EXHIBIT 10.26
November 13, 2002
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Re: Transition Agreement
Dear Hansel:
Please accept this letter confirming the understandings we have reached
with respect to your employment with Raytheon Company, your resignation as an
officer of the companies listed in Attachment A hereto, and your transition to
retirement.
1. Transition Period: Your transition from active employment with
Raytheon to retirement status shall be effective November 1, 2002, with the
concurrence of ▇▇▇ ▇▇▇▇▇▇▇▇, and your last date of active employment being
December 31, 2002. Upon your request, your retirement payments may commence as
early as January 1, 2003, as discussed more fully in paragraph 5 below.
2. Severance/Retirement Transition Payment and Benefits. You will receive
a Severance/Retirement Transition Payment of two and one-half (2 1/2) times your
current annual base salary (total $1,175,625 based on your current annual salary
of $470,250) payable within twenty (20) days of December 31, 2002. This payment
is subject to required statutory withholding.
You will also be eligible to participate on an active employee basis in
company-sponsored medical and dental benefit programs for the period January
2003 through June 2005. Upon the completion of this period, you will not be
eligible for any company-subsidized retiree medical benefits, but you and your
spouse will have access to this medical coverage at your own expense.
Your participation in other company-sponsored welfare benefit plans,
including the severance pay plan, optional life insurance, accidental death and
dismemberment, short-term disability and long-term disability, shall cease as of
December 31, 2002.
3. Results Based Incentive: 2002. You will be eligible to receive a
Results Based Incentive Bonus for 2002 at the discretion of Raytheon based on
established performance metrics.
4. Personal Time Off ("PTO"): You will be paid your unused accrued PTO
within twenty (20) days of your last day worked.
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5. Stock Options: For vesting and exercise purposes, your last day worked
shall be December 31, 2002, and you will be eligible to exercise any vested
options pursuant to the Stock Option Plan rules for retired employees.
6. Supplemental Retirement Payment: Pursuant to the terms of your offer
letter of July 6, 1999, you will be entitled to a retirement benefit using the
calculation formula and other applicable terms and conditions contained in the
Raytheon Company Pension Plan for Salaried Employees, calculated using your
service with Raytheon and your twenty-two (22) years of service with United
Airlines and United Technologies. This retirement payment shall be offset by the
amount of the retirement benefit which you are eligible to receive from the
United Technologies and United Airlines plans, as well as the amount you are
entitled to receive from Social Security at the earliest eligibility date.
Attached at A and incorporated into this Agreement is a detailed summary of the
monthly pension and pay-out options for which you will be eligible based on a
pension commencement date of January 1, 2003.
7. Executive Life Insurance. Upon the first anniversary of the Executive
Life Insurance policy acquired on your behalf which occurs after your
retirement, the Company will fund this policy, at its current interest rate
based on a death benefit of two (2) times your annual salary as of your last day
worked. This payment is expected to be approximately $53,000. The payment on
your behalf will be imputed income to you for tax purposes. This insurance
policy has a conversion feature which you may exercise at your own expense.
8. General Release: You agree to execute the General Release attached
hereto in exchange for the consideration contained in this Transition Agreement.
The General Release shall be executed on or about your last day of employment.
9. Litigation Cooperation: You agree that, in the event that Raytheon
Company becomes a party in any legal or administrative proceeding or asserted
claim relating to events which occurred during your employment, you will
cooperate to the fullest extent reasonably possible in the preparation and
presentation by Raytheon Company in the prosecution or defense, including
without limitation the execution of affidavits or other documents providing
information requested by Raytheon Company. In the event that such litigation
cooperation would be expected to require an appreciable period of time, which
would result in any out-of-pocket cost or lost economic opportunity on your
part, the Company agrees to provide an appropriate fee to offset such costs.
10. Ethics Compliance: You hereby represent and warrant that, to the best
of your knowledge, you have complied in full with all Raytheon Company policies
related to ethics, and have disclosed to Raytheon Company all matters which were
required to be disclosed by said policies. In particular, you represent and
warrant that, to the best of your knowledge except as so disclosed by you, you
have no information which you believe could be the basis for any charge of a
violation of law by Raytheon Company or
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persons associated with Raytheon Company, including but not limited to
violations of the False Claims Act or any federal or state environmental
statute.
11. Security Clearance: In the course of your employment at Raytheon
Company, you may have come into possession of or exposure to matters due to your
security clearance. Raytheon Company reminds you that disclosure of any
information which came to you as a result of your security clearance, including
work product, company plans and other matters, shall not be discussed or
revealed in any way, except if required to do so pursuant to a proceeding
instituted by an appropriate government agency or at the request of an
authorized company agent.
12. Confidential and Proprietary Information: You agree to keep all
confidential and proprietary information of the Company, its subsidiaries and
affiliated companies, including joint venture partners, strictly confidential
except to the extent disclosure is required by law or court order, except to the
extent that such confidential and proprietary information has become public
through no fault of your own.
13. Confidentiality of This Agreement: You and Raytheon Company mutually
agree to keep the terms and conditions of this Agreement confidential and will
not disclose the terms hereof to anyone, except to immediate family members, tax
accountants, lawyers, financial advisors, the Internal Revenue Service or any
other taxing authority, and the Division of Employment and Training in
connection with any application you may make for unemployment compensation
benefits, and/or others who have a reasonable need to know the terms hereof.
14. Insider Information: In the course of your responsibilities you may
constitute an "insider" for securities law purposes. We would like to remind you
that any financial plan, program, estimate or matter not readily available to
the general public shall be kept in strictest confidence and may not be
disclosed or discussed.
15. Non-Disparagement Agreement: You and Raytheon Company mutually agree
not to disparage one another. Raytheon Company, its officers, directors and
employees, and you shall have the right to make truthful responses to any
charges, accusations or allegations, and no such response shall be considered a
breach of this non-disparagement agreement.
16. Arbitration: Any dispute arising under this Agreement shall be settled
exclusively through arbitration. Such arbitration shall be conducted in
accordance with the rules of the American Arbitration Association before a panel
of three arbitrators sitting in a city to be determined by mutual agreement. The
decision of the arbitration panel shall be final and binding on both parties.
Judgment may be entered on the award of the arbitrators in any court having
proper jurisdiction.
17. Entirety of Agreement: This Agreement supersedes all previous
agreements, written or oral, between Raytheon Company and you relating to the
subject
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matter of this Agreement. This Agreement may not be modified, changed or
discharged, in whole or in part, except by an agreement in writing signed by the
Company and you.
You understand that, if you elect to revoke the Release attached hereto
within seven (7) days after its execution, this letter Agreement shall be null
and void and each party will have all rights and obligations afforded them under
the law as if this Letter Agreement had not been signed by the parties and as if
the Release had never been signed by you. You agree, in the event of revocation
of the Release, to immediately return any consideration received in support of
said Release.
If you have any questions about this Agreement, please contact me.
Sincerely,
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, Human Resources
ACCEPTED:
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇ Date:_________
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
GENERAL RELEASE
I agree to accept the benefits and payments set forth in the immediately
preceding Letter Agreement as full satisfaction in all respects of any and all
obligations of any kind which might otherwise be due me from Raytheon Company. I
hereby specifically waive, remise, release and forever discharge Raytheon
Company, its affiliates, subsidiaries, directors, officers, employees, agents
and successors (hereinafter referred to as "Raytheon") from all manner of
claims, liabilities, demands and causes of action, known or unknown, fixed or
contingent, which I may have or claim to have against Raytheon as a result of my
employment and the termination thereof, and do hereby covenant not to file or
commence a lawsuit or administrative proceeding against Raytheon to assert any
such claims. I understand that this General Release encompasses all claims,
except those arising under the terms of the Transition Agreement by and between
Raytheon and me, arising under federal, state or local law, including but not
limited to claims under the Age Discrimination in Employment Act ("ADEA") or
claims arising under any theory of wrongful discharge. This General Release is
binding upon my successors, heirs, executors and administrators but does not
waive any rights or claims which relate to events occurring after the date this
General Release is executed.
I understand and agree that, under the Older Workers Benefit Protection Act
of 1990 ("Act"), this waiver of rights under ADEA must be knowing and voluntary
and that, by execution of this General Release, I acknowledge that the following
requirements of the Act to insure that such a waiver is knowing and voluntary
have been met:
(a) The waiver is part of an agreement between me and Raytheon, and I
understand the impact of this waiver;
(b) The waiver specifically refers to rights or claims arising under ADEA;
(c) I am not waiving rights or claims that may arise after the date the
waiver is executed;
(d) My waiver of rights or claims is in exchange for consideration in
addition to anything of value to which I am already entitled;
(e) I have been advised to consult with an attorney prior to executing
this General Release;
(f) I understand that I am to be given a period of twenty-one days within
which to consider the General Release; and
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(g) If this General Release is executed, I understand that I may revoke
the General Release during the seven-day period following its
execution and that the General Release shall not become effective or
enforceable until the revocation period has expired.
I have read carefully and fully understand all the provisions of this
General Release, including my rights under the Act. I acknowledge that this
General Release sets forth the entire agreement between me and Raytheon with
respect to additional consideration being provided to me and that I have not
relied upon any representation or statement, written or oral, not set forth in
this document.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇
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Date:_____________