Document:

ex_338449.htm

 

Exhibit 4.31

 

 

JOINDER AND FIFTH AMENDMENT TO

THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

 

This JOINDER AND FIFTH AMENDMENT TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Agreement”) is entered into as of October 1, 2021 by and among OLYMPIC STEEL, INC., an Ohio corporation (“Olympic Steel”), OLYMPIC STEEL LAFAYETTE, INC., an Ohio corporation (“Olympic Lafayette”), OLYMPIC STEEL MINNEAPOLIS, INC., a Minnesota corporation (“Olympic Minneapolis”), OLYMPIC STEEL IOWA, INC., an Iowa corporation (“Olympic Iowa”), OLY STEEL NC, INC., a Delaware corporation (“Oly NC”), IS ACQUISITION, INC., an Ohio corporation (“IS Acquisition”), CHICAGO TUBE AND IRON COMPANY, a Delaware corporation (“Chicago Tube and Iron”), B METALS, INC., an Ohio corporation (“B Metals”), MCI, INC., an Ohio corporation (“MCI”), ACT ACQUISITION, INC., a Texas corporation (“ACT”) (Olympic Steel, Olympic Lafayette, Olympic Minneapolis, Olympic Iowa, Oly NC, IS Acquisition, Chicago Tube and Iron, B Metals, MCI, and ACT, collectively, “Existing Borrowers”), and SHAQ, INC., a Georgia corporation (the “Joining Borrower” and together with the Existing Borrowers, the "Borrowers" and each a "Borrower"), BANK OF AMERICA, N.A., a national banking association, as agent for Lenders (together with its successors and assigns, “Agent”), and Lenders party hereto.

 

RECITALS

 

A.         Existing Borrowers, Lenders and Agent are party to that certain Third Amended and Restated Loan and Security Agreement, dated as of December 8, 2017 (as such agreement may be amended, restated, or otherwise modified from time to time, the “Loan Agreement”) pursuant to which Lenders have agreed to make certain loans and extend certain other financial accommodations to Borrowers as provided therein. Terms defined in the Loan Agreement, where used in this Agreement, shall have the same meanings in this Agreement as are prescribed by the Loan Agreement;

 

B.         Olympic Steel and Joining Borrower are contemplating acquiring (the “Acquisition”) the Purchased Assets (as defined in the Acquisition Agreement described below) of Shaw Stainless, LLC, a Georgia limited liability company (“Shaw Stainless”), Architectural Stainless Products, LLC, a Georgia limited liability company (“Architectural Stainless”), Shaw Fab, LLC, a Georgia limited liability company (“Shaw Fab”), Barrier Defense Systems, LLC, a Georgia limited liability company (“Barrier”, and collectively with Shaw Stainless, Architectural Stainless, and Shaw Fab, “Target”), on or about the date hereof, which assets shall be owned by the Joining Borrower, a wholly owned subsidiary of Olympic Steel, all pursuant to the terms of that certain Asset Purchase Agreement dated as of October 1, 2021 (the “Acquisition Agreement”) by and among, the Joining Borrower, the Target, and Bryan Shaw;

 

C.         The Joining Borrower and the Existing Borrowers will derive substantial direct and indirect benefit from the Loans and Letters of Credit under the Loan Documents to be made or issued by Lenders and Issuing Bank to or for the benefit of the Existing Borrowers and/or the Joining Borrower and the other financial accommodations to the Borrowers and their respective Subsidiaries as may be made available by the Lenders;

 

D.         The Existing Borrowers have requested the Agent and the Lenders agree to certain amendments as described herein; and

 

E.         The Joining Borrower is willing to become a Borrower under the Loan Documents as hereinafter provided in order to obtain such benefits;

 

NOW, THEREFORE, in consideration of the terms and conditions contained herein, and of any loans or financial accommodations heretofore, now, or hereafter made to or for the benefit of the Obligors by Lenders, it hereby is agreed as follows:

 

ARTICLE 1

JOINDER TO LOAN AGREEMENT

 

Section 1.1    Joinder. The Joining Borrower agrees to, and does hereby, become a “Borrower” under the Loan Agreement and become bound by the Loan Agreement with the same force and effect as if it were an original party to the Loan Agreement. Each party hereto hereby acknowledges and agrees that each reference in the Loan Agreement to a “Borrower” shall also mean and be a reference to the Joining Borrower.

 

 

 

 

(a)    Joint and Several Liability. Without limiting the generality of the foregoing, subject to and in accordance with the Loan Agreement, the Joining Borrower hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Agent and Lenders the prompt payment and performance of, all Obligations of each Borrower to the Lenders arising under the Loan Agreement and any other Loan Document (and, for the avoidance of doubt, each of the Existing Borrowers hereby agrees that it is jointly and severally liable for, and absolutely and unconditionally guarantees to Agent and Lenders the prompt payment and performance of, all Obligations of the Joining Borrower to the Lenders arising under the Loan Agreement and any other Loan Document).

 

(b)    Security Interests. Without limiting the generality of the foregoing, subject to and in accordance with Section 7 of the Loan Agreement, the Joining Borrower hereby assigns and pledges to Agent, its successors and assigns, for the ratable benefit of the Secured Parties and hereby grants to Agent, its successors and assigns, for the ratable benefit of the Secured Parties, as security for the payment or performance in full of the Obligations, a security interest in all right, title and interest of the Joining Borrower in, to and under any and all of the Collateral now owned or at any time hereafter acquired by the Joining Borrower or in which the Joining Borrower now has or at any time in the future may acquire any right, title or interest.

 

(c)    Representations and Warranties. The Joining Borrower represents, warrants, acknowledges and affirms with respect to itself and its properties, that each of the representations and warranties contained in the Loan Agreement and the other Loan Documents as it relates to the Joining Borrower is true and correct in all material respects (except where any such representation or warranty is otherwise qualified by materiality, in which case such representation or warranty is true and correct in all respects) as of the date hereof, with the same effect as though such representation or warranty had been made on and as of the date hereof after giving effect to the joinder of the Joining Borrower as an additional Borrower and Obligor under the Loan Agreement and the other Loan Documents.

 

(d)    Loan Documents. The Joining Borrower joins and agrees to be obligated and bound by all the terms, provisions and covenants under each of the Loan Documents which are intended to be binding on a Borrower, including, without limitation, that certain Pledge Agreement dated as of June 30, 2010 (together with all amendments thereto) by and among each of the pledgors signatory thereto and the Agent.

 

(e)    Acknowledgement. The Borrower Agent and each Existing Borrower hereby acknowledges and consents to the Loan Documents, as amended or supplemented by this Agreement, and confirms and ratifies in all respects the Obligations of each Borrower under the Loan Documents to which it is a party, as so amended or supplemented, which shall remain in full force and effect.

 

(f)    Borrower Agent. The Joining Borrower hereby appoints the Borrower Agent as representative and agent for all purposes under the Loan Documents as further specified in Section 4.4 of the Loan Agreement.

 

Section 1.2    Loan Agreement Amendments. Effective upon the date of the Acquisition as a “Permitted Acquisition” under the Loan Agreement, Schedule 1.2 Amortization Schedule (M&E) shall be replaced by a new Schedule 1.2, attached as Exhibit A, and each of the following schedules to the Loan Agreement shall be supplemented with the corresponding schedules as Exhibit B, delivered by the Borrowers to and approved by the Agent on such date:

 

	 	Schedule 8.5	 	Deposit Accounts (Joining Borrower only)
	 	Schedule 8.6.1	 	Business Locations (Joining Borrower only)
	 	Schedule 9.1.4	 	Names and Capital Structure (Joining Borrower only)
	 	Schedule 9.1.11	 	Patents, Trademarks, Copyrights and Licenses (Joining Borrower only)

 

 

ARTICLE 2

MISCELLANEOUS

 

Section 2.1    Conditions to Effectiveness. This Agreement shall become effective on the date upon satisfaction or waiver of the following conditions precedent, as determined by Agent in its sole discretion (the “Effective Date”):

 

(a)    this Agreement shall have been duly executed and delivered by Agent, each Borrower and each Lender;

 

 

 

 

(b)    Agent shall have received (i) pro forma financial statements of the Borrowers and each of their Subsidiaries after giving effect to the consummation of the Acquisition, including projections of the Aggregate Borrowing Base and Availability and (ii) in the case of demonstrating compliance with subclause (B)(ii) of the definition of “Permitted Acquisitions”, a pro forma Compliance Certificate, in form and substance satisfactory to Agent to demonstrate compliance with the requirements of clause (f) of the definition of “Permitted Acquisitions”;

 

(c)    with respect to the Joining Borrower, Agent shall have been authorized to make all filings or recordations necessary to perfect its Liens in the Collateral, and shall have received UCC and Lien searches and other evidence satisfactory to Agent that such Liens are the only Liens upon the Collateral, except Permitted Liens;

 

(d)    Agent shall have received that certain Pledge Amendment, in form and substance satisfactory to Agent, dated as of the date hereof, executed by Olympic Steel in favor of Agent;

 

(e)    Agent shall have received that certain Perfection Certificate, in form and substance satisfactory to Agent, dated as of the date hereof, with respect to the Joining Borrower;

 

(f)    Agent shall have received the certain Fourth Amended and Restated Notes, in form and substance satisfactory to Agent, dated as of the date hereof;

 

(g)    Agent shall have received a certificate, in form and substance satisfactory to it, from a knowledgeable Senior Officer of the Borrower Agent certifying that (i) the Acquisition has been consummated in accordance with the Acquisition Agreement, (ii) the Acquisition constitutes a “Permitted Acquisition” under the Loan Agreement, and including the calculations therefor in reasonable detail, (iii) before and after giving effect to this Agreement, no Default or Event of Default exists, and (iv) before and after giving effect to this Agreement, the representations and warranties set forth in the Loan Agreement are true and correct in all material respects;

 

(h)    Agent shall have received a certificate of a duly authorized officer of the Joining Borrower, certifying (i) that the copies thereto attached of such Joining Borrower’s charter documents, certified by the Secretary of State or other appropriate official of the Joining Borrower’s jurisdiction of organization, and organization documents are true and complete, and in full force and effect, without amendment except as shown; (ii) that the copy of resolutions authorizing execution and delivery of this Agreement attached thereto is true and complete, and that such resolutions are in full force and effect, were duly adopted, have not been amended, modified, revoked or contradicted by any other resolution; and (iii) to the title, name and signature of each Person authorized to sign this Agreement and other Loan Documents on behalf of the Joining Borrower;

 

(i)    Agent shall have received a written opinion of Jones Day, as counsel to the Borrowers, in form and substance reasonably satisfactory to Agent;

 

(j)    Agent shall have received a duly executed copy of the Acquisition Agreement and all material agreements related thereto, certified by the Borrower Agent as true, complete and executed copies;

 

(k)    Agent shall have received good standing certificates for Joining Borrower issued by the Secretary of State or other appropriate official of the Joining Borrower’s jurisdiction of organization and each jurisdiction where the Joining Borrower’s conduct of business or ownership of Property necessitates qualification and where the failure to be so qualified could reasonably be expected to have a Material Adverse Effect;

 

(l)    Agent shall have received copies of policies or certificates of insurance for the insurance policies carried by or covering the Joining Borrower, together with lender’s loss payee endorsements, all in compliance with the Loan Documents;

 

(m)    Upon request of any Lender made at least ten days prior to the Effective Date, Joining Borrower shall have provided to such Lender the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the Patriot Act, or other requirements of Applicable Law or other requirements set forth in Section 14.16 of the Loan Agreement, in each case at least five days prior to the Effective Date; and

 

 

 

 

(n)    All documentation and other matters incident to this Agreement shall be satisfactory to the Agent in its sole discretion.

 

Section 2.2    Representations, Warranties, and Covenants of Borrowers. Each Borrower hereby represents and warrants that as of the Effective Date (a) no event has occurred and is continuing which constitutes a Default or an Event of Default, (b) the representations and warranties of such Borrower contained in the Loan Agreement and the other Loan Documents are true and correct in all material respects on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent such representations and warranties specifically relate to an earlier date, in which case they are true and correct in all material respects as of such earlier date, (c) the execution and delivery by such Borrower of this Agreement and the performance by such Borrower of the Loan Agreement, as amended by this Agreement, are within such Borrower’s corporate powers and have been duly authorized by all necessary action, (d) this Agreement and the Loan Agreement, as amended by this Agreement, are legal, valid, and binding obligations of such Borrower enforceable against such Borrower in accordance with their terms, except to the extent that the enforceability thereof may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting creditors’ rights and by equitable principles (regardless of whether enforcement is sought in equity or at law), and (e) the execution and delivery by such Borrower of this Agreement and the performance by such Borrower of the Loan Agreement, as amended by this Agreement, do not require the consent of any Person (other than that which has been obtained) and do not contravene the terms of such Borrower’s Organic Documents, any Restrictive Agreement or any other indenture, agreement, or undertaking to which such Borrower is a party or by which such Borrower or any of its property is bound.

 

Section 2.3    Fees, Costs, and Expenses. Subject to and in accordance with Section 3.4 of the Loan Agreement, Borrowers agree to pay on demand all reasonable costs and expenses of Agent in connection with the preparation, negotiation, execution and delivery, and closing of this Agreement and all related documentation, including the fees and out-of-pocket expenses of counsel for Agent with respect thereto.

 

Section 2.4    Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto as separate counterparts, each of which counterparts, when so executed and delivered, shall be deemed to be an original and all of which counterparts, when taken together, shall constitute but one and the same agreement. A telecopy, pdf or similar electronic file of any such executed counterpart shall be deemed valid and may be relied upon as an original.

 

Section 2.5    Effect; Ratification.

 

(a)    Except as specifically set forth above, the Loan Agreement and the other Loan Documents shall remain unmodified and in full force and effect and are hereby ratified and confirmed.

 

(b)    The execution, delivery and effectiveness of this Agreement shall not operate as a waiver of (a) any right, power or remedy of Agent or any Lender under the Loan Agreement or any other Loan Document, nor constitute amendment of any provision of the Loan Agreement or any other Loan Document, except as specifically set forth herein, or (b) any Default or Event of Default. Upon the effectiveness of this Agreement, each reference in the Loan Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Loan Agreement as amended hereby.

 

(c)    Each Borrower acknowledges and agrees that the amendments set forth herein are effective solely for the purposes set forth herein and that the execution and delivery by Agent and Lenders of this Agreement shall not be deemed (i) to be a consent to any amendment, waiver or modification of any term or condition of the Loan Agreement or of any other Loan Document, (ii) to create a course of dealing or otherwise obligate Agent or Lenders to forbear, waive, consent or execute similar amendments under the same or similar circumstances in the future, or (iii) to amend, prejudice, relinquish or impair any right of Agent or Lenders to receive any indemnity or similar payment from any Person or entity as a result of any matter arising from or relating to this Agreement.

 

(d)    This Agreement shall constitute a Loan Document.

 

Section 2.6    Reaffirmation. Each Borrower hereby acknowledges and reaffirms all of its obligations and undertakings under each of the Loan Documents to which it is a party and acknowledges and agrees that subsequent to, and after taking account of the provisions of this Agreement, each such Loan Document is and shall remain in full force and effect in accordance with the terms thereof.

 

 

 

 

Section 2.7    No Oral Agreements. THIS WRITTEN AGREEMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.

 

Section 2.8    GOVERNING LAW. THIS AMENDMENT, UNLESS OTHERWISE SPECIFIED, SHALL BE GOVERNED BY THE LAWS OF THE STATE OF ILLINOIS, WITHOUT GIVING EFFECT TO ANY CONFLICT OF LAW PRINCIPLES (BUT GIVING EFFECT TO FEDERAL LAWS RELATING TO NATIONAL BANKS).

 

Section 2.9    Post-Closing. The Borrowers shall complete each of the tasks and other items set forth below at the following times (or such later date as Agent may agree in writing (including, via e-mail transmission)) in a manner satisfactory to Agent:

 

(a)         Within forty-five (45) days following the date hereof, the Borrowers shall open a new collections Deposit Account at Bank of America, N.A. for the Joining Borrower and deliver to Agent a duly executed Deposit Account Control Agreement for such Deposit Account;

 

(b)         Within ten (10) Business Days following the date hereof, the Borrowers shall provide filed UCC-3 terminations for each of the financing statements filed by U.S. Bank Equipment Finance against Shaw Stainless, LLC (file numbers 007-2019-032010, 007-2020-020498 and 007-2020-053627) and the U.S. Small Business Administration against Shaw Stainless Steel (file number 038-2020-022409); and

 

(c)         Within thirty (30) days following the date hereof, the Borrowers shall provide a Lender Loss Payee Endorsement and copy of the property insurance policy, in each case, with respect to the insurance maintained by Joining Borrower.

 

[Signature Pages Follow]

 

 

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written above.

 

 

JOINING BORROWER:

 

SHAQ, INC.

 

 

By:         /s/ Richard A. Manson                  

Name: Richard A. Manson

Title: Chief Financial Officer

 

 

EXISTING BORROWERS:

 

OLYMPIC STEEL, INC.

OLYMPIC STEEL LAFAYETTE, INC.

OLYMPIC STEEL MINNEAPOLIS, INC.

OLYMPIC STEEL IOWA, INC.

OLY STEEL NC, INC.

IS ACQUISITION, INC.

CHICAGO TUBE AND IRON COMPANY

B METALS, INC.

ACT ACQUISITION, INC.

MCI, INC.

 

 

By:         /s/ Richard A. Manson                  

Name: Richard A. Manson

Title:         Chief Financial Officer and Secretary

 

 

 

 

	 	AGENT AND LENDERS:

 

	
			 

			 

				
			 

			 

			BANK OF AMERICA, N.A.,

			as Agent and Lender

			 

			 

			By:         ____________________________________

			Name:     ____________________________________

			Title:       ____________________________________

			

 

	 	
			AGENT AND LENDERS:

			 

			BANK OF AMERICA, N.A.,

			as Agent and Lender

			 

			 

			By:                                                                                               

			Name:       Thomas H. Herron

			Title:         Senior Vice President

			

 

	 	
			THE HUNTINGTON NATIONAL BANK,

			as Lender

			 

			By:                                                                                                        

			Name:       Nelson D. Rauscher

			Title:         Vice President

			

 

	 	
			KEYBANK NATIONAL ASSOCIATION,

			as Lender

			 

			 

			By:                                                                                               

			Name:                                                                                                                                                        

			Title:                                                                                   

			

 

	 	
			WELLS FARGO BANK, NATIONAL

			ASSOCIATION, as Lender

			 

			 

			By:                                                                                     

			Name:         David Wisniewski

			Title:                                                                                    

			
	 	
			 

			BMO HARRIS BANK N.A.,

			as Lender

			 

			 

			By:                                                                                      

			Name:         Name: Quinn Heiden

			Title:           Title: Managing Directorex_338450.htm

Exhibit 10.22

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

OLYMPIC STEEL, INC.

 

C-SUITE LONG-TERM INCENTIVE PLAN

 

 

Effective: January 1, 2022

 

 

 

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

 

 

 

	ARTICLE 1 – Overview	1
	ARTICLE 2 – Stock Incentive	2
	APPENDIX A	6
	APPENDIX B	7

 

 

 

 

ARTICLE 1 – OVERVIEW

 

 

Adoption of Plan; Relation to Omnibus Plan; Administration

 

Olympic Steel, Inc. has adopted the Olympic Steel, Inc. C-Suite Long-Term Incentive Plan (the “Plan”) on the terms set forth herein.

 

The Plan operates under and is subject to the Amended and Restated Olympic Steel, Inc. 2007 Omnibus Incentive Plan, as may be amended from time-to-time, (the “Omnibus Plan”). Words and phrases used herein with capital letters that are defined in the Omnibus Plan are used herein as so defined.

 

The Restricted Stock Units that may be granted under Article 2 of the Plan constitute Restricted Share Unit Awards under Article 8 of the Omnibus Plan. The Performance Stock Units that may be granted under Article 2 of the Plan constitute Performance Share Awards under Article 9 of the Omnibus Plan.

 

The Plan shall be administered pursuant to Article 2 of the Omnibus Plan.

 

Eligibility

 

As of the effective date, the Plan is available to the Chief Executive Officer (CEO), the Chief Operating Officer (COO), the President, and the Chief Financial Officer (CFO) (as determined by the Committee or its delegee) of Olympic Steel, Inc. (the “Company” or “Olympic Steel”). Notwithstanding the foregoing, additional future participants may become eligible as determined by the Committee or its delegee. Notwithstanding the foregoing, no participant under the Plan shall have any rights to any of the Awards described herein unless and until definitive Award Agreements are issued pursuant to the terms of the Omnibus Plan.

 

Effective Date

 

The Plan is effective January 1, 2022 and runs annually from January 1 to December 31 of each year, with a grant contemplated at the beginning of each year. The Plan may be changed, amended, suspended or terminated by the Committee and the Board of Directors; provided, however, that no amendment of the Plan will adversely affect any Award previously granted hereunder unless agreed to in writing by the Company and the recipient of such Award.

 

 

 

 

ARTICLE 2 – STOCK AND CASH INCENTIVE

 

 

Annual Grant -Restricted Stock Units, Performance Stock Units and Cash Incentives:

 

In each calendar year, the Committee may award eligible participants a long-term incentive of both a Restricted Stock Unit (“RSU”) grant and a Performance Stock Unit (“PSU”) grant pursuant to the Omnibus Plan, with such terms and conditions as set forth in this Plan. The date upon which any RSU or PSU is granted is referred to herein as the “RSU Grant Date” or “PSU Grant Date” respectively. Additionally, the Committee may offer a long-term cash incentive (“Cash Incentive”) to supplement both the RSU and PSU grants in order to arrive at the Total Long-Term Award Target, as identified on Appendix A. The Total Long-Term Award Target will be identified and communicated to the participants by the Committee on an annual basis. The Cash Incentive will be service-based, and performance-based and shall be split equally between the service and performance metrics, as outlined on Appendix A. The performance-based Cash Incentive will be calculated in the same fashion as the PSU, as outlined in Appendix B. An example of an annual grant can be found in Appendix A.

 

Notwithstanding the forgoing, if the Company’s stock value on the date of the RSU Grant Date and PSU Grant Date is sufficient to meet the Total Long Term Award Target, no Cash Incentive will be awarded to the participant.

In order to receive an annual grant of the RSUs, PSUs and, if applicable, the Cash Incentive, the participant must be employed by the Company on the applicable grant date.

The PSUs will vest if certain performance thresholds are met, as outlined in Appendix B.

 

Vesting

 

Except in the situations provided below, each RSU Award and service-based Cash Incentive under this Plan shall vest on the date that is 3 years after the RSU Grant Date, subject to the eligible participant remaining employed by the Company through such time. Each vested RSU will convert into the right to receive one share of Olympic Steel common stock and shall be delivered to the participant as provided for below, except as may otherwise be set forth in the applicable Award Agreement. The value of the service-based Cash Incentive will not change.

 

Except in the situations provided below, each PSU Award and performance-based Cash Incentive under this Plan shall vest on the date that is 3 years after the PSU Grant Date, subject to the eligible participant remaining employed by the Company through such time and the applicable performance goals being satisfied at least at the threshold level. Each vested PSU will convert into the right to receive one share of Olympic Steel common stock and shall be delivered to the participant as provided for below, except as may otherwise be set forth in the applicable Award Agreement. The value of the PSU Award and performance-based Incentive is subject to the performance grid found in Appendix B as may be adjusted for the applicable year in which the Award is granted and set forth in the applicable Award Agreement. The Cash Incentive will be paid as provided for below.

 

The date that is 3 years following the RSU Grant Date, PSU Grant Date, or date that the Cash Incentive is granted, as applicable, is referred to herein as the “Vesting Date.”

 

Conversion and Pro-Ration:

 

In the event of the participant’s “separation from service” due to retirement at age 62 or later, death or Disability prior to applicable the vesting date, the amount of the RSU, PSU and the Cash Incentive that shall automatically vest upon such “separation from service” shall be pro-rated based on the number of days remaining until the original Vesting Date, provided, however, that for Awards that are subject to performance goals, such pro-rated amounts shall only fully vest to the extent that the applicable performance goals are ultimately satisfied. For example, assume a participant is awarded 3,000 RSUs and 3,000 PSUs and a Cash Incentive of $180,000 on January 1, 2022, the vesting date is January 1, 2025, and the participant retires on January 1, 2024. In this event (i) the participant would vest in 2,000 RSUs (3,000 x (2/3) = 2,000) as of the date of retirement, 2,000 PSUs (3,000 x (2/3) = 2,000) would have an opportunity to vest based upon the level at which the performance goals are ultimately satisfied at the end of the applicable performance period (potentially up to 150% or 3,000 PSUs in total based upon the level at which the applicable performance goals are ultimately satisfied), (iii) $60,000 in respect of the time-based Cash Incentive ($180,000 x 1⁄2 that is time-based x (2/3) = $60,000) of the Cash Incentive would vest as of the date of retirement, and (iv) up to $90,000 of the performance-based Cash Incentive ($180,000 x 1⁄2 that is performance-based x (2/3) x the applicable performance multiplier of up to 150%) could vest based upon the level at which the performance goals are ultimately satisfied.

 

 

 

 

Except as otherwise provided herein, participants whose employment with the Company terminates for any reason other than as expressly set forth herein, will forfeit the unvested RSUs, PSUs, and the Cash Incentive. Furthermore, to the extent that any PSU or performance-based Cash Incentive does not satisfy the performance conditions as of the end of the applicable performance period, such Awards shall immediately expire at the end of the performance period.

 

Change-in-control:

 

In the event a change-in-control (as defined in the “Miscellaneous” section below) of the Company occurs, the acquiring, surviving or successor or other entity in such change-in-control may replace an outstanding Award that is not yet vested as of the date of the change-in-control with an equity award that preserves the existing value of the unvested portion of the Award and has terms and conditions (including the schedule by which such Award vests or the restrictions lapse) that are at least as favorable to the participant as the terms and conditions in effect immediately prior to the change-in-control (a “Replacement Award”). A Replacement Award granted in replacement of an outstanding unvested PSU or outstanding unvested performance-based Cash Incentive shall be deemed a Replacement Award under the Plan only if (i) it is subject to time-based vesting and (ii) its value is determined at the target level of the performance goals applicable to the outstanding unvested Award it replaces.

 

All Replacement Awards will remain outstanding following the change-in-control in accordance with their terms, provided that if a participant’s employment is terminated by the Company without “cause” or by the participant for “good reason” (each, as defined in the participant’s Management Retention Agreement with the Company, and each, a “Qualifying Termination”), during the one year period following such change-in-control, such Replacement Awards shall become fully vested. For the avoidance of doubt, the Replacement Award shall continue to have the same settlement or payment date as provided in its original grant.

 

If a Replacement Award is not provided in respect of an outstanding unvested Award in the event of a change-in-control, then the outstanding Award shall become immediately vested (with any performance goals deemed satisfied at the target level of achievement) upon the change-in-control.

 

Notwithstanding any of the foregoing, an Award Agreement may provide for different treatment of Awards in the event of a change-in-control.

 

Settlement of RSUs, PSUs and Cash Incentive

One share of Olympic Steel common stock will be delivered for each RSU or PSU on the first to occur of the following events, to the extent that such RSU or PSU is vested as of such time:

 

	 	
			●

				
			Within 90 days after the Vesting Date.

			

 

	 	
			●

				
			Subject to the pro-ration provision above, Olympic Steel common stock attributable to RSUs and PSUs that are vested at the time of the participant’s “separation from service” shall be delivered to the participant within 90 days after the “separation from service.”

			

 

	 	
			●

				
			Olympic Steel common stock attributable to RSUs and PSUs that are vested or become vested at the time of a change-in-control shall be delivered to the participant within 30 days following the change-in-control. If a participant is age 62 or older at the time of the change-in-control and is eligible for the retirement, an amount of the RSU or PSU, pro-rated based on the number of days remaining until the Vesting Date, determined in the same manner as if such participant retired upon the change-in-control, shall be considered “vested” for purposes of this paragraph upon such change-in-control.

			

 

The Cash Incentive will be delivered on the first to occur of the following events, to the extent vested as of such time:

 

	 	
			●

				
			Within 90 days after the Vesting Date.

			

 

	 	
			●

				
			Subject to the pro-ration provision above, the Cash Incentive that is vested at the time of the participant’s “separation from service” shall be delivered to the participant within 90 days after the “separation from service.”

			

 

 

 

 

	 	
			●

				
			The Cash Incentive that is vested or becomes vested at the time of a change-in-control shall be delivered to the participant within 30 days following the change-in-control. If a participant is age 62 or older at the time of the change-in-control and is eligible for the retirement treatment described above, an amount of the Cash Incentive, pro-rated based on the number of days remaining until the Vesting Date, determined in the same manner as if such participant retired upon the change-in-control, shall be considered “vested” for purposes of this paragraph upon such change-in-control.

			

 

Withholding Taxes

 

Withholding Generally. Whenever Olympic Steel common stock is to be issued in satisfaction of an Award granted under this Plan or a tax event occurs, the participant may remit to the Company, an amount sufficient to satisfy applicable U.S. federal, state, local and international tax or any other tax or social insurance liability (the “Tax-Related Items”) required to be withheld from the participant prior to the delivery of the Olympic stock pursuant to settlement of any RSU Award or PSU Award. Whenever payments in satisfaction of Awards granted under this Plan are to be made in cash, such payment will be net of an amount sufficient to satisfy applicable withholding obligations for Tax-Related Items. Unless otherwise determined by the Committee, the Fair Market Value of the Olympic Steel common stock will be determined as of the date that the taxes are required to be withheld and such Olympic Steel common stock will be valued based on the value of the actual trade or, if there is none, the Fair Market Value of the Olympic Steel common stock as of the previous trading day.

 

Stock Withholding. The participant, as permitted by applicable law, may satisfy such Tax-Related Items legally due from the participant, in whole or in part by (without limitation) (a) paying cash, (b) having the Company withhold otherwise deliverable cash or, with approval of the Committee, Olympic Steel common stock having a Fair Market Value equal to the Tax-Related Items to be withheld, (c) with approval of the Committee, delivering to the Company already-owned shares having a Fair Market Value equal to the Tax-Related Items to be withheld or (d) withholding from the proceeds of the sale of otherwise deliverable Olympic Steel common stock acquired pursuant to an Award either through a voluntary sale or through a mandatory sale arranged by the Company. The Company may withhold or account for these Tax-Related Items by considering applicable statutory withholding rates or other applicable withholding rates, including up to (but not in excess of) the maximum permissible statutory tax rate for the applicable tax jurisdiction, to the extent consistent with applicable laws.

 

Miscellaneous Provisions

 

	 	
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			RSUs are not eligible to receive dividends or dividend equivalents.

			

 

	 	
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			PSUs are not eligible to receive dividends or dividend equivalents.

			

 

	 	
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			Nothing in this Plan or in any agreement entered into pursuant to this Plan shall confer upon any participant the right to continue in the employment of Olympic Steel or affect any right which Olympic Steel may have to terminate the employment of the participant.

			

 

	 	
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			A change-in-control is defined as an event which results in a Change of Control within the meaning of the Omnibus Plan and also results in a change in the ownership or effective control, or in the ownership of a substantial portion of the assets, of the Company, within the meaning of Treasury Regulation §1.409A-3(i)(5)).

			

 

	 	
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			The Plan may be changed, amended, suspended or terminated at any time by the Board of Directors. However, any changes or amendments shall not have a discretionary impact on the payment of incentives as governed by Section 409A or affect any Award previously granted under this Plan. It is intended that this Plan and the payments hereunder either be exempt from, or comply with, Section 409A and this Plan shall be so construed and administered. In the event that the Company reasonably determines that any compensation payable under this Plan may be subject to taxation under Section 409A, the Company shall have the authority to adopt, prospectively or retroactively, such amendments to this Plan or to take any other actions it determines necessary or appropriate to (a) exempt all or any portion of the compensation payable under this Plan from Section 409A or (b) comply with the requirements of Section 409A. In no event, however, shall this provision or any other provisions of this Plan be construed to require the Company to provide any gross-up for the tax consequences of any provisions of, or payments pursuant to, this Plan, and the Company shall have no responsibility for tax consequences to participant (or his or her beneficiary) resulting from the terms or operation of this Plan. For purposes of Section 409A, the payments hereunder are intended to constitute the right to a series of separate payments.

			

 

 

 

 

	 	
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			As used in this Plan, the term “termination of employment” shall refer to events which constitute a “separation of service” as defined in Treasury Regulation §1.409A-1(h) and means the participant’s “separation from service” with the Company and all members of the controlled group (within the meaning of Treasury Regulation §1.409A-1(g)), for any reason, including without limitation, quit, discharge, or retirement, or a leave of absence (including military leave, sick leave, or other bona fide leave of absence such as temporary employment by the government if the period of such leave exceeds the greater of six months or the period for which the Employee’s right to reemployment is provided either by statute or by contract). “Separation from service” also means the permanent decrease in the participant’s service for the Company and all controlled group members to a level that is no more than 20% of its prior level. For this purpose, whether a “separation of service” has occurred is determined based on whether it is reasonably anticipated that no further services will be performed by the participant after a certain date or that the level of bona fide services the participant will perform after such date (whether as an employee or as an independent contractor) would permanently decrease to no more than 20% of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services if the participant has been providing services less than 36 months).

			

 

	 	
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			Notwithstanding any other provision of this Plan or any Award Agreement, and solely to the extent that any payment under an Award issued pursuant to this Plan is not exempt from the requirements of Section 409A, if the participant is a “specified employee” for purposes of Section 409A, all payments under an Award issued pursuant to this Plan that would otherwise be paid or provided during the first 6 months following such “separation from service” (other than payments exempted under Section 409A) shall be accumulated through and paid or provided within 30 days following the 6 month anniversary of such “separation from service” to the extent required by Section 409A. Notwithstanding the foregoing, payments delayed pursuant to this paragraph shall commence as soon as practicable following the date of death of the participant prior to the end of the 6 month period but in no event later than 60 days following the date of death. Any provision or provisions in this Plan or any Award Agreement that provide that such non-exempt payments are to be made prior to the earlier of the expiration of the six-month delay period or death are of no effect and the Award Agreement shall be construed and enforced as if such provision had not been included.

			

 

 

 

 

APPENDIX A

 

Sample Annual Grant

 

 

 

 

 

 

 

 

 

APPENDIX B

 

In order to receive an annual PSU grant or the performance-based component of the Cash Incentive, the Company must achieve a minimum level of performance during the 3 year performance period running from the PSU Grant Date through the Vesting Date. The following describes the performance thresholds and corresponding payout levels that apply to each award, subject to annual Committee approval:

 

Annual PSU Grant (performance based)

 

Performance Based Cash Incentive

 

	 	
			Threshold

				
			Target

				
			Maximum

			
	
			ROA*

				5%	7.5%	
			10% or greater

			
	
			Payout % PSU Grant &

			Performance Based Cash 

			Incentive**

				50%	100%	150%

 

*ROA defined as EBITDA / (Average A/R, Inventory & PP&E), as determined by the Committee

** Payout % for performance in between levels will be interpolated, and there is no payout for performance that doesn’t meet the Threshold performance level.

 

Exceptions to the above schedule can be made for start-up, turnaround or other situations, as determined by the Committee.

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