EXHIBIT
10.2
Smithfield Foods,
Inc.
2008 Incentive
Compensation Plan
Performance Share
Unit Award
You have been selected to
receive a Performance Share Unit Award under the Smithfield Foods,
Inc. 2008 Incentive Compensation Plan (the “Plan”), as
specified below:
Participant
:______________________________________________________________
Address
:
______________________________________________________________
Number of Performance
Share Units Units :
_____________________________________
Performance
Period :
Fiscal Years _____________
Performance
Measure: Profits Before Tax (as defined below)
THIS AGREEMENT, effective
on ____________ (the “Date of Grant”), represents the
grant of Performance Share Units by Smithfield Foods, Inc., a
Virginia corporation (the “Company”), to the
Participant named above, pursuant to the provisions of the
Plan. All capitalized terms shall have the meanings in
the Plan. The parties agree as follows:
1. Performance
Period . The Performance Period is the Company’s Fiscal
Years ending in ________________.
2. Value of
Performance Share Units . Each Performance Share Unit shall
represent and have a value equal to one share of Company Stock,
subject to adjustment as provided in Section 16 of the
Plan.
3. Achievement of
Profits Before Tax and Vesting . Subject to the remaining terms
and conditions of this Agreement, the number of Performance Share
Units to be vested under this Award shall be based upon the
Company’s Profits Before Tax (as defined below) during each
Fiscal Year (as defined below) during the Performance
Period.
For any Performance Share
Unit to vest, the Company must achieve Profits Before Tax of at
least ______________ Dollars ($__________) in any one of the
Company’s Fiscal Years during the Performance Period (the
“Performance Target”) as determined by the Compensation
Committee.
If the Performance Target
is met, the Performance Share Units shall vest according to the
following schedule:
|
Vesting
Dates
|
Percentage
Vested
|
|
[one year from Date of
Grant]
|
33%
|
|
[two years from Date of
Grant]
|
67%
|
|
[three years from Date
of Grant]
|
100%
|
Profit Before Tax is the
net income before deduction for income taxes of the Company as a
whole. A Fiscal Year is the fiscal year used by the
Company for accounting purposes.
4. Termination
Provisions . Except as provided in the next paragraph, the
Participant shall be eligible for vesting and payment of earned
Performance Share Units, as specified in Section 3, only if the
Participant’s employment with the Company continues through
the Vesting Date and the Performance Target has been
achieved.
If the Participant
suffers a Disability or dies, or in the event of the
Participant’s Retirement, the requirement that the
Participant be employed by the Company through the Vesting Date is
waived. In that case, the Participant (or in the event
of the Participant’s death, the Participant’s
beneficiary) shall be vested in a pro rata portion of the number of
Performance Share Units equal to the number of full months of
employment since the Date of Grant divided by thirty-six (36),
subject to the achievement of the Performance Target.
In the event of the
termination of the Participant’s employment by the
Participant or the Company for any reason other than the
Participant’s Disability or death during the Performance
Period, the Participant shall forfeit any unvested portion of this
Award, with no payment to the Participant. The
Participant’s transfer of employment to the Company or any
Related Company from another Related Company or the Company during
the Performance Period shall not constitute a termination of
employment.
5. Dividends . The
Participant shall have no right to any dividends which may be
paid
