AMENDED AND RESTATED
WORLDWIDE
KEY EXECUTIVES'
DISCRETIONARY BONUS PLAN
I. ADOPTION OF
PLAN
Johnson
Outdoors Inc. (the "Company") adopted this Plan effective October
1, 2000 and amended and restated this Plan effective July 1, 2005
for key executives (the "Participants") of its worldwide
operations. The Plan shall be ongoing until terminated by the Board
of Directors of the Company or the Compensation Committee of the
Board of Directors (the "Compensation Committee"). Except as
otherwise provided in Section VI., awards shall be made under this
Plan, if, and only if, authorized by the Compensation Committee,
and shall be made in accordance with the Plan.
II. PURPOSES OF THE
DISCRETIONARY BONUS PLAN
The purpose of
the Plan is to provide incentive compensation to Participants which
indirectly relates the financial reward to an increase in the value
of the Company to our shareholders. The key philosophy behind the
Plan is that value must continue to be created over time in order
for bonuses to be paid. Additionally, the Plan is intended
to:
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A.
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Motivate
Participants to achieve individual/team results.
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B.
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Motivate
Participants to develop maximum resourcefulness and resiliency in
planning and directing their organizations in the face of changing
competitive, economic, political and other conditions.
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C.
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Provide an
incentive for Participants to constructively assist other
organizations in the Company to meet current and future
challenges.
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D.
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Encourage
Participants to develop realistic yet challenging annual key
objectives that will stretch their organization's
capabilities.
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III. DISCRETIONARY BONUS
PLAN
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Each year, or
more frequently as may be required, the Compensation Committee
shall select those Participants who shall be eligible for this
Plan.
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Eligibility of
a position in the Plan in a given year is not a guarantee that a
payout will be made to an incumbent for that year. Incumbents in
approved eligible key executive positions will be notified of their
selection as a Participant prior to the beginning of the fiscal
year. Additional Participants may be added during the fiscal year
by the Compensation Committee.
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B.
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Administration of the Plan
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Individual
bonus awards shall be based on the total base salary received by
the Participant during the fiscal year. For this purpose, the term
"base salary" shall not include profit sharing, expense allowances
or any other payments or benefits, whether legally required or
not.
Target bonus amounts will be established by the
Compensation Committee before the start of each fiscal year for all
eligible Participants. These target bonus amounts are not intended
to limit the Compensation Committee's complete flexibility in
exercising its discretion in any way. The target bonus amount can
range from 10% to 100% of base salary, depending upon the
Participant's position. The bonus range for purposes of payout is
0% to 200% of the target bonus amount (as an example, a Participant
with a bonus target of 25% will have a payout range of 0% to 50% of
base salary).
Each Participant will have his/her target bonus
split, with a portion allocated to achievement of revenue growth
and income in excess of the cost-of-capital (the "Return and Growth
Matrix") or other financial measure or measures AND a portion
allocated to achievement of individual objectives (the "MBOs"). In
all cases, the minimum percentage of the target bonus allocated to
the Return and Growth Matrix or other measures will be 60% for all
Participants.
When target bonuses are established in each
year, the cost of the Plan for that year shall be estimated for the
Compensation Committee's approval. However, regardless of the
performance level of individual Participants, overall Company
financial performance shall be considered in determining the degree
to which the sum total of all bonuses is deemed affordable and
justified and bonus awards may be adjusted to reflect that
determination.
3.
Determination of Return and
Growth Matrix Award
For each fiscal year, a Return and Growth Matrix
will be developed for Johnson Outdoors as a whole and may be
developed for each Group (i.e. — Watercraft or Global
Diving).
Depending on the Participant's position, the
Return and Growth Matrix performance goals may be determined at one
or more levels as described above. As an example, corporate staff
may be based on Johnson Outdoors, whereas a Participant at the
subsidiary level may have their award based on a combination of
their Group and Johnson Outdoors performance.
For all Participants, of the portion of the
target bonus allocated to the Return and Growth Matrix, at least
10% will be based on Total Johnson Outdoors performance.
4.
Determination of Individual
Awards
Each Participant will develop individual
objectives (MBOs), which will be reviewed and approved by the
Compensation Committee in advance, that are aligned with one or
more of the following areas:
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a)
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Business or
position specific financial
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b)
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Cross-business
partnerships (networking)
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c)
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New product
innovation
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d)
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People
development/organization capacity
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Depending on the Participant's position, he/she
may have objectives in one or more of the
aforementioned areas. In all cases, so as to not diminish the
importance of these objectives, no Participant may
establish more than 4 MBOs in aggregate.
In determining
MBO awards, the Compensation Committee shall assess the following
factors:
•
results against all annual
objectives
•
retrospective assessment of the
degree of stretch required to accomplish the objectives
IV.
ADMINISTRATIVE
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A.
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Termination
Prior to Payout
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Should the
employment of a Participant terminate for any reason before payout
under this Plan is made, the Compensation Committee or other
designated final approval authorities will consider the
circumstances of his/her termination and may, in his/her or their
sole discretion, adjust or eliminate such bonus award as deemed
appropriate.
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B.
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Awards Fully
Discretionary
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It is expected
that individual awards will vary and that overall performance
differences will be reflected in differing awards. There is neither
a fixed formula nor a guarantee that awards will be made to
Participants under this Plan; nor is there any commitment
whatsoever by the Company that it shall make any payments in a
given year.
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C.
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Detailed
Plan Administration
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Two levels of
approvals are normally required for performance objectives and
awards, including a signature of an Executive Officer. Awards
require the final approval of the Executive Officer to whom the
Participant directly or indirectly reports, subject to review by
the Compensation Committee.
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D.
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Process for
Preparing & Securing Approval of Individual Objectives
(MBOs)
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Participants
and their superiors establish annual objectives for the next fiscal
year in conjunction with the adoption of the annual budget for that
year.
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The format for
objective setting is distributed to Participants by their superiors
prior to the start of the fiscal year. Each Participant drafts
his/her objectives; the Participant then discusses them with the
superior and together they reach a mutual agreement on objectives.
The objectives receive final approval from the Compensation
Committee. Following its approval, the finally approved objectives
are then returned to each Participant.
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E.
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Reviewing
Year End Results
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At the close of
the fiscal year, the superior evaluates the Participant's
performance against the annual objectives established for such
year. This information is discussed with the Participant, who is
given an opportunity to provide additional information or evidence
of completion. The superior submits his/her evaluation of
performance against objectives and assessment of overall
performance to the next level of management and the Compensation
Committee.
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F.
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Recommended
Bonus Awards
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Based on the
year end results reported in E. above, bonus award recommendations
are made to the Compensation Committee by the Executive Officer to
whom the eligible Participant reports. In the absence of the
appropriate officer to recommend a bonus award, the Compensation
Committee can act.
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G.
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Reserved
Authority of the Compensation Committee
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The
Compensation Committee shall have final authority to approve or
change any recommended individual bonuses. It may, at its sole
discretion, reduce, eliminate or increase such recommended bonuses,
regardless of anything contained in this Plan.
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An individual
who is hired/promoted into a position that is eligible to
participate in the Plan may be granted a bonus award in the year of
entry in such an amount as may be deemed appropriate by the
Compensation Committee.
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A Participant
who transfers from one operation to another during the Plan year
will have his/her performance goals modified to reflect the time
spent working in each operation.
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Participation
in the Plan provides no guarantee that a bonus under the Plan will
be awarded or paid.
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The Company
shall have the right to withhold the amount of taxes which, in the
sole determination of the Company, are required to be withheld
under law with respect to any amount due or paid under the
Plan.
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L.
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No Prior
Right or Offer
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Except and
until expressly granted pursuant to the Plan, nothing in the Plan
shall be deemed to give any employee any contractual or other right
to participate in the benefits of the Plan. No award to any such
Participant in any Plan Period shall be deemed to create a right to
receive any award or to participate in the benefits of the Plan in
any subsequent fiscal year.
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M.
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No Continued
Employment
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Neither the
establishment of the Plan or the grant of an award thereunder shall
be deemed to constitute an express or implied contract of
employment on any Participant for any period of time or in any way
abridge the rights of the Company to determine the terms and
conditions of employment or to terminate the employment of any
employee with or without cause at any time.
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N.
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Not Part of
Other Benefits
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The benefits
provided in this Plan shall not be deemed a part of any other
benefit provided by the Company to its employees. The Company
assumes and shall have no obligation to Participants except as
expressly provided in the Plan.
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V. METHOD OF PAYMENT OF
DISCRETIONARY BONUS AWARDS
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A.
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Bonus Not
Counted As Compensation
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Bonus payments
shall be excluded from the computation
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