DIRECTOR OR
DISCRETIONARY PARTICIPANT WHO HAS ENTERED INTO AN OPTION AGREEMENT WITH THE
COMPANY PURSUANT TO THIS PLAN.
(U)
"PLAN" MEANS THIS HAYNES INTERNATIONAL, INC. STOCK OPTION PLAN AS
PROVIDED HEREIN AND AS MAY BE AMENDED FROM TIME TO TIME.
(V)
"PLAN OF REORGANIZATION" MEANS THE FIRST AMENDED PLAN OF
REORGANIZATION FOR THE COMPANY THAT WAS FILED WITH THE UNITED STATES BANKRUPTCY
COURT SOUTHERN DISTRICT INDIANAPOLIS DIVISION AND APPROVED ON AUGUST 16, 2004.
(W)
"RETIREMENT" MEANS IN THE CASE OF THE CEO, A RESIGNATION BY THE CEO
AFTER HAVING REACHED AGE FIFTY-FIVE (55), BUT IN NO EVENT PRIOR TO SEPTEMBER 30,
2007, AND, IN THE CASE OF ANY OTHER PARTICIPANT, A RESIGNATION AFTER REACHING
AGE FIFTY-FIVE (55) AND COMPLETING AT LEAST FIVE (5) YEARS OF SERVICE WITH THE
COMPANY, BUT IN NO EVENT PRIOR TO SEPTEMBER 30, 2007.
(X)
"RULE 16B-3" MEANS RULE 16B-3 PROMULGATED UNDER THE EXCHANGE ACT
OR ANY SUCCESSOR TO RULE 16B-3, AS IN EFFECT FROM TIME TO TIME.
(Y)
"SHARE" MEANS A SHARE OF COMMON STOCK OF THE COMPANY AUTHORIZED
UNDER THE PLAN OF REORGANIZATION, AS MAY BE ADJUSTED IN ACCORDANCE WITH SECTION
5(B) BELOW.
(Z)
"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.
(AA)
"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.
3
(BB)
"TERMINATED FOR CAUSE," "TERMINATION FOR CAUSE" OR "CAUSE" MEANS,
(I) IF THE OPTIONEE IS A PARTY TO AN EMPLOYMENT OR SERVICE AGREEMENT WITH THE
COMPANY OR ITS SUBSIDIARIES AND SUCH AGREEMENT PROVIDES FOR A DEFINITION OF
CAUSE, THE DEFINITION THEREIN CONTAINED, OR, (II) IF NO SUCH AGREEMENT EXISTS, A
TERMINATION BY REASON OF THE GOOD FAITH DETERMINATION OF THE BOARD THAT THE
OPTIONEE (A) CONTINUALLY FAILED TO SUBSTANTIALLY PERFORM HIS DUTIES WITH THE
COMPANY (OTHER THAN A FAILURE RESULTING FROM THE OPTIONEE'S MEDICALLY DOCUMENTED
INCAPACITY DUE TO PHYSICAL OR MENTAL ILLNESS), INCLUDING, WITHOUT LIMITATION,
REPEATED REFUSAL TO FOLLOW THE REASONABLE DIRECTIONS OF THE BOARD, KNOWING
VIOLATION OF THE LAW IN THE COURSE OF PERFORMANCE OF THE OPTIONEE'S DUTIES WITH
THE COMPANY OR A SUBSIDIARY, REPEATED ABSENCES FROM WORK WITHOUT A REASONABLE
EXCUSE, OR INTOXICATION WITH ALCOHOL OR ILLEGAL DRUGS WHILE ON THE COMPANY'S OR
A SUBSIDIARY'S PREMISES DURING REGULAR BUSINESS HOURS, (B) ENGAGED IN CONDUCT
WHICH CONSTITUTED A MATERIAL BREACH OF SUCH OPTIONEE'S EMPLOYMENT AGREEMENT (IF
APPLICABLE), (C) WAS INDICTED (OR EQUIVALENT UNDER APPLICABLE LAW), CONVICTED OF
OR ENTERED A PLEA OF NOLO CONTENDERE TO THE COMMISSION OF A FELONY OR CRIME
INVOLVING DISHONESTY OR MORAL TURPITUDE, OR (D) ENGAGED IN CONDUCT WHICH IS
DEMONSTRABLY AND MATERIALLY INJURIOUS TO THE FINANCIAL CONDITION, BUSINESS
REPUTATION, OR OTHERWISE OF THE COMPANY OR ITS SUBSIDIARIES OR AFFILIATES, OR