Exhibit 10(d)
AGREEMENT UPON SEPARATION OF EMPLOYMENT
This Agreement Upon Separation Of Employment ("Agreement") is made and
entered into by and between Xxxxxxx X. Xxxxxxx, his successors, heirs,
administrators, executors, personal representatives and assigns ("Xxxxxxx") and
The Quaker Oats Company, its officers, directors, shareholders, employees,
agents, assigns, subsidiaries, divisions, parents, affiliates and successors
("Quaker"), collectively "the parties." The Agreement shall become effective
seven (7) days after it is executed by Xxxxxxx.
1. Economic Consideration to Xxxxxxx
Upon becoming effective, this Agreement shall satisfy the Quaker Officers
Severance Program's (the "Program") prerequisites that in order to qualify for
Program benefits, an officer must execute a valid waiver and release of all
potential claims and sign an agreement containing several covenants, including
a non-competition provision. In addition, Xxxxxxx shall receive the following
consideration, to which he would not be entitled in the absence of this
Agreement:
X. Xxxxxxx'x active employment with Quaker is terminating on March 31,
1998. After severance payments under the Program have expired, and subject to
the provisions in Xxxxxxxxx 0, Xxxxxx shall pay Xxxxxxx an amount equal to one
year of Program payments (i.e., final salary plus average bonus). This sum
shall be paid in equal semi-monthly installments commencing as soon as payments
to him under the Program expire, and terminating on September 30, 2000 (i.e.,
each individual semi-monthly payment will be smaller than semi-monthly payments
under the Program, but there will be more than 24 such payments, and the total
of all such payments will equal one year's worth of Program payments).
Payments under this paragraph 1(A) are consideration for the covenants in
paragraph 5, not for anything else.
B. As soon as Program benefits end and continuing through September 30,
2000, Quaker shall provide Xxxxxxx with the same insurance coverage as is
provided under the Program. This benefit is part of the consideration for the
Waiver and Release in paragraph 3, and the Miscellaneous Agreements in
paragraph 4.
2. Termination Of Employment
Xxxxxxx understands and agrees that his active employment relationship
with Quaker, its parent companies, affiliates and successors, will be
permanently and irrevocably severed as of March 31, 1998. Xxxxxxx agrees he
shall not apply or otherwise seek reinstatement or reemployment by Quaker at
any time, and that Quaker has no obligation, contractual or otherwise, to
rehire, reemploy or recall him in the future. Xxxxxxx further stipulates that
this agreement is sufficient cause for Quaker to deny any request for
rescission, rehire, reemployment or recall.
Xxxxxxx agrees that prior to the effective date of his termination from
active employment, he will return all Quaker property, including but not
limited to keys, office pass, credit cards, computers, office equipment, sales
records and data. Xxxxxxx further agrees that within sixty (60) days after his
termination date, he will submit all outstanding expenses and clear all
advances and his personal advance account, if any.
3. Waiver & Release
X. Xxxxxxx waives, releases and discharges Quaker from any and all
claims and liabilities, demands, actions and causes of action, including
attorneys' fees and costs and participation in a class action lawsuit, whether
known or unknown, fixed or contingent, that he may have or claim to have
against Quaker as of the date this Agreement becomes effective. Xxxxxxx
further covenants not to file a lawsuit or participate in a class action
lawsuit to assert such claims. Without limitation, Xxxxxxx specifically waives
all claims for back pay, future pay or any other form of compensation or
income, except as provided below. This waiver includes but is not limited to
claims arising out of or in any way related to Xxxxxxx'x employment or
termination of employment with Quaker, including age discrimination claims
under the Age Discrimination In Employment Act (as amended), discrimination
claims under Title VII of the Civil Rights Act of 1964 (as amended) or the
Americans with Disabilities Act, claims for breach of contract, and any other
statutory or common law cause of action under state, federal or local law.
However, Xxxxxxx does not waive, release, discharge or covenant not to xxx
for enforcement of any rights or claims that arise out of conduct or omissions
which occur entirely after the date this Agreement becomes effective. In
addition, he does not waive any rights he may have as an employee on inactive
status and/or as a former employee, as the case may be, under any of Quaker's
fringe benefit or incentive plans (e.g., its pension plan, the Program, the
Long Term Incentive Plan of 1990, etc.), nor does he waive his right to payment
for unused vacation, if any, pursuant to Quaker's vacation policy.
Notwithstanding anything to the contrary in Paragraph 8 of this Agreement, such
benefits shall continue to be governed by the ERISA plans, contracts and/or
Quaker policies that exist independent of this Agreement.
B. Quaker waives, releases and discharges Xxxxxxx from any and all
claims and liabilities, demands, actions and causes of action, including
attorneys' fees and costs, that it may have or claim to have against Xxxxxxx as
of the date this Agreement becomes effective; provided, this waiver, release
and discharge only apply to claims as to which Quaker's senior officers were
aware, on or before the effective date of this Agreement, of all material facts
necessary to establish Xxxxxxx'x liability; and further provided, Quaker does
not waive, release, discharge or covenant not to xxx for enforcement of any
rights or claims that arise out of conduct or omissions which occur entirely
after the date this Agreement becomes effective.
C. The parties stipulate that nothing contained in this Agreement shall
be construed as an admission by either of them of any liability, wrongdoing or
unlawful conduct. It is understood that both Quaker and Xxxxxxx deny any
liability, wrongdoing or unlawful conduct, and each is providing consideration
for this waiver and release solely in order to resolve any potential disputes
between them amicably and to avoid the expense of potential litigation.
4. Miscellaneous agreements
The covenants and agreements set forth in this paragraph shall remain in
effect until March 31, 2001. Covenants 4(A) and 4(B) are material parts of
this Agreement, so a material breach of either of them by Xxxxxxx would entitle
Quaker, at its discretion, to rescind this Agreement, in addition to any other
legal or equitable remedies it might have for breach:
X. Xxxxxxx shall provide accurate information or testimony or both in
connection with any legal matter if so requested by Quaker. He shall make
himself available upon request to provide such information and/or testimony, in
a formal and/or an informal setting in accordance with Quaker's request,
subject to reasonable accommodation of his schedule and reimbursement of
reasonable expenses, including reasonable and necessary attorney fees (if
independent legal counsel is reasonably necessary).
X. Xxxxxxx shall cooperate with media requests for interviews regarding
his termination and/or Quaker, unless directed otherwise by Quaker in a
particular instance. He shall not disparage The Quaker Oats Company, its
products, or any of its directors, officers or employees in these interviews,
nor in any other private or public setting; provided, if Xxxxxxx is compelled
to provide testimony under oath, he shall testify truthfully without regard to
whether his testimony is favorable or unfavorable to Quaker, and such testimony
shall be protected against claims under this Agreement by the same privilege
that would apply to a defamation claim.
C. The Quaker Oats Company, and any officer or director acting on its
behalf, shall answer all reference inquiries directed to The Quaker Oats
Company regarding Xxxxxxx by stating only his positions held, compensation and
dates of employment. No additional information shall be provided unless
authorized in advance, in writing, by Xxxxxxx. Xxxxxxx agrees to direct all
requests for references from Quaker to the highest ranking Human Resources
officer within Quaker.
5. Prohibited Conduct
X. Xxxxxxx covenants and agrees that through the dates set forth below,
he shall not engage in any of the following activities anywhere in the world:
i. Non-competition. Xxxxxxx shall not undertake any employment,
consulting position or ownership interest which involves his Participation in
the management of a business entity that markets, sells, distributes, licenses
or produces Covered Products, unless that business entity's sole involvement
with Covered Products is that it makes retail sales or consumes Covered
Products, without competing in any way against Quaker. This covenant shall
remain in effect until September 30, 2000.
a. "Participation" shall be construed broadly to include,
without limitation: (1) holding a position in which he directly manages such a
business entity; (2) holding a position in which anyone else who directly
manages such a business entity is in Xxxxxxx'x reporting chain or chain-of-
command (regardless of the number of reporting levels between them); (3)
providing input, advice, guidance, or suggestions regarding the management of
such a business entity to anyone responsible therefor; (4) providing a
testimonial on behalf of such an operation or the product it produces; or (5)
doing anything else which falls within a common sense definition of the term
"participation," as used in the present context.
b. "Covered Products" mean any product which falls into one or
more of the following categories, so long as Quaker is producing, marketing,
distributing, selling or licensing such product anywhere in the world: sports
beverages; thirst quenching beverages; hot cereals; ready-to-eat cereals;
pancake mixes; grain-based snacks; value-added rice products; pancake syrup;
value-added pasta products; dry pasta products; and items Quaker produces for
the food service market.
ii. Raiding Employees. Xxxxxxx shall not in any way, directly or
indirectly (including through someone else acting on Xxxxxxx'x recommendation,
suggestion, identification or advice), facilitate or solicit any existing
Quaker employee to leave the employment of Quaker or to accept any position
with any other company or corporation. This covenant shall remain in effect
until March 31, 2001. For purposes of this provision, the following
definitions apply:
a. "Existing Quaker employee" means someone: (1) who is
employed by Quaker on or before the date when Xxxxxxx'x employment terminates;
(2) who is still employed by Quaker as of the date when the facilitating act or
solicitation takes place; and (3) who holds a manager, director or officer
level position at Quaker (or an equivalent position based on job duties and/or
Hay points, regardless of the employee's title).
b. The terms "solicit" and "facilitate" shall be given the
ordinary, common sense meaning appropriate in the present context.
iii. Non-disclosure. Xxxxxxx shall not use or disclose to anyone any
confidential information regarding Quaker. For purposes of this provision, the
term "confidential information" shall be construed as broadly as Illinois law
permits and shall include all non-public information Xxxxxxx acquired by virtue
of his positions with Quaker which might be of any value to a competitor or
which might cause any economic loss (directly or via loss of an opportunity) or
substantial embarrassment to Quaker or its customers, distributors or suppliers
if disclosed. Examples of such confidential information include, without
limitation, non-public information about Quaker's customers, suppliers,
distributors and potential acquisition targets; its business operations and
structure; its product lines, formulas and pricing; its processes, machines and
inventions; its research and know-how; its financial data; and its plans and
strategies. This covenant shall remain in effect until March 31, 2001.
B. In the event of a breach, threatened breach or situation that creates
an inevitable breach of any term of this paragraph by Xxxxxxx, Quaker shall be
entitled to an injunction compelling specific performance, restraining any
future violations and/or requiring affirmative acts to undo or minimize the
harm to Quaker, in addition to damages for any actual breach that occurs. The
parties stipulate and represent that breach of any provision of this paragraph
would cause irreparable injury to Quaker, for which there would be no adequate
remedy at law, due among other reasons to the inherent difficulty of
determining the precise causation for loss of customers, confidential
information and/or employees and of determining the amount and ongoing effects
of such losses.
C. In the event Xxxxxxx breaches any term of this Xxxxxxxxx 0, Xxxxxx
shall have the option of seeking injunctive relief or cancelling the payments
due under paragraph 1(A) of this Agreement. Quaker's right to terminate
Program benefits is spelled out in the Program, and is not affected by this
provision.
D. In the event Quaker elects to pursue injunctive relief, then the
following rules shall apply:
i. While litigation over the requested injunction is pending,
Quaker may, in its discretion, withhold payments otherwise due to Xxxxxxx under
paragraph 1(A); provided, Quaker's right to terminate or suspend Program
benefits, which are separate from the benefits described in paragraph 1(A), is
spelled out in the Program and is not affected by this provision.
ii. If, at the conclusion of the litigation, Quaker successfully
obtains full injunctive enforcement of all provisions in this paragraph 5 that
it attempts to enforce, then Quaker shall pay Xxxxxxx all amounts otherwise due
under paragraph 1(A) that were withheld and shall resume making all payments
required under paragraph 1(A), and shall likewise pay all Program payments that
were withheld.
iii. If, at the conclusion of the litigation, Quaker obtains some,
but not all, of the injunctive relief it seeks under this paragraph, then
Quaker shall make an election. It may either accept the injunction and proceed
as specified in subparagraph (ii) above, or it may elect to voluntarily vacate
and/or not enforce the injunction, in which event it shall have no obligation
to resume paying Xxxxxxx under paragraph 1(A), nor to pay withheld amounts.
iv. If a court entirely declines to enforce paragraph 5 of this
Agreement or holds it invalid or void, then Quaker shall have no further
obligation to pay Xxxxxxx under paragraph 1(A), including sums withheld while
litigation was pending.
v. If a court holds that the provisions of paragraph 5 are
enforceable, but further finds that Xxxxxxx did not breach any of them, then
Quaker shall pay Xxxxxxx all amounts otherwise due under paragraph 1(A) that
were withheld, and shall resume making all payments required under paragraph
1(A).
vi. Xxxxxxx shall have no claim for damages based on any delay in
the payments due under Paragraph 1(A) that results from a suspension of
payments or withholding in accordance with the preceding provisions; PROVIDED,
if payment of withheld amounts subsequently is required, then along with such
payment Quaker shall pay Xxxxxxx interest at an annualized rate of 6.0%.
vii. For purposes of this paragraph, litigation shall not be deemed
to have concluded, and no payment shall be due, until all potential appeals by
all parties are waived or exhausted.
E. Recitals: Xxxxxxx stipulates and represents that the following facts
are true, and further understands and agrees that they are material
representations upon which Quaker is relying in entering into this Agreement:
x. Xxxxxxx has been Senior Vice President of Human Resources for
several years, and in that capacity has been a member of Quaker's Senior
Leadership Team. In these positions, he participated in forming and/or was
informed about the details of operational plans and strategic long range plans
for all of Quaker's businesses. Without limitation, he has detailed knowledge
regarding business plans, new product development, pricing structure, marketing
plans, sales plans, distribution plans, and supply chain plans for all of
Quaker's products. This is: (1) information Xxxxxxx gained by virtue of his
employment at Quaker; (2) highly confidential and secret information from which
Quaker derives economic value, actual or potential, from its not being
generally known to other persons outside Quaker who might obtain economic value
from its disclosure or use; (3) information known within Quaker only to key
employees and those who need to know it to perform their jobs; (4) information
regarding which Quaker has taken reasonable measures to preserve its
confidentiality; (5) information that could not easily be duplicated by others,
and which Quaker required considerable time and effort to develop; and (6)
information which is likely to remain valuable and secret for at least three
years.
ii. By virtue of his employment at Quaker, Xxxxxxx has developed
personal and business relationships with existing Quaker employees, which he
otherwise would not have had. By virtue of his position as Quaker's most
senior Human Resources officer, he also has acquired detailed knowledge as to
which existing Quaker employees are critical to Quaker's success and future
plans, and which ones have skills or contacts that would be valuable to a
competitor.
6. Advance Determination Of Permitted/Prohibited Conduct
Xxxxxxx may request an advance written determination from Quaker's Chief
Executive Officer as to whether taking a proposed action or job would, in
Quaker's opinion, constitute a breach of this Agreement. In that event, and
provided that Xxxxxxx discloses in writing all material facts about the
proposed action or job, Quaker shall make a reasonable effort to respond to
Xxxxxxx'x request for an advance written determination within ten (10) business
days after receiving it; PROVIDED, that if circumstances materially change
after the advance determination is made (e.g., if the duties of a job change
after Xxxxxxx accepts it), the determination may be reconsidered and revised or
reversed upon thirty days advance written notice to Xxxxxxx. Quaker shall
treat as confidential any non-public information Xxxxxxx communicates as part
of a request for an advance determination.
7. Choice Of Law And Forum; Attorney Fees
A. This Agreement shall be governed by and construed in accordance with
the laws of the State Of Illinois, without giving effect to choice of law
principles.
B. In the event of any litigation over this Agreement or an alleged
breach thereof, Xxxxxxx consents to submit to the personal jurisdiction of any
court, state or federal, in the State of Illinois. The parties agree that the
Illinois courts, state or federal, shall be the exclusive jurisdiction for any
litigation over this Agreement or an alleged breach thereof.
C. In the event of litigation between Xxxxxxx and Quaker regarding any
provision of this Agreement, the party which prevails in such contest shall be
entitled to receive from the other party, in addition to any damages,
injunction, or other relief awarded by a court, reimbursement of all litigation
costs and expenses, including reasonable attorney fees, which the prevailing
party reasonably incurred as a result of such litigation, plus interest at the
applicable federal rate provided for in Section 7872(f)(2)(A) of the Internal
Revenue Code of 1986, as amended. If, in a particular contest, each party
prevails on one or more issues, the court shall exercise its equitable judgment
to determine which, if either, should be considered the prevailing party and
the percentage of that party's expenses which should be reimbursed, taking into
account inter alia the significance of the issue(s) on which each party
prevailed and the reasonableness of each party's position(s).
8. Full Agreement
This written document contains the entire understanding and agreement of
the parties on the subject matter set forth herein, and supercedes any prior
agreement relating to these matters. No promises or inducements have been made
other than those reflected herein, and no party is relying on any statement or
representation by any person except those set forth herein, including without
limitation oral or written summaries of this Agreement.
This Agreement cannot be modified or altered except by a subsequent
written agreement signed by the parties; and only Quaker's highest ranking
Human Resources officer (other than Xxxxxxx) or his direct superior shall have
authority to sign such an amendment on behalf of Quaker.
Without limitation, nothing in this document shall eliminate or reduce
Xxxxxxx'x obligation to comply with the Quaker Code Of Ethics, to the extent
that certain provisions in the Code (such as non-disclosure rules) remain
applicable to employees after termination. Likewise, nothing in this document
shall eliminate or reduce Quaker's obligation to indemnify Xxxxxxx in certain
situations, pursuant to Quaker's by-laws or applicable law.
9. Severability
Each term of this Agreement is deemed severable, in whole or in part, and
if any provision of this Agreement or its application in any circumstance is
found to be illegal, unlawful or unenforceable, the remaining terms and
provisions shall not be affected thereby and shall remain in full force and
effect, except as expressly provided below.
Unless Quaker consents, the provisions in paragraph 5 of this Agreement
are not severable from each other or from Paragraph 1(A). If any provision or
aspect of paragraph 5 is held invalid, illegal, unlawful or unenforceable, then
there is no consideration for payments under paragraph 1(A); PROVIDED, if any
provision in paragraph 5 is invalid or broader than the law allows, a court is
authorized to award the broadest injunctive relief permitted by law, and Quaker
shall thereafter make its election pursuant to paragraph 5(D)(iii) -- if Quaker
elects to accept the limited injunctive relief, then it shall consent to sever
the invalid provision(s). Quaker's consent to sever one or more provisions in
paragraph 5 may be given at any time: before, during, or after litigation, in
Quaker's sole discretion.
The Quaker Oats Company
/s/ Xxxxxx X. Xxxxxx
By one of its officers
Xxxxxxx has been advised in writing, via this notice, to consult with an
attorney before signing this Agreement. He acknowledges that he received the
original draft of this Agreement on or about March 13, 1998. Xxxxxxx
originally was given twenty one (21) days from March 13, 1998 to consider and
decide whether to sign the Agreement, but at his request Quaker agreed to
extend that period to noon on April 15, 1998; also, certain provisions from the
original draft were revised at Xxxxxxx'x request. Xxxxxxx understands that he
may revoke the Agreement within seven (7) days after signing it. Xxxxxxx
further understands that he has the right to request a different waiver,
release and separation agreeement which contains shorter non-compete, no
raiding and non-disclosure periods. Execution of such a document would satisfy
the Program's prerequisites and entitle him to Program benefits, but would not
entitle him to the additional benefits provided under this Agreement, nor
entail the additional obligations. Xxxxxxx affirms that he has carefully read
and fully understands all provisions of this Agreement, that the consideration
he is receiving is fair and adequate, and that he has not been threatened or
coerced into signing it.
April 15, 1998 /s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx X. Xxxxxxx
