<PAGE>   1
                                                                   Exhibit 10.hh

                      THIRD AMENDMENT TO HUFFY CORPORATION
                1988 STOCK OPTION PLAN AND RESTRICTED SHARE PLAN

This Third Amendment is made and effective as of October 22, 1998 to the 1988
Stock Option Plan and Restricted Share Plan (the "Plan"), approved and adopted
on April 15, 1988 by the Shareholders of Huffy Corporation (the "Company") and
amended April 24, 1992 and April 26, 1996, under the following circumstances:

         A.   The Company desires to amend the Plan (and the Plan so permits
              such amendment without shareholder approval) to permit option
              transfers to certain family members; and

         B.   On October 22, 1998, the Board of Directors approved amending the
              Plan, in accordance with the terms set forth below.

NOW, THEEFORE, the Plan shall be amended as follows:

1.   DEFINITIONS. All capitalized terms herein, unless specifically defined in
     this Amendment, shall have the meanings given to them in the Plan.

2.   AMENDMENT. Section 19 of the Plan is hereby amended in its entirety to read
     as set forth below:

         "19.  ASSIGNABILITY

                  (a) An option or stock appreciation right granted under the
                      Plan may not be transferred by the employee to whom
                      granted except as follows:

                  (i)      An option or stock appreciation right may be
                           transferred by the employee to a spouse, parent,
                           child, or grandchild (collectively, "Family Members")
                           or to a trust for the benefit of the optionee or his
                           or her spouse or children, to a family limited
                           partnership, or to any other legitimate estate
                           planning mechanism, but only in accordance with state
                           and federal tax and securities laws.

                  (ii)     An option or stock appreciation right may be
                           transferred upon the death of the holder thereof by
                           will or as prescribed by the applicable laws of
                           descent and distribution.

                  (b) During the lifetime of the employee to whom an option or
                      stock appreciation right is granted, such option or stock
                      appreciation right may be exercised only by such employee
                      or a permitted transferee as provided above, or by the
                      guardian or legal representative thereof."
<PAGE>   2
3.   EFFECTIVE DATE AND AFFIRMATION. This Amendment shall be effective as of
     October 22, 1998. Except as amended hereby and the amendments contained in
     the First Amendment and Second Amendment to the Plan, dated April 24, 1992
     and April 26, 1996, respectively, the Plan remains unchanged and in full
     force and effect.

IN WITNESS WHEREOF, this Amendment has been executed as of October 22, 1998.

                                                  HUFFY CORPORATION

                                                  /s/ Nancy A. Michaud
                                                  -----------------------
                                                  Nancy A. Michaud