EXHIBIT 10u.
OFFICERS INCENTIVE COMPENSATION PLAN
GROUP A - OFFICERS
FISCAL PERIOD 2001 - 2002
WINNEBAGO INDUSTRIES, INC.
OFFICERS INCENTIVE COMPENSATION PLAN
FISCAL PERIOD 2001- 2002
1. PURPOSE. The purpose of the Winnebago Industries, Inc. Officers Incentive
Compensation Plan (the "Plan") is to promote the growth and profitability
of Winnebago Industries, Inc. (the "Company") by providing its officers
with an incentive to achieve corporate profit objectives and to attract
and retain officers who will contribute to the achievement of growth and
profitability of the company.
2. ADMINISTRATION.
a. HUMAN RESOURCES COMMITTEE. The Plan shall be administered by a
Committee (the "Committee") appointed by the Board of
Directors.
b. POWERS AND DUTIES. The Committee shall have sole discretion
and authority to make any and all determinations necessary or
advisable for administration of the Plan and may amend or
revoke any rule or regulation so established for the proper
administration of the Plan. All interpretations, decisions, or
determinations made by the Committee pursuant to the Plan
shall be final and conclusive.
c. ANNUAL APPROVAL. The Committee must approve the Plan prior to
the beginning of each new fiscal year.
3. PARTICIPATION ELIGIBILITY.
a. Participants must be an officer of the Company with
responsibilities that can have a real impact on the
Corporation's end results.
b. The Committee will approve all initial participation prior to
the beginning of each new program except as provided for in
Section c. below.
c. The President of Winnebago Industries, Inc. will make the
determination on participation for new participants, for
payment of earned holdback allocations due to retirement or
disability and other related partial year participation issues
necessary to maintain routine and equitable administration of
the Plan.
4. NATURE OF THE PLAN. The incentive award is based upon financial
performance of the Corporation as established by the Management Plan. The
Plan is an annual program that provides for quarterly cumulative
measurements of financial performance and an opportunity for quarterly
incentive payment based on performance results.
The financial performance measurements for this Plan will be earnings per
share and return on equity of the Company. These financial performance
measurements will provide an appropriate balance between quality and
quantity of earnings. The Company's beginning of the fiscal year
stockholders' equity will be used as the base figure for the calculation
of return on equity. Any stock repurchase program, adopted or completed
outside of the Management Plan, will not be considered in the earnings per
share and the return on equity calculations.
5. METHOD OF PAYMENT. The amount of the participants' incentive compensation
for the quarter shall be in direct proportion to the financial performance
expressed as a percentage (Financial Factor) against predetermined
compensation targets for each participant. Upon completion of the first
quarter of the fiscal year, quarterly results thereafter shall be combined
to form cumulative fiscal year-to-date results. The results for the
respective period will be used in identifying the Financial Factor to be
used for that period when calculating the participants' incentive
compensation.
50% of the quarterly calculated incentive will be paid within 45 days
after the close of the fiscal quarter. The remaining 50% of the quarterly
calculated incentive will be held back and carried forward into the next
cumulative quarter. At the end of the fourth fiscal quarter (fiscal year
end), a final year-end accounting will be made prior to the payment of any
remaining incentive holdback for the year.
The incentive for the officers except for the Chief Executive Officer,
provides for a 60% bonus (Target) comprised of (2/3) cash and (1/3) stock
at 100% achievement of the financial objectives of earnings per share and
return on equity. The incentive for the Chief Executive Officer provides
for a 87.5% bonus (Target) comprised of (2/3) cash and (1/3) stock at 100%
achievement of the financial objectives of earnings per share and return
on equity.
A participant must be employed by Winnebago Industries, Inc. at the end of
the fiscal year to be eligible for any previous quarterly holdback
allocations except as waived by the President of Winnebago Industries,
Inc. for normal retirement and disability.
6. STRATEGIC PERFORMANCE. The Human Resources Committee reserves the right to
modify the core incentive eligibility by plus/minus 20% (of the calculated
Financial Factor) based upon strategic organizational priorities.
Strategic performance will be measured at the end of the fiscal year only.
Strategic measurements may focus on one or more of the following strategic
factors but are not limited to those stated.
Revenue Growth Customer Satisfaction
Market Share Inventory Management
Product Quality Technical Innovation
Product Introductions Ethical Business Practices
7. ANNUAL STOCK MATCH. 50% of the total cash incentives earned for the year
will be matched annually and paid in restricted stock to encourage stock
ownership and promote the long-term growth and profitability of Winnebago
Industries, Inc.
8. CHANGE IN CONTROL. In the event the Company undergoes a change in control
during the Plan year including, without limitation, an acquisition or
merger involving the Corporation ("Change in Control"), the Committee
shall, prior to the effective date of the Change in Control (the
"Effective Date"), make a good faith estimate with respect to the
achievement of the financial performance through the end of the Plan year
immediately preceding the Effective Date. In making such estimate, the
Committee may compare the achievement of the finance performance against
forecast through the Plan period and may consider such factors as it deems
appropriate. The Committee shall exclude from any such estimate any and
all costs and expenses arising out of or in connection with the Change in
Control. Based on such estimate, the Committee shall make a full Plan year
award within 15 days after the Effective Date to all participants. Any
holdback for previous period(s) will be released and paid to the
participant together with the annual stock match payment earned.
"CHANGE IN CONTROL" for the purposes of the Officers Incentive
Compensation Plan shall mean the time when (i) any Person becomes an
Acquiring Person, or (ii) individuals who shall qualify as Continuing
Directors of the Company shall have ceased for any reason to constitute at
least a majority of the Board of Directors of the Company, provided
however, that in the case of either clause (i) or (ii) a Change of Control
shall not be deemed to have occurred if the event shall have been approved
prior to the occurrence thereof by a majority of the Continuing Directors
who shall then be members of such Board of Directors, and in the case of
clause (i) a Change of Control shall not be deemed to have occurred upon
the acquisition of stock of the Company by a pension, profit sharing,
stock bonus, employee stock ownership plan or other retirement plan
intended to be qualified under Section 401 (a) of the Internal Revenue
Code of 1986, as amended, established by the Company or any subsidiary of
the Company. (In addition, stock held by such a plan shall not be treated
as outstanding in determining ownership percentages for purposes of this
definition.)
For the purpose of the definition "Change of Control:"
(a) "Continuing Director" means (i) any member of the Board of
Directors of the Company, while such person is a member of the
Board, who is not an Affiliate or Associate of any Acquiring
Person or of any such Acquiring Person's Affiliate or
Associate and was a member of the Board prior to the time when
such Acquiring Person shall have become an Acquiring Person,
and (ii) any successor of a Continuing Director, while such
successor is a member of the Board, who is not an Acquiring
Person or any Affiliate or Associate of any Acquiring Person
or a representative or nominee of an Acquiring Person or of
any affiliate or associate of such Acquiring Person and is
recommended or elected to succeed the Continuing Director by a
majority of the Continuing Directors.
(b) "Acquiring Person" means any Person or any individual or group
of Affiliates or Associates of such Person who acquires
beneficial ownership, directly or indirectly, of 20% or more
of the outstanding stock of the Company if such acquisition
occurs in whole or in part, except that the term "Acquiring
Person" shall not include a Hanson Family Member or an
Affiliate or Associate of a Hanson Family Member.
(c) "Affiliate" means a Person that directly or indirectly through
one or more intermediaries, controls, or is controlled by, or
is under common control with, the person specified.
(d) "Associate" means (I) any corporate, partnership, limited
liability company, entity or organization (other than the
Company or a majority-owned subsidiary of the Company) of
which such a Person is an officer, director, member, or
partner or is, directly or indirectly the beneficial owner of
ten percent (10%) or more of the class of equity securities,
(2) any trust or fund in which such person has a substantial
beneficial interest or as to which such person serves as
trustee or in a similar fiduciary capacity, (3) any relative
or spouse of such person, or any relative of such spouse, or
(4) any investment company for which such person or any
Affiliate of such person serves as investment advisor.
(e) "Hanson Family Member" means John K. Hanson and Luise V.
Hanson (and the executors or administrators of their estates),
their lineal descendants (and the executors or administrators
of their estates), the spouses of their lineal descendants
(and the executors or administrators of their estates) and the
John K. and Luise V. Hanson Foundation.
(f) "Company" means Winnebago Industries, Inc., an Iowa
corporation.
(g) "Person" means an individual, corporation, limited liability
company, partnership, association, joint stock company, trust,
unincorporated organization or government or political
subdivision thereof.
9. GOVERNING LAW. Except to the extent preempted by federal law, the
consideration and operation of the Plan shall be governed by the laws of
the State of Iowa.
10. EMPLOYMENT RIGHTS. Nothing in this Plan shall confer upon any employee the
right to continue in the employ of the Company, or affect the right of the
Company to terminate an employee's employment at any time, with or without
cause.
Approved by:
/s/ Bruce D. Hertzke 10-17-01
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Bruce D. Hertzke Dated
Chairman of the Board, CEO and President
/s/ Frederick M. Zimmerman 10-17-01
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Frederick M. Zimmerman Dated
Human Resources Committee Chairman