Exhibit
10(l)
CHANGE
IN CONTROL EMPLOYMENT AGREEMENT
AGREEMENT, dated as of the _____ day of
________________, ________ (this “Agreement”), by and
between The Gillette Company, a Delaware corporation (the
“Company”), and ______________ (the
“Executive”).
WHEREAS, the Company has determined that it is in its
best interests and that of its stockholders to assure that the
Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change
of Control (as defined herein). The Company believes it is
imperative to diminish the inevitable distraction of the Executive
by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage the
Executive’s full attention and dedication to the current
Company and in the event of any threatened or pending Change of
Control, and to provide the Executive with compensation and
benefits arrangements upon a Change of Control that ensure that the
compensation and benefits expectations of the Executive will be
satisfied and that are competitive with those of other
corporations. Therefore, in order to accomplish these objectives,
the Company has entered into this Agreement.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
Section 1. Certain Definitions . (a)
“Effective Date” means the first date during the Change
of Control Period (as defined herein) on which a Change of Control
occurs. Notwithstanding anything in this Agreement to the contrary,
if a Change of Control occurs and if the Executive’s
employment with the Company is terminated prior to the date on
which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment
(1) was at the request of a third party that has taken steps
reasonably calculated to effect a Change of Control or (2)
otherwise arose in connection with or anticipation of a Change of
Control, then “Effective Date” means the date
immediately prior to the date of such termination of
employment.
(b) “Change of Control Period” means the
period commencing on the date hereof and ending on the third
anniversary of the date hereof; provided , however ,
that, commencing on the date one year after the date hereof, and on
each annual anniversary of such date (such date and each annual
anniversary thereof, the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such
Renewal Date, unless, at least 60 days prior to the Renewal Date,
the Company shall give notice to the Executive that the Change of
Control Period shall not be so extended.
(c) “Affiliated Company” means any company
controlled by, controlling or under common control with the
Company.
(d) “Change of Control” means:
[Revised
10-2004]
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) (a “Person”) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (A) the then-outstanding shares of
common stock of the Company (the “Outstanding Company Common
Stock”) or (B) the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors (the “Outstanding
Company Voting Securities”); provided , however
, that, for purposes of this Section 1(d)(1), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
Affiliated Company or (iv) any acquisition by any corporation
pursuant to a transaction that complies with Sections 1(d)(3)(A),
1(d)(3)(B) and 1(d)(3)(C).
(2) Individuals who, as of December 16, 1999,
constituted the Board (the “Incumbent Board”) cease for
any reason to constitute at least a majority of the Board;
provided , however , that any individual becoming a
director subsequent to December 16, 1999 whose election, or
nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election
contest with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board.
(3) Consummation of a reorganization, merger,
consolidation or sale or other disposition of all or substantially
all of the assets of the Company (a “Business
Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities
immediately prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of the then-outstanding
shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in
the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without
limitation, a corporation that, as a result of such transaction,
owns the Company or all or substantially all of the Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership immediately
prior to such Business Combination of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (B) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the then-outstanding
shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the
board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement or of the action of the Board
providing for such Business Combination; or
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(4) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(e) “Recent Annual Bonus Percentage” means
the highest actual annual bonus percentage awarded to the Executive
under the Company’s annual incentive plan, or any comparable
bonus percentage under any predecessor or successor plan, for the
last three full fiscal years prior to the Effective
Date.
(f) “Highest Annual Bonus Percentage” means
the higher of (i) the Executive’s Recent Annual Bonus
Percentage and (ii) the Executive’s Target Bonus percentage
under the Company’s Incentive Bonus Plan, or any comparable
bonus percentage under any successor plan, for the year in which a
Change of Control occurs.
(g) “Highest Annual Bonus” means an amount
equal to the product of (i) the Executive’s Annual Base
Salary at the Date of Termination and (ii) the Highest Annual Bonus
Percentage.
(h) “Bonus Payment Amount” means the amount
actually paid to the Executive pursuant to Section 13 of the
Company’s Incentive Bonus Plan or any comparable provision of
any successor annual bonus plan.
Section 2. Employment Period . The
Company hereby agrees to continue the Executive in its employ, and
the Executive hereby agrees to remain in the employ of the Company,
subject to the terms and conditions of this Agreement, for the
period commencing on the Effective Date and ending on the second
anniversary of the Effective Date (the “Employment
Period”).
Section 3. Terms of Employment . (a)
Position and Duties . (1) During the Employment
Period, (A) the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately
preceding the Effective Date and (B) the Executive’s services
shall be performed at the office or location where the Executive
was employed immediately preceding the Effective Date or at any
other location less than 35 miles from such office.
(2) During the Employment Period, and excluding any
periods of vacation and sick leave to which the Executive is
entitled, the Executive agrees to devote reasonable attention and
time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period, it
shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B)
deliver lectures, fulfill speaking engagements or teach at
educational institutions and (C) manage personal investments, so
long as such activities do not significantly interfere with the
performance of the Executive’s responsibilities as an
employee of the Company in accordance with this Agreement. It is
expressly understood and agreed that, to the extent that any such
activities have been conducted
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by
the Executive prior to the Effective Date, the continued conduct of
such activities (or the conduct of activities similar in nature and
scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Executive’s responsibilities to the Company.
(b) Compensation . (1) Base
Salary . During the Employment Period, the Executive shall
receive an annual base salary (the “Annual Base
Salary”), which Annual Base Salary shall be paid at a monthly
rate at least equal to 12 times the highest monthly base salary
paid or payable, including any base salary that has been earned but
deferred, to the Executive by the Company and the Affiliated
Companies in respect of the 12-month period immediately preceding
the month in which the Effective Date occurs. During the Employment
Period, the Annual Base Salary shall be reviewed at least annually,
beginning no more than 12 months after the last salary increase
awarded to the Executive prior to the Effective Date. Any increase
in the Annual Base Salary shall not serve to limit or reduce any
other obligation to the Executive under this Agreement. The Annual
Base Salary shall not be reduced after any such increase and the
term “Annual Base Salary” shall refer to the Annual
Base Salary as so increased.
(2) Annual Bonus . In addition to the
Annual Base Salary, the Executive shall be awarded, for each fiscal
year ending during the Employment Period, an annual bonus (the
“Annual Bonus”) in cash, determined as a percentage of
Annual Base Salary which shall not be less than the Recent Annual
Bonus Percentage. Each such Annual Bonus shall be paid no later
than the end of the third month of the fiscal year next following
the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual
Bonus.
(3) Incentive, Savings and Retirement Plans
. During the Employment Period, the Executive shall be entitled
to participate in all incentive, savings and retirement plans,
practices, policies, and programs applicable generally to other
peer executives of the Company and the Affiliated Companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with incentive opportunities (measured with respect
to both regular and special incentive opportunities, to the extent,
if any, that such distinction is applicable), savings opportunities
and retirement benefit opportunities, in each case, less favorable,
in the aggregate, than the most favorable of those provided by the
Company and the Affiliated Companies for the Executive under such
plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, those provided generally at
any time after the Effective Date to other peer executives of the
Company and the Affiliated Companies.
(4) Welfare Benefit Plans . During the
Employment Period, the Executive and/or the Executive’s
family, as the case may be, shall be eligible for participation in
and shall receive all benefits under the Company’s Executive
Life Insurance Plan and Estate Preservation Plan, and any other
welfare benefit plans, practices, policies and programs provided by
the Company and the Affiliated Companies (including, without
limitation, medical, prescription, dental, disability,
employee/spouse/dependent life insurance and travel accident
insurance plans and programs) to the extent applicable generally to
other peer executives of the Company and the Affiliated Companies,
but in no event shall such plans, practices, policies and programs
provide
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the
Executive with benefits that are less favorable, in the aggregate,
than the most favorable of such plans, practices, policies and
programs in effect for the Executive at any time during the 120-day
period immediately preceding the Effective Date or, if more
favorable to the Executive, those provided generally at any time
after the Effective Date to other peer executives of the Company
and the Affiliated Companies.
(5) Expenses . During the Employment
Period, the Executive shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by the Executive
in accordance with the most favorable policies, practices and
procedures of the Company and the Affiliated Companies in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(6) Fringe Benefits . During the
Employment Period, the Executive shall be entitled to fringe
benefits, including, without limitation, tax and financial planning
services, parking benefits and fitness center membership, in
accordance with the most favorable plans, practices, programs and
policies of the Company and the Affiliated Companies in effect for
the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(7) Office and Support Staff . During
the Employment Period, the Executive shall be entitled to an office
or offices of a size and with furnishings and other appointments,
and to exclusive personal secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the
Executive by the Company and the Affiliated Companies at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as provided generally at
any time thereafter with respect to other peer executives of the
Company and the Affiliated Companies.
(8) Vacation . During the Employment
Period, the Executive shall be entitled to paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and the Affiliated Companies as in effect
for the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and the Affiliated
Companies.
(9) Effect of Termination .
Notwithstanding anything in this Agreement to the contrary, upon
termination of employment for any reason, the Employment Period
shall cease and the Executive shall have no further right to any of
the payments or benefits described in Sections 2 and 3.
Section 4. Termination of Employment .
(a) Death or Disability . The Executive’s
employment shall terminate automatically if the Executive dies
during the Employment Period. If the Company determines in good
faith that the Disability (as defined herein) of the Executive has
occurred during the Employment Period (pursuant to the
definition
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of
“Disability”), it may give to the Executive written
notice in accordance with Section 11(b) of its intention to
terminate the Executive’s employment. In such event, the
Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the
Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive’s duties. “Disability” means the
absence of the Executive from the Executive’s duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness that is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive’s legal representative.
(b) Cause . The Company may terminate
the Executive’s employment during the Employment Period for
Cause. “Cause” means:
(1) the willful and continued failure of the Executive
to perform substantially the Executive’s duties with the
Company or any Affiliated Company (other than any such failure
resulting from incapacity due to physical or mental illness), after
a written demand for substantial performance is delivered to the
Executive by the Board or the Chief Executive Officer of the
Company that specifically identifies the manner in which the Board
or the Chief Executive Officer of the Company believes that the
Executive has not substantially performed the Executive’s
duties, or
(2) the willful engaging by the Executive in illegal
conduct or gross misconduct that is materially and demonstrably
injurious to the Company.
For
purposes of this Section 4(b), no act, or failure to act, on the
part of the Executive shall be considered “willful”
unless it is done, or omitted to be done, by the Executive in bad
faith or without reasonable belief that the Executive’s
action or omission was in the best interests of the Company. Any
act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board or upon the instructions
of
