exv10w1



 



EXHIBIT 10.1





DEL MONTE FOODS COMPANY

PERFORMANCE SHARES

AGREEMENT




          This Performance Shares Agreement (the “Agreement”) contains the terms and conditions under
which the Compensation Committee of the Board (the “Committee”), on behalf of Del Monte Foods
Company (the “Company”), has granted to you, ______________ (the “Participant”), as of January 20,
2005 (the “Grant Date”), and pursuant to the Del Monte Foods Company 2002 Stock Incentive Plan (the
“Plan”), units representing the Common Stock of the Company known as “Performance Shares,” in order
to encourage you to continue to contribute to the Company’s growth and success.




          1.      Grant of Performance Shares. The Performance Shares award consists of [insert # of
units] units representing shares of the Common Stock of the Company, which the Company has granted
to the Participant as of the date hereof as a separate incentive in connection with his or her
service to the Company and not in lieu of any salary or other compensation for his or her services.
The Performance Shares also shall include any new, additional, or different securities or units
representing such securities the Participant may become entitled to receive with respect to such
Performance Shares by virtue of any increase or decrease in the number of issued shares of Common
Stock resulting from a subdivision or consolidation of shares of Common Stock, or the payment of a
stock dividend (but only on shares of Common Stock), or any other increase or decrease in the
number of such shares effected without receipt or payment of consideration by the Company, or any
change in the capitalization of the Company pursuant to Section 10(b) of the Plan, or by virtue of
any Change of Control or other transaction pursuant to Section 10(c) of the Plan. The Performance
Shares shall be subject to the Restrictions pursuant to Section 3 of this Agreement.




          2.      Participant’s Account; Certain Rights in Respect of Performance Shares.



                    (a)     The Performance Shares granted to the Participant shall be entered into an account in the
Participant’s name. This account shall be a bookkeeping entry only and shall be utilized solely as
a device for the measurement and determination of the number of shares of Common Stock to be paid
to or in respect of the Participant pursuant to this Agreement.



                    (b)     During the period before the release of the Restrictions on the Performance Shares as
provided in Section 4, the Participant shall have no voting rights in respect of the Performance
Shares.



                    (c)     Dividend equivalents will be credited in the form of additional Performance Shares to the
Participant’s account, based on the Fair Market Value of Common Stock on the date the dividend is
issued.




          3.     Restrictions. Prior to their release from the Restrictions as set forth in Section
4 below, all Performance Shares held for or in respect of the Participant, and the shares of Common
Stock that such Performance Shares represent, may not be assigned, transferred, or otherwise
encumbered or disposed of by the Participant.




 









 








          4.      Release of Performance Shares from Restrictions.



                    (a)     Subject to the provisions of paragraph (e) of this Section 4, the Restrictions shall cease
to apply to the Performance Shares granted under this Agreement, or the Performance Shares shall be
forfeit, on the Vesting / Forfeiture Date defined below, or shall vest in their entirety upon the
earlier occurrence of a Change of Control. Upon the release of the Performance Shares from the
Restrictions (except if receipt of the Performance Shares is deferred as provided in Section 5),
the Participant shall be paid the value of his or her account in the form of Common Stock. No
fractional shares of Common Stock will be issued. If the calculation of the number of shares of
Common Stock to be issued results in fractional shares, then the number of shares of Common Stock
will be rounded up to the nearest whole share of Common Stock.



                     (b)      The Committee, in its sole discretion, has established a target performance goal based on
the Company’s Return on Invested Capital (“ROIC Target”), which will be measured annually over a
three (3) year “performance period” commencing on May 1, 2006 through May 3, 2009. The ROIC Target
or the Performance Shares award may be adjusted by the Committee from time to time, in its sole
discretion, to the extent necessary in order to reflect a change in corporate capitalization, such
as a stock split or dividend, or a corporate transaction, such as any merger, consolidation,
separation (including a spinoff or other distribution of stock or property by the Company),
reorganization, or any partial or complete liquidation by the Company, as provided by Sections
10(b) or 10(c) of the Plan. Based on the Company’s level of achievement of the ROIC Target, the
Restrictions shall cease to apply to the Performance Shares or the Performance Shares shall
forfeit, according to the following matrix:




Vesting of Performance Shares based on Achievement of ROIC Targets




	 	 	 	 	 	 	 	 	 	 	 	 
	 	Performance Period
	 	 	ROIC Target
	 	 	Percent of

Performance

Shares Released

from Restrictions

or Forfeit Based

on Achievement

of ROIC Target
	 	 	Vesting / Forfeiture

Date	 
	 	May 1, 2006 -

April 29, 2007

(“Fiscal Year 2007”)
	 	 	Greater than or equal to

Fiscal Year 2007 ROIC Target = vest

Less than Fiscal Year 2007 ROIC Target = forfeiture
	 	 	25%
	 	 	First day after

Company files its

Form 10-K for

Fiscal Year 2007	 
	 	April 30, 2007 -

April 27, 2008

(“Fiscal Year 2008”)
	 	 	Greater than or equal to

Fiscal Year 2008 ROIC Target = vest

Less than  Fiscal Year 2008 ROIC Target = forfeiture
	 	 	25%
	 	 	First day after

Company files its

Form 10-K for 

Fiscal Year 2008	 
	 





2









 






	 	 	 	 	 	 	 	 	 	 	 	 
	 	Performance Period
	 	 	ROIC Target
	 	 	Percent of

Performance

Shares Released

from Restrictions

or Forfeit Based

on Achievement

of ROIC Target
	 	 	Vesting / Forfeiture

Date	 
	 	April 28, 2008 -

May 3, 2009

(“Fiscal Year 2009”)
	 	 	Greater than or equal to

Fiscal Year 2009 ROIC Target = vest

Less than Fiscal Year 2009 ROIC Target % = forfeiture
	 	 	50%
	 	 	First day after

Company files its

Form 10-K for 

Fiscal Year 2009	 
	 




The Committee shall have sole discretion to determine whether the ROIC Target has been achieved and
whether the Restrictions shall be released from any or all of the Performance Shares. The
Committee’s determinations pursuant to the exercise of discretion with respect to all matters
described in this paragraph shall be final and binding on the Participant.



                    (c)     The vesting of the Performance Shares, if any, shall be accelerated to include
cumulatively the next level(s) of vesting commensurate with the level of ROIC Target achieved. For
example, if the Company’s Fiscal Year 2007 ROIC is achieved or surpassed, then 100% vesting of all
Performance Shares would occur on the first day after the Company files its Form 10-K for Fiscal Year 2007, subject to the provisions of paragraph (e) of this Section 4.
Likewise, if the Company’s Fiscal Year 2007 ROIC is not achieved, then 25% of the Performance
Shares shall be permanently forfeited, even if the Company achieves or exceeds its ROIC Target in a
subsequent performance period.



                     (d)      Upon the termination of the Participant’s employment by reason of Disability or death, the
Performance Shares held by such Participant or his or her designated beneficiary (as applicable)
shall continue to vest at the time and in the amounts (if any) set forth pursuant to paragraph (a)
of this Section 4, and Common Stock that is distributed on account of Performance Shares that
become vested (if any) shall be distributed to the Participant or his or her designated beneficiary
(as applicable) subject to Section 6, below.



                     (e)      Upon the termination of the Participant’s employment for any reason other than Disability
or death, Performance Shares that remain subject to the Restrictions at such time shall be
forfeited by the Participant to the Company; provided that, for Participants covered under the
Executive Severance Policy or who are parties to an employment agreement with the Company or a
Subsidiary of the Company, in the case of termination of employment without Cause or resignation
for Good Reason (as defined in the Executive Severance Policy or employment agreement, as
applicable), (i) with respect to Participants who are covered under the Severance Policy, these
Performance Shares will be treated under such policy; and (ii) with respect to Participants who are
not covered under the Executive Severance Policy but who are parties to an employment agreement
with the Company or a Subsidiary of the Company, these Performance Shares will be treated under
such employment agreement.




3









 








          5.      Deferral. The Committee has the right to determine, in its sole discretion,
whether Participants shall be permitted to elect to defer the receipt of a distribution of Common
Stock in respect of the Performance Shares under a deferral plan of the Company, in which case,
after the Restrictions are released, the Performance Shares would remain as stock equivalent units
in the Participant’s account. Stock equivalent units held in the Participant’s account pursuant to
this Section 5 shall accrue dividend equivalents that will be credited in the form of additional
stock equivalent units to the Participant’s account, based on the Fair Market Value of Common Stock
on the date the dividend is issued. At the end of the deferral period, all stock equivalent units
will be converted and distributed to the Participant in the form of Common Stock. No fractional
shares of Common Stock will be issued. If the calculation of the number of shares of Common Stock
to be issued results in fractional shares, then the number of shares of Common Stock will be
rounded up to the nearest whole share of Common Stock.




          6.      Designation of Beneficiary. The Participant may designate a beneficiary or
beneficiaries to whom, along with all other grants or awards made to the Participant under the
Plan, unvested Performance Shares or Common Stock that is distributed on account of Performance
Shares that become vested following the Participant’s death shall be transferred. A Participant
shall designate his or her beneficiary by executing the “2002 Stock Incentive Plan Beneficiary
Designation and Spousal Consent Form” and returning it to the Corporate Secretary. Any form so
submitted shall replace, in respect of all grants or awards made to the Participant under the Plan,
any previous version of the same form the Participant may have submitted to the Corporate
Secretary. A Participant shall have the right to change his or her beneficiary from time to time
by executing a subsequent “2002 Stock Incentive Plan Beneficiary Designation and Spousal Consent
Form” and otherwise complying with the terms of such form and the Committee’s rules and procedures,
as in effect from time to time. The Committee shall be entitled to rely on the last “2002 Stock
Incentive Plan Beneficiary Designation and Spousal Consent Form” submitted by the Participant, and
accepted by the Corporate Secretary, prior to such Participant’s death. In the absence of such
designation of beneficiary, unvested Performance Shares or Common Stock that is distributed on
account of Performance Shares that become vested following the Participant’s death will be
transferred to the Participant’s surviving spouse, or if none, to the Participant’s estate. If the
Committee has any doubt as to the proper beneficiary, the Committee shall have the right,
exercisable in its sole discretion, to withhold such payments until this matter is resolved to the
Committee’s satisfaction.




          7.      Taxes. The Company may, in its discretion, make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of all federal, state, local and
other taxes required by law to be withheld with respect to the vesting of any Performance Shares or
the distribution of Common Stock on account of the vesting of any Performance Shares, including,
but not limited to, withholding shares of Common Stock granted under this Agreement equal in value
to such withholding taxes, deducting the amount of such withholding taxes from any other amount
then or thereafter payable to the Participant, or requiring the Participant or the beneficiary or
legal representative of the Participant to pay in cash to the Company the amount required to be
withheld or to execute such documents as the Company deems necessary or desirable to enable it to
satisfy its withholding obligations.




4









 








          8.      No Special Rights; No Right to Future Awards. Nothing contained in this Agreement
shall confer upon any Participant any right with respect to the continuation of his or her service
with the Company, or any right to receive any other grant, bonus, or other award.




          9.      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 Corporate Secretary, at One Market @
the Landmark, San Francisco, CA 94105, or at such other address as the Company may hereafter
designate in writing.




          10.      Other Benefits. The benefits provided to the Participant pursuant to this
Agreement are in addition to any other benefits available to such Participant under any other plan
or program of the Company. The Agreement shall supplement and shall not supersede, modify, or
amend any other such plan or program except as may otherwise be expressly provided.




          11.      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.




          12.      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 laws.




          13.      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.




          14.      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.




          15.      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.




          16.      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)  	“Board” shall mean the Board of Directors of the
Company.






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




5









 












	 	(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




6









 






	 	   	receive securities of another corporation and/or other property,
including cash, or any other similar transaction.






	 	   	For purposes of this Paragraph 16(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 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 16(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.






	 	(d)  	“Restrictions” means those restrictions on the
Performance Shares set forth in Section 3.






	 	(e)  	“Return on Invested Capital” means net operating profit
after tax (income from continuing operations (adjusted for integration costs
and expenses) before income taxes, plus interest expense, plus amortization,
less taxes calculated at the annual effective tax rate) divided by average invested
capital (total assets less assets of discontinued operations less deferred tax
assets less accounts payable and accrued expenses less other non-current
liabilities) measured at the end of the fiscal year.






	 	(f)  	Any capitalized terms not defined in this Agreement shall have
the meaning provided in the Plan.





	 	 	 	 	 	 	 
	DEL MONTE FOODS COMPANY	 	 	 	PARTICIPANT
	 
	 	 	 	 	 	 
	By:
	 	 	 	 	 	 
	

	 	 
	 	 	 	 
	Title:

	 	Vice President, Human Resources	 	 	 	 







7