Severance Agreement - Dow Jones & Co. Inc. and Jerry Bailey
October 30, 2000
TO: Jerry Bailey
Dear Jerry:
This will confirm our discussions concerning your resignation
from Dow Jones due to personal family obligations.
You will continue as an employee of the company until April 30,
2001, at which time you will resign as an employee of the company
(including its subsidiaries). Your salary will continue through April
30, 2001 at the current annual rate of $580,000. In addition, you will
continue to participate in the company's annual performance bonus
program for executives both for calendar year 2000 and on a pro rata
basis for calendar year 2001. The Compensation Committee will
determine the extent to which you have met your performance criteria
for purposes of determining the total amount of the 2000 annual bonus
payable to you. With respect to your annual bonus for 2001, you will
be paid a pro rata portion of your target bonus. You will receive a
pro rata contribution under the company's 401K Plan (including under
the Supplemental Executive Retirement Plan) for the portion of 2001
during which you remain as an employee of the company. You will also
continue to participate until April 30, 2001, to the extent you are
eligible under the terms and conditions thereof, in all benefit plans
generally available to employees of the company from time to time,
except that you will not receive any new plan awards under the Long
Term Incentive Plan. You will be eligible to extend your participation
in the company's health care plan under COBRA for a period of up to 18
months after April 30, 2001. Simultaneously with the execution and
delivery of this letter you are also executing and delivering the
Release and Settlement Agreement attached hereto as Attachment 1.
During the 12 month period commencing on May 1, 2001 and ending
on April 30, 2002, you will provide such consulting services as the
company may reasonably request from time to time in connection with the
company's financial and strategic matters and such other matters as the
company may deem appropriate. In consideration of your agreements in
this letter, including your non-competition and confidentiality
obligations, and in Attachment 1 hereto, and provided that you do not
become employed by or perform consulting or similar services on a full
time basis for any entity other than the company prior to April 30,
2002, Dow Jones will pay you an annual consulting fee of $500,000,
payable in equal monthly installments. The company will reimburse you
for all expenses that you reasonably incur in connection with the
performance of your consulting services on behalf of the company, upon
submission to the company of appropriate vouchers therefor, all in
accordance with the company's policies and procedures as in effect from
time to time.
<PAGE>
Until May 1, 2004, you will refrain from engaging, whether as
an employee, consultant or otherwise, directly or indirectly, in any
business activity that is competitive with the businesses of the
company (including its subsidiaries). Further, you agree to strictly
maintain the confidentiality of all proprietary or confidential
information of the company, and not to disclose such information to any
person.
Final awards under the Long Term Incentive Plan, if any, that
may be granted to you under outstanding contingent stock rights will be
granted pro rata, at the end of the respective performance periods, and
in such amounts as the Compensation Committee may in its discretion
determine, all in accordance with the provisions of the Long Term
Incentive Plan and the agreements covering such awards applicable to
retirees. Until the Compensation Committee makes such determinations,
you will continue to receive dividend equivalents, which beginning
April 30, 2001, will be on a pro rata portion of the shares covered by
your contingent stock rights, calculated by multiplying the number of
shares covered by each contingent stock right by a fraction, the
numerator of which is the number of months during the performance
period which elapsed prior to your resignation on April 30, 2001, and
the denominator of which is the number of months in the performance
period. Your stock option agreements are hereby amended to provide
that (a) the unvested portion of the stock options that have been
previously granted to you are deemed to have vested in full on October
18, 2000 and (b) all stock options previously granted to you (including
those that vested as described in clause (a)) will not terminate upon
your ceasing full time employment with the company, but rather will
remain outstanding and will be exercisable in accordance with their
terms until April 30, 2004. Your right to receive Final Awards under
outstanding contingent stock rights, and your right to exercise your
stock options until April 30, 2004 will both terminate immediately if
(i) you become employed by, or perform consulting or similar services,
on a full time basis for any entity other than the company at any time
prior to April 30, 2004 or (ii) you fail to abide by your agreements in
this letter, including your non-competition and confidentiality
obligations, or in Attachment 1 hereto. You will not participate in
any new plan awards under the Long Term Incentive Plan and accordingly,
you will not receive a grant of contingent stock rights in respect of
the 2001-2004 performance period or any subsequent period or any new
stock option grants.
Your employment or consultancy hereunder, as the case may be,
shall terminate upon death. Upon such termination the company will
provide to your estate: (i) your accrued but unpaid salary through the
date of death and any applicable life insurance benefits under company
plans, in the event of your death prior to April 30, 2001; or (ii) your
accrued but unpaid consulting fees through the date of death, in the
event of your death during the period from May 1, 2001 through April
30, 2002.
The company will withhold from amounts due hereunder all
applicable withholding taxes and other similar deductions.
<PAGE>
Except to the extent that disclosure is required by law or
regulation in the company's SEC filings or otherwise, you and Dow Jones
will keep the terms of this agreement and attached Release and
Settlement Agreement in strict confidence. Notwithstanding the above,
you may disclose information in this agreement to your attorneys or tax
advisors, provided they agree to keep the information confidential, and
to government tax agencies, and you may disclose the non-competition
and confidentiality provisions of this agreement to potential employers
or business associates. This letter agreement and the attached Release
and Settlement Agreement set forth the entire agreement between you and
Dow Jones and supersede all prior agreements or understandings, whether
oral or written, including without limitation my letter to you of
September 11, 2000.
Very truly yours,
/s/ Peter R. Kann
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Peter R. Kann
Accepted and agreed upon:
/s/ Jerome H. Bailey
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Jerome H. Bailey
<PAGE>
Attachment 1
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RELEASE AND SETTLEMENT AGREEMENT
--------------------------------
I, Jerome H. Bailey, residing at 60 Wilzette Drive, Middletown,
NJ 07748, hereby resign from, and thereby terminate my employment with,
Dow Jones & Company, Inc. ("Dow Jones") effective April 30, 2001. In
consideration of the undertakings of Dow Jones and other consideration
set forth in the letter (the "Letter") from Peter R. Kann to me of
October 30, 2000, I do hereby release, acquire and forever discharge
Dow Jones, its successors and assigns, and all employees, officers,
directors and agents of Dow Jones individually and collectively, from
all grievances, claims, demands, actions and causes of action of any
nature whatsoever arising out of or based on my employment or
separation from employment by Dow Jones. I acknowledge and agree that
I hereby relinquish any right to and shall be forever barred from
bringing or instituting any action of any nature whatsoever, either
individually or as a member of a class or group, based on my employment
or separation from employment by Dow Jones. I acknowledge and agree
that I hereby relinquish any right to and shall be forever barred from
bringing or instituting any action or any nature whatsoever, either
individually or as a member of a class or group, based on my employment
or separation from employment by Dow Jones in any federal, state or
local judicial, quasi-judicial, administrative or other forum of
competent jurisdiction in the United States or in any other country,
including but not limited to arbitration proceedings, courts, agencies,
commissions, the Equal Employment Opportunity Commission, the National
Labor Relations Board, labor departments, or civil rights divisions or
offices.
In addition to the waivers of claims or rights above, I waive
any right that I may have to assert a claim of age discrimination under
the Age Discrimination in Employment Act which prohibits my employer
from discriminating against me on the basis of my age. I do so in
return for the consideration specified in the Letter that I would not
be otherwise entitled to. I do not waive any rights or claims that may
arise after this date. I have been afforded 21 days to decide whether
I should sign this Release and Settlement Agreement. I understand that
I will have a period of seven days during which I may revoke this
Release and Settlement Agreement and that this Release and Settlement
Agreement will not become effective or enforceable until such seven-day
period has expired. I am advised by Dow Jones that I should consult
with an attorney prior to signing this Release and Settlement
Agreement.
<PAGE>
I acknowledge and warrant that no promise or inducement not
expressed herein or in the Letter has been made to me; that in
executing this Release and Settlement Agreement I am not relying upon
any other statement or representation made by any representative of Dow
Jones; that the above mentioned consideration constitutes full
satisfaction and settlement of any such claims, demands, actions or
causes of action, should any exist or if any were to be filed; that I
am legally competent to execute this Release and Settlement Agreement;
and that before signing I read it thoroughly and understand its meaning
and effect and have executed it fully cognizant of the rights I am
relinquishing and the consideration therefor.
/s/ Jerome H. Bailey
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Jerome H. Bailey
Date: 10/31/00
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Witness: /s/ Kathryn Schlatter
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Date: 10-31-00
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