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EXHIBIT 10.3
SEVERANCE AGREEMENT
This Severance Agreement ("Agreement") is made and entered into this
15th day of June, 1998, between Raytheon Company, a corporation organized and
existing under the laws of the State of Delaware with its Executive Offices in
Lexington, Massachusetts ("Company" or "Raytheon"), and Xxxxxx X. Xxxxxxx ("the
Executive").
1. Employment: The Company has offered to employ the Executive, and the
Executive has accepted employment with the Company, commencing July 1, 1998. The
Executive is an employee at will of the Company.
2. Severance:
(a) If prior to the completion of a full calendar year of employment with
the Company, the Company terminates the employment of the Executive or
demotes the Executive for any reason other than: (i) Cause or
Disability as defined in Section 3 of this Agreement; or (ii) the death
of the Executive, the Company will pay the Executive an amount equal to
the sum of: (a) three times the Executive's starting annual base
salary; and (b) three times the Executive's target annual cash bonus
(the target annual incentive bonus being two hundred percent (200%) of
the Executive's starting annual base salary).
(b) If the Company thereafter terminates the employment of the Executive or
demotes the Executive for any reason other than: (i) Cause or
Disability as defined in Section 3 of this Agreement; or (ii) the death
of the Executive, the Company will pay the Executive an amount equal to
the sum of: (a) three times the Executive's base salary for the
immediately preceding full calendar year; and (b) three times the
annual cash bonus received by the Executive for the immediately
preceding full calendar year.
The Executive must notify the Company in writing within thirty (30)
days after the occurrence of any action, event or circumstance, or any failure
to act by the Company, upon which the Executive bases a claim for severance
under this Agreement. Failure to notify the Company in writing within such
thirty (30) day period will constitute a waiver of the claim, but will not bar
or hinder subsequent claims by the Executive arising out of other actions,
events, circumstances or failures to act by the Company. The Executive will not
receive multiple severance payments under this Agreement, and will be entitled
only to one severance payment under Subsection 2(a) or (b), as the case may be.
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The severance amounts described above, net of any applicable
withholding, will be paid to the Executive in a lump sum within thirty (30) days
following the receipt by the Company of the written notice from the Executive;
provided, however, that if the parties proceed to arbitration of the claim
pursuant to Section 5 of this Agreement, the severance amount awarded by the
arbitrators will be paid by the Company within thirty (30) days after the award.
Upon termination of employment, the Executive will remain vested in any
and all shares of restricted stock or restricted stock equivalents in which he
was vested immediately prior to termination of employment.
3. Definitions:
"Cause" means the Executive's (i) conviction of, or plea of nolo
contendere to, a felony; (ii) use of illegal drugs; or (iii) willful misconduct,
willful neglect or willful negligence in the performance of his duties, which
the Board of Directors reasonably believes has caused demonstrable injury to the
Company, monetary or otherwise, including injury to the goodwill and reputation
of the Company. The acts or events described in (i) through (iii), above, will
constitute Cause only if the Executive is given written notice that the Company
intends to terminate the Executive's employment for Cause, which notice will
specify the particular acts, events or failures to act which perform the basis
for the determination to terminate the employment of the Executive. In the case
of a termination for Cause as described in clause (iii) above, the Executive
will be given the opportunity within thirty (30) days of the receipt of such
notice to meet with the Executive Committee of the Board of Directors to defend
such acts, events or failures to act, prior to termination. The Executive's
title and authority may be suspended pending such meeting.
The term "Disability" as used in this Agreement means a physical or mental
incapacity of the Executive which has prevented him from performing the duties
customarily assigned by the Company for a period of not more than sixty (60)
days, whether or not consecutive, out of any twelve (12) consecutive months, and
which thereafter can reasonably be expected, in the judgment of a physician
selected by the Company, to continue.
4. Notices: Any notice, request, demand or other communication hereunder must be
in writing and will be deemed to have been duly given when personally delivered
to the Corporate Secretary on behalf of the Company or the Executive, as the
case may be, or when delivered by certified mail, return receipt requested, at
the following addresses:
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If to the Company: Senior Vice President - Human Resources
Raytheon Company
000 Xxxxxx Xxxxxx
Xxxxxxxxx XX 00000
If to the Executive: Xxxxxx X. Xxxxxxx
0 Xxxxx Xxxx
Xxxxxx, XX 00000
5. Arbitration: Any controversy or dispute between the Company and the Executive
arising under or in connection with this Agreement shall be settled by
arbitration. Arbitration will be conducted in accordance with the National Rules
for the Resolution of Employment Disputes of the American Arbitration
Association before a panel of three arbitrators sitting in Boston,
Massachusetts. The award of the arbitrators will be final and nonappealable, and
judgment may be entered on the award of the arbitrators by any court of
competent jurisdiction. All expenses of the arbitration will be borne by the
Company, including, without limitation, legal fees and expert witnesses,
regardless of the outcome of the arbitration.
6. Section Headings: Sections and other headings contained in this Agreement are
for reference only and will not affect in any way the meaning or interpretation
of the Agreement.
7. Governing Law: This Agreement is governed by the laws of the Commonwealth of
Massachusetts.
8. Enforceability: Should any court of competent jurisdiction issue a final
determination affecting any provision of this Agreement, the provision or
provisions so affected will be automatically conformed to the determination, and
otherwise this Agreement will continue in full force and effect.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the date and year first above written.
Raytheon Company Executive
By: -------------------------- ------------------------------
Xxxxxx X. Xxxx
