Exhibit 10(f)(2)
Employment Agreement
This Employment Agreement ("Agreement") is made and entered into by
and between Xxxxxx X. Xxxxxxxx ("Xxxxxxxx") and The Quaker Oats Company
("Quaker"), collectively "the parties." As soon as it is signed by both
parties, it shall become effective retroactive to October 22, 1997 (the "
Effective Date" ).
l. Position: During the term of this Agreement, Xxxxxxxx shall be employed
by Quaker as its Chairman, President and Chief Executive Officer; shall
be elected a director of the Company; and shall be elected Chairman of
Ouaker's Board of Directors (the "Board").
2. Term:
(a) Quaker's Commitment to Xxxxxxxx: The initial term shall commence on
the Effective Date and continue until December 31, 2000. Beginning
on January 1, 1999, the Agreement shall automatically renew every day
for a two year period, so that while this feature is in effect the
remaining term shall always be exactly two years (e.g., on July 1,
1999, the term would run from July l, 1999 through June 30, 2001);
provided, no renewals shall occur after any of the following: (i) at
any time, Quaker provides written notice to Xxxxxxxx of its decision
to cancel the automatic renewal feature; (ii) at any time, Quaker
terminates Morrison's active employment; or (iii) at any time,
Xxxxxxxx terminates his active employment.
(b) Morrison's Commitment to Quaker: Xxxxxxxx commits to work exclusively
for Quaker during the initial term (i.e., from the Effective Date
through December 31, 2000). In addition, if he (i) voluntarily
terminates his employment Without Good Reason before December 31,
2000, and (ii) without the written consent of the Board is employed
by any other company (other than one which is wholly owned by
Xxxxxxxx and/or members of his immediate family and which has annual
gross sales revenue of less than $1,000,000.00) during the one-year
period following his last day of active service for Quaker, then he
must promptly repay and/or return to Quaker all of the make-whole
compensation provided to him under section 8 (which includes cash
payments, restricted stock units, and stock options, whether vested
or unvested, exercised or unexercised). The intent of this repayment
provision is to avoid a situation where Quaker loses the substantial
make-whole compensation without receiving the benefit of Morrison's
services for more than a short time, without imposing a hardship on
Xxxxxxxx in the event that, due to a personal tragedy or similar
circumstances, he ceases to work for any company for an extended
period of time (other than one of the size and type described above).
3. Annual Salary: From the Effective Date through December 31, 1998,
Morrison's annual salary shall be nine hundred and fifty thousand dollars
($950,000.00), paid in accordance with Quaker's standard payroll
practices. After December 31, 1998, it may be increased in the
discretion of the Board, but cannot be reduced.
4. Bonuses:
(a) Commencing with the bonus period that ends on December 31, 1998,
Xxxxxxxx shall be eligible to receive an annual performance bonus
based on the terms and provisions of Quaker's Management Incentive
Bonus Plan (the "MIB Plan"). His target bonus shall be equal to
100% of his salary, and the maximum bonus shall be 200% of his
salary.
(b) For the bonus period that ends on December 31, 1998, if the
applicable MIB Plan formula produces a bonus of less than one
million dollars ($1,000,000.00), then Xxxxxxxx shall receive a bonus
of $1,000,000.00; provided, this adjustment will not apply if
Xxxxxxxx terminates his employment Without Good Reason or is
terminated for Cause on or before December 31, 1998.
(c) The Board shall have discretion to award additional bonuses to
Xxxxxxxx, as it may deem appropriate.
5. Group/Executive Benefits: Except as otherwise specifically provided
herein, Xxxxxxxx and his family shall participate, on terms no less favorable
than were provided to the immediately preceding Chief Executive Officer of
Quaker, in any group and/or executive life, hospitalization or disability
insurance plan, health program, pension, profit sharing, ESOP, 401(k) and
similar benefit plans (qualified, non-qualified and supplemental) that Quaker
sponsors for its officers or employees, and in other fringe benefits including
any automobile allowance or arrangement, club memberships and dues, and similar
programs (collectively referred to as the "Benefits"). All waiting periods
for such plans shall be waived, except with respect to the pension plan where
waiver of the one year waiting period is not permitted. It is understood that
participating on the "same terms" as the immediately preceding Chief Executive
Officer means the same rules and/or policies apply, recognizing that the result
upon applying them can be affected by differing credited years of service.
6. Supplemental Retirement Benefits:
(a) Subject to the proration provisions described in subsection (d)
below, upon termination of his employment with Quaker, Xxxxxxxx will
receive a supplemental retirement benefit pursuant to this Agreement
which, in combination with any and all retirement benefits to which
Xxxxxxxx is entitled or received under any qualified or non-qualified
defined benefit plans of Quaker and of any of Morrison's former
employers, will produce for him, upon commencement of benefits at or
after age 60, aggregate retirement benefits such that the annualized
amount, on a straight life annuity basis, is equal to the greater of:
(i) fifty percent (50%) of his average cash compensation (annualized
base salary plus annual performance bonus) for his five consecutive
calendar years of employment with Quaker that produce the highest
average cash compensation; or (ii) nine hundred and fifty thousand
dollars ($950,000.00). In determining the setoff for other
retirement benefits the value of those benefits will be calculated as
if Xxxxxxxx had elected to receive each benefit on a straight life
annuity basis, regardless of the form of payment he actually elected
(including any lump sum payment).
(b) Xxxxxxxx may elect to take the supplemental benefit described in
subsection 6(a) in any form permitted under either The Quaker
Supplemental Executive Retirement Program (the "SERP") or The
Quaker Retirement Plan, subject to the applicable actuarial
adjustment prescribed by the plan in question for electing such an
alternative form of payment instead of a straight life annuity.
(c) If Xxxxxxxx commences receipt of the supplemental retirement
benefit described in subsection 6(a) before reaching age 60, then
that benefit shall be subject to actuarial reduction, calculated in
accordance with the terms of the SERP.
(d) If, before the fifth anniversary of the Effective Date,
Morrison's employment is terminated by Quaker for Cause or is
terminated by Morrison Without Good Reason, then the supplemental
retirement benefit described in subsection 6(a) shall be prorated
based on the number of months Xxxxxxxx was actively employed with
Quaker, as follows: (i) multiply the formula figure determined under
subsection 6(a) (without subtracting any setoff for other retirement
benefits) by a fraction, the numerator of which is the number of
months Xxxxxxxx was actively employed by Quaker, and the denominator
of which is sixty (60); and then (ii) subtract the setoff for other
retirement benefits, as described in section 6(a). Provided, if
Xxxxxxxx does not accept a position with any other company (other
than one which is wholly owned by Xxxxxxxx and/or members of his
immediate family and which has annual gross sales revenue of less
than $1,000,000.00) during the one-year period following his last day
of active service with Quaker, then the proration formula shall be
more favorable to Xxxxxxxx, as follows: (i) calculate the net
supplemental retirement benefit under subsection 6(a), including
subtracting the setoff for other retirement benefits; and then (ii)
multiply that amount by a fraction, the numerator of which is the
number of months Xxxxxxxx was actively employed by Quaker, and the
denominator of which is sixty (60).
(e) If Xxxxxxxx dies before the supplemental retirement benefit
described in subsection 6(a) becomes payable, his wife will receive a
survivor annuity for the rest of her life equal in amount to the
straight life annuity which would have been payable to Xxxxxxxx under
subsection 6(a) if, on the date immediately before his death, he had
terminated his employment For Good Reason, taking into account all
setoffs that would have applied to his benefit, except that if his
spouse only receives a reduced survivor annuity under The Quaker
Retirement Plan, then that amount, rather than the full straight life
annuity which would have been payable to Xxxxxxxx, shall be setoff
with respect to The Quaker Retirement Plan.
7. Equity Based Incentive Compensation:
(a) On the Effective Date, and pursuant to the terms of The Quaker Long
Term Incentive Plan of 1990 (the "LTIP"), Quaker shall xxxxx Xxxxxxxx
a 10-year option with respect to 550,000 shares of Quaker common
stock. One-fifth (1/5) of these options shall vest each year for
five years, on the first five anniversaries of the Effective Date
(e.g., the first 110,000 options will vest on October 22, 1998, and
the last 110,000 options will vest on October 22, 2002). In
accordance with the terms of the LTIP, the exercise price for these
shares will be equal to the fair market value an the Effective Date.
(b) In each of 1998, 1999, and 2000, Quaker shall xxxxx Xxxxxxxx a
10-year option with respect to 300,000 shares of Quaker common stock,
at the time and consistent with the terms and vesting rules generally
applicable to awards to other senior executives under the LTIP. In
any subsequent years, annual option awards to Xxxxxxxx shall be
consistent with Quaker's then-current practices and with awards made
to other senior executives of Quaker.
(c) If there is a generally applicable award of options or
restricted shares to senior executives of Quaker other than the
annual award of options under the LTIP, Xxxxxxxx shall participate in
such award(s) on terms consistent with Quaker's then-current
practices and with awards made to other senior executives.
(d) In the event of a Change in Control of Quaker, as that term (or
any similar term) is defined in the LTIP, all of Morrison's awards of
stock options, restricted shares or similar equity-based interests
which have not already vested shall immediately vest in full.
8. Special Make-Whole Compensation:
(a) On the Effective Date, Quaker shall pay Xxxxxxxx the following cash
amounts, which constitute a sign-on bonus, are not contingent on the
performance of services for Quaker and do not represent compensation
for services rendered:
(i) Seven hundred thousand dollars ($700,000.00), which is
intended to replace the 1997 bonus Xxxxxxxx would have received
from his previous employer had he remained employed there; and
(ii) Two million, five hundred thousand dollars ($2,500,000.00),
which is intended to replace the 1995-97 long-term incentive
compensation payment Xxxxxxxx would have received from his
previous employer had he remained employed there.
(b) On the Effective Date, Quaker shall xxxxx Xxxxxxxx restricted stock
units pursuant to a deferred compensation program under the LTIP,
which are intended to compensate him for the market value on or
about the Effective Date of the restricted stock of Morrison's
previous employer which he will forfeit by terminating his previous
employment. Quaker will grant him stock units under the LTIP
equivalent to one hundred and fourteen thousand (114,000) shares of
Quaker common stock. These units shall vest over a period of three
years, with one-third (1/3) vesting on each of the first three
anniversaries of the Effective Date. They will be paid out by the
earlier of: (i) April 1 of the year that next follows the end of the
calendar year during which Xxxxxxxx ceases to be employed by Quaker;
or (ii) thirteen (13) months following the earliest date when the
entire payment would be tax deductible under all pertinent federal
tax laws, including Section 162(m) of the Internal Revenue Code, as
determined by the reasonable belief of the Board's Compensation
Committee.
(c) On the Effective Date, Quaker shall xxxxx Xxxxxxxx restricted
stock units pursuant to a deferred compensation program under the
LTIP, which are intended to compensate him for the unvested intrinsic
value on or about the Effective Date of his unvested options on
shares of his previous employer, which will not vest due to
termination of his previous employment. Quaker will grant him stock
units under the LTIP equivalent to five thousand (5,000) shares of
Quaker common stock. These units shall fully vest on the first
anniversary of the Effective Date. They will be paid out by the
earlier of: (i) April 1 of the year that next follows the end of the
calendar year during which Xxxxxxxx ceases to be employed by Quaker;
or (ii) thirteen (13) months following the earliest date when the
entire payment would be tax deductible under all pertinent federal
tax laws, including Section 162(m) of the Internal Revenue Code, as
determined by the reasonable belief of the Board's Compensation
Committee.
(d) On the Effective Date, Quaker shall xxxxx Xxxxxxxx a 10-year
stock option intended to compensate him for the estimated value, on
or about the Effective Date, of the future option privilege of his
vested options on shares of his previous employer, which he likely
will not be able to retain for their normal full duration. This
grant will be for four hundred and fifty thousand (450,000) options,
will be fully vested as of the Effective Date, and will have an
exercise price equal to the fair market value of the shares on the
Effective Date.
(e) Because the payments and shares described in subsections 8(a) - 8(d)
above are intended to make Xxxxxxxx whole for losses he is
expected to incur by reason of leaving his present job, Xxxxxxxx
agrees that if any or all of the expected forfeitures do not occur,
he will promptly repay and/or return to Quaker the applicable
consideration for the item(s) or portion of an item in question that
he did not lose.
9. Events Triggering Severance Benefits: Upon the termination of Morrison's
employment for any of the reasons described in subsections (a) - (c) below, he
will be entitled to receive the severance benefits described in section 10:
(a) Quaker terminates Morrison's employment without Cause.
(b) Xxxxxxxx terminates his employment with Quaker "For Good
Reason," which means he terminates it within six months of any event
that constitutes Good Reason, as defined in subsection (d) below (the
phrase "Without Good Reason" means any termination by Xxxxxxxx other
than within six months of an event constituting Good Reason).
(c) Xxxxxxxx resigns during the thirteenth (13th) month following a
Change in Control of Quaker, as that term (or any similar term) is
defined under his Executive Separation Agreement ("ESA").
(d) Definitions:
(i) "Cause" will exist if it is established by clear and convincing
evidence that Xxxxxxxx engaged in gross misconduct by committing
a significant violation of Quaker's Code Of Ethics, provided
that, if appropriate under the circumstances (taking into
account the nature of the offense), Quaker has called the
alleged misconduct to Xxxxxxxx' s attention and allowed a
reasonable opportunity to cure it. A determination of Cause or
gross misconduct must be made by a two-thirds vote of the full
Board (excluding Xxxxxxxx), and must be communicated in writing
to Xxxxxxxx by a Notice of Termination, which shall include a
certification or a copy of the resolution duly adopted by the
Board by the required two-third vote.
(ii) "Good Reason" for Xxxxxxxx to resign shall exist if any of
the following events occur without his consent: (A) Quaker
intentionally fails to pay or provide required compensation,
after the omission has been called to Quaker's attention and it
has been given a reasonable opportunity to cure the situation;
or (B) Quaker significantly reduces Morrison's titles, position,
duties and/or authority; or (C) Quaker notifies Xxxxxxxx that it
has decided to terminate the automatic daily renewal feature
described in section 2; or (D) Quaker materially breaches the
terms of this Agreement, provided Xxxxxxxx has called the breach
to Quaker's attention and allowed a reasonable opportunity to
cure it.
(iii) "Notice of Termination" shall mean a written notice which
(A) indicates the type of termination under this Agreement
(e.g., for Cause) and cites the applicable provision of this
Agreement, (B) briefly describes the facts and circumstances
claimed to provide a basis for the stated type of termination,
if applicable, and (C) specifies the date of termination from
active service.
(e) Termination because of Morrison's death or disability to work will
not require payment of the severance benefits described in section
10, nor will termination for Cause or termination by Xxxxxxxx Without
Good Reason.
(i) For purposes of this Agreement, Xxxxxxxx will be deemed to be
disabled from performing his duties upon the earlier of: (A) the
end of a six consecutive month period during which, for any
reason, he has been unable to substantially perform each of his
usual and customary duties as Chairman, President and Chief
Executive Officer; or (B) the date when it becomes apparent
that, for any reason, he will be unable to substantially perform
each of his usual and customary duties as Chairman, President
and Chief Executive Officer for a period of at least six
consecutive months, provided, in the case of a physical or
mental injury or disease, his disability must be determined in
writing by a reputable physician or psychologist, selected
jointly by the Board and Xxxxxxxx (or his personal
representative). If any question arises as to whether Xxxxxxxx
is physically or mentally disabled, upon written request by the
Board, Xxxxxxxx shall promptly submit to a reasonable medical or
psychological examination for the purpose of determining the
existence, nature and extent of such disability. Quaker shall
promptly give Xxxxxxxx written notice of any determination that
Xxxxxxxx is disabled from working and of any decision by the
Board to terminate his employment by reason thereof. In the
event of disability, until the date of termination from active
service, the base salary payable to Xxxxxxxx under section 3
hereof shall be reduced dollar-for-dollar by the amount of
disability benefits paid to Xxxxxxxx in accordance with any
disability plan, policy or program of Quaker.
(f) Within thirty (30) days following Morrison's termination from
active service, regardless of the reason for termination, Quaker
shall pay him an amount equal to five (5) days of pay at his then
current salary rate.
10. Severance Benefits: If Xxxxxxxx qualifies for severance benefits under
section 9, then the following terms and conditions shall apply:
(a) Quaker shall pay Xxxxxxxx all Accrued Obligations in a lump sum
in cash within thirty (30) days following his last day of active
service; provided, however, that any portion of the Accrued
Obligations which consists of bonus, deferred compensation, or
incentive compensation shall be determined and paid in accordance
with the terms of the relevant plan or provision. "Accrued
Obligations" shall mean, as of Morrison's last day of active service,
the sum of: (i) his base salary under section 3 through the date of
termination from active service, to the extent not already paid; (ii)
the amount of any bonus, incentive compensation, deferred
compensation and other cash compensation accrued by Xxxxxxxx as of
his last day of active service, to the extent not already paid; and
(iii) any vacation pay, expense reimbursements and other cash
entitlements accrued by Xxxxxxxx as of his last day of active
service, to the extent not already paid. For purposes of this
section, amounts shall be deemed to accrue ratably over the period
during which they are earned, but no discretionary compensation shall
be deemed earned or accrued until it is specifically approved by the
Board in accordance with the applicable plan, program or policy.
(b) Within thirty (30) days after Morrison's last day of active service,
Quaker shall pay him a lump sum equal to the amount that results when
the fraction described in subsection (i) below is multiplied times
the sum described in subsection (ii) below (i.e., full payment of the
salary and bonus that would have been due during the remainder of the
term of this Agreement):
(i) A fraction, the numerator of which is the number of days
remaining from Morrison's last day of paid active service until
the last day of the term of this Agreement, and the denominator
of which is 365;
(ii) The sum of his: (A) final annual salary and (B) then-current
annual performance bonus target or, if greater, his most recent
annual bonus payment.
However, the payment to Xxxxxxxx under this paragraph (b) shall be
conditioned upon his compliance with Quaker policy (as in effect on
the Effective Date or on his last day of active service, whichever is
more favorable to Xxxxxxxx) regarding all salaried employees
executing a waiver and release prior to receiving severance
compensation.
(c) Within thirty (30) days after Morrison's last day of active service,
Quaker shall pay him a lump sum that represents a pro-rated annual
bonus for the year of termination. This amount shall be calculated
by taking his target bonus for the year of termination and
multiplying it times a fraction (i) whose numerator is the number of
days elapsed in the current calendar year from January 1 of that year
through his final day of active service, and (ii) whose denominator
is 365 (e.g., if his last day of active service was February 5, then
this fraction would be .10, calculated as follows: 36 days elapsed in
year divided by 365 days).
(d) Following Morrison's last day of active service and continuing
through the last day of the term of this Agreement, Quaker shall
treat him as employed on inactive service and, thus, shall continue
to credit him with service time and shall provide him and his
dependents with all welfare benefits that are provided to
participants in the Quaker Officers Severance Program (the "Program")
during their inactive service period, as determined by the Program
provisions in effect on the Effective Date or his final day of active
service, whichever produces greater benefits. Thereafter, Xxxxxxxx
will be treated as a retired senior officer for purposes of benefits
Quaker provides to such retirees.
(e) All options and restricted stock (including both shares and units)
that were granted before the date of termination but have not yet
vested shall immediately vest upon Morrison's final day of active
service. All such options, and also ones that previously vested but
have not yet been exercised, shall remain exercisable in accordance
with the LTIP's terms for retirees (currently 5 years following
retirement, or until expiration of the underlying option term,
whichever is sooner).
Quaker may at any time discharge Xxxxxxxx from active service without advance
notice, by providing a Notice of Termination; nothing in this Agreement shall
be construed as requiring Quaker to allow him to continue actively performing
the duties of Chairman, President or CEO. Regardless of the reason for such
termination or whether it constitutes a breach by Quaker, Morrison's exclusive
remedy shall be the severance benefits described in subsections 10(a) - 10(e);
he shall not be entitled to reinstatement, nor to any other damages for
wrongful termination; nor, after his termination from active service, shall he
be entitled to any other salary, benefits or other compensation under this
Agreement. Further, he shall not be entitled to participate in or recover
under any other severance plan, including without limitation the Program.
Notwithstanding anything to the contrary in the preceding sentences, Xxxxxxxx
will receive an ESA, which applies to Change in Control situations, and any
severance benefits under his ESA shall be in addition to severance benefits
under this Agreement.
11. Obligations Of Quaker Upon Termination By Death, Disability, Discharge For
Cause, or Resignation Without Good Reason: In the event this Agreement
terminates due to the death or disability of Xxxxxxxx, or due to termination
for Cause or resignation or retirement Without Good Reason, Quaker shall pay to
Xxxxxxxx all Accrued Obligations in a lump sum in cash within thirty (30) days
after his last day of active service; provided, however, that any portion of
the Accrued Obligations which consists of bonus, deferred compensation, or
incentive compensation shall be determined and paid in accordance with the
terms of the relevant plan or provision. Nothing in this section shall limit
or otherwise adversely affect any rights Xxxxxxxx may have under applicable
law, under any other agreement with Quaker, or under any compensation or
benefit plan or policy of Quaker.
12. Gross-Up Payment for Golden Parachute Taxes: If it is determined that any
payment Quaker makes to or for the benefit of Xxxxxxxx, under this Agreement or
otherwise, is subject to the federal excise taxes imposed on golden parachute
payments, then regardless of whether Xxxxxxxx has declared his ESA effective,
Quaker will make an additional payment to him (a "gross-up" payment) calculated
in accordance with the relevant terms of his ESA (presently Section 8 of the
ESA), as determined by the initial terms of the ESA or by the terms of the ESA
as in effect on the date of the payment in question, whichever is more
favorable to Xxxxxxxx.
13. No Duty To Mitigate: With respect to the severance benefits provided under
section 10 of this Agreement, Xxxxxxxx shall not have any duty to mitigate his
income loss after a termination by finding alternative employment, nor shall
amounts he earns from other employment be offset against those benefits. This
provision has no effect on Morrison's duty to mitigate, if any, in connection
with claims that may arise under anything other than this Agreement.
14. Termination By Executive: Executive shall have no personal liability for
damages to Quaker for voluntarily terminating his employment at any time, with
or Without Good Reason, so long as he gives at least thirty (30) days prior
written notice; provided, depending on the reasons for termination and
subsequent events, he may be subject to the repayment requirement set forth in
subsection 2(b).
15. Non-Competition: If Morrison's employment with Quaker is terminated for
any reason that entitles him to receive severance benefits pursuant to section
9 of this Agreement, then for a period of two years immediately following his
last day of active service, he shall abide by the following covenants and
restrictions:
(a) Non-competition: He shall not Participate in the management of a
business entity that deals in Covered Products, unless that entity
is merely a retailer or consumer of Covered Products, who does not
compete against Quaker in any way.
(b) Raiding Employees: He shall not directly or indirectly solicit or
encourage any Existing Quaker Employee to leave Quaker or to accept
any position with any other company.
(c) Non-disclosure: He shall not use or disclose to anyone any
Confidential Information regarding Quaker.
(d) Definitions: The following definitions shall apply to the italicized
terms used in subsections 15(a) - 15(c) above:
(i) "Covered Products" mean any product which falls into one or
more of the following categories, so long as Quaker is
producing, marketing, distributing, selling or licensing such
product anywhere in the world: sports drinks and beverages
marketed as thirst quenchers; hot cereals; ready-to-eat
cereals; grain-based snacks other than potato chips; value
added pasta products; dry pasta products; value-added rice
products; pancake mixes; pancake syrup; and items Quaker
produces for the food service market.
(ii) "Participate" shall be construed broadly to include,
without limitation: (A) holding a position in which Morrison
directly manages such a business entity; (B) holding a position
in which anyone else who directly manages such a business entity
is in Morrison's reporting chain or chain-of command, regardless
of the number of reporting levels between them; (C) providing
input, advice, guidance, or suggestions regarding the management
of such a business entity to anyone responsible therefor; (D)
providing a testimonial on behalf of such an operation or the
product it produces; or (E) doing anything else which falls
within a common sense definition of the term "participate" as
used in the present context.
(iii)"Existing Quaker Employee" means someone: (A) who became
employed by Quaker before Morrison's active service terminates;
and (B) who is still employed by Quaker as of the date when the
facilitating act or solicitation takes place; and (C) who holds
a manager, director or officer level position at Quaker (or an
equivalent position based on job duties and/or Hay points,
regardless of the employee's title).
(iv) "Confidential Information" shall be construed as broadly as
Illinois law permits and shall include all non-public
information Xxxxxxxx acquires by virtue of his positions with
Quaker which might be of any value to a competitor or which
might cause any economic loss (directly or via loss of an
opportunity) or substantial embarrassment to Quaker or its
customers, distributors or suppliers if disclosed. Examples of
such confidential information include, without limitation, non-
public information about Quaker's strategic or marketing plans;
its customers, suppliers, and distributors; its potential
acquisition targets; its business operations and structure; its
product lines, formulas and pricing; its processes, machines and
inventions; its research and know-how; or its financial data.
(e) Remedies: In the event of a breach or threatened breach of any
term of subsections 15(a) - l5(d), Quaker shall be entitled to
injunctive relief and/or damages. The parties agree that breach of
these provisions would cause irreparable injury to Quaker for which
there would be no adequate remedy at law, due among other reasons to
the inherent difficulty of determining the precise causation for loss
of customers/consumers or measuring the exact impact of losing key
employees or having Confidential Information disclosed.
(f) Recitals: Xxxxxxxx acknowledges that by virtue of the positions
he will hold, he will acquire Confidential Information, including
without limitation knowledge of operational plans, strategic long
range plans, new product development, marketing plans, sales plans,
and distribution plans. Xxxxxxxx also acknowledges that by virtue of
his positions, he will learn which Existing Quaker Employees are
critical to Quaker's success and will develop relationships he
otherwise would not have had with such employees.
16. Choice Of Law And Forum:
(a) This Agreement shall be governed by and construed in accordance
with the laws of Illinois, without regard to choice of law
principles.
(b) In any litigation over this Agreement, both parties consent to
submit to the personal jurisdiction of any court, state or federal,
in the State of Illinois. Such courts in Illinois shall be the
exclusive jurisdiction for any litigation over this Agreement or an
alleged breach thereof.
17. Attorney Fees And Other Expenses:
(a) Quaker will pay all reasonable legal, accounting and other
professional fees and related expenses Xxxxxxxx incurred in
connection with the negotiation and preparation of this Agreement.
(b) If Xxxxxxxx becomes involved in litigation with his previous
employer regarding the termination of his previous employment and he
prevails in that litigation, Quaker will reimburse him for reasonable
attorney fees and expenses incurred in connection with such
litigation, but only to the extent that his former employer is not
ordered or required to reimburse him for such expenses.
(c) If Xxxxxxxx and Quaker become involved in litigation regarding
the terms of his employment with Quaker or the termination thereof,
the party which prevails shall be entitled to reimbursement of all
reasonable litigation costs and expenses, including attorney fees.
If each party prevails on one or more litigated issues, the court
shall exercise its equitable judgment to determine which, if either,
should be considered the prevailing party and the percentage of that
party's expenses which should be reimbursed, taking into account such
factors as the significance of the issue(s) on which each party
prevailed, the reasonableness of each party's position(s), and
ability to pay.
18. Indemnification: To the fullest extent permitted by law and Quaker's by-
laws, Quaker shall indemnify Xxxxxxxx (including the advancement of expenses)
for any judgments, fines, amounts paid in settlement and reasonable expenses,
including attorneys' fees, incurred by Xxxxxxxx in connection with the defense
of any lawsuit or other claim to which he is made a party by reason of being an
officer, director or employee of Quaker or any of its subsidiaries.
19. Binding Effect: This Agreement shall be binding on and inure to the
benefit of the heirs and representatives of Xxxxxxxx and the successors and
assigns of Quaker. Quaker shall require any successor (whether direct or
indirect, by purchase, merger, reorganization, consolidation, acquisition of
property or stock, liquidation or otherwise) to all or a substantial portion of
its assets to assume and agree to perform this Agreement in the same manner and
to the same extent that Quaker would be required to perform it if no such
succession had taken place; provided, Xxxxxxxx shall have the same obligations
to the successor as he would have had to Quaker. Regardless of whether such an
agreement is executed, this Agreement shall be binding on any successor of
Quaker in accordance with the operation of law, and such successor shall be
deemed "Quaker" for all purposes under this Agreement.
20. Notices: All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been given if delivered
anywhere by hand to the applicable party, or if delivered by recognized
commercial delivery service or if mailed within the continental United States
by first class certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) If to the Board or Quaker, addressed to:
The Quaker Oats Company
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention- General Counsel
with a copy to:
Xxxxxx Xxxxxx, Esq.
Xxxxxxxx Xxxxxxx Xxxxx
000 Xxxxx Xxxxxx Xxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
(b) If to Xxxxxxxx, addressed to:
Xxxxxx X. Xxxxxxxx
000 Xxxx Xxxxxxxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx Price
000 Xxxxx XxXxxxx Xxxxxx - Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Such addresses may be changed by written notice sent to the other party at the
last recorded address of that party. Failure to send a copy to the applicable
attorney shall not render a Notice ineffective, so long as it is actually
received by Quaker or Xxxxxxxx, as applicable.
21. Scope of Agreement:
(a) This Agreement supersedes any other document or oral agreement that
conflicts with it regarding any of the matters set forth herein, and
completely supersedes the Summary Of Principal Terms Of Employment
Agreement between the parties (which was signed on or about October
22, 1997). However, it is not intended to pre-empt or supersede
other documents, including plan documents, that provide additional,
non-conflicting rules or terms. Without limitation, nothing in this
Agreement shall eliminate or reduce Morrison's obligation to comply
with the Code Of Ethics, to the extent that certain of its provisions
(such as rules regarding disclosure of confidential information)
remain applicable to employees after termination.
(b) No promises or inducements have been made other than those
reflected herein. This Agreement cannot be amended except by a
written agreement signed by the parties, and only the Board has
authority to authorize such an amendment on behalf of Quaker.
22. Severability: Each term of this Agreement is deemed severable, in whole or
in part, and if any provision of this Agreement or its application in any
circumstance is found to be unlawful or invalid, the remaining terms and
provisions shall remain in full force and effect. In addition, a court may re-
write the invalid provision(s) so as to be consistent with applicable law and
still, to the extent possible, achieve the intended effect of this Agreement.
23. Execution In Counterparts: This Agreement may be executed by the parties
hereto in two (2) or more counterparts, each of which shall be deemed to be an
original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
The Quaker Oats Company
/s/Xxxxxxx X. Xxxxxxx
Date: 1/13 , 1998 By an authorized signing officer
/s/Xxxxxx X. Xxxxxxxx
Date: 1/12 , 1998 Xxxxxx X. Xxxxxxxx
