|
Exhibit
10.4
Executive Retention and
Severance Agreement
This Executive Retention and Severance
Agreement (the “Agreement”) is made and entered into as
of December 9, 2003 (the “Effective Date”), by and
between Fresh Del Monte Produce Inc., (the “Company”)
and Mohammad Abu-Ghazaleh (the “Executive”).
RECITALS
The following statements are true and
correct:
As of the Effective Date, the
Executive serves the Company as its Chairman of the Board of
Directors, Board Member (Director) and Chief Executive
Officer.
The purpose of this Agreement
is (i) to encourage Executive to remain in the employ of the
Company, presently as its Chairman of the Board of Directors, Board
Member (Director) and Chief Executive Officer and to continue to
devote Executive’s full attention to the success of the
Company and (ii) to provide specified benefits to Executive in
the event of a Termination Upon Change of Control or a Termination
(Without Cause) in Absence of Change of Control, as such terms are
defined in this Agreement.
Executive also acknowledges
he is employed by the Company in a confidential relationship
wherein Executive, in the course of his employment with the
Company, has and will continue to become familiar with and aware of
information as to the Company’s specific manner of doing
business, including the processes, techniques and trade secrets
utilized by the Company and future plans with respect thereto, all
of which has been and will be established and maintained at great
expense to the Company. This information is a trade secret and
constitutes the valuable goodwill of the Company. The Company
desires that Executive maintain the confidentiality of this
information.
Therefore, in consideration
of the mutual promises, terms, covenants and conditions set forth
herein and the performance of each, it is hereby agreed as
follows:
1. Termination Upon Change of
Control .
In the event of Executive’s
Termination Upon a Change of Control, provided that Executive
complies with the provisions of this Agreement, Executive shall
receive the following payments and benefits:
1.1 Accrued Salary and
Benefits. Executive shall receive all salary earned through the
conclusion of the transition period (or termination date if there
is no transition period requested by the Company), and the
benefits, if any, under Company benefit plans to which Executive
may be entitled pursuant to the terms of such plans.
1
1.2 Continued Medical
Coverage. The Company shall pay 100% of the Executive’s
medical premiums for the same or reasonably equivalent medical
coverage he had on the date of his termination for a period that
ends upon the earlier of (A) the date that the Executive
becomes eligible for medical insurance coverage at a new employer
or (B) the fifth anniversary of the conclusion of the
transition period (or termination date if there is no transition
period requested by the Company).
1.3 Cash Severance Payment.
Executive shall receive a lump sum payment equal to three times
(3) the sum of:
| |
(A) |
annual base salary; plus |
| |
(B) |
an amount equal to the Executive’s bonus under his Annual
Incentive Plan determined as if the Company had achieved 120% of
the financial performance targeted for the year in which such
Termination Upon Change of Control occurs; |
such lump sum payment to be
paid within five (5) business days after the conclusion of the
transition period (or after the termination date if there is no
transition period requested by the Company).
1.4 Cash Bonus Payment.
Executive shall receive a payment in an amount equal to the product
of Executive’s bonus under his Annual Incentive Plan
determined as if the Company had achieved 100% of the financial
performance targeted for the year in which such Termination Upon
Change of Control occurs multiplied by a fraction the numerator is
the number of days from the first day of the year in which such
Termination upon Change of Control occurs through the conclusion of
the transition period (or the termination date if there is no
transition period requested by the Company) and the denominator is
365. The Cash Bonus Payment shall be paid within five
(5) business days after the conclusion of the transition
period (or after the termination date if there is no transition
period requested by the Company).
2
The severance payment and benefits
provided for in this Section 1 shall be in lieu of any other
severance or termination pay, compensation or payment to which the
Executive may be entitled under any Company severance or
termination plan, program, practice or arrangement. The Company
shall withhold from any payments under this Section 1 all
amounts required to be withheld pursuant to any applicable law or
regulation.
2. Termination (Without Cause) in
Absence of Change of Control .
In the event of Executive’s
Termination in Absence of Change of Control, and without cause,
provided that Executive complies with the provisions of this
Agreement and performs the transition services that the Company may
request, Executive shall receive the following payments and
benefits:
2.1 Basic Severance
Compensation. Executive shall receive all salary earned through the
conclusion of the transition period (or termination date if there
is no transition period requested by the Company), and the
benefits, if any, under Company benefit plans to which Executive
may be entitled pursuant to the terms of such plans.
2.2 Continued Medical
Coverage. The Company shall pay 100% of the Executive’s
medical premiums for the same or reasonably equivalent medical
coverage he had on the date of his termination for a period that
ends upon the earlier of (A) the date that the Executive
becomes eligible for medical insurance coverage at a new employer
or (B) the fifth anniversary of the conclusion of the
transition period (or termination date if there is no transition
period requested by the Company).
2.3 Cash Severance Payment.
Executive shall receive a lump sum payment equal to two
(2) times the sum of:
| |
(A) |
annual base salary; plus |
| |
(B) |
an amount equal to the Executive’s bonus under his Annual
Incentive Plan determined as if the Company had achieved 100% of
the financial performance targeted for the year in which such
Termination (Without Cause) in the Absence of Change of Control
occurs, such lump sum payment to be paid within five
(5) business days after the conclusion of the transition
period (or after the termination date if there is no transition
period requested by the Company). |
3
2.4 Cash Bonus Payment.
Executive shall receive a payment in an amount equal to the product
of Executive’s bonus under his Annual Incentive Plan
determined as if the Company had achieved 100% of the financial
performance targeted for the year in which such Termination
(Without Cause) in the Absence of Change of Control occurs
multiplied by a fraction the numerator is the number of days from
the first day of the year in which such Termination (Without Cause)
in the Absence of Change of Control occurs through the conclusion
of the transition period (or the termination date if there is no
transition period requested by the Company) and the denominator is
365. The Cash Bonus Payment shall be paid within five
(5) business days after the conclusion of the transition
period (or after the termination date if there is no transition
period requested by the Company).
The severance payment and benefits
provided for in this Section 2 shall be in lieu of any other
severance or termination pay, compensation or payment to which the
Executive may be entitled under any Company severance or
termination plan, program, practice or arrangement. The Company
shall withhold from any payments under this Section 2 all
amounts required to be withheld pursuant to any applicable law or
regulation.
3. Termination With Cause
.
In the event of Executive’s
termination for Cause, the Company shall not be obligated to make
any severance payments, or provide any severance
benefits.
4. Definitions .
Terms used in this Agreement shall have
the meanings set forth in this Section 3.
4.1 “Cause” means
(a) Executive’s willful and continued failure to perform
substantially his duties with the Company (other than any such
failure resulting from incapacity due to documented physical or
mental illness) and specifically excluding any failure by
Executive, after reasonable efforts to meet performance
expectations, for thirty (30) days after a written demand for
substantial performance is delivered to Executive by the Board
which specifically identifies the manner in which the Board
believes that Executive has not adequately performed his duties, or
(b) a material, willful breach committed in bad faith of the
Company’s Code of Conduct and Business Ethics policy, or
(c) indictment or conviction of a felony based upon a crime.
For purposes of this provision, no act or failure to act, on the
part of Executive, shall be considered as “willful”
unless it is done, or
4
omitted to be done, by
Executive in bad faith without reasonable belief that
Executive’s action or omission was in the best interests of
the Company.
4.2 “Change of
Control” means (a) any “person” (as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), other
than IAT Group, Inc., a trustee or other fiduciary holding
securities of the Company under an employee benefit plan of the
Company, becomes the “beneficial owner” (as defined in
Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more
of (A) the outstanding shares of common stock of the Company
or (B) the combined voting power of the Company’s
then-outstanding securities; (b) the Company is party to a
merger or consolidation, or series of related transactions, which
results in the voting securities of the Company outstanding
immediately prior thereto failing to continue to represent (either
by remaining outstanding or by being converted into voting
securities of the surviving or another entity) at least fifty
(50%) percent of the combined voting power of the voting
securities of the Company or such surviving or other entity
outstanding immediately after such merger or consolidation;
(c) the sale or disposition of all or substantially all of the
Company’s assets (or consummation of any transaction, or
series of related transactions, having similar effect), unless at
least fifty (50%) percent of the combined voting power of the
voting securities of the entity acquiring those assets is held by
persons who held the voting securities of the Company immediate
prior to such transaction or series of transactions; (d) there
occurs a change in the composition of the Board of Directors of the
Company as of change of control date and within a two-year period
therefrom, as a result of which fewer than a majority of the
directors are Incumbent Directors; (e) the dissolution or
liquidation of the Company, unless after such liquidation or
dissolution all or substantially all of the assets of the Company
are held in an entity at least fifty (50%) percent of the
combined voting power of the voting securities of which is held by
persons who held the voting securities of the Company immediately
prior to such liquidation or dissolution; (f) when the
incumbent Chairman ceases to occupy the position of Chairman of the
Board; or (g) any transaction or series of related
transactions that has the substantial effect of any one or more of
the foregoing.
4.3 “Change of Control
Window” means a period commencing on or after the date that
the Company first publicly announces that it has signed a
definitive agreement or that the Company’s board of directors
has endorsed a tender offer for the Company’s stock that in
either case when consummated would result in a Change of Control
(even though consummation is subject to approval or requisite
tender by the Company’s stockholders and other conditions and
contingencies) and ending at the earlier
5
of the date on which the
Company publicly announces that such definitive agreement or tender
offer has been terminated without a Change of Control or on the
date which is twelve (12) months following the consummation of
any transaction or series of transactions th
| 
