Employment Agreement - NCR Corp. and Lars Nyberg
July 15, 1999
Mr. Lars Nyberg
Chairman and Chief Executive Officer
NCR Corporation
Dear Lars:
Your strong and effective leadership during the last four years has successfully
changed NCR's direction, significantly improved its financial performance, and
implemented an organizational framework to execute a new and viable strategic
vision for the Company under the banner, "Transforming Transactions into
Relationships." While important progress has been made, the next several years
will be extremely important as the Company implements its new strategic vision
worldwide. Your continued presence at NCR during these years and the leadership
continuity you will provide will be critical to enhancing our operational
effectiveness, strengthening our organization, building on our momentum, and
maximizing shareholder value. In this context, the Board is confident that the
balance and competitive position of your total compensation package, including
base salary, annual incentive pay, benefits, and stock options (some of which
were provided by AT&T) will provide substantial incentive to increase
shareholder value. Therefore, the Board is pleased to renew your employment
agreement with NCR as Chairman and Chief Executive Officer through May 31, 2002,
with the following terms:
1. Salary, Incentive Pay and Options. Your 1999 base pay will be $1,000,000,
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paid to you in equal monthly amounts. In addition, your 1999 annual
incentive award under the Management Incentive Plan for Executive Officers
("MIP") will pay 100% of your base pay if the target objectives are met,
with a maximum potential award of 200% of base pay. Thus, if your MIP award
is at target, your total annual pay for 1999 will be $2,000,000, and if a
maximum MIP award is earned, your total annual cash compensation for 1999
will be $3,000,000. Your MIP award will be paid to you according to the MIP
Plan. Your annual base salary and MIP objectives will be reviewed annually
to determine whether they should be increased, based primarily on your
performance during the year against your objectives and competitive
benchmarking. Your management stock option grant will be determined each
year by the Board, taking into account your performance and competitive
market considerations, with an award opportunity of at least the 50th
percentile of NCR's peer group.
2. Benefits. You will continue to participate in NCR benefit plans applicable
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to executive officers, which currently include the NCR Pension Plan, the
Retirement Plan for Officers of NCR ("SERP II"), the NCR Savings Plan, the
NCR Employee Stock Purchase Plan, and the Group Benefits Plan for Active
Employees of NCR. Your split-dollar life insurance policies will continue
in effect.
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3. Change-in-Control Agreement. The Change-in-Control Agreement between you
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and NCR, effective January 1, 1997 (CIC Agreement), will remain in effect
through May 31, 2002.
4. Severance. If your employment with NCR is terminated involuntarily, except
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for Cause (as defined in the CIC Agreement), or voluntarily, due to Good
Reason (as defined in the CIC Agreement), and you are not entitled to
benefits under the CIC Agreement, you will be entitled to receive the
severance benefits described below, provided you execute a release of all
employment-related claims against the Company. If your employment with NCR
is terminated involuntarily, except for Cause, the Board shall notify you
in writing of the Company's intent to terminate, at least thirty (30)
calendar days prior to the effective date of such termination. If you
receive severance benefits pursuant to this letter, you will not be
eligible for benefits from the NCR Workforce Redeployment Plan.
The severance benefits consist of the following:
(a) The incentive pay under the MIP for the calendar year in which
termination occurs, at the greater of target for the year of
termination of employment, or the actual cash payment for the
preceding calendar year, pro-rated in 1/12 increments for the portion
of the calendar year prior to the last day of the month in which
termination of employment occurs, except that if termination of
employment occurs during 1999, the incentive pay under this
subparagraph (a) will not be prorated, but will be paid in full for
1999.
(b) A lump sum payment equal to your annual base pay, as in effect
on the date of termination of employment, that would be payable until
the later of May 31, 2002, or the end of the two-year period
beginning on the date of your termination of employment.
(c) A lump sum payment of two times the greater of (i) the target
MIP award for the calendar year in which termination occurs, or (ii)
the actual cash MIP award for the preceding calendar year.
(d) Continuation of the health care coverage for you and your
eligible dependents in effect at your termination of employment, at
the cost to you as paid by active employees, until the later of May
31, 2002, or the end of the two-year period beginning on the date of
your termination of employment.
(e) At the company's expense, life insurance and accidental death
and dismemberment coverage for you at two times base pay, until the
later of May 31, 2002, or the end of the two-year period beginning on
the date of your termination of employment.
(f) At the company's expense, continuation of executive financial
counseling through the calendar year following the year in which your
termination of employment occurs.
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Cash severance benefits described above will be paid within five (5)
working days of the effective termination date.
If you elect to voluntarily terminate your employment (other than for Good
Reason as defined in the CIC Agreement), you will receive accrued but
unpaid salary and bonus through the termination date, but not the severance
benefits listed in this Paragraph 4. All rights with respect to your
outstanding incentive awards, including annual and long-term incentives,
and health, welfare, and retirement benefits will be governed by the
applicable individual award agreements or company plan documents.
5. Non-Competition Agreement. By signing this Agreement, you agree that during
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your employment with NCR and for an eighteen (18) month period after
termination of employment for any reason, you will not yourself or through
others, without the prior written consent of the Compensation Committee,
(i) become an employee, proprietor, partner, become a greater than 3
percent shareholder, principal or agent of, or a consultant or advisor to,
any of NCR's direct, major competitors, or their subsidiaries or
affiliates, including: IBM, Sequent, CSC, Unisys, Hewlett Packard (HP), Sun
Microsystems, Oracle, Informix, Compaq, EDS, and Diebold; (ii) recruit,
hire, solicit or induce, or attempt to induce, any exempt employee of NCR
or its associated companies to terminate their employment with or otherwise
cease their relationship with NCR; (iii) canvass or solicit business in any
of the following product and service areas: point of sale systems, ATMs,
check issuing, optical scanning and imaging systems, and scalable data
warehousing with any then-current customer of NCR; or (iv) disclose to any
third party any NCR confidential, technical, marketing, business, financial
or other information not publicly available. If you breach any of the
provisions of this Paragraph 5, NCR, in addition to its other remedies,
will be released from all obligations it may have under Paragraph 4. The
provisions of this Paragraph 5 will survive termination and expiration of
this Agreement.
6. Agreement Term and Notice. The initial three (3) year period of this
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Agreement will expire May 31, 2002. Thereafter, this Agreement shall
automatically renew for successive one year terms. It is understood,
however, that either party may elect not to renew this Agreement for any
reason at the end of the initial three (3) year period, or at the end of
any successive year thereafter, by giving the other party written notice of
intent not to renew, delivered at least ninety (90) calendar days prior to
the end of the term. Absent an effective notice of an intent not to renew,
all terms and conditions of this Agreement shall continue in force for the
next term. In the event of an effective notice of intent not to renew, all
terms and conditions of this Agreement will nevertheless continue in force
until the earlier of (1) the execution of a successor agreement between you
and company or (2) your termination of employment with NCR, provided that
if your contract is not extended by the Board, you will be entitled to the
severance benefits described in paragraph 4 as if you were terminated
without Cause.
7. Arbitration. Any dispute or controversy arising in connection with this
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letter agreement will be settled exclusively by arbitration in Dayton,
Ohio, in accordance with rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrator's award in any court
having jurisdiction. All expenses of such arbitration, including the fees
and expenses of your legal counsel, will be borne by NCR.
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8. Governing Law. This Agreement and all determinations made and actions taken
pursuant hereto to the extent not otherwise governed by the laws of the
United States, shall be governed by the laws of the State of Ohio in the
courts of the State of Ohio and construed accordingly without giving effect
to principles of conflicts of law.
9. Entire Agreement. This letter reflects the entire agreement regarding the
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terms and conditions of your continued employment with NCR. Accordingly, it
supersedes and completely replaces any prior oral or written communication
on this subject, except for your CIC Agreement, existing equity incentive
grants, MIP and benefit programs described in Paragraph 2 above, and except
that the following provisions of your prior letter agreements remain in
effect: if you are involuntarily terminated from NCR other than for Cause,
or you terminate for Good Reason, the following equity grants will continue
to become exercisable or vest, as applicable, in accordance with their
terms, as if you continued to be actively employed by NCR: (1) your special
equity grant of 400,000 AT&T stock options (converted to 631,446 NCR
options), granted September 25, 1995, and (2) your stock option grant with
$5,000,000 face value, and restricted stock units with $5,000,000 face
value, granted January 2, 1997, both of which vest on September 1, 1999.
The Board looks forward to continuing to work with you to make NCR the
successful company we know it can be. Please indicate your acceptance of this
letter by signing below.
Sincerely, ACCEPTED AND AGREED:
/s/ Ronald Mitsch
/s/ Lars Nyberg
Dr. Ronald Mitsch __________________________
Chairman, Compensation Committee Lars Nyberg
Board of Directors, NCR Corporation Date: July 19, 1999
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