def14a
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
Filed by
the Registrant þ
Filed by a
Party other than the Registrant o
Check the appropriate box:
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Preliminary Proxy Statement |
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Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2)) |
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Definitive Proxy Statement |
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Definitive Additional Materials |
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Soliciting Material Pursuant to Section 240.14a-12 |
ConAgra Foods, Inc.
(Name of Registrant as Specified In Its Charter)
[NOT APPLICABLE]
(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required. |
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Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11. |
[Not Applicable]
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Fee paid previously with preliminary materials. |
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Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing. |
[Not Applicable]
Proxy
Statement
September 25,
2009
Annual Meeting of
Stockholders
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ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE
68102-5001
Phone:
(402) 240-4000
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August 12, 2009
Dear Fellow Stockholder:
It is my pleasure to invite you to join us for the ConAgra Foods
Annual Meeting of Stockholders in Omaha, Nebraska on
September 25, 2009 at 1:30 p.m., Omaha Time, at the
Joslyn Art Museum, 2200 Dodge Street, Omaha, Nebraska 68102.
The meeting will include a report on our business, discussion
and voting on the matters set forth in the accompanying notice
of annual meeting and proxy statement, and a
question-and-answer
session.
We look forward to seeing you in Omaha. If you cannot be with us
in person, please be sure to vote your shares by proxy. Just
mark, sign and date the enclosed proxy card and return it in the
postage-paid envelope. Or, use the Internet or telephonic voting
methods described in the following pages. Your prompt response
is appreciated.
Thank you for your continued investment in ConAgra Foods.
Sincerely,
Gary M. Rodkin
Chief Executive Officer & President
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ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE
68102-5001
Phone:
(402) 240-4000
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NOTICE OF
ANNUAL MEETING OF STOCKHOLDERS
The Annual Stockholders Meeting of ConAgra Foods, Inc.
will be held on Friday, September 25, 2009, in the
Witherspoon Concert Hall of the Joslyn Art Museum, 2200 Dodge
Street, Omaha, Nebraska 68102. The meeting will begin promptly
at 1:30 p.m. Omaha Time. Registration will begin at
12:30 p.m.
What
matters will be voted on?
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Election as directors of the eleven nominees identified in the
attached proxy statement
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Approval of the ConAgra Foods 2009 Stock Plan
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Approval of the ConAgra Foods Executive Incentive Plan, as
amended and restated
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Ratification of the appointment of our independent auditor for
fiscal 2010
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Any other business properly brought before the meeting in
accordance with our bylaws
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Who
may vote?
Stockholders of record as of the close of business on
July 31, 2009 are eligible to vote at the annual meeting
and any postponements or adjournments. You may vote by marking,
signing and dating the enclosed proxy card and returning it in
the postage-paid envelope. You may also vote by telephone or
through the Internet. See page 1 of the accompanying proxy
statement for more information on voting procedures.
What
if I want to attend the meeting?
We encourage you to vote as soon as possible even if you plan to
attend the meeting. An admission ticket or brokerage statement
reflecting ownership of ConAgra Foods stock, in each case along
with some form of government-issued photo identification such as
a valid drivers license or passport, will be required for
admission to the annual meeting.
If you are unable to attend in person, you can hear the meeting
via live audio cast at
http://investor.conagrafoods.com.
An archive of the webcast will be available on our website
following the meeting.
Colleen Batcheler
Senior Vice President, General Counsel and
Corporate Secretary
August 12, 2009
Omaha, Nebraska
Table
of Contents
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Page
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1
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1
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1
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4
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5
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5
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6
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6
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7
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10
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11
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14
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16
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21
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22
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25
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26
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26
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40
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41
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43
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44
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45
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46
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48
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50
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62
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A-1
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B-1
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ConAgra
Foods, Inc.
One ConAgra Drive
Omaha, Nebraska
68102-5001
PROXY
STATEMENT
Meeting
Information
We are mailing this proxy statement to our stockholders in
connection with the solicitation by our Board of Directors of
proxies to be used at the 2009 Annual Meeting of Stockholders of
ConAgra Foods, Inc. The meeting will be held in the Witherspoon
Concert Hall of the Joslyn Art Museum, 2200 Dodge Street, Omaha,
Nebraska 68102 on Friday, September 25, 2009, and begin
promptly at 1:30 p.m., Omaha Time. Distribution of this
proxy statement is scheduled to begin on or about
August 12, 2009.
Help Reduce Our Mailing Expenses. You can help us
reduce the cost of printing and mailing proxy statements and
annual reports by opting to receive future materials
electronically. To enroll, please visit the website
http://enroll.icsdelivery.com/cag
and follow the instructions provided. Have your proxy card
in hand when accessing this website.
Important
Notice Regarding the Availability of Proxy Materials
This proxy statement and our annual report to stockholders for
the fiscal year ended May 31, 2009 are available
electronically at:
http://investor.conagrafoods.com.
Voting
Information
Record
Date
Stockholders of record at the close of business on July 31,
2009 will be entitled to vote at the meeting and any
postponements or adjournments. On July 31, 2009, there were
443,134,831 voting shares of our common stock issued and
outstanding. Each share of common stock is entitled to one vote.
How to
Vote
Your vote is very important. For this reason, the Board of
Directors is requesting that you vote your shares by proxy.
Internet and telephone voting is available through
11:59 p.m. Eastern Time on Tuesday, September 22,
2009 for shares held in the ConAgra Foods Retirement Income
Savings Plan and through 11:59 p.m. Eastern Time on
Thursday, September 24, 2009 for all other shares.
If you hold shares of ConAgra Foods stock in your own name (also
known as of record ownership), you can come to the
meeting and vote your shares in person, or you can vote your
shares by proxy in one of the following manners:
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By visiting the Internet at www.proxyvote.com and
following the instructions
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By calling
1-800-690-6903
on a touch-tone telephone and following the recorded instructions
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By signing and returning the enclosed proxy card using the
enclosed postage-paid envelope
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If a broker, bank or other nominee holds your stock
(street name ownership), they will send you a voting
instruction form. Follow the instructions on the form they
provide to have your shares voted by proxy. If you wish to
attend the meeting and vote in person, you must obtain a
legal proxy, executed in your favor, from the
broker, bank or nominee.
You can revoke your proxy before your shares are voted if you
(1) are the record owner of your shares and submit a
written revocation to our Corporate Secretary at or before the
meeting (mail to: ConAgra Foods, Inc., Attn: Corporate
Secretary, One ConAgra Drive, Omaha, Nebraska 68102),
(2) submit a timely later-dated proxy (or voting
instruction card if you hold shares through a broker, bank or
nominee), or (3) provide timely
1
subsequent Internet or telephone voting instructions. You may
also attend the meeting in person and vote in person, subject to
the legal proxy requirement noted above for street name owners.
If you hold shares in the ConAgra Foods Retirement Income
Savings Plan, your voting instruction card covers the shares
credited to your plan account. The plans trustee must
receive your voting instructions by 11:59 p.m. Eastern
Time on Tuesday, September 22, 2009. If the plan trustee
does not receive your instructions by that date, the trustee
will vote the shares held by the ConAgra Foods Retirement Income
Savings Plan in a single block in accordance with the
instructions received with respect to a majority of the shares
for which instructions are received.
We have engaged Georgeson Shareholder Services as our proxy
solicitor for the annual meeting at an estimated cost of $15,000
plus disbursements. Our directors, officers and other employees
may also solicit proxies in the ordinary course of their
employment. ConAgra Foods will bear the cost of the
solicitation, including the cost of reimbursing brokerage houses
and other custodians for their expenses in sending proxy
materials to you.
Quorum
To hold the meeting a quorum must be present. A majority of the
shares of common stock outstanding on the record date must be
present in person or by proxy at the meeting in order to
constitute a quorum. The inspectors of election intend to treat
properly executed proxies marked abstain as
present for purposes of determining whether a quorum
has been achieved. The inspectors will also treat proxies held
in street name by brokers where the broker indicates
that it does not have authority to vote on one or more of the
proposals coming before the meeting (broker
non-votes) as present for purposes of
determining whether a quorum has been achieved.
Vote
Requirements and Manner of Voting Proxies
Each stockholder is entitled to one vote for each share of
common stock on all matters presented at the meeting. If a
quorum is present:
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We will hold an election of directors. Each
outstanding share is entitled to cast one vote for each director
position. A director will be elected if he or she receives the
affirmative vote of a majority of the votes cast in the
election. An incumbent director nominee who receives a greater
number of votes Withheld than For is
required to tender his or her resignation to the Board, and the
resignation will be accepted or rejected by the Board as more
fully described in Corporate Governance. Abstentions
and broker non-votes are not treated as votes cast and therefore
will not affect the outcome of the election of directors.
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We will vote on the approval of the ConAgra Foods 2009 Stock
Plan. Approval of the Stock Plan requires the
affirmative vote of a majority of the shares present and
entitled to vote on the matter. Abstentions will be counted;
they will have the same effect as a vote against the matter.
Broker non-votes will be disregarded.
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We will vote on the approval of the ConAgra Foods Executive
Incentive Plan. Approval of the Executive Incentive
Plan, as amended and restated, requires the affirmative vote of
a majority of the shares present and entitled to vote on the
matter. Abstentions will be counted; they will have the same
effect as a vote against the matter. Broker non-votes will be
disregarded.
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We will vote on ratification of the appointment of the
independent auditor. The appointment of the independent
auditor will be ratified if approved by a majority of the shares
present and entitled to vote on the matter. Abstentions will be
counted; they will have the same effect as a vote against the
matter. Broker non-votes will be disregarded.
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The shares represented by all valid proxies received by
Internet, by telephone or by mail and not properly revoked will
be voted in the manner specified. Where specific choices are not
indicated, the shares represented by all valid proxies received
will be voted For each proposal. If any matter not
described above
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is properly presented at the meeting, the persons named in the
proxy form will vote in accordance with their judgment.
Attendance
at the Meeting
Only stockholders of record as of the close of business on
July 31, 2009 and their guests will be able to attend the
meeting. Admission will be by ticket or confirming
bank/brokerage statement only, and those attending the meeting
must bring some form of government-issued photo identification.
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If your ConAgra Foods shares are registered in your name and you
received your proxy materials by mail, your admission ticket is
the top half of your proxy card.
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If your ConAgra Foods shares are registered in your name and you
received your proxy materials electronically, your admission
ticket is a print-out of the
e-mail that
links you to the materials.
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If your ConAgra Foods shares are held in a bank or brokerage
account, bring a recent bank or brokerage statement showing that
you owned ConAgra Foods common stock on July 31, 2009.
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Multiple
Stockholders Sharing an Address
We are allowed to deliver a single annual report and proxy
statement to a household at which two or more stockholders
reside when we believe those stockholders are members of the
same family. Accordingly, unless you elected to participate in
electronic delivery of proxy materials, we will deliver to you
only one copy of our annual report and proxy statement until we
receive instructions that you prefer multiple mailings. You will
continue to receive individual proxy cards for each registered
account. This procedure reduces duplicate mailings and saves
printing costs and postage fees, as well as natural resources.
If you receive a single set of proxy materials but prefer to
receive separate copies for each registered account in your
household, please contact our agent, Broadridge, at:
1-800-542-1061,
or in writing at: Broadridge Householding Department, 51
Mercedes Way, Edgewood, New York 11717. Broadridge will remove
you from the householding program within 30 days of receipt
of your request, following which you will begin receiving an
individual copy of the material. You can also contact Broadridge
at the phone number above if you received multiple copies of the
proxy materials and would prefer to receive a single copy in the
future.
3
Voting
Securities of Directors, Officers and Greater Than 5%
Owners
The table below shows the shares of ConAgra Foods common stock
that certain individuals and entities beneficially owned as of
July 31, 2009. The individuals and entities are
(1) owners of more than 5% of our outstanding common stock,
(2) our current directors, (3) our named
executive officers for purposes of this proxy statement,
and (4) all current directors and executive officers as a
group. A person has beneficial ownership over shares if he or
she has or shares voting or investment power over the shares, or
the right to acquire that power within 60 days of
July 31, 2009.
Our directors and executive officers are committed to owning
stock in ConAgra Foods. Directors are compensated with a mix of
cash and ConAgra Foods common stock and are precluded from
selling any of their shares in the market until they cease to be
a director. For management, our Board has established stock
ownership guidelines that require the individuals to own ConAgra
Foods stock worth various multiples of their salaries. More
information on our stock ownership guidelines can be found on
pages 5 and 38.
To better show the financial stake of our directors and
executive officers in the company, we have included a
Share Units column in the table below. This column,
which is not required under the rules of the Securities and
Exchange Commission, or the SEC, shows deferred shares owned by
non-employee directors through the ConAgra Foods, Inc.
Directors Deferred Compensation Plan and deferred shares
owned by executive officers through the ConAgra Foods, Inc.
Voluntary Deferred Compensation Plan. Although these shares will
ultimately be settled in shares of common stock, they currently
have no voting rights, nor will they be settled within
60 days of July 31, 2009.
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Number of Shares
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Right to
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Percent
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Name
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Owned (3)
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Acquire
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of Class
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Share Units
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Capital Research Global Investors(1)
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25,654,960
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5.8
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%
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NA
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333 South Hope Street
Los Angeles, CA 90071
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State Street Bank and Trust Co(2)
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23,818,601
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5.4
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%
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NA
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State Street Financial Center
One Lincoln Street
Boston, MA 02111
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Directors and Named Executive Officers:
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Mogens C. Bay
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31,600
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(4)
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90,000
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(5)
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*
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Stephen G. Butler
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16,800
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(4)
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54,000
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(5)
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*
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9,888
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Steven F. Goldstone
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4,600
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309,362
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(5)
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*
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3,722
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Joie A. Gregor
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6,000
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(5)
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*
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1,211
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Rajive Johri
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6,750
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(5)
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*
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1,378
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W.G. Jurgensen
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32,600
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63,000
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(5)
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*
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24,534
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Richard H. Lenny
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1,050
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5,250
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(5)
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*
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Ruth Ann Marshall
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2,550
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18,000
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(5)
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*
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5,910
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Gary M. Rodkin
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489,042
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2,530,000
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(5)
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*
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169,491
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Andrew J. Schindler
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1,800
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18,000
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(5)
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*
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1,859
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Kenneth E. Stinson
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35,600
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90,000
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(5)
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*
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John F. Gehring
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97,695
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292,883
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(6)
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*
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Andre J. Hawaux
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108,556
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(4)
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332,700
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(6)
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*
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9,494
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Scott Messel
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59,798
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185,000
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(6)
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*
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308
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Peter M. Perez
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111,741
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402,000
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(6)
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*
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Robert F. Sharpe, Jr.
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168,038
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(4)
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818,000
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(6)
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*
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All Directors and Executive Officers as a
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Group (18 people)
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1,164,502
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5,345,714
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(5)(6)
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1.45
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%
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227,795
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*
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Represents less than 1% of common
stock outstanding.
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4
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1.
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Based on an Amendment No. 1 to
a Schedule 13G filed by Capital Research Global Investors
with the SEC on February 13, 2009.
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2.
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Based on a Schedule 13G filed
by State Street Bank and Trust Company with the SEC on
February 17, 2009.
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3.
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For executive officers and
directors, reflects shares that have been acquired through open
market purchases or upon vesting of share-based awards, and
shares credited to the defined contribution plan accounts of
certain individuals. For non-employee directors, includes shares
acquired through open market purchases or received as part of
their compensation.
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4.
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For Mr. Bay, includes
31,600 shares as to which he shares voting and investment
power with his spouse. For Mr. Butler, includes
6,000 shares held in a trust for the benefit of his spouse,
who resides with him. For Mr. Hawaux, includes
550 shares held by his spouse, who resides with him. For
Mr. Sharpe, includes 12,000 shares held in trust.
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5.
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Reflects shares that the individual
has the right to acquire within 60 days of July 31,
2009 through the exercise of stock options.
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6.
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Reflects shares that the individual
has the right to acquire within 60 days of July 31,
2009 through the exercise or vesting of the following:
Mr. Gehring, 276,883 options and 16,000 restricted stock
units; Mr. Hawaux, 326,000 options and 6,700 shares of
restricted stock; Mr. Messel, 185,000 options;
Mr. Perez, 402,000 options; Mr. Sharpe, 818,000
options; and executive officers not individually named in this
table, 102,950 options and 21,819 restricted stock units.
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Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires that our directors, executive officers and persons who
own more than 10% of a registered class of our equity securities
file with the SEC and New York Stock Exchange reports of
ownership and changes in beneficial ownership of our common
stock. Directors, executive officers and greater than 10% owners
are required to furnish us with copies of all Section 16(a)
forms they file. Based solely on a review of copies of these
reports furnished to us or written representations that no other
reports were required, we believe that during fiscal 2009, all
required reports were filed on a timely basis.
Corporate
Governance
ConAgra Foods business is managed under the direction of
our Board of Directors, which currently has 11 members. The
Board of Directors is committed to performing its
responsibilities in a manner consistent with sound governance
practices. Some key practices include the following:
Annual Elections for Directors. To promote greater
accountability to stockholders, all of our directors stand for
election annually.
Majority Voting in Director Elections. In
uncontested elections, each director nominee must receive the
affirmative vote of a majority of the votes cast at the meeting
with respect to the director. If an incumbent nominee is not
elected, he or she is required to promptly tender his or her
resignation to the Board of Directors. The Board will act on the
tendered resignation and publicly disclose its decision within
90 days from the certification of the election results.
Separate Chairman and Chief Executive Officer. Our
Chairmans role is filled by an independent, non-employee
director.
Stock Ownership Guidelines for Leadership. Senior
leaders across the company are subject to stock ownership
guidelines that are set as a multiple of the leaders
salary. For our Chief Executive Officer, Gary Rodkin, that level
is six times salary.
Stock Holding Periods for Directors. Our directors
have each agreed not to engage in open market sales of our
common stock during their tenure.
Expired Poison Pill Rights Plan. In 2004, our
Board of Directors terminated our rights plan. We no longer have
a stockholder rights plan in place.
5
Commitment to Sustainable Business Practices. In
2009, the company published its inaugural Corporate
Responsibility Report, which transparently shows the
companys performance in climate change, packaging, food
safety, employee relations, corporate giving and a wide range of
other important topics.
To learn more about our governance practices, you can review any
of the following listed documents at
http://investor.conagrafoods.com
through the Corporate Governance link.
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Corporate Governance Principles
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Corporate Responsibility Report
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Code of Conduct, our commitment to our longstanding standards
for ethical business practices
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Code of Ethics for Senior Corporate Officers
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Audit Committee Charter
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Nominating and Governance Committee Charter (during fiscal 2009
our Nominating Committee and Corporate Governance Committee were
merged into a single committee)
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Human Resources Committee Charter
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Procedures for bringing concerns or complaints to the attention
of the Audit Committee
|
From time to time these documents are updated, and we promptly
post amended documents. The documents are also available in
print to any stockholder upon request to the Corporate
Secretary. Interested parties may communicate with our Board of
Directors or the Chairman by writing to: ConAgra Foods Board of
Directors
c/o Corporate
Secretary, ConAgra Foods, Inc., Box 2000, One ConAgra Drive,
Omaha, Nebraska 68102. Communications will be compiled by the
Corporate Secretary and forwarded to the Board or individual
director addressee on at least a bi-weekly basis. The Corporate
Secretary will routinely filter communications that are
solicitations, consumer complaints, unrelated to ConAgra Foods
or ConAgra Foods business or reasonably determined to pose
a possible security risk to the addressee.
Board
Meetings and Attendance
The Board of Directors meets on a regularly scheduled basis and
holds an executive session without management present at every
regularly scheduled meeting. The Chairman of the Board presides
at all meetings, including executive sessions. During fiscal
2009, the Board met eight times (six regular meetings and two
special meetings) and acted by unanimous written consent twice.
All members attended at least 75% of the total number of board
and committee meetings that required their attendance in fiscal
2009.
Our Board members are encouraged to attend the annual
stockholders meeting. All nominees who were serving at the
time of the 2008 annual meeting of stockholders attended such
meeting, except Mr. Bay who had a commitment to attend a
funeral. Messrs. Johri and Lenny and Ms. Gregor were
appointed to serve as members of the Board of Directors
subsequent to the 2008 annual meeting of stockholders.
Director
Independence
The Board of Directors is composed of a substantial majority of
independent directors. The Board has established independence
standards for company directors that are listed in the Corporate
Governance Principles available on our website at
http://investor.conagrafoods.com through the
Corporate Governance link.
The Board has determined that directors Bay, Butler, Goldstone,
Gregor, Johri, Jurgensen, Lenny, Marshall, Schindler and Stinson
have no material relationship with ConAgra Foods and are
independent within the meaning of our independence standards.
These individuals, in the groups identified in the tables
beginning below, are the only members of our Audit Committee,
Nominating and Governance Committee, and Human Resources
Committee. Mr. Chain and Mr. Roskens, who were
directors during the fiscal year but are no longer serving, were
previously found by the Board to be independent under the
companys independence standards. In evaluating and
determining the independence of these individuals, the Board
considered that Mr. Bay is the
6
Chief Executive Officer of Valmont Industries, Inc. One of our
subsidiaries was a customer of immaterial levels of
environmental engineering from an affiliate of Valmont
Industries, Inc. on an arms-length basis and in the ordinary
course of business during fiscal 2009.
In addition to satisfying our independence standards, each
member of the Audit Committee must satisfy an additional SEC
independence requirement that provides that the member may not
accept, directly or indirectly, any consulting, advisory or
other compensatory fee from us or any of our subsidiaries other
than their directors compensation and may not be an
affiliated person of ConAgra Foods. Each member of
the Audit Committee satisfies this additional independence
requirement.
Board
Committees
Currently, our Board of Directors has four standing committees:
Audit Committee, Executive Committee, Human Resources Committee
and Nominating and Governance Committee.
The Executive Committee met once during fiscal 2009. The
committee generally has the authority to act on behalf of the
Board of Directors between meetings. Its membership consists of
Directors Butler, Goldstone, Rodkin and Stinson.
Mr. Goldstone chairs the committee.
The Nominating and Governance Committee was formed effective
September 25, 2008 from the merger of the previously
separate Nominating Committee and Corporate Governance
Committee. Prior to the merger, the Corporate Governance
Committee consisted of Messrs. Bay, Chain, Goldstone and
Stinson and met twice during fiscal 2009. Prior to the merger,
the Nominating Committee consisted of Messrs. Jurgensen,
Roskens and Schindler and Ms. Marshall and met twice during
fiscal 2009. The structure and purpose of the joint Nominating
and Governance Committee is set forth below:
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Nominating and Governance
Committee
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Identifies qualified candidates for membership on the Board
|
3 meetings in fiscal 2009
|
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|
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Proposes to the Board a slate of directors for election by the
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(after merger of
Nominating Committee
|
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|
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stockholders at each annual meeting
|
and Corporate Governance Committee on
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Proposes to the Board candidates to fill vacancies on the Board
|
September 25, 2008)
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|
|
|
Considers and makes recommendations to the Board concerning the
size and functions of the Board and the various Board committees
|
Mogens C. Bay,
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|
|
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Chair Rajive Johri
(since February 5, 2009)
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|
|
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Considers and makes recommendations to the Board concerning
corporate governance policies
|
W.G. Jurgensen
|
|
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Ruth Ann Marshall
Andrew Schindler
|
|
|
|
Assesses the independence of Board members
|
Director Nomination Process. The Nominating and
Governance Committee considers candidates for board membership
suggested by its members and other board members, as well as by
management and stockholders. The Committee may also retain a
third-party executive search firm to identify candidates from
time to time. A stockholder who wishes to recommend a
prospective nominee for board membership should notify our
Corporate Secretary in writing at least 120 days before the
annual stockholders meeting and include whatever
supporting material the stockholder considers appropriate. The
Nominating and Governance Committee will also consider
nominations by a stockholder pursuant to the provisions of our
bylaws relating to stockholder nominations as described under
Proposals for 2010 Annual Meeting at the end of this
proxy statement.
The Nominating and Governance Committee makes an initial
determination as to whether to conduct a full evaluation of the
candidate once a prospective nominee has come to its attention.
This initial determination is based on whatever information is
provided to the Committee as well as other information available
to or obtained by the Committee. The preliminary determination
is based primarily on the need for additional board
7
members to fill vacancies or expand the size of the board and
the likelihood that the prospective nominee can satisfy the
evaluation factors described below. If the Committee determines
that additional consideration is warranted, it may request a
third-party search firm or other third parties to gather
additional information about the prospective nominee. The
Committee may also elect to interview a prospective candidate,
in person or by telephone. The Nominating and Governance
Committees evaluation process for nominees recommended by
stockholders does not differ.
The Nominating and Governance Committee evaluates each
prospective nominee against the standards and qualifications set
out in the Corporate Governance Principles, including:
(1) background, including demonstrated high standards of
ethics and integrity, the ability to have sufficient time to
effectively carry out the duties of a director, and the ability
to represent all stockholders and not a particular interest
group; (2) board skill needs, taking into account the
experience of current board members, the candidates
ability to work toward business goals with other board members,
and the candidates qualifications as independent and
qualifications to serve on various committees of the Board;
(3) diversity, including the extent to which the candidate
reflects the composition of our stockholders and other
constituencies; and (4) business experience, which should
reflect a broad experience at the policy-making level in
business, government or education. The Committee also considers
such other relevant factors as it deems appropriate.
After completing its evaluation process, the Committee makes a
recommendation to the full Board as to the persons who should be
nominated, and the Board determines the nominees after
considering the Committees recommendations.
The process outlined above was used during fiscal 2009 in
connection with the appointments to the Board of Mr. Johri,
Mr. Lenny and Ms. Gregor, each of whom was first
recommended for consideration by an independent director.
|
|
|
Human Resources Committee 7 meetings in fiscal 2009
Steven Goldstone Joie A. Gregor (since February 6, 2009) Ruth Ann Marshall Kenneth E. Stinson, Chair
|
|
Reviews, evaluates and
approves compensation plans, policies
and programs for the
companys directors, executive officers
and significant
employees
Reviews and approves
goals and performance metrics for
incentive compensation
arrangements
Annually reviews and
approves corporate goals and objectives
relevant to Chief
Executive Officer compensation, evaluates the
Chief Executive
Officers performance in light of these goals and
objectives, and with
the Chairman and other independent directors,
determines and
approves the Chief Executive Officers
compensation levels
based on such evaluation
Reviews, with the full
Board, succession plans for all senior positions
Receives reports from
management on leadership development activities
|
The Human Resources Committee has retained authority over the
consideration and determination of executive and director
compensation, subject only to the further involvement of the
Chairman and the other independent directors with respect to the
approval of the overall compensation for non-employee directors
and of the annual cash bonus for the Chief Executive Officer.
Additional information on the role of executive officers and the
Committees compensation consultant can be found in the
Compensation Discussion & Analysis later
in this proxy statement.
Compensation Committee Interlocks and Insider
Participation. The individuals listed in the table
above and Messrs. Chain and Roskens (former directors)
served on our Human Resources Committee during fiscal 2009.
During fiscal 2009, none of the current or former executive
officers of ConAgra Foods served on the compensation committee
(or equivalent), or the board of directors, of another entity
whose executive officer(s) served on the Human Resources
Committee or Board of Directors of ConAgra Foods.
8
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Audit Committee
12 meetings in fiscal 2009
|
|
|
|
Oversees the integrity of the companys financial
statements and reviews annual and quarterly SEC filings and
earnings releases
|
|
|
|
|
|
Stephen G. Butler,
Chair Rajive Johri
(since February 5, 2009)
|
|
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Receives reports on matters including critical accounting
policies of the company, significant changes in the
companys selection or application of accounting principles
and the companys internal control processes
|
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W.G. Jurgensen
|
|
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Reviews the qualifications, independence and performance of the
|
Richard H. Lenny
|
|
|
|
independent auditor and internal audit department
|
(since May 11, 2009)
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|
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Andrew J. Schindler
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Has sole authority to retain, compensate, oversee and terminate
the independent auditor
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|
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Pre-approves audit and non-audit services performed by the
independent auditor
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Reviews the companys compliance with legal and regulatory
requirements
|
Audit Committee Financial Expert. The Board has
determined that all five members of the Audit Committee (each of
whom is independent) are qualified as audit committee financial
experts within the meaning of SEC regulations.
Related Party Transactions. The Audit Committee has
adopted a written policy regarding the review, approval or
ratification of related party transactions. Under the policy,
all related party transactions must be pre-approved by the Audit
Committee unless circumstances make pre-approval impracticable.
In the latter case, management is allowed to enter into the
transaction, but the transaction remains subject to ratification
by the Committee at its next regular quarterly meeting. In
determining whether to approve or ratify a related party
transaction, the Audit Committee will take into account, among
other factors it deems appropriate, whether the transaction is
fair and reasonable to the company and the extent of the related
partys interest in the transaction. No director is
permitted to participate in any approval of a related party
transaction for which he or she is involved. On at least an
annual basis, the Committee reviews and assesses ongoing related
party transactions to determine whether the relationships remain
appropriate. All related party transactions are disclosed to the
full Board of Directors.
9
Audit
Committee Report
The Audit Committee assists the Board of Directors in fulfilling
its oversight responsibilities by reviewing (1) the
integrity of the financial statements of the company,
(2) the qualifications, independence and performance of the
companys independent auditor and internal audit
department, and (3) compliance by the company with legal
and regulatory requirements. The Committee acts under a written
charter, adopted by the Board of Directors, a copy of which is
available on our website.
ConAgra Foods management is responsible for the
companys financial reporting process and internal
controls. The independent auditor is responsible for performing
an independent audit of the companys consolidated
financial statements, issuing an opinion on the conformity of
those audited financial statements with generally accepted
accounting principles and assessing the effectiveness of the
companys internal control over financial reporting. The
Audit Committee oversees the companys financial reporting
process and internal controls on behalf of the Board of
Directors.
The Audit Committee has sole authority to retain, compensate,
oversee and terminate the independent auditor. The Audit
Committee reviews the companys annual audited financial
statements, quarterly financial statements, and other filings
with the Securities and Exchange Commission. The Audit Committee
reviews reports on various matters, including: (1) critical
accounting policies of the company; (2) material written
communications between the independent auditor and management;
(3) the independent auditors internal quality-control
procedures; (4) significant changes in the companys
selection or application of accounting principles; and
(5) the effect of regulatory and accounting initiatives on
the financial statements of the company. The Committee also has
the authority to conduct investigations within the scope of its
responsibilities and to retain legal, accounting and other
advisors to assist the Committee in its functions.
During the last fiscal year, the Audit Committee met and held
discussions with representatives of ConAgra Foods management,
its internal audit staff, and KPMG LLP, independent auditor.
Representatives of financial management, the internal audit
staff, and the independent auditor have unrestricted access to
the Audit Committee and periodically meet privately with the
Audit Committee. The Audit Committee reviewed and discussed with
ConAgra Foods management and KPMG the audited financial
statements contained in the companys Annual Report on
Form 10-K
for the fiscal year ended May 31, 2009.
The Committee also discussed with the independent auditor the
matters required to be discussed by the auditor with the
Committee under the Statement on Auditing Standards No. 61,
as amended (relating to communication with audit committees) as
adopted by the Public Company Accounting Oversight Board in
Rule 3200T. The Committee also reviewed and discussed with
KPMG its independence and, as part of that review, received the
written disclosures required by applicable professional and
regulatory standards relating to KPMGs independence from
ConAgra Foods, including those of the Public Company Accounting
Oversight Board pertaining to the independent accountants
communications with the Audit Committee concerning independence.
The Committee also considered whether the provision of non-audit
services provided by KPMG to the company during fiscal 2009 was
compatible with the auditors independence.
Based on these reviews and discussions, and the report of the
independent auditor, the Audit Committee recommended to the
Board of Directors, and the Board approved, that the audited
financial statements be included in the companys Annual
Report on
Form 10-K
for the fiscal year ended May 31, 2009 for filing with the
Securities and Exchange Commission.
ConAgra
Foods, Inc. Audit Committee
Stephen
G. Butler, Chair
Rajive Johri
W.G. Jurgensen
Richard H. Lenny
Andrew J. Schindler
10
Non-Employee
Director Compensation
For fiscal 2009, non-employee directors other than the Chairman
of the Board were entitled to receive the following:
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An annual cash retainer of $50,000 (based on service from the
2008 annual stockholders meeting to the 2009 annual
stockholders meeting). The Chair of each committee other
than the Executive Committee was entitled to an additional
annual cash retainer of $25,000.
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Meeting fees of $1,500 for each Board meeting attended and each
Committee meeting attended at which attendance was required.
|
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|
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An annual grant of 1,800 shares of ConAgra Foods common
stock and options to acquire 9,000 shares of ConAgra Foods
common stock (in each case, based on service from the 2008
annual stockholders meeting to the 2009 annual
stockholders meeting). All options have an exercise price
equal to the closing market price of our common stock on the
date of grant, a ten-year term and are vested six months from
the date of grant.
|
Non-employee directors other than the Chairman who served less
than the full
12-month
period between stockholders meetings received a pro-rated
retainer, pro-rated stock award and pro-rated option award, in
each case, based on actual months of service. Non-employee
directors are precluded from selling any of their shares
(including shares underlying options) in the market until they
cease to be a director.
In lieu of the elements described above, the Chairmans pay
for service from the 2008 annual stockholders meeting to
the 2009 annual stockholders meeting was $500,000, payable
entirely in options to acquire shares of ConAgra Foods common
stock. The options have an exercise price equal to the closing
market price of our common stock on the date of grant
(September 25, 2008, which was the date of the 2008 annual
stockholders meeting), a ten-year term and vested six
months from the date of grant. The number of options issued was
based on the Black-Scholes value of the option on the date of
grant consistent with our accounting expense methodology. Our
Chairman cannot sell the shares underlying the options in the
market until he ceases to be a director.
In addition to the cash payments and equity awards described
above, all non-employee directors were entitled to participate
in the following programs:
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|
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A medical plan, with the cost of the premium borne entirely by
the director;
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|
|
A matching gifts program, under which ConAgra Foods matches up
to $2,000 of a directors charitable donations per calendar
year;
|
|
|
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A non-qualified deferred compensation plan, through which
non-employee directors can defer receipt of their cash or stock
compensation. This program does not provide above-market
earnings (as defined by SEC rules); and
|
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For directors elected to the Board prior to 2003, the
Directors Charitable Award Program (which was discontinued
in 2003). Participating directors nominate one or more
tax-exempt organizations to which ConAgra Foods will contribute
an aggregate of $1 million in four equal annual
installments upon the death of the director. Directors Bay and
Stinson and former directors Chain and Roskens are the only
participating directors. ConAgra Foods maintains insurance on
the lives of these directors to fund the program.
|
11
The table below sets forth the compensation elements described
above that were paid to the non-employee directors of the
company for fiscal 2009:
Director
Compensation Table Fiscal 2009
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|
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Fees Earned
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|
|
|
|
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or Paid
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Stock
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|
Option
|
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All Other
|
|
|
|
|
|
|
in Cash
|
|
|
Awards
|
|
|
Awards
|
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|
Compensation
|
|
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Total
|
|
Name
|
|
($)
|
|
|
($)(2)
|
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|
($)(2)
|
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|
($)(3)
|
|
|
($)
|
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Mogens C. Bay
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92,167
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35,370
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34,200
|
|
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12,901
|
|
|
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174,638
|
|
Stephen G. Butler
|
|
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105,000
|
|
|
|
35,370
|
|
|
|
34,200
|
|
|
|
2,000
|
|
|
|
176,570
|
|
Steven F. Goldstone
|
|
|
|
|
|
|
|
|
|
|
499,996
|
|
|
|
|
|
|
|
499,996
|
|
Joie A. Gregor (1)
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22,667
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|
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20,976
|
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|
|
14,938
|
|
|
|
|
|
|
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58,581
|
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Rajive Johri (1)
|
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37,333
|
|
|
|
22,680
|
|
|
|
16,862
|
|
|
|
|
|
|
|
76,875
|
|
W.G. Jurgensen
|
|
|
83,000
|
|
|
|
35,370
|
|
|
|
34,200
|
|
|
|
|
|
|
|
152,570
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Richard H. Lenny (1)
|
|
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13,417
|
|
|
|
16,034
|
|
|
|
12,765
|
|
|
|
|
|
|
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42,216
|
|
Ruth Ann Marshall
|
|
|
78,500
|
|
|
|
35,370
|
|
|
|
34,200
|
|
|
|
1,500
|
|
|
|
149,570
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|
Andrew J. Schindler
|
|
|
87,500
|
|
|
|
35,370
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|
|
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34,200
|
|
|
|
|
|
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157,070
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|
Kenneth E. Stinson
|
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|
102,000
|
|
|
|
35,370
|
|
|
|
34,200
|
|
|
|
12,901
|
|
|
|
184,471
|
|
Former Directors (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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John T. Chain, Jr.
|
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35,500
|
|
|
|
|
|
|
|
|
|
|
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28,363
|
|
|
|
63,863
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Ronald W. Roskens
|
|
|
35,500
|
|
|
|
|
|
|
|
|
|
|
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29,581
|
|
|
|
65,081
|
|
|
|
|
1.
|
|
Ms. Gregor joined the Board
effective February 6, 2009, Mr. Johri joined the Board
effective January 1, 2009 and Mr. Lenny joined the
Board effective March 17, 2009. Messrs. Chain and
Roskens each departed the Board effective upon conclusion of the
2008 annual stockholders meeting, held September 25,
2008.
|
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2.
|
|
This column reflects the grant date
fair value (computed in accordance with Statement of Financial
Accounting Standard No. 123R, or SFAS 123R) of the
stock and option awards made to each non-employee director.
These amounts also reflect the dollar amount of compensation
expense recognized for financial statement reporting purposes
computed in accordance with SFAS 123R. The grant date fair
values of the option awards were estimated on the date of grant
using a Black-Scholes option-pricing model with the following
weighted average assumptions:
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(a)
|
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For Messrs. Bay, Butler,
Goldstone, Jurgensen, Schindler and Stinson, and
Ms. Marshall: an expected life of the options of
7.82 years, an expected volatility of 22.24%, a risk-free
interest rate of 3.60% and a dividend yield of 3.35%;
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(b)
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For Ms. Gregor: an expected
life of the options of 7.82 years, an expected volatility
of 21.40%, a risk-free interest rate of 1.97% and a dividend
yield of 3.60%;
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(c)
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For Mr. Johri: an expected
life of the options of 7.82 years, an expected volatility
of 21.39%, a risk-free interest rate of 2.20% and a dividend
yield of 3.55%; and
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(d)
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For Mr. Lenny; an expected
life of the options of 7.82 years, an expected volatility
of 21.69%, a risk-free interest rate of 2.77% and a dividend
yield of 3.67%.
|
At fiscal year-end, the aggregate number of outstanding
unexercised option awards held by each non-employee director was
as set forth below (all stock awards granted were fully vested
at fiscal year-end except for the award granted
12
to Ms. Gregor, which fully
vested on August 6, 2009, Mr. Johri, which fully
vested on July 2, 2009, and Mr. Lenny, which will
fully vest on September 17, 2009):
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|
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|
|
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Outstanding
|
|
|
|
|
Outstanding
|
|
|
|
Stock Options Held
|
|
|
|
|
Stock Options Held
|
|
Name
|
|
at
FYE (#)
|
|
|
Name
|
|
at
FYE (#)
|
|
|
Mogens C. Bay
|
|
|
90,000
|
|
|
Ruth Ann Marshall
|
|
|
18,000
|
|
Stephen G. Butler
|
|
|
54,000
|
|
|
Andrew J. Schindler
|
|
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18,000
|
|
Steven F. Goldstone
|
|
|
309,362
|
|
|
Kenneth E. Stinson
|
|
|
90,000
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|
Joie A. Gregor
|
|
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6,000
|
|
|
Former Directors
|
|
|
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|
Rajive Johri
|
|
|
6,750
|
|
|
John T. Chain, Jr
|
|
|
63,000
|
|
W.G. Jurgensen
|
|
|
63,000
|
|
|
Ronald W. Roskens
|
|
|
81,000
|
|
Richard H. Lenny
|
|
|
5,250
|
|
|
|
|
|
|
|
|
|
|
3.
|
|
For Messrs. Bay, Stinson,
Chain and Roskens, the amount reported reflects the incremental
cost to the company during fiscal 2009 of maintaining life
insurance policies that will ultimately fund the Directors
Charitable Award Program. For Mr. Roskens, the amount
reported also includes amounts paid under the matching gifts
program. For Mr. Butler and Ms. Marshall, the amount
paid under the matching gifts program is the entire amount of
All Other Compensation reported. See the narrative
above for a description of the Directors Charitable Award
Program and matching gifts program.
|
13
Proposal
#1: Election of Directors
Our Corporate Governance Principles include a mandatory
retirement age for directors. Under the Principles, a director
may not stand for re-election if he or she would be over
age 72 at the time of the election. Messrs. Chain and
Roskens reached our mandatory retirement age and retired
effective upon the conclusion of the 2008 annual
stockholders meeting. During fiscal 2009, Joie A. Gregor,
Rajive Johri and Richard H. Lenny were appointed to serve as
members of the Board until the 2009 annual meeting of
stockholders. Our Board is currently comprised of eleven members.
The following individuals were nominated by the Nominating and
Governance Committee to stand for election at the meeting. Each
is a current member of the Board whose term of office expires at
the meeting. In case any nominee becomes unavailable for
election to the Board of Directors for any reason not presently
known or contemplated, the proxy holders will have discretionary
authority in that instance to vote the proxies for a substitute.
MOGENS C.
BAY Director since December 12, 1996
Mr. Bay (60 years of age) has served as Chairman of
the Board and Chief Executive Officer of Valmont Industries,
Inc. (products for water management and infrastructure) since
January 1997. He is also a director of Peter Kiewit Sons,
Inc.
STEPHEN G.
BUTLER Director since May 16, 2003
Mr. Butler (61 years of age) served as the Chairman
and Chief Executive Officer of KPMG LLP (national public
accounting firm) from 1996 to June 2002. He is a director of
Cooper Industries, Ltd. and Ford Motor Company.
STEVEN F.
GOLDSTONE Director since December 11, 2003
Mr. Goldstone (63 years of age) has served as
non-executive Chairman of the ConAgra Foods board since
October 1, 2005. He has been a manager of Silver Spring
Group (private investment firm) since 2000. From 1999 to 2000,
Mr. Goldstone served as Chairman of Nabisco Group Holdings
(food company). Mr. Goldstone is a director of
Merck & Co., Inc. and Greenhill & Co., Inc.
JOIE A.
GREGOR Director since February 6, 2009
Ms. Gregor (59 years of age) served as assistant to
the President for presidential personnel under President George
W. Bush. Previously, Ms. Gregor served as Vice Chairman of
Heidrick & Struggles International, Inc. (executive
search firm) from 2002 until 2007. From 1993 until 2002 she
served in a number of senior leadership roles with that firm,
including President, North America, managing partner of the
firms Global Board of Directors Practice and managing
partner of the New York office.
RAJIVE
JOHRI Director since January 1, 2009
Mr. Johri (59 years of age) served as President and
Director of First National Bank of Omaha (FNBO), from 2006 until
2009. From September 2005 to June 2006, he served as President
of First National Credit Cards Center for FNBO. Prior to that,
he served as an Executive Vice President for J.P. Morgan
Chase Bank from 1999 until 2004.
W.G.
JURGENSEN Director since August 2, 2002
Mr. Jurgensen (58 years of age) served as Chief
Executive Officer and a director of Nationwide Financial
Insurance Services, Inc. (insurance) from 2000 to 2009. He also
served as Chief Executive Officer and a director of several
other companies within the Nationwide enterprise, which is
comprised of Nationwide Financial, Nationwide Mutual, Nationwide
Mutual Fire and all of their respective subsidiaries and
affiliates. Mr. Jurgensen is a director of The Scotts
Miracle-Gro Company.
RICHARD H.
LENNY Director since March 17, 2009
Mr. Lenny (57 years of age) served as Chairman,
President and Chief Executive Officer of The Hershey Company
(manufacturer of confectionery and snack products), from 2001
through 2007. Prior to joining
14
Hershey, Mr. Lenny was group vice president of Kraft Foods
and President, Nabisco Biscuit and Snacks, following
Krafts acquisition of Nabisco in 2000. He joined Nabisco
in 1998 from the Pillsbury Company where he was president of
Pillsbury, North America. Mr. Lenny is a director of
McDonalds Corporation and Discover Financial Services.
RUTH ANN
MARSHALL Director since May 23, 2007
Ms. Marshall (55 years of age) was President of the
Americas, MasterCard International (payments industry) from
October 1999 until her retirement in June 2006. She is a
director of Global Payments Inc. and Pella Corporation.
GARY M.
RODKIN Director since October 1, 2005
Mr. Rodkin (57 years of age) has been our President
and Chief Executive Officer since October 1, 2005.
Previously, he was Chairman and Chief Executive Officer of
PepsiCo Beverages and Foods North America (consumer
products and manufacturing) from February 2003 to June 2005. He
also served as President and Chief Executive Officer of PepsiCo
Beverages and Foods North America in 2002, and President and
Chief Executive Officer of Pepsi-Cola North America from 1999 to
2002. Mr. Rodkin is a director of Avon Products, Inc., the
Grocery Manufacturers of America and Boys Town.
ANDREW J.
SCHINDLER Director since May 23, 2007
Mr. Schindler (65 years of age) served R. J. Reynolds
Tobacco Holdings, Inc. (tobacco products) as Chairman and Chief
Executive Officer from 1999 to 2004 and Reynolds American, Inc.
(tobacco products) as Chairman from July 2004 until his
retirement in December 2005. Mr. Schindler achieved the
rank of captain in the U.S. Army, where he held command and
staff positions in the United States and in Vietnam. He is a
director of Krispy Kreme Doughnuts Inc. and Hanesbrands, Inc.
KENNETH E.
STINSON Director since December 12, 1996
Mr. Stinson (66 years of age) is Chairman of the Board
of Peter Kiewit Sons, Inc. (construction and mining). He
served as Chief Executive Officer of Peter Kiewit Sons,
Inc. from 1998 until 2004. Mr. Stinson is a director of
Kiewit Investment Fund LLLP, Valmont Industries, Inc. and
McCarthy Group, L.L.C.
The Board
of Directors recommends a vote FOR each of the
listed nominees.
15
Proposal
# 2: Approval of the ConAgra Foods 2009 Stock
Plan
General
We are asking stockholders to approve the ConAgra Foods 2009
Stock Plan, which we refer to as the 2009 Stock Plan. The Board
of Directors approved the 2009 Stock Plan in July 2009, subject
to stockholder approval. The Board approved the 2009 Stock Plan
and recommends a vote in favor of its approval because of the
critical role that stock incentives play in aligning manager and
stockholder interests and advancing the Human Resources
Committees pay for performance agenda. As discussed in the
Compensation Discussion & Analysis, a
significant portion of the compensation paid to our executive
officers is in the form of stock-based awards, which ensures a
pay for performance link. The Human Resources Committee
(referred to in this Proposal #2 as the Committee) has also
approved the issuance of stock-based awards to a broad array of
managers throughout the company. Stock incentives can motivate
superior performance by encouraging managers to make decisions
that increase the value of the company, and thus their own
wealth. Stock incentives also enable the company to attract and
retain the services of a high-caliber management team.
As of July 31, 2009, only 2,414,715 shares of common
stock remain available for grant under ConAgra Foods 2006
Stock Plan, which we refer to as the 2006 Plan. The 2009 Stock
Plan authorizes the issuance of up to 29,500,000 additional
shares of ConAgra Foods common stock. Any shares that have not
been awarded under the 2006 Plan as of the time of approval of
the 2009 Stock Plan, together with any shares that are
cancelled, terminated or otherwise settled without the issuance
of common stock under the 2006 Plan; the ConAgra Foods 1990
Stock Plan, which we refer to as the 1990 Plan; the ConAgra
Foods 1995 Stock Plan, which we refer to as the 1995 Plan; and
the ConAgra Foods 2000 Stock Plan, which we refer to as the 2000
Plan, will also be authorized for issuance under the 2009 Stock
Plan. We refer to the 2000 Plan, together with the 1990 Plan,
the 1995 Plan and the 2006 Plan, as the Predecessor Plans.
Shares used to pay the exercise price of, or withholding taxes
associated with, an award under the Predecessor Plans will not
be made available for issuance as awards under the 2009 Stock
Plan.
As of July 31, 2009, an aggregate of 39,474,721 shares
of common stock could be issued upon the exercise of outstanding
options under the Predecessor Plans. These options have a
weighted average exercise price of $22.50 and a weighted average
remaining term of 5.15 years. No stock appreciation rights,
which we refer to as SARs, were outstanding. Further, as of
July 31, 2009, an aggregate of 4,848,467 shares of
common stock were could be issued under all Predecessor Plans
for full value awards, that is, awards other than
options or SARs.
If the 2009 Stock Plan is approved, ConAgra Foods will not issue
any new awards under the 2006 Plan. The 1990 Plan, 1995 Plan and
the 2000 Plan were terminated upon the approval of the 2006 Plan
and accordingly, ConAgra Foods will not issue any new awards
under the 1990 Plan, the 1995 Plan or the 2000 Plan.
Summary
of the 2009 Stock Plan
Below is a summary of the principal features of the 2009 Stock
Plan. The summary is qualified in its entirety by reference to
the complete text of the 2009 Stock Plan, which is set forth in
Annex A to this Proxy Statement.
Administration and Delegation. The Committee will
administer the 2009 Stock Plan and its determinations will be
binding on all participants. The Committee may delegate any or
all of its powers to one or more of its members. The Committee
may also delegate to any individual officer of the company the
authority to designate recipients of awards and the number and
type of awards granted, although the officer cannot use this
authority to grant awards to executive officers, directors or
him or herself. This delegation authority does not permit the
grant of an award to any executive officer or other employee who
is reasonably expected to be covered by Section 162(m) of
the Internal Revenue Code, which we refer to as the Code, except
by two or more directors who each meet the criteria of
outside director under Section 162(m) of the
Code.
16
Eligibility. The 2009 Stock Plan authorizes the
Committee to make awards to employees of ConAgra Foods and its
subsidiaries, and to non-employee directors of ConAgra Foods and
consultants. The number of grantees will vary from year to year.
During fiscal 2009, approximately 1,200 participants were
granted awards under the 2006 Plan. Based on this, we expect
that approximately 1,200 participants will annually receive
awards under the 2009 Stock Plan. The number of options and
other awards, if any, that an individual will be entitled to
receive under the 2009 Stock Plan will be at the discretion of
the Committee and therefore cannot be determined in advance.
Authorized Shares. The maximum number of shares of
ConAgra Foods common stock, $5.00 par value, that may
be issued under the 2009 Stock Plan is 29,500,000. Any shares
that have not been issued and are not subject to outstanding
awards under the 2006 Plan as of the time of approval of the
2009 Stock Plan, together with any shares that are cancelled,
terminated or otherwise settled without the issuance of common
stock under the Predecessor Plans, are also authorized for
issuance under the 2009 Stock Plan. As of July 31, 2009,
2,414,715 shares of common stock had not been issued and
were not subject to outstanding awards under the 2006 Plan.
Shares used to pay the exercise price of, or withholding taxes
associated with an award under the Predecessor Plans will not be
made available for issuance as awards under the 2009 Stock Plan.
Any shares of common stock subject to an award that for any
reason is cancelled, terminated or otherwise settled without the
issuance of any common stock are again available for awards
under the 2009 Stock Plan. However, shares (1) used to pay
the exercise price of an award or to pay withholding taxes, and
(2) shares not issued or delivered as a result of a net
settlement of SARs are not again made available for awards under
the 2009 Stock Plan.
Shares eligible for grant under the 2009 Stock Plan can be from
authorized but unissued shares or treasury shares.
Limits on Grants. Under the 2009 Stock Plan, no
single participant in any fiscal year may receive awards with
respect to shares of common stock that amount to more than 15%
of the aggregate number of shares of common stock authorized for
the 2009 Stock Plan. A maximum of 50% of the shares of stock
available under the 2009 Stock Plan may be issued as awards
other than stock options or SARs. The number of shares of stock
that may be issued as awards to non-employee directors under the
2009 Stock Plan in any fiscal year is 5% of the aggregate number
of shares available under the 2009 Stock Plan.
Adjustments to Awards. The 2009 Stock Plan requires
that if there is a stock dividend, stock split,
recapitalization, merger, consolidation, combination, spinoff,
distribution of assets to stockholders, exchange or other
similar corporate transaction or event, appropriate adjustments
must be made by the Committee in the number of shares available
for future issuance under the 2009 Stock Plan, in the maximum
number of shares available for grant to any individual under the
2009 Stock Plan, and in the number of shares, prices and dollar
values (as applicable) of all awards outstanding before the
event.
The exercise price of an outstanding stock option may not be
reduced without stockholder approval except in the limited
circumstances of (1) an adjustment stemming from a
corporate transaction (as described in the immediately preceding
paragraph), or (2) upon assumption of options previously
issued by companies acquired by the company by merger or stock
purchase.
Dividend Equivalents. No dividends or dividend
equivalents may be paid on stock options or SARs under the 2009
Stock Plan. For restricted stock and other stock-based awards,
the 2009 Stock Plan allows the Committee to provide, at its
discretion and at the time of grant, for dividends or dividend
equivalents to be paid (or accumulated and paid) to the
participant.
Types of
Awards Allowed Under the 2009 Stock Plan
Stock Options. The Committee may grant nonqualified
options and options qualifying as incentive stock options. The
option price of nonqualified stock options and incentive stock
options will be the fair market value of the common stock on the
date of grant. Options qualifying as incentive stock options
will be required to meet certain requirements of the Code and
only participants who are employees will be eligible to receive
incentive stock options.
17
The 2009 Stock Plan allows the Committee to determine the method
or methods of payment to be allowed for the exercise of stock
options. These methods may include payment in cash, withholding
shares otherwise issuable on exercise of the option or by
delivering other shares of common stock.
Stock options may not be granted under the 2009 Stock Plan in
consideration for a participants delivery of ConAgra Foods
stock as payment of the exercise price of or taxes due on any
other stock option. In other words, no reload options are
permitted.
The 2009 Stock Plan requires that the Committee fix the term of
each option, but the term may not exceed ten years from the date
of grant. The Committee will determine the time or times when
each option is exercisable. Options can be made exercisable in
installments, and the exercisability of options may be
accelerated by the Committee. The Committee intends to
accelerate the exercisability of options only in special
circumstances. Unless provided otherwise in the option
agreement, all outstanding options under the 2009 Stock Plan
will become immediately exercisable in the event of a
change-in-control
(as defined in the 2009 Stock Plan) of ConAgra Foods.
Stock Appreciation Rights. The 2009 Stock Plan
authorizes the Committee to grant stock appreciation rights,
which we refer to as SARs, which may be granted in conjunction
with an option or separately from any option. Each SAR granted
in tandem with an option can be exercised only to the extent
that the corresponding option is exercised, and the SAR will
terminate upon termination or exercise of the corresponding
option. Upon the exercise of a SAR granted in tandem with an
option, the corresponding option will terminate. SARs granted
separately from options can be granted on the terms and
conditions established by the Committee.
SARs may be made exercisable in installments, and the
exercisability of SARs may be accelerated by the Committee. The
Committee intends to accelerate the exercisability of SARs only
in special circumstances. However, the 2009 Stock Plan does not
permit the term of a SAR to exceed ten years from the date of
grant. The 2009 Stock Plan allows the Committee to determine the
method or methods of payment to be allowed for the exercise of a
SAR. Unless provided otherwise in the SAR agreement, all
outstanding SARs become immediately exercisable in the event of
a
change-in-control
(as defined in the 2009 Stock Plan) of ConAgra Foods.
Restricted Stock. The 2009 Stock Plan authorizes the
Committee to grant awards of restricted stock, with such
restrictions on vesting as the Committee may determine.
Restrictions can relate to, among other things, continued
employment with the company, or to ConAgra Foods financial
performance.
The Committee has the right to accelerate the vesting of
restricted stock awards and to waive any restrictions to
vesting. The Committee intends to grant acceleration or waiver
of restricted stock provisions only in special circumstances.
Unless provided otherwise in the restricted stock agreement, all
restrictions lapse in the event of a
change-in-control
(as defined in the 2009 Stock Plan) of ConAgra Foods.
Other Awards. The 2009 Stock Plan authorizes the
Committee to grant awards to participants that are valued in
whole or in part by reference to, or are otherwise based on the
fair market value of ConAgra Foods common stock (which we
refer to as other stock-based awards) on such terms
as the Committee may determine. Such awards may include
restricted stock units, or RSUs, which may be settled in ConAgra
Foods common stock or otherwise, and performance share
awards which are the subject of one or more performance goals.
For awards that are intended to satisfy the requirements for
performance-based compensation under
Section 162(m) of the Code, which we refer to as
qualified performance-based awards, performance
goals will be selected from the following criteria:
|
|
|
Cash flow
|
|
Net Sales
|
Free cash flow
|
|
Gross sales
|
Operating cash flow
|
|
Sales Volume
|
Earnings
|
|
Stock price
|
Market share
|
|
Total stockholder
return
|
Economic value added
|
|
Dividend ratio
|
Achievement of annual
operating budget
|
|
Price-to-earnings ratio
|
Profits
|
|
Expense targets
|
18
|
|
|
Profit contribution
margins
|
|
Operating efficiency
|
Profit before taxes
|
|
Customer satisfaction
metrics
|
Profit after taxes
|
|
Working capital targets
|
Operating profit
|
|
Achievement of
R&D goals and/or development of products
|
Return on assets
|
|
Goals related to
acquisitions or divestitures
|
Return on investment
|
|
Formation or
dissolution of joint ventures
|
Return on equity
|
|
Corporate bond ratings
|
Return on invested
capital
|
|
Debt to equity or
leverage ratios
|
Financial performance
goals determined by the Committee that are sufficiently similar
to the
foregoing as to be
permissible under Section 162(m) of the Code.
|
Additional Limitations. A maximum of 5% of the
shares of stock available under the 2009 Stock Plan may be
issued as stock awards, restricted stock, RSUs, or performance
shares having no minimum vesting period. Subject to the
foregoing, and except in the case of a
change-in-control
(as defined in the 2009 Stock Plan) of ConAgra Foods, the death
or disability of a participant, or a participants
termination of employment, no award (other than a stock option
or SAR) (1) that is based on performance goals shall be
based on performance over a period of less than one year, or
(2) that is conditioned on continued employment or the
passage of time shall provide for vesting in less than three
years from the grant date of the award, provided, however, that
partial vesting pursuant to an award agreement may occur during
each year of this three-year period.
Tax Withholding. The Committee may permit a
participant to satisfy all withholding tax requirements through
the delivery to ConAgra Foods of previously-acquired shares of
common stock or by having shares otherwise issuable under the
2009 Stock Plan withheld by ConAgra Foods. Alternatively,
participants must satisfy any tax withholding requirements by
remitting cash or a check.
Other Information. Except as permitted by the
Committee, awards under the 2009 Stock Plan are not transferable
except by will or under the laws of descent and distribution.
The Board may terminate the 2009 Stock Plan at any time but such
termination will not affect any award then outstanding. Unless
terminated by action of the Board, the 2009 Stock Plan will
continue in effect until September 25, 2019, but awards
granted prior to that date will continue in effect until they
expire in accordance with their original terms.
The Board may amend the 2009 Stock Plan as it deems advisable.
Amendments that (1) materially modify the requirements for
participation in the 2009 Stock Plan, (2) increase the
number of shares of ConAgra Foods common stock subject to
issuance under the 2009 Stock Plan, (3) change the minimum
exercise price for stock options as provided in the 2009 Stock
Plan, or (4) extend the term of the 2009 Stock Plan, must
be submitted to stockholders for approval.
Compliance
with Section 162(m) of the Code
Section 162(m) of the Code denies a deduction by a publicly
held company for certain compensation in excess of
$1 million per year paid to the companys chief
executive officer or any of the companys three other most
highly compensated executive officers, generally other than the
chief financial officer, who are employed as of the end of the
year. Compensation realized with respect to stock options and
SARs, including upon exercise of a SAR or a non-qualified stock
option or upon a disqualifying disposition of an incentive stock
option, as described in the next section entitled Federal
Income Tax Consequences, will be excluded from this
deduction limit if it satisfies certain requirements, including
a requirement that the 2009 Stock Plan be approved by ConAgra
Foods stockholders. In addition, other awards under the
2009 Stock Plan may be excluded from this deduction limit if
they are conditioned on the achievement of one or more
performance goals that have been approved by the companys
stockholders. Approval of the 2009 Stock Plan by ConAgra
Foods stockholders at the annual meeting will constitute
approval of such performance goals.
19
Federal
Income Tax Consequences
The following is a summary of the U.S. federal income tax
consequences of various awards under the 2009 Stock Plan.
With respect to incentive stock options, if the holder of an
option does not dispose of the shares acquired upon exercise of
the option within one year from the transfer of such shares to
such participant, or within two years from the date the option
to acquire such shares is granted, then for federal income tax
purposes (1) the optionee will not recognize any income at
the time of exercise of the option; (2) the excess of the
fair market value of the shares as of the date of exercise over
the option price will constitute an item of
adjustment for purposes of the alternative minimum tax;
and (3) the difference between the option price and the
amount realized upon the sale of the shares by the optionee will
be treated as a long-term capital gain or loss. If the holder of
an incentive stock option disposes of the shares acquired upon
exercise of the option within one year from the transfer of such
shares to such participant, or within two years from the date
the option to acquire such shares is granted, then for federal
income tax purposes the participant will recognize ordinary
income equal to the difference between the fair market value of
the shares as of the date of exercise and the option price, or
if less, the amount by which the value of the shares on the date
of the sale or other disposition exceeds the option exercise
price; any additional increase in the value of option shares
after the exercise date will be taxed as capital gain. ConAgra
Foods will not be allowed a deduction for federal income tax
purposes in connection with the granting of an incentive stock
option or the issuance of shares thereunder if the holding
period discussed above is met. If the shares are sold or
disposed of before the expiration of the required holding
period, ConAgra Foods will be allowed a tax deduction equal to
the amount of ordinary income recognized by the participant.
With respect to the grant of options which are not incentive
stock options, the person receiving an option will recognize no
income on receipt thereof. Upon the exercise of the option, the
optionee will recognize ordinary income in the amount of the
difference between the option price and the fair market value of
the shares on the date the option is exercised. ConAgra Foods
generally will receive an equivalent deduction at that time.
With respect to restricted stock awards and other stock awards,
an amount equal to the fair market value of the ConAgra Foods
shares distributed to the participant (in excess of any purchase
price paid by the participant) will be includable in the
participants gross income at the time of receipt unless
the award is not transferable and subject to a substantial risk
of forfeiture as defined in Section 83 of the Code (which
we refer to as a forfeiture restriction). If a participant
receives an award subject to a forfeiture restriction, the
participant may elect to include in gross income the fair market
value of the award. In the absence of such an election, the
participant will include in gross income the fair market value
of the award subject to a forfeiture restriction on the earlier
of the date such restrictions lapse or the date the award
becomes transferable. ConAgra Foods generally is entitled to a
deduction at the time and in the amount that the income is
included in the gross income of a participant.
With respect to performance shares and SARs, the amount of any
cash (or the fair market value of any common stock) received
will be subject to ordinary income tax in the year of receipt
and ConAgra Foods generally will be entitled to a deduction for
such amount.
The Board
of Directors recommends a vote FOR Proposal #
2.
20
Equity
Compensation Plan Information
The following table provides information about shares of our
common stock that may be issued upon the exercise of options,
warrants and rights under existing equity compensation plans as
of our most recent fiscal year-end, May 31, 2009.
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Securities
|
|
|
|
|
|
|
Weighted-Average
|
|
|
Remaining Available for
|
|
|
|
Number of Securities to
|
|
|
Exercise Price of
|
|
|
Future Issuance Under
|
|
|
|
be Issued Upon Exercise
|
|
|
Outstanding
|
|
|
Equity Compensation Plans
|
|
|
|
of Outstanding Options,
|
|
|
Options, Warrants, and
|
|
|
(Excluding Securities
|
|
|
|
Warrants, and Rights
|
|
|
Rights
|
|
|
Reflected in Column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders (1)(2)
|
|
|
36,715,007
|
|
|
$
|
23.33
|
|
|
|
12,122,138
|
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
36,715,007
|
|
|
$
|
23.33
|
|
|
|
12,122,138
|
|
|
|
|
(1)
|
|
This table does not include
outstanding options for 1,806 shares at a weighted average
exercise price of $14.4114 per share; these options were assumed
in connection with an acquisition in fiscal 2001. No additional
awards can be granted under the plan under which these options
were originally issued.
|
|
(2)
|
|
Column (a) includes
1,351,000 shares that could be issued under performance
shares outstanding at May 31, 2009. The performance shares
are earned and common stock issued if pre-set financial
objectives are met. Actual shares issued may be equal to, less
than or greater than the number of outstanding performance
shares included in column (a), depending on actual performance.
Column (b) does not take these awards into account because
they do not have an exercise price. Column (b) also
excludes 2,382,860 RSUs and 587,850 deferral interests in
deferred compensation plans that are included in column
(a) but do not have an exercise price. The units vest and
are payable in common stock after expiration of the time periods
set forth in the related agreements. The interests in the
deferred compensation plans are settled in common stock on the
schedules selected by the participants.
|
As of July 31, 2009, an aggregate of 39,474,721 shares
of common stock could be issued upon the exercise of outstanding
options under existing equity compensation plans. These options
have a weighted average exercise price of $22.50 and a weighted
average remaining term of 5.15 years. No SARs were
outstanding. Further, as of July 31, 2009, an aggregate of
4,848,467 shares of common stock could be issued under
existing equity compensation plans for full value awards.
21
Proposal #3:
Approval of the ConAgra Foods Executive Incentive Plan
General
We are asking stockholders to approve the ConAgra Foods
Executive Incentive Plan, as amended and restated
2009, which we refer to as the EIP. The Board of Directors
approved the EIP in July 2009, subject to stockholder approval.
The EIP is necessary for the company to preserve the tax
deductibility of cash incentive awards paid to executive
officers under Section 162(m) of the Code.
Section 162(m) limits the deductibility of compensation to
the chief executive officer and the next three most highly
compensated executive officers, generally other than the chief
financial officer. However, the limit on deductibility does not
apply to compensation defined in Section 162(m) as
performance-based compensation (which we refer to as
qualified performance-based compensation).
The Human Resources Committee (referred to in this
Proposal #3 as the Committee), has developed an executive
compensation program that includes a significant level of
compensation based on the achievement of performance goals.
However, for awards to constitute qualified performance-based
compensation, stockholder approval of the following must occur
at least every five years:
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the classes of employees eligible to receive qualified
performance-based compensation;
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a description of the business criteria on which the performance
goals can be based; and
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the maximum amount of compensation that can be paid to an
eligible employee for attainment of the performance goal(s).
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The EIP, as approved by the Board of Directors, specifies these
items. Stockholders last approved a similar plan five years ago,
in 2004 (the 2004 Executive Incentive Plan, or the 2004 EIP).
The material terms of the 2004 EIP, as amended and restated as
the EIP, are submitted for stockholder approval at this meeting.
If stockholders do not approve the EIP, the 2004 EIP will be
cancelled and the Committee will need to reevaluate the
compensation of employees who are eligible for the EIP. In
addition, this would adversely affect ConAgra Foods
ability to deduct compensation paid to our chief executive
officer and the next three most highly compensated executive
officers other than the chief financial officer.
The terms of the EIP are similar to the 2004 EIP, with material
differences noted in the summary of the EIP below.
Summary
of the EIP
Below is a summary of the principal features of the EIP. The
summary is qualified in its entirety by reference to the
complete text of the EIP set forth in Annex B to this Proxy
Statement.
Administration of the EIP. The EIP will be
administered by the Committee, which is composed entirely of
directors who each meet the criteria of outside
director under Section 162(m) of the Code,
non-employee director under the rules of the SEC and
independent director under the listing standards of
the NYSE. The Committee will have the full power and authority
to administer and interpret the EIP, which includes, among other
things, selecting participants, approving pre-established
objective performance goals for awards, and certifying the level
to which each performance goal was attained prior to any payment
under the EIP. Unlike the 2004 EIP, the EIP also permits the
Committee to delegate its responsibilities under the EIP to
individuals, including members of management, appointed by the
Committee, provided that the Committee may not delegate with
respect to a qualified performance-based award if doing so would
cause such award to fail to qualify under Section 162(m) of
the Code.
Eligibility. Executive officers, senior officers,
and other employees performing similar duties for ConAgra Foods
are eligible to receive awards under the EIP. The Committee will
select the specific officers and employees who will participate
in the EIP each performance period. Accordingly, no employee is
guaranteed to be eligible to participate for any performance
period and an employee who is selected by the
22
Committee for participation in one performance period may be
excluded from participation in any subsequent performance
period. The approximate number of participants in the 2004 EIP
for fiscal 2009 was 25. We expect approximately the same number
of participants will be annually eligible to participate in the
EIP. The number of awards that an individual will be entitled to
receive under the EIP will be at the discretion of the Committee
and therefore cannot be determined in advance.
Performance Goals. Awards under the EIP can use
performance goals based on an expanded list of business criteria
versus the criteria included in the 2004 EIP. As described later
under the heading Compensation Discussion &
Analysis, the Committee has developed an executive
compensation program that includes a significant level of
compensation based on the achievement of performance goals.
However, for purposes of the deductibility of compensation under
Section 162(m) of the Code, performance goals under the EIP
may be based on any one or more of the following business
criteria:
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Cash flow
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Net sales
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Free cash flow
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Gross sales
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Operating cash flow
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Sales Volume
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Earnings
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Stock price
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Market share
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Total stockholder
return
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Economic value added
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Dividend ratio
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Achievement of annual
operating budget
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Price-to-earnings ratio
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Profits
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Expense targets
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Profit contribution
margins
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Operating efficiency
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Profit before taxes
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Customer satisfaction
metrics
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Profit after taxes
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Working capital targets
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Operating profit
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Achievement of
R&D goals and/or development of products
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Return on assets
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Goals related to
acquisitions or divestitures
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Return on investment
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Formation or
dissolution of joint ventures
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Return on equity
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Corporate bond ratings
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Return on invested
capital
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Debt to equity or
leverage ratios
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Financial performance
goals determined by the Committee that are sufficiently similar
to the
foregoing as to be
permissible under Section 162(m) of the Code.
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The EIP provides that within 90 days after commencement of
the performance period for an award (or, if shorter, before
25 percent of the performance period has elapsed), the
Committee will establish:
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the business criteria upon which awards will be based, as well
as the related performance goals, which may vary by participant
or by groups of participants. When setting the performance
goal(s) for an award, the EIP authorizes the Committee to
describe them in terms of objectives that are company-wide
and/or
related to a subsidiary, reporting segment or business unit. In
addition, a performance goal may be stated on an absolute or
relative basis, and earnings may be compared to capital,
stockholders equity, shares outstanding, investments,
assets or net assets;
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the performance period over which performance is to be
determined, which may be a fiscal year or a period that is
shorter or longer than a fiscal year; and
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the maximum compensation that may be paid in connection with the
award upon the achievement of a specified performance goal
during the performance period. Subject to the maximum
compensation specified, the Committee may provide a threshold
level of performance below which no amount of compensation will
be paid, and it may provide for the payment of differing amounts
of compensation for different levels of performance.
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The EIP authorizes the Committee to establish rules and
procedures for cases where employment or eligibility begins
after the start of a performance period, or ends before payment
of an award.
Determining Achievement of Performance
Goals. Qualified performance-based awards may be paid
only after certification by the Committee that the specified
performance goals established under the EIP were
23
achieved. In general, in determining whether any performance
goal has been satisfied, the Committee may exclude (i) any
or all extraordinary items (as determined under
U.S. generally accepted accounting principles), and
(ii) any other unusual or nonrecurring items or events,
including but not limited to: (a) charges, costs or
benefits or gains associated with: restructurings of ConAgra
Foods; litigation or claim adjudication, judgments or
settlements; mergers, acquisitions, or divestitures; and
material changes in business, operations, corporate or capital
structure; (b) foreign exchange or hedge-related gains and
losses; (c) asset write-downs; (d) discontinued
operations; and (e) the cumulative effects of accounting
changes. However, in the case of qualified performance-based
awards, these exclusions and adjustments may only apply to the
extent the Committee specifies in writing (not later than the
time performance goals are required to be established) which
exclusions and adjustments the Committee will apply to determine
whether a performance goal has been satisfied, as well as an
objective manner for applying them, or to the extent that the
Committee determines that they may apply without adversely
affecting the awards status as a qualified
performance-based award.
Negative Discretion. Notwithstanding the attainment
of the specified performance goal or measures in an award, the
Committee has the sole discretion, for each participant, to
reduce some or all of an award that would otherwise be paid.
Payment of Awards. Awards will be payable following
the completion of each performance period (unless deferred
consistent with Section 409A of the Code). The shares
underlying equity-based awards, including stock awards and
options, will be issued out of the ConAgra Foods stock plan in
existence at the time of payment.
Award Limitations. The maximum individual award
permitted under the EIP in a fiscal year has increased from the
2004 EIP. Under the EIP, a single participant may not receive
aggregate cash compensation under the EIP in any fiscal year of
more than 1% of ConAgra Foods market capitalization as of
the first day of the performance period. In the case of a
performance period other than a
12-month
fiscal year, the maximum award is an amount that bears the same
ratio to 1% of ConAgra Foods market capitalization as of
the first day of the performance period, as the length of the
performance period bears to a
12-month
fiscal year. Under the 2004 EIP, the maximum individual award
permitted was capped at 0.1% of ConAgra Foods market
capitalization as of the first day of the fiscal year.
The Board
of Directors recommends a vote FOR Proposal #
3.
24
Proposal
# 4: Ratification of the Appointment of Independent
Auditor
The firm of KPMG LLP conducted the audits of our financial
statements for fiscal years 2009 and 2008. The Audit Committee
has re-appointed KPMG as the independent registered public
accounting firm to conduct the fiscal 2010 audit of our
financial statements and the Board of Directors requests that
the stockholders ratify this appointment.
Representatives from KPMG are expected to be present at the
annual meeting. The representatives will have the opportunity to
make a statement and will be available to respond to appropriate
questions. In the event the stockholders do not ratify the
appointment, the Audit Committee will reconsider the appointment.
Fees billed to us by KPMG for services provided for fiscal years
2009 and 2008 were as follows:
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Fiscal 2009
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Fiscal 2008
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Audit Fees
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$
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5,842,700
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$
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7,028,000
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Audit-Related Fees
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7,000
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1,221,500
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Tax Fees
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18,000
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All Other Fees
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5,250
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5,250
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Total Fees
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$
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5,854,950
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$
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8,272,750
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Audit Fees consist of the audits of our fiscal years 2009
and 2008 annual financial statements and the review of our
quarterly financial statements during fiscal years 2009 and 2008.
Audit-Related Fees in fiscal 2009 consist of other
attestation services and in fiscal 2008 consist primarily of
employee benefit plan audits and the audit of the financial
statements of a business unit that was being sold.
Tax Fees in fiscal 2008 consist primarily of
international tax compliance services.
All Other Fees in fiscal years 2009 and 2008 relate to a
license for accounting research software.
The Audit Committee pre-approves all audit and non-audit
services performed by the independent auditor. The Audit
Committee will periodically grant general pre-approval of
categories of audit and non-audit services. Any other services
must be specifically approved by the Audit Committee, and any
proposed services exceeding pre-approved cost levels must be
specifically pre-approved by the Audit Committee. In periods
between Audit Committee meetings, the Chairman of the Audit
Committee has the delegated authority from the Committee to
pre-approve additional services, and his pre-approvals are then
communicated to the full Audit Committee at its next meeting.
The Audit Committee approved 100% of the services performed by
KPMG relating to audit-related fees, tax
fees and all other fees during fiscal years
2009 and 2008.
The Board
of Directors recommends a vote FOR Proposal #
4.
25
Executive
Compensation
The following Compensation Discussion & Analysis
describes how the companys Human Resources Committee,
which we refer to in this Executive Compensation
section as the Committee, and Board of Directors design the
executive compensation program and set individual pay. The focus
of the Compensation Discussion & Analysis is our
fiscal 2009 compensation program for the individuals identified
in our compensation tables. We refer to these individuals as our
named executive officers. Fiscal 2009 began
May 26, 2008 and ended May 31, 2009.
Compensation
Discussion & Analysis
Executive
Summary
The primary focus of the ConAgra Foods executive compensation
program is to encourage and reward behavior that promotes
sustainable growth in stockholder value through attainment of
annual and long-term goals. This focus is intended to limit
speculative rewards for short-term results.
Fiscal 2009 was Chief Executive Officer Gary Rodkins third
full fiscal year with the company. Under Mr. Rodkins
direction, senior management has been focused on transforming
ConAgra Foods into one integrated operating company delivering
sustainable, profitable growth. Late in fiscal 2006,
Mr. Rodkin and his senior management team shared with
investors a three-year strategic plan for moving the company
through that transformation. The strategic plan for fiscal years
2007 to 2009 was centered on changing the companys
culture, divesting non-core businesses, developing a
fewer, bigger, better approach to innovation,
developing more effective marketing, improving in-store
execution, and achieving significant cost savings, primarily
through supply chain improvements. The company believed that
successful execution of the plan would create stockholder value
by growing metrics including earnings before interest and taxes
and return on average invested capital. As such, the Committee
concurrently redesigned the companys long-term incentive
plan to provide financial rewards if growth in these metrics was
achieved.
In each of fiscal years 2007, 2008 and 2009, the companys
long-term strategic plan was considered when designing the
annual operating plan. The fiscal 2009 operating plan focused on
delivering our fewer, bigger, better promise,
particularly in the Consumer Foods business, continuing the
operating excellence in our Commercial Foods business, and
completing the divestiture of the non-core Trading and
Merchandising reporting segment and effectively redeploying the
sale proceeds. The Committee designed an annual incentive plan
to provide financial rewards if management achieved the profit
targets associated with the operating plan initiatives. As
fiscal 2009 progressed, input cost inflation exceeded
expectations and the outlook dimmed for the broader economy. The
company lowered its profit forecast as a result. However, the
Committee did not adjust the performance targets in the annual
incentive plan.
Over the last three fiscal years, the company has accomplished
many of the goals outlined in its fiscal 2007 to 2009 strategic
plan, including:
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Established a new cultural focus, based around our operating
principles of simplicity, accountability and collaboration, that
is creating better execution by a more engaged team;
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Divested approximately $3.2 billion of net assets,
including those of the Trading and Merchandising business and
businesses with little competitive advantage while
simultaneously investing approximately $320 million
(exclusive of assumed liabilities) to acquire businesses more
closely aligned with our long-term goals;
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Delivered winning innovation and world-class marketing;
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Rewired business processes to enable faster and more
informed business decisions, including through 23 successful
implementations of SAP at company locations;
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Attacked our cost structure and overhead costs to generate
significant dollars for reinvestment in the business; and
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26
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Repurchased $1.7 billion of our common stock and reduced
our outstanding indebtedness by a net of approximately
$127 million, all while maintaining a healthy dividend
yield for stockholders.
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Although we met many of the goals of our fiscal 2009 annual
operating plan, it was a year with varied performance. Our
Consumer Foods segment underperformed in the first half of the
year, in large part due to unplanned input cost inflation.
However, by the third quarter, the segment had achieved
year-over-year
growth in operating profit and fourth quarter performance was
even stronger. This second-half growth was due in large part to
the introduction of many on-trend new products, strong
marketing, a transformation of major brands in our frozen foods
business, and an intense focus on business fundamentals.
Although its first-half performance prevented the Consumer Foods
segment from achieving its original fiscal 2009 profit targets,
the segments second-half performance created significant
momentum for the company as it began fiscal 2010.
Our Commercial Foods segment experienced increasing external
challenges as fiscal 2009 progressed. The segments key
customers are restaurants and other foodservice
operators−businesses that were impacted significantly by
the weakened economy. However, a strong full-year performance by
the segments flour milling business, together with a focus
on efficiencies, product mix and pricing throughout the segment,
led Commercial Foods to overachieve its sales and profit goals
for the year.
It was within this context that the Committee analyzed
compensation programs for fiscal 2009 and authorized the payouts
under our fiscal 2007 to 2009 long-term incentive plan and
fiscal 2009 annual incentive plan discussed later in this
Compensation Discussion & Analysis.
What
are the Objectives of ConAgra Foods Compensation
Program?
Our executive compensation program is designed to support four
objectives:
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Rewarding performance and aligning with
stockholders. . . to inspire and reward
behavior that promotes sustainable growth in stockholder value.
Pay-for-performance
is a central tenet of the program, with the intent that the
program not incent executives to take unnecessary and excessive
risks that threaten the health and viability of the company.
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Competing for talent with programs that are reasonably
competitive versus the external
market. . . because the achievement of our
strategic plans requires us to attract and retain talented
leaders who have the skills, vision and experience to lead our
company.
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Creating internal pay
equity. . . recognizing that individual pay
will reflect differences in performance, responsibilities and
market considerations, but that programs should be sufficiently
similar to promote decisions that better the company as a whole.
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Promoting and rewarding long-term
commitment. . . and longevity of career with
ConAgra Foods.
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How is
the Executive Compensation Program Designed and
Approved?
The Committee considers a variety of factors when designing the
compensation program and setting pay, including:
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company and individual performance, and our expectations for
these factors;
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external and internal pay comparisons;
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an individuals pay history;
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the general business environment in which the compensation
decision is being made;
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practices and developments in compensation design; and
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the potential complexity of a program, preferring programs that
are easily administered and transparent to stockholders.
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27
The Committee relies on the expertise of an independent
compensation consultant, Towers Perrin, to assist it in
obtaining and reviewing information relevant to these factors.
The independence and performance of the consultant are of the
utmost importance to the Committee. As a result, the Committee
maintains a policy that prevents management from directly
engaging Towers Perrin for significant projects without the
prior approval of the Committee Chair. Also, the Committee
reviews the types of services provided by Towers Perrin, and all
fees paid for those services on a regular basis, and conducts a
formal evaluation of the consultant annually. For fiscal 2009,
fees paid to Towers Perrin for all work related to ConAgra Foods
(directly for the Committee and other services) totaled less
than $550,000.
As mentioned above, the Committee considers external pay
comparisons when setting pay. The Committee does not set our
named executive officers total compensation at any
specific percentile of an external peer groups
compensation levels but does find external pay data informative.
Specifically, the Committee reviews general industry data, a
customized survey of the food and consumer products industry,
and a survey of a peer group of consumer product
companies. Towers Perrin provides the Committee with this market
information and assists the Committee in understanding the
competitive market for the companys executive positions.
The composition of the peer group is reviewed
annually. Towers Perrin assists the Committee by compiling a
list of consumer product companies (with an emphasis on food and
beverage companies) with revenues comparable to ConAgra Foods
and with whom we compete for talent. The Committee works with
Towers Perrin to ensure that the peer group is large enough to
withstand unanticipated changes in the included companies
structure or compensation programs. Shortly before the start of
the fiscal year, the Committee approved the following peer group
composition for fiscal 2009:
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Anheuser-Busch Companies, Inc.*
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Campbell Soup Company
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Clorox Company
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The
Coca-Cola
Company
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Colgate-Palmolive Company
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Dean Foods Company
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General Mills, Inc.
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H.J. Heinz Company
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The Hershey Company
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Hormel Foods Corporation
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Kellogg Company
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Kimberly-Clark Corporation
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Kraft Foods Inc.
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McCormick & Company, Inc.
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Molson Coors Brewing Company
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PepsiCo, Inc.
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Sara Lee Corporation
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WM. Wrigley Jr. Company*
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* |
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Each of these companies was removed from the fiscal 2010 peer
group as a result of being acquired. |
The Committee prefers to keep the peer group consistent from
year to year. The fiscal 2008 and 2009 peer groups were
identical. The median revenue of the peer group listed above is
similar to ours. We use regression analysis to adjust the
compensation data for differences in company revenues.
Considering the extent to which the company and our executive
officers perform against expectations is also a critical
component of the pay process. We discuss the link between
company financial performance and our incentive compensation
plans later in this Compensation Discussion &
Analysis. Mr. Rodkin contributes to compensation decisions
by providing the Committee with his views on the appropriate
company goals to use in incentive plans. At the end of an
incentive plans performance period, he contributes by
offering the Committee his views of the companys actual
performance. In fiscal 2009, the Committee used his input when
determining the extent of discretion to apply to the annual
incentive plans funding level.
With respect to individual performance, the Committee relies on
regular performance evaluations. The full Board participates in
a formal evaluation of Mr. Rodkins performance each
year. As a part of this process, Mr. Rodkin provides the
Board with a self-assessment. For the other named executive
officers, none of whom reports directly to the Board,
Mr. Rodkin shares his assessment of their performance
against individual objectives. As part of this assessment,
Mr. Rodkin provides his view on the level of salary and
incentive compensation that the Committee should consider
awarding to the other named executive officers. Neither
Mr. Rodkin nor any other individual named executive officer
plays a direct role in his or her own compensation determination.
As the economy deteriorated during fiscal 2009 and the company
reviewed whether reductions in compensation or benefit programs
would be needed to offset, in part, the related impacts,
Mr. Rodkin asked
28
the Committee to freeze his and his senior management
teams salaries for fiscal 2010, in part in order to allow
for modest growth in wages and salaries for the rest of the
companys employees. The Committee agreed to this freeze.
The remainder of this Compensation Discussion &
Analysis focuses primarily on fiscal 2009 compensation
decisions, but we do address significant changes to programs and
pay levels for fiscal 2010 in the various sections. Our senior
Human Resources officers and our compensation and benefits
department work closely with the Committee to implement and
administer the approved programs and support the Committee in
communications with Towers Perrin.
What
Were the Key Elements of the Fiscal 2009 Compensation
Program?
The fiscal 2009 pay packages for our named executive officers
consisted of salary, short and long-term incentive opportunities
and other benefits discussed below. The Committee determined the
mix of salary and at-risk pay (targeted short-term incentive
levels as a percentage of salary, option grants and targeted
performance shares) based primarily on its review of the
executives position within the company, internal pay
equity, and market data provided by Towers Perrin. The Committee
believes that using a mix of compensation types (for example,
salary, cash incentives, and equity) and performance periods
(for example, one-year and three-year periods) promotes behavior
consistent with our long-term strategic plan and minimizes the
likelihood of executives having significant motivation to pursue
unsustainable results.
By design, targeted at-risk pay for the named executive officers
for fiscal 2009 was a significant percentage, more than 75% of
the total opportunity. This is shown in the charts below. The
Committees general policy is to provide the greatest
percentage of this at-risk pay opportunity in the form of
long-term compensation payable in shares of our common stock.
The Committee believes this emphasis is the best method of
aligning management interests with those of our stockholders.
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FY09 Senior Officer Compensation
Mix (At Target)
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FY09 CEO Compensation Mix (At
Target)
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At
Risk Compensation: 77%
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At
Risk Compensation: 87%
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For fiscal 2009, consistent with previous years and based on the
factors described above, Mr. Rodkins annual incentive
opportunity (which we refer to and discuss below as the
Management Incentive Plan or MIP) and long-term incentives
(comprised of performance shares and an option award) were
larger than the other named executive officers. The Committee
took into account Mr. Rodkins leadership, value to
the company and accountability for the performance of the entire
organization. The Committee also reviewed market data related to
Mr. Rodkins compensation, as a whole and for each
component, and found them reasonable versus the peer group. The
Committee believes that within the company, Mr. Rodkin
should have the highest ratio of at-risk pay to salary and
largest aggregate compensation opportunity.
With respect to the other named executive officers, for fiscal
2009, the Committee reviewed each persons scope of
responsibility, skills and experience, the strategic plan for
each persons position, the long-term potential of the
individual in the position, retention factors, and relevant
market data. The Committee also considered internal pay equity.
This analysis resulted in some differences in the incentive
opportunities awarded under the MIP and performance share plan
for these executives, and differences in option grant sizes
based on the individual factors reviewed. However, the total
compensation opportunity for each of these named executive
officers reflects a similar mix of at-risk pay and salary.
29
At the start of fiscal 2009, when the Committee made its fiscal
2009 compensation decisions for the named executive officers, it
examined the value of each element of the fiscal 2009 program
individually and collectively, coming to a Total
Compensation opportunity for each named executive officer.
However, the Committees process uses a computational
approach that differs from that required to compile the
Total column in the Summary Compensation Table. Most
notably, the Summary Compensation Tables Total
column includes the expense recognized by the company for
financial statement reporting purposes with respect to stock
options, performance shares and other equity awards granted in
the indicated years and in prior years. The Committee made its
fiscal 2009 decisions regarding the appropriateness of a named
executive officers Total Compensation
opportunity by reviewing the full grant date fair value,
determined in accordance with Statement of Financial Accounting
Standards No. 123 (revised 2004), of proposed stock option,
performance share and other equity awards for only fiscal 2009.
The Committee used the full grant date fair value because it
provided the Committee with a total compensation view that was
comparable to the market data provided and better enabled an
analysis of internal equity. This is consistent with prior
years practice.
The following is a more detailed analysis of each element of the
fiscal 2009 compensation program for our named executive
officers.
Salaries. The Committee determines salary by
analyzing a positions strategic importance to the company,
recruitment and retention pressures, the executives
contribution to the company and the market data supplied by
Towers Perrin. The Committee does not automatically set salary
as a percentile versus the peer group or other market data.
Salary levels depend foremost on individual experience and
performance, company priorities, internal equity and overall
reasonableness versus the market.
In its implementation of these principles, the Committee chose
not to provide salary increases for Messrs. Rodkin, Messel,
Perez or Sharpe for fiscal 2009. Mr. Rodkin is party to an
employment agreement that provides for a minimum annual salary
of $1,000,000 per year and Mr. Sharpe is party to an
employment agreement that provides for a minimum annual salary
of $675,000. The Committee believed that these respective
amounts remained appropriate.
On January 16, 2009, the Board appointed Andre J. Hawaux
(our former Chief Financial Officer) to the position of
President, Consumer Foods, giving him responsibility for leading
the businesses comprising the companys Consumer Foods
reporting segment. Mr. Hawaux also has responsibility for
our information technology function. Mr. Hawauxs
salary was increased from $525,000 to $600,000 with this
significant change in his responsibilities.
Also on January 16, 2009, the Board promoted John F.
Gehring (our former Corporate Controller) to the position of
Executive Vice President and Chief Financial Officer. In
connection with Mr. Gehrings promotion, his salary
was increased from $400,000 to $450,000, reflecting the increase
in his responsibilities.
As discussed above, the Committee honored the request to freeze
senior managements salaries for fiscal 2010.
Incentive Programs. The Committee aligned management
compensation with company performance through a mix of annual
and long-term incentive programs during fiscal 2009. Financial
targets disclosed in this section are done so in the limited
context of these incentive plans and they are not statements of
managements expectations or estimates of results or other
guidance. We specifically caution investors not to apply these
statements to other contexts.
Short-Term Incentive Plan. The fiscal 2009 MIP
provided a cash incentive opportunity to about
2,000 employees, including the named executive officers,
based on:
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our fiscal 2009 performance against pre-established financial
goals for company-wide profit before tax, or PBT;
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the method in which the company delivered its PBT
performance; and
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each participants performance against his or her
individual objectives.
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30
The application of each of these considerations to the fiscal
2009 awards earned by the named executive officers follows.
First Consideration: Were Pre-Established Performance Goals
Met? The Committee designed the fiscal 2009 MIP to
reward achievement of company-wide PBT goals. At the start of
fiscal 2009, the Committee authorized threshold, target and
maximum PBT goals, and correlated senior management incentive
opportunities with those levels of PBT. The Committee has
discretion to exclude items impacting comparability from
company-wide PBT goals pursuant to the terms of the plan. The
PBT goals for the fiscal 2009 MIP were:
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Threshold PBT for Fiscal 2009 MIP:
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$1,022 million
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Target PBT for Fiscal 2009 MIP:
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$1,136 million
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Maximum PBT for Fiscal 2009 MIP:
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$1,212 million
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The threshold and target levels of PBT approved by the Committee
were selected purposefully to align with the early fiscal 2009
guidance given to our investors of diluted earnings per share
from continuing operations of $1.56 to $1.59, excluding items
impacting comparability. In line with its pay for performance
philosophy, the Committee did not revise the plans PBT
goals when, at the end of the first quarter of fiscal 2009,
management determined that the company was unlikely to achieve
targeted levels of PBT. The Committee understood that if the
companys fiscal 2009 PBT fell below the threshold level of
company-wide PBT for the full year, no short-term incentives
would have been authorized for payment to the named executive
officers.
The following table shows the ranges of authorized payments for
the named executive officers at the various levels of PBT
approved for the fiscal 2009 MIP. The Committee authorized a
range of payout options at each level of PBT to maximize its
flexibility to determine awards while still preserving the tax
deductibility of these awards. The named executive officers were
made aware that absent extraordinary performance, the Committee
authorized these ranges with the intent of making payouts that
were adjusted downward toward the low-end of each range. As a
result, the Committee believes that no incentive is guaranteed,
each named executive officers targeted MIP opportunity is
a reference to the low-end of the range identified in column
(2) of the following table, and each executive
officers maximum MIP opportunity is a reference to the
high-end of the range identified in column (3) of the
following table.
31
Authorized
MIP Payout Range With Achievement of:
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Column (1)
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At Least Threshold
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PBT Performance, But
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Column (2)
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Less Than Target
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At Least Target PBT
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Column (3)
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Performance
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Performance, But Less Than
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At Least Maximum PBT
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PBT Range: $1,022
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Maximum Performance
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Performance
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million to $1,135
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PBT Range: $1,136 million to
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PBT Range: At or
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million
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$1,211 million
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above $1,212 million
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Gary M. Rodkin (a)
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$0 to $2 million
(0% to 200% of salary)
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$2 to $4 million
(200% to 400% of salary)
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Up to $4 million
(No more than 400% of salary)
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John F. Gehring (b)
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$0 to $366.6 thousand (0% to 100% of salary)
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$366.6 to $733.2 thousand
(100% to 200% of salary)
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Up to $960.0 thousand (No more than 300% of salary)
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Andre J. Hawaux (c)
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$0 to $600 thousand
(0% to 100% of salary)
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$600 thousand to $1.2 million
(100% to 200% of salary)
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Up to $1.8 million
(No more than 300% of salary)
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Scott Messel
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$0 to $242.9 thousand (0% to 70% of salary)
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$242.9 to $485.8 thousand
(70% to 140% of salary)
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Up to $728.7 thousand (No more than 210% of salary)
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Peter M. Perez
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$0 to $344 thousand
(0% to 80% of salary)
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$344 to $688 thousand (80% to 160% of salary)
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Up to $1.032 million (No more than 240% of salary)
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Robert F. Sharpe, Jr. (d)
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$0 to $675 thousand
(0% to 100% of salary)
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$675 thousand to $1.35 million
(100% to 200% of salary)
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Up to $2.025 million (No more than 300% of salary)
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(a)
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Mr. Rodkins employment
agreement leaves his MIP opportunity uncapped, but in July 2008,
he agreed to a 400% target cap for fiscal 2009. His agreement
does not contain a guaranteed MIP payment.
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(b)
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In connection with
Mr. Gehrings promotion to Chief Financial Officer in
January 2009, the Committee increased his salary and MIP
opportunity (but not above the pre-specified high-end of the MIP
range if maximum PBT performance had been achieved). The salary
and MIP opportunity reflected above have been prorated to
reflect an annualized salary and MIP opportunity.
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(c)
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In connection with
Mr. Hawauxs promotion to President, Consumer Foods,
his salary was increased. The Committee authorized use of his
new salary for the full year in the calculation of his MIP
opportunity (but not above the pre-specified high-end of the MIP
range if maximum PBT performance had been achieved).
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(d)
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Mr. Sharpe is party to an
employment agreement with the company that provides for a target
MIP opportunity of not less than 100% of salary. No payout is
guaranteed.
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The fiscal 2009 MIP defined PBT as the companys income tax
expense plus its net income from continuing operations before
cumulative effect of changes in accounting. In order to incent
management to make decisions that have positive long-term
impacts, even at the expense of shorter term results, and to
prevent one-time gains from having too great an impact on plan
payouts, the terms of the plan allowed PBT to be adjusted for
specific restructuring or unusual items that occurred during the
year. For fiscal 2009, the
32
Committee approved adjustments to eliminate the impact of
expenses incurred in connection with a debt refinancing
transaction, a litigation related charge, restructuring costs
and a gain on the sale of a small business.
The company achieved fiscal 2009 PBT of $1,048.8 million,
which was above threshold but less than targeted performance.
Payouts up to the high-end of the levels indicated in column
(1) of the above table were thus permitted, but, as
discussed below, not ultimately approved.
Second Consideration: How was the Business Plan
Delivered? Once the PBT review was complete, the
Committee considered the manner in which management executed the
operating plan during the year. The fiscal 2009 MIP gave the
Committee discretion to reduce executive officer payouts based
on this assessment.
Mr. Rodkin provided his views to the Committee during this
process. Mr. Rodkin recognized that the company did not
achieve the company-wide PBT target set at the start of the
fiscal year, and communicated his strong belief that pay levels
should be commensurate with performance. Mr. Rodkin advised
the Committee of his belief that while many of the
companys businesses faced challenges at times during the
year, the companys ConAgra Mills business (which is a part
of the Commercial Foods segment) excelled consistently. He also
discussed his views of the importance to the long-term success
of the company of building momentum in the Consumer Foods
business and its impressive second half results, as well as of
the Commercial Foods business ability to navigate the
difficult economic environment. Mr. Rodkin advised the
Committee that each of these factors contributed to the
companys ability to achieve its revised profit targets for
the year.
The Committee concurred with Mr. Rodkins assessment
of the companys business performance during the year, and
agreed with him that payouts at levels less than those permitted
by the PBT formula were appropriate.
Third Consideration: How Did Each Named Executive Officer
Perform? The Committees final consideration in
determining each named executive officers fiscal 2009 MIP
payout was an assessment of the executives individual
performance. Mr. Rodkins input on the individual
contribution of each other named executive officer in fiscal
2009 assisted the Committee in approving specific MIP payouts
for these individuals. The full Boards performance
evaluation of Mr. Rodkin was used in determining his payout.
After considering the individual performance of each named
executive officer (discussed below), the Committee approved MIP
payouts to the named executive officers ranging from 55% to 67%
of the dollar amounts allowed. The Committee believes that the
MIP awards paid to the named executive officers for fiscal 2009
are consistent with the level of accomplishment by the company
and the named individuals.
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Maximum MIP Award Authorized
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Named
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For Performance Between
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Actual MIP Payout
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Executive Officer
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Threshold and Target
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($)
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Gary M. Rodkin
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$
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2,000,000
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$
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1,100,000
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John F. Gehring
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$
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366,600
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$
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220,000
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Andre J. Hawaux
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$
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600,000
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$
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390,000
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Scott Messel
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$
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242,900
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$
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160,300
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Peter M. Perez
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$
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344,000
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$
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200,000
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Robert F. Sharpe, Jr.
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$
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675,000
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$
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450,000
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Long-Term Incentive Plan. Working closely with
Towers Perrin, the Committee redesigned our long-term incentive
plan for senior officers in fiscal 2007. In each year of the
program to date (2007, 2008 and 2009), the plan has included an
award of stock options and an award of performance shares that
are settled in shares of common stock and that are focused on
results over the ensuing three-year performance period (in other
words, the fiscal 2007 to 2009 performance period, the fiscal
2008 to 2010 performance period and the fiscal 2009 to 2011
performance period). The performance shares reward the
improvement over the three-year performance period in metrics
likely to have a significant impact on enterprise value: growth
in earnings from
33
continuing operations before interest and taxes, or EBIT, and
performance against return on average invested capital goals, or
ROAIC. These metrics are calculated as follows:
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We calculate EBIT by adding net interest expense and income tax
expense to income from continuing operations. Similar to the
MIP, adjustments may be made for unusual items.
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We calculate ROAIC by adding net interest expense to income from
continuing operations. We divide this sum by average invested
capital. Average invested capital is the twelve-month rolling
average of total assets less cash and cash equivalents and
non-interest bearing liabilities (in other words, we exclude
significant interest-bearing assets and liabilities, along with
their income statement impact, from the calculation).
Adjustments may be made to these calculations for unusual items.
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The program also rewards stock price appreciation directly
through the granting of stock options. The ultimate value of
earned performance shares, which are paid in stock, is also
impacted directly by stock price.
The Committee firmly believes in aligning our senior
officers interests with those of our stockholders. The
significant extent to which equity is included in both the
executive pay program overall and this program in particular
evidences this belief. We describe each component of the plan
below.
Stock Options. The use of stock options directly
aligns the interests of the named executive officers with those
of our stockholders. The options granted in July 2008 to our
named executive officers for fiscal 2009 have a seven-year term,
an exercise price at the companys closing market price on
the date of grant ($21.26), and vested 40% on the first
anniversary of the grant date. The remaining portion of the
stock option award vests in equal installments on the second and
third anniversaries of the grant date, subject to the
executives continued employment with the company. As noted
in the table below, Messrs. Gehring and Hawaux received
incremental stock option grants in January 2009 in connection
with their promotions. The accounting expense associated with
the stock options awarded to our named executive officers for
fiscal 2009 is included in the Option Awards column
of the Summary Compensation Table. The number of options granted
to each named executive officer under the fiscal 2009 option
program is as follows:
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Named
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Stock Options
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Executive Officer
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Granted For Fiscal 2009 Program
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Gary M. Rodkin
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500,000
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John F. Gehring(1)
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120,000
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Andre J. Hawaux(1)
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260,000
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Scott Messel
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60,000
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Peter M. Perez
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120,000
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Robert F. Sharpe, Jr.
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180,000
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1.
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Includes 40,000 stock options
granted to Mr. Gehring and 100,000 stock options granted to
Mr. Hawaux, in each case in connection with their January
2009 promotions. The incremental awards were granted
January 16, 2009, have a seven-year term, and an exercise
price equal to the closing market price of the companys
common stock on the date of grant ($16.99).
Mr. Gehrings incremental award vests 40% on
January 16, 2010, 30% on January 16, 2011 and 30% on
January 16, 2012. Mr. Hawauxs incremental award
cliff-vests (100%) on January 16, 2012.
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34
Performance Shares. Performance shares represent the
award of an opportunity to earn a set number of shares of our
common stock if we achieve pre-set, three-year performance
goals. For the three performance periods in effect during fiscal
2009, the targeted number of shares for each named executive
officer was as set forth in the table that follows.
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Performance Shares
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Performance Shares
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Performance Shares
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Named
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Granted for Fiscal
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Granted for Fiscal
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Granted for Fiscal
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Executive Officer
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2009 to 2011 Program
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2008 to 2010 Program
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2007 to 2009 Program(2)
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Gary M. Rodkin
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100,000
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100,000
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300,000
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John F. Gehring (1)
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29,000
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16,000
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48,000
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Andre J. Hawaux
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32,000
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32,000
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80,000
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Scott Messel
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12,000
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12,000
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36,000
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Peter M. Perez
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24,000
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24,000
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72,000
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Robert F. Sharpe, Jr.
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32,000
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32,000
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96,000
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1.
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In July 2008, Mr. Gehring was
granted 16,000 performance shares for the fiscal 2009 to 2011
program. In connection with his January 2009 promotion, the
Committee granted him an additional 13,000 performance shares
for that cycle of the program.
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2.
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For a discussion of grant sizes in
the fiscal 2007 to 2009 program versus those in the fiscal 2008
to 2010 and fiscal 2009 to 2011 programs, see the
Award Value discussion below. Prior to
the end of fiscal 2009, two-thirds of these performance shares
were earned and distributed in shares of common stock to all
named executive officers other than Mr. Hawaux in
settlement of interim opportunities (see the
Interim Opportunity discussion below).
Mr. Hawaux had earned and received one-half of these
performance shares prior to the end of fiscal 2009 (see the
Interim Opportunity discussion below).
After the end of fiscal 2009, the remaining one-third, or
one-half in the case of Mr. Hawaux, of these performance
shares, plus the shares earned for over-performance against plan
targets for all three years, were earned and distributed.
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The accounting expense associated with these performance share
awards is included in the Stock Awards column of the
Summary Compensation Table. More specific information about the
performance shares follows.
Award Value. For the first three cycles of the
long-term program, the Committee has awarded each named
executive officer the targeted number of performance shares
shown in the table above. The number of performance shares
granted under the fiscal 2007 to 2009 program is greater than
that provided under the other outstanding cycles (by a factor of
approximately three) because it was the first cycle of the new
program. The Committee viewed a larger grant as appropriate for
the first year to provide an effective transition from prior
programs and serve as a retention tool. In each of fiscal years
2008 and 2009, the award sizes, by named executive officer, have
been approximately flat (excluding the impact of promotions). In
lieu of determining performance share grant sizes using a
targeted dollar value, and then dividing that value by our stock
price on the date of grant, the Committee uses a fixed share
approach. For fiscal 2009, this meant that notwithstanding a
lower stock price at the time of grant as compared to fiscal
2008 (a closing market price of $21.26 per share in July 2008
vs. a closing market price of $26.80 per share in July 2007),
the named executive officers received approximately the same
number of targeted performance shares. The Committee believed
that this approach was appropriate because the executives should
earn their way into higher levels of compensation by achieving
the companys long-term plan and creating stockholder value.
The actual number of shares of common stock that will be issued
for each performance share cycle is determined based on a
combination of growth in EBIT and performance against targets
for ROAIC. The Committee selected these financial metrics
because it believes they have a positive impact on stockholder
value. The performance targets for the three cycles are set
forth in the following table. Results at the target
35
level will result in a payout of 100% of the total number of
shares (as specified in the table above) in our common stock.
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3-Year Compound
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3-Year Average ROAIC
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EBIT Growth Target
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Target
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Fiscal 2007 to 2009 cycle
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6
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%
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10.5
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%
|
Fiscal 2008 to 2010 cycle
|
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6
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%
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11.6
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%
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Fiscal 2009 to 2011 cycle
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14
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%
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10.6
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%
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Because these EBIT targets are focused on growth over the
relevant performance period, the baseline level of EBIT from
which performance is expected to grow impacts the target. A low
baseline for the fiscal 2009 to 2011 cycle (due to weaker than
planned performance in our Consumer Foods business in fiscal
2008) is the reason for the 14% EBIT growth target in that
cycle. The high growth target versus prior periods is not an
indication of a significant change in the companys
long-term performance goals.
In each program cycle, lower levels of combined EBIT growth and
ROAIC are rewarded at significantly less than a full payout on
the granted performance shares. There is no guaranteed payout in
any cycle of the program. In each case, the maximum number of
shares that may be earned under the plan is 300% of the original
grant.
When the Committee adopted the performance share program, it
included the ability to adjust EBIT and ROAIC for restructuring
and unusual items as appropriate. In May 2008, the Committee
considered the impact on the fiscal 2007 to 2009 cycle and
fiscal 2008 to 2010 cycle of the performance share program from
the then-pending sale of the companys Trading and
Merchandising reporting segment. Consistent with the
pre-specified authority for adjustments, the Committee sought to
minimize an unintended adverse consequence for participants due
to the loss of EBIT from the Trading and Merchandising business.
Accordingly, the Committee authorized continued inclusion of the
fiscal 2008 earnings from the business in the EBIT calculation
for the two cycles, notwithstanding that the segments
results were moved to discontinued operations in connection with
the sale. However, no adjustment was made to the EBIT
calculation for either cycle to compensate for the impact on our
fiscal 2009 EBIT from the sale of the business. As a result of
the sale, for fiscal 2009, both income from operations and the
gain from the sale (both recorded in discontinued operations) of
the Trading and Merchandising reporting segment were excluded
from EBIT, resulting in an adverse impact on EBIT growth. As
contemplated in the pre-specified formula, the Committee reduced
the denominator in the ROAIC calculation by the amount of the
net proceeds from the sale. The authorization covered the
calculation of fiscal 2008 and 2009 ROAIC under the fiscal 2007
to 2009 cycle, and the calculation of fiscal 2008, 2009 and 2010
ROAIC under the fiscal 2008 to 2010 cycle.
Interim Opportunity. The primary goal of the fiscal
2007 redesign of the long-term incentive program was better
alignment of the program with the companys strategic
direction. However, as a secondary matter, for the first
three-year cycle only, the Committee felt that retention was
critically important and therefore approved an interim payout
feature in the fiscal 2007 to 2009 performance share grant.
Under the interim payout feature, participants other than
Mr. Hawaux received a payout following each of fiscal years
2007 and 2008 in the amount of one-third of the initial target
value of the award (in other words, one-third of the total
performance share grant for the fiscal 2007 to 2009 program
shown in the table on page 35) plus the share
equivalent of accumulated dividends. Mr. Hawaux joined the
company after the start of fiscal 2007 and, although the
Committee authorized his participation in the program, he was
excluded from the first interim payout. Instead, he was given
the opportunity to earn, and did earn, a distribution of
one-half of his initial grant based on cumulative fiscal 2007
and 2008 results, plus the share equivalent of accumulated
dividends. The Committee had established interim growth targets
at the beginning of the three-year cycle that were required for
the interim payouts to occur. As disclosed in prior years
proxy statements, the company achieved its interim targets for
fiscal years 2007 and 2008.
Neither the fiscal 2008 to 2010 program (approved by the
Committee in July 2007) nor the fiscal 2009 to 2011 program
(approved by the Committee in July 2008) contains an
interim payout feature. Awards under
36
these programs, if earned, will be paid in shares of stock
subsequent to the end of fiscal years 2010 and 2011,
respectively.
Fiscal
2007-2009
Performance. At the end of fiscal 2009, the first cycle
of the long-term program concluded. The company delivered a
combined level of three-year compound EBIT growth and three-year
average ROAIC over the fiscal 2007 to 2009 performance period
(after adjustments) that mathematically equated to a funding
level of approximately 162% of target. The Committee reduced
this amount to 160% of target for ease of plan administration.
This funding level was achieved through the delivery of
three-year compound EBIT growth of 1.74%, and a three-year
average ROAIC of 12.85%. EBIT growth was below targeted levels,
due in part to the inclusion of EBIT from the Trading and
Merchandising business for fiscal years 2006 (the baseline),
2007 and 2008, but not for fiscal 2009, as discussed above. The
ROAIC performance reflected above-target results for the
performance period.
EBIT growth and average ROAIC for the fiscal 2007 to 2009 cycle
were calculated taking into account the divestiture-related
adjustments discussed above. The Committee also authorized
several less significant adjustments to fiscal 2009 EBIT to
eliminate the impact of unusual items, specifically, expenses
incurred in connection with a debt refinancing transaction, a
litigation related charge and restructuring costs.
The following numbers of shares of common stock were issued to
the named executive officers following fiscal 2009 to complete
the payout of the performance shares earned for the fiscal 2007
to 2009 cycle: for Mr. Rodkin, 311,110 shares
(resulting in a total of 520,148 shares over the entire
performance period); for Mr. Gehring, 49,777 shares
(resulting in a total of 83,223 shares over the entire
performance period); for Mr. Hawaux, 97,045 shares
(resulting in a total of 139,185 shares over the entire
performance period); for Mr. Messel, 37,333 shares
(resulting in a total of 62,417 shares over the entire
performance period); for Mr. Perez, 74,666 shares
(resulting in a total of 124,835 shares over the entire
performance period); and for Mr. Sharpe, 99,555 shares
(resulting in a total of 166,446 shares over the entire
performance period). The amounts indicated here for fiscal 2009
represent one-third, and in the case of Mr. Hawaux
one-half, of the targeted performance shares reflected in the
table for the fiscal 2007 to 2009 program on page 35, plus
the number of shares equal to an additional 60% of those
targets. Dividend equivalents, paid in additional shares, are
also included.
With respect to the fiscal 2008 to 2010 program and fiscal 2009
to 2011 program, no payouts have yet been earned.
Other Features. Performance shares that have not
been paid at the time of a participants termination of
employment are forfeited. An exception allows pro-rata payouts
in the event of death, disability or retirement. The Committee
has also retained the discretion to provide for payouts on
termination when it finds it appropriate and in the best
interest of the company. To date, however, the Committee has not
used this discretion. Both this exception and discretion are
subject to satisfaction of the performance goals. Dividend
equivalents are paid on the portion of performance shares
actually earned, and are paid at the regular dividend rate in
shares of our stock.
The long-term plan approved for the fiscal 2010 to 2012
performance period is substantially similar to the prior
years cycles. It does not have an interim payout feature.
Other
Fiscal 2009 Compensation.
Discretionary Bonus. The Committee may choose to
approve a sign-on or discretionary bonus for a senior officer if
it deems it necessary as a recruitment tool or to recognize
extraordinary performance (shown in the Bonus column
of the Summary Compensation Table).
Retirement and Health and Welfare Programs. We offer
a package of core employee benefits to our employees, including
our named executive officers. This includes health, dental and
vision coverage, life insurance and disability insurance. The
company and employee participants share in the cost of these
programs. Each of the named executive officers was also entitled
to participate in an executive physical program, together with
his spouse, during fiscal 2009. The company covers the cost of
these physicals, although the executive is responsible for the
taxes associated with this expense. With respect to retirement
37
benefits, we maintain qualified 401(k) retirement plans (with a
company match on employee contributions) and qualified pension
plans. The named executive officers participate in these plans.
Some of the named executive officers participate in a
non-qualified pension plan, non-qualified 401(k) plan and
deferred compensation plan. The non-qualified pension and
non-qualified 401(k) plans permit us to pay retirement benefits
to certain named executive officers in amounts that exceed the
limitations imposed by the Code under qualified plans. With
respect to the non-qualified pension plan, our employment
agreements with Messrs. Rodkin and Sharpe provide that,
subject to service requirements and various exceptions, years of
service for purposes of calculating benefits will be credited at
a
three-for-one
rate until the executive has service credit of thirty years.
Mr. Rodkins agreement also provides that the annual
earnings amount to be used in the pension benefit formula under
the non-qualified pension plan will be no less than
$3.0 million.
The deferred compensation plan allows the named executive
officers, as well as a broader group of approximately
800 employees, to defer receipt of up to 50% of their base
salary and 85% of their annual incentive cash compensation. The
program permits executives to save for retirement in a
tax-efficient way at minimal cost to the company. Executives who
participate in the program are not entitled to above-market (as
defined by the SEC) or guaranteed rates of return on their
deferred funds.
We show contributions made by the company to the named executive
officers 401(k) plan and non-qualified 401(k) plan
accounts in the All Other Compensation column of the
Summary Compensation Table. We provide a complete description of
these retirement programs under the headings Pension
Benefits Fiscal 2009 and Non-Qualified
Deferred Compensation Fiscal 2009.
Perquisites. The Committees philosophy on
perquisites for senior officers has been consistently
communicated over the years. Members of senior management are
not eligible for indirect pay except in limited circumstances.
The incremental cost to the company of providing these benefits
is included in the All Other Compensation column of
the Summary Compensation Table. Specific benefits and
arrangements with Messrs. Rodkin and Sharpe are summarized
here.
The Committee has determined it appropriate to cover
Mr. Rodkin by our security policy. As a result, he is
required to take corporate aircraft for all business and
personal air transportation. To offset the incremental cost to
the company of Mr. Rodkins personal use of corporate
aircraft, the company has entered into an aircraft timeshare
agreement with Mr. Rodkin. The Committee also authorized a
timeshare agreement for Mr. Sharpe. Under the agreements,
the executives are responsible for reimbursing the company, in
cash, in an amount approximately equal to the variable cost of
operating the aircraft for each personal flight he takes.
Change in Control/Severance Benefits. We have
agreements with our named executive officers that are designed
to promote stability and continuity of senior management in the
event of a change in control. The Committee routinely evaluates
participation in this program and the benefit levels contained
therein to ensure their reasonableness. We provide a complete
description of the amounts potentially payable to our named
executive officers under these agreements under the heading
Potential Payments upon Termination or Change in
Control.
We have also adopted a broad severance plan applicable to most
salaried employees, including the named executive officers. In
some circumstances, we have supplemented this plan with specific
severance arrangements with our named executive officers. Our
existing severance arrangements with the named executive
officers are described under the heading Potential
Payments Upon Termination or Change in Control.
What
are the Committees Views on Executive Stock
Ownership?
The Committee has adopted stock ownership guidelines for the
companys senior officers because it believes that
management stock ownership causes alignment with stockholder
interests. The number of shares of ConAgra Foods common stock
that our named executive officers are required to hold is set at
a multiple of their salary and increases with greater
responsibility within the company. The named executive officers
are expected to reach the set level within a reasonable period
of time after appointment. Shares personally acquired by the
executive through open market purchases or through our 401(k)
plan or employee stock
38
purchase plan, as well as RSUs, restricted shares and shares
acquired upon the deferral of earned bonuses are counted toward
the ownership requirement. Neither unexercised stock options nor
unearned performance shares are counted. The following table
reflects ownership as of July 31, 2009.
|
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Stock Ownership
|
|
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Actual
|
|
Named
|
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Guideline
|
|
|
Ownership
|
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Executive Officer
|
|
(% of salary)
|
|
|
(% of fiscal 2009 salary) (1)
|
|
|
Gary M. Rodkin
|
|
|
600
|
|
|
|
1,170
|
|
John F. Gehring
|
|
|
400
|
|
|
|
465
|
|
Andre J. Hawaux
|
|
|
400
|
|
|
|
379
|
|
Scott Messel
|
|
|
200
|
|
|
|
309
|
|
Peter M. Perez
|
|
|
300
|
|
|
|
463
|
|
Robert F. Sharpe, Jr.
|
|
|
400
|
|
|
|
412
|
|
|
|
|
1.
|
|
Based on the average daily price of
our common stock on the NYSE for the
12-months
ended July 31, 2009 ($17.8134) and executive salaries in
effect on July 31, 2009. Notwithstanding the overall
decrease in the stock market, the Committee is not considering a
reduction in the ownership guidelines.
|
What
are the Committees Practices Regarding the Timing of
Equity Grants?
We do not backdate options or grant stock options retroactively.
We do not coordinate grants of stock options with disclosures of
positive or negative information. All stock options are granted
with an exercise price equal to the closing price of our common
stock on the NYSE on the date of grant. The vast majority of our
stock option grants for a fiscal year are made in July, at a
regular Committee meeting. When management proposes a merit
award or sign-on grant for a non-executive officer, the
Committee considers approval of the grant at a regularly
scheduled Committee meeting. In the event management proposes a
sign-on grant for a senior officer and a grant-related decision
is necessary between regularly scheduled Committee meetings, the
Committee may hold a special meeting to consider the grant. If
approved, the grant date will be the first trading day of the
month on or following the officers date of hire.
What
are the Key Tax and Accounting Implications of the
Committees Compensation Decisions?
U.S. federal income tax law prohibits the company from
taking a tax deduction for certain compensation paid in excess
of $1 million to the companys chief executive officer
or any of the companys three other most highly compensated
executive officers, generally other than the chief financial
officer, who are employed as of the end of the year. This
limitation does not apply to qualified performance-based
compensation under the tax law. Generally, this is compensation
paid only if the individuals performance meets
pre-established, objective goals based on performance goals
approved by our stockholders. The Committees intent is to
structure our executive compensation programs so that payments
will generally be fully deductible. The request for stockholder
approval of the 2009 Stock Plan and EIP, for example, are a part
of this effort. However, the Committee may occasionally make
payments or grants of equity that are not fully deductible if,
in its judgment, those payments or grants are needed to achieve
overall compensation objectives.
39
Human
Resources Committee Report
The Human Resources Committee has reviewed and discussed the
companys Compensation Discussion & Analysis with
management. Based upon such review and discussions, the
Committee recommended to the Board of Directors that the
companys Compensation Discussion & Analysis be
included in this proxy statement and incorporated by reference
in the companys Annual Report on
Form 10-K
for the fiscal year ended May 31, 2009.
ConAgra Foods, Inc. Human Resources Committee
Steven F. Goldstone
Joie A. Gregor
Ruth Ann Marshall
Ken Stinson, Chairman
40
Summary
Compensation Table
The amounts set forth in the following Summary Compensation
Table and Grants of Plan Based Awards table for
Messrs. Rodkin, Hawaux and Sharpe are based in part on
written agreements in place between ConAgra Foods and each of
these individuals. The impact of these agreements on the various
elements of compensation reported in these tables is
incorporated into the Compensation Discussion &
Analysis. The termination and severance benefit provisions
of these agreements are described under the heading
Potential Payments Upon Termination or Change in
Control.
Summary
Compensation Table Fiscal 2009
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Change in
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Pension
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Value and
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Non-
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Non-Equity
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qualified
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Incentive
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Deferred
|
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|
All
|
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Plan
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Compen-
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Other
|
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Stock
|
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|
Option
|
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Compen-
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|
sation
|
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Compen-
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Salary
|
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Bonus
|
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|
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Awards
|
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Awards
|
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|
sation
|
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Earnings
|
|
|
|
sation
|
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|
|
Total
|
|
Name and Principal Position
|
|
|
Year
|
|
|
|
($)(2)
|
|
|
|
($)
|
|
|
|
($)(3)(4)
|
|
|
|
($)(3)(5)
|
|
|
|
($)(6)
|
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|
|
($)(7)
|
|
|
|
($)(8)
|
|
|
|
($)
|
|
|
Gary M. Rodkin
|
|
|
|
2009
|
|
|
|
|
1,019,231
|
|
|
|
|
|
|
|
|
|
1,622,222
|
|
|
|
|
3,774,612
|
|
|
|
|
1,100,000
|
|
|
|
|
1,127,311
|
|
|
|
|
187,596
|
|
|
|
|
8,830,972
|
|
CEO and President
|
|
|
|
2008
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
4,756,417
|
|
|
|
|
3,303,303
|
|
|
|
|
1,800,000
|
|
|
|
|
1,424,127
|
|
|
|
|
297,526
|
|
|
|
|
12,581,373
|
|
|
|
|
|
2007
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
5,572,974
|
|
|
|
|
2,825,033
|
|
|
|
|
3,600,000
|
|
|
|
|
1,099,253
|
|
|
|
|
343,247
|
|
|
|
|
14,440,507
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Gehring
|
|
|
|
2009
|
|
|
|
|
425,962
|
|
|
|
|
|
|
|
|
|
634,663
|
|
|
|
|
289,653
|
|
|
|
|
220,000
|
|
|
|
|
46,742
|
|
|
|
|
28,595
|
|
|
|
|
1,645,615
|
|
EVP and CFO
|
|
|
|
2008
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
|
|
1,233,070
|
|
|
|
|
342,894
|
|
|
|
|
345,600
|
|
|
|
|
33,903
|
|
|
|
|
35,682
|
|
|
|
|
2,391,149
|
|
|
|
|
|
2007
|
|
|
|
|
400,000
|
|
|
|
|
|
|
|
|
|
1,465,535
|
|
|
|
|
231,888
|
|
|
|
|
576,000
|
|
|
|
|
42,077
|
|
|
|
|
18,755
|
|
|
|
|
2,734,255
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andre J. Hawaux (1)
|
|
|
|
2009
|
|
|
|
|
562,500
|
|
|
|
|
|
|
|
|
|
864,493
|
|
|
|
|
632,112
|
|
|
|
|
390,000
|
|
|
|
|
49,303
|
|
|
|
|
42,984
|
|
|
|
|
2,541,391
|
|
President, Consumer
|
|
|
|
2008
|
|
|
|
|
483,173
|
|
|
|
|
|
|
|
|
|
2,041,238
|
|
|
|
|
546,278
|
|
|
|
|
525,000
|
|
|
|
|
62,705
|
|
|
|
|
147,489
|
|
|
|
|
3,805,883
|
|
Foods
|
|
|
|
2007
|
|
|
|
|
242,308
|
|
|
|
|
135,000
|
|
|
|
|
875,421
|
|
|
|
|
226,403
|
|
|
|
|
810,000
|
|
|
|
|
7,178
|
|
|
|
|
300,482
|
|
|
|
|
2,596,792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Messel,
|
|
|
|
2009
|
|
|
|
|
353,673
|
|
|
|
|
|
|
|
|
|
422,219
|
|
|
|
|
208,184
|
|
|
|
|
160,300
|
|
|
|
|
14,319
|
|
|
|
|
13,696
|
|
|
|
|
1,172,391
|
|
SVP, Treasurer, and
|
|
|
|
2008
|
|
|
|
|
344,058
|
|
|
|
|
|
|
|
|
|
731,822
|
|
|
|
|
229,751
|
|
|
|
|
196,700
|
|
|
|
|
3,404
|
|
|
|
|
7,836
|
|
|
|
|
1,513,571
|
|
Asst Corp Secretary
|
|
|
|
2007
|
|
|
|
|
330,000
|
|
|
|
|
117,200
|
|
|
|
|
890,562
|
|
|
|
|
146,496
|
|
|
|
|
396,000
|
|
|
|
|
21,327
|
|
|
|
|
7,888
|
|
|
|
|
1,909,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter M. Perez
|
|
|
|
2009
|
|
|
|
|
435,577
|
|
|
|
|
|
|
|
|
|
544,375
|
|
|
|
|
416,368
|
|
|
|
|
200,000
|
|
|
|
|
22,526
|
|
|
|
|
16,610
|
|
|
|
|
1,635,456
|
|
EVP, Human Resources
|
|
|
|
2008
|
|
|
|
|
410,000
|
|
|
|
|
|
|
|
|
|
1,357,884
|
|
|
|
|
459,502
|
|
|
|
|
295,200
|
|
|
|
|
14,462
|
|
|
|
|
20,877
|
|
|
|
|
2,557,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Sharpe, Jr. (1)
|
|
|
|
2009
|
|
|
|
|
687,981
|
|
|
|
|
|
|
|
|
|
519,110
|
|
|
|
|
1,234,278
|
|
|
|
|
450,000
|
|
|
|
|
513,920
|
|
|
|
|
65,426
|
|
|
|
|
3,470,715
|
|
EVP, External Affairs
|
|
|
|
2008
|
|
|
|
|
662,019
|
|
|
|
|
|
|
|
|
|
1,522,053
|
|
|
|
|
1,080,768
|
|
|
|
|
725,000
|
|
|
|
|
601,416
|
|
|
|
|
175,027
|
|
|
|
|
4,766,283
|
|
and President,
|
|
|
|
2007
|
|
|
|
|
600,000
|
|
|
|
|
150,000
|
|
|
|
|
1,783,352
|
|
|
|
|
895,206
|
|
|
|
|
1,200,000
|
|
|
|
|
399,717
|
|
|
|
|
112,797
|
|
|
|
|
5,141,072
|
|
Commercial Foods
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
Mr. Gehring was promoted to
Executive Vice President and Chief Financial Officer in January
2009. Mr. Hawaux joined the company in mid-fiscal 2007 and
served as Executive Vice President and Chief Financial Officer
until January 2009, when he assumed his current
responsibilities. Mr. Sharpe served as Executive Vice
President, Legal and External Affairs during fiscal years 2007
and 2008. During fiscal 2009, he became Executive Vice
President, External Affairs and President, Commercial Foods.
|
|
2.
|
|
For fiscal 2009, these amounts
reflect payment of salary amounts over a 53-week fiscal year
versus fiscal 2008 and 2007, which were each comprised of
52 weeks.
|
|
3.
|
|
For fiscal 2009, these amounts
reflect the dollar amount of compensation expense recognized for
financial statement reporting purposes, computed in accordance
with SFAS 123R. The assumptions used in determining these
valuations are the same as those used in our financial
statements. For fiscal 2009, those assumptions can be found in
footnote 14 to the financial statements included in our Annual
Report on
Form 10-K
for the fiscal year ended May 31, 2009. For information on
the valuation assumptions for grants made prior to fiscal 2009,
refer to the note on Share-Based Payments in our financial
statements contained in our Annual Report on
Form 10-K
for each respective fiscal year-end.
|
|
4.
|
|
For each executive except
Mr. Gehring, the majority of the fiscal 2009 expense
relates to performance shares granted under our long-term
incentive program for the fiscal 2007 to 2009, fiscal 2008 to
2010 and fiscal 2009 to 2011 performance periods. For
Mr. Gehring, the majority of the fiscal 2009 expense
relates to restricted stock units. The value of actual payouts
to the named executive officers (which are made in shares of
stock) may be more or less than the amount shown depending on
our ability to achieve the underlying performance targets over
the full three-year periods.
|
41
|
|
|
|
|
If we fail to achieve the
performance goals associated with the performance shares,
portions of this expense would be reversed in accordance with
SFAS 123R. Also included in this column is current year
expense for prior years stock-based awards. For
longer-tenured executives Messrs. Gehring and Messel,
amounts include expense for grants made in fiscal years 2003 and
2004. In connection with our disposition of the Trading and
Merchandising reporting segment shortly after the fiscal
2008 year-end, the Committee approved an adjustment for use
in connection with the calculation of fiscal 2008 EBIT and ROAIC
in the fiscal 2007 to 2009 and fiscal 2008 to 2010 performance
share plans. The adjustment was treated as a material
modification to these awards. The impact was an increase of
approximately $423,864 in total compensation expense recorded
for accounting purposes for the named executive officers, in the
aggregate, for the total life of these performance share awards.
|
|
5.
|
|
Similar to the Stock
Awards column, for fiscal 2009, this column includes
compensation expense related to fiscal 2009 and prior
years stock option grants, including one-time grants that
were part of new hire agreements. The summary compensation table
reflects the corrections of immaterial computational errors made
in calculating fiscal years 2008 and 2007 compensation expense
for certain option awards.
|
|
6.
|
|
For fiscal 2009, amounts reflect
awards earned under the fiscal 2009 MIP discussed in our
Compensation Discussion & Analysis.
|
|
7.
|
|
The measurement date for fiscal
2009 was May 31, 2009. We do not offer above-market (as
defined by SEC rules) or preferential earnings rates in our
deferred compensation plans. For fiscal 2009, the entire amount
reflects the change in pension amounts rather than non-qualified
deferred compensation earnings.
|
|
8.
|
|
The components of fiscal 2009
All Other Compensation are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perquisites and Personal Benefits (a)
|
|
|
(Column 5)
|
|
|
|
|
|
|
|
|
|
(Column 1)
|
|
|
|
|
|
(Column 3)
|
|
|
(Column 4)
|
|
|
Company
|
|
|
|
|
|
|
|
|
|
Relocation
|
|
|
|
|
|
Personal
|
|
|
Exec Physical/
|
|
|
Contribution to
|
|
|
(Column 6)
|
|
|
(Column 7)
|
|
|
|
Related
|
|
|
(Column 2)
|
|
|
Use of
|
|
|
Security
|
|
|
Defined
|
|
|
Tax
|
|
|
Group
|
|
|
|
Ground
|
|
|
Relocation
|
|
|
Company
|
|
|
Costs/
|
|
|
Contribution
|
|
|
Reimburse-
|
|
|
Term Life
|
|
|
|
Transportation
|
|
|
Expenses
|
|
|
Aircraft
|
|
|
Home Office
|
|
|
Plans
|
|
|
ments
|
|
|
Insurance
|
|
Named Executive Officer
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
Gary M. Rodkin
|
|
|
(b)
|
|
|
|
(b)
|
|
|
|
48,806
|
|
|
|
(b)
|
|
|
|
109,836
|
|
|
|
|
|
|
|
|
(b)
|
John F. Gehring
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
|
|
22,157
|
|
|
|
|
|
|
|
|
(b)
|
Andre J. Hawaux
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,831
|
|
|
|
(b)
|
|
|
|
|
(b)
|
Scott Messel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
|
|
(b)
|
|
|
|
|
|
|
|
|
(b)
|
Peter M. Perez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
|
|
(b)
|
|
|
|
|
|
|
|
|
(b)
|
Robert F. Sharpe, Jr.
|
|
|
|
|
|
|
|
|
|
|
(b)
|
|
|
|
|
|
|
|
40,632
|
|
|
|
|
|
|
|
|
(b)
|
|
|
|
(a)
|
|
All amounts shown are valued at the
incremental cost to the company of providing the benefit. With
respect to personal use of company aircraft (Column (3)),
Messrs. Rodkin and Sharpe are each party to an aircraft
time sharing agreement with the company under which they
reimburse the company, in cash, for the cost of fuel and
incidentals such as landing and parking fees, hangar expenses
incurred when the aircraft is away from its home base and
catering costs of personal flights. We do not charge
Messrs. Rodkin and Sharpe for the fixed costs that would be
incurred in any event to operate company aircraft (for example,
aircraft purchase costs, insurance and flight crew salaries).
The amounts shown for Messrs. Rodkin and Sharpe in Column
(3) reflect the companys incremental cost of
conducting the personal flights, reduced by the amounts actually
paid to the company.
|
|
(b)
|
|
For Columns (1) through (4),
inclusive, a (b) notation in lieu of a dollar amount
indicates that the named executive officer received the benefit
but at an incremental cost to the company of less than $25,000.
For Columns (5) through (7), inclusive, a (b) notation
in lieu of a dollar amount indicates that the named executive
officer received the benefit but at an incremental cost to the
company of less than $10,000.
|
42
Grants of
Plan Based Awards Fiscal 2009
The following table sets forth information about grants of
plan-based awards (equity and non-equity) during the fiscal 2009
to the named executive officers. All equity-based grants were
made under the stockholder-approved ConAgra Foods 2006 Stock
Plan.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All
|
|
|
|
Awards:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
Number
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Possible Payouts
|
|
|
|
Estimated Future
|
|
|
|
Stock
|
|
|
|
of Securi-
|
|
|
|
Exercise
|
|
|
|
|
|
|
|
|
|
|
|
|
Under Non-Equity
|
|
|
|
Payouts Under Equity
|
|
|
|
Awards:
|
|
|
|
ties
|
|
|
|
or Base
|
|
|
|
|
|
|
|
|
|
|
|
|
Incentive Plan Awards (1)
|
|
|
|
Incentive Plan Awards (2)
|
|
|
|
Number
|
|
|
|
Under-
|
|
|
|
Price of
|
|
|
|
Grant Date Fair
|
|
|
|
|
|
|
|
|
Thres-
|
|
|
|
|
|
|
|
|
|
|
|
Thres-
|
|
|
|
|
|
|
|
|
|
|
|
of Shares
|
|
|
|
lying
|
|
|
|
Option
|
|
|
|
Value of Stock
|
|
|
|
|
Grant
|
|
|
|
hold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
hold
|
|
|
|
Target
|
|
|
|
Maximum
|
|
|
|
of Stock
|
|
|
|
Options
|
|
|
|
Awards
|
|
|
|
and Option
|
|
Name
|
|
|
Date
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
($)
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
(#)
|
|
|
|
or Units (#)
|
|
|
|
(#)(3)
|
|
|
|
($/Sh)
|
|
|
|
Awards(4)
|
|
|
Gary M. Rodkin
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
2,000,000
|
|
|
|
|
4,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
300,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
6,378,000
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
21.26
|
|
|
|
$
|
1,425,850
|
|
John F. Gehring
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
227,292
|
|
|
|
|
595,200
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,000
|
|
|
|
|
48,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,020,480
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
21.26
|
|
|
|
$
|
228,136
|
|
|
|
|
|
1/16/09
|
|
|
|
|
|
|
|
|
|
139,308
|
|
|
|
|
364,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
1/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,000
|
|
|
|
|
39,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
662,610
|
|
|
|
|
|
1/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
16.99
|
|
|
|
$
|
81,616
|
|
Andre J. Hawaux (1)
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
|
96,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,040,960
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
|
21.26
|
|
|
|
$
|
456,272
|
|
|
|
|
|
1/16/09
|
|
|
|
|
|
|
|
|
|
600,000
|
|
|
|
|
1,800,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
1/16/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
16.99
|
|
|
|
$
|
204,040
|
|
Scott Messel
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
242,900
|
|
|
|
|
728,700
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
|
36,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
765,360
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
21.26
|
|
|
|
$
|
171,102
|
|
Peter M. Perez
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
344,000
|
|
|
|
|
1,032,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
|
72,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,530,720
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
21.26
|
|
|
|
$
|
342,204
|
|
Robert F. Sharpe, Jr.
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
675,000
|
|
|
|
|
2,025,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
|
96,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
2,040,960
|
|
|
|
|
|
7/16/08
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
21.26
|
|
|
|
$
|
513,306
|
|
|
|
|
1.
|
|
Amounts reflect grants made under
the fiscal 2009 annual incentive plan (the MIP discussed in our
Compensation Discussion & Analysis).
Actual payouts earned under the program for fiscal 2009 were
below Target, and can be found in the
Non-Equity Incentive Plan Compensation column of the
Summary Compensation Table. There was no threshold payout in
this plan. In connection with Mr. Gehrings promotion
to Chief Financial Officer in January 2009, the Committee
increased his salary and MIP opportunity. Accordingly, we show
two grant dates for Mr. Gehring in this column. The first,
July 16, 2008, reflects approximately eight months of MIP
opportunity at his salary and MIP target pre-promotion and the
second, January 16, 2009, reflects approximately four
months of MIP opportunity at his salary and MIP target
post-promotion. In connection with Mr. Hawauxs
promotion in January of 2009, the Committee increased
Mr. Hawauxs salary and, solely for MIP purposes,
deemed his new salary to be in effect as of the first day of
fiscal 2009.
|
|
2.
|
|
Amounts reflect the performance
shares granted under our long-term incentive program for the
fiscal 2009 to 2011 performance period. Mr. Gehring
received an additional 13,000 performance shares under the
fiscal 2009 to 2011 program in connection with his January 2009
promotion to his current role. All awards under the fiscal 2009
to 2011 program, including any above-target payouts, will be
earned based on our cumulative performance for the three fiscal
years ending in May 2011. The amount of compensation expense
recognized by the company in fiscal 2009 for these awards
(computed in accordance with SFAS 123R) is a portion of the
amount reported in the Stock Awards column of the
Summary Compensation Table. There is no threshold payout in this
plan.
|
|
3.
|
|
Reflects the option awards granted
pursuant to the long-term incentive program in July 2009,
including the additional grants made to Messrs. Gehring and
Hawaux in connection with their January 2009 promotions to their
current roles. The amount of compensation expense recognized by
the company in fiscal 2009 for these awards (computed in
|
43
|
|
|
|
|
accordance with SFAS 123R) is
a portion of the amount reported in the Options
Awards column of the Summary Compensation Table.
|
|
4.
|
|
Amounts are computed in accordance
with SFAS 123R assuming a payout at Maximum for
equity incentive plan awards.
|
Option
Exercises and Stock Vested Fiscal 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquired
|
|
|
Value Realized
|
|
|
Number of Shares
|
|
|
Value Realized
|
|
|
|
on Exercise
|
|
|
on Exercise
|
|
|
Acquired on Vesting
|
|
|
on Vesting
|
|
Name
|
|
(#)
|
|
|
($)
|
|
|
(#) (1)(2)
|
|
|
($)
|
|
|
Gary M. Rodkin
|
|
|
|
|
|
|
|
|
|
|
280,000
|
|
|
|
5,205,200
|
|
John F. Gehring
|
|
|
|
|
|
|
|
|
|
|
82,566
|
|
|
|
1,516,902
|
|
Andre J. Hawaux
|
|
|
|
|
|
|
|
|
|
|
88,000
|
|
|
|
1,635,920
|
|
Scott Messel
|
|
|
|
|
|
|
|
|
|
|
42,483
|
|
|
|
789,759
|
|
Peter M. Perez
|
|
|
|
|
|
|
|
|
|
|
81,083
|
|
|
|
1,496,883
|
|
Robert F. Sharpe, Jr.
|
|
|
|
|
|
|
|
|
|
|
89,600
|
|
|
|
1,665,664
|
|
|
|
|
1.
|
|
The performance period for the
fiscal 2007 to 2009 performance share program ended on
May 31, 2009. This column includes shares earned under that
program for cumulative three-year performance, reduced by the
number of shares previously earned and distributed under the
program. (In prior years, a portion of the original performance
shares were earned by and distributed to the named executive
officers. See the Interim Opportunity
discussion in our Compensation Discussion &
Analysis.) The performance goals under the fiscal 2007 to
2009 program for the cumulative three-year period were achieved
at a level above target and payments were made to all named
executive officers. Under the plans terms, dividend
equivalents on earned shares, paid in additional shares of
common stock, were also distributed to the named executive
officers. The shares distributed to the named executive officers
as a result of this dividend equivalent feature (and not shown
in this table) were: 31,110 shares for Mr. Rodkin;
4,977 shares for Mr. Gehring; 9,045 shares for
Mr. Hawaux; 3,733 shares for Mr. Messel;
7,466 shares for Mr. Perez; and 9,955 shares for
Mr. Sharpe.
|
|
2.
|
|
For Messrs. Gehring, Messel,
and Perez, also includes shares acquired upon the vesting of
stock awards granted in 2004 under a prior long-term incentive
plan. For Mr. Gehring, also includes shares acquired upon
vesting of a restricted stock unit grant he received in 2004.
For Mr. Perez, also includes shares acquired upon vesting
of a restricted stock grant he received in 2004 as a new hire
grant.
|
44
Outstanding
Equity Awards at Fiscal Year-End Fiscal
2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
|
Equity Incentive
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards:
|
|
|
|
Plan Awards:
|
|
|
|
|
Number of
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
Market Value
|
|
|
|
Number of
|
|
|
|
Market or Payout
|
|
|
|
|
Securities
|
|
|
|
Securities
|
|
|
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
|
of Shares or
|
|
|
|
Unearned Shares,
|
|
|
|
Value of Unearned
|
|
|
|
|
Underlying
|
|
|
|
Underlying
|
|
|
|
Option
|
|
|
|
|
|
|
|
Units of Stock
|
|
|
|
Units of Stock
|
|
|
|
Units, or Other
|
|
|
|
Shares, Units, or
|
|
|
|
|
Unexercised
|
|
|
|
Unexercised
|
|
|
|
Exercise
|
|
|
|
Option
|
|
|
|
That Have
|
|
|
|
That Have Not
|
|
|
|
Rights that Have
|
|
|
|
Other Rights that
|
|
|
|
|
Options (#)
|
|
|
|
Options (#)
|
|
|
|
Price
|
|
|
|
Expiration
|
|
|
|
Not Vested
|
|
|
|
Vested
|
|
|
|
Not Vested
|
|
|
|
Have Not Vested
|
|
Name
|
|
|
Exercisable
|
|
|
|
Unexercisable (1)
|
|
|
|
($)
|
|
|
|
Date
|
|
|
|
(#)(2)
|
|
|
|
($)(3)
|
|
|
|
(#)(4)
|
|
|
|
($)(3)
|
|
|
|
Gary M. Rodkin
|
|
|
|
1,000,000
|
|
|
|
|
0
|
|
|
|
|
22.83
|
|
|
|
|
8/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
480,000
|
|
|
|
|
0
|
|
|
|
|
22.72
|
|
|
|
|
5/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
7/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350,000
|
|
|
|
|
150,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
500,000
|
|
|
|
|
21.26
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
5,577,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300,000
|
|
|
|
|
5,577,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Gehring
|
|
|
|
20,000
|
|
|
|
|
0
|
|
|
|
|
24.19
|
|
|
|
|
2/13/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,883
|
|
|
|
|
0
|
|
|
|
|
25.36
|
|
|
|
|
7/11/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
0
|
|
|
|
|
23.14
|
|
|
|
|
7/24/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
7/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
56,000
|
|
|
|
|
24,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
80,000
|
|
|
|
|
21.26
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
40,000
|
|
|
|
|
16.99
|
|
|
|
|
1/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,000
|
|
|
|
|
371,800
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,000
|
|
|
|
|
892,320
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
87,000
|
|
|
|
|
1,617,330
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andre J. Hawaux
|
|
|
|
80,000
|
|
|
|
|
0
|
|
|
|
|
25.76
|
|
|
|
|
11/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70,000
|
|
|
|
|
30,000
|
|
|
|
|
25.76
|
|
|
|
|
11/30/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
112,000
|
|
|
|
|
48,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
160,000
|
|
|
|
|
21.26
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
100,000
|
|
|
|
|
16.99
|
|
|
|
|
1/15/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,000
|
|
|
|
|
185,900
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
|
|
|
|
1,784,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
|
|
|
|
1,784,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Messel
|
|
|
|
10,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
9/26/2011
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,000
|
|
|
|
|
0
|
|
|
|
|
25.90
|
|
|
|
|
9/25/2012
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
0
|
|
|
|
|
23.14
|
|
|
|
|
7/24/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
7/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
42,000
|
|
|
|
|
18,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
60,000
|
|
|
|
|
21.26
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
|
669,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
|
669,240
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Peter M. Perez
|
|
|
|
70,000
|
|
|
|
|
0
|
|
|
|
|
26.17
|
|
|
|
|
2/11/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
0
|
|
|
|
|
23.14
|
|
|
|
|
7/24/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
7/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
84,000
|
|
|
|
|
36,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
120,000
|
|
|
|
|
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
|
|
1,338,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
72,000
|
|
|
|
|
1,338,480
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Sharpe, Jr.
|
|
|
|
300,000
|
|
|
|
|
0
|
|
|
|
|
21.51
|
|
|
|
|
11/30/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
|
0
|
|
|
|
|
22.72
|
|
|
|
|
5/25/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
|
0
|
|
|
|
|
22.00
|
|
|
|
|
7/12/2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
126,000
|
|
|
|
|
54,000
|
|
|
|
|
26.80
|
|
|
|
|
7/16/2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
0
|
|
|
|
|
180,000
|
|
|
|
|
21.26
|
|
|
|
|
7/15/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
|
|
|
|
1,784,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
96,000
|
|
|
|
|
1,784,640
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
|
|
1.
|
|
All options were granted with an
exercise price equal to the closing market price of our common
stock on the date of grant. The vesting schedule for options
that were outstanding but unexercisable at fiscal year-end is as
follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unexercis-
|
|
|
|
Vesting Schedule
|
|
|
|
able at FYE
|
|
|
|
# of Shares
|
|
|
|
Vesting Date
|
Rodkin
|
|
|
|
150,000
|
|
|
|
|
150,000
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500,000
|
|
|
|
|
200,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
150,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gehring
|
|
|
|
24,000
|
|
|
|
|
All
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
80,000
|
|
|
|
|
32,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
24,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,000
|
|
|
|
|
16,000
|
|
|
|
01/16/10
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
01/16/11
|
|
|
|
|
|
|
|
|
|
12,000
|
|
|
|
01/16/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hawaux
|
|
|
|
30,000
|
|
|
|
|
All
|
|
|
|
12/01/09
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,000
|
|
|
|
|
All
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
|
64,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
48,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
48,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
|
All
|
|
|
|
01/16/12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Messel
|
|
|
|
18,000
|
|
|
|
|
All
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000
|
|
|
|
|
24,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
18,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
18,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Perez
|
|
|
|
36,000
|
|
|
|
|
All
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
120,000
|
|
|
|
|
48,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
36,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sharpe
|
|
|
|
54,000
|
|
|
|
|
All
|
|
|
|
05/30/10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
72,000
|
|
|
|
07/16/09
|
|
|
|
|
|
|
|
|
|
54,000
|
|
|
|
07/16/10
|
|
|
|
|
|
|
|
|
|
54,000
|
|
|
|
07/16/11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2.
|
|
Mr. Gehrings stock
awards outstanding but unvested at fiscal year-end vest entirely
on December 2, 2009. Mr. Hawauxs stock awards
outstanding but unvested at fiscal year-end vest entirely on
December 1, 2009.
|
|
3.
|
|
The market value of unvested stock
and unearned shares is calculated using $18.59 per share, which
is the closing market price of our common stock on the NYSE on
the last trading day of fiscal 2009.
|
|
4.
|
|
Reflects, on separate lines, as of
May 31, 2009, the maximum number of shares that could be
earned under each of the fiscal 2008 to 2010 performance share
plan and fiscal 2009 to 2011 performance share plan. The
performance shares are not earned unless we achieve the
performance targets specified in the plan. Shares earned under
the fiscal 2007 to 2009 performance share plan were paid in July
2009 and are reflected in the Option Exercises and Stock
Vested Fiscal 2009 table. Shares earned under
the fiscal 2008 to 2010 cycle will be distributed, if earned,
following fiscal 2010 and shares earned under the fiscal 2009 to
2011 cycle will be distributed, if earned, following fiscal 2011.
|
Pension
Benefits Fiscal 2009
ConAgra Foods maintains a non-contributory defined benefit
pension plan for all eligible employees, which we refer to as
the Qualified Pension. Employees eligible to participate in the
Qualified Pension are salaried employees, including the named
executive officers, and certain hourly and union employees.
Employees hired before June 1, 2004 were given a one-time
opportunity during 2004 to choose between (A) the benefit
formulas in the Qualified Pension and qualified 401(k) plan at
that time and (B) effective October 1, 2004, a new
Qualified Pension formula plus an enhanced company match in our
qualified 401(k) plan. Employees hired on or after June 1,
2004 were automatically enrolled in option (B) effective
upon their date of hire. With respect to the named executive
officers, Mr. Hawaux joined the company after June 1,
2004 and was automatically enrolled in option (B).
Messrs. Gehring, Messel, and Perez were employed prior to
June 1, 2004 and each elected option (A). Although
Mr. Rodkin and Mr. Sharpe are enrolled in option
(B) for purposes of the Qualified Plan (due to commencement
of employment after June 1, 2004), their employment
agreements entitle them to a total pension benefit equal to the
option (A) calculation.
46
Any difference between the option (A) and (B) pension
benefits would be provided to them through the Non-Qualified
Pension (described below).
Under both option (A) and option (B), the pension benefit
formula is determined by adding three components:
|
|
|
|
|
A multiple of Average Monthly Earnings (up to the integration
level) multiplied by years of credited service (up to
35 years of credited service). This multiple is 1.0% for
option (A) and 0.9% for option (B).
|
|
|
|
A multiple of Average Monthly Earnings (over the integration
level) multiplied by years of credited service (up to
35 years of credited service). This multiple is 1.44% for
option (A) and 1.3% for option (B).
|
|
|
|
A multiple of Average Monthly Earnings multiplied by years of
credited service over 35 years. This multiple is 1% for
option (A) and 0.9% for option (B).
|
Average Monthly Earnings is the monthly average of
the executives annual compensation from the company for
the highest five consecutive years of the final ten years of his
or her service. Only salary and annual incentive payments
(reported in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table) are
considered for the named executive officers in computing Average
Monthly Earnings. The integration level is calculated by the
Internal Revenue Service by averaging the last 35 years of
Social Security taxable wages, up to and including the year in
which the executives employment ends.
Participants are vested in a benefit once they have five years
of vesting service with the company. Benefits become payable for
option (A) participants at the normal retirement age of 65,
or age 60 if the participant has 25 or more years of
service. Normal retirement age for option (B) participants
is 65. Under either option, the Qualified Plan defines early
retirement as age 55 with 10 years of service. There
is no difference in the benefit formula upon an early retirement
and there is no payment election option that would impact the
amount of annual benefits any of the named executive officer
would receive.
The named executive officers also participate in a supplemental
retirement plan (which we refer to in the table below as the
Non-Qualified Pension). To the extent that a named executive
officers benefit under the Qualified Pension exceeds the
limit on the maximum annual benefit payable under the Employee
Retirement Income Security Act of 1974 or such officers
Average Monthly Earnings exceeds the limit under the Code on the
maximum amount of compensation that can be taken into account
under the Qualified Pension, payments are made under the
Non-Qualified Pension. The retirement age and benefit formulas
are the same as those used for the Qualified Plan except as
described in the following paragraphs.
Generally, an executives benefit under the Non-Qualified
Pension is payable in installments beginning in January
following the executives separation from service or
disability, but the executive may also elect to receive payment
as a lump sum and elect a specified year in which payment will
be made or commence, or elect to receive his or her benefit in
the form of annuity payments. Elections regarding the time and
form of payment are intended to comply with Section 409A of
the Code, which we refer to as Section 409A of the Code, and
certain payments to executives meeting the definition of a
specified employee under Section 409A of the
Code, will be delayed for six months after the date of the
separation from service.
Mr. Rodkins employment agreement with the company
entitles him to participate in the Non-Qualified Pension with
years of service for purpose of calculating benefits under the
plan at a
three-for-one
rate until he has service credit of thirty years. He is entitled
to annual pensionable earnings for use in calculating his
benefit of no less than $3 million. However, if
Mr. Rodkin terminates his employment voluntarily or retires
prior to age 60, a crediting rate of
two-for-one
is applied. Further, if Mr. Rodkin voluntarily terminates
employment with the company or retires prior to August 31,
2010, and the termination or retirement is not approved by the
Board of Directors, or he is terminated at any time for
cause, he will forgo all benefits under the
Non-Qualified Pension. Any benefits payable to Mr. Rodkin
under the Non-Qualified Pension are subject to offset for
benefits paid or payable to him under supplemental pension plans
his prior employer may have maintained for his benefit. Mr.
Rodkins employment agreement was recently amended and
restated for compliance with Section 409A of the Code.
Mr. Sharpes employment agreement with the company
entitles him to participate in the Non-Qualified Pension with
years of service for purpose of calculating benefits under the
plan at a
three-for-one
rate until he
47
has service credit of thirty years. However, if Mr. Sharpe
terminates his employment voluntarily or retires prior to
age 60, a crediting rate of
two-for-one
is applied. Further, if Mr. Sharpe voluntarily terminates
employment with the company or retires prior to November 7,
2010, and the termination or retirement is not approved by the
Board of Directors, or he is terminated at any time for
cause, he will forgo all benefits under the
Non-Qualified Pension. Mr. Sharpes employment agreement
was recently amended and restated for compliance with Section
409A of the Code.
The Committee has offered eligibility to participate in, and
extra years of credited service under the Non-Qualified Pension,
sparingly when deemed appropriate as a hiring incentive. The
Committee prefers not to use this incentive. Mr. Hawaux is
the most recent hire among the named executive officers.
Although he was provided participation in the Non-Qualified
Pension, he was not offered extra years of credited service.
Pension
Benefits Fiscal 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Years
|
|
|
|
Present Value of
|
|
|
|
|
|
|
|
Credited Service
|
|
|
|
Accumulated Benefit
|
|
Name
|
|
|
Plan Name (1)
|
|
|
(# ) (2)
|
|
|
|
($) (3) (4)
|
|
|
|
|
Gary M. Rodkin
|
|
|
Qualified Pension
|
|
|
|
3.8
|
|
|
|
|
60,156
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
11.3
|
|
|
|
|
4,463,852
|
|
John F. Gehring
|
|
|
Qualified Pension
|
|
|
|
7.4
|
|
|
|
|
69,930
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
7.4
|
|
|
|
|
180,114
|
|
Andre J. Hawaux
|
|
|
Qualified Pension
|
|
|
|
2.6
|
|
|
|
|
23,347
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
2.6
|
|
|
|
|
111,745
|
|
Scott Messel
|
|
|
Qualified Pension
|
|
|
|
7.8
|
|
|
|
|
85,272
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
7.8
|
|
|
|
|
26,342
|
|
Peter M. Perez
|
|
|
Qualified Pension
|
|
|
|
5.5
|
|
|
|
|
86,288
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
5.5
|
|
|
|
|
26,657
|
|
Robert F. Sharpe, Jr.
|
|
|
Qualified Pension
|
|
|
|
3.6
|
|
|
|
|
57,751
|
|
|
|
|
Non-Qualified Pension
|
|
|
|
10.7
|
|
|
|
|
1,657,377
|
|
|
|
|
1.
|
|
Qualified Pension refers to the
ConAgra Foods, Inc. Pension Plan for Salaried Employees and
Non-Qualified Pension refers to the ConAgra Foods, Inc.
Nonqualified Pension Plan. There were no plan payments for
fiscal 2009.
|
|
2.
|
|
The number of years of credited
service is as of May 31, 2009, the pension plan measurement
date used for financial statement reporting purposes.
|
|
3.
|
|
As of the pension plan measurement
date, under the Non-Qualified Pension, Mr. Rodkin had
3.8 years of actual service and Mr. Sharpe had
3.6 years of actual service. Each of these executives is a
party to an agreement with the company in which his years of
service for purposes of the Non-Qualified Pension is credited at
a rate of three years for each one year of actual service. The
resulting augmentation in benefits at May 31, 2009 due to
these provisions is, for Mr. Rodkin and Mr. Sharpe,
respectively, $3,400,712 (7.5 additional years) and $1,276,475
(7.1 additional years).
|
|
4.
|
|
The valuation methodology and all
material assumptions applied in quantifying the present value of
the accumulated benefit are set forth in footnote 19 to the
financial statements included in our Annual Report on
Form 10-K
for the fiscal year ended May 31, 2009.
|
Non-Qualified
Deferred Compensation Fiscal 2009
The following table shows the non-qualified deferred
compensation activity for each named executive officer during
fiscal 2009. The amounts shown include company contributions
into our non-qualified 401(k) plan, which we refer to as the
Non-Qualified CRISP, and for Mr. Rodkin, Mr. Hawaux
and Mr. Messel, employee contributions into our voluntary
deferred compensation plan, which we refer to as the Voluntary
Deferred Comp plan.
The Non-Qualified CRISP is a benefit provided to certain of the
named executive officers and other eligible executives. The
program supplements our qualified 401(k) plan available to a
broad base of salaried and hourly employees. Under our qualified
401(k) plan, for employees enrolled in option (A) under the
Qualified Plan, the company will match the first 50% of the
first 6% of pay the employee contributes to the
48
qualified 401(k) plan. For employees enrolled in option
(B) under the Qualified Plan, the company will match
662/3%
of the first 6% of pay the employee contributes to the plan.
However, the Code limits the annual before-tax contributions
that an individual can make to a qualified retirement plan. If a
named executive officer reached this maximum, he or she would
lose the ability to receive the full extent of the available
company match. The Non-Qualified CRISP is used to enable the
company to provide this population with the company match. Under
the plan, the company makes a contribution equal to 3% of the
named executive officers eligible earnings less the
maximum employer contribution the named executive officer could
have received from the qualified 401(k) plan.
The company contribution to the Non-Qualified CRISP is made
annually on or about December 31st. The value of each account is
automatically linked to the value of our common stock. Account
values are updated daily based on the closing market price of
our common stock on the NYSE on such day.
Generally, an executives account balance under the
Non-Qualified CRISP is payable in cash in a lump sum in January
following the executives separation from service, but
executives meeting certain qualifications may also elect to
receive payment in the form of installments. Executives may also
elect to receive payment within 90 days following the
earlier of separation from service or either the occurrence of a
change in control or 18 months following the occurrence of
a change in control. Elections regarding the time and form of
payment are intended to comply with Section 409A of the Code,
and certain payments to executives meeting the definition of
specified employee under Section 409A of the Code
will be delayed for six months after the date of the separation
from service.
The Voluntary Deferred Comp plan allows employees (including the
named executive officers) whose salary is $125,000 or more per
year to defer receipt of 5% to 50% of their salary and,
effective January 1, 2009, up to 85% of their annual
incentive payment. The investment alternatives for deferred
amounts are an interest bearing account (with interest accruing
at a rate equal to 25 basis points over the one-year H15
Treasury constant maturity rate), a ConAgra Foods stock account,
or other investment options mirrored from the ConAgra Foods
Retirement Income Savings Plan (the Qualified
CRISP). Amounts deferred into the interest bearing
account, together with earnings thereon, are ultimately
distributed in cash. The stock account includes a dividend
reinvestment feature that converts dividends into additional
shares. Amounts deferred into the stock account, together with
earnings and dividends thereon, are ultimately distributed in
shares of ConAgra Foods common stock. Amounts deferred into
accounts mirroring the Qualified CRISP funds, together with any
dividends, are ultimately distributed in cash. An election to
participate in the plan must be timely filed with the company in
accordance with Internal Revenue Service requirements.
An executive who is not retiring or eligible for early
retirement under the Qualified Pension is required to take
distribution of certain amounts earned and vested prior to 2005,
which we refer to as grandfathered amounts, in a lump sum
payment in the year of termination, while an executive who is
eligible to retire early under the Qualified Pension will
receive his or her grandfathered amounts in annual installments.
In general, all amounts other than the grandfathered amounts,
which we refer to as other amounts, will be distributed in cash
in a lump sum in January following the executives
separation from service. Executives may also elect to receive
the other amounts at certain other times, including within
90 days following the earlier of separation from service or
either the occurrence of a change in control or 18 months
following the occurrence of a change in control. Elections
regarding the time and form of payment are intended to comply
with Section 409A of the Code, and certain payments to
executives meeting the definition of a specified
employee under Section 409A of the Code will be
delayed for six months after the date of the separation from
service. Additionally, executives may make hardship withdrawals
under certain circumstances.
Mr. Perez did not participate in the Voluntary Deferred
Comp Plan during fiscals 2009, 2008 or 2007 and neither
Mr. Messel nor Mr. Perez participated in the
Non-Qualified CRISP during fiscals 2009, 2008 or 2007.
49
Non-Qualified
Deferred Compensation Fiscal 2009
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate
|
|
|
|
Aggregate
|
|
|
|
|
|
|
|
Executive
|
|
|
|
Registrant
|
|
|
|
Earnings
|
|
|
|
Balance
|
|
|
|
|
|
|
|
Contributions in
|
|
|
|
Contributions
|
|
|
|
in Last
|
|
|
|
at Last
|
|
|
|
|
|
|
|
Last FY
|
|
|
|
in Last FY
|
|
|
|
FY
|
|
|
|
FYE
|
|
Name
|
|
|
Plan (1)
|
|
|
($) (2)
|
|
|
|
($) (3)
|
|
|
|
($)(4)
|
|
|
|
($)(5)
|
|
|
|
|
Gary M. Rodkin
|
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
|
|
100,324
|
|
|
|
|
(21,889
|
)
|
|
|
|
260,658
|
|
|
|
|
Voluntary Deferred Comp
|
|
|
|
900,000
|
|
|
|
|
|
|
|
|
|
(570,142
|
)
|
|
|
|
3,119,583
|
|
John F. Gehring
|
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
|
|
15,244
|
|
|
|
|
(7,568
|
)
|
|
|
|
56,069
|
|
Andre J. Hawaux
|
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
|
|
21,977
|
|
|
|
|
(2,676
|
)
|
|
|
|
48,876
|
|
|
|
|
Voluntary Deferred Comp
|
|
|
|
22,500
|
|
|
|
|
|
|
|
|
|
(129,021
|
)
|
|
|
|
464,877
|
|
Scott Messel
|
|
|
Voluntary Deferred Comp
|
|
|
|
31,291
|
|
|
|
|
|
|
|
|
|
(2,513
|
)
|
|
|
|
126,445
|
|
Peter M. Perez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Sharpe, Jr.
|
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
|
|
32,324
|
|
|
|
|
(9,804
|
)
|
|
|
|
94,662
|
|
|
|
|
1.
|
|
Non-Qualified CRISP refers to the
ConAgra Foods, Inc. Nonqualified CRISP Plan and Voluntary
Deferred Comp refers to the ConAgra Foods, Inc. Voluntary
Deferred Comp Plan.
|
|
2.
|
|
Messrs. Rodkin, Hawaux, and
Messel each chose to defer receipt of a portion of the annual
cash incentive he earned for fiscal 2008 and Mr. Messel
chose to defer a portion ($21,621) of his base salary through
the Voluntary Deferred Comp Plan. Mr. Rodkin and
Mr. Hawaux invested the entire deferred amount in the stock
account. Mr. Messel invested a portion of the deferred
amount in non-stock account investment options. Stock account
balances are ultimately distributed in shares of our common
stock. Amounts deferred from base salary and annual incentive
payments are presented in the Summary Compensation Table under
the columns Salary and Non-Equity Incentive
Plan Compensation, respectively.
|
|
3.
|
|
All Non-Qualified CRISP amounts are
included in the All Other Compensation column of the
Summary Compensation Table. These amounts, together with the
companys match on executive contributions to the qualified
401(k) plan, are disclosed in the column labeled Company
contribution to defined contribution plans in the table
included as footnote 8 to the Summary Compensation Table.
|
|
4.
|
|
Our deferred compensation plans do
not offer above market earnings (as defined by SEC rules). As a
result, none of these earnings (losses) are included in the
Summary Compensation Table.
|
|
5.
|
|
Amounts shown in the Summary
Compensation Table for fiscal years 2008 and 2007 include the
following company contributions to the Non-Qualified CRISP:
Mr. Rodkin, $129,000 and $51,200, respectively;
Mr. Gehring, $22,530 and $12,900, respectively;
Mr. Hawaux, $28,887 and $1,817, respectively; and
Mr. Sharpe, $50,542 and $22,769. Neither Mr. Messel
nor Mr. Perez participated in the Non-Qualified CRISP
during fiscal years 2009, 2008 or 2007.
|
Potential
Payments Upon Termination or Change of Control
Our named executive officers employment may be terminated
under several possible scenarios. In some of these scenarios,
our plans, agreements and arrangements would provide severance
benefits in varying amounts to the executive. Further, our
plans, agreements and arrangements would provide for certain
benefits (or for acceleration of benefits) upon a change of
control. Severance and other benefits that are payable upon a
termination of employment or upon a change of control are
described below. The tables following the narrative discussion
summarize amounts payable upon termination or a change of
control under varying circumstances, assuming that the
executives employment terminated on the last day business
day of our 2009 fiscal year May 29, 2009. Other
key assumptions used in compiling the tables are set forth
immediately preceding them. In the event of an actual triggering
event under any of the plans, agreements and arrangements
discussed in this section, all benefits would be paid to the
executive in accordance with, and at times permitted by,
Section 409A of the Code.
Severance
Plan
We maintain a severance pay plan that provides severance benefit
guidelines for all salaried employees. Any benefits payable
under the program are at the sole and absolute discretion of
ConAgra Foods and for any particular employee, the company may
elect to provide severance as suggested by the plan, or provide
greater or lesser benefits. Because of individual agreements
with the other named executive officers, only
Messrs. Gehring, Messel and Perez are potentially covered
by the plan. Under the plan, the severance plan
50
guidelines for individuals with base pay at or above $250,000
per year are payment of 52 weeks of salary continuation,
plus one additional week of salary continuation for each year of
continuous service prior to separation. The guidelines also
provide that upon the former employee finding new employment, it
is appropriate for the company to provide him or her with a lump
sum payment equal to 50% of the severance pay remaining. The
other 50% would be forfeited. We are not required to make
payments to any named executive officer under the severance plan
if he is entitled to receive a severance payment under a change
of control agreement (described below). The tabular disclosure
provided at the end of this section assumes application of these
guidelines for Messrs. Gehring, Messel and Perez in the
Involuntary w/o Cause or Voluntary w/ Good Reason
scenario.
Messrs. Rodkin, Sharpe and Hawauxs severance benefits
would be paid in accordance with their agreements with the
company, and not the severance pay plan.
Agreements
with Named Executive Officers
ConAgra Foods is party to employment agreements with
Messrs. Rodkin and Sharpe and a letter agreement with
Mr. Hawaux. In each case, the agreement addresses such
matters as the executives salary, participation in our
annual and long-term incentive plans and participation in
employee and executive pension, profit sharing, 401(k) and
welfare benefit plans and other benefit programs and
arrangements. The agreements also address these executives
severance benefits and right to participate in the
companys change of control benefit program.
Mr. Rodkin and Mr. Sharpe. Many of the
severance benefit provisions of our agreements with
Messrs. Rodkin and Sharpe are similar. They can be
summarized as set forth in the following table. The references
to 2010 in this table are references to
August 31, 2010 for Mr. Rodkin and November 7,
2010 for Mr. Sharpe, which represents the fifth anniversary
of their employment agreements, respectively, which have been
subsequently amended and restated.
The definition of Cause in both agreements is action
by the executive involving (1) willful malfeasance in
connection with the executives employment having a
material adverse effect on the company, (2) substantial and
continuing refusal in willful breach of the agreement to perform
the duties normally performed by an executive occupying his
position when that refusal has a material adverse effect on the
company or (3) conviction of a felony involving moral
turpitude under the laws of the United States or any state.
Good Reason in these agreements means
(1) assignment of duties materially inconsistent with the
executives position, (2) removal from, or failure to
elect or re-elect executive to, the executives position,
(3) reduction of the executives salary or annual
target bonus opportunity in effect on the agreements date,
(4) material breach by the company of the agreement or
(5) a requirement that the executive be based at any office
or location other than Omaha, Nebraska. Mr. Rodkins
agreement further defines Good Reason as failing to
nominate him to our Board. Mr. Sharpes agreement
further defines Good Reason as changing his
reporting relationship to other than the chief executive officer
or Chairman.
51
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Voluntary w/ Good
|
|
|
Voluntary w/o
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death or Disability
|
|
Salary
|
|
|
Paid through
month of
termination
|
|
|
Paid through month of termination, plus lump sum payment equal
to 24 additional months
|
|
|
Paid through month of termination
|
|
|
Paid through month of termination
|
|
|
Paid through month of the event
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
Not eligible for
a payment
|
|
|
Paid pro-rated award for the year of termination based on our
actual results. Paid lump sum payment equal to target bonus for
the next two years
|
|
|
Not eligible for a payment
|
|
|
If approved by the Committee, a pro-rated award may be paid
based on our actual results
|
|
|
Paid a pro-rated amount equal to target upon death and actual
bonus for the year of the event upon disability
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan (Performance Shares)
|
|
|
Unvested performance shares are forfeited
|
|
|
Retirement treatment applies
|
|
|
If before 2010, all performance shares not yet settled are
forfeited; after 2010, Retirement treatment applies
|
|
|
Performance shares earned based on our actual results are paid,
but pro-rated for the full years of completed service
|
|
|
Retirement treatment applies in the case of
disability; in the case of death, performance shares paid at
target based on full years of completed service
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock Options
|
|
|
Options terminate; all unexercised options lapse
|
|
|
Death or Disability treatment applies
|
|
|
If before 2010, options vested at the time of term remain
exercisable for 90 days; after 2010, full vesting of all
options and they remain exercisable for the remainder of their
terms
|
|
|
Options vested at the time of retirement may be exercised for
three years post-retirement
|
|
|
Full vesting of all options; they remain exercisable for the
remainder of their terms
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified CRISP
|
|
|
No benefits paid
|
|
|
Account balance paid based on participants advance election
|
|
|
Retirement treatment applies
|
|
|
If before 2010 and not Board approved, benefits forfeited.
Otherwise, account balance paid based on participants
advance election
|
|
|
Account balance paid based on participants advance election
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Qualified Pension
|
|
|
No benefits paid
|
|
|
See discussion on pages 46 to 49. Benefit will take into account
an additional 24 months of service at the salary and target
bonus in effect at the time of termination
|
|
|
See discussion on pages 46 to 49
|
|
|
See discussion on pages 46 to 49
|
|
|
See discussion on pages 46 to 49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o Cause
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
or Voluntary w/ Good
|
|
|
Voluntary w/o
|
|
|
|
|
|
|
|
|
|
For Cause
|
|
|
Reason
|
|
|
Good Reason
|
|
|
Retirement
|
|
|
Death or Disability
|
|
Health and Welfare Benefits
|
|
|
Benefits paid according to plan provisions
|
|
|
Two years of coverage for executive and dependents unless become
entitled to equivalent coverage under a subsequent
employers plan. Retirement treatment also
available
|
|
|
If before 2010, benefits paid according to plan provisions.
After 2010, Retirement treatment applies
|
|
|
Until executive and spouse attain age 65, they and their covered
dependents are entitled to COBRA-equivalent medical coverage, at
own expense
|
|
|
Retirement treatment applies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Each agreement provides that all cash payments are generally
payable in a lump sum within fifteen days following termination
of employment; provided, that payments under the annual
incentive plan and the long term incentive plan are payable
following the end of the fiscal year or other performance period
at the same time as such payments are made to the other senior
executive officers. Certain payments to a specified
employee within the meaning of Section 409A of the Code
will be delayed for six months after the date of the separation
from service.
Each agreement provides the executive the right to participate
in our change of control benefits programs as modified from time
to time and provides minimum change of control benefits if a
superior program is not then in place. The company currently
maintains a separate change of control program, discussed below.
The agreements also provide that if benefits become payable
under multiple plans, programs and agreements, the more
favorable program terms must be applied.
Either party to these employment agreements may terminate the
agreement at any time. In each case, the executive has agreed to
non-competition, non-solicitation and confidentiality provisions.
Mr. Hawaux. Under Mr. Hawauxs
agreement with the company, he is provided with a severance
benefit equal to 24 months of salary continuation. This
amount is payable only in the event of termination for reasons
other than cause or a change of control of the company. Cause is
not defined. With respect to a termination related to a change
of control of the company, Mr. Hawauxs severance
would be governed by the change of control agreements described
below.
Annual
Incentive Plan
Subject to the following (or an employment agreement with the
company), a participant in the annual incentive plan (the MIP)
must be an active employee, in good standing, at the time
incentive awards are paid, or he or she forfeits the award. The
following plan terms govern the impact of specific separation
events not covered by an individual employment agreement:
|
|
|
|
|
Involuntary termination due to position elimination: If a
participants position is eliminated during the fourth
quarter of the fiscal year, he or she would be eligible for
award consideration. The amount of any earned award would be
pro-rated for the number of days the individual was eligible to
participate in the plan during the fiscal year.
|
|
|
|
Termination due to retirement or disability: Discretion has
been retained to pay a pro-rated award to a participant who has
retired or become disabled during the fiscal year.
|
|
|
|
Termination due to death: Any incentive payment for which a
participant would have been eligible would be pro-rated to the
date of death and paid to his or her estate.
|
Any pro-rated award is based on actual performance for the
fiscal year and is payable after the end of such fiscal year
when payments are made to other participants.
53
The change of control agreements, described below, govern the
payment of annual incentive awards in the event of a change of
control. Messrs. Rodkins and Sharpes severance
benefits are paid in accordance with their agreements with the
company.
Long-Term
Incentive Plan
The following plan terms govern the impact of a separation from
the company on the performance shares granted under the fiscal
2007 to 2009, fiscal 2008 to 2010, and fiscal 2009 to 2011
performance periods:
|
|
|
|
|
Termination for any reason other than death, disability or
retirement: The participant forfeits all performance shares
granted that have not been paid at the date of termination,
whether the shares are earned as of that date or not. The
Committee has the discretion to pay out some or all of the
forfeited performance shares if such performance shares would
have been earned based on performance and if it deems the action
appropriate and in the best interests of the company.
|
|
|
|
Termination due to disability or retirement: Earned but
unpaid performance shares are paid out as soon as reasonably
practicable after the termination based on our actual
performance for the performance period ending on or immediately
before the event. No distribution would be made with respect to
the fiscal year in which the termination of employment occurs,
unless the date of termination is the last day of the applicable
fiscal year.
|
|
|
|
Termination due to death: A payout would be made at
targeted levels for outstanding performance shares, in each case
pro-rated to reflect the number of full fiscal years in the
performance period that the employee was employed (for example,
upon a June 15, 2009 death, a participant would have been
eligible for a payout at actual performance for the fiscal 2007
to 2009 award, since the performance period ended prior to the
death, and the participant would have eligible for a payout at
targeted levels for two-thirds of the total fiscal 2008 to 2010
award and one-third of the total fiscal 2009 to 2011 award).
|
|
|
|
Upon a change of control, the Board or Committee may exercise
its discretion to pay a participant all or a portion of the
outstanding performance shares. Change of control under this
program has the same definition as in the change of control
agreements described below.
|
Outstanding
Equity Awards
The following terms govern the impact of a separation from the
company on outstanding equity awards:
|
|
|
|
|
Termination for any reason other than death, disability or
retirement:
|
|
|
|
|
|
Options: The participant forfeits all options unvested at the
date of termination and he or she would have 90 days to
exercise vested options.
|
|
|
|
Restricted stock and RSU: Our restricted stock and RSU
agreements have historically provided for cliff-vesting on the
third or fifth anniversary of the grant date. Until early fiscal
2007, these awards also typically included a pro-rata vesting
feature in the event of termination, not for cause, prior to the
cliff-vesting date. In recent grants, the company eliminated the
pro-rata vesting feature and recipients forfeit the awards upon
termination, unless the termination is due to a reduction in
force or position elimination.
|
|
|
|
|
|
Termination due to disability:
|
|
|
|
|
|
Options and RSUs: The participant forfeits all options and
(subject to the pro-rata feature described above) RSUs granted
that have not vested at the date of termination.
|
|
|
|
Restricted stock: All unvested awards would automatically vest.
|
54
|
|
|
|
|
Termination due to death or normal retirement: All unvested
options, restricted stock awards, and RSUs would automatically
vest and, in the case of options, remain exercisable for three
years following termination (but not beyond the end of the
7-year or
10-year term
of such options). Upon an early retirement, the three-year
exercise period for options would apply unless the Committee
eliminated or shortened it, but only as to those options
exercisable upon the early retirement.
|
Each of the agreements evidencing outstanding awards of
restricted stock, RSUs, and stock options provides that the
vesting of the award will accelerate upon a change of control.
The treatment of Messrs. Rodkin and Sharpes equity
awards upon a separation are further governed by their
agreements with the company.
Retirement
Benefits
Our Qualified Pension, Non-Qualified Pension, Non-Qualified
CRISP and Voluntary Deferred Comp plans contain provisions
relating to the termination of the participants
employment. These payments are described more fully in the
disclosure provided in connection with the Pension
Benefits and Non-Qualified Deferred
Compensation tables beginning on page 48. Benefits
provided to Messrs. Rodkin and Sharpe are further governed
by their agreements with the company.
Change
of Control Program
Following a review of market practices during fiscal 2006, the
Board of Directors fully revised the change of control program
for senior executives and implemented new change of control
agreements with reduced benefits with a small group of senior
officers. The agreements were recently amended and restated for
compliance with Section 409A of the Code. The agreements
are designed to encourage management to continue performing its
responsibilities in the event of a pending or potential change
of control. During fiscal 2009, this program covered each of the
named executive officers.
Generally, a change of control under these agreements occurs if
one of the following events occurs:
|
|
|
|
|
Individuals who constitute the Board, which, for these purposes,
we refer to as the Incumbent Board, cease for any reason to
constitute at least a majority of the Board. Anyone who becomes
a director and whose election, or nomination for election, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board is considered a member of the
Incumbent Board.
|
|
|
|
Consummation of a reorganization, merger or consolidation, in
each case, with respect to which persons who were our
stockholders immediately prior to the transaction do not,
immediately thereafter, own more than fifty percent of the
combined voting power entitled to vote generally in the election
of directors of the reorganized, merged or consolidated company.
|
|
|
|
A liquidation or dissolution of the company or the sale of all
or substantially all of the companys assets.
|
The agreements provide that upon a change of control, ConAgra
Foods may (at the sole and absolute discretion of the Board or
Committee) pay each executive all or a pro-rated portion of the
executives short
and/or
long-term incentive for the year in which the change of control
occurs, and the terms of the companys stock plan govern
the treatment of equity awards upon a change of control. With
these exceptions, the agreements are double-trigger
arrangements, requiring both a change of control event and a
qualifying termination of employment to trigger benefits. A
qualifying termination event occurs if, within three years of a
change of control, (1) the executives employment is
involuntarily terminated without cause or
(2) the executive terminates his or her employment for
good reason. Executives entitled to severance
benefits under
55
a change of control agreement forfeit any severance compensation
and benefits under our severance pay plan guidelines and receive
the following:
|
|
|
|
|
a lump sum cash payment equal to a multiple of the
executives base salary and annual bonus (calculated using
the executives highest annual bonus for the three fiscal
years preceding the change of control or the executives
current target bonus, whichever is greater). The multiples range
from one to three (three for Messrs. Rodkin, Gehring,
Hawaux, Perez and Sharpe and one for Mr. Messel);
|
|
|
|
continuation for three years of medical, dental, disability,
basic and supplemental life insurance to the extent such
benefits remain in effect for other executives, with premiums
paid by the executive. ConAgra Foods must pay the executive a
single lump sum payment equal to the executives estimated
cost to participate in the medical and dental plans, plus a tax
grossup;
|
|
|
|
benefits under our Non-Qualified Pension commensurate with
adding three years to the executives years of service and
age (except for Mr. Rodkin and Mr. Sharpe, whose
pension benefits are determined by their employment agreements).
A lump sum equivalent to all benefits accrued for the executive
will be placed in a segregated trust (that remains subject to
the claims of our creditors) within 60 days following the
termination of employment;
|
|
|
|
a supplemental benefit under our Non-Qualified CRISP plan equal
to three times the maximum company contribution that the
executive could have received under the Qualified CRISP and
Non-Qualified CRISP in the year in which the change of control
occurs; and
|
|
|
|
outplacement assistance not exceeding $30,000.
|
Certain payments to a specified employee within the
meaning of Section 409A of the Code will be delayed for six
months after the date of the separation from service.
The agreements also entitle each executive to an additional
payment, if necessary, to make the executive whole as a result
of any excise and related taxes imposed by the Code on any
change of control benefits received. If the safe harbor amount
at which the excise tax is imposed is not exceeded by more than
10%, the benefits will instead be reduced to avoid the excise
tax. The benefit reduction does not apply to
Mr. Rodkins and Mr. Sharpes agreements.
Generally, a termination for cause under the
agreements requires (1) the willful failure by the
executive to substantially perform his or her duties,
(2) the willful engaging by the executive in conduct that
is demonstrably and materially injurious to the company or
(3) the executives conviction of a felony or
misdemeanor that impairs his or her ability substantially to
perform duties for the company. A right of the executive to
terminate with good reason following a change of
control is generally triggered by (1) any failure of the
company to comply with and satisfy the terms of the change of
control agreement, (2) a significant involuntary reduction
of the authority, duties or responsibilities held by the
executive immediately prior to the change of control,
(3) any involuntary removal of the executive from an
officer position held by the executive immediately prior to the
change of control, except in connection with promotions,
(4) any involuntary reduction in the aggregate compensation
level of the executive, (5) requiring the executive to
become based at a new location or (6) requiring the
executive to undertake substantially greater amounts of business
travel.
Each change of control agreement terminates, in the absence of a
change of control, when the executives employment as a
full-time employee of the company is terminated or the executive
enters into a written separation agreement with the company. In
addition, we may unilaterally terminate each agreement prior to
a change of control following six months prior written notice to
the executive.
Summary
of Possible Benefits
The first table below summarizes estimated incremental amounts
payable upon termination under various scenarios. A second table
summarizes estimated incremental amounts payable upon a change
of control and upon termination following a change of control.
We have not included in the tables amounts
56
payable regardless of the occurrence of a triggering event. For
example, we excluded accumulated balances in retirement plans
when a terminating event does nothing more than create a right
to a payment of the balance. We also excluded death benefits
payable when the executive paid the premium. The data in the
tables assumes the following:
|
|
|
|
|
each triggering event occurred on May 31, 2009 (the last
day of fiscal 2009) and the per share price of our common
stock was $18.59 (the NYSE closing price of our stock on
May 29, 2009, the last trading day of fiscal 2009);
|
|
|
|
with respect to salary continuation, if an executive did not
have a right to salary continuation under a stand-alone
agreement with the company, the severance pay plan guidelines
applied;
|
|
|
|
with respect to the annual incentive plan, awards were earned at
target levels and where the Committee had discretionary
authority to award a payout, it exercised that authority
(including in the change of control scenario);
|
|
|
|
with respect to the annual incentive plan, in the case of an
involuntary termination not for cause without a change of
control, the termination was due to position elimination in the
fiscal 2009 fourth quarter;
|
|
|
|
with respect to performance shares, awards were earned at target
levels. (These amounts also include a cash value of dividend
equivalents on the number of shares/amount of cash assumed to
have been earned);
|
|
|
|
with respect to performance shares in the change of control
scenario, the Committee exercised its discretionary authority to
award a pro-rata payout and did so at target levels;
|
|
|
|
Non-Qualified Pension amounts reflect the present value of
benefits applicable in a scenario, less the present value of
accrued benefits to which the executive was entitled under the
plan at May 31, 2009;
|
|
|
|
in the normal retirement scenarios, an executive attained the
normal retirement age of 65 by fiscal year end (or such other
age defined as normal retirement in an
executives stand-alone agreement with the
company); and
|
|
|
|
in the disability scenarios, the disabling event lasted one year
into the future.
|
57
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary w/o
|
|
|
Voluntary W/
|
|
|
|
|
|
Normal
|
|
|
Death or
|
|
|
|
Good Reason $
|
|
|
Good Reason $ (1)
|
|
|
For Cause $
|
|
|
Retirement $
|
|
|
Disability $ (2)
|
|
|
Gary M. Rodkin
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
2,000,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
6,000,000
|
|
|
|
|
|
|
|
2,000,000
|
|
|
|
2,000,000
|
|
Performance Shares
|
|
|
|
|
|
|
4,052,620
|
|
|
|
|
|
|
|
4,052,620
|
|
|
|
4,052,620
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
5,616,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits Continuation
|
|
|
|
|
|
|
26,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
2,544
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
Disability Benefits
|
|
|
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
17,698,262
|
|
|
|
0
|
|
|
|
6,052,620
|
|
|
|
7,277,620
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Gehring
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
510,577
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
450,000
|
|
|
|
|
|
|
|
450,000
|
|
|
|
450,000
|
|
Performance Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
732,743
|
|
|
|
732,743
|
|
Accelerated Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64,000
|
|
|
|
64,000
|
|
Accelerated Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
74,360
|
|
|
|
74,360
|
|
Benefits Continuation
|
|
|
|
|
|
|
13,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
900,000
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
973,661
|
|
|
|
0
|
|
|
|
1,321,103
|
|
|
|
2,446,103
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Andre J. Hawaux
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
1,200,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
600,000
|
|
|
|
|
|
|
|
600,000
|
|
|
|
600,000
|
|
Performance Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,455,876
|
|
|
|
1,455,876
|
|
Accelerated Stock Options
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160,000
|
|
|
|
160,000
|
|
Accelerated Restricted Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
61,347
|
|
|
|
61,347
|
|
Benefits Continuation
|
|
|
|
|
|
|
23,063
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
1,823,063
|
|
|
|
0
|
|
|
|
2,277,223
|
|
|
|
3,502,223
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Scott Messel
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
393,712
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
242,900
|
|
|
|
|
|
|
|
242,900
|
|
|
|
242,900
|
|
Performance Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
486,296
|
|
|
|
486,296
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits Continuation
|
|
|
|
|
|
|
13,084
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
694,000
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
649,696
|
|
|
|
0
|
|
|
|
729,196
|
|
|
|
1,648,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cause or
|
|
|
|
|
|
|
|
|
|
|
|
|
Voluntary w/o
|
|
|
Voluntary W/
|
|
|
|
|
|
Normal
|
|
|
Death or
|
|
|
|
Good Reason $
|
|
|
Good Reason $ (1)
|
|
|
For Cause $
|
|
|
Retirement $
|
|
|
Disability $ (2)
|
|
|
Peter M. Perez
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
471,346
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
344,000
|
|
|
|
|
|
|
|
344,000
|
|
|
|
344,000
|
|
Performance Shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
972,610
|
|
|
|
972,610
|
|
Benefits Continuation
|
|
|
|
|
|
|
7,812
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
860,000
|
|
Disability Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
823,158
|
|
|
|
0
|
|
|
|
1,316,610
|
|
|
|
2,401,610
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Robert F. Sharpe, Jr.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salary continuation
|
|
|
|
|
|
|
1,350,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
2,025,000
|
|
|
|
|
|
|
|
675,000
|
|
|
|
675,000
|
|
Performance Shares
|
|
|
|
|
|
|
1,296,820
|
|
|
|
|
|
|
|
1,296,820
|
|
|
|
1,296,820
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
2,416,949
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Benefits Continuation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Death Benefits
|
|
|
|
|
|
|
2,544
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
Disability Benefits
|
|
|
|
|
|
|
170
|
|
|
|
|
|
|
|
|
|
|
|
225,000
|
|
Total
|
|
|
0
|
|
|
|
7,091,483
|
|
|
|
0
|
|
|
|
1,971,820
|
|
|
|
3,196,820
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
For Messrs. Gehring, Hawaux
and Perez, no incremental benefits are paid upon a voluntary
termination with Good Reason. In that scenario,
payments are zero. For these individuals, this section is only
applicable in the event of an involuntary termination without
Cause.
|
|
2.
|
|
Amounts shown as benefits from the
Annual Incentive Plan and Performance Shares are payable in the
event of a death or disability. Amounts shown as benefits from
Accelerated Stock Options, Accelerated Restricted Stock and
Death Benefits are paid only in the event of death. Amounts
shown as Disability Benefits are payable only in the event of
disability. All amounts are totaled for illustrative purposes
only.
|
In the table that follows, if, following a change of control,
any of Messrs. Gehring, Hawaux, Messel or Perez was
terminated for Cause or voluntarily terminated
employment without Good Reason, he would not receive
any benefits incremental to those shown in the No
Termination column. Messrs. Rodkin and Sharpe would
be entitled to salary continuation per their employment
agreements through the end of the month of the event. For fiscal
2009, the last day of the fiscal year was at the end of the
month; therefore, Mr. Rodkins and
Mr. Sharpes salary continuation in this scenario
would be $0.
59
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o Cause or
|
|
Change of Control
and:
|
|
No Termination $
|
|
|
Voluntary w/ Good Reason
$
|
|
|
Gary M. Rodkin
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
3,000,000
|
|
Annual Incentive Plan
|
|
|
2,000,000
|
|
|
|
8,000,000
|
|
Performance Shares
|
|
|
4,052,620
|
|
|
|
4,052,620
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
329,508
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
5,616,171
|
|
Benefits Continuation
|
|
|
|
|
|
|
40,135
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
4,071
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up
|
|
|
|
|
|
|
9,370,713
|
|
Total
|
|
|
6,052,620
|
|
|
|
30,443,218
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
John F. Gehring
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
1,350,000
|
|
Annual Incentive Plan
|
|
|
450,000
|
|
|
|
1,800,000
|
|
Performance Shares
|
|
|
732,743
|
|
|
|
732,743
|
|
Accelerated Stock options
|
|
|
64,000
|
|
|
|
64,000
|
|
Accelerated Restricted Stock
|
|
|
74,360
|
|
|
|
74,360
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
66,471
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
208,477
|
|
Benefits Continuation
|
|
|
|
|
|
|
40,135
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
3,689
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up
|
|
|
|
|
|
|
1,374,204
|
|
Total
|
|
|
1,321,103
|
|
|
|
5,744,079
|
|
|
|
|
|
|
|
|
|
|
Andre J. Hawaux
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
1,800,000
|
|
Annual Incentive Plan
|
|
|
600,000
|
|
|
|
2,400,000
|
|
Performance Shares
|
|
|
1,455,876
|
|
|
|
1,455,876
|
|
Accelerated Stock Options
|
|
|
160,000
|
|
|
|
160,000
|
|
Accelerated Restricted Stock
|
|
|
61,347
|
|
|
|
61,347
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
98,493
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
271,308
|
|
Benefits Continuation
|
|
|
|
|
|
|
40,135
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
4,071
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up
|
|
|
|
|
|
|
2,038,711
|
|
Total
|
|
|
2,277,223
|
|
|
|
8,359,941
|
|
|
|
|
|
|
|
|
|
|
60
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary w/o Cause or
|
|
Change of Control
and:
|
|
No Termination $
|
|
|
Voluntary w/ Good Reason
$
|
|
|
Scott Messel
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
347,000
|
|
Annual Incentive Plan
|
|
|
242,900
|
|
|
|
485,800
|
|
Performance Shares
|
|
|
486,296
|
|
|
|
486,296
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
21,759
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
26,034
|
|
Benefits Continuation
|
|
|
|
|
|
|
39,297
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
2,903
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up(1)
|
|
|
|
|
|
|
|
|
Total
|
|
|
729,196
|
|
|
|
1,439,089
|
|
|
|
|
|
|
|
|
|
|
Pete Perez
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
1,290,000
|
|
Annual Incentive Plan
|
|
|
344,000
|
|
|
|
1,376,000
|
|
Performance Shares
|
|
|
972,610
|
|
|
|
972,610
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
22,881
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
114,808
|
|
Benefits Continuation
|
|
|
|
|
|
|
26,945
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
3,536
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up(1)
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,316,610
|
|
|
|
3,836,780
|
|
|
|
|
|
|
|
|
|
|
Robert F. Sharpe, Jr.
|
|
|
|
|
|
|
|
|
Salary Continuation
|
|
|
|
|
|
|
2,025,000
|
|
Annual Incentive Plan
|
|
|
675,000
|
|
|
|
2,700,000
|
|
Performance Shares
|
|
|
1,296,820
|
|
|
|
1,296,820
|
|
Non-Qualified CRISP
|
|
|
|
|
|
|
121,896
|
|
Non-Qualified Pension
|
|
|
|
|
|
|
2,416,949
|
|
Death/Disability Benefit
|
|
|
|
|
|
|
4,071
|
|
Outplacement
|
|
|
|
|
|
|
30,000
|
|
Excise Tax
Gross-Up
|
|
|
|
|
|
|
3,867,405
|
|
Total
|
|
|
1,971,820
|
|
|
|
12,462,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
As described on page 56,
excise tax gross up payments are triggered only when amounts
exceed the Section 280G limit by greater than 10%.
Mr. Messels payments would be below the threshold
amounts to trigger excise tax; therefore, no gross up would be
required. Mr. Perez would not exceed the limit by 10%,
therefore his cash severance would be reduced by approximately
$150,000 so as not to trigger the excise tax.
|
61
Proposals
for 2010 Annual Meeting
To be considered for inclusion in next years proxy
statement, stockholder proposals must be received at our
principal executive offices no later than the close of business
on April 14, 2010.
Our bylaws outline the process for stockholders to follow to
nominate a director or present any other business at an Annual
Stockholders Meeting. Generally, a stockholder must give
timely notice to the ConAgra Foods Corporate Secretary. To be
timely, that notice for the 2010 annual meeting must be received
at our principal executive offices not less than 90 nor more
than 120 days prior to the first anniversary of the 2009
annual meeting. However, if the date of the 2009 annual meeting
is advanced by more than 30 days or delayed by more than
60 days from the anniversary date, the notice must be
received not later than the 90th day prior to the meeting day or
the tenth day following public announcement of the meeting date.
The bylaws specify the information that must accompany any such
stockholder notice. Our proxy statement for the 2010 annual
meeting will give discretionary authority with respect to all
stockholder proposals properly brought before the 2010 annual
meeting that are not included in such proxy statement.
Proposals, nominations and inquiries regarding these matters
should be addressed to the Corporate Secretary, ConAgra Foods,
Inc., One ConAgra Drive, Omaha, Nebraska 68102.
62
Annex A
FORM OF
CONAGRA FOODS 2009 STOCK PLAN
SECTION 1
NAME AND
PURPOSE
1.1 Name. The name of the plan shall be
the ConAgra Foods 2009 Stock Plan (the Plan).
1.2 Purpose of Plan. The purpose of the
Plan is to foster and promote the long-term financial success of
the Company and increase stockholder value by
(a) motivating superior performance by means of stock
incentives, (b) encouraging and providing for the
acquisition of an ownership interest in the Company by
Participants and (c) enabling the Company to attract and
retain the services of a management team responsible for the
long-term financial success of the Company. If approved by
Companys stockholders, the Plan shall replace the ConAgra
Foods 2006 Stock Plan (the 2006 Plan), and no
further awards shall be made under the 2006 Plan.
SECTION 2
DEFINITIONS
2.1 Definitions. Whenever used herein,
the following terms shall have the respective meanings set forth
below:
|
|
|
|
(a)
|
1990 Plan means the ConAgra Foods 1990 Stock Plan.
|
|
|
(b)
|
1995 Plan means the ConAgra Foods 1995 Stock Plan.
|
|
|
(c)
|
2000 Plan means the ConAgra Foods 2000 Stock Plan.
|
|
|
(d)
|
2006 Plan means the ConAgra Foods 2006 Stock Plan.
|
|
|
(e)
|
Act means the Securities Exchange Act of 1934, as
amended. Any reference to a particular section of the Act shall
include all successor sections and shall also be deemed to
include all related regulations, rules and interpretations.
|
|
|
(f)
|
Agreement means the written agreement evidencing an
Award granted to a Participant under the Plan.
|
|
|
(g)
|
Award means any Option, SAR, Restricted Stock,
Restricted Stock Unit, Performance Share or Other Stock-Based
Award granted under the Plan, including Awards combining two or
more types of the foregoing awards in a single grant.
|
|
|
(h)
|
Board means the Board of Directors of ConAgra Foods,
Inc.
|
|
|
(i)
|
Change of Control has the meaning set forth in
Section 11.5.
|
|
|
(j)
|
Code means the Internal Revenue Code of 1986, as
amended. Any reference to a particular Section of the Code shall
include all successor Sections and shall also be deemed to
include all related regulations, rules and interpretations.
|
|
|
(k)
|
Committee means the Human Resources Committee of the
Board, or its successor, or such other committee of the Board to
which the Board delegates power to act under or pursuant to the
provisions of the Plan.
|
|
|
(l)
|
Company means ConAgra Foods, Inc., a Delaware
corporation (and any successor thereto) and its Subsidiaries.
|
|
|
(m)
|
Eligible Director means a person who is serving as a
member of the Board and who is not an Employee.
|
A-1
|
|
|
|
(n)
|
Employee means any employee of the Company.
|
|
|
(o)
|
Executive Incentive Plan means the ConAgra Foods
Executive Incentive Plan, as in effect from time to time.
|
|
|
(p)
|
Fair Market Value means, on any date, the closing
price of the Stock as reported on the New York Stock Exchange
(or on such other recognized market or quotation system on which
the trading prices of the Stock are principally traded or quoted
at the relevant time) on such date. In the event that there are
no Stock transactions reported on such exchange (or such other
system) on such date, Fair Market Value means the closing price
on the immediately preceding date on which Stock transactions
were so reported.
|
|
|
(q)
|
Incumbent Board has the meaning set forth in
Section 11.5(a).
|
|
|
(r)
|
Option means the right to purchase Stock at a stated
price for a specified period of time. For purposes of the Plan,
an Option may be either (i) an Incentive Stock Option
within the meaning of Code Section 422 or (ii) a
Nonqualified Stock Option.
|
|
|
(s)
|
Other Stock-Based Award means an award of a share of
Stock or units of common stock to a Participant that are valued
in whole or in part by reference to, or are otherwise based on
the Fair Market Value of, shares of Stock, in each case subject
to such terms and conditions as the Committee may determine.
|
|
|
|
|
(t)
|
Participant means any Employee, Eligible Director,
or consultant (a non-employee who performs bona fide services to
the Company) designated by the Committee to participate in the
Plan.
|
|
|
|
|
(u)
|
Performance Share means an award for which the
grant, issuance, retention, vesting
and/or
settlement is subject to the satisfaction of one or more of the
performance criteria established by the Committee or the
Executive Incentive Plan, if applicable.
|
|
|
(v)
|
Plan means this ConAgra Foods 2009 Stock Plan, as in
effect from time to time.
|
|
|
(w)
|
Predecessor Plans means collectively, the 2006 Plan,
the 2000 Plan, the 1995 Plan, and the 1990 Plan.
|
|
|
(x)
|
Qualified Performance-Based Award means an Award (or
a specified portion of an Award) to a Participant that is
intended to satisfy the requirements for performance-based
compensation under Code Section 162(m).
|
|
|
(y)
|
Restricted Stock means a share of Stock granted to a
Participant subject to such restrictions as the Committee may
determine.
|
|
|
(z)
|
Restricted Stock Unit means the right to receive or
vest with respect to one or more shares of Stock (or as
otherwise determined by the Committee), subject to such terms
and conditions as the Committee may establish.
|
|
|
(aa)
|
Stock means the Common Stock of ConAgra Foods, Inc.,
par value $5.00 per share.
|
|
|
(bb)
|
Stock Appreciation Right or SAR means
the right, subject to such terms and conditions as the Committee
may determine, to receive an amount in cash or Stock, as
determined by the Committee, equal to the excess of (i) the
aggregate Fair Market Value, as of the date such SAR is
exercised, of the number shares of Stock covered by the SAR
being exercised over (ii) the aggregate exercise price of
such SAR.
|
|
|
(cc)
|
Subsidiary means any corporation, partnership, joint
venture or other entity in which ConAgra Foods, Inc. owns,
directly or indirectly, 25% or more of the voting power or of
the capital interest or profits interest (within the meaning of
Code Section 414(c)) of such entity.
|
|
|
2.2
|
Gender and Number. Except when otherwise indicated
by the context, words in the masculine gender used in the Plan
shall include the feminine gender, the singular shall include
the plural, and the plural shall include the singular.
|
A-2
SECTION 3
ELIGIBILITY
AND PARTICIPATION
The only persons eligible to participate in the Plan shall be
those Participants selected by (i) the Committee, or
(ii) a designee to whom such authority has been delegated
by the Committee pursuant to Section 4.4.
SECTION 4
POWERS OF
THE COMMITTEE
4.1 Committee Members. Subject to
Section 4.4., the Plan shall be administered by the
Committee comprised of no fewer than two members of the Board.
Each Committee member shall satisfy the requirements for
(i) an independent director for purposes of the
Companys Corporate Governance Principles, (ii) an
independent director under any rules and regulations
of the stock exchange or other recognized market or quotation
system on which the Stock is principally traded or quoted at the
relevant time, (iii) a non-employee director
for purposes of
Rule 16b-3
under the Act, and (iv) an outside director
under Code Section 162(m). If the Committee does not exist,
or for any other reason determined by the Board, the Board may
take any action under the Plan (with such recusals as may be
appropriate) that would otherwise be the responsibility of the
Committee.
4.2 Power to Grant. The Committee shall
determine the Participants to whom Awards shall be granted, the
type or types of Awards to be granted, the number of shares of
Stock subject to each Award, and the terms and conditions of any
and all such Awards. The Committee may establish different terms
and conditions for different types of Awards, for different
Participants receiving the same type of Awards, and for the same
Participant for each Award such Participant may receive, whether
or not granted at different times.
4.3 Administration. The Committee shall
be responsible for the administration of the Plan. The
Committee, by majority action thereof, is authorized to
prescribe, amend, and rescind rules and regulations relating to
the Plan, to provide for conditions deemed necessary or
advisable to protect the interests of the Company, and to make
all other determinations necessary or advisable for the
administration and interpretation of the Plan in order to carry
out its provisions and purposes. Determinations,
interpretations, or other actions made or taken by the Committee
pursuant to the provisions of the Plan shall be final, binding,
and conclusive for all purposes and upon all persons.
4.4 Delegation by Committee. To the full
extent permitted by law and the rules of any exchange on which
the shares of Stock are traded, the Committee may, at any time
and from time to time, (a) delegate to one or more of its
members any or all of its responsibilities and powers, including
all responsibilities and authority described under
Sections 4.2 and 4.3;(b) delegate to any individual officer
of the Company the authority to designate recipients of Awards
and the number and type of Awards granted, although such officer
cannot use this authority to grant awards to executive officers,
Eligible Directors or him or herself; and (c) grant
authority to Employees or designate Employees of the Company to
execute documents on behalf of the Committee or to otherwise
assist the Committee in the administration and operation of the
Plan. Nothing in this Section 4.4, however, shall permit
the grant of an Award to any executive officer or other Employee
who is reasonably expected to be covered by Code
Section 162(m), except by two or more outside
directors.
4.5 International
Participants. Notwithstanding any provision of the Plan
to the contrary, in order to foster and promote achievement of
the purposes of the Plan or to comply with provisions of laws in
other countries in which the Company operates or has employees,
the Committee, in its sole discretion, shall have the power and
authority to (i) determine which Participants (if any)
employed by the Company outside the United States are eligible
to participate in the Plan, (ii) modify the terms and
conditions of any Awards made to such Participants, and
(iii) establish subplans and modified Option exercise
procedures and other Award terms and procedures to the extent
such actions may be necessary or advisable. No such special
terms, supplements, amendments or restatements, however, shall
include any provisions that are inconsistent with the
A-3
terms of this Plan as then in effect unless this Plan could have
been amended to eliminate such inconsistency without further
approval by the stockholders of the Company.
SECTION 5
STOCK
SUBJECT TO PLAN
5.1 Number. Subject to the provisions of
Section 5.4, the number of shares of Stock subject to
Awards under the Plan may not exceed
(i) 29,500,000 shares of Stock, plus (ii) any
shares of Stock that are authorized to be awarded under the 2006
Plan and that, as of the effective date of this Plan, have not
been issued and are not subject to outstanding awards granted
under the 2006 Plan, and (iii) any shares of Stock subject
to an outstanding award under the Predecessor Plans that
expires, is forfeited or becomes unexercisable for any reason,
provided, the following shares of Stock subject to an award
under the Predecessor Plans may not again be made available for
issuance of Awards under the Plan: (x) shares used to pay
the exercise price of an outstanding award, (y) shares used
to pay withholding taxes related to an outstanding award, or
(z) shares not issued or delivered as a result of the net
settlement of an outstanding SAR. The shares to be delivered
under the Plan may consist, in whole or in part, of treasury
Stock or authorized but unissued Stock, not reserved for any
other purpose.
5.2 Limitations. The maximum number of
shares of Stock with respect to which Awards may be granted to
any one Participant in any fiscal year under the Plan is 15% of
the aggregate number of shares of Stock available for Awards
under Section 5.1. A maximum of 50% of shares of Stock
available for issuance under the Plan may be issued as Awards
other than Options or SARs.
5.3 Cancelled, Terminated, Forfeited or
Surrendered Awards. Any shares of Stock subject to an
Award which for any reason is cancelled, is terminated, lapses
or expires without the issuance of any Stock shall again be
available for Awards under the Plan; provided, the following
shares of Stock may not again be made available for issuance as
Awards under the Plan: (i) shares used to pay the exercise
price of an outstanding Award, (ii) shares used to pay
withholding taxes related to an outstanding Award, or
(iii) shares not issued or delivered as a result of the net
settlement of an outstanding SAR.
5.4 Adjustment in Capitalization. If any
change in corporate capitalization, such as a stock split,
reverse stock split, or stock dividend; or any corporate
transaction such as a reorganization, reclassification, merger,
consolidation, combination or separation, including a spin-off,
of the Company or sale or other disposition by the Company of
all or a portion of its assets, any other change in the
Companys corporate structure, or any distribution to
stockholders (other than a cash dividend that is not an
extraordinary cash dividend) results in the outstanding shares
of Stock, or any securities exchanged therefor or received in
their place, being exchanged for a different number or class of
shares or other securities of ConAgra Foods, Inc., or for shares
of stock or other securities of any other corporation (or new,
different or additional shares or other securities of ConAgra
Foods, Inc. or of any other corporation being received by the
holders of outstanding shares of Stock), or a material change in
the market value of the outstanding shares of Stock as a result
of the change, transaction or distribution, then equitable
adjustments shall be made by the Committee, as it determines are
necessary and appropriate, in: (a) the aggregate number and
type of shares of Stock (or other property) available for the
grant of Awards under Section 5.1, (b) the maximum
number of shares of Stock (or other property) that can be
granted to any individual in any fiscal year under
Section 5.2, (c) the number and type of shares (or
other property) and exercise price with respect to outstanding
Options and SARs, and (d) the number, prices and dollar
value of other outstanding Awards. However, in no event shall
this Section 5.4 be construed to permit a modification
(including a replacement) of an Option or SAR if such
modification either: (i) would result in accelerated
recognition of income or imposition of additional tax under Code
Section 409A; or (ii) would cause the Option or SAR
subject to the modification (or cause a replacement Option or
SAR) to be subject to Code Section 409A, provided that the
restriction of this clause (ii) shall not apply to any
Option or SAR that, at the time it is granted or otherwise, is
designated as being deferred compensation subject to Code
Section 409A. Any adjustment by the Committee shall be
conclusive and binding for all purposes of the Plan.
A-4
5.5 Dividend Equivalent Rights. No
dividends or dividend equivalents shall be paid on Options or
SARs. The Committee may at the time of the grant of a Restricted
Stock, Restricted Stock Unit, Performance Share, or Other
Stock-Based Award provide that any dividends declared on common
stock or dividend equivalents be (i) paid to the
Participant, (ii) accumulated for the benefit of the
Participant and paid to the Participant only after the
expiration of any restrictions, or (iii) not paid or
accumulated.
5.6 Assumed Awards. In the event the
Company assumes outstanding equity awards or the right or
obligation to make such awards in connection with the
acquisition of or merger with another corporation or business
entity, the Committee shall make such adjustments in the terms
of such assumed or substituted awards under the Plan, including
the number of shares subject to such award and the exercise
price, as it shall deem equitable and appropriate to prevent
dilution or enlargement of benefits intended to be made
available under the Plan. Such assumed or substituted awards
will generally not count against the aggregate number of shares
available for issuance of Awards under the Plan, provided in
each case that the requirements for the exemption for mergers
and acquisitions under rules and regulations of the stock
exchange or other recognized market or quotation system on which
the Stock is principally traded or quoted at the relevant time.
SECTION 6
STOCK
OPTIONS
6.1 Grant of Options. Options may be
granted to Participants at such time or times as shall be
determined by the Committee. Options granted under the Plan may
be of two types: (i) Incentive Stock Options and
(ii) Nonqualified Stock Options. Each Option shall be
evidenced by an Option Agreement that shall specify the type of
Option granted, the exercise price, the duration of the Option,
the number of shares of Stock to which the Option pertains, the
exercisability (if any) of the Option in the event of death,
retirement, disability or termination of employment, and such
other terms and conditions not inconsistent with the Plan as the
Committee shall determine. Only Participants who are Employees
shall be eligible to receive Incentive Stock Options. Options
may also be granted in replacement of or upon assumption of
options previously issued by companies or entities acquired by
the Company by merger or stock purchase, and any assumed or
replacement options may have the same terms as the options so
replaced or assumed, provided that the number of shares and
exercise price shall be adjusted as provided in Section 5.6.