Employment Agreement - NCR Corp. and David Bearman
[LETTERHEAD OF NCR]
August 5, 1998 PERSONAL AND CONFIDENTIAL
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Mr. David Bearman
5350 Reserve Drive
Dublin, Ohio
43017
Dear David:
I am pleased to extend to you an offer of employment with NCR Corporation. The
following information confirms the details of our offer:
Job Title: Senior Vice President and Chief Financial Officer
Job Band: Band I
Reports to: Lars Nyberg, Chairman and CEO
Work Location: Dayton, Ohio
Effective Date: as mutually agreed
Annual Base Salary - Your base salary will be $400,000, commencing as of
your effective start date. You will be paid on a bi-weekly pay schedule,
one week in arrears. Your paycheck will be automatically deposited in the
bank of your choice via our convenient Easipay plan.
Sign-On Bonus - You will be extended a $300,000 gross sign-on bonus within
thirty days of your effective start date. All applicable taxes will be
withheld from this award. Your sign-on bonus will not be treated as
compensation for purposes of determining employee pensions and benefits.
Incentive Award - You will be eligible to participate in the Management
Incentive Plan (MIP) which provides year-end incentive awards based on the
success of NCR in meeting annual performance objectives. For 1998, you will
be eligible to receive a pro-rated MIP award based on the objectives
already established for your position, which are a profit measure (50%),
revenue growth (30%) and individual leadership measures (20%). For your
position, the targeted incentive opportunity for 1998 is 50% of your salary
and the maximum award is 100% of your salary. The incentive is payable in
March of the following year.
<PAGE>
David Bearman
August 5, 1998
page 2
Equity Awards-
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Stock Options - You will be eligible to participate in the NCR Management
Stock Option Program. You will receive an initial stock option grant, as of your
effective start date, for that number of whole shares of NCR common stock
determined by dividing $3,275,000 by the fair market value of one share of the
Company's common stock on your first date of employment. These options will be
subject to terms and conditions determined by the NCR Board of Directors. Future
grants are discretionary and set annually by the Board of Directors. These stock
options include a non-competition provision and vest as follows:
Initial Vesting Date - 1-year anniversary of start date - 1/3 of the grant
Next Vesting Date - 2-year anniversary of start date - 1/3 of the grant
Final Vesting Date - 3-year anniversary of start date - 1/3 of the grant
Restricted Stock - You will receive a special restricted stock grant, as of
your effective start date, of that number of whole shares of NCR common stock
determined by dividing $2,000,000 by the fair market value of one share of the
Company's common stock on your first date of employment. These shares will be
set up in a record account in your name with NCR's Transfer Agent and Stock
Registrar (Boston Equiserv), and will vest (become transferable) over four years
as follows:
Initial Vesting Date - 1-year anniversary of start date - 1/4 of awarded shares
Next Vesting Date - 2-year anniversary of start date - 1/4 of awarded shares
Next Vesting Date - 3-year anniversary of start date - 1/4 of awarded shares
Final Vesting Date - 4-year anniversary of start date - 1/4 of awarded shares
In addition, the restricted stock will vest in full in the event of a Company
initiated termination other than for "cause" (defined in the same manner as in
the NCR Change-in-Control Severance Plan for Executive Officers, which
definition is attached to this letter). The restricted stock will be subject to
other terms and conditions determined by the NCR Board of Directors, including a
non-competition provision.
Incentives in General- For an officer in your position, short and long-term
incentives at NCR currently take the form of the MIP and stock options. Since
these incentives are designed to address the conditions of an ever changing
marketplace, NCR cannot make any definitive representations concerning the
continuation of either program or the size of the individual awards. Although we
cannot make a commitment about future stock option awards, given past awards for
this position and current expectations, we would anticipate that the award of
stock options would have an approximate face value of $1.5 million. As I know
you appreciate, any actual award will be as finally determined by NCR's
Compensation Committee of the Board of Directors.
<PAGE>
David Bearman
August 5, 1998
page 3
Vacation - In recognition of your prior work experience, you will be
eligible for four weeks of paid vacation.
NCR Benefits - On your first day of employment with NCR, the company
provides you and your eligible dependents with the following core benefit
coverage at no cost:
NCR Health Care Coverage (80/20 Plan)
NCR Dental Care Coverage
Short-Term and Long-Term Disability Coverages
Life Insurance Coverage
Accidental Death and Dismemberment Insurance Coverage
As a new employee of NCR, you have the opportunity to design your own
personalized benefit program through Personal Choice, the company's
flexible benefits program. After your employment commences, you will
receive the NCR Benefits Information Package, and a Benefit representative
will meet with you to guide you through any questions you may have.
Additionally, you will be eligible to participate in the NCR Pension Plan,
the NCR Savings Plan (401k), and the NCR Stock Purchase Plan. The attached
Benefits Overview provides more information about NCR benefits.
Retirement - In addition to your participation in the NCR Pension Plan
(qualified plan), as a Band I employee, you will also participate in the
following nonqualified pension plans:
The Retirement Plan for Officers of NCR Corporation (SERP II)- The plan,
which is described in more detail in the attached summary, provides a
career average pension of 2.5% of the total of your base salary, and MIP
award, times your years of service as an Officer and less pension accrued
as an Officer in other NCR sponsored plans.
The NCR Mid-Career Hire Supplemental Pension Plan- This plan, described in
more detail in the attached summary, provides a pension supplement to make
up for lost pension that could result from not having a "full career" with
one company. This pension supplement is in addition to the SERP II
benefit.
Financial Counseling - You will be eligible to participate in a financial
counseling program provided through one of three consulting firms
designated by the Company. The Company will pay up to $8,000 annually for
financial planning, estate planning and tax preparation plus a gross-up for
the tax impact of this service. Further information on this program will be
provided separately.
Relocation - You will be eligible for relocation benefits under NCR's
Relocation Policy under Tier II Benefits. A copy of the NCR Relocation
Policy is enclosed.
<PAGE>
David Bearman
August 5, 1998
page 4
Change in Control - You will participate in NCR's current Change in
Control Severance Plan for Executive Officers. A copy of the plan is
included as an attachment to this letter.
This letter reflects the entire agreement regarding the terms and conditions of
your employment. Accordingly, it supersedes and completely replaces any prior
oral or 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 NCR 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. Also, this offer is contingent upon completion
of full reference checks.
David, we are enthusiastic about your contributions, experience and vision you
bring to NCR's Leadership Team. NCR is positioned well in our market to be
exceedingly successful and I personally would like to extend this opportunity to
be a part of my Leadership Team.
If you have any questions concerning the details of the appointment, please feel
free to contact me or Jon Hoak.
Sincerely,
/s/ Lars Nyberg
Lars Nyberg, Chairman & CEO
NCR Corporation
/s/ David Bearman August 5, 1998
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Agreed and Accepted Date
David Bearman
pc: Jon Hoak
W. Buiter
Attachments: Benefits Overview
Summary of SERP II
Summary of Mid-Career Hire Plan
NCR Relocation Policy
Definition of "Cause"
Change in Control Plan for Executive Officers