EXHIBIT 10.6
Executive Staff F'95 Bonus Plan Criteria
Executive Staff Measurements
The fiscal 1995 bonus plan for executive staff will consist of the following:
a) 40% Return on Net Assets (RONA)
b) 40% Earnings Per Share (EPS)
c) 20 % Personal Objectives
For all officers, personal objectives have been established which represent key
program/project leadership activities for the current year.
Supporting Definitions:
Average Net Assets: Average quarterly net assets. Net assets equal total
assets less current liabilities and debt included in current liabilities.
Earnings Per Share: Net Income divided by Average Number of Common Shares
Outstanding during the period.
Return on Net Assets: After tax Income (excluding interest) divided by
Average Net Assets. RONA is a financial indicator of the ability of the
Company to generate profits utilizing available assets in an efficient manner.
Personal Objectives: Represent key program/project leadership activities for
the current year.
NOTE: With regard to personal objectives, the objectives will serve as a
guideline, however recommendations to the Committee by the CEO will take into
account evolving priorities during the year.
Bonus recommendations are presented to the Compensation Committee for their
approval after the fiscal year results are available.
Executive Staff F'95 Measurements and Bonus Plan
100%
Bonus Measurement: * 50% (Target) 200%
------- --------- --------
40% Return on Net Assets 10.0% 11.0% 13.5%
40% Earnings Per Share $1.45 $1.60 $1.90
20% Personal Objectives - - -
Proposed Bonus
Name Functional Area Payout @ 100%
- - ---------------------------------------------------------------------
Sim * CEO - API $232,000
Arzbaecher CFO $70,000
Dorszynski Tax & Treasury $29,000
Foote Business Development $50,000
Knutson Technology $35,000
Lampereur Controller $28,000
* Except in the case of Sim, where 50% of the bonus measurement is based on
Return on Net Assets, 50% is based on Earnings Per Share and there is no
provision for Personal Objectives.
Group Executive F'95 Measurements and Bonus Plan
Group Executive Measurements
The Fiscal 1995 bonus plans for Group Executive Operating Officers will consist
of the following:
a) 20% Applied Power Financial Results (RONA and EPS)
b) 60% Group Business Results (1) (2)
c) 20% Personal Objectives
The business unit financial targets for fiscal 1995 have been established based
upon the business plans submitted by each business unit, current year Corporate
contribution requirements for profitability, and agreed upon long term
investments. Operating Officers will be eligible for the personal objective
portion of the bonus if Corporate meets the established minimum financial
threshold (RONA and EPS).
(1) CMM = Operating Profit - (20% x Monthly Net Assets)
(2) Targeted bonus plan levels for CMM may be modified during the plan year due
to mergers and acquisitions.
NOTE: With regard to personal objectives, the objectives will serve as a
guideline, however recommendations to the Committee by the CEO will take into
account evolving priorities during the year.
Bonus recommendations are presented to the Compensation Committee for their
approval after the fiscal year results are available.
Group Executive F'95 Bonus Plan
Bonus Measurements:
20% Applied Power Financial Results (RONA and EPS)
60% Business Group Results (CMM)
20% Personal Objectives
CMM $MM Total
Business -------------------------- Bonus Payout (1)
Name Unit 50% 100% 200% @ 100%
(Target) (Target)
- - --------------------------------------------------------------------------------
Albrecht ESG $4 $8 $10 $90,000
Deuster DPG $14 $17 $19 $100,000
CMM = Operating Profit - (20% x Monthly Net Assets)
(1) 100% Total Bonus Payout Level for attaining API, Business Group CMM and
Personal Objectives.
Business Unit F'95 Bonus Plan
Bonus Measurements:
Lecher: van Eyck:
80% Combined Management Measure (CMM) 50% Sales
20% Personal Objectives 50% Personal Objectives
CMM $MM Total
Business -------------------------- Bonus Payout (1)
Name Unit 50% 100% 200% @ 100%
(Target) (Target)
- - --------------------------------------------------------------------------------
Lecher GB Electrical $3.50 $4.00 $5.00 $70,000
Sales
----------------------------
van Eyck Asian Operations (2) $30.00 $32.00 $36.00 Y8mm (3)
CMM = Operating Profit - (20% x Monthly Net Assets)
(1) 100% Total Bonus Payout Level for attaining CMM and Personal
Objectives.
(2) Asian Operations include operating responsibilities for ongoing
business in Japan & Korea as well as overall business
development for API business units.
(3) Using 100 yen = $1 US and 800 won = $1
US.