Exhibit 10
May 1, 2002
Mr. Richard K. Smucker
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Dear Richard:
The purpose of this letter agreement, together with the identical
agreement that your brother is signing separately today, is to preserve the
value of your family's historical involvement in the business and affairs of the
Company in the event of your termination of active employment. Accordingly, this
Agreement evidences your commitment to maintain your public representation of
the Company for at least three years after termination, in consideration for the
compensation described below, subject to the terms and conditions set forth in
this Agreement.
1. GENERAL. If your employment with the Company terminates under any
circumstances other than those described in Section 3, so long as you comply
with Section 2, you will be entitled to receive the following compensation
during the three year period ("Service Period") beginning on your termination
date and ending on its third anniversary.
(a) Salary. Your salary will continue at the rate in effect on your
termination date, payable at the same times and in the same amounts as if your
employment had not terminated.
(b) Bonus. Each time the Company pays annual bonuses to its executives
during the Service Period, you will receive a lump sum payment equal to one-half
of the annual target award most recently approved for you by the Executive
Compensation Committee under the Company's Management Incentive Plan.
(c) Options and Restricted Shares. All stock options you hold under any
equity incentive plan of the Company will immediately vest and all restricted
shares you hold under any equity incentive plan of the Company will continue to
vest during the Service Period pursuant to the vesting schedule set forth in the
agreements governing the restricted shares.
(d) Benefits. You and your eligible dependents will be entitled to
receive those benefits and perquisites, including, without limitation, medical
insurance and life insurance, but excluding stock options, restricted shares or
other equity-based benefits, for which substantially all of the executives of
the Company are from time to time generally eligible, as determined from
time to time by the Executive Compensation Committee (the "Standard Executive
Benefits Package").
At the end of the Service Period, if you elect to begin receiving your Monthly
Retirement Benefit under the SERP (as such terms are defined in Section 3(a),
below), you will be entitled to do so without reduction of benefits for early
retirement, unless prior to the end of the Service Period you have elected to
begin receiving your Monthly Retirement Benefit with such reduction factors
applied.
2. PUBLIC REPRESENTATION. During the Service Period you will continue
to represent the Company publicly in accordance with the wishes of the Board of
Directors, and you will take such other actions as the Board or its designee may
reasonably request in order to ensure the continued identification of your
family and its values with the Smucker's brand. Without limiting the generality
of the foregoing, during the Service Period you will:
(a) attend the Annual Meeting,
(b) participate in employee events,
(c) appear at promotional events,
(d) authorize the exclusive use of your name, persona and likeness
throughout the Service Period, and thereafter insofar as your name, persona or
likeness is embodied in publicity, advertising or other marketing materials used
by the Company at any time before the end of the Service Period,
(e) participate in high-level meetings with customers and prospective
customers of the Company, and
(f) represent the Company to its other constituents and the communities
in which the Company operates, as appropriate.
3. CERTAIN TERMINATIONS. If your employment terminates because of your
death, Disability (as defined below) or Retirement (as defined below), or if the
Company terminates your employment for Cause (as defined below), or if you
choose to terminate your employment for Good Reason (as defined below), your
compensation will be governed by this Section 3.
(a) Disability. If your employment terminates on account of your having
become unable (as determined by the Board in good faith) to perform your
employment duties regularly by reason of illness or incapacity for a period of
more than 6 consecutive months ("Disability"), (i) you will be entitled to
receive the benefits you would have received during the Service Period as
described in Sections 1(a), (b) and (d) for a period of three years after the
date upon which the Disability is determined to have occurred, (ii) all stock
options and restricted shares granted to you under any equity incentive plan of
the Company will immediately vest, (iii) you will commence receiving your
Monthly Retirement Benefit (as defined in the Company's Top Management
Supplemental Retirement Benefit Plan (May 1, 1999 Restatement) (the "SERP"))
2
under the SERP as of the third anniversary of the date upon which the Disability
is determined to have occurred and the Monthly Retirement Benefit will be
calculated without regard to the early retirement reduction factors described in
Section 2.2 of the SERP, regardless of whether you have reached your Normal
Retirement Date (as defined in the SERP), (iv) you will be entitled to receive
any salary which has accrued but is unpaid and any reimbursable expenses which
have been incurred but are unpaid and (v) you will be entitled to any option
rights, restricted stock or other equity awards or plan benefits which by their
terms extend beyond termination of your employment (but only to the extent
provided in any option previously granted to you or any other benefit plan in
which you participated as an employee of the Company).
(b) Death. If your employment terminates on account of your death, your
beneficiaries, your dependents or your estate, as the case may be, will be
entitled to receive the benefits described in Sections 3(a)(i) through 3(a)(v),
with the phrase "the date of your death" being substituted in place of "the date
upon which the Disability is determined to have occurred" in subsections (a)(i)
and (a)(iii).
(c) Retirement. If you voluntarily terminate your employment and you
commence receiving your Monthly Retirement Benefit under the SERP
("Retirement"), (i) the Company will pay you any salary which has accrued but is
unpaid and will reimburse you for any reimbursable expenses which have been
incurred but are unpaid, (ii) you will be entitled to any option rights,
restricted stock or other equity awards or plan benefits which by their terms
extend beyond termination of employment (but only to the extent provided in any
option granted to you or any other benefit plan in which you participated as an
employee of the Company) and (iii) you will be entitled to receive any benefits
to which you are entitled pursuant to the requirements of Part 6 of Subtitle B
of Title I of the Employee Retirement Income Security Act of 1974, as amended.
(d) Termination by the Company without Cause. If the Company terminates
your employment other than for Disability or for Cause, you will be entitled to
receive the benefits described in Sections 3(a)(i) through 3(a)(v), with the
phrase "the date of termination" being substituted in place of "the date upon
which the Disability is determined to have occurred" in subsections (a)(i) and
(a)(iii).
For purposes of this Agreement, "Cause" means:
(i) your willful and continued failure to perform your duties;
(ii) gross negligence or willful misconduct by you with
respect to the Company or any of its subsidiaries or affiliates;
(iii) your breach of any of the agreements in Section 4 or 5
prior to the end of your employment with the Company; or
(iv) your conviction of a felony or a crime involving moral
turpitude.
Notwithstanding the foregoing, in no event will you be deemed to have
been terminated for "Cause" unless prior to your termination the Company has
delivered to you a copy of a
3
resolution duly adopted by the affirmative vote of not less than two-thirds of
the directors then in office at a meeting of the Board called and held for such
purpose, after reasonable notice to you and an opportunity for you, together
with your counsel (if you choose to have counsel present at such meeting), to be
heard before the Board, finding that, in the good faith opinion of the Board,
you committed an act constituting "Cause" and specifying the particulars of such
act in detail. While such a determination will be a condition precedent for the
existence of "Cause" for purposes of this Agreement, such a determination will
not be determinative or create a presumption that "Cause" in fact exists and
nothing in this Agreement will limit your right or the right or your
beneficiaries to contest the validity or propriety of any such determination.
(e) Termination by You for Good Reason. If you terminate your
employment for Good Reason by means of advance written notice to the Company at
least 30 days prior to the effective date of such termination identifying such
termination as a termination for Good Reason and identifying the Good Reason,
you will be entitled to receive the benefits described in Sections 3(a)(i)
through 3(a)(v).
For purposes of this Agreement, "Good Reason" means:
(i) any downward adjustment by the Board in your salary;
(ii) the relocation of the Company's principal executive
offices or the requirement by the Company that you change your
principal place of employment to any location that is in excess of 35
miles from your principal place of employment on the date of this
Agreement; or
(iii) any breach by the Company of this Agreement that is
material and that is not cured within 30 days after written notice to
the Company from you.
(f) Termination by the Company for Cause. If the Company terminates
your employment for Cause, you will be entitled to those rights described in
Sections 3(c)(i) through 3(c)(iii).
(g) Interest on Unpaid Amounts. If the Company fails to make any
payment or provide any benefit required to be made or provided under this
Agreement on a timely basis, the Company will pay interest on the amount or
value thereof at an annualized rate of interest equal to the so-called composite
"prime rate" as quoted from time to time during the relevant period in the
Midwest Edition of The Wall Street Journal. This interest will be payable as it
accrues on demand. Any change in the prime rate will be effective on and as of
the date of such change.
(h) No Mitigation. You will not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise. It is expressly understood that the Company's payment
obligations under this Agreement will cease in the event you breach any of your
obligations under Section 4 or 5.
4. CONFIDENTIALITY. You acknowledge that the information, observations
and data obtained by you while employed by the Company and during the
continuance of the Service Period pursuant to this Agreement, as well as those
obtained by you while employed by the
4
Company or any of its subsidiaries or affiliates or any predecessor prior to the
date of this Agreement, concerning the business or affairs of the Company or any
of its subsidiaries or affiliates or any predecessor (unless and except to the
extent the foregoing become generally known to and available for use by the
public other than as a result of your acts or omissions to act, "Confidential
Information") are the property of the Company or such subsidiary or affiliate.
Therefore, you agree that during your employment with the Company and
thereafter, you will not disclose any Confidential Information without the prior
written consent of the Board unless and except to the extent that such
disclosure is (a) made in the ordinary course of your performance of your duties
under this Agreement or (b) required by any subpoena or other legal process (in
which event you will give the Company prompt notice of such subpoena or other
legal process in order to permit the Company to seek appropriate protective
orders), and that you will not use any Confidential Information for your own
account or any other person or entity's benefit without the prior written
consent of the Board. You will deliver to the Company at the termination of the
later of (i) your employment or (ii) the Service Period, or at any other time
the Company may reasonably request, all memoranda, notes, plans, records,
reports, computer tapes and software and other documents and data (and copies
thereof) relating to the Confidential Information, or to the work product or the
business of the Company or any of its subsidiaries or affiliates which you may
then possess or have under your control. Nothing in this Section 4 will be
deemed to limit or otherwise affect any confidentiality or other similar
covenant or obligation imposed on you under any other agreement with, or plan or
arrangement of, the Company.
5. NONCOMPETITION, NONSOLICITATION.
(a) You acknowledge that in the course of your employment with the
Company and during the continuance of the Service Period; (i) you will become
familiar, and during the course of your employment by the Company or any of its
subsidiaries or affiliates or any predecessor prior to the date of this
Agreement, you have become familiar, with trade secrets and customer lists of
and proprietary information regarding the business of the Company and its
subsidiaries and affiliates and predecessors; (ii) such trade secrets and
customer lists of and proprietary information regarding the business of the
Company and its subsidiaries and affiliates and predecessors are confidential
and the exclusive property of the Company; and (iii) that your services have
been and will be of special, unique and extraordinary value to the Company. You
agree that you will not disclose, divulge, discuss, copy or otherwise use or
cause to be used in any manner in competition with, or contrary to the interests
of, the Company, the trade secrets and customer lists of and proprietary
information regarding the business of the Company and its subsidiaries and
affiliates and predecessors.
(b) You agree that during your employment with the Company and until
the later of (i) three years after termination of your employment with the
Company or (ii) three years after termination of the Service Period, you will
not in any manner, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an officer, director,
shareholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage or be engaged in, or assist any other person, firm,
corporation or enterprise in engaging or being engaged in, any business then
actively being conducted by the Company or any of its subsidiaries or affiliates
or any business similar to the businesses then conducted or contemplated to be
conducted by the Company or any of its subsidiaries or affiliates.
5
(c) You further agree that during your employment with the Company and
until the later of (i) three years after termination of your employment with the
Company or (ii) three years after termination of the Service Period, you will
not in any manner, directly or indirectly, induce or attempt to induce any
employee of the Company or of any of its subsidiaries or affiliates to quit or
abandon his or her employ.
(d) Nothing in this Section 5 will prohibit you from being: (i) a
shareholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 5% of the outstanding equity securities of any
class of a corporation or other entity which is publicly traded, so long as you
have no active participation in the business of such corporation or other
entity.
(e) In the event you violate any legally enforceable provision of this
Agreement as to which there is a specific time period during which you are
prohibited from taking certain actions or from engaging in certain activities,
as set forth in this Agreement, then, in such event, the violation shall toll
the running of such time period from the date of such violation until the
violation ceases.
(f) You acknowledge that you have carefully considered the nature and
extent of the restrictions on you and the rights and remedies conferred on the
Company under this Agreement. You further acknowledge and agree that the same
are reasonable in time and territory, are designed to eliminate competition
which would otherwise be unfair to the Company, do not stifle your inherent
skill and experience, would not operate as a bar to your sole means of support,
are fully required to protect the legitimate interests of the Company and do not
confer a benefit upon the Company disproportionate to your detriment.
(g) If, at the time of enforcement of this Section 5, a court holds
that the restrictions stated in this Section 5 are unreasonable under
circumstances then existing, you and the Company agree that the maximum period,
scope or geographical area reasonable under such circumstances will be
substituted for the stated period, scope or area and that the court will be
allowed to revise the restrictions contained in this Section 5 to cover the
maximum period, scope and area permitted by law.
(h) Nothing in this Section 5 will be deemed to limit or otherwise
affect any noncompetition or nonsolicitation or other similar covenant or
obligation imposed on you under any other agreement with, or plan or arrangement
of, the Company.
6. ENFORCEMENT. Because your services are unique and because you have
access to Confidential Information and work product, you agree that the Company
would be damaged irreparably in the event any of the provisions of Section 4 or
5 were not performed in accordance with their specific terms or were otherwise
breached and that money damages would be an inadequate remedy for any such
non-performance or breach. Therefore, the Company or its successors or assigns
will be entitled, in addition to other rights and remedies existing in their
favor, to an injunction or injunctions to prevent any non-performance, breach or
threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security).
6
7. REPRESENTATIONS. You represent and warrant to the Company that (a)
the execution, delivery and performance of this Agreement by you does not and
will not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which you are a party or by
which you are bound, (b) you are not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (c) upon the execution and delivery of this Agreement by
the Company, this Agreement will be the valid and binding obligation of you,
enforceable in accordance with its terms.
8. SURVIVAL. Subject to any limits on applicability, Sections 4 and 5
will survive and continue in full force in accordance with their terms
notwithstanding any termination of your employment with the Company or the
termination of the Service Period.
9. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, sent by reputable overnight
carrier or mailed by first class mail, return receipt requested. Any notice to
you will be delivered to the last home address on file with the Company and any
notice to the Company should be delivered to:
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attention: General Counsel
or such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered, sent
or mailed.
10. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained in this Agreement.
11. COMPLETE AGREEMENT. This Agreement embodies the complete agreement
and understanding between the parties with respect to the subject matter in this
Agreement and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter in this Agreement in any
way.
12. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be deemed to be an original and both of which
taken together will constitute one and the same agreement.
7
13. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to the
benefit of and be enforceable by you, the Company and your or its respective
heirs, executors, personal representatives, successors and assigns, except that
neither you nor the Company may assign any of your or its rights or delegate any
of your or its obligations under this Agreement without the prior written
consent of the other party. You consent to the assignment by the Company of all
of its rights and obligations in this Agreement to any successor to the Company
by merger or consolidation or purchase of all or substantially all of the
Company's assets, provided such transferee or successor assumes the liabilities
of the Company in this Agreement.
14. CHOICE OF LAW. This Agreement will be governed by the internal law,
and not the laws of conflicts, of the State of Ohio.
15. AMENDMENT AND WAIVER. This Agreement may be amended only with the
prior written consent of the parties, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement will affect the validity,
binding effect or enforceability of this Agreement.
16. PROHIBITION ON PARTICIPATION. If under any provision of this
Agreement you and your dependents become entitled to receive the benefits
provided under the Standard Executive Benefits Package and you are not eligible
to participate in any of the plans or programs set forth in the Standard
Executive Benefits Package, the Company will reimburse you, on a monthly basis,
for any premiums or other fees paid by you to obtain benefits (for you and your
dependents) equivalent to the Standard Executive Benefits Package.
17. RIGHT TO TERMINATE AGREEMENT UPON A CHANGE IN CONTROL.
Notwithstanding any provision in this Agreement to the contrary, in the event of
a Change in Control (as defined from time to time in the Company's 1998 Equity
and Performance Incentive Plan, or any successor to that plan), you will have
the right to terminate this Agreement upon 30 days' written notice to the
Company, and upon the Company's receipt of such notice this Agreement will
immediately become null and void and have no further force or effect.
If you agree to the terms set forth above, please sign and date a copy
of this Agreement below and return it to the undersigned.
Very truly yours,
THE J. M. SMUCKER COMPANY
By: /s/ Steven J. Ellcessor
---------------------------
Steven J. Ellcessor
Vice President, Finance and Administration,
Secretary, and Chief Financial Officer
8
Accepted and agreed to:
/s/ Richard K. Smucker Date: May 1, 2002
------------------------------ --------------------------
Richard K. Smucker
9
May 1, 2002
Mr. Timothy P. Smucker
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Dear Tim:
The purpose of this letter agreement, together with the identical
agreement that your brother is signing separately today, is to preserve the
value of your family's historical involvement in the business and affairs of the
Company in the event of your termination of active employment. Accordingly, this
Agreement evidences your commitment to maintain your public representation of
the Company for at least three years after termination, in consideration for the
compensation described below, subject to the terms and conditions set forth in
this Agreement.
1. GENERAL. If your employment with the Company terminates under any
circumstances other than those described in Section 3, so long as you comply
with Section 2, you will be entitled to receive the following compensation
during the three year period ("Service Period") beginning on your termination
date and ending on its third anniversary.
(a) Salary. Your salary will continue at the rate in effect on your
termination date, payable at the same times and in the same amounts as if your
employment had not terminated.
(b) Bonus. Each time the Company pays annual bonuses to its executives
during the Service Period, you will receive a lump sum payment equal to one-half
of the annual target award most recently approved for you by the Executive
Compensation Committee under the Company's Management Incentive Plan.
(c) Options and Restricted Shares. All stock options you hold under any
equity incentive plan of the Company will immediately vest and all restricted
shares you hold under any equity incentive plan of the Company will continue to
vest during the Service Period pursuant to the vesting schedule set forth in the
agreements governing the restricted shares.
(d) Benefits. You and your eligible dependents will be entitled to
receive those benefits and perquisites, including, without limitation, medical
insurance and life insurance, but excluding stock options, restricted shares or
other equity-based benefits, for which substantially all of the executives of
the Company are from time to time generally eligible, as determined from
time to time by the Executive Compensation Committee (the "Standard Executive
Benefits Package").
At the end of the Service Period, if you elect to begin receiving your Monthly
Retirement Benefit under the SERP (as such terms are defined in Section 3(a),
below), you will be entitled to do so without reduction of benefits for early
retirement, unless prior to the end of the Service Period you have elected to
begin receiving your Monthly Retirement Benefit with such reduction factors
applied.
2. PUBLIC REPRESENTATION. During the Service Period you will continue
to represent the Company publicly in accordance with the wishes of the Board of
Directors, and you will take such other actions as the Board or its designee may
reasonably request in order to ensure the continued identification of your
family and its values with the Smucker's brand. Without limiting the generality
of the foregoing, during the Service Period you will:
(a) attend the Annual Meeting,
(b) participate in employee events,
(c) appear at promotional events,
(d) authorize the exclusive use of your name, persona and likeness
throughout the Service Period, and thereafter insofar as your name, persona or
likeness is embodied in publicity, advertising or other marketing materials used
by the Company at any time before the end of the Service Period,
(e) participate in high-level meetings with customers and prospective
customers of the Company, and
(f) represent the Company to its other constituents and the communities
in which the Company operates, as appropriate.
3. CERTAIN TERMINATIONS. If your employment terminates because of your
death, Disability (as defined below) or Retirement (as defined below), or if the
Company terminates your employment for Cause (as defined below), or if you
choose to terminate your employment for Good Reason (as defined below), your
compensation will be governed by this Section 3.
(a) Disability. If your employment terminates on account of your having
become unable (as determined by the Board in good faith) to perform your
employment duties regularly by reason of illness or incapacity for a period of
more than 6 consecutive months ("Disability"), (i) you will be entitled to
receive the benefits you would have received during the Service Period as
described in Sections 1(a), (b) and (d) for a period of three years after the
date upon which the Disability is determined to have occurred, (ii) all stock
options and restricted shares granted to you under any equity incentive plan of
the Company will immediately vest, (iii) you will commence receiving your
Monthly Retirement Benefit (as defined in the Company's Top Management
Supplemental Retirement Benefit Plan (May 1, 1999 Restatement) (the "SERP"))
2
under the SERP as of the third anniversary of the date upon which the Disability
is determined to have occurred and the Monthly Retirement Benefit will be
calculated without regard to the early retirement reduction factors described in
Section 2.2 of the SERP, regardless of whether you have reached your Normal
Retirement Date (as defined in the SERP), (iv) you will be entitled to receive
any salary which has accrued but is unpaid and any reimbursable expenses which
have been incurred but are unpaid and (v) you will be entitled to any option
rights, restricted stock or other equity awards or plan benefits which by their
terms extend beyond termination of your employment (but only to the extent
provided in any option previously granted to you or any other benefit plan in
which you participated as an employee of the Company).
(b) Death. If your employment terminates on account of your death, your
beneficiaries, your dependents or your estate, as the case may be, will be
entitled to receive the benefits described in Sections 3(a)(i) through 3(a)(v),
with the phrase "the date of your death" being substituted in place of "the date
upon which the Disability is determined to have occurred" in subsections (a)(i)
and (a)(iii).
(c) Retirement. If you voluntarily terminate your employment and you
commence receiving your Monthly Retirement Benefit under the SERP
("Retirement"), (i) the Company will pay you any salary which has accrued but is
unpaid and will reimburse you for any reimbursable expenses which have been
incurred but are unpaid, (ii) you will be entitled to any option rights,
restricted stock or other equity awards or plan benefits which by their terms
extend beyond termination of employment (but only to the extent provided in any
option granted to you or any other benefit plan in which you participated as an
employee of the Company) and (iii) you will be entitled to receive any benefits
to which you are entitled pursuant to the requirements of Part 6 of Subtitle B
of Title I of the Employee Retirement Income Security Act of 1974, as amended.
(d) Termination by the Company without Cause. If the Company terminates
your employment other than for Disability or for Cause, you will be entitled to
receive the benefits described in Sections 3(a)(i) through 3(a)(v), with the
phrase "the date of termination" being substituted in place of "the date upon
which the Disability is determined to have occurred" in subsections (a)(i) and
(a)(iii).
For purposes of this Agreement, "Cause" means:
(i) your willful and continued failure to perform your duties;
(ii) gross negligence or willful misconduct by you with
respect to the Company or any of its subsidiaries or affiliates;
(iii) your breach of any of the agreements in Section 4 or 5
prior to the end of your employment with the Company; or
(iv) your conviction of a felony or a crime involving moral
turpitude.
Notwithstanding the foregoing, in no event will you be deemed to have
been terminated for "Cause" unless prior to your termination the Company has
delivered to you a copy of a
3
resolution duly adopted by the affirmative vote of not less than two-thirds of
the directors then in office at a meeting of the Board called and held for such
purpose, after reasonable notice to you and an opportunity for you, together
with your counsel (if you choose to have counsel present at such meeting), to be
heard before the Board, finding that, in the good faith opinion of the Board,
you committed an act constituting "Cause" and specifying the particulars of such
act in detail. While such a determination will be a condition precedent for the
existence of "Cause" for purposes of this Agreement, such a determination will
not be determinative or create a presumption that "Cause" in fact exists and
nothing in this Agreement will limit your right or the right or your
beneficiaries to contest the validity or propriety of any such determination.
(e) Termination by You for Good Reason. If you terminate your
employment for Good Reason by means of advance written notice to the Company at
least 30 days prior to the effective date of such termination identifying such
termination as a termination for Good Reason and identifying the Good Reason,
you will be entitled to receive the benefits described in Sections 3(a)(i)
through 3(a)(v).
For purposes of this Agreement, "Good Reason" means:
(i) any downward adjustment by the Board in your salary;
(ii) the relocation of the Company's principal executive
offices or the requirement by the Company that you change your
principal place of employment to any location that is in excess of 35
miles from your principal place of employment on the date of this
Agreement; or
(iii) any breach by the Company of this Agreement that is
material and that is not cured within 30 days after written notice to
the Company from you.
(f) Termination by the Company for Cause. If the Company terminates
your employment for Cause, you will be entitled to those rights described in
Sections 3(c)(i) through 3(c)(iii).
(g) Interest on Unpaid Amounts. If the Company fails to make any
payment or provide any benefit required to be made or provided under this
Agreement on a timely basis, the Company will pay interest on the amount or
value thereof at an annualized rate of interest equal to the so-called composite
"prime rate" as quoted from time to time during the relevant period in the
Midwest Edition of The Wall Street Journal. This interest will be payable as it
accrues on demand. Any change in the prime rate will be effective on and as of
the date of such change.
(h) No Mitigation. You will not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise. It is expressly understood that the Company's payment
obligations under this Agreement will cease in the event you breach any of your
obligations under Section 4 or 5.
4. CONFIDENTIALITY. You acknowledge that the information, observations
and data obtained by you while employed by the Company and during the
continuance of the Service Period pursuant to this Agreement, as well as those
obtained by you while employed by the
4
Company or any of its subsidiaries or affiliates or any predecessor prior to the
date of this Agreement, concerning the business or affairs of the Company or any
of its subsidiaries or affiliates or any predecessor (unless and except to the
extent the foregoing become generally known to and available for use by the
public other than as a result of your acts or omissions to act, "Confidential
Information") are the property of the Company or such subsidiary or affiliate.
Therefore, you agree that during your employment with the Company and
thereafter, you will not disclose any Confidential Information without the prior
written consent of the Board unless and except to the extent that such
disclosure is (a) made in the ordinary course of your performance of your duties
under this Agreement or (b) required by any subpoena or other legal process (in
which event you will give the Company prompt notice of such subpoena or other
legal process in order to permit the Company to seek appropriate protective
orders), and that you will not use any Confidential Information for your own
account or any other person or entity's benefit without the prior written
consent of the Board. You will deliver to the Company at the termination of the
later of (i) your employment or (ii) the Service Period, or at any other time
the Company may reasonably request, all memoranda, notes, plans, records,
reports, computer tapes and software and other documents and data (and copies
thereof) relating to the Confidential Information, or to the work product or the
business of the Company or any of its subsidiaries or affiliates which you may
then possess or have under your control. Nothing in this Section 4 will be
deemed to limit or otherwise affect any confidentiality or other similar
covenant or obligation imposed on you under any other agreement with, or plan or
arrangement of, the Company.
5. NONCOMPETITION, NONSOLICITATION.
(a) You acknowledge that in the course of your employment with the
Company and during the continuance of the Service Period; (i) you will become
familiar, and during the course of your employment by the Company or any of its
subsidiaries or affiliates or any predecessor prior to the date of this
Agreement, you have become familiar, with trade secrets and customer lists of
and proprietary information regarding the business of the Company and its
subsidiaries and affiliates and predecessors; (ii) such trade secrets and
customer lists of and proprietary information regarding the business of the
Company and its subsidiaries and affiliates and predecessors are confidential
and the exclusive property of the Company; and (iii) that your services have
been and will be of special, unique and extraordinary value to the Company. You
agree that you will not disclose, divulge, discuss, copy or otherwise use or
cause to be used in any manner in competition with, or contrary to the interests
of, the Company, the trade secrets and customer lists of and proprietary
information regarding the business of the Company and its subsidiaries and
affiliates and predecessors.
(b) You agree that during your employment with the Company and until
the later of (i) three years after termination of your employment with the
Company or (ii) three years after termination of the Service Period, you will
not in any manner, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an officer, director,
shareholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage or be engaged in, or assist any other person, firm,
corporation or enterprise in engaging or being engaged in, any business then
actively being conducted by the Company or any of its subsidiaries or affiliates
or any business similar to the businesses then conducted or contemplated to be
conducted by the Company or any of its subsidiaries or affiliates.
5
(c) You further agree that during your employment with the Company and
until the later of (i) three years after termination of your employment with the
Company or (ii) three years after termination of the Service Period, you will
not in any manner, directly or indirectly, induce or attempt to induce any
employee of the Company or of any of its subsidiaries or affiliates to quit or
abandon his or her employ.
(d) Nothing in this Section 5 will prohibit you from being: (i) a
shareholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 5% of the outstanding equity securities of any
class of a corporation or other entity which is publicly traded, so long as you
have no active participation in the business of such corporation or other
entity.
(e) In the event you violate any legally enforceable provision of this
Agreement as to which there is a specific time period during which you are
prohibited from taking certain actions or from engaging in certain activities,
as set forth in this Agreement, then, in such event, the violation shall toll
the running of such time period from the date of such violation until the
violation ceases.
(f) You acknowledge that you have carefully considered the nature and
extent of the restrictions on you and the rights and remedies conferred on the
Company under this Agreement. You further acknowledge and agree that the same
are reasonable in time and territory, are designed to eliminate competition
which would otherwise be unfair to the Company, do not stifle your inherent
skill and experience, would not operate as a bar to your sole means of support,
are fully required to protect the legitimate interests of the Company and do not
confer a benefit upon the Company disproportionate to your detriment.
(g) If, at the time of enforcement of this Section 5, a court holds
that the restrictions stated in this Section 5 are unreasonable under
circumstances then existing, you and the Company agree that the maximum period,
scope or geographical area reasonable under such circumstances will be
substituted for the stated period, scope or area and that the court will be
allowed to revise the restrictions contained in this Section 5 to cover the
maximum period, scope and area permitted by law.
(h) Nothing in this Section 5 will be deemed to limit or otherwise
affect any noncompetition or nonsolicitation or other similar covenant or
obligation imposed on you under any other agreement with, or plan or arrangement
of, the Company.
6. ENFORCEMENT. Because your services are unique and because you have
access to Confidential Information and work product, you agree that the Company
would be damaged irreparably in the event any of the provisions of Section 4 or
5 were not performed in accordance with their specific terms or were otherwise
breached and that money damages would be an inadequate remedy for any such
non-performance or breach. Therefore, the Company or its successors or assigns
will be entitled, in addition to other rights and remedies existing in their
favor, to an injunction or injunctions to prevent any non-performance, breach or
threatened breach of any of such provisions and to enforce such provisions
specifically (without posting a bond or other security).
6
7. REPRESENTATIONS. You represent and warrant to the Company that (a)
the execution, delivery and performance of this Agreement by you does not and
will not conflict with, breach, violate or cause a default under any contract,
agreement, instrument, order, judgment or decree to which you are a party or by
which you are bound, (b) you are not a party to or bound by any employment
agreement, noncompete agreement or confidentiality agreement with any other
person or entity and (c) upon the execution and delivery of this Agreement by
the Company, this Agreement will be the valid and binding obligation of you,
enforceable in accordance with its terms.
8. SURVIVAL. Subject to any limits on applicability, Sections 4 and 5
will survive and continue in full force in accordance with their terms
notwithstanding any termination of your employment with the Company or the
termination of the Service Period.
9. NOTICES. Any notice provided for in this Agreement must be in
writing and must be either personally delivered, sent by reputable overnight
carrier or mailed by first class mail, return receipt requested. Any notice to
you will be delivered to the last home address on file with the Company and any
notice to the Company should be delivered to:
The J. M. Smucker Company
Strawberry Lane
Orrville, Ohio 44667-0280
Attention: General Counsel
or such other address or to the attention of such other person as the recipient
party has specified by prior written notice to the sending party. Any notice
under this Agreement will be deemed to have been given when so delivered, sent
or mailed.
10. SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in a manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be invalid, illegal or
unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained in this Agreement.
11. COMPLETE AGREEMENT. This Agreement embodies the complete agreement
and understanding between the parties with respect to the subject matter in this
Agreement and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter in this Agreement in any
way.
12. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which will be deemed to be an original and both of which
taken together will constitute one and the same agreement.
7
13. SUCCESSORS AND ASSIGNS. This Agreement will bind and inure to the
benefit of and be enforceable by you, the Company and your or its respective
heirs, executors, personal representatives, successors and assigns, except that
neither you nor the Company may assign any of your or its rights or delegate any
of your or its obligations under this Agreement without the prior written
consent of the other party. You consent to the assignment by the Company of all
of its rights and obligations in this Agreement to any successor to the Company
by merger or consolidation or purchase of all or substantially all of the
Company's assets, provided such transferee or successor assumes the liabilities
of the Company in this Agreement.
14. CHOICE OF LAW. This Agreement will be governed by the internal law,
and not the laws of conflicts, of the State of Ohio.
15. AMENDMENT AND WAIVER. This Agreement may be amended only with the
prior written consent of the parties, and no course of conduct or failure or
delay in enforcing the provisions of this Agreement will affect the validity,
binding effect or enforceability of this Agreement.
16. PROHIBITION ON PARTICIPATION. If under any provision of this
Agreement you and your dependents become entitled to receive the benefits
provided under the Standard Executive Benefits Package and you are not eligible
to participate in any of the plans or programs set forth in the Standard
Executive Benefits Package, the Company will reimburse you, on a monthly basis,
for any premiums or other fees paid by you to obtain benefits (for you and your
dependents) equivalent to the Standard Executive Benefits Package.
17. RIGHT TO TERMINATE AGREEMENT UPON A CHANGE IN CONTROL.
Notwithstanding any provision in this Agreement to the contrary, in the event of
a Change in Control (as defined from time to time in the Company's 1998 Equity
and Performance Incentive Plan, or any successor to that plan), you will have
the right to terminate this Agreement upon 30 days' written notice to the
Company, and upon the Company's receipt of such notice this Agreement will
immediately become null and void and have no further force or effect.
If you agree to the terms set forth above, please sign and date a copy
of this Agreement below and return it to the undersigned.
Very truly yours,
THE J. M. SMUCKER COMPANY
By: /s/ Steven J. Ellcessor
---------------------------
Steven J. Ellcessor
Vice President, Finance and Administration,
Secretary, and Chief Financial Officer
8
Accepted and agreed to:
/s/ Timothy P. Smucker Date: May 1, 2002
----------------------------- ---------------------------
Timothy P. Smucker
9