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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. El
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