Exhibit 10.10
May 1, 2001
J. Xxxxxxx Xxxxxxx
00000 Xxxxxx Xxxx 0
Xxxxxxxxxx, Xxxxxxx 00000
PERSONAL AND CONFIDENTIAL
Dear Ray:
The purpose of this letter is to summarize the terms of your compensation as of
March 15, 2001 contingent upon your assuming the position of President and Chief
Executive Officer - Xxxxxx Holdings, Inc. This letter also summarizes the terms
of your pension benefit under the Xxxxxxx-Xxxxx Squibb Company Retirement Income
Plan. Please note that these arrangements are supplemental to the terms and
conditions of the letter agreement you received from Xxxxxx X. Xxxxxxxx, dated
February 21, 2001. All terms and conditions presented in the February 21, 2001
letter agreement remain unchanged.
CASH COMPENSATION
Your annual base salary will be $600,000 and you will have a target bonus of
100% of base salary ($600,000). These compensation arrangements are effective
retroactive to March 15, 2001.
STOCK OPTION AWARD
Effective within 30 days following the date of the spin-off of Xxxxxx, you will
receive an option to purchase shares of Xxxxxx stock with an economic value at
the time of grant of $2,100,000 using a generally accepted valuation
methodology. This option will be issued under a new option and equity
compensation plan (the "Xxxxxx Stock Incentive Plan") that will be adopted by
Xxxxxx'x Board of Directors. Your option will vest in equal installments over a
period of four years provided you remain employed with Xxxxxx during that time,
or as provided otherwise under the Xxxxxx Stock Incentive Plan. The exercise
price will equal the fair market value of Xxxxxx stock at the time the option is
granted.
J. XXXXXXX XXXXXXX
MAY 1, 2001
PAGE 2 OF 3
PENSION BENEFIT UNDER XXXXXXX-XXXXX SQUIBB COMPANY RETIREMENT INCOME PLAN
In view of your short service with Xxxxxxx-Xxxxx Squibb Company and the impact
that this will have on your ability to accrue a pension benefit under the
Xxxxxxx-Xxxxx Squibb Company Retirement Income Plan, we will guarantee a
straight life annuity benefit for you of $98,508 per year beginning no sooner
than the first day of the month following the date of your 55th birthday. To the
extent that the value of the pension benefit amounts you will receive from the
Xxxxxxx-Xxxxx Squibb Company Retirement Income Plan and the Xxxxxxx-Xxxxx Squibb
Company Benefit Equalization Plan do not exceed the guaranteed amount,
Xxxxxxx-Xxxxx Squibb Company will provide you with the difference from its
general revenues. For your reference, the guaranteed benefit amount was
calculated assuming you retired from Xxxxxxx-Xxxxx Squibb Company at age 55 with
10 years of service and that you were therefore eligible for our Plan's Early
Retirement subsidies.
This benefit will be administered in accordance with the standard terms and
conditions employed by Xxxxxxx-Xxxxx Squibb Company, and as summarized in YOUR
BENEFITS on pages RP-3 to RP-10. For example, if you choose to begin your
benefit beyond age 55, the benefit amount would be increased in accordance with
the Early Retirement factors noted on page RP-6.
SPECIAL SEVERANCE PROVISIONS PURSUANT TO A CHANGE IN CONTROL
You had asked about receiving special severance coverage pursuant to a change in
control of Xxxxxx Holdings, Inc., similar to the coverage you would be entitled
to receive as an executive of Xxxxxxx-Xxxxx Squibb Company. Please be advised
that you will need to take up this request with the Board of Directors of Xxxxxx
Holdings, Inc.
Please contact me if you have any questions concerning the contents of this
letter.
Very truly yours,
Xxxxxxx X. Xxxxxx
Vice President
Global Compensation
cc: Xxxxxxx X. Xxxxx
Senior Vice President
Human Resources
J. XXXXXXX XXXXXXX
MAY 1, 2001
PAGE 3 OF 3
AGREED TO AND ACCEPTED:
J. Xxxxxxx Xxxxxxx
Xxxxxx, Inc.
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DATE:
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