UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
March 31, 2006
Date of report (Date of earliest event reported)
ConAgra Foods, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Delaware
(State or Other Jurisdiction of Incorporation)
1-7275 47-0248710
(Commission File Number) (IRS Employer Identification No.)
One ConAgra Drive
Omaha, NE 68102
(Address of Principal Executive Offices) (Zip Code)
(402) 595-4000
(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
Following a review of market practices, the Board of Directors of ConAgra
Foods has implemented new change of control agreements for certain officers and
eliminated prior agreements for other officers. The new agreements dated March
31, 2006 reduce the overall potential cost of providing benefits following a
change of control while continuing to provide appropriate protection for key
individuals. The officers include Gary Rodkin (President and Chief Executive
Officer) and three officers named in the 2005 proxy statement summary
compensation table, Frank Sklarsky (Executive Vice President and Chief Financial
Officer), Owen Johnson (Executive Vice President, Organization and
Administration and Corporate Secretary) and John Gehring (Senior Vice President
and Controller) (the "Executives").
Benefits are payable under the change of control agreements in lieu of any
severance compensation and benefits under the company's severance plan if,
within three years of a "change of control" (as defined in the agreements), (1)
the Executive's employment is involuntarily terminated without "cause" (as
defined in the agreements) or (2) the Executive terminates his or her employment
for good reason (as defined in the agreements as a "good reason termination").
Conditioned on the execution of a release of all claims against ConAgra
Foods, each Executive who is entitled to benefits under a change of control
agreement will receive: a lump sum cash payment equal to a multiple of the
Executive's base salary and annual bonus (calculated using the Executive's
highest annual bonus for the three fiscal years preceding the change of control
or the Executive's current target bonus, whichever is greater); continuation for
three years of medical, dental, disability, basic and supplemental life
insurance to the extent such benefits remain in effect for other executives,
with Executive making any required contributions except that ConAgra Foods must
pay the Executive's cost of medical and dental coverage on a gross-up after-tax
basis; benefits under the company's nonqualified supplemental pension plan
commensurate with adding three years to the Executive's years of service and age
(except for Mr. Rodkin, whose pension benefits are determined by his employment
agreement), which benefits must be funded in a lump sum through a segregated
trust (that remains subject to the claims of the company's creditors) within 60
days following the termination of employment; a supplemental benefit under the
company's nonqualified 401(k) plan equal to three times the maximum company
contribution that the Executive could have received under the qualified and
nonqualified 401(k) plans in the year in which the change of control occurs; and
outplacement assistance not exceeding $30,000. The multiples for the officers
range from 1 to 3, and are 3 for Messrs. Rodkin, Sklarsky and Johnson and 2 for
Mr. Gehring.
The change of control agreements also provide that (1) upon a change of
control, ConAgra Foods may (at the sole and absolute discretion of the Board of
Directors or Human Resources Committee) pay each Executive all or a prorated
portion of the Executive's short and/or long term incentive for the year in
which the change of control occurs and (2) each Executive is entitled to an
additional payment, if necessary, to make the Executive whole as a result of any
excise and related taxes imposed by the Internal Revenue Code on any change of
control benefits, except if the safe harbor amount at which the excise tax is
imposed is not exceeded by more than 10%, in which event the benefits will be
reduced to avoid the excise tax (which exception does not apply to Mr. Rodkin's
agreement).
Each change of control agreement terminates, in the absence of a change of
control, when the Executive's employment as a full-time employee of the company
is terminated or the Executive enters into a written separation agreement with
the company. In addition, ConAgra Foods may unilaterally terminate each
agreement prior to a change of control following six months prior written notice
to the Executive.
The foregoing description is qualified in its entirety by reference to the
form of the change of control agreements attached hereto as Exhibit 10.1 and
incorporated herein by reference.
Item 1.02. Termination of a Material Definitive Agreement.
The change of control agreements supersede previous conditional employment
agreements between ConAgra Foods and certain of its officers; the company has
effected the termination of the conditional employment agreements by delivering
termination notices to all officers with such agreements. The conditional
employment agreements required the individuals to support the position of the
Board of Directors with respect to any event by which another entity would
acquire effective control of ConAgra Foods (as defined in the agreements)
through a tender offer, merger or otherwise. In consideration of this promise,
ConAgra Foods agreed to employ the individual for three years after the event by
which another entity acquires effective control of ConAgra Foods. During that
three year period, the individual would receive annually an amount not less than
the individual's current annual base compensation, plus the greater of (i) the
individual's maximum allowable target short-term incentive compensation (as
defined in the agreement) or (ii) the individual's highest short-term incentive
award during the prior three fiscal years, plus an amount equal to the
individual's highest per unit award under the long-term compensation plan made
during the three fiscal years immediately preceding such acquisition of control
multiplied by the number of participation units for the current fiscal year. In
addition, the individual would be entitled to those retirement benefits
receivable had the individual worked to normal retirement age.
The form of such conditional employment agreement was filed as Exhibit 10.1
to ConAgra Foods Form 10-K for the fiscal year ended May 25, 2003.
Item 9.01. Financial Statements and Exhibits.
Exhibit 10.1. Form of Change of Control Agreement
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CONAGRA FOODS, INC.
Date: March 31, 2006 By: /s/ Frank S. Sklarsky
Name: Frank S. Sklarsky
Title: Executive Vice President and
Chief Financial Officer
EXHIBIT INDEX
Exhibit Description Page No.
Exhibit 10.1. Form of Change of Control Agreement..........................