DARLING INTERNATIONAL INC.
COMPENSATION COMMITTEE
EXECUTIVE COMPENSATION PROGRAM
POLICY STATEMENT
This policy is a statement of the
plan for implementation of the Executive Compensation Program (the
“ Program ”) effective January 15, 2009 for
certain executives of Darling International Inc. (the “
Company ”), pursuant to the Company’s 2004
Omnibus Incentive Plan (the “ Omnibus Plan ”)
approved by its stockholders in May 2005. This Program
supersedes the prior executive compensation plan, which was adopted
under the Omnibus Plan on June 16, 2005 (the “ Prior
Program ”); however, the Prior Program will remain in
effect in respect of awards heretofore granted under the Prior
Program. Awards granted to employees under the Program
are intended to be “qualified performance based
compensation” under Article 12 of the Omnibus
Plan.
Program Objectives
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Reward Company executives for the
achievement of specific annual, long-term and strategic goals of
the Company throughout business cycles;
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Align the short and long-term
interests of Company executives with the interests of
stockholders;
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Attract and retain superior
executives;
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Provide compensation to Company
executives that is competitive with the compensation paid to
similarly situated executives; and
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Create retention incentives for
Company executives and provide an opportunity for increased equity
ownership by Company executives.
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Eligibility and
Participation
Participants of the Program (each, a “
Program Participant ” and collectively, the “
Program Participants ”) include the Company’s
chief executive officer (the “ CEO ”), the
Executive Vice President, Finance and Administration
(the “ CFO ”), the Company’s
Executive Vice Presidents the (“ EVPs ”), the
three most highly compensated executive officers, if any, of the
Company other than the CEO, the CFO and the EVPs (together with the
CEO, the CFO, and the EVPs, the “ named
executive officers ”) and such other executive officers
as the Compensation Committee of the Board of Directors of the
Company (the “ Compensation Committee ”) or the
CEO may determine from time to time.
Non-employee directors of the Company will
continue to receive formula-based equity compensation as more fully
described below.
Structure and
Implementation
The elements of compensation for each Program
Participant are base salary, annual incentive bonus and long-term
incentive equity awards.
Base Salary : The base salary element is
intended to compensate the Program Participants for services
rendered during each fiscal year. Base salary ranges
will be determined for a Program Participant based on his/her
position and responsibility and should generally be set at or near
the 50th percentile of base salary paid to similarly situated
executives of general industrial companies that have similar total
revenue and market capitalization and/or compete with the Company
for management talent (“ Peer Companies ”);
provided, that the Compensation Committee shall have authority to
deviate from such percentile target as it deems necessary or
appropriate to achieve the Program objectives. Salary
information of Peer Companies will be determined by using market
data supplied by an outside global human resources consulting firm
or other independent third party resource.
Annual Incentives : The annual incentive bonus element
for each Program Participant will be the possibility of a cash
bonus that will be awarded upon the Program Participant’s
achievement of both of two separate components: the
Company’s realization of certain financial measures, which
will account for 75% of the annual incentive bonus, and the
achievement of specific strategic, operational and personal goals
(“ SOPs ”) designed for each Plan Participant
based on his/her title and roles and responsibilities with the
Company. The SOPs will account for 25% of the annual
incentive bonus.
The financial measures component will be based
on the Company’s yearly return on gross investment (“
ROGI ”), which is defined as earnings before interest,
taxes, depreciation and amortization divided by the sum of total
assets plus accumulated depreciation minus other liabilities (other
than those incurred to financing institutions), including, but not
limited to, accounts payable, accrued expenses, pension
liabilities, other non-current liabilities and deferred income
taxes. The Company’s yearly ROGI will be
calculated as of the end of each fiscal year based on the
Company’s financial statements prepared for and presented in
Company’s Annual Report on Form 10-K; however, from time to
time, the calculation of ROGI will be adjusted in the discretion of
the Compensati
