-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SapFJxWLK/NJvPmhlCQch6FSDh9gxxbd/MkOI8x0pV1lXsoXVU+vEyH/jaa8ymUj uOEVmvK3J0FeL+m8n1Mz3g== /in/edgar/work/20000613/0000893220-00-000758/0000893220-00-000758.txt : 20000919 0000893220-00-000758.hdr.sgml : 20000919 ACCESSION NUMBER: 0000893220-00-000758 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20000430 FILED AS OF DATE: 20000613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMPBELL SOUP CO CENTRAL INDEX KEY: 0000016732 STANDARD INDUSTRIAL CLASSIFICATION: [2000 ] IRS NUMBER: 210419870 STATE OF INCORPORATION: NJ FISCAL YEAR END: 0729 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-03822 FILM NUMBER: 654207 BUSINESS ADDRESS: STREET 1: CAMPBELL PL CITY: CAMDEN STATE: NJ ZIP: 08103 BUSINESS PHONE: 6093424800 MAIL ADDRESS: STREET 1: CAMPBELL PL CITY: CAMDEN STATE: NJ ZIP: 08103 10-Q 1 0001.txt FORM 10-Q CAMPBELL SOUP COMPANY 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended Commission File Number April 30, 2000 1-3822 [Campbell Soup Company Logo] New Jersey 21-0419870 State of Incorporation I.R.S. Employer Identification No. Campbell Place Camden, New Jersey 08103-1799 Principal Executive Offices Telephone Number: (856) 342-4800 Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No . There were 421,115,848 shares of Capital Stock outstanding as of June 6, 2000. 2 PART I. FINANCIAL INFORMATION CAMPBELL SOUP COMPANY CONSOLIDATED Statements of Earnings (unaudited) (millions, except per share amounts)
Three Months Ended Nine Months Ended ------------------ ----------------- APRIL May APRIL May 30, 2000 2, 1999 30, 2000 2, 1999 -------- ------- -------- ------- Net sales $1,394 $1,492 $5,078 $5,128 - ---------------------------------------------------------------------------------------------------------- Costs and expenses Cost of products sold 664 730 2,321 2,416 Marketing and selling expenses 389 370 1,281 1,301 Administrative expenses 68 69 238 221 Research and development expenses 14 15 45 48 Other expenses 15 24 65 40 - ---------------------------------------------------------------------------------------------------------- Total costs and expenses 1,150 1,208 3,950 4,026 - ---------------------------------------------------------------------------------------------------------- Earnings before interest and taxes 244 284 1,128 1,102 Interest, net 44 43 140 129 - ---------------------------------------------------------------------------------------------------------- Earnings before taxes 200 241 988 973 Taxes on earnings 61 79 333 328 - ---------------------------------------------------------------------------------------------------------- Net earnings $ 139 $ 162 $ 655 $ 645 ========================================================================================================== Per share - basic Net earnings $ .33 $ .37 $ 1.54 $ 1.46 ========================================================================================================== Dividends $ .225 $ .225 $ .675 $ .660 ========================================================================================================== Weighted average shares outstanding - basic 423 438 426 443 ========================================================================================================== Per share - assuming dilution Net earnings $ .32 $ .37 $ 1.52 $ 1.44 ========================================================================================================== Weighted average shares outstanding - assuming dilution 432 443 432 448 ========================================================================================================== See Notes to Financial Statements
2 3 CAMPBELL SOUP COMPANY CONSOLIDATED Balance Sheets (unaudited) (millions, except per share amounts)
APRIL August 30, 2000 1, 1999 -------- ------- Current assets Cash and cash equivalents $ 34 $ 6 Accounts receivable 470 541 Inventories 560 615 Other current assets 122 132 - ----------------------------------------------------------------------------------------------------- Total current assets 1,186 1,294 - ----------------------------------------------------------------------------------------------------- Plant assets, net of depreciation 1,622 1,726 Intangible assets, net of amortization 1,772 1,910 Other assets 615 592 - ----------------------------------------------------------------------------------------------------- Total assets $ 5,195 $ 5,522 ===================================================================================================== Current liabilities Notes payable $ 1,887 $ 1,987 Payable to suppliers and others 351 511 Accrued liabilities 422 415 Dividend payable 95 97 Accrued income taxes 228 136 - ----------------------------------------------------------------------------------------------------- Total current liabilities 2,983 3,146 - ----------------------------------------------------------------------------------------------------- Long-term debt 1,270 1,330 Nonpension postretirement benefits 375 394 Other liabilities, including deferred income taxes of $249 and $263 404 417 - ----------------------------------------------------------------------------------------------------- Total liabilities 5,032 5,287 - ----------------------------------------------------------------------------------------------------- Shareowners' equity Preferred stock; authorized 40 shares; none issued - - Capital stock, $.0375 par value; authorized 560 shares; issued 542 shares 20 20 Capital surplus 318 382 Earnings retained in the business 4,409 4,041 Capital stock in treasury, at cost (4,348) (4,058) Accumulated other comprehensive income (236) (150) - ----------------------------------------------------------------------------------------------------- Total shareowners' equity 163 235 - ----------------------------------------------------------------------------------------------------- Total liabilities and shareowners' equity $ 5,195 $ 5,522 ===================================================================================================== See Notes to Financial Statements
3 4 CAMPBELL SOUP COMPANY CONSOLIDATED Statements of Cash Flows (unaudited) (millions)
Nine Months Ended ----------------- APRIL May 30, 2000 2, 1999 -------- ------- Cash flows from operating activities: Net earnings $655 $645 Non-cash charges to net earnings Depreciation and amortization 189 191 Deferred income taxes 1 (6) Other, net 21 19 Changes in working capital Accounts receivable 61 128 Inventories 35 (25) Other current assets and liabilities (28) (207) - -------------------------------------------------------------------- Net cash provided by operating activities 934 745 - -------------------------------------------------------------------- Cash flows from investing activities: Purchases of plant assets (120) (198) Sales of plant assets 4 8 Businesses acquired - (105) Sales of businesses 10 - Other, net (25) (27) - -------------------------------------------------------------------- Net cash used in investing activities (131) (322) - -------------------------------------------------------------------- Cash flows from financing activities: Long-term borrowings - 325 Repayments of long-term borrowings (7) (5) Short-term borrowings 686 1,315 Repayments of short-term borrowings (809) (1,036) Dividends paid (289) (288) Treasury stock purchases (374) (774) Treasury stock issuances 12 42 Other, net - (2) - -------------------------------------------------------------------- Net cash used in financing activities (781) (423) - -------------------------------------------------------------------- Effect of exchange rate changes on cash 6 8 - -------------------------------------------------------------------- Net change in cash and cash equivalents 28 8 Cash and cash equivalents - beginning of period 6 16 - -------------------------------------------------------------------- Cash and cash equivalents - end of period $ 34 $ 24 ==================================================================== See Notes to Financial Statements
4 5 CAMPBELL SOUP COMPANY CONSOLIDATED Statements of Shareowners' Equity (unaudited) (millions, except per share amounts)
Capital stock ------------- Earnings Accumulated Issued In treasury retained other Total ------ ----------- Capital in the comprehensive shareowners' Shares Amount Shares Amount surplus business income equity - ------------------------------------------------------------------------------------------------------------------------------------ Balance at August 2,1998 542 $20 (94) $(3,083) $395 $3,706 $(164) $ 874 Comprehensive income Net earnings 645 645 Foreign currency translation adjustments 24 24 Dividends ($.660 per share) (291) (291) Treasury stock purchased (16) (774) (774) Treasury stock issued under management incentive and stock option plans 2 37 (16) 21 - ------------------------------------------------------------------------------------------------------------------------------------ Balance at May 2, 1999 542 $20 (108) $(3,820) $379 $4,060 $(140) $ 499 ==================================================================================================================================== BALANCE AT AUGUST 1, 1999 542 $20 (113) $(4,058) $382 $4,041 $(150) $ 235 COMPREHENSIVE INCOME NET EARNINGS 655 655 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS (86) (86) DIVIDENDS ($.675 PER SHARE) (287) (287) TREASURY STOCK PURCHASED (10) (373) (373) TREASURY STOCK ISSUED UNDER MANAGEMENT INCENTIVE AND STOCK OPTION PLANS 2 83 (64) 19 - ------------------------------------------------------------------------------------------------------------------------------------ BALANCE AT APRIL 30, 2000 542 $20 (121) $(4,348) $319 $4,409 $(236) $ 163 ==================================================================================================================================== See Notes to Financial Statements
5 6 CAMPBELL SOUP COMPANY CONSOLIDATED Notes to Financial Statements (unaudited) (dollars in millions, except per share amounts) (a) The financial statements reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results for the indicated periods. All such adjustments are of a normal recurring nature. Certain reclassifications were made to the prior year amounts to conform with current presentation. (b) Comprehensive Income In 1999, the company adopted Statement of Financial Accounting Standards ("SFAS") No. 130, "Reporting Comprehensive Income," issued in June 1997. SFAS 130 establishes a standard for reporting comprehensive income, which is comprised of net income and "other" comprehensive income items, in the financial statements. "Other" comprehensive income includes items recorded in shareowners' equity that are not the result of transactions with shareowners, such as foreign currency translation adjustments. As of April 30, 2000 and May 2, 1999, accumulated other comprehensive income, as reflected in the statements of shareowners' equity, represents the cumulative translation adjustment. (c) Restructuring Program A restructuring charge of $41 ($30 after tax or $.07 per share) was recorded in the fourth quarter fiscal 1999 to cover the costs of a restructuring and divestiture program approved in July 1999 by the company's Board of Directors. This charge relates to the streamlining of certain North American and European production and administrative facilities and the anticipated cost of a divestiture of a non-strategic business with annual sales of approximately $25. The divestiture was completed in April 2000. The restructuring charge includes approximately $20 in cash charges primarily related to severance and employee benefit costs. The balance of the restructuring charge includes non-cash charges related to the disposition of plant assets and the divestiture. The restructuring and divestiture program will be substantially completed by the end of fiscal 2000. The expected net cash outflows will not have a material impact on the company's liquidity. From this program, the company expects to realize annual pre-tax savings of approximately $21. 6 7 A summary of restructuring reserves at April 30, 2000, and related activity is as follows:
Losses on Asset Dispositions Severance and Other Exit and Divestitures Benefits Costs Total ---------------- ------------- ---------- ----- Balance at August 1, 1999 $ 19 38 3 $ 60 SPENDING $(19) (21) (2) $(42) ------ ------ ------ ------ BALANCE AT APRIL 30, 2000 $ 0 17 1 $ 18 ====== ====== ====== ======
The reserve balances as of August 1, 1999 also include amounts related to a fiscal 1998 program. The program was substantially completed by the second quarter fiscal 2000. (d) Earnings Per Share For the periods presented in the Statements of Earnings, the calculations of basic EPS and EPS assuming dilution vary in that the weighted average shares outstanding assuming dilution includes the incremental effect of stock options. For the three and nine month periods ended April 30, 2000, the weighted average shares outstanding assuming dilution also includes the incremental effect of approximately seven million and three million shares, respectively, under a forward stock purchase contract. See note (g) for a description of the contract. For the nine month period ended May 2, 1999, the weighted average shares outstanding assuming dilution also includes the incremental effect of approximately one million shares under the contract. (e) Segment Information The company operates in three business segments: Soup and Sauces, Biscuits and Confectionery, and Away From Home. The segments are managed as strategic units due to their distinct manufacturing processes, marketing strategies and distribution channels. The Soup and Sauces segment includes the worldwide soup businesses, Prego spaghetti sauces, Pace Mexican sauces, Franco-American pastas and gravies, Swanson broths, and V8 and V8 Splash beverages. The Biscuits and Confectionery segment includes the Godiva Chocolatier, Pepperidge Farm, and Arnotts Limited businesses. Away From Home represents products, including Campbell's soups and Campbell's Specialty Kitchen entrees, which are distributed to the food service and meal replacement markets. Accounting policies for measuring segment assets and earnings before interest and taxes are substantially consistent with those described in the summary of significant accounting policies included in the company's fiscal 1999 Annual Report on Form 10-K. The company evaluates segment performance based on earnings before interest 7 8 and taxes, excluding certain non-recurring charges. Away From Home products are principally produced by the tangible assets of the company's other segments, except for Stockpot premium refrigerated soups, which are produced in a separate facility, and for certain frozen products which are produced under contract manufacturing agreements. Accordingly, with the exception of the designated Stockpot facility, tangible assets have not been allocated to the Away From Home segment. For products produced by the assets of other segments, depreciation and amortization are allocated to Away From Home based on budgeted production hours. Transfers between segments are recorded at cost plus mark-up or at market. 8 9 The following tables present information about the company's reportable segments: APRIL 30, 2000
Away Soup and Biscuits and From Corporate and Sauces Confectionery Home Other(1) Eliminations(2) Total -------- ------------- ---- -------- ---------------- ----- THREE MONTHS ENDED Net sales $ 927 347 132 5 (17) $1,394 Earnings before interest and taxes $ 204 42 13 (1) (14) $ 244 Depreciation and amortization $ 31 24 6 - 5 $ 66 Capital expenditures $ 27 14 1 - 5 $ 47 NINE MONTHS ENDED Net sales $3,552 1,140 410 27 (51) $5,078 Earnings before interest and taxes $ 968 178 44 - (62) $1,128 Depreciation and amortization $ 94 65 14 - 16 $ 189 Capital expenditures $ 70 37 4 - 9 $ 120 Segment assets $2,769 1,344 362 7 713 $5,195 (1) Represents financial information of certain prepared convenience food businesses not categorized as reportable segments. (2) Represents elimination of intersegment sales, unallocated corporate expenses and unallocated assets, including corporate offices, deferred income taxes and prepaid pension assets.
9 10 May 2, 1999
Away Soup and Biscuits and From Corporate and Sauces Confectionery Home Other(1) Eliminations(2) Total -------- -------------- ---- -------- ---------------- ----- THREE MONTHS ENDED Net sales $1,010 340 122 34 (14) $1,492 Earnings before interest and taxes $ 249 44 13 (1) (21) $ 284 Depreciation and amortization $ 31 21 4 3 5 $ 64 Capital expenditures $ 47 17 4 1 3 $ 72 NINE MONTHS ENDED Net sales $3,578 1,109 382 110 (51) $5,128 Earnings before interest and taxes $ 929 173 46 6 (52) $1,102 Depreciation and amortization $ 96 62 10 8 15 $ 191 Capital expenditures $ 124 45 7 9 13 $ 198 Segment assets $2,994 1,494 314 159 742 $5,703 (1) Represents financial information of certain prepared convenience food businesses not categorized as reportable segments. (2) Represents elimination of intersegment sales, unallocated corporate expenses and unallocated assets, including corporate offices, deferred income taxes and prepaid pension assets.
10 11 (f) Inventories
APRIL August 30, 2000 1, 1999 -------- ------- Raw materials, containers and supplies $204 $207 Finished products 356 408 -------- ------- $560 $615
Approximately 65% of inventory in fiscal 2000 is accounted for on the last in, first out (LIFO) method of determining cost. If the first in, first out inventory valuation method had been used exclusively, inventories would not differ materially from the amounts reported at April 30, 2000 and August 1, 1999. (g) Forward Stock Purchase Program In October 1998, the company entered into a forward stock purchase contract in connection with the company's equity exposure from its stock option program. The contract, which matures in fiscal 2004, provides for the company to repurchase approximately 11 million shares at an average price of approximately $47 per share. The company may elect to settle the contract on a net share basis in lieu of physical settlement. The contract permits early settlement and may be extended for an additional five-year term. If the forward purchase contract had been settled on a net share basis as of April 30, 2000, the company would have provided the counterparty with approximately nine million shares of its capital stock. In March 2000, the Emerging Issues Task Force (EITF) released Issue Number 00-07, "Application of EITF Issue No. 96-13, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," to Equity Derivative Transactions That Contain Certain Provisions That Require Cash Settlement if Certain Events Outside the Control of the Issuer Occur." The EITF reached a consensus that equity derivative contracts that include any provision that could require net cash settlement can no longer be accounted for as equity. Such contracts are initially recorded at fair value and must be accounted for as an asset or liability with subsequent changes in the fair value of the derivative included in earnings. Similarly the EITF reached a consensus that equity derivative contracts with any provisions that could require physical settlement by a cash payment to the counterparty in exchange for the issuer's shares can no longer be accounted for as permanent equity. Instead, the contracts should be classified as temporary or mezzanine equity. Both of these conclusions do not allow for an evaluation of the likelihood that otherwise unlikely or remote events would trigger cash settlement. 11 12 For contracts that existed before March 16, 2000, the provisions of the consensus are to be applied on December 31, 2000 to those contracts that remain outstanding at that date, based on the contract terms then in place. The effect of the application that requires asset/liability treatment for contracts with net cash settlement provisions should be calculated as of December 31, 2000, and presented on that date as a cumulative effect of change in accounting principle. Any reclassification of amounts from permanent equity to temporary equity as a result of settlement provisions that require physical cash settlement should be made for balance sheets as of and subsequent to December 31, 2000. The company's forward stock contract is currently accounted for as permanent equity. The company is evaluating the impact of the consensus and possible amendments to contract provisions with the counterparty. Further discussions related to the accounting for such contracts continue by the EITF and other accounting and regulatory bodies. The company expects to adopt the provisions of the consensus in the second quarter fiscal 2001. However, the ultimate resolution and impact of the accounting for the contract will be dependent upon the results of the review of contract provisions with the counterparty, possible future changes in authoritative guidance and fluctuations in the company's share price. 12 13 CAMPBELL SOUP COMPANY CONSOLIDATED MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS OVERVIEW Net sales in the third quarter ended April 30, 2000 declined 7% primarily due to lower worldwide wet soup shipments. Worldwide wet soup shipments decreased 5% as a result of an 8% decline in the U.S. Outside the U.S., wet soup shipments increased 1%. Net sales excluding currency and divestitures decreased 4% in the quarter. For the nine months ended April 30, 2000, net sales declined 1%. Net earnings increased 2% to $655 million and diluted earnings per share increased 6% to $1.52. THIRD QUARTER SALES Sales in the quarter declined 7% to $1.39 billion from $1.49 billion last year. The change in sales was due to a 5% decline in volume and mix, a 3% decline due to divestitures and currency, offset by 1% from higher selling prices. An analysis of net sales by segment follows:
(millions) 2000 1999 % CHANGE ---------- ---- ---- -------- Soup and Sauces $ 927 $ 1,010 (8)% Biscuits and Confectionery 347 340 2 Away From Home 132 122 8 -------------------------------------------------------------------------- Subtotal 1,406 1,472 (4) Other 5 34 Intersegment (17) (14) -------------------------------------------------------------------------- Total $ 1,394 $ 1,492 (7)%
13 14 The sales decline in Soup and Sauces was due primarily to a 5% decrease in worldwide wet soup volume, driven by an 8% decline in U.S. soup volume. Outside the U.S., wet soup volume increased 1%. Volume gains in France, Germany and Asia/Pacific were partially offset by declines in the United Kingdom, Canada and Japan. Beverage sales were lower than the prior year due to competitive pressure in the category. Sales of U.S. sauces and prepared foods also declined in the quarter in response to aggressive competitive activity in their respective categories. Biscuits and Confectionery reported an increase in sales compared to third quarter 1999. The increase was primarily driven by the performance of Godiva Chocolatier and the Arnotts biscuit business. Godiva Chocolatier contributed double-digit sales growth due to record Valentine's Day results and strong Easter sales. Pepperidge Farm reported lower sales as a result of continued competitive activity in the cheese cracker category although sales of frozen products increased over the prior year behind new product initiatives. Away From Home sales increased by 8% over the prior year due primarily to the expansion of the Campbell's branded soup in university cafeterias, convenience stores and other outlets. The decline on Other is due to the divestiture of Fresh Start Bakeries, Inc. in May 1999. GROSS MARGIN Gross margin, defined as net sales less cost of products sold, decreased $32 million in the quarter due to lower sales volumes. As a percent of sales, gross margin was 52.4% compared to 51.0% last year. The improvement in margin percentage was principally due to higher selling prices, cost savings generated from global procurement initiatives and continued productivity gains in manufacturing facilities, which offset the adverse mix impact resulting from declines in U.S. wet soup volume. MARKETING AND SELLING EXPENSES Marketing and selling expenses as a percent of sales increased to 27.9% from 24.8% last year. The increase was primarily due to an increase in selling costs associated with new stores in Godiva Chocolatier, an increase in marketing costs in the Pepperidge Farm business, and a shift in the timing of certain U.S. soup programs and reductions in programs to match marketplace performance. ADMINISTRATIVE EXPENSES Administrative expenses were relatively flat at approximately 5% of sales. 14 15 OTHER EXPENSES Other expenses decreased principally due to lower expenses in recognition of long-term compensation liabilities and related contracts that hedge the programs. OPERATING EARNINGS Segment operating earnings, defined as earnings before interest and taxes, decreased 15% versus the prior year due primarily to the decline in U.S. soup sales. An analysis of operating earnings by segment follows:
(millions) 2000 1999 % CHANGE ---------- ---- ---- -------- Soup and Sauces $ 204 $ 249 (18)% Biscuits and Confectionery 42 44 (5) Away From Home 13 13 - ------------------------------------------------------------------------------ Subtotal 259 306 (15) Other (1) (1) ------------------------------------------------------------------------------ 258 305 (15) Corporate (14) (21) ------------------------------------------------------------------------------ Total $ 244 $ 284 (14)%
Earnings from Soup and Sauces declined 18% due primarily to lower sales of U.S. soup. Beverages reported a decline in earnings primarily due to a decline in V8 Splash versus record sales a year ago. U.S. sauces and prepared foods reported a decline in earnings due to competition against pasta and gravy. Earnings from Biscuits and Confectionery declined by $2 million due in part to marketing investments in Pepperidge Farm products. Godiva Chocolatier reported double-digit growth in earnings due to record Valentine's Day results and strong Easter sales. Away From Home earnings were flat versus last year. 15 16 NON-OPERATING ITEMS Interest expense was consistent with the prior year. The effective tax rate was 30.5% compared to 32.7% in fiscal 1999. The decrease was due to a lower effective rate on foreign earnings primarily driven by a reduction in the Australian statutory rate. NINE MONTHS SALES Sales for the nine months declined 1% to $5.08 billion from $5.13 billion last year. The change in sales was due to a 1% decrease from volume and mix, a 2% decline due to divestitures, offset by 2% from higher selling prices. An analysis of net sales by segment follows:
(millions) 2000 1999 % CHANGE ---------- ---- ---- -------- Soup and Sauces $ 3,552 $ 3,578 (1)% Biscuits and Confectionery 1,140 1,109 3 Away From Home 410 382 7 -------------------------------------------------------------------------- Subtotal 5,102 5,069 1 Other 27 110 Intersegment (51) (51) -------------------------------------------------------------------------- Total $ 5,078 $ 5,128 (1)%
The decline in Soup and Sauces was due to declines in U.S. sauces, prepared foods and beverages and the United Kingdom business. U.S. soup sales were relatively flat versus the prior year. Germany, France and Asia/Pacific reported sales gains. Biscuits and Confectionery reported an increase in sales compared to 1999 due primarily to a double-digit increase in Godiva Chocolatier and an increase in the Australian biscuit business. The increase in Godiva Chocolatier sales was due to new retail store openings, improved comparable store sales and product innovation. Pepperidge Farm reported lower sales due to a decline in Goldfish volume. 16 17 Away From Home reported a 7% increase in sales primarily due to an increase in soup volume and improved performance in the Canadian and Pepperidge Farm businesses. GROSS MARGIN Gross margin, defined as net sales less cost of products sold, increased $45 million year-to-date. As a percent of sales, gross margin was 54.3% compared to 52.9% last year. The improvement in margin percentage was principally due to selling price increases, cost savings generated from global procurement initiatives and continued productivity gains in the manufacturing facilities. MARKETING AND SELLING EXPENSES Marketing and selling expenses as a percent of sales were relatively flat at 25.2% versus 25.4% last year. The slight decline is due to reductions in certain programs to match marketplace performance, offset by increased selling costs in Godiva Chocolatier. ADMINISTRATIVE EXPENSES Administrative expenses as a percent of sales increased to 4.6% from 4.3% last year. The increase is due to higher costs associated with the Away From Home infrastructure and higher compensation costs. OTHER EXPENSES Other expenses increased as compared to last year primarily due to increases in incentive compensation costs. 17 18 OPERATING EARNINGS Segment operating earnings, defined as earnings before interest and taxes, increased 4% versus the prior year. An analysis of operating earnings by segment follows:
(millions) 2000 1999 % CHANGE ---------- ---- ---- -------- Soup and Sauces $ 968 $ 929 4% Biscuits and Confectionery 178 173 3 Away From Home 44 46 (4) ------------------------------------------------------------------------------- Subtotal 1,190 1,148 4 Other - 6 ------------------------------------------------------------------------------- 1,190 1,154 3 Corporate (62) (52) ------------------------------------------------------------------------------- Total $ 1,128 $ 1,102 2%
The increase in earnings from Soup and Sauces is due primarily to lower marketing expenses and improvements in gross margin from cost productivity programs. Several international wet soup businesses including Erasco in Germany, Liebig in France, and Asia/Pacific contributed to the earnings performance. Beverages and U.S. sauces and prepared foods reported improved earnings due to lower marketing. Biscuits and Confectionery reported an increase in earnings driven by the performance of Godiva Chocolatier and Arnotts. Pepperidge Farm reported a decline in earnings. Earnings from Away From Home declined $2 million to $44 million due to increased investment behind growth initiatives and higher costs associated with the new Stockpot manufacturing facility. The decline in Other is due to the sale of Fresh Start Bakeries, Inc. in May 1999. 18 19 NON-OPERATING ITEMS Net interest expense increased to $140 million from $129 million in 1999 due to higher debt levels and interest rates. The effective tax rate was flat at 33.7%. RESTRUCTURING CHARGE A restructuring charge of $41 million ($30 million after tax or $.07 per share) was recorded in the fourth quarter fiscal 1999 to cover the costs of a restructuring and divestiture program approved in July 1999 by the company's Board of Directors. This charge relates to the streamlining of certain North American and European production and administrative facilities and the anticipated cost of a divestiture of a non-strategic business with annual sales of approximately $25 million. The divestiture was completed in April 2000. The restructuring charge includes approximately $20 million in cash charges primarily related to severance and employee benefit costs. The balance of the restructuring charge includes non-cash charges related to the disposition of plant assets and the divestiture. The program will be substantially completed by the end of fiscal 2000. The expected net cash outflows will not have a material impact on the company's liquidity. From this program, the company expects to realize annual pre-tax savings of approximately $21 million. See note (c) of the Notes to Financial Statements for further discussion of the program and the related activity analysis. LIQUIDITY AND CAPITAL RESOURCES The company generated cash from operations of $934 million compared to $745 million last year. This increase is primarily due to higher earnings and improved working capital. Capital expenditures were $120 million, a decrease from $198 million last year. The company continues to aggressively manage its capital outlays and expects total expenditures to approximate $215 million in fiscal 2000. In the first nine months, the company repurchased approximately 10 million shares versus approximately 16 million last year. By repurchasing shares, the company expects to utilize existing cash and debt capacity to lower its cost of capital and increase returns to shareowners. The company's long-term strategy is to repurchase approximately two percent of its outstanding shares annually. 19 20 YEAR 2000 The company recognized the material nature of the business issues related to the computer processing of dates into and beyond the Year 2000 and effected a readiness plan that was divided into three major phases: Business Systems Inventory and Assessment, Remediation and Replacement, and Testing. Management believes the company has completed all of the activities within its control to ensure that the company's systems are Year 2000 compliant. The company has not experienced any disruption or material adverse impacts in its operations, business systems or supply chain as a result of the Year 2000 date transition. The company is not aware that any of its major business partners have experienced significant Year 2000 issues. However, the company has developed contingency plans to mitigate any remaining Year 2000-related risks. RECENT DEVELOPMENTS In June 1998, Statement of Financial Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging Activities," was issued. This standard, effective for fiscal years beginning after June 15, 2000, requires that all derivative instruments be recorded on the balance sheet at fair value. Changes in the fair value of derivatives are recorded in earnings or other comprehensive income, based on whether the instrument is designated as part of a hedge transaction and, if so, the type of hedge transaction. The company is currently assessing the impact of the adoption on the company's financial statements. Based on the company's current portfolio, it is not expected that adoption of this statement will have a material effect on the company's results of operations, financial condition or cash flows. In March 2000, the Emerging Issues Task Force (EITF) released Issue Number 00-07, "Application of EITF Issue No. 96-13, "Accounting for Derivative Financial Instruments Indexed to, and Potentially Settled in, a Company's Own Stock," to Equity Derivative Transactions That Contain Certain Provisions That Require Cash Settlement If Certain Events Outside the Control of the Issuer Occur." The EITF reached a consensus that equity derivative contracts that include any provision that could require net cash settlement can no longer be accounted for as equity. Such contracts are initially recorded at fair value and must be accounted for as an asset or liability with subsequent changes in the fair value of the derivative included in earnings. Similarly the EITF reached a consensus that equity derivative contracts with any provisions that could require physical settlement by a cash payment to the counterparty in exchange for the issuer's shares can no longer be accounted for as permanent equity. Instead, the contracts should be classified as temporary or mezzanine equity. Both of these conclusions do not allow for an evaluation of the likelihood that otherwise unlikely or remote events would trigger cash settlement. 20 21 For contracts that existed before March 16, 2000, the provisions of the consensus are to be applied on December 31, 2000 to those contracts that remain outstanding at that date, based on the contract terms then in place. The company has a forward stock purchase contract outstanding that is accounted for as permanent equity. See note (g) of the Notes to Financial Statements. The company is evaluating the impact of the consensus and possible amendments to contract provisions with the counterparty. Further discussions related to the accounting for such contracts continue by the EITF and other accounting and regulatory bodies. The company expects to adopt the provisions of the consensus in the second quarter fiscal 2001. However, the ultimate resolution and impact of the accounting for the contract will be dependent upon the results of the review of contract provisions with the counterparty, possible future changes in authoritative guidance and fluctuations in the company's share price. FORWARD-LOOKING STATEMENTS This quarterly report contains certain statements which reflect the company's current expectations regarding future results of operations, economic performance, financial condition and achievements of the company. The company has tried, wherever possible, to identify these forward looking statements by using words such as "anticipate," "believe," "estimate," "expect" and similar expressions. These statements reflect the company's current plans and expectations and are based on information currently available to it. They rely on a number of assumptions and estimates which could be inaccurate and which are subject to risks and uncertainties. The company wishes to caution the reader that the following important factors and those important factors described elsewhere in the commentary, or in other Securities and Exchange Commission filings, could affect the company's actual results and could cause such results to vary materially from those expressed in any forward looking statements made by, or on behalf of, the company: - - the impact of strong competitive response to the company's efforts to leverage its brand power with product innovation and new advertising; - - the inherent risks in the marketplace associated with new product introductions, including uncertainties about trade and consumer acceptance; - - the company's ability to achieve sales and earnings forecasts, which are based on assumptions about sales volume and product mix; 21 22 - - the continuation of the company's successful record of integrating acquisitions into its existing operations and the availability of new acquisition and alliance opportunities that build shareowner wealth; - - the company's ability to achieve its cost savings objectives, including the projected outcome of supply chain management programs; - - the difficulty of predicting the pattern of inventory movements by the company's trade customers; and - - the impact of unforeseen economic and political changes in international markets where the company competes such as currency exchange rates, inflation rates, recession, foreign ownership restrictions and other external factors over which the company has no control. This discussion of uncertainties is by no means exhaustive but is designed to highlight important factors that may impact the company's outlook. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK For information regarding the company's exposure to certain market risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk, in the Annual Report on Form 10-K for fiscal 1999. There have been no significant changes in the company's portfolio of financial instruments or market risk exposures which have occurred since year-end. 22 23 PART II ITEM 1. LEGAL PROCEEDINGS In management's opinion, there are no pending claims or litigation, the outcome of which would have a material effect on the consolidated results of operations, financial position or cash flows of the company. As previously reported, ten lawsuits have been commenced against Campbell Soup Company and certain of its officers in the United States District Court for the District of New Jersey, on behalf of persons who allegedly purchased the company's stock between November 18, 1997 and January 8, 1999. Specifically, the actions allege, among other things, that during this period, Campbell and certain of its officers misrepresented the company's financial condition by failing to disclose alleged shipping and revenue recognition practices in connection with the sale of certain company products at the end of the company's fiscal quarters in violation of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The actions seek compensatory and other damages, and costs and expenses associated with the litigation. Campbell believes the complaints are without merit and intends to defend the actions vigorously. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits -------- Exhibit 3 (ii) Campbell's By-laws, effective March 23, 2000. Exhibit 4 There is no instrument with respect to long-term debt of the company that involves indebtedness or securities authorized thereunder exceeding 10 percent of the total assets of the company and its subsidiaries on a consolidated basis. The company agrees to file a copy of any instrument or agreement defining the rights of holders of long-term debt of the company upon request of the Securities and Exchange Commission. Exhibit 10 (i) Agreement between the company and Dale F. Morrison dated April 20, 2000. 10 (j) Agreement between the company and David W. Johnson dated May 23, 2000. 23 24 Exhibit 27 Financial Data Schedule. b. Reports on Form 8-K ------------------- No reports on Form 8-K were filed by the company during the quarter ended April 30, 2000. 24 25 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAMPBELL SOUP COMPANY Date: June 13, 2000 By: /s/ Basil L. Anderson ---------------------------- Basil L. Anderson Executive Vice President and Chief Financial Officer By: /s/ Ellen Oran Kaden ---------------------------- Ellen Oran Kaden Senior Vice President - Law and Government Affairs 25 26 INDEX TO EXHIBITS Exhibit Number - -------------- 3 (ii) Campbell's By-laws, effective March 23, 2000. 10 (i) Agreement between the company and Dale F. Morrison dated April 20, 2000. 10 (j) Agreement between the company and David W. Johnson dated May 23, 2000. 27 Financial Data Schedule. 26 EX-3.(II) 2 0002.txt BY-LAWS EFFECTIVE MARCH 23, 2000 1 Exhibit 3 (ii) CAMPBELL SOUP COMPANY BY-LAWS EFFECTIVE MARCH 23, 2000 2 CAMPBELL SOUP COMPANY BY-LAWS ARTICLE I. Stockholders Section 1. The annual meeting of the stockholders of the Corporation shall be held at the principal office of the Corporation in New Jersey, or at such other place, within or without New Jersey, as may from time to time be designated by the Board of Directors and stated in the notice of the meeting, on the Friday following the third Thursday in November of each year at such time as may be fixed by the Board of Directors, for the purpose of electing directors of the Corporation, and for the transaction of such other business as may properly be brought before the meeting Section 2. Special meetings of the stockholders shall be held at the principal office of the Corporation in New Jersey, or at such other place, within or without New Jersey, as may from time to time be designated by the Board of Directors and stated in the notice of the meeting, upon the call of the Chairman of the Board or of the President, or upon the call of a majority of the members of the Board of Directors, and shall be called upon the written request of stockholders of record holding a majority of the capital stock of the Corporation issued and outstanding and entitled to vote at such meeting. Section 3. Notice of the time and place of every meeting of stockholders shall be delivered personally or mailed at least ten but not more than sixty calendar days before the meeting to each stockholder of record entitled to vote at the meeting. Section 4. The holders of record of a majority of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote, present in person or represented by proxy, shall constitute a quorum at all meetings of the stockholders. If there be no such quorum present, the holders of a majority of such shares so present or represented may adjourn the meeting from time to time, without notice other than announcement at the meeting, until such quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened, had there been a quorum. Once a quorum is established, the stockholders present in person or by proxy may continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. Section 5. The Board of Directors shall in advance of each meeting of stockholders appoint one or more inspectors of election, to act unless the performance of the inspector's 2 3 function shall be unanimously waived by the stockholders present in person or represented by proxy at such meeting. Each inspector, before entering upon the discharge of his duties, shall first take and subscribe an oath or affirmation to execute the duties of inspector as prescribed by law at such meeting with strict impartiality and according to the best of his ability. The inspector or inspectors shall take charge of the polls and shall make a certificate of the results of the vote taken. No director or candidate for the office of director shall be appointed as such inspector. Section 6. All meetings of the stockholders shall be presided over by the Chairman of the Board, or if he shall not be present, by the Vice Chairman of the Board. If neither the Chairman of the Board nor the Vice Chairman of the Board shall be present, such meeting shall be presided over by the President. If none of the Chairman of the Board, the Vice Chairman of the Board and the President shall be present, such meeting shall be presided over by a Vice President, or if none shall be present, then by a Chairman to be elected by the holders of a majority of the shares present or represented at the meeting. The Secretary of the Corporation, or if he is not present, an Assistant Secretary of the Corporation, if present, shall act as secretary of the meeting. If neither the Secretary nor an Assistant Secretary is present, then the Chairman shall appoint a Secretary of the meeting. Section 7. The Board of Directors shall fix in advance a date, not exceeding sixty nor less than ten calendar days preceding the date of any meeting of the stockholders or the date for the payment of any dividend, or the date for the allotment of rights, or the date when any change or conversion or exchange of stock shall go into effect, as a record date for the determination of the stockholders entitled to notice of and to vote at any such meeting, or entitled to receive payment of any such dividend, or any such allotment of rights, or to exercise the rights in respect of any such change, conversion or exchange of stock, and in such case only stockholders of record on the date so fixed shall be entitled to such notice of and to vote at such meeting, or to receive payment of such dividend, or allotment of rights, or exercise such rights, as the case may be, notwithstanding any transfer of any stock on the books of the Corporation after any such record date fixed as aforesaid. ARTICLE II. Directors Section 1. The business and property of the Corporation shall be managed and controlled by a board of sixteen directors. This number may be changed from time to time by amendment of these By-Laws, but the term of office of no director shall be shortened after his or her election by reduction in the number of directors. Upon election each director shall be the holder of at least two hundred shares of the Corporation's capital stock. Within one year of election, each director shall be the holder of at least two thousand shares of capital stock and within three years of election shall be the holder of at least six thousand shares of capital stock. In the event the number of shares of 3 4 capital stock is increased at any time after February 11, 1997, by a stock split, stock dividend, or by any other extraordinary distribution of shares, the above share ownership requirements shall be proportionately adjusted. The director, upon ceasing to hold the required number of shares, shall cease to be a director. The directors shall hold office until the next annual meeting of the stockholders and until their successors are elected and shall have qualified. Section 2. Regular meetings of the Board of Directors shall be held at such times and at such places as may from time to time be fixed by resolution of the Board of Directors. Special meetings of the Board of Directors may be held at any time upon call of the Chairman of the Board or of the Vice Chairman of the Board or of the President or of three directors. Oral, telegraphic or written notice of the time and place of a special meeting shall be duly served on, or given or sent or mailed to, each director not less than two calendar days before the meeting. An organizational meeting of the Board of Directors shall be held, of which no notice shall be necessary, as soon as convenient after the annual meeting of the stockholders. Notice need not be given of regular meetings of the Board of Directors held at the times fixed by resolution of the Board of Directors. Meetings may be held at any time without notice if all of the directors are present or if those not present waive notice of the meeting in writing. Section 3. Six members of the Board of Directors shall constitute a quorum for the transaction of business. If at any meeting of the Board of Directors there shall be less than a quorum present, a majority of the directors present may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum shall have been obtained, when any business may be transacted which might have been transacted at the meeting as first convened, had there been a quorum. Section 4. Any vacancy occurring among the directors may be filled by the affirmative vote of a majority of the remaining members of the Board of Directors at the time in office; provided that in case of an increase in the number of directors pursuant to an amendment to these By-Laws made by the stockholders, the stockholders may fill the vacancy or vacancies so created at the meeting at which such amendment is effected or may authorize the Board of Directors to fill such vacancy or vacancies. Section 5. The Board of Directors, by an affirmative vote of a majority of the members of the Board of Directors at the time in office, may appoint an Executive Committee to consist of such directors as the Board of Directors may from time to time determine. The Executive Committee shall have and may exercise, when the Board of Directors is not in session, all of the powers vested in the Board of Directors, except as otherwise provided by law. The Board of Directors shall have the power at any time to fill vacancies in, to change the membership of, or to dissolve, the Executive Committee. The Executive Committee may make rules for the conduct of its business and may appoint such committees and assistants as it shall from time to time deem necessary, unless the Board of Directors shall otherwise provide. A majority of the members of the Executive Committee at the time in office shall constitute a quorum for the transaction of business. A record shall be kept of all proceedings 4 5 of the Executive Committee which shall be submitted to the Board of Directors at or before the next succeeding meeting of the Board of Directors. Section 6. The Board of Directors may appoint one or more other committees, to consist of such number of the directors and to have such powers as the Board of Directors may from time to time determine. The Board of Directors shall have power at any time to fill vacancies in, to change the membership of, or to dissolve, any such committee. A majority of any such committee may determine its action and fix the time and place of its meetings, unless the Board of Directors shall otherwise provide. Section 7. In addition to reimbursement of reasonable expenses incurred in attending meetings or otherwise in connection with his or her attention to the affairs of the Corporation, each director as such, as Chairman or Vice Chairman of the Board and as a member of the Executive Committee or of any other committee of the Board of Directors, shall be entitled to receive such remuneration as may be fixed from time to time by the Board of Directors, in the form either of fees for attendance at meetings of the Board of Directors and committees thereof or annual retainers, or both; but no director who receives a salary or other remuneration as an employee of the Corporation or any subsidiary thereof shall receive any additional remuneration as a director or member of any committee of the Board of Directors. ARTICLE III. Officers Section 1. The Board of Directors, at its organizational meeting or as soon as may be after the election of directors held in each year, shall elect one of its number Chairman of the Board and one of its number President, and shall also elect a Secretary and a Treasurer, and from time to time may elect or appoint one of its number Vice Chairman of the Board, one or more Vice Presidents, a Controller, and such Assistant Secretaries, Assistant Treasurers and other officers, agents and employees as it may deem proper. More than one office may be held by the same person. Section 2. The term of office of all officers shall be until the next organizational meeting of the Board of Directors or until their respective successors are elected and have qualified, but any officer may be removed from office at any time by the affirmative vote of a majority of the members of the Board of Directors at the time in office. Any other employee of the Corporation, whether appointed by the Board of Directors or otherwise, may be removed at any time by the Board of Directors or by any committee or officer or employee upon whom such power of removal may be conferred by the By-Laws or by the Board of Directors. The Board of Directors shall have power to fill for the unexpired term any vacancy which shall occur in any office by reason of death, resignation, removal or otherwise. 5 6 Section 3. The Chairman of the Board shall preside at all meetings of the stockholders and of the Board of Directors and shall perform such other duties as shall from time to time be prescribed by the Board of Directors. The Vice Chairman of the Board shall in the absence of the Chairman of the Board preside at all meetings of the stockholders and of the Board of Directors and shall perform such other duties as shall from time to time be prescribed by the Board of Directors or the Chairman of the Board. The President shall be the Chief Executive Officer of the Corporation and shall perform such duties as are usually performed by that officer; he shall, in the absence of the Chairman and Vice Chairman of the Board, preside at all meetings of the stockholders and of the Board of Directors; and shall perform such other duties as shall from time to time be prescribed by the Board of Directors. The other officers of the Corporation shall have such powers and shall perform such duties as generally pertain to their offices respectively, as well as such powers and duties as shall from time to time be conferred by the Board of Directors. Article IV. Indemnification of Directors and Others Section 1. The Corporation shall indemnify to the full extent from time to time permitted by law any present, former or future director, officer, or employee ("Corporate Agent") made, or threatened to be made, a party to, or a witness or other participant in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative, arbitrative, legislative, investigative, or of any other kind, including by or in the right of the Corporation ("Proceeding"), by reason of the fact that such person is or was a Corporate Agent of the Corporation or any subsidiary of the Corporation or, while serving as a Corporate Agent of the Corporation or any subsidiary of the Corporation, serves or served another enterprise (including, without limitation, any sole proprietorship, association, corporation, partnership, joint venture or trust), whether or not for profit, at the request of the Corporation as a director, officer, employee or agent thereof (including service with respect to any employee benefit plan of the Corporation or any subsidiary of the Corporation), against expenses (including attorneys' fees), judgments, fines, penalties, excise taxes and amounts paid in settlement, actually and reasonably incurred by such person in connection with such Proceeding or any appeal therein. No indemnification pursuant to this Article IV shall be required with respect to any settlement or other nonadjudicated disposition of any threatened or pending Proceeding unless the Corporation has given its prior consent to such settlement or other disposition. Section 2. Expenses incurred in connection with a Proceeding shall be paid by the Corporation for any Corporate Agent of the Corporation in advance of the final disposition of such Proceeding promptly upon receipt of an undertaking by or on behalf of such person 6 7 to repay such amount unless it shall ultimately be determined that such person is entitled to be indemnified by the Corporation. Such an undertaking shall not, however, be required of a nonparty witness. Section 3. The foregoing indemnification and advancement of expenses shall not be deemed exclusive of any other rights to which any person indemnified may be entitled. Section 4. The rights provided to any person by this Article IV shall be enforceable against the Corporation by such person, who shall be presumed to have relied upon it in serving or continuing to serve as a Corporate Agent. No elimination of or amendment to this Article IV shall deprive any person of rights hereunder arising out of alleged or actual occurrences, acts or failures to act occurring prior to such elimination or amendment. The rights provided to any person by this Article IV shall inure to the benefit of such person's legal representative and shall be applicable to Proceedings commenced or continuing after the adoption of this Article IV, whether arising from acts or omissions occurring before or after such adoption. Section 5. The Corporation's Board of Directors may from time to time delegate (i) to a Committee of the Board of Directors of the Corporation or to independent legal counsel the authority to determine whether a Director or officer of the Corporation, and (ii) to one or more officers of the Corporation the authority to determine whether an employee of the Corporation or any subsidiary, other than a Director or officer of the Corporation, is entitled to indemnification or advancement of expenses pursuant to, and in accordance with, applicable law and this Article IV, subject to such conditions and limitations as the Board of Directors may prescribe. ARTICLE V. Fiscal Year The fiscal year shall begin in each calendar year on the Monday following the Sunday which is nearest to July 31, and shall end on the Sunday which is nearest to July 31 of the following year. ARTICLE VI. Corporate Seal 7 8 The Board of Directors shall provide a suitable seal, bearing the name of the Corporation, which seal shall be in the charge of the Secretary; provided that the use of a facsimile of such seal is hereby authorized. ARTICLE VII. Amendment The Board of Directors shall have the power to make, amend and repeal the By-Laws of the Corporation by a vote of a majority of the members of the Board of Directors at the time in office at any regular or special meeting of the Board of Directors. The stockholders, by a majority of the votes cast at a meeting of the stockholders, may adopt, alter, amend or repeal the By-Laws, whether made by the Board of Directors or otherwise. 8 EX-10.(I) 3 0003.txt SEVERANCE AGREEMENT AND GENERAL RELEASE 1 Exhibit 10 (i) SEVERANCE AGREEMENT AND GENERAL RELEASE This Severance Agreement and General Release ("Agreement"), between Dale F. Morrison ("Employee") and Campbell Soup Company ("Company"), is made with respect to the following facts: A. Company and Employee have mutually agreed that his employment relationship with the Company will terminate effective August 1, 2000 ("Termination Date"). In consideration of Employee's agreement to resign his positions with the Company and the Board of Directors of the Company and other valuable consideration as set forth herein, Company will, upon the termination of Employee's employment, provide Employee with the severance pay and benefits set forth below. B. In exchange for the promises, payments and benefits described in this Agreement, the parties execute this Agreement in favor of and for the benefit of the other as follows: 1. Severance. a. 86 Week Period. (i) Company agrees to continue to pay Employee's current base salary (less required payroll deductions and other withholdings) at such times Employee would have received salary payments had Employee continued to be employed by Company ("Periodic Payments"), for a period of eighty-six (86) weeks ("86 Week Period"). The Periodic Payments will commence on September 1, 2000, after the Termination Date and following the payment of 2 Employee's four (4) weeks of vacation time, provided that Employee does not accept employment or a consulting assignment, directly or indirectly, with or for a Competitor of the Company, as that term is defined in this paragraph. If Employee accepts employment or a consulting assignment with or for a Competitor, directly or indirectly, or otherwise engages in competition with the Company, in any manner, prior to or during the 86 Week Period, all payments and benefits otherwise provided for under the terms of this Agreement to the extent yet unpaid will cease and Company shall be entitled to exercise all rights and remedies available to Company under this Agreement, under the Non-Competition Agreement identified in paragraph 7, and otherwise available to Company at law or in equity. For the purpose of this Agreement, a Competitor of the Company is defined to mean any person, business, firm, corporation or other enterprise engaged in, or about to become engaged in, the production, marketing or selling of any product or service which resembles or competes with a product or service produced, marketed or sold by the Company (or to Employee's knowledge was under development by the Company), or any of the Company's corporate affiliates or subsidiaries. (ii) Prior to and during the 86 Week Period, Employee's coverage will be continued under the Company's group life and group medical insurance plans (provided Employee makes required contributions); all other benefits coverage shall cease. If Employee obtains employment at any time prior to or during the 86 Week Period, Company benefits coverage will cease at the time that Employee becomes eligible for benefits coverage from the new employer. Prior to and during the 86 Week Period, Employee agrees to notify Company's Vice President-Human Resources in writing within ten (10) business days of commencing alternative employment and to set forth in such notice (i) the full name of the Employee's new employer; (ii) Employee's title and a description of the areas of responsibility in his position with 2 3 the new employer; and (iii) Employee's commencement date and the date when Employee will become eligible for benefits coverage from his new employer. b. The amount of Periodic Payments paid to Employee will count toward accrual of benefits and vesting under Campbell Soup Company's Retirement and Pension Plan for Salaried Employees and vesting under Campbell Soup Company's Savings and 401(k) Plan for Salaried Employees. c. Company agrees that, in the event of Employee's death, all remaining severance pay due under this Agreement for the 86 Week Period will be paid to Employee's estate in a cash lump sum payment. 2. Release by Employee. a. Employee hereby forever releases Company and its officers, directors, shareholders, agents, employees, affiliates, subsidiaries, parent company, predecessors, successors and assigns ("Releasees"), from any and all complaints, charges, claims, liabilities, demands, debts, accounts, obligations, promises, suits, actions, causes of action, demands in law or equity, including claims for damages, attorney fees or costs, whether known or unknown, which Employee now has, or claims to have, or which Employee at any time may have had, or claimed to have had, or which Employee at any time hereafter may have, or claim to have, arising at any time in the past up to and including the date of this Agreement, including, but without limiting the generality of the foregoing, any matters relating in any way to Employee's employment relationship or the termination of that employment relationship with the Company, with the exception of any rights or claims arising out of this Agreement. b. The claims, rights and obligations that Employee is releasing herein include, but are not limited to: (i) those for wrongful discharge, breach of contract, breach 3 4 of implied contract, breach of implied covenant of good faith and fair dealing, and any other common law or statutory claims now or hereafter recognized; and (ii) those for discrimination (including but not limited to claims for discrimination, harassment or retaliation on account of sex, age, handicap, medical condition or disability, national origin, race, color, religion, sexual orientation, or veteran status) which Employee might have or might have had under the Federal Age Discrimination in Employment Act, Title VII of the Civil Rights Act, the New Jersey Law Against Discrimination, the New Jersey Conscientious Employee Protection Act and any other federal, state or local laws prohibiting discrimination, harassment or retaliation in employment. BY SIGNING THIS AGREEMENT, EMPLOYEE AGREES TO GIVE UP, OR WAIVE, ANY RIGHTS OR CLAIMS WHICH HE MAY HAVE HAD UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, 29 U.S.C. SECTION 621 ET. SEQ., OR ANY OTHER STATUTES OR OTHER LAWS, WHICH ARE BASED ON ACTIONS OF CAMPBELL SOUP COMPANY, OR ITS EMPLOYEES OR AGENTS, WHICH OCCURRED UP THROUGH THE DATE THAT EMPLOYEE SIGNS THIS AGREEMENT. c. Employee further acknowledges and agrees that this Agreement shall operate as a complete bar to recovery in any and all litigation, charges, complaints, grievances or demands of any kind whatsoever now pending or now contemplated by Employee, or which might at any time be filed by Employee, including, but without limiting the generality of the foregoing, any and all matters arising out of or in any manner whatsoever connected with the matters set forth in paragraph 2.a. above. Each and all of the said claims are hereby fully and finally settled, compromised and released. 4 5 d. Employee further acknowledges and agrees that neither Employee, nor any person, organization, or other entity on Employee's behalf, will file, claim, sue or cause or permit to be filed or claimed, or join in any claims or any actions, as an individual or as a class member, for legal or equitable relief (including damages and injunctive, declaratory, monetary or other relief), involving any matter or related in any way to Employee's employment relationship or the termination of Employee's employment relationship with the Company, or involving any continuing effects of any acts or practices that may have arisen or occurred during Employee's employment relationship with the Company. e. Nothing in this paragraph 2 is intended to operate as a release, waiver, or forfeiture of Employee's rights, and Company's obligations, under (i) any of the Company's employee benefit plans in which the Employee has been a participant, including, but not limited to, Campbell Soup Company's Retirement and Pension Plan for Salaried Employees, and Campbell Soup Company's Savings and 401(k) Plan for Salaried Employees, (ii) any health and welfare benefits to which Employee may in the future be entitled under "COBRA" or comparable federal or state law or regulation, (iii) any state workers' compensation act or statute, (iv) rights to indemnification under the Charter, By-Laws or otherwise, or (v) this Agreement and the Addendum thereto. f. Subject to the terms of paragraph B of this Agreement, upon the termination of Employee's employment with the Company, Employee's rights under the applicable employee benefit plans of the Company will be determined in accordance with the terms of those plans. 5 6 3. Release by Company. Company hereby forever releases Employee from any and all complaints, charges, claims, liabilities, demands, debts, accounts, obligations, promises, suits, actions, causes of action, demands in law or equity, including claims for damages, attorney fees or costs, whether known or unknown, which Company now has, or claims to have, or which Company at any time may have had, or claimed to have had, or which Company at any tine hereafter may have, or claim to have, arising at any time in the past up to and including the date of this Agreement, except for claims or obligations based on or arising out of (i) this Severance Agreement and General Release; (ii) the Non-Competition Agreement identified in paragraph 7; (iii) Employee's fiduciary obligations as member of the Board of Directors of Campbell Soup Company; (iv) breach of duty of loyalty to the Company or its shareholders during Employee's employment relationship with the Company; or (v) acts or omissions not in good faith or involving a knowing violation of law during Employee's employment relationship with the Company. 4. Indemnification. Company is obligated to indemnify Employee in accordance with Article IV of the Company's By-Laws. Company agrees to advance expenses at the request of the Employee in accordance with Article IV, Section 2 of the By-Laws upon Employee's execution of an undertaking in the form annexed to this Agreement as Exhibit A. 5. Cooperation. Employee agrees to fully cooperate, in a timely and good faith manner, with all reasonable requests for assistance made by the Company, relating, directly or indirectly, to any and all matters which occurred during the course of Employee's Company employment, or with which Employee was involved prior to the termination of his employment, or with which Employee became aware during the course of his employment. Employee agrees that, should he be contacted by any third party regarding such matters, he will politely refuse to 6 7 engage in any substantive communication, discontinue such contact as soon as practicable, immediately advise the Company's Chief Legal Officer of that contact and await instructions. Employee agrees not to initiate any contact with third parties regarding the foregoing matters, unless specifically requested to do so by the Company. Upon the submission of proper documentation, Company will reimburse Employee for all reasonable expenses incurred by him as a result of such requests for assistance. 6. Inquiries. a. In the event that inquiries are made by prospective employers concerning Employee's employment with the Company, the Company will use its best efforts to refer those inquiries to the Company's Vice President-Human Resources. b. Employee will not take any action, or make any statement, whether orally or in writing, which, in any manner, disparages or impugns the reputation or goodwill of the Company, its directors or officers, or other Releasees. c. The Company will not take any action, or make any statement, whether orally or in writing, which, in any manner, disparages or impugns the reputation of Employee. 7. Confidentiality of Proprietary Information. Employee acknowledges and agrees that in the course of his employment with the Company, Employee acquired confidential or proprietary information relating to the business of the Company and/or its subsidiaries or affiliates. Employee expressly agrees that he will keep secret and safeguard all such information, and will not, at any time, in any form or manner, directly or indirectly, divulge, disclose or communicate to any person, firm, corporation, or other entity any such information without advance written authority of the Company. This Agreement incorporates by reference all of the 7 8 provisions of the Nonqualified Stock Option and Non-Competition Agreement between the Company and Employee executed as of June 26, 1997 ("Non-Competition Agreement"). Employee agrees that Employee's obligations relating to Non-Competition, No Business Diversion and No Employee Solicitation under the provisions of the Non-Competition Agreement shall remain in effect through April 26, 2002. The parties hereby stipulate that, as between them, the matters addressed in this paragraph and in the Non-Competition Agreement are material and gravely affect the effective and successful conduct of the business of the Company, and its goodwill, and that notwithstanding anything to the contrary set forth herein, the Company is entitled to an injunction by any competent court to enjoin and restrain the unauthorized disclosure of such confidential information or the breach or threatened breach of the Non-Competition Agreement at any time up to and including April 26, 2002. 8 9 8. Return of Company Property. a. Employee agrees that he has returned or will immediately return to the Company any office, desk and file keys, Company identification pass cards, Company-provided credit cards issued to Employee, and any other Company property in the possession of Employee or his agents. Employee acknowledges and represents that, as of the Effective Date of this Agreement, Employee has surrendered and delivered to the Company all files, papers, data, documents, lists, charts, photographs, computer records, discs or any other records, relating in any manner to the business activities of the Company or its subsidiaries or affiliates, which were created, produced, reproduced or utilized by the Company, or any of the Releases, or by Employee during the term of Employee's employment relationship with the Company. b. Employee also agrees to repay any monies owed to the Company, including loans, advances, charges or debts incurred by Employee, or any other amounts owed to the Company, on or before the Effective Date of the Agreement. 9. Effect of Agreement. Employee acknowledges and agrees that this Agreement is not and shall not be construed as an admission of any violation of any federal, state, or local statute, ordinance or regulation, or of any duty or obligation the Company owes or owed to Employee, and that Employee's execution of this Agreement is a voluntary act to provide an amicable conclusion to Employee's employment relationship with the Company. 10. Competency of Employee. Employee acknowledges, warrants, represents and agrees that in executing and delivering this Agreement, he does so freely, knowingly and voluntarily and that he is fully aware of the contents and effect thereof and that such execution and delivery is not the result of any fraud, duress, mistake or undue influence whatsoever. 9 10 11. Savings Clause. It is acknowledged and agreed by the parties that should any provision of this Agreement be declared or be determined to be illegal or invalid by final determination of any court of competent jurisdiction, the validity of the remaining parts, terms or provisions of this Agreement shall not be affected thereby, and the illegal or invalid part, term or provision shall be deemed not to be a part of this Agreement. 12. Enforcement. The parties expressly agree that this Agreement constitutes a binding contract. If Employee breaches any term of this Agreement, or violates any of his obligations under this Agreement or the Non-Competition Agreement, the Company may, at its option, terminate or suspend all payments or benefits remaining to be paid by the Company under this Agreement. In addition, the Company may seek all other remedies and relief allowed by law. 13. Addendum. The Addendum attached to this Agreement, and signed by the parties, is incorporated within and made a part of this Agreement. 14. Effective Date. It is acknowledged and agreed by the parties that Employee has had twenty-one (21) days to consider this Agreement before signing it. Further, Employee has the right to revoke this Agreement within eight (8) days after signing and returning this Agreement to the Company. This Agreement will not become effective or enforceable, and employee will not receive any of the severance pay and benefits described in this Agreement, until the eight (8) day revocation period has run, and Employee notifies the Company, in writing, that he has elected not to revoke this Agreement (the "Effective Date"). 15. Employee Rights. Employee acknowledges, represents and agrees to the following: 10 11 a. HE HAS BEEN ADVISED, IN WRITING, TO READ THIS ENTIRE AGREEMENT CAREFULLY, AND TO CONSULT WITH AN ATTORNEY OF HIS CHOICE PRIOR TO SIGNING THIS AGREEMENT; b. He was given at least twenty-one (21) days to consider this Agreement before signing it; c. He was advised, in writing, that he had a full eight (8) days after he signed this Agreement to revoke it, and that this Agreement would not become effective until that eight (8) day revocation period had run and he had notified Company, in writing, that he has elected not to revoke this Agreement; d. He carefully read this Agreement prior to signing it, and he fully understands this Agreement; e. He understands and agrees that he will receive severance pay and benefits in exchange for signing this Agreement, and that he would not have received severance pay and benefits if he had not signed this Agreement; f. EMPLOYEE UNDERSTANDS THAT, BY SIGNING THIS AGREEMENT, HE WILL LOSE HIS RIGHT TO SUE CAMPBELL SOUP COMPANY, OR ANY OF ITS EMPLOYEES OR AGENTS, FOR ANY VIOLATION OF THE AGE DISCRIMINATION IN EMPLOYMENT ACT (THE FEDERAL LAW WHICH PROHIBITS DISCRIMINATION ON THE BASIS OF AGE), OR ANY OTHER STATUTE OR OTHER LAW; and g. He has signed this Agreement voluntarily. 16. Entirety of Agreement; Modifications. Employee acknowledges and agrees that this Agreement, and the attached Addendum, contain the entire agreement and understanding concerning the subject matter between Employee and the Company, and that they 11 12 supersede and replace all prior agreements concerning the subject matter of this Agreement, whether written or oral, except for the Non-Competition Agreement referred to in paragraph 7 of this Agreement, which is incorporated by reference. Employee also represents that he has not executed this instrument in reliance on any promise, representation or statement not contained herein. This Agreement may not be modified except by a writing signed by Employee and an authorized representative of the Company. 17. Governing Law. The parties agree that this Agreement shall be governed and construed in accordance with the laws of the State of New Jersey without giving effect to the conflict of law principles. The parties further irrevocably agree that any disputes or issues arising from or related to this Agreement shall be brought only in the federal or state court in Camden, New Jersey, and both parties irrevocably agree to personal jurisdiction and venue in such New Jersey courts. 18. Company's Counsel Fees. Employee agrees that if the Company prevails in any suit or proceeding under this Agreement, Employee will pay Company all of Company's attorneys' fees, costs and expenses incurred in connection with such suit or proceedings or the enforcement of the Company's rights under this Agreement. 19. Employee's Counsel Fees. Company agrees to pay Employee's reasonable attorneys' fees incurred in connection with the negotiation and preparation of this Severance Agreement and General Release. 20. Successors and Assigns. This Agreement shall bind Company and its officers, directors, agents, employees, shareholders, affiliates, predecessor and parent, and its successors and assigns, and shall bind Employee, and his family members, heirs, administrators, representatives, successors, assigns, and agents, and also all other persons, firms, corporations, 12 13 associations, partnerships and entities in privity with or related to or affiliated with any such person, firm, corporation, association, partnership or entity. Employee Company /s/ Dale F. Morrison By : /s/ Philip E. Lippincott - --------------------------------------- ------------------------------ Date: April 20, 2000 Title: Chairman of the Board Date: April 20, 2000 13 14 Exhibit A UNDERTAKING TO CAMPBELL SOUP COMPANY AGREEMENT BY EMPLOYEE In consideration of Campbell Soup Company (Company) paying, in advance, my litigation expenses in connection with the ____________ case, including appeals, I hereby promise to repay all of those litigation expenses to the Company in the event the Company determines that my actions in regard to this case did not satisfy the conditions for such payment, or advance payment, of litigation expenses, as set forth in the Company By-Laws. I understand that the Company's determination regarding my entitlement to litigation expenses can be made at any time and is at the Company's sole discretion, and that by paying or advancing my litigation expenses the Company does not waive its rights to make such a determination at any time thereafter. ----------------------------------- Employee Date: ------------------------------ Witness: - ------------------------------- Date: -------------------------- 15 ADDENDUM SEVERANCE AGREEMENT AND GENERAL RELEASE BETWEEN CAMPBELL SOUP COMPANY AND DALE F. MORRISON 1. In lieu of any bonus payment that Employee may earn for fiscal 2000 under the Campbell Soup Company's Management Worldwide Incentive Plan ("WIN Plan"), the Company agrees to pay Employee $687,500 on May 1, 2000. Employee will not be eligible for any additional WIN Plan payment for fiscal 2000. Employee will not be eligible for any WIN PLUS award in fiscal 2000. 2. Employee will not be eligible for WIN Plan participation for fiscal 2001, or any year thereafter. 3. Employee was granted 62,577 Restricted Performance Shares ("RPS"s) under Campbell Soup Company's 1994 Long-Term Incentive Plan ("1994 LTIP"), for the period of fiscal years 1998 through 2000. After the Termination Date and for the remainder of the RPS performance period, the Employee will receive dividends on the amount of 62,577 RPS's. Employee will be entitled, subsequent to July 31, 2000, to the delivery of such number of the 62,577 RPS's as are earned pursuant to the applicable performance criteria, as determined in accordance with provisions of the 1994 LTIP. Based upon current performance projections, which projections may change, Employee will be eligible to receive a payout of twenty percent (20%) of the RPS's, 16 or 12,575 shares subsequent to July 31, 2000. In the event of any conflict between this Addendum and the 1994 LTIP, the 1994 LTIP will govern. 4. Employee was granted 140,000 Restricted Performance Shares ("RPS") under the Campbell Soup Company's 1994 Long Term Incentive Plan (1994 LTIP), for the period of fiscal years 2000 through 2002. At the Termination Date, the Employee's RPS will be immediately reduced by proration for that portion of the three year performance period during which the Employee will not be a Company employee ("Reduced Number of RPS"). After the Termination Date and through August 1, 2001, the Employee will receive dividends on the amount of 46,667 shares representing the Reduced Number of RPS. Employee will be entitled to delivery of the 46,667 shares on August 1, 2001, provided Employee does not violate the terms of this Severance Agreement and General Release in any material respect. 5. Company agrees that all Employee's outstanding stock options shall immediately vest on August 1, 2000. For purposes of the option program only, Employee's termination date of employment will be deemed to be April 26, 2002. Company will permit Employee to exercise, in accordance with the relevant plan and related agreements, any previously-granted unexercised stock options on or before April 26, 2005, provided Employee does not violate the terms of this Severance Agreement and General Release in any material respect. In the event of Employee's death, the special rules set forth in the relevant plan shall govern. 6. Employee will not be eligible for any additional awards under the 1994 Long-Term Incentive Plan. 7. All fully vested investments account balances held for the account of Employee in Campbell Soup Company's Deferred Compensation Plan ("DCP") will be distributed in accordance with Employee's applicable Distribution Election form. Applicable federal, state and 2 17 local taxes will be withheld from the payment of any installment amounts from Employee's deferral account. 8. Employee will vest in and be eligible for pension benefits pursuant to the Supplemental Retirement Benefit Agreement between the Company and Employee dated as of June 30, 1995. 9. Employee will be entitled to full year benefits under the Company's Personal Choice Program through July 31, 2000. 10. The Company shall arrange for Employee to have the use of reasonable office space and secretarial support services ("Support Services") at the Company's expense during the period that Employee is entitled to receive Periodic Payments under this Agreement. Support Services to Employee shall cease on the date that (i) Employee is no longer entitled to receive Periodic Payments under this Agreement, (ii) Employee receives the Employee's last Periodic Payment, or (iii) Employee secures alternative employment, whichever is earlier. Employee Company /s/ Dale F. Morrison By: /s/ Philip E. Lippincott - ------------------------------------ ------------------------------------- Date: April 20, 2000 Title: Chairman of the Board Date: April 20, 2000 3 EX-10.(J) 4 0004.txt LETTER TO DAVID W. JOHNSON 1 Exhibit 10 (j) [COMPANY LETTERHEAD] May 23, 2000 Mr. David W. Johnson Campbell Soup Company Campbell Place Camden, NJ 08103 This will confirm our agreement with you respecting your employment as the President and Chief Executive Officer of Campbell Soup Company ("Campbell"). 1. Employment and Duties. You commenced employment on March 23, 2000, in accordance with the term sheet we agreed upon. The initial term of your employment will be one year from March 23, 2000, which term may be shortened at any time at the sole discretion of the Board of Directors (the "Board"). You will serve as the President and Chief Executive Officer of Campbell and will perform the customary duties of such position subject to the direction of the Board. You will devote your full time, skills and energy to the affairs of Campbell. 2. Base Salary and Benefits. In lieu of any salary for the first six months of your employment you will receive a six-month time-lapse restricted stock grant of 16,842 Campbell shares which will be delivered to you on September 22, 2000 as detailed in Section 3. After the first six-months of your employment you will be paid monthly cash payments of $83,334.00. You will be eligible for regular medical, dental, life insurance and other employee welfare benefit plans of Campbell. You will not be eligible to participate in the Campbell Soup Company Retirement and Pension Plan for Salaried Employees and any supplemental pension plans (Pension Plans). You will also not be eligible to participate in the Campbell Soup Company Savings and 401(k) Plan for Salaried Employees and any supplemental savings plan (Savings Plans). You hereby waive your right to participate in the Pension Plans and the Savings Plans during your period of employment covered by this Agreement. You will also not be eligible to receive any benefits under Campbell's Personal Choice Program. 3. Restricted Stock. (a) Award of Restricted Stock. This confirms the award to you on March 22, 2000 ("Grant Date") by the Board of 16,842 shares of Restricted Stock. The Restricted Stock is in all 1 2 respects limited and conditioned as hereinafter provided, and is subject in all respects to the terms and conditions of the Campbell Soup Company 1994 Long-Term Incentive Plan, as amended (1994 Plan). (b) Restricted Stock Notation. A book-entry notation maintained by Campbell's stock transfer agent representing the Restricted Stock shall be made in your name. Campbell retains the right to cancel the book-entry notation until you become entitled to the Restricted Stock at the end of the Restriction Period or earlier in accordance with Section 3.(c). During the Restriction Period you are entitled to vote the shares of Restricted Stock (unless and until forfeited) represented by the book-entry notation and to receive any dividends paid on the Restricted Stock. (c) Restriction Period. The "Restriction Period" shall begin on the Grant Date and shall end on September 22, 2000, with you being entitled to the elimination of the restrictions on the Restricted Stock in the book-entry notation system. If you voluntarily resign during the Restriction Period, the Restricted Stock shall be paid out immediately on a prorated basis based on the portion of the Restricted Period that has elapsed to the date of your resignation. In the event of your death, disability, or termination of employment by the Board or in the event of a Change in Control of the Company, as defined in the 1994 Plan, the Restricted Stock shall 100% vest and be paid out immediately. (d) Withholding of Taxes. The obligation of the Company to deliver Restricted Stock at the end of the Period shall be subject to applicable federal, state and local tax withholding requirements. You may satisfy tax-withholding requirements by electing in writing to have the Company withhold a portion of the shares to be delivered. The value of the shares to be withheld shall be the mean between the reported high and low prices on the NYSE composite tape on the tax date (September 22, 2000). 4. Incentive Compensation Programs. You will not be eligible for participation in the Campbell Soup Company Worldwide Management Incentive Plan (WIN Plan) or the Long-Term Performance Program (LTPP) or any other executive incentive compensation programs of Campbell. 5. Discretionary Bonus. You will be eligible for a bonus ranging from $0 to $1,000,000 with a target amount of $625,000 for the initial six-month period of your employment beginning on March 23, 2000. This bonus will be determined at the discretion of the Board. It will be based upon specific factors to be mutually agreed upon with appropriate benchmarks. In the event of death, disability or termination of employment by the Board any earned discretionary bonus as determined by the Board would be paid on a prorated basis. In the event of a Change in Control, as defined in the WIN Plan, the target bonus amount of $625,000 would be paid on a prorated basis. If you voluntarily resign, without the consent of the Board, during the initial six-month period, you forfeit any right to any earned discretionary bonus. If your employment continues beyond the initial six-month period, a discretionary bonus arrangement will be developed for such period. 6. Pension. The current annual pension that you receive from Campbell will continue to be paid; however, as set forth in paragraph 2 no additional pension benefit will accrue as a result of 2 3 your employment pursuant to this Agreement. 7. Termination. The Board may terminate your employment hereunder with or without cause at any time and you may terminate your employment hereunder at any time. 8. Automobile. Campbell will lease or purchase a top-of-the-line automobile for your use. 9. Confidential Information and Competition. (a) During your employment with Campbell, you will receive and have access to confidential proprietary information about Campbell ("Information") and its worldwide business, including but not limited to, information about costs, profits, sales, marketing or business plans, existing or prospective customers, suppliers, possible acquisitions or divestitures, potential new products or markets, personnel, know-how, formulae, recipes, processes, equipment, discoveries, inventions, research, technical or scientific information and other data not available to the public, none of which is part of the general knowledge of the industry. (b) During and after your employment, you will not disclose, use, or appropriate Information for your own use or for the use of others, directly or indirectly, except as required in the performance of your duties to Campbell. You recognize that any unauthorized disclosure, use, or appropriation of Information would be highly prejudicial to Campbell. (c) In the event that your employment terminates for any reason, you shall deliver to Campbell, upon request or before your last day of employment, all originals and copies of files, writings, reports, memoranda, diaries, notebooks, notes of meetings or presentations, data, computer tapes or discs, drawings, charts, photographs, slides, patents or any other form of record which contains Information created or produced for, at the direction of, or by Campbell or its employees or agents. 10. No Business Diversion. You will not, without the written consent of Campbell's chief legal officer, for one year following the termination of your employment (for any reason), either directly or indirectly, solicit, divert or take away or attempt to solicit, divert or take away, any customers, business or suppliers of Campbell whom you serviced, called upon, or solicited during your employment, or with whom you became acquainted as a result of your employment. 11. No Employee Solicitation. During your employment and for a period of one year thereafter, you will not, directly or indirectly, solicit, employ, interfere with, attempt to entice away from Campbell, or recommend for employment outside Campbell, any individual who is employed by Campbell at the time of such solicitation, employment, interference or enticement. 12. Non-Competition. (a) During your employment, and for eighteen (18) months after your employment (twelve (12) months if your employment is terminated at the Board's request), you will not, directly or indirectly, own, advise, manage, operate, join, control, receive compensation or benefits from, or participate in the ownership, management, operations, or control of, or be 3 4 employed or be otherwise connected in any manner with, any business which directly or indirectly competes (as defined in subparagraph 12(b)) with in any part of the world, the business of Campbell or its subsidiaries or affiliates (collectively "Campbell Companies"), as conducted or planned by Campbell Companies during your employment. (b) "Competes" as used in this Agreement means engages in, or plans to engage in, the production marketing or selling of any product or service of any person or organization, other than Campbell Companies, which resembles or competes with a product or service of Campbell Companies (or a product or service which, to your knowledge, was under development by Campbell Companies) during your employment. (c) Except as prohibited in paragraph 12(a), this Agreement will not preclude you from ownership of less than 1% of the outstanding shares of any class of shares of any corporations listed on the New York Stock Exchange or the American Stock Exchange or quoted on NASDAQ. (d) You acknowledge that any employment or relationship in violation of this Agreement would necessarily require you to use or rely on Information to which you became privy during the course of your employment with Campbell. 13. Enforcement of Agreement. (a) You agree that the restrictions in this Agreement are necessary to protect the legitimate interests of Campbell, and impose no undue hardship on you. You further agree that the breach or threatened breach of any provisions of this Agreement will result in irreparable injury to Campbell, for which there is no adequate remedy at law. Your consent to the issuance of any restraining or preliminary order or injunction which arises from, directly or indirectly, any use, disclosure or conduct by you in violation of this Agreement. You agree that, if Campbell prevails in any suit or proceedings under this Agreement, you will pay Campbell all of Campbell's attorney fees, costs and expenses incurred in connection with such suit or proceeding or the enforcement of Campbell's rights under this Agreement, regardless of whether the scope of the no-compete is reformed by the court. (b) This Agreement and all terms of your employment shall be governed by, construed and enforced in accordance with the laws of the State of New Jersey, without giving effect to conflict of law principles. Each party irrevocably agrees that any legal proceedings arising out of, or relating to the subject matter of this Agreement shall be brought in the Superior Court of New Jersey in Camden County or the United States District Court of New Jersey, Camden Vicinage. Each party irrevocably consents to such jurisdiction and venue. 14. Survival. This Agreement shall survive the termination of your employment for any reason. 15. No Continuation of Employment. This Agreement does not impose on Campbell any obligation to retain you in its employ. To the contrary, you are an employee-at-will. 4 5 16. Reform of Agreement. No provision of this Agreement may be amended or waived unless agreed to in writing and signed by the chief legal officer of Campbell Soup Company. The failure to exercise, or delay in exercising any right, power or remedy under this Agreement shall not waive any right, power or remedy which Campbell has under this Agreement. 17. Severability or Reform by Court. In the event that any provisions of this Agreement is deemed by a court to be broader than permitted by applicable law, then such provisions shall be reformed so that it is enforceable to the fullest extent permitted by applicable law. If any provision of this Agreement shall be declared by a court to be invalid or unenforceable to any extent, the validity or enforceability of the remaining provisions of this Agreement shall not be affected. 18. Entire Agreement. This Agreement constitutes the entire understanding between the parties to this Agreement. This Agreement supersedes all prior agreements, understandings, and arrangements, oral or written, between the parties with respect to the subject matter of this Agreement. The parties acknowledge that this Agreement was entered into in the State of New Jersey. 19. Agreement Subject to Other Matters. This Agreement is subject to: (a) Your completion of a full medical examination and a report thereon of your good health satisfactory to Campbell, including testing for controlled substance abuse; and (b) Confirmation satisfactory to Campbell of your entitlement to continue to reside and work in the United States under applicable United States immigration and naturalization laws. Please acknowledge your agreement with the foregoing by signing and returning to me the enclosed copy of this letter. Sincerely, /s/ Philip E. Lippincott ------------------------ Philip E. Lippincott Chairman Agreed: /s/ David W. Johnson -------------------- Date: May 25, 2000 5 EX-27 5 0005.txt FINANCIAL DATA SCHEDULE
5 1,000,000 9-MOS JUL-30-2000 AUG-02-1999 APR-30-2000 34 0 496 26 560 1,186 3,289 1,667 5,195 2,983 1,270 0 0 20 143 5,195 5,078 5,078 2,321 2,321 65 0 149 988 333 655 0 0 0 655 1.54 1.52
-----END PRIVACY-ENHANCED MESSAGE-----