Exhibit 10.1

 

AGREEMENT

 

Agreement made this           day of                        ,         , by and
between ConAgra Foods, Inc., a Delaware corporation, hereinafter referred to as
“ConAgra”, and                             , hereinafter referred to as
“Employee”.

 

WHEREAS, the Board of Directors of ConAgra (“Board”) has determined that the
interests of ConAgra stockholders will be best served by assuring that all key
corporate executives of ConAgra will adhere to the policy of the Board with
respect to any event by which another entity would acquire effective control of
ConAgra, including but not limited to a tender offer, and

 

WHEREAS, the Board has also determined that it is in the best interests of
ConAgra stockholders to promote stability among key executives and employees.

 

NOW, THEREFORE, it is agreed as follows:

 

1.             Duties of Employee.  Employee shall support the position of the
Board and the chief executive officer, and shall take any action requested by
the Board or the chief executive officer with respect to any “Change of Control”
(as defined at Section 7 below) of ConAgra.  If the Employee violates the
provisions of this Section, the Employee shall forfeit any payments due under
the terms of this Agreement.

 

2.             Employment Contract.  If a Change of Control of ConAgra occurs,
and if at the initiation of the Change of Control attempt Employee is then
employed by ConAgra, ConAgra hereby agrees to continue the employment of
Employee for a period of three years from the date the Change of Control
effectively occurs.  During said three year period, Employee shall receive
annual base and incentive compensation in an amount not less than that specified
in Section 3(a) below.

 

If Employee is Involuntarily Terminated (as defined at Section 7 below), at any
time during the three year period, ConAgra shall pay to Employee an amount equal
to that which Employee would have received pursuant to Section 3(a) below for
the remainder of the three year period, and shall also make the payments
specified in Sections 3(b) and 3(c) and, if applicable, any additional payments
specified in Section 5 below.  In addition, in the event of Involuntary
Termination at any time, Employee shall receive payment of the base and
incentive compensation described in Section 3(a) for one year.  Any such
termination payment of base and incentive compensation shall be made to Employee
in a lump sum within thirty (30) days after termination.

 

If Employee voluntarily terminates employment at any time during the three year
period, the Acquiror (as defined below), ConAgra, and their subsidiaries will
not be obligated to pay the Employee any amount that might be due for the
remainder of the three year period, or for any termination pay; however, they
shall make any additional payments specified in Sections 3(b), 3(c) and 5 (if
applicable) below.

 

3.             Description of Payments.  The payments to be made to Employee
are:

 

(a)           Annual Base and Incentive Compensation.  Employee shall receive
for the three year period described in Section 2 above an annual amount equal to
the Employee’s current annual rate of compensation, which current annual
compensation shall be computed as follows:  twenty-six times the Employee’s
highest bi-weekly salary payment received during the one year period ending
immediately prior to the Change of Control of ConAgra.  In addition, Employee
shall receive (i) an amount for short term incentive equal to the larger of (I)
the short term incentive target, if any, most recently approved by the Human
Resources Committee of the Board (“Committee”), and (II) the highest of the
three actual short term incentive awards (including deferred amounts) made to
Employee for the three fiscal years immediately preceding such Change of
Control, plus (ii) an amount for the Long Term Senior Management Incentive Plan
Award equal to the highest per unit award made during the three fiscal years
immediately preceding such Change of Control multiplied by the

 

 

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Exhibit 10.1 (continued)

 

number of units of participation approved by the Committee for the current
fiscal year.

 

(b)           Retirement Benefits.  Employee shall receive an amount equal to
that which the Employee would have received as retirement benefits under the
provisions of the ConAgra Pension Plan for Salaried Employees (“Qualified
Pension Plan”) and the ConAgra Retirement Income Savings Plan (“CRISP”) in
effect immediately prior to the Change of Control of ConAgra, had Employee
continued employment until age 65 at the current annual rate of base and short
term incentive compensation as determined above and assuming no limitations
under Sections 401(a)(17) and 415 of the Internal Revenue Code of 1986, as
amended (“Code”).

 

(i)            The supplemental pension benefit hereunder shall be equal to the
result of subtracting (x) the benefit the Employee will receive under the
Qualified Pension Plan from (y) the pension benefit the Employee would obtain
under the Qualified Pension Plan if the Employee remained in the employ of
ConAgra until the Employee attained age 65.  The supplemental pension benefit is
to be computed assuming the Employee is to receive an unreduced normal
retirement pension benefit payable beginning at the later of the date the
Employee attains age 60 or the date of the Employee’s termination of
employment.  If the Employee begins to receive the supplemental pension benefit
at a time other than as described in the preceding sentence, an actuarial
adjustment shall be made to reflect such event.  The supplemental pension
benefit shall be reduced by the amount of benefit received from the ConAgra
Nonqualified Pension Plan (or any successor plan) which relates to periods
following the Employee’s termination of employment.

 

(ii)           The supplemental CRISP benefit shall be equal to the amount
computed, as follows:

 

A.                                   The additional years of service that the
Employee would receive if employment was not terminated prior to attaining age
65 is multiplied by the Employee’s current annual base and short term incentive
compensation (as described in Section 3(a)).

 

B.                                     The result in A, immediately above, is
multiplied by 3%.

 

C.                                     The result in B, immediately above, is
present valued to the date of the Employee’s termination of employment.  The
discount factor for such present value shall be the discount factor used by the
Qualified Pension Plan at the time of such termination of employment.  The
present value shall be computed based on the assumption that the result in B,
immediately above, is paid ratably (and monthly) over the additional years of
service of the Employee.

 

D.                                    The present value amount determined
pursuant to C, immediately above, shall be funded pursuant to Subsection (iv) of
this Section 3(b).

 

(iii)          For purposes of computing the amounts described in Sections
3(b)(i)(y) and 3(b)(ii)A, the following shall apply:

 

A.            The total amount of current annual base pay and short term
incentive pay (as described in Section 3(a)) shall be used without any

 

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Exhibit 10.1 (continued)

 

reduction for the limitation imposed upon compensation by Code Section
401(a)(17) (or any successor section thereto).

 

B.                                     The limitations imposed by Code Section
415 shall not apply.

 

C.                                     If, at the time of termination, the
Employee is not eligible to participate in the Qualified Pension Plan, the
amount computed under Section 3(b)(1) shall be based solely on the years after
termination of employment.

 

D.                                    If, at the time of termination, the
Employee is not eligible to participate in the Qualified Plan, but does
participate in a defined benefit plan of ConAgra, its successor, or one of their
affiliates (“Other Defined Benefit Plan”), the Employee shall receive an
additional supplemental benefit equal to the result of subtracting (x) the
benefit the Employee will receive from the Other Defined Benefit Plan from (y)
the benefit the Employee would receive from the Other Defined Benefit Plan
assuming the Employee is to receive an unreduced normal retirement pension
benefit payable beginning at the later of the date the Employee attains age 60
or the date of the Employee’s termination and assuming the Employee’s pay, for
purposes of calculating the Employee’s Other Defined Benefit Plan benefit, is,
and always has been, equal to the Employee’s current annual base pay and short
term incentive (as described in Section 3(a)).

 

(iv)          The actuarial assumptions and methods used by this Section 3(b)
shall be the same as those used by the Qualified Pension Plan.  The timing of
payment and the form of the supplemental pension benefit under this Section 3(b)
shall be the same as elected by the Employee under the Qualified Pension Plan
and the timing of payment and the form of the supplemental CRISP benefit shall
be the same as elected by the Employee under CRISP.  If the Employee does not
participate in the Qualified Pension Plan and/or CRISP, the Employee shall elect
(from the respective options under the Qualified Pension Plan and CRISP) the
timing and form of the supplemental pension and CRISP benefits;

 

(v)           The supplemental pension and CRISP benefits payable under this
Section 3(b) shall be unfunded until a Voluntary Termination or Involuntary
Termination following a Change of Control.  Within 60 days following such a
termination, the supplemental pension and CRISP benefits shall be funded, in one
lump sum payment, through a trust in the form attached to the ConAgra
Supplemental Pension and CRISP Plan for Change of Control and which trust is
incorporated by reference.  The transferred amount for the supplemental CRISP
benefit shall be held in a separate account and separately invested by the
trustee.  The amount accumulated in such account shall be the sole source of
payment of the supplemental CRISP benefit, and shall be the amount of the
supplemental CRISP benefit hereunder.  The Acquiror, ConAgra and their
subsidiaries shall make up any supplemental pension benefit payments the
Employee does not receive under the trust, e.g., if the funds in the trust are
insufficient to make the payments due to insufficient earnings in the trust. 
The trustee of such trust shall be a national or state chartered bank.  If
funding of the trust is not made within the sixty day period described in this
Subsection (iv) of this Section 3(b), the Employee’s supplemental pension and
CRISP

 

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Exhibit 10.1 (continued)

 

benefits shall then be equal to the product of 150% multiplied by the amount of
supplemental pension and CRISP benefits described in this Section 3(b) above;
provided, however, this increase in benefits is not intended to remove or
detract from the obligation to fund the trust.  The supplemental pension and
CRISP benefits shall not be paid from the assets of the Qualified Pension Plan
or CRISP.

 

(c)  Additional Payment.  If a Change of Control of ConAgra occurs, Employee
shall receive an amount equal to the excess, if any, of the highest per share
price offered (valued in U.S. currency) by the successful Acquiror for ConAgra
common stock (which stock will then be treated for purposes of this Agreement as
converted into equivalent shares of such Acquiror’s or the surviving company’s
capital stock as of the date of the Change of Control of ConAgra) over the
closing per share price of such Acquiror’s or the surviving company’s
(“Acquiror”) stock quoted on an established securities market (or if applicable,
the closing bid price for the Acquiror’s stock that is quoted on a secondary
market or substantial equivalent thereof) on the date of termination (or if the
date of termination is not a business day, on the next preceding business day),
multiplied by the highest number of shares of the Acquiror’s capital stock owned
by the Employee at any time during the period beginning on the date of the
Change of Control of ConAgra and ending on the date of termination.  For
purposes of this Section 3(c), the additional amount due hereunder shall be
computed as if Employee owned all of the Acquiror’s stock with respect to which
Employee has an option to purchase in connection with employment with the
Acquiror, ConAgra or any of their subsidiaries.  Said amount shall be paid to
Employee within ten days after termination.  In addition, if Employee sells any
of the Acquiror’s stock within one year following said termination, Employee
shall receive the amount by which the closing price of such stock per share on
the date of termination (determined as aforesaid) exceeds the per share actual
net sales price of the Acquiror’s stock on the date of sale realized by
Employee, multiplied by the number of shares sold by Employee.  Said amount
shall be paid in immediately available funds to Employee within ten days after
the sale.  In addition, to the extent any of ConAgra’s common stock remains
outstanding after a Change of Control, then Employee shall receive additional
amounts computed and payable in a manner similar to that provided in this
Section 3(c) for Acquiror’s stock owned, or subject to an option held, by
Employee.  These provisions shall be appropriately modified or adjusted to take
into account the fact that the computations pursuant to the preceding sentence
are with respect to ConAgra common stock and related options rather than the
Acquiror’s capital stock and options related thereto.  The computations and
payments under this Section 3(c) shall include appropriate adjustments for any
stock splits, stock dividends, recapitalizations or similar share restructurings
that may occur from time to time.

 

4.             Merger.  ConAgra shall not merge, reorganize, consolidate or sell
all or substantially all of its assets, to or with any other corporation until
such corporation and its subsidiaries, if any, expressly assume the duties of
ConAgra set forth herein.

 

5.             Certain Additional Payments by ConAgra.

 

(a)  Anything in this Agreement to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by ConAgra to or for the
benefit of the Employee, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (a “Payment”), would be
subject to the excise tax imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
“Excise Tax”), then the Employee shall be entitled to receive an additional
payment (a “Gross-Up Payment”) in any amount such that after payment by the
Employee of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise

 

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Exhibit 10.1 (continued)

 

Tax, imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

 

(b)  Subject to the provisions of Subsection (c) below, all determinations
required to be made under this Section, including whether a Gross-Up Payment is
required and the amount of such Gross-Up Payment, shall be made by the certified
public accounting firm then representing ConAgra (the “Accounting Firm”) which
shall provide detailed supporting calculations both to ConAgra and the Employee
within 15 business days of the date of termination, if applicable, or such
earlier time as is requested by ConAgra or Employee.  If the Accounting Firm
determines that no Excise Tax is payable by the Employee, it shall furnish the
Employee with an opinion that Employee has substantial authority not to report
any Excise Tax on the Employee’s federal income tax return.  Any determination
by the Accounting Firm shall be binding upon ConAgra and the Employee.  As a
result of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments which will not have been made by ConAgra should
have been made (“Underpayment”), consistent with the calculations required to be
made hereunder.  In the event that ConAgra exhausts its remedies pursuant to
Subsection (c) below and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by ConAgra to or for the benefit of the Employee.

 

(c)  The Employee shall notify ConAgra in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by ConAgra of the
Gross-Up Payment.  Such notification shall be given as soon as practicable but
no later than ten (10) business days after the Employee knows of such claim and
shall apprise ConAgra of the nature of such claim and the date on which such
claim is requested to be paid.  The Employee shall not pay such claim prior to
the expiration of the thirty-day (30 day) period following the date on which it
gives such notice to ConAgra (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due).  If ConAgra notifies the
Employee in writing prior to the expiration of such period that it desires to
contest such claim, the Employee shall:

 

(i)                                     give ConAgra any information reasonably
requested by ConAgra relating to such claim,

 

(ii)                                  take such action in connection with
contesting such claim as ConAgra shall reasonably request in writing from time
to time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by ConAgra,

 

(iii)                               cooperate with ConAgra in good faith in
order to effectively contest such claim,

 

(iv)                              permit ConAgra to participate in any
proceedings relating to such claim; provided, however, that ConAgra shall bear
and pay directly all costs and expenses (including additional interest and
penalties) incurred in connection with such contest and shall indemnify and hold
the Employee harmless, on an after-tax basis, for any Excise Tax or income tax,
including interest and penalties with respect thereto, imposed as a result of
such representation and payment of costs and expenses.  Without limitation on
the foregoing provisions of this Subsection (c), ConAgra shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals,

 

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Exhibit 10.1 (continued)

 

proceedings, hearings and conferences with the taxing authority in respect of
such claim and may, at its sole option, either direct the Employee to pay the
tax claimed and sue for a refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as ConAgra shall determine; provided, however, that if ConAgra
directs the Employee to pay such claim and sue for a refund, ConAgra shall
advance the amount of such payment to the Employee, on an interest-free basis
and shall indemnify and hold the Employee harmless, on an after-tax basis, from
any Excise Tax or income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Employee with respect to which such contested amount is claimed to be due is
limited solely to such contested amount.  Furthermore, ConAgra’s control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.

 

(d)                                 If, after the receipt by the Employee of an
amount advanced by ConAgra pursuant to Subsection (c) above, the Employee
becomes entitled to receive any refund with respect to such claim, the Employee
shall (subject to ConAgra’s complying with the requirements of Subsection (c))
promptly pay to ConAgra the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto).  If, after the receipt
by the Employee of an amount advanced by ConAgra pursuant to Subsection (c), a
determination is made that the Employee shall not be entitled to any refund with
respect to such claim and ConAgra does not notify the Employee in writing of its
intent to contest such denial of refund prior to the expiration of thirty days
after such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.

 

6.             Term and Binding Effect.  This Agreement shall bind ConAgra and
Employee as long as Employee remains in the employ of ConAgra; provided,
however, ConAgra may terminate this Agreement at any time by giving notice to
Employee; and provided further, however, that ConAgra may not terminate this
Agreement at any time subsequent to the announcement of an event that could
result in a Change of Control of ConAgra.  This Agreement shall be binding upon
the parties hereto, their heirs, executors, administrators and successors.

 

7.             Certain Definitions.  The following definitions shall apply for
the purposes of this Agreement:

 

(a)           Change of Control of ConAgra.  The term “Change of Control” shall
mean:

 

(i)            The acquisition (other than from ConAgra) by any person, entity
or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934 (the “Exchange Act”), (excluding, for this purpose, ConAgra
or its subsidiaries, or any employee benefit plan of ConAgra or its
subsidiaries, which acquires beneficial ownership of voting securities of
ConAgra) of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the

 

29

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Exhibit 10.1 (continued)

 

Exchange Act) of 30% or more of either the then outstanding shares of common
stock or the combined voting power of ConAgra’s then outstanding voting
securities entitled to vote generally in the election of directors; or

 

(ii)           Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by
ConAgra’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or

 

(iii)          Consummation of a reorganization, merger, consolidation, in each
case, with respect to which persons who were the shareholders of ConAgra
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 50% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated company’s then outstanding voting securities, or a liquidation or
dissolution of ConAgra or of the sale of all or substantially all of its assets.

 

(b)           Involuntary Termination.  The term “Involuntary Termination” or
any variation thereof shall mean either (i) the actual involuntary termination
of Employee’s employment with the Acquiror, ConAgra and their subsidiaries after
a Change of Control (with or without cause) or (ii) the constructive involuntary
termination of the Employee’s employment with the Acquiror, ConAgra and their
subsidiaries after a Change of Control.  The term “constructive involuntary
termination” shall include (w) a reduction in the Employee’s compensation
(including applicable fringe benefits); (x) a substantial change in the location
of the Employee’s job without the Employee’s written consent; (y) the Employee’s
demotion or diminution in the Employee’s position, authority, duties or
responsibilities without the Employee’s written consent; or (z) the sale or
disposition of the stock of Employee’s immediate employer, which was a
subsidiary of the Acquiror, ConAgra, or their other subsidiaries immediately
prior to such sale or disposition, provided Employee is not employed after such
sale or disposition by the Acquiror, ConAgra, or any of their subsidiaries that
are retained after such sale or disposition.  “Substantial change in location”
means any location change in excess of 35 miles from the location of the
Employee’s job with ConAgra or its subsidiaries at the time of the Change of
Control of ConAgra.

 

8.             Costs.  All costs of litigation necessary for the Employee to
defend the validity of this contract are to be paid by ConAgra or its successors
or assigns.

 

9.             Prior Agreements.  This Agreement supersedes, restates and
replaces any and all prior agreements to which both ConAgra and the Employee are
parties with respect to the Change of Control of ConAgra.

 

IN WITNESS WHEREOF, the parties have executed this Agreement.

 

EMPLOYEE:

 

 

CONAGRA FOODS, INC.

 

 

 

 

 

 

 

 

 

 

 

Chairman and

 

 

 

Chief Executive Officer

 

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