EXHIBIT 10.iii
TRANSITION COMPENSATION AGREEMENT
This Transition Compensation Agreement, dated as of February 13, 2004, by and
between HUFFY CORPORATION, an Ohio corporation, with principal offices at 000
Xxxxx Xxxx, Xxxxxxxxxx, Xxxx 00000 ("Huffy") and XXX X. XXXXXX, an individual
residing at 000 Xxxxxx'x Xxxxxxxxxx Xxxxx, Xxxxx, Xxxx 00000 ("Xxxxxx"), is
effective as of January 1, 2004.
WITNESSETH:
WHEREAS, Xxxxxx 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 retire from his position as Chief Executive Officer and as an employee
of the Corporation on January 31, 2004, and thereafter to consult on a part-time
basis through March 31, 2004, and will serve as a non-employee Chairman of the
Board through December 31, 2004; and
WHEREAS, Xxxxxx and Huffy desire to reach certain agreements with respect to
Xxxxxx'x compensation and benefits from and after January 31, 2004.
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:
1. Consultant. Following Xxxxxx'x retirement as an employee of the
Corporation, during the period commencing February 1, 2004, and ending
on March 31, 2004, Xxxxxx shall serve as a consultant for Huffy for
such projects as Xxxxxx and the Chief Executive Officer shall agree.
Number of
Period Hours Worked
---------------------------------- -----------------------
February 1, 2004 to March 31, 2004 Up to 160 hours or
as agreed with the
Chief Executive Officer
As compensation for serving as a consultant, Xxxxxx shall receive fees
of $51,666 monthly, payable biweekly. Xxxxxx hereby acknowledges he
will be an independent contractor responsible for all taxes owed on
such fees; Huffy shall issue Xxxxxx a Form 1099 for such compensation.
2. Non-employee Director. Following his retirement on January 31, 2004,
Xxxxxx shall, subject to election by the Board of Directors, serve
during the period commencing on February 1, 2004, as Chairman of the
Board of Directors, and shall devote such time as shall be deemed
necessary by the Board of Directors and/or the Chief Executive Officer
in the performance of the duties of such position and in assisting the
Chief Executive Officer with management transition and liaison with the
Board of Directors. During such period, so long as Xxxxxx shall perform
such services, Xxxxxx shall receive as compensation for such services,
the sum of $75,000 through December 31, 2004, payable in nine (9)
equal monthly installments of $8,333.33 each, which shall be in lieu of
all other Director fees and retainers.
3. Non-Compete. Xxxxxx agrees that beginning on February 1, 2004 and
continuing during the period that compensation and/or benefits are
being paid to him hereunder and for a period of two (2) 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, discontinue the
payment of any or all further compensation provided in Section 1 or 2
hereunder as well as those benefits listed on Schedule A 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.
4. Entire Agreement. This Agreement constitutes the entire agreement as to
Xxxxxx'x transition. Any waiver, alteration or modification or any of
the provisions of this Agreement or cancellation or replacement of this
Agreement shall not be valid unless in writing, signed by the parties
and approved by the Board of Directors of Huffy.
5. Ohio 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 such laws, such provision shall
be inapplicable and deemed omitted.
6. 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 Xxxxxx shall not assign this
Agreement or any of his rights hereunder without the prior written
consent of Huffy.
7. Notice. 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
000 Xxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attention: Secretary
If to Xxxxxx, to:
Xxx X. Xxxxxx
000 Xxxxxx'x Xxxxxxxxxx Xxxxx
Xxxxx, XX 00000
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/ Xxx X. Xxxxxx
--------------------------------------
Xxx X. Xxxxxx
HUFFY CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------
Xxxxx X. Xxxxxxx
Secretary
SCHEDULE A
TO
TRANSITION COMPENSATION AGREEMENT
DATED AS OF FEBRUARY 13, 2004 BETWEEN
HUFFY CORPORATION AND XXX X. XXXXXX
The following additional compensation and benefits shall be provided to Xxxxxx
for the period indicated under the Transition Compensation Agreement.
1. Retirement. Xxxxxx shall be entitled to receive the retirement benefits
then provided under the provisions of the Huffy Corporation Retirement
Plan and the Huffy Corporation Supplemental/Excess Benefit Plan
("SERP"), upon his retirement on January 31, 2004. Xxxxxx will also be
eligible for up to $15,500 for financial and tax planning in each of
2004 and 2005.
2. Medical/Dental Plans. As a retiree and based on his years of service,
Xxxxxx shall be entitled to participate in the medical/dental plans, on
the same basis as an active Huffy Corporation employee, and an annual
physical in such year, during the period commencing February 1, 2004
and ending upon his 62nd birthday. Until he reaches age 65, Xxxxxx
shall be entitled to participate in the employee medical/dental plans
on the same basis as other early retirees under the Huffy Corporation
Retirement Plan who are under the age of 65 and eligible for such
benefits.
3. Employee Plans. After his retirement, except as otherwise stated
herein, Xxxxxx shall not be eligible for participation in the Annual
Incentive Plan, the Long Term Incentive Plan or other plans which
require participants to be employees to be eligible. However, Xxxxxx
shall be eligible to exercise his rights, as applicable, as a retiree
under the 1998 Key Employee Stock Plan and the Special 2% Deferred
Compensation Plan.
