Abc Corp. has made the decision to terminate its long-term, Senior Vice President of Operations, Timothy Jones. According to ABC’s President, Sally Reynolds, Tim has been struggling with depression and she suspects he may also have been drinking heavily during non-work hours (based on several instances of work absences). These issues have negatively impacted Tim’s performance to such a degree that Sally no longer feels comfortable continuing to work with him.

 Tim is 56 years old and has been working for ABC for the last 15 years in various positions. He makes $150,000 per year, receives fully-paid medical/dental insurance, a targeted bonus of 10% per year, and participates in ABC’s 401(k) program (with employer matches up to 5% of base pay).

1. Each group should answer the following question: should ABC terminate Jones with or without offering a separation package? Explain why.

2. Develop a term sheet you believe fairly represents the separation package ABC will offer to Jones.

Explain your rationale for your respective term sheet.