Exhibit 10.3
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
This Confidential Separation Agreement and General Release
(the "Agreement") is made as of the 6th day of December, 2002 (the "Effective
Date"), by and between Hershey Foods Corporation, a Delaware corporation (the
"Company"), and ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("Employee"), and together with the Company,
(the "Parties").
WHEREAS, effective December 6, 2002, and continuing through
and including December 31, 2002, Employee will be retained as an employee of the
Company on paid leave of absence; and
WHEREAS, effective January 1, 2003, Employee will be retained
as an employee of the Company on unpaid leave of absence until the Separation
Date, as hereinafter defined, whereupon Employee's employment with the Company
shall terminate (the "Separation"); and
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)
Employee's date of death; (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; and (iii) December 31, 2004.
2. RESIGNATION FROM COMPANY OFFICES. Effective on the Effective Date, Employee
hereby voluntarily resigns from all of his positions and offices with the
Company and its subsidiaries, including, without limitation, Senior Vice
President and Chief Marketing Officer and 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, contract, or benefit plan
maintained by the Company.
4. LEAVE OF ABSENCE.
4.1 Employee shall be placed on a paid leave of absence commencing
on the Effective Date and continuing until December 31, 2002.
This period shall be known as the "Paid Leave of Absence
Period". During the Paid Leave of Absence Period, Employee's
employment with the Company, including Employee's right to
receive compensation and benefits, shall continue on the same
basis and under the same terms as existed immediately prior to
the Effective Date, except that Employee shall (i) have no
assigned duties and shall perform no services for the Company,
and (ii) shall be ineligible for coverage under the Company's
short-term and long-term disability programs.
4.2 Employee shall be placed on an unpaid leave of absence
commencing January 1, 2003 and continuing until the Separation
Date. This period shall be known as the "Unpaid Leave of
Absence Period." The following conditions shall apply during
the Unpaid Leave of Absence Period:
4.2.1 On January 10, 2003, the Company shall pay to
Employee in a lump-sum an amount equal to two-times
the sum of Employee's 2002 base salary and 2002
contingent target grant (scored on the basis of 100%
achievement of the Company's objectives and
Employee's personal objectives for 2002 and
calculated on the basis of Employee's 2002 base
salary and target percentage) under the Annual
Incentive Program ("AIP") of the Company's Key
Employee Incentive Plan ("▇▇▇▇"). This payment shall
be subject to customary withholding.
4.2.2 Except as provided for below and in Section 4.3,
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:
(a) the Company's medical (including dental and vision)
benefits programs, excluding however the retiree medical
program;
(b) the Company's life insurance program at three-times his base
salary;
(c) the Hershey Foods Corporation Deferred Compensation Plan
("DCP");
(d) the Hershey Foods Corporation Retirement Plan ("HRA"); and
(e) the Hershey Foods Corporation Employee Savings Stock
Investment and Ownership Plan ("ESSIOP").
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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 4.2, and any vested rights under the DCP, the HRA and the
ESSIOP, shall be determined by the terms and conditions of these plans
respectively.
4.3 Notwithstanding the foregoing, the parties agree:
4.3.1 Employee shall not be eligible to accrue, earn or
participate in salary adjustments after the Effective
Date;
4.3.2 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 4.2 (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,
its Severance Benefits Plan and its Supplemental
Executive Retirement Plan);
4.3.3 Upon the Effective Date, all Employee's coverage
under the Company's short-term and long-term
disability plans shall cease;
4.3.4 Employee shall not be permitted to contribute to a
medical reimbursement account or dependent care
assistance account under the Company's flex benefits
plan for any period after December 31, 2002; and
4.3.5 Employee shall not be eligible to make contributions
to, and the Company shall make no matching
contribution to, the Employee's ESSIOP account from
and after the commencement of the Unpaid Leave of
Absence Period.
4.4 Employee shall not participate in any part of the Long -Term
Incentive Program ("LTIP") of the ▇▇▇▇ during 2003 or any
subsequent year and any outstanding contingent target grants
of Performance Stock Units granted to Employee prior to
December 31, 2002 are hereby cancelled.
4.5 Except as provided in the immediately following sentence,
presentation of a draft of this Agreement to Employee on
December 11, 2002 for his consideration constitutes notice of
termination of employment for purposes of Section 8(a) of the
▇▇▇▇. If Employee executes this Agreement on or before
December 20, 2002, presentation on December 11, 2002 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 ▇▇▇▇. Whether Employee has
received a notice of termination of employment for purposes of
Section 8(a) the ▇▇▇▇ 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 ▇▇▇▇ unless and until this Agreement
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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 ▇▇▇▇ during any
years prior to 2003 and may exercise any such Options in
accordance with the provisions of ▇▇▇▇ (and the terms and
conditions applicable to any such Options established at the
time such Options were granted or subsequently) at any time
prior to his Separation Date.
4.6 Provided that a notice of termination under the ▇▇▇▇ is not in
effect pursuant to Section 4.5 above, Employee's rights with
respect to restricted stock units ("RSUs") granted to Employee
prior to 2003 shall continue to vest in accordance with the
▇▇▇▇ and the terms and conditions applicable to such grants.
Any RSUs that have not vested on or before the Separation Date
shall terminate.
4.7 Employee shall be eligible to receive an award, if any, of his
contingent target grant for 2002 under the AIP of ▇▇▇▇ subject
to the terms and conditions of the ▇▇▇▇ and the contingent
target grant. Employee shall not be entitled to participate in
or receive any benefits under the AIP of ▇▇▇▇ for 2003 or any
subsequent year. Payment of award, if any, will be made on or
before March 15, 2003.
4.8 During the Leave of Absence Period, Employee shall have no
assigned duties and shall perform no services for the Company.
4.9 Except as provided for in Section 6 below, employee shall be
free to seek and accept other employment after the Effective Date.
4.10 In the event Employee commences other employment during the
Leave of Absence Period, Employee shall immediately notify the
Company in writing at ▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇, Attn:
Vice President, Total Compensation, of his new employment and
his benefit coverage shall terminate as of the effective date
of the new employment.
4.11 Employee shall not be subject to the minimum stockholding
requirements for Company executives or ▇▇▇▇ participants.
4.12 The Company will provide for the continuation of comparable
financial advisory services by Regent Atlantic Capital through
December 31, 2002, tax preparation services for the tax year
ending December 31, 2002 and outplacement services pursuant to
a Company-approved executive outplacement program through
Drake Beam ▇▇▇▇▇, Inc. for twelve (12) months beginning
January 1, 2003.
5. SEPARATION AND COBRA RIGHTS. Effective as of the earlier of the Separation
Date or benefit coverage cessation, 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
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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 August 21, 2001
("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;
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
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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 ▇▇▇ 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 the
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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 ▇▇▇▇; and shall subject him to liability for any damages
arising from such remarks. The Company hereby represents that, as of the date of
its execution of this Agreement as set forth on the signature page hereof,
neither ▇▇▇▇▇▇▇ ▇. Lenny, Chairman, President and Chief Executive Officer, nor
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, General Counsel, Secretary and Senior Vice President,
International, had actual knowledge of any violation by Employee of this Section
9.
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 or required 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.
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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 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,
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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.
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 heirs, personal representatives, 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 heirs, personal
representatives, 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 to the extent the resolution of such matter is not governed by the
Participation and Arbitration Agreement. 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
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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: 12/20/02 /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------- --------------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ FOODS CORPORATION
DATED: 12/20/02 By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------- ---------------------------------------
General Counsel, Secretary
and Senior Vice President,
International
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;
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
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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 and chocolate-related grocery 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 or
chocolate-related grocery businesses of any entity or individual that is in
competition with Hershey's confectionery or chocolate-related grocery
businesses.
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
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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 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, ▇▇▇ ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇, 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
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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.
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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.
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
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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.
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.
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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.
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
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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 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.
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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/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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(Signature)
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------------
Name (Print)
Date: August 21, 2001
----------------------------------------
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.
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, General Counsel
and Secretary
Date: July 24, 2001
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