EXHIBIT 10.24
STEEL DYNAMICS, INC.
2003 EXECUTIVE INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the Steel Dynamics, Inc. 2003 Executive
Incentive Compensation Plan (the "Plan") is to provide annual performance-based
incentive compensation to executives, based on the financial performance
criteria described in this Plan.
This Plan supersedes and replaces the Steel Dynamics, Inc. Amended and
Restated Officer and Manager Cash and Stock Bonus Plan (the "Old Plan"),
originally adopted, with stockholder approval, October 28, 1996 and amended,
with stockholder approval, effective January 1, 2000, except that all Stock
bonus awards previously made under the Old Plan and not yet fully vested shall
continue to be governed by the terms of the Old Plan.
Under the Old Plan, 450,000 shares of Stock were authorized for
issuance; and, from inception of the Old Plan to date, a total of 224,835 shares
were issued, of which 95,902 shares have not yet vested. Accordingly, the
balance of 225,165 shares, together with any additional vesting forfeitures,
remaining unissued under the Old Plan will be available for issuance under this
Plan, as part of and not in addition to the total number of shares authorized
under Section 3.1 of this Plan.
2. Effective Date and Term of Plan. The Effective Date of the Plan is
January 1, 2003, subject to stockholder approval. The Plan shall terminate on
February 28, 2008, unless extended, subject to stockholder approval, or earlier
terminated by the Board.
3. Shares of Stock Subject to the Plan.
3.1. The total number of shares of Stock of the Company
reserved and available for issuance and distribution pursuant to the
Plan shall not exceed, in the aggregate, 750,000 shares of the
authorized Stock of the Company, including the 225,165 or more unused
shares held over from the Old Plan, subject to adjustment as described
below.
3.2. Stock which may be issued under the Plan may be either
authorized but unissued shares or shares of issued Stock held in the
Company's treasury, or both, at the discretion of the Committee.
Whenever any Stock is forfeited under the Plan, the shares forfeited
shall revert to authorized but unissued shares and may again be
reissued hereunder.
3.3. In the event of any stock dividend, stock split,
combination or exchange of shares, recapitalization or other change in
the capital structure of the Company, corporate separation or division
(including, but not limited to, split-up, split-off, spin-off or
distribution to Company stockholders, other than a normal cash
dividend), sale by the Company of all or a substantial portion of its
assets, rights offering, merger, consolidation, reorganization or
partial or complete liquidation, or any other corporate transaction or
event having an effect similar to any of the foregoing, the aggregate
number of shares reserved for issuance under the Plan, as the Committee
shall deem necessary or appropriate to reflect equitably the effects of
such changes, shall be appropriately adjusted, or new shares shall be
issued, as determined by the Committee in its discretion.
4. Definitions. As used in this Plan, the following terms shall have
the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Adjusted Pre-Tax Net Income" means, for any Year,
consolidated net income of the Company, before taxes, extraordinary
items and bonuses payable to Participants under this Plan, as
determined by the Company; provided, however, that, to the extent
reasonably determinable, the effect upon Adjusted Pre-Tax Net Income of
any start-up expenses associated with significant capital expenditures,
for a period not to exceed twelve (12) months following start-up, shall
be excluded from and not taken into account in determining such
Adjusted Pre-Tax Net Income.
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2003 Executive Incentive Compensation Plan
"Average Divisional ROA Assets" for a division means the sum
of the dollar amounts of total divisional assets employed by that
division at the end of each month during the Year and during the last
month of the prior year, adjusted by subtracting (a) the book value of
assets classified as construction-in-progress, (b) the book value of
assets placed in service during the Year, and (c) fifty percent (50%)
of the book value of assets placed in service during the prior year,
and dividing the resulting amount by the number of months of the Year
plus one.
"Base Salary" means, with respect to a Participant, the
regular annual salary approved as "base salary" by the Committee and
paid during a Year for services rendered, excluding any cash or stock
bonus payments (whether paid under this Plan or otherwise) or severance
pay.
"Board" means the Board of Directors of the Company.
"Bonus Pool" means, for any Year, an amount determined by
multiplying Adjusted Pre-Tax Net Income, minus an amount equal to ten
percent (10%) of "Average Stockholders Equity," as determined by the
Company, by a percentage amount, determined annually by the Committee
no later than ninety (90) days after the commencement of the Year for
which incentive compensation hereunder may be paid, that shall be no
less than five percent (5%) nor more than six and one-half percent (6
1/2%).
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Committee" means a committee of the Board, as contemplated by
Section 6.
"Company" means Steel Dynamics, Inc., an Indiana corporation,
and its subsidiaries.
"Corporate Executive Officer" means those persons whose
primary responsibilities are company-wide, consisting initially of (a)
the Company's President and Chief Executive Officer, (b) the Company's
Chief Financial Officer, and (c) such other persons, if any, who may be
from time to time designated as a Corporate Executive Officer by the
Committee, for purposes of this Plan, no later than ninety (90) days
after the commencement of the Year for which incentive compensation
hereunder may be paid. Unless changed by the Committee within the
foregoing period, with respect to any Year, an officer's designation
for Plan purposes, once made, shall continue from year to year.
"Corporate Officer" means those persons whose primary
responsibilities are company-wide, consisting initially of (a) the
Company's Vice President of Sales and Marketing and (b) such other
persons, if any, who may be from time to time designated as a Corporate
Officer by the Committee, for purposes of this Plan, no later than
ninety (90) days after the commencement of the Year for which incentive
compensation hereunder may be paid. Unless changed by the Committee
within the foregoing period, with respect to any Year, an officer's
designation for Plan purposes, once made, shall continue from year to
year.
"Divisional Executive Officer" means those persons who have
both company-wide and direct divisional responsibilities, consisting
initially of (a) the Vice President and General Manager of the
Company's Butler, Indiana Flat Rolled Division, (b) the Vice President
and General Manager of the Company's Columbia City, Indiana Structural
and Rail Division, and (c) such other persons, if any, who may be from
time to time designated as a Divisional Executive Officer by the
Committee, for purposes of this Plan, no later than ninety (90) days
after the commencement of the Year for which incentive compensation
hereunder may be paid. Unless changed by the Committee within the
foregoing period, with respect to any Year, an officer's designation
for Plan purposes, once made, shall continue from year to year.
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2003 Executive Incentive Compensation Plan 2
"Divisional Officer" means those persons who have both
company-wide and direct divisional responsibilities, consisting
initially of (a) the general manager of the Company's Pittsboro,
Indiana Bar Products Division, (b) the president of the Company's New
Millennium Building Systems subsidiary, and (c) such other persons, if
any, who may be from time to time designated as a Divisional Officer by
the Committee, for purposes of this Plan, no later than ninety (90)
days after the commencement of the Year for which incentive
compensation hereunder may be paid. Unless changed by the Committee
within the foregoing period, with respect to any Year, an officer's
designation for Plan purposes, once made, shall continue from year to
year.
"Divisional Return on Assets" for a division means a
percentage established by adding (a) the division's net income for the
Year, as determined for corporate consolidation purposes, (b) the
amount of certain corporate expenses allocated to that division, and
(c) the amount of incentive bonus compensation expenses associated with
this Plan, and then dividing that sum by the Average Divisional ROA
Assets.
"Effective Date" has the meaning assigned to such term in
Section 2.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time.
"Fair Market Value" means, as of any date, the value of the
Stock determined as follows: if the Stock is listed on any established
stock exchange or a national market system, including without
limitation the NASDAQ National Market of the National Association of
Securities Dealers, Inc. Automated Quotation (NASDAQ) System, the Fair
Market Value of a share of Stock shall be the closing sales price for
such Stock (or the closing bid, if no sales were reported) as quoted on
such system or exchange (or the exchange with the greatest volume of
trading in the Stock) on the last market trading date prior to the date
of determination, as reported by Dow Jones, in the Wall Street Journal
or by such other source as the Committee deems reliable.
"Maximum ROA Target" means a Return on Assets percentage, by
division, established by the Committee, which shall be no less than
twenty-five percent (25%) nor more than thirty-five percent (35%).
"Minimum ROA Target" means a Return on Assets percentage, by
division, established by the Committee, which shall be no less than
four percent (4%) nor more than six percent (6%).
"Participant" means those Corporate Executive Officers,
Divisional Executive Officers, Corporate Officers and Divisional
Officers who, either as defined hereunder or by Committee designation,
are designated or selected from time to time to be Participants under
this Plan.
"Participant's Adjusted Base Salary", as applied within the
Bonus Pool component of this Plan, (a) for purposes of either or both
of the cash portions of the bonuses described in Sections 5.1 and 5.2,
means (i) with respect to any Corporate Executive Officer, two and
one-half (2 1/2) times his Base Salary, (ii) with respect to a
Divisional Executive Officer, half of his Base Salary multiplied by two
and one-half (2 1/2), (iii) with respect to any Corporate Officer, one
and one-half (1 1/2) times his Base Salary, and (iv) with respect to
any Divisional Officer twenty-five percent (25%) of his Base Salary
multiplied by one and one-half (1 1/2); and (b) for purposes of the
stock portions of the bonuses described in Sections 5.1 and 5.2, means
(i) with respect to any Corporate Executive Officer, his Base Salary,
(ii) with respect to a Divisional Executive Officer fifty percent (50%)
of this Base Salary, (iii) with respect to any Corporate Officer,
seventy-five percent (75%) of his Base Salary, and (iv) with respect to
any Divisional Officer eighteen and three-quarters percent (18.75%) of
his Base Salary.
"Participant's Bonus Pool Percentage" means, in any Year with
respect to a Participant, a fraction, the numerator of which is equal
to the Participant's Adjusted Base Salary and the denominator of which
is equal to the sum of all of the Participants' Adjusted Base Salaries.
"Plan" means the Steel Dynamics, Inc. 2003 Executive Incentive
Compensation Plan, or as it may be further amended from time to time.
"Remaining Bonus Pool" means the excess of the Bonus Pool over
the sum of the aggregate cash bonus amounts payable pursuant to
Sections 5.1.1.1 and 5.1.2.1.
"Restricted Stock" means Stock issued pursuant to the Plan
that is not yet vested as contemplated by Section 8.
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2003 Executive Incentive Compensation Plan 3
"Retirement" means voluntary retirement by a Participant who
is at least 60 years old.
"Stock" means the $0.01 par value common stock of the Company.
"Vested Shares" has the meaning assigned to such term in
Section 8.
"Year" means the Company's fiscal year, for which incentive
compensation may be payable hereunder.
5. Payment of Incentive Compensation. Subject to the terms, conditions
and limitations set forth in this Plan, each Year Participants who are Corporate
Executive Officers or Corporate Officers may be entitled to receive a cash and a
stock bonus under Section 5.1; and Participants who are Divisional Executive
Officers or Divisional Officers may be entitled to receive a cash and a stock
bonus under both Sections 5.1 and 5.2.
5.1. Incentive Compensation for Corporate Executive Officers
and Corporate Officers. Each Participant who is a Corporate Executive
Officer or a Corporate Officer may be entitled to receive, each Year,
incentive compensation based upon a performance-based consolidated
Bonus Pool determined in the manner described in Sections 5.1.1 and
5.1.2.
5.1.1. Corporate Executive Officers.
5.1.1.1. Cash Bonus. Each Participant who is
a Corporate Executive Officer shall receive a cash
bonus in an amount, if any, equal to the product of
(i) the Participant's Bonus Pool Percentage and (ii)
the Bonus Pool; provided, however, that the cash
bonus shall not exceed two and one-half (2 1/2) times
the Corporate Executive Officer's Base Salary.
5.1.1.2. Stock Bonus. Each Participant who
is a Corporate Executive Officer shall also be
entitled to receive a stock bonus if there are
unallocated amounts remaining in the Remaining Bonus
Pool. Any such amounts shall be distributed in the
form of Restricted Stock as follows: that number of
shares of Restricted Stock having, at the time of
issuance, a Fair Market Value equal to the product of
(i) the Participant's Bonus Pool Percentage and (ii)
the Remaining Bonus Pool; provided, however, that the
aggregate Fair Market Value of the Restricted Stock
so issued shall not exceed the Corporate Executive
Officer's Base Salary.
5.1.2. Corporate Officers.
5.1.2.1 Cash Bonus. Each Participant who is
a Corporate Officer shall receive a cash bonus in an
amount, if any, equal to the product of (i) the
Participant's Bonus Pool Percentage and (ii) the
Bonus Pool; provided, however, that the cash bonus
shall not exceed one and one-half (1 1/2) times the
Corporate Officer's Base Salary.
5.1.2.2 Stock Bonus. Each Participant who is
a Corporate Officer shall be entitled to receive a
stock bonus if there are unallocated amounts
remaining in the Remaining Bonus Pool. Any such
amounts shall be distributed in the form of
Restricted Stock as follows: that number of shares of
Restricted Stock having, at the time of issuance, a
Fair Market Value equal to the product of (i) the
Participant's Bonus Pool Percentage and (ii) the
Remaining Bonus Pool; provided, however, that the
aggregate Fair Market Value of the Restricted Stock
so issued shall not exceed seventy-five percent (75%)
of the Corporate Officer's Base Salary.
5.2. Incentive Compensation for Divisional Executive Officers
and Divisional Officers. Each Participant who is a Divisional Executive
Officer or a Divisional Officer may be entitled to receive, each Year,
a cash and a stock bonus, in part, based on a Company-wide
performance-based bonus pool determined in the manner described in
Section 5.2.1 and, in part, based on divisional performance, determined
in the manner described in Section 5.2.2.
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2003 Executive Incentive Compensation Plan 4
5.2.1. Divisional Executive Officers.
5.2.1.1. Incentive Compensation Based on the
Consolidated Bonus Pool.
(a) Cash Bonus. Each Participant who
is a Divisional Executive Officer shall
receive a cash bonus in an amount, if any,
equal to the product of (i) the
Participant's Bonus Pool Percentage and (ii)
the Bonus Pool; provided, however, that the
cash bonus shall not exceed two and one-half
(2 1/2) times his Base Salary multiplied by
fifty percent (50%), or a total of 125% of
his Base Salary.
(b) Stock Bonus. Each Participant
who is a Divisional Executive Officer shall
receive a stock bonus if there are
unallocated amounts remaining in the
Remaining Bonus Pool. Any such amounts shall
be distributed in the form of Restricted
Stock as follows: that number of shares of
Restricted Stock having, at the time of
issuance, a Fair Market Value equal to the
product of (i) the Participant's Bonus Pool
Percentage and (ii) the Remaining Bonus
Pool; provided, however, that the aggregate
Fair Market Value of the Restricted Stock so
issued shall not exceed fifty percent (50%)
of his Base Salary.
5.2.1.2. Incentive Compensation Based on
Divisional Performance. No later than ninety days
after the commencement of the Year for which
incentive compensation may be paid, the Committee
shall make two preliminary determinations: (a) a
threshold return on assets percentage (the "Minimum
ROA Target," as defined) for each separate division,
which must be achieved by each such division before
any cash or stock bonus may be paid under this
Section 5.2 in respect of that division, and (b) a
maximum return on assets percentage (the "Maximum ROA
Target," as defined) at which level the Divisional
Executive Officer or Divisional Officer will be
entitled to receive the Divisional Executive
Officer's Maximum Divisional Cash Bonus, as defined
in Section 5.2.1.1(a), the Divisional Executive
Officer's Maximum Divisional Stock Bonus, as defined
in Section 5.2.1.1(b), the Divisional Officer's
Maximum Divisional Cash Bonus, as defined in Section
5.2.1.2(a), or the Divisional Officer's Maximum
Divisional Stock Bonus, as defined in Section
5.2.1.2(b).
(a) Cash Bonus. Each Participant who
is a Divisional Executive Officer shall
receive, for a particular Year, a cash
bonus, if any, in an amount equal to that
percentage of the Divisional Executive
Officer's Maximum Divisional Cash Bonus for
that Year, established by linear
interpolation and derived by (a) dividing
the number of whole number increments
between the applicable Minimum ROA Target
for that Year and the applicable Maximum ROA
Target for that Year into one hundred (100),
and (b) multiplying the result by the number
of whole number increments, expressed as a
percentage, between the applicable Minimum
ROA Target and the actual Divisional Return
on Assets for that Year (rounded down from
.4 and up from .5). For purposes of this
Section 5.2.1.2(a), the term "Divisional
Executive Officer's Maximum Divisional Cash
Bonus" means an amount, payable in cash,
equal to two and one-half times his Base
Salary multiplied by fifty percent (50%), or
a total of one hundred twenty-five percent
(125%) of his Base Salary.
(b) Stock Bonus. Each Participant
who is a Divisional Executive Officer shall
receive, for a particular Year, a stock
bonus, if any, in an amount equal to that
percentage of the Divisional Executive
Officer's Maximum Divisional Stock Bonus for
that Year, established by linear
interpolation and derived by (a) dividing
the number of whole number increments
between the applicable Minimum ROA Target
for that Year and the applicable Maximum ROA
Target for that Year into one hundred (100),
and (b) multiplying the result by the number
of whole number increments, expressed as a
percentage, between the applicable Minimum
ROA Target and the actual Divisional Return
on Assets for that Year (rounded down from
.4 and up from .5). For purposes of this
Section 5.2.1.2(b), the term "Divisional
Executive Officer's Maximum Divisional Stock
Bonus" means an amount, payable in shares of
Restricted Stock, having, at the time of
issuance, a Fair Market Value equal to fifty
percent (50%) of his Base Salary.
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2003 Executive Incentive Compensation Plan 5
5.2.2. Divisional Officers.
5.2.2.1. Incentive Compensation Based on the
Consolidated Bonus Pool.
(a) Cash Bonus. Each Participant who
is a Divisional Officer shall receive a cash
bonus in an amount, if any, equal to the
product of (i) the Participant's Bonus Pool
Percentage and (ii) the Bonus Pool;
provided, however, that the cash bonus shall
not exceed one and one-half times (1 1/2)
times his Base Salary multiplied by
twenty-five percent (25%), or a total of
thirty-seven and one-half percent (37.5%) of
his Base Salary.
(b) Stock Bonus. Each Participant
who is a Divisional Officer shall also be
entitled to receive a stock bonus if there
are unallocated amounts remaining in the
Remaining Bonus Pool. Any such amounts shall
be distributed in the form of Restricted
Stock as follows: that number of shares of
Restricted Stock having, at the time of
issuance, a Fair Market Value equal to the
product of (i) the Participant's Bonus Pool
Percentage and (ii) the Remaining Bonus
Pool; provided, however, that the aggregate
Fair Market Value of the Restricted Stock so
issued shall not exceed seventy-five percent
(75%) of his Base Salary multiplied by
twenty-five percent (25%), or a total of
eighteen and three-quarters percent (18.75%)
of his Base Salary.
5.2.2.2. Incentive Compensation Based on
Divisional Performance.
(a) Cash Bonus. Each Participant who
is a Divisional Officer shall receive, for a
particular Year, a cash bonus, if any, in an
amount equal to that percentage of the
Divisional Officer's Maximum Divisional Cash
Bonus for that Year, established by linear
interpolation and derived by (a) dividing
the number of whole number increments
between the applicable Minimum ROA Target
for that Year and the applicable Maximum ROA
Target for that Year into one hundred (100),
and (b) multiplying the result by the number
of whole number increments, expressed as a
percentage, between the applicable Minimum
ROA Target and the actual Divisional Return
on Assets for that Year (rounded down from
.4 and up from .5). For purposes of this
Section 5.2.2.2(a), the term "Divisional
Officer's Maximum Divisional Cash Bonus"
means an amount, payable in cash, equal to
one and one-half (1 1/2) times his Base
Salary multiplied by seventy-five percent
(75%), or a total of one hundred twelve and
one-half percent (112.5%) of his Base
Salary.
(b) Stock Bonus. Each Participant
who is a Divisional Officer shall receive,
for a particular Year, a stock bonus, if
any, in an amount equal to that percentage
of the Divisional Officer's Maximum
Divisional Stock Bonus for that Year,
established by linear interpolation and
derived by (a) dividing the number of whole
number increments between the applicable
Minimum ROA Target for that Year and the
applicable Maximum ROA Target for that Year
into one hundred (100), and (b) multiplying
the result by the number of whole number
increments, expressed as a percentage,
between the applicable Minimum ROA Target
and the actual Divisional Return on Assets
for that Year (rounded down from .4 and up
from .5). For purposes of this Section
5.2.2.2(b), the term "Divisional Officer's
Maximum Divisional Stock Bonus" means an
amount, payable in shares of Restricted
Stock, having, at the time of issuance, a
Fair Market Value equal to seventy-five
percent (75%) of his Base Salary multiplied
by seventy-five percent (75%), or a total of
fifty-six and one-quarter percent (56.25%)
of his Base Salary.
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2003 Executive Incentive Compensation Plan 6
6. Administration.
6.1. The Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Committee"), unless the Board
otherwise provides. The Committee shall in all events and at all times
consist of not less than three members of the Board, each of whom shall
(a) meet the definition of "independence" prescribed from time to time
by applicable SEC rules and as required under the applicable listing
standards prescribed by Nasdaq or by such other national securities
exchange on which the Company's Stock is listed, (b) be a "non-employee
director," as such term is defined in Rule 16b-3 promulgated under
Section 16 of the Exchange Act or any successor provision, and (c) be
an "outside director," as that term is used in Section 162(m) of the
Code and the regulations promulgated thereunder. In the absence of the
appointment or functioning of a Committee, however, the Board members
who meet all of the foregoing three criteria shall together constitute
and function as the Committee.
6.2. The Committee shall administer the Plan so as to comply
at all times with Rule 16b-3 of the Exchange Act, and Section 162(m) of
the Code and any other qualifying laws or rules, including applicable
independence rules, that may be applicable from time to time. To the
extent that any provision hereof is found not to be in compliance with
any such rule or requirement, the Committee shall have the full power
and authority to effect such changes or amendments, without the
necessity of any further approval by stockholders. Subject to the
foregoing, the Board may from time to time increase the size of the
Committee, appoint additional members, remove members (with or without
cause), substitute new members, and fill vacancies (however caused). A
majority of the members of the Committee shall constitute a quorum, and
the actions of a majority of the members of the Committee at a meeting
at which a quorum is present shall be the actions of the Committee.
6.3. The Committee shall have the exclusive power, authority
and discretion to adopt, alter and repeal such administrative rules,
guidelines and practices governing the Plan as it shall from time to
time deem advisable and to interpret the terms and provisions of the
Plan. The Committee's interpretation of the Plan shall be final,
binding and conclusive on all parties.
6.4. The Committee shall have the authority and discretion to:
(a) annually determine the Bonus Pool, within the limitations described
in Section 4; (b) annually designate those persons who shall be
classified as Corporate Officers, Corporate Executive Officers,
Divisional Officers, or Divisional Executive Officers; (c) annually
establish the Minimum ROA Target and the Maximum ROA Target; (d)
annually determine, notwithstanding the percentage multiplier specified
in Section 4 used to calculate a Divisional Executive Officer's Maximum
Divisional Cash Bonus or a Divisional Executive Officer's Maximum
Divisional Stock Bonus, what that multiplier shall be, within a range
of not less than forty percent (40%) nor more than sixty percent (60%),
together with any necessary conforming or reciprocal adjustments to the
related percentage multipliers; and (e) annually determine,
notwithstanding the percentage multiplier specified in Section 4 used
to calculate a Divisional Cash Bonus or a Divisional Officer's Maximum
Divisional Stock Bonus, what that multiplier shall be, within a range
of not less than sixty-five percent (65%) nor more than eighty-five
percent (85%), together with any necessary conforming or reciprocal
adjustments to the related percentage multipliers.
The Committee's exercise of its authority and discretion
hereunder shall in no event be exercised to increase the incentive
compensation payable to any Participant subject to Section 162(m) of
the Code in excess of the amount determined by the performance measures
applicable to that Participant.
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2003 Executive Incentive Compensation Plan 7
6.5. The Committee may employ such legal counsel, consultants
and agents as it may deem desirable for the administration of the Plan
and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or
agent. Expenses incurred by the Committee in engaging such counsel,
consultant or agent shall be paid by the Company.
6.6. The Committee shall have the right, in its sole
discretion, to waive the forfeiture provisions found in Section 8
below.
7. Amendment and Termination. The Board may at any time or from time to
time amend this Plan in whole or in part; provided, however, that any amendment
that must be approved by the Company's stockholders in order to comply with
applicable law or with the rules of any national securities exchange or market
upon which the Company's Stock is traded or quoted or to satisfy the
requirements for "performance-based compensation" within the meaning of Section
162(m) of the Code shall not be effective unless and until such approval has
been obtained. Presentation of this Plan or any amendment hereof for stockholder
approval shall not be deemed to limit the Company's authority to offer similar
or dissimilar benefits in plans that do not require stockholder approval or in
plans for which stockholder approval is not sought. The Board may also terminate
this Plan at any time.
8. Forfeiture and Vesting of Restricted Stock. Restricted Stock issued
to a Participant shall vest and become nonforfeitable as follows: one-third
(1/3) of the Restricted Stock shall vest immediately upon issuance, an
additional one-third (1/3) will vest one year later, and the balance will vest
on the second anniversary of the initial issuance date. Upon termination of the
Participant's employment for any reason other than Retirement, all shares of
Restricted Stock of the Participant which are not Vested Shares at the time of
termination of employment shall be forfeited and returned to the Company, and
the Participant shall no longer be the owner of or have any interest whatsoever
in the forfeitable Restricted Stock.
9. Restriction on Transfer of Restricted Stock. Restricted Stock that
is forfeitable under the terms of this Plan may not be transferred, assigned,
sold, pledged, hypothecated, or otherwise disposed of in any manner and shall
not be subject to levy, attachment, or other legal process.
10. Certificates. Restricted Stock issued under this Plan shall be
registered in the name of each Participant. Stock certificates so issued shall
be held by the Company. Stock certificates shall bear such restrictive legends
as the Committee may prescribe.
Subject to all the terms, conditions, and limitations of this Plan,
including provisions concerning forfeiture and restrictions on transfer, the
Participant shall be the owner of the Restricted Stock with full dividend and
voting rights. Upon the request of a Participant, separate stock certificates
shall be issued and delivered to the Participant with respect to Vested Shares.
11. General Provisions.
11.1. No Guarantee of Employment. The adoption of the Plan
shall not confer upon any Participant any right to continued employment
with the Company nor shall it interfere in any way with the right of
the Company to terminate its relationship with any Participant at any
time.
11.2. Participant Titles for Plan Purposes Only. The use of
"Executive" or "Officer," alone or in combination anywhere in this
Plan, are for purposes solely of establishing different categories of
benefits provided by this Plan. Such designations are not intended to
confer nor shall they be deemed to confer any status as an officer of
the Company, nor shall any such designations be deemed to differentiate
the duties, titles or responsibilities of any existing or future
officer of the Company.
11.3. Withholding of Taxes. No later than the date as of which
an amount first becomes includible in the gross income of a Participant
for federal income tax purposes with respect to any Restricted Stock
under the Plan, the Participant shall pay to the Company or make
arrangements satisfactory to the Committee regarding the payment of any
federal state or local taxes of any kind required by law to be withheld
with respect to such amount. The obligations of the Company under the
Plan shall be conditioned on such payment or arrangements and the
Company, to the extent permitted by law, shall have the right to deduct
any such taxes from any payment of any kind otherwise due to the
Participant.
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2003 Executive Incentive Compensation Plan 8
11.4. Expenses. The expenses of administering the Plan shall
be borne by the Company.
11.5. Fractional Shares. No fractional shares of Stock shall
be issued, and the Committee shall determine, in its discretion,
whether cash shall be given in lieu of fractional shares or whether
such fractional shares shall be eliminated by rounding up.
11.6. Governing Law. To the extent not governed by federal
law, the Plan shall be construed in accordance with and governed by the
laws of the State of Indiana.
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2003 Executive Incentive Compensation Plan 9