EXHIBIT 10.13
WOLVERINE WORLD WIDE, INC.
EXECUTIVE LONG-TERM INCENTIVE (THREE YEAR) PLAN
1994-1996 PERIOD
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 The Wolverine World Wide, Inc. Executive Long-Term Incentive
(Three Year) Plan, as summarized herein, is established by Wolverine World
Wide, Inc. ("Wolverine" or the "Company") for the three-year fiscal period
of 1994-1996 and may be continued, intact or as amended, from year to year,
at the Company's option.
1.2 The primary purposes of the plan are to:
(a) Encourage longer range strategic planning and not
stress over-dependence on short-term performance which could be
at the expense of long-term increases in stockholder value and/or
achieving a strategic position/advantage in the marketplace.
(b) Encourage cooperation among all the units of the
Company so as to foster a closer and more cooperative association
and sense of teamwork.
(c) Encourage key management individuals to enter and
continue in the employ of the Company.
ARTICLE II
CONCEPT OF THE PLAN
2.1 (a) The primary concept of the plan is to establish a
financial goal for each three-year time period for the Company.
These periods are overlapping. The goal needs to be both closely
identified with the interests of the stockholders and easily
understood.
(b) The goals for all plans through 1996 are expressed in
terms of earnings per share (E.P.S.). The Compensation Committee
has determined that this goal meets the objectives stated above.
The definition of "earnings per share," for this purpose, is the
Company's net after-tax earnings per common share of stock after
all expenses and taxes, except for the payment of the three-year
bonus itself.
ARTICLE III
GOALS FOR 1994-1996 PLAN
(EARNINGS PER SHARE, POST '94 SPLIT)
YEAR THRESHOLD TARGET MAXIMUM
1994 $ 1.17 $ 1.37 $ 1.64
1995 1.33 1.57 1.89
1996 1.56 1.80 2.17
TOTAL $ 4.06 $ 4.74 $ 5.70
Note: In order to pay a bonus, E.P.S. in the third year must be at least
20 percent of the total E.P.S. goal for the three-year period (e.g., at
Threshold, E.P.S. for 1996 must be $0.81 per share, 20% X $4.06).
SPECIAL NOTE
The Compensation Committee reserves the right to reduce any
Participant's bonus if his/her performance was not satisfactory during any
year of the Plan and/or if his/her unit did not achieve 80 percent of the
Unit Target Goal for the three-year period (as noted in the Executive
Annual Bonus Plan) and/or if the Chief Executive Officer recommends a
reduction in an individual's bonus.
PAYOUT AGAINST GOALS
Payout under the 1994-96 Plan as a percentage of each
Participant's individual target bonus will be made according to the final
schedule:
GOAL PAYOUT AS % OF TARGET BONUS<F*>
Threshold $4.06 50%
Target $4.74 100%
Maximum $5.70 150%
<FN>
<F*> For E.P.S. between the goals shown, the payout as a percentage of
Target Bonus will be determined by straight line interpretation.
</FN>
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ARTICLE IV
MANNER OF PAYMENT
CASH PAYOUT AND RESTRICTED STOCK.
4.1 GENERAL. Each Participant will receive part of his or her bonus
in cash and part in restricted stock according to the terms below.
4.2 CASH PAYOUT. Each Participant will receive a cash payment equal
to fifty percent (50%) of his or her formula award. The Company will make
the cash payment within 30 days of acceptance of the fiscal year 1996
certified audit by the Board of Directors.
4.3 RESTRICTED STOCK. Each Participant will also receive a grant of
restricted stock on the same date the cash payment is made pursuant to
Section 4.2. The number of shares of restricted stock a Participant shall
receive will equal seventy five percent (75%) of the formula award divided
by the market value of the Company's Common Stock on the date of grant,
rounded to the nearest whole share. The restrictions imposed on the
restricted stock shall lapse in three equal annual installments commencing
one year following the grant date. Each award of restricted stock shall be
evidenced by a restricted stock agreement containing such terms and
conditions, including vesting schedules, consistent with the provisions of
the Plan.
ARTICLE V
TERMINATION OF PARTICIPATION
5.1 RETIREMENT, DEATH, OR TOTAL DISABILITY. If a Participant ceases
to be a Participant before the end of any performance period and more than
12 months after the beginning of such performance period because of death,
normal or early retirement under the Company's retirement plan, as then in
effect, or total disability under the Company's long-term disability plan,
an award shall be paid to him or his estate after the end of such
performance period prorated as follows. The award, if any, for such
performance period shall be equal to 100 percent of the formula award of
the amount that he would have received if he had been a Participant during
the entire performance period, multiplied by the ratio of his full months
as a Participant during that performance period to the number of months in
that performance period. The award, if any, shall (unless the Company
otherwise determines) only be made in the form of a cash payout and no
shares of restricted stock shall be awarded.
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5.2 OTHER TERMINATION. If an employee ceases to be a Participant
during any performance period(s), or prior to actual receipt of the award
for a previous period because of the Participant's termination of
employment for any reason other than described in Section 5.1 above, the
Participant will not be entitled to any award for such performance period.
If a Participant continues in Wolverine's employment but no longer is
approved by the Board's Compensation Committee to participate in future
periods, his/her eligibility for a prorated award in current periods will
be determined solely by the Compensation Committee and communicated to the
Participant. Factors used in this determination could include the
Participant's past and current performance, reasons for the change in
participation and other job-related factors as determined by the
Compensation Committee.
ARTICLE VI
SUMMARY
This communication is meant to summarize the major elements of
the Wolverine World Wide, Inc. Executive Long-Term Incentive Plan. The
plan shall not be construed to give and does not give any Participant the
right to be retained in the employ of the Company.
The Board may discontinue the plan at any time, suspend the plan
at any time or from time to time, and from time to time amend the plan in
any respect, except that no amendment may be made which either would cause
any Participant to be deprived of any award previously earned but not paid
or would adversely affect any award such Participant might receive for any
performance period which commenced before such amendment was made. The
Board and/or the Compensation Committee may review at any time the plan and
its administration to determine whether the objectives of the plan continue
to be met. Where appropriate, the Chief Executive Officer will recommend
changes in the plan for adoption by the Board of Directors and/or the
Compensation Committee.
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