SEVERANCE AGREEMENT AND RELEASE OF ALL CLAIMS
EXHIBIT 10.1
SEVERANCE AGREEMENT
AND RELEASE OF ALL CLAIMS
AND RELEASE OF ALL CLAIMS
This Severance Agreement and Release of All Claims (“Agreement”) is made and entered into by
and between Xxxx X. Xxxxxxx (“Executive”) and Del Monte Corporation (the “Company”) (together, the
“Parties”).
R E C I T A L S
WHEREAS, Executive is employed by the Company as its Executive Vice President, Del Monte
Foods, pursuant to the terms of an Employment Agreement between Executive and the Company dated
September 1, 2004 (“Employment Agreement,” capitalized terms used herein and not otherwise defined
shall have the respective meanings assigned in the Employment Agreement); and
WHEREAS, Executive is resigning his employment for Good Reason in accordance with the terms
set forth in Paragraph 4(f) of the Employment Agreement and as modified by the terms and conditions
set forth herein; and
WHEREAS, Executive and the Company desire to terminate their employment relationship amicably
and to resolve, fully and finally, all matters relating to such termination and employment
relationship prior to Executive’s departure from the Company.
NOW, THEREFORE, in consideration of the foregoing recitals and the covenants, agreements and
promises set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties intending to be legally bound, hereby
agree as follows:
A G R E E M E N T
1. EXECUTIVE’S RESIGNATION. Pursuant to this Agreement, Executive shall resign and be
terminated from each and every position Executive holds as an officer and employee of the Company
and its affiliates effective June 19, 2006 (the “Termination Date”). As of the Termination Date,
the Company shall pay Executive all amounts required by Section 4(e)(i) of the Employment
Agreement, including any earned, but unpaid Base Salary, accrued but unused vacation and floating
holiday time, and unreimbursed expenses described in Section 2(f) of the Employment Agreement, and
benefits, if any Executive is entitled to receive under the benefit plans of the Company in which
Executive was an eligible participant, less all applicable federal, state or local taxes and other
normal payroll deductions.
2. SEVERANCE BENEFITS. In consideration of Executive’s release of claims and
Executive’s other covenants and agreements contained herein, after the later to occur of (i)
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the Termination Date or (ii) the date Executive signs this Agreement and delivers it to the
Company, provided that Executive has not exercised any revocation rights as set
forth in Paragraph 6(b) below, the Company shall pay Executive, as severance benefits, the amounts,
and provide Executive with the health and welfare benefits and Company perquisites described below
(collectively, the “Severance Benefits”):
a. Base Salary and Target Bonus Lump Sum Payment. Six (6) months and one (1) day
following the Termination Date, the Company shall pay Executive an amount equal to one and one-half
(1-1/2) times Executive’s Base Salary and target Bonus for Fiscal Year 2007 as a single lump sum
($1,127,100.00), less all applicable federal, state or local taxes and other normal payroll
deductions, including the health and welfare premiums described in Paragraph 2(e) below.
b. FY 2007 Pro-rated Bonus Payment. If Annual Incentive Plan bonus payments are made
by the Company at the end of the fiscal year in which Executive’s termination of employment occurs,
the Company shall pay Executive a pro-rata portion of Executive’s Fiscal Year 2007 Annual Incentive
Plan target bonus ($51,567.00), less all applicable federal, state or local taxes and other normal
payroll deductions, as described in Paragraph 4(e)(ii)(B) of the Employment Agreement.
c. Health and Welfare Benefit Continuation. The Company shall continue Executive’s
participation in the Company’s health and welfare benefit plans (except for disability plans), at
an equivalent level of participation as Executive had during the twelve (12) month-period prior to
Executive’s Termination Date, until the earlier of (i) eighteen (18) months after the Executive’s
Termination date, or (ii) such time as Executive is covered by comparable benefit plans or programs
of a subsequent employer (“Benefit Termination Date”). Executive shall immediately notify the
Company of his benefit coverage by a subsequent employer within sixty (60) days after the
initiation of such coverage. After the expiration of Executive’s benefit coverage with the
Company, Executive will be provided information and forms to elect COBRA (Consolidated Omnibus
Budget Reconciliation Act of 1985) continuation coverage under the Company medical, vision and
dental plans in which Executive participates. Executive’s employee contribution to the monthly
cost of his health and welfare benefits (based on Executive’s current health and welfare elections)
shall be aggregated for the 18 month period following the Termination Date and shall be deducted
from Executive’s Base Salary and Target Bonus Lump Sum Payment described in Paragraph 2(a) above.
If the Benefit Termination Date is less than 18 months after Executive’s Termination Date, the
interval between the Benefit Termination Date and 18 months following Executive’s Termination Date
shall be referred to as the “Benefit Refund Period.” As soon as practical after the Benefit
Termination Date, the Company shall pay to Executive all moneys deducted from Executive’s Base
Salary and Target Bonus Lump Sum Payment to cover the Executive’s
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cost for any health and welfare coverage that the Company would have provided to Executive
during the Benefit Refund Period had the Benefit Termination Date not preceded the date 18 months
following Executive’s Termination Date..
d. Executive Perquisite Plan Continuation. Six (6) months and one (1) day following
the Termination Date, the Company shall pay Executive an amount equal to six (6) month’s
participation in the Company’s Executive Perquisite Plan at the level Executive participated in as
of the Termination Date ($18,000.00), less all applicable federal, state or local taxes and other
normal payroll deductions. Thereafter, Executive shall continue to participate in the Company’s
Executive Perquisite Plan until the earlier of (i) the expiration of twelve (12) months, or (ii)
such time as Executive is covered by a comparable perquisite plan of a subsequent employer.
e. Pro-rated Vesting of Stock and Stock Option Awards. Executive shall vest in any
stock or stock option grants awarded by the Company to Executive pursuant to the Del Monte Foods
Company 2002 Stock Incentive Plan, or any predecessor plan, on a pro-rated basis, as determined by
the Company in the schedule of vested stock and stock option awards provided to Executive on June
19, 2006, as of Executive’s Termination Date; provided, however, Executive shall
not be entitled to take ownership or otherwise receive settlement of his pro-rated stock award(s)
until the end of the performance period associated with that stock award; provided
further that, Executive shall not be entitled to exercise, take ownership or
otherwise receive settlement of his pro-rated stock option award(s) until the scheduled vest date
associated with that tranche of the stock option award(s); provided further
that, upon vesting of Executive’s pro-rated stock option award(s), Executive shall have
ninety (90) days from that vesting date to exercise such stock options. The value of any pro-rated
stock option award shall be based on the exercise price and the fair market value at the time of
exercise.
f. Outplacement. The Company shall provide Executive with not less than eighteen (18)
months of executive-level outplacement services at the Company’s expense; provided
however, the expense for such outplacement services in any calendar year shall not exceed
eighteen percent (18%) of the amount equal to Executive’s highest Base Salary during the twelve
(12) month period prior to the Termination Date and the target Bonus for the year in which
termination occurs.
3. STOCK OPTIONS / RESTRICTED STOCK. Except as set forth in Paragraph 2(e) above, any
vested or unvested stock options or restricted stock grants awarded to Executive pursuant to the
Company stock incentive plan shall be subject to the terms and conditions of the applicable stock
option plans and stock or stock option agreements.
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4. RETIREMENT, SAVINGS, DEFERRED COMPENSATION. Effective as of Executive’s
Termination Date, Executive shall cease to participate in any Company sponsored retirement plans.
Any distribution of benefits to Executive pursuant to his participation in any retirement, pension,
savings, or deferred compensation plan sponsored by the Company shall be subject to the terms and
conditions of the applicable plans; provided that, distribution of any
non-qualified deferred compensation plan benefits to Executive shall be delayed six (6) months and
one (1) day following the Termination Date, if necessary, to comply with IRS Code Section 409A.
5. RELEASE AND WAIVER.
a. In consideration of the Severance Benefits paid to Executive pursuant to Paragraph 2 above,
Executive hereby forever releases and discharges the Company and its predecessors, affiliates,
subsidiaries, successors and assigns, as well as each of their respective past and present
officers, directors, employees, agents, insurance companies, attorneys and stockholders
(collectively, the “Released Parties”), from any and all claims, charges, complaints, liens,
demands, causes of action, obligations, damages and liabilities, known or
unknown, suspected or unsuspected, that Executive had, now has or
may hereafter claim to have against the Released Parties arising out of or relating in any way to
Executive’s hiring by, employment with or separation from the Company or otherwise relating to any
of the Released Parties from the beginning of time to the later to occur of (i) the Termination
Date, and (ii) the date Executive signs this Agreement.
b. This Release specifically extends to, without limitation, claims or causes of action for
wrongful termination, impairment of ability to compete in an open market, breach of an express or
implied contract, breach of any collective bargaining agreement, breach of the covenant of good
faith and fair dealing, breach of fiduciary duty, fraud, misrepresentation, defamation, slander,
infliction of emotional distress, disability, loss of future earnings, and any claims under the
California state constitution, the United States Constitution, and applicable state and federal
fair employment laws, federal equal employment opportunity laws, and federal and state labor
statues and regulations, including, the Civil Rights Act of 1964, as amended, the Fair Labor
Standards Act, as amended, the National Labor Relations Act, as amended, the Labor-Management
Relations Act, as amended, the Worker Adjustment and Retraining Notification Act of 1988, as
amended, the Americans With Disabilities Act of 1990, as amended, the Rehabilitation Act of 1973,
as amended, the Employee Retirement Income Security Act of 1974, as amended, the Age Discrimination
in Employment Act of 1967, as amended (“ADEA”), the Family and Medical Leave Act and the California
Fair Employment and Housing Act, as amended, and any related attorney’s fees, costs and expenses.
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c. By this release, Executive hereby expressly waives all rights afforded by Section 1542 of
the Civil Code of the State of California (“Section 1542”) with respect to the Released Parties.
Section 1542 states as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS
OR HER SETTLEMENT WITH THE DEBTOR.
Notwithstanding the provisions of Section 1542, and for the purpose of implementing a full and
complete release, Executive understands and agrees that this Agreement is intended to include all
claims, if any, which Executive may have and which Executive does not now know or suspect to exist
in Executive’s favor against the Released Parties, and this Agreement extinguishes those claims.
6. REVIEW AND REVOCATION PERIOD.
a. Executive acknowledges and agrees that he is waiving his rights under the ADEA and,
accordingly, he has at least twenty-one (21) calendar days after receipt of this Agreement to
consider whether to sign it, and the Company has advised Executive that he may consult with an
attorney of his choosing prior to signing and returning this Agreement.
b. Executive further acknowledges that he may change his mind and revoke this Agreement at any
time during the seven (7) calendar days after he signs the Agreement, in which case none of the
provisions of this Agreement will have any effect. Executive acknowledges and agrees that if he
wishes to revoke this Agreement, he must do so in writing, and that such revocation must be signed
by Executive and received by the Company at its headquarters located at Xxx Xxxxxx @ Xxx Xxxxxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 to the attention of Xxxx Xxxxxx, Vice President, Human Resources,
no later than 5:00 P.M. Pacific Time on the seventh (7th) day after Executive has signed
the Agreement. Executive acknowledges and agrees that, in the event Executive revokes this
Agreement, he shall have no right to receive any of the Severance Benefits described under
Paragraph 2.
7. CONTINUING OBLIGATIONS. Executive hereby acknowledges and affirms his continuing
obligations to the Company pursuant to Sections 6 and 7 of the Employment Agreement (a) not to use
or disclose Proprietary Information at any time and to return to the Company all property of the
Company in the Executive’s possession or under the Executive’s control; (b) not to, directly or
indirectly, solicit any employee of the Company to leave his or her
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employment for a period of two (2) years after the Termination Date; and (c) not to, directly or
indirectly, solicit, or knowingly encourage any current or future customer of or supplier to the
Company or any existing or future affiliate to modify the business relationship, or cease doing
business in whole or in part, with the Company or any affiliate for a period of two (2) years after
the Termination Date, all as more fully set forth in the Employment Agreement.
8. NON-DISPARAGEMENT. Executive agrees that he shall not, at any time, make, directly
or indirectly, any oral or written, public or private statements that are disparaging of the
Company or any of its subsidiaries, affiliates, successors, assigns, including any of their present
or former officers, directors, agents, or employees. Nor shall Executive make any oral or written,
public or private statements that disparage or otherwise constitute trade libel of the Company’s or
its subsidiaries’, affiliates’, successors’ or assigns’ products or services. In turn, the Company
agrees that it shall not make any corporate public communications that disparage Executive’s job
performance, including any such disparaging statements: (a) in the Form 8-K announcing Executive’s
departure from the Company; (b) in any other SEC filing; or (c) during the Company’s Earnings Call
on June 22, 2006 while describing or responding to questions concerning Executive’s departure. In
addition, the Company shall communicate to all its executives the Company’s policy that such
executives shall not make any public or private statements that are disparaging of Executive or
Executive’s performance at the Company.
9. REMEDIES. If the Company determines that Executive has materially violated the
terms and conditions of Paragraph 7 of this Agreement, the Company may elect, in its sole and
absolute discretion, upon ten (10) days’ notice to Executive, to file a lawsuit against Executive
for the alleged violation and, in connection with such lawsuit, arrange for a third party to hold
in escrow any unpaid Severance Benefits pending resolution of the dispute by a court of competent
jurisdiction, or, if the Parties so agree, a designated arbitrator; provided that,
any escrow instructions to the third party include an instruction to pay the unpaid Severance
Benefits held in escrow consistent with any judgment or order by a court of competent jurisdiction
or the Parties settlement agreement. It is further understood and agreed that if, at any time, a
violation of any term or condition of this Agreement is asserted by any party hereto, that party
shall have the right to seek specific performance of that term or condition and/or any other
necessary and proper relief, including, damages and injunctive relief from any court of competent
jurisdiction.
10. REPRESENTATIONS. Executive makes the following representations, each of which is
an important consideration to the Company’s willingness to enter into this Agreement with
Executive:
a. Executive acknowledges and represents that the Company is not entering into this Agreement
because it believes that Executive has any cognizable legal claim against the Released Parties,
other than under Section 4(f) of his Employment Agreement. Executive agrees
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that the purpose of this Agreement is to provide him with the benefits that he is entitled to
under Section 4(f) of Executive’s Employment Agreement.
b. Executive represents that he has not filed any claim, charge, grievance, complaint, or
action in or with any federal, state, or local court or administrative agency or before any other
tribunal against the Released Parties.
c. Executive acknowledges and agrees that except as provided above, Executive shall not be
entitled to receive any other compensation or benefits of any sort from the Company including,
salary, bonuses, stock, vacation pay, holiday pay, sick leave, short-term or long-term disability
benefits, health care continuation coverage (except as provided under federal or state law),
retirement, insurance, benefits otherwise payable under any of the Company’s severance plans,
programs or policies, or any other form of compensation or benefits from the Released Parties at
any time.
d. Executive represents and warrants that he has returned to the Company, or will do so within
seven (7) days of the full execution of this Agreement, all documents, data, records, keys, credit
cards, identification badges, proprietary or confidential information and other physical property
that came into Executive’s possession during his employment, whether acquired from the Company or
from any other source.
e. Executive acknowledges that, prior to signing this Agreement, he read and understood each
and every provision in this Agreement and that he had the opportunity to consult with an attorney
regarding the effect of each and every provision of this Agreement. Executive further acknowledges
that he knowingly and voluntarily entered into this Agreement with complete understanding of all
relevant facts, and that he was neither fraudulently induced nor coerced to enter into this
Agreement.
11. SEVERABILITY. Should any provision of this Agreement be declared or determined by
any court of competent jurisdiction to be wholly or partially illegal, invalid, or unenforceable,
it is specifically hereby agreed that the legality, validity, and enforceability of the remaining
parts, terms, or provisions of this Agreement shall not in any way be affected thereby; rather,
said illegal, invalid, or unenforceable part, term, or provision shall be deemed not to be a part
of this Agreement. Nor shall any such determination of illegality, invalidity, or unenforceability
of any part, term or provision of this Agreement by a particular court affect the legality,
validity or enforceability of any of the terms or provisions of this Agreement in any other
jurisdictions, it being intended that all rights and obligations of the Parties hereunder shall be
enforceable to the fullest extent permitted by law.
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12. THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of Executive
and the Released Parties and shall not inure to the benefit of any other third parties; provided
that, in the event Executive dies after executing this Agreement, but before receiving the payments
set forth in Paragraphs 2(a), 2(b) and 2(d) of this Agreement, Executive’s estate and/or heirs
shall be entitled to such payments.
13. NO WAIVERS; AMENDMENTS. The failure of either party to this Agreement to enforce
any of its terms, provisions or covenants shall not be construed as a waiver of the same or of the
right of such party to enforce the same except for Executive’s failure to revoke this Agreement
within seven (7) days of its execution as set forth in Paragraph 6(b) above. Waiver by the Company
of any breach or default by Executive of any term, provision or covenant of this Agreement shall
not operate as a waiver of any other breach or default by Executive. This Agreement may not be
amended or modified other than by a written instrument signed by the Company and Executive.
14. DESCRIPTIVE HEADINGS. The Paragraph headings contained herein are for reference
purposes only and shall not in any way affect the meaning or interpretation of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the same instrument.
16. GOVERNING LAW. This Agreement and all rights, duties and remedies hereunder shall
be governed by and construed and enforced in accordance with the laws of the State of California,
without reference to its choice of law rules.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the Parties relating to the subject matter hereof and merges and supersedes all
prior discussions, agreements and understandings of every kind and nature between the Parties
hereto and neither party shall be bound by any term or condition other than as expressly set forth
or provided for in this Agreement; provided that, Sections 4(i) (Ongoing
Obligations), 5 (Indemnification), 6 (Proprietary Information), 7 (Noninterference), 8 (Injunctive
Relief) and 10 (Miscellaneous) of Executive’s Employment Agreement shall survive the termination of
Executive’s employment, and remain in full force and effect as provided by the terms therein.
[Signatures on the following page.]
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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date set forth below:
EXECUTIVE
By:
|
/s/ Xxxx X. Xxxxxxx | Dated: June 21, 2006 | ||
| Xxxx X. Xxxxxxx | ||||
| DEL MONTE CORPORATION | ||||
By:
|
/s/ Xxxx X. Xxxxxx | Dated: June 21, 2006 | ||
| Xxxx X. Xxxxxx | ||||
| Vice President, Human Resources | ||||
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