H.J. Heinz Company
Senior Executive Incentive Compensation Plan
1. Establishment and Purpose
The purpose of the H.J. Heinz Company Senior Executive Incentive Compensation
Plan is to permit H.J. Heinz Company (the "Company"), through awards of annual
incentive compensation that satisfy the requirements for performance-based
compensation under Section 162(m) of the Internal Revenue Code, to attract and
retain highly skilled executives and to motivate such executives to maximize
the profitability of the Company.
Upon approval of the Board of Directors of the Company, the Plan shall be
effective as of May 1, 2003, subject to approval by the shareholders of the
Company in accordance with Section 162(m) of the Code (or any successor section
thereto) and regulations thereunder ("Section 162(m)").
"Award" shall mean the amount granted to a Participant by the Committee for a
"Board" shall mean the Board of Directors of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Committee" shall mean the Management Development and Compensation Committee of
the Board, or any successor to such committee as may be appointed by the Board,
or any subcommittee thereof which meets the requirements of Section
162(m)(4)(C) of the Code (or any successor section thereto) and regulations
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Executive" shall mean any "covered employee" as defined in Section 162(m) and,
in the discretion of the Committee, any other executive officer of the Company
or its subsidiaries or affiliates.
"Incentive Pool" shall mean the aggregate dollar value of the maximum Awards
payable under the Plan in any Performance Period, as specified in Section 4(a)
of the Plan.
"Net Income" shall mean, for each Performance Period, the Company's net income
from continuing operations as reported in the Company's income statement for
the Performance Period, adjusted to eliminate the after-tax effects of any
restructuring charges, extraordinary items, and the cumulative effect of
accounting changes, each as defined by accounting principles generally accepted
in the United States.
"Participant" shall mean, for each Performance Period, each Executive who is a
"covered employee" (as defined in Section 162(m)) for that Performance Period,
unless otherwise determined by the Committee in its sole discretion.
"Performance Period" shall mean the Company's fiscal year or any other period
designated by the Committee with respect to which an Award may be granted.
"Plan" shall mean the H.J. Heinz Company Senior Executive Incentive
Compensation Plan, as amended from time to time.
"Stock Plans" shall mean the H.J. Heinz Company Fiscal Year 2003 Stock
Incentive Plan and/or any prior and successor stock plans adopted or assumed by
The Committee shall administer the Plan. The Committee shall have full
authority to interpret the Plan, to establish rules and regulations relating to
the operation of the Plan, to select Participants, to determine the maximum
Awards and the amounts of any Awards and to make all determinations and take
all other actions necessary or appropriate in the administration of the Plan.
Prior to the beginning of any Performance Period, the Company shall identify in
writing each Participant who shall be eligible to participate in the Plan in
respect of the Performance Period.
Before payments are made under the Plan, the Committee shall certify in writing
the aggregate amount of the Incentive Pool as determined under Section 4(a) and
the maximum Award payable to any Participant for the Performance Period
pursuant to the allocation process established pursuant to Section 4(b).
The Committee's interpretation of the Plan, and all actions taken within the
scope of its authority, shall be final and binding on the Company, its
shareholders and Participants, current Executives, former Executives and each
of their respective successors and assigns.
4. Determination of Awards
(a) The Incentive Pool for a Performance Period shall equal 1.5% of Net Income.
(b) Prior to the beginning of each Performance Period, or at a later time as
permitted by the applicable provisions of the Code, the Committee shall
establish for each Participant a maximum Award, expressed as a percentage
of the Incentive Pool for the Performance Period pursuant to paragraph (a)
of this section (a "Maximum Percentage"), provided that the total of all
such maximum percentages shall not exceed 100%, and the Maximum Percentage
for any one Participant shall not exceed 40% of the total Incentive Pool.
(c) Following the end of each Performance Period, the Committee shall determine
the final amount of any Award with respect to each Participant, which may
range from zero to an amount not exceeding the amount equal to the Maximum
Percentage specified for such Participant; provided, however, that the
excess of (x) the amount of the Incentive Pool equal to the Maximum
Percentage over (y) the amount of the Award actually payable to a
Participant at the end of the Performance Period shall revert to the
Company as part of the general assets of the Company, and shall not revert
to the Incentive Pool or otherwise be used to increase the amount of any
other Participant's Award under the Plan. The aggregate amount of all
Awards under the Plan for any Performance Period shall not exceed 100% of
the Incentive Pool established pursuant to paragraph (a) of this section.
5. Payment of Awards
Participants shall be eligible to receive, as soon as practicable after
determining the amount of each Participant's Award for a Performance Period,
payment of all or a portion of that Award; provided, however, that pursuant to
procedures established by the Committee prior to the commencement of the
applicable Performance Period, payment of any Award may be deferred in
accordance with a written election by the Participant. Notwithstanding the
foregoing, payment of all or a portion of any Award may be deferred by the
Company at the discretion of the Committee, regardless of any written election
by a Participant, if in the judgment of the Committee, such deferral is prudent
Awards may be paid in cash, stock, restricted stock, options, other stock-based
or stock-denominated units or any combination thereof as determined by the
Committee. Stock or stock-based awards may be granted under the terms and
conditions of the applicable Stock Plan.
6. Termination and Amendments
The Committee may terminate this Plan at any time. In no event shall the
termination of the Plan adversely affect the rights of any Participant to
deferred amounts previously awarded such Participant, plus any earnings thereon.
The Committee may amend the Plan at any time and from time to time. However, no
such amendments shall be permitted without the consent of the shareholders of
the Company if such an amendment would require such consent pursuant to Section
162(m) or the Exchange Act, or any other applicable law, rule or regulation. No
such amendment which adversely affects a Participant's rights to, or interest
in, an Award granted prior to the date of the amendment shall be effective
unless the Participant shall have agreed thereto in writing.
7. Other Provisions
(a) No Executive or Participant shall have any claim or right to be granted an
Award under this Plan until such Award is actually granted. Neither the
establishment of this Plan, nor any action taken hereunder, shall be
construed as giving any Executive or Participant any right to be retained
in the employ of the Company or in any way interfere with or limit the
right of the Company to terminate any Executive's or Participant's
employment at any time. Nothing contained in this Plan shall limit the
ability of the Company to make payments or awards to Executives or
Participants under any other plan, agreement or arrangement in effect at
time this Plan is established or upon a subsequent date.
(b) No Executive or Participant shall, at any time, have a right to be selected
for participation in the Plan for any Performance Period, despite having
previously participated in the Plan.
(c) The Company shall have the right to deduct from Awards any taxes or other
amounts required to be withheld by law.
(d) No Executive or Participant or any other party claiming an interest in
amounts earned under the Plan shall have any interest whatsoever in any
specific asset of the Company. To the extent that any person or entity
acquires a right to receive payments under the Plan, such rights shall be
that of an unsecured general creditor of the Company.
(e) All questions pertaining to the construction, regulation, validity and
effect of the provisions of the Plan shall be determined in accordance with
the laws of the Commonwealth of Pennsylvania without regard to principles
of conflict of laws.
(f) With the exception of payments made following the death of a Participant,
the rights and benefits of a Participant hereunder are personal to the
Participant and shall not be subject to any voluntary or involuntary
alienation, assignment, pledge, transfer, encumbrance, attachment,
garnishment or other disposition.
(g) Awards under this Plan shall not constitute compensation for the purpose of
determining participation or benefits under any other plan of the Company
unless specifically included as compensation in such plan.
(h) If any provision of this Plan would cause Awards not to constitute
"qualified performance-based compensation" under Section 162(m), that
provision shall be severed from, and shall be deemed not to be a part of,
the Plan, but the other provisions hereof shall remain in full force and
(i) In addition, in the event that changes are made to Section 162(m) to permit
greater flexibility under the Plan, the Committee may make any adjustments
it deems appropriate.
(j) No member of the Committee or the Board, and no officer, employee or agent
of the Company shall be liable for any act or action hereunder, whether of
commission or omission, taken by any other member, or by any officer,
agent, or employee, or, except in circumstances involving bad faith, for
anything done or omitted to be done in the administration of the Plan.
(k) All obligations of the Company under the Plan shall be binding upon and
inure to the benefit of any successor to the Company, whether the existence
of such successor is the result of a direct or indirect purchase, merger,
consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.