Exhibit 10.5
AK STEEL
CORPORATION
LONG-TERM PERFORMANCE
PLAN
(as amended and restated as of
January 16, 2003)
Introduction
The name of this plan is the AK
Steel Corporation Long-Term Performance Plan (the
“Plan”). AK Steel Corporation (the
“Company”) adopted the Plan in 1995 to enhance the
Company’s focus on its long-term performance relative to that
of its principal competitors in the flat rolled steel industry (the
“Peer Group”) and to reward certain employees for
enhancing the profitability of the Company over extended periods of
time. 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.
Each elected officer of the Company
shall be eligible to participate in this Plan, and certain other
management 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”) at the time the Plan Member is selected for
participation in this Plan. A Plan Member’s Target Percentage
may be changed from time to time at the discretion of the Committee
or, in the case of Plan Members who are not elected officers, by
the EMC. Notwithstanding the foregoing, the Committee shall assign
or change, in writing, the Target 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 is the maximum percentage of his annual base salary (as
defined below) that can be achieved with respect to any Performance
Period for which he is selected for participation. A Plan
Member’s Target Percentage is multiplied by his annual base
salary for the final year of the Performance Period for which the
calculation of a Performance Award is made in order to arrive at
his Bonus Opportunity Target Amount (“Target Amount”).
A Plan Member’s annual base salary for purposes of this Plan
shall be determined by multiplying his monthly rate of base salary
for the last month of the relevant Performance Period by twelve
(12).
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, his
Performance Award, if any, will be prorated based on his period of
participation in the Plan during such Performance
Period.
4. Performance
Periods.
Each Performance Period shall
consist of a period of three consecutive calendar years. The first
such three-year period commenced on January 1, 1995 and ended on
December 31, 1997.
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 the final year 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 this Plan have been
satisfied.
6. Peer
Group.
The Peer Group shall consist of
Bethlehem Steel Corporation, National Steel Corporation, Nucor
Corporation, and U.S. Steel Group. The Peer Group may be modified
from time to time at the discretion of the Committee; however, to
the extent any modification of the Peer Group impacts the
Performance Award to be received by a Covered Employee, such
modification will be made within the time period prescribed by
Section 162(m) of the Code and related regulations.
7. Performance Award
Determination.
Any Performance Award to be paid to
a Plan Member with respect to a Performance Period shall be the
amount determined by multiplying his Target Amount under paragraph
3 above by the sum of the applicable percentages for the completed
Performance Period and for the final year of the completed
Performance Period as set forth in t
