Form Of Performance Grant Agreement



 Exhibit 10.4 
  
 ROANOKE ELECTRIC STEEL CORPORATION 
 2005 STOCK INCENTIVE PLAN 
  
 PERFORMANCE GRANT 
 AGREEMENT 
  

					
	AWARDED TO	 	 AWARD DATE
  
 January 28, 2005
	 	PERFORMANCE SHARES
			
	SOCIAL SECURITY NUMBER	 	PERFORMANCE PERIOD	 	 

  
 The Compensation
Committee of the Board of Directors of Roanoke Electric Steel Corporation (the “Company”) grants to you (“the Participant”) pursuant to the Company’s 2005 Stock Incentive Plan (the “Plan”) a Performance Grant of
Performance Shares pursuant to Section 10 of the Plan. Each Performance Share that becomes vested under the terms of this Performance Grant shall entitle you to receive one share of common stock of the Company (“Company Stock”), except as
otherwise provided below. The Performance Shares granted under this Performance Agreement (“Agreement”) are subject to the performance conditions and other restrictions set forth below. 
  
 This Agreement incorporates the terms of the Plan, and in the case of any
conflict between the Plan and this Agreement, the terms of the Plan shall control. All terms not otherwise defined in this Agreement shall have the meaning assigned to them in the Plan. The terms of the Performance Grant are as follows: 

 

	1.	Vesting and Amount of Performance Shares. If the Participant remains in continuous employment with the Company or any of its subsidiaries from the Award Date to last day of
the Performance Period, a percentage of the Performance Shares specified above (the “Base Number”) shall become vested as follows: 

  

	 	(a)	The number of Performance Shares which shall become vested Performance Shares shall be determined under the following schedule by multiplying the Base Number by the percentage that
corresponds to the Company’s Relative Average Return on Invested Capital for the Performance Period, and rounding to the nearest whole share: 

  


			
	 Company’s Relative Average
 Return on Invested Capital
 (expressed as a percentile of
 that of the Comparison Group)

	 	 Percentage of Base Number of
 Performance Shares that
 Become Vested


	 95th
	 	200%
	 90th
	 	175%
	 85th
	 	150%
	 80th
	 	125%
	 75th
	 	100%
	 70th
	 	  90%
	 65th
	 	  80%
	 60th
	 	  70%
	 55th
	 	  60%
	 50th
	 	  50%
	 45th
	 	  25%
	 Below 45th
	 	    0%









	 	(b)	If the Participant dies, becomes Disabled or Retires while employed with the Company or any of its subsidiaries, but prior to the end of the Performance Period, the Participant
shall be deemed to have continued in employment with the Company and its subsidiaries through the end of the Performance Period. In the case of death or Disability, the Participant shall be vested in the same number of Performance Shares in which
the Participant would have become vested had the Participant actually remained in continuous employment until the end of the Performance Period. Where the Participant Retires, the Participant shall be vested in Performance Shares equal to the
product of: 

  
 (1) the number of
Performance Shares in which the Participant would have become vested had the Participant actually remained in continuous employment until the end of the Performance Period, and 
  
 (2) a fraction, the numerator of which is the number of days which the Participant had worked during the
Performance Period and the denominator of which is the total number of days in the Performance Period. 
  
 For purposes of this Paragraph 1, “Retires” means the Participant’s termination of employment after (A) having attained age 55 and
completing 10 years of service or (B) having attained age 62. 
  

	 	(c)	Notwithstanding the foregoing, no more than 25% of the Participant’s Base Number shall become vested Performance Shares if the Company’s Average Return on Invested Capital
for the Performance Period is less than zero. 

  

	 	(d)	The target award payment shall be shares of Company Stock equal to 100% of the Participant’s Base Number and the maximum award payment shall be shares of Company Stock equal to
200% of the Participant’s Base Number. 

  

	2.	Forfeiture of Performance Shares. Any Performance Shares that do not become vested pursuant to Paragraph 1 will be forfeited. 

  

	3.	Settlement of Performance Shares. Vested Performance Shares will be settled as soon as practicable after the Compensation Committee has determined and certified in writing
the Company’s Relative Average Return on Invested Capital for the Performance Period, but in no event later than the date that is two and one-half (2 1⁄2) months following the last day of the Performance Period. Subject to Paragraph 8
(pertaining to the withholding of taxes), for each vested Performance Share settled pursuant to this Paragraph 3, the Company shall issue one share of Company Stock and cause to be delivered to the Participant one or more unlegended,
freely-transferable stock certificates in respect of such shares issued upon settlement of the vested Performance Shares. 

  

	4.	Nontransferability of the Performance Shares. The Performance Shares shall not be transferable by the Participant by means of sale, assignment, exchange, encumbrance, pledge,
hedge or otherwise. Company Stock issued in settlement of the Participant’s vested Performance Shares shall be freely-transferable. 

  

	5.	Rights as a Shareholder. The Participant shall not be entitled to any rights of a shareholder with respect to the Performance Shares. No adjustment to the Participant’s
Performance Shares shall be made nor shall any credit be provided to reflect any cash dividends declared or paid with respect to Company Stock during the Performance Period. 

  

	6.	Adjustment in the Event of Change in Stock; Change in Control. In the event of any change in corporate capitalization, such as a stock split or a corporate transaction, such
as any merger, consolidation, separation, including a spin-off, any reorganization (whether or not such reorganization comes within the definition of such term in Section 368 of the Internal Revenue Code of 1986 (the “Code”)) or any
partial or complete liquidation of the Company, the number of Performance Shares shall be equitably adjusted by the Committee as it may deem appropriate in its sole discretion. The determination of the Committee regarding any such adjustment will be
final and conclusive. 

  

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 In addition, in the event of a Change in Control, 100% of the Participant’s Base Number of
Performance Shares shall become vested Performance Shares. The Company shall settle such vested Performance Shares by making a single lump sum cash payment to the Participant equal to the aggregate Fair Market Value (determined as of the last
trading day immediately preceding the Change in Control date) of shares of Company Stock equal in number to the Participant’s vested Performance Shares. Such payment will be made within 15 days following the Change in Control date (the
“Change in Control Payment Date”). However, if Section 409A of the Code applies to this Agreement and payment would not be permitted under Section 409A of the Code at the Change in Control Payment Date, the payment will be made (i) within
15 days following the Participant’s separation from service with the Company or its subsidiaries (or in accordance with the six month delay in payment rule for key employees of Section 409A of the Code, to the extent that rule is applicable),
or (ii) within 15 days following the end of the Performance Period if the Participant has not separated from service with the Company or its subsidiaries.. 
  
 If during the Performance Period the Participant’s primary employment is with a subsidiary of the Company, the term Change of Control shall include
an event described in Section 2(d)(iii) or Section 2(d)(iv) of the Plan which occurs with respect to such subsidiary while the subsidiary is the Participant’s primary employer. 
  

	6A.	Payment of Transfer Taxes, Fees and Other Expenses. The Company will pay any and all original issue taxes and stock transfer taxes that may be imposed on the issuance of
shares of Company Stock received by the Participant in connection with settlement of the Participant’s vested Performance Shares, together with any and all other fees and expenses necessarily incurred by the Company in connection therewith.


  

	7.	Other Restrictions. 

  

	 	(a)	The Performance Shares shall be subject to the requirement that, if at any time the Committee shall determine that (i) the listing, registration or qualification of the shares of
Company Stock subject or related thereto upon any securities exchange or under any state or federal law, or (ii) the consent or approval of any government regulatory body, then in any such event, the grant of Performance Shares shall not be
effective unless such listing, registration, qualification, consent or approval shall have been effected or obtained free of any conditions not acceptable to the Committee. 

  

	 	(b)	The Participant acknowledges that the Participant is subject to the Company’s policies regarding compliance with securities laws, including but not limited to its Trading
Policy (as in effect from time to time and any successor policies), and, pursuant to these policies, if the Participant is on the Company’s insider list, the Participant shall be required to obtain pre-clearance from the Company’s General
Counsel prior to purchasing or selling any of the Company’s securities, including any shares issued upon settlement of vested Performance Shares, and may be prohibited from selling such shares other than during an open trading window. The
Participant further acknowledges that, in its discretion, the Company may prohibit the Participant from selling such shares even during an open trading window if the Company has concerns over the potential for insider trading.


  

	8.	Taxes and Withholding. No later than the date as of which an amount first becomes includible in the gross income of the Participant for federal, state, local or foreign
income tax purposes with respect to any Performance Shares, the Participant shall pay to the Company, or make arrangements satisfactory to the Company regarding the payment of, all federal, state, local and foreign taxes that are required by
applicable laws and regulations to be withheld with respect to such amount. The obligations of the Company under this Agreement shall be conditioned on compliance by the Participant with this Paragraph 8, and the Company shall, to the extent
permitted by law, have the right to deduct any such taxes from any payment otherwise due to the Participant, including deducting such amount from the delivery of shares of Company Stock issued upon settlement of the Performance Shares that gives
rise to the withholding requirement. 

  

 3 









	9.	Notices. All notices and other communications under this Agreement shall be in writing and shall be given by hand delivery to the other party or by facsimile, overnight
courier, or registered or certified mail, return receipt requested, postage prepaid, addressed as follows: 

  

			
	 If to the Participant:
	 	 If to the Company:

		
	 	 	 Roanoke Electric Steel Corporation

	 	 	 PO Box 13948

	 	 	 Roanoke, VA 24038

	 	 	 Attention: General Counsel
 /Corporate Secretary

	 	 	 Facsimile: (540) 983-7284


  
 or to such other
address or facsimile number as any party shall have furnished to the other in writing in accordance with this Paragraph 9. Notice and communications shall be effective when actually received by the addressee. Notwithstanding the foregoing, the
Participant consents to electronic delivery of documents required to be delivered by the Company under the securities laws. 
  

	10.	Effect of Agreement. Except as otherwise provided hereunder, this Agreement shall be binding upon and shall inure to the benefit of any successor or successors of the
Company, and the term “Company” shall include any successor company. 

  

	11.	Laws Applicable to Construction. The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the Commonwealth of Virginia without
reference to principles of conflict of laws, as applied to contracts executed in and performed wholly within the Commonwealth of Virginia. In addition to the terms and conditions set forth in this Agreement, the Performance Shares are subject to the
terms and conditions of the Plan, which is hereby incorporated by reference. 

  

	12.	Severability. The invalidity or enforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.


  

	13.	Conflicts and Interpretation. In the event of any conflict between this Agreement and the Plan, the Plan shall control. In the event of any ambiguity in this Agreement, or
any matters as to which this Agreement is silent, the Plan shall govern including, without limitation, the provisions thereof pursuant to which the Committee has the power, among others, to (i) interpret the Plan, (ii) prescribe, amend and rescind
rules and regulations relating to the Plan, and (iii) make all other determinations deemed necessary or advisable for the administration of the Plan. 

  

	14.	Amendment. Except as otherwise provided in Section 16 of the Plan, this Agreement may not be modified, amended or waived except by an instrument in writing signed by both
parties hereto. The waiver by either party of compliance with any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by such party of a provision of this
Agreement. 

  

	15.	Headings. The headings of paragraphs herein are included solely for convenience of reference and shall not affect the meaning or interpretation of any of the provisions of
this Agreement. 

  

	16.	Counterparts. This Agreement may be executed in counterparts, which together shall constitute one and the same original. 

  

	17.	No Right to Continued Employment. Neither the Plan nor this Agreement confers upon you any right to continue as an employee of the Company or of any subsidiary of the
Company, or limits in any respect the right of the Company or any subsidiary of the Company to terminate your employment, or modify the terms of such employment. This Agreement does not guarantee your employment with the Company or with any
subsidiary of the Company during the period in which it is in effect 

  

 4 









	18.	Definitions. As used in this Agreement, the following capitalized terms have the meanings indicated: 

  

	 	(a)	“Average Invested Capital” means, for a Performance Year, the average of the Invested Capital measured as of the beginning of the first day and the end of the last day of
the Performance Year. 

  

	 	(b)	“Average Return on Invested Capital” means the sum of the Return on Invested Capital for each Performance Year of a company which ends with or within the
Performance Period, divided by the number of years in the Performance Period. 

  

	 	(c)	“Award Date” means that date on which Performance Shares are awarded to the Participant. For purposes of this Agreement, the Award Date is January 28, 2005.


  

	 	(d)	“Comparison Group” means those companies in the custom peer group approved by the Committee and listed on Schedule A to this Agreement. Adjustments will not be made
to the performance of the Comparison Group to reflect composition changes during the Performance Period. 

  

	 	(e)	“Invested Capital” means, as of any date, shareholders’ equity, plus long-term debt (including the current portion of such debt. 

  

	 	(f)	“Net Income” means the income before extraordinary items and discontinued operations. 

  

	 	(g)	“Performance Period” means the one-year period beginning on November 1, 2004 and ending on October 31, 2005. 

  

	 	(h)	“Performance Share” means a right to receive a share of Company Stock, subject to the conditions and restrictions described in this Agreement. 

  

	 	(i)	“Performance Year” means, for the Company, its fiscal year. For companies in the Comparison Group, “Performance Year” means the 12-month period set forth on
Schedule A to this Agreement under the column titled “Performance Year”. 

  

	 	(j)	“Relative Average Return on Invested Capital” means the Company’s Average Return on Invested Capital relative to the Average Return on Invested Capital for the
companies comprising the Comparison Group, expressed as a percentile ranking. 

  

	 	(k)	“Return on Invested Capital” means for a company’s Performance Year, Net Income divided by Average Invested Capital. 

  
 IN WITNESS WHEREOF, the Company has caused this Agreement to be signed, as of
the Award Date shown above. 
  

			
	 ROANOKE ELECTRIC STEEL CORPORATION

		
	 By:
	 	  




  
 I hereby
acknowledge receipt of this Agreement, a copy of the 2005 Stock Incentive Plan and a copy of the Plan’s prospectus. 
  

							
	 Signature:
	 	  

	 	 	 	             Date:
                    

	 	 	 «Name»
	 	 	 	 

  

 5 








 SCHEDULE A 
  
 ROANOKE ELECTRIC STEEL CORPORATION 
  
 2005 STOCK INCENTIVE PLAN 
  
 PERFORMANCE GRANT AGREEMENT 
  
 CUSTOM PEER GROUP 
 (S&P GICS, Sub-Industry
Steel, US Companies, US Primary Issue) 
 (GICS Code 15104050)* 
  

									
	 	  	 Company

	  	 Ticker
 Symbol

	  	 Last Day of
 Fiscal Year

	  	 Performance Year


	1	  	 ACME METALS INC
	  	 AMIIQ
	  	 December 31
	  	 October 1 – September 30

	2	  	 AK STEEL HOLDING CORP
	  	 AKS
	  	 December 31
	  	 October 1 – September 30

	3	  	 ALLEGHENY TECHNOLOGIES INC
	  	 ATI
	  	 December 31
	  	 October 1 – September 30

	4	  	 ATCHISON CASTING CORP
	  	 AHNCQ
	  	 June 30
	  	 October 1 – September 30

	5	  	 BAYOU STEEL CORP -CL A
	  	 BYUA
	  	 September 30
	  	 October 1 – September 30

	6	  	 CARPENTER TECHNOLOGY CORP
	  	 CRS
	  	 June 30
	  	 October 1 – September 30

	7	  	 CASTLE (A M) & CO
	  	 CAS
	  	 December 31
	  	 October 1 –September 30

	8	  	 CENTRAL STEEL & WIRE CO
	  	 CSTW
	  	 December 31
	  	 October 1 – September 30

	9	  	 CLEVELAND-CLIFFS INC
	  	 CLF
	  	 December 31
	  	 October 1 – September 30

	10	  	 COLD METAL PRODUCTS INC
	  	 CMPI
	  	 March 31
	  	 October 1 – September 30

	11	  	 COMMERCIAL METALS
	  	 CMC
	  	 August 31
	  	 September 1 – August 31

	12	  	 FRIEDMAN INDUSTRIES
	  	 FRD
	  	 March 31
	  	 October 1 – September 30

	13	  	 GENEVA STEEL HLDGS CORP
	  	 GNVHQ
	  	 September 30
	  	 October 1 – September 30

	14	  	 GERDAU AMERISTEEL CORP
	  	 GNA
	  	 December 31
	  	 October 1 – September 30

	15	  	 GIBRALTAR INDUSTRIES INC
	  	 ROCK
	  	 December 31
	  	 October 1 – September 30

	16	  	 GRAFTECH INTERNATIONAL LTD
	  	 GTI
	  	 December 31
	  	 October 1 – September 30

	17	  	 GREAT NORTHERN IRON ORE PPTY
	  	 GNI
	  	 December 31
	  	 October 1 – September 30

	18	  	 HAYNES INTERNATIONAL INC
	  	 HYNI
	  	 September 30
	  	 October 1 – September 30

	19	  	 HUNTCO INC -CL A
	  	 3HCOIQ
	  	 December 31
	  	 October 1 – September 30

	20	  	 INTERNATIONAL STEEL GRP INC
	  	 ISG
	  	 December 31
	  	 October 1 – September 30

	21	  	 KENTUCKY ELECTRIC STEEL INC
	  	 KESIQ
	  	 September 29**
	  	 October 1 – September 30**

	22	  	 KEYSTONE CONS INDUSTRIES INC
	  	 KESNQ
	  	 December 31
	  	 October 1 – September 30

	23	  	 LTV CORP
	  	 3LTVCQ
	  	 December 31
	  	 October 1 – September 30

	24	  	 MARK HOLDINGS INC
	  	 MHDG
	  	 June 30
	  	 October 1 – September 30

	25	  	 MESABI TRUST
	  	 MSB
	  	 January 31
	  	 November 1 – October 31

	26	  	 METAL MANAGEMENT INC
	  	 MTLM
	  	 March 31
	  	 October 1 – September 30

	27	  	 METALS USA INC
	  	 MUSA
	  	 December 31
	  	 October 1 – September 30

	28	  	 MMI PRODUCTS INC
	  	 9701B
	  	 January 3**
	  	 October 1 – September 30**

	29	  	 MORTON INDUSTRIAL GRP INC
	  	 3MGRP
	  	 December 31
	  	 October 1 – September 30

	30	  	 NATIONAL STEEL CORP -CL B
	  	 3NSTLQ
	  	 December 31
	  	 October 1 – September 30

	31	  	 NEENAH FOUNDRY CO
	  	 0271B
	  	 September 30
	  	 October 1 – September 30

	32	  	 NIAGARA CORP
	  	 NGCD
	  	 December 31
	  	 October 1 – September 30

	33	  	 NN INC
	  	 NNBR
	  	 December 31
	  	 October 1 – September 30

	34	  	 NORTHWEST PIPE CO
	  	 NWPX
	  	 December 31
	  	 October 1 – September 30

	35	  	 NUCOR CORP
	  	 NUE
	  	 December 31
	  	 October 1 – September 30

	36	  	 OLYMPIC STEEL INC
	  	 ZEUS
	  	 December 31
	  	 October 1 – September 30

	37	  	 OREGON STEEL MILLS INC
	  	 OS
	  	 December 31
	  	 October 1 – September 30

	38	  	 PAV REPUBLIC INC-REDH
	  	 RSBQ
	  	 December 31
	  	 October 1 – September 30

	39	  	 QUANEX CORP
	  	 NX
	  	 October 31
	  	 November 1 – October 31










									
	 	  	 Company

	  	 Ticker
Symbol

	  	 Last Day of
 Fiscal Year

	  	 Performance Year


	40	  	 ROUGE INDUSTRIES INC
	  	 RGIDQ
	  	 December 31
	  	 October 1 – September 30

	41	  	 RYERSON TULL INC
	  	 RT
	  	 December 31
	  	 October 1 – September 30

	42	  	 SCHNITZER STEEL INDS -CL A
	  	 SCHN
	  	 August 31
	  	 September 1 – August 31

	43	  	 STEEL DYNAMICS INC
	  	 STLD
	  	 December 31
	  	 October 1 – September 30

	44	  	 STEEL TECHNOLOGIES
	  	 STTX
	  	 September 30
	  	 October 1 – September 30

	45	  	 SYNALLOY CORP
	  	 SYNL
	  	 January 3**
	  	 October 1 – September 30**

	46	  	 THERMODYNETICS INC
	  	 3TDYN
	  	 March 31
	  	 October 1 – September 30

	47	  	 UNITED STATES STEEL CORP
	  	 X
	  	 December 31
	  	 October 1 – September 30

	48	  	 UNVL STAINLESS & ALLOY PRODS
	  	 USAP
	  	 December 31
	  	 October 1 – September 30

	49	  	 WEBCO INDUSTRIES INC
	  	 WEBO
	  	 July 31
	  	 November 1 – October 31

	50	  	 WEIRTON STEEL CORP
	  	 WRTLQ
	  	 December 31
	  	 October 1 – September 30

	51	  	 WHEELING PITTSBURGH CORP
	  	 WPSC
	  	 December 31
	  	 October 1 – September 30

	52	  	 WHX CORP
	  	 WHX
	  	 December 31
	  	 October 1 – September 30

	53	  	 WILLIAMS INDUSTRIES INC
	  	 WMSI
	  	 July 31
	  	 November 1 – October 31

	54	  	 WORTHINGTON INDUSTRIES
	  	 WOR
	  	 May 31
	  	 September 1 – August 31




	 *	As of January 27, 2005, with the exception of Gerdau Ameristeel Corp., which as of such date is not included in this index. 


	**	These companies have 52/53 week fiscal years, so the actual beginning and ending date of each fiscal year, and, thus, each quarter may vary from year to year. The actual beginning
and ending dates to be included in the column will be adjusted, as necessary from year-to-year.