Exhibit 10.18
September 24, 1996
Jeffrey Boies
[address]
Dear Jeff:
I am pleased to extend to you an offer of employment with International
Multifoods Corporation ("Multifoods"). The offer reflects our recent
discussion in which you described your present total compensation and
expressed your expectations in certain areas.
1. The position being offered is President, VSA, Inc., a subsidiary of
Multifoods.
2. In this position you will report directly to Robert M. Price, Chairman
and Chief Executive Officer, Multifoods and his successor when appointed
by the Board of Directors.
3. The effective date of your employment with VSA, Inc. will be no later
than November 1, 1996. We anticipate an earlier start date, however, we
understand that is subject to your availability based on present
business commitments. Your primary office will be in Denver, Colorado.
The VSA, Inc. headquarters office is located at 370 17th Street, Suite
1400, Denver, Colorado 80217.
4. Your starting salary will be $285,000 annually with a commitment to a
performance based salary increase of $20,000 within 12 months (November
1, 1997). "Performance based" means reasonable performance based on
achieving the FY98 business plan.
5. Since you will be joining VSA, Inc. on November 1, 1996, Multifoods will
guarantee the bonus you would likely have received from your present
employer. If your bonus for 1996 would have been $160,000 then $80,000
will be treated as an employment bonus to be paid by November 15, 1996
and $80,000 will be treated as a guaranteed bonus to be paid by April
15, 1997. You agree to reimburse Multifoods for $80,000 if you
voluntarily terminate within a period of one year, November 1, 1996 -
October 31, 1997.
6. A recommendation will be made to the Compensation Committee of the Board
of Directors of Multifoods for the following:
(a) A stock option grant of 6,000 shares of Multifoods Common Stock. The
grant price will be the average price of Multifoods stock on your date
of employment; you will also be considered for a stock option grant when
the Compensation Committee meets in March at which time grants are
considered for all senior executives. The recommendation to the
Committee will be for no less than 4,000 shares.
(b) In consideration of the expected loss on your present employer's match
to the deferred incentive funds and the loss on matching 401(K) shares,
a restricted stock grant of 8,650 shares of Multifoods stock will be
recommended to the Committee. This value is determined based on the
$79,000 of value at risk with the incentive match and $68,000 at risk
with the 401(K) match. You agree to confirm the actual loss of value at
the time of your employment with Multifoods. The number of restricted
shares granted may be modified to reflect a greater or lessor loss of
value.
(c) You will be recommended for participation in the Multifoods' Management
Benefit Plan. You will also be eligible for the Multifoods' Pension
Equity Plan. Considering your retirement opportunity at age 60 with
your present employer, the following Supplemental Retirement Plan will
be proposed to the Committee. This arrangement would provide retirement
benefits (in addition to any other benefits payable under the qualified
or non-qualified retirement plans of Multifoods) based upon the benefits
you would have received from the Pension Equity Plan and the Management
Benefit Plan had your service from your employment date counted double
for both benefit accrual and vesting purposes. In addition, the
hypothetical Pension Equity Plan benefit would be calculated assuming
you had satisfied the age and service requirements necessary to qualify
for the "grandfather" benefit formula. This would allow you to receive
pension benefits under the prior Employees' Retirement Plan formula if
that formula would produce a larger benefit than the new Pension Equity
Plan formula.
(d) We will also recommend to the Compensation Committee that you receive a
Change of Control agreement similar to that of other executives of
Multifoods.
7. You will be protected in the case of involuntary termination, except for
cause. If involuntary termination should occur during the first year of
your employment November 1, 1996 - October 31, 1997 you will receive
three years' salary as a severance payment. If the termination should
occur during the second year of employment, November 1, 1997 - October
31, 1998, you will receive two years' salary as a severance payment.
Following the two year period, in the event of involuntary termination
you will receive one years' salary. Any severance payment will require
a release prepared by Multifoods and signed by you as well as an
agreement not to compete with Multifoods or any of its subsidiaries for
a period of one year.
8. Your annual incentive opportunity will be no less than 50% of base
salary at business plan level with a maximum incentive opportunity of
70%. However, it is our intent to design an incentive arrangement based
either on a percent of operating earnings and/or agreed upon return on
sales of VSA, Inc. that will provide an incentive opportunity
significantly in excess of the 50% target and 70% maximum opportunities.
This incentive plan will be designed by January 1, 1997 for the fiscal
year which begins on March 1, 1997.
9. Multifoods provides a comprehensive benefit program including medical,
dental, life insurance, long term disability, etc. Multifoods' medical
plan does not have a "pre-existing condition" provision, therefore your
son's condition would be covered by the medical plans. A summary of
Multifoods' benefit plans, which are comprehensive, are attached for
your review. Multifoods also has a 401(K) program called VISA. There
is a one year employment period for eligibility, however, this provision
is currently under review. Employees may contribute up to 7% of base
salary (maximum this year is $9,500) which is matched 50% with
Multifoods Common Stock.
10. You will be eligible for all benefits under the Multifoods Employee
Relocation Policy. It is a comprehensive policy and includes: home
marketing assistance (for your current residence), house hunting trips
to the new location, transportation of household goods, one month's
salary as a relocation allowance, reasonable closing costs as well as a
home buyout option. With the home buyout option, Multifoods' third
party relocation company will forward a list of qualified relocation
appraisers to you, from which you select two appraisers to determine the
market value of your home. An average of those two appraisals is taken,
and an offer made to you. If the appraisals are more than 5% apart,
then a 3rd certified relocation appraiser will be selected by you to
conduct an appraisal on your home. The offer price will be the average
of the two closest appraisals. In addition, we will provide you with
temporary living expense reimbursement for up to six months at the new
location.
11. In accordance with our prior discussion, you will be entitled to four
weeks of vacation. Our vacation year is from January 1, to December 31.
12. Also in accordance with our verbal discussion, Multifoods will pay fees
and dues for a country club membership of your choice in the Denver
area. We expect a condition of reasonableness to apply to the
selection. All expenses incurred for business use of the club will be
reimbursed based on Multifoods' policies.
Jeff, this offer is contingent upon your completion of an executive type
physical examination. If you have had a recent physical exam (within
one year) the written assurance from your doctor, followed by a written
summary of the condition of your health will constitute "satisfactory
completion."
We will also need to complete discussions with references.
We are very pleased with the prospect of having you join Multifoods. We
are counting on your contribution and strongly believe you will have a
very positive impact on the Company. We also believe that Multifoods
can offer you a significant challenge as well as growth opportunities in
the years ahead.
Will you please indicate your acceptance of this offer by signing and
dating the original letter and returning it to me at your earliest
convenience.
Very truly yours,
/s/ Robert F.Maddocks
Robert F. Maddocks
Executive Vice President
Accepted by:
Dated: 10/5/96 /s/ Jeffrey Boies
Jeffrey Boies
RFM/pr/f:boies
cc: Robert M. Price