Hormel Foods Corp 8-K, filed Feb 2, 2026
Hormel Foods Corp (HRL)
8-K
2026-02-02
For: 2026-01-27
View Original
Added on
April 04, 2026
About this 8-K
Hormel Foods Corp filed this 8-K on February 2, 2026, reporting on events of January 27, 2026.
Items reported
- Item 5.02: Director or officer change, or executive pay
- Item 5.07: Shareholder vote results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of The Securities Exchange Act of 1934
Date of report (Date of earliest event reported): January 27, 2026
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | |||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(507 ) 437-5611
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | |||||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Adoption of 2026 Equity and Incentive Compensation Plan
On January 27, 2026, Hormel Foods Corporation (the “Company”) held its 2026 Annual Meeting of Stockholders (the “Annual Meeting”). At the Annual Meeting, the Company’s stockholders approved the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan (the “2026 Plan”), which succeeds the Hormel Foods Corporation 2018 Incentive Compensation Plan (the “2018 Plan”). On December 15, 2025, upon the recommendation of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”), the Board unanimously approved and adopted, subject to the approval of the Company’s stockholders at the Annual Meeting, the 2026 Plan to succeed the 2018 Plan. Upon stockholder approval at the Annual Meeting, the 2026 Plan became effective as of January 27, 2026.
In general, the 2026 Plan will be administered by the Committee, and will enable the Committee to provide equity-based or cash-based compensation, including in the form of stock options, appreciation rights, restricted stock, restricted stock units, performance shares, performance units, cash incentive awards and certain other awards based on or related to shares of the Company’s common stock. The purpose of these awards is to attract and retain the Company’s employees, officers, consultants, and non-employee directors, and to provide such persons with incentives and rewards for service or performance. The 2026 Plan permits the Committee to make certain performance-based awards to participants under the 2026 Plan, which awards will be earned based on the achievement of certain management objectives, all as further described in the 2026 Plan.
Subject to adjustment as described in the 2026 Plan, and subject to the 2026 Plan’s share counting rules, as of January 27, 2026, 21,951,785 shares of common stock, par value $0.01465 per share (consisting of 18,000,000 new shares approved for issuance at the Annual Meeting, plus 3,951,785 shares that remained available for issuance under the 2018 Plan), are available for awards granted under the 2026 Plan. Shares underlying certain awards under the 2026 Plan and certain awards under the 2018 Plan that are cancelled or forfeited, expire, are settled for cash, or are unearned, will again be available under the 2026 Plan.
The 2026 Plan also provides that, subject to adjustment as described in the 2026 Plan, the aggregate number of shares actually issued or transferred upon the exercise of incentive stock options will not exceed 18,000,000 shares, and non-employee Board members will not be granted more than $800,000 in compensation for such service in any one calendar year, determined as described in the Plan. The Board generally will be able to amend the Plan, in certain circumstances as described in the Plan.
Further description of the principal features of the 2026 Plan is included in the Company’s definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission on December 17, 2025, under the heading “Item 4 – Approval of the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan.”
These descriptions of the 2026 Plan do not purport to be complete, and are qualified in their entirety by the full text of the 2026 Plan, a copy of which is attached hereto as Exhibit 10.1 and incorporated herein by reference. Also attached hereto as Exhibits 10.2, 10.3, and 10.4 are forms of restricted stock unit, stock option, and restricted stock award agreements, respectively, to be used in connection with grants pursuant to the 2026 Plan.
Adoption of Executive Severance Plan
On January 27, 2026, upon the recommendation of the Committee, the Board unanimously approved and adopted, effective as of January 31, 2026, the Hormel Foods Corporation Executive Severance Plan (the “Severance Plan”). The Severance Plan, without duplicating any other severance protections that may be available to an individual, applies to separations that occur on and after January 31, 2026. It provides for the payment of certain severance benefits to certain of the Company’s officers, as identified by the Committee, in the event of an involuntary termination of employment by the Company without “cause” or by the participant for “good reason” (in each case as described in the Severance Plan). These benefits include:
•cash severance equal to (i) the sum of base salary plus target annual bonus, multiplied by (ii) a severance factor (as designated by the Committee), paid in equal installments in accordance with the Company’s payroll practices over a period of years equal to the participant’s severance factor;
•a lump sum payment equal to monthly estimated COBRA premiums for a number of months equal to (i) 12, multiplied by (ii) the participant’s severance factor;
•a pro-rated bonus for the fiscal year in which the participant’s termination of employment occurs, pro-rated based on actual performance for the full fiscal year; and
•accelerated, pro-rata vesting of outstanding and unvested restricted stock unit awards held by the participant, pro-rated based on the number of days in the vesting period for such award that have elapsed as of the participant’s date of termination.
The Company’s obligation to provide these benefits is generally conditioned on the participant’s satisfaction of certain conditions, including the execution and non-revocation of a customary release of claims in favor of the Company.
The Severance Plan may be amended or terminated at any time, provided that any amendment or termination that would be adverse to a participant requires the participant’s consent, unless the Company provides four months’ advance written notice.
As of the date of this Current Report on Form 8-K, the Company’s then-serving named executive officers (other than Messrs. Ettinger and Ghingo, as described below) and certain other senior executives (as designated by the Committee from time to time) have been designated to participate in the Severance Plan. The severance factor applicable to the role of Chief Executive Officer is currently 2.0, and the severance factor applicable to all other participants is currently 1.0. However, the Severance Plan does not apply to individuals who are parties to agreements with the Company that provide individual severance protections with substantially comparable benefits to those provided by the Severance Plan. Because Jeffrey M. Ettinger (the Company’s Interim Chief Executive Officer) and John F. Ghingo (the Company’s President) are currently parties to individual employment agreements with the Company that set forth the terms of their severance protections, the Severance Plan will not apply to Messrs. Ettinger and Ghingo during the term of their current employment agreements.
The foregoing description of the Severance Plan does not purport to be complete, and is qualified in its entirety by the full text of the Severance Plan, a copy of which is attached hereto as Exhibit 10.5 and incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
The Company held the Annual Meeting on January 27, 2026. At the Annual Meeting, the Company’s stockholders voted on the four proposals described below.
The final voting results, including the votes used to determine the results for each proposal under the applicable approval standard (as indicated by the borders), are set forth below.
1.The stockholders elected all twelve of the Company’s nominees for director to serve until their terms expire at the Company’s 2027 annual meeting of stockholders or until their successors are duly elected and qualified:
| FOR | AGAINST | ||||||||||||||||||||||
DIRECTOR: | Shares | % | Shares | % | ABSTAIN | BROKER NON-VOTE | |||||||||||||||||
| D. Scott Aakre | 456,720,375 | 98.4% | 7,418,587 | 1.6% | 461,795 | 38,006,231 | |||||||||||||||||
| Gary C. Bhojwani | 442,630,674 | 95.5% | 21,074,441 | 4.5% | 895,642 | 38,006,231 | |||||||||||||||||
| Jeffrey M. Ettinger | 461,446,910 | 99.4% | 2,738,018 | 0.6% | 415,829 | 38,006,231 | |||||||||||||||||
| John F. Ghingo | 455,882,228 | 98.3% | 8,079,702 | 1.7% | 638,827 | 38,006,231 | |||||||||||||||||
| Stephen M. Lacy | 451,841,285 | 97.4% | 12,070,532 | 2.6% | 688,940 | 38,006,231 | |||||||||||||||||
| Elsa A. Murano, Ph.D. | 453,439,884 | 97.8% | 10,450,083 | 2.3% | 710,790 | 38,006,231 | |||||||||||||||||
| William A. Newlands | 434,673,102 | 93.7% | 29,264,203 | 6.3% | 663,452 | 38,006,231 | |||||||||||||||||
| Christopher J. Policinski | 454,524,967 | 98.0% | 9,515,955 | 2.1% | 559,835 | 38,006,231 | |||||||||||||||||
| Debbra L. Schoneman | 454,739,518 | 98.0% | 9,132,870 | 2.0% | 728,369 | 38,006,231 | |||||||||||||||||
| Sally J. Smith | 453,952,497 | 97.8% | 10,136,792 | 2.2% | 511,468 | 38,006,231 | |||||||||||||||||
| Steven A. White | 452,562,878 | 97.6% | 11,351,423 | 2.5% | 686,456 | 38,006,231 | |||||||||||||||||
| Michael P. Zechmeister | 458,974,501 | 98.9% | 5,005,078 | 1.1% | 621,178 | 38,006,231 | |||||||||||||||||
2. The stockholders ratified the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the fiscal year ending October 25, 2026:
| FOR | Shares | 489,509,320 | ||||||
| % | 97.4 | % | ||||||
| AGAINST | Shares | 12,559,931 | ||||||
| % | 2.5 | % | ||||||
| ABSTAIN | Shares | 537,737 | ||||||
| % | 0.1 | % | ||||||
3. The stockholders approved, on an advisory basis, the compensation of the Company’s named executive officers:
| FOR | Shares | 439,276,932 | ||||||
| % | 94.6 | % | ||||||
| AGAINST | Shares | 24,227,832 | ||||||
| % | 5.2 | % | ||||||
| ABSTAIN | Shares | 1,095,993 | ||||||
| % | 0.2 | % | ||||||
| BROKER NON-VOTE | Shares | 38,006,231 | ||||||
4. The stockholders approved the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan:
| FOR | Shares | 404,954,106 | ||||||
| % | 87.2 | % | ||||||
| AGAINST | Shares | 58,599,558 | ||||||
| % | 12.6 | % | ||||||
| ABSTAIN | Shares | 1,047,093 | ||||||
| % | 0.2 | % | ||||||
| BROKER NON-VOTE | Shares | 38,006,231 | ||||||
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit Number | Description | ||||
| 10.1 | |||||
| 10.2 | |||||
| 10.3 | |||||
| 10.4 | |||||
| 10.5 | |||||
| 104 | The cover page from this Current Report on Form 8-K, formatted as Inline XBRL. | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| HORMEL FOODS CORPORATION | ||||||||
| Dated: February 2, 2026 | By: | /s/ Colleen Batcheler | ||||||
| Name: Colleen Batcheler | ||||||||
| Title: Senior Vice President, External Affairs, General Counsel & Corporate Secretary | ||||||||
Exhibit 10.1
HORMEL FOODS CORPORATION
2026 EQUITY AND INCENTIVE COMPENSATION PLAN
1.Purpose. The purpose of this Plan is to permit award grants to Participants and to provide to such persons incentives and rewards for service and/or performance.
2.Definitions. In addition to other terms defined elsewhere in this Plan, as used in this Plan:
(a)“Affiliate” means any entity that is a Subsidiary of the Company, or any other entity in which the Company owns, directly or indirectly, at least 20% of combined voting power of the entity’s Voting Securities and which is designated by the Committee as covered by the Plan.
(b)“Appreciation Right” means a right granted pursuant to Section 5 of this Plan.
(c)“Award Agreement” means an agreement, certificate, resolution or other type or form of writing or other evidence approved by the Committee that sets forth the terms and conditions of the awards granted under this Plan. An Award Agreement may be in an electronic medium, may be a notation on the books and records of the Company and, unless otherwise determined by the Committee, need not be signed by a representative of the Company or a Participant.
(d)“Base Price” means the price to be used as the basis for determining the Spread upon the exercise of an Appreciation Right.
(e)“Board” means the Board of Directors of the Company.
(f)“Cash Incentive Award” means a cash award granted pursuant to Section 8 of this Plan.
(g)“Change in Control” has the meaning set forth in Section 12(a) of this Plan.
(h)“Code” means the Internal Revenue Code of 1986, as amended, and the regulations thereunder, as such law and regulations may be amended from time to time.
(i)“Committee” means the Compensation Committee of the Board (or its successor), or any other committee of the Board designated by the Board to administer this Plan pursuant to Section 10 of this Plan.
(j)“Common Stock” means the common stock, par value $0.01465 per share, of the Company, or any security into which such common stock may be changed by reason of any transaction or event of the type referred to in Section 11 of this Plan.
(k)“Company” means Hormel Foods Corporation, a Delaware corporation, and its successors.
(l)“Continuing Director” means an individual (i) who is, as of the effective date of the Plan, a Director, or (ii) who becomes a Director after the effective date hereof and whose initial election, or nomination for election by the Company’s stockholders, was approved by at least three-quarters of the then Continuing Directors, but excluding, for purposes of this clause (ii), an individual whose initial assumption of office occurs as the result of an actual proxy contest involving the solicitation of proxies or consents by a person or Group other than the Board, or by reason of an agreement intended to avoid or settle an actual or threatened proxy contest.
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(m)“Corporate Transaction” means (i) a sale or other disposition of all or substantially all of the assets of the Company, or (ii) a merger, consolidation, share exchange or similar transaction involving the Company, regardless of whether the Company is the surviving corporation.
(n)“Date of Grant” means the date provided for by the Committee on which a grant of an award under this Plan will become effective (which date will not be earlier than the date on which the Committee takes action with respect thereto).
(o)“Director” means a member of the Board.
(p)“Effective Date” means the date this Plan is approved by the Stockholders.
(q)“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(r)“Exchange Act Person” means any natural person, entity or Group other than (i) the Company or any Affiliate; (ii) The Hormel Foundation; (iii) any employee benefit plan (or related trust) sponsored or maintained by the Company or any Affiliate; (iv) an underwriter temporarily holding securities in connection with a registered public offering of such securities; or (v) an entity whose Voting Securities are beneficially owned by the beneficial owners of the Company’s Voting Securities in substantially the same proportions as their beneficial ownership of the Company’s Voting Securities.
(s)“Group” means two or more persons who act, or agree to act together, as a partnership, limited partnership, syndicate or other group for the purpose of acquiring, holding, voting or disposing of securities of the Company.
(t)“Incentive Stock Option” means an Option Right that is intended to qualify as an “incentive stock option” under Section 422 of the Code or any successor provision.
(u)“Management Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Shares, Performance Units or Cash Incentive Awards or, when so determined by the Committee, Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, dividend equivalents or other awards pursuant to this Plan. The Management Objectives applicable to an award under this Plan (if any) shall be determined by the Committee (or an applicable delegate). If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Management Objectives unsuitable, the Committee may in its discretion modify such Management Objectives or the goals or actual levels of achievement regarding the Management Objectives, in whole or in part, as the Committee deems appropriate and equitable.
(v)“Market Value per Share” means, as of any particular date, the closing price for a share of the Common Stock as reported for that date on the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, on any other national securities exchange on which the Common Stock is listed, or if there are no sales on such date, on the next preceding trading day during which a sale occurred. If there is no regular public trading market for the Common Stock, then the Market Value per Share shall be the fair market value as determined in good faith by the Committee. The Committee is authorized to adopt another fair market value pricing method, provided such method is stated in the applicable Award Agreement, and is in compliance with the fair market value pricing rules set forth in Section 409A of the Code.
(w)“Optionee” means the optionee named in an Award Agreement evidencing an outstanding Option Right.
(x)“Option Price” means the purchase price payable upon the exercise of an Option Right.
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(y)“Option Right” means the right to purchase Common Stock upon exercise of an award granted pursuant to Section 4 of this Plan.
(z)“Participant” means a person who is selected by the Committee to receive benefits under this Plan and who is at the time (i) an officer or other employee of the Company or any Subsidiary, including a person who has agreed to commence serving in such capacity within 90 days of the Date of Grant, (ii) a person, including a consultant, who provides services to the Company or any Subsidiary that are equivalent to those typically provided by an employee (provided that such person satisfies the Form S-8 definition of an “employee”), or (iii) a non-employee Director.
(aa)“Performance Period” means, in respect of a Cash Incentive Award, Performance Share or Performance Unit, a period of time established pursuant to Section 8 of this Plan within which the Management Objectives relating to such Cash Incentive Award, Performance Share or Performance Unit are to be achieved.
(bb) “Performance Share” means a bookkeeping entry that records the equivalent of one share of Common Stock awarded pursuant to Section 8 of this Plan.
(cc) “Performance Unit” means a bookkeeping entry awarded pursuant to Section 8 of this Plan that records a unit equivalent to $1.00 or such other value as is determined by the Committee.
(dd) “Person” means any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act).
(ee) “Plan” means this Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan, as may be amended or amended and restated from time to time.
(ff) “Predecessor Plans” mean, collectively, the Hormel Foods Corporation 2018 Incentive Compensation Plan, the Hormel Foods Corporation 2009 Long-Term Incentive Plan, and the Hormel Foods Corporation 2009 Nonemployee Director Deferred Stock Plan, in each case including as amended or amended and restated from time to time.
(gg) “Restricted Stock” means Common Stock granted or sold pursuant to Section 6 of this Plan as to which neither the substantial risk of forfeiture nor the prohibition on transfers has expired.
(hh) “Restricted Stock Units” means an award pursuant to Section 7 of this Plan of the right to receive Common Stock, cash or any combination thereof at the end of a specified Restriction Period.
(ii) “Restriction Period” means the period of time during which Restricted Stock Units are subject to restrictions, as provided in Section 7 of this Plan.
(jj) “Spread” means the excess of the Market Value per Share on the date when an Appreciation Right is exercised over the Base Price provided with respect to the Appreciation Right.
(kk) “Stockholder” means an individual or entity that owns one or more shares of Common Stock.
(ll) “Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership or control interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, “Subsidiary” means any corporation in
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which the Company at the time owns or controls, directly or indirectly, more than 50% of the total combined voting power of the Voting Securities issued by such corporation.
(mm) “Voting Securities” means, at any time, the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company or members of the board of directors or similar body in the case of another entity.
3.Shares Available Under this Plan.
(a)Maximum Shares Available Under This Plan.
(i)Subject to adjustment as provided in Section 11 of this Plan and the share counting rules set forth in Section 3(b) of this Plan, the number of shares of Common Stock available under this Plan for awards of (A) Option Rights or Appreciation Rights, (B) Restricted Stock, (C) Restricted Stock Units, (D) Performance Shares or Performance Units, (E) awards contemplated by Section 9 of this Plan, or (F) dividend equivalents, will not exceed in the aggregate (x) 18,000,000 shares of Common Stock, plus (y) the total number of shares of Common Stock remaining available for future grant under the Hormel Foods Corporation 2018 Incentive Compensation Plan, as amended or amended and restated to date (the “2018 Plan”) as of the Effective Date, plus (z) the shares of Common Stock that are subject to awards granted under this Plan or the Predecessor Plans that are added (or added back, as applicable) to the aggregate number of shares of Common Stock available under this Section 3(a)(i) pursuant to the share counting rules of this Plan. Such shares may be shares of original issuance or treasury shares or a combination of the foregoing. On and after the Effective Date, no awards may be granted under the Predecessor Plans.
(ii)Subject to the share counting rules set forth in Section 3(b) of this Plan, the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan will be reduced by one share of Common Stock for every one share of Common Stock subject to an award granted under this Plan.
(b)Share Counting Rules.
(i)Except as provided in Section 22 of this Plan, if any award granted under this Plan (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement or unearned amount, again be available under Section 3(a)(i) above.
(ii)If, or after the Effective Date, any Common Stock subject to an award granted under the Predecessor Plans is forfeited, or an award granted under the Predecessor Plans (in whole or in part) is cancelled or forfeited, expires, is settled for cash, or is unearned, the Common Stock subject to such award will, to the extent of such cancellation, forfeiture, expiration, cash settlement or unearned amount, be available for awards under this Plan.
(iii)Notwithstanding anything to the contrary contained in this Plan: (A) Common Stock withheld by the Company, tendered or otherwise used in payment of the Option Price of an Option Right (or an option right granted under the Predecessor Plans) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (B) Common Stock withheld by the Company, tendered or otherwise used to satisfy tax withholding will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; (C) Common Stock subject to a stock-settled Appreciation Right (or appreciation right granted under the Predecessor Plans) that is not actually issued in connection with the settlement of such Appreciation Right (or appreciation right granted under the Predecessor Plans) on the exercise thereof will not be
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added back to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan; and (D) shares of Common Stock reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Option Rights (or option rights granted under the Predecessor Plans) will not be added (or added back, as applicable) to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan.
(iv)If, under this Plan, a Participant has elected to give up the right to receive compensation in exchange for Common Stock based on fair market value, such Common Stock will not count against the aggregate limit under Section 3(a)(i) of this Plan.
(c)Limit on Incentive Stock Options. Notwithstanding anything to the contrary contained in this Plan, and subject to adjustment as provided in Section 11 of this Plan, the aggregate number of shares of Common Stock actually issued or transferred by the Company upon the exercise of Incentive Stock Options will not exceed 18,000,000 shares of Common Stock.
(d)Non-Employee Director Compensation Limit. Notwithstanding anything to the contrary contained in this Plan, in no event will any non-employee Director in any one calendar year be granted compensation for such service having an aggregate maximum value (measured as of the Date of Grant as applicable, and calculating the value of any awards based on the grant date fair value for financial reporting purposes) in excess of $800,000.
4.Option Rights. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to Participants of Option Rights. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a)Each grant will specify the number of shares of Common Stock to which it pertains subject to the limitations set forth in Section 3 of this Plan.
(b)Each grant will specify an Option Price per share of Common Stock, which Option Price (except with respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant.
(c)Each grant will specify whether the Option Price will be payable (i) in cash, by check acceptable to the Company or by wire transfer of immediately available funds, (ii) by the actual or constructive transfer to the Company of Common Stock owned by the Optionee having a value at the time of exercise equal to the total Option Price, (iii) subject to any conditions or limitations established by the Committee, by the withholding of Common Stock otherwise issuable upon exercise of an Option Right pursuant to a “net exercise” arrangement (it being understood that, solely for purposes of determining the number of treasury shares held by the Company, the Common Stock so withheld will not be treated as issued and acquired by the Company upon such exercise), (iv) by a combination of such methods of payment, or (v) by such other methods as may be approved by the Committee.
(d)To the extent permitted by law, any grant may provide for deferred payment of the Option Price from the proceeds of sale through a bank or broker on a date satisfactory to the Company of some or all of the Common Stock to which such exercise relates.
(e)Each grant will specify the period or periods of continuous service by the Optionee with the Company or any Affiliate, if any, that is necessary before any Option Rights or installments thereof will vest. Option Rights may provide for continued vesting or the earlier vesting of such Option Rights, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
(f)Any grant of Option Rights may specify Management Objectives regarding the vesting of such rights.
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(g)Option Rights granted under this Plan may be (i) options, including Incentive Stock Options, that are intended to qualify under particular provisions of the Code, (ii) options that are not intended to so qualify, or (iii) combinations of the foregoing. Incentive Stock Options may only be granted to Participants who meet the definition of “employees” under Section 3401(c) of the Code.
(h)No Option Right will be exercisable more than 10 years from the Date of Grant. The Committee may provide in any Award Agreement for the automatic exercise of an Option Right upon such terms and conditions as established by the Committee.
(i)Option Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(j)Each grant of Option Rights will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
5.Appreciation Rights.
(a)The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting to any Participant of Appreciation Rights. An Appreciation Right will be the right of the Participant to receive from the Company an amount determined by the Committee, which will be expressed as a percentage of the Spread (not exceeding 100%) at the time of exercise.
(b)Each grant of Appreciation Rights may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(i)Each grant may specify that the amount payable on exercise of an Appreciation Right will be paid by the Company in cash, in Common Stock or any combination thereof.
(ii)Each grant will specify the period or periods of continuous service by the Participant with the Company or any Subsidiary, if any, that is necessary before the Appreciation Rights or installments thereof will vest. Appreciation Rights may provide for continued vesting or the earlier vesting of such Appreciation Rights, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
(iii)Any grant of Appreciation Rights may specify Management Objectives regarding the vesting of such Appreciation Rights.
(iv)Appreciation Rights granted under this Plan may not provide for any dividends or dividend equivalents thereon.
(v)Each grant of Appreciation Rights will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
(vi)No Appreciation Right granted under this Plan may be exercised more than 10 years from the Date of Grant.
(c)Also, regarding Appreciation Rights, (i) each grant will specify in respect of each Appreciation Right a Base Price, which (except with respect to awards under Section 22 of this Plan) may not be less than the Market Value per Share on the Date of Grant, and (ii) the Committee may provide in any Award Agreement for the automatic exercise of an Appreciation Right upon such terms and conditions as established by the Committee.
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6.Restricted Stock. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the grant or sale of Restricted Stock to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a)Each such grant or sale will constitute an immediate transfer of the ownership of Common Stock to the Participant in consideration of the performance of services, entitling such Participant to voting, dividend and other ownership rights (subject in particular to Section 6(g) of this Plan), but subject to the substantial risk of forfeiture and restrictions on transfer hereinafter described.
(b)Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c)Each such grant or sale will provide that the Restricted Stock covered by such grant or sale will be subject to a “substantial risk of forfeiture” within the meaning of Section 83 of the Code for a period to be determined by the Committee on the Date of Grant and/or until achievement of Management Objectives referred to in Section 6(e) of this Plan.
(d)Each such grant or sale will provide that during or after the period for which such substantial risk of forfeiture is to continue, the transferability of the Restricted Stock will be prohibited or restricted in the manner and to the extent prescribed by the Committee on the Date of Grant (which restrictions may include rights of repurchase or first refusal of the Company or provisions subjecting the Restricted Stock to a continuing substantial risk of forfeiture while held by any transferee).
(e)Any grant of Restricted Stock may specify Management Objectives regarding the vesting of such Restricted Stock.
(f)Restricted Stock may provide for continued vesting or the earlier vesting of such Restricted Stock, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
(g)Any such grant or sale of Restricted Stock may require that any and all dividends or other distributions paid thereon during the period of such restrictions be automatically deferred and/or reinvested in additional shares of Restricted Stock, which will be subject to the same restrictions as the underlying award. For the avoidance of doubt, any dividends or other distributions on Restricted Stock will be deferred until, and paid contingent upon, the vesting of such Restricted Stock.
(h)Each grant or sale of Restricted Stock will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve. Unless otherwise directed by the Committee, (i) all certificates representing shares of Restricted Stock will be held in custody by the Company until all restrictions thereon will have lapsed, together with a stock power or powers executed by the Participant in whose name such certificates are registered, endorsed in blank and covering such shares, or (ii) all shares of Restricted Stock will be held at the Company’s transfer agent in book entry form with appropriate restrictions relating to the transfer of such shares of Restricted Stock.
7.Restricted Stock Units. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting or sale of Restricted Stock Units to Participants. Each such grant or sale may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a)Each such grant or sale will constitute the agreement by the Company to deliver Common Stock or cash, or a combination thereof, to the Participant in the future in consideration of the performance of services, but subject to the fulfillment of such conditions (which may include achievement regarding Management Objectives) during the Restriction Period as the Committee may specify.
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(b)Each such grant or sale may be made without additional consideration or in consideration of a payment by such Participant that is less than the Market Value per Share on the Date of Grant.
(c)Restricted Stock Units may provide for continued vesting or the earlier lapse or other modification of the Restriction Period, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
(d)During the Restriction Period, the Participant will have no right to transfer any rights under his or her award and will have no rights of ownership in the Common Stock deliverable upon payment of the Restricted Stock Units and will have no right to vote it, but the Committee may, at or after the Date of Grant, authorize the payment of dividend equivalents on such Restricted Stock Units on a deferred and contingent basis, either in cash or in additional Common Stock; provided, however, that dividend equivalents or other distributions on Common Stock underlying Restricted Stock Units will be deferred until, and paid contingent upon, the vesting of such Restricted Stock Units.
(e)Each grant or sale of Restricted Stock Units will specify the time and manner of payment of the Restricted Stock Units that have been earned. Each grant or sale will specify that the amount payable with respect thereto will be paid by the Company in Common Stock or cash, or a combination thereof.
(f)Each grant or sale of Restricted Stock Units will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
8.Performance Shares, Performance Units and Cash Incentive Awards. The Committee may, from time to time and upon such terms and conditions as it may determine, authorize the granting of Cash Incentive Awards, Performance Shares and Performance Units. Each such grant may utilize any or all of the authorizations, and will be subject to all of the requirements, contained in the following provisions:
(a)Each grant will specify the number or amount of Performance Shares or Performance Units, or amount payable with respect to a Cash Incentive Award, to which it pertains, which number or amount may be subject to adjustment to reflect changes in compensation or other factors.
(b)The Performance Period with respect to each grant of Performance Shares or Performance Units or Cash Incentive Award will be such period of time as will be determined by the Committee, which may be subject to continued vesting or earlier lapse or other modification, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
(c)Each grant of Performance Shares, Performance Units or a Cash Incentive Award will specify Management Objectives regarding the earning of the award.
(d)Each grant will specify the time and manner of payment of Performance Shares, Performance Units, or a Cash Incentive Award that have been earned.
(e)The Committee may, on the Date of Grant of Performance Shares or Performance Units, provide for the payment of dividend equivalents to the holder thereof either in cash or in additional Common Stock, which dividend equivalents will be subject to deferral and payment on a contingent basis based on the Participant’s earning and vesting of the Performance Shares or Performance Units, as applicable, with respect to which such dividend equivalents are paid.
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(f)Each grant of Performance Shares, Performance Units or a Cash Incentive Award will be evidenced by an Award Agreement. Each Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve.
9.Other Awards.
(a)Subject to applicable law and any applicable limits set forth in Section 3 of this Plan, the Committee may authorize the grant to any Participant of Common Stock or such other awards that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on, or related to, Common Stock or factors that may influence the value of such shares, including, without limitation, convertible or exchangeable debt securities, other rights convertible or exchangeable into Common Stock, purchase rights for Common Stock, awards with value and payment contingent upon performance of the Company or specified Subsidiaries, affiliates or other business units thereof or any other factors designated by the Committee, and awards valued by reference to the book value of Common Stock or the value of securities of, or the performance of specified Subsidiaries or affiliates or other business units of the Company. The Committee will determine the terms and conditions of such awards. Common Stock delivered pursuant to an award in the nature of a purchase right granted under this Section 9 will be purchased for such consideration, paid for at such time, by such methods, and in such forms, including, without limitation, cash, Common Stock, other awards, notes or other property, as the Committee determines.
(b)Cash awards, as an element of or supplement to any other award granted under this Plan, may also be granted pursuant to this Section 9.
(c)The Committee may authorize the grant of Common Stock as a bonus, or may authorize the grant of other awards in lieu of obligations of the Company or a Subsidiary to pay cash or deliver other property under this Plan or under other plans or compensatory arrangements, subject to such terms as will be determined by the Committee in a manner that complies with Section 409A of the Code.
(d)The Committee may, at or after the Date of Grant, authorize the payment of dividends or dividend equivalents on awards granted under this Section 9 on a deferred and contingent basis, either in cash or in additional Common Stock; provided, however, that dividend equivalents or other distributions on Common Stock underlying awards granted under this Section 9 will be deferred until, and paid contingent upon, the earning and vesting of such awards.
(e)Each grant of an award under this Section 9 will be evidenced by an Award Agreement. Each such Award Agreement will be subject to this Plan and will contain such terms and provisions, consistent with this Plan, as the Committee may approve, and will specify the time and terms of delivery of the applicable award.
(f)Awards under this Section 9 may provide for the earning or vesting of, or earlier elimination of restrictions applicable to, such award, including, without limitation, in connection with or following a Participant’s retirement, death, disability, or termination of employment or service or (subject to Section 12 of this Plan) in the event of a Change in Control.
10.Administration of this Plan.
(a)This Plan will be administered by the Committee; provided, however, that, notwithstanding anything in this Plan to the contrary, the Board, may grant awards under this Plan to non-employee Directors and administer this Plan with respect to such awards, plus otherwise administer this Plan, including with respect to any responsibilities and duties held by the Committee hereunder. The Committee may from time to time delegate all or any part of its authority under this Plan to a subcommittee thereof. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such subcommittee. For purposes of clarity, the Committee’s authority to make grants under this Plan and administer this Plan will include the authority to adopt subplans or special provisions applicable to awards granted under this Plan; provided, however, that any such subplan or special provision shall be consistent with the terms of this Plan, except as otherwise provided in Section 14 hereof.
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(b)The interpretation and construction by the Committee of any provision of this Plan or of any Award Agreement (or related documents) and any determination by the Committee pursuant to any provision of this Plan or of any such agreement, notification or document will be final and conclusive. No member of the Committee shall be liable for any such action or determination made in good faith. In addition, the Committee is authorized to take any action it determines in its sole discretion to be appropriate subject only to the express limitations contained in this Plan, and no authorization in any Plan section or other provision of this Plan is intended or may be deemed to constitute a limitation on the authority of the Committee.
(c)To the extent permitted by law, the Committee may delegate to one or more of its members, to one or more officers of the Company, or to one or more agents or advisors, such administrative duties or powers as it may deem advisable, and the Committee, the subcommittee, or any person to whom duties or powers have been delegated as aforesaid, may employ one or more persons to render advice with respect to any responsibility the Committee, the subcommittee or such person may have under this Plan. To the extent permitted by law, and in compliance with any applicable legal requirements, the Committee may, by resolution, authorize one or more officers of the Company to authorize the granting or sale of awards under this Plan on the same basis as the Committee; provided, however, that: (i) the Committee will not delegate such authority to any such officer for awards granted to such officer or any employee who is an officer (for purposes of Section 16 of the Exchange Act), Director, or more than 10% “beneficial owner” (as such term is defined in Rule 13d-3 promulgated under the Exchange Act) of any class of the Company’s equity securities that is registered pursuant to Section 12 of the Exchange Act, as determined in accordance with Section 16 of the Exchange Act; (ii) the resolutions providing for such authorization shall set forth the total number of shares of Common Stock such officer may grant; and (iii) such officer will report periodically to the Committee regarding the nature and scope of the awards granted pursuant to the authority delegated. To the extent of any such delegation, references in this Plan to the Committee will be deemed to be references to such delegate.
11.Adjustments. The Committee shall make or provide for such adjustments in the number of shares of and kind of Common Stock covered by outstanding Option Rights, Appreciation Rights, Restricted Stock, Restricted Stock Units, Performance Shares and Performance Units granted hereunder and, if applicable, in the number of shares of and kind of Common Stock covered by other awards granted pursuant to Section 9 hereof, in the Option Price and Base Price provided in outstanding Option Rights and Appreciation Rights, respectively, in Cash Incentive Awards, and in other award terms, as the Committee, in its sole discretion, exercised in good faith, determines is equitably required to prevent dilution or enlargement of the rights of Participants that otherwise would result from (a) any extraordinary cash dividend, stock dividend, stock split, combination of shares, recapitalization or other change in the capital structure of the Company, (b) any merger, consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial or complete liquidation or other distribution of assets, issuance of rights or warrants to purchase securities, or (c) any other corporate transaction or event having an effect similar to any of the foregoing. Moreover, in the event of any such transaction or event or (subject to Section 12 of this Plan) in the event of a Change in Control, the Committee may provide in substitution for any or all outstanding awards under this Plan such alternative consideration (including cash), if any, as it, in good faith, may determine to be equitable in the circumstances and shall require in connection therewith the surrender of all awards so replaced in a manner that complies with Section 409A of the Code. In addition, for each Option Right or Appreciation Right with an Option Price or Base Price, respectively, greater than the consideration offered in connection with any such transaction or event or Change in Control, the Committee may in its discretion elect to cancel such Option Right or Appreciation Right without any payment to the Person holding such Option Right or Appreciation Right. The Committee shall also make or provide for such adjustments in the numbers of shares of Common Stock specified in Section 3 of this Plan as the Committee in its sole discretion, exercised in good faith, determines is appropriate to reflect any transaction or event described in this Section 11; provided, however, that any such adjustment to the number specified in Section 3(c) of this Plan will be made only if and to the extent that such adjustment would not cause any Option Right intended to qualify as an Incentive Stock Option to fail to so qualify.
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12.Change in Control.
(a)Definition. For purposes of this Plan, except as may be otherwise prescribed by the Committee in an Award Agreement made under this Plan, a “Change in Control” will be deemed to have occurred upon the occurrence (after the Effective Date) of any of the following events:
(i) An Exchange Act Person becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding Voting Securities, except that the following will not constitute a Change in Control:
(A)any acquisition of securities of the Company by an Exchange Act Person from the Company for the purpose of providing financing to the Company;
(B)any formation of a Group consisting solely of beneficial owners of the Company’s Voting Securities as of the effective date of this Plan;
(C)any repurchase or other acquisition by the Company of its Voting Securities that causes any Exchange Act Person to become the beneficial owner of 20% or more of the Company’s Voting Securities; or
(D)with respect to any particular Participant, any acquisition of securities of the Company by the Participant, any Group including the Participant, or any entity controlled by the Participant or a Group including the Participant.
If, however, an Exchange Act Person or Group referenced in clause (A), (B) or (C) above acquires beneficial ownership of additional Company Voting Securities after initially becoming the beneficial owner of 20% or more of the combined voting power of the Company’s Voting Securities by one of the means described in those clauses, then a Change in Control will be deemed to have occurred. Furthermore, a Change in Control will occur if a Person becomes the beneficial owner of more than 50% of the Company’s Voting Securities as the result of a Corporate Transaction only if the Corporate Transaction is itself a Change in Control pursuant to subsection 12(a)(iii);
(ii)Individuals who are Continuing Directors cease for any reason to constitute a majority of the members of the Board; or
(iii)A Corporate Transaction is consummated, unless, immediately following such Corporate Transaction, all or substantially all of the individuals and entities who were the beneficial owners of the Company’s Voting Securities immediately prior to such Corporate Transaction beneficially own, directly or indirectly, more than 50% of the combined voting power of the then outstanding Voting Securities of the surviving or acquiring entity resulting from such Corporate Transaction (including beneficial ownership through any Parent of such entity) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Company’s Voting Securities. Notwithstanding the foregoing, to the extent that any award constitutes a deferral of compensation subject to Section 409A of the Code, and if that award provides for a change in the time or form of payment upon a Change in Control, then no Change in Control shall be deemed to have occurred upon an event described in this Section 12(a)(iii) unless the event would also constitute a change in ownership or effective control of, or a change in the ownership of a substantial portion of the assets of, the Company under Section 409A of the Code.
(b)Treatment of Awards Upon Corporate Transaction. Unless otherwise provided in an applicable Award Agreement or another written agreement between the Participant and the Company, the following provisions shall apply to each Participant’s outstanding awards in the event of a Change in Control that constitutes a Corporate Transaction:
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(i)Continuation, Assumption or Replacement of Awards. In the event of a Corporate Transaction, the surviving or successor entity (or its parent) may continue, assume or replace awards outstanding as of the date of the Corporate Transaction (with such adjustments as may be required or permitted by Section 11), and such awards or replacements therefor shall remain outstanding and be governed by their respective terms, subject to Section 12(b)(iv) below. A surviving or successor entity (or its parent) may elect to continue, assume or replace only some awards or portions of awards.
(ii)Acceleration. If and to the extent that outstanding awards under this Plan are not continued, assumed or replaced in connection with a Corporate Transaction, then (A) all outstanding Option Rights and Appreciation Rights shall become fully vested and exercisable for such period of time prior to the effective time of the Corporate Transaction as is deemed fair and equitable by the Committee, and shall terminate at the effective time of the Corporate Transaction, (B) all other outstanding awards shall fully vest immediately prior to the effective time of the Corporate Transaction, and (C) to the extent vesting of any award is subject to satisfaction of specified performance goals, such award shall be deemed vested and earned for purposes of this Section 12(b)(ii) at the target level of performance and the vested portion of the award at that level of performance will be proportionate to the portion of the performance period that has elapsed as of the effective time of the Corporate Transaction. The exercise of any Option Right or Appreciation Right whose exercisability is accelerated as provided in this Section 12(b)(ii) shall be conditioned upon the consummation of the Corporate Transaction and shall be effective only immediately before such consummation.
(iii)Payment for Awards. If and to the extent that outstanding awards under this Plan are not continued, assumed or replaced in connection with a Corporate Transaction, then the Committee may provide that some or all of such outstanding Awards shall be canceled at or immediately prior to the effective time of the Corporate Transaction in exchange for payments to the holders as provided in this Section 12(b)(iii). The Committee will not be required to treat all awards similarly for purposes of this Section 12(b)(iii). The payment for any award so canceled shall be in an amount equal to the difference, if any, between (A) the fair market value (as determined in good faith by the Committee) of the consideration that would otherwise be received in the Corporate Transaction for the number of shares of Common Stock subject to the award, and (B) the aggregate exercise price (if any) for the shares of Common Stock subject to such award. If the amount determined pursuant to the preceding sentence is not a positive number with respect to any award, such award may be canceled pursuant to this Section 12(b)(iii) without payment of any kind to the affected Participant. With respect to an award whose vesting is subject to the satisfaction of specified performance goals, the number of shares of Common Stock subject to such an award for purposes of this Section 12(b)(iii) shall be the number of shares of Common Stock as to which the award would have been deemed “fully vested” for purposes of Section 12(b)(ii). Payment of any amount under this Section 12(b)(iii) shall be made in such form, on such terms and subject to such conditions as the Committee determines in its discretion, which may or may not be the same as the form, terms and conditions applicable to payments to the Company’s stockholders in connection with the Corporate Transaction, and may, in the Committee’s discretion, include subjecting such payments to vesting conditions comparable to those of the award canceled, subjecting such payments to escrow or holdback terms comparable to those imposed upon the Company’s stockholders under the Corporate Transaction, or calculating and paying the present value of payments that would otherwise be subject to escrow or holdback terms.
(iv)Termination After a Corporate Transaction. If and to the extent that awards are continued, assumed or replaced under the circumstances described in Section 12(b)(i), and if within 24 months after the Corporate Transaction a Participant experiences an involuntary termination of service for reasons other than “cause” (as defined in the applicable Award Agreement) then (A) outstanding Option Rights and Appreciation Rights (or replacements thereof) issued to the Participant that are not yet
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fully exercisable shall immediately become exercisable in full and shall remain exercisable for one year following the Participant’s termination of service, and (B) any full-value or other awards that are not yet fully vested shall immediately vest in full (with vesting in full for a performance-based award determined as provided in Section 12(b)(ii), except that the proportionate vesting amount will be determined with respect to the portion of the performance period during which the Participant provided service to the Company).
(c)Other Change in Control; Dissolution or Liquidation. In the event of a Change in Control that does not constitute a Corporate Transaction, the Committee may, in its discretion, take such action as it deems appropriate with respect to outstanding Plan awards, which may include: (i) providing for the cancellation of any such award in exchange for payments in a manner similar to that provided in Section 12(b)(iii) or (ii) making such adjustments to any such awards then outstanding as the Committee deems appropriate to reflect such Change in Control, which may include the acceleration or continuation of vesting in full or in part. The Committee will not be required to treat all such awards similarly in such circumstances, and may include such further provisions and limitations in any Award Agreement as it may deem equitable and in the best interests of the Company. Additionally, unless otherwise provided in an applicable Award Agreement, in the event of a proposed dissolution or liquidation of the Company, the Committee will notify each Participant as soon as practicable prior to the effective date of such proposed transaction, and an applicable award will terminate immediately prior to the consummation of such proposed transaction.
13.Clawback; Detrimental Activity and Recapture Provisions.
(a)Awards granted under this Plan are subject to the terms and conditions of the Company’s clawback provisions, policy or policies (if any) as may be in effect from time to time, including, without limitation, specifically to implement Section 10D of the Exchange Act, and any applicable rules or regulations promulgated thereunder (including applicable rules and regulations of any national securities exchange on which the Common Stock at any point may be traded) (the “Compensation Recovery Policy”), and applicable sections of any Award Agreement to which this Plan is applicable or any related documents shall be interpreted consistently with (or deemed superseded by and/or subject to, as applicable) the terms and conditions of the Compensation Recovery Policy. Further, by accepting any award under this Plan, each Participant agrees (or has agreed) to fully cooperate with and assist the Company in connection with any of such Participant’s obligations to the Company pursuant to the Compensation Recovery Policy, and agrees (or has agreed) that the Company may enforce its rights under the Compensation Recovery Policy through any and all reasonable means permitted under applicable law as it deems necessary or desirable under the Compensation Recovery Policy, in each case from and after the effective dates thereof. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from such Participant of any such amounts, including from such Participants’ accounts or from any other compensation, to the extent permissible under Section 409A of the Code.
(b)Otherwise, any Award Agreement (or any part thereof) may provide for the cancellation or forfeiture of an award or the forfeiture and repayment to the Company of any gain or earnings related to an award (or other provisions intended to have similar effects), including upon such terms and conditions as may be determined by the Board or the Committee in accordance with the Compensation Recovery Policy or any applicable laws, rules, regulations or requirements that impose mandatory clawback or recoupment requirements under the circumstances set forth in such laws, rules, regulations or requirements in effect from time to time (including as may operate to create additional rights for the Company with respect to such awards and the recovery of amounts or benefits relating thereto).
14.Non-U.S. Participants. In order to facilitate the making of any grant or combination of grants under this Plan, the Committee may provide for such special terms for awards to Participants who are foreign nationals or who are employed by the Company or any Subsidiary outside of the United States of America or who provide services to the Company or any Subsidiary under an agreement with a foreign nation or agency, as the Committee may consider necessary or appropriate to accommodate differences in
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local law, tax policy or custom. Moreover, the Committee may approve such supplements to or amendments, restatements or alternative versions of this Plan (including sub-plans) (to be considered part of this Plan) as it may consider necessary or appropriate for such purposes, without thereby affecting the terms of this Plan as in effect for any other purpose, and the secretary or other appropriate officer of the Company may certify any such document as having been approved and adopted in the same manner as this Plan. No such special terms, supplements, amendments or restatements, however, will include any provisions that are inconsistent with the terms of this Plan as then in effect unless this Plan could have been amended to eliminate such inconsistency without further approval by the Stockholders.
15.Transferability.
(a)Except as otherwise determined by the Committee, and subject to compliance with Section 17 of this Plan and Section 409A of the Code, no Option Right, Appreciation Right, Restricted Stock, Restricted Stock Unit, Performance Share, Performance Unit, Cash Incentive Award, award contemplated by Section 9 of this Plan or dividend equivalents paid with respect to awards made under this Plan will be transferable by the Participant except by will or the laws of descent and distribution. In no event will any such award granted under this Plan be transferred for value. Where transfer is permitted, references to “Participant” shall be construed, as the Committee deems appropriate, to include any permitted transferee to whom such award is transferred. Except as otherwise determined by the Committee, Option Rights and Appreciation Rights will be exercisable during the Participant’s lifetime only by him or her or, in the event of the Participant’s legal incapacity to do so, by his or her guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law or court supervision.
(b)The Committee may specify on the Date of Grant that part or all of the Common Stock that is (i) to be issued or transferred by the Company upon the exercise of Option Rights or Appreciation Rights, upon the termination of the Restriction Period applicable to Restricted Stock Units or upon payment under any grant of Performance Shares or Performance Units or (ii) no longer subject to the substantial risk of forfeiture and restrictions on transfer referred to in Section 7 of this Plan, will be subject to further restrictions on transfer, including minimum holding periods.
16.Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes or other amounts in connection with any payment made or benefit realized by a Participant or other Person under this Plan, and the amounts available to the Company for such withholding are insufficient, it will be a condition to the receipt of such payment or the realization of such benefit that the Participant or such other Person make arrangements satisfactory to the Company for payment of the balance of such taxes or other amounts required to be withheld, which arrangements (in the discretion of the Committee) may include relinquishment of a portion of such benefit. If a Participant’s benefit is to be received in the form of Common Stock, and such Participant fails to make arrangements for the payment of taxes or other amounts, then, unless otherwise determined by the Committee, the Company will withhold Common Stock having a value equal to the amount required to be withheld. Notwithstanding the foregoing, when a Participant is required to pay the Company an amount required to be withheld under applicable income, employment, tax and other laws, the Committee may require the Participant to satisfy the obligation, in whole or in part, by having withheld, from the Common Stock delivered or required to be delivered to the Participant, Common Stock having a value equal to the amount required to be withheld or by delivering to the Company other shares of Common Stock held by such Participant. The Common Stock used for tax or other withholding will be valued at an amount equal to the fair market value of such Common Stock on the date the benefit is to be included in Participant’s income. In no event will the fair market value of the Common Stock to be withheld and delivered pursuant to this Section 16 exceed the minimum amount required to be withheld, unless (a) an additional amount can be withheld and not result in adverse accounting consequences, and (b) such additional withholding amount is authorized by the Committee. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Common Stock acquired upon the exercise of Option Rights. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes required to be withheld under applicable income, employment, tax or other laws in connection with any payment made or benefit realized by a Participant under this Plan, and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes.
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17.Compliance with Section 409A of the Code.
(a)To the extent applicable, it is intended that this Plan and any grants made hereunder comply with the provisions of Section 409A of the Code, so that the income inclusion provisions of Section 409A(a)(1) of the Code do not apply to the Participants. This Plan and any grants made hereunder will be administered in a manner consistent with this intent. Any reference in this Plan to Section 409A of the Code will also include any regulations or any other formal guidance promulgated with respect to such section by the U.S. Department of the Treasury or the Internal Revenue Service.
(b)Neither a Participant nor any of a Participant’s creditors or beneficiaries will have the right to subject any deferred compensation (within the meaning of Section 409A of the Code) payable under this Plan and grants hereunder to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. Except as permitted under Section 409A of the Code, any deferred compensation (within the meaning of Section 409A of the Code) payable to a Participant or for a Participant’s benefit under this Plan and grants hereunder may not be reduced by, or offset against, any amount owed by a Participant to the Company or any of its Subsidiaries.
(c)If, at the time of a Participant’s separation from service (within the meaning of Section 409A of the Code), (i) the Participant will be a specified employee (within the meaning of Section 409A of the Code and using the identification methodology selected by the Company from time to time) and (ii) the Company makes a good faith determination that an amount payable hereunder constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Company will not pay such amount on the otherwise scheduled payment date but will instead pay it, without interest, on the fifth business day of the seventh month after such separation from service.
(d)Solely with respect to any award that constitutes nonqualified deferred compensation subject to Section 409A of the Code and that is payable on account of a Change in Control (including any installments or stream of payments that are accelerated on account of a Change in Control), a Change in Control shall occur only if such event also constitutes a “change in the ownership,” “change in effective control,” and/or a “change in the ownership of a substantial portion of assets” of the Company as those terms are defined under Treasury Regulation §1.409A-3(i)(5), but only to the extent necessary to establish a time and form of payment that complies with Section 409A of the Code, without altering the definition of Change in Control for any purpose in respect of such award.
(e)Notwithstanding any provision of this Plan and grants hereunder to the contrary, in light of the uncertainty with respect to the proper application of Section 409A of the Code, the Company reserves the right to make amendments to this Plan and grants hereunder as the Company deems necessary or desirable to avoid the imposition of taxes or penalties under Section 409A of the Code. In any case, a Participant will be solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on a Participant or for a Participant’s account in connection with this Plan and grants hereunder (including any taxes and penalties under Section 409A of the Code), and neither the Company nor any of its affiliates will have any obligation to indemnify or otherwise hold a Participant harmless from any or all of such taxes or penalties.
18.Amendments.
(a)The Board may at any time and from time to time amend this Plan in whole or in part; provided, however, that if an amendment to this Plan, for purposes of applicable stock exchange rules and except as permitted under Section 11 of this Plan, (i) would materially increase the benefits accruing to Participants under this Plan, (ii) would materially increase the number of securities which may be issued under this Plan, (iii) would materially modify the requirements for participation in this Plan, or (iv) must otherwise be approved by the Stockholders in order to comply with applicable law or the rules of the New York Stock Exchange or, if the Common Stock is not traded on the New York Stock Exchange, the principal national securities exchange upon which the Common Stock is traded or quoted, all as determined by the Board, then, such amendment will be subject to Stockholder approval and will not be effective unless and until such approval has been obtained.
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(b)Except in connection with a corporate transaction or event described in Section 11 of this Plan or (subject to Section 12 of this Plan) in connection with a Change in Control, the terms of outstanding awards may not be amended to reduce the Option Price of outstanding Option Rights or the Base Price of outstanding Appreciation Rights, or cancel outstanding “underwater” Option Rights or Appreciation Rights (including following a Participant’s voluntary surrender of “underwater” Option Rights or Appreciation Rights) in exchange for cash, other awards or Option Rights or Appreciation Rights with an Option Price or Base Price, as applicable, that is less than the Option Price of the original Option Rights or Base Price of the original Appreciation Rights, as applicable, without Stockholder approval. This Section 18(b) is intended to prohibit the repricing of “underwater” Option Rights and Appreciation Rights and will not be construed to prohibit the adjustments provided for in Section 11 of this Plan. Notwithstanding any provision of this Plan to the contrary, this Section 18(b) may not be amended without approval by the Stockholders.
(c)If permitted by Section 409A of the Code, but subject to Section 18(d) of this Plan, including in the case of termination of employment or service, or in the case of unforeseeable emergency or other circumstances, or (subject to Section 12 of this Plan) in the event of a Change in Control, to the extent a Participant holds an Option Right or Appreciation Right not immediately exercisable in full, or any Restricted Stock as to which the substantial risk of forfeiture or the prohibition or restriction on transfer has not lapsed, or any Restricted Stock Units as to which the Restriction Period has not been completed, or any Cash Incentive Awards, Performance Shares or Performance Units which have not been fully earned, or any dividend equivalents or other awards made pursuant to Section 9 subject to any vesting schedule or transfer restriction, or holds Common Stock subject to any transfer restriction imposed pursuant to Section 15(b) of this Plan, the Committee may, in its sole discretion, provide for continued vesting or accelerate the time at which such Option Right, Appreciation Right or other award may vest or be exercised or the time at which such substantial risk of forfeiture or prohibition or restriction on transfer will lapse or the time when such Restriction Period will end or the time at which such Performance Shares, Performance Units or Cash Incentive Awards will be deemed to have been earned or the time when such transfer restriction will terminate or may waive any other limitation or requirement under any such award.
(d)Subject to Section 18(b) of this Plan, the Committee may amend the terms of any award theretofore granted under this Plan prospectively or retroactively. Except for adjustments made pursuant to Section 11 of this Plan, no such amendment will materially impair the rights of any Participant without his or her consent. The Board may, in its discretion, terminate this Plan at any time. Termination of this Plan will not affect the rights of Participants or their successors under any awards outstanding hereunder and not exercised in full on the date of termination.
19.Governing Law. This Plan and all grants and awards and actions taken hereunder will be governed by and construed in accordance with the internal substantive laws of the State of Delaware.
20.Effective Date/Termination. This Plan will be effective as of the Effective Date. No grants will be made on or after the Effective Date under the Predecessor Plans, provided that outstanding awards granted under the Predecessor Plans will continue unaffected following the Effective Date. No grant will be made under this Plan on or after the tenth anniversary of the Effective Date, but all grants made prior to such date will continue in effect thereafter subject to the terms thereof and of this Plan. For clarification purposes, the terms and conditions of this Plan shall not apply to or otherwise impact previously granted and outstanding awards under the Predecessor Plans, as applicable (except for purposes of providing for Common Stock under such awards to be added to the aggregate number of shares of Common Stock available under Section 3(a)(i) of this Plan pursuant to the share counting rules of this Plan).
21.Miscellaneous Provisions.
(a)The Company will not be required to issue any fractional Common Stock pursuant to this Plan. The Committee may provide for the elimination of fractions or for the settlement of fractions in cash.
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(b)This Plan will not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor will it interfere in any way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time.
(c)Except with respect to Section 21(e) of this Plan, to the extent that any provision of this Plan would prevent any Option Right that was intended to qualify as an Incentive Stock Option from qualifying as such, that provision will be null and void with respect to such Option Right. Such provision, however, will remain in effect for other Option Rights and there will be no further effect on any provision of this Plan.
(d)No award under this Plan may be exercised by the holder thereof if such exercise, and the receipt of cash or stock thereunder, would be, in the opinion of counsel selected by the Company, contrary to law or the regulations of any duly constituted authority having jurisdiction over this Plan.
(e)Absence on leave approved by a duly constituted officer of the Company or any of its Subsidiaries will not be considered interruption or termination of service of any employee for any purposes of this Plan or awards granted hereunder.
(f)No Participant will have any rights as a Stockholder with respect to any Common Stock subject to awards granted to him or her under this Plan prior to the date as of which he or she is actually recorded as the holder of such Common Stock upon the stock records of the Company.
(g)The Committee may condition the grant of any award or combination of awards authorized under this Plan on the surrender or deferral by the Participant of his or her right to receive a cash bonus or other compensation otherwise payable by the Company or a Subsidiary to the Participant.
(h)Except with respect to Option Rights and Appreciation Rights, the Committee may permit Participants to elect to defer the issuance of Common Stock under this Plan pursuant to such rules, procedures or programs as it may establish for purposes of this Plan and which are intended to comply with the requirements of Section 409A of the Code. The Committee also may provide that deferred issuances and settlements include the crediting of dividend equivalents or interest on the deferral amounts.
(i)If any provision of this Plan is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify this Plan or any award under any law deemed applicable by the Committee, such provision will be construed or deemed amended or limited in scope to conform to applicable laws or, in the discretion of the Committee, it will be stricken and the remainder of this Plan will remain in full force and effect. Notwithstanding anything to the contrary in this Plan or an Award Agreement (or in any other agreement, contract or arrangement with the Company or its Subsidiaries or affiliates, or in any policy, procedure or practice of the Company or its Subsidiaries or affiliates (collectively, the “Arrangements”)): (i) nothing in the Arrangements or otherwise limits a Participant’s rights to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act or the Sarbanes-Oxley Act of 2002); and (ii) nothing in the Arrangements or otherwise prevents a Participant from, without prior notice to the Company, providing information (including documents) to governmental authorities or agencies regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities or agencies regarding possible legal violations (for purpose of clarification, such Participant is not prohibited from providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act). The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
22.Stock-Based Awards in Substitution for Awards Granted by Another Company. Notwithstanding anything in this Plan to the contrary:
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(a)Awards may be granted under this Plan in substitution for or in conversion of, or in connection with an assumption of, stock options, stock appreciation rights, restricted stock, restricted stock units or other stock or stock-based awards held by awardees of an entity engaging in a corporate acquisition or merger transaction with the Company or any Subsidiary. Any conversion, substitution or assumption will be effective as of the close of the merger or acquisition, and, to the extent applicable, will be conducted in a manner that complies with Section 409A of the Code. The awards so granted may reflect the original terms of the awards being assumed or substituted or converted for and need not comply with other specific terms of this Plan, and may account for Common Stock substituted for the securities covered by the original awards and the number of shares subject to the original awards, as well as any exercise or purchase prices applicable to the original awards, adjusted to account for differences in stock prices in connection with the transaction.
(b)In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary merges has shares available under a pre-existing plan previously approved by shareholders and not adopted in contemplation of such acquisition or merger, the shares available for grant pursuant to the terms of such plan (as adjusted, to the extent appropriate, to reflect such acquisition or merger) may be used for awards made after such acquisition or merger under this Plan; provided, however, that awards using such available shares may not be made after the date awards or grants could have been made under the terms of the pre-existing plan absent the acquisition or merger, and may only be made to individuals who were not employees or directors of the Company or any Subsidiary prior to such acquisition or merger.
(c) Any Common Stock that is issued or transferred by, or that is subject to any awards that are granted by, or become obligations of, the Company under Section 22(a) or Section 22(b) of this Plan will not reduce the Common Stock available for issuance or transfer under this Plan or otherwise count against the limits contained in Section 3 of this Plan. In addition, no Common Stock subject to an award that is granted by, or becomes an obligation of, the Company under Section 22(a) or Section 22(b) of this Plan will be added to the aggregate limit contained in Section 3(a)(i) of this Plan.
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Exhibit 10.2
HORMEL FOODS CORPORATION
Restricted Stock Unit Agreement
Under the 2026 Equity and Incentive Compensation Plan
Hormel Foods Corporation (the “Company”), pursuant to the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan (the “Plan”), has granted an award of Restricted Stock Units (the “Award”) to you, the Participant named below. The terms and conditions of this Restricted Stock Unit Award are set forth in this Agreement, consisting of this cover page and the Restricted Stock Unit Terms and Conditions on the following pages, and in the Plan document, a copy of which has been provided to you. Any capitalized term that is used but not defined in this Agreement shall have the meaning assigned to it in the Plan as it currently exists or as it is amended in the future.
Name of Participant: _______________________ | |||||
No. of Restricted Stock Units Granted: _______ | Date of Grant: __________, 20__ | ||||
Vesting Schedule: 100% of the RSUs shall vest on the third anniversary of the Date of Grant (“Grant Date”) (such third anniversary, the “Scheduled Vesting Date”) | |||||
By signing below or otherwise evidencing your acceptance of this Agreement in a manner approved by the Company, you agree to all of the terms and conditions contained in this Agreement and in the Plan document. You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and the Company regarding this Award of Restricted Stock Units.
PARTICIPANT | HORMEL FOODS CORPORATION By: Name: Title: | ||||
HORMEL FOODS CORPORATION
2026 Equity and Incentive Compensation Plan
Restricted Stock Unit Agreement
Restricted Stock Unit Agreement
Restricted Stock Unit Terms and Conditions
1.Grant of Restricted Stock Units. The Company hereby confirms the grant to you, as of the Grant Date specified on the cover page of this Agreement (the “Grant Date”) and subject to the terms and conditions in this Agreement and the Plan, of the number of Restricted Stock Units specified on the cover page of this Agreement (the “Units” or “RSUs”), subject to your execution of the Company’s current Proprietary Information, Non-Compete, Non-Solicitation and Invention Assignment Agreement (the “Proprietary Information Agreement”). For the avoidance of doubt, if you have not executed the Proprietary Information Agreement within 30 days of the Grant Date, you shall forfeit this Award in its entirety. Each Unit that vests represents the right to receive one share of the Company’s Common Stock. Prior to their settlement or forfeiture in accordance with the terms of this Agreement, the Units granted to you will be credited to an account in your name maintained by the Company. This account shall be unfunded and maintained for book-keeping purposes only, with the Units simply representing an unfunded and unsecured contingent obligation of the Company.
2.Vesting.
(a)Definitions. The following definitions are applicable for purposes of this Agreement, in addition to the terms defined in Section 1 above or otherwise defined in this Agreement:
(i)“Cause” means your (A) material failure to perform satisfactorily the duties reasonably required of you by the Company (other than by reason of Disability); (B) material violation of any law, rule, regulation, court order or regulatory directive (other than traffic violations, misdemeanors or other minor offenses); (C) material breach of the Company’s business conduct or ethics code or of any fiduciary duty or nondisclosure, non-solicitation, non-competition or similar obligation owed to the Company or any Affiliate; (D) engaging in any act or practice that involves personal dishonesty on your part or demonstrates a willful and continuing disregard for the best interests of the Company and its Affiliates; or (E) engaging in dishonorable or disruptive behavior, practices or acts which would be reasonably expected to harm or bring disrepute to the Company or any of its Affiliates, their business or any of their customers, employees or vendors.
(ii)“Disability” means (A) any permanent and total disability under any long-term disability plan or policy of the Company or its Affiliates that covers you, or (B) if there is no such long-term disability plan or policy, “total and permanent disability” within the meaning of Code Section 22(e)(3).
(iii)“Qualified Retirement” means any termination of your employment and service, other than for Cause, occurring at or after age 60 with five (5) years or more of continuous service to the Company and its Affiliates, or at or after age 55 with fifteen (15) years or more of continuous service to the Company and its Affiliates, provided that you remain an active employee of or service provider to the Company or one of its Affiliates
Form of Restricted Stock Unit Agreement (2026 Equity and Incentive Compensation Plan) Page 2
through (A) the remainder of the Company’s current fiscal quarter in which the Grant Date occurred plus (B) all of the subsequent three fiscal quarters following the fiscal quarter in which the Grant Date occurred.
(b)Scheduled Vesting. The Units will vest on the date specified in the Vesting Schedule on the cover page to this Agreement, so long as your applicable employment or service to the Company does not terminate prior to the Scheduled Vesting Date for reasons other than your death, Disability or Qualified Retirement.
(c)Accelerated Vesting. Notwithstanding Section 2(b), if, prior to the Scheduled Vesting Date, you die or your employment and service is terminated due to your Disability or Qualified Retirement, then the Units shall immediately vest in full. In addition, vesting of the Units may be accelerated during the term of the Award under the circumstances described in Section 12(b) of the Plan.
3.Service Requirement. Except as otherwise provided in Section 2 of this Agreement, if you cease to be an employee or service provider prior to the Scheduled Vesting Date, you will forfeit all unvested Units.
4.Settlement of Units; Delivery of Shares.
(a)Time of Settlement. Subject to Section 3 and 4(b), one share of Common Stock in payment and settlement of each vested Unit will be paid to you (or to your personal representative or estate in the event of your death, as applicable) within 30 days following the first to occur of (i) the Scheduled Vesting Date and (ii) an applicable vesting date specified in Section 2(c) of this Agreement or Section 12(b) of the Plan that, to the extent Section 409A of the Code applies to such distribution, also qualifies as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder.
(b)Delivery. Delivery of the shares of Common Stock shall be effected by the issuance of a stock certificate to you, by the electronic delivery of the shares of Common Stock to a brokerage account you designate, or by book-entry registration of such shares of Common Stock with the Company’s transfer agent and shall be subject to the tax withholding provisions of Section 6, and shall be in complete satisfaction and settlement of such vested Units. The Company will pay any original issue or transfer taxes with respect to the issue and transfer of shares of Common Stock to you pursuant to this Agreement, and all fees and expenses incurred by it in connection therewith. If the Units that vest include a fractional Unit, the Company shall round the number of vested Units up to the nearest whole Unit prior to issuance of Shares as provided herein. All shares of Common Stock so issued shall be fully paid and nonassessable. Notwithstanding the foregoing, if the ownership or issuance of shares of Common Stock to you as provided herein is not feasible due to applicable exchange controls, securities or tax laws or other provisions of applicable law, as determined by the Committee in its sole discretion, you (or your permitted transferee) shall receive in lieu of shares of Common Stock cash in an amount equal to the Market Value per Share (as of the date vesting of the Units occurs) of the shares of Common Stock otherwise issuable in settlement of the vested Units, net of any amount required to satisfy withholding tax obligations as provided in Section 6 of this Agreement.
5.Dividend Equivalents. If the Company pays cash dividends on its shares of Common Stock while any Units subject to this Agreement are outstanding, then on each dividend
Form of Restricted Stock Unit Agreement (2026 Equity and Incentive Compensation Plan) Page 3
payment date a dividend equivalent dollar amount equal to the number of Units credited to your account pursuant to this Agreement as of the dividend record date times the dollar amount of the cash dividend per shares of Common Stock shall be deemed reinvested in additional Units as of the dividend payment date and such additional Units shall be credited to your account. The number of additional Units so credited shall be determined based on the Market Value per Share of a share of Common Stock on the dividend payment date. Any additional Units so credited will be subject to the same terms and conditions, including the timing of vesting and settlement, applicable to the underlying Units to which the dividend equivalents relate.
6.Withholding Taxes. No shares of Common Stock will be delivered to you in settlement of vested Units unless you make arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the delivery of shares of Common Stock. You hereby authorize the Company (or any Affiliate) to withhold from payroll or other amounts payable to you any sums required to satisfy such withholding tax obligations, and otherwise agree to satisfy such obligations in accordance with the provisions of Section 16 of the Plan. You hereby further authorize the Company (or any Affiliate) to satisfy such withholding tax obligations by having the Company withhold a number of shares of Common Stock that would otherwise be issued to you in settlement of the Units and that have a fair market value equal to the amount of such withholding tax obligations.
7.Transfer of Award or Units. Subject to Section 15 of the Plan, you may not assign or transfer this Award or the Units subject to this Award except for a transfer upon your death in accordance with your will, or by the laws of descent and distribution. Following any such transfer, this Award shall continue to be subject to the same terms and conditions that were applicable to this Award immediately prior to its transfer. Any attempted transfer in violation of this Section 7 shall be void and without effect.
8.No Stockholder Rights. The Units subject to this Award do not entitle you or any permitted transferee of this Award to any of the rights of a stockholder of the Company in connection with the grant of Units subject to this Agreement unless and until shares of Common Stock are issued to you upon settlement of the Units, meaning a certificate evidencing such shares has been issued, electronic delivery of such shares has been made to your designated brokerage account, or an appropriate book entry in the Company’s stock register has been made. No adjustments shall be made for dividends or other rights if the applicable record date occurs before your stock certificate has been issued, electronic delivery of your shares of Common Stock has been made to your designated brokerage account, or an appropriate book entry in the Company’s stock register has been made, except as otherwise described in this Agreement or the Plan.
9.Section 409A of the Code. The award of Units as provided in this Agreement and any issuance of shares of Common Stock or payment pursuant to this Agreement are intended, to the greatest degree possible, to be exempt from Section 409A of the Code under the short-term deferral exception specified in Treas. Reg. § 1.409A-l(b)(4). However, to the extent that you are, or become, eligible for a Qualified Retirement at any time while this Award is outstanding, this Agreement shall be interpreted and applied in a manner that complies in all respects with the requirements of Section 409A of the Code.
10.Governing Plan Document. This Agreement and Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
Form of Restricted Stock Unit Agreement (2026 Equity and Incentive Compensation Plan) Page 4
11.Choice of Law. This Agreement will be interpreted and enforced under the laws of the state of Delaware (without regard to its conflicts or choice of law principles).
12.Binding Effect. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
13.Other Agreements. You agree that in connection with the settlement of the shares of Common Stock, you will execute such documents as may be necessary to become a party to any stockholder, voting or similar agreements as the Company may require.
14.Restrictive Legends. The Company may place a legend or legends on any certificate representing shares of Common Stock issued upon the settlement of this Award summarizing transfer and other restrictions to which the shares of Common Stock may be subject under applicable securities laws, other provisions of this Agreement, or other agreements contemplated by Section 13 of this Agreement. You agree that in order to ensure compliance with the restrictions referred to in this Agreement, the Company may issue appropriate “stop transfer” instructions to its transfer agent.
15.Compensation Recovery Policy; Cancellation and Rescission.
(a)You agree that during the period of your employment or service with the Company or any of its Affiliates and for the one-year period immediately following termination of such employment or service for any reason (the “Covenant Term”), you will not (i) materially breach the Company’s Code of Ethical Business Conduct, (ii) breach any nondisclosure or similar obligation owed to the Company or any Affiliate or (iii) render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company.
(b)Failure to comply with the provisions of Section 15(a) during the Covenant Term shall cause this Award to be canceled. If any failure to comply with the provisions of Section 15(a) during the Covenant Term occurs within a one year period after any shares of Common Stock delivered upon vesting of the Units hereunder shall cause such delivery to be rescinded. The Company shall notify you in writing of any such rescission within one year after such delivery. Within ten days after receiving such notice from the Company, you shall either (i) return such shares of Common Stock to the Company, or (ii) pay to the Company in cash an amount equal to the Market Value per Share of such shares of Common Stock as of the respective Scheduled Vesting Date of the underlying Units.
(c)Additionally, this Award and any compensation associated herewith is subject to reduction, cancellation, forfeiture or recovery by the Company or other action pursuant to any Compensation Recovery Policy adopted by the Board or the Committee at any time, including in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. This Award may be unilaterally amended by the Committee to comply with any such Compensation Recovery Policy.
16.Electronic Delivery and Acceptance. The Company may deliver any documents related to this Award by electronic means and request your acceptance of this Agreement by
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electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.
17.Other Acknowledgments. Nothing in this Agreement (or otherwise) (a) limits your right to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act of 2002) or (b) prevents you from providing, without prior notice to the Company, information (including documents) to governmental authorities or agencies regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities or agencies regarding possible legal violations (for purpose of clarification, you are not prohibited from providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act). The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
By signing the cover page of this Agreement or otherwise accepting this Agreement in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.
Form of Restricted Stock Unit Agreement (2026 Equity and Incentive Compensation Plan) Page 6
Exhibit 10.3
HORMEL FOODS CORPORATION
Stock Option Agreement
Under the 2026 Equity and Incentive Compensation Plan
Hormel Foods Corporation (the “Company”), pursuant to the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan (the “Plan”), has granted Option Rights (otherwise known as stock options) to purchase shares of the Company’s Common Stock (the “Option Right”) to you, the Participant named below. The terms and conditions of the Option Right are set forth in this Agreement, consisting of this cover page and the Option Right Terms and Conditions on the following pages, and in the Plan document, a copy of which has been provided to you. Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan as it currently exists or as it is amended in the future.
Name of Participant: | |||||
No. of Shares Covered: ______ | Date of Grant (“Grant Date”): _________, 20__ | ||||
Exercise Price Per Share:$________ | Expiration Date: _______________, 20__ | ||||
Vesting and Exercise Schedule: Dates First Anniversary of Grant Date Second Anniversary of Grant Date Third Anniversary of Grant Date Fourth Anniversary of Grant Date | Portion of Shares as to Which Option Right Becomes Vested and Exercisable 25% 25% 25% 25% | ||||
By signing below or otherwise evidencing your acceptance of this Agreement in a manner approved by the Company, you agree to all of the terms and conditions contained in this Agreement and in the Plan document. You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and the Company regarding your right to purchase shares of the Company’s Common Stock pursuant to this Option Right.
PARTICIPANT | HORMEL FOODS CORPORATION By: Name: Title: | ||||
HORMEL FOODS CORPORATION
2026 Equity and Incentive Compensation Plan
Stock Option Agreement
Stock Option Agreement
Option Right Terms and Conditions
1.Vesting and Exercisability of Option Right.
(a)Definitions. The following definitions are applicable for purposes of this Agreement, in addition to the terms otherwise defined in this Agreement:
(i)“Cause” means your (A) material failure to perform satisfactorily the duties reasonably required of you by the Company (other than by reason of Disability); (B) material violation of any law, rule, regulation, court order or regulatory directive (other than traffic violations, misdemeanors or other minor offenses); (C) material breach of the Company’s business conduct or ethics code or of any fiduciary duty or nondisclosure, non-solicitation, non-competition or similar obligation owed to the Company or any Affiliate; (D) engaging in any act or practice that involves personal dishonesty on your part or demonstrates a willful and continuing disregard for the best interests of the Company and its Affiliates; or (E) engaging in dishonorable or disruptive behavior, practices or acts which would be reasonably expected to harm or bring disrepute to the Company or any of its Affiliates, their business or any of their customers, employees or vendors.
(ii)“Disability” means (A) any permanent and total disability under any long-term disability plan or policy of the Company or its Affiliates that covers you, or (B) if there is no such long-term disability plan or policy, “total and permanent disability” within the meaning of Code Section 22(e)(3).
(iii)“Qualified Retirement” means any termination of your employment and service, other than for Cause, occurring at or after age 60 with five (5) years or more of continuous service to the Company and its Affiliates, or at or after age 55 with fifteen (15) years or more of continuous service to the Company and its Affiliates, provided that you remain an active employee of or service provider to the Company or one of its Affiliates through (A) the remainder of the Company’s current fiscal quarter in which the Grant Date occurred plus (B) all of the subsequent three fiscal quarters following the fiscal quarter in which the Grant Date occurred.
(b)Scheduled Vesting. This Option Right will vest and become exercisable as to the number of shares of Common Stock and on the dates specified in the Vesting and Exercise Schedule on the cover page to this Agreement, so long as your applicable employment or service to the Company does not terminate for reasons other than your Disability or Qualified Retirement. The Vesting and Exercise Schedule is cumulative, meaning that to the extent the Option Right has not already been exercised and has not expired or been terminated or cancelled, you may at any time purchase all or any portion of the shares of Common Stock subject to the vested portion of the Option Right. Upon the termination of your employment or service to the Company due to your Disability or Qualified Retirement, vesting shall continue in accordance with the provisions of the first sentence of this Section 1(b).
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(c)Accelerated Vesting. Notwithstanding Section 1(b), if you die then this Option Right shall immediately vest and become exercisable in full. In addition, vesting and exercisability of this Option Right may be accelerated during the term of the Option Right under the circumstances described in Sections 12(b) and 12(c) of the Plan, and at the discretion of the Committee in accordance with Section 4(e) and 18(c) of the Plan.
2.Expiration. Subject to Section 1 of this Agreement and Section 12 of the Plan, this Option Right will expire and will no longer be exercisable at 4:00 p.m. Central Time on the earliest of:
(a)The expiration date specified on the cover page of this Agreement;
(b)Upon your termination of employment or service for Cause or upon conduct that would constitute Cause during any post-termination exercise period;
(c)Upon your termination of employment or service for any reason other than Cause, death, Disability or Qualified Retirement and subject to Section 12 of the Plan, the date three months after your date of termination; provided however, if you die during such three-month period, the vested and exercisable portions of this Option Right may be exercised for a period of one year after the date of your death;
(d)Upon your termination of employment or service due to your Disability or Qualified Retirement, this Option Right shall be exercisable until the original expiration date specified on the cover page of this Agreement; provided, however, if you die prior to the original expiration date specified on the cover page of this Agreement, this Option Right shall expire upon the earlier of (i) one year after the date of your death and (ii) the original expiration date specified on the cover page of this Agreement;
(e)Upon your termination of employment or service due to your death, the date one year after your date of termination; or
(f)The date (if any) fixed for forfeiture, termination or cancellation of this Option Right pursuant to Section 12 of the Plan or Section 16 of this Agreement.
3.Service Requirement. Except as otherwise provided in Section 1 of this Agreement, this Option Right may be exercised only while you continue to provide service to the Company or any Affiliate, and only if you have continuously provided such service since the Grant Date of this Option Right.
4.Exercise of Option. Subject to Section 3 of this Agreement, the vested and exercisable portion of this Option Right may be exercised by (a) delivering electronic notice of exercise to the third-party stock plan administrator retained by the Company or, if approved by the Committee, written notice of exercise to the Company, to the attention of the Company’s Corporate Secretary (which written or electronic notice will be in such form as may be approved by the Company and shall state the number of shares of Common Stock to be purchased, the manner in which the exercise price will be paid and the manner in which the shares of Common Stock to be acquired are to be delivered, and must be signed or otherwise authenticated by the person exercising this Option Right), or by such other means as the Committee may approve and (b) by providing for payment of the exercise price of the shares of Common Stock being acquired and any related withholding taxes.
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5.Payment of Exercise Price. Payment of the exercise price, and any applicable withholding tax, shall be made by cash or check or, subject to applicable law and to the extent permitted by the Committee from time to time and elected by you, by means of a broker-assisted cashless exercise in which you irrevocably instruct your broker to deliver proceeds of a sale of all or a portion of the shares of Common Stock to be issued pursuant to the exercise to the Company in payment of the exercise price of such shares of Common Stock, to the extent the foregoing method can be accommodated by any third-party stock plan administrator retained by the Company. The Committee may permit additional payment methods from time to time in its discretion.
6.Withholding Taxes. You may not exercise this Option Right in whole or in part unless you make arrangements acceptable to the Company for payment of any federal, state, local or foreign withholding taxes that may be due as a result of the exercise of this Option Right. You hereby authorize the Company (or any Affiliate) to withhold from payroll or other amounts payable to you any sums required to satisfy such withholding tax obligations, and otherwise agree to satisfy such obligations in accordance with the provisions of Section 16 of the Plan. The Committee may permit additional withholding methods from time to time in its discretion. Delivery of shares of Common Stock upon exercise of this Option Right is subject to the satisfaction of applicable withholding tax obligations.
7.Delivery of Shares of Common Stock. As soon as practicable after the Company receives the notice of exercise and payment of the exercise price as provided above, and has determined that all other conditions to exercise, including satisfaction of withholding tax obligations, have been satisfied, it shall deliver to the person exercising the Option Right, in the name of such person, the shares of Common Stock being purchased, as evidenced by issuance of a stock certificate or certificates, electronic delivery of such shares of Common Stock to a brokerage account designated by such person, or book-entry registration of such shares of Common Stock with the Company’s transfer agent. The Company shall pay any original issue or transfer taxes with respect to the issue or transfer of the shares of Common Stock and all fees and expenses incurred by it in connection therewith. All shares of Common Stock so issued shall be fully paid and nonassessable.
8.Transfer of Option Right. During your lifetime, only you (or your guardian or legal representative in the event of legal incapacity) may exercise this Option Right except in the case of a transfer described below. Subject to Section 15 of the Plan, you may not assign or transfer this Option Right except for a transfer upon your death in accordance with your will, by the laws of descent and distribution. The Option Right held by any such transferee will continue to be subject to the same terms and conditions that were applicable to the Option Right immediately prior to its transfer and may be exercised by such transferee as and to the extent that the Option Right has become exercisable and has not terminated in accordance with the provisions of the Plan and this Agreement.
9.No Stockholder Rights Before Exercise. Neither you nor any permitted transferee of this Option Right will have any of the rights of a stockholder of the Company with respect to any shares of Common Stock subject to this Option Right until a certificate evidencing such shares of Common Stock has been issued, electronic delivery of such shares of Common Stock has been made to your designated brokerage account, or an appropriate book entry in the Company’s stock register has been made. No adjustments shall be made for dividends or other rights if the applicable record date occurs before your stock certificate has been issued, electronic delivery of your shares of Common Stock has been made to your designated brokerage account, or an appropriate book entry
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in the Company’s stock register has been made, except as otherwise described in the Plan.
10.Non-Qualified Option Right. This Option Right is not intended to be an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code and will be interpreted accordingly.
11.Governing Plan Document. This Agreement and Option Right are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
12.Choice of Law. This Agreement will be interpreted and enforced under the laws of the state of Delaware (without regard to its conflicts or choice of law principles).
13.Binding Effect. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
14.Other Agreements. You agree that in connection with the exercise of this Option Right, you will execute such documents as may be necessary to become a party to any stockholder, voting or similar agreements as the Company may require.
15.Restrictive Legends. The Company may place a legend or legends on any certificate representing shares of Common Stock issued upon the exercise of this Option Right summarizing transfer and other restrictions to which the shares of Common Stock may be subject under applicable securities laws, other provisions of this Agreement, or other agreements contemplated by Section 14 of this Agreement. You agree that in order to ensure compliance with the restrictions referred to in this Agreement, the Company may issue appropriate “stop transfer” instructions to its transfer agent.
16.Compensation Recovery Policy; Cancellation and Recission.
(a)You agree that during the period of your employment or service with the Company or any of its Affiliates and for the one year period immediately following termination of such employment or service for any reason (the “Covenant Term”), you will not (i) materially breach the Company’s Code of Ethics and Business Conduct, (ii) breach any nondisclosure or similar obligation owed to the Company or any Affiliate or (iii) render services for any organization or engage directly or indirectly in any business which, in the judgment of the chief executive officer of the Company or other senior officer designated by the Committee, is or becomes competitive with the Company, or which organization or business, or the rendering of services to such organization or business, is or becomes otherwise prejudicial to or in conflict with the interests of the Company.
(b)Failure to comply with the provisions of Section 16(a) of this Agreement during the Covenant Term shall cause this Option Right to be canceled. If any failure to comply with the provisions of Section 16(a) of this Agreement during the Covenant Term occurs within a one year period after any exercise, payment or delivery pursuant to this Option Right shall cause such exercise, payment or delivery to be rescinded. The Company shall notify you in writing of any such rescission within one year after such exercise, payment or delivery. Within ten days after receiving such notice from the Company, you shall pay
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to the Company the amount of any gain realized or payment received as a result of the rescinded exercise, payment or delivery pursuant to this Option Right.
(c)Additionally, this Option Right and any compensation associated herewith may be made subject to reduction, cancellation, forfeiture or recovery by the Company or other action pursuant to any Compensation Recovery Policy adopted by the Board or the Committee at any time, including in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. This Option Right may be unilaterally amended by the Committee to comply with any such Compensation Recovery Policy.
17.Electronic Delivery and Acceptance. The Company may deliver any documents related to this Option Right by electronic means and request your acceptance of this Agreement by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator
18.Other Acknowledgments. Nothing in this Agreement (or otherwise) (a) limits your right to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act of 2002) or (b) prevents you from providing, without prior notice to the Company, information (including documents) to governmental authorities or agencies regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities or agencies regarding possible legal violations (for purpose of clarification, you are not prohibited from providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act). The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
By signing the cover page of this Agreement or otherwise accepting this Agreement in a manner approved by the Company, you agree to all the terms and conditions described above and in the Plan document.
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HORMEL FOODS CORPORATION
Restricted Stock Award Agreement
Under the 2026 Equity and Incentive Compensation Plan
(Non-Employee Directors)
(Non-Employee Directors)
Hormel Foods Corporation (the “Company”), pursuant to the Hormel Foods Corporation 2026 Equity and Incentive Compensation Plan (the “Plan”), has granted an award of Restricted Stock (the “Award”) to you, the Participant named below. The terms and conditions of this Restricted Stock Award are set forth in this Restricted Stock Award Agreement (the “Agreement”), consisting of this cover page and the Terms and Conditions on the following pages, and in the Plan document, a copy of which has been provided or otherwise made available to you and is incorporated herein by reference and made a part of this Agreement. Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan, as it currently exists or as it is amended in the future.
Name of Participant: ______________________ | |||||
Number of Shares of Restricted Stock: _______ | Date of Grant: __________, 20__ | ||||
Vesting Date: The date of the Company’s next annual stockholders meeting, or if the Date of Grant (“Grant Date”) is later than February 3 of any given year, the date of the Company’s second succeeding annual stockholders meeting. | |||||
By signing below or otherwise evidencing your acceptance of this Agreement in a manner approved by the Company, you agree to all of the terms and conditions contained in this Agreement and in the Plan document. You acknowledge that you have received and reviewed these documents and that they set forth the entire agreement between you and the Company regarding your rights and obligations in connection with this Restricted Stock Award.
PARTICIPANT | HORMEL FOODS CORPORATION By: Name: Title: | ||||
Hormel Foods Corporation
2026 Equity and Incentive Compensation Plan
Restricted Stock Award Agreement
2026 Equity and Incentive Compensation Plan
Restricted Stock Award Agreement
Terms and Conditions
1.Grant of Restricted Stock. The Company has granted to you, as of the Grant Date specified on the cover page of this Agreement and subject to the terms and conditions in this Agreement and the Plan, an Award of the number of shares of Restricted Stock specified on the cover page of this Agreement. Unless and until these shares vest as provided in Section 4 of this Agreement, they are subject to the restrictions provided for in Section 3 of this Agreement and are referred to as “Restricted Shares.”
2.Issuance of Restricted Shares. Until the Restricted Shares vest as provided in Section 4 of this Agreement (or are forfeited), the Restricted Shares will be evidenced either by a book-entry in your name with the Company’s transfer agent or by one or more stock certificates issued in your name. Any such stock certificate(s) will be deposited with the Company or its designee and will bear an appropriate legend referring to restrictions applicable to the Restricted Shares. Any book-entry will be accompanied by a similar legend and shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable. Your right to receive this Award is conditioned upon your execution and delivery to the Company of any instructions of assignment that may be necessary to permit transfer to the Company of all or a portion of the Restricted Shares if such Restricted Shares are forfeited in whole or in part.
3.Transfer Restrictions, Possible Forfeiture and Rights as Shareholder.
(a)Subject to Section 15 of the Plan, until the Restricted Shares vest as provided in Section 4 of this Agreement, you are not entitled to sell, margin, assign, transfer, exchange, pledge or otherwise encumber or dispose of the Restricted Shares and the Restricted Shares remain subject to possible forfeiture as provided in Section 5 of this Agreement. Any attempted transfer in violation of this Agreement or the Plan shall be null and void and of no effect.
(b)Except as otherwise provided in this Agreement or the Plan, you are entitled at all times on and after the Grant Date to all the rights of a shareholder with respect to the Restricted Shares, including the right to vote the Restricted Shares and to receive all ordinary course cash dividends paid with respect to the Restricted Shares (“Cash Dividends”). Any other dividends or distributions, including any extraordinary cash dividends or the right to receive any stock or other securities of the Company (or any company with or into which the company shall be combined or merged) and any other assets (excluding Cash Dividends) (collectively, “Other Distributions”) payable with respect to outstanding but unvested Restricted Shares, including any Shares or other property or securities distributable in connection with an equity restructuring or other event described in Section 11 of the Plan, shall be delivered to, retained and held by the Company subject to the same restrictions, vesting conditions and other terms of this Agreement to which the underlying unvested Restricted Shares are subject. At the time the underlying
Restricted Shares vest, the Company shall deliver to you (without interest) such retained Other Distributions that relate to the Restricted Shares that have vested. In this Agreement, the term “Restricted Shares” shall, whenever the context requires, be deemed
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to include all Other Distributions in respect of the Restricted Shares. You agree to execute and deliver to the Company any instruments of assignment that may be necessary to permit transfer to the Company of all or any portion of any dividends or distributions subject to this Section 3(b) that may be forfeited.
4.Vesting of Restricted Shares.
(a)Scheduled Vesting. The Restricted Shares will vest on the Vesting Date specified on the cover page of this Agreement (the “Vesting Date”), so long as your applicable employment or service to the Company does not end before such date.
(b)Accelerated Vesting. Notwithstanding Section 4(a) of this Agreement, vesting of the Restricted Shares may be accelerated during the term of the Award under the circumstances described in Sections 12(b) and 12(c) of the Plan, and at the discretion of the Committee in accordance with Section 6(f) and 18(c) of the Plan.
5.Effect of Termination of Service. Except as otherwise provided in accordance with Section 4 of this Agreement, if you cease to be a Company or Affiliate employee, Director or consultant (as described in the Plan), you will immediately forfeit all unvested Restricted Shares. Any Restricted Shares that are forfeited shall be returned to the Company for cancellation. You shall have no further rights as a stockholder of the Company with respect to the forfeited Restricted Shares, including, without limitation, any right to receive any dividend or distribution payable to stockholders of record on or after the date of such forfeiture.
6.Delivery of Unrestricted Shares. After any Restricted Shares vest pursuant to Section 4 of this Agreement, and after the Company has determined that all conditions to the release of such vested Restricted Shares to you have been satisfied, the Company shall, as soon as practicable, cause to be delivered to you the applicable number of unrestricted shares of Common Stock, together with all Other Distributions that relate to such shares of Common Stock. Delivery of the unrestricted shares of Common Stock shall be effected by the removal of restrictions on the book-entry in the stock register maintained by the Company’s transfer agent with a corresponding notice provided to you, by the electronic delivery of the shares of Common Stock to a brokerage account you designate, or by delivery to you of a stock certificate without a restrictive legend.
7.No Right to Continued Service or Future Awards. This Agreement memorializes Restricted Stock awarded to you, but does not impose any obligation on the Company to make any future grants or issue any future awards to you or otherwise continue your participation under the Plan. This Agreement will not give you a right to continued employment or service with the Company or any Affiliate, and the Company may terminate your applicable employment or service without regard to the effect it may have upon you under this Agreement.
8.Tax Consequences. You acknowledge that unless you make a proper and timely Section 83(b) election as described below, then at the time the Restricted Shares vest, you will be obligated to recognize ordinary income and be taxed in an amount equal to the fair market value as of the date of vesting of the Restricted Shares then vesting. You shall be solely responsible for any tax obligations that may arise as a result of this Award.
You understand that, with respect to the grant of this Award, you may file an election with the Internal Revenue Service, within 30 days of the Grant Date, electing pursuant to Section 83(b) of the Code to be taxed on the fair market value of the Restricted Shares as of the Grant Date. You acknowledge that it is your sole responsibility to timely file an election under Section
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83(b) of the Code. If you make such an election, you must promptly provide the Company with a copy.
9.Governing Plan Document. This Agreement and the Award are subject to all the provisions of the Plan, and to all interpretations, rules and regulations which may, from time to time, be adopted and promulgated by the Board or the Committee pursuant to the Plan. All interpretations of the Committee and all related decisions or resolutions of the Board or the Committee shall be final and binding on the Company and you. If there is any inconsistency between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.
10.Entire Agreement. This Agreement and the Plan set forth the entire agreement and understanding of the parties hereto with respect to the issuance and delivery of the Restricted Shares and supersede all prior agreements, arrangements, plans, and understandings relating to the issuance and delivery of these Restricted Shares.
11.Choice of Law. This Agreement will be interpreted and enforced under the laws of the state of Delaware (without regard to its conflicts-of-law principles).
12.Binding Effect. This Agreement will be binding in all respects on your heirs, representatives, successors and assigns, and on the successors and assigns of the Company.
13.Compensation Recovery Policy; Cancellation.
(a)You agree that during the period of your employment or service with the Company or any of its Affiliates (the “Covenant Term”), you will not (i) materially breach the Company’s Code of Ethics and Business Conduct or (ii) breach any noncompetition, nondisclosure or similar obligation owed to the Company or any Affiliate. Failure to comply with the provisions of Section 13(a) during the Covenant Term shall cause this Award to be canceled.
(b)Additionally, this Award and any compensation associated herewith may be made subject to reduction, cancellation, forfeiture or recovery by the Company or other action pursuant to any Compensation Recovery Policy adopted by the Board or the Committee at any time, including in response to the requirements of Section 10D of the Exchange Act and any implementing rules and regulations thereunder, or as otherwise required by law. Any Agreement may be unilaterally amended by the Committee to comply with any such Compensation Recovery Policy.
14.Electronic Delivery and Acceptance. The Company may deliver any documents related to this Award by electronic means and request your acceptance of this Agreement by electronic means. You hereby consent to receive all applicable documentation by electronic delivery and to participate in the Plan through an on-line (and/or voice activated) system established and maintained by the Company or the Company’s third-party stock plan administrator.
15.Other Acknowledgments. Nothing in this Agreement (or otherwise) (a) limits your right to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act of 2002) or (b) prevents you from providing, without prior notice to the Company, information (including documents) to governmental authorities or agencies regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities or agencies regarding possible legal violations (for purpose of clarification, you are not prohibited from
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providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act). The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
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Exhibit 10.5
HORMEL FOODS CORPORATION
EXECUTIVE SEVERANCE PLAN
(Effective as of January 31, 2026)
1.Purpose and Scope. The purpose of this Hormel Foods Corporation Executive Severance Plan (this “Plan”) is to set forth the compensation and benefits, if any, that are due to designated executive officers and other employees of Hormel Foods Corporation, a Delaware corporation (the “Company”) and its Subsidiaries in the event of a termination of their employment in certain specified circumstances, all as further provided for under this Plan. This Plan applies to the executive officers and other employees of the Company and its Subsidiaries who, from time to time: (A) are identified and designated in writing by the Compensation Committee (or its successor, the “Committee”) of the Board of Directors of the Company (the “Board”) as being covered by this Plan, (B) are not parties to individual employment or severance agreements providing substantially comparable benefits, and (C) have executed an acknowledgement regarding such participation substantially in the form attached hereto as Exhibit A (the “Acknowledgement”) (each such person, a “Participant”). The Committee will designate in writing a Severance Factor (as defined below) for each Participant, including by name or by title/position or otherwise. Notwithstanding the definition of “Participant” as set forth in this Section 1 of this Plan, the Committee may, in its discretion and from time to time, determine that a Participant will no longer remain a qualifying Participant under the Plan; provided, however, that no such determination may adversely affect any Participant without the Participant’s prior written consent unless the Company provides at least four months’ written notice of such determination to such adversely affected Participant. The Plan is effective as of January 31, 2026 (the “Effective Date”).
2.Definitions. The following definitions are applicable for purposes of this Plan (including any exhibits hereto), in addition to terms defined in Section 1 above or otherwise defined in this Plan:
(a)“Accrued Obligations” means the sum of a Participant’s (i) base salary earned but unpaid (and otherwise payable) through the Date of Termination, (ii) applicable payment for unused paid time-off, if any, accrued as of the Date of Termination, and (iii) unreimbursed business expenses reimbursable under policies of the Company and its Subsidiaries then in effect; provided, however, that in the case of each of (i) and (ii), to the extent permissible under applicable law and consistent with Code Section 409A, the Company may offset such amounts against any obligations and liabilities of the Participant to the Company or any Subsidiary.
(b)“Affiliate” means any entity that is a Subsidiary of the Company, or any other entity in which the Company owns, directly or indirectly, at least 20% of combined voting power of the entity’s Voting Securities.
(c)“Award” shall mean any unvested and/or unearned stock-based award or cash award granted to a Participant under an Incentive Plan.
(d)“Beneficiary” means a Person or entity that a Participant designates in writing to the Company to receive payments or benefits hereunder in the event of the Participant’s death. If no such Person or entity is named or there is no surviving designated Beneficiary, such Participant’s Beneficiary shall be the Participant’s estate.
(e)“Board” has the meaning specified in Section 1.
(f)“Bonus” means the annual performance-based cash Award granted to the Participant under an Incentive Plan (including the Company’s Annual Incentive Plan or its successor(s)).
(g)“Cause” means such Participant’s:
(i) material failure to perform satisfactorily the duties reasonably required of the Participant by the Company (other than by reason of disability);
(ii) material violation of any law, rule, regulation, court order or regulatory directive (other than traffic violations, misdemeanors or other minor offenses);
(iii) material breach of the Company’s business conduct or ethics code or of any fiduciary duty or nondisclosure, non-solicitation, non-competition or similar obligation owed to the Company or any Subsidiary or Affiliate;
(iv) engaging in any act or practice that involves personal dishonesty on the part of the Participant or demonstrates a willful and continuing disregard for the best interests of the Company and its Subsidiaries or Affiliates; or
(v) engaging in dishonorable or disruptive behavior, practices or acts which would be reasonably expected to harm or bring disrepute to the Company or any of its Subsidiaries or Affiliates, their business or any of their customers, employees or vendors.
(h)“COBRA” means the continuation coverage requirements for “group health plans” under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, including rules thereunder and successor provisions and rules thereto.
(i)“Code” means the Internal Revenue Code of 1986, as amended from time to time, and all regulations, interpretations, and administrative guidance issued thereunder (a
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reference to any provision of the Code shall include reference to any successor provision of the Code or successor regulations).
(j)“Code Section 409A” means Section 409A of the Code and any proposed, temporary or final regulation, or any other guidance, promulgated with respect to Code Section 409A by the U.S. Department of Treasury or the Internal Revenue Service.
(k)“Committee” has the meaning specified in Section 1.
(l)“Company” has the meaning specified in Section 1.
(m)“Company Policy” means any corporate policies of the Company and its Subsidiaries and Affiliates, and any personnel policies or related documents, each as may be in effect from time to time.
(n)“Date of Termination” means, unless otherwise agreed to by the Company, (i) if a Participant’s employment is terminated by the Company and/or its Subsidiaries for Cause, the date on which a notice of termination is given or the date set forth in such notice, (ii) if the Participant’s employment is terminated by the Participant for Good Reason, the date that is one day after the last day of any applicable cure period, (iii) if the Participant’s employment is terminated by reason of death, the date of death of the Participant, or (iv) if the Participant’s employment is terminated for any other reason, the date on which a notice of termination is given or the date set forth in such notice. Notwithstanding anything in this Plan to the contrary, unless otherwise agreed to by the Company and the Participant prior to the Date of Termination, the Participant shall (x) be deemed to have automatically resigned from all directorships and offices or other roles with the Company and its Subsidiaries, and their Affiliates (including joint ventures), as of the Date of Termination, and (y) agree to execute and deliver any documentation reasonably requested (or to take any other reasonably requested steps) to effect or confirm such resignations.
(o)“Director” means a member of the Board.
(p)“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.
(q)“Forfeiture Event” has the meaning specified in Section 6(b)(i).
(r)“Good Reason” means the occurrence of any of the following, unless mutually agreed upon by the Company and a Participant:
(i) a material diminution in the Participant’s duties, authorities or responsibilities;
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(ii) a material reduction in the Participant’s base salary or target Bonus;
(iii) a permanent reassignment of the Participant’s primary workplace beyond a 50 miles radius from the Participant’s then-current primary workplace; or
(iv) a material breach by the Company of any obligation under this Plan or another material agreement between the Company and the Participant.
Notwithstanding the foregoing, none of the circumstances described above shall constitute Good Reason unless (x) the Participant provides the Company with written notice specifying in reasonable detail the circumstances alleged to constitute Good Reason within 45 days of the initial existence of such circumstances, (y) the Company fails to remedy the circumstances within the 45 days following its receipt of such notice and (z) the Participant actually terminates employment on the Date of Termination.
(s)“Incentive Plan” means each plan, policy, program or arrangement maintained by the Company pursuant to which cash or equity-based awards may be granted to Participants, as may be amended and/or restated from time to time.
(t)“Participant” has the meaning specified in Section 1.
(u)“Person” means an individual, corporation, partnership, limited liability company, association, trust, other entity, group or organization including a governmental authority.
(v)“Plan” has the meaning specified in Section 1.
(w)“Release” has the meaning specified in Section 6(c)(i).
(x)“Release Period” has the meaning specified in Section 6(c)(i).
(y)“Severance Factor” means, unless otherwise provided in a written agreement specifically regarding such topic between a Participant and the Company as of the Date of Termination, the multiple designated in writing by the Committee for each Participant (whether by name or by title/position or otherwise).
(z)“Severance Payments and Benefits” means, with respect to a Participant, all applicable benefits provided or payments made by the Company to or for the benefit of the Participant under this Plan.
(aa)“Subsidiary” means a corporation, company or other entity (i) more than 50% of whose outstanding shares or securities (representing the right to vote for the election of
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directors or other managing authority) are, or (ii) which does not have outstanding shares or securities (as may be the case in a partnership, joint venture, limited liability company, unincorporated association or other similar entity), but more than 50% of whose ownership or control interest representing the right generally to make decisions for such other entity is, now or hereafter, owned or controlled, directly or indirectly, by the Company.
(bb) “Voting Securities” means at any time, the then-outstanding securities entitled to vote generally in the election of Directors in the case of the Company or members of the board of directors or similar body in the case of another entity.
3.Termination of a Participant’s Employment for any Reason. Subject to the terms and conditions hereof, in the event of any termination of a Participant’s employment with the Company and its Subsidiaries for any reason, including but not limited to a termination of employment by the Company and its Subsidiaries for Cause or a termination of employment as a result of voluntary resignation by the Participant without Good Reason:
(a)The Company shall pay the Participant the Accrued Obligations, payable on the dates such amounts would have been payable under the Company’s policies if the Participant’s employment had not terminated, but in no event more than 60 days after the Participant’s Date of Termination, or sooner if required by applicable law.
(b)Subject to the potential application of the terms of Sections 4(c)-(d) of this Plan, any outstanding Awards (including, for the avoidance of doubt, any stock options, restricted stock, restricted stock units or stock appreciation rights) held by the Participant as of the Date of Termination shall be governed by the terms and conditions of the applicable Award agreements and Incentive Plans.
In the event of a termination of the Participant’s employment by the Company and its Subsidiaries for Cause or a termination of the Participant’s employment as a result of voluntary resignation by the Participant without Good Reason, the Participant shall not be entitled to receive any compensation, payments or benefits except as specified in Sections 3(a)-(b).
4.Termination of a Participant’s Employment by the Company Without Cause or by the Participant for Good Reason. In addition to the payments and benefits set forth in Section 3 as described therein, in the event a Participant’s employment with the Company and its Subsidiaries is terminated either by the Company and its Subsidiaries without Cause or by the Participant for Good Reason, the Participant shall also be entitled to receive the following:
(a)An amount equal to the product of (i) the Participant’s Severance Factor times (ii) the sum of (A) Participant’s annual base salary rate as of the Date of Termination (without regard to any reduction giving rise to Good Reason) and (B) Participant’s annual target Bonus amount for the fiscal year in which the Date of Termination occurs (without regard to any reduction giving rise to Good Reason), which amount will be payable in equal installments over a number of years equal to the Participant’s Severance Factor beginning on the Date of
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Termination in accordance with the Company’s normal payroll practices, but subject to the effectiveness of the applicable Release as provided in Section 6(c).
(b)If the Participant participated in the Company’s medical plan immediately prior to the Date of Termination, an amount equal to the estimated cost of continuation coverage for the Participant and the Participant’s covered family members under the Company’s medical plan pursuant to COBRA for a number of months equal to the product of (i) 12, multiplied by (ii) the Severance Factor. This amount will be payable in a lump sum on the next regularly administered pay period following the effectiveness of the applicable Release as provided in Section 6(c).
(c)The Company shall pay the Participant a pro-rated Bonus payout for the fiscal year in which the Date of Termination occurs based (i) on actual performance for the full applicable fiscal year, and (ii) pro-rated based on the portion of the year worked (i.e., number of days employed in the fiscal year during which the Date of Termination occurs, divided by 365), payable at the same time similar Bonuses are paid to the Company’s other similarly-situated employees, but in no event later than January 15 of the calendar year following the calendar year in which the applicable performance period for such Bonus ends (provided, however, that no such payment will be made if such Bonus for such fiscal year has previously been paid to the Participant). For the avoidance of doubt, such pro-rata Bonus will be paid without application of negative discretion uniquely applied to the Participant (and without regard to any reduction giving rise to Good Reason). In addition, if, prior to the Date of Termination, the Company has not paid any Bonus owed with respect to a fiscal year that ended prior to the Date of Termination, the Company shall pay the Participant such unpaid Bonus for the prior fiscal year at the same time similar Bonuses are paid to the Company’s other similarly-situated employees for the prior fiscal year, but in no event later than 2-1/2 months following the end of such prior fiscal year.
(d)To the extent applicable, and unless Participant is entitled to more favorable treatment under the applicable Award agreements and Incentive Plans, with respect to Participant’s outstanding and unvested restricted stock unit awards (“RSUs”) granted under an Incentive Plan and held by Participant as of the Date of Termination:
(i)such RSUs will vest on an accelerated, pro-rata basis as of the Date of Termination and will be settled in Company shares or otherwise paid within sixty-five (65) days after the Date of Termination (subject to Section 409A and applicable tax rules and regulations) as follows: the number of RSUs that will so vest under each such RSU award will be equal to the product of (A) the total number of RSUs subject to such RSU Award, multiplied by (B) a fraction, (i) the numerator of which is equal to the number of days in the vesting period for such RSU award during which Participant was employed by the Company, and (ii) the denominator of which is the total number of days in the vesting period for such RSU award (such product will be rounded to the nearest whole unit); and
(ii)such RSUs will otherwise remain subject to the other terms and conditions of the applicable Award agreements and Incentive Plans governing such RSUs.
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5.Certain Reduction of Payments by the Company.
(a)Notwithstanding any provision of this Plan to the contrary, in the event that any payment or distribution by the Company to a Participant or for the Participant’s benefit (whether paid or payable or distributed or distributable pursuant to the terms of this Plan or otherwise) (the “Total Payments”) would be subject to the excise tax imposed by Code Section 4999 (or any successor provision thereto) by reason of being considered “contingent on a change in ownership or control” of the Company within the meaning of Code Section 280G (or any successor provision thereto) or to any similar tax imposed by state or local law, or any interest or penalties are incurred by the Participant with respect to such tax (such tax or taxes, together with any such interest and penalties, being hereafter collectively referred to as the “Excise Tax”), then the Total Payments shall be reduced to the minimum extent necessary so that no amount of the Total Payments is subject to the Excise Tax (such amount, the “Reduced Amount”); provided, however, that the Total Payments shall not be so reduced if a nationally recognized accounting firm or other tax professional selected by the Company (the “Accounting Firm”) determines that, without such reduction, the Participant would be entitled to receive and retain, on a net after-tax basis (including, without limitation, any excise taxes payable under Code Section 4999, federal, state, and local income taxes, social security and Medicare taxes and all other applicable taxes, determined by applying the highest marginal income tax rate applicable to individuals under the Code in the calendar year in which the change in ownership or control of the Company occurs, and state and local income taxes at the highest marginal rate of taxation in the state and locality of the Participant’s residence on the effective date of such change in ownership or control of the Company, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes, taking into account the reduction in itemized deduction under Code Section 68), an amount that is greater than the amount, on a net after-tax basis (determined in the same manner), that the Participant would be entitled to retain upon receipt of the Reduced Amount.
(b)Unless the Company and the Participant otherwise agree in writing, any determination required under this Section 5 shall be made in good faith by the Accounting Firm in a timely manner and shall be binding on the parties absent manifest error. The Accounting Firm shall provide detailed supporting calculations both to the Company and the Participant. Fees and expenses of the Accounting Firm and any other advisers retained by the Company to assist the Accounting Firm shall be borne solely by the Company. The fact that the Participant’s right to payments or benefits may be reduced by reason of the limitations contained in this Section 5 will not of itself limit or otherwise affect any other rights of the Participant other than pursuant to this Plan. In the event that any payment or benefit intended to be provided under this Plan or otherwise is required to be reduced pursuant to this Section 5, the Company will reduce the Participant’s payment and/or benefits, to the extent required, in the following order (but, in each case, only the portion thereof, if any, that has been determined by the Accounting Firm to be an “Excess Parachute Payment” within the meaning of Code Section 280G): (i) any cash payments and Bonus payments; (ii) payments (including any acceleration of vesting or payments) under equity incentive awards where the full amount of such payments is treated as a parachute payment under the regulations under Code Section 280G; (iii) payments (including
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any acceleration of vesting or payments) under equity incentive awards where less than the full amount of such payments is treated as a parachute payment under the regulations under Code Section 280G, and (iv) any non-cash, non-equity based benefits. Within any category of payments and benefits: (A) a reduction will occur first with respect to amounts that are not nonqualified deferred compensation within the meaning of Code Section 409A and then with respect to amounts that are; and (B) the payment and/or benefit amounts (including the acceleration of vesting or payments) to be reduced, if applicable, shall be reduced in the inverse order of their originally scheduled dates of payment or vesting, as applicable. Such payments or benefits shall be reduced in a manner that maximizes the Participant’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Code Section 409A. The Company and the Participant shall furnish to the Accounting Firm such information and documents as the Accounting Firm may reasonably require in order to make a determination under this Section 5. The Company and the Participant shall cooperate with the Participant in good faith in valuing, and the Company shall retain an adviser (which may be the Accounting Firm) to value services to be provided by the Participant (including the Participant refraining from performing services pursuant to a covenant not to compete) before, on, or after the date of the transaction which causes the application of Code Section 280G such that Total Payments in respect of such services may be considered to be “reasonable compensation” within the meaning of the regulations under Code Section 280G.
6.Conditions to Receipt of Severance Payments and Benefits; Forfeiture and Repayment Obligations.
(a)Conditions to Receipt of Payments; Participant Obligations. The following requirements must be met by a Participant as a condition to the right to receive, continue to receive, or retain any Severance Payments and Benefits under this Plan:
(i)If requested by the Company, the Participant shall enter into a restrictive covenant agreement, in a form acceptable to the Company, providing for reasonable restrictions (if any) on certain actions by the Participant for up to a two-year period after the Date of Termination or such other time period as may be set forth in a written agreement between the Participant and the Company. Notwithstanding anything in this Plan or otherwise to the contrary, nothing in this Plan or otherwise (A) limits the Participant’s right to any monetary award offered by a government-administered whistleblower award program for providing information directly to a government agency (including the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Sarbanes-Oxley Act of 2002) or (B) prevents the Participant from providing, without prior notice to the Company, information (including documents) to governmental authorities regarding possible legal violations or otherwise testifying or participating in any investigation or proceeding by any governmental authorities regarding possible legal violations, and for purpose of clarity, no Participant is prohibited from providing information (including documents) voluntarily to the Securities and Exchange Commission pursuant to Section 21F of the Exchange Act. The Company nonetheless asserts and does not waive its attorney-client privilege over any information appropriately protected by privilege.
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(ii)The Participant shall cooperate with the Company by making himself or herself reasonably available to testify on behalf of the Company in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and shall not otherwise fail to reasonably assist the Company in any such action, suit, or proceeding by providing information and meeting and consulting with members of management of, other representatives of, or counsel to, the Company, as reasonably requested.
(iii)The Participant shall not (nor shall have), during the period of employment, engage in willful misconduct or violation of a Company Policy that is materially detrimental to the Company or in any action or inaction that would constitute grounds for being terminated for Cause, as determined by the Committee in its sole discretion.
(b)Forfeiture and Repayment Obligations.
(i)If the Company determines that a Participant has failed to comply with his or her obligations, arising under either any agreement with the Company or any Company Policy, whether during his or her term of employment (and such failure would have constituted “Cause”) or subsequent to the Date of Termination (including, without limitation, the restrictive covenant agreement set forth in Section 6(a) or the Release set forth in Section 6(c)) (a “Forfeiture Event”), the Participant will forfeit or repay, as the case may be, all Severance Payments and Benefits, whether vested or unvested, paid or unpaid, in each case, that were settled, paid or provided to the Participant under this Plan, and the Company shall have no further obligation to pay, grant, settle, make, provide or continue to make or provide any Severance Payments and Benefits to the Participant under this Plan. Any such forfeiture or repayment shall not relieve the Participant of any of his or her obligations hereunder.
(ii)For the avoidance of doubt, Severance Payments and Benefits subject to the forfeiture and repayment obligations under this Section 6 shall include any unvested Award, and any amounts paid to the Participant on settlement or vesting of an Award but shall not include (A) any earned and unpaid base salary payable through the Participant’s Date of Termination, (B) any payment for accrued paid time-off, (C) any unreimbursed business expenses reimbursable under Company policies then in effect, and (D) any amount paid by the Participant to the Company as a condition of or in connection with settlement of a forfeited Award.
(iii)Any policy or policies of the Company providing for forfeiture or recoupment of compensation, including in any Incentive Plan, shall apply by its terms and shall not be deemed limited in any way by this Section 6 or any other provision of this Plan. In particular, notwithstanding anything in this Plan to the contrary, by participating in this Plan and accepting any Severance Payments and Benefits hereunder, the Participant acknowledges and agrees that this Plan and any compensation or other benefits or amounts described herein (and any settlements thereof) are subject to the terms and conditions of the Company’s Compensation Recovery Policy (or any similar clawback policy or policies applicable to the Participant) that may be in effect from time to time, including, without limitation, to implement Section 10D of the Exchange Act, as amended, and any applicable rules or regulations promulgated thereunder
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(including applicable rules and regulations of any national securities exchange on which the Company’s securities may be traded) (collectively, the “Compensation Recovery Policy”), and that, to the extent the Compensation Recovery Policy, by its terms, so applies, applicable sections of this Plan and/or any related documents shall be (if necessary) deemed superseded by and subject to the terms and conditions of the Compensation Recovery Policy from and after the effective date thereof. Further, by accepting participation in this Plan, each Participant agrees (or has agreed) to fully cooperate with and assist the Company in connection with any of such Participant’s obligations to the Company pursuant to the Compensation Recovery Policy, and agrees (or has agreed) that the Company may enforce its rights under the Compensation Recovery Policy through any and all reasonable means permitted under applicable law as it deems necessary or desirable under the Compensation Recovery Policy, in each case from and after the effective dates thereof. Such cooperation and assistance shall include, but is not limited to, executing, completing and submitting any documentation necessary to facilitate the recovery or recoupment by the Company from such Participant of any such amounts, including from such Participant’s accounts or from any other compensation, to the extent permissible under Code Section 409A.
(iv)Otherwise, any clawback or recoupment provisions required by law, including under the Dodd‑Frank Wall Street Reform and Consumer Protection Act or any rules or regulations thereunder, shall apply to the Severance Payments and Benefits paid or payable under this Plan.
(v)Any Severance Payments and Benefits (A) subject to repayment by the Participant under this Section 6 must be repaid to the Company, in the manner and on such terms and conditions as shall be required by the Company by written notice to the Participant and (B) subject to forfeiture will be forfeited immediately upon written notice to the Participant from the Company.
(c)Participant Obligation to Execute Release.
(i)Notwithstanding any provision herein to the contrary, the Company will have no obligation to provide any Severance Payments and Benefits (other than the Accrued Obligations) unless (A) within 60 days, or such shorter period as designated by the Company, following the Date of Termination of the Participant’s employment, the Participant executes and delivers to the Company a waiver and release of claims in favor of the Company and each Subsidiary and Affiliate and their respective officers, directors, employees and agents in the form prepared and presented by the Company from time to time (the “Release”) and (B) any applicable revocation period for such Release has expired during the 60-day period following the Participant’s Date of Termination (such period, the “Release Period”) without the Participant revoking such execution of such Release.
(ii)Any Severance Payments and Benefits that would otherwise have been made to a Participant during the Release Period but that are conditioned upon the execution and effectiveness of the Release shall be paid or provided on the next regularly administered pay period following the effectiveness of the applicable Release; provided that if the Release Period
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begins in one calendar year and ends in a second calendar year, any such Severance Payments and Benefits that are subject to Code Section 409A shall instead be paid in the second calendar year, subject to the execution and effectiveness of the Release. Notwithstanding the foregoing, any Severance Payments and Benefits that are in‑kind benefits provided pursuant to this Plan shall continue in effect after the Date of Termination pending the execution and delivery of the Release, but if the Release is not executed within the Release Period or is revoked during any revocation period, such in-kind benefits shall terminate immediately and the Participant shall reimburse the Company for the full cost of providing such in-kind benefits.
(d)No Limitation of Rights. Any forfeiture or repayment under this Section 6 is in addition to, and not in lieu of, any other remedies or rights that may be available to the Company under applicable law.
(e)Committee Discretion. The Committee shall have the authority, in its sole discretion, to interpret and construe the provisions of this Section 6 and to make all determinations with respect hereto, including the determination of whether a Forfeiture Event has occurred, the timing of such Forfeiture Event and the amount and form of any forfeiture or reimbursement.
7.Other Provisions Applicable to Severance Payments and Benefits.
(a)Deferrals Included in Salary and Bonus. All references in this Plan to salary and Bonus mean those amounts before reduction pursuant to any deferred compensation plan or agreement.
(b)Payments and Benefits to Beneficiary Upon Participant’s Death. In the event of the death of a Participant, all payments and benefits hereunder due to such Participant shall be paid or provided to his or her Beneficiary.
(c)Transfers of Employment. Notwithstanding anything in this Plan to the contrary, a transfer of employment from the Company to a Subsidiary or an Affiliate or vice versa shall not be considered a termination of employment for purposes of this Plan.
(d)Right of Setoff. The Company may, to the extent permitted by applicable law and consistent with Code Section 409A, deduct from and set off against any amounts the Company may owe to the Participant from time to time, including amounts payable in connection with any Severance Payments and Benefits, amounts payable in connection with any Award, owed as wages, fringe benefits, or other compensation owed to the Participant, such amounts as may be owed by the Participant to the Company, including but not limited to amounts owed under Section 6, although the Participant shall remain liable for any part of the Participant’s payment obligation not satisfied through such deduction and setoff. By accepting the Severance Payments and Benefits under this Plan, the Participant agrees to any deduction or setoff under this Section 7(d).
8.Other Plans and Policies; Non-Duplication of Payments or Benefits.
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(a)Superseded Agreements and Rights. This Plan and the documents referred to herein constitute the entire understanding between the Company and the Participant relating to Severance Payments and Benefits to be paid or provided to the Participant by the Company, and to the extent necessary or applicable supersede and cancel all prior agreements and understandings with respect to the subject matter of this Plan, other than (i) as expressly set forth in this Plan, (ii) as determined in writing by the Committee, or (iii) as expressly provided in a plan, program or arrangement of the Company which is established following the Effective Date and in which the Participant participates.
(b)Non‑Duplication of Payments and Benefits; Errors in Payment. The Participant shall not be entitled to any severance payment or benefit under this Plan which duplicates a payment or benefit received or receivable by the Participant under any employment or severance agreement, or any other plan, program or arrangement of the Company or any severance required by applicable law, regulation, sound business practices and customs. Payments made to the Participant under this Plan in error shall be returned to the Company and do not create a legally binding right to such payments.
9.Special Rules for Compliance with Code Section 409A. This Section 9 serves to help ensure compliance with applicable requirements of Code Section 409A. If the terms of this Section 9 conflict with other terms of this Plan, the terms of this Section 9 shall control.
(a)It is intended that all payments made pursuant to this Plan shall be exempt from Code Section 409A or otherwise comply with Code Section 409A and this Plan shall be interpreted and administered in a manner consistent with this intent.
(b)Notwithstanding any provisions in this Plan to the contrary, if at the time of the Participant’s separation from service within the meaning of Code Section 409A, the Participant is a “specified employee” (within the meaning of Code Section 409A and determined pursuant to policies adopted by the Company), then to the extent any payment or benefit that the Participant becomes entitled to under this Plan on account of the Participant’s “separation from service” (within the meaning of Code Section 409A) would be considered deferred compensation under Code Section 409A, amounts of such deferred compensation that would otherwise be payable pursuant to this Plan during the 6-month period immediately following the Participant’s separation from service (such payments, the “Delayed Payments”; such period the “Delay Period”) and benefits that constitute deferred compensation that would otherwise be provided pursuant to this Plan during the Delay Period (the “Delayed Benefits”) will instead be paid or made available on the earlier of (i) the first business day of the seventh month following the Participant’s separation from service and (ii) the Participant’s death. If any Delayed Payment is otherwise payable on an installment basis, the first payment shall include a catch-up payment covering amounts that would otherwise have been paid during the Delay Period but for the application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.
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(c)Each payment made under this Plan shall be treated as a separate payment and not one of a series of payments for purposes of Code Section 409A. Further, coverages provided during one taxable year will not affect the degree to which coverages will be provided in any other taxable year.
(d)To the extent that any payment or benefit described in this Plan constitutes “non-qualified deferred compensation” under Code Section 409A, and to the extent that such payment or benefit is payable upon the Participant’s termination of employment, then such payments or benefits shall be payable only upon the Participant’s “separation from service”. The determination of whether and when a separation from service has occurred shall be made in accordance with the presumptions set forth in Code Section 409A.
(e)In no event will a reimbursement under this Plan, if any, be made for any period after December 31 of the second calendar year following the Date of Termination. If any reimbursements (if any) or in-kind benefits provided by the Company pursuant to this Plan would constitute deferred compensation for purposes of Code Section 409A, such reimbursements or in-kind benefits will be subject to the following rules: (i) the amounts to be reimbursed, or the in-kind benefits to be provided, will be determined pursuant to the terms of this Plan and the Company’s policies and will be limited to Participant’s lifetime and the lifetime of Participant’s eligible dependents; (ii) the amounts eligible for reimbursement, or the in-kind benefits provided, during any calendar year may not affect the expenses eligible for reimbursement, or the in-kind benefits provided, in any other calendar year; (iii) any reimbursement of an eligible expense will be made on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iv) Participant’s right to an in-kind benefit or reimbursement is not subject to liquidation or exchange for cash or another benefit.
10.Administration; Claims Procedure. Subject to Section 11(e) hereof, this Plan shall be interpreted, administered and operated by the Committee, which shall have complete authority, subject to the express provisions of this Plan, to interpret this Plan (including, without limitation, by supplying omissions from, correcting deficiencies in, or resolving inconsistencies or ambiguities in, the language of this Plan), to prescribe, amend and rescind rules and regulations relating to this Plan, to make findings (including factual findings) with respect to any issue arising under this Plan, to determine the rights and status under this Plan of Participants, Beneficiaries or other persons, to resolve questions (including factual questions) or disputes arising under this Plan, and to make all other determinations necessary or advisable for the administration of this Plan. The Committee may delegate any of its duties hereunder to a subcommittee, or to such Person or Persons from time to time as it may designate. All decisions, interpretations and other actions of the Committee shall be final, conclusive and binding on all parties who have an interest in this Plan. No member of the Committee, nor any person acting pursuant to authority delegated by the Committee, shall be liable for any action, omission, or determination relating to this Plan, and the Company shall, to the fullest extent permitted by law, indemnify and hold harmless each member of the Committee and each person to whom any duty or power relating to the administration or interpretation of this Plan has been delegated, against any cost or liability arising out of any action, omission or determination relating to this Plan,
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unless, in either case, such action, omission, or determination was taken or made by such member or other person acting pursuant to authority delegated by the Committee in bad faith and without reasonable belief that it was in the best interests of the Company. Claims for benefits under the Plan shall be processed in accordance with the procedures set forth below.
(a)For purposes of this Section 10, “Committee” shall mean the Committee or, to the extent permitted by applicable law and stock exchange requirements, its delegate. The Committee has the exclusive right to determine eligibility for benefits under the Plan and to deny or grant a claim, in whole or in part. All claim determinations shall be made by the Committee in a uniform and nondiscriminatory manner in accordance with the Plan provisions. The Committee’s decision on a claim for benefits is final and binding on all persons.
(b)Any Participant or the Participant’s authorized representative who believes the Participant may be eligible for benefits under this Plan may file a claim for benefits to which the claimant believes he or she is entitled. Claims under this Plan must be made in writing and delivered to the Committee, in person or by mail, postage prepaid. When a claim has been properly filed, the Committee shall, within 90 days after receipt of such claim, send to the claimant notice of the grant or denial, in whole or in part, of such claim unless special circumstances require an extension of time for processing the claim. In no event may the extension exceed 90 days from the end of the initial period. If such extension is necessary, the claimant will be given notice to this effect prior to the expiration of the initial 90-day period. Any notice of extension shall set forth the special circumstances requiring the extension of time and the date by which the Committee expects to render its decision on the application for benefits.
(c)The Committee will provide the claimant with written notice in which the claimant shall be advised as to whether the claim is granted or denied, in whole or in part. If a claim is denied, in whole or in part, the notice shall contain: (i) the specific reasons for the denial; (ii) references to pertinent Plan provisions on which the denial is based; (iii) a description of any additional material or information necessary to perfect the claim and an explanation of why such material or information is necessary; and (iv) an explanation of the Plan’s claim review procedure, the time limits applicable under the procedures, and a statement regarding the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following an adverse benefit determination on appeal.
(d)If a claim is denied, in whole or in part, the claimant shall have the right to request that the Committee review the denial, provided that the claimant files a written request for review with the Committee no later than 60 days after the date on which the claimant received written notification of the denial. The request for a review shall be in writing and shall be addressed to the Committee at the Company’s principal office. The request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters which the claimant deems pertinent. The Committee may require the claimant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review. The claimant may submit written comments, documents, records and other
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information related to the benefit claim on appeal. The claimant must be provided, upon request and free of charge, reasonable access to and copies of any and all records, documents or information on which the Committee based its determination (the “Relevant Records”).
(e)The Committee will provide the claimant with written notification of the benefit determination on review within 60 days after a request for review is received, unless special circumstances require an extension of time for processing the review, in which case the Committee shall give the claimant written notification within the initial 60-day period specifying the reasons for the extension and when such review shall be completed (provided that such review shall be completed within 120 days after the date on which the request for review was filed). If the Committee denies the claim on review, in whole or in part, the notification will set forth, in a manner calculated to be understood by the claimant: (i) the specific reason or reasons for the denial; (ii) specific references to the Plan provisions on which the denial is based; (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all Relevant Records; and (iv) a description of the claimant’s right to obtain information about such procedures and a statement regarding the claimant’s right to bring a civil action under Section 502(a) of the Employee Retirement Income Security Act of 1974, as amended (if applicable) following the denial on appeal.
11.Miscellaneous.
(a)Assignment; Non‑Transferability. No right of a Participant to any payment or benefit under this Plan shall be subject to assignment, anticipation, alienation, sale, transfer, pledge, encumbrance, attachment, or garnishment by creditors of the Participant or of any Beneficiary of the Participant. The terms and conditions of this Plan shall be binding on the successors and assigns of the Company. The Company’s Subsidiaries and Affiliates are third party beneficiaries to this Plan and to the extent any violation of this Plan shall cause them direct harm, they shall have a right to enforce this Plan and any related agreements in accordance with their respective terms.
(b)Withholding. The Company shall have the right to deduct from all payments hereunder any taxes, deductions or withholdings required by law to be withheld therefrom. Notwithstanding any other provision of this Plan, the Company shall not be obligated to guarantee any particular tax result for a Participant with respect to any payment or benefit provided to the Participant hereunder, and the Participant shall be responsible for any taxes imposed on the Participant with respect to any such payment or benefit.
(c)No Right to Employment. Nothing in this Plan shall be construed as altering the Participant’s status as an employee at-will or giving any person the right to be retained in the employment of the Company or its Subsidiaries or Affiliates, nor shall it affect the right of the Company to dismiss a Participant without any liability except as provided in this Plan.
(d)Amendment and Termination. The Board may amend or terminate this Plan at any time; provided, however, that no such amendment or termination may adversely
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affect any Participant without such Participant’s prior written consent unless the Company provides at least four months’ advance written notice of such amendment or termination to such adversely-affected Participant.
(e)Governing Law. The validity and effect of this Plan shall be governed by and construed and enforced in accordance with the laws of the State of Minnesota, without regard to any conflict-of-law rule or principle that would give effect to the laws of another jurisdiction. Any dispute, controversy, or question of interpretation arising under, out of, in connection with, or in relation to this Plan or any amendments hereof, or any breach or default hereunder, shall be submitted to, and determined and settled by, litigation in the state or federal courts in Minnesota. The Participant and the Company hereby irrevocably submit to the exclusive jurisdiction of the state and federal courts sitting in Minnesota. Each of the Participant and the Company hereby irrevocably waives, to the fullest extent it may effectively do so, the defense of an inconvenient forum to the maintenance of any litigation in Minnesota.
(f)No Duty to Mitigate. No Participant shall be required to mitigate, by seeking employment or otherwise, the amount of any payment that the Company or its Subsidiaries becomes obligated to make under this Plan, and, except as expressly provided in this Plan, amounts or other benefits to be paid or provided to a Participant pursuant to this Plan shall not be reduced by reason of the Participant’s obtaining other employment or receiving similar payments or benefits from another employer.
(g)Participants Outside the United States. The Committee may modify the terms and conditions of participation of any Participant who is then resident or primarily employed outside the United States or is subject to taxation by a non‑U.S. jurisdiction in any manner deemed by the Committee to be necessary or appropriate in order that such terms and conditions shall conform to the laws, regulations, sound business practices or customs of the country in which the Participant is then resident or primarily employed.
(h)Effect of Invalidity of Provision. If any provision contained in this Plan, or any part thereof, is construed to be invalid or unenforceable, the same shall not affect the remainder of the provisions, which shall be given full effect, without regard to the invalid portions, and any court having jurisdiction shall have the power to reduce the duration, scope and/or area of such provisions and, in its reduced form, said provision shall then be enforceable.
(i)Legal Fees. In the event of a dispute by the Company, a Participant or others as to the validity or enforceability of, or liability under, any provision of this Plan, the Company shall reimburse the Participant for all reasonable legal fees and expenses incurred by the Participant if the Participant prevails on the merits in the dispute resolution process, and if the Participant does not so prevail, the Participant and the Company shall be responsible for their respective legal fees and expenses.
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EXHIBIT A
I acknowledge and agree that: (1) I have been designated as a Participant under the Hormel Foods Corporation Executive Severance Plan (as amended or amended and restated from time to time, the “Plan”), (2) any payment, rights or benefits under the Plan are subject to all of the terms and conditions of the Plan, (3) I consent to be bound by the terms of the Plan, including, but not limited to, its clawback provisions (and consent to fully cooperate with Hormel Foods Corporation (the “Company”) in connection with any of my obligations pursuant to the Plan), and (4) this acknowledgement (“Acknowledgement”) and the Plan (together with those agreements and documents expressly referred to herein and therein, specifically for the purposes referred to herein) constitute the entire agreement between me and the Company regarding the subject matter hereof and thereof.
Participant: By: Name: Title: Date: | ||||||||
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SCHEDULE OF PARTICIPANTS AND SEVERANCE FACTORS
Participant Tier (By Name or Title) | Severance Factor | ||||
Chief Executive Officer | 2 times | ||||
Positions designated by the Compensation Committee as members of the Company’s Senior Leadership Team | 1 times | ||||
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