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.
(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
3
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 (E) PERPETUATED