Exhibit 10.1

                         UNITED INDUSTRIAL CORPORATION

                           Management Incentive Plan

                                  January 2007

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TABLE OF CONTENTS

Definitions...................................................................1
Plan Amendment and Termination................................................2
Effective Date of the Plan....................................................2

MANAGEMENT INCENTIVE PLAN (MIP)...............................................2
Philosophy....................................................................2
General Features..............................................................2
Payments......................................................................3
Entitlements..................................................................3
Administration................................................................4
Miscellaneous.................................................................5

SETTING FINANCIAL TARGETS AND PERFORMANCE OBJECTIVES..........................6

FINANCIAL TARGETS.............................................................6
Financial Target Measurement..................................................6
Guidelines for Objective Setting and Evaluation...............................6

PERFORMANCE OBJECTIVES........................................................7
Guidelines for Setting and Evaluating the Performance Objective...............7
Guidelines for Reviewing Overall Personal Performance.........................9
Incentive Calculation.........................................................9
Target Incentive Compensation Award (TICA) Amount Calculation- EXAMPLE.......10
SUMMARY......................................................................11
Termination of Employment....................................................14

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Definitions
Except as otherwise specified or as the context otherwise may require, the
following terms have the meanings indicated below for the purposes of this Plan:

BOARD means the Board of Directors of United Industrial Corporation, a Delaware
corporation, and its successors.

COMMITTEE means the Board's Compensation and Stock Option Committee, as
constituted from time to time by the Board.

COMPANY means UIC and each Subsidiary (as defined below) of UIC. Compensation
Year or Year means the fiscal year of UIC.

DISABILITY means disability according to the terms of the United Industrial
Corporation Long-Term Disability Plan, or comparable plan of any Subsidiary, as
from time to time may be applicable with respect to the particular Participant.

FULL PARTICIPANT means, other than a Limited Participant, an eligible Company
employee selected for Plan participation in accordance with the procedures set
forth herein, and whose compensation is calculated in U.S. dollars.

LIMITED PARTICIPANT means an eligible Company employee selected for Plan
participation in accordance with the procedures set forth herein, who is
seconded, on a temporary basis from a foreign subsidiary, and/or paid
compensation by Company with a basis in currency OTHER THAN U.S. dollars.

PARTICIPANT means, either collectively or individually, Limited Participant(s)
and Full Participant(s), as defined herein. Plan means the 2007 Management
Incentive Plan (MIP) as set forth herein. Plan Compensation means the incentive
compensation earned for the Year as a consequence of the Plan. Retirement means
retirement according to the terms of the retirement plan of the Company or its
Subsidiary.

SUBSIDIARY means any corporation in which the Company owns total equity
interest.

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PLAN AMENDMENT AND TERMINATION

UIC, by action of the Board or the Committee, may, in its sole and absolute
discretion, amend, suspend or terminate the Plan at any time, with or without
advance notice to Participants.

EFFECTIVE DATE OF THE PLAN

This Plan shall be effective as of January 1, 2007 and relates to the 2007
Compensation Year.

                        MANAGEMENT INCENTIVE PLAN (MIP)

PHILOSOPHY

The UIC Management Incentive Plan is a variable, cash-based incentive plan
designed to focus management attention on performance factors important to the
continued success of their business unit and the Company overall. Achievement of
high standards of business and individual performance should be rewarded
financially; conversely, significant compensation should be at risk for failure
to achieve those high standards. The opportunity to earn incentive compensation
in addition to base salary is an integral part of our total compensation
approach. The Plan serves as a direct link between a Participant's compensation
and the performance of a business unit or the Company overall.

GENERAL FEATURES

Participants are senior managers in a position to significantly affect the
performance of their business unit. These are generally managers with
responsibility across an entire business unit, i.e. headquarter executives;
product line and other general or program managers; and selected functional
managers.

To be eligible to be selected to participate, a new hire to the Company or a
newly eligible employee must be employed as of 30 September of the Compensation
Year. Part-year Participants (i.e., employed after 1 January but prior to 30
September of the Compensation Year) shall be eligible for Plan Compensation
calculated pro-rata to the number of days actively employed during the
Compensation Year.

Target incentives are a function of the annual results, both by the individual
and their business unit. It is over and above the base salary, established using
competitive comparisons.

The Target Incentive Compensation Award (TICA) percentage, a percentage of base
salary, is similarly determined.

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Plan Compensation may range from zero (0) to two hundred percent (200%) of a
Participant's TICA. The TICA percentage varies from ten (10) to fifty (50)
percent of Participant's base salary. Plan Compensation is not guaranteed. The
Plan requires reasonable risk on the part of the Participant, commensurate with
potential reward--an opportunity to raise total compensation significantly.

Full Participants are ELIGIBLE, but Limited Participants are INELIGIBLE, for the
following benefits:

  o  A  maximum  life  insurance   benefit  of  four  hundred  thousand  dollars
     ($400,000.00)

  o  If elected during enrollment, Long Term Disability (LTD)coverage on annual
     compensation, which shall include both the Participant's annual base salary
     and their TICA award,  as though earned at the one hundred  percent level),
     to a maximum benefit of two hundred thousand dollars  ($200,000.00) up to a
     maximum benefit of $10,000 a month.

  o  Accidental  Death and  Dismemberment  benefit  equal to three (3) times the
     Participant's   annual   compensation   (which   shall   include  both  the
     Participant's  annual base salary and their TICA award, as though earned at
     the one  hundred  percent  (100%)  level,  rounded  to the next  higher one
     thousand  dollars  ($1,000.00)  subject to a maximum of three  hundred  and
     thirty thousand dollars ($330,000.00)).

PAYMENTS

The distribution of Plan Compensation shall be made to Full Participants by
March 15, and to Limited Participants by the next regular pay cycle after March
15, following the Compensation Year.

ENTITLEMENTS

GENERAL  RULE:  Except  as  otherwise  set forth in the Plan,  to  receive  Plan
Compensation,  a  Participant  must be an employee of the Company at the time of
payment of Plan Compensation.

DEATH,  RETIREMENT,  LAYOFF AND DISABILITY:  If a Participant dies,  retires, is
laid off, or becomes disabled after the close of a Compensation Year, but before
payment is made, the distribution of Plan Compensation shall be made by March 15
following  the  Compensation  Year. If death,  retirement,  layoff or disability
occurs during the  Compensation  Year,  the award shall be prorated based on the
portion of the year the  Participant  was  employed and payment made by March 15
following the Compensation Year.

For purposes of this clause, layoff is a termination which is not for cause, as
defined below, but rather is due to a permanent or indefinite reduction in the
work force, including, but not limited to, the elimination of a Participant's
position as a result of facility closure, discontinuance or relocation of
operations, acquisition, reorganization or sale (including a sale by the Company
of a business unit, division, product line or functionally related group of
assets.)

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With respect to a Participant's Termination of Employment prior to the date of
Plan Compensation payment, termination shall be deemed to have been for cause:

A.   Absent an employment or service agreement,  change in control agreement, or
     similar  agreement  between the Company and the Participant in effect as of
     the date of termination (or where such an agreement does not define "cause"
     (or words of like import)), in the event: (i) Participant was convicted of,
     or  plead  guilty  or nolo  contendere  to,  a  felony;  (ii)  Participant:
     committed  illegal  or  willful  or  grossly  negligent  conduct,  acted in
     violation of the Company Code of Business Conduct and Ethics (including but
     not limited to acts of dishonesty or fraud), caused potential  reputational
     or  economic  injury  to the  Company;  or  (iii)  Participant  materially,
     willfully,  and  deliberately  failed to perform  his/her  duties,  despite
     written notice and an opportunity to effectively cure, as determined by the
     Committee; or

B.   As provided in any applicable  employment or service  agreement,  change in
     control  agreement,  or  similar  agreement  in  effect  as of the  date of
     termination,  provided,  however,  that with regard to any agreement  under
     which the  definition  of "cause" only applies on occurrence of a change in
     control,  such  definition  of "cause"  shall not apply  unless a change in
     control  actually  takes place (and then only with regard to a  termination
     thereafter),  in which  case  paragraph  A above  shall  apply to any other
     termination for cause.

ADMINISTRATION

The Plan shall be administered and interpreted by the Committee.

The Committee shall have full authority to select Participants in the Plan and
to make all other necessary determinations under the Plan. In particular, the
Committee shall have the authority:

To determine the TICA Percentage for each Participant hereunder;

To determine the terms and conditions, not inconsistent with the terms of this
Plan, of Plan Compensation granted hereunder, based on such factors, if any, as
the Committee shall determine in its sole discretion;

To grant exceptions to this rule, including but not limited to partial Plan
Compensation, which, unless otherwise indicated, shall not be deemed to be a
general revision to entitlement under the Plan by any Participant(s); and

To determine whether, to what extent, and under what circumstances, Plan
Compensation amounts shall be deferred either automatically or at the
Participant's election, in any case, subject to, and in accordance with, Section
409A of the Internal Revenue Code.

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GUIDELINES. The Committee shall, in its sole discretion, have the authority to
adopt, alter and repeal such administrative rules, guidelines and practices
governing this Plan and perform all acts, including the delegation of its
responsibilities (to the extent permitted by applicable law), as it shall, from
time to time, deem advisable; to construe and interpret the terms and provisions
of this Plan; and to otherwise supervise the administration of this Plan. The
Committee may, in its sole discretion, correct any defect, supply any omission
or reconcile any inconsistency in this Plan in the manner and to the extent it
shall deem necessary to effectuate the purpose and intent of this Plan. The
Committee may, in its sole discretion, adopt special guidelines and provisions
for persons who are residing in or employed in, or subject to, the taxes of, any
domestic or foreign jurisdictions to comply with applicable laws and
regulations, including, but not limited to, tax and securities laws of such
domestic or foreign jurisdictions.

DECISIONS FINAL. Any decision,  interpretation  or other action made or taken in
good faith by or at the direction of the Company, the Board or the Committee (or
any of its  members)  arising  out of or in  connection  with this Plan shall be
within the absolute  discretion of all and each of them, as the case may be, and
shall be final,  binding and  conclusive  on the Company and all  employees  and
Participants and their respective heirs, executors,  administrators,  successors
and assigns.

The Compensation Committee may delegate certain of these activities and all
other matters as it determines in its sole discretion.

MISCELLANEOUS

NO CONTRACT OR GUARANTEE OF CONTINUED EMPLOYMENT. For Full and Limited
Participants, unless otherwise superceded by a written service or employment
agreement (if any), or as may be required under applicable laws, participation
in the Plan shall not be deemed to be the grant of a right, a contract of
employment, nor a guarantee of continued employment. Subject to the terms of
such an agreement, the Company specifically reserves the right to terminate
employment of a Participant at any time with or without cause and with or
without notice or assigning a reason.

NO GUARANTEE OF PLAN COMPENSATION. Eligibility to participate and participation
in this Plan does not guarantee the payment of Plan Compensation. Participation
by Full and Limited Participants is determined for each Compensation Year;
participation in one or more Plan Year(s) does not guarantee participation in
any future Plan Year(s).

ASSIGNMENT AND TRANSFERS. Except for transfer by will or by the laws of descent
and distribution, rights under the Plan may not be transferred or assigned.

WITHHOLDING TAX. With respect to Plan Compensation, the Company will make
deductions i) permitted under agreement between Participant and the Company, ii)
required under applicable law, as of the date of distribution of the Plan
Compensation.

GOVERNING LAW. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the State of
Delaware (regardless of the law that might otherwise govern under applicable
Delaware principles of conflict of laws).

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              SETTING FINANCIAL TARGETS AND PERFORMANCE OBJECTIVES

Key to an effective and equitable management incentive plan are the quality,
realism and stretch of the financial targets and personal performance
objectives. In setting these targets and objectives, the Company focuses on high
standards, continuous improvement and Participant involvement. Plan Compensation
is built around these two basic factors: a Financial Target and a Performance
Objective. The weighting varies from one business unit to another, reflecting
the relative importance of business to individual performance for that unit
during any Compensation Year. The sum of the Financial Target factor percentage
and Performance Objective factor percentage is one hundred percent (100%). The
two factors are intended to be based upon significant results that need to be
achieved if the business unit's strategic and overall performance objectives are
to be realized.

The Financial Target measures metrics important to the business unit. Budgets,
as well as past and expected future performance results, are the criteria used
in setting the Financial Target.

The Performance Objective consists of important personal objectives directly
related to a Participant's major responsibilities. For example, these objectives
could include such areas as market and/or customer share improvement; cost
improvements; product development; pricing; inventory levels; introduction or
improvement of products, processes or systems; health, safety and environmental
performance; or management development. Personal performance objectives are set
annually for each Participant through the Key Accountability Document (KAD). The
Compensation Committee sets the personal performance objectives for the Chief
Executive Officer.

     UIC recognizes circumstances change throughout the year. A Participant's
     significant   achievements  for  the   Compensation   Year  which  are  not
     contemplated in the KAD will be reviewed and may be  incorporated  into the
     Participant's  Performance  Objective  Factor  at the  discretion  of their
     supervisor.  As to such unanticipated  significant  achievements by CEO (or
     other  Participants  for whom the  Committee  determines  its  review to be
     appropriate), the discretion shall be exercised by the Committee.

                               FINANCIAL TARGETS

FINANCIAL TARGET MEASUREMENT

At the beginning of the Compensation Year, Financial Targets are reviewed and
approved by the Committee. Budgets and adjusted past and expected business unit
performance are compared with previously set targets.

GUIDELINES FOR OBJECTIVE SETTING AND EVALUATION

A  Financial  Target of one (1.0) is the  level at which  the  business  unit is
expected to perform for the Compensation Year; achievement of the expected level
of financial  performance  would  result in a Financial  Target with a one (1.0)
rating.  Therefore,  each unit's  budget is the primary  starting  point for one
(1.0) Financial Target level.

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o The one (1.0) Financial Target is generally established at a level judged to
  have a reasonable  chance of attainment and match the  commitments  made to
  the UIC Board; the zero (0) and two (2.0) extremes are normally established
  in terms of reasonable stretch and relative risk.

o Financial Targets are first developed by unit/division management. The CEO and
  appropriate  staff  discuss  and agree upon  Financial  Targets  that would
  equate to the zero (0), one (1) and two (2) levels.

o In   rating  actual   performance   against  the  Financial Targets, actual
  performance  is  adjusted  to  level  the  effect  of  accounting  changes,
  acquisition  costs,  land sales,  strategic  restructuring  costs,  capital
  expenditures, etc.

o Adjusted actual performance is compared to the Financial Target. No award is
  made for results at or below the zero (0) level.  Twice the target award is
  paid for adjusted actual performance at or above the two (2.0) level.

o Financial Targets are approved by the Committee early in the Compensation Year
  but can be adjusted by the Committee in case of change in the business.

                             PERFORMANCE OBJECTIVES

GUIDELINES FOR SETTING AND EVALUATING THE PERFORMANCE OBJECTIVE

Each Participant submits personal performance objectives in KAD format to
his/her manager. Personal performance objectives are based on the major job
responsibilities assigned to the individual and are related to the business
unit's strategic and/or UIC's overall performance objectives.

o  To develop  personal  performance  objectives,  each  Participant must
   understand and commit to the operating  unit's business and human resources
   strategies.

o  The two to five most important personal performance  objectives should
   be  submitted  to the next  higher-level  manager for review and  approval.
   Objectives  should state results  required to help ensure that the personal
   performance can be measured.  In many cases,  measurement of results cannot
   be quantified.  When this quantification is not possible, there should be a
   clear   statement  of  the  criteria   that  will  be  used  to  judge  the
   accomplishment of the personal performance objectives.  For example, if the
   objective  is to  develop  a  strategic  plan,  success  is not  determined
   primarily  by a plan being  developed  on time but  rather  the  quality of
   thinking  that the plan  portrays.  The KAD should lay out the  criteria to
   determine the quality.  Measurements  enable the Participant and manager to
   determine  whether the  objective  or a portion of the  objective  has been
   successfully achieved.



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o  Objectives  should be stated in  measurable  terms and should  include
   timing.

o  Objectives  should  identify  specific  achievements  expected and not
   merely restate major responsibilities or plans to accomplish them.

o  Objectives  should be  realistic  with some  stretch and be based on actual
   conditions.

o  The degree of  difficulty  may vary among the  objectives.  A priority
   ranking or assessment of relative  difficulty,  included with the statement
   of the objective, will be of value during the review to determine the level
   of the Performance Objective rating.

o  In determining the Performance  Objective rating (using the scale of
   zero (0) to two (2)), the following are all to be considered:


      o    The  accomplishment  of annual objectives and the significance of
           those objectives to overall business unit results.

      o    Demonstration of leadership

      o    Degree of difficulty of the objectives.

      o    Overall   performance   of   major   responsibilities   including
           self-development.

      o    Performance  in  response  to   unanticipated   circumstances  or
           opportunities.

      o    Contributions  to the  management  team and  important  corporate
           initiatives.


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GUIDELINES FOR REVIEWING OVERALL PERSONAL PERFORMANCE

Five general levels of personal performance are suggested, with definitions of
possible performance and a suggested Performance Objective rating range for
each.

-------------------------------------------------------------------------------
Performance
Objective
Rating
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
0 to .5        Overall performance was considerably less than standard. Did
(KAD score     not meet objectives primarily because of own performance.
below 2)       Performance in unplanned circumstances was below expectations.
               Individual did not demonstrate satisfactory improvement during
               the year.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
..5 to .95      Overall performance of major position responsibilities did not
(KAD score     meet all expectations. Some objectives were achieved but not
between 2      in a totally satisfactory manner. Measurable progress was made
and 2.8)       during the year and current progress is satisfactory.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
..9 to 1.05     Overall performance of major responsibilities met current
(KAD score     standards. Objectives substantially met, especially those
between        of greater significance to business objectives. Performance in
2.8 and 3.1)   unplanned circumstances met or exceeded expectations.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1.1 to 1.5     Overall performance consistently met or exceeded standards
(KAD score     for all responsibilities. Objectives were generally exceeded
between        during the year. Function for which responsible has shown
3.2 and 4)     significant progress. Significant unplanned circumstances
               occurred during the year and related performance exceeded
               expectations
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
1.5 to 2.0     Outstanding performance in all aspects of current job. All
(KAD score     objectives were exceeded with recognition of these
between 4      accomplishments. Has demonstrated success of at least one major
and 5          breakthrough or significant project. Professional performer
               on all job functions and 4 and 5) recognized as such by peers
               and superiors.
--------------------------------------------------------------------------------

Achievement of more difficult objectives receives a higher Performance Objective
rating, which translates into a higher incentive award. For example, a
Participant who sets unusually demanding objectives and then misses one might
receive a 1.4 Performance Objective rating. A Participant who set more easily
achieved objectives and then hits them all might receive a 1.0 Performance
Objective rating.

                             INCENTIVE CALCULATION

To  determine  a  Participant's  Plan  Compensation,  the  Financial  Target and
Performance   Objective  factors  are  rated  and  weighted   according  to  the
predetermined  split.  The two results are totaled and multiplied by the product
of the Participant's Compensation Year base salary earnings multiplied times the
Participant's TICA (prorated for partial-year  participation as may be permitted
or as otherwise approved).


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1. TARGET INCENTIVE COMPENSATION AWARD (TICA) AMOUNT CALCULATION- EXAMPLE

If your base salary is $100,000.00 and in the Plan Year, your Target Percentage
is ten percent (10%), the TICA Amount is calculated as follows:

Assume:
Your Base Salary: $100,000
Your Target Percentage: 10%
Your Target Incentive Compensation Award Amount: $10,000
You were employed the entire year

2. WEIGHTED PERFORMANCE FACTOR CALCULATION:

Assume for the Plan Year:

Your Performance Factor is weighted at thirty percent (30%) of the overall bonus
award.

Your Performance Factor rating was 1.2, (or a KAD score of 3.4)

The Performance Factor calculation would be:
$100,000 * 10% * (30% * 1.2) = $3,600.00

3. WEIGHTED FINANCIAL FACTOR CALCULATION

Assume for the Plan Year:

Your Financial Factor is weighted at seventy percent (70%) of the overall bonus
award.

To determine Your Financial Factor, examine the weighted result of each of the
three Financial Target sub-factors (i.e., orders, profit, cash):

Orders:  with a weight of forty percent  (40%),  for which you achieved a result
against target of 1.2, resulting in a sub-factor of .48


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Profit:  with a weight of thirty percent (30%),  for which you achieved a result
against target of .8 resulting in a sub-factor of .24

Cash: with a weight of thirty percent (30%), for which you achieved a result
against target of 2 resulting in a sub-factor of .6 The overall Financial Factor
in this example would be 1.32 (.48+.24+.6).

The Financial Factor calculation would be:
$100,000 * 10% * (70% * 1.32) = $9,240.00

4. FINAL MIP BONUS CALCULATION:

Performance Factor + Financial Factor
$3,600.00 + $9,240.00= $12,840.00

                                    SUMMARY

UIC's Management Incentive Plan is an integral part of our competitive total
compensation program, offering incentives and rewards offset by commensurate
risk. Participants are individually selected from among those managers whose
decisions significantly affect UIC's performance.

Financial Targets and Performance Objectives are set in areas that require focus
and emphasis in the Compensation Year including actions intended to execute
longer term strategies. Performance is rigorously measured against the Financial
Targets and Performance Objectives and on an overall basis.

Both business unit and individual performance affect incentive awards.