Exhibit 10.4
AK STEEL HOLDING
CORPORATION
STOCK INCENTIVE
PLAN
(as amended and restated as of
January 16, 2003)
Article 1. Amendment and
Restatement, Purpose, and Duration.
1.1 Amendment and
Restatement of the Plan. AK Steel Holding
Corporation, a Delaware corporation (the “Company”),
previously established an incentive compensation plan known as the
“AK Steel Holding Corporation Stock Incentive Plan”
(the “Plan”). The Plan is hereby amended and restated
as set forth in this document effective as of January 16, 2003. The
Plan permits the grant of Nonqualified Stock Options and awards of
Restricted Stock to directors, executive officers and key employees
of the Company.
1.2 Purpose of the
Plan. The purpose of the Plan
is to promote the success and enhance the value of the Company by
linking the personal interests of Participants to those of the
Company’s shareholders, and by providing Participants with an
incentive for outstanding performance. The Plan is further intended
to enhance the Company’s ability to motivate, attract, and
retain the services of Participants upon whose judgment, interest,
and special effort the successful conduct of its operation is
largely dependent.
1.3 Duration of the
Plan. The Plan shall remain in
effect until all Shares subject to it shall have been purchased or
acquired or are no longer available for Awards according to the
Plan’s provisions, subject to the right of the Board to
terminate the Plan at any time pursuant to Article 10 herein. In no
event may an Award be granted under the Plan on or after December
31, 2011. Termination of the Plan shall not affect the rights of
any person under an outstanding Award Agreement unless otherwise
specifically provided in such Award Agreement.
Article
2. Definitions.
Whenever used in the Plan, the following terms
shall have the meanings set forth below and, when the meaning is
intended, the initial letter of the word is capitalized:
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(a)
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“Award” means either or both of an
Option Award or a Restricted Stock Award.
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(b)
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“Award
Agreement” means either or both of an Option Award Agreement
or a Restricted Stock Award Agreement. A Participant is bound by
the terms of an Award Agreement and this Plan by reason of
accepting the benefits of the Award.
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(c)
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“Beneficial Owner” shall have the
meaning ascribed to such term in Rule l3d-3 of the General Rules
and Regulations under the Exchange Act.
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(d)
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“Beneficiary” means the person or
persons named by a Participant to succeed to the
Participant’s rights under any then unexpired Award
Agreements. Each such designation shall: (i) revoke all prior
designations by the same Participant; (ii) be in a form acceptable
to the Committee; and (iii) be effective only when delivered to the
Committee by the Participant in writing and during the
Participant’s lifetime. No beneficiary shall be entitled to
any notice of any change in a designation of beneficiary. In
the absence of any such designation, the Participant’s estate
shall be the beneficiary.
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(e)
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“Board” means the Board of Directors
of the Company.
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(f)
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“Cause” means a willful engaging in
gross misconduct materially and demonstrably injurious to the
Company or any subsidiary or affiliate thereof, including AK Steel
Corporation. “Willful” means an act or omission in bad
faith and without reasonable belief that such act or omission was
in or not opposed to the best interests of the Company or any
subsidiary or affiliate thereof, including AK Steel Corporation.
“Cause” shall be determined in good faith by the
Committee.
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(g)
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“Change
in Control” shall be deemed to have occurred if:
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(i)
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any person (other than a trustee
or other fiduciary holding securities under an employee benefit
plan in which employees of the Company participate) becomes the
Beneficial Owner, directly or
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indirectly, of securities of the
Company representing forty percent (40%) or more of the combined
voting power of the Company’s then outstanding voting
securities; or
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(ii)
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during any
period of two (2) consecutive years individuals who at the
beginning of such period constitute the Board, including for this
purpose any new Director of the Company (other than a Director
designated by a person who has entered into an agreement with the
Company to effect a transaction described in clauses (i) or (iii)
of this Subsection (g)) whose election by the Board or nomination
for election by the shareholders of the Company was approved by a
vote of at least two-thirds (2/3) of the Directors then still in
office who either were Directors at the beginning of the period or
whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the
Board; or
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(iii)
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the
shareholders of the Company approve a merger or consolidation of
the Company with any other corporation (other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least fifty
percent (50%) of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately
after such merger or consolidation) or the shareholders of the
Company approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.
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(h)
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“Code” means the Internal Revenue
Code of 1986, as amended from time to time.
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(i)
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“Committee” means the committee, as
specified in Article 3, appointed by the Board to administer the
Plan.
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(j)
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“Company” means AK Steel Holding
Corporation, a Delaware corporation, or any successor thereto, as
provided in Article 13 herein.
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(k)
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“Director” means any individual who
is a member of the Board and who is not an Employee.
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(l)
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“Disability” means a physical or
mental condition which, in the judgment of the Committee, renders a
Director unable to serve or an Employee unable to perform the
duties of his position with the Company or, in the case of an
Employee, the duties of another available position with the Company
for which the Employee is suited by education, background and
training. Any Employee found to be qualified for disability
benefits under AK Steel Holding Corporation’s long term
disability plan or by the Federal Social Security Administration
will be considered to be disabled under this Plan, but
qualification for such benefits shall not be required as evidence
of disability hereunder.
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(m)
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“Employee” means any common law
employee of the Company or any subsidiary or affiliate thereof,
including AK Steel Corporation. A Director is not an Employee
solely by reason of his position as a Director and, unless
otherwise employed by the Company, shall not be considered to be an
Employee under this Plan.
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(n)
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“Exchange
Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
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(o)
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“Fair
Market Value” shall mean:
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(i)
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if the Shares
are traded on an established United States national stock exchange
or in the United States over-the-counter market with prices
reported on the NASDAQ, the average of the highest and lowest sales
prices for Shares on the relevant date (or, if there were no sales
of Shares on such date, the weighted average of the mean between
the highest and lowest sale prices for Shares on the nearest
preceding trading day on which there were sales of Shares);
and
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(ii)
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if the Shares
are not traded as described in clause (i), the fair market value of
such Shares on the relevant date, as determined in good faith by
the Board.
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(p)
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“Insider” shall mean an Employee who
is, on the relevant date, an executive officer or ten percent (10%)
Beneficial Owner of the Company, as defined under Section 16 of the
Exchange Act, or a Director.
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(q)
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“Nonqualified Stock Option” or
“Option” means an option to purchase Shares from the
Company at a price established in an Option Award Agreement. No
incentive stock option within the meaning of Code Section 422 may
be granted under this Plan.
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(r)
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“Option
Award” means, individually or collectively, a grant under
this Plan of a Nonqualified Stock Option.
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(s)
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“Option
Award Agreement” means an agreement setting forth the terms
and provisions applicable to an Option Award granted to a
Participant under this Plan.
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(t)
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“Option
Price” means the price at which a Share may be purchased by a
Participant under the terms of an Option Award
Agreement.
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(u)
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“Par
Value” shall mean the designated par value of one
Share.
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(v)
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“Participant” means any Director or
Employee who possesses an unexpired Award granted under the
Plan.
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(w)
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“Restricted Stock” means Shares
granted to a Participant subject to certain restrictions on the
Participant’s right to sell, transfer, assign, pledge,
encumber or otherwise alienate or hypothecate the Shares except in
accordance with the terms of this Plan.
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(x)
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“Restricted Stock Award” means,
individually or collectively, a grant under this Plan of Shares of
Restricted Stock.
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(y)
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“Restricted Stock Award Agreement”
means an agreement setting forth the terms and provisions
applicable to a Restricted Stock Award of Shares under this
Plan.
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(z)
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“Retirement” shall mean termination
of employment with the Company and any affiliate of the Company
with eligibility to immediately commence to receive a pension under
the Company’s noncontributory defined benefit pension plan as
in effect on the Employee’s termination date. For a
Participant who is not participating in such plan, Retirement shall
mean any termination of employment with the Company which would
have entitled such Participant to be eligible to immediately
commence to receive a pension under the Company’s
non-contributory defined benefit pension plan had the Participant
been a participant.
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(aa)
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“Shares” means the shares of voting
common stock of the Company.
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Article
3. Administration.
3.1 The
Committee. The Plan shall be
administered by the Compensation Committee of the Board, or by any
other Committee appointed by the Board consisting of not less than
two (2) Directors. The members of the Committee shall be appointed
from time-to-time by, and shall serve at the sole discretion of,
the Board. The Committee shall be comprised solely of Directors
who: (a) are “non-employee directors” as defined in
Rule 16b-3 promulgated under the Exchange Act, (b) are
“independent directors” as defined in the rules and
regulations of the New York Stock Exchange, and (c) are
“outside directors” within the meaning of Section
162(m) of the Code and related regulations.
The Committee may employ such legal
or other counsel, consultants and agents as it may deem desirable
for the administration of the Plan and may rely upon any opinion or
computation received from any such counsel, consultant or agent.
Expenses incurred by the Committee in the engagement of such
counsel, consultant or agent
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shall be paid by the Company. No member or
former member of the Board or the Committee shall be liable for any
action or determination made in good faith with respect to the Plan
or any Option Award or Restricted Stock Award granted
hereunder.
3.2 Authority of the
Committee. The Committee shall have
full power, subject to the provisions of this Plan, except as
limited by law or by the Articles of Incorporation or Bylaws of the
Company: (a) to determine the size and types of Awards (except as
to Awards to Directors which shall be limited to the size and shall
be subject to the conditions expressly permitted by this Plan); (b)
to determine the terms and conditions of each Award Agreement in a
manner consistent with the Plan; (c) to construe and interpret the
Plan and any agreement or instrument entered into under the Plan;
(d) to establish, amend, or waive rules and regulations for the
Plan’s administration; and, (e) subject to the provisions of
Article 10 herein, to amend the terms and conditions of any
outstanding Award Agreement to the extent such terms and conditions
are within the discretion of the Committee as provided in the Plan.
Further, the Committee shall make all other determinations which
may be necessary or advisable for the administration of the Plan.
The Committee may delegate its authority hereunder to the extent
permitted by law. In no event shall a Director who is a Participant
vote in any matter related solely to such Director’s Award
under this Plan.
3.3 Decisions
Binding. All determinations and
decisions made by the Committee pursuant to the provisions of the
Plan and all related orders or resolutions of the Board shall be
final, conclusive and binding on all persons, including the
Company, its shareholders, Directors, Employees, Participants, and
their estates, beneficiaries or assignees. In all cases, Awards to
Directors shall be subject to the same terms, conditions and
interpretations applicable generally to Awards to non-Director
Participants.
3.4 Arbitration.
Each
Participant who is granted an Award hereunder agrees as a condition
of the Award to submit to binding arbitration any dispute regarding
the Plan or any Award made under the Plan, including by way of
illustration and not limitation, any decision of the Committee or
any action of the Company respecting the Plan. Such arbitration
shall be held in accordance with the rules of the American
Arbitration Association before an arbitrator selected by the
Company and acceptable to the Participant. If the Participant
objects to the appointment of the arbitrator selected by the
Company, and the Company does not appoint an arbitrator acceptable
to the Participant, then the Company and the Participant shall each
select an arbitrator and those two arbitrators shall collectively
appoint a third arbitrator who shall alone hear and resolve the
dispute. The Company and the Participant shall share equally the
cost of arbitration. No Company agreement of indemnity, whether
under the Articles of Incorporation, the By-Laws or otherwise, and
no insurance purchased by the Company shall apply to pay or
reimburse any Participant’s costs of arbitration.
Article 4. Shares
Subject to Grant Under the Plan.
4.1 Number
of Shares. Subject to adjustment as
provided in this Section and in Section 4.3, an aggregate of
16,000,000 Shares shall be available for the grant of Option Awards
and Restricted Stock Awards under the Plan (hereinafter called the
“Share Pool”); provided, however, that no Employee may
be granted Awards under the Plan in any calendar year with respect
to more than 600,000 Shares. The Committee, in its sole discretion,
shall determine the appropriate division of the Share Pool as
between Option Awards and Restricted Stock Awards. Shares issued
upon exercise of any Award may be either authorized and previously
unissued Shares or reacquired Shares.
The following rules will apply for
purposes of the determination of the number of Shares available for
grant under the Plan:
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(a)
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the grant of an
Award to an Employee shall reduce the Shares available in the Share
Pool for grant under the Plan by the number of Shares subject to
the Award; and
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(b)
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to the extent
that an Option is settled in cash rather than by the delivery of
Shares, the Share Pool shall be reduced by the number of Shares
represented by the cash settlement of the Option (subject to the
limitation set forth in Section 4.2 herein).
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4.2 Lapsed
Awards. If any Award granted
under this Plan is canceled, terminates, expires or lapses for any
reason, any Shares then subject to such Award again shall be
available for grant under the Plan and shall return to the Share
Pool.
4.3 Adjustments in
Authorized Shares. In the event of any
merger, reorganization, consolidation, recapitalization,
separation, liquidation, stock dividend, split-up, Share
combination, or other change in the corporate structure of the
Company affecting the Shares, an appropriate adjustment shall be
made in the number and class of Shares which may be delivered under
the Plan, and in the number and class of and/or price of Shares
subject to any then unexercised and outstanding Awards, as
determined to be appropriate and equitable by the Committee, in its
sole discretion, to prevent dilution or enlargement of rights. The
number of Shares subject to any Award shall always be a whole
number.
4.4 Rights
as a Shareholder. No person shall have any
rights as a shareholder with respect to Shares subject to an Option
Award until the date the Company receives full payment of the
Option price, including any sum due for withholding pursuant to
Section 6.6. A person who has Restricted Shares shall have the
rights of an owner of Shares, except to the extent those rights are
expressly limited by then applicable restrictions on transfer
contained in this Plan and the Restricted Stock Award
Agreement.
Article 5. Eligibility
and Participation.
5.1 Eligibility.
Directors
who are not Employees, officers who are Employees, and Employees
who are not officers but who are recommended by the Chairman of the
Board shall be eligible to be Participants in this Plan.
5.2 Participation.
A person who
is eligible to be a Participant shall become a Participant upon
receipt of an Award in accordance with the terms of this
Plan.
Article 6. Stock
Options.
6.1 Grant
of Options.
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(a)
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Options may be
granted to an eligible Employee at any time and from time to time
as shall be determined by and in the sole discretion of the
Committee, subject to the provisions of Section 4.1.
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(b)
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Options with
respect to ten thousand (10,000) Shares shall be granted to each
Director who is not employed by the Company on the date of his or
her election to the Board, subject to the following ter
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