Exhibit 10.50
[LETTERHEAD OF NABISCO GROUP HOLDINGS]
August 10, 1999
Xxxxx Xxxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter constitutes the entire agreement between NABISCO GROUP
HOLDINGS CORP. (the "Company"), its predecessors, successors, affiliates,
former affiliates and/or assigns, and you regarding the termination of
your employment relationship with the Company, and implements the
provisions of the Headquarters Protection Program. The severance-related
compensation and/or benefits as described in this letter represent the
Company's entire severance obligation to you and are in lieu of any such
compensation and/or benefits to which you would otherwise have been
entitled under the RJR Nabisco, Inc. Salary and Benefit Continuation
Program (the "SBC"), your non-qualified pension benefits under the
Company's Additional Benefits Plan and Supplemental Benefits Plan and/or
your Employment Agreement dated June 23, 1998 (copy attached) with the
Company.
Please read the rest of this letter carefully; if you agree to be bound by
its terms, please sign the copy of this letter agreement where indicated
on the last page and return it to me by August 31, 1999.
1. a) You specifically acknowledge that you have received your Completion
Bonus of $522,750.00, less withholding taxes and other applicable
deductions, and, therefore, the Company's obligation to pay you a
Completion Bonus has been satisfied. The Completion Bonus is not
includable in any benefit plan calculations.
b) Your Termination Date is August 31, 1999 or such other date as
determined by the Chief Executive Officer of the Company. You will
continue as a regular full-time employee through your Termination Date and
are expected prior to your Termination Date to provide a transition of
your job duties and responsibilities. If you voluntarily quit or are
terminated by
the Company for violation of Company rules, policies, guides or standards
of conduct before your Termination Date or if you fail to provide
reasonable job transition assistance, as determined by the Senior Vice
President, Human Resources, you will not receive the benefits described
below.
c) Your Benefit Continuation, as summarized below, commences the day after
your Termination Date and continues through August 31, 2002, which will be
your official "Separation Date" for Company records.
As soon as practicable following your Termination Date and unless
otherwise deferred by you under a deferral plan provided by the Company
and/or its affiliates, you shall receive a lump sum Severance Payment of
$2,091,000.00, less withholding taxes and other applicable deductions. You
shall also receive $5,556.00 as a lump sum settlement of your Cost of
Living Adjustment ("COLA") for the period of Benefit Continuation. You
specifically acknowledge that upon receipt of your Severance Payment, any
Company obligation to make a cash severance payment to you shall have been
satisfied.
d) As soon as practicable following your Termination Date and unless
otherwise deferred by you under a deferral plan provided by the Company
and/or its affiliates, you shall receive your Cash Retention Grant from
the Retention Incentive Program in two payments for a total of
$2,614,000.00, less withholding taxes and other applicable deductions. The
Cash Retention Grant shall not be included in any benefit plan
calculations. You specifically acknowledge that upon receipt of your Cash
Retention Grant, the Company's and the Retention Trust's obligation to pay
you such a grant shall have been satisfied.
e) As soon as practicable following your Termination Date and unless
otherwise deferred by you under a deferral plan provided by the Company
and/or its affiliates, you shall receive your Departure Bonus in the
amount of $1,000,000.00, less withholding taxes and other applicable
deductions.
f) Benefit Continuation through your Separation Date is provided in order
to preserve the Company's access to you although you will have been
relieved of all your normal duties and responsibilities. You agree that
you will personally provide reasonable assistance and cooperation in
locating or obtaining information concerning the Company (past or present)
about which you are knowledgeable, and specifically, you will assist your
successor, if any, on an as needed basis.
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g) You acknowledge that as of your Termination Date, your active
employment with the Company and/or its affiliates or former affiliates
will end irrevocably and will not resume again at any time in the future.
h) Except as otherwise noted, Benefit Continuation as described herein
continues through your Separation Date regardless of whether or not you
become employed by an employer not affiliated with the Company.
2. If you die during Benefit Continuation, any survivor benefits shall be
governed by the terms of applicable individual benefit plan provisions. If
you die after the Completion Date, but before your Termination Date, all
cash payments shall be made to your beneficiary designated under the
Company's Core Life Insurance Program, unless you have specifically
elected otherwise in writing.
3. As of your Termination Date, you will cease to accrue any further
vacation. Unused 1999 vacation plus vacation for 2000 accrued in 1999 up
to your Termination Date will be paid in a lump sum as soon as practicable
following your Termination Date and is not includable for any benefit plan
calculations. Vacation accrues up to your Termination Date at 1/12 of your
vacation entitlement for each full or partial month of active employment.
Your vacation entitlement is determined as of the beginning of the
calendar year. Vacation taken prior to your Termination Date will reduce
this amount.
4. a) During Benefit Continuation, you may continue to participate in the
employee welfare benefit programs in which you participated as of your
Termination Date except as otherwise provided in this Agreement or by the
terms of the individual program. You may participate as though you were an
active employee, subject to applicable contributions by you. The term
"employee welfare benefit programs" does not include the SELECT Long Term
Disability Plan, the Annual Incentive Award Plan ("AIAP'), the Long Term
Incentive Plan ("LTIP"), the Retirement Plan for Employees of RJR Nabisco,
Inc. ("PEP") or the Capital Investment Plan ("CIP"), the dispositions of
which are detailed in other provisions of this Agreement.
Unless otherwise specified by the Company in its sole discretion, changes
in the employee welfare benefit programs after the date of this letter
will not apply to you, unless otherwise required by law. New benefit
programs which replace or supersede current programs will apply to you if
the Company chooses not to continue to make the current programs available
to employees; provided however, such employee welfare benefit programs
shall be no less
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favorable, in the aggregate, than provided to you on the date of this
Agreement.
b) The following is a summary of benefit continuation:
Your participation in the Company's Executive Medical Plan and in the
SELECT Flexible Benefits Program will continue until your Separation Date,
provided you make any required Plan contributions in the manner specified
by the Company. You will not be eligible for Short or Long Term Disability
benefits during your Benefits Continuation Period. If your Benefits
Continuation period continues into a new SELECT Plan Year, you will be
required to re-enroll in the same manner as active employees. Should you
become employed by an employer not affiliated with the Company, health
care coverage provided by your new employer will be coordinated with
health care benefits provided by the Company. If you elect COBRA
(Consolidated Omnibus Budget Reconciliation Act of 1985) continuation
coverage under SELECT after your Separation Date, the monthly premium is
equal to the full 102% of the actual plan cost. Specific costs and details
will be provided on request. You may elect COBRA coverage for 18 months.
If at the end of your Benefit Continuation, you are at least age 50 with
five (5) years of service and the Company provides retiree medical, dental
and life insurance for its retirees, you shall be eligible for such
insurance at the Company and retiree contribution rate for a retiree (i)
of your actual age and (ii) with service equal to the greater of ten (10)
years or actual years of service.
Should you have any questions about Benefit Continuation after
Headquarters is closed, you should contact Nabisco Employee Benefit
Administration at (000) 000-0000.
You are vested in the PEP. After your Termination Date, you will have an
irrevocable choice of receiving your PEP benefit as a lump sum or an
immediate annuity, or electing a deferred annuity which can commence no
earlier than age 65. Appropriate election forms will be provided to you
within two (2) months after your Termination Date.
You shall be paid a lump sum benefit of $739,828.00 (subject to final
adjustment) as soon as practicable following your Termination Date in
satisfaction of all benefits payable under all of the non-tax qualified
defined benefit plans of the Company. This payment is in lieu of any
benefit entitlement you may have under the Company's Additional Benefits
Plan or
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Supplemental Benefits Plan. The calculation of this benefit includes your
lump sum Severance Payment and credit for the period between your
Termination Date and Separation Date. You specifically acknowledge that
upon receipt of payment for your lump sum benefit, the Company's
obligation to pay a non-tax qualified defined benefit payment shall have
been satisfied.
Your lump sum Severance Payment is compensation subject to elective
contributions to CIP. If your compensation for 1999 exceeds $160,000, a
non-qualified Company matching payment will be made to you in accordance
with your elected deferral percentage and will be distributed to you as
soon as possible following your Termination Date, less withholding taxes
and other applicable deductions, unless otherwise deferred by you under a
deferral plan provided by the Company and/or its affiliates. Following
your Termination Date, you may elect to receive a distribution of your CIP
account balance in accordance with the terms of CIP. If you elect to leave
your account balance in CIP, you will retain all rights under the Plan as
a terminated employee, including the right to transfer investments between
funds and to request a distribution from CIP. You are fully vested in your
CIP account.
5. a) You will be paid the full value of your Flexible Perquisite Program for
a period of three years in a lump sum as soon as practicable following
your Termination Date. The amount of your lump sum Flexible Perquisite
payment is $142,500.00, less taxes and applicable deductions, payable as
soon as practicable following your Termination Date, unless otherwise
deferred by you under a deferral plan provided by the Company and/or its
affiliates. This lump sum payment shall not be included in any benefit
plan calculations.
b) No new car or lease will be provided during Benefit Continuation;
provided, however, the car currently leased for you by the Company shall
be transferred to you as soon as practicable following your Termination
Date, and the value of the car, as determined by the Company, shall be
grossed up for all applicable taxes. Car related expenses after the
foregoing transfer shall be your responsibility. Company car insurance
under the Flexible Perquisite Program shall be available to you during the
Benefit Continuation provided applicable premiums are paid by you.
c) Your Paragon and Group Universal Life Insurance policies may be
retained by you after your Termination Date by payment of applicable
premiums. Details regarding direct billing to you will be made available
prior to your Termination Date.
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d) If applicable, you may remain a member of the Equitable Athletic & Swim
Club until the last day of the month in which you are terminated. You may
continue as a member after your Termination Date at your own expense
without an initiation fee.
e) If you were relocated at the Company's request during or after 1989,
you may be eligible for relocation benefits to a new job location pursuant
to the Company's relocation program. Your application for relocation
benefits must be made within twelve (12) months following your Termination
Date and will be offset by any relocation benefits provided by a new
employer. Contact Nabisco Relocation with any questions at (000) 000-0000.
6. You will be paid as soon as practicable following your Termination Date an
award under the AIAP for your months of active employment during the 1999
plan year at 150% of target in the amount of $430,500.00, less taxes and
applicable deductions, unless otherwise deferred by you under a deferral
plan provided by the Company and/or its affiliates. This payment is
includable for benefit calculation purposes. Your lump sum Severance
Payment described above includes a full payment for AIAP awards for the
full period of severance, so no further payment for AIAP will be made
after your Termination Date.
7. Prior to your Termination Date, you are expected to submit Expense Reports
for all outstanding travel, entertainment and other business expenses. If
any expense report(s) reflect any amounts owing to the Company, such
expense will be deducted from payments under this Agreement, as necessary.
In addition, prior to your Termination Date you must return all Company
equipment requested from you by the Company or the value of such
equipment, as determined by the Company, shall be deducted from the
calculation of your lump sum Severance Payment.
8. a) Under LTIP, your vested Non-Qualified Stock Option Agreements may be
exercised anytime up to the exercise expiration date. Your unvested
options, if any, will be fully vested on your Termination Date. The
exercise of your stock options is governed by the terms of your
Non-Qualified Stock Option agreements. No further LTIP Awards will be made
to you.
b) Your PARS and Performance Notes will be fully vested on your
Termination Date and shall be calculated and paid as soon as practicable
following your Termination Date in accordance with your applicable PAR and
Performance Note Agreements, unless otherwise deferred by you under a
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deferral plan provided by the Company and/or its affiliates. Your
Performance Notes are includable for benefit calculation purposes.
c) Your Restricted Stock shall vest on your Termination Date and shall be
handled in accordance with the terms of your Restricted Stock Agreement.
9. You are entitled to the use of the outplacement counseling services
designated by the Company for a period of twelve (12) months after your
Termination Date for which the Company will pay the fee. Such assistance
must be started within three (3) months of your Termination Date and ends
twelve (12) months after commencement of service or upon your acceptance
of new employment, whichever comes first. This benefit may not be
converted into a cash award. You are not obligated to use this service,
but the Company urges you to consider this service as one of the avenues
to finding new employment.
10. If on your Termination Date you are an active participant in the Tuition
Refund Plan and all of the requirements of the Plan are fulfilled, you
will continue to be eligible for tuition aid reimbursement during Benefit
Continuation for courses completed during Benefit Continuation. Promissory
Notes existing on your Termination Date shall be deemed paid.
If otherwise eligible, you may continue to participate or newly enroll in
the MedSave Retiree Savings Plan and Scholastic Savings Plan during
Benefit Continuation. Upon your Separation Date, no further contributions
will be permitted; however, your account(s) including any applicable
Company match will be maintained with continued interest growth.
Distribution of your account(s) will be processed in accordance with
program rules for severed employees.
In addition, you may apply for any of the education loans available in the
RJR Nabisco Scholastic Loan Program during Benefit Continuation. You will
continue to be eligible for the interest credit reimbursement feature of
the RJRN Plus loan if you are still on Benefit Continuation at the end of
the School Year. You are not eligible for credit reimbursement after your
Separation Date.
11. a) The Company shall hold you harmless from any golden parachute tax
imposed by any federal, state or local taxing authority as a result of any
of the payments made pursuant to this Agreement. Payment of such golden
parachute tax plus any additional taxes imposed as a result of the payment
by the Company of such golden parachute tax, shall be made at the time you
are
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required to pay such golden parachute tax. You agree to cooperate fully
with the Company in any protest or appeal by the Company in the event of
the imposition of such golden parachute tax.
b) You shall be covered by the same liability and indemnification programs
afforded to other officers for acts that occurred while you were an
officer of the Company and/or its affiliates.
You shall maintain the terms and conditions of this Agreement in
confidence. In addition, you will not disclose to any other employer or
person any trade secrets or other proprietary, non-public, or confidential
information pertaining to the Company. You will return all Company
information or documents in whatever form, except information relating to
your personal employee benefits or executive compensation. In accordance
with normal ethical and professional standards, you will refrain from
taking actions or making statements, written or oral, which defame the
goodwill or reputation of the Company, its directors, officers, executives
and employees or which constitute willful misconduct under circumstances
where it is reasonable for you to anticipate or to expect that the natural
consequences of such conduct by you will be to affect adversely the
business or reputation of the Company or its affiliates, or the morale of
other employees.
12. (a) You agree that you will personally provide reasonable assistance and
cooperation to the Company, RIR Nabisco, Inc., their predecessors,
successors and assigns in activities related to the prosecution or defense
of any pending or future lawsuits or claims involving the Company, RJR
Nabisco, Inc. or X. X. Xxxxxxxx Tobacco Company. (b) You will promptly
notify the Company if you receive any requests from anyone other than an
employee or agent of the Company for information regarding the Company or
if you become aware of any potential claim or proposed litigation against
the Company, RJR Nabisco, Inc. or X. X. Xxxxxxxx Tobacco Company. (c) You
will refrain from providing any information related to any claim or
potential litigation against the Company, RJR Nabisco, Inc. or X. X.
Xxxxxxxx Tobacco Company to any non-Company representatives without either
the Company's written permission or being required to provide information
pursuant to legal process. (d) If required by law to provide sworn
testimony regarding any Company-related matter, you will consult with and
have Company-designated legal counsel present for such testimony. (e) The
Company will be responsible for the costs of such designated counsel and
you will bear no cost for same. (f) You will confine your testimony to
items about which you have knowledge rather than speculation, unless
otherwise directed by legal process. (g) You will cooperate with the
Company's attorneys to assist their
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efforts, especially on matters you have been privy to, holding all
privileged attorney-client matters in strictest confidence.
Nothing in sentences (c)-(g) of the above paragraph is intended to apply
to governmental or judicial investigations, including, but not limited to,
an investigation by any agency or department of the Federal or state
government, any hearing before a committee of the Congress of the United
States or of a state legislature, any investigation or proceeding by or of
a special prosecutor, or any proceeding by or before a grand jury;
provided, however, the Company will reimburse you for legal expenses
including, but not limited to, the cost of any attorney reasonably
acceptable to the Company and other out-of-pocket expenses if you are
compelled to appear in a governmental or judicial investigation and such
appearance arises out of your previous employment by the Company or RJR
Nabisco, Inc.
13. Except as otherwise stated herein, no benefits (other than those provided
by a tax-qualified plan or trust) or promise hereunder shall be secured by
any specific assets of the Company. The payments under this Agreement
shall not be assigned by you or anticipated in any way and any such
attempted assignment will be void.
14. IN CONSIDERATION OF THE COMPENSATION AND BENEFITS SET FORTH IN THIS
AGREEMENT, YOU VOLUNTARILY, KNOWINGLY AND WILLINGLY RELEASE AND FOREVER
DISCHARGE THE COMPANY, ITS PARENTS, SUBSIDIARIES AND AFFILIATES, TOGETHER
WITH THEIR RESPECTIVE OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES AND
AGENTS, AND EACH OF THEIR PREDECESSORS, SUCCESSORS AND ASSIGNS, FROM ANY
AND ALL CHARGES, COMPLAINTS, CLAIMS, PROMISES, AGREEMENTS, CONTROVERSIES,
CAUSES OF ACTION AND DEMANDS OF ANY NATURE WHATSOEVER WHICH AGAINST THEM
YOU OR YOUR EXECUTORS, ADMINISTRATORS, SUCCESSORS OR ASSIGNS EVER HAD, NOW
HAVE OR HEREAFTER CAN, SHALL OR MAY HAVE BY REASON OF ANY MATTER, CAUSE OR
THING WHATSOEVER ARISING TO THE TIME YOU SIGN THIS AGREEMENT. YOU FURTHER
AGREE THAT YOU WILL NOT SEEK OR BE ENTITLED TO ANY AWARD OF EQUITABLE OR
MONETARY RELIEF IN ANY PROCEEDING OF ANY NATURE BROUGHT ON YOUR BEHALF
ARISING OUT OF ANY OF THE MATTERS RELEASED BY THIS PARAGRAPH. THIS RELEASE
INCLUDES, BUT IS NOT LIMITED TO, ANY RIGHTS OR CLANS RELATING IN ANY WAY
TO YOUR
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EMPLOYMENT RELATIONSHIP WITH THE COMPANY, OR THE TERMINATION THEREOF, OR
UNDER ANY STATUTE, INCLUDING THE AGE DISCRIMINATION IN EMPLOYMENT ACT,
TITLE VII OF THE CIVIL RIGHTS ACT, THE AMERICANS WITH DISABILITIES ACT,
THE NEW YORK STATE AND CITY HUMAN RIGHTS LAWS OR ANY OTHER FEDERAL, STATE
OR LOCAL LAW.
15. By signing this Agreement, you represent that you have not commenced any
proceeding against the Company in any forum (administrative or judicial)
concerning your employment or the termination thereof. You further
acknowledge that you were given sufficient notice under the Worker
Adjustment and Retraining Notification Act (the "WARN Act") and that the
termination of your employment does not give rise to any claim or right to
notice, or pay or benefits in lieu of notice under the WARN Act. In the
event any WARN Act issue does exist or arises in the future, you agree and
acknowledge that the payments and benefits set forth in this Agreement
shall be applied to any pay or benefits in lieu of notice required by the
WARN Act, provided that any such offset shall not impair or affect the
validity of any provision of this Agreement, including the release set
forth in paragraph 14.
16. The Company advises you that you may wish to consult with an attorney of
your choosing prior to signing this Agreement You understand and agree
that you have the right and have been given the opportunity to review this
Agreement and, specifically, the release in paragraph 14, with an attorney
of your choice should you so desire. You have entered into this Agreement
freely, knowingly and voluntarily and specifically in consideration of the
additional benefits provided to you under the Agreement.
17. You will be reimbursed for travel, food, lodging or similar out-of-pocket
expense incurred at the Company's request in discharging any of your
obligations under this Agreement. If the Company reasonably determines
that you have violated any of your obligations under this Agreement, then
the Company may, at its option, terminate the Benefit Continuation and any
other benefits hereunder; and the Company may demand the return of all
payments already made and you hereby agree to return such payments upon
such demand. If after such demand you fail to return said payments, the
Company has the right to commence judicial proceedings against you to
recover any and all of its attorney's fees and costs. The Company, or its
designated representative thereof shall have exclusive authority to
interpret this Agreement and the Headquarters Protection Program. The
decision of the Company, or its designated representative, with respect to
any question
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arising as to the employees selected to participate in the Protection
Program, the amount, term, form and time of payment of benefits under this
Agreement or any other matter concerning this Agreement shall be final,
conclusive and binding on both you and the Company.
18. This Agreement may not be amended except in writing signed by you and the
Company and no amendments or modifications are contemplated at this time.
This Agreement shall not be construed to provide any rights to anyone
other than you and the Company.
19. If you have any questions about this Agreement, contact Xxxx Xxxxxxx.
20. You have at least twenty-one days to consider the terms of this Agreement,
although you may sign and return it sooner if you wish. This Agreement may
be revoked by you for a period of seven (7) consecutive calendar days
after you have signed and dated it, and after such seven (7) days, it
becomes final.
Please indicate your acceptance of the terms of this Agreement by signing this
letter and returning it to me.
Sincerely,
NABISCO GROUP HOLDINGS CORP.
/s/ Xxxxxx X. Xxxxxxxx
----------------------------------------
Xxxxxx X. Xxxxxxxx
Senior Vice President, Human Resources
and Administration
Understood and Agreed:
/s/ Xxxxx X. Xxxxxxx
-----------------------------------
Date: 9/30/99
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