UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended February 27, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________to_____________
Commission File Number 1-7275
___________________________________________
CONAGRA, INC.
__________________________________________________________________
(Exact name of registrant, as specified in charter)
Delaware 47-0248710
__________________________________________________________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One ConAgra Drive, Omaha, Nebraska 68102-5001
__________________________________________________________________
(Address of Principal Executive Offices) (Zip Code)
(402) 595-4000
__________________________________________________________________
(Registrant's telephone number, including area code)
NA
__________________________________________________________________
(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
_______ _______
Number of shares outstanding of issuer's common stock, as of
March 27, 1994 was 248,036,180.
PART I - FINANCIAL INFORMATION
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
FEB 27, MAY 30, FEB 28,
1994 1993 1993
__________ __________ __________
ASSETS
Current assets:
Cash and cash equivalents $ 76.2 $ 257.0 $ 99.2
Receivables, less allowance for
doubtful accounts of $61.5, $47.5
and $58.9 2,293.8 1,421.4 1,701.0
Margin deposits and segregated
funds 321.2 190.0 222.6
Inventory:
Hedged commodities 978.2 656.5 968.3
Other 2,363.7 1,782.7 2,191.2
__________ __________ __________
Total inventory 3,341.9 2,439.2 3,159.5
Prepaid expenses 208.8 179.1 188.4
__________ __________ __________
Total current assets 6,241.9 4,486.7 5,370.7
__________ __________ __________
Other assets:
Investments in affiliates 240.0 306.1 304.3
Sundry investments, deposits
and other noncurrent assets 129.3 137.4 223.0
__________ __________ __________
Total other assets 369.3 443.5 527.3
__________ __________ __________
Property, plant and equipment
at cost, less accumulated
depreciation of $1509.4, $1330.8
and $1277.2 2,524.8 2,388.2 2,314.8
Brands, trademarks and goodwill, at
cost less accumulated amortization 2,645.7 2,670.3 2,691.7
__________ __________ __________
$ 11,781.7 $ 9,988.7 $ 10,904.5
__________ __________ __________
__________ __________ __________
The accompanying notes are an integral part of the consolidated
financial statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)
FEB 27, MAY 30, FEB 28,
1994 1993 1993
__________ __________ __________
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 2,629.7 $ 570.2 $ 1,943.7
Current installments of
long-term debt 107.6 139.9 134.5
Accounts payable 1,509.2 1,459.6 1,327.0
Advances on sales 198.3 663.5 267.3
Payable to customers, clearing
associations, etc. 397.7 270.9 244.3
Other accrued liabilities 1,234.6 1,168.5 1,152.7
__________ __________ __________
Total current liabilities 6,077.1 4,272.6 5,069.5
__________ __________ __________
Senior long-term debt, excluding
current installments 1,308.4 1,393.2 1,553.2
Other noncurrent liabilities 1,145.5 1,146.5 1,149.0
Subordinated debt 766.0 766.0 766.0
Preferred shares subject to
mandatory redemption 355.6 355.9 355.9
Common stockholders' equity:
Common stock of $5 par value,
authorized 1,200,000,000 shares,
issued 252,540,456, 252,256,807
and 252,096,519 1,262.7 1,261.3 1,260.5
Additional paid-in capital 297.9 267.1 331.7
Retained earnings 1,337.5 1,167.0 1,105.9
Foreign currency translation
adjustment (31.2) (14.6) (9.1)
Less treasury stock, at cost, common
shares 4,504,620, 546,762 and 400,878 (116.6) (12.7) (10.5)
__________ __________ __________
2,750.3 2,668.1 2,678.5
Less unearned restricted stock and
value of 22,537,094, 23,889,777 and
23,353,429 common shares held in EEF (621.2) (613.6) (667.6)
__________ __________ __________
Total common stockholders' equity 2,129.1 2,054.5 2,010.9
__________ __________ __________
$ 11,781.7 $ 9,988.7 $ 10,904.5
__________ __________ __________
__________ __________ __________
The accompanying notes are an integral part of the consolidated
financial statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars and shares in millions except per share amounts)
THIRTEEN WEEKS ENDED
FEB 27, FEB 28,
1994 1993
__________ __________
Net sales $ 5,581.3 $ 5,060.4
__________ __________
Costs and expenses:
Cost of goods sold 4,825.4 4,358.4
Selling, administrative and
general expenses 518.8 503.0
Interest expense, net 67.1 62.3
__________ __________
5,411.3 4,923.7
__________ __________
Income before equity in earnings of
affiliates and income taxes 170.0 136.7
Equity in earnings of affiliates 1.1 4.7
__________ __________
Income before income taxes 171.1 141.4
Income taxes 67.4 50.3
__________ __________
Net income 103.7 91.1
Less preferred dividends 6.0 6.0
__________ __________
Net income available for common stock $ 97.7 $ 85.1
__________ __________
__________ __________
Earnings per common and common
equivalent share $ 0.43 $ 0.37
__________ __________
__________ __________
Weighted average number of common
and common equivalent shares
outstanding 227.3 231.6
__________ __________
__________ __________
Cash dividends declared per common
share $ 0.180 $ 0.155
__________ __________
__________ __________
The accompanying notes are an integral part of the
consolidated financial statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
(Dollars and shares in millions except per share amounts)
THIRTY-NINE WEEKS ENDED
FEB 27, FEB 28,
1994 1993
__________ __________
Net sales $ 17,623.8 $ 16,140.8
__________ __________
Costs and expenses:
Cost of goods sold 15,380.9 13,980.9
Selling, administrative and
general expenses 1,545.7 1,509.6
Interest expense, net 194.7 204.6
__________ __________
17,121.3 15,695.1
__________ __________
Income before equity in earnings of
affiliates, income taxes and
cumulative effect of change in
accounting principle 502.5 445.7
Equity in earnings of affiliates 4.6 18.9
__________ __________
Income before income taxes and
cumulative effect of change in
accounting principle 507.1 464.6
Income taxes 201.8 176.2
__________ __________
Net income before cumulative effect
of change in accounting principle 305.3 288.4
Cumulative effect of change in
accounting for nonpension
postretirement benefits (net of taxes
of $74.2) - (121.2)
__________ __________
Net income 305.3 167.2
Less preferred dividends 18.0 18.0
__________ __________
Net income available for common stock $ 287.3 $ 149.2
__________ __________
__________ __________
Earnings per common and common
equivalent share:
Before change in accounting principle $ 1.26 $ 1.16
Cumulative effect of change in
accounting for nonpension
postretirement benefits - (0.52)
__________ __________
Net income $ 1.26 $ 0.64
__________ __________
__________ __________
Weighted average number of common
and common equivalent shares
outstanding 228.7 234.0
__________ __________
__________ __________
Cash dividends declared per common
share $ 0.515 $ 0.445
__________ __________
__________ __________
The accompanying notes are an integral part of the
consolidated financial statements.
CONAGRA, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Millions)
THIRTY-NINE WEEKS ENDED
FEB 27, FEB 28,
Decrease in Cash and Cash Equivalents 1994 1993
__________ __________
Cash flows from operating activities:
Net income $ 305.3 $ 167.2
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and other amortization 217.7 204.8
Goodwill amortization 55.0 54.5
Provision for deferred income taxes - (74.3)
Provision for losses on accounts receivable 20.6 18.9
Undistributed earnings of affiliates (4.6) (18.9)
Issuance of common stock in connection with
management incentive plans 4.6 5.8
Provision for nonpension postretirement benefits 15.0 207.0
Other noncash items, primarily interest 2.2 13.4
Change in assets and liabilities before
effects from business acquisitions:
Accounts receivable (893.3) (317.7)
Inventory (819.5) (709.8)
Prepaid expenses (20.7) (13.8)
Accounts payable and accrued expenses (404.4) (841.8)
Interest and income taxes 51.7 58.2
__________ __________
Net cash flows from operating activities (1,470.4) (1,246.5)
__________ __________
Cash flows from investing activities:
Sale of property, plant and equipment 18.8 6.9
Additions to property, plant and equipment (249.4) (206.5)
Increase in investment in affiliates (0.9) (29.3)
Decrease in notes receivable-Monfort Finance
Company 26.8 12.8
Other items (6.6) (31.9)
__________ __________
Net cash flows from investing activities (211.3) (248.0)
__________ __________
Cash flows from financing activities:
Net short term borrowings 2,019.6 1,560.7
Proceeds from issuance of long-term debt 4.0 360.5
Decrease in accounts receivable sold (100.0) (85.0)
Proceeds from exercise of employee stock
options 5.9 18.3
Cash dividends paid (129.4) (117.7)
Repayment of long-term debt (185.6) (127.5)
Treasury stock purchases (105.4) (4.0)
ConAgra Employee Equity Fund stock transactions 8.9 (331.4)
Other items, primarily reduction of other
noncurrent liabilities (17.1) (35.0)
__________ __________
Net cash flows from financing activities 1,500.9 1,238.9
__________ __________
Net decrease in cash & cash equivalents (180.8) (255.6)
Cash and cash equivalents at beginning of year 257.0 354.8
__________ __________
Cash and cash equivalents at end of period $ 76.2 $ 99.2
__________ __________
__________ __________
The accompanying notes are an integral part of the
consolidated financial statements.
CONAGRA, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FEBRUARY 27, 1994
(1) The information furnished herein relating to interim
periods has not been examined by independent Certified
Public Accountants. In the opinion of management, all
adjustments necessary for a fair statement of the
results for the periods covered have been included.
All such adjustments are of a normal recurring nature.
The accounting policies followed by the Company, and
additional footnotes, are set forth in the financial
statements included in the Company's 1993 annual
report, which report was incorporated by reference in
Form 10-K for the fiscal year ended May 30, 1993.
(2) The composition of inventories is as follows (in
millions):
FEB 27, MAY 30, FEB 28,
1994 1993 1993
________ ________ ________
Hedged commodities $ 978.2 $ 656.5 $ 968.3
Food products and livestock 1,275.4 1,120.2 1,256.1
Agricultural chemicals,
fertilizer and feed 390.8 146.1 328.7
Retail merchandise 167.6 170.1 164.0
Other, principally
ingredients and supplies 529.9 346.3 442.4
________ ________ ________
$ 3,341.9 $ 2,439.2 $ 3,159.5
________ ________ ________
________ ________ ________
(3) At February 27, 1994, the Company had equity interests
in Saprogal (100%), Sapropor (92%) and Trident Seafoods
Corporation (50%). During the second quarter of fiscal
1994, ConAgra increased its equity interest in Australia
Meat Holdings Pty. Ltd. (AMH) from 50 percent to
approximately 90 percent. The purchase price of this
additional interest was approximately $60 million. The
transaction was effective as of the beginning of fiscal
1994, accounting for the substantial drop in fiscal 1994
first nine months equity in earnings of and investment
in affiliates.
The summary financial information of these companies and
certain other individually insignificant businesses, at
and for each of the periods presented, is set forth
below and includes amounts since date of acquisition of
each respective equity interest:
FEB 27, MAY 30, FEB 28,
1994 1993 1993
________ ________ ________
Current assets $ 484.4 $ 619.9 $ 702.0
Noncurrent assets 473.2 612.8 576.7
________ ________ ________
Total assets 957.6 1,232.7 1,278.7
________ ________ ________
Current liabilities 382.9 454.6 526.0
Noncurrent liabilities 193.9 281.6 263.5
________ ________ ________
Total liabilities 576.8 736.2 789.5
________ ________ ________
Net assets $ 380.8 $ 496.5 $ 489.2
________ ________ ________
________ ________ ________
ConAgra's investment $ 240.0 $ 306.1 $ 304.3
________ ________ ________
________ ________ ________
THIRTEEN THIRTY-NINE
WEEKS ENDED WEEKS ENDED
FEB 27, FEB 28, FEB 27, FEB 28,
1994 1993 1994 1993
________ ________ ________ ________
Net sales $ 420.3 $ 884.0 $ 1,277.3 $ 2,354.4
Net income 1.6 9.0 3.6 32.7
ConAgra's equity
in earnings 1.1 4.7 4.6 18.9
(4) Following is a condensed statement of common stockholders'
equity (in millions):
<TABLE>
<captions>
Unearned
Add'l Foreign Restricted
Common Paid-In Retained Curr Treasury & EEF
Stock Capital Earnings Trns Adj Stock Stock Total
_________ _________ _________ _________ _________ _________ _________
<S> <C> <C> <C> <C> <C> <C> <C>
Balance 5/30/93 $ 1,261.3 $ 267.1 $ 1,167.0 $ (14.6)$ (12.7)$ (613.6) $ 2,054.5
Shares issued in
connection with
employee stock
option and
incentive plans 0.8 (10.3) (4.1) 24.1 10.5
Shares issued in
connection with
acquisitions 0.6 0.5 5.6 6.7
Treasury stock
purchases (105.4) (105.4)
Other share
activity
associated with
Employee Equity
Fund 40.6 (31.7) 8.9
Foreign currency
translation
adjustment (16.6) (16.6)
Cash dividends
declared (134.8) (134.8)
Net income 305.3 305.3
_________ _________ _________ _________ _________ _________ _________
Balance 2/27/94 $ 1,262.7 $ 297.9 $ 1,337.5 $ (31.2)$ (116.6)$ (621.2) $ 2,129.1
_________ _________ _________ _________ _________ _________ _________
_________ _________ _________ _________ _________ _________ _________
</TABLE>
[TEXT]
(5) With respect to operations of the Company excluding
the transaction discussed below, there was no
litigation at February 27, 1994 which, in the opinion
of management, would have a material adverse effect on
the financial position of the Company.
On August 14, 1990, ConAgra acquired Beatrice Company.
The Beatrice businesses and its former subsidiaries (the
"Subsidiaries") are engaged in various litigation
proceedings incident to their respective businesses and
in various environmental and other matters. Beatrice
and various of its Subsidiaries have agreed to indemnify
divested businesses or the purchasers thereof for
various legal proceedings and tax matters. The federal
income tax returns of Beatrice and its predecessors for
the fiscal years ended 1985 through 1987 have been
audited by the Internal Revenue Service and a report has
been issued. The findings contained in the examining
agent's report have been timely protested and
negotiations with the Appellate Division of the Internal
Revenue Service are underway in an attempt to resolve
disputed items. Disputed items being negotiated with
the Appellate Division of the Internal Revenue Service
include proposed deficiencies relating to previously
filed carryback claims to fiscal years ended prior to
1985 (principally fiscal years ended 1982 through 1984).
Additionally, the federal income tax returns of Norton
Simon, Inc. ("NSI"), have been audited by the Internal
Revenue Service for the fiscal years ended 1982 and 1983
and a report has been issued. The findings contained in
the examining agent's report have been timely protested
and negotiations with the Appellate Division of the
Internal Revenue Service are underway in an attempt to
resolve disputed items. Various state tax authorities
are also examining tax returns of Beatrice and its
predecessors for prior taxable years, including, in the
case of one state, years back to fiscal 1978. It is
expected that additional claims will be asserted for
additional taxes. It is not possible at this time to
determine the ultimate liabilities that may arise from
these matters which at any given point in time will be
at various stages of administrative and legal
proceedings and will aggregate hundreds of millions of
dollars. Substantial reserves for these matters have
been established and are reflected as liabilities on the
Subsidiaries' balance sheets. The liabilities include
accrued interest on the tax claims. After taking into
account liabilities that have been recorded and payments
made, management is of the opinion that the ultimate
disposition of the above matters will not have a
material adverse effect on ConAgra's financial
condition, results of operations or liquidity.
(6) Earnings per common and common equivalent share are
calculated on the basis of the weighted average
outstanding common shares and, when applicable, those
outstanding options which are dilutive and after giving
effect to the preferred stock dividend requirements.
Fully diluted earnings per share did not differ
significantly from primary earnings per share in any
period presented.
(7) In the fourth quarter of 1993, the Company adopted,
effective June 1, 1992, the provisions of Statement of
Financial Accounting Standards No. 106, "Employers'
Accounting for Postretirement Benefits Other Than
Pensions." Provisions of the statement, and its effect
on the Company, are set forth in the accounting
policies and additional footnotes 16 and 19 in the
financial statements included in the Company's 1993
annual report, which report was incorporated by
reference in Form 10-K for the fiscal year ended May
30, 1993. Fiscal 1993 quarterly results have been
restated to reflect this effect.
CONAGRA, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of
certain significant factors which have affected the
Company's financial condition and operating results for
the periods included in the accompanying consolidated
condensed financial statements. Results for the fiscal
1994 third quarter and first nine months are not
necessarily indicative of results which may be attained in
the future.
FINANCIAL CONDITION
During the first nine months of fiscal 1994, the Company's
capital investment (working capital plus noncurrent
assets) decreased $11.5 million. Working capital decreased
$49.3 million and noncurrent assets increased $37.8 million.
The decrease in working capital resulted from an increase
in notes payable and was primarily due to the
purchase of property, plant and equipment, treasury
stock and the additional interest in AMH (see Note 3).
The Company's objective is that senior long-term debt
normally will not exceed 30 percent of total long-term
debt plus equity. At February 27, 1994, senior long-term
debt was 29 percent of total long-term debt plus equity
compared to 30 percent at May 30, 1993 and 33 percent at
February 28, 1993.
OPERATING RESULTS
A summary of the period to period increases(decreases) in
the principal components of operations is shown below
(dollars in millions, except per share amounts).
COMPARISON OF THE PERIODS ENDED
FEB. 27, 1994 & FEB. 28, 1993
THIRTEEN WEEKS THIRTY-NINE WEEKS
DOLLARS % DOLLARS %
________________________________
Net sales 520.9 10.3 1,483.0 9.2
Cost of goods sold 467.0 10.7 1,400.0 10.0
Gross profit 53.9 7.7 83.0 3.8
Selling, administrative
and general expense 15.8 3.1 36.1 2.4
Interest expense, net 4.8 7.7 (9.9) (4.8)
Income before equity in
earnings of affiliates and
income taxes 33.3 24.4 56.8 12.7
Equity in earnings of
affiliates (See Note 3) (3.6) (76.6) (14.3) (75.7)
Income before income taxes
and cumulative effect of
change in accounting
principle 29.7 21.0 42.5 9.1
Income taxes 17.1 34.0 25.6 14.5
Net income before
cumulative effect of change
in accounting principle 12.6 13.8 16.9 5.9
Earnings per common and common
equivalent share before
change in accounting
principle 0.06 16.2 0.10 8.6
The acquisition of the additional equity interest in AMH
during the second quarter of fiscal 1994 (see Note 3) was
the primary source of increased sales and expenses during
the Company's third quarter and first nine months. Other
sources of increased sales and expenses during the third
quarter and first nine months included the crop protection
chemical and red meat businesses, and the acquisition, after
last year's second quarter, of National Foods.
In the Company's largest industry segment, Prepared Foods,
operating profit increased in fiscal 1994's third quarter
and first nine months.
The consumer frozen foods business reported third quarter
and nine month earnings growth with unit volume gains and
profit improvement in the Healthy Choice product line.
Helped by unit volume growth in the third quarter,
Hunt-Wesson's operating profit increased in the quarter
and first nine months.
Branded packaged meats operating profit rose in the third
quarter and was ahead of last year through the first nine
months. The diversified products businesses reported
third quarter and nine month earnings gains, led by profit
growth in the Lamb-Weston potato processing business.
Improvement in pork and beef products margins pushed fresh
red meat third quarter and nine month operating profit
ahead of last year's results.
Operating profit was down in chicken and turkey products
in the third quarter. Through nine months, total poultry
products operating profit was up as first half results in
chicken products more than offset a downturn in turkey
products.
In the Company's Trading and Processing industry segment,
operating profit decreased in the third quarter and was
down through nine months. Grain processing operating
profit increased in both periods. Operating profit in the
trading businesses and offshore operating businesses was
down in both periods.
In the Company's Agri-Products segment, operating profit
decreased in the third quarter and first nine months. The
largest Agri-Products business, crop protection chemicals,
increased third quarter operating profit but was down
through nine months. Fertilizer operating profit was up
in both periods, and specialty retailing earnings were
down in both periods.
Operating profit is based on net sales less all
identifiable operating expenses and includes the related
equity in earnings of companies included on the basis of
the equity method of accounting. General corporate
expense, interest expense (except financial businesses)
and income taxes are excluded from segment operations.
For financial businesses, operating profit includes the
effect of interest, which is a large element of their
operating costs.
The Company increased its interest in AMH (see Note 3) from
50 percent to approximately 90 percent at the end of fiscal
1994's second quarter effective at the beginning of the
fiscal year. Consolidating AMH's results this year
contributed to the third quarter and nine month drop in
equity in earnings of affiliates versus fiscal 1993 when
ConAgra's share of AMH's earnings was included in equity in
earnings of affiliates. AMH also was a source of the net
sales increase in fiscal 1994's third quarter and first nine
months and a contributor to nine month operating profit
growth.
Lower equity in earnings of affiliates also was a cause of
the increase in ConAgra's nine month effective tax rate
from 37.9 percent in fiscal 1993 to 39.8 percent in fiscal
1994. Weighted average shares outstanding decreased in
fiscal 1994's third quarter and first nine months as a
consequence of share repurchase programs last year and
this year.
In the fourth quarter of 1993, the Company adopted the
provisions of Statement of Financial Accounting Standards
No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." As provided therein,
financial statements for the first nine months and third
quarter of fiscal 1993 have been restated to reflect
adoption, effective June 1, 1992. Provisions of the
statement, and its effect on the Company, are set forth in
the accounting policies and additional footnotes 16 and 19
in the financial statements included in the Company's 1993
annual report, which report was incorporated by reference
in Form 10-K for the fiscal year ended May 30, 1993.
CONAGRA, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(A) EXHIBITS.
10.1 - Employment Agreements between ConAgra and
Albert J. Crosson, Leroy O. Lochmann and
James P. O'Donnell.
12.1 - Statement regarding computation of ratio
of earnings to fixed charges, and ratio
of earnings to combined fixed charges and
preferred dividends.
(B) REPORTS ON FORM 8-K.
ConAgra did not file any reports on Form 8-K during
the fiscal quarter ended February 27, 1994.
CONAGRA, INC.
By: /s/ Stephen L. Key
____________________________
Stephen L. Key
Executive Vice President and
Chief Financial Officer
By: /s/ Dwight J. Goslee
___________________________
Dwight J. Goslee
Vice President, Controller
Dated this 7th day of April, 1994.
EXHIBIT INDEX
EXHIBIT DESCRIPTION PAGE
10.1 Employment Agreements between ConAgra and
Albert J. Crosson, Leroy O. Lochmann and
James P. O'Donnell...........................
12.1 Statement regarding computation of
ratio of earnings to fixed charges,
and ratio of earnings to combined
fixed charges and preferred
dividends....................................
EXHIBIT 10.1
AGREEMENT
Agreement made this 23rd day of September, 1993, by and
between ConAgra, Inc., a Delaware corporation, hereinafter referred
to as "ConAgra", and ALBERT J. CROSSON, hereinafter referred to as
"Employee".
WHEREAS, the Board of Directors of ConAgra has determined that
the interests of ConAgra stockholders will be best served by
assuring that all key corporate executives of ConAgra will adhere
to the policy of the Board of Directors with respect to any event
by which another entity would acquire effective control of ConAgra,
including but not limited to a tender offer, and
WHEREAS, the Board of Directors has also determined that it is
in the best interests of ConAgra stockholders to promote stability
among key executives and employees.
NOW, THEREFORE, it is agreed as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position
of the Board of Directors and the chief executive officer, and
shall take any action requested by the Board of Directors or the
chief executive officer with respect to any "Change of Control" (as
defined at Section 7 below) of ConAgra. If the Employee violates
the provisions of this Section, he shall forfeit any payments due
to him under the terms of this Agreement.
2. EMPLOYMENT CONTRACT. If a Change of Control of ConAgra
occurs, and if at the initiation of the Change of Control attempt
Employee is then employed by ConAgra, ConAgra hereby agrees to
continue the employment of Employee for a period of three years
from the date the Change of Control effectively occurs. During
said three year period, Employee shall receive annual base and
incentive compensation in an amount not less than that specified in
Section 3(a) below.
If Employee is Involuntarily Terminated (as defined at Section
7 below), at any time during the three year period, ConAgra shall
pay to Employee an amount equal to that which Employee would have
received pursuant to Section 3(a) below for the remainder of the
three year period, and shall also make the payments specified in
Sections 3(b) and 3(c) and, if applicable, any additional payments
specified in Section 5 below. In addition, in the event of
Involuntary Termination at any time, Employee shall receive payment
of the base and incentive compensation described in Section 3(a)
for one year. Any such termination payment of base and incentive
compensation shall be made to Employee in a lump sum within thirty
(30) days after termination.
If Employee voluntarily terminates his employment at any time
during the three year period, the Acquiror (as defined below),
ConAgra, and their subsidiaries will not be obligated to pay the
Employee any amount that might be due for the remainder of the
three year period, or for any termination pay; however, they shall
make any additional payments specified in Sections 3(b), 3(c) and
5 (if applicable) below.
3. DESCRIPTION OF PAYMENTS. The payments to be made to
Employee are:
(a) ANNUAL BASE AND INCENTIVE COMPENSATION. Employee
shall receive for the three year period described in
Section 2 above an annual amount equal to his current
annual rate of compensation, which current annual
compensation shall be computed as follows: twenty-six
times the Employee's highest bi-weekly salary payment
received during the one year period ending immediately
prior to the Change of Control of ConAgra. In addition,
Employee shall receive (i) an amount equal to his maximum
allowable short-term annual incentive compensation,
computed as 75% of the annual rate of compensation
described above, and (ii) an amount equal to his highest
annual long-term compensation award made to Employee
during the three fiscal years immediately preceding such
Change of Control.
(b) RETIREMENT BENEFITS. Employee shall receive an
amount equal to that which he would have received as
retirement benefits under the provisions of the ConAgra
Pension Plan for Salaried Employees ("Qualified Pension
Plan") and the ConAgra Retirement Income Savings Plan
("CRISP") in effect immediately prior to the Change of
Control of ConAgra, had Employee continued his employment
until age 65 at the current annual rate of base and short
term incentive compensation as determined above.
(i) The supplemental pension benefit hereunder
shall be equal to the result of subtracting
(x) the benefit the Employee will receive
under the Qualified Pension Plan from (y) the
pension benefit the Employee would obtain
under the Qualified Pension Plan if the
Employee remained in the employ of ConAgra
until the Employee attained age 65. The
supplemental pension benefit is to be computed
assuming the Employee is to receive an
unreduced normal retirement pension benefit
payable beginning at the later of the date the
Employee attains age 60 or the date of the
Employee's termination of employment. If the
Employee begins to receive his supplemental
pension benefit at a time other than as
described in the preceding sentence, an
actuarial adjustment shall be made to reflect
such event.
(ii) The supplemental CRISP benefit shall be equal
to the amount computed as follows:
A. The additional years of service that the
Employee would receive if his or her
employment was not terminated prior to
attaining age 65 is multiplied by the
Employee's current annual base and short
term incentive compensation (as described
in Section 3(a)).
B. The result in A, immediately above, is
multiplied by 3%.
C. The result in B, the immediately above,
is present valued to date of the
Employee's termination of employment.
The discount factor for such present
value shall be the discount factor used
by the Qualified Pension Plan at the time
of such termination of employment. The
present value shall be computed based on
the assumption that the result in B,
immediately above, is paid ratably (and
monthly) over the additional years of
service of the Employee.
D. The present value amount determined
pursuant to C, immediately above, shall
be funded pursuant to Subsection (iv) of
this Section 3(b).
(iii) The actuarial assumptions and methods used by
this Section 3(b) shall be the same as those
used by the Qualified Pension Plan. The
timing of payment and the form of the
supplemental pension benefit under this
Section 3(b) shall be the same as elected by
the Employee under the Qualified Pension Plan
and the timing of payment and the form of the
supplemental CRISP benefit shall be the same
as elected by the Employee under CRISP;
(iv) The supplemental pension and CRISP benefits
payable under this Section 3(b) shall be
unfunded until a Voluntary Termination or
Involuntary Termination following a Change of
Control. Within 60 days following such a
termination, the supplemental pension and
CRISP benefits shall be funded, in one lump
sum payment, through a trust in the form
attached to the ConAgra Supplemental Pension
and CRISP Plan for Change of Control and which
trust is incorporated by reference. The
transferred amount for the supplemental CRISP
benefit shall be held in a separate account
and separately invested by the trustee. The
amount accumulated in such account shall be
the sole source of payment of the supplemental
CRISP benefit, and shall be the amount of the
supplemental CRISP benefit hereunder. The
Acquiror, ConAgra and their subsidiaries shall
make up any supplemental pension benefit
payments the Employee does not receive under
the trust, e.g., if the funds in the trust are
insufficient to make the payments due to
insufficient earnings in the trust. The
trustee of such trust shall be a national or
state chartered bank. If funding of the trust
is not made within the sixty day period
described in this Subsection (iv) of this
Section 3(b), the Employee's supplemental
pension and CRISP benefits 3(b), the
Employee's supplemental pension and CRISP
benefit shall then be equal to the product of
150% multiplied by the amount of supplemental
pension and CRISP benefits described in this
Section 3(b) above; provided, however, this
increase in benefits is not intended to remove
or detract from the obligation to fund the
trust. The supplemental pension and CRISP
benefits shall not be paid from the assets of
the Qualified Pension Plan or CRISP.
(c) ADDITIONAL PAYMENT. If a Change of Control of
ConAgra occurs, Employee shall receive an amount equal to
the excess, if any, of the highest per share price
offered (valued in U.S. currency) by the successful
Acquiror for ConAgra common stock (which stock will then
be treated for purposes of this Agreement as converted
into equivalent shares of such Acquiror's or the
surviving company's capital stock as of the date of the
Change of Control of ConAgra) over the closing per share
price of such Acquiror's or the surviving company's
("Acquiror") stock quoted on an established securities
market (or if applicable, the closing bid price for the
Acquiror's stock that is quoted on a secondary market or
substantial equivalent thereof) on the date of
termination (or if the date of termination is not a
business day, on the next preceding business day),
multiplied by the highest number of shares of the
Acquiror's capital stock owned by the Employee at any
time during the period beginning on the date of the
Change of Control of ConAgra and ending on the date of
termination. For purposes of this Section 3(c), the
additional amount due hereunder shall be computed as if
Employee owned all of the Acquiror's stock with respect
to which Employee has an option to purchase in connection
with his employment with the Acquiror, ConAgra or any of
their subsidiaries. Said amount shall be paid to
Employee within ten days after termination. In addition,
if Employee sells any of the Acquiror's stock within one
year following said termination, Employee shall receive
the amount by which the closing price of such stock per
share on the date of termination (determined as
aforesaid) exceeds the per share actual net sales price
of the Acquiror's stock on the date of sale realized by
Employee, multiplied by the number of shares sold by
Employee. Said amount shall be paid in immediately
available funds to Employee within ten days after the
sale. In addition, to the extent any of ConAgra's common
stock remains outstanding after a Change of Control, then
Employee shall receive additional amounts computed and
payable in a manner similar to that provided in this
Section 3(c) for Acquiror's stock owned, or subject to an
option held, by Employee. These provisions shall be
appropriately modified or adjusted to take into account
the fact that the computations pursuant to the preceding
sentence are with respect to ConAgra common stock and
related options rather than the Acquiror's capital stock
and options related thereto. The computations and
payments under this Section 3(c) shall include
appropriate adjustments for any stock splits, stock
dividends, recapitalizations or similar share
restructurings that may occur from time to time.
4. MERGER. ConAgra shall not merge, reorganize, consolidate
or sell all or substantially all of its assets, to or with any
other corporation until such corporation and its subsidiaries, if
any, expressly assume the duties of ConAgra set forth herein.
5. CERTAIN ADDITIONAL PAYMENTS BY CONAGRA.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by ConAgra to or for the
benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in
any amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) Subject to the provisions of Subsection (c) below,
all determinations required to be made under this
Section, including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made by
the certified public accounting firm then representing
ConAgra (the "Accounting Firm") which shall provide
detailed supporting calculations both to ConAgra and the
Employee within 15 business days of the date of
termination, if applicable, or such earlier time as is
requested by ConAgra or Employee. If the Accounting Firm
determines that no Excise Tax is payable by the Employee,
it shall furnish the Employee with an opinion that he has
substantial authority not to report any Excise Tax on his
federal income tax return. Any determination by the
Accounting Firm shall be binding upon ConAgra and the
Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by ConAgra should have been made
("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that ConAgra
exhausts its remedies pursuant to Subsection (c) below
and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by ConAgra to or
for the benefit of the Employee.
(c) The Employee shall notify ConAgra in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by ConAgra of the
Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business
days after the Employee knows of such claim and shall
apprise ConAgra of the nature of such claim and the date
on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration
of the thirty-day (30 day) period following the date on
which it gives such notice to ConAgra (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If ConAgra notifies the
Employee in writing prior to the expiration of such
period that it desires to contest such claim, the
Employee shall:
(i) give ConAgra any information reasonably
requested by ConAgra relating to such claim,
(ii) take such action in connection with contesting
such claim as ConAgra shall reasonably request
in writing from time to time, including,
without limitation, accepting legal
representation with respect to such claim by
an attorney reasonably selected by ConAgra,
(iii) cooperate with ConAgra in good faith in order
to effectively contest such claim,
(iv) permit ConAgra to participate in any
proceedings relating to such claim;
provided, however, that ConAgra shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Subsection (c), ConAgra
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as ConAgra shall determine; provided,
however, that if ConAgra directs the Employee to pay such
claim and sue for a refund, ConAgra shall advance the
amount of such payment to the Employee, on an interest-
free basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for
the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, ConAgra's
control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount
advanced by ConAgra pursuant to Subsection (c) above, the
Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to
ConAgra's complying with the requirements of Subsection
(c)) promptly pay to ConAgra the amount of such refund
(together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt
by the Employee of an amount advanced by ConAgra pursuant
to Subsection (c), a determination is made that the
Employee shall not be entitled to any refund with respect
to such claim and ConAgra does not notify the Employee in
writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
6. TERM AND BINDING EFFECT. This Agreement shall bind
ConAgra and Employee as long as Employee remains in the employ of
ConAgra; provided, however, ConAgra may terminate this Agreement at
any time by giving notice to Employee; and provided further,
however, that ConAgra may not terminate this Agreement at any time
subsequent to the announcement of an event that could result in a
Change of Control of ConAgra. This Agreement shall be binding upon
the parties hereto, their heirs, executors, administrators and
successors.
7. CERTAIN DEFINITIONS. The following definitions shall
apply for the purposes of this Agreement:
(a) CHANGE OF CONTROL OF CONAGRA. The term "Change of
Control" shall mean:
(i) The acquisition (other than from ConAgra) by
any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange
Act"), (excluding, for this purpose, ConAgra
or its subsidiaries, or any employee benefit
plan of ConAgra or its subsidiaries, which
acquires beneficial ownership of voting
securities of ConAgra) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of
either the then outstanding shares of common
stock or the combined voting power of
ConAgra's then outstanding voting securities
entitled to vote generally in the election of
directors; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof
the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board,
provided that any person becoming a director
subsequent to the date hereof whose election,
or nomination for election by ConAgra's
shareholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as
though such person were a member of the
Incumbent Board; or
(iii) Approval of the shareholders of ConAgra of a
reorganization, merger, consolidation, in each
case, with respect to which persons who were
the shareholders of ConAgra immediately prior
to such reorganization, merger or
consolidation do not, immediately thereafter,
own more than 50% of the combined voting power
entitled to vote generally in the election of
directors of the reorganized, merged or
consolidated company's then outstanding voting
securities, or a liquidation or dissolution of
ConAgra or of the sale of all or substantially
all of its assets.
(b) INVOLUNTARY TERMINATION. The term "Involuntary
Termination" or any variation thereof shall mean either
(i) the actual involuntary termination of Employee's
employment with the Acquiror, ConAgra and their
subsidiaries after a Change of Control (with or without
cause) or (ii) the constructive involuntary termination
of the Employee's employment with the Acquiror, ConAgra
and their subsidiaries after a Change of Control. The
term "constructive involuntary termination" shall include
(w) a reduction in the Employee's compensation (including
applicable fringe benefits); (x) a substantial change in
the location of the Employee's job without the Employee's
written consent; (y) the Employee's demotion or
diminution in the Employee's position, authority, duties
or responsibilities without the Employee's written
consent; or (z) the sale or disposition of the stock of
Employee's immediate employer, which was a subsidiary of
the Acquiror, ConAgra, or their other subsidiaries
immediately prior to such sale or disposition, provided
Employee is not employed after such sale or disposition
by the Acquiror, ConAgra, or any of their subsidiaries
that are retained after such sale or disposition.
"Substantial change in location" means any location
change in excess of 35 miles from the location of the
Employee's job with ConAgra or its subsidiaries at the
time of the Change of Control of ConAgra.
8. COSTS. All costs of litigation necessary for the
Employee to defend the validity of this contract are to be paid by
ConAgra or its successors or assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement.
EMPLOYEE: CONAGRA, INC.
/s/ ALBERT J. CROSSON BY: /s/ PHILIP B. FLETCHER
___________________________ ____________________________
ALBERT J. CROSSON Chairman, Board of Directors
AGREEMENT
Agreement made this 23rd day of September, 1993, by and
between ConAgra, Inc., a Delaware corporation, hereinafter referred
to as "ConAgra", and LEROY O. LOCHMANN, hereinafter referred to as
"Employee".
WHEREAS, the Board of Directors of ConAgra has determined that
the interests of ConAgra stockholders will be best served by
assuring that all key corporate executives of ConAgra will adhere
to the policy of the Board of Directors with respect to any event
by which another entity would acquire effective control of ConAgra,
including but not limited to a tender offer, and
WHEREAS, the Board of Directors has also determined that it is
in the best interests of ConAgra stockholders to promote stability
among key executives and employees.
NOW, THEREFORE, it is agreed as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position
of the Board of Directors and the chief executive officer, and
shall take any action requested by the Board of Directors or the
chief executive officer with respect to any "Change of Control" (as
defined at Section 7 below) of ConAgra. If the Employee violates
the provisions of this Section, he shall forfeit any payments due
to him under the terms of this Agreement.
2. EMPLOYMENT CONTRACT. If a Change of Control of ConAgra
occurs, and if at the initiation of the Change of Control attempt
Employee is then employed by ConAgra, ConAgra hereby agrees to
continue the employment of Employee for a period of three years
from the date the Change of Control effectively occurs. During
said three year period, Employee shall receive annual base and
incentive compensation in an amount not less than that specified in
Section 3(a) below.
If Employee is Involuntarily Terminated (as defined at Section
7 below), at any time during the three year period, ConAgra shall
pay to Employee an amount equal to that which Employee would have
received pursuant to Section 3(a) below for the remainder of the
three year period, and shall also make the payments specified in
Sections 3(b) and 3(c) and, if applicable, any additional payments
specified in Section 5 below. In addition, in the event of
Involuntary Termination at any time, Employee shall receive payment
of the base and incentive compensation described in Section 3(a)
for one year. Any such termination payment of base and incentive
compensation shall be made to Employee in a lump sum within thirty
(30) days after termination.
If Employee voluntarily terminates his employment at any time
during the three year period, the Acquiror (as defined below),
ConAgra, and their subsidiaries will not be obligated to pay the
Employee any amount that might be due for the remainder of the
three year period, or for any termination pay; however, they shall
make any additional payments specified in Sections 3(b), 3(c) and
5 (if applicable) below.
3. DESCRIPTION OF PAYMENTS. The payments to be made to
Employee are:
(a) ANNUAL BASE AND INCENTIVE COMPENSATION. Employee
shall receive for the three year period described in
Section 2 above an annual amount equal to his current
annual rate of compensation, which current annual
compensation shall be computed as follows: twenty-six
times the Employee's highest bi-weekly salary payment
received during the one year period ending immediately
prior to the Change of Control of ConAgra. In addition,
Employee shall receive (i) an amount equal to his maximum
allowable short-term annual incentive compensation,
computed as 75% of the annual rate of compensation
described above, and (ii) an amount equal to his highest
annual long-term compensation award made to Employee
during the three fiscal years immediately preceding such
Change of Control.
(b) RETIREMENT BENEFITS. Employee shall receive an
amount equal to that which he would have received as
retirement benefits under the provisions of the ConAgra
Pension Plan for Salaried Employees ("Qualified Pension
Plan") and the ConAgra Retirement Income Savings Plan
("CRISP") in effect immediately prior to the Change of
Control of ConAgra, had Employee continued his employment
until age 65 at the current annual rate of base and short
term incentive compensation as determined above.
(i) The supplemental pension benefit hereunder
shall be equal to the result of subtracting
(x) the benefit the Employee will receive
under the Qualified Pension Plan from (y) the
pension benefit the Employee would obtain
under the Qualified Pension Plan if the
Employee remained in the employ of ConAgra
until the Employee attained age 65. The
supplemental pension benefit is to be computed
assuming the Employee is to receive an
unreduced normal retirement pension benefit
payable beginning at the later of the date the
Employee attains age 60 or the date of the
Employee's termination of employment. If the
Employee begins to receive his supplemental
pension benefit at a time other than as
described in the preceding sentence, an
actuarial adjustment shall be made to reflect
such event.
(ii) The supplemental CRISP benefit shall be equal
to the amount computed as follows:
A. The additional years of service that the
Employee would receive if his or her
employment was not terminated prior to
attaining age 65 is multiplied by the
Employee's current annual base and short
term incentive compensation (as described
in Section 3(a)).
B. The result in A, immediately above, is
multiplied by 3%.
C. The result in B, the immediately above,
is present valued to date of the
Employee's termination of employment.
The discount factor for such present
value shall be the discount factor used
by the Qualified Pension Plan at the time
of such termination of employment. The
present value shall be computed based on
the assumption that the result in B,
immediately above, is paid ratably (and
monthly) over the additional years of
service of the Employee.
D. The present value amount determined
pursuant to C, immediately above, shall
be funded pursuant to Subsection (iv) of
this Section 3(b).
(iii) The actuarial assumptions and methods used by
this Section 3(b) shall be the same as those
used by the Qualified Pension Plan. The
timing of payment and the form of the
supplemental pension benefit under this
Section 3(b) shall be the same as elected by
the Employee under the Qualified Pension Plan
and the timing of payment and the form of the
supplemental CRISP benefit shall be the same
as elected by the Employee under CRISP;
(iv) The supplemental pension and CRISP benefits
payable under this Section 3(b) shall be
unfunded until a Voluntary Termination or
Involuntary Termination following a Change of
Control. Within 60 days following such a
termination, the supplemental pension and
CRISP benefits shall be funded, in one lump
sum payment, through a trust in the form
attached to the ConAgra Supplemental Pension
and CRISP Plan for Change of Control and which
trust is incorporated by reference. The
transferred amount for the supplemental CRISP
benefit shall be held in a separate account
and separately invested by the trustee. The
amount accumulated in such account shall be
the sole source of payment of the supplemental
CRISP benefit, and shall be the amount of the
supplemental CRISP benefit hereunder. The
Acquiror, ConAgra and their subsidiaries shall
make up any supplemental pension benefit
payments the Employee does not receive under
the trust, e.g., if the funds in the trust are
insufficient to make the payments due to
insufficient earnings in the trust. The
trustee of such trust shall be a national or
state chartered bank. If funding of the trust
is not made within the sixty day period
described in this Subsection (iv) of this
Section 3(b), the Employee's supplemental
pension and CRISP benefits 3(b), the
Employee's supplemental pension and CRISP
benefit shall then be equal to the product of
150% multiplied by the amount of supplemental
pension and CRISP benefits described in this
Section 3(b) above; provided, however, this
increase in benefits is not intended to remove
or detract from the obligation to fund the
trust. The supplemental pension and CRISP
benefits shall not be paid from the assets of
the Qualified Pension Plan or CRISP.
(c) ADDITIONAL PAYMENT. If a Change of Control of
ConAgra occurs, Employee shall receive an amount equal to
the excess, if any, of the highest per share price
offered (valued in U.S. currency) by the successful
Acquiror for ConAgra common stock (which stock will then
be treated for purposes of this Agreement as converted
into equivalent shares of such Acquiror's or the
surviving company's capital stock as of the date of the
Change of Control of ConAgra) over the closing per share
price of such Acquiror's or the surviving company's
("Acquiror") stock quoted on an established securities
market (or if applicable, the closed bid price for the
Acquiror's stock that is quoted on a secondary market or
substantial equivalent thereof) on the date of
termination (or if the date of termination is not a
business day, on the next preceding business day),
multiplied by the highest number of shares of the
Acquiror's capital stock owned by the Employee at any
time during the period beginning on the date of the
Change of Control of ConAgra and ending on the date of
termination. For purposes of this Section 3(c), the
additional amount due hereunder shall be computed as if
Employee owned all of the Acquiror's stock with respect
to which Employee has an option to purchase in connection
with his employment with the Acquiror, ConAgra or any of
their subsidiaries. Said amount shall be paid to
Employee within ten days after termination. In addition,
if Employee sells any of the Acquiror's stock within one
year following said termination, Employee shall receive
the amount by which the closing price of such stock per
share on the date of termination (determined as
aforesaid) exceeds the per share actual net sales price
of the Acquiror's stock on the date of sale realized by
Employee, multiplied by the number of shares sold by
Employee. Said amount shall be paid in immediately
available funds to Employee within ten days after the
sale. In addition, to the extent any of ConAgra's common
stock remains outstanding after a Change of Control, then
Employee shall receive additional amounts computed and
payable in a manner similar to that provided in this
Section 3(c) for Acquiror's stock owned, or subject to an
option held, by Employee. These provisions shall be
appropriately modified or adjusted to take into account
the fact that the computations pursuant to the preceding
sentence are with respect to ConAgra common stock and
related options rather than the Acquiror's capital stock
and options related thereto. The computations and
payments under this Section 3(c) shall include
appropriate adjustments for any stock splits, stock
dividends, recapitalizations or similar share
restructurings that may occur from time to time.
4. MERGER. ConAgra shall not merge, reorganize, consolidate
or sell all or substantially all of its assets, to or with any
other corporation until such corporation and its subsidiaries, if
any, expressly assume the duties of ConAgra set forth herein.
5. CERTAIN ADDITIONAL PAYMENTS BY CONAGRA.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by ConAgra to or for the
benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in
any amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) Subject to the provisions of Subsection (c) below,
all determinations required to be made under this
Section, including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made by
the certified public accounting firm then representing
ConAgra (the "Accounting Firm") which shall provide
detailed supporting calculations both to ConAgra and the
Employee within 15 business days of the date of
termination, if applicable, or such earlier time as is
requested by ConAgra or Employee. If the Accounting Firm
determines that no Excise Tax is payable by the Employee,
it shall furnish the Employee with an opinion that he has
substantial authority not to report any Excise Tax on his
federal income tax return. Any determination by the
Accounting Firm shall be binding upon ConAgra and the
Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by ConAgra should have been made
("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that ConAgra
exhausts its remedies pursuant to Subsection (c) below
and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by ConAgra to or
for the benefit of the Employee.
(c) The Employee shall notify ConAgra in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by ConAgra of the
Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business
days after the Employee knows of such claim and shall
apprise ConAgra of the nature of such claim and the date
on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration
of the thirty-day (30 day) period following the date on
which it gives such notice to ConAgra (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If ConAgra notifies the
Employee in writing prior to the expiration of such
period that it desires to contest such claim, the
Employee shall:
(i) give ConAgra any information reasonably
requested by ConAgra relating to such claim,
(ii) take such action in connection with contesting
such claim as ConAgra shall reasonably request
in writing from time to time, including,
without limitation, accepting legal
representation with respect to such claim by
an attorney reasonably selected by ConAgra,
(iii) cooperate with ConAgra in good faith in order
to effectively contest such claim,
(iv) permit ConAgra to participate in any
proceedings relating to such claim;
provided, however, that ConAgra shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Subsection (c), ConAgra
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as ConAgra shall determine; provided,
however, that if ConAgra directs the Employee to pay such
claim and sue for a refund, ConAgra shall advance the
amount of such payment to the Employee, on an interest-
free basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for
the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, ConAgra's
control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount
advanced by ConAgra pursuant to Subsection (c) above, the
Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to
ConAgra's complying with the requirements of Subsection
(c)) promptly pay to ConAgra the amount of such refund
(together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt
by the Employee of an amount advanced by ConAgra pursuant
to Subsection (c), a determination is made that the
Employee shall not be entitled to any refund with respect
to such claim and ConAgra does not notify the Employee in
writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
6. TERM AND BINDING EFFECT. This Agreement shall bind
ConAgra and Employee as long as Employee remains in the employ of
ConAgra; provided, however, ConAgra may terminate this Agreement at
any time by giving notice to Employee; and provided further,
however, that ConAgra may not terminate this Agreement at any time
subsequent to the announcement of an event that could result in a
Change of Control of ConAgra. This Agreement shall be binding upon
the parties hereto, their heirs, executors, administrators and
successors.
7. CERTAIN DEFINITIONS. The following definitions shall
apply for the purposes of this Agreement:
(a) CHANGE OF CONTROL OF CONAGRA. The term "Change of
Control" shall mean:
(i) The acquisition (other than from ConAgra) by
any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange
Act"), (excluding, for this purpose, ConAgra
or its subsidiaries, or any employee benefit
plan of ConAgra or its subsidiaries, which
acquires beneficial ownership of voting
securities of ConAgra) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of
either the then outstanding shares of common
stock or the combined voting power of
ConAgra's then outstanding voting securities
entitled to vote generally in the election of
directors; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof
the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board,
provided that any person becoming a director
subsequent to the date hereof whose election,
or nomination for election by ConAgra's
shareholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as
though such person were a member of the
Incumbent Board; or
(iii) Approval of the shareholders of ConAgra of a
reorganization, merger, consolidation, in each
case, with respect to which persons who were
the shareholders of ConAgra immediately prior
to such reorganization, merger or
consolidation do not, immediately thereafter,
own more than 50% of the combined voting power
entitled to vote generally in the election of
directors of the reorganized, merged or
consolidated company's then outstanding voting
securities, or a liquidation or dissolution of
ConAgra or of the sale of all or substantially
all of its assets.
(b) INVOLUNTARY TERMINATION. The term "Involuntary
Termination" or any variation thereof shall mean either
(i) the actual involuntary termination of Employee's
employment with the Acquiror, ConAgra and their
subsidiaries after a Change of Control (with or without
cause) or (ii) the constructive involuntary termination
of the Employee's employment with the Acquiror, ConAgra
and their subsidiaries after a Change of Control. The
term "constructive involuntary termination" shall include
(w) a reduction in the Employee's compensation (including
applicable fringe benefits); (x) a substantial change in
the location of the Employee's job without the Employee's
written consent; (y) the Employee's demotion or
diminution in the Employee's position, authority, duties
or responsibilities without the Employee's written
consent; or (z) the sale or disposition of the stock of
Employee's immediate employer, which was a subsidiary of
the Acquiror, ConAgra, or their other subsidiaries
immediately prior to such sale or disposition, provided
Employee is not employed after such sale or disposition
by the Acquiror, ConAgra, or any of their subsidiaries
that are retained after such sale or disposition.
"Substantial change in location" means any location
change in excess of 35 miles from the location of the
Employee's job with ConAgra or its subsidiaries at the
time of the Change of Control of ConAgra.
8. COSTS. All costs of litigation necessary for the
Employee to defend the validity of this contract are to be paid by
ConAgra or its successors or assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement.
EMPLOYEE: CONAGRA, INC.
/s/ LEROY O. LOCHMANN BY: /S/ PHILIP B. FLETCHER
____________________________ _____________________________
LEROY O. LOCHMANN Chairman, Board of Directors
AGREEMENT
Agreement made this 23rd day of September, 1993, by and
between ConAgra, Inc., a Delaware corporation, hereinafter referred
to as "ConAgra", and JAMES P. O'DONNELL, hereinafter referred to as
"Employee".
WHEREAS, the Board of Directors of ConAgra has determined that
the interests of ConAgra stockholders will be best served by
assuring that all key corporate executives of ConAgra will adhere
to the policy of the Board of Directors with respect to any event
by which another entity would acquire effective control of ConAgra,
including but not limited to a tender offer, and
WHEREAS, the Board of Directors has also determined that it is
in the best interests of ConAgra stockholders to promote stability
among key executives and employees.
NOW, THEREFORE, it is agreed as follows:
1. DUTIES OF EMPLOYEE. Employee shall support the position
of the Board of Directors and the chief executive officer, and
shall take any action requested by the Board of Directors or the
chief executive officer with respect to any "Change of Control" (as
defined at Section 7 below) of ConAgra. If the Employee violates
the provisions of this Section, he shall forfeit any payments due
to him under the terms of this Agreement.
2. EMPLOYMENT CONTRACT. If a Change of Control of ConAgra
occurs, and if at the initiation of the Change of Control attempt
Employee is then employed by ConAgra, ConAgra hereby agrees to
continue the employment of Employee for a period of three years
from the date the Change of Control effectively occurs. During
said three year period, Employee shall receive annual base and
incentive compensation in an amount not less than that specified in
Section 3(a) below.
If Employee is Involuntarily Terminated (as defined at Section
7 below), at any time during the three year period, ConAgra shall
pay to Employee an amount equal to that which Employee would have
received pursuant to Section 3(a) below for the remainder of the
three year period, and shall also make the payments specified in
Sections 3(b) and 3(c) and, if applicable, any additional payments
specified in Section 5 below. In addition, in the event of
Involuntary Termination at any time, Employee shall receive payment
of the base and incentive compensation described in Section 3(a)
for one year. Any such termination payment of base and incentive
compensation shall be made to Employee in a lump sum within thirty
(30) days after termination.
If Employee voluntarily terminates his employment at any time
during the three year period, the Acquiror (as defined below),
ConAgra, and their subsidiaries will not be obligated to pay the
Employee any amount that might be due for the remainder of the
three year period, or for any termination pay; however, they shall
make any additional payments specified in Sections 3(b), 3(c) and
5 (if applicable) below.
3. DESCRIPTION OF PAYMENTS. The payments to be made to
Employee are:
(a) ANNUAL BASE AND INCENTIVE COMPENSATION. Employee
shall receive for the three year period described in
Section 2 above an annual amount equal to his current
annual rate of compensation, which current annual
compensation shall be computed as follows: twenty-six
times the Employee's highest bi-weekly salary payment
received during the one year period ending immediately
prior to the Change of Control of ConAgra. In addition,
Employee shall receive (i) an amount equal to his maximum
allowable short-term annual incentive compensation,
computed as 75% of the annual rate of compensation
described above, and (ii) an amount equal to his highest
annual long-term compensation award made to Employee
during the three fiscal years immediately preceding such
Change of Control.
(b) RETIREMENT BENEFITS. Employee shall receive an
amount equal to that which he would have received as
retirement benefits under the provisions of the ConAgra
Pension Plan for Salaried Employees ("Qualified Pension
Plan") and the ConAgra Retirement Income Savings Plan
("CRISP") in effect immediately prior to the Change of
Control of ConAgra, had Employee continued his employment
until age 65 at the current annual rate of base and short
term incentive compensation as determined above.
(i) The supplemental pension benefit hereunder
shall be equal to the result of subtracting
(x) the benefit the Employee will receive
under the Qualified Pension Plan from (y) the
pension benefit the Employee would obtain
under the Qualified Pension Plan if the
Employee remained in the employ of ConAgra
until the Employee attained age 65. The
supplemental pension benefit is to be computed
assuming the Employee is to receive an
unreduced normal retirement pension benefit
payable beginning at the later of the date the
Employee attains age 60 or the date of the
Employee's termination of employment. If the
Employee begins to receive his supplemental
pension benefit at a time other than as
described in the preceding sentence, an
actuarial adjustment shall be made to reflect
such event.
(ii) The supplemental CRISP benefit shall be equal
to the amount computed as follows:
A. The additional years of service that the
Employee would receive if his or her
employment was not terminated prior to
attaining age 65 is multiplied by the
Employee's current annual base and short
term incentive compensation (as described
in Section 3(a)).
B. The result in A, immediately above, is
multiplied by 3%.
C. The result in B, immediately above, is
present valued to the date of the
Employee's termination of employment.
The discount factor for such present
value shall be the discount factor used
by the Qualified Pension Plan at the time
of such termination of employment. The
present value shall be computed based on
the assumption that the result in B,
immediately above, is paid ratably (and
monthly) over the additional years of
service of the Employee.
D. The present value amount determined
pursuant to C, immediately above, shall
be funded pursuant to Subsection (iv) of
this Section 3(b).
(iii) The actuarial assumptions and methods used by
this Section 3(b) shall be the same as those
used by the Qualified Pension Plan. The
timing of payment and the form of the
supplemental pension benefit under this
Section 3(b) shall be the same as elected by
the Employee under the Qualified Pension Plan
and the timing of payment and the form of the
supplemental CRISP benefit shall be the same
as elected by the Employee under CRISP;
(iv) The supplemental pension and CRISP benefits
payable under this Section 3(b) shall be
unfunded until a Voluntary Termination or
Involuntary Termination following a Change of
Control. Within 60 days following such a
termination, the supplemental pension and
CRISP benefits shall be funded, in one lump
sum payment, through a trust in the form
attached to the ConAgra Supplemental Pension
and CRISP Plan for Change of Control and which
trust is incorporated by reference. The
transferred amount for the supplemental CRISP
benefit shall be held in a separate account
and separately invested by the trustee. The
amount accumulated in such account shall be
the sole source of payment of the supplemental
CRISP benefit, and shall be the amount of the
supplemental CRISP benefit hereunder. The
Acquiror, ConAgra and their subsidiaries shall
make up any supplemental pension benefit
payments the Employee does not receive under
the trust, e.g., if the funds in the trust are
insufficient to make the payments due to
insufficient earnings in the trust. The
trustee of such trust shall be a national or
state chartered bank. If funding of the trust
is not made within the sixty day period
described in this Subsection (iv) of this
Section 3(b), the Employee's supplemental
pension and CRISP benefits 3(b), the
Employee's supplemental pension and CRISP
benefits shall then be equal to the product of
150% multiplied by the amount of supplemental
pension and CRISP benefits described in this
Section 3(b) above; provided, however, this
increase in benefits is not intended to remove
or detract from the obligation to fund the
trust. The supplemental pension and CRISP
benefits shall not be paid from the assets of
the Qualified Pension Plan or CRISP.
(c) ADDITIONAL PAYMENT. If a Change of Control of
ConAgra occurs, Employee shall receive an amount equal to
the excess, if any, of the highest per share price
offered (valued in U.S. currency) by the successful
Acquiror for ConAgra common stock (which stock will then
be treated for purposes of this Agreement as converted
into equivalent shares of such Acquiror's or the
surviving company's capital stock as of the date of the
Change of Control of ConAgra) over the closing per share
price of such Acquiror's or the surviving company's
("Acquiror") stock quoted on an established securities
market (or if applicable, the closing bid price for the
Acquiror's stock that is quoted on a secondary market or
substantial equivalent thereof) on the date of
termination (or if the date of termination is not a
business day, on the next preceding business day),
multiplied by the highest number of shares of the
Acquiror's capital stock owned by the Employee at any
time during the period beginning on the date of the
Change of Control of ConAgra and ending on the date of
termination. For purposes of this Section 3(c), the
additional amount due hereunder shall be computed as if
Employee owned all of the Acquiror's stock with respect
to which Employee has an option to purchase in connection
with his employment with the Acquiror, ConAgra or any of
their subsidiaries. Said amount shall be paid to
Employee within ten days after termination. In addition,
if Employee sells any of the Acquiror's stock within one
year following said termination, Employee shall receive
the amount by which the closing price of such stock per
share on the date of termination (determined as
aforesaid) exceeds the per share actual net sales price
of the Acquiror's stock on the date of sale realized by
Employee, multiplied by the number of shares sold by
Employee. Said amount shall be paid in immediately
available funds to Employee within ten days after the
sale. In addition, to the extent any of ConAgra's common
stock remains outstanding after a Change of Control, then
Employee shall receive additional amounts computed and
payable in a manner similar to that provided in this
Section 3(c) for Acquiror's stock owned, or subject to an
option held, by Employee. These provisions shall be
appropriately modified or adjusted to take into account
the fact that the computations pursuant to the preceding
sentence are with respect to ConAgra common stock and
related options rather than the Acquiror's capital stock
and options related thereto. The computations and
payments under this Section 3(c) shall include
appropriate adjustments for any stock splits, stock
dividends, recapitalizations or similar share
restructurings that may occur from time to time.
4. MERGER. ConAgra shall not merge, reorganize, consolidate
or sell all or substantially all of its assets, to or with any
other corporation until such corporation and its subsidiaries, if
any, expressly assume the duties of ConAgra set forth herein.
5. CERTAIN ADDITIONAL PAYMENTS BY CONAGRA.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that
any payment or distribution by ConAgra to or for the
benefit of the Employee, whether paid or payable or
distributed or distributable pursuant to the terms of
this Agreement or otherwise (a "Payment"), would be
subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or
any interest or penalties with respect to such excise tax
(such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in
any amount such that after payment by the Employee of all
taxes (including any interest or penalties imposed with
respect to such taxes), including any Excise Tax, imposed
upon the Gross-Up Payment, the Employee retains an amount
of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments.
(b) Subject to the provisions of Subsection (c) below,
all determinations required to be made under this
Section, including whether a Gross-Up Payment is required
and the amount of such Gross-Up Payment, shall be made by
the certified public accounting firm then representing
ConAgra (the "Accounting Firm") which shall provide
detailed supporting calculations both to ConAgra and the
Employee within 15 business days of the date of
termination, if applicable, or such earlier time as is
requested by ConAgra or Employee. If the Accounting Firm
determines that no Excise Tax is payable by the Employee,
it shall furnish the Employee with an opinion that he has
substantial authority not to report any Excise Tax on his
federal income tax return. Any determination by the
Accounting Firm shall be binding upon ConAgra and the
Employee. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of
the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which
will not have been made by ConAgra should have been made
("Underpayment"), consistent with the calculations
required to be made hereunder. In the event that ConAgra
exhausts its remedies pursuant to Subsection (c) below
and the Employee thereafter is required to make a payment
of any Excise Tax, the Accounting Firm shall determine
the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by ConAgra to or
for the benefit of the Employee.
(c) The Employee shall notify ConAgra in writing of any
claim by the Internal Revenue Service that, if
successful, would require the payment by ConAgra of the
Gross-Up Payment. Such notification shall be given as
soon as practicable but no later than ten (10) business
days after the Employee knows of such claim and shall
apprise ConAgra of the nature of such claim and the date
on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration
of the thirty-day (30 day) period following the date on
which it gives such notice to ConAgra (or such shorter
period ending on the date that any payment of taxes with
respect to such claim is due). If ConAgra notifies the
Employee in writing prior to the expiration of such
period that it desires to contest such claim, the
Employee shall:
(i) give ConAgra any information reasonably
requested by ConAgra relating to such claim,
(ii) take such action in connection with contesting
such claim as ConAgra shall reasonably request
in writing from time to time, including,
without limitation, accepting legal
representation with respect to such claim by
an attorney reasonably selected by ConAgra,
(iii) cooperate with ConAgra in good faith in order
to effectively contest such claim,
(iv) permit ConAgra to participate in any
proceedings relating to such claim;
provided, however, that ConAgra shall bear and pay
directly all costs and expenses (including additional
interest and penalties) incurred in connection with such
contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and
payment of costs and expenses. Without limitation on the
foregoing provisions of this Subsection (c), ConAgra
shall control all proceedings taken in connection with
such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either
direct the Employee to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner,
and the Employee agrees to prosecute such contest to a
determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more
appellate courts, as ConAgra shall determine; provided,
however, that if ConAgra directs the Employee to pay such
claim and sue for a refund, ConAgra shall advance the
amount of such payment to the Employee, on an interest-
free basis and shall indemnify and hold the Employee
harmless, on an after-tax basis, from any Excise Tax or
income tax, including interest or penalties with respect
thereto, imposed with respect to such advance or with
respect to any imputed income with respect to such
advance; and further provided that any extension of the
statute of limitations relating to payment of taxes for
the taxable year of the Employee with respect to which
such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, ConAgra's
control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Employee shall be entitled to settle or
contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount
advanced by ConAgra pursuant to Subsection (c) above, the
Employee becomes entitled to receive any refund with
respect to such claim, the Employee shall (subject to
ConAgra's complying with the requirements of Subsection
(c)) promptly pay to ConAgra the amount of such refund
(together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt
by the Employee of an amount advanced by ConAgra pursuant
to Subsection (c), a determination is made that the
Employee shall not be entitled to any refund with respect
to such claim and ConAgra does not notify the Employee in
writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such
determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
6. TERM AND BINDING EFFECT. This Agreement shall bind
ConAgra and Employee as long as Employee remains in the employ of
ConAgra; provided, however, ConAgra may terminate this Agreement at
any time by giving notice to Employee; and provided further,
however, that ConAgra may not terminate this Agreement at any time
subsequent to the announcement of an event that could result in a
Change of Control of ConAgra. This Agreement shall be binding upon
the parties hereto, their heirs, executors, administrators and
successors.
7. CERTAIN DEFINITIONS. The following definitions shall
apply for the purposes of this Agreement:
(a) CHANGE OF CONTROL OF CONAGRA. The term "Change of
Control" shall mean:
(i) The acquisition (other than from ConAgra) by
any person, entity or "group", within the
meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934 (the "Exchange
Act"), (excluding, for this purpose, ConAgra
or its subsidiaries, or any employee benefit
plan of ConAgra or its subsidiaries, which
acquires beneficial ownership of voting
securities of ConAgra) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 30% or more of
either the then outstanding shares of common
stock or the combined voting power of
ConAgra's then outstanding voting securities
entitled to vote generally in the election of
directors; or
(ii) Individuals who, as of the date hereof,
constitute the Board (as of the date hereof
the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board,
provided that any person becoming a director
subsequent to the date hereof whose election,
or nomination for election by ConAgra's
shareholders, was approved by a vote of at
least a majority of the directors then
comprising the Incumbent Board shall be, for
purposes of this Agreement, considered as
though such person were a member of the
Incumbent Board; or
(iii) Approval of the shareholders of ConAgra of a
reorganization, merger, consolidation, in each
case, with respect to which persons who were
the shareholders of ConAgra immediately prior
to such reorganization, merger or
consolidation do not, immediately thereafter,
own more than 50% of the combined voting power
entitled to vote generally in the election of
directors of the reorganized, merged or
consolidated company's then outstanding voting
securities, or a liquidation or dissolution of
ConAgra or of the sale of all or substantially
all of its assets.
(b) INVOLUNTARY TERMINATION. The term "Involuntary
Termination" or any variation thereof shall mean either
(i) the actual involuntary termination of Employee's
employment with the Acquiror, ConAgra and their
subsidiaries after a Change of Control (with or without
cause) or (ii) the constructive involuntary termination
of the Employee's employment with the Acquiror, ConAgra
and their subsidiaries after a Change of Control. The
term "constructive involuntary termination" shall include
(w) a reduction in the Employee's compensation (including
applicable fringe benefits); (x) a substantial change in
the location of the Employee's job without the Employee's
written consent; (y) the Employee's demotion or
diminution in the Employee's position, authority, duties
or responsibilities without the Employee's written
consent; or (z) the sale or disposition of the stock of
Employee's immediate employer, which was a subsidiary of
the Acquiror, ConAgra, or their other subsidiaries
immediately prior to such sale or disposition, provided
Employee is not employed after such sale or disposition
by the Acquiror, ConAgra, or any of their subsidiaries
that are retained after such sale or disposition.
"Substantial change in location" means any location
change in excess of 35 miles from the location of the
Employee's job with ConAgra or its subsidiaries at the
time of the Change of Control of ConAgra.
8. COSTS. All costs of litigation necessary for the
Employee to defend the validity of this contract are to be paid by
ConAgra or its successors or assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement.
EMPLOYEE: CONAGRA, INC.
/s/ JAMES P. O'DONNELL BY: /s/ PHILIP B. FLETCHER
___________________________ ___________________________
JAMES P. O'DONNELL Chairman, Board of Directors
EXHIBIT 12.1
CONAGRA, INC. AND SUBSIDIARIES
COMPUTATIONS OF RATIOS OF EARNINGS TO FIXED
CHARGES AND OF EARNINGS TO COMBINED FIXED
CHARGES & PREFERRED STOCK DIVIDENDS
($ IN MILLIONS)
Nine
Months Ended
February 27,
1994
____________
Fixed charges:
Interest expense $ 214.8
Capitalized interest 1.1
Interest in cost of goods sold 10.5
One third of non-cancellable lease rent 33.1
------------
Total fixed charges (A) 259.5
Add preferred stock dividends of the company 29.5
------------
Total fixed charges and preferred stock
dividends (B) $ 289.0
============
Earnings:
Pretax income $ 507.1
Adjustment for unconsolidated subidiaries (1.8)
------------
Pretax income of the Company as a whole 505.3
Add fixed charges 259.5
Less capitalized interest (1.1)
------------
Earnings and fixed charges (C) $ 763.7
============
Ratio of earnings to fixed charges (C/A) 2.9
Ratio of earnings to combined fixed charges
and preferred stock dividends (C/B) 2.6
For the purpose of computing the above ratio of earnings to
fixed charges, earnings consist of income before taxes and fixed
charges. Fixed charges, for the purpose of computing earnings
are adjusted to exclude interest capitalized and that component
of fixed charges representing ConAgra's proportionate share of
the preferred stock dividend requirement of a 50% owned
subsidiary. Fixed charges include interest on both long and
short term debt (whether said interest is expensed or
capitalized and including interest charged to cost of goods
sold), a portion of noncancellable rental expense representative
of the interest factor and ConAgra's proportionate share of the
preferred stock dividend requirement of a 50% owned subsidiary,
excluding that which would be eliminated in consolidation. The
ratio is computed using the amounts for ConAgra as a whole,
including its majority-owned subsidiaries, whether or not
consolidated, and its proportionate share of any 50% owned
subsidiaries, whether or not ConAgra guarantees obligations of
these subsidiaries.
For purposes of calculating the above ratio of earnings to
combined fixed charges and preferred dividends, preferred stock
dividend requirements (computed by increasing preferred stock
dividends to an amount representing the pre-tax earnings which
would be required to cover such dividend requirements) are
combined with fixed charges as described above, and the total is
divided into earnings as described above.
