Employment Agreement - American Telephone and Telegraph Co., NCR Corp. and John L. Giering
EMPLOYMENT AGREEMENT
This Agreement, dated as of September 23, 1991, by and among the
American Telephone and Telegraph Company, a New York corporation (the
"Company"), NCR corporation, a Maryland corporation ("NCR"), and John L.
Giering, whose residence address is 6477 Kings Grant Passage, Dayton, Ohio 45459
("Employee").
WHEREAS, the shareholders of NCR have approved the merger (the
"Merger") of NCR and a subsidiary of Company on September 13, 1991 (the "Merger
Date") and Company intends to continue the corporate existence of NCR as a
wholly owned subsidiary of the Company; and
WHEREAS, prior to the Merger Date, and on the date hereof, Employee
was and is employed as Senior Vice President, Finance and Administration, of
NCR; and
WHEREAS, the Company has offered and Employee has accepted employment
as the Senior Vice President, Finance and Administration of NCR, on the terms
and conditions hereinafter provided,
NOW THEREFORE, for and in consideration of the foregoing premises and
the mutual promises and agreements hereinafter contained, Company, NCR and
Employee do hereby agree as follows:
1. Employment. Subject to the provisions set forth elsewhere in this Agreement,
the Company hereby employs Employee and Employee accepts such employment as
Senior Vice President, Finance and Administration of NCR for the term set forth
in Section 2 of this Agreement. Employee represents and warrants that there are
no agreements or arrangements, whether written or oral, in effect which would
prevent him from rendering exclusive services to NCR during the term hereof.
Such employment shall be upon the terms and conditions hereinafter contained.
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2. Term of Agreement. The term of employment hereunder shall commence on the
date of this Agreement and shall end December 31, 1996. Employment thereafter
shall be at the will of Company and Employee respectively or upon such other
terms and conditions as Employee and Company may agree upon the future in
writing.
3. Employee's Compensation and Benefits.
a. Base Salary. Company agrees to cause NCR to pay and NCR agrees to
pay and Employee agrees to accept, for services to be rendered hereunder and
during the term of this Agreement an annual initial base salary of not less than
$242,000 per year, payable in installments on a monthly or other periodic basis
in accordance with the prevailing payroll practice applicable to a Senior
Manager of NCR. Such initial base salary shall be the Employee's salary until
December 31, 1992, unless increased prior thereto with the approval of Company.
During the term hereof, Employee's salary shall be increased, and never
decreased, annually thereafter commencing on January 1, 1993, as approved by the
Company. The annual initial base salary is predicated upon an annual standard
maximum rate for Employee's position of $277,526 per year, which shall also be
increased annually and never decreased, at the same time as the aforesaid salary
increases, subject to approval by the Company.
b. Perquisites. During the term of this Agreement and subject to the
conditions herein, there shall be provided to Employee: (i) the perquisites of
employment provided to a Senior Manager of NCR, but in no event shall such
perquisites be less in amount or kind than those provided immediately prior to
the Merger Date; (ii) the Company's programs of financial counseling on the same
basis as those benefits are provided to Senior Managers of the Company,
provided, however, that Company agrees to permit Employee to use his own
financial advisor (if not one of those specified under Company's counseling
program) at the same dollar amount and tax gross-up coverage as that provided
for under the Company's financial counseling program; and (iii) reimbursement
for reasonable and necessary business
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expenses incurred in connection with his employment in accordance with employee
business expense practices applicable to a Senior Manager of NCR. The vacation
policy or senior management ground transportation program provided to a Senior
Manager of Company during the term hereof may also be provided to Employee in
the discretion of the Chief Executive Office of NCR.
c. Benefits. Employee shall be entitled to coverage under, or benefits
in accordance with, those employee and senior management benefit plans and
programs as are made available or which may subsequently become applicable to
Senior Managers of NCR. NCR and Company jointly and severally consent and agree
that immediately upon execution of this Agreement they shall cause to be
executed by a duly authorized officer of NCR, an amendment to the SERP
Agreement, in the form attached hereto as Exhibit A. The SERP as so amended is
attached hereto and made a part hereof as Exhibit B. In the event Amendments are
made to the SERP during the term hereof or thereafter which would yield, upon
Employee's retirement a pension benefit which is less than the benefit which
would have been provided by the SERP in the form of the SERP attached hereto as
Exhibit B, then in such event, Employee's pension entitlement will be calculated
as provided under the SERP attached as Exhibit B.
d. Incentive Plans. Exhibits C and D attached hereto and made a part
hereof are copies or descriptions of NCR's annual incentive compensation plan
(the "Annual Plan") and long-term incentive compensation plan (the "LTI Plan")
respectively, to be in effect and in which Employee will participate, for year
1992 and subsequent years during the term hereof. Employee's target bonus
opportunity under the Annual Plan for 1992 and subsequent years during the term
hereof, shall be not less than 50% of the greater of Employee's annual salary or
standard maximum rate for the year to which such opportunity relates (the
"Target Annual Bonus Opportunity") and will be paid to Employee on or before
March 31 of the next succeeding year. Employee's bonus under the Annual Plan for
1992 will not be less in amount than Employee's Target Annual Bonus Opportunity
for 1992. Employee's target bonus opportunity (the "Target LTI Bonus
Opportunity") under the LTI Plan for the performance cycle beginning in 1992 and
subsequent cycles beginning during the term hereof shall be not less than 50% of
Employee's annual
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salary in effect for the year in which awards under such Plan are determined.
Bonuses under the LTI Plan will be paid no later than ninety (90) days after the
end of each performance cycle under the Plan, which cycles shall be 3-year
performance cycles. The first 3-year performance cycle bonus payable under the
LTI Plan will be for the cycle beginning in 1992 and ending in 1994. Employee
will also participate in a transitional program under the LTI Plan and will be
granted performance unit grants thereunder for the one year performance cycle
January 1, 1992 - December 31, 1992 and for the two year performance cycle
January 1, 1992 - December 31, 1993. Such grants shall provide Employee with a
target bonus opportunity for each of such cycles equal to the Target LTI Bonus
Opportunity.
e. Stock Options. In 1992 and for each year thereafter during the term
of this Agreement, Employee will receive AT&T Stock Options ("Stock Options")
under the Company's 1987 Long Term Incentive Program and Company hereby
represents and warrants that such awards have been approved by the Compensation
Committee. The number of such Stock Options will never be less than the number
determined by dividing the AT&T share price at the time such awards are
determined into 250% of Employee's then current, annual standard maximum rate.
All other terms and conditions applicable to such Option will be no less
favorable than those applicable to a Senior Manager of NCR as in effect
immediately prior to the Merger Date or, during the term hereof to the extent
made more favorable during such term. In addition, the parties acknowledge that
the Company has commissioned a study by Frederic W. Cook & Co. to determine
whether it would be appropriate to make adjustments to the formula for awarding
Stock Options to employees of NCR in consideration of the Merger. In the event
that such adjustments are made, the number and dollar value of Stock Options
granted to Employee following such adjustments shall be sufficient to maintain
the level of Employee's participation as to both number and dollar value of
Stock Options relative to the level, prior to the Merger Date, of participation
of other recipients of stock options under NCR Stock Option Plans as of the May
1991 grant of such options. Each stock option agreement for Stock Options
hereunder shall provide that upon termination of employment of Employee other
than for Cause during the term hereof or thereafter, the Stock Options
referenced therein shall become immediately exercisable regardless of when
granted and that upon such
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termination of employment Employee will be deemed to be, and will be treated as,
a retiree under such agreements and/or the applicable Stock Option Plan to
which such agreement relates.
f. Assignment to Company or Affiliate Company. In the event that
Employee shall at Company's request cease to be assigned to NCR and become
assigned to or employed by Company or an affiliated company of Company other
than NCR, unless Employee otherwise consents in writing, such assignment shall
be a promotion to a position with a higher standard maximum rate and Employee
shall receive an increase in compensation appropriate to the new position and be
entitled to all the benefits and perquisites offered to, and shall otherwise be
treated in all respects as, a Senior Manager of the Company.
g. Post-Expiration or Termination Bonus Payments. Upon termination of
the employment of Employee other than for Cause during the term hereof or
thereafter, the amount of all bonuses for years or performance cycles beginning
prior to the termination of Employee's employment, whether for all or a part of
any such years or performance cycles, shall be paid to Employee on the same
basis as if Employee had retired under the Plans providing for such bonuses at
such termination.
4. Special Sign-On Bonus.
a. As of the date of this Agreement and subject to the terms
hereunder, the Company shall credit on its books of account (the "Record
Account") the sum of Two Million Two Hundred Seventy Five Thousand Dollars
($2,275,000), and such Record Account shall be increased to reflect the
crediting of interest, at the rate set forth below, from the first day following
the date of this Agreement through the earlier of December 31, 1996 or the
Termination Date. The interest will be calculated and compounded quarterly and
credited to the Record Account as of the end of each calender quarter and at the
Termination Date. The quarterly rate of interest applied for calendar quarters
ending in the first, second and third years of the term of this Agreement shall
equal one-quarter (1/4) of the sum of (i) the average
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10-Year Treasury Note rate for the previous quarter plus (ii) three (3%)
percent. The interest credited for calendar quarters beginning on and after the
third anniversary of the date of this Agreement during the remaining term of the
Agreement shall equal one-quarter (1/4) of the sum of (i) the average 10-year
Treasury Note rate for the previous quarter plus (ii) five (5%) percent.
Employee shall be entitled to receive on an ongoing basis semi-annual reports
from Company detailing the balance in his Record Account during the term hereof.
b. Subject to the provisions of Section 8 below, the outstanding
balance in the Record Account of Employee, including interest, through the
earlier of December 31, 1996 or the Termination Date of Employee's employment,
shall be paid in a single lump sum within 45 business days following the earlier
of December 31, 1996 or Employee's Termination Date.
5. Powers and Duties. The Employee shall devote his full business time,
interests and abilities to the performance of his duties under this Agreement,
it being understood in connection therewith that he may, in his discretion and
subject to not interfering with his duties and responsibilities hereunder,
devote time to civic, public and professional activities and may serve as a
Director of other business corporations not engaged in competition with the
Company or any subsidiary or affiliate of the Company; provided, however, that
he shall not accept directorships on more than three boards of other business
corporations; and provided, further, that for purposes of the immediately
preceding clause, directorships on the boards of two or more companies with at
least 50% common ownership shall count as a single corporation.
6. Operation of Agreement. Notwithstanding any other term or provision to the
contrary, all rights, benefits and entitlements available under and in
accordance with the terms of this Agreement, except as otherwise provided in
Sections 3(e), 3(g), 4 and 8, are contingent and dependent upon Employee
maintaining and continuing employment as a Senior Manager of NCR, Company or an
affiliate thereof.
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7. Restrictive Covenant Against Competition. In the event the employment of the
Employee shall be terminated in a case where the provisions of Section 8(b) or
the second sentence of Section 8(c) of this Agreement shall apply, then for a
period of twenty-four (24) months thereafter he shall not, without the prior
written consent of the Company, be employed by, become associated with, render
service to, or own an interest in (except as a holder of securities of an issuer
whose securities are publicly traded, and then only to the extent of owning not
more than 1% of the issued and outstanding equity securities of such issuer) any
business that is competitive with NCR or any subsidiary thereof or any business
in which NCR or any subsidiary thereof has 50% or more voting control nor shall
Employee recruit, solicit or induce, or attempt to induce, any "exempt" employee
of Company or NCR to terminate their employment with or otherwise cease their
relationship with Company or NCR (an activity described in this sentence is
referred to hereinafter as "Competitive Activity"); provided, however, that in
the event that the Employee's employment was terminated by the Company without
Cause or by the Employee with Good Reason, if it is determined that the Employee
has engaged in Competitive Activity during such 24-month period, the Employee
shall forfeit, as of the date such Activity commenced, any payments and benefits
provided for under the second sentence of Section 8(b) hereof otherwise payable
after that date and the Company, NCR and their affiliates shall have no other
remedy, except any remedy available at equity, against Employee with respect to
such Competitive Activity. In the event Employee should be assigned as a Senior
Manager of the Company for six (6) months or more to Company or an affiliate
company of Company other than NCR, then Employee agrees that wherever the term
"NCR" is used in the preceding sentence, there shall also be deemed added the
name of Company or the affiliated company, as applicable. If any restriction set
forth in this Section 7 is found by any arbitrator or court of competent
jurisdiction to be unenforceable because it extends for too long a period of
time or over too great a range of activities or in too broad a geographic area,
it shall be interpreted to extend only over the maximum period of time, range of
activities or geographic areas as to which it may be enforceable in that
jurisdiction.
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8. Termination Provisions.
a. If Employee's employment is terminated for any reason prior to the
expiration of this Agreement and subject to the terms and conditions of Section
8(b) and (c), below, (i) his annual base salary (as provided in Section 3(a),
above) shall cease as of the Termination Date, (ii) his incentive bonus awards
shall be payable in accordance with the terms and conditions of Section 3(g)
above and (iii) no further grants of bonuses or Stock Options (as provided in
Section 3(e), above) shall be made as of the Termination Date. Unexercised Stock
Options will be treated in accordance with the provisions of Section 3(e).
b. In the event of Employee's (i) death, (ii) termination on account of
Disability, (iii) termination on account of Severe Hardship, (iv) termination
for Good Reason or (v) termination initiated by the Company for any reason other
than Cause, the then outstanding balance in the Record Account of the Employee,
including interest credited to the Termination Date, will be paid to Employee
(or his designated beneficiary) as described in Section 8(e) below. Such payment
shall be considered a "severance payment to the Executive by NCR or subsidiary
(as appropriate) pursuant to any statute, regulation, settlement agreement or
other government requirement" for purposes of Other NCR Plans and Agreements. In
addition to the payment of the Sign-On Bonus balance referred to in the
preceding sentence, in the event of Employee's termination for Good Reason or
termination initiated by the Company for any reason other than Cause (x), an
amount equal to 200% of Employee's annual base salary in effect at such time
will be paid to Employee in 24 equal monthly installments commencing the month
after the Employee's Termination Date and (y) for a period of 18 months after
such Date, NCR or Company shall arrange to provide the Employee with life
insurance, group medical, dental and health benefits substantially similar to
those which Employee is receiving or entitled to receive immediately prior to
such Date and shall pay Employee not later than the last day of such 18-month
period an amount equal to the cost of such benefits which Employee would incur
if he had to purchase them on his own covering the six-month period thereafter;
provided, however, that Company and Employee shall
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share the cost of such benefits in the same proportions as exist immediately
prior to the Termination Date. A gross-up payment for income taxes (federal,
state and local) shall be made by Company to Employee respecting the benefits
and payments provided for in clause (y) hereof in accordance with the Company's
policies on grossing up Senior Managers of Company. Neither the payment of all
or any portion of the outstanding balance in the Employee's Record Account nor
the continuation of salary and benefits provided for in clauses (x) and (y) of
this Section 8(b) shall be treated as a compensation plan or a payment under a
compensation plan for purposes of the Other NCR Plans and Agreements.
c. Amounts credited to Employee's Record Account pursuant to the
Special Sign-On Bonus in Section 4 above, including interest credited thereon,
shall be forfeited in the event of (i) any termination of employment initiated
by Employee other than for Good Reason, death, Disability or on account of
Severe Hardship during the first three years immediately following the Merger
Date or (ii) Employee's termination of employment for Cause. Notwithstanding
subsection (i) of the immediately preceding sentence, (A) in the event of any
termination of employment initiated by Employee other than for Good Reason,
death, Disability or on account of Severe Hardship during the period immediately
following the last day of the three-year period after the Merger Date and up to
the fourth anniversary of the date of this Agreement, 60% of the balance then in
the Employee's Record Account, including accrued interest as of the Termination
Date applicable to such termination, shall be paid to him in accordance with the
provisions of Section 4(b) and the other 40% of such amount shall be forever
cancelled and forfeited and (B) in the event of any such termination of
employment initiated by Employee other than for Good Reason, death, Disability
or on account of Severe Hardship after the fourth anniversary of the date of
this Agreement and thereafter prior to December 31, 1996, 80% of the balance
then in the Employee's Record Account, including accrued interest as of the
Termination Date applicable to such termination, shall be paid to him in
accordance with the provisions of Section 4(b) and the other 20% of such amount
shall be forever cancelled and forfeited.
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d. The Employee shall not be required to mitigate the amount of any
payment provided for in this Section 8 by seeking other employment or otherwise,
nor shall the amount of any payment, benefit or Stock Option entitlement
provided for in this Agreement be reduced by any compensation or benefit earned
by Employee as the result of employment by another employer or by retirement
benefits received under the SERP or otherwise after the Termination Date, except
as specifically provided in this Section 8 and except for the benefits referred
to in clause (y) of Section 8(b) to the extent a comparable benefit is actually
provided to Employee by a subsequent employer during the 18-month period
referred to in said clause (y).
e. Except as otherwise provided herein, any payments made pursuant to
this Section 8 shall be paid in a single lump sum within 45 business days
following Employee's Termination Date.
9. Certain Definitions. For purposes of this Agreement, the following
terms shall have the meanings provided herein.
a. Disability. For purposes of this Agreement, "Disability" shall mean
the inability of the Employee, because of bodily injury or disease, to perform
the duties of the Employee's regular occupation. Any question as to the
existence of a Disability upon which the Employee and Company cannot agree shall
be determined by a qualified independent physician mutually agreeable to the
Employee (or, if the Employee is unable to make such agreement, to any adult
member of the Employee's immediate family or the Employee's legal
representative), and Company. The determination of such physician made in
writing to Company, and to the Employee, shall be final and conclusive for all
purposes of this Agreement.
b. Severe Hardship. For purposes of this Agreement, events and
situations constituting "Severe Hardship" shall be determined in the judgment of
the Compensation Committee of the Company's Board of Directors.
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c. Cause. For purposes of this Agreement, "Cause" shall mean
Employee's conviction (including a plea of guilty) of a felony or a misdemeanor
applicable to, and involving, a crime of theft or dishonesty.
d. Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, without the Employee's express, written consent, of any of
the following circumstances:
(i) A reduction in the Employee's annual base salary of $242,000
per annum or his standard maximum of $277,526 or a reduction in future amounts
thereof, as increased during the term hereof, or a reduction in the Employee's
Target Annual or LTI Bonus Opportunities (not actual payout) or the failure to
make a stock option grant in any year to the Employee in accordance with the
provisions of Section 3(e) hereof;
(ii) A change in the principal place of the Employee's employment to
a location other than Dayton, Ohio, NCR World Headquarters, except for a change
to the Company's headquarters in Basking Ridge, New Jersey or a Company office
location in another part of northern New Jersey, provided that the relocation
policies applicable to Senior Managers of Company apply to such Employee in such
case and reasonable adjustments are made in compensation and/or benefits for any
increase in Employee's cost of living due to such change;
(iii) A material breach of this Agreement by Company; or
(iv) Any purported termination of the Employee's employment which is
not effected pursuant to a Notice of Termination satisfying the requirements of
Section 9(e) below. For purposes of this Agreement, no such purported
termination shall be effective except as constituting Good Reason.
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e. Notice of Termination. Any purported termination of the Employee's
employment by the Company or by the Employee shall be communicated by written
Notice of Termination to the other party hereto in accordance with Section 17
hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specific provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the provision
so indicated.
f. Termination Date. For purposes of this Agreement, "Termination
Date" shall mean:
(i) If the Employee's employment is terminated for Disability, by
the Company without Cause or by the Employee not for Good Reason, thirty (30)
days after Notice of Termination is given (provided that in the case of a
Disability termination Employee shall not have returned to the full time
performance of his duties during such thirty-day period); and
(ii) If the Employee's employment is terminated for any reason other
than by death, by the Company without Cause or by the Employee not for Good
Reason, the date specified in the Notice of Termination (which in the case of a
termination for Cause shall not be less than thirty (30) days and in the case of
a termination for Good Reason shall not be less than thirty (30) nor more than
sixty (60) days, respectively, from the date such Notice of Termination is
given); provided that in the case of termination for Cause by Company,
termination for Good Reason by Employee or a Disability Termination, if within
thirty (30) days after any Notice of Termination is given, the party receiving
such Notice notifies the other party that a dispute exists concerning the
grounds for termination, the Termination Date shall be the date on which the
dispute is finally determined, whether by mutual written agreement of the
parties or by a binding arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction (which is not appealable or the time
for appeal therefrom having expired and no appeal having been perfected);
provided further, that the Termination Date shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution
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of such dispute with reasonable diligence. Notwithstanding the pendency of any
such dispute, the Employee will continue to be paid his full compensation in
effect when the notice giving rise to the dispute was given (including, but not
limited to, base salary and incentive compensation) and to be a participant in
all benefits and perquisites in which the Employee was participating or which he
was enjoying when the Notice of Termination giving rise to the dispute was
given, until the earlier of the date the dispute is finally resolved in
accordance with this Section 9(f)(ii) or the expiration date of this Agreement.
Amounts paid under this Section 9(f)(ii) are in a addition to all other amounts
due under this Agreement and shall not be offset against or reduce any other
amounts due under Agreement or any Other NCR Plans and Agreements.
g. Senior Manager of NCR. For purposes of this Agreement, "Senior
Manager of NCR" shall mean an employee whose assigned "Hay Points" are in excess
of 3,000.
h. Senior Manager of Company. For purposes of this Agreement, "Senior
Manager of the Company" shall mean an employee whose assigned Hay Points are in
excess of 1,988 and who is determined to be within the Company's senior
management group by the Board of Directors of the Company or its Chairman.
i. Other NCR Plans and Agreements. For purpose of this Agreement,
"Other NCR Plans and Agreements" means other employee benefit and bonus plans in
which Employee is a participant and other written agreements between NCR and
Employee, including, without limitation, a letter agreement dated November 1,
1988, as amended to date, respecting certain severance payments and benefits,
stock option agreements under NCR Stock Option Plans which were assumed by the
Company pursuant to the Merger and an agreement under the NCR Corporation Senior
Executive Retirement, Death & Disability Plan, as amended to date (respectively,
the "SERP Agreement" and the "SERP") providing for payment to Employee of
certain supplemental pension benefits.
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10. Dispute Resolution. At the option of Employee or the Company, any dispute,
controversy, or question arising under, out of or relating to this Agreement or
the breach thereof, shall be referred for decision by arbitration in the State
of Ohio by a neutral arbitrator selected by the parties hereto. The proceeding
shall be governed by the Rules of the American Arbitration Association then in
effect or such rules last in effect (in the event such Association is no longer
in existence). If the parties are unable to agree upon such a neutral arbitrator
within thirty (30) days after written notice of a desire to submit the dispute,
controversy or question for decision as aforesaid, then either party may apply
to the American Arbitration Association for the appointment of a neutral
arbitrator, or if such Association is not then in existence or does not desire
to act in the matter, either party may apply to the appropriate state court for
the appointment of a neutral arbitrator to hear the parties and settle the
dispute, controversy or question, and such court is hereby authorized to make
such appointment. In the event that a dispute arising hereunder is submitted to
arbitration, the decision of the neutral arbitrator shall be final, conclusive
and binding on all interested persons and no action at law or in equity shall be
instituted or, if instituted, shall be further prosecuted by either party other
than to enforce the award of the neutral arbitrator. Notwithstanding the
foregoing, the Employee shall be entitled to seek judicial relief in the form of
specific performance of the right to be paid until the Termination Date during
the pendency of any dispute or controversy arising under or in connection with
this Agreement as provided in Section 9(f)(ii) hereof.
Whether or not Employee is successful in pursuing any claim or dispute
arising out of this Agreement, the Company shall pay all of the Employee's
attorneys' fees and costs and the compensation and expenses of any Arbitrator;
provided, however, that such attorney fees shall not be payable by Company in
the event Employee is unsuccessful and the Arbitrator, or any court in which the
litigation is filed, finds that the dispute or lawsuit is frivolous in nature or
was not brought in good faith. In any case, the Company shall bear its own costs
and attorneys fees.
11. Assignment.
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a. Employee. This Agreement is a personal contract and the rights and
interests of Employee hereunder may not be sold, transferred, assigned, pledged
or hypothecated by him.
b. Company. This Agreement shall inure to the benefit of and be
binding upon NCR, the Company, their respective successors and assigns,
including but not limited to, any subsidiary or affiliate of NCR or the Company
to which Employee may be employed or assigned, by or with the consent of the
Company. If Employee is assigned to or becomes employed by any subsidiary or
affiliate of NCR or the Company during the term of this Agreement, such
subsidiary or affiliate shall be considered to have been assigned all rights of
NCR and/or the Company and accepted all obligations of NCR and/or the Company
hereunder, but Company shall always remain primarily liable for all obligations
and liabilities to Employee under or arising out of this Agreement.
12. Taxes. It is understood that all payments and benefits provided under this
Agreement are subject to applicable withholding for FICA and for applicable
federal, state and local income (or similar) taxes.
13. Excise Tax and Gross-Up Provisions.
a. In the event that any payment or the value of any benefit received
or to be received by the Employee, pursuant to the terms of this Agreement or
any other plan, arrangement or agreement (including, without limitation, the
Other NCR Plans and Agreements), from the Company or NCR Corporation, their
successors or any person affiliated with any of them (a "Payment"), would be
subject to the excise tax (the "Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or any successor
provision or any similar provision of state and/or local law), the Company shall
pay to the Employee, at the time specified in Section 13(b) below, whether or
not the Employee remains employed by the Company at such time and whether or not
the Employee remained
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employed by the Company for the duration of this Agreement, an additional
amount (the "Gross-Up Payment") such that the net amount retained by the
Employee, prior to applicable FICA withholding and prior to any applicable
federal, state and local income tax withholding on such Payment, but after
deduction of (i) the Excise Tax on such Payment, (ii) any federal, state and
local tax and Excise Tax upon the payment provided for by this paragraph, and
(iii) any interest, penalties or additions to tax payable by the Employee with
respect to (i) and (ii), shall be equal to such Payment. For purposes of
determining the amount of the Gross-Up Payment, the Employee shall be deemed to
pay federal, state and local income taxes at the highest marginal rates
applicable to individual in the calendar year in which the Gross-Up Payment is
to be made and the reduction in federal income taxes resulting from the payment
of additional state and local income taxes shall be taken into account. Employee
shall not be entitled to receive a Gross-Up Payment under this Section 13(a)
with respect to any Payment with respect to which he receives a Gross-Up Payment
under the terms of any of the Other NCR Plans and Agreements.
b. The Gross-Up Payments provided for in paragraph (a) above shall be
made upon the earlier of (i) a certification to the Company by Price Waterhouse
or other tax advisor to Employee that the Employee is liable for Excise Tax with
respect to any Payment or (ii) the assessment upon the Employee or payment by
the Employee of any Excise Tax with respect to any Payment.
c. In the event that it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding that the
Excise Tax is less than the amount previously determined under Section 13(a),
Employee shall repay to the Company, at the time that such reduction in Excise
Tax is so finally determined, the difference between the Gross-Up Payment as
originally determined and the Gross-Up Payment that would have been determined
by taking into account the reduced Excise Tax, subject to adjustments such that
the Employee is in the same after-tax position as the Employee would have been
in under Section 13(a) had the Excise Tax been properly determined at the time
at which the Gross-Up Payment was made, plus interest on the amount of such
repayment at the rate provided in
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Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined, in the manner aforesaid, to exceed the amount previously determined
under Section 13(a), the Company shall make an additional Gross-Up Payment in
respect of such excess at the time that the amount of such excess is finally
determined.
14. Tax Rate Equalization Provisions. In the event that, due to changes in
applicable laws or regulations, the net amount retained by Employee of a payment
of all or a portion of the Employee's Record Account under Section 4(b), Section
8(b) or Section 8(c) of this Agreement (the "Sign-On Bonus Payment") after
taking into account all applicable federal, state or local income and employment
taxes, is less than the net amount Employee would have retained, after taking
into account all such taxes as in effect on the date of this Agreement and as if
the Sign-Up Bonus Payment had been paid on such date (the "1991 After-Tax
Payment"), the Company shall pay to Employee, at the time specified in Section
8(e) hereof, an additional amount (the "Tax Equalization") such that the net
amount retained by Employee, after deduction of all federal, state and local
income and employment taxes applicable to the Sign-On Bonus Payment and to the
Tax Equalization shall be equal to the 1991 After-Tax Payment.
15. Severability. If any provisions of this Agreement shall be invalid or
unenforceable, such invalidity or unenforceability shall not invalidate or
render unenforceable this entire Agreement, but rather this entire Agreement
shall be construed as if not containing the particular invalid or unenforceable
provision or provisions, and the rights and obligations of the parties shall be
construed and enforced accordingly.
16. Entire Agreement; Amendments. This Agreement comprises 19 pages and 19
Sections and includes Exhibits A through D, attached hereto. No amendments or
modifications to this Agreement may be made except in writing signed by the
Company, through its authorized representative, and Employee. Except as
otherwise provided in the second sentence of Section 8(b) of this Agreement,
this Agreement shall have no effect on and is unrelated to and mutually
exclusive from any other agreement
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between employee and either the Company or NCR. No provision of this Agreement
may be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing and signed by the Employee and the Company. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any conditions or provision of this Agreement to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one and the same instrument, and each fully
executed counterpart shall be deemed an original.
17. Governing Law. This Agreement shall be construed and enforced in accordance
with the laws of the State of Ohio, without reference to any applicable conflict
of law provisions.
18. Notices. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth on the first page of this Agreement, provided
that all notices to NCR or the Company shall be directed to the Company,
attention of the Senior Vice President -- Human Resources of the Company, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change address shall be effective
only upon receipt.
19. Survival. Upon the expiration or the termination, for any reason, of this
Agreement, the respective rights and obligations of the parties which are
intended by their terms to survive such expiration or termination, shall
survive.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
and the Company and NCR have affixed their corporate seals as of the day and
year first above written.
Company:
By: /s/ H. W. Burlingame
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H. W. Burlingame, Senior Vice President -- Human Resources
American Telephone & Telegraph Company
Attest:/s/ R. A. Maynes
-------------------------------------------------------- (Seal)
Date: 9/23/91
--------------------------------------------------------
Witnessed: /s/ S. J. Colon
----------------------------------------------------
Date: 9/23/91
--------------------------------------------------------
Employee:
/s/ J. L. Giering
---------------------------------------------------------------
Date: 9/23/91
--------------------------------------------------------
Witnessed: /s/ Nancy L. Livingston
----------------------------------------------------
Date: 9/23/91
--------------------------------------------------------
NCR: /s/
--------------------------------------------------------
Attest:/s/
-------------------------------------------------------- (Seal)
Date: 9/23/91
--------------------------------------------------------
Witnessed: /s/
----------------------------------------------------
Date: 9/23/91
--------------------------------------------------------
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