TREEHOUSE FOODS, INC. Performance-Vesting Restricted Stock Award Agreement
EXHIBIT 10.2
TO:
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ | |
DATE:
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January 30, 2007 |
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
| Total number of shares granted | 12,000 (“Shares”) | |||
| VESTING SCHEDULE | ||||
| Grant date | January 30, 2007 | |||
| Vesting schedule | The Shares will vest if the total shareholder return (“TSR”) objectives described in the attached terms are met, or a Change in Control occurs, on or before January 31, 2010. | |||
| TRANSFER RESTRICTIONS; ISSUANCE OF SHARES | ||||
| Restrictions | Until vested, the Shares may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated. | |||
| Book Entry | 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. | |||
This Performance-Vesting Restricted Stock Award Agreement, including the accompanying Terms of the
January 2007 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 January 2007 Performance-Vesting Restricted Stock
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. | |
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 January 31, 2010. | |
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. | |
• 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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• 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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• 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 January 31 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 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. | ||
Release of Shares:
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Subject to applicable tax withholding (see below), the Shares will become freely transferable upon vesting. | |
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. | ||
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. |
2
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. |
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.
TREEHOUSE
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FOODS, INC. | Acknowledged and agreed: | ||||||
By:
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/▇▇▇ ▇. ▇▇▇▇/
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/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇/
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| Date: 2/1/07 |
3
Schedule A to Performance-Vesting Restricted Stock Award
On January 31, 2008, all of the Shares shall vest, provided that the Company’s Total Shareholder
Return for the period commencing on June 27, 2005, the first day of regular way trading for the
Company’s common stock (the “Commencement Date”), and ending on such January
31st 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 January 31, 2009 and January 31, 2010, the Shares that could have vested,
but that did not vest, on the preceding January 31st shall vest on such subsequent date
if the Company’s Total Shareholder Return for the period from the Commencement Date through the
applicable January 31st 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)
| (1) | 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 January 31st (or if the applicable January 31 is not a trading date, the immediately preceding trading date). | ||
| (2) | 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. | ||
| (3) | 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). |
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
United States, (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
January 30, 2007, the Selected Peer Group is comprised of the following Peer Companies:
A-1
Kraft Foods, Inc.
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▇▇▇▇ ▇▇▇ Corp. | |
General Mils, Inc.
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▇▇▇▇▇▇▇ Co. | |
ConAgra Foods Inc.
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Midland Co. | |
▇.▇. ▇▇▇▇▇ Company
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▇▇▇▇▇▇▇▇ Soup Co. | |
▇▇▇▇▇▇▇▇▇ & Co Inc.
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The ▇▇ ▇▇▇▇▇▇▇ Co. | |
Del Monte Foods Co.
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Corn Products Int’l | |
Lancaster Colony Corp
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Flower Foods Inc. | |
Ralcorp Holdings Inc.
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The Hain Celestial Group, Inc. | |
▇▇▇▇▇, Inc.
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J&J Snack Foods Corp | |
B&G Foods Inc.
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American Italian Pasta Co. | |
▇▇▇▇▇▇ Bros, Inc.
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Peet’s Coffee and Tea |
A-2