EXHIBIT 10.4
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
This Confidential Separation Agreement and General Release
(the "AGREEMENT") is made as of this 11th day of December, 2000 (the "Effective
Date"), by and between Hershey Foods Corporation, a Delaware corporation (the
"COMPANY"), and Xxxxxxx X. Xxxxxxxx ("EMPLOYEE"), and together with the Company,
(the "PARTIES").
WHEREAS, Employee will be retained as an employee of the
Company on paid leave of absence until the Separation Date, as hereinafter
defined, whereupon Employee's employment with the Company shall terminate (the
"SEPARATION");
WHEREAS, the Company and Employee desire voluntarily to enter
into this Agreement in order to set forth the definitive rights and obligations
of the Parties in connection with the Separation; and
WHEREAS, the Parties enter into this Agreement for their
mutual cooperation and benefit:
NOW, THEREFORE, in consideration of the mutual covenants,
commitments and agreements set forth herein, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. ACKNOWLEDGMENT OF SEPARATION. The Parties acknowledge and agree that the
Separation shall be effective (the "Separation Date") as of the earliest of (i)
the date Employee commences full-time employment with another employer; (ii) in
the event Employee breaches any of his covenants, agreements or obligations
hereunder, the date the Company provides notice of such breach to Employee;
(iii) Employee's date of death; and (iv) June 1, 2002. If Employee commences
full-time employment with another employer prior to June 1, 2002, a
determination of whether an exception or waiver of eligibility requirements
under the SERP (as hereinafter defined) to allow Employee to receive benefits
under the SERP may be made by and in the sole discretion of the Chief Executive
Officer and Board of Directors of the Company, taking into account Section 4.9.
2. RESIGNATION FROM COMPANY BOARD OF DIRECTORS AND COMPANY OFFICES. Effective
immediately, Employee hereby voluntarily resigns from all of his positions and
offices with the Company and its subsidiaries, including, without limitation,
(i) member of the Board of Directors of the Company and of each committee
thereof of which he is a member, (ii) the Board of Directors of any subsidiary
of the Company, (iii) Executive Vice President and Chief Operating Officer, and
(iv) each office he may occupy of any subsidiary of the Company.
3. EMPLOYEE'S ACKNOWLEDGMENT OF CONSIDERATION. Employee specifically
acknowledges and agrees that certain of the obligations created and payments
made to him by the Company under this Agreement are promises and payments to
which he is not otherwise entitled under any law or contract.
4. PAID LEAVE OF ABSENCE. Employee shall be placed on a paid leave of
absence commencing on the Effective Date and continuing until the Separation
Date. This period shall be known as the "Leave of Absence Period". The following
conditions shall apply during the Leave of Absence Period:
4.1. Except as provided for below and in Section 4.2, Employee
shall continue to be eligible to receive the following, and
only the following, employment benefits and participate in or
receive benefits under the following,and only the following,
programs and benefit plans (in accordance with the terms and
conditions of the programs and benefit plans of the Company,
including, without limitation, such terms and conditions
permitting the Company to amend or terminate such programs
and benefit plans) applicable to Employee immediately
prior to the Effective Date:
4.1.1. his salary, which shall be payable in regular installments in
accordance with the Company's general payroll practices and
shall be subject to customary withholding;
4.1.2. the Company's medical (including dental and vision) benefits
programs, including the retiree medical program if Employee's
Separation Date occurs concurrently with or after he is
eligible to retire;
4.1.3. the Company's life insurance program at one-times his base
salary;
4.1.4. the Hershey Foods Corporation Deferred Compensation Plan
("DCP");
4.1.5. the Hershey Foods Corporation Retirement Plan ("HRA");
4.1.6. the Hershey Foods Corporation Employees Savings Stock
Investment and Ownership Plan ("ESSIOP"); and
4.1.7. the Hershey Foods Corporation Supplemental Executive Retirement
Plan ("SERP").
From and after Employee's Separation Date, he shall not be entitled to
any payments or benefits of any kind from the Company under this Section
4.1, and any vested rights under the DCP, the HRA, the ESSIOP, the SERP,
and the retiree medical program shall be determined by the terms and
conditions of these plans respectively.
4.2. Notwithstanding the foregoing, the parties agree:
4.2.1. Employee shall not be eligible to accrue, earn or participate
in salary adjustments after the Effective Date;
4.2.2. Employee shall not be eligible to receive any employment
benefits or participate in or receive any payments or benefits
under any programs or benefit plans not listed in
Section 4.1 (in particular, Employee shall not, effective
immediately, be eligible for any benefits under any Company
employee benefit protection program, including its Executive
Benefits Protection Plans, whether Group 2, 3 or 3A,and its
Severance Benefits Plan);
4.2.3. Upon the Effective Date, all Employee's coverage under the
Company's short-term and long-term disability plans shall
cease;
4.2.4. Employee will be paid in January 2001 for any unused vacation
days to which he is entitled in 2000 but shall not be entitled
to payment for vacation days accrued for 2001 or any
subsequent year; and
4.2.5. Employee shall not be permitted to contribute to a medical
reimbursement account under the Company's flex benefits plan
for any period after December 31,2000.
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4.3. Employee shall not participate in any part of the Long -Term
Incentive Program ("LTIP") of the Company's Key Employee
Incentive Plan ("XXXX") during 2001 or any subsequent year and
any outstanding contingent target grants of Performance Stock
Units granted to Employee prior to December 31, 2000 are
hereby cancelled, except for those granted for the 1998-2000
cycle for pay-out, if any, in February 2001 in accordance with
the terms of LTIP.
4.4. Except as provided in the immediately following sentence,
presentation of a draft of this Agreement to Employee on
December 11, 2000 for his consideration constitutes notice
of termination of employment for purposes of Section 8(a)
of the XXXX. If Employee executes this Agreement on
December 11, 2000, presentation on December 11, 2000 of a
draft of this Agreement to Employee for his consideration
shall not constitute a notice of termination of employment for
purposes of Section 8(a) of the XXXX. Whether Employee
has received a notice of termination of employment for
purposes of Section 8(a) the XXXX can be determined only upon
the occurrence or non-occurrence of certain events
following the presentation of this Agreement to Employee for
his consideration. Employee, therefore, shall not be
permitted to exercise any currently outstanding Options
granted to him previously under the XXXX unless and until
this Agreement becomes effective and enforceable.
If this Agreement becomes effective and enforceable, then
from and after the Effective Date and through and including
his Separation Date, Employee shall be considered to
be an active employee for purposes of any Options granted to
him previously under XXXX during any years prior to 2001
and may exercise in accordance with the provisions of
XXXX any such Options at any time prior to his Separation
Date and thereafter in accordance with the XXXX and
the terms and conditions of the grants of such Options if his
Separation Date occurs concurrently with or after
he is eligible to retire.
4.5. Employee shall be eligible to receive an award, if any, of his
contingent target grant for 2000 under the Annual Incentive
Program ("AIP") of XXXX subject to the terms and conditions of
the XXXX and the contingent target grant. For these purposes
his score for personal objectives will be set at 100%.
Employee shall not be entitled to participate in or receive
any benefits under the Annual Incentive Program of XXXX for
2001 or any subsequent year.
4.6. During the Leave of Absence Period, Employee shall have no
assigned duties and shall perform no services for the Company.
4.7. Except as provided for in Section 6 below, Employee shall be
free to seek and accept other employment after the Effective
Date.
4.8. In the event Employee commences other employment during the
Leaveof Absence Period, and elects to receive health insurance
benefits from another employer, then Employee shall
immediately notify the Company at 000 Xxxxxxx X Xxxxx,
Xxxxxxx, XX, Attn: Director, Employee Benefits, of his
election in writing and the health insurance provided by
the Company hereunder shall terminate as of the effective
date of such health insurance received from the other
employer. Nothing herein shall obligate Employee to
accept any health insurance benefit associated with any other
employment. Employee shall not, however, accept coverage from
BOTH the Company and a new employer.
4.9. If Employee commences full-time employment with another
employer prior to June 1, 2002, he shall be entitled to a
one-time lump-sum severance payment of
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One Million Dollars ($1,000,000), but shall receive no
futher payments or benefits under this Agreement,
in accordance with Section 4.1.
4.10. Employee shall not be subject to the minimum stockholding
requirements for Company executives or XXXX participants.
4.11. The Company will provide for the continuation of comparable
financial advisory services by AYCO for a period of six months
after the Effective Date.
5. SEPARATION AND COBRA RIGHTS. Effective as of the Separation Date, as required
by the continuation coverage provisions of Section 4980B of the U. S. Internal
Revenue Code of 1986, as amended ("THE CODE"), Employee shall be offered the
opportunity to elect continuation coverage under the group medical plan of the
Company ("COBRA COVERAGE"). The Company shall provide Employee with the
appropriate COBRA coverage notice and election form for this purpose. Employee
shall notify the Company within two weeks of any change in his circumstances
that would warrant discontinuation of his COBRA coverage and benefits (including
but not limited to Employee's receipt of group medical and dental benefits from
any other employer). The existence and duration of Employee's rights and/or the
COBRA rights of any of Employee's eligible dependents shall be determined in
accordance with Section 4980B of the Code.
6. CONFIDENTIAL, PROPRIETARY AND PRIVILEGED INFORMATION; NON-COMPETITION. The
parties agree the terms and conditions of that certain Long-Term Incentive
Program Participation Agreement and Mutual Agreement to Arbitrate Claims by and
between the Company and Employee executed by Employee January 27, 1997
("Participation and Arbitration Agreement"), a copy of which is attached hereto,
are incorporated herein by reference and made a part hereof as if fully set
forth herein. Notwithstanding any provisions to the contrary in the
Participation and Arbitration Agreement, the terms and conditions thereof shall
remain in effect for three years after Employee's Separation Date regardless of
whether Employee is eligible or not to receive benefits under the SERP.
7. GENERAL RELEASE AND WAIVER BY EMPLOYEE.
7.1. Employee, for and on behalf of himself and each of his
heirs, executors, administrators, personal representatives,
successors and assigns, hereby acknowledges full and
complete satisfaction of and fully and forever releases,
acquits and discharges the Company, together with its
subsidiaries and affiliates, and each of its and their past
and present direct and indirect stockholders, directors,
members, partners, officers, employees, agents, inside and
outside counsel and representatives and its and their
respective heirs, executors, administrators, personal
representatives, successors and assigns (collectively,
the "Releasees"), from any and all claims, demands, suits,
causes of action, liabilities, obligations, judgments,
orders, debts, liens, contracts, agreements, covenants and
causes of action of every kind and nature, whether known or
unknown, suspected or unsuspected, concealed or hidden,
vested or contingent, in law or equity, existing by statute,
common law, contract or otherwise, which have existed, may
exist or do exist, through and including the execution and
delivery by Employee of this Agreement (but not including the
Parties' performance under this Agreement), including,
without limitation, any of the foregoing arising out of or
in any way related to or based upon:
7.1.1. Employee's application for and employment with the
Company, his being an employee of the Company, or
the Separation;
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7.1.2. any and all claims in tort or contract, and any and
all claims alleging breach of an
express or implied, or oral or written, contract,
policy manual or employee handbook;
7.1.3. any alleged misrepresentation, coercion, duress,
defamation, interference with contract,
intentional or negligent infliction of emotional
distress, sexual harassment,negligence
or wrongful discharge; or
7.1.4 any federal, state or local statute, ordinance or
regulation, including but not limited to the Fair
Labor Standards Act, the Equal Pay Act, Title VII of
the Civil Rights Act of 1964, the Americans With
Disabilities Act, the Family and Medical Leave Act,
and the Pennsylvania Human Relations Act.
7.2. Employee acknowledges and agrees that other than to seek the
Company's performance under this Agreement he is waiving all
rights to xxx or obtain equitable, remedial or punitive
relief from any or all Releasees of any kind whatsoever,
including, without limitation, reinstatement, back pay,
front pay, attorneys' fees and any form of injunctive relief.
Employee acknowledges and agrees that this waiver
and release is an essential and material term of this
Agreement. Employee further acknowledges and agrees that he
will not assert any breach of any agreement,plan, or right
referred to herein based on any action or inaction of the
Releasees prior to the date hereof.
7.3. Employee understands and intends that this SECTION 7
constitutes a general release, and that no reference therein
to a specific form of claim, statute or type of relief is
intended to limit the scope of such general release and
waiver; provided, however, notwithstanding any other provision
of this Section 7, the provisions of this Section 7 shall not
apply to any rights Employee may have under the Age
Discrimination in Employment Act of 1967, as amended.
7.4. Employee expressly waives all rights afforded by any statute
which limits the effect of a release with respect to unknown
claims. Employee understands the significance of his release
of unknown claims and his waiver of statutory protection
against a release of unknown claims.
7.5. Employee agrees that he will not be entitled to or accept any
benefit from any claim or proceeding within the scope of this
SECTION 7 general release that is filed or instigated by him
or on his behalf with any agency, court or other government
entity.
8. EMPLOYEE'S REPRESENTATIONS AND COVENANTS REGARDING ACTIONS. Employee
represents, warrants and covenants to each of the Releasees that at no time
prior to or contemporaneous with his execution of this Agreement has he filed or
caused or knowingly permitted the filing or maintenance, in any state, federal
or foreign court, or before any local, state, federal or foreign administrative
agency or other tribunal, any charge, claim or action of any kind, nature and
character whatsoever ("CLAIM"), known or unknown, suspected or unsuspected,
which he may now have or has ever had against the Releasees which is based in
whole or in part on any matter referred to in SECTION 7.1. above, and, to the
maximum extent permitted by law Employee is prohibited from filing or
maintaining, or causing or knowingly permitting the filing or maintaining, of
any such Claim in any such forum. Employee hereby grants the Company his
perpetual and irrevocable limited power of attorney with full right, power and
authority to take all actions necessary to dismiss or discharge any such Claim.
Employee further covenants and agrees that he will not encourage any person or
entity, including but not limited to any current or former employee, officer,
director or stockholder of the Company, to institute any Claim against
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the Releasees or any of them, and that except as expressly permitted by law or
administrative policy or as required by legally enforceable order he will not
aid or assist any such person or entity in prosecuting such Claim.
9. NO DISPARAGING REMARKS. Employee hereby covenants to each of the Releasees
and agrees that he shall not, directly or indirectly, within or without the
Company, make or solicit or encourage others to make or solicit any disparaging
or negative remarks concerning the Releasees (as defined in SECTION 7 of this
Agreement), or any of their products, services, businesses or activities.
Employee understands that, in addition to the consequences such breach may have
under other provisions of this Agreement, his breach of this SECTION 9 and the
Company's delivery to him of notice of such breach shall result in his
Separation; shall eliminate his entitlement to any subsequent payment or
benefits under this Agreement including, without limitation, to further exercise
any Options under the XXXX and any further participation in or eligibility for
benefits under the SERP; and shall subject him to liability for any damages
arising from such remarks.
10. NO CONFLICT OF INTEREST. Employee hereby covenants and agrees that he shall
not, directly or indirectly, incur any obligation or commitment, or enter into
any contract, agreement or understanding, whether express or implied, and
whether written or oral, which would be in conflict with his obligations,
covenants or agreements hereunder or which could cause any of his
representations or warranties made herein to be untrue or inaccurate.
11. CONFIDENTIALITY. The Company and Employee agree that the terms and
conditions of this Agreement are to be strictly confidential, except that
Employee may disclose the terms and conditions to his family, attorneys,
accountants, tax consultants, state and federal tax authorities or as may
otherwise be required by law. The Company may disclose the terms and conditions
of this Agreement and the circumstances of Employee's separation as the Company
deems necessary or appropriate to its or its affiliates' or representatives'
officers, employees, board of directors, insurers, attorneys, accountants, state
and federal tax authorities, or as otherwise allowed by law. Employee represents
that except as expressly authorized by this SECTION 11 he has not discussed, and
agrees that except as expressly authorized by this SECTION 11 or by the Company
he will not discuss, this Agreement or the circumstances of his Separation, and
that he will take affirmative steps to avoid or absent himself from any such
discussion even if he is not an active participant therein. EMPLOYEE
ACKNOWLEDGES THE SIGNIFICANCE AND MATERIALITY OF THIS PROVISION TO THIS
AGREEMENT, AND HIS UNDERSTANDING THEREOF.
12. RETURN OF CORPORATE PROPERTY; CONVEYANCE OF INFORMATION. Employee hereby
covenants and agrees to immediately return all documents, keys, ID cards, credit
cards (without further use thereof), laptop computer, and all other items which
are the property of the Company and/or which contain confidential information;
and, in the case of documents, to return any and all materials of any kind and
in whatever medium evidenced, including, without limitation, all hard disk drive
data, diskettes, microfiche, photographs, negatives, blueprints, printed
materials, tape recordings and videotapes.
13. REMEDIES. In the event that Employee has breached any of his covenants,
agreements or obligations under this Agreement, the Company shall notify
Employee in writing at his home address as shown in the Company's records of the
reason for such determination. The notice shall be sent via hand delivery or
overnight courier. Employee hereby acknowledges and affirms that in the event of
any breach by Employee of any of his covenants, agreements and obligations
hereunder, Employee's Separation shall be effective as of the day the Company
provides notice thereof. Employee further hereby acknowledges and affirms that
in the event of such breach monetary damages would be inadequate to compensate
the Releasees or any of them. Accordingly, in addition to other remedies which
may be available to the Releasees hereunder or otherwise at law or in equity,
any Releasee shall be entitled to specifically enforce such
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covenants, obligations and restrictions through injunctive and/or equitable
relief, in each case without the posting of any bond or other security with
respect thereto. Should any provision hereof be adjudged to any extent invalid
by any court or tribunal of competent jurisdiction, each provision shall be
deemed modified to the minimum extent necessary to render it enforceable.
14. ACKNOWLEDGMENT OF VOLUNTARY AGREEMENT. Employee hereby acknowledges and
affirms that he is entering into this Agreement knowingly and voluntarily,
without coercion or duress of any sort, in order to receive the payments and
other consideration from the Company as set forth herein. Employee acknowledges
and affirms that he has been given adequate opportunity to review and consider
this Agreement.
15. COMPLETE AGREEMENT; INCONSISTENCIES. This Agreement and the Participation
and Arbitration Agreement constitute the complete and entire agreement between
Employee and the Company with respect to the subject matter hereof, and
supersede in their entirety any and all prior understandings, commitments,
obligations and/or agreements, whether written or oral, with respect thereto; it
being understood and agreed that this Agreement and those agreements, including
the mutual covenants, agreements, acknowledgments and affirmations contained
herein and therein, are intended to constitute a complete settlement and
resolution of all matters set forth in SECTION 7 hereof.
16. NO STRICT CONSTRUCTION. The language used in this Agreement shall be
deemed to be the language mutually chosen by the Parties to reflect their
mutual intent, and no doctrine of strict construction shall be applied
against any Party.
17. THIRD PARTY BENEFICIARIES. The Releasees are intended third-party
beneficiaries of this Agreement, and this Agreement may be enforced by each of
them in accordance with the terms hereof in respect of the rights granted to
such Releasees hereunder. Except and to the extent set forth in the preceding
sentence, this Agreement is not intended for the benefit of any person other
than the Parties, and no such other person shall be deemed to be a third party
beneficiary hereof. Without limiting the generality of the foregoing, it is not
the intention of the Company to establish any policy, procedure, course of
dealing or plan of general application for the benefit of or otherwise in
respect of any other employee, officer, director or stockholder, irrespective of
any similarity between any contract, agreement, commitment or understanding
between the Company and such other employee, officer, director or stockholder,
on the one hand, and any contract, agreement, commitment or understanding
between the Company and Employee, on the other hand, and irrespective of any
similarity in facts or circumstances involving such other employee, officer,
director or stockholder, on the one hand, and the Employee, on the other hand.
18. TAX WITHHOLDINGS. Notwithstanding any other provision herein, the
Company shall be entitled to withhold from any amounts otherwise payable
hereunder to Employee any amounts required to be withheld in respect of
federal, state or local taxes.
19. GOVERNING LAW. All issues and questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be governed by,
and construed in accordance with, the laws of the Commonwealth of Pennsylvania,
without giving effect to any choice of law or conflict of law rules or
provisions (whether of the Commonwealth of Pennsylvania or any other
jurisdiction) that would cause the application hereto of the laws of any
jurisdiction other than the Commonwealth of Pennsylvania. In furtherance of the
foregoing, the internal law of the Commonwealth of Pennsylvania shall control
the interpretation and construction of this Agreement, even though under any
other jurisdiction's choice of law or conflict of law analysis the substantive
law of some other jurisdiction may ordinarily apply.
20. SEVERABILITY. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall otherwise remain in full
force and effect.
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21. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
22. SUCCESSORS AND ASSIGNS. The Parties' obligations hereunder shall be
binding upon their successors and assigns. The Parties' rights and the
rights of the other Releasees shall inure to the benefit of, and be
enforceable by, any of the Parties' and Releasees' respective successors and
assigns.
23. AMENDMENTS AND WAIVERS. No amendment or waiver shall be binding upon any
party hereto unless consented to in writing by such party.
24. HEADINGS. The headings of the Sections and subsections hereof are for
purposes of convenience only, and shall not be deemed to amend,modify,
expand, limit or in any way affect the meaning of any of the provisions
hereof.
25. WAIVER OF JURY TRIAL. Each of the Parties hereby waives its rights to a jury
trial of any claim or cause of action based upon or arising out of this
Agreement or any dealings between the Parties relating to the subject matter
hereof. Each of the Parties also waives any bond or surety or security upon such
bond which might, but for this waiver, be required of the other party. The scope
of this waiver is intended to be all-encompassing of any and all disputes that
may be filed in any court and that relate to the subject matter of this
Agreement, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. EACH OF THE
PARTIES ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO
THIS AGREEMENT, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO
THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED
FUTURE DEALINGS. Each of the Parties further represents and warrants that he or
it knowingly and voluntarily waives his or its jury trial rights. This waiver
may not be modified orally, but only in writing, and the waiver shall apply to
any subsequent amendments, renewals, supplements or modifications to this
agreement. In the event of litigation, this Agreement may be filed as a written
consent to a trial by the court.
* * * * *
IN WITNESS WHEREOF, the Parties have executed this
Confidential Separation Agreement and General Release effective as of the date
of the first signature affixed below or as otherwise provided in this Agreement.
READ CAREFULLY BEFORE SIGNING
I have read this Confidential Separation Agreement and General Release. I
understand that by executing this Confidential Separation Agreement and General
Release I will relinquish any right or demand, other than those created by or
otherwise set forth in this Agreement, I may have against the Releasees or any
of them.
DATED: DECEMBER 11, 2000 By: /S/ XXXXXXX X. XXXXXXXX
------------------ -----------------------
Xxxxxxx X. Xxxxxxxx
XXXXXXX FOODS CORPORATION
DATED: DECEMBER 11, 2000 By: /S/ XXXXXXX X. XXXXX
----------------- --------------------
Xxxxxxx X. Xxxxx
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HERSHEY FOODS CORPORATION
LONG-TERM INCENTIVE PROGRAM PARTICIPATION AGREEMENT
The undersigned is an executive employee of Hershey Foods
Corporation or one of its subsidiaries (hereinafter collectively referred to
as "Hershey"). I understand that I have been selected to participate in the
Key Employee Incentive Plan (the "Plan"), including the Long-Term Incentive
Program ("LTIP") under the Plan. I understand, acknowledge and agree that
the purpose of this Agreement is to provide for enhanced confidentiality
requirements, an agreement not to compete with Hershey once I become
eligible for supplemental retirement benefits, and an arbitration program to
be the sole and exclusive method for resolving disputes. I understand and
acknowledge that by this Agreement, both I and Hershey, in order to avoid
delay and expense, are mutually waiving the right of access to a judicial
forum for resolving disputes covered by the arbitration program. I hereby
accept the opportunity to participate in the Plan, including the LTIP, and
in consideration of my selection by Hershey to be a participant in the Plan
and being eligible to receive benefits under the Plan, I agree to the
following:
1. PARTICIPATION.
I understand and agree that participating in the LTIP at any
time is no guarantee I will be selected to participate in the LTIP or any
other aspect of the Plan in any future years. I understand and agree that
participation in the Plan and the LTIP is voluntary; specifically, I
understand that I am under no obligation to participate in the LTIP or any
other aspect of the Plan, and that I may retain my job if I decline to so
participate. I understand and agree that if I elect to participate in the
Plan and the LTIP, then, depending on my job performance, the financial
performance of Hershey and the achievement of certain goals and objectives,
I will be eligible to receive Annual Incentive Program Awards, Performance
Stock Unit Awards and Stock Options, in accordance with the terms of the
Plan, as it may be amended from time to time.
2. CONFIDENTIALITY.
I acknowledge that due to the nature of my employment and the
position of trust that I hold with Hershey, I will have special access to,
learn, be provided with, and in some cases will prepare and create for
Hershey, trade secrets and other confidential and proprietary information
relating to Hershey's business, including, but not limited to, information
about Hershey's manufacturing processes; manuals, recipes and ingredient
percentages; engineering drawings; product and process research and
development; new product information; cost information; supplier data;
strategic business information;
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marketing, financial and business development information, plans,
forecasts, reports and budgets; customer information; new product
strategies, plans and project activities; and acquisition and divestiture
strategies, plans and project activities. I acknowledge and agree that such
information, whether or not in written form,is the exclusive property of
Hershey, that it has been and will continue to be of critical importance
to the business of Hershey, and that the disclosure of it to, or use by,
competitors or others will cause Hershey substantial and irreparable harm.
Accordingly, I will not, either during my employment or at any time after
the termination (whether voluntary or involuntary) of my employment with
Hershey, use, reproduce or disclose any trade secrets or other confidential
information relating to the business of Hershey which is not generally
available to the public, except as may be specially authorized and
necessary in discharging my assigned duties as an employee of Hershey. I
understand and agree that my obligations under this Agreement shall be in
addition to, rather than in lieu of, any obligations I may already have
under any Confidentiality Agreement or other agreement with Hershey
relating to confidential information or under any applicable statute or at
common law.
3. UNFAIR COMPETITION.
I understand and acknowledge that Hershey is engaged in the
business of developing, producing, marketing, selling and distributing
confectionery products, chocolate-related grocery products and pasta
products. I acknowledge that the scope of Hershey's business and operations
is world-wide. I acknowledge that due to the nature of my employment with
Hershey, I have special access to, contact with, and information about,
Hershey's business activities as described above and to its customers,
suppliers, agents, licensees and licensors. I acknowledge that Hershey has
incurred considerable expense and invested considerable time and resources
in developing relationships with customers, suppliers, agents, licensees and
licensors, and that those relationships are critical to the success of
Hershey's business.
Accordingly, both (a) during the term of my employment with
Hershey, and (b) for a period of three (3) years following the termination
of my employment for any reason, provided at the time of such termination I
am eligible to receive benefits under Hershey's Supplemental Executive
Retirement Plan, I shall not, without the prior written consent of Hershey,
directly or indirectly serve or act as an officer, director, employee,
consultant, adviser, agent or representative for the domestic or worldwide
confectionery, chocolate-related grocery or pasta businesses of any entity
or individual that is in competition with Hershey's confectionery,
chocolate-related grocery or pasta businesses.
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4. SURVIVAL OF OBLIGATIONS.
Both I and Hershey understand and agree that our respective
rights and obligations under, and the terms and conditions of, this Agreement
(and the Mutual Agreement to Arbitrate Claims appended hereto) shall apply and
continue during, and survive the termination (for any reason) of, my employment
with Hershey.
5. ARBITRATION AND MEDIATION.
Both I and Hershey promise to arbitrate any claim covered by
the Mutual Agreement to Arbitrate Claims which is attached hereto and
incorporated in full herein by reference.
Both I and Hershey further agree, before seeking arbitration
of any claim, to engage in good faith efforts to resolve the dispute through
nonbinding mediation. Mediation shall be conducted by, and in accordance with
procedures for the mediation of employment disputes of, one of the American
Arbitration Association, the Judicial Arbitration + Mediation Services, Inc.
(JAMS/Endispute) or the Center for Public Resources (CPR) as Hershey and I may
agree (and if such agreement is not possible, then the mediation procedures of
CPR shall apply), together with any other procedures as may be agreed upon by me
and Hershey.
6. SAVINGS CLAUSE AND SEVERABILITY.
a. All provisions of this Agreement (and of the Mutual
Agreement to Arbitrate Claims appended hereto) are severable, and if
any of them is determined to be invalid or unenforceable for any
reason, the remaining provisions and portions shall be unaffected
thereby and shall remain in full force to the fullest extent permitted
by law.
b. Without limiting the foregoing, I specifically agree that
each of the covenants set forth in Paragraph 3 of this Agreement is
severable; that if any of them is held invalid or unenforceable by
reason of length of time, area covered or activity covered, or any
combination thereof, or for any other reason, the court or arbitrator
shall adjust, reduce or otherwise reform any such covenant to the
extent necessary to cure any invalidity and to protect the interests of
Hershey to the fullest extent of the law; that the area, time period
and scope of activity restricted shall be the maximum area, time period
and scope of activity the court or arbitrator deems valid and
enforceable; and that, as reformed, such covenant shall then be
enforced.
c. Without limiting the foregoing, I also specifically agree
that if any part of the Mutual Agreement to Arbitrate Claims is
determined to be invalid or
3
unenforceable for any reason, then the invalid or unenforceable
portion shall be severed and the agreement to submit any claim to
binding arbitration shall be interpreted and enforced as if the
invalid or unenforceable portion did not appear.
7. MISCELLANEOUS.
a. Any notice to Hershey shall be in writing and shall be sent
by certified mail to Hershey Foods Corporation, 000 Xxxxxxx X Xxxxx,
Xxxxxxx, XX 00000-0000, Attention: Vice President, Human Resources. Any
notice to me shall be in writing and shall be sent to me by certified
mail at the latest address listed for me in Hershey's employment
records, unless I specifically notify Hershey in writing that notice
shall be delivered to me at a different address. Notice shall be deemed
delivered when personally delivered or a properly addressed notice is
deposited with the U.S. Postal Service for delivery by certified mail.
b. I understand and agree that neither this Agreement nor the
Mutual Agreement to Arbitrate Claims shall be construed in any way as
an agreement or guarantee of employment for any period of time and that
I remain an employee-at-will for all purposes.
c. The rights and obligations under this Agreement and the
Mutual Agreement to Arbitrate Claims shall inure to the benefit of,
shall be binding upon, and may be enforced by and for the benefit of,
Hershey Foods Corporation, any subsidiary or affiliate of Hershey Foods
Corporation, and their successors and assigns.
d. Any waiver by either Hershey or me of any breach, or the
failure to enforce any of the terms or conditions, of this Agreement or
the Mutual Agreement to Arbitrate Claims, shall not in any way affect,
limit, or waive any rights thereafter to enforce, and compel strict
compliance with, every term and condition of this Agreement and the
Mutual Agreement to Arbitrate Claims.
e. This Agreement and the Mutual Agreement to Arbitrate Claims
constitute the entire agreement between Hershey and me with respect to
the matters addressed herein and therein, there being no
representations, warranties, commitments, or other agreements, except
as set forth herein and therein. This Agreement and the Mutual
Agreement to Arbitrate Claims may be amended only by an instrument in
writing executed by me and an authorized officer of Hershey.
f. The substantive law governing this Agreement shall be the
law of the Commonwealth of Pennsylvania. The law of arbitrability shall
be that set forth in the Federal Arbitration Act. If for any reason the
Federal Arbitration Act is inapplicable, then the law of arbitrability
shall be that of the Commonwealth of Pennsylvania.
4
LONG-TERM INCENTIVE PROGRAM PARTICIPATION AGREEMENT
Mutual Agreement To Arbitrate Claims
I recognize that differences may arise between Hershey Foods
Corporation (the "Company") and me during or following my employment with the
Company, and that those differences may or may not be related to my employment.
I understand and agree that by entering into this Mutual Agreement to Arbitrate
Claims ("Arbitration Agreement"), I anticipate gaining the benefits of a speedy,
impartial dispute-resolution procedure.
I understand that any reference in this Arbitration Agreement
to the Company will be a reference also to all subsidiary and affiliated
entities, all benefit plans, the benefit plans' sponsors, fiduciaries,
administrators, affiliates and agents, and all successors and assigns of any of
them.
A. CLAIMS COVERED BY THE ARBITRATION AGREEMENT.
The Company and I mutually consent to the resolution by
arbitration of all claims or controversies ("claims"), past, present, or future,
whether or not arising out of my employment (or its termination), that the
Company may have against me or that I may have against the Company or against
its officers, directors, employees or agents in their capacity as such. The only
claims that are arbitrable are those that, in the absence of this Arbitration
Agreement, would have been justiciable under applicable state or federal law.
The claims covered by this Arbitration Agreement include, but are not limited
to, claims arising out of, connected with or relating to the Long-Term Incentive
Program Participation Agreement and this Arbitration Agreement; claims for wages
or other compensation due; claims for breach of any contract or covenant
(express or implied); tort claims; claims for discrimination (including, but not
limited to, race, sex, sexual orientation, religion, national origin, age,
marital status, or medical condition, handicap or disability); claims for
benefits (except claims under an employee benefit or pension plan that either
specifies that its claims procedure shall culminate in an arbitration procedure
different from this one or is underwritten by a commercial insurer which decides
claims); and claims for violation of any federal, state, or other governmental
law, statute, regulation, or ordinance, except as otherwise provided in this
Arbitration Agreement.
B. CLAIMS NOT COVERED BY THE ARBITRATION AGREEMENT.
Claims I may have for workers' compensation or unemployment
compensation benefits are not covered by this Agreement.
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Also not covered are claims by the Company for injunctive
and/or other equitable relief, including but not limited to those for unfair
competition and/or the use and/or unauthorized disclosure of trade secrets or
confidential information, as to which I understand and agree that the Company
may seek and obtain relief from a court of competent jurisdiction. In
such an injunctive/equitable proceeding, I understand and agree that the court
is entitled to and will award to the prevailing party costs and actual
attorneys' fees incurred.
C. REQUIRED NOTICE OF ALL CLAIMS.
The Company and I agree that the aggrieved party must give
written notice of any claim to the other party. Written notice to the Company,
or its officers, directors, employees or agents, shall be sent pursuant to the
notice provision of the Agreement to which this Arbitration Agreement is
appended.
The written notice shall identify and describe the nature of
all claims asserted and the facts upon which such claims are based.
D. REPRESENTATION.
Any party may be represented by an attorney or other
representative selected by the party.
E. DISCOVERY.
Each party shall have the right to take the deposition of one
individual and any expert witness designated by another party. Each party also
shall have the right to make requests for production of documents to any party.
The subpoena right specified below shall be applicable to discovery pursuant to
this paragraph. Additional discovery may be had only where the arbitrator
selected pursuant to this Arbitration Agreement so orders, upon a showing of
substantial need.
F. DESIGNATION OF WITNESSES.
At least 30 days before the arbitration, the parties must
exchange lists of witnesses, including any expert, and copies of all exhibits
intended to be used at the arbitration.
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G. SUBPOENAS.
Each party shall have the right to subpoena witnesses and
documents for the arbitration.
H. ARBITRATION PROCEDURES.
The arbitration will be held under the auspices of one of the
American Arbitration Association, Judicial Arbitration + Mediation Services,
Inc. or Center for Public Resources, with the designation of such sponsoring
organization to be made by the party that did not initiate the claim.
The arbitration shall be confidential and closed to the
public. Any evidence proffered in the arbitration shall be held in strict
confidence and not disclosed to any third party.
The Company and I agree that, except as provided in this
Agreement, the arbitration shall be in accordance with the then-current dispute
arbitration procedures of the sponsoring organization for the type of claim
involved. The arbitration shall take place in or near the location in which I am
or was last employed by the Company.
The Arbitrator shall be selected as follows. The sponsoring
organization shall give each party a list of 7 arbitrators. Each party may
strike all names on the list it deems unacceptable. If only one common name
remains on the lists of all parties, that individual shall be designated as the
Arbitrator. If more than one common name remains on the lists of all parties,
the parties shall strike names alternately from the list of common names until
only one remains. The party who did not initiate the claim shall strike first.
If no common name exists on the lists of all parties, the sponsoring
organization shall furnish an additional list and the process shall be repeated.
If no arbitrator has been selected after two lists have been distributed, then
the parties shall strike alternately from a third list, with the party
initiating the claim striking first, until only one name remains. That person
shall be designated as the Arbitrator.
The Arbitrator shall apply the substantive law (and the law of
remedies, if applicable) of the Commonwealth of Pennsylvania or federal law, or
both, as applicable to the claim(s) asserted. The Arbitrator is without
jurisdiction to apply any different substantive law, or law of remedies. The
Federal Rules of Evidence shall apply. The Arbitrator, and not any federal,
state, or local court or agency, shall have exclusive authority to resolve any
dispute relating to the interpretation, applicability, enforceability or
formation of this Arbitration Agreement, including but not limited to any claim
that all or any part of this Arbitration Agreement is void or voidable. The
arbitration shall be final and binding upon the parties, except as provided in
this Arbitration Agreement.
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The Arbitrator shall have jurisdiction to hear and rule on
pre-hearing disputes and is authorized to hold pre-hearing conferences by
telephone or in person, as the Arbitrator deems necessary. The Arbitrator shall
have the authority to entertain a motion to dismiss and/or a motion for summary
judgment by any party and shall apply the standards governing such motions under
the Federal Rules of Civil Procedure.
Either party, at its expense, may arrange for and pay the cost
of a court reporter to provide a stenographic record of proceedings.
Either party, upon request at the close of hearing, shall be
given leave to file a post-hearing brief. The time for filing such a brief shall
be set by the Arbitrator.
The Arbitrator shall render a proposed award and opinion in
the form typically rendered in labor arbitrations.
Either party shall have the right, within 20 days of issuance
of the Arbitrator's proposed award and opinion, to file with the Arbitrator a
motion to reconsider (accompanied by a supporting brief), and the other party
shall have 20 days from the date of the motion to respond. The Arbitrator
thereupon shall reconsider the issues raised by the motion and, promptly, either
confirm or change the decision, which (except as provided by this Arbitration
Agreement) shall then be final and conclusive upon the parties. The costs of
such a motion for reconsideration and written opinion of the Arbitrator shall be
borne by the party prevailing on the motion, unless the Arbitrator orders
otherwise.
I. ARBITRATION FEES AND COSTS.
The Company and I shall equally share the fees and costs of
the Arbitrator; provided, however, that my maximum contribution will be no more
than 20% of the amount at issue. Each party will deposit funds or post other
appropriate security for its share of the Arbitrator's fee, in an amount and
manner determined by the Arbitrator, 10 days before the first day of hearing.
Each party shall pay for its own costs and attorneys' fees, if any. However, if
any party prevails on a statutory claim which affords the prevailing party
attorneys' fees, or if there is a written agreement providing for fees, the
Arbitrator may award fees to the prevailing party as provided by statute or
agreement.
J. EXCLUSIVITY, WAIVER AND BINDING EFFECT.
The procedure set out in this Arbitration Agreement is the
exclusive procedure for resolving claims covered hereunder. The resolution of
any claim covered by this Arbitration Agreement pursuant to the procedure set
out herein shall be final and binding on the parties to the fullest extent
permitted by law. Both I and the Company expressly waive
8
any right to resolve any claim covered by this Arbitration Agreement through any
other means, including by filing a lawsuit in court for trial by the court or
before a jury. Both I and the Company are precluded from bringing or raising in
court or before another forum any claim which could have been brought or raised
hereunder, unless the right to pursue a statutory claim or remedy is expressly
preserved by law. Neither I nor the Company shall seek to enjoin any proceeding
hereunder on the basis that any award resulting therefrom would not be
enforceable.
K. INTERSTATE COMMERCE.
I understand and agree that the Company is engaged in
transactions involving interstate commerce.
L. CONSIDERATION.
The promises by the Company and by me to arbitrate
differences, rather than litigate them before courts or other bodies, provide
consideration for each other. In addition, my participation in this Long-Term
Incentive Program provides further consideration for this Arbitration Agreement.
9
IN WITNESS WHEREOF, by signing my name below, I am
acknowledging that I am entering into this Long-Term Incentive Program
Participation Agreement and Mutual Agreement to Arbitrate Claims voluntarily and
with a full understanding of all of their terms and conditions, and, intending
to be legally bound, I am agreeing to such terms and conditions.
Long-Term Incentive Program Participant
/S/ X. X. XXXXXXXX
-------------------
(Signature)
/S/ X. X. XXXXXXXX
------------------
Name (Print)
Date: JANUARY 27, 1997
----------------
IN WITNESS WHEREOF, Hershey Foods Corporation and/or its
employing subsidiary, intending to be legally bound, has or have caused this
Agreement to be signed by its or their authorized officer.
X. X. XXXXX
-----------
Vice President
Date: JANUARY 17, 1997
----------------
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