EXHIBIT 10.5
- ------------
JONES LANG LASALLE INCORPORATED
SEVERANCE PAY PLAN
(As Amended and Restated Effective May 1, 2004)
JONES LANG LASALLE INCORPORATED
SEVERANCE PAY PLAN
AMENDED AND RESTATED EFFECTIVE MAY 1, 2004
I, Nazneen Razi, am the Chief Human Resources Officer for Jones Lang
LaSalle Americas, Inc., and the Administrator of the Jones Lang LaSalle
Incorporated Severance Pay Plan (the "Plan"). The Plan originally was
established effective June 1, 1998. Pursuant to the authority granted to
me under subsection 7.7 of the Plan, the Plan is hereby amended and
restated in the form attached hereto, with an "effective date" of May 1,
2004. All previous versions of the Plan are superseded by the attached
Plan, as amended and restated effective May 1, 2004.
- ---------------------------------
Nazneen Razi
Chief Human Resources Officer
Jones Lang LaSalle Americas, Inc.
Dated:
-------------------
TABLE OF CONTENTS
PAGE
----
SECTION 1 Introduction. . . . . . . . . . . . . . . . . . . . . . 1
1.1 Purpose.. . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Effective Date, Plan Year.. . . . . . . . . . . . . . . 1
1.3 Employers.. . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Administration. . . . . . . . . . . . . . . . . . . . . 1
1.5 Plan Supplements. . . . . . . . . . . . . . . . . . . . 2
SECTION 2 Eligibility for Participation . . . . . . . . . . . . . 2
2.1 Participants. . . . . . . . . . . . . . . . . . . . . . 2
2.2 Conditions of Ineligibility.. . . . . . . . . . . . . . 2
SECTION 3 Plan Benefits . . . . . . . . . . . . . . . . . . . . . 4
3.1 Pay.. . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.2 Full Years of Continuous Service. . . . . . . . . . . . 4
3.3 Base Severance. . . . . . . . . . . . . . . . . . . . . 4
3.4 Enhanced Severance. . . . . . . . . . . . . . . . . . . 5
3.5 Conditions to Payment of Enhanced
Severance Benefits. . . . . . . . . . . . . . . . . . . 8
3.6 Repayments and Forfeitures. . . . . . . . . . . . . . . 8
3.7 Offset for Other Benefits or Amounts Due. . . . . . . . 8
3.8 Non-Solicitation of Employees and Clients.. . . . . . . 9
3.9 Continuation Coverage Benefits. . . . . . . . . . . . . 9
3.10 Benefits for Former Motorola Employees. . . . . . . . . 9
3.11 Benefits for Former Procter & Gamble Employees. . . . . 10
SECTION 4 Payment of Benefits.. . . . . . . . . . . . . . . . . . 10
4.1 Release.. . . . . . . . . . . . . . . . . . . . . . . . 10
4.2 Form of Payment.. . . . . . . . . . . . . . . . . . . . 10
4.3 Death Benefits. . . . . . . . . . . . . . . . . . . . . 10
SECTION 5 Financing Plan Benefits.. . . . . . . . . . . . . . . . 10
SECTION 6 Reemployment. . . . . . . . . . . . . . . . . . . . . . 11
i
PAGE
----
SECTION 7 Miscellaneous.. . . . . . . . . . . . . . . . . . . . . 11
7.1 Information to be Furnished by Participants.. . . . . . 11
7.2 Employment Rights.. . . . . . . . . . . . . . . . . . . 11
7.3 Employer's and Administrator's Decision Final.. . . . . 11
7.4 Evidence. . . . . . . . . . . . . . . . . . . . . . . . 11
7.5 Uniform Rules.. . . . . . . . . . . . . . . . . . . . . 11
7.6 Gender and Number.. . . . . . . . . . . . . . . . . . . 11
7.7 Action by Employer. . . . . . . . . . . . . . . . . . . 12
7.8 Controlling Laws. . . . . . . . . . . . . . . . . . . . 12
7.9 Interests Not Transferable. . . . . . . . . . . . . . . 12
7.10 Mistake of Fact.. . . . . . . . . . . . . . . . . . . . 12
7.11 Severability. . . . . . . . . . . . . . . . . . . . . . 12
7.12 Withholding.. . . . . . . . . . . . . . . . . . . . . . 12
7.13 Effect on Other Plans or Agreements.. . . . . . . . . . 12
7.14 Non-Duplication.. . . . . . . . . . . . . . . . . . . . 12
7.15 No Vested Rights. . . . . . . . . . . . . . . . . . . . 12
SECTION 8 Amendment and Termination . . . . . . . . . . . . . . . 13
8.1 Amendment and Termination.. . . . . . . . . . . . . . . 13
8.2 Notice of Amendment or Termination. . . . . . . . . . . 13
ii
JONES LANG LASALLE INCORPORATED
SEVERANCE PAY PLAN
(As Amended and Restated Effective May 1, 2004)
SECTION 1 INTRODUCTION.
1.1 PURPOSE.
Jones Lang LaSalle Incorporated (the "Company") has established the
Jones Lang LaSalle Incorporated Severance Pay Plan (the "Plan") to enable
the Company and its subsidiaries and certain affiliates that adopt the Plan
with the Company's consent to provide severance benefits to eligible
employees who involuntarily terminate employment with the Company or its
subsidiaries or certain affiliates. Severance benefits for eligible
employees shall be determined exclusively under the Plan. The Plan, as set
forth herein, shall constitute an "employee welfare benefit plan" within
the meaning of Section 3(1) of the Employee Retirement Income Act of 1974
("ERISA").
1.2 EFFECTIVE DATE, PLAN YEAR.
The Plan was originally established effective June 1, 1998. The
"effective date" of the Plan, as amended and restated, is May 1, 2004. The
terms of the Plan apply, on and after the effective date, to each
participant who terminates employment with an Employer on or after that
date, and such employees will be entitled to benefits only if they satisfy
each of the Plan's requirements for participation and benefits. A "Plan
Year" is the 12-month period beginning on January 1 and ending on the
following December 31.
1.3 EMPLOYERS.
Any subsidiary or affiliate of the Company may adopt the Plan with
the Company's consent. A "subsidiary" of the Company is any corporation
more than 50 percent of the voting stock of which is owned, directly or
indirectly by the Company. An "affiliate" of the Company is any business
entity in which the Company does not own more than 50 percent of the voting
stock, but which exists to spend all or a substantial part of its time to
service the Company or its subsidiaries. Currently, Jones Lang LaSalle
Americas, Inc. and LaSalle Investment Management, Inc. are the only
participating employers in the Plan other than the Company. Thus, the
Company, Jones Lang LaSalle Americas, Inc. and LaSalle Investment
Management, Inc. are referred to below collectively as the "Employers" and
sometimes individually as an "Employer."
1.4 ADMINISTRATION.
The Plan is administered by the Chief Human Resources Officer of
Jones Lang LaSalle Americas, Inc. (the "Administrator"). The
Administrator, from time to time, may adopt such rules and regulations as
may be necessary or desirable for the proper and efficient administration
of the Plan and as are consistent with the terms of the Plan. The
Administrator, from time to time, may also appoint such individuals to act
as the Company's representatives as the Administrator considers necessary
or desirable for the effective administration of the Plan. In
administering the Plan, the Administrator shall have the discretionary
authority to construe and interpret the provisions of the Plan and make
factual determinations thereunder, including the authority to determine the
eligibility of employees and the amount of benefits payable under the Plan.
The Administrator shall have the discretionary authority to grant or deny
benefits under this Plan. Benefits under this Plan will be paid only if
the Administrator decides in his or her discretion that the applicant is
entitled to them. Any notice or document required to be given or filed
with the Company will be properly given or filed if delivered or mailed, by
registered mail, postage prepaid, to the Company, attention Severance Pay
Plan Administrator, at Jones Lang LaSalle Incorporated, 200 East Randolph
Drive, Chicago, Illinois 60601.
1
1.5 PLAN SUPPLEMENTS.
The provisions of the Plan may be modified by supplements to the
Plan. The terms and provisions of each supplement are a part of the Plan
and supersede the provisions of the Plan to the extent necessary to
eliminate inconsistencies between the Plan and the supplement(s).
SECTION 2 ELIGIBILITY FOR PARTICIPATION
2.1 PARTICIPANTS.
Subject to the conditions and limitations of the Plan, the Plan is
applicable to each regular employee whose employment with the Employer is
terminated for reasons described below, and who is not otherwise ineligible
for severance pay under subsection 2.2. In addition, the Plan is
applicable to GEC Participants as defined in subsection 3.4(e) to the
extent provided therein. A "regular employee" means an employee of an
Employer who is eligible for coverage under the Employer's medical benefit
plan, who spends all or substantially all of his or her time on Employer
matters, and who is not covered by a written employment agreement or
severance agreement, unless such agreement specifically provides for
participation in the Plan. Notwithstanding the foregoing, a "regular
employee" also includes: (i) "Hired Employees" as that term is defined in
the February 25, 2002 Employee Matters Agreement between Jones Lang LaSalle
Americas, Inc., LPI Service Corporation, and Motorola, Inc. (the
"Agreement") (hereinafter referred to as "Former Motorola Employees"); and
(ii) Janet Kissel and Timothy McParlane (hereinafter referred to as "Former
Procter & Gamble Employees"). The Plan does not apply to the following
employees of an Employer:
(a) those who are covered by a collective bargaining agreement;
(b) those who are performing services for an Employer pursuant to
the terms of an individual agreement (i.e., as an independent
contractor) or a leasing arrangement with another entity (i.e.,
as a leased employee); and
(c) except in the case of the GEC Participants, those who perform
all or most of their services outside the United States.
A regular employee described above who satisfies each of the conditions and
limitations of the Plan (including subsection 2.2) will become a
participant in the Plan on the date the participant's employment with an
Employer ends due to involuntary termination on account of (1) job
elimination, (2) permanent reduction in work force, or (3) permanent shut
down of a facility, department or subdivision. The Plan Administrator
shall have sole and exclusive discretion to determine whether an
involuntary termination is on account of any such event. A GEC Participant
will also become a participant in the Plan on the date he or she becomes
eligible for benefits under subsection 3.4(e).
2.2 CONDITIONS OF INELIGIBILITY.
An otherwise eligible employee SHALL NOT BE ELIGIBLE for severance
pay under the Plan if:
(a) employment with the Employer terminates by reason of discharge
for cause including, but not limited to, violations of the
Company's policies or Code of Business Ethics, willful or
grossly negligent breach of the participant's duties as an
employee of the Employer, fraud, embezzlement, theft,
falsification of documents, use or distribution on premises of
illegal drugs, refusal to co-operate with an investigation, or
any other similar dishonest conduct;
2
(b) employment with the Employer terminates involuntarily as a
result of poor performance, as determined by the Plan
Administrator;
(c) employment with the Employer terminates by reason of death of
the employee;
(d) employment with Employer terminates voluntarily for any reason,
including retirement, resignation, or job abandonment;
(e) at the time of his or her termination, the employee is entitled
to any form of disability benefit, salary continuation or
workers' compensation, provided however, that an employee whose
disability benefits, salary continuation or workers'
compensation ends and who cannot be placed in employment with
an Employer shall then become eligible for severance pay under
the Plan;
(f) the employee is on temporary layoff or an authorized leave of
absence, provided however, that an employee who returns from
temporary layoff or an authorized leave of absence and who
cannot be placed in employment with an Employer shall be
eligible for severance pay, subject to the limitations of the
Plan;
(g) Employment with an Employer is involuntarily terminated after
the employee refuses a position with an Employer, a subsidiary,
an affiliate, a client, or a company that takes over a client
assignment that an Employer loses, provided that such position
is reasonably comparable in responsibility and salary, and is
in the same general location (the Administrator shall have sole
discretion to determine whether the position offered
constitutes a "reasonably comparable" position for purposes of
this subparagraph);
(h) the employee has not remained employed with an Employer until
the date of any qualifying job elimination, permanent reduction
in work force, or permanent shut down of a facility, department
or subdivision, regardless of whether an advance announcement
was made before such event. If an employee does not remain
employed with an Employer until the last work day of an event
described in this subparagraph, no benefits under the Plan are
payable to the employee;
(i) the Plan is terminated, whether or not the Company provided
prior notice concerning the termination of the Plan;
(j) an employee's employment is terminated in conjunction with the
sale or transfer (whether of stock or assets) of all or any
part of the business of an Employer;
(k) an employee takes a position with the same or another Employer,
a subsidiary, an affiliate of an Employer, or a client or
company that takes over a client assignment that the Employer
loses;
(l) employment with an Employer terminates involuntarily as a
result of the loss of a property or facility management
assignment within the Corporate Property Services, Leasing &
Management or Retail business units, as determined in the sole
discretion of the Administrator. For purposes of this
subparagraph, loss of a property or facility management
assignment shall include the resignation or relinquishment by
an Employer of a property or facility management assignment;
3
(m) an employee is terminated after a client of the Employer
requests that the employee cease providing services at the
client's premises;
(n) except as provided in subsection 3.4(e) in the case of a GEC
Participant, an employee is entitled to severance benefits
under any other plan, program or arrangement maintained by an
Employer.
Except as provided in subsection 3.4(e), in no event shall any
participant's severance pay benefit exceed an amount equal to 24 months of
the participant's base pay.
SECTION 3 PLAN BENEFITS
3.1 PAY.
"Pay" for purposes of the Plan shall mean:
(a) for salaried employees, the participant's regular base monthly
salary (excluding any target bonus and/or value added
compensation, cost of living adjustment ("COLA"), or any other
type or form of compensation); or
(b) for hourly employees, monthly pay determined by multiplying the
participant's base hourly compensation rate by the monthly
average of the number of regularly scheduled work days in the
three calendar months preceding the participant's termination
of employment.
Pay rates will be the rates in effect on a participant's last date of
employment with an Employer. Any performance or merit reviews that are
pending or in process shall not affect the amount of any severance pay
benefit. In determining the amount of a participant's weekly pay for
purposes of subsection 3.4, the monthly amounts determined above shall be
multiplied by twelve, then divided by a factor of 52.
3.2 FULL YEARS OF CONTINUOUS SERVICE.
A participant's "full years of continuous service" for purposes of
the Plan shall mean the number of completed twelve-consecutive month
periods, prior to his or her employment termination date, measured from the
participant's last date of hire by an Employer, determined in accordance
with the Employer's personnel records. No fractional years of service are
counted under the Plan. An employee's service remains "continuous" despite
a break in service, provided the employee has incurred only one break in
service and it is less than 12 months in duration, and such employee repays
any severance benefit paid by the Employer or subsidiary attributable to
such service before the break in service. For purposes of the preceding
sentence, and disregarding fractional years, an employee's number of full
years of continuous service:
(a) before such a break in service, and
(b) after such a break in service
shall be added together and the sum shall be the employee's number of full
years of continuous service.
3.3 BASE SEVERANCE.
A participant who is eligible for severance pay under the Plan shall
be entitled to receive as base severance pay an amount equal to one-half
month of Pay as of the date of his or her termination from the Employer.
4
3.4 ENHANCED SEVERANCE.
In addition to the base severance pay that an eligible employee is
entitled to receive under the subsection 3.3 of the Plan, an eligible
employee who satisfies all of the conditions of the Plan (specifically
including the execution of the Severance Agreement and General Release
described in subsection 3.5) will be entitled to enhanced severance pay in
an amount determined by multiplying the participant's number of full years
of continuous service, times the applicable multiplier from the table
below, times the participant's weekly Pay (as described in subsection 3.1),
and the result so determined shall not be less than the minimum number of
months of Pay as set forth in column (c) of the following table, but shall
not exceed the maximum number of months of Pay as set forth in column (d)
of the following table:
(a) (b) (c) (d)
Applicable
Multiplier
(Applicable to
Participant's Minimum Maximum
Weekly Pay Months of Pay Months of Pay
X Full Years of (as defined in (as defined in
Position Level Continuous Service) subsection 3.1) subsection 3.1)
- -------------- ------------------ -------------- ---------------
International &
Regional Director 3 6 Months 15 Months
National &
Associate Director 2 1 Month 9 Months
Exempt Staff 1 1 Month 6 Months
Non-Exempt Staff 1 1 Month 3 Months
Under the circumstances set forth in subsection 3.4(e) with respect to GEC
Participants, enhanced severance pay for a GEC Participant will be
separately calculated pursuant to such subsection 3.4(e).
In addition to the amount of severance set forth in subsections 3.3 and
3.4, the following additional benefits are provided:
(a) BENEFIT CONTINUATION. If the participant elects COBRA, as
defined in subsection 3.9, continuation coverage, for each
month that such coverage continues the Employer will reimburse
a participant for a portion of the cost of medical and dental
insurance coverage, subject to subsection 3.9, and further
subject to the following limits:
(i) the Employer will cease reimbursing such costs beginning
with the same month the participant ceases to be covered
by COBRA; and
(ii) in no event will the Employer reimburse such costs for
more than the number of weeks for which enhanced
severance pay is payable, as determined above or in
subsection 3.4(e), regardless of the form in which
payment is actually made. The number of weeks for which
enhanced severance pay is payable shall be determined
without regard to whether such severance pay is paid in a
lump sum.
(b) OUTPLACEMENT COUNSELING SERVICES. The Employer will provide
each participant with outplacement counseling services to be
provided by a firm of the Employer's choice. The nature of
such services, its duration and all other terms and conditions
shall be determined by the Employer.
5
(c) TIMING AND CONSIDERATION. Each of the enhanced severance
arrangements described in this subsection 3.4 will become
available to a participant beginning after the seven day
revocation period following the execution of the Severance
Agreement and General Release as described below. The
consideration for this voluntary Severance Agreement and
General Release shall be the enhanced severance, Employer
provided benefits and outplacement counseling services, if
applicable, to which the participant otherwise would not be
entitled. Benefits are payable at the time and in the manner
described in subsection 4.2.
(d) PRORATED TARGET BONUS. The provisions in this subsection
3.4(d) shall apply exclusively to Plan participants who: (i)
have target bonuses; (ii) are not GEC Participants as defined
in subsection 3.4(e); and (iii) are involuntarily terminated
between June 30 and the date in the next following year when
the Employer calculates and pays bonuses for the year in which
the termination occurred (a "Target Bonus Participant").
In the event a Target Bonus Participant has otherwise satisfied
all of the conditions of the Plan for enhanced severance under
subsection 3.4 (specifically including executing the Severance
Agreement and General Release described in subsection 3.5),
such Target Bonus Participant may receive a prorated share of
his or her target bonus for the year of termination, subject to
the Employer's then existing practice of determining
discretionary bonus payments. Payment of bonuses is within the
Employer's sole discretion, and may be made, if at all, subject
to year-to-year variations. Factors included in considering
individual bonus awards include, without limitation, the
employee's performance against specific objective and
subjective standards developed with his or her manager,
subjective evaluation by management, and the anticipated
performance of the Employer, region and business unit. A
consideration of these factors may lead to a Target Bonus
Participant receiving more than, less than, or none of his or
her prorated target bonus. Any bonus payment shall be less
any required payroll deductions.
Furthermore, except as specifically otherwise provided in this
subsection 3.4(d), all of the other provisions and conditions
of the Plan shall be applicable to enhanced severance payable
to a Target Bonus Participant.
(e) GEC SUPPLEMENTAL BENEFIT. The provisions in this subsection
3.4(e) shall apply exclusively to each of those individuals who
is a member of the Company's Global Executive Committee (the
"GEC") or any successor global management committee to the GEC
as may be designated as such by the Company at the time of his
or her termination. As of May 1, 2004, the GEC consists of the
Company's Global Chief Executive Officer, Global Chief
Financial Officer and the Chief Executive Officers of each of
the Company's Americas, Europe, Asia-Pacific and LaSalle
Investment Management operating units (each a "GEC Participant"
and collectively the "GEC Participants"). (Notwithstanding the
foregoing, this subsection shall not apply to, and the GEC
Participants shall not include, the Company's interim Chief
Executive Officer elected as such on January 7, 2004.)
6
In the event that the employment of a GEC Participant with the
Employer ends due to an involuntary termination for any reason
other than those set forth in subsections 2.1 or 2.2(a), (b),
(c), (d), (e), (f), (g), (j), (k) or (n), then such GEC
Participant, if he or she has satisfied all of the conditions
of the Plan (specifically including executing the Severance
Agreement and General Release described in subsection 3.5),
will be entitled to enhanced severance pay equal to the sum of:
(1) fifty-two times the GEC Participant's weekly Pay, plus (2)
an amount equal to the annual target bonus then in effect for
such GEC Participant. Such enhanced severance pay shall be
payable in a lump sum.
In addition to the foregoing amounts:
(i) if a GEC Participant is terminated under this subsection
3.4(e) between January 1 in a given year and the date
thereafter on which the Company pays bonuses in respect
of the previous year (the "Bonus Payment Date"), then the
GEC Participant shall remain eligible to receive his or
her bonus on the Bonus Payment Date subject to the
Company's then existing practice of determining
discretionary bonus payments and otherwise subject to the
considerations with respect to the payments of bonuses
set forth in subsection 3.4(d);
(ii) if a GEC Participant is terminated under this subsection
3.4(e) between the Bonus Payment Date and June 30 of any
given year, then the GEC Participant shall not be
eligible to receive any further bonus payment beyond any
bonus paid in respect of the then previous Bonus Payment
Date; and
(iii) if a GEC Participant is terminated under this subsection
3.4(e) between June 30 and December 31 (inclusive) of any
given year, then when the Company calculates and pays
bonuses in the following year, such GEC Participant may
receive a prorated share of his or her target bonus for
the year of termination, subject to the Employer's then
existing practice of determining discretionary bonus
payments and otherwise subject to the considerations with
respect to the payments of bonuses set forth in
subsection 3.4(d).
After termination under this subsection 3.4(e), a GEC
Participant shall not be eligible to receive any bonus payments
except as specifically contemplated in this subsection as set
forth above.
In the case of subsection 2.2(g), it shall be the Compensation
Committee (rather than the Plan Administrator) that has the
discretion to determine whether the position offered to a GEC
Participant constitutes a "reasonably comparable" position
(which in any event may only with the Company or one of its
subsidiaries). In the case of subsection 2.2(n), the GEC
Participant shall be permitted to elect whether to receive
severance payments under this Plan or under such other plan,
program or arrangement (including an employment agreement) with
respect to which he or she may be entitled to receive severance
(or "Garden Leave") benefits, but shall not be entitled to
receive payments under both. Such election must be made on or
after the date the GEC Participant is terminated and before the
GEC Participant receives severance payments from an Employer
under any plan, program or arrangement, including this Plan,
for such termination. Payment of severance under this Plan
shall not, however, preclude payment of any other benefits
(such as, for example, with respect to health care) that may
otherwise be provided under any separate plan, program or
arrangement (including an employment agreement).
7
For avoidance of doubt, the provisions of the Plan shall apply
according to its terms if the particular circumstances set
forth in subsection 2.1 of the Plan cause a GEC Participant's
employment to end. Furthermore, except as specifically
otherwise provided in this subsection 3.4(e), all of the other
provisions and conditions of the Plan shall be applicable to
enhanced severance payable to a GEC Participant.
3.5 CONDITIONS TO PAYMENT OF ENHANCED SEVERANCE BENEFITS.
As a condition to receiving the enhanced severance benefits described
in subsection 3.4, each participant is required to:
(a) Execute and submit within the allotted time, a Severance
Agreement and General Release in the form prescribed. A
participant may be required to re-execute the release on his or
her date of separation, if necessary. If a participant's
signed release is not returned by the deadline, no enhanced
severance benefits are provided. If a participant revokes the
Severance Agreement and General Release within the seven day
revocation period, no enhanced severance benefits will be
provided.
(b) Return all Employer property (including, but not limited to
computers, keys, credit cards, documents, records,
identification cards and equipment) on or before his or her
termination of employment.
(c) Repay all loans or other amounts due to the Employer including,
without limitation, any outstanding corporate credit card
balances or negative paid-time-off balances. Any loans or
other amounts due from the employee shall be set off against
and deducted from the severance amount otherwise due the
employee under the Plan.
3.6 REPAYMENTS AND FORFEITURES.
Notwithstanding any other provision of the Plan, any participant who
accepts benefits under the Plan shall reimburse the Employer for the full
amount of any benefits he or she received under the Plan if the participant
subsequently discloses any of the Employer's trade secrets, violates any
written covenants between such participant and the Employer or otherwise
engages in conduct that may adversely affect the Employer's reputation or
business relations. In addition, any participant described in the
preceding sentence shall forfeit any right to benefits under the Plan which
have not yet been paid. If, and to the extent required by the terms of any
agreement between the Employer and a third party concerning the sale or
transfer of all or any portion of the Employer, any participant whose
employment is involuntarily terminated in conjunction with such sale and
who becomes a direct competitor of such third party or is employed by a
direct competitor of such third party shall forfeit any right to any
additional benefits under the Plan which have not yet been paid. In
addition, repayments of benefits may be required as provided in subsection
3.2.
3.7 OFFSET FOR OTHER BENEFITS OR AMOUNTS DUE.
Except as provided in subsection 3.4(e), the amount of any benefits
payable to a participant under the Plan shall be reduced on a dollar-for-
dollar basis by any separation, termination or similar benefits that an
Employer, subsidiary or affiliate pays or is required to pay to such
participant through insurance or otherwise under any plan, program or
contract of the Employer, subsidiary or affiliate, or under any federal or
state law.
8
3.8 NON-SOLICITATION OF EMPLOYEES AND CLIENTS.
As a condition to receiving enhanced severance benefits, each
participant shall execute a release in a form specified by the Employer,
containing the participant's agreement to the following restrictions:
during the period severance is payable, or during the period of twelve (12)
months after termination, whichever is longer, the participant shall not
(i) solicit or induce any other employees of an Employer or subsidiary to
leave the employ of the Employer; (ii) solicit or induce any of an
Employer's or subsidiary's clients to discontinue or reduce the extent of
such relationship with the Employer or subsidiary; or (iii) assist, perform
services for, or have any equity interest in any of an Employer's or
subsidiary's clients. If a participant fails to comply with such
restrictions, any remaining unpaid benefits under the Plan shall not be
paid and the Employer may pursue all legal remedies available to it,
including recovery of severance already paid. The Employer has the sole
discretion to determine whether an entity is a "client" of Employer or a
subsidiary.
3.9 CONTINUATION COVERAGE BENEFITS.
If a participant elects to continue health insurance coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985 ("COBRA"), the
Employer will subsidize a portion of the premium for such continuation
coverage until the occurrence of the earlier: (1) the date that Employee
becomes covered under another group plan or (2) the last day of Employee's
severance pay period. The Employer will subsidize the premium to the
extent that the participant would otherwise be required to pay more for
such coverage during such period than a similarly situated active employee
would be required to pay for comparable coverage. After the end of the
severance pay period, the participant will be required to pay the full
premium for any remaining COBRA continuation coverage. The payment of
benefits under the Plan shall in no way affect a participant's COBRA
coverage, which coverage shall terminate in accordance with the COBRA
coverage provisions of the Employer's medical and dental plans covering the
participant.
3.10 BENEFITS FOR FORMER MOTOROLA EMPLOYEES.
Notwithstanding any provision of this Plan to the contrary, if any
Former Motorola Employee is terminated other than for Cause within five
years of the Transfer Date such Former Motorola Employee will be entitled
to the greater of: (i) the benefits available under this Plan; or (ii) the
benefits described in the Motorola Severance Plan then in effect (but not
to exceed the benefits levels in effect under the Motorola Severance Plan
as of the Transfer Date). For purposes of calculating these benefits, such
Former Motorola Employee's service with Motorola, Inc. shall be credited
according to the terms of the Agreement. If a release of claims was
required in order to obtain benefits under the Motorola Severance Plan,
then the Former Motorola Employee must execute a release of claims against
the Employers as described in subsection 3.5 of this Plan in order to be
entitled to such benefits. Notwithstanding the foregoing, no employee will
be entitled to benefits under BOTH this Plan and the Motorola Severance
Plan. The terms "Cause," "Transfer Date," and "Motorola Severance Plan"
for purposes of this subsection have the same meaning as they do in the
Agreement.
9
3.11 BENEFITS FOR FORMER PROCTER & GAMBLE EMPLOYEES.
Notwithstanding any provision of this Plan to the contrary, if a
Former Procter & Gamble Employee is terminated other than for Cause prior
to September 1, 2005, the Former Procter & Gamble Employee will be entitled
to benefits calculated under the Procter & Gamble Severance Plan rather
than the benefits normally calculated under this Plan. If a release of
claims was required in order to obtain benefits under the Procter & Gamble
Severance Plan, then the Former Procter & Gamble Employee must execute a
release of claims against the Employers as described in subsection 3.5 of
this Plan in order to be entitled to such benefits. Effective September 1,
2005, the Former Procter & Gamble Employee's benefits under the Plan, if
any, will be determined according to the provisions of the Plan other than
this subsection 3.11 based on the Former Procter & Gamble Employee's date
of hire with the Employer. Notwithstanding the foregoing, no Former
Procter & Gamble Employee will be simultaneously entitled to benefits under
BOTH this Plan and the Procter & Gamble Severance Plan.
SECTION 4 PAYMENT OF BENEFITS
4.1 RELEASE.
No enhanced severance pay benefits under subsection 3.4 of the Plan
shall be payable to any participant until such participant has executed a
release (as described in subsection 3.5) of all of such participant's then
existing rights and legal claims against the Employers and their
subsidiaries and affiliates.
4.2 FORM OF PAYMENT.
Subject to the conditions and limitations of any applicable
supplement to the Plan, benefits shall be paid in equal installments
according to the Employer's normal payroll schedule; provided, that all
benefit payments to a participant must be completed within 24 months
following the date on which the participant's employment terminates. The
Employer may, in its sole discretion, elect to pay benefits in a lump sum.
Notwithstanding the foregoing, all severance payments made pursuant to
subsection 3.4(e) shall be made in a lump sum. All payments made under the
Plan are subject to reduction for withholding. Severance payments made
under this Plan are not considered eligible wages for any other Employer-
provided benefits, including the 401(k) plan.
4.3 DEATH BENEFITS.
In the event of a participant's death before he or she receives all
benefits to which he or she otherwise would be entitled under the Plan,
payment of his or her benefits shall be made to his or her beneficiary in
installments or a lump sum, as determined by the Company. By signing a
form furnished by the Employer (and approved by the Company), each
participant may designate any person or persons to whom his or her benefits
are to be paid if he or she dies before he or she receives all of his or
her benefits. A beneficiary designation form will be effective only when
the form is filed with the Employer while the participant is still alive
and will cancel all beneficiary designation forms previously filed by the
participant with the Employer with respect to this Plan. If a deceased
participant has failed to designate a beneficiary as provided above, or if
the designated beneficiary predeceases the participant, payment of the
participant's benefits shall be made to his or her estate. If a designated
beneficiary dies before complete payment of any benefits attributable to a
participant, remaining benefits shall be paid to the beneficiary's estate.
SECTION 5 FINANCING PLAN BENEFITS
All benefits payable under this Plan shall be paid directly by the
Employers out of their general assets. The Employers shall not be required
to segregate on their books or otherwise any amount to be used for the
payment of benefits under this Plan.
10
SECTION 6 REEMPLOYMENT
If a participant who is entitled to receive benefits under the Plan
is reemployed by an Employer, by any enterprise in which the Employer owns
an interest, or by any acquiror of all or a portion of an Employer (whether
by stock or assets) before all his or her benefits have been paid, any
benefits remaining to be paid will be forfeited.
SECTION 7 MISCELLANEOUS
7.1 INFORMATION TO BE FURNISHED BY PARTICIPANTS.
Each participant must furnish to his or her Employer such documents,
evidence, data or other information as the Employer considers necessary or
desirable for the purpose of administering the Plan. Benefits under the
Plan for each participant are provided on the condition that he or she
furnish full, true and complete data, evidence or other information, and
that he or she will promptly sign any document related to the Plan,
requested by his or her Employer.
7.2 EMPLOYMENT RIGHTS.
The Plan does not constitute a contract of employment and
participation in the Plan will not give a participant the right to be
rehired or retained in the employ of an Employer on a full-time, part-time
or any other basis or to be retrained by the Employer, nor will
participation in the Plan give any participant any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan. Participants remain employees "at-will."
Nothing in the Plan guarantees that a participant will receive his or her
target bonus during his or her employment with Employer.
7.3 EMPLOYER'S AND ADMINISTRATOR'S DECISION FINAL.
Any interpretation of the Plan and any decision on any matter within
the discretion of an Employer or Administrator made by the Employer or
Administrator in good faith is binding on all persons. The Administrator
will establish and maintain a written procedure under which participants
may submit claims for benefits, and may request reviews of denied claims.
7.4 EVIDENCE.
Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person relying thereon
considers pertinent and reliable, and signed, made or presented by the
proper party or parties.
7.5 UNIFORM RULES.
In managing the Plan, the Employers will apply uniform rules to all
participants similarly situated. The Plan Administrator may make such
other awards of severance benefits to any employee or group of employees as
he or she deems desirable, pursuant to conditions and procedures
established in writing from time to time in accordance with the terms of
the Plan and as are incorporated in the Plan.
7.6 GENDER AND NUMBER.
Where the context admits, words in the masculine gender shall include
the feminine and neuter genders, the plural shall include the singular and
the singular shall include the plural.
11
7.7 ACTION BY EMPLOYER.
Any action required of or permitted by the Company or an Employer
under the Plan shall be by resolution of its Board of Directors, by
resolution of a duly authorized committee of its Board of Directors, by a
person or persons authorized by resolutions of its Board of Directors or
such committee, or by the Administrator. An amendment to the Plan that is
approved subsequently by resolution of the Board of Directors or a duly
authorized committee of the Board of Directors may have retroactive effect.
7.8 CONTROLLING LAWS.
Except to the extent superseded by ERISA, the laws of the State of
Illinois shall be controlling in all matters relating to the Plan.
7.9 INTERESTS NOT TRANSFERABLE.
Subject to subsection 3.7, the interests of persons entitled to
benefits under the Plan are not subject to their debts or other obligations
and, except as may be required by the tax withholding provisions of the
Internal Revenue Code or any state's income tax act, or pursuant to an
agreement between a participant and the Employer, may not be voluntarily
sold, transferred, alienated, assigned or encumbered.
7.10 MISTAKE OF FACT.
Any mistake of fact or misstatement of fact shall be corrected when
it becomes known and proper adjustment made by reason thereof.
7.11 SEVERABILITY.
In the event any provision of the Plan shall be held to be illegal or
invalid for any reason, such illegality or invalidity shall not affect the
remaining parts of the Plan, and the Plan shall be construed and enforced
as if such illegal or invalid provisions had never been contained in the
Plan.
7.12 WITHHOLDING.
The Employers reserve the right to withhold from any amounts payable
under this Plan all federal, state, city, and local taxes as shall be
legally required and any applicable insurance or health coverage premiums,
as well as any other amounts authorized or required by Employer policy
including, but not limited to, withholding for garnishments and judgments
or other court orders.
7.13 EFFECT ON OTHER PLANS OR AGREEMENTS.
Payments or benefits provided to a participant under any Employer
stock, deferred compensation, savings, retirement or other employee benefit
plan are governed solely by the terms of such plan. Any obligations or
duties of a participant pursuant to any non-competition or other agreement
with an Employer shall be governed solely by the terms of such agreement
and shall not be affected by the terms of this Plan.
7.14 NON-DUPLICATION.
No person will be entitled to benefits under this Plan who is
entitled to severance or similar benefits under any other plan or
arrangement of an Employer, unless otherwise expressly provided in this
Plan.
7.15 NO VESTED RIGHTS.
No person shall acquire any vested rights to any benefits described
in the Plan, and the Company reserves the right to discontinue such
benefits at any time, as further provided in subsection 8.1.
12
SECTION 8 AMENDMENT AND TERMINATION
8.1 AMENDMENT AND TERMINATION.
The Company reserves the right to amend the Plan at any time and to
alter, reduce or eliminate any benefit under the Plan (in whole or in part)
at any time or to terminate the Plan at any time, as to any class or
classes of covered employees (including former or retired employees), with
or without notice. Any amendment or termination of the Plan by the Company
shall be made in accordance with the procedures set forth in subsection
7.7. Notwithstanding the foregoing, the terms of subsection 3.4(e) shall
remain effective for each GEC Participant, and may not be amended or
terminated, until the date of such GEC Participant's termination of
employment from the Employer or until such time as the GEC Participant's
severance benefits have been superceded by some other severance plan,
program or arrangement (including an employment agreement entered into
after May 1, 2004) with the Employer.
8.2 NOTICE OF AMENDMENT OR TERMINATION.
Participants will be notified of any material amendment or
termination of the Plan within a reasonable time.
13