EXHIBIT 10(iii)(a)27
November 5, 2002
Mr. C. M. Armstrong
Dear Mike:
In recognition of the contributions you have made to the successful
spin-off of AT&T Broadband and the close of the merger with Comcast, the Board
of Directors of AT&T Corp. (the "Board") has awarded you a Completion Bonus
equal to two million, five hundred thousand dollars ($2,500,000).
Effective on the date of the successful close of the merger (the
"Effective Date"), AT&T Corp. (the "Company") will apply the Completion Bonus to
establish a special individual deferred account (the "Deferred Account") for
you. The maintenance, vesting, forfeiture and distribution of the Deferred
Account shall be in accordance with the following terms and conditions.
The Company shall credit the Deferred Account with an initial balance
equal to the Completion Bonus of two million, five hundred thousand dollars. The
Deferred Account will be credited with interest from the Effective Date to the
end of the first calendar quarter following the Effective Date, at a rate equal
to one-quarter (1/4) of the average annual rate applicable to actively traded 10
Year Treasury Notes for the prior calendar quarter plus .5%. The Deferred
Account will be credited with interest as of the end of each calendar quarter
thereafter, compounded quarterly, at a rate equal to one-quarter (1/4) of the
average annual rate applicable to actively traded 10 Year Treasury Notes for the
prior calendar quarter plus .5%. Interest credited to the Deferred Account will
be calculated in accordance with procedures determined by the Company in its
sole and absolute discretion.
The Deferred Account, including interest, shall be paid in ten (10)
approximately equal annual installments beginning in the calendar quarter
immediately following your 65th birthday.
The Deferred Account will be maintained as a bookkeeping account on the
records of the Company, and you will have no present ownership right or interest
in the Deferred Account, or in any assets of the Company with respect thereto.
You shall not have any right to receive any payment with respect to the Deferred
Account, except as expressly provided herein. The Deferred Account may not be
assigned, pledged or otherwise alienated by you and any attempt to
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do so, or any garnishment, execution or levy of any kind with respect to the
Deferred Account, will not be recognized.
This Agreement may not be amended or waived, unless the amendment or
waiver is in a writing signed by you and AT&T's Executive Vice President - Human
Resources, and the Board.
The Deferred Account will be 100% vested on the Effective Date, with
respect to the initial balance credited thereto, and will be 100% vest from time
to time thereafter, with respect to interest credited to the Deferred Account.
As of the Effective Date you will be responsible for applicable FICA and
Medicare taxes on the initial amount credited to the Deferred Account.
In the event of your termination of employment for Cause (as defined
below) prior to the Effective Date, the Completion Bonus shall be forfeited.
In the event of your termination of employment from the Company, due to
Long Term Disability as defined below, or your death, prior to the Effective
Date, the entire Completion Bonus will become vested and be distributed to you
or your named beneficiary (or your estate if no beneficiary has been named), in
a lump sum payment as soon as administratively feasible in the calendar quarter
immediately following the calendar quarter in which your termination of
employment occurs.
In the event of a Company-initiated termination for other than Cause
prior to the Effective Date, the entire Completion Bonus shall become vested and
be distributed to you in a lump sum payment as soon as administratively feasible
in the calendar quarter immediately following the calendar quarter in which your
termination occurs.
For purposes of this Agreement:
a) "Cause" termination shall mean:
(i) your conviction (including a plea of guilty or nolo
contendere) of a crime involving theft, fraud, dishonesty or
moral turpitude;
(ii) violation by you of the Company's Code of Conduct or
Non-Competition Guideline;
(iii)gross omission or gross dereliction of any statutory, common
law or other duty of loyalty to the Company or any of its
affiliates; or
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(iv) repeated failure to carry out the duties of your position
despite specific instruction to do so.
(c) "Long Term Disability" shall mean termination of your
employment with the Company with eligibility to receive a
disability allowance under the AT&T Long Term Disability Plan for
Management Employees or a replacement plan.
It is understood and agreed that you will not talk about, write about
or otherwise publicize the terms or existence of this Agreement or any fact
concerning its execution or implementation unless required by law or to enforce
the terms of this Agreement. You may, however, discuss its contents with your
spouse, legal and/or financial counselor, provided that you advise them of your
obligations of confidentiality and that any disclosures made by any of them may
be treated by the Company as disclosures made by you for purposes of this
provision.
THIS AGREEMENT IS NOT AN EMPLOYMENT CONTRACT AND SHOULD NOT BE
CONSTRUED OR INTERPRETED AS CONTAINING ANY GUARANTEE OF CONTINUED EMPLOYMENT.
THE EMPLOYMENT RELATIONSHIP WITH THE COMPANY IS BY MUTUAL CONSENT
("EMPLOYMENT-AT-WILL"). THIS MEANS THAT EMPLOYEES HAVE THE RIGHT TO TERMINATE
THEIR EMPLOYMENT AT ANY TIME AND FOR ANY REASON. LIKEWISE, THE COMPANY RESERVES
THE RIGHT TO DISCONTINUE YOUR EMPLOYMENT WITH OR WITHOUT CAUSE AT ANY TIME AND
FOR ANY REASON.
Credits to and payments from the Deferred Account are in addition to
and not in lieu (nor will they or anything in this Agreement postpone, reduce or
negatively impact) any qualified or non-qualified pension, savings, or other
retirement plan, program or arrangement covering you. Credits to and payments
from the Deferred Account provided under this Agreement are subject to payroll
tax withholding and reporting, and amounts credited to and amounts paid from the
Deferred Account are not included in the base for calculating benefits (nor
shall such amounts offset any benefits) under any employee or Senior Management
benefit plan, program or practice.
You understand that the terms of Agreement shall apply to the Company
and its successors. The Company specifically reserves the right to assign the
terms of this Agreement to any successor, whether the successor is the result of
a sale, purchase, merger, consolidation, asset sale, divestiture or spin-off or
any combination or form thereof. No sale, purchase, merger, consolidation, asset
sale, divestiture or spin-off or any combination or form thereof by the Company
shall be construed as a termination of your employment and will not be
considered a termination for purposes of this Agreement.
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The construction, interpretation and performance of this Agreement
shall be governed by the laws of the State of New Jersey, without regard to its
conflict of laws rule.
In addition, all of the benefits provided under this Agreement are
subject to forfeiture if you violate the AT&T Non-Competition Guideline, a copy
of which has been previously provided to you.
Congratulations Mike! If you agree with the terms and conditions
detailed above, sign and date this Agreement in the spaces provided below and
return the original executed copy to me.
Sincerely,
/s/ C. Michael Armstrong 11/21/02
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Acknowledged and Agreed to Date