Exhibit 10.4

 

DEL MONTE FOODS COMPANY

2002 STOCK INCENTIVE PLAN

NON-QUALIFIED STOCK OPTION AGREEMENT

 

Del Monte Foods Company (the “Company”) hereby grants you,
                                         (the “Participant”), a non-qualified
stock option under the Company’s 2002 Stock Incentive Plan (the ”Plan”), to
purchase shares of common stock of the Company (“Shares”). The date of this
Agreement is                                      (the “Grant Date”). The latest
date this option will expire is the ten (10) year anniversary of the Grant Date
(the “Expiration Date”). However, as provided in Appendix A (attached hereto),
this option may expire earlier than the Expiration Date. Subject to the
provisions of Appendix A and of the Plan, the principal features of this option
are as follows:

 

Maximum Number of Shares

Purchasable with this Option:

  Purchase Price per Share: Scheduled Vesting Dates:   Number of Shares:

 

______________

 

 

______________

______________

  ______________

______________

  ______________

______________

  ______________

 

 

Event Triggering

Termination of Option:

  

Maximum Time to Exercise After

Triggering Event:*

     Termination of Employment for Cause    None     

Termination of Employment without Cause;

Resignation other than Retirement or Disability

  

90 days as to vested portion;

None as to unvested portion

     Termination of Employment due to Retirement   

Expiration Date as to vested portion;

None as to unvested portion

     Termination of Employment due to Disability or death    Expiration Date   
 

Death within 3 months after Termination of Employment

without Cause

  

Expiration Date or 1 year from date of death,
whichever is sooner, as to vested portion;

None as to unvested portion

    

 

* However, in no event may this option be exercised after the Expiration Date.

 

Substituting SARs. In the event the Company no longer uses APB Opinion 25 to
account for equity compensation and is required to or elects to expense the cost
of stock options pursuant to FAS 123 (or a successor standard), the Committee
shall have the ability to substitute, without receiving Participant permission,
SARs paid only in stock for outstanding Options; provided, the terms of the
substituted stock SARs are the same as the terms for the stock options and the
difference between the Fair Market Value of the underlying Shares and the grant
price of the SARs is equivalent to the difference between the Fair Market Value
of the underlying Shares and the Option Price of the Options. If this paragraph
of itself creates adverse accounting consequences for the Company, it shall be
considered null and void.

 

Your signature below indicates your agreement and understanding that this option
is subject to all of the terms and conditions contained in Appendix A and the
Plan. For example, important additional information on vesting and termination
of this option is contained in Paragraphs 4 and 5 of Appendix A. ACCORDINGLY,
PLEASE BE SURE TO READ ALL OF APPENDIX A, WHICH CONTAINS THE SPECIFIC TERMS AND
CONDITIONS OF THIS OPTION.

 

DEL MONTE FOODS COMPANY   PARTICIPANT By  

 

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    Title: V. P. Corporate Human Resources    

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APPENDIX A

TERMS AND CONDITIONS OF NON-QUALIFIED STOCK OPTION

 

1.         Grant of Option. The Company hereby grants to the Participant under
the Plan, as a separate incentive in connection with his or her employment and
not in lieu of any salary or other compensation for his or her services, a
non-qualified stock option to purchase, on the terms and conditions set forth in
this Agreement and the Plan, all or any part of an aggregate of
                     Shares. This option is not intended to qualify as an
“incentive stock option” under Section 422 of the Internal Revenue Code of 1986,
as amended (the “Code”).

 

2.         Exercise Price. The purchase price per Share for this option (the
“Exercise Price”) shall be             .

 

3.          Number of Shares. The number of Shares specified in Paragraph 1
above, and/or the Exercise Price specified in Paragraph 2 above, are subject to
adjustment by the Executive Compensation Committee of the Board of Directors of
the Company (the “Committee”) (subject to any required stockholder approval) in
the event of any increase or decrease in the number of issued Shares resulting
from a subdivision or consolidation of Shares or the payment of a stock dividend
on Shares, or any other increase or decrease in the number of such Shares
effected without receipt or payment of consideration by the Company, or change
in the capitalization of the Company. Further, the Committee in its discretion
will determine whether the option granted pursuant to this Agreement will, in
the context of a Change of Control or any other transaction, be converted into a
comparable option of a successor entity or redeemed for payment in cash or kind
or both.

 

4.         Vesting Schedule. Subject to earlier termination as described in
Paragraph 5 below, the option granted under this Agreement is scheduled to vest
as to the number of Shares and on the dates shown on the first page of this
Agreement. Notwithstanding the foregoing, the option will vest immediately as to
one hundred percent (100%) of the Shares upon the occurrence of a Change of
Control. The Committee in its discretion will determine whether the option will
vest immediately in the event of other transactions including, without
limitation, a liquidation or dissolution of the Company; provided that the
option in no case will be exercisable after the Expiration Date.

 

5.         Termination of Option. In the event of termination of employment of
the Participant with the Company for Cause, this option will expire and be
cancelled upon such termination. In the event of termination of employment
without Cause, or in the event that the Participant resigns for a reason other
than Disability or retirement, this option will remain exercisable to the extent
vested as of the date of termination until the expiration of ninety (90) days
after such termination, on which date it will expire; to the extent not vested
as of the date of termination, this option will expire at the close of business
on the date of termination. In the event of termination of employment as a
result of retirement under any retirement plan of the Company or a subsidiary
company (within the meaning of Section 424(f) of the Code), this option will
remain exercisable to the extent vested as of the date of termination until the
Expiration Date; to the extent not vested as of the date of termination, this
option will expire at the close of business on the date of termination. In the
event of termination of employment on account of Disability or death of the
Participant, this option will remain exercisable with respect to all Shares,
whether or not vested as to such Shares as of the date of termination, until the
Expiration Date. In the event that the Participant dies within three (3) months
following involuntary termination without Cause, this option will remain
exercisable to the extent vested as of the date of termination until the
Expiration Date or, if sooner, one year from the Participant’s death; to the
extent not vested as of the date of termination, this option will expire at the
close of business on the date of termination.

 

6.         Persons Eligible to Exercise Option. This option shall be exercisable
during the Participant’s lifetime by the Participant or, to the extent lawful,
by a broker-dealer acting on behalf of the Participant under the terms set forth
in the Plan, or by a transferee to whom the option or the right to exercise the
option has been transferred pursuant to Paragraph 7 or Paragraph 13 below.

 

7.         Death of Participant. The Committee, in its discretion, may permit
the Participant to designate a beneficiary or beneficiaries to whom any vested
but unexercised portion of this option shall be transferred. In the absence of
such designation, such vested but unexercised portion will be transferred to

 

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the Participant’s estate. No such transfer of the option, or the right to
exercise any option, will be effective to bind the Company unless the Committee
shall have been furnished with written notice thereof and with a copy of the
will and/or such evidence as the Committee deems necessary to establish the
validity of such transfer or right to exercise, and an agreement by the
transferee, administrator, or executor (as applicable) to comply with all the
terms of this Agreement that are or would have been applicable to the
Participant and to be bound by the acknowledgements made by the Participant in
connection with this grant.

 

8.        Exercise of Option. This option may be exercised by the person then
entitled to do so as to any vested portion (a) by giving written notice of
exercise to the Treasury Department of the Company, specifying the number of
full Shares with respect to which the option is being exercised and the
effective date of the proposed exercise; (b) accompanied by full payment of the
Exercise Price (and, if required by the Company, an amount sufficient to satisfy
any withholding tax requirements under federal, state, or local law as
determined by the Company); and (c) by giving satisfactory assurances in
writing, if requested by the Company, signed by the person exercising the
option, that the Shares to be purchased upon such exercise are being purchased
for investment and not with a view to the distribution thereof. No partial
exercise of this option may be for less than ten (10) Share lots or multiples
thereof.

 

9.        Deferral of Effectiveness of Exercise. The Company may, in its
discretion, defer the effectiveness of any exercise of this option in order to
allow the issuance of Shares to be made pursuant to registration or an exemption
from registration or other methods for compliance available under federal or
state securities laws. In the case of such deferral, the Participant shall have
such rights with respect to this option as are set forth in the Plan.
Notwithstanding the foregoing, the Company is under no obligation to effect the
registration pursuant to federal or state securities laws of any Shares to be
issued pursuant to this option.

 

10.      No Rights of Stockholder. Neither the Participant (nor any beneficiary
or transferee) shall be or have any of the rights or privileges of a stockholder
of the Company in respect of any of the Shares issuable pursuant to the exercise
of this option, unless and until the date of the issuance of a stock certificate
with respect to such Shares. Except as expressly provided in Paragraph 3 above
or in Section 10 of the Plan, no adjustment to this option shall be made for
dividends or other rights for which the record date occurs prior to the date
such certificates representing such Shares are issued.

 

11.      No Effect on Employment. The Participant’s employment with the Company
is on an at-will basis only. Accordingly, subject to any written, express
employment contract with the Participant, nothing in this Agreement or the Plan
shall confer upon the Participant any right to continue to be employed by the
Company, or shall interfere with or restrict in any way the rights of the
Company, which are hereby expressly reserved, to terminate the employment of the
Participant at any time for any reason whatsoever, with or without Cause. Such
reservation of rights can be modified only in an express written contract
executed by a duly authorized officer of the Company.

 

12.      Address for Notices. Any notice to be given to the Company under the
terms of this Agreement shall be addressed to the Company, in care of its
Treasury Department, at One Market @ the Landmark, San Francisco, CA 94105, or
at such other address as the Company may hereafter designate in writing.

 

13.      Transferability. Except as provided in Paragraph 7, this option only
may be transferred or assigned to a member or members of the Participant’s
“immediate family,” as such term is defined in Rule 16a-1(e) under the
Securities Exchange Act of 1934, as amended, or to a trust for the benefit
solely of a member or members of the Participant’s immediate family, or to a
partnership or other entity whose only owners are members of the Participant’s
immediate family, provided that the instrument of transfer is approved by the
Company’s Employee Benefits Committee. If the option is so transferred, it is
not again transferable other than by will or by the laws of descent and
distribution, and following any such transfer, the option will remain subject to
substantially the same terms as were applicable while held by the Participant,
unless the Committee determines otherwise.

 

14.      Other Benefits. Except as provided below, nothing contained in this
Agreement shall affect the Participant’s right to participate in and receive
benefits under and in accordance with the then

 

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current provisions of any pension, insurance or other employee welfare plan or
program of the Company. Notwithstanding any contrary provision of this
Agreement, in the event that the Participant receives a hardship withdrawal from
his or her pre-tax account under any tax-qualified retirement plan that contains
a cash or deferred arrangement and is sponsored by the Company (the “401(k)
Plan”), this option may not be exercised during the twelve (12) month period
following the receipt of such withdrawal, unless the Committee determines that
such exercise (or a particular manner of exercise) would not adversely affect
the continued tax qualification of the 401(k) Plan.

 

15.         Maximum Term of Option. Notwithstanding any other provision of this
Agreement, this option is not exercisable after the Expiration Date.

 

16.          Binding Agreement. Subject to the limitation on the transferability
of this option contained herein, this Agreement shall be binding upon and inure
to the benefit of the heirs, legatees, legal representatives, successors and
assigns of the parties hereto.

 

17.         Conditions to Exercise. The Exercise Price for this option must be
paid in cash or its equivalent, or, in the Committee’s sole discretion, in
Shares of equivalent value that (a) were previously issued to the Participant
and (b) have been held by the Participant for at least six (6) months prior
thereto, or by such other means as the Committee, in its discretion, permits.
Exercise of this option will not be permitted until satisfactory arrangements
have been made for the payment of the appropriate amount of withholding taxes
(as determined by the Company).

 

18.         Plan Governs. This Agreement is subject to all of the terms and
provisions of the Plan. In the event of a conflict between one or more
provisions of this Agreement and one or more provisions of the Plan, the
provisions of the Plan shall govern. Capitalized terms and phrases used and not
defined in this Agreement shall have the meaning set forth in the Plan.

 

19.         Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to its
principles of conflicts of law.

 

20.         Committee Authority. The Committee shall have all discretion, power,
and authority to interpret the Plan and this Agreement and to adopt such rules
for the administration, interpretation and application of the Plan as are
consistent therewith. All actions taken and all interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Participant, the Company and all other interested persons, and shall be
given the maximum deference permitted by law. No member of the Committee shall
be personally liable for any action, determination or interpretation made in
good faith with respect to the Plan or this Agreement.

 

21.         Captions. The captions provided herein are for convenience only and
are not to serve as a basis for the interpretation or construction of this
Agreement.

 

22.          Agreement Severable. In the event that any provision in this
Agreement shall be held invalid or unenforceable, such provision shall be
severable from, and such invalidity or unenforceability shall not be construed
to have any effect on, the remaining provisions of this Agreement.

 

23.         Definitions. For purposes of this Agreement, the following words and
phrases shall have the following meanings unless a different meaning is plainly
required by the context:

 

  (a) “Cause,” when used in connection with the termination of an Participant’s
employment with the Company, shall mean (i) a material breach by the Participant
of the terms of his or her employment agreement, if any; (ii) any act of theft,
misappropriation, embezzlement, intentional fraud or similar conduct by the
Participant involving the Company or any affiliate; (iii) the conviction or the
plea of nolo contendere or the equivalent in respect of a felony involving an
act of dishonesty, moral turpitude, deceit or fraud by the Participant; (iv) any
damage of a material nature to the business or property of the Company or any
affiliate caused by the Participant’s willful or grossly negligent conduct; or
(v) the Participant’s failure to act in accordance with any specific lawful
instructions given to the Participant in connection with the performance of his
or her duties for the Company or any affiliate.

 

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  (b) “Change of Control” shall mean the occurrence of one or more of the
following events:

 

  (i) any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all or substantially all of the assets of the
Company to any individual, partnership, corporation, limited liability company,
unincorporated organization, trust or joint venture, or a governmental agency or
political subdivision thereof (a “Person”) or group of related Persons for
purposes of Section 13(d) of the Securities Exchange Act of 1934, as amended (a
“Group”), together with any Affiliates (as defined below) thereof;

 

  (ii) the approval by the holders of any and all shares, interests,
participations or other equivalents (however designated and whether or not
voting) of corporate stock, including each class of common stock and preferred
stock, of the Company (“Capital Stock”) of any plan or proposal for the
liquidation or dissolution of the Company;

 

  (iii) any Person or Group shall become the owner, directly or indirectly,
beneficially or of record, of shares representing more than 40% of the aggregate
ordinary voting power represented by the issued and outstanding Capital Stock
(the “Voting Stock”) of the Company;

 

  (iv)         the replacement of a majority of the Board of Directors of the
Company (the “Board of Directors”) over a two-year period commencing after the
Effective Date of the Plan, from the directors who constituted the Board of
Directors at the beginning of such period, and such replacement shall not have
been approved by a vote of at least a majority of the Board of Directors then
still in office who either were members of such Board of Directors at the
beginning of such period (any such individual who was a director at the
beginning of such period or is so approved, nominated, or designated being
referred to herein as an “Incumbent Director”) or whose election as a member of
such Board of Directors was previously approved; provided, however, that no
individual shall be considered an Incumbent Director if the individual initially
assumed office as a result of either an actual or threatened “Election Contest”
(as described in Rule 14a-11 promulgated under the Exchange Act) or other actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors (a “Proxy Contest”) including by reason of any
agreement intended to avoid or settle any Election Contest or Proxy Contest; or

 

  (v) a merger or consolidation involving the Company in which the Company is
not the surviving corporation, or a merger or consolidation involving the
Company in which the Company is the surviving corporation but the holders of
shares of Common Stock receive securities of another corporation and/or other
property, including cash, or any other similar transaction.

 

For purposes of this Paragraph 23(b), “Affiliate” shall mean, with respect to
any specified Person, any other Person who directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common control
with, such specified Person. The term “control” means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities, by

 

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contract or otherwise; and the terms “controlling” or “controlled” have meanings
correlative of the foregoing.

 

  (c) “Disability” shall mean physical or mental disability as a result of which
the Participant is unable to perform the essential functions of his or her
position, even with reasonable accommodation, for six (6) consecutive months.
Any dispute as to whether or not the Participant is so disabled shall be
resolved by a physician reasonably acceptable to the Participant and the Company
whose determination shall be final and binding upon both the Participant and the
Company. Notwithstanding the foregoing provisions of this Paragraph 23(c),
“Disability,” when used in connection with the termination of the employment
with the Company of an Participant who at the time of such termination is a
party to a written employment or retention agreement with the Company, shall
have the meaning assigned to such term in such agreement.

 

24.         Modifications to the Agreement. This Agreement constitutes the
entire understanding of the parties on the subjects covered. The Participant
expressly warrants that he or she is not executing this Agreement in reliance on
any promises, representations, or inducements other than those contained herein.
Modifications to this Agreement or the Plan can be made only in an express
written contract executed by a duly authorized officer of the Company.

 

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