Exhibit 10.2
EXHIBIT B
ROANOKE ELECTRIC STEEL
CORPORATION
ANNUAL MANAGEMENT INCENTIVE
PLAN
1 . Purpose . The Roanoke
Electric Steel Corporation Annual Management Incentive Plan (the
“Plan”) is intended to advance the interests of Roanoke
Electric Steel Corporation, a Virginia corporation (hereinafter the
“Company”), and increase shareholder value providing
annual incentive awards in order to motivate executive officers and
key employees of the Company and its Subsidiaries to perform to the
best of their abilities, to attain performance goals relating to
the performance, growth, profitability and success of the Company
and its Subsidiaries and to encourage such individuals to remain in
the employ of the Company or a Subsidiary, as applicable. The Plan
is intended to permit the grant of Awards that qualify as
performance-based compensation under Section 162(m) of the
Code.
2 . Definitions . In this
Plan document, unless the context clearly indicates otherwise,
words in the masculine gender shall be deemed to include a
reference to the female gender, any term used in the singular also
shall refer to the plural, and the following terms, when
capitalized, shall have the meaning set forth in this Section 2
unless a different meaning is plainly required by the
context:
(a) “Award” means, as to
any Performance Year, a potential cash benefit payable or cash
benefit paid to a person in accordance with the terms and
conditions of the Plan
(b) “Beneficiary” means
the person or persons designated in writing by the Grantee as his
beneficiary in respect of an Award; or, in the absence of an
effective designation or if the designated person or persons
predecease the Grantee, the Grantee’s Beneficiary shall be
the person or persons who acquire by bequest or inheritance the
Grantee’s rights in respect of an Award. In order to be
effective, a Grantee’s designation of a Beneficiary must be
on file with the Company before the Grantee’s death. Any such
designation may be revoked and a new designation substituted
therefor at any time before the Grantee’s death.
(c) “Board of Directors”
or “Board” means the Board of Directors of the
Company.
(d) “Change in Control”
means the occurrence of any of the following events:
(i) any Person becomes the
“beneficial owner” (as defined in Rule 13d-3 or Rule
13d-5 under the Securities Exchange Act of 1934, as amended (the
“Act”)), directly or indirectly, of 20% or more of the
combined voting power of the Company’s then outstanding
voting securities;
(ii) the Incumbent Board ceases for
any reason to constitute at least the majority of the Board;
provided, however, that any person becoming a director subsequent
to the effective date of the Plan (as set forth in Section 19)
whose election, or nomination for election by the Company’s
shareholders, was approved by a vote of at least 75% of the
directors comprising the Incumbent Board (either by a specific vote
or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to
such nomination) shall be, for purposes of this clause
(ii), considered as though such person were a member of the
Incumbent Board;
(iii) all or substantially all of
the assets of the Company are sold, transferred or conveyed and the
transferee of such assets is not controlled by the Company (control
meaning the ownership of more than 51% of the combined voting power
of such entity’s then outstanding voting securities);
or
(iv) the Company is reorganized,
merged or consolidated, and the shareholders of the Company
immediately prior to such reorganization, merger or consolidation
own in the aggregate 51% or less of the outstanding voting
securities of the surviving or resulting corporation or entity from
such reorganization, merger or consolidation.
Notwithstanding anything in the
foregoing to the contrary, no Change in Control shall be deemed to
have occurred with respect to a Participant by virtue of any
transaction (i) which results in the Participant or a group of
Persons which includes the Participant, acquiring, directly or
indirectly, 20% or more of the combined voting power of the
Company’s then outstanding voting securities; or (ii) which
results in the Company, any subsidiary or any profit-sharing plan,
employee stock ownership plan or employee benefit plan of the
Company or any subsidiary (or any trustee of or fiduciary with
respect to any such plan acting in such capacity) acquiring,
directly or indirectly, 20% or more of the combined voting power of
the Company’s then outstanding voting securities. For
purposes of this section, the term “Incumbent Board”
means the individuals who constitute the Board as of the effective
date of the Plan (as described in Section 19), and the term
“Person” has the meaning assigned to that term in
Sections 3(a)(9) and 13(d)(3) of the Act.
(e) “Code” means the
Internal Revenue Code of 1986, as amended from time to
time.
(f) “Committee” means
the Compensation Committee of the Board. Each member of the
Committee shall satisfy such applicable requirements as may be
established by the NASDAQ Stock Market. In addition, if any member
of the Compensation Committee does not qualify as an outside
director for purposes of Section 162(m) of the Code or as an
independent director for purposes of the requirements established
by the NASDAQ Stock Market, if applicable, the other members (if at
least two) shall be deemed the Compensation Committee for purposes
of the Plan.
(g) “Company” means
Roanoke Electric Steel Corporation.
(h) “Covered Executive”
means an individual who is determined by the Committee to be
reasonably likely to be a “covered employee” under
Section 162(m) of the Code as of the end of the Company’s
taxable year for which an Award to the individual will be
deductible and whose Award would exceed the deductibility limits
under Section 162(m) if such Award is not Performance-Based
Compensation.
(i) “Disability” or
“Disabled” means having a total and permanent
disability as defined in Section 22(e) (3) of the Code.
(j) “Grantee” means an
executive officer or key employee of the Company or a Subsidiary to
whom an Award has been granted under the Plan.
(k) “Performance
Objective” means the goal or goals identified by the
Committee that will result in an Award if the target for the
Performance Year is satisfied.
(l) “Performance Year”
means the fiscal year beginning November 1 and ending October
31.
(m) “Performance-Based
Compensation” means compensation that is intended to qualify
as “performance-based compensation” under Section
162(m) of the Code and the regulations thereunder.
(n) “Plan” means this
Roanoke Electric Steel Corporation Annual Management Incentive
Plan, as set forth herein and as amended from time to
time.
(o) “Retirement” means
retirement as defined under the Roanoke Electric Steel Corporation
Employees’ Profit Sharing Plan, as amended from time to
time.
(p) “Shares” means
shares of Common Stock of the Company.
(q) “Subsidiary” means a
corporation, association, partnership, limited liability company,
joint venture, business trust, organization, or business of which
the Company directly or indirectly through one or more
intermediaries owns at least 50% of the outstanding capital stock
(or other shares of beneficial interest) entitled to vote generally
in the election of directors or other managers of the
entity.
3. Administration
.
(a) The Plan shall be administered
by the Committee. The Committee shall have all the powers vested in
it by the terms of the Plan, such powers to include authority
(within the limitations described herein) to select the persons to
be granted Awards under the Plan, to determine the time when Awards
will be granted, to determine whether performance objectives and
other conditions for earning Awards have been met, to determine
whether Awards will be paid at the end of the Performance Year or
deferred to a later date, and to determine whether an Award or
payment of an Award should be reduced or eliminated; provided,
however, that the Committee does not have the power to increase the
amount otherwise payable under an Award to a Covered Executive The
Committee shall have the authority to construe and interpret the
Plan (except as otherwise provided herein) and any agreement or
other document relating to any Award under the Plan, and shall
exercise all other duties and powers conferred on it by the Plan,
or which are incidental or ancillary thereto. The Committee is
authorized, subject to the remaining provisions of the Plan, to
establish such rules and regulations as it deems necessary for the
proper administration of the Plan and to make such determinations
and interpretations and to take such action in connection with the
Plan and any Awards granted hereunder as it deems necessary or
advisable. All determinations and interpretations made by the
Committee shall be binding and conclusive on all persons
participating in the Plan and their legal
representatives.
(b) The Committee may not delegate
to any individual the authority to make determinations concerning
that individual’s own Awards, or the Awards of any Covered
Executive. Except as provided in the preceding sentence, the
Committee may delegate to one or more of its members authority (i)
to select key employees to receive Awards under the Plan, and (ii)
to make all other determinations in respect of such Awards. In
addition, the Committee may delegate to an officer or officers of
the Company such administrative duties as it deems advisable and
such officer(s) may have the authority to execute and distribute
agreements or other documents evidencing Awards granted by the
Committee under the Plan, to maintain records relating to Awards
and to take such other actions as the Committee may specify,
provided that in no case shall any such officer or officer(s) be
authorized to grant Awards under the Plan. References herein to the
Committee shall include any delegate described under this paragraph
and any action taken by such delegate within the scope of his
delegation shall be deemed for all purposes to have been taken by
the Committee, except where the context or the regulations under
Code Section 162(m) otherwise require.
(c) The Committee, or any person to
whom it has delegated duties as described herein, may employ one or
more persons to render advice with respect to any responsibility
the Committee or such person may have under the Plan (including
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 in the engagement of such counsel,
consultant, or agent shall be paid by the Company.
(d) A majority of the members of the
Committee shall constitute a quorum, and all actions of the
Committee shall be taken by a majority of the members present. Any
action may be taken by a written instrument signed by all of the
members, and any action so taken shall be fully effective as if it
had been taken at a meeting.
4. E
