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EXHIBIT 10.23
DEL MONTE FOODS COMPANY
1998 STOCK INCENTIVE PLAN,
AS AMENDED SEPTEMBER 23, 1998
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1. Purpose of the Plan
This Del Monte Foods Company 1998 Stock Incentive Plan is intended to
promote the interests of the Company by encouraging the Company's employees,
nonemployee directors and consultants of the Company to continue in the service
of the Company, and to provide such persons with incentives and rewards for
superior management, growth and protection of the business of the Company.
2. Definitions
As used in the Plan, the following definitions apply to the terms
indicated below:
(a) "Board of Directors" shall mean the Board of Directors of Del Monte.
(b) "Cause," when used in connection with the termination of a
Participant's employment with the Company, shall mean (i) dishonesty; (ii)
deliberate and continual refusal to perform employment duties on substantially a
full-time basis; (iii) failure to act in accordance with any specific lawful
instructions given to the Participant in connection with the performance of his
duties for the Company or any of its Subsidiaries or affiliates, unless the
Participant has an existing Disability; or (iv) deliberate misconduct which is
reasonably likely to be materially damaging to the Company without a reasonable
good faith belief by the Participant that such conduct was in the best interests
of the Company. Notwithstanding the foregoing provisions of this Section 2(b),
"Cause," when used in connection with the termination of the employment with the
Company of a Participant who at the time of such termination is a party to a
written employment or retention agreement with the Company, shall have the
meaning assigned to such term in such agreement.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(d) "Committee" shall mean the Compensation Subcommittee of the Board of
Directors or such other committee as the Board of Directors shall appoint from
time to time to administer the Plan.
(e) "Common Stock" shall mean Del Monte's common stock, $0.01 par value
per share.
(f) "Company" shall mean Del Monte and each of its Subsidiaries.
(g) "Consultant" shall mean any consultant, independent contractor, or
other person who provides significant services to the Company, but who is
neither an Employee nor a Director.
(h) "Director" shall mean a member of the Board of Directors, whether or
not such individual also is an Employee.
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(i) "Disability" shall mean physical or mental disability as a result of
which the Participant is unable to perform his duties with the Company on
substantially a full-time basis for any period of six (6) consecutive months.
Any dispute as to whether or not the Participant is so disabled shall be
resolved by a physician reasonably acceptable to the Participant and the Company
whose determination shall be final and binding upon both the Participant and the
Company. Notwithstanding the foregoing provisions of this Section 2(i),
"Disability," when used in connection with the termination of the employment
with the Company of a Participant who at the time of such termination is a party
to a written employment or retention agreement with the Company, shall have the
meaning assigned to such term in such agreement.
(j) "Employee" shall mean any employee of the Company, whether such
employee is so employed at the time the Plan is adopted or becomes so employed
subsequent to the adoption of the Plan.
(k) the "Fair Market Value" of a share of Common Stock with respect to
any day shall be (i) the average of the high and low sales prices on such day of
a share of Common Stock as reported on the principal securities exchange on
which shares of Common Stock are then listed or admitted to trading or (ii) if
not so reported, the average of the closing bid and ask prices on such day as
reported on the National Association of Securities Dealers Automated Quotation
System or (iii) if not so reported, as furnished by any member of the National
Association of Securities Dealers, Inc. selected by the Committee. In the event
that the price of a share of Common Stock shall not be so reported, the Fair
Market Value of a share of Common Stock shall be determined by the Committee in
its absolute discretion.
(l) "Incentive Award" shall mean an Option, Tandem SAR, Stand-Alone SAR
or Stock Bonus granted pursuant to the terms of the Plan.
(m) "Incentive Stock Option" shall mean an Option which is an "incentive
stock option" within the meaning of Section 422 of the Code and which is
identified as an Incentive Stock Option in the agreement by which it is
evidenced.
(n) "Non-Qualified Stock Option" shall mean an Option which is not an
Incentive Stock Option and which is identified as a Non-Qualified Stock Option
in the agreement by which it is evidenced.
(o) "Del Monte" shall mean Del Monte Foods Company, a Delaware
corporation, and its successors.
(p) "Option" shall mean an option to purchase shares of Common Stock of
Del Monte granted pursuant to Section 6 hereof. Each Option shall be identified
as either an Incentive Stock Option or a Non-Qualified Stock Option in the
agreement by which it is evidenced.
(q) "Participant" shall mean an Employee, Director or Consultant to whom
an Incentive Award is granted pursuant to the Plan, and upon his death, his
successors, heirs, executors and administrators, as the case may be.
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(r) "Plan" shall mean this Del Monte Foods Company 1998 Stock Incentive
Plan, as it may be amended from time to time.
(s) "Rule 16b-3" shall mean Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended, and any future regulation amending,
supplementing or superseding such regulation.
(t) "Section 16 Person" shall mean a person who, with respect to the
Common Stock, is subject to Section 16 of the Securities Exchange Act of 1934,
as amended.
(u) "Stand-Alone SAR" shall mean a stock appreciation right granted
pursuant to Section 8 hereof which is not related to any Option.
(v) "Stock Bonus" shall mean a grant of a bonus payable in shares of
Common Stock pursuant to Section 9 hereof.
(w) "Subsidiary" shall mean any "subsidiary corporation" within the
meaning of Section 424(f) of the Code.
(x) "Tandem SAR" shall mean a stock appreciation right granted pursuant
to Section 7 hereof which is related to an Option. Each Tandem SAR shall be
exercisable only to the extent its related Option is exercisable and only in the
alternative to the exercise of its related Option.
(y) "Change of Control" shall mean the occurrence of one or more of the
following events:
(1) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any individual, partnership, corporation, limited liability company,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof (a "Person") or group of related Persons for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a
"Group"), together with any Affiliates (as defined below) thereof other than to
TPG Partners, L.P. ("TPG") or its Affiliates;
(2) the approval by the holders of any and all shares, interests,
participations or other equivalents (however designated and whether or not
voting) of corporate stock, including each class of common stock and preferred
stock, of the Company ("Capital Stock") of any plan or proposal for the
liquidation or dissolution of the Company;
(3) (i) any Person or Group (other than TPG or its Affiliates) shall
become the owner, directly or indirectly, beneficially or of record, of shares
representing more than 40% of the aggregate ordinary voting power represented by
the issued and outstanding Capital Stock (the "Voting Stock") of the Company and
(ii) TPG and its Affiliates shall beneficially own, directly or indirectly, in
the aggregate a lesser percentage of the Voting Stock of the Company than such
other Person or Group; or
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(4) the replacement of a majority of the Board of Directors over a
two-year period from the directors who constituted the Board of Directors at the
beginning of such period, and such replacement shall not have been approved by a
vote of at least a majority of the Board of Directors then still in office who
either were members of such Board of Directors was previously so approved or who
were nominated by, or designees of TPG or its Affiliates.
For purposes of this Section 2(y), "Affiliate" shall mean, with respect
to any specified Person, any other Person who directly or indirectly through one
or more intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term "control" means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" or "controlled" have meanings
correlative of the foregoing.
(z) A "Public Market" for the Common Stock shall be deemed to exist if
the Common Stock is registered under Section 12(b) or 12(g) of the Securities
Exchange Act of 1934, as amended, or if trading regularly occurs in such Common
Stock in, on or through the facilities of securities exchanges and/or
inter-dealer quotation systems in the United States (within the meaning of
Section 902(n) of the Securities Act of 1933, as amended) or any designated
offshore securities market (within the meaning of Rule 902(a) of the Securities
Act of 1933, as amended).
3. Stock Subject to the Plan
(a) Maximum Shares Available for Delivery. Subject to 10 hereof, the
maximum number of shares of Common Stock that may be delivered to Participants
and their beneficiaries under the Plan shall be equal to the sum of (i)
3,195,687, and (ii) any shares of Common Stock that are represented by awards
granted under any prior plan of the Company, which are forfeited, expire or are
canceled without the delivery of shares of Common Stock or which result in the
forfeiture of shares of Common Stock back to the Company; provided, however,
that in no event shall such maximum number of shares of Common Stock exceed a
number of shares which is equal to 30% of the then outstanding shares of Del
Monte (any convertible preferred or convertible senior common shares of Del
Monte will be counted as if on a converted basis). In addition, any shares of
Common Stock granted under the Plan which are forfeited back to the Company
because of the failure to meet an Incentive Award contingency or condition shall
again be available for delivery pursuant to new Incentive Awards granted under
the Plan. Any shares of Common Stock covered by an Incentive Award (or portion
of an Incentive Award) granted under the Plan, which is forfeited or canceled,
expires or is settled in cash, including the settlement of tax withholding
obligations using shares of Common Stock, shall be deemed not to have been
delivered for purposes of determining the maximum number of shares of Common
Stock available for delivery under the respective plan. Likewise, if any Option
is exercised by tendering shares of Common Stock, either actually or by
attestation, to the Company as full or partial payment for such exercise under
this Plan or any prior plan of the Company, only the number of shares of Common
Stock issued net of the shares of Common Stock tendered shall be deemed
delivered for purposes of determining the maximum number of shares of Common
Stock
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available for delivery under the Plan. Further, shares of Common Stock issued
under the Plan through the settlement, assumption or substitution of outstanding
Incentive Awards or obligations to grant future Incentive Awards as a condition
of the Company acquiring another entity shall not reduce the maximum number of
shares of Common Stock available for delivery under the Plan. Shares of Common
Stock issued under the Plan may be either newly issued shares or treasury
shares, as determined by the Committee.
(b) Payment Shares. Subject to the overall limitation on the number of
shares of Common Stock that may be delivered under the Plan, the Committee may,
in addition to granting Incentive Awards under Section 4, use available shares
of Common Stock as the form of payment for compensation, grants or rights earned
or due under any other compensation plans or arrangements of the Company,
including those of any entity acquired by the Company.
4. Administration of the Plan
The Plan shall be administered by a Committee of the Board of Directors
consisting of two or more persons, each of whom shall be a "nonemployee
director" within the meaning of Rule 16b-3, unless otherwise determined by the
Board of Directors. The Committee shall from time to time designate the key
employees of the Company who shall be granted Incentive Awards and the amount
and type of such Incentive Awards.
The Committee shall have full discretionary authority to administer the
Plan, including authority to interpret and construe any provision of the Plan
and the terms of any Incentive Award issued under it and to adopt such rules and
regulations for administering the Plan as it may deem necessary. The Committee,
in its sole discretion and on such terms and conditions as it may provide, may
delegate all or any part of its authority and powers under the Plan to one or
more Directors. Decisions of the Committee shall be final and binding on all
parties, and shall be given the maximum deference permitted by law.
The Committee may, in its absolute discretion, accelerate the date on
which any Option or Stand-Alone SAR granted under the Plan becomes exercisable
or, subject to Section 6(c)(1) hereof, extend the term of any Option or
Stand-Alone SAR granted under the Plan.
Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment shall be
determined by the Committee.
No member of the Committee shall be liable for any action, omission, or
determination relating to the Plan, and Del Monte shall indemnify and hold
harmless each member of the Committee and each other director or employee of the
Company to whom any duty or power relating to the administration or
interpretation of the Plan has been delegated against any cost or expense
(including counsel fees) or liability (including any sum paid in settlement of a
claim with the approval of the Committee) arising out of any action, omission or
determination relating to the Plan, unless, in either case, such action,
omission or determination was taken or made by such member, director or employee
in bad faith and without reasonable belief that it was in the best interests of
the Company.
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5. Eligibility
The persons who shall be eligible to receive Incentive Awards pursuant
to the Plan shall be such Employees, Directors and Consultants as the Committee
shall select from time to time.
6. Options
The Committee may grant Options pursuant to the Plan to Participants,
which Options shall be evidenced by agreements in such form as the Committee
shall from time to time approve. Options shall comply with and be subject to the
following terms and conditions:
(a) Identification of Options
All Options granted under the Plan shall be clearly identified in the
agreement evidencing such Options as either Incentive Stock Options or as
Non-Qualified Stock Options.
(b) Exercise Price
The exercise price of any Non-Qualified Stock Option granted under the
Plan shall be such price as the Committee shall determine on the date on which
such Non-Qualified Stock Option is granted and shall not be less than 85% of the
Fair Market Value of a share of Common Stock on the date on which such
Non-Qualified Stock Option is granted; provided, that the exercise price of any
Non-Qualified Stock Option granted to an individual, who at the time of the
proposed grant owns stock possessing more than ten percent of the total combined
voting power of all classes of stock of Del Monte or any of its Subsidiaries,
shall not be less than 110% of the Fair Market Value of a share of Common Stock
on the date on which such Non-Qualified Stock Option is granted.
(c) Term and Exercise of Options
(1) Each Option shall be exercisable on such date or dates,
during such period and for such number of shares of Common Stock as shall be
determined by the Committee on the day on which such Option is granted and set
forth in the Option agreement with respect to such Option; provided, however,
that no Option will be exercisable after the expiration of ten years from the
date the Option is granted; and provided, further, that each Option shall be
subject to earlier expiration, termination, cancellation or exercisability as
provided in this Plan. Subject to earlier termination of the Option as
determined by the Committee, each Participant who is not an officer, Director or
Consultant of the Company or of a Subsidiary shall have the right to exercise an
Option at the rate of at least twenty percent over five years from the date such
Option is granted.
(2) Each Option shall be exercisable in whole or in part, subject
to the provisions of the applicable Option agreement. The partial exercise of an
Option shall not cause the expiration, termination or cancellation of the
remaining portion thereof.
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(3) An Option shall be exercised by delivering written notice to
Del Monte's principal office, to the attention of the office specified by Del
Monte. Such notice shall specify the number of shares of Common Stock with
respect to which the Option is being exercised and the effective date of the
proposed exercise and shall be signed by the Participant. Payment for shares of
Common Stock purchased upon the exercise of an Option shall be made on the
effective date of such exercise in full in cash or its equivalent. The
Committee, in its sole discretion, also may permit exercise (i) by tendering
previously acquired shares of Common Stock having an aggregate Fair Market Value
at the time of exercise equal to the total exercise price, or (ii) by any other
means which the Committee, in its sole discretion, determines to both provide
legal consideration for the Common Stock, and to be consistent with the purposes
of the Plan. In the event that, prior to the existence of a Public Market for
the Common Stock, a Participant elects to pay the exercise price upon the
exercise of an Option by the tender of previously-owned shares, the delivery by
Del Monte of certificates representing the shares of Common Stock purchased upon
such exercise shall be deferred pending a determination of the exact number of
the shares of Common Stock required to be tendered by the Participant.
(4) Any Option granted under the Plan may be exercised by a
broker-dealer acting on behalf of a Participant if (i) the broker-dealer has
received from the Participant or Del Monte a fully- and duly-endorsed agreement
evidencing such Option and instructions signed by the Participant requesting Del
Monte to deliver the shares of Common Stock subject to such Option to the
broker-dealer on behalf of the Participant and specifying the account into which
such shares should be deposited, (ii) adequate provision has been made with
respect to the payment of any withholding taxes due upon such exercise or, in
the case of an Incentive Stock Option, the disposition of such shares and (iii)
the broker-dealer and the Participant have otherwise complied with Section
220.3(e)(4) of Regulation T, 12 CFR Part 220.
(5) Certificates for shares of Common Stock purchased upon the
exercise of an Option (which may be in book entry form) shall be issued in the
name of the Participant and delivered to the Participant as soon as practicable
following the effective date on which the Option is exercised.
(6) During the lifetime of a Participant, each Option granted to
him shall be exercisable only by him. No Option shall be assignable or
transferable other than by will, the laws of descent and distribution, or to the
limited extent provided in Paragraph 17 hereof.
(7) Subject to earlier termination pursuant to Section 7(b)(2)
and 10(d), exercise of an Option shall always be subject to the following:
(i) In the event of the termination of the employment of a
Participant with the Company for Cause, each Option then outstanding shall
expire and be cancelled upon such termination.
(ii) In the event that the employment of a Participant
with the Company shall be terminated other than by the Company for Cause or on
account of Disability or death of the Participant (A) Options granted to such
Participant, to the extent that they were exercisable at the time of such
termination, shall remain exercisable until the expiration of ninety
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(90) days after such termination, on which date they shall expire, and (B)
Options granted to such participant, to the extent that they were not
exercisable at the time of such termination, shall expire at the close of
business on the date of such termination; provided, however, that no Option
shall be exercisable after the expiration of its term.
(iii) In the event that the employment of a Participant
with the Company shall terminate on account of Disability or death of the
Participant, (A) Options granted to such Participant, to the extent that they
were exercisable at the time of such termination, shall remain exercisable until
the expiration of one (1) year after such termination, on which date they shall
expire, and (B) Options granted to such Participant, to the extent that they
were not exercisable at the time of such termination, shall expire at the close
of the business on the date of such termination; provided, however, that no
Option shall be exercisable after the expiration of its term.
(d) Limitations on Grant of Incentive Stock Options
(1) The aggregate Fair Market Value of shares of Common Stock
with respect to which "incentive stock options" (within the meaning of Section
422 of the Code) are exercisable for the first time by a Participant during any
calendar year under the Plan and any other stock option plan of the Company (or
any "subsidiary" of Del Monte as such term is defined in Section 424 of the
Code) shall not exceed $100,000. Such Fair Market Value shall be determined as
of the date on which each such incentive stock option is granted. In the event
that the aggregate Fair Market Value of shares of Common Stock with respect to
such incentive stock options exceeds $100,000, then Incentive Stock Options
granted hereunder to such Participant shall, to the extent and in the order
required by regulations promulgated under the Code (or any other authority
having the force of regulations), automatically be deemed to be Non-Qualified
Stock Options, but all other terms and provisions of such Incentive Stock
Options shall remain unchanged. In the absence of such Regulations (and
authority), or in the event such Regulations (or authority) require or permit a
designation of the options which shall cease to constitute incentive stock
options, Incentive Stock Options shall, to the extent of such excess and in the
order in which they were granted, automatically be deemed to be Non-Qualified
Stock Options, but all other terms and provisions of such Incentive Stock
Options shall remain unchanged.
(2) No Incentive Stock Option may be granted to an individual if,
at the time of the proposed grant, such individual owns stock possessing more
than ten percent of the total combined voting power of all classes of stock of
Del Monte or any of its "subsidiaries" (within the meaning of Section 424 of the
Code), unless (i) the exercise price of such Incentive Stock Option is at least
one hundred and ten percent of the Fair Market Value of a share of Common Stock
at the time such Incentive Stock Option is granted and (ii) such Incentive Stock
Option is not exercisable after the expiration of five years from the date such
Incentive Stock Option is granted.
(3) Only Employees are eligible to be granted Incentive Stock
Options. Directors and Consultants are not eligible to be granted Incentive
Stock Options.
(e) Cash Bonuses and Loans
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(1) The Committee may, in its absolute discretion, grant to any
Participant a cash bonus in an amount determined by the Committee to enable the
Participant to pay any federal, state or local income taxes arising out of the
exercise of an Option.
(2) The Committee may, in its absolute discretion, provide a loan
to any Participant in an amount determined by the Committee to enable the
Participant to pay (i) any federal, state or local income taxes arising out of
the exercise of an Option or (ii) the exercise price with respect to any Option.
Any such loan (i) shall be for such term and at such rate of interest as the
Committee may determine, (ii) shall be evidenced by a promissory note in a form
determined by the Committee and executed by the Participant and (iii) shall be
subject to such other terms and conditions as the Committee may determine.
(f) Consequences Upon Certain Transactions
Not more than ten (10) days prior to a Change of Control, all
outstanding Options shall vest and become immediately exercisable.
7. Tandem Stock Appreciation Rights
The Committee may grant in connection with any Option granted hereunder
one or more Tandem SARs relating to a number of shares of Common Stock less than
or equal to the number of shares of Common Stock subject to the related Option.
Notwithstanding anything herein to the contrary, no Tandem SARs shall be granted
prior to the existence of a Public Market for the Common Stock. A Tandem SAR may
be granted at the same time as, or subsequent to the time that, its related
Option is granted. Each Tandem SAR shall be evidenced by an agreement in such
form as the Committee shall from time to time approve. Tandem SARs shall comply
with and be subject to the following terms and conditions:
(a) Benefit Upon Exercise
The exercise of a Tandem SAR with respect to any number of shares of
Common Stock shall entitle a Participant to (i) a cash payment, for each such
share, equal to the excess of (A) the Fair Market Value of a share of Common
Stock on the effective date of such exercise over (B) the exercise price of the
related Option, (ii) the issuance or transfer to the Participant of a number of
shares of Common Stock which on the date of the exercise of the Tandem SAR have
a Fair Market Value equal to such excess or (iii) a combination of cash and
shares of Common Stock in amounts equal to such excess, all as determined by the
Committee in its discretion.
(b) Term and Exercise of Tandem SAR
(1) A Tandem SAR shall be exercisable at the same time and to the
same extent (on a proportional basis, with any fractional amount being rounded
down to the immediately preceding whole number) as its related Option.
(2) The exercise of a Tandem SAR with respect to a number of
shares of Common Stock shall cause the immediate and automatic cancellation of
its related Option with
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respect to an equal number of shares. The exercise of an Option, or the
cancellation, termination or expiration of an Option (other than pursuant to
this Paragraph (2)), with respect to a number of shares of Common Stock shall
cause the automatic and immediate cancellation of its related Tandem SARs to the
extent that the number of shares of Common Stock subject to such Option after
such exercise, cancellation, termination or expiration is less than the number
of shares subject to such Tandem SARs. Such Tandem SARs shall be cancelled in
the order in which they became exercisable.
(3) Each Tandem SAR shall be exercisable in whole or in part, as
provided in the applicable agreement. The partial exercise of a Tandem SAR shall
not cause the expiration, termination or cancellation of the remaining portion
thereof.
(4) During the lifetime of a Participant, each Tandem SAR granted
to him shall be exercisable only by him. No Tandem SAR shall be assignable or
transferable other than by will, the laws of descent and distribution, or as
provided in Paragraph 17 hereof and otherwise than together with its related
Option.
(5) A Tandem SAR shall be exercised by delivering written notice
to Del Monte's principal office, to the attention of the office specified by Del
Monte. Such notice shall specify the number of shares of Common Stock with
respect to which the Tandem SAR is being exercised and the effective date of the
proposed exercise and shall be signed by the Participant.
8. Stand-Alone Stock Appreciation Rights
The Committee may grant Stand-Alone SARs pursuant to the Plan, which
Stand-Alone SARs shall be evidenced by agreements in such form as the Committee
shall from time to time approve. Notwithstanding anything herein to the
contrary, no Stand-Alone SARs shall be granted prior to the existence of a
Public Market for the Common Stock. Stand-Alone SARs shall comply with and be
subject to the following terms and conditions:
(a) Exercise Price
The exercise price of any Stand-Alone SAR granted under the Plan shall
be determined by the Committee at the time of the grant of such Stand-Alone SAR.
(b) Benefit Upon Exercise
The exercise of a Stand-Alone SAR with respect to any number of shares
of Common Stock shall entitle a Participant to (i) a cash payment, for each such
share, equal to the excess of (A) the Fair Market Value of a share of Common
Stock on the effective date of such exercise over (B) the exercise price of the
Stand-Alone SAR, (ii) the issuance or transfer to the Participant of a number of
shares of Common Stock which on the date of the exercise of the Stand-Alone SAR
have a Fair Market Value equal to such excess or (iii) a combination of cash and
shares of Common Stock in amounts equal to such excess, all as determined by the
Committee in its absolute discretion.
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(c) Term and Exercise of Stand-Alone SARs
(1) Each Stand-Alone SAR shall be exercisable on such date or
dates, during such period and for such number of shares of Common Stock as shall
be determined by the Committee and set forth in the Stand-Alone SAR agreement
with respect to such Stand-Alone SAR. Each Stand-Alone SAR shall be subject to
such termination, expiration or cancellation provisions as provided in the
agreement evidencing such Stand-Alone SAR.
(2) Each Stand-Alone SAR may be exercised in whole or in part, as
provided in the applicable agreement. The partial exercise of a Stand-Alone SAR
shall not cause the expiration, termination or cancellation of the remaining
portion thereof.
(3) A Stand-Alone SAR shall be exercised by delivering written
notice to Del Monte's principal office, to the attention of the office
designated by Del Monte. Such notice shall specify the number of shares of
Common Stock with respect to which the Stand-Alone SAR is being exercised and
the effective date of the proposed exercise and shall be signed by the
Participant.
(4) During the lifetime of a Participant, each Stand-Alone SAR
granted to him shall be exercisable only by him. No Stand-Alone SAR shall be
assignable or transferable otherwise than by will, the laws of descent and
distribution, or to the limited extent provided in Paragraph 17 hereof.
9. Stock Bonuses
The Committee may grant Stock Bonuses in such amounts as it shall
determine from time to time. A Stock Bonus shall be paid at such time and
subject to such conditions as the Committee shall determine at the time of the
grant of such Stock Bonus. Notwithstanding anything herein to the contrary, no
Stock Bonus shall be granted prior to the existence of a Public Market for the
Common Stock. Certificates for shares of Common Stock granted as a Stock
Bonus shall be issued in the name of the Participant to whom such grant
was made and delivered to such Participant as soon as practicable after the date
on which such Stock Bonus is required to be paid.
10. Adjustment Upon Changes in Common Stock
(a) Shares Available for Grants
In the event of any change in the number of shares of Common Stock
outstanding by reason of any stock dividend or split, recapitalization, merger,
consolidation, combination or exchange of shares or similar corporate change,
the maximum aggregate number of shares of Common Stock with respect to which the
Committee may grant Options, Stand-Alone SARs and Stock Bonuses shall be
appropriately adjusted by the Committee. In the event of any change in the
number of shares of Common Stock outstanding by reason of any other event or
transaction, the Committee may, but need not, make such adjustments in the
number and class of shares of
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Common Stock with respect to which Options, Stand-Alone SARs and Stock Bonuses
may be granted as the Committee may deem appropriate.
(b) Outstanding Options, Tandem SARs and Stand-Alone SARs - Increase
or Decrease in Issued Shares Without Consideration
Subject to any required action by the stockholders of Del Monte, in the
event of any increase or decrease in the number of issued shares of Common Stock
resulting from a subdivision or consolidation of shares of Common Stock or the
payment of a stock dividend (but only on the shares of Common Stock), or any
other increase or decrease in the number of such shares effected without receipt
or payment of consideration by Del Monte, the Committee shall proportionally
adjust the number of shares of Common Stock subject to each outstanding Option,
Tandem SAR and Stand-Alone SAR and the exercise price per share of Common Stock
of each such Option, Tandem SAR and Stand-Alone SAR.
(c) Outstanding Options, Tandem SARs and Stand-Alone SARs - Certain
Mergers
Subject to any required action by the stockholders of Del Monte, in the
event that Del Monte shall be the surviving corporation in any merger or
consolidation (except a merger or consolidation as a result of which the holders
of shares of Common Stock receive securities of another corporation), each
Option, Tandem SAR and Stand-Alone SAR outstanding on the date of such merger or
consolidation shall pertain to and apply to the securities which a holder of the
number of shares of Common Stock subject to such Option, Tandem SAR or
Stand-Alone SAR would have received in such merger or consolidation.
(d) Outstanding Options, Tandem SARs and Stand-Alone SARs - Certain
Other Transactions
In the event of (i) a dissolution or liquidation of Del Monte, (ii) a
sale of all or substantially all of Del Monte's assets, (iii) a sale of all or a
substantial portion of the Common Stock held by TPG, (iv) a merger or
consolidation involving Del Monte in which Del Monte is not the surviving
corporation or (iv) a merger or consolidation involving Del Monte in which Del
Monte is the surviving corporation but the holders of shares of Common Stock
receive securities of another corporation and/or other property, including cash,
the Committee shall, in its absolute discretion, have the power to:
(i) cancel, effective immediately prior to the occurrence of such
event, each Option (including each Tandem-SAR related thereto) and Stand-Alone
SAR outstanding immediately prior to such event (whether or not then
exercisable), and, in full consideration of such cancellation, pay to the
Participant to whom such Option or Stand-Alone SAR was granted an amount in
cash, for each share of Common Stock subject to such Option or Stand-Alone SAR,
respectively, equal to the excess of (A) the value, as determined by the
Committee in its absolute discretion, of the property (including cash) received
by the holder of a share of Common Stock as a result of such event over (B) the
exercise price of such Option or Stand-Alone SAR; or
(ii) permit Participants to exercise their Options (or Tandem
SARs related
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thereto) and Stand-Alone SARs and participate in such transaction on a basis no
less favorable than that afforded other owners of Common Stock.
(e) Outstanding Options, Tandem SARs and Stand-Alone SARs - Other
Changes
In the event of any change in the capitalization of Del Monte or
corporate change other than those specifically referred to in Sections 10(b),
(c) or (d) hereof, the Committee may, in its absolute discretion, make such
adjustments in the number and class of shares subject to Options, Tandem SARs
and Stand-Alone SARs outstanding on the date on which such change occurs and in
the per share exercise price of each such Option, Tandem SAR and Stand-Alone SAR
as the Committee may consider appropriate to prevent dilution or enlargement of
rights.
(f) No Other Rights
Except as expressly provided in the Plan, no Participant shall have any
rights by reason of any subdivision or consolidation of shares of stock of any
class, the payment of any dividend, any increase or decrease in the number of
shares of stock of any class or any dissolution, liquidation, merger or
consolidation of Del Monte or any other corporation. Except as expressly
provided in the Plan, no issuance by Del Monte of shares of stock of any class,
or securities convertible into shares of stock of any class, shall affect, and
no adjustment by reason thereof shall be made with respect to, the number of
shares of Common Stock subject to an Incentive Award or the exercise price of
any Option, Tandem SAR or Stand-Alone SAR.
11. Rights as a Stockholder
(a) No person shall have any rights as a stockholder with respect to any
shares of Common Stock covered by or relating to any Incentive Award granted
pursuant to this Plan until the date of the issuance of a stock certificate with
respect to such shares. Except as otherwise expressly provided in Section 10
hereof, no adjustment to any Incentive Award shall be made for dividends or
other rights for which the record date occurs prior to the date such stock
certificate is issued.
(b) Notwithstanding anything herein to the contrary, prior to the
existence of a Public Market, Del Monte shall not be obligated to cause to be
issued or delivered to or for the benefit of any Participant any certificates
evidencing shares of Common Stock pursuant to the Plan unless and until such
Participant executes a Stockholders' Agreement in the form attached hereto as
Exhibit A. Del Monte shall comply with Section 260.140.1 of Title 10 of the
California Code of Regulations with respect to the voting rights of Common
Stock.
(c) Del Monte will provide financial statements to each Participant
prior to such Participant's purchase of shares of Common Stock under the Plan,
and to each Participant annually during the period such Participant has Options
outstanding, or as otherwise required under Section 260.140.46 of Title 10 of
the California Code of Regulations. Notwithstanding the foregoing, Del Monte
will not be required to provide such financial statements to Participants when
issuance is limited to key employees whose services in connection with Del Monte
assure them access to equivalent information.
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12. No Special Employment Rights; No Right to Incentive Award
Nothing contained in the Plan or any Incentive Award shall confer upon
any Participant any right with respect to the continuation of his employment by
the Company or interfere in any way with the right of the Company, subject to
the terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
Participant from the rate in existence at the time of the grant of an Incentive
Award.
No person shall have any claim or right to receive an Incentive Award
hereunder. The Committee's granting of an Incentive Award to a Participant at
any time shall neither require the Committee to grant an Incentive Award to such
Participant or any other Participant or other person at any time nor preclude
the Committee from making subsequent grants to such Participant or any other
Participant or other person.
13. Securities Matters
(a) Del Monte shall be under no obligation to effect the registration
pursuant to the Securities Act of 1933 of any shares of Common Stock to be
issued hereunder or to effect similar compliance under any state laws.
Notwithstanding anything herein to the contrary, Del Monte shall not be
obligated to cause to be issued or delivered any certificates evidencing shares
of Common Stock pursuant to the Plan unless and until Del Monte is advised by
its counsel that the issuance and delivery of such certificates is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common Stock are
traded. The Committee may require, as a condition of the issuance and delivery
of certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such covenants, agreements and
representations, and that such certificates bear such legends, as the Committee,
in its sole discretion, deems necessary or desirable.
(b) The exercise of any Option granted hereunder shall only be effective
at such time as counsel to Del Monte shall have determined that the issuance and
delivery of shares of Common Stock pursuant to such exercise is in compliance
with all applicable laws, regulations of governmental authority and the
requirements of any securities exchange on which shares of Common Stock are
traded. Del Monte may, in its sole discretion, defer the effectiveness of any
exercise of an Option granted hereunder in order to allow the issuance of shares
of Common Stock pursuant thereto to be made pursuant to registration or an
exemption from registration or other methods for compliance available under
federal or state securities laws. Del Monte shall inform the Participant in
writing of its decision to defer the effectiveness of the exercise of an Option
granted hereunder. During the period that the effectiveness of the exercise of
an Option has been deferred, the Participant may, by written notice, withdraw
such exercise and obtain the refund of any amount paid with respect thereto.
(c) In the event that the Committee defers the effectiveness of the
exercise of a Participant of an Option granted hereunder in order to allow the
issuance of shares of Common Stock pursuant thereto to be made pursuant to
registration or an exemption from registration or
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other methods for compliance available under federal or state securities laws,
such Participant may elect, by delivery of written notice by the Participant to
the Company not later than thirty (30) days following his receipt of notice of
such deferral or the expiration of such deferral, to surrender the exercisable
portion of such Option (or any portion thereof) to the Company in consideration
for a lump sum payment in cash in an amount equal to the product of (A) the
excess of (i) the value of a share of Common Stock as determined by the Board of
Directors as of the date of surrender over (ii) the per share exercise price of
the Option and (B) the number of shares with respect to which such Participant
desires and is entitled to exercise such Option. Notice shall be delivered in
person or by certified mail, return receipt requested and shall be deemed to
have been given when personally delivered or three (3) days after mailing.
14. Withholding Taxes
(a) Cash Remittance
Whenever shares of Common Stock are to be issued upon the exercise of an
Option or the grant of a Stock Bonus, Del Monte shall have the right to require
the Participant to remit to Del Monte in cash an amount sufficient to satisfy
federal, state and local withholding tax requirements, if any, attributable to
such exercise prior to the delivery of any certificate or certificates for such
shares. In addition, upon the exercise of a Tandem SAR or Stand-Alone SAR, Del
Monte shall have the right to withhold from any cash payment required to be made
pursuant thereto an amount sufficient to satisfy the federal, state and local
withholding tax requirements, if any, attributable to such exercise.
(b) Stock Remittance
At the election of the Participant, subject to the approval of the
Committee, when shares of Common Stock are to be issued upon the exercise of an
Option or the grant of a Stock Bonus, the Participant may tender to Del Monte a
number of shares of Common Stock determined by such Participant, the Fair Market
Value of which at the tender date the Committee determines to be sufficient to
satisfy the federal, state and local withholding tax requirements, if any,
attributable to such exercise or grant and not greater than the Participant's
estimated total federal, state and local tax obligations associated with such
exercise or grant. Such election shall satisfy the Participant's obligations
under Paragraph 14(a) hereof. In the event that a Participant makes an election
pursuant to this Section 14(b) prior to the existence of a Public Market for the
Common Stock, the delivery by Del Monte of certificates representing the shares
of Common Stock purchased upon such exercise shall be deferred pending a
determination of the exact number of the shares of Common Stock required to be
tendered or withheld.
(c) Stock Withholding
At the election of the Participant, subject to the approval of the
Committee, when shares of Common Stock are to be issued upon the exercise of an
Option or the grant of a Stock Bonus, Del Monte shall withhold a number of such
shares determined by such Participant, the Fair Market Value of which at the
exercise date the Committee determines to be sufficient to satisfy the federal,
state and local withholding tax requirements, if any, attributable to such
exercise or
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grant and is not greater than the Participant's estimated total federal, state
and local tax obligations associated with such exercise or grant. Such election
shall satisfy the Participant's obligations under Paragraph 14(a) hereof.
15. Amendment of the Plan
The Board of Directors may at any time suspend or discontinue the Plan
or revise or amend it in any respect whatsoever; provided, however, that without
approval of the stockholders no revision or amendment shall except as provided
in Section 10 hereof, increase the number of shares of Common Stock that may be
issued under the Plan.
16. No Obligation to Exercise
The grant to a Participant of an Option, Tandem SAR or Stand-Alone SAR
shall impose no obligation upon such Participant to exercise such Option, Tandem
SAR or Stand-Alone SAR.
17. Transfers Upon Death
If permitted by the Committee, a Participant may name a beneficiary or
beneficiaries to whom any vested but unpaid Incentive Award shall be paid in the
event of the Participant's death. Each such designation shall revoke all prior
designations by the Participant and shall be effective only if given in a form
and manner acceptable to the Committee. In the absence of any such designation,
any vested benefits remaining unpaid at the Participant's death shall be paid to
the Participant's estate and, subject to the terms of the Plan and of the
applicable Incentive Award agreement, any unexercised vested Incentive Award may
be exercised by the administrator or executor of the Participant's estate. No
such transfer or distribution of any Incentive Award, or the right to exercise
any Incentive Award, shall be effective to bind Del Monte unless the Committee
shall have been furnished with (a) written notice thereof and with a copy of the
will and/or such evidence as the Committee may deem necessary to establish the
validity of the transfer and (b) an agreement by the transferee to comply with
all the terms and conditions of the Incentive Award that are or would have been
applicable to the Participant and to be bound by the acknowledgements made by
the Participant in connection with the grant of the Incentive Award.
18. Expenses and Receipts
The expenses of the Plan shall be paid by Del Monte. Any proceeds
received by Del Monte in connection with any Incentive Award will be used for
general corporate purposes.
19. Failure to Comply
In addition to the remedies of Del Monte elsewhere provided for herein,
failure by a Participant to comply with any of the terms and conditions of the
Plan or the agreement executed by such Participant evidencing an Incentive
Award, unless such failure is remedied by such Participant within ten days after
having been notified of such failure by the Committee, shall be grounds for the
cancellation and forfeiture of such Incentive Award, in whole or in part, as the
Committee, in its absolute discretion, may determine.
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20. Compliance with Rule 16b-3
Transactions under this Plan with respect to Section 16 Persons are
intended to comply with all applicable conditions of Rule 16b-3 under the
Securities Exchange Act of 1934, as amended. To the extent any provision of the
Plan, Incentive Award agreement or action by the Committee fails to so comply,
it shall be deemed null and void, to the extent permitted by law and deemed
advisable by the Committee.
21. Applicable Law
The Plan will be administered in accordance with the laws of the State
of California, without reference to its principles of conflicts of law.
22. Effective Date
The Plan shall commence on May 29, 1998 (the date of adoption of the
Plan), and subject to Paragraph 15 (regarding the Board's right to amend or
terminate the Plan), shall remain in effect thereafter. The Plan shall be
approved by stockholders of Del Monte within twelve months before or after the
effective date of the Plan. However, without further stockholder approval, no
Incentive Stock Option may be granted under the Plan after May 29, 2006.
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