1
PROFIT-SHARING BONUS PLAN -- C96 EXHIBIT 10.r
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.
FINANCIAL BONUS
- ---------------
Bonus opportunity as a % of
I. Basis and Level of Awards Actual Base Salary
------------------------- -----------------------------
Min. Target Max.
--- ------ ---
A. Chairman and President
----------------------
Corporate E.P.S. vs. PP 0 20.0% 40.0%
Corporate RONA vs. PP 0 20.0% 40.0%
----- ----- -----
0% 40.0% 80.0%
B. Other Corporate Officers
------------------------
Corporate E.P.S. vs. PP 0 12.00% 24.0% (REV.)
Corporate RONA vs. PP 0 12.00% 24.0% (REV.)
----- ----- -----
0% 24.00% 48.0%
C. Huffy Company Heads
-------------------
1. HBC, HSC, HSF, TTH and WIS
Huffy Company RONA vs. PP 0 12.0% 24.0%
Huffy Company EBIT vs. PP 0 12.0% 24.0%
----- ----- -----
0% 24.0% 48.0%
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C. Huffy Company Heads (Cont'd) Min. Target Max.
------------------- --- ------ ---
2. GBPC
Huffy Company (without GWPC)
RONA vs. PP 0 9.6% 19.2%
GWPC RONA vs. PP 0 2.4% 4.8%
Huffy Company (without GWPC) EBIT vs. PP 0 9.6% 19.2%
GWPC EBIT vs. PP 0 2.4% 4.8%
--- ------ -----
0% 24.0% 48.0%
D. Huffy Company Staffs
--------------------
1. HBC, HSC, WIS, TTH and HSF
Huffy Company RONA vs. PP 0 6.0% 12.0%
Huffy Company EBIT vs. PP 0 6.0% 12.0%
--- ------ -----
0% 12.0% 24.0%
2. GWPC Vice President & General Manager
GWPC EBIT vs. PP 0 6.0% 12.0%
GWPC RONA vs. PP 0 6.0% 12.0%
--- ------ -----
0% 12.0% 24.0%
3. GBPC Staff (excluding GWPC V.P./General Manager)
Huffy Company (without GWPC) EBIT vs. PP 0 4.8% 9.6%
Huffy Company (without GWPC) RONA vs. PP 0 4.8% 9.6%
GWPC RONA vs. PP 0 1.2% 2.4%
GWPC EBIT vs. PP 0 1.2% 2.4%
--- ------ -----
0% 12.0% 24.0%
E. Corporate Exempt
----------------
1. Positions with 700 or more Hay points
Corporate E.P.S. vs. PP 0 6.0% 12.0%
Corporate RONA vs. PP 0 6.0% 12.0%
--- ------ -----
0% 12.0% 24.0%
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E. Corporate Exempt (Cont'd) Min. Target Max.
---------------- --- ------ ---
2. Positions with less than 700 Hay points
Corporate E.P.S. vs. PP 0% 4.0% 8.0%
Corporate RONA vs. PP 0% 4.0% 8.0%
---- ------ ------
0% 8.0% 16.0%
F. 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; TTH
Canadian District Sales Manager and TTH
Wood Mills Exempt Employees)
(REV.)
Huffy Company EBIT vs. PP 0% 5.0% 10.0%
Huffy Company RONA vs. PP 0% 5.0% 10.0%
---- ------ -----
0% 10.0% 20.0%
2. HSF District Managers
District Gross Field Profit % vs. PP 0 2.5% 5.0% (REV.)
District Gross Field Profit $ vs. PP 0 2.5% 5.0% (REV.)
Huffy Company EBIT vs. PP 0 2.5% 5.0%
Huffy Company RONA vs. PP 0 2.5% 5.0%
---- ------ -----
0% 10.0% 20.0%
3. HSF Area Managers
Area Gross Field Margin % vs. PP 0 2.5% 5.0% (REV.)
Area Gross Field Margin $ vs. PP 0 5.0% 5.0% (REV.)
Huffy Company EBIT vs. PP 0 2.5% 5.0%
Huffy Company RONA vs. PP 0 2.5% 5.0%
---- ------ -----
0% 10.0% 20.0%
4. HSF Other Exempt
Huffy Company EBIT vs. PP 0 5.0% 10.0%
Huffy Company RONA vs. PP 0 5.0% 10.0%
---- ------ -----
0% 10.0% 20.0%
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Min. Target Max.
---- ------ ----
5. GBPC Financial Staff (including
all Denver-based MIS, Credit and
Accounting employees except for MIS
LAN Administrator and Cost Accountant)
Huffy Company (without GWPC) EBIT vs. PP 0 4.0% 8.0%
Huffy Company (without GWPC) RONA vs. PP 0 4.0% 8.0%
GWPC RONA vs. PP 0 1.0% 2.0%
GWPC EBIT vs. PP 0 1.0% 2.0%
---- ------ ------
0% 10.0% 20.0%
6. 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) EBIT vs. PP 0 4.0% 8.0%
Huffy Company (without GWPC) RONA vs. PP 0 4.0% 8.0%
GWPC RONA vs. PP 0 1.0% 2.0%
GWPC EBIT vs. PP 0 1.0% 2.0%
---- ------ ------
0% 10.0% 20.0%
7. Other GBPC Exempt
Huffy Company (without GWPC) EBIT vs. PP 0 5.0% 10.0%
Huffy Company (without GWPC) RONA vs. PP 0 5.0% 10.0%
---- ------ ------
0% 10.0% 20.0%
8. GWPC Exempt
GWPC EBIT vs. PP 0 5.0% 10.0%
GWPC RONA vs. PP 0 5.0% 10.0%
---- ------ ------
0% 10.0% 20.0%
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Min. Target Max.
--- ------ ---
9. TTH Canadian District Sales Manager
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.
10. TTH Wood Mills Exempt (REV.)
Huffy Company EBIT vs. PP 0 5.0% 10.0%* (REV.)
Huffy Company RONA vs. PP 0 5.0% 10.0%* (REV.)
Huffy Company Gainsharing Plan 0 -- 12.0%* (REV.)
--- ------ -----
0% 10.0% 20.0%* (REV.)
* Either category of bonus payment may pay up to the maximum award shown, but (REV.)
the maximum total bonus payable shall not exceed 20.0%. (REV.)
11. All WIS exempt positions with Manager or
Director titles (excluding WIS National Account
Manager; WIS National Sales Manager; and
WIS Field Management Personnel)
Huffy Company EBIT vs. PP 0 5.0% 10.0%
Huffy Company RONA vs. PP 0 5.0% 10.0%
--- ------ -----
0 10.0% 20.0%
12. WIS National Account Manager
Huffy Company EBIT vs. PP 0 5.0% 10.0% (REV.)
Huffy Company RONA vs. PP 0 5.0% 10.0% (REV.)
--- ------ -----
0% 10.0% 20.0%
13. Other WIS Exempt and WIS Service
Managers, and WIS Managers in
Training (excluding WIS Field
Management; WIS National Account (REV.)
Manager and WIS National Sales (REV.)
Manager (REV.)
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Min. Target Max.
--- ------ ---
Huffy Company EBIT vs. PP 0 2.5% 5.0%
Huffy Company RONA vs. PP 0 2.5% 5.0%
--- ------ -----
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 recom-mendations will be subject to approval by the Audit
Committee of the Board of Directors.
III. Award Scales(1)
---------------
Huffy Company RONA vs. Plan (REV.)
Huffy Company EBIT vs. Plan % of Targeted
Corporate RONA vs. Plan Award Earned(2)
---------------------------------------------------- ---------------
A separate letter will be sent to each Huffy (REV.)
Company with their applicable award scale. (REV.)
% of Targeted
Corporate EPS vs. Plan Award Earned(2)
------------------------------------------------------ ---------------
The 1996 award scale is maintained by the (REV.)
Vice President and Controller. (REV.)
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
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% of Targeted
Award Earned
------------
HSF District Gross Field Profit % vs. PP (REV.)
HSF Area Gross Field Margin % vs. PP (REV.)
- ------------------------------------
Greater than -1.00% below -0- (REV.)
-1.00 Threshold 25 (REV.)
-0.67 50 (REV.)
-0.33 75 (REV.)
PP% Target 100 (REV.)
+0.5 133 (REV.)
+1.0 167 (REV.)
+1.5 Maximum 200 (REV.)
1. The scales are sliding. When actual performance 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. Percent of targeted award earned is used as a multiple of bonus
target which varies by level of employee. Refer to Section I.
IV. Positions Covered
A. Corporate Officers and Huffy Company Presidents
Corporate Officers
------------------
Chairman of the Board, President & CEO
Vice President - Finance and CFO
Vice President - Controller
Vice President - General Counsel and Secretary
Vice President - 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
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B. Huffy Company Staff
- HBC
---
V.P./G.M. - Celina
V.P./G.M. - Farmington
V.P. Marketing
V.P. Controller
V.P. Plant Operations and Logistics
V.P. Human Resources
V.P. Sales (REV.)
- HSC
---
V.P. Sales and Marketing (REV.)
V.P. Controller
V.P. Product Engineering/Quality Assurance
V.P. Manufacturing
V.P. Materials Management
- GBPC
----
V.P. Sales/Marketing/Design
V.P. Controller
V.P. Operations and Engineering
V.P. Human Resources
V.P. General Manager - GWPC
V.P. and Corporate Counsel (REV.)
- 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. Sales and Account Management
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- TTH
---
V.P. Sales and Marketing
V.P. Operations
V.P. Controller
V.P. Human Resources
Managing Director, TT Ireland
V. Individual Personal Objectives
------------------------------
Bonus Opportunity as a % of
Actual Base Salary
---------------------------------------
Below
Position Threshold Threshold Maximum
-------- --------- --------- -------
A. Chairman, President & CEO 0% 10.0% 20.0%
-------------------------
B. Executive Vice President & COO 0% 8.0% 16.0%
------------------------------
C. Corporate Officers and
----------------------
Huffy Company Heads 0% 6.0% 12.0%
-------------------
D. Huffy Company Staff 0% 3.0% 6.0%
-------------------
E. Corporate Exempt
----------------
1. Positions with 700 or
more Hay Points 0% 3.0% 6.0%
2. Positions with less than
700 Hay Points 0% 2.0% 4.0%
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 EBIT or RONA goals in the Profit Plan.
(Financial goals for such things as cost reduction or similar
projects are appropriate goals.)
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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 Executive Vice 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 and Other Corporate
Exempt shall each develop no more than 3 objectives.
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 CEO's and COO's objectives shall be communicated to
Compensation the Corporate Officers and Huffy Company Presidents
Committee 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 submit them to their
respective supervisor. (REV.)
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Corporate Officers' and Huffy Company Presidents'
10 days later objectives shall be approved by their respective (REV.)
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 Other Corporate Exempt and Huffy
Company Staffs ("Huffy Staff").
30 days later Huffy Staff personnel shall have submitted and received (REV.)
approval of their objectives from their respective Huffy (REV.)
Company President. Corporate Staff shall have submitted (REV.)
and received approval of their objectives from their (REV.)
respective Corporate Officer. Other Corporate Exempt (REV.)
shall have submitted and received approval of their (REV.)
objectives from their respective Corporate Staff (REV.)
supervisor or, if applicable, supervising Corporate (REV.)
Officer. (REV.)
(REV.)
5. Personal Objectives Results Schedule
------------------------------------
First Friday in Corporate Staff and Other Corporate Exempt shall submit
December their results for the year ending for evaluation to the
appropriate Corporate Officer and immediate supervisor,
respectively, and, with respect to Huffy Staff, to their
Huffy Company President.
10 days later Personal objective results for Corporate Staff, Other
Corporate Exempt and Huffy Company Staff shall have been
reviewed and have received comments as follows:
- Corporate Officers shall comment to their Corporate
Staff and Other Corporate Exempt, if immediately
supervised. (REV.)
- Supervisors of Other Corporate Exempt. (REV.)
- Huffy Company Presidents to Huffy Staff. (REV.)
10 days later CEO and COO provide Compensation Committee of Board of (REV.)
Directors with their results for evaluation and approval. (REV.)
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Corporate Staff and Other Corporate Exempt and personnel
5 days later results shall be approved by their immediate supervisors. (REV.)
Huffy Staff personnel results shall be approved by Huffy (REV.)
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) ALL CORPORATE OFFICERS, HUFFY COMPANY PRESIDENTS, HUFFY STAFF, (REV.)
CORPORATE STAFF AND OTHER CORPORATE EXEMPT. (REV.)
A separate letter outlining the parameters of Personal (REV.)
Objectives eligibility shall be forwarded to each Huffy (REV.)
Company President and Corporate Officer. (REV.)
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.
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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.
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
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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 I - 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.
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Definitions
-----------
Consolidated RONA Profit after tax after cost of plan plus
----------------- tax affected interest expense divided by
the twelve (12) month rolling average of
total assets less current liabilities
excluding all interest bearing debt.
E.P.S. Earnings per common share.
------
Huffy Company RONA Earnings before interest and taxes, tax
------------------ affected at the current profit plan tax
rate, divided by the twelve (12) month
rolling average of total assets other
than goodwill less current liabilities
excluding all interest bearing debt.
EBIT Earnings before interest and taxes.
----
Actual Base Salary Employee's actual base salary as of the
------------------ January 1 of 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 with substantially
-------- different duties and responsibilities
which does not constitute a promotion or
demotion.
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 and 701-C which is restricted to
Corporate Officers and President and General Manager of WIS. (REV.)
/s/ DONALD R. SCHEICK /s/ RICHARD L. MOLEN
____________________________________ ___________________________________
Director, Corporate Human Resources Chairman, President and
Chief Executive Officer
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