EXHIBIT 10.21
OLYMPIC STEEL, INC.
2007 OMNIBUS INCENTIVE PLAN
ARTICLE 1
General Purpose of Plan; Definitions
     1.1 Name and Purposes. The name of this Plan is the Olympic Steel, Inc.
2007 Omnibus Incentive Plan. The purpose of this Plan is to enable Olympic
Steel, Inc. and its Affiliates to (i) attract and retain skilled and qualified
officers, other employees, directors and consultants who are expected to
contribute to the Company’s success by providing long-term incentive
compensation opportunities competitive with those made available by other
companies, (ii) motivate Plan participants to achieve the long-term success and
growth of the Company, (iii) facilitate ownership of shares of the Company and
(iv) align the interests of the Plan participants with those of the Company’s
public Shareholders.
     1.2 Certain Definitions. Unless the context otherwise indicates, the
following words used herein shall have the following meanings whenever used in
this instrument:
     (a) The word “Affiliate” means any corporation, partnership, joint venture
or other entity, directly or indirectly, through one or more intermediaries,
controlling, controlled by, or under common control with the Company as
determined by the Board of Directors in its discretion.
     (b) The word “Award” means any grant under this Plan of a Stock Option,
Stock Appreciation Right, Restricted Shares, Restricted Share Units, Performance
Shares, Cash-Based Awards or Other Stock-Based Awards to any Plan participant.
     (c) The words “Board of Directors” mean the Board of Directors of the
Company, as constituted from time to time.
     (d) The words “Cash-Based Award” mean an Award, denominated in cash,
granted to a Participant as described in Article 10.
     (e) The word “Code” means the Internal Revenue Code of 1986, as amended,
and any lawful regulations or pronouncements promulgated thereunder. Whenever
reference is made to a specific Code section, such reference shall be deemed to
be a reference to any successor Code section or sections with the same or
similar purpose.
     (f) The word “Committee” means the entity administering this Plan as
provided in Section 2.1 hereof or, if none has been appointed, then the Board of
Directors as a whole.
     (g) The words “Common Shares” mean the Common Stock, without par value, of
the Company.

 

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     (h) The word “Company” means Olympic Steel, Inc., a corporation organized
under the laws of the State of Ohio and any successor corporation or business
organization which shall assume the duties and obligations of Olympic Steel,
Inc. under this Plan.
     (i) The words “Date of Grant” mean the date on which the Committee grants
an Award or a future date that the Committee designates at the time of the
Award.
     (j) The word “Director” means a member of the Board of Directors.
     (k) The word “Disability” means a medically determinable physical or mental
impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months and which results in the
Participant: (i) being unable to engage in any substantial gainful activity; or
(ii) receiving income replacement benefits for a period of not less than three
(3) months under an accident or health plan covering employees of the Company.
     (l) The words “Early Retirement” mean a participant’s retirement from
active employment with the Company or an Affiliate on and after the attainment
of age 55.
     (m) The words “Eligible Director” mean a Director of the Company who is
entitled to participate in the Plan pursuant to Section 4.1.
     (n) The acronym “ERISA” means the Employee Retirement Income Security Act
of 1974, as amended and any lawful regulations or pronouncements promulgated
thereunder. Whenever reference is made to a specific ERISA Section, such
reference shall be deemed to be a reference to any successor, ERISA Section or
Sections with the same or similar purpose.
     (o) The words “Exchange Act” mean the Securities Exchange Act of 1934, as
amended, and any lawful regulations or pronouncements promulgated thereunder.
     (p) The words “Exercise Price” mean the purchase price of a Share covered
by a Stock Option.
     (q) The words “Fair Market Value” mean the last closing price of a Share as
reported on The Nasdaq Stock Market, or, if applicable, on another national
securities exchange on which the Common Shares are principally traded, on the
date for which the determination of fair market value is made, or, if there are
no sales of Common Shares on such date, then on the most recent immediately
preceding date on which there were any sales of Common Shares on such principal
trading exchange. If the Common Shares are not or cease to be traded on The
Nasdaq Stock Market or another national securities exchange, the “Fair Market
Value” of Common Shares shall be determined in the manner prescribed by the
Committee. Notwithstanding the foregoing, as of any date, the “Fair Market
Value” of Common Shares shall be determined in a manner consistent with Code
Section 409A and the guidance then existing thereunder.
     (r) The words “Incentive Stock Option” and the acronym “ISO” mean a Stock
Option that is clearly identified as such and which meets the requirements of
Section 422 of the Code, or any successor provision, and therefore qualifies for
favorable tax treatment.

 

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     (s) The words “Non-Qualified Stock Option” and the acronym “NQSO” mean a
Stock Option that: (i) is governed by Section 83 of the Code; and (ii) does not
meet the requirements of Section 422 of the Code.
     (t) The words “Normal Retirement” mean retirement from active employment
with the Company or an Affiliate on or after the age of 65.
     (u) The words “Other Stock-Based Award” mean an equity-based or
equity-related Award not otherwise described in this Plan, granted pursuant to
Article 10.
     (v) The words “Outside Director” mean a Director who meets the definitions
of the terms “outside director” set forth in Section 162(m) of the Code,
“independent director” set forth in The Nasdaq Stock Market, Inc. rules, and
“non-employee director” set forth in Rule 16b-3 under the Exchange Act, or any
successor definitions adopted by the Internal Revenue Service, The Nasdaq Stock
Market, Inc. and Securities and Exchange Commission, respectively, and similar
requirements under any other applicable laws and regulations.
     (w) The word “Parent” means any corporation which qualifies as a “parent
corporation” of the Company under Section 424(e) of the Code.
     (x) The words “Performance Shares” are defined in Article 9.
     (y) The word “Plan” means this Olympic Steel, Inc. 2007 Omnibus Incentive
Plan, as amended from time to time.
     (z) The acronym “QDRO” means a qualified domestic relations order as
defined by the Code.
     (aa) The word “Retirement” means Normal Retirement or Early Retirement.
     (bb) The words “Restricted Shares” are defined in Article 8.
     (cc) The words “Restricted Share Units” are defined in Article 8.
     (dd) The word “Share” or “Shares” means one or more of the Common Shares.
     (ee) The word “Shareholder” means an individual or entity that owns one or
more Shares.
     (ff) The words “Stock Appreciation Rights” and the acronym “SAR” mean any
right pursuant to an Award granted under Article 7.
     (gg) The words “Stock Option” mean any right to purchase a specified number
of Shares at a specified price which is granted pursuant to Article 5 herein and
may be an Incentive Stock Option, a Non-Qualified Stock Option.
     (hh) The words “Stock Power” mean a power of attorney executed by a
participant and delivered to the Company which authorizes the Company to
transfer

 

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ownership of Restricted Shares, Performance Shares or Shares from the
participant to the Company or a third party.
     (ii) The word “Subsidiary” means any corporation which qualifies as a
“subsidiary corporation” of the Company under Section 424(f) of the Code.
     (jj) The word “Vested” means that the time has been reached, with respect
to Stock Options, when the option to purchase Shares first becomes exercisable;
with respect to Stock Appreciation Rights, when the Stock Appreciation Right
first becomes exercisable for payment; with respect to Restricted Shares, when
the Shares are no longer subject to forfeiture and restrictions on
transferability, with respect to Restricted Share Units, Performance Shares, and
Other Stock-Based Awards, when the units are no longer subject to forfeiture and
are convertible to Shares; and with respect to Cash-Based Awards when the
payment of a cash amount is non-forfeitable. The words “Vest” and “Vesting” have
meanings correlative to the foregoing.
ARTICLE 2
Administration
     2.1 Authority and Duties of the Committee.
     (a) The Plan shall be administered by a Committee of not less than three
Directors who are appointed by the Board of Directors and serve at its pleasure.
Unless otherwise determined by the Board of Directors, the Compensation
Committee shall serve as the Committee, and all of the members of the Committee
shall be Outside Directors. Notwithstanding the requirement that the Committee
consist exclusively of Outside Directors, no action or determination by the
Committee or an individual considered to be an Outside Director shall be deemed
void because a member of the Committee or such individual fails to satisfy the
requirements for being an Outside Director, except to the extent required by
applicable law.
     (b) The Committee has the power and authority to grant Awards pursuant to
the terms of this Plan to officers, other employees, Eligible Directors and
consultants.
     (c) In particular, the Committee has the authority, subject to any
limitations specifically set forth in this Plan, to:
     (i) select the officers, employees, Eligible Directors and consultants to
whom Awards are granted;
     (ii) determine the types of Awards granted and the timing of such Awards;
     (iii) determine the number of Shares to be covered by each Award granted
hereunder;

 

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     (iv) determine whether an Award is, or is intended to be,
“performance-based compensation” within the meaning of Section 162(m) of the
Code;
     (v) determine the other terms and conditions, not inconsistent with the
terms of this Plan and any operative employment or other agreement, of any Award
granted hereunder; such terms and conditions include, but are not limited to,
the exercise price, the time or times when Options or Stock Appreciation Rights
may be exercised (which may be based on performance objectives), any vesting,
acceleration or waiver of forfeiture restrictions, any performance criteria
(including any performance criteria as described in Section 162(m)(4)(C) of the
Code) applicable to an Award, and any restriction or limitation regarding any
Option or Stock Appreciation Right or the Common Shares relating thereto, based
in each case on such factors as the Committee, in its sole discretion, shall
determine;
     (vi) determine whether any conditions or objectives related to Awards have
been met, including any such determination required for compliance with Section
162(m) of the Code;
     (vii) subsequently modify or waive any terms and conditions of Awards, not
inconsistent with the terms of this Plan and any operative employment or other
agreement;
     (viii) determine whether, to what extent and under what circumstances,
Shares and other amounts payable with respect to any Award are deferred either
automatically or at the election of the participant;
     (ix) adopt, alter and repeal such administrative rules, guidelines and
practices governing this Plan as it deems advisable from time to time;
     (x) promulgate such administrative forms as they from time to time deem
necessary or appropriate for administration of the Plan;
     (xi) construe, interpret and implement the terms and provisions of this
Plan, any Award and any related agreements;
     (xii) correct any defect, supply any omission and reconcile any
inconsistency in or between the Plan, any Award and any related agreements; and
     (xiii) otherwise supervise the administration of this Plan.
     (d) All decisions made by the Committee pursuant to the provisions of this
Plan are final and binding on all persons, including the Company, its
Shareholders and Plan participants, but may be made by their terms subject to
ratification or approval by the Board of Directors, another committee of the
Board of Directors or Shareholders.
     2.2 Delegation of Authority. The Committee may delegate its powers and
duties under this Plan to the Chief Executive Officer of the Company, subject to
applicable law and such terms, conditions and limitations as the Committee may
establish in its sole discretion; provided,

 

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however, that the Committee may not delegate its powers and duties under this
Plan with regard to Awards to the Company’s executive officers or any
participant who is a “covered employee” as defined in Section 162(m) of the Code
or a Director. The Company shall furnish the Committee with such clerical and
other assistance as is necessary for the performance of the Committee’s duties
under the Plan. In addition, the Committee may delegate ministerial duties to
any other person or persons, and it may employ attorneys, consultants,
accountants or other professional advisers.
ARTICLE 3
Stock Subject to Plan
     3.1 Total Shares Limitation. Subject to the provisions of this Article 3,
the maximum number of Shares that may be issued pursuant to Awards granted under
this Plan is 500,000 Shares, which may be newly-issued Shares or Shares that
have been reacquired in the open market or in private transactions.
     3.2 Other Limitations.
     (a) ISO Limitations. The maximum number of Shares available with respect to
all Stock Options granted under this Plan that may be Incentive Stock Options is
500,000 Shares.
     (b) Participant Limitation. The aggregate number of Shares underlying
Awards granted under this Plan to any one participant in any fiscal year,
regardless of whether such Awards are thereafter canceled, forfeited or
terminated, shall not exceed 50,000 Shares. The maximum aggregate amount awarded
or credited with respect to Cash-Based Awards to any one Participant in any
fiscal year may not exceed $3,000,000.00. The foregoing annual limitations are
intended to include the grant of all Awards, including but not limited to,
Awards representing “performance-based compensation” as described in
Section 162(m)(4)(C) of the Code.
     3.3 Awards Not Exercised. In the event any outstanding Award, or portion
thereof, expires, or is terminated, canceled or forfeited, the Shares that would
otherwise be issuable with respect to the unexercised portion of such expired,
terminated, canceled or forfeited Award shall be available for subsequent Awards
under this Plan.
     3.4 Dilution and Other Adjustments. In the event that the Committee
determines that any dividend or other distribution (whether in the form of cash,
Shares, other securities or other property), recapitalization, stock split,
reverse stock split, reorganization, merger, consolidation, split-up, spin-off,
combination, repurchase 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
affects the Shares such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or
potential benefits intended to be made available under this Plan, then the
Committee may, in such manner as it deems equitable, adjust any or all of
(i) the number and type of Shares (or other securities or other property) which
thereafter may be made the subject of Awards, (ii) the number and type of Shares
(or other securities or other property) subject to outstanding Awards,

 

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(iii) the limitations set forth above and (iv) the purchase or exercise price or
any performance objective with respect to any Award; provided, however, that the
number of Shares or other securities covered by any Award or to which such Award
relates is always a whole number. Notwithstanding the foregoing, the foregoing
adjustments shall be made in compliance with: (i) Sections 422 and 424 of the
Code with respect to ISOs; (ii) Section 162(m) of the Code with respect to
Performance Share Awards unless specifically determined otherwise by the
Committee; (iii) Section 409A of the Code, to the extent the Committee
determines it is necessary to avoid its application or avoid adverse tax
consequences thereunder.
ARTICLE 4
Participants
     4.1 Eligibility. Officers, all other regular active employees of the
Company or any of its Affiliates, Eligible Directors and consultants to the
Company or any of its Affiliates are eligible to participate in this Plan. The
Plan participants shall be selected from time to time by the Committee in its
sole discretion, or, with respect to employees other than executive officers or
participants who are “covered employees” as defined in Section 162(m) of the
Code, by the Chief Executive Officer in his sole discretion with proper
delegation from the Committee.
ARTICLE 5
Stock Option Awards
     5.1 Option Grant. Each Stock Option granted under this Plan (or delegation
of authority to the Chief Executive Officer to grant Stock Options) will be
evidenced by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by a written agreement dated as of the Date of
Grant and executed by the Company and by the Plan participant.
     5.2 Terms and Conditions of Grants. Stock Options granted under this Plan
are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies with respect to
exercisability and/or with respect to the Shares acquired upon exercise, not
inconsistent with the terms of this Plan and any operative employment or other
agreement, as the Committee deems desirable:
     (a) Exercise Price. The Exercise Price fixed at the time of grant will not
be less than 100% of the Fair Market Value of the Shares as of the Date of
Grant. If a variable Exercise Price is specified at the time of grant, the
Exercise Price may vary pursuant to a formula or other method established by the
Committee which provides a floor not less than Fair Market Value as of the Date
of Grant. Except as otherwise provided in Section 3.4 hereof, no subsequent
amendment of an outstanding Stock Option may reduce the Exercise Price to less
than 100% of the Fair Market Value of the Shares as of the Date of Grant.
     (b) Option Term. Any unexercised portion of a Stock Option granted
hereunder shall expire at the end of the stated term of the Stock Option. The
Committee shall determine the term of each Stock Option at the time of grant,
which term shall not exceed ten years from the Date of Grant. The Committee may
extend the term of a Stock Option,

 

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in its discretion, but not beyond the date immediately prior to the tenth
anniversary of the original Date of Grant. If a definite term is not specified
by the Committee at the time of grant, then the term is deemed to be ten years.
     (c) Vesting. Stock Options, or portions thereof, are exercisable at such
time or times as determined by the Committee in its discretion at or after
grant. If the Committee provides that any Stock Option becomes Vested over a
period of time, in full or in installments, the Committee may waive or
accelerate such Vesting provisions at any time.
     (d) Method of Exercise. Vested portions of any Stock Option may be
exercised in whole or in part at any time during the option term by giving
written notice of exercise to the Company specifying the number of Shares to be
purchased. The notice must be given by or on behalf of a person entitled to
exercise the Stock Option, accompanied by payment in full of the Exercise Price,
along with any required tax withholding pursuant to Section 16.3 hereof. The
Exercise Price may be paid:
     (i) in cash;
     (ii) by tendering (by either actual delivery of Shares or by attestation)
previously-owned Shares having an aggregate Fair Market Value on the date of
exercise equal to the Exercise Price applicable to such Stock Option exercise,
and, with respect to the exercise of NQSOs, including Restricted Shares;
     (iii) by a combination of cash and Shares;
     (iv) by authorizing a broker to sell, on behalf of the participant, the
appropriate number of Shares otherwise issuable to the participant upon the
exercise of a Stock Option with the proceeds of sale applied to pay the Exercise
Price and tax withholding; or
     (v) by another method permitted by law which assures full and immediate
payment of the Exercise Price.
     The Committee may prohibit any method of payment for any reason, in its
sole discretion, including but not limited to concerns that the proposed method
of payment will result in adverse financial accounting treatment or adverse tax
treatment for the Company.
     If the Exercise Price of a NQSO is paid by tendering Restricted Shares,
then the Shares received upon the exercise will contain identical restrictions
as the Restricted Shares so tendered. Except as otherwise provided by law and in
the Committee’s sole discretion, required tax withholding may be paid only by
cash, through a same day sale transaction or by withholding Shares.
     (e) Issuance of Shares. The Company will issue or cause to be issued such
Shares promptly upon exercise of the Option. No Shares will be issued until full
payment has been made. Until the issuance (as evidenced by the appropriate entry
on the books of the Company or of a duly authorized transfer agent of the
Company) of the stock certificate

 

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evidencing such Shares, no right to vote or receive dividends or any other
rights as a Shareholder will exist with respect to the Shares, notwithstanding
the exercise of the Option.
     (f) Form. Unless the grant of a Stock Option is designated at the time of
grant as an ISO, it is deemed to be an NQSO. ISOs are also subject to the terms
and conditions stated in Article 6 hereof.
     (g) Special Limitations on Stock Option Awards. Unless an Award agreement
approved by the Committee provides otherwise, Stock Options awarded under this
Plan are intended to meet the requirements for exclusion from coverage under
Code Section 409A and all Stock Option Awards shall be construed and
administered accordingly.
     5.3 Termination of Grants Prior to Expiration. Unless otherwise provided in
an employment or other agreement entered into between the optionee and the
Company and approved by the Committee, either before or after the Date of Grant,
or otherwise specified at or after the time of grant, and subject to Article 6
hereof with respect to ISOs, the following early termination provisions apply to
all Stock Options:
     (a) Termination by Death. If an optionee’s employment or directorship with
the Company or its Affiliates terminates by reason of his or her death, all
Stock Options held by such optionee will immediately become Vested, but
thereafter may only be exercised (by the legal representative of the optionee’s
estate, or by the legatee or heir of the optionee pursuant to a will or the laws
of descent and distribution) for a period of one year (or such other period as
the Committee may specify at or after the time of grant) from the date of such
death, or until the expiration of the original term of the Stock Option,
whichever period is the shorter.
     (b) Termination by Reason of Disability. If an optionee’s employment or
directorship with the Company or its Affiliates terminates by reason of his or
her Disability, all Stock Options held by such optionee will immediately become
Vested, but thereafter may only be exercised for a period of one year (or such
other period as the Committee may specify at or after the time of grant) from
the date of such termination of employment (or of directorship, if applicable),
or until the expiration of the original term of the Stock Option, whichever
period is the shorter. If the optionee dies within such one-year period (or such
other period as applicable), any unexercised Stock Option held by such optionee
will thereafter be exercisable by the legal representative of the optionee’s
estate, or by the legatee or heir of the optionee pursuant to a will or the laws
of descent and distribution, for the greater of the remainder of the one-year
period (or other period as applicable) or for a period of twelve months from the
date of such death, but in no event shall any portion of the Stock Option be
exercisable after its original stated expiration date.
     (c) Termination by Reason of Retirement. If an optionee’s employment or
directorship with the Company or its Affiliates terminates by reason of his or
her Retirement, all Stock Options held by such optionee immediately become
Vested but thereafter may only be exercised for a period of two years (or such
other period as the Committee may specify at or after the time of grant) from
the date of such Retirement, or until the expiration of the original term of the
Stock Option, whichever period is the

 

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shorter. If the optionee dies within such two-year period (or such other period
as applicable), any unexercised Stock Option held by such optionee will
thereafter be exercisable by the legal representative of the optionee’s estate,
or by the legatee or heir of the optionee pursuant to a will or the laws of
descent and distribution, for the greater of the remainder of the two-year
period (or such other period as applicable) or for a period of twelve months
from the date of such death, but in no event shall any portion of the Stock
Option be exercisable after its original stated expiration date.
     (d) Other Termination. If an optionee’s employment or directorship with the
Company or its Affiliates terminates, voluntarily or involuntarily, for any
reason other than death, Disability, Retirement or for Cause, any Vested
portions of Stock Options held by such optionee at the time of termination may
be exercised by the optionee for a period of three months (or such other period
as the Committee may specify at or after the time of grant) from the date of
such termination or until the expiration of the original term of the Stock
Option, whichever period is the shorter. No portion of any Stock Option which is
not Vested at the time of such termination will thereafter become Vested.
ARTICLE 6
Special Rules Applicable to Incentive Stock Options
     6.1 Eligibility. Notwithstanding any other provision of this Plan to the
contrary, an ISO may only be granted to full or part-time employees (including
officers and Directors who are also employees) of the Company or of an
Affiliate, provided that the Affiliate is a Parent or Subsidiary.
     6.2 Special ISO Rules.
     (a) Exercise Price. The Exercise Price fixed at the time of grant will not
be less than 100% of the Fair Market Value of the Shares as of the Date of
Grant. If a variable Exercise Price is specified at the time of grant, the
Exercise Price may vary pursuant to a formula or other method established by the
Committee which provides a floor not less than Fair Market Value as of the Date
of Grant. Except as otherwise provided in Section 3.4 hereof, no subsequent
amendment of an outstanding Stock Option may reduce the Exercise Price to less
than 100% of the Fair Market Value of the Shares as of the Date of Grant.
     (b) Term. No ISO may be exercisable on or after the tenth anniversary of
the Date of Grant, and no ISO may be granted under this Plan on or after the
tenth anniversary of the effective date of this Plan. (See Section 17.1 hereof.)
     (c) Ten Percent Shareholder. No grantee may receive an ISO under this Plan
if such grantee, at the time the Award is granted, owns (after application of
the rules contained in Section 424(d) of the Code) equity securities possessing
more than 10% of the total combined voting power of all classes of equity
securities of the Company, its Parent or any Subsidiary, unless (i) the option
price for such ISO is at least 110% of the Fair Market Value of the Shares as of
the Date of Grant and (ii) such ISO is not exercisable on or after the fifth
anniversary of the Date of Grant.

 

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     (d) Limitation on Grants. The aggregate Fair Market Value (determined with
respect to each ISO at the time such ISO is granted) of the Shares with respect
to which ISOs are exercisable for the first time by a grantee during any
calendar year (under this Plan or any other plan adopted by the Company or its
Parent or its Subsidiary) shall not exceed $100,000. If such aggregate fair
market value shall exceed $100,000, such number of ISOs as shall have an
aggregate fair market value equal to the amount in excess of $100,000 shall be
treated as NQSOs.
     (e) Non-Transferability. Notwithstanding any other provision herein to the
contrary, no ISO granted hereunder (and, if applicable, related Stock
Appreciation Right) may be transferred except by will or by the laws of descent
and distribution, nor may such ISO (or related Stock Appreciation Right) be
exercisable during a grantee’s lifetime other than by him (or his guardian or
legal representative to the extent permitted by applicable law).
     (f) Termination of Employment. No ISO may be exercised more than three
months following termination of employment for any reason (including retirement)
other than death or disability, nor more than one year following termination of
employment for the reason of death or disability (as defined in Section 422 of
the Code), or such option will no longer qualify as an ISO and shall thereafter
be, and receive the tax treatment applicable to, an NQSO. For this purpose, a
termination of employment is cessation of employment with the Company, a Parent
or a Subsidiary.
     (g) Fair Market Value. For purposes of any ISO granted hereunder (or, if
applicable, related Stock Appreciation Right), the Fair Market Value of Shares
shall be determined in the manner required by Section 422 of the Code.
     6.3 Subject to Code Amendments. The foregoing limitations are designed to
comply with the requirements of Section 422 of the Code and shall be
automatically amended or modified to comply with amendments or modifications to
Section 422 or any successor provisions. Any ISO which fails to comply with
Section 422 of the Code is automatically treated as a NQSO appropriately granted
under this Plan provided it otherwise meets the Plan’s requirements for NQSOs.
ARTICLE 7
Stock Appreciation Rights
     7.1 SAR Grant and Agreement. Stock Appreciation Rights may be granted under
this Plan, either independently or in conjunction with the grant of a Stock
Option. Each SAR granted under this Plan (or delegation of authority to the
Chief Executive Officer to grant SARs) will be evidenced by minutes of a
meeting, or by a unanimous written consent without a meeting, of the Committee
and by a written agreement dated as of the Date of Grant and executed by the
Company and by the Plan participant.
     7.2 SARs Granted in Conjunction with Option. Stock Appreciation Rights may
be granted in conjunction with all or part of any Stock Option granted under
this Plan, either at the same time or after the grant of the Stock Option, and
will be subject to the following terms and conditions:

 

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     (a) Term. Each Stock Appreciation Right, or applicable portion thereof,
granted with respect to a given Stock Option or portion thereof terminates and
is no longer exercisable upon the termination or exercise of the related Stock
Option, or applicable portion thereof.
     (b) Exercisability. A Stock Appreciation Right is exercisable only at such
time or times and to the extent that the Stock Option to which it relates is
Vested and exercisable in accordance with the provisions of Article 5 hereof or
otherwise as the Committee may determine at or after the time of grant.
     (c) Method of Exercise. A Stock Appreciation Right may be exercised by the
surrender of the applicable portion of the related Stock Option. Stock Options
which have been so surrendered, in whole or in part, are no longer exercisable
to the extent the related Stock Appreciation Rights have been exercised and are
deemed to have been exercised for the purpose of the limitation set forth in
Article 3 hereof on the number of Shares to be issued under this Plan, but only
to the extent of the number of Shares actually issued under the Stock
Appreciation Right at the time of exercise. Upon the exercise of a Stock
Appreciation Right, subject to satisfaction of tax withholding requirements
pursuant to Section 16.3, the holder of the Stock Appreciation Right is entitled
to receive up to, but not more than, an amount in cash or Shares equal in value
to the excess of the Fair Market Value of one Share over the Exercise Price per
Share specified in the related Stock Option, multiplied by the number of Shares
in respect of which the Stock Appreciation Right is exercised, with the
Committee having the right in its discretion to determine the form of payment.
At any time the Exercise Price per Share of the related Stock Option does not
exceed the Fair Market Value of one Share, the holder of the Stock Appreciation
Right shall not be permitted to exercise such right.
     7.3 Independent SARs. Stock Appreciation Rights may be granted without
related Stock Options, and independent Stock Appreciation Rights will be subject
to the following terms and conditions:
     (a) Term. Any unexercised portion of an independent Stock Appreciation
Right granted hereunder shall expire at the end of the stated term of the Stock
Appreciation Right. The Committee shall determine the term of each Stock
Appreciation Right at the time of grant, which term shall not exceed ten years
from the Date of Grant. The Committee may extend the term of a Stock
Appreciation Right, in its discretion, but not beyond the date immediately prior
to the tenth anniversary of the original Date of Grant. If a definite term is
not specified by the Committee at the time of grant, then the term is deemed to
be ten years.
     (b) Exercisability. A Stock Appreciation Right is exercisable, in whole or
in part, at such time or times as determined by the Committee at or after the
time of grant.
     (c) Method of Exercise. A Stock Appreciation Right may be exercised in
whole or in part during the term by giving written notice of exercise to the
Company specifying the number of Shares in respect of which the Stock
Appreciation Right is being exercised. The notice must be given by or on behalf
of a person entitled to exercise the Stock Appreciation

 

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Right. Upon the exercise of a Stock Appreciation Right, subject to satisfaction
of tax withholding requirements pursuant to Section 16.3, the holder of the
Stock Appreciation Right is entitled to receive an amount in cash or Shares
equal in value to the excess of the Fair Market Value of a Share on the exercise
date over the Fair Market Value of a Share on the Date of Grant multiplied by
the number of Stock Appreciation Rights being exercised, with the Committee
having the right in its discretion to determine the form of payment. At any time
the Fair Market Value of a Share on a proposed exercise date does not exceed the
Fair Market Value of a Share on the Date of Grant, the holder of the Stock
Appreciation Right shall not be permitted to exercise such right.
     (d) Early Termination Prior to Expiration. Unless otherwise provided in an
employment or other agreement entered into between the holder of the Stock
Appreciation Right and the Company and approved by the Committee, either before
or after the Date of Grant, or otherwise specified at or after the Date of
Grant, the early termination provisions set forth in Section 5.3 as applied to
Non-Qualified Stock Options will apply to independent Stock Appreciation Rights.
     7.4 Other Terms and Conditions of SAR Grants. Stock Appreciation Rights are
subject to such other terms and conditions, not inconsistent with the provisions
of this Plan and any operative employment or other agreement, as are determined
from time to time by the Committee.
     7.5 Special Limitations on SAR Awards. Unless an Award agreement approved
by the Committee provides otherwise, Stock Appreciation Rights awarded under
this Plan are intended to meet the requirements for exclusion from coverage
under Code Section 409A and all Stock Appreciation Rights Awards shall be
construed and administered accordingly.
ARTICLE 8
Restricted Share and Restricted Share Unit Awards
     8.1 Restricted Share Grants and Agreements. Restricted Share Awards consist
of Shares which are issued by the Company to a participant at no cost or at a
purchase price determined by the Committee which may be below their Fair Market
Value but which are subject to forfeiture and restrictions on their sale or
other transfer by the participant. Each Restricted Share Award granted under
this Plan (or delegation of authority to the Chief Executive Officer to make
Restricted Share Awards) will be evidenced by minutes of a meeting, or by a
unanimous written consent without a meeting, of the Committee and by a written
agreement dated as of the Date of Grant and executed by the Company and by the
Plan participant. The timing of Restricted Share Awards and the number of Shares
to be issued (subject to Section 3.2 hereof) are to be determined by the
Committee in its discretion. By accepting a grant of Restricted Shares, the
participant agrees to remit to the Company when due any required tax withholding
as provided in Section 16.3 hereof.
     8.2 Terms and Conditions of Restricted Share Grants. Restricted Shares
granted under this Plan are subject to the following terms and conditions,
which, except as otherwise provided herein, need not be the same for each
participant, and may contain such additional terms, conditions, restrictions and
contingencies not inconsistent with the terms of this Plan and any operative
employment or other agreement, as the Committee deems desirable:

 

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     (a) Purchase Price. The Committee shall determine the prices, if any, at
which Restricted Shares are to be issued to a participant, which may vary from
time to time and among participants and which may be below the Fair Market Value
of such Shares at the Date of Grant.
     (b) Restrictions. All Restricted Shares issued under this Plan will be
subject to such restrictions as the Committee may determine, which may include,
without limitation, the following:
     (i) a prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Shares, such prohibition to lapse at such time or times as the
Committee determines (whether in installments, at the time of the death,
Disability or Retirement of the holder of such shares, or otherwise, but subject
to the Change in Control provisions in Article 12);
     (ii) a requirement that the participant forfeit such Restricted Shares in
the event of termination of the participant’s employment or directorship with
the Company or its Affiliates prior to Vesting;
     (iii) a prohibition against employment or retention of the participant by
any competitor of the Company or its Affiliates, or against dissemination by the
participant of any secret or confidential information belonging to the Company
or an Affiliate; and
     (iv) any applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The Nasdaq Stock
Market or any other stock exchange or transaction reporting system upon which
such Restricted Shares are then listed or quoted and any state laws, rules and
regulations, including “blue sky” laws.
     (v) such additional restrictions as are required to avoid adverse tax
consequences under Code Section 409A.
The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse. However, if the Committee determines
that restrictions lapse upon the attainment of specified performance objectives,
then the provisions of Sections 9.2 and 9.3 will apply (including, but not
limited to, the enumerated performance objectives). If the written agreement
governing an award provides that such Award is intended to be “performance-based
compensation,” the provisions of Section 9.4(d) will also apply.
     (c) Delivery of Shares. Restricted Shares will be registered in the name of
the participant and deposited, together with a Stock Power, with the Company.
Each such certificate will bear a legend in substantially the following form:
     “The transferability of this certificate and the Common Shares represented
by it are subject to the terms and conditions (including conditions of
forfeiture) contained in the Olympic Steel, Inc. 2007 Omnibus Incentive Plan of
the Company, and an agreement

 

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entered into between the registered owner and the Company. A copy of this Plan
and agreement are on file in the office of the Secretary of the Company.”
At the end of any time period during which the Restricted Shares are subject to
forfeiture and restrictions on transfer, such Shares will be delivered free of
all restrictions (except for any pursuant to Section 15.2 hereof) to the
participant and with the foregoing legend removed.
     (d) Forfeiture of Shares. If a participant who holds Restricted Shares
fails to satisfy the restrictions, Vesting requirements and other conditions
relating to the Restricted Shares prior to the lapse, satisfaction or waiver of
such restrictions and conditions, except as may otherwise be determined by the
Committee, the participant shall forfeit the Shares and transfer them back to
the Company in exchange for a refund of any consideration paid by the
participant or such other amount which may be specifically set forth in the
Award agreement. A participant shall execute and deliver to the Company one or
more Stock Powers with respect to Restricted Shares granted to such participant.
     (e) Voting and Other Rights. Except to the extent prohibited by Section
162(m) of the Code and the terms of the applicable Restricted Share Agreement,
during any period in which Restricted Shares are subject to forfeiture and
restrictions on transfer, the participant holding such Restricted Shares shall
have all the rights of a Shareholder with respect to such Shares, including,
without limitation, the right to vote such Shares and the right to receive any
dividends paid with respect to such Shares.
     8.3 Restricted Share Unit Awards and Agreements. Restricted Share Unit
Awards consist of Shares that will be issued to a participant at a future time
or times at no cost or at a purchase price determined by the Committee which may
be below their Fair Market Value if continued employment, continued directorship
and/or other terms and conditions specified by the Committee are satisfied. Each
Restricted Share Unit Award granted under this Plan (or delegation of authority
to the Chief Executive Officer to make Restricted Share Unit Awards) will be
evidenced by minutes of a meeting, or by a unanimous written consent without a
meeting, of the Committee and by a written agreement dated as of the Date of
Grant and executed by the Company and the Plan participant. The timing of
Restricted Share Unit Awards and the number of Restricted Share Units to be
awarded (subject to Section 3.2 hereof) are to be determined by the Committee in
its sole discretion. By accepting a Restricted Share Unit Award, the participant
agrees to remit to the Company when due any required tax withholding as provided
in Section 16.3 hereof.
     8.4 Terms and Conditions of Restricted Share Unit Awards. Restricted Share
Unit Awards are subject to the following terms and conditions, which, except as
otherwise provided herein, need not be the same for each participant, and may
contain such additional terms, conditions, restrictions and contingencies not
inconsistent with the terms of this Plan and any operative employment or other
agreement, as the Committee deems desirable:
     (a) Purchase Price. The Committee shall determine the prices, if any, at
which Shares are to be issued to a participant after Vesting of Restricted Stock
Units, which may vary from time to time and among participants and which may be
below the Fair Market Value of Shares at the Date of Grant.

 

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     (b) Restrictions. All Restricted Share Units awarded under this Plan will
be subject to such restrictions as the Committee may determine, which may
include, without limitation, the following:
     (i) a prohibition against the sale, transfer, pledge or other encumbrance
of the Restricted Share Unit;
     (ii) a requirement that the participant forfeit such Restricted Share Unit
in the event of termination of the participant’s employment or directorship with
the Company or its Affiliates prior to Vesting;
     (iii) a prohibition against employment of the participant by, or provision
of services by the participant to, any competitor of the Company or its
Affiliates, or against dissemination by the participant of any secret or
confidential information belonging to the Company or an Affiliate; and
     (iv) any applicable requirements arising under the Securities Act of 1933,
as amended, other securities laws, the rules and regulations of The Nasdaq Stock
Market or any other stock exchange or transaction reporting system upon which
the Common Shares are then listed or quoted and any state laws, rules and
interpretations, including “blue sky” laws.
     (v) such additional restrictions as are required in order to avoid adverse
tax consequences under Code Section 409A.
The Committee may at any time waive such restrictions or accelerate the date or
dates on which the restrictions will lapse.
     (c) Performance-Based Restrictions. The Committee may, in its sole
discretion, provide restrictions that lapse upon the attainment of specified
performance objectives. In such case, the provisions of Sections 9.2 and 9.3
will apply (including, but not limited to, the enumerated performance
objectives). If the written agreement governing an Award provides that such
Award is intended to be “performance-based compensation,” the provisions of
Section 9.4(d) will also apply.
     (d) Voting and Other Rights. A participant holding Restricted Share Units
shall not be deemed to be a Shareholder solely because of such units. Such
participant shall have no rights of a Shareholder with respect to such units;
provided that Restricted Share Units may provide for the payment of dividends or
dividend equivalents if so provided in the written agreement governing such
units.
     (e) Lapse of Restrictions. If a participant who holds Restricted Share
Units satisfies the restrictions and other conditions relating to the Restricted
Share Units prior to the lapse or waiver of such restrictions and conditions,
the Restricted Share Units shall be converted to, or replaced with, Shares which
are free of all restrictions except for any restrictions required pursuant to
Section 15.2 hereof. Notwithstanding the foregoing, the Committee may, in lieu
of the conversion and distribution of the Restricted Share Units, establish
procedures to permit deferral of Restricted Stock Units of one or more
participants who are

 

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highly compensated employees or members of a select group of management in
accordance with the terms of a deferred compensation plan sponsored by the
Company.
     (f) Forfeiture of Restricted Share Units. If a participant who holds
Restricted Share Units fails to satisfy the restrictions, Vesting requirements
and other conditions relating to the Restricted Share Units prior to the lapse,
satisfaction or waiver of such restrictions and conditions, except as may
otherwise be determined by the Committee, the participant shall forfeit the
Restricted Share Units.
     (g) Termination. A Restricted Stock Unit Award or unearned portion thereof
will terminate without the issuance of Shares on the termination date specified
on the Date of Grant or upon the termination of employment or directorship of
the participant during the time period or periods specified by the Committee
during which any performance objectives must be met (the “Performance Period”).
If a participant’s employment or directorship with the Company or its Affiliates
terminates by reason of his or her death, Disability or Retirement, the
Committee in its discretion at or after the Date of Grant may determine that the
participant (or the heir, legatee or legal representative of the participant’s
estate) will receive a distribution of Shares in an amount which is not more
than the number of Shares which would have been earned by the participant if
100% of the performance objectives for the current Performance Period had been
achieved prorated based on the ratio of the number of months of active
employment in the Performance Period to the total number of months in the
Performance Period. However, with respect to Awards intended to be
performance-based compensation (as described in Section 9.4(d)), distribution of
the Shares shall not be made prior to attainment of the relevant performance
objectives.
     8.5 Time Vesting of Restricted Share and Restricted Share Unit Awards.
Restricted Shares or Restricted Share Units, or portions thereof, are
exercisable at such time or times as determined by the Committee in its
discretion at or after grant, subject to the restrictions on time Vesting set
forth in this Section. If the Committee provides that any Restricted Shares or
Restricted Share Unit Awards become Vested over time (with or without a
performance component), the Committee may waive or accelerate such Vesting
provisions at any time, subject to the restrictions on time Vesting set forth in
this Section.
ARTICLE 9
Performance Share Awards
     9.1 Performance Share Awards and Agreements. A Performance Share Award is a
right to receive Shares in the future conditioned upon the attainment of
specified performance objectives and such other conditions, restrictions and
contingencies as the Committee may determine. Each Performance Share Award
granted under this Plan (or delegation of authority to the Chief Executive
Officer to make Performance Share Awards) will be evidenced by minutes of a
meeting, or by a unanimous written consent without a meeting, of the Committee
and by a written agreement dated as of the Date of Grant and executed by the
Company and by the Plan participant. The timing of Performance Share Awards and
the number of Shares covered by each Award (subject to Section 3.2 hereof) are
to be

 

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determined by the Committee in its discretion. By accepting a grant of
Performance Shares, the participant agrees to remit to the Company when due any
required tax withholding or payment of cash as provided in Section 16.3 hereof.
     9.2 Performance Objectives. At the time of grant of a Performance Share
Award, the Committee will specify the performance objectives which, depending on
the extent to which they are met, will determine the number of Shares that will
be distributed to the participant. The Committee also will specify the time
period or periods (the “Performance Period”) during which the performance
objectives must be met. The performance objectives and periods need not be the
same for each participant nor for each Award. The Committee may use performance
objectives based on one or more of the following targets: stock price, market
share, sales, earnings per share, return on equity, return on invested capital,
costs, earnings, capital adjusted pre-tax earnings (economic profit), earnings
before income taxes, depreciation, and amortization, net income, operating
income, performance profit (operating income minus an allocated charge
approximating the Company’s cost of capital, before or after tax), gross margin,
revenue, working capital, total assets, net assets, stockholders’ equity and
cash flow. The Committee may designate a single goal criterion or multiple goal
criteria for performance measurement purposes, with the measurement based on
absolute Company or business unit performance and/or on performance as compared
with that of other publicly-traded companies. The foregoing criteria may have
any reasonable definitions that the Committee may specify, which may include or
exclude any or all of the following items, as the Committee may specify:
extraordinary, unusual, or non-recurring items; effects of accounting changes;
effects of currency fluctuations; effects of financing activities (e.g., effect
on earnings per share of issuing convertible debt securities); effects of price
escalators; expenses for restructuring or productivity initiatives;
non-operating items; acquisition expenses; and effects of divestitures. Any such
performance criterion or combination of such criteria may apply to a
participant’s Award opportunity in its entirety or to any designated portion or
portions of the Award opportunity, as the Committee may specify.
     9.3 Adjustment of Performance Objectives. The Committee may modify, amend
or otherwise adjust the performance objectives specified for outstanding
Performance Share Awards if it determines that an adjustment would be consistent
with the objectives of this Plan and taking into account the interests of the
participants. Any such adjustments must comply with the requirements of Section
162(m) of the Code to the extent applicable unless the Committee indicates a
contrary intention. The types of events which could cause an adjustment in the
performance objectives include, without limitation, accounting changes which
substantially affect the determination of performance objectives, changes in
applicable laws or regulations which affect the performance objectives, and
divisive corporate reorganizations, including spin-offs and other distributions
of property or stock.
     9.4 Other Terms and Conditions. Performance Share Awards granted under this
Plan are subject to the following terms and conditions and may contain such
additional terms, conditions, restrictions and contingencies not inconsistent
with the terms of this Plan and any operative employment or other agreement as
the Committee deems desirable:
     (a) Delivery of Award. As soon as practicable after the applicable
Performance Period has ended, the participant will receive a distribution of the
number of Shares earned during the Performance Period, depending upon the extent
to which the applicable performance objectives were achieved. Such Shares will
be registered in the name of the

 

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participant and will be free of all restrictions except for any pursuant to
Section 15.2 hereof.
     (b) Termination. A Performance Share Award or portion thereof that has not
been earned will terminate and be forfeited without the issuance of Shares on
the termination date specified at the time of grant or upon the termination of
employment or directorship of the participant during the Performance Period. If
a participant’s employment or directorship with the Company or its Affiliates
terminates by reason of his or her death, Disability or Retirement (except with
respect to Awards that are designated pursuant to paragraph (d) below as subject
to Section 162(m)(4)(c) of the Code), the Committee in its discretion at or
after the time of grant may determine, notwithstanding any Vesting requirements
under Section 9.4(a), that the participant (or the heir, legatee or legal
representative of the participant’s estate) will receive a distribution of a
portion of the participant’s then-outstanding Performance Share Awards in an
amount which is not more than the number of shares which would have been earned
by the participant if 100% of the performance objectives for the current
Performance Period had been achieved prorated based on the ratio of the number
of months of active employment in the Performance Period to the total number of
months in the Performance Period. However, with respect to Awards intended to be
“performance-based compensation” (as described in Section 9.4(e)), distribution
of the Shares shall not be made prior to attainment of the relevant performance
objective.
     (c) Voting and Other Rights. Awards of Performance Shares do not provide
the participant with voting rights or rights to dividends prior to the
participant becoming the holder of record of Shares issued pursuant to an Award.
Prior to the issuance of Shares, Performance Share Awards may not be sold,
transferred, pledged, assigned or otherwise encumbered.
     (d) Performance-Based Compensation. The Committee may designate Performance
Share Awards as being “remuneration payable solely on account of the attainment
of one or more performance goals” as described in Section 162(m)(4)(C) of the
Code. Such Awards shall be automatically amended or modified to comply with
amendments to Section 162 of the Code to the extent applicable, unless the
Committee indicates a contrary intention.
     9.5 Time Vesting of Performance Share Awards. Performance Share Awards, or
portions thereof, are exercisable at such time or times as determined by the
Committee in its discretion at or after grant, subject to the restrictions on
time Vesting set forth in this Section. If the Committee provides that any
Performance Shares become Vested over time (accelerated by a performance
component), the Committee may waive or accelerate such Vesting provisions at any
time, subject to the restrictions on time Vesting set forth in this Section.
     9.6 Special Limitations on Performance Share Awards. Unless an Award
agreement approved by the Committee provides otherwise, Performance Shares
awarded under this Plan are intended to meet the requirements for exclusion from
coverage under Code Section 409A and all Performance Share Awards shall be
construed and administered accordingly.

 

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ARTICLE 10
Cash-Based Awards and Other Stock-Based Awards
     10.1 Grant of Cash-Based Awards. Subject to the terms of the Plan, the
Committee may, at any time and from time to time, grant Cash-Based Awards to
Participants in such amounts and upon such terms as the Committee may determine.
The Committee may designate Cash-Based Awards to a participant as being
“performance-based compensation” subject to Section 9.4(d).
     10.2 Other Stock-Based Awards. The Committee may grant other types of
equity-based or equity-related Awards not otherwise described in this Plan
(including the grant or offer for sale of unrestricted Shares) in such amounts
and subject to such terms and conditions as the Committee shall determine. Such
Awards may involve the transfer of actual Shares to participants, or payment in
cash or otherwise of amounts based on the value of Shares. The Committee may
designate Other Stock-Based Awards to a participant as being “performance-based
compensation” subject to Section 9.4(d).
     10.3 Value of Cash-Based Awards and Other Stock-Based Awards.. Each
Cash-Based Award shall specify a payment amount or payment range as determined
by the Committee. Each Other Stock-Based Award shall be expressed in terms of
Shares or units based on Shares, as determined by the Committee. The Committee
may establish performance objectives in its sole discretion. If the Committee
exercises its discretion to establish performance objectives, then Sections 9.2
and 9.3 will apply
     10.4 Payment of Cash-Based Awards and Other Stock-Based Awards. Any payment
with respect to a Cash-Based Award or an Other Stock-Based Award shall be made
in accordance with the terms of the Award, in cash or Shares, as the Committee
determines.
     10.5 Termination of Employment. The Committee shall determine the extent to
which a participant shall have the right to receive Cash-Based Awards or Other
Stock-Based Awards following termination of the participant’s employment with,
or provision of services to, the Company and Subsidiaries, as the case may be.
Such provisions shall be determined in the sole discretion of the Committee,
such provisions may be included in an agreement entered into with each
participant, but need not be uniform among all Awards of Cash-Based Awards or
Other Stock-Based Awards issued pursuant to the Plan and may reflect
distinctions based on the reasons for termination.
ARTICLE 11
Transfers and Leaves of Absence
     11.1 Transfer of Participant. For purposes of this Plan, except as provided
in Section 6.2(f) with respect to Incentive Stock Options, the transfer of a
participant among the Company and its Affiliates is deemed not to be a
termination of employment.
     11.2 Effect of Leaves of Absence. For purposes of this Plan, the following
leaves of absence are deemed not to be a termination of employment:

 

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     (a) a leave of absence, approved in writing by the Company, for military
service, sickness or any other purpose approved by the Company, if the period of
such leave does not exceed 90 days;
     (b) a leave of absence in excess of 90 days, approved in writing by the
Company, but only if the employee’s right to reemployment is guaranteed either
by a statute or by contract, and provided that, in the case of any such leave of
absence, the employee returns to work within 30 days after the end of such
leave; and
     (c) any other absence determined by the Committee in its discretion not to
constitute a break in service.
ARTICLE 12
Effect of Change of Control
     12.1 Change of Control Defined. Change of Control. The words “Change of
Control” shall mean, but not be limited to:
     (a) the first purchase of shares pursuant to a tender offer or exchange
(other than a tender offer or exchange by the Company and/or any affiliate
thereof) for all or part of the Company’s Common Shares of any class or any
securities convertible into such Common Shares and the Participant has elected
not to tender or exchange his Common Shares;
     (b) the receipt by the Company of a Schedule 13D or other advice indicating
that a person is the “beneficial owner” (as that term is defined in Rule 13d-3
under the Securities Exchange Act of 1934) of twenty percent (20%) or more of
the Company’s Common Shares calculated as provided in paragraph (d) of said
Rule 13d-3;
     (c) the date of approval by shareholders of the Company of an agreement
providing for any consolidation or merger of the Company in which the Company
will not be the continuing or surviving corporation or pursuant to which shares
of capital stock, of any class or any securities convertible into such capital
stock, of the Company would be converted into cash, securities, or other
property, other than a merger of the Company in which the holders of common
stock of all classes of the Company immediately prior to the merger would have
the same proportion of ownership of common stock of the surviving corporation
immediately after the merger;
     (d) the date of approval by shareholders of the Company of any sale, lease,
exchange, or other transfer (in one transaction or a series of related
transactions) of all or substantially all the assets of the Company;
     (e) the adoption of any plan or proposal for the liquidation (but not a
partial liquidation) or dissolution of the Company; or
     (f) the date (the “Measurement Date”) on which the individuals who at the
beginning of a two consecutive year period ending on the Measurement Date,
cease, for any reason, to constitute at least a majority of the Board of
Directors of the Company,

 

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unless the election, or the nomination for election by the Company’s
shareholders, of each new Director during such two-year period was approved by
an affirmative vote of the Directors (including any Participant) then still in
office who were Directors at the beginning of said two-year period.
     Notwithstanding the foregoing, (i) if any person’s ownership interest in
the Company increases to 20% or more, solely as a result of the Company’s
repurchase of its shares, or (ii) Michael D. Siegal increases his ownership
interest to 20% or more, such ownership shall not be considered a Change of
Control for purposes of subparagraph (b) above.
     12.2 Acceleration of Award. Except as otherwise provided in this Plan or an
Award agreement, immediately upon the occurrence of a Change of Control:
     (a) all outstanding Stock Options automatically become fully exercisable;
     (b) all Restricted Share Awards automatically become fully Vested;
     (c) all Restricted Share Unit Awards automatically become fully Vested (or,
if such Restricted Share Unit Awards are subject to performance-based
restrictions, shall become Vested on a prorated basis as described in
Section 12.2(d)) and, to the extent Vested, convertible to Shares at the
election of the holder;
     (d) all participants holding Performance Share Awards become entitled to
receive a partial payout in an amount which is the number of Shares which would
have been earned by the participant if 100% of the performance objectives for
the current Performance Period had been achieved prorated based on the ratio of
the number of months of active employment in the Performance Period to the total
number of months in the Performance Period; and
     (e) Stock Appreciation Rights automatically become fully Vested and fully
exercisable.
     (f) all participants holding Cash-Based Awards become entitled to a payout
of such amounts.
     (g) Other Stock-Based Awards automatically become fully Vested.
ARTICLE 13
Transferability of Awards
     13.1 Awards Are Non-Transferable. Except as provided in Sections 13.2 and
13.3, Awards are non-transferable and any attempts to assign, pledge,
hypothecate or otherwise alienate or encumber (whether by operation of law or
otherwise) any Award shall be null and void.
     13.2 Inter-Vivos Exercise of Awards. During a participant’s lifetime,
Awards are exercisable only by the participant or, as permitted by applicable
law and notwithstanding Section 13.1 to the contrary, the participant’s guardian
or other legal representative.

 

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     13.3 Limited Transferability of Certain Awards. The Committee, in its
discretion, may allow at or after the time of grant the transferability of
Awards which are Vested, provided that the permitted transfer is made
(a) pursuant to a QDRO or other applicable domestic relations order to the
extent permitted by law; (b) if the Award is an Incentive Stock Option, the
transfer is consistent with Section 422 of the Code; (c) to the Company (for
example in the case of forfeiture of Restricted Shares), an Affiliate or a
person acting as the agent of the foregoing or which is otherwise determined by
the Committee to be in the interests of the Company; or (d) by the participant
for no consideration to Immediate Family Members or to a bona fide trust,
partnership or other entity controlled by and for the benefit of one or more
Immediate Family Members. “Immediate Family Members” means the participant’s
spouse, children, stepchildren, parents, stepparents, siblings (including half
brothers and sisters), in-laws and other individuals who have a relationship to
the participant arising because of a legal adoption. No transfer may be made to
the extent that transferability would cause Form S-8 or any successor form
thereto not to be available to register Shares related to an Award. The
Committee in its discretion may impose additional terms and conditions upon
transferability.
ARTICLE 14
Amendment and Discontinuation
     14.1 Amendment or Discontinuation of this Plan. The Board of Directors or
the Committee may amend, alter, or discontinue this Plan at any time, provided
that no amendment, alteration, or discontinuance may be made which would
materially and adversely affect the rights of a participant under any Award
granted prior to the date such action is adopted by the Board of Directors or
the Committee without the participant’s written consent thereto.
     14.2 Amendment of Grants. The Committee may amend, prospectively or
retroactively, the terms of any outstanding Award, provided that no such
amendment may be inconsistent with the terms of this Plan (specifically
including the prohibition on granting Stock Options with an Exercise Price less
than 100% of the Fair Market Value of the Common Shares on the Date of Grant) or
would materially and adversely affect the rights of any holder without his or
her written consent.
     14.3 Effect of Non-Approval of this Plan. This Plan shall cease to be
operative if it is not approved by a majority of the outstanding Shares present
(in person, telephonically, electronically, by proxy or its equivalent or as
otherwise permitted by the Company’s governing documents) and entitled to vote
on the approval of this Plan at a meeting of Shareholders of the Company. In the
event of such a cessation, any Awards under the Plan shall be revoked and this
Plan shall be deemed null and void ab initio. In the event of such a cessation,
the Company, the Board of Directors and the Committee shall not be liable for
any such Awards under this Plan.
ARTICLE 15
Share Certificates
     15.1 Delivery of Share Certificates. The Company is not required to issue
or deliver any certificates for Shares issuable with respect to Awards under
this Plan prior to the fulfillment of all of the following conditions:

 

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     (a) payment in full for the Shares and for any required tax withholding
(See Section 16.3 hereof);
     (b) completion of any registration or other qualification of such Shares
under any Federal or state laws or under the rulings or regulations of the
Securities and Exchange Commission or any other regulating body which the
Committee in its discretion deems necessary or advisable;
     (c) admission of such Shares to listing on The Nasdaq Stock Market or any
stock exchange on which the Shares are listed;
     (d) in the event the Shares are not registered under the Securities Act of
1933, qualification as a private placement under said Act;
     (e) obtaining of any approval or other clearance from any Federal or state
governmental agency which the Committee in its discretion determines to be
necessary or advisable; and
     (f) the Committee is fully satisfied that the issuance and delivery of
Shares under this Plan is in compliance with applicable Federal, state or local
law, rule, regulation or ordinance or any rule or regulation of any other
regulating body, for which the Committee may seek approval of counsel for the
Company.
     15.2 Applicable Restrictions on Shares. Shares issued with respect to
Awards may be subject to such stock transfer orders and other restrictions as
the Committee may determine necessary or advisable under any applicable Federal
or state securities law rules, regulations and other requirements, the rules,
regulations and other requirements of The Nasdaq Stock Market or any stock
exchange upon which the Shares are then-listed, and any other applicable Federal
or state law and will include any restrictive legends the Committee may deem
appropriate to include.
     15.3 Book Entry. In lieu of the issuance of stock certificates evidencing
Shares, the Company may use a “book entry” system in which a computerized or
manual entry is made in the records of the Company to evidence the issuance of
such Shares. Such Company records are, absent manifest error, binding on all
parties.
ARTICLE 16
General Provisions
     16.1 No Implied Rights to Awards, Employment or Directorship. No potential
participant has any claim or right to be granted an Award under this Plan, and
there is no obligation of uniformity of treatment of participants under this
Plan. Neither this Plan nor any Award thereunder shall be construed as giving
any individual any right to continued employment or continued directorship with
the Company or any Affiliate. The Plan does not constitute a contract of
employment, and the Company and each Affiliate expressly reserve the right at
any time to

 

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terminate employees free from liability, or any claim, under this Plan, except
as may be specifically provided in this Plan or in an Award agreement.
     16.2 Other Compensation Plans. Nothing contained in this Plan prevents the
Board of Directors from adopting other or additional compensation arrangements,
subject to Shareholder approval if such approval is required, and such
arrangements may be either generally applicable or applicable only in specific
cases.
     16.3 Withholding. Each participant must, no later than the date as of which
the value of an Award first becomes includible in the gross income of the
participant for income tax purposes, pay, in cash, to the Company, or make
arrangements satisfactory to the Company regarding payment of, any Federal,
state or local taxes of any kind required by law or other amounts to be withheld
with respect to the Award. Participants may elect, subject to the approval of
the Committee, to satisfy the withholding requirement, in whole or in part, by
having the Company withhold Shares or sell Shares on the open market having a
Fair Market Value on the date the withholding amount is to be determined in an
amount not to exceed the total tax that could be imposed on the transaction. All
such elections shall be irrevocable, made in writing, and signed by the
participant, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate. The obligations of the
Company under this Plan are conditioned on such payment, and the Company, to the
extent permitted by law, has the right to deduct any such taxes or other amounts
from any payment of any kind otherwise due to a participant, with or without
such participant’s consent.
     16.4 Rule 16b-3 Compliance. The Plan is intended to comply with all
applicable conditions of Rule 16b-3 of the Exchange Act, as such rule may be
amended from time to time. All transactions involving any participant subject to
Section 16(a) shall be subject to the conditions set forth in Rule 16b-3,
regardless of whether such conditions are expressly set forth in this Plan. Any
provision of this Plan that is contrary to Rule 16b-3 does not apply to such
participants.
     16.5 Code Section 162(m) Compliance. The Plan is intended to comply with
all applicable requirements of Section 162(m) of the Code with respect to
“performance-based compensation.” Unless the Committee shall otherwise
determine, all transactions involving any participant the deductibility of whose
compensation is subject to Section 162(m) of the Code shall be subject to such
requirements, regardless of whether such requirements are expressly set forth in
this Plan. Unless the Committee shall otherwise determine, any provision of this
Plan that is contrary to such requirements does not apply to such participants.
     16.6 Successors. All obligations of the Company with respect to Awards
granted under this Plan are binding on any successor to the Company, whether as
a result of a direct or indirect purchase, merger, consolidation or otherwise of
all or substantially all of the business and/or assets of the Company.
     16.7 Severability. In the event any provision of this Plan, or the
application thereof to any person or circumstances, is held illegal or invalid
for any reason, the illegality or invalidity shall not affect the remaining
parts of this Plan, or other applications, and this Plan is to be construed and
enforced as if the illegal or invalid provision had not been included.

 

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     16.8 Governing Law. To the extent not preempted by Federal law, this Plan
and all Award agreements pursuant thereto are construed in accordance with and
governed by the laws of the State of Ohio. This Plan is not intended to be
governed by ERISA and shall be so construed and administered.
ARTICLE 17
Effective Dates
     17.1 Effective Date. Subject to the approval of the Shareholders of the
Company at the Annual Meeting of Shareholders held in 2007, the effective date
of this Olympic Steel, Inc. 2007 Omnibus Incentive Plan is the date of its
adoption by the Board of Directors on February 10, 2007.