EXHIBIT 10.4
AGREEMENT
Agreement made this ____ day of _____________, 19__, by and
between ConAgra, Inc., a Delaware corporation, hereinafter referred
to as "ConAgra", and __________________, hereinafter referred to as
"Employee".
WHEREAS, the Board of Directors of ConAgra has determined that
the interests of ConAgra stockholders will be best served by
assuring that all key corporate executives of ConAgra will adhere
to the policy of the Board of Directors with respect to any event
by which another entity would acquire effective control of ConAgra,
including but not limited to a tender offer, and
WHEREAS, the Board of Directors has also determined that it is
in the best interests of ConAgra stockholders to promote stability
among key executives and employees.
NOW, THEREFORE, it is agreed as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position
of the Board of Directors and the chief executive officer, and
shall take any action requested by the Board of Directors or the
chief executive officer with respect to any "Change of Control" (as
defined at Section 7 below) of ConAgra. If the Employee violates
the provisions of this Section, he shall forfeit any payments due
to him under the terms of this Agreement.
2. EMPLOYMENT CONTRACT. If a Change of Control of ConAgra
occurs, and if at the initiation of the Change of Control attempt
Employee is then employed by ConAgra, ConAgra hereby agrees to
continue the employment of Employee for a period of three years
from the date the Change of Control effectively occurs. During
said three year period, Employee shall receive annual base and
incentive compensation in an amount not less than that specified in
Section 3(a) below.
If Employee is Involuntarily Terminated (as defined at Section
7 below), at any time during the three year period, ConAgra shall
pay to Employee an amount equal to that which Employee would have
received pursuant to Section 3(a) below for the remainder of the
three year period, and shall also make the payments specified in
Sections 3(b) and 3(c) and, if applicable, any additional payments
specified in Section 5 below. In addition, in the event of
Involuntary Termination at any time, Employee shall receive payment
of the base and incentive compensation described in Section 3(a)
for one year. Any such termination payment of base and incentive
compensation shall be made to Employee in a lump sum within thirty
(30) days after termination.
If Employee voluntarily terminates his employment at any time
during the three year period, the Acquiror (as defined below),
ConAgra, and their subsidiaries will not be obligated to pay the
Employee any amount that might be due for the remainder of the
three year period, or for any termination pay; however, they shall
make any additional payments specified in Sections 3(b), 3(c) and
5 (if applicable) below.
3. DESCRIPTION OF PAYMENTS. The payments to be made to
Employee are:
(a) ANNUAL BASE AND INCENTIVE COMPENSATION. Employee
shall receive for the three year period described in
Section 2 above an annual amount equal to his current
annual rate of compensation, which current annual
compensation shall be computed as follows: twenty-six
times the Employee's highest bi-weekly salary payment
received during the one year period ending immediately
prior to the Change of Control of ConAgra. In addition,
Employee shall receive (i) an amount equal to his maximum
allowable short-term annual incentive compensation,
computed as __% of the annual rate of compensation
described above, and (ii) an amount equal to his highest
annual long-term compensation award made to Employee
during the three fiscal years immediately preceding such
Change of Control.
(b) RETIREMENT BENEFITS. Employee shall receive an
amount equal to that which he would have received as
retirement benefits under the provisions of the ConAgra
Pension Plan for Salaried Employees ("Qualified Pension
Plan") and the ConAgra Retirement Income Savings Plan
("CRISP") in effect immediately prior to the Change of
Control of ConAgra, had Employee continued his employment
until age 65 at the current annual rate of base and short
term incentive compensation as determined above.
(i) The supplemental pension benefit hereunder
shall be equal to the result of subtracting
(x) the benefit the Employee will receive
under the Qualified Pension Plan from (y) the
pension benefit the Employee would obtain
under the Qualified Pension Plan if the
Employee remained in the employ of ConAgra
until the Employee attained age 65. The
supplemental pension benefit is to be computed
assuming the Employee is to receive an
unreduced normal retirement pension benefit
payable beginning at the later of the date the
Employee attains age 60 or the date of the
Employee's termination of employment. If the
Employee begins to receive his supplemental
pension benefit at a time other than as
described in the preceding sentence, an
actuarial adjustment shall be made to reflect
such event.
(ii) The supplemental CRISP benefit shall be equal
to the amount computed as follows:
A. The additional years of service that the
Employee would receive if his or her
employment was not terminated prior to
attaining age 65 is multiplied by the
Employee's current annual base and short
term incentive compensation (as described
in Section 3(a)).
B. The result in A, immediately above, is
multiplied by 3%.
C. The result in B, the immediately above,
is present valued to date of the
Employee's termination of employment.
The discount factor for such present
value shall be the discount factor used
by the Qualified Pension Plan at the time
of such termination of employment. The
present value shall be computed based on
the assumption that the result in B,
immediately above, is paid ratably (and
monthly) over the additional years of
service of the Employee.
D. The present value amount determined
pursuant to C, immediately above, shall
be funded pursuant to Subsection (iv) of
this Section 3(b).
(iii) The actuarial assumptions and methods used by
this Section 3(b) shall be the same as those
used by the Qualified Pension Plan. The
timing of payment and the form of the
supplemental pension benefit under this
Section 3(b) shall be the same as elected by
the Employee under the Qualified Pension Plan
and the timing of payment and the form of the
supplemental CRISP benefit shall be the same
as elected by the Employee under CRISP;
(iv) The supplemental pension and CRISP benefits
payable under this Section 3(b) shall be
unfunded until a Voluntary Termination or
Involuntary Termination following a Change of
Control. Within 60 days following such a
termination, the supplemental pension and
CRISP benefits shall be funded, in one lump
sum payment, through a trust in the form
attached to the ConAgra Supplemental Pension
and CRISP Plan for Change of Control and which
trust is incorporated by reference. The
transferred amount for the supplemental CRISP
benefit shall be held in a separate account
and separately invested by the trustee. The
amount accumulated in such account shall be
the sole source of payment of the supplemental
CRISP benefit, and shall be the amount of the
supplemental CRISP benefit hereunder. The
Acquiror, ConAgra and their subsidiaries shall
make up any supplemental pension benefit
payments the Employee does not receive under
the trust, e.g., if the funds in the trust are
insufficient to make the payments due to
insufficient earnings in the trust. The
trustee of such trust shall be a national or
state chartered bank. If funding of the trust
is not made within the sixty day period
described in this Subsection (iv) of this
Section 3(b), the Employee's supplemental
pension and CRISP benefits 3(b), the
Employee's supplemental pension and CRISP
benefit shall then be equal to the product of
150% multiplied by the amount of supplemental
pension and CRISP benefits described in this
Section 3(b) above; provided, however, this
increase in benefits is not intended to remove
or detract from the obligation to fund the
trust. The supplemental pension and CRISP
benefits shall not be paid from the assets of
the Qualified Pension Plan or CRISP.
(c) ADDITIONAL PAYMENT. If a Change of Control of
ConAgra occurs, Employee shall receive an amount equal to
the excess, if any, of the highest per share price
offered (valued in U.S. currency) by the successful
Acquiror for ConAgra common stock (which stock will then
be treated for purposes of this Agreement as converted
into equivalent shares of such Acquiror's or the
surviving company's capital stock as of the date of the
Change of Control of ConAgra) over the closing per share
price of such Acquiror's or the surviving company's
("Acquiror") stock quoted on an established securities
market (or if applicable, the closing bid price for the
Acquiror's stock that is quoted on a secondary market or
substantial equivalent thereof) on the date of
termination (or if the date of termination is not a
business day, on the next preceding business day),
multiplied by the highest number of shares of the
Acquiror's capital stock owned by the Employee at any
time during the period beginning on the date of the
Change of Control of ConAgra and ending on the date of
termination. For purposes of this Section 3(c), the
additional amount due hereunder shall be computed as if
Employee owned all of the Acquiror's stock with respect
to which Employee has an option to purchase in connection
with his employment with the Acquiror, ConAgra or any of
their subsidiaries. Said amount shall be paid to
Employee within ten days after termination. In addition,
if Employee sells any of the Acquiror's stock within one
year following said termination, Employee shall receive
the amount by which the closing price of such stock per
share on the date of termination (determined as
aforesaid) exceeds the per share actual net sales price
of the Acquiror's stock on the date of sale realized by
Employee, multiplied by the number of shares sold by
Employee. Said amount shall be paid in immediately
available funds to Employee within ten days after the
sale. In addition, to the extent any of ConAgra's common
stock remains outstanding after a Change of Control, then
Employee shall receive additional amounts computed and
payable in a manner similar to that provided in this
Section 3(c) for Acquiror's stock owned, or subject to an
option held, by Employee. These provisions shall be
appropriately modified or adjusted to take into account
the fact that the computations pursuant to the preceding
sentence are with respect to ConAgra common stock and
related options rather than the Acquiror's capital stock
and options related thereto. The computations and
payments under this Section 3(c) shall include
appropriate adjustments for any stock splits, stock
dividends, recapitalizations or similar share
restructurings that may occur from time to time.
4. MERGER. ConAgra shall not merge, reorganize, consolidate
or sell all or substantially all of its assets, to or with any
other corporation until such corporation and its subsidiaries, if
any, expressly assume the duties of ConAgra set forth herein.
5. CERTAIN ADDITIONAL PAYMENTS BY CONAGRA.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by ConAgra to or for the
benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in
any amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) Subject to the provisions of Subsection (c) below,
all determinations required to be made under this
Section, including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made by
the certified public accounting firm then representing
ConAgra (the "Accounting Firm") which shall provide
detailed supporting calculations both to ConAgra and the
Employee within 15 business days of the date of
termination, if applicable, or such earlier time as is
requested by ConAgra or Employee. If the Accounting Firm
determines that no Excise Tax is payable by the Employee,
it shall furnish the Employee with an opinion that he has
substantial authority not to report any Excise Tax on his
federal income tax return. Any determination by the
Accounting Firm shall be binding upon ConAgra and the
Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by ConAgra should have been made
("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that ConAgra
exhausts its remedies pursuant to Subsection (c) below
and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by ConAgra to or
for the benefit of the Employee.
(c) The Employee shall notify ConAgra in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by ConAgra of the
Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business
days after the Employee knows of such claim and shall
apprise ConAgra of the nature of such claim and the date
on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration
of the thirty-day (30 day) period following the date on
which it gives such notice to ConAgra (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If ConAgra notifies the
Employee in writing prior to the expiration of such
period that it desires to contest such claim, the
Employee shall:
(i) give ConAgra any information reasonably
requested by ConAgra relating to such claim,
(ii) take such action in connection with contesting
such claim as ConAgra shall reasonably request
in writing from time to time, including,
without limitation, accepting legal
representation with respect to such claim by
an attorney reasonably selected by ConAgra,
(iii) cooperate with ConAgra in good faith in order
to effectively contest such claim,
(iv) permit ConAgra to participate in any
proceedings relating to such claim;
provided, however, that ConAgra shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Subsection (c), ConAgra
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as ConAgra shall determine; provided,
however, that if ConAgra directs the Employee to pay such
claim and sue for a refund, ConAgra shall advance the
amount of such payment to the Employee, on an interest-
free basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for
the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, ConAgra's
control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount
advanced by ConAgra pursuant to Subsection (c) above, the
Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to
ConAgra's complying with the requirements of Subsection
(c)) promptly pay to ConAgra the amount of such refund
(together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt
by the Employee of an amount advanced by ConAgra pursuant
to Subsection (c), a determination is made that the
Employee shall not be entitled to any refund with respect
to such claim and ConAgra does not notify the Employee in
writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
6. TERM AND BINDING EFFECT. This Agreement shall bind
ConAgra and Employee as long as Employee remains in the employ of
ConAgra; provided, however, ConAgra may terminate this Agreement at
any time by giving notice to Employee; and provided further,
however, that ConAgra may not terminate this Agreement at any time
subsequent to the announcement of an event that could result in a
Change of Control of ConAgra. This Agreement shall be binding upon
the parties hereto, their heirs, executors, administrators and
successors.
7. CERTAIN DEFINITIONS. The following definitions shall
apply for the purposes of this Agreement:
(a) CHANGE OF CONTROL OF CONAGRA. The term "Change of
Control" shall mean:
(i) The acquisition (other than from ConAgra) by
any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange
Act"), (excluding, for this purpose, ConAgra
or its subsidiaries, or any employee benefit
plan of ConAgra or its subsidiaries, which
acquires beneficial ownership of voting
securities of ConAgra) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of
either the then outstanding shares of common
stock or the combined voting power of
ConAgra's then outstanding voting securities
entitled to vote generally in the election of
directors; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof
the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board,
provided that any person becoming a director
subsequent to the date hereof whose election,
or nomination for election by ConAgra's
shareholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as
though such person were a member of the
Incumbent Board; or
(iii) Approval of the shareholders of ConAgra of a
reorganization, merger, consolidation, in each
case, with respect to which persons who were
the shareholders of ConAgra immediately prior
to such reorganization, merger or
consolidation do not, immediately thereafter,
own more than 50% of the combined voting power
entitled to vote generally in the election of
directors of the reorganized, merged or
consolidated company's then outstanding voting
securities, or a liquidation or dissolution of
ConAgra or of the sale of all or substantially
all of its assets.
(b) INVOLUNTARY TERMINATION. The term "Involuntary
Termination" or any variation thereof shall mean either
(i) the actual involuntary termination of Employee's
employment with the Acquiror, ConAgra and their
subsidiaries after a Change of Control (with or without
cause) or (ii) the constructive involuntary termination
of the Employee's employment with the Acquiror, ConAgra
and their subsidiaries after a Change of Control. The
term "constructive involuntary termination" shall include
(w) a reduction in the Employee's compensation (including
applicable fringe benefits); (x) a substantial change in
the location of the Employee's job without the Employee's
written consent; (y) the Employee's demotion or
diminution in the Employee's position, authority, duties
or responsibilities without the Employee's written
consent; or (z) the sale or disposition of the stock of
Employee's immediate employer, which was a subsidiary of
the Acquiror, ConAgra, or their other subsidiaries
immediately prior to such sale or disposition, provided
Employee is not employed after such sale or disposition
by the Acquiror, ConAgra, or any of their subsidiaries
that are retained after such sale or disposition.
"Substantial change in location" means any location
change in excess of 35 miles from the location of the
Employee's job with ConAgra or its subsidiaries at the
time of the Change of Control of ConAgra.
8. COSTS. All costs of litigation necessary for the
Employee to defend the validity of this contract are to be paid by
ConAgra or its successors or assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement.
EMPLOYEE: CONAGRA, INC.
BY: PHILIP B. FLETCHER
Chairman, Board of Directors