Exhibit 10(l)
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCENTIVE PLAN
FOR MAJOR CORPORATE EXECUTIVES
I. THE PLAN
The name of this Plan is the Universal Foods Corporation Management
Incentive Plan for Major Corporate Executives. The purpose of this
Plan is to promote the interests of the shareholders and to provide
incentive to those elected officers who can contribute most to the
profitability of the Company. It is separate and distinct from other
incentive plans in effect which are based upon divisional
performance.
II. DEFINITIONS
In this Plan, the terms used will have the following definitions:
A. "Board of Directors" means the Board of Directors of Universal
Foods Corporation.
B. "Bonus Award" means an award, either paid currently or paid on a
deferred basis, as the result of the operation of this Plan.
C. "Bonus Provision" means monies available for distribution as
Bonus Awards as the result of the operation of this Plan.
D. "Capital Employed" is defined as the sum of average
shareholders' equity plus average long-and short-term debt.
These averages are to be determined using the ending balances of
the prior and current fiscal year as shown in the Company's
certified Consolidated Balance Sheets.
E. "Committee" means the committee provided for in Section III.
F. "Company" means Universal Foods Corporation.
G. "Employee" means any employee regularly employed by Universal
Foods Corporation or any of its subsidiaries and paid on a
salary basis.
H. "Fiscal Year Salary" means base pay earned during the period
October 1 through September 30 each Company operating year
exclusive of any incentive/supplemental payments by the Company.
I. "Independent Auditors" means with respect to any fiscal year,
the independent public accounts appointed by the Board of
Directors to certify to the Board of Directors the financial
statements of the Company.
J. "Operating Income After Taxes" is defined as net earnings, as
shown in the Company's Statement of Consolidated Earnings as
certified by the Company's Independent Auditors, plus the after-
tax costs of interest on long-term and short-term debt and the
Bonus Awards for that fiscal year. This amount shall be further
adjusted for extraordinary items of income or expense if, in the
opinion of the Committee, it is appropriate to do so.
K. "Plan" means this Management Incentive Plan for Major Corporate
Executives.
L. "Return on Capital Employed" means for the purpose of computing
the amount which may be credited to the bonus reserve for any
fiscal year, the percentage of Operating Income After Taxes (per
J) to Capital Employed (per D).
M. "Subsidiary" means with respect to any year, any corporation in
which Universal Foods Corporation owns a stock interest of more
than 50%, and the financial results of whose operations are
consolidated with those of the Company in the financial
statements included in the annual report to shareholders for
that year.
III. COMMITTEE
A. The Board of Directors shall appoint a Compensation and
Development Committee composed of three non-management members
of the Company's Board of Directors. This Committee shall be
known as the "Committee" and shall have full power and authority
to interpret and administer the Plan in accordance with the
Regulations. No member of the Committee shall be eligible to
participate in the Plan while a member of the Committee.
B. The Board of Directors may, from time to time, remove members
from the Committee or add members thereto; and vacancies on the
Committee, however caused, shall be filled by action of the
Board of Directors. The Committee shall select one of its
members as Chairman and shall hold its meetings at such times
and places as it may determine. A majority of its members shall
constitute a quorum. All determinations of the Committee shall
be made by a majority of its members. Any decision or
determination reduced to writing and signed by a majority of the
members of the Committee shall be as fully effective as if it
had been made at a meeting of the Committee duly called and
held. The members of the Committee may receive such
compensation for their services as the Board of Directors may
determine.
IV. PLAN ADMINISTRATION
The Committee shall have the power to adopt eligibility and other
rules not inconsistent with the provisions of the Plan (hereinafter
referred to as the "Regulations" and attached hereto as "Exhibit A")
for the administration thereof and to alter, amend, or revoke any
Regulations so adopted.
V. PLAN PARTICIPATION
Participation in the Plan shall be in accordance with the
Regulations.
A. At the beginning of each fiscal year, the Chairman and the
President and Chief Executive Officer shall submit to the
Committee a written list of recommended participants in the Plan
for that year.
B. Not all officers and major executives need to be selected as
participants, and selection as a participant one year does not
automatically ensure selection in future years.
C. At the end of each fiscal year, the Chairman and the President
and Chief Executive Officer shall submit to the Committee a
written list of recommendations as to the amount of Bonus Award
each participant in the Plan should receive for that fiscal
year.
D. The Committee's selection of the Employees to whom a Bonus Award
shall be made and its determination of the amount and method of
payment of each such Bonus Award shall be final.
E. This Plan is not a part of the Company's regular compensation
plan nor is it part of the Employee's regular compensation.
VI. BONUS AWARD
The performance measurement upon which the Bonus Award is based is
determined in accordance with the Regulations for each fiscal year.
VII. BONUS PROVISION
A. The Company shall create and maintain a bonus account to which
shall be credited each fiscal year (except years for which all
or part of such a credit is prohibited by the Plan, the
Regulations, or specific order of the Board of Directors) a
Bonus Provision, the amount of which shall be determined by the
following table:
10.0% Return on Capital Employed - 100% of Maximum Bonus
9.5% Return on Capital Employed - 90% of Maximum Bonus
9.0% Return on Capital Employed - 80% of Maximum Bonus
8.5% Return on Capital Employed - 70% of Maximum Bonus
8.0% Return on Capital Employed - 60% of Maximum Bonus
7.5% Return on Capital Employed - 50% of Maximum Bonus
7.0% Return on Capital Employed - 40% of Maximum Bonus
6.5% Return on Capital Employed - 30% of Maximum Bonus
6.0% Return on Capital Employed - 20% of Maximum Bonus
Below 6.0% Return on Capital Employed - 0% of Maximum Bonus
Maximum Bonus Award is defined in the Regulations. (Exhibit A,
5)
B. As promptly as possible after the end of each fiscal year, the
Independent Auditors shall determine and report to the Committee
the maximum amount available for a Bonus Provision that year in
accordance with the Plan and the Regulations; and the Committee
shall rely upon and be bound by such report.
C. Upon the determination of the amount of the Bonus Provision for
a particular fiscal year, an amount not exceeding the bonus
provision may be allotted as a Bonus Award for such fiscal year
to such Employees as are selected and in such amounts and in
such a manner as are determined in accordance with the
Regulations.
VIII. CHANGE OF CONTROL OF COMPANY
In the event of a change of control of the Company in accordance
with an Employee's Severance or Employment Agreement and the
Employee's subsequent termination of employment without cause by
the successor entity, the "Change of Control Benefits" under the
Employee's Severance or Employment Agreement in respect to this
Plan shall be received as a severance payment by the Employee.
IX. SUCCESSORS AND ASSIGNS
If the Company sells, assigns or transfers all or substantially
all of its business and assets to any person, excluding
affiliates of the Company, or if the Company merges into or
consolidates or otherwise combines with any person which is a
continuing or successor entity, then the Company shall assign
all of its right, title and interest in this Plan as of the date
of such event to the person which is either the acquiring or
successor corporation, and such person(s) shall assume and
perform from and after the date of such assignment all of the
terms, conditions and provisions imposed by this Plan upon the
Company.
In case of such assignment by the Company and of such assumption
and agreement by the Company and of such person(s), all further
rights as well as all other obligations of the Company under
this Agreement thenceforth shall cease and terminate and
thereafter the expression "the Company" wherever used herein
shall be deemed to mean such person(s).
X. MISCELLANEOUS
A. All expenses incurred by the Committee in interpreting and
administering the Plan shall be charged against the bonus
reserve.
B. The amount of any Bonus Award forfeited by a participant shall
be retained by the Company and may not be recredited to the
bonus reserve.
XI. PLAN AMENDMENTS
The Board of Directors may suspend or discontinue the Plan at
anytime.