EXHIBIT 10.15
AK STEEL CORPORATION
--------------------
LONG-TERM PERFORMANCE PLAN
--------------------------
(As Amended And Restated
Effective As Of November 21, 1996)
Table Of Contents
1. Administration Of The Plan............................................ 1
2. Participation......................................................... 1
3. Bonus Opportunity Target.............................................. 1
4. Performance Periods................................................... 1
5. Payment Date.......................................................... 2
6. Peer Group............................................................ 2
7. Award Calculation..................................................... 2
a. Performance Periods Ending Before Calendar Year 2000............. 2
b. Performance Periods Ending After Calendar Year 1999.............. 2
8. Special Award Calculation............................................. 3
9. Form Of Payment....................................................... 3
a. Performance Periods Ending Before Calendar Year 2000............. 3
b. Performance Periods Ending After Calendar Year 1999.............. 3
c. Restricted Stock................................................. 4
10. Events Of Forfeiture.................................................. 4
a. No Net Income.................................................... 4
b. Death, Disability, Retirement Or Involuntary Termination
Other Than For Cause............................................. 4
c. Termination For Cause............................................ 4
d. Voluntary Termination............................................ 5
e. Removal From The Plan............................................ 5
11. Source Of Benefits.................................................... 5
12. Liability Of Officers And Members..................................... 5
13. Unsecured General Creditor............................................ 5
14. Claims Procedure...................................................... 6
15. Legal Fees And Expenses............................................... 6
16. Amendment Or Termination Of Plan...................................... 6
17. Miscellaneous......................................................... 6
a. Assignability.................................................... 6
b. Obligations To The Company....................................... 7
c. No Promise Of Continued Employment............................... 7
d. Captions......................................................... 7
e. Validity......................................................... 7
f. Applicable Law................................................... 8
i
AK STEEL CORPORATION
LONG-TERM PERFORMANCE PLAN
AK Steel Corporation (the "Company") has established this AK Steel Corporation
Long-Term Performance Plan (the "Plan") to reward elected officers and selected
management employees for enhanced profitability versus a peer group of
competitors.
The Plan is a payroll practice. The Plan is not intended to be an employee
benefit plan within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974 ("ERISA"), and the Plan shall be interpreted,
administered and enforced to the extent possible in a manner consistent with
that intent. Any obligations of the Plan shall be the joint and several
obligation of AK Steel Holding Corporation, the Company and each of their
respective subsidiaries and affiliates.
1. ADMINISTRATION OF THE PLAN
This Plan shall be administered by the Compensation Committee of the Board (the
"Administrator") and, with respect to Plan Members who are not elected officers,
by the Chairman of the Board and/or his designees (the "Executive Management
Committee" or the "EMC"). Human Resources shall maintain records of authorized
participants for each of the Performance Periods established under this Plan.
2. PARTICIPATION
Elected officers and management employees selected by the Administrator or the
EMC shall be eligible for participation in this Plan, subject to the approval
from time to time of the Administrator. Upon selection, a Plan Member shall be
eligible to participate in such Performance Periods as the Administrator or the
EMC shall determine.
3. BONUS OPPORTUNITY TARGET
A Plan Member's Bonus Opportunity Target defines the maximum percentage of a
Plan Member's annual salary that can be achieved with respect to any Performance
Period for which the Plan Member is selected for participation. The Bonus
Opportunity Target shall be applied to the Plan Member's annualized rate of
salary on the last day of the final year of the Performance Period for which the
calculation of a Performance Award is made. Awards will be prorated based on
Plan participation date.
Each Plan Member will be assigned a Bonus Opportunity Target at the time the
Plan Member is selected for participation in this Plan. A Plan Member's Bonus
Opportunity Target may be changed from time to time at the discretion of the
Administrator or, in the case of Plan Members who are not elected officers, by
the EMC.
1
4. PERFORMANCE PERIODS
With the exception of a special two-year Performance Period beginning January 1,
1995, and ending December 31, 1996, each of the Plan's Performance Periods shall
generally be a period of three calendar years, with the first such three-year
period commencing on January 1, 1995, and ending on December 31, 1997.
5. PAYMENT DATE
The Performance Award Payment Date will be not more than 120 days following the
last day of the final year of the Performance Period.
6. PEER GROUP
The initial Peer Group will consist of Bethlehem, Inland, LTV, National Steel,
Nucor and U.S. Steel. The Peer Group may be modified from time to time at the
discretion of the Administrator.
7. AWARD CALCULATION
The Performance Award to be paid for each Performance Period will be a
percentage of a Plan Member's Bonus Opportunity Target based upon the Company's
operating profit per ton shipped (excluding special and unusual items) as
compared to operating profit per ton shipped (excluding special and unusual
items) of the Peer Group of competitors. The calculation of an Award shall be
prepared under the direction of and shall be approved by the Company's Chief
Financial Officer.
a. PERFORMANCE PERIODS ENDING BEFORE CALENDAR YEAR 2000
The percentage of a Plan Member's Bonus Opportunity Target to be awarded
for the Performance Periods ending in calendar years 1996, 1997, 1998 and
1999, if any, will be based upon the following chart:
2
Operating Profit Per Percentage Of Bonus Opportunity Target
-------------------- --------------------------------------
Ton Shipped Based Upon Relative Performance Ranking
----------- ---------------------------------------
Ranking Versus Full Three Year Period Final Year
Peer Group Performance Award Performance Award
1 75% 75%
2 50% 50%
3 25% 25%
4 15% 15%
5 - 7 0% 0%
b. PERFORMANCE PERIODS ENDING AFTER CALENDAR YEAR 1999
The percentage of a Plan Member's Bonus Opportunity Target to be awarded
for the Performance Periods ending after calendar year 1999, if any, will
be based upon the following chart:
Operating Profit Per Percentage Of Bonus Opportunity Target
-------------------- --------------------------------------
Ton Shipped Based Upon Relative Performance Ranking
----------- ---------------------------------------
Ranking Versus Full Three Year Period Final Year
Peer Group Performance Award Performance Award
1 100% 100%
2 50% 50%
3 25% 25%
4 15% 15%
5 - 7 0% 0%
8. SPECIAL AWARD CALCULATION
For each of the Performance Periods ending before calendar year 2000, a special
award will be paid that will be equal in amount to the difference between the
Award calculated in accordance with paragraph 7a above and the amount calculated
in accordance with paragraph 7b above determined as if the paragraph 7b formula
applied for Performance Periods ending before calendar year 2000.
9. FORM OF PAYMENT
All benefits will be paid in a single lump-sum payment. The Company will
withhold such payroll or other taxes as it may determine to be necessary or
appropriate.
a. PERFORMANCE PERIODS ENDING BEFORE CALENDAR YEAR 2000
For Performance Periods ending before calendar year 2000, all benefits
determined in accordance with paragraph 7a will be paid on the Performance
Award Payment Date one hundred (100%) percent in cash. Any Special Award
payable for Performance Periods ending before calendar year 2000 and
calculated
3
in accordance with paragraph 8 above may be paid on the Performance Award
Payment Date in whole shares of Restricted Stock up to a value equal to 50%
of the total Performance Award determined in accordance with paragraph 7b,
with any balance to be paid in cash.
b. PERFORMANCE PERIODS ENDING AFTER CALENDAR YEAR 1999
For Performance Periods ending after calendar year 1999, all benefits
determined in accordance with paragraph 7b will be paid on the Performance
Award Payment Date with up to fifty (50%) percent of the Performance Award
to be paid in whole shares of Restricted Stock with any balance to be paid
in cash.
c. RESTRICTED STOCK
Restricted stock shall be valued at the average of the high and the low
price of shares traded on the date the Board approves issuance of
Restricted Stock. Only whole shares shall be issued. Any fractional
shares that may be required to be paid shall be paid in cash.
Unless otherwise provided by the Board, the restrictions on shares granted
under this Plan will lapse as to 20% of those shares on each of the first,
second, third, fourth, and fifth anniversary of the date on which the
Restricted Stock award was granted. Except as modified herein, grants of
Restricted Stock shall be issued from the 1994 Stock Incentive Plan (as
amended and restated effective May 15, 1996, and November 21, 1996).
10. EVENTS OF FORFEITURE
a. NO NET INCOME
If the Company has no net income for book purposes for the last calendar
year of any Performance Period, no Award will be paid with respect to the
Performance Period ending in that calendar year. The Award for that
period, if any is due, will either be forfeited or the payment of the Award
will be deferred in the sole discretion of the Administrator.
b. DEATH, DISABILITY, RETIREMENT OR INVOLUNTARY TERMINATION FOR OTHER
THAN CAUSE
In the calendar year in which a Plan Member dies, retires, becomes totally
and permanently disabled or is involuntarily terminated for reasons other
than cause (an "Involuntary Termination"), the Plan Member shall only be
entitled to an amount equal to twice the amount of any payment due on the
Performance Award Payment Date that falls within that calendar year. The
second payment shall be
4
paid on the next to occur of the payment date falling within that calendar
year or within 60 days following such Plan Member's death or other
termination of employment. Any payment made under this paragraph 10b shall
be paid in cash and in full satisfaction of all claims the Plan Member has
under this Plan.
c. TERMINATION FOR CAUSE
If a Plan Member is terminated for cause, as cause may be defined by the
Administrator, or its designee, no Award will be paid.
d. VOLUNTARY TERMINATION
Except in the case of a Plan Member's Involuntary Termination as defined in
paragraph 10b above or termination for Cause as defined in paragraph 10c
above, a Plan Member who leaves the Company's employ prior to any
Performance Award Payment Date forfeits all rights hereunder to any payment
that is or may be due on or after any such Performance Award Payment Date.
e. REMOVAL FROM THE PLAN
If a Plan Member is removed from further participation in this Plan, such
removal shall be by written notice to the Plan Member and shall be
effective as of the last day of the calendar year in which the notice is
given. In such a case, the Plan Member shall be eligible to receive the
Award that is payable for the Performance Period ending on the last day of
the calendar year in which the notice is given, but shall not be eligible
for any other Awards payable with respect to any Performance Periods that
may have commenced during the Plan Member's period of participation under
this Plan.
11. SOURCE OF BENEFITS
The Company shall pay benefits due under the terms of this Plan directly from
its assets or from any trust that the Company may choose to establish and
maintain from time to time. Nothing contained in this Plan shall give or be
deemed to give any Plan Member or any other person any interest in any property
of any such Trust or in any property of the Company, nor shall any Plan Member
or any other person have any right under this Plan not expressly provided by the
terms hereof, as such terms may be interpreted and applied by the Administrator
in its discretion.
12. LIABILITY OF OFFICERS AND PLAN MEMBERS
No past, present or future employee, officer, director or agent of AK Steel
Holding Corporation or of the Company shall be personally liable to any Plan
Member or other person to pay any benefit payable under any provision of this
Plan or for any action taken by any such person in the administration or
interpretation of this Plan.
5
13. UNSECURED GENERAL CREDITOR
Any and all rights created under this Plan shall be unfunded and unsecured
contractual rights of the Plan Members against the Company. The Company's
obligation under this Plan shall be a mere promise by the Company to make the
benefit payments described herein. Plan Members shall have no legal or
equitable right, interest or other claim in any property or assets of the
Company by reason of the establishment of this Plan.
14. CLAIMS PROCEDURE
It is intended that the Administrator shall have full discretion to interpret
the Plan's terms, to resolve claims which may arise under the Plan and to amend
or terminate the Plan as it may deem to be necessary or appropriate. Any Plan
Member or other person questioning the rights of any person under the Plan shall
submit such question in writing to the Administrator, or its designate, for
resolution. No person shall have any claim or cause of action for any benefit
under this Plan until the Administrator, or its designate, has responded to such
written claim, which response shall not be unreasonably delayed. It is intended
by the Board, and each Plan Member agrees as a condition of membership, that any
judicial review of any decision hereunder shall be limited to a determination of
whether the Administrator, or its designate, acted arbitrarily or capriciously,
and that any decision of the Administrator its designate shall be enforced
unless the action taken is found by a court of competent jurisdiction to have
been arbitrary or capricious.
15. LEGAL FEES AND EXPENSES
It is the intent of the Company that no Plan Member shall be required to incur
any expenses associated with the enforcement of his or her rights under this
Plan by litigation or other legal action because the cost and expense thereof
would substantially detract from the benefits intended to be extended to a Plan
Member hereunder. If the Company fails to fulfill any of its obligations under
this Plan, then the Company irrevocably authorizes such Plan Member to retain
counsel of his or her choice, at the expense of the Company, to represent such
Plan Member in connection with the prosecution or the defense of any litigation
or other legal action, whether by or against the Trustee, the Company or any
Plan Member, officer, stockholder or other person affiliated with the Company in
any jurisdiction; and further the Company indemnifies and holds harmless the
Plan Member from any and all attorneys' and related fees and expenses incurred
by or on behalf of any such Plan Member in the prosecution or the defense of any
such matter.
16. AMENDMENT OR TERMINATION OF PLAN
The Board expressly reserves for itself and for its Administrator the right and
the power to terminate the Plan at any time. In such a case, unless the
Administrator otherwise expressly provides at the time the action is taken, no
Awards shall be paid to any Plan Member on or after the date of such action.
6
17. MISCELLANEOUS
a. ASSIGNABILITY
No Plan Member shall have any right to anticipate, alienate, assign, sell,
transfer, pledge, encumber, attach, mortgage or otherwise hypothecate or
convey in advance of actual receipt the amounts, if any, payable hereunder.
No part of the amounts payable hereunder shall, prior to actual payment, be
subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance, nor shall any person have any
other claim to any benefit payable under this Plan as a result of a divorce
or the Plan Member's, or any other person's, bankruptcy or insolvency.
b. OBLIGATIONS TO THE COMPANY
If a Plan Member becomes entitled to a distribution of benefits under this
Plan, and if at such time the Plan Member has any outstanding debt,
obligation or other liability representing an amount owed to the Company,
then the Company may offset such amounts against the amount of benefits
otherwise distributable. Such determination shall be made by the
Administrator or the Board.
c. NO PROMISE OF CONTINUED EMPLOYMENT
Nothing in this Plan or in any materials describing or relating to this
Plan grants, nor should it be deemed to grant, any person any employment
right, nor does participation in this Plan imply that any person has been
employed for any specific term or duration or that any person has any right
to remain in the employ of the Company. Subject to the provisions of
paragraph 10 hereof, the Company retains the right to change or terminate
any condition of employment of any Plan Member without regard to any affect
any such change has or may have on such persons rights hereunder.
d. CAPTIONS
The captions to the articles, sections and paragraphs of this Plan are for
convenience only and shall not control or affect the meaning or
construction of any of its provisions.
7
e. VALIDITY
In the event any provision of this Plan is found by a court of competent
jurisdiction to be invalid, void or unenforceable, such provision shall be
stricken and the remaining provisions shall continue in full force and
effect.
f. APPLICABLE LAW
This Plan is subject to interpretation under federal law and, to the extent
applicable, the law of the State of Ohio.
AK Steel Corporation
AK Steel Holding Corporation
By: /s/ John G. Hritz
-------------------------------
John G. Hritz, Vice President,
General Counsel and Secretary
8