EXHIBIT 10.9
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VLASIC FOODS INTERNATIONAL INC.
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1998 LONG-TERM INCENTIVE PLAN
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Dated: ______________, 1998
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VLASIC FOODS INTERNATIONAL INC.
1998 LONG-TERM INCENTIVE PLAN
TABLE OF CONTENTS
Article Page
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I. PURPOSE AND EFFECTIVE DATE..................................... 1
II. DEFINITIONS.................................................... 1
III. ADMINISTRATION................................................. 4
IV. AWARDS......................................................... 5
V. STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.................... 6
VI. RESTRICTED STOCK AWARDS........................................ 9
VII. UNRESTRICTED VLASIC STOCK AWARDS...............................11
VIII. AWARD OF PERFORMANCE UNITS.....................................11
IX. DEFERRAL OF CERTAIN PAYMENTS...................................12
X. MISCELLANEOUS PROVISIONS.......................................13
XI. CHANGE IN CONTROL OF THE COMPANY...............................14
ARTICLE I
PURPOSE AND EFFECTIVE DATE
(S)1.1. PURPOSE. The purpose of the Plan is to provide financial
incentives for selected employees of the Vlasic Foods International Group,
thereby promoting the long-term 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) providing an
effective means for selected employees to acquire and maintain ownership of
Vlasic Stock, (iv) motivating employees to achieve long-range Performance Goals
and objectives, and (v) 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 shareowner of Vlasic Foods International Inc.
and is effective March 30, 1998. Unless earlier terminated by the Board pursuant
to Section 10.3, the Plan shall terminate on the tenth anniversary of its
Effective Date. No Award shall be made pursuant to the Plan after its
termination date, but exercise and payment of Awards made prior to the
termination date may extend beyond that date.
ARTICLE II
DEFINITIONS
The following words and phrases, as used in the Plan, shall have these
meanings:
(S)2.1. "AWARD" means, individually or collectively, any Option, SAR,
Restricted Stock, unrestricted Vlasic Stock or Performance Unit Award.
(S)2.2. "BOARD" means the Board of Directors of the Company.
(S)2.3. "XXXXXXXX CONVERSION AWARD" means an award under the Xxxxxxxx
Soup Company 1994 Long-Term Incentive Plan ("Xxxxxxxx Plan") that terminates
solely by reason of the spin-off of the Company from Xxxxxxxx Soup Company and
is converted to a replacement Award under the Plan. The replacement Award shall
have the same aggregate Option Price, cover the same aggregate fair market value
of Vlasic Stock and continue the vesting schedule and other provisions of the
award under the Xxxxxxxx Plan that it replaces.
(S)2.4. "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 his or her employer,
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
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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)2.5. "CODE" means the Internal Revenue Code of 1986, as amended.
(S)2.6. "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)2.7. "COMPANY" means Vlasic Foods International Inc. and its
successors and assigns.
(S)2.8. "DEFERRED COMPENSATION PLAN" means the Vlasic Foods
International Inc. Deferred Compensation Plan.
(S)2.9. "DIRECTOR" means a member of the Board.
(S)2.10. "EFFECTIVE DATE" means March 30, 1998.
(S)2.11. "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)2.12. "FAIR MARKET VALUE" means, as of any specified date, an amount
equal to the mean between the reported high and low prices of Vlasic Stock on
the New York Stock Exchange composite tape on the specified date.
(S)2.13. "FISCAL YEAR" means the fiscal year of the Company, which is the
52- or 53-week period ending on the Sunday closest to July 31.
(S)2.14. "HIGHLY COMPENSATED EMPLOYEE" means an Employee who is determined
by the Committee to be a member of a select group of management or highly
compensated employees for purposes of Section 201(2) of the Employee Retirement
Income Security Act of 1974, as amended.
(S)2.15. "INCENTIVE STOCK OPTION" means an option within the meaning of
Section 422 of the Code.
(S)2.16. "NONQUALIFIED STOCK OPTION" means an Option granted under the
Plan other than an Incentive Stock Option.
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(S)2.17. "OPTION" means either a Nonqualified Stock Option or an Incentive
Stock Option to purchase Vlasic Stock.
(S)2.18. "OPTION PRICE" means the price at which Vlasic Stock may be
purchased under an Option as provided in Section 5.4 or in the case of an SAR
awarded under Section 5.8, the Fair Market Value of Vlasic Stock on the date the
SAR is awarded.
(S)2.19. "PARTICIPANT" means an Employee to whom an Award has been made
under the Plan.
(S)2.20. "PERFORMANCE GOALS" means goals established by the Committee
pursuant to Section 4.5.
(S)2.21. "PERFORMANCE PERIOD" means a period of time over which
performance is measured.
(S)2.22. "PERFORMANCE UNIT" means the unit of measure determined under
Article VIII by which is expressed the value of a Performance Unit Award.
(S)2.23. "PERFORMANCE UNIT AWARD" means an Award granted under Article
VIII.
(S)2.24. "PERSONAL REPRESENTATIVE" means the person or persons who, upon
the death, disability, or incompetency of a Participant, shall have acquired, by
will or by the laws of descent and distribution or by other legal proceedings,
the right to exercise an Option or the right to any Restricted Stock Award or
Performance Unit Award theretofore granted or made to such Participant.
(S)2.25. "PLAN" means the Vlasic Foods International Inc. 1998 Long-Term
Incentive Plan.
(S)2.26. "RESTRICTED PERFORMANCE STOCK" means Vlasic Stock subject to
Performance Goals provided in Section 4.5.
(S)2.27. "RESTRICTED STOCK" means Vlasic Stock subject to the terms and
conditions provided in Article VI and includes Restricted Performance Stock.
(S)2.28. "RESTRICTED STOCK AWARD" means an Award granted under Article VI.
(S)2.29. "RESTRICTION PERIOD" means a period of time determined under
Section 6.2 during which Restricted Stock is subject to the terms and conditions
provided in Section 6.3.
(S)2.30. "SAR" means a stock appreciation right granted under Section 5.8.
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(S)2.31. "STATEMENT" means a written confirmation of an Award under the
Plan furnished to the Participant.
(S)2.32. "SUBSIDIARY" means a corporation, domestic or foreign, the
majority of the voting stock of which is owned directly or indirectly by the
Company.
(S)2.33. "VLASIC FOODS INTERNATIONAL GROUP" means the Company and all of
its Subsidiaries on and after the Effective Date.
(S)2.34. "VLASIC STOCK" means common stock of the Company.
ARTICLE III
ADMINISTRATION
(S)3.1. COMMITTEE TO ADMINISTER. The Plan shall be administered by the
Committee. The Committee shall have full power and authority to interpret and
administer the Plan and to establish and amend rules and regulations for its
administration. The Committee's decisions shall be final and conclusive with
respect to the interpretation of the Plan and any Award made under it.
A majority of the members of the Committee shall constitute a quorum for
the conduct of business at any meeting. The Committee shall act by majority vote
of the members present at a duly convened meeting, which may include a meeting
by conference telephone call held in accordance with applicable law. Action may
be taken without a meeting if written consent thereto is given in accordance
with applicable law.
(S)3.2. POWERS OF COMMITTEE.
(a) Subject to the provisions of the Plan, the Committee shall
have authority, in its discretion, to determine those Employees who shall
receive an Award, the time or times when such Award shall be made, the vesting
schedule, if any, for the Award and the type of Award to be granted, whether an
Incentive Stock Option or a Nonqualified Stock Option shall be granted, the
number of shares to be subject to each Option and Restricted Stock Award, and
the value of each Performance Unit.
(b) The Committee shall determine and set forth in an Award
Statement the terms of each Award, including such terms, restrictions, and
provisions as shall be necessary to cause certain options to qualify as
Incentive Stock Options. The Committee may correct any defect or supply any
omission or reconcile any inconsistency in the Plan or in any Statement relating
to an Award, in such manner and to the extent the Committee shall determine in
order to carry out the purposes of the Plan. The Committee may, in its
discretion, accelerate (i) the date
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on which any Option or SAR may be exercised, (ii) the date of termination of the
restrictions applicable to a Restricted Stock Award, or (iii) the end of a
Performance Period under a Performance Unit Award, if the Committee determines
that to do so will be in the best interests of the Company and the Participants
in the Plan.
ARTICLE IV
AWARDS
(S)4.1. AWARDS. Awards under the Plan shall consist of Incentive Stock
Options, Nonqualified Stock Options, SARs, Restricted Stock, unrestricted Vlasic
Stock and Performance Units. All Awards shall be subject to the terms and
conditions of the Plan and to such other terms and conditions consistent with
the Plan as the Committee deems appropriate. Awards under a particular section
of the Plan need not be uniform and Awards under two or more sections may be
combined in one Statement. Any combination of Awards may be granted at one time
and on more than one occasion to the same Employee. Awards of Performance Units
and Restricted Performance Stock shall be earned solely upon attainment of
Performance Goals and the Committee shall have no discretion to increase such
Awards.
(S)4.2. ELIGIBILITY FOR AWARDS. An Award may be made to any Employee
selected by the Committee. In making this selection and in determining the form
and amount of the Award, the Committee may give consideration to the functions
and responsibilities of the respective Employee, his or her present and
potential contributions to the success of the Vlasic Foods International Group,
the value of his or her services to the Vlasic Foods International Group, and
such other factors deemed relevant by the Committee.
(S)4.3. SHARES AVAILABLE UNDER THE PLAN. The Vlasic Stock to be offered
under the Plan pursuant to Options, SARs, Performance Unit Awards, and
Restricted Stock and unrestricted Vlasic Stock Awards will be authorized but
unissued Vlasic Stock or Vlasic Stock previously issued and outstanding and
reacquired by the Company. Subject to adjustment under Section 10.2, (i) no more
than 5,800,000 shares of Vlasic Stock shall be issuable upon exercise of
Options, SARs, or pursuant to Performance Unit Awards, Restricted Stock or
unrestricted Vlasic Stock Awards granted under the Plan, and (ii) no less than
80% of such shares of Vlasic Stock shall be issuable upon exercise of Options..
Any shares of Vlasic Stock tendered in exercise of an Option or subject to an
Option that for any reason is canceled or terminated without having been
exercised, or any shares of Restricted Stock which are forfeited, shall again be
available for Awards under the Plan. Shares subject to an Option canceled upon
the exercise of an SAR shall not again be available for Awards under the Plan.
(S)4.4. LIMITATION ON AWARDS. The maximum aggregate dollar value of
Restricted Stock and Performance Units awarded to any Employee with respect to a
Performance Period or Restriction Period may not exceed $5,000,000 for each
fiscal year included in such Performance Period or Restriction Period. The
maximum number of shares for which Options may be granted
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to any Participant in any one fiscal year shall not exceed 2,000,000 shares. The
foregoing dollar value and share limits shall not apply to Restricted Stock,
Performance Units and Options attributable to a Xxxxxxxx Conversion Award.
(S)4.5. GENERAL PERFORMANCE GOALS. Prior to the beginning of a
Performance Period the Committee will establish, in writing, Performance Goals
for the Company and its various operating units and its Subsidiaries. The goals
will 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 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.
ARTICLE V
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
(S)5.1. AWARD OF STOCK OPTIONS. The Committee may, from time to time,
subject to Section 3.2(b) and other provisions of the Plan and such terms and
conditions as the Committee may prescribe, award Incentive Stock Options and
Nonqualified Stock Options to any Employee. Awards of Incentive Stock Options
and Nonqualified Stock Options must be separate and not in tandem.
(S)5.2. PERIOD OF OPTION.
(a) An Option granted under the Plan shall be exercisable only
in accordance with the vesting schedule approved by the Committee. After the
waiting period, the Option may be exercised at any time during the term of the
Option, in whole or in installments, as specified in the related Statement.
Subject to Section 5.6, the duration of each Option shall not be more than ten
years from the date of grant.
(b) Except as provided in Section 5.6, an Option may not be
exercised by a Participant unless such Participant is then, and continually
(except for sick leave, United States military service, or other approved leave
of absence) after the grant of the Option has been, an employee of the Vlasic
Foods International Group.
(S)5.3. STATEMENT. Each Option shall be evidenced by a Statement.
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(S)5.4. OPTION PRICE, EXERCISE AND PAYMENT. The Option Price of Vlasic
Stock under each Option shall be determined by the Committee but shall be a
price not less than 100 percent of the Fair Market Value of Vlasic Stock at the
date such Option is granted, as determined by the Committee. The Board shall
establish the Option Price for each Option attributable to a Xxxxxxxx Conversion
Award. Options shall not be repriced.
Options may be exercised from time to time by giving notice to the Company,
or the agent of the Company, specifying the number of shares to be purchased.
The notice of exercise shall be accompanied by payment in full of the Option
Price in cash or the Option Price may be paid in whole or in part through the
transfer to the Company of shares of Vlasic Stock.
In the event such Option Price is paid in whole or in part with shares of
Vlasic Stock, the portion of the Option Price so paid shall be equal to the Fair
Market Value, as of the date of exercise of the Option, of such shares or if the
date of exercise is not a trading day the Fair Market Value of the shares on the
immediately preceding trading day. The Company shall not issue or transfer
Vlasic Stock upon exercise of an Option until the Option Price is fully paid.
The Participant may satisfy any amounts required to be withheld by the Company
under applicable federal, state and local tax laws in effect from time to time,
by electing to have the Company withhold a portion of the shares of Vlasic Stock
to be delivered for the payment of such taxes.
(S)5.5. LIMITATIONS ON INCENTIVE STOCK OPTIONS. Each provision of the
Plan and each Option Statement relating to an Incentive Stock Option shall be
construed so that each Incentive Stock Option shall be an incentive stock option
as defined in Section 422 of the Code, and any provisions of the Option
Statement thereof that cannot be so construed shall be disregarded.
(S)5.6. TERMINATION OF EMPLOYMENT. Unless otherwise specifically
provided in the terms of a Statement, the following provisions will govern the
ability of a Participant to exercise any outstanding Options following the
Participant's termination of employment with the Vlasic Foods International
Group:
(a) If the employment of a Participant with the Vlasic Foods
International Group is terminated for reasons other than (i) death or
disability, (ii) discharge for Cause, (iii) retirement, or (iv) resignation, the
Participant may exercise an Option, except an Incentive Stock Option, at any
time within three years after such termination, to the extent of the number of
shares covered by such Option that were exercisable at the date of such
termination; except that an Option shall not be exercisable on any date beyond
the expiration of such three-year period or the expiration date of such Option,
whichever occurs first.
(b) If the employment of a Participant with the Vlasic Foods
International Group is terminated for Cause, any Options of such Participant
shall expire and any rights thereunder shall terminate immediately. Any Option
of a Participant whose service is terminated by resignation may be exercised at
any time within three months of such resignation to the extent that the number
of shares covered by such Option were exercisable at the date of such
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resignation, except that an Option shall not be exercisable on any date beyond
the expiration date of such Option.
(c) Should a Participant die or become disabled either while in
the employ of the Vlasic Foods International Group or after termination of such
employment (other than discharge for Cause), the Option rights of such deceased
or disabled Participant may be exercised by his or her Personal Representative
at any time within three years after the Participant's date of death or
disability to the extent of the number of shares covered by such Option that
were exercisable at the date of such death or disability, except that an Option
shall not be so exercisable on any date beyond the expiration date of such
Option.
If a Participant who was granted a Nonqualified Stock Option should die
within 180 days of the expiration date of such Option, and if on the date of
death the Participant was then entitled to exercise such Option, and if the
Option expires without being exercised, the Personal Representative of the
Participant shall receive in settlement a cash payment from the Company of a sum
equal to the amount, if any, by which the Fair Market Value (determined on the
expiration date of the Option) of Vlasic Stock subject to the Option exceeds the
Option Price.
(d) Any Option of a Participant whose service is terminated
while eligible to retire under the Company's tax qualified pension plan or such
a pension plan of any affiliated company at the date of such termination may be
exercised at any time up to 10 years after such termination, as determined by
the Committee, except that an Option shall not be exercisable on any date beyond
the expiration date of such Option. In the event the Participant's employment
with the Vlasic Foods International Group terminates prior to the vesting of all
Options, and if the Participant is eligible to retire, as described above, any
installment or installments not then exercisable shall become fully exercisable
as of the effective date of such termination.
(S)5.7. SHAREOWNER RIGHTS AND PRIVILEGES. A Participant shall have no
rights as a shareowner with respect to any shares of Vlasic Stock covered by an
Option until the issuance of shares to the Participant.
(S)5.8. AWARD OF SARS.
(a) At any time prior to six months before an Option's
expiration date, the Committee may award to the Participant an SAR related to
the Option. The Committee may also award SARs that are unrelated to any Option.
(b) The SAR shall represent the right to receive payment of an
amount not greater than the spread, if any, by which the Fair Market Value of
the Vlasic Stock on the trading day immediately preceding the date of exercise
of the SAR exceeds the Option Price.
(c) SARs awarded under the Plan shall be evidenced by a
Statement between the Company and the Participant.
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(d) The Committee may prescribe conditions and limitations on
the exercise or transferability of any SAR. SARs may be exercised only when the
value of a share of Vlasic Stock exceeds the Option Price. Such value shall be
determined in the manner specified in Section 5.8(b).
(e) An SAR shall be exercisable only by notice to the Company.
However, an SAR shall in no event be exercisable during the first six months of
its term, except in the event of death or disability of the Participant prior to
the expiration of such six-month period.
(f) All SARs shall automatically be exercised on the last
trading day prior to their expiration, so long as the Fair Market Value of a
share of Vlasic Stock exceeds the Option Price, unless prior to such day the
holder instructs the Treasurer of the Company otherwise in writing. Such Fair
Market Value shall be determined in the manner specified in Section 5.8(b).
(g) Payment of the amount to which a Participant is entitled
upon the exercise of an SAR shall be made in cash, Vlasic Stock, or partly in
cash and partly in Vlasic Stock at the discretion of the Committee. The shares
shall be valued in the manner specified in Section 5.8(b).
(h) At any time when a Participant is, in the judgment of the
Corporate Secretary of the Company, subject with respect to Vlasic Stock to
Section 16 of the 1934 Act, in the event the Committee has not determined the
form in which a SAR will be paid (i.e., cash, shares of Vlasic Stock, or any
combination thereof), any election to exercise such right in whole or in part
for cash shall be subject to the subsequent consent thereto, or disapproval
thereof, by the Committee in its sole discretion.
(i) Each SAR shall expire on a date determined by the Committee
at the date of grant of the Award.
ARTICLE VI
RESTRICTED STOCK AWARDS
(S)6.1. AWARD OF RESTRICTED STOCK.
(a) The Committee may make a Restricted Stock Award to any
Participant, subject to this Article VI and to such other terms and conditions
as the Committee may prescribe.
(b) Each certificate for Restricted Stock may be registered in
book-entry form or may be registered in the name of the Participant and
deposited by him or her, together with a stock power endorsed in blank, with the
Company, unless the Participant is a Highly Compensated Employee and has elected
to defer pursuant to Section 9.1.
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(S)6.2. RESTRICTION PERIOD. At the time of making a Restricted Stock
Award, the Committee shall establish the Restriction Period applicable to such
Award. The Committee may establish different Restriction Periods from time to
time and each Restricted Stock Award may have a different Restriction Period, in
the discretion of the Committee. Restriction Periods, when established for each
Restricted Stock Award, shall not be changed except as permitted by Section 6.3.
(S)6.3. OTHER TERMS AND CONDITIONS. Vlasic Stock, when awarded pursuant
to a Restricted Stock Award, will be represented by a book-entry notation or a
stock certificate registered in the name of the Participant who receives the
Restricted Stock Award, unless the Participant is eligible for and has elected
to defer pursuant to Article IX. Such certificate shall be deposited with the
Company as provided in Section 6.1(b). The Participant shall be entitled to
receive dividends during the Restriction Period and shall have the right to vote
such Vlasic Stock and all other shareowner's rights, with the exception that (i)
the Participant will not be entitled to delivery of a stock certificate during
the Restriction Period, (ii) the Company will retain custody of the certificate,
if any, during the Restriction Period, and (iii) a breach of a restriction or a
breach of the terms and conditions established by the Committee pursuant to the
Restricted Stock Award will cause a forfeiture of the Restricted Stock Award.
The Participant may satisfy any amounts required to be withheld by the Company
under applicable federal, state and local tax laws in effect from time to time,
by electing to have the Company withhold a portion of the Restricted Stock Award
to be delivered for the payment of such taxes. The Committee may, in addition,
prescribe additional restrictions, terms, or conditions upon or to the
Restricted Stock Award, including performance restrictions in accordance with
Section 4.5.
(S)6.4. RESTRICTED STOCK AWARD STATEMENT. Each Restricted Stock Award
shall be evidenced by a Statement.
(S)6.5. TERMINATION OF EMPLOYMENT. The Committee may, in its sole
discretion, establish rules pertaining to the Restricted Stock Award in the
event of termination of employment (by retirement, disability, death, or
otherwise) of a Participant prior to the expiration of the Restriction Period.
(S)6.6. PAYMENT FOR RESTRICTED STOCK. Restricted Stock Awards may be
made by the Committee under which the Participant shall not be required to make
any payment for the Vlasic Stock or, in the alternative, under which the
Participant, as a condition to the Restricted Stock Award, shall pay all (or any
lesser amount than all) of the Fair Market Value of the Vlasic Stock, determined
as of the date the Restricted Stock Award is made. If the latter, such purchase
price shall be paid as provided in the Statement.
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ARTICLE VII
UNRESTRICTED VLASIC STOCK AWARDS
(S)7.1. The Committee may make awards of unrestricted Vlasic Stock to
Employees in recognition of outstanding achievements or as an award for
Employees who receive Restricted Stock Awards when Performance Goals are
exceeded.
(S)7.2. Each Award of unrestricted Vlasic Stock shall be registered in
the name of the Participant and immediately be delivered to him or her or may be
noted as unrestricted in the book-entry records.
ARTICLE VIII
AWARD OF PERFORMANCE UNITS
(S)8.1. AWARD OF PERFORMANCE UNITS. The Committee may award Performance
Units to any Participant. Each Performance Unit shall represent the right of a
Participant to receive an amount equal to the value of the Performance Unit,
determined in the manner established by the Committee at the time of Award.
(S)8.2. PERFORMANCE PERIOD. At the time of each Performance Unit Award,
the Committee shall establish, with respect to each such Award, a Performance
Period during which performance shall be measured. There may be more than one
Award in existence at any one time, and Performance Periods may differ.
(S)8.3. PERFORMANCE MEASURES. Performance Units shall be awarded to a
Participant contingent upon the attainment of Performance Goals in accordance
with Section 4.5.
(S)8.4. PERFORMANCE UNIT VALUE. Each Performance Unit shall have a
maximum dollar value established by the Committee at the time of the Award.
Performance Units earned will be determined by the Committee in respect of a
Performance Period in relation to the degree of attainment of Performance Goals.
The measure of a Performance Unit may, in the discretion of the Committee, be
equal to the Fair Market Value of one share of Vlasic Stock.
(S)8.5. AWARD CRITERIA. In determining the number of Performance Units
to be granted to any Participant, the Committee shall take into account the
Participant's responsibility level, performance, potential, cash compensation
level, other incentive awards, and such other considerations as it deems
appropriate.
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(S)8.6. PAYMENT.
(a) Following the end of a Performance Period, a Participant
holding Performance Units will be entitled to receive payment of an amount, not
exceeding the maximum value of the Performance Units, based on the achievement
of the Performance Goals for such Performance Period, as determined by the
Committee.
(b) Payment of Performance Units shall be made in cash, whether
payment is made at the end of the Performance Period or, in the case of a Highly
Compensated Employee, is deferred pursuant to Section 9.1, except that
Performance Units which are measured using Vlasic Stock shall be paid in Vlasic
Stock. Payment shall be made in a lump sum or in installments and shall be
subject to such other terms and conditions as shall be determined by the
Committee.
(S)8.7. TERMINATION OF EMPLOYMENT.
(a) A Performance Unit Award shall terminate for all purposes if
the Participant does not remain continuously in the employ of the Vlasic Foods
International Group at all times during the applicable Performance Period,
except as may otherwise be determined by the Committee.
(b) In the event that a Participant holding a Performance Unit
ceases to be an employee of the Vlasic Foods International Group following the
end of the applicable Performance Period but prior to full payment according to
the terms of the Performance Unit Award, payment shall be made in accordance
with terms established by the Committee for the payment of such Performance
Unit.
(S)8.8. PERFORMANCE UNIT STATEMENTS. Performance Unit Awards shall be
evidenced by Performance Unit Statements.
ARTICLE IX
DEFERRAL OF CERTAIN PAYMENTS
A Participant who is a Highly Compensated Employee may elect to
defer all or a portion of any related earned Performance Units, Restricted Stock
or gain on any exercised Option pursuant to the terms of the Deferred
Compensation Plan. The value of the Performance Units, Restricted Stock or
Option gain so deferred shall be transferred to the Deferred Compensation Plan
and held in an account under that plan established for the Participant.
Participants who are subject to tax in a foreign country are not eligible to
defer payment of Performance Units, Restricted Stock or Option gain unless a
deferral election has been approved for the Participant by the Company.
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ARTICLE X
MISCELLANEOUS PROVISIONS
(S)10.1. LIMITS AS TO TRANSFERABILITY. With the prior approval of the
Committee, an Option may, at the election of the Participant, be transferred to
the spouse or a descendant of the Participant, or a trust for the benefit of the
spouse or descendants. Unless otherwise provided by the Committee, however, no
SAR, share of Restricted Stock, or Performance Unit under the Plan shall be
transferable by the Participant otherwise than by will or, if the Participant
dies intestate, by the laws of descent and distribution. All Awards other than
Options that are transferred in accordance with the foregoing provisions shall
be exercisable or received during the Participant's lifetime only by such
Participant or his Personal Representative. Any transfer contrary to this
Section 10.1 will nullify the Option, SAR, Performance Unit, or share of
Restricted Stock..
(S)10.2. ADJUSTMENTS UPON CHANGES IN STOCK. In case of any
reorganization, recapitalization, stock split, stock dividend, combination of
shares, merger, consolidation, rights offering, or any other changes in the
corporate structure or shares of the Company, appropriate adjustments may be
made by the Committee (or if the Company is not the surviving corporation in any
such transaction, the board of directors of the surviving corporation) in the
aggregate number and kind of shares subject to the Plan, and the number and kind
of shares and the price per share subject to outstanding Options or that may be
issued under outstanding Restricted Stock Awards or pursuant to unrestricted
Vlasic Stock Awards. Appropriate adjustments may also be made by the Committee
in the terms of any Awards under the Plan, to reflect such changes and to modify
any other terms of outstanding Awards on an equitable basis, including
modifications of Performance Goals and changes in the length of Performance
Periods.
(S)10.3. AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN.
(a) The Board may suspend or terminate the Plan or any portion
thereof at any time, and may amend the Plan from time to time in such respects
as the Board may deem advisable in order that any Awards thereunder shall
conform to any change in applicable laws or regulations or in any other respect
the Board may deem to be in the best interests of the Company. No such
amendment, suspension, or termination shall alter or impair any outstanding
Options, SARs, shares of Restricted Stock, or Performance Units without the
consent of the Participant adversely affected thereby.
(b) With the consent of the Participant adversely affected
thereby, the Committee may amend or modify any outstanding Options, Restricted
Stock Awards, or Performance Unit Awards in any manner to the extent that the
Committee would have had the authority under the Plan initially to award such
Options, SARs, Restricted Stock Awards, or Performance Unit Awards as so
modified or amended, including without limitation, to change the date or dates
as of which such Options or SARs may be exercised, to remove the restrictions
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on shares of Restricted Stock, or to modify the manner in which Performance
Units are determined and paid.
(S)10.4. NONUNIFORM DETERMINATIONS. The Committee's determinations under
the Plan, including without limitation, (i) the determination of the Employees
to receive Awards, (ii) the determination of Highly Compensated Employees
eligible to defer Performance Units or Restricted Stock, (iii) the form, amount,
and timing of such Awards, (iv) the terms and provisions of such Awards and (v)
the Statements evidencing the same, need not be uniform and may be made by it
selectively among Employees who receive, or who are eligible to receive, Awards
under the Plan, whether or not such Employees are similarly situated.
(S)10.5. GENERAL RESTRICTION. Each Award under the Plan shall be subject
to the condition that, if at any time the Committee shall determine that (i) the
listing, registration, or qualification of the shares of Vlasic Stock subject or
related thereto upon any securities exchange or under any state or federal law,
(ii) the consent or approval of any government or regulatory body, or (iii) an
agreement by the Participant with respect thereto, is necessary or desirable,
then such Award shall not become exercisable in whole or in part unless such
listing, registration, qualification, consent, approval, or agreement shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
(S)10.6. NO RIGHT TO 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.
(S)10.7. TRUST ARRANGEMENT. All benefits under the Plan represent an
unsecured promise to pay by the Company and its Subsidiaries. The Plan shall be
unfunded and the benefits hereunder shall be paid only from the general assets
of the Company or 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.
ARTICLE XI
CHANGE IN CONTROL OF THE COMPANY
(S)11.1. CONTRARY PROVISIONS. Notwithstanding anything contained in the
Plan to the contrary, the provisions of this Article XI shall govern and
supersede any inconsistent terms or provisions of the Plan.
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(S)11.2. DEFINITION OF "ADJUSTED FAIR MARKET VALUE." For purposes of
the Plan, "Adjusted Fair Market Value" means, in the event of a Change in
Control, the greater of (i) the highest price per share of Vlasic Stock paid to
holders of the shares of Vlasic Stock in any transaction (or series of
transactions) constituting or resulting in a Change in Control or (ii) the
highest Fair Market Value of a share of Vlasic Stock during the 90 day period
ending on the date of a Change in Control.
(S)11.3. 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)11.4. 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 11.4(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
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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 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)11.5. EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS. Upon a Change
in Control, (a) all Options and SARs outstanding on the date of such Change in
Control shall become immediately and fully exercisable and (b) any Participant
who may be subject to liability under Section 16(b) of the 1934 Act, will be
permitted to surrender for cancellation for a period of 60 days commencing after
the later of such Change in Control or the expiration of six months from the
date of grant, any Option or SAR (or portion of an Option or SAR), to the extent
not yet exercised and the Participant will be entitled to receive a cash payment
in an amount equal to the excess, if any, in respect of each Option or SAR
surrendered, (i)(A) except as described in clause (B) below, the greater of (x)
the Fair Market Value, on the date preceding the date of surrender of the shares
subject to the Option or SAR (or portion thereof) surrendered or (y) the
Adjusted Fair Market Value of the Shares subject to the Option or SAR (or
portion thereof) surrendered or (B) in the case of an Incentive Stock Option or
an SAR issued in connection with an Incentive Stock Option, the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to the
Option or SAR (or portion thereof) surrendered, over (ii) the aggregate purchase
price for such Shares under the Option or SAR.
(S)11.6. EFFECT OF CHANGE IN CONTROL ON RESTRICTED STOCK. Upon a Change
in Control, all restrictions upon any shares of Restricted Stock other than
Restricted Stock that is subject to performance related restrictions
("Performance Restricted Stock") shall lapse immediately and all such shares
shall become fully vested in the Participant and shall promptly be delivered to
the Participant.
(S)11.7. EFFECT OF CHANGE IN CONTROL ON PERFORMANCE RESTRICTED STOCK
AND PERFORMANCE UNITS.
(a) Upon a Change in Control, the Participant shall (i) become
vested in, and restrictions shall lapse on, the greater of (A) fifty percent
(50%) of the Performance Restricted Stock or Performance Units or (B) a pro rata
portion of such Performance Restricted Stock based on the portion of the
Performance Period that has elapsed to the date of the Change in Control and the
aggregate vesting percentage determined pursuant to this clause (B) shall be
applied to vesting first such awards granted the earliest in time preceding the
Change in Control (the "Vested Performance Awards") and (ii) be entitled to
receive (X) in respect of all Performance Units that become vested as a result
of a Change in Control, a cash payment within 30.days after such Change in
Control equal to the product of the then current value of a Performance Unit
multiplied by the number of Performance Units that become vested in accordance
with this Section 11.7 and (Y) in respect of all shares of Performance
Restricted Stock that become vested as a result of a Change in Control, the
prompt delivery of such shares.
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(b) With respect to any shares of Performance Restricted Stock
or Performance Units that do not become vested pursuant to Section 11.7(a) (the
"Continuing Awards"), such shares or units (or the proceeds thereof) shall
continue to be outstanding for the remainder of the applicable Performance
Period (as if such shares or units were the only shares or units granted in
respect of each such Performance Period) and subject to the applicable Award
Criteria as modified below.
(S)11.8. AMENDMENT OR TERMINATION.
(a) This Article XI shall not be amended or terminated at any
time if any such amendment or termination would adversely affect the rights of
any Participant under the Plan.
(b) For a period of 24 months following a Change in Control, the
Plan shall not be terminated (unless replaced by a comparable long-term
incentive plan) and during such period the Plan (or such replacement plan) shall
be administered in a manner such that Participants will be provided with long-
term incentive awards producing reward opportunities generally comparable to
those provided prior to the Change in Control. 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.
(c) Following a Change in Control, the Plan shall be amended as
necessary to make appropriate adjustments to the Award Criteria for the
Continuing Awards for (i) 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 achievement of Performance Goals under the Plan and (ii)
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 Award Criteria for comparable performance under the
Plan as in effect on the date immediately prior to the Change in Control.
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