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EXHIBIT 99.1
SECOND AMENDMENT TO SALARY CONTINUATION
AGREEMENT DATED AUGUST 1, 1989
BETWEEN RICHARD M. JAFFEE AND THE REGISTRANT
AS AMENDED BY THE EXTENSION
AND AMENDMENT DATED OCTOBER 9, 1998.
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SECOND AMENDMENT TO AGREEMENT
THIS AMENDMENT ("Amendment") to the Agreement dated as of August 1, 1989, as
amended by the First Amendment dated October 9, 1998 (the "Agreement") is
effective the 31st day of October, 2000, ("Effective Date") by and between
Oil-Dri Corporation of America, a Delaware corporation ("Oil-Dri") and Richard
M. Jaffee ("Jaffee").
W I T N E S S E T H:
WHEREAS, the parties hereto are parties to the Agreement ; and
WHEREAS, the parties hereto desire to amend the Agreement in the manner
hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, including Jaffee's
agreement to eliminate the $300,000 payment which the Agreement presently
provides is to be paid to him on his retirement, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto hereby agree to the following:
1. INCORPORATION OF THE AGREEMENT. All capitalized terms which are not defined
hereunder shall have the same meanings as set forth in the Agreement, and the
Agreement, to the extent not inconsistent with this Amendment, is incorporated
herein by this reference as though the same were set forth in its entirety. To
the extent any terms and provisions of the Agreement are inconsistent with the
terms and provisions set forth below, such terms and provisions shall be deemed
superceded hereby. Except as specifically set forth herein, the Agreement shall
remain in full force and effect and its provisions shall be binding on the
parties hereto.
2. AMENDMENT OF THE AGREEMENT. The Agreement is hereby amended as
follows:
(A) Section 1 is amended to delete "President and Chief Executive Officer" and
instead insert "Chairman of the Board".
(B) To reflect Jaffee's agreement to relinquish, effective October 31, 2000,
the $300,000 which the Agreement presently provides is to be paid him by
Oil-Dri on his retirement and to establish the nature of his duties and
compensation as a consultant during the period prior to his retirement and
his benefits upon his scheduled
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retirement on February 1, 2006, Section 5 is deleted and replaced with a
new Section 5 which reads in its entirety as follows:
(a) Jaffee shall cease full time employment as of January 31, 2001. At that
time, his compensation under Section 2 (a), above, shall terminate and
commencing February 1, 2001, for a period of 5 years ending January 31,
2006 (the "Consulting Period"), he will serve as a consultant to
Oil-Dri. As such, he shall perform all assignments given him from time
to time by Oil-Dri's Board or President. He shall be available to
perform consulting services when and as needed, but, unless he agrees,
he will not be required to render consulting services outside of
Chicago, Illinois. During the Consulting Period, he shall continue to
serve as Chairman of the Board unless he requests and the Board agrees
that he may relinquish that role.
During the Consulting Period, Oil-Dri shall pay Jaffee consulting fee
at the annual rate of $185,000, payable bi-monthly. In addition, during
the Consulting Period, Jaffee shall be provided with an office and
secretary comparable to the office and secretary presently provided
him. During the Consulting Period, both Jaffee and Jaffee's wife shall
continue to be covered by Oil-Dri's health and major medical insurance
programs, under the terms of the Oil-Dri Corporation of America
Employee Benefit Plan, as amended, at no cost to Jaffee; provided,
however, that if, at any time during the Consulting Period coverage
cannot be continued for Jaffee or for Jaffee's wife under Oil-Dri's
major medical insurance programs then Oil-Dri shall purchase an
insurance policy to secure Medigap coverage (at a cost to it not to
exceed $10,000, with the beneficiary having the option to pay any cost
over and above that amount); or, if Oil-Dri is unable to secure such a
policy or, while it is able to do so, the beneficiary declines to pay
the excess cost, then Oil-Dri shall cover the beneficiary's medical
expenses to the same extent as they would have been covered under
Oil-Dri's major medical insurance up to a lifetime aggregate of
$1,000,000.
(b) Effective October 31, 2000, neither Jaffee nor his wife nor his estate
is any longer entitled to the $300,000 which Section 5 of the Agreement
previously provided to be paid to him at his retirement or, on his
death, to his wife or his estate.
(c) Jaffee shall receive a supplemental pension benefit as detailed in
Exhibit 1, attached hereto and made a part hereof
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("Supplemental Benefit"). This Supplemental Benefit will be earned
over the five (5) year Consulting Period and will be payable to Jaffee
beginning February 1, 2006. If Jaffee dies on or prior to January
31, 2006, or if his employment before the Consulting Period is
terminated by Oil-Dri other than as provided in Section 6, the Total
Value (as hereinafter defined) of the Supplemental Benefit (or if he
dies after January 31, 2006, the Total Residual Value (as
hereinafter defined)of the Supplemental Benefit) shall be
immediately payable:
(i) in the event of Jaffee's death, to Jaffee's wife and if
Jaffee's wife predeceases him, then to the Richard M. Jaffee
Revocable Trust under agreement dated June 21, 1974, as amended,
or, if that Trust is not then in existence, to such entity as
Jaffee has designated to replace it and, if there is no such
designation, to his estate; if Jaffee's wife survives him but dies
before all amounts due are paid, Oil-Dri shall pay all amounts due
or remaining unpaid under this Section 5 (b) as Jaffee's wife
directs by written instrument delivered to Oil-Dri, or, if she
fails to so direct, to the estate of Jaffee's wife. Such payment
may, at Oil-Dri's option, be made in a lump sum or in installments
over a period of sixty (60) months, with interest at Oil-Dri's
borrowing rate.
(ii) in the event of Wrongful Termination, to Jaffee.
Total Value shall mean the total amount of the Supplemental Benefit
calculated as if Jaffee had completed service through January 31,
2006, and retired on that date, but reflecting an actuarial
reduction on account of his earlier death or termination. Total
Residual Value shall mean the total remaining amount of the
Supplemental Benefit calculated at Jaffee's death on the basis of a
life annuity payable to his spouse for her life expectancy.
(d) To the extent any payment of premiums is required, Oil-Dri will
continue to pay any premium which may be required in order to keep in
full force and effect the executive life insurance policies presently
in effect for Jaffee.
(e) In the event of total disability after February 1, 2006, payments under
Section 5 (b) shall be in lieu of (and not in addition to) those for
total disability provided under Section 4(b).
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(f) In the event of termination of this Agreement for Jaffee's intentional
breach in accordance with Section 6, all of Jaffee's rights hereunder,
including, without limitation, his wife's rights under this Agreement,
shall terminate.
(g) Jaffee may, at his option, terminate this Agreement for Oil-Dri
material breach of any of the terms, provisions or agreements to be
performed by Oil-Dri. If he does so, all amounts due or which may
become due hereunder (including, without limitation, any unpaid
portions of the consulting fee due him for the Consulting Period and
any unpaid portion of the Supplemental Benefit) shall be and become
immediately due and payable.
(C) Sections 7, 8, 9 and 10 are amended so that references to "his employment"
or "Jaffee's employment" are read to include the Consulting Period.
(D) Section 19 is amended by removing the period at the end of that Section,
and inserting a semi-colon followed by:
provided, however, that Jaffee's rights to the Supplemental Benefit
shall survive the expiration of that term and continue in full force
and effect until the Supplemental Benefit has been fully paid.
IN WITNESS WHEREOF, the undersigned have executed this Agreement on
October 31, 2000.
OIL-DRI CORPORATION OF AMERICA RICHARD M. JAFFEE
By:
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1418 North Lake Shore Drive
Its: Chicago, IL 60610
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