Exhibit 10.3
AK STEEL
CORPORATION
ANNUAL MANAGEMENT INCENTIVE
PLAN
(as amended and restated as of
January 16, 2003)
Introduction
The name of this plan is the AK
Steel Corporation Annual Management Incentive Plan (the
“Plan”). AK Steel Corporation (the
“Company”) adopted the Plan in 1994 to enhance the
Company’s focus on specific performance goals with respect to
net income, safety, and quality. The Plan is hereby amended and
restated as set forth in this document.
The Plan is a payroll practice
intended to motivate selected employees to meet certain performance
goals. 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, as amended, and the Plan shall be
interpreted, administered and enforced to the extent possible in a
manner consistent with that intent. Any obligations under the Plan
shall be the joint and several obligations of AK Steel Holding
Corporation, the Company, and each of their respective subsidiaries
and affiliates. The Plan is designed to comply with the
performance-based compensation exception under Section 162(m) of
the Internal Revenue Code of 1986, as amended (the
“Code”).
1. Administration of the
Plan.
This Plan shall be administered by
the Compensation Committee (the “Committee”) of the
Board of Directors of the Company (the “Board”). The
Committee shall consist of not less than two members of the Board
who shall be appointed from time to time by, and shall serve at the
discretion of, the Board. Each member of the Committee shall be an
“outside director” within the meaning of Section 162(m)
of the Code and related regulations, an “independent
director” as defined in the rules and regulations of the New
York Stock Exchange, and a “non-employee director” as
defined in Rule 16b-3 promulgated under the Securities Exchange Act
of 1934, as amended. The Human Resources Department of the Company
shall maintain records of authorized participants for each period
described in paragraph 4 below (the “Performance
Period”).
2. Participation.
Certain nonrepresented salaried
employees of the Company (“Plan Member” or “Plan
Members”) shall be eligible to participate in this Plan upon
selection by the Chairman of the Board or his delegate, the
Executive Management Committee (the “EMC”), subject to
the approval and/or review from time to time by the Committee. The
EMC shall consist of the Company’s Chief Executive Officer,
President, Vice President—Human Resources, and such other
individuals as may be designated from time to time by the Chief
Executive Officer. Notwithstanding the foregoing, any covered
employee as defined in Section 162(m)(3) of the Code
(“Covered Employee”), shall be designated to
participate in the Plan by the Committee in writing within the time
period prescribed by Section 162(m) of the Code and related
regulations.
3. Bonus Opportunity
Targets.
Each Plan Member shall be assigned a
Bonus Opportunity Target Percentage (“Target
Percentage”) and a Bonus Opportunity Maximum Percentage
(“Maximum Percentage”) at the time he is selected for
participation in this Plan based on his position in the Company
and/or his overall contribution to the Company. A Plan
Member’s Target Percentage and/or Maximum Percentage may be
changed from time to time at the discretion of the Committee or the
EMC. Notwithstanding the foregoing, the Committee shall assign or
change, in writing, the Target Percentage and Maximum Percentage
for any Covered Employee for a particular Performance Period within
the time period prescribed by Section 162(m) of the Code and
related regulations.
A Plan Member’s Target
Percentage with respect to any Performance Period is the percentage
of his annual base compensation (as defined below) that may be
awarded to him by the Company as additional compensation if the
Company achieves certain goals as determined by the Committee and
approved by the Board with respect to net income (excluding
special, unusual and extraordinary items), safety, and quality. A
Plan Member’s Maximum Percentage, which is two times his
Target Percentage, is the percentage of his annual base
compensation that may be awarded if the Company achieves for the
Performance Period not only the established safety and quality
goals, but exceeds the established net income goal by a certain
level as determined by the Committee. A Plan Member’s annual
base compensation for purposes of this Plan shall be his actual
base salary paid during the relevant Performance Period.
Any amount awarded to a Plan Member
under this Plan shall be referred to herein as a “Performance
Award.” If a Plan Member is designated to participate in the
Plan after the commencement of a Performance Period, such
individual’s Performance Award will be prorated based on his
period of participation in the Plan during such Performance
Period.
4. Performance
Periods.
Each Performance Period shall be the
twelve-month period commencing on January 1 and ending on the
following December 31.
5. Performance Award
Payment Date.
The Performance Award Payment Date
is the date on which any Performance Awards are paid to Plan
Members, which date shall not be more than 120 days following the
last day of each Performance Period. Before any Performance Award
is paid to a Covered Employee, the Committee shall certify in
writing that the criteria for receiving a Performance Award
pursuant to the terms of the Plan have been satisfied.
6. Performance Award
Determination.
For each Performance Period, the
Committee shall assign, in writing, with respect to each of the
performance factors of net income, safety, and quality, a threshold
goal
