UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of report (Date of earliest event reported) February 12, 2015

 

 

ConAgra Foods, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   1-7275   47-0248710

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

One ConAgra Drive

Omaha, NE

  68102
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (402) 240-4000

 

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Appointment of Principal Executive Officer

In August 2014, ConAgra Foods, Inc. (the “Company”) announced that Gary M. Rodkin, President and Chief Executive Officer of the Company, had informed the Company of his intention to retire as President and Chief Executive Officer at the end of the Company’s fiscal year or following the on-boarding of his successor.

On February 12, 2015, the Company announced that the Board of Directors of the Company (the “Board”) has appointed Sean Connolly, age 49, to become the Company’s President and Chief Executive Officer, effective as of the later of (i) April 6, 2015 and (ii) the date immediately following the date upon which the Company’s Quarterly Report on Form 10-Q for the period ended February 22, 2015 is filed with the SEC (the “April Effective Date”). Prior to joining the Company, from June 2012 to August 2014, Mr. Connolly was President and Chief Executive Officer of The Hillshire Brands Company (“Hillshire”), a manufacturer and marketer of brand name food products and food solutions for the retail and foodservice markets. Mr. Connolly ceased serving as Hillshire’s President and Chief Executive Officer in connection with Hillshire’s merger with a subsidiary of Tyson Foods, Inc. From January 2012 to June 2012, Mr. Connolly was Executive Vice President of Sara Lee Corporation (the former name of Hillshire) and Chief Executive Officer, Sara Lee North American Retail and Foodservice. Prior to joining Hillshire, Mr. Connolly served as President of Campbell North America, the largest division of Campbell Soup Company (“Campbell”) (which is in the business of branded convenience food products), from October 2010 to December 2011. Also with Campbell, Mr. Connolly served as President, Campbell USA from 2008 to 2010, and President, North American Foodservice from 2007 to 2008. Before joining Campbell in 2002, Mr. Connolly served in various marketing and brand management roles at Procter & Gamble (which is in the business of branded consumer product goods) for a decade.

In connection with Mr. Connolly’s appointment as the Company’s President and Chief Executive Officer, the Company and Mr. Connolly, on February 12, 2015, entered into an employment agreement. The employment agreement provides terms of Mr. Connolly’s employment through August 1, 2018, at which time the agreement expires. The employment agreement provides that Mr. Connolly will serve as the Company’s CEO-elect from March 3, 2015 until his appointment as President and Chief Executive Officer on the April Effective Date. Mr. Connolly has also been elected to the Board effective as of the April Effective Date, following his appointment to the position of President and Chief Executive Officer.

Mr. Connolly’s initial base salary under the employment agreement will be $1,100,000. Under the terms of the employment agreement, beginning with the Company’s fiscal year 2016, Mr. Connolly is eligible for an annual incentive bonus with a target opportunity of at least 150% of his base salary and a maximum award opportunity equal to 200% of target, subject to achievement of the applicable performance conditions established by the Board’s Human Resources Committee (the “Committee”). In addition, Mr. Connolly is eligible to participate in the Company’s long-term equity and incentive compensation plans (“Long-Term Incentive Plans”). Under the employment agreement, Mr. Connolly is entitled to an annual award target opportunity equal to at least $6,250,000 with respect to any three-year performance period under the Long-Term Incentive Plans, commencing with the performance period beginning in the Company’s 2016 fiscal year, subject to the terms and conditions established by the Committee.

Because Mr. Connolly’s date of hire occurs during the fiscal 2015 to 2017 performance period under the Long-Term Incentive Plans, the employment agreement provides that he will receive a modified award with respect to such performance period (“Transitional Award”). With respect to the fiscal 2015 to 2017 performance period under the performance share component of the Long-Term Incentive Plans, Mr. Connolly will be granted performance shares with a target grant date value of $2,090,000. The terms and conditions applicable to this Transitional Award will be established by the Committee and be materially consistent with the terms applicable to the performance share grants made to other senior executives of the Company with respect to such performance period, except that the overarching diluted earnings per share performance goals with respect to such performance period will be adjusted to reflect the fact that Mr. Connolly’s date of hire occurs during the performance period. The maximum number of shares that can be earned under the Transitional Award is 300,000. To facilitate the Transitional Award, the Company has adopted a performance share plan to be used in connection with such

Transitional Award (the “CEO Performance Share Plan”). The terms of the CEO Performance Share Plan are materially consistent with the terms of the performance share plan filed with the SEC as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on July 18, 2008.

The above summary relating to the CEO Performance Share Plan is qualified in its entirety by the terms and conditions set forth in the CEO Performance Share Plan for Transitional Awards, a copy of which is attached as Exhibit 10.1 hereto.

The employment agreement provides that Mr. Connolly will receive a sign-on grant of 600,000 stock options (the “Sign-On Options”) and a sign-on grant of restricted stock units with a grant date value equal to $1,600,000, calculated based on the average of the closing market price of a share of the Company’s common stock as reported on the New York Stock Exchange for the 30 days preceding the grant date (the “Sign-On RSUs”). The Sign-On Options will have an exercise price equal to the fair market value of the Company’s common stock on the date of grant, be subject to the terms and conditions of the Company’s standard nonqualified stock option agreement under the Company’s 2014 Stock Plan and vest on a pro-rata basis over three years. The Sign-On RSUs will be subject to the Company’s standard restricted stock unit agreement under the 2014 Stock Plan and vest in full after 3 years of service. The Sign-On Options and Sign-On RSUs will also be subject to certain additional post-termination treatment as described below.

The employment agreement provides for certain other benefits, including reimbursement for professional fees incurred in negotiating and preparing the employment agreement (and related documents), and a one-time cash payment of $65,000 to cover Mr. Connolly’s expenses in establishing a residence in Omaha, Nebraska. Mr. Connolly will be entitled to use corporate aircraft in accordance with the terms of the Company’s standard time sharing agreement, with Mr. Connolly responsible for reimbursing the Company for costs specified therein in an amount exceeding $150,000 in any fiscal year. In addition, the Company agrees under the employment agreement to pay attorneys’ and accountants’ fees and expenses incurred by Mr. Connolly in enforcing his rights under the employment agreement or any other compensation-related plan, agreement or arrangement with the Company, unless his claim is found to be frivolous.

If, prior to August 1, 2018, Mr. Connolly’s employment is terminated by the Company without “Cause,” or Mr. Connolly terminates his employment for “Good Reason,” as each such term is defined in the employment agreement, Mr. Connolly will be entitled to receive a lump sum payment equal to two times the sum of his base salary and target annual bonus, a lump sum payment equal to a pro-rated portion of his annual bonus for the year of termination based on the performance of the Company for that year and Mr. Connolly’s length of service during the year (“Pro-Rated Bonus”), and certain vested benefits under compensation and benefit plans maintained by the Company. In addition, the unvested portions of the Sign-On Options and the Sign-On RSUs will fully vest, and if applicable, become exercisable, and any vested Sign-On RSUs will be settled, without regard to any minimum holding period that may be included in the award agreements governing such awards. Any vested Sign-On Options will remain exercisable for three years following such termination of employment. Further, any unvested stock options awarded with respect to the fiscal 2016 to 2018 performance period under the Long-Term Incentive Plans will become vested on a pro-rata basis based on the number of days Mr. Connolly was employed during the applicable vesting period.

If Mr. Connolly’s employment terminates as a result of death or “Permanent Disability,” as defined in the employment agreement, Mr. Connolly will receive an annual bonus consistent with the disability provisions of the Company’s annual incentive program in effect at the time of his termination of employment (but not less than the Pro-Rated Bonus), and certain vested benefits under compensation and benefit plans maintained by the Company. Severance compensation in the event of Permanent Disability, termination by the Company without Cause, or termination by Mr. Connolly for Good Reason, will generally be subject to Mr. Connolly’s execution of a general release of claims against the Company.

Mr. Connolly also may terminate his employment under the employment agreement without Good Reason, and the Company may terminate his employment for Cause. If Mr. Connolly voluntarily terminates his employment without Good Reason, or the Company terminates his employment for Cause, Mr. Connolly will be entitled to receive only unpaid based salary to the month of termination, accrued but unused vacation pay, unreimbursed business expenses incurred prior to termination, and certain vested benefits under compensation and benefit plans maintained by the Company.

Under the employment agreement, the Company generally agrees to indemnify and defend Mr. Connolly in the event that certain proceedings arise relating to his prior employment, subject to limitations as described in the employment agreement. The terms of the employment agreement also provide that upon the termination of Mr. Connolly’s employment for any reason, he will refrain from being an executive officer, board member, 5% or greater owner or partner, or employee of a food company that materially competes with the Company and has annual revenues over $1 billion.

On February 12, 2015, the Company also entered into a change of control agreement with Mr. Connolly to provide Mr. Connolly with compensation should his employment with the Company be terminated under certain defined circumstances following a “Change of Control,” as defined in the change of control agreement. In the event of a Change of Control, Mr. Connolly will be entitled to the enhanced benefits set forth in the change of control agreement instead of those otherwise described above in the event of a termination by the Company without “Cause,” or a “Good Reason Termination” by Mr. Connolly. Mr. Connolly’s change of control agreement will become effective as of Mr. Connolly’s commencement of employment with the Company on March 3, 2015.

The change of control agreement is considered to be a double trigger arrangement where the payment of severance compensation is predicated upon the occurrence of two triggering events:

 

  •   the occurrence of a Change of Control; and

 

  •   the involuntary termination of Mr. Connolly (other than for “Cause,” as defined in the change of control agreement) or Mr. Connolly’s “Good Reason Termination” of employment with the Company, as defined in the change of control agreement.

If a Change of Control occurs during the term of the change of control agreement, the change of control agreement provides for a three-year period during which Mr. Connolly will receive the stated benefits upon an involuntary termination (other than for Cause) or a Good Reason Termination. Mr. Connolly’s severance benefits consist of (subject to the execution of a general release of claims against the Company):

 

  •   a lump sum payment in an amount equal to three times the sum of (1) Mr. Connolly’s highest annual base salary as of (or following) the Change of Control plus (2) the greater of (A) the highest annual cash bonus paid to Mr. Connolly for the 3 full fiscal years preceding the fiscal year in which the Change of Control occurs, or (B) 150% of Mr. Connolly’s annual base salary for the year in which the Change of Control occurs;

 

  •   the continuation of certain welfare benefits for two years following the date of termination or, with respect to certain benefits, a lump sum payment equal to the present value of the cost of such coverage during such two-year period;

 

  •   if Mr. Connolly participates in the Company’s Non-Qualified ConAgra Retirement Income Savings Plan (“Non-Qualified CRISP”), a supplemental credit to Mr. Connolly’s Non-Qualified CRISP “Account” equal to the maximum employer contribution that he could have received under the Non-Qualified CRISP and the Company’s ConAgra Foods Retirement Income Savings Plan for the year of termination;

 

  •   reasonable outplacement assistance through the end of the second calendar year beginning after the date of termination from a professional outplacement assistance firm which is reasonably suitable to Mr. Connolly and commensurate with his position and responsibilities, up to a maximum cost of $30,000; and

 

  •   accrued but unpaid salary and certain accrued benefits under the Company’s benefits and compensation plans.

In addition, if certain requirements under the Internal Revenue Code are met, the Company may pay pro-rated amounts to Mr. Connolly representing all or a portion of his short term or long term incentive for the year in which the Change of Control occurs.

Payments and benefits under the change of control agreement (as well as under all other agreements or plans covering Mr. Connolly) are subject to reduction in order to avoid the application of the excise tax on “excess parachute payments” under the Internal Revenue Code, but only if the reduction would increase the net after-tax amount received by Mr. Connolly.

The change of control agreement generally will expire on the earlier of the date of Mr. Connolly’s termination as a full time employee of the Company and the date Mr. Connolly enters into a written separation agreement with the Company, but if a Change of Control has not occurred, the Company may also terminate the agreement at any time on six months’ prior written notice; provided that if a Change of Control occurs during the term of the change of control agreement, the change of control agreement term will expire on the third anniversary of such Change of Control. In addition, the Company agrees to pay all reasonable expenses (including attorneys’ fees and legal expenses) incurred by Mr. Connolly in enforcing his rights under the change of control agreement.

The foregoing description of Mr. Connolly’s employment agreement and change of control agreement does not purport to be complete, and is qualified in its entirety by reference to the full text of the employment agreement and change of control agreement, copies of which are filed as Exhibits 10.2 and 10.3 hereto, respectively, and are incorporated herein by reference.

The press release issued by the Company on February 12, 2015 announcing Mr. Connolly’s appointment and Mr. Rodkin’s retirement is attached as Exhibit 99.1 to this Current Report on Form 8-K and incorporated herein by reference.

Retirement of Principal Executive Officer

Mr. Rodkin will continue to serve as the Company’s principal executive officer until the April Effective Date. As of the April Effective Date, Mr. Rodkin will step down from his current position as the Company’s President and Chief Executive Officer. From the April Effective Date until May 31, 2015, Mr. Rodkin will provide services to the Company as Special Advisor, reporting to the Chairman of the Board (such period of service, the “Transition Period”). Also as of the April Effective Date, Mr. Rodkin will formally resign from the Board. As Special Advisor, Mr. Rodkin will provide certain services to the Company with respect to the Company’s transition to a new Chief Executive Officer. Effective as of May 31, 2015, Mr. Rodkin will cease serving as Special Advisor and retire from service with the Company.

During the Transition Period, Mr. Rodkin will continue to receive a base salary at the rate of $1,100,000 per year and his participation in the Company’s incentive and benefit plans and programs shall continue to be governed by the terms thereof, his amended and restated employment agreement and a letter agreement entered into between the Company and Mr. Rodkin on February 12, 2015.

The letter agreement entered into between Mr. Rodkin and the Company, which is effective upon Mr. Connolly’s commencement of employment with the Company, provides that Mr. Rodkin is entitled to a fiscal 2015 annual cash incentive bonus at least equal to the funding level approved by the Committee for members of the Company’s senior leadership team generally. In addition, under the letter agreement, the Company will make monthly payments to Mr. Rodkin during the Transition Period such that the after-tax value of such payments is sufficient to cover the cost of premiums associated with his continuing medical and dental benefits under the Consolidated Omnibus Budget Reconciliation Act. During the Transition Period, Mr. Rodkin’s services to the Company may be terminated by Mr. Rodkin or by the Company with or without “Cause” (as defined in the amended and restated employment agreement) or “Good Reason” (as defined in the letter agreement), as applicable. However, in the event of certain qualifying terminations of employment, Mr. Rodkin would be entitled to severance compensation as set forth in his amended and restated employment agreement. As of February 12, 2015, Mr. Rodkin’s change of control agreement with the Company terminated in accordance with its terms.

The foregoing description of the letter agreement does not purport to be complete and is qualified in its entirety by reference to the letter agreement, a copy of which is filed as Exhibit 10.4 hereto and is incorporated herein by reference. Mr. Rodkin’s amended and restated employment agreement has been previously filed with the SEC as Exhibit 10.15 to the Company’s Quarterly Report on Form 10-Q filed on November 23, 2008, and the material terms of retirement-related provisions in Mr. Rodkin’s amended and restated employment agreement and the Company’s other compensation arrangements are described in the Company’s Definitive Proxy Statement on Schedule 14A filed with the SEC on August 8, 2014, which such amended and restated employment agreement and description are incorporated herein by reference.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

Exhibit 10.1 CEO Performance Share Plan for Transitional Awards.

Exhibit 10.2 Employment Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Sean Connolly.

Exhibit 10.3 Change of Control Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Sean Connolly.

Exhibit 10.4 Letter Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Gary M. Rodkin.

Exhibit 99.1 Press Release issued February 12, 2015.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    CONAGRA FOODS, INC.
Date: February 12, 2015        
    By:  

/s/ Colleen Batcheler

      Name:   Colleen Batcheler
      Title:   Executive Vice President, General Counsel and Corporate Secretary

Exhibit Index

 

Exhibit 10.1    CEO Performance Share Plan for Transitional Awards.
Exhibit 10.2    Employment Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Sean Connolly.
Exhibit 10.3    Change of Control Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Sean Connolly.
Exhibit 10.4    Letter Agreement, dated as of February 12, 2015, between ConAgra Foods, Inc. and Gary M. Rodkin.
Exhibit 99.1    Press Release issued February 12, 2015.

Exhibit 10.1

CONAGRA FOODS, INC.

CEO PERFORMANCE SHARE PLAN FOR TRANSITIONAL AWARDS

Effective February 12, 2015, ConAgra Foods, Inc. (“Company”) hereby adopts the ConAgra Foods, Inc. CEO Performance Share Plan for Transitional Awards (“Plan”). Unless the context implies otherwise, capitalized terms used in this Plan have the meanings set forth in Section 16 below.

1. Purpose . 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 Performance Shares, (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.

2. Eligibility . The only persons eligible to participate in the Plan shall be those Participants selected by the Committee.

3. Participation . No later than 90 days after the commencement of each Performance Period, the Committee shall select the individuals, if any, who shall participate in the Plan for the applicable Performance Period. The Committee shall assign a targeted number of Performance Shares to each selected Participant for the Performance Period. Notwithstanding the preceding, the Committee may select additional Participants during the Performance Period and make an award to such Participants; provided, however, that no such additional Participant shall be a Covered Employee (or an employee who is expected to be a Covered Employee by the time of payment of the Performance Shares) unless such additional Participant’s award does not begin until the next succeeding fiscal year, or such additional Participant’s award is a General Award.

4. Grant of Awards – Establishment of Performance Goals .

 

  4.1 No later than 90 days after the commencement of each Performance Period, the Committee shall establish an award schedule that sets forth a range of Performance Targets and the related Performance Shares that may be earned by each Participant. The Committee may establish different award schedules for different Participants and/or groups of Participants and/or for different executive levels.

 

  4.2 Unless the Committee determines otherwise with respect to any General Award or Qualified Performance-Based Award, the range of Performance Targets that shall determine the Performance Shares earned shall be based upon Company diluted earnings per share (EPS), Company earnings before interest and taxes (EBIT) and Company return on average invested capital (ROAIC) measured over the Performance Period, each as defined in the definition section at the end of this Plan.

5. Administration of the Plan . The Plan shall be administered by the Committee. 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 interest 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. The Committee has full authority to construe and interpret the Plan and any instruments evidencing an award under the Plan. 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. Subject to the terms and conditions of this Plan, the Committee shall determine the Participants to whom awards are granted and the terms and conditions of such awards. The Committee may require each individual earning an award under the Plan to enter into an agreement with the Company regarding the terms of the award and the employee’s employment. Except to the extent prohibited by applicable law or the applicable rules of a stock exchange, the Committee may delegate all or any portion of its responsibilities and powers to any one or more of its members.

6. Earning of Awards .

 

  6.1 Within 60 days after the end of each Performance Period, for each award that has been made subject to a Performance Target, the Committee shall determine whether, and to what extent, the Performance Target for such Performance Period has been satisfied.

 

  6.2 With respect to any Performance Target applicable to a Qualified Performance-Based Award, no Performance Shares will be delivered or considered earned until the Committee has made a final written certification that a Performance Target established to ensure Code Section 162(m) compliance has been satisfied. In addition, prior to delivering the Performance Shares, the Committee shall complete the exercise of its Negative Discretion, if desired.

 

  6.3

In determining satisfaction of any Performance Target, the Committee shall measure performance in accordance with United States generally accepted accounting principles, if applicable; provided that, the Committee may determine whether to include or exclude any material changes that occur during an applicable Performance Period, including, without limitation: (a) asset write-downs; (b) litigation or claim adjudication, judgments or settlements; (c) the effect of changes in tax or accounting standards or principles, or other laws, regulations or provisions affecting reported results; (d) changes in business, operations, corporate or capital structure; (e) extraordinary, unusual and/or nonrecurring items; (f) mergers, acquisitions or divestitures; and (g) foreign exchange gains and losses. In addition, the Committee may adjust any Performance Target for the Performance Period as it deems equitable to recognize unusual or non-recurring events affecting the Company, changes in tax laws or accounting procedures, mergers and acquisitions and any other factors as the Committee may determine. In the case of Qualified Performance-Based Awards, such exclusions and adjustments may only apply to the extent the Committee specifies in writing (not later than the time Performance Targets are required to be established) which exclusions and adjustments the Committee will apply to determine whether a Performance Target has been satisfied, as well as an

 

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  objective manner for applying them, or to the extent that the Committee determines that they may apply without adversely affecting the award’s status as a Qualified Performance-Based Award.

 

  6.4 If applicable tax and/or securities laws change to permit Committee discretion to alter the governing performance measures without obtaining stockholder approval of such changes, the Committee shall have sole discretion to make such changes without obtaining stockholder approval. In addition, in the event that the Committee determines that it is advisable to grant General Awards, the Committee may make such grants without satisfying the requirements of Code Section 162(m).

7. Distribution of Performance Shares Earned . Except as provided in Section 8, Performance Shares earned hereunder shall be paid (i) after the end of the Performance Period, (ii) after the Committee has certified in writing that the material terms of this Plan were satisfied and that awards were accurately computed according to the terms of the Plan, and (iii) on or before the later of (a) the fifteenth day of the third month that begins after the month containing the end of the Performance Period or (b) the fifteenth day of the third month that begins after the end of the Participant’s tax year in which the end of the Performance Period occurs. All awards of Performance Shares hereunder, including dividend equivalent payments, shall be paid in shares of Stock, with any fractional share equal to or greater than one-half share rounded up to the next whole share and any fractional share less than one-half share rounded down to the next whole share.

8. Termination of Employment

 

  8.1 Termination for Reasons Other Than Death, Disability or Retirement . A Participant who terminates employment with the Company and its Subsidiaries for any reason other than death, Disability or Retirement shall forfeit all awards hereunder that have not been paid at the date of termination, whether earned or not. Notwithstanding the preceding, if the Committee in its sole and absolute discretion deems it to be appropriate and in the best interest of the Company, the Committee may distribute Stock for all or some of the Performance Shares that are forfeited by a Participant (but only, in the case of a Qualified Performance-Based Award, to the extent the award has been certified by the Committee to have been earned). Such Performance Shares shall be distributed to the Participant at the time when they would have been distributed pursuant to Section 7 (or, if applicable, Section 10) had the Participant remained employed with the Company through such time of distribution.

 

  8.2

Disability or Retirement . In the event of a Participant’s termination due to Disability or Retirement, a distribution shall be made of a pro rata share of the Performance Shares that would have been earned for the full performance period (but only, in the case of a Qualified Performance-Based Award, to the extent the award has been certified by the Committee to have been earned), prorated based upon the full number of fiscal years completed during the Performance Period as of the Participant’s termination date. Such Performance Shares shall be

 

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  distributed to the Participant at the time when they would have been distributed pursuant to Section 7 (or, if applicable, Section 10) had the Participant remained employed with the Company through such time of distribution.

 

  8.3 Death . In the event of a Participant’s death, a distribution shall be made of a pro rata share of the targeted Performance Shares, based upon the full number of years completed during the Performance Period. The payment shall be made within 2  1 ⁄ 2 months after the date of death.

9. Dividends and Voting Rights . Upon the payment of earned Performance Shares, the Participants shall receive additional shares of Stock representing dividend equivalents. The amount of dividend equivalents for each Performance Share earned shall equal the dividends paid on one share of Stock during the period between the beginning of the Performance Period and the date of distribution. A Participant shall not have voting or any other rights with respect to any Performance Shares or with respect to the Stock until the Stock is delivered to the Participant.

10. Payments Upon Change of Control . Upon a Change of Control, the Company may, at the Board’s, or the Human Resources Committee’s, as the case may be, sole and absolute discretion, pay the Participant all or a portion of the Participant’s award hereunder. The amounts paid may be based upon (a) a proration of the Participant’s target Performance Shares, (b) a proration of the projected Performance Shares at the time of the Change of Control, or (c) a pro rata amount computed at the end of the fiscal year. Any proration shall be based upon the number of completed months elapsed in the Performance Period through the date of the Change of Control. Any payments made under this Section 10 shall be paid no later than the fifteenth day of the third month that begins after the later of (i) the end of the Participant’s tax year in which the Change in Control occurs or (ii) the end of the Company’s fiscal year in which the Change in Control occurs.

11. Related Plans . Subject to the terms and conditions hereof, Qualified Performance-Based Awards shall be made pursuant to the ConAgra Foods, Inc. 2014 Executive Incentive Plan (“EIP”) or any successor incentive plan approved by the Company’s stockholders, and to the extent necessary for compliance with Code Section 162(m) for the tax deductibility of an award, the provisions of the EIP shall apply to the awards hereunder. Awards earned and Stock distributed hereunder shall be deemed granted and distributed under the ConAgra Foods 2014 Stock Plan (“Stock Plan”) or any successor stock plan approved by the Company’s stockholders. To the extent not inconsistent with the provisions of this Plan, the provisions of the Stock Plan shall apply to this Plan and the awards hereunder.

12. Miscellaneous Provisions .

 

  12.1 Nontransferability of Awards . Except as otherwise provided by the Committee, no awards granted under the Plan may be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution.

 

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  12.2 Beneficiary Designation . Each Participant under the Plan may from time to time name any beneficiary or beneficiaries (who may be named contingent or successively) to whom any benefit under the Plan is to be paid or by whom any right under the Plan is to be exercised in case of his death. Each designation will revoke all prior designations by the same Participant, shall be in a form prescribed by the Committee, and will be effective only when filed in writing with the Committee. In the absence of any such designation, awards outstanding at death will be paid to the Participant’s surviving spouse, if any, or otherwise to the Participant’s estate.

 

  12.3 No Guarantee of Employment or Participation . Nothing in the Plan shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor confer upon any individual any right to continue in the employ of the Company or any Subsidiary. No employee shall have a right to be selected as a Participant, or, having been so selected, to receive any future awards or to continue as a Participant.

 

  12.4 Tax Withholding . The Company shall have the power to withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy federal, state, and local withholding tax requirements on any award under the Plan, and the Company may defer issuance of Stock until such requirements are satisfied. In the alternative, the Committee may withhold shares of Stock that would otherwise be delivered to the Participant, having an aggregate fair market value, determined as of the date the obligation to withhold or pay taxes arises in connection with a distribution, in the amount necessary to satisfy the minimum applicable withholding obligation.

 

  12.5 Agreements with Company . An award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee may, in its sole and absolute discretion, prescribe. The terms and conditions of any award to any Participant shall be reflected in such form of written document as is determined by the Committee or its designee.

 

  12.6 Code § 409A . Unless the Committee expressly determines otherwise, Performance Shares are intended to be exempt from Code Section 409A as short-term deferrals and, accordingly, the terms of any Performance Shares award shall be construed to preserve such exemption. To the extent the Committee determines that Code Section 409A applies to a particular award granted under the Plan, then the terms of the award shall be construed to permit the award to comply with Code Section 409A. In the event that the Plan or any award shall be deemed not to comply with Code Section 409A, then neither the Company, the Committee, the Board nor its or their designees or agents shall be liable to any Participant or other persons for actions, decisions or determinations made in good faith.

 

  12.7 Unfunded Plan . The plan shall be unfunded and no trust is required to be established with respect to the Plan. Bookkeeping accounts may be established with respect to Participants who are granted Performance Shares under the Plan, but any such accounts shall be used merely as a bookkeeping convenience.

 

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  12.8 Requirements of Law . The granting of Performance Shares and the issuance of shares of Stock shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or securities exchanges as may be required.

 

  12.9 Changes in Stock . In the event of any change in the outstanding Stock by reason of any share dividend or split, recapitalization, merger, consolidation, spin-off reorganization, combination or exchange of shares, or other similar corporate change, then the Committee shall adjust the number or kind of Performance Shares or target Performance Shares of a Participant or the measures of performance. Any such adjustments shall be conclusive and binding for all purposes of the Plan. The Committee shall have full and final discretion to determine the manner in which such adjustment(s) are made.

 

  12.10 Facility of Payments . If a Participant shall, at the time payment of an amount is due, be incapacitated so that he cannot legally receive or acknowledge receipt of the payment, then the Committee, in its sole and absolute discretion, may direct that the payment be made to the legal guardian, attorney-in-fact or person with whom such recipient is residing, and such payment shall be in full satisfaction of the Company’s obligation under the Plan with respect to such amount.

 

  12.11 Governing Law . The Plan shall be construed and its provisions enforced and administered in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of laws, and in accordance with applicable federal laws.

 

  12.12 Gender and Number . Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and words in the plural shall include the singular.

 

  12.13 Severability . If any provision of the Plan shall be held illegal or invalid for any reason, such illegality or invalidity shall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision had not been included.

 

  12.14 Binding Effect . The Plan shall be binding upon the Company, its successors and assigns, and Participants, their legal representatives, executors, administrators and beneficiaries.

13. Compliance with Code Section 162(m) . The Company intends that compensation under the Plan payable to Covered Employees will, to the extent practicable, constitute qualified “performance-based compensation” within the meaning of Code Section 162(m), unless otherwise determined by the Committee. Accordingly, the provisions of the Plan shall be administered and interpreted in a manner consistent with Code Section 162(m). If any provision of the Plan or any award that is granted to a Covered Employee does not comply or is inconsistent with the requirements of Code Section 162(m), such provision shall be construed or deemed amended to the extent necessary to conform to such requirements.

 

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14. Indemnification . In addition to such other rights of indemnification as they may have as directors or as members of the Committee or otherwise, the members of the Committee shall be indemnified by the Company against reasonable expenses, including attorneys’ fees, actually and necessarily incurred in connection with the defense of any action, suit or proceeding or in connection with any appeal therein, to which they or any of them may be a party by reason of any action taken or failure to act under or in connection with the Plan or any award granted thereunder, and against all amounts paid by them in settlement thereof, provided such settlement is approved by independent legal counsel selected by the Company, or paid by them in satisfaction of a judgment or settlement in any such action, suit or proceeding, except as to matters as to which the Committee member has been negligent or engaged in misconduct in the performance of his duties; provided, that within 60 days after institution of any such action, suit or proceeding, a Committee member shall in writing offer the Company the opportunity, at its own expense, to handle and defend the same.

15. Amendment or Termination of Plan . The Board may, in its sole and absolute discretion and from time to time, amend, modify or terminate any or all of the provisions of the Plan without providing any prior notice to Participants; provided , however , no amendment, modification or termination shall affect the rights of any Participant with respect to a previously granted award, without the written consent of the Participant. However, notwithstanding the foregoing, the Committee shall have unilateral authority to amend the Plan and any award, without participant consent, to the extent necessary to comply with applicable laws, rules or regulations or changes to applicable laws, rules or regulations (including but in no way limited to Code Sections 162(m) and 409A).

16. Definitions . Whenever used in this Plan, the following terms shall have the respective meanings set forth below:

 

  16.1 “Board” means the Board of Directors of the Company.

 

  16.2 “ Change of Control ” means:

 

  (i) Individuals who constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or

 

  (ii)

Consummation of a reorganization, merger, or consolidation, in each case, with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of

 

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  directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or a liquidation or dissolution of the Company or of the sale of all or substantially all of its assets.

 

  16.3 “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a particular Code section herein shall be deemed to include all related regulations, interpretations or other United States Department of Treasury guidance.

 

  16.4 “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.

 

  16.5 “Covered Employees” means a “covered employee” as defined in Code Section 162(m).

 

  16.6 “Disability” means that the Participant, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than twelve months, is receiving income replacement benefits for a period of not less than three months under the Company’s long-term disability plan.

 

  16.7 “EBIT” means earnings before interest and taxes. Unless determined otherwise by the Committee when granting an award, EBIT shall be calculated by adding (i) interest expense, net and (ii) income tax expense, to (iii) income from continuing operations, as adjusted for unusual items.

 

  16.8 “EPS” means diluted earnings per share from continuing operations, as calculated in accordance with U.S. GAAP.

 

  16.9 “General Award” means an award that is not a Qualified Performance-Based Award.

 

  16.10 “Negative Discretion” means the discretion that the Committee may exercise to reduce (but not increase) the amount of the award that otherwise would be payable in connection with the attainment of the Performance Target. This discretion may be applied in the event that exceptional circumstances arise which, in the judgment of the Committee, would result in payouts not consistent with the intentions of the Committee at the inception of the plan or would otherwise cause the plan to operate in a manner inconsistent with the best interests of the Company.

 

  16.11 “Participant” shall mean the Chief Executive Officer and any salaried employee of the Company who is chosen to participate in the Plan, as specified in Section 3.

 

  16.12 “Performance Period” means the period of at least one fiscal year for which the award is granted.

 

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  16.13 “Performance Shares” means an award granted under this Plan, in an amount determined by the Committee and specified in an award agreement, stated with reference to a specified number of shares of Stock, that entitles the holder to receive shares of stock, subject to the terms of the Plan, any award agreement, and any other terms and conditions established by the Committee.

 

  16.14 “Performance Target” means one or more specified performance goals that are used in determining awards and Performance Shares earned by Participants. In the case of Qualified Performance-Based Awards, the Performance Target that is intended to permit the award to satisfy the performance based exception to the deductibility limitation of Code Section 162(m) shall be stated as levels of, or growth or changes in, one or more of the performance criteria approved by the Company’s stockholders in the Executive Incentive Plan or any successor stockholder-approved plan (which currently include cash flow, free cash flow, operating cash flow, earnings, market share, economic value added, achievement of annual operating budget, profits, profit contribution margins, profits before taxes, profits after taxes, operating profit, return on assets, return on investment, return on equity, return on invested capital, gross sales, net sales, sales volume, stock price, total stockholder return, dividend ratio, price-to-earnings ratio, expense targets, operating efficiency, customer satisfaction metrics, working capital targets, the achievement of certain target levels of innovation and/or development of products, measures related to acquisitions or divestitures, formation or dissolution of joint ventures, corporate bond rating by credit agencies, debt to equity or leverage ratios, or financial performance measures determined by the Committee that are sufficiently similar to the foregoing as to be permissible under Code Section 162(m)). In the case of a General Award, the Committee may establish a Performance Target that is based on categories of performance that are different than those set forth above. If the Committee makes the opportunity to receive an award subject to a particular Performance Target, the Committee shall adopt or confirm a written definition of that Performance Target at the time the Performance Target is established, provided that the Committee retains the discretion to forgo such written definition in connection with a General Award. The Performance Target for an award may be described in terms of Company-wide objectives or objectives that are related to a specific division, subsidiary, business unit, department, region, or function. A Performance Target may be defined relative to the performance of other corporations. If more than one individual performance goal is specified by the Committee in defining a Performance Target, the Committee shall also specify, in writing, whether one, all or some other number of such goals must be attained in order for the Performance Target to be met.

 

  16.15 “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). At the time award opportunities and Performance Targets are established for a Performance Period, the Committee shall designate in writing any award opportunity that is intended to allow a Participant to receive (upon satisfaction of the Performance Target and subject to Negative Discretion) a Qualified Performance-Based Award. Any such designation is irrevocable.

 

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  16.16 “Retirement” means termination of employment from the Company or a Subsidiary on or after the earlier of (i) the Participant attains age 65, or (ii) the Participant has at least ten years of service and has attained age 55. For purposes of this Plan, years of service shall include any additional years of service provided to a Participant for pension purposes under the Company’s qualified or nonqualified retirement plan pursuant to the Participant’s written employment agreement with the Company or its Subsidiaries. If at the time of the Participant’s Retirement circumstances exist that would allow the Company to terminate the Participant for Cause, the Participant, for purposes of this Plan, shall be deemed to have terminated employment for purposes other than Death, Disability, or Retirement.

 

  16.17 “ROAIC” means the Company’s return on average invested capital, after tax. Unless determined otherwise by the Committee when granting an award, ROAIC shall be calculated by multiplying EBIT by 1 minus the Company’s tax rate and dividing this amount by average invested capital, all as adjusted for unusual items. Average invested capital is the twelve-month rolling average of total assets less cash and cash equivalents and non-interest bearing liabilities.

 

  16.18 “Stock” means the common stock of the Company, par value $5.00 per share.

 

  16.19 “Subsidiary” means any corporation, partnership, joint venture or other entity in which the Company owns, directly or indirectly, 25% or more of the voting power or of the capital interest or profits interest of such entity.

 

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Exhibit 10.2

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made by and between ConAgra Foods, Inc., a Delaware corporation (“Company”), and Sean M. Connolly (“Executive”), the 12th day of February, 2015, but with Executive’s employment hereunder commencing on March 3, 2015 (the “Agreement Date”).

The Board of Directors of Company (the “Board”) has determined that it is in the best interests of Company to obtain and retain the services of Executive. In order to accomplish this objective, the Board has caused Company to enter into this Agreement.

NOW, THEREFORE, it is agreed as follows:

 

  1. Term of Employment . Executive’s term of employment under this Agreement shall commence on the Agreement Date and continue in accordance with the terms hereof until a termination of Executive’s employment, in accordance with Section 5 below.

 

  2. Position, Location and Duties .

 

  2.1 Position . Executive will be Company’s CEO-elect as of the Agreement Date, reporting to the Chairman of the Board, and, subject to continued employment with the Company, will become President and Chief Executive Officer upon the later of (i) April 6, 2015 and (ii) the date immediately following the date upon which the Company’s Quarterly Report on Form 10-Q for the period ended February 22, 2015 is filed with the Securities and Exchange Commission. Company shall appoint Executive to Company’s Board as of his appointment as President and Chief Executive Officer, and will nominate him to the Board thereafter.

 

  2.2 Location . Executive shall maintain a primary home office located at Company’s headquarters in Omaha, Nebraska, at which he will be expected to work an average of three or more business days each week, unless on business travel. Executive also shall have an office at Company’s offices in Naperville, Illinois, at which he will work when not in Omaha or on business travel.

 

  2.3 Duties . Executive’s duties as CEO-elect shall be determined by the Chairman of the Board. Upon his appointment as President and Chief Executive Officer, Executive shall have the customary powers, responsibilities and authorities of such position in corporations of the size, type and nature of Company and as provided in Company’s by-laws, and Executive shall report to the full Board. Executive shall devote his full working time and efforts to the performance of the duties outlined above. Executive may, consistent with his duties hereunder, engage in charitable and community affairs, manage his personal investments and, subject to the prior approval of the Board, serve on the board of directors of other companies.

 

  3. Compensation .

 

  3.1 Base Salary . Company shall pay Executive a base salary (“Base Salary”) at the rate of $1,100,000 per annum. The Base Salary shall be payable in accordance with the ordinary payroll practices of Company. Executive’s rate of Base Salary shall be reviewed for possible increases by the Board at least annually, and any such increased amount shall become the Base Salary hereunder.

  3.2 Annual Incentive Bonus . Commencing with Fiscal Year 2016, Executive shall be entitled to receive an annual bonus under Company’s annual incentive plan (“Annual Incentive Program”) as approved by the Board or its Human Resources Committee (the “Committee”) for Executive. Executive’s target bonus opportunity under the Annual Incentive Program shall not be less than 150% of Executive’s Base Salary, and his maximum award opportunity shall be equal to 200% of the target bonus. The performance goals with respect to such target bonus opportunity shall be established annually by the Committee on a basis consistent with the establishment of such performance goals for other senior executive officers of Company.

 

  3.3 Long Term Senior Management Incentive Plans . Executive shall participate in Company’s 2014 Executive Incentive Plan, 2014 Stock Plan, 2008 Performance Share Plan and any other or successor incentive plan available from time to time to senior executive officers at levels determined by the Committee and commensurate with Executive’s position (each, a “Plan”). Each such Plan and any other equity-based or other incentive program under which Executive has received or receives long-term awards (other than this Agreement), are collectively referred to as the “LTSMIP”. Executive’s annual award target opportunity under the LTSMIP, for any three-year program adopted, shall be no less than $6.25 million. The translation of such target opportunity into a number of equity awards in any cycle shall be completed in a manner consistent with the current methodology approved by the Committee for use with all other senior executive officers of Company.

 

  3.3.1 Executive’s participation in the LTSMIP at his full target opportunity shall commence with the program adopted for the performance period beginning in Company’s 2016 fiscal year (the “Fiscal 2016-2018 Cycle”). The terms and conditions of Executive’s participation in the LTSMIP for the Fiscal 2016-2018 Cycle and any future cycles, including the composition of the award and any performance goals, shall be established by the Committee.

 

  3.3.2 Executive shall participate, on a modified basis, in the performance share component of the LTSMIP for the performance period beginning in Company’s 2015 fiscal year (the “Fiscal 2015-2017 Cycle”), at a target grant value of $2.09 million. Executive’s performance share grant with respect to the Fiscal 2015-2017 Cycle will be made on the first trading day of the first month following the Agreement Date. The terms and conditions of Executive’s participation in the LTSMIP for the Fiscal 2015-2017 Cycle shall be established by the Committee and, except with respect to the establishment of the applicable threshold performance targets, shall be materially consistent with the terms and conditions for the cycle applicable to all other senior executives of Company.

 

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  4. Other Benefits

 

  4.1 Employee Benefit Plans . Company shall provide Executive and his eligible dependents with coverage under all employee benefit programs, plans and practices, in accordance with the terms thereof, which Company makes available to senior executive officers (including qualified and non-qualified plans, provided that such plans are open to new participants as of the Agreement Date) in accordance with Company policies. This will include vacation benefits pursuant to the standard Company vacation policy, but not less than four weeks per calendar year. Relocation benefits are limited to those set forth in Section 4.2 hereof.

 

  4.2 Relocation . To assist with Executive’s establishment of a residence in Omaha, Nebraska, Company will provide Executive with a one-time, cash payment of $65,000, payable within thirty days of the Agreement Date.

 

  4.3 Change of Control Benefits . Executive and Company will enter into a Change of Control Agreement (the “Change of Control Agreement”) in the form provided to Executive. Change of control severance payments of base salary and annual bonus compensation under the Change of Control Agreement will be subject to a three times multiplier, as further described in the Change of Control Agreement. Any expiration of the Term (as provided below) shall not apply to the Change in Control Agreement, which shall continue in accordance with the terms thereof.

 

  4.4 Expenses . Executive is authorized to incur reasonable expenses in carrying out his duties under this Agreement, including expenses for travel and similar items related to such duties. Company shall reimburse Executive for all such expenses, subject to established Company policies. Additionally, Company shall reimburse Executive for professional fees incurred in the negotiation and preparation of this Agreement (and related documents), up to a maximum of $40,000.

 

  4.5 Other Benefits . Company’s senior executive security policy will apply to Executive, including use of corporate aircraft and appropriate home security in the form recommended by Company’s security personnel. Company acknowledges that Company and Executive will enter into an executive time sharing agreement relating to Executive’s personal use of Company-provided aircraft, to be effective as of the Agreement Date. Such time sharing agreement shall be in a form materially consistent with Company’s current form of time sharing agreement, provided, however, that reimbursement by Executive to Company in a fiscal year will commence once the incremental cost to Company (as defined therein) of Executive’s personal use exceeds $150,000. Any expiration of the Term (as provided below) shall not apply to the time sharing agreement, which shall continue in accordance with the terms thereof.

 

  4.6

Stock Ownership . Executive acknowledges, and agrees to comply with, Company’s executive stock ownership guidelines as they exist from time to time, and which currently prohibit Executive from selling any shares of Company common stock except (i) shares, the proceeds of which are used to pay taxes resulting from the

 

3

  vesting or exercise of options, and (ii) sales, so long as, immediately following such sale, Executive owns shares of Company common stock (as determined under Company’s stock ownership guidelines, as modified from time to time) with a value (as determined under Company’s stock ownership guidelines, as modified from time to time) at a level of at least six (6) times Executive’s annual Base Salary.

 

  4.7 Directors and Officers Liability Coverage . Executive shall be entitled to the same coverage under Company’s directors and officers liability insurance policies as is available to senior executive officers and directors with Company. In any event, Company shall indemnify and hold Executive harmless, to the fullest extent permitted by the laws of the State of Delaware, from and against all costs, charges and expenses (including advancement of reasonable attorneys’ fees) incurred or sustained in connection with any action, suit or proceeding to which Executive or his legal representatives may be made a party by reason of Executive’s being or having been a director or officer of Company or any of its affiliates or employee benefit plans. The provisions of this Section 4.7 shall not be deemed exclusive of any other rights to which Executive seeking indemnification may have under any by-law, agreement, vote of stockholders or directors, or otherwise. The provisions of this Section 4.7 shall survive the termination and expiration of this Agreement for any reason, and continue for the duration of Executive’s employment or service as a member of the Board in accordance with the terms of this Section 4.7, including any acts and omissions to act occurring after the termination or expiration of this Agreement.

 

  4.8 Reimbursement and In-Kind Benefit Rules . Any reimbursements or in-kind benefits to be provided pursuant to this Agreement (including but not limited to Sections 4.2, 4.4, 4.5, and 8) that are taxable to Executive shall be subject to the following restrictions: (i) each reimbursement or in-kind benefit must be paid or provided, as applicable, no later than the last day of the calendar year following Executive’s tax year during which the expense was incurred as the case may be; (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a tax year of Executive may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other tax year of Executive; (iii) the period during which any reimbursement may be paid or in-kind benefit may be provided is the later of ten years after termination of this Agreement or in the case of reimbursements related to expenses, the expiration of all applicable statutes of limitation for the collection of such expenses; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

  4.9 Sign-On Equity . Executive shall be granted sign-on equity in the form of two grants, (i) a one-time sign-on grant of 600,000 stock options (the “Sign-On Options”) and (ii) a one-time sign-on grant with an additional value of $1,600,000 in restricted stock units (the “Sign-On RSUs”).

 

  4.9.1

Except as otherwise provided herein, the Sign-On Options will be subject to the terms and conditions of Company’s standard nonqualified stock option agreement adopted under Company’s 2014 Stock Plan and vest pro-rata over three (3) years, subject to continued employment and other terms set forth in

 

4

  the nonqualified stock option agreement. The Sign-On Options will have a strike price equal to the closing price of Company’s common stock as reported on the New York Stock Exchange as of the date of the grant, which shall be the first trading day of the first month following the Agreement Date.

 

  4.9.2 Except as otherwise provided herein, the Sign-On RSUs will be subject to the terms and conditions of Company’s standard restricted stock unit agreement adopted under Company’s 2014 Stock Plan (which will provide for dividend equivalent rights) and vest in full, in the manner of cliff vesting, after three (3) years, subject to continued employment and other terms set forth in the restricted stock unit agreement. The Sign-On RSUs will be granted on the first trading day of the first month following the Agreement Date, with the number of restricted stock units granted determined by dividing $1,600,000 by the average of the closing market price of a share of Company’s common stock on the NYSE for the 30 trading days preceding, but not including, the date of grant.

 

  5. Separation from Service . The term of this Agreement shall commence on the Agreement Date and continue through August 1, 2018, unless earlier terminated in accordance with the terms of this Section 5 (the “Term”). In the event this Agreement is not earlier terminated by either party prior to August 1, 2018, this Agreement shall expire and Executive shall become an at-will employee (with Sections 6, 8, 11, 12, 13 and 14 surviving and Sections 4.3, 4.5, and 4.7 surviving in accordance with their terms). During the Term, Company may terminate Executive’s employment at any time for any reason, and Executive may terminate his employment at any time with or without Good Reason, subject to the terms of this Section 5. For purposes of this Section 5, the following terms shall have the following meanings:

 

  5.1 “Cause” shall be limited to (i) the willful and continued failure by Executive to substantially perform Executive’s duties with Company (other than any such failure resulting from termination by Executive for Good Reason) after a demand for substantial performance is delivered to Executive that specifically identifies the manner in which Company believes that Executive has not substantially performed Executive’s duties, and Executive has failed to resume substantial performance of Executive’s duties on a continuous basis within five (5) days of receiving such demand, (ii) the willful engaging by Executive in conduct which is demonstrably and materially injurious to Company, monetarily or otherwise, or (iii) Executive’s conviction of a felony or conviction of a misdemeanor which impairs Executive’s ability substantially to perform his duties with Company. For purposes of this subsection, no act, or failure to act, on Executive’s part shall be deemed “willful” unless done, or omitted to be done, by Executive not in good faith and without reasonable belief that the Executive’s action or omission was in the best interest of Company.

 

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  5.2 “Good Reason” shall mean a termination of employment initiated by Executive upon one or more of the following occurrences: (i) any failure of Company to comply with and satisfy any of the terms of this Agreement; (ii) any significant involuntary reduction of the authority, duties or responsibilities held by Executive once appointed as President and Chief Executive Officer; (iii) any involuntary removal of Executive from the position of President and Chief Executive Officer (following his appointment to such position) or involuntary removal of Executive from (or failure to re-nominate Executive to) the Board; (iv) any involuntary reduction in the aggregate compensation level of Executive including, but not limited to, Base Salary, annual and long term incentive opportunity, and retirement plans, as in effect as of the Agreement Date; (v) requiring Executive to become based at any office or location more than the minimum number of miles required by the Internal Revenue Code for Executive to claim a moving expense deduction, from either Executive’s Omaha or Naperville office locations, except for travel reasonably required in the performance of the Executive’s responsibilities; and (vi) Executive being required to undertake business travel to an extent substantially greater than the Employee’s business travel obligations as of the date on which he begins serving as President and Chief Executive Officer; provided , however , that no termination shall be deemed to be for Good Reason unless (A) Executive provides Company with written notice setting forth the specific facts or circumstances constituting Good Reason within ninety days after his knowledge of the initial existence of the occurrence of such facts or circumstances, and (B) Company has failed to cure such facts or circumstances within thirty days of its receipt of such written notice.

 

  5.3 “Permanent Disability” shall mean Executive is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than twelve (12) months, receiving income replacement benefits for a period of not less than three (3) months under Company’s long-term disability plan.

 

  5.4 “Separation from Service”, “termination of employment” and similar references shall mean the date that Executive’s employment with Company terminates under circumstances that constitute a separation from service within the meaning of Internal Revenue Code (“Code”) Section 409A and the Treasury Regulations relating thereto (“Section 409A”). Generally, Executive will incur a Separation from Service if Executive dies, retires, or otherwise has a termination of employment with Company, determined in accordance with the following:

 

  5.4.1

Termination of Employment . Whether Separation from Service has occurred is determined based on whether the facts and circumstances indicate that Company and Executive reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services Executive would perform after such date would permanently decrease to no more than twenty (20) percent of the average level of bona fide services performed over the immediately preceding thirty six (36) month period (or the full period of services to Company if Executive has been providing services to Company less than thirty six (36) months). For periods during which Executive is on a paid “bona fide leave of absence” (as described under Section 409A) and has not otherwise terminated employment, for purposes of this subsection Executive is treated as providing bona fide services at a level

 

6

  equal to the level of services that Executive would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which Executive is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subsection (including for purposes of determining the applicable thirty six (36) month (or shorter) period).

 

  5.4.2 Service with Related Companies . For purposes of determining whether a Separation from Service has occurred under the above provisions, the “Company” shall include Company and all Related Companies.

 

  5.4.3 “Related Companies” shall mean: (i) any corporation that is a member of a controlled group of corporations (as defined in Code Section 414(b)) that includes Company; and (ii) any trade or business (whether or not incorporated) that is under common control (as defined in Code Section 414(c)) with Company. For purposes of applying Code §§ 414(b) and (c), 25% is substituted for the 80% ownership level.

 

  5.5 Termination Upon Death or Permanent Disability . In the event of a Separation from Service during the Term by reason of Executive’s death or Permanent Disability, (i) Executive’s Base Salary shall be paid to Executive or his estate (as applicable) through the month of Separation from Service, together with any accrued, but unused, vacation pay and any unreimbursed business expenses incurred through the date of Separation from Service and substantiated in accordance with Section 4.4, (ii) Executive shall be paid an annual bonus consistent with the disability provisions of the Annual Incentive Program in place at the time of the Separation from Service, but in no case less than a pro rata annual bonus for the fiscal year in which the Separation from Service occurs based on (x) the number of days employed during the fiscal year and (y) the actual achievement of applicable financial performance targets (determined without any exercise of negative discretion inconsistent with any such exercise respecting other executives), which amount (if any) will be paid when annual bonuses for such year are paid to other executives; (iii) all deferred compensation (not including retirement benefits) shall be paid to Executive, Executive’s estate, or his designated beneficiary (as applicable) in accordance with the terms of such deferred compensation (the items in (i), (ii), and (iii) above are collectively referred to as the “Accrued Benefits”), and (iv) Executive, Executive’s estate, or his designated beneficiary (as applicable) shall receive unpaid vested benefits in accordance with the relevant terms of any retirement, equity compensation, or other employee benefit plan or program in which Executive was a participant.

 

  5.6

Termination Without Cause or for Good Reason During Term . If there is a Separation from Service during the Term initiated by Company without Cause, or resulting from Executive initiating a Separation from Service with Good Reason, (i) Executive shall receive all Accrued Benefits, except that the pro-rata bonus shall be without regard to the disability provisions of the Annual Incentive Program in place at the time of the Separation from Service, (ii) Executive shall receive a payment in lump sum in an amount equal to two times (2x) the sum of Executive’s (A) Base Salary plus (B) an

 

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  amount equal to the value of Executive’s target annual bonus for the year in which the Separation from Service occurs, (iii) notwithstanding anything to the contrary in any applicable equity award agreement or similar document (“Award Agreement”), (X) the unvested portions (if any) of the Sign-On Options and Sign-On RSUs will become fully vested and, if applicable, exercisable, without regard to any applicable minimum vesting period or minimum holding period, (Y) the Sign-On RSUs (together with any dividend or dividend equivalents that have accumulated with respect to such restricted stock units) will be settled on the date of such Separation from Service in the form provided in the applicable Award Agreement, and (Z) the Sign-On Options, to the extent exercisable as of the date of such Separation from Service, will remain exercisable for three (3) years following such Separation from Service; (iv) the unvested portion of stock options awarded with respect to the Fiscal 2016-2018 Cycle will become vested and exercisable on a pro-rata basis, based on the number of days employed during the applicable vesting period relative to the total number of days constituting the vesting period; and (v) Executive shall receive unpaid vested benefits in accordance with the relevant terms of any retirement, equity compensation or other employee benefit plan or program in which Executive was a participant. Except as otherwise provided in the preceding sentence, any equity awards granted to Executive will remain subject to the terms and conditions of the applicable Award Agreements and the equity or incentive compensation plans under which they shall have been granted.

 

  5.7 Termination With Cause or Without Good Reason . If during the Term there is a Separation from Service initiated by Company with Cause, or resulting from Executive voluntarily initiating a Separation from Service without Good Reason, then (i) Executive shall be paid the Base Salary through the month of termination, together with any accrued, but unused, vacation pay and any unreimbursed business expenses incurred through the date of Separation from Service and substantiated in accordance with Section 4.4 and (ii) Executive shall receive unpaid vested benefits in accordance with the relevant terms of any retirement, equity compensation, or other employee benefit plan or program in which Executive was a participant.

 

  5.8 Timing of Payments . Subject to Section 5.8 below and any applicable deferral election, all cash payments required hereunder following death, Permanent Disability or any other Separation from Service shall be made on the sixty-first day following such Separation from Service, unless otherwise provided in an applicable retirement, equity compensation or other benefit plan or program of Company. Any payments made pursuant to a Separation from Service upon Permanent Disability under Section 5.5 or pursuant to Section 5.6 not required by law in the absence of this Agreement are conditioned on Executive having first signed a release agreement in a form provided by Company (and not imposing any post-termination restrictive covenants on Executive other than an affirmation of those such covenants entered into by Executive and Company prior to the date thereof) and the release becoming irrevocable by its terms within sixty (60) calendar days following the date of Executive’s Separation from Service.

 

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  5.9 Six Month Wait . Notwithstanding anything contained in this Agreement to the contrary, to the extent necessary to comply with Code Section 409A(a)(2)(B)(i), if Executive is a “specified employee” (determined in accordance with Code Section 409A and Treasury Regulation Section 1.409A-3(i)(2)) as of the date of Separation from Service (other than a Separation from Service due to death), then any payment, benefit or entitlement provided for in this Agreement that is payable by reference to the date of Executive’s Separation from Service during the first six months following the date of Separation from Service shall be paid or provided to Executive in a lump sum cash payment to be made on the earlier of (a) Executive’s death or (b) the first business day (or within 30 days after such first business day) of the seventh calendar month immediately following the month in which the date of Separation from Service occurs. If any payment is delayed pursuant to this Section 5.8, Company shall pay interest at the rate described below on the postponed payments from the date the payment would have been due but for this Section 5.8 to the date on which such amounts are paid. Interest shall be credited at an annual rate equal to the rate announced by Wells Fargo & Company (or its successor) as its “prime rate” as of the date the payment would have been due but for this Section 5.8, plus one hundred (100) basis points, compounded annually.

 

  5.10 Code Section 409A . It is intended by Company and Executive that all compensation and benefits payable or provided to Executive under this Agreement or otherwise shall fully comply with the provisions of Section 409A so as not to subject Executive to the additional tax, interest or penalties which may be imposed under Section 409A. The parties acknowledge that Section 409A is ambiguous in certain respects. Company agrees that it will attempt in good faith not to take any action, or refrain from taking any action, that would result in the imposition of tax, interest and/or penalties upon Executive under Section 409A. To the extent Company has acted or refrained from acting in good faith as required by this Section, it will not be responsible for any consequences of failure to comply with Section 409A.

 

  6. Confidentiality/Noncompetition/Non-Solicitation .

 

  6.1 From the Agreement Date through a period ending one year following the termination of the employment of Executive with Company for any reason (the “Restricted Period”), Executive shall not be an executive officer, board member, 5% or greater owner or partner, or employee of a food company that materially competes with Company and has annual revenues over $1 billion.

 

  6.2 Executive shall additionally execute a confidentiality and non-solicitation agreement consistent with those agreements executed by similarly-situated executive officers of Company, effective as of the Agreement Date, and the terms of such agreement shall be incorporated by reference herein.

 

  6.3

Executive agrees that any breach of the covenants contained or incorporated by reference in this Section 6 will irreparably injure Company, and accordingly Company may, in addition to pursing any other remedies available at law or in equity, obtain injunctive relief against Executive from any court having jurisdiction over the

 

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  matter located in the State of Illinois, restraining any further violation of such provisions by Executive. The parties mutually agree to submit themselves to the jurisdiction of such courts and waive any objection on the basis of jurisdiction or venue. Any other dispute over such covenants, including the ultimate merits of such a dispute, shall be decided in accordance with Section 13.

 

  6.4 Executive acknowledges and agrees that the provisions contained or incorporated by reference in this Section 6 are reasonable and valid in duration and scope and in all other respects. If any court of competent jurisdiction as set forth above or panel of arbitrators selected by the parties determines that any provision of this Section is unenforceable because of the duration or scope of such provision, such court/panel shall have the power to reduce the scope or duration of such provision, or otherwise amend or restate such provision, as the case may be, and, in its reduced, amended, or restated form, such provision shall then be enforceable. The parties agree that such reduction, amendment, or restatement should be consistent with the parties’ intention that Company’s legitimate business interests in fair competition, and in the preservation of Company’s good will and proprietary information, be protected.

 

  7. Offsets . In the event of a termination of Executive’s employment pursuant to Section 5.6 above or a Company breach of this Agreement, Executive shall not be required to mitigate damages nor shall the payments due Executive hereunder be reduced or offset by reason of any payments Executive may receive from any other source or by any amounts owing by Executive to Company.

 

  8. Separability; Legal Fees . Subject to the provisions of Section 6.4, if any provision of this Agreement shall be declared to be invalid or unenforceable, in whole or in part, such invalidity or unenforceability shall not affect the remaining provisions hereof which shall remain in full force and effect. In addition, Company shall reimburse Executive for all legal and accounting fees and expenses incurred by Executive in seeking to obtain or enforce any right or benefit provided by this Agreement or any other compensation-related plan, agreement or arrangement of Company upon presentation by Executive of an itemized account of such expenditures, unless Executive’s claim is found by the arbitration panel to have been frivolous.

 

  9. Assignment . This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of Executive and the assigns and successors of Company, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by Executive (except by will or by operation of the laws of intestate succession) or Company, except that Company shall assign this Agreement to any successor (whether by merger, purchase or otherwise) to all or substantially of the stock, assets or businesses of Company.

 

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  10. Amendment . This Agreement may only be amended by mutual written agreement between Company and Executive.

 

  11. Notices . All notices or communications hereunder shall be in writing, addressed as follows:

 

  To Company: ConAgra Foods, Inc.
     One ConAgra Drive
     Omaha, Nebraska 68102
     Attn: Secretary

 

  To Executive: At the address shown on the records of Company

Any such notice or communication shall be sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in a notice duly delivered as described above), and the actual date of mailing shall determine the date at which notice was given.

 

  12. Governing Law . This Agreement shall be construed, interpreted and governed in accordance with the laws of Delaware without reference to such state’s rules relating to conflicts of law.

 

  13. Arbitration . Any controversy or claim arising out of this Agreement or any breach shall be resolved by arbitration pursuant to this Section 13 and the then current rules of the American Arbitration Association. The arbitration shall be held in Omaha, Nebraska before three arbitrators who are knowledgeable as to employment and employee benefits law. If the parties cannot agree on the appointment, one arbitrator shall be appointed by Company, one by Executive, and the third shall be appointed by the first two arbitrators. The arbitrators’ decision and award shall be final and binding and may be entered in any court having jurisdiction thereof. The arbitrators shall not have the power to award punitive or exemplary damages. Each party shall bear its own attorneys’ fees associated with the arbitration and other costs and expenses of the arbitration shall be borne as provided by the rules of the American Arbitration Association; provided, however, that unless the arbitrators determine the position of Executive was frivolous, Executive shall be entitled to reimbursement for reasonable attorneys’ fees and expenses and arbitration expenses incurred in connection with the dispute. If any portion of this Section 13 is held to be unenforceable, it shall be severed and shall not affect either the duty to arbitrate or any other part of this Section 13. Notwithstanding the foregoing, as set forth in Section 6.4, Company may seek interim injunctive relief to enforce restrictive covenants pending resolution of any arbitration.

 

  14. Executive Representation .

 

  14.1

Except for agreements relating to Executive’s immediately prior employer that Executive disclosed to Company (the “Restrictive Agreements”), Executive represents to Company that Executive is not a party to or bound by any employment, retainer, consulting, license, non-competition, non-disclosure, trade

 

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  secrets or other agreement between Executive and any other person, partnership, corporation, joint venture, association or other entity. This representation is an express condition to this Agreement and, in the event of a breach of this representation, this Agreement shall be null and void.

 

  14.2 Additionally, if Executive commits a willful (as defined in Section 5.1) material breach of any Restrictive Agreement, such breach shall be a basis for termination under Section 5.7, provided, that , prior to such termination, Executive shall be afforded the opportunity within ten (10) business days of receiving notice of Company’s intent to terminate him under Section 5.7 to address the Board (together with his counsel) regarding such asserted material breach. Any challenge by Executive to such termination shall be subject to Section 13 hereof and the arbitration panel shall consider such termination de novo .

 

  14.3 Company agrees that, subject to Company by-laws and applicable law, (i) if Executive is made a party, or is threatened to be made a party, to any threatened or actual action, suit or proceeding, whether civil, administrative, arbitration, investigative, appellate or other (a “Proceeding”) by Executive’s immediately prior employer, or any affiliate thereof, or (ii) if any claim, demand, request, dispute, controversy, threat, discovery request or request for testimony or information (a “Claim”) is made, or threatened to be made, by such immediate prior employer, or such affiliate, and such Proceeding or Claim results in any material part from Executive’s alleged breach of any Restrictive Agreement, then Company shall (1) defend Executive in such Proceeding and against such Claim, at Company’s expense, and (2) indemnify and hold harmless Executive to the fullest extent permitted by applicable law against any monetary judgments, damages or liabilities incurred by Executive or payments agreed in settlement with Company’s concurrence, (including, without limitation reasonable attorneys fees to enforce Executive’s rights under this provision); provided, however, that such duty to defend and indemnify excludes any Proceeding or Claim primarily resulting or arising from Executive’s material breach of a Restrictive Agreement or his representations in this Section 14 and that such duty to defend and to indemnify shall cease upon (x) Executive’s rejection of a settlement offer, that does not involve Executive’s Separation from Service or payment of any economic damages or other economic sanction, recommended by the Company’s counsel; or (y) Executive’s taking a position adverse to the Company.

 

  15.

Entire Agreement . This Agreement supersedes any unwritten agreements or understandings by and between Executive and Company and any of its affiliates or their respective directors, officers, shareholders, employees, attorneys, agents, or representatives, and, together with the agreements, plans and programs referred to herein, constitutes the entire agreement between the parties, respecting the subject matter hereof and there are no representations, warranties or other commitments other than those expressed herein. If there is a conflict between any provision of this Agreement and any provision of any stock option or other award agreement with Executive, this Agreement will control. Executive acknowledges that certain plans maintained by Company must comply with ERISA, the Code and the terms and conditions of the plans (“Qualified

 

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  Plans”). Nothing contained in this Agreement will require Company to provide any benefit contrary to the terms and conditions of the Qualified Plans or in violation of ERISA or the Internal Revenue Code. To the extent any benefit to be provided hereunder to Executive cannot be provided through a Qualified Plan, Company will provide the benefit on a non-qualified basis.

[SIGNATURES ON THE FOLLOWING PAGE]

 

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IN WITNESS WHEREOF, the parties have executed this Agreement the 12 th day of February, 2015.

 

 

EXECUTIVE:     CONAGRA FOODS, INC.
/s/ Sean M. Connolly     /s/ Steven F. Goldstone
Sean M. Connolly    

Steven F. Goldstone

Chairman of the Board of Directors

Exhibit 10.3

CHANGE OF CONTROL AGREEMENT

This CHANGE OF CONTROL AGREEMENT (“Agreement”) is made between ConAgra Foods, Inc., a Delaware Corporation (the “Company”), and Sean M. Connolly (the “Employee”), this February 12, 2015, but effective with Employee’s employment with the Company commencing on March 3, 2015 (the “Effective Date”).

WHEREAS, as is the case with most, if not all, publicly traded businesses, it is expected that the Company from time to time may consider or need to consider the possibility of an acquisition by another company or other Change of Control of the ownership of the Company. The Board of Directors of the Company (the “Board”) recognizes that such considerations can be a distraction to Employee and can cause the Employee to consider alternative employment opportunities or to be influenced by the impact of a possible Change of Control of the ownership of the Company on Employee’s personal circumstances in evaluating such opportunities. The Board has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication and objectivity of Employee, notwithstanding the possibility, threat or occurrence of a Change of Control of the Company.

WHEREAS, the Board believes that it is in the best interests of the Company and its shareholders to provide Employee with an incentive to continue Employee’s employment and to motivate Employee to maximize the value of the Company upon a Change of Control for the benefit of its shareholders.

WHEREAS, the Board believes that it is important to provide Employee with certain benefits upon Employee’s termination of employment in certain instances upon or following a Change of Control that provide Employee with enhanced financial security and incentive and encouragement to remain with the Company notwithstanding the possibility of a Change of Control.

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, the parties hereto agree as follows:

1. Definitions . For all purposes of this Agreement, the following terms shall have the meanings specified in this Section unless the context clearly otherwise requires:

(a) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of Regulation 12B under the Exchange Act.

(b) “Change of Control” shall mean:

 

  (i) Individuals who constitute the Board (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Agreement, considered as though such person were a member of the Incumbent Board; or

  (ii) Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were the shareholders of the Company immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated company’s then outstanding voting securities, or a liquidation or dissolution of the Company or of the sale of all or substantially all of its assets.

(c) “Cause” shall mean (i) the willful and continued failure by Employee to substantially perform Employee’s duties with the Company (other than any such failure resulting from termination by the Employee for Good Reason) after a demand for substantial performance is delivered to the Employee that specifically identifies the manner in which the Company believes that the Employee has not substantially performed Employee’s duties, and the Employee has failed to resume substantial performance of the Employee’s duties on a continuous basis within five (5) days of receiving such demand, (ii) the willful engaging by the Employee in conduct which is demonstrably and materially injurious to the Company, monetarily or otherwise, or (iii) the Employee’s conviction of a felony or conviction of a misdemeanor which impairs the Employee’s ability substantially to perform the Employee’s duties with the Company. For purposes of this subsection, no act, or failure to act, on the Employee’s part shall be deemed “willful” unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that the Employee’s action or omission was in the best interest of the Company.

(d) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(e) “Continuation Period” means the two (2) year period beginning on the Employee’s Termination Date.

(f) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

(g) “Good Reason Termination” shall mean a termination of employment initiated by the Employee upon one or more of the following occurrences:

 

  (i) any failure of the Company to comply with and satisfy any of the terms of this Agreement;

 

  (ii) any significant involuntary reduction of the authority, duties or responsibilities held by the Employee immediately prior to the Change of Control;

 

  (iii) any involuntary removal of the Employee from an officer position which the Employee holds with the Company or, if the Employee is employed by a Subsidiary or Affiliate, with the Subsidiary or Affiliate, held by the Employee immediately prior to the Change of Control, except in connection with promotions to higher office;

 

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  (iv) any involuntary reduction in the aggregate compensation level of the Employee including, but not limited to, base salary, annual and long term incentive opportunity, and supplemental executive retirement plans, as in effect immediately prior to the Change of Control;

 

  (v) requiring the Employee to become based at any office or location more than the minimum number of miles required by the Code for the Employee to claim a moving expense deduction, from the office or location at which the Employee was based immediately prior to such Change of Control, except for travel reasonably required in the performance of the Employee’s responsibilities; and

 

  (vi) the Employee being required to undertake business travel to an extent substantially greater than the Employee’s business travel obligations immediately prior to the Change of Control.

(h) “Related Company” shall mean (i) any corporation that is a member of a controlled group of corporations (as defined in Code Section 414(b)) that includes the Company; and (ii) any trade or business (whether or not incorporated) that is under common control (as defined in Code Section 414(c)) with the Company. For purposes of applying Code §§ 414(b) and (c), 25% is substituted for the 80% ownership level.

(i) “Separation from Service”, shall mean the date that Employee separates from service within the meaning of Code Section 409A. Generally, Employee separates from service if Employee dies, retires, or otherwise has a termination of employment with the Company, determined in accordance with the following:

 

  (i) Leaves of Absence . The employment relationship is treated as continuing intact while Employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or, if longer, so long as Employee retains a right to reemployment with the Company under an applicable statute or by contract (including but not limited to this Agreement). A leave of absence constitutes a bona fide leave of absence only if there is a reasonable expectation that Employee will return to perform services for the Company. If the period of leave exceeds six (6) months and Employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6) month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes Employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a twenty nine (29) month period of absence shall be substituted for such six (6) month period.

 

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  (ii) Dual Status . Generally, if Employee performs services both as an employee and an independent contractor, Employee must separate from service both as an employee, and as an independent contractor pursuant to standards set forth in Treasury Regulations, to be treated as having a separation from service. However, if Employee provides services to the Company as an employee and as a member of the Board, and if any plan in which such person participates as a Board member is not aggregated with this Agreement pursuant to Treasury Regulation section 1.409A 1(c)(2)(ii), then the services provided as a director are not taken into account in determining whether Employee has a separation from service as an employee for purposes of this Agreement.

 

  (iii) Termination of Employment . Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Company and Employee reasonably anticipated that no further services would be performed after a certain date or that the level of bona fide services Employee would perform after such date (whether as an employee or as an independent contractor except as provided in clause (ii) above) would permanently decrease to no more than twenty (20) percent of the average level of bona fide services performed (whether as an employee or an independent contractor, except as provided in clause (ii) above) over the immediately preceding thirty six (36) month period (or the full period of services to the Company if Employee has been providing services to the Company less than thirty six (36) months). For periods during which Employee is on a paid bona fide leave of absence and has not otherwise terminated employment as described above, for purposes of this clause (iii) Employee is treated as providing bona fide services at a level equal to the level of services that Employee would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which Employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this clause (iii) (including for purposes of determining the applicable thirty six (36) month (or shorter) period).

(j) “Subsidiary” shall mean any corporation in which the Company, directly or indirectly, owns at least a fifty percent (50%) interest or an unincorporated entity of which the Company, directly or indirectly, owns at least fifty percent (50%) of the profits or capital interests.

(k) “Termination Date” shall mean the effective date of the Employee’s Separation from Service.

2. Notice of Termination . Any Separation from Service upon or following a Change of Control shall be communicated by a Notice of Termination to Employee (or from Employee to the Company with respect to a Good Reason Termination) given in accordance with Section 16 hereof. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific provision in this Agreement relied upon, (ii) briefly

 

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summarizes the facts and circumstances deemed to provide a basis for Employee’s Separation from Service under the provision so indicated, and (iii) if the Termination Date is other than the date of receipt of such notice, specifies the Termination Date (which date shall not be more than 15 days after the giving of such notice).

3. Severance Compensation upon Separation from Service .

(a) Subject to the provisions of Sections 9 and 10 hereof and further subject to Employee executing and not revoking a release of claims substantially in the form set forth as Exhibit A to this Agreement and the period to revoke such release expiring within sixty (60) days following Employee’s Separation from Service, in the event of Employee’s involuntary Separation from Service initiated by the Company or a Subsidiary or Affiliate for any reason other than Cause or in the event of a Good Reason Termination, in either event upon or within three years after a Change of Control, Employee shall receive the following amounts in lieu of any severance compensation and benefits under the Company’s severance plan:

 

  (i) The Company shall pay to Employee a lump sum cash payment equal to three (3) multiplied by the sum of (1) Employee’s annual base salary plus (2) the greater of (x) the highest annual cash bonus paid to Employee for the three (3) full fiscal years of the Company preceding the fiscal year in which the Change of Control occurs or (y) 150% of Employee’s annual base salary for the fiscal year in which the Change of Control occurs. The annual base salary for purposes of item (1) in the preceding sentence shall be Employee’s highest annual base salary as of or after the Change of Control.

 

  (ii)

During the Continuation Period, the Employee shall continue to be entitled to participate in the medical and dental, disability, basic life insurance and supplemental life insurance plans of the Company or Subsidiary or Affiliate (to the extent such benefits remain in effect for other executives of the Company from time to time during the Continuation Period) based upon the amount of benefit provided to the Employee as of the Employee’s Separation from Service. The Employee shall be responsible for making required contributions, on an after-tax basis, at the rate required of all executive employees at the time of the Employee’s Separation from Service or thereafter, except for the medical and dental coverage. For the medical and dental coverage, the Employee shall be required to contribute, on an after-tax basis, the premium (“COBRA Premium”) determined for the plan under Section 4980B(f) of the Code. The Company shall pay to the Employee a single lump sum payment equal to the present value of the cost of the medical and dental coverage for the Continuation Period (assuming family coverage and a reasonable increase in the COBRA Premium). If it is not possible to continue the disability, basic life and supplemental life insurance coverage without violation of or noncompliance with tax (including Code Section 409A), legal or insurance requirements, the Company shall pay to the Employee a single lump sum payment equal to the present value of the cost of such coverage for the

 

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  Continuation Period on the first day on which severance compensation is paid pursuant to subsection (b) below; provided that if payment in a lump sum would cause taxation under Code Section 409A, the Company shall pay the cost of such coverage for each calendar year (or portion thereof) that falls within the Continuation Period on the first business day during each such calendar year (or portion thereof) on which payment can be made without causing taxation under Code Section 409A.

 

  (iii) If the Employee participates in the qualified and/or nonqualified ConAgra Foods Retirement Income Savings Plan (“CRISP”), the Employee shall receive a supplemental credit to his nonqualified CRISP “Account” equal to the maximum employer contribution that the Employee could have received under the qualified and nonqualified CRISP (or any successor plan) in the year that includes the Termination Date.

 

  (iv) Subject to Section 11, the Company, at its expense, shall provide reasonable outplacement assistance to the Employee through the end of the second calendar year beginning after the Termination Date from a professional outplacement assistant firm which is reasonably suitable to the Employee and commensurate with the Employee’s position and responsibilities. In no event shall the amount expended with outplacement assistance for the Employee exceed Thirty Thousand Dollars ($30,000).

(b) Except as otherwise set forth in Sections 9 and 10, (1) the amounts described in subsections 3(a) (i) and (ii) above shall be paid, and (2) the supplemental credit in subsection 3(a)(iii) shall be allocated (with payment governed by the terms of CRISP), on the 61 st day after the Termination Date.

4. Other Payments . Upon any Separation from Service entitling the Employee to payments under this Agreement, the Employee shall receive all accrued but unpaid salary and all benefits (other than severance benefits) accrued and payable under any plans, policies and programs of the Company and its Subsidiaries or Affiliates.

5. Interest; Enforcement .

(a) If payment of the amounts described in Section 3 or Section 10 is delayed pursuant to Section 409A of the Code, the Company shall pay interest at the rate described below on the postponed payments from the 61 st day after Employee’s Termination Date to the date on which such amounts are paid. If the Company shall fail or refuse to pay any amounts due the Employee under Section 3 or 10 on the applicable due date, the Company shall pay interest at the rate described below on the unpaid payments from the applicable due date to the date on which such amounts are paid. Interest shall be credited at an annual rate equal to the rate announced by Wells Fargo & Company (or its successor) as its “prime rate” as of the Employee’s Termination Date, plus one percent (1%), compounded annually.

(b) The Employee shall not be required to incur any expenses associated with the enforcement of the Employee’s rights under this Agreement by arbitration, litigation or other

 

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legal action, because the cost and expense thereof would substantially detract from the benefits intended to be extended to the Employee hereunder. Accordingly, the Company shall pay the Employee on demand the amount necessary to reimburse the Employee in full for all reasonable expenses (including all attorneys’ fees and legal expenses) incurred by the Employee in enforcing any of the obligations of the Company under this Agreement. The Employee shall notify the Company of the expenses for which the Employee demands reimbursement within sixty (60) days after the Employee receives an invoice for such expenses, and the Company shall pay the reimbursement amount within fifteen (15) days after receipt of such notice, subject to Section 11.

6. No Mitigation . The Employee shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

7. Nonexclusivity of Rights . Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company, or any of its Subsidiaries or Affiliates, and for which the Employee may qualify, except as provided in this Agreement.

8. No Set Off . The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against the Employee or others.

9. Taxation .

(a) Notwithstanding anything contained in this Agreement to the contrary, if the Employee is a “specified employee” (determined in accordance with Code Section 409A and Treasury Regulation Section 1.409A-3(i)(2)) as of the date of Separation from Service (other than a Separation from Service due to death) and if the Employee is entitled under this Agreement to any payment, benefit or entitlement upon Separation from Service that constitutes “deferred compensation” subject to Code Section 409A, then (i) any such payment, benefit or entitlement (the “Postponed Benefit”) that is payable during the first six months following the date of Separation from Service shall be paid or provided to the Employee, together with accrued interest as described in Section 5, in a lump sum cash payment to be made on the earlier of (a) the Employee’s death or (b) the first business day (or within 30 days after such first business day) of the seventh calendar month immediately following the month in which the date of Separation from Service occurs (the “Postponement Period”); and (ii) unless doing so would violate Code section 409A(b), an amount equal to the Postponed Benefit plus an estimate of the interest to be paid shall be deposited, as of the date the Postponed Benefit would have been paid but for this section, in a trust in the form of the model grantor trust contained in IRS Revenue Procedure 92-64, which trust is incorporated by reference. If Code section 409A(b) initially prevents the funding described in the prior sentence, but it is possible to carry out such funding without violating Code section 409A(b) at a later date that precedes when payment is made (“409A(b) Date”), such funding shall occur at the earliest possible 409A(b) Date. If the Employee dies during the Postponement Period prior to the payment of benefits, the amounts

 

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withheld on account of Section 409A of the Code, with accrued interest as described in Section 5, shall be paid to the personal representative of the Employee’s estate within sixty (60) days after the date of the Employee’s death. Payments under this Agreement shall be made by mail to the last address provided for notices to the Employee pursuant to Section 16 of this Agreement.

(b) Further notwithstanding anything in this Agreement to the contrary, the Company shall attempt in good faith not to take any action, or refrain from taking any action that would result in the imposition of tax, interest and/or penalties upon the Employee under Code Section 409A. The parties acknowledge that the requirements of Code Section 409A are ambiguous in certain respects. The parties further acknowledge that this Agreement shall be interpreted and administered to maximize the exemptions from Code Section 409A and, to the extent this Agreement provides for deferred compensation subject to Code Section 409A, to comply with Code Section 409A and to avoid the imposition of additional taxes upon the Employee under Code Section 409A. Accordingly, to comply with Code Section 409A, if Employee is entitled to any payment or benefit under this Agreement (i) following a Change in Control that does not qualify under Code Section 409A as a “change in ownership,” “change in effective control” or “change in ownership of a substantial portion of the assets,” in each case with respect to the Company, or (ii) due to a Separation from Service that occurs more than two years after the date of the Change in Control, and if Employee is a party to another agreement, offer letter or other arrangement providing for severance benefits in connection with a Separation from Service other than in connection with a Change in Control, payments under this Agreement up to the total payments required under such other agreement shall be paid in the same manner and at the same time as payments would be paid under such other agreement, and any additional amounts shall be paid as provided in Section 3(b) above. If the Company has acted or refrained from acting in good faith as required by this Section 9, it will not be responsible for any consequences of failure to comply with Code Section 409A.

(c) All payments under this Agreement shall be subject to all requirements of the law with regard to tax withholding and reporting and filing requirements, and the Company shall use its best efforts to satisfy promptly all such requirements.

10. Limitation on Payment .

(a) Except as otherwise provided in subsection (b) below, in the event that it shall be determined that any payment or distribution in the nature of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the aggregate present value of the Payments under the Agreement shall be reduced (but not below zero) to the Safe Harbor Amount (as defined below). Any required reduction in the Payments pursuant to the foregoing shall be done only to the extent such reduction of the Payment can contribute to avoiding the Excise Tax and Expenses (as defined below), and it shall be accomplished first by reducing the lump sum severance payment payable pursuant to Section 3(a)(i) of the Agreement, and then (to the extent reduction of the Section 3(a)(i) payment is not adequate) by reducing the additional NQ CRISP credit provided pursuant to Section 3(a)(iii). The “Safe Harbor Amount” is the maximum dollar amount of payments in the nature of compensation that are contingent on a Change of Control (as described in Section 280G

 

8

of the Code) and that may be paid or distributed to the Employee without imposition of the Excise Tax and Expenses. The term “Excise Tax and Expenses” means the excise tax imposed under Section 4999 of the Code, together with any interest or penalties imposed with respect to such excise tax.

(b) Notwithstanding the foregoing, the Company shall not reduce the Payments as described in subsection (a) if the net after-tax amount of the unreduced Payments that would be retained by the Employee after considering all income, employment, excise and other taxes (including any Excise Tax and Expenses) exceeds the net after-tax amount of the Safe Harbor Amount that would be retained by the Employee after considering all income, employment, excise and other taxes.

(c) All determinations to be made under this Section 10 shall be made by an independent registered public accounting firm selected by the Company immediately prior to the Change of Control (the “Accounting Firm”), which shall provide its determinations and any supporting calculations both to the Company and the Employee within ten (10) days of the Change of Control. Any such determination by the Accounting Firm shall be binding upon the Company and the Employee.

(d) All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this Section shall be borne solely by the Company. The Company agrees to indemnify and hold harmless the Accounting Firm of and from any and all claims, damages and expenses resulting from or relating to its determinations pursuant to this Section, except for claims, damages or expenses resulting from the gross negligence or willful misconduct of the Accounting Firm.

11. Reimbursements . Any reimbursements or in-kind benefits to be provided pursuant to this Agreement (including but not limited to Sections 3(a)(iv) and 5(b)) that are taxable to Employee shall be subject to the following restrictions: (a) each reimbursement must be paid no later than the last day of the Employee’s tax year following the Employee’s tax year during which the expense was incurred or in-kind benefit was received, as the case may be; (b) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a tax year of the Employee may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other tax year of the Employee; (c) the period during which any expenses that are eligible for reimbursement may be paid or in-kind benefit may be provided is ten years after termination of this Agreement; and (d) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

12. Term . This Agreement shall commence on the Effective Date and, unless there is a Change of Control, shall continue until the earliest of (a) the Employee’s termination of employment as a full-time employee of the Company, (b) the date the Employee enters into a written separation agreement with the Company; or (c) the date when this Agreement is terminated by the Company in accordance with the next sentence. If a Change of Control has not occurred, then the Company shall have the right at any time to terminate this Agreement by giving the Employee six (6) months prior written notice of termination of this Agreement. If a Change of Control occurs at any time prior to the termination of this Agreement pursuant to the preceding, this Agreement shall terminate on the third anniversary of such Change of Control.

 

9

13. Confidentiality . The Employee acknowledges that during the Employee’s employment with the Company or any of its Affiliates, the Employee will acquire, be exposed to and have access to, non-public material, data and information of the Company and its Affiliates and/or their customers or clients that is confidential, proprietary, and/or a trade secret (“Confidential Information”). At all times, both during and after the Term, the Employee shall keep and retain in confidence and shall not disclose, except as required and authorized in the course of the Employee’s employment with the Company or any of its Affiliates, to any person, firm or corporation, or use for his or her own purposes, any Confidential Information. For purposes of this Agreement, such Confidential Information shall include, but shall not be limited to: sales methods, information concerning principals or customers, advertising methods, financial affairs or methods of procurement, marketing and business plans, strategies (including risk strategies), projections, business opportunities, inventions, designs, drawings, research and development plans, client lists, sales and cost information and financial results and performance. Notwithstanding the foregoing, “Confidential Information” shall not include any information known generally to the public (other than as a result of unauthorized disclosure by the Employee or by the Company or its Affiliates). The Employee acknowledges that the obligations pertaining to the confidentiality and non-disclosure of Confidential Information shall remain in effect for a period of five (5) years after the Employee’s Separation from Service, or until the Company or its Affiliates has released any such information into the public domain, in which case the Employee’s obligation hereunder shall cease with respect only to such information so released into the public domain. The Employee’s obligation under this Section 13 shall survive any Separation from Service. If the Employee receives a subpoena or other judicial process requiring that he or she produce, provide or testify about Confidential Information, the Employee shall notify the Company and cooperate fully with the Company in resisting disclosure of the Confidential Information. The Employee acknowledges that the Company has the right either in the name of the Employee or in its own name to oppose or move to quash any subpoena or other legal process directed to the Employee regarding Confidential Information.

14. Incentive Payments Upon Change of Control . Upon a Change of Control that qualifies under 409A as a “change in ownership,” “change in effective control” or “change in ownership of a substantial portion of the assets,” in each case with respect to the Company, the Company may, at the Board’s, or the Human Resources Committee’s, as the case may be, sole and absolute discretion, pay the Employee all or a portion of the Employee’s Short and/or Long Term Incentive for the Company fiscal year in which the Change of Control occurs (to the extent that such compensation is not deferred compensation subject to Code section 409A). The amounts paid may be based upon (a) a proration of the Employee’s target incentives for the fiscal year, (b) a proration of the projected incentives at the time of the Change of Control, or (c) a pro rata amount computed at the end of the fiscal year. Any proration shall be based upon the number of completed months elapsed in the fiscal year since the Change of Control.

15. Successor Company . The Company shall require any successor or successors (whether direct or indirect, by purchase, merger or otherwise) to all or substantially all of the business or assets of the Company, by agreement in form and substance satisfactory to the Employee, to acknowledge expressly that this Agreement is binding upon and enforceable against the Company in accordance with the terms hereof, and to become jointly and severally obligated with the Company to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession or successions had

 

10

taken place. Failure of the Company to notify the Employee in writing as to such successorship, to provide the Employee the opportunity to review and agree to the successor’s assumption of this Agreement or to obtain such agreement prior to the effectiveness of any such succession shall be a breach of this Agreement. As used in this Agreement, the Company shall mean the Company as defined above and any such successor or successors to its business or assets, jointly and severally.

16. Notice . All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service, as follows:

If to the Company, to:

ConAgra Foods, Inc.

One ConAgra Drive

Omaha, NE 68102-5094

Attention: Corporate Secretary

If to the Employee, to the most recent address provided by the Employee to the Company or a Subsidiary or Affiliate for payroll purposes, or to such other address as the Company or the Employee, as the case may be, shall designate by notice to the other party hereto in the manner specified in this Section; provided, however, that if no such notice is given by the Company following a Change of Control, notice at the last address of the Company or any successor pursuant to Section 15 shall be deemed sufficient for the purposes hereof. Any such notice shall be deemed delivered and effective when received in the case of personal delivery, five (5) days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail, or on the next business day in the case of overnight express courier service.

17. Contents of Agreement; Amendment . This Agreement supersedes all prior agreements with respect to the subject matter hereof and sets forth the entire understanding between the parties hereto with respect to the subject matter hereof. This Agreement cannot be amended except pursuant to approval by the Human Resources Committee of the Company’s Board of Directors and a written amendment executed by the Employee and the Chair of the Company’s Board of Directors or his delegee. The provisions of this Agreement may require a variance from the terms and conditions of certain compensation or bonus plans under circumstances where such plans would not provide for payment thereof in order to obtain the maximum benefits for the Employee. The parties intend that, to the extent permitted under Code Section 409A, the provisions of this Agreement shall supersede any provisions to the contrary in such plans, and such plans shall be deemed to have been amended to correspond with this Agreement without further action by the Company or the Human Resources Committee of the Company’s Board of Directors.

18. No Right to Continued Employment . Nothing in this Agreement shall be construed as giving the Employee any right to be retained in the employ of the Company or a Subsidiary or Affiliate.

 

11

19. Governing Law . This Agreement shall be governed by and interpreted under the laws of the State of Delaware without giving effect to any conflict of laws provisions.

20. Successors and Assigns . All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the parties hereto, except that the duties and responsibilities of the Employee and the Company hereunder shall not be assignable in whole or in part.

21. Severability . If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

22. Remedies Cumulative; No Waiver . No right conferred upon the Employee by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by the Employee in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof.

23. Miscellaneous . All Section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

 

12

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

EMPLOYEE: CONAGRA FOODS, INC.

/s/ Sean M. Connolly

/s/ Steven F. Goldstone

Sean M. Connolly

Steven F. Goldstone, Chairman of the Board

 

13

EXHIBIT A

WAIVER AND RELEASE OF CLAIMS

In consideration of, and subject to, the payment to be made to me by ConAgra Foods, Inc. (the “Employer”) of the payments and benefits provided by Change of Control Agreement, dated as of February 12, 2015, entered into between me and the Company (the “Agreement”), I hereby waive any claims I may have for employment or re-employment by the Employer or any parent or subsidiary of the Employer after the date hereof, and I further agree to and do release and forever discharge the Employer and any parent or subsidiary of the Employer, and their respective past and present officers, directors, shareholders, insurers, employees and agents from any and all claims and causes of action, known or unknown, arising out of or relating to my employment with the Employer or any parent or subsidiary of the Employer, or the termination thereof, including, but not limited to, wrongful discharge, breach of contract, tort, fraud, the Civil Rights Acts, the Age Discrimination in Employment Act, the Employee Retirement Income Security Acts, the Americans with Disabilities Act, the Family and Medical Leave Act, the Older Workers Benefit Protection Act, or any other federal, state or local legislation or common law relating to employment or discrimination in employment or otherwise.

Notwithstanding the foregoing or any other provision hereof, nothing in this Waiver and Release of Claims shall adversely affect (i) my rights to payment and benefits under the Agreement; (ii) my rights to benefits other than severance payments or benefits under plans, programs and arrangements of the Employer or any parent or subsidiary of the Employer; or (iii) my rights to indemnification under any indemnification agreement, applicable law or the certificates of incorporation or bylaws of the Employer or any parent or subsidiary of the Employer, (iv) my rights under any director’s and officers’ liability insurance policy covering me, (v) my workers compensation rights, or (vi) my unemployment insurance rights.

I acknowledge that I have signed this Waiver and Release of Claims voluntarily, knowingly, of my own free will and without reservation or duress, and that no promises or representations have been made to me by any person to induce me to do so other than the promise of payment set forth in the first paragraph above and the Employer’s acknowledgment of my rights reserved under the second paragraph above.

I understand that this release will be deemed to be an application for benefits under the Agreement and that my entitlement thereto shall be governed by the terms and conditions of the Agreement and any applicable plan. I expressly hereby consent to such terms and conditions.

I acknowledge that I have been given not less than forty-five (45) days to review and consider this Waiver and Release of Claims (unless I have signed a written waiver of such review and consideration period), and that I have had the opportunity to consult with an attorney or other advisor of my choice and have been advised by the Company to do so if I choose. I may revoke this Waiver and Release of Claims seven (7) days or less after its execution by providing written notice to the Employer.

I acknowledge that it is my intention and the intention of the Employer in executing this Waiver and Release of Claims that the same shall be effective as a bar to each and every claim, demand

and cause of action hereinabove specified. In furtherance of this intention, I hereby expressly waive any and all rights and benefits conferred upon me by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE, to the extent applicable to me, and expressly I consent that this Waiver and Release of Claims shall be given full force and effect according to each and all of its express terms and provisions, including as well those related to unknown and unsuspected claims, demands and causes of action, if any, as well as those relating to any other claims, demands and causes of action hereinabove specified. SECTION 1542 provides:

“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”

I acknowledge that I may hereafter discover claims or facts in addition to or different from those which I now know or believe to exist with respect to the subject matter of this Waiver and Release of Claims and which, if known or suspected at the time of executing this Waiver and Release of Claims, may have materially affected this settlement.

Finally, I acknowledge that I have read this Waiver and Release of Claims and understand all of its terms.

 

 

Signature of Employee

 

Printed Name

 

Date Signed

Exhibit 10.4

[COMPANY LETTERHEAD]

February 12, 2015

Gary Rodkin

c/o ConAgra Foods, Inc.

One ConAgra Drive

Omaha, NE 68102

Dear Gary:

This letter agreement (this “ Letter Agreement ”) supplements the Amended and Restated Employment Agreement, dated September 25, 2008 (the “ Employment Agreement ”), by and between you and ConAgra Foods, Inc. (the “ Company ”), and serves to set forth the terms and conditions of your retirement from the Company. You and the Company have entered into this Letter Agreement as of the date of the last signature to this Letter Agreement. Terms used in this Letter Agreement with initial capital letters that are not locally defined in this Letter Agreement are used in this Letter Agreement as defined in the Employment Agreement.

In consideration of the mutual promises contained in this Letter Agreement, the Company and you (“ you ” or “ Executive ”) agree, effective as of March 3, 2015 (subject to Section 8, the “ Effective Date ”), as follows:

 

  1. Transition of Roles and Retirement from Service .

 

  (a) As of the later of (i) April 6, 2015 and (ii) the date immediately following the date upon which the Company’s Quarterly Report on Form 10-Q for the period ended February 22, 2015 is filed with the Securities and Exchange Commission (the “ April Date ”), you will formally resign from the Company’s Board of Directors (the “ Board ”) and will promptly execute such documents and take such actions as may be necessary or reasonably requested by the Company to effectuate or memorialize such resignation.

 

  (b) As of the April Date, you will resign from all positions you have held as an officer of the Company and its subsidiaries and affiliates, and will promptly execute such documents and take such actions as may be necessary or reasonably requested by the Company to effectuate or memorialize your resignation from such positions. The parties agree that neither this resignation nor the resignation specified in paragraph 1(a) will serve as an event triggering payment or benefits under Section 5 of your Employment Agreement.

  (c) After the April Date, you will continue to be employed by the Company as Special Advisor, reporting to the Chairman of the Board. You will serve as Special Advisor through May 31, 2015 at which time you have advised the Company you wish to and will retire (the “ Transition Period ”). Consistent with the terms of your Employment Agreement, the Company may terminate your employment at any time for any reason, and you may terminate your employment at any time with or without Good Reason (as amended below).

 

  (d) As Special Advisor during the Transition Period, your duties and responsibilities shall consist of (i) assisting and advising the successor Chief Executive Officer with transition matters as the two of you mutually agree, including relationships with customers, industry peers, and employees, and (ii) having such other authority and duties as may be reasonably determined by the Board.

 

  (e) During the Transition Period, you will work from an office on the Company’s Omaha, Nebraska campus and retain your administrative assistant. Your home office and security arrangements as of the Effective Date will remain in place during the Transition Period.

 

  (f) At the end of the Transition Period (the “ Retirement Date ”) , you will cease to have the title of Special Advisor and retire from service with the Company.

 

  2. Amendments to Your Employment Agreement as of the Effective Date .

 

  (a) You and the Company agree that your annual incentive bonus for Fiscal Year 2015 as described in Section 3.2 of the Employment Agreement will be at least equal to the funding level approved by the Board’s Human Resources Committee for members of the senior leadership team generally.

 

  (b) Notwithstanding Section 4.1 of your Employment Agreement, based upon your reduced schedule as Special Advisor, you will cease to be eligible for active employee group health and dental coverage as of the April Date. You will, however, be eligible for continuation benefits with respect to group health and dental benefits consistent with the Consolidated Omnibus Budget Reconciliation Act (COBRA). During the Transition Period, the Company will make taxable monthly payments to you in an amount such that the after-tax value of each payment is equal to the amount of the monthly premium for such group health and dental coverage.

 

  (c)

The definition of “Good Reason” under Section 5(b) of the Employment Agreement shall be amended as of the Effective Date. As of the Effective Date, “Good Reason” shall mean: (i) after the April Date, a change to

 

- 2 -

  Executive’s Special Advisor title or a change in Executive’s reporting relationship to someone other than the Chairman of the Board; (ii) a reduction of Executive’s Base Salary as set forth in Section 3.1 of the Employment Agreement or to Executive’s annual incentive bonus for Fiscal Year 2015 as set forth in paragraph 2(a) of the Letter Agreement; or (iii) any material breach by the Company of any provision of the Letter Agreement or the Employment Agreement.

 

  3. Change in Control Protections . Upon the Effective Date, that certain Change of Control Agreement dated September 25, 2008 between you and the Company will terminate. The Change of Control protections in the Employment Agreement will continue to apply.

 

  4. Restrictive Covenants . You acknowledge and agree that any and all restrictive covenants to which you are subject, including, but not limited to, those described in Sections 6 and 7 of the Employment Agreement, will continue in full force and effect in accordance with the terms and conditions thereof. You also acknowledge and agree that any and all terms and conditions of the Employment Agreement which expressly or by reasonable implication survive your separation from the Company to which you are subject will continue in full force and effect in accordance with the terms and conditions thereof.

 

  5. Consultation with Attorney; Voluntary Agreement . You acknowledge that (a) the Company has advised you to consult with an attorney of your own choosing prior to executing this Letter Agreement, (b) you have carefully read and fully understand all of the provisions of this Letter Agreement, and (c) you are entering into this Letter Agreement knowingly, freely and voluntarily in exchange for good and valuable consideration.

 

  6. Governing Law . This Letter Agreement will be governed by and construed and enforced according to the laws of the State of Delaware, without regard to conflicts of laws principles thereof.

 

  7. Taxes . The Company may withhold from any amounts payable under this Letter Agreement all federal, state, city foreign or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling. Notwithstanding any other provision of this Letter Agreement, the Company shall not be obligated to guarantee any particular tax result for you with respect to any payment provided hereunder, and you shall be responsible for any taxes imposed on you with respect to any such payment.

 

  8. Entire Agreement; Effectiveness . This Letter Agreement constitutes the entire understanding between the parties with respect to the subject matter and supersedes, terminates, and replaces any prior or contemporaneous understandings or agreements with respect thereto, except for the Employment Agreement, which shall remain in full force and effect in accordance with its terms, as amended by this Letter Agreement. This Letter Agreement will be deemed null and void if a CEO-Elect of the Company does not begin employment on the Effective Date.

 

- 3 -

  9. Section 409A . This Letter Agreement and the Payments to be made hereunder are intended to comply with, or be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended, and this Letter Agreement will be interpreted, and all tax filings with the Internal Revenue Service relating to the Payments will be made, in a manner consistent with that intent.

 

  10. Defined Terminology . For purposes of this Letter Agreement, the phrase “Retirement from the Company” (or substantially similar phrases) refers to your retirement from the Company as of the Retirement Date.

 

  11. Modifications . This Letter Agreement may not be changed, amended, or modified unless done so in a writing signed by the Company and by you.

 

  12. Counterparts . This Letter Agreement may be executed in separate counterparts, each of which shall be deemed an original, and both of which together shall constitute one and the same instrument.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

- 4 -

IN WITNESS WHEREOF, you and the Company have executed this Letter Agreement as of the date last listed below, but this Letter Agreement is deemed by you and the Company to be effective as of March 3, 2015.

 

ConAgra Foods, Inc.
By:

/s/ Steven F. Goldstone

Steven F. Goldstone, Chairman of the Board

Date: February 12, 2015
Gary M. Rodkin

/s/ Gary M. Rodkin

Date: February 12, 2015

 

- 5 -

Exhibit 99.1

 

LOGO    News Release
  

For more information, please contact:

  

Media: Teresa Paulsen

  

Vice President, Communication & External

Relations, ConAgra Foods

  

402-240-5210 or 402-290-6713

  

Teresa.paulsen@conagrafoods.com

  

Investors: Chris Klinefelter

  

Vice President, Investor Relations,

  

ConAgra Foods

  

402-240-4154

  

Chris.klinefelter@conagrafoods.com

 

 

F O R    I M M E D I A T E    R E L E A S E

CONAGRA FOODS ANNOUNCES SEAN CONNOLLY AS NEW CEO

Connolly will assume role from Gary Rodkin in April

OMAHA, Neb., Feb. 12, 2015 – ConAgra Foods, Inc. (NYSE: CAG) is announcing today Sean M. Connolly as its new chief executive officer. Connolly will replace Gary M. Rodkin, current CEO of ConAgra Foods, effective April 6.

Connolly, 49, was president and CEO of The Hillshire Brands Company from the time of its formation as an independent company in 2012 to its sale to Tyson Foods in August 2014. Prior to his Hillshire Brands leadership, Connolly was chief executive officer for Sara Lee North American Retail and Foodservice, as well as president, Campbell Soup North America.

“We are thrilled to have Sean join ConAgra Foods as our new CEO,” said Steve Goldstone, chairman of ConAgra Foods’ Board of Directors. “His track record of building brands, energizing teams, and creating value makes him an ideal fit. We are confident he will infuse focus and enthusiasm at ConAgra Foods.”

Rodkin announced in August 2014 his impending retirement, which will take place at the end of ConAgra Foods’ fiscal year, May 31, 2015. From April 6 to his retirement, Rodkin will serve as advisor to the company.

 

— more —

CONAGRA FOODS

page 2

 

“The entire board thanks Gary for his leadership of ConAgra Foods of almost 10 years,” Goldstone continued. “Our company was a very different place in 2005 when Gary arrived, and we sincerely appreciate his vision and tenacity in making huge strides in the company’s portfolio and performance. We expect a smooth transition from Gary to Sean over the next several months.”

Connolly is an experienced leader in the food industry. Prior to his roles at Hillshire, Sara Lee and Campbell’s, Connolly managed numerous brands in the food and beverage division at Procter & Gamble. He has used his general management, marketing, and innovation skills to improve business performance across a diverse range of food and beverage categories and channels of trade, with a focus on innovation and disciplined execution. Connolly earned his bachelor’s degree in economics from Vanderbilt University, and his Master of Business Administration from the University of Texas at Austin.

Connolly will join ConAgra Foods March 3 as CEO-elect, and will work with Rodkin on transitioning.

“I’m excited to begin my new role at ConAgra Foods,” said Connolly. “The company has a unique portfolio and a motivated team. I’m looking forward to transitioning with Gary, and creating a lot of value over time.”

About ConAgra Foods

ConAgra Foods, Inc., (NYSE: CAG) is one of North America’s largest packaged food companies with branded and private branded food found in 99 percent of America’s households, as well as a strong commercial foods business serving restaurants and foodservice operations globally. Consumers can find recognized brands such as Banquet®, Chef Boyardee®, Egg Beaters®, Healthy Choice®, Hebrew National®, Hunt’s®, Marie Callender’s®, Orville Redenbacher’s®, PAM®, Peter Pan®, Reddi-wip®, Slim Jim®, Snack Pack® and many other ConAgra Foods brands, along with food sold by ConAgra Foods under private brand labels, in grocery, convenience, mass merchandise, club and drug stores. Additionally, ConAgra Foods supplies frozen potato and sweet potato products as well as other vegetable, spice, bakery and grain products to commercial and foodservice customers. ConAgra Foods operates ReadySetEat.com, an interactive recipe website that provides consumers with easy dinner recipes and more. For more information, please visit us at  www.conagrafoods.com .

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