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. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
[ ] 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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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other
than the Registrant)
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[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
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paid previously. Identify the previous filing by registration statement
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1) Amount Previously Paid:______________________________________________
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4) Date Filed:__________________________________________________________
CONAGRA FOODS, INC. PROXY STATEMENT
for
September 22, 2005
Annual Stockholders' Meeting
of ConAgra Foods, Inc.
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE 68102-5001
Phone: (402) 595-4000
Bruce Rohde
Chairman and
Chief Executive Officer
Dear Stockholder:
Please join us for the ConAgra Foods Annual Meeting of Stockholders in
Omaha on September 22, 2005. In the following pages you'll find information
about the meeting as well as a Proxy Statement.
A 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. Thank you!
Sincerely,
(Signature)
Bruce Rohde
August [12], 2005
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, NE 68102-5001
Phone: (402) 595-4000
Owen C. Johnson
Executive Vice President,
Organization & Administration
and Corporate Secretary
To ConAgra Foods Stockholders:
ConAgra Foods' Annual Stockholders' Meeting will be held on Thursday,
September 22, 2005 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 Management Proposal to Declassify Board of Directors
o Management Proposals to Repeal Supermajority Voting Provisions of
Articles XIV and XV of the Certificate of Incorporation
o Ratify appointment of independent auditors for fiscal 2006
o Act on five stockholder proposals which are properly presented at the
meeting
Stockholders of record as of the close of business on July 25, 2005 are
eligible to vote at the Annual Stockholders' Meeting.
Your shares may 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, and would like to change the vote you
previously submitted, you may withdraw your proxy at that time and vote your
shares in person.
Our Board and management have long recognized that good governance
principles are an important foundation for building and sustaining shareholder
value over the long term. You will find a summary of our governance principles
in the "Corporate Governance" section of this document. We think you will find
our principles firmly rooted in our long-term commitment to shareholder value.
By order of the Board of Directors.
(Signature)
Owen C. Johnson
August [12], 2005
ConAgra Foods, Inc.
One ConAgra Drive
Omaha, Nebraska 68102-5001
PROXY STATEMENT
Annual Meeting of Stockholders to be held September 22, 2005
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 22, 2005. Stockholders of record at the close of business on July 25,
2005 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 [12], 2005.
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: Owen C. Johnson, 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 21, 2005. A stockholder may
attend the meeting in person, withdraw the proxy and vote in person.
VOTING SECURITIES
The Company at July 25, 2005 had issued and outstanding _____________ 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 25, 2005.
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. Accordingly, abstentions and broker non-votes will
not affect the outcome of the election of Directors.
The ratification of accountants and the five stockholder proposals will
be decided by the affirmative vote of the holders of a majority of the shares
present in person or represented by proxy at the meeting and entitled to vote.
The three management proposals will be decided by the votes specified in the
proxy sections describing such proposals. On any such matter, an abstention will
have the same effect as a negative vote. A broker non-vote will not be
considered entitled to vote on matters as to which the brokers withhold
authority. A broker non-vote on any of the three management proposals will have
the same effect as a negative vote.
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
---- --------- ------
Capital Research and Management
Company 45,895,000 (1) ____%
333 South Hope Street
Los Angeles, CA 90071
State Street Bank and Trust Company 32,803,645 (2) ____%
225 Franklin Street
Boston, MA 02110
Barrow, Hanley, Mewhinney & Strauss, Inc. 28,913,133 (3) ____%
2200 Ross Avenue, Suite 3100
Dallas, TX 75201
(1) Based on a Form 13F filed May 13, 2005.
(2) Based on a Form 13F filed May 3, 2005.
(3) Based on a Form 13F filed May 13, 2005.
VOTING SECURITIES OWNED
BY EXECUTIVE OFFICERS AND DIRECTORS
The following table shows certain information on ConAgra Foods common stock
beneficially owned by directors and the executive officers named in the summary
compensation table as of July 25, 2005. No director or executive officer
beneficially owned 1% or more of ConAgra Foods common stock, other than Mr.
Batchelder, who may be deemed to beneficially own ___% of the outstanding common
stock. The directors and all executive officers as a group beneficially owned
___% of ConAgra Foods 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 25, 2005.
BENEFICIAL
NAME TITLE OF CLASS OWNERSHIP (1)
---- -------------- -------------
David H. Batchelder Common Stock 10,773,800
Mogens C. Bay Common Stock 96,400
Howard G. Buffett Common Stock 40,414
Stephen G. Butler Common Stock 27,600
John T. Chain, Jr. Common Stock 68,200
Steven F. Goldstone Common Stock 11,800
Alice B. Hayes Common Stock 52,740
W. G. Jurgensen Common Stock 59,368
Mark H. Rauenhorst Common Stock 80,431
Carl E. Reichardt Common Stock 139,600
Bruce C. Rohde Common Stock 2,166,930
Ronald W. Roskens Common Stock 116,800
Kenneth E. Stinson Common Stock 100,400
Kevin P. Adams Common Stock 98,922
John F. Gehring Common Stock 31,870
Owen C. Johnson Common Stock 363,861
Frank S. Sklarsky Common Stock 50,000
Directors and Executive
Officers as a Group
(25 Persons) Common Stock 14,827,854
(1) Shares reported include (i) shares owned by spouses of directors and
executive officers; (ii) 10,741,400 shares deemed beneficially owned by an
investment advisory firm of which Mr. Batchelder is a principal; the investment
advisory firm has voting and dispositive power over such shares; however,
clients of the firm or its affiliates have certain withdrawal rights that could
affect the shares which are not controlled by the firm or Mr. Batchelder; (iii)
857 shares owned by a charitable foundation for which Mr. Rauenhorst is a
director and disclaims beneficial ownership; and (iv) 3,246,735 shares which
directors and executive officers are entitled to acquire pursuant to stock
options exercisable within sixty days of July 25, 2005.
CORPORATE GOVERNANCE
Overview
Sound corporate governance practices are an important part of our
foundation and tradition. We have many longstanding policies and practices, and
we have also added measures to further strengthen our foundation. Our corporate
governance practices include the following:
o Other than our Chief Executive Officer, none of our directors are, or
ever have been, employed by the Company.
o Directors and executive officers are committed to owning stock in
ConAgra Foods. As part of that commitment directors will not sell any
of their ConAgra Foods stock until they cease to be a director, and an
executive officer can sell ConAgra Foods stock only during one
"window" each year and only if they continue to meet their stock
retention guidelines.
o We do not permit loans to directors or executive officers.
o We do not re-price stock options, and never have.
o Our Audit Committee, Human Resources Committee, Corporate Governance
Committee and Nominating Committee are each comprised of independent
directors.
o Non-employee directors routinely meet in executive session without
management present.
o The Board has designated a lead director, Carl Reichardt, who chairs
the executive sessions of the Board.
o Our Audit Committee has the authority to retain and replace our
independent auditors.
o The lead partner of the independent public accounting firm that audits
ConAgra Foods' books is rotated at least every five years.
o We encourage our employees to own ConAgra Foods stock, however our
retirement plans are structured so that employees can diversify their
holdings.
The following corporate governance documents appear on the Company's
website (www.conagrafoods.com) under the Investors section and these documents
are available in print to any shareholder upon request:
o Corporate Governance Principles
o Code of Conduct, our commitment to our longstanding standards for
ethical business practices
o Code of Ethics for Senior Corporate Officers
o Board Committee Charters
o Audit Committee Charter
o Corporate Affairs Committee Charter
o Corporate Governance Committee Charter
o Human Resources Committee Charter
o Nominating Committee Charter
o Procedures for contacting the Board of Directors (through the lead
director)
o Procedures for bringing concerns or complaints to the attention of the
Audit Committee
We routinely assess and refine our corporate governance practices and
share them with you by posting them on the Company's website. Directors are
encouraged to attend the annual stockholders meeting and all of the Company's
directors attended the 2004 annual stockholders meeting.
Succession Planning
On May 10, 2005, the company announced that as part of its current
strategic planning process, Chairman and Chief Executive Officer Bruce Rohde
discussed succession planning with the board of directors and asked the board to
formally establish a search committee to identify candidates and select a
successor Chief Executive Officer. The board formed a search committee
consisting of five board members and headed by Steven F. Goldstone, retired
Chairman and Chief Executive Officer of RJR Nabisco.
Board Meetings and Independence
The Board of Directors meets on a regularly scheduled basis. During
fiscal 2005, the Board met eight times. The Board of Directors is composed of a
substantial majority of independent directors. The Board has established
independence standards for Company directors. Those standards are set forth
below and follow the director independence standards established by the NYSE:
o A director will not be independent if, within the preceding three
years: (1) the director was employed by ConAgra Foods or an immediate
family member of the director was an executive officer of ConAgra
Foods, (2) the director was affiliated with or employed by ConAgra
Foods' independent auditor, (3) a ConAgra Foods' executive officer was
on the compensation committee of the board of directors of a company
which employed the ConAgra Foods' director or which employed an
immediate family member of the director as an executive officer, or
(4) the director or the director's immediate family member received
more than $100,000 during any twelve-month period in direct
compensation from ConAgra Foods (other than director and committee
fees).
o A director will not be independent if: (1) the director is an
executive officer or an employee, or the director's immediate family
member is an executive officer, of another company and (2) the other
company made payments to, or received payments from, ConAgra Foods for
property or services in an amount which, in any of the last three
fiscal years, exceeds the greater of $1,000,000 or 2% of either (i)
such other company's consolidated gross revenues or (ii) ConAgra
Foods' consolidated gross revenues.
o A director will not be independent if: (1) the director or an
immediate family member is a current partner of ConAgra Foods'
independent auditor, (2) the director is an employee of ConAgra Foods'
independent auditor, (3) the director has an immediate family member
who is a current employee of ConAgra Foods' independent auditor who
participates in the auditor's audit, assurance or tax compliance
practice, or (4) the director or an immediate family member was within
the last three years a partner or employee of ConAgra Foods'
independent auditor and personally worked on the Company's audit
within that time.
o Tax-exempt organizations which receive contributions from ConAgra
Foods shall not be considered "companies" for purposes of these
independence standards. However, ConAgra Foods will disclose in its
annual proxy statement any such contribution which it makes to a
tax-exempt organization in which a director serves as an employed
executive officer if, within the preceding three years, contributions
in any fiscal year exceeded the greater of $1,000,000 or 2% of such
charitable organization's consolidated gross revenues.
o For relationships not covered by the foregoing standards, the
determination of whether the relationship is material or not, and
therefore whether the director would be independent or not, shall be
made by the directors who satisfy the above independence standards.
The board's determination of each director's independence will be
disclosed annually in the company's proxy statement.
The Board has determined that directors Batchelder, Bay, Buffett,
Butler, Chain, Goldstone, Hayes, Jurgensen, Reichardt, Roskens and Stinson have
no material relationship with the Company and are independent within the meaning
of the Company's corporate governance principles and the NYSE listing standards.
Audit Committee
The members of the Audit Committee are Stephen G. Butler (Chairman),
Mogens C. Bay, W.G. Jurgensen, and Kenneth E. Stinson. All members of the Audit
Committee are independent within the meaning of the Company's Corporate
Governance Principles and the listing standards of the NYSE. The Board has
determined that all members of the Audit Committee are qualified as audit
committee financial experts within the meaning of SEC regulations. The Audit
Committee operates under a written charter, adopted by the Board of Directors, a
copy of which is available on the Company's website.
The Audit Committee met sixteen times during fiscal 2005. The Audit
Committee assists the Board by reviewing the integrity of the financial
statements of the Company; the qualifications, independence and performance of
the Company's independent auditors and internal auditing department; and
compliance by the Company with legal and regulatory requirements. The Audit
Committee has sole authority to retain, compensate, oversee and terminate the
independent auditor. The Audit Committee reviews the Company's annual audited
financial statements, quarterly financial statements, and filings with the SEC.
The Audit Committee reviews reports on various matters, including critical
accounting policies of the Company, significant changes in the Company's
selection or application of accounting principles, and the Company's internal
control processes. The Audit Committee also pre-approves all audit and non-audit
services performed by the independent auditor.
Human Resources Committee
The members of the Human Resources Committee are Carl E. Reichardt
(Chairman), David H. Batchelder, John T. Chain, Jr., Steven F. Goldstone and
Ronald W. Roskens. All members of the Human Resources Committee are independent
within the meaning of the Company's Corporate Governance Principles and the
listing standards of the NYSE. The Human Resources Committee operates under a
written charter, adopted by the Board of Directors, a copy of which is available
on the Company's website.
The Human Resources Committee met six times during fiscal 2005. The
Committee has responsibility for reviewing, evaluating and approving
compensation plans, policies and programs for the Company's directors, executive
officers and significant employees. The Human Resources Committee annually
reviews and approves corporate goals and objectives relevant to Chief Executive
Officer compensation, evaluates the Chief Executive Officer's performance in
light of these goals and objectives, and together with the other independent
directors, determines and approves the Chief Executive Officer's compensation
levels based on such evaluation.
Corporate Governance Committee
The members of the Corporate Governance Committee are John T. Chain, Jr.
(Chairman), David H. Batchelder, Mogens C. Bay, Steven F. Goldstone, Alice B.
Hayes and Kenneth E. Stinson. All members of the Corporate Governance Committee
are independent within the meaning of the Company's Corporate Governance
Principles and the listing standards of the NYSE. The Corporate Governance
Committee operates under a written charter, adopted by the Board of Directors, a
copy of which is available on the Company's website.
The Corporate Governance Committee met four times during fiscal 2005. 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.
Nominating Committee
The members of the Nominating Committee are Ronald W. Roskens (Chairman),
Howard G. Buffett, W.G. Jurgensen and Carl E. Reichardt. All members of the
Nominating Committee are independent within the meaning of the Company's
Corporate Governance Principles and the listing standards of the NYSE. The
Nominating Committee operates under a written charter, adopted by the Board of
Directors, a copy of which is available on the Company's website.
The Nominating Committee met once during fiscal 2005. 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 process is described in "Director Nomination Process" below.
Corporate Affairs Committee
The members of the Corporate Affairs Committee are Howard G. Buffett
(Chairman), Alice B. Hayes and Mark H. Rauenhorst. The Corporate Affairs
Committee operates under a written charter, adopted by the Board of Directors, a
copy of which is available on the Company's website.
The Corporate Affairs Committee met five times during fiscal 2005. The
Corporate Affairs Committee advises ConAgra Foods management on internal and
external factors and relationships affecting the Company's image, reputation,
objectives and strategies. Focus areas include economics, government,
regulation, sustainable development, community affairs and stockholder
relations.
Executive Committee
The members of the Executive Committee are Bruce Rohde (Chairman), Carl E.
Reichardt and Steven G. Butler. The Executive Committee generally has authority
to act on behalf of the Board of Directors between meetings. The Executive
Committee met three times during fiscal 2005.
Director Nomination Process
The Nominating Committee considers candidates for board membership
suggested by its members and other board members, as well as management and
shareholders. The Committee may also retain a third-party executive search firm
to identify candidates from time to time. A shareholder who wishes to recommend
a prospective nominee for board membership should notify the Company's Corporate
Secretary in writing at least 120 days before the annual stockholders meeting at
which directors are to be elected and include whatever support material the
shareholder considers appropriate. The Nominating Committee will also consider
nominations by a shareholder pursuant to the provisions of the Company's bylaws
relating to shareholder nominations as described in "Stockholder Proposals".
The Nominating Committee makes an initial determination as to whether
to conduct a full evaluation of the candidate once it has identified a
prospective nominee. This initial determination is based on whatever information
is provided to the Committee as well as other information available to or
obtained by the Committee. The preliminary determination is based primarily on
the need for additional board members to fill vacancies or expand the size of
the board and the likelihood that the prospective nominee can satisfy the
evaluation factors described below. If the Committee determines that additional
consideration is warranted, it may request a third-party search firm or other
third parties to gather additional information about the prospective nominee.
The Committee evaluates each prospective nominee against the standards
and qualifications set out in the Company's Corporate Governance Principles,
including: (1) background, including demonstrated high standards of ethics and
integrity, the ability to have sufficient time to effectively carry out the
duties of a director, and the ability to represent all shareholders and not a
particular interest group, (2) board skill needs, taking into account the
experience of current board members, the candidate's ability to work toward
business goals with other board members, and the candidate's qualifications as
independent and qualifications to serve on various committees of the Board, (3)
diversity, including the extent to which the candidate reflects the composition
of Company shareholders and other constituencies and (4) business experience,
which should reflect a broad experience at the policy-making level in business,
government or education.
The Committee also considers such other relevant factors as it deems
appropriate. In connection with the evaluation, the Committee determines whether
to interview the prospective nominee, and if warranted, one or more members of
the Committee interview prospective nominees in person or by telephone. After
completing this evaluation process, the Committee makes a recommendation to the
full board as to the persons who should be nominated by the board, and the board
determines the nominees after considering the recommendations of the Committee.
Director Compensation and Transactions
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. Each
non-employee director earns a grant of 1,800 shares of ConAgra Foods common
stock per year under the ConAgra Foods 2000 Stock Plan. Non-employee directors
also earn an annual grant of non-statutory options, with an exercise price equal
to the fair market value on date of grant, to acquire 9,000 shares of ConAgra
Foods common stock under the ConAgra Foods 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 a joint venture between South Africa based Tiger Brands 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 at the request of the Company on the board
of an India based venture for the manufacture and sale of food products, in
which ConAgra Foods has a 33% interest; Mr. Buffett receives $50,000 per annum
from the Company for these services.
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, officer 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 2005 required annual lease
payments by ConAgra Foods of $19.8 million. Opus Corporation or its affiliates
was paid $52.9 million for construction work during fiscal 2005 on properties
leased by ConAgra Foods from third parties. Opus Corporation had revenues in
excess of $1.25 billion in 2004.
The Directors' Charitable Award Program was discontinued in 2003.
Directors elected to the board prior to 2003 were eligible for the program; the
directors who continue participation in the program are entitled to nominate one
or more tax-exempt organizations to which ConAgra Foods will contribute an
aggregate of $1 million in four equal annual installments upon the death of the
director. 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 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 prior to donation and the tax benefit of
the donation accrue solely to the benefit of ConAgra Foods.
ITEM 1: BOARD OF DIRECTORS AND ELECTION
The Company's Board of Directors is presently composed of thirteen 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 2005
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 Coca Cola
Enterprises, Inc. from 1993 to 2004. Director of Berkshire Hathaway, Inc., and
Lindsay Manufacturing Co. Mr. Buffett has been a director since January 25,
2002. His current term expires September 22, 2005. He is 50 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 Reynolds American, Inc., Kemper Insurance Companies,
Northrup Grumman, Inc. and the Thomas Group, Inc. Mr. Chain has been a director
since May 4, 2001. His current term expires September 22, 2005. He is 70 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 22, 2005. He
is 72 years of age.
KENNETH E. STINSON - Nominee - Omaha, Nebraska
Chairman of Peter Kiewit Sons', Inc. (construction and mining). Chief Executive
Officer of Peter Kiewit Sons', Inc. (1998 - 2004). Director of Peter Kiewit
Sons', Inc., Kiewit Investment Fund LLP and Valmont Industries, Inc. Mr. Stinson
has been a director since December 12, 1996. His current term expires September
22, 2005. He is 62 years of age.
The following directors serve for terms that expire after 2005:
DAVID H. BATCHELDER - San Diego, California
Principal of Relational Investors LLC (investment advisory firm) and Principal
of Relational Advisors LLC (investment advisory and consulting firm). Director
of Washington Group International, Inc. Mr. Batchelder has been a director since
August 2, 2002. His current term expires September 28, 2006. He is 56 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. Mr. Bay has been a director since December 12, 1996. His
current term expires September 20, 2007. He is 56 years of age.
STEPHEN G. BUTLER - Leawood, Kansas
Chairman and Chief Executive Officer of KPMG LLP (national public accounting
firm) from 1996 to 2002. Director of Cooper Industries and Ford Motor Company.
Mr. Butler has been a director since May 16, 2003. His current term expires
September 20, 2007. He is 57 years of age.
STEVEN F. GOLDSTONE - Ridgefield, Connecticut
Manager of Silver Spring Group (private investment firm) since 2000. Chairman of
Nabisco Group Holdings from 1999 to 2000. Chairman and Chief Executive Officer
of RJR Nabisco from 1997 to 1999. Director of American Standard Companies and
Greenhill & Co., Inc. Mr. Goldstone has been a director since December 11, 2003.
His current term expires September 28, 2006. He is 59 years of age.
ALICE B. HAYES - Chicago, Illinois
President emerita of the University of San Diego since July 2003. President of
the University of San Diego from 1995 to July 2003. Executive Vice President and
Provost of Saint Louis University from 1989 to 1995. Director of Jack in the
Box, Inc. Ms. Hayes has been a director since August 3, 2001. Her current term
expires September 20, 2007. She is 67 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 20, 2007. He
is 54 years of age.
MARK H. RAUENHORST - Minnetonka, Minnesota
President and Chief Executive Officer of Opus Corporation (commercial real
estate design, development and construction). Director of Graco, Inc. Mr.
Rauenhorst has been a director since May 4, 2001. His current term expires
September 28, 2006. He is 52 years of age.
CARL E. REICHARDT - San Francisco, California
Retired Chairman and Chief Executive Officer of Wells Fargo & Company since
1994. Vice Chairman of Ford Motor Company (2001-2003). Director of Ford Motor
Company. Non-Executive Chairman of HSBC North America Holdings, Inc. Mr.
Reichardt has been a director since March 1, 1993. His current term expires
September 20, 2007. He is 74 years of age.
BRUCE ROHDE - Omaha, Nebraska
Chairman of the Board and Chief Executive Officer of ConAgra Foods, Inc. since
September 1998. Mr. Rohde has been a director since August 26, 1996. His current
term expires September 28, 2006. He is 56 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.
EXECUTIVE COMPENSATION
The following Summary Compensation Table shows compensation paid by ConAgra
Foods for services rendered during fiscal years 2005, 2004 and 2003 for the
Chief Executive Officer and the next four highest compensated executive officers
of ConAgra Foods.
SUMMARY COMPENSATION TABLE
------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
------------------------------------------------------------------------------------------------------------------------------------
Name / Fiscal Salary Bonus Other Annual Restricted Option LTIP Payouts All Other
Principal Position Year ($) ($) Compensation Stock Awards Grants ($) (2) Compensation
($) (5) ($) (1)(2) (#) (2) ($) (3)
------------------------------------------------------------------------------------------------------------------------------------
Bruce C. Rohde 2005 1,200,000 0 0 0 0 40,714
Chairman & 2004 1,200,000 3,579,929 2,933,522 0 2,933,522 148,300
Chief Executive 2003 1,166,346 2,350,000 2,323,531 0 2,323,531 109,061
Officer
------------------------------------------------------------------------------------------------------------------------------------
Frank S. Sklarsky (4) 2005 250,000 850,000 54,730 1,370,000 0 0 135,101
Executive Vice President,
Chief Financial Officer
------------------------------------------------------------------------------------------------------------------------------------
Owen C. Johnson 2005 500,000 150,000 0 0 0 24,214
Executive Vice President 2004 500,000 900,000 977,841 0 977,841 46,902
Organization and 2003 500,000 544,000 774,510 0 774,510 36,222
Administration,
Corporate Secretary
------------------------------------------------------------------------------------------------------------------------------------
Kevin P. Adams (4) 2005 374,038 239,961 548,000 0 0 10,011
Executive Vice President
Operational Support
------------------------------------------------------------------------------------------------------------------------------------
John F. Gehring (4) 2005 374,038 229,961 548,000 0 0 11,738
Senior Vice President,
Corporate Controller
------------------------------------------------------------------------------------------------------------------------------------
(1) On December 2, 2004, the following executive officers received restricted
stock grants: Mr. Sklarsky, 50,000 restricted shares, Mr. Adams, 20,000
restricted shares, and Mr. Gehring, 20,000 restricted share equivalent units.
Mr. Sklarsky's restricted stock grant vests 100% on December 2, 2008 and if
employment with ConAgra Foods terminates prior to that date for reasons other
than cause, vests at 25% for each year of employment. Mr. Adams' restricted
stock grant vests 20% each year, commencing December 2, 2005. Mr. Gehring's
restricted share equivalent units (with payouts in common stock) vest 100% on
December 2, 2009, and if employment with ConAgra Foods terminates prior to that
date for reasons other than cause, vests at 20% for each year of employment.
Under ConAgra Foods' long-term senior management incentive program, LTIP awards
were made in restricted share equivalent units and restricted units (see
footnote 2 below). The executive receives dividend equivalent payments on the
restricted share equivalent units and restricted units. The executive also
receives dividend payments on amounts deferred in ConAgra Foods stock. At the
end of fiscal 2005, the aggregate restricted (unvested) share and share
equivalent and restricted unit holdings (see footnote 2 below), valued at the
closing price of ConAgra Foods common stock at May 29, 2005 without giving
effect to the diminution of value attributable to the restrictions on such
shares or units were: Mr. Rohde - $9,246,088 (20,000 shares; 174,881 share
equivalent units; 152,847 restricted units); Mr. Sklarsky - $1,329,500 (50,000
shares); Mr. Johnson - $2,904,750 (58,294 share equivalent units; 50,948
restricted units); Mr. Adams - $2,182,608 (30,000 shares; 26,609 share
equivalent units; 25,475 restricted units); and Mr. Gehring - $2,062,411 (1,400
shares; 56,030 share equivalent units; 20,133 restricted units).
(2) Amounts earned under the Company's long-term senior management incentive
program in fiscal 2003-2005 were issued in restricted share equivalent units
(payable in common stock when restrictions end). An equivalent award was made in
restricted units (which track the appreciation or depreciation in ConAgra Foods
stock during the restricted period and payable in cash when restrictions end).
The share equivalent units and restricted 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 and restricted units vest 20% per year of employment post-issuance, unless
the termination was for cause.
(3) Amounts represent contributions by ConAgra Foods to its qualified and
nonqualified 401(k) plans and the imputed dollar value for term life insurance.
Fiscal year 2005 life premium values are as follows: Mr. Rohde, $4,714; Mr.
Sklarsky, $723; Mr. Johnson, $4,714; Mr. Adams, $721; and Mr. Gehring, $801.
Amounts for Mr. Sklarsky also include $112,167 for reimbursement of relocation
expenses.
(4) Mr. Sklarsky, Mr. Adams and Mr. Gehring became executive officers during
fiscal 2005. In the case of Mr. Adams and Mr. Gehring the amounts shown above
include amounts paid to them during fiscal 2005 prior to the time they became
executive officers.
(5) ConAgra Foods provides its executive officers with certain employee
benefits. The executive officers participate in the non-qualified supplemental
pension plan; the amounts payable under the qualified pension plan and
non-qualified pension plan based on final average remuneration and credited
years of service are shown on page 13. The executive officers also participate
in the non-qualified 401(k) Plan; the annual amounts credited to the individuals
are shown in the "All Other Compen- sation" column above. Executive officer
personal use of corporate aircraft is valued at the aggregate incremental cost
to the company. ConAgra Foods' executive officers do not receive company loans,
country club memberships, company cars, financial planning assistance,
apartments or corporate-owned life insurance. A blank in the "Other Annual
Compensation" column indicates that the total amount of personal benefits to the
executive officer was less than $50,000, the minimum under SEC rules before any
amount is reportable in this column. The amount for Mr. Sklarsky represents tax
reimbursement payments related to relocation expenses.
OPTION GRANTS FOR FISCAL YEAR 2005
The Company made no grants of stock options during the last fiscal year
to the executive officers named in the Summary Compensation Table. No stock
appreciation rights were granted during fiscal 2005.
AGGREGATED OPTION EXERCISES IN FISCAL YEAR 2005
AND FY-END OPTION VALUES
The following table sets forth information on aggregate option exercises
in the last fiscal year and information with respect to the value of unexercised
options to purchase ConAgra Foods common stock for the executive officers named
in the Summary Compensation Table.
----------------------- --------------- -------------- -------------------------------- --------------------------------
Unexercised Options Value of Unexercised
Held at FY-End In-the-Money Options
(#) At FY-End ($) (2)
----------------------- --------------- -------------- -------------------------------- --------------------------------
Shares
Acquired Value Realized
On Exercise ($) (1) Exercisable Unexercisable Exercisable Unexercisable
(#) # # ($) ($)
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Bruce C. Rohde 0 0 1,779,075 391,367 6,259,964 1,639,378
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Frank S. Sklarsky 0 0 0 0 0 0
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Owen C. Johnson 0 0 293,896 55,456 918,215 152,211
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
Kevin P. Adams 0 0 50,072 11,614 298,079 27,725
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
John F. Gehring 0 0 22,218 6,665 46,048 12,878
----------------------- --------------- -------------- --------------- ---------------- -------------- -----------------
(1) Value realized is the difference between the closing price of ConAgra Foods
common stock at the time of exercise and the exercise price of the options
multiplied by the number of shares.
(2) Value shown is the difference between the closing price of ConAgra Foods
common stock on the last trading day of fiscal 2005 ($26.59) and the exercise
price of in-the-money options multiplied by the number of shares subject to
in-the-money options.
LONG-TERM INCENTIVE AWARDS
[To be completed]
The following table provides information concerning long-term incentive awards
approved by the Human Resources Committee for the executive officers named in
the Summary Compensation Table. The long-term senior management incentive
program rewards participants, including executive officers, based on ConAgra
Foods' ability to increase earnings per share over time, with awards at target
levels. The Chief Executive Officer recommends participants and the Committee
approves participants, on an annual basis. The participants are eligible to
share in an award pool of 8% of ConAgra Foods' excess after-tax earnings
(subject to adjustment pursuant to the program) over and above a 5% compound
annual growth rate from a fixed five-year average earnings base. A minimum
earnings threshold must be attained before any awards are earned. Awards are
made in restricted share equivalent units (payable in common stock when
restrictions end) which vest over five years. See footnote (1) below.
------------------------- ------------------- ------------------- -----------------------------------------------------
Estimated Future Payouts
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
Performance or
Number of other Period Until
Shares, Maturation or Threshold Target Maximum
Units or Other Payout (#) (#) (#)
Rights
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
Bruce C. Rohde (1) 0 [ ] N/A
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
Frank S. Sklarsky (1) 0 [ ] N/A
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
Owen C. Johnson (1) 0 [ ] N/A
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
Kevin P. Adams (1) 0 [ ] N/A
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
John F. Gehring (1) 0 [ ] N/A
------------------------- ------------------- ------------------- --------------- ----------------- -------------------
(1) Amount represents the target number of the share equivalent units (with
payouts in common stock) under the long-term senior management incentive program
and is dependent on both earnings and stock price. See description above. Any
share equivalent units issued under the program are restricted and any shares
will be issued under ConAgra Foods stock plans. The participants receive common
stock dividend cash equivalents on the restricted 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 share
equivalent units are paid in shares of common stock.
BENEFIT PLANS, RETIREMENT PROGRAMS AND EMPLOYMENT AGREEMENTS
ConAgra Foods maintains a non-contributory defined benefit pension plan for
all eligible employees. Certain ConAgra Foods employees, including executive
officers listed in the Summary Compensation Table, participate in a supplemental
retirement plan. This plan is 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' 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 2005 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.
---------------------- ---------------------------------------------------------------------------------------------------------
Credited Years of Service
---------------------- ---------------------------------------------------------------------------------------------------------
Final Average
Remuneration 10 15 20 25 30 35 40
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
$50,000 $5,200 $7,700 $10,300 $12,900 $15,500 $18,100 $20,600
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
100,000 12,400 18,500 24,700 30,900 37,100 43,300 48,300
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
150,000 19,600 29,300 39,100 48,900 58,700 68,500 76,000
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
200,000 26,800 40,100 53,500 66,900 80,300 93,700 103,700
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
250,000 34,000 50,900 67,900 84,900 101,900 118,900 131,400
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
500,000 70,000 104,900 139,900 174,900 209,900 244,900 269,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
1,000,000 142,000 212,900 283,900 354,900 425,900 496,900 546,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
1,500,000 214,000 320,900 427,900 534,900 641,900 748,900 823,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
2,000,000 286,000 428,900 571,900 714,900 857,900 1,000,900 1,100,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
2,500,000 358,000 536,900 715,900 894,900 1,073,900 1,252,900 1,377,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
3,000,000 430,000 644,900 859,900 1,074,900 1,289,900 1,504,900 1,654,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
3,500,000 502,000 752,900 1,003,900 1,254,900 1,505,900 1,756,900 1,931,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
4,000,000 574,000 860,900 1,147,900 1,434,900 1,721,900 2,008,900 2,208,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
4,500,000 646,000 968,900 1,291,900 1,614,900 1,937,900 2,260,900 2,485,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
5,000,000 718,000 1,076,900 1,435,900 1,794,900 2,153,900 2,512,900 2,762,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
5,500,000 790,000 1,184,900 1,579,900 1,974,900 2,369,900 2,764,900 3,039,900
---------------------- -------------- --------------- -------------- -------------- -------------- -------------- --------------
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). Covered
compensation includes salary and short-term incentive. As of May 29, 2005, the
named executive officers who participate in the defined benefit pension plan had
the following credited years of service: Mr. Rohde, 16 years; Mr. Sklarsky, 0
years; Mr. Johnson, 12 years; Mr. Adams, 4 years; and Mr. Gehring , 3 years.
ConAgra Foods 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 (as defined in the agreements)
through a tender offer, merger or otherwise. In consideration of this promise,
ConAgra Foods agrees 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.
ConAgra Foods must satisfy this retirement benefit 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 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 common stock on the date of termination, multiplied by
the number of ConAgra Foods 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
remains obligated to make the previously described retirement payments and the
payments described in the preceding sentence. ConAgra Foods 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 adopted in 1989 the ConAgra Foods Incentives and Deferred
Compensation Change in Control Plan. Under this plan, in the event of a change
in control of ConAgra Foods (as defined in the plan), all benefits, payments and
deferred compensation under ConAgra Foods' 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 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'
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 equity based
compensation 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.
ConAgra Foods and Mr. Sklarsky are parties to an employment agreement
effective November 1, 2004. Mr. Sklarsky receives as compensation (1) an annual
salary of $500,000, (2) participation in ConAgra Foods' executive annual
incentive plan, with incentive uncapped but targeted at 100% of annual salary,
(3) participation in the long-term senior management incentive program, and (4)
participation in the ConAgra Foods non-qualified pension plan. Mr. Sklarsky
received a full year payout of annual incentive at target for fiscal 2005 to
facilitate partial buy-out of his incentive position with his former employer.
Mr. Sklarsky received on December 2, 2004 an award of 50,000 restricted shares,
vesting 100% on the fourth anniversary of the grant, or vesting at 25% for each
year of employment if his employment with ConAgra Foods terminates prior to that
date other than for cause. In the event of an involuntary termination for other
than cause, Mr. Sklarsky will receive his base salary for two years thereafter
and a monthly consulting fee of $1,000 during the vesting period of his equity
awards. Mr. Sklarsky received (1) a sign on bonus of $350,000 (subject to
repayment at 100% if he resigns within one year, and repayment at 50% if he
resigns between one and two years) and (2) participation in the Company's
relocation program on the same basis as other participants, including relocation
and mortgage assistance.
HUMAN RESOURCES COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
ConAgra Foods Compensation Philosophy
The Human Resources Committee has consistently endorsed and promoted a "pay
for performance" philosophy. The Human Resources Committee is composed of five
independent directors.
ConAgra Foods' compensation philosophy has been consistent. The Committee
believes the achievement of the objectives contained in the Company's strategic
plans will significantly increase stockholder values over time. We have
therefore linked the compensation of the Company's executive officers and senior
operating officers to the achievement of strategic and financial objectives. As
part of its emphasis on long-term value and results, our board of directors has
directed management to refrain from providing specific quarterly earnings
guidance to financial analysts so that management will focus on longer term
strategic goals which lead to stronger short and long term financial
improvements. The Committee believes that the improvement in the Company's
operating strength and earnings results over time has been brought about by the
Company's strategic actions and that implementation of our business plans will
lead to enhanced stockholder returns over time.
The ConAgra Foods' executive compensation programs are based on the
following principles:
o Linking executive compensation to the achievement of the Company's
strategic plans.
o Growing trend line margins and GAAP earnings.
o Subjecting a significant portion of an executive's compensation to
risk through the use of performance-based incentives including
equity-based compensation.
o Attracting, retaining and motivating highly-qualified executives.
o Recognizing individual contributions to the strength and growth in the
Company's value.
Elements of Compensation
The principal elements of our executive compensation programs are salaries,
short-term incentives, and long-term incentives. The Committee approved the
salary of each executive officer and all short-term and long-term incentive
awards during fiscal 2005.
A substantial percentage of each executive's compensation depends on the
level of the executive's contribution to Company objectives. These objectives
are established by the Committee at the beginning of each year and are designed
to enable the Company to achieve the goals of our strategic plan. These include
financial objectives and qualitative factors such as leadership, teamwork,
management development, and the quality of execution of business strategies that
strengthen the Company's platform for competition and growth. Each executive is
also accountable for compliance with the Company's policies and code of conduct.
Base Salary
The Committee reviews the competitive market for executive positions
considering the competitive pay for similar positions in the food and consumer
products industries. The base salary for each executive officer is established
based on individual performance and contribution to the performance of ConAgra
Foods, 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 within the market. Mr. Rohde's
base salary was unchanged at $1,200,000 during fiscal 2005. Mr. Rohde defers all
salary over $940,000 with the deferral invested in ConAgra Foods stock; regular
dividends are paid on the stock deferrals.
Short-Term Incentives - Fiscal 2005
At the beginning of each year, based on the annual performance plan
approved by the Board, the Committee establishes a range of financial
performance goals for the Company and its business units focusing on financial
targets relative to the business portfolio of the Company. The amounts payable
under the Company's annual bonus incentives relate directly to the degree to
which the Company meets the annual financial goals.
The Committee also assigns individual bonus ranges to each executive
expressed as a percent of year-beginning base salary. The executive is evaluated
in light of Company objectives, including the five compensation principles
described above. The amount of each executive's annual bonus is a function of
the level of achievement of the Company, the executive's business unit, and/or
individual objectives. The short-term incentive targets for ConAgra Foods'
executive officers in fiscal 2005 were established under the Executive Incentive
Plan approved by stockholders. No short-term incentives were paid under the plan
to executive officers for fiscal 2005. The Committee approved discretionary
bonuses to Messers. Johnson, Adams and Gehring, and a bonus to Mr. Sklarsky
pursuant to his employment agreement, which are set forth in the summary
compensation table.
Long-Term Incentives - Fiscal 2005
ConAgra Foods' long-term incentive plans for executive officers and senior
operating officers for fiscal 2005 were established through a long-term senior
management incentive program and stock plans approved by the stockholders. The
Committee believes that equity awards provide important medium and long-term
incentives for directors, executive officers and other key employees to achieve
the ConAgra Foods' strategic plans. The Committee also believes that a variety
of equity incentives consistent with those available to other leading companies
are necessary for ConAgra Foods to compete for, motivate and retain
highly-qualified directors, executive officers, and other key employees.
The long-term senior management incentive program for fiscal 2005 was
designed to compensate participants, including executive officers, based on
ConAgra Foods' ability to increase earnings per share above a threshold level
established by the Committee. The Committee selects participants, including
executive officers, on an annual basis, and the participants are eligible to
share in an award pool of 8% of ConAgra Foods' excess after-tax earnings
(subject to adjustment pursuant to the program) over and above a 5% compound
annual growth rate from a fixed five-year average earnings base. Amounts earned
under the program in fiscal 2003 and 2004 were issued in restricted share
equivalent units (payable in common stock when restrictions end) which vest over
five years. Prior to fiscal 2003, the Committee also issued stock options to
program participants with a projected value approximately equal to the
restricted share equivalent units. For performance in fiscal 2003 and 2004, the
Committee determined to eliminate the stock option grants to executive officers
and in lieu of the stock options issued an equivalent award of restricted units
(tracking appreciation or depreciation in ConAgra Foods' stock during the
restricted period and payable in cash when restrictions end) which vest over
five years. No long-term incentives were paid to executive officers under the
plan for fiscal 2005.
The Committee also administers ConAgra Foods' stock plans, which
authorize various stock-based incentives, including grants of stock options and
restricted stock. The Committee historically granted options on an annual basis
in the range of 1% to 1.5% of ConAgra Foods' outstanding common stock. For
fiscal 2005 performance, options were granted to approximately 970 ConAgra Foods
employees; no options were granted to executive officers. Mr. Sklarsky received
a grant of 50,000 shares of restricted stock as part of his November 2004
employment agreement. The options and restricted stock/units granted in fiscal
2005 or for fiscal 2005 performance were approximately 0.8% of the Company's
outstanding common stock. The Committee grants stock options at the prevailing
market price of ConAgra Foods common stock and such options therefore will
benefit the recipient only if ConAgra Foods' stock price increases. The Company
does not reprice options.
While the Committee does not object to the concept of recognizing the
compensation cost of options based on a fair value approach, the Company
currently does not intend to adopt such an approach unless there is agreement on
standardized rules that are applicable to all companies. The Company believes a
uniform rule is necessary to enable investors to make informed comparisons
between companies. The Committee will consider other equity-based forms of
executive compensation, including performance-based awards linked to equity or
other comparable performance criteria.
Stock Ownership and Retention Requirements
ConAgra Foods' directors and executive officers are committed to owning
stock in the Company, which aligns their interests with the interests of
stockholders. As part of that commitment directors will not sell any of their
ConAgra Foods stock until they cease to be a director, and an executive officer
can sell ConAgra Foods stock only during one "window" each year and only if they
continue to meet their stock retention guidelines. In 2004, our board adopted
stock ownership guidelines for all executive officers, all senior operating
officers, and certain other officers. The ownership guideline is ten times base
salary for the chief executive officer and between two and six times base salary
for other executive officers.
Compensation Consultant
The Committee retained Towers Perrin as its independent compensation
consultant for fiscal 2005. Towers Perrin assessed the appropriateness and
competitiveness of the Company's executive compensation program, as well as the
compensation paid to each of its executive officers. The compensation consultant
reported on comparisons to the compensation practices at other food companies as
well as other consumer product companies. While the input from the compensation
consultant is not the determining factor in the Committee's review of executive
compensation, their input represents an important element in the Committee's
evaluation of the Company's executive compensation programs.
Internal Revenue Service Regulations
The Committee has reviewed ConAgra Foods' 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' executive
compensation plans so that payments will generally be fully deductible. However,
ConAgra Foods 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.
ConAgra Foods, Inc. Human Resources Committee
Carl E. Reichardt, Chairman
David H. Batchelder
John T. Chain, Jr.
Steven F. Goldstone
Ronald W. Roskens
AUDIT COMMITTEE REPORT
The Audit Committee is composed of four directors, each of whom meets
the independence and experience requirements of the New York Stock Exchange. The
Board of Directors has determined that all members of the Audit Committee are
audit committee financial experts (as defined by the Securities and Exchange
Commission). The Audit Committee assists the Board of Directors in fulfilling
its oversight responsibilities by reviewing (1) the integrity of the financial
statements of the Company, (2) the qualifications, independence and performance
of the 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
is available on the Company's website.
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.
The Audit Committee has sole authority to retain, compensate, oversee
and terminate the independent auditor. The Audit Committee reviews the Company's
annual audited financial statements, quarterly financial statements, and filings
with the Securities and Exchange Commission. The Audit Committee reviews reports
on various matters, including: (1) critical accounting policies of the Company,
(2) material written communications between the independent auditor and
management, (3) the independent auditor's internal quality-control procedures,
(4) significant changes in the Company's selection or application of accounting
principles, and (5) the effect of regulatory and accounting initiatives on the
financial statements of the Company. The Committee also has the authority to
conduct investigations within the scope of its responsibilities and to retain
legal, accounting and other advisors to assist the Committee in its functions.
During the last fiscal year, the Audit Committee met and held
discussions with representatives of ConAgra Foods management, its internal audit
staff, and Deloitte & Touche, independent auditor. 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 29, 2005.
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
2005 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 29, 2005 for filing with the Securities and Exchange Commission.
ConAgra Foods, Inc. Audit Committee
Stephen G. Butler, Chairman
Mogens C. Bay
W.G. Jurgensen
Kenneth E. Stinson
COMPARATIVE STOCK PERFORMANCE
The comparative stock performance graphs shown below compare the yearly
change in cumulative value of ConAgra Foods common stock with certain Index
values for both five- and ten-year periods ended fiscal 2005, according to
Bloomberg. Both graphs set the beginning value of ConAgra Foods common stock and
the Indices at $100. All calculations assume reinvestment of dividends. The
performance graphs compare ConAgra Foods with the Standard and Poor's (S&P) 500
Stock Index and the S&P Packaged Foods Index. All Index values are weighted by
capitalization of companies included in the group.
FIVE YEAR COMPARISON
Starting
Basis 2000 2001 2002 2003 2004 2005
---------------------------------------------------------------------------------------------------
ConAgra Foods $100.00 $ 92.08 $117.04 $113.38 $144.29 $141.96
S&P 500 $100.00 $ 93.82 $ 80.69 $ 70.74 $ 86.45 $ 94.13
S&P Packaged Foods $100.00 $112.00 $130.47 $123.67 $150.09 $164.33
TEN YEAR COMPARISON
Starting
Basis 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
------------------------------------------------------------------------------------------------------------------
ConAgra Foods $100.00 $133.26 $196.04 $193.18 $176.43 $160.73 $148.00 $188.12 $182.23 $231.91 $228.17
S&P 500 $100.00 $132.61 $169.01 $221.29 $267.82 $286.95 $269.21 $231.52 $202.98 $248.06 $270.11
S&P Packaged Foods $100.00 $123.13 $163.04 $217.74 $192.43 $177.66 $198.97 $231.78 $219.71 $266.64 $291.94
ITEM 2: Approval of Amendment to the Certificate of Incorporation
to Declassify the Board of Directors
Stockholders are being asked to approve an amendment to Article VII of the
ConAgra Foods Certificate of Incorporation in order to phase out the present
three-year staggered terms of our directors and to provide instead for the
annual election of all directors. Under the present classified board structure,
our Board of Directors is divided into three classes with directors elected to
staggered three-year terms. Approximately one-third of the directors stand for
election each year. If the amendment is approved, directors will be elected to
one-year terms of office after their three-year terms expire at the 2006, 2007
and 2008 Annual Meetings.
The Corporate Governance Committee has considered the advantages and
disadvantages of maintaining the classified board structure, which was adopted
by the ConAgra Foods' stockholders in 1977. After completing its review, the
Corporate Governance Committee recommended and the Board approved, and
recommends to stockholders, an amendment to the Certificate of Incorporation to
phase out the classified board structure.
In determining whether the amendment is in the best interests of the
Company's stockholders, the Corporate Governance Committee and the Board of
Directors, with the assistance of outside advisors, considered arguments for
maintaining, as well as for eliminating, the classified board structure. The
Board recognized that several arguments favored retention of the classified
board structure. The overlapping three-year terms of directors provide stability
and ensure that, at any given time, a majority of the directors have at least
one year's experience on the Board. This assurance of director experience is
important because of the need for the Board to have experience-based knowledge
of the Company's business and strategy. A classified board also permits
long-term strategic planning by ensuring experienced representation of the
long-term interests of the Company and its stockholders. In addition, three-year
director terms may strengthen director independence by reducing short-term
interest pressure on directors.
The Board also considered the views of investors who believe that the
classified board structure reduces the accountability of directors to
stockholders because the directors on such a board do not face an annual
election. Since director elections are the primary means by which the
stockholders can affect corporate management, the classified board structure may
diminish stockholder influence over Company policy. The Board also considered
the fact that some companies are transitioning away from a classified board
structure.
Board Recommendation
After weighing all of these considerations, the Corporate Governance
Committee recommended the elimination of the classified board, and the Board of
Directors agreed and determined that the amendment to the Certificate of
Incorporation is advisable and in the best interests of the Company and its
stockholders. Accordingly, the Board has approved the amendment and recommends
that Company stockholders approve the amendments by voting in favor of this
proposal.
The Amendment
If the proposal is adopted by the Company's stockholders, Article VII of the
Company's Certificate of Incorporation will be amended to phase out the current
division of the Board of Directors into three classes and to provide instead for
the annual election of directors commencing with the class of directors standing
for election at the 2006 Annual Meeting. To ensure a smooth transition to the
new system, and to permit the current directors to serve out the three-year
terms to which the stockholders elected the directors, the amendments will not
shorten the term of any director elected at or before the 2005 Annual Meeting.
The new procedures would, however, apply to all directors elected after the 2005
Annual Meeting, including any current directors who are re-nominated after their
current terms expire. Thus, the current directors who were elected at the 2003
Annual Meeting for three-year terms would, if re-nominated, stand for election
at the 2006 Annual Meeting for one-year terms. At the 2007 Annual Meeting, the
directors elected to one-year terms at the 2006 Annual Meeting, together with
the current directors whose three-year terms expire in 2007 would, if
re-nominated, stand for election for one-year terms. Beginning with the 2008
Annual Meeting, the classification of the Board would terminate, and all
directors would be subject to annual election.
The amendment also provides for removal of the supermajority vote requirement
for any change to Article VII of the Company's Certificate of Incorporation. If
the proposal is adopted by the Company's stockholders and stockholders in the
future wish to reestablish a classified board structure, such action would
require the affirmative vote of a majority of the Company's outstanding voting
stock.
The text of the amendment is set forth in Appendix A to this proxy statement,
with deletions indicated by strike-throughs and additions indicated by
underlining. The Board will adopt conforming amendments to ConAgra Foods' Bylaws
if the amendment is approved by stockholders.
Vote Required
Under Delaware law and the Company's Certificate of Incorporation, this
proposal must be approved by (1) 80% of the Company's outstanding shares of
common stock or (2) a majority of the Company's outstanding shares of common
stock and at least 75% of the Board of Directors. The Board unanimously approved
the amendment on July 8, 2005 and, as a result, this proposal will be adopted
upon the affirmative vote of a majority of the Company's outstanding shares of
common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 2.
ITEM 3 AND ITEM 4: Approval of Amendments to the
Certificate of Incorporation to Repeal Supermajority Provisions
Article XIV and Article XV of the ConAgra Foods Certificate of Incorporation
require a supermajority stockholder vote to approve certain transactions and
business combinations with a significant stockholder. The Board of Directors has
adopted resolutions, subject to stockholder approval, approving and declaring
the advisability of amendments to the Company's Certificate of Incorporation to
eliminate these supermajority vote requirements. Stockholders are being asked to
vote on the amendments to Articles XIV (Item 3) and XV (Item 4) separately
because the vote required to approve each amendment is different and discussed
below under "Vote Required".
Article XIV requires a 75% affirmative vote of ConAgra Foods' outstanding
voting stock to approve (1) a merger or consolidation with, (2) the issuance or
transfer of securities of ConAgra Foods in exchange for assets, securities or
cash to or (3) the sale of all or a substantial part of the assets of ConAgra
Foods to a 5% stockholder. The 75% voting requirement does not apply in certain
instances, including if the transaction was approved by a majority of the Board
prior to the time that the stockholder became a 5% stockholder or if the
transaction is approved by a three-fourths vote of the Board at any time prior
to its consummation.
Article XV requires the approval of 95% of ConAgra Foods' outstanding voting
stock for certain business combinations with a 30% stockholder. The 95% voting
requirements is inapplicable if fair price, dividend, proxy, and other
procedures detailed in Article XV have been observed by the stockholder since it
acquired 30% control.
The Corporate Governance Committee and the full Board of Directors have
considered carefully the advantages and disadvantages of the supermajority vote
requirements in Article XIV and Article XV of the Company's Certificate of
Incorporation. The supermajority vote provisions within Articles XIV and XV were
added to the Company's Certificate of Incorporation in 1976 and 1977,
respectively. These provisions are generally intended to encourage a person
making an unsolicited bid for a company to negotiate with the Board of Directors
to reach terms that are fair and provide the best results for all stockholders.
Without such provisions it may be possible for the holders of a majority of the
shares represented at a meeting to take actions that would give them effective
control of the company without negotiating with the Board to achieve the best
results for other stockholders. While these measures can be beneficial, the
Board recognizes there are also compelling arguments for having a lower
threshold for stockholder votes. The requirement of a supermajority vote can
limit the ability of stockholders to effect change by essentially providing a
veto to a large minority stockholder or group of stockholders. In addition, a
lower threshold for stockholder votes can increase stockholders' ability to
effectively participate in corporate governance. The Board is committed to
principles of corporate democracy and its determination furthers this goal.
If Article XIV and Article XV are eliminated, then if stockholder approval
were required under Delaware law, the holders of only a majority of the
Company's outstanding voting stock would be required to approve the transactions
and business combinations described in Articles XIV and XV, subject to the
following exception. If the transaction constitutes a "business combination"
within the meaning of Section 203 of the Delaware General Corporation Law
involving a person owning 15% or more of the Company's outstanding voting stock
(referred to as an "interested stockholder"), then the transaction could not be
completed for a period of three years after the date the person became an
interested stockholder unless (1) the Board of Directors approved either the
business combination or the transaction that resulted in the person becoming an
interested stockholder prior to the time the person became an interested
stockholder, (2) upon consummation of the transaction that resulted in the
person becoming an interested stockholder, that person owned at least 85% of the
Company's outstanding voting stock (excluding shares owned by persons who are
directors and also officers of ConAgra Foods and shares owned by certain ConAgra
Foods employee benefit plans) or (3) the business combination is approved by the
Board and by the affirmative vote of at least 66 2/3% of the Company's
outstanding voting stock not owned by the interested stockholder.
Board Recommendation
After completing its review, the Corporate Governance Committee recommended
elimination of the Article XIV and Article XV supermajority vote requirements,
and the Board of Directors agreed and determined that the amendments are
advisable and in the best interests of the Company and its stockholders.
Accordingly, the Board has approved the amendments and recommends that Company
stockholders approve the amendments by voting in favor of the Item 3 and Item 4
proposals.
The Amendments
The proposed amendments would eliminate Article XIV and Article XV of the
Company's Certificate of Incorporation in their entirety.
Vote Required
Under Delaware law and the Company's Certificate of Incorporation, the
Item 3 proposal to repeal the Article XIV supermajority provision must be
approved by 75% of the Company's outstanding shares of common stock. The Item 4
proposal to repeal the Article XV supermajority provision must be approved by
(1) 95% of the Company's outstanding shares of common stock or (2) a majority of
the Company's outstanding shares of common stock and at least 80% of the Board
of Directors who would be eligible to serve as "continuing directors" as the
term is defined in Article XV. The Board unanimously also approved the Article
XV amendment on July 8, 2005 and, as a result, the Item 4 proposal will be
adopted upon the affirmative vote of a majority of the Company's outstanding
shares of common stock.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 3 AND ITEM 4.
ITEM 5: Ratification of Appointment of Independent Auditors
The firm of KPMG LLP has been appointed by the Audit Committee to
conduct the fiscal 2006 audit of the Company's financial statements. As a matter
of good corporate governance, we are submitting the appointment of KPMG to our
stockholders for ratification.
The firm of Deloitte & Touche LLP conducted the fiscal 2004 and 2005
audits. Fees billed by Deloitte & Touche to the Company for services provided
for the 2005 and 2004 fiscal years were as follows:
2005 2004
Audit Fees $6,958,000 $4,079,000
Audit-Related Fees 269,000 1,358,000
Tax Fees 1,190,000 1,047,000
All Other Fees 0 0
---------- ----------
Total Fees $8,417,000 $6,484,000
Audit Fees consist of the audit of the Company's fiscal 2005 and 2004
annual financial statements and the review of the Company's quarterly financial
statements during fiscal 2005 and 2004.
Audit-Related Fees consist primarily of employee benefit plan audits,
and services related to business divestitures.
Tax Fees consist of international tax planning, federal, state and
expatriate tax compliance.
All Other Fees. There were no services in this category provided in
fiscal 2005 or fiscal 2004.
The Audit Committee pre-approves all audit and non-audit services
performed by the independent auditor. The Audit Committee will periodically
grant general pre-approval of certain audit and non-audit services. Any other
services must be specifically approved by the Audit Committee, and any proposed
services exceeding pre-approved cost levels must be specifically pre-approved by
the Audit Committee. In periods between Audit Committee meetings, the Chairman
of the Audit Committee has the delegated authority from the Committee to
pre-approve additional services, and such pre-approvals are then communicated to
the full Audit Committee.
The Audit Committee has appointed KPMG as the independent registered
public accounting firm to conduct the 2006 audit of the Company's financial
statements and the Board of Directors requests that the stockholders ratify this
appointment. The selection for the fiscal 2006 was a result of a process by
which the Audit Committee solicited and received proposals from three of the
largest independent auditing firms: Deloitte & Touche LLP, KPMG LLP, and
PriceWaterhouseCoopers LLP. After consideration of each of the proposals, on
July 15, 2005 the Audit Committee retained KPMG as the company's independent
auditors for fiscal 2006 and determined to dismiss Deloitte & Touche effective
with the completion of their audit of the 2005 fiscal year, [which occurred on
_______, 2005.]
Deloitte & Touche's reports on the Company's consolidated financial
statements for the fiscal years ended May 25, 2003 and May 30, 2004, did not
contain an adverse opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting principles. Deloitte &
Touche's report dated July 26, 2004 (April 27, 2005 as to Note 21) included
explanatory paragraphs related to change in methods of accounting for variable
interest entities and asset retirement obligations in 2004, goodwill and other
intangible assets in 2003 and derivative instruments and hedging activities in
2002 and the restatement of the company's consolidated financial statements.
During the 2004 and 2005 fiscal years and through July 15, 2005, there were no
disagreements with Deloitte & Touche on any matter of accounting principle or
practice, financial statement disclosure, or auditing scope or procedure which,
if not resolved to Deloitte & Touche's satisfaction, would have caused Deloitte
& Touche to make reference to the subject matter of the disagreement in
connection with its report on the Company's consolidated financial statements
for such years. There were no reportable events as defined in Item 304(a)(1)(v)
of Regulation S-K except for a material weakness in internal control with
respect to accounting for income taxes as reported by the Company in its Form
10-K/A filed April 29, 2005.
During the 2004 and 2005 fiscal years and prior to the appointment of
KPMG, the Company did not consult KPMG with respect to the application of
accounting principles to a specified transaction, either completed or proposed,
or the type of audit opinion that might be rendered on the Company's
consolidated financial statements, or any other matters or reportable events as
set forth in Item 304(a)(2)(i) and (ii) of Regulation S-K.
Representatives from KPMG and Deloitte & Touche are expected to be
present at the annual meeting. The representatives will have the opportunity to
make a statement if they so desire and will be available to respond to
appropriate questions. In the event the stockholders do not ratify the
appointment, the appointment will be reconsidered by the Audit Committee.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 5.
ITEM 6: STOCKHOLDER PROPOSAL - ANIMAL WELFARE
The Company has been informed that People for the Ethical Treatment of
Animals (PETA), 501 Front Street, Norfolk, Virginia 23510, which reports
ownership of at least $2,000 in market value of ConAgra Foods common stock,
intends to introduce the following resolution at the annual meeting:
Shareholders' Resolution
This proposal is submitted by People for the Ethical Treatment of Animals
(PETA), which owns 140 shares of ConAgra stock.
Our company has shown its commitment to the important consumer issue of animal
welfare by auditing our animal product suppliers based on industry guidelines
and by publicly stating its commitment to animal welfare. ConAgra should be
commended for these steps. However, the facilities that supply our company with
animal products are still home to abuses that most decent people would deem
unacceptable. Our company has taken some laudable first steps to address these
issues, but there is much work left to be done.
One area in which much improvement is needed is that of chicken slaughter.
Currently, chickens raised for ConAgra products are hung upside-down by their
often-injured legs in painful metal shackles and run through an electrified stun
bath that often gives them painful shocks without rendering them insensible to
pain. Many are still fully conscious when their throats are slit or when they
are dunked into tanks of scalding-hot water for feather removal. Clearly, there
are major animal welfare concerns with this outdated process.
Other companies are starting to explore a new slaughter technology known as
controlled-atmosphere killing (CAK), which eliminates most - if not all - of
these concerns. When using CAK, chickens are placed in a controlled environment
in which the oxygen that they are breathing is slowly replaced with an inert
gas, such as argon or nitrogen, putting the birds to sleep quickly and
painlessly. CAK is a USDA-approved method of slaughtering chickens and has been
described by animal welfare experts as "the most stress-free, humane method of
killing poultry ever developed." The technology also has positive worker- and
food-safety implications, and it has been shown that the resulting savings would
recoup the initial investment in a year and a half or less.
CAK is perhaps the single most important scientific advance in the field of
chicken slaughter. Since our company has acknowledged its commitment to animal
welfare, it has a responsibility to fully explore any such advances.
Resolved: Shareholders request that the board of directors issue a report to
shareholders by March 2006, prepared at reasonable cost and omitting proprietary
information, on the feasibility of ConAgra's requiring its chicken suppliers to
phase in controlled-atmosphere killing within a reasonable time frame, with a
focus on the animal welfare and economic benefits that this technology could
eventually bring to all our company's supplier slaughter facilities.
Board Recommendation
ConAgra Foods' first priority has always been the safety and quality of
its products. The Company is also committed to the humane treatment of animals.
The Company requires that its suppliers comply with government regulations
pertaining to the humane treatment of animals.
Certain of the Company's suppliers have evaluated, and continue to
evaluate, CAK. These evaluations considered a number of factors, including:
animal welfare; scientific research and studies; production methods used
commercially both in the U.S. and internationally; food safety and product
quality; the safety of humans involved in the slaughter process; technical
difficulties in operating equipment and procedures; environmental factors and
expected costs. The research is incomplete and inconclusive as to whether CAK is
a better and more humane method than conventional methods.
The Company's commitment, leadership and results with respect to animal
welfare matters are well established, and recognized, within the industry. The
Company works hard to be a good corporate citizen and believes in good animal
handling practices. The Company believes that the proposed animal welfare report
is unnecessary and would not result in any additional benefit to shareholders.
The proposed report would be costly and time-intensive, and is duplicative of
existing policies, initiatives and efforts.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 6.
ITEM 7: STOCKHOLDER PROPOSAL - GENETICALLY ENGINEERED PRODUCTS
The Company has been informed that the Basilian Fathers of Toronto,
15015 Piedmont, Detroit, Michigan 48223, the Sisters of Charity of Cincinnati,
5900 Delhi Road, Mount St. Joseph, Ohio 45051, ASC Investment Group, 1400 South
Sheridan, Wichita, Kansas 67213 and The Brethren Benefit Trust, Inc., 84 State
Street, Suite 1000, Boston, Massachusetts 02109, each of which reports ownership
of at least $2,000 in market value of ConAgra Foods common stock, intend to
introduce the following resolution at the annual meeting:
Report on Impacts of Genetically Engineered Products
RESOLVED: Shareholders request that an independent committee of the Board review
Company policies and procedures for monitoring genetically engineered (GE)
products and report (at reasonable cost and omitting proprietary information) to
shareholders within six months of the annual meeting on the results of the
review, including:
o the scope of the Company's food products derived from or containing GE
ingredients;
o a contingency plan for sourcing non-GE food ingredients should
circumstances so require.
SUPPORTING STATEMENT
Disclosure of material information is a fundamental principle of our capital
markets. Investors, their confidence in corporate bookkeeping shaken, are
starting to scrutinize other possible "off-balance sheet" liabilities, such as
risks associated with activities harmful to human health and the environment,
that can impact long-term shareholder value.
SEC reporting requirements include disclosure of trends and uncertainties that
the company reasonably expects will have a material impact on revenues. Company
directors and officers must proactively identify and assess trends or
uncertainties that may adversely impact their revenues and disclose the
information to shareholders.
Between 2001 and 2004, approximately 15,000 hectares (150 square kilometers) in
four US states were planted with an unapproved variety of GE seed corn,
resulting in about 133 million kilograms of the unapproved corn in the food
chain. (New Scientist 3/23/05; Nature 3/22/05)
StarLink corn, not approved for human consumption, has been detected in US Food
Aid (12/04) as well as in a U.S. corn shipment to Japan (12/02). StarLink first
contaminated U.S. corn supplies in September 2000, triggering a recall of 300
products.
The FDA does not require producers of GE food products to seek prior FDA
approval of finished GE food products; producers of GE-products are merely
encouraged to have voluntary safety consultations with the FDA.
Indicators that genetically engineered organisms MAY be harmful to humans,
animals, or the environment include:
o The report Safety of Genetically Engineered Foods: Approaches to Assessing
Unintended Health Effects (National Academy of Sciences [NAS] 7/2004)
states:... "there remain sizable gaps in our ability to identify
compositional changes that result from genetic modification of organisms
intended for food; to determine the biological relevance of such changes to
human health; to devise appropriate scientific methods to predict and
assess unintended adverse effects on human health." (p. 15) Post-marketing
surveillance has not been used to evaluate any of the GE crops currently on
the market. (p. 153)
o Gone to Seed (Union of Concerned Scientists) reports that genetically
engineered DNA is contaminating U.S. traditional seed stocks, of corn,
soybeans and canola...if left unchecked could disrupt agricultural trade,
unfairly burden the organic foods industry, and allow hazardous materials
into the food supply.
Producers of salmon genetically engineered to speed the fish's growth to
maturity expect their federal application to sell the fish in the United States
to be decided within a year, renewing concern among commercial fishermen
concerned about consequences if the genetically modified fish escapes and
mingles with wild salmon. (AP 3/9/05)
We believe such a report will disclose information material to the company's
future.
Board Recommendation
ConAgra Foods' highest priority is the quality and safety of its food
products. The Company is committed to using only approved ingredients in its
products and all of its products comply with U.S. national food laws and
labeling regulations.
ConAgra Foods believes that questions about genetically engineered
foods should be entrusted to the government agencies that have the knowledge,
expertise and authority needed to resolve any issues uniformly on the basis of
sound science, including the United States Food and Drug Administration ("FDA"),
the United States Department of Agriculture ("USDA") and the Environmental
Protection Agency ("EPA"). Under current law, producers of all foods have an
obligation to ensure the foods they offer are safe. The FDA has the
responsibility and authority to evaluate each application of genetic engineering
on a case by case basis. After their evaluation, ConAgra Foods follows FDA's
published guidance when sourcing ingredients for its products.
ConAgra Foods does not believe the report requested by the shareholder
proposal can be accurately prepared, given the current practices of multi-vendor
sourcing prevalent in the United States food distribution system. ConAgra Foods
produces and markets thousands of products in hundreds of different product
categories, and uses large volumes of numerous ingredients derived from a wide
variety of crops, as well as meat, poultry and dairy ingredients. It would be
difficult and costly, if not impossible in the absence of federal laws and
regulations, for the Company to require its numerous suppliers to identify
ingredients derived from modern biotechnology. Further, requiring the sourcing
of crops not genetically engineered is impractical for the Company. The food
supply chain in the United States, from the farmer forward, has not established
a system to identify and segregate genetically engineered crops. While certain
companies may be able to obtain limited quantities of selective ingredients
derived exclusively from non-genetically engineered crops, it would not be
possible for a company of ConAgra Foods' size and complexity to do so.
Preparation of the report would impose substantial costs. Due to the
expenditure of time and the costs, required due to the difficulty of
differentiating genetically engineered ingredients from their unmodified
counterparts, the Company does not believe the report can be prepared at
reasonable cost. ConAgra Foods also believes the report must necessarily include
confidential information about its products, and the publication of the
information would put the Company at a competitive disadvantage.
ConAgra Foods believes that issues relating to biotechnology should be
resolved uniformly by the FDA, USDA, EPA and other appropriate governmental
regulatory agencies. These regulatory agencies can evaluate all aspects of the
issue in a balanced and fully informed manner, and on the basis of sound
science.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 7.
ITEM 8: Stockholder Proposal Concerning Suspension of Stock Grants
for Directors and Senior Executive Officers
The Company has been informed that Donald D. Hudgens, 16711 Pine Street, Omaha,
Nebraska, 68130, who reports ownership of at least $2,000 in market value of
ConAgra Foods common stock, intends to introduce the following resolution at the
annual meeting:
Suspension of Stock Options and Stock Grants
Resolved: The shareholders of ConAgra Foods, Inc. urge the Board of Directors to
place a five year suspension on any and all stock option grants and/or any other
type of stock grants for senior executive officers and corporate directors.
Supporting Statement
As a shareholder, I support compensation policies for our company's leadership
team which at the same time rewards the shareholders. Shareholders are rewarded
through dividends as well as stock price appreciation.
From 1983 through 2000 dividends grew at an average annual rate exceeding
fifteen percent per year. From 2001 through 2003 the average annual rate has
been reduced to less than ten percent.
Common stock price exceeded $38 in December of 1997 and dropped lower than $16
in March of 2000, and at the time of submission of this proposal was less than
$27.
The ConAgra 2000 Stock Plan authorized the issuance of 30,000,000 shares of
stock to be available for a variety of stock option purposes. This plan followed
plans of 1985, 1990 and 1995 which issued a combined 58,900,000 shares which
were depleted. This represents over 16% of the more than 500 million shares
outstanding. Common shareholders position is being diluted and the unseen cost
of these options is affecting earnings to our detriment.
These "Stock Option Plans" were approved by shareholders in 1985, 1990, 1995 and
2000 ostensibly for "assisting ConAgra in attracting, retaining and motivating
employees and in enhancing of the long-term mutuality of interest between
ConAgra stockholders and its officers and directors" (ConAgra 2000 proxy
statement). The Stock Option Plan of 1995 stated "The plan is intended to
increase stockholder value by motivating superior performance by means of stock
incentives and enabling ConAgra to attract and retain the services of a
management team for the long-term financial success of ConAgra" (ConAgra 1995
proxy statement).
I believe such a suspension would give our management team the
opportunity to re-focus on the stated purposes in the 1995 and 2000 Stock Option
Plans goals of enhancing shareholder value.
Please vote "for" this proposal.
Board Recommendation
The Board of Directors believes the Company's stock-based incentives are
appropriate and competitive. Using stock-based incentives helps the company
recruit, retain and motivate talented personnel in a highly competitive economy.
Stock-based incentives which are at risk motivate executives to focus on the
Company's long-term performance and results.
o Employees earn options as a part of their compensation package. The
value of this portion of the employee's compensation is at risk and
not guaranteed. The employee receives no benefit from options unless
the stock price appreciates in the future, which aligns the interests
of our employees and our stockholders.
o The number of stock-based incentives granted annually by the Company
has been below industry averages for the last five years.
o Most major consumer companies, and all of ConAgra Foods' competitors
in the S&P Packaged Foods Index, use some form of stock-based
incentives. The Company competes for talent with these and other
companies. For example, over the last several years, the Company has
hired key employees who have worked for a variety of companies,
including Kraft, Campbell's, Heinz, PepsiCo, Kellogg's, Coca Cola,
General Mills and Procter & Gamble, none of which operate under the
provisions contained in the proposal. ConAgra Foods believes the
adoption of the proposal would significantly impair its ability to
attract, retain and motivate such key employees.
The Company's current stock plans, all of which were approved by stockholders,
give the Human Resources Committee the tools to structure competitive equity
incentives. All members of the Human Resources Committee are independent.
Much has been written in recent years about stock option and other equity abuses
at some public companies. The abuses include the granting of options at below
market prices, the repricing of underwater options, and the granting of
excessive numbers of equity incentives.
Those abuses do not exist at ConAgra Foods. The Company grants options with an
exercise price equal to the fair market value of the common stock on the date of
the grant. The Company does not grant "discount options" and has never repriced
options. The number of equity incentives utilized annually by the Human
Resources Committee is below our industry's averages.
The board and its Human Resources Committee believe the Company's current
programs of providing equity incentives to directors and senior executive
officers aligns such persons' interests with the long-term interests of the
ConAgra Foods' stockholders. The implementation of the proposal would undermine
this alignment and would create competitive disadvantages for ConAgra Foods. The
board therefore recommends the proposal be rejected.
THE BOARD RECOMMENDS A VOTE "AGAINST" ITEM 8.
ITEM 9: STOCKHOLDER PROPOSAL - DECLASSIFIED BOARD
The Company has been informed that John Chevedden, as proxy for William
Steiner, 112 Abbottsford Gate, Piermont, New York 10968, who reports ownership
of at least $2,000 in market value of ConAgra Foods common stock, intends to
introduce the following resolution at the annual meeting:
Elect Each Director Annually
RESOLVED: Shareholders request that our Directors take the necessary steps, in
the most expeditious manner possible, to adopt and implement annual election of
each director. This would include that our director elections completely convert
from the current staggered system to 100% annual election of each director in
one election cycle if practicable. Also to transition by direct action of our
board of directors if this is practicable.
The Safeway Inc. 2004 definitive proxy is one example of converting from a 100%
staggered system to a 100% annual election of each director system in one
election cycle. Southwest Airlines began transition to annual election of each
director solely through direct action by the Southwest Airlines board in 2005.
William Steiner, 112 Abbottsford Gate, Piermont, NY 10968 submitted this
proposal.
70% Yes-Vote
Thirty-five (35) shareholder proposals on this topic achieved an impressive 70%
average yes vote in 2004. The Council of Institutional Investors www.cii.org,
whose members invested $3 trillion, recommends adoption of this proposal topic.
I believe that now is a particularly important time for our company to adopt
annual election of each direct due to these items in the news:
o ConAgra Foods Inc. said it will restate more than two years of
earnings due to bungled accounting for income taxes, adding fuel to
Wall Street's growing frustration with ConAgra management.
o ConAgra said the restatement will reduce combined after-tax profits
reported for fiscal years 2003, 2004 and the first two quarters of
this fiscal year by as much as $200 million, which one analyst says is
a reduction of as much as 15%.
o Wall Street analysts appear to be losing confidence in ConAgra's
management. John McMillin, an analyst with Prudential Equity Group,
wrote yesterday in a research note that ConAgra's directors should
consider "restating" the bonuses received by Chairman and Chief
Executive Bruce Rohde for the past three years.
o "Where is the Board?"said David Nelson, an analyst at Credit Suisse
First Boston, in a note issued to investors.
Source: The Wall Street Journal, March 25, 2005
Annual Vote on Each Audit Committee Member
Annual election of each director would automatically enable us to vote annually
on each member of our key Audit Committee. This is particularly important
because poor auditing played a key role in the $200 billion-plus combined
market-value loss at WorldCom, Enron, Tyco, Qwest and Global Crossing.
Best for the Investor
Arthur Levitt, Chairman of the Securities and Exchange Commission, 1993-2001
said: In my view it's best for the investor if the entire board is elected once
a year. Without annual election of each director shareholders have far less
control over who represents them.
"Take on the Street" by Arthur Levitt.
Elect Each Director Annually
Board Recommendation
The Board of Directors has submitted a proposal to amend the Company's
Certificate of Incorporation to declassify the Board. See "ITEM 2: Approval of
Amendments to the Certificate of Incorporation to Declassify the Board of
Directors." The proposal submitted by the Board would phase-in the annual
election of directors. The stockholder proposal requests the annual election of
directors be implemented in one election cycle if practicable. The proposal
submitted by the Board would have a binding effect if approved, while the
stockholder proposal is only a recommendation. Consequently, the Board does not
believe the stockholder proposal is desirable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 9.
ITEM 10: STOCKHOLDER PROPOSAL - REPEAL SUPERMAJORITY PROVISIONS
The Company has been informed that John Chevedden, as proxy for Chris
Rossi, custodian for Vanessa Rossi, P.O. Box 249, Boonville, California 95415,
who reports ownership of at least $2,000 in market value of ConAgra Foods common
stock, intends to introduce the following resolution at the annual meeting:
Adopt Simple Majority Vote
RECOMMEND: Adopt Simple Majority Vote. That our Board of Directors take each
step necessary in the most expeditious manner for a simple majority vote to
apply on each issue subject to shareholder vote except director election or
director ratification. This includes the application of a simple majority vote
threshold to the fullest extent consistent with state law including shareholder
votes on mergers and charter amendments. Our company still has 75% or greater
shareholder voting requirements. The objective would be the nearest resemblance
to a simple-majority vote of shares cast yes or no on each issue subject to
shareholder vote consistent with state law.
Chris Rossi, P.O. Box 249, Boonville, Calif. 95415 submitted this proposal.
75% Yes-Vote
This topic won a 75% yes-vote average at 7 major companies in 2004. The Council
of Institutional Investors www.cii.org formally recommends adoption of this
proposal topic.
Terminate Potential Frustration of the Shareholder Majority
Our current rule allows a 1%-minority to frustrate the will of the shareholder
majority. For example, in requiring our 75%-vote to make certain governance
changes, if 74% vote yes and only 1% vote no - only 1% could force their will on
the overwhelming 74%-majority. Such 75% supermajority vote requirements can lock
in provisions that are harmful to shareholders and limit shareholders' role in
our company. This proposal is intended to expand shareholder rights and increase
our shareholder role and influence in our company.
Progress Begins with a First Step
One reason to take the above RECOMMEND step is our company's vulnerability when
compared to best practices in corporate governance. For instance in 2004 it was
reported (and certain concerns are inserted):
The Corporate Library (TCL), an independent investment research firm in
Portland, Maine rated our company:
"D" in Overall Board Effectiveness
"D" in Board Composition
"D" in CEO Compensation
Overall Governance Risk Assessment = High
TCL said there are too many active CEOs on our board. Active CEOs are often
overcommitted and may not be optimally independent of management's views.
Our company's move to restricted stock from stock options was not necessarily an
improvement, because recipients do not have to satisfy any further performance
conditions to receive the restricted stock any more than they did for stock
options.
We had no Independent Chairman. And our lead director was age 74.
Four of our directors held from 4 to 5 board seats - over-commitment concern.
Our CEO pay was over $10 million in a year.
Our full board met only 7-times in a year.
Directors were still allowed a $1-million Charity Award Program which gives them
prestige at shareholder expense - and at the potential risk of silencing some of
their objective criticism of our CEO.
One Step Forward
The existence of the above governance concerns arguably heightens the importance
of passing the one RECCOMEND topic of this proposal.
Adopt Simple Majority Vote
Yes on 10
Board Recommendation
The Board of Directors has submitted a proposal to repeal the supermajority
provisions within the Company's Certificate of Incorporation. See "ITEM 3 and
ITEM 4: Approval of Amendments to the Certificate of Incorporation to Repeal
Supermajority Provisions and ITEM 2: Approval of Amendment to the Certificate of
Incorporation to Declassify the Board of Directors." The proposal submitted by
the Board would have a binding effect if approved, while this proposal is only a
recommendation. Consequently, the Board does not believe this proposal is
desirable.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" ITEM 10.
FISCAL 2006 STOCKHOLDER PROPOSALS
Proposals of stockholders intended to be presented in the 2006 Annual
Meeting proxy statement must be received by the Company no later than April 16,
2006.
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 2005 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 2004 annual meeting. However, if the date of the 2005 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
We are a party to class action lawsuits and stockholder derivative lawsuits.
Our Annual Report on Form 10-K for the year ended May 29, 2005 provides more
information with respect to matters related to these legal proceedings.
On August 10, 2001, a purported class action lawsuit, Gebhardt v.
ConAgra Foods, Inc., et. al. Case No. 810CV427, was filed in United States
District Court for Nebraska against the Company and certain of its executive
officers alleging violations of the federal securities laws in connection with
the events resulting in the Company's June 2001 restatement of its financial
statements. The company reached an agreement, which received final approval by
the court on May 24, 2005, to settle the lawsuit for $14 million. The
settlement, which is largely covered by insurance, is without admission of
liability or wrongdoing.
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 alleged 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 sought, inter alia, recovery to the Company,
which was 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 Company has reached agreement to
settle the lawsuits for the cost of plaintiff's attorney fees of $300,000, which
will be covered by insurance. The settlement includes certain undertakings and
is without admission of liability or wrongdoing. The settlement was
preliminarily approved by the court on June 13, 2005, and following completion
of steps incident to the settlement process, will be submitted to the court for
final approval.
On June 21, 2005, a purported class action, Berlien v. ConAgra Foods,
Inc., et. al. Case No. 805CV292 was filed in United States District Court for
Nebraska, and on June 30, 2005, a purported class action, Calvacca v. ConAgra
Foods, Inc., et. al. Case No. 805CV00318 was filed in the same court. Each
lawsuit is against the Company and its chief executive officer. The lawsuits
allege violations of the federal securities laws in connection with the events
resulting in the Company's April 2005 restatement of its financial statements
relating to tax matters. Each complaint seeks a declaration that the action is
maintainable as a class action and that the plaintiff is a proper class
representative, unspecified compensatory damages, reasonable attorneys' fees and
any other relief deemed proper by the court. The Company believes the lawsuits
are without merit and plans to vigorously defend the actions.
Two derivative actions were filed by shareholder plaintiffs,
purportedly on behalf of the Company, on July 15, 2005 in United States District
Court for Nebraska, Case No. 805CV342, and Case No. 805CV343. The complaints
alleged that the defendants, directors and certain executive officers of the
Company during the relevant times, breached fiduciary duties in connection with
earnings announcements and events resulting in the Company's April 2005
restatement of its financial statements relating to tax matters. The action
seeks, inter alia, recovery to the Company, which was named as a nominal
defendant in the action, of damages allegedly sustained by the Company and for
reimbursement and restitution. The officers and directors named as defendants in
the action intend to vigorously defend the allegations and believe the actions
are without merit.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires executive
officers and directors to file reports of changes in ownership of ConAgra Foods
common stock with the Securities and Exchange Commission. Executive officers and
directors are required by SEC regulations to furnish the Company with copies of
all Section 16(a) forms so filed. Based solely on a review of the copies of such
forms furnished to the Company and written representation from the Company's
executive officers and directors, ConAgra Foods believes that all persons
subject to these reporting requirements filed the required reports on a timely
basis during fiscal 2005, except that stock held by Kevin Adams, an executive
officer, was not reported on a timely basis in his initial filing but was
subsequently reported.
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.
APPENDIX A
ConAgra Foods, Inc.
Certificate of Incorporation Amendments
Board Declassification
ARTICLE VII, PARAGRAPH (A)
--------------------
(For Edgar purposes only we have indicated proposed additions between two
asterisks (**) and proposed deletions between brackets.)
--------------------
The affairs of this Corporation shall be conducted by a Board of Directors.
The number of directors of the Corporation, not less than nine (9) nor more than
sixteen (16), shall be fixed from time to time by the By-Laws. [Commencing with]
**Until** the annual election of directors by the stockholders of the
Corporation in [1978] **2008**, the directors of the Corporation shall be
divided into three classes: Class I, Class II and Class III, each such class, as
nearly as possible, to have the same number of directors. The term of office of
the [initial] Class [I] **___** directors **elected in 2003** shall expire at
the annual election of directors by the stockholders of the Corporation in
[1978] **2006**, the term of office of the [initial] Class [II] **___**
directors **elected in 2004** shall expire at the annual election of directors
by the stockholders of the Corporation in [1979] **2007**, and the term of
office of the [initial] Class [III] **___** directors **elected in 2005** shall
expire at the annual election of directors by the stockholders of the
Corporation in [1980] **2008**, or in each case thereafter when their respective
successors are elected by the stockholders and qualify. At each annual election
of directors by the stockholders of the Corporation held after [1977] **2005**,
the directors chosen to succeed those whose terms are then expired [shall be
identified as being of the same class as the directors they succeed and] shall
be elected by the stockholders of the [corporation] **Corporation** for a term
[expiring at the third succeeding annual election of directors] **ending at the
annual election of directors by the stockholders of the Corporation following
the annual election of directors by the stockholders of the Corporation at which
the director was elected**, or thereafter when their respective successors in
each case are elected by the stockholders and qualify. **Commencing with the
annual election of directors by the stockholders of the Corporation in 2008, the
classification of the Board of Directors shall terminate and all directors shall
be of one class.**
[The provisions set forth in Article VII(a) may not be repealed or amended
in any respect unless such repeal or amendment is approved by (i) the
affirmative vote of the holders of not less than 80% of the total voting power
of all outstanding shares of stock of this Corporation, or (ii) the affirmative
vote of not less than 75% of the members of the Board of Directors of this
Corporation and the affirmative vote of the holders of a majority of the total
voting power of all outstanding shares of stock of this Corporation.]
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 22, 2005 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, 2, 3, 4 AND 5 AND
AGAINST ITEMS 6, 7, 8, 9 AND 10.
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 21, 2005.
VOTE BY PHONE: 1-800-690-6903 VOTE BY INTERNET: WWW.PROXYVOTE.COM
1. Read the accompanying Proxy 1. Read the accompanying Proxy
Statement and this proxy card. Statement and this proxy card.
2. Call toll free 1-800-690-6903. 2. Go to website www.proxyvote.com.
3. Enter your 12-digit Control Number, 3. Enter your 12-digit Control
shown below. Number, shown below.
4. Follow the recorded instructions. 4. Follow the 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, 2, 3, 4 and 5.
Please mark your votes as indicated in this example [X]
Item 1. Elect Directors - Nominees: Howard G. Buffett, John T. Chain, Jr.,
Ronald W. Roskens and Kenneth E. Stinson
For Withhold For All To withhold authority to vote, mark
All All Except "For All Except" and write nominee's name
on the line below.
[ ] [ ] [ ]
----------------------------------
Item 2. Management Proposal - Declassify Board of Directors
For Against Abstain
[ ] [ ] [ ]
Item 3. Management Proposal - Repeal Supermajority Voting Provisions of Article
XIV of the Certificate of Incorporation
For Against Abstain
[ ] [ ] [ ]
Item 4. Management Proposal - Repeal Supermajority Voting Provisions of Article
XV of the Certificate of Incorporation
For Against Abstain
[ ] [ ] [ ]
Item 5. Ratify the appointment of Independent Auditors
For Against Abstain
[ ] [ ] [ ]
The Board of Directors recommends a vote AGAINST Items 6, 7, 8, 9 and 10.
Item 6. Stockholder Proposal - Animal Welfare
For Against Abstain
[ ] [ ] [ ]
Item 7. Stockholder Proposal - Genetically Engineered Products
For Against Abstain
[ ] [ ] [ ]
Item 8. Stockholder Proposal - Suspension of Stock Grants for Directors and
Senior Executive Officers
For Against Abstain
[ ] [ ] [ ]
Item 9. Stockholder Proposal - Declassify Board
For Against Abstain
[ ] [ ] [ ]
Item 10. Stockholder Proposal - Repeal Supermajority Provisions
For Against Abstain
[ ] [ ] [ ]
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.
------------------------------------
Signature
-----------------------------------
Signature (Joint Owners)
-----------------------------------
Date
NOTE: Please sign as name appears here.
Joint owners should each sign. When signing
as attorney, executor, trustee or guardian,
give full title.