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Exhibit 10.5
January 21, 2000
Mr. Fred Jones
9499 Inglewood Cove
Germantown, TN 38139
RE: EMPLOYMENT STATUS AND CONDITIONS OF
RETIREMENT WITH THOMAS & BETTS
Dear Fred:
To clarify our prior discussions, I have outlined below the terms and conditions
of your continued employment status as well as your retirement from Thomas &
Betts Corporation:
1. Effective immediately, it is your intent to announce your plans to retire
from Thomas & Betts. Concurrent with this announcement we will initiate an
aggressive search for your replacement. You have agreed that during the
search process you will continue in the position of our Chief Financial
Officer at your current salary and with all current benefits. Further, you
will assist your replacement in an appropriate transition period. Following
the satisfactory transition of duties, you will be placed on an inactive
employment status for a period of eight months or until January 5, 2001,
whichever is later. During this inactive employment period, you will
receive $10,961.54 per bi-weekly pay period but in no event will the
aggregate bi-weekly payments during the inactive period exceed $200,000.00.
Your retirement will be effective upon the termination of the inactive
employment status. Determining the commencement of the inactive employment
period shall be at my sole discretion; however, in no event will the
inactive employment period commence later than July 1, 2000.
2. During the active and inactive period specified above, you will continue to
participate in all benefit and perquisite plans that are currently provided
to Corporate Officers of Thomas & Betts. This shall include restricted
stock and stock options and any earned bonus granted or paid at any time by
the Company during your employment by the Company in fiscal year 2000, but
specifically excludes restricted stock and stock options granted in 2001.
Notwithstanding the date of your retirement, you shall be paid the bonus
for fiscal year 2000 that you would have earned had you been an employee of
the Company on its normal payment date. Such bonus shall be paid on the
normal payment date, currently estimated to be in March 2001, without
deferral or adjustment as might otherwise be provided under the new EVA
incentive plan for "banked" amounts. Your Employment Agreement dated
November 3, 1999 shall
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remain in effect to the date of your actual retirement, and if a
"Change-of-Control" as defined therein occurs prior to the effective date
of your retirement, then in addition to the provisions of this Agreement
you shall also have all rights granted under such Employment Agreement on
the same basis as if your employment agreement was terminated voluntarily
for "Good Reason" as defined in Section 6(c) therein.
3. Your retirement date from Thomas & Betts shall be the day immediately
following the completion of your period of inactive employment, as
described above.
4. Upon your retirement, which is with the consent of the Company for all
purposes, all Stock Options which will at the time have been granted to you
will be treated in accordance with the Grant Agreement. Specifically,
Options may be exercised in full at any time within six (6) years of the
date of retirement, provided, however, that if such exercise occurs more
than three (3) months after the date of such retirement, the Option shall
be treated as a nonqualified stock option. Options cannot extend beyond
their expiration date.
5. Regarding your Restricted Stock Awards, I will recommend to the Human
Resource Committee of the Corporation's Board of Directors that the awards
granted to you during your service with the corporation be released to you
as of the time the restrictions lapse. As you know, the release of these
awards is at the sole discretion of the Human Resource Committee. It is
intended that, in accordance with past practices, the awards will be
released as per the original schedules if you have not violated Sections 9,
10 and/or 11 below. In the event of a Change-of-Control, as referenced
above, the restrictions on all previously unvested shares shall immediately
lapse and become vested, and all unvested options shall similarly
immediately vest.
6. I will also recommend that the Human Resource Committee approve an
additional grant of benefits under the Thomas & Betts Executive Retirement
Plan ("Retirement Plan"), as follows: Your benefits under the Retirement
Plan shall be calculated under Section 2.05(b) of the Plan with the
addition of five (5) years credited service such that you shall be credited
with a total of ten years, and such additional months as appropriate, of
service. In determining any Actuarial Equivalent under the Retirement Plan,
the "PBGC Interest Rate," as otherwise defined in the Retirement Plan,
shall be no greater than the actual PBGC Interest Rate in effect on the
date of this letter.
7. During the period of inactive employment described above in paragraphs 1
and 2, you will provide consulting services to the corporation as may be
reasonably requested from time to time both to facilitate the transition of
your successor as well as on other matters within your competence,
knowledge and experience.
8. With the successful completion of the employment terms set forth above,
upon the conclusion of the period of inactive employment, your retirement
benefits shall be as follows:
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a. Executive Retirement Plan benefits as outlined in paragraph 6 above. A
preliminary calculation is attached, in which a retirement date of
October 1, 2000 was assumed. Your actual date of retirement will
obviously affect the calculation.
b. Comprehensive medical and dental coverage, for you and your covered
dependents, for a period of one year commencing on the day following
your retirement date. The plan benefits and their costs will be based
upon then-current plan offerings made available to active employees of
Thomas & Betts. As you know, such plans may be changed from time to
time and such changes in plan design, and/or participant contribution
levels, will be applied to you in the same manner they are applied to
our active employee participants.
Following this one-year period of coverage, you will have the option
to continue medical and dental benefits as available through the
Consolidated Omnibus Benefits Reconciliation Act (COBRA).
c. The Company shall provide indemnification as currently in effect, and
shall maintain Directors' and Officers' Liability coverage under terms
and conditions at least as favorable to you, and in amounts at least
as much, as those currently in effect; however, such coverage shall in
any event be maintained for a minimum period of five (5) years
following your retirement.
9. You will refrain, directly or indirectly, from being employed by, engaging
in or rendering service of any nature to any business competitive with the
business of the corporation or any affiliate or subsidiary for a period of
five years from the date of your retirement unless you obtain our prior
written consent, which consent will not be unreasonably withheld where your
services for such business would not directly relate to competitive
activities. You also acknowledge that during your employment you developed,
acquired and had access to substantial highly confidential operations,
legal, technical and financial information. You agree that you shall retain
all such confidential information in trust in a fiduciary capacity for the
sole benefit of the Company and will not by any means divulge, use, or
permit any third party to use any such confidential information except with
the written approval of the Company's Chief Executive Officer.
10. You agree to cooperate fully in any investigation requested by the
corporation with respect to any matter that arose during your employment
with the corporation or which may involve matters within your knowledge. If
any claims are asserted by or against the corporation (including its
subsidiaries and affiliated entities), with respect to any matter that
arose during your employment or about which you have any knowledge or
information, you will cooperate fully in the corporation's prosecution or
defense of such claims. If these efforts on your part occur after the
effective date of your retirement, you will receive reasonable compensation
for such efforts.
11. You specifically agree that you will not make any disparaging remarks,
verbally or in writing, about the corporation, its officers, directors,
shareholders, its policies,
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practices and customs, its products, strategies, or otherwise. It is
expressly understood that your violation of this undertaking may adversely
affect the future vesting of shares and options which the Board's Human
Resources Committee would otherwise approve.
12. Your obligations under Sections 9, 10 and 11 above shall be contingent on
the approval by the Human Resource Committee of your additional pension
benefit as described in Section 6 above.
13. This agreement shall be binding upon and inure to the benefit of any
successor or assign of the Corporation.
14. This agreement shall be construed in accordance with and governed by the
laws of the State of Tennessee.
15. Nothing contained in this agreement shall supersede or eliminate any other
retirement or other benefit to which you are entitled; the benefits
provided herein are in addition to any other benefits to which you would
otherwise be entitled. To the extent any benefit conferred here may be
inconsistent with any practice or policy maintained by the Company, the
provisions of this letter shall be controlling.
Fred, I wish you much happiness as you enter this new phase of your life.
Sincerely,
Clyde R. Moore
Agreed:
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Fred R. Jones
Date:
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