EXHIBIT 10.13
DOW JONES & COMPANY, INC.
SEPARATION PLAN FOR SENIOR MANAGEMENT
1. Purpose of the Plan: This Separation Plan for Senior Management
provides benefits to eligible executives in the event that their employment
with the Company is to be terminated under a variety of circumstances.
The purpose of the Plan is to assure eligible executives that they will
be dealt with fairly in such circumstances in order to encourage such
executives to remain in the employ of the Company and to devote their
full attention and energies to its best interests. This Plan was approved
by the Board of Directors of the Company on September 16, 1998, effective
as of that date.
2. Notice of Intent to Terminate: If the Company intends to
terminate the employment of any employee in salary grades 1 through 9
(an "eligible executive") for any reason other than for cause (as
hereinafter defined), or if an eligible executive intends to terminate
his or her employment with the Company because of constructive termination
(as hereinafter defined), then the Company or such eligible executive, as
the case may be, shall deliver to the other a written notice to that
effect (a "notice of intent").
3. Definition of "Cause": An eligible executive shall be
deemed to be terminated for "cause" if he or she is to be terminated
because he or she (i) has been convicted of, or has pleaded guilty to,
a felony, (ii) is abusing alcohol or narcotics, (iii) has committed
an act of fraud, material dishonesty or gross misconduct in connection
with the Company's business (including, without limitation, an act that
constitutes a material violation of the Company's Code of Conduct), or
(iv) has willfully and repeatedly refused to perform his or her duties
after reasonable demand for such performance has been made by the Company.
4. Definition of "Constructive Termination": An eligible
executive may deliver a notice of intent to terminate because of
"constructive termination" if, without his or her prior consent,
(i) such executive's position or duties are substantially reduced,
(ii) such executive's base salary, target bonus opportunity or incentive
compensation opportunity is materially reduced, (iii) other employee
benefits afforded to such executive are materially reduced, (iv) such
executive's salary grade is reduced below grade 9 in the case of
executives in salary grades 5 through 9, or below grade 4 in the case of
executives in salary grades 1 through 4, or (v) this Plan is terminated
or amended in any material respect.
Notwithstanding the foregoing, no reduction in base salary, target
bonus opportunity or incentive compensation opportunity, or other employee
benefits, shall be deemed to constitute constructive termination if such
reduction is made in conjunction with similar reductions generally
applicable to all eligible executives. In addition, no change in salary
grade level shall be deemed to constitute constructive termination if,
concurrently with such reduction (and any subsequent reduction), the
Company agrees to continue to extend the benefits of this Plan to such
executive at the same level and on the same terms as applied to such
executive prior to such reduction in salary grade. A notice of intent
to terminate because of constructive termination must be given by
the executive in question within six (6) months after the occurrence of
the event giving rise to the right to give such notice of intent.
5. Exclusive Separation Plan for Eligible Executives; Change in
Control: This Plan is intended as the exclusive separation plan for
eligible executives whose service with the Company is to be terminated as
described in Section 2 and who execute and deliver the non-competition
agreement, waivers and releases described in Section 6. Accordingly, such
executives shall not be entitled to any benefits under the Company's
Severance Pay Plan or any other similar severance or separation plan or
arrangement.
This Plan is not intended to apply in the case of terminations of
employment by eligible executives because of death, disability, or
voluntary retirement or resignation, except as provided in the case of the
death or disability of an executive during the period he or she is
receiving payments pursuant to Section 8, and except as provided in the
case of "constructive termination." In addition, this Plan is not
intended to apply in the case of terminations that result from, or occur
in connection with, a change in control of the Company, it being the intent
of the Company to provide separation benefits to eligible executives in
the case of a change in control of the Company that are superior to those
set forth in this Plan. A "change in control" will be deemed to have
occurred at such time as there is a transfer of the power to elect a
majority of the Company's Board of Directors from the persons and
entities who constituted the Company's "parent" on September 16, 1998 to
persons or entities unaffiliated with such parent, or at such other time
as such parent ceases to be the Company's parent.
6. Non-Competition Agreement; Waivers and Releases: As
promptly as possible, the executive in question and the Company shall
execute and deliver (a) an agreement pursuant to which such executive
agrees not to compete with the Company for the18 or 24 month period
during which such executive is receiving payments pursuant to Section 8,
and (b) customary mutual waivers and releases. Such agreement, waivers
and releases shall be in such form as the Company may reasonably specify;
may require the executive to take such steps as the Company may reasonably
require to insure an orderly transition of the executive's duties
(including the execution and delivery by the executive of written
resignations from such offices, directorships and other positions as the
Company may require); and shall provide that the Company may cease
payments under Section 8 in the event of any material breach by the
executive of the confidentiality or non-competition covenants contained
in such agreement.
7. Payment of Salary and Bonus for the Period prior to delivery of
a Notice of Intent: The Company shall pay the affected executive's base
salary in accordance with the Company's normal payroll practices through
the end of the month during which a notice of intent is delivered hereunder.
In addition, the Company shall pay the executive promptly after the end of
the year in which such notice of intent is delivered a pro rata portion of
the annual bonus that the executive would have received had he or she
continued to perform duties for the entire year, pro rated through the end
of the month in which a notice of intent is delivered hereunder.
8. Payment of Salary and Target Bonus during the Period
following delivery of a Notice of Intent: Provided that the affected
executive has executed and delivered the non-competition agreement,
waivers and releases described in Section 6, the Company shall continue
to pay the executive his or her regular salary in accordance with the
Company's normal payroll practices commencing with the regular salary
payment next following the month in which a notice of intent is delivered
and continuing (a) through the 24th month following such month if the
executive is in salary grade 1, 2, 3 or 4, or (b) through the 18th month
following such month if the executive is in salary grade 5, 6, 7, 8 or 9.
In addition, the Company will pay the executive monthly during such 18 or
24 month period, as the case may be, an amount equal to one-twelfth of the
amount of his or her annual "target" bonus that was in effect for the year
in which the notice of intent was delivered. If an executive becomes
disabled or dies during the period he or she is receiving payments hereunder,
such payments will continue to be made thereafter for the balance of the
18 or 24 month period, as the case may be, to such executive (in the case
of disability) or such executive's estate or designated beneficiary (in
the case of death).
For the avoidance of doubt, it is the purpose of this Plan to
provide that each eligible executive who is the subject of a notice of
intent hereunder, and who executes and delivers the non-competition
agreement, waivers and releases called for hereby, will receive continued
payment of his or her base salary and target bonus for 24 months (in the
case of executives in salary grades 1 through 4) and 18 months (in the
case of executives in salary grades 5 through 9) following the month in
which such notice of intent was delivered.
9. Continuation of Certain Employee Benefits: During the period
that an executive is receiving payments of salary and target bonus pursuant
to Section 8, such executive shall continue as an employee of the Company
for purposes of, and shall continue to participate in, the following
employee benefit plans and programs (including any successors to such
plans and programs): the profit-sharing retirement and supplementary
benefit plans; the health and dental care plans; and the executive death
and group life, disability and accident insurance plans, provided that
coverage under any health, dental or other insurance plan will cease if
the executive becomes covered by another such plan. Coverage for the
executive in question under the executive death and group life and
disability insurance plans will be maintained at the levels in effect
for such executive immediately prior to the delivery of the notice of
intent. The Company's contributions on behalf of the executive to the
profit-sharing retirement and supplementary benefit plans, and any
successors thereto, will be based upon the amounts paid to such executive
for the periods in question pursuant to Sections 7 and 8.
10. Stock Options; Contingent Stock Rights: (a) Stock Options.
Except as otherwise provided in the case of executives who qualify for
retirement as provided in Section 12:
(i) vested stock options held by an executive who is the subject
of a notice of intent hereunder shall remain exercisable in accordance
with their terms until the earlier of (x) the expiration of the option
and (y) the last day (the "termination date") of the month during which
the final payment of salary and target bonus under Section 8 is due and
payable;
(ii) unvested stock options held by such an executive shall
continue to vest, and once vested shall be exercisable, in accordance
with their terms until the termination date; and
(iii) all vested and unvested stock options held by such an
executive will terminate on the termination date.
(b) Contingent Stock Rights. An executive who is the subject of
a notice of intent hereunder shall receive a pro rated final award with
respect to each of his or her outstanding grants of contingent stock rights
under the Long Term Incentive Plan (or any predecessor or successor thereto)
equal to (i) the maximum number of shares of common stock covered by such
grant, multiplied by (ii) a fraction the numerator of which is the aggregate
number of shares granted as final awards to all participants under the
Long Term Incentive Plan (excluding the executive in question) with
respect to the performance period covered by such grant, and the
denominator of which is the aggregate of the maximum number of shares
covered by all grants held by all such participants (excluding such
executive) with respect to such performance period, multiplied further
by (iii) a fraction the numerator of which is the number of months from
the commencement of the performance period in question through and
including the termination date as defined in Section 10(a), and the
denominator of which is the total number of months in such performance
period. Such final award shall be paid to the executive in accordance
with the Long Term Incentive Plan after the end of the performance period
in question at the same time as final awards are delivered to the other
participants in the Long Term Incentive Plan. (c) No further awards.
An executive who is the subject of a notice of intent hereunder shall
not be eligible thereafter to receive new stock option grants or
new contingent stock rights awards under the Long Term Incentive Plan or
otherwise.
11. Financial Counseling and Outplacement Services: An
executive who is the subject of a notice of intent hereunder shall be
entitled to receive financial counseling services during the first 12
months that he or she is receiving payments pursuant to Section 8; the
cost of such services shall be paid by the Company up to such reasonable
amount as the Company may specify. In addition, such an executive shall
be entitled to receive outplacement services at a level commensurate with
the executive's position; the cost of such services shall be paid by the
Company up to an amount equal to 20% of such executive's annual base
salary in effect on the date the notice intent is delivered.
12. Termination of Employment; Retiree Status: An executive
who is the subject of a notice of intent hereunder shall cease to be an
employee of the Company on the termination date as defined in Section
10(a). If such executive is 55 years of age or older on such date, and
if he or she has accumulated 10 or more years of service with Dow Jones
as of such date (including in computing such years of service the 18 or
24 months, as the case may be, that the executive received payments under
Section 8), then such executive's employment shall be deemed to have been
terminated on the termination date because of retirement, and such
executive shall thereupon be deemed to be a retiree for purposes of the
Company's profit sharing and other retirement plans; health, life,
executive death and disability insurance plans; stock option, deferred
compensation and supplementary benefit plans; any predecessors or
successors to such plans; and all other plans and programs then or
thereafter in effect for the Company's retirees and for which such
executive qualifies.
Without limiting the generality of the foregoing:
(a) Such executive shall participate as a retiree in the retiree
health plan, and the 18 or 24 months, as the case may be, that the
executive received payments under Section 8 shall be credited to such
executive's years of service for purposes of determining his or her
benefit levels under such plan.
(b) All vested stock options held by such executive shall continue
to be exercisable in accordance with their terms until the expiration
dates set forth in the respective stock option agreements. In addition,
all unvested stock options held by such executive shall continue to vest
and, once vested, shall similarly be exercisable in accordance with their
terms until the expiration dates set forth in the respective stock
option agreements.
13. Claims Procedure: Benefits will be provided as specified in
this Plan to each eligible executive who is the subject of a notice of
intent hereunder. If such an executive believes that he or she has not
been provided with benefits as and when due under this Plan, then such
executive may pursue his or her remedies under the claims and appeals
procedures set forth in the summary plan description applicable to the
Company's health and life insurance plans (which claims and appeals
procedures are hereby incorporated herein by reference); provided,
however, that requests for reconsideration under this Plan must
be filed with the Company's Vice President/Employee Relations or General
Counsel, or such other officer as the Company's Board of Directors may
designate, as the executive may elect, within sixty (60) days after the
date that he or she should have received such benefits.
14. Termination and Amendments; Miscellaneous: (a) This Plan
may be terminated or amended by the Board of Directors of the Company
at any time or from time to time, provided that no such termination or
amendment shall terminate, amend or other- wise affect the obligations
of the Company hereunder to any executive as to whom a notice of intent
has theretofore been delivered, or to any executive who elects to
deliver a notice of intent (as provided in Section 4) because of such
termination or amendment of this Plan; it being the intent of the
Company that this Plan will remain in full force and effect with
respect to, and for the benefit of, such executives notwithstanding
its termination or amendment.
(b) Except as otherwise provided herein, the provisions of this
Plan, and any payment provided for hereunder, shall not reduce any
amounts otherwise payable, or in any way diminish an executive's
existing rights, or rights which would accrue solely as a result of
the passage of time, under any benefit plan, employment agreement
or other contract, plan or arrangement.
(c) The Company may withhold from any amounts payable under this
Plan (i) such federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation and (ii) such
amounts, if any, as such executive owes the Company.
(d) The failure to insist upon strict compliance with any provision
hereof, or the failure to assert any right hereunder, shall not be deemed
to be a waiver of such provision or right or of any other provision or
right under this Plan.
(e) All payments to be made hereunder shall be paid from the
Company's general funds and no special or separate fund shall be established
and no segregation of assets shall be made to assure the payment of such
amounts. Nothing contained in this Plan shall create or be construed to
create a trust of any kind, or a fiduciary relationship between the
Company and any eligible executive or any other person with respect to
amounts to be paid hereunder.
(f) If the Company determines that it is impossible or impractical to
provide benefits hereunder pursuant to plans or programs maintained for its
employees or executives generally, the Company shall provide substantially
equivalent benefits to affected executives through other means. For
example, if for any reason the Company determines that it is impossible
or impractical to make contributions on behalf of eligible executives
to any tax qualified contributory retirement plan, the Company will
credit the amount it would otherwise have contributed to such plan to a
deferred compensation or similar account for the benefit of such executive.
Similarly, if for any reason the Company determines that it is impossible
or impractical to provide life, health or other insurance coverage to an
executive under existing employee, executive or other group plans, the
Company will purchase or otherwise provide such coverage separately for
any affected executive. If any such arrangement results in the recognition
of taxable income by an executive, the Company will reimburse such executive
for all taxes paid on such income and for all taxes paid on all
reimbursements of taxes hereunder.
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