EXHIBIT 10.24
December 20, 2002
Xx. Xxxxxxxx X. Xxxxx
Re: Transition Agreement
Dear Xxxxx:
Please accept this letter confirming the understandings we have reached
with respect to your separation from Raytheon Company, your resignation as an
officer of the companies listed in Attachment A hereto and your transition to
retirement.
1. Notice Period: The effective date of your separation from active
employment with Raytheon will be January 2, 2003. In lieu of payment of any
accrued but unused Personal Time Off benefits you may have as of January 2,
2003, you will be placed in a notice period from January 3, 2003 through March
8, 2003. During this notice period you will be treated for pay and benefit
purposes as being an active employee.
2. Transition Period: Effective March 9, 2003, you will begin a
transition-to-retirement period which shall continue for 104 weeks through March
8, 2005 (hereinafter the "Transition Period"). If you die prior to the end of
the Transition Period, your estate will receive the remainder of the bi-weekly
salary payments provided for in this paragraph. During the Transition Period,
you will be treated as an active employee and will be paid your normal salary on
a bi-weekly basis, and will participate in company-sponsored employee welfare
and benefit plans and executive perquisites, except that 1) you will be paid a
lump sum amount in lieu of a continuing automobile allowance, and 2) the base
life insurance under the executive benefit program will end as of January 2,
2003/1/. At the end of each fifty-two (52) week period during the Transition
Period, you, or your estate, will receive a Results Based Incentive (RBI) Bonus
at 100% of your 2002 RBI target. Your base salary shall be fixed as of the date
of this Agreement, and you will not be eligible to receive any merit increase or
stock option awards subsequent to that date.
3. Results Based Incentive: 2002: You will be eligible to receive a
Results Based Incentive Bonus for 2002 based on established corporate
performance metrics.
4. Stock Options: Except as provided in paragraph 5 below, for
vesting purposes, your last day worked shall be January 2, 2003. During the
Transition Period,
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/1/ Attached at B is a list of those welfare and benefit plans in which you may
participate on an active employee basis during the Transition Period.
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you or your estate may exercise any option which had vested by January
2, 2003, as provided by the Stock Option Plan under which the options were
awarded. Following the Transition Period (March 8, 2005), any vested but
unexercised options may be exercised for the period provided for retired
employees or their estates under the Stock Option Plan.
5. Stock Option Acceleration: The Management Development and
Compensation Committee of the Board of Directors has approved amending the stock
option award granted you on February 25, 2000, to provide that those options
which were scheduled to vest on February 25, 2003, (25,000 Incentive Stock
Options and non-qualified options at the option price of $19.375) shall now vest
on January 1, 2003. The exercise of these options shall be governed by the terms
of the Stock Option Plan under which they were awarded, except as modified by
paragraph 4 above.
6. Supplemental Retirement Payment: Pursuant to the terms of your
offer letter of February 22, 1999, you will be entitled to a retirement benefit
using the calculation formula and other applicable terms and conditions
contained in the Raytheon Company Pension Plan for Salaried Employees and the
Raytheon Excess Pension Plan, calculated using your service with Raytheon, the
104 weeks of the Transition Period, and your twenty-six (26) years of combined
service with New Jersey Xxxx, Exxon Corp., Penn Central, RCA, United
Technologies and Wang. The Final Average Earnings will include those sums
received during the Transition Period. This retirement benefit shall be offset
by any cash benefits you are immediately entitled to receive under any
defined-benefit pension plan of any of the companies listed above, as well as
any amounts you are entitled to receive from Social Security at the earliest
eligibility date. Before commencement of your retirement benefit from Raytheon,
you will be required to provide the Company with sufficient information
regarding your retirement benefits from the companies listed above to enable
Raytheon to calculate your final pension benefit.
If you die prior to the end of the Transition Period, a pension will be
paid to your wife as provided under the Raytheon Excess Pension Plan and will be
based on the assumption that you have a vested benefit under the Raytheon
Company Pension Plan for Salaried Employees based on the service credit
described in the preceding paragraph. Your spouse will be entitled to the
retirement benefit she would have been entitled to if you had remained employed
through the end of the Transition Period, then retired and elected a joint and
50% survivor annuity and then died.
7. Transition Services: A lump sum payment of Twenty Thousand
Dollars ($20,000) will be made available to assist with transition services
expenses. This lump sum payment will be subject to required statutory
withholdings.
8. Mutual Release: You and Raytheon agree to execute the Mutual
Release attached hereto in exchange for the consideration contained in this
Transition Agreement. The Mutual Release shall be executed on or about your last
day of active employment.
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9. Litigation Cooperation: You agree that, in the event that
Raytheon Company becomes a party in any legal or administrative proceeding or
asserted claim relating to events which occurred during your employment, you
will cooperate to the fullest extent reasonably possible in the preparation and
presentation by Raytheon Company in the prosecution or defense, including
without limitation the execution of affidavits or other documents providing
information requested by Raytheon Company. In the event that such litigation
cooperation would be expected to require an appreciable period of time, which
would result in any out-of-pocket cost or lost economic opportunity on your
part, the Company agrees to provide an appropriate fee to offset such items.
10. Indemnification: You will be entitled to the indemnifications
provided pursuant to Article X, Section 2 of Raytheon's Certificate of
Incorporation. In addition, you shall be entitled to the benefit of any
directors and officers liability insurance policy or fiduciary liability
insurance policy maintained by Raytheon for the benefit of its officers,
directors or fiduciaries, as in effect from time to time, in each case
concerning matters related to your performance as an officer, director or
fiduciary of Raytheon or any Raytheon pension plan.
11. Security Clearance: In the course of your employment at Raytheon
Company, you may have come into possession of or exposure to matters due to your
security clearance. Raytheon Company reminds you that disclosure of any
information which came to you as a result of your security clearance, including
work product, company plans and other matters, shall not be discussed or
revealed in any way, except if required to do so pursuant to a proceeding
instituted by an appropriate government agency or at the request of an
authorized company agent.
12. Confidential and Proprietary Information: You agree to keep all
confidential and proprietary information of the Company, its subsidiaries and
affiliated companies, including joint venture partners, strictly confidential
except to the extent disclosure is required by law or court order, except to the
extent that such confidential and proprietary information has become public
through no fault of your own.
13. Confidentiality of This Agreement: You and Raytheon Company
mutually agree to keep the terms and conditions of this Agreement confidential
and will not disclose the terms hereof to anyone, except to immediate family
members, tax accountants, lawyers, financial advisors, the Internal Revenue
Service or any other taxing authority, and the Division of Employment and
Training in connection with any application you may make for unemployment
compensation benefits, and/or others who have a reasonable need to know the
terms hereof.
14. Insider Information: In your capacity as a senior executive, you
were a Restricted Employee for purposes of Raytheon's General Policies and
Procedures 00-0000-000; Subject: Xxxxxxx Xxxxxxx/Personal Securities
Trans-actions. As such, pursuant to Section 4.3 of this policy, you must comply
with the Trading Window limitation for the three-month period ending on April 2,
2003.
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15. Arbitration: Any dispute arising under this Agreement shall be
settled exclusively through arbitration. Such arbitration shall be conducted in
accordance with the rules of the American Arbitration Association before a panel
of three arbitrators sitting in a city to be determined by mutual agreement. The
decision of the arbitration panel shall be final and binding on both parties.
Judgment may be entered on the award of the arbitrators in any court having
proper jurisdiction.
16. Entirety of Agreement: This Agreement supersedes all previous
agreements, written or oral, between Raytheon Company and you relating to the
subject matter of this Agreement. This Agreement may not be modified, changed or
discharged, in whole or in part, except by an agreement in writing signed by the
Company and you.
You understand that, if you elect to revoke the Release attached
hereto within seven (7) days after its execution, this letter Agreement shall be
null and void and each party will have all rights and obligations afforded them
under the law as if this Letter Agreement had not been signed by the parties and
as if the Release had never been signed by you. You agree, in the event of
revocation of the Release, to immediately return any consideration received in
support of said Release.
If you have any questions about this Agreement, please contact me.
Sincerely,
/s/ Xxxxx X. Xxxxx
Xxxxx X. Xxxxx
Senior Vice President, Human Resources
ACCEPTED:
/s/ Xxxxxxxx X. Xxxxx Date: 1/02/03
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Xxxxxxxx X. Xxxxx
MUTUAL RELEASE
I agree to accept the benefits and payments set forth in the immediately
preceding Transition Agreement as full satisfaction in all respects of any and
all obligations of any kind which might otherwise be due me from Raytheon
Company. I hereby specifically waive, remise, release and forever discharge
Raytheon Company, its affiliates, subsidiaries, directors, officers, employees,
agents and successors (hereinafter referred to as "Raytheon") from all manner of
claims, liabilities, demands and causes of action, known or unknown, fixed or
contingent (hereinafter "claims"), which I may have or claim to have against
Raytheon as a result of my employment and the termination thereof, and do hereby
covenant not to file or commence a lawsuit or administrative proceeding against
Raytheon to assert any such claims. I understand that this Mutual Release
encompasses all claims, except those arising under the terms of the Transition
Agreement by and between Raytheon and me, arising under federal, state or local
law, including but not limited to claims under the Age Discrimination in
Employment Act ("ADEA") or claims arising under any theory of wrongful
discharge. This Mutual Release is binding upon my successors, heirs, executors
and administrators but does not waive any rights or claims which relate to
events occurring after the date this Mutual Release is executed.
Raytheon Company and all benefit plans thereof hereby specifically
waive, remise, release and forever discharge Xxxxxxxx X. Xxxxx from all claims,
as that term is defined above.
I understand and agree that, under the Older Workers Benefit Protection
Act of 1990 ("Act"), this waiver of rights under ADEA must be knowing and
voluntary and that, by execution of this Mutual Release, I acknowledge that the
following requirements of the Act to insure that such a waiver is knowing and
voluntary have been met:
(a) The waiver is part of an agreement between me and Raytheon, and
I understand the impact of this waiver;
(b) The waiver specifically refers to rights or claims arising under
ADEA;
(c) I am not waiving rights or claims that may arise after the date
the waiver is executed;
(d) My waiver of rights or claims is in exchange for consideration
in addition to anything of value to which I am already entitled;
(e) I have been advised to consult with an attorney prior to
executing this Mutual Release;
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(f) I understand that I am to be given a period of twenty-one days
within which to consider the Mutual Release; and
(g) If this Mutual Release is executed, I understand that I may
revoke the Mutual Release during the seven-day period following
its execution and that the Mutual Release shall not become
effective or enforceable until the revocation period has
expired.
I have read carefully and fully understand all the provisions of this
Mutual Release, including my rights under the Act. I acknowledge that this
Mutual Release sets forth the entire agreement between me and Raytheon with
respect to additional consideration being provided to me and that I have not
relied upon any representation or statement, written or oral, not set forth in
this document.
RAYTHEON COMPANY
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxxxx X. Xxxxx
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Xxxxx X. Xxxxx Xxxxxxxx X. Xxxxx
Senior Vice President,
Human Resources
Date:____________________________ Date:_____________________________
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ATTACHMENT A to
XXXXXXXX X. XXXXX TRANSITION AGREEMENT
OFFICERSHIPS AND DIRECTORSHIPS
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COMPANY TITLE
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Raytheon Company Senior Vice President and
Chief Financial Officer
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Raytheon Credit Company Director and President
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Raytheon Exchange Holdings, Inc. Vice President - Finance
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Raytheon Exchange Holdings II, Inc. Vice President - Finance
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Raytheon Exchange Holdings III, Inc. Vice President - Finance
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Raytheon Exchange Holdings IV, Inc. Vice President - Finance
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Raytheon Exchange Holdings V, Inc. Vice President - Finance
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Raytheon Investment Company Director and President
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Space Imaging, Inc. Director
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ATTACHMENT B TO
XXXXXXXX X. XXXXX TRANSITION AGREEMENT
HEALTH AND WELFARE BENEFITS
CONTINUED DURING TRANSITION PERIOD
. Medical
. Vision
. Dental
. Executive split dollar life insurance
. Financial planning
. Executive registry program
. Executive annual physical benefit
