Framework for the 2010 Annual Executive Bonus Plan

1.  

The bonus pool is calculated as the sum of 8% of “modified EBITDA” and 2% of “modified free cash flow” (using the same definitions as used in the 2009 plan). A detailed description of modified EBITDA and modified free cash flow are set forth in Exhibit A.

2.  

All calculations under the Plan are to be based upon the results for the calendar year 2010.

3.  

The results of acquisitions will be included in making the calculations of modified EBITDA and modified free cash flow.

4.  

“One time costs” will be excluded in making the calculations of modified EBITDA and modified free cash flow. The definition of one-time costs is set forth in Exhibit B.  The Compensation Committee may elect, in its judgment, not to exclude certain one-time costs that otherwise would be excluded as a result of the definition.

5.  

The bonus pool is capped at $20,000,000.

 

2.

Payouts will be made in accordance with the deferral plan set forth in Exhibit C.

 

3.

Deferred payments will be made in Restricted Stock Units (RSUs) that proportionally vest over three years but are not delivered until the end of the third year. (The departure of either will not increase the amount available to the other.)

 

1.

Additional voluntary deferral will be available for the portion of the bonus not subject to mandatory deferral, as provided in Exhibit D.

 

1.

The accrual of any bonus under the bonus pool is subject to the Company meeting a threshold performance requirement that the fraction determined by dividing modified EBITDA (including the appropriate bonus accrual) for the year ending December 31, 2010 by average Committed Capital exceed 0.2. A detailed description of “Committed Capital” is set forth in Exhibit A.  Average Committed Capital will be calculated as the 13 point monthly average of Committed Capital for calendar year 2010, starting with Committed Capital as of 12/31/2009. Committed Capital will exclude the impact of one-time costs defined in Exhibit B. The Compensation Committee may elect, in its judgment, not to exclude certain one-time costs that otherwise would be excluded as a result of the definition.

 

2.

The Committee may exercise negative judgment as noted below in Framework for 2010 relative performance measures attached as Exhibit E.

 

3.

The Plan includes a claw back provision which provides that if the Board determines that there was executive misconduct in a prior period in the preparation of the financial results for that period, the Compensation Committee will determine whether the restatement was material and was a result of executive misconduct in preparation of the financial information, and if so, to what extent “covered payments” should be returned to the company to the extent that such payments were overstated as a result of the change in financial condition. Covered payments include cash incentives paid to the executive found to have actively participated in the executive misconduct for performance during the fiscal year(s).

·  

Restructuring charges

·  

Non-recurring items

·  

Impairment charges

·  

Start-up or shut down expenses for plants or business lines

·  

Transaction expenses related to acquisitions or dispositions

·  

Inventory write-offs

·  

Penalties or charges related to prior periods

·  

Litigation awards, charges or professional fees related to litigation or threatened litigation

·  

Fixed asset write-offs

i.  

$ 0 - $ 2 mm    0% deferred

ii.  

$ 2 - $ 5 mm  20% deferred

iii.  

$ 5 - $ 8 mm 30% deferred

iv.  

$ 8- $ 10 mm 40% deferred

v.  

$ 10 - $12 mm 50% deferred

vi.  

$ 12 - $15 mm 75% deferred

vii.  

 $15 - $20 mm 100% deferred

 

a.

Limit deferral to 50% of salary

 

b.

Limit deferral to 50% of Bonus up to $1,000,000.  Deferral must be below the mandatory deferral limits.

 

c.

If deferred into RSUs, then 20% match is granted in form of RSUs

 

d.

Deferred compensation that is deferred into RSUs is fully vested. 

 

e.

Matching RSUs vest over 3 years (33% a year) but are delivered in year 3

 

f.

Subsequent deferrals are offered subject to Code Section 409A rules (minimum 5 year re-deferral)

 

g.

If deferred into mutual funds, the deferral will be funded.

 

h.

Standard termination provisions apply to the matched RSUs.  These would include: Change in control, termination for other than cause, death, disability and retirement.  Voluntary termination would not trigger vesting of the matched RSUs. For the avoidance of doubt, this provision applies only to the 20% match and not to the base amount deferred, which shall be payable even if terminated for cause.

1.  

Peer Group

2.  

Reference Group

3.  

S&P Small Cap Index

4.  

S&P Metals Index

5.  

The Committee may add other “groups” or delete “groups” at any time, including after the plan period, but before a final decision on bonuses is made.

1.  

TSR

2.  

ROE

3.  

Net operating profit after tax (NOPAT)/Committed Capital (CC)

4.  

EBITDA growth

5.  

NOPAT growth

6.  

The Committee may add other performance measures or delete performance measures at any time, including after the plan period, but before a final decision on bonuses is made.

7.  

The Committee may adjust any measure in its judgment to insure a valid comparison.