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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:
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Participant:
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Address:
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Number of Performance Share Units Units:
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Performance Period:
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June 17, 2008 to June 16,
2013
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Performance Measure:
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Average Stock Price (as defined below)
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THIS AGREEMENT, effective on the date of
shareholder approval of the Plan, 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 commenced
on June 17, 2008 (the "Grant Date") and will end on
June 16, 2013.
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. Performance Share Units and Achievement of Average Stock
Price . 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 Average Stock
Price (as defined below) during each Quarter (as defined below)
during the Performance Period under the table below:
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Average Stock
Price
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Percentage
Vested
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$26.00
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20%
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$32.00
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20%
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$38.00
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20%
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$44.00
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20%
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$50.00
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20%
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The Average Stock Price shall be the
volume-weighted average of the closing price of Company Stock
calculated by adding up the closing price of Company Stock
multiplied by the number of shares traded for each day in the
Calculation Period and then dividing by the total shares traded for
the Calculation Period. The Calculation Period is each fifteen
(15) consecutive trading days during a Quarter. A Quarter is
each fiscal quarter of the Company or portion of a fiscal quarter
of the Company occurring within the Performance Period.
If the Average Stock Price during a Quarter
exceeds one or more price thresholds, the percentage of the
Performance Share Units to be vested under the table above will be
vested on the next Payment Date. Except as provided in
Section 11(a) below and in the following sentence, the Payment
Date shall be the fifteenth (15 th ) trading day after the end
of each Quarter. Notwithstanding the foregoing, the Payment Date,
if any, with respect to each Quarter ending on or prior to the
first anniversary of the Grant Date shall be the thirtieth
(30 th ) day following the first anniversary of the Grant
Date.
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 Payment Date.
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 Payment Date is
waived. In such a case, the Participant (or in the event of the
Participant’s death, the Participant’s beneficiary)
shall be eligible for a pro rata portion of the number of
Performance Share Units vested under Section 3 (determined as
of each Payment Date and based on actual Average Stock Price) equal
to his number of full months of employment during the Performance
Period divided by sixty (60). Vesting and payment shall be made on
the relevant Payment Date.
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 with respect to shares of Comp
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