UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(Amendment No. )
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[ ] Preliminary Proxy Statement
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[XX] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CONAGRA FOODS, INC.
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CONAGRA FOODS
PROXY STATEMENT
for
September 26, 2002
Annual Stockholders' Meeting
of ConAgra Foods, Inc.
CONAGRA FOODS
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE 68102-5001
TEL: 402-595-4000
Bruce Rohde
Chairman and
Chief Executive Officer
Dear Stockholder:
It's our pleasure to invite you to ConAgra Foods, Inc.'s Annual Meeting
of Stockholders in Omaha on September 26, 2002. In the following pages you'll
find information about the meeting plus a Proxy Statement.
A brief reception will precede the meeting and management presentation,
followed by a question and answer session for stockholders.
If you can't be with us in person, please be sure to vote your shares
by proxy. Just mark, sign and date the enclosed proxy card and return it in the
postage-paid envelope. Stockholders may also vote by telephone or via the
Internet.
Your prompt response is appreciated. In person or by proxy, your vote
is important. Thank you!
Sincerely,
/s/ Bruce Rohde
Bruce Rohde
August 22, 2002
CONAGRA FOODS
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE 68102-5001
TEL: 402-595-4000
James P. O'Donnell
Executive Vice President, CFO
and Corporate Secretary
To ConAgra Foods, Inc. Stockholders:
ConAgra Foods, Inc.'s Annual Stockholders' Meeting will be held on
Thursday, September 26, 2002 at the Omaha Civic Auditorium Music Hall, 1804
Capitol Avenue, Omaha, Nebraska. The meeting will begin promptly at 1:30 p.m.
Matters to be voted on at the meeting are:
o Election of Directors.
o Ratify appointment of independent auditors for fiscal 2003.
Stockholders of record as of the close of business on July 31, 2002 are
eligible to vote at the Annual Stockholders' Meeting.
It's important that your shares be represented whether or not you plan
to attend. You may vote by marking, signing and dating the enclosed proxy card
and returning it in the postage paid envelope. Stockholders may also vote by
telephone or via the Internet. If you attend the meeting, you may withdraw your
proxy at that time and vote your shares in person.
Given the current business environment, we think it is important to
point out some of ConAgra Foods' longstanding practices which have aligned the
long term interests of shareholders and management. We have a history of neither
repricing stock options nor providing loans to directors and executive officers.
We also believe directors and executive officers should retain their stock
through thick and thin. We believe these are significant differences between
ConAgra Foods and many other public companies.
To further our commitment to these principles, the Company enhanced
insider stock trading restrictions and implemented additional corporate
governance practices during the last fiscal year. In fiscal 2002:
o We formalized a prohibition on any stock sales by directors and executive
officers until at least six months after leaving the Company or the board.
o We established a Corporate Governance Committee of the board of directors.
The Corporate Governance Committee establishes and periodically reviews the
Company's governance policies.
o We established a Corporate Nominating Committee of the board of directors.
The Corporate Nominating Committee evaluates potential director candidates.
Our Board and management recognize that good governance principles like
these are important to generating and sustaining shareholder value over the long
term.
By order of the Board of Directors.
/s/ James P. O'Donnell
James P. O'Donnell
August 22, 2002
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, Nebraska 68102-5001
PROXY STATEMENT
Annual Meeting of Stockholders to be held September 26, 2002
Proxy Solicitation by the Board of Directors
This statement is furnished in connection with the Annual Meeting of
Stockholders to be held at the Omaha Civic Auditorium Music Hall, 1804 Capitol
Avenue, Omaha, Nebraska. The meeting will begin promptly at 1:30 p.m. on
September 26, 2002. Stockholders of record at the close of business on July 31,
2002 will be entitled to vote at the meeting.
PROXIES
Your vote is very important. For this reason, the Board of Directors is
requesting that you use the enclosed proxy card to vote your shares. If the
accompanying proxy is executed, the shares represented by the proxy will be
voted as specified. You may also vote your shares by delivering your proxy by
telephone or via the Internet. The Company may retain a proxy solicitor to
assist in the solicitation of proxies, for which the Company would pay usual and
customary fees. This Proxy Statement is being mailed to stockholders on or about
August 22, 2002.
If a broker, bank or other nominee holds your Common Stock, you will receive
instructions from them that you must follow in order to have your shares voted.
If you hold certificate(s) in your own name as a holder of record, you may vote
your Common Stock by signing, dating and mailing the proxy card in the postage
paid envelope provided. Of course, you can always come to the meeting and vote
your shares in person.
You may revoke the proxy before the meeting, whether delivered by telephone,
Internet or through the mail, by using the telephone voting procedures, the
Internet voting procedures or by mailing a signed instrument revoking the proxy
to: James P. O'Donnell, Corporate Secretary, ConAgra Foods, Inc., One ConAgra
Drive, Omaha, Nebraska, 68102; to be effective, a mailed revocation must be
received by the Secretary on or before September 25, 2002. A stockholder may
attend the meeting in person, withdraw the proxy and vote in person.
VOTING SECURITIES
The Company at July 31, 2002 had issued and outstanding 537,124,574 voting
shares of Common Stock. Each share of Common Stock is entitled to one vote.
There were no shares of voting Preferred Stock outstanding at July 31, 2002.
The presence of a majority of the outstanding Common Stock represented in
person or by proxy at the meeting will constitute a quorum. Shares represented
by proxies that are marked "abstain" will be counted as shares present for
purposes of determining the presence of a quorum. Proxies relating to "street
name" shares that are voted by brokers on some matters will be treated as shares
present for purposes of determining the presence of a quorum, but will not be
treated as shares entitled to vote at the annual meeting on those matters as to
which authority to vote is withheld by the broker ("broker non-votes").
The four nominees receiving the highest vote totals will be elected as
Directors of ConAgra Foods, Inc. Accordingly, abstentions and broker non-votes
will not affect the outcome of the election of Directors.
All other matters to be voted on will be decided by the affirmative vote of
a majority of the shares present or represented at the meeting and entitled to
vote. On any such matter, an abstention will have the same effect as a negative
vote. A broker non-vote will not be counted as an affirmative vote or a negative
vote because shares held by brokers will not be considered entitled to vote on
matters as to which the brokers withhold authority.
VOTING SECURITIES OWNED BY
CERTAIN BENEFICIAL OWNERS
The following stockholders report ownership of more than 5% of the Company's
outstanding Common Stock:
BENEFICIAL PERCENT OF
NAME OWNERSHIP CLASS
---- --------- -----
State Street Bank and Trust Company 37,505,363 (1) 7.0%
225 Franklin Street
Boston, MA 02110
AXA Financial, Inc. 35,394,622 (2) 6.6%
1290 Avenue of the Americas
New York, NY 10104
(1) Based on a Schedule 13G report filed February 5, 2002.
(2) Based on a Schedule 13G report filed February 12, 2002.
VOTING SECURITIES OWNED
BY EXECUTIVE OFFICERS AND DIRECTORS
The following table shows certain information on ConAgra Foods, Inc.'s
Common Stock beneficially owned by directors and the executive officers named in
the summary compensation table as of July 31, 2002. No director or executive
officer beneficially owned 1% or more of ConAgra Foods, Inc.'s Common Stock,
other than Mr. Batchelder, who may be deemed to beneficially own 1.7% of the
outstanding Common Stock. The directors and all executive officers as a group
beneficially owned 2.2% of ConAgra Foods, Inc.'s outstanding Common Stock. The
shares shown as beneficially owned include shares which executive officers and
directors are entitled to acquire pursuant to outstanding stock options
exercisable within sixty days of July 31, 2002.
BENEFICIAL
NAME TITLE OF CLASS OWNERSHIP (1)
David H. Batchelder Common Stock 8,887,600
Mogens C. Bay Common Stock 64,000
Howard G. Buffett Common Stock 8,014
John T. Chain, Jr. Common Stock 35,800
Alice B. Hayes Common Stock 11,305
W. G. Jurgensen Common Stock 0
Robert A. Krane Common Stock 130,012
Mark H. Rauenhorst Common Stock 38,366
Carl E. Reichardt Common Stock 107,200
Bruce Rohde Common Stock 1,224,377
Ronald W. Roskens Common Stock 97,800
Kenneth E. Stinson Common Stock 68,000
Kenneth W. Gerhardt Common Stock 147,733
Dwight J. Goslee Common Stock 317,267
Owen C. Johnson Common Stock 172,868
James P. O'Donnell Common Stock 312,036
Directors and Executive
Officers as a Group
(22 Persons) Common Stock 12,013,566
(1) Shares reported include shares owned by spouses of directors and executive
officers; 8,887,600 shares held by an investment advisory firm, for which Mr.
Batchelder is one of the managing members and may be deemed beneficial owner of
the shares for certain purposes; 857 shares owned by a charitable foundation for
which Mr. Rauenhorst is a director and disclaims beneficial ownership; and
2,253,940 shares which directors and executive officers are entitled to acquire
pursuant to stock options exercisable within sixty days of July 31, 2002.
ITEM 1: BOARD OF DIRECTORS AND ELECTION
The Company's Board of Directors is presently composed of twelve members,
divided into three classes. Each class serves for three years on a
staggered-term basis.
The following paragraphs set forth the principal occupation of each director
for the last five years, other positions each has held, the date each was first
elected a director of the Company, the date each director's term expires, and
the age of each director. Directors who are nominees for election at the 2002
Annual Stockholders' Meeting are listed first.
HOWARD G. BUFFETT - Nominee - Decatur, Illinois
President of BioImages (photography and publishing) and President of Buffett
Farms. Former Chairman of the Board of The GSI Group (manufacture of
agricultural equipment) from June 1996 to August 2001. Director of Berkshire
Hathaway, Inc., Coca Cola Enterprises Inc., and Lindsay Manufacturing Co. Mr.
Buffett has been a director since January 25, 2002. His current term expires
September 26, 2002. He is 47 years of age.
JOHN T. CHAIN, JR. - Nominee - Fort Worth, Texas
Chairman of the Thomas Group (international management consulting). Retired
General, United States Air Force, former Commander-in-Chief of the Strategic Air
Command. Director of RJ Reynolds Tobacco, Inc., Kemper Insurance Companies and
Northrup Grumman, Inc. Mr. Chain has been a director since May 4, 2001. His
current term expires September 26, 2002. He is 67 years of age.
RONALD W. ROSKENS - Nominee - Omaha, Nebraska
President of Global Connections, Inc. (international business consulting). Head
of U.S. Agency for International Development from 1990 until December 1992.
President of University of Nebraska from 1977 to 1989. Mr. Roskens has been a
director since December 3, 1992. His current term expires September 26, 2002. He
is 69 years of age.
KENNETH E. STINSON - Nominee - Omaha, Nebraska
Chairman and Chief Executive Officer of Peter Kiewit Sons', Inc. (construction
and mining). Director of Valmont Industries, Inc., Kiewit Materials Co., and
Level 3 Communications, Inc. Mr. Stinson has been a director since December 12,
1996. His current term expires September 26, 2002. He is 59 years of age.
The following directors serve for terms that expire after 2002:
DAVID H. BATCHELDER - San Diego, California
Managing Member of Relational Investors LLC (investment advisory firm) and
Chairman of Batchelder & Partners, Inc. (investment advisory and consulting
firm). Director of Apria Healthcare Group, Inc., Nuevo Energy Company, and
Washington Group International, Inc. Mr. Batchelder has been a director since
August 2, 2002. His current term expires September 25, 2003. He is 53 years of
age.
MOGENS C. BAY - Omaha, Nebraska
Chairman and Chief Executive Officer of Valmont Industries, Inc. (products for
water management and infrastructure) since January 1997. Director of Peter
Kiewit Sons', Inc. and Level 3 Communications, Inc. Mr. Bay has been a director
since December 12, 1996. His current term expires September 23, 2004. He is 53
years of age.
ALICE B. HAYES - San Diego, California
President of the University of San Diego since 1995. Executive Vice President
and Provost of Saint Louis University from 1989 to 1995. Director of Jack in the
Box, Inc. and Pulitzer, Inc. Ms. Hayes has been a director since August 3, 2001.
Her current term expires September 23, 2004. She is 64 years of age.
W.G. JURGENSEN - Columbus, Ohio
Chief Executive Officer of Nationwide Mutual Insurance Company since August
2000. Executive Vice President of Bank One Corporation from 1998 to 2000.
Executive Vice President of First Chicago NBD Corporation from 1996 to 1998.
Director of Nationwide Financial Services, Inc. Mr. Jurgensen has been a
director since August 2, 2002. His current term expires September 23, 2004. He
is 51 years of age.
ROBERT A. KRANE - Denver, Colorado
Consultant, KRA, Inc. from September 1990 to 1998; Retired President, Chief
Executive Officer and Director of Central Bancorporation, Inc. from June 1988
until January 1990; President, COO and Director of Central Bancorporation, 1986
to 1988; Vice Chairman and Director of Norwest Corporation, 1982 to 1985;
President and Director of Norwest Corporation, 1981 to 1982. Mr. Krane has been
a director since July 20, 1982. His current term expires September 25, 2003. He
is 68 years of age.
MARK H. RAUENHORST - Minnetonka, Minnesota
President and CEO of Opus Corporation (commercial real estate development and
construction). Director of Graco, Inc. Mr. Rauenhorst has been a director since
May 4, 2001. His current term expires September 25, 2003. He is 49 years of age.
CARL E. REICHARDT - San Francisco, California
Vice Chairman of Ford Motor Company since October 2001. Retired Chairman of the
Board of Directors of Wells Fargo & Company since 1994. Director of HCA-The
Healthcare Company, Ford Motor Co., McKesson HBOC, Inc. and Newhall Management
Corporation. Mr. Reichardt has been a director since March 1, 1993. His current
term expires September 23, 2004. He is 71 years of age.
BRUCE ROHDE -- Omaha, Nebraska
President of ConAgra Foods, Inc. since August 1996, Chief Executive Officer of
ConAgra Foods, Inc. since September 1997 and Chairman of the Board of ConAgra
Foods, Inc. since September 1998. Mr. Rohde has been a director since August 26,
1996. His current term expires September 25, 2003. He is 53 years of age.
It is intended that proxies will be voted "FOR" the election of the
above-indicated nominees. In case any nominee shall become unavailable for
election to the Board of Directors for any reason not presently known or
contemplated, the proxy holders will have discretionary authority in that
instance to vote the proxies for a substitute.
DIRECTORS' MEETINGS AND COMPENSATION
The Board of Directors meets on a regularly scheduled basis. During fiscal
2002, the Board met nine times. The Board of Directors has adopted the ConAgra
Foods Corporate Governance Principles. The principles address the qualification
and selection of board members, board leadership, board structure and board
processes. The Corporate Governance Principles are available on our website at
www.conagrafoods.com.
The Board of Directors has assigned certain responsibilities to specific
committees. The Audit Committee assists the Board of Directors in fulfilling its
oversight responsibilities by reviewing (1) the financial statements of the
Company, (2) the independence and performance of the Company's independent
auditors and internal auditing department, and (3) the compliance by the Company
with legal and regulatory requirements. The Committee acts under a written
charter adopted by the Board of Directors. The Audit Committee met eight times
during fiscal 2002. In addition, the Chairman of the Audit Committee had
periodic conversations with Company management and representatives of Deloitte &
Touche during the fiscal year. For further information, see "Audit Committee
Report". Members of the Audit Committee are Robert A. Krane (Chairman), Mogens
C. Bay and Kenneth E. Stinson.
The Corporate Affairs Committee advises ConAgra Foods, Inc. management on
internal and external factors and relationships affecting the Company's image,
reputation, objectives and strategies. Focus areas include communications,
marketing, economics, government, regulation, sustainable development, community
affairs and stockholder relations. During fiscal 2002, the Corporate Affairs
Committee met five times. Members of the Corporate Affairs Committee are Howard
G. Buffett (Chairman), Alice B. Hayes and Mark H. Rauenhorst.
The Human Resources Committee reviews and approves the compensation of
employees above a certain position level, reviews proposals relating to
incentive compensation and benefit plans, and administers compensation plans
presently in effect for such employees. During fiscal 2002, the Human Resources
Committee met six times. Members of the Human Resources Committee are Carl E.
Reichardt (Chairman), John T. Chain, Jr. and Ronald W. Roskens.
The Corporate Governance Committee considers and makes recommendations to
the board concerning the appropriate size, functions and policies of the board,
the size and functions of the various committees of the board, and the corporate
governance principles of ConAgra Foods. The Corporate Governance Committee was
formed in February 2002 and met once during fiscal 2002. Members of the
Corporate Governance Committee are John T. Chain, Jr. (Chairman), Mogens C. Bay,
Alice B. Hayes and Kenneth E. Stinson.
The Nominating Committee identifies qualified candidates for membership on
the board, proposes to the board a slate of directors for election by the
stockholders at each annual meeting, and proposes to the board candidates to
fill vacancies on the board. The Nominating Committee will consider candidates
recommended by stockholders; written suggestions for nominees should be sent to
the Secretary of the Company. Stockholder nominations must comply with
applicable provisions of the Company's bylaws; see "Fiscal 2003 Stockholder
Proposals". The Nominating Committee was formed in February 2002 and met once
during fiscal 2002. Members of the Nominating Committee are Ronald W. Roskens
(Chairman), Howard G. Buffett and Carl E. Reichardt.
The Executive Committee generally has authority to act on behalf of the
Board of Directors between meetings. The Executive Committee did not meet during
fiscal 2002. Members of the Executive Committee are Bruce Rohde (Chairman),
Robert A. Krane and Carl E. Reichardt.
For their services on the Board, non-employee directors are paid $50,000 per
year. The Chairmen of the Human Resources, Audit, Corporate Affairs, Nominating
and Corporate Governance Committees are paid an additional $25,000 per year.
Each non-employee director is paid $1,500 per meeting attended. Mr. Krane was
paid an additional one-time $40,000 special assignment fee during fiscal 2002
for his extraordinary services in connection with the Audit Committee
investigation of accounting matters at the Company's UAP subsidiary. Each
non-employee director earns a grant of 1,800 shares of ConAgra Foods, Inc.
Common Stock per year under the ConAgra Foods, Inc. 2000 Stock Plan.
Non-employee directors also earn an annual grant of non-statutory options
exercisable at fair market value on date of grant to acquire 9,000 shares of
ConAgra Foods, Inc. Common Stock under the ConAgra Foods, Inc. 2000 Stock Plan.
Directors are also eligible to participate in the ConAgra Foods medical plan on
the same basis as ConAgra Foods employees.
Mr. Buffett serves at the request of the Company on the governing boards of
three joint ventures: a joint venture between South Africa based Tiger Oats and
ConAgra Foods for the manufacture and sale of malt products on multiple
continents, in which ConAgra Foods has a 50% interest, and a U.S. based venture
for environmental research and development, in which ConAgra Foods has a 50%
interest; Mr. Buffett receives $50,000 per annum from each of these ventures for
his services. Mr. Buffett also serves on the board of an India based venture for
the manufacture and sale of edible oil and bean products, in which ConAgra Foods
has a 33% interest; Mr. Buffett receives $50,000 per annum from the Company for
his services.
All directors of ConAgra Foods, Inc. are eligible to participate in the
Directors' Charitable Award Program, in which each director is entitled to name
one or more tax-exempt organizations to which ConAgra Foods, Inc. will
contribute an aggregate of $1 million in four equal annual installments upon the
death of the director. A director is vested in the Program upon completion of
three years of service as a director or upon the death, disability or mandatory
retirement of such director. ConAgra Foods, Inc. maintains insurance on the
lives of its directors to fund the Program. Directors derive no personal
financial benefit from the Program since any insurance proceeds and the
tax-deductible donations accrue solely to the benefit of ConAgra Foods, Inc.
ConAgra Foods enters into many lease agreements for land, buildings, and
equipment at competitive market rates, and some of the lease arrangements are
with Opus Corporation or its affiliates. Mark Rauenhorst, a director of ConAgra
Foods, is a beneficial owner and director of Opus Corporation. The agreements
relate to the leasing of land and buildings for ConAgra Foods. ConAgra Foods
occupies the buildings pursuant to long term leases with Opus Corporation and
its affiliates, some of which contain various termination rights and purchase
options. Leases effective in fiscal 2002 require annual lease payments by
ConAgra Foods of approximately $19 million. Opus Corporation had revenues of
approximately $1.3 billion in 2001. ConAgra Foods has leased or expects to lease
additional facilities, which are under construction or recently completed, in
fiscal 2003 from Opus Corporation or its affiliates for annual lease payments of
approximately $2.4 million. The lease payments will include the lessor's
borrowing costs for construction funds. ConAgra Foods in fiscal 2002 provided
construction financing at the company's short term borrowing rates which were
lower rates than the lessor would obtain from other lending sources. The
construction financing for each facility is provided for a period of less than a
year, secured by a mortgage on the facility, and repaid in full to the company
following the commencement of the lease. During fiscal 2002, the construction
financing provided by the Company to Opus Corporation or its affiliates totaled
approximately $41 million; all such amounts were repaid by August 14, 2002.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by ConAgra
Foods, Inc. for services rendered during fiscal years 2002, 2001 and 2000 for
the Chief Executive Officer and the next four highest compensated executive
officers of ConAgra Foods, Inc.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
Name/ Restricted Option LTIP All Other
Principal Position Fiscal Salary Bonus Stock Awards Grants Payouts Compensation
Year ($) ($) (1)(3) ($) (3) (#) (3) ($) (2) ($)
Bruce Rohde 2002 950,267 2,969,000 0 1,054,560 1,930,910 120,150
Chairman & 2001 950,472 0 0 300,000 0 31,122
Chief Executive 2000 950,705 2,440,000 0 225,840 1,185,660 103,588
Officer
Dwight J. Goslee 2002 494,273 781,625 0 226,520 643,637 36,354
Executive Vice President, 2001 411,538 150,000 482,500 20,000 0 14,480
Operations Control 2000 350,925 363,380 0 37,640 197,610 22,459
& Development
James P. O'Donnell 2002 450,000 575,100 0 151,520 643,637 33,930
Executive Vice 2001 450,000 0 0 20,000 0 15,846
President, Chief 2000 405,366 404,330 0 75,280 395,220 26,031
Financial Officer,
Corporate Secretary
Owen C. Johnson 2002 444,353 567,725 0 226,520 643,637 34,834
Executive Vice President, 2001 400,000 0 0 20,000 0 14,832
Human Resources and 2000 360,929 370,900 0 37,640 197,610 23,202
Administration
Kenneth W. Gerhardt 2002 360,000 460,080 0 90,760 321,818 26,388
Senior Vice President, 2001 360,000 0 0 15,000 0 12,649
Chief Information 2000 329,419 372,200 0 37,640 197,610 22,368
Officer
(1) Mr. Goslee received a restricted stock award of 25,000 shares on February
27, 2001 which vest 100% on February 27, 2006 and immediately upon death, total
disability or change in control. Under ConAgra Foods, Inc.'s long-term senior
management incentive program, certain awards are made in restricted stock
equivalent units (see footnote 3 below). The executive receives dividends on the
restricted stock and equivalent units. At the end of fiscal 2002, the aggregate
restricted (unvested) stock and / or equivalent holdings, valued at the closing
price of ConAgra Foods, Inc. Common Stock at May 26, 2002 without giving effect
to the diminution of value attributable to the restrictions on such stock or
units were: Mr. Rohde - $3,262,605 (131,769 shares/units); Mr. Goslee - $681,644
(33,628 shares/units); Mr. O'Donnell - $349,787 (17,256 shares/units); Mr.
Johnson - $966,174 (47,665 shares/units); and Mr. Gerhardt - $1,172,198 (57,829
shares/units). These shares cannot be sold until at least six months after the
individual leaves the Company.
(2) Amounts represent contributions by ConAgra Foods, Inc. to its qualified and
nonqualified 401(k) plans plus the dollar value for term life insurance
premiums. Fiscal year 2002 life premium values are as follows: Mr. Rohde,
$2,580; Mr. Goslee, $2,578; Mr. O'Donnell, $3,177; Mr. Johnson, $4,475; and Mr.
Gerhardt, $1,786.
(3) Prior to fiscal 1999, awards under ConAgra Foods, Inc.'s long-term senior
management incentive program were generally paid 50% in restricted stock and 50%
in cash (and reported in the restricted stock awards and LTIP payout columns,
respectively). Beginning in fiscal 1999, an amount equal to approximately 50% of
the award has been paid in restricted stock equivalent units, and in lieu of
cash a separate grant of stock options is made (exercisable at the market price
on the date of grant) equal to four times the number of restricted stock units.
Both the restricted stock units and the options vest over a period of years. For
fiscal 2002 LTIP payouts, restricted stock units vest over five years and
options vest over three years. The options are issued following the end of the
fiscal year in which earned (July 2002 for any fiscal 2002 grants) but are based
on services performed in the completed fiscal year and any such grants in July
2002 are reported above and in the Option Grant Table as fiscal 2002 grants.
Beginning in fiscal 2000, long-term senior management incentive program payouts
are reflected above in the LTIP payout column (for the value of restricted stock
equivalent units) and in the option grants column.
The following table sets forth information on grants of stock options
during the last fiscal year to the executive officers named in the Summary
Compensation Table. No stock appreciation rights were granted during
fiscal 2002.
OPTION GRANTS FOR FISCAL YEAR 2002
--------------------------------------------------------------------------------------------- -------------------
Individual Grants Grant Date Value
--------------------------------------------------------------------------------------------- -------------------
% of Total
Options Option Grants Per Share Grant Date Present
Granted To Employees Exercise Expiration Value
For Fiscal 2002 Price ($) Date ($) (3)
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Bruce Rohde (1) 750,000 7.35% 22.00 9/27/2011 3,807,750
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Bruce Rohde (2) 304,560 2.98% 25.36 7/12/2012 1,772,539
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Dwight J. Goslee (1) 125,000 1.22% 22.00 9/27/2011 634,625
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Dwight J. Goslee (2) 101,520 0.99% 25.36 7/12/2012 590,846
------------------------------ ------------ ------------------ -------------- --------------- -------------------
James P. O'Donnell (1) 50,000 0.49% 22.00 9/27/2011 253,850
------------------------------ ------------ ------------------ -------------- --------------- -------------------
James P. O'Donnell (2) 101,520 0.99% 25.36 7/12/2012 590,846
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Owen C. Johnson (1) 125,000 1.22% 22.00 9/27/2011 634,625
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Owen C. Johnson (2) 101,520 0.99% 25.36 7/12/2012 590,846
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Kenneth W. Gerhardt (1) 40,000 0.39% 22.00 9/27/2011 203,080
------------------------------ ------------ ------------------ -------------- --------------- -------------------
Kenneth W. Gerhardt (2) 50,760 0.50% 25.36 7/12/2012 295,423
------------------------------ ------------ ------------------ -------------- --------------- -------------------
(1) These options were granted on September 27, 2001 at the then fair market
price of ConAgra Foods, Inc.'s Common Stock. These options become exercisable in
20% annual installments commencing September 27, 2001. The options become
immediately exercisable upon death, change in control of the company (as defined
in the Stock Plan) or retirement. Shares acquired on exercise of the options are
restricted for one year in case of voluntary termination and in certain
involuntary termination situations as determined by the Human Resources
Committee. In addition, these beneficial owners may not sell the stock issued
pursuant to these options until at least six months after the individual leaves
the Company.
(2) These options were granted on July 12, 2002 at the then fair
market price of ConAgra Foods, Inc.'s Common Stock. The options become
exercisable as to 40% of the shares on the first anniversary, 30% of the shares
on the second anniversary, and 30% of the shares on the third anniversary of the
grant. The options become immediately exercisable upon death, change in control
of the Company (as defined in the Stock Plan) or retirement. These options were
granted in July 2002 (fiscal 2003) but were awarded based upon fiscal 2002
performance and therefore are shown with fiscal 2002 compensation information.
In addition, these beneficial owners may not sell the stock issued pursuant to
these options until at least six months after the individual leaves the Company.
(3) The estimated grant date present value reflected in the above table is
determined pursuant to SEC regulations using the Black-Scholes model. The
material assumptions and adjustments incorporated in the Black-Scholes model in
estimating the value of the option grants reflected in the above table include
the following for the options granted September 27, 2001: (1) exercise price of
the options ($22.00) equal to the fair market value of the underlying stock on
the date of grant; (2) expected average option life of six years; (3) dividend
yield of 3.85%; (4) risk-free interest rate of 4.52%; and (5) expected
volatility of 29.0%; and for the options granted 7/12/02: (1) exercise price of
the options ($25.36) equal to the fair market value of the underlying stock on
the date of grant; (2) expected average option life of six years; (3) dividend
yield of 3.85%; (4) risk-free interest rate of 4.46%; and (5) expected
volatility of 29.0%. The ultimate value of the grants will depend on the future
market price of the Company's Common Stock, which cannot be forecast with
reasonable accuracy. The actual value, if any, an optionee will realize upon
exercise of an option will depend on the excess of the market value of the
Company's Common Stock over the exercise price on the date the option is
exercised.
The following table sets forth information on aggregate option exercises in
the last fiscal year and information with respect to the value of unexercised
options to purchase ConAgra Foods, Inc.'s Common Stock for the executive
officers named in the Summary Compensation Table.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2002
AND FY-END OPTION VALUES
----------------------- --------------- -------------- -------------------------------- --------------------------------
Unexercised Options Value of Unexercised
Held at FY-End In-the-Money Options
(#) (2) At FY-End ($) (2) (3)
----------------------- --------------- -------------- -------------------------------- --------------------------------
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Shares
Acquired Value Realized
On Exercise ($) (1) Exercisable Unexercisable Exercisable Unexercisable
(#) ($) ($)
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Bruce Rohde 0 0 836,141 1,029,741 1,631,266 3,067,892
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Dwight J. Goslee 15,000 98,750 148,566 148,623 587,028 406,036
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
James P. O'Donnell 18,000 75,299 170,879 115,247 827,381 325,352
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Owen C. Johnson 0 0 88,172 159,660 155,691 406,036
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Kenneth W. Gerhardt 0 0 85,028 82,624 101,251 207,076
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
(1) Value realized is the difference between the closing price of ConAgra Foods,
Inc.'s Common Stock at the time of exercise and the exercise price of the
options multiplied by the number of shares.
(2) Does not include options granted
in fiscal 2003 based upon fiscal 2002 performance. Such options were not
outstanding at fiscal 2002 year end.
(3) Value shown is the difference between
the closing price of ConAgra Foods, Inc.'s Common Stock on the last trading day
of fiscal 2002 and the exercise price of in-the-money options multiplied by the
number of shares subject to in-the-money options.
The following table provides information concerning participation units
approved by the Human Resources Committee (the "Committee") for the executive
officers named in the Summary Compensation Table under the long-term senior
management incentive program. The long-term senior management incentive program
rewards participants, including executive officers, based on ConAgra Foods,
Inc.'s ability to increase earnings per share, with awards at target levels. The
Committee selects participants, including executive officers, on an annual
basis, and the participants are eligible to share in an award pool capped at 8%
of ConAgra Foods, Inc.'s excess after-tax earnings over and above a minimum 5%
compound growth rate from a five-year average earnings base. Payouts for the
long-term program beginning in fiscal 2003 will be made in restricted share
equivalent units, and stock options (or alternatively in cash vesting over a
period of years). The target award reflected below is based on a Committee
approved growth rate over the base year, with awards at target levels.
LONG-TERM INCENTIVE AWARDS
------------------------- ------------------- ------------------- -------------------------------------------------
Estimated Future Payouts
------------------------- ------------------- ------------------- ------------- -------------------- --------------
Performance or
Number of other Period Until
Shares, Units or Maturation or Threshold Target Maximum
Other Rights Payout (#) (#) (#)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
Bruce Rohde 12 (1) 0 67,200 (1) N/A
------------------------- ------------------- ------------------- ------------- -------------------- --------------
268,800 (2)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
Dwight J. Goslee 4 (1) 0 22,400 (1) N/A
------------------------- ------------------- ------------------- ------------- -------------------- --------------
89,600 (2)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
James P. O'Donnell 4 (1) 0 22,400 (1) N/A
------------------------- ------------------- ------------------- ------------- -------------------- --------------
89,600 (2)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
Owen C. Johnson 4 (1) 0 22,400 (1) N/A
------------------------- ------------------- ------------------- ------------- -------------------- --------------
89,600 (2)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
Kenneth W. Gerhardt 2 (1) 0 11,200 (1) N/A
------------------------- ------------------- ------------------- ------------- -------------------- --------------
44,800 (2)
------------------------- ------------------- ------------------- ------------- -------------------- --------------
(1) Amount represents the target number of the share equivalent units under the
program and is dependent on both earnings and stock price. See description
above. Any share equivalent units issued under the program are restricted and
will be issued under ConAgra Foods stock plans. The participants receive Common
Stock dividend cash equivalents on the share equivalents. The share equivalent
units vest on the fifth anniversary of issuance, or earlier upon death, normal
retirement, permanent disability, or change in control. If a participant
terminates employment, the share equivalent units vest 20% per year of
employment post-issuance, unless the termination was for cause. Vested units are
paid in shares of Common Stock.
(2) Amount represents the target number of non-qualified stock options which may
be issued in connection with the incentive program and is dependent on both
earnings and stock price. A cash award of equal value may be substituted, which
would vest 20% per year, and be used to purchase stock when vested. Any options
will be issued under ConAgra Foods stock plans, and will be exercisable at the
market price of ConAgra Foods, Inc. Common Stock on the date of grant.
BENEFIT PLANS AND RETIREMENT PROGRAMS
ConAgra Foods, Inc. maintains a non-contributory defined benefit pension
plan for all eligible employees. Certain ConAgra Foods, Inc. employees,
including executive officers, participate in a supplemental retirement plan
designed to provide pension benefits to which such persons would be entitled,
but for the limit on the maximum annual benefits payable under the Employee
Retirement Income Security Act of 1974 and the limit under the Internal Revenue
Code on the maximum amount of compensation which may be taken into account under
ConAgra Foods, Inc.'s basic defined benefit pension plan.
The following table shows typical annual benefits computed on the basis of a
straight life annuity payable on a combined basis under the basic pension
program and the supplemental retirement plan, based upon retirement in 2002 at
age 65, to persons in specified remuneration and credited years-of-service
classifications. Annual retirement benefits set forth below are not subject to
reduction for social security or other offset amounts.
PENSION PLAN TABLE
---------------------- ---------------------------------------------------------------------------------------------------------
Credited Years of Service
---------------------- ---------------------------------------------------------------------------------------------------------
Final Average
Remuneration 10 15 20 25 30 35 40
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
$50,000 $5,500 $8,200 $10,900 $13,700 $16,400 $19,100 $21,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
100,000 12,700 19,000 25,300 31,700 38,000 44,300 50,700
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
150,000 19,900 29,800 39,700 49,700 59,600 69,500 79,500
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
200,000 27,100 40,600 54,100 67,700 81,200 94,700 108,300
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
250,000 34,300 51,400 68,500 85,700 102,800 119,900 137,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
500,000 70,300 105,400 140,500 175,700 210,800 245,900 281,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
1,000,000 142,300 213,400 284,500 355,700 426,800 497,900 569,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
1,500,000 214,300 321,400 428,500 535,700 642,800 749,900 857,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
2,000,000 286,300 429,400 572,500 715,700 858,800 1,001,900 1,145,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
2,500,000 358,300 537,400 716,500 895,700 1,074,800 1,253,900 1,433,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
3,000,000 430,300 645,400 860,500 1,075,700 1,290,800 1,505,900 1,721,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
3,500,000 502,300 753,400 1,004,500 1,255,700 1,506,800 1,757,900 2,009,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
4,000,000 574,300 861,400 1,148,500 1,435,700 1,722,800 2,009,900 2,297,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
4,500,000 646,300 969,400 1,292,500 1,615,700 1,938,800 2,261,900 2,585,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
5,000,000 718,300 1,077,400 1,436,500 1,795,700 2,154,800 2,513,900 2,873,100
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
Benefits under these plans are based on credited years of service and final
average remuneration (generally the highest five consecutive years of
compensation out of the last ten years of service for ConAgra Foods, Inc.).
Covered compensation includes salary and normal bonus. As of May 26, 2002, the
named executive officers who participate in the defined benefit pension plan had
the following credited years of service: Mr. Rohde, 13 years; Mr. Goslee, 16
years; Mr. O'Donnell, 23 years; Mr. Johnson, 3 years; and Mr. Gerhardt, 4 years.
ConAgra Foods, Inc. has conditional employment agreements with certain
officers, including all executive officers named in the summary compensation
table. The employment agreements require 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, Inc. (as defined in the
agreements) through a tender offer or otherwise. In consideration of this
promise, ConAgra Foods, Inc. agrees to employ the individual for three years
after the event by which another entity acquires effective control of ConAgra
Foods, Inc. During that three year period, the individual would receive annually
an amount not less than the individual's current annual 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.
ConAgra Foods, Inc. must satisfy this obligation through a trust payable to
the employee beginning at retirement age. If the employee is involuntarily
terminated or constructively terminated (as defined in the agreements) during
the three year employment period, ConAgra Foods, Inc. is required to pay the
individual the amount of annual and incentive compensation described above for
any remainder of the three year period plus a full year's compensation and
maximum incentive payments, and shall also be obligated to provide the described
retirement benefits through a trust.
In addition, the employee shall receive an amount equal to the difference
between the highest tender offer price by the acquiring entity over the closing
price of ConAgra Foods, Inc. Common Stock on the date of termination, multiplied
by the number of ConAgra Foods, Inc. shares owned by the employee on the date of
termination (including for this purpose, options granted under Stock Plans.) If
the employee voluntarily terminates during the three-year period, ConAgra Foods,
Inc. remains obligated to make the previously described retirement payments and
the payments described in the preceding sentence. ConAgra Foods, Inc. is also
required to make a gross-up payment to the employee if any payment to the
employee is subject to an excise tax under Section 4999 of the Internal Revenue
Code.
ConAgra Foods, Inc. adopted in 1989 the ConAgra Foods, Inc. Incentives and
Deferred Compensation Change in Control Plan. Under this plan, in the event of a
change in control of ConAgra Foods, Inc. (as defined in the plan), all benefits,
payments and deferred compensation under ConAgra Foods, Inc.'s various
incentive, bonus, deferred compensation and similar arrangements, for all
employees participating under the applicable plans, become immediately
non-forfeitable. In addition, a participant under any of the plans who is
terminated after a change in control shall receive a pro rata benefit based on
the portion of the year for which the participant was employed.
ConAgra Foods, Inc. and Mr. Rohde are parties to an employment agreement
effective August 26, 1996. Mr. Rohde receives as compensation (1) a base salary
of not less than $750,000 per annum, (2) participation in ConAgra Foods, Inc.'s
Executive Annual Incentive Plan with a target bonus of not less than 80% of base
salary and (3) participation in the Long-Term Senior Management Incentive
Program. Mr. Rohde received on August 26, 1996 an award of 200,000 (post-1997
stock split) restricted shares vesting at the rate of 10% per year and an option
to acquire 200,000 (post-1997 stock split) shares of stock exercisable at fair
market value on the date of grant and vesting at the rate of 20% per annum. If
Mr. Rohde is terminated without cause or voluntarily terminates with good reason
(all as defined in the employment agreement), his then current base salary
continues for a period of 24 months and all options and restricted shares
immediately vest. The options and restricted shares also vest upon death or
permanent disability. The employment agreement imposes certain noncompetition
and confidentiality agreements on Mr. Rohde.
HUMAN RESOURCES COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
ConAgra Foods, Inc.'s executive compensation plans are administered by the
Human Resources Committee of the Board of Directors (the "Committee"). The
Committee is composed of non-employee directors. The Committee has the
responsibility to establish, review and change the compensation programs for
ConAgra Foods, Inc.'s executive officers.
ConAgra Foods, Inc.'s Compensation Philosophy
ConAgra Foods, Inc.'s compensation philosophy has been consistent. The
Committee established ConAgra Foods, Inc.'s long-term executive compensation
plans with a view that benefits payable under short-term incentive plans are
geared to performance in the current fiscal year, while benefits payable under
the long-term incentive plans are designed to motivate executives for measured
performance over time.
The Committee believes ConAgra Foods, Inc.'s management should hold a
significant ownership in ConAgra Foods, Inc. Common Stock. Such stock ownership
is expected to result in executive decision-making which is in the best
long-term interests of ConAgra Foods, Inc. and its stockholders. ConAgra Foods
has taken steps which cause management to hold stock throughout their
employment. The Committee has structured ConAgra Foods, Inc.'s long-term
incentives to be primarily stock-based.
ConAgra Foods, Inc.'s executive compensation consists of three components:
base salary, short-term incentives and long-term incentives. The Committee
approved and administered the executive compensation programs within each of
these components during fiscal 2002.
The Committee has reviewed ConAgra Foods, Inc.'s compensation plans in light
of Internal Revenue Code provisions relating to the disallowance of deductions
for nonperformance-based remuneration in excess of $1,000,000 to certain
executive officers. The Committee intends to structure ConAgra Foods, Inc.'s
executive compensation plans so that payments thereunder will generally be fully
deductible. However, ConAgra Foods, Inc. may occasionally grant restricted
shares or compensation in excess of $1,000,000 for specific reasons which would
not qualify as deductible performance-based remuneration.
Base Salary
The Committee establishes the salary ranges for executive positions
considering the median pay for similar positions in the food industry. The base
salary for each executive officer is established based on individual performance
and contribution to the profitability of ConAgra Foods, Inc., considering the
competitiveness of the total compensation package. The Committee periodically
uses outside consultants and published compensation survey data to review
competitive rates of pay and establish salary ranges. There was no change in Mr.
Rohde's base salary in fiscal 2002.
Short-Term Incentives
The Committee believes that an executive's contribution toward achieving
ConAgra Foods, Inc.'s growth in earnings per share and annual operating profit
plans should form the basis for short-term incentives. The Committee establishes
performance goals at the beginning of each fiscal year tied to the attainment of
annual company-wide or business unit profit plans. Executive officers are
assigned threshold and target short-term bonus award opportunities. The
short-term incentive target, plus base salary, is intended to provide a fully
competitive annual cash compensation program for ConAgra Foods, Inc.'s
executives when business and individual goals are met. The short-term incentive
for ConAgra Foods, Inc.'s executive officers in fiscal 2002 was established
under the Executive Annual Incentive Plan, which stockholders approved in 2000.
Mr. Rohde's annual bonus for fiscal 2002 was based on attainment of goals
established by the Committee at the beginning of the fiscal year. The target
goals for fiscal 2002 were based on achievement of earnings per share objectives
for ConAgra Foods, Inc. The target goals for fiscal 2001 were not attained and
no short-term incentives were paid for fiscal 2001 performance.
Long-Term Incentives
ConAgra Foods, Inc.'s long-term incentives for executive officers are
provided through a long-term senior management incentive program and stock plans
adopted in 1985, 1990, 1995 and 2000.
The long-term senior management incentive program rewards participants,
including executive officers, based on ConAgra Foods, Inc.'s ability to increase
earnings per share, with awards at target levels. The Committee selects
participants, including executive officers, on an annual basis, and the
participants are eligible to share in an award pool capped at 8% of ConAgra
Foods, Inc.'s excess after-tax earnings over and above a minimum 5% compound
growth rate from a five-year average earnings base. The award for fiscal 2002
was issued in the form of restricted share equivalent units, vesting generally
on the fifth anniversary of issuance, and stock options. The Chief Executive
Officer participated in the long-term senior management incentive program during
fiscal 2002 at an award level generally equal to three times the award level of
the next highest executive officer named in the Summary Compensation Table. This
higher level of participation reflects the Committee's judgment as to the duties
and responsibilities required of the Chief Executive Officer position and his
expected contributions to the Company's profitability. The Chief Executive
Officer's participation in the program for fiscal 2002 resulted in the issuance
of 76,140 restricted stock equivalent units and the grant of 304,560 options.
The target levels were not attained in fiscal 2001 and no payments were made
under the long-term senior management incentive program for fiscal 2001
performance.
The Committee also administers ConAgra Foods, Inc.'s stock plans, which
authorize various stock-based incentives, including grants of stock options and
restricted stock. The Committee generally grants options on an annual basis in
the range of 1% to 1.5% of ConAgra Foods, Inc.'s outstanding Common Stock.
During fiscal 2002, options were granted to 1,978 ConAgra Foods, Inc. employees,
including all of ConAgra Foods, Inc.'s executive officers. The Committee grants
stock options at the prevailing market price of ConAgra Foods, Inc.'s Common
Stock and such options therefore have value only if ConAgra Foods, Inc.'s stock
price increases. The Committee does not reprice options. Beginning in fiscal
2003, options will vest as to 40% of the shares at the first anniversary of
grant, 30% at the second anniversary, and 30% at the third anniversary. The
Committee granted 750,000 non-qualified options to the Chief Executive Officer
in September 2001 based on its review of competitive option grants and its
judgment that option grants to the Chief Executive Officer had been below
competitive levels for a number of years, and its recognition of the results
achieved by the Chief Executive Officer in connection with the repositioning of
the Company for the future.
ConAgra Foods, Inc. Human Resources Committee
Carl E. Reichardt, Chairman
John T. Chain, Jr.
Ronald W. Roskens
AUDIT COMMITTEE REPORT
The Audit Committee is composed of three directors, each of whom meets
the independence and experience requirements of the New York Stock Exchange. The
Audit Committee assists the Board of Directors in fulfilling its oversight
responsibilities by reviewing (1) the financial statements of the Company, (2)
the independence and performance of the Company's independent auditors and
internal audit department, and (3) compliance by the Company with legal and
regulatory requirements. The Committee acts under a written charter, adopted by
the Board of Directors, a copy of which was included in the Company's 2001 proxy
statement.
ConAgra Foods' management is responsible for the Company's financial
reporting process and internal controls. The independent auditors are
responsible for performing an independent audit of the Company's consolidated
financial statements and issuing an opinion on the conformity of those audited
financial statements with generally accepted accounting principles. The Audit
Committee oversees the Company's financial reporting process and internal
controls on behalf of the Board of Directors.
Pursuant to the Audit Committee charter, the Committee has the
authority to conduct investigations within the scope of its responsibilities and
to retain legal, accounting and other advisors to assist the Committee in its
functions. During fiscal 2001 and 2002, the Committee undertook an investigation
of certain accounting practices at the Company's United Agri Products
subsidiary, and retained special counsel in connection with such investigation.
The investigation resulted in a June 2001 restatement of the Company's financial
statements for fiscal years 1997-2000.
During the last fiscal year, the Audit Committee met and held
discussions with representatives of ConAgra Foods management, its internal audit
staff, and Deloitte & Touche, independent auditors. Representatives of financial
management, the internal audit staff, and the independent auditors have
unrestricted access to the Audit Committee and periodically meet privately with
the Audit Committee. The Audit Committee reviewed and discussed with ConAgra
Foods' management and Deloitte & Touche the audited financial statements
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
May 26, 2002.
The Committee also discussed with the independent auditors other
matters required to be discussed by the auditors with the Committee under the
Statement on Auditing Standards No. 61 (communication with audit committees).
The Committee received and discussed with the independent auditors their written
report on their independence from the Company and its management, which is made
under Independence Standards Board Standard No. 1 (independence discussions with
audit committees). The Committee also considered whether the provision of
non-audit services provided by Deloitte & Touche to the Company during fiscal
2002 was compatible with the auditors' independence.
Based on these reviews and discussions, and the report of the
independent auditors, the Audit Committee has recommended to the Board of
Directors, and the Board has approved, that the audited financial statements be
included in the Company's Annual Report on Form 10-K for the fiscal year ended
May 26, 2002 for filing with the Securities and Exchange Commission.
ConAgra Foods, Inc. Audit Committee
Robert A. Krane, Chairman
Mogens C. Bay
Kenneth E. Stinson
COMPARATIVE STOCK PERFORMANCE
The comparative stock performance graphs shown below compare the yearly
change in cumulative value of ConAgra Foods, Inc.'s Common Stock with certain
Index values for both five- and ten-year periods ended May 2002. Both graphs set
the beginning value of ConAgra Foods, Inc. Common Stock and the Indices at $100.
All calculations assume reinvestment of dividends. The performance graphs
compare ConAgra Foods, Inc. with the Standard and Poor's (S&P) 500 Stock Index,
the S&P Food Group Index and the S&P Packaged Foods Index. S&P discontinued the
S&P Food Group Index in 2002, and the Company has selected the S&P Packaged
Foods Index as the replacement index for the performance graphs. All Index
values are weighted by capitalization of companies included in the group.
FIVE YEAR COMPARISON
Starting
Basis 1997 1998 1999 2000 2001 2002
------------------------------------------------------------------------------------------------------------------------
ConAgra Foods $100.00 $98.70 $90.11 $82.62 $77.80 $95.48
S&P 500 $100.00 $130.67 $158.15 $174.71 $156.28 $134.65
S&P Foods $100.00 $135.34 $119.51 $108.38 $124.91
S&P Packaged Foods $100.00 $132.96 $115.13 $101.76 $114.26 $128.84
TEN YEAR COMPARISON
Starting
Basis 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
-------------------------------------------------------------------------------------------------------------------------
ConAgra Foods $100.00 $99.16 $116.47 $138.64 $181.02 $261.88 $258.48 $235.99 $216.38 $203.74 $250.03
S&P 500 $100.00 $111.59 $116.31 $139.75 $179.46 $232.22 $303.45 $367.26 $405.72 $362.91 $312.69
S&P Foods $100.00 $104.86 $104.17 $131.38 $154.80 $204.24 $276.42 $244.08 $221.36 $255.12
S&P Packaged Foods $100.00 $102.55 $99.29 $122.06 $140.56 $181.81 $241.74 $209.32 $185.02 $207.74 $234.25
* As indicated in the above charts, during fiscal 2002, the cumulative value of
ConAgra Foods stock increased 23%, assuming reinvestment of dividends, while the
S&P 500 Index decreased 14%, and the S&P Packaged Foods Index increased 13%.
ITEM 2: RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The firm of Deloitte & Touche has been appointed by the Board
of Directors to conduct the fiscal 2003 audit of the Company's financial
statements. The same firm conducted the fiscal 2001 and 2002 audits. Fees billed
by Deloitte & Touche to the Company for services during the fiscal year ended
May 26, 2002 were:
Audit Fees. Deloitte & Touche billed the Company an aggregate of $3,380,000
for professional services rendered in connection with the audit of the Company's
fiscal 2002 annual financial statements and Deloitte & Touche's review of the
Company's quarterly financial statements during fiscal 2002.
Financial Information Systems Design and Implementation Fees. Deloitte &
Touche did not perform any information technology services for the Company
during fiscal 2002.
All Other Fees. Deloitte & Touche billed the Company an aggregate of
$4,070,000 for all other services during fiscal 2002, including audit related
services of $951,000 and non-audit services of $3,119,000.
The Board of Directors requests that stockholders ratify the appointment of
Deloitte & Touche as independent auditors to conduct the 2003 audit of the
Company's financial statements. Representatives from Deloitte & Touche will be
present at the Annual Stockholders' Meeting. The representatives will have the
opportunity to make a statement if they so desire and will also be available to
respond to appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2.
FISCAL 2003 STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented in the 2003 Annual
Meeting proxy statement must be received by the Company no later than April 26,
2003.
The Company's Bylaws set forth certain procedures which stockholders must
follow in order to nominate a director or present any other business at an
Annual Stockholders' Meeting. Generally, a stockholder must give timely notice
to the Secretary of the Company. To be timely, such notice for the 2003 annual
meeting must be received by the Company at One ConAgra Drive, Omaha, NE
68102-5001, not less than 90 nor more than 120 days prior to the first
anniversary of the 2002 annual meeting. However, if the date of the 2003 annual
meeting is advanced by more than 30 days or delayed by more than 60 days from
such anniversary date, such notice must be received by the Company not later
than the 90th day prior to such meeting day or the tenth day following public
announcement of such meeting date.
The Bylaws specify the information which must accompany any such stockholder
notice. Any stockholder may obtain details on the provisions of the Bylaws from
the Corporate Secretary of the Company.
CERTAIN LEGAL PROCEEDINGS
The Company is currently a party to a class action lawsuit and two
stockholder derivative lawsuits. The Annual Report on Form 10-K for the year
ended May 26, 2002 provides more information with respect to these legal
proceedings.
The purported class action lawsuit, filed on August 10, 2001 in United
States District Court for Nebraska against the Company and certain of its
executive officers, alleged violations of the federal securities laws in
connection with the events resulting in the Company's June 2001 restatement of
its financial statements. On July 23, 2002 the federal district court granted
the defendants' motion to dismiss the lawsuit and entered judgment in favor of
the Company and the executive officers.
Derivative actions were filed by three shareholder plaintiffs, purportedly
on behalf of the Company, on September 26, 2001 in the Court of Chancery for the
State of Delaware in New Castle County, Case No. 19130NC, and on October 9, 2001
in the United States District Court for the District of Nebraska, Case No.
401CV3255. The complaints allege that the defendants, directors of the Company
during the relevant times, breached fiduciary duties in connection with events
resulting in the Company's June 2001 restatement of its financial statements.
The action seeks, inter alia, recovery to the Company, which is named as a
nominal defendant in the action, of damages allegedly sustained by the Company
and a direction to the defendants to establish programs to prevent wrongful and
illegal practices. The directors named as defendants in the action intend to
vigorously defend the allegations and believe the action is without merit.
OTHER MATTERS
Neither the Board of Directors nor management intends to bring any matter
for action at the Annual Meeting of Stockholders other than those matters
described above. If any other matter or any proposal should be presented and
should properly come before the meeting for action, the persons named in the
accompanying proxy will vote upon such matter and upon such proposal in
accordance with their best judgment.
This is Your ConAgra Foods
PROXY CARD
Please vote and sign on reverse side
This proxy is solicited by your Board of Directors for the
September 26, 2002 Annual Stockholders Meeting
The undersigned stockholder appoints each of B. Rohde and C. Reichardt
attorney and proxy, with full power of substitution, on behalf of the
undersigned and with all powers the undersigned would possess if personally
present, to vote all shares of Common Stock of ConAgra Foods, Inc., that the
undersigned would be entitled to vote at the above Annual Meeting and any
adjournment thereof.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED IN ACCORDANCE WITH YOUR
SPECIFIC INSTRUCTIONS AS INDICATED ON THE REVERSE SIDE OF THIS PROXY. IF NOT
OTHERWISE SPECIFIED, THIS PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
Voting by mail. If you wish to vote by mailing this proxy, please sign your
name exactly as it appears on this proxy and mark, date and return it in the
enclosed envelope. When signing as attorney, executor, administrator, trustee,
guardian or officer of a corporation, please give your full title as such.
(This proxy is continued on the reverse side)
There are three ways to vote your Proxy.
Your telephone or Internet vote authorizes the named proxies to vote
your shares in the same manner as if you marked, signed and returned
your proxy card. Telephone and Internet voting are available until
11:59 p.m. (ET) on September 25, 2002.
VOTE BY PHONE: 1-800-690-6903
1. Read the accompanying Proxy Statement and this proxy card.
2. Call toll free 1-800-690-6903.
3. Enter your 12-digit Control Number, shown below.
4. Follow the simple recorded instructions.
VOTE BY INTERNET: WWW.PROXYVOTE.COM
1. Read the accompanying Proxy Statement and this proxy card.
2. Go to website www.proxyvote.com.
3. Enter your 12-digit Control Number, shown below.
4. Follow the simple instructions.
VOTE BY MAIL
1. Read the accompanying Proxy Statement and this proxy card.
2. Mark, sign and date your proxy card.
3. Return it in the enclosed postage-paid envelope.
If you vote by Phone or Internet, please do not mail your Proxy Card.
The Board of Directors recommends a vote FOR Items 1 and 2.
Item 1. Elect Directors - Nominees: Howard G. Buffett, John T. Chain, Jr.,
Ronald W. Roskens, Kenneth E. Stinson
For Withhold For All To withhold authority to vote, mark "For
All All Except All Except" and write nominee's name
[ ] [ ] [ ] on the line below.
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Item 2. Ratify the appointment of Independent Auditors
For Against Abstain
[ ] [ ] [ ]
Please mark your votes as indicated in this example [ X ]
This proxy will be voted as directed, or if no direction is indicated, will
be voted as recommended by the Board of Directors. This proxy is solicited
on behalf of the Board of Directors.
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Signature
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Signature (Joint Owners)
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Date
NOTE: Please sign as name appears here. Joint owners should each sign. When
signing as attorney, executor, administrator, trustee or guardian, give
full title.