Exhibit 10.02

 

HAYNES INTERNATIONAL, INC.

2009 RESTRICTED STOCK PLAN

 

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ARTICLE I

 

ESTABLISHMENT AND PURPOSE

 

The Board of Directors of Haynes International, Inc. (the “Company”) hereby
establishes the Haynes International, Inc. 2009 Restricted Stock Plan (“Plan”),
effective on the date this plan is approved by the stockholders of the Company
(the “Effective Date”), for the purpose of making Restricted Stock Awards to
eligible employees.  The Plan is intended to promote the interests of the
Company and the stockholders of the Company by providing directors, executive
officers and other senior management employees of the Company with appropriate
incentives and rewards to encourage them to enter into and continue in the
employ of the Company, to acquire a proprietary interest in the long-term
success of the Company and to reward the performance of individuals in
fulfilling their personal responsibilities for long-range and annual
achievements.

 

ARTICLE II

 

DEFINITIONS

 

SECTION .2.01.  DEFINITIONS.  WHENEVER CAPITALIZED HEREIN, CAPITALIZED TERMS
SHALL HAVE THE FOLLOWING MEANINGS:

 

(A)                                  “AFFILIATE” MEANS ANY ENTITY IN WHICH THE
COMPANY HAS A SUBSTANTIAL DIRECT OR INDIRECT EQUITY INTEREST (OTHER THAN A
SUBSIDIARY), BUT ONLY IF EXPRESSLY SO DESIGNATED BY THE COMMITTEE FROM TIME TO
TIME.

 

(B)                                 “AWARD AGREEMENT” MEANS THE WRITTEN
AGREEMENT BY AND BETWEEN THE COMPANY AND A PARTICIPANT GRANTED A RESTRICTED
STOCK AWARD PRESCRIBING THE TERMS, CONDITIONS, AND RESTRICTIONS APPLICABLE TO
THE AWARD.  EACH AWARD AGREEMENT SHALL BE SUBJECT TO THE TERMS AND CONDITIONS OF
THE PLAN AND NEED NOT BE IDENTICAL.

 

(C)                                  “BENEFICIAL OWNER” SHALL HAVE THE MEANING
SET FORTH IN RULE 13D-3 UNDER THE EXCHANGE ACT.

 

(D)                                 “BOARD OF DIRECTORS” MEANS THE BOARD OF
DIRECTORS OF THE COMPANY, AS CONSTITUTED AT ANY TIME.

 

(E)                                  “CHANGE IN CONTROL” SHALL MEAN THE
OCCURRENCE OF ANY ONE OF THE FOLLOWING EVENTS:

 

(I)            ANY PERSON OTHER THAN AN EXISTING SUBSTANTIAL SHAREHOLDER BECOMES
THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE COMPANY
REPRESENTING A MAJORITY OF THE COMBINED VOTING POWER OF THE COMPANY’S THEN
OUTSTANDING SECURITIES (ASSUMING CONVERSION OF ALL OUTSTANDING NON-VOTING
SECURITIES INTO VOTING SECURITIES AND THE EXERCISE OF ALL OUTSTANDING OPTIONS OR
OTHER CONVERTIBLE SECURITIES);

 

(II)           THE FOLLOWING INDIVIDUALS CEASE FOR ANY REASON TO CONSTITUTE A
MAJORITY OF THE NUMBER OF DIRECTORS THEN SERVING: INDIVIDUALS WHO, ON THE
EFFECTIVE DATE, CONSTITUTE THE BOARD OF DIRECTORS AND ANY NEW DIRECTOR (OTHER
THAN A DIRECTOR WHOSE INITIAL ASSUMPTION OF OFFICE IS IN CONNECTION WITH AN
ACTUAL OR THREATENED ELECTION CONTEST, INCLUDING BUT NOT LIMITED TO, A CONSENT
SOLICITATION, RELATING TO THE ELECTION OF DIRECTORS OF THE COMPANY) WHOSE
APPOINTMENT OR ELECTION BY THE

 

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BOARD OR NOMINATION FOR ELECTION BY THE COMPANY’S STOCKHOLDERS WAS APPROVED OR
RECOMMENDED BY A VOTE OF AT LEAST TWO-THIRDS (2/3) OF THE DIRECTORS THEN STILL
IN OFFICE WHO EITHER WERE DIRECTORS ON THE EFFECTIVE DATE OR WHOSE APPOINTMENT,
ELECTION OR NOMINATION FOR ELECTION WAS PREVIOUSLY SO APPROVED OR RECOMMENDED;

 

(III)          THE CONSUMMATION OF A MERGER OR CONSOLIDATION OF THE COMPANY OR
ANY SUBSIDIARY OF THE COMPANY WITH ANY OTHER CORPORATION (OTHER THAN WITH AN
EXISTING SUBSTANTIAL SHAREHOLDER OR ANY OF ITS AFFILIATES), OTHER THAN (X) A
MERGER OR CONSOLIDATION WHICH WOULD RESULT IN THE VOTING SECURITIES OF THE
COMPANY OUTSTANDING IMMEDIATELY PRIOR TO SUCH MERGER OR CONSOLIDATION CONTINUING
TO REPRESENT, EITHER BY REMAINING OUTSTANDING OR BY BEING CONVERTED INTO VOTING
SECURITIES OF THE SURVIVING ENTITY OR ANY PARENT THEREOF, A MAJORITY OF THE
COMBINED VOTING POWER OF THE SECURITIES OF THE COMPANY OR SUCH SURVIVING ENTITY
OR ANY PARENT THEREOF OUTSTANDING IMMEDIATELY AFTER SUCH MERGER OR
CONSOLIDATION, OR (Y) A MERGER OR CONSOLIDATION EFFECTED TO IMPLEMENT A
RECAPITALIZATION OF THE COMPANY (OR SIMILAR TRANSACTION) IN WHICH NO PERSON, IS
OR BECOMES THE BENEFICIAL OWNER, DIRECTLY OR INDIRECTLY, OF SECURITIES OF THE
COMPANY REPRESENTING A MAJORITY OF THE COMBINED VOTING POWER OF THE COMPANY’S
THEN OUTSTANDING SECURITIES; OR

 

(IV)          THE STOCKHOLDERS OF THE COMPANY APPROVE A PLAN OF COMPLETE
LIQUIDATION OR DISSOLUTION OF THE COMPANY OR THERE IS CONSUMMATED AN AGREEMENT
FOR THE SALE OR DISPOSITION BY THE COMPANY OF ALL OR SUBSTANTIALLY ALL OF THE
COMPANY’S ASSETS, OTHER THAN A SALE OR DISPOSITION BY THE COMPANY OF ALL OR
SUBSTANTIALLY ALL OF THE COMPANY’S ASSETS TO AN ENTITY CONTROLLED BY AN EXISTING
SUBSTANTIAL SHAREHOLDER OR ANY OF ITS AFFILIATES, OR TO AN ENTITY A MAJORITY OF
THE COMBINED VOTING POWER OF THE VOTING SECURITIES OF WHICH IS OWNED BY
SUBSTANTIALLY ALL OF THE STOCKHOLDERS OF THE COMPANY IMMEDIATELY PRIOR TO SUCH
SALE IN SUBSTANTIALLY THE SAME PROPORTIONS AS THEIR OWNERSHIP OF THE COMPANY
IMMEDIATELY PRIOR TO SUCH SALE.

 

(F)                                    “CAUSE” MEANS THE REMOVAL OF A DIRECTOR
FROM OFFICE PURSUANT TO ARTICLE III, SECTION 14 OF THE AMENDED AND RESTATED
BY-LAWS OF HAYNES INTERNATIONAL, INC., AS AMENDED FROM TIME TO TIME.

 

(G)                                 “CODE” MEANS THE INTERNAL REVENUE CODE OF
1986, AS AMENDED.

 

(H)                                 “COMMITTEE” MEANS THE COMPENSATION COMMITTEE
OF THE BOARD OF DIRECTORS, AND THE COMPOSITION OF THE COMMITTEE SHALL BE
GOVERNED BY THE COMPENSATION COMMITTEE CHARTER AS ADOPTED BY THE BOARD OF
DIRECTORS AND AS AMENDED FROM TIME TO TIME.

 

(I)                                     “COMPANY” MEANS HAYNES
INTERNATIONAL, INC.

 

(J)                                     “DIRECTOR” MEANS ANY PERSON SERVING ON
THE BOARD OF DIRECTORS.

 

(K)                                  “DISABILITY” MEANS A TOTAL AND PERMANENT
DISABILITY AS DEFINED IN THE HAYNES INTERNATIONAL, INC. PENSION PLAN.

 

(L)                                     “EMPLOYEE” MEANS EXECUTIVE OFFICERS OR
OTHER MEMBERS OF SENIOR MANAGEMENT EMPLOYED BY THE COMPANY OR ANY SUBSIDIARY. 
THE PAYMENT OF A DIRECTOR’S FEE BY THE COMPANY SHALL NOT BE SUFFICIENT TO
CONSTITUTE EMPLOYMENT BY THE COMPANY.

 

(M)                               “EXCHANGE ACT” MEANS THE SECURITIES EXCHANGE
ACT OF 1934, AS AMENDED.

 

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(N)                                 “EXISTING SUBSTANTIAL SHAREHOLDER” MEANS ANY
PERSON THAT ALONE OR TOGETHER WITH ITS AFFILIATES SHALL BE THE BENEFICIAL OWNER
OF MORE THAN 15% OF THE SHARES OUTSTANDING AS OF THE EFFECTIVE DATE.

 

(O)                                 “FAIR MARKET VALUE” PER SHARE AS OF A
PARTICULAR DATE MEANS THE LAST REPORTED SALE PRICE (ON THE LAST TRADING DAY
IMMEDIATELY PRECEDING SUCH DATE) OF THE SHARES QUOTED ON THE NASDAQ GLOBAL
SELECT MARKET, THE NASDAQ GLOBAL MARKET OR THE NASDAQ CAPITAL MARKET (OR ANY
OTHER EXCHANGE OR NATIONAL MARKET SYSTEM UPON WHICH PRICE QUOTATIONS FOR THE
SHARES ARE REGULARLY AVAILABLE); PROVIDED, HOWEVER, IF PRICE QUOTATIONS FOR THE
SHARES ARE NOT REGULARLY AVAILABLE ON ANY EXCHANGE OR NATIONAL MARKET SYSTEM,
FAIR MARKET VALUE PER SHARE SHALL MEAN, AS OF ANY DATE, THE FAIR MARKET VALUE OF
SUCH SHARES ON SUCH DATE AS DETERMINED IN GOOD FAITH BY THE BOARD OF DIRECTORS
OR COMMITTEE.

 

(P)                                 “NON-EMPLOYEE DIRECTOR” MEANS A DIRECTOR WHO
IS A “NON-EMPLOYEE DIRECTOR” WITHIN THE MEANING OF RULE 16B-3 OF THE EXCHANGE
ACT AND WHO IS ALSO AN “OUTSIDE DIRECTOR” WITHIN THE MEANING OF
SECTION 162(M) OF THE CODE.

 

(Q)                                 “PARTICIPANT” MEANS THE EMPLOYEE OR
NON-EMPLOYEE DIRECTOR WHO HAS ENTERED INTO AN AWARD AGREEMENT WITH THE COMPANY
PURSUANT TO THIS PLAN.

 

(R)                                    “PERFORMANCE GOALS” MEANS PERFORMANCE
CRITERIA DETERMINED BY REFERENCE TO GOALS PRE-ESTABLISHED BY THE COMMITTEE IN
ITS SOLE DISCRETION, BASED ON ONE OR MORE OF THE FOLLOWING (IF APPLICABLE, SUCH
CRITERIA SHALL BE DETERMINED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING
PRINCIPLES (“GAAP”) OR BASED UPON THE COMPANY’S GAAP FINANCIAL STATEMENTS):
(1) RETURN ON TOTAL STOCKHOLDER EQUITY; (2) EARNINGS PER SHARE; (3) INCOME
BEFORE TAXES; (4) EARNINGS BEFORE ANY OR ALL OF INTEREST, TAXES, MINORITY
INTEREST, DEPRECIATION AND AMORTIZATION; (5) ECONOMIC PROFIT; (6) SALES OR
REVENUES; (7) RETURN ON ASSETS, CAPITAL OR INVESTMENT; (8) MARKET SHARE;
(9) COST REDUCTION GOALS; (10) IMPLEMENTATION OR COMPLETION OF CRITICAL PROJECTS
OR PROCESSES; (11) OPERATING CASH FLOW; (12) FREE CASH FLOW; AND (13) ANY
COMBINATION OF, OR A SPECIFIED INCREASE OR DECREASE IN, ANY OF THE FOREGOING.
THE PERFORMANCE GOALS MAY BE BASED UPON THE PERFORMANCE OF THE COMPANY OR OF ANY
SUBSIDIARY OR AFFILIATE OF THE COMPANY (OR ANY DIVISIONS OR BUSINESS UNIT OF
SUCH ENTITY).  THE PERFORMANCE GOALS MAY DIFFER FROM PARTICIPANT TO PARTICIPANT
AND FROM AWARD TO AWARD. THE PERFORMANCE GOALS MAY ALSO BE BASED UPON THE
ATTAINMENT OF SPECIFIED LEVELS OF PERFORMANCE UNDER ONE OR MORE OF THE CRITERIA
DESCRIBED ABOVE RELATIVE TO THE PERFORMANCE OF OTHER COMPARABLE ENTITIES. TO THE
EXTENT PERMITTED UNDER SECTION 162(M) OF THE CODE (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH ANY REQUIREMENTS FOR STOCKHOLDER APPROVAL), THE
COMMITTEE IN ITS SOLE DISCRETION MAY DESIGNATE ADDITIONAL BUSINESS CRITERIA ON
WHICH THE PERFORMANCE GOALS MAY BE BASED OR ADJUST, MODIFY OR AMEND THE
AFOREMENTIONED BUSINESS CRITERIA. PERFORMANCE GOALS MAY INCLUDE A THRESHOLD
LEVEL OF PERFORMANCE BELOW WHICH NO AWARD WILL BE EARNED, A LEVEL OF PERFORMANCE
AT WHICH THE TARGET AMOUNT OF AN AWARD WILL BE EARNED AND A LEVEL OF PERFORMANCE
AT WHICH THE MAXIMUM AMOUNT OF THE AWARD WILL BE EARNED.

 

(S)                                  “PERSON” SHALL HAVE THE MEANING GIVEN IN
SECTION 3(A)(9) OF THE EXCHANGE ACT AND USED IN SECTIONS 13(D) AND
14(D) THEREOF, EXCEPT THAT SUCH TERM SHALL NOT INCLUDE (I) THE COMPANY OR ANY
SUBSIDIARY OF THE COMPANY, (II) A TRUSTEE OR OTHER FIDUCIARY HOLDING SECURITIES
UNDER AN EMPLOYEE BENEFIT PLAN OF THE COMPANY OR ANY OF ITS AFFILIATES, (III) AN
UNDERWRITER TEMPORARILY HOLDING SECURITIES PURSUANT TO AN OFFERING OF SUCH
SECURITIES OR (IV) A CORPORATION OWNED, DIRECTLY OR INDIRECTLY, BY SUBSTANTIALLY
ALL OF THE STOCKHOLDERS OF THE COMPANY IN SUBSTANTIALLY THE SAME PROPORTIONS AS
THEIR OWNERSHIP OF STOCK OF THE COMPANY.

 

(T)                                    “PLAN” MEANS THIS HAYNES
INTERNATIONAL, INC. 2009 RESTRICTED STOCK PLAN, AS SET FORTH IN THIS DOCUMENT,
AS AMENDED FROM TIME TO TIME.

 

(U)                                 “RESTRICTED STOCK AWARD” OR “AWARD” MEANS AN
AWARD OF SHARES SUBJECT TO THE TERMS, CONDITIONS, AND RESTRICTIONS DESCRIBED IN
THIS PLAN AND THE AWARD AGREEMENT.

 

(V)                                 “SHARE” MEANS A SHARE OF COMMON STOCK,
$0.001 PAR VALUE, OF THE COMPANY, AS MAY BE ADJUSTED IN ACCORDANCE WITH
SECTION 5.05 BELOW.

 

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(W)                               “SHARES OUTSTANDING” MEANS THE TOTAL NUMBER OF
SHARES OUTSTANDING ON A FULLY DILUTED BASIS, AS REFLECTED IN THE COMPANY’S
FINANCIAL STATEMENTS FOR PURPOSES OF DETERMINING EARNINGS PER SHARE.

 

(X)                                   “SUBSIDIARY” AND “SUBSIDIARIES” USED
HEREIN MEANS A COMPANY OR COMPANIES OF WHICH 80% OR MORE OF THE TOTAL VOTING
POWER OF THE EQUITY OF EACH SUCH COMPANY AND 80% OR MORE OF THE TOTAL VALUE OF
THE EQUITY OF EACH SUCH COMPANY ARE OWNED BY THE COMPANY OR A SUBSIDIARY OF THE
COMPANY.

 

(Y)                                 “TERMINATE EMPLOYMENT” OR “TERMINATION OF
EMPLOYMENT” MEANS, IN THE CASE OF AN EMPLOYEE, A COMPLETE TERMINATION OF THE
EMPLOYMENT RELATIONSHIP BETWEEN AN EMPLOYEE AND THE COMPANY AND ALL
SUBSIDIARIES, OR, IN THE CASE OF A NON-EMPLOYEE DIRECTOR, SUCH NON-EMPLOYEE
DIRECTOR CEASING TO SERVE ON THE BOARD OF DIRECTORS.  FOR PURPOSES OF THIS
DEFINITION, A PARTICIPANT WHO IS EMPLOYED BY AN ENTITY THAT CEASES TO BE A
SUBSIDIARY OR A BUSINESS UNIT WITHIN A SUBSIDIARY SHALL BE DEEMED TO HAVE
TERMINATED EMPLOYMENT AS OF THE DATE SUCH ENTITY CEASED TO BE A SUBSIDIARY OR A
BUSINESS UNIT WITHIN A SUBSIDIARY, UNLESS THE PARTICIPANT IS ALSO EMPLOYED BY
THE COMPANY OR AN ENTITY THAT CONTINUES TO BE A SUBSIDIARY OR A BUSINESS UNIT
WITHIN A SUBSIDIARY.

 

SECTION .2.02.  RULES OF CONSTRUCTION.

 

(A)                                  WORDS USED HEREIN IN THE MASCULINE GENDER
SHALL BE CONSTRUED TO INCLUDE THE FEMININE GENDER, WHERE APPROPRIATE, AND WORDS
USED HEREIN IN THE SINGULAR OR PLURAL SHALL BE CONSTRUED AS BEING IN THE PLURAL
OR SINGULAR, WHERE APPROPRIATE.

 

(B)                                 THE PLAN SHALL BE CONSTRUED, ENFORCED, AND
ADMINISTERED AND THE VALIDITY THEREOF DETERMINED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF INDIANA.

 

ARTICLE III

 

ADMINISTRATION OF THE PLAN

 

The Plan shall be administered by the Committee.  The Committee may establish
and adopt resolutions, rules, and regulations, including revisions thereto, not
inconsistent with the provisions of the Plan, and construe and interpret
provisions of the Plan, as it deems appropriate to make the Plan and Restricted
Stock Awards effective and to provide for the administration of the Plan, and it
may take such other action with regard to the Plan and Restricted Stock Awards
as it deems appropriate, including, but not limited to adopting and authorizing
the Company to enter into Award Agreements.  All such actions shall be final,
conclusive, and binding on all persons, and no member of the Committee or the
Board of Directors shall be liable for any action or determination made in good
faith with respect to the Plan or any Restricted Stock Award granted hereunder.

 

In furtherance, and not in limitation, of the above, the Committee shall have
the authority in its sole discretion, subject to and not inconsistent with the
express provisions of the Plan, to administer the Plan and to exercise all the
powers and authorities either specifically granted to it under the Plan or
necessary or advisable in the administration of the Plan, including, without
limitation, the authority to grant Restricted Stock Awards; to determine the
persons to whom and the time or times at which Restricted Stock Awards shall be
granted; to determine the type and number of Restricted Stock Awards to be
granted, the number of Shares to which a Restricted Stock Award may relate and
the terms, conditions, restrictions and performance criteria relating to any
Restricted Stock Award; to determine Performance Goals no later than such time
as required to ensure that an underlying Restricted Stock Award which is
intended to comply with the requirements of Section 162(m) of the Code so
complies; to determine whether, to what extent, and under what circumstances a
Restricted Stock Award may be settled, cancelled, forfeited, exchanged, or
surrendered; and to make adjustments in the terms and conditions of, and the
Performance Goals (if any) included in, Awards.

 

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ARTICLE IV

 

ELIGIBILITY

 

SECTION .4.01.  ELIGIBILITY. RESTRICTED STOCK AWARDS MAY BE MADE FROM TIME TO
TIME IN THE DISCRETION OF THE COMMITTEE TO ANY EMPLOYEE OR NON-EMPLOYEE
DIRECTOR.  IN DETERMINING THE EMPLOYEES AND NON-EMPLOYEE DIRECTORS TO RECEIVE
AWARDS AND THE EXTENT OF THEIR PARTICIPATION IN THE AWARDS GRANTED UNDER THIS
PLAN, THE COMMITTEE SHALL TAKE INTO ACCOUNT SUCH FACTORS AS THE COMMITTEE DEEMS
RELEVANT IN ITS DISCRETION IN FURTHERANCE OF THE PURPOSES OF THIS PLAN.  THE
COMMITTEE SHALL, IN ITS SOLE DISCRETION, DETERMINE THE NUMBER OF SHARES SUBJECT
TO EACH RESTRICTED STOCK AWARD, SUBJECT, HOWEVER, TO THE TERMS AND CONDITIONS OF
THE PLAN.

 

SECTION .4.02.  PARTICIPATION BY DIRECTOR.  MEMBERS OF THE COMMITTEE WHO ARE
ELIGIBLE EITHER FOR RESTRICTED STOCK AWARDS OR HAVE BEEN GRANTED RESTRICTED
STOCK AWARDS MAY VOTE ON ANY MATTERS AFFECTING THE ADMINISTRATION OF THE PLAN OR
THE GRANT OF ANY RESTRICTED STOCK AWARDS PURSUANT TO THE PLAN, EXCEPT THAT NO
SUCH MEMBER SHALL ACT UPON THE GRANTING OF A RESTRICTED STOCK AWARD TO HIMSELF,
BUT ANY SUCH MEMBER MAY BE COUNTED IN DETERMINING THE EXISTENCE OF A QUORUM AT
ANY MEETING OF THE COMMITTEE AND MAY BE COUNTED AS PART OF AN ACTION BY
UNANIMOUS WRITTEN CONSENT DURING OR WITH RESPECT TO WHICH ACTION IS TAKEN TO
GRANT RESTRICTED STOCK AWARDS TO HIM OR HER.

 

ARTICLE V

 

RESTRICTED STOCK AWARDS

 

SECTION .5.01.  GRANT OF RESTRICTED STOCK AWARDS.  SUBJECT TO THE TERMS,
PROVISIONS, AND CONDITIONS OF THE PLAN, THE COMMITTEE SHALL, IN ITS SOLE
DISCRETION, SELECT THOSE EMPLOYEES AND NON-EMPLOYEE DIRECTORS TO WHOM RESTRICTED
STOCK AWARDS ARE TO BE GRANTED.  THE COMMITTEE SHALL ALSO HAVE EXCLUSIVE POWER
TO DETERMINE (I) WHEN RESTRICTED STOCK AWARDS WILL BE MADE, (II) THE NUMBER OF
SHARES COVERED BY EACH RESTRICTED STOCK AWARD, (III) WHEN THE RESTRICTIONS
APPLICABLE TO THE RESTRICTED STOCK AWARD WILL LAPSE, (IV) THE PERFORMANCE GOALS
APPLICABLE TO ANY RESTRICTED STOCK AWARD, (V) ANY OTHER TERMS OF RESTRICTED
STOCK AWARDS, AND (VI) THE FORM OF AWARD AGREEMENTS.  RESTRICTED STOCK AWARDS
MAY BE MADE TO THE SAME PERSON ON MORE THAN ONE OCCASION.

 

SECTION .5.02.  TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.  EACH
RESTRICTED STOCK AWARD MADE UNDER THE PLAN SHALL CONTAIN THE FOLLOWING TERMS,
CONDITIONS, AND RESTRICTIONS AND SUCH ADDITIONAL TERMS, CONDITIONS, AND
RESTRICTIONS AS MAY BE DETERMINED BY THE COMMITTEE:

 

(A)                                  RESTRICTIONS.  UNTIL THE RESTRICTIONS SET
FORTH IN THIS SUBSECTION (A) LAPSE PURSUANT TO SUBSECTION (B), (C), (D) OR (E),
SHARES AWARDED TO A PARTICIPANT IN ACCORDANCE WITH A RESTRICTED STOCK AWARD AND
WHICH ARE STILL SUBJECT TO SUCH RESTRICTIONS SHALL NOT BE SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, HYPOTHECATED, OR OTHERWISE DISPOSED OF.

 

(B)                                 LAPSE OF RESTRICTIONS FOR GRANTS TO
EMPLOYEES.  EXCEPT AS SET FORTH IN SUBSECTIONS (D) AND (E), THE RESTRICTIONS SET
FORTH IN SUBSECTION (A) SHALL BEGIN TO LAPSE ON OR AFTER (BUT NOT BEFORE) THE
FIRST ANNIVERSARY OF THE DATE OF ANY RESTRICTED STOCK AWARD MADE TO AN EMPLOYEE
AT SUCH TIMES AND TO SUCH EXTENT AS THE COMMITTEE MAY DESIGNATE IN THE AWARD
AGREEMENT (INCLUDING, WITHOUT LIMITATION, THE ATTAINMENT OF PERFORMANCE GOALS).

 

(C)                                  LAPSE OF RESTRICTIONS FOR GRANTS TO
NON-EMPLOYEE DIRECTORS.  EXCEPT AS SET FORTH IN SUBSECTIONS (D) AND (E), THE
RESTRICTIONS SET FORTH IN SUBSECTION (A) SHALL LAPSE FOR ANY RESTRICTED STOCK
AWARD MADE TO A NON-EMPLOYEE DIRECTOR UPON THE EARLIER OF (I) THE THIRD
ANNIVERSARY OF THE DATE OF THE GRANT OF THE RESTRICTED STOCK AWARD OR (II) THE
FAILURE OF SUCH NON-EMPLOYEE DIRECTOR TO BE RE-ELECTED AT AN ANNUAL MEETING OF
THE STOCKHOLDERS OF THE COMPANY AS A RESULT OF SUCH NON-EMPLOYEE DIRECTOR BEING
EXCLUDED FROM THE NOMINATIONS FOR ANY REASON OTHER THAN CAUSE.

 

(D)                                 TERMINATION OF EMPLOYMENT BY REASON OF DEATH
OR DISABILITY.  NOTWITHSTANDING ANY PROVISION OF SUBSECTION (A) TO THE CONTRARY,
IF (I) AN EMPLOYEE WHO HAS BEEN IN THE CONTINUOUS EMPLOYMENT, OR (II) A
NON-EMPLOYEE DIRECTOR WHO HAS SERVED ON THE BOARD OF DIRECTORS, OF THE COMPANY
AND/OR A

 

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SUBSIDIARY FOR AT LEAST ONE YEAR SINCE THE DATE OF A RESTRICTED STOCK AWARD,
EITHER DIES OR TERMINATES EMPLOYMENT BECAUSE OF HIS DISABILITY WHILE IN SUCH
EMPLOYMENT, THEN THE RESTRICTIONS SET FORTH IN SUBSECTION (A) SHALL LAPSE ON THE
DAY OF SUCH EVENT AS TO ALL SHARES SUBJECT TO SUCH RESTRICTED STOCK AWARD.

 

(E)                                  CHANGE IN CONTROL.  NOTWITHSTANDING ANY
OTHER PROVISION OF THIS PLAN, ALL RESTRICTIONS WITH RESPECT TO SHARES SUBJECT TO
A RESTRICTED STOCK AWARD SHALL LAPSE UPON A CHANGE IN CONTROL.

 

(F)                                    AGREEMENT BY EMPLOYEE REGARDING
WITHHOLDING TAXES.  EACH EMPLOYEE GRANTED A RESTRICTED STOCK AWARD SHALL AGREE
THAT THE COMPANY AND ITS SUBSIDIARIES SHALL, TO THE EXTENT PERMITTED BY LAW,
HAVE THE RIGHT TO DEDUCT FROM ANY PAYMENTS OF ANY KIND OTHERWISE DUE OR TO
BECOME DUE TO AN EMPLOYEE ANY FEDERAL, STATE, OR LOCAL TAXES OF ANY KIND
REQUIRED BY LAW TO BE WITHHELD WITH RESPECT TO SHARES SUBJECT TO THE RESTRICTED
STOCK AWARD, OR IF THERE ARE NO SUCH PAYMENTS DUE OR TO BECOME DUE TO THE
EMPLOYEE, THE EMPLOYEE WILL PAY TO THE COMPANY, OR MAKE ARRANGEMENTS
SATISFACTORY TO THE COMMITTEE, REGARDING PAYMENT OF ANY FEDERAL, STATE, OR LOCAL
TAXES OF ANY KIND REQUIRED BY LAW TO BE WITHHELD WITH RESPECT TO SHARES SUBJECT
TO THE RESTRICTED STOCK AWARD.

 

With respect to any Restricted Stock Award, the Committee may, in its discretion
and subject to such rules as the Committee may adopt, permit the Employee to
elect to satisfy, in whole or in part, any withholding tax obligation that may
arise in connection with the Shares subject to the Restricted Stock Award by
having the Company retain or accept from the Employee delivery of Shares having
a Fair Market Value equal to the amount of the withholding tax to be satisfied
by such retention or delivery.

 

(G)                                 FORFEITURE OF AWARD.  ANY SHARES AS TO WHICH
THE RESTRICTIONS OF SECTION 5.03(A) HAVE NOT LAPSED IN ACCORDANCE WITH THIS
SECTION 5.03 AS OF THE DATE OF A PARTICIPANT’S TERMINATION OF EMPLOYMENT SHALL
BE FORFEITED AND RETURNED TO THE COMPANY AS OF SUCH DATE WITHOUT THE PAYMENT OF
CONSIDERATION BY THE COMPANY.

 

SECTION .5.03.  RIGHTS WITH RESPECT TO SHARES.  A PARTICIPANT TO WHOM A
RESTRICTED STOCK AWARD HAS BEEN MADE SHALL HAVE ABSOLUTE BENEFICIAL OWNERSHIP OF
THE SHARES AWARDED TO HIM, INCLUDING THE RIGHT TO VOTE THE SHARES AND TO RECEIVE
DIVIDENDS THEREON; SUBJECT, HOWEVER, TO THE TERMS, CONDITIONS, AND RESTRICTIONS
DESCRIBED IN THE PLAN AND/OR THE AWARD AGREEMENT. THE CERTIFICATE(S) FOR SUCH
SHARES, WITH RESTRICTIVE LEGENDS THEREON, SHALL BE HELD BY THE COMPANY FOR THE
PARTICIPANT’S BENEFIT UNTIL THE RESTRICTIONS LAPSE, WHEREUPON CERTIFICATES
WITHOUT RESTRICTIVE LEGENDS SHALL BE ISSUED AND DELIVERED TO HIM.

 

SECTION .5.04.   RESTRICTIVE LEGENDS.  CERTIFICATES FOR SHARES ISSUED PURSUANT
TO RESTRICTED STOCK AWARDS SHALL BEAR AN APPROPRIATE LEGEND REFERRING TO THE
TERMS, CONDITIONS, AND RESTRICTIONS DESCRIBED IN THE PLAN AND THE AWARD
AGREEMENT.  ANY ATTEMPT TO DISPOSE OF ANY SHARES IN CONTRAVENTION OF THE TERMS,
CONDITIONS, AND RESTRICTIONS DESCRIBED IN THE PLAN OR THE AWARD AGREEMENT SHALL
BE INEFFECTIVE.

 

SECTION .5.05.  ADJUSTMENT OF SHARES.  SUBJECT TO ANY REQUIRED ACTION BY THE
STOCKHOLDERS OF THE COMPANY, (I) THE NUMBER OF SHARES COVERED BY EACH
OUTSTANDING RESTRICTED STOCK AWARD, (II) THE NUMBER OF SHARES WHICH HAVE BEEN
AUTHORIZED FOR ISSUANCE UNDER THE PLAN BUT AS TO WHICH NO RESTRICTED STOCK
AWARDS HAVE YET BEEN GRANTED OR WHICH HAVE BEEN RETURNED TO THE PLAN UPON
CANCELLATION OR EXPIRATION OF A RESTRICTED STOCK AWARD, AND (III) THE
PERFORMANCE GOALS APPLICABLE TO OUTSTANDING RESTRICTED STOCK AWARDS, SHALL BE
PROPORTIONATELY ADJUSTED FOR ANY INCREASE OR DECREASE IN THE NUMBER OF ISSUED
SHARES RESULTING FROM A STOCK SPLIT, REVERSE STOCK SPLIT, STOCK DIVIDEND,
COMBINATION OR RECLASSIFICATION OF THE SHARES (INCLUDING ANY SUCH CHANGE IN THE
NUMBER OF SHARES EFFECTED IN CONNECTION WITH A CHANGE IN DOMICILE OF THE
COMPANY), OTHER EXTRAORDINARY DIVIDEND OR OTHER DISTRIBUTION (WHETHER IN THE
FORM OF CASH, OTHER SECURITIES, OR OTHER PROPERTY), RECAPITALIZATION,
RECLASSIFICATION, SPIN-OFF, OR EXCHANGE OF SHARES OR OTHER SECURITIES OF THE
COMPANY, ISSUANCE OF WARRANTS OR OTHER RIGHTS TO PURCHASE SHARES OR OTHER
SECURITIES OF THE COMPANY, OR OTHER SIMILAR CORPORATE TRANSACTION OR EVENT (AN
“EVENT”) OR ANY OTHER INCREASE OR DECREASE IN THE NUMBER OF ISSUED SHARES
EFFECTED WITHOUT RECEIPT OF CONSIDERATION BY THE COMPANY; PROVIDED, HOWEVER,
THAT CONVERSION OF ANY CONVERTIBLE SECURITIES OF THE COMPANY SHALL NOT BE DEEMED
TO HAVE BEEN “EFFECTED WITHOUT RECEIPT OF CONSIDERATION”.  THE COMMITTEE SHALL
TAKE ALL ACTIONS NECESSARY OR DESIRABLE TO EFFECT SUCH AND THE ACTIONS OF THE
COMMITTEE IN THAT RESPECT SHALL BE FINAL, BINDING AND CONCLUSIVE.  IF ANY OF THE
FOREGOING ADJUSTMENTS SHALL RESULT IN A FRACTIONAL SHARE, THE FRACTION SHALL BE
DISREGARDED, AND THE COMPANY SHALL HAVE NO OBLIGATION TO MAKE ANY CASH OR OTHER
PAYMENT WITH RESPECT TO SUCH A FRACTIONAL SHARE.

 

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SECTION .5.06.  TERMINATION OF AWARDS UNDER CERTAIN CONDITIONS.  THE COMMITTEE
MAY CANCEL ANY UNEXPIRED OUTSTANDING AWARDS AT ANY TIME, IF THE GRANTEE IS NOT
IN COMPLIANCE WITH ALL APPLICABLE PROVISIONS OF THIS PLAN OR WITH ANY AWARD
AGREEMENT OR IF THE GRANTEE ENGAGES IN ANY OF THE FOLLOWING ACTIVITIES WITHOUT
THE PRIOR WRITTEN CONSENT OF THE COMPANY:

 

(A)                                  DIRECTLY OR INDIRECTLY RENDERS SERVICES TO
OR FOR AN ORGANIZATION, OR ENGAGES IN A BUSINESS, THAT IS, IN THE JUDGMENT OF
THE COMMITTEE, IN COMPETITION WITH THE COMPANY.

 

(B)                                 DISCLOSES TO ANYONE OUTSIDE OF THE COMPANY,
OR USES FOR ANY PURPOSE OTHER THAN THE COMPANY’S BUSINESS, ANY CONFIDENTIAL OR
PROPRIETARY INFORMATION OR MATERIAL RELATING TO THE COMPANY.

 

The Committee may, in its discretion and as a condition to the exercise of an
Award, require a grantee to acknowledge in writing that he is in compliance with
all applicable provisions of this Plan and of any Award Agreement and has not
engaged in any activities referred to in clauses (a) and (b) above.

 

ARTICLE VI

 

COMPLIANCE WITH LAW AND OTHER CONDITIONS

 

SECTION .6.01.  ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS.  THE
COMPANY MAY POSTPONE THE ISSUANCE AND DELIVERY OF CERTIFICATES REPRESENTING
SHARES UNTIL (I) THE ADMISSION OF SUCH SHARES TO LISTING ON ANY STOCK EXCHANGE
ON WHICH SHARES ARE THEN LISTED AND (II) THE COMPLETION OF SUCH REGISTRATION OR
OTHER QUALIFICATION OF SUCH SHARES UNDER ANY STATE OR FEDERAL LAW, RULE, OR
REGULATION AS THE COMPANY SHALL DETERMINE TO BE NECESSARY OR ADVISABLE, WHICH
REGISTRATION OR OTHER QUALIFICATION THE COMPANY SHALL USE ITS BEST EFFORTS TO
COMPLETE.

 

SECTION .6.02.  RESTRICTIONS UPON RESALE OF UNREGISTERED STOCK.  IF THE SHARES
THAT HAVE BEEN AWARDED TO A PARTICIPANT PURSUANT TO THE TERMS OF THE PLAN ARE
NOT REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT, THE COMMITTEE MAY REQUIRE SUCH PARTICIPANT TO
REPRESENT AND AGREE IN WRITING THAT (I) ANY SHARES ACQUIRED BY SUCH PARTICIPANT
PURSUANT TO THE PLAN WILL NOT BE SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER SAID ACT AND (II) SUCH PARTICIPANT IS
ACQUIRING SUCH SHARES FOR HIS OWN ACCOUNT AND NOT WITH A VIEW TO THE
DISTRIBUTION THEREOF.

 

ARTICLE VII

 

AMENDMENT OR TERMINATION OF PLAN

 

The Committee may amend or terminate the Plan and may thereupon change terms and
conditions, in accordance with such amendments, of any Restricted Stock Awards
not theretofore issued, and, with the consent of the grantee, of any previously
issued Restricted Stock Awards.

 

ARTICLE VIII

 

SHARES OF COMMON STOCK SUBJECT TO THE PLAN

 

SECTION .8.01.  NUMBER.  SUBJECT TO ADJUSTMENT AS PROVIDED IN SECTION 5.05 OF
THIS PLAN, THE MAXIMUM AGGREGATE NUMBER OF SHARES WHICH MAY BE ISSUED PURSUANT
TO AWARDS GRANTED UNDER THE PLAN SHALL NOT EXCEED FOUR HUNDRED THOUSAND
(400,000) SHARES.  TO THE EXTENT ANY AWARD GRANTED UNDER THE PLAN SHALL, IN
WHOLE OR IN PART, TERMINATE FOR ANY REASON, OR SHARES SUBJECT TO AN AWARD ARE
WITHHELD TO SATISFY TAX WITHHOLDING OBLIGATIONS OR OTHERWISE RETURNED TO THE
COMPANY PRIOR TO THE LAPSE OF THE RESTRICTIONS HEREUNDER, THE SHARES THAT ARE
SUBJECT TO RESTRICTIONS HEREUNDER AT THE TIME OF TERMINATION OR RETURN SHALL
REVERT TO THE COMPANY AND THEREAFTER BE AVAILABLE FOR FUTURE GRANTS UNDER THE
PLAN.

 

SECTION .8.02.  FUTURE TRANSACTIONS.  THE EXISTENCE OF THE PLAN, ANY AWARD
AGREEMENT AND THE AWARDS GRANTED HEREUNDER SHALL NOT AFFECT OR RESTRICT IN ANY
WAY THE RIGHT OR POWER OF THE COMPANY OR THE SHAREHOLDERS OF THE

 

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COMPANY TO MAKE OR AUTHORIZE ANY ADJUSTMENT, RECAPITALIZATION, REORGANIZATION OR
OTHER CHANGE IN THE COMPANY’S CAPITAL STRUCTURE OR ITS BUSINESS, ANY MERGER OR
CONSOLIDATION OF THE COMPANY, ANY ISSUE OF STOCK OR OF AWARDS, WARRANTS OR
RIGHTS TO PURCHASE STOCK OR OF BONDS, DEBENTURES, PREFERRED OR PRIOR PREFERENCE
STOCKS WHOSE RIGHTS ARE SUPERIOR TO OR AFFECT THE SHARES OR THE RIGHTS THEREOF
OR WHICH ARE CONVERTIBLE INTO OR EXCHANGEABLE FOR SHARES, OR THE DISSOLUTION OR
LIQUIDATION OF THE COMPANY, OR ANY SALE OR TRANSFER OF ALL OR ANY PART OF ITS
ASSETS OR BUSINESS, OR ANY OTHER CORPORATE ACT OR PROCEEDING, WHETHER OF A
SIMILAR CHARACTER OR OTHERWISE.

 

ARTICLE IX

 

MISCELLANEOUS PROVISIONS

 

SECTION .9.01.  SHARES DERIVED FROM RESTRICTED STOCK.  ANY SHARES ISSUED AS A
STOCK DIVIDEND ON, OR AS A RESULT OF STOCK SPLITS, COMBINATIONS, EXCHANGES OF
SHARES, REORGANIZATIONS, MERGERS, CONSOLIDATIONS OR OTHERWISE WITH RESPECT TO,
SHARES ISSUED PURSUANT TO A RESTRICTED STOCK AWARD SHALL HAVE THE SAME STATUS
AND BEAR THE SAME LEGEND AS THE SHARES ISSUED PURSUANT TO THE RESTRICTED STOCK
AWARD.

 

SECTION .9.02.  NOTICES.  EXCEPT AS SPECIFICALLY SET FORTH IN THIS PLAN, ALL
NOTICES AND OTHER COMMUNICATIONS HEREUNDER SHALL BE IN WRITING AND SHALL BE
DEEMED TO HAVE BEEN DULY GIVEN IF DELIVERED IN PERSON OR SENT BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID.

 

SECTION .9.03.  NO EMPLOYMENT RIGHTS.  NOTHING CONTAINED IN THE PLAN OR ANY
AWARD AGREEMENT EXECUTED PURSUANT TO THE PLAN SHALL CONFER UPON THE PARTICIPANT
ANY RIGHT TO CONTINUED EMPLOYMENT BY THE COMPANY OR A SUBSIDIARY OR ANY RIGHT TO
CONTINUE TO BE A MEMBER OF OR TO BE NOMINATED FOR ELECTION TO THE BOARD, OR
LIMIT IN ANY WAY THE RIGHT OF THE COMPANY OR A SUBSIDIARY TO TERMINATE HIS
EMPLOYMENT, WITH OR WITHOUT CAUSE, AT ANY TIME.

 

SECTION .9.04.  SUCCESSOR.  THIS PLAN AND THE OBLIGATIONS HEREUNDER SHALL BE
BINDING ON ANY SUCCESSOR OF THE COMPANY.

 

SECTION .9.05.  EFFECTIVE DATE AND TERM OF THE PLAN.  THE PLAN SHALL BECOME
EFFECTIVE AS PROVIDED HEREIN, AND NO RESTRICTED STOCK AWARDS SHALL BE GRANTED
UNDER THE PLAN AFTER THE TENTH (10TH) ANNIVERSARY OF THE EFFECTIVE DATE.

 

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