TREEHOUSE FOODS, INC. Form of Performance-Vesting Restricted Stock Award Agreement
EXHIBIT
10.1
Form
of
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TO:
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DATE:
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In
order
to provide additional incentive through stock ownership for certain officers,
key employees and non-employee directors of TreeHouse Foods, Inc. (the
“Company”) and its subsidiaries, you are hereby granted performance-vesting
restricted stock by the Company, effective as of the date hereof (the “date of
grant”). This restricted stock award is issued under the TreeHouse Foods, Inc.
2005 Long-Term Stock Incentive Plan (the “Plan”), the terms of which are
incorporated herein by reference. All capitalized terms used but not defined
herein shall have the meaning ascribed to such terms in the Plan.
RESTRICTED
STOCK
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Total
number of shares granted
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[______]
(“Shares”)
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VESTING
SCHEDULE
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Grant
date
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Vesting
schedule
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The
Shares will vest if the total shareholder return (“TSR”) objectives
described in the attached terms sheet are met, or a Change in Control
occurs, on or before __________,
20__.
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TRANSFER
RESTRICTIONS; ISSUANCE OF SHARES
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Restrictions
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Until
vested, the Shares may not be sold, transferred, pledged, assigned
or
otherwise alienated or hypothecated.
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Book
Entry
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The
Company’s stock transfer agent will establish a book entry account
representing the Shares in your name, effective as of the date
of grant.
The Company will retain control of the book entry account until
the Shares
are vested.
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This
Performance-Vesting Restricted Stock Award Agreement, including the accompanying
Terms of the ________ 20__ Performance-Vesting Restricted Stock Awards,
constitutes part of a prospectus covering securities that have been registered
under the Securities Act of 1933, as amended.
Terms
of the ___________ 20__ Performance-Vesting Restricted
Stock
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Type(s)
of Award:
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Performance-vesting
restricted stock (“Shares”).
Until
vested, the Shares may not be sold, transferred, pledged, assigned
or
otherwise allocated or hypothecated. Upon vesting, the Shares
will be
freely transferable.
The
number of Shares represented by this Award will be adjusted by
the
Committee in the event of a change in capitalization or other
event
described in Section 4(d) of the Plan.
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Vesting:
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Subject
to earlier termination, cancellation and forfeiture as set forth
below,
the Shares will vest upon achievement of TSR objectives determined
in
accordance with Schedules A hereto or a Change in Control, in
either case,
on or prior to __________, 20__.
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Effect
of Termination of Employment:
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Except
as provided below for termination due to death or disability,
or
involuntary termination by the Company, no vesting will occur
after
termination of employment, in which case all unvested Shares
will be
forfeited and/or cancelled.
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·
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In
the event of termination of employment due to death or permanent
disability, the unvested Shares will continue to vest as if such
termination of employment did not occur.
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·
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In
the event of involuntary termination of employment by the Company
other
than for Cause or resignation for Good Reason at a time when
▇▇▇ ▇▇▇▇ is
not acting as the CEO of the Company, the unvested Shares will
continue to
vest as if such termination of employment did not
occur.
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·
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In
the event of involuntary termination of employment by the Company
other
than for Cause or resignation for Good Reason while ▇▇▇ ▇▇▇▇
is acting as
CEO of the Company, the following additional portion of the Shares
will
continue to vest on the same basis as would have applied had
employment
not terminated: (x) any
portion of the Shares that had not become vested as of the termination
date solely because the performance criteria applicable thereto
had not
yet been satisfied (i.e.,
any portion thereof as to which the applicable [date] has passed
before
the date Executive’s employment terminated), (y) the
portion of each such award that could become vested on the next
following
anniversary of the date on which it was granted had Executive
continued to
have been employed and (z) the
portion of each such
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award,
if any, that could become vested on the second following
anniversary of
the grant date of such award had Executive continued to have
been
employed, multiplied by a proration fraction. The proration
fraction shall
be the fraction the numerator of which is the number of days
employed
since the last anniversary of such grant date through (and
including) the
termination date and the denominator of which is 365.
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For
purposes of the foregoing, “Cause” and “Good Reason” shall have the
meanings set forth in the Company’s Executive Severance Plan as in effect
on the date of grant.
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Release
of Shares:
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Subject
to applicable tax withholding (see below), the Shares will become
freely
transferable upon vesting.
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Federal
Income Tax Considerations:
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The
following discussion is a summary of certain current U.S. federal
income
tax consequences relating to the restricted stock award. This
discussion
does not purport to be complete, and does not cover, among other
things,
foreign, state and local tax treatment.
No
income is recognized upon receipt of the award of Shares. Upon
vesting of
the Shares, net income equal to the fair market value of Shares
is
recognized. However, if you make a Code Section 83(b) election within
30 days of the grant of the Shares, you will recognize ordinary
income
equal to the fair market value of the Shares at the date of the
grant. The
capital gain or loss holding period for the Shares will begin
when
ordinary income is recognized, and any subsequent capital gain
or loss
will be measured by the difference between the ordinary income
recognized
and the amount received upon sale or exchange of the shares.
Payroll
taxes (Social Security and Medicare taxes) will be due upon vesting
of the
Shares, or earlier if an 83(b) election is made, based upon the
fair
market value of the Shares at that time.
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Tax
Withholding:
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Upon
vesting, the Company will deduct and withheld from Shares to
be delivered,
such aggregate number of Shares having a fair market value equal
to the
amount sufficient to satisfy the minimum statutory Federal, state
and
local tax (including any Social Security and Medicare tax obligation
to
the extent such Shares were not previously subjected to such
taxes)
withholding required by law with respect to the Shares. The Committee
may
permit the remittance of cash or for other arrangements for payment
of
such taxes. If you file an 83(b) election, you will be required
to remit
cash to the Company to satisfy applicable withholding taxes.
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2
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Shareholder
Rights:
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You
are deemed to be the owner of the Shares for purposes of exercising
voting
rights and receiving any cash dividends paid or made available
on the
Shares; stock dividends will become part of the Shares subject
to the
vesting and forfeiture provisions discussed above.
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Please
sign the copy of this Performance-Vesting Restricted Stock Award Agreement
and
return it to the Company in care of its Secretary, thereby indicating your
understanding of and agreement with the terms and conditions of this Agreement.
Unless signed and returned by mail or otherwise within thirty (30) days
from the date of mailing or delivery to you of this Agreement, this Award
will
be deemed refused and withdrawn. By signing this Agreement, you acknowledge
receipt of a copy of the Plan. The terms of the Plan shall have precedence
over
any terms in this Agreement that are inconsistent therewith.
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Acknowledged
and agreed:
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By:
__________________________________
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______________________________________
Date:
________________________________
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3
Schedule
A to Performance-Vesting Restricted Stock Award
On
___________, 20__, all of the Shares shall vest, provided that the Company’s
Total Shareholder Return for the period commencing on June 27, 2006, the
first day of regular way trading for the Company’s common stock (the
“Commencement
Date”),
and
ending on such _______________ equals or exceeds the median of the Total
Shareholder Return for such period for the companies in the Selected Peer
Group
(as defined below).
In
addition, on each of ___________, 20__ and ___________, 20__, the Shares
that
could have vested, but that did not vest, on the preceding ___________ shall
vest on such subsequent date if the Company’s Total Shareholder Return for the
period from the Commencement Date through the applicable ___________ shall
equal
or exceed the median of the Total Shareholder Return for such period for
the
companies in the Selected Peer Group.
As
used
herein, “Total
Shareholder Return”
shall
mean the percentage return received by all shareholders of the relevant company
during the applicable measurement period, including stock price appreciation
and
dividends, and shall be calculated as follows:
Ending
Stock Price(1)
-
Beginning Stock Price (2)
+
Dividend Reinvestment (3)
Beginning
Stock Price (2)
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(1)
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With
respect to each of the Company and each company in the Selected
Peer
Group, the average of the closing prices of its common stock for
the
20 consecutive trading
day period ending on the applicable __________ (or if the applicable
__________ is not a trading date, the immediately preceding trading
date).
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(2)
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With
respect to each of the Company and each company in the Selected
Peer
Group, the closing price of its common stock on the Commencement
Date.
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(3)
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Assumes
any dividends paid on the common stock of the Company or any company
in
the Selected Peer Group are used to purchase its common stock at
the
closing stock price on the date that such dividends are payable,
and
includes the value of such additional shares of such common stock
(based
on the Ending Stock Price for such common
stock).
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As
used
herein, “Selected
Peer Group”
shall
mean the 20 or more companies selected by the Board of Directors of the Company
(or any authorized committee thereof) from among packaged food companies
whose
securities are registered to trade on a U.S. national securities exchange
or
automated quotation system (including, but not limited to NASDAQ) (the
“Peer
Companies”);
provided that in no event shall any Ineligible Company be selected to be
a
member of the Selected Peer Group. An “Ineligible
Company”
shall
mean any Peer Company (i)
in
which significant portion of its voting securities is held by another corporate
entity (other than an open-ended investment company); (ii)
has
filed for protection under the Federal bankruptcy law or any similar law,
(iii)
which
is not organized, based and majority-owned in the
▇-▇
▇▇▇▇▇▇
▇▇▇▇▇▇, (iv)
is
party to any agreement the consummation of which would cause such Peer Company
to cease to be publicly traded (or be described in subclause (i) or (iii)),
or
(v)
which
has announced an intention to be sold or cease to be publicly traded or to
take
actions which would cause it to be described in subclause (i) or (iii). To
the
extent that any Peer Company initially selected as part of the Selected Peer
Group with respect to a measurement period shall become an Ineligible Company
prior to the end of such period, such company shall be excluded from the
Selected Peer Group for such period. The Selected Peer Group will be reviewed
annually to determine whether any of its members shall have become Ineligible
Companies. As of ___________, 20__, the Selected Peer Group is comprised
of the
following Peer Companies:
A-2