SUPPLEMENTAL EXECUTIVE RETIREMENT AGREEMENT
This Agreement is entered into effective July 1, 2000 by and between
Agrilink Foods, Inc. with offices at 00 Xxxxxx Xxxx, Xxxxxxxxx, Xxx Xxxx 00000
and Xxxxxx X. Xxxxxx residing at 00 Xxxxx Xxxxx Xxxxxxxx, Xxxxxxxxx, Xxx Xxxx
00000.
Preamble
The principal objective of this Agreement is to ensure the payment of a
competitive level of retirement income in order to retain and motivate Xxxxxx X.
Xxxxxx, the current President and Chief Executive Officer of Agrilink Foods,
Inc. This Agreement is effective on July 1, 2000.
SECTION I. DEFINITIONS
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1.1 "Actuarial Equivalent" means, unless otherwise specifically provided
herein, the actuarial equivalent factors for converting the normal form of
annuity to an optional form of annuity, as defined in the Agrilink Foods
Master Salaried Retirement Plan, as from time to time amended.
1.2 "Affiliate" means any corporation, partnership or other organization which,
during any period of employment of a Participant, was at least 50%
controlled by the Company or an affiliate of the Company.
1.3 "Agreement" means this Supplemental Executive Retirement Agreement,
effective July 1, 2000 between the Participant and the Company.
1.4 "Committee" means the Executive Committee of the Board of Directors of the
Company, which has been given authority by the Board of Directors
to administer this Agreement.
1.5 "Company" means Agrilink Foods, Inc.
1.6 "Participant" means Xxxxxx X. Xxxxxx.
1.7 "Retirement" means the termination of a Participant's employment with the
Company on one of the retirement dates specified in Section 2.1.
1.8 "Surviving Spouse" means Xxxxxxxxx Xxxxxx.
1.9 The masculine gender, where appearing in the Agreement, will be deemed to
include the feminine gender, and the singular may include the plural,
unless the context clearly indicates the contrary.
SECTION II. ELIGIBILITY FOR BENEFITS
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2.1 The Participant is eligible to retire under this Agreement and receive a
benefit under Section 3.1 of this Agreement beginning on either: (a) his
"Normal Retirement Date", which is January 1, 2009, the first day of the
month following the month in which the Participant reaches age 55, or (b)
his "Postponed Retirement Date," which is the first day of the month
following the Participant's Normal Retirement Date in which the Participant
terminates employment with the Company.
2.2 Anything herein to the contrary notwithstanding, if when the Participant is
receiving, or may be entitled to receive, a benefit hereunder, the
Participant engages in Competition with the Company (without prior
authorization given by the Committee in writing), or is discharged by the
Company for Cause, payments thereafter payable hereunder to the Participant
or the Surviving Spouse will, at the discretion of the Committee, be
forfeited and the Company will have no further obligation hereunder to the
Participant or the Surviving Spouse. For purposes of this Section 2.2, the
term "Cause" shall mean (a) the conviction of the Participant by a court of
competent jurisdiction of a crime which constitutes a felony under any
state or federal law, or (b) an act by the Participant which in the opinion
of the Board of Directors of the Company constitutes a theft of the
Company's property, or (c) the willful and continued failure or refusal of
the Participant to perform his duties, or (d) gross negligence or willful
misconduct on the part of the Participant that is materially and
demonstrably detrimental to the Company (such finding having been initially
made by the Board of Directors of the Company). For purposes of this
Section 2.2, "Competition with the Company" shall occur if, before or after
termination of employment, the Participant directly or indirectly comes to
own, manage, operate, control, be employed by or participate in the
ownership, management, operation or control of, or be connected in any
other manner with, any business which, in the judgment of the Board of
Directors of the Company, is in substantial competition with the Company
(unless the Participant has first obtained the Board's prior written
consent).
SECTION III. AMOUNT AND FORM OF RETIREMENT BENEFIT
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3.1 The monthly retirement benefit payable to the Participant at his Normal
Retirement Date or Postponed Retirement Date under the Agreement will be
equal to $41,666.67. The monthly benefit shall continue for the life of the
Participant and shall be payable on the first day of each calendar month
beginning with the Participant's Normal Retirement Date or Postponed
Retirement Date, as applicable, through and including the month of the
Participant's death, subject to the provisions of this Agreement.
3.2 The monthly benefit of $41,666.67 shall continue for one hundred twenty
(120) payments unless forfeited pursuant to Section 2.2 or accelerated in
accordance with either Section 3.3 or Section 7.1 of the Agreement. If the
Participant dies on or after his Normal Retirement Date before receiving at
least 120 monthly benefit payments, the monthly annuity otherwise payable
to the Participant will be paid to the Surviving Spouse for the remainder
of such one hundred twenty (120) payments and thereafter the Surviving
Spouse shall receive the benefit set forth in Section 5.1; provided,
however, that if the Surviving Spouse shall also die before the number of
payments received by the Participant and Surviving Spouse equals at least
120 monthly payments, then the remainder of the 120 payments shall be made
to the surviving children of the Participant, with such payments to be
divided equally among such surviving children, per capita. The payments to
the Surviving Spouse and/or the Participant's children hereunder shall be
subject to proration in accordance with Section 4.2 if the Participant's
employment with the Company terminated involuntarily on account of death or
disability before the
Participant's Normal Retirement Date and such payments shall commence in
accordance with Section 4.3.
3.3 At any time after the Participant's Normal Retirement Date or Postponed
Retirement Date, the Committee may, in its sole discretion, elect to
convert the monthly benefit into a single sum benefit which shall be paid
to the Participant (or the Participant's beneficiary(ies) if he is not then
living) on the next payment date determined under Section 3.1. For purposes
of converting such monthly benefit into a single sum benefit, the single
sum benefit shall equal the Actuarial Equivalent of the Participant's
monthly benefit (with the form of benefit including a 50% survivor annuity
with 10 years certain) on the basis of the mortality tables used in the
Agrilink Foods Master Salaried Retirement Plan for converting the normal
form of annuity to an optional form of annuity, and on the basis of an
interest rate equal to the average borrowing rate of the Company then in
effect, on its revolving credit facility and long term debt facilities
(including any subordinated debt or like facilities), at the time the
conversion is determined.
SECTION IV. PAYMENT OF RETIREMENT BENEFITS
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4.1 No benefits are payable under this Agreement if the Participant is
discharged for Cause (as defined in Section 2.2) or engages in Competition
with the Company (as defined in Section 2.2) or if the Participant
voluntarily terminates his employment with the Company prior to the
Participant's Normal Retirement Date.
4.2 In the event of the Participant's involuntary termination of employment
(other than for Cause) prior to the Participant's Normal Retirement Date,
the benefit payable to the Participant shall be pro-rated by multiplying
the benefit set forth in Section 3.1 by the ratio of the number of full
months of service with the Company that the Participant attained from the
July 1, 2000 effective date of this Agreement through his date of
termination of employment over 102.
4.3 In the event of involuntary termination pursuant to Section 4.2, any
benefits otherwise payable under this Agreement shall commence on January
1, 2009.
SECTION V. DEATH BENEFITS PAYABLE
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5.1 Subject to the provisions of Section 3.2, if the Participant dies after his
Normal Retirement Date, the Surviving Spouse will receive a benefit equal
to $20,833.34 payable in accordance with Section 5.3. Such benefit shall
commence after the guaranteed payments under Section 3.2 are completed if
the Surviving Spouse is then living.
5.2 Subject to the provisions of Section 3.2 and Section 4.2, if the
Participant dies before attaining his Normal Retirement Date, the Surviving
Spouse will receive a benefit equal to $20,833.34 (prorated pursuant to
Section 4.2) payable in accordance with Section 5.3. Such benefit shall
commence after the guaranteed payments under Section 3.2 are completed if
the Surviving Spouse is then living.
5.3 The Surviving Spouse's benefit will be payable monthly on the first day of
each month during the life of the Surviving Spouse, commencing on the first
day of the month following the month in which the Participant dies;
provided, however, that in the event of the Participant's death before
attaining his Normal Retirement Date, the Surviving Spouse's benefit will
commence on January 1, 2009.
5.4 Subject to the provisions of Section 3.2, upon the death of the Surviving
Spouse, no further payments will be made under this Agreement.
5.5 If the Participant is not survived by the Surviving Spouse, then the
provisions of Section 3.2 shall apply.
SECTION VI. DISABILITY BENEFITS PAYABLE
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6.1 In the event the Committee determines that the Participant has become
permanently and totally disabled (other than at a time when facts and
circumstances exist under which the Company could terminate the
Participant's employment for Cause), the Participant shall be entitled to
the benefits under Section 3.1 (prorated pursuant to Section 4.2)
commencing at the Participant's Normal Retirement Date.
6.2 In the event of the death of the Participant after a disability is
determined, death benefits will be paid in accordance with Sections 3.2,
5.1 and/or 5.2 as applicable.
6.3 The Committee may require, no more frequently than once in any calendar
year, that a disabled Participant submits medical evidence of disability
satisfactory to the Committee. The Committee will have sole discretion to
discontinue eligibility for a disability benefit based on a consideration
of such evidence or lack thereof.
SECTION VII. CHANGE OF CONTROL
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7.1 (a) In the event of a Change of Control of the Company, as defined below,
the benefits under Section 3 shall become fully vested and shall be paid
immediately to the Participant in the form of a single sum as determined in
Section 3.3.
(b) In the event it shall be determined that any payment or distribution by
the Company (a "Payment") to or for the benefit of the Participant (whether
paid or payable or distributed or distributable pursuant to the terms of
this Agreement or otherwise, but determined without regard to any
additional payments (as defined below) required under this Section 7.1)
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986, as amended (including any successor to such statute
of like import), or any interest or penalties are incurred by the
Participant with respect to such excise tax ( such excise tax, together
with any such interest and penalties, are hereinafter collectively referred
to as the "Excise Tax"), the Company shall make an additional payment (a
"Gross-up Payment") to the Participant in an amount such that
after payment by the Participant of the Excise Tax and all taxes (including
additional Excise Tax, income taxes, and any interest and penalties imposed
with respect to income taxes, all as imposed on the Gross-up Payment), the
Participant retains an amount equal to the Gross Up Payment.
(c) For purposes of this Section 7.1, the proper amounts, if any, of the
Excise Tax and the Gross-up Payment shall be determined in the first
instance by the Company. Within 45 days of being provided with written
notice of any such determination, the Participant may provide written
notice to the Chairman of the Committee of any disagreement, in which event
the amounts, if any, of the Excise Tax and Gross-up Payment shall be
determined by independent tax counsel selected by the Company's independent
auditors. The determination of the Company (or, in the event of
disagreement, the tax counsel selected) shall be final; provided, however,
(i) that the Company shall provide the Participant with such further
Gross-up Payment as may be necessary to hold him harmless from the Excise
Tax if the Participant notifies the Chairman of the Committee of any
proposed audit adjustment by the Internal Revenue Service to the amount of
the Excise Tax, and fully cooperates with the Company in contesting the
proposed adjustment, but is ultimately required to pay an additional Excise
Tax amount; and (ii) that in no event shall the Excise Tax for which the
Company is required to make a Gross-up Payment include any interest or
penalties resulting from the failure of the Participant to report and pay
by the time prescribed by law an amount of Excise Tax at least equal to
that determined by the Company (or, if relevant, tax counsel) as the basis
for prior Gross-up Payment(s) made to the Participant.
7.2 For purposes of this Section 7, a Change of Control shall be deemed to have
occurred if (i) anyone other than Pro-Fac Cooperative, Inc. or any of its
affiliates, including a "group" (as defined in Section 13(d)(3) of the
Securities and Exchange Act of 1934 (the "1934 Act") becomes the
"beneficial owner" (within the meaning of Section 13(d)(3) under the 0000
Xxx) of a majority of the common stock of the Company; or (ii) the Company
is a party to a merger, consolidation, or other business combination in
which it is not the surviving corporation, or sells or transfers all or a
major portion of its assets to any other person (any of the foregoing
constituting a "Business Combination"); or (iii) as a result of, or in
connection with, any cash tender or exchange offer, purchase of stock,
Business Combination, or contested election, or any combination of the
foregoing transactions (a "Transaction"), the persons who were directors of
the Company before the Transaction shall cease to constitute a majority of
the Board of Directors of the Company or any Successor Corporation.
"Successor Corporation" means the surviving, resulting or transferee
corporation in a Business Combination, or if such corporation is a direct
or indirect subsidiary of another corporation, the parent corporation of
such surviving, resulting or transferee corporation.
SECTION VIII. MISCELLANEOUS
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8.1 The Committee may, in its sole discretion, terminate, suspend or amend this
Agreement at any time or from time to time, in whole or in part; provided,
however, that no
termination, suspension, or amendment of the Agreement will, without the
written consent of the Participant or the Surviving Spouse (if the
Participant is not then living), reduce the Participant's right or the
right of the Surviving Spouse to receive or continue receiving a benefit in
accordance with this Agreement. The provisions of this Section 8.1 shall be
subordinate to the provisions of Section 2.2 concerning the forfeiture of
benefits.
8.2 Nothing contained herein will confer upon the Participant the right to be
retained in the service of the Company, nor will it interfere with the
right of the Company to discharge or otherwise deal with the Participant
without regard to the existence of this Agreement.
8.3 The benefits under this Agreement are unfunded, and the Company will make
benefit payments solely on a current disbursement basis. Notwithstanding
anything herein to the contrary, the Participant, Surviving Spouse, and any
beneficiaries of the Participant shall have the status of general creditors
of the Company.
8.4 To the maximum extent permitted by law, no benefit under this Agreement
shall be assignable or subject in any manner to alienation, sale, transfer,
claims of creditors, pledge, attachment or encumbrances of any kind.
8.5 The Committee may adopt rules and regulations to assist it in the
administration of the Agreement.
8.6 The Participant shall receive a copy of this Agreement and the Committee
will make available for inspection by any Participant a copy of the rules
and regulations used by the Committee in administering the Agreement.
8.7 This Agreement is established under and will be construed according to the
laws of the State of New York, without regard for principles of conflicts
of law.
8.8 The Company shall pay, upon request and documentation thereof, all
reasonable legal fees and expenses which the Participant may incur as a
result of the Company or any of its subsidiaries contesting the validity or
enforceability of any provision of this Agreement or any claim by the
Participant under this Agreement; provided, however, that the Company shall
be entitled to be reimbursed by the Participant for such amount previously
paid to such Participant if it is finally judicially determined that such
Participant's claims under this Agreement are frivolous.
8.9 In the event of any dispute after the occurrence of Change of Control (as
defined in Section 7.2) between the Company and any Participant with
respect to the Participant's rights to any payment under this Agreement,
the Company shall pay all disputed amounts to the Participant and, if it is
finally judicially determined that the Participant was not entitled to all
or a portion of such disputed amounts, the Participant shall repay to the
Company the amount to which the Participant was not entitled, together with
interest thereon at the interest rate determined in accordance with Section
3.3.
IN WITNESS WHEREOF, the parties have caused this instrument to
be executed this 23rd day of August, 2000.
AGRILINK FOODS, INC.
By:/s/ Xxxxx Xxx
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