EXECUTIVE STAFF F'96 BONUS PLAN CRITERIA EXHIBIT 10.6
(1995 10-K)
Executive Staff Measurements:
The fiscal 1996 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 and/or project leadership activities for the current year.
Supporting Definitions:
Average Net Assets or Average Quarterly Net Assets = Total assets - current
liabilities (debt excluded from current liabilities).
Earnings Per Share = Net Income / Average Number of Common Shares Outstanding
during the period.
Return on Net Assets = After tax Income (excluding interest) / 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 = Key program and/or project leadership activities for the
current year. (Personal objectives serve as a guideline. However,
recommendations to the Committee by the CEO take into account evolving
priorities during the year).
EXECUTIVE STAFF F'96 MEASUREMENTS AND BONUS PLAN
Bonus Measurement:*
100%
50% (Target) 200%
----------- ---------- -----------
40% Return on Net Assets 13.50% 15.00% 17.00%
40% Earnings Per Share $2.10 $2.50 $2.90
20% Personal Objectives -- -- --
Name Functional Area Proposed Bonus Payout @ 100%
- - ---------------------------------------------------------------------------------------
Sim* CEO - API $300,000
Arzbaecher CFO $ 80,000
Dorszynski Tax & Treasury $ 32,000
Font Human Resources $ 50,000
Knutson Technology $ 38,000
*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.
EXECUTIVE OPERATING OFFICERS MULTI-BUSINESS UNITS F'96 BONUS PLAN MEASUREMENTS
Multi-Business Unit Leader Measurements:
The fiscal 1996 bonus plan for multi-business unit leaders will consist of the
following:
a) 20% Applied Power Financial Results (RONA and EPS)
b) 60% Business Unit Results(1)(2)
c) 20% Personal Objectives
The business unit financial targets for fiscal 1996 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.
(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: Personal objectives will take into account evolving priorities during the
year as determined by the CEO.
MULTI-BUSINESS UNIT LEADER F'96 BONUS PLAN MEASUREMENTS
F'96 Bonus Measurements:
a) 20% Applied Power Financial Results (RONA and EPS)
b) 60% Business Unit Results(1)(2)
c) 20% Personal Objectives
Total
Business CMM $MM Bonus Payout(1)
Name Unit 50% 100% 200% @ 100%
(Target) (Target)
- - --------------------------------------------------------------------------------------------
Albrecht(2) Engineered Solutions $9.0 MM $12.5 MM $17.0 MM $100,000
Boel Enerpac(3) $11.0 MM $13.0 MM $17.0 MM $90,000
CMM = Internal Operating Profit - (20% x Monthly Net Assets)
(1) 100% Total Bonus Payout Level for attaining API, Business Group CMM and
Personal Objectives.
(2) Engineered Solutions measurement does not include Apitech - Mobile business.
(3) Enerpac Americas, Europe and QMC (excludes Asia Pacific)
EXECUTIVE OPERATING OFFICERS -
SINGLE BUSINESS UNIT F'96 BONUS PLAN MEASUREMENTS
Bonus Measurements for Wright Line and GB Electrical:
100% Operating Profit
1996 Target Objective - Wright Line $16.0 million Operating Profit (62%
improvement over F'95)(1)
GB Electrical $13.1 million Operating Profit (35%
improvement over F'95)(2)
Measures/Payout Scale
Burkart Operating Profit($) 10.1MM 11MM 12MM 13MM 14MM 15MM 16MM 17MM MARKET
(WL)(1) Bonus($) 0 22,500 45,000 67,500 90,000 112,500 144,000 178,500 57,000
Lecher Operating Profit($) 12MM 12.5MM 13.1MM 13.5MM 14MM 14.5MM 15MM 15.5MM MARKET
(GB)(2) Bonus($) 0 28,835 57,669 86,500 131,812 164,764 189,600 214,500 86,500
Plan description: Business must exceed prior year's operating profits to qualify
for any bonus. As profits increase, there is a step linear relationship to bonus
potential.
(1) Based on Wright Line's internal operating profit (excludes acquisition
write-up amortization).
(2) Based on GB consolidated external operating profit, including Vision
Plastics.