Exhibit 10.1

 

2017 SUPREME CASH BONUS PLAN

 

SECTION 1.  DEFINITIONS: Terms capitalized in this 2017 Supreme Cash Bonus Plan
(the “2017 Bonus Plan”), but not otherwise defined herein, shall have the
meanings ascribed to such terms in the Supreme Industries, Inc. 2016 Long-Term
Incentive Plan.

 

Award:  Shall mean after the Plan Year and all Performance Goal achievement is
determined, the payment of cash pursuant to the terms of this 2017 Bonus Plan.

 

Target Incentive: Shall mean a target dollar amount that a Participant will
earn, payable in the form of cash, if all applicable Performance Goals for the
Plan Year are achieved at the 100% level.  The target is set for each
Participant in accord with their function within the Company.

 

Leadership Team: Shall mean the persons serving in the following positions:

 

President and Chief Executive Officer

 

Chief Financial Officer

 

Vice President, Operations

 

Vice President and General Counsel

 

Vice President, Human Resources

 

Vice President, Marketing

 

Vice President, Sales

 

Vice President, Engineering

 

Participant:  Shall mean the Leadership Team and any other employee of the
Company designated as covered by this 2017 Bonus Plan by the CEO with the advice
and consent of Supreme Industries, Inc.’s Management Committee.

 

Plan Year: Shall mean the Company’s 2017 fiscal year (beginning January 1, 2017
and ending December 30, 2017).

 

Performance Goals: Shall mean goals based on specific and objectively measurable
financial metrics selected by the Compensation Committee and/or the Board of
Directors, as applicable.

 

Supreme or Company:  Shall mean Supreme Industries, Inc. or any subsidiary of
Supreme Industries, Inc.

 

SECTION 2.  SUMMARY:  The 2017 Bonus Plan is intended to provide financial
incentives to executive officers and key employees of Supreme Industries, Inc.
and its subsidiaries through the use of “at risk” variable pay tied to specific
performance incentives which will motivate their actions and behaviors in ways
beneficial to the Company and its stockholders.  This 2017 Bonus Plan will offer
Participants the opportunity to earn a cash bonus for the attainment of 2017
Bonus Plan incentives.

 

1

--------------------------------------------------------------------------------

 

SECTION 3.  PHILOSOPHY: The Board believes that compensation of executive
officers and key employees should be partially “at risk” and variable, based on
performance against certain pre-established financial objectives that are
important to the Company.  The 2017 Bonus Plan is intended to focus the efforts
of the Participants on achieving those objectives in order to help ensure the
sustained profitability, long-term growth, and continued wellbeing of the
Company.  The Board believes that doing so aligns the interests of management
with stockholders.

 

The 2017 Bonus Plan is structured to provide Participants with competitive cash
rewards for successful performance, which enables the Company to attract and
retain critical management resources.

 

SECTION 4.  ADMINISTRATION:  Administration of this 2017 Bonus Plan shall be
vested in the Compensation Committee.  The decisions of the Compensation
Committee shall be final as to the interpretation of the 2017 Bonus Plan or any
rule, procedure or action related thereto.  All Participants consent to the
transfer and use of personal data by the Company and its agents in connection
with the administration of this 2017 Bonus Plan.

 

SECTION 5.  ELIGIBILITY: Only Participants as defined above are eligible to
participate in the 2017 Bonus Plan.

 

To receive an Award under the 2017 Bonus Plan, a Participant must be an active,
full-time employee on the last business day of the Plan Year, except as provided
herein.  An employee who is hired or promoted after the date of adoption of this
2017 Bonus Plan may be selected as a Participant at such time, provided that any
Award earned by such Participant shall be prorated to reflect that Participant’s
actual time in service, except as otherwise provided by the Board pursuant to an
employment agreement or similar document.

 

If a Participant dies or incurs a Total and Permanent Disability, an Award,
prorated on the basis of Participant’s actual time in service with the Company
during the Plan Year prior to death or Total and Permanent Disability, will be
paid to the Participant or his or her beneficiary at the same time and in the
same manner as Awards for the Plan Year are paid to the other Participants.  The
Participant’s beneficiary under the 2017 Bonus Plan shall be the beneficiary
designated for the Participant’s group life insurance plan.  If no such
beneficiary has been designated, the Award will be paid to the Participant’s
estate.

 

If a Participant terminates service due to Retirement prior to the last day of
the Plan Year, an Award, prorated on the basis of Participant’s actual time in
service with the Company during the Plan Year prior to Retirement, shall be paid
to the Participant at the same time and in the same manner as Awards for the
Plan Year are paid to other Participants.

 

If a Change In Control occurs prior to the last day of the Plan Year, the full
value of the Award, payable based on the Target Incentive, shall be paid to the
Participant on or within 60 days of the Change In Control.

 

SECTION 6.  SETTING OF TARGET INCENTIVES, PERFORMANCE GOALS, AND CALCULATION OF
AWARDS FOR THE LEADERSHIP TEAM:  Management has submitted recommendations for
the 2017 Bonus Plan. The Compensation Committee has reviewed the proposal to
determine whether management’s recommendations generally align with the
Company’s most recent compensation study, the Company’s 2017 budget, and any
other relevant factors.  The Compensation Committee determined that the
procedures and goals outlined in this section were proper and suitable to meet
the Company’s goals.

 

The determination of the Target Incentive will be made by the Compensation
Committee of the Board for each member of the Leadership Team, with the
exception of the CEO, whose Target Incentive will be set by the independent
members of the Board of Directors.  Each member of the Leadership Team will have
their Target Incentive provided to them in writing separate from this 2017 Bonus
Plan.

 

2

--------------------------------------------------------------------------------

 

Performance Goals for the Leadership Team in 2017 are as follows:

 

·                  Year over year net sales growth to budget;

 

·                  EBITDA to budget; and

 

·                  Average controllable working capital as a percentage of sales
to budget.(1)

 

The first two goals each shall be weighted as 40% of the total.  The remaining
goal (working capital) shall be weighted 20% of the total.  Performance Goal
achievement will be determined by comparing the relevant Performance Goal with
the Company’s actual performance for that financial metric during the Plan
Year.  The threshold for each Performance Goal is at least 80% of the goal set
for 2017.  For each one percent increment (rounded to the nearest whole
percentage) below the goal, achievement for a Performance Goal will decline by
two percent (2%) until reaching the threshold, below which there will be no
Award achievement attributable to that particular Performance Goal. 
Participants may earn above target incentive Awards for above goal performance,
up to a maximum Award of 125% of the target incentive.  The maximum performance
cap is 125% for each Performance Goal.  For each one percent increment (rounded
to the nearest whole percentage) of above goal performance, achievement for that
Performance Goal will increase by two percent (2%), up to the 125% cap.

 

Except with respect to the CEO, whose Performance Goal achievement will be
determined by the independent members of the Board, Performance Goal achievement
for the Plan Year will be determined by the Compensation Committee, in its sole
discretion. Once the Compensation Committee determines the level of achievement
for each Performance Goal, the Compensation Committee will apply the weighting
and the resulting factor will be multiplied by each member of the Leadership
Team’s Target Incentive to arrive at the Participant’s Award.

 

The Compensation Committee may, in its discretion, adjust the payout of an Award
downward after consideration of other business factors, including overall
performance of the Company and the individual’s contribution to Company
performance. The Compensation Committee may reduce or entirely eliminate an
Award in the event a Participant is on a performance improvement plan or
otherwise demonstrates unsatisfactory performance or discipline during the Plan
Year.  The Compensation Committee may adjust a payout of an Award in its
discretion to prevent the enlargement or dilution of the Award because of
extraordinary events or circumstances as determined by the Compensation
Committee.

 

SECTION 7.  TARGET INCENTIVES, PERFORMANCE GOALS AND CALCULATION OF AWARDS FOR
OTHER PARTICIPANTS:

 

Once the Leadership Team target incentives and goals are set, the CEO will then
set target incentives and goals for all other Participants, utilizing the
Performance Goals specified above or other similar goals closely relating each
individual’s job functions, with weighting to be determined by the CEO.  Prior
to advising the Participants of their participation in this 2017 Bonus Plan, the
CEO will advise the Compensation Committee of his determinations.

 

SECTION 8.  APPROVAL AND PAYMENT OF AWARDS:

 

Upon completion of the Plan Year, the Compensation Committee shall certify to
what extent the Performance Goals were met and determine the Award payable to
each Participant based on information supplied and certified by management. 
Certification by the Compensation Committee shall be subject to completion of
the annual audit and certification of overall Company results by the Company’s
independent auditors and the CEO’s Award shall be subject to ratification by the
independent members of the Board of Directors. 

 

--------------------------------------------------------------------------------

(1)  Twelve month average of the sum of accounts receivable, plus inventory,
minus accounts payables (excludes prepaid expenses and accrued liabilities)
divided by net sales for the year.

 

3

--------------------------------------------------------------------------------

 

Payment of Awards shall be made in a lump sum payment in cash except to the
extent of Participant’s elective contribution to any qualified deferred
compensation plan. To the extent Awards are subject to Section 409A of the Code,
payments are intended to qualify as short-term deferrals under the regulations
adopted under Section 409A of the Code.  Payment of Awards shall be made as soon
as reasonably practicable in 2018, but no later than March 15, 2018.   The
Company may deduct from any Award such amounts as may be required to be withheld
under any federal, state or local tax laws.

 

SECTION 9.   RECOUPMENT OF AWARDS:

 

If the Board learns of any intentional misconduct by a Participant which
directly contributes to the Company having to restate all or a portion of its
financial statements, the Board may, in its sole discretion, require the
Participant to reimburse the Company for the difference between any Awards paid
to the Participant based on achievement of financial results that were
subsequently the subject of a restatement and the amount the Participant would
have earned as awards under the 2017 Bonus Plan based on the financial results
as restated.

 

SECTION 10.  NO CONTRACT:

 

The 2017 Bonus Plan is not and shall not be construed as an employment contract
or as a promise or contract to pay Awards to Participants or their
beneficiaries.  The 2017 Bonus Plan shall be approved by the Compensation
Committee and may be amended from time to time by the Compensation Committee or
terminated without notice.  No Participant or beneficiary may sell, assign,
transfer, discount or pledge as collateral for a loan, or otherwise anticipate
any right to payment of an Award under this 2017 Bonus Plan.

 

SECTION 11.  GOVERNING LAW

 

This 2017 Bonus Plan shall be governed by the laws of the State of Delaware.

 

4

--------------------------------------------------------------------------------