Executive Severance Plan
EX-10.1 2 a08-27601_1ex10d1.htm EX-10.1
November 4, 2008
Robert J. Keller
On behalf of ACCO Brands Corporation (“ACCO Brands”), I’m very pleased to advise you that the Board of Directors has approved the following compensation program for your position as Chief Executive Officer effective as of October 22, 2008. Your primary work location will be the company’s headquarters in Lincolnshire, IL. The details of your compensation program are as follows:
· Base Salary: Your annual base salary will be $720,000, payable bi-weekly, less applicable taxes and withholdings.
· Short-term Incentive: You will participate in the annual ACCO Brands Management Incentive Plan (MIP) with a target award opportunity of 100% of your annual base. You are eligible for a pro-rata MIP for the 2008 Plan year and any potential awards are based on actual eligible base salary earnings and will range from 0% to 200% of the target award, depending upon actual performance against standards established by, and at the discretion of, the Compensation Committee of the Board of Directors.
· Long-Term Incentive: You will be eligible to participate in the ACCO Brands Long-term Incentive Plan (LTIP). The plan is an equity-based, 4-year rolling plan, with an incentive grant typically made once each year. The award opportunity for your level consists of Performance Share Units (PSUs), Restricted Stock Units (RSUs), and Stock Options (SOs). For the 2008 plan year, you will be granted:
PSUs: 23,000 PSUs for the 2007-2009 Performance Period; and 45,000 PSUs for the 2008-2010 Performance Period, payable in accordance with the applicable award agreements
RSUs: 15,000 RSUs cliff-vesting on November 7, 2011 and 23,000 RSUs cliff-vesting on November 7, 2012.
SOs: 105,000 SOs vesting ratably in equal increments over the three-year period from the date of grant, which will be November 7, 2008.
Plan details will be provided at the time of your grant. The SO exercise price will be the average of the high-low market price of ABD stock as traded on the NYSE on the date of grant. Any future LTIP grants and any potential awards are subject to final approval by the Compensation Committee, and in your case as CEO, also by the Board of Directors.
· Auto Allowance: You will participate in the Executive Auto Allowance Program. Your annual allowance under this program will be $15,996, payable bi-weekly less applicable taxes and withholdings.
· Employee Benefits: As an ACCO Brands employee, you will be eligible to participate in our health, welfare, and retirement benefit programs, including term life insurance up to two times base salary. The materials outlining these programs are enclosed. In addition, for 2008 you will be eligible to receive
three (3) weeks annual vacation benefits, pro rata based upon your start date. Beginning in 2009, you will be eligible for four (4) weeks annual vacation benefits.
· Severance Benefits: You will be eligible to receive any severance benefits, at the Tier 1 benefits-level, that may be provided under the ACCO Brands Corporation Executive Severance Plan, effective December 1, 2007.
This Letter is not intended to constitute a contract of employment. Employment with ACCO Brands is “at-will” and subject to termination by you or ACCO Brands at any time, with or without cause or prior notice. Nothing in this Letter or in any of the accompanying materials alters this “at-will” relationship.
Please acknowledge your understanding and acceptance of the above terms by signing and returning one (1) copy of this Letter to me as soon as possible. Please keep the second copy for your personal records.
David L. Kaput
Senior Vice President & Chief HR Officer
RETIREMENT AGREEMENT FOR DAVID D. CAMPBELL
This Retirement Agreement (“Agreement”) is made, entered into, and is effective as of May 1, 2008 (the “Effective Date”), by and between ACCO Brands Corporation, a Delaware corporation, and David D. Campbell (the “Executive”).
WHEREAS, from and after January 1, 1989 until the spin-off from Fortune Brands, Inc. occurring August 16, 2005, the Executive was employed by the Company and certain then-affiliates of the Company and in connection therewith participated in United States tax-qualified defined benefit pension plans, a foreign pension plan and a non-qualified defined benefit supplemental executive retirement plan (collectively, the “Former Employer Pensions”);
WHEREAS, the Executive has participated in the Company’s tax-qualified Pension Plan for Salaried and Certain Hourly-Paid Employees (“Pension”) and its non-qualified Supplemental Retirement Plan (“SRP”) (collectively, both such plans are sometimes referred to herein as the “ACCO Pensions”) since such spin-off;
WHEREAS, due to those separate periods of service, the sum of Executive’s accrued benefits under the Former Employer Pensions plus his accrued benefits under the ACCO Pensions is materially less than the accrued benefit the Executive would have accrued under the ACCO Pensions in the absence of such separate periods of service; and
WHEREAS, the Company desires to provide the Executive with a non-qualified supplemental retirement benefit hereunder to compensate the Executive, in part, for the adverse effects of such break in service, as provided herein.
NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements of the parties set forth in this Retirement Agreement, and of other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
1. Definitions. Any term not defined herein shall have the meaning set forth in the SRP or, if not defined under the SRP, as defined under the Pension and applicable under the SRP.
2. Supplemental Executive Retirement Benefit.
(a) The Company shall provide the Executive with a non-qualified supplemental retirement benefit (“Supplemental Retirement Benefit”) payable as of the first day of the month coincident with or next following the later of Executive’s attainment of age 55 and his Separation from Service with the Company and all Affiliated Employers (“Commencement Date”) in the amount equal to the positive difference (if any) between (x) the Tentative Benefit minus (y) the Offset Benefit. For this purpose:
(i) The Tentative Benefit, the ACCO Pension Benefit and the Former Employer Benefit each will be expressed in the normal form of benefit set forth under the Pension upon the attainment of normal retirement age. For the avoidance of doubt, as of the date hereof, the normal form of benefit payable upon attainment of normal retirement age is a Life Annuity payable at age 65.
(ii) The “Tentative Benefit” is the amount of benefit that the Executive would have accrued under the ACCO Pensions had the Executive been credited with eligibility, benefit and vesting service thereunder equal to the sum of the number of whole and partial years of service that were credited to the Executive under the Former Employer Pensions plus his whole and partial years of service credited to the Executive under the ACCO Pensions, but for such purpose (1) for such deemed benefit service accrued through August 15, 2005 under the Former Employer Pensions, by applying the formula for accrual of benefits under the Pension as in effect on January 1, 2007 and (2) for such benefit service accrued under the ACCO Pensions, by applying the benefit formula as in effect under the Pension from time to time after August 15, 2005, in each case applying such formula as is set forth in Article IV of the Pension (or any successor provision). For the avoidance of doubt, through December 31, 2007, for purposes of the Executive’s Tentative Benefit the Executive is credited with 19 years and 0 months of benefit service and with sufficient eligibility service and vesting service to be fully vested in his Tentative Benefit.
(iii) The “Offset Benefit” is the sum of the ACCO Pension Benefit plus the Former Employer Benefit as hereinafter defined.
(iv) The “ACCO Pension Benefit” is the sum of the Pension Benefit plus the SRP Benefit accrued from and after August 16, 2005. The “Pension Benefit” is the accrued and vested benefit payable to the Executive under the Pension as is determined as of the Commencement Date, based on the terms thereof as in effect from time to time after August 15, 2005. The “SRP Benefit” is the accrued and vested benefit payable to the Executive under the SRP as is determined as of the Commencement Date, based on the terms thereof as in effect from time to time after August 15, 2005.
(v) The “Former Employer Benefit” is the amount of $11,501.18 per month.
(b) The Supplemental Retirement Benefit shall be fully vested at all times and shall be paid out in any form for which benefits may be payable under the SRP on the Commencement Date, in accordance with the terms of the SRP as then in effect, (and may differ from the form of benefit elected or deemed elected by the Executive under the SRP) as if the Supplemental Retirement Benefit were paid thereunder (incorporating by reference such terms into this Agreement, including any conditions on electing a form of payment of the Supplemental Retirement Benefit thereunder in compliance with Section 409A of the Code); provided, on the date hereof, the Executive hereby elects to receive his benefit in the form of a joint and 50% survivor annuity if he is married on the Commencement Date and as a single life annuity if he is not then married; provided further, the foregoing to the contrary notwithstanding, if the Commencement Date is based on the date of Executive’s Separation from Service with the
Company and all Affiliated Employers, commencement of the Supplemental Retirement Benefit shall be postponed until the earlier of (i) the date that is six months after the date of the Executive’s Separation from Service and (ii) the date of the Executive’s death following such Separation from Service, in which case the amount of Supplemental Retirement Benefit that is determined and postponed for six months (or such shorter period due to the death of the Executive) shall be paid to the Executive (or, if applicable, the Executive’s Surviving Spouse or beneficiary) in a lump sum, together with interest, accrued thereon (not compounded) at the applicable interest rate (within the meaning provided under the definition of Actuarial Equivalent as in effect at such time under the Pension) less 200 basis points on the date payment of the benefit hereunder commences.
(c) In the event of the Executive’s death before his Separation from Service, the date of the Executive’s death shall be deemed to be his Commencement Date and his Supplemental Retirement Benefit shall be paid to his Surviving Spouse (if any) in a lump sum that is the Actuarial Equivalent of the normal form of his benefit determined as of such Commencement Date.
(d) The Supplemental Retirement Benefit shall commence (or, if applicable, the survivor’s benefit under Section 2(c) shall be paid) as soon as may be practicable, but not later than two and one-half months, after the Commencement Date, except as may be postponed under clause (i) or (ii) under Section 2(b).
(e) Anything herein to the contrary notwithstanding, upon the occurrence of a Change of Control, the date of such Change of Control shall be deemed to be the “Commencement Date” and the Supplemental Retirement Benefit shall be paid to the Executive in a lump sum that is the Actuarial Equivalent of the normal form of his benefit, determined as of such Commencement Date, as soon as may be practicable thereafter, but not later than two and one-half months after such deemed Commencement Date.
(a) Anything herein to the contrary notwithstanding, the Executive, his Surviving Spouse and other beneficiary shall be an unsecured creditor, with no secured or preferential rights to any assets of the Company or any other party for payment of the Supplemental Retirement Benefit. The Company’s obligation hereunder shall be an unfunded and unsecured promise to pay money in the future. Anything herein to the contrary notwithstanding, at no time shall any asset of the Company or any Affiliate be restricted, set aside, reserved or transferred in trust for the benefit of the Executive as a result of a change in the financial health of the Company or any Affiliate at any time during a restricted period respecting any tax-qualified defined benefit plan sponsored by the Company or any Affiliate (other than a multi-employer defined benefit plan for employees covered by a collective bargaining agreement with the Company or any Affiliate). For such purpose, “applicable covered employee” and “restricted period” shall have the meanings set forth in section 409A(b)(3) of the Code.
(b) Nothing herein shall be construed as giving the Executive the right to be retained in the employ of the Company.
(c) This Agreement may be amended only in a writing entered into by the Company and the Executive (or his Surviving Spouse or beneficiary following the death of the Executive).
(d) The Executive shall make appropriate arrangements for the satisfaction of any applicable federal, state or local taxes respecting his Supplemental Retirement Benefit. The Company shall be authorized to take such action as may be appropriate, including withholding from amounts due to the Executive or his Surviving Spouse or beneficiary hereunder, compensation to the Executive from the Company or otherwise in order to assure tax compliance.
(e) This Agreement shall bind and inure to the benefit of the Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of the Company, and successors of any such corporation or other business entity. The Supplemental Retirement Benefit may not be voluntarily or involuntarily assigned or alienated by the Executive, or his Surviving Spouse or beneficiary.
(f) Except to the extent preempted by the law of the United States, this Agreement shall be construed and administered in accordance with the laws of the State of Illinois.
IN WITNESS WHEREOF, the Executive and Company, by its duly authorized representatives, have executed this Agreement effective as of the Effective Date.
ACCO EXECUTIVE SEVERANCE PLAN
AND SUMMARY PLAN DESCRIPTION
(As Amended and Restated Effective October 1, 2002)
ACCO BRANDS, INC. (the “Company”) established the ACCO Executive Severance Plan effective as of September 1, 2000 (the “Plan”). The Plan was previously amended and is further amended and restated in its entirety effective as of October 1, 2002. The Plan is intended to provide severance benefits to certain executive employees of the Company, ACCO World Corporation, Boone International, Inc. and Day-Timers, Inc. (referred to collectively as the “Employers” and individually as an “Employer”). This Plan supersedes any other severance plan maintained by the Employers for executive employees.
SEVERANCE PLAN BENEFITS:
All domestic (U.S.) full-time salaried employees of the Employer in salary grade 9 or above and who are terminated under the circumstances described in A, B or C below are covered by the Plan.
Employees in salary grade 9 or above are eligible for the severance pay set forth in the Plan in the event of:
A. Involuntary separation from employment from the Employer for any reason other than resignation, retirement, death, disability, or cause; provided the employee remains employed until the date designated by the Employer as his or her termination date. The term “cause” includes but is not limited to misconduct, negligence, dishonesty, criminal act, excessive absenteeism, and willful failure to perform job responsibilities and other conduct determined by the Employer to be “cause”.
B. Voluntary separation from employment if, as a result of corporate restructuring, an employee’s job location has been relocated more than 35 miles from the employee’s former job location.
C. Voluntary separation from employment due to a demotion of two or more salary grades or a decrease in salary of 25% or more. An employee will not be eligible for severance pay if he or she accepts the demotion or decrease in pay.
An employee is not eligible for severance pay if (i) the employee is offered a comparable position (as reasonably determined by the Employer) with the Employer, an affiliate of the Employer, or a successor employer as a result of a reorganization of the Employer or the sale of stock or assets of the Employer, and (ii) such position is located within a 35 mile radius of the employee’s former job location.
In addition, if an employee is offered and accepts another position with the Employer or any affiliate or business unit of Fortune Brands, Inc. prior to commencement of severance pay benefits, no severance pay will be provided.
Employees who terminate employment with an Employer under the circumstances described in A, B or C above may not be rehired by an Employer during the Severance Period. The term “Severance Period” means a period that begins on the employee’s date of termination and is equal to the number of weeks or months of severance pay that an employee is eligible to receive. In limited circumstances, the Vice President of Human Resources of ACCO Brands, Inc. may allow an exception to the restriction on rehiring by an Employer during the Severance Period. If an employee is rehired by the Employer or any affiliate or business unit of Fortune Brands, Inc. after severance pay benefits have been paid but during the Severance Period, the employee must repay a portion of the severance pay previously received. Such portion will be determined by multiplying the total severance benefits paid by a fraction, the numerator of which is the number of weeks remaining in the Severance Period as of the employee’s rehire date, and the denominator of which is the number of weeks in the entire Severance Period.
Amount of Severance Pay – General
The amount of severance pay provided for terminations in the ordinary course (i.e., not following a Change of Control) will be calculated by the following schedule:
Salary Grade Amount of Severance
18 – 19 24 months of base salary
plus two years of bonus
14 – 17 18 months of base salary
plus one year of bonus
9 – 13 12 months of base salary
plus one year of bonus
For purposes of the above schedule, “base salary” shall be determined as of the date of the employee’s termination of employment and “bonus” shall be based on target bonus for the year of the employee’s termination.
Amount of Severance Pay – Change of Control
If any employee’s employment is terminated within 18 months following a Change of Control of the Employer, the General schedule regarding severance pay (above) will not apply and severance pay will be determined under this Change of Control Section. “Change of Control” means a Change of Control as defined in Attachment A to the Plan.
A. Payment of severance pay under this Section will be provided if employment terminates under the conditions described in paragraphs A or B under Eligibility above and the
employee’s termination follows a Change of Control. In addition, severance pay under this Section will be provided if an employee is demoted to a lower salary grade level following a Change of Control.
B. Eligibility for the severance pay provided under this Section upon a Change of Control applies only to terminations of employment or demotions that occur within a period ending 18 months following the Change of Control of the Employer. After that 18-month period, this Section will not apply.
C. The amount of severance pay provided for terminations following a Change of Control will be calculated based on the following schedule:
Salary Grade Amount of Severance
18 – 19 36 months of base salary
plus three years of bonus
14 – 17 24 months of base salary
plus one year of bonus
9 – 13 18 months of base salary
plus one year of bonus
For purposes of the above schedule, “base salary” shall be determined as of the date of the employee’s termination of employment and “bonus” shall be based on the greater of (i) target bonus for the year of the employee’s termination, or (ii) the bonus that would be paid using the Employer’s most recent financial performance outlook report that is available as of the employee’s termination date.
Payment of Severance
Eligible separated employees will receive payment of severance in a single lump sum payment as soon as administratively practicable. Payment is subject to normal payroll taxes and required withholding, and deductions for applicable medical, dental and flexible spending account coverage, and may be reduced by any amounts the employee owes the Employer. If an employee dies after signing the separation letter and release and waiver of claims but before receipt of severance pay, payment will be made to the employee’s estate.
Medical, dental and flexible spending account coverage will cease as of the last day of the month in which employment ends. Medical, dental and health care spending account coverage may then be continued pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for the Severance Period on the same terms and conditions and at the same contribution rates that apply to employees. Thereafter, such coverage will be at the standard COBRA rates. Severance payments will not be considered as pensionable earnings, and the period of time that severance payments are made will not count toward credited service and
vesting service under the Employer’s pension plans. Payments under the Plan are not eligible for contributions to the Employer’s 401(k) plan. All other employee benefit plans terminate on the separated employee’s last day of work.
If during the Severance Period a former employee accepts employment with a new employer, any medical and dental benefits provided under the Employer’s plans at the employee contribution rates pursuant to the preceding paragraph will be discontinued when the former employee is eligible for coverage under the new employer’s plans. Coverage may be continued at standard COBRA rates only in accordance with the COBRA provisions of the Employer’s medical and dental plans. A former employee must notify the Human Resources Department in writing when he or she obtains coverage under a new employer’s plans.
Employees will receive pay for all unused and accrued vacation for the year of termination as a part of their final regular pay. Payment will be made in conformance with prevailing state laws.
Other Company Payments
Notwithstanding any provision of this Plan to the contrary, the severance pay under this Plan shall be reduced by the severance benefits then payable to an employee under any other agreement, understanding, plan, policy, program or arrangement of the Employer or a subsidiary or affiliate of the Employer.
In no event will an employee be eligible for severance payment under this Plan until the employee signs a separation letter along with a release and waiver of claims in the form proposed by the Employer.
This Plan is administered by the Company (the “Plan Administrator”). The Plan Administrator may designate persons to carry out its responsibilities under this Plan. The Plan Administrator reserves absolute discretionary authority to determine all matters arising in connection with the administration, interpretation and application of this Severance Plan, including all questions of coverage, facts, eligibility and methods of providing and arranging for any benefits. Benefits will be paid under this Plan only if the Plan Administrator decides in its discretion that an individual is entitled to them.
Amendment and Termination
The statements contained in this Plan are not intended to create nor are they to be construed to constitute conditions of employment or a contract of employment between the Employer and any employee. Except as provided in the following sentence, the Company reserves the right to modify, suspend or terminate the Plan or the benefits provided at any time without prior notice to employees. Solely with respect to the provisions under “Amount of Severance Pay – Change of Control”, no amendment of such provisions will be effective until 18 months following the date a notice of such amendment is provided to employees of the Company.
Benefit Claim Process
The Employer will notify eligible employees of any amounts of severance benefits payable under this Plan. If an employee does not receive severance pay benefits within 60 days of his or her date of termination, he or she may assume that the Plan Administrator has determined that such employee is not eligible for severance pay benefits. If any employee believes that he or she has been denied severance pay benefits to which he or she may be entitled, the employee should submit a written claim for severance pay benefits to the Director, Compensation, Benefits and HRIS of the Company. The Director, Compensation, Benefits and HRIS of the Company has the full discretion of the Plan Administrator in deciding claims for benefits.
The Director, Compensation, Benefits and HRIS of the Company will notify the employee of any claim for severance pay that is denied, in whole or in part, within 90 days of the date the claim is received (unless special circumstances required additional time for processing the claim). The notice will contain:
• the specific reason(s) why the claim was denied;
• the specific Plan provision(s) on which the denial was based;
• a description of additional information required by the Company and the reasons why such information is needed;
• the procedure for review of the denial.
Benefit Claim Appeal Process
If a claim is denied, the employee and/or his or her authorized representative may file a written appeal to the Salary Committee of the Company within 60 days of the date the notice of denial is received. The employee and/or his or her authorized representative may review Plan documents and other documents that affect the claim. The request for a review should state the reason(s) why the employee feels the claim was improperly denied. Additional data, questions or comments should also be submitted.
The Salary Committee will render a decision on the appeal within 60 days after receipt of a request for review unless special circumstances require an extension of time for review, in which case the time limit will not be later than 120 days after receipt. The decision will be in writing, will include the specific reasons for the decision and specific references to the pertinent Plan provisions on which the decision is based.
Neither the use of service time in calculating severance nor any other provision of this Plan shall be construed as giving rise to or granting any vested right to receive severance benefits.
For purposes of this Plan, in no event does merger or acquisition of the Employer, or the purchase of a portion of the Employer, by or with another company constitute termination of employment with the Employer when employment continues with the merged, acquiring or purchasing company.
Plan Sponsor and Plan Administrator: ACCO Brands, Inc.
300 Tower Parkway
Lincolnshire, IL 60069
Severance pay provided under this Plan is payable solely from the general assets of the Employer.
A “Change of Control” of the Employer shall be deemed to have occurred if (i) any person (as that term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as in effect on February 28, 2000) other than Fortune Brands, Inc. (“Fortune”) or an entity controlled by Fortune is or becomes the beneficial owner (as that term is used in Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder, as in effect on February 28, 2000) of 20% or more of the combined voting power of the outstanding voting securities entitled to vote generally in the election of directors (“Voting Securities”) of the Employer, and Fortune Brands, Inc. ceases to own at least 60% directly or indirectly of the Voting Securities, excluding, however (A) any acquisition by an employee benefit plan (or related trust) sponsored or maintained by Fortune or an entity (including the Employer) controlled by Fortune, or (B) any acquisition by an entity controlled by Fortune; (ii) the Employer shall be merged or consolidated with, or, in any transaction or series of transactions, substantially all of the business or assets of the Employer shall be sold or otherwise acquired by, another corporation or entity unless, as a result thereof, Fortune shall beneficially own, directly or indirectly, at least 60% of the combined Voting Securities of the surviving, resulting or transferee corporation or entity (including without limitation, a corporation that as a result of such transaction owns the Employer or all or substantially all of the Employer’s assets either directly or through one or more subsidiaries); or (iii) the approval of a complete liquidation or dissolution of the Employer by its stockholder(s).