EXHIBIT 10.2


 


HORMEL FOODS CORPORATION

2009 NONEMPLOYEE DIRECTOR DEFERRED STOCK PLAN 

(Plan Adopted November 24, 2008)


 


1.                                       Introduction.


 


1.1.                              Plan
History.  The Hormel Foods
Corporation 2009 Nonemployee Director Deferred Stock Plan (the “Plan”) is
adopted November 24, 2008.   The
Plan is intended to replace the Hormel Foods Corporation Nonemployee Director
Deferred Stock Plan which was first adopted October 4, 1999, and amended
and restated November 24, 2003, September 18, 2006, and January 1,
2008 (the “Prior Plan”).  Deferred
compensation credited under the Prior Plan shall continue to be governed by the
terms of the Prior Plan.


 


1.2.                              Purpose.  The purpose of the Plan is to provide an
opportunity for nonemployee members of the Board of Directors (the “Board”) of
Hormel Foods Corporation (the “Company”) to increase their ownership of shares
of the common stock of the Company, and thereby align their interest in the
long-term success of the Company with that of the other stockholders of the
Company.  This will be accomplished by
allowing each participating director to elect voluntarily to defer all or a
portion of his or her retainer and meeting fees into the right to receive
shares of common stock, par value $.0586 per share, of the Company (“Common
Stock”) at a later date pursuant to elections made by such director under this
Plan.


 


2.                                       Eligibility.  Each individual who is a member of the Board
(a “Director”) and who is not also an officer or other employee of the Company
or its subsidiaries is eligible to participate in this Plan (an “Eligible
Director”).


 


3.                                       Administration.  This Plan will be administered by the
Compensation Committee of the Board (the “Committee”), which is composed solely
of two or more Nonemployee Directors (as defined in Rule 16b-3 promulgated
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).  All questions of interpretation of this Plan
will be determined by the Committee, and each determination, interpretation or
other action that the Committee makes or takes pursuant to the provisions of
this Plan will be conclusive and binding for all purposes and on all
persons.  The Committee will not be
liable for any action or determination made in good faith with respect to this
Plan.


 


4.                                       Election
to Defer Receipt of Retainer and Fees.


 


4.1.                              Election
to Defer Cash Compensation.  Each
Eligible Director who decides to participate in this Plan (a “Participating
Director”) may irrevocably elect to defer receipt of cash equal to 25%, 50%,
75% or 100% of the annual cash retainer (“Retainer”) payable to that Director
for services to be rendered as a Director in the “Plan Year” (as defined below)
following such election and 25%, 50%, 75% or 100% of the meeting fees payable
for attendance at Board meetings or meetings of Committees of the Board (“Meeting
Fees”) otherwise payable to such Director for services performed after the
effective date of the Deferral Election (as defined in Section 4.2).  As of the date of adoption of this Plan,
Eligible Directors are customarily paid the Retainer one-half on February 1
and one-half on August 1 of each year, and Meeting Fees are paid on the
day of the meeting.  As used herein, “Plan
Year” means the 12-month period which runs from January 1 through December 31.  Each deferral represents a voluntary election
to forego the receipt of Retainer and/or Meeting Fees in return for the right
to receive shares of Common Stock at a later date (such right being referred to
as a “Stock Unit”).  The amounts to be
deferred will be in the form of Stock Units credited to an account for the
Participating Director (a “Deferred Stock Account”).


 


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No shares of Common Stock will be issued to a Participating Director
until he or she receives a payment under the Plan pursuant to Section 6.


 


4.2.                              Manner
of Making Deferral Election.  A
Participating Director may elect to defer payment of Retainer and Meeting Fees
pursuant to this Plan by filing, no later than December 31 of each year
(or by such earlier date as the Committee shall determine), an irrevocable
election with the Committee on a form provided for that purpose (“Deferral
Election”).  The Deferral Election shall
be effective with respect to the Retainer and Meeting Fees otherwise payable
for services performed during the following Plan Year unless the Participating
Director shall revoke or change the election in accordance with the procedure
set forth in Section 4.6.  The
Deferral Election form shall specify an amount to be deferred expressed as a
percentage of the Participating Director’s Retainer and Meeting Fees.


 


4.3.                              Credits
to Deferred Stock Account for Deferrals. 
On the last business day of each calendar quarter of the Plan Year (the “Credit
Date”), a Participating Director shall receive a credit to his or her Deferred
Stock Account.  The amount credited shall
be in the form of Stock Units in a number equal to the number of shares of
Common Stock (rounded to the nearest one-hundredth of a share) determined by
dividing (i) the product of an amount equal to the Retainer and Meeting
Fees specified for deferral that would otherwise have been paid to the
Participating Director for the applicable calendar quarter multiplied by 105%
by (ii) the Fair Market Value of one share of Common Stock on the Credit
Date.


 


4.4.                              Dividend
Credit.  Each time a dividend is paid
on shares of Common Stock, the Participating Director shall receive a credit of
Stock Units to his or her Deferred Stock Account equal to either the number of
shares (if a stock dividend is paid) or that number of shares of Common Stock
(rounded to the nearest one-hundredth of a share) having a Fair Market Value on
the dividend payment date (if a cash dividend is paid) equal to the amount of
the dividend that would have been payable on the number of shares of Common
Stock equal to the number of Stock Units credited to the Participating Director’s
Deferred Stock Account on the dividend record date.


 


4.5.                              Fair
Market Value.  For purposes of
converting dollar amounts into shares of Common Stock, the Fair Market Value of
each share of Common Stock shall be equal to the closing price of one share of
the Company’s Common Stock on the New York Stock Exchange-Composite
Transactions (or such other principal stock exchange on which the Common Stock
may then be listed) on the last business day of the applicable calendar quarter
of the Plan Year for credits under Section 4 or the applicable payment
date pursuant to Section 6.


 


4.6.                              Change
in Election.  Prior to the first day
of the Plan Year for which a Deferral Election is to become effective, each
Participating Director may irrevocably elect in writing to change a Deferral
Election, either to change the percentage of such Director’s Retainer and
Meeting Fees to be deferred or to discontinue making deferrals and currently
receive the entire Retainer and Meeting Fees in cash (an “Amended Election”).  Once a Deferral Election becomes effective as
of the first day of a Plan Year, such election shall be irrevocable, and an
Amended Election may only be made with respect to Retainer and Meeting Fees
paid for services performed on or after the first day of the Plan Year
commencing after the date of receipt of such Amended Election by the Company.


 


5.                                       Shares
Available for Issuance.


 


5.1.                              Maximum
Number of Shares Available.  Subject
to adjustment pursuant to Section 5.2, the maximum number of shares of
Common Stock that shall be available for issuance under this Plan shall be
200,000.  Shares issuable under this Plan
may be either authorized but unissued shares, shares held in the treasury of
the Company or shares acquired on the open market or otherwise.


 


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5.2.                              Adjustments
to Shares.  In the event of any
reorganization, merger, consolidation, recapitalization, liquidation,
reclassification, stock dividend, stock split, combination of shares, rights
offering, divestiture or extraordinary dividend, an appropriate adjustment will
be made by the Committee in the number and/or kind of securities available for
issuance under this Plan to prevent either the dilution or the enlargement of
the rights of the Eligible Directors and Participating Directors.


 


6.                                       Deferral
Payment.


 


6.1.                              Deferral
Payment Election.  At the time of
making the Deferral Election, each Participating Director shall also complete a
deferral payment election specifying one of the payment options described in
Sections 6.2 and 6.3, and the year following his or her Separation from Service
(as that term is defined in Section 6.5 below) in which amounts credited
to the Participating Director’s Deferred Stock Account shall be paid in a lump
sum pursuant to Section 6.2, or in which installment payments shall
commence pursuant to Section 6.3. 
The deferral payment election shall be irrevocable as to all amounts
credited to the Participating Director’s Deferred Stock Account.  The Participating Director may change the
deferral payment election by means of a subsequent deferral payment election in
writing that will take effect for deferrals credited for Plan Years after the
date the Company receives such subsequent deferral payment election.


 


6.2.                              Payment
of Deferred Stock Accounts in a Lump Sum. 
Unless a Participating Director elects to receive payment of his or her
Deferred Stock Account in installments as described in Section 6.3,
credits to a Participating Director’s Deferred Stock Account shall be payable
in full on February 15 of the year following the Participating Director’s
Separation from Service (or the first business day thereafter) or such other
later date as elected by the Participating Director pursuant to Section 6.1.  All payments shall be made in shares of
Common Stock, with one share of Common Stock issued for each Stock Unit
credited to the Participating Director’s Deferred Stock Account, plus cash in
lieu of any fractional share.


 


6.3.                              Payment
of Deferred Stock Accounts in Installments. 
A Participating Director may elect to have his or her Deferred Stock
Account paid in annual installments commencing the year following Separation
from Service or commencing in a later year as elected by the Participating
Director pursuant to Section 6.1. 
All payments shall be made in shares of Common Stock, with one share of
Common Stock issued for each Stock Unit credited to the Participating Directors
Deferred Stock Account, plus cash in lieu of any fractional share.  All installment payments shall be made
annually on February 15 of each year (or the first business day
thereafter).  The amount of each
installment payment shall be computed as the number of shares credited to the
Participating Director’s Deferred Stock Account on the relevant installment
payment date, multiplied by a fraction, the numerator of which is one and the
denominator of which is the total number of installments elected (not to exceed
ten) minus the number of installments previously paid.  Amounts paid prior to the final installment
payment shall be rounded to the nearest whole number of shares; the final
installment payment shall be for the whole number of Stock Units then credited
to the Participating Director’s Deferred Stock Account, together with cash in
lieu of any fractional share.


 


6.4.                              Change
of Control.  Notwithstanding the
foregoing, in the event of a Participating Director’s Separation from Service
within six months following a Change of Control (as defined below), credits to
a Participating Director’s Deferred Stock Account shall be paid in a lump sum
(notwithstanding any prior election to the contrary) to the Participating
Director or the Participating Director’s beneficiary or estate, as the case may
be, in whole shares of Common Stock (together with cash in lieu of a fractional
share).  “Change of Control” means the
occurrence of a “change in the ownership of the Company,” “change in effective
control of the Company,” and/or a “change in the ownership of a substantial
portion of the Company’s assets” as defined under Treasury Regulation §
1.409A-3(i)(5).


 


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6.5.                              Separation
from Service.  For purposes of this Section 6,
a “Separation from Service” shall mean a complete severance of a Director’s
relationship as a director of the Company and all affiliates, if any, and as an
independent contractor of the Company and all affiliates, if any, for any
reason.   A Director may have a
Separation from Service upon resignation as a director even if the Director
then becomes an employee.   Separation
from Service shall be construed to have a meaning consistent with the term “separation
from service” as used and defined in Section 409A of the Internal Revenue
Code of 1986, as amended (the “Code”). 
If a Director is a “specified employee” (as that term is defined under Section 409A
of the Code), the any amount that becomes payable upon the Director’s
Separation from Service shall be made on the first day of the seventh month following
such Separation from Service.


 


7.                                       Limitation
on Rights of Eligible and Participating Directors.


 


7.1.                              Service
as a Director.  Nothing in this Plan
will interfere with or limit in any way the right of the Company’s Board or its
stockholders to remove an Eligible Director or Participating Director from the
Board.  Neither this Plan nor any action
taken pursuant to it will constitute or be evidence of any agreement or
understanding, express or implied, that the Company’s Board or its stockholders
have retained or will retain an Eligible Director or Participating Director for
any period of time or at any particular rate of compensation.


 


7.2.                              Nonexclusivity
of the Plan.  Nothing contained in
this Plan is intended to effect, modify or rescind any of the Company’s
existing compensation plans or programs or to create any limitations on the
Board’s power or authority to modify or adopt compensation arrangements as the
Board may from time to time deem necessary or desirable.


 


8.                                       Plan
Amendment, Modification and Termination. 
The Board may suspend or terminate this Plan at any time.  The Board may amend this Plan from time to
time in such respects as the Board may deem advisable in order that this Plan
will conform to any change in applicable laws or regulations or in any other
respect that the Board may deem to be in the Company’s best interests.  If there is a termination of the Plan with
respect to all Participants, the Board shall have the right, in its sole
discretion, and notwithstanding any elections made by the Participant, to amend
the Plan to immediately pay all benefits in a lump sum following such Plan
termination, to the extent permissible under Section 409A of the Code.


 


9.                                       Effective
Date and Duration of the Plan.  This
Plan shall become effective as of November 24, 2008, subject to approval
by the stockholders of the Company within six months thereafter, and will
continue until the earlier to occur of (i) the termination of the Plan by
Board or (ii) November 23, 2018.


 


10.                                 Participants
Are General Creditors of the Company. 
The Participating Directors and beneficiaries thereof shall be general,
unsecured creditors of the Company with respect to any payments to be made
pursuant to this Plan and shall not have any preferred interest by way of
trust, escrow, lien or otherwise in any specific assets of the Company.  Although the Company expects to set aside
monies or other assets to meet its obligations hereunder (there being no
obligation to do so), the same shall, nevertheless, be regarded as a part of
the general assets of the Company subject to the claims of its general
creditors, and neither any Participating Director nor any beneficiary thereof
shall have a legal, beneficial or security interest therein.


 


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11.                                 Miscellaneous.


 


11.1.                        Securities Law and Other
Restrictions.  Notwithstanding any
other provision of this Plan or any Deferral Election or Amended Election
delivered pursuant to this Plan, the Company will not be required to issue any
shares of Common Stock under this Plan and a Participating Director may not
sell, assign, transfer or otherwise dispose of shares of Common Stock issued
pursuant to this Plan, unless (a) there is in effect with respect to such
shares a registration statement under the Securities Act of 1933, as amended
(the “Securities Act”) and any applicable state securities laws or an exemption
from such registration under the Securities Act and applicable state securities
laws and (b) there has been obtained any other consent, approval or permit
from any other regulatory body that the Committee, in its sole discretion,
deems necessary or advisable.  The
Company may condition such issuance, sale or transfer upon the receipt of any
representations or agreements from the parties involved, and the placement of
any legends on certificates representing shares of Common Stock, as may be
deemed necessary or advisable by the Company, in order to comply with such
securities law or other restriction.


 


11.2.                        Governing Law.  The validity, construction, interpretation,
administration and effect of this Plan and any rules, regulations and actions
relating to this Plan will be governed by and construed exclusively in
accordance with the internal laws (without regard to conflict of laws
principles) of the State of Delaware.


 


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