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Exhibit 10(C)
FIRST AMENDMENT TO
EMPLOYMENT AGREEMENT
BETWEEN
BELL ATLANTIC CORPORATION AND __________________
This First Amendment to the Employment Agreement between Bell
Atlantic Corporation ("Bell Atlantic") and ___________________ (the "Key
Employee") dated May 2, 1995 (the "Employment Agreement") is made this day of
June, 1996.
WHEREAS, pursuant to the terms of an Agreement and Plan of
Merger, dated April 21, 1996 between Bell Atlantic, NYNEX Corporation ("NYNEX")
and Seaboard Merger Company, and any amendment or restatement thereof (the
"Definitive Agreement"), Bell Atlantic contemplates a corporate combination of
the Bell Atlantic and NYNEX businesses on a date which is yet to be decided (the
"Closing Date"), and Bell Atlantic contemplates that the achieving of the
closing of the transactions contemplated by the Definitive Agreement (a
"Closing"), and a successful combination of the two businesses, will depend on
achieving numerous approvals by third parties, completing other conditions of
closing, and developing of business integration plans, in addition to the
continuation of efforts to manage and grow the existing lines of Bell Atlantic's
business; and
WHEREAS, Bell Atlantic acknowledges that the period from the
date of this Agreement to the Closing Date is likely to be a period of
extraordinary transition; and
WHEREAS, Bell Atlantic wishes to provide additional financial
security to the Key Employee, and to retain the services of the Key Employee as
Vice Chairman to the Closing Date.
NOW, THEREFORE, for good and valuable consideration, the Key
Employee and Bell Atlantic hereby agree as follows:
1. STAY INCENTIVE.
(a) STAY BONUS AT CLOSING. Subject to the terms and conditions of this
Agreement:
(1) if there is a Closing of the transactions contemplated in
the Definitive Agreement, and
(2) if the Key Employee has remained an employee "in good
standing" (as hereinafter defined) of one or more Bell Atlantic
Companies from the date of this Agreement to the Closing Date;
then, not later than 30 calendar days following the Closing Date, Bell
Atlantic will cause the Bell Atlantic Company which then employs the Key
Employee to pay the Key Employee a special bonus consisting of a single
cash payment (a "Stay Bonus") in an amount equal (before withholding of
taxes) to 100 percent of the Key Employee's Pay as of the Closing Date. As
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in this Agreement, "Pay" means the sum of (i) an amount equal to the Key
Employee's then current annual rate of base salary, plus (ii) the greater
of (a) the value of the Key Employee's most recent award of cash and stock
(in either case, whether or not deferred) under the Senior Management Short
Term Incentive Plan or any successor to that plan (the "STIP"); or (b) 150%
of the target STIP award for the Key Employee's salary grade as of the
relevant date. In the event that the most recent short term award was
prorated for a portion of a year, the short term award shall be annualized.
(b) STAY BONUS IF MERGER PLAN IS TERMINATED. Subject to the terms and
conditions of this Agreement, if:
(1) the Definitive Agreement is terminated, thereby canceling
the plan of merger of the Bell Atlantic and NYNEX businesses, and
(2) the Key Employee has remained an employee "in good
standing" (as hereinafter defined) of one or more Bell Atlantic
Companies, from the date of this Agreement to the date the
Definitive Agreement is terminated;
then, not later than 30 calendar days following the date of termination of
the Definitive Agreement, Bell Atlantic will cause the Bell Atlantic
Company which then employs the Key Employee to pay the Key Employee a
special bonus consisting of a single cash payment in an amount equal
(before withholding of taxes) to 25 percent of the amount described in
Section 1(a) of this Agreement (substituting the date of termination of the
Definitive Agreement for the Closing Date, for purposes of calculating the
then applicable Pay in Section 1(a)).
(c) PAYMENT IN CASE OF DEATH. Subject to the terms and conditions of
this Agreement, in the event of the death of the Key Employee on any date
after the date of this Agreement on which the Key Employee was an employee
"in good standing" immediately prior to the date of death, and prior to the
Closing Date or the date of any termination of the Definitive Agreement,
Bell Atlantic shall cause the Key Employee's last employing Bell Atlantic
Company to pay the Key Employee's estate a single cash payment which
(before withholding taxes) shall be equal to a fraction of the amount
described in Section 1(a). The numerator of the fraction shall be the
number of days that have elapsed between the signing of this Agreement and
the Key Employee's date of death, and the denominator of the fraction shall
be the number of days that elapse between the signing of this Agreement and
the Closing Date. Such payment shall be made in accordance with the
timetable prescribed in Section 1(a), and substituting the date of death
for the date described in Section 1(a) for purposes of calculating Pay in
those subsections. If the Definitive Agreement is terminated as provided in
Section 1(b) after the Key Employee's date of death, a payment shall be
made to the Key Employee's estate (in lieu of the foregoing payment) in an
amount equal (before withholding of taxes) to 25 percent of the amount
described in Section 1(a) of this Agreement and substituting the date of
death for the date described in Section 1(a) for purposes of calculating
the then applicable Pay in Section 1(a).
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(d) DEFINITION OF EMPLOYMENT IN GOOD STANDING. For purposes of Section
1(a) through 1(c), the Key Employee will be considered to be "in good
standing" on a given date if, on that date, the Key Employee has not
terminated employment for any reason from the date of this Agreement to the
given date, has not tendered oral or written notice of intent to resign or
retire effective as of a date on or before the given date, and is not in
receipt of notice from his employing Bell Atlantic Company that the
employer has determined that the Key Employee's employment is to be
terminated because the Key Employee has committed a violation of law or a
breach of the Employee Code of Conduct or other written policy of the
employing company which is of sufficient severity to be cause for
termination for misconduct.
(e) STAY BONUS PAYMENT NOT APPLICABLE TO PENSION, SAVINGS PLAN, OR
OTHER BENEFIT PLANS. The amounts described in this Section of the Agreement
shall not be eligible to be contributed to any qualified savings plan, and
shall not be benefit-bearing compensation for purposes of any group term
life insurance plan, pension plan, or other employee benefit plans. Nothing
in this Agreement is intended to supersede or modify any rights which the
Key Employee may have under any other compensation or benefit plan in which
the Key Employee participates. At the time of any award of a stay bonus
under Section 1(a) or 1(b) of this Agreement, such bonus may be deferred
under any nonqualified deferred compensation plan in which the Key Employee
is then eligible to participate, but only if and to the extent then
permitted under the terms of any such nonqualified deferred compensation
plan.
2. ADDITIONAL DEATH BENEFIT. In the event of the death of the Key Employee
on any date after the date of this Agreement (but prior to the Closing) on which
the Key Employee was an employee "in good standing" immediately prior to the
death, then Bell Atlantic shall continue to pay to the Key Employee's estate to
the second anniversary of the Closing Date (or for two years following the date
of death if the Definitive Agreement is terminated as provided in Section 1(b)
after the Key Employee's death) the Key Employee's Pay in effect on the date of
death.
3. CERTAIN LIMITATIONS UPON PAYMENTS. Anything in this Agreement or in the
Employment Agreement to the contrary notwithstanding, Bell Atlantic and the Key
Employee agree to follow the procedures set forth in Attachment A with respect
to the applicability of the provisions of Section 280G of the Internal Revenue
Code of 1986, as amended.
4. Except as modified herein, in all other respects, the terms of the
Employment Agreement shall continue in full force and effect until the Closing,
or, in the event the Definitive Agreement is terminated, the Employment
Agreement will remain in force according to its terms, as amended herein.
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IN WITNESS WHEREOF, the parties hereto have executed this First
Amendment to the Employment Agreement on the date first set forth above.
BELL ATLANTIC CORPORATION
By:_______________________________________________
Raymond W. Smith,
Chairman of the Board and Chief Executive
Officer
THE KEY EMPLOYEE
_______________________________________________
_______________________________
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ATTACHMENT A
CERTAIN LIMITATIONS UPON PAYMENTS
(a) TAX CODE LIMITATIONS. Anything in this Agreement or the Employment
Agreement to the contrary notwithstanding, in the event that it shall be
determined that any payment or distribution by Bell Atlantic to or for the
benefit of the Key Employee, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise (a
"Payment"), would constitute an "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), the
aggregate present value of amounts payable or distributable to or for the
benefit of the Key Employee pursuant to this Agreement (such payments or
distributions pursuant to this Agreement are hereinafter referred to as
"Agreement Payments") shall be reduced (but not below zero) to the Reduced
Amount. The "Reduced Amount" shall be an amount expressed in present value which
maximizes the aggregate present value of Agreement Payments without causing any
Payment to be subject to taxation under Section 4999 of the Code. For purposes
of this Section, present value shall be determined in accordance with Section
280G(d)(4) of the Code.
(b) CALCULATIONS BY INDEPENDENT FIRM. All determinations to be made under
this Section shall be made by Bell Atlantic's independent public accountant or
such law firm as is acceptable to the Key Employee and Bell Atlantic (the
"Independent Firm"), immediately if the Key Employee separates from service
under circumstances which make the Key Employee eligible to receive
post-separation payments under this Agreement, or at such other times as Bell
Atlantic may determine. The parties agree that the Independent Firm shall render
a preliminary opinion on the applicability of Section 280G to this Agreement and
to the Employment Agreement within sixty (60) days of the date of execution of
this Agreement. The Independent Firm shall provide its determinations and any
supporting calculations both to Bell Atlantic and the Key Employee within ten
(10) days of the effective date of termination of employment, or when such
calculations are otherwise made. Any such determination by the Independent Firm
shall be binding upon Bell Atlantic and the Key Employee. Within five (5) days
after this determination, Bell Atlantic shall commence to pay (or cause payments
to commence to be paid) to or for the benefit of the Key Employee such amounts
(if any) as are then due to the Key Employee under this Agreement.
(c) OVERPAYMENTS AND UNDERPAYMENTS. As a result of the uncertainty in the
application of Section 280G of the Code at the time of the initial determination
by the Independent Firm hereunder, it is possible that Agreement Payments will
either have been made by Bell Atlantic which should not have been made
("Overpayment"), or that additional Agreement Payments which have not been made
by Bell Atlantic could have been made ("Underpayment"), in each case, consistent
with the calculations required to be made hereunder. Within two years after the
effective date of termination of employment, the Independent Firm shall review
the determination made by it pursuant to the preceding paragraph. In the event
that the Independent Firm determines that an Overpayment has been made, any such
Overpayment shall be treated for all purposes as a loan to the Key Employee
which the Key Employee shall repay to Bell Atlantic together with interest at
the applicable Federal rate provided for in Section 7872(f)(2) of the Code (the
"Federal Rate"); provided, however, that no amount shall be payable by the Key
Employee to Bell Atlantic if and to the extent such payment would not reduce the
amount which is subject to taxation under Section 4999 of the Code. In the event
that the Independent Firm determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the appropriate Bell
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Atlantic Company to or for the benefit of the Key Employee together with
interest at the Federal Rate.
(d) All of the fees and expenses of the Independent Firm in performing the
determinations referred to in subsections (b) and (c) above shall be borne
solely by Bell Atlantic.
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