Exhibit 10.1
REVISED AND RESTATED EMPLOYMENT AGREEMENT
REVISED and RESTATED AGREEMENT by and between International
Multifoods Corporation, a Delaware corporation (the "Company") and
Anthony Luiso (the "Executive"), dated as of the 17th day of September,
1993.
WHEREAS, the Board of Directors of the Company (the "Board")
has heretofore determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the
continued dedication of the Executive, notwithstanding the possibility,
threat or occurrence of a Change of Control (as defined below) of the
Company;
WHEREAS, the Board determined it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive's full attention and dedication
to the Company currently and in the event of any threatened or pending
Change of Control;
WHEREAS, to provide the Executive with compensation and
benefits arrangements upon a Change of Control which ensure that the
compensation and benefits to be paid to the Executive are at least as
favorable as those in effect at the time of the Change of Control and
which are competitive with those of other corporations the Company and
the Executive entered into an Employment Agreement dated as of August
19, 1988, as subsequently amended prior to the date hereof (the "Prior
Employment Agreement"); and
WHEREAS, the Board of Directors has determined that the
Prior Employment Agreement should be amended in certain non-material
respects, to more effectively achieve the intent of the parties thereto
by, among other things, clarifying the definition of "Change of Control"
and modifying the calculation of any payment made to the Executive as a
result of any tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code").
NOW, THEREFORE, IT IS HEREBY AGREED THAT THE PRIOR
EMPLOYMENT AGREEMENT IS HEREBY AMENDED AND RESTATED IN ITS ENTIRETY TO
READ AS FOLLOWS:
1. Nature and Capacity of Employment. The Company hereby
agrees to continue to employ the Executive as Chairman of the Board,
President and Chief Executive Officer of the Company, pursuant to the
terms of this Revised and Restated Employment Agreement ("Employment
Agreement") for the Employment Period (as defined in Section 2 hereof).
The Executive agrees to continue to perform, or to hold himself
available to perform under employment conditions similar to those in
effect as of July 1, 1993, on a full-time basis, at the principal
executive offices of the Company, the functions of the office of
Chairman of the Board, President and Chief Executive Officer of the
Company, pursuant to the terms hereof.
2. Term of Employment. This Employment Agreement shall
commence on the date hereof and shall continue in effect through the
last day of February, 1996; provided, however, that commencing on March
1, 1994, and on each March 1 thereafter, the term of this Employment
Agreement (the "Employment Period") shall be automatically extended for
one additional year beyond the then-current term of this Employment
Agreement unless not later than February 1, 1994, and each February 1st
thereafter, as applicable, the Company shall have given the Executive
written notice that it does not wish to extend the Employment Period.
If a Change of Control (as defined in Section 5) occurs during the
Employment Period, then for all purposes of this Agreement, the
Employment Period shall be extended to and shall end on the third
anniversary of the date on which a Change of Control first occurs (the
"Change of Control Date").
3. Compensation. (a) Base Salary. (i) Prior to a Change
of Control, the Company agrees and guarantees to pay to the Executive
annual base salary for each year of the Employment Period, and for each
year thereafter so long as the Executive continues to be employed by the
Company, the amount of Five Hundred Thirty Thousand Dollars ($530,000),
payable in semi-monthly installments. (Such annual base salary, as the
same may from time to time and at any time be increased by appropriate
action of the Company's Board of Directors, is herein referred to as the
"Annual Base Salary".)
(ii) Following a Change of Control, the Executive
shall receive an Annual Base Salary (payable in semi-monthly
installments), at least equal to the highest Annual Base Salary paid or
payable, including any base salary which has been earned but deferred,
to the Executive by the Company and its affiliated companies in respect
of the 12-month period immediately preceding the month in which the
Change of Control Date occurs. During the post Change of Control
Employment Period, the Annual Base Salary shall be reviewed within 15
months after the last salary increase awarded to the Executive prior to
the Change of Control Date and thereafter at least once every 15 months.
Any increase in Annual Base Salary shall not serve to limit or reduce
any other obligation to the Executive under this Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual
Base Salary as utilized in this Agreement, unless otherwise specifically
provided, shall refer to the Annual Base Salary as so increased. As
used in this Agreement, the term "affiliated companies" shall include
any company controlled by, controlling or under common control with the
Company.
(b) Annual Bonus. During the Employment Period, in
addition to Annual Base Salary, the Executive shall be entitled to
participate in and receive incentive compensation under and as provided
in the Company's Management Incentive Plan or any successor plan.
(c) Incentive, Savings and Retirement Plans. During the
Employment Period, the Executive shall be entitled to participate in all
stock option, incentive, savings and retirement plans, practices,
policies and programs applicable generally to other peer executives of
the Company and its affiliated companies.
(d) Welfare Benefit Plans. During the Employment Period,
the Executive and/or the Executive's family, as the case may be, shall
be eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by the
Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, salary continuance, employee
life, group life, accidental death and travel accident insurance plans
and programs) (collectively referred to as "Welfare Benefits") to the
extent applicable generally to other peer executives of the Company and
its affiliated companies; provided, however, that in no event following
a Change of Control shall such plans, practices, policies and programs
provide the Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices, policies
and programs in effect for the Executive at et time during the 120-day
period immediately preceding the Change of Control Date or, if more
favorable to the Executive, those provided generally at any time after
the Change of Control Date to other peer executives of the Company and
its affiliated companies.
(e) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive.
(f) Fringe Benefits. During the Employment Period, the
Executive shall be entitled to continue to receive all fringe benefits,
including, without limitation, tax and financial planning services,
payment of club dues, and, if applicable, use of an automobile and
payment of related expenses, in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive at any time during the
Employment Period.
(g) Vacation. During the Employment Period, the Executive
shall be entitled to four weeks paid vacation to be taken at the
discretion of the Executive.
4. Termination of Employment During the Employment Period.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Employment Period.
If the Company determines in good faith that the Disability of the
Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive
written notice in accordance with Section 16(b) of this Agreement of its
intention to terminate the Executive's employment. In such event, the
Executive's employment with the Company shall terminate effective on the
30th day after receipt of such notice by the Executive (the "Disability
Effective Date"), provided that, within the 30 days after such receipt,
the Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive from the Executive's duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or
one of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive
by the Board of Directors of the Company which specifically
identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties,
or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct which, in either event, is materially
and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best interests
of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the
best interests of the Company. The cessation of employment of the
Executive shall not be deemed to be for Cause unless and until there
shall have been delivered to the Executive a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Executive
and the Executive is given an opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of the
Board, the Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof in detail.
5. Change of Control. For the purpose of this Agreement,
a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 5; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination;
or
(d) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
6. Termination of Employment by Executive for Good Reason.
Provided that a Change of Control shall have theretofore occurred, the
Executive may terminate his employment with the Company for Good Reason.
For purposes of this Agreement, "Good Reason" shall mean:
(a) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position as
Chairman of the Board, President and Chief Executive Officer or
any other action by the Company which results in a diminution in
such position, authority, duties or responsibilities, excluding
for this purpose an isolated, insubstantial and inadvertent action
not taken in bad faith and which is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(b) any reduction in the Executive's Annual Base Salary as
in effect immediately prior to the Change of Control Date, or if
higher, the Executive's highest Annual Base Salary at any time
after the Change of Control Date;
(c) any reduction in any of the benefits provided the
Executive pursuant to Sections 3(b), 3(c), 3(d), 3(e), 3(f) and
3(g) hereof, as in effect immediately prior to the Change of
Control Date, or, if higher, as in effect at any time after the
Change of Control Date, other than an isolated, insubstantial and
inadvertent reduction not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(d) the Company's requiring the Executive to be based at
any office or location more than 50 miles from the location where
the Executive was employed immediately prior to the Change of
Control Date, or the Company's requiring the Executive to travel
on Company business to a substantially greater extent than
required immediately prior to the Change of Control Date;
(e) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement; or
(f) any failure by the Company to comply with and satisfy
Section 15(c) of this Agreement.
For purposes of this Section 6, any good faith determination of "Good
Reason" made by the Executive shall be conclusive. Anything in this
Agreement to the contrary notwithstanding, upon a Change of Control
which results in any "person" (as such term is used in Sections 13(d)
and 14(d) of the Exchange Act) becoming the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing forty percent (40%) or more of
the combined voting power of the then outstanding securities of the
Company, the Executive's employment may be terminated by the Executive,
by written notice to the Company, stating the effective date of such
termination and any such termination by the Executive shall be deemed to
be a termination for Good Reason for all purposes of this Agreement.
7. Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by
a Notice of Termination to the other party hereto given in accordance
with Section 16(b) of this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
8. Date of Termination. "Date of Termination" means (i) if
the Executive's employment is terminated by the Company for Cause, or by
the Executive for Good Reason, the date of receipt of the Notice of
Termination or such later date specified therein (which shall not be
more than 30 days after the giving of such notice), as the case may be,
(ii) if the Executive's employment is terminated by the Company other
than for Cause or death or Disability, the Date of Termination shall be
the date on which the Company notifies the Executive of such termination
and (iii) if the Executive's employment is terminated by reason of death
or Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
9. Obligations of the Company upon Termination. (a) Good
Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive's
employment other than for Cause or death or Disability or the Executive
shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in
cash within 30 days after the Date of Termination the aggregate of
the following amounts:
A. the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not
theretofore paid, (2) the bonus amount, at the "maximum
level" of bonus opportunity approved by the Compensation
Committee for the then fiscal year, under and pursuant to
the Company's Management Incentive Plan (or any successor
plan), but only to the extent not theretofore paid, and (3)
any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid (the sum of the amounts described in
clauses (1), (2), and (3) shall be hereinafter referred to
as the "Accrued Obligations"); and
B. provided that the Executive's employment is
terminated after a Change of Control, the amount equal to
the product of (1) 2.5 and (2) the sum of (x) the
Executive's Annual Base Salary in effect immediately prior
to the Change of Control Date and (y) the average of the
bonus awards paid to the Executive under the Company's
Management Incentive Plan for and with respect to the three
completed fiscal years of the Company immediately preceding
the Change of Control Date; and
(ii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy
or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement, other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive's estate
or beneficiary, as applicable, in a lump sum in cash within 30 days
after the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 9(b) shall
include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs,
practices and policies relating to death benefits, if any, as in effect
with respect to other peer executives and their beneficiaries at any
time during the Employment Period.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall continue in full force and effect, except
that the right of the Executive to hold the positions set forth in
Section 1 hereof, and the obligation of the Executive to perform the
duties associated therewith, shall end, and the Company, during the
balance of the Employment Period (i) shall pay the Executive his Annual
Base Salary (in the amount in effect immediately prior to the Disability
Effective Date), reduced only by any amounts received by the Executive
under any Company provided plan, policy or practice designed solely to
provide disability income, and (ii) shall continue to provide the
Executive with the rights and benefits contemplated by Sections 3(b)
through 3(f) hereof, inclusive, without regard to whether the Executive
is or continues to be an employee of the Company for purposes of any
such plan, benefit or right.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) his
Annual Base Salary through the Date of Termination, (ii) the amount of
any compensation previously deferred by the Executive, and (iii) Other
Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other
Benefits. In either such case, all Accrued Obligations shall be paid to
the Executive in a lump sum in cash within 30 days of the Date of
Termination.
(e) In the event of a Change of Control, to provide
security to the Executive for the payment of any amount payable by the
Company to the Executive under this Agreement, the Company shall
purchase, at its sole cost and expense, within ten days following the
Change of Control Date, and effective as of the Change of Control Date,
an annuity contract (the "Annuity Contract") from a nationally
recognized insurance company, which will obligate such insurance company
to pay unconditionally to the Executive, or his legal representatives,
beneficiaries or estate, in a lump sum payment, on or before the date
described in the following paragraph, the amount determined and
calculated in accordance with the provisions of this Agreement;
provided, however, that the Company shall have no obligation to
purchase, and shall not, without the Executive's consent, so purchase
the Annuity Contract until and unless the Company or the Executive shall
have received either:
(i) a favorable ruling from the Internal Revenue Service to the
effect that neither the purchase, issuance or the making of
any payment or payments to the Executive under the Annuity
Contract shall result in the receipt, "constructive" or
otherwise, by the Executive of any amount or payment
contemplated or provided for in this Section 9(e) or in the
Annuity Contract which would be includable in the gross
income of the Executive for Federal income tax purposes
until the date that the Executive actually receives such
lump sum payment under the Annuity Contract; or
(ii) an opinion of tax counsel selected by independent auditors
for the Company and acceptable to the Executive, that
neither the purchase, issuance or the making of any payment
or payments to the Executive under the Annuity Contract
shall result in the receipt, "constructive" or otherwise, by
the Executive of any amount or payment contemplated or
provided for in this Section (e) or in the Annuity Contract
which would be includable in the gross income of the
Executive for Federal income tax purposes until the date
that the Executive actually receives such lump sum payment
under the Annuity Contract.
In the event the employment of the Executive is terminated
other than for Cause, death or Disability pursuant to the provisions of
this Agreement, the Executive shall so advise the insurance company
which issued the Annuity Contract, by written notice, mailed by United
States registered mail, return receipt requested, postage prepaid, to
such insurance company; and the insurance company which issued the
Annuity Contract shall unconditionally pay to the Executive or his legal
representatives, beneficiaries or estate, in a lump sum payment, within
20 days following the date that the Executive mails such written notice
to such insurance company the full amount due the Executive pursuant to
this Agreement.
The obligations of the Company to pay to the Executive the
amounts payable by the Company to the Executive under this Agreement,
shall be satisfied to the extent of any payments made to the Executive
under the Annuity Contract. To the extent that any amount payable to
the Executive under such Annuity Contract is not paid to the Executive
in full on the date due, the obligation of the Company to pay to the
Executive the amounts payable by the Company under this Agreement, shall
continue in full force and effect.
10. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive
may qualify, nor shall anything herein limit or otherwise affect such
rights as the Executive may have under any other contract or agreement
with the Company or any of its affiliated companies. Amounts which are
vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance
with such plan, policy, practice or program or contract or agreement
except as explicitly modified by this Agreement.
11. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall
the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not
be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
12. Certain Additional Payments and Acts by the Company.
(a) Anything in either this Agreement or in any other agreement or plan
to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section
12) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Executive shall be entitled
to receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including,
without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payments. If any other agreement
between the Executive and the Company provides for payments by the
Company similar in nature to the Gross-Up Payment provided for in this
Section 12(a), and the Executive receives such similar payments under
such other agreement, then the Gross-Up Payment otherwise required
hereunder shall be reduced to the extent necessary to avoid duplication
of the benefit intended to be conferred upon the Executive by the making
of a Gross-Up Payment pursuant to this Agreement.
(b) Subject to the provisions of Section 12(c), all
determinations required to be made under this Section 12, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by KPMG Peat Marwick or such other
certified public accounting firm as may be designated by the Executive
(the "Accounting Firm"), which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, the
Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 12, shall
be paid by the Company to the Executive within five days of the receipt
of the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As
a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to Section 12(c)
and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 20
business days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Executive shall not
pay such claim prior to the expiration of the 30-day period following
the date on which the Executive gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 12(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and
sue for a refund, the Company shall advance the amount of such payment
to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax
or income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 12(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company's complying with the requirements of
Section 12(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 12(c), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such
advance shall be forgiven and shall not be required to be repaid and the
amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
13. Retirement Benefits.
(a) Definitions.
For purpose of this Section 13 only, the following terms
shall have the meanings set forth below:
"Actuarial Equivalent" shall mean a benefit of equivalent
value when computed on the basis of mortality and interest rate
assumptions recommended by the Actuary and approved by the Vice
President - Finance and Chief Financial Officer or the Vice President
and Controller of the Company.
"Date of Disablement" shall mean the last day of employment
preceding the total and permanent disability of the Executive as
determined by Subsection 13(h)(i) hereof.
"Disability Retirement Benefit" shall mean the benefit
provided for in Section 13(h) hereof.
"Early Retirement Benefit" shall mean the benefit computed
in accordance with the provisions of Section 13(e) hereof.
"ERP" shall mean the Employee's Retirement Plan of the
Company, as amended, and each successor or replacement salaried
employee's retirement plan.
"ERP Retirement Benefit" shall mean the aggregate benefit
payable to the Executive pursuant to ERP by reason of his termination of
employment with the Company and all affiliates for any reason.
"MBP" shall mean the Management Benefit Plan of the Company.
"Normal Retirement Date" shall mean the first day of the
month coinciding with or next following the Executive's 65th birthday.
"Supplemental Retirement Benefit" shall mean the benefit
payable to the Executive pursuant to Section 13(b) hereof by reason of
his termination of employment with the Company and all affiliates for
any reason.
(b) Supplemental Retirement Benefit. The Supplemental
Retirement Benefit payable to the Executive in the form of a straight
life annuity over the lifetime of the Executive, commencing on his
Normal Retirement Date, shall be a monthly amount equal to the amount by
which (i) below exceeds the sum of (ii) and (iii) below:
(i) the monthly amount of the ERP Retirement Benefit to
which the Executive would have been entitled under ERP if such
benefit were computed as if the Executive were given three years
of credited service on his date of hire with the Company and one
additional year of credited service for each year of vesting
service he accumulates with the Company during his first 12 years
of service with the Company without regard to the limiting effects
of Sections 401(a)(17), 415(b) or 415(e) of the Code;
(ii) the monthly amount of ERP Retirement Benefit actually
payable to the Executive under ERP, and
(iii) the monthly amount payable to the Executive under MBP
because of Code limitations under ERP.
The amounts described in (i), (ii) and (iii) shall be computed as of the
date of termination of employment of the Executive with the Company and
all affiliates in the form of a straight life annuity payable over the
lifetime of the Executive only commencing on his Normal Retirement Date.
(c) Form of Benefit. The Supplemental Retirement Benefit
or the Early Retirement Benefit payable to the Executive shall be paid
in the same form under which the ERP Retirement Benefit is payable to
the Executive.
Any of the benefits provided for in this Section 13 may, at
the discretion of the Company, be paid in any form of Actuarial
Equivalent value.
(d) Commencement of Benefit. Payment of the Supplemental
Retirement Benefit to the Executive shall commence on the same date as
payment of the ERP Retirement Benefit to the Executive commences.
(e) Early Retirement or Termination of Employment. If the
Supplemental Retirement Benefit commences prior to the Executive's
attainment of age 62, the benefits payable to the Executive shall equal
the Supplemental Retirement Benefit times a percentage from the
following table:
Age Benefits Percentage of Supplemental
Commence Retirement Benefit Payable
62 or older 100%
61 98%
60 96%
59 94%
58 90%
57 86%
56 82%
55 78%
(NOTE: Use straight line interpolation for intermediate ages.)
No retirement benefit due the Executive pursuant to this Section 13
shall be payable prior to the attainment of age 55 by the Executive.
(f) Establishment of Trust. A trust may be established by
the Company for the purpose of assisting the Company in fulfilling its
obligations to the Executive in connection with the Supplemental
Retirement Benefit or the Early Retirement Benefit; provided, however,
that the Executive shall have no beneficial rights to any of the assets
in such trust and the assets of the trust shall be available to the
general creditors of the Company.
(g) Change of Control. (i) Notwithstanding any provisions
to the contrary contained in this Section 13, upon the occurrence of a
Change of Control, the fact and the date of which are to be determined
finally and conclusively by the Chief Executive Officer of the Company
or by the Vice President - Finance and Chief Financial Officer of the
Company, to be evidenced by a letter signed by such officer, addressed
and delivered to the Compensation Committee of the Board of Directors,
the Company shall pay or cause to be paid, to the Executive under this
Section 13 in lieu of any other benefits (excluding benefits paid to the
Executive prior to the date of a Change of Control) payable pursuant to
Section 13(b) hereof, automatically and simultaneously, without any
further action, determination or notice of any kind, a lump sum
determined and calculated in accordance with the following subject to
adjustment pursuant to the provisions of this Section 13(g):
A. if, on the date of the Change of Control, the
Executive is not receiving Supplemental Retirement Benefit
under this Section 13, the amount of such immediate lump sum
payment shall be an amount equal to the present value of the
Supplemental Retirement Benefit which would be payable with
respect to the Executive under this Section 13 if his
termination of employment occurred on the Change of Control
Date (or on his Date of Termination, if earlier) and the
Executive commenced receiving his Supplemental Retirement
Benefit upon his attainment of age 55 (or, if he attained
age 55 prior to the Change of Control Date, if he commenced
receiving his Supplemental Retirement Benefit immediately
following said date); and
B. if, on the Change of Control Date, the Executive
is receiving Supplemental Retirement Benefit under this
Section 13, the amount of such immediate lump sum payment
shall be an amount equal to the present value of the
remaining Supplemental Retirement Benefit payable with
respect to the Executive (including both benefits to be paid
during his lifetime and benefits, if any, payable following
his death); and
C. present values under A. and B. shall be determined
utilizing the immediate annuity discount rate and the
mortality rates of the Pension Benefit Guaranty Corporation
or any successor corporation ("PBGC") applicable to pension
plans terminating on the Change of Control Date.
(ii) If a Change in Control occurs and both the Chief
Executive Officer of the Company and the Vice President and Chief
Financial Officer of the Company fail, for any reason whatsoever, to
sign, address and deliver to the Compensation Committee of the Board of
Directors the letter described above in this Section 13(g), such failure
shall not affect in any manner the obligation of the Company or the full
right, title and interest of the Executive to receive from the Company
the full amount of the lump sum payment determined and calculated in
accordance with the foregoing provisions of this Section 13(g), subject
to adjustment pursuant to the gross-up provisions of Section 12 hereof,
and the entitlement of the Executive to receive such sum from the
Company shall be valid and enforceable by the Executive in any state or
federal court having jurisdiction thereof.
(h) Disability Retirement Benefit. (i) If the Executive
retires after January 1, 1989 due to becoming totally and permanently
disabled as hereinafter determined, the Executive shall, if such total
and permanent disability continues uninterruptedly, be eligible to
receive the Disability Retirement Benefit commencing on the first day of
any month following the Executive's 55th birthday, but not later than
the Normal Retirement Date, as selected by the Executive subject to the
following rules:
A. For the purposes of this Section 13(h), the
Executive shall be deemed totally and permanently disabled
(defined herein as "Disability") only when there shall be
delivered to the Company the written opinion of a reputable,
licensed physician or physicians, approved by the Company,
that on account of the sickness, accident, ill health or
other physical or mental disability, the Executive is, in
the opinion of such physician or physicians, so disabled as
to totally prevent the Executive from performing and
discharging the duties of any gainful employment and that
such disability is likely to be permanent. In lieu of such
written opinion, the Company may accept or require, as proof
of such total and permanent disability, evidence of the
Executive's eligibility for disability benefits under the
Federal Social Security Act. In determining Disability
under this Section 13(h), the Company will utilize the same
procedures and practice as used by the Company in
administering the disability provisions of ERP and MBP.
B. If the Executive shall become totally and
permanently disabled on account of a self-inflicted injury,
ailment or condition incurred in the Armed Forces of the
United States or in employment of an employer other than the
Company or any of its affiliated companies, the Executive
shall not be entitled to the Disability Retirement Benefit
hereunder.
C. The Company shall have the right from time to time
as it may reasonably determine to require the Executive to
submit to a physical examination by a physician selected by
it and to require submission of such other proof of
continued disability as it may reasonably require.
D. If a long term disability insurance program is
maintained by the Company covering the Executive, the
Company may act and rely upon the proofs and forms submitted
under such insurance program in satisfaction of the
requirements of this Section 13(h).
(ii) The monthly amount of the Disability Retirement
Benefit shall be an amount equal to the Supplemental Retirement Benefit
calculated as provided in Section 13(b), as of the Date of Disablement
as if the Executive had continued to be employed by the Company for the
period ending with the date Disability Retirement Benefit commences or
the Date of Disablement, whichever produces the higher amount, and
multiplied by a factor based upon the Executive's attained age at the
date Disability Retirement Benefit is to commence as set forth in this
Section 13(h). Any amounts payable to the Executive under this Section
13(h) shall be inclusive of any insured amounts provided to the
Executive other than the group term disability program maintained by the
Company.
(iii) The basic form of Disability Retirement Benefit shall
be a pension payable monthly for the lifetime of the Executive, with the
first such monthly payment to be due on the date selected by the
Executive as set forth above in this Section 13(h) and the last such
payment to be that due on the first day of the month in which the
Executive's death shall occur.
In lieu of the basic form of Disability Retirement Benefit,
the Executive may elect to convert the Disability Retirement Benefit
into an Actuarial Equivalent form of payment; provided however that if
the Executive has a spouse at the Date of Disablement, the Executive
shall be deemed to have selected a joint and survivor annuity on the
date the Disability Retirement Benefit commences unless the Executive
and his spouse explicitly elect to the contrary, in the presence of a
member or agent of the Company, or a notary public.
(i) Spouse Benefit. (i) If the Executive dies on or after
the date that the Executive attains age 55 and is survived by a spouse,
it shall be assumed that the Executive retired on the first day of the
month in which the Executive's death occurred, and that the Company had
approved a conversion of the life annuity to a joint and survivor
option, with the surviving spouse as joint annuitant, provided for 100%
continuation of income to the surviving spouse. The income to the
Executive's surviving spouse shall commence on the first day of the
month following the Executive's death.
(ii) If the Executive dies after 5 years of deemed service
pursuant to Section 13(b)(i) but prior to age 55 and is survived by a
spouse, a benefit shall be calculated under Section 13(b), based on
deemed service to date of death, and it shall be assumed that an amount
equivalent to this benefit would have commenced on the first day of the
month following the date the Executive would have attained age 55, such
survivor benefit shall be payable as a life only annuity to the
Executive's surviving spouse commencing on the first day of the month
following the date that the Executive would have attained age 55.
(j) No Effect on Employment Rights. Nothing contained in
this Section 13 will confer upon the Executive the right to be retained
in the service of the Company beyond the rights otherwise contained in
this Employment Agreement nor limit any additional right of the Company
to discharge or otherwise deal with the Executive without regard to the
existence of this Section 13.
(k) Spendthrift Provision. No benefit payable under this
Section 13 shall be subject in any manner to anticipation, alienation,
sale, transfer, assignment, pledge, encumbrance, or charge prior to
actual receipt thereof by the payee; and any attempt so to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge prior to
such receipt shall be void; and the Company shall not be liable in any
manner for or subject to the debts, contracts, liabilities, engagements
or torts of any person entitled to any benefit under this Section 13.
(l) Credited Service - Management Benefit Plan. Effective
as of November 18, 1988, pursuant to Section 3.3 of the MBP, the
Executive is credited with nine years of vesting service under MBP, such
nine years being the number of years of service of the Executive with
the Beatrice Companies, Inc."
14. Confidential Information. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all non-public,
confidential or proprietary information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by
the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 14 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
15. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not
be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
16. Miscellaneous. (a) This Agreement shall be governed
by and construed in accordance with the laws of the State of Minnesota,
without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Mr. Anthony Luiso, Chairman of the Board,
President and Chief Executive Officer
International Multifoods Corporation
33 South Sixth Street
P.O. Box 2942
Minneapolis, MN 55402
If to the Company:
International Multifoods Corporation
33 South Sixth Street
P.O. Box 2942
Minneapolis, MN 55402
Attention: General Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 6 of this Agreement,
shall not be deemed to be a waiver of such provision or right or any
other provision or right of this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of
Directors, the Company has caused this Agreement to be executed in its
name on its behalf, all as of the day and year first above written.
Anthony Luiso
Anthony Luiso
International Multifoods Corporation
By Robert F. Maddocks
Robert F. Maddocks,
Vice President - Human Resources
Exhibit 10.2
REVISED AND RESTATED SEVERANCE AGREEMENT
AGREEMENT by and between International Multifoods
Corporation, a Delaware corporation (the "Company") and _________
_________ (the "Executive"), dated as of the ___ day of _______, 1993.
WHEREAS, the Board of Directors of the Company (the
"Board"), has heretofore determined that it is in the best interests of
the Company and its stockholders to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined
below) of the Company;
WHEREAS, the Board determined it is imperative to diminish
the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of
Control and to encourage the Executive's full attention and dedication
to the Company currently and in the event of any threatened or pending
Change of Control;
WHEREAS, to provide the Executive with compensation and
benefits arrangements upon a Change of Control which ensure that the
compensation and benefits to be paid to the Executive are at least as
favorable as those in effect at the time of the Change of Control and
which are competitive with those of other corporations the Company and
the Executive entered into a Severance Agreement dated as of
______________ (the "Prior Severance Agreement"); and
WHEREAS, the Board of Directors has determined that the
Prior Severance Agreement should be amended in certain non-material
respects, to more effectively achieve the intent of the parties thereto
by, among other things, clarifying the definition of "Change of Control"
and modifying the calculation of any payment made to the Executive as a
result of any tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code").
NOW, THEREFORE, IT IS HEREBY AGREED THAT THE PRIOR SEVERANCE
AGREEMENT IS HEREBY AMENDED AND RESTATED IN ITS ENTIRETY TO READ AS
FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall
mean the first date during the Change of Control Period (as defined in
Section 1(b)) on which a Change of Control (as defined in Section 2)
occurs. Anything in this Agreement to the contrary notwithstanding, if
a Change of Control occurs and if the Executive's employment with the
Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of
Control, then for all purposes of this Agreement the "Effective Date"
shall mean the date immediately prior to the date of such termination of
employment.
(b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on the second anniversary of
the date hereof; provided, however, that commencing on the date one year
after the date hereof, and on each annual anniversary of such date (such
date and each annual anniversary thereof shall be hereinafter referred
to as the "Renewal Date"), unless previously terminated, the Change of
Control Period shall be automatically extended so as to terminate two
years from such Renewal Date, unless at least 60 days prior to the
Renewal Date the Company shall give notice to the Executive that the
Change of Control Period shall not be so extended.
2. Change of Control. For the purpose of this Agreement,
a "Change of Control" shall mean:
(a) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (i) the then outstanding
shares of common stock of the Company (the "Outstanding Company Common
Stock") or (ii) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided,
however, that for purposes of this subsection (a), the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2; or
(b) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 60% of,
respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in substantially
the same proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Common Stock and
Outstanding Company Voting Securities, as the case may be, (ii) no
Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively,
the then outstanding shares of common stock of the corporation resulting
from such Business Combination or the combined voting power of the then
outstanding voting securities of such corporation except to the extent
that such ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of the
Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business Combination;
or
(d) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
3. Employment Period. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby agrees to
remain in the employ of the Company, subject to the terms and conditions
of this Agreement for the period commencing on the Effective Date and
ending on the second anniversary of such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i)
During the Employment Period, (A) the Executive's position (including
status, offices, titles and reporting requirements), authority, duties
and responsibilities shall be at least commensurate in all material
respects with those held, exercised and assigned immediately preceding
the Effective Date and (B) the Executive's services shall be performed
at the location where the Executive was employed immediately preceding
the Effective Date or any office or location less than 50 miles from
such location.
(ii) During the Employment Period, and excluding any
periods of vacation or sick leave to which the Executive is entitled,
the Executive agrees to devote reasonable attention and time during
normal business hours to the business and affairs of the Company and, to
the extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for the
Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or teach
at educational institutions and (C) manage personal investments, so long
as such activities do not significantly interfere with the performance
of the Executive's responsibilities as an employee of the Company in
accordance with this Agreement. It is expressly understood and agreed
that to the extent that any such activities have been conducted by the
Executive prior to the Effective Date, the continued conduct of such
activities (or the conduct of activities similar in nature and scope
thereto) subsequent to the Effective Date shall not thereafter be deemed
to interfere with the performance of the Executive's responsibilities to
the Company.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Executive shall receive an annual base salary ("Annual Base
Salary"), which shall be paid, in semi-monthly installments, equal to
the higher of (a) the annual base salary paid or payable, including any
base salary which has been earned but deferred, to the Executive by the
Company and its affiliated companies immediately preceding the month in
which the Effective Date occurs, or (b) the annual base salary paid or
payable, including any base salary which has been earned but deferred,
to the Executive by the Company and its affiliated companies during the
Employment Period. During the Employment Period, the Annual Base Salary
shall be reviewed no more than 15 months after the last salary increase
awarded to the Executive prior to the Effective Date and thereafter at
least every 15 months. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.
(ii) Annual Bonus. During the Employment Period, the
Executive shall be entitled to participate in, and receive compensation
under and as provided in the Management Incentive Plan of the Company or
any successor plan.
(iii) Incentive, Savings and Retirement Plans.
During the Employment Period, the Executive shall be entitled to
participate in all incentive, savings and retirement plans, practices,
policies and programs applicable generally to other peer executives of
the Company and its affiliated companies, but in no event shall such
plans, practices, policies and programs provide the Executive with
incentive opportunities (measured with respect to both regular and
special incentive opportunities, to the extent, if any, that such
distinction is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than
those provided by the Company and its affiliated companies for the
Executive under such plans, practices, policies and programs as in
effect at any time during the 120-day period immediately preceding the
Effective Date.
(iv) Welfare Benefit Plans. During the Employment
Period, the Executive and/or the Executive's family, as the case may be,
shall be eligible for participation in and shall receive all benefits
under welfare benefit plans, practices, policies and programs provided
by the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Executive with benefits which are less favorable,
in the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date.
(v) Expenses. During the Employment Period, the
Executive shall be entitled to receive prompt reimbursement for all
reasonable expenses incurred by the Executive in accordance with the
most favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during the
120-day period immediately preceding the Effective Date.
(vi) Fringe Benefits. During the Employment Period,
the Executive shall be entitled to fringe benefits, including, without
limitation, tax and financial planning services, payment of club dues,
and, if applicable, use of an automobile and payment of related
expenses, in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for the Executive at any time during the 120-day period
immediately preceding the Effective Date.
(vii) Office and Support Staff. During the
Employment Period, the Executive shall be entitled to an office or
offices of a size and with furnishings and other appointments, and to
exclusive personal secretarial and other assistance, at least equal to
the most favorable of the foregoing provided to the Executive by the
Company and its affiliated companies at any time during the 120-day
period immediately preceding the Effective Date.
(viii) Vacation. During the Employment Period, the
Executive shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and its
affiliated companies as in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies.
5. Termination of Employment. (a) Death or Disability.
The Executive's employment shall terminate automatically upon the
Executive's death during the Employment Period. If the Company
determines in good faith that the Disability of the Executive has
occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to the Executive written notice
in accordance with Section 12(b) of this Agreement of its intention to
terminate the Executive's employment. In such event, the Executive's
employment with the Company shall terminate effective on the 30th day
after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the
Executive's duties. For purposes of this Agreement, "Disability" shall
mean the absence of the Executive from the Executive's duties with the
Company on a full-time basis for 180 consecutive business days as a
result of incapacity due to mental or physical illness which is
determined to be total and permanent by a physician selected by the
Company or its insurers and acceptable to the Executive or the
Executive's legal representative.
(b) Cause. The Company may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially the Executive's duties with the Company or
one of its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive
by the Board or the Chief Executive Officer of the Company which
specifically identifies the manner in which the Board or Chief
Executive Officer believes that the Executive has not
substantially performed the Executive's duties, or
(ii) the willful engaging by the Executive in illegal
conduct or gross misconduct which, in either such case, is
materially and demonstrably injurious to the Company.
For purposes of this provision, no act or failure to act, on the part of
the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without reasonable
belief that the Executive's action or omission was in the best interests
of the Company. Any act, or failure to act, based upon authority given
pursuant to a resolution duly adopted by the Board or upon the
instructions of the Chief Executive Officer or a senior officer of the
Company or based upon the advice of counsel for the Company shall be
conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company. The
cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive
a copy of a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board at a meeting
of the Board called and held for such purpose (after reasonable notice
is provided to the Executive and the Executive is given an opportunity,
together with counsel, to be heard before the Board), finding that, in
the good faith opinion of the Board, the Executive is guilty of the
conduct described in subparagraph (i) or (ii) above, and specifying the
particulars thereof in detail.
(c) Good Reason. The Executive's employment may be
terminated by the Executive during the Employment Period for Good
Reason. For purposes of this Agreement, "Good Reason" shall mean:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties or responsibilities as contemplated by Section
4(a) of this Agreement, or any other action by the Company which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any (A) reduction in the Executive's Annual Base
Salary as in effect immediately prior to the Effective Date, or,
if higher, the Executive's highest Annual Base Salary at any time
during the Employment Period or (B) failure by the Company to
comply with any of the provisions of Section 4(b)(ii) through
(vii) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is
remedied by the Company promptly after receipt of notice thereof
given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than as provided in Section
4(a)(i)(B) hereof or the Company's requiring the Executive to
travel on Company business to a substantially greater extent than
required immediately prior to the Effective Date;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement; or
(v) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) Notice of Termination. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance with
Section 12(b) of this Agreement. For purposes of this Agreement, a
"Notice of Termination" means a written notice which (i) indicates the
specific termination provision in this Agreement relied upon, (ii) to
the extent applicable, sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt
of such notice, specifies the termination date (which date shall be not
more than 30 days after the giving of such notice). The failure by the
Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company,
respectively, from asserting such fact or circumstance in enforcing the
Executive's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or
by the Executive for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the date
on which the Company notifies the Executive of such termination and
(iii) if the Executive's employment is terminated by reason of death or
Disability, the Date of Termination shall be the date of death of the
Executive or the Disability Effective Date, as the case may be.
6. Obligations of the Company upon Termination. (a) Good
Reason; Other Than for Cause, Death or Disability. If, during the
Employment Period, the Company shall terminate the Executive's
employment other than for Cause or Disability or the Executive shall
terminate employment for Good Reason:
(i) the Company shall pay to the Executive in a lump
sum in cash within 30 days after the Date of Termination the
aggregate of the following amounts:
A. the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not
theretofore paid, (2) bonus amount to which the Executive is
entitled pursuant to the Company's Management Incentive Plan
(or any successor plan), but only to the extent not
theretofore paid and (3) any compensation previously
deferred by the Executive (together with any accrued
interest or earnings thereon) and any accrued vacation pay,
in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1), (2), and (3) shall be
hereinafter referred to as the "Accrued Obligations"); and
B. the amount equal to the product of (1) 2.5 and (2) the
sum of (x) the Executive's Annual Base Salary in effect
immediately prior to the Effective Date and (y) the average
of the bonus awards paid to the Executive under the
Management Incentive Plan of the Company for and with
respect to the three fiscal years of the Company immediately
preceding the Change of Control; provided, however, if the
Executive has been employed by the Company for less than
three fiscal years as of the Change of Control, and has
received less than three bonus awards, the average of the
bonus awards under the Management Incentive Plan of the
Company, or any successor plan, for such shorter period
shall be determined by dividing the total of the bonus
awards paid to the Executive by the number of fiscal years
of the Company (with any portion of such fiscal year to be
treated as a full fiscal year for the purpose of determining
the denominator) during which the Executive was a
participant in the Management Incentive Plan, but excluding
the fiscal year in which the Change of Control occurs; and
C. all amounts to which the Executive is entitled pursuant
to the Company's Management Benefit Plan (or any successor
plan), but only to the extent not theretofore paid;
(ii) to the extent not theretofore paid or provided, the
Company shall timely pay or provide to the Executive any other
amounts or benefits required to be paid or provided or which the
Executive is eligible to receive under any plan, program, policy
or practice or contract or agreement of the Company and its
affiliated companies (such other amounts and benefits shall be
hereinafter referred to as the "Other Benefits").
(b) Death. If the Executive's employment is terminated by
reason of the Executive's death during the Employment Period, this
Agreement shall terminate without further obligations to the Executive's
legal representatives under this Agreement, other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Executive's estate
or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b) shall
include, without limitation, and the Executive's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs,
practices and policies relating to death benefits, if any, as in effect
with respect to other peer executives and their beneficiaries at any
time during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive's estate and/or the Executive's
beneficiaries, as in effect on the date of the Executive's death with
respect to other peer executives of the Company and its affiliated
companies and their beneficiaries.
(c) Disability. If the Executive's employment is
terminated by reason of the Executive's Disability during the Employment
Period, this Agreement shall terminate without further obligations to
the Executive, other than for payment of Accrued Obligations and the
timely payment or provision of Other Benefits. Accrued Obligations
shall be paid to the Executive in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(c) shall
include, and the Executive shall be entitled after the Disability
Effective Date to receive, disability and other benefits at least equal
to the most favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating to
disability, if any, as in effect generally with respect to other peer
executives and their families at any time during the 120-day period
immediately preceding the Effective Date.
(d) Cause; Other than for Good Reason. If the Executive's
employment shall be terminated for Cause during the Employment Period,
this Agreement shall terminate without further obligations to the
Executive other than the obligation to pay to the Executive (i) his
Annual Base Salary through the Date of Termination, (ii) the amount of
any compensation previously deferred by the Executive, and (iii) Other
Benefits, in each case to the extent theretofore unpaid. If the
Executive voluntarily terminates employment during the Employment
Period, excluding a termination for Good Reason, this Agreement shall
terminate without further obligations to the Executive, other than for
Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the
Executive in a lump sum in cash within 30 days of the Date of
Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement
shall prevent or limit the Executive's continuing or future
participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive
may qualify, nor, subject to Section 12(f), shall anything herein limit
or otherwise affect such rights as the Executive may have under any
contract or agreement with the Company or any of its affiliated
companies. Amounts which are vested benefits or which the Executive is
otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to the Date of Termination shall
be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall
the Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the Executive
under any of the provisions of this Agreement and such amounts shall not
be reduced whether or not the Executive obtains other employment. The
Company agrees to pay as incurred, to the full extent permitted by law,
all legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the
Company, the Executive or others of the validity or enforceability of,
or liability under, any provision of this Agreement or any guarantee of
performance thereof (including as a result of any contest by the
Executive about the amount of any payment pursuant to this Agreement),
plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.
9. Certain Additional Payments by the Company.
(a) Anything in either this Agreement or in any other agreement or plan
to the contrary notwithstanding, in the event it shall be determined
that any payment or distribution by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, but determined
without regard to any additional payments required under this Section 9)
(a "Payment") would be subject to the excise tax imposed by Section 4999
of the Code or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments. If any other agreement between
the Executive and the Company provides for payments by the Company
similar in nature to the Gross-Up Payment provided for in this Section
9(a), and the Executive receives such similar payments under such other
agreement, then the Gross-Up Payment otherwise required hereunder shall
be reduced to the extent necessary to avoid duplication of the benefit
intended to be conferred upon the Executive by the making of a Gross-Up
Payment pursuant to this Agreement.
(b) Subject to the provisions of Section 9(c), all
determinations required to be made under this Section 9, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by KPMG Peat Marwick or such other
certified public accounting firm as may be designated by the Executive
(the "Accounting Firm") which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a
Payment, or such earlier time as is requested by the Company. In the
event that the Accounting Firm is serving as accountant or auditor for
the individual, entity or group effecting the Change of Control, the
Executive shall appoint another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall
then be referred to as the Accounting Firm hereunder). All fees and
expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 9, shall be
paid by the Company to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by the
Accounting Firm shall be binding upon the Company and the Executive. As
a result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"),
consistent with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to Section 9(c)
and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by
the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 20
business days after the Executive is informed in writing of such claim
and shall apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Executive shall not
pay such claim prior to the expiration of the 30-day period following
the date on which it gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such
claim is due). If the Company notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim,
the Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing from time
to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 9(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may,
at its sole option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner, and
the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall determine; provided,
however, that if the Company directs the Executive to pay such claim and
sue for a refund, the Company shall advance the amount of such payment
to the Executive, on an interest-free basis and shall indemnify and hold
the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.
(d) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 9(c), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Company's complying with the requirements of
Section 9(c)) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with
respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the
expiration of 30 days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
10. Confidential Information. The Executive shall hold in
a fiduciary capacity for the benefit of the Company all non-public
confidential and proprietary information, knowledge or data relating to
the Company or any of its affiliated companies, and their respective
businesses, which shall have been obtained by the Executive during the
Executive's employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by
the Executive or representatives of the Executive in violation of this
Agreement). After termination of the Executive's employment with the
Company, the Executive shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to anyone
other than the Company and those designated by it. In no event shall an
asserted violation of the provisions of this Section 10 constitute a
basis for deferring or withholding any amounts otherwise payable to the
Executive under this Agreement.
11. Successors. (a) This Agreement is personal to the
Executive and without the prior written consent of the Company shall not
be assignable by the Executive otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(c) The Company will require any successor (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place. As used in this Agreement, "Company"
shall mean the Company as hereinbefore defined and any successor to its
business and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
12. Miscellaneous. (a) This Agreement shall be governed
by and construed in accordance with the laws of the State of Minnesota,
without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
If to the Company:
International Multifoods Corporation
33 South Sixth Street
P. O. Box 2942
Minneapolis, MN 55402
Attention: General Counsel
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any
other provision of this Agreement.
(d) The Company may withhold from any amounts payable under
this Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Executive's or the Company's failure to insist upon
strict compliance with any provision of this Agreement or the failure to
assert any right the Executive or the Company may have hereunder,
including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to Section 5(c)(i)-(v) of this
Agreement, shall not be deemed to be a waiver of such provision or right
or any other provision or right of this Agreement.
(f) The Executive and the Company acknowledge that, except
as may otherwise be provided under any other written agreement between
the Executive and the Company, the employment of the Executive by the
Company is "at will" and, prior to the Effective Date, the Executive's
employment may be terminated by either the Executive or the Company at
any time prior to the Effective Date, in which case the Executive shall
have no further rights under this Agreement. From and after the
Effective Date this Agreement shall supersede the Prior Severance
Agreement between the parties with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Executive has hereunto set the
Executive's hand and, pursuant to the authorization from its Board of
Directors, the Company has caused this Agreement to be executed in its
name on its behalf, all as of the day and year first above written.
___________________________________
[Executive]
INTERNATIONAL MULTIFOODS
CORPORATION
By _______________________________
EXHIBIT 10.3
MANAGEMENT INCENTIVE PLAN
OF
INTERNATIONAL MULTIFOODS CORPORATION
Approved by the Board of Directors of International
Multifoods Corporation on March 22, 1991
Amended and Restated as of September 17, 1993
The purpose of the Management Incentive Plan of
International Multifoods Corporation (the "Plan") is to provide
incentive and reward to officers and other key management employees of
International Multifoods Corporation and its subsidiaries who contribute
conspicuously to the success of the corporate enterprise by their
industry, creativity, ability or exceptional service.
Section 1. Definitions
For purposes of the Plan, the following terms have the
meanings set forth below:
"Award Year" means the fiscal year of Multifoods with
respect to which a Bonus Award is granted.
"Board of Directors" means the Board of Directors of
International Multifoods Corporation.
"Bonus Award" means the amount of incentive compensation
granted to a Participant pursuant to Section 3 hereof.
"Committee" means the Compensation Committee of the Board of
Directors or such other committee of directors as may be designated by
the Board of Directors to administer the Plan.
"Incentive Compensation Accrual" has the meaning set forth
in Section 4 hereof.
"MIP Change in Control of Multifoods" has the meaning set
forth in Section 3(e) hereof.
"Multifoods" means International Multifoods Corporation.
"Participant" means any individual, including any officer,
employed on a regular, full-time, salaried basis by Multifoods or any of
its subsidiaries, designated by the Committee pursuant to Section 2
hereof.
Section 2. Participants
During the existence of the Plan, the Committee shall
designate the Participants for each Award Year. The Committee, in
designating Participants, shall give consideration to recommendations
submitted to it by the Chief Executive Officer of Multifoods. The
Committee may delegate authority to the Chief Executive Officer of
Multifoods to designate Participants for a specified Award Year, subject
to the following:
(i) the aggregate amount of Bonus Awards to be granted to
such Participants shall not exceed the amount
determined by the Committee with respect to such Award
Year; and
(ii) the Participants designated by the Chief Executive
Officer of Multifoods shall not be individuals
designated as Participants for such Award Year by the
Committee.
Section 3. Determination of Bonus Awards
(a) The Committee, in the exercise of its discretion, shall
determine (i) the amount of the Bonus Award for each Participant
(subject to the condition that in no event shall the amount of any Bonus
Award exceed one hundred percent (100%) of such Participant's base
annual salary), and (ii) the criteria and/or objectives to be met by the
Participant and/or Multifoods or any of its operating businesses as a
condition to payment of any amounts under the Plan. For purposes of
this Section 3(a), the term "base annual salary" means the annual rate
of the salary being paid by Multifoods and its subsidiaries to an
employee as of the last day of the Award Year, for services rendered
during the Award Year, exclusive of commissions, fringe benefits,
expense allowances, Bonus Awards and other similar payments or benefits.
(b) In determining the Bonus Award for each Participant and
the criteria and/or objectives to be met by the Participant and/or
Multifoods or any of its operating businesses as a condition to payment
of such Bonus Award, the Committee shall also give consideration to
recommendations submitted to it by the Chief Executive Officer of
Multifoods.
(c) Unless the Committee determines otherwise,
(i) the designation of a Participant by the Committee
and/or the establishment of criteria or objectives to
be met by the Participant and/or Multifoods or any of
its operating businesses as a condition to payment of
any amounts under the Plan (A) shall not be deemed to
be the grant of a Bonus Award, and (B) shall not
entitle the Participant to any amount under the Plan,
and
(ii) a Bonus Award shall be deemed to be granted to a
Participant (A) upon determination by the Committee
that all criteria and/or objectives to be met by the
Participant and/or Multifoods or any of its operating
businesses as a condition to payment of such Bonus
Award have been met, and (B) the Committee has
directed payment of the Bonus Award.
(d) Unless the Committee determines otherwise, as a
condition to receiving the payment of a Bonus Award a Participant must
continue in the employ of Multifoods or a subsidiary of Multifoods as of
the date such Bonus Award is granted and payment is authorized by the
Committee. In the event a Participant continues in the employ of
Multifoods or a subsidiary of Multifoods as of the last day of an Award
Year but does not continue in the employ of Multifoods or a subsidiary
of Multifoods on the date Bonus Awards for such Award Year are granted
as a result of disability, death or retirement or for such other reason
acceptable to the Committee, the Committee may, in its discretion,
determine that the Participant is entitled to receive the Bonus Award
which would have otherwise been payable to the Participant if such
Participant had continued in the employ of Multifoods or a subsidiary of
Multifoods as of the date such Bonus Award is granted. In the event a
Participant does not continue in the employ of Multifoods or a
subsidiary of Multifoods as of the last day of an Award Year as a result
of disability, death or retirement or for such other reason acceptable
to the Committee, the Committee may, in its discretion, determine that
the Participant is entitled to receive a prorata portion (through the
date of termination of employment of such Participant) of the Bonus
Award which would have otherwise been payable to the Participant if such
Participant had continued in the employ of Multifoods or a subsidiary of
Multifoods as of the last day of an Award Year and as of the date such
Bonus Award is granted.
(e) Notwithstanding anything to the contrary contained in
the Plan, following an MIP Change in Control of Multifoods, each
Participant shall be entitled to the following immediate payment:
(i) in the event the MIP Change in Control of Multifoods
occurs during the first six months of the Award Year,
100% of the amount of Bonus Award which would have
otherwise been paid to the Participant for the Award
Year in which the MIP Change in Control of Multifoods
occurs, such amount to be determined as if the target
performance objectives required to be met by the
Participant and/or Multifoods or any of its operating
businesses as a condition to payment of a Bonus Award
to the Participant had been met;
(ii) in the event the MIP Change in Control of Multifoods
occurs during the last six months of the Award Year,
100% of the amount of Bonus Award which would have
otherwise been paid to the Participant for the full
Award Year in which the MIP Change in Control of
Multifoods occurs, such amount to be determined based
upon the greater of the following:
(A) an amount determined as if the target performance
objectives required to be met by the Participant
and/or Multifoods or any of its operating
businesses as a condition to payment of a Bonus
Award to the Participant had been met, or
(B) an amount determined based upon the anticipated
results relating to the performance objectives
required to be met by the Participant and/or
Multifoods or any of its operating businesses as
a condition to payment of a Bonus Award to the
Participant for the Award Year in which the MIP
Change In Control of Multifoods;
For purposes of the Plan, the term "MIP Change in Control of
Multifoods" means any one of the following:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (A) the
then outstanding shares of common stock of Multifoods
(the "Outstanding Common Stock") or (B) the combined
voting power of the then outstanding voting securities
of Multifoods entitled to vote generally in the
election of directors (the "Outstanding Voting
Securities"); provided, however, that for purposes of
this subsection (i), the following acquisitions shall
not constitute a MIP Change of Control: (A) any
acquisition directly from Multifoods, (B) any
acquisition by Multifoods, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by Multifoods or any corporation controlled
by Multifoods or (D) any acquisition by any
corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of subsection (iii) of
this sentence; or
(ii) individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for
any reason to constitute at least a majority of the
Board of Directors; provided, however, that any
individual becoming a director subsequent to the date
hereof whose election, or nomination for election by
the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an
actual or threatened election contest with respect to
the election or removal of directors or other actual
or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of
Directors; or
(iii) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of Multifoods (a
"Business Combination"), in each case, unless,
following such Business Combination, (A) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power
of the then outstanding voting securities entitled to
vote generally in the election of directors, as the
case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns
Multifoods or all or substantially all of Multifoods'
assets either directly or through one or more
subsidiaries) in substantially the same proportions as
their ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may be, (B)
no Person (excluding any employee benefit plan (or
related trust) of Multifoods or such corporation
resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such corporation
except to the extent that such ownership existed prior
to the Business Combination and (C) at least a
majority of the members of the board of directors of
the corporation resulting from such Business
Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of
the action of the Board of Directors, providing for
such Business Combination; or
(iv) approval by the shareholders of Multifoods of a
complete liquidation or dissolution of Multifoods.
(f) The Committee, in the exercise of its discretion, shall
also determine whether any Bonus Award shall be paid in a lump sum or in
installments in equal or varying amounts over a period of not more than
five years. Lump sum awards shall be paid to the Participant within
three months after the close of the applicable Award Year. In the case
of installment awards, the first installment shall be paid within three
months after the close of the applicable Award Year, and the remaining
installments shall be paid at the times and in the amounts determined by
the Committee. All remaining installments shall be retained by
Multifoods, pending payment thereof Amounts so retained shall be treated
by Multifoods as if they were the property of Multifoods for all
purposes, and the only liability of Multifoods therefor shall be to pay
cash installments to the Participant when and as they become due in
accordance with the Bonus Award. Unless the Committee determines
otherwise, Multifoods shall not be liable for any interest on any
amounts so retained.
(g) Unless the Committee determines otherwise, if a
Participant granted a Bonus Award payable in installments voluntarily
terminates his or her employment, he or she shall forfeit any remaining
unpaid installments; provided, that when the Committee determines it
would serve the best interests of Multifoods and its subsidiaries, the
Committee may waive the forfeiture in whole or in part. In addition,
the Committee may accelerate payment of unpaid installments. In the
event of termination of employment resulting from death or disability,
or from retirement under circumstances entitling the Participant to
retirement benefits under the Employees' Retirement Plan of Multifoods
or under any retirement plan of Multifoods or of a subsidiary of
Multifoods, the balance of the Bonus Award which remains unpaid at that
time will be paid to the Participant in the same manner as if he or she
were still employed, or, in the event of his or her death, in the same
manner as if he or she were still living. The Committee, in its
discretion, may accelerate such payments in such cases.
Section 4. Incentive Compensation Accrual
Multifoods shall create and maintain an Incentive
Compensation Accrual for each Award Year beginning March 1, 1991 and
thereafter adequate to pay all Bonus Awards for such Award Year, which
Incentive Compensation Accrual shall be accrued during such Award Year
based upon the projected performance of Multifoods and its operating
businesses and/or any other criteria established by the Committee with
respect to Bonus Awards for such Award Year.
Section 5. Payment of Bonus Awards
All Bonus Awards shall be payable in cash and the amount of
all Bonus Awards paid shall be charged to the Incentive Compensation
Accrual.
Section 6. Powers of Committee
The Committee shall have full power and authority to
interpret and administer the Plan. Any decisions, determinations or
actions made or taken by the Committee pursuant to the Plan shall be
final, conclusive and binding on all persons for all purposes.
Section 7. Extension, Amendment or Termination
The Board of Directors shall have the power to suspend or
discontinue the Plan, in whole or in part, at any time, and, from time
to time, to extend, modify, amend or revise the Plan in such respects as
the Board of Directors, by resolution, may deem advisable. The fact
that a director is, has been, or will be, a Participant in the Plan
shall not disqualify him or her from voting as a director for or against
a suspension, discontinuance, extension, modification, amendment or
revision of the Plan or any part thereof.
Section 8. No Right to Continued Employment
Nothing in the Plan or the grant of any Bonus Award shall be
interpreted to confer upon the Participant any right with respect to
continuance of employment by Multifoods or any subsidiary of Multifoods,
nor shall the Plan or the grant of any Bonus Award interfere in any way
with the right of Multifoods or any subsidiary of Multifoods to
terminate the employment of the Participant at any time.
EXHIBIT 10.4
MANAGEMENT BENEFIT PLAN OF
INTERNATIONAL MULTIFOODS CORPORATION
Restated Effective September 17, 1993
MANAGEMENT BENEFIT PLAN OF
INTERNATIONAL MULTIFOODS CORPORATION
SECTION 1.
Declaration
1.1 The Management Benefit Plan of International Multifoods
Corporation was established as of April 1, 1977, and is amended and
restated in this document, as a means of providing retirement and other
benefits to a select group of executives of International Multifoods
Corporation and its consolidated subsidiaries.
1.2 This September 17, 1993 restatement shall apply to
Participants actively employed on or after that date. The March 1, 1990
restatement shall control as to benefits to Participants terminated
prior to September 17, 1993 and on or after March 1, 1990. The July 1,
1987 restatement and prior plan documents shall control as to benefits
to Participants terminated prior to March 1, 1990.
1.3 This Plan has been established and will be maintained as
a non-qualified form of executive deferred compensation, in accordance
with Section 201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement
Income Security Act of 1974.
SECTION 2.
Definitions
2.1 The terms defined in this Section 2 shall, for all
purposes of this Plan, have the meanings herein specified, unless the
context expressly or by necessary implication otherwise requires:
2.1.1 "Accrued Benefit" means the Normal Retirement
Benefits multiplied times a fraction (not to exceed "1.00"), the
numerator of which is equal to the Service of a Participant and
the denominator of which is equal to what that Service would have
been had the Participant remained an active Employee until Normal
Retirement Age.
2.1.2 "Actuary" means an Enrolled Actuary under the
Employee Retirement Income Security Act of 1974, appointed and
compensated by the Company.
2.1.3 "Actuarial Equivalent" means a benefit of
equivalent value when computed on the basis of mortality and
interest rate assumptions recommended by the Actuary and approved
by the Vice President - Finance and Chief Financial Officer or the
Vice President and Controller of the Company.
2.1.4 "Affected Participant" means:
(a) any Participant who is an Employee on the Date of a
Change in Control of the Company except any
Participant who has delivered to the Company, prior to
the Date of Change in Control of the Company, a signed
letter stating that such Participant has elected not
to receive the lump sum payment contemplated and
provided for in Section 5.6 hereof in the event of a
Change in Control of the Company; provided, however,
that any such Participant shall have the right to
withdraw such election by delivering a signed letter
to that effect to the Company at any time prior to the
Date of a change in Control of the Company; and
(b) any Participant who: (i) on the Date of a Change in
Control of the Company is a retired Employee, or a
former Employee who at the time of termination of
employment was vested in the Normal Retirement
Benefit, or the beneficiary of any such retired
Employee or former vested Employee ("Retired
Employee"), and (ii) has delivered to the Company,
prior to the Date of a Change in Control of the
Company, a signed letter electing to receive, upon the
occurrence of a Change in Control of the Company, in
the form of a lump sum, the benefits payable to such
Participant as of the Date of a Change in Control of
the Company; provided, however, that any such
Participant shall have the right to withdraw such
election by delivering a signed letter to that effect
to the Company, at any time prior to the Date of a
Change in Control of the Company.
2.1.5 "Bonus or "Bonuses" means (in U.S. dollars based
on the average currency rates used in translating statements of
earnings into U.S. dollars for the Company's consolidated
financial statements for the fiscal year in which the bonus was
earned, and whether or not deferred or waived as to payment):
(a) the amounts awarded to an Employee under the Management
Incentive Plan of International Multifoods
Corporation, effective as of March 1, 1970, as
amended, and as may be amended from time to time;
(b) the amounts of incentive awards approved by the
Committee awarded to an Employee designated by the
Board of Directors of International Multifoods
Corporation, or by the Committee, as a Participant
under this Plan and also designated by the Committee
as a participant under and pursuant to the Management
Bonus Program - General of International Multifoods
Corporation approved by the Committee for and with
respect to a specific calendar year or fiscal year of
International Multifoods Corporation;
(c) the amounts of incentive awards approved by the
committee awarded to an Employee designated by the
Board of Directors of International Multifoods
Corporation, or by the Committee, as a Participant
under this Plan and also designated by the Committee
as a participant under and pursuant to the Management
Bonus Program of Robin Hood Multifoods Inc., a wholly-
owned subsidiary of International Multifoods
Corporation or the Management Bonus Program of Molinos
Nacionales C.A. ("MONACA"), a Venezuelan subsidiary of
International Multifoods Corporation, approved by the
Committee for and with respect to a specific calendar
or fiscal year of Robin Hood Multifoods Inc. or
Molinos Nacionales C.A. ("MONACA"), respectively, as
applicable; and
(d) the amounts paid as incentive awards to an Employee
designated by the Board of Directors of International
Multifoods Corporation, or by the Committee, as a
Participant under this Plan, employed in a country
other than the United States, Canada or Venezuela, for
and with respect to any designated calendar or fiscal
year, if and to the extent that any such incentive
award is expressly designated by the Committees as a
"Bonus", as that term is defined in and for the
purposes of this Plan.
2.1.6 "Bonus Base" means the average of the highest
five (5) or less Bonuses awarded an Employee during the last ten
(10) years of employment with the Employer. From and after March
1, 1990, but not applicable to Employees who are Participants
before that date, unless the Committee prescribes otherwise, only
bonuses paid while a Participant shall be included in the Bonus
Base.
In calculating Bonus Base, the denominator shall be "5" in all
circumstances.
2.1.7 "Change in Control of the Company" means any one
of the following:
(a) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the Company
(the "Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting securities
of the Company entitled to vote generally in the
election of directors (the "Outstanding Voting
Securities"); provided, however, that for purposes of
this subsection (a), the following acquisitions shall
not constitute a Change of Control of the Company:
(i) any acquisition directly from the Company, (ii)
any acquisition by the Company, (iii) any acquisition
by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any
acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and
(iii) of subsection (c) of this Section 2.1.7; or
(b) individuals who, as of the date hereof, constitute the
Board of Directors of the Company (the "Incumbent
Board") cease for any reason to constitute at least a
majority of the Board of Directors of the Company;
provided, however, that any individual becoming a
director subsequent to the date hereof whose election,
or nomination for election by the Company's
shareholders, was approved by a vote of at least a
majority of the directors then comprising the
Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose
initial assumption of office occurs as a result of an
actual or threatened election contest with respect to
the election or removal of directors or other actual
or threatened solicitation of proxies or consents by
or on behalf of a Person other than the Board of
Directors of the Company; or
(c) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a
"Business Combination"), in each case, unless,
following such Business Combination, (i) all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
Outstanding Common Stock and Outstanding Voting
Securities immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power
of the then outstanding voting securities entitled to
vote generally in the election of directors, as the
case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns
the Company or all or substantially all of the
Company's assets either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Common
Stock and Outstanding Voting Securities, as the case
may be, (ii) no Person (excluding any employee benefit
plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more
of, respectively, the then outstanding shares of
common stock of the corporation resulting from such
Business Combination or the combined voting power of
the then outstanding voting securities of such
corporation except to the extent that such ownership
existed prior to the Business Combination and (iii) at
least a majority of the members of the board of
directors of the corporation resulting from such
Business Combination were members of the Incumbent
Board at the time of the execution of the initial
agreement, or of the action of the Board of Directors
of the Company, providing for such Business
Combination; or
(d) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
2.1.8 "Committee" means the Compensation Committee of
the Board of Directors of International Multifoods Corporation, or
its successor group.
2.1.9 "Company" or "Multifoods" means International
Multifoods Corporation, a Delaware corporation, and its successors
and assigns.
2.1.10 "DICAP" means the Deferred Income Capital
Accumulation Plan for Executives of International Multifoods
Corporation.
2.1.11 "Disabled" or "Disability" means a condition
described in Section 5.3 of this Plan.
2.1.12 "Effective Date" means April 1, 1977.
2.1.13 "Employee" means any person including any
officer, employed on a regular, full-time, salaried basis by the
Employer.
2.1.14 "Employer" means the Company or any of its
subsidiaries.
2.1.15 "Normal Retirement Date" means the first day of
the month coincident with or next following the Participant's
attainment of age sixty-five (65).
2.1.16 "Normal Retirement Benefit" means an annual
income payable for life in an amount equal to 5O% of the Bonus
Base, plus (unless otherwise restored by the Company) the amount
by which the aggregate amount of benefits, calculated on an annual
basis, which a Participant would otherwise have been entitled to
receive under and pursuant to the terms and conditions of the
Employees' Retirement Plan of International Multifoods Corporation
("ERP"), as amended, are reduced as a result of amendments to ERP
to comply with the Internal Revenue Code of 1986, as amended, or
as a result of the direct application of said Code or regulations
applicable thereto. Normal Retirement Benefit shall also include
any ERP reduction caused by a salary deferral, whether under DICAP
or such other deferral or waiver arrangements as may be approved
by the Committee, or any extra benefits approved by the Committee
resulting from a special service award which would, but for its
"qualified plan" status, have been paid under ERP.
2.1.17 "Participant" means an Employee who has been
designated by the Board of Directors of Multifoods, or the
Committee, to participate in this Plan in accordance with the
provision of Section 4 of this Plan.
2.1.18 "Plan" means this Management Benefit Plan, as
originally adopted or, if amended or supplemented or restated, as
so amended or supplemented or restated.
2.1.19 "Service" shall have the respective meaning
specified in Section 3 of this Plan.
SECTION 3.
Service
3.1 Service shall be used to determine vesting under
Section 4.2 of this Plan, and to calculate the Accrued Benefit under
Section 2.1.1.
3.2 "Service" as used in this Plan shall refer to the period
of years and fractions of a year between the most recent date that an
Employee is made a Participant and the first to occur of that Employee's
death, disability, termination of employment or retirement. Employees
who were Participants before March 1, 1990 receive Service credit from
dates of hire, unless specified otherwise by the Committee. Fractions
of a year, for purposes of this Plan, shall be based upon complete
months of employment.
3.3 At the discretion of the Committee, a period of
employment with the Employer prior to the most recent date of hire or
prior to date of participation may be included as Service. Also, at the
discretion of the Committee, an Employee's period of service, or any
part thereof, with a company, of which the assets or stock have been
acquired by the Employer, may be included as Service.
3.4 In no event shall Service exceed twenty-five (25) years.
3.5 Service shall include a leave of absence, but for
purposes of this Plan, such period shall not exceed one (1) year, unless
otherwise determined by the Committee.
SECTION 4.
Eligibility and Vesting
4.1 ELIGIBILITY
4.1.1 Any executive of the Employer shall be eligible
for consideration as a Participant in this Plan.
4.1.2 It shall be the prerogative of the Board of
Directors of Multifoods, or the Committee, to designate an
Employee as a Participant under this Plan. The Board of Directors
of Multifoods, or the Committee, in designating Participants shall
give full consideration to recommendations submitted by the
Chairman of the Board of Directors of Multifoods. Upon such
designation by the Board of Directors of Multifoods, or the
Committee, the Employee shall, subject to the benefit provisions
contained in Section 5 of this Plan, participate in this Plan
based on Service and based on Bonuses awarded to the Employee.
4.1.3 An Employee designated as a Participant under
this Plan will continue as a Participant under this Plan until
death, termination of employment, or until removed from
participation by the Board of Directors of Multifoods, or by the
Committee.
4.2 VESTING
4.2.1 A Participant shall be vested in the Normal
Retirement Benefit at the earliest to occur of the following
events:
(a) the date that the Participant completes ten (10) Years
of Service;
(b) the date that the Participant's attained age in years
and fractions of a year, plus Service in years and
fractions of a year, equals sixty (60); or
(c) the date specified in Section 9.5.
SECTION 5.
Benefits
5.1 NORMAL RETIREMENT
5.1.1 The Normal Retirement Benefit shall commence at
Normal Retirement Age.
5.1.2 The Normal Retirement Benefit may, at the
discretion of the Committee, be payable in a form other than life
income, and may be payable more frequently than annually.
Notwithstanding a change in the form or frequency of payments of
the Normal Retirement Benefit, the value of the payments payable
to the retired Participant shall be the Actuarial Equivalent of
the annual life income.
5.2 EARLY RETIREMENT OR TERMINATION OF EMPLOYMENT
If a Participant who is vested elects to retire or terminate
employment prior to Normal Retirement Age, then in such event, the
retirement benefit due such Participant shall be payable, at the
discretion of the Committee, either on the first day of the month
coincident with or next following the Participant's termination of
employment with the Employer, or at some other date not later than the
Participant's Normal Retirement Age; provided, however, that, except as
specifically provided otherwise herein, no retirement benefit due such
Participant shall be payable prior to the attainment by such Participant
of age fifty-five (55). The retirement benefit due such Participant
shall equal the Normal Retirement Benefit times a percentage from the
following table:
Age Benefits Percentage of Normal
Commence Retirement Benefit Payable
62 or older 100%
61 98%
60 96%
59 .... 94%
58 90%
57 86%
56 82%
55 78%
(NOTE: Use straight line interpolation for intermediate ages.)
5.3 DISABILITY
If the Committee determines that a Participant has become
Disabled, and the Disability occurs prior to the Participant's
attainment of age fifty-five (55) and subsequent to the date such
Participant is vested, as determined in Section 4.2 of this Plan, the
Accrued Benefit shall be payable to the Disabled Participant commencing
as of the date of Disability, as such date is determined by the
Committee. For purposes of this Plan, a Participant shall be delivered
to the Committee the written opinion of a reputable, licensed physician
or physicians, approved by the Committee, stating to the effect that on
account of the sickness, accident, ill health or other physical or
mental disability, such a Participant is, in the opinion of such
physician or physicians, so disabled as totally to prevent the
Participant from performing and discharging the duties of the position
held by the Participant immediately prior to the occurrence of the
Disability, and that such Disability is likely to be permanent.
5.4 SPOUSE BENEFIT
If a Participant dies on or after the date that such
Participant becomes vested or attains age 55 and is survived by a
spouse, it shall be assumed the Participant had terminated or retired on
the first day of the month in which the Participant's death occurred,
and that the Committee had approved a conversion of the life annuity to
a joint and survivor option, with the surviving spouse as joint
annuitant, providing for one hundred percent (100%) continuation of
income to the surviving spouse. The income to the surviving spouse
shall commence on the latest of the following dates:
(i) the first day of the month following the Participant's
death;
(ii) the first day of the month following the date that such
Participant would have attained age 55; or
(iii) the first day of the month following the date that such
Participant's attained age in years and fractions of a
year, plus Service in years and fractions of a year,
equals, or would have equaled, sixty (60).
The Committee may approve an Actuarial Equivalent form of income
payable to the surviving spouse.
5.5 OPTIONS
Any of the benefits provided for in this Plan may, at the
discretion of the Committee, be paid in any form of Actuarial Equivalent
value.
5.6 CHANGE IN CONTROL OF THE COMPANY
Notwithstanding any provisions to the contrary contained in
this Plan, upon the occurrence of a Change in Control of the Company,
the fact and the date ("Date") of which is to be determined finally and
conclusively by the Chief Executive Officer of the Company or by the
Vice-President - Finance and Chief Financial Officer of the Company, to
be evidenced by a letter signed by such officer, addressed and delivered
to the Committee, the Company shall pay, or cause to be paid, to each
Affected Participant under this Plan in lieu of any benefits (excluding
benefits paid to any Affected Participant prior to the date of a Change
in Control of the Company) payable pursuant to Sections 5.1 through 5.4
hereof, automatically and simultaneously, without any further action,
determination or notice of any kind, and whether or not such Affected
Participant is vested under the provisions of Section 4.2.1 hereof, a
lump sum determined and calculated in accordance with the following,
subject to adjustment pursuant to the provisions of Section 3.7 hereof:
(a) if, on the Date of the Change in Control of the
Company, the Affected Participant is an Employee and
is vested in the Normal Retirement Benefit pursuant to
Section 4.2.1 hereof, the amount of such lump sum
payment shall be an amount equal to the greater of the
present value (utilizing the immediate annuity
discount rate and the mortality rates of the Pension
Benefit Guarantee Corporation or any successor
corporation ("PBGC") applicable to qualified pension
plans terminating on the Date of the Change in Control
of the Company) of (i) the Affected Participant's
Normal Retirement Benefit times the applicable
percentage from the following table:
Age of Affected Percentage Applicable
Participant on the to the Affected
Date of the Change in Participant's Normal
Control of the Company Retirement Benefit
62 or older 100%
61 98%
60 96%
59 94%
58 90%
57 86%
56 82%
55 78%
(NOTE: For ages under 55, reduce % by 4 per year; use
straight line interpolation for fractional ages)
and (ii) the Accrued Benefit applicable to such
Affected Participant; or
(b) if, on the Date of the Change in Control of the
Company, the Affected Participant is an Employee but
is not vested in the Normal Retirement Benefit
pursuant to Section 4.2.1 hereof, the Affected
Participant shall be vested in the Accrued Benefit
applicable to such Affected Participant, and the
amount of such lump sum payment shall be an amount
equal to the present value (as determined in (a)
above) of the Accrued Benefit applicable to such
Affected Participant; or
(c) if, on the Date of the Change in Control of the
Company, the Affected Participant is a Retired
Employee, as defined in Section 2.1.4(b) hereof, the
amount of such lump sum payment shall be an amount
equal to the present value (as determined in (a),
above) of the benefits payable to such Affected
Participant as of the Date of the Change in Control of
the Company.
If a Change in Control of the Company occurs and both the Chief
Executive Officer of the Company and the Vice President and Chief
Financial Officer of the Company fail, for any reason whatsoever,
to sign, address and deliver to the Committee the letter described
above in this Section 5.6, such failure shall not affect in any
manner the obligation of the Company or the full right, title and
interest of each Affected Participant under this Plan to receive
from the Company the full amount of the lump sum payment
determined and calculated in accordance with the forgoing
provisions of this Section 5.6, subject to adjustment pursuant to
the provisions of Section 5.7 hereof; and the entitlement of each
Affected Participant to receive such sum from the Company shall be
valid and enforceable by each Affected Participant in any state or
federal court having jurisdiction thereof.
5.7 PARACHUTE PAYMENTS
In the event it shall be determined that any payment by the
Company to or for the benefit of the Participant hereunder determined
without regard to any additional payments required under this Section
5.7 (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended, or any interest
or penalties are incurred by the Affected Participant with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Affected Participant shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after
payment by the Affected Participant of all taxes (including any interest
or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed
with respect thereto) and Excise Tax imposed upon the Gross-Up Payment,
the Affected Participant retains an amount of the Gross-Up Payment equal
to the Excise Tax imposed upon the Payment.
For purposes of these calculations, all applicable amounts
shall be determined by the Company's independent auditors.
SECTION 6.
Liability of Company
6.1 The benefits of this Plan shall be paid by Multifoods or
any of its consolidated subsidiaries or by a trust established by the
Company for this purpose. The amounts of all benefits with respect to
which any and all Participants under the Plan are vested pursuant to the
term and provisions of the Plan, shall be provided for in such manner
and form as shall be approved, from time to time, by the Board of
Directors or the Committee, to assure that funds will be available to
pay all such amounts when due, to vested Participants under the Plan.
6.2 The Company shall establish on its accounting ledgers, or
cause to be established on the accounting ledgers of any consolidated
subsidiary, a reserve for the retirement benefits of each Participant,
based an the Aggregate Cost Method of actuarial valuation and the
actuarial assumptions approved by the Committee on the recommendation of
the Actuary.
6.3 A Participant who is vested in a benefit under this Plan
shall be an unsecured general creditor of the Company as to the payment
of any benefit under the Plan.
SECTION 7.
Administration
7.1 Except for the functions reserved to the Company, the
Board of Directors of the Company, the Chairman of the Board of
Directors of the Company or a trustee, if any, appointed by the Company,
the administration of the Plan shall be the responsibility of the
Committee.
7.2 The Committee shall have the power and the duty to take
all actions necessary and proper to carry out the provisions of this
Plan. The determinations of the Committee shall be final and binding,
unless the Board of Directors of Multifoods modifies or reverses the
determination made by the Committee.
7.3 In administering the Plan, the Committee shall:
(a) designate Participants and furnish them, upon request,
with copies of the Plan;
(b) determine the reserve required under Section 6.2 of the
Plan;
(c) instruct the Company (or trustee, if any) as to
payments to be made under this Plan;
(d) make and enforce such rules and regulations as it shall
deem proper from time to time for the administration
of this Plan;
(e) interpret the Plan to resolve ambiguities,
inconsistencies and omissions, which interpretations
shall be final and binding unless the Board of
Directors of Multifoods modifies or reverses the
interpretation made by the Committee;
(f) determine the amount of benefits payable in accordance
with Section 3 of this Plan; and
(g) take whatever action is necessary in fulfilling the
purposes and intent of this Plan.
7.4 The Committee may appoint a person or persons to act in
the day-to-day administration of the Plan, which person or persons may
or may not be a Participant or a member of the Committee.
7.5 Except in circumstances involving bad faith, no member of
the Committee, the Board of Directors of the Company or the Chairman of
the Board of Directors of the Company, or any person assisting in the
Plan administration, shall be liable, in respect to this Plan, for any
act whether of commission or omission taken by any other member of the
Committee, officer, agent or employee of the Company or any of its
consolidated subsidiaries, or for anything done or omitted to be done by
any member of the Committee, officer, agent or employee of the Company.
Any person claiming under this Plan shall look solely to the Company for
redress.
SECTION 8.
Amendment and Termination
8.1 The Board of Directors of the Company shall have the
power to suspend of terminate this Plan in whole or in part at any time,
and from time to time to extend, modify, amend or revise this Plan in
such respects as the Board of Directors of Multifoods by resolution may
deem advisable; provided that no such extension, modification, amendment
or revision shall deprive a Participant or any beneficiary designated by
a Participant, of the vested portion of any benefit under this Plan.
The fact that a director is, has been, or will be a Participant in this
Plan shall not disqualify such Participant from voting as a director for
or against an extension, discontinuance, modification, amendment or
revision of this Plan or any part thereof.
8.2 The Company intends to continue this Plan indefinitely,
but nevertheless assumes no contractual obligation, other than as
specifically provided herein, beyond the guarantee of the vested
portions of any benefits payable under this Plan.
8.3 If this Plan is Terminated by the Board of Directors of
Multifoods under and pursuant to the provisions of this Section 8, a
Participant who is vested, as determined in Section 4.2.1 or Section 5.6
of this Plan, shall be entitled to any of the benefits provided for in
Section 5 of this Plan; and the bonuses to be taken into account to
compute the Bonus Base for the purposes of this Section 8, shall be the
bonuses awarded to such Participant during the ten (10) year period
immediately preceding the date on which this Plan is terminated.
SECTION 9.
Miscellaneous
9.1 This Plan is not a contract between the Employer and any
Participant or beneficiary, and nothing herein shall affect the right of
the Employer to discharge an Employee.
9.2 Except to the extent required by law, no benefit
hereunder shall be subject to anticipation, alienation, garnishment,
sale, pledge, transfer, encumbrance, judgment or damage. Any attempt at
such may cause the Committee to cancel the benefit, or pay it otherwise
for the use of the Participant or beneficiary.
9.3 If the Committee determines that a person entitled to
benefits hereunder is incompetent, it may cause benefits to be paid to
another person for the use of the Participant or beneficiary, in total
discharge of the Plan's obligations.
9.4 The provisions of the Plan shall be construed and
governed under the laws of the State of Minnesota, unless and except as
preempted by federal law; provided, however, that the provisions of any
trust agreement relating to a trust established for the purpose of
accumulating assets to assist the Company in fulfilling the obligations
of the Company under this Plan shall be construed and under the laws of
the jurisdiction stated in such trust agreement.
9.5 In determining entitlement to benefits and in calculating
the amount of any benefits payable to Participants under this Plan which
are based or predicated upon the Employees' Retirement Plan of the
Company, of the term and conditions (including, without limitations, any
provisions governing vesting and any provisions governing payment
options available to Participants) of the Employees' Retirement Plan of
the Company shall govern and control, except as specifically provided
otherwise in this Plan.
EXHIBIT 10.5
COMPENSATION DEFERRAL PLAN
FOR EXECUTIVES OF
INTERNATIONAL MULTIFOODS CORPORATION
Effective January 1, 1991
Amended and Restated as of
September 17, 1993
COMPENSATION DEFERRAL PLAN
FOR EXECUTIVES OF
INTERNATIONAL MULTIFOODS CORPORATION
Table of Contents
Page
SECTION 1. DECLARATION 1
SECTION 2. DEFINITIONS 2
SECTION 3. ELIGIBILITY, PARTICIPATION AND VESTING 6
SECTION 4. DEFERRALS AND ACCOUNT BALANCES 7
SECTION 5. BENEFIT PAYMENTS 9
SECTION 6. SOURCE OF BENEFITS 11
SECTION 7. ADMINISTRATION 12
SECTION 8. AMENDMENT AND TERMINATION 14
SECTION 9. MISCELLANEOUS 15
COMPENSATION DEFERRAL PLAN
FOR EXECUTIVES OF
INTERNATIONAL MULTIFOODS CORPORATION
SECTION 1
DECLARATION
1.1 The Compensation Deferral Plan for Executives of International
Multifoods Corporation (hereinafter, the "CDP" or "Plan") has been
established as a means for executives of International Multifoods
Corporation to voluntarily and timely defer portions of their Base
Salary and/or annual Bonuses. The Plan is a "non-qualified"
voluntary deferred compensation plan providing benefits to a
select group of management or highly compensated employees.
1.2 The Plan is to some extent a successor to the Deferred Income
Capital Accumulation Plan for Executives of International
Multifoods Corporation ("DICAP"), although as to obligations for
pre-1990 elections not totally fulfilled as of January 1, 1991,
DICAP will continue in its pertinent applicability. CDP will
function independently of DICAP, except as noted in Section 4.3.
SECTION 2
DEFINITIONS
The following terms used in the Plan have the meanings specified below,
unless the context clearly connotes a different meaning.
2.1 "Account Balance" of a Participant means the total value at any
time of Base Salary and Bonuses deferred by the Participant under
this Plan, increased by Investment Earnings, and decreased by
benefit payments.
2.2 "Base Salary" of a Participant for any Plan Year means the total
salary and wages paid by all Employers to such individual for that
Plan Year, including any amount which would be included in the
definition of Base Salary but for the Executive's election to
defer some of his/her salary pursuant to this Plan or some other
deferred compensation plan established by an Employer; but
excluding any other remuneration paid by the Employers, such as
overtime, net commissions, bonuses, stock options, distributions
of compensation previously deferred, restricted stock, allowances
for expenses (including moving expenses, travel expenses, and
automobile allowances), and fringe benefits payable in a form
other than cash. In the case of an Executive who is a participant
in a plan sponsored by an Employer which is described in Section
401(k) of the Internal Revenue Code, the term Base Salary shall
include any amount which would be included in Base Salary but for
the Executive's election to reduce his/her salary and have the
amount of the reduction contributed to the 401(k) plan on the
Executive's behalf.
2.3 "Beneficiary" means the person(s) or trust(s) designated in writing
by the Participant on a form filed with the Company prior to the
Participant's death to receive any portion of the Account Balance
remaining after the Participant's death. A Participant may revoke
an existing Beneficiary and designate a new Beneficiary at any
time. In the event such Participant fails to designate a
Beneficiary or, having designated a Beneficiary, thereafter
revokes such designation without naming another Beneficiary, or if
such designation fails in whole or in part by reason of the prior
death of a Beneficiary or for any other cause, the death benefit
or the part thereof as to which the Participant's designation
fails, as the case may be, shall be payable on the death of the
Participant to the person or persons surviving the Participant in
the first of the following classes in which there is a survivor,
share and share alike:
(a) The Participant's spouse.
(b) The Participant's children, except that if any of the
Participant's children, predecease the Participant but leave
issue surviving the Participant, such issue shall take by
right of representation the share their parent would have
taken if living.
(c) The Participant's parents.
(d) The Participant's personal representative (executor or
administrator).
Determination of the identity of the Beneficiary in each case
shall be made by the Committee.
2.4 "Bonus" or "Bonuses" means any amount awarded to a Participant
payable in cash under any bonus, incentive or similar plan of the
Company which provides for payments of compensation that is not
part of the Participant's Base Salary. However, the Committee may
designate that payments under a particular plan or plans are not
eligible for deferral under this Plan.
2.5 "Change in Control of the Company" means any one of the following:
(a) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Common Stock")
or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Voting
Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not
constitute a Change of Control of the Company: (i) any
acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii)
of subsection (c) of this Section 2.5; or
(b) individuals who, as of the date hereof, constitute the Board
of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the
Board of Directors of the Company; provided, however, that
any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than
the Board of Directors of the Company; or
(c) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding
Common Stock and Outstanding Voting Securities immediately
prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board of Directors of the Company, providing for such
Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
2.6 "Committee" means the Compensation Committee of the Board of
Directors of the Company or any successor body to such Committee.
2.7 "Company" or "Multifoods" means International Multifoods
Corporation, a Delaware corporation, and its successors and
assigns.
2.8 "DICAP" means the Deferred Income Capital Accumulation Plan for
Executives of International Multifoods Corporation.
2.9 "Effective Date" means January 1, 1991.
2.10 "Employer" means the Company or any of its subsidiaries.
2.11."Executive" means an employee of the Company or any other Employer
who has substantial authority in the management of the Company or
a unit thereof, or who functions in an advisory role to one who
does.
2.12 "Financial Hardship" means an immediate and heavy financial need f
a Participant (or Beneficiary following the Participant's death)
which, in the sole and exclusive opinion of the Committee, could
not reasonably have been anticipated at the time the election to
defer was made, cannot be satisfied out of other resources that
are reasonably available to the Participant (or Beneficiary) and
could be at least partially relieved by the cancellation of an
election to defer, or the payment of all or part of the Account
Balance, or both.
2.13 "Investment Earnings" shall be as defined in Section 4.5.
2.14 "Participant" means an Executive who has been designated by the
Chief Executive Officer of the Company, in his sole discretion, as
eligible to participate in this Plan in accordance with the
provisions of this Plan.
2.15 "Plan Year" means the calendar year.
SECTION 3
ELIGIBILITY, PARTICIPATION AND VESTING
3.1 Any Executive designated by the Chief Executive Officer of the
Company as eligible for this Plan may defer a portion of his/her
Base Salary and/or Bonus that is otherwise payable to the
Executive.
3.2 Any Executive who elects to defer Base Salary or Bonuses shall,
after such deferral and prior to the complete payment of the
Account Balance, be a Plan Participant. A Beneficiary of a
Participant shall be treated as a Participant to the extent
required to accomplish the payment of benefits from this Plan.
3.3 An election to defer must be made on the form prescribed from time
to time by the Committee or its delegate for this purpose and must
be received by the Committee or its delegate prior to the
following deadline:
(a) Except as provided in subsection (b), the election must be
filed prior to the beginning of the calendar year in which
the Base Salary or Bonus will be earned.
(b) If a Bonus requires that a Participant be employed by an
Employer on a date following the last day of the calendar
year in which the Bonus is earned in order to receive
payment of the Bonus, the election must be filed prior to
the beginning of the calendar year in which the Bonus is to
be paid.
3.4 Each election to defer shall apply to a single calendar year.
3.5 A Participant shall at all times be fully vested in the
Participant's Account Balance, and the Account Balance shall be
nonforfeitable except as provided in Sections 9.2 and 9.3
regarding payments that may be made for a Participant's benefit.
3.6 No after-tax deferrals will be allowed under this Plan.
SECTION 4
DEFERRALS AND ACCOUNT BALANCES
4.1 A Participant may defer a portion of his/her Base Salary. The
minimum annual Base Salary deferral is $5,000. The maximum annual
Base Salary deferral is 30% of Base Salary.
4.2 A Participant may defer part or all of his/her Bonuses. The
minimum annual Bonus deferral is the lesser of $10,000 or 100% of
annual Bonuses. The maximum Annual Bonus deferral is 100% of
annual Bonuses.
4.3 Deferrals under this Plan are related to deferrals under DICAP only
insofar as the maximum and minimum requirements of this Plan are
inclusive of DICAP amounts deferred after 1990 for which elections
were made prior to 1990.
4.4 A Participant's deferrals shall be credited to that Participant's
Account Balance as of the date(s) that the Base Salary or
Bonus(es) would, but for the election to defer, have been paid to
the Participant. The Company shall also post to the Account
Balance of each Participant once each Plan Year the amount for
that Plan Year that an Employer would have otherwise contributed
on behalf of the Participant, if the Participant had not made a
deferral election under this Plan, to (i) the Section 401(k) plan
it sponsors, if any, as an Employer contribution matching the
Participant's salary reduction contribution, or (ii) any other
defined contribution plan of an Employer which is deemed to be a
"qualified plan" under the Internal Revenue Code. In addition,
the Company shall post to the Account of each Participant any
amount deferred by the Participant pursuant to an agreement with
an Employer other than under this Plan, which the Participant
elects and the Company agrees to account for under this Plan.
4.5 Investment Earnings shall be credited at the Company's short-term
borrowing rate as determined by the Treasury Department, adjusted
quarterly. At the sole election of the Committee, Investment
Earnings may instead be credited at the rate and crediting
frequency actually earned by the Company on its investment of the
deferred amounts.
4.6 Amounts deferred under this Plan shall be disregarded for purposes
of other salary-based or bonus-based employee benefits provided by
the Company, except as provided in the Company's Management
Benefit Plan or to the extent the deferrals are specifically
included by the terms of any other employee benefit plan.
4.7 Any amount which has been deferred under this Plan and subsequently
becomes due and payable to a Participant may not thereafter be
deferred again.
4.8 The minimum period of deferral shall be two (2) years, commencing
at the end of the calendar year in which the amount deferred would
otherwise have been paid to the Participant.
4.9 The Account Balance shall be paid out, or put in payment status, no
later than the January 1 following the calendar year in which the
Participant attains age 70.
4.10 A deferral election, once made, is irrevocable, except that the
Committee may cancel remaining deferrals in the event of Financial
Hardship or upon the termination of Executive's employment with
the Employers. An election to defer Bonuses shall be inapplicable
to the extent that the Bonus amount is inadequate.
SECTION 5
BENEFIT PAYMENTS
5.1 The portion of the Account Balance attributable to each deferral
election will be paid, or commence to be paid, on the date
specified in the Participant's deferral election (whether or not
the Participant remains an employee of an Employer on that date),
and will be paid in the manner specified in the deferral election.
If no form of payment is specified in the deferral election, the
Account Balance will be paid in substantially equal monthly
installments over a period of 15 years in the case of a
Participant and in a lump sum in the case of a Beneficiary.
5.2 Notwithstanding Section 5.1, the Account Balance shall be paid to
the Participant (or to the Beneficiary in the event of the
Participant's death) in a lump sum as soon as reasonably possible
after any of the following events occur:
(a) The Participant dies, unless the Participant's deferral
election specifies a different time and/or form of payment
to the Beneficiary.
(b) The Committee determines that a Financial Hardship exists,
but the distribution under this subsection shall not exceed
the portion of the Account Balance that the Committee
determines in its sole discretion is necessary to alleviate
the Financial Hardship.
(c) A Change in Control of the Company occurs, unless the
Participant elects prior to the date the Change in Control
of the Company occurs that no distribution is to be made due
to a Change in Control of the Company.
5.3 Notwithstanding Sections 5.1 and 5.2, the Committee may in its sole
and absolute discretion cause an involuntary lump sum distribution
to be made to a Participant at any time after the Participant's
employment with the Employers has terminated. Any such
distribution may be made regardless of any provision of the
Participant's deferral election to the contrary.
5.4 Investment Earnings at the rate specified under Section 4.5 shall
continue to be credited to the unpaid portion of any Account
Balance in payment status.
5.5 In the event it shall be determined that any payment by the Company
to or for the benefit of the Participant hereunder (determined
without regard to any additional payments required under this
Section 5.5) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties are incurred by the
Participant with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the
Participant shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Participant of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Participant retains an amount of the Gross-
Up Payment equal to the Excise Tax imposed upon the Payment. For
purposes of these calculations, all applicable amounts shall be
determined by the Company's independent auditors.
5.6 The Committee shall cause any applicable withholding taxes to be
deducted from the payments hereunder.
5.7 Any taxes required to be withheld at the time of the deferral shall
be deducted from compensation of the Participant which is not
deferred hereunder, unless the Participant makes other
arrangements satisfactory to the Company to comply with any such
withholding requirements.
SECTION 6
SOURCE OF BENEFITS
6.1 The benefits under this Plan shall be paid by the Company or any of
its consolidated subsidiaries or by a trust established by the
Company for this purpose. The benefits shall be provided for in
such manner and form as shall be approved from time to time by the
Board of Directors of the Company or by the Committee as in their
judgment is advisable to make funds available to pay all such
amounts when due to Participants under the Plan.
6.2 The Company shall establish on its accounting ledgers, or cause to
be established on the accounting ledgers of any consolidated
subsidiary, a reserve for the Account Balance of each Participant.
6.3 A Participant or Beneficiary under this Plan shall be an unsecured
general creditor of the Company as to the payment of any benefit
under this Plan.
SECTION 7
ADMINISTRATION
7.1 Except for the functions reserved to the Company, the Board of
Directors of the Company, the Chief Executive Officer of the
Company or a trustee, if any, appointed by the Company, the
administration of the Plan shall be the responsibility of the
Committee.
7.2 The Committee shall have the power and the duty to take all actions
necessary and proper to carry out the provisions of this Plan.
The determinations of the Committee shall be final and binding,
unless the Board of Directors of the Company modifies or reverses
the determination made by the Committee.
7.3 In administering the Plan, the Committee shall:
(a) Furnish Participants, upon request, with copies of the Plan
and annual statements of Account Balances.
(b) Determine the reserve required under Section 6.2 of the Plan.
(c) Instruct the Company (or trustee, if any) as to payments to
be made under the Plan.
(d) Make and enforce such rules and regulations as it shall deem
proper from time to time for the administration of the Plan.
(e) Interpret the Plan to resolve ambiguities, inconsistencies
and omissions, which interpretations shall be final and
binding unless the Board of Directors of the Company
modifies or reverses the interpretation made by the
Committee.
(f) Determine the amount of benefits payable in accordance with
Section 5 of the Plan.
(g) Take whatever action is necessary in fulfilling the purposes
and intent of the Plan.
7.4 The Committee may appoint a person or persons to act in the day-to-
day administration of the Plan, which person or persons may or may
not be a Participant or a member of the Committee.
7.5 Except in circumstances involving bad faith, no member of the
Committee, the Board of Directors of the Company, the Chief
Executive Officer of the Company, or any person assisting in the
Plan administration, shall be liable, in respect to this Plan, for
any act whether of Committee, officer, agent or employee of the
Company or any of its consolidated subsidiaries, or for anything
done or omitted to be done by any member of the Committee,
officer, agent or employee of the Company. Any person claiming
benefits under this Plan shall look solely to the Company or to an
applicable trust for redress.
SECTION 8
AMENDMENT AND TERMINATION
8.1 The Board of Directors of the Company shall have the power to
suspend or terminate this Plan in whole or in part at any time,
and from time to time. The Board of Directors shall also have the
power to extend, modify, amend or revise this Plan in such
respects as the Board of Directors by resolution may deem
advisable; provided that no such extension, modification,
amendment or revision shall deprive a Participant, or any
Beneficiary designated by a Participant, of the Account Balance
existing at the time such action is taken. The fact that a
director is, or has been, or will be, a Participant in this Plan
shall not disqualify such Participant from voting as a director
for or against an extension, discontinuance, modification,
amendment or revision of this Plan or any part thereof.
8.2 The Company intends to continue this Plan indefinitely, but
nevertheless assumes no contractual obligations, other than as
specifically provided herein, beyond the guarantee of the Account
Balances under this Plan.
8.3 If this Plan is terminated by the Board of Directors of the Company
under and pursuant to the provisions of this Section 8, a
Participant shall be entitled to the benefit provided for in
Section 5 of this Plan, with respect to the Account Balance
existing at the time the termination occurs, which benefit shall
be payable in accordance with the provisions of the Plan.
SECTION 9
MISCELLANEOUS
9.1 This Plan is not a contract between any Employer and any
Participant or Beneficiary, except to the extent that it defers
and redefines an obligation of the Employer. Nothing herein shall
affect the right of an Employer to discharge an Executive.
9.2 No benefit hereunder shall be subject to anticipation, alienation,
garnishment, sale, pledge, transfer, encumbrance, judgment or
damage, and any attempt at such with respect to a Participant or
Beneficiary shall cause the Account Balance (to the extent subject
to such attempt) to be forfeited. Following any such forfeiture,
the Committee may apply the Account Balance in any manner which
the Committee determines in its sole discretion is appropriate to
carry out the purpose of the Plan to provide benefits to the
Participant and his/her Beneficiary.
9.3 If the Committee determines that a person entitled to benefits
hereunder is incompetent, it may cause benefits to be paid to
another person for the use of the Participant or Beneficiary, in
total discharge of the Plan's obligations.
9.4 The provisions of the Plan shall be construed and governed under
the laws of the State of Minnesota, unless and except as preempted
by federal law; provided, however, that the provisions of any
trust agreement relating to a trust established for the purpose of
accumulating assets to assist the Company in fulfilling
obligations of the Company under this Plan shall be construed and
governed under the laws of the jurisdiction stated in such trust
agreement.
9.5 Any notices given to a Participant shall be considered adequately
addressed if sent to said Participant at his/her work location
within the Company, or to the last mailing address that the
Participant furnished to the Committee.
EXHIBIT 10.6
DEFERRED INCOME CAPITAL ACCUMULATION PLAN
FOR EXECUTIVES OF
INTERNATIONAL MULTIFOODS CORPORATION
Amended and Restated as of
September 17, 1993
DEFERRED INCOME CAPITAL ACCUMULATION PLAN
FOR EXECUTIVES OF
INTERNATIONAL MULTIFOODS CORPORATION
This plan and agreement is between International Multifoods
Corporation (the "Company") and those specified Executives of the
Company who may elect to participate in this Deferred Income Capital
Accumulation Plan by executing a DICAP Election Form, together and
individually.
ARTICLE 1. DEFERRED COMPENSATION ACCOUNT
Section 1.1. Establishment of Account. The Company shall
establish an account ("Account") for each Participant which shall be
utilized solely as a device to measure and determine the amount of
deferred compensation to be paid under this Deferred Income Capital
Accumulation Plan for Executives of International Multifoods Corporation
("Plan").
Section 1.2. Property of Company. Any amounts so set aside
for benefits payable under this Plan are the property of the Company,
except, and to the extent, of any assignment of such assets to an
irrevocable trust.
ARTICLE 2. DEFINITIONS, GENDER, AND NUMBER
Section 2.1. Definitions. Whenever used in this Plan, the
following words and phrases shall have the meanings set forth below
unless the context plainly requires a different meaning, and when a
defined meaning is intended, the term is capitalized.
2.1.1. Account. "Account" means the device used to measure
and determine the amount of deferred compensation to be paid to a
Participant or beneficiary under this Plan, and may refer to the
separate Accounts that represent amounts deferred by a Participant
under separate Permissible Deferral elections or by the Company
pursuant to Section 4.1.
2.1.2. Affiliates. "Affiliates" or "Affiliate" means a
group of entities, including the Company, which constitute a
controlled group of corporations (as defined in section 414(b) of
the Code), a group of trades or businesses (whether or not
incorporated) under common control (as defined in section 414(c)
of the Code), and members of an affiliated service group (within
the meaning of section 414(m) of the Code).
2.1.3. Age. "Age" of participant means the number of whole
calendar years that have elapsed since the date of the
Participant's birth.
2.1.4. Base Salary. "Base Salary" of a Participant for any
Plan Year means the total salary and wages paid by all Affiliates
to such individual for that Plan Year including any amount which
would be included in the definition of Base Salary, but for the
Executive's election to defer some of his salary pursuant to this
Plan or some other deferred compensation plan established by an
Affiliate; but excluding any other remuneration paid by
Affiliates, such as overtime, net commissions, bonuses, stock
options, distributions of compensation previously deferred,
restricted stock, allowances for expenses (including moving,
travel expenses, and automobile allowances), and fringe benefits
payable in a form other than cash. In the case of an Executive
who is a participant in a plan sponsored by an Affiliate which is
described in Section 401(k) of the Code, the term Base Salary
shall include any amount which would be included in the definition
of Base Salary, but for the Executive's election to reduce his
salary and have the amount of the reduction contributed to the
401(k) plan on his behalf.
2.1.5. Beneficiary. "Beneficiary" or "Beneficiaries" means
the persons or trusts designated by a Participant in writing
pursuant to Section 5.6.4 of this Plan as being entitled to
receive any benefit payable under this Plan by reason of the death
of the Participant, or, in the absence of such designation, the
persons specified in Section 5.6.5 of this Plan.
2.1.6. Board. "Board" means the Board of Directors of the
Company as constituted at the relevant time.
2.1.7. Bonus. "Bonus" or "Bonuses" of a Participant for
any Plan Year means the total remuneration paid under the various
annual management bonus programs and the management incentive plan
("annual bonuses") by Affiliates to such individual for that Plan
Year including any amount which would be included in the
definition of Bonus, but for the Executive's election to defer
some or all of his or her annual bonus pursuant to this Plan or
some other deferred compensation plan established by an Affiliate;
but excluding any other remuneration paid by Affiliates, such as
Base Salary, overtime, net commissions, stock options,
distributions of compensation previously deferred, restricted
stock, allowances for expenses (including moving, travel expenses,
and automobile allowances), and fringe benefits payable in a form
other than cash.
2.1.8. Code. "Code" means the Internal Revenue Code of
1986, as amended from time to time and any successor statute.
References to a Code section shall be deemed to be to that section
or to any successor to that section.
2.1.9. Committee. "Committee" means the committee of the
Company's Board which has been delegated authority to administer
this Plan.
2.1.10. Company. "Company" means International Multifoods
Corporation.
2.1.11. Compensation. "Compensation" of a Participant for
any Plan Year means that individual's total Base Salary and Bonus
for that Plan Year.
2.1.12. Completed Deferral Cycle. "Completed Deferral
Cycle" means total deferrals made and completed as specified by
the Participant in his or her Permissible Deferral election either
for four (4) consecutive Plan Years, if pursuant to 2.2.21(a), (or
for such few years as permitted by 2.1.21(a)) or for one Plan
Year, if pursuant to 2.1.21(b).
2.1.13. Disabled. "Disabled" or "Disability" with respect
to a Participant shall be deemed to exist only when there shall be
delivered to the Committee the written opinion of a reputable,
licensed physician or physicians, approved by the Committee,
stating, in effect, that as a result of the sickness, accident,
ill health or other physical or mental disability, such a
Participant is, in the opinion of such physician or physicians, so
disabled as to totally prevent the Participant from performing and
discharging the duties of the position held by the Participant
with an Affiliate immediately prior to the occurrence of the
Disability, and that such Disability is likely to be permanent.
If a long term disability insurance program is maintained by
an Affiliate covering its Participants, the Committee may act and
rely upon the proofs and forms submitted under such insurance
program in satisfaction of the requirements of this Section.
2.1.14. Early Retirement. "Early Retirement Date" of a
Participant means the first day of the first calendar month
commencing on or after (a) the Participant has reached age 55
while in the employ of an Affiliate; (b) the Participant has
completed at least five (5) Years of Service; and (c) the
Participant has a Completed Deferral Cycle.
2.1.15. Effective Date. "Effective Date" means the date on
which this Plan became effective, i.e., June 1, 1987.
2.1.16. Enrollment Period. "Enrollment Period" means the
period of October 15 through November 15 prior to the Plan Year to
which a Permissible Deferral election first applies. However, for
the 1987 Plan Year, the Enrollment Period means March 15 through
April 15, 1987.
2.1.17. Executive. "Executive" means a person with
substantial responsibility in the management of an Affiliate
employed on a full-time basis by that Affiliate.
2.1.18. Hours of Service. "Hours of Service" means hours
of service determined in accordance with the provisions of the
Employee's Retirement Plan of International Multifoods
Corporation.
2.1.19. Normal Retirement Date. "Normal Retirement Date"
of a Participant means the last day of the calendar month in which
the Participant reaches the Age of 65 while in the employ of an
Affiliate.
2.1.20. Participant. "Participant" means an Executive who
is specifically designated by the chief executive officer of the
Company as a Participant and has elected to participate in this
Plan.
2.1.21. Permissible Deferral. "Permissible Deferral" means
either of the following options as selected by the Executive:
(a) a deferral in each of the next four (4) consecutive
Plan Years of an amount or percentage of Compensation
that is not less than the "minimum annual deferral"
determined from Schedule A attached hereto (and as it
may be amended from time to time by the Company) and
not greater than the "maximum annual deferral" which
is the sum of (i) 30% of the Executive's Base Salary
for this Plan Year (but not greater than the amount
which will reduce the Executive's Base Salary to an
amount equal to the Social Security Taxable Wage Base
in effect as of the first day of the Plan Year to
which a Permissible Deferral election first applies),
plus (ii) 100% of the Executive's Bonus payable during
this Plan Year. Deferrals under this paragraph (a)
must specify the percentages (stated as integers) or
dollar amounts of the deferral that are intended to be
deducted from Base Salary and Bonus, respectively.
Notwithstanding the preceding, an Executive who would
reach the Age of 65 prior to the expiration of the
four (4) consecutive Plan Years must defer an amount
or percentage of Compensation which is not less than
the "minimum annual amount" determined from Schedule A
computed on an annual basis for the whole or
fractional Plan Years until Age 65 and not greater
than 100% of the Executive's Compensation also
computed on an annual basis for that period of time,
unless the Committee pursuant to Section 3 allows a
continuation beyond Age 65; or
(b) a deferral in the subsequent Plan Year (beginning with
the 1988 Plan Year) of an amount or percentage of
Bonus that is not less than the "minimum bonus
deferral" determined from Schedule B attached hereto
(and as it may be amended from time to time by the
Company) and not greater than the "maximum bonus
deferral" which is 100% of the Executive's Bonus
payable during this Plan Year.
Base salary deferrals shall be made in equal monthly
installments or otherwise as determined by the Company during this Plan
Year. Bonus deferrals shall be made in a single sum deferral at the
time that the Bonus would otherwise be paid to the Executive. If an
Executive elects a deferral under paragraph (a) above and the
Executive's Bonus is less than the designated Bonus deferral, the total
Bonus, if any, shall be deferred and the deferrals of Base Salary during
the remainder of this Plan Year shall be adjusted upward such that the
total annual deferral equals the Executive's elected deferral. The
Company shall determine in its discretion when such adjustment shall be
made.
If an Executive elects a deferral under paragraph (a) and
the minimum annual deferral for a Plan Year exceeds the maximum annual
deferral for this Plan Year to which the Permissible Deferral election
first applies, no Compensation will be deferred for that Executive
pursuant to Section 4.1 for that Permissible Deferral election. If an
Executive elects a deferral under paragraph (b) and the minimum bonus
deferral exceeds the maximum bonus deferral for a Plan Year, no
compensation will be deferred for that Executive pursuant to Section 4.1
for that Plan Year. Except in the case of deferral terminations or
withdrawals under Section 5.7, Plan Years in which no Compensation is
actually deferred shall not cause a break in Plan Years for the purpose
of determining a Completed Deferral Cycle, provided, however, such year
in which no Compensation is deferred shall not be included in the total
of four (4) consecutive Plan Years necessary for a Completed Deferral
Cycle.
2.1.22. Plan. "Plan" means the "Deferred Income Capital
Accumulation plan for Executives of International Multifoods
Corporation" as set forth herein and as amended or restated from
time to time.
2.1.23. Plan Year. "Plan Year" means June 1, 1987 through
December 31, 1987, and each calendar year thereafter.
2.1.24. Standard Form of Benefit. "Standard Form of
Benefit" as to any Participant means monthly payments for a
fifteen (15) year period.
2.1.25. Total Stated Deferrals. "Total Stated Deferrals"
means the total of all Permissible Deferrals elected by a
Participant, whether or not made, and made by the Company pursuant
to Section 4.1. However, Total Stated Deferrals shall not include
Permissible Deferrals for which no compensation will be deferred
pursuant to paragraph (d) of Section 2.1.21.
2.1.26. Years of Service. "Years of Service" means the
number of consecutive calendar years (including years prior to the
Effective Date of this Plan) for which the Participant had at
least 1,000 Hours of Service with any Affiliate.
Section 2.2 Gender and Number. Except as otherwise
indicated by context, masculine terminology used herein also includes
the feminine and neuter, and terms used in the singular may also include
the plural.
ARTICLE 3. PARTICIPATION
Section 3.1. Who May Participate. Participation in this
Plan is limited to those Executives designated as Participants by the
chief executive officer of the Company, in his sole discretion. No
person employed by an Affiliate in any capacity shall have a right,
solely by reason of such employment, to be a Participant in this Plan.
Section 3.2. Time and Conditions of Participation. An
Executive designated by the chief executive officer of the Company for
participation shall become a Participant only upon (a) the Executive's
completion of a Permissible Deferral election for the succeeding Plan
Year or Plan Years during an Enrollment Period, in accordance with a
form established by the Company from time to time, and (b) compliance
with such terms and conditions as the Committee may, from time to time,
establish for the implementation of this Plan, including, but not
limited to, any condition the Committee may deem necessary or
appropriate for the Company to meet its obligations under the Plan. An
Executive may make a Permissible Deferral election for any succeeding
Plan Year or Years during an Enrollment Period provided the total
Permissible Deferral elections do not exceed the limitations of
subsections (a) and (b) of Section 2.1.21. No executive may continue or
enter into a Permissible Deferral election on or after Age 65, unless
the Committee in its discretion specifically waives this restriction for
the Executive.
Section 3.3. Termination of Participation. Once an
Executive has become a Participant in this Plan, participation shall
continue until the first to occur of (a) payment in full of all benefits
to which the Participant or Beneficiary is entitled under this Plan, or
(b) the occurrence of an event specified in Section 3.4 which results in
loss of benefits.
Section 3.4. Missing Persons. If the Company is unable to
locate the Participant or his or her Beneficiary for purposes of making
a distribution, the amount of a Participant's benefits under this Plan
that would otherwise be considered as non-forfeitable shall be forfeited
effective four (4) years after (i) the last date a payment of said
benefit was made, if at least one such payment was made, or (ii) the
first date a payment of said benefit was directed to be made by the
Company pursuant to the terms of this Plan, if no payments had been
made. If such person is located after the date of such forfeiture, the
benefits for such Participant or Beneficiary shall not be reinstated
hereunder.
Section 3.5. Relationship to Other Plans. Participation in
this Plan shall not preclude participation of the Participant in any
other fringe benefit program or plan sponsored by the Company for which
such Participant would otherwise be eligible.
ARTICLE 4. ENTRIES TO THE ACCOUNT
Section 4.1. Amount of Compensation Deferred. The Company
shall post monthly to the Account of each Participant the amount of
Compensation to be deferred that month as designated by the
Participant's Permissible Deferral election in effect for that Plan
Year. The Company shall also post to the Account of each Participant
once each Plan Year the amount for that Plan Year that an Affiliate
would have otherwise contributed on behalf of the Participant if the
Participant had not made a Permissible Deferral election under this Plan
to (i) the Code Section 401(k) plan it sponsors, if any, as an Affiliate
contribution matching the Participant's salary reduction contribution,
or (ii) any defined contribution plan of an Affiliate which is deemed to
be a "qualified plan" under the Code. In addition, the Company shall
post to the account of each Participant any amount deferred by the
Participant pursuant to an agreement with an Affiliate other than under
this Plan, which the Participant elects and the Company agrees to
account for under this Plan.
Section 4.2. Crediting Rate. Gains or losses shall be
posted to the Account, unless provided otherwise, on a monthly basis in
accordance with the Participant's irrevocable election of an investment
option which will be a reference for measuring the performance of the
Account, as modified, if applicable, by Section 4.4. The Company
intends to measure the performance of the Account in accordance with the
Participant's election but reserves the right to do otherwise. The
election shall be made concurrently with the Permissible Deferral
election. The Participant shall elect either a fixed rate as described
in 4.2.1 or a variable rate as described in 4.2.2. A separate
irrevocable election shall be made for each Permissible Deferral
election.
4.2.1. Fixed Rate. If a Participant elects a fixed rate,
the Participant's Account will be credited with interest on a
monthly basis at an effective annual yield equal to one hundred
twenty percent (120%) of the ten-year rolling average rate of ten-
year United States Treasury notes. The ten-year rolling average
rate will be determined by an outside source selected by the
employee benefits department of the Company once each Plan Year
and will be the rate in effect for the month ending two months
prior to this Plan Year to which it applies; except for the 1987
Plan Year, where the ten-year rolling average will be the rate in
effect as of December 31, 1986.
4.2.2. Variable Rate. If a Participant elects a variable
rate, the Participant's Account will be credited or debited on a
monthly basis as if the Account balance were invested in one or
more funds selected by the Company in the proportions elected by
the Participant. Initially the funds will be from the Pruco
Variable Appreciable Life Insurance Contracts and include the
Common Stock Portfolio, the Aggressively Managed Flexible
Portfolio, and the Conservatively Managed Flexible Portfolio.
Participants may elect to have their Accounts treated as if they
were invested in one or more of the funds selected, provided the
election is in at least twenty-five percent (25%) increments of
the Account. Participants may change their measuring fund
elections for the succeeding Plan Year by giving the Committee
written notice of the new election during an Enrollment Period
(whether or not that Enrollment Period is prior to the Plan Year
to which a Permissible Deferral election first applies). The
Participant's Account will be reduced by the Account's
proportionate share (based on Account balances of all Participants
electing a variable rate) of the annual administrative charges
determined from Schedule C attached hereto, which may be amended
from time to time by the Committee, and/or applicable
administrative changes.
Section 4.3. Crediting Rate Upon Retirement, Death, or
Disability. If a Participant terminates employment at or after Normal
Retirement Date or Early Retirement Date, gains and losses shall be
credited as described in Section 4.2 to that Participant's Account. If
a Participant dies or is Disabled prior to termination of employment,
gains and losses shall be credited as described in Section 4.2 to that
Participant's Account.
Section 4.4. Crediting Rate Upon Resignation or Discharge.
If a Participant with five (5) Years of Service terminates employment
before Age 55 for reasons other than death or Disability, gains and
losses shall be credited as described in Section 4.2 to that
Participant's Accounts that represent Complete Deferral Cycles.
Accounts that do not represent Complete Deferral Cycles and Accounts of
Participants who terminate employment with less than five (5) Years of
Service before the Normal Retirement Date or Early Retirement Date for
reasons other than death or Disability shall be credited at the lesser
of (i) the amount as described in Section 4.2 or (ii) an interest rate
set by the Vice President-Finance of the Company in his discretion in an
amount not to exceed eight percent (8%).
If a Participant terminates employment (i) on or after Age
65 or (ii) on or after Age 55 having completed at least five (5) Years
of Service, but all Permissible Deferrals do not satisfy a Completed
Deferral Cycle, the Participant will be deemed to have a Completed
Deferral Cycle for all Permissible Deferrals if the Participant elects
either:
(a) in compliance with terms and conditions as established
from time to time by the Committee, to defer
sufficient additional Compensation (to be earned prior
to termination and subsequent to such election) to
complete the deferral elected under Section 3.2; or
(b) to have the total Permissible Deferrals made during the
most recent Deferral Cycle constitute a reduced paid-
up benefit, provided such Permissible Deferrals
satisfy a minimum amount, as determined by the
Committee.
A participant must make the election described in (b) of this paragraph
no later than thirty (30) days following termination of employment.
ARTICLE 5. DISTRIBUTION OF BENEFITS
Section 5.1. Payments After Termination of Employment.
Payments shall be made by the Company only upon the termination,
voluntary or involuntary, of the Participant's employment with all
Affiliates, except where a Participant is Age 70, is Disabled, or as
provided by Section 5.7.
Section 5.2. Form of Benefits Upon Retirement. Payments
from the Account shall be made in accordance with the Standard Form of
Benefit for Participants who terminate employment on or after Normal
Retirement Date or Early Retirement Date or are Disabled. However, the
Participant in the Plan Year prior to payment of benefits may petition
the Committee for, and the Committee may approve at such time, an
optional form of benefit.
Section 5.3. Form of Benefits Upon Resignation or
Discharge. For Participants who terminate employment with all
Affiliates before the Normal Retirement Date or the Early Retirement
Date for reasons other than Disability or death, payments from the
Account shall be in the form of monthly payments over a five (5) year
period. However, the Committee in its sole discretion may pay the
benefits in a single distribution.
Section 5.4. Amount of Benefit. The benefit payment shall
be a level amount for each twelve (12) month period calculated using the
balance in the Account at the beginning of the twelve (12) month period
and dividing it by the total periods remaining in the entire payment
period. The benefit payment shall be adjusted each subsequent twelve
(12) month period to reflect the Account as of that time.
The Account shall continue to be credited during the payment
period with gains and losses as provided in Section 4.3. However, if a
Participant receives benefits pursuant to Section 5.3, the Account shall
be credited with gains and losses as provided in Section 4.3 up to the
time benefits commence as provided in Section 5.5, and after that time
with interest at a rate set by the Vice President-Finance of the Company
in his discretion in an amount not to exceed eight percent (8%) per
annum. Except as provided otherwise, if a Participant dies, Section 5.6
shall apply.
Section 5.5. Time of Payment. Unless the Committee
determines otherwise, benefit payments shall begin no later than six (6)
months after termination of employment. However, the Participant may
elect prior to the first Permissible Deferral election to defer
commencement of the payment of benefits for a period up to five (5)
years after termination of employment. If the Participant has made such
an election, the Committee upon written petition of the Participant may
begin benefit payments if compelling reasons exist at an earlier time
after termination. In all events, benefits must commence to a
Participant no later than Age 70 whether or not the Participant has
terminated employment.
Section 5.6. Death Benefits.
5.6.1. Death After Termination of Employment. In the event
a Participant dies after termination of employment with all
Affiliates, the remaining benefit payments, if any, shall be paid
to the Participant's Beneficiary in the same manner as such
benefits would have been paid to the Participant had the
Participant survived. A Beneficiary may petition the Committee
for an alternative method of payment.
In addition, if a Participant dies on or after such
Participant's Normal Retirement Date or Early Retirement Date
after having retired, an annuity shall be paid to a Participant's
surviving spouse, if any (to whom he has been married at least one
(1) year prior to the date of death). This annuity is not
available in the case of a Participant who has not terminated
employment with all Affiliates prior to the Participant's death.
The annuity shall be for the life of the Participant's surviving
spouse with each monthly payment equal to fifty percent (50%) of
the amount the Participant would have been entitled to if, on the
date benefits commenced, the Participant had received the Standard
Form of Benefit payment. If the Participant's surviving spouse is
more than thirty-six (36) months younger than the Participant, the
survivor life annuity payment to such spouse shall be reduced by
one-half of one percent (.5%) for each month the spouse is more
than thirty-six months younger than the Participant. Payments
shall commence on the first day of the month following the later
of (i) the Participant's death, (ii) the completion of the death
benefits under the first paragraph of this 5.6.1, or (iii) fifteen
(15) years from the date benefits commenced or would have
commenced to the Participant.
5.6.2. Death Prior to Termination of Employment. In the
event a Participant dies prior to termination of employment with
all Affiliates, the Company shall pay a pre-retirement death
benefit to the Participant's Beneficiary. The amount of such pre-
retirement death benefit is the greater of:
(a) the Participant's Account as of the date of the
Participant's death annuitized over a ten-year period
at an interest rate set by the Vice President-Finance
of the Company in his discretion in an amount not to
exceed eight percent (8%) per annum, or
(b) an annual benefit of twenty-five percent (25%) of the
Total Stated Deferrals, whether or not made.
The pre-retirement death benefit shall be paid monthly for a ten-
year period. The Beneficiary may petition the Committee for an
alternative method of payment. If the pre-retirement death
benefit is computed pursuant to 5.6.2(a), the Account shall
continue to be credited during the payment period at an interest
rate set by the Vice President-Finance of the Company in his
discretion in an amount not to exceed eight percent (8%) per
annum.
5.6.3. Marital Deduction. Any benefits which become
payable under this Article 5 to the surviving spouse of a
Participant shall be paid in a manner which will qualify such
benefits for a marital deduction in the estate of a deceased
Participant under the terms of Section 2056 of the Code, and
unless specifically directed by a Participant to the contrary
pursuant to an effective beneficiary designation, any portion of a
Participant's death benefit payable to a surviving spouse which
remains unpaid at the death of such spouse shall be paid to the
spouse's estate.
5.6.4. Designation by Participant. Each Participant has
the right to designate primary and contingent Beneficiaries for
death benefits payable under this Plan. Such Beneficiaries may be
individuals or trusts for the benefit of individuals. A
beneficiary designation by a Participant shall be in writing in a
form acceptable to the Committee and shall only be effective upon
delivery to the Company. A beneficiary designation may be revoked
by a Participant at any time by delivering to the Company either
written notice of revocation or a new beneficiary designation
form. The beneficiary designation form last delivered to the
Company prior to the death of a Participant shall control.
5.6.5. Failure to Designate Beneficiary. In the event
there is no beneficiary designation on file with the Company, or
all Beneficiaries designated by a Participant have predeceased the
Participant, the benefits payable by reason of the death of the
Participant shall be paid to the Participant's spouse, if living;
if the Participant does not leave a surviving spouse, to the
Participant's issue by right of representation; or, if there are
no such issue then living, to the Participant's estate. In the
event there are benefits remaining unpaid at the death of a sole
Beneficiary and no successor Beneficiary has been designated,
either by the Participant or the Participant's spouse pursuant to
5.6.3, the remaining balance of such benefit shall be paid to the
deceased Beneficiary's estate; or, if the deceased Beneficiary is
one of multiple concurrent Beneficiaries, such remaining benefits
shall be paid proportionally to the surviving Beneficiaries.
Section 5.7. Hardships. Upon the application of any
Participant, the Committee, in accordance with its uniform, non-
discriminatory policy, may permit such Participant to terminate future
deferrals of Compensation or to withdraw his total Account. A
Participant must give a written petition of the termination of his or
her Permissible Deferral election at least thirty (30) days prior to the
next monthly (for Base Salary) or single sum (for Bonuses) deferral. A
Participant must give a written petition of the intent to withdraw the
Account at least sixty (60) days (or such shorter time as permitted by
the Committee) prior to the date of withdrawal. No termination or
withdrawal shall be made under the provisions of this Section except for
the purpose of enabling a Participant to meet immediate needs created by
a financial hardship for which the Participant does not have other
reasonably available sources of funds as determined by the Committee in
accordance with uniform rules. The term financial hardship shall
include the need for funds to: meet uninsured medical expenses for the
Participant or his dependents, meet a significant uninsured casualty
loss for the Participant or his dependents, and to meet other
catastrophes of a "sudden and serious nature."
If the Committee permits a withdrawal, the Participant shall
be entitled to a reduced paid-up benefit provided the Permissible
Deferrals satisfy a minimum amount, as determined by the Committee. If
the Committee permits a withdrawal but the Permissible Deferrals do not
satisfy a minimum amount, a Participant's deferrals shall be credited at
the lesser of (i) the amount as described in Section 4.2; or (ii) an
interest rate set by the Vice President-Finance of the Company in his
discretion in an amount not to exceed an annual rate of eight percent
(8%). Withdrawals shall be distributed as soon as is reasonably
convenient.
If a termination of deferrals or a withdrawal is made under
this Section, the Executive may not enter into a new Permissible
Deferral election for two (2) complete Plan Years from the date of the
termination or withdrawal.
Section 5.8. Claims Procedure. The Committee shall notify
a Participant in writing within ninety (90) days of the Participant's
written application for benefits of his eligibility or non-eligibility
for benefits under this Plan. If the Committee determines that a
Participant is not eligible for benefits or full benefits, the notice
shall set forth (1) the specific reasons for such denial, (2) a specific
reference to the provision of this Plan on which the denial is based,
(3) a description of any additional information or material necessary
for the claimant to perfect his claim, and a description of why it is
needed, and (4) an explanation of this Plan's claims review procedure
and other appropriate information as to the steps to be taken if the
Participant wishes to have his claim reviewed. If the Committee
determines that there are special circumstances requiring additional
time to make a decision, the Committee shall notify the Participant of
the special circumstances and the date by which a decision is expected
to be made, and may extend the time for up to an additional 90-day
period. If a Participant is determined by the Committee to be not
eligible for benefits, or if the Participant believes that he is
entitled to greater or different benefits, he shall have the opportunity
to have his claim reviewed by the Committee by filing a petition for
review with the Committee within sixty (60) days after receipt by him of
the notice issued by the Committee. Said petition shall state the
specific reasons the Participant believes he is entitled to benefits or
greater or different benefits. Within sixty (60) days after receipt by
the Committee of said petition, the Committee shall afford the
Participant (and his counsel, if any) an opportunity to present his
position to the Committee orally or in writing, and said Participant (or
his counsel) shall have the right to review the pertinent documents, and
the Committee shall notify the Participant of its decision in writing
within said sixty (60) day period, stating specifically the basis of
said decision written in a manner calculated to be understood by the
Participant and the specific provisions of this Plan on which the
decision is based. If, because of the need for a hearing, the sixty
(60) day period is not sufficient, the decision may be deferred for up
to another sixty (60) day period at the election of the Committee, but
notice of this deferral shall be given to the Participant.
ARTICLE 6. FUNDING
Section 6.1. Source of Benefits. All benefits under this
Plan shall be paid when due by the Company out of its assets, or from an
irrevocable trust established by the Company for that purpose. The
Company may, but shall have no obligation to, make such advance
provision for the payment of such benefits as the Board may from time to
time consider appropriate.
Section 6.2. No Claim on Specific Assets. In the event the
Company shall determine in its discretion to make advance provisions for
any portion of its obligations under this Plan, any amounts so set
aside, in trust or otherwise, shall nonetheless remain the exclusive
property of the Company and shall in no event be deemed to constitute a
segregated fund for the benefit of any Participant. No Participant
shall be deemed to have, by virtue of being a Participant in this Plan,
any claim on any specific assets of the Company such that the
Participant would be subject to income taxation on his benefits under
this Plan prior to distribution. The rights of Participants and
Beneficiaries to benefits to which they are otherwise entitled under
this Plan shall be those of an unsecured general creditor of the
Company.
ARTICLE 7. ADMINISTRATION AND FINANCES
Section 7.1. Administration. This Plan shall be
administered by the employee benefits department of the Company under
the direction of the Committee. The Company shall bear all
administrative costs of this Plan other than those specifically charged
to a Participant or Beneficiary pursuant to Section 4.2 of this Plan.
Section 7.2. Powers of Committee. In addition to the other
powers granted under this Plan, the Committee shall have all powers
necessary to administer this Plan, including, without limitation,
powers:
(a) to interpret the provisions of this Plan;
(b) to establish and revise the method of accounting for
this Plan and to maintain the Accounts; and
(c) to establish rules for the administration of this Plan
and to prescribe any forms required to administer this
Plan.
Section 7.3. Actions of the Committee. All determinations,
interpretations, rules, and decisions of the Committee shall be
conclusive and binding upon all persons having or claiming to have any
interest or right under this Plan.
Section 7.4. Delegation. The Committee shall have the
power to delegate specific duties and responsibilities to officers or
other employees of the Company or other individuals or entities. Any
delegation by the Committee may allow further delegations by the
individual or entity to whom the delegation is made. Any delegation may
be rescinded by the Committee at any time. Each person or entity to
whom a duty or responsibility has been delegated shall be responsible
for the exercise of such duty or responsibility and shall not be
responsible for any act or failure to act of any other person or entity.
Section 7.5. Reports and Records. The Committee and those
to whom the Committee has delegated duties under this Plan shall keep
records of all their proceedings and actions and shall maintain books of
account, records, and other data as shall be necessary for the proper
administration of this Plan and for compliance with applicable law.
ARTICLE 8. AMENDMENTS AND TERMINATION
Section 8.1. Amendments. The Company, by action of the
Board, may amend the Plan, in whole or in part, at any time and from
time to time. Any such amendment shall be filed with this Plan
document. No amendment, however, may be effective to eliminate or
reduce the benefits of any retired Participant or the Beneficiary of any
deceased Participant then eligible for benefits or the benefits, if any,
in any active Participant's Account immediately before the effective
date of such amendment, plus interest, gains or losses previously
credited, or to be credited thereafter, in accordance with Section 4.2
of this Plan, whether or not they represent Completed Deferral Cycles.
Section 8.2. Termination. The Company expects this Plan to
be permanent, but necessarily must, and hereby does, reserve the right
to terminate this Plan at any time by action of the Board. Any such
termination shall not operate to eliminate or reduce benefits of any
retired Participant or the Beneficiary of any deceased Participant then
eligible for benefits or the benefits, if any, in any active
Participant's Account immediately before the effective date of such
termination, plus interest, gains or losses previously credited, or to
be credited thereafter, in accordance with Section 4.2 of this Plan,
whether or not they represent Completed Deferral Cycles.
If this Plan shall at any time be terminated, payments from
the Accounts of all Participants and Beneficiaries shall be made as soon
as administratively convenient in the form of monthly payments over a
five (5) year period. However, the Committee in its sole discretion may
pay the benefits in a single distribution.
ARTICLE 9. MISCELLANEOUS
Section 9.1. No Guarantee of Employment. Neither the
adoption and maintenance of this Plan nor the execution by the Company
of a Permissible Deferral agreement with any Executive shall be deemed
to be a contract of employment between the Company and any Participant.
Nothing contained herein shall give any Participant the right to be
retained in the employ of the Company or to interfere with the right of
the Company to discharge any Participant at any time, nor shall it give
the Company the right to require any Participant to remain in its employ
or to interfere with the Participant's right to terminate his employment
at any time.
Section 9.2. Release. Any payments of benefits to or for
the benefit of a Participant or a Participant's Beneficiaries that is
made in good faith by the Company in accordance with the Company's
interpretation of its obligations hereunder, shall be in full
satisfaction of all claims against the Company for benefits under this
Plan to the extent of such payment.
Section 9.3. Notices. Any notice permitted or required
under this Plan shall be in writing and shall be hand delivered or sent,
postage prepaid, certified or registered mail with return receipt
requested, to the principal office of the Company, if to the Company, or
to the address last shown on the records of the Company, if to a
Participant or Beneficiary. Any such notice shall be effective as of
the date of hand delivery or mailing.
Section 9.4. Non-Alienation. No benefit payable at any
time under this Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, levy, attachment, or encumbrance of any
kind.
Section 9.5. Tax Liability. The Company may withhold from
any payment of benefits under this Plan (and forward to the appropriate
taxing authority) any taxes required to be withheld under applicable
law.
Section 9.6. Change in Control.
Section 9.6.1. Definitions. Whenever used in this Section,
the following words and phrases shall have the meanings set forth
below unless the context plainly requires a different meaning, and
when a defined term is intended, the term is capitalized.
(a) "Affected Participant" means any Participant or
Beneficiary with an Account in this Plan on the date
("Date") of a Change in Control of the Company except
any Participant who has delivered to the Company,
prior to the Date of a Change in Control of the
Company, a signed letter stating that such Participant
has elected not to receive the lump sum payment
contemplated and provided for in Section 9.6.2 hereof
(subject to adjustment pursuant to the provisions of
Section 9.6.3 hereof) in the event of a Change in
Control of the Company; provided, however, that any
such Participant shall have the right to withdraw such
election by delivering a signed letter to that effect
to the Company at any time prior to the Date of a
Change in Control of the Company.
(b) A "Change in Control of the Company" shall mean the
occurrence of any one of the following:
(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the then outstanding
shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Voting Securities"); provided,
however, that for purposes of this subsection
(a), the following acquisitions shall not
constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any
acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the
Company or any corporation controlled by the
Company or (iv) any acquisition by any
corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 9.6.1(b); or
(2) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
any individual becoming a director subsequent to
the date hereof whose election, or nomination
for election by the Company's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, for this purpose, any such individual
whose initial assumption of office occurs as a
result of an actual or threatened election
contest with respect to the election or removal
of directors or other actual or threatened
solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(3) consummation of a reorganization, merger or
consolidation or sale or other disposition of
all or substantially all of the assets of the
Company (a "Business Combination"), in each
case, unless, following such Business
Combination, (i) all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the
corporation resulting from such Business
Combination (including, without limitation, a
corporation which as a result of such
transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their
ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may
be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company
or such corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power of the
then outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (iii) at least a majority of the
members of the board of directors of the corpo-
ration resulting from such Business Combination
were members of the Incumbent Board at the time
of the execution of the initial agreement, or of
the action of the Board, providing for such
Business Combination; or
(4) approval by the shareholders of the Company of a
complete liquidation or dissolution of the
Company.
Section 9.6.2. Change in Control of the Company.
Notwithstanding any provisions to the contrary contained in this
Plan, upon the occurrence of a Change in Control of the Company,
the fact and the date ("Date") of which are to be determined
finally and conclusively by the Chief Executive Officer of the
Company or by the Vice President - Chief Financial Officer of the
Company, to be evidenced by a letter signed by such officer,
addressed and delivered to the Committee of the Board, the Account
of each Affected Participant under this Plan shall automatically
and simultaneously, without any further action, determination or
notice of any kind, be credited with interest, gains and losses,
as described under Section 4.2 hereof, and the aggregate amount
credited to each Affected Participant shall be paid immediately by
the Company to each Affected Participant or Beneficiary of an
Affected Participant, in a single distribution.
If a Change in Control of the Company occurs and both the
Chief Executive Officer of the Company and the Vice President and
Chief Financial Officer of the Company fail, for any reason
whatsoever, to sign, address and deliver to the Committee of the
Board of Directors the letter described above in this
Section 9.6.2, such failure shall not affect in any manner the
obligation of the Company or the full right, title and interest of
each Affected Participant under this Plan to receive from the
Company the full amount of the lump sum payment determined and
calculated in accordance with the foregoing provisions of this
Section 9.6.2, subject to adjustment pursuant to the provisions of
Section 9.6.3 hereof; and the entitlement of each Affected
Participant to receive such sum from the Company shall be valid
and enforceable by each Affected Participant in any state or
federal court having jurisdiction thereof.
Section 9.6.3. Parachute Payments. In the event it shall
be determined that any payment or distribution by the Company to
or for the benefit of the Participant hereunder (determined
without regard to any additional payments required under this
Section 9.6.3) (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or penalties
are incurred by the Affected Participant with respect to such
excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Affected Participant shall be entitled to receive
an additional payment (a "Gross-Up Payment") in an amount such
that after payment by the Affected Participant of all taxes
(including any interest or penalties imposed with respect to such
taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Affected Participant
retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payment.
For purposes of these calculations, all applicable amounts
shall be determined by the Company's independent auditors.
Section 9.7. Captions. Article and section headings and
captions are provided for purposes of reference and convenience only and
shall not be relied upon in any way to construe, define, modify, limit,
or extend the scope of any provision of this Plan.
Section 9.8. Applicable Law. This Plan and all rights
hereunder shall be governed by and construed according to the laws of
the State of Minnesota, except to the extent such laws are preempted by
the laws of the United States of America.
Schedule A - Minimum Annual Deferral
Age Minimum Annual Deferral Total 4 Year Election
Up to 40 $2,700 $10,800
41 - 50 3,900 15,600
51 - 60 5,500 22,000
61 - 65 6,400 25,600
Schedule B - Minimum Bonus Deferral
Age Minimum Bonus Deferral
Under 40 $10,600
41 - 50 15,300
51 - 60 21,700
61 - 65 25,300
Schedule C - Annual Administrative Charges
Portfolio Gross Crediting Rate Annual Administrative Charge
Up to 9.99% 1.40%
10.00% to 11.99% 1.00%
12.00% and above 0.00%
EXHIBIT 10.7
FEE DEFERRAL PLAN
FOR NON-EMPLOYEE DIRECTORS OF
INTERNATIONAL MULTIFOODS CORPORATION
Effective July 1, 1991
Amended and Restated as of September 17, 1993
FEE DEFERRAL PLAN
FOR NON-EMPLOYEE DIRECTORS OF
INTERNATIONAL MULTIFOODS CORPORATION
Table of Contents
Page
SECTION 1. DECLARATION 1
SECTION 2. DEFINITIONS 2
SECTION 3. ELIGIBILITY, PARTICIPATION AND VESTING 6
SECTION 4. DEFERRALS AND ACCOUNT BALANCES 7
SECTION 5. BENEFIT PAYMENTS 8
SECTION 6. SOURCE OF BENEFITS 10
SECTION 7. ADMINISTRATION 11
SECTION 8. AMENDMENT AND TERMINATION 13
SECTION 9. MISCELLANEOUS 14
FEE DEFERRAL PLAN
FOR NON-EMPLOYEE DIRECTORS OF
INTERNATIONAL MULTIFOODS CORPORATION
SECTION 1
DECLARATION
1.1 The Fee Deferral Plan for Non-Employee Directors of International
Multifoods Corporation (hereinafter, the "FDP" or "Plan") has been
established as a means for non-employee directors of International
Multifoods Corporation to voluntarily and timely defer retainer
and meeting fees. The Plan is a "non-qualified" voluntary
deferred compensation plan.
1.2 The Plan is to some extent a successor to the Deferred Income
Capital Accumulation Plan for Directors of International
Multifoods Corporation ("DICAP"), although as to obligations for
pre-1991 elections not totally fulfilled as of June 30, 1991,
DICAP will continue in its pertinent applicability. FDP will
function independently of DICAP, except as noted in Section 4.2.
SECTION 2
DEFINITIONS
The following terms used in the Plan have the meanings specified below,
unless the context clearly connotes a different meaning.
2.1. "Account Balance" of a Participant means the total value at any
time of Fees deferred by the Participant under this Plan,
increased by Investment Earnings, and decreased by benefit
payments.
2.2. "Beneficiary" means the person(s) or trust(s) designated in writing
by the Participant on a form filed with the Company prior to the
Participant's death to receive any portion of the Account Balance
remaining after the Participant's death. A Participant may revoke
an existing Beneficiary and designate a new Beneficiary at any
time. In the event such Participant fails to designate a
Beneficiary or, having designated a Beneficiary, thereafter
revokes such designation without naming another Beneficiary, or if
such designation fails in whole or in part by reason of the prior
death of a Beneficiary or for any other cause, the death benefit
or the part thereof as to which the Participant's designation
fails, as the case may be, shall be payable on the death of the
Participant to the person or persons surviving the Participant in
the first of the following classes in which there is a survivor,
share and share alike:
(a) The Participant's spouse.
(b) The Participant's children, except that if any of the
Participant's children predecease the Participant but leave
issue surviving the Participant, such issue shall take by
right of representation the share their parent would have
taken if living.
(c) The Participant's parents.
(d) The Participant's personal representative (executor or
administrator).
Determination of the identity of the Beneficiary in each case
shall be made by the Committee.
2.3 "Board" means the Board of Directors of the Company.
2.4 "Change in Control of the Company" means any one of the following:
(a) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
20% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Common Stock")
or (ii) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Voting
Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not
constitute a Change of Control of the Company: (i) any
acquisition directly from the Company, (ii) any acquisition
by the Company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or
(iv) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii)
of subsection (c) of this Section 2.4; or
(b) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that
any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than
the Board; or
(c) Consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the
assets of the Company (a "Business Combination"), in each
case, unless, following such Business Combination, (i) all
or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding
Common Stock and Outstanding Voting Securities immediately
prior to such Business Combination beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such
Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the
Company or all or substantially all of the Company's assets
either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership,
immediately prior to such Business Combination of the
Outstanding Common Stock and Outstanding Voting Securities,
as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and
(iii) at least a majority of the members of the board of
directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
2.5 "Committee" means the Compensation Committee of the Board or any
successor body to such Committee.
2.6 "Company" or "Multifoods" means International Multifoods
Corporation, a Delaware corporation, and its successors and
assigns.
2.7 "DICAP" means the Deferred Income Capital Accumulation Plan for
Directors of International Multifoods Corporation.
2.8 "Director" means any person serving as a member of Board who is not
a common law employee of the Company or any of its subsidiaries.
2.9 "Effective Date" means July 1, 1991.
2.10 "Fees" means the total of (i) the standard retainer fees paid to a
person as compensation for being a Director of the Company, and
(ii) amounts paid to a Director in excess of retainer fees as
meeting fees for special service to the Company as a member of a
committee of the Board.
2.11 "Financial Hardship" means an immediate and heavy financial need of
a Participant (or Beneficiary following the Participant's death)
which, in the sole and exclusive opinion of the Committee, could
not reasonably have been anticipated at the time the election to
defer was made, cannot be satisfied out of other resources that
are reasonably available to the Participant (or Beneficiary) and
could be at least partially relieved by the cancellation of an
election to defer, or the payment of all or part of the Account
Balance, or both.
2.12 "Investment Earnings" shall be as defined in Section 4.4.
2.13 "Participant" means a Director who has elected to participate in
this Plan in accordance with the provisions of this Plan.
2.14 "Plan Year" means the twelve-consecutive-month period beginning on
each July 1.
SECTION 3
ELIGIBILITY, PARTICIPATION AND VESTING
3.1 Any Director may defer all or a portion of his/her Fees that are
otherwise payable to the Director.
3.2 Any Director who elects to defer Fees shall, after such deferral
and prior to the complete payment of the Account Balance, be a
Plan Participant. A Beneficiary of a Participant shall be treated
an a Participant to the extent required to accomplish the payment
of benefits from this Plan.
3.3 An election to defer must be made on the form prescribed from time
to time by the Committee or its delegate for this purpose and must
be received by the Committee or its delegate prior to the
beginning of the Plan Year in which the Fees will be earned.
3.4 Each election to defer shall apply to a single calendar year.
3.5 A Participant shall at all times be fully vested in the
Participant's Account Balance, and the Account Balance shall be
nonforfeitable except as provided in Sections 9.2 and 9.3
regarding payments that may be made for a Participant's benefit.
3.6 No after-tax deferrals will be allowed under this Plan.
SECTION 4
DEFERRALS AND ACCOUNT BALANCES
4.1 A Participant may defer all or a part of his/her Fees to be paid
during a Plan Year.
4.2 Deferrals under this Plan are related to deferrals under DICAP only
insofar as any amount credited under DICAP cannot also be credited
under this Plan.
4.3 A Participant's deferrals shall be credited to that Participant's
Account Balance as of the date(s) that the Fees would, but for the
election to defer, have been paid to the Participant.
4.4 Investment Earnings shall be credited at the Company's short-term
borrowing rate as determined by the Treasury Department, adjusted
quarterly. At the sole election of the Committee, Investment
Earnings may instead be credited at the rate and crediting
frequency actually earned by the Company on its investment of the
deferred amounts.
4.5 Any amount which has been deferred under this Plan and subsequently
becomes due and payable to a Participant may not thereafter be
deferred again.
4.6 The minimum period of deferral shall be two (2) years, commencing
at the end of the Plan Year in which the amount deferred would
otherwise have been paid to the Participant.
4.7 The Account Balance shall be paid out, or put in payment status, no
later than the January 1 following the Plan Year in which the
Participant attains age 70.
4.8 A deferral election, once made, is irrevocable, except that the
Committee may cancel remaining deferrals in the event of Financial
Hardship or upon the termination of the individual's service as a
Director.
SECTION 5
BENEFIT PAYMENTS
5.1 The portion of the Account Balance attributable to each deferral
election will be paid, or commence to be paid, on the date
specified in the Participant's deferral election (whether or not
the Participant remains a Director on that date), and will be paid
in the manner specified in the deferral election. If no form of
payment is specified in the deferral election, the Account Balance
will be paid in substantially equal monthly installments over a
period of 10 years in the case of a Participant and in a lump sum
in the case of a Beneficiary.
5.2 Notwithstanding Section 5.1, the Account Balance shall be paid to
the Participant (or to the Beneficiary in the event of the
Participant's death) in a lump sum as soon as reasonably possible
after any of the following events occur:
(a) The Participant dies, unless the Participant's deferral
election specifies a different time and/or form of payment
to the Beneficiary.
(b) The Committee determines that a Financial Hardship exists,
but the distribution under this subsection shall not exceed
the portion of the Account Balance that the Committee
determines in its sole discretion is necessary to alleviate
the Financial Hardship.
(c) A Change in Control of the Company occurs, unless the
Participant elects prior to the date the Change in Control
of the Company occurs that no distribution is to be made due
to a Change in Control of the Company.
5.3 Notwithstanding Sections 5.1 and 5.2, the Committee may in its sole
and absolute discretion cause an involuntary lump sum distribution
to be made to a Participant at any time after the Participant's
service as a Director has terminated. Any such distribution may
be made regardless of any provision of the Participant's deferral
election to the contrary.
5.4 Investment Earnings at the rate specified under Section 4.4 shall
continue to be credited to the unpaid portion of any Account
Balance in payment status.
5.5 In the event it shall be determined that any payment by the Company
to or for the benefit of the Participant hereunder determined
without regard to any additional payments required under this
Section 5.5 (a "Payment") would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, or any interest or penalties are incurred by the
Participant with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the
Participant shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the
Participant of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Participant retains an amount of the Gross-
Up Payment equal to the Excise Tax imposed upon the Payment. For
purposes of these calculations, all applicable amounts shall be
determined by the Company's independent auditors.
5.6 The Committee shall cause any applicable withholding taxes to be
deducted from the payments hereunder.
5.7 Any taxes required to be withheld at the time of the deferral shall
be deducted from Fees of the Participant which are not deferred
hereunder, unless the Participant makes other arrangements
satisfactory to the Company to comply with any such withholding
requirements.
SECTION 6
SOURCE OF BENEFITS
6.1 The benefits under this Plan shall be paid by the Company or any of
its consolidated subsidiaries or by a trust established by the
Company for this purpose. The benefits shall be provided for in
such manner and form as shall be approved from time to time by the
Board or by the Committee as in their judgment is advisable to
make funds available to pay all such amounts when due to
Participants under the Plan.
6.2 The Company shall establish on its accounting ledgers, or cause to
be established on the accounting ledgers of any consolidated
subsidiary, a reserve for the Account Balance of each Participant.
6.3 A Participant or Beneficiary under this Plan shall be an unsecured
general creditor of the Company as to the payment of any benefit
under this Plan.
SECTION 7
ADMINISTRATION
7.1 Except for the functions reserved to the Company, the Board, or a
trustee, if any, appointed by the Company, the administration of
the Plan shall be the responsibility of the Committee.
7.2 The Committee shall have the power and the duty to take all actions
necessary and proper to carry out the provisions of this Plan.
The determinations of the Committee shall be final and binding,
unless the Board modifies or reverses the determination made by
the Committee.
7.3 In administering the Plan, the Committee shall:
(a) Furnish Participants, upon request, with copies of the Plan
and annual statements of Account Balances.
(b) Determine the reserve required under Section 6.2 of the Plan.
(c) Instruct the Company (or trustee, if any) as to payments to
be made under the Plan.
(d) Make and enforce such rules and regulations as it shall deem
proper from time to time for the administration of the Plan.
(e) Interpret the Plan to resolve ambiguities, inconsistencies
and omissions, which interpretations shall be final and
binding unless the Board modifies or reverses the
interpretation made by the Committee.
(f) Determine the amount of benefits payable in accordance with
Section 5 of the Plan.
(g) Take whatever action is necessary in fulfilling the purposes
and intent of the Plan.
7.4 The Committee may appoint a person or persons to act in the day-to-
day administration of the Plan, which person or persons may or may
not be a Participant or a member of the Committee.
7.5 Except in circumstances involving bad faith, no member of the
Committee, member of the Board, officer or employee of the
Company, or any person assisting in the Plan administration, shall
be liable, in respect to this Plan, for any act whether of
Committee, officer, agent or employee of the Company or any of its
consolidated subsidiaries, or for anything done or omitted to be
done by any member of the Committee, officer, agent or employee of
the Company. Any person claiming benefits under this Plan shall
look solely to the Company or to an applicable trust for redress.
SECTION 8
AMENDMENT AND TERMINATION
8.1 The Board shall have the power to suspend or terminate this Plan in
whole or in part at any time, and from time to time. The Board
shall also have the power to extend, modify, amend or revise this
Plan in such respects as the Board by resolution may deem
advisable; provided that no such extension, modification,
amendment or revision shall deprive a Participant, or any
Beneficiary designated by a Participant, of the Account Balance
existing at the time such action is taken. The fact that a
Director is, or has been, or will be, a Participant in this Plan
shall not disqualify such Participant from voting as a director
for or against an extension, discontinuance, modification,
amendment or revision of this Plan or any part thereof.
8.2 The Company intends to continue this Plan indefinitely, but
nevertheless assumes no contractual obligations, other than as
specifically provided herein, beyond the guarantee of the Account
Balances under this Plan.
8.3 If this Plan is terminated by the Board under and pursuant to the
provisions of this Section 8, a Participant shall be entitled to
the benefit provided for in Section 5 of this Plan, with respect
to the Account Balance existing at the time the termination
occurs, which benefit shall be payable in accordance with the
provisions of the Plan.
SECTION 9
MISCELLANEOUS
9.1 This Plan is not a contract between the Company and any Participant
or Beneficiary, except to the extent that it defers and redefines
an obligation of the Company. This Plan is not a guarantee of
directorship to any person, and in no way expands or limits the
term of the Director or the relationship between the Company and
the Director.
9.2 No benefit hereunder shall be subject to anticipation, alienation,
garnishment, sale, pledge, transfer, encumbrance, judgment or
damage, and any attempt at such with respect to a Participant or
Beneficiary shall cause the Account Balance (to the extent subject
to such attempt) to be forfeited. Following any such forfeiture,
the Committee may apply the Account Balance in any manner which
the Committee determines in its sole discretion is appropriate to
carry out the purpose of the Plan to provide benefits to the
Participant and his/her Beneficiary.
9.3 If the Committee determines that a person entitled to benefits
hereunder is incompetent, it may cause benefits to be paid to
another person for the use of the Participant or Beneficiary, in
total discharge of the Plan's obligations.
9.4 The provisions of the Plan shall be construed and governed under
the laws of the State of Minnesota, unless and except as preempted
by federal law; provided, however, that the provisions of any
trust agreement relating to a trust established for the purpose of
accumulating assets to assist the Company in fulfilling
obligations of the Company under this Plan shall be construed and
governed under the laws of the jurisdiction stated in such trust
agreement.
9.5 Any notices given to a Participant shall be considered adequately
addressed if sent to said Participant at the last mailing address
that the Participant furnished to the Committee.
EXHIBIT 10.8
DEFERRED INCOME CAPITAL ACCUMULATION PLAN
FOR DIRECTORS OF
INTERNATIONAL MULTIFOODS CORPORATION
Amended and Restated as of
September 17, 1993
DEFERRED INCOME CAPITAL ACCUMULATION PLAN
FOR DIRECTORS OF
INTERNATIONAL MULTIFOODS CORPORATION
This plan and agreement is between International Multifoods
Corporation (the "Company") and those specified Directors of the Company
who may elect to participate in this Deferred Income Capital
Accumulation Plan by executing a DICAP Election Form, together and
individually.
ARTICLE 1. DEFERRED COMPENSATION ACCOUNT.
Section 1.1 Establishment of Account. The Company shall
establish an account ("Account") for each participant which shall be
utilized solely as a device to measure and determine the amount of
deferred compensation to be paid under this Deferred Income Capital
Accumulation Plan for Directors of International Multifoods Corporation
("Plan").
Section 1.2 Property of Company. Any amounts so set aside
for benefits payable under this Plan are the property of the Company,
except and to the extent of any assignment of such assets to an
irrevocable trust.
ARTICLE 2. DEFINITIONS, GENDER, AND NUMBER.
Section 2.1 Definitions. Whenever used in this Plan, the
following words and phrases shall have the meanings set forth below
unless the context plainly requires a different meaning, and when a
defined meaning is intended, the term is capitalized:
2.1.1. Account. "Account" means the device used to measure
and determine the amount of deferred compensation to be paid to a
Participant or Beneficiary under this Plan, and may refer to the
separate Accounts that represent amounts deferred by a Participant
under separate Permissible Deferral elections.
2.1.2. Affiliates. "Affiliates" or "Affiliate" means a
group of entities, including the Company, which constitute a
controlled group of corporations (as defined in section 414(b) of
the Code), a group of trades or businesses (whether or not
incorporated) under common control (as defined in section 414(c)
of the Code), and members of an affiliated service group (within
the meaning of section 414(m) of the Code).
2.1.3. Beneficiary. "Beneficiary" or "Beneficiaries" means
the persons or trusts designated by a Participant in writing
pursuant to Section 5.5.4 of this Plan as being entitled to
receive any benefit payable under this Plan by reason of the death
of a Participant, or, in the absence of such designation, the
persons specified in Section 5.5.5 of this Plan.
2.1.4. Board. "Board" means the Board of Directors of the
Company as constituted at the relevant time.
2.1.5. Code. "Code" means the Internal Revenue Code of
1986, as amended from time to time and any successor statute.
References to a Code section shall be deemed to be to that section
or to any successor to that section.
2.1.6. Committee. "Committee" means the Compensation
Committee of the Board of Directors of the Company, or any
successor body to such Committee.
2.1.7. Company. "Company" means International Multifoods
Corporation.
2.1.8. Completed Deferral Cycle. "Completed Deferral
Cycle" means total deferrals made and completed as specified by
the Participant in his or her Permissible Deferral election either
for two (2) consecutive Plan Years, if pursuant to 2.1.16(a), or
for four (4) consecutive Plan Years, if pursuant to 2.1.16(b).
2.1.9. Director. "Director" means a person serving as a
member on the Board of Directors of an Affiliate.
2.1.10. Director's Fees. "Director's Fees" of a Director
for any Plan Year means that individuals total Retainer and
Meeting Fees for that Plan Year.
2.1.11. Effective Date. "Effective Date" means June 1,
1987, the date on which this Plan became effective.
2.1.12. Enrollment Period. "Enrollment Period" means the
period of March 15 through April 15 prior to a Plan Year to which
a Permissible Deferral election first applies.
2.1.13 Meeting Fees. "Meeting Fees" of a Participant for
any Plan Year means the total remuneration paid by Affiliates to
such individual for that Plan Year for attendance at Affiliate's
board meetings and board committee meetings, excluding the
Retainer, but including any amount which would be included in the
definition of Meeting Fees, but for the Director's election to
defer some or all of such amount pursuant to this Plan or some
other deferred compensation plan established by an Affiliate.
2.1.14. Non-Employee. "Non-Employee" means any person who
is not employed as a commonlaw employee by an Affiliate.
2.1.15. Participant. "Participant" means a Non-employee
Director who elects to participate in this Plan and who is
designated by the Committee as a Participant, provided that any
such designation shall be contingent upon the individual being
found to be insurable at standard rates by an insurance carrier
selected by the Committee.
2.1.16. Permissible Deferral. "Permissible Deferral" means
either of the following options as selected by the director:
(a) a deferral in each of the next two (2)
consecutive Plan Years of an amount or percentage of
Director's Fees that is not less than 100% of the Director's
Retainer for that Plan Year, and not greater than the
"maximum annual deferral" which is 100% of the Director's
Fees for that Plan Year; or
(b) a deferral in each of the next four (4)
consecutive Plan Years of an amount or percentage of
Director's Fees that is not less than 100% of the Director's
Retainer for that Plan Year, and not greater than the
"maximum annual deferral" which is 100% of the Director's
Fees for that Plan Year.
Director's Fees deferrals shall be made in single sum
deferrals at the time that the Director's Fees would
otherwise be paid to the Director.
2.1.17. Plan. "Plan" means the "Deferred Income Capital
Accumulation Plan for Directors of International Multifood
Corporation" as set forth herein and as amended or restated from
time to time.
2.1.18. Plan Year. "Plan Year" means June 1 to May 31.
2.1.19. Retainer. "Retainer" of a Participant for any Plan
Year means the total remuneration paid by Affiliates to such
individual for that Plan Year as a retainer for being a member of
an Affiliate's board of directors, excluding Meeting Fees, but
including any amount which would be included in the definition of
Retainer, but for the Director's election to defer some or all of
such amount pursuant to this Plan or some other deferred
compensation plan established by an Affiliate.
2.1.20. Standard Form of Benefit. "Standard Form of
Benefit" as to any Participant means monthly payments for a ten
(10) year period.
Section 2.2 Gender and Number. Except as otherwise
indicated by context, masculine terminology used herein also includes
the feminine and neuter, and terms used in the singular may also include
the plural.
ARTICLE 3. PARTICIPATION.
Section 3.1 Who May Participate. Participation in this
Plan is limited to those Non-employee Directors designated as
Participants by the Committee provided that any such designation shall
be contingent upon the individual being found to be insurable at
standard rates by an insurance carrier selected by the Committee.
Section 3.2 Time and Conditions of Participation. An
eligible Director designated by the Committee for participation shall
become a Participant only upon (a) the Director's completion of a
Permissible Deferral election for the succeeding Plan Years during an
Enrollment Period, in accordance with a form established by the Company
from time to time, and (b) compliance with such terms and conditions as
the Committee may from time to time establish for the implementation of
this Plan, including, but not limited to, any condition the Committee
may deem necessary or appropriate for the Company to meet its
obligations under this Plan. A Director may make a Permissible Deferral
election for any succeeding Plan Years during an Enrollment Period
provided the total Permissible Deferral elections do not exceed the
"maximum annual deferral" (as defined in 2.1.16.).
Section 3.3 Termination of Participation. Once a Director
has become a Participant in this Plan, participation shall continue
until the first to occur: (a) payment in full of all benefits to which
the Participant or Beneficiary is entitled under this Plan, or (b) the
occurrence of an event specified in Section 3.4 which results in loss of
benefits.
Section 3.4 Missing Persons. If the Company is unable to
locate the Participant or his or her Beneficiary for the purposes of
making a distribution, the amount of a Participant's benefits under this
Plan that would otherwise be considered as nonforfeitable shall be
forfeited effective four (4) years after (i) the last date a payment of
said benefit was made, if at least one such payment was made, or (ii)
the first date a payment of said benefit was directed to be made by the
Company, pursuant to the terms of this Plan if no payments had been
made. If such person is located after the date of such forfeiture, the
benefits for such Participant or Beneficiary shall not be reinstated
hereunder.
Section 3.5 Relationship to Other Plans. Participation in
this Plan shall not preclude participation of the Participant in any
other fringe benefit program or plan sponsored by the Company for which
such Participant would otherwise be eligible.
ARTICLE 4. ENTRIES TO THE ACCOUNT.
Section 4.1 Amount of Director's Fees Deferred. The
Company shall post on the date the Director's Fees would otherwise be
paid to the Account of each Participant the amount of Director's Fees to
be deferred as designated by the Participant's Permissible Deferral
election in effect for that Plan Year. In addition, the Company shall
post to the Account of each Participant any amount deferred by the
Participant pursuant to an agreement with an Affiliate other than under
this Plan, which the Participant elects and the Company agrees to
account for under this Plan.
Section 4.2 Crediting Rate. Gains or losses shall be
posted to the Account, unless provided otherwise, on a monthly basis in
accordance with the Participant's irrevocable election of an investment
option which will be a reference for measuring the performance of the
Account. The Company intends to measure the performance of the Account
in accordance with the Participant's election, but reserves the right to
do otherwise. The election shall be made concurrently with the
Permissible Deferral election. The Participant shall elect either a
fixed rate as described in 4.2.1. or a variable rate as described in
4.2.2. A separate irrevocable election shall be made for each
Permissible Deferral election.
4.2.1. Fixed Rate. If a Participant elects a fixed rate,
the Participant's Account will be credited with interest on a
monthly basis at an effective annual yield equal to one hundred
twenty percent (120%) of the ten-year rolling average rate of ten-
year United States Treasury notes. The ten-year roiling average
rate will be determined by an outside source selected by the
employee benefits department of the Company once each Plan Year
and will be the rate in effect for the month ending two months
prior to the Plan Year to which it applies; except for the 1987
Plan Year, where the ten-year rolling average will be the rate in
effect as of December 31, 1986.
4.2.2 Variable Rate. If a Participant elects a variable
rate, the Participant's Account will be credited or debited on a
monthly basis as if the Account balance were invested in one or
more funds selected by the Company in the proportions elected by
the Participant. Initially the funds will be from the Pruco
Variable Appreciable Life Insurance Contracts and include the
Common Stock Portfolio, the Aggressively Managed Flexible
Portfolio, and the Conservatively Managed Flexible Portfolio.
Participants may elect to have their Accounts treated as if
invested in one or more of the funds selected, provided the
election is in at least twenty-five percent (25%) increments of
the Account. Participants may change their measuring fund
elections for the succeeding Plan Year by giving the Committee
written notice of the new election during an Enrollment Period
(whether or not that Enrollment Period is prior to this Plan Year
to which a Permissible Deferral election first applies). The
Participant's account will be reduced by the Account's
proportionate share (based on Account balances of all Participants
electing a variable rate) of the annual administrative charges
determined from Schedule A attached hereto, which may be amended
from time to time by the Committee, and/or applicable
administrative assessments.
ARTICLE 5. DISTRIBUTION OF BENEFITS.
Section 5.1 Payments After Retirement as a Director.
Payments shall be made by the Company only upon the retirement,
voluntary or involuntary, of the Participant as a Director.
Section 5.2 Form of Benefits Upon Retirement. Payments
from the Account shall be made in accordance with the Standard Form of
Benefit. However, the Participant in this Plan Year prior to payment of
benefits may petition the Committee for, and the Committee may approve
at such time, one of the following optional forms of benefit:
(a) monthly payments over a five (5) year period; or
(b) a single distribution.
Section 5.3 Amount of Benefit. The benefit payment shall be
a level amount for each twelve (12) month period calculated using the
balance in the Account at the beginning of the twelve (12) month period
and dividing it by the total periods remaining in the entire payment
period. The benefit payment shall be adjusted each subsequent twelve
(12) month period to reflect the Account as of that time. The Account
shall continue to be credited during the payment period with gains and
losses as provided in Section 4.2.
Section 5.4 Time of Payment. Unless the Committee
determines otherwise, benefit payments shall begin no later than six (6)
months after retirement as a Director. The Participant may elect to
defer commencement of the payment of benefits for a period up to five
(5) years after retirement as a Director with the approval of the
Committee.
Section 5.5 Death Benefits.
5.5.1. Death After Benefit Commencement. In the event a
Participant dies on or after the time benefits commence, the
remaining benefit payments, if any, shall be paid to the
Participant's Beneficiary in the same manner such benefits would
have been paid to the Participant had the Participant survived.
The Beneficiary may petition the Committee to make a single sum
distribution as an alternative method of payment.
5.5.2. Death Prior to Benefit Commencement. In the event a
Participant dies prior to the time benefits commence, the Company
shall make payments to the Beneficiary from the Participant's
Account in accordance with the Standard Form of Benefit. The
Beneficiary may petition the Committee to make a single sum
distribution as an alternative method of payment.
5.5.3. Marital Deduction. Any benefits which become
payable under this Article 5 to the surviving spouse of a
participant shall be paid in a manner which will qualify such
benefits for a marital deduction in the estate of a deceased
Participant under the terms of Section 2056 of the Code, and
unless specifically directed by a Participant pursuant to an
effective beneficiary designation, any portion of a Participant's
death benefit payable to a surviving spouse which remains unpaid
at the death of such spouse shall be paid to the spouse's estate.
5.5.4. Designation by Participant. Each participant has
the right to designate primary and contingent Beneficiaries for
death benefits payable under this Plan. Such Beneficiaries may be
individuals or trusts for the benefit of individuals. A
beneficiary designation by a Participant shall be in writing on a
form acceptable to the Committee and shall only be effective upon
delivery to the Company. A beneficiary designation may be revoked
by a Participant at any time by delivering to the Company either
written notice of revocation or a new beneficiary designation
form. The beneficiary designation form last delivered to the
Company prior to the death of a Participant shall control.
5.5.5. Failure to Designate Beneficiary. In the event
there is no beneficiary designation on file with the Company, or
all Beneficiaries designated by a Participant have predeceased the
Participant, the benefits payable by reason of death of the
Participant shall be paid to the Participant's spouse, if living;
if the Participant does not have a surviving spouse, to the
Participant's issue by right of representation; or, if there are
no such issue then living, to the Participant's estate. In the
event there are benefits remaining unpaid at the death of a sole
Beneficiary and no successor Beneficiary has been designated,
either by the Participant or the Participant's spouse pursuant to
5.5.3, the remaining balance of such benefit shall be paid to the
deceased Beneficiary's estate; or, if the deceased Beneficiary is
one of multiple concurrent Beneficiaries, such remaining benefits
shall be paid proportionally to the surviving Beneficiaries.
Section 5.6 Claims Procedure. The Committee shall notify a
Participant in writing within ninety (90) days of the Participant's
written application for benefits of his or her eligibility or non-
eligibility for benefits under this Plan. If the Committee determines
that a Participant is not eligible for benefits or full benefits, the
notice shall set forth (1) the specific reasons for such denial, (2) a
specific reference to the provision of this Plan on which the denial is
based, (3) a description of any additional information or material
necessary for the claimant to perfect his claim, and a description of
why it is needed, and (4) an explanation of this Plan's claims review
procedure and other appropriate information as to the steps to be taken
if the Participant wishes to have his claim reviewed. If the Committee
determines that there are special circumstances requiring additional
time to make a decision, the Committee shall notify the Participant of
the special circumstances and the date by which a decision is expected
to be made, and may extend the time for up to an additional 90-day
period. If a Participant is determined by the Committee not to be
eligible for benefits, or if the Participant believes that he or she is
entitled to greater or different benefits, the Participant shall have
the opportunity to have his or her claim reviewed by the Committee by
filing a petition for review with the Committee within sixty (60) days
after receipt by him of the notice issued by the Committee. Said
petition shall state the specific reasons the Participant believes he is
entitled to greater or different benefits. Within sixty (60) days after
receipt by the Committee of said petition, the Committee shall afford
the Participant (and his or her counsel, if any) an opportunity to
present his or her position to the Committee orally or in writing, and
said Participant (or his or her counsel) shall have the right to review
the pertinent documents, and the Committee shall notify the Participant
of its decision in writing within said sixty (60) day period, stating
specifically the basis of said decision written in a manner calculated
to be understood by the Participant and the specific provisions of this
Plan on which the decision is based. If, because of the need for a
hearing, the sixty (60) day period is not sufficient, the decision may
be deferred for up to another sixty (60) day period at the election of
the Committee, but notice of this deferral shall be given to the
Participant.
ARTICLE 6. FUNDING
Section 6.1 Source of Benefits. All benefits under this
Plan shall be paid when due by the Company out of its assets or from an
irrevocable trust established by the Company for that purpose. The
Company may, but shall have no obligation to, make such advance
provision for the payment of such benefits as the Board may from time to
time consider appropriate.
Section 6.2 No Claim on Specific Assets. In the event the
Company shall determine in its discretion to make advance provision for
any portion of its obligations under this Plan, any amounts so set
aside, in a trust or otherwise, shall nonetheless remain the exclusive
property of the Company and shall in no event be deemed to constitute a
segregated fund for the benefit of any Participant. No Participant
shall be deemed to have, by virtue of being a Participant in this Plan,
any claim on any specific assets of the Company such that the
Participant would be subject to income taxation on his benefits under
this Plan prior to distribution. The rights of Participants and
Beneficiaries to benefits to which they are otherwise entitled under
this Plan shall be those of an unsecured creditor of the Company.
ARTICLE 7. ADMINISTRATION AND FINANCES.
Section 7.1 Administration. The Plan shall be administered
by the employee benefits department of the Company under the direction
of the Committee. The Company shall bear all administrative costs of
this Plan other than those specifically charged to a Participant or
Beneficiary pursuant to Section 4.2 of this Plan.
Section 7.2 Powers of the Committee. In addition to all
other powers granted under this Plan, the Committee shall have all
powers necessary to administer this Plan, including, without limitation,
powers:
(a) to interpret the provisions of this Plan;
(b) to establish and revise the method of accounting for
this Plan and to maintain the Accounts; and
(c) to establish rules for the administration of this Plan
and to prescribe any forms required to administer this Plan.
Section 7.3 Actions of the Committee. All determinations,
interpretations, rules, and decisions of the Committee shall be
conclusive and binding upon all persons having or claiming to have any
interest or right under this Plan.
Section 7.4 Delegation. The Committee shall have the power
to delegate specific duties and responsibilities to officers or other
employees of the Company or other individuals or entities. Any
delegation by the Committee may allow further delegations by the
individual or entity to whom the delegation is made. Any delegation may
be rescinded by the Committee at any time. Each person or entity to
whom a duty or responsibility has been delegated shall be responsible
for the exercise of such duty or responsibility and shall not be
responsible for any act or failure to act of any other person or entity.
Section 7.5 Reports and Records. The Committee and those
to whom the Committee has delegated duties under this Plan shall keep
records of all their proceedings and actions and shall maintain books of
account, records, and other data as shall be necessary for the proper
administration of this Plan and for compliance with applicable law.
ARTICLE 8. AMENDMENTS AND TERMINATION
Section 8.1 Amendments. The Company, by action of the
Board, may amend this Plan, in whole or in part, at any time and from
time to time. Any such amendment shall be filed with this Plan
documents. No amendment, however, may be effective to eliminate or
reduce the benefits of any retired Participant or the Beneficiary of any
deceased Participant then eligible for benefits or the benefits, if any,
in any active Participant's Account immediately before the effective
date of such amendment, plus interest, gains or losses previously
credited, or to be credited thereafter, in accordance with Section 4.2
of this Plan, whether or not they represent Completed Deferral Cycles.
Section 8.2 Termination. The Company expects this Plan to
be permanent, but necessarily must, and hereby does, reserve the right
to terminate this Plan at any time by action of the Board. Any such
termination shall not operate to eliminate or reduce benefits of any
retired Participant or the Beneficiary of any deceased Participant then
eligible for benefits, or the benefits, if any, in any active
Participant's Account immediately before the effective date of such
termination, plus interest, gains or losses previously credited, or to
be credited thereafter, in accordance with Section 4.2 of this Plan,
whether or not they represent Completed Deferral Cycles.
If this Plan shall at any time be terminated, payments from
the Accounts of all Participants and Beneficiaries shall be made in a
single distribution.
ARTICLE 9. MISCELLANEOUS
Section 9.1 No Guarantee of Directorship. Neither the
adoption and maintenance of this Plan nor the execution by the Company
of a Permissible Deferral agreement with any Director shall be deemed to
be a contract between the Company and any Participant as a Director.
Nothing contained herein shall give any Participant the right to be
retained as a Director or to interfere with the right of the Company to
discharge any Participant at any time as a Director, nor shall it give
the Company the right to require any Participant to remain as a Director
or to interfere with the Participant's right to terminate his or her
role as a Director at any time.
Section 9.2 Release. Any payment of benefits to or for the
benefit of a Participant or a Participant's Beneficiaries that is made
in good faith by the Company in accordance with the Company's
interpretation of its obligations hereunder, shall be in full
satisfaction of all claims against the Company for benefits under this
Plan to the extent of such payment.
Section 9.3 Notices. Any notice permitted or required
under this Plan shall be in writing and shall be hand delivered or sent,
postage prepaid, certified or registered mail with return receipt
requested, to the principal office of the Company, if to the Company, or
to the address last shown on the records of the Company, if to a
Participant or Beneficiary. Any such notice shall be effective as of
the date of hand delivery or mailing.
Section 9.4 Non-Alienation. No benefit payable at any time
under this Plan shall be subject in any manner to alienation, sale,
transfer, assignment, pledge, levy, attachment, or encumbrance of any
kind.
Section 9.5 Tax Liability. The Company may withhold from
any payment or benefits under this Plan (and forward to the appropriate
taxing authority) any taxes required to be withheld under applicable
law.
Section 9.6 Change in Control.
Section 9.6.1 Definitions. Whenever used in this section,
the following words and phrases shall have the meanings set forth
below unless the context plainly requires a different meaning, and
when a defined term is intended, the term is capitalized.
(a) "Affected Participant" means any Participant or
Beneficiary with an Account in this Plan on the date
("Date") of a Change in Control of the Company except
any Participant who has delivered to the Company,
prior to the Date of a Change in Control of the
Company, a signed letter stating that such Participant
has elected not to receive a lump sum payment
contemplated and provided for in Section 9.6.2 hereof
(subject to adjustment pursuant to the provisions of
Section 9.6.3 hereof) in the event of a Change in
Control of the Company; provided, however, that any
such Participant shall have the right to withdraw such
election by delivering a signed letter to that effect
to the Company at any time prior to the Date of a
Change in Control of the Company.
(b) A "Change in Control of the Company" shall mean the
occurrence of one of the following:
(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20%
or more of either (i) the then outstanding
shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined
voting power of the then outstanding voting
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Voting Securities"); provided,
however, that for purposes of this subsection
(1), the following acquisitions shall not
constitute a Change of Control of the Company:
(i) any acquisition directly from the Company,
(ii) any acquisition by the Company, (iii) any
acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the
Company or any corporation controlled by the
Company or (iv) any acquisition by any
corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of
subsection (3) of this Section 9.6.1(b); or
(2) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least a
majority of the Board; provided, however, that
any individual becoming a director subsequent to
the date hereof whose election, or nomination
for election by the Company's shareholders, was
approved by a vote of at least a majority of the
directors then comprising the Incumbent Board
shall be considered as though such individual
were a member of the Incumbent Board, but
excluding, for this purpose, any such individual
whose initial assumption of office occurs as a
result of an actual or threatened election
contest with respect to the election or removal
of directors or other actual or threatened
solicitation of proxies or consents by or on
behalf of a Person other than the Board; or
(3) consummation of a reorganization, merger or
consolidation or sale or other disposition of
all or substantially all of the assets of the
Company (a "Business Combination"), in each
case, unless, following such Business
Combination, (i) all or substantially all of the
individuals and entities who were the beneficial
owners, respectively, of the Outstanding Common
Stock and Outstanding Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more
than 60% of, respectively, the then outstanding
shares of common stock and the combined voting
power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the
corporation resulting from such Business
Combination (including, without limitation, a
corporation which as a result of such
transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions as their
ownership, immediately prior to such Business
Combination of the Outstanding Common Stock and
Outstanding Voting Securities, as the case may
be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company
or such corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the
corporation resulting from such Business
Combination or the combined voting power of the
then outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (iii) at least a majority of the
members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent Board
at the time of the execution of the initial
agreement, or of the action of the Board,
providing for such Business Combination; or
(4) approval by the shareholders of the Company of a
complete liquidation or dissolution of the
Company.
Section 9.6.2. Change in Control of the Company.
Notwithstanding any provisions to the contrary contained in this
Plan, upon the occurrence of a Change in Control of the Company,
the fact and the date ("Date") of which are to be determined
finally and conclusively by the Chief Executive Officer of the
Company or by the Vice President and Chief Financial Officer of
the Company, to be evidenced by a letter signed by such officer,
addressed and delivered to the Committee of the Board, the Account
of each Affected Participant under this Plan shall automatically
and simultaneously, without further action, determination or
notice of any kind, be credited with interest, gains and losses,
as described under Section 4.2 hereof, and the aggregate amount
credited to each Affected Participant shall be paid immediately by
the Company to each Affected Participant or Beneficiary of an
Affected Participant, in a single distribution.
If a Change in Control of the Company occurs and both the
Chief Executive Officer of the Company and the Vice President and
Chief Financial Officer of the Company fail, for any reason
whatsoever, to sign, address and deliver to the Committee of the
Board of Directors the letter described above in this Section
9.6.2, such failure shall not affect in any manner the obligation
of the Company or the full right, title and interest of each
Affected Participant under this Plan to receive from the Company
the full amount of the lump sum payment determined and calculated
in accordance with the foregoing provisions of this Section 9.6.2,
subject to adjustment pursuant to the provisions of Section 9.6.3
hereof; and the entitlement of each Affected Participant to
receive such sum from the Company shall be valid and enforceable
by each Affected Participant in any state or federal court having
jurisdiction thereof.
Section 9.6.3. Parachute Payments. In the event it shall
be determined that any payment by the Company to or for the
benefit of the Participant hereunder (determined without regard to
any additional payments required under this Section 9.6.3) (a
"Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the
Affected Participant with respect to such excise tax (such excise
tax, together with any such interest and penalties, are
hereinafter collectively referred to as the "Excise Tax"), then
the Affected Participant shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Affected Participant of all taxes (including
any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest
and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, the Affected Participant retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payment.
For purposes of these calculations, all applicable amounts shall
be determined by the Company's independent auditors.
Section 9.7 Captions. Article and section headings and
captions are provided for purposes of reference and convenience only and
shall not be relied upon in any way to construe, define, modify, limit,
or extend the scope of any provision of this Plan.
Section 9.8 Applicable Law. The Plan and all rights
hereunder shall be governed by and construed according to the laws of
the State of Minnesota, except to the extent such laws are preempted by
the laws of the United States of America.
SCHEDULE A - ANNUAL ADMINISTRATIVE CHARGES
Portfolio Gross Crediting Rate Annual Administrative Charge
Up to 9.99% 1.40%
10.00% to 11.99% 1.00%
12.00% and above 0.00%