Exhibit 10.07
XXXXXXX X. XXXXXX
LONG TERM INCENTIVE COMPENSATION PROGRAM
AS AMENDED MARCH 2005
This Long Term Incentive Compensation Program is entered into between Diamond of
California, hereinafter referred to as "Company" and Xxxxxxx X. Xxxxxx,
hereinafter referred to as X. Xxxxxx and contains the following mutually agreed
to covenants and promises.
I. The Company will commit to provide X. Xxxxxx on his retirement, at a
minimum age of 50 or at his election anytime later up to age 65, a long
term compensation fund to be paid him, or his designated beneficiary, in
equal installments over a ten (10) year period commencing with his date of
retirement. This long term incentive fund will be determined in the
following manner:
A. One million dollars ($1,000,000.00) base amount at the beginning of
this commitment in 2001.
B. Annual additions to the base amount computed at 7% of the balance on
the preceding anniversary date, or at the percentage payable on ten
(10) year government bonds at the new anniversary date, plus one
hundred fifty (150) basis points, whichever is higher.
C. Payments made under these terms will be in addition to any other
retirement benefits owing to X. Xxxxxx by the Company as regularly
earned.
II. In the event of X. Xxxxxx' death or disability prevent him from continuing
to deliver an effective performance as President/CEO, the fund, as
described in Paragraph I hereinabove, shall be payable (a) to his
designated beneficiary effective the day of his death, or (b) to X. Xxxxxx
in the event of his permanent disability, effective the day the permanent
disability is certified. This fund will be payable in equal installments
over a ten (10) year period effective the date of either event.
A. Payments made under these terms shall be in addition to any other
death or disability benefit(s) owed to X. Xxxxxx by the Company or
his beneficiary as regularly provided.
III. Should the Company ever convert any part or all of its business operations
to a for-profit company with publicly traded equity shares during X.
Xxxxxx'x employment as President/CEO, options to acquire such publicly
traded shares may be granted to X. Xxxxxx by the Board of Directors in
such quantities and at such exercise price or prices as may be mutually
acceptable to the Board and X. Xxxxxx, with a proviso that the option
cannot be exercised until X. Xxxxxx is (a) eligible to receive payments
authorized under Paragraph I hereinabove; and (b) that the total value
assigned by the Board of Directors to the publicly traded shares eligible
to be acquired under his option will be deducted from the aggregate fund
described in Paragraph I hereinabove.
1
IV. In the event X. Xxxxxx is terminated from his position as President/CEO by
the Board of Directors for any reason other than "Just Cause", the
designated long term compensation fund amount for time in service found in
Paragraph 1 A-B-C hereinabove shall become immediately available, with the
date of termination being the effective date. These long term compensation
funds shall constitute full payment of compensation owing upon his
termination.
V. At his election, X. Xxxxxx may retire at any time after attaining 50 years
of age, but not later than attaining the age of 65 years. Upon his
retirement he or his beneficiary will be entitled to full compensation as
provided for under Paragraphs I, II and III hereinabove. No addition
monies will be added to the long term compensation fund described in
Paragraph I hereinabove, after X. Xxxxxx has attained 55 years of age.
VI. Should X. Xxxxxx voluntarily leave Diamond's employment prior to attaining
age 50, he will forfeit all rights and benefits as described in the
foregoing paragraphs.
VII. All parties to this agreement understand that the obligations incurred by
the Company is not secured by any particular assets of the Company, but is
an unfounded obligation of the Company.
VIII. This agreement shall be binding upon X. Xxxxxx and his heirs, successors
and assigns and upon the Company and its successors and assigns.
IX. No payment hereunder shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, levy or
charge and any attempt to so assign or otherwise encumber such payment
shall be void.
X. Calculated Example of Long Term Compensation Funds:
Year Base Fund Annual Increase @ 7%
---- --------- --------------------
2001 $1,000,000 $ 70,000
2002 1,070,000 74,900
2003 1,114,900 80,143
2004 1,225,043 86,753
2005 1,402,552 91,756
2006 1,500,731 98,179
2007 1,605,782 105,051
2008 1,708,883 119,618
2009 1,828,501 127,995
2010 1,956,496 136,955
2011 2,093,451 146,541
2012 2,239,992
XI. The entire provisions and agreement between the parties has been
incorporated in this Agreement and may not be amended except in writing
signed by both parties.
2
