-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, An3QohD+Jv7geL0lw1vHKh/wnNKSG97lrC27EcNKCYfdoG8obJC/kywN/lx8rPzr tRPzp1qCR4EQda96UPu8SA== 0000900440-05-000066.txt : 20050907 0000900440-05-000066.hdr.sgml : 20050907 20050907171139 ACCESSION NUMBER: 0000900440-05-000066 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050907 ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONAGRA FOODS INC /DE/ CENTRAL INDEX KEY: 0000023217 STANDARD INDUSTRIAL CLASSIFICATION: FOOD & KINDRED PRODUCTS [2000] IRS NUMBER: 470248710 STATE OF INCORPORATION: DE FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-07275 FILM NUMBER: 051073430 BUSINESS ADDRESS: STREET 1: ONE CONAGRA DR CITY: OMAHA STATE: NE ZIP: 68102 BUSINESS PHONE: 4025954000 MAIL ADDRESS: STREET 1: ONE CONAGRA DRIVE CITY: OMAHA STATE: NE ZIP: 68102 FORMER COMPANY: FORMER CONFORMED NAME: CONAGRA INC /DE/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: NEBRASKA CONSOLIDATED MILLS CO DATE OF NAME CHANGE: 19721201 8-K 1 iss8k.txt SEPTEMBER 7, 2005 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 September 7, 2005 Date of report (Date of earliest event reported) ConAgra Foods, Inc. (Exact Name of Registrant as Specified in Its Charter) Delaware (State or Other Jurisdiction of Incorporation) 1-7275 47-0248710 (Commission File Number) (IRS Employer Identification No.) One ConAgra Drive Omaha, NE 68102 (Address of Principal Executive Offices) (Zip Code) (402) 595-4000 (Registrant's Telephone Number, Including Area Code) ---------------------------------------------------------------------- (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 (see General Instruction A.2. below): |_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 8.01. Other Events. On September 7, 2005, ConAgra Foods provided Institutional Shareholder Services the letter attached hereto as Exhibit 99.1. Item 9.01 Financial Statements and Exhibits Exhibit 99.1 Letter dated September 7, 2005 to Institutional Shareholder Services 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. CONAGRA FOODS, INC. /s/ Owen C. Johnson Date: September 7, 2005 By: Name: Owen C. Johnson Title: Executive Vice President, Organization & Administration and Corporate Secretary EX-99.1 2 johnsonltr.txt OWEN JOHNSON LTR TO ISS CONAGRA FOODS, INC. ConAgra Foods, Inc. One ConAgra Drive Omaha, Nebraska 68102-5001 TEL: 402-595-5315 Owen C. Johnson Executive Vice President Organization and Administration and Corporate Secretary September 7, 2005 Via Email Institutional Shareholder Services Martha Carter [martha.carter@issproxy.com] Patrick McGurn [patrick.mcgurn@issproxy.com] Kathryn Cohen [kathryn.cohen@issproxy.com] Patricia Tiller [patricia.tiller@issproxy.com] Rajeev Kumar [rajeev.kumar@issproxy.com] RE: ConAgra Foods, Inc. Ladies and Gentlemen: We appreciated the opportunity to talk to you yesterday and welcome the opportunity to put forth in writing the matters which we discussed. During our conversation, we discussed your views that (1) there is a potential for the appearance of a conflict of interest between the Company's Audit Committee Chairman and the newly appointed auditor due to his previous employment at KPMG which ended more than three years ago, and (2) the Company could have disclosed more information about the process by which potential audit firms were interviewed and evaluated resulting in the selection of KPMG. Mr. Butler's Independence Stephen Butler has been a member of the Company's Audit Committee since May 2003 and Audit Committee Chairman since May 2004. Mr. Butler is a certified public accountant with extensive auditing experience. He was an employee of KPMG and its Chairman and CEO until his retirement in June 2002. Mr. Butler ceased to be an employee of KPMG on the date of his retirement in June 2002. Mr. Butler has not had an employment relationship with KPMG since that date. Three specific rules and regulations are applicable to this particular situation: (1) SEC (S-X regulation 2.01(c)(2) and Rule 10A-3), (2) NYSE (listing standard 303A.02) [each have specific codified standards for determining the independence of directors who formerly had relationships with a public company's independent auditor], and (3) PCAOB standard (interim independence rule 3600T) for determining auditor independence. Mr. Butler qualifies as independent under all three of those standards. In addition, a fourth standard is also relevant: your preliminary proxy analysis indicates that Mr. Butler also qualifies as independent under your standards. Audit Committee Independence ConAgra Foods has four Audit Committee members, all of whom have been designated as audit committee financial experts pursuant to SEC regulations. Each is independent, and that fact is not in question. KPMG Independence The new engagement partner for KPMG on the ConAgra Foods' account has never reported to Mr. Butler nor worked directly for him. In fact, the new engagement partner did not have any prior significant interaction with ConAgra Foods or Mr. Butler until the recent ConAgra Foods' process for evaluating independent auditor proposals. Process of Auditor Selection The process of auditor selection is something that public companies, as a matter of good governance, engage in from time to time. Public companies are currently encouraged to review the selection process more frequently and more vigorously. In the ConAgra Foods case, the most senior member of the Audit Committee, the former Audit Committee Chair Robert Krane, suggested on his retirement in September 2004 that in due course the Audit Committee should consider evaluating the field of potential auditors. Mr. Krane noted that while auditors had been considered from time to time, Deloitte & Touche had served as the Company's auditors since 1977. Three months later, Frank Sklarsky joined ConAgra Foods in December 2004 as Executive Vice President and Chief Financial Officer. John Gehring had recently become ConAgra Foods' Senior Vice President and Controller in July 2004. Given the suggestion of retiring Audit Committee Chairman Krane, and the presence of new financial management, the Company elected to seek proposals from major accounting firms for the following fiscal year in order to evaluate whether to retain the current auditor or to make a change. As part of this process, financial management recommended to the Audit Committee that the process should seek to enhance the audit team's talent and experience for the fiscal year beginning in June 2006, including additional national-level resources and specialized expertise. The Audit Committee reported the foregoing matters to the board of directors and recommended an evaluation process which would include the services and staffing available from the "Big 4" accounting firms. The board of directors was in favor of the process and thereafter the Audit Committee process began. As reported by the company in its proxy statement for the annual stockholders meeting on September 22, 2005, three of the "Big 4" independent auditing firms were requested to submit proposals for the conduct of the company's fiscal 2006 audit. Proposals were received from Deloitte & Touche LLP, KPMG LLP and PriceWaterhouseCoopers LLP. A proposal from Ernst & Young was not requested, since that firm was already providing substantial tax services to the company. The Company's senior financial management, including its Chief Financial Officer, the Controller, and the Vice President of Internal Audit held extensive due diligence sessions with each firm to respond to questions and to review qualifications, staffing and proposals. There were significant staffing variations in each of the respective proposals. For example, KPMG and Deloitte had offices in Omaha; PWC proposed locating a partner in Omaha but not staffing an office in the city. KPMG was the only firm to propose to have one of its SEC review partners serve as the lead engagement partner, a partner with significant packaged food and consumer product company audit experience who would devote substantially full time on site to the audit. Deloitte and PWC each disclosed that their respective lead engagement partners would not be as fully dedicated to the company's audit. As a result, the Company's senior financial management unanimously recommended KPMG to the Audit Committee as the firm they viewed as having the best qualifications and expertise. The Company's Audit Committee conducted its own independent review of the proposals following financial management's assessment. Deloitte, KPMG and PWC each made detailed presentations to the Audit Committee in July 2005. Each firm had access to each of the Audit Committee members. Each accounting firm made on site presentations for several hours in Omaha and participated in face-to-face exchanges with the Audit Committee members. After completing its review of the proposals and conducting reference checks, the Audit Committee deliberated and based its unanimous selection of KPMG on the comparative qualifications and commitments of the respective firms. The Audit Committee shared its observations, as well as the qualifications and commitments of KPMG, with the entire board of directors. While the selection of the independent auditors was solely a function of the Audit Committee, the Audit Committee did seek the guidance and approval of the board of directors. The board endorsed the selection of KPMG. ISS Recommendation ConAgra Foods believes any company would be fortunate to have an Audit Committee Chairman of the experience and quality of Stephen Butler. Mr. Butler is a highly qualified Audit Committee Chairman by anyone's standards. Moreover, on a comparative basis, premised on the face-to-face interviews and presentations of the three auditing firms which made proposals, ConAgra Foods also believes that the qualifications and expertise of the new KPMG audit team exceeded those of the other audit firms which made proposals for the ConAgra Foods' account. We do not believe it would be in the best interests of ConAgra Foods' stockholders to lose the professional skills, expertise and services of Mr. Butler as Audit Committee Chair or any of the Audit Committee members, or to lose the professional skills, expertise and services of the new KPMG audit team as our independent auditors. We believe the loss of Mr. Butler's services or the loss of KPMG's services would be counterproductive for our stockholders and contrary to the current objectives of quality corporate governance. We encourage ISS to take all of these factors into consideration when recommending its voting positions. ConAgra Foods conducted a full and open evaluation process in which the three major accounting firms submitted their best respective proposals. We believe the processes followed by ConAgra Foods in deciding to seek proposals from auditors, and selecting KPMG as the new auditor, puts ConAgra Foods in the forefront of good corporate governance. Yours very truly, /s/ Owen C. Johnson OWEN C. JOHNSON cc: Bruce Rohde Frank Sklarsky John Gehring Dave Hefflinger Jason Benson -----END PRIVACY-ENHANCED MESSAGE-----