EXHIBIT 10.1
SEVERANCE AGREEMENT
AND RELEASE OF ALL CLAIMS
          This Severance Agreement and Release of All Claims (“Agreement”) is
made and entered into by and between Todd R. Lachman (“Executive”) and Del Monte
Corporation (the “Company”) (together, the “Parties”).
R E C I T A L S
          WHEREAS, Executive is employed by the Company as its Executive Vice
President, Del Monte Foods, pursuant to the terms of an Employment Agreement
between Executive and the Company dated September 1, 2004 (“Employment
Agreement,” capitalized terms used herein and not otherwise defined shall have
the respective meanings assigned in the Employment Agreement); and
          WHEREAS, Executive is resigning his employment for Good Reason in
accordance with the terms set forth in Paragraph 4(f) of the Employment
Agreement and as modified by the terms and conditions set forth herein; and
          WHEREAS, Executive and the Company desire to terminate their
employment relationship amicably and to resolve, fully and finally, all matters
relating to such termination and employment relationship prior to Executive’s
departure from the Company.
          NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants, agreements and promises set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Parties intending to be legally bound, hereby agree as
follows:
A G R E E M E N T
     1. EXECUTIVE’S RESIGNATION. Pursuant to this Agreement, Executive shall
resign and be terminated from each and every position Executive holds as an
officer and employee of the Company and its affiliates effective June 19, 2006
(the “Termination Date”). As of the Termination Date, the Company shall pay
Executive all amounts required by Section 4(e)(i) of the Employment Agreement,
including any earned, but unpaid Base Salary, accrued but unused vacation and
floating holiday time, and unreimbursed expenses described in Section 2(f) of
the Employment Agreement, and benefits, if any Executive is entitled to receive
under the benefit plans of the Company in which Executive was an eligible
participant, less all applicable federal, state or local taxes and other normal
payroll deductions.
     2. SEVERANCE BENEFITS. In consideration of Executive’s release of claims
and Executive’s other covenants and agreements contained herein, after the later
to occur of (i)
/s/ TRL          

Executive’s Initials

 

--------------------------------------------------------------------------------

 

the Termination Date or (ii) the date Executive signs this Agreement and
delivers it to the Company, provided that Executive has not exercised any
revocation rights as set forth in Paragraph 6(b) below, the Company shall pay
Executive, as severance benefits, the amounts, and provide Executive with the
health and welfare benefits and Company perquisites described below
(collectively, the “Severance Benefits”):
          a. Base Salary and Target Bonus Lump Sum Payment. Six (6) months and
one (1) day following the Termination Date, the Company shall pay Executive an
amount equal to one and one-half (1-1/2) times Executive’s Base Salary and
target Bonus for Fiscal Year 2007 as a single lump sum ($1,127,100.00), less all
applicable federal, state or local taxes and other normal payroll deductions,
including the health and welfare premiums described in Paragraph 2(e) below.
          b. FY 2007 Pro-rated Bonus Payment. If Annual Incentive Plan bonus
payments are made by the Company at the end of the fiscal year in which
Executive’s termination of employment occurs, the Company shall pay Executive a
pro-rata portion of Executive’s Fiscal Year 2007 Annual Incentive Plan target
bonus ($51,567.00), less all applicable federal, state or local taxes and other
normal payroll deductions, as described in Paragraph 4(e)(ii)(B) of the
Employment Agreement.
          c. Health and Welfare Benefit Continuation. The Company shall continue
Executive’s participation in the Company’s health and welfare benefit plans
(except for disability plans), at an equivalent level of participation as
Executive had during the twelve (12) month-period prior to Executive’s
Termination Date, until the earlier of (i) eighteen (18) months after the
Executive’s Termination date, or (ii) such time as Executive is covered by
comparable benefit plans or programs of a subsequent employer (“Benefit
Termination Date”). Executive shall immediately notify the Company of his
benefit coverage by a subsequent employer within sixty (60) days after the
initiation of such coverage. After the expiration of Executive’s benefit
coverage with the Company, Executive will be provided information and forms to
elect COBRA (Consolidated Omnibus Budget Reconciliation Act of 1985)
continuation coverage under the Company medical, vision and dental plans in
which Executive participates. Executive’s employee contribution to the monthly
cost of his health and welfare benefits (based on Executive’s current health and
welfare elections) shall be aggregated for the 18 month period following the
Termination Date and shall be deducted from Executive’s Base Salary and Target
Bonus Lump Sum Payment described in Paragraph 2(a) above. If the Benefit
Termination Date is less than 18 months after Executive’s Termination Date, the
interval between the Benefit Termination Date and 18 months following
Executive’s Termination Date shall be referred to as the “Benefit Refund
Period.” As soon as practical after the Benefit Termination Date, the Company
shall pay to Executive all moneys deducted from Executive’s Base Salary and
Target Bonus Lump Sum Payment to cover the Executive’s
/s/ TRL          

Executive’s Initials

2

--------------------------------------------------------------------------------

 

cost for any health and welfare coverage that the Company would have provided to
Executive during the Benefit Refund Period had the Benefit Termination Date not
preceded the date 18 months following Executive’s Termination Date..
          d. Executive Perquisite Plan Continuation. Six (6) months and one
(1) day following the Termination Date, the Company shall pay Executive an
amount equal to six (6) month’s participation in the Company’s Executive
Perquisite Plan at the level Executive participated in as of the Termination
Date ($18,000.00), less all applicable federal, state or local taxes and other
normal payroll deductions. Thereafter, Executive shall continue to participate
in the Company’s Executive Perquisite Plan until the earlier of (i) the
expiration of twelve (12) months, or (ii) such time as Executive is covered by a
comparable perquisite plan of a subsequent employer.
          e. Pro-rated Vesting of Stock and Stock Option Awards. Executive shall
vest in any stock or stock option grants awarded by the Company to Executive
pursuant to the Del Monte Foods Company 2002 Stock Incentive Plan, or any
predecessor plan, on a pro-rated basis, as determined by the Company in the
schedule of vested stock and stock option awards provided to Executive on June
19, 2006, as of Executive’s Termination Date; provided, however, Executive shall
not be entitled to take ownership or otherwise receive settlement of his
pro-rated stock award(s) until the end of the performance period associated with
that stock award; provided further that, Executive shall not be entitled to
exercise, take ownership or otherwise receive settlement of his pro-rated stock
option award(s) until the scheduled vest date associated with that tranche of
the stock option award(s); provided further that, upon vesting of Executive’s
pro-rated stock option award(s), Executive shall have ninety (90) days from that
vesting date to exercise such stock options. The value of any pro-rated stock
option award shall be based on the exercise price and the fair market value at
the time of exercise.
          f. Outplacement. The Company shall provide Executive with not less
than eighteen (18) months of executive-level outplacement services at the
Company’s expense; provided however, the expense for such outplacement services
in any calendar year shall not exceed eighteen percent (18%) of the amount equal
to Executive’s highest Base Salary during the twelve (12) month period prior to
the Termination Date and the target Bonus for the year in which termination
occurs.
     3. STOCK OPTIONS / RESTRICTED STOCK. Except as set forth in Paragraph 2(e)
above, any vested or unvested stock options or restricted stock grants awarded
to Executive pursuant to the Company stock incentive plan shall be subject to
the terms and conditions of the applicable stock option plans and stock or stock
option agreements.
/s/ TRL          

Executive’s Initials

3

--------------------------------------------------------------------------------

 

     4. RETIREMENT, SAVINGS, DEFERRED COMPENSATION. Effective as of Executive’s
Termination Date, Executive shall cease to participate in any Company sponsored
retirement plans. Any distribution of benefits to Executive pursuant to his
participation in any retirement, pension, savings, or deferred compensation plan
sponsored by the Company shall be subject to the terms and conditions of the
applicable plans; provided that, distribution of any non-qualified deferred
compensation plan benefits to Executive shall be delayed six (6) months and one
(1) day following the Termination Date, if necessary, to comply with IRS Code
Section 409A.
     5. RELEASE AND WAIVER.
          a. In consideration of the Severance Benefits paid to Executive
pursuant to Paragraph 2 above, Executive hereby forever releases and discharges
the Company and its predecessors, affiliates, subsidiaries, successors and
assigns, as well as each of their respective past and present officers,
directors, employees, agents, insurance companies, attorneys and stockholders
(collectively, the “Released Parties”), from any and all claims, charges,
complaints, liens, demands, causes of action, obligations, damages and
liabilities, known or unknown, suspected or unsuspected, that Executive had, now
has or may hereafter claim to have against the Released Parties arising out of
or relating in any way to Executive’s hiring by, employment with or separation
from the Company or otherwise relating to any of the Released Parties from the
beginning of time to the later to occur of (i) the Termination Date, and
(ii) the date Executive signs this Agreement.
          b. This Release specifically extends to, without limitation, claims or
causes of action for wrongful termination, impairment of ability to compete in
an open market, breach of an express or implied contract, breach of any
collective bargaining agreement, breach of the covenant of good faith and fair
dealing, breach of fiduciary duty, fraud, misrepresentation, defamation,
slander, infliction of emotional distress, disability, loss of future earnings,
and any claims under the California state constitution, the United States
Constitution, and applicable state and federal fair employment laws, federal
equal employment opportunity laws, and federal and state labor statues and
regulations, including, the Civil Rights Act of 1964, as amended, the Fair Labor
Standards Act, as amended, the National Labor Relations Act, as amended, the
Labor-Management Relations Act, as amended, the Worker Adjustment and Retraining
Notification Act of 1988, as amended, the Americans With Disabilities Act of
1990, as amended, the Rehabilitation Act of 1973, as amended, the Employee
Retirement Income Security Act of 1974, as amended, the Age Discrimination in
Employment Act of 1967, as amended (“ADEA”), the Family and Medical Leave Act
and the California Fair Employment and Housing Act, as amended, and any related
attorney’s fees, costs and expenses.
/s/ TRL          

Executive’s Initials

4

--------------------------------------------------------------------------------

 

          c. By this release, Executive hereby expressly waives all rights
afforded by Section 1542 of the Civil Code of the State of California
(“Section 1542”) with respect to the Released Parties. Section 1542 states as
follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.
Notwithstanding the provisions of Section 1542, and for the purpose of
implementing a full and complete release, Executive understands and agrees that
this Agreement is intended to include all claims, if any, which Executive may
have and which Executive does not now know or suspect to exist in Executive’s
favor against the Released Parties, and this Agreement extinguishes those
claims.
     6. REVIEW AND REVOCATION PERIOD.
          a. Executive acknowledges and agrees that he is waiving his rights
under the ADEA and, accordingly, he has at least twenty-one (21) calendar days
after receipt of this Agreement to consider whether to sign it, and the Company
has advised Executive that he may consult with an attorney of his choosing prior
to signing and returning this Agreement.
          b. Executive further acknowledges that he may change his mind and
revoke this Agreement at any time during the seven (7) calendar days after he
signs the Agreement, in which case none of the provisions of this Agreement will
have any effect. Executive acknowledges and agrees that if he wishes to revoke
this Agreement, he must do so in writing, and that such revocation must be
signed by Executive and received by the Company at its headquarters located at
One Market @ The Landmark, San Francisco, California 94105 to the attention of
Mark Buxton, Vice President, Human Resources, no later than 5:00 P.M. Pacific
Time on the seventh (7th) day after Executive has signed the Agreement.
Executive acknowledges and agrees that, in the event Executive revokes this
Agreement, he shall have no right to receive any of the Severance Benefits
described under Paragraph 2.
     7. CONTINUING OBLIGATIONS. Executive hereby acknowledges and affirms his
continuing obligations to the Company pursuant to Sections 6 and 7 of the
Employment Agreement (a) not to use or disclose Proprietary Information at any
time and to return to the Company all property of the Company in the Executive’s
possession or under the Executive’s control; (b) not to, directly or indirectly,
solicit any employee of the Company to leave his or her
/s/ TRL          

Executive’s Initials

5

--------------------------------------------------------------------------------

 

employment for a period of two (2) years after the Termination Date; and (c) not
to, directly or indirectly, solicit, or knowingly encourage any current or
future customer of or supplier to the Company or any existing or future
affiliate to modify the business relationship, or cease doing business in whole
or in part, with the Company or any affiliate for a period of two (2) years
after the Termination Date, all as more fully set forth in the Employment
Agreement.
     8. NON-DISPARAGEMENT. Executive agrees that he shall not, at any time,
make, directly or indirectly, any oral or written, public or private statements
that are disparaging of the Company or any of its subsidiaries, affiliates,
successors, assigns, including any of their present or former officers,
directors, agents, or employees. Nor shall Executive make any oral or written,
public or private statements that disparage or otherwise constitute trade libel
of the Company’s or its subsidiaries’, affiliates’, successors’ or assigns’
products or services. In turn, the Company agrees that it shall not make any
corporate public communications that disparage Executive’s job performance,
including any such disparaging statements: (a) in the Form 8-K announcing
Executive’s departure from the Company; (b) in any other SEC filing; or
(c) during the Company’s Earnings Call on June 22, 2006 while describing or
responding to questions concerning Executive’s departure. In addition, the
Company shall communicate to all its executives the Company’s policy that such
executives shall not make any public or private statements that are disparaging
of Executive or Executive’s performance at the Company.
     9. REMEDIES. If the Company determines that Executive has materially
violated the terms and conditions of Paragraph 7 of this Agreement, the Company
may elect, in its sole and absolute discretion, upon ten (10) days’ notice to
Executive, to file a lawsuit against Executive for the alleged violation and, in
connection with such lawsuit, arrange for a third party to hold in escrow any
unpaid Severance Benefits pending resolution of the dispute by a court of
competent jurisdiction, or, if the Parties so agree, a designated arbitrator;
provided that, any escrow instructions to the third party include an instruction
to pay the unpaid Severance Benefits held in escrow consistent with any judgment
or order by a court of competent jurisdiction or the Parties settlement
agreement. It is further understood and agreed that if, at any time, a violation
of any term or condition of this Agreement is asserted by any party hereto, that
party shall have the right to seek specific performance of that term or
condition and/or any other necessary and proper relief, including, damages and
injunctive relief from any court of competent jurisdiction.
     10. REPRESENTATIONS. Executive makes the following representations, each of
which is an important consideration to the Company’s willingness to enter into
this Agreement with Executive:
          a. Executive acknowledges and represents that the Company is not
entering into this Agreement because it believes that Executive has any
cognizable legal claim against the Released Parties, other than under Section
4(f) of his Employment Agreement. Executive agrees
/s/ TRL          

Executive’s Initials

6

--------------------------------------------------------------------------------

 

that the purpose of this Agreement is to provide him with the benefits that he
is entitled to under Section 4(f) of Executive’s Employment Agreement.
          b. Executive represents that he has not filed any claim, charge,
grievance, complaint, or action in or with any federal, state, or local court or
administrative agency or before any other tribunal against the Released Parties.
          c. Executive acknowledges and agrees that except as provided above,
Executive shall not be entitled to receive any other compensation or benefits of
any sort from the Company including, salary, bonuses, stock, vacation pay,
holiday pay, sick leave, short-term or long-term disability benefits, health
care continuation coverage (except as provided under federal or state law),
retirement, insurance, benefits otherwise payable under any of the Company’s
severance plans, programs or policies, or any other form of compensation or
benefits from the Released Parties at any time.
          d. Executive represents and warrants that he has returned to the
Company, or will do so within seven (7) days of the full execution of this
Agreement, all documents, data, records, keys, credit cards, identification
badges, proprietary or confidential information and other physical property that
came into Executive’s possession during his employment, whether acquired from
the Company or from any other source.
          e. Executive acknowledges that, prior to signing this Agreement, he
read and understood each and every provision in this Agreement and that he had
the opportunity to consult with an attorney regarding the effect of each and
every provision of this Agreement. Executive further acknowledges that he
knowingly and voluntarily entered into this Agreement with complete
understanding of all relevant facts, and that he was neither fraudulently
induced nor coerced to enter into this Agreement.
     11. SEVERABILITY. Should any provision of this Agreement be declared or
determined by any court of competent jurisdiction to be wholly or partially
illegal, invalid, or unenforceable, it is specifically hereby agreed that the
legality, validity, and enforceability of the remaining parts, terms, or
provisions of this Agreement shall not in any way be affected thereby; rather,
said illegal, invalid, or unenforceable part, term, or provision shall be deemed
not to be a part of this Agreement. Nor shall any such determination of
illegality, invalidity, or unenforceability of any part, term or provision of
this Agreement by a particular court affect the legality, validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdictions, it being intended that all rights and obligations of the Parties
hereunder shall be enforceable to the fullest extent permitted by law.
/s/ TRL          

Executive’s Initials

7

--------------------------------------------------------------------------------

 

     12. THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of
Executive and the Released Parties and shall not inure to the benefit of any
other third parties; provided that, in the event Executive dies after executing
this Agreement, but before receiving the payments set forth in Paragraphs 2(a),
2(b) and 2(d) of this Agreement, Executive’s estate and/or heirs shall be
entitled to such payments.
     13. NO WAIVERS; AMENDMENTS. The failure of either party to this Agreement
to enforce any of its terms, provisions or covenants shall not be construed as a
waiver of the same or of the right of such party to enforce the same except for
Executive’s failure to revoke this Agreement within seven (7) days of its
execution as set forth in Paragraph 6(b) above. Waiver by the Company of any
breach or default by Executive of any term, provision or covenant of this
Agreement shall not operate as a waiver of any other breach or default by
Executive. This Agreement may not be amended or modified other than by a written
instrument signed by the Company and Executive.
     14. DESCRIPTIVE HEADINGS. The Paragraph headings contained herein are for
reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
     15. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same instrument.
     16. GOVERNING LAW. This Agreement and all rights, duties and remedies
hereunder shall be governed by and construed and enforced in accordance with the
laws of the State of California, without reference to its choice of law rules.
     17. ENTIRE AGREEMENT. This Agreement sets forth the entire agreement and
understanding of the Parties relating to the subject matter hereof and merges
and supersedes all prior discussions, agreements and understandings of every
kind and nature between the Parties hereto and neither party shall be bound by
any term or condition other than as expressly set forth or provided for in this
Agreement; provided that, Sections 4(i) (Ongoing Obligations), 5
(Indemnification), 6 (Proprietary Information), 7 (Noninterference), 8
(Injunctive Relief) and 10 (Miscellaneous) of Executive’s Employment Agreement
shall survive the termination of Executive’s employment, and remain in full
force and effect as provided by the terms therein.
[Signatures on the following page.]
/s/ TRL          

Executive’s Initials

8

--------------------------------------------------------------------------------

 

          IN WITNESS WHEREOF, the Parties have executed this Agreement as of the
date set forth below:
EXECUTIVE

         
By:
  /s/ Todd R. Lachman   Dated: June 21, 2006
 
       
 
       Todd R. Lachman    
 
        DEL MONTE CORPORATION    
 
       
By:
  /s/ Mark J. Buxton   Dated: June 21, 2006
 
       
 
       Mark J. Buxton    
 
       Vice President, Human Resources    

/s/ TRL          

Executive’s Initials

9