Exhibit 99.8
HEADWATERS INCORPORATED
GENERAL EMPLOYEE BONUS PLAN
Effective 1 October 2003
1. PURPOSE
The purpose of this General Employee Bonus Plan ("Plan") is to promote
the success of Headwaters Incorporated and Headwaters subsidiaries, by
providing financial incentive for employees to strive for more
effective operation of the business through ongoing development and use
of their knowledge, skill, ingenuity, resourcefulness and industry. The
Plan will provide motivation to achieve Company goals with special
emphasis on EBITDA performance focus, energy, resilience, and learning.
2. DEFINITIONS
The following definitions shall be applicable throughout the Plan:
(a) "Applicable Percentage" means the percentage or the percentage
scale determined annually by the Chief Financial Officer of
the Company to calculate the Bonus Pool.
(b) "Award" means the total dollar amount that may be paid to a
Participant following a given Performance Year.
(c) "Base Compensation" means the annualized base W2 wages
(excluding bonuses, benefits, etc.) of a Participant
determined on the last day of a Performance Year.
(d) "Bonus Pool" means the maximum amount of Awards subject to
potential allocation to Participants as calculated under
Section 6.
(e) "Board" means the Board of Directors of Headwaters
Incorporated.
(f) "Committee" means the Headwaters' Compensation Committee, or
such other committee comprised of members of the Board
designated by the Board to oversee the Plan.
(g) "Company" means collectively Headwaters Incorporated and its
wholly owned subsidiaries.
(h) "EBITDA" means direct operating income plus depreciation and
amortization.
(i) "Management" means the Chief Executive Officer of the company.
(j) "Minimum Service Level" means a period of three months.
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General Employee Bonus Plan
(k) "Participant" means a full time employee of the Company,
employed by the Company on the last day of a Performance Year
and who otherwise meets the eligibility requirements for
participation set forth in section 4.
(l) "Performance Adjustment Factor or PAF" means the multiplier
obtained by combining the completion factors from the Personal
Objectives of the Participants. The Performance Adjustment
Factor can vary from 0% to 100% depending upon the attainment
of the Participant's Personal Objectives.
(m) "Performance Year" means a fiscal year of the Company during
which Company and individual performance will be measured and
Participant services will be rendered for which an Award may
be granted.
(n) "Personal Objectives" means the set of standards used to
measure a Participants' individual and group performance as
defined in Paragraph 7.
(o) "Plan" means this Headwaters Incorporated General Bonus Plan.
3. POWERS AND ADMINISTRATION
The Committee shall have such powers and duties as are
conferred upon it under this Plan, or any amendments thereto, or by the
Board. The Committee shall provide appropriate oversight of the Plan,
approve the Applicable Percentage for a Performance Year, and have
authority to amend, suspend or terminate the Plan.
Management shall take whatever action is necessary in
fulfilling the purposes and intent of the Plan. Management is
authorized and empowered to interpret the terms and conditions of the
Plan, to promulgate any rules, regulations and schedules of general
applicability and to adopt such forms deemed necessary to carry out the
purposes of the Plan. However, no such interpretation, rule or
regulation shall be contrary to the clearly expressed provisions of the
Plan.
4. ELIGIBILITY FOR PARTICIPATION
(a) Those full time employees of the Company employed by the
Company on the last day of the Performance Year who:
(i) have achieved relevant Plan performance criteria
including the Minimum Service Level; and
(ii) are not otherwise eligible to receive regularized,
periodic performance-based bonus compensation under
some established plan of the Company or its business
units or subsidiaries.
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General Employee Bonus Plan
(b) Participation in a given Performance Year does not entitle
participation in any subsequent Performance Year.
5. DETERMINATION OF AWARDS
The Award shall be computed as follows:
Base Compensation X Bonus Pool X Performance Adjustment Factor
Total of all Participants'
Base Compensation
An Award shall be prorated based upon the number of months the
Participant has been employed by the Company during a Performance Year.
6. DETERMINATION OF BONUS POOL
The Bonus Pool shall be determined by multiplying the Applicable
Percentage as indicated on Schedule I multiplied times the Company's
EBITDA for the Performance Year.
7. PERSONAL AWARDS AND OBJECTIVES
(a) Personal Objectives for all Participants are listed on Schedule II.
(b) The actual Award granted to any individual Participant hereunder
shall be based upon the Company's overall performance and individual
performance considerations and shall be determined by the Management,
in its sole discretion.
8. FORM AND TIME OF PAYMENT
An Award shall be paid to the Participant in cash, less applicable
federal, state, local and FICA taxes and applicable employee
deductions, e.g., 401(k) contributions, as soon as practicable after
the date on which the aggregate of all awards is approved by Committee.
9. EMPLOYEE POOLS
Employee pools shall be created and identified on Schedule I for
purposes of determining the employee groups for measuring of
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General Employee Bonus Plan
performance of Personal Objectives where the basis of performance is
group oriented, e.g., EBITDA performance by a group of employees.
10. NO RESERVE OR TRUST
Nothing contained in the Plan shall require the Company to segregate
any monies from its general funds, or to create any trust or make any
special deposit in respect of any amounts payable under the Plan to or
for any Participant or group of Participants. All amounts payable under
the Plan shall be paid out of the general funds of the Company.
11. NO RIGHT TO ASSIGN
No right or interest of any Participant in the Plan or in any unpaid
Award shall be assignable or transferable in whole or in part, either
voluntarily or by operation of law or otherwise, or be subject to
payment of debts of any Participant by execution, levy, garnishment,
attachment, pledge, bankruptcy or in any other manner.
12. NO EMPLOYMENT RIGHTS CONFERRED
Nothing contained in the Plan or any Award shall confer upon any
employee any right with respect to continuation of employment with the
Company in any capacity or interfere in any way with the right of the
Company to terminate an employee's employment at any time or guarantee
any right of participation in any other employee benefit plan of the
Company.
13. SUCCESSORS AND MERGERS, CONSOLIDATIONS OR CHANGE IN CONTROL
The terms and conditions of this Plan shall inure to the benefit of and
bind the Company, the Participants, their successors, assignees, and
personal representatives.
14. GOVERNING STATE LAW
The provisions of this Plan shall be construed and administered in
accordance with the laws of the State of Utah.
15. AMENDMENT
The Committee may from time to time amend, suspend, terminate or
reinstate any or all of the provisions of the Plan. However, the
Committee may not cancel awards payable on account of a completed
Performance Year.
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General Employee Bonus Plan
16. EFFECTIVE DATE AND TERM OF THE PLAN
The Plan shall become effective for the Performance Year commencing
October 1, 2003 upon adoption by the Board and shall remain in effect
until such time as the Board may terminate it.
Approved by the Committee: 23 October 2003
/s/ Kirk A. Benson
------------------------------
Kirk A. Benson, Chairman & CEO
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General Employee Bonus Plan
Schedule I
Applicable Percentage for Fiscal 2004:
0.825%
Employee Pools: EBITDA Goal:
- --------------- ------------
($ in thousands)
ISG
Flexcrete $(732)
North Region $8,075
West Region $9,130
South Region $19,553
Bagged Goods $2,681
Block Goods $2,082
ISG Admin $(3,735)
HTI $(817)
Covol Fuels $70,270
Corporate Administration $(6,488)
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Headwaters Incorporated
General Employee Bonus Plan
Schedule II
Personal Objectives
There will be five Personal Objectives:
1. Achievement of Employee Pool EBITDA;
2. Focus, understands job requirements, plans and manages own work to
achieve results.
3. Energy, offers creative solutions and recommendations to solve
work-related challenges and applies personal effort in problem
solution;
4. Resilience, willing to adapt to changing priorities and work on more
than one project at a time; and
5. Learning, develops the job knowledge and has the skill, know-how,
and understanding to fulfill the responsibilities of the position;
- ------------------------------------------------------------------------------------------------------------
PERFORMANCE ADJUSTMENT FACTORS MATRIX
EMPLOYEE POOL MEETS EBITDA
- ------------------------------------------------------------------------------------------------------------
OBJECTIVE RANGE UNSATISFACTORY BELOW REQUIREMENTS MEETS REQUIREMENTS EXCEEDS REQUIREMENTS
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
1. EBITDA POOL 0-40% 40% 40% 40% 40%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
2. FOCUS 0-15% 0% 5% 10% 15%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
3. ENERGY 0-15% 0% 5% 10% 15%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
4. RESILIENCE 0-15% 0% 5% 10% 15%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
5. LEARNING 0-15% 0% 5% 10% 15%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
TOTALS 0-100% 40% 60% 80% 100%
- ------------------- ------- ------------------ -------------------- -------------------- --------------------
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