Exhibit 10.4
Long-Term Incentive
Management Objectives and Formula

     
Management Objective:
  The applicable Management Objective is average economic value added (“EVA”)
for 2009, 2010 and 2011 (“Average 2009-2011 EVA”). For each such year, EVA will
equal (1) pre-tax operating income for such year (“PTOI”) less (2) a percentage
of net assets as of the end of the immediately preceding year (“Net Assets”).
In determining EVA for a particular year:
 
   
 
  (1) Net Assets will equal total assets less total liabilities, subject to
adjustments to:
 
   
 
 
•    Remove the Company’s primary aluminum segment;
 
   
 
 
•    Remove discontinued operations;
 
   
 
 
•    Eliminate fresh start adjustments for PP&E value and intangible assets,
including the write-up of pre-emergence goodwill;
 
   
 
 
•    Eliminate assets and liabilities of voluntary employee beneficiary
associations;
 
   
 
 
•    Exclude financing items;
 
   
 
 
•    Exclude capital expenditures in progress;
 
   
 
 
•    Add capitalized value of long-term leases;
 
   
 
 
•    Add prorated value of capital projects and acquisitions larger than 1% of
prior year Net Assets;
 
   
 
 
•    Exclude any deferred income tax asset value;
 
   
 
 
•    Exclude mark-to-market assets or liabilities associated with Fabricated
Products; and
 
   
 
 
•    Address other items as recommended by the Company’s Chief Executive Officer
and approved by our Committee; and
 
   
 
  (2) PTOI will be adjusted to:
 
   
 
 
•    Exclude LIFO adjustments;
 
   
 
 
•    Exclude mark to market and lower of cost or market adjustments at the
corporate level on metal inventory on hand;
 
   
 
 
•    Add back depreciation associated with step-down in property, plant and
equipment resulting from the implementation of fresh start accounting;

 

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•    Amortize the following non-recurring activities over 36 months if the value
exceeds one percent of Net Assets:
 
   
 
 
•    Restructuring charges;
 
   
 
 
•    Gains or losses resulting from asset dispositions;
 
   
 
 
•    Labor stoppage costs; and
 
   
 
 
•    Asset impairment charges; and
 
   
 
 
•    Address other items as recommended by the Company’s Chief Executive Officer
and approved by our Committee.
 
   
 
  The 2009 — 2011 average annual EVA target is an amount specified by the
Committee. The payout factor is calculated by dividing the average annual EVA of
each year of the three year performance period by the average annual target
 
   
 
  The threshold for vesting performance shares is an annual average EVA of zero.
Payout at the target level (a payout factor of 1) is 50% of the performance
shares, 100% of the performance shares are earned at 2X the average annual EVA
target.
 
   
Determination of Number of
  The number of Performance Shares which are earned will be determined as
follows:
Performance Shares
Which Are Earned:
 

•    Following the end of each of 2009, 2010 and 2011, the Committee will
certify EVA for such year based on the Company’s financial statements.
 
   
 
 
•    Following the end of 2011, the Committee will also certify (1) the Average
2009-2011 EVA and (2) Average 2009-2011 EVA as a percentage of Target Average
2009-2011 EVA (the “Payout Multiplier”).
 
   
 
 
•    The number of Performance Shares which are earned will equal the product
(rounded down to the nearest whole number) of (1) one-half of the number of
Performance Shares granted hereunder (the “Target Performance Shares”) and
(2) the Payout Multiplier; provided, however, such number will not exceed the
number of Performance Shares granted hereunder.
 
   
 
  The Committee will certify the Average 2009-2011 EVA and the Payout Multiplier
not later than March 15, 2012.
 
   
Administrative Provisions:
  Additional administrative provisions are reflected in the terms of the
applicable grant documents.