EXHIBIT 10.1
PERFORMANCE BONUS PLAN
THIS PERFORMANCE BONUS PLAN (this "PLAN") is hereby entered
into among White Wave, Inc., a Colorado corporation (the "COMPANY"), Xxxx Foods
Company, a Delaware corporation ("XXXX"), each of the employees of the Company
listed on the signature page hereto (the "KEY EMPLOYEES") and Xxxxxx X. Demos
(the "KEY EMPLOYEE REPRESENTATIVE"), acting by virtue of this Plan as the
attorney-in-fact and representative of the Key Employees this 9th day of May,
2002 ("EFFECTIVE DATE").
WHEREAS, White Wave, Xxxx and Surf Acquisition Corp., a
Delaware corporation and wholly owned subsidiary of Xxxx ("ACQUISITION SUB"),
have entered into an Agreement and Plan of Merger dated April 23, 2002, as
amended, pursuant to which Merger Sub will merge (the "MERGER") with and into
White Wave, with White Wave as the surviving corporation in such Merger (the
"SURVIVING COMPANY");
WHEREAS, it is a condition of the Merger that the Company,
Xxxx and the Key Employee Representative enter into this Plan; and
WHEREAS, any capitalized terms that are used but not defined
herein shall have the meaning given to them in the Merger Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
promises contained in this Plan, and other good and valuable consideration, the
receipt and sufficiency of which are acknowledged by the parties, the parties
agree as follows:
ARTICLE I
PERFORMANCE BONUS PLAN
SECTION 1.1 PERFORMANCE BONUS.
(a) Performance Bonus; Key Employee Bonus. Pursuant to the
terms of this ARTICLE I and the other provisions of this Plan, if Net Sales of
the Surviving Company equal or exceed $382,500,000, and the Surviving Company
does not exceed the budgetary restrictions for the line items (accounted for
consistently with the Company's past practices and the Operating Plan)
contemplated by SECTIONS 1.3(a)(i) and (a)(ii) by more than $1,000,000 in the
aggregate, during the period commencing on April 1, 2002 and ending on March 31,
2004 (the "INCENTIVE PERIOD"), Xxxx shall deliver, or shall cause the Surviving
Company to deliver, to certain employees of the Surviving Company, including the
Key Employees, a bonus (the "PERFORMANCE BONUS") based on the amount of Net
Sales achieved during the Incentive Period as provided and in the amounts set
forth in SCHEDULE 1.1(a-1). In such event, Xxxx shall pay and deliver, or shall
cause the Surviving Company to pay and deliver, to the Key Employees an
aggregate of 68.56% of the Performance Bonus payable (the "KEY EMPLOYEE BONUS"),
as may be adjusted as provided in this ARTICLE I, and the remaining 31.44% of
the Performance Bonus (or such smaller or greater percentage as is allocated to
the Discretionary Pool Employees pursuant to SECTION 1.2(b)) shall be paid and
delivered to the Discretionary Pool Employees as discretionary bonuses (the
"DISCRETIONARY BONUS"). Pursuant to the terms of SECTION 1.4, Xxxx shall, or
shall cause the Surviving Company to, pay and deliver to (i) each of the Key
Employees except as otherwise expressly provided in this ARTICLE I an amount
(each, a Key Employee's "PRO RATA SHARE") equal to the Performance Bonus payable
multiplied by the percentage set forth opposite such Key Employee's name on
SCHEDULE 1.1(a-2)
and (ii) each of the Discretionary Pool Employees the amount of the
Discretionary Bonus allocated to such Discretionary Pool Employee on the Pool
Allocation Schedule in effect at the time of such payment.
(b) Discretionary Bonus. The Discretionary Bonus, if any,
shall be payable to certain employees of the Company (the "DISCRETIONARY POOL
EMPLOYEES") pursuant to the terms and conditions contained herein and in the
incentive plan attached hereto as Exhibit A (the "DISCRETIONARY INCENTIVE
PLAN"). The Discretionary Pool Employees eligible to participate in the
Discretionary Bonus and the allocation of the Discretionary Bonus to such
Discretionary Pool Employees shall be determined by Xxxxxx Xxxxx, or Xxxxxxxx
Xxxxxxx if Xxxxxx Xxxxx is no longer the President of the Surviving Company, or,
if Xxxxxxxx Xxxxxxx is no longer employed by the Surviving Company, the
President of the Surviving Company (such person shall be referred to as the
"COMPANY OFFICER") acting in a commercially reasonable manner, and a schedule
listing the names and positions of the Discretionary Pool Employees and their
respective allocations of the Discretionary Bonus shall be provided to Xxxx on
or prior to December 31, 2002 (the "POOL ALLOCATION SCHEDULE"). If a
Discretionary Pool Employee's employment is terminated for any reason, such
Discretionary Pool Employee's portion of the Discretionary Bonus shall be
available for allocation to any employee of the Surviving Company, including any
new employee hired during the Incentive Period, at the discretion of the Company
Officer, acting in a commercially reasonable manner. Within 60 days of such a
Discretionary Pool Employee's termination of employment, a revised Pool
Allocation Schedule will be delivered to Xxxx.
SECTION 1.2 TERMINATION OF EMPLOYMENT OF KEY EMPLOYEES DURING INCENTIVE
PERIOD.
(a) Notwithstanding the foregoing, in the event a Key Employee
is terminated during the Incentive Period:
(i) by Xxxx without Cause or upon a Constructive
Termination, such terminated Key Employee will be entitled to receive
as soon as practicable following the Determination Date his or her Pro
Rata Share as if the Surviving Company achieved $450 million in Net
Sales during the Incentive Period (the "BASE TARGET AMOUNT"), plus his
or her Pro Rata Share of any additional Performance Bonus payable if
actual Net Sales exceed $450 million during the Incentive Period;
(ii) upon his or her death or Incapacity, such
terminated Key Employee, or his or her estate, will be entitled to
receive as soon as practicable following the Determination Date his or
her Pro Rata Share of the Performance Bonus payable based on the amount
of Net Sales actually achieved during the Incentive Period; or
(iii) by Xxxx for Cause or by such Key Employee
without there having been a Constructive Termination, such terminated
Key Employee will not be entitled to receive any Key Employee Bonus.
(b) In the case of a termination described in SECTION
1.2(a)(iii) of the employment of (i) Xxxxx Xxxxxx, Xxxxxx Xxxx or Xxxxx Xxxxx,
the Pro Rata Share (if any) they would have been entitled to receive had their
employment not been terminated shall be available for allocation to any employee
of the Surviving Company (other than Xxxxxx Xxxxx or Xxxxxxxx Xxxxxxx),
including any new employee hired during the Incentive Period, by the Company
Officer, in consultation with the Chief Executive Officer of Xxxx, with each
acting in a commercially reasonable manner; and (ii) Xxxxxx Xxxxx or Xxxxxxxx
Xxxxxxx, the Pro Rata Share they would have been entitled to receive had their
employment not been terminated shall be forfeited and shall not be payable to
any other employee of the Surviving Company. To the extent the Company Officer
and the Chief Executive Officer of Xxxx are unable to agree on the
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allocation of all or any portion of a terminated Key Employee's Pro Rata Share
as provided in subparagraph (i), the amount of the Pro Rata Share in dispute
shall be allocated to the Discretionary Bonus and shall be payable to the
Discretionary Pool Employees as provided in SECTION 1.1. Notwithstanding
anything to the contrary herein, the amount of the Performance Bonus, if any,
allocable to the Discretionary Incentive Plan shall be reduced by $76,713, of
which $_______ shall be paid to _______________, and $__________ shall be paid
to _______________, in reimbursement for the investment banking fees previously
paid by them and incurred in connection with the creation of the Discretionary
Incentive Plan. Such reimbursement shall be paid pursuant to the preceding
sentence irrespective of whether ___________ or ___________ remain in the
employment of the Company.
SECTION 1.3 OPERATION DURING INCENTIVE PERIOD.
(a) During the Incentive Period, Xxxx will not take or cause
to be taken any action that materially and adversely affects the ability of the
Company Officer to exercise commercially reasonable discretion, recognizing the
Company's past practices with respect to new product development and
introduction, in the prudent management of the following line items as such line
items are reported in the Company's five-year operational plan dated March 13,
2002 and attached hereto as SCHEDULE 1.3 (the "OPERATING PLAN"):
(i) Sales, Marketing, Research and Development, and
General and Administrative expenses, subject to the limitation that the
aggregate of such line item amounts shall not exceed, in the aggregate
on an annual basis, the greater of (A) the dollar amount specified in
the Operating Plan or (B) the amount determined by multiplying actual
Net Sales by the percentage of Net Sales specified in the Operating
Plan for such line items; and
(ii) capital expenditures in the amounts set forth in
the Operating Plan line items Silk Asset Replacement and Tofu/Baked
Asset Replacement, subject to the limitation that the aggregate of such
line item amounts shall not exceed, in the aggregate on an annual
basis, the greater of (A) the dollar amount specified in the Operating
Plan or (B) the amount determined by multiplying actual Net Sales by
the percentage of Net Sales specified in the Operating Plan for such
line items, plus in either case up to $1.4 million in the fiscal year
ending March 31, 2003 to be used for the purchase and installation of a
bean extraction system.
(b) During the Incentive Period, Xxxx will permit the Company
Officer (i) to cause the Surviving Company to build a new extraction and
processing plant within the $18 million of capital expenditures budgeted in the
Operating Plan for the Company's fiscal year ending March 31, 2004 in the event
that Xxxx does not commit by December 1, 2002 to supply or make alternative
arrangements to supply production capacity to the Surviving Company sufficient
to support Net Sales as projected in the Operating Plan, and (ii) for reasons of
technology, geography, capacity or strategic competitive advantage, to jointly
determine with the Chief Executive Officer of Xxxx, with each acting in a
commercially reasonable manner, to contract with third parties for periods of
not more than three years for production facilities if Xxxx cannot or chooses
not to provide the capacity needed to achieve the Net Sales set forth in the
Operating Plan.
(c) If during the Incentive Period Xxxx takes any actions
prohibited in SECTION 1.3(a), or fails to allow action permitted by SECTION
1.3(b), in a manner, as reasonably determined by Xxxxxx Xxxxx, that materially
and adversely affects the Surviving Company's ability to achieve the Net Sales
targets, then Xxxxxx Xxxxx may elect to voluntarily terminate his employment
upon 60 days prior
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written notice to Xxxx and receive as soon as practicable following the
Determination Date (i) his Pro Rata Share as if the Base Target Amount had been
achieved, and (ii) if such termination occurs after the first anniversary of the
Closing Date, his Pro Rata Share of any additional Key Employee Bonus payable if
actual Net Sales exceed $450 million during the Incentive Period. If Xxxxxx
Xxxxx so elects to voluntarily terminate his employment, each of the other Key
Employees may also elect, within 30 days of Xxxxxx Xxxxx' notice of election to
terminate his employment, to voluntarily terminate his or her employment upon 60
days prior written notice to Xxxx and receive as soon as practicable following
the Determination Date (A) his or her Pro Rata Share as if the Base Target
Amount had been achieved, and (B) if such termination occurs after the first
anniversary of the Closing Date, his or her Pro Rata Share of any additional Key
Employee Bonus payable if actual Net Sales exceed $450 million during the
Incentive Period.
(d) (i) From the date hereof until the end of the
Incentive Period, Xxxx shall cause or permit the Surviving Company to:
(A) maintain its corporate existence in good
standing; and
(B) give the Company Officer discretion, acting
in a commercially reasonable manner, to determine the titles and
responsibilities of the operating officers and employees of the
Company.
(ii) From the date hereof until the end of the
Incentive Period, Xxxx shall not:
(A) require that the Surviving Company add
additional officers of the Surviving Company, provided, however, that
Xxxx may add additional officers to the Surviving Company if the
salaries, benefits and other expenses related to the employment of such
officers is paid directly by Xxxx;
(B) change or require the change of any of the
following unless required by any Law or any judgment, writ, order or
decree of any court, judge, justice or magistrate or any Governmental
Entity: (w) the name of the Surviving Company; (x) the names of any
products of the Surviving Company; (y) the trademarks, trade dress and
logos of the Surviving Company; or (z) the advertising and sponsorships
of the Surviving Company (subject to the budgetary restrictions
contemplated by SECTIONS 1.3(a)(i) and (a)(ii));
(C) take any action which has as its primary
purpose the avoidance of the payment of the Performance Bonus; or
(D) use the Trade Secrets, trademarks, trade
dress or logos of the Surviving Company on any Soy Products sold by
Xxxx or its Affiliates (other than the Surviving Company) that compete
with the products of the Surviving Company or enter into any new
agreements to provide contract packaging or manufacturing services for
Soy Products that compete with the products of the Surviving Company
with any Person that is not an Affiliate of Xxxx (other than the
Surviving Company). "SOY PRODUCTS" shall mean (x) tofu; (y) soy-based
and wheat-gluten based meat substitutes and (z) any of the following
products having soy as their largest percentage component source of
protein: (1) any liquid beverage marketed as a milk substitute and (2)
yogurt.
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SECTION 1.4 DELIVERY OF PERFORMANCE BONUS.
(a) As soon as practicable following expiration of the
Incentive Period, but in no event later than 60 days following expiration of the
Incentive Period, Xxxx shall determine in accordance with the terms herein
whether the Surviving Company has achieved Net Sales in an amount sufficient to
result in payment of all or a portion of the Performance Bonus and whether the
Surviving Company has not exceeded the budgetary restrictions contemplated by
SECTIONS 1.3(a)(i) and (a)(II) by more than $1,000,000 in the aggregate,
excluding the impact of compensation granted under the Shareholder Stock
Compensation Agreement effective as of the date hereof (the date of such
determination shall be referred to as the "DETERMINATION DATE"), and Xxxx shall
deliver to the Key Employee Representative a certificate (the "PERFORMANCE BONUS
CERTIFICATE") executed by Xxxx'x Chief Financial Officer, or such other officer
authorized by Xxxx, setting forth Xxxx'x determination of the amount of
Performance Bonus, if any, payable pursuant to this ARTICLE I. The Performance
Bonus Certificate shall be delivered even if no Performance Bonus is payable.
Within 30 days (the "RESPONSE PERIOD") following the receipt of the Performance
Bonus Certificate, the Key Employee Representative shall notify Xxxx of any
dispute regarding the Performance Bonus Certificate, which notice shall set
forth in reasonable detail the basis for such dispute to the extent such detail
can be specified based on the information set forth in the Performance Bonus
Certificate. If the Key Employee Representative fails to notify Xxxx of any such
dispute during the Response Period, the Performance Bonus Certificate and the
amount of Performance Bonus payable shall be deemed to be accepted by the Key
Employee Representative and Xxxx shall pay the Performance Bonus within three
Business Days after the expiration of the Response Period.
(b) In the event that the Key Employee Representative notifies
Xxxx of a dispute during the Response Period, Xxxx and the Key Employee
Representative shall cooperate in good faith to resolve the dispute as promptly
as possible. If Xxxx and the Key Employee Representative are able to resolve the
dispute within 15 Business Days of the Key Employee Representative's delivery of
the notice of dispute, Xxxx shall deliver within three Business Days after
resolution of the dispute the amount of Performance Bonus agreed to by Xxxx and
the Key Employee Representative. If Xxxx and the Key Employee Representative are
unable to resolve the dispute within 15 Business Days of the Key Employee
Representative's delivery of the notice of dispute, then the dispute will be
submitted to an accounting firm not then retained by Xxxx and acceptable to Xxxx
and the Key Employee Representative (the "INDEPENDENT ACCOUNTING FIRM"). Each of
Xxxx and the Key Employee Representative agrees to execute a reasonable
engagement letter if requested by the Independent Accounting Firm. All fees and
expenses relating to the work, if any, to be performed by the Independent
Accounting Firm shall be borne by the substantially non-prevailing party. Xxxx
shall pay all such fees and expenses, and shall then, in the event that the Key
Employee Representative is the substantially non-prevailing party, reduce the
Performance Bonus by an amount equal to the amount of such fees and expenses. In
the event the Independent Accounting Firm determines that no Performance Bonus
is payable, the Key Employee Representative, on behalf of the Key Employees and
the Discretionary Pool Employees, shall reimburse Xxxx for all such fees and
expenses relating to the work performed by the Independent Accounting Firm. The
Key Employee Representative shall be the substantially non-prevailing party for
purposes of the payment of such fees and expenses if the difference between the
Net Sales set forth in the Performance Bonus Certificate and the amount of Net
Sales determined by the Independent Accounting Firm is less than or equal to one
percent of the amount of Net Sales set forth in the Performance Bonus
Certificate; provided, however, that if such difference does not exceed one
percent and the determination of the Independent Accounting Firm results in a
payment of any amount of Performance Bonus and the Performance Bonus Certificate
indicated no Performance Bonus was payable, then Xxxx shall be deemed the
substantially non-prevailing party. The Independent Accounting Firm shall act as
an arbitrator to determine only those issues still in dispute (provided that any
such determination by the Independent Accounting Firm shall only be for purposes
of this Plan) and shall have access to and be entitled to review
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the underlying records and compilations relating to any such disputed issues.
Xxxx and the Key Employee Representative shall use their commercially reasonable
efforts to cause the Independent Accounting Firm to issue its determination
within 30 days of its engagement. This determination shall be set forth in a
written statement delivered to Xxxx and the Key Employee Representative and
shall be final, binding and conclusive. If the determination indicates that
additional Performance Bonus should be distributed, Xxxx shall make such
distribution within ten Business Days of receipt of the determination. No
downward adjustment in the amount of the Performance Bonus shall be made.
ARTICLE II
APPOINTMENT OF KEY EMPLOYEE REPRESENTATIVE
SECTION 2.1. APPOINTMENT OF KEY EMPLOYEE REPRESENTATIVE.
As of the Effective Date and without any further action by the
Key Employees, Xxxxxx X. Demos will be appointed as agent and attorney-in-fact
(the "KEY EMPLOYEE REPRESENTATIVE") for each Key Employee receiving a portion of
the Key Employee Bonus, for and on behalf of the Key Employee. The Key Employee
Representative shall have full power and authority to represent all of the Key
Employees and their successors with respect to all matters arising under this
Plan and all actions taken by the Key Employee Representative hereunder and
thereunder shall be binding upon all such Key Employees and their successors as
if expressly confirmed and ratified in writing by each of them. The Key Employee
Representative shall take any and all actions which he believes are necessary or
appropriate under this Plan for and on behalf of the Key Employees, as fully as
if the Key Employees were acting on their own behalf, including, without
limitation, conducting negotiations with Xxxx and its agents under this Plan
with respect to all matters arising under this Plan, taking any and all other
actions specified in or contemplated by this Plan, and engaging counsel,
accountants or other representatives in connection with the foregoing matters.
Without limiting the generality of the foregoing, the Key Employee
Representative shall have full power and authority to interpret all the terms
and provisions of this Plan and to consent to any amendment hereof or thereof on
behalf of all such Key Employees and such successors. Upon the death,
resignation or removal of Xxxxxx Xxxxx for any reason as Key Employee
Representative, Xxxxxxxx Xxxxxxx shall become the Key Employee Representative.
SECTION 2.2. INDEMNIFICATION OF KEY EMPLOYEE REPRESENTATIVE.
The Key Employee Representative may act upon any instrument or
other writing believed by the Key Employee Representative in good faith to be
genuine and to be signed or presented by the proper person and shall not be
liable in connection with the performance by him or her of his or her duties
pursuant to the provisions of this Plan, except for his or her own willful
default or gross negligence. The Key Employee Representative shall be, and
hereby is, indemnified and held harmless by the Key Employees from all losses,
costs and expenses (including attorneys' fees) that may be incurred by the Key
Employee Representative as a result of the Key Employee Representative's
performance of his or her duties under this Plan, provided, that the Key
Employee Representative shall not be entitled to indemnification for losses,
costs or expenses that result from any action taken or omitted by the Key
Employee Representative as a result of his willful default or gross negligence
and provided, further, that each Key Employee's obligation to indemnify the Key
Employee Representative under this Plan shall be limited to, and payable only
from, each Key Employee's pro rata portion of the Key Employee Bonus payable to
him or her hereunder. The Key Employee Representative's costs and expenses shall
be paid out of the amount of Key Employee Bonus payable hereunder, to the extent
required by this SECTION 2.2.
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SECTION 2.3. ACCESS TO INFORMATION.
The Key Employee Representative shall have reasonable access
to information of and concerning any dispute with respect to the Performance
Bonus Certificate and which is in the possession, custody or control of the
Company and the reasonable assistance of the Company's officers and employees
for purposes of performing his or her duties under this Plan and exercising his
or her rights under this Plan, including for the purpose of evaluating any
amount set forth in the Performance Bonus Certificate; provided, that, the Key
Employee Representative shall treat confidentially and not disclose any
nonpublic information received by him or her hereunder to anyone (except to the
Key Employee Representative's attorneys, accountants or other advisers, to Key
Employees, to the arbitrators appointed to resolve disputes pursuant to this
Agreement, and, on a need-to-know basis, to other individuals who agree to keep
such information confidential).
SECTION 2.4. REASONABLE RELIANCE.
In the performance of his duties hereunder, the Key Employee
Representative shall be entitled to rely upon any document or instrument
reasonably believed by him to be genuine, accurate as to content and signed by
any Key Employee or Xxxx. The Key Employee Representative may assume that any
person purporting to give any notice in accordance with the provisions hereof
has been duly authorized to do so.
SECTION 2.5. ATTORNEY-IN-FACT.
(i) The Key Employee Representative is hereby appointed and
constituted the true and lawful attorney-in-fact of each Key Employee, with full
power in his or her name and on his or her behalf to act according to the terms
of this Plan in the absolute discretion of the Key Employee Representative; and
in general to do all things and to perform all acts including, without
limitation, executing and delivering any agreements, certificates, receipts,
instructions, notices or instruments contemplated by or deemed advisable in
connection with this Plan.
(ii) This power of attorney and all authority hereby conferred
is granted and shall be irrevocable and shall not be terminated by any act of
any Key Employee, by operation of law, whether by such Key Employee's death,
disability protective supervision or any other event. Without limitation to the
foregoing, this power of attorney is to ensure the performance of a special
obligation and, accordingly, each Key Employee hereby renounces his or her right
to renounce this power of attorney unilaterally any time before the end of the
Incentive Period.
(iii) Each Key Employee hereby waives any and all defenses
that may be available to contest, negate or disaffirm the action of the Key
Employee Representative taken in good faith under this Plan.
(iv) Notwithstanding the power of attorney granted in this
SECTION 2.5, no agreement, instrument, acknowledgement or other act or document
shall be ineffective by reason only of the Key Employees having signed or given
such agreement, instrument, acknowledgement, or other act or document directly
instead of the Key Employee Representative.
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SECTION 2.6. LIABILITY.
If the Key Employee Representative is required by the terms of
this Plan to determine the occurrence of any event or contingency, the Key
Employee Representative shall, in making such determination, be liable to the
Key Employees only for his or her proven bad faith as determined in light of all
the circumstances, including the time and facilities available to him or her in
the ordinary conduct of business. In determining the occurrence of any such
event or contingency, the Key Employee Representative may request from any of
the Key Employees or any other person such reasonable additional evidence as the
Key Employee Representative in his sole discretion may deem necessary to
determine any fact relating to the occurrence of such event or contingency, and
may at any time inquire of and consult with others, including any of the Key
Employees, and the Key Employee Representative shall not be liable to any Key
Employee for any damages resulting from his delay in acting hereunder pending
his receipt and examination of additional evidence requested by him.
SECTION 2.7. ORDERS.
The Key Employee Representative is authorized, in his sole
discretion, to comply with final, nonappealable orders or decisions issued or
process entered by any court of competent jurisdiction or arbitrator with
respect to the Key Employee Bonus. If any portion of the Key Employee Bonus is
disbursed to the Key Employee Representative and is at any time attached,
garnished or levied upon under any court order, or in case the payment,
assignment, transfer, conveyance or delivery of any such property shall be
stayed or enjoined by any court order, or in case any order, judgment or decree
shall be made or entered by any court affecting such property or any part
thereof, then and in any such event, the Key Employee Representative is
authorized, in his sole discretion, but in good faith, to rely upon and comply
with any such order, writ, judgment or decree which he or she is advised by
legal counsel selected by him is binding upon him or her without the need for
appeal or other action; and if the Key Employee Representative complies with any
such order, writ, judgment or decree, he shall not be liable to any Key Employee
or to any other person by reason of such compliance even though such order,
writ, judgment or decree may be subsequently reversed, modified, annulled, set
aside or vacated.
SECTION 2.8. REMOVAL OF KEY EMPLOYEE REPRESENTATIVE; AUTHORITY OF
SUCCESSOR KEY EMPLOYEE REPRESENTATIVE.
Key Employees who in the aggregate hold at least a majority of
the Key Employees' interest in the Key Employee Bonus shall have the right at
any time during the Incentive Period to remove a then-acting Key Employee
Representative and to appoint a successor Key Employee Representative upon such
removal, or upon his or her death, disability or resignation; provided, however,
that neither such removal of such then acting Key Employee Representative nor
such appointment of a successor Key Employee Representative shall be effective
until the delivery to Xxxx of executed counterparts of a writing signed by each
such Key Employee with respect to such removal and appointment, together with an
acknowledgment signed by the successor Key Employee Representative appointed in
such writing that he or she accepts the responsibility of successor Key Employee
Representative and agrees to perform and be bound by all of the provisions of
this Plan applicable to the Key Employee Representative. Each successor Key
Employee Representative shall have all of the power, authority, rights and
privileges conferred by this Plan upon the original Key Employee Representative,
and the term "Key Employee Representative" as used herein shall be deemed to
include any interim or successor Key Employee Representative.
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ARTICLE III
MISCELLANEOUS
SECTION 3.1 DEFINITIONS.
As used herein the terms set forth below shall have the
following meanings:
"CAUSE" means a Key Employee's (i) willful and intentional
material breach of the employment agreement between the Surviving Company and
such Key Employee, (ii) willful and intentional misconduct or gross negligence
in the performance of, or willful neglect of, such Key Employee's duties, which
has caused material injury (monetary or otherwise) to the Surviving Company, or
(iii) conviction of, or plea of nolo contendere to, a felony; provided, however,
that no act or omission shall constitute "Cause" for purposes of this Plan
unless the board of directors or the Chairman of the board of directors of the
Surviving Company provides to the Key Employee (y) written notice clearly and
fully describing the particular acts or omissions which the board of directors
or the Chairman of the board of directors of the Surviving Company reasonably
believes in good faith constitutes "Cause" and (z) an opportunity, within 30
days following his or her receipt of such notice, to meet in person with the
board of directors or the Chairman of the board of directors of the Surviving
Company to explain or defend the alleged acts or omissions relied upon by the
board of directors or the Chairman of the board of directors of the Surviving
Company and, to the extent practicable, to cure such acts or omissions. Further,
no act or omission shall be considered as "willful" or "intentional" if the Key
Employee reasonably believed such acts or omissions were in the best interests
of the Surviving Company.
"CONSTRUCTIVE TERMINATION" shall mean a material change in
position, title or function, a failure to pay, in any material respect, to a Key
Employee the base salary owed to such Key Employee under the terms of the
employment agreement between such Key Employee and the Surviving Company, or a
requirement (other than by Xxxxxx Xxxxx or Xxxxxxxx Xxxxxxx) to relocate outside
of the Boulder, Colorado metropolitan area, or, with respect to Xxxxxx Xxxxx
only, a change in his reporting relationship to a position other than the Chief
Executive Officer of Xxxx.
"INCAPACITY" means, as determined by a physician selected by
the employee with the consent of Xxxx (which consent shall not be unreasonably
withheld), the inability to perform the essential duties of an employee's
position by reason of a physical or mental impairment which is potentially
permanent in character or which can be expected to last for a continuous period
of not less than six months.
"NET SALES" means net sales accounted for consistently with
the Company's past practices and the Operating Plan.
SECTION 3.2 NOTICES
Any notice, request, demand, waiver, consent, approval, or
other communication which is required or permitted to be given to any party
hereunder shall be in writing and shall be deemed given only if delivered to the
party personally or sent to the party by facsimile transmission (promptly
followed by a hard-copy delivered in accordance with this SECTION 3.2) or by
registered or certified mail (return receipt requested), with postage and
registration or certification fees thereon prepaid, addressed to the party at
its address set forth below:
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If to Xxxx:
Xxxx Foods Company
0000 XxXxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
with a copy to (which shall not be deemed notice):
Xxxxx & Xxxxxxx L.L.P.
0000 Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
If to the Company:
White Wave, Inc.
0000 X. 00xx Xx.
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
with a copy to (which shall not be deemed notice):
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
If to the Key Employee Representative:
Xxxxxx Xxxxx
c/o White Wave, Inc.
0000 X. 00xx Xx.
Xxxxxxx, Xxxxxxxx 00000
with a copy to (which shall not be deemed notice):
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
or to such other address or Person as any party may have specified in a notice
duly given to the other party as provided herein. Such notice, request, demand,
waiver, consent, approval or other communication will be deemed to have been
given as of the date so delivered, on the next business day following the date
sent by facsimile and on the third business day after it is mailed.
SECTION 3.3. AMENDMENT.
Any amendment, modification or revision of this Plan and any
waiver of compliance or consent with respect hereto shall be effective only if
in a written instrument executed by the parties hereto.
10
SECTION 3.4. GOVERNING LAW.
This Plan shall be governed by, and this Plan and any disputes
or controversies related hereto shall be construed, interpreted and enforced in
accordance with the laws of the State of Colorado, without regard to the
conflicts-of-law rules thereof that would apply the laws of any other
jurisdiction.
SECTION 3.5. NO BENEFIT TO OTHERS.
The representations, warranties, covenants and agreements
contained in this Plan are for the sole benefit of the parties hereto, the Key
Employees and the Discretionary Pool Employees, and they shall not be construed
as conferring, and are not intended to confer, any rights on any other Person.
SECTION 3.6. SEVERABILITY.
If any term or other provision of this Plan is determined to
be invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Plan shall remain in full force
and effect. Upon such determination, the parties hereto shall negotiate in good
faith to modify this Plan so as to give effect to the original intent of the
parties to the fullest extent permitted by applicable law.
SECTION 3.7. SECTION HEADINGS.
All section headings are for convenience only and shall in no
way modify or restrict any of the terms or provisions hereof.
SECTION 3.8. SCHEDULES AND EXHIBITS.
All Schedules and Exhibits referred to herein are intended to
be and hereby are specifically made a part of this Plan.
SECTION 3.9. EXTENSIONS.
At any time prior to the Effective Time, Xxxx, on the one
hand, and the Company on the other may by corporate action, extend the time for
compliance by or waive performance of any representation, warranty, condition or
obligation of the other party.
SECTION 3.10. COUNTERPARTS.
This Plan may be executed in two or more counterparts, each of
which shall be deemed an original, and the Company and Xxxx may become a party
hereto by executing a counterpart hereof. This Plan and any counterpart so
executed shall be deemed to be one and the same instrument.
REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
11
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
hereby, have duly executed this PERFORMANCE BONUS PLAN as of the date first
above written.
XXXX FOODS COMPANY
By:
-----------------------------------------
Xxxxxxxx X. Xxxxxxx
Executive Vice President, Chief
Administrative Officer and General Counsel
WHITE WAVE, INC.
By:
-----------------------------------------
Xxxxxx X. Demos
President and Chief Executive Officer
KEY EMPLOYEES:
--------------------------------------
Xxxxxx X. Demos
--------------------------------------
Xxxxxxxx Xxxxxxx
--------------------------------------
Xxxxxx Xxxx
--------------------------------------
Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxx
KEY EMPLOYEE REPRESENTATIVE
--------------------------------------
Xxxxxx X. Demos
EXHIBIT A
TO PERFORMANCE BONUS PLAN
DISCRETIONARY INCENTIVE PLAN
(see attached)
SCHEDULE 1.1(a-1)
TO PERFORMANCE BONUS PLAN
PERFORMANCE BONUS
o If combined, cumulative Net Sales during the Incentive Period are below
$382.5 million, no Performance Bonus will be paid.
o If combined, cumulative Net Sales during the Incentive Period are between
$382.5 million and $450 million, the Performance Bonus paid will scale
ratably (meaning $129,630 for each $1,000,000 of Net Sales) between $26.25
million and $35.0 million as set forth in the table below.
o If combined, cumulative Net Sales during the Incentive Period are greater
than $450 million, additional amounts of the Performance Bonus will be paid
as follows and as set forth in the table below:
- First $50 million above $450 million Net Sales: 10% of amount in excess
of $450 million, plus
- Second $50 million above $450 million Net Sales: 15% of amount in excess
of $500 million, plus
- In excess of $550 million: 20% of amount in excess of $550 million
Any Performance Bonus shall be allocated between the Key Employee Bonus and the
Discretionary Bonus as set forth in the table below.(1)
Combined, Aggregate Key Employee Discretionary
Cumulative Performance Bonus Bonus
Net Sales Bonus Allocation(2) Allocation(1,2)
($ in millions) ($ in millions) ($ in millions) ($ in millions)
--------------- --------------- --------------- ---------------
$382.5 $26.250 $17.997 $8.253
$390 $27.222 $18.664 $8.559
$400 $28.519 $19.552 $8.966
$405 $29.167 $19.997 $9.170
$410 $29.815 $20.441 $9.374
$420 $31.111 $21.330 $9.781
$430 $32.407 $22.219 $10.189
$440 $33.704 $23.107 $10.596
$450 $35.000 $23.996 $11.004
$475 $37.500 $25.710 $11.790
$500 $40.000 $27.424 $12.576
$525 $43.750 $29.995 $13.755
$550 $47.500 $32.566 $14.934
$575 $52.500 $35.994 $16.506
$600 $57.500 $39.422 $18.078
$625 $62.500 $42.850 $19.650
----------
(1) The amount funded into the Discretionary Bonus will be reduced by $76,713 to
account for investment banking fees incurred in connection with the
establishment of the Discretionary Incentive Plan and previously paid by
________ and _______________.
(2) Subject to adjustment as provided in Sections 1.1(b) and 1.2(b) herein.
-1-
SCHEDULE 1.1(a-2)
TO
PERFORMANCE BONUS PLAN
KEY EMPLOYEES'
PRO RATA SHARE OF PERFORMANCE BONUS
Key Employee Pro Rata Share
------------ --------------
Xxxxxx Xxxxx 28.57%
Xxxxxxxx Xxxxxxx 17.14%
Xxxxx Xxxxxx 8.57%
Xxxxxx Xxxx 8.57%
Xxxxx Xxxxx 5.71%
-1-
SCHEDULE 1.3
TO
PERFORMANCE BONUS PLAN
The Operating Plan
(see attached)
-2-
