1
EXHIBIT 10.1
THE DIAL CORPORATION
00000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000-0000
August 7, 2000
Xx. Xxxxxxx X. Xxxx
The Dial Corporation
00000 Xxxxx Xxxx Xxxxxxxxx
Xxxxxxxxxx, XX 00000-0000
Dear Herb:
On behalf of the Board of Directors of The Dial Corporation (the "Company"), I
want to thank you for agreeing to serve as Chairman, Chief Executive Officer
and President of the Company. This letter sets forth the terms of your
employment with the Company:
1. Position. Commencing upon your election by the Board of Directors of
the Company, you will serve as Chairman, Chief Executive Officer and
President of the Company reporting to the Board of Directors of the
Company.
2. Base Salary. While employed by the Company, you will receive a base
salary at an annual rate of $800,000 payable in accordance with the
Company's customary payroll practices. While your right to receive
additional compensation as a non-employee Director of the Company will
be suspended during the time you serve as an employee of the Company,
any vesting conditions pertaining to your Director compensation will
continue as if you were a non-employee Director. You will recommence
receiving compensation as a non-employee Director of the Company in
the event you remain on the Board of Directors following the
termination of your employment with the Company.
3. Bonus. You will receive a bonus in the discretion of the Executive
Compensation Committee for each year of your employment with the
Company; provided, however, that you will receive a minimum guaranteed
bonus of $500,000 payable on the earlier of (i) your termination of
employment with the Company with the consent of the Board of Directors
and (ii) the first anniversary of your continued employment with the
Company.
4. Elective Deferral. Notwithstanding the foregoing, you may elect to
defer receipt of your salary and bonus on terms and conditions
consistent with the Company's Management Deferred Compensation Plan.
If your employment with the Company terminates with the consent of the
Board of Directors, you will be treated as a "retiree" for purposes of
vesting in any discounted restricted stock units acquired pursuant to
such Plan. However, at your request made at least six months prior to
your termination of employment with the Company, the Company will
continue to maintain your deferred compensation account balance
following your termination of employment so long as you remain on the
Board of Directors of the Company.
2
Xx. Xxxxxxx X. Xxxx -2- August 7, 2000
5. Benefits. While employed by the Company, you will be entitled to receive
the welfare benefits and perquisites provided by the Company to its former
Chief Executive Officer, including an annual physical in line with your
historical practices, a health club and a cell phone. The Company's health
and medical benefit programs will include you and your spouse, and any
waiting period for eligibility to participate in such programs will be
waived. In addition, you will be entitled to weekly first-class air travel
between Scottsdale, Arizona and your home in Florida and to the use of a
car, leased in the Company's name, while you are employed by the Company,
with all expenses paid by the Company on a grossed-up after-tax basis.
6. Stock Options. Upon your election by the Board of Directors of the Company,
you will be granted options to buy 375,000 shares of the Company's common
stock, which options will have a fair market value exercise price and will
vest at the rate of 1/3 per year assuming your continued employment with
the Company; provided, however, if your employment with the Company
terminates with the consent of the Board of Directors, you will be treated
as a "retiree" for purposes of these stock options. All other terms and
conditions of these stock options will be consistent with the stock options
granted to the Company's senior executives in March 2000, including
accelerated vesting upon a "change in control" of the Company.
7. Supplemental Pension. By joining the Company, we understand that you will
forfeit your right to a single life annuity from Hasbro equal to
approximately $67,000. Accordingly, the Company agrees to pay you a $67,000
single life annuity (in monthly installments) commencing upon the later of
your termination of employment with the Company and your attainment of age
65, subject to offset for any pension benefit that you may earn from the
Company.
8. Temporary Housing. The Company agrees to provide you, on a grossed-up
after-tax basis, with furnished temporary living accommodations in the
Scottsdale area while you are employed by the Company. Such accommodations
will be leased in the Company's name, and the Company will pay all
utilities and ancillary expenses.
9. Relocation. The Company will pay all expenses relating to the relocation of
your personal effects from your home in Rhode Island to the Scottsdale area
and, following your termination of employment with the Company, from the
Scottsdale area to your home in Florida. In addition, we understand that
you may feel it is appropriate to pay or reimburse Hasbro for expenses
relating to the relocation of your personal effects from your former home
in Arizona to your home in Florida. At your request, the Company will
either pay or reimburse Hasbro for such expenses.
10. Legal Expenses. The Company will pay or reimburse you for all legal
expenses that you may incur in connection with your termination of
employment with Hasbro.
3
Xx. Xxxxxxx X. Xxxx -3- August 7, 2000
Herb, let me again thank you for agreeing to serve. I look forward to
continuing our relationship.
Sincerely yours,
/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
Chairman, Executive Compensation Committee
