EXHIBIT 10.1
SMITHFIELD FOODS,
INC.
2005 NON-EMPLOYEE DIRECTORS STOCK
INCENTIVE PLAN
1. Purpose.
The Smithfield Foods, Inc. 2005
Non-Employee Directors Stock Incentive Plan (the
“Plan”) provides a mechanism for the Board of Directors
of Smithfield Foods, Inc. to pay its non-employee directors in
Smithfield Foods common stock. It also allows such directors to
defer receipt of compensation until a future date, if desired. The
Plan is intended to constitute a deferred compensation plan for
Non-Employee Director’s fees and to meet the requirements of
Section 409A of the Internal Revenue Code
(“Code”).
2. Definitions.
As used in the Plan, the following
terms have the meanings indicated:
(a) “ Accounts ”
means the Deferred Stock Account and Fees Account
collectively.
(b) “ Annual Meeting
” means the annual meeting of shareholders at which members
of the Board are routinely elected.
(c) “ Board ”
means the Board of Directors of the Company.
(d) “ Change in Control
” means the occurrence of any of the following events which
is also a “change in control” for purposes of Code
section 409A:
(i) The acquisition, other than from
the Company, by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended), of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Securities Exchange Act of 1934)
of 20% or more of either the then outstanding shares of Common
Stock of the Company or the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors, but excluding for this
purpose, any such acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of
the Company or its subsidiaries, or any corporation with respect to
which, following such acquisition, more than 50% of, respectively,
the then outstanding shares of Common Stock of such corporation and
the combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by
the individuals and entities who were the beneficial owners,
respectively, of the Common Stock and voting securities of the
Company immediately prior to such acquisition in substantially the
same proportion as their ownership, immediately prior to such
acquisition, of the then outstanding shares of Common Stock of the
Company or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the
election of directors, as the case may be; or
(ii) Individuals who, as of the date
hereof, constitute the Board (as of the date hereof the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by the Company’s stockholders was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the
Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened contest
relating to the election of the directors of the Company;
or
(iii) Approval by the stockholders
of the Company of a reorganization, merger or consolidation, in
each case, with respect to which the individuals and entities who
were the respective beneficial owners of the Common Stock and
voting securities of the Company immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own, directly
or indirectly, more than 50% of, respectively, the then outstanding
shares of Common Stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such reorganization, merger or consolidation, or of
a complete liquidation or dissolution of the Company or of a sale
or other disposition of all or substantially all of the assets of
the Company; provided that, if any Code provision provides a
specific definition of a change in control or similar term for
purposes of taxation of deferred compensation, the event must also
qualify as a change in control or similar term for purposes of the
Code.
(e) “ Code ”
means the Internal Revenue Code of 1986, as amended.
(f) “ Committee ”
means the Nominating and Governance Committee of the Board of
Directors of the Company.
(g) “ Company ”
means Smithfield Foods, Inc., or any successor business by merger,
purchase or otherwise that maintains the Plan.
(h) “ Company Stock
” means the common stock of Smithfield Foods, Inc. In the
event of a change in the capital structure of the Company, the
shares resulting from such a change shall be deemed to be the
Company Stock (as provided in Section 14) within the meaning of the
Plan.
(i) “ Deferred Stock
Grant ” means an award of Stock Units made in accordance
with Section 5.
(j) “ Deferred Stock
Account ” means the bookkeeping account for the Deferred
Stock Grants and any adjustments thereto.
(k) “ Deemed
Investments ” has the meaning provided in Section
8(a).
(l) “ Effective Date
” means January 19, 2005, provided that the Plan receives
shareholder approval.
(m) “ Fair Market Value
” means the closing price of a share of Company Stock, as
reported in the Wall Street Journal , on a specified
date.
(n) “ Fees ”
means the cash retainer fees and meeting fees for a Non-Employee
Director in connection with his or her service on the Board for any
Plan Year.
(o) “ Fees Account
” means the bookkeeping account for any deferred Fees and any
adjustments thereto.
(p) “ Non-Employee
Director ” means a member of the Company’s Board
who is not an employee of the Company or any subsidiary of the
Company.
(q) “ Non-Employee Director
Deferral Plan ” means the Smithfield Foods, Inc.
Non-Employee Director Deferral Plan, effective September 1,
2004.
(r) “ Plan Year ”
means a calendar year, provided that the first Plan Year shall be
from the Effective Date until December 31, 2005.
(s) “ Restricted Stock
” means Company Stock awarded upon the terms and subject to
the restrictions set forth in Section 11.
(t) “ Separation from
Service ” is intended to have the same meaning as this
term is defined under Code section 409A and the regulations
thereunder.
(u) “ Stock Unit
” means a hypothetical share of Company Stock. Each Stock
Unit held in a Deferred Stock Account or Fees Account shall be
deemed to have the same value, from time to time, as a share of
Company Stock, provided that Stock Units shall not confer upon any
Non-Employee Director any of the rights associated with Company
Stock, including, without limitation, the right to vote or to
receive distributions.
(v) “ Trust ”
means a trust created for the purposes specified in Section
10.
3. Participation in the
Plan.
(a) Deferred Stock Grant. At
such times as approved by the Board, each Non-Employee Director
shall receive a Deferred Stock Grant. The terms and conditions of
the Deferred Stock Grants are provided in Section 5.
(b) Fees . For service during
a Plan Year, a Non-Employee Director may elect to defer the receipt
of Fees as provided in Section 6.
(c) Restricted Stock . The
Board may authorize the issuance of Restricted Stock as provided in
Section 11 as compensation to a Non-Employee Director as it
determines appropriate, to the extent consistent with any legal or
regulatory requirements.
4. Stock Reserved for the
Plan.
The aggregate number of shares of
Company Stock authorized for distribution to Non-Employee Directors
under Section 3 is 300,000, subject to adjustment pursuant to
Section 14.
5. Deferred Stock
Grant.
The Deferred Stock Grant shall be
made to Non-Employee Directors subject to the following
provisions:
(a) The amount of any Deferred Stock
Grant shall be the number of Stock Units determined by the Board
from time to time. Initially, the Deferred Stock Grant shall be
1,000 Stock Units for each Non-Employee Director to be made
immediately after each Annual Meeting. The Board may modify the
amount or timing of a Deferred Stock Grant at any time and may
establish a policy as to Deferred Stock Grants that may continue
until changed by the Board.
(b) The Company shall credit the
appropriate number of Stock Units resulting from the Deferred Stock
Grant to the Director’s Deferred Stock Account.
(c) In addition to the Deferred
Stock Grant to be made at the 2005 Annual Meeting, there shall be
an initial Deferred Stock Grant as of the Effective Date of 1,000
Stock Units for each Non-Employee Director.
6. Fee Deferrals.
(a) A Non-Employee Director may
elect to defer the payment of 25%, 50%, 75% or 100% of the Fees
that would otherwise be payable in cash by completing a deferral
election. A deferral election must specify the applicable
percentage of Fees that the Non-Employee Director wishes to defer.
A deferral election shall pertain to all Fees payable in cash
during a Plan Year.
(b) A deferral election must be in
writing and be delivered to the Company prior to the start of the
Plan Year to which it pertains, provided that a deferral election
made under the Non-Employee Director Deferral Plan with respect
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