1
Exhibit 10.t
TRANSITION/CONSULTING COMPENSATION AGREEMENT
--------------------------------------------
This Transition/Consulting Compensation Agreement is dated as of June 13, 1996,
by and between HUFFY CORPORATION, an Ohio corporation, with principal offices at
225 Byers Road, Miamisburg, Ohio 45342 ("Huffy") and RICHARD L. MOLEN, an
individual residing at Dayton, Ohio 45429 ("Molen"), under the following
circumstances:
A. Molen currently serves as Chairman of the Board of Directors and Chief
Executive Officer of Huffy and, as part of a planned management
transition, plans to relinquish his position as Chief Executive Officer
and to retire in accordance with the "Rule of 85" under the Huffy
Salaried Employees' Retirement Plan from employment by Huffy on December
31, 1998 (the period from June 13, 1996 through December 31, 1998, being
referred to as the "Transition Period").
B. Molen and Huffy desire to reach certain agreements with respect to
Molen's compensation and benefits in connection with such management
transition.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:
1. TRANSITION PERIOD. Effective June 13, 1996, Molen shall receive a grant
award of 100,000 Non-Qualified Stock Options ("NQSOs"), without
accompanying stock appreciation rights, for shares of Common Stock under
the 1988 Stock Option and Restricted Share Plan ("1988 Plan"), at the
closing market price of Huffy Corporation Common Stock on June 13, 1996.
The NQSOs by their terms expire June 13, 2006, and may be exercised at
the rate of one-third of the total grant after June 13, 1998, another
one-third after June 13, 1999, and the final one-third after June 13,
2000. No additional options shall be granted to Molen under the 1988
Plan or any successor plan during or after the Transition Period.
Effective May 1, 1997, subject to acceptable performance and the terms
of this Agreement, Molen's annual base salary shall be increased to
$525,000 through December 31, 1998, the date of his retirement. Except
as otherwise set forth in this Section 1, and subject to Sections 4 and
5 herein, Molen shall be entitled to participate in all other
Officer/employee plans in accordance with the terms of those plans
during the Transition Period.
2. POST TRANSITION PERIOD. During the period commencing January 1, 1999,
and ending on December 31, 2000, Molen shall, subject to election by the
Board of Directors, serve as Chairman of the Board of Directors and
shall consult with the Company as determined by the Chief Executive
Officer of Huffy and approved by the Board of Directors. Molen shall
meet with the Chief Executive Officer each January, beginning January,
1999, and review and agree on the various responsibilities, projects or
assignments to be undertaken by Molen during that period, including,
2
Page 2
without limitation, responsibilities in assisting the Chief Executive
Officer with Management transition and liaison with the Board of
Directors. Such responsibilities, projects or assignments, number of
days to be worked and such allocation of the days to be worked, and
secretarial assistance needed, if any, shall be subject to review and
approval by the Board of Directors.
During such period, Molen shall receive, as consulting fees for such
work, a monthly amount computed by dividing his annual base salary on
December 31, 1998, by twelve (12) and then multiplying the result by the
following appropriate percentage:
DURING THE PERIOD PERCENTAGE
----------------- ----------
January 1, 1999 - December 31, 1999 66 2/3%
January 1, 2000 - December 31, 2000 33 1/3%
In addition, Molen shall also receive the following compensation.
(i) Under the Huffy Profit Sharing Bonus Plan, (i) on or about March
1, 2000, an amount equal to 66 2/3%, and (ii) on or about March
1, 2001, an amount equal to 33 1/3% of the Huffy Profit Sharing
Bonus earned by Molen, if any, in 1998 and paid in 1999.
(ii) Under the Long Term Incentive Plan, 100% of the payment, if any,
earned by Molen for the award cycle ending December 31, 1998 and
66 2/3% of the payment, if any, that would have been earned by
Molen as Chief Executive Officer for the award cycle ending
December 31, 1999. The benefit for each such award cycle shall
be determined in accordance with the plan and paid to Molen when
paid to other Huffy Officers.
On and after his retirement on December 31, 1998, Molen shall be
entitled to receive the retirement benefits then provided under the
provisions of the Huffy Salaried Employees' Retirement Plan and the
Huffy Supplemental/Excess Benefits Plan. In addition, Molen shall be
entitled to participate in the employee health care plan and in life,
AD&D and travel insurance on the same basis as other early retirees
under the Huffy Salaried Employees' Retirement Plan who are under the
age of 65, excluding, however, any group insurance available to Molen as
a non-employee Director. Except as otherwise provided in this Agreement,
after December 31, 1998, Molen shall be entitled only to those benefits
and to participate in those plans and programs available to other then
retirees of Huffy and/or to non-employee Directors of Huffy.
Except as set forth in this Agreement, commencing January 1, 2001, and
continuing until his retirement from the Board of Directors, pursuant to
the Board of Directors' retirement policy, Molen shall, subject to
election by the Board of Directors, serve in such position and for such
compensation as determined by the Board of Directors.
3
Page 3
3. MODIFIED COMPENSATION PROGRAMS. The following programs will be modified
with respect to Molen as follows:
a. The 1993 CEO Long-Term Performance Plan between Huffy and Molen
shall be amended to allow all of the Performance Awards (as
defined in such Plan) to be earned during the entire Performance
Period (as defined in such Plan) set forth in Section 4.b.
therein, unless Molen dies or becomes disabled.
b. The 1987 Restricted Stock Unit Agreement between Huffy and Molen
shall be revised to amend the definition of "Termination Date" to
allow each Account (as defined in such plan) to be paid ten years
following the Award Date (as defined in such plan), unless Molen
dies or becomes disabled.
c. The Huffy Corporation Voluntary Deferred Compensation Agreements
between the Corporation and Molen may, at the election of Molen,
be amended to extend the Termination Date(s) (as defined in such
Agreements) to up to December 31, 2013, subject to those
conditions imposed by the Corporate Benefits Advisory Committee
relating to amendments to change the Termination Date(s).
4. NON-COMPETITION. Molen agrees that during the period that compensation
and/or benefits are being paid to him hereunder and for a period of five
(5) years thereafter, without the prior written approval of the Board of
Directors of Huffy, he shall not, either as a consultant, shareholder,
joint venturer, partner, officer, employee, licensee, licensor, agent,
solicitor, distributor, creditor, advisor, principal, director, dealer,
representative or in any other capacity, in any way engage or
participate, directly or indirectly, (a) in any business which is a
major customer of Huffy or any of its affiliated or subsidiary
companies, or the successors or any of the related interests of any of
them, (b) in any business which competes against any of the businesses
engaged in or contemplated by Huffy or any of its affiliated or
subsidiary companies, or the successors or any of the related interests
of any of them (it being understood and agreed that the business
activities of Huffy and its affiliated and subsidiary companies are
carried on throughout the world), or (c) in any business which seeks to
purchase or otherwise acquire, merge, consolidate or otherwise combine
with, or otherwise achieve control of Huffy or any of its affiliated or
subsidiary companies. In the event of any violation of this restrictive
covenant, Huffy may, to the extent permitted by law, forthwith
discontinue the payment of any or all further compensation provided in
Sections 1, 2 and/or 3 herein as well as benefits under the
Supplemental/Excess Benefit Plan and/or may enforce such restrictive
covenants by specific performance in any court of competent jurisdiction
in the world and/or in an action for monetary damages. If any court of
competent jurisdiction shall determine either the period or the
territory covered by this restrictive covenant is unreasonable, said
restrictive covenant shall not be deemed to be null, void and of no
effect, but shall be reformed by said court to impose a reasonable
period or a reasonable territorial limitation, as the case may be.
5. WAIVER, AMENDMENT. Any waiver, alteration or modification of any of the
provisions of this Agreement or cancellation or replacement of this
Agreement shall not be valid
4
Page 4
unless in writing, signed by the parties and approved by the Board of
Directors of Huffy.
6. STATE OF LAW. This Agreement shall be governed by the laws of the State
of Ohio in all respects. If any provision hereof is contrary to or
prohibited by or deemed invalid under federal, state or local law, such
provision shall, if the parties agree, be amended to comply with
applicable law, or if no such agreement, be inapplicable and deemed
omitted.
7. ASSIGNMENT. This Agreement shall inure to the benefit of and bind the
parties hereto and their respective legal representatives, successors
and assigns; provided, however, that Molen shall not assign this
Agreement or any of his rights hereunder without the prior written
consent of Huffy.
8. NOTICES. Notices hereunder shall be deemed given upon receipt of same
by certified or registered mail, with postage prepaid, addressed as
follows:
If to Huffy, to:
Huffy Corporation
P.O. Box 1204
Dayton, OH 45401
Attention: Secretary
If to Molen, to:
Richard L. Molen
Dayton, OH 45429
Any party may change its or his address for purposes of notices
hereunder by notice duly given to the other party as provided above.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.
/S/ Richard L. Molen
----------------------------
Richard L. Molen
HUFFY CORPORATION
By: /S/ Nancy A. Michaud
------------------------
Vice President - General
Counsel and Secretary