Exhibit 10.6
Conformed Copy
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of December 11, 1995, by
and between DEL MONTE CORPORATION, a New York corporation (the
"Company"), and XXXXX X. XXXXXX (hereinafter called the
"Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive
and the Executive is willing to serve as an employee of the
Company, subject to the terms and conditions of this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein, and other good and valuable consideration, the
parties hereto agree as follows:
Section 1. Employment
During the Term of Employment, as defined in Section 3
hereof, the Company shall employ the Executive, and the Executive
shall perform services for the Company, as the Co-Chairman and
Co-Chief Executive Officer of the Company on the terms and
conditions set forth in this Agreement.
Section 2. Duties
During the Term of Employment, the Executive shall,
together with the other Co-Chairman and Co-Chief Executive
Officer of the Company, be responsible for the general management
of the affairs of the Company, with such duties and
responsibilities as are assigned to him by the Board of Directors
of the Company (the "Board") that are appropriate for the
Co-Chairman and Co-Chief Executive Officer of the Company. All
determinations or actions by the
Executive in the capacity of Co-Chairman and Co-Chief Executive
Officer that are material to the operations, financial condition
or prospects of the Company shall require the concurrence of the
other Co-Chairman and Co-Chief Executive Officer of the Company.
It is also the intention of the parties that the Executive serve
as a director of the Company. The Executive shall also serve, if
requested, as an officer or director of any subsidiary or
affiliate of the Company.
The Executive shall devote his full business time,
attention and efforts to the performance of services for the Company,
its affiliates and subsidiaries; provided, however, that nothing in
this Agreement shall preclude the Executive from engaging in
charitable and community affairs, managing his personal
investments, and serving as a member of boards of directors of
other business companies or in other business capacities as the
Board may from time to time agree to, to the extent that such
activities do not inhibit or prohibit the performance of the
Executive's duties under this Agreement, or conflict in any
material way with the business of the Company, its subsidiaries
and affiliates.
Section 3. Term of Employment
The Term of Employment of this Agreement shall commence
on December 11, 1995 and end on December 31, 1997, unless terminated
earlier as set forth herein.
Section 4. Cash Compensation
(a) Base Salary. The Executive shall receive, as
compensation for his duties and obligations to the Company, a
salary at an annual rate of $750,000 (the "Base Salary"). The
Base Salary shall be payable in substantially equal installments
in accordance with the Company's standard payroll practices.
(b) New Management Equity Plan. The Executive shall be
eligible to participate in the Company's New Management Equity
Plan (the "LTIP") on the terms set forth
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therein; provided, however, that the Executive shall be entitled
to a minimum payment of $500,000 under the LTIP, payable on the
earlier of (i) the date that he would otherwise receive payment
under the LTIP (in which event the Executive shall receive the
greater of (x) $500,000 or (y) the amount the Executive would
otherwise receive under the LTIP); or (ii) December 31, 1997 (in
which event the Executive shall, provided he has not previously
received payment under the LTIP or clause (i) above, receive
$500,000); provided, further, that in the event the Executive
receives payment under clause (ii) above, the amount of such
payment shall be offset against and reduce any subsequent payment
to Executive under the LTIP. Notwithstanding the foregoing, the
Executive shall not be entitled to receive such $500,000 payment
if the Company has terminated his employment for Cause (as
defined herein) or if (on or before the earlier of (A) December
31, 1997 or (B) the date the Executive shall otherwise receive
payment under the LTIP) the Executive has terminated his
employment without Good Reason (also as defined herein);
provided, however, that no termination of the Executive's
employment for any reason (including without limitation as a
result of expiration of this Agreement without renewal at the end
of the Term of Employment) other than as set forth in this
sentence above shall be deemed in any way to limit the
Executive's right to such $500,000 payment.
Section 5. Other Benefit and Compensation Programs and Plans
(a) Employee Benefit Programs. During the Term of
Employment, the Executive shall be entitled to participate in all
employee benefit and perquisite programs of the Company in effect
from time to time for senior executive officers, including
without limitation, pension and other retirement plans, profit
sharing plans, group life insurance, hospitalization, medical and
dental coverage and long-term disability insurance. On and after
the date hereof, the
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Executive shall be 100% vested in the amounts accrued on his
behalf under the non-qualified portion of the Company's Personal
Retirement Account (the "PRA").
(b) Vacations and Sick Leave. The Executive shall be
entitled to vacation and sick leave each year, in accordance with
the Company's policies in effect from time to time, provided,
however, that the Executive shall be entitled to a four (4) weeks
vacation per year.
(c) Expenses. The Executive is authorized to incur
reasonable expense in carrying out his duties and
responsibilities under this Agreement, including expenses for
travel and similar items related to such duties and
responsibilities, in accordance with the Company's established
policies. The Company will reimburse the Executive for all such
expenses upon presentation by the Executive from time to time of
an appropriate itemized account of such expenditures.
(d) Relocation. The Executive shall be entitled to
relocation benefits as set forth on Exhibit A hereto.
(e) No Other Compensation. The payments, benefits and
perquisites provided to the Executive under Section 4 and this
Section 5 shall be the sole compensation, benefits and
perquisites to which the Executive is entitled from the Company,
its subsidiaries and affiliates, and, without limiting the
foregoing, the parties agree that the Executive shall not
participate in the Company's Annual Incentive Award Plan (or any
successor thereto).
Section 6. Directors' and Officers' Liability
The Company shall indemnify the Executive and provide
the Executive with directors' and officers' liability coverage
and shall maintain the indemnification and directors' and
officers' liability insurance coverage at levels of coverage and
protection no less favorable than that provided by the Company
for any director or officer of the Company, as applicable.
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The directors' and officers' coverage and indemnification
provided herein shall continue, as to the Executive, throughout
the period of any applicable statute of limitations.
Section 7. Termination
(a) Termination for Cause. In order to terminate the
employment of the Executive for Cause, the Company must deliver
to the Executive a Notice of Termination given within ninety (90)
days after the Board both (i) has or should have had knowledge of
conduct or an event allegedly constituting Cause, and (ii) has
reason to believe that such conduct or event could be grounds for
Cause. For purposes of this Agreement a "Notice of Termination"
shall mean a copy of a resolution duly adopted by the affirmative
vote of not less than three-fourths (3/4) of the membership of
the Board, excluding members who are employees of the Company, at
a meeting called for the purpose of determining that the
Executive has engaged in conduct which constitutes Cause (and at
which the Executive had a reasonable opportunity, together with
his counsel, to be heard before the Board prior to such vote).
For purposes of this Agreement "Cause" shall mean (A)
the Executive is convicted of, or has plead guilty or nolo
contendere to, a felony; (B) the willful and continued failure by
the Executive to perform substantially his duties with the
Company (other than any such failure resulting from incapacity
due to physical or mental illness) after a demand for substantial
performance is delivered to the Executive by the Company which
specifically identities the manner in which the Company believes
the Executive has not substantially performed his duties; (C) the
Executive engaging in conduct that constitutes gross neglect or
willful misconduct in carrying out his duties under this
Agreement involving material economic harm to the Company or any
of its subsidiaries; or (D) the Executive having engaged in a
material breach of Sections 9 or 10 of this Agreement. The
Executive shall have ten (10) days
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following receipt of the Notice of Termination to cure his
conduct, to the extent such cure is possible. If the Executive
does not cure within the ten (10) day period, his termination of
employment in accordance with the Notice of Termination shall be
deemed to be for Cause.
In the event of termination of the Executive's
employment by the Company for Cause, the Executive shall only be
entitled to:
(A) any accrued but unpaid salary through his date of
termination;
(B) reimbursement for business expenses incurred prior
to the date of termination; and
(C) other or additional benefits in accordance with
the applicable employee benefit programs of the Company
referred to in Section 5(a).
(b) Death or Disability. In the event of the death or
Disability of the Executive, the Executive's employment shall be
terminated as of the date of such death or Disability, and the
Executive, or the Executive's estate or legal representative, as
appropriate, shall be entitled to the amounts referred to in
paragraph (a) of this Section, together with any applicable
amounts under the LTIP.
In the event of a termination for Disability, the
Executive shall also be entitled to (i) an amount equal to the
sum of 100% of his Base Salary, for a period of 12 months from
the date of his termination of employment, less the amount of any
salary replacement benefits provided to the Executive by the
Company (other than benefits attributable to the Executive's own
contributions) under any disability plan and (ii) continued
participation for a period of 12 months in the medical, dental,
hospitalization and group life insurance programs of the
Executive in which he was participating on the date of
termination of his employment due to Disability; provided,
however, that nothing herein shall be deemed to limit any amounts
or benefits to which
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the Executive is otherwise entitled under the terms of the
Company's disability or other plans (as in effect from time to
time).
For purposes of this Agreement, "Disability" shall
mean (A) "total and permanent disability", as defined in the
Company's long-term disability plan for senior executives (or
such other Company-provided long-term disability benefit plan
sponsored by the Company in which the Executive participates at
the time the determination of Disability is made) (the
"Disability Plan"), or (B) such other condition which permits the
Executive to qualify for salary replacement benefits under the
Disability Plan; provided, however, that no termination of the
employment of the Executive for Disability shall become effective
(x) prior to the expiration of six (6) months after the date the
Executive first incurs the condition giving rise to the
Disability or (y) while the Executive is substantially performing
the regular duties associated with his employment hereunder.
(c) Sale. The Term of Employment shall automatically
terminate upon consummation of a "Sale", or, at the option of the
Company (if mutually agreed by Company and the purchaser(s) in
such Sale), on a date specified by the Company that is no later
than 150 days following consummation of such "Sale" (any such
period following consummation of a Sale being the "Transition
Period", which shall in no event extend beyond December 31,
1997); provided that the Executive's duties and authority during
any Transition Period shall be limited to providing the
purchaser(s) in such Sale with such consultation and assistance
in transition to new ownership as such purchaser(s) may
reasonably request on a basis consistent with the senior
executive duties previously carried out by the Executive. For
purposes of this Agreement, a "Sale" shall mean a sale or
transfer, other than as a result of an initial public offering of
shares of any class of stock of the Company or of its parent, Del
Monte Foods Company ("DMFC"), of all
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or substantially all of the capital stock or assets of the
Company or DMFC (whether carried out by means of a sale of stock,
sale of assets, merger, consolidation or otherwise), to one or
more purchasers unaffiliated with the Company or DMFC.
(d) Termination Without Cause, for Good Reason or upon
a Sale. If the Company terminates the Executive's employment
prior to the end of the Term of Employment without Cause, or in
the event the Executive terminates employment prior to the end of
the Term of Employment for Good Reason, or in the event the
Executive's employment terminates prior to the end of the Term of
Employment under paragraph (c) of this Section as a result of a
Sale, the Company shall pay the Executive, in a lump sum within
ten (10) days following his termination of employment, an amount
equal to the Executive's Base Salary that would have been earned
through December 31, 1997. The Executive shall also be entitled
to:
(1) the amounts referred to in paragraph (a) of this
Section;
(2) any applicable amounts under the LTIP; and
(3) continued participation in the medical, dental,
hospitalization and group life insurance coverage in which
he was participating on the date of the termination of his
employment, until the earlier of:
(A) December 31, 1997; and
(B) the date, or dates, he receives equivalent
coverage and benefits under the plans and programs of
a subsequent employer (such as coverage and benefits
to be determined on a coverage-by-coverage, or
benefit-by-benefit, basis).
The Executive must, within ninety (90) days after the
Executive knows or should have known of the occurrence of an
event or circumstances which would give him reason to
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believe constitutes Good Reason, give thirty (30) days prior
written notice of his intent to terminate employment for Good
Reason which notice sets forth the event or circumstances
believed to constitute Good Reason. Upon receipt of such notice,
the Company shall have ten (10) days to cure its conduct, to the
extent such cure is possible. If the Company does not cure within
the ten (10) day period, the Executive's termination of
employment in accordance with his written notice shall be deemed
to be for Good Reason.
For purposes of this Agreement, "Good Reason" shall
mean any of the following (without the Executive's express
written consent):
(i) the removal of or failure to elect or reelect
the Executive, during the Term of Employment, as Co-Chief
Executive Officer and Co-Chairman of the Board;
(ii) a material diminution in the Executive's duties
or responsibilities or the assignment to the Executive of
duties or responsibilities which are materially
inconsistent with his then current duties and
responsibilities; or
(iii any material breach by the Company of any
provision of this Agreement.
(e) Termination Without Good Reason. In the event of a
termination of employment by the Executive without Good Reason
(other than a termination due to death or Disability), the
Executive shall have the same entitlements as provided in
paragraph (a) of this Section for termination for Cause.
Section 8. Mitigation
The Executive shall not be required to mitigate the
amount of any payments or benefits provided for in Section 7(d)
hereof by seeking other employment or otherwise, and no amounts
earned by the Executive shall be used to reduce or offset the
amounts payable hereunder, expect as otherwise provided in
Section 7(d).
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Section 9. Agreement Not to Compete
(a) The Executive hereby covenants and agrees that at
no time during the period of his employment with the Company will
he for himself or on behalf of any other person, partnership,
company or corporation, directly or indirectly, acquire any
financial or beneficial interest in (except as provided in the
next sentence), provide consulting services to, be employed by,
or own, manage, operate or control any business which is in
competition with any business engaged in by the Company or any of
its subsidiaries or affiliates in any state of the United States
or other jurisdiction in which any of them are engaged in
business. Notwithstanding the preceding sentence, the Executive
shall not be prohibited from owning less than five (5%) percent
of any publicly traded corporation, whether or not such
corporation is in competition with the Company.
(b) The Executive hereby covenants and agrees that at
all times during the period of his employment with the Company
the Executive shall not employ or seek to employ any person
employed at that time by the Company or any of its subsidiaries,
or otherwise encourage or entice such person or entity to leave
such employment.
(c) It is the intention of the parties hereto that the
restrictions contained in this Section be enforceable to the
fullest extent permitted by applicable law. Therefore, to the
extent any court of competent jurisdiction shall determine that
any portion of the foregoing restrictions is excessive, such
provision shall not be entirely void, but rather shall be limited
or revised only to the extent necessary to make it enforceable.
Specifically, if any court of competent jurisdiction should hold
that any portion of the foregoing description is overly broad as
to one or more states of the United States or other
jurisdictions, then such state(s) or other jurisdiction(s) shall
be eliminated from the territory to which the restrictions of
paragraph (a) of this Section
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apply and the restrictions shall remain applicable in all
other states of the United States and other jurisdictions.
Section 10. Confidential Information
The Executive agrees to keep secret and retain in the
strictest confidence all confidential matters which relate to the
Company, its subsidiaries and affiliates, including, without
limitation, customer lists, client lists, trade secrets, pricing
policies and other business affairs of the Company, its
subsidiaries and affiliates learned by him from the Company or
any such subsidiary or affiliate or otherwise before or after the
date of this Agreement, and not to disclose any such confidential
matter to anyone outside the Company or any of its subsidiaries
or affiliates, whether during or after his period of service with
the Company, except (i) as such disclosure may be required or
appropriate in connection with his work as an employee of the
Company or (ii) when required to do so by a court of law, by any
governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative
body (including a committee thereof) with apparent jurisdiction
to order him to divulge, disclose or make accessible such
information. The Executive agrees to give the Company advance
written notice of any disclosure pursuant to clause (ii) of the
preceding sentence and to cooperate with any efforts by the
Company to limit the extent of such disclosure. Upon request by
the Company, the Executive agrees to deliver promptly to the
Company upon termination of his services for the Company, or at
any time thereafter as the Company may request, all Company,
subsidiary or affiliate memoranda, notes, records, reports,
manuals, drawings, designs, computer files in any media and other
documents (and all copies thereof) relating to the Company's or
any subsidiary's or affiliate's business and all property of the
Company or any subsidiary or affiliate
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associated therewith, which he may then possess or have
under his direct control, other than personal notes, diaries,
rolodexes and correspondence.
Section 11. Remedy
Should the Executive engage in or perform, either
directly or indirectly, any of the acts prohibited by Sections 9
or 10 hereof, it is agreed that the Company shall be entitled to
full injunctive relief, to be issued by any competent court of
equity, enjoining and restricting the Executive and each and
every other person, firm, organization, association, or
corporation concerned therein, from the continuance of such
violative acts. The foregoing remedy available to the Company
shall not be deemed to limit or prevent the exercise by the
Company of any or all further rights and remedies which may be
available to the Company hereunder or at law or in equity.
Section 12. Successors and Assigns
This Agreement shall be binding upon and inure to the
benefit of the heirs and representatives of the Executive and the
assigns and successors of the Company, but neither this Agreement
nor any rights hereunder shall be assignable or otherwise subject
to hypothecation by the Executive (except by will or by operation
of the laws of interstate succession) or by the Company.
Section 13. Representations
The Company represents and warrants that it is fully
authorized and empowered to enter into this Agreement and that
the performance of its obligations under this Agreement will not
violate any material agreement to which it is a party or by which
it is bound. The Executive represents that he knows of no
agreement to which he is a party or by which he is bound that
would be violated by the performance of his obligations under
this Agreement.
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Section 14. Governing Law
This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of California,
without reference to rules relating to conflicts of law.
Section 15. Entire Agreement
This Agreement constitutes the full and complete
understanding and agreement of the parties with respect to the
subject matter hereof and supersedes all prior understandings and
agreements as to employment of the Executive by the Company. This
Agreement cannot be amended, changed or modified without the
written consent of the parties hereto.
Section 16. Waiver of Breach
The waiver by either party of a breach of any term of this
Agreement shall not operate nor be construed as a waiver of any
subsequent breach thereof. Any waiver must be in writing and
signed by the Executive or an authorized officer of the Company,
as the case may be.
Section 17. Survivorship
The respective rights and obligations of the parties
hereunder shall survive any termination of the Executive's
employment to the extent necessary to the intended preservation
of such rights and obligations.
Section 18. Beneficiaries/References
The Executive shall be entitled, to the extent
permitted under any applicable law, to select and change a
beneficiary or beneficiaries to receive any compensation or
benefit payable hereunder following the Executive's death by
giving the Company written notice thereof. In the event of the
Executive's death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall
be deemed, where appropriate, to refer to his beneficiary, estate
or other legal representative.
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Section 19. Notice
Any notice, report, request or other communication
given under this Agreement shall be written and shall be
effective upon delivery personally or when sent by certified or
registered mail, postage prepaid, return receipt requested.
Unless otherwise notified by any of the parties,
notices shall be sent to the parties as follows:
To the Company:
Del Monte Corporation
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: General Counsel
To the Executive:
c/o Del Monte Corporation
Xxx Xxxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Section 20. Severability
If any one or more of the provisions contained in this
Agreement shall be invalid, illegal or unenforceable in any
respect under any applicable law, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in any way be affected or impaired thereby.
Section 21. Headings
The headings of the sections contained in this
Agreement are for convenience only and shall not be deemed to
control or affect the meaning or construction of any provision of
this Agreement.
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Section 22. Counterparts
This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but
all of which together will constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
DEL MONTE CORPORATION
By: /s/ Xxxxx X. Xxxxxx
---------------------------
Name:
Title:
/s/ Xxxxx X. Xxxxxx
---------------------------
XXXXX X. XXXXXX
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EXHIBIT A
Executive shall be eligible to participate in the Del
Monte Foods Relocation Policy -- New Hire with Experience --
Level III (Homeowner) or the Del Monte Relocation --Transferee
Policy (Homeowner), whichever of such policies taken as a whole
is more favorable to Executive (such more favorable policy being
sometimes herein referred to as the "Policy"), supplemented as
follows:
1. Guaranteed value of existing home(s) for purposes
of the Policy shall be the greater of (i) the value determined in
accordance with the Policy's appraisal procedure (including any
increase therein based on a third party offer) or (ii) the
original cost including improvements to the Executive of the
home(s).
2. The program shall cover two homes of Xxxx Xxxxxx
located in Medford, New Jersey and one home (including boat slip)
of Xxxxx Xxxxxx located in Miami, Florida.
3. The program shall cover relocation from San
Francisco area to any destination within the continental United
States upon termination or expiration of the Executive's
Employment Agreement on the same basis as the relocation to the
San Francisco area upon commencement of employment.
4. Executive shall receive one month's salary upon
each of the relocation to San Francisco and the relocation from
San Francisco to cover incidental relocation expenses.
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