Exhibit 10 (a)(xxviii)
Director and Named Executive Officer Compensation
DIRECTORS
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During calendar year 2005, each non-employee director will receive a $60,000
annual retainer fee. The Chair of each of the Audit and Management Development
and Compensation Committees will receive a $15,000 retainer, and the Chair of
each of the Corporate Governance and Public Issues Committees will receive a
$10,000 retainer. Each non-employee director will receive a fee equal to $1,500
for each meeting day attended. In addition to cash compensation, each
non-employee director will receive a grant of 2,500 restricted shares of Company
Common Stock on the date of the Company's Annual Meeting of Shareholders. On
January 14, 2004, the Board approved a guideline that each non-employee director
should own 10,000 shares of Company stock; each director is asked to comply with
this guideline by the fifth anniversary of his or her election to the Board.
NAMED EXECUTIVE OFFICERS
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NAME AND PRINCIPAL ANNUAL FY05
POSITION SALARY BONUS
- ---------------------- ---------- ---------
W. R. Johnson 1,050,000 1,900,000
Chairman, President and CEO
J. P. Berger 525,000 224,625(1)
EVP - Global Foodservice
D. C. Moran
SVP-President Heinz Consumer 475,000 469,488
Products
J. Jimenez
EVP-Europe 550,000 298,314
A. B. Winkleblack 525,000 332,688
EVO and CFO
(1) In Fiscal year 2005, Mr. Berger also received a grant of $1,000,000 in
restricted stock units in lieu of a portion of his cash bonus. This award vested
on June 3, 2005, upon achieving specific predetermined financial objectives.
LONG-TERM INCENTIVE PROGRAM
PERFORMANCE UNIT AWARDS(1)
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PERFORMANCE ESTIMATED FUTURE PAYOUTS AT END OF
NO. OF SHARES OR OTHER 2-YEAR PERFORMANCE PERIOD
UNITS, OR PERIOD UNTIL -------------------------------------
NAME AND PRINCIPAL OTHER RIGHTS MATURATION THRESHOLD TARGET MAXIMUM
POSITION (#) OR PAYOUT ($) ($) ($)
- ---------------------- ----------- ------------ --------- ------ -------
W. R. Johnson 1 2 years -0- 5,760,000 12,960,000
Chairman, President and CEO
J. P. Berger 1 2 years -0- 925,000 2,081,250
EVP - Global Foodservice
D. C. Moran 1 2 years -0- 750,000 1,687,500
SVP-President Heinz Consumer
Products
J. Jimenez 1 2 years -0- 1,150,000 2,587,500
EVP-Europe
A. B. Winkleblack 1 2 years -0- 1,075,000 2,418,750
EVO and CFO
(1) Performance Unit Awards Under Long-Term Incentive Program. In order to
further link the compensation of executives with the interests of shareholders,
in fiscal year 2005, the Company granted performance awards as permitted in the
Fiscal Year 2003 Stock Incentive Plan, subject to achievement of performance
goals, restrictions and conditions specified in advance by the Management
Development and Compensation Committee (the "Committee"). These new performance
awards are tied to Company financial measures and are expected to replace a
large portion of stock options and restricted stock units beginning in Fiscal
Year 2005. For the performance period from April 29, 2004 through May 3, 2006,
the measures are established by the Committee based on the compound annual
growth rate of net income ("NI") and sales growth amounts.
Awards are payable at the end of the 2-year performance period based upon the
Company's achieving the NI and sales growth targets. Once the minimum NI goal is
met, the amount of any award is dependent upon the level of sales growth of the
Company for the performance period. If the Company meets or exceeds the peer
group median in NI over the performance period and generates at least flat
sales, the Committee may, in its discretion, authorize payment up to 50% of any
target award to participants excluding the Chief Executive Officer. In addition,
if the Company does not remain in or above the third quartile when comparing its
performance to that of its peer group companies on a relative total shareholder
return basis, the Committee will exercise its discretion to reduce payouts for
named executive officers.
If earned, 50% of the payout on the performance award will be made in cash and
50% will be made in stock valued at the fair market value of Heinz common stock
as of the date of the payout. However, if the executive has met applicable stock
ownership guidelines, the performance award may be paid in cash. Mr. Johnson has
met the applicable stock ownership guideline as published by the Committee.
Nevertheless, the Committee determined on the grant date of the award that Mr.
Johnson's performance award, if earned, will be paid half in cash and half in
stock. For the executive officers named in the Summary Compensation Table,
including Mr. Johnson, any stock received as partial payout on the performance
award will be deferred until retirement or termination of employment or until
the executive is no longer a named executive officer.