content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
  
                                      FORM 8-K
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
  
         Date of Report (Date of earliest event reported): [March 6, 2007]
  
  
                           UNITED INDUSTRIAL CORPORATION
               (Exact name of registrant as specified in its charter)
  
  
          DELAWARE                        1-4252           95-2081809
    (State or other jurisdiction       (Commission      (I.R.S. Employer
        of incorporation)              File Number)     Identification No.)
  
          124 INDUSTRY LANE, HUNT VALLEY, MD              21030
       (Address of principal executive offices)         (Zip Code)
  
  
                                   (410) 628-3500
                (Registrant's telephone number, including area code)
  
  
  
           (Former name or former address, if changed since last report)
  
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):
  
  [ ] Written communications pursuant to Rule 425 under the Securities Act
      (17 CFR 230.425)
  
  [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
       (17 CFR 240.14a-12)
  
  [ ] Pre-commencement communications pursuant to Rule 14d-2(b)under the
      Exchange Act (17 CFR 240.14d-2(b))
  
  [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
  
  <PAGE>
  
  
  
  SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
  
  ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
  APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
  
  ADOPTION OF 2007 MANAGEMENT INCENTIVE PLAN
  
  On March 6, 2007, the Board of Directors adopted the 2007 Management Incentive
  Plan ("MIP") of the Company for the year ending December 31, 2007. The following
  description of the MIP is not complete and is qualified in its entirety by the
  full text of the MIP, a copy of which is attached as Exhibit 10.1 hereto and
  incorporated herein by reference. The MIP is a variable cash-based incentive
  plan designed to focus management's attention on performance factors important
  to the continued success of each business unit and the Company overall. The MIP
  is administered by the Compensation and Stock Option Committee (the
  "Compensation Committee"). Under the MIP, the Compensation Committee establishes
  a compensation "pool" based upon the extent to which the business unit meets or
  exceeds performance against annual performance measures set for each respective
  unit. The financial measures generally include, but are not limited to, orders,
  profit and cash flow.
  
  Participants in the MIP are executive officers, including the President and
  Chief Executive Officer, and other selected senior managers in a position to
  significantly affect the performance of their business unit. The senior managers
  are generally managers with responsibility across an entire business unit (i.e.,
  headquarter executives, product line and other general program managers, and
  selected functional managers). The Compensation Committee approves the initial
  participants in the plan and any additions of executive officers during the plan
  year. The President and Chief Executive Officer has been delegated the authority
  by the Compensation Committee, during the plan year, to add participants based
  on new hires and promotions to, and to remove participants from, the MIP, other
  than executive officers.
  
  Annual incentive awards may range from zero to 200% of the target incentive
  compensation. Target incentive compensation is a percent of base salary. The
  target incentive percent varies from 10% to 50% of the participant's base
  salary, depending on the participant's salary grade, among other factors, and is
  determined using competitive data for short-term incentive compensation and in
  relation to the executive's total compensation package. Targets for the
  executive officers range between 20-45% and, in the case of the President and
  Chief Executive Officer, 50%. Awards for participants generally are based on a
  combination of business unit performance and personal performance objectives.
  The weighting of these factors can vary from one business unit to another,
  reflecting the relative importance of business performance to personal
  performance for that business unit during any year. If a certain threshold is
  not realized, the incentive is not paid.
  
  The business performance is based upon financial performance measures that are
  important to the business unit. Budgets, as well as past and expected future
  performance results, are criteria used in setting business performance targets.
  The Compensation Committee approves the business performance targets for all
  executive officers. The business performance targets for all other participants
  are reviewed and approved by the Company's chief executive officer, subject to
  approval by the Compensation Committee as it deems appropriate. The Compensation
  Committee has the discretion to adjust business performance measures in
  determining actual business performance to take into account events and
  circumstances not contemplated when the business performance measures were
  approved.
  
  The personal performance objectives are important personal objectives directly
  related to the participant's major responsibilities. For example, those
  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. The personal performance
  objectives of the President and Chief Executive Officer are approved by the
  Compensation Committee. The personal performance objectives of the other named
  executive officers are approved by the President and Chief Executive Officer,
  subject to approval by the Compensation Committee as it deems appropriate. The
  personal performance objectives for all other participants are mutually agreed
  to by the participant and his or her manager, subject to approval by the
  President and Chief Executive Officer as he deems appropriate.
  
  Personal performance objectives are reviewed and revised during the plan year to
  take into account significant achievements not contemplated at the time the
  personal performance objectives were initially approved. Revisions to the
  personal performance objectives of the President and Chief Executive Officer and
  other executive officers are approved by the Compensation Committee. The
  Compensation Committee has delegated the authority to the President and Chief
  Executive Officer the right to make changes to the personal performance
  objectives of participants other than executive officers. Revisions to the
  personal performance objectives for all other participants are approved by the
  participant's manager, subject to approval by the President and Chief Executive
  Officer as he deems appropriate.
  
  To determine an employee's incentive award, both performance the business
  performance and personal performance objectives factors are rated and weighted
  according to the predetermined split. The two results are totaled and multiplied
  by the participant's base salary to determine the incentive compensation. If the
  requisite performance objectives are not realized, no incentive compensation is
  paid to the participant. The predetermined split for the President and Chief
  Executive Officer is approved by the Compensation Committee. The predetermined
  split for the other executive officers is approved by the President and Chief
  Executive Officer, subject to approval by the Compensation Committee as it deems
  appropriate. The predetermined split for all other participants is approved by
  the President and Chief Executive Officer. Commencing in 2007, the Compensation
  Committee has determined that the predetermined split for all corporate and
  business unit participants, including all executive officers, shall be 75% for
  business performance and 25% for personal performance objectives.
  
  Because of the discretionary nature of the MIP targets and objectives, the MIP
  is not intended to satisfy Internal Revenue Code ("Code") Section 162(m).
  
  Payment of awards earned under the MIP will generally be made by March 15, 2008,
  subject to a participant's continued employment with the Company at the time of
  payment. However, if a participant dies, retires, is laid off, or becomes
  disabled after the close of 2007, but before payment is made, payment of the
  award will be made by March 15, 2008. If death, retirement, layoff or disability
  occurs during 2007, the award will be prorated based on the portion of the year
  in which the participant was employed and payment will be made by March 15,
  2008.
  
  2006 MANAGEMENT INCENTIVE PLAN AWARDS
  
  On March 6, 2007, the Board of Directors approved the following payments under
  the Company's 2006 MIP to the Company's executive officers for services provided
  during the fiscal year ended December 31, 2006.
  
  Frederick M. Strader     President and Chief Executive          $500,000
                           Officer of the Company
  
  James H. Perry           Vice President, Chief Financial        $206,736
                           Officer and Controller of the Company
  
  Jonathan A. Greenberg    Vice President, General Counsel and    $174,103
                           Secretary of the Company
  
  Stuart F. Gray           Treasurer of the Company               $ 41,597
  
  In January 2007, the Company determined that John F. Michitsch and Michael A.
  Boden were executive officers of the Company for purposes of Section 16 of the
  Securities Exchange Act of 1934, as amended. On March 6, 2007, the Board of
  Directors also approved the following payments under the Company's 2006 MIP to
  John F. Michitsch and Michael A. Boden for services provided during the fiscal
  year ended December 31, 2006.
  
  John F. Michitsch        Executive Vice President               $151,742
                           of AAI Corporation
  Michael A. Boden         Executive Vice President,              $185,279
                           Operations of AAI Corporation
  
  The business performance and personal performance objectives under the 2006 MIP
  for each of the Company's executives were met or exceeded. Under the 2006 MIP
  calculations, the award to Mr. Strader was $492,436. Because of Mr. Strader's
  substantial efforts during 2006, the Compensation Committee determined to
  increase the award to $500,000.
  
  <PAGE>
  
  EMPLOYEE STOCK OPTION GRANT AGREEMENT
  
  A copy of the form of Company's form of employee stock option grant agreement is
  attached as Exhibit 10.2.
  
  SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
  
  ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.
  
  (d) Exhibits.
  
  EXHIBIT     DESCRIPTION
  
  10.1        2007 Management Incentive Agreement
  10.2        Form of Employee Stock Option Grant Agreement Under
              2006 Long Term Incentive Plan
  
  
  <PAGE>
  
  
  
  
                                     SIGNATURE
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
  the registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  United Industrial Corporation
  
  
  By: /s/ James H. Perry
      -----------------------------------------------------
      James H. Perry
      Chief Financial Officer and
      Vice President
  
  
  Date:  March 12, 2007
  
  
  <PAGE>
  
  
  
  
                                   EXHIBIT INDEX
  
  EXHIBIT     DESCRIPTION
  
  10.1        2007 Management Incentive Agreement
  10.2        Form of Employee Stock Option Grant Agreement Under
              2006 Long Term Incentive Plan
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text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 8-K
  
                                   CURRENT REPORT
       Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
  
         Date of Report (Date of earliest event reported): [March 6, 2007]
  
                           UNITED INDUSTRIAL CORPORATION
               (Exact name of registrant as specified in its charter)
  
          DELAWARE                        1-4252           95-2081809
    (State or other jurisdiction       (Commission      (I.R.S. Employer
        of incorporation)              File Number)     Identification No.)
  
          124 INDUSTRY LANE, HUNT VALLEY, MD              21030
       (Address of principal executive offices)         (Zip Code)
  
                                   (410) 628-3500
                (Registrant's telephone number, including area code)
  
           (Former name or former address, if changed since last report)
  
  Check the appropriate box below if the Form 8-K filing is intended to
  simultaneously satisfy the filing obligation of the registrant under any of the
  following provisions (see General Instruction A.2. below):
  
  [ ] Written communications pursuant to Rule 425 under the Securities Act
      (17 CFR 230.425)
  
  [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act
       (17 CFR 240.14a-12)
  
  [ ] Pre-commencement communications pursuant to Rule 14d-2(b)under the
      Exchange Act (17 CFR 240.14d-2(b))
  
  [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
      Exchange Act (17 CFR 240.13e-4(c))
  SECTION 5 - CORPORATE GOVERNANCE AND MANAGEMENT
  
  ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
  APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS
  
  ADOPTION OF 2007 MANAGEMENT INCENTIVE PLAN
  
  On March 6, 2007, the Board of Directors adopted the 2007 Management Incentive
  Plan ("MIP") of the Company for the year ending December 31, 2007. The following
  description of the MIP is not complete and is qualified in its entirety by the
  full text of the MIP, a copy of which is attached as Exhibit 10.1 hereto and
  incorporated herein by reference. The MIP is a variable cash-based incentive
  plan designed to focus management's attention on performance factors important
  to the continued success of each business unit and the Company overall. The MIP
  is administered by the Compensation and Stock Option Committee (the
  "Compensation Committee"). Under the MIP, the Compensation Committee establishes
  a compensation "pool" based upon the extent to which the business unit meets or
  exceeds performance against annual performance measures set for each respective
  unit. The financial measures generally include, but are not limited to, orders,
  profit and cash flow.
  
  Participants in the MIP are executive officers, including the President and
  Chief Executive Officer, and other selected senior managers in a position to
  significantly affect the performance of their business unit. The senior managers
  are generally managers with responsibility across an entire business unit (i.e.,
  headquarter executives, product line and other general program managers, and
  selected functional managers). The Compensation Committee approves the initial
  participants in the plan and any additions of executive officers during the plan
  year. The President and Chief Executive Officer has been delegated the authority
  by the Compensation Committee, during the plan year, to add participants based
  on new hires and promotions to, and to remove participants from, the MIP, other
  than executive officers.
  
  Annual incentive awards may range from zero to 200% of the target incentive
  compensation. Target incentive compensation is a percent of base salary. The
  target incentive percent varies from 10% to 50% of the participant's base
  salary, depending on the participant's salary grade, among other factors, and is
  determined using competitive data for short-term incentive compensation and in
  relation to the executive's total compensation package. Targets for the
  executive officers range between 20-45% and, in the case of the President and
  Chief Executive Officer, 50%. Awards for participants generally are based on a
  combination of business unit performance and personal performance objectives.
  The weighting of these factors can vary from one business unit to another,
  reflecting the relative importance of business performance to personal
  performance for that business unit during any year. If a certain threshold is
  not realized, the incentive is not paid.
  
  The business performance is based upon financial performance measures that are
  important to the business unit. Budgets, as well as past and expected future
  performance results, are criteria used in setting business performance targets.
  The Compensation Committee approves the business performance targets for all
  executive officers. The business performance targets for all other participants
  are reviewed and approved by the Company's chief executive officer, subject to
  approval by the Compensation Committee as it deems appropriate. The Compensation
  Committee has the discretion to adjust business performance measures in
  determining actual business performance to take into account events and
  circumstances not contemplated when the business performance measures were
  approved.
  
  The personal performance objectives are important personal objectives directly
  related to the participant's major responsibilities. For example, those
  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. The personal performance
  objectives of the President and Chief Executive Officer are approved by the
  Compensation Committee. The personal performance objectives of the other named
  executive officers are approved by the President and Chief Executive Officer,
  subject to approval by the Compensation Committee as it deems appropriate. The
  personal performance objectives for all other participants are mutually agreed
  to by the participant and his or her manager, subject to approval by the
  President and Chief Executive Officer as he deems appropriate.
  
  Personal performance objectives are reviewed and revised during the plan year to
  take into account significant achievements not contemplated at the time the
  personal performance objectives were initially approved. Revisions to the
  personal performance objectives of the President and Chief Executive Officer and
  other executive officers are approved by the Compensation Committee. The
  Compensation Committee has delegated the authority to the President and Chief
  Executive Officer the right to make changes to the personal performance
  objectives of participants other than executive officers. Revisions to the
  personal performance objectives for all other participants are approved by the
  participant's manager, subject to approval by the President and Chief Executive
  Officer as he deems appropriate.
  
  To determine an employee's incentive award, both performance the business
  performance and personal performance objectives factors are rated and weighted
  according to the predetermined split. The two results are totaled and multiplied
  by the participant's base salary to determine the incentive compensation. If the
  requisite performance objectives are not realized, no incentive compensation is
  paid to the participant. The predetermined split for the President and Chief
  Executive Officer is approved by the Compensation Committee. The predetermined
  split for the other executive officers is approved by the President and Chief
  Executive Officer, subject to approval by the Compensation Committee as it deems
  appropriate. The predetermined split for all other participants is approved by
  the President and Chief Executive Officer. Commencing in 2007, the Compensation
  Committee has determined that the predetermined split for all corporate and
  business unit participants, including all executive officers, shall be 75% for
  business performance and 25% for personal performance objectives.
  
  Because of the discretionary nature of the MIP targets and objectives, the MIP
  is not intended to satisfy Internal Revenue Code ("Code") Section 162(m).
  
  Payment of awards earned under the MIP will generally be made by March 15, 2008,
  subject to a participant's continued employment with the Company at the time of
  payment. However, if a participant dies, retires, is laid off, or becomes
  disabled after the close of 2007, but before payment is made, payment of the
  award will be made by March 15, 2008. If death, retirement, layoff or disability
  occurs during 2007, the award will be prorated based on the portion of the year
  in which the participant was employed and payment will be made by March 15,
  2008.
  
  2006 MANAGEMENT INCENTIVE PLAN AWARDS
  
  On March 6, 2007, the Board of Directors approved the following payments under
  the Company's 2006 MIP to the Company's executive officers for services provided
  during the fiscal year ended December 31, 2006.
  
  Frederick M. Strader     President and Chief Executive          $500,000
                           Officer of the Company
  
  James H. Perry           Vice President, Chief Financial        $206,736
                           Officer and Controller of the Company
  
  Jonathan A. Greenberg    Vice President, General Counsel and    $174,103
                           Secretary of the Company
  
  Stuart F. Gray           Treasurer of the Company               $ 41,597
  
  In January 2007, the Company determined that John F. Michitsch and Michael A.
  Boden were executive officers of the Company for purposes of Section 16 of the
  Securities Exchange Act of 1934, as amended. On March 6, 2007, the Board of
  Directors also approved the following payments under the Company's 2006 MIP to
  John F. Michitsch and Michael A. Boden for services provided during the fiscal
  year ended December 31, 2006.
  
  John F. Michitsch        Executive Vice President               $151,742
                           of AAI Corporation
  Michael A. Boden         Executive Vice President,              $185,279
                           Operations of AAI Corporation
  
  The business performance and personal performance objectives under the 2006 MIP
  for each of the Company's executives were met or exceeded. Under the 2006 MIP
  calculations, the award to Mr. Strader was $492,436. Because of Mr. Strader's
  substantial efforts during 2006, the Compensation Committee determined to
  increase the award to $500,000.
  EMPLOYEE STOCK OPTION GRANT AGREEMENT
  
  A copy of the form of Company's form of employee stock option grant agreement is
  attached as Exhibit 10.2.
  
  SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
  
  ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.
  
  (d) Exhibits.
  
  EXHIBIT     DESCRIPTION
  
  10.1        2007 Management Incentive Agreement
  10.2        Form of Employee Stock Option Grant Agreement Under
              2006 Long Term Incentive Plan
  SIGNATURE
  
  Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
  the registrant has duly caused this Report to be signed on its behalf by the
  undersigned thereunto duly authorized.
  
  United Industrial Corporation
  
  By: /s/ James H. Perry
      -----------------------------------------------------
      James H. Perry
      Chief Financial Officer and
      Vice President
  
  Date:  March 12, 2007
  EXHIBIT INDEX
  
  EXHIBIT     DESCRIPTION
  
  10.1        2007 Management Incentive Agreement
  10.2        Form of Employee Stock Option Grant Agreement Under
              2006 Long Term Incentive Plan