Exhibit 10.10
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VLASIC FOODS INTERNATIONAL INC.
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ANNUAL INCENTIVE PLAN
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Dated: ______________, 1998
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VLASIC FOODS INTERNATIONAL INC.
ANNUAL INCENTIVE PLAN
TABLE OF CONTENTS
Article Page
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I. PURPOSE AND EFFECTIVE DATE.............................. 1
II. DEFINITIONS............................................. 1
III. ADMINISTRATION.......................................... 2
IV. PARTICIPATION........................................... 3
V. AWARDS.................................................. 3
VI. LIMITATIONS............................................. 4
VII. AMENDMENT, SUSPENSION OR TERMINATION OF
THE PLAN IN WHOLE OR IN PART............................ 4
VIII. CHANGE IN CONTROL OF THE COMPANY........................ 5
IX. MISCELLANEOUS........................................... 8
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ARTICLE I
PURPOSE AND EFFECTIVE DATE
(S)1.1. PURPOSE. The purpose of the Plan is to provide annual
financial incentives for selected employees of the Vlasic Foods International
Group, thereby promoting the growth and financial success of the Vlasic Foods
International Group by (i) attracting and retaining employees of outstanding
ability, (ii) strengthening the Vlasic Foods International Group's capability to
develop, maintain, and direct a competent management team, (iii) motivating
employees to achieve Performance Goals and objectives, and (iv) providing
incentive compensation opportunities competitive with those of other major
corporations.
(S)1.2. EFFECTIVE DATE AND EXPIRATION OF PLAN. The Plan was approved
by Xxxxxxxx Soup Company, as the sole shareholder of Vlasic Foods International
Inc., and is effective March 30, 1998, which shall be the Effective Date.
Unless earlier terminated by the Board, the Plan shall continue indefinitely.
ARTICLE II
DEFINITIONS
The following words and phrases, as used in the Plan, shall have these
meanings:
(S)2.1. "BOARD" means the Board of Directors of the Company.
(S)2.2. "CAUSE" means the termination of a Participant's employment
by reason of his or her engaging in conduct that constitutes willful gross
misconduct that is demonstrably and materially injurious to the Company or a
Subsidiary, monetarily or otherwise, misappropriation of funds, willful and
material misrepresentation to the directors or officers of his or her employer,
gross negligence in the performance of the Participant's duties having a
material adverse effect on the business, operations, assets, properties or
financial condition of the Company or a Subsidiary, or entering into competition
with the Company or a Subsidiary. No act, nor failure to act, on the
Participant's part shall be considered "willful" unless he or she has acted, or
failed to act, with an absence of good faith and without a reasonable belief
that his or her action or failure to act was in the best interest of the Company
and its Subsidiaries.
(S)2.3. "CODE" means the Internal Revenue Code of 1986, as amended.
(S)2.4. "COMMITTEE" means the Compensation and Organization Committee
of the Board. All members of the Committee shall be "Outside Directors," as
defined or interpreted for purposes of Section 162(m) of the Code, and
"Disinterested Persons," within the meaning of Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act").
(S)2.5. "COMPANY" means Vlasic Foods International Inc. and its
successors and assigns.
(S)2.6. "DEFERRED COMPENSATION PLAN" means the Vlasic Foods
International Inc. Deferred Compensation Plan.
(S)2.7. "ELIGIBLE EMPLOYEE" means a person who is a regular salaried
employee of the Vlasic Foods International Group and who, in the opinion of the
Committee, is a key employee whose performance can contribute to the success of
the Company or a Subsidiary.
(S)2.8. "FAMILY MEMBER" means the spouse, a child, a stepchild, a
parent, a brother or a sister of the Participant, or any other person in such
class of relationship to the Participant as the Committee may approve.
(S)2.9. "PERFORMANCE GOALS" means the goals established by the
Committee pursuant to Section 5.1.
(S)2.10. "PARTICIPANT" means a person to whom an award of incentive
compensation has been made under the Plan.
(S)2.11. "PRESIDENT" means the President of the Company.
(S)2.12. "SUBSIDIARY" means a corporation, domestic or foreign, the
majority of the voting stock of which is owned directly or indirectly by the
Company.
(S)2.13. "VLASIC FOODS INTERNATIONAL GROUP" means the Company and all
of its Subsidiaries on and after the Effective Date.
ARTICLE III
ADMINISTRATION
(S)3.1. ADMINISTRATION. The Plan shall be administered by the
Committee or its delegate or successor. The Committee shall have all necessary
powers to administer and interpret the Plan, such powers to include the
authority to select Eligible Employees to whom awards may be granted under the
Plan and to determine the amount of any award of incentive compensation to be
granted to any Eligible Employee.
(S)3.2. COMMITTEE AUTHORITY. The Committee shall have full power and
authority to adopt such rules, regulations and instruments for the
administration of the Plan and for the conduct of its business as the Committee
deems necessary or advisable. The Committee's interpretations of the Plan, and
all actions taken and determinations made by the Committee pursuant to the
powers vested in it hereunder, shall be conclusive and binding on all parties
concerned, including the Company, its shareowners and any employee of the
Company or a Subsidiary.
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ARTICLE IV
PARTICIPATION
Participants in the Plan shall be selected by the Committee from among
Eligible Employees, based upon such criteria as the Committee may from time to
time determine.
ARTICLE V
AWARDS
(S)5.1. ESTABLISHMENT OF PERFORMANCE GOALS. Prior to the beginning of
each fiscal year after the Effective Date, the Committee shall establish, in
writing, Performance Goals for the Company and its various operating units and
its Subsidiaries. The goals shall be comprised of specified annual levels of one
or more performance criteria as the Committee may deem appropriate. Such goals
may include, but shall not be limited to, earnings per share, net earnings,
operating earnings, unit volume, net sales, market share, balance sheet
measurements, revenue, cash flow, cash return on assets, shareowner return,
return on equity, return on capital or other value-based performance measures.
The Committee may disregard or offset the effect of any special charges or
gains, the cumulative effect of a change in accounting, or the effect of other
expenses or losses that are unusual in nature or infrequent in occurrence, in
determining the attainment of Performance Goals. Awards may also be made payable
when Company performance, as measured by one or more of the above criteria, as
compared to peer companies, meets or exceeds an objective target established by
the Committee.
(S)5.2. ESTABLISHMENT OF AWARD CATEGORIES. Prior to the beginning of
each fiscal year of the Company, the Committee shall determine the classes of
employees eligible to receive awards of incentive compensation based upon job
grade and salary levels or such other procedures for eligibility for awards as
the Committee may deem desirable. The class of employees determined to be
eligible for awards shall not change after the close of the fiscal year.
(S)5.3. ESTABLISHMENT OF AWARD AMOUNTS. After the close of the fiscal
year, the Committee may fix a maximum aggregate dollar amount that may be
granted for awards for that fiscal year. The amounts of awards to be granted
with respect to particular employees within the eligible classes may be
determined after the close of the fiscal year under procedures established by
the Committee.
(S)5.4. GRANT OF AWARDS. The Committee shall, in granting awards to
particular Eligible Employees for any fiscal year, take into consideration:
(a) the performance of the Company or the organizational
unit employing the Eligible Employee based upon attainment of Performance Goals;
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(b) as among Participants, the contribution of the
Participant during the fiscal year to the success of the Company, including the
Participant's (i) position and level of responsibility, (ii) business unit,
division or department achievements, and (iii) management assessment of
individual performance.
No award or awards may be granted to any Participant for any fiscal year that
exceeds in the aggregate $3,000,000. The Committee shall have no discretion to
increase such awards.
(S)5.5. COMMITTEE DISCRETION. The Committee shall have complete
discretion with respect to the determination of the Eligible Employees to whom
awards of incentive compensation shall be granted and the granting of such
awards.
(S)5.6. PAYMENT OF AWARDS. Incentive compensation awards made
pursuant to Article V shall be paid entirely in cash as soon as possible after
grant approval, unless the Participant is eligible for and has elected to defer
receipt of a portion or all of such award in accordance with the terms of the
Deferred Compensation Plan.
ARTICLE VI
LIMITATIONS
(S)6.1. RIGHTS NOT ABSOLUTE. No person shall at any time have any
right to be granted an award hereunder for any fiscal year, and no person shall
have authority to enter into an agreement committing the Company to make or pay
an award, nor shall any person have authority to make any representation or
warranty on behalf of the Company with respect thereto.
(S)6.2. PARTICIPANT RIGHTS LIMITED TO PLAN. Participants receiving
awards shall have no rights to such awards except as set forth in this Plan and
the Deferred Compensation Plan.
(S)6.3. NO RIGHT TO CONTINUED EMPLOYMENT. Neither the action of the
Company in establishing the Plan, nor any action taken by it or by the Board or
the Committee under the Plan, nor any provision of the Plan, shall be construed
as giving to any person the right to be retained in the employ of the Company or
any Subsidiary.
ARTICLE VII
AMENDMENT, SUSPENSION OR TERMINATION
OF THE PLAN IN WHOLE OR IN PART
The Board may amend, suspend or terminate the Plan in whole or in part; but
it may not affect adversely rights or obligations with respect to awards
theretofore made.
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ARTICLE VIII
CHANGE IN CONTROL OF THE COMPANY
(S)8.1. CONTRARY PROVISIONS. Notwithstanding anything contained in
the Plan to the contrary, the provisions of this Article VIII shall govern and
supersede any inconsistent terms or provisions of the Plan.
(S)8.2. DEFINITION OF "CHANGE IN CONTROL YEAR." For purposes of the
Plan, "Change in Control Year" means a fiscal year of the Company in which a
Change in Control occurs.
(S)8.3. DEFINITION OF "CHANGE IN CONTROL". For purposes of the Plan
"Change in Control" means any of the following events:
(a) The acquisition in one or more transactions by any "Person"
(as the term person is used for purposes of Section 13(d) or Section 14(d) of
the Securities Exchange Act of 1934, as amended (the "1934 Act")) of "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the 1934 Act) of
twenty-five percent (25%) or more of the combined voting power of the Company's
then outstanding voting securities (the "Voting Securities"); provided, however,
that for purposes of this Section 8.3(a), the Voting Securities acquired
directly from the Company by any Person shall be excluded from the determination
of such Person's Beneficial Ownership of Voting Securities (but such Voting
Securities shall be included in the calculation of the total number of Voting
Securities then outstanding); or
(b) The individuals who, as of the later of April 1, 1998 or the
first date that the membership of the Board reaches seven (7), are members of
the Board (the "Incumbent Board"), cease for any reason to constitute at least
two-thirds of the Board; provided, however, that if the election, or nomination
for election by the Company's shareowners, of any new Director was approved by a
vote of at least two-thirds of the Incumbent Board, such new Director shall, for
purposes of the Plan, be considered as a member of the Incumbent Board; or
(c) Approval by shareowners of the Company of (i) a merger or
consolidation involving the Company if the shareowners of the Company,
immediately before such merger or consolidation, do not own, directly or
indirectly, immediately following such merger or consolidation, more than eighty
percent (80%) of the combined voting power of the outstanding Voting Securities
of the corporation resulting from such merger or consolidation in substantially
the same proportion as their ownership of the Voting Securities immediately
before such merger or consolidation or (ii) a complete liquidation or
dissolution of the Company or an agreement for the sale or other disposition of
all or substantially all of the assets of the Company; or
(d) Acceptance by shareowners of the Company of shares in a share
exchange if the shareowners of the Company, immediately before such share
exchange, do not own, directly or indirectly, immediately following such share
exchange, more than eighty percent (80%) of the combined voting power of the
outstanding Voting Securities of the corporation
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resulting from such share exchange in substantially the same proportion as their
ownership of the Voting Securities outstanding immediately before such share
exchange.
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because twenty-five percent (25%) or more of the then outstanding
Voting Securities is acquired by (i) a trustee or other fiduciary holding
securities under one or more employee benefit plans maintained by the Company or
any of its subsidiaries, (ii) any entity that, immediately prior to such
acquisition, is entirely owned (directly or indirectly) by shareowners of the
Company in the same proportions as their ownership of stock in the Company
immediately prior to such acquisition, (iii) any "Grandfathered Xxxxxxxx Family
shareowner" (as hereinafter defined) or (iv) any Person who has acquired such
Voting Securities directly from any Grandfathered Xxxxxxxx Family shareowner but
only if such Person has executed an agreement that is approved by two-thirds of
the Board and pursuant to which such Person has agreed that he or she (or they)
will not increase his or her (or their) Beneficial Ownership (directly or
indirectly) to thirty percent (30%) or more of the outstanding Voting Securities
(the "Standstill Agreement") and only for the period during which the Standstill
Agreement is effective and fully honored by such Person. For purposes of this
Section, "Grandfathered Xxxxxxxx Family shareowner" means at any time a
"Xxxxxxxx Family shareowner" (as hereinafter defined) who or which is at the
time in question the Beneficial Owner solely of (v) Voting Securities
beneficially owned by such individual on April 1, 1998, (w) Voting Securities
acquired directly from the Company, (x) Voting Securities acquired directly from
another Grandfathered Xxxxxxxx Family shareowner, (y) Voting Securities that are
also Beneficially Owned by other Grandfathered Xxxxxxxx Family shareowners at
the time in question, and (z) Voting Securities acquired after April 1, 1998
other than directly from the Company or from another Grandfathered Xxxxxxxx
Family shareowner by any "Xxxxxxxx Grandchild" (as hereinafter defined);
provided that the aggregate amount of Voting Securities so acquired by each such
Xxxxxxxx Grandchild shall not exceed five percent (5%) of the Voting Securities
outstanding at the time of such acquisition. A "Xxxxxxxx Family shareowner" who
or which is at the time in question the Beneficial Owner of Voting Securities
that are not specified in clauses (v), (w), (x), (y) and (z) of the immediately
preceding sentence shall not be a Grandfathered Xxxxxxxx Family shareowner at
the time in question. For purposes of this Section, "Xxxxxxxx Family
shareowners" means individuals who are descendants of the late Xx. Xxxx X.
Xxxxxxxx, Xx. and/or the spouses, fiduciaries and foundations of such
descendants. A "Xxxxxxxx Grandchild" means as to each particular grandchild of
the late Xx. Xxxx X. Xxxxxxxx, Xx., all of the following taken collectively:
such grandchild, such grandchild's descendants and/or the spouses, fiduciaries
and foundations of such grandchild and such xxxxxxxxxx's descendants.
Moreover, notwithstanding the foregoing, a Change in Control shall not
be deemed to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the outstanding Voting
Securities as a result of the acquisition of Voting Securities by the Company
that, by reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject Person; provided
that if a Change in Control would occur (but for the operation of this sentence)
as a result of the acquisition of Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the Beneficial
Owner of any additional
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Voting Securities that increases the percentage of the then outstanding Voting
Securities Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(S)8.4. DEFINITION OF "TERMINATION FOLLOWING A CHANGE IN CONTROL."
For purposes of the Plan, "Termination Following a Change in Control" means a
termination of employment:
(a) initiated by the employer of the Participant, other
than for Cause; or
(b) initiated by the Participant following one or more of
the following events:
(i) an assignment to the Participant of any duties
materially inconsistent with, or a reduction or change by his or her employer in
the nature or scope of the authority, duties or responsibilities of the
Participant from those assigned to or held by the Participant immediately prior
to the Change in Control;
(ii) any removal of the Participant from the positions
held immediately prior to the Change in Control, except in connection with
promotions to positions of greater responsibility and prestige;
(iii) any reduction by his or her employer in the
Participant's compensation as in effect immediately prior to the Change in
Control or as the same may be increased thereafter;
(iv) revocation or any modification of any employee
benefit plan, or any action taken pursuant to the terms of any such plan, that
materially reduces the opportunity of the Participant to receive benefits under
any such plan;
(v) a transfer or relocation of the site of
employment of the Participant immediately preceding the Change in Control,
without the Participant's express written consent, to a location more than fifty
(50) miles distant therefrom, or that is otherwise an unacceptable commuting
distance from the Participant's principal residence at the date of the Change in
Control; or
(vi) a requirement that the Participant undertake
business travel to an extent substantially greater than the Participant's
business travel obligations immediately prior to the Change in Control.
(S)8.5. EFFECT OF CHANGE IN CONTROL. During any Change in Control
Year, each Eligible Employee who is a Participant on the date immediately prior
to the Change in Control (a) who has a Termination Following a Change in
Control prior to the end of the Change in Control Year or (b) who is in the
employ of the Company or any Subsidiary on the last day of the Change in Control
Year, shall be entitled to receive, within 30 days thereafter, a cash payment
equal to the greater of (x) his or her target award for the Change in Control
Year or (y) the
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average of the awards paid or payable under the Plan for the two most recent
fiscal years ended prior to the Change in Control Year (the "Award"); provided,
however that the amount of the Award to be paid to each Participant as provided
in clause (a) above shall be multiplied by a fraction, the numerator of which
shall be the number of calendar days from and including the first day of the
Change in Control Year through and including the date the Participant's
employment is terminated and the denominator of which shall be 365; provided
further, however, that the Award to be paid to any Participant who is a party to
an individual severance agreement shall be reduced by the amount of any
equivalent bonus payment made under such an individual agreement.
(S)8.6. CONTINUATION OF THE PLAN. For a period of two years following
a Change in Control, the Plan shall not be terminated or amended in any way
(including, but not limited to, restricting or limiting any Eligible Employee's
right to participate in the Plan), nor shall the manner in which the Plan is
administered be changed in a way that adversely affects the level of
participation or reward opportunities of any Participant; provided, however,
that the Plan shall be amended as necessary to make appropriate adjustments for
(a) any negative effect that the costs and expenses incurred by the Company and
its Subsidiaries in connection with the Change in Control may have on the
benefits payable under the Plan and (b) any changes to the Company and/or its
Subsidiaries (including, but not limited to, changes in corporate structure,
capitalization and increased interest expense as a result of the incurrence or
assumption by the Company of acquisition indebtedness) following the Change in
Control so as to preserve the reward opportunities and performance targets for
comparable performance under the Plan as in effect on the date immediately prior
to the Change in Control.
(S)8.7. AMENDMENT OR TERMINATION.
(a) This Article XIII shall not be amended or terminated at
any time.
(b) Any amendment or termination of the Plan prior to a
Change in Control that (i) was at the request of a third party who has indicated
an intention or taken steps reasonably calculated to effect a Change in Control
or (ii) otherwise arose in connection with or in anticipation of a Change in
Control, shall be null and void and shall have no effect whatsoever.
ARTICLE IX
MISCELLANEOUS
(S)9.1. NO EMPLOYMENT CONTRACT. The establishment or existence of the
Plan shall not confer upon any individual the right to be continued as an
employee. The employer expressly reserves the right to discharge any employee
whenever in its judgment its best interests so require.
(S)9.2. NON-ALIENATION. No amounts payable under the Plan shall be
subject in any manner to anticipation, assignment, or voluntary or involuntary
alienation.
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(S)9.3. GOVERNING LAW. This Plan shall be governed by and construed
in accordance with the laws of the State of New Jersey to the extent not
preempted by federal law.
(S)9.3. WITHHOLDING. The employer shall withhold from any benefits
payable under the Plan all federal, state and local income taxes or other taxes
required to be withheld pursuant to applicable law.
(S)9.5. INCAPACITY. If the Committee, in its sole discretion, deems a
Participant who is eligible to receive any payment hereunder to be incompetent
to receive the same by reason of age, illness or any infirmity or incapacity of
any kind, the Committee may direct the employer to apply such payment directly
for the benefit of such person, or to make payment to any person selected by the
Committee to disburse the same for the benefit of the Participant. Payments made
pursuant to this Section shall operate as a discharge, to the extent thereof, of
all liabilities of the employer, the Committee and the Plan to the person for
whose benefit the payments are made.
(S)9.6. NUMBER. For purposes of the Plan, the singular shall include
the plural and vice versa.
(S)9.7. BINDING UPON SUCCESSORS. The liabilities under the Plan
shall be binding upon any successor, assign or purchaser of the employer or any
purchaser of substantially all of the assets of the employer.
(S)9.8. TRUST ARRANGEMENT All benefits under the Plan represent an
unsecured promise to pay by the Company and Subsidiaries. The Plan shall be
unfunded and the benefits hereunder shall be paid only from the general assets
of the Company and its respective Subsidiaries, resulting in the Participants
having no greater rights than the general creditors of the Company or such
Subsidiaries. Notwithstanding the foregoing, nothing herein shall prevent or
prohibit the Company or the respective Subsidiaries from establishing a trust or
other arrangement for the purpose of providing for the payment of the benefits
payable under the Plan at any time.
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