Document:

EXHIBIT
10.3

 

HORMEL
FOODS CORPORATION

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

(2002
Restatement)

 

 

First Effective
January 1, 1976

As Amended and
Restated Effective October 26, 2002

 

 

HORMEL

SUPPLEMENTAL
EXECUTIVE RETIREMENT PLAN

(2002
Restatement)

 

TABLE
OF CONTENTS

 

	
  SECTION
  1.

  	
  INTRODUCTION

  
	
   

  	
   

  	
   

  
	
   

  	
  1.1.

  	
  Amendment
  and Restatement

  
	
   

  	
  1.2.

  	
  Unfunded
  Obligation

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
  PLAN
  NAME

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.

  	
  PARTICIPANTS

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  General Rule

  
	
   

  	
  3.2.

  	
  Specific Exclusion

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
  BENEFIT
  FOR PARTICIPANTS

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  General Amount Rule

  
	
   

  	
  4.2.

  	
  Special Amount Rule

  
	
   

  	
  4.3.

  	
  Form of Benefit

  
	
   

  	
  4.4.

  	
  Forfeiture of Benefits

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.

  	
  BENEFIT
  FOR BENEFICIARIES

  
	
   

  	
   

  	
   

  
	
   

  	
  5.1.

  	
  General Amount Rule

  
	
   

  	
  5.2.

  	
  Special
  Amount Rule

  
	
   

  	
  5.3.

  	
  Form of
  Benefit

  
	
   

  	
   

  	
   

  
	
  SECTION
  6.

  	
  COMMUTATION
  TO LUMP SUM

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  General Rule

  
	
   

  	
  6.2.

  	
  Executive Committee
  Members

  
	
   

  	
  6.3.

  	
  Complete Payment

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.

  	
  FUNDING

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  Funding

  
	
   

  	
  7.2.

  	
  Hedging Investments

  
	
   

  	
  7.3.

  	
  Consensual Creditor

  

 

i

 

	
  SECTION
  8.

  	
  GENERAL
  MATTERS

  
	
   

  	
   

  	
   

  
	
   

  	
  8.1.

  	
  Amendment and Termination

  
	
   

  	
  8.2.

  	
  ERISA Administrator

  
	
   

  	
  8.3.

  	
  Limited Benefits

  
	
   

  	
  8.4.

  	
  Spendthrift Provision

  
	
   

  	
  8.5.

  	
  Service of Process

  
	
   

  	
  8.6.

  	
  Plan
  Year

  
	
   

  	
  8.7.

  	
  § 162(m)
  Deferral

  
	
   

  	
   

  	
   

  
	
  SECTION
  9.

  	
  CLAIMS
  PROCEDURES

  
	
   

  	
   

  	
   

  
	
   

  	
  9.1.

  	
  Determinations

  
	
   

  	
  9.2.

  	
  Rules and Regulations

  
	
   

  	
  9.3.

  	
  Method of Executing
  Instruments

  
	
   

  	
  9.4.

  	
  Claims Procedure

  
	
   

  	
   

  	
  9.4.1. 

  	
  Original Claim

  
	
   

  	
   

  	
  9.4.2.

  	
  Claims Review Procedure

  
	
   

  	
   

  	
  9.4.3.

  	
  General Rules

  
	
   

  	
   

  	
  9.4.4.

  	
  Deadline to File Claim

  
	
   

  	
   

  	
  9.4.5.

  	
  Exhaustion of
  Administrative Remedies

  
	
   

  	
   

  	
  9.4.6.

  	
  Deadline to File Legal
  Action

  
	
   

  	
   

  	
  9.4.7.

  	
  Knowledge
  of Fact by Participant Imputed to Beneficiary

  
	
   

  	
  9.5.

  	
  Information
  Furnished by Participants

  
	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  RULES OF CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
   

  	
  10.1.

  	
  Defined Terms

  
	
   

  	
  10.2.

  	
  ERISA Status

  
	
   

  	
  10.3.

  	
  IRC Status

  
	
   

  	
  10.4.

  	
  Effect on Other Plans

  
	
   

  	
  10.5.

  	
  Disqualification

  
	
   

  	
  10.6.

  	
  Rules of Document
  Construction

  
	
   

  	
  10.7.

  	
  References to Laws

  
	
   

  	
  10.8.

  	
  Effect on Employment

  
	
   

  	
  10.9.

  	
  Choice of Law

  

 

ii

 

HORMEL

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

(2002 Restatement)

 

SECTION 1

 

INTRODUCTION

 

1.1.                              Amendment and Restatement.  Hormel Foods Corporation, a Delaware corporation, (hereinafter
the “Principal Sponsor”) heretofore, effective January 1, 1976, established a
nonqualified plan of deferred compensation which is now known as the “Hormel
Supplemental Executive Retirement Plan” (the “SERP”) and reserved to itself the
right to amend the SERP from time to time. 
The Principal Sponsor has heretofore amended the SERP on various
occasions.  By adoption of this amended
and restated document entitled “Hormel Supplemental Executive Retirement Plan
(2002 Restatement),” the Principal Sponsor hereby further amends and restates
the SERP in its entirety as applied to all persons who are Participants as of
October 26, 2002 (and actively employed at some time on or after that date) and
all persons who become Participants after that date.

 

1.2.                              Unfunded Obligation.  The obligation of the Principal Sponsor to make payments under
this SERP constitutes only the unsecured (but legally enforceable) promise of
the Principal Sponsor to make such payments. 
The Participant shall have no lien, prior claim or other security
interest in any property of the Principal Sponsor.  If a fund is established by the Principal Sponsor in connection
with this SERP, the property therein shall remain the sole and exclusive
property of the Principal Sponsor.  The
Principal Sponsor will pay the cost of this SERP out of its general assets.

 

SECTION 2

 

PLAN
NAME

 

This employee benefit plan shall be referred to as the
“Hormel Supplemental Executive Retirement Plan” (the “SERP”).  This document, as distinguished from the
plan maintained pursuant to this document, shall be referred to as the “Hormel
Supplemental Executive Retirement Plan (2002 Restatement)”  (the “SERP document”).

 

 

SECTION 3

 

PARTICIPANTS

 

3.1.                              General Rule.  The individuals eligible to participate in
and receive benefits under this SERP (i.e., to be “Participants” under this SERP)
are those individuals who are, on or after November 1, 1988, employees of
the Principal Sponsor who are, on or after November 1, 1988, participants
in the tax qualified, defined benefit, pension plan now known as the Hormel
Foods Corporation Salaried Employees’ Pension Plan (the “Pension Plan”) and who
are, on or after January 1, 1976, actively employed by the Principal
Sponsor.  Any employee who has become a
Participant in the SERP shall continue as a Participant until all benefits due
under the SERP have been paid (or forfeited) without regard to whether he
continues as a participant in the Pension Plan or an active employee.

 

3.2.                              Specific Exclusion.  Notwithstanding anything apparently to the
contrary in this SERP or in any written communication, summary, resolution or
document or oral communication, no individual shall be a Participant in this
SERP, develop benefits under this SERP or be entitled to receive benefits under
this SERP (either for himself or his survivors) unless such individual is a member
of a select group of management or highly compensated employees (as that
expression is used in ERISA).  If a
court of competent jurisdiction, any representative of the U.S. Department of
Labor or any other governmental, regulatory or similar body makes any direct or
indirect, formal or informal, determination that an individual is not a member
of a select group of management or highly compensated employees (as that
expression is used in ERISA), such individual shall not be (and shall not have
ever been) a Participant in this SERP at any time. If any person not so defined
has been erroneously treated as a 
Participant in this SERP, upon discovery of such error such person’s
erroneous participation shall immediately terminate ab initio and upon demand
such person shall be obligated to reimburse the Principal Sponsor for all
amounts erroneously paid to him or her.

 

SECTION 4

 

BENEFIT
FOR PARTICIPANTS

 

4.1.                              General Amount Rule.  This SERP
shall pay to Participants the excess, if any, of the amount, if any, determined
in “(a)” below over the amount, if any, determined in “(b)” below.

 

(a)                                  There
shall be determined the amount which would have been payable to the Participant
under the formula and rules of the Pension Plan (as the Pension Plan exists on
the date as of which such amount is determined) but determined:

 

2

 

(i)                                     without
regard to the benefit limitations under section 415 of the Code; and

 

(ii)                                  without
regard to the compensation limitation of section 401(a)(17) of the Code;
and

 

(iii)                               in
the case of a Participant who is both an officer and a member of the Executive
Committee on or after December 13, 1989 and who retires on an early
retirement pension under the Pension Plan and after completing thirty (30)
years of participation in the Pension Plan, as if there were no reduction in
benefits for early commencement; and

 

(iv)                              in
the case of a Participant who is both an officer and a member of the Executive
Committee on or after May 22, 1989, as if the thirty-five (35) years of
Benefit Service maximum did not apply; and

 

(v)                                 including,
when it would otherwise have been paid, income deferred under any nonqualified,
unfunded, elective deferred compensation plan maintained by the Principal
Sponsor; and

 

(vi)                              including,
once earned, each long term incentive plan award; provided, however, that if
the long term incentive plan award is earned with respect to a period longer
than one (1) year, the long term incentive plan award will be included as if it
had been earned and received ratably over the period with respect to which it
was earned; and

 

(vii)                           including,
when awarded, the fair market value of stock awarded under all restricted stock
plans as compensation for pension accrual purposes.

 

(b)                                 There
shall be determined the amount actually payable to the Participant from the
Pension Plan.

 

4.2.                              Special Amount Rule.  In the
case of any Participant who either:

 

(a)                                  had
annual earnings in excess of Seventy-Five Thousand Dollars ($75,000) from the
Principal Sponsor as of December 31, 1989, and had attained age fifty-five
(55) years as of October 28, 1989, or

 

(b)                                 had
annual earnings in excess of One Hundred Thousand Dollars ($100,000) from the
Principal Sponsor as of December 31, 1989, and had attained age fifty (50)
years as of October 28, 1989,

 

3

 

the amount determined under Section 4.1(a) above
shall be determined under the formula and rules of the Pension Plan as it
existed on October 28, 1989 (disregarding any subsequent amendments but
taking into account the Participant’s subsequent compensation and service) but
only if the resulting amount would be greater than the amount determined under
Section 4.1(a).

 

4.3.                              Form of Benefit.  Except as provided in Section 6 below,
this benefit (minus the withholding, payroll and other taxes which must be
deducted therefrom) shall be paid to the Participant directly from the general
assets of the Principal Sponsor in the same manner, at the same time, for the
same duration and in the same form as if such benefit had been paid directly
from the Pension Plan.  All elections
and optional forms of settlement in effect and all other rules governing the
payment of benefits under the Pension Plan shall, to the extent practicable,
also be given effect under this SERP.

 

4.4.                              Forfeiture of Benefits.  All unpaid benefits payable under this SERP
to or with respect to a Participant, shall be permanently forfeited upon the
determination by the Compensation Committee of the Board of Directors of the
Principal Sponsor that the Participant, either before or after termination of
employment:

 

(a)                                  engaged
in a felonious or fraudulent conduct resulting in material harm to the
Principal Sponsor or an affiliate; or

 

(b)                                 made
an unauthorized disclosure to a competitor of any material confidential
information, trade information, or trade secrets of the Principal Sponsor or an
affiliate; or

 

(c)                                  provided
the Principal Sponsor or an affiliate with materially false reports concerning
his or her business interests or employment; or

 

(d)                                 made
materially false representations which are relied upon by the Principal Sponsor
or an affiliate in furnishing information to shareholders, auditors, or any
regulatory or governmental body; or

 

(e)                                  maintained
an undisclosed, unauthorized and material conflict of interest in the discharge
of the duties owed by the Participant to the Principal Sponsor or an affiliate;
or

 

(f)                                    engaged
in reckless or grossly negligent activity toward the Principal Sponsor or an
affiliate which is admitted or judicially proven and which results in
significant harm to the Principal Sponsor or an affiliate; or

 

(g)                                 engaged
during his or her employment or during a period of two (2) years after the
termination of his or her employment in any employment or self–employment
with a competitor of the Principal Sponsor or an affiliate within the
geographical area which is then served by the Principal Sponsor or an
affiliate.

 

4

 

Any dispute arising under or with respect to this
Section shall be subject to the claims procedure set forth in
Section 9.

 

SECTION 5

 

BENEFIT
FOR BENEFICIARIES

 

5.1.                              General Amount Rule.  This SERP
shall pay to the surviving spouse or other joint or contingent annuitant or
beneficiary of a Participant the excess, if any, of the amount, if any,
determined in “(a)” below over the amount, if any, determined in “(b)” below.

 

(a)                                  There
shall be determined the amount which would have been payable with respect to
the Participant under the formula and rules of the Pension Plan (as the Pension
Plan exists on the date as of which such amount is determined) but determined:

 

(i)                                     without
regard to the benefit limitations of section 415 of the Code; and

 

(ii)                                  without
regard to the compensation limitation of section 401(a)(17) of the Code;
and

 

(iii)                               in
the case of a Participant who is both an officer and a member of the Executive
Committee on or after December 13, 1989 and who dies after the earliest
date he could have retired on an early retirement pension under the Pension
Plan (without regard to whether he has or has not retired) and after completing
at least thirty (30) years of participation in the Pension Plan, as if there
were no reduction in benefits for early commencement; and

 

(iv)                              in
the case of a Participant who is both an officer and a member of the Executive
Committee on or after May 22, 1989, as if the thirty-five (35) years of
Benefit Service maximum did not apply; and

 

(v)                                 including,
when it would otherwise have been paid, income deferred under any nonqualified,
unfunded, elective deferred compensation plan maintained by the Principal
Sponsor; and

 

(vi)                              including,
once earned, each long term incentive plan award; provided, however, that if
the long term incentive plan award is

 

5

 

earned with respect to a
period longer than one (1) year, the long term incentive plan award will be
included as if it had been earned and received ratably over the period with
respect to which it was earned; and

 

(vii)                           including,
when awarded, the fair market value of stock awarded under all restricted stock
plans as compensation for pension accrual purposes.

 

(b)                                 There
shall be determined the amount actually payable with respect to the Participant
from the Pension Plan.

 

5.2.                              Special Amount Rule. 
In the case of any Participant who either:

 

(a)                                  had
annual earnings in excess of Seventy-Five Thousand Dollars ($75,000) from the
Principal Sponsor as of December 31, 1989, and had attained age fifty-five
(55) years as of October 28, 1989, or

 

(b)                                 had
annual earnings in excess of One Hundred Thousand Dollars ($100,000) from the
Principal Sponsor as of December 31, 1989, and had attained age fifty (50)
years as of October 28, 1989,

 

the amount determined under Section 5.1(a) above
shall be determined under the formula and rules of the Pension Plan as it
existed on October 28, 1989 (disregarding any subsequent amendments but
taking into account the Participant’s subsequent compensation and service) but
only if the resulting amount would be greater than the amount determined under
Section 5.1(a).

 

5.3.                              Form of Benefit. 
Except as provided in Section 6 below, this benefit (minus the
withholding, payroll and other taxes which must be deducted therefrom) shall be
paid to such person directly from the general assets of the Principal Sponsor
in the same manner, at the same time, for the same duration and in the same
form as if such benefit had been paid directly from the Pension Plan.  All elections and optional forms of
settlement in effect and all other rules governing the payment of benefits
under the Pension Plan shall, to the extent practicable, also be given effect
under this SERP.

 

SECTION 6

 

COMMUTATION
TO LUMP SUM

 

6.1.                              General Rule.  Notwithstanding anything apparently to the contrary in
Sections 4 or 5 above, at the election of the Compensation Committee
of the Principal Sponsor, and for the purpose of minimizing payroll or other
taxes due on benefits payable under this SERP, the

 

6

 

Compensation Committee may (without the consent of the
Participant, joint or contingent annuitant or beneficiary) commute the value of
benefits payable under this SERP to or with respect to a Participant at the
time of the retirement, quit, discharge, death or other termination of
employment of the Participant to an actuarially equivalent benefit payable in
fifteen (15) annual installments (with no life contingencies).  The commuted benefit shall be calculated by
reference to interest and mortality factors then in effect under the Pension
Plan.  Any installments remaining unpaid
at the death of the recipient shall be paid to the estate of the
recipient.  If the Compensation Committee
elects to commute the SERP benefits payable to or with respect to a Participant,
the Compensation Committee shall cause the Participant or other person to whom
such benefits are payable to be notified of that commutation and the number of
annual installments which the Compensation Committee has determined shall be
paid.

 

6.2.                              Executive Committee Members.  Notwithstanding anything apparently to the
contrary in Sections 4 or 5 above, a Participant who is both an officer
and a member of the Executive Committee on or after May 22, 1989 may make
an irrevocable written election that all benefits payable to, and all
benefit payable with respect to, the Participant under the SERP shall, without
any further elections, consents or notices, be commuted to and paid in an
actuarially equivalent single lump sum cash payment within the thirty (30) days
following the earliest date on which such benefits could otherwise be payable
under the SERP.  The single lump sum
shall be calculated by reference to interest and mortality factors in effect
under the Pension Plan at the time of payment. 
Such election shall not be effective, however, unless it is made
and filed with the Chairperson of the Compensation Committee (or the
Chairperson’s delegee) within fifteen (15) days after the latest of:  (i) the date the Participant first
becomes a Participant under this SERP, (ii) the date the Participant is
notified in writing of his participation in this SERP, (iii) the date the
Participant is notified in writing of the opportunity to make this election, or
(iv) May 22, 1989.

 

6.3.                              Complete Payment.  The payment of a lump sum to a Participant
under the foregoing provisions of this Section 6 shall completely
extinguish all other payments that may be due under this SERP to any other
person.

 

SECTION 7

 

FUNDING

 

7.1.                              Funding.  The obligation of the Principal Sponsor to
make payments under this SERP constitutes only the unsecured (but legally
enforceable) promise of the Principal Sponsor to make such payments.  The Participant shall have no lien, prior
claim or other security interest in any property of the Principal Sponsor.  If a fund is established by the Principal
Sponsor in connection with this SERP, the property therein shall remain the
sole and exclusive property of the Principal Sponsor.  The Principal Sponsor will pay the cost of this SERP out of its
general assets.

 

7

 

7.2.                              Hedging Investments.  If the Principal Sponsor elects to finance all or a portion of its costs
in connection with this SERP through the purchase of life insurance or other
investments, each Participant agrees, as a condition of participation in this
SERP, to cooperate with the Principal Sponsor in the purchase of such investment to any extent reasonably required by the
Principal Sponsor and relinquishes
any claim he may have either for himself or any beneficiary to the proceeds of
any such investment or any other rights or interests in such investment.  If a Participant fails or refuses to
cooperate, then notwithstanding any other provision of this SERP the Principal
Sponsor may immediately and irrevocably
terminate and forfeit all benefits payable to or with respect to the
Participant under this SERP.

 

7.3.                              Consensual Creditor.  Neither the Principal Sponsor’s officers nor any member of its Board of
Directors in any way secures or guarantees the payment of any benefit or amount
which may become due and payable hereunder to or with respect to the
Participants.  The Participants entitled
at any time to payments hereunder shall look solely to the assets of the Principal
Sponsor for such payments as an
unsecured, general creditor.  After
benefits shall have been paid to or with respect to a Participant and such
payment purports to cover in full the benefit hereunder, the Participant shall
have no further right or interest in the other assets of the Principal
Sponsor in connection with this
SERP.  Neither the Principal
Sponsor nor any of its officers nor any
member of its Board of Directors shall be under any liability or responsibility
for failure to effect any of the objectives or purposes of this SERP by reason
of the insolvency of the Principal Sponsor.

 

SECTION 8

 

GENERAL
MATTERS

 

8.1.                              Amendment and Termination.  The Board of Directors of the Principal
Sponsor may unilaterally amend this SERP document prospectively, retroactively
or both, at any time and for any reason deemed sufficient by it without notice
to any person affected by this SERP and may likewise terminate the benefits of
this SERP both with regard to persons expecting to receive benefits in the
future and persons already receiving benefits at the time of such action; provided,
however, that such amendment or termination shall not be effective
with respect to a Participant who was both an officer and a member of the
Executive Committee on or after May 22, 1989 without the written consent
of such Participant.  The Compensation
Committee may act for the Board of Directors to amend this SERP document.

 

8.2.                              ERISA Administrator.  The Principal Sponsor shall be the plan
administrator of this SERP.

 

8.3.                              Limited Benefits.  This SERP shall not provide any benefits
with respect to any defined contribution plan. 
This SERP shall not alter, enlarge or diminish any person’s employment
rights or rights or obligations under the Pension Plan.

 

8

 

8.4.                              Spendthrift Provision.  No Participant, surviving spouse, joint or
contingent annuitant or beneficiary shall have the power to transmit, assign,
alienate, dispose of, pledge or encumber any benefit payable under this SERP
before its actual payment to such person. 
the Principal Sponsor shall not recognize any such effort to convey any
interest under this SERP.  No benefit
payable under this SERP shall be subject to attachment, garnishment, execution
following judgment or other legal process before actual payment to such person.

 

8.5.                              Service of Process.  In the absence of any designation to the
contrary by the Principal Sponsor, the Secretary of the Principal Sponsor is
designated as the appropriate and exclusive agent for the receipt of service of
process directed to the SERP in any legal proceeding, including arbitration,
involving the SERP.

 

8.6.                              Plan Year.  The
plan year for this SERP shall be the fiscal period of fifty–two (52) or
fifty–three (53) weeks ending on the last Saturday in October of
each year.

 

8.7.                              § 162(m)
Deferral.  If the Principal Sponsor determines that
delaying the time the initial payments are made or commenced would increase the
probability that such payments would be fully deductible for federal or state
income tax purposes, the Principal Sponsor may unilaterally delay the time of
the making or commencement of payments for up to twelve (12) months after the
date such payments would other wise be payable.

 

SECTION 9

 

CLAIMS
PROCEDURES

 

9.1.                              Determinations.  The Compensation Committee shall make such
determinations as may be required from time to time in the administration of
the SERP.  The Compensation Committee
shall have the sole discretion, authority and responsibility to interpret and
construe the SERP and the plan document and to determine all factual and legal
questions under the SERP, including but not limited to the entitlement of
employees, Participants and beneficiaries and the amounts of their respective
interests.  Benefits under the SERP will
be paid only if the Compensation Committee decides in its discretion that an
employee, Participant or Beneficiary is entitled to them.  All interested parties may act and rely upon
all information reported to them hereunder and need not inquire into the
accuracy thereof, nor be charged with any notice to the contrary.

 

9.2.                              Rules and Regulations.  Any rule not in conflict or at variance with
the provisions hereof may be adopted by the Compensation Committee.

 

9.3.                              Method of Executing Instruments.  Information to be supplied or written
notices to be made or consents to be given by the Principal Sponsor or an
affiliate or the Compensation Committee pursuant to any provision of this SERP
may be signed in the name of the Principal

 

9

 

Sponsor or an affiliate by any officer or by any
employee who has been authorized to make such certification or to give such
notices or consents or by any Compensation Committee member.

 

9.4.                              Claims Procedure.  Until modified by the Compensation Committee,
the claims procedure set forth in this Section shall be the claims
procedure for the resolution of disputes and disposition of claims arising
under the SERP.  An application for a
distribution or benefits under Section 4 or Section 5 shall be
considered as a claim for the purposes of this Section.

 

9.4.1.                     Original Claim.  Any employee, former employee, or
beneficiary of such employee or former employee may, if the employee, former
employee or beneficiary so desires, file with the Compensation Committee a
written claim for benefits under the SERP. 
Within ninety (90) days after the filing of such a claim, the
Compensation Committee shall notify the claimant in writing whether the claim
is upheld or denied in whole or in part or shall furnish the claimant a written
notice describing specific special circumstances requiring a specified amount
of additional time (but not more than one hundred eighty days from the date the
claim was filed) to reach a decision on the claim.  If the claim is denied in whole or in part, the Compensation
Committee shall state in writing:

 

(a)                                  the
specific reasons for the denial,

 

(b)                                 the
specific references to the pertinent provisions of this SERP on which the
denial is based,

 

(c)                                  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, and

 

(d)                                 an
explanation of the claims review procedure set forth in this Section.

 

9.4.2.                     Claims Review Procedure.  Within sixty (60) days after receipt of
notice that the claim has been denied in whole or in part, the claimant may
file with the Compensation Committee a written request for a review and may, in
conjunction therewith, submit written issues and comments.  Within sixty (60) days after the filing of
such a request for review, the Compensation Committee shall notify the claimant
in writing whether, upon review, the claim was upheld or denied in whole or in
part or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more
than one hundred twenty days from the date the request for review was filed) to
reach a decision on the request for review.

 

9.4.3.                     General Rules.

 

(a)                                  No
inquiry or question shall be deemed to be a claim or a request for a review of
a denied claim unless made in accordance with the claims procedure.  The Compensation Committee may require that
any claim for

 

10

 

benefits and any request
for a review of a denied claim be filed on forms to be furnished by the
Compensation Committee upon request.

 

(b)                                 All
decisions on claims and on requests for a review of denied claims shall be made
by the Compensation Committee unless delegated.

 

(c)                                  The
Compensation Committee may, in its discretion, hold one or more hearings on a
claim or a request for a review of a denied claim.

 

(d)                                 Claimants
may be represented by a lawyer or other representative at their own expense,
but the Compensation Committee reserves the right to require the claimant to
furnish written authorization.  A
claimant’s representative shall be entitled to copies of all notices given to
the claimant.

 

(e)                                  The
decision of the Compensation Committee on a claim and on a request for a review
of a denied claim shall be served on the claimant in writing.  If a decision or notice is not received by a
claimant within the time specified, the claim or request for a review of a
denied claim shall be deemed to have been denied.

 

(f)                                    Prior
to filing a claim or a request for a review of a denied claim, the claimant or
the claimant’s representative shall have a reasonable opportunity to review a
copy of SERP plan document and all other pertinent documents in the possession
of the Principal Sponsor and the Compensation Committee.

 

9.4.4.                     Deadline to File Claim.  To be considered timely under the SERP’s
claim and review procedure, a claim must be filed with the Compensation
Committee within one (1) year after the claimant knew or reasonably should have
known of the principal facts upon which the claim is based.

 

9.4.5.                     Exhaustion of Administrative Remedies.  The exhaustion of the claim and review
procedure is mandatory for resolving every claim and dispute arising under this
SERP.  As to such claims and disputes:

 

(a)                                  no
claimant shall be permitted to commence any legal action to recover Plan
benefits or to enforce or clarify rights under the SERP under section 502
or section 510 of ERISA or under any other provision of law, whether or
not statutory, until the claim and review procedure set forth herein have been
exhausted in their entirety, and

 

(b)                                 in
any such legal action all explicit and all implicit determinations by the
Compensation Committee (including, but not limited to, determinations as

 

11

 

to whether the claim, or
a request for a review of a denied claim, was timely filed) shall be afforded
the maximum deference permitted by law.

 

9.4.6.                     Deadline to File Legal Action.  No legal action to recover SERP benefits or
to enforce or clarify rights under the SERP under section 502 or
section 510 of ERISA or under any other provision of law, whether or not
statutory, may be brought by any claimant on any matter pertaining to this SERP
unless the legal action is commenced in the proper forum before the earlier of:

 

(a)                                  thirty
(30) months after the claimant knew or reasonably should have known of the
principal facts on which the claim is based, or

 

(b)                                 six
(6) months after the claimant has exhausted the claim and review procedure.

 

9.4.7.                     Knowledge of Fact by Participant Imputed to
Beneficiary.  Knowledge
of all facts that a Participant knew or reasonably should have known shall be
imputed to every claimant who is or claims to be a beneficiary of the
Participant or otherwise claims to derive an entitlement by reference to the
Participant for the purpose of applying the previously specified periods.

 

9.5.                              Information Furnished by Participants.  Neither the Principal Sponsor nor the
Compensation Committee shall be liable or responsible for any error in the
computation of the benefit of a Participant resulting from any misstatement of
fact made by the Participant, directly or indirectly, to the Principal Sponsor
or the Compensation Committee and used by them in determining the Participant’s
benefit.  Neither the Principal Sponsor
nor the Compensation Committee shall be obligated or required to increase the
benefit of such Participant which, on discovery of the misstatement, is found
to be understated as a result of such misstatement of the Participant.  However, the benefit of any Participant
which is overstated by reason of any such misstatement shall be reduced to the
amount appropriate for the Participant in view of the truth.  Any reduction of an benefit shall be
retained in the SERP and used to reduce the next succeeding contribution
of  the Principal Sponsor to the SERP.

 

SECTION
10

 

RULES
OF CONSTRUCTION

 

10.1.                        Defined Terms.  Words and phrases used in this SERP with
initial capital letters, which are defined in the Pension Plan documents and
which are not separately defined in this SERP shall have the same meaning
ascribed to them in the Pension Plan documents unless in the context in which
they are used it would be clearly inappropriate to do so.

 

12

 

10.2.                        ERISA Status.  This SERP is adopted with the understanding that it is an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees
as provided in section 201(2), section 301(3) and
section 401(a)(1) of ERISA.  Each
provision shall be interpreted and administered accordingly.

 

10.3.                        IRC Status.  This SERP is intended to be a nonqualified deferred compensation
arrangement.  The rules of
section 401(a) et. seq. of the Code shall not apply to this SERP.  The rules of section 3121(v) and
section 3306(r)(2) of the Code shall apply to this SERP.

 

10.4.                        Effect on Other Plans.  This SERP shall not alter, enlarge or
diminish any person’s employment rights or obligations or rights or obligations
under the Pension Plan or any other plan. 
It is specifically contemplated that the Pension Plan will, from time to
time, be amended and possibly terminated. 
All such amendments and termination shall be given effect under this
SERP (it being expressly intended that except as expressly provided in
Section 4.2 and Section 5.2 this SERP shall not lock in the benefit
structures of the Pension Plan as they exist at the adoption of this SERP or upon
the commencement of participation or commencement of benefits by any
Participant).

 

10.5.                        Disqualification.  Notwithstanding any other provision of this
SERP or any election or designation made under the SERP, any individual who
feloniously and intentionally kills a Participant shall be deemed for all
purposes of this SERP and all elections and designations made under this SERP
to have died before such Participant.  A
final judgment of conviction of felonious and intentional killing is conclusive
for this purpose.  In the absence of a
conviction of felonious and intentional killing, the Principal Sponsor shall
determine whether the killing was felonious and intentional for this purpose.

 

10.6.                        Rules of Document Construction.  Whenever appropriate, words used herein in
the singular may be read in the plural, or words used herein in the plural may
be read in the singular; the masculine may include the feminine; and the words
“hereof,” “herein” or “hereunder” or other similar compounds of the word “here”
shall mean and refer to the entire SERP and not to any particular paragraph or
Section of this SERP unless the context clearly indicates to the contrary.  The titles given to the various Sections of
this SERP are inserted for convenience of reference only and are not part of
this SERP, and they shall not be considered in determining the purpose, meaning
or intent of any provision hereof.  If,
under the rules of this SERP, an election, form or other document must be filed
with or received by the Principal Sponsor or other person, it must be actually
received to be effective.  The
determination of whether or when an election, form or other document has been
received by the Principal Sponsor or other person shall be made by the Principal
Sponsor on the basis of what documents are acknowledged by the Principal
Sponsor or other person to be in its actual possession without regard to any
“mailbox rule” of similar rule of evidence. 
The absence of a document in the Principal Sponsor’s or other person’s
records and files shall be conclusive and binding proof that the document was
not received.  Notwithstanding any thing
apparently to the contrary contained in this SERP document, the SERP document
shall be construed and administered to prevent the duplication of

 

13

 

benefits provided under this SERP and any other
qualified or nonqualified plan maintained in whole or in part by the Principal
Sponsor.

 

10.7.                        References to Laws.  Any reference in this SERP to a statute or
regulation shall be considered also to mean and refer to any subsequent
amendment or replacement of that statute or regulation.

 

10.8.                        Effect on Employment.  Neither the terms of this SERP nor the
benefits hereunder nor the continuance thereof shall be a term of the employment
of any employee.  The Principal Sponsor
shall not be obliged to continue the SERP. 
The terms of this SERP shall not give any employee the right to be
retained in the employment of the Principal Sponsor.

 

10.9.                        Choice of Law.  This instrument has been executed and
delivered in the State of Minnesota and has been drawn in conformity to the
laws of that State and shall, except to the extent that federal law is
controlling, be construed and enforced in accordance with the laws of the State
of Minnesota.

 

14EXHIBIT
10.6

 

HORMEL FOODS CORPORATION

SUPPLEMENTAL RETIREMENT BENEFITS PLAN

FOR THE BENEFIT OF JOEL W. JOHNSON

(1999
Restatement)

 

 

First
Established on September 18, 1995

and

As Amended and Restated Effective October 1, 1999

 

 

HORMEL FOODS
CORPORATION

SUPPLEMENTAL RETIREMENT BENEFITS PLAN

FOR THE BENEFIT OF JOEL W. JOHNSON

(1999 Restatement)

 

TABLE OF CONTENTS

 

	
  SECTION
  1.

  	
  DEFINITIONS

  
	
   

  	
   

  	
   

  
	
  SECTION
  2.

  	
  BENEFITS
  PAYABLE

  
	
   

  	
   

  	
   

  
	
   

  	
  2.1.

  	
  Benefit for the Employee

  
	
   

  	
   

  	
  2.1.1.        Amount of
  Benefit

  
	
   

  	
   

  	
  2.1.2.        Form of Benefit

  
	
   

  	
   

  	
  2.1.3.        Election of Lump Sum
  Payment

  
	
   

  	
  2.2.

  	
  Code § 162(m) Delay

  
	
   

  	
  2.3.

  	
  Benefit for Survivors

  
	
   

  	
   

  	
  2.3.1.        Amount of Benefit

  
	
   

  	
   

  	
  2.3.2.        Form of Benefit

  
	
   

  	
   

  	
  2.3.3.        Commutation

  
	
   

  	
   

  	
   

  
	
  SECTION
  3.

  	
  FUNDING

  
	
   

  	
   

  	
   

  
	
   

  	
  3.1.

  	
  Unfunded Obligation

  
	
   

  	
  3.2.

  	
  Hedging Investments

  
	
   

  	
  3.3.

  	
  Consensual Creditor

  
	
   

  	
   

  	
   

  
	
  SECTION
  4.

  	
  GENERAL MATTERS

  
	
   

  	
   

  	
   

  
	
   

  	
  4.1.

  	
  Amendments and Termination

  
	
   

  	
  4.2.

  	
  ERISA Administrator

  
	
   

  	
  4.3.

  	
  Service of Process

  
	
   

  	
  4.4.

  	
  Limited Benefits

  
	
   

  	
  4.5.

  	
  Spendthrift Provision

  
	
   

  	
  4.6.

  	
  Administrative
  Determinations

  
	
   

  	
  4.7.

  	
  Rules and Regulations

  
	
   

  	
  4.8.

  	
  Certifications

  
	
   

  	
  4.9.

  	
  Errors in Computations

  
	
   

  	
   

  	
   

  
	
  SECTION
  5.

  	
  FORFEITURE
  OF BENEFITS

  

 

i

 

	
  SECTION
  6.

  	
  CLAIMS
  PROCEDURE

  
	
   

  	
   

  	
   

  
	
   

  	
  6.1.

  	
  Original Claim

  
	
   

  	
  6.2.

  	
  Claims Review Procedure

  
	
   

  	
  6.3.

  	
  General Rules

  
	
   

  	
   

  	
   

  
	
  SECTION
  7.

  	
  CONSTRUCTION

  
	
   

  	
   

  	
   

  
	
   

  	
  7.1.

  	
  ERISA Status

  
	
   

  	
  7.2.

  	
  IRC Status

  
	
   

  	
  7.3.

  	
  Effect on Other Plans

  
	
   

  	
  7.4.

  	
  Document Construction

  
	
   

  	
  7.5.

  	
  References to Laws

  
	
   

  	
  7.6.

  	
  Effect on Employment

  
	
   

  	
  7.7.

  	
  Choice of Law

  
	
   

  	
   

  	
   

  
	
  SIGNATURE

  	
   

  

 

ii

 

HORMEL FOODS CORPORATION

SUPPLEMENTAL RETIREMENT BENEFITS PLAN

FOR THE BENEFIT OF JOEL W. JOHNSON

(1999 Restatement)

 

Hormel
Foods Corporation, a Delaware corporation, heretofore established an unfunded,
supplemental, nonqualified plan of deferred compensation (the “SERP”) for the
benefit of Joel W. Johnson, the President and Chief Executive Officer of
Hormel Foods Corporation.  Hormel Foods
Corporation has reserved the power to amend the SERP from time to time.  Hormel Foods Corporation now desires to
exercise that power of amendment by the adoption of this restatement of the
SERP effective October 1, 1999.

 

SECTION 1

 

DEFINITIONS

 

The term “Deemed
Service” shall mean a number of years of service to be credited
under this SERP (and subject to all the conditions of this SERP) based on the
date of the Employee’s Termination of Employment or death as if the years had
in fact been served with Employer according to the following table:

 

	
  If the Employee’s

  Termination of Employment 

  or death occurs:

  	
   

  	
  DEATH

  For the purpose of computing

  the benefit (if any) under 

  § 2.3 and §7.3, his Deemed

  Service shall be:

  	
   

  	
  INVOLUNTARY

  If his Termination of

  Employment is an

  Involuntary Termination, for

  the purpose of computing the

  benefit(if any)  under § 2.1

  and § 7.3, his Deemed Service

  shall be:

  	
   

  	
  VOLUNTARY

  If his Termination of

  Employment is a Voluntary

  Termination, for the purpose

  of computing the benefit (if

  any)  under § 2.1 and § 7.3,

  his Deemed Service shall be:

  	
   

  
	
  Before 7/14/2003

  	
   

  	
  14 years

  	
   

  	
  14 years

  	
   

  	
  0 years

  	
   

  
	
  After 7/13/2003 but

  before 7/14/2004

  	
   

  	
  14 years

  	
   

  	
  14 years

  	
   

  	
  14 years

  	
   

  
	
  After 7/13/2004 but

  before 7/14/2005

  	
   

  	
  17 years

  	
   

  	
  17 years

  	
   

  	
  17 years

  	
   

  
	
  After 7/13/2005

  	
   

  	
  24 years

  	
   

  	
  24 years

  	
   

  	
  24 years

  	
   

  

 

The
term “Employee”
shall mean and refer to Joel W. Johnson, a resident of the state of
Minnesota.

 

The
term “Employer”
shall mean and refer to HORMEL FOODS CORPORATION, a Delaware corporation.

 

 

The term “Excess Plan” shall mean and refer to the nonqualified pension
benefit plan known as the  HORMEL FOODS
CORPORATION SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, as it exists from time to
time.

 

The term “Involuntary Termination” shall mean any Termination of
Employment that is required by the Employer.

 

The term “Other Plan Benefits” shall mean the benefits paid or payable
to or with respect to the Employee from other qualified and nonqualified
retirement plans of prior employers to the extent that the Employer determines
that such other benefits are attributable to employer (rather than Employee)
contributions.  To the extent that such
other benefit is paid or payable in a form or at a time other than the form and
time that the benefit is payable under this SERP, the Employer in its discretion
shall, applying factors, methods and assumptions determined by it to be
consistent with those then in effect under the Pension Plan, convert that other
benefit to a form and time that is consistent with the form and time of benefit
payable under this SERP.

 

The term “Pension Plan” shall mean and refer to the tax-qualified
defined benefit pension plan known as the HORMEL FOODS CORPORATION SALARIED
EMPLOYEES’ PENSION PLAN, as it exists from time to time.

 

The term “SERP” shall mean and refer to the unfunded, supplemental,
nonqualified, plan of deferred compensation for the benefit of Employee
established and maintained under this document and, when the context so
requires, shall refer to this document as it may be amended from time to time.

 

The term “Voluntary Termination” shall mean any Termination of
Employment that is not an Involuntary Termination.

 

Words and phrases used in this SERP with initial capital letters, which are
defined in the Pension Plan documents and which are not separately defined in
this SERP, shall have the same meaning ascribed to them in the Pension Plan
documents.

 

This SERP supersedes and replaces all prior agreements, if any, between the
Employer and the Employee regarding the matters specified herein.  This restatement of the SERP supersedes and
replaces the prior SERP which was adopted on September 18, 1995.

 

SECTION 2

 

BENEFITS PAYABLE

 

2.1.                              Benefit for the Employee.

 

2

 

2.1.1.                     Amount of Benefit.  Upon
the Employee’s Termination of Employment with the Employer, the Employer shall
pay to the Employee the excess, if any, of:

 

(a)                                  the amount that would have been payable to the
Employee under the Pension Plan and the Excess Plan if such benefit had been
determined:

 

	
  (i)

  	
   

  	
  without regard to the benefit limitations under section 415 of the
  Code, and

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  without regard to the compensation limitation of section 401(a)(17)
  of the Code, and

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  assuming that the Employee’s actual Benefit Service and Vesting Service
  were each respectively increased by the amount of the Employee’s Deemed
  Service; over

  

 

(b)                                 the amount actually paid from the Pension Plan
and the Excess Plan and as Other Plan Benefits.

 

2.1.2.                     Form of Benefit.  Unless
a lump sum form of payment has been elected pursuant to Section 2.1.3,
this benefit (minus the withholding, payroll and other taxes which must be
deducted therefrom) shall be defined as a benefit payable to the Employee in
the same manner, at the same time, for the same duration and in the same form
as if such benefit had been paid directly from the Pension Plan.  For this purpose, all elections and optional
forms of settlement in effect and all other rules governing the payment of
benefits under the Pension Plan shall, to the extent practicable, be given
effect under this SERP so that the Employee would receive from a combination of
the Pension Plan, the Excess Plan and this SERP  the same benefit (minus the withholding, payroll and other taxes
which must be deducted therefrom) which would have been received under the
Pension Plan if this benefit and the Excess Plan benefit had been paid from the
Pension Plan.

 

2.1.3.                     Election of Lump Sum Payment.  At any time and from time to
time, the Employee may file with the Employer an election to receive any
benefit due to the Employee under this SERP either in the form prescribed in
Section 2.1.2 or in an actuarially equivalent single lump sum cash payment
within the thirty (30) days following the earliest date on which such benefit
would otherwise be payable under Section 2.1.  The single lump sum shall be calculated by reference to interest
and mortality factors then in effect under the Excess Plan. Each such election
shall supercede all prior elections. 
Notwithstanding the foregoing, any election shall be disregarded as if
it had never been filed (and any prior effective election shall be given
effect) unless the election:

 

(a)                                  was filed with the Employer at least one (1)
year before the Termination of Employment, and

 

3

 

(b)                                 was filed with the Employer at least one (1)
year after any other prior election was filed with the Employer.

 

Each
such election shall be made in writing upon forms furnished by the Employer and
shall conform to such other procedural and substantive rules as the Employer
shall establish.

 

If
the Employee shall have effectively elected the single lump sum form of payment
and dies after Termination of Employment but before the single lump sum is
paid, that single lump sum shall be paid to the personal representative of the
Employee’s estate.  If the Employee has
had a Termination of Employment and dies before the receipt of annuity benefits
which should have been paid under the terms of this SERP between his
Termination of Employment and his death, such annuity benefits shall be payable
to the personal representative of the Employee’s estate.

 

2.2.                              Code § 162(m) Delay.  If the
Employer determines that delaying the time when the initial payments are to be
made or commenced to the Employee would increase the probability that such
payments would be fully deductible for federal or state income tax purposes,
the Employer may unilaterally delay the time for the making or commencement of
payments for not more than twelve (12) months after the date such payments
would otherwise be payable.

 

2.3.                              Benefit for Survivors.

 

2.3.1.                     Amount of Benefit.  Upon
the death of the Employee, the Employer shall pay to the surviving spouse or
other joint or contingent annuitant or beneficiary of the Employee the excess,
if any, of:

 

(a)                                  the amount that would have been payable to the
surviving spouse or other joint or contingent annuitant or beneficiary under
the Pension Plan and the Excess Plan if such benefit had been determined:

 

	
  (i)

  	
   

  	
  without regard to the benefit limitations under section 415 of the
  Code, and

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  without regard to the compensation limitation of section 401(a)(17)
  of the Code, and

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
   

  	
  assuming that the Employee’s actual Benefit Service and Vesting Service
  were each respectively increased by the amount of the Employee’s Deemed Service;
  over

  

 

(b)                                 the amount actually paid from the Pension Plan
and the Excess Plan and as Other Plan Benefits.

 

No
benefit shall be due under this SERP to any surviving spouse or other joint or
contingent annuitant or beneficiary of the Employee if a single lump sum has
been paid (or is payable) to the Employee or the personal representative of the
Employee’s estate pursuant to Section 2.1.

 

4

 

2.3.2.                     Form of Benefit.  This
benefit (minus the withholding, payroll and other taxes which must be deducted
therefrom) shall be defined as a benefit payable to the surviving spouse or
other joint or contingent annuitant or beneficiary in the same manner, at the
same time, for the same duration and in the same form as if such benefit had
been paid directly from the Pension Plan. 
For this purpose, all elections and optional forms of settlement in
effect and all other rules governing the payment of benefits under the Pension
Plan shall, to the extent practicable, be given effect under this SERP so that
the surviving spouse or other joint or contingent annuitant or beneficiary
would receive from a combination of the Pension Plan, the Excess Plan and this
SERP  the same benefit (minus the
withholding, payroll and other taxes which must be deducted therefrom) which
would have been received under the Pension Plan if this benefit and the Excess
Plan benefit had been paid from the Pension Plan.

 

2.3.3.                     Commutation. 
Notwithstanding the foregoing, the benefit described in Section 2.3.1
shall, without any further elections, consents or notices, be commuted to and
paid in an actuarially equivalent single lump sum cash payment within the
thirty (30) days following the earliest date on which such benefit would
otherwise be payable under Section 2.3. 
The single lump sum shall be calculated by reference to interest and
mortality factors then in effect under the Excess Plan.

 

SECTION 3

 

FUNDING

 

3.1.                              Unfunded Obligation.  The obligation of the Employer to
make payments under this SERP constitutes only the unsecured (but legally
enforceable) promise of the Employer to make such payments.  The Employee shall have no lien, prior claim
or other security interest in any property of any Employer.  If a fund is established by the Employer in
connection with this SERP, the property therein shall remain the sole and
exclusive property of the Employer.  The
Employer will pay the cost of this SERP out of its general assets.

 

3.2.                              Hedging Investments.  If the Employer elects to finance all or a
portion of its costs in connection with this SERP through the purchase of life
insurance or other investments, the Employee agrees, as a condition of
participation in this SERP, to cooperate with the Employer in the purchase of
such investment to any extent reasonably required by the Employer and
relinquishes any claim he may have either for himself or any beneficiary to the
proceeds of any such investment or any other rights or interests in such
investment.  If the Employee fails or
refuses to cooperate, then notwithstanding any other provision of this SERP the
Employer may immediately and irrevocably terminate and forfeit all benefits
payable to or with respect to the Employee under this SERP.

 

3.3.                              Consensual Creditor.  Neither the Employer’s officers
nor any member of its Board in any way secures or guarantees the payment of any
benefit or amount which may become due and 

 

5

 

payable
hereunder to or with respect to the Employee. 
The Employee entitled at any time to payments hereunder shall look
solely to the assets of the Employer for such payments as an unsecured, general
creditor.  After benefits shall have
been paid to or with respect to the Employee and such payment purports to cover
in full the benefit hereunder, the Employee shall have no further right or
interest in the other assets of the Employer in connection with this SERP.  Neither the Employer nor any of its officers
nor any member of its Boards of Directors shall be under any liability or
responsibility for failure to effect any of the objectives or purposes of this
SERP by reason of the insolvency of the Employer.

 

SECTION 4

 

GENERAL MATTERS

 

4.1.                              Amendments and Termination.  This SERP may be amended by action of the
Employer’s Board of Directors without the consent of the Employee in whole or
in part, from time to time and at any time; provided, however, that no
amendment (including termination) of this SERP shall be effective as to the
Employee to the extent the amendment would have the effect of diminishing the
benefits payable to or with respect to the Employee under this SERP (whether
benefits earned in the past or to be earned in the future) or the procedural
rights of the Employee under this SERP unless the Employee has consented to
such amendment in writing.

 

4.2.                              ERISA Administrator.  The Employer shall be the plan administrator
of this SERP.

 

4.3.                              Service of Process.  In the absence of any designation
to the contrary by the Employer, the Secretary of the Employer is designated as
the appropriate and exclusive agent for the receipt of service of process in
any legal proceeding, including arbitration, involving this SERP.

 

4.4.                              Limited Benefits.  This
SERP shall not provide any benefits determined with respect to any defined
contribution plan.

 

4.5.                              Spendthrift Provision.  Neither the Employee nor any
other person shall have the power to transmit, assign, alienate, dispose of,
pledge or encumber any benefit payable under this SERP before its actual
payment to such person.  The Employer
shall not recognize any such effort to convey any interest under this
SERP.  No benefit payable under this
SERP shall be subject to attachment, garnishment, execution following judgment
or other legal process before actual payment to such person.  This section shall not prevent the Employer
from observing the terms of a qualified domestic relations order as provided in
section 206(d) of ERISA.

 

4.6.                              Administrative Determinations.  The Employer shall make such determinations
as may be required from time to time in the administration of this SERP.  The Employer shall have the discretionary
authority and responsibility to interpret and construe this SERP and to
determine all factual and legal questions under this SERP, including but not
limited to the

 

6

 

entitlement
of the Employee to a benefit, and the amounts of their respective
interests.  Each interested party may
act and rely upon all information reported to them hereunder and need not
inquire into the accuracy thereof, nor be charged with any notice to the
contrary.

 

4.7.                              Rules and Regulations.  Any rule not in conflict or at variance with
the provisions hereof may be adopted by the Employer.

 

4.8.                              Certifications.  Information to be supplied or
written notices to be made or consents to be given by the Employer pursuant to
any provision of this SERP may be signed in the name of the Employer by any
officer who has been authorized to make such certification or to give such
notices or consents.

 

4.9.                              Errors in Computations.  The Employer shall not be liable
or responsible for any error in the computation of any benefit payable to or
with respect to the Employee resulting from any misstatement of fact made by
the Employee or by or on behalf of any survivor to whom such benefit shall be
payable, directly or indirectly, to the Employer, and used by the Employer in
determining the benefit.  The Employer
shall not be obligated or required to increase the benefit payable to or with
respect to the Employee which, on discovery of the misstatement, is found to be
understated as a result of such misstatement of the Employee.  However, the benefit of the Employee which
is overstated by reason of any such misstatement shall be reduced to the amount
appropriate in view of the truth (and to recover any prior overpayment).

 

SECTION 5

 

FORFEITURE OF BENEFITS

 

All
unpaid benefits under this SERP, shall be permanently forfeited upon the
determination by the Board of the Employer that the Employee, either before or
after Termination of Employment:

 

(a)                                  engaged in a criminal or fraudulent conduct
resulting in harm to the Employer or an affiliate of the Employer; or

 

(b)                                 divulged any confidential information or trade
secrets of the Employer or an affiliate of the Employer; or

 

(c)                                  provided the Employer or an affiliate of the
Employer with false reports concerning his business interests or employment; or

 

(d)                                 made false representations which are relied
upon by the Employer or an affiliate of the Employer in furnishing information
to an affiliate, partner, auditor or any regulatory or governmental agency; or

 

7

 

(e)                                  maintained an undisclosed, unauthorized
conflict of interest in the discharge of the duties owed by him to the Employer
or an affiliate of the Employer; or

 

(f)                                    engaged in reckless or grossly negligent
activity toward the Employer or an affiliate of the Employer which is admitted
or judicially proven and which results in harm to the Employer or an affiliate
of the Employer; or

 

(g)                                 engaged during his employment or within two (2)
years after his Termination of Employment in any employment or self-employment
with a competitor of the Employer within the geographical area which is then
served by the Employer.

 

SECTION 6

 

CLAIMS PROCEDURE

 

The
claims procedure set forth in this section shall be the exclusive procedure for
the disposition of claims for benefits arising under this SERP.  Without limiting the generality of the
following, an application for benefits and any objection to a forfeiture shall be
processed as a claim for the purposes of this section.

 

6.1.                              Original Claim.  Any person may, if he so desires,
file with the Board of the Employer a written claim for benefits under this
SERP.  Within ninety (90) days after the
filing of such a claim, the Board shall notify the claimant in writing whether
the claim is upheld or denied in whole or in part or shall furnish the claimant
a written notice describing specific special circumstances requiring a
specified amount of additional time (but not more than one hundred eighty days
from the date the claim was filed) to reach a decision on the claim.  If the claim is denied in whole or in part,
the Board shall state in writing:

 

(a)                                  the specific reasons for the denial;

 

(b)                                 the specific references to the pertinent
provisions of this SERP on which the denial is based;

 

(c)                                  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; and

 

(d)                                 an explanation of the claims review procedure
set forth in this section.

 

6.2.                              Claims Review Procedure.  Within sixty (60) days after receipt of
notice that the claim has been denied in whole or in part, the claimant may
file with the Board a written request

 

8

 

for
a review and may, in conjunction therewith, submit written issues and
comments.  Within sixty (60) days after
the filing of such a request for review, the Board shall notify the claimant in
writing whether, upon review, the claim was upheld or denied in whole or in
part or shall furnish the claimant a written notice describing specific special
circumstances requiring a specified amount of additional time (but not more
than one hundred twenty days from the date the request for review was filed) to
reach a decision on the request for review.

 

6.3.                              General Rules.

 

(a)                                  No inquiry or question shall be deemed to be a
claim or a request for a review of a denied claim unless made in accordance
with the claims procedure.  The Board
may require that any claim for benefits and any request for a review of a
denied claim be filed on forms to be furnished by the Board upon request.

 

(b)                                 All decision on claims and on requests for a
review of denied claims shall be made by the Board.

 

(c)                                  The Board may, in its discretion, hold one or
more hearings on a claim or a request for a review of a denied claim.

 

(d)                                 Claimants may be represented by a lawyer or
other representative (at their own expense), but the Board reserves the right
to require the claimant to furnish written authorization.  A claimant’s representative shall be
entitled to receive copies of notices sent to the claimant.

 

(e)                                  The decision of the Board on a claim and on a
request for a review of a denied claim shall be served on the claimant in
writing.  If a decision or notice is not
received by a claimant within the time specified, the claim or request for a
review of a denied claim shall be deemed to have been denied.

 

(f)                                    Prior to filing a claim or a request for a
review of a denied claim, the claimant or the claimant’s representative shall
have a reasonable opportunity to review a copy of this SERP and all other
pertinent documents in the possession of the Employer.

 

(g)                                 The Board may permanently or temporarily delegate
all or a portion of its authority and responsibility under this Section 6
to a committee or individual.

 

9

 

SECTION 7

 

CONSTRUCTION

 

7.1.                              ERISA Status.  This
SERP is adopted with the understanding that it is an unfunded plan maintained
primarily for the purpose of providing deferred compensation for a select group
of management or highly compensated employees as provided in
section 201(2), section 301(3) and section 401(a)(1) of ERISA.  Each provision shall be interpreted and
administered accordingly.

 

7.2.                              IRC Status.  This
SERP is intended to be a nonqualified deferred compensation arrangement.  The rules of section 401(a) et. seq.
of the Code shall not apply to this SERP. 
The rules of section 3121(v)(2) and section 3306(r)(2) of the
Code shall apply to this SERP.

 

7.3.                              Effect on Other Plans.  This SERP shall not alter,
enlarge or diminish any person’s employment rights or obligations or rights or
obligations under the Pension Plan, the Excess Plan or any other plan.  It is specifically contemplated that the
Pension Plan and the Excess Plan will, from time to time, be amended and
possibly terminated.  All such
amendments and termination shall be given effect under this SERP (it being
expressly intended that this SERP shall not lock in the benefit structures of
the Pension Plan or the Excess Plan as they exist at the execution of this SERP
or upon the commencement of participation, or commencement of benefits by the
Employee).

 

(a)                                  Survivor Income Benefits.  Notwithstanding the foregoing,
for the purposes of the Hormel Survivor Income Plan for Executives, the
Employee shall be considered a retiree upon his Termination of Employment:

 

	
  (i)

  	
   

  	
  at or after he attains age sixty (60) years, or

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  at any earlier age if his Termination of Employment is an Involuntary
  Termination.

  

 

(b)                                 Retiree Health Benefits.  Notwithstanding the foregoing,
for the purposes of receiving whatever retiree health benefits, if any, are
then provided generally to employees of the Employer then retiring who have
years of service equal to the Employee’s Benefit Service (including Deemed
Service) under this SERP, the Employee:

 

	
  (i)

  	
   

  	
  shall be deemed to have Benefit Service that includes the Deemed Service
  at his Termination of Employment, and

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
   

  	
  shall be considered a retiree upon his Termination of Employment:

  

 

 

10

 

(A)                              at or after he attains age sixty (60) years, or

 

(B)                                at any earlier age if his Termination of
Employment is an Involuntary Termination.

 

The Employer shall provide such retiree medical benefits:  (i) under the regular health programs of the
Employer to the extent that the Employer determines that such benefits can be
conferred without adverse effect on the regulatory or tax treatment intended
for those plans and programs, or (ii) under other arrangements selected by the
Employer which, in the judgment of the Employer, provide comparable
benefits.  The Employer shall also pay
to the Employee an amount equal to the tax–affected cost of the
Employee’s share of any premium for retiree medical benefits.

 

(c)                                  Survivor Health Benefits.  Notwithstanding the foregoing,
for the purposes of receiving whatever health benefits, if any, are then
provided generally to the surviving spouse and dependents of an employee who
has years of service equal to the Employee’s Benefit Service (including Deemed
Service) under this SERP, the Employee shall be deemed to have Benefit Service
that includes the Deemed Service at his death.

 

The Employer shall provide such surviving spouse and dependent medical
benefits:  (i) under the regular health
programs of the Employer to the extent that the Employer determines that such
benefits can be conferred without adverse effect on the regulatory or tax
treatment intended for those plans and programs, or (ii) under other
arrangements selected by the Employer which, in the judgment of the Employer,
provide comparable benefits.  The
Employer shall also pay to the surviving spouse or dependent an amount equal to
the tax–affected cost of the surviving spouse’s or dependent’s share of
any premium for medical benefits.

 

7.4.                              Document Construction.  Whenever appropriate, words used herein in
the singular may be read in the plural, or words used herein in the plural may
be read in the singular; the masculine may include the feminine; and the words
“hereof,” “herein” or “hereunder” or other similar compounds of the word “here”
shall mean and refer to the entire SERP and not to any particular paragraph or
Section of this SERP unless the context clearly indicates to the contrary.  The titles given to the various Sections of
this SERP are inserted for convenience of reference only and are not part of
this SERP, and they shall not be considered in determining the purpose, meaning
or intent of any provision hereof.

 

7.5.                              References to Laws.  Any
reference in this SERP to a statute or regulation shall be considered also to
mean and refer to any subsequent amendment or replacement of that statute or
regulation.

 

11

 

 

7.6.                              Effect on Employment.  Neither the terms of this SERP
nor the benefits hereunder nor the continuance thereof shall be a term of the
employment of the Employee.  The terms
of this SERP shall not give the Employee the right to be retained in the
employment of the Employer.

 

7.7.                              Choice of Law.  This instrument has been executed and
delivered in the State of Minnesota and has been drawn in conformity to the
laws of that State and shall, except to the extent that federal law is
controlling, be construed and enforced in accordance with the laws of the State
of Minnesota.

 

THIS SERP DOCUMENT, Having been previously approved by the Board of
Directors of the Employer, is hereby executed on behalf of the Employer and is
hereby agreed to by the Employee this 27th day of March, 2000.

 

	
   

  	
  HORMEL FOODS
  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By

  	
        /s/ WILLIAM
  S. DAVILA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Its

  	
        Board
  Compensation

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     Committee
  Member

  

 

12

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