Exhibit No. 10(iii)(k)
THOMASVILLE FURNITURE INDUSTRIES
--------------------------------
THOMASVILLE ACHIEVEMENT PLAN
----------------------------
January 1993
PURPOSE
-------
The Thomasville Achievement Plan is intended to promote the company's financial
success by recognizing the significant contributions key managers can make to
the achievement of company goals. The plan's objective is to motivate key
Thomasville managers to produce outstanding results by providing to them the
opportunity to earn additional financial rewards based on the attainment of
corporate and business unit goals.
CONCEPT
-------
At the beginning of the year, an annual Target Achievement Award is established
for each key manager based on the achievement of specific financial goals. When
the year is over, the results actually achieved will be evaluated against these
goals to determine the specific amount, if any, of additional compensation
earned.
ADMINISTRATION
--------------
Subject to the final approval of the Compensation Committee, the plan will be
administered by the President, Thomasville Furniture Industries, Inc., with the
advice and counsel of Thomasville's key executives.
ELIGIBILITY
-----------
Participation in the Plan will be limited to key managers whose duties and
responsibilities permit them to make a continuing material impact on the
achievement of organization goals. The President of TFI will annually determine
participants based upon recommendations of the company's key management.
To be a participant, a manager must have been in an eligible position at least
for the period July 1 through December 31 of the year in which awards are to be
paid.
AWARD DETERMINATION
-------------------
Target Awards
- -------------
A Target Achievement Award, expressed as a percentage of the participant's base
salary earnings, is established for each eligible manager. Target awards vary
with levels and types of responsibility, as reflected in position grades for
each eligible manager. Refer to Exhibit I for the current Achievement groups
and Award percentages.
Timing of Payment
- -----------------
Awards are to be paid on or around March 1 following the close of the plan year.
- 2 -
Target Award Allocation
- -----------------------
Target awards for eligible participants will be based on the achievement of a
TFI "PAR" ROA Target, TFI Business Unit Budget ROA, and TFI Business Unit "PAR"
ROA. The following is the allocation of target awards for all managers:
Line Staff
Manager Manager
-------- --------
TFI "PAR" ROA Target 20% 40%
TFI Business Unit "PAR" ROA 30% --
TFI Business Unit Budget ROA 50% --
TFI Budget ROA -- 60%
Example
-------
John Doe, Line Manager
Annual Base Salary: $48,000
Target Award Percent: 15%
Annual Salary x Target Percentage = Target Award
$48,000 15% $7,200
Target Award Allocation
-----------------------
TFI "PAR" ROA 20% x $7,200 = $1,440
TFI Business Unit "PAR" ROA 30% x $7,200 = $2,160
TFI Business Unit Budget ROA 50% x $7,200 = $3,600
Total Target Award $7,200
- 3 -
TFI "PAR" ROA Segment
- ---------------------
As a measure of the long-term corporate results, the President of Thomasville,
in consultation with senior management, establishes a "PAR" target based on
return on assets for the company. This goal needs to be fixed over a period in
time as a long-term objective for the company. The goal includes a threshold
below which no award will be made, and a maximum level above which no additional
award is earned. The amount earned at each level of achievement is determined
by the award earnings Schedule A attached.
TFI Budget ROA Segment
- ----------------------
As a measure of the annual efforts, the President of Thomasville, in
consultation with senior management, establishes an annual budget based on
return on assets. This budget includes a threshold level below which no awards
are made, and a maximum level above which no additional award is earned. The
amount earned at each level of achievement is determined by the award earnings
Schedule B attached.
TFI Business Unit "PAR" ROA
- ---------------------------
As a measure of the long-term business unit results, the President of
Thomasville in consultation with senior management of the business unit,
establishes a "PAR" target based on return on assets for the business unit.
This goal needs to be fixed over a period of time as a long-term objective for
the business unit. The goal includes a threshold below which no award will be
made, and a maximum level above which no additional award is earned. The amount
earned at each level of achievement is determined by the awards earnings
schedules attached.
TFI Business Unit Budget ROA
- ----------------------------
As a measure of the annual efforts, the President of Thomasville in consultation
with the business unit senior management, establishes an annual budget based on
return on assets. This budget includes a threshold level below which no awards
are made, and a maximum level above which no additional award is earned. The
amount earned at each level of achievement is determined by the award earnings
schedules attached.
- 4 -
Determining Actual Awards
- -------------------------
The actual award payable is determined by multiplying each segment of the target
award by the appropriate percentage of the award earned. The sum of these
calculations represents the participant's recommended award. The calculation is
illustrated in the examples which follow.
If actual TFI "PAR" ROA results are less than the threshold, there will be no
award under this segment of the plan. In this situation, payments under the
business unit or TFI Budget ROA segment of the plan will only be made if the
business unit or TFI Budget ROA reaches or exceeds 100% of its goal.
Benefit Plans
- -------------
Individual Achievement Awards are included in total compensation for the purpose
of computing pensions, Savings Investment Plan contributions, and Share-in-
Success Plan contributions. Such awards, however, are not used in calculating
group life insurance or long-term disability payments.
- 5 -
Example 1
---------
THOMASVILLE FURNITURE INDUSTRIES, INC.
--------------------------------------
THOMASVILLE ACHIEVEMENT PLAN
----------------------------
Name: John Doe Title:
---------------------------- ----------------------------
Unit: Line Unit B
----------------------------
Target Award
- ------------
Base Salary x Target Percentage = Target Award
----------- ----------------- ------------
$48,000 15% $7,200
Award Allocation
- ----------------
TFI "PAR" Target 20% x $7,200 = $1,440
TFI Business Unit "PAR" 30% x $7,200 = $2,160
TFI Business Unit Budget 50% x $7,200 = $3,600
------
Target Award $7,200
Award Calculation - Example
- ---------------------------
Achievement Award
Segment Factor Allocation Award
- ------- ------ ---------- -----
TFI "PAR" ROA 108.0% x $1,440 = $3,110
TFI Business Unit "PAR" 125.0% x $2,160 = $2,700
TFI Business Unit Budget ROA 150.0% x $3,600 = $5,400
------
Recommended Award $11,210