Exhibit 10(f)(6)
SEPARATION AGREEMENT
This Agreement Upon Separation Of Employment ("Agreement") is made and
entered into by and between ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, his successors, heirs,
administrators, executors, personal representatives and assigns ("▇▇▇▇▇▇") and
The Quaker Oats Company, its officers, directors, shareholders, employees,
agents, assigns, subsidiaries, divisions, parents, affiliates and successors
("Quaker"), collectively "the parties," and is effective as of the date hereof.
▇▇▇▇▇▇ understands that he shall at all times be employed at-will, which
means that he or Quaker has the right to terminate their employment
relationship at any time, for any reason. This Agreement merely sets forth the
parties respective rights and obligations in the event of termination, without
creating any right to continued or future employment.
1. Eligibility Criteria:
Provided that he complies with the requirements of paragraph 3 (by signing
a release Quaker tenders to him), ▇▇▇▇▇▇ will qualify for supplemental
separation benefits if the conditions in any of the following sections (A, B, C
or D) are satisfied.
A. Involuntary Discharge: During the first forty two (42) months of his
Quaker employment: (i) his employment is involuntarily terminated by Quaker
for reasons other than a sale or spin-off of the Snapple business; and (ii) the
Committee which administers the Quaker Officers' Severance Program ("Program")
determines that he is eligible for severance pay under the Program (or, if the
Program no longer exists, he meets this requirement if he satisfies the
eligibility criteria currently contained in the Program).
B. Spin-Off Of Snapple Business: During the first forty two (42) months
of his employment: (i) Quaker spins-off Snapple such that it becomes an
independent corporation (e.g., what was done with ▇▇▇▇▇▇-▇▇▇▇▇); and (ii) he is
not offered a reasonably comparable or superior position in the new company
that embodies/includes Snapple (without limitation, any position that involves
a reduction in his base salary or target bonus will be considered inferior).
C. Sale Of Snapple Business: During the first forty two (42) months of
his employment, Quaker sells Snapple to an acquiror and any of the following
applies: (i) he is not offered a position by the acquiror; (ii) he is
involuntarily terminated by the acquiror during the first six (6) months after
Quaker's sale of Snapple; or (iii) during the first six (6) months following
the sale he terminates his employment with the acquiror, or declines to accept
a position with the acquiror, based on his good faith belief that the position
available to him is unacceptable -- but if the facts clearly and convincingly
establish that he resigned or declined a job he found acceptable merely to take
a better opportunity offered to him by another company, he does not qualify.
D. Constructive Discharge: During the first forty two (42) months of
his employment: (i) Quaker reduces his base salary below $350,000 and/or
reduces his target bonus below $215,000; and (ii) he elects to treat the
reduction as a constructive discharge and, accordingly, resigns promptly.
2. Supplemental Separation Benefits
A. If ▇▇▇▇▇▇ satisfies the eligibility criteria set forth in paragraph
1(A), 1(B) and/or 1(D), then after his Program benefits have expired, or
immediately if he is not entitled to Program benefits, Quaker shall make
supplemental separation payments to him of $47,083.33 per month. These payments
will continue until the earlier of the following dates: (i) two years after the
date of his termination from active Quaker employment; or (ii) forty two (42)
months after his first day of active employment with Quaker (i.e., his hire
date). Notwithstanding the preceding sentence, supplemental separation
payments will not be cut off until ▇▇▇▇▇▇ has received Program payments (if
any) and/or supplemental payments (if any) for at least nine (9) months (e.g.,
if terminated at the end of the 36th month, he would receive payments of one
kind and/or the other through the 45th month). Provided, if ▇▇▇▇▇▇ qualifies
under section 1(C), then regardless of whether he also qualifies under other
sections, he shall receive payments solely as provided in section 2(B), not
under this section (i.e., he cannot double-collect under both provisions).
B. If ▇▇▇▇▇▇ satisfies the eligibility criteria set forth in paragraph
1(C), then after his Program benefits have expired, or immediately if he is not
entitled to Program benefits, he will receive supplemental separation payments
of $47,083.33 per month. These payments will continue until the earlier of the
following dates: (i) two years from the effective date of Quaker's sale of
Snapple; or (ii) forty two (42) months after his first day of active employment
with Quaker. Notwithstanding the preceding sentence, supplemental separation
payments will not be cut off until ▇▇▇▇▇▇ has received Program payments (if
any) and/or supplemental payments (if any) for at least nine (9) months. [Note
that under this formula, if ▇▇▇▇▇▇ works for the acquiror for any period of
time, that will have the effect of reducing the number of monthly separation
payments he receives from Quaker.] Further, once payments have begun under the
Program or this provision, if ▇▇▇▇▇▇ subsequently accepts employment or enters
into any kind of working relationship with the acquiror, then supplemental
separation payments from Quaker will immediately cease.
C. If ▇▇▇▇▇▇ is terminated during his first forty two (42) months of
employment and the Program Committee determines that he qualifies for Program
benefits, but the amount of his monthly Program benefit is less than
$47,083.33, then Quaker will make additional monthly payments such that while
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he is receiving Program payments, the sum of his Program payment plus this
supplemental payment equals $47,083.33 (which works out to $565,000 on an
annualized basis).
D. Other Fringe Benefits: While ▇▇▇▇▇▇ is receiving supplemental
separation payments, he also will receive the same benefits, such as insurance
coverage, that are provided under the Program, subject to his payment of any
required contribution on the same terms as other participants in these
benefits.
3. Mutual Waiver And Release
A. For ▇▇▇▇▇▇ to qualify for any supplemental pay or benefits under this
Agreement, within forty five (45) days after ▇▇▇▇▇▇'▇ termination from active
Quaker employment, a valid release of all potential claims he has or might have
against Quaker must be signed and in effect; provided, this condition will not
apply unless and until Quaker tenders a release to ▇▇▇▇▇▇ for him to sign;
further provided, ▇▇▇▇▇▇ will not be required to waive rights to the post-
termination benefits provided herein or under any of Quaker's pension or
benefit plans. This release will be consistent with releases Quaker has
obtained from other executives who were involuntarily terminated. This
provision does not bind ▇▇▇▇▇▇ to sign a release upon termination; rather, he
can voluntarily elect to sign a release and obtain the supplemental separation
benefits described herein, or he can elect not to sign a release and thereby
forego those benefits.
B. Once the release executed by ▇▇▇▇▇▇ is valid and in effect, Quaker
will immediately sign a waiver releasing him from all claims, except as
follows: (i) with respect to claims of gross misconduct, this waiver will only
apply to claims as to which Quaker's senior officers were aware, on or before
the effective date of the release, of the material facts necessary to establish
▇▇▇▇▇▇'▇ liability; (ii) Quaker will not waive any claims that arise out of
conduct or omissions which occur after the date the waiver becomes effective;
and (iii) Quaker will not waive its right to enforce agreements regarding post-
termination matters, such as disclosure of confidential information. As a
clarification, and solely for purposes of this specific provision of the
Agreement, examples of "gross misconduct" include embezzlement, fraud, sexual
harassment or submitting expense reports for trips never taken, while things
such as staying at an expensive hotel on a business trip, or having ▇▇▇▇▇▇'▇
secretary type some personal letters for him, would not qualify as "gross
misconduct."
C. Notwithstanding anything to the contrary in sections 3(A) or 3(B),
Quaker, in its sole discretion, may elect to have neither party sign a release.
If Quaker so elects, then ▇▇▇▇▇▇'▇ execution of a valid release will not be a
condition precedent to qualifying for supplemental separation benefits.
Quaker's election must be that both parties or neither party sign releases;
Quaker cannot elect that ▇▇▇▇▇▇ alone shall sign a release. The intent of this
entire paragraph is that both parties will sign a release or neither will.
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4. Mitigation
With respect to the supplemental separation payments provided under this
Agreement, ▇▇▇▇▇▇ shall not have any duty to mitigate his income loss by
finding alternative employment, nor shall amounts he earns from other
employment be offset against his payments. This provision has no effect on
▇▇▇▇▇▇'▇ duty to mitigate, if any, in connection with claims that may arise
under anything other than this Agreement.
5. Miscellaneous
A. If ▇▇▇▇▇▇ resigns at the request of his immediate superior during his
first forty two (42) months of employment, Quaker will treat his resignation as
an involuntary termination (which triggers benefits under section 1(A)).
B. During any period when ▇▇▇▇▇▇ is receiving Program benefits or
supplemental separation benefits, he will be bound by the confidentiality
provision in Quaker's Code Of Ethics, which applies to all employees. In the
event of a breach, Quaker is entitled to any appropriate equitable or legal
relief.
C. While receiving Program benefits or supplemental separation pay,
▇▇▇▇▇▇ will provide accurate information or testimony or both in connection
with any legal matter, if so requested by Quaker. He will make himself
available, upon request, to provide such information and testimony, in a formal
and/or an informal setting in accordance with Quaker's request, subject to
reasonable accommodation of his schedule and reimbursement of reasonable
expenses, including reasonable and necessary attorney fees (if independent
legal counsel is reasonably necessary).
D. During any period when ▇▇▇▇▇▇ is receiving Program benefits and/or
supplemental separation pay, at Quaker's request he will cooperate with media
requests for interviews regarding his termination and/or Quaker. He will not
disparage The Quaker Oats Company, its products, officers, directors or
employees in these interviews, in any other public setting, or in conversation
with persons in the same industry as Quaker and/or the media; provided: (i) he
obviously must testify honestly if compelled to do so under oath; and (ii) if
Quaker publicly criticizes ▇▇▇▇▇▇ or his ability (in a media release and/or in
conversations with others in the industry outside of Quaker), he may respond
accordingly.
E. If Quaker asserts claims against ▇▇▇▇▇▇, it cannot treat those claims
as creating a setoff against payments due under this Agreement unless the
claims are for a liquidated amount. If Quaker treats liquidated amounts
allegedly owed by ▇▇▇▇▇▇ as creating a setoff, it must place the setoff funds
in an interest bearing escrow account, pending resolution of the litigation;
further, even when a setoff applies, the amount of any setoff shall be limited
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such that ▇▇▇▇▇▇ still receives at least $10,000.00 each month during the
period when payments are due under this Agreement.
6. Quaker's Rights In Certain Circumstances
A. If ▇▇▇▇▇▇ voluntarily resigns his Quaker employment prior to
completing six (6) full months of employment with Quaker, and the circumstances
surrounding his resignation do not trigger supplemental separation pay under
this Agreement (i.e., there is no constructive discharge, sale of Snapple, or
spin off of Snapple in which ▇▇▇▇▇▇ is not offered a comparable position), then
▇▇▇▇▇▇ must pay Quaker the sum of $425,000.00 within thirty (30) days after his
resignation becomes effective. Provided, this provision will not apply if
▇▇▇▇▇▇ resigns solely due to extraordinary personal hardship that substantially
impairs or eliminates his ability to work for any company in any executive
capacity.
B. Notwithstanding anything to the contrary elsewhere in this Agreement,
including without limitation paragraphs 1(A) and 1(D), if Nantucket (i)
prevails in court on a claim that ▇▇▇▇▇▇ used or disclosed confidential or
trade secret information and (ii) as a result, obtains a preliminary or
permanent injunction against ▇▇▇▇▇▇ and/or Quaker that prevents or
significantly limits ▇▇▇▇▇▇ from performing his duties as President - Snapple
Beverages, then:
1.Quaker may terminate ▇▇▇▇▇▇, and ▇▇▇▇▇▇ stipulates that his
termination in such circumstances would be for "gross misconduct,"
thereby disqualifying him from severance or supplemental separation
benefits; provided, if the injunction that resulted in ▇▇▇▇▇▇'▇
termination is reversed on appeal, then this provision shall not
apply, and ▇▇▇▇▇▇'▇ termination date for purposes of this Agreement
will be deemed to be the date of the appellate court's final
decision.
2.If any portion of the unlawful use or disclosure occurs during
▇▇▇▇▇▇'▇ first six (6) months of employment with Quaker, then within
30 days after all appeals from the judgment/injunction in Nantucket's
favor are exhausted or time-barred, ▇▇▇▇▇▇ must pay Quaker
$425,000.00; provided, no payment shall be required if the injunction
is reversed on appeal.
7. Choice Of Law And Forum
A. This Agreement shall be governed by and construed in accordance with
the laws of the State Of Illinois, without giving effect to choice of law
principles.
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B. In the event of any litigation over this Agreement or an alleged
breach thereof, ▇▇▇▇▇▇ and Quaker each consent to submit to the personal
jurisdiction of any court, state or federal, in the State of Illinois. The
parties agree that the Illinois courts, state or federal, shall be the
exclusive jurisdiction for any litigation over this Agreement or an alleged
breach thereof.
8. Full Agreement
This written document contains the entire understanding and agreement of
the parties on the limited subject matter set forth herein (i.e., rights and
obligations upon termination of ▇▇▇▇▇▇'▇ employment during his first 42
months), and supersedes any prior agreement, oral or written, relating to these
matters. No party is relying on any statement or representation regarding this
subject matter other than those expressly set forth herein.
This Agreement cannot be modified or altered except by a subsequent
written agreement signed by the parties, and only Quaker's highest ranking
Human Resources officer or his direct superior shall have authority to sign
such an amendment on behalf of Quaker.
9. Severability
Each term of this Agreement is deemed severable, in whole or in part, and
if any provision of this Agreement or its application in any circumstance is
found to be illegal, unlawful or unenforceable, the remaining terms and
provisions shall not be affected thereby and shall remain in full force and
effect.
The Quaker Oats Company
August 12, 1996 /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By its Senior Vice President
August 12, 1996 /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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