Document:

Exhibit 10.13

 

EURAMAX HOLDINGS, INC.

 

2011 Phantom Stock Plan

 

April 15, 2011

 

 

EURAMAX HOLDINGS, INC.

 

2011 Phantom Stock Plan

 

SECTION 1

 

GENERAL

 

1.1. Purpose. The Euramax Holdings 2011 Phantom Stock Plan (the “Plan”) has been established by Euramax Holdings, Inc., a Delaware Corporation (the “Company”), to link Participants’ interests with those of the Company’s shareholders through compensation that is linked to the equity value of the Company; and thereby promote the long-term financial interest of the Company and its Subsidiaries, including the growth in value of the Company’s equity and enhancement of long-term shareholder return.

 

1.2. Participation. Subject to the terms and conditions of the Plan, the Committee shall determine and designate, from time to time, from among the Eligible Employees, those persons who will be granted one or more Awards under the Plan, and thereby become “Participants” in the Plan.

 

1.3. Operation, Administration, and Definitions. The operation and administration of the Plan, including the Awards made under the Plan, shall be subject to the provisions of Section 3 (relating to operation and administration). Capitalized terms in the Plan shall be defined as set forth in the Plan (including the definition provisions of Section 8 of the Plan).

 

SECTION 2

 

PHANTOM SHARES

 

2.1. Definition of Phantom Share.

 

A “Phantom Share” is a hypothetical unit of value that entitles the Participant to receive a payment (in cash, shares of stock or other property, as provided in the Plan or in an Award Agreement) equal in value to the Fair Market Value (as defined in Section 8(e) below) of a Phantom Share at the time of payout or when the payout amount is determined.

 

2.2. Number and Form of Awards. Each Participant will receive only one Award under the Plan, unless the Committee determines, in its sole discretion, that additional Awards 

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should be made to a Participant.  Each Award will consist of a specified number of Phantom Shares, which number need not be the same for each participant.

 

2.3. Minimum Fair Market Value.   Except for adjustments to Awards as described in Section 3.2(d) and notwithstanding anything to the contrary contained herein, no Award shall be payable to any Participant unless the Fair Market Value (as defined in Section 8(e) herein) of a Phantom Share is at least $425.

 

2.4.  Vesting.  Awards shall be subject to vesting requirements as determined by the Committee and set forth in individual Award Agreements.

 

2.5. Settlement of Awards. The settlement of Phantom Share Awards shall be made in accordance with such terms and conditions and during such periods as may be established by the Committee, as set forth in individual Award Agreements.  Settlement of Phantom Share Awards will be made in cash, unless an alternative form of payment is determined by the Committee.

 

SECTION 3

 

OPERATION AND ADMINISTRATION

 

3.1. Effective Date. Subject to the approval of the Board, the Plan shall be effective as of April 1, 2011 (the “Effective Date”).  No new Awards may be made under the Plan after the five (5) year anniversary of the Effective Date; however, the Plan shall remain in effect as long as any Awards under it are outstanding.

 

3.2. Shares Subject to Plan. The number of Phantom Shares for which Awards may be granted under the Plan shall be subject to the following:

 

(a) Subject to the following provisions of this subsection 3.2, the maximum number of Phantom Shares that may be awarded to Participants and their beneficiaries under the Plan shall be equal to 5,000 Phantom Shares.

 

(b) To the extent any Phantom Shares covered by an Award are forfeited, such Phantom Shares shall not be deemed to have been awarded for purposes of determining the maximum number of Phantom Shares available for award under the Plan.

 

(c) The maximum number of Phantom Shares that may be covered by Awards granted to any one individual pursuant to Section 2 shall be 300 Phantom Shares.

 

(d) In the event of a corporate transaction involving the equity of the Company (including, without limitation, any stock issuance, stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination or exchange of shares), the Committee shall make an

 

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appropriate adjustment to the Awards to prevent dilution or enlargement of rights immediately resulting from such transaction, subject to approval by the Board.  Action by the Committee may include: (i) adjustment of the number of Phantom Shares which may be delivered under the Plan; (ii) adjustment of the number of Phantom Shares subject to outstanding Awards; (iii) adjustment of the calculation of the Fair Market Value under Section 8(e) herein; and (iv) any other adjustments that the Committee determines to be equitable.  Upon approval of the Committee’s adjustments by the Board, the adjustments made by the Committee shall be final and binding upon the Participants under the Plan and under any outstanding Award Agreements.  The Committee shall give prompt notice to all Participants of any adjustment pursuant to this Section 3.2(d).

 

3.3. General Restrictions. Notwithstanding any other provision of the Plan, the Company shall have no liability to make any other distribution of benefits under the Plan unless such delivery or distribution (i) would comply with all applicable laws, and the applicable requirements of any securities exchange or similar entity, and (ii) would not violate any provisions of any material agreements to which the Company is a party.

 

3.4. Tax Withholding. All distributions under the Plan are subject to withholding of all applicable taxes, and the Committee may condition the delivery of benefits under the Plan on satisfaction of the applicable withholding obligations. The Committee, in its discretion, and subject to such requirements as the Committee may impose prior to the occurrence of such withholding, may permit such withholding obligations to be satisfied through cash payment by the Participant, or through the surrender of amounts to which the Participant is otherwise entitled under the Plan.

 

3.5. Payments.Except in the event a Listing has occurred, in which case the Awards may be settled in shares of stock or cash, in the sole discretion of the Committee. Awards will be settled in cash. Any Award settlement may be subject to such conditions, restrictions and contingencies as the Committee shall determine; provided, however, that such conditions, restrictions and contingencies are set forth in the applicable Award Agreement to which such conditions, restrictions and contingencies apply.

 

3.6. Transferability. Except as otherwise provided by the Committee, Awards under the Plan are not transferable except as designated by the Participant by will or by the laws of descent and distribution.

 

3.7. Agreement with Company. An Award under the Plan shall be subject to such terms and conditions, not inconsistent with the Plan, as the Committee shall, in its sole discretion, prescribe. The terms and conditions of any Award to any Participant shall be reflected in such form of written document as is determined by the Committee (an “Award Agreement”). A copy of such document shall be provided to the Participant, and the Committee may, but need not require that the Participant shall sign a copy of such document. Such document is referred to in the Plan as an Award Agreement regardless of whether any Participant signature is required. An Award Agreement may also contain any terms, covenants, and restrictions the Committee shall deem necessary, including without

 

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limitation, provisions relating to the ownership of inventions and non-disclosure, non-recruitment, non-solicitation, non-competition, and other restrictive covenants.  No Award shall be valid unless evidenced by an Award Agreement.

 

3.8. Action by Company or Subsidiary. Any action required or permitted to be taken by the Company or any Subsidiary shall be by resolution of its Board of Directors, or by action of one or more members of the Board (including a committee of the Board) who are duly authorized to act for the Board, or (except to the extent prohibited by applicable law) by a duly authorized officer of such company, or by any other persons or persons approved by the Board.

 

3.9. Gender and Number. Where the context admits, words in any gender shall include any other gender, words in the singular shall include the plural and the plural shall include the singular.

 

3.10. Limitation of Implied Rights.

 

(a) Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire any right in or title to any assets, funds or property of the Company or any Subsidiary whatsoever, including, without limitation, any specific funds, assets, or other property which the Company or any Subsidiary, in their sole discretion, may set aside in anticipation of a liability under the Plan. A Participant shall have only a contractual right to the amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.

 

(b) The Plan does not constitute a contract of employment, and selection as a Participant will not give any participating employee the right to be retained in the employ of the Company or any Subsidiary, nor any right or claim to any benefit under the Plan, unless such right or claim has specifically accrued under the terms of the Plan and the Award Agreement. Except as otherwise provided in the Plan, no Award under the Plan shall confer upon the holder thereof any rights as a shareholder of the Company unless Awards are settled in shares of stock, and until the date on which the holder thereof fulfills all conditions for receipt of such rights.

 

3.11. Section 409A.  It is intended that the payments and benefits provided under the Plan and any Award shall either be exempt from the application of, or comply with, the requirements of Section 409A of the Internal Revenue Code.  The Plan and all Award Agreements shall be construed in a manner that effects such intent.  Nevertheless, the tax treatment of the benefits provided under the Plan or any Award is not warranted or guaranteed.  Neither the Company, its Affiliates nor their respective directors, officers, employees or advisers (other than in his or her capacity as a Participant) shall be held liable for any taxes, interest, penalties or other monetary amounts owed by any Participant or other taxpayer as a result of the Plan or any Award.

 

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SECTION 4

 

CHANGE IN CONTROL

 

Subject to the provisions of paragraphs 2.3 (relating to the minimum Fair Market Value of Phantom Shares required for a payout) and 3.2(d) (relating to the adjustment of shares), and except as otherwise provided in the Plan or the Award Agreement reflecting the applicable Award, upon the occurrence of a Change in Control, all outstanding Phantom Shares shall become fully vested, and the Participant will receive in settlement of each outstanding Phantom Share within 30 days after such Change in Control a cash payment equal to the Fair Market Value of a Phantom Share determined as of the Change in Control.

 

SECTION 5

 

COMMITTEE

 

5.1. Administration. The authority to control and manage the operation and administration of the Plan shall be vested in a committee (the “Committee”) in accordance with this Section 5. The Committee shall initially be the Compensation Committee of the Company.  If the Committee does not exist, or for any other reason determined by the Board, the Board may change the membership of the Committee and take any action under the Plan that would otherwise be the responsibility of the Committee.

 

5.2. Powers of Committee. The Committee’s administration of the Plan shall be subject to the following:

 

(a) Subject to the provisions of the Plan, the Committee will have the authority and discretion to select from among the Eligible Employees those persons who shall receive Awards, to determine the time or times of receipt, to determine the number of Phantom Shares covered by the Awards, to establish the terms, conditions, vesting, performance criteria, restrictions, form and timing of payout,  and other provisions of such Awards, and (subject to the restrictions imposed by Section 6) to terminate the Plan.

 

(b) To the extent that the Committee determines that the restrictions imposed by the Plan preclude the achievement of the material purposes of the Awards in jurisdictions outside the United States, the Committee will have the authority and discretion to modify those restrictions as the Committee determines to be necessary or appropriate to conform to applicable requirements or practices of jurisdictions outside of the United States.

 

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(c) The Committee will have the authority and discretion to interpret the Plan, to establish, amend, and rescind any rules and regulations relating to the Plan, to determine the terms and provisions of any Award Agreement made pursuant to the Plan, and to make all other determinations that may be necessary or advisable for the administration of the Plan.

 

(d) Any interpretation of the Plan by the Committee and any decision made by it under the Plan (subject to approval of the Board where required by the Plan) is final and binding on all persons.

 

(e) In controlling and managing the operation and administration of the Plan, the Committee shall take action in a manner that conforms to the articles and shareholder agreements of the Company, and applicable corporate law.

 

5.3. Delegation by Committee. Except to the extent prohibited by applicable law, the Committee may allocate all or any portion of its responsibilities and powers to any one or more of its members and may delegate all or any part of its responsibilities and powers to any person or persons selected by it. Any such allocation or delegation may be revoked by the Committee at any time.

 

SECTION 6

 

AMENDMENT AND TERMINATION

 

The Board may, at any time, amend or terminate the Plan, provided that no amendment or termination may, in the absence of written consent to the change by the affected Participant (or, if the Participant is not then living, the affected beneficiary), adversely affect the rights of any Participant or beneficiary under any Award granted under the Plan prior to the date such amendment is adopted by the Board.

 

SECTION 7

 

GOVERNING LAW

 

The Plan shall be construed and its provisions enforced and administered in accordance with the laws of the State of Georgia and the United States of America.

 

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SECTION 8

 

DEFINED TERMS

 

In addition to the other definitions contained herein, the following definitions shall apply:

 

(a) Award. The term “Award” shall mean any award of Phantom Shares granted under the Plan.

 

(b) Board. The term “Board” shall mean the Board of Directors of the Company.

 

(c) Change in Control. Unless deemed to be otherwise by the Board, a “Change in Control” shall be deemed to have occurred if (i) the Company shall be merged or consolidated with another corporation and as a result of such merger or consolidation less than 50% of the outstanding voting securities of the surviving or resulting corporation shall be owned in the aggregate by the former shareholders of the Company, other than affiliates (within the meaning of the Securities Exchange Act of 1934 (the “1934 Act”)) of any party to such merger of consolidation, (ii) the Company shall sell at least 50% of its assets by value in a single transaction or in a series of transactions to another corporation which is not a wholly owned subsidiary of the Company, or (iii) a person, within the meaning of Section 3(a)(9) or of Section 13(d)(3) (as in effect on the date hereof) of the Securities Exchange Act of 1934, shall acquire 50% or more of the outstanding voting securities of the Company (whether directly, indirectly, beneficially or of record).  For purposes hereof, ownership of voting securities shall take into account and shall include ownership as determined by applying the provisions of Rule 13d-3(d)(1)(i) (as in effect on the date hereof) pursuant to the Securities and Exchange Act of 1934.

 

(d) Eligible Employee. The term “Eligible Employee” shall mean any key executive or other management employee of the Company or a Subsidiary, except for the Company’s Chief Executive Officer. An Award may be granted to an employee, in connection with hiring, retention or otherwise, prior to the date the employee first performs services for the Company or the Subsidiaries, provided that such Awards shall not become vested prior to the date the employee first performs such services.

 

(e) Fair Market Value.   The “Fair Market Value” of a Phantom Share shall be determined by the following rules:

 

(i)                                     If no Change in Control or Listing has occurred, Fair Market Value shall be equal to the equity value of the Company divided by the total number of shares of the Company’s common stock outstanding, where the equity value shall be determined by multiplying the Company’s earnings before interest, taxes, depreciation and amortization (“EBITDA”) for the most recent four fiscal quarters ended on or prior to the Measurement Date (upon the audit or SAS 100 review of such four quarters or fiscal year, as appropriate) by seven and one-half (7.5), and (1) reducing that total by the total

 

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third-party bank debt outstanding as of the end of such four fiscal quarter period and (2) adding any cash held by the Company as the end of such four fiscal quarter period, unless an alternative method is determined in good faith by the Committee and approved by the Board.

 

(ii)                                  If a Listing has occurred, Fair Market Value as of a particular date shall be equal to the closing sales price of the Company’s common stock on the principal exchange on which the stock is listed on such date or, in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported.

 

(iii)                               If a Change in Control has occurred, Fair Market Value shall be equal to the value of the consideration to be received for one share of the Company’s common stock in connection with the Change in Control.

 

(f) Listing.  “Listing” shall mean the listing of all or any part of any class of the equity stock of the Company on a securities exchange.

 

(g)  Measurement Date.  “Measurement Date” shall mean the date as of which the Phantom Shares are valued for purposes of determining the amount payable to the Participant under an Award.

 

(h) Subsidiaries. The term “Subsidiary” means any company during any period in which it is a “subsidiary corporation” (as that term is defined in the Internal Revenue Code of 1986, section 424(f), as amended) with respect to the Company.

 

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BENEFICIARY DESIGNATION FORM

 

EURAMAX HOLDINGS, INC.

2011 PHANTOM STOCK PLAN

 

I wish to designate the following person(s) as my beneficiary(ies) to receive my Phantom Shares, if any, under the Euramax Holdings, Inc. 2011 Phantom Stock Plan (the “Plan”) in the event of my death.  I reserve the right to change this designation with the understanding that this designation, and any change thereof, will be effective only upon deliver to Euramax Holdings, Inc.  The right to settlement of my Phantom Shares under the Plan, if any, will be transferred to my primary beneficiaries who survive me, and to my secondary beneficiaries who survive me only if none of my primary beneficiaries survive me.

 

1.  PRIMARY BENEFICIARY

 

	
Name of Beneficiary
    	
 
    	
Percentage
    	
 
    	
Relationship
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

2.  SECONDARY BENEFICIARY

 

	
Name of Beneficiary
    	
 
    	
Percentage
    	
 
    	
Relationship
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    

 

I acknowledge that execution of this form and delivery thereof to Euramax Holdings, Inc. revokes all prior beneficiary designations I have made with respect to my outstanding awards under the Plan.

 

 

	
 
    	
 
    
	
(Participant’s   signature) (Date)
    	
 
    

 

9Exhibit 10.14

 

Euramax International, Inc.

 

Euramax Incentive Compensation Plan

 

February 4, 2010

 

Amended January 14, 2011

 

 

Euramax International, Inc.

 

Euramax Incentive Compensation Plan

 

	
 
    	
 
    	
Page
    
	
1.
    	
Purpose
    	
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2.
    	
Definitions 
    	
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3.
    	
Administration
    	
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4.
    	
Awards
    	
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(a)
    	
Performance Objectives, Target Awards and   Award Levels
    	
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(b)
    	
Determination of Awards
    	
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(c)
    	
Payment of Final Awards
    	
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5.
    	
General Provisions
    	
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(a)
    	
Taxes
    	
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(b)
    	
Limitations on Rights Conferred under Plan   and Beneficiaries
    	
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(c)
    	
Unfunded Status of Awards; Creation of   Trusts
    	
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(d)
    	
Governing Law; Arbitration
    	
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(e)
    	
Amendment and Termination of Plan and   Awards
    	
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(f)
    	
Effective Date
    	
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6.
    	
Change in Control
    	
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(a)
    	
Payment of Awards
    	
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(b)
    	
Other Plan Provisions Unaffected
    	
9
    

 

 

Euramax International, Inc.

 

EURAMAX INCENTIVE COMPENSATION PLAN

 

1.                                       Purpose. The purpose of this Euramax Incentive Compensation Plan (the “Plan”) is to assist Euramax International, Inc. (the “Company”) and its subsidiaries in motivating high performance employees who occupy key positions and contribute to the growth and annual profitability of the Company and its subsidiaries through the award of annual incentives.

 

2.                                       Definitions. For purposes of the Plan, the following terms shall be defined as set forth below:

 

(a)                                  “Award” means the fixed amount or percentage of Salary payable to a Participant as determined pursuant to Section 4.

 

(b)                                 “Award Level” means the percentage of a fixed amount of Salary payable to a Participant based on the level of Performance Objectives achievement as determined pursuant to Section 4(a).

 

(c)                                  “Beneficiary” with respect to Senior Executive Participants means the person, persons, trust or trusts which have been designated by the Senior Executive Participant in his or her most recent written beneficiary designation filed with the Company to receive the benefits specified under this Plan in the event of the Senior Executive Participant’s death; Beneficiary with respect to all other Participants shall mean the person, persons, trust or trusts which have been designated by the Participant in his or her most recent beneficiary designation to receive the benefits specified under the Company’s Group Life Insurance Plan. In either case, if there is no designated Beneficiary or surviving designated Beneficiary, then Beneficiary shall mean the person, persons, trust or trusts entitled by will or the laws of descent and distribution to receive such benefits.

 

(d)                                 “Board” means the Company’s Board of the Directors.

 

(e)                                  “Business Development” means the aggregate net revenues, or net margin, as determined for each Operating Unit individually and the Company as a whole, which relate to new products or new customers that are identified as Business Development targets for the applicable Performance Year.

 

(e)                                  “Cause” means (i) the willful and continued failure by the Participant to perform substantially his/her duties with the Company (other than any such failure resulting from the Participant’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Participant by the CEO or the President of the Company which specifically identifies the manner in which the Participant has not substantially performed his duties, (ii) the willful engagement by the Participant in conduct which is not authorized by the Board of Directors of the Company or within the normal course of the Participant’s business decisions and is known by the Participant to be

 

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materially detrimental to the best interests of the Company or any of its subsidiaries, or (iii) the willful engagement by the Participant in illegal conduct or any act of serious dishonesty which adversely affects, or, in the reasonable estimation of the Board of Directors of the Company, could in the future adversely affect, the value, reliability or performance of the Participant to the Company in a material manner. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Participant in good faith and in the best interests of the Company. Notwithstanding the foregoing, a Participant shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Participant written notice specifying the basis of the “Cause”. In such event, the Participant will be given an opportunity, together with his counsel, to be heard before the Board so that the Board may determine if, the Participant was guilty of the conduct set forth above in (i), (ii) or (iii) of this subparagraph, in which event the determination of the Board shall be binding on the Participant

 

(f)                                    “CEO” means the Chief Executive Officer of the Company.

 

(g)                                 “Change in Control” shall occur if and when any person or entity which is not as of the date hereof a shareholder or affiliate of a shareholder of the Company (i) becomes a record or beneficial owner, directly or indirectly, of securities of the Company representing more than 50% of the combined voting power of the Company’s then outstanding securities (whether by merger, consolidation, recapitalization, reorganization, purchase of outstanding share capital or otherwise) or (ii) purchases all or substantially all of the consolidated assets of the Company, in each case, which purchase has been approved by the Board and the holders of a majority of the outstanding ordinary shares of the Company voting together as a single class.

 

(h)                                 “Committee” means the Board of the Company or such committee as may be designated by the Board to administer the Plan.

 

(i)                                     “Company” means Euramax International, Inc., a company incorporated in the State of Delaware or any successor corporation.

 

(j)                                     “Days Sales in Working Capital” means, as to the Company, or as to the relevant Operating Unit, the sum of trade accounts receivable (including notes receivable resulting from a customer’s issuance of a note in exchange for amounts owed under trade terms and net of appropriate reserves), inventory (net of appropriate reserves), and accounts payable (vouchered and unvouchered), as shown on each of the 13 (December to December) unaudited monthly balance sheets of the Company (or of the relevant Operating Unit) prepared in the ordinary course by the Company for a Performance Year divided by the Company’s or Operating Units’ last twelve months net sales, multiplied by 364, in a 52 week year and by 371 in a 53 week year.

 

(k)                                  “EBITDA” means, as to the Company, the Company’s and its subsidiaries’

 

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operating earnings on a consolidated basis, or as to an Operating Unit, that Operating Unit’s operating earnings for the Performance Year, determined based on generally accepted accounting principles, consistently applied, before deducting depreciation and amortization based upon the annual financial statements certified by the independent certified public accountants regularly employed by the Company to audit its books and records.

 

(l)                                     “Eligible Employee” means each officer and other employees of the Company or its subsidiaries who are deemed to impact the Company’s annual results, as determined by the Committee.

 

(m)                               “Executive Participant” means each Participant who has been designated as such by the CEO with Committee approval and who is not a Senior Executive Participant.

 

(n)                                 “Operating Unit” means a subsidiary, business division or operating unit of the Company, designated as such by the CEO, for which a Participant works.

 

(o)                                 “Participant” means Senior Executive Participants, Executive Participants and all other Eligible Employees designated to participate in the Plan for a designated Performance Year. Any additions to the Participant list in effect upon the adoption of this Plan must be approved by the CEO.

 

(p)                                 “Plan” means this Euramax Incentive Compensation Plan.

 

(q)                                 “Performance Objectives” means the measure of performance specified by the Committee (or the CEO, if assigned by the Committee) in accordance with Section 4(a), the achievement of which will trigger the vesting of Awards.

 

(r)                                    “Performance Year” means the fiscal year performance during all or part of which a Participant’s entitlement to receive payment of an Award is based.

 

(s)                                  “Permanent Disability” means a Participant is unable to perform, by reason of physical or mental incapacity, his employment duties to the Company, for a period of one hundred twenty (120) consecutive days or a total period of two hundred ten (210) days in any three hundred sixty (360) day period.

 

(t)                                    “Salary” means a participant’s annual base salary rate as in effect on September 30 of each Performance Year or, in the event of a Participant’s termination during a Performance Year, on the date of termination.

 

(u)                                 “Senior Executive Participants” mean the CEO, CFO and any Vice President of the Company.

 

(v)                                 “Target Award” means a fixed amount or specified percentage of a Participant’s Salary payable based upon 100% achievement of Performance Objectives, and as described more fully in Exhibit A.

 

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3.                                       Administration.

 

(a)                                  Authority of the Committee. The Plan shall be administered by the Committee. The Committee shall have full and final authority, in each case subject to and consistent with the provisions of the Plan, to select Participants, grant Awards, determine the type, number, and other terms and conditions of, and all other matters relating to, Awards, prescribe Award agreements (which need not be identical for each Participant) and rules and regulations for the administration of the Plan, construe and interpret the Plan and Award agreements and correct defects, supply omissions, or reconcile inconsistencies therein, and to make all other decisions and determinations as the Committee may deem necessary or advisable for the administration of the Plan.

 

(b)                                 Manner of Exercise of Committee Authority. The Committee shall exercise sole and exclusive discretion on any matter relating to a Participant. Any action of the Committee shall be final, conclusive, and binding on all persons, including the Company, the Operating Units, Participants, persons claiming rights from or through a Participant, and stockholders. The express grant of any specific power to the Committee, and the taking of any action by the Committee, shall not be construed as limiting any power or authority of the Committee. The Committee may delegate to officers or managers of the Company or any subsidiary, or committees thereof, the authority, subject to such terms as the Committee shall determine, to perform administrative functions and to perform such other functions as the Committee may determine.

 

(c)                                  Limitation of Liability. The Committee may appoint agents to assist it in administering the Plan. The Committee and each member thereof shall be entitled to, in good faith, rely or act upon any report or other information furnished to him by any officer or employee of the Company or a subsidiary, the Company’s independent certified public accountants, or any other agent assisting in the administration of the Plan. Members of the Committee and any officer or employee of the Company or a subsidiary acting at the direction or on behalf of the Committee shall not be personally liable for any action or determination taken or made in good faith with respect to the Plan, and shall, to the extent permitted by law, be fully indemnified and protected by the Company with respect to any such action or determination.

 

4.                                       Awards.

 

(a)                                  Performance Objectives, Target Awards and Award Levels.

 

(i)                                     Prior to February 15 of each Performance Year (or as promptly as practicable thereafter), the Committee (or the CEO, if assigned by the Committee) shall establish Performance Objectives for each Participant for such Performance Year.  The Committee (or the CEO, if assigned by the Committee) may, from time to time, change the Performance Objectives to specify different measures of performance of the Company and

 

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its subsidiaries on a consolidated basis, or of each Operating Unit within the Company, measures of individual performance of the Participant, or such other objective (and combinations of objectives) the achievement of which is expected to benefit the Company and its stockholders. A single Performance Objective may be specified for all Participants, or separate Performance Objectives may be specified for different groups of Participants or for individual Participants.

 

(ii)                                  Prior to February 15 of each Performance Year (or as promptly as practicable thereafter), the Committee (or the CEO, if assigned by the Committee) shall establish Target Awards and, if deemed appropriate, Award Levels. Such Target Awards will specify the Award payable to each Participant upon 100% achievement of the Performance Objectives applicable to such Participant. In addition, Award Levels may be established to determine whether, and the extent to which, a portion of the Target Award shall be payable to a Participant if the applicable Performance Objectives are not fully achieved, and whether, and the extent to which, payments in addition to the Target Award shall be made if the applicable Performance Objectives are exceeded. The Target Awards for the Performance Year and the manner for calculating Awards is set forth on Exhibit A attached hereto, which may from time to time be amended by the Board.

 

(iii)                               The Committee (or the CEO, if assigned by the Committee) is authorized at any time during or after a Performance Year, in its sole and absolute discretion, to adjust, modify, or specify new Performance Objectives, Target Awards, Award Levels and related terms and conditions, (x) in recognition of unusual or nonrecurring events affecting the Company or any Operating Unit or the financial statements of the Company or any Operating Unit, or in response to changes in applicable laws, regulations or accounting principles, (y) with respect to any Participant whose position or duties with the Company or any Operating Unit changes during a Performance Year, or (z) with respect to any person who first becomes a Participant after the first day of the Performance Year.

 

(b)                                 Determination of Awards.

 

(i)                                     As promptly as practicable following approval by the Board of the annual audit of the Company performed by the independent certified public accountants employed by the Company in respect of a Performance Year, the Committee (or the CEO, if assigned by the Committee) shall determine whether and the extent to which Performance Objectives applicable to Participants were achieved and the Awards that correspond to such achievement and/or allocations as specified under the Award Levels for the Performance Year. All Awards shall be based on the annual financial statements of the Company as certified by the independent certified public accountants regularly employed by the Company to audit its books and records. Actual performance shall be calculated after accrual for all bonuses and Awards. Exchange rates as published in the Company’s annual budget shall be used to convert local currencies into U.S. dollars for the purposes of determining the Company’s earnings and Return for bonus calculations notwithstanding the actual exchange rate as of the date of calculation. The Committee may, in its sole and

 

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absolute discretion, in view of the Committee’s assessment of the business strategy of the Company and subsidiaries, performance of comparable organizations, economic and business conditions, and any of the circumstances deemed relevant, increase or decrease final Award amounts otherwise determined under the first sentence of this Section 4(b)(i).

 

(ii)                                  Each Participant shall be entitled to an Award in accordance with the Target Award and any Award Levels (as adjusted) applicable to him or her based on the extent to which the Performance Objectives applicable to him or her have been achieved, provided, however, that the Committee may determine, in its sole and absolute discretion, that a Participant shall not receive an Award if the Participant has received an unsatisfactory personal performance assessment for the Performance Year (whether or not such personal performance assessment was a component of the Participant’s Performance Objectives for the Performance Year).

 

(iii)                               Unless otherwise determined by the Committee, if a Participant ceases to be employed by the Company or an Operating Unit prior to the payment of the Award for any reason (including, without limitation, by reason of the sale of all or substantially all of the assets of the Participant’s Operating Unit or the sale, transfer or exchange of such Operating Unit’s outstanding securities (whether by merger, consolidation, recapitalization, reorganization, sale of outstanding share capital or otherwise) to an entity which is neither another Operating Unit of, nor affiliated with, the Company) other than death, retirement, disability (as determined by the Committee) or transfer to an Operating Unit or to another Operating Unit, such Participant shall not be entitled to receive any portion of his or her Award for such Performance Year unless otherwise determined by the Committee (or the CEO if assigned by the Committee) in its sole and absolute discretion. If such cessation of employment results from such Participant’s death, retirement, disability (as determined by the Committee) or transfer to an Operating Unit or to another Operating Unit, the Committee (or the CEO if assigned by the Committee) shall estimate in its sole and absolute discretion the level of achievement of Performance Objectives applicable to such Participant during the period of such Performance Year prior to such cessation, and such Participant or his or her Beneficiary shall be entitled to receive payment of the percentage of his or her Target Award or Award Level amount as determined in accordance with this Section 4(b)(iii) for the pro rata portion of such Performance Year during which such Participant was employed by the Company or an Operating Unit, unless payment of a greater percentage is approved in the sole and absolute discretion of the Committee.

 

(c)                                  Payment of Final Awards.

 

(i)                                     Except as otherwise provided in paragraph (ii) and (iii) below, each Participant shall receive payment, in a cash lump sum, of his or her final Award as soon as practicable following the determination in respect thereof made pursuant to Section 4(b) (a “Section 4(c)(i) Payment Date”).

 

(ii)                                  In the event of the death of a Participant, any payments hereunder

 

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due to such Participant shall be paid to his or her Beneficiary at the time such payment otherwise would have been made. In the event of the normal retirement or Permanent Disability of a Participant, any payments hereunder due to such Participant shall be paid to such Participant at the time such payment otherwise would have been made.

 

(iii)                               In the event of a Change in Control, any payments hereunder due to such Participant shall be paid in a cash lump sum no later than fifteen (15) days after a Change in Control.

 

5.                                       General Provisions

 

(a)                                  Taxes. The Company or any subsidiary is authorized to withhold from any Award granted, any payment relating to an Award under the Plan or any payroll or other payment to a Participant, amounts of withholding and other taxes due in connection with any transaction involving an Award, and to take such other action as the Committee may deem advisable to enable the Company and Participants to satisfy obligations for the payment of withholding taxes and other tax obligations relating to any Award. This authority shall include authority for the Company to withhold payments in satisfaction of a Participant’s tax obligations.

 

(b)                                 Limitations on Rights Conferred under Plan and Beneficiaries.

 

(i)                                     Status as a Participant shall not be construed as a commitment that any Award will become payable under the Plan. Nothing in the Plan shall be deemed to give any Eligible Employee any right to participate in the Plan except in accordance herewith.

 

(ii)                                  Nothing contained in the Plan or in any documents related to the Plan or to any Award shall confer upon any Eligible Employee or Participant any right to continue as an Eligible Employee, Participant or in the employ of the Company or a subsidiary or constitute any contract or agreement of employment, or interfere in any way with the right of the Company or a subsidiary to reduce such person’s compensation, to change the position held by such person or to terminate the employment of such Eligible Employee or Participant, with or without cause, but nothing contained in this Plan or any document related thereto shall affect any other contractual right of any Eligible Employee or Participant.

 

(iii)                               Except as specifically authorized in this Plan, no benefit payable under, or interest in, this Plan shall be transferable by a Participant except by will or the laws of descent and distribution or otherwise be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or charge, and any such attempted action shall be void and no such benefit or interest shall be, in any manner, liable for, or subject to, debts, contracts, liabilities, engagements or torts of any Eligible Employee or Beneficiary. Any attempt at transfer, assignment or other alienation prohibited by the preceding sentence

 

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shall be disregarded and all amounts payable hereunder shall be paid only in accordance with the provisions of the Plan.

 

(c)                                  Unfunded Status of Awards; Creation of Trusts. The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any amounts payable to a Participant pursuant to an Award, nothing contained in the Plan (or in any documents related thereto), nor the creation or adoption of the Plan, the grant of any Award, or the taking of any other action taken pursuant to the provisions of the Plan shall give any such Participant any rights that are greater than those of a general creditor of the Company; provided, however, that the Committee may authorize the creation of trusts or make other arrangements to meet the Company’s obligations under the Plan pursuant to any Award, which trusts or other arrangements shall be consistent with the “unfunded” status of the Plan unless the Committee otherwise determines with the consent of each affected Participant.

 

(d)                                 Governing Law; Arbitration. The validity, construction, and effect of the Plan, any rules and regulations relating to the Plan, and any Award agreement shall be determined in accordance with the Georgia Business Corporation Code, to the extent applicable, other laws (including those governing contracts) of the State of Georgia, without giving effect to principles of conflicts of laws, and applicable federal law. If any provision hereof shall be held by a court of competent jurisdiction to be invalid and unenforceable, the remaining provisions shall continue to be fully effective. Any dispute or controversy arising under or in connection with this Plan shall be settled exclusively by arbitration in Atlanta, Georgia by three arbitrators in accordance with the rules of the American Arbitration Association in effect at the time of submission to arbitration. Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For purposes of settling any dispute or controversy arising hereunder or for the purpose of entering any judgment upon an award rendered by the arbitrators, the Company and the Participant hereby consent to the jurisdiction of any or all of the following courts: (i) the United States District Court for the Northern District of Georgia, (ii) any of the courts of the State of Georgia, or (iii) any other court having jurisdiction. The Company and the Participant hereby waive, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to such jurisdiction and any defense of inconvenient forum. The Company and the Participant hereby agree that a judgment upon an award rendered by the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. The costs and expenses of the arbitration, including without limitation the legal fees and expenses of both parties, shall be borne by the party against whom the award is entered as determined by the arbitrators, in their sole discretion.

 

(e)                                  Amendment and Termination of Plan and Awards. Notwithstanding anything herein to the contrary, the Board of Directors may, at any time, terminate or, from time to time, amend, modify or suspend the Plan and the terms and provisions of any Awards theretofore awarded to any Participants which have not been settled by payment. No Award may be granted during any suspension of the Plan or after its termination.

 

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(f)                                    Effective Date. The Plan shall become effective upon its approval by the Board. The Plan shall remain in effect until such time as it may be terminated pursuant to Section 5(e).

 

6.                                       Change in Control.

 

(a)                                  Payment of Awards.

 

(i)                                     Notwithstanding any provision of this Plan to the contrary, in the event of a Change in Control, a Participant shall be entitled to receive any unpaid Excess Award in respect of a prior Performance Year and an Award for the Performance Year in progress on the date of such Change in Control, equal to a pro rata portion of his or her full Target Award for such Performance Year as if 100% of the Performance Objectives were fully met based on the number of days from the beginning of the Performance Year to the date of the Change in Control.

 

(ii)                                  All amounts payable pursuant to this Section 6(a) shall be made in a cash lump sum to the Participant no later than fifteen (15) days after the date of a Change in Control. Nothing in the Plan shall prevent the Committee from continuing Awards, to the extent not paid under this provision, after a Change in Control.

 

(b)                                 Other Plan Provisions Unaffected. Nothing in this Section 6 shall affect the operation of the provisions of this Plan prior to a Change in Control.

 

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