July ____, 1998
[Name]
[Title]
[Company]
[Address]
Dear [Name]:
MediaOne Group, Inc., on behalf of itself, its subsidiaries and its
stockholders, and any successor or surviving entity, wishes to encourage your
continued service and dedication in the performance of your duties,
notwithstanding the possibility, threat or occurrence of a Change of Control (as
defined in Subsection I(i)) of the Company (as defined in Subsection I(k). The
Board of Directors of the Company (the "Board") believes that the prospect of a
pending or threatened Change of Control inevitably creates distractions and
personal risks and uncertainties for its executives, and that it is in the best
interests of MediaOne Group, Inc. and its stockholders to minimize such
distractions to certain executives. The Board further believes that it is in the
best interests of the Company to encourage its executives' full attention and
dedication to their duties, both currently and in the event of any threatened or
pending Change of Control.
Accordingly, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued retention of certain members of the
Company's management, including yourself, and the attention and dedication of
management to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change of
Control.
In order to induce you ("Executive") to remain in the employ of the Company and
in consideration of your continued service to the Company, the Company agrees
that you shall receive the benefits set forth in this letter agreement (the
"Agreement") in the event that your employment with the Company is terminated
subsequent to a Change of Control in the circumstances described herein. For
purposes of this Agreement, references to employment with the Company shall
include employment with a Subsidiary of the Company (as defined in Subsection
I(y)).
I. Definitions
The meaning of each defined term that is used in this Agreement is set forth
below.
(a) AAA. The American Arbitration Association.
(b) Additional Pay. The meaning of this term is set forth in Subsection IV(b).
(c) Agreement. The meaning of this term is set forth in the third paragraph of
this Agreement.
(d) Agreement Payments. The meaning of this term is set forth in Subsection
IV(e)(i).
(e) Beneficiaries. The meaning of this term is set forth in Subsection VI(b).
(f) Board. The meaning of this term is set forth in the first paragraph of this
Agreement.
(g) Business Combination. The meaning of this term is set forth in Subsection
I(i)(iii).
(h) Cause. For purposes of this Agreement, "Cause" shall mean Executive's
willful breach or failure to perform his employment duties. For purposes of this
Subsection I(h), no act, or failure to act, on the part of Executive shall be
deemed "willful" unless done, or omitted to be done, by Executive not in good
faith and without reasonable belief that such action or omission was in the best
interest of the Company. Notwithstanding the foregoing, Executive's employment
shall not be deemed to have been terminated for Cause unless and until the
Company delivers to Executive a certificate of a resolution duly adopted by the
affirmative vote of not less than seventy-five percent (75%) of the entire
membership of the Board at a meeting of the Board called and held for such
purpose (after reasonable notice to Executive and an opportunity for Executive,
together with Executive's counsel, to be heard before the Board), finding that
in the good faith opinion of the Board, Executive has engaged in such willful
conduct and specifying the details of such willful conduct.
(i) Change of Control. For purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred if there is a change of control of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is then subject to such
reporting requirement; provided that, without limitation, such a Change of
Control shall be deemed to have occurred if:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2) as
currently in effect, of the Exchange Act) is or becomes a "beneficial
owner" (as determined for purposes of Regulation 13D-G as currently in
effect, under the Exchange Act, directly or indirectly, of securities
representing twenty percent (20%) or more of the total voting power of all
of the Company's then outstanding voting securities. For purposes of this
Agreement, the term "person" shall not include: (A) the Company or any of
its Subsidiaries, (B) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any of its Subsidiaries, or (C)
an underwriter temporarily holding securities pursuant to an offering of
said securities;
(ii) during any period of two (2) consecutive calendar years, individuals
who at the beginning of such period constitute the Board and any new
director(s) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning
of such period or whose election or nomination for election was previously
so approved, cease for any reason to constitute a majority of the Board;
(iii) the stockholders of the Company approve a merger, consolidation or
sale or other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless following such
Business Combination: (i) all or substantially all of the individuals and
entities who were the "beneficial owners" (as determined for purposes of
Regulation 13D-G, as currently in effect, of the Exchange Act) of the
outstanding voting securities of the Company immediately prior to such
Business Combination beneficially own, directly or indirectly, securities
representing more than fifty percent (50%) of the total voting power of the
then outstanding voting securities of the corporation resulting from such
Business Combination or the parent of such corporation (the "Resulting
Corporation"); (ii) no "person" (as such term is used in Section 13(d) and
14(d)(2), as currently in effect, of the Exchange Act), other than a
trustee or other fiduciary holding securities under an employee benefit
plan of the Company or the Resulting Corporation, is the "beneficial owner"
(as determined for purposes of Regulation 13D-G, as currently in effect, of
the Exchange Act), directly or indirectly, of voting securities
representing twenty percent (20%) or more of the total voting power of then
outstanding voting securities of the Resulting Corporation; and (iii) at
least a majority of the members of the board of directors of the Resulting
Corporation were members of the Board at the time of the execution of the
initial agreement, or at the time of the action of the Board, providing for
such Business Combination;
(iv) the stockholders of the Company approve a plan of complete liquidation
or dissolution of the Company; or
(v) any other event that a simple majority of the Board, in its sole
discretion, shall determine constitutes a Change of Control.
(j) Code. The meaning of this term is set forth in Subsection IV(e)(i).
(k) Company. The meaning of this term is set forth in Subsection VI(a).
(l) Controlled Group. For purposes of this Agreement, "Controlled Group" shall
mean the Company and all of the Company's Subsidiaries.
(m) Disability. For purposes of this Agreement, "Disability" shall mean an
illness, injury or similar incapacity which 52 weeks after its commencement,
continues to render Executive unable to perform the material and substantial
duties of Executive's position or any substantially similar occupation or
substantially similar employment for which Executive is qualified or may
reasonably become qualified by training, education or experience. Any question
as to the existence of a Disability upon which Executive and the Company cannot
agree shall be determined by a qualified independent physician selected by
Executive (or, if Executive is unable to make such selection, by any adult
member of Executive's immediate family or Executive's legal representative), and
approved by the Company, such approval not to be unreasonably withheld. The
determination of such physician made in writing to both the Company and
Executive shall be final and conclusive for all purposes of this Agreement.
(n) Employer. For purposes of this Agreement, "Employer" shall mean the Company
or the Subsidiary, as the case may be, with which Executive has an employment
relationship.
(o) Exchange Act. This term shall have the meaning set forth in Subsection I(i).
(p) Executive. This term shall have the meaning set forth in the third paragraph
of this Agreement.
(q) Excise Tax. This term shall have the meaning set forth in Subsection
IV(e)(i).
(r) Good Reason. For purposes of this Agreement, "Good Reason" shall mean the
occurrence, without Executive's prior express written consent, of any of the
following circumstances:
(i) The assignment to Executive of any duties inconsistent with Executive's
status or responsibilities as in effect immediately prior to a Change of
Control, including imposition of travel obligations which differ materially
from required business travel immediately prior to the Change of Control;
(ii) Any diminution in the status or responsibilities of Executive's
position from that which existed immediately prior to the Change of
Control, whether by reason of the Company ceasing to be a public company
under the Exchange Act, becoming a subsidiary of a successor public
company, or otherwise;
(iii) (A) A reduction in Executive's annual base salary as in effect
immediately before the Change of Control; or (B) the failure to pay a bonus
award to which Executive is entitled under any short-term incentive plan(s)
or program(s) or any long-term incentive plan(s) or program(s) in which
Executive participates, or any companion, amended, successor or other
incentive compensation plan(s) or program(s), at the time such awards are
usually paid;
(iv) A change in the principal place of Executive's employment, as in
effect immediately prior to the Change of Control to a location more than
thirty-five (35) miles distant from the location of such principal place at
such time;
(v) The failure by the Company to continue in effect any incentive
compensation plan or stock option plan in which Executive participates
immediately prior to the Change of Control, unless participation in an
equivalent alternative compensation or stock or stock option arrangement
(embodied in an ongoing substitute or alternative plan) has been provided
to Executive, or the failure by the Company to continue Executive's
participation in any such compensation or stock or stock option plan on a
substantially equivalent or more beneficial basis, both in terms of the
nature and amount of benefits provided and the level of Executive's
participation relative to other participants, as existed immediately prior
to the time of the Change of Control;
(vi) (A) Except as required by law, the failure by the Company to continue
to provide to Executive benefits substantially equivalent or more
beneficial, in the aggregate, to those enjoyed by Executive under the
qualified and non-qualified employee benefit and welfare plans of the
Company, including, without limitation, any pension, deferred compensation,
life insurance, medical, dental, health and accident, disability,
retirement or savings plan(s) or program(s) in which Executive was eligible
to participate immediately prior to the Change of Control; (B) the taking
of any action by the Company that would, directly or indirectly, materially
reduce or deprive Executive of any other perquisite or benefit enjoyed by
Executive immediately prior to the Change of Control (including, without
limitation, Company-paid and/or reimbursed club memberships, financial
counseling fees and the like); or (C) the failure by the Company to treat
Executive under the Company's vacation policy, past practice or special
agreement in the same manner and to the same extent as was in effect
immediately prior to the Change of Control;
(vii) The failure of the Company to obtain a satisfactory written agreement
from any successor prior to consummation of the Change of Control to assume
and agree to perform this Agreement, as contemplated in Subsection VI(a);
or
(viii) Any purported termination by the Company of Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Subsection III(b) or, if applicable, Subsection I(h). For
purposes of this Agreement, no such purported termination shall be
effective except as constituting Good Reason.
Executive's continued employment with the Company or any Subsidiary shall
not constitute a consent to, or a waiver of rights with respect to, any
circumstances constituting Good Reason hereunder.
(s) Gross-Up Payment. The meaning of this term is set forth in Subsection
IV(e)(i).
(t) Notice of Termination. The meaning of this term is set forth in Subsection
III(b).
(u) Other Payments. The meaning of this term is set forth in Subsection
IV(e)(i).
(v) Payments. The meaning of this term is set forth in Subsection IV(e)(i).
(w) Resulting Corporation. The meaning of this term is set forth in Subsection I
(i)(iii).
(x) Retirement. For purposes of this Agreement, "Retirement" shall mean
Executive's voluntary termination of employment with the Company, other than for
Good Reason, and in accordance with the Company's retirement policy generally
applicable to its employees or in accordance with any prior or contemporaneous
retirement agreement or arrangement between Executive and the Company.
(y) Subsidiary. For purposes of this Agreement, "Subsidiary" shall mean any
corporation of which fifty percent (50%) or more of the voting stock is owned,
directly or indirectly, by the Company.
(z) Tax Consultant. The meaning of this term is set forth in Subsection
IV(e)(ii).
(aa) Terminate(d) or Termination. The meaning of this term is set forth in
Subsection III(a).
(bb) Termination Date. For purposes of this Agreement, "Termination Date" shall
mean:
(i) If Executive's employment is terminated for Disability, thirty (30)
calendar days after Notice of Termination is given (provided that Executive
shall not have returned to the full-time performance of his duties during
such thirty-day period); and
(ii) If Executive's employment is terminated for Cause or Good Reason or
for any reason other than death or Disability, the date specified in the
Notice of Termination (which in the case of a termination for Cause shall
not be less than thirty (30) calendar days and in the case of a termination
for Good Reason shall not be less than thirty (30) calendar days nor more
than sixty (60) calendar days, respectively, from the date such Notice of
Termination is given).
II. Term of Agreement
(a) General. Upon execution by Executive, this Agreement shall commence as of
June 16, 1998. This Agreement shall continue in effect through December 31,
2001; provided, however, that commencing on January 1, 2002, and every third
January 1 thereafter, the term of this Agreement shall automatically be extended
for three (3) additional years unless, not later than ninety (90) calendar days
prior to the January 1 on which this Agreement otherwise automatically would be
extended, the Company shall have given notice to Executive that it does not wish
to extend this Agreement; provided further, however, that if a Change of Control
shall have occurred during the original or any extended term of this Agreement,
this Agreement shall continue in effect for a period of thirty-six (36) months
beyond the month in which the Change of Control occurred. The term of this
Agreement automatically shall be extended for three (3) additional years from
the date of any public announcement of an event that would constitute a Change
of Control as defined in this Agreement; provided, however, that if any such
announced event is not consummated within that three (3) year period, the
original renewal term thereafter shall apply.
(b) Disposition of Employer. In the event Executive is employed by a Subsidiary,
the terms of this Agreement shall expire if such Subsidiary is sold or otherwise
disposed of prior to the date on which a Change of Control occurs, unless
Executive continues in employment with the Controlled Group after such sale or
other disposition. If Executive's Employer is sold or disposed of on or after
the date on which a Change of Control occurs, this Agreement shall continue
through its original term or any extended term then in effect.
(c) Deemed Change of Control. If Executive's employment with Employer is
terminated prior to the date on which a Change of Control occurs, and such
termination was at the request of a third party who has taken steps to effect a
Change of Control, or otherwise was in connection with the Change of Control,
then for all purposes of this Agreement, a Change of Control shall be deemed to
have occurred prior to such termination.
(d) Expiration of Agreement. No termination or expiration of this Agreement
shall affect any rights, obligations or liabilities of either party that shall
have accrued on or prior to the date of such termination or expiration.
III. Termination Following Change of Control
(a) Entitlement to Benefits. If a Change of Control shall have occurred,
Executive shall be entitled to the benefits provided in Section IV hereof upon
the subsequent termination of his employment with the Company within three (3)
years after the date of the Change of Control unless such termination is (i) a
result of Executive's death or Retirement, (ii) for Cause, (iii) a result of
Executive's Disability, or (iv) by Executive other than for Good Reason. For
purposes of this Agreement, "Termination" shall mean a termination of
Executive's employment that is not as a result of Executive's death, Retirement
or Disability and (x) if by the Company, is not for Cause, or (y) if by
Executive, is for Good Reason.
(b) Notice of Termination. Any purported termination of Executive's employment
by either the Company or Executive shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section VIII. For
purposes of this Agreement, a "Notice of Termination" shall mean a written
notice that indicates the specific provision(s) of this Agreement relied upon
and sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of Executive's employment under the provision(s)
so indicated. If Executive's employment shall be terminated by the Company for
Cause or by Executive for other than Good Reason, the Company shall pay
Executive his full base salary through the Termination Date at the salary level
in effect at the time Notice of Termination is given and shall pay any amounts
to be paid to Executive pursuant to any other compensation or stock or stock
option plan(s), program(s) or employment agreement(s) then in effect, and the
Company shall have no further obligations to Executive under this Agreement.
If within thirty (30) calendar days after any Notice of Termination is given,
the party receiving such Notice of Termination notifies the other party that a
dispute exists concerning the grounds for termination, then, notwithstanding the
meaning of "Termination Date" set forth in Subsection I(bb), the Termination
Date shall be the date on which the dispute is finally resolved, whether by
mutual written agreement of the parties or by a decision rendered pursuant to
Section XI; provided 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 of such dispute with reasonable diligence.
Notwithstanding the pendency of any such dispute, the Company will continue to
pay Executive his full compensation including, without limitation, base salary,
bonus, incentive pay and equity grants, in effect when the notice of the dispute
was given, and continue Executive's participation in all benefits plans or other
perquisites in which Executive was participating, or which he was enjoying, when
the Notice of Termination giving rise to the dispute was given, until the
dispute is finally resolved. Amounts paid under this Subsection III(b) are in
addition to and not in lieu of all other amounts due to Executive under this
Agreement and shall not be offset against or reduce any other amounts due to
Executive under this Agreement.
IV. Compensation Upon a Termination
Following a Change of Control, upon Executive's Termination, Executive shall be
entitled to the following benefits, provided that such Termination occurs during
the three (3) year period immediately following the date of the Change of
Control:
(a) Standard Benefits. The Company shall pay Executive his full base salary
through the Termination Date at the rate in effect at the time the Notice of
Termination is given, no later than the second business day following the
Termination Date, plus all other amounts to which Executive is entitled under
any compensation plan(s) or program(s) of the Company applicable to Executive at
the time such payments are due. Without limitation, amounts payable pursuant to
this Subsection IV(a) shall include, pursuant to the express terms of the
short-term incentive plan in which Executive participates or otherwise,
Executive's annual bonus under such short-term incentive plan, pro-rated to the
Termination Date.
(b) Additional Benefits. The Company shall pay to Executive as additional pay
("Additional Pay"), the product of (i) the lesser of (x) three (3) or (y) the
difference between sixty-five (65) and Executive's age as of the date of the
Notice of Termination (calculated to the nearest twelfth of a year), multiplied
by (ii) the sum of (x) Executive's annual base salary in effect immediately
prior to the Termination Date, (y) Executive's annual bonus amount under any
short-term incentive plan(s) or program(s) in which Executive participates, such
bonus amount to be calculated on the basis of the extent to which the
performance factors targeted by the Human Resources Committee of the Board have
been achieved (for this purpose, the Company's performance through the
Termination Date shall be annualized based upon the actual number of days
elapsed from the beginning of the fiscal year in which the Termination occurs
through the Termination Date over a year of 360 days), which shall be deemed to
be 100% unless the performance actually achieved is greater than 100%, in which
case the actual performance level shall be utilized, and (z) the dollar value of
the most recent annual grant to Executive prior to the Termination Date under
any long-term incentive plan(s), program(s) or grant(s) in which Executive
participates, whether such value is in the form of stock, stock options,
Dividend Equivalent Units or any other form of long term incentive compensation,
such grant value to be calculated as if the performance measures set forth in
any such plan(s), program(s) or grant(s) (e.g., Dividend Equivalent Units) for
the applicable performance period shall be deemed to be one hundred percent
(100%). The Company shall pay the Additional Pay to Executive in a lump sum, in
cash, not later than the fifteenth calendar day following the Termination Date.
The Company shall maintain for Executive, all such perquisites and fringe
benefits enjoyed by Executive immediately prior to the Termination Date as are
approved in writing by the Company's Chief Executive Officer for such period as
is specified in such writing.
(c) Retirement Plan Benefits. If not already vested, Executive shall be deemed
fully vested as of the Termination Date in any Company retirement plan(s) or
other written agreement(s) between Executive and the Company relating to pay or
other benefits upon retirement in which Executive was a participant, party or
beneficiary immediately prior to the Change of Control, and any additional
plan(s) or agreement(s) in which such Executive became a participant, party or
beneficiary thereafter. In addition to the foregoing, for purposes of
determining the amounts to be paid to Executive under such plan(s) or
agreement(s), the years of service with the Company and the age of Executive
under all such plans and agreements shall be deemed increased by the lesser of
thirty-six (36) months or such shorter period of time as would render Executive
sixty-five (65) years of age. For purposes of this Subsection IV(c), the term
"plan(s)" includes, without limitation, the Company's qualified pension plan,
non-qualified and mid-career pension plans, and any companion, successor or
amended plan(s), and the term "agreement(s)" encompasses, without limitation,
the terms of any offer letter(s) leading to Executive's employment with the
Company where Executive was a signatory thereto, any written amendment(s) to the
foregoing and any subsequent agreements on such matters. In the event the terms
of the plans referenced in this Subsection IV(c) do not for any reason coincide
with the provisions of this Subsection IV(c) (e.g., if plan amendments would
cause disqualification of qualified plans), Executive shall be entitled to
receive from the Company under the terms of this Agreement an amount equal to
all amounts he would have received, at the time he would have received such
amounts, had all such plans continued in existence as in effect on the date of
this Agreement after being amended to coincide with the terms of this Subsection
IV(c).
(d) Health and Other Benefits. Following the Termination Date, the Company shall
continue to provide substantially the same level of health, vision and dental
benefits to Executive and Executive's eligible dependents that the Company would
provide to Executive and Executive's eligible dependents if Executive were first
eligible for retiree health, vision and dental benefits immediately prior to the
Change of Control. The eligibility of Executive's dependents shall be determined
by the terms of any retiree health, vision and dental benefit plan(s) or
program(s) in effect immediately prior to the Change of Control.
(e) Gross-Up Payments.
(i) In the event any payment(s) or the value of any benefit(s) received or
to be received by Executive in connection with Executive's Termination or
contingent upon a Change of Control (whether received or to be received
pursuant to the terms of this Agreement (the "Agreement Payments") or of
any other plan, arrangement or agreement of the Company, its successors,
any person whose actions result in a Change of Control or any person
affiliated with any of them (or which, as a result of the completion of the
transaction(s) causing a Change of Control, will become affiliated with any
of them) ("Other Payments" and, together with the Agreement Payments, the
"Payments")), in the opinion of the Tax Consultant (as defined below in
Subsection IV(e)(ii)),would be subject to an excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code") or any
other federal, state or local excise tax (any such excise or other tax,
together with any interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), as determined as provided below, the
Company shall pay to Executive an additional amount such that the net
amount retained by Executive, after deduction of the Excise Tax on
Agreement Payments and Other Payments and any federal, state and local
income and employment tax and Excise Tax upon the Payment(s) provided for
by this Subsection IV(e)(i), and any interest, penalties or additions to
tax payable by Executive with respect thereto shall be equal to the total
present value of the Agreement Payments and Other Payments at the time such
Payments are to be made (the "Gross-Up Payment(s)"). The intent of the
parties is that the Company shall be responsible in full for, and shall
pay, any and all Excise Tax on any Payments and Gross-Up Payment(s) and any
income and all employment taxes (including, without limitation, penalties
and interest) imposed on any Gross-Up Payment(s) as well as any loss of
deduction caused by or related to the Gross-Up Payment(s).
(ii) All determinations required to be made under this Subsection IV(e),
including, without limitation, whether and when a Gross-Up Payment is
required, and the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determinations, unless otherwise set forth in
this Agreement, shall be made by tax consultant(s) selected by the Company
and reasonably acceptable to Executive ("Tax Consultant"). For purposes of
determining the amount of any Gross-Up Payment, Executive shall be deemed
to pay federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made,
and state and local income taxes at the highest marginal rate of taxation
in the state and locality of Executive's residence on the Termination Date,
net of the maximum reduction in federal income taxes which could be
obtained from deduction of such state and local taxes. The Company shall
cause the Tax Consultant to provide detailed supporting calculations to the
Company and Executive within fifteen (15) business days after notice is
given by Executive to the Company that any or all of the Payments have
occurred, or such earlier time as is requested by the Company. Within two
(2) business days after such notice is given to the Company, the Company
shall instruct the Tax Consultant to timely provide the data required by
this Subsection IV(e) to Executive. All fees and expenses of the Tax
Consultant shall be paid in full by the Company. Any Excise Tax as
determined pursuant to this Subsection IV(e) shall be paid by the Company
to the Internal Revenue Service or any other appropriate taxing authority
on Executive's behalf within five (5) business days after receipt of the
Tax Consultant's determination. If the Tax Consultant determines that there
is substantial authority (within the meaning of Section 6662 of the Code)
that no Excise Tax is payable by Executive, the Tax Consultant shall
furnish Executive with a written opinion that failure to disclose or report
the Excise Tax on Executive's federal income tax return will not constitute
a substantial understatement of tax or be reasonably likely to result in
the imposition of a negligence or any other penalty. Any determination by
the Tax Consultant shall be binding upon the Company and Executive in the
absence of material mathematical or legal error. As a result of the
uncertainty in the application of Section 4999 of the Code at the time the
initial determination by the Tax Consultant hereunder, it is possible that
Gross-Up Payments will not have been made by the Company that should have
been made or that Gross-Up Payments have been made that should not have
been made, in each case, consistent with the calculations required to be
made hereunder. In the event the Company exhausts its remedies pursuant to
Subsection IV(e)(iii) below and Executive is thereafter required to make a
payment of any Excise Tax or any interest, penalties or addition to tax,
the Tax Consultant shall determine the amount of underpayment of Excise
Taxes that has occurred and any such underpayment and interest, penalties
or addition to tax shall be promptly paid by the Company to the Internal
Revenue Service or other appropriate taxing authority on Executive's behalf
or, if such underpayment has been previously paid by Executive to the
appropriate taxing authority, to Executive. In the event the Tax Consultant
determines that an overpayment of Gross-Up Payment(s) has occurred, any
such overpayment shall be treated for all purposes as a loan to Executive
with interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code, due and payable within ninety (90) days after
written demand to Executive by the Company; provided, however, that
Executive shall have no duty or obligation whatsoever to repay such loan if
Executive's receipt of the overpayment, or any portion thereof, is
includible in Executive's income and Executive's repayment of the same is
not deductible by Executive for federal and state income tax purposes.
(iii) Executive shall notify the Company in writing of any claim of which
he is aware by the Internal Revenue Service or state or local taxing
authority, that, if successful, would result in any Excise Tax or an
underpayment of any Gross-Up Payment(s). Such notice shall be given as soon
as practicable but no later than fifteen (15) business days after Executive
is informed in writing of the claim by the taxing authority and Executive
shall provide written notice of the Company of the nature of the claim, the
administrative or judicial appeal period, and the date on which any payment
of the claim must be paid. Executive shall not pay any portion of the claim
prior to the expiration of the thirty (30) day period following the date on
which Executive gives such notice to the Company (or such shorter period
ending on the date that any amount under the claim is due). If the Company
notifies Executive in writing prior to the expiration of such thirty (30)
day period that it desires to contest the claim, Executive shall:
(A) give the Company any information reasonably requested by the
Company relating to the claim;
(B) take such action in connection with contesting the claim as the
Company shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation
concerning the claim by an attorney selected by the Company who is
reasonably acceptable to Executive; and
(C) cooperate with the Company in good faith in order to effectively
contest the claim;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including, without limitation, additional interest and
penalties and attorneys' fees) incurred in such contests and shall
indemnify and hold Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including, without limitation, interest and
penalties thereon) imposed as a result of such representation. Without
limitation upon the foregoing provisions of this Subsection IV(e) (iii),
except as provided below, the Company shall control all proceedings
concerning such contest and, in its sole opinion, may pursue or forego any
and all administrative appeals, proceedings, hearings and conferences with
the taxing authority pertaining to the claim. At the written request of the
Company and upon payment to Executive of an amount at least equal to the
claim plus any additional amount necessary to obtain the jurisdiction of
the appropriate tribunal and/or court, Executive shall pay the same to the
appropriate taxing authority and sue for a refund. Executive agrees to
prosecute in cooperation with the Company any contest of a claim to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company requests Executive to pay
the claim and sue for a refund, the Company shall advance the amount of
such payment to Executive, on an interest-free basis, and shall indemnify
and hold Executive harmless on an after-tax basis, from any Excise Tax or
income tax (including, without limitation, interest and penalties thereon)
imposed on such advance or for any imputed income on such advance. Any
extension of the statute of limitations relating to assessment of any
Excise Tax for the taxable year of Executive which is the subject of the
claim is to be limited solely to the claim. Furthermore, the Company's
control of the contest shall be limited to issues for which a Gross-Up
Payment would be payable hereunder. Executive shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(iv) If, after the receipt by Executive of an amount advanced by the
Company pursuant to Subsection IV(e)(iii) above, Executive receives any
refund of a claim or any additional amount that was necessary to obtain
jurisdiction, Executive shall promptly pay to the Company the amount of
such refund (together with any interest paid or credited thereon after
taxes applicable thereto). If, after the receipt by Executive of an amount
advanced by the Company pursuant to Subsection IV(e)(iii) above, a
determination is made that Executive shall not be entitled to any refund of
the claim, and the Company does not notify Executive in writing of its
intent to contest such denial of refund of a claim prior to the expiration
of thirty (30) calendar days after such determination, then the portion of
such advance attributable to a claim shall be forgiven by the Company and
shall not be required to be repaid by Executive. The amount of such advance
attributable to a claim shall offset, to the extent thereof, the amount of
the underpayment required to be paid by the Company to Executive.
(v) If, after the advance by the Company of an additional amount necessary
to obtain jurisdiction, there is a final determination made by the taxing
authority that Executive is not entitled to any refund of such amount, or
any portion thereof, then such advance shall be repaid to the Company by
Executive within thirty (30) calendar days after Executive receives notice
of such final determination. A final determination shall occur when the
period to contest or otherwise appeal any decision by an administrative
tribunal or court of initial jurisdiction has been waived or the time for
contesting or appealing the same has expired.
(f) Legal Fees and Expenses. The Company shall pay to Executive all legal fees
and expenses as and when incurred by Executive in connection with this
Agreement, including all such fees and expenses, if any, incurred in contesting
or disputing any Termination or in seeking to obtain or enforce any right or
benefit provided by this Agreement, regardless of the outcome, unless, in the
case of a legal action brought by or in the name of Executive, a decision is
rendered pursuant to Section XI, or in any other proper legal proceeding, that
such action was not brought by Executive in good faith.
(g) No Mitigation. Executive shall not be required to mitigate the amount of any
payment provided for in this Section IV by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Section IV be reduced by any compensation earned by Executive as the result of
employment by another employer or by retirement or other benefits received from
whatever source after the Termination Date or otherwise, except as specifically
provided in this Section IV. The Company's obligation to make payments to
Executive provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action that the Company or Employer
may have against Executive or other parties.
V. Death and Disability Benefits
In the event of the death or Disability of Executive after a Change of Control,
Executive, or in the case of death, Executive's Beneficiaries (as defined below
in Subsection VI.(b)), shall receive the benefits to which Executive or his
Beneficiaries are entitled under this Agreement and any and all retirement
plans, pension plans, disability policies and other applicable plans, programs,
policies, agreements or arrangements of the Company.
VI. Successors; Binding Agreement
(a) Obligations of Successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company is required to perform it. Failure of the Company to
obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle Executive to
compensation from the Company in the same amount and on the same terms as
Executive would be entitled hereunder if Executive had terminated employment for
Good Reason following a Change of Control, except that for purposes of
implementing the foregoing, the date on which any such succession becomes
effective shall be deemed the Termination Date. As used in this Agreement, the
term "Company" shall mean MediaOne Group, Inc., including any surviving entity
or successor to all or substantially all of its business and/or assets and the
parent of any such surviving entity or successor.
(b) Enforceable by Beneficiaries. This Agreement shall inure to the benefit of
and be enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees (the
"Beneficiaries"). In the event of the death of Executive while any amount would
still be payable hereunder if such death had not occurred, all such amounts,
unless otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to Executive's Beneficiaries.
(c) Employment. Except in the event of a Change of Control and, thereafter, only
as specifically set forth in this Agreement, nothing in this Agreement shall be
construed to (i) limit in any way the right of the Company or a Subsidiary to
terminate Executive's employment at any time for any reason or for no reason; or
(ii) be evidence of any agreement or understanding, expressed or implied, that
the Company or a Subsidiary will employ Executive in any particular position, on
any particular terms or at any particular rate of remuneration.
VII. Confidential Information.
Executive shall hold in fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to the Company,
the Subsidiaries and their respective businesses, which shall have been obtained
during Executive's employment with the Employer and which shall not be public
knowledge (other than by acts by Executive or his representatives in violation
of this Agreement). After termination of Executive's employment with the Company
or any Employer within the Controlled Group, Executive shall not, without prior
written consent of the Company or the Employer, communicate or divulge any such
information, knowledge or data to anyone other than the Company, the Employer or
those designated by them. In no event shall an asserted violation of this
Section VII constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
VIII. Notice
All notices and communications including, without limitation, any Notice of
Termination hereunder, shall be in writing and shall be given by hand delivery
to the other party, by registered or certified mail, return receipt requested,
postage prepaid, or by overnight delivery service, addressed as follows:
If to Executive:
[Name]
[Title]
[Company]
[Address]
If to the Company:
MediaOne Group, Inc.
188 Inverness Drive West, Suite 500
Englewood, Colorado 80112
Attn: Vice President - Law, General Corporate and Litigation Group
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be deemed given
and effective when actually received by the addressee.
IX. Miscellaneous
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
Executive and the Company's Chief Executive Officer or other authorized officer
designated by the Board or an appropriate committee of the Board. 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. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Delaware. All references to sections of the Code or the Exchange Act shall be
deemed also to refer to any successor provisions of such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the Company under Sections
IV and V shall survive the expiration of the term of this Agreement.
X. Validity
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which shall remain in full force and effect.
XI. Arbitration
Executive may agree in writing with the Company (in which case this Article XI
shall have effect but not otherwise) that any dispute that may arise directly or
indirectly in connection with this Agreement, Executive's employment or the
termination of Executive's employment, whether arising in contract, statute,
tort, fraud, misrepresentation, discrimination or other legal theory, shall be
resolved by arbitration in Denver, Colorado under the applicable rules and
procedures of the AAA. The only legal claims between Executive and the Company
or any Subsidiary that would not be included in this agreement to arbitration
are claims by Executive for workers' compensation or unemployment compensation
benefits, claims for benefits under a Company or Subsidiary benefit plan if the
plan does not provide for arbitration of such disputes, and claims by Executive
that seek judicial relief in the form of specific performance of the right to be
paid until the Termination Date during the pendency of any applicable dispute or
controversy. If this Article XI is in effect, any claim with respect to this
Agreement, Executive's employment or the termination of Executive's employment
must be established by a preponderance of the evidence submitted to an impartial
arbitrator. A single arbitrator engaged in the practice of law shall conduct any
arbitration under the applicable rules and procedures of the AAA. The arbitrator
shall have the authority to order a pre-hearing exchange of information by the
parties including, without limitation, production of requested documents, and
examination by deposition of parties and their authorized agents. If this
Article XI is in effect, the decision of the arbitrator: (i) shall be final and
binding, (ii) shall be rendered within ninety (90) days after the impanelment of
the arbitrator, and (iii) shall be kept confidential by the parties to such
arbitration. The arbitration award may be enforced in any court of competent
jurisdiction. The Federal Arbitration Act, 9 U.S.C. Section 1 et seq., not state
law, shall govern the arbitrability of all claims.
If this letter sets forth our agreement on the subject matter hereof, kindly
sign both originals of this letter and return to the Vice President - Law,
General Corporate and Litigation Section, one of the fully executed originals of
this letter which will then constitute our Agreement on this subject.
Sincerely,
MediaOne Group, Inc.
By:___________________________________
[Name]
[Title]
______________________________________
[Name]
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