Document:

EXHIBIT
10.7

 

HORMEL
FOODS CORPORATION

EXECUTIVE
DEFERRED INCOME PLAN II (2002 RESTATEMENT)

Master
Plan Document

 

 

Effective November 1, 2002

 

 

Copyright © 2002

Clark/Bardes Consulting, Inc.

Executive Benefits Practice

All Rights Reserved

 

 

TABLE
OF CONTENTS

 

	
  ARTICLE 1

  	
   

  	
  Definitions

  
	
   

  	
   

  	
   

  
	
  ARTICLE 2

  	
   

  	
  Selection, Enrollment,
  Eligibility

  
	
   

  	
   

  	
   

  
	
  2.1

  	
   

  	
  Selection
  by Committee

  
	
  2.2

  	
   

  	
  Enrollment
  Requirements

  
	
  2.3

  	
   

  	
  Eligibility;
  Commencement of Participation

  
	
  2.4

  	
   

  	
  Termination
  of Participation and/or Deferrals

  
	
   

  	
   

  	
   

  
	
  ARTICLE 3

  	
   

  	
  Deferral
  Commitments/Discretionary Contribution Amounts/Profit Sharing
  Amounts/Restricted Stock Amounts/Stock Option Gain
  Amounts/Vesting/Crediting/Taxes

  
	
   

  	
   

  	
   

  
	
  3.1

  	
   

  	
  Minimum
  Deferrals

  
	
  3.2

  	
   

  	
  Maximum
  Deferral

  
	
  3.3

  	
   

  	
  Election to
  Defer; Effect of Election Form

  
	
  3.4

  	
   

  	
  Withholding
  and Crediting of Annual Deferral Amounts

  
	
  3.5

  	
   

  	
  Annual Discretionary
  Contribution Amount

  
	
  3.6

  	
   

  	
  Annual Profit Sharing Amount

  
	
  3.7

  	
   

  	
  Annual Restricted Stock
  Amount

  
	
  3.8

  	
   

  	
  Annual Stock Option
  Gain Amount

  
	
  3.9

  	
   

  	
  Vesting

  
	
  3.10

  	
   

  	
  Crediting/Debiting
  of Account Balances

  
	
  3.11

  	
   

  	
  FICA
  and Other Taxes

  
	
   

  	
   

  	
   

  
	
  ARTICLE 4

  	
   

  	
  Deduction Limitation

  
	
   

  	
   

  	
   

  
	
  4.1

  	
   

  	
  Deduction
  Limitation on Benefit Payments

  
	
   

  	
   

  	
   

  
	
  ARTICLE 5

  	
   

  	
  In-Service Distribution;
  Unforeseeable Financial Emergencies; Withdrawal Election

  
	
   

  	
   

  	
   

  
	
  5.1

  	
   

  	
  In-Service
  Distribution

  
	
  5.2

  	
   

  	
  Other
  Benefits Take Precedence Over In-Service Distributions

  
	
  5.3

  	
   

  	
  Withdrawal
  Payout/Suspensions for Unforeseeable Financial Emergencies

  
	
  5.4

  	
   

  	
  Withdrawal
  Election

  
	
   

  	
   

  	
   

  
	
  ARTICLE 6

  	
   

  	
  Change In Control Benefit

  
	
   

  	
   

  	
   

  
	
  6.1

  	
   

  	
  Change in Control Benefit

  
	
  6.2

  	
   

  	
  Payment of Change
  in Control Benefit

  

 

i

 

	
  ARTICLE 7

  	
   

  	
  Retirement Benefit

  
	
   

  	
   

  	
   

  
	
  7.1

  	
   

  	
  Retirement
  Benefit

  
	
  7.2

  	
   

  	
  Payment of Retirement
  Benefit

  
	
   

  	
   

  	
   

  
	
  ARTICLE 8

  	
   

  	
  Termination Benefit

  
	
   

  	
   

  	
   

  
	
  8.1

  	
   

  	
  Termination
  Benefit

  
	
  8.2

  	
   

  	
  Payment of Termination
  Benefit

  
	
   

  	
   

  	
   

  
	
  ARTICLE 9

  	
   

  	
  Disability Waiver and
  Benefit

  
	
   

  	
   

  	
   

  
	
  9.1

  	
   

  	
  Disability
  Waiver

  
	
  9.2

  	
   

  	
  Continued
  Eligibility; Disability Benefit

  
	
   

  	
   

  	
   

  
	
  ARTICLE 10

  	
   

  	
  Survivor Benefit

  
	
   

  	
   

  	
   

  
	
  10.1

  	
   

  	
  Survivor
  Benefit

  
	
  10.2

  	
   

  	
  Payment of Survivor Benefit

  
	
   

  	
   

  	
   

  
	
  ARTICLE 11

  	
   

  	
  Forfeiture of Benefits

  
	
   

  	
   

  	
   

  
	
  11.1

  	
   

  	
  Forfeiture
  of Benefits

  
	
   

  	
   

  	
   

  
	
  ARTICLE 12

  	
   

  	
  Beneficiary Designation

  
	
   

  	
   

  	
   

  
	
  12.1

  	
   

  	
  Right to
  Designate

  
	
  12.2

  	
   

  	
  Failure
  of Designation

  
	
  12.3

  	
   

  	
  Disclaimers by
  Beneficiaries

  
	
  12.4

  	
   

  	
  Definitions

  
	
  12.5

  	
   

  	
  Special Rules

  
	
  12.6

  	
   

  	
  No Spousal
  Rights

  
	
  12.7

  	
   

  	
  Death Prior to Full
  Distribution

  
	
  12.8

  	
   

  	
  Discharge
  of Obligations

  
	
   

  	
   

  	
   

  
	
  ARTICLE 13

  	
   

  	
  Leave of Absence

  
	
   

  	
   

  	
   

  
	
  13.1

  	
   

  	
  Paid
  Leave of Absence

  
	
  13.2

  	
   

  	
  Unpaid
  Leave of Absence

  
	
   

  	
   

  	
   

  
	
  ARTICLE 14

  	
   

  	
  Termination, Amendment or
  Modification

  
	
   

  	
   

  	
   

  
	
  14.1

  	
   

  	
  Termination

  
	
  14.2

  	
   

  	
  Amendment

  
	
  14.3

  	
   

  	
  Plan Agreement

  
	
  14.4

  	
   

  	
  Effect of
  Payment

  

 

ii

 

	
  ARTICLE 15

  	
   

  	
  Administration

  
	
   

  	
   

  	
   

  
	
  15.1

  	
   

  	
  Committee
  Duties

  
	
  15.2

  	
   

  	
  Administration
  Upon Change In Control

  
	
  15.3

  	
   

  	
  Agents

  
	
  15.4

  	
   

  	
  Binding Effect of Decisions

  
	
  15.5

  	
   

  	
  Indemnity
  of Committee

  
	
  15.6

  	
   

  	
  Employer
  Information

  
	
   

  	
   

  	
   

  
	
  ARTICLE 16

  	
   

  	
  Other Benefits and
  Agreements

  
	
   

  	
   

  	
   

  
	
  16.1

  	
   

  	
  Coordination with
  Other Benefits

  
	
   

  	
   

  	
   

  
	
  ARTICLE 17

  	
   

  	
  Claims Procedures

  
	
   

  	
   

  	
   

  
	
  17.1

  	
   

  	
  Presentation
  of Claim

  
	
  17.2

  	
   

  	
  Notification
  of Decision

  
	
  17.3

  	
   

  	
  Review
  of a Denied Claim

  
	
  17.4

  	
   

  	
  Decision on
  Review

  
	
  17.5

  	
   

  	
  Legal Action

  
	
   

  	
   

  	
   

  
	
  ARTICLE 18

  	
   

  	
  Trust

  
	
   

  	
   

  	
   

  
	
  18.1

  	
   

  	
  Establishment of the Trust

  
	
  18.2

  	
   

  	
  Interrelationship
  of the Plan and the Trust

  
	
  18.3

  	
   

  	
  Distributions From the
  Trust

  
	
   

  	
   

  	
   

  
	
  ARTICLE 19

  	
   

  	
  Miscellaneous

  
	
   

  	
   

  	
   

  
	
  19.1

  	
   

  	
  Status of Plan

  
	
  19.2

  	
   

  	
  Unsecured General Creditor

  
	
  19.3

  	
   

  	
  Employer’s
  Liability

  
	
  19.4

  	
   

  	
  Nonassignability

  
	
  19.5

  	
   

  	
  Not a Contract of
  Employment

  
	
  19.6

  	
   

  	
  Furnishing
  Information

  
	
  19.7

  	
   

  	
  Terms

  
	
  19.8

  	
   

  	
  Captions

  
	
  19.9

  	
   

  	
  Governing Law

  
	
  19.10

  	
   

  	
  Notice

  
	
  19.11

  	
   

  	
  Successors

  
	
  19.12

  	
   

  	
  Spouse’s
  Interest

  
	
  19.13

  	
   

  	
  Validity

  
	
  19.14

  	
   

  	
  Incompetent

  

 

iii

 

	
  19.15

  	
   

  	
  Court Order

  
	
  19.16

  	
   

  	
  Distribution in
  the Event of Taxation

  
	
  19.17

  	
   

  	
  Insurance

  
	
  19.18

  	
   

  	
  Legal
  Fees To Enforce Rights After Change in Control

  

 

iv

 

HORMEL FOODS CORPORATION

EXECUTIVE DEFERRED INCOME PLAN II

(2002 Restatement)

Effective November 1,
2002

 

 

Purpose

 

The purpose of this Plan is to provide specified
benefits to a select group of management or highly compensated Employees who
contribute materially to the continued growth, development and future business
success of Hormel Foods Corporation, a Delaware corporation, and its Affiliates
and/or subsidiaries, if any, that sponsor this Plan.  This Plan shall be administered and construed so that it is
unfunded for tax purposes and for purposes of Title I of ERISA.

 

ARTICLE
1

Definitions

 

For the purposes of this Plan, unless otherwise
clearly apparent from the context, the following phrases or terms shall have
the following indicated meanings:

 

1.1                                 “Account
Balance” shall mean, with respect to a Participant, a credit on the records of
the Employer equal to the sum of (i) the Deferral Account balance, (ii)
the Discretionary Contribution Account balance, (iii) the Profit Sharing
Account balance, (iv) the Restricted Stock Account balance, and (v) the Stock
Option Gain Account balance.  The
Account Balance, and each other specified account balance, shall be a
bookkeeping entry only and shall be utilized solely as a device for the
measurement and determination of the amounts to be paid to a Participant, or
his or her designated Beneficiary, pursuant to this Plan.

 

1.2                                 “Affiliate”
shall mean a business entity which is affiliated in ownership with the
Principal Sponsor or an Employer and is recognized as an Affiliate by the
Principal Sponsor for the purposes of this Plan.

 

1.3                                 “Annual
Deferral Amount” shall mean that portion of a Participant’s Base Annual Salary,
Bonus, LTIP Amounts and Operator Share Dividends that a Participant defers in
accordance with Article 3 for any one Plan Year.  In the event of a Participant’s Retirement, Disability (if
deferrals cease in accordance with Section 9.1), death or a Termination of
Employment prior to the end of a Plan Year, such year’s Annual Deferral Amount
shall be the actual amount withheld prior to such event.

 

1.4                                 “Annual
Discretionary Contribution Amount” shall mean, for any one Plan Year, the
amount determined in accordance with Section 3.5.

 

1.5                                 “Annual
Installment Method” shall be an annual installment payment over the number of
years selected by the Participant  in accordance with this Plan, calculated
as follows: (i) for the first annual installment, the portion of the
Participant’s vested Account Balance that has been automatically allocated to
the Hormel Foods Corporation Stock Unit Measurement Fund shall be calculated as
of the close of business on or around  the Participant’s Benefit Distribution
Date, as
determined by the Committee in its sole discretion,  and (ii) for remaining
annual installments, the

 

1

 

portion of the Participant’s vested Account Balance
that has been automatically allocated to the Hormel Foods Corporation Stock
Unit Measurement Fund shall be calculated on every applicable anniversary of
the Participant’s Benefit Distribution Date. 
Each annual installment shall be calculated by multiplying this balance
by a fraction, the numerator of which is one and the denominator of which is
the remaining number of annual payments due the Participant.  By way of example, if the Participant elects
a ten (10) year Annual Installment Method, the first payment shall be 1/10 of
the portion of the Participant’s vested Account Balance that has been
automatically allocated to the Hormel Foods Corporation Stock Unit Measurement
Fund, calculated as described in this definition.  The following year, the payment shall be 1/9 of the portion of
the Participant’s vested Account Balance that has been automatically allocated
to the Hormel Foods Corporation Stock Unit Measurement Fund, calculated as
described in this definition.  Shares of
Stock that shall be distributable from the Stock Option Gain Account and the
Restricted Stock Account shall be distributable in shares of actual Stock in
the same manner previously described. 
However, the Committee may, in its sole discretion, (i) adjust the
annual installments in order to distribute whole shares of actual Stock and/or
(ii) accelerate the distribution of such actual shares of Stock by payment of a
lump sum.

 

1.6                                 “Annual
Profit Sharing Amount” for any one Plan Year shall be the amount determined in
accordance with Section 3.6.

 

1.7                                 “Annual
Restricted Stock Amount” shall mean, with respect to a Participant for any one
Plan Year, the number of shares of Restricted Stock deferred in accordance with
Section 3.7 of this Plan, calculated using the closing price of Stock at the
end of the business day closest to the date such Restricted Stock would
otherwise vest, but for the election to defer. 
In the event of a Participant’s Retirement, Disability (if deferrals
cease in accordance with Section 9.1), death or a Termination of Employment prior
to the end of a Plan Year, such year’s Annual Restricted Stock Amount shall be
the actual amount withheld prior to such event.

 

1.8                                 “Annual
Stock Option Gain Amount” shall mean, with respect to a Participant for any one
Plan Year, the portion of Qualifying Gains deferred with respect to an Eligible
Stock Option exercise, in accordance with Section 3.8 of this Plan.  In the event of a Participant’s Retirement,
Disability (if deferrals cease in accordance with Section 9.1), death or a
Termination of Employment prior to the end of a Plan Year, such year’s Annual
Stock Option Gain Amount shall be the actual amount withheld prior to such
event.

 

1.9                                 “Base
Annual Salary” shall mean the annual cash compensation relating to services
performed during any calendar year, excluding operator share dividends,
bonuses, commissions, overtime, fringe benefits, stock options, relocation
expenses, incentive payments, non-monetary awards, director fees and other
fees, and automobile and other allowances paid to a Participant for employment
services rendered (whether or not such allowances are included in the
Employee’s gross income).  Base Annual
Salary shall be calculated before reduction for compensation voluntarily
deferred or contributed by the Participant pursuant to all qualified or non–qualified
plans of any Employer and shall be calculated to include amounts not otherwise
included in the Participant’s gross income under Code Sections 125, 402(e)(3),
402(h), or 403(b) pursuant to plans established by any Employer; provided,
however, that all such amounts will be included in

 

2

 

compensation only to the extent that had there been no
such plan, the amount would have been payable in cash to the Employee.

 

1.10                           “Beneficiary”
shall mean one or more persons, trusts, estates or other entities, designated
in accordance with Article 12, that are entitled to receive benefits under
this Plan upon the death of a Participant.

 

1.11                           “Beneficiary
Designation Form” shall mean the form established from time to time by the
Committee that a Participant completes, signs and returns to the Committee to
designate one or more Beneficiaries.

 

1.12                           “Benefit
Distribution Date” shall mean the date selected, in advance, by a Participant
which triggers distribution of such Participant’s Account Balance.  A Participant may elect to have his or her
Benefit Distribution Date triggered upon the occurrence of any one of the
following:

 

(a)                                  The
date on which the Participant Retires or experiences a Termination of
Employment; or

 

(b)                                 The
January 1 immediately following the date on which the Participant Retires or
experiences a Termination of Employment; or

 

(c)                                  The
later of (i) the date on which the Participant Retires or experiences a
Termination of Employment or (ii) the Participant’s attainment of an age
specified by the Participant (which cannot be later than age 65); or

 

(d)                                 The
January 1 immediately following the later of (i) the date on which the
Participant Retires or experiences a Termination of Employment or (ii) the
Participant’s attainment of an age specified by the Participant (which cannot
be later than age 65).

 

1.13                           “Board”
shall mean the board of directors of the Principal Sponsor.

 

1.14                           “Bonus”
shall mean any compensation, in addition to Base Annual Salary, LTIP Amounts
and Operator Share Dividends, payable to a Participant during a Plan Year,
under the Hormel Foods Corporation Operator Share Incentive Compensation Plan
or any other bonus and cash incentive plans, excluding stock options.

 

1.15                           “Change
in Control” shall mean any of the following events or transactions:

 

(a)                                  A
change in control of a nature that would be required to be reported in response
to Item 6(e) of Schedule 14A of Regulation 14A promulgated under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), whether or not the
Principal Sponsor is then subject to such reporting requirement.

 

(b)                                 The
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the Exchange
Act) by the Principal Sponsor or any “person” (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) that such person has become the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of securities of the Principal Sponsor:

 

3

 

(i)                                     Representing
twenty percent (20%) or more of the combined voting power of the Principal
Sponsor’s then outstanding securities unless the transaction resulting in such
ownership has been approved in advance by the “Continuing Directors” (as
hereinafter defined), or

 

(ii)                                  Representing
more than fifty percent (50%) of the combined voting power of the Principal
Sponsor’s then outstanding securities (regardless of any approval by the
Continuing Directors).

 

Provided, however, that notwithstanding the foregoing,
no Change in Control shall be deemed to have occurred by reason of the
ownership of twenty percent (20%) or more of the total voting capital stock of
the Principal Sponsor then issued and outstanding by:

 

(iii)                               The
Principal Sponsor, any subsidiary of the Principal Sponsor or any employee
benefit plan of the Principal Sponsor or of any subsidiary of the Principal
Sponsor or any entity holding shares of the Stock organized, appointed or
established for, or pursuant to the terms of, any such plan (any such person or
entity described in this clause is referred to herein as a “Principal Sponsor
Entity”), or

 

(iv)                              The
Hormel Foundation.

 

(c)                                  The
announcement of a tender offer by any person or entity (other than a Principal
Sponsor Entity) for twenty percent (20%) or more of the Principal Sponsor’s
voting capital stock then issued and outstanding, which tender offer has not
been approved by the Board, a majority of the members of which are the
Continuing Directors, and recommended to the stockholders of the Principal
Sponsor.

 

(d)                                 The
Continuing Directors cease to constitute a majority of the Principal Sponsor’s
Board of Directors.

 

(e)                                  The
stockholders of the Principal Sponsor approve:

 

(i)                                     Any
consolidation or merger of the Principal Sponsor in which the Principal Sponsor
is not the continuing or surviving Principal Sponsor or pursuant to which
shares of Principal Sponsor stock would be converted to cash, securities or
other property, other than a merger of the Principal Sponsor in which the
stockholders immediately prior to the merger have the same proportionate
ownership of stock of the surviving Principal Sponsor immediately after the merger;
or

 

(ii)                                  Any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all or substantially all of the assets of the
Principal Sponsor; or

 

(iii)                               Any
plan of liquidation or dissolution of the Principal Sponsor.

 

For purposes of this definition:

 

(i)                                     “Continuing
Director” shall mean any person who is a member of the Board of Directors of
the Principal Sponsor, while such person is a member of the Board of Directors,
who is not an “Acquiring Person” (as defined below) or an “Affiliate” or
“Associate” (each term as defined below) of an Acquiring Person, or a 

 

4

 

representative of an Acquiring Person or of any such
Affiliate or Associate, and who

 

a)                                      was
a member of the Board of Directors on the date of this Plan as first written
above or

 

b)                                     subsequently
becomes a member of the Board of Directors,

 

if such person’s initial nomination for election or
initial election to the Board of Directors is recommended or approved by a
majority of the Continuing Directors.

 

(ii)                                  “Acquiring
Person” shall mean any “person” (as such term is used in Sections 13(d) and
14(d) of the Exchange Act) who or which, together with all Affiliates and
Associates of such person, is the “beneficial owner” (as defined in Rule
13(d)-3 promulgated under the Exchange Act), directly or indirectly, of
securities of the Principal Sponsor representing twenty percent (20%) or more
of the combined voting power of the Principal Sponsor’s then outstanding securities,
but shall not include the Hormel Foundation or any Principal Sponsor Entity.

 

(iii)                               “Affiliate”
and “Associate” shall have their respective meanings ascribed to such terms in
Rule 12b-2 promulgated under the Exchange Act.

 

1.16                           “Change
in Control Benefit” shall have the meaning set forth in Article 6.

 

1.17                           “Claimant”
shall have the meaning set forth in Section 17.1.

 

1.18                           “Code”
shall mean the Internal Revenue Code of 1986, as it may be amended from time to
time.

 

1.19                           “Committee”
shall mean the committee described in Article 15.

 

1.20                           “Crediting
Rate” shall mean, for each Plan Year, an interest rate that is 120% of the
applicable federal long-term rate, as determined by the Compensation Committee
of the Board, in its sole discretion, and communicated to Participants, prior
to the beginning of each Plan Year.

 

1.21                           “Deduction
Limitation” shall mean the limitation on a benefit that may otherwise be
distributable pursuant to the provisions of this Plan, as set forth in Article
4.

 

1.22                           “Deferral
Account” shall mean (i) the sum of all of a Participant’s Annual Deferral
Amounts, plus (ii) amounts credited in accordance with all the applicable
crediting and debiting provisions of this Plan that relate to the Participant’s
Deferral Account, less (iii) all distributions made to the Participant or his
or her Beneficiary pursuant to this Plan that relate to his or her Deferral
Account.

 

1.23                           “Disability”
or “Disabled” shall mean a determination that a Participant is disabled made by
either (i) the carrier of any individual or group disability insurance policy,
sponsored by the Participant’s Employer, or (ii) the Social Security
Administration.  Upon request by the
Employer, the Participant must submit proof of the carrier’s or Social Security
Administration’s determination.

 

1.24                           “Disability
Benefit” shall mean the benefit set forth in Article 9.

 

1.25                           “Discretionary
Contribution Account” shall mean (i) the sum of the Participant’s Annual
Discretionary Contribution Amounts, plus (ii) amounts credited or debited in
accordance with all

 

5

 

the applicable crediting and debiting provisions of
this Plan that relate to the Participant’s Discretionary Contribution Account,
less (iii) all distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to the Participant’s Discretionary
Contribution Account.

 

1.26                           “Election
Form” shall mean the form established from time to time by the Committee that a
Participant completes, signs and returns to the Committee to make an election
under the Plan.

 

1.27                           “Eligible
Stock Option” shall mean one or more non-qualified stock option(s) selected by
the Committee in its sole discretion and exercisable under a plan or
arrangement of Hormel Foods Corporation or any Employer permitting a
Participant under this Plan to defer gain with respect to such option.

 

1.28                           “Employee”
shall mean a person who is an employee of any Employer.

 

1.29                           “Employer(s)”
shall mean the Principal Sponsor and/or any of its Affiliates and/or
subsidiaries (now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the Plan as a
sponsor.

 

1.30                           “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as it may be
amended from time to time.

 

1.31                           “In-Service
Distribution” shall mean the distribution set forth in Section 5.1.

 

1.32                           “Installment
Method” shall mean a series of payments, payable either monthly or annually,
over the number of years selected by the Participant.  The portion of the Participant’s vested Account Balance that has
been automatically allocated to the Hormel Foods Corporation Stock Unit Fund
shall be payable pursuant to an Annual Installment Method over the number of
years selected by the Participant in accordance with this Plan.  The Participant’s vested Account Balance,
excluding the portion that has been automatically allocated to the Hormel Foods
Corporation Stock Unit Fund, shall be payable pursuant to a Monthly Installment
Method over the number of years selected by the Participant in accordance with
this Plan.

 

1.33                           “LTIP
Amounts” shall mean any compensation payable to a Participant as an Employee
under any Employer’s long-term incentive plan or any other long-term incentive
arrangement designated by the Committee which is eligible for deferral in
accordance with Article 3, and includes payments made under the Hormel Foods
Corporation Long Term Incentive Plan.

 

1.34                           “Monthly
Installment Method” shall be a monthly installment payment over the number of
years selected by the Participant in accordance with this Plan, calculated as
follows: (i) for the first monthly installment, the Participant’s vested
Account Balance, excluding the portion of the Account Balance attributable to
the Restricted Stock Account and the Stock Option Gain Account, shall be
calculated as of the close of business on or around the Participant’s Benefit
Distribution Date, as determined by the Committee in its sole discretion, and
(ii) for remaining monthly installments, the Participant’s vested Account
Balance, excluding the portion of the Account Balance attributable to the
Restricted Stock Account and the Stock Option Gain Account, shall be calculated
as of the close of business on or around on the last business day of the
preceding month, as determined by the Committee in its sole discretion.  Each monthly installment shall be calculated
by multiplying this balance by a fraction, the numerator of which

 

6

 

is one and the denominator of which is the remaining
number of monthly payments due the Participant.  By way of example, if the Participant elects a ten (10) year
Monthly Installment Method, the first payment shall be 1/120 of the
Participant’s vested Account Balance, excluding the portion of the Account
Balance attributable to the Restricted Stock Account and the Stock Option Gain
Account, calculated as described in this definition.  The following month, the payment shall be 1/119 of the
Participant’s vested Account Balance, excluding the portion of the Account
Balance attributable to the Restricted Stock Account and the Stock Option Gain
Account, calculated as described in this definition.

 

1.35                           “Operator
Share Dividends” shall mean any quarterly dividends payable to a Participant in
cash during a Plan Year under the Hormel Foods Corporation Operator Share
Incentive Compensation Plan.

 

1.36                           “Participant”
shall mean any Employee (i) who is selected to participate in the Plan,
(ii) who elects to participate in the Plan, (iii) who signs a Plan
Agreement and an Election Form, (iv) whose signed Plan Agreement and
Election Form are accepted by the Committee, (v) who commences
participation in the Plan, and (vi) whose Plan Agreement has not terminated.  A spouse or former spouse of a Participant
shall not be treated as a Participant in the Plan or have an account balance
under the Plan, even if he or she has an interest in the Participant’s benefits
under the Plan as a result of applicable law or property settlements resulting
from legal separation or divorce.

 

1.37                           “Plan”
shall mean the Hormel Foods Corporation Executive Deferred Income Plan II (2002
Restatement), which shall be evidenced by this instrument and by each Plan
Agreement, as they may be amended from time to time.

 

1.38                           “Plan
Agreement” shall mean a written agreement, as may be amended from time to time,
which is entered into by and between an Employer and a Participant.  Each Plan Agreement executed by a
Participant and the Participant’s Employer shall provide for the entire benefit
to which such Participant is entitled under the Plan; should there be more than
one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by
the Employer shall supersede all previous Plan Agreements in their entirety and
shall govern such entitlement.  The
terms of any Plan Agreement may be different for any Participant, and any Plan
Agreement may provide additional benefits not set forth in the Plan or limit
the benefits otherwise provided under the Plan; provided, however, that any
such additional benefits or benefit limitations must be agreed to by both the
Employer and the Participant.

 

1.39                           “Plan
Year” shall mean a period beginning on January 1 of each year and continuing
through December 31 of such year.

 

1.40                           “Principal
Sponsor” shall mean Hormel Foods Corporation, a Delaware corporation, and any
successor to all or substantially all of the Hormel Foods Corporation’s assets
or business.

 

1.41                           “Profit
Sharing Account” shall mean (i) the sum of all of a Participant’s Annual Profit
Sharing Amounts, plus (ii) amounts credited in accordance with all the
applicable crediting and debiting provisions of this Plan that relate to the
Participant’s Profit Sharing Account, less (iii) all distributions made to the
Participant or his or her Beneficiary pursuant to this Plan that relate to the
Participant’s Profit Sharing Account.

 

7

 

1.42                           “Profit
Sharing Plan” shall mean the Hormel Foods Corporation Joint Earnings Profit
Sharing Trust Plan.

 

1.43                           “Qualifying
Gain” shall mean the incremental value inuring to a Participant upon the
exercise of an Eligible Stock Option, using a Stock-for-Stock payment method,
during any Plan Year.  For purposes of
this section, the phrase “Stock-for-Stock payment method” shall, in all events,
be limited to the Participant’s delivery of a properly executed statement in
which he or she attests to ownership of the number of shares required to
exercise the Eligible Stock Option, rather than actual delivery of such
shares.  Such incremental value shall be
deliverable to the Participant in the form of additional shares of Stock and
shall be computed as follows: (i) the total fair market value of the shares of
Stock held/acquired as a result of the exercise of an Eligible Stock Option
using a Stock-for-Stock payment method, minus (ii) the total exercise
price.  For example, assume a
Participant elects to exercise an Eligible Stock Option to purchase 1,000
shares of Stock at an exercise price of $20 per share (i.e., a total exercise
price of $20,000), when the Stock has a current fair market value of $25 per
share (i.e., a total current fair market value of $25,000) and elects to defer
one hundred (100) percent of the Qualifying Gain (i.e., $5,000).  Using the Stock-for-Stock payment method,
the Participant would deliver a properly executed statement attesting to
ownership of 800 shares of Stock (worth $20,000 at exercise) to exercise the
Eligible Stock Option and would receive, in return, 800 shares of Stock (worth
$20,000 at exercise) plus a Qualifying Gain, in the form of an unfunded and
unsecured promise by the Principal Sponsor for 200 additional shares of Stock
in the future (worth $5,000 at exercise). 
The number of additional shares of Stock deliverable to the Participant
in the future as a result of the Qualifying Gain shall be fixed and determined
as of the date of the exercise of the Eligible Stock Option using the closing
price of the Stock as of the end of the business day closest to the date of such
exercise.

 

1.44                           “Restricted
Stock” shall mean rights to receive unvested shares of restricted stock
selected by the Committee in its sole discretion and awarded to the Participant
under any Hormel Foods Corporation stock incentive plan.

 

1.45                           “Restricted
Stock Account” shall mean the aggregate value, measured on any given date, of
(i) the number of shares of Restricted Stock deferred by a Participant as a
result of all Annual Restricted Stock Amounts, plus (ii) the number of
additional shares credited as a result of the deemed reinvestment of dividends
in accordance with all of the applicable crediting provisions of the Hormel
Foods Corporation Stock Unit Measurement Fund that relate to the Participant’s
Restricted Stock Account, less (iii) the number of shares of Restricted Stock
previously distributed to the Participant or his or her Beneficiary pursuant to
this Plan, subject in each case to any adjustments to the number of such shares
determined by the Committee with respect to the Hormel Foods Corporation  Stock
Unit Measurement Fund pursuant to Section 3.10.  This portion of the Participant’s Account Balance shall only be
distributable in actual shares of Stock.

 

1.46                           “Retirement”,
“Retire(s)” or “Retired” shall mean, with respect to an Employee, severance
from employment from all Employers on or after the earlier of the attainment of
age sixty-five (65) or (b) age fifty-five (55) with fifteen (15) Years of
Service for any reason other than a leave of absence, death or Disability.

 

1.47                           “Retirement
Benefit” shall mean the benefit set forth in Article 7.

 

8

 

1.48                           
“Stock” shall mean Hormel Foods Corporation common stock, $0.01 par value, or
any other equity securities of the Principal Sponsor designated by the Committee.

 

1.49                           “Stock
Option Gain Account” shall mean the aggregate value, measured on any given
date, of (i) the number of shares of Stock deferred by a Participant as a
result of all Annual Stock Option Gain Amounts, plus (ii) the number of
additional shares credited as a result of the deemed reinvestment of dividends
in accordance with all of the applicable crediting provisions of the Hormel
Foods Corporation Stock Unit Measurement Fund that relate to the Participant’s
Stock Option Gain Account, less (iii) the number of such shares of Stock
previously distributed to the Participant or his or her Beneficiary pursuant to
this Plan, subject in each case to any adjustments to the number of such shares
determined by the Committee with respect to the Hormel Foods Corporation  Stock
Unit Measurement Fund pursuant to Section 3.10.  This portion of the Participant’s Account Balance shall only be
distributable in actual shares of Stock.

 

1.50                           “Survivor
Benefit” shall mean the benefit set forth in Article 10.

 

1.51                           “Termination
Benefit” shall mean the benefit set forth in Article 8.

 

1.52                           “Termination
of Employment” shall mean the severing of employment with all Employers,
voluntarily or involun­tarily, for any reason other than Retirement,
Disability, death or an authorized leave of absence.  A transfer of employment with an Employer to employment with an
Affiliate of an Employer shall not constitute a Termination of Employment.  If an Employer who is an Affiliate (i.e.,
not the Principal Sponsor) ceases to be an Affiliate because of a sale of
substantially all the stock or assets of that Employer, then Participants who
are employed by that Employer and who cease to be employed by that Employer in
connection with the sale of substantially all the stock or assets of that
Employer shall be deemed to have thereby had a Termination of Employment for
the purposes of commencing distributions from this Plan.

 

1.53                           “Trust”
shall mean one or more trusts established pursuant to that certain Master Trust
Agreement, dated as of                ,
2002 between the Principal Sponsor and the trustee named therein, as amended
from time to time.

 

1.54                           “Unforeseeable
Financial Emergency” shall mean an unanticipated emergency that is caused by an
event beyond the control of the Participant that would result in severe
financial hardship to the Participant resulting from (i) a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, (ii) a loss of the Participant’s property due to casualty, or
(iii) such other extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant, all as determined in
the sole discretion of the Committee.

 

1.55                           “Years
of Service” shall mean the total number of full years in which a Participant
has been employed by one or more Employers. 
For purposes of this definition, a year of employment shall be a 365 day
period (or 366 day period in the case of a leap year) that, for the first year
of employment, commences on the Employee’s date of hiring and that, for any
subsequent year, commences on an anniversary of that hiring date.  The Committee shall make a determination as
to whether any partial year of employment shall be counted as a Year of Service.

 

9

 

ARTICLE
2

Selection, Enrollment, Eligibility

 

2.1                                 Selection by Committee.  Participation in the Plan shall be limited
to a select group of management and highly compensated Employees of the
Employer, as determined by the Committee in its sole discretion.  From that group, the Committee shall select,
in its sole discretion, Employees to participate in the Plan.

 

2.2                                 Enrollment Requirements.  As a condition to participation, each
selected Employee shall complete, execute and return to the Committee a Plan
Agreement and an Election Form, within thirty (30) days after he or she is
selected to participate in the Plan.  In
addition, the Committee shall establish from time to time such other enrollment
requirements as it determines in its sole discretion are necessary.

 

2.3                                 Eligibility; Commencement of Participation.  Provided an Employee selected to participate
in the Plan has met all enrollment requirements set forth in this Plan and
required by the Committee, including returning all required documents to the
Committee within the specified time period, that Employee shall commence
participation in the Plan on the first day of the month following the month in
which the Employee completes all enrollment requirements.  If an Employee fails to meet all such
requirements within the period required, in accordance with Section 2.2, that
Employee shall not be eligible to participate in the Plan until the first day
of the Plan Year following the delivery to and acceptance by the Committee of
the required documents.

 

2.4                                 Termination of Participation and/or Deferrals.  If the Committee determines in good faith
that a Participant no longer qualifies as a member of a select group of
management or highly compensated employees, as membership in such group is determined
in accordance with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the
Committee shall have the right, in its sole discretion, to (i) terminate
any deferral election the Participant has made for the remainder of the Plan
Year in which the Participant’s membership status changes, (ii) prevent
the Participant from making future deferral elections and/or
(iii) immediately distribute the Participant’s then vested Account Balance
as a Termination Benefit and terminate the Participant’s participation in the
Plan.

 

ARTICLE
3

Deferral Commitments/Discretionary Contribution Amounts/Profit Sharing
Amounts/Restricted

Stock Amounts/Stock Option Gain Amounts/Vesting/Crediting/Taxes

 

3.1                                 Minimum Deferrals.

 

(a)                                  Base
Annual Salary, Bonus, LTIP Amounts and Operator Share Dividends.  For each Plan Year, a Participant may elect
to defer, as his or her Annual Deferral Amount, Base Annual Salary, Bonus, LTIP
Amounts and/or Operator Share Dividends in the following minimum amounts for
each deferral elected:

 

10

 

	
  Deferral

  	
   

  	
  Minimum
  Amount

  	
   

  
	
  Base Annual
  Salary

  	
   

  	
  $

  	
  0

  	
   

  
	
  Bonus

  	
   

  	
  $

  	
  2,000

  	
   

  
	
  LTIP Amounts

  	
   

  	
  $

  	
  2,000

  	
   

  
	
  Operator Share
  Dividends

  	
   

  	
  $

  	
  0

  	
   

  

 

If an election is made for less than the stated
minimum amounts, or if no election is made, the amount deferred shall be zero.

 

(b)                                 Annual
Restricted Stock Amount. 
For each grant of Restricted Stock, a Participant may elect to defer, as
his or her Annual Restricted Stock Amount, Restricted Stock in the following
minimum amount:

 

	
  Deferral

  	
   

  	
  Minimum
  Amount

  	
   

  
	
  Restricted
  Stock

  	
   

  	
  $

  	
  5,000

  	
   

  
					

 

If an election is made
for less than the stated minimum amounts, or if no election is made, the amount
deferred shall be zero.

 

(c)                                  Annual
Stock Option Gain Amount. 
For each Eligible Stock Option, a Participant may elect to defer, as his
or her Annual Stock Option Gain Amount, the following minimum Amount of
Qualifying Gain with respect to exercise of the Eligible Stock Option:

 

	
  Deferral

  	
   

  	
  Minimum
  Amount

  	
   

  
	
  Qualifying Gain

  	
   

  	
  $

  	
  0

  	
   

  
					

 

If no election is made,
the amount deferred shall be zero.

 

(d)                                 Short
Plan Year. 
Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year,  the minimum Annual Deferral
Amount shall be an amount equal to the minimum set forth above, multiplied by a
fraction, the numerator of which is the number of complete months remaining in
the Plan Year and the denominator of which is 12.

 

3.2                                 Maximum Deferral.

 

(a)                                  Base
Annual Salary, Bonus, LTIP Amounts and Operator Share Dividends.  For each Plan Year, a Participant may elect
to defer, as his or her Annual Deferral Amount, Base Annual Salary, Bonus, LTIP
Amounts and/or Operator Share Dividends up to the following maximum percentages
for each deferral elected:

 

	
  Deferral

  	
   

  	
  Maximum
  Amount

  	
   

  
	
  Base Annual
  Salary

  	
   

  	
  40

  	
  %

  
	
  Bonus

  	
   

  	
  100

  	
  %

  
	
  LTIP Amounts

  	
   

  	
  100

  	
  %

  
	
  Operator Share
  Dividends

  	
   

  	
  40

  	
  %

  

 

11

 

(b)                                 Annual
Restricted Stock Amount. For each Plan Year, a Participant may
elect to defer, as his or her Annual Restricted Stock Amount, Restricted Stock
in the following maximum percentage:

 

	
  Deferral

  	
   

  	
  Maximum
  Amount

  	
   

  
	
  Restricted Stock

  	
   

  	
  100

  	
  %

  

 

(c)                                  Annual
Stock Option Gain Amount. 
For each Eligible Stock Option, a Participant may elect to defer, as his
or her Annual Stock Option Gain Amount, Qualifying Gain up to the following
maximum percentage with respect to exercise of the Eligible Stock Option:

 

	
  Deferral

  	
   

  	
  Maximum
  Amount

  	
   

  
	
  Qualifying Gain

  	
   

  	
  100

  	
  %

  

 

Annual Stock Option Gain
Amounts may also be limited by other terms or conditions set forth in the stock
option plan or agreement under which such options are granted.

 

(d)                                 Short
Plan Year. 
Notwithstanding the foregoing, if a Participant first becomes a
Participant after the first day of a Plan Year, the maximum Annual Deferral
Amount (i) with respect to Base Annual Salary shall be limited to the amount of
compensation not yet earned by the Participant as of the date the Participant
submits a Plan Agreement and Election Form to the Committee for acceptance, and
(ii) with respect to Bonus, LTIP Amounts and Operator Share Dividends shall be
limited to those amounts deemed eligible for deferral, in the sole discretion
of the Committee.

 

3.3                                 Election to Defer; Effect of Election Form.

 

(a)                                  First
Plan Year.  In connection
with a Participant’s commence­ment of participa­tion in the Plan, the
Participant shall make an irrevocable deferral election for the Plan Year in
which the Participant commences participation in the Plan, along with such
other elections as the Committee deems necessary or desirable under the
Plan.  For these elections to be valid,
the Election Form must be completed and signed by the Participant, timely
delivered to the Committee (in accordance with Section 2.2 above) and accepted
by the Committee.

 

(b)                                 Subsequent
Plan Years.  For each
succeeding Plan Year, an irrevocable deferral election for that Plan Year, and
such other elections as the Committee deems necessary or desirable under the
Plan, shall be made by timely delivering a new Election Form to the Committee,
in accordance with its rules and procedures, before the first day of the Plan
Year for which the election is made.  If
no such Election Form is timely delivered for a Plan Year, the Annual Deferral
Amount shall be zero for that Plan Year.

 

(c)                                  Restricted
Stock Deferral.  For an
election to defer Restricted Stock to be valid: (i) a separate irrevocable
Election Form must be completed and signed by the Participant, with respect to
such Restricted Stock; and (ii) such Election Form must be timely delivered to
the Committee and accepted by the Committee at least six (6) months prior to
the date

 

12

 

such Restricted Stock vests under the terms of the
Hormel Foods Corporation stock incentive plan.

 

(d)                                 Stock
Option Gain Deferral.

 

(i)                                     For
an election to defer gain upon the exercise of an Eligible Stock Option
exercise to be valid: (i) a separate Election Form must be completed and signed
by the Participant with respect to the Eligible Stock Option; (ii) such election
must be irrevocable; (iii) the executed Election Form must be timely delivered
to the Committee or its designee at least six (6) months prior to the date the
Participant elects to exercise the Eligible Stock Option; (iv) the Participant
must agree not to exercise the Eligible Stock Option prior to six (6) months
from the date the executed, irrevocable Election Form is submitted to the
Committee or its designee; (v) the Eligible Stock Option must be exercised
using the “Stock-for-Stock payment method”; and (vi) the Stock constructively
delivered by the Participant to exercise the Eligible Stock Option must have
been owned by the Participant during the entire six (6) month period prior to
its delivery and/or otherwise qualify the Eligible Stock Option for favorable
accounting treatment, as determined in the sole discretion of the Committee.

 

(ii)                                  Notwithstanding
any other provision of this Plan to the contrary, (i) an Eligible Stock Option
may be exercised prior to the end of the six (6) month period following the
date on which the executed Election Form is delivered to the Committee or its
designee, and (ii) the resulting Qualifying Gain will not be deferred into this
Plan, if (a) a Change in Control occurs, or (b) the Participant Retires, dies
while an Employee, or experiences a Termination of Employment, and the Eligible
Stock Option would otherwise expire prior to the end of the six (6) month
period following the date on which the executed Election Form was delivered to
the Committee or its designee.

 

3.4                                 Withholding and Crediting of Annual Deferral Amounts.  For each Plan Year, the Base Annual Salary
portion of the Annual Deferral Amount shall be withheld from each regularly
scheduled Base Annual Salary payroll in equal amounts, as adjusted from time to
time for increases and decreases in Base Annual Salary.  The Bonus, LTIP Amounts and Operator Share
Dividends shall be withheld at the time the Bonus, LTIP Amounts or Operator
Share Dividends are or otherwise would be paid to the Participant, whether or
not this occurs during the Plan Year itself. 
Annual Deferral Amounts shall be credited to a Participant’s Deferral
Account at the time such amounts would otherwise have been paid to the
Participant.

 

3.5                                 Annual Discretionary Contribution Amount.

 

(a)                                  For
each Plan Year, an Employer may be required to credit amounts to a
Participant’s Discretionary Contribution Account in accordance with employment
or other agreements entered into between the Participant and the Employer.  Such amounts shall be credited on the date
or dates prescribed by such agreements.

 

(b)                                 For
each Plan Year, an Employer, in its sole discretion, may, but is not required
to, credit any amount it desires to any Participant’s Discretionary
Contribution Account under this

 

13

 

Plan, which amount shall be for that Participant the
Annual Discretionary Contribution Amount for that Plan Year.  The amount so credited to a Participant may
be smaller or larger than the amount credited to any other Participant, and the
amount credited to any Participant for a Plan Year may be zero, even though one
or more other Participants receive an Annual Discretionary Contribution Amount
for that Plan Year.  The Annual
Discretionary Contribution Amount described in this Section 3.5(b), if any,
shall be credited as of the last day of the Plan Year.  If a Participant is not employed by an
Employer as of the last day of a Plan Year other than by reason of his or her
Retirement or death while employed, the Annual Discretionary Contribution
Amount for that Plan Year shall be zero.

 

3.6                                 Annual Profit Sharing Amount.  A Participant’s Annual Profit Sharing Amount
shall be equal to the difference between (i) the contributions that would have
been allocated to the Participant’s “account” under the Profit Sharing Plan for
the Plan Year, pursuant to the terms of the Profit Sharing Plan in effect for
such year, without giving effect to the limitations imposed on the Profit
Sharing Plan by Sections 415 and 401(a)(17) of the Code; and (ii) the amount of
the contributions actually allocated to the Participant’s “account” under the
Profit Sharing Plan for the Plan Year. 
The amount so credited to a Participant under this Plan shall be for
that Participant the Annual Profit Sharing Amount for that Plan Year and shall
be credited to the Participant’s Profit Sharing Account on a date or dates to
be determined by the Committee, in its sole discretion.  If a Participant is not employed by an
Employer as of the last day of a Plan Year, the Annual Profit Sharing Amount
for such Plan Year shall be zero.

 

3.7                                 Annual Restricted Stock Amount.  Subject to any terms and conditions imposed
by the Committee, Participants may elect to defer, under the Plan, Restricted
Stock, which amount shall be for that Participant the Annual Restricted Stock
Amount for that Plan Year.  The portion
of any Restricted Stock deferred shall, at the time the Restricted Stock would
otherwise vest under the terms of the Hormel Foods Corporation stock incentive
plan, but for the election to defer, be reflected on the books of the Principal
Sponsor as an unfunded, unsecured promise to deliver to the Participant a
specific number of actual shares of Stock in the future.

 

3.8                                 Annual Stock Option Gain Amount.  Subject to any terms and conditions imposed
by the Committee, Participants may elect to defer, under the Plan, all or some
portion of Qualifying Gains attributable to an Eligible Stock Option exercise,
which amount shall be for that Participant the Annual Stock Option Gain Amount
for that Plan Year.  The portion of any
Qualifying Gains shall be reflected on the books of the Principal Sponsor as an
unfunded, unsecured promise to deliver to the Participant a specific number of
actual shares of Stock in the future. 
Such shares of Stock would otherwise have been delivered to the
Participant, pursuant to the Eligible Stock Option exercise, but for the
Participant’s election to defer.

 

3.9                                 Vesting.

 

(a)                                  A
Participant shall at all times be 100% vested in his or her Deferral Account,
Restricted Stock Account, Stock Option Gain Account and Profit Sharing Account.

 

(b)                                 A
Participant shall be vested in his or her Discretionary Contribution Account in
accordance with the vesting schedule(s) set forth in his or her Plan Agreement,

 

14

 

employment agreement or any other agreement entered
into between the Participant and his or her Employer.  If not addressed in such agreements, a Participant shall vest in
his or her Discretionary Contribution Account in accordance with the schedule
declared by the Committee in its sole discretion.

 

3.10                           Crediting/Debiting of Account Balances.  In accordance with, and subject to, the
rules and procedures that are established from time to time by the Committee,
in its sole discretion, amounts shall be credited or debited to a Participant’s
Account Balance in accordance with the following rules:

 

(a)                                  Measurement
Funds.  Subject to the
restrictions found in Section 3.10(d) below, the Participant may elect one or
more of the measurement funds selected by the Committee, in its sole
discretion, which are based on certain mutual funds (the “Measurement Funds”),
for the purpose of crediting or debiting additional amounts to his or her
Account Balance.  As necessary, the
Committee may, in its sole discretion, discontinue, substitute or add a
Measurement Fund.  Each such action will
take effect as of the first day of the first calendar quarter that begins at
least thirty (30) days after the day on which the Committee gives Participants
advance written notice of such change.

 

(b)                                 Election
of Measurement Funds. 
Subject to the restrictions found in Section 3.10(d) below, a
Participant, in connection with his or her initial deferral election in
accordance with Section 3.3(a) above, shall elect, on the Election Form, one or
more Measurement Fund(s) (as described in Section 3.10(a) above) to be used to
determine the amounts to be credited or debited to his or her Account
Balance.  If a Participant does not
elect any of the Measurement Funds as described in the previous sentence, the
Participant’s Account Balance shall automatically be allocated into the
lowest-risk Measurement Fund, as determined by the Committee, in its sole
discretion.  Subject to the restrictions
found in Section 3.10(d) below, the Participant may (but is not required to)
elect, by submitting an Election Form to the Committee that is accepted by the
Committee, to add or delete one or more Measurement Fund(s) to be used to
determine the amounts to be credited or debited to his or her Account Balance,
or to change the portion of his or her Account Balance allocated to each
previously or newly elected Measurement Fund. 
If an election is made in accordance with the previous sentence, it
shall apply as of the first business day deemed reasonably practicable by the
Committee, in its sole discretion, and shall continue thereafter for each
subsequent day in which the Participant participates in the Plan, unless
changed in accordance with the previous sentence.

 

(c)                                  Declared
Rate Measurement Fund. 
Subject to the restrictions found in Section 3.10(d) below, a
Participant may allocate or re-allocate any portion of his or her Account
Balance, excluding the portion of the Account Balance attributable to the Restricted
Stock Account and the Stock Option Gain Account, to the Declared Rate
Measurement Fund, at any time.  The rate
of interest credited on amounts allocated to the Declared Rate Measurement Fund
shall be the Crediting Rate and such interest shall be credited and compounded
on a daily basis to a Participant’s Account Balance.

 

15

 

(d)                                 Hormel
Foods Corporation Stock Unit Measurement Fund.

 

(i)                                     A
Participant’s Restricted Stock Account and Stock Option Gain Account will be
automatically allocated to the Hormel Foods Corporation Stock Unit Measurement
Fund.  Participants may not select any
other Measurement Fund to be used to determine the amounts to be credited or
debited to their Restricted Stock Account or Stock Option Gain Account.  Furthermore, no other portion of the
Participant’s Account Balance can be either initially allocated or re-allocated
to the Hormel Foods Corporation Stock Unit Measurement Fund.

 

(ii)                                  If
a Participant elects to receive his or her Retirement Benefit and/or Survivor
Benefit in installments, the portion of such Participant’s Account Balance that
has been automatically allocated to the Hormel Foods Corporation Stock Unit
Measurement Fund shall be distributed pursuant to an Annual Installment Method
over the number of years selected by the Participant.

 

(iii)                               Any
stock dividends, cash dividends or other non-cash dividends that would have
been payable on the Stock credited to a Participant’s Account Balance shall be
credited to the Participant’s Account Balance in the form of additional shares
of Stock and shall automatically and irrevocably be deemed to be re-invested in
the Hormel Foods Corporation Stock Unit Measurement Fund until such amounts are
distributed to the Participant.  The
number of shares credited to the Participant for a particular stock dividend
shall be equal to (a) the number of shares of Stock credited to the
Participant’s Account Balance as of the payment date for such dividend in
respect of each share of Stock, multiplied by (b) the number of additional
shares of Stock actually paid as a dividend in respect of each share of
Stock.  The number of shares credited to
the Participant for a particular cash dividend or other non-cash dividend shall
be equal to (a) the number of shares of Stock credited to the Participant’s
Account Balance as of the payment date for such dividend in respect of each
share of Stock, multiplied by (b) the fair market value of the dividend,
divided by (c) the “fair market value” of the Stock on the payment date for such
dividend.

 

(iv)                              The
number of shares of Stock credited to the Participant’s Account Balance may be
adjusted by the Committee, in its sole discretion, to prevent dilution or
enlargement of Participants’ rights with respect to the portion of his or her
Account Balance allocated to the Hormel Foods Corporation Stock Unit
Measurement Fund, in the event of any reorganization, reclassification, stock
split, or other unusual corporate transaction or event which affects the value
of the Stock, provided that any such adjustment shall be made taking into
account any crediting of shares of Stock to the Participant under Section 3.10.

 

(v)                                 For
purposes of this Section 3.10(d), the fair market value of the Stock shall be
determined by the Committee in its sole discretion.

 

(e)                                  Proportionate
Allocation.  In making
any election described in Section 3.10(b) above, the Participant shall specify
on the Election Form, in increments of one percent (1%), the

 

16

 

percentage of his or her Account Balance to be
allocated to a Measurement Fund (as if the Participant was making an investment
in that Measurement Fund with that portion of his or her Account Balance).

 

(f)                                    Crediting
or Debiting Method.  The
performance of each elected Measurement Fund (either positive or negative) will
be determined by the Committee, in its reasonable discretion, based on the
performance of the Measurement Funds themselves.  A Participant’s Account Balance shall be credited or debited on a
daily basis based on the performance of each Measurement Fund selected by the
Participant, such performance being determined by the Committee in its sole
discretion.

 

(g)                                 No Actual
Investment. 
Notwithstanding any other provision of this Plan that may be interpreted
to the contrary, the Measurement Funds are to be used for measurement purposes
only, and a Participant’s election of any such Measurement Fund, the allocation
to his or her Account Balance thereto, the calculation of additional amounts
and the crediting or debiting of such amounts to a Participant’s Account
Balance shall  not be considered or construed in any manner as an
actual investment of his or her Account Balance in any such Measurement
Fund.  In the event that the Principal
Sponsor or the Trustee (as that term is defined in the Trust), in its own
discretion, decides to invest funds in any or all of the investments on which
the Measurement Funds are based, no Participant shall have any rights in or to
such investments themselves.  Without
limiting the foregoing, a Participant’s Account Balance shall at all times be a
bookkeeping entry only and shall not represent any investment made on his or
her behalf by the Principal Sponsor or the Trust; the Participant shall at all
times remain an unsecured creditor of the Principal Sponsor.

 

3.11                           FICA and Other Taxes.

 

(a)                                  Annual
Deferral Amounts.  For
each Plan Year in which an Annual Deferral Amount is being withheld from a
Participant, the Participant’s Employer(s) shall withhold from that portion of
the Participant’s Base Annual Salary, Bonus, LTIP Amounts and/or Operator Share
Dividends that are not being deferred, in a manner determined by the
Employer(s), the Participant’s share of FICA and other employment taxes on such
Annual Deferral Amount.  If necessary,
the Committee may reduce the Annual Deferral Amount in order to comply with
this Section 3.11.

 

(b)                                 Annual
Profit Sharing Amount. 
When the Participant’s Employer(s) credits an Annual Profit Sharing
Amount to a Participant’s Profit Sharing Account, the Participant’s Employer(s)
shall withhold from the Participant’s Base Annual Salary, Bonus, LTIP Amounts
and/or Operator Share Dividends that are not deferred, in a manner determined
by the Employer(s), the Participant’s share of FICA and other employment taxes.  If necessary, the Committee may reduce the
vested portion of the Participant’s Profit Sharing Account in order to comply
with this Section 11.

 

(c)                                  Discretionary
Contribution Account. 
When a Participant becomes vested in a portion of his or her
Discretionary Contribution Account, the Participant’s Employer(s) shall
withhold from the Participant’s Base Annual Salary, Bonus, LTIP Amounts and/or

 

17

 

Operator Share Dividends that are not deferred, in a
manner determined by the Employer(s), the Participant’s share of FICA and other
employment taxes.  If necessary, the
Committee may reduce the vested portion of the Participant’s Discretionary
Contribution Account in order to comply with this Section 3.11.

 

(d)                                 Annual
Restricted Stock Amounts and Annual Stock Option Gain Amounts.  For each Plan Year in which an Annual
Restricted Stock Amount or Annual Stock Option Gain Amount is being first
withheld from a Participant, the Participant’s Employer(s) shall withhold from
that portion of the Participant’s Base Annual Salary, Bonus, LTIP Amounts,
Operator Share Dividends, Restricted Stock and Qualifying Gains that are not
being deferred, in a manner determined by the Employer(s), the Participant’s
share of FICA and other employment taxes on such Annual Stock Option Gain
Amount or Annual Restricted Stock Amount. 
If necessary, the Committee may reduce the Annual Stock Option Gain
Amount or the Annual Restricted Stock Amount in order to comply with this
Section 3.11.

 

(e)                                  Distributions.  The Participant’s Employer(s), or the
trustee of the Trust, shall withhold from any payments made to a Participant
under this Plan all federal, state and local income, employment and other taxes
required to be withheld by the Employer(s), or the trustee of the Trust, in
connection with such payments, in amounts and in a manner to be determined in
the sole discretion of the Employer(s) and the trustee of the Trust.

 

ARTICLE
4

Deduction Limitation

 

4.1                                 Deduction Limitation on Benefit Payments.  If an Employer determines in good faith
prior to a Change in Control that there is a reasonable likelihood that any
compensation paid to a Participant for a taxable year of the Employer would not
be deductible by the Employer solely by reason of the limitation under Code
Section 162(m), then to the extent deemed necessary by the Employer to ensure
that the entire amount of any distribution to the Participant pursuant to this
Plan prior to the Change in Control is deductible, the Employer may defer all
or any portion of a distribution under this Plan.  Any amounts deferred pursuant to this limitation shall continue
to be credited/debited with additional amounts in accordance with Section 3.10
above, even if such amount is being paid out in installments.  The amounts so deferred and amounts credited
thereon shall be distributed to the Participant or his or her Beneficiary (in
the event of the Participant’s death) at the earliest possible date, as
determined by the Employer in good faith, on which the deductibility of
compensation paid or payable to the Participant for the taxable year of the
Employer during which the distribution is made will not be limited by Section
162(m), or if earlier, the effective date of a Change in Control.  Notwithstanding anything to the contrary in
this Plan, the Deduction Limitation shall not apply to any distributions made
after a Change in Control.

 

18

 

ARTICLE 5

In-Service
Distribution; Unforeseeable Financial Emergencies;

Withdrawal
Election

 

5.1                                 In-Service Distribution.  In connection with each election to defer an
Annual Deferral Amount, a Participant may irrevocably elect to receive an
In-Service Distribution from the Plan with respect to all or a portion of (i)
the Annual Deferral Amount, (ii) the Annual Discretionary Contribution Amount,
and (iii) the Annual Profit Sharing Amount. 
The In-Service Distribution shall be a lump sum payment in an amount
that is equal to the portion of the Annual Deferral Amount, the vested portion
of the Annual Discretionary Contribution Amount and the vested portion of the
Annual Profit Sharing Amount that the Participant elected to have distributed
as an In-Service Distribution, plus amounts credited or debited in the manner
provided in Section 3.10 above on that amount, calculated as of the close
of business on or around the date on which the In-Service Distribution becomes
payable, as determined by the Committee in its sole discretion.  Subject to the other terms and conditions of
this Plan, each In-Service Distribution elected shall be paid out during a
sixty (60) day period commencing immediately after the first day of any Plan
Year designated by the Participant.  The
Plan Year designated by the Participant must be at least three Plan Years after
the end of the Plan Year in which the Annual Deferral Amount is actually
deferred, or the vested portion of the Annual Discretionary Contribution Amount
or Annual Profit Sharing Amount is actually contributed.  By way of example, if an In-Service Distribution
is elected for Annual Deferral Amounts that are deferred in the Plan Year
commencing January 1, 2003, the In-Service Distribution would become payable
during a sixty (60) day period commencing January 1, 2007.  Notwithstanding the language set forth
above, the Committee shall, in its sole discretion, adjust the amount
distributable as an In-Service Distribution if any portion of the Annual
Discretionary Contribution Amount or Annual Profit Sharing Amount is unvested
on the In-Service Distribution Date.  A
Participant may elect to change to an allowable alternative payout date in
accordance with this Section 5.1 by submitting a new Election Form to the
Committee, subject to the following:

 

a.              A Participant may
only elect to change an In-Service Distribution Date one time;

 

b.             Such Election Form
must be submitted to and accepted by the Committee in its sole discretion at
least thirteen (13) months prior to both the Participant’s existing In-Service
Distribution date and the Participant’s revised In-Service Distribution date;

 

c.              The Participant’s
revised In-Service Distribution Date must be later than the Participant’s
existing In-Service Distribution Date; and

 

d.             The revised
In-Service Distribution date must be at least three Plan Years after the end of
the Plan Year in which the Annual Deferral Amount was originally deferred or
the vested portion of the Annual Discretionary Contribution Amount or Annual
Profit Sharing Amount was originally contributed.

 

5.2                                 Other Benefits Take Precedence Over In-Service
Distributions. 
Should an event occur that triggers a benefit under Article 6, 7, 8, 9
or 10, any Annual Deferral Amount, plus amounts credited or debited thereon,
that is subject to an In-Service Distribution election under Section 5.1

 

19

 

shall not be paid
in accordance with Section 5.1 but shall be paid in accordance with the other
applicable Article.

 

5.3                                 Withdrawal Payout/Suspensions for Unforeseeable
Financial Emergencies. 
If the Participant experiences an Unforeseeable Financial Emergency, the
Participant may petition the Committee (i) to suspend deferrals of Base
Annual Salary, Bonus, LTIP Amounts, Operator Share Dividends, Restricted Stock
and Qualifying Gains required to be made by such Participant, to the extent
deemed necessary by the Committee to satisfy the Unforeseeable Financial
Emergency, or (ii) to suspend deferrals of Base Annual Salary, Bonus, LTIP
Amounts, Operator Share Dividends, Restricted Stock and Qualifying Gains
required to be made by such Participant, to the extent deemed necessary by the
Committee to satisfy the Unforeseeable Financial Emergency, and receive a
partial or full payout from the Plan. 
The payout shall not exceed the lesser of the Participant’s vested
Account Balance, excluding the portion of the Account Balance attributable to
the Restricted Stock Account and the Stock Option Gain Account, calculated as
if such Participant were receiving a Termination Benefit, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency.  A Participant may not receive a payout from
the Plan to the extent that the Unforeseeable Financial Emergency is or may be
relieved (i) through reimbursement or compensation by insurance or otherwise,
(ii) by liquidation of the Participant’s assets, to the extent the liquidation
of such assets would not itself cause severe financial hardship or (iii) by
suspension of deferrals under this Plan.

 

If the Committee, in its sole discretion, approves a
Participant’s petition for suspension, the Participant’s deferrals under this
Plan shall be suspended as of the date of such approval.  If the Committee, in its sole discretion,
approves a Participant’s petition for suspension and payout, the Participant’s
deferrals under this Plan shall be suspended as of the date of such approval
and the Participant shall receive a payout from the Plan within sixty
(60) days of the date of such approval.

 

5.4                                 Withdrawal Election.  A Participant (or, after a Participant’s
death, his or her Beneficiary) may elect, at any time, to withdraw all or a
portion of his or her vested Account Balance, excluding the portion of the
Account Balance attributable to the Restricted Stock Account and the Stock
Option Gain Account.  For purposes of
this Section 5.4, the value of a Participant’s vested Account Balance shall be
calculated as of the close of business on or around the date on which receipt
of the Participant’s election is acknowledged by the Committee, as determined
by the Committee in its sole discretion, less a withdrawal penalty equal to 10%
of the amount withdrawn (the net amount shall be referred to as the “Withdrawal
Amount”).  This election can be made at
any time, before or after Retirement, Termination of Employment, death or
Disability, and whether or not the Participant (or Beneficiary) is in the
process of being paid pursuant to an installment payment schedule.  The Participant (or his or her Beneficiary)
shall make this election by giving the Committee advance written notice of the
election in a form determined from time to time by the Committee.  The Participant (or his or her Beneficiary)
shall be paid the Withdrawal Amount within sixty (60) days of his or her
election.  Once the Withdrawal Amount is
paid, the Participant’s participation in the Plan shall be suspended for the
remainder of the Plan Year in which the withdrawal is elected and for one (1)
full Plan Year thereafter (the “Suspension Period”).  During the Suspension Period, the Participant will continue to be
eligible for the benefits provided in Articles 5, 6, 7, 8, 9 or 10 in
accordance with the provisions of those

 

20

 

Articles, and any
previously elected deferrals of Restricted Stock and Qualifying Gains will
continue to be withheld.  However, the
portion of such Participant’s Annual Deferral Amount which is attributable to
Base Annual Salary, Bonus, LTIP Amounts and/or Operator Share Dividends shall
not be withheld during the Suspension Period, and the Participant shall not be
allowed to make any deferral elections during the Suspension Period.

 

ARTICLE 6

Change
in Control Benefit

 

6.1                                 Change in Control Benefit.  The Participant will receive a Change in
Control Benefit, which shall be equal to the Participant’s vested Account
Balance, calculated as of the close of business on or around the date of the
Change in Control, as selected by the Committee in its sole discretion, if (i)
the Participant has elected to receive a Change in Control Benefit, as set
forth in Section 6.2 below, and (ii) if a Change in Control occurs prior to the
Participant’s Termination of Employment, Retirement, death or Disability.

 

6.2                                 Payment of Change in Control Benefit.  A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form
whether to (i) receive a Change in Control Benefit, or (ii) have his or her
Account Balance remain in the Plan upon the occurrence of a Change in Control
and to have his or her Account Balance remain subject to the terms and conditions
of the Plan.  The Participant may change
his or her election by submitting a new Election Form to the Committee,
provided that any such Election Form is submitted at least thirteen (13) months
prior to the Change in Control and is accepted by the Committee in its sole
discretion.  The Election Form most
recently accepted by the Committee shall govern the payout of the Change in
Control Benefit.  If a Participant does
not make any election with respect to the payment of the Change in Control
Benefit, then such Participant’s Account Balance shall remain in the Plan upon
a Change in Control and shall be subject to the terms and conditions of the
Plan.  The Change in Control Benefit, if
any, shall be paid to the Participant in a lump sum no later than sixty (60) days
after a Change in Control.

 

ARTICLE 7

Retirement
Benefit

 

7.1                                 Retirement Benefit.  A Participant who Retires shall receive, as
a Retirement Benefit, his or her vested Account Balance, calculated as of the
close of business on or around  the
occurrence of the Participant’s Benefit Distribution Date, as determined by the
Committee in its sole discretion.

 

7.2                                 Payment of Retirement Benefit.  A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form to
receive the Retirement Benefit in a lump sum or pursuant to an Installment
Method of two to twenty years (24 to 240 months) and shall select a Benefit
Distribution Date.  The Participant may
change his or her election to an allowable alternative Benefit Distribution
Date and/or allowable alternative form of payment by submitting a new Election
Form to the Committee, provided that any such Election Form is submitted to and
accepted by the Committee in its sole discretion at least one (1) year prior to
the Participant’s Retirement.  The
Election Form most recently accepted by the Committee that has

 

21

 

been on file at
least one (1) year before Retirement shall govern the payout of the Retire­ment
Benefit.  If a Participant does not make
any election with respect to the payment of the Retirement Benefit, then such
benefit shall be payable in a lump sum on the January 1 immediately following
the Participant’s Retirement.  The lump
sum payment shall be made, or installment payments shall commence, no later
than sixty (60) days after the Participant’s Benefit Distribution
Date.  Remaining monthly installments,
if any, shall be paid no later than fifteen (15) days after the last business
day of the preceding month.  Remaining annual installments, if any, shall be paid no later
than sixty (60) days after each anniversary of Participant’s Benefit
Distribution Date.

 

ARTICLE 8

Termination
Benefit

 

8.1                                 Termination Benefit.  A Participant who experiences a Termination
of Employment shall receive a Termination Benefit, which shall be equal to the
Participant’s vested Account Balance, calculated as of the close of business on
or around the occurrence of the Participant’s Benefit Distribution Date, as
determined by the Committee in its sole discretion.

 

8.2                                 Payment of Termination Benefit.  A Participant, in connection with his or her
commencement of participation in the Plan, shall select a Benefit Distribution
Date.  The Termination Benefit shall be
paid to the Participant in a lump sum payment no later than sixty (60) days
after the Participant’s Benefit Distribution Date.  The Participant may change his or her election to an allowable
alternative Benefit Distribution Date by submitting a new Election Form to the
Committee, provided that any such Election Form is submitted to and accepted by
the Committee in its sole discretion at least one (1) year prior to the
Participant’s Termination of Employment. 
The Election Form most recently accepted by the Committee that has been
on file at least one (1) year before Termination of Employment shall govern the
payout of the Termination Benefit.  If a
Participant does not make any election with respect to the payment of the
Termination Benefit, then such benefit shall be payable in a lump sum on the
January 1 immediately following the Participant’s Termination of Employment.

 

ARTICLE 9

Disability
Waiver and Benefit

 

9.1                                 Disability Waiver.

 

(a)                                  Waiver of Deferral.  A Participant who is deter­mined to be
suffering from a Disability shall continue to be eligible for the benefits
provided in Articles 5, 6, 7, 8 or 10 in accordance with the provisions of
those Articles, and any previously elected deferrals of Restricted Stock and
Qualifying Gains shall continue to be withheld during such Disability in
accordance with Section 3.3.  However,
such Disabled Participant shall be excused from fulfilling that portion of the
Annual Deferral Amount commitment that would otherwise have been withheld from
a Participant’s Base Annual Salary, Bonus, LTIP Amounts and/or Operator Share
Dividends during the remainder of the Plan Year in 

 

22

 

which the Participant first suffers the
Disability.  During the period of
Disability, the Participant shall not be allowed to make any additional
deferral elections.

 

(b)                                 Deferral Following Disability.  If a Participant returns to employment with
an Employer after a Disability ceases, the Participant may elect to defer an
Annual Deferral Amount, Annual Restricted Stock Amount and Annual Stock Option
Gain Amount for the Plan Year following his or her return to employment and for
every Plan Year thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form is delivered to
and accepted by the Committee for each such election in accordance with
Section 3.3 above.

 

9.2                                 Continued Eligibility; Disability Benefit.

 

(a)                                  Continued Eligibility.  A Participant suffering a Disability shall,
for benefit purposes under this Plan, continue to be considered to be employed
and shall be eligible for the benefits provided for in Articles 5, 6,
7, 8 or 10 in accordance with the provisions of those Articles.  Notwithstanding the above, the Committee
shall have the right to, in its sole and absolute discretion and for purposes
of this Plan only, deem the Participant’s employment to have terminated at any
time after such Participant is determined to be suffering a Disability.

 

(b)                                 Deemed Termination of Employment.  If, in the Committee’s discretion, the
Disabled Participant’s employment has terminated, and such Participant is not
otherwise eligible to Retire, the Participant shall be deemed to have
experienced a Termination of Employment for purposes of this Plan and will
receive a Disability Benefit.  The
Disability Benefit shall be equal to his or her vested Account Balance,
calculated as of the close of business on or around the Disabled Participant’s
Benefit Distribution Date, as selected by the Participant in accordance with
Article 8 and as determined by the Committee, in its sole discretion.  The Participant shall receive his or her
Disability Benefit in a lump sum payment no later than sixty (60) days after
his or her Benefit Distribution Date.

 

(c)                                  Deemed Retirement.  If, in the Committee’s discretion, the
Disabled Participant’s employment has terminated, and such Participant is
otherwise eligible to Retire, the Participant shall be deemed to have Retired
and will receive a Disability Benefit. 
The Disability Benefit shall be equal to his or her vested Account
Balance, calculated as of the close of business on or around the Participant’s
Benefit Distribution Date, as selected by the Participant in accordance with
Article 7 and as determined by the Committee in its sole discretion.  The Participant shall receive his or her
Disability Benefit in the same form in which such Participant elected to
receive his or her Retirement Benefit. 
The lump sum payment shall be made, or installment payments shall
commence, no later than sixty (60) days after the Disabled Participant’s
Benefit Distribution Date. 
Remaining monthly installments, if any, shall be paid no later than
fifteen (15) days after the last business day of the preceding month.  Remaining annual installments, if any, shall
be paid no later than sixty (60) days after each anniversary of Participant’s
Benefit Distribution Date.

 

23

 

ARTICLE 10

Survivor
Benefit

 

10.1                           Survivor Benefit.  The Participant’s Beneficiary(ies) shall
receive a Survivor Benefit upon the Participant’s death which will be equal to
(i) the Participant’s vested Account Balance, calculated as of the close of
business on or around the date of the Participant’s death, as selected by the
Committee in its sole discretion, if the Participant dies prior to his or her
Retirement, Termination of Employment or Disability, or (ii) the Participant’s
unpaid Retirement Benefit or Disability Benefit, calculated as of the close of
business on or around the date of the Participant’s death, as selected by the
Committee in its sole discretion, if the Participant dies before his or her
Retirement Benefit or Disability Benefit is paid in full.

 

10.2                           Payment of Survivor Benefit.  A Participant, in connection with his or her
commencement of participation in the Plan, shall elect on an Election Form to
have the Survivor Benefit paid to his or her Beneficiary(ies) in a lump sum or
pursuant to an Installment Method of two to twenty years (24 to 240
months).  If a Participant does not make
any election with respect to the payment of the Survivor Benefit, then such
benefit shall be payable in a lump sum. 
The lump sum payment shall be made, or installment payments shall
commence, no later than sixty (60) days after the date on which the Committee
is provided with proof that is satisfactory to the Committee of the
Participant’s death.  Remaining monthly
installments, if any, shall be paid no later than fifteen (15) days after the
last business day of the preceding month. 
Remaining annual installments, if any, shall be paid no later than sixty
(60) days after each anniversary of Participant’s Benefit Distribution Date.

 

ARTICLE
11

Forfeiture of Benefits

 

11.1                           Forfeiture of Benefits.  Notwithstanding any provision in this Plan
or a Participant’s Plan Agreement to the contrary, a Participant’s Account
Balance shall not be credited or debited in the manner provided in Section 3.10
and no distribution shall be made to a Participant while a Participant engages
in the following:

 

(a)                                  Intentional
conduct resulting in material harm to Hormel or an Affiliate; or

 

(b)                                 In
any employment or self-employment with a competitor of Hormel or an Affiliate
within the geographical area which is then served by Hormel or an Affiliate
during the Participant’s employment or during a period of two (2) years after
the termination of the Participant’s employment.

 

Any dispute arising under or with respect to this
Section 11.1 shall be subject to the claims procedure set forth in Article 17.

 

24

 

ARTICLE 12

Beneficiary
Designation

 

12.1                           Right to Designate.  Each Participant may designate, upon
forms to be furnished by and filed with the Committee, one or more primary
Beneficiaries or contingent Beneficiaries to receive all or a specified part of
such Participant’s Account Balance in the event of such Participant’s
death.  The Participant may change or
revoke any such designation from time to time without notice to or consent from
any Beneficiary.  No such designation,
change or revocation shall be effective unless executed by the Participant and
received by the Committee during the Participant’s lifetime.

 

12.2                           Failure of Designation.  If a Participant:

 

(a)                                  Fails
to designate a Beneficiary,

 

(b)                                 Designates
a Beneficiary and thereafter revokes such designation without naming another
Beneficiary, or

 

(c)                                  Designates
one or more Beneficiaries and all such Beneficiaries so designated fail to
survive the Participant,

 

such Participant’s Account Balance, or the part
thereof as to which such Participant’s designation fails, as the case may be,
shall be payable to the first class of the following classes of automatic
Beneficiaries with a member surviving the Participant and (except in the case
of surviving issue) in equal shares if there is more than one member in such
class surviving the Participant:

 

Participant’s surviving spouse

 

Participant’s surviving issue per stirpes and not per
capita

 

Participant’s surviving parents

 

Participant’s surviving brothers and sisters

 

Representative of Participant’s estate.

 

12.3                           Disclaimers by Beneficiaries.  A Beneficiary entitled to a
distribution of all or a portion of a deceased Participant’s Account Balance
may disclaim an interest therein subject to the following requirements.  To be eligible to disclaim, a Beneficiary
must be a natural person, must not have received a distribution of all or any
portion of the Account Balance at the time such disclaimer is executed and
delivered, and must have attained at least age twenty-one (21) years as of the
date of the Participant’s death.  Any
disclaimer must be in writing and must be executed personally by the
Beneficiary before a notary public.  A
disclaimer shall state that the Beneficiary’s entire interest in the
undistributed Account Balance is disclaimed or shall specify what portion
thereof is disclaimed.  To be effective,
duplicate original executed copies of the disclaimer must be both executed and
actually delivered to the Committee after the date of the Participant’s death
but not later than forty-five (45) days after the date of the Participant’s
death.  A disclaimer shall be
irrevocable when delivered to the Committee. 
A disclaimer shall be considered to be delivered to the Committee only
when actually received by the Committee. 
The Committee shall be the sole judge of the content, interpretation and
validity of a purported disclaimer. 
Upon the filing of

 

25

 

a valid disclaimer, the Beneficiary shall be
considered not to have survived the Participant as to the interest
disclaimed.  A disclaimer by a
Beneficiary shall not be considered to be a transfer of an interest in
violation of the provisions in Section 19.4 and shall not be considered to be
an assignment or alienation of benefits in violation of federal law prohibiting
the assignment or alienation of benefits under this Plan.  No other form of attempted disclaimer shall
be recognized by the Committee.

 

12.4                           Definitions.  When used herein and, unless the Participant
has otherwise specified in the Participant’s Beneficiary Designation Form, when
used in a Beneficiary designation, “issue” means all persons who are lineal
descendants of the person whose issue are referred to, including legally
adopted descendants and their descendants but not including illegitimate
descendants and their descendants; “child” means an issue of the first
generation; “per stirpes” means in equal shares among living children of the
person whose issue are referred to and the issue (taken collectively) of each
deceased child of such person, with such issue taking by right of
representation of such deceased child; and “survive” and “surviving” mean
living after the death of the Participant.

 

12.5                           Special Rules.  Unless the Participant has otherwise
specified in the Participant’s Beneficiary Designation Form, the following
rules shall apply:

 

(a)                                  If
there is not sufficient evidence that a Beneficiary was living at the time of
the death of the Participant, it shall be deemed that the Beneficiary was not
living at the time of the death of the Participant.

 

(b)                                 The
automatic Beneficiaries specified in Section 12.2 and the Beneficiaries
designated by the Participant shall become fixed at the time of the
Participant’s death so that, if a Beneficiary survives a Participant but dies
before receipt of the payment due such Beneficiary hereunder, such payment
shall be payable to the representative of such Beneficiary’s estate.

 

(c)                                  If
the Participant designates as a Beneficiary the person who is the Participant’s
spouse on the date of the designation, either by name or by relationship, or
both, the dissolution, annulment or other legal termination of the marriage
between the Participant and such person shall automatically revoke such
designation.  (The foregoing shall not
prevent the Participant from designating a former spouse as a Beneficiary on
the Beneficiary Designation Form executed by the Participant and received by
the Committee after the date of the legal termination of the marriage between
the Participant and such former spouse, and during the Participant’s lifetime.)

 

(d)                                 Any
designation of a nonspouse Beneficiary by name that is accompanied by a
description of relationship to the Participant shall be given effect without
regard to whether the relationship to the Participant exists either then or at
the Participant’s death.

 

(e)                                  Any
designation of a Beneficiary only by statement of relationship to the
Participant shall be effective only to designate the person or persons standing
in such relationship to the Participant at the Participant’s death.

 

26

 

A Beneficiary designation is permanently void if it
either is executed or is filed by a Participant who, at the time of such
execution or filing, is then a minor under the law of the state of the Participant’s
legal residence.  The Committee shall be
the sole judge of the content, interpretation and validity of a purported
Beneficiary designation.

 

12.6                           No Spousal Rights.  No spouse or surviving spouse of
a Participant and no person designated to be a Beneficiary shall have any
rights to or interest in the benefits accumulated under this Plan including,
but not limited to, the right to be the sole Beneficiary or to consent to the
designation of Beneficiaries (or the changing of designated Beneficiaries) by
the Participant.

 

12.7                           Death Prior to Full Distribution.  If, at the death of the Participant, any
payment to the Participant was due or otherwise pending but not actually paid,
the amount of such payment shall be included in the Account Balance which is
payable to the Beneficiary (and shall not be paid to the Participant’s estate).

 

12.8                           Discharge of Obligations.  The payment of benefits under the Plan to a
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to the
Participant, and that Participant’s Plan Agreement shall terminate upon such
full payment of benefits.

 

ARTICLE 13

Leave of
Absence

 

13.1                           Paid Leave of Absence.  If a Participant is authorized by the Participant’s
Employer to take a paid leave of absence from the employment of the Employer,
(i) the Participant shall continue to be considered eligible for the benefits
provided in Articles 5, 6, 7, 8, 9 or 10 in accordance with the provisions of
those Articles, and (ii) the Annual Deferral Amount  and any previously elected
deferrals of Restricted Stock and Qualifying Gains shall continue to be
withheld during such paid leave of absence in accordance with Section 3.3.

 

13.2                           Unpaid Leave of Absence.  If a Participant is authorized by the
Participant’s Employer to take an unpaid leave of absence from the employment
of the Employer, such Participant shall continue to be eligible for the
benefits provided in Articles 5, 6, 7, 8, 9 or 10 in accordance with the provisions
of those Articles, and any previously elected deferrals of Restricted Stock and
Qualifying Gains shall continue to be withheld during such unpaid leave of
absence in accordance with Section 3.3. 
However, the Participant shall be excused from fulfilling that portion
of the Annual Deferral Amount commitment that would otherwise have been
withheld from such Participant’s Base Annual Salary, Bonus, LTIP Amounts and/or
Operator Share Dividends during the remainder of the Plan Year in which the
unpaid leave of absence is taken. 
During the unpaid leave of absence, the Participant shall not be allowed
to make any additional deferral elections. 
However, if the Participant returns to employment, the Participant may
elect to defer an Annual Deferral Amount, Annual Restricted Stock Amount and
Annual Stock Option Gain Amount for the Plan Year following his or her return
to employment and for every Plan Year thereafter while a Participant in the
Plan.

 

27

 

ARTICLE 14

Termination, Amendment or Modification

 

14.1                           Termination.  Although each Employer anticipates that it
will continue the Plan for an indefinite period of time, there is no guarantee
that any Employer will continue to sponsor the Plan in the future.  Accordingly, each Employer reserves the
right to discontinue its sponsorship of the Plan at any time with respect to
any or all of its participating Employees, by action of its board of directors;
provided, however, the Board shall have the sole authority to terminate the
Plan at any time.  Upon the termination
of the Plan with respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and their vested
Account Balances shall be determined (i) as if they had experienced a
Termination of Employment on the date of Plan termination; or (ii) if Plan
termination occurs after the date upon which a Participant was eligible to
Retire, then with respect to that Participant as if he or she had Retired on the
date of Plan termination.  Such benefits
shall be paid to the Participants as follows: (i) prior to a Change in Control,
if the Plan is terminated with respect to all of its Participants, an Employer
shall have the right, in its sole discre­tion, and notwith­standing any
elections made by the Participant, to pay such benefits in a lump sum or
pursuant to an Installment Method of up to 15 years, with amounts credited
and debited during the installment period as provided herein; or (ii) prior to
a Change in Control, if the Plan is terminated with respect to less than all of
its Participants, an Employer shall be required to pay such benefits in a lump
sum; or (iii) after a Change in Control, if the Plan is terminated with respect
to some or all of its Participants, the Employer shall be required to pay such
benefits in a lump sum.  The termination
of the Plan shall not adversely affect any Participant or Beneficiary who has
become entitled to the payment of any benefits under the Plan as of the date of
termination; provided however, that the Employer shall have the right to
accelerate installment payments without a premium or prepayment penalty by
paying the vested Account Balance in a lump sum or pursuant to an Installment
Method using fewer months or years, as the case may be (provided that the
present value of all payments that will have been received by a Participant at
any given point of time under the different payment schedule shall equal or
exceed the present value of all payments that would have been received at that
point in time under the original payment schedule).

 

14.2                           Amendment.  The Executive Committee of the Principal
Sponsor and/or the Compensation Committee of the Board may, at any time, amend
or modify the Plan in whole or in part; provided, however, that: (i) no
amendment or modification shall be effective to decrease or restrict the value
of a Participant’s vested Account Balance in existence at the time the
amendment or modification is made, calculated as if the Participant had
experienced a Termination of Employment as of the effective date of the
amendment or modification or, if the amendment or modification occurs after the
date upon which the Participant was eligible to Retire, the Participant had
Retired as of the effective date of the amendment or modification, (ii) only
the Compensation Committee of the Board shall have the authority to amend or
modify any provision of this Plan which affects the Crediting Rate, (iii) no
amendment or modification of Section 19.18 shall be effective without the
written consent of at least eighty percent (80%) of the Participants determined
as of the date of such amendment or modification, and (iv) no amendment or
modification of this Section 14.2 or Section 15.2 of the Plan shall be
effective.  Notwithstanding anything to
the contrary contained in this Section 14.2, in the event the

 

28

 

Compensation
Committee of the Board determines, in its sole discretion, that any amendment
to this Plan or other action by the Executive Committee presents a substantial
possibility of a conflict of interest or self-dealing by the officers of the
Principal Sponsor, the Compensation Committee of the Board shall assume
exclusive authority over that action or amendment.  The amendment or modification of the Plan shall not affect any
Participant or Beneficiary who has become entitled to the payment of benefits
under the Plan as of the date of the amendment or modification; provided,
however, that an Employer shall have the right to accelerate installment
payments by paying the vested Account Balance in a lump sum or pursuant to an
Installment Method using fewer months or years, as the case may be (provided
that the present value of all payments that will have been received by a Participant
at any given point of time under the different payment schedule shall equal or
exceed the present value of all payments that would have been received at that
point in time under the original payment schedule).

 

14.3                           Plan Agreement.  Despite the provisions of Sections 14.1
and 14.2 above, if a Participant’s Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only amend or
terminate such provisions with the written consent of the Participant.

 

14.4                           Effect of Payment.  The full payment of the Participant’s vested
Account Balance under Articles 5, 6, 7, 8, 9 or 10 of the Plan shall
completely discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant’s Plan Agreement shall
terminate.

 

ARTICLE 15

Administration

 

15.1                           Committee Duties.  Except as otherwise provided in this Article
15, this Plan shall be administered by the Executive Committee of the Principal
Sponsor or such committee as the Executive Committee shall appoint.  Members of the Committee may be Participants
under this Plan.  The Committee shall
also have the discretion and authority to (i) make, amend, interpret, and
enforce all appropriate rules and regulations for the administra­tion of this
Plan and (ii) decide or resolve any and all ques­tions including
interpretations of this Plan, as may arise in connection with the Plan.  Any individual serving on the Committee who
is a Participant shall not vote or act on any matter relating solely to himself
or herself or to any individual superior to himself or herself in the
organization.  When making a
determination or calculation, the Committee shall be entitled to rely on
information furnished by a Participant or the Principal Sponsor.  In the event the Compensation Committee of
the Board determines, in its sole discretion, that any amendment to this Plan
or other action by the Executive Committee presents a substantial possibility
of a conflict of interest or self-dealing by the officers of the Principal
Sponsor, the Compensation Committee of the Board shall assume exclusive
authority over that action or amendment.

 

15.2                           Administration Upon Change In Control.  For purposes of this Plan, the Committee
shall be the “Administrator” at all times prior to the occurrence of a Change
in Control.  Within one hundred and
twenty (120) days following a Change in Control, an independent third party
“Administrator” may be selected by the individual who, immediately prior to the
Change in Control, was the Principal Sponsor’s Chief Executive Officer or, if
not so identified, the

 

29

 

Principal
Sponsor’s highest ranking officer (the “Ex-CEO”), and approved by the
Trustee.  The Committee, as constituted
prior to the Change in Control, shall continue to be the Administrator until
the earlier of (i) the date on which such independent third party is selected
and approved, or (ii) the expiration of the one hundred and twenty (120) day
period following the Change in Control. 
If an independent third party is not selected within one hundred and
twenty (120) days of such Change in Control, the Committee, as described in
Section 15.1 above, shall be the Administrator.  The Administrator shall have the discretionary power to determine
all questions arising in connection with the administration of the Plan and the
interpretation of the Plan and Trust including, but not limited to benefit
entitlement determinations; provided, however, upon and after the occurrence of
a Change in Control, the Administrator shall have no power to direct the
investment of Plan or Trust assets or select any investment manager or
custodial firm for the Plan or Trust. 
Upon and after the occurrence of a Change in Control, the Principal
Sponsor must: (1) pay all reasonable administrative expenses and fees of the
Administrator; (2) indemnify the Administrator against any costs, expenses and
liabilities including, without limitation, attorney’s fees and expenses arising
in connection with the performance of the Administrator hereunder, except with
respect to matters resulting from the gross negligence or willful misconduct of
the Administrator or its employees or agents; and (3) supply full and timely
information to the Administrator on all matters relating to the Plan, the
Trust, the Participants and their Beneficiaries, the Account Balances of the
Participants, the date and circumstances of the Retirement, Disability, death
or Termination of Employment of the Participants, and such other pertinent
information as the Administrator may reasonably require.  Upon and after a Change in Control, the
Administrator may be terminated (and a replacement appointed) by the Trustee
only with the approval of the Ex-CEO. 
Upon and after a Change in Control, the Administrator may not be
terminated by the Principal Sponsor.

 

15.3                           Agents. In the administration of this Plan, the
Committee may, from time to time, employ agents and delegate to them such
administrative duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may be
counsel to any Employer.

 

15.4                           Binding Effect of Decisions.  The decision or action of the Administrator
with respect to any question arising out of or in connection with the administration,
interpretation and application of the Plan and the rules and regulations
promulgated hereunder shall be final and conclusive and binding upon all
persons having any interest in the Plan.

 

15.5                           Indemnity of Committee.  All Employers shall indemnify and hold
harmless the members of the Committee, any Employee to whom the duties of the
Committee may be delegated, and the Administrator against any and all claims,
losses, damages, expenses or liabilities arising from any action or failure to
act with respect to this Plan, except in the case of willful misconduct by the
Committee, any of its members, any such Employee or the Administrator.

 

15.6                           Employer Information.  To enable the Committee and/or Administrator
to perform its functions, the Principal Sponsor and each Employer shall supply
full and timely information to the Committee and/or Administrator, as the case
may be, on all matters relating to the compensation of its Participants, the
date and circum­stances of the Retirement, Disability, death

 

30

 

or Termination of Employment of its Participants, and
such other pertinent information as the Committee or Administrator may
reasonably require.

 

ARTICLE 16

Other
Benefits and Agreements

 

16.1                           Coordination with Other Benefits.  The benefits provided for a Participant and
Participant’s Beneficiary under the Plan are in addition to any other benefits
available to such Participant under any other plan or program for employees of
the Participant’s Employer.  The Plan
shall supplement and shall not supersede, modify or amend any other such plan
or program except as may otherwise be expressly provided.

 

ARTICLE 17

Claims
Procedures

 

17.1                           Presentation of Claim.  Any Participant or Beneficiary of a deceased
Participant (such Participant or Beneficiary being referred to below as a
“Claimant”) may deliver to the Committee a written claim for a determination
with respect to the amounts distributable to such Claimant from the Plan.  If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within sixty
(60) days after such notice was received by the Claimant.  All other claims must be made within
180 days of the date on which the event that caused the claim to arise
occurred.  The claim must state with
particularity the determination desired by the Claimant.

 

17.2                           Notification of Decision.  The Committee shall consider a Claimant’s
claim within a reasonable time, but no later than ninety (90) days after
receiving the claim.  If the Committee
determines that special circumstances require an extension of time for
processing the claim, written notice of the extension shall be furnished to the
Claimant prior to the termination of the initial ninety (90) day period.  In no event shall such extension exceed a
period of ninety (90) days from the end of the initial period.  The extension notice shall indicate the
special circumstances requiring an extension of time and the date by which the
Committee expects to render the benefit determination.  The Committee shall notify the Claimant in
writing:

 

(a)                                  that
the Claimant’s requested determination has been made, and that the claim has
been allowed in full; or

 

(b)                                 that
the Committee has reached a conclusion contrary, in whole or in part, to the
Claimant’s requested determination, and such notice must set forth in a manner
calculated to be understood by the Claimant:

 

(i)                                     the
specific reason(s) for the denial of the claim, or any part of it;

 

(ii)                                  specific
reference(s) to pertinent provisions of the Plan upon which such denial was
based;

 

31

 

(iii)                               a
description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or information
is necessary;

 

(iv)                              an
explanation of the claim review procedure set forth in Section 17.3 below;
and

 

(v)                                 a
statement of the Claimant’s right to bring a civil action under ERISA Section
502(a) following an adverse benefit determination on review.

 

17.3                           Review of a Denied Claim.  On or before sixty (60) days after
receiving a notice from the Committee that a claim has been denied, in whole or
in part, a Claimant (or the Claimant’s duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim.  The Claimant (or the Claimant’s
duly authorized representative):

 

(a)                                  may,
upon request and free of charge, have reasonable access to, and copies of, all
documents, records and other information relevant to the claim for benefits;

 

(b)                                 may
submit written comments or other documents; and/or

 

(c)                                  may
request a hearing, which the Committee, in its sole discretion, may grant.

 

17.4                           Decision on Review.  The Committee shall render its decision on
review promptly, and no later than sixty (60) days after the Committee
receives the Claimant’s written request for a review of the denial of the
claim.  If the Committee determines that
special circumstances require an extension of time for processing the claim,
written notice of the extension shall be furnished to the Claimant prior to the
termination of the initial sixty (60) day period.  In no event shall such extension exceed a period of sixty (60)
days from the end of the initial period. 
The extension notice shall indicate the special circumstances requiring
an extension of time and the date by which the Committee expects to render the
benefit determination.  In rendering its
decision, the Committee shall take into account all comments, documents,
records and other information submitted by the Claimant relating to the claim,
without regard to whether such information was submitted or considered in the
initial benefit determination.  The
decision must be written in a manner calculated to be understood by the Claimant,
and it must contain:

 

(a)                                  specific
reasons for the decision;

 

(b)                                 specific
reference(s) to the pertinent Plan provisions upon which the decision was
based;

 

(c)                                  a
statement that the Claimant is entitled to receive, upon request and free of
charge, reasonable access to and copies of, all documents, records and other
information relevant (as defined in applicable ERISA regulations) to the
Claimant’s claim for benefits; and

 

(d)                                 a
statement of the Claimant’s right to bring a civil action under ERISA Section
502(a).

 

17.5                           Legal Action.  A Claimant’s compliance with the foregoing
provisions of this Article 17 is a mandatory prerequisite to a Claimant’s
right to commence any legal action with respect to any claim for benefits under
this Plan.

 

 

32

 

 

ARTICLE 18

Trust

 

18.1                           Establishment of the Trust.  In order to provide assets from which to
fulfill the obligations of the Participants and their beneficiaries under the
Plan, the Principal Sponsor may establish a Trust by a trust agreement with a
third party, the trustee, to which each Employer may, in its discretion,
contribute cash or other property, including securities issued by the Principal
Sponsor, to provide for the benefit payments under the Plan.

 

18.2                           Interrelationship of the Plan and the Trust.  The provisions of the Plan and the Plan
Agreement shall govern the rights of a Participant to receive distributions
pursuant to the Plan.  The provisions of
the Trust shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trust.  Each Employer shall at all times remain
liable to carry out its obligations under the Plan.

 

18.3                           Distributions From the Trust.  Each Employer’s obligations under the Plan
may be satisfied with Trust assets distributed pursuant to the terms of the
Trust, and any such distribution shall reduce the Employer’s obligations under
this Plan.

 

ARTICLE 19

Miscellaneous

 

19.1                           Status of Plan.  The Plan is intended to be a plan that is
not qualified within the meaning of Code Section 401(a) and that “is unfunded
and is maintained by an employer primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
employees” within the meaning of ERISA Sections 201(2), 301(a)(3) and
401(a)(1).  The Plan shall be
administered and interpreted to the extent possible in a manner consistent with
that intent.

 

19.2                           Unsecured General Creditor.  Participants and their Beneificiaries,
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer.  For purposes of the payment of benefits
under this Plan, any and all of an Employer’s assets shall be, and remain, the
general, unpledged unrestricted assets of the Employer.  An Employer’s obligation under the Plan
shall be merely that of an unfunded and unsecured promise to pay money in the
future.

 

19.3                           Employer’s Liability.  An Employer’s liability for the payment of
benefits shall be defined only by the Plan and the Plan Agreement, as entered
into between the Employer and a Participant. 
An Employer shall have no obliga­tion to a Participant under the Plan
except as expressly provided in the Plan and his or her Plan Agreement.

 

19.4                           Nonassignability.  Neither a Participant nor any other person
shall have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in
advance of actual receipt, the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are expressly declared to be,
unassignable and non-transfer­able.  No
part of the amounts payable shall, prior to actual payment, be subject to
seizure, attachment, garnishment or sequestration for the payment of any debts,
judgments,

 

33

 

alimony or
separate maintenance owed by a Participant or any other person, be transferable
by operation of law in the event of a Participant’s or any other person’s
bankruptcy or insolvency or be transferable to a spouse as a result of a
property settlement or otherwise.

 

19.5                           Not a Contract of Employment.  The terms and conditions of this Plan shall
not be deemed to constitute a contract of employment between any Employer and
the Participant.  Such employment is
hereby acknowledged to be an “at will” employment relationship that can be
terminated at any time for any reason, or no reason, with or without cause, and
with or without notice, unless expressly provided in a written employment
agreement.  Nothing in this Plan shall
be deemed to give a Participant the right to be retained in the service of any
Employer as an Employee or to inter­fere with the right of any Employer to
discipline or discharge the Participant at any time.

 

19.6                           Furnishing Information.  A Participant or his or her Beneficiary will
cooperate with the Committee by furnishing any and all information requested by
the Committee and take such other actions as may be requested in order to
facilitate the administra­tion of the Plan and the payments of benefits
hereunder, including but not limited to taking such physical examinations as
the Committee may deem necessary.

 

19.7                           Terms. 
Whenever any words are used herein in the masculine, they shall be
construed as though they were in the feminine in all cases where they would so
apply; and whenever any words are used herein in the singular or in the plural,
they shall be construed as though they were used in the plural or the singular,
as the case may be, in all cases where they would so apply.

 

19.8                           Captions.  The
captions of the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or construction of
any of its provisions.

 

19.9                           Governing Law.  Subject to ERISA, the provisions of this
Plan shall be construed and interpreted according to the internal laws of the
State of Minnesota  without regard to its conflicts of laws
principles.

 

19.10                     Notice.  Any
notice or filing required or permitted to be given to the Committee under this
Plan shall be sufficient if in writing and hand-delivered, or sent by
registered or certified mail, to the address below: 

 

	
  Hormel Foods
  Corporation

  
	
  Attn:  Corporate Secretary

  
	
  1 Hormel Place

  
	
  Austin, MN 55912

  

 

Such notice shall be deemed given as of the date of
delivery or, if delivery is made by mail, as of the date shown on the postmark
on the receipt for registration or certification.

 

Any notice or filing required or permitted to be given
to a Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the Participant.

 

34

 

19.11                     Successors.  The provisions of this Plan shall bind and inure
to the benefit of the Participant’s Employer and its successors and assigns and
the Participant and the Participant’s designated Beneficiaries.

 

19.12                     Spouse’s Interest.  The interest in the benefits hereunder of a
spouse of a Participant who has predeceased the Participant shall automatically
pass to the Participant and shall not be transferable by such spouse in any
manner, including but not limited to such spouse’s will, nor shall such
interest pass under the laws of intestate succession.

 

19.13                     Validity.  In
case any provision of this Plan shall be illegal or invalid for any reason,
said illegality or invalidity shall not affect the remaining parts hereof, but
this Plan shall be construed and enforced as if such illegal or invalid
provision had never been inserted herein.

 

19.14                     Incompetent.  If the Committee determines in its
discretion that a benefit under this Plan is to be paid to a minor, a person
declared incompetent or to a person incapable of handling the disposition of
that person’s property, the Committee may direct payment of such benefit to the
guardian, legal representative or person having the care and custody of such
minor, incompetent or incapable person. 
The Committee may require proof of minority, incompetence, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit.  Any payment of a benefit shall
be a payment for the account of the Participant and the Participant’s
Beneficiary, as the case may be, and shall be a complete discharge of any
liability under the Plan for such payment amount.

 

19.15                     Court Order.  The Committee is authorized to make any
payments directed by court order in any action in which the Plan or the
Committee has been named as a party.  In
addition, if a court determines that a spouse or former spouse of a Participant
has an interest in the Participant’s benefits under the Plan in connection with
a property settlement or otherwise, the Committee, in its sole discretion,
shall have the right, notwithstanding any election made by a Participant, to
immediately distribute the spouse’s or former spouse’s interest in the
Participant’s benefits under the Plan to that spouse or former spouse.

 

19.16                     Distribution in the Event of Taxation.

 

(a)                                  In General.  If, for any reason, all or any portion of a
Participant’s benefits under this Plan becomes taxable to the Participant prior
to receipt, a Participant may petition the Committee before a Change in
Control, or the trustee of the Trust after a Change in Control, for a
distribution of that portion of his or her benefit that has become
taxable.  Upon the grant of such a
petition, which grant shall not be unreasonably withheld (and, after a Change
in Control, shall be granted), a Participant’s Employer shall distribute to the
Participant immediately available funds in an amount equal to the taxable
portion of his or her benefit (which amount shall not exceed a Participant’s
unpaid vested Account Balance under the Plan). 
If the petition is granted, the tax liability distribution shall be made
within 90 days of the date when the Participant’s petition is granted.  Such a distribution shall affect and reduce
the benefits to be paid under this Plan.

 

(b)                                 Trust.  If the
Trust terminates in accordance with its terms and benefits are distributed from
the Trust to a Participant in accordance therewith, the Participant’s benefits
under this Plan shall be reduced to the extent of such distributions.

 

35

 

19.17                     Insurance.  The Employers, on their own behalf or on
behalf of the trustee of the Trust, and, in their sole discretion, may apply
for and procure insurance on the life of the Participant, in such amounts and
in such forms as the Trust may choose. 
The Employers or the trustee of the Trust, as the case may be, shall be
the sole owner and beneficiary of any such insurance.  The Participant shall have no interest whatsoever in any such
policy or policies, and at the request of the Employers shall submit to medical
examinations and supply such information and execute such documents as may be
required by the insurance company or companies to whom the Employers have
applied for insurance.

 

19.18                     Legal Fees To Enforce Rights After Change in Control.  The Principal Sponsor and each Employer is
aware that upon the occurrence of a Change in Control, the Board or the board
of directors of a Participant’s Employer (which might then be composed of new
members) or a shareholder of the Principal Sponsor or the Participant’s
Employer, or of any successor corporation might then cause or attempt to cause
the Principal Sponsor, the Participant’s Employer or such successor to refuse
to comply with its obligations under the Plan and might cause or attempt to
cause the Principal Sponsor or the Participant’s Employer to institute, or may
institute, litigation seeking to deny Participants the benefits intended under
the Plan.  In these circumstances, the
purpose of the Plan could be frustrated. 
Accordingly, if, following a Change in Control, it should appear to any
Participant that the Principal Sponsor, the Participant’s Employer or any
successor corporation has failed to comply with any of its obligations under
the Plan or any agreement thereunder or, if the Principal Sponsor, such
Employer or any other person takes any action to declare the Plan void or
unenforceable or institutes any litigation or other legal action designed to
deny, diminish or to recover from any Participant the benefits intended to be
provided, then the Principal Sponsor and the Participant’s Employer irrevocably
authorize such Participant to retain counsel of his or her choice at the
expense of the Principal Sponsor and the Participant’s Employer (who shall be
jointly and severally liable) to represent such Participant in connection with
the initiation or defense of any litigation or other legal action, whether by
or against the Principal Sponsor, the Participant’s Employer or any director,
officer, shareholder or other person affiliated with the Principal Sponsor, the
Participant’s Employer or any successor thereto in any jurisdiction.

 

IN WITNESS WHEREOF, the
Principal Sponsor has signed this Plan document as of November 25, 2002.

 

	
   

  	
  “Principal Sponsor”

  
	
   

  	
  Hormel Foods Corporation, a Delaware corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MICHAEL J. McCOY

  
	
   

  	
  Title:

  	
  Executive Vice President and Chief

  
	
   

  	
   

  	
  Financial Officer

  

 

36EXHIBIT 10.8

 

FORM OF INDEMNIFICATION AGREEMENT FOR
DIRECTORS AND OFFICERS

 

AGREEMENT

 

This
Agreement, made and entered into this
       day of
       , (“Agreement”), by and between
Hormel Foods Corporation, a Delaware corporation (“Company”), and
             (“Indemnitee”):

 

WHEREAS,
highly competent persons have become more reluctant to serve publicly-held
corporations as directors or in other capacities unless they are provided with
adequate protection through insurance or adequate indemnification against
inordinate risks of claims and actions against them arising out of their
service to and activities on behalf of the corporation; and

 

WHEREAS, the
Board of Directors of the Company (the “Board”) has determined that, in order
to attract and retain qualified individuals, the Company will attempt to
maintain on an ongoing basis, at its sole expense, liability insurance to
protect persons serving the Company and its subsidiaries from certain
liabilities.  Although the furnishing of
such insurance has been a customary and widespread practice among United
States-based corporations and other business enterprises, the Company believes
that, given current market conditions and trends, such insurance may be
available to it in the future only at higher premiums and with more
exclusions.  At the same time,
directors, officers, and other persons in service to corporations or business
enterprises are being increasingly subjected to expensive and time-consuming
litigation relating to, among other things, matters that traditionally would
have been brought only against the Company or business enterprise itself; and

 

WHEREAS, the
uncertainties relating to such insurance and to indemnification have increased
the difficulty of attracting and retaining such persons; and

 

WHEREAS, the
Board has determined that the increased difficulty in attracting and retaining
such persons is detrimental to the best interests of the Company’s stockholders
and that the Company should act to assure such persons that there will be
increased certainty of such protection in the future; and

 

WHEREAS, it is
reasonable, prudent and necessary for the Company contractually to obligate
itself to indemnify, and to advance expenses on behalf of, such persons to the
fullest extent permitted by applicable law so that they will serve or continue
to serve the Company free from undue concern that they will not be so
indemnified; and

 

WHEREAS, this
Agreement is a supplement to and in furtherance of the By-laws of the Company
and any resolutions adopted pursuant thereto, and shall not be

 

1

 

deemed a substitute therefore,
nor to diminish or abrogate any rights of Indemnitee thereunder; and

 

WHEREAS, each
of Section 145 of the General Corporation Law of the State of Delaware and
the By-laws is nonexclusive, and therefore contemplates that contracts may be
entered into with respect to indemnification of directors, officers and
employees; and

 

WHEREAS,
Indemnitee is willing to serve, continue to serve and to take on additional
service for or on behalf of the Company on the condition that he be so
indemnified;

 

NOW,
THEREFORE, in consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as follows:

 

Section 1.  Services by Indemnitee.  Indemnitee agrees to serve as a director or
officer of the Company, and/or at the request of the Company, as a director or
officer of another Enterprise. 
Indemnitee may at any time and for any reason resign from such position
(subject to any other contractual obligation or any obligation imposed by
operation of law), in which event the Company shall have no obligation under
this Agreement to continue Indemnitee in such position.  This Agreement shall not be deemed an
employment contract between the Company (or any of its subsidiaries) and
Indemnitee.  Indemnitee specifically
acknowledges that Indemnitee’s employment with the Company (or any of its
subsidiaries), if any, is at will, and that Indemnitee may be discharged at any
time for any reason, with or without cause, except as may be otherwise provided
in any written employment contract between Indemnitee and the Company (or any
of its subsidiaries), other applicable formal severance policies duly adopted
by the Board, or, with respect to service as a director or officer of the
Company, by the Company’s Certificate of Incorporation, the Company’s By-laws,
and the General Corporation Law of the State of Delaware.  The foregoing notwithstanding, this
Agreement shall continue in force after Indemnitee has ceased to serve as an
officer or director of the Company.

 

Section 2.  Indemnification - General.  The Company shall indemnify, and advance
Expenses (as hereinafter defined) to, Indemnitee (a) as provided in this
Agreement and (b) (subject to the provisions of this Agreement) to the fullest
extent permitted by applicable law in effect on the date hereof and as such law
may be amended from time to time.  The
rights of Indemnitee provided under the preceding sentence shall include, but shall
not be limited to, the rights set forth in the other Sections of this
Agreement.

 

Section 3.  Proceedings Other Than Proceedings by or
in the Right of the Company. 
Subject to the provisions of this Agreement, Indemnitee shall be
entitled to the rights of indemnification provided in this Section 3 if,
by reason of his Corporate Status (as hereinafter defined), he is, or is
threatened to be made, a party to or a participant in any Proceeding (as
hereinafter defined), other than a Proceeding by or in the right of the

 

2

 

Company.  Pursuant to this Section 3 and subject
to the provisions of this Agreement, Indemnitee shall be indemnified against
all Expenses, judgments, penalties, fines and amounts paid in settlement
actually and reasonably incurred by him or on his behalf in connection with
such Proceeding or any claim, issue or matter therein, if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Company and, with respect to any criminal Proceeding, had
no reasonable cause to believe his conduct was unlawful.

 

Section 4.  Proceedings by or in the Right of the
Company.  Indemnitee shall be
entitled to the rights of indemnification provided in this Section 4 but
subject to the provisions of this Agreement if, by reason of his Corporate
Status, he is, or is threatened to be made, a party to or a participant in any
Proceeding brought by or in the right of the Company to procure a judgment in its
favor.  Pursuant to this Section but
subject to the provisions of this Agreement, Indemnitee shall be indemnified
against all Expenses actually and reasonably incurred by him or on his behalf
in connection with such Proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company; provided, however, that, if applicable law so provides,
no indemnification against such Expenses shall be made in respect of any claim,
issue or matter in such Proceeding as to which Indemnitee shall have been
adjudged to be liable to the Company unless and to the extent that the Court of
Chancery of the State of Delaware, or the court in which such Proceeding shall
have been brought or is pending, shall determine that such indemnification may
be made.

 

Section 5.  Indemnification for Expenses of a Party
Who is Wholly or Partly Successful. 
Notwithstanding any other provision of this Agreement, to the extent
that Indemnitee is, by reason of his Corporate Status, a party to (or a
participant in) and is successful, on the merits or otherwise, in defense of
any Proceeding (including dismissal without prejudice), he shall be indemnified
to the maximum extent permitted by law against all Expenses actually and
reasonably incurred by him or on his behalf in connection therewith.  If Indemnitee is not wholly successful in
defense of such Proceeding but is successful, on the merits or otherwise, as to
one or more but less than all claims, issues or matters in such Proceeding, the
Company shall indemnify Indemnitee against all Expenses actually and reasonably
incurred by him or on his behalf in connection with each successfully resolved
claim, issue or matter.  For purposes of
this Section and without limitation, the termination of any claim, issue or
matter in such a Proceeding by dismissal, with or without prejudice, shall be
deemed to be a successful result as to such claim, issue or matter.

 

Section 6.  Indemnification for Expenses of a Witness.  Notwithstanding any other provision of this
Agreement, to the extent that Indemnitee is, by reason of his Corporate Status,
a witness in any Proceeding to which Indemnitee is not a party, he shall be
indemnified against all Expenses actually and reasonably incurred by him or on
his behalf in connection therewith.

 

3

 

Section 7.  Advancement of Expenses.  Notwithstanding any provision of this
Agreement to the contrary, the Company shall advance all reasonable Expenses
incurred by or on behalf of Indemnitee in connection with any Proceeding in
which Indemnitee is involved by reason of Indemnitee’s Corporate Status within
ten days after the receipt by the Company of a statement or statements from
Indemnitee requesting such advance or advances from time to time, whether prior
to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the
Expenses incurred by Indemnitee and shall include or be preceded or accompanied
by an undertaking by or on behalf of Indemnitee to repay any Expenses advanced
if it shall ultimately be determined that Indemnitee is not entitled to be
indemnified against such Expenses.  Any
advances and undertakings to repay pursuant to this Section 7 shall be
unsecured and interest free.

 

Section 8.  Procedure for Determination of
Entitlement to Indemnification.

 

(a)                                  To
obtain indemnification under this Agreement, Indemnitee shall submit to the
Company a written request (to be delivered in accordance with Section 21
hereof to the Secretary of the Company), including therein or therewith such
documentation and information as is reasonably available to Indemnitee and is
reasonably necessary to determine whether and to what extent Indemnitee is
entitled to indemnification.  The
Secretary of the Company shall, promptly upon receipt of such a request for
indemnification, advise the Board in writing that Indemnitee has requested
indemnification.

 

(b)                                 Upon
written request by Indemnitee for indemnification pursuant to Section 8(a)
hereof, a determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall be made in the specific case:  (i) if a Change in Control (as hereinafter
defined) shall have occurred, by Independent Counsel (as hereinafter defined)
in a written opinion to the Board of Directors, a copy of which shall be
delivered to Indemnitee; or (ii) if a Change in Control shall not have
occurred, (A) by a majority vote of the Disinterested Directors (as hereinafter
defined), even though less than a quorum of the Board, or (B) if there are no
such Disinterested Directors or, if such Disinterested Directors so direct, by
Independent Counsel in a written opinion to the Board, a copy of which shall be
delivered to Indemnitee; and, if it is so determined that Indemnitee is
entitled to indemnification, payment to Indemnitee shall be made within ten
(10) days after such determination. 
Indemnitee shall cooperate with the person, persons or entity making
such determination with respect to Indemnitee’s entitlement to indemnification,
including providing to such person, persons or entity upon reasonable advance
request any documentation or information which is not privileged or otherwise
protected from disclosure and which is reasonably available to Indemnitee and
reasonably necessary to such determination. 
Any costs or expenses (including attorneys’ fees and disbursements)
incurred by Indemnitee in so cooperating with the person, persons or entity
making such determination shall be borne by the Company (irrespective of the
determination as to Indemnitee’s entitlement to indemnification) and the
Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

4

 

(c)                                  In
the event the determination of entitlement to indemnification is to be made by
Independent Counsel pursuant to Section 8(b) hereof, the Independent
Counsel shall be selected as provided in this Section 8(c).  If a Change in Control shall not have
occurred, the Independent Counsel shall be selected by the Disinterested
Directors or, if there are no such Disinterested Directors, by the Board of
Directors, and the Company shall give written notice to Indemnitee advising him
of the identity of the Independent Counsel so selected.  If a Change in Control shall have occurred,
the Independent Counsel shall be selected by Indemnitee (unless Indemnitee
shall request that such selection be made by the Board of Directors, in which
event the preceding sentence shall apply), and Indemnitee shall give written
notice to the Company advising it of the identity of the Independent Counsel so
selected.  In either event, Indemnitee
or the Company, as the case may be, may, within 10 days after such written
notice of selection shall have been given, deliver to the Company or to
Indemnitee, as the case may be, a written objection to such selection; provided,
however, that such objection may be asserted only on the ground that the
Independent Counsel so selected does not meet the requirements of “Independent
Counsel” as defined in Section 17 of this Agreement, and the objection
shall set forth with particularity the factual basis of such assertion.  Absent a proper and timely objection, the
person so selected shall act as Independent Counsel.  If such written objection is so made and substantiated, the
Independent Counsel so selected may not serve as Independent Counsel unless and
until such objection is withdrawn or a court has determined that such objection
is without merit.  If, within 20 days
after submission by Indemnitee of a written request for indemnification
pursuant to Section 8(a) hereof, no Independent Counsel shall have been
selected and not objected to, either the Company or Indemnitee may petition the
Court of Chancery of the State of Delaware or other court of competent
jurisdiction for resolution of any objection which shall have been made by the
Company or Indemnitee to the other’s selection of Independent Counsel and/or
for the appointment as Independent Counsel of a person selected by the Court or
by such other person as the Court shall designate, and the person with respect
to whom all objections are so resolved or the person so appointed shall act as
Independent Counsel under Section 8(b) hereof.  Upon the due commencement of any judicial proceeding or
arbitration pursuant to Section 10(a) of this Agreement, Independent
Counsel shall be discharged and relieved of any further responsibility in such
capacity (subject to the applicable standards of professional conduct then
prevailing).

 

(d)                                 The
Company shall not be required to obtain the consent of the Indemnitee to the
settlement of any Proceeding which the Company has undertaken to defend if the
Company assumes full and sole responsibility for such settlement and the
settlement grants the Indemnitee a complete and unqualified release in respect
of the potential liability.  The Company
shall not be liable for any amount paid by the Indemnitee in settlement of any
Proceeding that is not defended by the Company, unless the Company has
consented to such settlement, which consent shall not be unreasonably withheld.

 

5

 

Section 9.  Presumptions and Effect of Certain
Proceedings.

 

(a)                                  In
making a determination with respect to entitlement to indemnification hereunder,
the person or persons or entity making such determination shall presume that
Indemnitee is entitled to indemnification under this Agreement if Indemnitee
has submitted a request for indemnification in accordance with
Section 8(a) of this Agreement, and the Company shall have the burden of
proof to overcome that presumption in connection with the making by any person,
persons or entity of any determination contrary to that presumption.

 

(b)                                 If
the person or persons empowered or selected under Section 8 of this
Agreement to determine whether Indemnitee is entitled to indemnification shall
not have made a determination within sixty (60) days after receipt by the
Company of the request therefor, the requisite determination of entitlement to
indemnification shall be deemed to have been made and Indemnitee shall be
entitled to such indemnification, absent (i) a misstatement by Indemnitee of a
material fact, or an omission of a material fact necessary to make Indemnitee’s
statement not materially misleading, in connection with the request for
indemnification, or (ii) a prohibition of such indemnification under applicable
law; provided, however, that such 60-day period may be extended
for a reasonable time, not to exceed an additional thirty (30) days, if the person
or persons making the determination with respect to entitlement to
indemnification in good faith requires such additional time for the obtaining
or evaluating of documentation and/or information relating thereto; and
provided, further, that the foregoing provisions of this Section 9(b)
shall not apply if the determination of entitlement to indemnification is to be
made by Independent Counsel pursuant to Section 8(b) of this Agreement.

 

(c)                                  The
termination of any Proceeding or of any claim, issue or matter therein, by
judgment, order, settlement or conviction, or upon a plea of nolo  contendere
or its equivalent, shall not (except as otherwise expressly provided in this
Agreement) of itself adversely affect the right of Indemnitee to
indemnification or create a presumption that Indemnitee did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Company or, with respect to any criminal Proceeding,
that Indemnitee had reasonable cause to believe that his conduct was unlawful.

 

(d)                                 Reliance
as Safe Harbor.  For purposes of any
determination of Good Faith, Indemnitee shall be deemed to have acted in Good
Faith if Indemnitee’s action is based on the records or books of account of the
Enterprise, including financial statements, or on information supplied to
Indemnitee by the officers of the Enterprise in the course of their duties, or
on the advice of legal counsel for the Enterprise or on information or records
given or reports made to the Enterprise by an independent certified public
accountant or by an appraiser or other expert selected with the reasonable care
by the Enterprise.  The provisions of
this Section 9(d) shall not be deemed to be exclusive or

 

6

 

to limit in any way the other
circumstances in which the Indemnitee may be deemed to have met the applicable
standard of conduct set forth in this Agreement.

 

(e)                                  Actions
of Others.  The knowledge and/or
actions, or failure to act, of any director, officer, agent or employee of the
Enterprise shall not be imputed to Indemnitee for purposes of determining the
right to indemnification under this Agreement.

 

Section 10.  Remedies of Indemnitee.

 

(a)                                  In
the event that (i) advancement of Expenses is not timely made pursuant to
Section 7 of this Agreement, (ii) no determination of entitlement to
indemnification shall have been made pursuant to Section 8(b) of this
Agreement within 90 days after receipt by the Company of the request for indemnification,
(iii) payment of indemnification is not made pursuant to Section 5, 6, the
last sentence of Section 8(b) or the last sentence of Section 17(h)
of this Agreement within ten (10) days after receipt by the Company of a
written request therefor, or (iv) payment of indemnification pursuant to
Section 3 or 4 of this Agreement is not made within ten (10) days after a
determination has been made that Indemnitee is entitled to indemnification,
Indemnitee shall be entitled to an adjudication by the Court of Chancery of the
State of Delaware of his entitlement to such indemnification or advancement of
Expenses.  Alternatively, in accordance
with this Section 10, Indemnitee, at his option, may seek an award in
arbitration to be conducted by a single arbitrator pursuant to the Commercial
Arbitration Rules of the American Arbitration Association.  Indemnitee shall commence such proceeding
seeking an adjudication or an award in arbitration within 180 days following
the date on which Indemnitee first has the right to commence such proceeding
pursuant to this Section 10(a); provided, however, that the
foregoing clause shall not apply in respect of a proceeding brought by
Indemnitee to enforce his rights under Section 5 of this Agreement.  The Company shall not oppose Indemnitee’s
right to seek any such adjudication or award in arbitration.

 

(b)                                 If
a determination shall have been made pursuant to Section 8(b) of this
Agreement that Indemnitee is entitled to indemnification, the Company shall be
bound by such determination in any judicial proceeding or arbitration,
commenced pursuant to this Section 10, absent (i) a misstatement by
Indemnitee of a material fact, or an omission of a material fact necessary to
make Indemnitee’s statement not materially misleading, in connection with the
request for indemnification, or (ii) a prohibition of such indemnification
under applicable law.

 

(c)                                  In
the event that Indemnitee, pursuant to this Section 10, seeks a judicial
adjudication of or an award in arbitration to enforce his rights under, or to
recover damages for breach of, this Agreement, Indemnitee shall be entitled to
recover from the Company, and shall be indemnified by the Company against, any
and all expenses (of the types described in the definition of Expenses in
Section 17 of this

 

7

 

Agreement) actually and
reasonably incurred by him in such judicial adjudication or arbitration, but
only if (and only to the extent) he prevails therein.  If it shall be determined in said judicial adjudication or
arbitration that Indemnitee is entitled to receive part but not all of the
indemnification or advancement of Expenses sought, the expenses incurred by
Indemnitee in connection with such judicial adjudication or arbitration shall
be appropriately prorated.

 

(d)                                 The
Company shall be precluded from asserting in any judicial proceeding or
arbitration commenced pursuant to this Section 10 that the procedures and
presumptions of this Agreement are not valid, binding and enforceable and shall
stipulate in any such court or before any such arbitrator that the Company is
bound by all the provisions of this Agreement.

 

Section 11.  Non-Exclusivity; Survival of Rights;
Insurance; Subrogation.

 

(a)                                  The
rights of indemnification and to receive advancement of Expenses as provided by
this Agreement shall not be deemed exclusive of any other rights to which
Indemnitee may at any time be entitled under applicable law, the Company’s
Certificate of Incorporation, the Company’s By-laws, any other agreement, a
vote of stockholders or a resolution of directors, or otherwise.  No amendment, alteration or repeal of this
Agreement or of any provision hereof shall limit or restrict any right of
Indemnitee under this Agreement in respect of any action taken or omitted by
such Indemnitee in his Corporate Status prior to such amendment, alteration or
repeal.  To the extent that a change in
the General Corporation Law of the State of Delaware, whether by statute or
judicial decision, permits greater indemnification or advancement of Expenses
than would be afforded currently under the Company’s By-laws and this
Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy
by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is
intended to be exclusive of any other right or remedy, and every other right
and remedy shall be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other right or remedy.

 

(b)                                 To
the extent that the Company maintains an insurance policy or policies providing
liability insurance for directors, officers, employees, or agents of the
Company or of any other Enterprise, Indemnitee shall be covered by such policy
or policies in accordance with its or their terms to the maximum extent of the
coverage available for any such director, officer, employee or agent under such
policy or policies.

 

(c)                                  In
the event of any payment under this Agreement, the Company shall be subrogated
to the extent of such payment to all of the rights of recovery of Indemnitee,
who shall execute all papers required and take all action necessary to secure

 

8

 

such rights, including
execution of such documents as are necessary to enable the Company to bring
suit to enforce such rights.

 

(d)                                 The
Company shall not be liable under this Agreement to make any payment of amounts
otherwise indemnifiable (or for which advancement is provided hereunder)
hereunder if and to the extent that Indemnitee has otherwise actually received
such payment under any insurance policy, contract, agreement or otherwise.

 

(e)                                  The
Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee
who is or was serving at the request of the Company as a director, officer,
employee or agent of any other Enterprise shall be reduced by any amount
Indemnitee has actually received as indemnification or advancement of expenses
from such other Enterprise.

 

Section 12.  Duration of Agreement.  This Agreement shall continue until and
terminate upon the later of: (a) 10 years after the date that Indemnitee shall
have ceased to serve as a director or officer of the Company or of any other
Enterprise which Indemnitee served at the request of the Company pursuant to
this Agreement; or (b) the final termination of any Proceeding then pending in
respect of which Indemnitee is granted rights of indemnification or advancement
of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to
Section 10 of this Agreement relating thereto.  This Agreement shall be binding upon the Company and its
successors and assigns and shall inure to the benefit of Indemnitee and his
heirs, executors and administrators.

 

Section 13.  Severability.  If any provision or provisions of this
Agreement shall be held to be invalid, illegal or unenforceable for any reason
whatsoever: (a) the validity, legality and enforceability of the remaining
provisions of this Agreement (including without limitation, each portion of any
Section of this Agreement containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or unenforceable)
shall not in any way be affected or impaired thereby and shall remain
enforceable to the fullest extent permitted by law; (b) such provision or
provisions shall be deemed reformed to the extent necessary to conform to
applicable law and to give the maximum effect to the intent of the parties
hereto; and (c) to the fullest extent possible, the provisions of this
Agreement (including, without limitation, each portion of any Section of this Agreement
containing any such provision held to be invalid, illegal or unenforceable,
that is not itself invalid, illegal or unenforceable) shall  be construed so as to give effect to the
intent manifested thereby.

 

Section 14.  Exception to Right of Indemnification or
Advancement of Expenses. 
Notwithstanding any other provision of this Agreement, but subject to
Section 10(d) hereof, Indemnitee shall not be entitled to indemnification
or advancement of Expenses under this Agreement with respect to any Proceeding
brought by Indemnitee, or any claim therein, unless the bringing of such
Proceeding or making of such claim shall have been approved by the Board of
Directors.

 

9

 

Section 15.  Identical Counterparts.  This Agreement may be executed in one or
more counterparts, each of which shall for all purposes be deemed to be an
original but all of which together shall constitute one and the same
Agreement.  Only one such counterpart
signed by the party against whom enforceability is sought needs to be produced
to evidence the existence of this Agreement.

 

Section 16.  Headings.  The headings of the paragraphs of this Agreement are inserted for
convenience only and shall not be deemed to constitute part of this Agreement
or to affect the construction thereof.

 

Section 17.  Definitions.  For purposes of this Agreement:

 

(a)                                  “Change
in Control” means a change in control of the Company occurring after the
Effective Date of a nature that would be required to be reported in response to
Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item
on any similar schedule or form) promulgated under the Securities Exchange Act
of 1934 (the “Act”), whether or not the Company is then subject to such
reporting requirement; provided, however, that, without
limitation, such a Change in Control shall be deemed to have occurred if after
the Effective Date (i) any “person” (as such term is used in Sections 13(d) and
14(d) of the Act) other than (a) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or (b) a corporation
owned directly or indirectly by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company
is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act),
directly or indirectly, of securities of the Company representing 50% or more
of the combined voting power of the Company’s then outstanding securities
without the prior approval of at least two-thirds of the members of the Board
in office immediately prior to such person attaining such percentage interest;
(ii) there occurs a proxy contest, or the Company is a party to a merger,
consolidation, sale of assets, plan of liquidation or other reorganization not
approved by at least two-thirds of the members of the Board then in office, as
a consequence of which members of the Board in office immediately prior to such
transaction or event constitute less than a majority of the Board thereafter;
or (iii) during any period of two consecutive years, other than as a result of
an event described in clause (a)(ii) of this Section 17, individuals
who at the beginning of such period constituted the Board (including for this
purpose any new director whose election or nomination for election by the
Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of such
period) cease for any reason to constitute at least a majority of the Board.

 

(b)                                 “Corporate
Status” describes the status of a person who is or was a director, officer,
employee or agent of the Company or of any other Enterprise.

 

10

 

(c)                                  “Disinterested
Director” means a director of the Company who is not and was not a party to the
Proceeding in respect of which indemnification is sought by Indemnitee.

 

(d)                                 “Effective
Date” means the date first written above.

 

(e)                                  “Enterprise”
shall mean: (i) the Company and/or any entity in which the Company has an
equity interest exceeding five percent (5%); (ii) an employee welfare or
benefit plan of the Company and/or of any entity in which the Company has an
equity interest exceeding five percent (5%); and/or (iii) any other corporation,
entity, partnership, joint venture, trust, employee welfare or benefit plan or
other enterprise of which Indemnitee is or was serving at the express written
request of the Company (by the Company’s Chief Executive Officer or, in respect
of its Chief Executive Officer, by its Executive Vice President) as provided
for in this Agreement as a director, officer, employee, agent or fiduciary,
except that if the Enterprise is a for profit business in which the Company
does not have an equity interest exceeding five percent (5%) then the
Indemitee’s service must have been approved by the Executive Committee of the
Board of Directors of the Company.

 

(f)                                    “Expenses”
shall include all reasonable attorneys’ fees, retainers, court costs,
transcript costs, fees of experts, witness fees, travel expenses, duplicating
costs, printing and binding costs, telephone charges, postage, delivery service
fees, and all other disbursements or expenses of the types customarily incurred
in connection with prosecuting, defending, preparing to prosecute or defend,
investigating, being or preparing to be a witness in, or otherwise
participating in, a Proceeding.

 

(g)                                 “Good
Faith” shall mean Indemnitee having acted in good faith and in a manner
Indemnitee reasonably believed to be in or not opposed to the best interests of
the Company, and, with respect to any criminal Proceeding, having had no
reasonable cause to believe Indemnitee’s conduct was unlawful.

 

(h)                                 “Independent
Counsel” means a law firm, or a member of a law firm, that is among (or is a
member of a law firm that is among) the twenty largest law firms in Minneapolis
or St. Paul, Minnesota and that is experienced in matters of corporation law
and neither presently is, nor in the past five years has been, retained to
represent: (i) the Company or Indemnitee in any matter material to either such
party (other than with respect to matters concerning the Indemnitee under this
Agreement, or of other indemnitees under similar indemnification agreements),
or (ii) any other party to the Proceeding giving rise to a claim for
indemnification hereunder. 
Notwithstanding the foregoing, the term “Independent Counsel” shall not
include any person who, under the applicable standards of professional conduct
then prevailing, would have a conflict of interest in representing either the
Company or Indemnitee in an action to determine Indemnitee’s rights under this
Agreement.  The Company agrees to pay
the reasonable fees and expenses of the Independent Counsel referred to above
and to fully indemnify such

 

11

 

counsel against any and all
Expenses, claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.

 

(i)                                     “Proceeding”
includes any threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry, administrative
hearing or any other actual, threatened or completed proceeding, whether
brought by or in the right of the Company or otherwise, including any
counterclaims therein, and whether civil, criminal, administrative or
investigative, in which Indemnitee was, is or will be involved as a party or
otherwise, by reason of the fact that Indemnitee is or was a director or
officer of the Company, by reason of any action taken by him or of any inaction
on his part while acting as director or officer of the Company, or by reason of
the fact that he is or was serving at the request of the Company as a director,
officer, employee or agent of another Enterprise, in each case whether or not
he is acting or serving in any such capacity at the time any liability or
expense is incurred for which indemnification or advancement of expenses can be
provided under this Agreement; except one initiated by a Indemnitee pursuant to
Section 10 of this Agreement to enforce his rights under this Agreement.

 

(j)                                     References
to “fines” shall include any excise tax assessed with respect to any employee
welfare or benefit plan; references to “serving at the request of the Company”
shall include any service as a director, officer, employee or agent of the
Company which imposes duties on, or involves services by, such director,
officer, employee or agent with respect to an employee welfare or benefit plan,
other than as participants or beneficiaries; and a person who acted in good
faith and in the manner he reasonably believed to be in the interests of the
participants and beneficiaries of an employee welfare or benefit plan shall be
deemed to have acted in manner “not opposed to the best interest of the
Company” as referred to in this Agreement.

 

Section 18.  Enforcement.

 

(a)                                  The
Company expressly confirms and agrees that it has entered into this Agreement
and assumed the obligations imposed on it hereby in order to induce Indemnitee
to serve as a director or officer of the Company, and the Company acknowledges
that Indemnitee is relying upon this Agreement in serving as a director or
officer of the Company.

 

(b)                                 This
Agreement constitutes the entire agreement between the parties hereto with
respect to the subject matter hereof and supersedes all prior agreements and
understandings, oral, written and implied, between the parties hereto with
respect to the subject matter hereof.

 

Section 19.  Modification and Waiver.  No supplement, modification or amendment of
this Agreement shall be binding unless executed in writing by both of the
parties hereto.  No waiver of any of the
provisions of this Agreement shall be deemed or

 

12

 

shall constitute a waiver of
any other provisions hereof (whether or not similar) nor shall such waiver
constitute a continuing waiver.

 

Section 20.  Notice by Indemnitee.  Indemnitee agrees promptly to notify the
Company in writing upon being served with any summons, citation, subpoena,
complaint, indictment, information or other document relating to any Proceeding
or matter which may be subject to indemnification or advancement of Expenses
covered hereunder.  The failure of Indemnitee
to so notify the Company shall not relieve the Company of any obligation which
it may have to the Indemnitee under this Agreement or otherwise, except to the
extent the Company is materially prejudiced by such failure.

 

Section 21.  Notices.  All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been duly given if (i)
delivered by hand and receipted for by the party to whom said notice or other
communication shall have been directed, or (ii) mailed by certified or
registered mail with postage prepaid, on the third business day after the date
on which it is so mailed:

 

(a)                                  If
to Indemnitee, to:

 

 

(b)                                 If
to the Company, to:

 

Hormel Foods
Corporation

1 Hormel Place

Austin, Minnesota  55912-3680

Attention: Secretary

Fax: 507-437-5135

 

or to such other address as may
have been furnished to Indemnitee by the Company or to the Company by
Indemnitee, as the case may be.

 

Section 22.  Contribution.  To the fullest extent permissible under
applicable law, if the indemnification provided for in this Agreement is
unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of
indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee,
whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid
in settlement and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is deemed fair
and reasonable in light of all of the circumstances of such Proceeding in order
to reflect (i) the relative benefits received by the Company and Indemnitee as
a result of the event(s) and/or transaction(s) giving cause to such Proceeding;
and/or (ii) the relative fault of the Company (and its directors, officers,

 

13

 

employees and agents) and
Indemnitee in connection with such event(s) and/or transaction(s).

 

Section 23.  Governing Law; Submission to
Jurisdiction; Appointment of Agent for Service of Process.  This Agreement and the legal relations among
the parties shall be governed by, and construed and enforced in accordance
with, the laws of the State of Delaware, without regard to its conflict of laws
rules.  Except with respect to any
arbitration commenced by Indemnitee pursuant to Section 10(a) of this
Agreement, the Company and Indemnitee hereby irrevocably and unconditionally
(i) agree that any action or proceeding arising out of or in connection with
this Agreement shall be brought only in the Chancery Court of the State of
Delaware (the “Delaware Court”), and not in any other state or federal court in
the United States of America or any court in any other country, (ii) consent to
submit to the exclusive jurisdiction of the Delaware Court for purposes of any
action or proceeding arising out of or in connection with this Agreement, (iii)
appoint, to the extent such party is not a resident of the State of Delaware,
irrevocably RL&F Service Corp., One Rodney Square, 10th Floor, 10th and
King Streets, Wilmington, Delaware 19801 as its agent in the State of Delaware
as such party’s agent for acceptance of legal process in connection with any
such action or proceeding against such party with the same legal force and
validity as if served upon such party personally within the State of Delaware,
(iv) waive any objection to the laying of venue of any such action or
proceeding in the Delaware Court, and (v) waive, and agree not to plead or to
make, any claim that any such action or proceeding brought in the Delaware
Court has been brought in an improper or otherwise inconvenient forum.

 

Section 24.  Miscellaneous.  Use of the masculine pronoun shall be deemed
to include usage of the feminine pronoun where appropriate.

 

14

 

IN WITNESS
WHEREOF, the parties hereto have executed this Agreement on the day and year
first above written.

 

 

	
   

  	
  HORMEL FOODS
  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Indemnitee:

  

 

15

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