COMMONWEALTH INDUSTRIES, INC.
1999 EXECUTIVE INCENTIVE PLAN
1. Purpose. The purpose of the 1999 Executive Incentive Plan (the
"Plan") is to advance the interests of Commonwealth Industries, Inc. (the
"Company") and it stockholders by providing incentives in the form of special
bonus awards to certain executives of the Company and any of its subsidiaries or
other related business units or entities ("Affiliates") who contribute
significantly to the strategic and long-term performance objectives and growth
of the Company and its Affiliates.
2. Administration. The Plan shall be administered by the Management
Development and Compensation Committee of the Board of Directors (the
"Committee"), as such committee is from time to time constituted. The Committee
may delegate its duties and powers in whole or in part (i) to any subcommittee
thereof consisting solely of at least two "outside directors," as defined under
Section 162(m) of the Internal Revenue Code of 1986, as amended (the "Code"), or
(ii) to the extent consistent with Section 162(m) of the Code, to any other
individual or individuals.
The Committee has all the powers vested in it by the terms of
the Plan set forth herein, such powers to include the exclusive authority to
select the executives to be granted bonus awards (the "Special Bonuses") under
the Plan, to determine the size and terms of the Special Bonus made to each
individual selected (subject to the limitation imposed below), to modify the
terms of any Special Bonus that has been granted (except with respect to any
modification which would increase the amount of compensation payable to a
"Covered Employee," as such term is defined in Section 162(m) of the Code), to
determine the time when Special Bonuses will be awarded, to establish
performance objectives in respect of Special Bonuses and to certify that such
performance objectives were attained. The Committee is authorized to interpret
the Plan, to establish amend and rescind any rules and regulations relating to
the Plan, and to make any other determinations which it deems necessary or
desirable for the administration of the Plan. The Committee may correct any
defect or supply any administration of the Plan. The Committee may correct any
defect or supply any omission or reconcile any inconsistency in the Plan in the
manner and to the extent the Committee deems necessary or desirable to carry it
into effect. Any decision of the Committee in the interpretation and
administration of the Plan, as described herein, shall lie within its sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him or her, by any other
member of the Committee or by any officer of the Company in connection with the
performance of duties under the Plan, except for his or her own willful
misconduct or as expressly provided by statute.
3. Participation. The Committee shall have exclusive power (except as
may be delegated as permitted herein) to select the executives of the Company
and its Affiliates who may participate in the Plan and be granted Special
Bonuses under the Plan ("Participants").
4. Special Bonuses under the Plan.
(a) In General. The Committee shall determine the amount of a
Special Bonus to be granted to each Participant in accordance with subsection
(b) below.
(b) Special Bonuses. (i) The Committee may in its discretion
award a Special Bonus to a Participant who it reasonably believes may be a
Covered Employee for the taxable year of the Company in which such Special Bonus
would be deductible, under the terms and conditions of this subsection (b).
Subject to clause (iii) of this Section 4(b), the amount of a Participant's
Special Bonus shall be an amount determinable from written performance goals
approved by the Committee while the outcome is substantially uncertain and no
more than 90 days after the commencement of the period to which the performance
goal relates or, if less, the number of days which is equal to 25 percent of the
relevant performance period. The maximum aggregate limit on Special Bonuses that
may be awarded this Plan to any Participant during the period commencing on the
Effective Date and ending on the fourth anniversary of the Effective Date is $5
million.
(ii) The amount of any Special Bonus will be based on
objective performance goals established by the Committee. The performance
criteria for Special Bonuses made under the Plan will be based upon one or more
of the following criteria as determined by the Board: (A) before or after tax
net income; (B) earnings per share; (C) book value per share; (D) stock price;
(E) return on stockholders' equity; (F) the relative performance of peer group
companies; (G) expense management; (H) return on investment; (I) improvements in
capital structure; (J) profitability of an identifiable business unit or
product; (K) profit margins; (L) budget comparisons; and (M) total return to
stockholders.
(iii) The Committee shall determine whether the performance
goals have been met with respect to any affected Participant and, if they have,
so certify and ascertain the amount of the applicable Special Bonus. No Special
Bonuses will be paid until such certification is made by the Committee.
(iv) The provisions of this Section 4(b) shall be administered
and interpreted in accordance with Section 162(m) of the Code to ensure the
deductibility by the Company or its affiliates of the payment of Special
Bonuses.
5. Designation of Beneficiary by Participant. The Committee or its
delegate shall create a procedure whereby a Participant may file, on a form to
be provided by the Committee, a written election designation of one or more
beneficiaries with respect to the amount, if any, payable in the event of the
Participant's death. The Participant may amend such beneficiary designation in
writing at any time prior to the Participant's death, without the consent of any
previously designated beneficiary. Such designation or amended designation, as
the case may be, shall not be effective unless and until received by the duly
authorized representatives of the Committee or its delegate prior to the
Participant's death. In the absence of any such designation, the amount payable,
if any, shall be delivered to the legal representative of such Participant's
estate.
6. Miscellaneous Provisions.
(a) No employee or other person shall have any claim or right
to be paid a Special Bonus under the Plan. Determinations made by the Committee
under the Plan need not be uniform and may be made selectively among eligible
individuals under the Plan, whether or not such eligible individuals are
similarly situated. Neither the Plan nor any action taken hereunder shall be
construed as giving any employee or other person any right to continue to be
employed by or perform services for the Company of any Affiliate, and the right
to terminate the employment of or performance of services by any Participant at
any time and for any reason is specifically reserved to the Company and its
Affiliates.
(b) Except as may be approved by the Committee, a
Participant's rights and interest under the Plan may not be assigned or
transferred, hypothecated or encumbered in whole or in part either directly or
by operation of law or otherwise (except in the event of a Participant's death)
including, but not by way of limitation, execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner; provided, however, that,
subject to applicable law, any amounts payable to any Participant hereunder are
subject to reduction to satisfy any liabilities owed to the Company or any of
its Affiliates by the Participant.
(c) The Committee shall have the authority to determine in its
sole discretion the applicable performance period relating to any Special Bonus
and to include with respect to any award any change in control provision.
(d) The Company and its Affiliates shall have the right to
deduct from any payment made under the Plan any federal, state, local or foreign
income or other taxes required by law to be withheld with respect to such
payment.
(e) The Company is the sponsor and legal obligor under the
Plan, and shall make all payments hereunder, other than any payments to be made
by any of the Affiliates, which shall be made by such Affiliate, as appropriate.
Nothing herein is intended to restrict the Company from charging an Affiliate
that employs a Participant for all or a portion of the payments made by the
Company hereunder. The Company shall not be required to establish any special or
separate fund or to make any other segregation of assets to assure the payment
of any amounts under the Plan, and rights to payment hereunder shall be no
greater than the rights of the Company's unsecured, subordinated creditors, and
shall be subordinated to the claims of the customers and clients of the Company.
All expenses involved in administering the Plan shall be borne by the Company.
(f) The validity, construction, interpretation, administration
and effect of the Plan and rights relating to the Plan and to Special Bonuses
granted under the Plan, shall be governed by the substantive laws, but not the
choice of law rules, of the State of Delaware.
(g) The Plan shall be effective as of April 23, 1999 (the
"Effective Date"), subject to the affirmative vote of the holders of a majority
of all shares of Common Stock of the Company present in person or by proxy at
the Annual Meeting of the Company to be held on April 23, 1999.
7. Plan Amendment or Suspension. The Plan may be amended or suspended in
whole or in part at any time and from time to time by the Committee.
8. Plan Termination. This Plan shall terminate upon the adoption of a
resolution of the Committee terminating the Plan.
9. Actions and Decisions Regarding the Business or Operations
of the Company and/or its Affiliates. Notwithstanding anything in the Plan to
the contrary, neither the Company nor any of its Affiliates nor their respective
officers, directors, employees or agents shall have any liability to any
Participant (or his or her beneficiaries or heirs) under the Plan or otherwise
on account of any action taken, or not taken, in good faith by any of the
foregoing persons with respect to the business or operations of the Company or
any Affiliates.