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Mercury asks court to throw out bonus claims

Mercury Marine, in court documents, denies all allegations that it failed to pay bonuses that were promised to about 100 managers if they achieved significant cost savings across the company.

It is asking the court to dismiss all claims against it "with prejudice" and award Mercury Marine costs and fees allowed by law and any other relief the court deems proper.

A lawsuit against Mercury was filed last month in Wisconsin's Fond du Lac County Circuit Court by Henry Hegel, a Mercury manager who lives in North Carolina. The company filed papers this week to have the case transferred to Federal District Court in Green Bay, Wis.

In court documents filed Sept. 18 by Mercury, the company says, "Mercury Marine denies the existence of any purported class, both as a matter of law and of fact, and denies that any member of the putative class was denied incentive compensation. ... Therefore, Mercury Marine denies all allegations as asserted with respect to any class," the documents state.

Mercury says a meeting with management personnel took place on or around April 14-15, 2008, during which a pilot incentive compensation program was discussed. However, it denies that the pilot was explained or described by Mark Schwabero or Kevin Grodzki but "admits that Steve Cramer did explain and describe the general concepts associated with the pilot program." (At the time of the meeting, Schwabero, Grodzki and Cramer had been jointly leading Mercury since Patrick Mackey's retirement.)

However, court documents state, "Mercury Marine denies that the program was consistent with the allegations."

Mercury acknowledges that various cost-saving actions took place in 2008 and some were related to a reduction in employees. It also claims it said at the time, "It would be inappropriate to provide incentive compensation bonuses to upper management employees."

Hegel, in his suit, says Mercury executives met with about 100 management employees in April 2008 to discuss a bonus incentive plan aimed at reducing costs. The managers were asked "to take difficult and aggressive steps, which required above and beyond their normal duties to achieve company-wide cost savings."

In exchange, the managers were promised a bonus at the end of calendar year 2008 amounting to 10 percent of the cost savings achieved. Those cost savings totaled about $78 million. However, in early 2009, Mercury notified plan participants that it had decided not to pay out any bonuses, according to the suit.

The complaint seeks recovery of allegedly owed wages on behalf of Hegel and the purported class. This includes $7 million for the bonuses, plus a civil penalty of 50 percent, bringing the total award request to more than $10 million.

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