22. Entire Agreement. Except for the terms of other compensation and
----------------
benefit plans in which the Key Executive participates, this Agreement shall set
forth the entire understanding of ▇▇▇▇ Atlantic and the Key Executive and shall
supersede all prior agreements and communications, whether oral or written,
between ▇▇▇▇ Atlantic and the Key Executive including, without limitation, the
Prior Agreement. This Agreement shall not be modified except by written
agreement of the Key Executive and ▇▇▇▇ Atlantic.
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Employment Agreement Page 11 ▇▇▇▇▇▇▇▇▇ ▇. Good
23. Tax Withholding. Any payment made pursuant to this Agreement will
---------------
be subject to applicable withholding taxes under federal, state and local law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first set forth above.
▇▇▇▇ ATLANTIC CORPORATION
By: _______________________
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Chief Executive Officer
THE KEY EXECUTIVE
By: _______________________
▇▇▇▇▇▇▇▇▇ ▇. Good
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EXHIBIT A
---------
THIS RELEASE (the "Release") is entered into by _____________________
(the "Key Executive"), for the benefit of ▇▇▇▇ ATLANTIC CORPORATION (the
"Company"), and all companies, and their officers, directors and employees,
which are affiliated with the Company or in which the Company owns a substantial
economic interest, and any benefit plan maintained by any ▇▇▇▇ Atlantic Company
(or any plan administrator of any such plan). Capitalized terms in this document
which are not otherwise defined herein shall have the respective meanings
assigned to them in the Employment Agreement between the Company and the Key
Executive, dated ____________, _____ (the "Agreement").
WHEREAS, the Key Executive has separated from service with the Key
Executive's employing company (the "Employer") on __________ , _____ (the
"Separation Date") pursuant to the terms of the Agreement, and the Key Executive
wishes to execute this Release as contemplated under the terms of the Agreement.
NOW, THEREFORE, the Key Executive affirms as follows:
1. The Key Executive hereby waives any and all claims which the Key
Executive might have against any ▇▇▇▇ Atlantic Company, and any benefit plan
maintained by any ▇▇▇▇ Atlantic Company (or any plan administrator of any such
plan), for salary payments, vacation pay, incentives, bonuses, or other
remuneration or employee benefits of any kind, with the exception of any
obligations of the Company or Employer arising after the Separation Date under
Sections 5 or 6 of the Agreement.
2. Except as provided in Section 1 hereof, the Key Executive hereby
voluntarily releases and discharges each and every ▇▇▇▇ Atlantic Company and
their successors and assigns, and the directors, officers, employees, and agents
of each of them, and any benefit plan maintained by any ▇▇▇▇ Atlantic Company
(or any plan administrator of any such plan), of and from any and all debts,
obligations, claims, demands, judgments or causes of action of any kind
whatsoever, known or unknown, in tort, contract, by statute or on any other
basis, for equitable relief, compensatory, punitive or other damages, expenses
(including attorneys' fees), reimbursements or costs of any kind which the Key
Executive might have or assert against any of said entities or persons as of the
Separation Date by reason of the Key Executive's employment by any ▇▇▇▇ Atlantic
Company or the termination of said employment, and all circumstances related
thereto, including but not limited to, any and all claims, demands, rights and
causes of action, including those which might arise out of allegations relating
to a claimed breach of an alleged oral or written employment contract, or
relating to purported employment discrimination or civil rights violations, such
as, but not limited to, those arising under Title VII of the Civil Rights Act of
1964 (42 U.S.C. Section 2000e et seq.), the Civil Rights Acts of 1866 and 1871
(42 U.S.C. Sections 1981 and 1983), Executive Order 11246, as amended, the Age
Discrimination in Employment Act of 1967, as amended (29 U.S.C. Section 621 et
seq.), the Equal Pay Act of 1963 (29 U.S.C. Section 206(d)(1)), the
Rehabilitation Act of 1973 (29 U.S.C. Sections 701-794), the Civil Rights Act of
1991, the Americans with Disabilities Act, the Employee Retirement Income
Security Act ("ERISA") or any other applicable federal, state or local
employment discrimination statute or ordinance.
3. The Key Executive hereby reaffirms all covenants and promises given
by the Key Executive under the Agreement, and all other terms and conditions of
the Agreement, in all respects.
4. Should any provision of this Release be declared or be determined by
any court to be illegal or invalid, the validity of the remaining parts, terms
or provisions shall not be affected thereby, and said illegal or invalid part,
term or provision shall be deemed not to be a part of this Release.
STATEMENT BY THE KEY EXECUTIVE WHO IS SIGNING BELOW: THE COMPANY HAS
---------------------------------------------------
ADVISED ME IN WRITING TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
RELEASE. THE COMPANY HAS FULFILLED ITS DUTIES TO ME UNDER THE OLDER WORKERS
BENEFITS PROTECTION ACT, AND I ACKNOWLEDGE THAT THIS RELEASE IS LEGALLY
ENFORCEABLE BY THE COMPANY. I HAVE CAREFULLY READ AND FULLY UNDERSTAND THE
PROVISIONS OF THIS RELEASE AND HAVE HAD SUFFICIENT TIME AND OPPORTUNITY (OVER A
PERIOD OF SUBSTANTIALLY MORE THAN 21 DAYS) TO CONSULT WITH MY PERSONAL TAX,
FINANCIAL AND LEGAL ADVISORS PRIOR TO EXECUTING THIS DOCUMENT, AND I INTEND TO
BE LEGALLY BOUND BY ITS TERMS. I UNDERSTAND THAT I MAY REVOKE THIS RELEASE
WITHIN SEVEN (7) DAYS FOLLOWING MY SIGNING, AND THIS RELEASE WILL NOT BECOME
ENFORCEABLE OR EFFECTIVE UNTIL THAT SEVEN-DAY PERIOD HAS EXPIRED.
THE UNDERSIGNED, intending to be legally bound, has executed this
Release as of the ___ day of _________, _____, that being the Key Executive's
Separation Date.
THE KEY EXECUTIVE
Signed:
-----------------------------
THIS IS A RELEASE
READ CAREFULLY BEFORE SIGNING
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EXHIBIT B
---------
Determination of Gross-Up Payment. In the event that any payment or
---------------------------------
benefit received or to be received by the Key Executive pursuant to the terms of
the Agreement (the "Contract Payments") or of any other plan, arrangement or
agreement of any ▇▇▇▇ Atlantic Company ("Other Payments" and, together with the
Contract Payments, the "Payments") would be subject to the excise tax (the
"Excise Tax") imposed by section 4999 of the Internal Revenue Code (the "Code")
as determined in accordance with this paragraph, ▇▇▇▇ Atlantic shall pay to the
Key Executive, at the time specified below, an additional amount (the "Gross-Up
Payment") such that the net amount retained by the Key Executive, after
deduction of the Excise Tax on Payments and any federal, state and local income
tax and the Excise Tax upon the Gross-Up Payment, and any interest, penalties or
additions to tax payable by the Key Executive with respect thereto, shall be
equal to the total present value (using the applicable federal rate (as defined
in Section 1274(d) of the Code) in such calculation) of the Payments at the time
such Payments are to be made. For purposes of determining whether any of the
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(i) the total amount of the Payments shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, except to the extent that, in the written opinion
of independent counsel selected by ▇▇▇▇ Atlantic and reasonably acceptable to
the Key Executive ("Independent Counsel"), a Payment (in whole or in part) does
not constitute a "parachute payment" within the meaning of section 280G(b)(2) of
the Code, or such "excess parachute payments" (in whole or in part) are not
subject to the Excise Tax; (ii) the amount of the Payments that shall be treated
as subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Payments or (B) the amount of "excess parachute payments" within
the meaning of section 280G(b)(1) of the Code (after applying clause (i)
hereof); and (iii) the value of any noncash benefits or any deferred payment or
benefit shall be determined by Independent Counsel in accordance with the
principles of sections 280G(d)(3) and (4) of the Code. For purposes of
determining the amount of the Gross-Up Payment, the Key Executive shall be
deemed to pay federal income taxes at the highest marginal rates of federal
income taxation applicable to individuals in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the highest
marginal rates of taxation applicable to individuals as are in effect in the
state and locality of the Key Executive's residence in the calendar year in
which the Gross-Up Payment is to be made, net of the maximum reduction in
federal income taxes that can be obtained from deduction of such state and local
taxes, taking into account any limitations applicable to individuals subject to
federal income tax at the highest marginal rates.
Timing of Gross-Up Payment. The Gross-Up Payments provided for in this
--------------------------
Exhibit B shall be made upon the earlier of (i) the payment to the Key Executive
of any Payment or (ii) the imposition upon the Key Executive or payment by the
Key Executive of any Excise Tax.
Adjustments to Gross-Up Payment. If it is established pursuant to a
-------------------------------
final determination of a court or an Internal Revenue Service proceeding or the
written opinion of Independent Counsel that the Excise Tax is less than the
amount previously taken into account hereunder, the Key Executive shall repay to
▇▇▇▇ Atlantic within thirty (30) days of
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Exhibits to Employment Agreement Page 15 ▇▇▇▇▇▇▇▇▇ ▇. Good
the Key Executive's receipt of notice of such final determination or opinion the
portion of the Gross-Up Payment attributable to such reduction (plus the portion
of the Gross-Up Payment attributable to the Excise Tax and federal, state and
local income tax imposed on the Gross-Up Payment being repaid by the Key
Executive if such repayment results in a reduction in Excise Tax or a federal,
state and local income tax deduction) plus any interest received by the Key
Executive on the amount of such repayment, provided, however, that if any such
amount has been paid by the Key Executive as an Excise Tax or other tax, the Key
Executive shall cooperate with ▇▇▇▇ Atlantic in seeking a refund of any tax
overpayments, and shall not be required to make repayments to ▇▇▇▇ Atlantic
until the overpaid taxes and interest thereon are refunded to the Key Executive.
If it is established pursuant to a final determination of a court or an Internal
Revenue Service proceeding or the written opinion of Independent Counsel that
the Excise Tax exceeds the amount taken into account hereunder (including by
reason of any payment the existence or amount of which cannot be determined at
the time of the Gross-Up Payment), ▇▇▇▇ Atlantic shall make an additional
Gross-Up Payment in respect of such excess within thirty (30) days of ▇▇▇▇
Atlantic's receipt of notice of such final determination or opinion.
Change in Law or Interpretation. In the event of any change in, or
-------------------------------
further interpretation of, sections 280G or 4999 of the Code and the regulations
promulgated thereunder, the Key Executive shall be entitled, by written notice
to ▇▇▇▇ Atlantic, to request a written opinion of Independent Counsel regarding
the application of such change to any of the foregoing, and ▇▇▇▇ Atlantic shall
use its best efforts to cause such opinion to be rendered as promptly as
practicable. All fees and expenses of Independent Counsel incurred in connection
with this Exhibit B shall be borne by ▇▇▇▇ Atlantic.
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