<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
Vlasic Foods International Inc.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
- --------------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
- --------------------------------------------------------------------------------
(5) Total fee paid:
- --------------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
- --------------------------------------------------------------------------------
(2) Form, schedule or registration statement no.:
- --------------------------------------------------------------------------------
(3) Filing party:
- --------------------------------------------------------------------------------
(4) Date filed:
- --------------------------------------------------------------------------------
<PAGE> 2
[VLASIC LOGO]
Vlasic Plaza
6 Executive Campus
Cherry Hill, New Jersey 08002-4112
October 15, 1999
NOTICE OF ANNUAL MEETING OF SHAREOWNERS
TUESDAY, DECEMBER 7, 1999
Dear Fellow Shareowner:
You are cordially invited to attend Vlasic Foods International's 1999 Annual
Meeting of Shareowners to be held at the Hyatt Regency, Greenwich, Connecticut,
on Tuesday, December 7, 1999, beginning at 10:00 a.m., Eastern Standard Time.
The purpose of the meeting is to:
1. Elect directors.
2. Approve the Company's 1998 Long-Term Incentive Plan including the
performance goals for such plan.
3. Approve the Company's Annual Incentive Plan including the performance
goals for such plan.
4. Ratify the appointment of independent accountants.
5. Transact any other business properly brought before the meeting.
If you were a shareowner of record at the close of business on October 8, 1999,
you may vote by proxy or in person at the annual meeting. Your vote is
important. Whether you plan to attend the annual meeting or not, PLEASE
COMPLETE, DATE, AND SIGN THE ENCLOSED PROXY CARD and mail it in the envelope
provided. If you attend the meeting and prefer to vote in person, you may do so
even if you have previously returned your proxy card.
If you wish to attend the annual meeting, you will need to present your
admission ticket at the door. Your admission ticket and directions to the annual
meeting are printed on the back cover of this proxy statement.
Sincerely yours,
/s/ Robert F. Bernstock
Robert F. Bernstock
President and Chief Executive
Officer
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Questions and Answers About the Annual Meeting.............. 1
Election of Directors (Proxy Item No. 1).................... 2
Structure of the Board................................. 2
Board Meetings and Committees.......................... 4
Compensation of Directors.............................. 5
Ownership of Vlasic Common Stock............................ 6
Ownership by Directors and Executive Officers.......... 6
Ownership by Others.................................... 7
Principal Shareowners.................................. 7
Directors and Executive Officers Stock Ownership
Reports.............................................. 8
Compensation of Executive Officers.......................... 8
Report of the Compensation and Organization
Committee............................................ 8
Summary of Executive Compensation...................... 10
Summary Compensation Table............................. 10
Option Grants in Last Fiscal Year...................... 11
Aggregated Option Exercises in Last Fiscal Year and
Fiscal Year-End Option Values........................ 11
Stock Price Performance Graph.......................... 12
Pension Plans.......................................... 13
Termination Agreements................................. 13
Incentive Plan Proposals -- Background Information.......... 14
Approval of 1998 Long-Term Incentive Plan (Proxy Item No.
2)........................................................ 14
Approval of Annual Incentive Plan (Proxy Item No. 3)........ 17
Ratification of Independent Accountants (Proxy Item No.
4)........................................................ 19
Submission of Shareowner proposals.......................... 20
Other Matters............................................... 20
Appendix A -- Vlasic Foods International Inc. 1998
Long-Term Incentive Plan............................. A-1
Appendix B -- Vlasic Foods International Inc. Annual
Incentive Plan....................................... B-1
</TABLE>
<PAGE> 4
PROXY STATEMENT FOR THE VLASIC FOODS INTERNATIONAL INC.
1999 ANNUAL MEETING OF SHAREOWNERS
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
WHY DID YOU SEND ME THIS PROXY STATEMENT?
We sent you this proxy statement and the enclosed proxy card because Vlasic
Foods International's ("Vlasic's") Board of Directors is soliciting your proxy
to vote your shares at the 1999 Annual Meeting of Shareowners. This proxy
statement includes information about the issues to be voted upon at the meeting.
This proxy statement is being mailed to shareowners on or about October 15,
1999, to all shareowners of record at the close of business on October 8, 1999.
On this record date, there were 45,502,234 shares of Vlasic common stock
outstanding and entitled to vote.
HOW MANY VOTES DO I HAVE?
Each share of Vlasic common stock that you own entitles you to one vote.
HOW DO I VOTE?
You can vote by completing, signing, dating, and returning the enclosed proxy
card. When a proxy is returned properly dated and signed, the shares represented
thereby will be voted by the person named as the Directors' proxy in accordance
with each shareowner's directions. Proxies will also be considered to be
confidential voting instructions to the applicable Trustee with respect to
shares held in accounts under the Vlasic Foods International Savings and 401(k)
Plan for Salaried Employees, the Vlasic Foods International Savings and 401(k)
Plan for Hourly-Paid Employees or one of the Campbell Soup Company Savings and
401(k) Plans (collectively "Plans"). If participants in these Plans are also
shareowners of record under the same account information, they will receive a
single proxy which represents all shares. If the account information is
different, then the participants will receive separate proxies.
Shareowners are urged to specify their choices by marking the appropriate boxes
on the enclosed proxy card. If a proxy card is dated, signed and returned
without specifying choices, the shares will be voted as recommended by the
Directors (or, in the case of participants in the Plans referred to above, may
be voted at the discretion of the applicable Trustee).
Proxies marked as abstaining (including proxies containing broker non-votes) on
any matter to be acted upon by shareowners will be treated as present at the
meeting for purposes of determining a quorum but will not be counted as votes
cast on such matters.
A shareowner giving a proxy may revoke it by notifying the Corporate Secretary
in writing any time before it is voted. If a shareowner wishes to give a proxy
to someone other than the Directors' proxy, all three names appearing on the
enclosed proxy may be crossed out and the name of another person inserted. The
signed proxy card must be presented at the meeting by the person representing
the shareowner.
You may come to the annual meeting and cast your vote there. Please bring the
admission ticket that can be found on the back cover of this proxy statement. If
your shares are held in the name of your broker, bank, or other nominee and you
wish to vote at the annual meeting, you must bring an account statement or
letter from the nominee indicating that you were the beneficial owner of the
shares on October 8, 1999, the record date for voting.
This solicitation of proxies is made on behalf of the Board of Directors of
Vlasic with authorization of the Board, and Vlasic will bear the cost. Copies of
proxy solicitation material will be mailed to shareowners, and employees of
Vlasic may communicate with shareowners to solicit their proxies. Brokers, banks
and others holding stock in their names, or in names of nominees, may request
and forward copies of the proxy solicitation material to beneficial
1
<PAGE> 5
owners and seek authority for execution of proxies, and Vlasic will reimburse
them for their expenses in so doing at the rates approved by the New York Stock
Exchange.
WHO WILL COUNT THE VOTE?
Representatives of First Chicago Trust Company, a division of EquiServe and the
Corporate Secretary will tabulate the votes and serve as judges of election.
HOW CAN I GAIN ADMITTANCE TO THE ANNUAL MEETING?
If you plan to attend the annual meeting, you will need to bring your admission
ticket that is printed on the back cover of this proxy statement. Shareowners
who do not have admission tickets will be admitted upon verification of
ownership at the door. Directions to the annual meeting are printed on the back
cover of this proxy statement.
ELECTION OF DIRECTORS (PROXY ITEM NO. 1)
The Board of Directors, pursuant to the By-Laws, has determined that the number
of directors of Vlasic shall be seven. The directors are to be elected to hold
office until the next Annual Meeting of the Shareowners and until their
successors are elected and shall have qualified. Directors are elected by a
majority of the votes cast. Except as otherwise specified in the proxy, proxies
will be voted for election of the nominees named below.
If a nominee becomes unable or unwilling to serve, proxies will be voted for
election of such person as shall be designated by the Board of Directors;
however, the management knows of no reason why any nominee should be unable or
unwilling to serve.
STRUCTURE OF THE BOARD
The following table sets forth information concerning the nominees as of October
8, 1999:
<TABLE>
<S> <C>
ROBERT F. BERNSTOCK PRINCIPAL OCCUPATION: PRESIDENT AND CHIEF EXECUTIVE OFFICER,
VLASIC FOODS INTERNATIONAL INC.
[ROBERT BERNSTOCK FIRST BECAME DIRECTOR: 1998
PHOTO] AGE: 48
Mr. Bernstock has been President and Chief Executive Officer
of Vlasic since March 1998. Mr. Bernstock served as
Executive Vice President of Campbell Soup Company and
President of its Specialty Foods Division since July 1997.
Prior to that, he was appointed President -- U.S. Grocery
Division and Senior Vice President of Campbell Soup Company
in March 1996. Mr. Bernstock served as
President -- International Grocery Division from August 1994
to February 1996. He served as President -- International
Soup Division from June 1993 to July 1994 and was Vice
President of Campbell Soup Company. Mr. Bernstock is a
director of the National Food Processors Association, the
Rowan University College of Business Administration, the
Philadelphia Tennis Patrons and Grocery Manufacturers of
America. He is also a Trustee Emeritus for the Campbell Soup
Foundation, Conference Board of Canada and Canada's National
Institute of Nutrition.
</TABLE>
2
<PAGE> 6
<TABLE>
<S> <C>
ROBERT T. BLAKELY PRINCIPAL OCCUPATION: EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER, TENNECO INC.
[Blakely Photo] FIRST BECAME DIRECTOR: 1998
AGE: 57
Mr. Blakely has been an Executive Vice President and Chief
Financial Officer of Tenneco Inc. since 1981. He is a
director of the New York City Ballet, the Manhattan and
Bronx Council of the Boy Scouts of America and Solutia Inc.
He is also a trustee of Cornell University and a member of
the Financial Accounting Standards Board Advisory Council.
MORRIS A. COHEN PRINCIPAL OCCUPATION: MATSUSHITA PROFESSOR, THE WHARTON
SCHOOL OF THE UNIVERSITY OF PENNSYLVANIA
[Cohen Photo] FIRST BECAME DIRECTOR: 1998
AGE: 51
Mr. Cohen is the Matsushita Professor of Manufacturing and
Logistics at the Wharton School of the University of
Pennsylvania, where he also holds a secondary appointment in
the Department of Systems Engineering of the School of
Engineering and Applied Science. He has been a Professor at
the Wharton School since 1974. He has been a visiting
faculty member at Stanford University and the Massachusetts
Institute of Technology, and is Co-Director of Wharton's
Fishman-Davidson Center for Service and Operations
Management. He is currently a member of Editorial Advisory
Board of Supply Chain Management Review, the Journal of
Production and Operations Management, and the Journal of
Manufacturing and Service Operations Management. He has also
done consulting work at Applied Materials, Saturn Corp.,
Intel, IBM, Merck, MBN Bank, TIP/GE Capital, Defense
Logistics Agency, Campbell Soup Company, the U.S. Navy and
Teradyne.
TRISTRAM C. COLKET, JR PRINCIPAL OCCUPATION: PRIVATE INVESTOR, TEKLOC ENTERPRISES
FIRST BECAME DIRECTOR: 1999
[COLKET PHOTO] AGE: 61
Mr. Colket has been a private investor since 1967. He served
as Chairman of Cressona Aluminum Company from 1979 to 1996.
He is a director of the following non-profit organizations:
Atlantic Salmon Federation, Children's Hospital of
Philadelphia, Children's Hospital Foundation and the
Quebec-Labrador Foundation. He is a trustee of the Colket
Foundation.
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
LAWRENCE C. KARLSON PRINCIPAL OCCUPATION: CHAIRMAN, AMERISOURCE HEALTH
CORPORATION
[KARLSON PHOTO] FIRST BECAME DIRECTOR: 1998
AGE 56
Mr. Karlson is Chairman of Amerisource Health Corporation.
He also provides consulting services to a wide variety of
businesses. Prior to 1993, he served as Chairman of
Spectra-Physics AB, formerly Pharos AB, where he had also
served as President and CEO. Mr. Karlson is a director of
AmeriSource Health Corporation, CDI Corporation and
Spectra-Physics Lasers Inc.
DONALD J. KELLER PRINCIPAL OCCUPATION: CHAIRMAN, VLASIC FOODS INTERNATIONAL
INC.
[KELLER PHOTO] FIRST BECAME DIRECTOR: 1998
AGE: 67
Mr. Keller is Chairman of Vlasic Foods International Inc. He
served as Chairman for Prestone Products Corporation from
1995 -- 1997 and as Chairman of B. Manischewitz Co. from
1993 -- 1998. His experience includes WestPoint Pepperell
Inc. where he served as President and Chief Operating
Officer and General Foods Corporation, where he was an
Executive Vice President and Director. Mr. Keller is a
director of Dan River Inc. and Air Express International.
SHAUN F. O'MALLEY PRINCIPAL OCCUPATION: CHAIRMAN EMERITUS, PRICE WATERHOUSE
LLP
[O'MALLEY PHOTO] FIRST BECAME DIRECTOR: 1998
AGE: 64
Mr. O'Malley retired from Price Waterhouse in 1995. He
served at Price Waterhouse for many years, most recently as
Chairman and Senior Partner. Mr. O'Malley is a director of
the Wharton School at the University of Pennsylvania, Horace
Mann Educators Corporation, Coty, Inc. and the Curtis
Institute of Music.
</TABLE>
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THESE NOMINEES
BOARD MEETINGS AND COMMITTEES
Our Board of Directors met five times in fiscal 1999. In addition to meetings
of the Board, directors attended meetings of Board committees. Each director
attended 75% or more of the total meetings of the Board of Directors and the
Board Committees on which the director served. A description of each committee
and its membership as of the record date follows.
4
<PAGE> 8
Audit Committee
Members: Mr. Blakely, Chair; Mr. Cohen; Mr. Karlson
The Audit Committee, composed of non-employee directors, met four times in
fiscal 1999. The Committee's mission is to oversee the adequacy of Vlasic's
internal control systems and the accuracy and integrity of its financial
reporting. In addition, the Audit Committee sets a positive "tone at the top"
which fosters a company-wide attitude of integrity and control consciousness.
The Committee recommends the appointment of Vlasic's independent accountants and
confers independently with the internal auditor and the independent accountants.
The Committee reviews non-audit services to be performed by the independent
accountants and determines appropriate fees for both audit and non-audit
services.
Compensation and Organization Committee
Members: Mr. O'Malley, Chair; Mr. Colket; Mr. Keller
The Compensation and Organization Committee, composed of non-employee directors,
met three times in fiscal 1999. The mission of the Compensation and Organization
Committee is to provide an independent review of Vlasic's organization, its
performance objectives, and management's compensation. The Chairman of the
Committee and the Chairman of the Board share responsibility for the Chief
Executive Officer's evaluation process.
Governance Committee
Members: Mr. Keller, Chair; Mr. Blakely; Mr. O'Malley
The Governance Committee is composed of non-employee directors. The mission of
the Governance Committee is to assure the independence of the Board as it
exercises its corporate governance and oversight roles. The Governance Committee
did not hold any meetings during fiscal 1999.
The Governance Committee seeks potential nominees for Board membership in
various ways and will consider suggestions submitted by shareowners. Such
suggestions, together with appropriate biographical information, should be
submitted to the Corporate Secretary of Vlasic.
COMPENSATION OF DIRECTORS
A Director who is a Vlasic employee does not receive payment for his services as
a director.
The following table displays all components of compensation for non-employee
directors:
<TABLE>
<S> <C>
- ----------------------------------------------------------------------------------
FORM OF COMPENSATION AMOUNT OF COMPENSATION
- ----------------------------------------------------------------------------------
Annual Option Grant* $45,000
- ----------------------------------------------------------------------------------
Board Attendance Fee**
(per meeting) $ 3,000
- ----------------------------------------------------------------------------------
Committee Attendance Fee**
(per meeting) $ 1,500
- ----------------------------------------------------------------------------------
Committee Chair
(per meeting) $ 500
- ----------------------------------------------------------------------------------
Other Meetings Requiring Attendance**
(per meeting) $ 1,500
- ----------------------------------------------------------------------------------
</TABLE>
* On March 30 of each year, non-employee directors are granted stock options
that have a Black-Scholes value of approximately $45,000 with the exercise
price based on the fair market value of Vlasic Stock on March 30 or the next
business day, if March 30 is not a business day, which will vest cumulatively
over three years at the rate of 30%, 60% and 100%, respectively, on the first
three anniversaries (new directors will receive a pro rated amount of options
based on date of election). The stock options have a term of ten years.
** $500 per conference call meeting attended.
5
<PAGE> 9
On March 30, 1999, each non-employee director, except Mr. Keller, received a
grant of 5,240 options. Mr. Keller received a grant of 17,470 options. Mr.
Colket received a pro rated grant of 3,930 options after he became a director in
July 1999.
Non-employee directors do not have a retirement plan nor do they participate in
Vlasic's benefit plans. They are, however, covered under Vlasic's business
travel accident insurance policy while traveling on the Company's business.
Directors have the option to elect to defer all or a portion of any cash
compensation. Directors are reimbursed for actual travel costs.
OWNERSHIP OF VLASIC COMMON STOCK
OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS
The following table sets forth information regarding beneficial ownership as of
October 8, 1999, of the Vlasic Common Stock of each Director, Vlasic's five most
highly compensated Executive Officers and the Directors and Executive Officers
as a group and also sets forth stock units credited to the individual's deferred
compensation account. The account reflects the election of the individuals to
defer previously earned compensation into Vlasic stock units. The individuals
are fully at risk as to the price of Vlasic stock in their deferred stock
accounts. Additional stock units are credited to the accounts to reflect accrual
of dividends, if any. The stock units do not carry any voting rights.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
AGGREGATE NUMBER TOTAL NUMBER OF
OF VLASIC SHARES AND
SHARES BENEFICIALLY STOCK DEFERRED
NAME OWNED(A) DEFERRED STOCK
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Robert F. Bernstock 430,181 203,946 634,127
- ---------------------------------------------------------------------------------------------------------------------
Robert T. Blakely 2,130 907 3,037
- ---------------------------------------------------------------------------------------------------------------------
Morris A. Cohen 1,147 1,478 2,625
- ---------------------------------------------------------------------------------------------------------------------
Tristram C. Colket, Jr. 1,270,209(b) 0 1,270,209
- ---------------------------------------------------------------------------------------------------------------------
Lawrence C. Karlson 41,275 2,142 43,417
- ---------------------------------------------------------------------------------------------------------------------
Donald J. Keller 40,500 0 40,500
- ---------------------------------------------------------------------------------------------------------------------
Shaun F. O'Malley 1,530 1,530 3,060
- ---------------------------------------------------------------------------------------------------------------------
Norma B. Carter 60,968 21,492 82,460
- ---------------------------------------------------------------------------------------------------------------------
Mitchell P. Goldstein 35,101 11,713 46,814
- ---------------------------------------------------------------------------------------------------------------------
Carlos Oliva Funes(c) 87,077 0 87,077
- ---------------------------------------------------------------------------------------------------------------------
Rolf B. Richter(d) 98,373 219 98,592
- ---------------------------------------------------------------------------------------------------------------------
All directors and executive officers (7) as a group 2,195,761 243,619 2,439,380
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
(a) The shares shown include 722,249 shares of Common Stock with respect to
which Executive Officers have a right, as of December 8, 1999, to acquire
beneficial ownership because of vested stock options. All persons listed own
less than 1% of Vlasic's outstanding shares of Common Stock, except: Mr.
Bernstock who beneficially owns 1.4% and Mr. Colket who owns 2.8% of the
outstanding shares of Common Stock. All Directors and Executive Officers (7
persons) as a group own 5.4% of outstanding shares. This includes shares
owned directly or indirectly.
(b) The shares shown for Mr. Colket include 160 shares owned by his wife, 15,200
shares owned as trustee for a charitable trust and 124,800 shares owned by
his wife as trustee for a trust for their children.
(c) Carlos Oliva Funes left the Company on July 30, 1999 pursuant to the sale by
Vlasic of the Swift-Armour Argentine beef business.
(d) Rolf B. Richter resigned as an Executive Officer of the Company on August 1,
1999.
6
<PAGE> 10
OWNERSHIP BY OTHERS
At the close of business on October 8, 1999, the record date for the meeting,
there were outstanding and entitled to vote 45,502,234 shares of Vlasic Common
Stock, each having one vote. The holders of a majority of the shares outstanding
and entitled to vote, present in person or represented by proxy, constitute a
quorum for the meeting.
PRINCIPAL SHAREOWNERS
Information concerning the owners of more than 5% of the outstanding Vlasic
Common Stock as of October 8, 1999, the record date for the meeting follows:
<TABLE>
<CAPTION>
AMOUNT/NATURE OF PERCENT OF
BENEFICIAL OUTSTANDING
NAME/ADDRESS OWNERSHIP STOCK
------------ -------------------- -----------------
<S> <C> <C>
Bennett Dorrance 5,234,967(1) 11.5%
DMB Associates,
7600 E. Doubletree Ranch Road
Suite 300
Scottsdale, AZ 85258
Mary Alice Malone 5,411,843(2) 12.0%
Iron Spring Farm
R.D. #3,
Coatesville, PA 19320
Dorrance H. Hamilton, Charles H. Mott and John A. van 5,960,689(4) 13.1%
Beuren Voting Trustees under the Major Stockholders'
Voting Trust dated as of June 2, 1990 ("Voting Trust")
and related persons,
P. O. Box 4098
Middletown, RI 02842
Note (3)
</TABLE>
(1) Bennett Dorrance is a grandson of Dr. John T. Dorrance and the brother of
Mary Alice Malone. Share ownership does not include 98,242 shares held as
one of the Trustees for trusts for, or as guardian of, his children, as to
which shares he disclaims beneficial ownership.
(2) Mary Alice Malone is a granddaughter of Dr. John T. Dorrance. Share
ownership shown includes 2,000,000 shares held as trustee of her Grantor
Retained Annuity Trusts established in 1999. Share ownership shown does not
include 10,232 shares held as one of the trustees of trusts under the Will
of her father, John T. Dorrance, Jr., for the benefit of her children, and
as to which shares she disclaims beneficial ownership. Does not include
2,911 shares held by her cousin as trustee of a trust for her children, as
to which shares she disclaims beneficial ownership.
(3) The June 2, 1990 Voting Trust was formed by certain descendants (and
spouses, fiduciaries and a related foundation) of the late Dr. John T.
Dorrance. The Voting Trust initially covered shares of Campbell Soup
Company. By the terms of the Voting Trust, shares of Vlasic received by the
Trustees pursuant to the spin-off became subject to the Voting Trust. The
participants have indicated that they formed the Voting Trust as a vehicle
for acting together as to matters which may arise affecting Campbell's
business, in order to attain their objective of maximizing the value of
their shares. It is expected that the Voting Trust will act in the same
capacity with respect to Vlasic.
The Trustees act for participants in communications with the Vlasic Board
of Directors. Participants believe the Voting Trust may also facilitate
communications between the Vlasic Board and the participants. Under the
Voting Trust, all shares held by the trust will be voted by the Trustees
whose decision must be approved by at least two Trustees if there are three
Trustees then acting. In the event of a disagreement among the Trustees
designated by the family groups participating in the trust, the shares of
the minority may be withdrawn. The Voting Trust continues for ten years from
June 2, 1990, unless it is sooner terminated or extended.
(4) Includes 5,906,290 shares (13.0% of the outstanding shares) held by the
Voting Trustees with sole voting power and 54,399 shares held by
participants outside the Voting Trust or by persons related to them, for a
total
7
<PAGE> 11
of 5,960,689 shares (13.1% of the outstanding shares). Includes (i)
2,836,286 shares (6.2% of the outstanding shares) with shared dispositive
power held by three trusts of which Mrs. Hamilton is a trustee, 200 Eagle
Road, Suite 316, Wayne, PA 19087; and (ii) 675,678 shares with sole
dispositive power held by Hope H. van Beuren and 804,414 shares with sole
dispositive power held by her husband, John A. van Beuren, P.O. Box 4098,
Middletown, RI 02842. John and Hope van Beuren also hold 1,248,142 shares
with shared dispositive power, including shares held by a family
partnership. Participants in the Voting Trust have certain rights to
withdraw shares deposited with the Voting Trustees including the right to
withdraw these shares prior to any annual or special meeting of Vlasic
shareowners. Dispositive power as used above means the power to direct the
sale of shares; in some cases it does not include the power to direct how
the proceeds of sale can be used.
The foregoing information relating to shareowners is based upon Vlasic stock
records, Form 13D and Form 13G filings, and data supplied to Vlasic by the
shareowners as of the record date for the Annual Meeting.
DIRECTORS AND EXECUTIVE OFFICERS STOCK OWNERSHIP REPORTS
The federal securities laws require that Vlasic's Directors and Executive
Officers, and any person who owns more than ten percent of Vlasic's Common
Stock, file with the Securities and Exchange Commission and the New York Stock
Exchange initial reports of ownership and reports of changes in ownership of any
securities of Vlasic.
To Vlasic's knowledge, based solely on review of the copies of such reports
furnished to Vlasic and written representations that no other reports were
required, during the fiscal year ended August 1, 1999, all of Vlasic's Executive
Officers, Directors, and greater-than-ten-percent beneficial owners made all
required filings except Mr. O'Malley, who amended one Form 4 filing to include
30 shares owned by his wife that he had not included.
COMPENSATION OF EXECUTIVE OFFICERS
REPORT OF THE COMPENSATION AND ORGANIZATION COMMITTEE
The Compensation and Organization Committee of the Board of Directors (the
"Committee") is comprised of three independent non-employee directors. The
Committee provides an independent review of the Company's organization, its
performance objectives and management's compensation.
Policies and Objectives
Vlasic's executive compensation is designed to provide compensation competitive
with other similar companies; to link executive compensation with the returns
realized by shareowners; and to ensure the continued growth of the Company by
attracting and retaining talented executives. The key components of Vlasic's
executive compensation program are base salary, annual bonus, and long-term
incentive. Vlasic's intention is to maintain base salaries for the executives at
approximately the 50th percentile of a compensation peer group composed of 31
consumer packaged goods companies whose size have been comparably regressed (the
"compensation peer group"). Annual bonus and long-term incentive are targeted at
about the 75th percentile of the same comparably regressed compensation peer
group. The executive compensation program maintains an "at risk" focus, with the
percentage of the total compensation from short and long term incentives for
executives increasing with their level of responsibility within the
organization.
Annual Incentive Plan
The annual incentive plan for eligible management level employees provides for
bonuses to be determined shortly after the end of the fiscal year. For the 1999
fiscal year, annual bonus awards depended principally upon achieving corporate
earnings per share ("EPS") and divisional earnings before interest and taxes
("EBIT") targets set prior to the beginning of the year. In addition, subject to
certain exceptions, if Vlasic's rate of annual growth of its EPS placed it in
the top quartile of all companies in the S&P 500 Food Group and the S&P 400
Mid-Cap Food Group (the "performance peer group"), each bonus-eligible employee
would have received an additional 50% of his or
8
<PAGE> 12
her bonus target. The Committee may also consider adjusting the target awards
based on the employee's personal performance as measured against his or her
particular responsibilities. Since financial performance did not meet the
minimum thresholds for fiscal 1999, no bonuses were paid for fiscal 1999.
Long-Term Incentive Plan
Vlasic's long-term incentive plan currently utilizes stock option grants for
eligible management level employees. All options have a ten-year term and an
exercise price equal to or greater than the fair market value of a share of
Company common stock on the grant date. During fiscal 1999, no options were
granted to the top five most highly compensated executive officers except to Mr.
Goldstein who received a special grant of options in October 1998 as a result of
his promotion to Chief Financial Officer.
In order to compensate for long-term incentive awards forfeited when leaving
Campbell Soup Company after the spin-off, the options granted in April 1998 to
the top 15 key executives were triple the size of a target grant (the "Triple
Grant") and vest cumulatively over three years at the rate of 30%, 60% and 100%,
respectively on the first three anniversaries beginning in April 2000. All
options except for the Triple Grant vest approximately in thirds on each of the
first three anniversaries of the stock option grant date.
Compensation and Evaluation of Chief Executive Officer
The determination of the Chief Executive Officer's salary, bonus and annual
grant of stock options followed all of the policies set forth above for all
other executives.
Robert F. Bernstock served as President and Chief Executive Officer of Vlasic
during fiscal 1999. His annual salary was set at $583,500 in October 1998, after
consideration of independent survey data.
The Chairman of the Board and the Chairman of the Committee share responsibility
for the evaluation of Mr. Bernstock. The process is started by having Mr.
Bernstock prepare a self evaluation summarizing his accomplishments relative to
each of his accountabilities including financial results; strategic planning;
organizational planning; communications/external relations; board relations; and
leadership/human resources. The Chairman of the Board and the Chairman of the
Committee review Mr. Bernstock's self evaluation, prepare a final evaluation and
present it to the Committee. The Committee recommends the CEO compensation
action to the Board. Without the CEO present, the Board reviews and acts upon
the written evaluation and the Committee's recommendation for the CEO
compensation.
The Chairman of the Board then meets with Mr. Bernstock to discuss the
evaluation and the compensation action.
Policy on Deductibility of Compensation
Section 162(m) of the Internal Revenue Code generally disallows a deduction for
annual compensation to a public company's chief executive officer or any of the
four other most highly compensated officers in excess of $1,000,000, unless such
compensation is "performance-based," as defined under Section 162(m). It is the
Committee's present intention that executive compensation arrangements be
structured so as to be entirely deductible. The Annual Incentive and Long-Term
Incentive Plans are designed so that amounts received pursuant to such plans
satisfy the requirements for "performance-based" compensation under Section
162(m).
COMPENSATION AND ORGANIZATION COMMITTEE
Shaun F. O'Malley, Chairman
Tristram C. Colket, Jr.
Donald J. Keller
COMPENSATION AND ORGANIZATION COMMITTEE INTERLOCKS AND
INSIDER PARTICIPATION
None.
9
<PAGE> 13
SUMMARY OF EXECUTIVE COMPENSATION
The following table sets forth the compensation received by Vlasic's
President and Chief Executive Officer and the four other most highly compensated
Executive Officers for fiscal 1997, 1998 and 1999. Amounts shown include
compensation paid or awarded to the named Executive Officers for periods prior
to the spin-off.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG-TERM AWARDS
--------------------------------------- --------------------------------
RESTRICTED SECURITIES
STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL FISCAL AWARDS OPTIONS COMPENSATION
POSITION YEAR BASE SALARY BONUS (1) (#)(2) ($)(3)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Robert F. Bernstock 1999 $570,437 $ 0 $ 0 0 $14,261
President and 1998 $446,667 $347,489 $ 0 450,000 $23,825
Chief Executive Officer 1997 $336,875 $282,093 $1,880,177 100,000 $18,352
- -------------------------------------------------------------------------------------------------------------------------------
Carlos Oliva Funes(4) 1999 $453,100 $ 0 $ 0 0 $ 0
Vice President and 1998 $443,433 $129,720 $ 0 60,000 $22,172
President-Swift-Armour 1997 $430,500 $ 95,696 $ 468,988 10,700 $30,000
- -------------------------------------------------------------------------------------------------------------------------------
Mitchell P. Goldstein 1999 $215,000 $ 0 $ 0 25,000 $ 5,375
Vice President and 1998 $190,000 $ 73,665 $ 13,779 50,000 $ 7,910
Chief Financial Officer 1997 $174,375 $ 57,097 $ 158,482 4,950 $ 6,944
- -------------------------------------------------------------------------------------------------------------------------------
Rolf B. Richter(5) 1999 $190,625 $ 0 $ 0 0 $ 4,766
Vice President and 1998 $182,593 $ 82,310 $ 16,504 50,000 $ 7,947
President -- Europe 1997 $168,920 $ 87,599 $ 201,856 5,625 $ 0
- -------------------------------------------------------------------------------------------------------------------------------
Norma B. Carter 1999 $187,000 $ 0 $ 0 0 $ 4,675
Vice President, 1998 $170,000 $121,849 $ 22,006 65,000 $ 8,755
General Counsel and 1997 $151,667 $ 75,172 $ 231,488 6,750 $ 6,805
Corporate Secretary
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Restricted Stock Awards for 1997 for the fiscal 1998 to 2000 performance
period were forfeited at the time of the spin-off from Campbell. In order to
compensate for this, the options granted in April 1998 to the top 15 key
executives were triple the size of a target grant.
(2) The stock option grants shown for 1998 represent options on Vlasic Common
Stock that were granted under Vlasic's Long-Term Incentive Plan approved by
the Board of Directors on March 9, 1998. The 1998 Long-Term Incentive Plan
is subject to shareowner approval and is described further in Proxy Item No.
2 beginning on page 14. The stock option grants shown for 1997 represent
options on Campbell common stock. Under the Benefits Sharing Agreement
between Campbell Soup Company and Vlasic Foods International Inc. these
Campbell stock options were converted in connection with the spin-off into
replacement options on Vlasic Common Stock, with the award preserving the
economic value of the original Campbell grant at the time of the spin-off.
As a result, Mr. Bernstock's stock options for 1997 were converted into
253,357 Vlasic options, Mr. Oliva Funes' were converted into 27,109 Vlasic
options, Mr. Goldstein's were converted into 12,541 Vlasic options, Mr.
Richter's were converted into 14,251 Vlasic options, and Ms. Carter's were
converted into 17,102 Vlasic options.
(3) "All Other Compensation" consists of Campbell/Vlasic contributions or
allocations to savings plans (tax-qualified and supplemental) or, in the
case of Mr. Oliva Funes, consulting fees for services rendered to other
Campbell businesses in Latin America prior to the spin-off.
(4) Carlos Oliva Funes left the Company on July 30, 1999 pursuant to the sale by
Vlasic of the Swift-Armour Argentine beef business.
(5) Rolf B. Richter resigned as an Executive Officer of the Company on August 1,
1999. Pursuant to an agreement, his salary will continue for 16 months
totaling $257,000, provided he complies with the terms and conditions of the
agreement.
10
<PAGE> 14
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
GRANT DATE
INDIVIDUAL GRANTS VALUE
- -----------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO
OPTIONS EMPLOYEES IN EXERCISE OR GRANT DATE
GRANTED FISCAL YEAR BASE PRICE EXPIRATION PRESENT VALUE
NAME (#)(1) (2) ($/SH) DATE ($)(3)
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
Robert F. Bernstock 0 0.0% -- -- $ 0
- -----------------------------------
Carlos Oliva Funes 0 0.0% -- -- $ 0
- -----------------------------------
Mitchell P. Goldstein 25,000(4) 22.1% $17.8438 10/23/08 $218,000
- -----------------------------------
Rolf B. Richter 0 0.0% -- -- $ 0
- -----------------------------------
Norma B. Carter 0 0.0% -- -- $ 0
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
(1) No options were granted to these executive officers for fiscal 1999, except
Mr. Goldstein received a special grant of options in October 1998 as a
result of his promotion to Chief Financial Officer.
(2) Percentages are based upon the total number of options on Vlasic Common
Stock granted during the fiscal year under the Vlasic Foods International
Long-Term Incentive Plan.
(3) In accordance with the rules of the Securities and Exchange Commission (the
"Commission"), the Black-Scholes option pricing model was chosen to estimate
the grant date present value of the options set forth in this table. The use
of this model should not be construed as an endorsement of its accuracy at
valuing options. All stock option pricing models require a prediction about
the future movement of stock price. The following assumptions were made for
the purposes of calculating the grant date present value: option term of 6
years, volatility of 44.0%, 0% dividend yield, and risk free interest of
4.381% (6-year Treasury note rate). The real value of options in this table
depends upon the actual performance of Vlasic stock during the applicable
period and upon when they are exercised.
(4) These options have a ten-year vesting term and vest cumulatively over three
years at the rate of 30%, 60% and 100%, respectively, beginning in April
2000.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
NAME OPTIONS IN-THE-MONEY OPTIONS
AT FY-END (#) AT FY-END ($)(1)
---------------------------- ----------------------------
SHARES VALUE
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
EXERCISE (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert F. Bernstock 0 $0 345,984/897,327 $0/$0
- -------------------------------------------------------------------------------------------------------------------------
Carlos Oliva Funes 0 $0 97,012/167,856 $0/$0
- -------------------------------------------------------------------------------------------------------------------------
Mitchell P. Goldstein 0 $0 29,235/109,252 $0/$0
- -------------------------------------------------------------------------------------------------------------------------
Rolf B. Richter 0 $0 98,044/153,745 $0/$0
- -------------------------------------------------------------------------------------------------------------------------
Norma B. Carter 0 $0 43,736/115,578 $0/$0
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) These year-end values represent the difference between (a) the fair market
value of the company common stock underlying the options on July 30, 1999
(Vlasic market price of $7.4375) and (b) the exercise prices of the options.
"In-the-money" means that the fair market value of the underlying stock is
greater than the option's exercise price on the valuation date.
11
<PAGE> 15
STOCK PRICE PERFORMANCE GRAPH
The following graph compares the cumulative total return to shareowners on
Vlasic's Common Stock with the cumulative total return on each of three indices:
the Standard & Poor's 500 Stock Index (S&P 500), the Standard & Poor's 500 Food
Index (S&P Food) and the Standard & Poor's 400 Mid-Cap Food Group (S&P Midcap
Food). We have chosen to compare Vlasic's performance with that of these three
indices to show the performance of the Food Group within the S&P 500 compared to
the S&P 500 as well as the S&P Midcap Food Group of which Vlasic is a component.
The graph assumes that $100 was invested on March 10, 1998, in each of Vlasic
stock, the S&P 500, the S&P Food Group and the S&P Midcap Food Group and that
all dividends were reinvested.
VLASIC RETURN TO SHAREOWNERS
COMPARISON WITH MAJOR MARKET INDICES
TOTAL RETURN TO STOCKHOLDERS
[VLASIC RETURN TO STOCKHOLDERS GRAPH]
<TABLE>
<CAPTION>
VLASIC STOCK S&P 500 S&P FOOD S&P MIDCAP FOOD
------------ ------- -------- ---------------
<S> <C> <C> <C> <C>
10-Mar-98 100.0 100.0 100.0 100.0
30-Apr-98 101.4 104.6 100.2 93.3
31-Jul-98 77.2 105.9 94.3 91.0
30-Oct-98 82.1 104.2 100.8 88.8
29-Jan-99 89.0 121.6 99.2 86.1
30-Apr-99 36.0 127.2 89.1 81.2
30-Jul-99 32.7 127.0 89.9 81.3
</TABLE>
12
<PAGE> 16
PENSION PLANS
The following table illustrates the approximate annual pension that may become
payable to an employee in the higher salary classifications under Vlasic's
regular and supplementary pension plans.
<TABLE>
<CAPTION>
AVERAGE
COMPENSATION
IN HIGHEST ESTIMATED ANNUAL PENSIONS
5 YEARS OF YEARS OF SERVICE
LAST 10 YEARS ----------------------------------------------------
OF EMPLOYMENT 20 25 30 35 40
- ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$200,000...... $ 56,694 $ 70,868 $ 85,041 $ 90,041 $ 95,041
$300,000...... $ 86,694 $108,368 $130,041 $137,541 $145,041
$400,000...... $116,694 $145,868 $175,041 $185,041 $195,041
$500,000...... $146,694 $183,368 $220,041 $232,541 $245,041
$600,000...... $176,694 $220,868 $265,041 $280,041 $295,041
$700,000...... $206,694 $258,368 $310,041 $327,541 $345,041
$800,000...... $236,694 $295,868 $355,041 $375,041 $395,041
$900,000...... $266,694 $333,368 $400,041 $422,541 $445,041
$1,000,000.... $296,694 $370,868 $445,041 $470,041 $495,041
</TABLE>
Compensation covered for executive officers named in the table on page 10 is the
same as the total salary and bonus shown in that table. These estimated amounts
assume retirement at age 65 (normal retirement age) with a straight-life annuity
without reduction for a survivor annuity or for optional benefits. They are not
subject to deduction for Social Security benefits or other offsets. The years of
service set forth below for Mr. Bernstock include additional years of service
pursuant to a Mid-Career Hire Pension Agreement designed to replace a similar
plan at Campbell Soup Company and include years of service while an employee of
Campbell. As of the end of fiscal 1999, the full years of accrued service under
the pension plans for Mr. Bernstock was 22. As of the end of fiscal 1999, the
full years of accrued service under the pension plan for the following three
individuals other than Mr. Bernstock named in the compensation table on page 10
were as follows: Ms. Carter, 18; Mr. Richter, 6; and Mr. Goldstein, 4. Carlos
Oliva Funes did not participate in the Vlasic pension plan.
TERMINATION ARRANGEMENTS
Vlasic has entered into a Severance Protection Agreement (the "Agreement") with
Mr. Bernstock. The Agreement provides severance pay and continuation of certain
benefits should a Change in Control occur. The independent members of the Board
of Directors unanimously approved entry into the Agreement. In order to receive
benefits under the Agreement, Mr. Bernstock's employment must be terminated: (a)
involuntarily by Vlasic, without cause, whether actual or "constructive," within
two years following a Change in Control; or (b) by Mr. Bernstock within a thirty
day "window period" beginning one year after a Change in Control.
Generally, a "Change in Control" will be deemed to have occurred in any of the
following circumstances:
(i) the acquisition of 25% or more of the outstanding voting stock of
Vlasic by any person or entity, with certain exceptions for John T.
Dorrance family members;
(ii) the persons serving as directors of Vlasic as of July 7, 1998 and
those replacement or additions subsequently approved by a two-thirds
vote of the Board, cease to make up at least two-thirds of the Board;
(iii) a merger, consolidation or share exchange in which the shareowners of
Vlasic prior to the merger wind up owning 80% or less of the
surviving corporation; or
(iv) a complete liquidation or dissolution of Vlasic or disposition of all
or substantially all of the assets of Vlasic.
13
<PAGE> 17
If triggered under the Agreement, severance pay would equal three years' base
salary and bonus. Medical, dental, life and disability benefits would be
provided at the expense of Vlasic for the lesser of (i) 30 months; or (ii) the
number of months remaining until Mr. Bernstock's 65th birthday. Vlasic would pay
in a single payment an amount equal to the value of the benefit Mr. Bernstock
would have accrued under Vlasic's pension plans had he remained in the employ of
Vlasic for an additional 30 months or until his 65th birthday, if earlier. Under
the Agreement, Mr. Bernstock would be eligible for a gross-up payment for excess
taxes, interest or penalties imposed by Section 4999 of the Internal Revenue
Code, and all options outstanding on the date of such Change in Control would
become immediately and fully exercisable.
INCENTIVE PLAN PROPOSALS -- BACKGROUND INFORMATION
The Company's incentive compensation policies for officers include both
long-term incentives and annual incentives. Incentives awarded by the Company
since the spin-off in March 1998 were awarded pursuant to approval of the 1998
Long-Term Incentive Plan and the Annual Incentive Plan (the "Plans") by Vlasic's
Board of Directors. Notwithstanding that the Plans were duly adopted by the
Board of Directors and continue to be in full force and effect since the
spin-off, shareowner approval is required to qualify future compensation to be
paid or awards to be made under the Plans as "performance-based compensation."
"Performance-based compensation" is not subject to the limitation on
deductibility for income tax purposes of certain executive compensation in
excess of $1 million under Section 162(m) of the Internal Revenue Code ("Section
162(m)"). Internal Revenue Service regulations under Section 162(m) require that
such plans be submitted for shareowner approval at the first annual meeting of
shareowners following the first anniversary of the spin-off, in order for
amounts paid or awards made on or after the meeting date under the Plans to
qualify as performance-based compensation.
The Board of Directors believes that it is important for the Company to take all
steps reasonably necessary to ensure that the Company will be able in the future
to take all available tax deductions with respect to long-term incentives and
annual incentives. Therefore, the Board of Directors, on the recommendation of
the Compensation and Organization Committee, adopted the Plans, and recommends
that the shareowners approve the Plans and the performance goals as adopted.
In order for the Plans and goals to be approved by shareowners, each proposal
must receive an affirmative vote of a majority of shares voted on such proposal
at the Annual Meeting.
The following descriptions of the 1998 Long-Term Incentive Plan and the Annual
Incentive Plan are qualified by reference to the full texts thereof, copies of
which are attached to this proxy as Appendix A and Appendix B, respectively.
APPROVAL OF VLASIC FOODS INTERNATIONAL INC. 1998 LONG-TERM INCENTIVE PLAN
(PROXY ITEM NO. 2)
The Board of Directors recommends that shareowners approve the Vlasic Foods
International Inc. 1998 Long-Term Incentive Plan (the "1998 Plan") which was
adopted by the Board on March 9, 1998 and the performance goals described on
page 15.
The 1998 Plan is designed to motivate and reward key employees to attain and
surpass long-range performance goals; and to allow the Company to compete with
other major corporations in securing and retaining key employees.
A summary of the material features of the 1998 Plan appears below. The full text
of the 1998 Plan is set forth in Appendix A and should be referred to for a
complete description of its provisions.
Effective Date and Expiration. The 1998 Plan became effective on March 30, 1998
and will terminate on March 30, 2008. No award may be made under the 1998 Plan
after its expiration date, but exercise and payment of awards made prior thereto
may extend beyond that date.
Administration. The 1998 Plan is administered by the Compensation and
Organization Committee of the Board of Directors, which consists entirely of
outside directors as defined for purposes of Section 162(m) of the Internal
Revenue Code. The Committee has full authority to interpret the 1998 Plan and to
establish rules for its administration. The Committee may, in its discretion,
accelerate the date on which an option or SAR may be
14
<PAGE> 18
exercised, the date of termination of restrictions applicable to a restricted
stock award, or the end of a performance period under a performance unit award,
if the Committee determines that to do so would be in the best interests of the
Company and the participants in the 1998 Plan.
Limitations on Awards. The 1998 Plan provides that over its ten-year term,
stock options (and related SARs) and restricted and unrestricted stock grants
for not more than 5,800,000 shares of Vlasic Common Stock may be issued. Vlasic
Common Stock closed at $6.6875 on October 8, 1999, on the New York Stock
Exchange. A maximum of two million stock options may be issued in one year to
any one participant. A maximum of $5 million for each year in a performance
period or restriction period may be awarded in the form of Restricted Stock or
Performance Units to any one participant.
Eligibility for Awards. Awards can be made to key employees who can be any
regular salaried employee. The current eligible group consists of approximately
170 persons. It is impossible to determine the exact number of persons who will
be eligible under the Plan during its term because the selection of participants
is a discretionary decision of the Committee.
Determination of Amount and Form of Award. The amount of individual awards to
key employees will be determined by the Committee, subject to the limitations of
the 1998 Plan. In determining the amount and form of an award, consideration
will be given to the functions and responsibilities of the key employee, his or
her potential contributions to the success of the Company, and other factors
deemed relevant by the Committee.
Performance Goals. Awards of performance units and restricted performance stock
shall be earned solely upon attainment of performance goals. Prior to the
beginning of a performance period the Committee will establish, in writing,
performance goals for the Company and its various operating units and its
subsidiaries. The goals will be comprised of specified annual levels of one or
more performance criteria, as the Committee may deem appropriate. Such goals may
include earnings per share, net earnings, operating earnings, unit volume, net
sales, market share, balance sheet measurements, revenue, cash flow, shareowner
return, return on equity, return on capital or other value-based performance
measures. Awards may also be payable when Company performance, as measured by
one or more of the above criteria, as compared to peer companies, meets or
exceeds an objective target established by the Committee.
Stock Options. The Committee can grant nonqualified options and options
qualifying as incentive stock options under the Internal Revenue Code. The term
of an option cannot exceed ten years from the date of grant. The option price
must be not less than the fair market value of a share of Vlasic Common Stock on
the date of grant.
Stock Appreciation Rights ("SAR"). The Committee can grant an SAR in connection
with a stock option granted under the Plan or an SAR unrelated to any option. If
a grantee exercises an SAR, the grantee would receive an amount equal to the
excess of the fair market value of the shares with respect to which the SAR is
being exercised over (i) the option price of the shares in the case of an SAR
granted in connection with an option, or (ii) the fair market value of the
shares on the date of grant in the case of an SAR which is not granted in
connection with an option. Payment would be in cash, in shares or a combination
of the two as the Committee determines.
Restricted Stock Awards. The Committee can also issue shares of Vlasic Common
Stock to a participant under a restricted stock award. Awards are subject to
certain conditions and restrictions during a specific period of time, such as
the grantee remaining in the employment of the Company or the attainment by the
Company of certain performance goals. The stock certificate for the shares is
held by the Company during the restriction period and cannot be transferred by
the grantee prior to the termination of that period. The grantee is however,
entitled to vote the shares and in most cases is entitled to receive the
dividends currently.
Unrestricted Stock Awards. The Committee may make awards of unrestricted stock
to employees in recognition of outstanding achievements or when performance
goals are exceeded.
Performance Unit Awards. The Committee can grant performance unit awards
payable in cash or stock at the end of a specified performance period. Payment
will be contingent upon achieving performance goals by the end of the
performance period. The Committee will determine the length of an award period,
the maximum payment value of an award, and the minimum performance goals
required before payment will be made.
15
<PAGE> 19
Amendment. The Board of Directors can amend, suspend or terminate the 1998
Plan, but cannot, among other things, without the shareowners' approval,
increase the annual limitations on awards to participants, materially modify the
requirements for eligibility or the business criteria on which performance goals
are based, extend the term of the 1998 Plan or increase the number of shares of
Vlasic Common Stock which may be issued under the 1998 Plan (except in the case
of recapitalization, stock split, or other changes in the corporate structure in
which event the Committee may make appropriate adjustments).
Federal Income Tax Consequences for Options.
The grant of an incentive stock option or a nonqualified stock option does not
result in income for the grantee or in a deduction for the Company. The exercise
of a nonqualified stock option does result in ordinary income for the optionee
and a deduction for the Company measured by the difference between the option
price and the fair market value of the shares received at the time of exercise.
Income tax withholding is required on this amount. When the grantee disposes of
the shares received upon the exercise of the nonqualified option, the difference
between the amount received and the fair market value of the shares at the date
of exercise will be taxed as a capital gain.
Neither the grant nor the exercise of an incentive stock option results in
taxable income for the grantee. The excess of the market value on the exercise
date over the option price of the shares, however, is an "item of adjustment"
for alternative minimum tax purposes. When a grantee disposes of shares acquired
by exercise of an incentive stock option, the grantee's gain (the difference
between the sale proceeds and the price paid by the grantee for the shares) upon
the disposition will be taxed as capital gain provided the grantee (i) does not
dispose of the shares within two years after the date of grant nor within one
year after the transfer of shares upon exercise, and (ii) exercises the option
while an employee of the Company or a subsidiary or within three months after
termination of employment for reasons other than death or disability. If the
shares are disposed of before the expiration of either period, the grantee
generally will realize ordinary income in the year of the disqualifying
disposition.
Change in Control. Generally, the Committee may provide under the terms of any
Award that upon a change in control, as defined in the 1998 Plan, all
outstanding options and SARs will become fully exercisable and all stock units,
restricted stock, restricted stock units and performance shares will become
fully vested. Any restricted shares attributable to deferrals under the
Company's deferral plan shall become fully vested upon a change of control.
Additional Information. If a participant is permitted and elects to defer
payment of compensation, the value of the amount deferred at the time of
distribution will be measured as determined by the Committee. The awards made
under the 1998 Plan during fiscal 1998 to the five highest paid executives are
described on page 10. No stock options were awarded based on performance during
fiscal 1999.
New Plan Benefits. Set forth in the table below is information relating to the
stock options granted to newly hired and promoted Participants for fiscal 1999.
No performance-based options were granted for fiscal 1999.
16
<PAGE> 20
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
1998 LONG-TERM
INCENTIVE PLAN
-------------------
NAME AND POSITION NUMBER OF UNITS
- --------------------------------------------------------------------------------
<S> <C>
Robert F. Bernstock 0
President, Chief Executive Officer and Director
- --------------------------------------------------------------------------------
Carlos Oliva Funes 0
Vice President and President -- Swift-Armour
- --------------------------------------------------------------------------------
Mitchell P. Goldstein 25,000
Vice President and Chief Financial Officer
- --------------------------------------------------------------------------------
Rolf B. Richter 0
Vice President and President -- Europe
- --------------------------------------------------------------------------------
Norma B. Carter 0
Vice President, General Counsel and Corporate Secretary
- --------------------------------------------------------------------------------
Current Executive Officers as a Group (5 persons) 25,000
- --------------------------------------------------------------------------------
Non-Executive Officer Employee Group (165 persons) 44,425
- --------------------------------------------------------------------------------
</TABLE>
The awards made under the Long-Term Incentive Plan during fiscal 1998 for the
five highest paid executives are described on page 10.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
APPROVAL OF VLASIC FOODS INTERNATIONAL INC. ANNUAL INCENTIVE PLAN
(PROXY ITEM NO. 3)
The Board of Directors recommends that shareowners approve the Vlasic Foods
International Inc. Annual Incentive Plan (the "Annual Plan") which was adopted
by the Board on March 9, 1998, and the performance goals described below.
The Annual Plan is designed to provide annual financial incentives for selected
employees of Vlasic, thereby promoting growth and financial success which
motivates key employees to attain and surpass performance goals; attract and
retain employees of outstanding ability; strengthen the management team; and to
allow the Company to compete with other major corporations in securing and
retaining key employees.
A summary of the material features of the Annual Plan appear below. The full
text of the Annual Plan is set forth in Appendix B and should be referred to for
a complete description of its provisions.
Effective Date and Expiration. The Annual Plan became effective on March 30,
1998 and unless terminated by the Board, will continue indefinitely.
Administration. The Annual Plan is administered by the Compensation and
Organization Committee of the Board of Directors, which consists entirely of
outside directors as defined for purposes of Section 162(m) of the Internal
Revenue Code. The Committee has full authority to interpret the Annual Plan and
to establish rules for its administration. The Committee may, in its discretion
select eligible employees to whom awards may be granted and to determine the
amount of any awards of incentive compensation to be granted to any eligible
employee.
Eligibility for Awards. Prior to the beginning of the fiscal year, the
Committee, at its discretion shall determine the eligible employees to receive
awards of incentive compensation based upon job grade and salary level. The
current eligible group consists of approximately 225 persons.
17
<PAGE> 21
Performance Goals. Prior to the beginning of each fiscal year, the Committee
shall establish, in writing, Performance Goals for the Company and its various
operating units and its Subsidiaries. The goals shall be comprised of specific
annual levels of one or more performance criteria as the Committee may deem
appropriate. Such goals may include earnings per share, net earnings, operating
earnings, unit volume, net sales, market share, balance sheet measurements,
revenue, cash flow, shareowner return, return on equity, return on capital or
other value-based performance measures. Awards may also be made payable when
Company performance, as measured by one or more of the above criteria, as
compared to peer companies, meets or exceeds an objective target established by
the Committee.
Determination of Amount and Form of Award. The amount of individual awards to
key employees will be determined by the Committee, subject to the limitations of
the Annual Plan. In determining the amount and form of an award, consideration
will be given to the performance of the Company or the organizational unit
employing the eligible employee based upon attainment of performance goals; and
the functions and responsibilities of the key employee, his or her potential
contributions to the success of the Company, and other factors deemed relevant
by the Committee. Incentive compensation awards shall be paid entirely in cash
as soon as possible after grant approval.
Limitations on Awards. After the close of the fiscal year, the Committee may
fix a maximum aggregate dollar amount that may be granted for awards for that
fiscal year. No award or awards may be granted to any participant for any fiscal
year that exceeds in the aggregate $3,000,000. The Committee shall have no
discretion to increase such awards.
Amendment. The Board of Directors can amend, suspend or terminate the Annual
Plan, but it may not adversely affect rights or obligations with respect to
awards already made.
Change in Control. Generally, the Committee may provide that upon a change in
control, as defined in the Annual Plan, that for a period of two years following
a change in control, the Annual Plan shall not be terminated or amended or
administered in any way that would adversely affect any participation or reward
opportunities.
New Plan Benefits. Set forth in the table below is information relating to the
maximum incentive payments established by the Committee which could have been
made to the named Participants for fiscal 1999 had the maximum performance
targets been met. No bonuses were actually paid for fiscal 1999. The maximum
amount represents twice the target payment for the Participant.
18
<PAGE> 22
NEW PLAN BENEFITS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
ANNUAL INCENTIVE PLAN
----------------------
NAME AND POSITION DOLLAR VALUE
- -----------------------------------------------------------------------------------
<S> <C>
Robert F. Bernstock $960,000
President, Chief Executive Officer and Director
- -----------------------------------------------------------------------------------
Carlos Oliva Funes $294,000
Vice President and President -- Swift-Armour
- -----------------------------------------------------------------------------------
Mitchell P. Goldstein $294,000
Vice President and Chief Financial Officer
- -----------------------------------------------------------------------------------
Rolf B. Richter $190,000
Vice President and President -- Europe
- -----------------------------------------------------------------------------------
Norma B. Carter $236,000
Vice President, General Counsel and Corporate Secretary
- -----------------------------------------------------------------------------------
Executive Group (5 persons) $1,870,000
- -----------------------------------------------------------------------------------
Non-Executive Officer Employee Group (220 persons) $12,045,500
- -----------------------------------------------------------------------------------
</TABLE>
The awards made under the Annual Plan during fiscal 1998 for the five highest
paid executives are described on page 10.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
RATIFICATION OF INDEPENDENT ACCOUNTANTS (PROXY ITEM NO. 4)
The proxy, unless otherwise directed thereon, will be voted for a resolution
ratifying action of the Board, upon the recommendation of its Audit Committee,
appointing the firm of PricewaterhouseCoopers LLP Certified Public Accountants,
as independent accountants to conduct an audit of the accounts of Vlasic for
fiscal 2000. PricewaterhouseCoopers was originally appointed to act as the
Company's independent accountants in March 1998 when Vlasic became an
independent entity. PricewaterhouseCoopers is knowledgeable about the Company's
operations and accounting practices as a result of its past service as
independent accountants for Campbell Soup Company and is well qualified to act
as independent accountants.
The vote required for ratification is a majority of shares voting. If the
resolution is rejected, or if PricewaterhouseCoopers declines to act or becomes
incapable of acting, or if their employment is discontinued, the Board will
appoint other accountants whose continued employment after the 2000 Annual
Meeting of Shareowners will be subject to ratification by the shareowners.
Representatives of PricewaterhouseCoopers will be at the 1999 Annual Meeting to
make a statement if they desire to do so and to answer questions.
19
<PAGE> 23
For fiscal 1999 PricewaterhouseCoopers also examined the separate financial
statements of certain of Vlasic's foreign subsidiaries and provided other audit
services to Vlasic in connection with debt offerings, Securities and Exchange
Commission filings, review of periodic financial statements and audits of
certain employee benefit plans.
YOUR BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THIS PROPOSAL
SUBMISSION OF SHAREOWNER PROPOSALS
Under the rules of the Securities and Exchange Commission now in effect,
shareowner proposals intended for inclusion in next year's Proxy Statement must
be directed to the Corporate Secretary at Vlasic Plaza, Six Executive Campus,
Cherry Hill, New Jersey, 08002-4112, and must be received by June 17, 2000.
If you wish to nominate directors and/or propose proper business from the floor
for consideration at next year's Annual meeting of Shareowners, our By-Laws
provide that:
- You must notify Vlasic's Secretary in writing.
- Your notice must be received at Vlasic's world headquarters not earlier
than September 8, 2000 and not later than October 8, 2000.
- Your notice must contain the specific information required in our
By-Laws. We will send copies of these requirements to any shareowner who
writes to us requesting this information.
Please note that these three requirements apply only to matters that you wish to
bring before your fellow shareowners at the 2000 Annual Meeting without
submitting them for possible inclusion in our 2000 proxy materials.
OTHER MATTERS
As of the mailing date for this proxy statement, the Board of Directors knows of
no other matters to be presented for action at the meeting. If other matters are
properly brought before the meeting, it is the intention of the Directors' proxy
to vote on such matters in accordance with his best judgment.
/s/ Norma B. Carter
Norma B. Carter
Corporate Secretary
October 15, 1999
NOTE: SHAREOWNERS MAY RECEIVE A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM
10-K, WITHOUT CHARGE, BY WRITING INVESTOR RELATIONS AT VLASIC'S HEADQUARTERS OR
BY CALLING (856) 969-7427 OR EMAIL AT [email protected].
20
<PAGE> 24
APPENDIX A
VLASIC FOODS INTERNATIONAL INC.
------------------------
1998 LONG-TERM INCENTIVE PLAN
------------------------
DATED: MARCH 30, 1998
<PAGE> 25
ARTICLE I
PURPOSE AND EFFECTIVE DATE
sec.1.1. PURPOSE. The purpose of the Plan is to provide financial incentives
for selected employees of the Vlasic Foods International Group, thereby
promoting the long-term growth and financial success of the Vlasic Foods
International Group by (i) attracting and retaining employees of outstanding
ability, (ii) strengthening the Vlasic Foods International Group's capability to
develop, maintain, and direct a competent management team, (iii) providing an
effective means for selected employees to acquire and maintain ownership of
Vlasic Stock, (iv) motivating employees to achieve long-range Performance Goals
and objectives, and (v) providing incentive compensation opportunities
competitive with those of other major corporations.
sec.1.2. EFFECTIVE DATE AND EXPIRATION OF PLAN. The Plan was approved by
Campbell Soup Company, as the sole shareowner of Vlasic Foods International Inc.
and is effective March 30, 1998. Unless earlier terminated by the Board pursuant
to Section 10.3, the Plan shall terminate on the tenth anniversary of its
Effective Date. No Award shall be made pursuant to the Plan after its
termination date, but exercise and payment of Awards made prior to the
termination date may extend beyond that date.
ARTICLE II
DEFINITIONS
The following words and phrases, as used in the Plan, shall have these meanings:
sec.2.1. "AWARD" means, individually or collectively, any Option, SAR,
Restricted Stock, unrestricted Vlasic Stock or Performance Unit Award.
sec.2.2. "BOARD" means the Board of Directors of the Company.
sec.2.3. "CAMPBELL CONVERSION AWARD" means an award under the Campbell Soup
Company 1994 Long-Term Incentive Plan ("Campbell Plan") that terminates solely
by reason of the spin-off of the Company from Campbell Soup Company and is
converted to a replacement Award under the Plan. The replacement Award shall
have the same aggregate Option Price, cover the same aggregate fair market value
of Vlasic Stock and continue the vesting schedule and other provisions of the
award under the Campbell Plan that it replaces.
sec.2.4. "CAUSE" means the termination of a Participant's employment by reason
of his or her engaging in conduct that constitutes willful gross misconduct that
is demonstrably and materially injurious to his or her employer, monetarily or
otherwise, misappropriation of funds, willful and material misrepresentation to
the directors or officers of his or her employer, gross negligence in the
performance of the Participant's duties having a material adverse effect on the
business, operations, assets, properties or financial condition of the Company
or a Subsidiary, or entering into competition with the Company or a Subsidiary.
No act, nor failure to act, on the Participant's part shall be considered
"willful" unless he or she has acted, or failed to act, with an absence of good
faith and without a reasonable belief that his or her action or failure to act
was in the best interest of the Company and its Subsidiaries.
sec.2.5. "CODE" means the Internal Revenue Code of 1986, as amended.
sec.2.6. "COMMITTEE" means the Compensation and Organization Committee of the
Board. All members of the Committee shall be "Outside Directors," as defined or
interpreted for purposes of Section 162(m) of the Code, and "Disinterested
Persons," within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 (the "1934 Act").
sec.2.7. "COMPANY" means Vlasic Foods International Inc. and its successors and
assigns.
sec.2.8. "DEFERRED COMPENSATION PLAN" means the Vlasic Foods International Inc.
Deferred Compensation Plan.
sec.2.9. "DIRECTOR" means a member of the Board.
sec.2.10. "EFFECTIVE DATE" means March 30, 1998.
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sec.2.11. "EMPLOYEE" means a person who is a regular salaried employee of the
Vlasic Foods International Group and who, in the opinion of the Committee, is a
key employee whose performance can contribute to the success of the Company or a
Subsidiary.
sec.2.12. "FAIR MARKET VALUE" means, as of any specified date, an amount equal
to the mean between the reported high and low prices of Vlasic Stock on the New
York Stock Exchange composite tape on the specified date.
sec.2.13. "FISCAL YEAR" means the fiscal year of the Company, which is the 52-
or 53-week period ending on the Sunday closest to July 31.
sec.2.14. "HIGHLY COMPENSATED EMPLOYEE" means an Employee who is determined by
the Committee to be a member of a select group of management or highly
compensated employees for purposes of Section 201(2) of the Employee Retirement
Income Security Act of 1974, as amended.
sec.2.15. "INCENTIVE STOCK OPTION" means an option within the meaning of Section
422 of the Code.
sec.2.16. "NONQUALIFIED STOCK OPTION" means an Option granted under the Plan
other than an Incentive Stock Option.
sec.2.17. "OPTION" means either a Nonqualified Stock Option or an Incentive
Stock Option to purchase Vlasic Stock.
sec.2.18. "OPTION PRICE" means the price at which Vlasic Stock may be purchased
under an Option as provided in Section 5.4 or in the case of an SAR awarded
under Section 5.8, the Fair Market Value of Vlasic Stock on the date the SAR is
awarded.
sec.2.19. "PARTICIPANT" means an Employee to whom an Award has been made under
the Plan.
sec.2.20. "PERFORMANCE GOALS" means goals established by the Committee pursuant
to Section 4.5.
sec.2.21. "PERFORMANCE PERIOD" means a period of time over which performance is
measured.
sec.2.22. "PERFORMANCE UNIT" means the unit of measure determined under Article
VIII by which is expressed the value of a Performance Unit Award.
sec.2.23. "PERFORMANCE UNIT AWARD" means an Award granted under Article VIII.
sec.2.24. "PERSONAL REPRESENTATIVE" means the person or persons who, upon the
death, disability, or incompetency of a Participant, shall have acquired, by
will or by the laws of descent and distribution or by other legal proceedings,
the right to exercise an Option or the right to any Restricted Stock Award or
Performance Unit Award theretofore granted or made to such Participant.
sec.2.25. "PLAN" means the Vlasic Foods International Inc. 1998 Long-Term
Incentive Plan.
sec.2.26. "RESTRICTED PERFORMANCE STOCK" means Vlasic Stock subject to
Performance Goals provided in Section 4.5.
sec.2.27. "RESTRICTED STOCK" means Vlasic Stock subject to the terms and
conditions provided in Article VI and includes Restricted Performance Stock.
sec.2.28. "RESTRICTED STOCK AWARD" means an Award granted under Article VI.
sec.2.29. "RESTRICTION PERIOD" means a period of time determined under Section
6.2 during which Restricted Stock is subject to the terms and conditions
provided in Section 6.3.
sec.2.30. "SAR" means a stock appreciation right granted under Section 5.8.
sec.2.31. "STATEMENT" means a written confirmation of an Award under the Plan
furnished to the Participant.
sec.2.32. "SUBSIDIARY" means a corporation, domestic or foreign, the majority of
the voting stock of which is owned directly or indirectly by the Company.
sec.2.33. "VLASIC FOODS INTERNATIONAL GROUP" means the Company and all of its
Subsidiaries on and after the Effective Date.
sec.2.34. "VLASIC STOCK" means common stock of the Company.
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<PAGE> 27
ARTICLE III
ADMINISTRATION
sec.3.1. COMMITTEE TO ADMINISTER. The Plan shall be administered by the
Committee. The Committee shall have full power and authority to interpret and
administer the Plan and to establish and amend rules and regulations for its
administration. The Committee's decisions shall be final and conclusive with
respect to the interpretation of the Plan and any Award made under it.
A majority of the members of the Committee shall constitute a quorum for the
conduct of business at any meeting. The Committee shall act by majority vote of
the members present at a duly convened meeting, which may include a meeting by
conference telephone call held in accordance with applicable law. Action may be
taken without a meeting if written consent thereto is given in accordance with
applicable law.
sec.3.2. POWERS OF COMMITTEE.
(a) Subject to the provisions of the Plan, the Committee shall have authority,
in its discretion, to determine those Employees who shall receive an Award, the
time or times when such Award shall be made, the vesting schedule, if any, for
the Award and the type of Award to be granted, whether an Incentive Stock Option
or a Nonqualified Stock Option shall be granted, the number of shares to be
subject to each Option and Restricted Stock Award, and the value of each
Performance Unit.
(b) The Committee shall determine and set forth in an Award Statement the terms
of each Award, including such terms, restrictions, and provisions as shall be
necessary to cause certain options to qualify as Incentive Stock Options. The
Committee may correct any defect or supply any omission or reconcile any
inconsistency in the Plan or in any Statement relating to an Award, in such
manner and to the extent the Committee shall determine in order to carry out the
purposes of the Plan. The Committee may, in its discretion, accelerate (i) the
date on which any Option or SAR may be exercised, (ii) the date of termination
of the restrictions applicable to a Restricted Stock Award, or (iii) the end of
a Performance Period under a Performance Unit Award, if the Committee determines
that to do so will be in the best interests of the Company and the Participants
in the Plan.
ARTICLE IV
AWARDS
sec.4.1. AWARDS. Awards under the Plan shall consist of Incentive Stock
Options, Nonqualified Stock Options, SARs, Restricted Stock, unrestricted Vlasic
Stock and Performance Units. All Awards shall be subject to the terms and
conditions of the Plan and to such other terms and conditions consistent with
the Plan as the Committee deems appropriate. Awards under a particular section
of the Plan need not be uniform and Awards under two or more sections may be
combined in one Statement. Any combination of Awards may be granted at one time
and on more than one occasion to the same Employee. Awards of Performance Units
and Restricted Performance Stock shall be earned solely upon attainment of
Performance Goals and the Committee shall have no discretion to increase such
Awards.
sec.4.2. ELIGIBILITY FOR AWARDS. An Award may be made to any Employee selected
by the Committee. In making this selection and in determining the form and
amount of the Award, the Committee may give consideration to the functions and
responsibilities of the respective Employee, his or her present and potential
contributions to the success of the Vlasic Foods International Group, the value
of his or her services to the Vlasic Foods International Group, and such other
factors deemed relevant by the Committee.
sec.4.3. SHARES AVAILABLE UNDER THE PLAN. The Vlasic Stock to be offered under
the Plan pursuant to Options, SARs, Performance Unit Awards, and Restricted
Stock and unrestricted Vlasic Stock Awards will be authorized but unissued
Vlasic Stock or Vlasic Stock previously issued and outstanding and reacquired by
the Company. Subject to adjustment under Section 10.2, (i) no more than
5,800,000 shares of Vlasic Stock shall be issuable upon exercise of Options,
SARs, or pursuant to Performance Unit Awards, Restricted Stock or unrestricted
Vlasic Stock Awards granted under the Plan, and (ii) no less than 80% of such
shares of Vlasic Stock shall be issuable upon exercise of Options. Any shares of
Vlasic Stock tendered in exercise of an Option or subject to an Option that for
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<PAGE> 28
any reason is canceled or terminated without having been exercised, or any
shares of Restricted Stock which are forfeited, shall again be available for
Awards under the Plan. Shares subject to an Option canceled upon the exercise of
an SAR shall not again be available for Awards under the Plan.
sec.4.4. LIMITATION ON AWARDS. The maximum aggregate dollar value of Restricted
Stock and Performance Units awarded to any Employee with respect to a
Performance Period or Restriction Period may not exceed $5,000,000 for each
fiscal year included in such Performance Period or Restriction Period. The
maximum number of shares for which Options may be granted to any Participant in
any one fiscal year shall not exceed 2,000,000 shares. The foregoing dollar
value and share limits shall not apply to Restricted Stock, Performance Units
and Options attributable to a Campbell Conversion Award.
sec.4.5. GENERAL PERFORMANCE GOALS. Prior to the beginning of a Performance
Period the Committee will establish, in writing, Performance Goals for the
Company and its various operating units and its Subsidiaries. The goals will be
comprised of specified annual levels of one or more performance criteria as the
Committee may deem appropriate. Such goals may include, but shall not be limited
to, earnings per share, net earnings, operating earnings, unit volume, net
sales, market share, balance sheet measurements, revenue, cash flow, cash return
on assets, shareowner return, return on equity, return on capital or other
value-based performance measures. The Committee may disregard or offset the
effect of any special charges or gains, the cumulative effect of a change in
accounting, or the effect of other expenses or losses that are unusual in nature
or infrequent in occurrence, in determining the attainment of Performance Goals.
Awards may also be payable when Company performance, as measured by one or more
of the above criteria, as compared to peer companies, meets or exceeds an
objective target established by the Committee.
ARTICLE V
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
sec.5.1. AWARD OF STOCK OPTIONS. The Committee may, from time to time, subject
to Section 3.2(b) and other provisions of the Plan and such terms and conditions
as the Committee may prescribe, award Incentive Stock Options and Nonqualified
Stock Options to any Employee. Awards of Incentive Stock Options and
Nonqualified Stock Options must be separate and not in tandem.
sec.5.2. PERIOD OF OPTION.
(a) An Option granted under the Plan shall be exercisable only in accordance
with the vesting schedule approved by the Committee. After the waiting period,
the Option may be exercised at any time during the term of the Option, in whole
or in installments, as specified in the related Statement. Subject to Section
5.6, the duration of each Option shall not be more than ten years from the date
of grant.
(b) Except as provided in Section 5.6, an Option may not be exercised by a
Participant unless such Participant is then, and continually (except for sick
leave, United States military service, or other approved leave of absence) after
the grant of the Option has been, an employee of the Vlasic Foods International
Group.
sec.5.3. STATEMENT. Each Option shall be evidenced by a Statement.
sec.5.4. OPTION PRICE, EXERCISE AND PAYMENT. The Option Price of Vlasic Stock
under each Option shall be determined by the Committee but shall be a price not
less than 100 percent of the Fair Market Value of Vlasic Stock at the date such
Option is granted, as determined by the Committee. The Board shall establish the
Option Price for each Option attributable to a Campbell Conversion Award.
Options shall not be repriced.
Options may be exercised from time to time by giving notice to the Company, or
the agent of the Company, specifying the number of shares to be purchased. The
notice of exercise shall be accompanied by payment in full of the Option Price
in cash or the Option Price may be paid in whole or in part through the transfer
to the Company of shares of Vlasic Stock.
In the event such Option Price is paid in whole or in part with shares of Vlasic
Stock, the portion of the Option Price so paid shall be equal to the Fair Market
Value, as of the date of exercise of the Option, of such shares or if the date
of exercise is not a trading day the Fair Market Value of the shares on the
immediately preceding trading day. The Company shall not issue or transfer
Vlasic Stock upon exercise of an Option until the Option Price is fully paid.
The Participant may satisfy any amounts required to be withheld by the Company
under applicable federal, state and
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<PAGE> 29
local tax laws in effect from time to time, by electing to have the Company
withhold a portion of the shares of Vlasic Stock to be delivered for the payment
of such taxes.
sec.5.5. LIMITATIONS ON INCENTIVE STOCK OPTIONS. Each provision of the Plan and
each Option Statement relating to an Incentive Stock Option shall be construed
so that each Incentive Stock Option shall be an incentive stock option as
defined in Section 422 of the Code, and any provisions of the Option Statement
thereof that cannot be so construed shall be disregarded.
sec.5.6. TERMINATION OF EMPLOYMENT. Unless otherwise specifically provided in
the terms of a Statement, the following provisions will govern the ability of a
Participant to exercise any outstanding Options following the Participant's
termination of employment with the Vlasic Foods International Group:
(a) If the employment of a Participant with the Vlasic Foods International Group
is terminated for reasons other than (i) death or disability, (ii) discharge for
Cause, (iii) retirement, or (iv) resignation, the Participant may exercise an
Option, except an Incentive Stock Option, at any time within three years after
such termination, to the extent of the number of shares covered by such Option
that were exercisable at the date of such termination; except that an Option
shall not be exercisable on any date beyond the expiration of such three-year
period or the expiration date of such Option, whichever occurs first.
(b) If the employment of a Participant with the Vlasic Foods International Group
is terminated for Cause, any Options of such Participant shall expire and any
rights thereunder shall terminate immediately. Any Option of a Participant whose
service is terminated by resignation may be exercised at any time within three
months of such resignation to the extent that the number of shares covered by
such Option were exercisable at the date of such resignation, except that an
Option shall not be exercisable on any date beyond the expiration date of such
Option.
(c) Should a Participant die or become disabled either while in the employ of
the Vlasic Foods International Group or after termination of such employment
(other than discharge for Cause), the Option rights of such deceased or disabled
Participant may be exercised by his or her Personal Representative at any time
within three years after the Participant's date of death or disability to the
extent of the number of shares covered by such Option that were exercisable at
the date of such death or disability, except that an Option shall not be so
exercisable on any date beyond the expiration date of such Option.
If a Participant who was granted a Nonqualified Stock Option should die within
180 days of the expiration date of such Option, and if on the date of death the
Participant was then entitled to exercise such Option, and if the Option expires
without being exercised, the Personal Representative of the Participant shall
receive in settlement a cash payment from the Company of a sum equal to the
amount, if any, by which the Fair Market Value (determined on the expiration
date of the Option) of Vlasic Stock subject to the Option exceeds the Option
Price.
(d) Any Option of a Participant whose service is terminated while eligible to
retire under the Company's tax qualified pension plan or such a pension plan of
any affiliated company at the date of such termination may be exercised at any
time up to 10 years after such termination, as determined by the Committee,
except that an Option shall not be exercisable on any date beyond the expiration
date of such Option. In the event the Participant's employment with the Vlasic
Foods International Group terminates prior to the vesting of all Options, and if
the Participant is eligible to retire, as described above, any installment or
installments not then exercisable shall become fully exercisable as of the
effective date of such termination.
sec.5.7. SHAREOWNER RIGHTS AND PRIVILEGES. A Participant shall have no rights
as a shareowner with respect to any shares of Vlasic Stock covered by an Option
until the issuance of shares to the Participant.
sec.5.8. AWARD OF SARs.
(a) At any time prior to six months before an Option's expiration date, the
Committee may award to the Participant an SAR related to the Option. The
Committee may also award SARs that are unrelated to any Option.
(b) The SAR shall represent the right to receive payment of an amount not
greater than the spread, if any, by which the Fair Market Value of the Vlasic
Stock on the trading day immediately preceding the date of exercise of the SAR
exceeds the Option Price.
(c) SARs awarded under the Plan shall be evidenced by a Statement between the
Company and the Participant.
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<PAGE> 30
(d) The Committee may prescribe conditions and limitations on the exercise or
transferability of any SAR. SARs may be exercised only when the value of a share
of Vlasic Stock exceeds the Option Price. Such value shall be determined in the
manner specified in Section 5.8(b).
(e) An SAR shall be exercisable only by notice to the Company. However, an SAR
shall in no event be exercisable during the first six months of its term, except
in the event of death or disability of the Participant prior to the expiration
of such six-month period.
(f) All SARs shall automatically be exercised on the last trading day prior to
their expiration, so long as the Fair Market Value of a share of Vlasic Stock
exceeds the Option Price, unless prior to such day the holder instructs the
Treasurer of the Company otherwise in writing. Such Fair Market Value shall be
determined in the manner specified in Section 5.8(b).
(g) Payment of the amount to which a Participant is entitled upon the exercise
of an SAR shall be made in cash, Vlasic Stock, or partly in cash and partly in
Vlasic Stock at the discretion of the Committee. The shares shall be valued in
the manner specified in Section 5.8(b).
(h) At any time when a Participant is, in the judgment of the Corporate
Secretary of the Company, subject with respect to Vlasic Stock to Section 16 of
the 1934 Act, in the event the Committee has not determined the form in which a
SAR will be paid (i.e., cash, shares of Vlasic Stock, or any combination
thereof), any election to exercise such right in whole or in part for cash shall
be subject to the subsequent consent thereto, or disapproval thereof, by the
Committee in its sole discretion.
(i) Each SAR shall expire on a date determined by the Committee at the date of
grant of the Award.
ARTICLE VI
RESTRICTED STOCK AWARDS
sec.6.1. AWARD OF RESTRICTED STOCK.
(a) The Committee may make a Restricted Stock Award to any Participant, subject
to this Article VI and to such other terms and conditions as the Committee may
prescribe.
(b) Each certificate for Restricted Stock may be registered in book-entry form
or may be registered in the name of the Participant and deposited by him or her,
together with a stock power endorsed in blank, with the Company, unless the
Participant is a Highly Compensated Employee and has elected to defer pursuant
to Section 9.1.
sec.6.2. RESTRICTION PERIOD. At the time of making a Restricted Stock Award,
the Committee shall establish the Restriction Period applicable to such Award.
The Committee may establish different Restriction Periods from time to time and
each Restricted Stock Award may have a different Restriction Period, in the
discretion of the Committee. Restriction Periods, when established for each
Restricted Stock Award, shall not be changed except as permitted by Section 6.3.
sec.6.3. OTHER TERMS AND CONDITIONS. Vlasic Stock, when awarded pursuant to a
Restricted Stock Award, will be represented by a book-entry notation or a stock
certificate registered in the name of the Participant who receives the
Restricted Stock Award, unless the Participant is eligible for and has elected
to defer pursuant to Article IX. Such certificate shall be deposited with the
Company as provided in Section 6.1(b). The Participant shall be entitled to
receive dividends during the Restriction Period and shall have the right to vote
such Vlasic Stock and all other shareowner's rights, with the exception that (i)
the Participant will not be entitled to delivery of a stock certificate during
the Restriction Period, (ii) the Company will retain custody of the certificate,
if any, during the Restriction Period, and (iii) a breach of a restriction or a
breach of the terms and conditions established by the Committee pursuant to the
Restricted Stock Award will cause a forfeiture of the Restricted Stock Award.
The Participant may satisfy any amounts required to be withheld by the Company
under applicable federal, state and local tax laws in effect from time to time,
by electing to have the Company withhold a portion of the Restricted Stock Award
to be delivered for the payment of such taxes. The Committee may, in addition,
prescribe additional restrictions, terms, or conditions upon or to the
Restricted Stock Award, including performance restrictions in accordance with
Section 4.5.
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<PAGE> 31
sec.6.4. RESTRICTED STOCK AWARD STATEMENT. Each Restricted Stock Award shall be
evidenced by a Statement.
sec.6.5. TERMINATION OF EMPLOYMENT. The Committee may, in its sole discretion,
establish rules pertaining to the Restricted Stock Award in the event of
termination of employment (by retirement, disability, death, or otherwise) of a
Participant prior to the expiration of the Restriction Period.
sec.6.6. PAYMENT FOR RESTRICTED STOCK. Restricted Stock Awards may be made by
the Committee under which the Participant shall not be required to make any
payment for the Vlasic Stock or, in the alternative, under which the
Participant, as a condition to the Restricted Stock Award, shall pay all (or any
lesser amount than all) of the Fair Market Value of the Vlasic Stock, determined
as of the date the Restricted Stock Award is made. If the latter, such purchase
price shall be paid as provided in the Statement.
ARTICLE VII
UNRESTRICTED VLASIC STOCK AWARDS
sec.7.1. The Committee may make awards of unrestricted Vlasic Stock to Employees
in recognition of outstanding achievements or as an award for Employees who
receive Restricted Stock Awards when Performance Goals are exceeded.
sec.7.2. Each Award of unrestricted Vlasic Stock shall be registered in the name
of the Participant and immediately be delivered to him or her or may be noted as
unrestricted in the book-entry records.
ARTICLE VIII
AWARD OF PERFORMANCE UNITS
sec.8.1. AWARD OF PERFORMANCE UNITS. The Committee may award Performance Units
to any Participant. Each Performance Unit shall represent the right of a
Participant to receive an amount equal to the value of the Performance Unit,
determined in the manner established by the Committee at the time of Award.
sec.8.2. PERFORMANCE PERIOD. At the time of each Performance Unit Award, the
Committee shall establish, with respect to each such Award, a Performance Period
during which performance shall be measured. There may be more than one Award in
existence at any one time, and Performance Periods may differ.
sec.8.3. PERFORMANCE MEASURES. Performance Units shall be awarded to a
Participant contingent upon the attainment of Performance Goals in accordance
with Section 4.5.
sec.8.4. PERFORMANCE UNIT VALUE. Each Performance Unit shall have a maximum
dollar value established by the Committee at the time of the Award. Performance
Units earned will be determined by the Committee in respect of a Performance
Period in relation to the degree of attainment of Performance Goals. The measure
of a Performance Unit may, in the discretion of the Committee, be equal to the
Fair Market Value of one share of Vlasic Stock.
sec.8.5. AWARD CRITERIA. In determining the number of Performance Units to be
granted to any Participant, the Committee shall take into account the
Participant's responsibility level, performance, potential, cash compensation
level, other incentive awards, and such other considerations as it deems
appropriate.
sec.8.6. PAYMENT.
(a) Following the end of a Performance Period, a Participant holding Performance
Units will be entitled to receive payment of an amount, not exceeding the
maximum value of the Performance Units, based on the achievement of the
Performance Goals for such Performance Period, as determined by the Committee.
(b) Payment of Performance Units shall be made in cash, whether payment is made
at the end of the Performance Period or, in the case of a Highly Compensated
Employee, is deferred pursuant to Section 9.1, except that Performance Units
which are measured using Vlasic Stock shall be paid in Vlasic Stock. Payment
shall be made in a lump sum or in installments and shall be subject to such
other terms and conditions as shall be determined by the Committee.
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sec.8.7. TERMINATION OF EMPLOYMENT.
(a) A Performance Unit Award shall terminate for all purposes if the Participant
does not remain continuously in the employ of the Vlasic Foods International
Group at all times during the applicable Performance Period, except as may
otherwise be determined by the Committee.
(b) In the event that a Participant holding a Performance Unit ceases to be an
employee of the Vlasic Foods International Group following the end of the
applicable Performance Period but prior to full payment according to the terms
of the Performance Unit Award, payment shall be made in accordance with terms
established by the Committee for the payment of such Performance Unit.
sec.8.8. PERFORMANCE UNIT STATEMENTS. Performance Unit Awards shall be
evidenced by Performance Unit Statements.
ARTICLE IX
DEFERRAL OF CERTAIN PAYMENTS
A Participant who is a Highly Compensated Employee may elect to defer all or a
portion of any related earned Performance Units, Restricted Stock or gain on any
exercised Option pursuant to the terms of the Deferred Compensation Plan. The
value of the Performance Units, Restricted Stock or Option gain so deferred
shall be transferred to the Deferred Compensation Plan and held in an account
under that plan established for the Participant. Participants who are subject to
tax in a foreign country are not eligible to defer payment of Performance Units,
Restricted Stock or Option gain unless a deferral election has been approved for
the Participant by the Company.
ARTICLE X
MISCELLANEOUS PROVISIONS
sec.10.1. LIMITS AS TO TRANSFERABILITY. With the prior approval of the
Committee, an Option may, at the election of the Participant, be transferred to
the spouse or a descendant of the Participant, or a trust for the benefit of the
spouse or descendants. Unless otherwise provided by the Committee, however, no
SAR, share of Restricted Stock, or Performance Unit under the Plan shall be
transferable by the Participant otherwise than by will or, if the Participant
dies intestate, by the laws of descent and distribution. All Awards other than
Options that are transferred in accordance with the foregoing provisions shall
be exercisable or received during the Participant's lifetime only by such
Participant or his Personal Representative. Any transfer contrary to this
Section 10.1 will nullify the Option, SAR, Performance Unit, or share of
Restricted Stock.
sec.10.2. ADJUSTMENTS UPON CHANGES IN STOCK. In case of any reorganization,
recapitalization, stock split, stock dividend, combination of shares, merger,
consolidation, rights offering, or any other changes in the corporate structure
or shares of the Company, appropriate adjustments may be made by the Committee
(or if the Company is not the surviving corporation in any such transaction, the
board of directors of the surviving corporation) in the aggregate number and
kind of shares subject to the Plan, and the number and kind of shares and the
price per share subject to outstanding Options or that may be issued under
outstanding Restricted Stock Awards or pursuant to unrestricted Vlasic Stock
Awards. Appropriate adjustments may also be made by the Committee in the terms
of any Awards under the Plan, to reflect such changes and to modify any other
terms of outstanding Awards on an equitable basis, including modifications of
Performance Goals and changes in the length of Performance Periods.
sec.10.3. AMENDMENT, SUSPENSION, AND TERMINATION OF PLAN.
(a) The Board may suspend or terminate the Plan or any portion thereof at any
time, and may amend the Plan from time to time in such respects as the Board may
deem advisable in order that any Awards thereunder shall conform to any change
in applicable laws or regulations or in any other respect the Board may deem to
be in the best interests of the Company. No such amendment, suspension, or
termination shall alter or impair any outstanding Options, SARs, shares of
Restricted Stock, or Performance Units without the consent of the Participant
adversely affected thereby.
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(b) With the consent of the Participant adversely affected thereby, the
Committee may amend or modify any outstanding Options, Restricted Stock Awards,
or Performance Unit Awards in any manner to the extent that the Committee would
have had the authority under the Plan initially to award such Options, SARs,
Restricted Stock Awards, or Performance Unit Awards as so modified or amended,
including without limitation, to change the date or dates as of which such
Options or SARs may be exercised, to remove the restrictions on shares of
Restricted Stock, or to modify the manner in which Performance Units are
determined and paid.
sec.10.4. NONUNIFORM DETERMINATIONS. The Committee's determinations under the
Plan, including without limitation, (i) the determination of the Employees to
receive Awards, (ii) the determination of Highly Compensated Employees eligible
to defer Performance Units or Restricted Stock, (iii) the form, amount, and
timing of such Awards, (iv) the terms and provisions of such Awards and (v) the
Statements evidencing the same, need not be uniform and may be made by it
selectively among Employees who receive, or who are eligible to receive, Awards
under the Plan, whether or not such Employees are similarly situated.
sec.10.5. GENERAL RESTRICTION. Each Award under the Plan shall be subject to
the condition that, if at any time the Committee shall determine that (i) the
listing, registration, or qualification of the shares of Vlasic Stock subject or
related thereto upon any securities exchange or under any state or federal law,
(ii) the consent or approval of any government or regulatory body, or (iii) an
agreement by the Participant with respect thereto, is necessary or desirable,
then such Award shall not become exercisable in whole or in part unless such
listing, registration, qualification, consent, approval, or agreement shall have
been effected or obtained free of any conditions not acceptable to the
Committee.
sec.10.6. NO RIGHT TO EMPLOYMENT. Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board or the
Committee under the Plan, nor any provision of the Plan, shall be construed as
giving to any person the right to be retained in the employ of the Company or
any Subsidiary.
sec.10.7. TRUST ARRANGEMENT. All benefits under the Plan represent an unsecured
promise to pay by the Company and its Subsidiaries. The Plan shall be unfunded
and the benefits hereunder shall be paid only from the general assets of the
Company or its respective Subsidiaries, resulting in the Participants having no
greater rights than the general creditors of the Company or such Subsidiaries.
Notwithstanding the foregoing, nothing herein shall prevent or prohibit the
Company or the respective Subsidiaries from establishing a trust or other
arrangement for the purpose of providing for the payment of the benefits payable
under the Plan at any time.
ARTICLE XI
CHANGE IN CONTROL OF THE COMPANY
sec.11.1. CONTRARY PROVISIONS. Notwithstanding anything contained in the Plan
to the contrary, the provisions of this Article XI shall govern and supersede
any inconsistent terms or provisions of the Plan.
sec.11.2. DEFINITION OF "ADJUSTED FAIR MARKET VALUE." For purposes of the Plan,
"Adjusted Fair Market Value" means, in the event of a Change in Control, the
greater of (i) the highest price per share of Vlasic Stock paid to holders of
the shares of Vlasic Stock in any transaction (or series of transactions)
constituting or resulting in a Change in Control or (ii) the highest Fair Market
Value of a share of Vlasic Stock during the 90 day period ending on the date of
a Change in Control.
sec.11.3. DEFINITION OF "CHANGE IN CONTROL YEAR." For purposes of the Plan,
"Change in Control Year" means a fiscal year of the Company in which a Change in
Control occurs.
sec.11.4. DEFINITION OF "CHANGE IN CONTROL." For purposes of the Plan "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 Section 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 11.4(a), the Voting Securities acquired directly
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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 the later of April 1, 1998 or the first date that
the membership of the Board reaches seven (7), are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least two-thirds of
the Board; provided, however, that if the election, or nomination for election
by the Company's shareowners, 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 the Plan, be considered as a member of the Incumbent Board; or
(c) Approval by shareowners of the Company of (i) a merger or consolidation
involving the Company if the shareowners of the Company, immediately before such
merger or consolidation, do not own, directly or indirectly, immediately
following such merger or consolidation, more than eighty percent (80%) 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 (ii) 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 by shareowners of the Company of shares in a share exchange if
the shareowners of the Company, immediately before such share exchange, do not
own, directly or indirectly, immediately following such share exchange, more
than eighty percent (80%) 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.
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 entity that, immediately prior to such acquisition, is
entirely owned (directly or indirectly) by shareowners of the Company in the
same proportions as their ownership of stock in the Company immediately prior to
such acquisition, (iii) any "Grandfathered Dorrance Family shareowner" (as
hereinafter defined) or (iv) any Person who has acquired such Voting Securities
directly from any Grandfathered Dorrance Family shareowner but only if such
Person has executed an agreement that is approved by two-thirds of the Board and
pursuant to which such Person has agreed that he or she (or they) will not
increase his or her (or their) Beneficial Ownership (directly or indirectly) to
thirty percent (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 shareowner" means at any time a
"Dorrance Family shareowner" (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 April 1, 1998, (w) Voting Securities
acquired directly from the Company, (x) Voting Securities acquired directly from
another Grandfathered Dorrance Family shareowner, (y) Voting Securities that are
also Beneficially Owned by other Grandfathered Dorrance Family shareowners at
the time in question, and (z) Voting Securities acquired after April 1, 1998
other than directly from the Company or from another Grandfathered Dorrance
Family shareowner 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 shareowner" who
or which is at the time in question the Beneficial Owner of Voting Securities
that are not specified in clauses (v), (w), (x), (y) and (z) of the immediately
preceding sentence shall not be a Grandfathered Dorrance Family shareowner at
the time in question. For purposes of this Section, "Dorrance Family
shareowners" means 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
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outstanding Voting Securities as a result of the acquisition of Voting
Securities by the Company that, 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
that increases the percentage of the then outstanding Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control shall occur.
sec.11.5. EFFECT OF CHANGE IN CONTROL ON OPTIONS AND SARS. Upon a Change in
Control, (a) all Options and SARs outstanding on the date of such Change in
Control shall become immediately and fully exercisable and (b) any Participant
who may be subject to liability under Section 16(b) of the 1934 Act, will be
permitted to surrender for cancellation for a period of 60 days commencing after
the later of such Change in Control or the expiration of six months from the
date of grant, any Option or SAR (or portion of an Option or SAR), to the extent
not yet exercised and the Participant will be entitled to receive a cash payment
in an amount equal to the excess, if any, in respect of each Option or SAR
surrendered, (i)(A) except as described in clause (B) below, the greater of (x)
the Fair Market Value, on the date preceding the date of surrender of the shares
subject to the Option or SAR (or portion thereof) surrendered or (y) the
Adjusted Fair Market Value of the Shares subject to the Option or SAR (or
portion thereof) surrendered or (B) in the case of an Incentive Stock Option or
an SAR issued in connection with an Incentive Stock Option, the Fair Market
Value, on the date preceding the date of surrender, of the Shares subject to the
Option or SAR (or portion thereof) surrendered, over (ii) the aggregate purchase
price for such Shares under the Option or SAR.
sec.11.6. EFFECT OF CHANGE IN CONTROL ON RESTRICTED STOCK. Upon a Change in
Control, all restrictions upon any shares of Restricted Stock other than
Restricted Stock that is subject to performance related restrictions
("Performance Restricted Stock") shall lapse immediately and all such shares
shall become fully vested in the Participant and shall promptly be delivered to
the Participant.
sec.11.7. EFFECT OF CHANGE IN CONTROL ON PERFORMANCE RESTRICTED STOCK AND
PERFORMANCE UNITS.
(a) Upon a Change in Control, the Participant shall (i) become vested in, and
restrictions shall lapse on, the greater of (A) fifty percent (50%) of the
Performance Restricted Stock or Performance Units or (B) a pro rata portion of
such Performance Restricted Stock based on the portion of the Performance Period
that has elapsed to the date of the Change in Control and the aggregate vesting
percentage determined pursuant to this clause (B) shall be applied to vesting
first such awards granted the earliest in time preceding the Change in Control
(the "Vested Performance Awards") and (ii) be entitled to receive (X) in respect
of all Performance Units that become vested as a result of a Change in Control,
a cash payment within 30.days after such Change in Control equal to the product
of the then current value of a Performance Unit multiplied by the number of
Performance Units that become vested in accordance with this Section 11.7 and
(Y) in respect of all shares of Performance Restricted Stock that become vested
as a result of a Change in Control, the prompt delivery of such shares.
(b) With respect to any shares of Performance Restricted Stock or Performance
Units that do not become vested pursuant to Section 11.7(a) (the "Continuing
Awards"), such shares or units (or the proceeds thereof) shall continue to be
outstanding for the remainder of the applicable Performance Period (as if such
shares or units were the only shares or units granted in respect of each such
Performance Period) and subject to the applicable Award Criteria as modified
below.
sec.11.8. AMENDMENT OR TERMINATION.
(a) This Article XI shall not be amended or terminated at any time if any such
amendment or termination would adversely affect the rights of any Participant
under the Plan.
(b) For a period of 24 months following a Change in Control, the Plan shall not
be terminated (unless replaced by a comparable long-term incentive plan) and
during such period the Plan (or such replacement plan) shall be administered in
a manner such that Participants will be provided with long-term incentive awards
producing reward opportunities generally comparable to those provided prior to
the Change in Control. Any amendment or termination of the Plan prior to a
Change in Control that (i) was at the request of a third party who has indicated
an
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intention or taken steps reasonably calculated to effect a Change in Control or
(ii) otherwise arose in connection with or in anticipation of a Change in
Control, shall be null and void and shall have no effect whatsoever.
(c) Following a Change in Control, the Plan shall be amended as necessary to
make appropriate adjustments to the Award Criteria for the Continuing Awards for
(i) any negative effect that the costs and expenses incurred by the Company and
its Subsidiaries in connection with the Change in Control may have on the
achievement of Performance Goals under the Plan and (ii) any changes to the
Company and/or its Subsidiaries (including, but not limited to, changes in
corporate structure, capitalization and increased interest expense as a result
of the incurrence or assumption by the Company of acquisition indebtedness)
following the Change in Control so as to preserve the reward opportunities and
Award Criteria for comparable performance under the Plan as in effect on the
date immediately prior to the Change in Control.
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APPENDIX B
VLASIC FOODS INTERNATIONAL INC.
------------------------
ANNUAL INCENTIVE PLAN
------------------------
Dated: March 30, 1998
<PAGE> 38
ARTICLE I
PURPOSE AND EFFECTIVE DATE
sec.1.1. PURPOSE. The purpose of the Plan is to provide annual financial
incentives for selected employees of the Vlasic Foods International Group,
thereby promoting the growth and financial success of the Vlasic Foods
International Group by (i) attracting and retaining employees of outstanding
ability, (ii) strengthening the Vlasic Foods International Group's capability to
develop, maintain, and direct a competent management team, (iii) motivating
employees to achieve Performance Goals and objectives, and (iv) providing
incentive compensation opportunities competitive with those of other major
corporations.
sec.1.2. EFFECTIVE DATE AND EXPIRATION OF PLAN. The Plan was approved by
Campbell Soup Company, as the sole shareholder of Vlasic Foods International
Inc., and is effective March 30, 1998, which shall be the Effective Date. Unless
earlier terminated by the Board, the Plan shall continue indefinitely.
ARTICLE II
DEFINITIONS
The following words and phrases, as used in the Plan, shall have these meanings:
sec.2.1. "BOARD" means the Board of Directors of the Company.
sec.2.2. "CAUSE" means the termination of a Participant's employment by reason
of his or her engaging in conduct that constitutes willful gross misconduct that
is demonstrably and materially injurious to the Company or a Subsidiary,
monetarily or otherwise, misappropriation of funds, willful and material
misrepresentation to the directors or officers of his or her employer, gross
negligence in the performance of the Participant's duties having a material
adverse effect on the business, operations, assets, properties or financial
condition of the Company or a Subsidiary, or entering into competition with the
Company or a Subsidiary. No act, nor failure to act, on the Participant's part
shall be considered "willful" unless he or she has acted, or failed to act, with
an absence of good faith and without a reasonable belief that his or her action
or failure to act was in the best interest of the Company and its Subsidiaries.
sec.2.3. "CODE" means the Internal Revenue Code of 1986, as amended.
sec.2.4. "COMMITTEE" means the Compensation and Organization Committee of the
Board. All members of the Committee shall be "Outside Directors," as defined or
interpreted for purposes of Section 162(m) of the Code, and "Disinterested
Persons," within the meaning of Rule 16b-3 under the Securities Exchange Act of
1934 (the "1934 Act").
sec.2.5. "COMPANY" means Vlasic Foods International Inc. and its successors and
assigns.
sec.2.6. "DEFERRED COMPENSATION PLAN" means the Vlasic Foods International Inc.
Deferred Compensation Plan.
sec.2.7. "ELIGIBLE EMPLOYEE" means a person who is a regular salaried employee
of the Vlasic Foods International Group and who, in the opinion of the
Committee, is a key employee whose performance can contribute to the success of
the Company or a Subsidiary.
sec.2.8. "FAMILY MEMBER" means the spouse, a child, a stepchild, a parent, a
brother or a sister of the Participant, or any other person in such class of
relationship to the Participant as the Committee may approve.
sec.2.9. "PERFORMANCE GOALS" means the goals established by the Committee
pursuant to Section 5.1.
sec.2.10. "PARTICIPANT" means a person to whom an award of incentive
compensation has been made under the Plan.
sec.2.11. "PRESIDENT" means the President of the Company.
sec.2.12. "SUBSIDIARY" means a corporation, domestic or foreign, the majority of
the voting stock of which is owned directly or indirectly by the Company.
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sec.2.13. "VLASIC FOODS INTERNATIONAL GROUP" means the Company and all of its
Subsidiaries on and after the Effective Date.
ARTICLE III
ADMINISTRATION
sec.3.1. ADMINISTRATION. The Plan shall be administered by the Committee or its
delegate or successor. The Committee shall have all necessary powers to
administer and interpret the Plan, such powers to include the authority to
select Eligible Employees to whom awards may be granted under the Plan and to
determine the amount of any award of incentive compensation to be granted to any
Eligible Employee.
sec.3.2. COMMITTEE AUTHORITY. The Committee shall have full power and authority
to adopt such rules, regulations and instruments for the administration of the
Plan and for the conduct of its business as the Committee deems necessary or
advisable. The Committee's interpretations of the Plan, and all actions taken
and determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its shareowners and any employee of the Company or a Subsidiary.
ARTICLE IV
PARTICIPATION
Participants in the Plan shall be selected by the Committee from among Eligible
Employees, based upon such criteria as the Committee may from time to time
determine.
ARTICLE V
AWARDS
sec.5.1. ESTABLISHMENT OF PERFORMANCE GOALS. Prior to the beginning of each
fiscal year after the Effective Date, the Committee shall establish, in writing,
Performance Goals for the Company and its various operating units and its
Subsidiaries. The goals shall be comprised of specified annual levels of one or
more performance criteria as the Committee may deem appropriate. Such goals may
include, but shall not be limited to, earnings per share, net earnings,
operating earnings, unit volume, net sales, market share, balance sheet
measurements, revenue, cash flow, cash return on assets, shareowner return,
return on equity, return on capital or other value-based performance measures.
The Committee may disregard or offset the effect of any special charges or
gains, the cumulative effect of a change in accounting, or the effect of other
expenses or losses that are unusual in nature or infrequent in occurrence, in
determining the attainment of Performance Goals. Awards may also be made payable
when Company performance, as measured by one or more of the above criteria, as
compared to peer companies, meets or exceeds an objective target established by
the Committee.
sec.5.2. ESTABLISHMENT OF AWARD CATEGORIES. Prior to the beginning of each
fiscal year of the Company, the Committee shall determine the classes of
employees eligible to receive awards of incentive compensation based upon job
grade and salary levels or such other procedures for eligibility for awards as
the Committee may deem desirable. The class of employees determined to be
eligible for awards shall not change after the close of the fiscal year.
sec.5.3. ESTABLISHMENT OF AWARD AMOUNTS. After the close of the fiscal year,
the Committee may fix a maximum aggregate dollar amount that may be granted for
awards for that fiscal year. The amounts of awards to be granted with respect to
particular employees within the eligible classes may be determined after the
close of the fiscal year under procedures established by the Committee.
sec.5.4. GRANT OF AWARDS. The Committee shall, in granting awards to particular
Eligible Employees for any fiscal year, take into consideration:
(a) the performance of the Company or the organizational unit employing the
Eligible Employee based upon attainment of Performance Goals;
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(b) as among Participants, the contribution of the Participant during the fiscal
year to the success of the Company, including the Participant's (i) position and
level of responsibility, (ii) business unit, division or department
achievements, and (iii) management assessment of individual performance.
No award or awards may be granted to any Participant for any fiscal year that
exceeds in the aggregate $3,000,000. The Committee shall have no discretion to
increase such awards.
sec.5.5. COMMITTEE DISCRETION. The Committee shall have complete discretion
with respect to the determination of the Eligible Employees to whom awards of
incentive compensation shall be granted and the granting of such awards.
sec.5.6. PAYMENT OF AWARDS. Incentive compensation awards made pursuant to
Article V shall be paid entirely in cash as soon as possible after grant
approval, unless the Participant is eligible for and has elected to defer
receipt of a portion or all of such award in accordance with the terms of the
Deferred Compensation Plan.
ARTICLE VI
LIMITATIONS
sec.6.1. RIGHTS NOT ABSOLUTE. No person shall at any time have any right to be
granted an award hereunder for any fiscal year, and no person shall have
authority to enter into an agreement committing the Company to make or pay an
award, nor shall any person have authority to make any representation or
warranty on behalf of the Company with respect thereto.
sec.6.2. PARTICIPANT RIGHTS LIMITED TO PLAN. Participants receiving awards
shall have no rights to such awards except as set forth in this Plan and the
Deferred Compensation Plan.
sec.6.3. NO RIGHT TO CONTINUED EMPLOYMENT. Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board or the
Committee under the Plan, nor any provision of the Plan, shall be construed as
giving to any person the right to be retained in the employ of the Company or
any Subsidiary.
ARTICLE VII
AMENDMENT, SUSPENSION OR TERMINATION
OF THE PLAN IN WHOLE OR IN PART
The Board may amend, suspend or terminate the Plan in whole or in part; but it
may not affect adversely rights or obligations with respect to awards
theretofore made.
ARTICLE VIII
CHANGE IN CONTROL OF THE COMPANY
sec.8.1. CONTRARY PROVISIONS. Notwithstanding anything contained in the Plan to
the contrary, the provisions of this Article VIII shall govern and supersede any
inconsistent terms or provisions of the Plan.
sec.8.2. DEFINITION OF "CHANGE IN CONTROL YEAR." For purposes of the Plan,
"Change in Control Year" means a fiscal year of the Company in which a Change in
Control occurs.
sec.8.3. DEFINITION OF "CHANGE IN CONTROL." For purposes of the Plan "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 Section 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 8.3(a), the Voting Securities acquired directly
from the Company by any Person shall be excluded from the determination of such
Person's Beneficial Ownership
B-3
<PAGE> 41
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 the later of April 1, 1998 or the first date that
the membership of the Board reaches seven (7), are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least two-thirds of
the Board; provided, however, that if the election, or nomination for election
by the Company's shareowners, 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 the Plan, be considered as a member of the Incumbent Board; or
(c) Approval by shareowners of the Company of (i) a merger or consolidation
involving the Company if the shareowners of the Company, immediately before such
merger or consolidation, do not own, directly or indirectly, immediately
following such merger or consolidation, more than eighty percent (80%) 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 (ii) 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 by shareowners of the Company of shares in a share exchange if
the shareowners of the Company, immediately before such share exchange, do not
own, directly or indirectly, immediately following such share exchange, more
than eighty percent (80%) 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.
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 entity that, immediately prior to such acquisition, is
entirely owned (directly or indirectly) by shareowners of the Company in the
same proportions as their ownership of stock in the Company immediately prior to
such acquisition, (iii) any "Grandfathered Dorrance Family shareowner" (as
hereinafter defined) or (iv) any Person who has acquired such Voting Securities
directly from any Grandfathered Dorrance Family shareowner but only if such
Person has executed an agreement that is approved by two-thirds of the Board and
pursuant to which such Person has agreed that he or she (or they) will not
increase his or her (or their) Beneficial Ownership (directly or indirectly) to
thirty percent (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 shareowner" means at any time a
"Dorrance Family shareowner" (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 April 1, 1998, (w) Voting Securities
acquired directly from the Company, (x) Voting Securities acquired directly from
another Grandfathered Dorrance Family shareowner, (y) Voting Securities that are
also Beneficially Owned by other Grandfathered Dorrance Family shareowners at
the time in question, and (z) Voting Securities acquired after April 1, 1998
other than directly from the Company or from another Grandfathered Dorrance
Family shareowner 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 shareowner" who
or which is at the time in question the Beneficial Owner of Voting Securities
that are not specified in clauses (v), (w), (x), (y) and (z) of the immediately
preceding sentence shall not be a Grandfathered Dorrance Family shareowner at
the time in question. For purposes of this Section, "Dorrance Family
shareowners" means 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 that, by
reducing
B-4
<PAGE> 42
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 that increases the percentage of the then
outstanding Voting Securities Beneficially Owned by the Subject Person, then a
Change in Control shall occur.
sec.8.4. DEFINITION OF "TERMINATION FOLLOWING A CHANGE IN CONTROL." For
purposes of the Plan, "Termination Following a Change in Control" means a
termination of employment:
(a) initiated by the employer of the Participant, other than for Cause; or
(b) initiated by the Participant following one or more of the following events:
(i) an assignment to the Participant of any duties materially inconsistent with,
or a reduction or change by his or her employer in the nature or scope of the
authority, duties or responsibilities of the Participant from those assigned to
or held by the Participant immediately prior to the Change in Control;
(ii) any removal of the Participant from the positions held immediately prior to
the Change in Control, except in connection with promotions to positions of
greater responsibility and prestige;
(iii) any reduction by his or her employer in the Participant's compensation as
in effect immediately prior to the Change in Control or as the same may be
increased thereafter;
(iv) revocation or any modification of any employee benefit plan, or any action
taken pursuant to the terms of any such plan, that materially reduces the
opportunity of the Participant to receive benefits under any such plan;
(v) a transfer or relocation of the site of employment of the Participant
immediately preceding the Change in Control, without the Participant's express
written consent, to a location more than fifty (50) miles distant therefrom, or
that is otherwise an unacceptable commuting distance from the Participant's
principal residence at the date of the Change in Control; or
(vi) a requirement that the Participant undertake business travel to an extent
substantially greater than the Participant's business travel obligations
immediately prior to the Change in Control.
sec.8.5. EFFECT OF CHANGE IN CONTROL. During any Change in Control Year, each
Eligible Employee who is a Participant on the date immediately prior to the
Change in Control (a) who has a Termination Following a Change in Control prior
to the end of the Change in Control Year or (b) who is in the employ of the
Company or any Subsidiary on the last day of the Change in Control Year, shall
be entitled to receive, within 30 days thereafter, a cash payment equal to the
greater of (x) his or her target award for the Change in Control Year or (y) the
average of the awards paid or payable under the Plan for the two most recent
fiscal years ended prior to the Change in Control Year (the "Award"); provided,
however that the amount of the Award to be paid to each Participant as provided
in clause (a) above shall be multiplied by a fraction, the numerator of which
shall be the number of calendar days from and including the first day of the
Change in Control Year through and including the date the Participant's
employment is terminated and the denominator of which shall be 365; provided
further, however, that the Award to be paid to any Participant who is a party to
an individual severance agreement shall be reduced by the amount of any
equivalent bonus payment made under such an individual agreement.
sec.8.6. CONTINUATION OF THE PLAN. For a period of two years following a Change
in Control, the Plan shall not be terminated or amended in any way (including,
but not limited to, restricting or limiting any Eligible Employee's right to
participate in the Plan), nor shall the manner in which the Plan is administered
be changed in a way that adversely affects the level of participation or reward
opportunities of any Participant; provided, however, that the Plan shall be
amended as necessary to make appropriate adjustments for (a) any negative effect
that the costs and expenses incurred by the Company and its Subsidiaries in
connection with the Change in Control may have on the benefits payable under the
Plan and (b) any changes to the Company and/or its Subsidiaries (including, but
not limited to, changes in corporate structure, capitalization and increased
interest expense as a result of the incurrence or assumption by the Company of
acquisition indebtedness) following the Change in Control so as to
B-5
<PAGE> 43
preserve the reward opportunities and performance targets for comparable
performance under the Plan as in effect on the date immediately prior to the
Change in Control.
sec.8.7. AMENDMENT OR TERMINATION.
(a) This Article XIII shall not be amended or terminated at any time.
(b) Any amendment or termination of the Plan prior to a Change in Control that
(i) was at the request of a third party who has indicated an intention or taken
steps reasonably calculated to effect a Change in Control or (ii) otherwise
arose in connection with or in anticipation of a Change in Control, shall be
null and void and shall have no effect whatsoever.
ARTICLE IX
MISCELLANEOUS
sec.9.1. NO EMPLOYMENT CONTRACT. The establishment or existence of the Plan
shall not confer upon any individual the right to be continued as an employee.
The employer expressly reserves the right to discharge any employee whenever in
its judgment its best interests so require.
sec.9.2. NON-ALIENATION. No amounts payable under the Plan shall be subject in
any manner to anticipation, assignment, or voluntary or involuntary alienation.
sec.9.3. GOVERNING LAW. This Plan shall be governed by and construed in
accordance with the laws of the State of New Jersey to the extent not preempted
by federal law.
sec.9.4. WITHHOLDING. The employer shall withhold from any benefits payable
under the Plan all federal, state and local income taxes or other taxes required
to be withheld pursuant to applicable law.
sec.9.5. INCAPACITY. If the Committee, in its sole discretion, deems a
Participant who is eligible to receive any payment hereunder to be incompetent
to receive the same by reason of age, illness or any infirmity or incapacity of
any kind, the Committee may direct the employer to apply such payment directly
for the benefit of such person, or to make payment to any person selected by the
Committee to disburse the same for the benefit of the Participant. Payments made
pursuant to this Section shall operate as a discharge, to the extent thereof, of
all liabilities of the employer, the Committee and the Plan to the person for
whose benefit the payments are made.
sec.9.6. NUMBER. For purposes of the Plan, the singular shall include the
plural and vice versa.
sec.9.7. BINDING UPON SUCCESSORS. The liabilities under the Plan shall be
binding upon any successor, assign or purchaser of the employer or any purchaser
of substantially all of the assets of the employer.
sec.9.8. TRUST ARRANGEMENT. All benefits under the Plan represent an unsecured
promise to pay by the Company and Subsidiaries. The Plan shall be unfunded and
the benefits hereunder shall be paid only from the general assets of the Company
and its respective Subsidiaries, resulting in the Participants having no greater
rights than the general creditors of the Company or such Subsidiaries.
Notwithstanding the foregoing, nothing herein shall prevent or prohibit the
Company or the respective Subsidiaries from establishing a trust or other
arrangement for the purpose of providing for the payment of the benefits payable
under the Plan at any time.
B-6
<PAGE> 44
DIRECTIONS TO
HYATT REGENCY GREENWICH:
FROM KENNEDY AIRPORT
Follow the Van Wyck Expressway 678 to the Whitestone Expressway. Go over the
Whitestone Bridge. Once over the bridge, follow I-95 North. Get off at the Old
Greenwich Exit 5. Make a right at the end of the exit onto Route 1/East Putnam
Avenue. Follow for three (3) traffic lights. At the third light make a right
into the Hotel entrance.
FROM LA GUARDIA AIRPORT
Follow the Grand Central Parkway to the Van Wyck Expressway to the Whitestone
Bridge Expressway exit. Go over the bridge and follow signs to I-95 North New
England. Get off at the Old Greenwich Exit 5. Make a right at the end of the
exit onto Route 1/East Putnam Avenue. Follow for three (3) traffic lights. At
the third light make a right into the Hotel entrance.
FROM NEW JERSEY
Follow the Garden State Parkway North to 287 East (Tappan Zee Bridge). Once over
the bridge, take Exit 8 (New England/287 East). Follow 287 East to I-95 North.
Get off at the Old Greenwich Exit 5. Make a right at the end of the exit onto
Route 1/East Putnam Avenue. Follow for three (3) traffic lights. At the third
light make a right into the Hotel entrance.
FROM 684 (WESTCHESTER AIRPORT)
Follow 684 South to 287 East. Take 287 East to I-95 North. Get off at the Old
Greenwich Exit 5. Make a right at the end of the exit onto Route 1/East Putnam
Avenue. Follow for three (3) traffic lights. At the third light make a right
into the Hotel entrance.
- ---------------------------------------------------------
[VLASIC LOGO]
Annual Meeting of Shareowners
Hyatt Regency Greenwich
1800 East Putnam Avenue
Old Greenwich, Connecticut 06870
December 7, 1999
10:00 A.M.
ADMISSION TICKET
- ---------------------------------------------------------
[MAP]
- - Located off I-95 between exits 5 and 6, on East Putnam Ave/Route 1
- - 45 minutes from LaGuardia and Kennedy Airports; 15 minutes from
Westchester County Airport; 5 minutes from the Metro-North New Haven
train line
<PAGE> 45
PROXY
VLASIC FOODS INTERNATIONAL INC.
VLASIC PLAZA
SIX EXECUTIVE CAMPUS
CHERRY HILL, NEW JERSEY 08002-4112
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING ON DECEMBER 7, 1999.
The undersigned hereby appoints Donald J. Keller, or, in his absence, Robert F.
Bernstock, or, in the absence of both of them, Norma B. Carter, and each or any
of them, proxies with full power of substitution, to vote all shares the
undersigned is entitled to vote, at the Annual Meeting of Shareowners of Vlasic
Foods International Inc. to be held at The Hyatt Regency Greenwich, 1800 East
Putnam, Old Greenwich, Connecticut, at 10:00 a.m. and at any adjournments
thereof, on all matters coming before the meeting, including the items referred
to on the reverse side hereof. If the undersigned is a participant in one of the
Vlasic Foods International Inc. Savings and 401(k) Plans or in one of the
Campbell Soup Company Savings and 401(k) Plans (any of such plans, a "Savings
Plan"), then the undersigned hereby directs the respective trustee of the
applicable Savings Plan to vote all shares of Vlasic Foods International Inc.
Common Stock in the undersigned's Savings Plan account at the aforesaid Annual
Meeting and at any adjournments thereof, on all matters coming before the
meeting, including the items referred to on the reverse side hereof.
(Change of Address/Comments)
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the re-
verse side of this card)
To vote in accordance with the Board of Directors' recommendations just sign the
reverse side; no boxes need to be marked. Please return proxy card promptly
using the enclosed envelope.
-----------
SEE REVERSE
SIDE
-----------
- --------------------------------------------------------------------------------
* FOLD AND DETACH PROXY CARD HERE AND RETURN IN ENCLOSED ENVELOPE *
[VLASIC LOGO]
ANNUAL MEETING OF SHAREOWNERS
DECEMBER 7, 1999
10:00 a.m.
HYATT REGENCY GREENWICH
1800 EAST PUTNAM
OLD GREENWICH, CONNECTICUT
PLEASE NOTE: IF YOU PLAN TO ATTEND THE 1999 ANNUAL MEETING OF SHAREOWNERS,
PLEASE MARK THE APPROPRIATE BOX ON THE REVERSE SIDE OF THE PROXY CARD.
<PAGE> 46
Please mark your
[x] votes as in this
example.
This Proxy, when properly executed, will be voted in the manner directed herein.
If no directions are made, this proxy will be voted "FOR" the Nominees for
Director in Item 1 and "FOR" Items 2, 3 and 4.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR all Nominees and FOR Items 2, 3,
and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD If marked, vote is withheld from
1. Election of all nominees listed.
Directors [ ] [ ]
For, except vote withheld from the following nominee(s):
________________________________________________________________________
NOMINEES FOR DIRECTOR:
Robert F. Bernstock, Robert T. Blakely, Morris A. Cohen, Tristram C. Colket,
Jr., Lawrence C. Karlson, Donald J. Keller, Shaun F. O'Malley
FOR AGAINST ABSTAIN
2. Approval of the Company's 1998
Long-Term Incentive Plan. [ ] [ ] [ ]
3. Approval of the Company's
Annual Incentive Plan. [ ] [ ] [ ]
4. Ratification of Appointment of
Independent Accountants. [ ] [ ] [ ]
Please sign EXACTLY as name appears hereon. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
* FOLD AND DETACH PROXY CARD HERE AND RETURN IN ENCLOSED ENVELOPE *
