Exhibit (10.4)
December 14, 2004
ADDITIONAL REMUNERATION PLAN
THE PROCTER & GAMBLE COMPANY
RESOLVED, That the following plan for additional remuneration of the
Chairman of the Board and such other officers and employees of The Procter &
Gamble Company and subsidiary companies who, in the opinion of the Chief
Executive, are largely responsible for the success and development of the
business, be and the same is hereby adopted providing for additions to their
compensation in relation to the consolidated profit of the Company for the
fiscal year and the contribution by those persons to the operation of the
Company. Such additional remuneration may be paid in recognition of the
contribution of such persons during that year, and/or their contribution to
earnings growth over the current and prior years. Credits to a fund established
for this purpose are to be based upon a percentage of the annual consolidated
profit of the companies.
1. Each fiscal year there shall be set aside in an additional remuneration
fund an amount equal to five percent of the consolidated profit before
providing for foreign and United States Federal Income Taxes, based on
income of The Procter & Gamble Company and its subsidiary companies
included in its Consolidated Statement of Profit and Loss for such fiscal
year, conditional upon there being left for consolidated net profit an
amount at least equal to the sum of the dividends on the outstanding
Preferred Stock of The Procter & Gamble Company, plus the sum of the
dividends on the outstanding Common Stock of The Procter & Gamble Company
for said fiscal year, prior deductions having been provided for of the full
amount of the contributions to the Profit Sharing Trust and Employee Stock
Ownership Plan; provided, however, that if at the end of any fiscal year
the full amount equal to said five percent cannot be set aside on account
of the condition above stated, then the amount to be set aside shall be
reduced to the extent necessary to meet said condition. Unawarded balances
in any year shall remain in said fund and be available in later years;
provided, however, that this Board reserves the right to withdraw from said
fund any unawarded balances or part thereof remaining after the award at
the end of any fiscal year.
2. For each fiscal year the Compensation Committee of the Board of Directors
shall determine the method of payment and the amount of the additional
remuneration to be awarded from said fund to each principal officer elected
by the Board of Directors. The Chief Executive shall determine which other
persons are to receive additional remuneration out of said fund and the
method of payment and the amount to be awarded to each.
3. Awards may be made by the Chief Executive to any employee, including
principal officers elected by the Board of Directors except the Chairman of
the Board, upon the termination of their employment or the granting of a
leave of absence. The Chief Executive may delegate to an appropriate Vice
President the authority to make such awards to persons who are not
principal officers.
4. The consolidated profit and the consolidated net profit of The Procter &
Gamble Company and the subsidiary companies consolidated for each year
shall be determined in accordance with generally accepted principles of
accounting and approved by the independent certified public accountants
selected by this Board, and no person who may, at any time, be selected to
share in the fund provided for in paragraph 1 above shall have any right to
question the consolidated profit or the consolidated net profit so
determined.
5. While the amount received by any one individual for any year under this
resolution shall be considered as earned remuneration in addition to salary
paid, it shall be understood that this plan does not give to any officer or
employee any contract rights, express or implied, against any Company for
any award from the Fund or for compensation in addition to the salary paid
to him, or any right to question the action of the Board of Directors, the
Compensation Committee or the Chief Executive.
6. Notwithstanding the foregoing, if there is a Change in Control (as
hereinafter defined) in any fiscal year, an additional remuneration fund
shall be set aside and additional remuneration awards shall be made for the
period from the beginning of the fiscal year in which a Change in Control
occurred up to and including the date of such Change in Control ("CIC
Period") pursuant to this Plan, substituting "CIC Period" for "fiscal
year." If financial statements specified in paragraphs 1 and r are not
available for the CIC Period, the Compensation Committee shall determine
the amount of additional remuneration awarded from the fund in good faith.
"Change in Control" shall mean the occurrence of any of the following:
(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of
the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the then outstanding
Shares or the combined voting power of the Company's then outstanding
Voting Securities; provided, however, in determining whether a Change
in Control has occurred pursuant to this Section 6(a), Shares or
Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Related Entity"), (ii) the Company or any Related Entity, or (iii)
any Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of July 11, 2000 are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least half
of the members of the Board; or, following a Merger (as hereinafter
defined) which results in a Parent Corporation (as hereinafter
defined), the board of directors of the ultimate Parent Corporation;
provided, however, that if the election, or nomination for election by
the Company's common stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member
of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued (a
"Merger"), unless such Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger where:
(A) the stockholders of the Company, immediately before such
Merger own directly or indirectly immediately following such
Merger at least fifty percent (50%) of the combined voting
power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving
Corporation") if fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another Person (a "Parent
Corporation"), or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such Merger constitute at least half of the
members of the board of directors of (x) the Surviving
Corporation, if there is no Parent
Corporation, or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation; and
(C) no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust forming
a part thereof) that, immediately prior to such merger,
consolidation or reorganization, was maintained by the
Company or any Related Entity, or (4) any Person who,
immediately prior to such Merger had Beneficial Ownership of
twenty percent (20%) or more of the then outstanding Voting
Securities or Shares, has Beneficial Ownership of twenty
percent (20%) or more of the combined voting power of the
outstanding voting securities or common stock of (x) the
Surviving Corporation if there is no Parent Corporation, or
(y) if there is one or more Parent Corporations, the
ultimate Parent Corporation;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being
regarded as a Merger for this purpose or the distribution to the
Company's stockholders of the stock of a Related Entity or any
other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares
or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of
the acquisition of Shares or Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Shares or Voting Securities which
increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
7. This Board reserves the right to terminate this plan at any time during any
fiscal year and any unawarded balance remaining in the fund shall be
withdrawn.
Original Plan - Adopted April 12, 1949
Amended - September 12, 1950 (Eff. 7/1/50)
Paragraphs 1, 2, and 7 amended - June 14, 1960 (Eff. 7/1/59)
Paragraphs 2 and 4 amended - June 13, 1961 (Eff. 7/1/60)
Entire Plan amended - June 10, 1975 (Eff. 7/1/75)
Paragraphs 1, 2 and 5 amended - March 13, 1979 (Eff. 10/10/78)
Paragraphs 1 and 8 amended - May 13, 1980 (Eff. 5/13/80)
Resolution and Paragraphs 1, 2 and 8 amended - April 14, 1981 (Eff. 4/14/81)
Resolution and Paragraphs 2, 3 and 8 amended - July 12, 1983 (Eff. 7/12/83)
Paragraphs 1 and 8 amended - June 11, 1985 (Eff. 6/11/85)
Resolution and Paragraphs 2, 3 and 8 amended - June 10, 1986 (Eff. 6/10/86)
Paragraphs 1 and 8 amended - June 14, 1988 (Eff. 6/14/88)
Paragraphs 1, 2 and 8 amended - June 12, 1990 (Eff. 6/12/90)
Paragraphs 3, 6 amended and Paragraph 8 deleted July 11, 2000 (eff. 7/11/00)
Paragraph 3 amended December 14, 2004 (eff. 12/14/04)
VOLUNTARY SEPARATION AGREEMENT AND RELEASE
PURPOSE
This document contains my agreement with my employer, THE PROCTER & GAMBLE
COMPANY, ("P&G"), resulting from my decision to voluntarily end my employment on
_______________ ("Last Day of Employment"). This is a legally binding document
in which P&G commits itself to pay me a cash separation allowance and provide
other benefits described in Parts I and III, below. In exchange, I am agreeing
to release P&G from legal liability. P&G and I agree that any disputes we may
have now or in the future that are not released by this Voluntary Separation
Agreement and Release ("Agreement") will be resolved through binding
arbitration, as discussed in Part III, below.
I understand that any reference to P&G in this Agreement also includes
parents, subsidiaries or affiliated entities and the directors, managers,
agents, employees, successors and assigns of any of them.
PART I. P&G AGREES THAT:
P&G will provide me with a cash allowance (the "Separation Allowance") of
[AN AMOUNT EQUAL TO NO GREATER THAN 1 TIMES ANNUAL BASE SALARY, PLUS AN AMOUNT
EQUAL TO BETWEEN 0% AND 100% OF ANY DEFERRED COMPENSATION FORFEITED], to be paid
as a lump sum (less legally required deductions) as soon as practical after my
Last Day of Employment. P&G will also provide me with the following benefits, in
addition to any benefits to which I am otherwise already entitled:
- My medical, dental, prescription drug, Employee Assistance Program and
Basic Group Life Insurance coverages will be extended on their current
terms, as such terms may change from time to time, until the earlier
of (i) ______________, or (ii) the date on which I become eligible to
participate in another employer's plans; and
- Outplacement services from ______________ for __ months after date of
first significant services, which I must begin using within forty-five
(45) days after my separation date.
- Reimbursement of up to $5,000 for approved retraining programs; and
- A lump sum payment approximately equivalent to the non-vested credits
in my Profit Sharing account [or other similar account] if I am not
vested in the Profit Sharing Plan as of my separation date. (If I am
vested, the distribution of my account will be handled according to
the terms of the Profit Sharing Plan.)
If prior to Last Day of Employment, I have been granted an Award(s) under
The Procter & Gamble Future Shares Plan of October 14, 1997, as amended May 12,
1998 (the "Plan"), and I satisfy my obligations under Part II (A) of this
Agreement, then P&G's execution and certification of this Agreement will certify
my separation from employment as a Special Separation as defined in Article 2.19
of the Plan. If I am under age 55 on my last day of employment, this
certification means that I will receive a cash payment equal to the Spread
Value(1) (less legally required deductions) of my Future Shares, as provided in
Article 6.1(e)(ii) of the Plan, on or shortly after my Last Date of Employment.
If I am age 55 or over on my last day of employment, such certification means
that I will retain the right to exercise such Award(s) as provided in Article
6.1(e) of the Plan.
In addition, if I am a full-time employee and if on my last day of
employment my age plus my Profit Sharing years of service are equal to or
greater than 70, P&G will provide me with retiree medical, dental and life
insurance coverages (according to the terms of the plans in effect after my
extended employee coverages end as such terms may change from time to time) plus
other benefits given to regular retirees including holiday gift boxes, P&G
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(1) "Spread Value" is defined in Article 2.20 of the Plan as "the excess of the
Fair Market Value of one share of Common Stock on the date of exercise over
the Fair Market Value of one share of Common Stock on the Grant Date,
multiplied by the number of shares of Common Stock underlying the Award."
"Fair Market Value" is defined in Article 2.10 of the Plan as "... the
average of the high and low prices of a share of Common Stock on the New
York Stock Exchange on the date of measurement..., and if there were no
trades on such date, on the day on which a trade occurred next preceding
such date...."
publications, invitations to Company events, a retiree I.D. pass, and
eligibility for participation in P&G's matching gift and scholarship programs.
If I am eligible for regular retirement, I will, in addition to the benefits set
forth in this Agreement, receive all benefits provided to regular retirees.
PART II. I AGREE THAT:
(A) I will continue to perform my work and responsibilities as an employee
in a satisfactory manner up to and including my Last Date of Employment. If I do
not do so and engage in any misconduct during my employment, I understand and
agree that P&G will not be obligated to provide me with the payments and
benefits set forth in Part I above, and if I have received any such payments
and/or benefits, I agree to repay them to P&G upon its demand.
(B) I agree not to use or share any confidential, proprietary or trade
secret information about any aspect of P&G's business with any non-P&G employee
or business entity at any time in the future. I also understand and agree that
while I may work for a direct competitor of P&G, without the written consent of
P&G I will not engage in any activity or provide any services for a period of
three years following Last Day of Employment in connection with the manufacture,
development, advertising, promotion or sale of any product which is the same as,
similar to, or competitive with any products of P&G (including existing products
as well as products which I know to be in development); (1) with respect to
which my work has been directly concerned at any time during the two years
preceding my last day of employment; or (2) with respect to which, as a
consequence of my job performance and duties, I have acquired knowledge of trade
secrets or other confidential information of P&G; nor will I work in any
position where the proprietary business or technical knowledge that I have
gained in my job here at P&G would be directly applicable to that position in
the competitor's business, nor will I accept a position for the next year (one
year) for any other company on the same dedicated customer team that I worked
with for P&G during the past two (2) years. I will discuss any questions I may
have about this obligation with the Chief Executive Officer of P&G before
accepting a position.
(C) I release P&G from any claim of any kind I may have at any time arising
out of my employment with P&G, my decision to end my employment at P&G or any
employment references or lack thereof as discussed below in Part III, Paragraph
(B). I also agree not to bring or be a party to any legal action, charge or
claim of any kind against P&G regarding the same matters. Any re-employment
consideration will be consistent with the Company's Re-employment Policy. This
does not preclude me from filing a charge with the U.S. Equal Employment
Opportunity Commission (EEOC) or from participating in any investigation or
proceeding conducted by it, although it does waive my rights to bring a lawsuit
on my own behalf and to recover any damages or other remedy in a lawsuit brought
on my behalf by the EEOC regarding such matters. This is a General Release that
covers all claims under federal, state and local law, both statutory and common
law, including but not limited to all federal, state, and local employment
discrimination laws, claims, charges and legal actions under Title VII of the
Civil Rights Act and the Americans with Disabilities Act, claims and legal
actions under the Age Discrimination in Employment Act, and excludes only
workers compensation or unemployment compensation claims. This Agreement and
General Release does not waive any claims I may have which arise after the date
I have signed this Agreement.
PART III. P&G AND I AGREE THAT:
(A) Because we recognize that resolving any future differences we may have
in the courts can take a long time and be expensive, P&G and I agree that our
only remedy for all disputes one of us may have with the other that are not
released by this Agreement and arise out of my employment, my decision to end my
employment, or any aspect of this Agreement will be to submit any such disputes
(except for the exception noted in the next paragraph) to final and binding
arbitration in accordance with the National Rules for the Resolution of
Employment Dispute of the American Arbitration Association then in effect. P&G
and I agree that the aggrieved party must send written notice of any claim to
the other party by certified mail, return receipt requested. Written notice to
P&G will be sent to its Secretary at One Procter & Gamble Plaza, Cincinnati, OH
45202, and to me at the most current address shown for me in P&G's records. The
arbitrator will apply the law of the state in which the claim arose, or federal
law, or both, as applicable to the claim(s) asserted. Upon application to P&G,
P&G will reimburse me for all fees and costs charged me by the American
Arbitration Association and its arbitrator to the extent they exceed the
applicable fees
for filing and serving a lawsuit and summons upon P&G that would have been
charged by a court of competent jurisdiction, and my claim been filed in court.
There is one exception to this Paragraph (A). P&G may seek injunctive
relief in any court of competent jurisdiction if it has reason to believe that I
have violated or am about to violate the terms of Part II, Paragraph B above.
(B) I understand that P&G's historical policy is to not provide employment
references to prospective employers. However, P&G is willing to waive that
policy in my case on the following basis: I authorize my managers, other P&G
employees or agents to provide employment references upon request. In return, I
release and will not bring, be a party to, or assist in any legal action,
charge, or claim of any kind against P&G based upon the employment reference (or
lack thereof). I understand that all disputes regarding employment references or
the lack thereof must be resolved through arbitration as described in Part III,
Paragraph A, above.
PART IV:
(A) If any court, arbitrator or other legal tribunal should later find that
any aspect of this Agreement is invalid, that invalidity will not affect the
legality of any other aspect of this Agreement.
(B) In deciding to sign this Agreement, I have not relied upon any
statements or promises by P&G other than those set forth in this document.
(C) I have carefully read this entire Agreement and I understand its
meaning. I also understand that this Agreement is a legal document, and by
signing it I am giving up certain legal rights. I acknowledge that I have been
given 45 days to consider this Agreement and that I have been advised to consult
with an attorney about its terms. If I have executed this Agreement prior to the
expiration of the given 45 day period specified above, I acknowledge and agree
that I was afforded the opportunity to consider the Agreement for given 45 days
before executing it and that my execution of this Agreement prior to the
expiration of such given 45 day period was my free and voluntary act. I further
understand that I may revoke my acceptance of this Agreement within seven (7)
days after I sign it and that if I do not revoke my acceptance within that time,
this Agreement becomes effective and enforceable by both parties immediately
after the expiration of seven (7) days after I sign (the "effective date"). I
understand that any revocation must be in writing and must be received by my
immediate manager or that manager's designee no later than the close of business
on the seventh day after my execution of this Agreement. P&G has given me enough
time to consult with my family and other advisers and to consider whether I
should agree to the terms of this Agreement. Finally, I am voluntarily signing
this Agreement.
(D) I understand and agree this Agreement is governed by the laws of the
State of Ohio.
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Date
THE PROCTER & GAMBLE COMPANY
CERTIFIED & APPROVED BY:
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Date