EXHIBIT 10.1

July 14, 2006

Mr. Frank S. Sklarsky

13517 Cuming Street

Omaha, NE 68154

Re:  

Employment and Separation Agreement

Dear Frank:

This Employment and Separation Agreement letter (“Letter Agreement”) describes
the components of your employment and separation package. If you agree to the
terms of this Letter Agreement, you will receive benefits described below.

Your last day of employment (“Termination Date”) with ConAgra Foods, Inc.
(“ConAgra”) will be determined as we work through a transition period, but in no
event earlier than August 16, 2006. You agree to execute the normal duties and
responsibilities of your office during such period consistent with historical
practice. This Letter Agreement will become effective once you have signed it
and you have not exercised your right to revoke within the Revocation Period
described below.

1.

Remaining Employment:

 

a.

You will remain an employee of ConAgra through the Termination Date at your
current bi-weekly rate of $19,230.77, less appropriate deductions, payable
according to the normal payroll practices of ConAgra.

 

b.

Elected medical, dental, vision, ConAgra Retirement Income Savings Plan, ConAgra
Nonqualified Retirement Income Savings Plan, ConAgra Nonqualified Pension Plan,
ConAgra Pension Plan for Salaried Employees, and other benefits will continue
through the Termination Date, subject to plan provisions, including any changes
to the plans that may occur during this period.

2.

Severance:

 

a.

Following your Termination Date, you will receive Severance Pay at your current
bi-weekly rate of $19,230.77, less deductions required by law to be withheld,
for a period of one hundred four (104) weeks (“Severance Period”), unless you
violate any of the terms and conditions of this Letter Agreement. If there is a
reasonable possibility the breach can be cured, you will be given thirty (30)
days advance notice and an opportunity to cure any breach prior to cessation of
payments. The severance payments will be made to you in accordance with the
normal payroll practices of ConAgra. In addition to the Severance Period,
ConAgra also agrees to pay you the gross amount of $1,250,000 less deductions
required by law, upon the expiration of six (6) months following your
Termination Date, in consideration of any loss of benefits associated with your
initial Employment Agreement, which

 

 

outlined compensation for benefits forgone at your prior employment and in
consideration for the obligations set forth in paragraph 5 hereof. ConAgra
further agrees not to seek the return of any monies or benefits actually
received pursuant to your initial Employment Agreement with ConAgra.

 

b.

You may continue medical, dental and vision benefits at your current level of
coverage for you and your dependents at active employee premium rates for your
Severance Period or your reemployment (if such reemployment provides medical and
dental benefits), whichever occurs first. This period will be included within
your total COBRA continuation eligibility.

 

c.

Your qualified and nonqualified 401(k) and pension eligibility will end on your
Termination Date. Vesting is according to the plans’ schedules. Your
Nonqualified CRISP balances will be paid to you in the normal course provided by
the plan; provided, however, the payment shall not be paid prior to six (6)
months following termination, as required by the Code §409A.

3.

M.I.P.:

You will be eligible for any FY06 MIP incentive payment and also the incentive
for time worked in FY07 on a prorated basis at a level no less than the formula
calculation used for funding. The FY07 incentive will be calculated in
accordance with the FY07 plan at the end of the fiscal year.

4.

Outplacement:

You will be eligible for outplacement services as selected and provided by
ConAgra. You will be contacted directly by the provider after the Effective Date
of this Letter Agreement, as defined in Section 8.

5.

Your Obligations:

You agree to make yourself reasonably available to ConAgra, and will:

 

a.

Personally provide reasonable assistance and cooperation in providing or
obtaining information for ConAgra, and its representatives, concerning any
ConAgra matter of which you are knowledgeable.

 

b.

Personally provide to ConAgra, or its representatives, reasonable assistance and
cooperation relating to any pending or future lawsuits or claims, about which
you are knowledgeable.

 

c.

Promptly notify me, in writing, if you receive any request from any governmental
agency for information concerning ConAgra or any request from anyone other than
ConAgra for information regarding any potential claims or proposed litigation
against ConAgra or any of its affiliates.

 

d.

Refrain from making disparaging comments, with the purpose or effect of which is
to harm the reputation, good will, or commercial interests of ConAgra, its
management or leadership, or any of its affiliates. ConAgra also agrees to
refrain from engaging in any conduct or making comments, or statements, the
purpose and effect of which is to harm the reputation, good will, or interests
of you.

 

 

 

 

 

e.

Refrain from providing any information related to any claim or potential
litigation against ConAgra, or its affiliates to any non-ConAgra
representatives, without either ConAgra’s written permission or being required
to provide information pursuant to legal process.

 

f.

If required by law to provide sworn testimony on ConAgra or affiliate-related
matters, you will consult with and have ConAgra’s designated legal counsel
present for such testimony. ConAgra will be responsible for the costs of such
designated counsel and you will bear no cost for same. You will confine your
testimony to items about which you have actual knowledge, rather than
speculation.

 

g.

You will be promptly reimbursed after an expense statement is received for
reasonable travel, food, lodging and similar out-of-pocket expenses required to
fulfill the cooperation provisions above.

 

h.

Until September 1, 2008, you agree you will not accept employment with any
person, firm, corporation or business, including self-employment, sole
proprietorship or consulting work which is a direct competitor of ConAgra or its
affiliates, unless you receive prior written approval from ConAgra. To receive
prior written approval from ConAgra, or to receive written recognition that your
potential employment would not violate this Subparagraph 5.h, you should submit
a written request to Owen C. Johnson, Executive Vice President and Chief
Administrative Officer, or his designee or successor, providing the name of the
potential employer, a general description of the business conducted by the
employer, a general description of your potential duties at the employer, and
any other information you believe appropriate. Such approval or recognition will
not be unreasonably withheld by ConAgra. ConAgra will provide you a response as
soon as reasonably practicable after receipt of the information. If you violate
any of the terms or conditions of this paragraph, you may be subject to
penalties and lawsuits for injunctive relief and money damages.

 

i.

Until September 1, 2008, you agree not to solicit, encourage, directly or
indirectly, any other employee of ConAgra, or its affiliates with whom you
worked (“Protected Employee”), to quit or supplement their employment with
ConAgra, unless prior written approval is provided by ConAgra. In addition,
until September 1, 2008, you will not have any Protected Employee (A) report to
you (in a supervisory capacity), whether directly or indirectly, or through a
chain of supervision, or (B) provide consulting services to you or your
employer, other than in the course of your employment with ConAgra, unless prior
written approval is provided by ConAgra. This includes engaging in any single or
sole proprietorship, partnership, consulting or employment arrangement with you
and/or your employer while they are actively employed by ConAgra or its
affiliates. Prior written approval of this Section 5.i. will not be unreasonably
withheld by ConAgra.

6.

Confidentiality Agreement:

As an employee of ConAgra, you agree that ConAgra has developed and continues to
develop and use commercially valuable confidential and/or proprietary technical
and non-technical information which is vital to the success of ConAgra’s
business, and furthermore, that ConAgra utilizes confidential information, trade
secrets and proprietary

 

 

customer information in promoting and selling its products and services. For
purposes of this Letter Agreement, you acknowledge that “Confidential
Information” includes ConAgra’s marketing plans, market positions, strategic
plans, non-public financial information, financing matters, budget, long-range
plans, customer information, sales data, personnel information, privileged
information, or other information used by or concerning ConAgra, where such
information is not publicly available, or has been treated as confidential.

You agree that from this time forward, you will not, either directly or
indirectly, disclose, or use for the benefit of any person, firm, corporation or
other business organization or yourself, any “Confidential Information” related
to ConAgra or its affiliates. Except as provided in Sections 5.h. and 5.i., you
agree that you have and will keep the terms and amount of this Letter Agreement
completely confidential, except as required by applicable law, and that you have
not, nor will you hereafter disclose any information concerning this Letter
Agreement to any person other than your present attorneys, accountants, tax
advisors, or immediate family, and only if those persons agree to abide by the
provisions of the paragraph.

7.

Return of ConAgra Property:

You agree to return to ConAgra on your Termination Date, all company files,
records, documents, reports, computers, cellular telephones and other business
equipment, credit cards, keys, and other physical, personal or
electronically-stored property of ConAgra in your possession or control, and
further agree that you will not keep, transfer or use any copies or excerpts of
the foregoing items without the approval of ConAgra.

8.

Release of ConAgra:

In exchange for the benefits provided to you by ConAgra, and except for
ConAgra’s obligations hereunder, you hereby release ConAgra, and each of its
agents, directors, officers, employees, representatives, attorneys, affiliates,
and its and their predecessors, successors, heirs, executors, administrators and
assigns, and all persons acting by, through, or under or in concert with any of
them (collectively “Releasees”), or any of them, of and from any and all claims
of any nature whatsoever, in law or equity, which you ever had, now have, or may
have had relating to your employment, or termination of employment. This
includes (i) all claims relating to salary, overtime, vacation pay, incentive
bonus plans and/or severance pay, stock options, and any and all other fringe
benefits, for which you were eligible during your employment; (ii) all claims
under any employment agreement, change-in-control agreement, or other agreements
between you and ConAgra, and/or its subsidiaries or affiliates; and (iii) all
claims you may have against ConAgra or its employees under Title VII of the
Civil Rights Act of 1964; the Employee Retirement Income Security Act of 1974
(“ERISA”); the Americans with Disabilities Act; the Age Discrimination in
Employment Act; the Older Workers Benefit Protection Act; the Family and Medical
Leave Act; or any other federal, state, or local law or regulation regarding
your employment or termination of employment.

This release shall not preclude an action to enforce the specific terms of this
Letter Agreement; to any claims based on acts or events after this Letter
Agreement has become effective; to any unemployment or workers compensation
benefits to which you may be entitled; nor to benefits in which you have become
vested under ERISA.

 

 

 

 

You understand that you may take up to twenty-one (21) business days to decide
whether to accept this Letter Agreement. You may also consult with your personal
attorney before signing. If I do not receive an executed Letter Agreement from
you within twenty-one (21) days, any offers made by ConAgra in this Letter
Agreement are withdrawn. If you do decide to sign this Letter Agreement, you
have up to seven (7) days after signing (the “Revocation Period”) to change your
mind. To revoke this Letter Agreement, please write to Owen C. Johnson,
Executive Vice President and Chief Administrative Officer, within the Revocation
Period. No severance payments under this Letter Agreement can be made until the
expiration of the Revocation Period. Therefore, the timing of your signature may
affect the time of your receipt of severance payments. This Letter Agreement
shall become effective upon expiration of the Revocation Period (the “Effective
Date”).

You agree to execute another release on the Termination Date, as reasonably
requested by ConAgra, which shall be the same as to the above release.

9.

Code §409A Implications:

Since you are a “specified employee” as defined in Code §409A(a)(2)(B)(i), the
payment of, or commencement of the payment of, certain benefits will be delayed
for six (6) months. Any delayed payments will be made to you as soon as
practicable after the expiration of six (6) months following your Termination
Date. The parties acknowledge that the requirements of Code §409A are still
being developed and interpreted by government agencies, that certain issues
under Code §409A remain unclear at this time, and the parties hereto have made a
good faith effort to comply with the current guidance under Code §409A. If the
payment of any amounts to you as set forth herein is likely to result in
negative tax consequences under Code §409A, the parties agree to use their
reasonable best efforts to amend the Letter Agreement, or otherwise provide
comparable benefits to you that satisfy Code §409A requirements; provided,
however, such payment shall not include any tax gross-up and shall not result in
a significant economic cost to ConAgra.

10.

Set-Off:

In the event that ConAgra has a reasonable basis to believe you have breached
the terms of this Letter Agreement, ConAgra may, in addition to any other rights
and remedies, offset any claims against you from any current or future sums,
stock options, or rights, which may be due you or in which you may claim an
interest. If there is a reasonable possibility the breach can be cured, you will
be given thirty (30) days advance noticed and an opportunity to cure any breach
prior to a set-off.

11.

Indemnity:

ConAgra will continue to fully indemnify you as permitted by Delaware law and
the By-Laws of ConAgra.

12.

Assumption by Buyer:

In the event of a buyer of all or substantially all of the stock, assets or
business of ConAgra, ConAgra will provide the same level of security for, and
take the same steps to provide for the assumption by buyer of, obligations
hereunder as that provided for obligations under employment agreements with
ConAgra’s senior officers. The

 

 

foregoing notwithstanding, this Letter Agreement shall inure to the benefit of,
and shall be binding upon ConAgra and you and our respective heirs, executors,
personal representatives, successors, and assigns including, without limitation,
any entity with which ConAgra may merge or consolidate, or to which all or
substantially all of its assets may be transferred.

13.

Entire Agreement:

Except as specifically provided herein, this Letter Agreement constitutes the
entire agreement with respect to the subject matter hereof, and supersedes all
previous agreements and understandings, whether written or oral, between ConAgra
and you.

14.

Governing Law:

This Letter Agreement shall be construed under and in accordance with the laws
of the State of Nebraska.

If the above meets with your agreement, please sign and return one copy of this
Letter Agreement to me. An executed copy will be returned to you.

Sincerely,

 

/s/ Owen C. Johnson

 

Owen C. Johnson

Executive Vice President and Chief Administrative Officer

ConAgra Foods, Inc.

ACCEPTANCE:

Frank S. Sklarsky

 

__/s/ Frank S. Sklarsky__________

__July 14, 2006_____________

Signature

Date