1
Exhibit (10)(r)
PROFIT SHARING BONUS PLAN
-------------------------
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%
Personal Objectives 0 10.0% 20%
--- ----- ----
0% 50.0% 100%
B. Executive Vice President
------------------------
Corporate RONA 0 32.0% 64.0%
Personal Objectives 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%
Personal Objectives 0 6.0% 12.0%
--- ----- -----
0% 30.0% 60.0%
<FN>
*Huffy Company Performance as used herein means the principal criteria (Huffy
Company RONA, Huffy Company EBIT-AUC or Huffy Company EBIT) utilized for the
assigned Huffy Company.
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%
Personal Objectives 0 6.0% 12.0%
----- ----- -----
0% 30.0% 60.0%
<FN>
*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.
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2. HSF
Corporate RONA 0 6.0% 12.0%
Huffy Company EBIT-AUC vs. PP 0 18.0% 36.0%
Personal Objectives 0 6.0% 12.0%
----- ----- -----
0% 30.0% 60.0%
3. TTH
Corporate RONA 0 6.0% 12.0%
Huffy Company EBIT vs. PP 0 18.0% 36.0%
Personal Objectives 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%
Personal Objectives 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%
Personal Objectives 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.
2. GWPC Vice President & General Manager
GWPC RONA vs. PP 0 12.0% 24.0%
Personal Objectives 0 3.0% 6.0%
----- ----- -----
0% 15.0% 30.0%
3. TTH Staff and Manager, Cost and
Control
Huffy Company EBIT vs. PP 0 12.0% 24.0%
Personal Objectives 0 3.0% 6.0%
----- ------ -----
0% 15.0% 30.0%
4. HSF Staff
Huffy Company EBIT-AUC vs. PP 0 12.0% 24.0%
Personal Objectives 0 3.0% 6.0%
----- ----- -----
0% 15.0% 30.0%
5. GBPC Staff (excluding 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%
Personal Objectives 0 3.0% 6.0%
----- ----- -----
0% 15.0% 30.0%
3
F. Corporate Exempt
----------------
1. Positions with 700 or more Hay points
Corporate RONA 0 12.0% 24.0%
Personal Objectives 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;
HBC First Line Production and Maintenance
Supervisors; 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%
<FN>
*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%.
3. HSF District Managers
District Gross Field Profit $ vs. PP 0 5.0% 10.0%
Huffy Company EBIT-AUC vs. PP 0 5.0% 10.0%
----- ----- -----
0% 10.0% 20.0%
4. HSF Area Managers
Area Gross Field Margin $ vs. PP 0 5.0% 10.0%
Huffy Company EBIT-AUC vs. PP 0 5.0% 10.0%
----- ----- -----
0% 10.0% 20.0%
5. HSF Other Exempt
Huffy Company EBIT-AUC vs. PP 0% 10.0% 20.0%
4
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%
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 Exempt
TTH EBIT vs. PP 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%
<FN>
*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;
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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%
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 Scales(1)
------------
Corporate RONA % of Targeted
Level Award Earned(2)
------------------------- ---------------
Under 7.7% -0-
7.7% Threshold 25%
8.4 50
9.0 75
9.7 Target 100
10.4 125
11.2 150
11.9 175
12.7 Maximum 200
Percent of Targeted Award Earned
--------------------------------
Profit Plan Profit Plan
Huffy Company RONA 5% RONA less
RONA vs. Plan(3) or Greater(2) 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
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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
HSF District Gross % of Targeted
Field Profit $ vs. PP Award Earned(2)
--------------------- ---------------
Under 90% -0-
90 25%
100 100
110+ 200
HSF Area Gross Field % of Targeted
Margin $ vs. PP Award Earned
-------------------- ---------------
Under 90% -0-
90 25%
100 100
110+ 200
% of Targeted
TTH EBIT vs. Profit Plan Award Earned(2)
------------------------ ---------------
Less than $ 0 -0-
0 Threshold 25%
$1,300,000 Target 100
$3,000,000+ Maximum 200
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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 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.
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, 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 - Chief Administrative Officer and Secretary
Vice President - Finance and CFO
Vice President - Corporate Affairs
Vice President - Controller
Vice President - Human Resources
Vice President - General Counsel and Assistant Secretary
Treasurer and Director, Investor Relations
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
B. Huffy Company Staff
HBC
---
V.P. Operations
V.P. Marketing/Sales and Design
V.P. Controller
V.P. Global Sourcing and Logistics
V.P. Product Engineering
V.P. Human Resources
V.P. International
HSC
---
V.P. Sales
V.P. Controller
V.P. Product Engineering/Quality Assurance
V.P. Manufacturing
V.P. Materials Management
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GBPC
----
V.P. Sales/Marketing
V.P. Controller
Sr. 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
V.P. Sales
TTH
---
V.P. Sales and Marketing
V.P. Operations
Controller
V.P. Human Resources
Managing Director, TT Ireland
Acting Director, TT Canada
V.P. Materials
V. Individual Personal Objectives
------------------------------
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 objectives covering the calendar year
based on supporting the supervisor's objectives and his own.
2. These objectives 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 objective 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 objectives.
2) Other Corporate Officers and Huffy Company Presidents
shall each develop no more than 6 objectives.
3) Huffy Company Staff and Corporate Officer Direct Reports
in positions with 700 or more Hay points shall each
develop no more than 3 objectives.
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d) A "degree of difficulty" should be assigned to each objective
on the basis of 1 to 10.
3. The objectives and degrees of difficulty shall be reviewed between
the individual and his supervisor and agreement reached on:
a) Completeness of list
b) State of objectives
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. Personal Objectives Schedule
----------------------------
Upon Approval by The President's and Executive Vice President's objectives
Compensation shall be communicated to the Corporate Officers and Huffy
Committee Company Presidents promptly following approval by
Compensation Committee of the Board of Directors.
15 days later Corporate Officers and Huffy Company Presidents shall
develop their objectives and circulate them to other
Corporate Officers and Huffy Company Presidents by this
date.
10 days later Corporate Officers' and Huffy Company Presidents'
objectives shall be reviewed with Corporate Officers and
approved by their respective immediate supervisors.
Corporate Officers and Huffy Company Presidents shall
communicate their approved objectives to their respective
Corporate Officer Direct Reports in positions with 700 or
more Hay points ("Corporate Staff") and Huffy Company
Staffs ("Huffy Staff").
30 days later Corporate Staff and Huffy Staff personnel shall have
completed their respective objectives, reviewed them with
the appropriate Corporate Officer (who shall furnish his
comments to such Corporate Staff or Huffy Staff member,
the Huffy Company President and the President) and have them
approved by the Corporate Officer and President with
respect to Corporate Staff and by the Huffy Company
President and the President with respect to Huffy Staff
members.
5. Personal Objectives Results Schedule
------------------------------------
First Friday in Corporate Staff and Huffy Staff personnel shall submit
December their results for the year ending for evaluation to the
appropriate Corporate Officer and, with respect to Huffy
Staff, to the Huffy Company President.
10
10 days later Corporate Officers shall have reviewed results submitted
to them by such Corporate Staff and Huffy Staff members
and submitted their comments to the Corporate Staff or
Huffy Staff member, the Huffy Company President and the
President with respect to Huffy Staff, and the President
with respect to Corporate Staff.
10 days later CEO provides Compensation Committee of Board of Directors
with his results for evaluation and approval.
5 days later Corporate Staff results shall be approved by Corporate
Officers. Huffy 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 personal objectives 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 objectives shall be evaluated, not
performance on any other matters.
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 personal
objectives performance are expressly conditioned upon and made
subject to the following base financial criteria:
(A) CORPORATE OFFICERS AND ELIGIBLE CORPORATE OFFICER DIRECT REPORTS
----------------------------------------------------------------
Corporate RONA less than 50% of Target RONA for - No bonus shall be paid for
Corporate bonus purposes performance of personal
objectives
Corporate RONA at least 50%, but less than 75%, - 50% of calculated bonus for
of Target RONA for Corporate bonus purposes performance of personal
objectives shall be paid
Corporate RONA 75% or greater of Target RONA for - 100% of calculated bonus
Corporate bonus purposes for performance of
personal objectives
(B) HUFFY COMPANY PRESIDENT AND STAFF
---------------------------------
Huffy Company RONA, EBIT or EBIT-AUC less than 50% - No bonus shall be paid for
of approved Huffy Company Profit Plan performance of personal
objectives
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Huffy Company RONA, EBIT or EBIT-AUC at least 50%, - 50% of calculated bonus for
but less than 75%, of approved Huffy Company Profit performance of personal
Plan objectives shall be paid
Huffy Company RONA, EBIT or EBIT-AUC 75% or greater - 100% of calculated bonus
of approved Huffy Company Profit Plan for performance of personal
objectives shall be paid
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%
<FN>
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.
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Terminations: To be eligible to receive the Profit Sharing
payment for a calendar year, an employee must be
on the active payroll at the time payment for
that calendar year is made OR HAVE BEEN
TERMINATED DUE TO A CURTAILMENT OF PRODUCTION
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.
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.
13
Asset Usage Charge to Huffy Company at a 15% pretax rate
Charge multiplied by the change between Huffy Company
------ actual Average 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).
TTH EBIT Earnings before interest and taxes.
--------
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
Salary of the calendar year for which bonus is
----- calculated.
Midpoint of Midpoint of Salary Range as of January 1 of
Salary Range the calendar 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.
Average Usage If Huffy Company actual Average Net Assets
Charge Rules exceed the profit plan for 1994, the excess
(Applicable to over the target will be extended times Huffy
HSF & TTH) Corporation's average cost of capital (15%).
---------- The resulting cost for excess asset usage will
be deducted from the EBIT earned by the Huffy
Company during 1994.
If Huffy Company actual Average Net Assets
are lower than the profit plan for 1994, the
savings will be extended times Huffy
Corporation's average cost of capital, and the
resulting savings from asset efficiency will
be added to the EBIT earned by the Huffy
Company during 1994.
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 President and General Manager of WIS.
/s/ George A. Plotner /s/ Gary E. Morin
- ---------------------------------- --------------------------------------
Vice President - Human Resources Executive Vice President
/s/ Richard L. Molen
--------------------------------------
President and Chief Executive Officer
14
PROFIT SHARING BONUS PLAN ADDENDUM
----------------------------------
1. HBC
A. For purposes of 1994 bonus calculation, Huffy Company RONA vs.
PP for HBC shall exclude all costs associated with the start-
up of the new production facility in Farmington, Missouri.
B. For purposes of 1994 bonus calculation, the payment of
Personal Objectives (POs) for the HBC President and General
Manager, and HBC Huffy Company staff, to the extent they
pertain to the Farmington, Missouri facility, will not be
subject to the minimum attained Huffy Company RONA requirement
in order to be eligible for payment of Personal Objectives.
For example, an individual whose Personal Objectives are
dedicated 100% to the Farmington facility will be eligible for
a maximum award for his/her Personal Objectives. Conversely,
to the extent that any individual is assigned POs that do not
pertain to Farmington, those POs unrelated to Farmington will
be subject to the normal Huffy Company RONA attainment
requirements as per policy in order to be eligible for
payment. In such instances, actual bonus paid for POs will be
calculated on a pro-rata basis. For example, assume a Huffy
Company Staff Member has POs worth a total of 40 points and
that 20 points are related to Farmington and 20 points are
non-Farmington related. Then three percentage points would be
payable related to Farmington and three percentage points
would be payable related to the non-Farmington goals. Assume
that a perfect score of 20 is achieved on the Farmington goals
and 18 of 20 points is achieved on the non-Farmington goals
and that HBC has attained at least 75% of its approved profit
plan RONA. In this case, the Huffy Company Staff Member would
be eligible to be paid 100% of his Farmington goals or 3% and
90% of his/her non-Farmington goals or 2.7% for a combined
total of 5.7% versus a maximum opportunity of 6.0%.
/s/ George A. Plotner /s/ Gary E. Morin
- ---------------------------------- --------------------------------------
Vice President - Human Resources Executive Vice President
/s/ Richard L. Molen
--------------------------------------
President and Chief Executive Officer