September 14, 1989
as amended June 11, 1998
and June 14, 2001
COLGATE-PALMOLIVE COMPANY
EXECUTIVE SEVERANCE PLAN, AS AMENDED AND RESTATED
1. PURPOSE.
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The purpose of the Colgate-Palmolive Company Executive Severance Plan (the
"Plan") is to provide executives who are in a position to contribute
materially to the success of Colgate-Palmolive Company (the "Parent
Company") or any company at least 80% of whose voting shares are owned
directly or indirectly by it (collectively, the "Company") with reasonable
compensation in the event of their termination of employment with the
Company under the circumstances described herein.
2. EFFECTIVE DATE.
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The Plan, as amended and restated, is effective as of June 14, 2001.
3. ADMINISTRATION.
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The Plan shall be administered by a Committee. Committee shall mean (i)
prior to a Change of Control, the Personnel and Organization Committee of
the Board of Directors of the Parent Company (the "Board") as then
constituted and (ii) following a Change of Control, the Committee described
in (i) above, as constituted immediately before the Change of Control, with
such changes in the membership thereof as may be approved from time to time
following the Change of Control by a majority of the members of such
Committee as constituted prior to the Change of Control. Notwithstanding
any other provision of this Plan, neither the Board nor the Company shall
have any right to appoint members to or to remove members from the
Committee following, or otherwise in connection with, a Change of Control.
Any interpretation of the Plan or construction of any of its provisions by
the Committee shall be final.
4. PARTICIPATION.
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The Committee shall from time to time select the employees who are to
participate in the Plan (the "Participants") from among those employees who
are determined by the Committee to be in a position to contribute
materially to the success of the Company. The Company shall advise each
Participant of his participation in the Plan by a letter setting forth (i)
the benefits to which the Participant would become entitled, (ii) the
period, expressed in months, during or for which the Participant would
become entitled to such benefits which period shall not be less than 12
months nor more than
36 months (the "Earned Benefit Period") and (iii) such other terms,
provisions and conditions not inconsistent with the Plan as shall be
determined by the Committee.
A Participant shall cease to be a Participant in the Plan upon termination
of employment with the Company or, if earlier, upon termination of the
Plan. Notwithstanding the foregoing, a Participant who terminates
employment prior to termination of the Plan shall remain a Participant
until receipt of all of the payments, if any, to which he is entitled under
the terms hereof.
5. PAYMENTS UPON QUALIFIED TERMINATION OF EMPLOYMENT.
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In the event of a Participant's Qualified Termination of Employment, the
Participant shall be entitled, as compensation for services rendered
(subject to any applicable payroll or other taxes required to be withheld)
to:
(a) receive an amount equal to the product of (i) the sum of (A) the
Participant's annualized Monthly Base Salary at the rate in effect
immediately prior to a Qualified Termination of Employment pursuant to
Section 8(a)(i) or immediately prior to an Adverse Change in
Conditions of Employment, as the case may be, or, if higher, at the
highest rate in effect during the 90-day period preceding the Change
of Control plus any salary-related allocations that may be made to the
Participant's account under the Company's Savings and Investment Plan
for the year in which the Qualified Termination of Employment occurs
(for purposes of this Plan, Monthly Base Salary shall mean regular
monthly salary as indicated by the Company's payroll records) and (B)
the higher of (X) the highest annual bonus award paid or payable to
the Participant (either pursuant to the Company's Executive Incentive
Compensation Plan, the Bonus Savings Account of the Company's Savings
and Investment Plan (net of applicable gross-up) or other bonus,
incentive or compensation plan of the Company or otherwise) for any
year during the five-year period ending immediately prior to the year
in which the Qualified Termination of Employment occurs (provided,
however, that if such five-year period includes the year in which the
Change of Control occurs, then the annual bonus paid or payable for
such year shall be deemed to be the higher of the said bonus actually
paid or payable and the bonus that would have been paid for such year,
determined as if all earnings, profit and other goals (whether
established for the Participant or the Company), if any, had been met
for such year and as if the Participant's employment had continued
through the end of such year on the same basis as immediately prior to
the Change of Control) and (Y) the bonus that would have been paid to
the Participant (either pursuant to the Company's Executive Incentive
Compensation Plan, the Bonus Savings Account of the Company's Savings
and Investment Plan (net of applicable gross-up) or other bonus,
incentive or compensation plan of the Company or otherwise) for the
year in which the Qualified Termination of Employment occurs,
determined as if all earnings, profit or other goals (whether
established for the Participant or the Company), if
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any, had been met for such year and as if the Participant had
continued to be employed by the Company through the end of such year
on the same basis as immediately prior to a Qualified Termination of
Employment pursuant to Section 8(a)(i) or immediately prior to an
Adverse Change in Conditions of Employment, as the case may be, and
(ii) a fraction, the numerator of which is the number of months in his
Earned Benefit Period and the denominator of which is twelve,
provided, however, that such resulting amount shall be reduced if and
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to the extent required by the terms of Section 9 hereof; such amount
shall be payable in an undiscounted cash lump sum within 30 days of
the Participant's Qualified Termination of Employment;
(b) remain for his Earned Benefit Period an active Participant in all
welfare benefit plans, including but not limited to plans providing
life insurance, disability, accident, sickness, and/or medical
benefits, in which, and on the same basis as, he was participating at
the time of the Change of Control (or, if more favorable to the
Participant, as in effect at any time thereafter with respect to other
key executives), but subject to any coordination of benefits
provisions contained in such plans, or, alternatively, be provided
with substantially similar benefits for such period; provided, in any
case, that the Participant shall be required to make contributions to
the cost of such plans or benefits and pay co-payments to the same
extent and on the same basis as required before the Participant's
Qualified Termination of Employment or, if more favorable to the
Participant, as active employees who continue to participate in such
welfare benefit plans during the Earned Benefit Period;
(c) receive a single cash lump sum within 30 days of the Participant's
Qualified Termination of Employment equal to the excess of (i) over
(ii) as described below:
(i) The present value of benefits under the Employees' Retirement
Income Plan and the Supplemental Salaried Employees' Retirement
Plan or any successor plans thereto to which the Participant
would have been entitled commencing on the earliest date on which
such benefits could have commenced if he had remained in the
employ of the Company during the Earned Benefit Period or until
age 65, whichever occurs first, based on his Recognized Earnings
(as defined in the Employees' Retirement Income Plan) as
determined most recently prior to the Qualified Termination of
Employment and assuming for this purpose that all accrued
benefits are fully vested and that benefit accrual formulas are
no less advantageous to the Participant than those in effect
during the 90-day period preceding the Change of Control;
(ii) The present value, as of the Qualified Termination of Employment,
of benefits to which the Participant would actually be entitled
under the Employees' Retirement Income Plan and the Supplemental
Salaried
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Employees' Retirement Plan commencing on the earliest date on
which such benefits could actually commence.
The present-value amounts in (i) and (ii) above will be calculated based
on the same methods and assumptions used when calculating lump sum amounts
under the Supplemental Salaried Employees' Retirement Plan and inclusive
of all subsidized forms of annuities under both the Employees' Retirement
Income Plan and the Supplemental Salaried Employees' Retirement Plan.
6. PAYMENTS UPON CHANGE OF CONTROL.
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In the event of a Change of Control of the Company (and whether or not the
Participant's employment terminates), each Participant shall be entitled,
as compensation for services rendered before the Change of Control,
regardless of whether the Participant remains employed after the Change of
Control (subject to any applicable payroll or other taxes required to be
withheld) to:
(a) receive for the year in which the Change of Control occurs a bonus
(either pursuant to the Company's Executive Incentive Compensation
Plan, the Bonus Savings Account of the Company's Savings and
Investment Plan or other bonus, incentive or compensation plan of the
Company or otherwise) equal to the product of (i) the amount
determined pursuant to Section 5(a)(i)(B)(Y), provided, however, that
if no such goals have been established for such year, the amount
determined pursuant to Section 5(a)(i)(B)(X), and (ii) a fraction, the
numerator of which is the number of months (or part thereof) in the
period beginning January 1 of the year in which the Change of Control
occurs and ending on the date of the Change of Control and the
denominator of which is twelve; such bonus shall be payable in cash
not later than the 30/th/ day following the day on which the Change of
Control occurs; and provided, further, that to the extent the
Participant becomes entitled to another annual bonus based upon
performance and/or service for the same period (or a longer period
including such period), the amount thereof may be offset by the amount
paid pursuant to this Section 6(a);
(b) receive within 30 days following the Change of Control, all
compensation amounts that the Participant previously has elected to
defer, unless the Company has established procedures to permit the
Participant to elect, and the Participant has timely elected in
accordance with those procedures, to have the normal payment schedule
under the applicable deferred compensation plan or arrangement
continue to apply following a Change of Control.
7. EXERCISABILITY OF STOCK OPTIONS UPON CHANGE OF CONTROL.
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In the event of a Change of Control, each stock option then held by a
Participant that was granted under any of the Company's stock option plans
(whether or not otherwise
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exercisable as of such Change of Control and whether or not the
Participant's employment terminates) that either was not granted in
conjunction with a stock appreciation unit or was granted in conjunction
with a stock appreciation unit whose value has been limited, shall become
exercisable as of such Change of Control.
8. QUALIFIED TERMINATION OF EMPLOYMENT.
-----------------------------------
(a) Qualified Termination of Employment with respect to any Participant
shall mean termination of employment of the Participant with the
Company, other than as a consequence of the death or Disability of the
Participant, within two years after a Change of Control of the
Company,
(i) by the Company for any reason other than for Cause, or
(ii) by the Participant by reason of an Adverse Change in Conditions
of Employment.
(b) For the purpose of this Section, Cause shall mean serious, willful
misconduct in respect of the Participant's obligations to the Company
(including but not limited to final conviction for a felony or
perpetration of a common-law fraud) that has resulted, or is likely to
result, in material economic damage to the Company.
(c) An Adverse Change in Conditions of Employment shall mean the
occurrence of any of the following events:
(i) the assignment to the Participant of any duties inconsistent in
any respect with the Participant's position (including status,
offices, titles and reporting requirements), authority, duties
or responsibilities from those in effect immediately before the
Change of Control, or any other diminution in such position,
authority, duties or responsibilities (whether or not occurring
solely as a result of the Company's ceasing to be a publicly-
traded entity), excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
that is remedied by the Company promptly after receipt of
notice thereof given by the Participant;
(ii) a reduction by the Company of the Participant's Monthly Base
Salary as in effect immediately preceding the Change of Control
or as the same may thereafter be increased from time to time;
(iii) failure by the Company to provide the Participant with
incentive compensation opportunities that are, in the
aggregate, at least as favorable (in terms of the value of the
opportunities and the difficulty of achieving any associated
goals) as those provided to the Participant immediately before
the Change of Control, or to provide the Participant with
employee
5
benefits that are, in the aggregate, at least as favorable as
those provided to the Participant immediately before the Change
of Control;
(iv) the Company's requiring the Participant (a) to be based at an
office located more than fifty (50) miles and at least twenty
(20) additional miles from the place at which the Participant's
principal residence was located immediately prior to the Change
of Control, (b) to be based at a location other than the
principal executive offices of the Company, if the Participant
was based at the principal executive offices immediately
preceding the Change of Control, or (c) to travel on Company
business to a substantially greater extent than required
immediately before the Change of Control.
A Participant's failure to object to a change described in (i), (ii), (iii) or
(iv) shall not constitute a waiver of such change as an Adverse Change in
Conditions of Employment. Any good faith determination by a Participant of an
Adverse Change in Conditions of Employment shall be determinative.
(d) For purposes of the Plan, a Change of Control of the Company shall
mean the happening of any of the following events:
(i) An 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) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Securities Exchange Act of 1934) 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"); excluding, however, the
following: (1) any acquisition directly from the Company, other
than an acquisition by virtue of the exercise of a conversion
privilege unless the security being so converted itself was
acquired directly from the Company, (2) any repurchase by the
Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
entity controlled by the Company, or (4) any acquisition pursuant
to a transaction that complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 8(d); or
(ii) A change in the composition of the Board such that the
individuals who, as of the Effective Date of the Plan, constitute
the Board (such Board shall be hereinafter referred to as the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that, for purposes of
this Section 8(d) any individual who becomes a member of the
Board subsequent to the Effective Date of the Plan, whose
election, or
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nomination for election by the Company's shareholders, was
approved by a vote of at least a majority of those individuals
who are members of the Board and who were also members of the
Incumbent Board (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of
the Incumbent Board; provided, further, that any such individual
whose initial assumption of office occurs as a result of either
an actual or threatened election contest (as such terms are used
in Rule 14a-11 of Regulation 14A promulgated under the Securities
Exchange Act of 1934) or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent
Board; or
(iii) The consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company ("Corporate Transaction"); excluding,
however, such a Corporate Transaction pursuant to which (A) all
or substantially all of the individuals and entities who are the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such Corporate Transaction will beneficially
own, directly or indirectly, more than 60% of, respectively, the
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 Corporate Transaction
(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 Corporate Transaction, of
the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Corporate
Transaction) will beneficially own, directly or indirectly, 20%
or more of, respectively, the outstanding shares of common stock
of the corporation resulting from such Corporate Transaction or
the combined voting power of the outstanding voting securities of
such corporation entitled to vote generally in the election of
directors except to the extent that such ownership derives from
ownership of a 20% or more interest in the Outstanding Company
Common Stock and/or Outstanding Company Voting Security that
existed prior to the Corporate Transaction, and (C) individuals
who were members of the Incumbent Board will constitute at least
a majority of the members of the board of directors of the
corporation resulting from such Corporate Transaction; or (iv)
the approval by shareholders of a complete liquidation or
dissolution of the Company.
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(e) Termination by the Company of a Participant's employment based on
Disability shall mean termination because of absence from duties with
the Company on a full-time basis for six consecutive months, as a
result of the Participant's incapacity due to physical or mental
illness which is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the
Participant or the Participant's legal representative (such agreement
as to acceptability not to be withheld unreasonably).
9. EXCISE TAX PROVISION.
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(a) Anything in this Plan to the contrary notwithstanding and except as
set forth below, in the event it shall be determined that any Payment
would be subject to the Excise Tax, then the Participant shall be
entitled to receive an additional payment (a "Gross-Up Payment") in an
amount such that after payment by the Participant of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Participant retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments (regardless of whether the Participant's employment has
terminated). Notwithstanding the foregoing provisions of this Section
9(a), if it shall be determined that the Participant is entitled to a
Gross-Up Payment, but that the Parachute Value of Payments does not
exceed 110% of the Safe Harbor Amount, then no Gross-Up Payment shall
be made to the Participant and the Plan Payments, in the aggregate,
shall be reduced (but not below zero) such that the Parachute Value of
all Payments equals the Safe Harbor Amount, determined in such a
manner as to maximize the Value of all Payments actually made to the
Participant.
(b) Subject to the provisions of Section 9(c), all determinations required
to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be
made by Arthur Andersen LLP (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the
Participant within 15 business days of the receipt of notice from the
Participant that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is
serving as accountant or auditor for the individual, entity or group
effecting the Change of Control, the Participant may (but shall not be
required to) appoint another nationally-recognized accounting firm to
make the determinations required hereunder (which accounting firm
shall then be referred to as the Accounting Firm hereunder). All fees
and expenses of the Accounting Firm shall be borne solely by the
Company. Subject to Section 9(e) below, any Gross-Up Payment, as
determined pursuant to this Section 9, shall be paid by the Company to
the Participant within five days of the receipt of the Accounting
8
Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Participant. As a result of the
uncertainty in the application of Section 4999 of the Internal Revenue
Code of 1986, as amended from time to time (the "Code") at the time of
the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by the
Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the
Participant thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be
promptly paid by the Company to or for the benefit of the Participant.
(c) The Participant shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the
payment by the Company of the Gross-Up Payment. Such notification
shall be given as soon as practicable but no later than ten business
days after the Participant is informed in writing of such claim and
shall apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Participant shall not
pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Participant in writing
prior to the expiration of such period that it desires to contest such
claim, the Participant shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Participant harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 9(c), the Company shall control all proceedings taken in
9
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Participant to pay the tax
claimed and sue for a refund or contest the claim in any permissible
manner, and the Participant agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company
directs the Participant to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Participant,
on an interest-free basis and shall indemnify and hold the Participant
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the
taxable year of the Participant with respect to which such contested
amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be
payable hereunder and the Participant shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
(d) If, after the receipt by the Participant of an amount advanced by the
Company pursuant to Section 9(c), the Participant becomes entitled to
receive any refund with respect to such claim, the Participant shall
(subject to the Company's complying with the requirements of Section
9(c) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Participant of an amount
advanced by the Company pursuant to Section 9(c), a determination is
made that the Participant shall not be entitled to any refund with
respect to such claim and the Company does not notify the Participant
in writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
(e) Notwithstanding any other provision of this Section 9, the Company may
withhold and pay over to the Internal Revenue Service for the benefit
of the Participant all or any portion of the Gross-Up Payment that it
determines in good faith that it is or may be in the future required
to withhold, and the Participant hereby consents to such withholding.
(f) Definitions. The following terms shall have the following meanings for
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purposes of this Section 9:
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(i) "Excise Tax" shall mean the excise tax imposed by Section 4999
of the Code, together with any interest or penalties imposed
with respect to such excise tax.
(ii) The "Net After-Tax Amount" of a Payment shall mean the Value of
a Payment net of all taxes imposed on the Participant with
respect thereto under Sections 1 and 4999 of the Code and
applicable state and local law, determined by applying the
highest marginal rates that are expected to apply to the
Participant's taxable income for the taxable year in which the
Payment is made.
(iii) "Parachute Value" of a Payment shall mean the present value as
of the date of the Change of Control for purposes of Section
280G of the Code of the portion of such Payment that
constitutes a "parachute payment" under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such
Payment.
(iv) A "Payment" shall mean any payment or distribution in the
nature of compensation (within the meaning of Section
280G(b)(2) of the Code) to or for the benefit of the
Participant, whether paid or payable pursuant to this Plan or
otherwise.
(v) A "Plan Payment" shall mean a Payment paid or payable pursuant
to this Plan (disregarding this Section 9).
(vi) The "Safe Harbor Amount" means the maximum Parachute Value of
all Payments that the Participant can receive without any
Payments being subject to the Excise Tax.
(vii) "Value" of a Payment shall mean the economic present value of a
Payment as of the date of the Change of Control for purposes of
Section 280G of the Code, as determined by the Accounting Firm
using the discount rate required by Section 280G(d)(4) of the
Code.
10. CONFIDENTIAL INFORMATION.
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The Participant shall hold, in a fiduciary capacity for the benefit of the
Company, all secret or confidential information, knowledge or data relating
to the Company and its businesses which shall have been obtained by the
Participant during his employment by the Company and which shall not be
public knowledge (other than by acts of the Participant in violation of
this provision). After termination of the Participant's employment with the
Company, the Participant shall not, without the prior written consent of
the Company, communicate or divulge any such information, knowledge or data
to any one other than the Company and those persons designated by it. In no
event shall an asserted violation of this Section constitute a basis for
deferring or
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withholding any amounts otherwise payable to the Participant under the
Plan. It shall be a condition to a Participant's right to receive payments
and benefits under the Plan that the Participant agree to and comply with
the foregoing covenant.
11. FINANCING.
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Benefit payments under the Plan shall constitute general obligations of the
Company in accordance with the terms of the Plan. A Participant shall have
only an unsecured right to payment thereof out of the general assets of the
Company. Notwithstanding the foregoing, the Company may, by agreement with
one or more trustees to be selected by the Company, create a trust on such
terms as the Company shall determine to make payments to Participants in
accordance with the terms of the Plan.
12. TERMINATION AND PAYMENT OF THE PLAN.
-----------------------------------
The Plan shall terminate on the later of (i) June 30, 2004, unless extended
by the Board or (ii) in the event of a Change of Control of the Company on
or before the termination date of the Plan, two years after such Change of
Control, provided that the termination of the Plan shall not impair or
abridge the obligations of the Company incurred under the Plan to any
Participant as a result of a Qualified Termination of Employment that
occurs before the date the Plan is terminated.
Except as provided in the next sentence, the Board may from time to time
terminate the Plan or amend the Plan in whole or in part. The Plan may not
be terminated or amended in any manner which would adversely affect the
rights or potential rights of Participants, if the action to effect such
termination or amendment occurs (i) after a Change of Control, or (ii) in
connection with a Change of Control, unless and to the extent that the
Committee determines that such termination or amendment is required by law.
13. BENEFIT OF PLAN.
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The Plan shall be binding upon and shall inure to the benefit of the
Participants and their respective heirs and legal representatives, and the
Company and its successors. The term "successor" shall mean any person,
firm, corporation or other business entity that, at any time, whether by
merger, acquisition or otherwise, acquires all or substantially all of the
stock, assets or business of the Company.
14. NON-ASSIGNABILITY.
-----------------
Each Participant's rights under this Plan shall be non-transferable except
by will or by the laws of descent and distribution and except insofar as
applicable law may otherwise require. Subject to the foregoing, no right,
benefit or interest hereunder, shall be subject to anticipation,
alienation, sale, assignment, encumbrance, charge, pledge, hypothecation,
or set-off in respect of any claim, debt or obligation, or to
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execution, attachment, levy or similar process, or assignment by operation
of law, and any attempt, voluntary or involuntary, to effect any such
action shall, to the full extent permitted by law, be null, void and of no
effect.
15. OTHER BENEFITS.
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Except as otherwise specifically provided herein, nothing in the Plan shall
affect the level of benefits provided to or received by any Participant (or
the Participant's estate or beneficiaries) as part of any employee benefit
plan of the Company, and the Plan shall not be construed to affect in any
way a Participant's rights and obligations under any other plan maintained
by the Company on behalf of employees.
The Participant shall not be required to mitigate the amount of any payment
under the Plan by seeking employment or otherwise, and there shall be no
right of set-off or counterclaim, in respect of any claim, debt or
obligation, against any payments to the Participant, his dependents,
beneficiaries or estate provided for in the Plan.
16. TERMINATION OF EMPLOYMENT.
-------------------------
Nothing in the Plan shall be deemed to entitle a Participant to continued
employment with the Company, and the rights of the Company to terminate the
employment of a Participant shall continue as fully as though the Plan were
not in effect.
17. SEVERABILITY.
------------
In the event that any provision or portion of the Plan shall be determined
to be invalid or unenforceable for any reason, the remaining provisions and
portions of the Plan shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
18. INDEMNIFICATION.
---------------
If the Participant seeks, in any action, suit or arbitration, to enforce,
or to recover damages for breach of, his rights under the Plan, the
Participant shall be entitled to recover from the Company promptly as
incurred, and shall be indemnified by the Company against, any and all
expenses and disbursements, including attorneys' fees, actually and
reasonably incurred by the Participant. The Company shall also pay to the
Participant prejudgment interest on any money judgment obtained by the
Participant calculated at the Morgan Guaranty Trust Company of New York
corporate base rate of interest in effect from time to time from the date
that payment to him should have been made under the Plan.
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19. DELAWARE LAW TO GOVERN.
----------------------
All questions pertaining to the construction, regulation, validity and
effect of the provisions of the Plan shall be determined in accordance with
the laws of the State of Delaware without regard to the conflict of law
principles thereof.
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Executive Severance Plan - Colgate-Palmolive Co.
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