EXHIBIT 10.4
SHARE AWARD AGREEMENT
This SHARE AWARD AGREEMENT ("Share Award") is dated as of October 2, 2002
and is effective as of October 1, 2002 (the "Date of Grant") by and between
Interstate Bakeries Corporation, a Delaware corporation ("IBC"), and Xx. Xxxxxxx
X. Xxxxxxxx, a director of IBC (the "Grantee").
Capitalized terms which are used in this Share Award that have not been
defined have the definitions provided in IBC's 1996 Stock Incentive Plan (the
"Plan") in effect as of the date of this Share Award. A copy of the Plan is
available upon request from IBC.
Recitals
A. IBC previously employed the Grantee, as Chairman of the Board and Chief
Executive Officer, pursuant to the terms of an Employment Agreement dated March
1, 1989, as amended by a Memorandum of Agreement dated May 16, 1991 and a
Restated Memorandum of Agreement dated July 22, 1992 (as amended, the
"Employment Agreement").
B. The Grantee previously announced his decision to retire effective
September 30, 2002 and, as of that date, the Grantee was no longer an employee
or an officer of IBC or any of its affiliates.
C. In connection with reviewing IBC's executive compensation levels and the
anticipated retirement of the Grantee, IBC's compensation committee hired the
executive compensation consulting firm of Xxxxx Xxxxx & Partners ("Xxxxx Xxxxx")
to among other things evaluate IBC's retirement benefit and executive
compensation programs, including its current CEO compensation level, as compared
to the programs of similar companies in IBC's peer group.
D. The report of Xxxxx Xxxxx indicated that the CEO compensation level of
IBC's CEO for the most recent few years was below the average compensation level
for CEOs of similar companies in IBC's peer group and that general retirement
benefits provided by IBC relative to the market place were totally inadequate in
connection with the Grantee, especially in light of Grantee's overall
performance and contribution to the growth, profitability and shareholder value
of IBC in difficult times.
E. The Grantee has advised IBC and its affiliates (the "Companies") that he
intends to exercise his option as provided in Paragraph 1 of the Employment
Agreement to convert the Employment Agreement to a consulting agreement.
F. The Compensation Committee of IBC has taken into account the past and
future services provided by the Grantee and as a condition to remaining on as a
director, serving as the Chairman of the Board, accepting such extended
position with the Companies and agreeing to all the terms and conditions of the
Consulting Agreement, including the confidentiality and non-competition
provisions and the termination of the Employment Agreement effective on
September 30, 2002, the Grantee has required that IBC (in
addition entering into the Consulting Agreement) issue to Grantee 133,000 shares
(the "Shares") of Common Stock (the "Award") as of the date of this Share Award
and amend as of the date of the Consulting Agreement that certain Deferred Share
Award Notice Agreement dated as of September 23, 1997 (the "First Award Notice")
to provide for issuance of the shares of common stock granted under the First
Award Notice to be issued by IBC as of the date hereof.
Agreement
In consideration of the mutual covenants contained in this Share Award,
the sufficiency of which is hereby agreed and acknowledged, the parties agree as
follows:
1. Share Award
(a) IBC hereby grants to the Grantee, subject to the terms and conditions
of the Plan and the terms and conditions of this Share Award, the right to the
Shares on the Date of Grant.
(b) The Grantee's right to receive the Shares will be fully vested as of
the Date of Grant and the Shares shall be issued to Grantee on the Date of
Grant.
2. Miscellaneous
(a) The Grantee agrees to be bound by all of the terms and provisions of
the Plan. The terms of the Plan as it presently exists, and as it may hereafter
be amended, are deemed incorporated herein by reference, and any conflict
between the terms of this Share Award and the terms and provisions of the Plan
shall be resolved by the Committee, whose determination shall be final and
binding on all parties. In general, and except as otherwise determined by the
Committee, the provisions of the Plan shall be deemed to supersede the
provisions of this Share Award to the extent of any conflict between the Plan
and this Share Award.
(b) Any notice hereunder to IBC shall be addressed to it at Interstate
Bakeries Corporation, Compensation Committee, 00 Xxxx Xxxxxx Xxxx., Xxxxxx Xxxx,
Xxxxxxxx 00000, attention: Corporate Secretary, subject to the right of the
Companies at any time hereafter to designate in writing a different address. Any
notice hereunder to the Grantee shall be addressed to him at the address set
forth under Grantee's signature, subject to the
(Remainder of page left blank intentionally.)
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right of Grantee at any time hereafter to designate in writing a
different address.
(c) The Committee may at any time unilaterally amend the terms and
conditions pertaining to the Award, provided, however, that any such amendment
which is adverse to the Grantee shall require the Grantee's written consent. Any
other amendment of this Share Award shall require a written agreement executed
by both parties.
(d) The terms and conditions contained in this Share Award, the Consulting
Agreement and the First Award Notice constitute the entire understanding of the
parties relating to this arrangement and supersede all previous communications,
either oral or written, including the Employment Agreement.
IN WITNESS WHEREOF, IBC has caused this Share Award to be executed by its
duly authorized officer and the Grantee has executed this Share Award to be
effective as of the Date of Grant.
INTERSTATE BAKERIES CORPORATION
By: /s/ Xxxx X. Xxxxxx
---------------------------
Xxxx X. Xxxxxx
Vice President - Treasurer
ACCEPTED AND AGREED TO:
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxxx, Grantee
ADDRESS: Xxxxxxx X. Xxxxxxxx
0000 Xxxx 000xx Xxxxxx
Xxxxxxx, Xxxxxx 00000
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