Exhibit 10.5


 


BIRDS EYE FOODS


MANAGEMENT INCENTIVE PROGRAM


 


Birds Eye Foods Management
Incentive Program is a discretionary annual cash bonus program. The objective
of the program is to align key managers’ financial objectives with those of
Birds Eye Foods owners. The Plan recognizes the impact key managers can have on
the achievement of Birds Eye Foods’ business goals by rewarding those
achievements.


 


Participation


 


Participation is limited to a
group of key managers selected by the management executive committee and
approved by the board of directors. Participation will be determined each year,
and participation in one year does not guarantee participation in future years.


 


Target Bonus Awards


 


Individual target bonus
awards are established solely to create a bonus pool. Each participating
manager’s target bonus award, or bonus opportunity, is based on competitive
bonuses paid at other food companies which are similar in size to Birds Eye
Foods and is expressed as a percentage of base salary paid during the fiscal
year. The sum of these individual target bonus awards represents the company’s
target bonus pool.


 


Vice President, Director, and
Facility Managers- Target bonus percentages for salaried exempt employees at a
vice president, director or facility manager level are determined according to
a sliding scale.


 


All other selected
participants- Any other managers selected to participate in this program have a
target bonus percentage of 10% of base salary paid during the fiscal year.


 


Targeted Bonus Pool


 


The sum of all participants’
individual target bonus awards creates the overall target bonus pool.


 


Performance Targets


 


Approximately seventy percent
(70%) of the bonus pool will be based on EBITDA pre-incentives. Approximately
twenty percent (20%) of the bonus pool will be based on debt levels and working
capital management. The remaining ten percent (10%) of the bonus pool will be
based on Board discretionary goals established by the Board of Directors. The
performance targets and this program overall are subject to change each year to
insure they are consistent with Birds Eye Foods annual business objectives and
strategic direction.


 

















 


Incentive Awards


 


All individual awards are
discretionary and will be determined by the Management Executive Committee member
based on the associate’s individual performance, with final approval of the
Birds Eye Foods CEO. Therefore, favorable performance of Birds Eye Foods as a
whole does not guarantee a bonus payment to any individual participant; rather
it represents bonus opportunity. Participants’ individual target bonuses are
used solely to create the overall target bonus pool. Birds Eye Foods’
performance against pre-established targets will either increase or decrease
the bonus pool. The allocation to each individual of this bonus pool is totally
discretionary, based on individual performance. The maximum award any
participant may receive is 200% of his or her individual target bonus. Any
participant receiving a performance rating of ‘Below Expectations’ will be
ineligible for an annual bonus award.


 


The Compensation Committee of
the Board of Directors must approve all bonus payments before they are paid.


 


Payment of Bonuses


 


Individual bonus awards will
be paid via payroll on the September 15th following each fiscal year end. (“Highly
compensated employees” have the ability to defer all or a portion of their
annual bonus into the Non-qualified 401(k) Plan.) The payments are subject to
the appropriate income and payroll tax withholding, 401(k) deductions, and
court-ordered garnishments. Deferred awards are subject to FICA withholding in
the year they are earned.


 


In order to receive an award,
an individual must be an actively employed associate of the company and on the
active payroll on the September 15th payment date. Exceptions to this are for
retirement, disability or death, which may occasion pro-rata payments, based
upon actual salary earned during the fiscal year. Any other exceptions are to
be made only with the approval of the Birds Eye Foods CEO.


 


Future of the Program


 


This program is reviewed
annually by the Company and its board of directors to insure that it is
consistent with the company’s business objectives. The Company reserves the
right to amend or terminate this Program at any time, at its discretion.