Exhibit 10.21
[MULTIFOODS LETTERHEAD] Memo
DATE: September 20, 1996
TO: Frank W. Bonvino
FROM: Robert F. Maddocks
Executive Vice President
SUBJECT: SUPPLEMENTAL RETIREMENT AGREEMENT
The intent of this memorandum is to set forth the terms of a
supplemental benefit arrangement that will be provided to you if your
employment ends prior to retirement, conditioned upon your acceptance of
the terms of this arrangement.
The arrangement will provide you with two benefits - a "supplemental
retirement benefit" and a "severance benefit" - provided that you
qualify for such benefits.
The supplemental retirement benefit is designed around the Pension
Equity Plan and the Management Benefit Plan. The general intent of this
benefit is to provide you with the early retirement subsidy that you
would have been entitled to receive under the Pension Equity Plan if you
were three years older than your actual age. Because at age sixty-two
(62) you will be eligible for a full retirement benefit under the
Pension Equity Plan (unreduced from age sixty-five (65)), you will not
receive a supplement if your employment ends after that age.
The severance benefit provides you with a lump-sum payment equal to one
times your annual base salary. It may be paid in two installments at
the discretion of the Company.
The benefits are "nonqualified" benefits and will be paid from the
general assets of the Company. Your rights will be those of a general
creditor of the Company.
To evidence your acceptance of the terms of this supplemental benefit
arrangement, please sign this document and return it to me at your
earliest convenience. The document is referred to herein as the
"Agreement."
I
Supplemental Retirement Benefit
1.1 Eligibility. You will be eligible to receive the
"supplemental retirement benefit" set forth below if both of the
following conditions are satisfied:
(a) Your termination of employment is initiated by action of
the Company other than for Cause, by your action for Good Reason, or by
your action or action of the Company following a Change of Control.
(b) Your termination of employment occurs prior to the date on
which you attain age sixty-two (62).
1.2 Benefit Amount. The supplemental retirement benefit will be
calculated as a monthly benefit and will be equal to "A" minus "B" minus
"C" below:
A = The monthly benefit to which you would have been entitled
under the PEP if:
(i) You had elected to have your benefit under the PEP
calculated under the Grandfathered Formula and paid in the form of a
single life annuity (regardless of whether you actually make such
elections),
(ii) The limits imposed under Code sections 401(a)(17) and 415
did not apply to your benefit under the PEP,
(iii) You had twenty-five (25) years of Credited Service under
the PEP (or your actual number of years of Credited Service if greater
than twenty-five (25)), and
(iv) Your date of birth was five (5) years earlier than your
actual date of birth; except that, this provision will not cause your
deemed age to be older than age sixty-two (62).
minus
B = The monthly benefit payable to you under the MBP because of
the limits imposed under Code sections 401(a)17 and 415.
minus
C = The monthly benefit payable to you under the PEP.
All monthly benefits described above will be expressed in the form of a
single life annuity starting as of the date you elect to start your
pension under the PEP.
1.3 Form of Benefit. The supplemental retirement benefit will be
paid to you in the form of a single life annuity with monthly benefit
payments. However, at the sole discretion of the Company, it may be paid
in any other form. If it is paid in any form other than a single life
annuity, the benefit will be adjusted so that it is the Actuarial
Equivalent of the benefit that would have been paid as a single life
annuity.
1.4 Commencement of Benefit. The supplemental retirement benefit
will start as of the same day as the benefit paid to you under the PEP.
1.5 Spouse Benefit. If you become eligible for a supplemental
retirement benefit but you die before the supplemental retirement
benefit is paid or starts to be paid to you, and you are survived by a
spouse, that spouse will be entitled to a monthly benefit payable in the
form of a single life annuity equal to the difference between the
"qualified preretirement survivor annuity" (as defined in section
417(c)) that would have been paid under the Grandfathered Formula under
the PEP if your benefit were as calculated under this Agreement, and the
actual qualified preretirement survivor annuity payable under the MBP
and under the Grandfathered Formula under the PEP.
No survivor benefits are payable with respect to the supplemental
retirement benefit other than as provided above.
II
SEVERANCE BENEFITS
2.1 Eligibility. You will be eligible to receive the severance
benefit set forth below if your termination of employment is initiated
by action of the Company other than for Cause, or by your action for
Good Reason.
2.2 Benefit Amount. The severance benefit will be calculated as a
single lump-sum benefit, and will be equal to your annual base salary in
effect immediately prior to your termination of employment.
2.3 Form of Benefit. The severance benefit will be paid to you in
the form of a single lump-sum payment. However, at the sole discretion
of the Company, it may be paid in two installments with the first
installment being at least equal to the lump-sum amount multiplied by a
fraction, the numerator of which is the number of full calendar months
remaining in the calendar year in which your termination of employment
occurs and the denominator of which is twelve (12). If paid in
installments, the second installment will be paid as soon as practicable
after the end of the calendar year in which your termination of
employment occurs, and will equal the remaining lump-sum amount.
2.4 Payment Date. The severance benefit (or the first severance
benefit installment) will be paid to you as soon as administratively
practicable after your termination of employment.
2.5 Survivor Benefit. If you become eligible for a severance
benefit but die before the severance benefit is paid in full, the
benefit (or the remaining portion thereof) will be paid to the first of
the following persons in order of priority: (i) your surviving spouse,
(ii) your surviving children in equal shares, (iii) your estate.
III
MISCELLANEOUS
3.1 Definitions. The following terms are used herein:
(a) "Actuarial Equivalent" means a benefit of equivalent value
when computed on the basis of mortality and interest rate assumptions
recommended by an actuary and approved by the Vice President - Finance
and Chief Financial Officer or the Vice President and Controller of the
Company.
(b) "Cause" means:
(1) Your willful and continued failure to perform
substantially your duties with the Company (other than any such failure
resulting from incapacity due to physical or mental illness), after a
written demand for substantial performance is delivered to you 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 you have not substantially performed your duties; or
(2) Your willful engaging 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 your part,
shall be considered "willful" unless it is done, or omitted to be done,
by you in bad faith or without reasonable belief that your 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 you in good faith and in the best interests of the Company.
The cessation of your employment shall not be deemed to be for Cause
unless and until there shall have been delivered to you 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
you and you are given an opportunity, together with counsel, to be heard
before the Board), finding that, in the good faith opinion of the Board,
you are guilty of the conduct described in subparagraph (1) or (2)
above, and specifying the particulars thereof in detail.
(c) "Change of Control" means:
(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 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 (1), 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; 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 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
(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 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
(4) Approval by the stockholders of a Company of a complete
liquidation or dissolution of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as amended.
(e) "Company" means International Multifoods Corporation, and 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.
(f) "Good Reason" means:
(1) The assignment to you of any duties inconsistent in any
respect with your position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities, as of
the effective date 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 you;
(2) Any reduction in your annual base salary as in effect
immediately prior to the effective date of this Agreement, or, if
higher, your highest annual base salary in effect at any time after the
effective date of this Agreement;
(3) The Company's requiring you to be based at any office or
location other than the corporate headquarters office in Minneapolis,
Minnesota, or any office or location within 50 miles of such location,
or the Company's requiring you to travel on Company business to a
substantially greater extent than required immediately prior to the
effective date of this Agreement; or
(5) Any failure by the Company to 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.
For purposes of this section, any good faith determination of "Good
Reason" made by you shall be conclusive.
(g) "Grandfathered Formula" means the benefit formula set forth in
Appendix B of the PEP, which is a continuation of the benefit formula in
effect under the Employees' Retirement Plan of International Multifoods
Corporation as of December 31, 1995.
(h) "MBP" means the Management Benefit Plan of the Company, as it
may be amended from time to time.
(i) "PEP" means the Multifoods Pension Equity Plan, as adopted
January 1, 1996 (as a continuation of the Employees' Retirement Plan of
International Multifoods Corporation), as it may be amended from time to
time.
3.2 Governing Law/Construction. 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.
3.3 No Effect on Employment Rights. This Agreement is not an
employment agreement and nothing in this Agreement will confer on you
the right to be retained in the employ of the Company, or limit any
right of the Company to discharge you or otherwise deal with you without
regard to the existence of this Agreement.
3.4 FICA Taxes/Withholding. To the extent that benefit accruals
hereunder are taken into account as amounts deferred under a
nonqualified deferred compensation plan under Code section 3121(v), and
thus are subject to tax under Code section 3101 ("FICA"), the Company
may calculate the amount deferred and withhold against other
compensation paid to you in any manner determined by it to be
appropriate under Code section 3121(v).
3.5 Other Taxes/Withholding. The Company may withhold from any
amounts payable under this Agreement such federal, state, local or other
taxes as shall be required to be withheld pursuant to any applicable law
or regulation.
* * *
Please indicate your receipt and acceptance of the terms of this
Agreement by signing one of the enclosed copies and returning it at your
earliest convenience.
INTERNATIONAL MULTIFOODS CORPORATION
/s/ Robert F. Maddocks
------------------------------------
By: Robert F. Maddocks
Its: Executive Vice President
cc: R. M. Price
J. G. Traver
____________________________________________________________
ACCEPTANCE
I, Frank W. Bonvino, hereby acknowledge receipt of this Agreement
and wish to accept the supplemental benefit arrangement offered by this
Agreement.
Dated: September 27, 1996
Frank W. Bonvino
/s/ Frank W. Bonvino
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