rltpp807.htm


    EXHIBIT
      10.6                             


    
 

    HNI
      CORPORATION 

    LONG-TERM
      PERFORMANCE PLAN

    


    HNI
      Corporation, an Iowa corporation (the "Corporation"), hereby amends and
      restates, effective January 1, 2005, the HNI Corporation Long-Term Performance
      Plan (the "Performance Plan") to comply with Section 409A of the Internal
      Revenue Code.  The Performance Plan first became effective on February
      16, 2000.

    


    1.           Purpose.  The
      purpose of this Performance Plan is to promote the attainment of the
      Corporation's performance goals by providing incentive compensation for certain
      designated key executives and employees of the Corporation and its
      Subsidiaries.

    


    2.           Definitions.  The
      following terms have the following meanings when used in this Performance Plan
      with initial capital letters:

    


         
      (a)           "Board"
      means the Board of Directors of the Corporation or, pursuant to any delegation
      by the Board to the Committee pursuant to Section 13, the
      Committee.

    


         
      (b)           "Code"
      means the Internal Revenue Code of 1986, as amended from time to
      time.

    


         
      (c)           "Committee"
      means the Human Resources and Compensation Committee of the Board as constituted
      at the relevant time, which shall consist of two or more "outside directors"
      within the meaning of Section 162(m) of the Code who are not eligible for
      participation in the Plan.

    


               
       (d)           "Disability
      or Disabled," with respect to a Participant, means that the Participant
      satisfies the requirements to receive long-term disability benefits under the
      Corporation-sponsored group long-term disability plan in which the Participant
      participates without regard to any waiting periods, or that the Participant
      has
      been determined by the Social Security Administration to be eligible to receive
      Social Security disability benefits.  A Participant shall not be
      considered to be Disabled unless the Participant furnishes proof of the
      Disability to the Corporation in such form and manner as the Corporation may
      require.

    


         
      (e)           "Earned
      Performance Award" means the award, if any, payable to a Participant at the
      end
      of the Performance Period.

    


         
      (f)           "162(m)
      Employee," for any calendar year, means an employee of the Corporation who,
      as
      of the close of the calendar year, is:  (a) the Chief Executive
      Officer or CEO (or an individual acting in such capacity); or (b) among the
      four
      highest compensated officers of the Corporation (other than the
      CEO).  Whether an employee is the CEO or one of the four highest
      compensated officers of the Corporation is determined pursuant to the executive
      compensation rules of the Securities Exchange Act of 1934.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

         
      (g)           "Operating
      Unit" means either: (i) the Corporation as a whole; (ii) an individual
      subsidiary, division, store, or other business unit of the Corporation; or
      (iii)
      a grouping of business
      units, that employs individuals that have been approved to participate in this
      Performance Plan by the Board.

     

         
      (h)           "Participant"
      means a person who is designated by the Board to receive benefits under this
      Performance Plan and who is at the time an officer, executive, or other employee
      of the Corporation or any one or more of its Subsidiaries, or who has agreed
      to
      commence serving in any such capacity.

    


          
      (i)           "Performance
      Measure" means the level of performance for the Operating Unit, a division
      or
      other business unit of an operating unit, or any of them, for each Performance
      Period, in each case as established pursuant to Section 6.  A
      Performance Measure may take into account such criteria as the Board determines
      to be appropriate.

    


          
      (j)           "Performance
      Period" means a period of three consecutive fiscal years of the

    Corporation
      commencing on the first day of a fiscal year of the Corporation or other period
      as selected by the Board.

    


          (k)           "Retirement,"
      of a Participant, means:  (i) for Performance Periods commencing on or
      after January 1, 2007, the Participant's termination of employment with the
      Corporation and its Subsidiaries after the attainment of age 65, or age
      55 with ten years of service with the Corporation or a Subsidiary,
      provided, however, that the Chief Executive Officer of the Corporation, in
      his
      or her discretion, may waive or reduce the ten-year service requirement with
      respect a Participant; and (ii) for Performance Periods commencing prior to
      January 1, 2007, the Participant's voluntary termination of employment with
      the
      Corporation on or after attainment of age 65, or when the Participant is at
      least 55 years old and the sum of the Participant's age and service equals
      at
      least 65.

    


          
      (l)           "Target
      Performance Award" means the dollar award established for a Participant if
      the
      Performance Measure applicable to the Participant is achieved.

    


         (m)           "Subsidiary"
      has the meaning specified in Rule 405 promulgated under the Securities Act
      of
      1933, as amended (or under any successor rule substantially to the same
      effect).

    


    3.           Eligibility.

    


         
      (a)           Except as
      otherwise provided in this Section 3, an employee of the Corporation or one
      of
      its Subsidiaries will become a Participant for a particular Performance Period
      to the extent designated by the Board, or by the Chief Executive Officer of
      the
      Corporation if the Board delegates such authority to Chief Executive
      Officer.

    


         
      (b)           An employee
      who first becomes eligible to participate after the beginning of a particular
      Performance Period will become a Participant for such Performance Period only
      in
      accordance with this Section 3(b).  The Board, or the Chief Executive
      Officer of the Corporation if the Board delegates such authority to the Chief
      Executive Officer, may allow participation for a
      portion
      of such Performance Period for such employee on such terms and conditions as
      the
      Board (or the Chief Executive Officer) may determine.


    
      
        
        

      

      
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    4.           Earned
      Performance Award.  Unless changed by the Board, each
      eligible Participant may earn an Earned Performance Award as hereinafter
      provided.  The performance of the Operating Unit during a particular
      Performance Period will be measured using the Performance Measure established
      for that Performance Period by the Board in accordance with Section
      6.  In the event such performance for such Performance Period is below
      the minimum Performance Measure established therefor, no Earned Performance
      Award will be paid to Participants in respect thereof.  In no event
      shall an Earned Performance Award exceed $3 million dollars.

    


    5.           Target
      Performance Award.  Each Participant shall be assigned a
      Target Performance Award at the beginning of the Performance Period, as
      determined by the Board.  The Target Performance Award will be
      expressed as a percentage of the Participant's base pay at the time the Target
      Performance Award is assigned.  The actual award payable to a
      Participant at the end of the Performance Period will be determined by applying
      the percentage achievement of the Performance Measure and multiplying that
      result against the Target Performance Award to determine the Earned Performance
      Award.

    


    6.           Performance
      Measure.

    


         
      (a)           The Board
      will approve for each Performance Period the applicable Performance
      Measure.  Such Performance Measure may be adjusted during a
      Performance Period to prevent dilution or enlargement of an award as a result
      of
      extraordinary events or circumstances as determined by the Board or to exclude
      the effects of extraordinary, unusual or nonrecurring events, changes in
      accounting principles, discontinued operations, acquisitions, divestitures
      and
      material restructuring charges.

    


         
      (b)           The
      Corporation will:  (i) notify each eligible employee who has been
      selected to participate in this Performance Plan that he or she is a Participant
      under this Performance Plan for such Performance Period; and (ii) communicate
      in
      writing to each Participant the Target Performance Award granted to such
      Participant pursuant to Section 5 and the Performance Measure applicable to
      such
      Participant for such Performance Period.

    


         
      (c)           In the case
      of a Participant who is a 162(m) Employee, a Performance Measure must be
      pre-established by the Committee, must be objective, and must state, in terms
      of
      an objective formula or standard, the method for computing the amount of
      compensation payable if the Performance Measure is attained.  A
      Performance Measure is considered "pre-established" for purposes of this
      paragraph if it is established in writing by the Committee no later than 90
      days
      after the commencement of a Performance Period, provided that the outcome is
      substantially uncertain at the time the Committee actually establishes the
      Performance Measure.  However, in no event will a Performance Measure
      be considered to be pre-established if it is established after 25% of a
      Performance Period has elapsed.  A Performance Measure is considered
      "objective" if a third party having knowledge of the relevant facts could
      determine whether
      the Performance Measure is met.  A formula or standard is considered
      "objective" if a third party having knowledge of the relevant performance
      results could calculate the amount to be paid to the
      Participant.


    
      
        
        

      

      
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      The Performance Measure may be based on one or more of the following criteria
      and may be based on attainment of a particular level of, or on a positive change
      in, a factor:  revenue, revenue per employee, earnings before income
      tax (profit before taxes), earnings before interest and income tax, net earnings
      (profit after taxes), earnings per employee, tangible, controllable or total
      asset turnover, earnings per share, operating income, total shareholder return,
      market share, return on equity, return on invested capital, growth in earnings,
      before-tax return on net assets, after-tax return on net assets, distribution
      expense, inventory turnover, economic value added (economic
      profit).

    


    7.           Payment
      of Awards.

    


         
      (a)           Subject to
      Sections 8 and 9, the value of the Earned Performance Award with respect to
      a
      Performance Period will be paid on the 15th day of the Corporation's February
      fiscal month following the end of the Performance Period, provided the
      Participant is employed by the Operating Unit as of the last day of such
      Performance Period, and such payment, if any is earned, shall be made in the
      following form:  (i) 50% of the value thereof in the form of cash; and
      (ii) 50% of the value thereof in the form of common stock of HNI Corporation
      as
      Bonus Stock or deferred shares, as elected by the Participant, and as granted
      by
      the Board under the 1995 Stock-Based Compensation Plan or the 2007 Stock-Based
      Compensation Plan, if approved by the shareholders of the
      Corporation.  For purposes hereof, an Earned Performance Award will be
      deemed to be paid after the date specified above if it is paid within six (6)
      months thereafter.  All Earned Performance Awards that are paid in
      cash will be paid in U.S. dollars.  The Corporation may deduct from
      any payment such amounts as may be required to be withheld under any federal,
      state or local tax laws.  In the case of a Participant who is a 162(m)
      Employee, the Committee shall certify the extent to which the Participant has
      satisfied each of his or her Performance Measure.

    


         
      (b)           All Earned
      Performance Awards paid to the Chief Executive Officer and Chief Financial
      Officer of the Corporation under this Plan are subject to forfeiture as provided
      in Section 304 of the Sarbanes-Oxley Act of 2002, and the implementing rules
      and
      regulations.  Notwithstanding anything in the Plan to the contrary,
      the Board may reduce the amount of, or completely eliminate, an Earned
      Performance Award otherwise payable to a Participant for a Performance Period
      if
      the Board determines that due to the Participant's performance or behavior
      during or immediately following such Performance Period the Participant should
      not be entitled to the Earned Performance Award.

    



    
      
        
        

      

      
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    8.           Termination
      of Employment.

    


          (a)           
      If a Participant terminates employment with the Corporation and its Subsidiaries
      due to death, Disability, or Retirement occurring before the last day of a
      Performance Period, the Participant's Earned Performance Award, if any, will
      be
      paid on the 15th day of the Corporation's February fiscal month following the
      end of the Performance Period, and the value of such Award shall be equal to
      a
      value, determined using the Performance Measure as of the end of the Performance
      Period, equal to the product of:  (i) the number of the Target
      Performance Award; multiplied by (ii) a fraction, the numerator of which is
      the
      number of months in the Performance Period that occurred prior to such
      termination of employment, and the denominator of which is the total number
      of months in such Performance Period.  For these purposes, a
      Participant will be credited with a month during a Performance Period only
      if he
      or she is employed for at least 15 days during the month.

    


         (b)           Except
      as provided in Section 9, if a Participant's employment with the Corporation
      and
      its Subsidiaries terminates for any reason other than death, Disability or
      Retirement before the last day of a Performance Period, the Participant will
      not
      be entitled to any payment or award under this Performance Plan unless otherwise
      determined by the Board.

    


    9.           Change
      in Control of the Corporation.

    


          (a)           In
      connection with a Change in Control of the Corporation, the value of each Target
      Performance Award shall be determined by the Board prior to the effective date
      of the Change in Control, and each Participant's Target Performance Award will
      become payable without proration within 30 days prior to such
      date.

    


        
      (b)           A "Change
      in Control of the Corporation" shall mean:

     

            (i)    the
      acquisition by
      any individual, entity or group (with the meaning of Section 13(d)(3) or
      14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
      Act")) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3
      promulgated under the Exchange Act) of 35% or more of either:  (A) the
      then outstanding shares of common stock of the Corporation (the "Outstanding
      Corporation Common Stock"); or (B) the combined voting power of the then
      outstanding voting securities of the Corporation entitled to vote generally
      in
      the election of Directors (the "Outstanding Corporation Voting Securities");
      provided, however, that for purposes of this subsection (i), the following
      acquisitions shall not constitute a Change in Control:  (I) any
      acquisition directly from the Corporation; (II) any acquisition by the
      Corporation; (III) any acquisition by any employee benefit plan (or related
      trust) sponsored or maintained by the Corporation or any corporation controlled
      by the Corporation; or (IV) any acquisition by any corporation pursuant to
      a
      transaction which complies with clauses (A), (B) and (C) of subsection (iii)
      of
      this paragraph; or


    
      
        
        

      

      
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                (ii)     individuals
      who, as of the date hereof, constitute the Board (the "Incumbent Board") cease
      for any reason to constitute a majority of the Board; provided, however, that
      any individual becoming a Director subsequent to the date hereof whose election,
      or nomination for election by the Corporation's shareholders, was approved
      by a
      vote of a majority of the Directors then comprising the Incumbent Board shall
      be
      considered as though such individual were a member of the Incumbent Board,
      but
      excluding, for this purpose, any such individual whose initial assumption of
      office occurs as a result of an actual or threatened election contest with
      respect to the election or removal of Directors or other actual or threatened
      solicitation of proxies or consents by or on behalf of a Person other than
      the
      Board; or

     

            (iii)     consummation
      of a reorganization, merger or consolidation or sale or other disposition of
      all
      or substantially all of the assets of the Corporation (a "Business
      Combination"), in each case, unless, following such Business Combination: (A)
      all or substantially all of the individuals and entities who were the beneficial
      owners, respectively, of the Outstanding Corporation Common Stock and
      Outstanding Corporation Voting Securities immediately prior to such Business
      Combination beneficially own, directly or indirectly, 50% or more of,
      respectively, the then outstanding shares of common stock and the combined
      voting power of the then outstanding voting securities entitled to vote
      generally in the election of Directors, as the case may be, of the corporation
      resulting from such Business Combination (including, without limitation, a
      corporation which as a result of such transaction owns the Corporation or all
      or
      substantially all of the Corporation's assets either directly or through one
      or
      more subsidiaries) in substantially the same proportions as their ownership,
      immediately prior to such Business Combination of the Outstanding Corporation
      Common Stock and Outstanding Corporation Voting Securities, as the case may
      be;
      (B) no Person (excluding any corporation resulting from such Business
      Combination or any employee benefit plan (or related trust) of the Corporation
      or such corporation resulting from such Business Combination) beneficially
      owns,
      directly or indirectly, 35% or more of, respectively, the then outstanding
      shares of common stock of the corporation resulting from such Business
      Combination or the combined voting power of the then outstanding voting
      securities of such corporation except to the extent that such ownership existed
      prior to the Business Combination; and (C) at least a majority of the members
      of
      the board of directors of the corporation resulting from such Business
      combination were members of the Incumbent Board at the time of the execution
      of
      the initial agreement, or of the action of the Board, providing for such
      Business Combination.

    


    10.           Sale
      of Operating Unit.   Except as provided in paragraph 9, in
      the event of the sale of substantially all of the stock or assets of an
      Operating Unit, with respect to each Participant employed by such Operating
      Unit
      on the date of such sale, the value of each Award shall be determined as of
      the
      date of such sale by the Board based on the percentage of the Performance
      Measure completed as of the date of sale, the number of months of the
      Performance Period completed at the time of sale, the actual purchase price
      of
      the Operating Unit and such other
      factors as the Board deems relevant in light of the circumstances of the
      sale.  Payments pursuant to this Section 10 shall be made 60 days
      after the date of the sale.  For these purposes, a month will be
      considered to have been completed at the time of the sale only if the sale
      occurs later than the 14th day of the month.


    
      
        
        

      

      
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    11.           Transfers
      and Changes in Responsibilities.

    


           
      (a)    If a
      Participant's responsibilities materially change or the Participant is
      transferred during a Performance Period to another Operating Unit or to a
      position that is not designated or eligible to participate in this Performance
      Plan, the Corporation may, as determined by the Board,
      either:  (i) continue the Participant's participation in this
      Performance Plan and establish a new Target Performance Award and Performance
      Measure for the Participant with respect to his or her new position; or
      (ii) terminate the Participant's participation in this Performance Plan
      and, as of the date of such change or transfer, prorate the Participant's Target
      Performance Award on the basis of the ratio of the number of months of the
      Participant's participation during the Performance Period to which such Target
      Performance Award relates to the aggregate number of months in such Performance
      Period.  For these purposes, a Participant will be considered to have
      participated for a month during a Performance Period only if he or she
      participated for at least 15 days during the month.

    


          
       (b)           If in
      the event of such a change or transfer and the Participant's participation
      in
      this Performance Plan is not terminated pursuant to Section 11(a)(ii), then
      the
      Participant's Earned Performance Award will be prorated on the basis of the
      number of months of service by the Participant at each Operating Unit during
      the
      Performance Period.  For these purposes, a Participant will be
      credited with a month of service at an Operating Unit only if he or she was
      employed by the Operating Unit for at least 15 days during the
      month.

    


           
      (c)           Notwithstanding
      any provision of the Performance Plan to the contrary, no such change or
      transfer pursuant to Section 11(a) shall change the time or form of payment
      of
      the Earned Performance Award payable under the Performance Plan pursuant to
      Section 11(b).

    


    12.           Security
      of Payment of Benefits.  Unless otherwise determined by the
      Board, all Earned Performance Awards will be paid from the Corporation's general
      assets, and nothing contained in this Performance Plan will require the
      Corporation to set aside or hold in trust any funds for the benefit of any
      Participant, who will have the status of a general unsecured creditor of the
      Corporation.

    


    13.           Administration
      of the Plan.

    


          
      (a)            This
      Performance Plan will be administered by the Board, which may from time to
      time
      delegate all or any part of its authority under this Performance Plan to the
      Committee. Notwithstanding the forgoing, in the case of any 162(m) Employee,
      the
      Committee shall have sole and exclusive authority to:  (i) establish
      the Performance Measures for such employee; (ii) determine and certify the
      achievement of the Performance Measures for such employee, and (iii) make any
      other discretionary decision affecting such employee under the
      Plan.


    
      
        
        

      

      
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      (b)           The Board
      will take such actions as are required to be taken by it hereunder, may take
      the
      actions permitted to be taken by it hereunder, and will have the authority
      from
      time to time to interpret this Performance Plan and to adopt, amend, and rescind
      rules and regulations for implementing and administering this Performance
      Plan.  All such actions will be in the sole discretion of the Board
      and, when taken, will be final, conclusive, and binding.  Without
      limiting the generality or effect of the foregoing, the interpretation and
      construction by the Board of any provision of this Performance Plan or of any
      agreement, notification, or document evidencing the grant of benefits payable
      to
      Participants and any determination by the Board in its sole discretion pursuant
      to any provision of this Performance Plan or any provision of such agreement,
      notification, or document will be final and conclusive.

    


           
      (c)           The
      existence of this Performance Plan or any right granted or other action taken
      pursuant hereto will not affect the authority of the Board or the Corporation
      to
      take any other action, including in respect of the grant or award of any annual
      or long-term incentive or other right or benefit, whether or not authorized
      by
      this Performance Plan, subject only to limitations imposed by other benefit
      plans of the Corporation and by applicable law.

    


    14.           Miscellaneous.

    


           
      (a)           This
      Performance Plan will not confer upon any Participant any right with respect
      to
      continuance of employment or other service with the Corporation or any
      Subsidiary, nor will it interfere in any way with any right the Corporation
      or
      any Subsidiary would otherwise have to terminate or modify the terms of such
      Participant's employment or other service at any time.

    


          
      (b)           Except as
      otherwise provided in this Performance Plan, no right or benefit under this
      Performance Plan will be subject to anticipation, alienation, sale, assignment,
      pledge, encumbrance, or charge, and any attempt to anticipate, alienate, sell,
      assign, pledge, encumber, or charge such right or benefit will be
      void.  No such right or benefit will in any manner be liable for or
      subject to the debts, liabilities, or torts of a Participant.

    


          
      (c)           This
      Performance Plan may be amended or terminated from time to time by the Board
      (but in no event later than the 15th day of March following the end of the
      Performance Period).  In the event this Performance Plan is terminated
      before the last day of a Performance Period, the Earned Performance Award
      otherwise payable for such Performance Period will be prorated on the basis
      of
      the ratio of the number of months in such Performance Period prior to such
      termination to the aggregate number of months in such Performance Period and
      will be paid only after the end of such Performance Period, which will be deemed
      to continue until the expiration thereof as if this Performance Plan had not
      been terminated.  For these purposes, a month will be considered to
      have been completed at the time of the amendment or termination only if the
      amendment or termination is effective later than the 14th day of the
      month.

    


    The
      Performance Plan will be terminated in the event the shareholders of the
      Corporation approve a complete liquidation or dissolution of the Corporation
      that will be taxed under Section 331
      of
      the Code.  In such case, the value of each Target Performance Award
      shall be determined by the Board prior to the effective date of the dissolution,
      and each Participant's Target Performance Award will become payable upon such
      dissolution.


    
      
        
        

      

      
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      (d)           If any
      provision in this Performance Plan is held to be invalid or unenforceable,
      no
      other provision of this Performance Plan will be affected thereby.

    


           
      (e)           This
      Performance Plan will be governed by and construed in accordance with applicable
      United States federal law and, to the extent not preempted by such federal
      law,
      in accordance with the laws of the State of Iowa, without giving effect to
      the
      principles of conflict of laws thereof.

    


    15.           Effective
      Date.  The amendment and restatement of this Performance Plan
      set forth herein will become effective as of January 1, 2005.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
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