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Exhibit 10.u
June 21, 1996 REVISED 9-6-96
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Xx. Xxxxxx X. Xxxxxx
Dear Xxx:
Xxx, this letter will confirm the verbal agreement we reached June 20, 1996
regarding your pension benefits as well as long term disability arrangements
during the first three years of your employment.
1. You will not be eligible to draw, under any circumstances, pension
benefits until your 57th birthday.
2. If you are involuntarily terminated by Xxxxx at any time during
your first three years of employment for reasons other than
disability, you will be eligible to begin receiving an annual pension
benefit at age 57 of $115,000 per year, less taxes. This benefit will
be considered a Married Participant Annuity, which means that if you
predecease your spouse, she will be entitled to receive a survivor
benefit equal to one-half the benefit paid to you while you were alive
or $57,500. This provision is subject to Paragraph 21. d. of the
Employment letter, dated June 11, 1996.
3. If you should become totally and permanently disabled at any time
during the first three years of your employment, you will remain on
disability until age 65, at which time you will commence pension
benefits of $115,000 per year, less taxes, adjusted to age 65 using the
Huffy Corporation Supplemental/Excess Benefit Plan early commencement
reduction factor of 4%. Thus, at age 65 you would begin receiving a
pension benefit of $169,118. This benefit will be considered a Married
Participant Xxxxxxx as described in paragraph #2 above.
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Xx. Xxxxxx X. Xxxxxx
June 21, 1996
Page Two
4. Assuming you continue to work for Huffy until you elect to retire, your
total annual pension benefit will be capped at $250,000, less taxes.
The table below illustrates this:
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ASSUMED CALCULATED ANNUAL ANNUAL RETIREMENT BENEFIT
RETIREMENT AGE RETIREMENT BENEFIT ACTUALLY PAYABLE
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61 $237,400 $237,400
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62 277,800 250,000
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63 318,200 "
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64 358,000 "
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65 398,000 "
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Such pension benefit will be treated as a Married Participant Xxxxxxx as
outlined in paragraph #2 of this letter.
Xxx, I believe this accurately reflects our discussion. If so, please indicate
your agreement by signing as provided for below.
Sincerely,
/s/ XXXXXXX X. XXXXX
Xxxxxxx X. Xxxxx
Chairman, President & CEO
cc: Xxx Xxxxxxx
I ACCEPT THE FOREGOING: /s/ XXXXXX X. XXXXXX 6/24/96
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XXXXXX X. XXXXXX DATE
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EXHIBIT C
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The Employer shall xxxxx Xxxxxx two (2) years of additional Credited Service
under the Retirement Plan for each one (1) full year of Actual Service under the
Retirement Plan completed during Xxxxxx'x first five years of employment with
the Employer. For purposes of this Exhibit C only, Actual Service shall mean
service while on the active payroll, salary continuation or long-term
disability. Thus, upon Xxxxxx'x fifth anniversary with the Employer, Xxxxxx
shall have ten (10) years of additional Credited Service in addition to the five
(5) years of Actual Service completed, for a total of fifteen (15) years of
Credited Service.
Notwithstanding the foregoing, if his employment is involuntarily terminated
during his first three years of employment for any reason (including a change of
control), excluding only total and permanent disability (as discussed below) and
voluntary resignation, in such event, Xxxxxx will be eligible to begin receiving
an annual pension benefit beginning at age 57 of $115,000, less taxes, at age
57. Such pension shall be considered to be in the form of a 50% Joint and
Survivor Married Participant Annuity. If Xxxxxx dies prior to the attainment of
age 57, subject to the foregoing, his surviving spouse shall be paid an annual
annuity equal to one-half of the $115,000 (or $57,500) at such time as Xxxxxx
would have reached age 57. Upon retirement, Xxxxxx may elect an alternate
payment option, as permitted under the Retirement Plan, which option shall be
calculated in accordance with the provisions of the Retirement Plan. This means
the $115,000 annual benefit payable to Xxxxxx and, following his death, to his
spouse, should she survive, shall be actuarially adjusted consistent with the
option elected.
In addition, if Xxxxxx should become totally and permanently disabled, as
determined by the insurance carrier for the long-term disability policy
maintained by the Employer, which is then in effect, or, if none, as determined
by the Retirement Committee, at any time during the first three years of his
employment with the Employer, he shall receive payment of long-term disability
payments based on his salary at the time of such disability in accordance with
the terms of the long-term disability policy then in effect until age 65. At age
65, he shall receive pension benefits of $169,118 per annum, being $115,000 per
annum at age 57, adjusted to its age 65 equivalent using the Plan's early
commencement reduction factor of 4% per annum. Such $169,118 pension payment
will be considered to be in the form of a 50% Joint and Survivor Married
Participant Annuity as described in the preceding paragraph.
Finally, provided Xxxxxx remains continuously employed past his third
anniversary date of employment by the Employer, Xxxxxx may then elect to retire,
in his sole discretion, in accordance with the Retirement Plan's terms. Xxxxxx'x
annual pension benefit under the Plan upon termination of employment for any
reason or retirement shall not exceed the lesser of the annual pension benefit
calculated under the Plan (Column I) or $250,000 (see Column II), less taxes,
and such annual pension benefit shall be treated as a 50% Joint and Survivor
Married Participant Annuity, unless an alternate payment option is elected in
accordance with Retirement Plan's terms in which case such option election shall
be actuarially adjusted consistent with the option elected.
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EXHIBIT C (CONT'D)
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COLUMN I
EXAMPLE OF COLUMN II
ASSUMED CALCULATED EXAMPLE OF
EXAMPLE OF ANNUAL PENSION BENEFIT ACTUAL ANNUAL PENSION
RETIREMENT AGE UNDER PLAN BENEFIT PAYABLE
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61 $237,400 $237,400
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62 $277,800 $250,000
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63 $318,200 $250,000
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64 $358,000 $250,000
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65 $398,000 $250,000
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