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EXHIBIT 10
(g)
ALBERTO-CULVER
COMPANY
MANAGEMENT INCENTIVE
PLAN
(as amended through
September 18, 2007)
| 1. |
Establishment. Alberto-Culver Company and its
subsidiaries hereby establish the Management Incentive Plan
(“MIP”) for key salaried employees of the Company. The
MIP provides for annual awards to be made to Participants based
upon financial performance and achievement of Individual Bonus
Objectives. This MIP is established as an unfunded, non-qualified
incentive compensation plan intended for the benefit of employees
who are among a select group of management and/or highly
compensated participants. Nothing contained in this MIP and no
action taken pursuant to the provisions of this MIP shall create or
be construed to create a trust of any kind, or a fiduciary
relationship between the Company and the Participant, his
designated beneficiary or any other person. Any funds which may be
invested under the provisions of this MIP shall continue for all
purposes to be a part of the general assets of the Company and no
person other than the Company shall by virtue of the provisions of
this MIP have any interest in such funds. To the extent that any
person acquires a right to receive payments from the Company under
this MIP, such right shall be no greater than the right of any
unsecured general creditor of the Company. Solely for purposes of
Section 162(m) of the Internal Revenue Code of 1986 and the
rules and regulations promulgated thereunder (the
“Code”), this MIP shall be deemed a continuation of and
a successor to the Alberto-Culver Company Management Incentive
Plan, as in effect prior to November 16, 2006. |
| 2. |
Purpose. The purpose of the MIP is to attract and retain
in the employ of the Company persons possessing outstanding
management skills and competence who will contribute substantially
to the success of the Company. The MIP is intended to provide
incentives to such persons to exert their maximum efforts on behalf
of the Company by rewarding them with additional compensation when
the Company or Profit Center and/or the Participant have achieved
the financial performance and Individual Business Objectives,
respectively, provided for in the MIP. |
| 3. |
Effective Date and Performance Periods. The effective
date of the MIP is November 16, 2006. The Plan Year shall be
the 12 consecutive-month period ending September 30 of each
year. The MIP will continue in effect until and unless terminated
by the Compensation Committee or the Board of
Directors. |
| 4. |
Definitions. The definition of key terms are as
follows: |
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a. |
“Base Salary” means the base salary, as set by the
Company, paid to the Participant during the Plan Year, exclusive of
any amounts payable under bonus and incentive plans, severance
plans, option plans, and any other benefit or welfare plan of the
Company now or hereafter existing. |
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b. |
“Bonus Award Opportunity” means a maximum of 200%
of Base Salary. |
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c. |
“Change in Control” shall have the meaning set
forth in Section 14.d.1. |
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d. |
“Committee” means the Compensation and Leadership
Development Committee of the Board of Directors of the Company or,
if any member of the Compensation Committee is not (i) an
“outside director” within the meaning of
Section 162(m) of the Code or (ii) a “non-employee
director” within the meaning of Section 16
(“Section 16”) of the Securities Exchange Act of 1934
and the rules and regulations thereunder (“Exchange
Act”), the Committee shall set up a subcommittee comprised
solely of outside directors and non-employee directors for purposes
of all matters arising under this MIP involving
“officers” within the meaning of Rule 16a-1(f) under
Section 16 (“Executive Officer”) and Covered
Employees as defined herein. |
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e. |
“Company” means Alberto-Culver Company or a
Subsidiary. |
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f. |
“Covered Employee” means a Participant who is a
“covered employee” within the meaning of
Section 162(m) of the Code during the Plan Year at
issue. |
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g. |
“Employee” means any person, including an officer
or director, who is employed on a permanent basis by, and receives
a regular salary from, the Company. |
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h. |
“Exempt Person” and “Exempt Persons”
shall have the meaning set forth in
Section 14.d.2. |
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i. |
“Incumbent Board” shall have the meaning set forth
in Section 14.d.3. |
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j. |
“Individual Business Objectives” means the
objectives as set forth in a letter of recommendation prepared by
the Participant and agreed upon by (i) the Chairman,
(ii) the Chief Executive Officer of the Company, or
(iii) the Committee. |
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k. |
“Participant” means any Employee of the Company who
has been selected to participate in the MIP. |
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l. |
“Plan Year” shall be the Company’s fiscal
year for financial reporting purposes ( i.e. , the 12
consecutive-month period ended September 30). |
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m. |
“Profit Center” means a division or Subsidiary of
the Company which is responsible for preparing and submitting
annual sales and pre-tax profit (loss) objectives. |
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n. |
“Subsidiary” means any corporation or other entity
in which the Company owns (directly or indirectly) 50% or more of
the outstanding stock or equity entitled to vote for directors or
other similar governing body. |
| 5. |
Eligibility. Participation in the MIP is limited to key
salaried Employees of the Company and its Subsidiaries. Each Plan
Year, the Committee shall designate those eligible Employees who
will participate in the MIP during that Plan Year. In the event an
employee
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who would be eligible to
participate in the MIP is hired after the beginning of the Plan
Year, the Committee may, but need not, designate such employee as a
Participant for such Plan Year. In the event a new employee is
designated as a Participant, the Committee shall notify the new
Participant of his or her financial performance award opportunities
and his or her Individual Business Objectives on which any cash
award will be based. The Committee shall make such adjustments to
the new Participant’s actual cash award as the Committee
deems necessary or appropriate to take into account the fact that
such Participant was not employed for the entire Plan
Year.
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| 6. |
Award Opportunities . Actual awards can range from 0% to
100% of the Bonus Award Opportunity (a maximum of 200% of Base
Salary or $4.0 million, whichever is less) based on actual
performance compared to the performance objectives established for
the Plan Year. The total Bonus Award Opportunity will relate to the
financial performance of the Company, one or more Profit Centers,
or Individual Business Objectives or any combination thereof.
Notwithstanding anything to the contrary hereinabove set forth in
this Section 6 or in Section 8 or 9 of the MIP, but
subject in all respects to Sections 7 and 14 of the MIP, any Bonus
Award Opportunity and the amount of any annual award, other than a
Change in Control Award (as such term is defined in
Section 14.b of the MIP), payable to any Participant may be
(i) decreased by up to 35% of such Participant’s Base
Salary as the Committee, in its sole discretion, shall determine
based on such factors and circumstances as the Committee shall deem
appropriate, (ii) decreased by such amount as the Committee,
in its sole discretion, shall determine in the event a Participant
(a) is found to have violated any policy contained in the
applicable Compliance Policy Manual, (b) is placed on
probation at any time during the Plan Year, (c) has engaged in
purposeful diversion, and/or (d) has engaged in activities
intended to enhance current Plan Year awards to the detriment of
future periods (e.g. inadequate marketing expenditures that
artificially increase short-term profits, unnecessary year-end
loading shipments or promotions that build sales for the
short-term, etc.), or (iii) other than for Covered Employees,
increased by up to 35% of such Participant’s Base Salary as
the Committee, in its sole discretion, shall determine based on
such factors and circumstances as the Committee shall deem
appropriate. |
| 7. |
Maximum Award Payable. The maximum award payable under
the MIP to a single Participant may not exceed the lesser of $4.0
million or 200% of such Participant’s Base Salary per fiscal
year of the Company. |
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8.
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Financial Performance
Award Opportunities. Each Participant will be assigned
financial performance award opportunities for the Company and/or
the Profit Center for the Plan Year no later than the 90
th
day of the applicable Plan
Year. Each Participant who is hired after December 1
st
of a Plan Year will be
assigned financial performance award opportunities for the Company
and/or the Profit Center for that Plan Year no later than the 30
th
day following his first day
of employment. Financial performance award opportunities will be
based, in whole or in part, upon one or more of the following:
targeted levels of sales, operating earnings, operating margin,
pre-tax earnings, pre-tax margin, net earnings, earnings per share,
return on stockholders’ equity and, except for Covered
Employees, any other measurements the Committee shall deem
appropriate. For purposes of the MIP, “operating
earnings” will mean pre-tax earnings before non-recurring and
other unusual items reported separately in the Company’s
income statement.
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Each Participant will be
notified in writing (“Participant Letter”) of his or
her Bonus Award Opportunity, the Participant’s financial
performance opportunities set for the Company and/or his or her
Profit Center, if applicable, and the portion of his or her Bonus
Award Opportunity allocated to the Participant’s Individual
Business Objectives, if any. The Participant Letter will specify
the percentage of the Bonus Award Opportunity that will be earned
based upon the extent to which such objectives are achieved,
subject to adjustment pursuant to Section 6.
At the end of each Plan Year,
the Committee shall certify the awards that have been attained by
each Participant. Except as otherwise provided in Section 14
hereof, no award may be payable to a Participant prior to such
certification.
The Committee shall have the
sole authority to set all financial performance opportunities and
to modify such financial performance opportunities during the Plan
Year as deemed appropriate; provided, however, that the Committee
may not modify the performance objectives during a Plan Year to
increase the award payable to a Covered Employee.
| 9. |
Individual Business Objectives. The Committee, at its
sole discretion, may allocate a portion of a Participant’s
Bonus Award Opportunity for the Plan Year to the
Participant’s Individual Business Objectives. Subject to
Section 7, awards for the achievement of these objectives can
range from 0% to 150% of the Bonus Award Opportunity assigned
thereto. The Committee shall determine the actual level of
performance achieved by Participants for their Individual Business
Objectives. For any Participant determined to be a Covered
Employee, no such bonus will be paid for Individual Business
Objectives for that fiscal year. |
| 10. |
Administration—Powers and Duties of the
Committee. |
a. Administration. The
Committee shall be responsible for the administration of the MIP.
The Committee, by majority action, is authorized to interpret the
MIP, to prescribe, amend, and rescind rules and regulations
relating to the MIP, to provide for conditions and assurances
deemed necessary or advisable to protect the interest of the
Company and to make all other determinations necessary or advisable
for the administration of the MIP. Determinations by the Committee
under the MIP need not be uniform and may be made by it selectively
among Participants, w
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