UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934 (Amendment No.__)

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Del Monte Foods Company

(Name of Registrant as Specified In Its Charter)

(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)

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DEL MONTE FOODS COMPANY
One Market @ The Landmark
San Francisco, California 94105

 

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

To Be Held September 24, 2009

 

Important Notice regarding the Availability of Proxy Materials for the
Stockholder Meeting to be Held on September 24, 2009

The Proxy Statement and Annual Report to Stockholders
are available at http://bnymellon.mobular.net/bnymellon/dlm

 

Dear Stockholder:

 

You are invited to attend the 2009 Annual Meeting of Stockholders of Del Monte Foods Company, a Delaware corporation (the “Company”). The annual meeting will be held on Thursday, September 24, 2009 at 10:00 a.m. Pacific Time at the Hyatt Regency San Francisco, Five Embarcadero Center, San Francisco, California 94111 for the following purposes:

 

 

These items of business are more fully described in the Proxy Statement accompanying this Notice.

 

YOUR BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR THE NOMINEES AND IN FAVOR OF THE OTHER PROPOSALS OUTLINED IN THE ACCOMPANYING PROXY STATEMENT.

 

The record date for the 2009 Annual Meeting of Stockholders is July 30, 2009. Only stockholders of record at the close of business on that date may vote at the annual meeting or any adjournment thereof.

 

By Order of the Board of Directors,

 

James Potter

General Counsel and Secretary

 

San Francisco, California

August 19, 2009

 

 

 

Table of Contents

 

DEL MONTE FOODS COMPANY
One Market @ The Landmark
San Francisco, California 94105

 

PROXY STATEMENT
FOR THE 2009 ANNUAL MEETING OF STOCKHOLDERS

 

 

Why am I receiving these materials?

 

We sent you this proxy statement and the enclosed proxy card because the Board of Directors of Del Monte Foods Company (sometimes referred to as “we,” “us,” “our,” “the Company” or “Del Monte”) is soliciting your proxy to vote at the 2009 Annual Meeting of Stockholders and at any adjournment or postponement thereof. The annual meeting will be held on Thursday, September 24, 2009 at 10:00 a.m. Pacific Time at the Hyatt Regency San Francisco, Five Embarcadero Center, San Francisco, California 94111. You are invited to attend the annual meeting and we request that you vote on the proposals described in this proxy statement. However, you do not need to attend the annual meeting to vote your shares. Instead, you may simply complete, sign and return the enclosed proxy card.

 

The Company intends to mail this proxy statement and accompanying proxy card on or about August 20, 2009 to all stockholders of record entitled to vote at the annual meeting.

 

Who can vote at the annual meeting?

 

Only stockholders of record at the close of business on July 30, 2009 will be entitled to vote at the annual meeting. On this record date, there were 197,778,014 shares of common stock outstanding and entitled to vote.

 

Stockholder of Record: Shares Registered in Your Name

 

If on July 30, 2009 your shares were registered directly in your name with the Company’s transfer agent, BNY Mellon Shareowner Services, then you are a stockholder of record. As a stockholder of record, you may vote in person at the annual meeting or vote by proxy. Whether or not you plan to attend the annual meeting, we urge you to fill out and return the enclosed proxy card or vote via the internet or by telephone to ensure your vote is counted.

 

Beneficial Owner: Shares Registered in the Name of a Broker or Bank

 

If on July 30, 2009 your shares were held in an account at a brokerage firm, bank, dealer, or other similar organization, then you are the beneficial owner of shares held in “street name” and these proxy materials are being forwarded to you by that organization. The organization holding your account is considered the stockholder of record for purposes of voting at the annual meeting. As a beneficial owner, you have the right to direct your broker or other agent on how to vote the shares in your account. You are also invited to attend the annual meeting. However, because you are not the stockholder of record, you may not vote your shares in person at the annual meeting unless you request and obtain a valid proxy from your broker or other agent.

What am I voting on?

 

There are five matters scheduled for a vote:

 

 

How do I vote?

 

Stockholder of Record: Shares Registered in Your Name

 

If you are a stockholder of record, you may vote in person at the annual meeting or vote by proxy using the enclosed proxy card, the internet or telephone. Whether or not you plan to attend the annual meeting, we urge you to vote by proxy to ensure your vote is counted. You may still attend the annual meeting and vote in person if you have already voted by proxy.

 

 

Please note that voting instructions submitted via the internet or by telephone must be received by 11:59 p.m. Eastern Time on Wednesday, September 23, 2009.

 

Beneficial Owner: Shares Registered in the Name of Broker or Bank

 

If you are a beneficial owner of shares registered in the name of your broker, bank, or other agent, you should have received a proxy card and voting instructions with these proxy materials from that organization rather than from Del Monte. Simply complete and mail the proxy card to ensure that your vote is counted. Alternatively, you may vote by telephone or over the internet as instructed by your broker or bank. To vote in person at the annual meeting, you must obtain a valid proxy from your broker, bank, or other agent. Follow the instructions from your broker, bank or other agent included with these proxy materials, or contact your broker, bank or other agent to request a proxy form.

How many votes do I have?

 

On each matter to be voted upon, you have one vote for each share of common stock you own as of July 30, 2009.

 

What if I return a proxy card but do not make specific choices?

 

If you return a signed and dated proxy card without marking any voting selections, your shares will be voted:

 

 

The Company does not expect that any matters other than the election of directors and the other proposals described herein will be brought before the annual meeting. If any other matter is properly presented at the annual meeting, your proxy (one of the individuals named on your proxy card) will vote your shares using his best judgment.

 

Who is paying for this proxy solicitation?

 

We will pay for the entire cost of soliciting proxies. In addition to these mailed proxy materials, our directors and employees may also solicit proxies in person, by telephone, or by other means of communication. Directors and employees will not be paid any additional compensation for soliciting proxies. We may retain the services of Georgeson Inc. in connection with soliciting proxies for the 2009 Annual Meeting of Stockholders for an estimated fee of $12,500 to $15,000, plus appropriate out-of-pocket expenses. We may also reimburse brokerage firms, banks and other agents for the cost of forwarding proxy materials to beneficial owners.

 

What does it mean if I receive more than one proxy card?

 

If you receive more than one proxy card, your shares are registered in more than one name or are registered in different accounts. Please complete, sign and return each proxy card to ensure that all of your shares are voted.

 

Can I change my vote after submitting my proxy?

 

Yes. You can revoke your proxy at any time before the final vote at the annual meeting. You may revoke your proxy in any one of the following ways:

 

 

 

Please note that to be effective, your new proxy card, internet or telephonic voting instructions or written notice of revocation must be received by the Corporate Secretary prior to the annual meeting and, in the case of internet or telephonic voting instructions, must be received before 11:59 p.m. Eastern Time on Wednesday, September 23, 2009.

 

How will voting on any business not described in this proxy statement be conducted?

 

The Company does not know of any business to be considered at the 2009 Annual Meeting of Stockholders other than the items described in this proxy statement. If any other business is properly presented at the 2009 Annual Meeting, your proxy grants authority to the proxy holders to vote on such matters in their discretion.

 

When are stockholder proposals or nominations due for next year’s annual meeting?

 

The Company currently anticipates that the 2010 Annual Meeting of Stockholders will be held on September 23, 2010. In accordance with the Company’s Bylaws, if you wish to submit a proposal for consideration at next year’s annual meeting but are not requesting that such proposal be included in next year’s proxy materials, or if you wish to nominate a person for election to the Board of Directors at next year’s annual meeting, your notice of such a proposal or nomination must be submitted in writing and delivered to, or mailed and received at, the principal executive offices of the Company not less than 90 days nor more than 120 days before the one year anniversary of the 2009 Annual Meeting of Stockholders. Accordingly, any such proposal or nomination must be received by the Company no later than June 26, 2010 (but no earlier than May 27, 2010), and should be delivered or mailed to the following address: Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575. Please note that if the date of the 2010 Annual Meeting of Stockholders changes from the current expected date of September 23, 2010 and the new meeting date is more than 30 days before or more than 60 days after September 24, 2010 (the one year anniversary of the 2009 Annual Meeting of Stockholders) then your notice must be received no later than 90 days before the actual date of the 2010 Annual Meeting of Stockholders or, if later, 10 days following the day on which we publicly disclose the new scheduled date of the 2010 Annual Meeting of Stockholders.

 

In order to be properly submitted to the Secretary of the Company, a proposal or nomination by a Del Monte stockholder must contain specific information as required under Del Monte’s Bylaws, including without limitation (i) the name and address of the stockholder making the proposal, (ii) the class or series and number of shares that are owned of record or beneficially owned by such stockholder, and (iii) any material interest of such stockholder in the proposal. For further information regarding the procedures for nomination of directors by stockholders, including information required under Del Monte’s Bylaws, please see “Corporate Governance – Nomination Process.” If you would like a copy of Del Monte’s current Bylaws, please write to the Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575. Del Monte’s current Bylaws may also be found on the Company’s website at www.delmonte.com.

 

To be considered for inclusion in the Company’s proxy statement and form of proxy for the 2010 Annual Meeting of Stockholders, your stockholder proposal must be submitted in writing by April 22, 2010 to the Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575.

 

Without limiting the advance notice provisions in the Company’s Bylaws, which contain procedures that must be followed for a matter to be properly presented at an annual meeting, the Company management who are proxy holders will have discretionary authority to vote all shares for which they hold proxies with respect to any stockholder proposal or nomination received after the deadline for such proposals or nominations set forth in our Bylaws. Such discretionary authority may be exercised to oppose a proposal or nomination made by a stockholder.

How are votes counted?

 

Votes will be counted by the inspector of election appointed for the annual meeting, who will separately count “For” and “Against” votes, abstentions and broker non-votes. A “broker non-vote” occurs when a nominee holding shares for a beneficial owner does not vote on a particular proposal because the nominee does not have discretionary voting power with respect to that proposal and has not received instructions with respect to that proposal from the beneficial owner (despite voting on at least one other proposal for which it does have discretionary authority or for which it has received instructions). Discretionary authority is allowed for Proposal 1, Proposal 2, and Proposal 5, but not Proposal 3 or Proposal 4.

 

How many votes are needed to approve each proposal?

 

 

What is the quorum requirement?

 

A quorum of stockholders is necessary to hold a valid annual meeting. A quorum will be present if at least a majority of the outstanding shares are represented by proxy or by stockholders present and entitled to vote at the annual meeting. On the record date, there were 197,778,014 shares outstanding and entitled to vote. Thus, 98,889,008 shares must be represented by proxy or by stockholders present and entitled to vote at the annual meeting to have a quorum.

Your shares will be counted towards the quorum only if you submit a valid proxy (or one is submitted on your behalf by your broker or bank) or if you vote in person at the annual meeting. Abstentions and broker non-votes also will be counted towards the quorum requirement. If there is no quorum, the chairman of the annual meeting or holders of a majority of the votes present at the annual meeting may adjourn the annual meeting to another time or date.

 

How can I find out the results of the voting at the annual meeting?

 

Preliminary voting results will be announced at the annual meeting. Final voting results will be published in Del Monte’s Quarterly Report on Form 10-Q for the second quarter of its 2010 fiscal year.

 

What is “Notice and Access”?

 

“Notice and access” generally refers to rules governing how companies must provide proxy materials. Under the notice and access model, a company may select either of the following two options for making proxy materials available to stockholders:

 

 

A company may use a single method for all its stockholders, or use full set delivery for some while adopting the notice only option for others.

 

What is the Full Set Delivery Option?

 

Under the full set delivery option, a company delivers all proxy materials to its stockholders. This delivery can be by mail or, if a stockholder has previously agreed, by e-mail. In addition to delivering proxy materials to stockholders, the company must also post all proxy materials on a publicly accessible website and provide information to stockholders about how to access that website.

 

In connection with its 2009 Annual Meeting of Stockholders, Del Monte has elected to use the full set delivery option. Accordingly, you should have received the Del Monte proxy materials by mail or, if you previously agreed, by e-mail. These proxy materials include the Notice of Annual Meeting of Stockholders, proxy statement, proxy card and Annual Report. Del Monte has posted these materials at http://bnymellon.mobular.net/bnymellon/dlm.

 

What is the Notice Only Option?

 

Under the notice only option, a company must post all its proxy materials on a publicly accessible website. However, instead of delivering its proxy materials to stockholders, the company instead delivers a “Notice of Internet Availability of Proxy Materials.” The notice includes, among other matters:

 

 

If a stockholder requests paper copies of the proxy materials, these materials must be sent to the stockholder within three business days. Additionally, paper copies must be sent via first class mail.

 

Will Del Monte use the Notice Only Option in the Future?

 

Although Del Monte elected to use the full set delivery option in connection with the 2009 Annual Meeting of Stockholders, it may choose to use the notice only option in the future. By reducing the amount of materials that a company needs to print and mail, the notice only option provides an opportunity for cost savings as well as conservation of natural resources. However, many companies that have used the notice only option have also experienced a lower participation rate – meaning that fewer stockholders voted in these companies’ annual elections. Del Monte plans to evaluate the future possible cost savings as well as the possible impact on stockholder participation as it considers future use of the notice only option.

As a Stockholder, What Do I Need to Do?

 

If you would prefer to continue receiving paper copies of proxy materials if Del Monte elects to use the notice only option for future annual meetings, please mark the “Paper Copies” box on your proxy card (or provide this information when you vote telephonically or via the internet).

 

As noted above, if Del Monte elects to use the notice only option, it must provide paper copies via first class mail to any stockholder who, after receiving the Notice of Internet Availability of Proxy Materials, nevertheless requests paper copies. So, for example, even if you do not check the “Paper Copies” box now, you will still have the right to request delivery of a free set of proxy materials upon receipt of any Notice of Internet Availability of Proxy Materials in the future. Because first class postage is significantly costlier than bulk mail rates and because each such request must be processed on a stockholder-by-stockholder basis, the cost of responding to a single request for paper copies is likely to be significantly greater than the per stockholder cost Del Monte currently incurs in delivering proxy materials in bulk. Accordingly, requests for paper copies could significantly undermine or eliminate expected cost savings associated with the notice only option.

 

By developing in advance a database of stockholders who would prefer to continue receiving paper copies of proxy materials, Del Monte would be able to use the full set delivery option for these stockholders – using bulk mail to deliver the paper copies – while using the notice only option for other stockholders. We believe this would significantly reduce the number of requests for paper copies that Del Monte would need to process on a stockholder-by-stockholder basis and would position Del Monte to better capture cost savings should it elect to use the notice only option in the future. We appreciate your assistance in helping us develop this database through the proxy card, telephonic and internet voting processes.

 

 

Del Monte’s Board of Directors is divided into three classes. Each class consists, as nearly as possible, of one-third of the total number of directors, and each class has a three-year term. Vacancies on the Board of Directors may be filled by persons elected by a majority of the remaining directors. A director elected by the Board of Directors to fill a vacancy in a class shall serve for the remainder of the full term of that class, and until such director’s successor is elected and qualified or until such director’s death, resignation or removal. This includes vacancies created by an increase in the number of directors.

 

The Board of Directors presently has nine members. There are three directors in Class III, which is the class whose term of office expires in 2009. Each of the nominees for election to this class is currently a director of the Company and was selected by the Board of Directors as a nominee in accordance with the recommendation of the Nominating and Corporate Governance Committee. Messrs. Armacost and Martin have been members of the Board of Directors since they were appointed in December 2002. Mr. Wolford has been a member of the Board of Directors since April 1997, when Mr. Wolford was appointed to the Board of Directors following the recapitalization of Del Monte led by Texas Pacific Group. Messrs. Armacost, Martin and Wolford were each re-elected to the Board of Directors by the stockholders at the 2006 Annual Meeting of Stockholders. If elected at the 2009 Annual Meeting of Stockholders, each of the nominees would serve until the 2012 Annual Meeting of Stockholders and until his successor is elected and has qualified, or until such director’s death, resignation or removal.

 

In an uncontested election, directors shall be elected by the vote of a majority of the votes cast by shares present in person or represented by proxy and entitled to vote at the meeting. Under our Bylaws, an uncontested election is an election in which the number of nominees is not greater than the number of directors to be elected, as of the date that is 14 days in advance of the day we file our definitive proxy statement with the Securities and Exchange Commission. In a contested election, directors will be elected by plurality. In other words, in a contested election, the nominees with the most votes (whether or not a majority) will be elected.

 

The election of directors at the 2009 Annual Meeting of Stockholders is an uncontested election. Therefore, for Proposal 1, election of Samuel H. Armacost, Terence D. Martin and Richard G. Wolford as Class III directors, a nominee will be elected if the number of votes cast “For” that nominee exceeds the number of votes cast “Against” that nominee. Abstentions and broker non-votes will have no effect.

 

Prior to an uncontested election, each incumbent director nominee will submit to the Board of Directors an irrevocable written offer to resign following the election in the event the director fails to receive a majority of the votes cast in connection with his or her reelection. Each of Messrs. Armacost, Martin and Wolford has submitted such an offer to the Board in connection with the election of directors at the 2009 Annual Meeting of Stockholders.

 

If an incumbent director fails to receive a majority of the votes cast in connection with his or her reelection, the Nominating and Corporate Governance Committee of the Board (excluding any director who has failed to receive a majority of the votes cast), will consider such director’s offer to resign and make its recommendation to the Board within 60 days following certification of the election results. In the event a majority of the members of the Nominating and Corporate Governance Committee are nominees who do not receive a majority of the votes cast in connection with their reelection, the independent members of the Board not so affected will consider the offer to resign and make a recommendation or, in the alternative, such independent members of the Board may designate a committee of independent directors to perform the evaluation. The Board will consider the Nominating and Corporate Governance Committee’s or independent directors’ recommendation within 90 days following certification of the election results. We will publicly disclose the

Board’s determination with respect to any resignation offered under these circumstances by filing a Current Report on Form 8-K with the Securities and Exchange Commission.

 

The following is a brief biography of each nominee and each current director, including each director whose term will continue after the 2009 Annual Meeting of Stockholders.

 

Samuel H. Armacost

 

Mr. Armacost became a director of Del Monte in December 2002. Mr. Armacost has served as Chairman of the board of directors of SRI International, formerly Stanford Research Institute, an independent technology development and consulting organization, since 1998. He was a Managing Director of Weiss, Peck & Greer LLC from 1990 until 1998 and Managing Director of Merrill Lynch Capital Markets from 1987 until 1990. He was President, Director and Chief Executive Officer of BankAmerica Corporation from 1981 until 1986. Mr. Armacost also serves as a director of Chevron Corporation, Exponent, Inc., Callaway Golf Company and Franklin Resources, Inc. Mr. Armacost is 70.

 

Terence D. Martin

 

Mr. Martin became a director of Del Monte in December 2002. Mr. Martin was Senior Vice President and Chief Financial Officer of the Quaker Oats Company from 1998 until his retirement in 2001. From 1995 to 1998, he was Executive Vice President and Chief Financial Officer of General Signal Corporation. Mr. Martin was Chief Financial Officer and Member of the Executive Committee of American Cyanamid Company from 1991 to 1995, and served as Treasurer from 1988 to 1991. Mr. Martin also serves as a director of Dr. Pepper Snapple Group, Inc. Mr. Martin is 66.

 

Richard G. Wolford

 

Mr. Wolford joined Del Monte as Chief Executive Officer and a Director in April 1997. He was elected President of Del Monte in February 1998 and was elected Chairman of the Board in May 2000. From 1967 to 1987, he held a variety of positions at Dole Foods, including President of Dole Packaged Foods from 1982 to 1987. From 1988 to 1996, he was Chief Executive Officer of HK Acquisition Corp. where he developed food industry investments with venture capital investors. Mr. Wolford is 64.

 

The Board Of Directors Recommends
A Vote In Favor Of Each Named Nominee.

 

Victor L. Lund

 

Mr. Lund became a director of Del Monte in March 2005. Mr. Lund served as Vice-Chairman of Albertson’s, Inc., a food and drug retailer, from June 1999 until June 2002. Mr. Lund served as Chairman of the Board and Chief Executive Officer of American Stores Company prior to its acquisition by Albertson’s in June 1999. He also served as President of American Stores Company from 1992 until 1995. Prior to joining American Stores Company in 1977, Mr. Lund was a practicing certified public accountant. Most recently, from May 2002 to December 2004, Mr. Lund served as the non-executive Chairman of the Board of Mariner Health Care, Inc. a long-term health care services company. In December 2006 Mr. Lund was elected non-executive Chairman of Demand Tec, a demand forecasting software company. Mr. Lund also currently serves on the boards of Teradata Corporation and Service Corporation International. Mr. Lund is 61.

Joe L. Morgan

 

Mr. Morgan became a director of Del Monte in December 2002. Mr. Morgan has been a baseball broadcaster and analyst for ABC, NBC and ESPN since 1985. From 1987 to 1998, he was President and Chief Executive Officer of Joe Morgan Beverage Company. Mr. Morgan was an Owner-Operator of three Wendy’s franchises from 1985 to 1988. In 1963, Mr. Morgan began his professional baseball career which culminated in his election to the Baseball Hall of Fame in 1990, five years after his retirement as a player. Mr. Morgan is 65.

 

David R. Williams

 

Mr. Williams became a director of Del Monte in December 2002 and was Executive Vice President of H.J. Heinz Company from July 2002 to September 2002. Prior to such time, he was Heinz’s Executive Vice President and President and Chief Executive Officer-Heinz Europe, Middle East, Africa and India, from August 2000 to July 2002 and Executive Vice President-Asia from June 1996 to August 2000. Mr. Williams, a former director of Heinz, retired from the Heinz board of directors in September 2002. In March 2006, Mr. Williams became Executive Chairman of MW Brands SAS, a privately-held French company in the seafood business, and in September 2005 became Chairman of Bapco Closures Ltd., a privately-held U.K. company in the innovative packaging business. Mr. Williams also serves on the board of KCRS Inc. and on the European Mergers and Acquisitions Advisory Board of Trilantic Capital Partners LLP. Mr. Williams is 66.

 

 

Timothy G. Bruer

 

Mr. Bruer became a director of Del Monte in August 1997. Mr. Bruer has served as Chief Executive Officer of Genisoy Food Co. Inc., a provider of soy protein products and sports nutrition, since April 2005. Mr. Bruer was Chief Executive Officer of Shadewell Grove Foods, Inc., a marketer and distributor of premium cookies, until June 2007. Shadewell Grove Foods, Inc. was the successor company to Nonni’s Food Co., Inc., where he had served as Chief Executive Officer since December 1998. Mr. Bruer was President and Chief Executive Officer and a director of Silverado Foods, Inc. from April 1997 to December 1998. From 1992 until 1997, he was Vice President and General Manager of the Culinary Division of Nestle. Prior to that, he was a partner with Bain & Co. Mr. Bruer is 52.

 

Mary R. (Nina) Henderson

 

Ms. Henderson became a director of Del Monte in December 2002. She is a consultant to the consumer products and food industries. Ms. Henderson joined Bestfoods’ predecessor company, CPC International Inc., in 1972 and was Corporate Vice President of Bestfoods from 1993 until its acquisition by Unilever in 2000. At Bestfoods, Ms. Henderson also served as Vice President Global Core Business Development (Europe, Asia, Latin America and North America food service businesses) from 1999 through 2000; President of Bestfoods Grocery (U.S. consumer business) from 1997 to 1999; President of Bestfoods Specialty Markets (North American, Caribbean and worldwide export businesses) from 1993 to 1997; and President of Special Markets (branded food and non-food businesses) from 1983 to 1993. Ms. Henderson also serves as a director of AXA Financial Inc. and Pactiv Corporation. From 2001 through 2008, she served as a director of Royal Dutch Shell plc. Ms. Henderson is 59.

 

Sharon L. McCollam

 

Ms. McCollam became a director of Del Monte in December 2007. Ms. McCollam has served as Executive Vice President, Chief Operating and Chief Financial Officer of Williams-Sonoma, Inc., a specialty retailer of home furnishings, since July 2006. She has been employed by Williams-Sonoma, Inc. since March 2000, where she also served as Executive Vice President and Chief Financial Officer from May 2003 to July 2006, Senior Vice President and Chief Financial Officer from October 2000 to May 2003, and Vice President, Finance from March 2000 to October 2000. From 1993 to 2000, Ms. McCollam held a variety of positions at Dole Foods Company, including Vice President and Chief Financial Officer, Dole Fresh Vegetables Division from 1996 to 2000. Ms. McCollam is 47.

 

 

The Board of Directors has adopted Corporate Governance Guidelines; the objective of the Corporate Governance Guidelines is to describe certain processes and procedures intended to provide reasonable assurance that directors, to whom the stockholders entrust the direction and success of the Company, act in the best interests of the Company and its stockholders. The Corporate Governance Guidelines address issues relating to the Board of Directors, such as membership, meetings and procedures, and duties and responsibilities, as well as issues relating to its committees, including charters, committee meetings, board oversight, and duties and responsibilities. The Corporate Governance Guidelines also provide for the appointment of a lead independent director and address other matters, including share ownership by directors under the Non-Employee Director Ownership Policy.

 

The Non-Employee Director Ownership Policy generally requires non-employee directors to own shares of common stock of the Company (including deferred stock units) having a value, as described in the Ownership Policy, equal to three times the annual cash retainer paid to the non-employee directors for service on the Board. Persons who were non-employee directors of the Company on or before September 21, 2006 have until October 30, 2011 to meet this requirement. All other non-employee directors have until the end of the fiscal quarter of the fifth anniversary of their election or appointment to the Board to meet this requirement.

 

The Corporate Governance Guidelines, the Non-Employee Director Ownership Policy and the Charters of each of the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board of Directors of the Company are available on the Company’s website at www.delmonte.com. Printed copies of these materials are also available to any stockholder upon written request to the Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575.

 

Pursuant to the Company’s Corporate Governance Guidelines, directors are expected to attend annual meetings of stockholders. All of the Company’s directors attended the 2008 Annual Meeting of Stockholders.

 

Under the Company’s Corporate Governance Guidelines and in accordance with the listing standards of the New York Stock Exchange, a majority of the Board of Directors must qualify as independent directors. A director is currently considered “independent” if the Board of Directors affirmatively determines that the director has no material relationship with Del Monte (directly or as a partner, stockholder or officer of an organization that has a relationship with Del Monte). The Board of Directors has established the following guidelines to assist its determination of independence:

 

 

 

These guidelines are set forth in the Company’s Corporate Governance Guidelines, which are available on Del Monte’s website at www.delmonte.com.

 

In June 2009, in connection with the 2009 Annual Meeting of Stockholders, the Board applied the standards set forth above to the members of the Board of Directors. Based upon such evaluations, the Board affirmatively determined that each of Messrs. Armacost, Bruer, Lund, Martin, Morgan, and Williams and Mmes. Henderson and McCollam were “independent” within the Corporate Governance Guidelines, applicable SEC rules and applicable NYSE rules. Mr. Wolford is considered an “inside” director because of his employment as Chairman of the Board, President and Chief Executive Officer of the Company. Questionnaires are sent periodically to the directors regarding matters that might affect their independence so that, if necessary, any change in circumstance may be evaluated by the Nominating and Corporate Governance Committee and the Board of Directors.

 

As required under NYSE listing standards and the Company’s Corporate Governance Guidelines, the Company’s independent directors meet in regularly scheduled executive sessions at which only such directors are present. The Company’s Lead Director presides over these executive sessions. Ms. Henderson began serving as Lead Director in September 2006 and in September 2008 was selected by the other independent directors to serve an additional one-year term. A director may not serve more than two full consecutive two-year terms as Lead Director unless otherwise determined by the Board of Directors. During fiscal 2009, our independent directors met in executive session four times.

In creating the Lead Director position, the Board of Directors did not intend for the Lead Director to infringe upon or interfere with the authority or responsibilities of the Chairman of the Board, the Chairs of the various Board committees or the individual directors. Furthermore, the Lead Director is not expected to become involved in the day-to-day management of the Company. Instead, the duties and responsibilities of the Lead Director include:

 

 

The Company’s Board of Directors, including a majority of the Company’s independent directors, has adopted a formal process by which stockholders or other interested persons may communicate with the Board or any of its directors. Persons interested in communicating with the directors regarding concerns or issues may address correspondence to a particular director, to the Board, to the Lead Director or to the independent directors generally, in care of Del Monte Foods Company at P.O. Box 193575, San Francisco, California 94119-3575. If no particular director is named, letters will be forwarded, as appropriate and depending on the subject matter, by the office of the Corporate Secretary to the Lead Director, the Chair of the Audit Committee, the Chair of the Compensation Committee, or the Chair of the Nominating and Corporate Governance Committee. Interested persons or stockholders, as applicable, may also contact the Board of Directors, Lead Director, Audit Committee, Compensation Committee, and Nominating and Corporate Governance Committee via telephone, electronic mail or the Web, as further described on the Company’s website at www.delmonte.com. The office of the Corporate Secretary reviews such communications for spam (such as junk mail or solicitations) or misdirected communications.

 

The Company has adopted Standards of Business Conduct that apply to all Del Monte officers, directors and employees. The Standards of Business Conduct encompass the Company’s code of ethics applicable to its Chief Executive Officer, Chief Financial Officer, and principal accounting officer and controller. The Standards of Business Conduct are available on the Company’s website at www.delmonte.com. A printed copy of the Standards of Business Conduct is also available to any stockholder upon written request to the Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575. The Company intends to make any required disclosures regarding any amendments of its Standards of Business Conduct or waivers granted to any of its directors or executive officers on its website at www.delmonte.com.

 

The Nominating and Corporate Governance Committee of the Board of Directors has adopted a Process for Identifying, Evaluating and Recommending Director Nominees.

 

The Nominating and Corporate Governance Committee believes that candidates for director should have certain minimum qualifications, including strength of character, an inquiring and independent mind, practical wisdom, and mature judgment. The current criteria used by the Nominating and Corporate Governance Committee in evaluating the qualifications of potential nominees for election to the Board of Directors are set forth in the Process and generally include whether the nominee:

 

 

Candidates for director nominees are reviewed in the context of the current composition of the Board. In conducting this assessment, the Nominating and Corporate Governance Committee considers diversity, skills, and such other factors as it deems appropriate given the current needs of the Board and the Company, to maintain a balance of knowledge, experience and capability. The Nominating and Corporate Governance Committee believes that, as a whole, the Board of Directors should have competency in the following areas:

 

 

 

Additionally, the Committee endeavors to ensure that the Board of Directors includes a number of financially literate directors and at least one director who qualifies as a financial expert. From time to time, the Nominating and Corporate Governance Committee may retain the services of one or more third-party search firms to assist it in identifying and evaluating potential new members of the Board of Directors. Additionally, the Lead Director and the Chair of the Board of Directors, who is not a member of the Nominating and Corporate Governance Committee, may assist in evaluating potential new members of the Board of Directors, including interviewing such potential new members.

 

In evaluating whether to nominate an incumbent director whose term of office is set to expire, the Nominating and Corporate Governance Committee also reviews such director’s overall service to the Company during his or her term, including the number of meetings attended, participation in and contributions to the deliberations of the Board and its committees, and the benefits of continuity among Board members. In the event such incumbent director is a member of the Committee, such director recuses himself or herself from that portion of the meeting.

 

Based on the foregoing process, the Nominating and Corporate Governance Committee recommended that the Board of Directors nominate each of Messrs. Armacost, Martin and Wolford for election to the Board of Directors at the 2009 Annual Meeting of Stockholders.

 

The Nominating and Corporate Governance Committee will consider director candidates recommended by stockholders. The Nominating and Corporate Governance Committee does not intend to alter the manner in which it evaluates candidates, including its qualification criteria, based on whether the candidate was recommended or nominated by a stockholder or not. Stockholders who wish to recommend candidates for consideration by the Nominating and Corporate Governance Committee may do so by delivering a written recommendation to: Chair of the Nominating and Corporate Governance Committee, P.O. Box 193575, San Francisco, California 94119-3575. The Nominating and Corporate Governance Committee may also be contacted by electronic mail or other methods, as more fully described on the Company’s website at www.delmonte.com. Submissions should include the full name of the proposed candidate, a description of the proposed candidate’s business experience for at least the previous five years, a description of the proposed candidate’s qualifications as a director and a representation that the recommending stockholder is a beneficial or record owner of the Company’s stock.

 

Stockholders who wish to nominate (rather than simply recommend) a candidate for election at the Company’s annual meeting must submit such nomination in writing to: Corporate Secretary, Del Monte Foods Company, P.O. Box 193575, San Francisco, California 94119-3575. Such written nomination must be received by the Corporate Secretary not less than 90 days nor more than 120 days before the one year anniversary of the preceding year’s annual meeting, provided that the annual meeting is not more than 30 days before or more than 60 days after the one year anniversary of the preceding year’s annual meeting. If the Company’s annual meeting is held before the date that is 30 days before the one year anniversary of the preceding year’s annual

meeting or more than 60 days after such anniversary, then such written nomination must be received not later than 90 days before such annual meeting or, if later, 10 days following the day on which public disclosure of the date of such annual meeting was first made.

 

A nomination by a Del Monte stockholder must contain the specific information required in Del Monte’s Bylaws, including without limitation, (i) with respect to each person whom such stockholder proposes to nominate for election or re-election as a director, all information relating to such person that would be required to be disclosed in solicitations of proxies for election of directors, or would otherwise be required, in each case pursuant to Section 14(a) under the Securities Exchange Act of 1934, as amended, if such Section 14(a) (including Regulation 14A thereunder) were applicable (including such person’s written consent to being named in the proxy statement as a nominee and to serving as a director if elected) or any successor regulation or statute, (ii) information regarding material relationships and arrangements, including compensation and other monetary arrangements, between the proposed nominee and the stockholder proposing such nomination, (iii) the name and address of the stockholder proposing such nomination, (iv) the class or series and number of shares that are owned of record or beneficially owned by such stockholder on the date of such stockholder’s notice, and (v) such additional information as may be reasonably required. In addition, each stockholder nominee must deliver to the Company within the timeframes set forth in the Company’s Bylaws (x) a written questionnaire provided by the Company with respect to his or her background and qualifications and (y) a written representation and agreement provided by the Company regarding any voting commitments or assurances provided to third parties, any outside compensation, reimbursement or indemnification in connection with the prospective nominee’s service on the Company’s board, and compliance with the Company’s policies and procedures for directors. Del Monte’s current Bylaws can be obtained by sending a written request to the Corporate Secretary; the Bylaws may also be found on the Company’s website at www.delmonte.com. To date, the Nominating and Corporate Governance Committee has not received, nor rejected, a timely director nominee recommended by a stockholder or stockholders holding more than five percent of our voting stock.

 

The Process for Identifying, Evaluating and Recommending Director Nominees, as currently adopted, is available on the Company’s website at www.delmonte.com. The Nominating and Corporate Governance Committee retains the right (with the approval of the Board of Directors) to modify the Process, including the criteria for evaluating the qualifications of potential nominees for election to the Board of Directors as set forth therein, from time to time.

 

Our Standards of Business Conduct set forth our general policies and procedures regarding how we will handle employee or director conflicts of interest. As part of the written policies and procedures regarding conflicts of interest set forth in our Standards of Business Conduct, directors and executive officers are required to complete a disclosure statement that sets forth such officer’s or director’s relationships, transactions, ventures, partnerships, employment, or affiliations that could give rise to a conflict of interest. Additionally, directors and executive officers are required to submit an updated disclosure statement regarding any potential related party transaction in advance of entering into the transaction. Under the Standards of Business Conduct, the Audit Committee must review and approve in advance any related party transaction involving a Del Monte officer or director. The Del Monte Law Department may be involved in determining whether a particular transaction is a related person transaction requiring review and approval by the Audit Committee.

 

The Board of Directors has also adopted a written Related Persons Transaction Policy in order to establish more detailed processes, procedures and standards regarding the review, approval and ratification of related person transactions and to provide greater specificity regarding what types of transactions constitute related person transactions. All related person transactions are prohibited unless approved or ratified by the Audit Committee or, in certain circumstances, the Chair of the Audit Committee.

The Related Persons Transaction Policy reminds directors and executive officers of their obligation under our Standards of Business Conduct to update their disclosure statement to reflect any potential conflict of interest or related person transaction. Additionally, the Policy confirms that each Del Monte director and executive officer must annually complete a questionnaire designed to elicit, among other things, information about potential related person transactions. Each director and executive officer must also promptly advise the Law Department or the Chair of the Audit Committee of any change to the information contained in the last completed questionnaire that could relate to the identification, review, approval or ratification of transactions that may constitute related person transactions.

 

The Del Monte Law Department reviews the information provided by Del Monte’s directors and executive officers and gathers the material facts and other information necessary to assess whether a proposed transaction would constitute a related person transaction for purposes of this Policy. If the Law Department determines that a transaction would be a related person transaction, the Law Department’s written assessment and the material facts of the proposed transaction would be submitted to the Audit Committee for consideration at its next meeting. In the event the Law Department, in consultation with Del Monte’s Chief Executive Officer, determines that it is not practicable or desirable for Del Monte to delay until the next Audit Committee meeting, such materials would instead be submitted to the Chair of the Audit Committee.

 

The Audit Committee (or, as applicable, the Chair of the Audit Committee) is expected to review the submitted materials and consider all other relevant facts and circumstances reasonably available to it including:

 

 

The Related Persons Transaction Policy provides that the Audit Committee (or Chair of the Committee as applicable) shall only approve those related person transactions that are in, or are not inconsistent with, the best interests of Del Monte and its stockholders. Similar procedures apply to the ratification of related person transactions in the event a director, the Chief Executive Officer, Chief Financial Officer or General Counsel becomes aware of a related person transaction that has not been previously approved or ratified. However, in such event:

 

 

Under the Related Persons Transaction Policy, the Board of Directors determined that transactions entered into in the ordinary course of the Company’s business in which the related person and his or her immediate family members are not involved in the negotiation of the terms of the transaction with the Company, do not receive any special benefits as a result of the transaction, and the amount involved in the transaction equals less than two percent (2%) of the annual net revenues of each of the Company and the other entity that is a participant in the transaction do not create a material direct or indirect interest on behalf of a related person (as such term is defined in applicable SEC rules) and accordingly are not related person transactions (as such term is defined in applicable SEC rules). In addition, transactions are not related person transactions under the Related Persons Transaction Policy if they are excluded from the SEC disclosure requirements regarding related person transactions.

 

The Board of Directors of Del Monte Foods Company held four meetings during the fiscal year ended May 3, 2009. The Board of Directors currently has a standing Audit Committee, Compensation Committee and Nominating and Corporate Governance Committee.

 

During the fiscal year ended May 3, 2009, each incumbent member of the Board of Directors attended 75% or more of the aggregate of the meetings of the Board of Directors and of the committees on which he or she served, held during the period for which he or she was a director or committee member, respectively.

 

The following table provides a summary of the membership of each of the standing committees of the Board of Directors as of May 3, 2009.

 

						Nominating and
						Corporate
Name		Audit		Compensation		Governance
Samuel H. Armacost				Chair
Timothy G. Bruer		Member
Mary R. Henderson						Chair
Victor L. Lund						Member
Terence D. Martin		Chair		Member
Sharon L. McCollam		Member
Joe L. Morgan						Member
David R. Williams				Member
Richard G. Wolford

 

In addition, the Board of Directors may from time to time establish special committees.

 

Responsibilities

 

The Audit Committee of the Board of Directors assists the Board in its oversight of the Company’s corporate accounting and financial reporting process. For this purpose, the Audit Committee performs several functions. The Audit Committee:

 

 

 

The Audit Committee is also responsible for periodically discussing with management the Company’s policies and guidelines regarding risk assessment and risk management. In connection with the Audit Committee’s duties and responsibilities relating to risk assessment and the control environment, the Audit Committee is responsible for reviewing and approving updates to the Company’s Standards of Business Conduct as well as reviewing the Company’s performance relative to such Standards. The Audit Committee has sole authority to grant waivers to directors and executive officers relating to the Company’s Standards of Business Conduct.

 

The Audit Committee is responsible for interacting directly with and evaluating the Company’s independent auditor. With respect to the independent auditor, the Audit Committee:

 

 

In connection with approving services by the Company’s independent auditor as required by Section 202 of the Sarbanes-Oxley Act of 2002, the Audit Committee has adopted a Statement of Policy and Procedures regarding Pre-Approval of Engagements for Audit and Non-Audit Services. See “Proposal 5 – Ratification of Appointment of Independent Registered Public Accounting Firm – Policies and Procedures Relating to Approval of Services by Auditor” for a discussion of this Statement.

 

The Audit Committee operates under a written charter adopted by the Board of Directors. For additional information regarding the Audit Committee’s duties and responsibilities, please refer to the Audit Committee’s Charter, which is available on the Company’s website at www.delmonte.com. As required under the Sarbanes-Oxley Act of 2002, the Audit Committee has in place procedures to receive, retain and treat complaints received regarding accounting, internal accounting controls or auditing matters, including procedures for the confidential and anonymous submission by employees of concerns regarding questionable accounting or auditing matters.

 

Membership and Independence

 

Three directors currently comprise the Audit Committee: Messrs. Bruer and Martin and Ms. McCollam. Mr. Martin currently serves as the Chair of the Audit Committee. The Audit Committee consists entirely of directors who were determined by the Board of Directors to meet the definition of “independent” within the meaning of the Company’s Corporate Governance Guidelines, the Audit Committee’s Charter, Section 303A.02 of the NYSE listing standards and Section 10A(m)(3) of the Securities Exchange Act of 1934, as amended.

 

Each member of the Audit Committee is financially literate. Additionally, the Board of Directors has determined that each of Mr. Martin and Ms. McCollam qualifies as an “audit committee financial expert” as such term is defined in Securities and Exchange Commission rules. Our Corporate Governance Guidelines restrict Audit Committee members from simultaneously serving on the audit committees of more than three public companies

(including Del Monte), without a specific Board determination that such simultaneous service will not impair the ability of such member to serve on the Audit Committee. Except for Mr. Martin who serves as a director on the audit committee of Dr. Pepper Snapple Group, Inc., the members of our Audit Committee do not currently serve on the audit committee of any other public company.

 

Fiscal 2009 Meetings

 

The Audit Committee met eight times during the fiscal year ended May 3, 2009.

 

Responsibilities

 

The Compensation Committee of the Board of Directors reviews and approves the overall compensation strategy and policies for the Company. In this regard, the Compensation Committee:

 

 

For a discussion of the Compensation Committee’s processes and procedures for the consideration and determination of executive compensation, including the role of its compensation consultant, please see “Executive Compensation – Compensation Discussion and Analysis.”

 

The Compensation Committee operates under a written charter adopted by the Board of Directors. For additional information regarding the Compensation Committee’s duties and responsibilities, please refer to the Compensation Committee’s Charter, which is available on the Company’s website at www.delmonte.com.

 

Membership and Independence

 

Three directors currently comprise the Compensation Committee: Messrs. Armacost, Martin and Williams. Mr. Armacost currently serves as the Chair of the Compensation Committee. The Compensation Committee consists entirely of directors who were determined by the Board of Directors to meet the definition of “independent” within the Company’s Corporate Governance Guidelines, the Compensation Committee’s Charter and Section 303A.02 of the NYSE listing standards, as well as the “non-employee director” standard within the meaning of Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and the “outside director” standard for purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended.

 

Fiscal 2009 Meetings

 

The Compensation Committee met four times during the fiscal year ended May 3, 2009.

 

Responsibilities

 

The Nominating and Corporate Governance Committee of the Board of Directors is responsible for overseeing the performance of the Board of Directors and its committees and developing the Company’s policies relating to corporate governance. In this regard, the Nominating and Corporate Governance Committee:

 

 

For a discussion of the Nominating and Corporate Governance Committee’s processes and criteria used in evaluating and recommending to the Board of Directors the slate of nominees for directors to be elected by the Company’s stockholders (or, in the event of a vacancy to be filled by the Board, appointed to the Board), please see “Corporate Governance – Nomination Process.” For a discussion of the Nominating and Corporate Governance Committee’s processes and procedures for the consideration and determination of non-employee director compensation, please see “Director Compensation – Narrative Discussion of Director Compensation – Process.”

 

The Nominating and Corporate Governance Committee operates under a written charter adopted by the Board of Directors. For additional information regarding the Nominating and Corporate Governance Committee’s duties and responsibilities, please refer to the Nominating and Corporate Governance Committee’s Charter, which is available on the Company’s website at www.delmonte.com.

 

Membership and Independence

 

Three directors currently comprise the Nominating and Corporate Governance Committee: Messrs. Lund and Morgan and Ms. Henderson. Ms. Henderson currently serves as the Chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee currently consists entirely of directors who were determined by the Board of Directors to meet the definition of “independent” within the Company’s Corporate Governance Guidelines, the Nominating and Corporate Governance Committee’s Charter and Section 303A.02 of the NYSE listing standards.

 

Fiscal 2009 Meetings

 

The Nominating and Corporate Governance Committee met four times during the fiscal year ended May 3, 2009.

 

The following table sets forth compensation for the members of the Board of Directors of Del Monte Foods Company for fiscal 2009. Mr. Wolford, the Company’s Chairman of the Board, President and Chief Executive Officer, does not receive any additional compensation for his service as a director. Mr. Wolford’s compensation is reported in “Executive Compensation” and accordingly Mr. Wolford is not included in the following table.

 

			Fees Earned or Paid
			in Cash					Stock Awards					Option Awards					Total
Name			($)					($) (3)					($) (4)					($)
Samuel H. Armacost			$	86,000				$	74,260				$	-				$	160,260
Timothy G. Bruer				92,000					74,260					-					166,260
Mary R. Henderson				99,000					74,260					-					173,260
Victor L. Lund				84,000					74,260					-					158,260
Terence D. Martin				120,000					74,260					-					194,260
Sharon L. McCollam (1)				77,192	(2)				61,977					-					139,169
Joe L. Morgan				74,000					74,260					-					148,260
David R. Williams				82,000					74,260					-					156,260

 

 

 

 

 

 

 

													Aggregate
													Number of
													Shares Subject
			Deferred Stock					Restricted					to Outstanding
Name			Units(a)					Stock Units(b)					Stock Awards
Samuel H. Armacost				19,393					18,042					37,435
Timothy G. Bruer				-					18,042					18,042
Mary R. Henderson				27,194					18,042					45,236
Victor L. Lund				12,992					18,042					31,034
Terence D. Martin				19,393					18,042					37,435
Sharon L. McCollam				15,561					15,848					31,409
Joe L. Morgan				-					18,042					18,042
David R. Williams				-					18,042					18,042

 

 

 

 

The dividend equivalents issued by the Company with respect to the deferred stock units are factored into the FAS 123R value of such awards.

 

 

For further information regarding the Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan, see “– Narrative Discussion of Director Compensation – Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan” below.

 

 

Narrative Discussion of Director Compensation

 

Process

 

The Nominating and Corporate Governance Committee is responsible for making recommendations to the Board of Directors regarding the compensation of non-employee directors. The Committee may not delegate this responsibility, which is set forth in its Charter. The Nominating and Corporate Governance Committee engages a compensation consultant, Hewitt Associates, Inc., to conduct a review of director compensation every one to two years. The review includes data from other companies (generally, the comparator group then being used in connection with executive compensation) as well as market trends in director compensation. Del Monte executive officers play no role in recommending or determining non-employee director compensation, except that Mr. Wolford (as a member of the Board of Directors) participates in the deliberations and actions of the Board regarding the recommendations made by the Nominating and Corporate Governance Committee. Following the fiscal 2009 review, the Nominating and Corporate Governance Committee decided not to recommend any changes in the compensation of Del Monte’s non-employee directors.

 

The Del Monte Foods Company Non-Employee Director Compensation Plan as in effect for fiscal 2009 was adopted by the Board of Directors of Del Monte Foods Company on March 16, 2006, effective immediately following the Company’s 2006 Annual Meeting of Stockholders.

 

Del Monte Foods Company Non-Employee Director Compensation Plan

 

All Del Monte directors other than Richard G. Wolford, the Company’s Chief Executive Officer, are currently eligible under the Del Monte Foods Company Non-Employee Director Compensation Plan.

 

Cash Retainers. Each eligible director earns an annual retainer of $60,000 cash, which is paid in quarterly installments in arrears. Certain additional annual retainers (also paid in quarterly installments) are paid in cash as follows:

 

		Additional
		Annual
Position		Retainer
Lead Director		$	15,000
Audit Committee Chair		$	20,000
Compensation Committee Chair		$	12,000
Nominating and Corporate Governance Committee Chair		$	10,000

Non-employee directors elected or appointed to the Board between annual stockholder meetings, such as Ms. McCollam who joined the Board between the 2007 and 2008 Annual Meetings of Stockholders, receive that percentage of the annual retainer that equals the percentage of the year (beginning from the first day of the fiscal quarter of such director’s appointment/election) remaining until the next annual stockholders meeting. Beginning with the second quarter of fiscal 2009, Ms. McCollam received the regular annual retainer amount.

 

Meeting Fees. In addition, each eligible director earns a meeting fee for each meeting attended as follows:

 

		Fee Per
Type of Meeting		Meeting
Board Meeting		$	2,000
Audit Committee Meeting		$	2,000
Compensation Committee Meeting		$	1,500
Nominating and Corporate Governance Committee Meeting		$	1,500
Meeting of any Special Committee		$	2,000	*

 

 

*  unless otherwise determined by the Board of Directors

 

Such meeting fees are paid quarterly in cash in arrears.

 

Equity Compensation. Each eligible director annually receives $80,000 worth of restricted Del Monte common stock or restricted stock units granted promptly after each annual meeting. These restricted stock or restricted stock units vest over three years from the date of grant (it being understood that in the event the date of the third regularly scheduled annual meeting is less than three full calendar years from the date of grant, such shares of restricted stock or such restricted stock units shall nevertheless vest immediately prior to such annual meeting). Non-employee directors elected or appointed to the Board between annual stockholder meetings, such as Ms. McCollam, receive upon election or appointment that percentage of the annual equity compensation dollar amount that equals the percentage of the year (beginning from the first day of the fiscal quarter of such Director’s appointment/election) remaining until the next annual stockholders meeting. Such grants vest in three approximately equal installments on the same vesting dates applicable to the other directors’ grants. The number of shares of restricted stock or number of restricted stock units issued is calculated by dividing the $80,000 (or such appropriate prorated amount) by the average of the high and low price of Del Monte’s common stock on the date of grant. These equity awards are issued under the Del Monte Foods Company 2002 Stock Incentive Plan. In the event of a Change of Control, as defined in the Del Monte Foods Company 2002 Stock Incentive Plan, as amended, all outstanding restricted stock and restricted stock units vest in full.

 

Other. The Del Monte Foods Company Non-Employee Director Compensation Plan, as amended, also provides for travel reimbursement, requires that 100% of the “profit shares” attributable to option exercises be held for one year, and confirms the ability of non-employee directors to defer certain compensation pursuant to the Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan (which was not affected by the amendment to the Non-Employee Director Compensation Plan). “Profit shares” are the option profit, net of taxes, expressed as a number of shares.

 

Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan

 

Under the Del Monte Foods Company 2005 Non-Employee Director Deferred Compensation Plan, non-employee directors may elect to defer the receipt of 0%, 50% or 100% of either or both of the cash and stock-based components of their compensation. The deferred amounts are converted into deferred stock units, which are distributed upon termination of service on the Board of Directors in the form of shares of Del Monte common stock. Such distribution is made, at the participant’s election with respect to each deferral period, either in a lump sum or in equal annual installments over not more than 15 years. Deferred stock units issued in connection with deferrals made under the 2005 Non-Employee Director Deferred Compensation Plan, as well as any shares distributed in respect thereof, are issued under the Del Monte Foods Company 2002 Stock Incentive Plan. Deferred stock units issued pursuant to the terms of the 2005 Non-Employee Director Deferred Compensation

Plan are credited with dividends in the form of additional deferred stock units. The number of additional deferred stock units credited is determined by multiplying the number of deferred stock units held by the director on the applicable dividend record date by the per share cash dividend declared, and then dividing such amount by the average of the high and low price of Del Monte’s common stock on the applicable dividend payment date. During fiscal 2009, the 2005 Non-Employee Director Deferred Compensation Plan was amended for compliance with the American Jobs Creation Act of 2004 and its related Internal Revenue Code Section 409A.

 

 

On May 11, 2009, the Board of Directors voted to approve, and to recommend to our stockholders that they approve, a proposal to amend and restate the Company’s Amended and Restated Certificate of Incorporation (the “Certificate”) to phase out the classification of the Board of Directors, to provide instead for the annual election of directors, and to make such other conforming and technical changes to the Certificate as may be necessary or appropriate. If approved by the Company’s stockholders, the Certificate would provide for the annual election of directors beginning at the 2010 Annual Meeting of Stockholders, provided however, that prior to the 2010 Annual Meeting of Stockholders, any director elected by the stockholders of the Company to a three-year term may complete the term to which he or she has been elected.

 

Article VII of the Certificate currently provides that the Board of Directors be divided into three classes of approximately equal size, composed of directors each serving terms of office of three years. If the proposed measure is approved by our stockholders, those directors previously elected for three-year terms of office by our stockholders will complete their three-year terms, and would be eligible for re-election thereafter for one-year terms at each Annual Meeting of Stockholders. Directors elected to fill newly created directorships resulting from an increase in the number of directors or any vacancies on the Board of Directors will serve until the next annual meeting. Beginning with the Annual Meeting of Stockholders in 2012, the declassification of the Board of Directors would be complete and directors would be subject to annual election to one-year terms. Consistent with Delaware law, the proposed amendment also would provide that directors may be removed with or without cause.

 

Classified boards provide effective protection against unwanted takeovers and proxy contests because they make it difficult for a substantial stockholder to gain control of the Board of Directors without the cooperation or approval of incumbent directors. Classified boards also foster continuity and stability, not only on the board but also in the overall business of a company, since a majority of directors will always have prior experience as directors of the company.

 

However, classified boards may also reduce the accountability of directors to stockholders as they may limit the ability of stockholders to evaluate and elect each director each year. Moreover, many institutional investors believe that the election of directors is the primary means for stockholders to influence corporate governance policies and to hold management accountable for implementing those policies.

 

In deciding to recommend declassification of the Board of Directors, the Board of Directors considered the arguments in favor of and against continuation of the classified Board of Directors and determined that it is in the Company’s best interests to eliminate its classified Board of Directors as proposed.

 

Stockholders are requested in this Proposal 2 to approve the proposed amendment to the Certificate. The affirmative vote of the holders of a majority of the outstanding shares entitled to vote at the annual meeting will be required to approve the proposed amendment to the Certificate. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes also will have the same effect as negative votes.

 

The general description of the proposed amendment to the Certificate set forth above is qualified in its entirety by reference to the text of the proposed amendment to the Certificate, which is attached as Annex A to these proxy materials. Additions to the Certificate are indicated by underlining and deletions to the Certificate are indicated by strike-outs.

 

The Board Of Directors Recommends

A Vote In Favor Of Proposal 2.

 

 

On July 28, 2009, on the recommendation of the Compensation Committee, the Board of Directors of Del Monte Foods Company adopted the Del Monte Foods Company 2002 Stock Incentive Plan, as amended and restated effective July 28, 2009, subject to stockholder approval (the “Amended 2002 Plan”). As described below, the Amended 2002 Plan differs in a number of respects from the Del Monte Foods Company 2002 Stock Incentive Plan (the “2002 Plan”), which was originally adopted by the Board effective December 20, 2002, was previously amended and restated by the Board effective August 15, 2005 and August 6, 2007, and was previously approved by the stockholders. However, the primary purpose of the current amendment and restatement of the 2002 Plan is to increase the number of shares of common stock available for grants by approximately 11.4 million shares, as discussed further below.

 

Approval of the Amended 2002 Plan will allow the Compensation Committee to continue to grant stock options and a broad array of other equity incentives at levels it determines appropriate. The Company believes that the shares available under the Amended 2002 Plan will suffice for the next two to three years, and expects that the Compensation Committee will use such equity incentives in order to secure, retain and provide incentives to key Del Monte employees. Equity incentives are an important component of Del Monte’s total compensation package. Equity incentives help to align the interests of management with those of the stockholders, retain the services of our executive team, reward achievement of our strategic objectives and facilitate and encourage ownership of Del Monte common stock. Additionally, shares available under the Amended 2002 Plan will also be used to compensate our outside directors. The Company’s current compensation of its outside directors is described in greater detail in “Director Compensation.”

 

The Amended 2002 Plan includes the following main changes:

 

 

Under the Amended 2002 Plan, the total number of shares authorized for grant is 42,978,385. Accordingly, if the Amended 2002 Plan is approved by the stockholders, a total of 13,501,000 shares will be available under the Amended 2002 Plan to be used in connection with future awards (based on awards as of May 3, 2009). This reflects an 11,419,645 share increase in the number of shares authorized under the 2002 Plan. Shares of common stock issued pursuant to equity incentives granted under the Amended 2002 Plan on or after May 4, 2009 will reduce the Plan’s share reserve (i) by one share in the case of options and stock appreciation rights with exercise prices at least equal to fair market value of the Company’s common stock on the grant date and (ii) by 1.98 shares in the case of all other equity incentives granted under the Amended 2002 Plan (rather than the 2.79 multiple applicable to such other equity incentive granted before May 4, 2009 but on or after April 30, 2007).

 

 

Options and other stock awards granted under the 2002 Plan prior to its July 28, 2009 amendment and restatement will continue to be subject to the terms and conditions as set forth in the agreements evidencing such options and other awards as well as the terms of the 2002 Plan prior to its July 28, 2009 amendment and restatement.

 

Over the last 3 fiscal years, the Company maintained an average equity incentive award burn rate of 1.96% per year. The Company calculates its burn rate as shares subject to new equity incentive awards granted during each fiscal year divided by the weighted average common shares outstanding during such year. Shares underlying performance-based equity awards are not included in the burn rate until the year in which such awards vest and then are included only to the extent such awards actually vested. In the Company’s burn rate calculation, a multiplier of 2.0 has been applied to equity awards other than stock options so that the amount

shown in the Total Equity Awards row is equal to the sum of (i) the number in the Stock Options Granted row plus (ii) 2.0 times the number in the Time-Based Equity Awards Granted row plus (iii) 2.0 times the number in the Performance-Based Equity Awards Earned row.

 

 

 

 

		Fiscal				Fiscal				Fiscal
		2007				2008				2009
Performance Accelerated Restricted Stock Units (PARS)			327,500				294,700				393,800
Director Restricted Stock Units			54,033				62,560				82,424
Deferred Stock Units (Other)			28,853				23,368				67,150

 

 

		Fiscal				Fiscal				Fiscal
		2007				2008				2009
Performance Share Units			-				-				-
Deferred Stock Units (Deferred Amounts)			68,443				66,215				181,320

 

Section 162(m) denies a deduction to any publicly held corporation for certain compensation paid to “covered employees” in a taxable year to the extent that compensation paid to a covered employee exceeds $1 million. However, some kinds of compensation, including qualified “performance-based compensation,” are not subject to this deduction limitation. Certain performance-based awards granted under the Amended 2002 Plan may qualify as “performance-based compensation” under Section 162(m) if, among other things, the material terms of the compensation have been approved by the stockholders. If this Proposal 3 is approved by the stockholders, such performance-based awards granted under the Amended 2002 Plan may qualify as performance-based compensation under Section 162(m), provided that: (i) the award is granted by the Compensation Committee, which must be composed solely of two or more “outside directors,” (ii) the award is paid only upon the achievement of one or more objective performance goals established in writing by the Compensation Committee while the outcome is substantially uncertain, and (iii) the Compensation Committee certifies in writing prior to the payment of the award that the performance goals have been satisfied.

 

Stockholders are requested in this Proposal 3 to approve the Amended 2002 Plan. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the 2009

Annual Meeting of Stockholders will be required to approve the Amended 2002 Plan. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes are not counted for any purpose in determining whether this matter has been approved and therefore will have no effect.

 

A general description of the Amended 2002 Plan is set forth below. However, this description is qualified in its entirety by reference to the full text of the Amended 2002 Plan, a copy of which is attached as Annex B to these proxy materials.

 

The Board Of Directors Recommends
A Vote In Favor Of Proposal 3.

 

Description of the Del Monte Foods Company 2002 Stock Incentive Plan, as Amended and Restated Effective July 28, 2009

 

General

 

The Amended 2002 Plan provides for the grant of incentive stock options, nonqualified stock options, stock appreciation rights, stock bonus awards and other incentive awards that may involve the issuance of Del Monte’s common stock (collectively, “stock awards”). Incentive stock options granted under the Amended 2002 Plan are intended to qualify as “incentive stock options” within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. Nonqualified stock options granted under the Amended 2002 Plan are not intended to qualify as incentive stock options under the Code. See “– Federal Income Tax Information” below for a discussion of the tax treatment of stock awards.

 

Administration

 

Pursuant to its terms, the Amended 2002 Plan is administered by a committee of the Board (the “Committee”). Unless otherwise determined by the Board, such Committee must consist solely of two or more directors, each of whom is a “non-employee director” within the meaning of Rule 16b-3 of the Exchange Act and an “outside director” within the meaning of Section 162(m). Currently, the Compensation Committee acts as the Committee administering the Amended 2002 Plan.

 

Subject to the provisions of the Amended 2002 Plan, the Committee has the authority to construe and interpret the Amended 2002 Plan and the terms of awards granted under the Amended 2002 Plan. The Committee also has the authority to delegate some or all of the administration of the Amended 2002 Plan to one or more directors or management employees.

 

The Committee may accelerate the date on which any option or stand-alone stock appreciation right granted under the Amended 2002 Plan vests or becomes exercisable and may extend the term of such stock awards.

 

Eligibility

 

Incentive stock options may be granted under the Amended 2002 Plan only to employees of Del Monte and its subsidiaries. Employees of and consultants to Del Monte and its subsidiaries, and non-employee directors of Del Monte, are eligible to receive all other types of stock awards under the Amended 2002 Plan. All of the Company’s approximately 14,800 regular and seasonal employees and consultants are eligible to participate in the Amended 2002 Plan. Additionally, all 8 of the Company’s current non-employee directors are eligible to participate in the Amended 2002 Plan. In fiscal 2009, the Committee limited employee participation in the 2002 Plan with respect to equity-based awards to employees at the level of vice president and above and other key employees. Accordingly, in fiscal 2009, 91 employees of Del Monte received equity-based awards under the 2002 Plan. For fiscal 2009, the Annual Incentive Program, which was operated substantially similarly to the Del Monte Foods Company Annual Incentive Plan and provided for cash-based awards, was implemented

under the 2002 Plan. Accordingly, for fiscal 2009, 1,059 employees of Del Monte participated in the Annual Incentive Program under the 2002 Plan.

 

No incentive stock option may be granted under the Amended 2002 Plan to any person who, at the time of the grant, owns (or is deemed to own) stock possessing more than 10% of the total combined voting power of Del Monte or its subsidiaries, unless the exercise price of such option is at least 110% of the fair market value of the stock subject to the option on the date of grant and the term of the option does not exceed five years from the date of grant. In addition, the aggregate fair market value, determined on the date of grant, of the shares of common stock with respect to which incentive stock options are exercisable for the first time by a participant during any calendar year (under the Amended 2002 Plan and any other stock option plans of Del Monte and its subsidiaries) may not exceed $100,000.

 

Under the Amended 2002 Plan, no individual may be granted more than 2,000,000 shares of common stock during any fiscal year pursuant to options, stock appreciation rights, other incentive awards whose value is determined by reference to an increase over an exercise or strike price of at least 100% of the fair market value of a share of common stock on the grant date of the incentive award, or any other incentive award intended to qualify as performance-based compensation under Section 162(m) (other than performance-based cash awards, which are subject to a $3,000,000 limitation, as described in “– Performance-Based Stock and Cash Awards” below). Prior to its July 28, 2009 amendment and restatement, the 2002 Plan provided that no more than 1,500,000 shares of common stock could be granted to any individual in any fiscal year pursuant to incentive awards.

 

Stock Subject to the Amended 2002 Plan

 

A maximum of 42,978,385 shares of common stock are available for issuance under the Amended 2002 Plan, which number, based on award information as of May 3, 2009, consists of 3,197,405 shares of common stock issued under the 2002 Plan (reducing the shares available under the Amended 2002 Plan by 3,319,415 shares due to the 2.79 and 1.94 multiples discussed below), 20,024,425 shares subject to outstanding incentive awards (which, if issued, would reduce the shares available under the Amended 2002 Plan by 26,157,970 shares due to the 2.79 and 1.94 multiples discussed below) and 13,501,000 shares available for future incentive award grants. Prior to the July 28, 2009 amendment and restatement, the maximum number of shares of common stock that were available for issuance under the 2002 Plan was 31,558,740 shares. Shares of common stock issued under the Amended 2002 Plan may be either newly issued shares or treasury shares, as determined by the Committee. As of August 14, 2009, the closing price of our common stock as reported on the NYSE was $10.20 per share.

 

As of May 3, 2009, there were 2,081,355 shares of common stock (plus any shares that might in the future be returned to the 2002 Plan as a result of cancellation or expiration of options or forfeiture or repurchase of other stock awards, which number may not exceed 26,157,970 after applying the applicable share multiples) available for future grant under the 2002 Plan. In addition, as of such date, options covering an aggregate of 17,384,813 shares were outstanding, and awards other than options and stock appreciation rights covering an aggregate of 4,394,497 shares were outstanding. The weighted average exercise price of all options outstanding as of May 3, 2009 was approximately $9.17, and the weighted average remaining term of such options was approximately 6.25 years. A total of 197,778,014 shares of common stock were outstanding as of July 30, 2009.

 

For awards granted on or after May 4, 2009, the number of shares of common stock available for issuance under the Amended 2002 Plan shall be reduced (i) by 1 share for each share of common stock issued pursuant to an option or a stock appreciation right with an exercise price of at least the fair market value of a share of common stock on the grant date and (ii) 1.98 shares for each share of common stock issued pursuant to other stock awards; provided, however, that (a) for such other stock awards granted prior to May 4, 2009 but on or after April 30, 2007, the reduction shall be 2.79 shares instead of 1.98 shares, and (b) for such other stock awards granted prior to April 30, 2007 but on or after May 2, 2005, the reduction shall be 1.94 shares instead

of 2.79 shares. Furthermore, for all awards granted prior to May 2, 2005, the number of shares of common stock available for issuance under the Amended 2002 Plan shall be reduced by 1 share for each share of common stock issued. By contrast, prior to the July 28, 2009 amendment and restatement, the number of shares of common stock available for issuance under the 2002 Plan was reduced (i) by 1 share for each share of common stock issued pursuant to an option or a stock appreciation right with an exercise price of at least the fair market value of a share of common stock on the grant date and (ii) 2.79 shares for each share of common stock issued pursuant to other stock awards; provided, however, that (a) for such other stock awards granted prior to April 30, 2007 but on or after May 2, 2005, the reduction was 1.94 shares instead of 2.79 shares, and (ii) for all awards granted prior to May 2, 2005, the number of shares of common stock available for issuance under the 2002 Plan was reduced by 1 share for each share of common stock issued.

 

If a stock award granted under the Amended 2002 Plan expires or otherwise terminates without being exercised or settled in full, or if any shares of common stock issued pursuant to a stock award are forfeited to or repurchased by Del Monte, including, but not limited to, any repurchase or forfeiture caused by the failure to meet a contingency or condition required for the vesting of such shares, then the shares of common stock not issued under such stock award, or forfeited to or repurchased by Del Monte shall revert to and again become available for issuance under the Amended 2002 Plan. Awards that are terminated, forfeited or repurchased shall result in an increase in the share reserve of the Amended 2002 Plan corresponding to the reduction originally made in respect of the award.

 

Shares of common stock shall not be considered to have been issued under the Amended 2002 Plan with respect to any portion of a stock award (other than a stock appreciation right that may be settled in shares of common stock or cash) that is settled in cash. Shares withheld in satisfaction of tax withholding obligations shall not again become available for issuance under the Amended 2002 Plan. Upon payment in shares of common stock pursuant to the exercise of a stock appreciation right, the number of shares available for issuance under the Amended 2002 Plan shall be reduced by the gross number of shares for which such stock award is exercised. If the exercise price of an option is paid by shares of common stock owned by the participant, the number of shares available for issuance under the Amended 2002 Plan shall be reduced by the gross number of shares for which the option is exercised. Shares of common stock may be issued pursuant to stock awards in connection with certain corporate acquisitions and mergers, and any such issuance shall not reduce the number of shares of common stock available for issuance under the Amended 2002 Plan.

 

The aggregate maximum number of shares of common stock that may be issued under the Amended 2002 Plan pursuant to the exercise of incentive stock options is 42,978,385 shares.

 

Subject to the overall limitation on the number of shares of common stock that may be issued under the Amended 2002 Plan, the Committee may, in addition to granting stock awards under the Amended 2002 Plan, use available shares of common stock as the form of payment for compensation, grants or rights earned or due under any other compensation plans or arrangements of Del Monte, including those of any entity acquired by Del Monte.

 

Terms of Options

 

Options may be granted under the Amended 2002 Plan pursuant to stock option agreements. The following is a description of the permissible terms of options under the Amended 2002 Plan. Individual stock option agreements may be more restrictive as to any or all of the permissible terms described below.

 

Exercise Price. The exercise price of incentive stock options may not be less than 100% of the fair market value of the stock subject to the option on the date of grant and, in some cases (as described in “ – Eligibility” above), may not be less than 110% of such fair market value. The exercise price of nonqualified stock options may not be less than 100% of the fair market value of the stock on the date of grant.

 

Consideration. The exercise price of options granted under the Amended 2002 Plan must be paid, to the extent permitted by applicable law and at the discretion of the Committee, (i) by cash or check, (ii) pursuant to a broker-assisted cashless exercise, (iii) by delivery of other common stock of Del Monte, or (iv) in any other form of legal consideration acceptable to the Committee.

 

Vesting. Options granted under the Amended 2002 Plan may become exercisable in cumulative increments, or “vest,” as determined by the Committee and set forth in the applicable option agreement. Vesting typically will occur during the optionholder’s employment with Del Monte or a subsidiary. If an optionholder’s employment is terminated by the optionholder on account of retirement (as defined in the Amended 2002 Plan) or, for optionholders who are vice presidents or above upon termination, if the optionholder is terminated by Del Monte or a subsidiary without cause (as defined in the Amended 2002 Plan) or if the optionholder terminates his employment for good reason (as defined in the optionholder’s employment contract or, if included therein, the applicable executive severance plan), then the option will vest on a pro-rata basis in accordance with Del Monte’s policy in effect at the time of such termination. Moreover, if an optionholder’s employment is terminated on account of death or disability (as defined in the Amended 2002 Plan), then all of the shares subject to the option will vest and become exercisable as of the time of such termination. Shares covered by different options granted under the Amended 2002 Plan may be subject to different vesting terms. The Committee has the authority to accelerate the time during which an option may vest or be exercised. See “– Change of Control” below for information about vesting in connection with a change of control.

 

Tax Withholding. To the extent provided by the terms of a stock option agreement, an optionholder may satisfy any federal, state or local tax withholding obligation relating to the exercise of the option by a cash payment upon exercise, by authorizing Del Monte to withhold a portion of the stock otherwise issuable to the optionholder or by delivering already-owned common stock of Del Monte.

 

Term. The maximum term of options granted under the Amended 2002 Plan is ten years, except that in certain cases (as described in “– Eligibility” above) the maximum term is five years.

 

Termination of Employment. Under the Amended 2002 Plan, in the event that an optionholder’s employment terminates (other than for cause or due to the optionholder’s disability, death or retirement), his or her options may be exercised (to the extent the options were exercisable at the time of the termination of employment) at any time within three months following termination. If termination is for cause, options will expire and be canceled upon termination. If termination is due to the optionholder’s retirement (as defined in the Amended 2002 Plan), disability (as defined in the Amended 2002 Plan) or death, options (to the extent exercisable at the time of termination) may be exercised until the expiration of their original terms. If an optionholder dies within three months following an involuntary termination of employment without cause, options may be exercised (to the extent the options were exercisable at the time of the termination of employment) until the expiration of their original terms or, if sooner, for one year after the optionholder’s death. In no event, however, may an option be exercised beyond the expiration of its original term.

 

Restrictions on Transfer. Unless provided otherwise in an option agreement, an optionholder may not transfer an option other than by will or by the laws of descent and distribution. During the lifetime of the optionholder, only the optionholder (or the transferee pursuant to a domestic relations order) may exercise an option. An optionholder may also designate a beneficiary who may exercise an option following the optionholder’s death.

 

Terms of Stock Appreciation Rights

 

Stock appreciation rights may be granted under the Amended 2002 Plan pursuant to stock appreciation rights agreements, either as a tandem stock appreciation right in connection with an option (a “tandem SAR”) or as a stand-alone stock appreciation right (a “stand-alone SAR”).

 

Exercise. Each stock appreciation right is denominated in shares of common stock equivalents. Upon exercise of a stock appreciation right, Del Monte will pay the participant an amount equal to the excess of (i) the

aggregate fair market value of Del Monte’s common stock on the date of exercise, over (ii) the exercise price determined by the Committee on the date of grant. The exercise price of a stock appreciation right may not be less than 100% of the fair market value of the stock on the date of grant.

 

Settlement of Awards. The appreciation distribution upon exercise of a stock appreciation right may be paid in cash, shares of Del Monte’s common stock, or a combination of cash and shares, as determined by the Committee.

 

Vesting. Stock appreciation rights vest and become exercisable at the rate specified in the stock appreciation right agreement as determined by the Committee. Vesting typically will occur during the participant’s employment with Del Monte or a subsidiary. If a participant’s employment is terminated by the participant on account of retirement (as defined in the Amended 2002 Plan) or, for participants who are vice presidents or above upon termination, if the participant is terminated by Del Monte or a subsidiary without cause (as defined in the Amended 2002 Plan) or if the participant terminates his employment for good reason (as defined in the participant’s employment contract or, if included therein, the applicable executive severance plan), then the stock appreciation right will vest on a pro-rata basis in accordance with Del Monte’s policy in effect at the time of such termination. Moreover, if a participant’s employment is terminated on account of death or disability (as defined in the Amended 2002 Plan), then all of the shares subject to the stock appreciation right will vest and become exercisable as of the time of such termination. Shares covered by different stock appreciation rights granted under the Amended 2002 Plan may be subject to different vesting terms. The Committee has the authority to accelerate the time during which a stock appreciation right may vest or be exercised. See “– Change of Control” below for information about vesting in connection with a change of control.

 

Term. The maximum term of stock appreciation rights granted under the Amended 2002 Plan is 10 years.

 

Termination of Employment. The exercise of an option, or the cancellation, termination or expiration of an option with respect to a number of shares of common stock will cause the automatic and immediate cancellation of its related tandem SAR to the extent that the number of shares of common stock subject to such option after such exercise, cancellation, termination or expiration is less than the number of shares subject to such tandem SAR. Under the Amended 2002 Plan, in the event that a participant’s employment terminates (other than for cause or due to the participant’s disability, death or retirement), his or her stand-alone SARs may be exercised (to the extent the stand-alone SARs were exercisable at the time of the termination of employment) at any time within three months following termination. If termination is for cause, stand-alone SARs will expire and be canceled upon termination. If termination is due to the participant’s retirement (as defined in the Amended 2002 Plan), disability (as defined in the Amended 2002 Plan) or death, stand-alone SARs (to the extent exercisable at the time of termination) may be exercised until the expiration of their original terms. If a participant dies within three months following an involuntary termination of employment without cause, stand-alone SARs may be exercised (to the extent the stand-alone SARs were exercisable at the time of the termination of employment) until the expiration of their original terms or, if sooner, for one year after the participant’s death. In no event, however, may a stand-alone SAR be exercised beyond the expiration of its original term.

 

Restrictions on Transfer. Stock appreciation rights may be transferred only upon such terms and conditions as determined by the Committee.

 

Stock Bonus and Other Stock Awards; Cash Awards

 

Stock bonus awards may be granted under the Amended 2002 Plan pursuant to terms and conditions determined by the Committee at the time of grant. The Committee may also or in the alternative grant other stock awards that are not restricted to any specified form or structure and may include, without limitation, restricted stock, restricted stock units, stock purchase warrants, performance units or performance shares. In

addition, performance units may be in the form of cash awards that are not tied to the value of Del Monte common stock.

 

The Amended 2002 Plan provides that dividend equivalents may be credited with respect to shares covered by deferred stock units, as determined by the Committee and provided in the applicable award agreement. At the discretion of the Committee, such dividend equivalents may be converted into additional shares of common stock covered by the deferred stock units. Any such additional shares will be subject to all the terms and conditions of the underlying award agreement.

 

Performance-Based Stock and Cash Awards

 

Under the Amended 2002 Plan, a stock award or a cash award may be based upon certain service conditions or upon the attainment during a certain period of time of certain performance goals. The length of any performance period, the performance goals to be achieved during the performance period, and the measure of whether and to what degree such performance goals have been attained shall be determined by the Committee. The maximum number of shares of common stock that may be granted to any individual in any fiscal year attributable to such performance-based stock awards may not exceed 2,000,000 shares of common stock (as described in “– Eligibility” above). The maximum value of performance-based cash awards payable under the Amended 2002 Plan for any one fiscal year to any individual is $3,000,000. Prior to its July 28, 2009 amendment and restatement, the 2002 Plan provided that the maximum value of performance-based cash awards payable for any one fiscal year to any individual was $2,000,000.

 

In granting a performance-based stock award or a performance-based cash award, the Committee will set a period of time (a “performance period”) over which the attainment of one or more goals (“performance goals”) will be measured for the purpose of determining whether the award recipient has a vested right in or to such award. The Committee shall designate in writing the target awards, performance goals and factors (reflecting targets for such performance goals and relative weighting) not later than 90 days following the beginning of a performance period (but in no event after twenty-five percent (25%) of the performance period has elapsed), provided that the outcome of the selected performance goals is substantially uncertain at that time. The Committee may, in its discretion, direct that any performance award be reduced on account of individual and corporate performance below the amount calculated on the basis of one or more of the following performance criteria and related factors.

 

Performance goals may be based (either individually or in combination) on Del Monte as a whole or individual units of Del Monte, and measured either absolutely or relative to a designated group of comparable companies. The following are the business criteria that the Committee may use in establishing performance goals under the Amended 2002 Plan:

 

 

 

Under the Amended 2002 Plan, when establishing the applicable performance goals for a performance period using one or more of the foregoing business criteria, the Committee is authorized to specify whether the applicable performance goal shall exclude certain measurable components, including, without limitation, one or more of the following, provided that the achievement or non-achievement of the resulting performance goal may be objectively determined from the financial information collected by Del Monte in the preparation of its financial reports: (i) restructuring and/or other nonrecurring charges; (ii) exchange rate effects, as applicable, for non-U.S. dollar denominated performance goals; (iii) the effects of changes to generally accepted accounting principles required by the Financial Accounting Standards Board; (iv) the effects of any statutory adjustments to corporate tax rates; (v) the effects of any “extraordinary items” as determined under generally accepted accounting principles; (vi) transformation-related expenses; (vii) the impact of purchase accounting; (viii) integration expenses; (ix) refinancing expenses; (x) litigation-related expenses; (xi) cash used in or provided by large acquisitions or divestitures; (xii) the impact of corporate transactions such as mergers, acquisitions and divestitures (including, but not limited to, cash flows of large acquisition or divestiture transactions); (xiii) any gain recognized in connection with the sale of businesses; (xiv) asset and/or goodwill write-downs, (xv) litigation or claim judgments or settlements; (xvi) the effect of changes in tax laws or other

laws or provisions affecting reported financial results; and (xvii) any reorganization and restructuring programs.

 

Changes to Capital Structure

 

If any change is made to the outstanding shares of Del Monte’s common stock by reason of any stock dividend or split, recapitalization, merger, consolidation, combination or exchange of shares or similar corporate change, the maximum aggregate number of shares of common stock with respect to which the Committee may grant stock awards will be appropriately adjusted by the Committee. In the event of any change in the number of shares of common stock outstanding by reason of any other event or transaction, the Committee may, but need not, make such adjustments in the number and class of shares of common stock with respect to which stock awards may be granted as the Committee may deem appropriate.

 

Subject to any required action by the stockholders of Del Monte, in the event of any increase or decrease in the number of issued shares of common stock resulting from a subdivision or consolidation of shares of common stock or the payment of a stock dividend (but only on the shares of common stock), or any other increase or decrease in the number of such shares effected without receipt or payment of consideration by Del Monte, or change in the capitalization of Del Monte, the Committee will proportionally adjust the number of shares of common stock subject to each outstanding stock award, and the applicable exercise price per share of common stock of each such award to prevent dilution or the enlargement of rights.

 

Change of Control

 

Upon the occurrence of certain events constituting a change of control of Del Monte (as defined in the Amended 2002 Plan) (a “Change of Control”), all outstanding awards will vest and become immediately exercisable. The Committee in its discretion will determine whether outstanding awards will vest and become automatically exercisable in the event of a transaction other than a Change of Control. Further, the Committee in its discretion will determine whether any outstanding awards will, in the context of a Change of Control or any other transaction, be converted into comparable awards of a successor entity or redeemed for payment in cash or kind or both.

 

The acceleration of vesting of a stock or cash award in the event of a Change of Control under the Amended 2002 Plan may be viewed as an anti-takeover provision, which may have the effect of discouraging a proposal to acquire or otherwise obtain control of Del Monte.

 

Repayment for Misconduct

 

Under the Amended 2002 Plan, any payment to a participant will be subject to repayment if each of the following conditions is met:

 

 

If, in the Committee’s opinion, the participant knowingly or with gross negligence engaged in the misconduct, then (i) in the case of an option, stand-alone SAR or tandem SAR (the “Option/SAR”) that was granted to the participant during the 12-month period after the restated financial report (i.e., the financial report that was later restated) was first publicly issued or filed with the SEC, the participant shall forfeit any unexercised portion of such Option/SAR as well as any common stock or cash acquired or received through exercise of such Option/SAR, and shall repay Del Monte for any profits received by the participant from any sale or other disposition of common stock acquired by the participant under such Option/SAR; (ii) in the case of a stock

bonus, the participant shall repay Del Monte any amounts received by the participant under such stock bonus during the 12-month period after the restated financial report (i.e., the financial report that was later restated) was first publicly issued or filed with the SEC, and if the grant of such stock bonus occurred during such 12-month period, any outstanding portion of such grant shall be cancelled; and (iii) in the case of cash performance units that resulted in payments to the participant during the 12-month period after the restated financial report (i.e., the financial report that was later restated) was first publicly issued or filed with the SEC, the participant shall repay Del Monte the sum of any such amounts paid during such 12-month period and, to the extent the participant defers any portion of such amounts under any applicable plan, shall forfeit (or repay to Del Monte if previously distributed) such deferred amounts and any matching contributions allocated to the participant under that plan on such deferred amounts. If the Committee determines that the participant did not engage in the misconduct, the Committee shall determine, in its sole discretion, to correct any unjust enrichment, if any portion of the amounts described in the preceding sentence are subject to repayment by the participant by any legally permitted means that the Committee deems appropriate. Prior to its July 28, 2009 amendment and restatement, the 2002 Plan did not embed such forfeiture and repayment provisions in the Plan itself. However, awards made in fiscal 2009 included similar provisions.

 

Section 409A

 

Effective as of January 1, 2005, to the extent that any amount or benefit that constitutes “deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), is payable or distributable to a participant under the Amended 2002 Plan solely by reason of the occurrence of a Change of Control or due to the participant’s disability or “separation from service” (as defined under Section 409A ), such amount or benefit will not be payable or distributable to the participant unless the Committee determines that (i) the circumstances giving rise to such Change of Control, disability or separation from service meet the applicable definitions in Section 409A, or (ii) the payment or distribution of such amount or benefit would be exempt from the application of Section 409A. Any payment or distribution that otherwise would be made to a participant who is a “specified employee” under Section 409A on account of separation from service may not be made until 6 months after the date of such separation from service unless the payment or distribution is otherwise exempt from Section 409A of the Code. To the extent that the Committee determines that any incentive award granted under the Amended 2002 Plan is subject to Section 409A, the Committee may adopt such amendments to the Amended 2002 Plan and the applicable incentive award agreement or adopt other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that the Committee determines are necessary or appropriate to (i) exempt the incentive award from Section 409A and/or preserve the intended tax treatment of the benefits provided with respect to the incentive award, or (ii) comply with the requirements of Section 409A.

 

Duration, Termination and Amendment

 

The Board may suspend or terminate the Amended 2002 Plan without stockholder approval or ratification at any time. Under the terms of the 2002 Plan, prior to the July 28, 2009 amendment and restatement, no incentive stock options could be granted on or after August 6, 2017. However, under the terms of the Amended 2002 Plan, no incentive stock options may be granted on or after July 28, 2019.

 

The Board may amend or modify the Amended 2002 Plan at any time. However, no amendment shall be effective unless approved by the stockholders of Del Monte to the extent that the amendment increases the number of shares that may be issued under the Amended 2002 Plan. In addition, no amendment, suspension or termination may impair rights and obligations under any stock award granted prior to such action, except with the written consent of the affected participant.

 

Prohibition on Repricing

 

In general, the Amended 2002 Plan provides that, without the approval of Del Monte’s stockholders, no option, tandem SAR, stand-alone SAR, stock bonus or other incentive award granted under the Amended 2002 Plan will be repriced, replaced or regranted through (a) cancellation and regrant at a lower price, (b) cancellation of an option, tandem SAR or stand-alone SAR in exchange for cash or a new incentive award, (c) lowering the exercise price of a previously awarded option, (d) lowering the grant price of a previously awarded stock appreciation right, (e) lowering the purchase price of a previously awarded stock bonus or other incentive award or (f) any other action that is treated as a repricing under generally accepted accounting principles. Prior to its July 28, 2009 amendment and restatement, the 2002 Plan did not include the explicit prohibitions regarding cancellation in exchange for cash or a new incentive award or any other action that is treated as a repricing under generally accepted accounting principles.

 

Federal Income Tax Information

 

The following is a summary of the principal United States federal income taxation consequences to employees and Del Monte with respect to participation in the Amended 2002 Plan. This summary is not intended to be exhaustive, and does not discuss the income tax laws of any city, state or foreign jurisdiction in which a participant may reside. Plan participants should not rely on this summary and should instead seek advice based on their particular circumstances from an independent tax advisor.

 

Incentive Stock Options. Incentive stock options granted under the Amended 2002 Plan are intended to be eligible for the favorable federal income tax treatment accorded “incentive stock options” under the Internal Revenue Code of 1986, as amended (the “Code”). There generally are no federal income tax consequences to the participant or Del Monte by reason of the grant or exercise of an incentive stock option. However, the exercise of an incentive stock option may increase the participant’s alternative minimum tax liability, if any.

 

If a participant holds stock acquired through exercise of an incentive stock option for more than two years from the date on which the option was granted and more than one year after the date the option was exercised for those shares, any gain or loss on a disposition of those shares (a “qualifying disposition”) will be a long-term capital gain or loss. Upon such a qualifying disposition, Del Monte will not be entitled to any income tax deduction.

 

Generally, if the participant disposes of the stock before the expiration of either of these holding periods (a “disqualifying disposition”), then at the time of disposition the participant will realize taxable ordinary income equal to the lesser of (i) the excess of the stock’s fair market value on the date of exercise over the exercise price, or (ii) the participant’s actual gain, if any, on the purchase and sale. The participant’s additional gain or any loss upon the disqualifying disposition will be a capital gain or loss, which will be long-term or short-term depending on whether the stock was held for more than one year.

 

To the extent the participant recognizes ordinary income by reason of a disqualifying disposition, generally Del Monte will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m), and the satisfaction of a tax reporting obligation) to a corresponding income tax deduction in the tax year in which the disqualifying disposition occurs.

 

Nonqualified Stock Options. No taxable income is recognized by a participant upon the grant of a nonqualified stock option. Upon exercise of a nonqualified stock option, the participant will recognize ordinary income equal to the excess, if any, of the fair market value of the purchased shares on the exercise date over the exercise price paid for those shares. Generally, Del Monte will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m), and the satisfaction of a tax reporting obligation) to a corresponding income tax deduction in the tax year in which such ordinary income is recognized by the participant.

 

Upon disposition of the stock, the participant will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such stock plus any amount recognized as ordinary income upon acquisition (or vesting) of the stock. Such gain or loss will be long-term or short-term depending on whether the stock was held for more than one year.

 

Stock Appreciation Rights. No taxable income is realized upon the receipt of a stock appreciation right. Upon exercise of the stock appreciation right, the fair market value of the shares received is recognized as ordinary income to the participant in the year of such exercise. Generally, with respect to employees, Del Monte is required to withhold from the payment made on exercise of the stock appreciation right or from regular wages or supplemental wage payments an amount based on the ordinary income recognized. Subject to the requirement of reasonableness, Section 162(m) and the satisfaction of a reporting obligation, Del Monte will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the participant.

 

Stock Bonus Awards. Upon receipt of a stock bonus award, the participant will recognize ordinary income equal to the excess, if any, of the fair market value of the shares on the date of issuance over the purchase price, if any, paid for those shares. Del Monte will be entitled (subject to the requirement of reasonableness, the provisions of Section 162(m), and the satisfaction of a tax reporting obligation) to a corresponding income tax deduction in the tax year in which such ordinary income is recognized by the participant.

 

However, if the shares issued upon the grant of a stock bonus award are unvested and subject to repurchase by Del Monte in the event of the participant’s termination of service prior to vesting in those shares, the participant will not recognize any taxable income at the time of issuance, but will have to report as ordinary income, as and when Del Monte’s repurchase right lapses, an amount equal to the excess of (i) the fair market value of the shares on the date the repurchase right lapses, over (ii) the purchase price, if any, paid for the shares. The participant may, however, elect under Section 83(b) of the Code to include as ordinary income in the year of issuance an amount equal to the excess of (x) the fair market value of the shares on the date of issuance, over (y) the purchase price, if any, paid for such shares. If the Section 83(b) election is made, the participant will not recognize any additional income as and when the repurchase right lapses.

 

Upon disposition of the stock acquired upon the receipt of a stock bonus award, the participant will recognize a capital gain or loss equal to the difference between the selling price and the sum of the amount paid for such stock plus any amount recognized as ordinary income upon issuance (or vesting) of the stock. Such gain or loss will be long-term or short-term depending on whether the stock was held for more than one year.

 

Potential Limitation on Company Deductions. Section 162(m) denies a deduction to any publicly-held corporation for compensation paid to certain “covered employees” in a taxable year to the extent that compensation to such covered employee exceeds $1 million. It is possible that compensation attributable to awards under the Amended 2002 Plan, when combined with all other types of compensation received by a covered employee from Del Monte, may cause this limitation to be exceeded in any particular year.

 

Certain kinds of compensation, including qualified “performance-based compensation,” are disregarded for purposes of the deduction limitation. In accordance with Treasury Regulations issued under Section 162(m), compensation attributable to stock options and stock appreciation rights will qualify as performance-based compensation if such awards are approved by a compensation committee comprised solely of “outside directors” and the plan contains a per-employee limitation on the number of shares for which such awards may be granted during a specified period, the per-employee limitation is approved by the stockholders, and the exercise or strike price of the award is no less than the fair market value of the stock on the date of grant.

 

Compensation attributable to stock bonus awards and cash bonus awards will qualify as performance-based compensation, provided that: (i) the award is approved by a compensation committee comprised solely of “outside directors,” (ii) the award is granted (or exercisable) only upon the achievement of an objective performance goal established in writing by the compensation committee while the outcome is substantially uncertain, (iii) such compensation committee certifies in writing prior to the granting (or exercisability) of the

award that the performance goal has been satisfied, and (iv) prior to the granting (or exercisability) of the award, stockholders have approved the material terms of the award (including the class of employees eligible for such award, the business criteria on which the performance goal is based, and the maximum amount, or formula used to calculate the amount, payable upon attainment of the performance goal).

 

Awards under the 2002 Plan

 

As of the date of this proxy statement, the number of shares, if any, that will be received by or allocated to the following persons or groups under the Amended 2002 Plan are not yet determinable: (i) our Chief Executive Officer, (ii) each of our other named executive officers, (iii) our executive officers as a group, (iv) our non-employee directors as a group, and (v) our employees as a group, other than our executive officers.

 

Fiscal 2009 Awards under the 2002 Plan. The following table sets forth the equity-based awards under the 2002 Plan that were issued or became outstanding in fiscal year 2009.

 

 

 

For information regarding cash-based awards under the 2002 Plan, see “Proposal 4 – Approval of the Del Monte Foods Company Annual Incentive Plan, as Amended and Restated – Awards under the Amended AIP.”

 

Total Awards Granted under the 2002 Plan. The table below reflects all equity-based awards under the 2002 Plan that were issued or became outstanding on or prior to May 3, 2009. From time to time, in accordance with the terms of the awards, some of the awards (or a portion thereof) have been cancelled, have expired or have been exercised (or otherwise resulted in the issuance of shares) and therefore are no longer outstanding. Accordingly, the table below does not reflect the number of currently outstanding awards.

 

Under the 2002 Plan, as of May 3, 2009, eligible employees, non-employee directors and others held:

 

 

 

For information regarding outstanding awards held by our directors and named executive officers, please see “Director Compensation” and “Executive Compensation – Outstanding Equity Awards at Fiscal 2009 Year End.”

 

 

 

 

On July 28, 2009, on the recommendation of the Compensation Committee, the Board of Directors of Del Monte Foods Company adopted the Del Monte Foods Company Annual Incentive Plan, as amended and restated effective July 28, 2009, subject to stockholder approval (the “Amended AIP”). The Amended AIP is substantially similar to the Del Monte Foods Company Annual Incentive Plan, which was previously adopted by the Board and approved by the stockholders effective April 28, 2003 (as used in this Proposal 4, the “AIP”). Nevertheless, there are a number of differences, which are described below. If approved by stockholders, the Amended AIP will first apply to Del Monte’s fiscal year beginning May 3, 2010 (i.e., fiscal 2011).

 

We are submitting the Amended AIP to stockholders for approval to preserve Del Monte’s federal income tax deduction for performance-based compensation paid to certain executive officers under Section 162(m) of the Internal Revenue Code of 1986, as amended (“Section 162(m)”). Annual cash incentives are an important component of Del Monte’s total compensation package, and enable the Compensation Committee to link annual corporate and business priorities with individual and group performance goals; tie financial rewards to measurable achievements, reinforcing pay-for-performance; reward individual performance; and provide a variable award opportunity that attracts, retains and motivates our leadership and key employees.

 

The Amended AIP includes the following main changes:

 

 

 

Section 162(m) denies a deduction to any publicly held corporation for certain compensation paid to “covered employees” in a taxable year to the extent that compensation paid to a covered employee exceeds $1 million. However, some kinds of compensation, including qualified “performance-based compensation,” are not subject to this deduction limitation. Compensation awarded under the Amended AIP (except for awards attributable to Individual Objectives/MBOs that are not based on the business criteria set forth in the Amended AIP, as described in “– Types of Performance Goals” below) may qualify as “performance-based compensation” under Section 162(m) if, among other things, the material terms of the compensation have been approved by the stockholders. If this Proposal 4 is approved by the stockholders, such compensation paid pursuant to the Amended AIP may qualify as performance-based compensation under Section 162(m), provided that: (i) the compensation is awarded by the Compensation Committee, which must be composed solely of two or more “outside directors,” (ii) the compensation is paid only upon the achievement of one or more objective performance goals established in writing by the Compensation Committee while the outcome is substantially uncertain, and (iii) the Compensation Committee certifies in writing prior to the payment of the compensation that the performance goals have been satisfied.

 

Stockholders are requested in this Proposal 4 to approve the Amended AIP. The affirmative vote of the holders of a majority of the shares present in person or represented by proxy and entitled to vote at the 2009 Annual Meeting of Stockholders will be required to approve the Amended AIP. Abstentions will be counted toward the tabulation of votes cast on proposals presented to the stockholders and will have the same effect as negative votes. Broker non-votes are not counted for any purpose in determining whether this matter has been approved and therefore will have no effect.

A general description of the Amended AIP is set forth below. However, this description is qualified in its entirety by reference to the full text of the Amended AIP, a copy of which is attached as Annex C to these proxy materials.

 

The Board Of Directors Recommends

A Vote In Favor Of Proposal 4

 

Description of the Del Monte Foods Company Annual Incentive Plan, as Amended and Restated Effective July 28, 2009

 

Purpose

 

The Amended AIP provides annual cash bonuses to certain management employees, including the named executive officers. The objectives of the Amended AIP are:

 

 

Eligibility

 

To be eligible for participation in the Amended AIP, an employee must be in exempt salary grade 13 (or equivalent) or above and must not be a participant in a sales incentive program.