1998 Key Employee Non-qualified Stock Plan

Exhibit 10


HUFFY CORPORATION
1998 KEY EMPLOYEE NON-QUALIFIED STOCK PLAN


PART I GENERAL


1. PURPOSE


The Huffy Corporation 1998 Key Employee Non-Qualified Stock Plan (the
"Plan") is intended for the purpose of providing an additional
incentive to certain employees of Huffy Corporation (the "Company") and
its subsidiaries, in order to increase shareholder value and to remain
in the employ of the Company or its subsidiaries. The Plan provides a
means for these employees to receive options to acquire shares of the
Company's Common Stock, $1.00 par value ("Common Stock"), and stock
appreciation rights, and an opportunity to subscribe for shares of
Common Stock subject to the restrictions set forth in Section 25 of
this Plan ("Restricted Shares"). The Plan will benefit the Company by
giving employees an increasing personal interest in its continued
success and progress.


2. DEFINITIONS


(a) A "Change in Control" shall mean the date of occurrence of any
of the following events:


(i) Shares of Common Stock of the Company have been
acquired other than directly from the Company in
exchange for cash or property by any person who
thereby becomes the owner of more than twenty percent
(20%) of the Company's outstanding shares of Common
Stock;


(ii) Any person has made a tender offer for, or a request
for invitations for the tender of, shares of Common
Stock of the Company; or


(iii) Any person forwards or causes to be forwarded to
shareholders of the Company a proxy statement or
statements in any period of twenty-four (24)
consecutive months soliciting proxies to elect to the
Board of Directors of the Company two (2) or more
persons who were not nominated as candidates for the
Board of Directors of the Company in proxy statements
forwarded to shareholders during such period on
behalf of the Board of Directors of the Company.


(b) The term "subsidiary" where used in this Plan means any
corporation more than 50% of whose voting stock is owned
directly or indirectly by the Company.


3. ADMINISTRATION


(a) The Plan shall be administered by the Compensation Committee
of the Board of Directors (hereinafter called the "Committee")
which shall at all times consist of not less than three (3)
members of the Board of Directors of the Company who


are not entitled to participate in the Plan to be appointed
by, and to serve during the pleasure of, the Board of
Directors of the Company.


(b) The Committee shall have full power and authority to construe
the provisions and to supervise the administration of the
Plan, including the establishment of such rules and
regulations as it may deem appropriate, and all decisions and
designations made by the Committee pursuant to the provisions
of the Plan shall be final. Any action taken by a majority of
the Committee shall be the action of the Committee.


4. EMPLOYEES WHO MAY PARTICIPATE IN THE PLAN


Any full-time salaried employee of the Company or of a subsidiary, who
is neither an officer of the Company nor member of the Board of
Directors but who is in a position to make a contribution to the
profits of the Company or a subsidiary, shall be eligible to
participate in the Plan. The employees to whom options and/or stock
appreciation rights are granted or to whom Restricted Shares are
offered shall be designated from time to time by the Committee.


5. SHARES SUBJECT TO THE PLAN


(a) The total number of shares of Common Stock which may be issued
under the Plan shall not exceed 100,000 shares, subject,
however, to adjustments required under the provisions of
Section 5(d) hereof. The number of shares of Common Stock that
may be subject to options granted to an employee under the
Plan during any calendar year shall not exceed Fifteen Percent
(15%) of the total number of shares of Common Stock which may
be issued under the Plan.


(b) Common Stock subject to the Plan may be, at the discretion of
the Board of Directors, either authorized and unissued shares
or treasury shares.


(c) If an option is surrendered for any reason (other than the
election to receive stock appreciation right benefits) or for
any other reason ceases to be exercisable in whole or in part,
or if Restricted Shares subscribed for under the Plan are
later forfeited pursuant to the Plan, the Common Stock which
is subject to such option but as to which the option has not
been exercised, or such Restricted Shares, shall again become
available for offering under the Plan. If an option is
surrendered in connection with the exercise of a stock
appreciation right, the number of shares of Common Stock
covered by such option or portion thereof which is so
surrendered less the number of shares of Common Stock issued
in connection with the exercise of the stock appreciation
right shall again become available for offering under the
Plan.


(d) In the event of any change in the Common Stock subject to the
Plan or to any option or stock appreciation right granted
hereunder by reason of a merger, consolidation,
reorganization, recapitalization, stock dividend, stock split
up, combination or exchange of shares, or other change in the
corporate structure, the aggregate number of shares which may
be issued under this Plan and the number


and class of shares subject to each outstanding option or
stock appreciation right and Restricted Shares still subject
to restrictions, and the price per share, shall be
appropriately adjusted by the Committee.


6. DURATION AND TERMINATION OF THE PLAN


The Plan shall become effective April 17, 1998 and shall terminate on
the tenth anniversary of the effective date unless terminated at an
earlier date by action of the Board of Directors; provided, however,
that any termination of this Plan after the effective date shall not
affect options or stock appreciation rights granted, or Restricted
Shares subscribed for, prior thereto.


7. AMENDMENT OF THE PLAN


The Board of Directors reserves the right at any time, and from time to
time, to modify or amend the Plan in any way, or to suspend or
terminate it, effective as of such date, which date may be either
before or after the taking of such action, as may be specified by the
Board of Directors; provided, however, that such action shall not
affect options granted under the Plan prior to the actual date on which
such action occurred.


8. INDEMNIFICATION


Each person who is or shall have been a member of the Committee or of
the Board of Directors shall be indemnified and held harmless by the
Company against and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection with or
resulting from any claim, action, suit, or proceeding to which he may
be a party or in which he may be involved by reason of any action taken
or failure to act upon the Plan and against and from any and all
amounts paid by him in settlement thereof, with the Company's approval,
or paid by him in satisfaction of judgment in any such action, suit, or
proceeding against him; provided he shall give the Company an
opportunity, at its own expense, to handle and defend the same before
he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such person may be entitled under the
Company's Articles of Incorporation or Code of Regulations, as a matter
of law, or otherwise, or any power that the Company may have to
indemnify him or hold him harmless.


9. NOTICES


Each notice relating to this Plan shall be in writing and delivered in
person or by first class or certified mail to the proper address. Each
notice shall be deemed to have been given on the date it is received.
Each notice to the Committee shall be addressed as follows:


Huffy Corporation
225 Byers Road
Miamisburg, OH 45342
Attention: Secretary of Compensation Committee


Each notice to the holder of options, stock appreciation rights or
Restricted Shares (or other person then entitled to exercise an option
and/or stock appreciation right) shall be addressed to the holder, (or
such other person or persons), at the holder's address set forth in the
Company's current personnel records. Anyone to whom a notice may be
given under this Plan may designate, in writing, a new address by
notice to that effect.


PART II OPTIONS AND STOCK APPRECIATION RIGHTS


10. GRANT OF OPTIONS OR STOCK APPRECIATION RIGHTS


(a) To the extent not inconsistent with the provisions of this
Plan, the Committee shall fix the terms and provisions and
restrictions of options and stock appreciation rights,
including the number of shares of Common Stock to be subject
to each option, the dates on which options may be fully or
partially exercised, the minimum period (if any) during which
the same must be held until exercisable and the expiration
dates thereof. The Committee may require an agreement,
commitment, or statement on the part of any grantee of options
and/or stock appreciation rights prior to the effectiveness of
any such grant as it shall determine is in the best interest
of the Company.


(b) In addition to grants by the Committee, the Chief Executive
Officer of the Company may also grant nonqualified stock
options in his sole discretion to employees but not officers
of the Company. The total number of nonqualified stock options
that the Chief Executive Officer may grant under this Plan in
any one calendar year shall not exceed options to purchase
5,000 shares for any one employee or options to purchase
26,000 shares for all employees in the aggregate. All grants
made in accordance with this Section 10(b) shall be subject to
the same terms and conditions of this Plan as grants made by
the Committee, provided that upon the granting of any option
to an employee, the Chief Executive Officer shall promptly
cause such employee to be notified of the fact of such grant
and shall advise the Committee not less than annually of
grants made under this provision.


(c) Only nonqualified stock options may be issued under this Plan
in accordance with the Plan's terms and conditions. An
eligible employee may hold more than the one option, but only
on the terms and subject to the restrictions set forth in this
Plan.


(d) The purchase price of the Common Stock covered by any option
issued under this Plan shall be as determined by the
Committee; provided, however, that in no event shall the
purchase price be less than one dollar ($1.00) per share.


(e) The fair market value of shares of Common Stock on a
particular date shall be the closing sale price for the
Company's Common Stock as shown in the New York Stock Exchange
Composite Transactions for that date or, if no such sale
occurred on that date, then for the next preceding date on
which a sale was made. Subject to the foregoing, the
Committee, in fixing the purchase price, shall have full
authority and discretion and be fully protected in doing so.


11. NOTICE OF GRANT OF OPTION OR STOCK APPRECIATION RIGHT


Upon the granting of any option or stock appreciation right to an
employee, the Committee shall promptly cause such employee to be
notified of the fact of such grant. The date on which an option or
stock appreciation right shall be granted shall be the date of the
Committee's authorization of such grant or such later date as may be
determined by the Committee at the time such grant is authorized,
subject to satisfaction of any conditions the Committee may place on
the effectiveness of the grant.


12. STOCK APPRECIATION RIGHTS


Subject to any other provisions of this Plan, the Committee, in its
sole discretion, may grant with any option granted under the Plan, in
addition to the holder's option to acquire shares of Common Stock, a
stock appreciation right, whereby the option holder may receive from
the Company, upon his written request ("Request") which is consented to
by the Committee, in exchange for the surrender of any option or any
portion thereof which, under the terms and conditions of the Plan is
exercisable on the date of the Request, shares of Common Stock, cash or
any combination thereof as specified in the Request, having an
aggregate value equal to the excess of the fair market value on the


date of the Request of one share of Common Stock over the purchase
price specified in such option multiplied by the number of shares of
Common Stock covered by such option or portion thereof which is so
surrendered. A stock appreciation right granted in connection with an
option under the Plan may only be granted at the time of such option,
and is exercisable only when the fair market value of the Common Stock
on the date of the Request exceeds the purchase price specified in such
option.


For the purpose of this Section 12, the fair market value of a share of
Common Stock on any date shall mean the average of the closing price
thereof on each of the ten (10) ...