EXHIBIT 10.1
VALMONT INDUSTRIES, INC.
1994
INCENTIVE BONUS PLAN
1. Name and Purpose. This Plan shall be known as the Valmont
Incentive Bonus Plan (the "Plan"). The purpose of the Plan
is to attract and retain the services of selected employees
who can substantially affect the value of the Company, and to
provide such individuals with additional incentives to
increase their efforts on the Company's behalf.
2. Definitions. For the purpose of the Plan:
a) "Total Value Impact" (TVI) is Net Operating Profits After
Tax in excess of the Company's Cost of Capital.
b) "Net Operating Profit" is:
Net sales less cost of sales,
Less sales, general and administrative expenses
In accordance with generally accepted accounting
principles
"Net Operating Profit After Tax" is Net Operating
Profit less income taxes at the rate of:
36% for business division employees
For corporate level employees, actual effective tax
rate for the Plan Year of the Company.
c) "Cost of Capital" is the Total Invested Capital of the
Company multiplied by a specified rate of return as
determined by the Committee for each Plan Year.
d) "Total Invested Capital" for business divisions is:
All assets (except cash) directly assignable to the
division,
Plus 1% of annual sales for cash,
Less all non-interest bearing liabilities directly
assignable to the division.
"Total Invested Capital" for the Company is:
All assets of the Company,
Less all non-interest bearing liabilities.
e) "Board" means the Company's Board of Directors.
f) "Committee" means the Compensation Committee of the Board
of Directors.
g) "Company" means Valmont Industries, Inc. and
subsidiaries.
h) "Disability" means total or permanent disability as
determined pursuant to the Valmont Employee Retirement
Savings Plan.
i) "Participant means an employee of the Company selected by
the Committee to participate in the Plan.
j) "Profit Center" means a business division of the Company.
For corporate level employees not assigned to the
business division, "Profit Center" means the Company.
k) "Plan Year" means the fiscal year of the Company.
l) "Retirement" means normal or early retirement pursuant to
the provisions of the Valmont Employee Retirement Savings
Plan.
3. Administration. The Committee will construe, interpret and
administer the Plan, and may adopt such rules and regulations
and take such other action as it deems appropriate. All
decisions by the Committee are final, conclusive and binding
on the Company and each Participant, former Participant,
beneficiary and every other interested person.
4. Participation. Participation in the Plan shall be limited to
those employees of the Company who can substantially affect
improvements in shareholder value as measured by net positive
improvements in TVI for the Company. Directors who are
employees of the Company shall be eligible to participate in
the Plan. Corporate level Participants shall be recommended
by the Chief Executive Officer, subject to Committee
approval. Participants in other Profit Centers shall be
recommended by the Chief Executive Officer and the Chief
Operating Officer of such Profit Center, subject to Committee
approval.
5. Establishment of TVI and Related Items. The Committee shall
establish for each Plan Year the minimum TVI for each Profit
Center required in order for Incentive Bonuses to be paid to
Participants in such Profit Center. The Committee shall also
select the Participants for the Plan Year, the individual
incentive bonus targets and payouts at various performance
levels for each Participant, and the structure of the
Discretionary Incentive Bonus Pool for each Plan Year. The
Committee shall establish such items within ninety days
following the beginning of each Plan Year, subject to the
Committee's ability to add Participants during the Plan Year
and reduce the Incentive Bonus which may be earned by any
participant during the Plan Year.
6. Establishment of Individual Participant Incentive Bonus
Targets. The Individual Incentive Bonus Targets for each
Profit Center shall be established by the Committee as
follows:
a) Each Participant shall have a target incentive bonus
award established as a specified percentage of beginning
of the year annualized base salary.
b) Each Participant's incentive bonus will vary in
proportion to changes in the Participant's Profit Center
TVI above a specified minimum TVI.
c) If the Profit Center's minimum TVI is not achieved, no
incentive bonus is earned by the Participant.
d) All Incentive Bonus payments are subject to the approval
of the Committee.
7. Establishment of Discretionary Bonus Pool. In addition to
the establishment of Individual Participant Bonus Targets by
Profit Center, a Discretionary Incentive Bonus Pool shall
also be established by the Committee for each Profit Center.
a) The Discretionary Incentive Pool shall be established as
a fixed percentage of the aggregate Individual
Participant Incentive Bonus awards within the Profit
Center. The size of the Discretionary Incentive Bonus
Pool will vary in proportion to changes in the Profit
Center's TVI above an established minimum TVI.
b) Any Incentive Bonus calculated under paragraph 6 above
and forfeited by an individual Participant shall be added
to the Profit Center's Discretionary Incentive Bonus
Pool.
c) All amounts contained with the Discretionary Incentive
Bonus Pool may be awarded on a discretionary basis to
Plan Participants and other exempt employees as
determined by the Committee.
d) If the Profit Center's minimum TVI is not achieved, no
Discretionary Incentive Bonus Pool shall be generated.
8. Payment of Incentive Bonus Awards. Payments of amounts
earned by each Participant shall be made as soon as possible
after, but not before, financial results of the Company's
operations for the Plan Year have been finalized. The
Company's independent public accountants shall submit a
report setting forth the amount distributable under the Plan
for such Plan Year. All distributions pursuant to the Plan
shall also be subject to the following conditions:
a) No amounts shall be distributable under the Plan until
the financial results of the Company's operations have
been approved by the Board.
b) It is expected that any such payments under the program
will be made by March 15th of the year following the Plan
Year.
c) If a Participant's employment terminates, voluntarily or
involuntarily, with or without cause, before the actual
payment to such Participant under the Plan (except by
reason of Death, Disability or Retirement), such
Participant's rights under the Plan shall terminate, and
such Participant shall not be entitled to any Incentive
Bonus, except as the Committee may, in its discretion,
otherwise determine.
d) If a Participant's employment terminated before the end
of the Plan Year on account of Death, Disability, or
Retirement, such Participant shall be deemed to continue
his allocable participation in the Plan for such Plan
Year. Such Participant shall be entitled to receive a
reduced incentive at such time as the incentive bonuses
normally are paid. The reduced incentive bonus will be
determined by multiplying the amount otherwise
distributable to the Participant by a fraction, the
numerator of which shall be the number of full days of
participation by the Participant in the Plan Year, and
the denominator of which shall be the number of full days
in the Plan Year.
9. Payment Procedure
All payments to Participants entitled to benefits
hereunder shall be made to such Participants. No rights
in this Plan or amounts distributable under this Plan
shall be transferable or otherwise assignable in
anticipation of payment thereof, in whole or in part, and
the Plan shall not be liable or taken for any obligation
of such Participant. Any attempt to so transfer or
alienate rights in this Plan shall be void.
10. Miscellaneous Provisions.
a) Each Participant, in consideration of the benefits
conferred hereunder, agrees to be bound by all the terms
and conditions of this Plan as presently constituted and
as amended from time to time.
b) Neither this Plan nor any rights granted hereunder shall
confer on any Participant any right to continue in the
employment of the Company.
c) The Company may deduct from all payments under this Plan
any federal, state, or local taxes required by law.
d) The Board may, in its discretion, terminate, amend, or
modify this Plan from time to time. If the Board
terminates this Plan during any Plan Year, the
Participants for such Plan Year shall not have any right
to a distribution from the Plan for such Plan Year.
e) The Company will bear the expenses of administering this
Plan.
11.Effective Date. The plan effective date will be established
by the Committee.