1
EXHIBIT NO. 10.ee
PROFIT SHARING BONUS PLAN
OF HUFFY CORPORATION FOR 1993
2
PROFIT SHARING BONUS PLAN - C 93 ENTIRE POLICY REVISED
POLICY
- ------
CERTAIN EXEMPT EMPLOYEES OF THE CORPORATION AND ITS SUBSIDIARIES SHALL BE GIVEN
CONSIDERATION FOR PAYMENT UNDER THE CORPORATION'S PROFIT SHARING BONUS PLAN
PROVIDED THEY HAVE COMPLETED SIX (6) MONTHS OF SERVICE BY CALENDAR YEAR END.
PAYMENTS WILL BE CONSIDERED ON THE BASIS OF CORPORATE AND HUFFY COMPANY
FINANCIAL RESULTS AND, FOR SOME POSITIONS, INDIVIDUAL PERFORMANCE AGAINST
OBJECTIVES.
THE SCHEDULES SET FORTH BELOW ARE GUIDELINES ONLY AND PAYMENTS MAY BE MODIFIED
OR OMITTED BY MANAGEMENT, OR BY THE COMPENSATION COMMITTEE OF THE BOARD OF
DIRECTORS, IN THEIR SOLE DISCRETION.
PAYMENTS SHALL BE MADE ONLY TO EMPLOYEES WITH AT LEAST "MEETS SOME BUT NOT ALL
PERFORMANCE REQUIREMENTS" JOB EVALUATION.
Bonus Opportunity as a % of
I. Basis and Level of Awards Actual Base Salary
------------------------- ---------------------------
Min. Target Max.
---- ------ ----
A. Chairman and President
----------------------
Corporate RONA 0 40.0% 80.0%
Individual Performance Against Goals 0 10.0% 20.0%
--- ----- -----
0% 50.0% 100.0%
B. Executive Vice President
------------------------
Corporate RONA 0 32.0% 64.0%
Individual Performance Against Goals 0 8.0% 16.0%
--- ----- -----
0% 40.0% 80.0%
C. Other Corporate Officers
------------------------
Corporate RONA 0 22.5% 45.0%
Huffy Company Performance* vs. PP 0 1.5% 3.0%
Individual Performance Against Goals 0 6.0% 12.0%
--- ------ -----
0% 30.0% 60.0%
<FN>
*Huffy Company Performance as used herein means the principal criteria
(Huffy Company RONA or Huffy Company EBIT-AUC) utilized for the assigned
Huffy Company.
3
PROFIT SHARING/BONUS PLAN (Continued)
D. Huffy Company Heads
-------------------
1. HBC*, HSC, and WIS
Corporate RONA 0 6.0% 12.0%
Huffy Company RONA vs. PP 0 18.0% 36.0%
Individual Performance Against Goals 0 6.0% 12.0%
--- ----- -----
0% 30.0% 60.0%
*HBC President/General Manager also participates in the HBC
Gainsharing Program. Any monies earned under this PSBP will be
reduced by an amount equal to the amount earned under the HBC
Gainsharing Program.
2. HSF
Corporate RONA 0 6.0% 12.0%
Huffy Company EBIT-AUC vs. PP 0 18.0% 36.0%
Individual Performance Against Goals 0 6.0% 12.0%
--- ----- -----
0% 30.0% 60.0%
3. TTH
Corporate RONA 0 6.0% 12.0%
Huffy Company EBIT-AUC vs. PP 0 18.0% 36.0%
Individual Performance Against Goals 0 6.0% 12.0%
--- ----- -----
0% 30.0% 60.0%
4. GBPC
Corporate RONA 0 6.0% 12.0%
Huffy Company (without GWPC)
RONA vs. PP 0 14.4% 28.8%
GWPC RONA vs. PP 0 3.6% 7.2%
Individual Performance Against Goals 0 6.0% 12.0%
--- ----- -----
0% 30.0% 60.0%
E. Huffy Company Staffs
--------------------
1. HBC*, HSC, WIS
Huffy Company RONA vs. PP 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
<FN>
*HBC Staff also participate in the HBC Gainsharing Program.
Any monies earned under this PSBP will be reduced by an amount
equal to the amount earned under the HBC Gainsharing Program.
4
PROFIT SHARING/BONUS PLAN (Continued)
2. GWPC Vice President & General Manager
GWPC RONA vs. PP 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ------ -----
0% 15.0% 30.0%
3. GBPC Vice President - Operations
Huffy Company (without GWPC)
RONA vs. PP 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
4. TTH Staff and Manager, Cost and
Control; TTH Harrisburg Plant Manager
Huffy Company EBIT-AUC vs. PP 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
5. HSF Staff
Huffy Company EBIT-AUC vs. PP 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
6. GBPC Staff (excluding GBPC V.P. -
Operations and GWPC V.P./General Manager)
Huffy Company (without GWPC)
RONA vs. PP 0 9.6% 19.2%
GWPC RONA vs. PP 0 2.4% 4.8%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
5
PROFIT SHARING/BONUS PLAN (Continued)
F. Corporate Exempt
----------------
1. Positions with 700 or more Hay points
Corporate RONA 0 12.0% 24.0%
Individual Performance Against Goals 0 3.0% 6.0%
--- ----- -----
0% 15.0% 30.0%
2. Positions with less than 700 Hay points
Corporate RONA 0% 10.0% 20.0%
G. Other Exempt
------------
1. Huffy Company Exempt* (except HSF Exempt;
GBPC Exempt; GWPC Exempt; WIS Field
Management (see Policy 701-B for WIS
Field Management personnel) and Exempt;
and TTH Exempt)
Huffy Company RONA vs. PP 0% 10.0% 20.0%
*HBC Exempt also participate in the HBC Gainsharing Program.
Any monies earned by HBC Exempt under this PSBP will be reduced
by an amount equal to the amount earned under the HBC
Gainsharing Program.
2. HBC First Line Production and Maintenance
Supervisors
Huffy Company RONA vs. PP 0 10.0% 12.0%*
Huffy Company Gainsharing Plan 0 - 12.0%*
--- ----- ------
0% - 20.0%
<FN>
*Either category of bonus payment (Huffy Company RONA vs. PP
or Gainsharing performance) may pay up to a maximum of 12% for
the fiscal year but the maximum total bonus for both
categories may not exceed 20%.
6
PROFIT SHARING/BONUS PLAN (Continued)
3. HSF District Managers
District Sales $ vs. PP 0 2.0% 4.0%
District Gross Field Profit % vs. PP 0 2.0% 4.0%
District Gross Field Profit $ vs. PP 0 4.0% 8.0%
Huffy Company EBIT-AUC vs. PP 0 2.0% 4.0%
--- ----- -----
0% 10.0% 20.0%
4. HSF Area Managers
Area Gross Field Margin % vs. PP 0 2.0% 4.0%
Area Gross Field Margin $ vs. PP 0 2.0% 4.0%
Huffy Company EBIT-AUC vs. PP 0 1.0% 2.0%
--- ----- -----
0% 5.0% 10.0%
5. HSF Other Exempt
Huffy Company EBIT-AUC vs. PP 0% 10.0% 20.0%
6. GBPC Financial Staff (including
all Denver-based MIS, Credit and
Accounting employees except for MIS
LAN Administrator and Cost Accountant)
Huffy Company (without GWPC)
RONA vs. PP 0 8.0% 16.0%
GWPC RONA vs. PP 0 2.0% 4.0%
--- ----- -----
0% 10.0% 20.0%
7. GBPC Director - Sales, GBPC Director -
Marketing, GBPC Director - International
Sales and Marketing, GBPC Sales
Administrator, GBPC Consumer Relations
Supervisor, GBPC Sales Managers, GBPC
Customer Service Manager, GBPC Business
Line Manager for GWPC, GBPC Manager of
Design
Huffy Company (without GWPC)
RONA vs. PP 0 8.0% 16.0%
GWPC RONA vs. PP 0 2.0% 4.0%
--- ----- -----
0% 10.0% 20.0%
7
PROFIT SHARING/BONUS PLAN (Continued)
8. Other GBPC Exempt
Huffy Company (without GWPC)
RONA vs. PP 0% 10.0% 20.0%
9. GWPC Exempt
GWPC RONA vs. PP 0% 10.0% 20.0%
10. TTH Plant Managers at Anderson,
Shiremanstown, and York; TTH
Site Manager; TTH Director of
Technical Services; TTH Regional
Sales Managers; TTH Industrial
Sales Manager; TTH Canadian
Marketing Manager; TTH Credit
Manager; TTH Manager, Financial
Analysis; TTH Marketing Manager;
TTH Manager, Materials and Wood
Operations; TTH Director, Purchasing;
TTH Manager, Design Engineering;
TTH Manager, Product Development;
TTH Division Manager, Quality
Assurance; TTH Manager, Industrial
Engineering/ Workmate; TTH Manager,
Production Engineering; Director,
MIS; TTH Supervisor, Tool & Die;
TTH Manager Production &
Inventory; TTH General Foreman,
Production; TTH Division Quality
Engr.; TTH Mill Managers; TTH
Regional Manager; TTH Supervisor,
Distribution; TTH Employee Relations
Rep.; TTH Sr. Benefits Admin.; TTH
Sr. Financial Analysts; TTH Plant
Controller, Camp Hill; TTH Camp Hill
Production Managers; TTH Manager, Data
Operations; TTH Product Managers; TTH
Buyers; TTH Manager, Sales Service;
TTH Product Design Engr.; TTH Product
Development Engr.; TTH Product Engr.;
TTH Sr. Programmer Analyst; TTH
Engineering Director, Ireland; TTH
Finance Controller, Ireland; TTH
Personnel Manager, Ireland; TTH
Sales/Marketing Director, Ireland;
TTH Materials/Warehouse Manager,
Ireland; TTH Manufacturing Director,
Ireland
8
PROFIT SHARING/BONUS PLAN (Continued)
TTH EBIT-AUC vs. PP 0% 10.0% 20.0%
--- ----- -----
0% 10.0% 20.0%
11. TTH Canadian District Sales Managers
Net Sales $ vs. Sales Objective $* 0% 10.0% 20.0%
--- ----- -----
0% 10.0% 20.0%
*Threshold payment of 2% applies when 90% of pre-established Sales
Objective $ are attained, 10% when 100% of Sales Objective $ are
attained, and 20% when 110% of Sales Objective $ are obtained.
12. WIS Director - Accounting; WIS Director -
Management Information Systems; WIS Manager -
Payroll; WIS Manager - Accounts Receivable;
WIS Manager - Tax & Financial Analysis;
WIS Manager, Business Systems Development;
WIS Manager - Compensation & Benefits;
WIS Manager - Systems Development; WIS
Manager - Requirements & Testing; WIS
Manager - General Accounting; WIS Manager
- Computer Operations; WIS National
Processing Manager; WIS Manager - Credit
and Collections; WIS Manager - Employee
Relations; WIS Manager - Operations
Support and Services; WIS Management
Information Systems Manager
Huffy Company RONA vs. PP 0 10.0% 20.0%
13. WIS Director - Account Management
& Customer Service; WIS National
Account Manager; WIS National Sales
Manager
Huffy Company RONA vs. PP 0 5.0% 10.0%
Sales Volume $ vs. PP 0 5.0% 10.0%
--- ----- -----
0% 10.0% 20.0%
14. Other WIS Exempt (excluding WIS
Field Management)
Huffy Company RONA vs. PP 0 5.0% 10.0%
9
PROFIT SHARING/BONUS PLAN (Continued)
II. Corporate Internal Audit Staff
-------------------------------
Corporate Internal Audit staff are members of the Corporate Exempt
category and bonus recommendations will generally be made on that
basis. Such bonus recommendations will be subject to approval by the
Audit Committee of the Board of Directors.
III. Award Scales1
-------------
Corporate RONA % of Targeted
Level Award Earned2
-------------- ------------
Under 9.0% -0-
9.0% Threshold 25%
9.7 50
10.3 75
11.0 Target 100
11.8 125
12.6 150
13.4 175
14.2 Maximum 200
Percent of Targeted Award Earned
----------------------------------
Profit Plan Profit Plan
Huffy Company RONA 5% RONA less
RONA vs. Plan3 or Greater2 than 5%2
----------------- ----------- ---------
Under 90% -0- -0-
90 Threshold 25% 25%
92 40 40
94 55 55
96 70 70
98 85 85
100 Target 100 100
101.5 110 105
103.0 120 110
104.5 130 115
106.0 140 120
107.5 150 125
109.0 160 130
110.5 170 135
112.0 180 140
113.5 190 145
10
PROFIT SHARING/BONUS PLAN (Continued)
(CONT'D) Percent of Targeted Award Earned
----------------------------------
Profit Plan Profit Plan
Huffy Company RONA 5% RONA less
RONA vs. Plan3 or Greater2 than 5%2
------------------ ----------- ---------
115.0 200 150
116.5 200 155
118.0 200 160
119.5 200 165
121.0 200 170
122.5 200 175
124.0 200 180
125.5 200 185
127.0 200 190
128.5 200 195
130.0+ Maximum 200 200
HSF % of Targeted
EBIT-AUC vs. Plan Award Earned
------------------ -------------
Under 90% -0-
90 Threshold 25%
92 40
94 55
96 70
98 85
100 Target 100
101 110
102 120
103 130
104 140
105 150
106 160
107 170
108 180
109 190
110+ Maximum 200
11
PROFIT SHARING BONUS PLAN (Continued)
HSF District % of Targeted
Gross Field Profit % vs. PP Award_Earned2
--------------------------- ------------
Greater than 1.0% below -0-
-1.0 Threshold 25%
-0.8 40
-0.4 70
Target Equal to Target 100
+0.3 130
+0.7 170
+1.0 Maximum 200
% of Targeted
HSF District Sales $ vs. PP Award Earned2
--------------------------- ------------
Under 90% -0-
90 25%
100 100
115+ 200
HSF District Gross % of Targeted
Field Profit $ vs. PP Award Earned2
--------------------- ------------
Under 90% -0-
90 25%
100 100
110+ 200 (REV.)
HSF Area Gross Field % of Targeted
Margin $ vs. PP Award Earned
-------------------- -------------
Under 90% -0-
90 25%
100 100
110+ 200 (REV.)
12
PROFIT SHARING/BONUS PLAN (Continued)
HSF Area Managers
% of Targeted
Area Gross Field Margin % vs. PP Award Earned2
-------------------------------- ------------
Greater than 1.0% below -0-
-1.0 Threshold 25%
-0.8 40
-0.4 70
Target Equal to Target 100
+0.3 130
+0.7 170
+1.0 Maximum 200
% of Targeted
TTH EBIT-AUC vs. Profit Plan* Award Earned2
----------------------------- ------------
Greater than $600,000 below -0-
-600,000 Threshold 25%
-400,000 50
-200,000 75
Target Equal to Target 100
$+200,000 120
+400,000 140
+600,000 160
+800,000 180
$1,000,000+ Maximum 200
*See Addendum for further discussion.
1. The scales are sliding. When actual Corporate RONA is above 8.5% and
falls between the points on the scale, it will be adjusted to the
nearest 1/10th of 1% and interpolated to determine the award level.
When Huffy Company RONA or TTH EBIT-AUC or HSF EBIT-AUC falls between
the points on the scale, it will be adjusted to the nearest 1/10th of
1% and interpolated to determine the award level.
13
PROFIT SHARING/BONUS PLAN (Continued)
2. % of targeted award earned is used as a multiple of bonus target which
varies by level of employee. Refer to Section I.
3. This scale is applicable to Huffy Company RONA, TTH EBIT-AUC, HSF
EBIT-AUC, and similar Huffy Company performance measures.
IV. Positions Covered
A. Corporate Officers and Huffy Company Presidents
Corporate Officers
-------------------
Chairman of the Board
President
Executive Vice President
Vice President - Operations
Vice President - Law, Chief Administrative Officer and
Secretary
Vice President - Finance and CFO
Vice President - Marketing
Vice President - Controller
Vice President - Human Resources
General Counsel and Assistant Secretary
Huffy Company Presidents
------------------------
President and General Manager - Huffy Bicycle Company
President and General Manager - Huffy Sports Company
President and General Manager - Gerry Baby Products Company
President and General Manager - Washington Inventory Service
President and General Manager - Huffy Service First, Inc.
President and General Manager - True Temper Hardware Company
14
PROFIT SHARING/BONUS PLAN (Continued)
B. Huffy Company Staff
HBC
---
V.P. Operations
V.P. Marketing/Sales and Design
V.P. Controller
V.P. Global Sourcing and Business Development
V.P. Product Engineering
V.P. Human Resources
V.P. Logistics
HSC
---
V.P. Sales
V.P. Controller
V.P. Product Engineering/Quality Assurance
V.P. Manufacturing
V.P. Materials Management
V.P. New Product and Business Development
GBPC
----
V.P. Sales/Marketing
V.P. Controller
V.P. Operations
V.P. Human Resources
V.P. General Manager - GWPC
V.P. Product Design and Engineering
HSF
---
V.P. Operations
V.P. Controller
V.P. Sales/Marketing
V.P. Human Resources
WIS
---
V.P. Operations
V.P. Finance and Controller
V.P. Technology & Information Systems
V.P. Human Resources
V.P. Marketing and Account Management
15
PROFIT SHARING/BONUS PLAN (Continued)
TTH
---
V.P. Sales and Marketing
V.P. Operations
Director, Finance
V.P. Human Resources
Director, Marketing
Managing Director, TT Ireland
Acting Director, TT Canada
V. Individual Non-Financial Performance Goals
------------------------------------------
For those individuals who have a portion of their bonus measured on
this basis, the following implementation procedure will be used:
1. Each individual will draw up goals covering the calendar year
based on supporting the supervisor's goals and his own.
2. These goals should have the following characteristics:
a) Not be associated with financial goals in the Profit
Plan. (Financial goals for such things as cost
reduction or similar projects are appropriate
goals.)
b) Be as specific and as measurable as to successful
attainment as possible. (A project need not be
completed in the calendar year. The goal can be to
obtain a specific status in the project by calendar
year end.)
c) 1) Chairman and President shall each develop no
more than 7 to 8 goals.
2) Other Corporate Officers and Huffy Company
Presidents shall each develop no more than 6
goals.
3) Huffy Company Staff and Corporate Officer
Direct Reports in positions with 700 or more
Hay points shall each develop no more than 3
goals.
16
PROFIT SHARING/BONUS PLAN (Continued)
d) A "degree of difficulty" should be assigned to each
goal on the basis of 1 to 10.
3. The goals and degrees of difficulty shall be reviewed between
the individual and his supervisor and agreement reached on:
a) Completeness of list
b) State of goals
c) Degree of difficulty
It is the supervisor's responsibility to ensure that there is
some consistency in the measurement of "degree of difficulty"
among all his subordinates, and the Corporate Officer's
responsibility to review for consistency in measurement of
"degree of difficulty" among Huffy Company Staff personnel
within his function.
4. Non-Financial Objectives Schedule
---------------------------------
Upon Approval by The Chairman's and the President's goals shall
Compensation be communicated to the Corporate Officers and
Committee Huffy Company Presidents promptly following
by Compensation Committee of the Board of
Directors.
15 days later Corporate Officers and Huffy Company Presidents
shall develop their goals and circulate them to
other Corporate Officers and Huffy Company
Presidents by this date.
10 days later Corporate Officers' and Huffy Company
Presidents' goals shall be reviewed with
Corporate Officers and approved by their
respective immediate supervisors. Corporate
Officers and Huffy Company Presidents shall
communicate their approved goals to their
respective Corporate Officer Direct Reports
in positions with 700 or more Hay points and
Huffy Company Staffs.
30 days later Corporate Officer Direct Report personnel in
positions with 700 or more Hay points and Huffy
Company Staff personnel shall have completed
their respective goals, reviewed them with the
appropriate Corporate Officer (who shall furnish
his comments to such Corporate Officer Direct
Report or Huffy Company Staff member, the Huffy
Company President and the President) and have
them approved by the Corporate Officer and
President with respect to Corporate Officer
Direct Reports in positions with 700 or more Hay
points and by the Huffy Company President and
the President with respect to Huffy Company
Staff members.
17
PROFIT SHARING/BONUS PLAN (Continued)
5. Non-Financial Objectives Results Schedule
-----------------------------------------
First Friday in Corporate Officer Direct Report personnel in
December positions with 700 or more Hay points and Huffy
Company Staff personnel shall submit their
results for the year ending for evaluation to
the appropriate Corporate Officer and, with
respect to Huffy Company Staff, to the Huffy
Company President.
10 days later Corporate Officers shall have reviewed results
submitted to them by such Corporate Officer
Direct Reports and Huffy Company Staff members
and submitted their comments to the Corporate
Officer Direct Report or Huffy Company Staff
member, the Huffy Company President and the
President with respect to Huffy Company Staff,
and the President with respect to Corporate
Officer Direct Reports positions with 700 or
more Hay points.
10 days later CEO provides Compensation Committee of Board of
Directors with his results for evaluation and
approval.
5 days later Corporate Officer Direct Reports in positions
with 700 or more Hay points results shall be
approved by Corporate Officers. Huffy Company
Staff personnel results shall be approved by
Corporate Officers and Huffy Company Presidents.
Corporate Officers and Huffy Company Presidents
shall submit their results for the year ending
to their immediate supervisor for evaluation and
approval.
Feb. 1 The evaluation and approval of non-financial goal
results are to be completed.
6. The participant shall evaluate his own performance and then
submit the evaluation to his supervisor who shall review and
approve the evaluation.
This score is not binding. The supervisor shall use his
judgment to arrive at a final rating. However, only
performance on the written goals shall be evaluated, not
performance on any other matters.
18
PROFIT SHARING/BONUS PLAN (Continued)
7. Each individual shall be informed by his supervisor of his
performance rating but only after all approvals have been
secured.
8. Notwithstanding the foregoing, payments for non-financial
goals performance are expressly conditioned upon and made
subject to the following base financial criteria:
(A) CORPORATE OFFICERS AND ELIGIBLE
--------------------------------
CORPORATE OFFICER DIRECT REPORTS
--------------------------------
Corporate earnings less than - No bonus shall be paid
50% of threshold level for for performance of non-
Corporate bonus purposes financial goals
Corporate earnings at least - 50% of calculated bonus for
50%, but less than 75%, of performance of non-
threshold level for Corporate financial goals shall be
bonus purposes paid
Corporate earnings 75% or - 100% of calculated bonus
greater of threshold level for performance of non-
for Corporate bonus purposes financial goals shall be
paid
(B) HUFFY COMPANY PRESIDENT AND STAFF
---------------------------------
Huffy Company RONA or EBIT-AUC less - No bonus shall be paid for
than 50% of approved Huffy Company performance of non-
Profit Plan financial goals
Huffy Company RONA or EBIT-AUC at - 50% of calculated bonus for
least 50%, but less than 75%, of performance of non-
approved Huffy Company financial goals shall be
Profit Plan paid
Huffy Company RONA or EBIT-AUC 75% or - 100% of calculated bonus
greater of approved for performance of non-
Huffy Company Profit Plan financial
19
PROFIT SHARING/BONUS PLAN (Continued)
VI. Implementation
--------------
1. Eligibility
-----------
All exempt employees on the payroll on or before the first
business day of the calendar year shall be eligible for
consideration for a full bonus opportunity.
Hires: Employee coming on the payroll after the first
business day of the calendar year but on or before
the first business day of July will be eligible
for consideration for one-half the annual bonus
opportunity.
Exception: HSF Regional Operations, District
and Area Managers, and
eligible WIS personnel hired after
January 1 of the calendar year
shall be eligible for consideration
for the percentage of annual bonus
opportunity shown below:
Percentage of Annual
Hire Date Bonus Opportunity
--------- --------------------
During 1st quarter 75%
During 2nd quarter 50%
During 3rd quarter 25%
During 4th quarter 0%
Transfers, Promotions or Demotions: Individuals transferred,
promoted or demoted during the calendar year shall have bonus
opportunity as follows:
Calculation Based on
-----------------------------
Old Oppor. New Oppor.
---------- ----------
Old Actual New Actual
---------- ----------
Base Salary Base Salary
----------- -----------
Old. Opp. Level New Opp.Level
--------------- -------------
Transferred, Promoted or Demoted
During 1st Quarter 25% 75%
During 2nd Quarter 50% 50%
During 3rd Quarter 75% 25%
During 4th Quarter 100% 0%
Note: Non-exempt and/or hourly employees promoted
to exempt positions are eligible for bonus
consideration as above but only for those
quarters in which they held exempt positions.
Also, status changes (including transfers,
promotions and demotions, but excluding new
hires) for bonus eligible employees at WIS
which are effective for the first pay period
beginning on or after the first day of the
quarter shall be treated for bonus purposes
as if they were effective the first day of
the quarter.
20
PROFIT SHARING/BONUS PLAN (Continued)
Terminations: To be eligible to receive the Profit Sharing
payment for a calendar year, an employee must
be on the active pay- roll at the time
payment for that calendar year is made or HAVE
BEEN TERMINATED DUE TO A CURTAILMENT OF PRODUC-
TION BETWEEN JULY 1 OF THAT CALENDAR YEAR AND
THE DATE OF BONUS PAYMENT, HAVING MET ALL
ELIGIBILITY REQUIREMENTS OF THE PLAN AND HAVING
PERFORMED ALL DUTIES AND RESPONSIBILITIES
IN AT LEAST AN AVERAGE MANNER. UNDER THESE
CIRCUMSTANCES, SUCH EMPLOYEES MUST HAVE BEEN
ON THE PAYROLL AT THE BEGINNING OF THE CALENDAR
YEAR IN ORDER TO QUALIFY FOR BONUS FOR THAT
CALENDAR YEAR. APPROVAL OF THE CEO IS
REQUIRED IN ALL SUCH CASES. EXEMPT EMPLOYEES
TERMINATED DUE TO A CURTAILMENT OF PRODUCTION
SHALL BE ELIGIBLE FOR BONUS OPPORTUNITY AS
FOLLOWS:
Bonus as percent payment
-------------------------
Termination Date of full bonus opportunity
---------------- --------------------------
July 1 - September 30 50%
--------------------- ---
October 1 - December 31 75%
----------------------- ---
January 1 - date of payment 100%
--------------------------- ----
Death or Retirement: Employees who retired or died during or
after the calendar year for which bonus is being calculated
and who met the requirement of being on the active payroll
during the year will be given consideration for a bonus
payment on basis of the following percentage of full
bonus opportunity: retired or died in 1st Qtr - 25%;
2nd Qtr - 50%; 3rd Qtr - 75%; 4th Qtr - 100%. Payment
for deceased employees shall be made to the beneficiary
designated under the Salaried Employees Group Term
Life Insurance Plan.
Active payroll is defined as receiving wages (recorded on
the Federal W-2 form) from the Corporation or one
of the Huffy Companies. Except for those terminated or
retiring or deceased employees described above,
employees absent for any reason and not receiving wages
(as defined above) are not considered on the active
payroll.
Exception to the eligibility requirements must be approved by
the CEO at the time approval is obtained for transfer or hire.
2. Payment
-------
Except as noted below, payment for Profit Sharing shall be
annual and shall occur in March of each year for the prior
calendar year's results.
21
PROFIT SHARING/BONUS PLAN (Continued)
3. Calculations
All bonus calculations will be rounded up to the nearest
$25.00 increment and the minimum bonus payment to be paid
will be $125.00 per employee, provided employee is eligible
for bonus and such bonus is approved.
Definitions
- ------------
Corporate RONA Profit after tax after cost of plan plus tax affected
- -------------- interest divided by the twelve (12) month rolling
average of total assets less current liabilities excluding
all interest bearing debt.
Huffy Company Tax affected earnings before interest and
- ------------- taxes excluding interest income divided by the
RONA twelve (12) month rolling average of total assets other than
- ------------- cash less current liabilities excluding all interest bearing
debt.
Asset Usage Charge to Huffy Company at a 15% pre-tax rate multiplied by
- ------------ the change between Huffy Company actual Average
Charge Net Assets and Huffy Company planned Average Net Assets.
- ------------ Huffy Company Average Net Assets equal average
total assets minus average current liabilities (excluding
all interest bearing liabilities and intercompany
accounts).
HSF EBIT-AUC
TTH EBIT-AUC Earnings before interest and taxes minus an Asset Usage Charge.
- ------------
Actual Base Employee's actual base salary as of January 1 of the
Salary calendar year for which bonus is calculated.
- ------------
Midpoint of Midpoint of Salary Range as of January 1 of the calen-
Salary Range dar year for which bonus is calculated.
- ------------
Promotion 15% upward difference in Hay points (see Corporate Policy 113).
- ---------
Demotion 15% downward difference in Hay points (see Corporate Policy
- -------- 113).
Transfer A change in position which does not constitute a promotion
- -------- or demotion.
22
PROFIT SHARING/BONUS PLAN (Continued)
Average Usage If Huffy Company actual Average Net Assets exceed the
Charge Rules profit plan for 1993, the excess over the target will
(Applicable to be extended times Huffy Corporation's average cost of
HSF & TTH) capital (15%). The resulting cost for excess asset
-------------- usage will be deducted from the EBIT earned by the Huffy
Company during 1993.
If Huffy Company actual Average Net Assets are lower
than the profit plan for 1993, the savings will be
extended times Huffy Corporation's average cost of
capital, and the resulting savings from asset effi-
ciency will be added to the EBIT earned by the Huffy
Company during 1993.
Distribution of This Policy
- ---------------------------
Restricted to Corporate Officers, Huffy Company Presidents, Huffy
Company Staff, and Corporate Officers Direct Reports in positions with
700 or more Hay points, except for Policy 701-B which is restricted to
Corporate Officers and the President and General Manager of WIS.
/S/ George A. Plotner /S/ Richard Molen
- -------------------------------- -------------------------
Vice President - Human Resources President and CEO
/S/ Gary Morin
- --------------------------------
Executive Vice President