Exhibit 10.7

 
 
Form of Cash-Based Long-Term Incentive Compensation Award Agreement - Officers
 
This Cash-Based Long-Term Incentive Compensation Award Agreement (this
“Agreement”), dated as of February 15, 2012 (the “Effective Date”), is by and
between [insert] (“Executive”) and Ralcorp Holdings, Inc. (the “Company”).
 
Recital
 
The Company desires to provide an incentive to retain and reward Executive for
meeting certain performance criteria by providing Executive with a cash-based
long-term incentive compensation award based on the terms and subject to the
conditions contained in this Agreement and the Ralcorp Holdings, Inc. Cash Based
Incentive Plan.
 
Agreements
 
NOW THEREFORE, in consideration for the promises contained herein and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and Executive agree as follows:
 
1.  Performance Criteria.  The Company will pay Executive a one-time, long-term
incentive compensation award, the amount of which is set forth in Section 2, if:
 
a.  
the Executive remains employed by the Company from the Effective Date through
December 31, 2014; and

 
b.  
the Performance Target, as defined herein, or percentage thereof has been
achieved.

 
In the event any of the criteria set forth in Section 1 are not satisfied,
Executive will not be eligible to receive any portion of the long-term incentive
compensation award.
 
For purposes of this Agreement, “Performance Target” shall mean the achievement
of adjusted diluted earnings per share of the Company for the year ended
December 31, 2014 equal to an amount (the “Target EPS”) calculated by applying a
compound annual growth rate of 20% to a baseline adjusted diluted earnings per
share of the Company for the year ended December 31, 2011, as determined in good
faith by the Company’s board of directors.  The Company shall make the
determination of whether the Performance Target has been met by any means it
deems reasonable under the circumstances using its good faith judgment and
general accounting principles.  The Company reserves the right, in its
discretion, to make appropriate adjustments to the calculation of the
Performance Target to account for any infrequent or non-recurring items that it
determines are not reflective of the Company’s ongoing operations or the effects
of major corporate transactions or other items that the Company determines
significantly distort the comparability of the Company’s performance against the
Performance Target.
   
2.  Award.  In the event all of the criteria in Section 1 are satisfied,
Executive will be eligible to receive the following incentive compensation
amount:      
 
Performance Level
 
 
Incentive Compensation Amount
Threshold (90% of Target EPS)
 
$
Target (100% of Target EPS)
 
$
Maximum (110% of Target EPS)
 
$

 
The incentive compensation amount shall be adjusted proportionately for
performance levels that exceed the Threshold level and that fall below the
Maximum level.
 
3.  Forfeiture.  Without limiting the foregoing, Executive shall forfeit his
rights to receive any incentive compensation amount under this Agreement and
shall not be entitled to any payment or other consideration hereunder upon the
earliest to occur of the following events (any of which is referred to as a
“Forfeiture Event”) prior to December 31, 2014:
 
a.  
the termination of Executive’s employment with the Company or one of its
affiliates with or without Cause;

 
b.  
the voluntarily termination by Executive of his employment with the Company or
one of its affiliates;

 
c.  
the engagement by Executive in competition with the Company or any of its
affiliates; or

 
d.  
the engagement by Executive in any of the following actions:

 
i.  
being openly critical in the media of the Company or any of its affiliates or
its directors, officers or employees or those of any affiliate;

 
ii.  
pleading guilty or nolo contendere to any felony or any charge involving moral
turpitude;

 
iii.  
misappropriating or destroying Company or affiliate property including, but not
limited to, trade secrets or other proprietary property;

 
iv.  
improperly disclosing material non-public information regarding the Company or
any of its affiliates; or

 
v.  
inducing or attempting to induce any customer, supplier, lender or other
business relation of the Company or any of its affiliates to cease doing
business with the Company or any of its affiliates; or

 
e.  
any other event or reason resulting in forfeiture as described in Section 1.

 
Upon the occurrence of a Forfeiture Event, the incentive compensation award
represented by this Agreement will be forfeited and will be cancelled, and
Executive shall not be entitled to any payment or other consideration hereunder.
 
4.     Payment of Award.  Subject to Section 3 and the other terms and
conditions herein, the payment of any award under this Agreement shall be made
within 60 days of December 31, 2014.  Any award shall be paid in cash (or its
equivalent) in a single lump sum.  If applicable, the Company or its affiliate
shall withhold all applicable tax-related items legally payable by Executive
from such cash payment, his wages or other cash compensation paid to Executive
by the Company and/or its affiliate equal to the amount of the total withholding
tax obligation.  Any award pursuant to this Agreement shall not be eligible for
deferral and shall not be deemed benefit earnings for purposes of any Company
benefit plan, including but not limited to the Ralcorp Holdings, Inc. Deferred
Compensation Plan for Key Employees, the Executive Savings Investment Plan and
the Savings Investment Plan.
 
5.     Nature of the Award.  In accepting the terms and conditions of this
Agreement, Executive acknowledges and agrees as follows:
 
a.  
the Company’s granting of eligibility for this award is voluntary and occasional
and does not create any contractual or other right to receive future grants, or
benefits in lieu of an award, even if eligibility for an award has been granted
repeatedly in the past, and all decisions with respect to future grants, if any,
will be at the sole discretion of the Company;

 
b.  
Executive’s receipt of any award is not intended to create and should not be
construed as creating a contract guaranteeing employment of any duration with
the Company or its subsidiaries or affiliates and shall not interfere with the
ability of the Company or its affiliates to terminate Executive’s employment at
any time, for any reason, with or without notice;

 
c.  
the grant of eligibility for this award is an extraordinary benefit and is not
part of normal or expected compensation or salary for any purposes, including
without limitation, calculating any severance, resignation, termination,
redundancy, end of service payments, bonuses, long-service awards, pension or
retirement benefits or similar payments and in no event should be considered as
compensation for, or relating in any way to, past services for the Company or an
affiliate; and

 
d.  
in consideration of the grant of eligibility for this award, no claim or
entitlement to compensation or damages shall arise from termination of the award
resulting from termination of Executive’s employment with the Company or its
affiliates (for any reason whatsoever), and Executive irrevocably releases the
Company and its affiliates from any such claim that may arise.

 
6.  Taxable Event.  Executive acknowledges that the issuance of the cash payment
hereunder may have significant tax consequences to Executive, and Executive is
hereby advised to consult with Executive’s own tax advisors concerning such tax
consequences.
 
7.  Non-Competition.  During the term of Executive’s employment with the Company
(or one of its subsidiaries or affiliates) and for one (1) year thereafter,
except in the course of Executive performing his/her job responsibilities with
the Company, Executive will not directly or indirectly, in a competitive
capacity, engage or invest in, own, manage, operate, finance, control or
participate in the ownership, management, operation, financing or control of, be
employed by or under contract with (including as a director, advisor, or
consultant), lend Executive’s name or any similar name to, lend Executive’s
credit to or render services or advice to, or plan or prepare to do any of the
foregoing with any business organization or entity whose products or activities
compete or intend to compete with the Company in the United States or Canada on
food products produced by the Company (including those of its subsidiaries and
operating divisions) (“Competing Company”) at the time of termination of
employment; provided however, Executive may purchase or otherwise acquire up to
(but not more than) five percent (5%) of any class of securities of any entity
(but without otherwise participating in the activities of such entity) if such
securities are listed on any national or regional securities exchange or have
been registered under §12(g) of the Securities Exchange Act of 1934, as
amended.  For purposes of this Agreement, a business entity or organization
shall be a Competing Company only if more than ten percent (10%) of its
aggregate gross revenues and more than ten percent (10%) of its aggregate net
income are derived from products or activities which compete or intend to
compete with the Company’s food products in the United States and Canada.
 
8.  Non-Solicitation/Non-Hire.  Whether for Executive’s own account or the
account of any other person or entity, Executive will not: (i) at any time
during the Executive’s employment with the Company and for one (1) year after
Executive’s termination of employment, directly or indirectly, solicit as an
employee, independent contractor or otherwise, any person who was a salaried and
bonus eligible employee of the Company at any time during the term of
Executive’s employment with the Company or in any manner induce or attempt to
induce any employee of the Company to terminate his or her employment with the
Company or any affiliate; or (ii) at any time during the Executive’s employment
with the Company and for one (1) year after Executive’s termination of
employment, interfere with the Company’s relationship with any person or entity
who was a customer or supplier of the Company at the time of Executive’s
termination of employment.
 
9.  Non-Disclosure.  Upon receipt of this Agreement, Executive agrees not to
talk about, write about, or otherwise disclose the terms of this Agreement, or
any fact concerning its execution or implementation to any person, firm or
corporation, other than the Executive’s family, attorney or financial advisor,
unless Executive is required to do so by Federal, state or local law, or by a
court of competent jurisdiction, except to the extent that the terms of this
Agreement are public information.  Executive understands that his or her
violation of the provisions of this paragraph will result in the termination of
this Agreement and any rights available to Executive hereunder and that such
violation will subject Executive to disciplinary action up to and including
termination of employment.
 
10.   Breach.  In the event Executive violates the provisions of Section 7, 8 or
9 of this Agreement, the Company shall have the right to take all necessary
legal action to enforce its rights hereunder.  In addition to any remedies
available at law, the Company shall have the right to seek and obtain any
equitable and injunctive relief (without the requirement to post a bond) that a
court may determine is appropriate.  To the extent that the Company is
successful in enforcing this provision, Executive shall be responsible for
paying the Company’s reasonable attorneys’ fees and costs.  The parties
acknowledge and agree that the time and other limitations contained in Sections
7, 8 and 9 of this Agreement are reasonable and necessary for the proper
protection of the Company.  However, if any arbitrator or court of competent
jurisdiction finds that the time period of the provisions contained therein is
too lengthy or the geographic coverage and scope of the provisions contained
therein is too broad, the restrictive time period shall be deemed to comprise
the largest scope permissible by law under the circumstances.  Executive further
acknowledges that, in the event of the termination of his employment with the
Company, Executive’s skills and experience will permit him to find employment in
many markets, and the limitations contained herein will not prevent him from
earning a livelihood.  The period of time applicable to the provisions contained
in Sections 7, 8 and 9 of this Agreement shall be extended by the duration of
any actual or threatened violation by Executive of such provision.
 
11.   Amendment.  This Agreement may be amended only by a writing executed by
the Company and Executive which specifically states that it is amending this
Agreement.  Notwithstanding the foregoing, this Agreement may be amended solely
by the Company by a writing which specifically states that it is amending this
Agreement, so long as a copy of such amendment is delivered to Executive, and
provided that no such amendment adversely affecting Executive’s rights hereunder
may be made without Executive’s written consent.  Without limiting the
foregoing, the Company reserves the right to change, by written notice to
Executive, the provisions of this Agreement in any way it may deem necessary or
advisable to carry out the purpose of the grant as a result of any change in
applicable laws or regulations or any future law, regulation, ruling or judicial
determination.
 
12.   Successors and Assigns.  The rights and obligations of the Company under
this Agreement will be transferable by the Company to any one or more persons or
entities, and all covenants and agreements hereunder will insure to the benefit
of, and be enforceable by, the Company’s successors and assigns.  Executive
shall have no right to transfer or assign any of his or her rights under this
Agreement.
 
13.   Entire Agreement.  This Agreement represents the entire agreement between
the parties and any prior understandings or representations of any kind
preceding the date of this Agreement shall be superseded by and shall not be
binding on either party except to the extent incorporated into this Agreement.
 
14.   Severability.  If, for any reason, any provision of the Agreement is held
invalid, such invalidity shall not affect any other provision of the Agreement
not held so invalid, and each such other provision shall to the full extent
consistent with law continue in full force and effect.
 
15.   Governing Law.  To the extent that Federal laws do not otherwise control,
this Agreement and all determinations made or actions taken pursuant hereto
shall be governed by the laws of the State of Missouri, without regard to the
conflict of laws rules thereof.
 
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement
effective as of the Effective Date.
 

 
RALCORP HOLDINGS, INC.
 
 
EXECUTIVE
 
By:________________________________
By:________________________________
    Name:________________________________ 
Name:________________________________     
Title:________________________________