FORM OF U.S.
CHANGE IN CONTROL
SEVERANCE PROTECTION AGREEMENT
THIS
AGREEMENT made as of <DATE>, by and between Campbell Soup
Company (the “ Company” ) and <NAME> (the
“ Executive” ).
WHEREAS,
the Board of Directors of the Company (the “
Board” ) recognizes that the possibility of a Change
in Control (as hereinafter defined) exists and that the threat of
or the occurrence of a Change in Control may result in the
departure or in significant distractions of its key management
personnel because of the uncertainties inherent in such a
situation;
WHEREAS,
the Board has, as recommended and approved by the Compensation and
Organization Committee (the “ Committee ”),
determined that it is essential and in the best interest of the
Company and its stockholders to retain the services of the
Executive in the event of a threat or occurrence of a Change in
Control and to ensure his continued dedication and efforts in such
event without undue concern for his personal financial and
employment security; and
WHEREAS,
in order to induce the Executive to remain in the employ of the
Company and to encourage the continued attention and dedication of
the Executive, particularly in the event of a threat or the
occurrence of a Change in Control, the Company desires to enter
into this Agreement with the Executive to provide the Executive
with certain benefits in the event his employment is terminated as
a result of, or in connection with, a Change in Control.
NOW,
THEREFORE, in consideration of the respective agreements of the
parties contained herein, it is agreed as follows:
1.
Term of Agreement . The term of this Agreement (the “
Term ”) shall commence on <DATE>, and shall
continue in effect until the third anniversary of such date;
provided , however , that commencing on the second
anniversary of such date and on each anniversary thereafter, the
term of this Agreement shall automatically be extended for one
(1) year unless either the Company or the Executive shall have
given written notice to the other at least ninety (90) days
prior thereto that the Term of this Agreement shall not be so
extended; and provided, further, however , that
notwithstanding any such notice by the Company not to extend, the
Term shall not expire prior to the expiration of twenty-four
(24) months after the occurrence of a Change in Control that
occurs prior to the end of the term.
2.1
“ Cause” means a termination evidenced by a
resolution adopted in good faith by no less than two-thirds of the
Board that the Executive (a) intentionally and continually
failed to substantially perform his duties with the Company (other
than a failure resulting from the Executive’s incapacity due
to physical or mental illness) which failure continued for a period
of at least thirty (30) days after a written notice of demand
for substantial performance has been delivered to the Executive
specifying the manner in which the Executive has failed
to
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substantially
perform, or (b) intentionally engaged in conduct which is
demonstrably and materially injurious to the Company, monetarily or
otherwise; provided, however, that no termination of the
Executive’s employment shall be for Cause as set forth in
clause (b) above until (x) there shall have been
delivered to the Executive a copy of a written notice setting forth
that the Executive was guilty of the conduct set forth in clause
(b) and specifying the particulars thereof in detail, and
(y) the Executive shall have been provided an opportunity to
be heard by the Board (with the assistance of the Executive’s
counsel if the Executive so desires). No act, nor failure to act,
on the Executive’s part, shall be considered
“intentional” unless he has acted, or failed to act,
with an absence of good faith and without a reasonable belief that
his action or failure to act was in the best interest of the
Company. Notwithstanding anything contained in this Agreement to
the contrary, no failure to perform by the Executive after a Notice
of Termination is given by the Executive shall constitute Cause for
purposes of this Agreement.
2.2
“ Change in Control” means any of the following
events: (a) The acquisition in one or more transactions by any
“ Person ” (as the term person is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act
of 1934, as amended (the “ 1934 Act ”) of
“ Beneficial Ownership ” (within the meaning of
Rule 13d-3 promulgated under the 1934 Act) of twenty-five
percent (25%) or more of the combined voting power of the
Company’s then outstanding voting securities (the “
Voting Securities” ), provided , however
, that for purposes of this Section 2.2(a), the Voting
Securities acquired directly from the Company by any Person shall
be excluded from the determination of such Person’s
Beneficial Ownership of Voting Securities (but such Voting
Securities shall be included in the calculation of the total number
of Voting Securities then outstanding); or
(b) The
individuals who, as of September 28, 2000, are members of the
Board (the “ Incumbent Board ”), cease for any
reason to constitute more than fifty percent (50%) of the Board;
provided , however , that if the election, or
nomination for election by the Company’s stockholders, of any
new director was approved by a vote of at least two-thirds of the
Incumbent Board, such new director shall, for purposes of this
Agreement, be considered as a member of the Incumbent Board;
or
(c) Approval
by stockholders of the Company of (1) a merger or
consolidation involving the Company if the stockholders of the
Company, immediately before such merger or consolidation, do not
own, directly or indirectly immediately following such merger or
consolidation, more than fifty percent (50%) of the combined voting
power of the outstanding voting securities of the corporation
resulting from such merger or consolidation in substantially the
same proportion as their ownership of the Voting Securities
immediately before such merger or consolidation or (2) a
complete liquidation or dissolution of the Company or an agreement
for the sale or other disposition of all or substantially all of
the assets of the Company; or
(d) Acceptance
of stockholders of the Company of shares in a share exchange if the
stockholders of the Company, immediately before such share
exchange, do not own, directly or indirectly immediately following
such share exchange, more than fifty percent (50%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such share exchange in substantially the
same proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange.
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Notwithstanding
the foregoing, a Change in Control shall not be deemed to occur
solely because twenty-five percent (25%) or more of the then
outstanding Voting Securities is acquired by (i) a trustee or
other fiduciary holding securities under one or more employee
benefit plans maintained by the Company or any of its subsidiaries,
(ii) any corporation which, immediately prior to such
acquisition, is owned directly or indirectly by the stockholders of
the Company in the same proportion as their ownership of stock in
the Company immediately prior to such acquisition, (iii) any
“ Grandfathered Dorrance Family Stockholder” (as
hereinafter defined) or (iv) any Person who has acquired such
Voting Securities directly from any Grandfathered Dorrance Family
Stockholder but only if such Person has executed an agreement which
is approved by two-thirds of the Board and pursuant to which such
Person has agreed that she (or they) will not increase her (or
their) Beneficial Ownership (directly or indirectly) to 30% or more
of the outstanding Voting Securities (the “ Standstill
Agreement ”) and only for the period during which the
Standstill Agreement is effective and fully honored by such
Person.
For
purposes of this Section, “ Grandfathered Dorrance Family
Stockholder” shall mean at any time a “ Dorrance
Family Stockholder ” (as hereinafter defined) who or
which is at the time in question the Beneficial Owner solely of
(v) Voting Securities Beneficially Owned by such individual on
January 25, 1990, (w) Voting Securities acquired directly
from the Company, (x) Voting Securities acquired directly from
another Grandfathered Dorrance Family Stockholder, (y) Voting
Securities which are also Beneficially Owned by other Grandfathered
Dorrance Family Stockholders at the time in question, and
(z) Voting Securities acquired after January 25, 1990
other than directly from the Company or from another Grandfathered
Dorrance Family Stockholder by any “ Dorrance
Grandchild ” (as hereinafter defined), provided
that the aggregate amount of Voting Securities so acquired by each
such Dorrance Grandchild shall not exceed five percent (5%) of the
Voting Securities outstanding at the time of such
acquisition.
A
“ Dorrance Family Stockholder ” who or which is
at the time in question the Beneficial Owner of Voting Securities
which are not specified in clauses (v), (w), (x), (y) and
(z) of the immediately preceding sentence shall not be a
Grandfathered Dorrance Family Stockholder at the time in question.
For purposes of this Section, “ Dorrance Family
Stockholders” shall mean individuals who are descendants
of the late Dr. John T. Dorrance, Sr. and/or the spouses,
fiduciaries and foundations of such descendants. A “
Dorrance Grandchild ” means as to each particular
grandchild of the late Dr. John T. Dorrance, Sr., all of the
following taken collectively: such grandchild, such
grandchild’s descendants and/or the spouses, fiduciaries and
foundations of such grandchild and such grandchild’s
descendants.
Moreover,
notwithstanding the foregoing, a Change in Control shall not be
deemed to occur solely because any Person (the “ Subject
Person ”) acquired Beneficial Ownership of more than the
permitted amount of the outstanding Voting Securities as a result
of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the
proportional number of shares Beneficially Owned by the Subject
Person, provided that if a Change in Control would occur
(but for the operation of this sentence) as a result of the
acquisition of Voting Securities by the Company, and after such
share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Voting Securities which
increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(e) Notwithstanding
anything contained in this Agreement to the contrary, if the
Executive’s employment is terminated by the Company without
Cause within one year prior
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to a Change in
Control and the Executive reasonably demonstrates that such
termination (1) was at the request of a Third Party (as
defined in Section 2.4(b)) who effectuates a Change in Control
or (2) otherwise occurred in connection with or in
anticipation of, a Change in Control, then, for all purposes of
this Agreement, the date of a Change in Control shall mean the date
immediately prior to the date of such Executive’s termination
of employment.
2.3
“ Disability” means a physical or mental
infirmity that impairs the Executive’s ability to
substantially perform his duties under this Agreement for a
continous period of one hundred eighty (180) days. Any
question as to the existence of an Executive’s Disability
upon which the Executive and the Company cannot agree will be
determined by a qualified independent physician selected by the
Executive and the Company. If the Company and the Executive cannot
agree on a physician, the Chief of Staff of Thomas Jefferson
Hospital in Philadelphia, Pennsylvania shall select a physician.
The determination of such physician made in writing to the Company
and to the Executive shall be final and conclusive for all purposes
of this Agreement.
2.4
(a) “ Good Reason” means the occurrence after a
Change in Control of any of the events or conditions described in
subsections (1) through (7) hereof:
(1) a change in
the Executive’s position or responsibilities (including
reporting responsibilities) which represents a material adverse
change from his position or responsibilities as in effect
immediately prior to such Change in Control; the assignment to the
Executive of any duties or responsibilities which, in the
Executive’s reasonable judgment, are inconsistent with his
status, position or responsibilities; or any removal of the
Executive from or failure to reappoint or reelect the Executive to
any of such offices or positions, except in connection with the
termination of his employment for Disability, Cause, death or by
the Executive other than for Good Reason;
(2) a reduction in
the Executive’s base salary by a material amount or any
failure to pay the Executive any compensation or benefits to which
he is entitled within thirty (30) days of the date
due;
(3) the
Company’s requiring the Executive to be based at any place
outside a 50-mile radius from his principal place of employment
immediately prior to such Change in Control, except for reasonably
required travel on the Company’s business which is not
greater than such travel requirements prior to the Change in
Control;
(4) the failure by
the Company to (A) continue in effect (without reduction in
benefit level, and/or reward opportunities) any compensation or
employee benefit plan in which the Executive was participating
immediately prior to the Change in Control, unless a substitute or
replacement plan has been implemented which provides substantially
identical compensation or benefits to the Executive or
(B) provide the Executive with compensation and benefits, in
the aggregate, at least equal (in terms of benefit levels and/or
reward opportunities) to those provided for under each other
compensation or employee benefit plan, program and practice as in
effect immediately prior to the Change in Control (or as in effect
following the Change in Control, if greater);
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(5) any
material breach by the Company of any provision of this
Agreement;
(6) any
purported termination of the Executive’s employment for Cause
by the Company which does not comply with the terms of
Section 2.1; or
(7) the
failure of the Company to obtain an agreement, satisfactory to the
Executive, from any successor or assign of the Company to assume
and agree to perform this Agreement, as contemplated in
Section 7 hereof.
(b) (1) A
Good Reason termination shall not occur unless the Executive gives
notice to the Company that an event or condition described in
Sections 2.4(a) (1) through (7) has occurred within a
time period not to exceed ninety (90) days from the date of
first occurrence of one of these events or conditions, and the
Company shall have at least thirty (30) days from the time of
that notice in which to remedy the event or condition described in
Sections 2.4(1) through (7).
(2) Any event
or condition described in Section 2.4(a)(1) through
(7) which occurs prior to a Change in Control but which the
Executive reasonably demonstrates (1) was at the request of a
third party who has indicated an intention or taken steps
reasonably calculated to effect a Change in Control (a “
Third Party” ), or (2) otherwise arose in connection
with or in anticipation of a Change in Control, shall constitute
Good Reason for purposes of this Agreement notwithstanding that it
occurred prior to the Change in Control.
(c) The
Executive’s right to terminate his employment pursuant to
this Section 2.4 shall not be affected by his incapacity due
to physical or mental illness.
3.
Severance and Benefits.
3.1
If, during the Term, the Executive’s employment with the
Company is terminated within twenty-four (24) months following
a Change in Control, the Executive shall be entitled to the
following compensation and benefits:
(a) If
the Executive’s employment with the Company is terminated
(1) by the Company for Cause or Disability, (2) by reason
of the Executive’s death, or (3) by the Executive other
than for Good Reason, the Company shall pay the Executive all
amounts earned or accrued through the Termination Date (as
hereinafter defined) but not paid as of the Termination Date,
including (i) base salary (at the rate then in effect),
(ii) reimbursement for reasonable and necessary expenses
incurred by the Executive on behalf of the Company during the
period ending on the Termination Date, and (iii) vacation pay
(collectively, “ Accrued Compensation” ). In
addition to the foregoing, if the Executive’s employment is
terminated by the Company for Disability or by reason of the
Executive’s death, the Company shall pay to the Executive or
his beneficiaries an amount equal to the Pro Rata Bonus (as
hereinafter defined). The “ Pro Rata Bonus” is
an amount equal to the Bonus Amount (as hereinafter defined)
multiplied by a fraction the numerator of which is the number of
days in such fiscal year through the Termination Date and the
denominator of which is 365. The term “ Bonus
Amount” shall mean the greater of the
(x) Executive’s target bonus under the Campbell Soup
Company Annual Incentive Plan for the
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fiscal year in
which the Termination Date occurs or (y) average of the annual
bonuses paid or payable to the Executive during the two full fiscal
years immediately prior to the Termination Date. Executive’s
entitlement to any other compensation or benefits shall be
determined in accordance with the Company’s employee benefit
plans and other applicable programs and practices then in
effect.
(b) If
the Executive’s employment with the Company is terminated
(other than by reason of death), (1) by the Company other than
for Cause or Disability or (2) by the Executive for Good
Reason, the Executive shall be entitled to the following benefits
provided below:
(i) The Company
shall pay the Executive all Accrued Compensation and a Pro-Rata
Bonus (each as defined in Section 3.1(a)).
(ii) The Company
shall pay the Executive as severance pay and in lieu of any further
compensation for periods subsequent to the Termination Date, a
single sum cash payment (the “Severance Amount”) equal
to the amount set forth in paragraph (a) on
Schedule A.
(iii) For a number
of months equal to the lesser of (A) the number of months set
forth in paragraph (b) on Schedule A or (B) the
number of months remaining until the Executive’s 65th
birthday (the “ Continuation Period ”), the
Company shall at its expense continue to provide the Executive and
his dependents and beneficiaries the life insurance and medical
benefits in an amount equal to the greater of: (x) the greater
of (1) such benefits provided to the Executive at any time
during the 90-day period immediately prior to the Change in Control
or (2) the benefits provided to the Executive at any time
following the Change in Control or (y) the benefits provided
to other similarly situated executives who continue in the employ
of the Company during the Continuation Period. The coverage and
benefits (including deductibles and costs) provided in this
Section 3.1(b)(iii) during the Continuation Period shall be no
less favorable to the Executive and his dependents and
beneficiaries, than the most favorable of such coverages and
benefits provided during any of the periods referred to in clauses
(x) and (y) above. The Company’s obligation
hereunder with respect to the foregoing benefits shall be limited
to the extent that the Executive obtains any such benefits pursuant
to a subsequent employer’s benefit plans, in which case the
Company may reduce the co
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