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EXHIBIT 10(f)
EXECUTIVE ANNUAL PERFORMANCE INCENTIVE PLAN
The Coachmen Industries, Inc. Executive Annual Performance Incentive
Plan (hereinafter called the "Plan") was adopted by the Board of Directors of
Coachmen Industries, Inc, an Indiana corporation (hereinafter called the
"Company"), on October 20, 2000, to be effective January 1, 2001, and was
amended May 3, 2001 effective January 1, 2002.
ARTICLE 1
PURPOSE
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The Plan is intended to provide the Company a means by which it can
engender and sustain a sense of personal commitment and commonality of interest
on the part of its executives and senior managers in the continued growth,
development, and financial success of the Company and encourage them to remain
with and devote their best efforts to the business of the Company, thereby
advancing the interests of the Company and its shareholders. Accordingly, the
Company may award to executives and senior managers annual incentive
compensation on the terms and conditions established herein.
ARTICLE 2
DEFINITIONS
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For the purposes of the Plan, unless the context requires otherwise,
the following terms shall have the meanings indicated:
2.1 "Annual Incentive Award" or "Award" means the compensation payable
under this Plan, in cash, to a Participant by the Committee
pursuant to such terms, conditions, restrictions, and limitations
established by the Committee and Plan.
2.2 "Board" means the Board of Directors of the Company.
2.3 "Bonus Stock" or "Bonus Shares" means shares of Common Stock of
the Company awarded to a Participant as permitted and pursuant to
the terms of the Long Term Incentive Plan.
2.4 "Change in Control" is as defined in the Omnibus Program.
2.5 "Code" means the Internal Revenue Code of 1986, as amended,
together with the published rulings, regulations, and
interpretations duly promulgated thereunder.
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2.6 "Committee" means the Compensation Committee of the Board
appointed from time to time by the Board, which was elected at the
Annual Shareholders meeting in the year immediately preceding the
Performance Period.
2.7 "Common Stock" or "Common Shares" means the Common Stock of the
Company, with a par value of $1.00 per share, or such other
security or right or instrument into which such common stock may
be changed or converted in the future.
2.8 "Company" means Coachmen Industries, Inc. an Indiana corporation,
and any successor entity.
2.9 "Covered Participant" means a Participant who is a "covered
employee" as defined in Section 162(m)(3) of the Code, and the
regulations promulgated thereunder, or who the Committee believes
will be such a covered employee for a Performance Period, and who
the Committee believes may have remuneration in excess of
$1,000,000 for the Performance Period, as provided in Section
162(m) of the Code.
2.10 "Date of Conversion" means the date on which the Committee
determines and approves Awards; this is also the effective Date of
Conversion for Restricted Stock or Restricted Shares, and for
Stock Options.
2.11 "Employee" means common law employee (as defined in accordance
with the Regulations and Revenue Rulings then applicable under
Section 3401(c) of the Code) of the Company and any Subsidiary of
the Company.
2.12 "Executive Nonqualified Deferred Compensation Plan" is the
Executive Nonqualified Deferred Compensation Plan, as amended from
time to time.
2.13 "Fair Market Value" of a share of Common Stock is the closing
price per share on the New York Stock Exchange Composite
Transactions Tape, as reported in the Wall Street Journal, Midwest
Edition, on the appropriate date, or in the absence of reported
sales on such day, the most recent previous day for which sales
were reported.
2.14 "Omnibus Program" is the Coachmen Industries, Inc. 2000 Omnibus
Stock Incentive Program.
2.15 "Participant" means an Employee who is selected by the Committee
to participate in the Plan.
2.16 "Performance Criteria", "Performance Goals", "Performance
Measures", or "Performance Metrics" mean the objectives (and
measurements of
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attainment of the objectives) established by the Committee
pursuant to Article V hereof for the Performance Period, for the
purpose of determining Awards under the Plan.
2.17 "Bonus Levels" are the range of performance on which a Bonus will
be earned. The "Threshold Level" shall be the minimum performance
level to earn any Annual Incentive Award. The "Target Level" shall
be the performance level corresponding to attainment of an average
of 100% of the Performance Criteria/Goals/Measures/Metrics. The
"Ultimate Level" shall be the performance level to earn the
maximum possible Annual Incentive Award, which may be a multiple
of the Award earned by performance at the Target Level.
2.18 "Target Bonus Value" is the multiplier of Base Salary that is
assigned to each Bonus Level, which may vary between participants
as determined in the discretion of the Committee.
2.19 "Performance Period" means the consecutive 12 month period that
constitutes the Company's fiscal year.
2.20 "Plan" means the Coachmen Industries, Inc. Executive Annual
Performance Incentive Plan, dated October 20, 2000 and effective
January 1, 2001, as amended from time to time.
2.21 "Restricted Stock" or "Restricted Shares" means shares of Common
Stock of the Company contingently granted to a Participant as
permitted and pursuant to the terms and provisions of the
Long-Term Incentive Plan.
2.22 "Section 162(m)" means Section 162(m) of the Code and the
regulations promulgated thereunder.
2.23 "Stock Option" or "Option" means an option to purchase Common
Shares of the Company as permitted and pursuant to the terms and
provisions of the Long-Term Incentive Plan.
2.24 "Subsidiary" means (i) any corporation or limited liability
company in an unbroken chain of corporations or limited liability
companies beginning with the Company, if each of them other than
the last in the unbroken chain owns stock or membership interests,
as appropriate, possessing a majority of the total combined voting
power of all classes of stock or membership, respectively, in one
of the other corporations or limited liability companies in the
chain, (ii) any limited partnership, if the Company or any
corporation described in item (i) above owns a majority of the
general partnership interest and a majority of the limited
partnership interests entitled to vote on the removal and
replacement of the general partner, and (iii) any partnership or
limited liability company, if the partners
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or members thereof are composed only of the Company, any
corporation or limited liability company listed in item (i) above
or any limited partnership listed in item (ii) above.
"Subsidiaries" means more than one of any such corporations,
limited partnerships, partnerships or limited liability companies.
2.25 "Termination of Service" occurs when a Participant who is an
Employee of the Company or any Subsidiary shall cease to serve as
an Employee of the Company and its Subsidiaries, for any reason.
ARTICLE 3
ADMINISTRATION
The Plan shall be administered by the Compensation Committee
of the Board unless otherwise determined by the Board. If said
Committee does not so serve, the Committee shall consist of not fewer
than two persons; any member of the Committee may be removed at any
time, with or without cause, by resolution of the Board; and any
vacancy occurring in the membership of the Committee may be filled by
appointment of the Board.
In all cases, membership on the Committee shall be limited to
those members of the Board who are Non-employee Directors and who are
"outside directors" under Section 162(m) of the Code. The Committee
shall select one of its members to act as its Chairman. A majority of
the Committee shall constitute a quorum, and the act of a majority of
the members of the Committee present at a meeting at which a quorum is
present shall be the act of the Committee.
The Committee shall determine and designate from time to time
the eligible persons to whom Awards will be made. The Committee, in its
discretion, shall (i) interpret the Plan, (ii) prescribe, amend, and
rescind any rules and regulations necessary or appropriate for the
administration of the Plan, and (iii) make such other determinations
and take such other action as it deems necessary or advisable in the
administration of the Plan. Any interpretation, determination, or other
action made or taken by the Committee shall be final, binding, and
conclusive on all interested parties.
With respect to restrictions in the Plan that are based on the
requirements of Section 162(m) of the Code or any other applicable law,
rule or restriction (collectively, "applicable law"), to the extent
that any such restrictions are no longer required by applicable law,
the Committee shall have the sole discretion and authority to make
Awards hereunder that are no longer subject to such restrictions.
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ARTICLE 4
ELIGIBILITY
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Any Employee (including an Employee who is also a director or an
officer) is eligible to participate in the Plan, if so designated by
the Committee The Committee, upon its own action, may make, but shall
not be required to make, an Award to any Employee. Awards may be made
by the Committee at any time and from time to time to new Participants,
or to then Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the
Committee shall determine. The Committee's determinations under the
Plan (including without limitation determinations of which Employees,
if any, are to receive Awards, the form, amount and timing of such
Awards, the terms and provisions of such Awards, and the agreements
evidencing same) may be made by the Committee selectively among
Employees who receive, or are eligible to receive, Awards under the
Plan. An Employee who becomes a Participant in the Plan during the
Performance Period will receive, if earned, a pro-rated Award based on
days of participation.
ARTICLE 5
PERFORMANCE GOALS AND MEASUREMENT
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5.1 PERFORMANCE GOALS ESTABLISHMENT. Performance Goals shall be
established by the Committee not later than 90 days after
commencement of the Performance Period. The Performance Goals
and/or Bonus Values, may be identical for all Participants or, at
the discretion of the Committee, may be different to reflect more
appropriate measures of individual performance.
5.2 AWARDS. Awards as set forth in Article 6. shall be made annually
in accordance with actual performance compared to the Performance
Goals previously established by the Committee for the Performance
Period. Payment of the awards shall be made by March 15 of each
year, for the immediately preceding calendar year.
5.3 PERFORMANCE GOALS. Performance Goals relating to Covered
Participants for a Performance Period shall be established by the
Committee in writing. Performance Goals may include alternative
and multiple Performance Goals and may be based on one or more
business and/or financial criteria or Performance Metrics. Among
other criteria, in establishing the Performance Goals for the Plan
Year, the Committee in its discretion may include one or any
combination of the following criteria in either absolute or
relative terms, for either the Company or any of its Subsidiary
organizations:
(a) Revenue, revenue growth, market share or market
share growth, or inventory turns
(b) Total shareholder return
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(c) Return on assets, equity, capital, or investment
(d) Pre-tax or after-tax profit levels, including:
earnings per share; growth in earnings per share;
earnings before interest and taxes; earnings before
interest, taxes, depreciation and amortization; net
operating profits after tax, and net income;
economic value added and economic profit
(e) Cash flow and cash flow return on investment
(f) Measurements of compliance with company policies or
legal requirements
(g) Employee turnover or other human resources criteria
(h) Levels of operating expense or other expense items
as reported on the income statement, including
operating and maintenance expense
(i) Measures of customer satisfaction and customer
service as surveyed from time to time, including
the relative improvement therein
(j) Subjective evaluations by management.
5.4 ADJUSTMENTS FOR EXTRAORDINARY ITEMS. The Committee shall be
authorized to make adjustments in the method of calculating
attainment of Performance Goals in recognition of: (i)
extraordinary or non-recurring items, (ii) changes in tax laws,
(iii) changes in generally accepted accounting principles or
changes in accounting policies, (iv) charges related to
restructured or discontinued operations, (v) restatement of prior
period financial results, and (vi) any other unusual,
non-recurring gain or loss that may be separately identified and
quantified in the Company's financial statements. Notwithstanding
the foregoing, the Committee may, at its sole discretion, reduce
the performance results upon which Awards are based under the
Plan, to offset any unintended result(s) arising from events not
anticipated when the Performance Goals were established, provided
that such adjustment is permitted by Section 162(m).
5.5 DETERMINATION OF AWARDS. The Award and payment of any Award under
this Plan to a Covered Participant with respect to the Performance
Period shall be contingent upon the attainment of the Performance
Goals that are applicable to such Covered Participant, subject to
adjustment as set forth in paragraph 5.4. The Committee shall
certify in writing prior to payment of any such Award that such
applicable Performance Goals relating to the Award are satisfied.
The Performance Goals shall not allow for any discretion by the
Committee as to an increase in any Award that would violate
Section 162(m) of the Code.
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ARTICLE 6
AWARDS
6.1 TIMING OF AWARDS. As soon as practical after the completion of the
Performance Period, the Committee shall review the prior year's
performance in relation to the Performance Goals. This review by
the Committee shall occur within sixty (60) days following the
completion of the Performance Period.
6.2 FORM OF AWARDS. Awards are paid in cash. However, if and as the
Committee so permits and depending upon the Participant's
voluntary written irrevocable election made within ten (10) days
of announcement of the Performance Goals for the Performance
Period to the Participant, but in any event not later than ninety
(90) days after the commencement of the Performance Period, the
Participant may elect to convert his Award in ten percent (10%)
increments, into the following forms:
(a) BONUS STOCK. The Participant may elect to convert
up to one hundred percent (100%) of the Award to
Bonus Shares, with the value of the Bonus Shares
(based on the Fair Market Value of such Bonus
Shares as of the Date of Conversion) being equal to
one hundred ten percent (110%) of the cash amount
of the Award converted, plus an amount calculated
by the Company necessary to gross up the
Participant's income to cover the Participant's
state and federal income taxes for that year for
the additional 10% of stock. Such Bonus Shares
shall be unrestricted and shall be granted pursuant
to the Omnibus Program.
(b) RESTRICTED STOCK AWARDS. The Participant may elect
to convert up to one hundred percent (100%) of the
Award to Company Restricted Shares, with the value
of the Restricted Shares (based on the Fair Market
Value of such Restricted Shares as of the Date of
Conversion) being equal to one hundred forty
percent (140%) of the amount of the Award
converted,. Such Restricted Stock will have a
restriction period of not less than two (2) years
from the Date of Conversion. Further, if the
Participant voluntarily terminates his employment
with Company during said restriction period, or if
during said restriction period Participant
materially breaches any agreement he has with the
Company or its affiliates, the Restricted Shares
shall be forfeited to the Company. None of the
foregoing restrictions shall apply in the event of
a Change in Control. These Restricted Shares will
be granted pursuant to the Omnibus Program.
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6.3 MAXIMUM AWARDS. The maximum cash Award that may be made to a
Covered Participant under the Plan for any Performance Period
shall be $1.0 million.
ARTICLE 7
WITHHOLDING TAXES
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The Company shall have the right to deduct from any payment to be made
pursuant to the Plan the amount of any taxes required by law to be withheld with
respect to such payments.
ARTICLE 8
NO RIGHT TO CONTINUED EMPLOYMENT OR AWARDS
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No Employee shall have any claim or right to be made an Award, and the
making of an Award shall not be construed as giving a Participant the right to
be retained in the employ of the Company or any of its Subsidiaries. Further,
the Company and its Subsidiaries expressly reserve the right at any time to
terminate the employment of any Participant free from any liability under the
Plan; except that a Participant, who meets or exceeds the Performance Goals for
the Performance Period and was actively employed for the full term of the
Performance Period, will be eligible for an Award even though the Participant is
not an active employee of the Company at the time the Committee makes Awards
under the Plan.
ARTICLE 9
CHANGE IN CONTROL
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Immediately upon a Change in Control, notwithstanding any other
provision of this Plan, all Awards for Participants covered by a Change in
Control agreement with the Company for the Performance Period in which the
Change in Control occurs shall be deemed earned at no less than the Performance
Goal Target Level, and the Company shall make such payments in cash to each
Participant or to a "rabbi trust" established for this purpose, as may be
required in said Change in Control Agreements, within five (5) days after the
effective date of the Change in Control in at least the amount of such Target
Level Award, and in the Committee's discretion up to the Ultimate Level Award,
or multiples thereof as provided in said Change in Control and rabbi trust
agreements. The making of Awards under the Plan shall in no way affect the right
of the Company to adjust, reclassify, reorganize, or otherwise change its
capital or business structure, or to merge, consolidate, dissolve, liquidate,
sell or transfer all or any portion of its businesses or assets.
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ARTICLE 10
AMENDMENT, MODIFICATION, SUSPENSION, OR TERMINATION
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Subject to the limitations set forth in Article 9, the Board may at any
time and from time to time, without the consent of the Participants, alter,
amend, revise, suspend, or discontinue the Plan in whole or in part; provided,
however, that no amendment which requires stockholder approval in order for the
Plan and Awards under the Plan to continue to comply with Section 162(m) of the
Code, including any successors to such Section, shall be effective unless such
amendment shall be approved by the requisite vote of the stockholders of the
Company entitled to vote thereon.
ARTICLE 11
GOVERNING LAW
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The validity, construction and effect of the Plan and any actions taken
or relating to the Plan shall be determined in accordance with the laws of the
State of Indiana and applicable Federal law.
ARTICLE 12
SUCCESSORS AND ASSIGNS
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The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company, expressly to assume and agree to perform
the Company's obligation under this Plan in the same manner and to the same
extent that the Company would be required to perform them if no such succession
had taken place. As used herein, the "Company" shall mean the Company as
hereinbefore defined and any aforesaid successor to its business and/or assets.
ARTICLE 13
EFFECTIVE DATE
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This Plan shall be effective as of January 1, 2001, and continue until
terminated. After termination of the Plan, no future Awards may be made, except
in the case of a Change in Control pursuant to Article 9.
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ARTICLE 14
INTERPRETATION
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The Plan is designed to comply with the Section 162(m) of the Code, and
all provisions hereof shall be construed in a manner consistent with that
intent.
ARTICLE 15
INDEMNIFICATION
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No member of the Board or the Committee, nor any officer or Employee of
the Company acting on behalf of the Board or the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Board or the Committee
and each and any officer or Employee of the Company acting on their behalf
shall, to the extent permitted by law, be fully indemnified and protected by the
Company in respect of any such action, determination, or interpretation.
* * * * *
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed effective as of January 1, 2002 by its President pursuant to action
taken by the Board on May 3, 2001.
By: /S/ CLAIRE C. SKINNER
Chairman of the Board, President
And Chief Executive Officer
Attest:
/S/ RICHARD M. LAVERS
Secretary