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                                                                   Exhibit 10.12

                          REGISTRATION RIGHTS AGREEMENT

                                  BY AND AMONG

                           HAYNES INTERNATIONAL, INC.

                                       AND

                            THE PARTIES SPECIFIED ON
                           THE SIGNATURE PAGES HEREOF

                           DATED AS OF AUGUST 31, 2004

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                           HAYNES INTERNATIONAL, INC.

                          REGISTRATION RIGHTS AGREEMENT

          This REGISTRATION RIGHTS AGREEMENT dated as of 31, 2004 is made and
entered into by and among Haynes International, Inc., a Delaware corporation
(together with its successors and assigns, the "COMPANY") and the initial
holders of the common stock (the "HOLDERS") specified on the signature pages
hereof.

          WHEREAS, on March 29, 2004, Haynes International, Inc. and certain of
its subsidiaries and affiliates (the "DEBTORS"), filed a voluntary petition for
reorganization under Chapter 11 of title 11 of the U.S. Code, 11 U.S.C. Sections
101 - 1330 (as amended, the "BANKRUPTCY CODE"), with the United States
Bankruptcy Court for the Southern District of Indiana, Indianapolis Division
(the "BANKRUPTCY COURT"), commencing Chapter 11 Case Nos. 04-05364 through
04-05367 (the "BANKRUPTCY CASE");

          WHEREAS, on May 26, 2004, the Debtors also filed that certain Plan of
Reorganization (as amended and supplemented from time to time, the "PLAN") with
the Bankruptcy Court in the Bankruptcy Case;

          WHEREAS, the Bankruptcy Court confirmed the Plan pursuant to the order
under section 1129 of the Bankruptcy Code, dated August 31, 2004 (the
"CONFIRMATION ORDER"); and

          WHEREAS, pursuant to the Plan and the Confirmation Order, the Holders
have received shares of common stock of the Company (the "SHARES") and the
Company is obligated to provide the Holders with certain registration rights
with respect to such Shares.

          NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth in this Agreement, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

          1.    SHELF REGISTRATION.

                 (a)  FILING OF SHELF REGISTRATION

                         (i)  (x) Subject to clause (y) below, the Company shall
     comply with all the provisions of Sections 3(a) to 3(j) and shall use its
     reasonable best efforts to file with the Commission within 100 days of the
     Effective Date, and thereafter shall use its reasonable best efforts to
     cause to be declared effective within 180 days after the Effective Date, a
     Shelf Registration Statement, covering all of the Registrable Securities,
     and relating to the offer and sale of the Registrable Securities, by the
     holders of the Registrable Securities from time to time in accordance with
     the methods of distribution set forth in the Shelf Registration Statement.

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                              (y) Following delivery of notice to all holders of
     Registrable Securities, the Company may postpone for up to 90 days the
     filing or effectiveness of the Shelf Registration Statement if in the good
     faith judgment of the Company, the filing or effectiveness of the Shelf
     Registration Statement (A) would reasonably be expected to have a material
     adverse effect on any proposed financing, reorganization or
     recapitalization of the Company or pending negotiations relating to a
     merger, consolidation, acquisition or similar transaction or (B) applicable
     securities laws would require the Company to disclose material non-public
     information ("NON-PUBLIC INFORMATION") and the disclosure of such
     Non-Public Information would materially and adversely affect the business
     and operations of the Company; provided, however, that immediately
     following such postponement, the Company shall file or request
     effectiveness of the Shelf Registration Statement.

                         (ii) (x) Subject to clause (y) below, the Company shall
     use its reasonable best efforts to keep the Shelf Registration Statement
     continuously effective in order to permit any prospectus forming part
     thereof to be used by the holders of the Registrable Securities covered
     thereby for a period ending on the earlier of (A) the first date on which
     all the Registrable Securities covered by such Shelf Registration Statement
     have been sold pursuant thereto, (B) the first date on which all such
     Registrable Securities can immediately be sold within a ninety day period
     pursuant to Rule 144(e)(1)(i) under the Securities Act, (C) the first date
     upon which such holder (i) owns less than ten percent (10%) of the then
     issued and outstanding shares of Common Stock of the Company, (ii) is no
     longer an "affiliate" of the Company for purposes of Rule 144 of the
     Securities Act and (iii) no longer has a direct seat or a representative
     with a seat on the Company's Board of Directors or (D) the date upon which
     such Registrable Securities cease to be outstanding (in any such case, such
     period being called the "SHELF REGISTRATION EFFECTIVENESS PERIOD").

                              (y) The Company may, by notice given to all
     holders of Registrable Securities, require such holders not to make any
     sale of Registrable Securities pursuant to the Shelf Registration Statement
     if, in the good faith judgment of the Company, (A) securities laws
     applicable to such sale would require the Company to disclose Non-Public
     Information and (B) the disclosure of such Non-Public Information would
     materially and adversely affect the business or operations of the Company
     or any proposed financing, reorganization or recapitalization of the
     Company or pending negotiations relating to a merger, consolidation,
     acquisition or similar transaction. In the event that sales under the Shelf
     Registration Statement are suspended because of the obligation to disclose
     Non-Public Information, the Company will notify the holders of Registrable
     Securities promptly upon such Non-Public Information being included by the
     Company in a filing with the Commission, being

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     otherwise disclosed to the public (other than through the actions of a
     holder of Registrable Securities) or ceasing to be material to the Company,
     and upon such notice being given by the Company, the holders of Registrable
     Securities shall again be entitled to sell Registrable Securities pursuant
     to the Shelf Registration Statement. Notwithstanding the foregoing, the
     right of the Company pursuant to this clause (y) to require the holders to
     suspend sales under such Shelf Registration Statement shall not extend for
     more than 90 total days in any rolling period of twelve consecutive months
     during which the Registrable Securities are saleable pursuant to a
     Registration Statement.

                         (iii) Notwithstanding any other provisions hereof, the
     Company will use its reasonable best efforts to ensure that (A) any Shelf
     Registration Statement and any amendment thereto and any prospectus forming
     part thereof and any supplement thereto complies in all material respects
     with the Securities Act and the rules and regulations of the Commission
     thereunder, (B) any Shelf Registration Statement and any amendment thereto,
     at the time each become effective (in either case, other than with respect
     to information included therein in reliance upon or in conformity with
     information furnished in writing or confirmed in writing to the Company by
     or on behalf of the holder of such Registrable Securities specifically for
     use therein (the "HOLDER INFORMATION")), does not contain an untrue
     statement of a material fact or omit to state a material fact required to
     be stated therein or necessary to make the statements therein not
     misleading and (C) any prospectus forming part of any Shelf Registration
     Statement, and any supplement to such prospectus (in either case, other
     than with respect to Holder Information), as of the date of each, does not
     contain an untrue statement of a material fact or omit to state a material
     fact necessary in order to make the statements therein, in the light of the
     circumstances under which they were made, not misleading.

                         (iv) The Company will pay all Registration Expenses
     incurred in connection with the Shelf Registration Statement.

                 (b)  REGISTRATION STATEMENT FORM. A Shelf Registration
Statement shall be on such appropriate registration form promulgated by the
Commission as shall be selected by the Company and shall permit the disposition
of such Registrable Securities in accordance with the intended method or methods
specified in their request for such registration. If, during the period in which
the Company is obligated to maintain the Shelf Registration in effect, the
Company becomes qualified for registration on Form S-3 or any comparable or
successor form or forms for offers and sales by Holders, then, the Company may,
in its discretion, terminate the Shelf Registration and concurrently register
the Registrable Securities on such short-form registration statement. The
obligations of the Company with respect to maintenance of such registration
statement and prospectus included therein shall be subject to the terms of this
Agreement and such

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new registration statement shall be deemed to be a "Shelf Registration
Statement" for purposes of this Agreement.

          2.    PIGGYBACK REGISTRATION RIGHTS.

                 (a)  RIGHT TO INCLUDE REGISTRABLE SECURITIES. If the Company at
any time proposes after the date hereof to effect a registration, other than a
Shelf Registration Statement, of equity securities or securities convertible
into equity securities of the Company under the Securities Act whether for sale
for the account of the Company or for the account of any holder of securities of
the Company (other than Registrable Securities) (a "PIGGYBACK REGISTRATION"), it
will each such time give prompt written notice (a "NOTICE OF PIGGYBACK
REGISTRATION"), at least 10 Business Days prior to the anticipated filing date,
to all holders of Registrable Securities stating (i) its intention to do so,
(ii) whether the Piggyback Registration will be made pursuant to an underwritten
offering and (iii) such holders' rights under this Section 2, which Notice of
Piggyback Registration shall include a description of the intended method of
disposition of such securities.

                 Upon the written request of any such holder made within five
days after receipt of a Notice of Piggyback Registration (which request shall
specify the Registrable Securities intended to be disposed of by such holder),
the Company will, subject to the other provisions of this Agreement, include in
the registration statement relating to such Piggyback Registration all
Registrable Securities which the Company has been so requested to register, all
to the extent requisite to permit the disposition of such Registrable Securities
in accordance with the intended method of disposition set forth in the Notice of
Piggyback Registration. Notwithstanding the foregoing, if, at any time after
giving a Notice of Piggyback Registration and prior to the effective date of the
registration statement filed in connection with such registration, the Company
shall determine in its good faith judgment to not register or to delay
registration of such securities, the Company shall at its election, give written
notice of such determination to each holder of Registrable Securities and,
thereupon, in the case of a determination not to register, shall be relieved of
its obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith). Notwithstanding the foregoing, for purposes of this
Agreement, Piggyback Registration shall not include any registration in respect
of a dividend reinvestment or similar plan for stockholders of the Company or
any registration on Form S-4 or on Form S-8.

                 (b)  REGISTRATION EXPENSES. The Company will pay all
Registration Expenses incurred in connection with each Piggyback Registration.

                 (c)  PRIORITY IN CUTBACK REGISTRATIONS. If a Piggyback
Registration becomes a Cutback Registration, the Company will include in such
registration, to the extent of the amount or kind of securities which the
Managing Underwriter advises the Company can be sold in such offering in the
following order:

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                        (i) First, the securities proposed by the Company to be
     sold for its own account,

                       (ii) Second, any Registrable Securities requested to be
     included in such registration by Requesting Holders, pro rata on the basis
     of the number of Registrable Securities requested to be included by such
     holders, and

                      (iii) Third, any other securities of the Company proposed
     to be included in such registration, allocated among the holders thereof in
     accordance with the priorities then existing among the Company and such
     holders;

and any securities so excluded shall be withdrawn from and shall not be included
in such Piggyback Registration but are eligible to be included in any future
Piggyback Registration(s).

          3.    REGISTRATION PROCEDURES.

          If and whenever the Company is required to effect the registration of
any Registrable Securities under the Securities Act pursuant to Section 1 or
Section 2, the Company will use its reasonable best efforts to effect the
registration and sale of such Registrable Securities in accordance with the
intended method of disposition thereof. Without limiting the foregoing, the
Company in each such case will:

                 (a)  As far in advance as reasonably practical before filing a
registration statement or any amendment thereto, the Company will furnish to the
holders of the Registrable Securities included in such registration statement
copies of reasonably complete drafts of all such documents proposed to be filed
(including exhibits), and any such holder shall have three Business Days to
object to any Holder Information contained therein and the Company will make the
corrections reasonably requested by such Holder with respect to such
information;

                 (b)  Subject to Section 1(a)(ii) and paragraph (f) below, use
its reasonable best efforts to prepare and file with the Commission such
amendments and supplements to such registration statement and any prospectus
used in connection therewith as may be necessary to maintain the effectiveness
of such registration statement and to comply with the provisions of the
Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement, in accordance with the intended methods
of disposition thereof, until the Shelf Registration Effectiveness Period has
ended, or, with respect to a Piggyback Registration, until the Company shall
determine in its good faith judgment otherwise;

                 (c)  promptly notify each holder of Registrable Securities
included on a registration statement (and the underwriters, if any):

                        (i) when such registration statement or any prospectus
     used in connection therewith, or any amendment or supplement

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     thereto, has been filed and, with respect to such registration statement or
     any post-effective amendment thereto, when the same has become effective;

                       (ii) of the notification to the Company by the Commission
     of the issuance of any stop order suspending the effectiveness of such
     registration statement, or of any order preventing or suspending the use of
     any preliminary prospectus; and

                      (iii) of the receipt by the Company of any notification
     with respect to the suspension of the qualification or the exemption from
     qualification of any Registrable Securities for sale under the applicable
     securities or blue sky laws of any jurisdiction or the initiation of any
     proceeding for such purpose;

                 (d)  furnish to each holder of Registrable Securities covered
by such registration statement, not later than two Business Days after filing
with the Commission, such number of copies of the prospectus contained in such
registration statement (including any summary prospectus and prospectus
supplements) that has been declared effective and any other prospectus filed
under Rule 424 promulgated under the Securities Act relating to such holder's
Registrable Securities as such seller may reasonably request to facilitate the
disposition of its Registrable Securities;

                 (e)  use its reasonable best efforts to register or qualify all
Registrable Securities covered by such registration statement under such other
securities or blue sky laws of such jurisdictions as each holder thereof shall
reasonably request, to keep such registration or qualification in effect for so
long as such registration statement remains in effect, and to take any other
action which may be reasonably necessary or advisable to enable such holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such holder, except that the Company shall not for any such purpose be
required (i) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this paragraph (e)
be obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction or (iii) to consent to general service of process in any
jurisdiction unless the Company is already subject to service in such
jurisdiction and except as may be required by the Securities Act or applicable
rules or regulations thereunder;

                 (f)  promptly notify each holder of Registrable Securities
covered by such registration statement, at any time when a prospectus relating
thereto is required to be delivered under the Securities Act, of the happening
of any event, the existence of any condition or any information becoming known
as a result of which any prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of any such holder promptly prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the

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purchasers of such securities, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, however, the
Company shall not be required to furnish such supplement or amendment at any
time that sales of Registrable Securities are suspended under the circumstances
described in Section 1(a)(ii)(y) for as long as such sales are suspended;

                 (g)  otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission, and make available to
its securityholders, as soon as reasonably practicable, an earnings statement of
the Company which complies with the provisions of Section 11(a) of the
Securities Act and Rule 158 promulgated thereunder;

                 (h)  make available for inspection by any Requesting Holder and
any attorney, accountant or other agent retained by any such Requesting Holder
(collectively, the "INSPECTORS"), all financial and other records, pertinent
corporate documents and properties of the Company (collectively, the "RECORDS")
as shall be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors, employees and its
counsel and its subsidiaries to supply all information reasonably requested by
any such Inspector in connection with such registration statement; provided that
nothing in this Agreement shall require the waiver of any privilege or the
disclosure of any information that would result in any such waiver. Records
which the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, or (ii) the
information in such Records has been made generally available to the public,
provided, however, that prior notice shall be provided as promptly as
practicable to the Company of the potential disclosure of any information by
such Inspector pursuant to clause (i) of this sentence in order to permit the
Company to obtain a protective order (or to waive the provisions of this
paragraph). The Company may request the Inspectors enter into a standard
confidentiality agreement to this effect prior to furnishing any confidential
information. The seller of Registrable Securities agrees that it will, upon
learning that disclosure of such Records is sought in a court of competent
jurisdiction, give notice to the Company and allow the Company, at the Company's
expense, to undertake appropriate action to prevent disclosure of the Records
deemed confidential;

                 (i)  provide a transfer agent and a registrar for all
Registrable Securities covered by such registration statement not later than the
effective date of such registration statement; and

                 (j)  provide a CUSIP number for all Registrable Securities not
later than the effective date of the Shelf Registration Statement or Piggyback
Registration.

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          The Company may require each holder of Registrable Securities as to
which any registration is being effected to, and each such holder, as a
condition to including Registrable Securities in such registration, shall,
furnish the Company with such information and affidavits regarding such holder
and the distribution of such securities as the Company may from time to time
reasonably request in writing in connection with such registration.

          Each holder of Registrable Securities agrees that upon receipt of any
notice from the Company of the happening of any event of the kind described in
paragraph (f), such holder will forthwith discontinue such holder's disposition
of Registrable Securities pursuant to the registration statement relating to
such Registrable Securities until such holder's receipt of the copies of the
supplemented or amended prospectus contemplated by paragraph (f) and, if so
directed by the Company, will deliver to the Company or destroy all copies,
other than permanent file copies, then in such holder's possession of the
prospectus relating to such Registrable Securities current at the time of
receipt of such notice.

          4.    UNDERWRITTEN OFFERINGS.

          If the Company at any time proposes to register any of its securities
in a registration pursuant to which any Holder has rights pursuant to Section
2(a) and such securities are to be distributed by or through one or more
underwriters, the Company will, subject to the provisions of Section 2(c), use
its reasonable best efforts, if requested by any holder of Registrable
Securities, to arrange for such underwriters to include the Registrable
Securities to be offered and sold by Requesting Holders among the securities to
be distributed by such underwriters, and such holders shall be obligated to sell
their Registrable Securities in such Piggyback Registration through such
underwriters on the same terms and conditions as apply to the other Company
securities to be sold by such underwriters in connection with such Piggyback
Registration. The holders of Registrable Securities to be distributed by such
underwriters shall be parties to a customary underwriting agreement between the
Company and such underwriter or underwriters and shall make customary
representations and warranties regarding such holder, its ownership of
securities being registered on its behalf, its ability to consummate the
transaction and any other representations required by law; provided, however
that no holder of Registrable Securities shall be required to make any
representations or warranties with respect to the Company or any other holder.
No Requesting Holder may participate in any underwritten Piggyback Offering
unless such holder (i) agrees to sell its Registrable Securities on the basis
reasonably provided in any underwriting arrangements approved by the Company;
and (ii) completes and executes all questionnaires, powers of attorney,
indemnities, lock-up agreements and other documents reasonably required under
the terms of such underwriting arrangements. If any Requesting Holder
disapproves of the terms of an underwriting, such holder may elect to withdraw
therefrom and from such registration by notice to the Company and the Managing
Underwriter, and each of the remaining Requesting Holders shall be entitled to
increase the number of Registrable Securities being registered to the extent of
the Registrable Securities so withdrawn in the proportion which the number of
Registrable Securities being registered by such

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remaining Requesting Holder bears to the total number of Registrable Securities
being registered by all such remaining Requesting Holders.

          5.    HOLDBACK AGREEMENTS.

                  If and to the extent requested by the Managing Underwriter
(such request to be made at least five Business Days in advance of the beginning
of the holdback period), each holder of Registrable Securities agrees, to the
extent permitted by law, not to effect any public sale or distribution
(including a sale under Rule 144) of Common Stock, or securities convertible
into or exchangeable or exercisable for Common Stock, during the 90 days after
the effective date of any registration statement filed by the Company in
connection with a primary offering of Common Stock on behalf of the Company (or
for such shorter period of time as is sufficient and appropriate, in the opinion
of the Managing Underwriter, in order to complete the sale and distribution of
the securities included in such registration), except as part of such
registration statement, whether or not such holder participates in such
registration and each such holder of Registrable Securities shall sign a
customary agreement with the Managing Underwriter with respect to the matters
set for above to the extent requested by the Managing Underwriter. The
restrictions in this Section 5 shall only apply to the holders of Registrable
Securities in connection with one registration statement filed by the Company in
connection with a primary offering of Common Stock on behalf of the Company and
only to the extent that all other holders of Registrable Securities, officers of
the Company, directors of the Company and all other affiliates of the Company
agree to the same restrictions.

          6.    INDEMNIFICATION.

                 (a)  INDEMNIFICATION BY THE COMPANY. The Company shall, to the
full extent permitted by law, indemnify and hold harmless each holder of
Registrable Securities included in any registration statement filed in
connection with a Shelf Registration Statement or a Piggyback Registration, its
directors, officers, members and partners, and each other Person, if any, who
controls any such holder within the meaning of the Securities Act, against any
losses, claims, damages, expenses or liabilities (as actions or proceedings in
respect thereof), joint or several (together, "LOSSES"), to which such holder or
any such director, officer, member, partner or controlling Person may become
subject under the Securities Act or otherwise, insofar as such Losses (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading and the
Company will reimburse such holder and each such director, officer, member,
partner and controlling Person for any legal or any other expenses reasonably
incurred by them in connection with investigating or defending against any such
Loss (or action or proceeding in respect thereof); provided, however, that the
Company shall not be liable in

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any such case to the extent that any such Loss (or action or proceeding in
respect thereof) (i) is caused by or contained in any information relating to
such holder furnished in writing to the Company by such holder expressly for use
in such registration statement, preliminary, final or summary prospectus
contained therein, or any amendment or supplement thereto, (ii) is caused by
such holder's failure to deliver a copy of the current prospectus simultaneously
with or prior to such sale after the Company has furnished such holder with a
sufficient number of copies of such prospectus correcting such material
misstatement or omission, (iii) arises in respect of any offers to sell or sales
made during any period when a holder is required to discontinue sales under
Section 3(c)(ii) or (iii) (and after such holder has received notice as
contemplated by Section 3(c)(ii) or (iii)), or (iv) is incurred as a result of
such indemnitee's bad faith, willful misconduct or gross negligence. Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer, member,
partner or controlling Person, and shall survive the transfer of such securities
by such holder to a Permitted Successor.

                 (b)  INDEMNIFICATION BY THE HOLDERS. Each holder of Registrable
Securities which are included or are to be included in any registration
statement filed in connection with a Shelf Registration Statement or a Piggyback
Registration, as a condition to including Registrable Securities in such
registration statement, shall, to the full extent permitted by law, indemnify
and hold harmless the Company, its directors and officers, and each other
Person, if any, who controls the Company within the meaning of the Securities
Act, against any Losses to which the Company or any such director or officer or
controlling Person may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished or confirmed in writing to the Company; provided, however, that in no
event shall any indemnity provided by a Holder under this Section 6(b) exceed
the net proceeds from the offering received by such Holder. Such indemnity shall
remain in full force and effect regardless of any investigation made by or on
behalf of the Company or any such director, officer, member, partner or
controlling Person and shall survive the transfer of such securities by such
holder to a Permitted Successor.

                 (c)  NOTICES OF CLAIMS, ETC. Promptly after receipt by an
Indemnified Party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding paragraph (a) or (b) of this
Section 6, such Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party pursuant to such paragraphs, give written
notice to the latter of the commencement of such action, provided that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under

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the preceding paragraphs of this Section 6, except to the extent that the
Indemnifying Party is actually prejudiced by such failure to give notice. In
case any such action is brought against an Indemnified Party, the Indemnifying
Party shall be entitled to participate in and to assume the defense thereof,
jointly with any other Indemnifying Party similarly notified to the extent that
it may wish, and after notice from the Indemnifying Party to such Indemnified
Party of its election so to assume the defense thereof, the Indemnifying Party
shall not be liable to such Indemnified Party for any legal or other expenses
subsequently incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation; provided that the Indemnified Party may
participate in such defense at the Indemnified Party's expense; and provided
further that the Indemnified Party (or Indemnified Parties) shall have the right
to employ one counsel to represent it (or them, collectively) if, in the
reasonable judgment of the Indemnified Party or Indemnified Parties, it is
advisable for it (or them) to be represented by separate counsel by reason of
having legal defenses which are different from or in addition to those available
to the Indemnifying Party, and in that event the reasonable fees and expenses of
such one counsel shall be paid by the Indemnifying Party. If the Indemnifying
Party is not entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than one counsel for
the Indemnified Parties with respect to such claim. No Indemnifying Party shall
consent to entry of any judgment or enter into any settlement without the
consent of the Indemnified Party which does not include as an unconditional term
thereof the giving by the claimant or plaintiff to such Indemnified Party of a
release from all liability in respect of such claim or litigation. No
Indemnifying Party shall be subject to any liability for any settlement made
without its consent, which consent shall not be unreasonably withheld.

                 (d)  CONTRIBUTION. If the indemnity and reimbursement
obligation provided for in any paragraph of this Section 6 is unavailable or
insufficient to hold harmless an Indemnified Party in respect of any Losses (or
actions or proceedings in respect thereof) referred to therein, then the
Indemnifying Party shall contribute to the amount paid or payable by the
Indemnified Party as a result of such Losses (or actions or proceedings in
respect thereof) in such proportion as is appropriate to reflect the relative
fault of the Indemnifying Party on the one hand and the Indemnified Party on the
other hand in connection with the statements or omissions which resulted in such
Losses, as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Indemnifying Party or the Indemnified Party and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The parties hereto agree that it would not be just
and equitable if contributions pursuant to this paragraph were to be determined
by pro rata allocation or by any other method of allocation which does not take
account of the equitable considerations referred to in the first sentence of
this paragraph. The amount paid by an Indemnified Party as a result of the
Losses referred to in the first sentence of this paragraph shall be deemed to
include any legal and other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any Loss which is the
subject of this paragraph.

                                       11
<Page>

                 No Indemnified Party guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying Party was not
guilty of such fraudulent misrepresentation.

                 (e) INDEMNIFICATION PAYMENTS. The indemnification required by
this Section 6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
Losses are incurred, provided that each Indemnified Party shall repay such
payments if and to the extent it shall be determined by a court of competent
jurisdiction that such recipient is not entitled to such payment.

          7.    LISTING REQUIREMENT.

          The Company will use its commercially reasonable best efforts to list
the Common Stock on a national securities exchange or to be quoted on a national
automated interdealer quotation system within one year of the Effective Date
unless the Board of Directors of the Company determines otherwise.

          8.    OTHER REGISTRATION RIGHTS.

          The Company represents and warrants to the Holders that there is not
in effect on the date hereof any agreement by the Company (other than this
Agreement) pursuant to which any holders of securities of the Company have a
right to cause the Company to register or qualify such securities under the
Securities Act or any securities or blue sky laws of any jurisdiction. The
Company agrees that, for so long as any holder is entitled to registration
rights under this Agreement, the Company shall not enter into any agreement
granting registration rights with respect to the Company's capital stock
equivalent or superior to the Company's registration obligations to the holders
under Section 2(c)(ii) of this Agreement.

          9.    DEFINITIONS.

          Except as otherwise specifically indicated, the following terms will
have the following meanings for all purposes of this Agreement:

          "AGREEMENT" means this Registration Rights Agreement, as the same
shall be amended from time to time.

          "BANKRUPTCY CASE" has the meaning ascribed to it in the preamble.

          "BANKRUPTCY CODE" has the meaning ascribed to it in the preamble.

          "BANKRUPTCY COURT" has the meaning ascribed to it in the preamble.

          "BUSINESS DAY" means a day other than Saturday, Sunday or any other
day on which banks located in the State of New York are authorized or obligated
to close.

                                       12
<Page>

          "COMMISSION" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.

          "COMMON STOCK" means shares of Common Stock, par value $0.001 per
share, of the Company, as constituted on the date hereof, and any stock into
which such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.

          "COMPANY" has the meaning ascribed to it in the preamble.

          "CONFIRMATION ORDER" has the meaning ascribed to it in the preamble.

          "CUTBACK REGISTRATION" means any registration to be effected as an
underwritten Public Offering in which the Managing Underwriter with respect
thereto advises the Company in writing that, in its opinion, the number of
securities requested to be included in such registration (including securities
of the Company which are not Registrable Securities) exceed the number which can
be sold in such offering or which can be sold without a material reduction in
the selling price anticipated to be received for the securities to be sold in
such Public Offering, or which can be sold without otherwise adversely affecting
the success of such offering.

          "EFFECTIVE DATE" has the meaning ascribed to it in the Plan.

          "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.

          "FORM S-4" means Form S-4 promulgated by the Commission under the
Securities Act, or any successor or similar registration statement.

          "FORM S-8" means Form S-8 promulgated by the Commission under the
Securities Act, or any successor or similar registration statement.

          "HOLDER" has the meaning ascribed to it in the preamble.

          "HOLDER INFORMATION" has the meaning ascribed to it in
Section 1(a)(iii).

          "INDEMNIFIED PARTY" means a party entitled to indemnity in accordance
with Section 6.

          "INDEMNIFYING PARTY" means a party obligated to provide indemnity in
accordance with Section 6.

          "INSPECTORS" has the meaning ascribed to it in Section 3(h).

          "LOSSES" has the meaning ascribed to it in Section 6(a).

                                       13
<Page>

          "MANAGING UNDERWRITER" means, with respect to any Public Offering, the
underwriter or underwriters managing such Public Offering.

          "NASD" means the National Association of Securities Dealers, Inc.

          "NOTICE OF PIGGYBACK REGISTRATION" has the meaning ascribed to it in
Section 2(a).

          "PERMITTED SUCCESSORS" has the meaning ascribed to it in Section
10(f).

          "PERSON" means any natural person, corporation, general partnership,
limited partnership, limited liability company, proprietorship, other business
organization, trust, union or association.

          "PIGGYBACK REGISTRATION" has the meaning ascribed to it in Section
2(a).

          "PLAN" has the meaning ascribed to it in the preamble.

          "PUBLIC OFFERING" means any offering of Common Stock to the public,
either on behalf of the Company or any of its securityholders, pursuant to an
effective registration statement under the Securities Act.

          "RECORDS" has the meaning ascribed to it in Section 3(h).

          "REGISTRABLE SECURITIES" means (i) the Shares held by Holders (or
their successors, assignees or transferees as contemplated by Section 10(g)),
and (ii) any additional shares of Common Stock issued or distributed to the
Holders (or their successors, assignees or transferees as contemplated by
Section 10(g)) by way of a dividend, stock split, conversion, or other
distribution in respect of the Shares, or acquired by way of any rights offering
or similar offering made in respect of the Shares. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such Registrable
Securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been sold pursuant to Rule 144, or (iii) they
shall have ceased to be outstanding.

          "REGISTRATION EXPENSES" means all expenses incident to the Company's
performance of or compliance with its obligations under this Agreement to effect
and maintain the registration of Registrable Securities in any Shelf
Registration Statement or a Piggyback Registration, including, without
limitation, all registration, filing, securities exchange listing and NASD fees
(including Nasdaq fees, if applicable), all registration, filing, qualification
and other fees and expenses of complying with securities or blue sky laws
(including fees of a single counsel retained by the holders of a majority of
Registrable Securities being registered to advise the holders with respect to
all of the foregoing matters), all word processing, duplicating and printing
expenses, messenger and delivery expenses, the fees and disbursements of counsel
for the Company

                                       14
<Page>

and of its independent public accountants, including the expenses of any special
audits or "cold comfort" letters required by or incident to such performance and
compliance in connection with an underwritten offering and any fees and
disbursements of underwriters customarily paid by issuers or holders of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, in respect of Registrable Securities, which shall be payable by
each holder thereof.

          "REQUESTING HOLDERS" means, with respect to any Piggyback
Registration, the holders of Registrable Securities requesting to have
Registrable Securities included in such registration in accordance with this
Agreement.

          "RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.

          "SECURITIES ACT" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.

          "SHARES" has the meaning ascribed to it in the preamble.

          "SHELF REGISTRATION EFFECTIVENESS PERIOD" has the meaning ascribed to
it in Section 1(a).

          "SHELF REGISTRATION STATEMENT" means a registration statement of the
Company in compliance with the provisions of Section 1(a)(i) and Section 1(b) of
this Agreement which registers the continuous offer and sale of all of the
Registrable Securities on an appropriate form under Rule 415 under the
Securities Act or any similar or successor rule that may be adopted by the
Commission, and all amendments to such registration statement, including
post-effective amendments, in each case including any prospectus contained
therein and any supplement to any such prospectus, all exhibits thereto and all
information incorporated by reference therein.

          10.   MISCELLANEOUS.

                 (a)  NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (registered or
certified mail, postage prepaid) to the parties at the following addresses or
facsimile numbers:

          If to Holder, to the addresses set forth on the signature pages
hereof.

          If to the Company, to:

          Haynes International, Inc.
          1020 West Park Ave
          Kokomo IN 46904-9013
          Attn: Chief Financial Officer

                                       15
<Page>

          Telephone No.:
          Facsimile No.:

          With respect to any other holder of Registrable Securities, such
notices, requests and other communications shall be sent to the addresses set
forth in the stock transfer records regularly maintained by the Company. All
such notices, requests and other communications will (i) if delivered personally
to the address as provided in this Section, be deemed given upon delivery, (ii)
if delivered by facsimile transmission to the facsimile number as provided in
this Section, be deemed given when sent by confirmed facsimile if sent during
normal business hours of the recipient, if not, then on the next Business Day,
and (iii) if delivered by mail in the manner described above to the address as
provided in this Section, be deemed given five days after deposit with the
United States Post Office (in each case regardless of whether such notice,
request or other communication is received by any other Person to whom a copy of
such notice is to be delivered pursuant to this Section). Any party from time to
time may change its address, facsimile number or other information for the
purpose of notices to that party by giving notice specifying such change to the
other parties hereto.

                 (b)  ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.

                 (c)  AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument (which may be executed in any number of
counterparts) duly executed by or on behalf of each of the Company and Holders
owning more than fifty percent (50%) of the Registrable Securities.

                 (d)  WAIVER. Subject to paragraph (e) of this Section, any term
or condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same term or condition of this Agreement on any
future occasion.

                 (e)  CONSENTS AND WAIVERS BY HOLDERS OF REGISTRABLE SECURITIES.
Any consent of the holders of Registrable Securities pursuant to this
Agreement, and any waiver by such holders of any provision of this Agreement,
shall be in writing (which may be executed in any number of counterparts) and
may be given or taken by Holders owning more than fifty percent (50%) of the
Registrable Securities and any such consent or waiver so given or taken will be
binding on all the holders of Registrable Securities.

                 (f)  NO THIRD PARTY BENEFICIARY. The terms and provisions of
this Agreement are intended solely for the benefit of each party hereto and
their respective successors or assigns, but only to the extent that such
successor or assign has acquired from the Holder shares of Common Stock
representing at least 10% of the then issued

                                       16
<Page>

and outstanding Common Stock of the Company as contemplated by Section 10(g)
("PERMITTED SUCCESSOR"). It is not the intention of the parties to confer
third-party beneficiary rights upon any other Person other than any Person
entitled to indemnity under Section 6.

                 (g)  SUCCESSORS AND ASSIGNS. This Agreement is binding upon,
inures to the benefit of and is enforceable by the Company and the Holders (or
the Person or Persons for which a Holder is acting as fiduciary or agent, as the
case may be) and their respective Permitted Successors; provided, however, that
this Agreement shall not inure to the benefit of or be binding upon a Permitted
Successor unless and except to the extent such Permitted Successor holds
Registrable Securities; provided, further, that nothing herein shall be deemed
to permit any assignment, transfer or other disposition of Registrable
Securities in violation of the terms hereof, the Securities Act or any
securities or blue sky laws of any jurisdiction.

                 (h)  HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

                 (i)  INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under any present or future law,
and if the rights or obligations of any party hereto under this Agreement will
not be materially and adversely affected thereby, (i) such provision will be
fully severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.

                 (j)  REMEDIES. Except as otherwise expressly provided for
herein, no remedy conferred by any of the specific provisions of this Agreement
is intended to be exclusive of any other remedy, and each and every remedy shall
be cumulative and shall be in addition to every other remedy given hereunder or
now or hereafter existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by any party hereto shall not constitute a
waiver by any such party of the right to pursue any other available remedies.

          Damages in the event of breach of this Agreement by a party hereto or
any other holder of Registrable Securities would be difficult, if not
impossible, to ascertain, and it is therefore agreed that each such Person, in
addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and enforcing specifically
the terms and provisions hereof and the Company and each holder of Registrable
Securities, by its acquisition of such Registrable Securities, hereby waives any
and all defenses it may have on the ground of lack of jurisdiction or competence
of the court to grant such an injunction or other equitable relief. The
existence of this right will not preclude any such Person from pursuing any
other rights and remedies at law or in equity which such Person may have.

                                       17
<Page>

                 (k)  GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

                 (l)  COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.

                           [Signatures on next page.]

                                       18
<Page>

          IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officer of each party hereto as of the date
first above written.

                                      "COMPANY"

                                      HAYNES INTERNATIONAL, INC.

                                      By: /s/ Marcel Martin
                                          --------------------------------------
                                      Name: Marcel Martin
                                      Title: Vice President, Finance, CFO

                                      "HOLDERS"

                                      FIDELITY SUMMER STREET TRUST:
                                      FIDELITY CAPITAL & INCOME FUND

                                      By: /s/ Mark Osterheld
                                          --------------------------------------
                                         Name: Mark Osterheld
                                         Title: Assistant Treasurer

                                      FIDELITY ADVISOR SERIES II:
                                      FIDELITY HIGH INCOME ADVANTAGE
                                      FUND

                                      By: /s/ Mark Osterheld
                                          --------------------------------------
                                         Name: Mark Osterheld
                                         Title: Assistant Treasurer

                                      PENSION INVESTMENT COMMITTEE
                                      OF GENERAL MOTORS FOR GENERAL
                                      MOTORS EMPLOYEES DOMESTIC
                                      GROUP PENSION TRUST

                                      By: Fidelity Management and Trust
                                      Company, its investment advisor

                                      By: /s/ John P. O'Reilly Jr.
                                         ---------------------------------------
                                         Name: John P. O'Reilly Jr.
                                         Title: Executive Vice President

                                      COMMONWEALTH OF
                                      MASSACHUSETTS PENSION

<Page>

                                      RESERVES INVESTMENT
                                      MANAGEMENT BOARD

                                      By: Fidelity Management and Trust
                                      Company, its investment advisor

                                      By: /s/ John P. O'Reilly Jr.
                                         ---------------------------------------
                                         Name: John P. O'Reilly Jr.
                                         Title: Executive Vice President

                                      FIDELITY SECURITIES FUND:
                                      FIDELITY LEVERAGED COMPANY
                                      STOCK FUND

                                      By: /s/ Mark Osterheld
                                          --------------------------------------
                                         Name: Mark Osterheld
                                         Title: Assistant Treasurer

                                      FIDELITY ADVISOR SERIES I:
                                      FIDELITY ADVISOR LEVERAGED
                                      COMPANY STOCK FUND

                                      By: /s/ Mark Osterheld
                                          --------------------------------------
                                         Name: Mark Osterheld
                                         Title: Assistant Treasurer

                                       20<Page>

                                                                   Exhibit 10.13

                           HAYNES INTERNATIONAL, INC.
                                STOCK OPTION PLAN

           As adopted by the Board of Directors as of August 31, 2004

     The Board of Directors of Haynes International, Inc. (the "Company") has
determined that the best interests of the Company will be served by making
available to eligible employees and directors of the Company and its
Subsidiaries a means to acquire shares of the Company's common stock (the
"Shares") through the granting of stock options. The Haynes International, Inc.
Stock Option Plan (the "Plan") is intended to promote the growth of the Company
and its shareholders by attracting and motivating key employees and directors
whose efforts are deemed worthy of encouragement through the incentive effects
of stock options.

     The Shares purchased pursuant to the Plan shall be subject to certain
restrictions, the details of which are set forth below. There is currently no
public market for the Shares. The future market price, if any, of the Shares may
be highly volatile depending on a number of factors. In addition, the ownership
of the Company represented by Options may be diluted by the future issuances of
Shares or convertible securities.

     Accordingly, the Company's Board of Directors adopts this Plan in
accordance with the Plan of Reorganization (as defined below), effective as of
the Effective Date.

1.   DEFINITIONS. For purposes of the Plan, the following terms, when
     capitalized, shall have the meaning set forth below:

     (a)    "Board" or "Board of Directors" means the board of directors of the
            Company.

     (b)    "CEO" means the Chief Executive Officer of the Company.

     (c)    "Code" means the Internal Revenue Code of 1986, as amended.

     (d)    "Committee" means the Compensation Committee of the Board, and the
            composition of the Committee shall be governed by the Compensation
            Committee Charter as adopted by the Board and as amended from time
            to time.

     (e)    "Company" means Haynes International, Inc.

     (f)    "Director" means any person serving on the Board of Directors of the
            Company.

     (g)    "Disability" means total and permanent disability as defined in the
            Haynes International Inc. Pension Plan.

     (h)    "Discretionary Participant" means any additional Participant as may
            be designated on a limited basis by the Committee upon the
            recommendation of the CEO to accommodate new hires, promotions and
            other similar circumstances.

<Page>

     (i)    "Effective Date" has the meaning set forth in the Plan of
            Reorganization.

     (j)    "Employee" means any person, including officers, employed by the
            Company or any Subsidiary. The payment of a director's fee by the
            Company shall not be sufficient to constitute "employment" by the
            Company.

     (k)    "Exchange Act" means the Securities Exchange Act of 1934, as
            amended.

     (l)    "Executive" means executives occupying the management positions
            listed on EXHIBIT A attached hereto.

     (m)    "Fair Market Value" per share as of a particular date means the last
            reported sale price (on the day immediately preceding such date) of
            the Shares quoted on the NASDAQ National Market or the NASDAQ
            SmallCap Market (or any other exchange or national market system
            upon which price quotations for the Shares are regularly available);
            provided, however, if price quotations for the Shares are not
            regularly available on any exchange or national market system, Fair
            Market Value per share shall mean, as of any date, the fair market
            value of such Shares on such date as determined in good faith by the
            Board or Committee.

     (n)    "Good Reason" means the occurrence of any of the following actions
            or failures to act, but in each case only if it is not consented to
            by the Optionee in writing: (a) a material adverse change in the
            Optionee's duties, reporting responsibilities, titles or elected or
            appointed offices as in effect immediately prior to the effective
            date of such change; (b) a material reduction by the Company in the
            Optionee's base salary or annual bonus opportunity in effect
            immediately prior to the effective date of such reduction, not
            including any reduction resulting from changes in the market value
            of securities or other instruments paid or payable to the Optionee;
            or (c) solely in the case of the CEO, any change of more than fifty
            (50) miles in the location of the principal place of employment of
            the CEO immediately prior to the effective date of such change. For
            purposes of this definition, none of the actions described in
            clauses (a) and (b) above shall constitute "Good Reason" with
            respect to the Optionee if it was an isolated and inadvertent action
            not taken in bad faith by the Company and if it is remedied by the
            Company within thirty (30) days after receipt of written notice
            thereof given by the Optionee (or, if the matter is not capable of
            remedy within thirty (30) days, then within a reasonable period of
            time following such thirty (30) day period, provided that the
            Company has commenced such remedy within said thirty (30) day
            period); provided that "Good Reason" shall cease to exist for any
            action described in clauses (a) and (b) above on the sixtieth (60th)
            day following the later of the occurrence of such action or the
            Optionee's knowledge thereof, unless the Optionee has given the
            Company written notice thereof prior to such date.

     (o)    "New Common Stock" has the meaning set forth in the Plan of
            Reorganization.

                                       -2-
<Page>

     (p)    "Non-Employee Director" means a Director who is a "non-employee
            director" within the meaning of Rule 16b-3 and who is also an
            "outside director" within the meaning of Section 162(m) of the Code.

     (q)    "Option" means any stock option issued pursuant to the Plan. Options
            will be "Nonqualified Options" which are defined as options not
            intended to meet the requirements of Section 422 of the Code.

     (r)    "Option Agreement" means the written agreement by and between the
            Participant and the Company setting forth the terms and conditions
            of an Option. Each Option Agreement shall be subject to the terms
            and conditions of the Plan and need not be identical.

     (s)    "Optionee" means the holder of an outstanding Option granted under
            the Plan.

     (t)    "Participant" means the CEO, Executive, Non-Employee 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-
<Page>

     (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 (E) perpetuated a fraud or embezzlement against the
            Company or its Subsidiaries or affiliates, and in each case the
            particular act or omission was not cured, if curable, in all
            material respects by the Optionee within thirty (30) days after
            receipt of written notice from the Board, which shall set forth in
            reasonable detail the nature of the facts and circumstances which
            constitute "Cause;" provided, however, the Optionee shall not be
            deemed to have been Terminated for Cause unless there shall have
            been delivered to the Optionee a copy of a resolution duly adopted
            by the Board. If the Company has reasonable belief that the Optionee
            has committed any of the acts described above, it may suspend the
            Optionee (with or without pay) while it investigates whether it has
            or could have Cause to terminate the Optionee. The Company may
            terminate the Optionee for Cause prior to the completion of its
            investigation; provided, that, if it is ultimately determined that
            the Optionee has not committed an act which would constitute Cause,
            the Optionee shall be treated as if he were terminated without
            Cause.

2.   ADMINISTRATION OF THE PLAN.

     (a)    COMMITTEE. The Plan shall be administered by the Committee. The
            Committee shall have full authority to administer the Plan,
            including authority to interpret and construe any provision of the
            Plan and to adopt such rules and regulations for administering the
            Plan as it may deem necessary in order to comply with the
            requirements of the Plan, or in order to conform to any regulation
            or to any change in any law or regulation applicable thereto.

     (b)    ACTIONS OF THE COMMITTEE. All actions taken and all interpretations
            and determinations made by the Committee in good faith (including
            determinations of Fair Market Value) shall be final and binding upon
            all Participants, the Company, and all other interested persons. No
            member of the Committee shall be personally

                                       -4-
<Page>

            liable for any action, determination or interpretation made in good
            faith with respect to the Plan, and all members of the Committee
            shall, in addition to their rights as Directors, be fully protected
            to the extent permitted by law by the Company with respect to any
            such action, determination, or interpretation.

     (c)    POWERS OF THE COMMITTEE. Subject to the provisions of the Plan, the
            Committee shall have the authority, in its discretion: (i) to
            determine, upon review of the relevant information, the Fair Market
            Value of the Shares; (ii) to determine the persons to whom Options
            shall be granted, the time or times at which Options shall be
            granted, the number of Shares to be represented by each Option, and
            the exercise price per Share; (iii) to interpret the Plan; (iv) to
            prescribe, amend, and rescind rules and regulations relating to the
            Plan; (v) to accelerate or defer (with the consent of the
            Participant) the vesting of any Option; (vi) to authorize any person
            to execute on behalf of the Company any instrument required to
            effectuate the grant of an Option previously granted by the Board or
            the Committee; and (vii) to make all other determinations deemed
            necessary or advisable for the administration of the Plan.

3.   ELIGIBILITY AND PARTICIPATION.

     (a)    ELIGIBILITY. Grants of Options shall be made to the CEO and the
            Executives in accordance with Exhibit A and, in the discretion of
            the Committee, may be made to any Non-Employee Director or any
            Discretionary Participant.

     (b)    PARTICIPATION BY DIRECTOR. Members of the Committee who are either
            eligible for Options or have been granted Options may vote on any
            matters affecting the administration of the Plan or the grant of any
            Options pursuant to the Plan, except that no such member shall act
            upon the granting of an Option to himself, but any such member may
            be counted in determining the existence of a quorum at any meeting
            of the Committee and may be counted as part of an action by
            unanimous written consent during or with respect to which action is
            taken to grant Options to him or her.

4.   EXERCISE PRICE, CONSIDERATION AND FORM OF OPTION AGREEMENT.

     (a)    EXERCISE PRICE. The price to be paid for Shares upon the exercise of
            an Option ("exercise price") shall be determined by the Committee at
            the time such Option is granted.

     (b)    PAYMENT OF EXERCISE PRICE. The exercise price shall be paid in full,
            at the time of exercise of the Option, (i) by personal or bank
            cashier's check, (ii) if the Participant may do so without violating
            Section 16(b) or (c) of the Exchange Act, and subject to approval by
            the Committee, by tendering to the Company whole Shares owned by
            such Participant having a Fair Market Value at the time of exercise
            equal to the exercise price of the Shares to which the Option is
            being exercised, (iii) if the Participant may do so without
            violating Section 16(b) or (c) of the Exchange Act, and subject to
            approval by the Committee, by surrendering

                                       -5-
<Page>

            sufficient vested options based on the difference between the
            exercise price and the Fair Market Value at the time of exercise of
            the Shares to equal the exercise price of the Shares to which the
            Option is being exercised, or (iv) any combination of (i), (ii) or
            (iii). Unless otherwise specifically provided in an Option
            Agreement, the purchase price of Shares acquired pursuant to an
            Option that is paid by delivery to the Company of other Shares or
            attestation of ownership thereof acquired, directly or indirectly
            from the Company, shall be paid only with Shares that have been held
            for more than six (6) months (or such longer or shorter period of
            time required to avoid a charge to earnings for financial accounting
            purposes).

     (c)    FORM OF OPTION AGREEMENT. Each Option shall be evidenced by an
            Option Agreement specifying the number of Shares which may be
            purchased upon exercise of the Option and containing such terms and
            provisions as the Committee may determine, subject to the provisions
            of the Plan.

5.   SHARES OF COMMON STOCK SUBJECT TO THE PLAN.

     (a)    NUMBER. Subject to adjustment as provided in paragraph (b) of this
            Section 5, the maximum aggregate number of Shares which may be
            issued pursuant to Options granted under the Plan shall not exceed
            one (1) million Shares. To the extent any Option granted under the
            Plan shall for any reason expire or otherwise terminate or become
            unexercisable, in whole or in part, without having been exercised in
            full, the Shares not acquired under such Option shall revert to and
            thereafter be available for future grants under the Plan.

     (b)    CAPITAL CHANGES. In the event of any extraordinary dividend or other
            distribution (whether in the form of cash, Shares, other securities,
            or other property), recapitalization, reclassification, stock split,
            reverse stock split, spin-off, or exchange of Shares or other
            securities of the Company, issuance of warrants or other rights to
            purchase Shares or other securities of the Company, or other similar
            corporate transaction or event (an "Event"), and such event affects
            the Shares such that an adjustment is reasonably 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 the Plan or with respect to an Option, then the
            Committee shall, in such manner as it may reasonably deem equitable,
            take action to make the appropriate adjustment, including, without
            limitation, adjusting any or all of the following: (i) the number
            and kind of Shares (or other securities or property) with respect to
            which Options may be granted or awarded; (ii) the number and kind of
            Shares (or other securities or property) subject to outstanding
            Options; and (iii) the grant or exercise price with respect to any
            Option; provided, however, that no Committee action under this
            Section 5(b) shall result in a reduction in the aggregate value of
            outstanding Options (whether or not vested) held by any Participant
            immediately prior to the Event. The Committee's determination under
            this Section 5(b) shall be final, binding and conclusive. If any of
            the foregoing adjustments shall result in a fractional Share,

                                       -6-
<Page>

            the fraction shall be disregarded, and the Company shall have no
            obligation to make any cash or other payment with respect to such a
            fractional Share.

     (c)    SALE PROTECTION. In the event that the Company's Shares are not
            readily traded on a national exchange or quotations system, and the
            Company is sold in a sale or merger, the Fair Market Value of the
            Shares received upon the exercise of each vested Option shall be the
            value per Share payable or used in such transaction.

     (d)    TERMINATION OF OPTIONS. Unless otherwise provided in an Option
            Agreement, upon the occurrence of an Event, Change in Control (as
            defined in Section 11 below) or other corporate event or transaction
            in which outstanding Options are not to be assumed or otherwise
            continued following such an Event, Change in Control or other
            corporate event or transaction, the Committee may, in its
            discretion, terminate any outstanding Option without a Participant's
            consent and (i) provide for the purchase of any such Option for an
            amount of cash equal to the amount (if any) that could have been
            attained upon the exercise of such Option or realization of the
            Participant's rights had such Option been currently exercisable or
            payable or fully vested and/or (ii) provide that such Option shall
            be exercisable (whether or not vested) as to all Shares covered
            thereby for at least thirty (30) days prior to such an Event, Change
            in Control or other corporate event or transaction.

     (e)    FUTURE TRANSACTIONS. The existence of the Plan, any Option Agreement
            and the Options granted hereunder shall not affect or restrict in
            any way the right or power of the Company or the shareholders of the
            Company to make or authorize any adjustment, recapitalization,
            reorganization or other change in the Company's capital structure or
            its business, any merger or consolidation of the Company, any issue
            of stock or of options, warrants or rights to purchase stock or of
            bonds, debentures, preferred or prior preference stocks whose rights
            are superior to or affect the Shares or the rights thereof or which
            are convertible into or exchangeable for Shares, or the dissolution
            or liquidation of the Company, or any sale or transfer of all or any
            part of its assets or business, or any other corporate act or
            proceeding, whether of a similar character or otherwise.

6.   EXERCISE OF STOCK OPTIONS.

     (a)    VESTING. Except as provided otherwise in this Plan or the applicable
            Option Agreement, each Option shall become vested and exercisable in
            three (3) equal installments such that the Option may be exercised
            as to Shares covered by the first installment from and after the
            first anniversary of the date of the grant of the Option, with the
            second and third installments becoming vested and exercisable on the
            two succeeding anniversary dates. Except as provided herein, or
            except as specifically restricted by the Committee, any Option may
            be exercised in whole at any time or in part at any time to the
            extent that such Shares under the Option are then vested and
            exercisable. In no event, however, may any Option be exercised after
            the expiration of its exercise period, as described in Section 6(b),
            below.

                                       -7-
<Page>

     (b)    EXERCISE PERIOD. Notwithstanding any provision herein to the
            contrary, any Option granted pursuant to this Plan shall expire, to
            the extent not exercised, no later than the tenth (10th) anniversary
            of the date on which it was granted. Such time or times shall be set
            forth in the Option Agreement evidencing such Option.

     (c)    NOTICE OF EXERCISE. A Participant electing to exercise an Option
            shall give written notice to the Company, as specified by the Option
            Agreement, of his election to purchase a specified number of Shares.
            Such notice shall be accompanied by the instrument evidencing such
            Option and any other documents required by the Company, and payment
            of the exercise price of the Shares the Participant has elected to
            purchase. If the notice of election to exercise is given by the
            executor or administrator of a deceased Participant, or by the
            person or persons to whom the Option has been transferred by the
            Participant's will or the applicable laws of descent and
            distribution, the Company will be under no obligation to deliver
            Shares pursuant to such exercise unless and until the Company is
            satisfied that the person or persons giving such notice is or are
            entitled to exercise the Option.

     (d)    TERMINATION OF EMPLOYMENT WITHOUT CAUSE OR FOR GOOD REASON.

            (i)    Unless specifically provided otherwise in the Option
                   Agreement, if the CEO's employment is Terminated without
                   Cause by the Company or by the CEO for Good Reason during the
                   term of his employment agreement, all unvested Options of the
                   CEO shall vest immediately and all Options held by the CEO
                   shall remain exercisable for one (1) year following
                   termination of employment, but in no event later than the
                   expiration date of such Option as specified in the applicable
                   Option Agreement. If the Option is not exercised during this
                   period it shall be void and deemed to have been forfeited and
                   be of no further force or effect. In the CEO's employment
                   terminates on September 30, 2007 upon expiration of the
                   employment term under his employment agreement, any unvested
                   Options shall terminate immediately and any vested Options
                   shall remain exercisable for ninety (90) days following
                   termination of employment. If the Option is not exercised
                   during this period, it shall be void and deemed to have been
                   forfeited and be of no further force or effect.

            (ii)   Unless specifically provided otherwise in the Option
                   Agreement, if the employment of an Executive or Discretionary
                   Participant is Terminated without Cause by the Company or by
                   the Executive or Discretionary Participant for Good Reason,
                   all unvested Options held by the Executive or Discretionary
                   Participant, as the case may be, shall terminate immediately
                   and any vested Options shall remain exercisable for six (6)
                   months following the date of such event, but in no event
                   later than the expiration of such Options as specified in the
                   applicable Option Agreement. If the Option is not exercised
                   during this period, it shall be void and deemed to have been
                   forfeited and be of no further force or effect.

                                       -8-
<Page>

     (e)    TERMINATION DUE TO DEATH, DISABILITY OR RETIREMENT.

            (i)    In addition to any rights under Section 10, upon the death,
                   Disability or Retirement of the CEO, all unvested Options
                   shall vest immediately and all Options held by the CEO shall
                   remain exercisable for one (1) year in the event of death or
                   Disability and six (6) months in the event of Retirement
                   following the date of any such event, but in no event later
                   than the expiration date of Option as specified in the
                   applicable Option Agreement. If the Option is not exercised
                   during this period it shall be void and deemed to have been
                   forfeited and be of no further force or effect.

            (ii)   In addition to any rights under Section 10, upon the death or
                   Disability of an Executive, a Director or a Discretionary
                   Participant, all unvested Options shall vest immediately and
                   all Options held by such Executive, Director, or
                   Discretionary Participant, as the case may be, shall remain
                   exercisable for six (6) months following the date of such
                   event, but in no event later than the expiration date of such
                   Option as specified in the applicable Option Agreement. If
                   the Option is not exercised during this period, it shall be
                   void and deemed to have been forfeited and be of no further
                   force or effect.

            (iii)  Upon the Retirement of the Executive, a Non-Employee
                   Director, or a Discretionary Participant, all unvested
                   Options shall terminate immediately and all vested Options
                   held by such Executive, Non-Employee Director or
                   Discretionary Participant, as the case may be, shall remain
                   exercisable for six (6) months following the date of such
                   event, but in no event later than the expiration date of such
                   Options as specified in the applicable Option Agreement. If
                   the Option is not exercised during this period, it shall be
                   void and deemed to have been forfeited and be of no further
                   force or effect.

     (f)    FORFEITURE BY REASON OF TERMINATION FOR CAUSE OR WITHOUT GOOD
            REASON.

            (i)    Notwithstanding the exercise period described in Section
                   6(b), if the employment or service of a Participant or a
                   Director is Terminated for Cause by the Company, all rights
                   or interests in any Option, regardless of the extent to which
                   it might otherwise have been vested and exercisable on the
                   date of such Termination for Cause, shall be void and
                   forfeited effective on the date of such Termination for
                   Cause, and such Option shall no longer be exercisable to any
                   extent whatsoever.

            (ii)   Unless specifically provided otherwise in the Option
                   Agreement, if the CEO's employment is terminated by the CEO
                   without Good Reason, all unvested Options held by the CEO
                   shall terminate immediately and all vested Options held by
                   the CEO shall remain exercisable for thirty (30) days
                   following termination, but in no event later than the
                   expiration date

                                       -9-
<Page>

                   of such Option as specified in the applicable Option
                   Agreement. If the Option is not exercised during this period,
                   it shall be void and deemed to have been forfeited and be of
                   no further force or effect.

            (iii)  Unless specifically provided otherwise in the Option
                   Agreement, if the employment of any Participant other than
                   the CEO is terminated by the Participant without Good Reason,
                   all vested and unvested Options held by the Participant shall
                   terminate immediately and all rights or interests therein
                   shall be void and forfeited effective on the date of such
                   termination.

     (g)    DISPOSITION OF TERMINATED STOCK OPTIONS. Any Shares subject to
            Options which have been terminated and forfeited as provided above
            shall not thereafter be eligible for purchase by the Participant but
            shall again be available for grant by the Board or the Committee to
            other Participants.

7.   RESTRICTIONS ON RESALE OR DISPOSITION OF SHARES.

     (a)    IN GENERAL. Except as specifically provided in Sections 6(e) and 10,
            any Shares purchased under this Plan shall not be assigned, sold,
            transferred, pledged, hypothecated or otherwise disposed of by a
            Participant.

     (b)    ISSUANCE OF SHARES AND COMPLIANCE WITH SECURITIES LAWS. The Shares
            are being offered in reliance upon an exemption from registration
            provided by the federal Securities Act of 1933, as amended (the
            "Securities Act"), and an exemption from registration provided by
            applicable state securities laws. Accordingly, a Participant may not
            sell or transfer the Shares to any person other than the Company
            without registering the Shares under the Securities Act or until the
            Participant has obtained an opinion of legal counsel satisfactory to
            the Company that the sale or disposition is exempt from such
            registration requirements. A Participant has no right at any time to
            require the Company to register the Shares under federal or state
            securities laws.

            Any person purchasing Shares upon exercise of an Option issued
            pursuant to the Plan may be required to make such representations
            and furnish such information as may, in the opinion of counsel for
            the Company, be appropriate to permit the Company, in light of the
            existence or nonexistence with respect to such Shares of an
            effective registration under the Securities Act, or any similar
            state statute, to issue the Shares in compliance with the provisions
            of those or any comparable acts. These restrictions are imposed by
            federal and state securities laws.

     (c)    SECURITIES RESTRICTIONS. All certificates for Shares delivered under
            the Plan shall be subject to such stock-transfer orders and other
            restrictions as the Committee may deem advisable under the rules,
            regulations, and other requirements of the Securities and Exchange
            Commission, any stock exchange upon which the Shares are then
            listed, and any applicable federal or state securities law, and the
            Committee may cause a legend or legends to be put on any such
            certificates to

                                      -10-
<Page>

            make appropriate reference to such restrictions. If the Committee
            determines that the issuance of Shares hereunder is not in
            compliance with, or subject to an exemption from, any applicable
            federal or state securities laws, such shares shall not be issued
            until such time as the Committee determines that the issuance is
            permissible.

8.   NO CONTRACT OF EMPLOYMENT. Unless otherwise expressed in a separate writing
     signed by an authorized officer of the Company, all Employees are employed
     for an unspecified period of time and are considered to be "at-will
     employees." Nothing in this Plan shall confer upon any Participant the
     right to continue in the employ of the Company or any Subsidiary, nor shall
     it limit or restrict in any way the right of the Company or any Subsidiary
     to discharge the Participant at any time for any reason whatsoever, with or
     without cause.

9.   NO RIGHTS AS A STOCKHOLDER. A Participant shall have no rights as a
     stockholder with respect to any Shares subject to an Option unless and
     until the Participant duly exercises the Option, makes full payment of the
     Option price and certificates evidencing ownership of Shares are issued to
     the Participant. Thereafter, cash dividends, stock dividends, stock splits
     and other securities and rights to subscribe shall be paid or distributed
     with respect to Shares acquired pursuant to the Plan in the same manner as
     such items are paid or distributed to other shareholders of the Company.
     Adjustments to the number and kind of Shares in the event of certain
     transactions shall be made as described in Section 5(b).

10.  NONTRANSFERABILITY OF OPTIONS; DEATH OR DISABILITY OF PARTICIPANT. No
     Option acquired by a Participant under the Plan shall be assignable or
     transferable by a Participant, other than by will or the laws of descent
     and distribution, and such Options are exercisable, during his lifetime,
     only by the Participant. In the event of the Participant's death or
     Disability, the Option may be exercised by the personal representative of
     the Participant's estate or if no personal representative has been
     appointed, by the successor(s) in interest determined under the
     Participant's will or under the applicable laws of descent and distribution
     during the exercise period set forth in Section 6(e) herein. During such
     exercise period and only if price quotations for the Shares are NOT
     available on any exchange or national market system, in the case of the
     death or Disability of the CEO, an Executive, or a Discretionary
     Participant, such individual in the case of Disability, or the beneficial
     holder of such Option in the case of death, shall have the right during the
     exercise period provided in Section 6(e)(i) or (ii), as applicable, and in
     accordance with procedures that the Committee, in its discretion, may
     establish from time to time, to demand that the Company purchase each
     vested Option at a value equal to the value of the difference between the
     Fair Market Value of the Shares of the Company and the exercise price of
     such Options.

11.  CHANGE IN CONTROL. In the event of a "Change in Control" (as defined
     below), the Board, in its discretion, may accelerate the vesting of all
     Options without regard to the normal vesting schedule of the Options. In
     addition, if the employment of an Executive is terminated by the Company
     without Cause or by the Executive with Good Reason within twelve (12)
     months following a Change in Control, all unvested Options of the Executive
     shall vest immediately and all Options held by the Executive shall remain

                                      -11-
<Page>

     exercisable for one (1) year following termination of employment, but in no
     event later than the expiration date of any such Option as specified in the
     applicable Option Agreement. If the Option is not exercised during this
     period, it shall be void and deemed to have been forfeited and be of no
     further force or effect.

     "Change in Control" shall mean the occurrence of any one of the following
     events:

     (a)    any "Person" other than an Existing Substantial Shareholder (as
            defined below) becomes the Beneficial Owner, directly or indirectly,
            of securities of the Company representing a majority of the combined
            voting power of the Company's then outstanding securities (assuming
            conversion of all outstanding non-voting securities into voting
            securities and the exercise of all outstanding options or other
            convertible securities);

     (b)    the following individuals cease for any reason to constitute a
            majority of the number of Directors then serving: individuals who,
            on the Effective Date, constitute the Board and any new Director
            (other than a Director whose initial assumption of office is in
            connection with an actual or threatened election contest, including
            but not limited to, a consent solicitation, relating to the election
            of Directors of the Company) whose appointment or election by the
            Board or nomination for election by the Company's stockholders was
            approved or recommended by a vote of at least two-thirds (2/3) of
            the Directors then still in office who either were Directors on the
            Effective Date or whose appointment, election or nomination for
            election was previously so approved or recommended;

     (c)    the consummation of a merger or consolidation of the Company or any
            direct or indirect subsidiary of the Company with any other
            corporation (other than with an Existing Substantial Shareholder or
            any of its affiliates), other than (x) a merger or consolidation
            which would result in the voting securities of the Company
            outstanding immediately prior to such merger or consolidation
            continuing to represent, either by remaining outstanding or by being
            converted into voting securities of the surviving entity or any
            parent thereof, a majority of the combined voting power of the
            securities of the Company or such surviving entity or any parent
            thereof outstanding immediately after such merger or consolidation,
            or (y) a merger or consolidation effected to implement a
            recapitalization of the Company (or similar transaction) in which no
            Person, is or becomes the Beneficial Owner, directly or indirectly,
            of securities of the Company representing a majority of the combined
            voting power of the Company's then outstanding securities; or

     (d)    the stockholders of the Company approve a plan of complete
            liquidation or dissolution of the Company or there is consummated an
            agreement for the sale or disposition by the Company of all or
            substantially all of the Company's assets, other than a sale or
            disposition by the Company of all or substantially all of the
            Company's assets to an entity controlled by an Existing Substantial
            Shareholder or any of its affiliates, or to an entity a majority of
            the combined voting power of the voting securities of which is owned
            by substantially all of the stockholders of the

                                      -12-
<Page>

            Company immediately prior to such sale in substantially the same
            proportions as their ownership of the Company immediately prior to
            such sale.

     As used herein the term "Existing Substantial Shareholder" means any Person
     that alone or together with its affiliates shall be the Beneficial Owner of
     or entitled to receive more than 15% of New Common Stock as of the
     Effective Date.

     As used herein the term "Beneficial Owner" shall have the meaning set forth
     in Rule 13d-3 under the Exchange Act.

     As used herein the term "Person" shall have the meaning given in Section
     3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof,
     except that such term shall not include (i) the Company or any subsidiary
     of the Company, (ii) a trustee or other fiduciary holding securities under
     an employee benefit plan of the Company or any of its affiliates, (iii) an
     underwriter temporarily holding securities pursuant to an offering of such
     securities or (iv) a corporation owned, directly or indirectly, by
     substantially all of the stockholders of the Company in substantially the
     same proportions as their ownership of stock of the Company.

12.  AMENDMENTS; DISCONTINUANCE OF PLAN. The Board may from time to time alter,
     amend, suspend, or discontinue the Plan, including, where applicable, any
     modifications or amendments as it shall deem advisable for any reason,
     including satisfying the requirements of any law or regulation or any
     change thereof; provided, however, except as provided in Section 5, that no
     such action shall adversely affect the rights and obligations with respect
     to Options at that time outstanding under the Plan; and provided further,
     that no such action shall, without the approval of the stockholders of the
     Company, (a) increase the maximum number of Shares of common stock that may
     be made subject to Options (unless necessary to effect the adjustments
     required by Section 5(b)).

13.  WITHHOLDING TAXES; TAXES SATISFIED BY WITHHOLDING OPTIONED SHARES.

     (a)    GENERALLY. The Company or any Subsidiary may take such steps as it
            may deem necessary or appropriate for the withholding of any taxes
            which the Company or any Subsidiary is required by law or regulation
            of any governmental authority, whether federal, state, or local,
            domestic or foreign, to withhold in connection with any Option
            including, but not limited to, requiring the Participant to pay such
            tax at the time of exercise or the withholding of issuance of Shares
            to be issued upon the exercise of any Option until the Participant
            reimburses the Company for the amount the Company is required to
            withhold with respect to such taxes, or, at the Company's sole
            discretion, canceling any portion of such issuance of Shares in any
            amount sufficient to reimburse itself for the amount it is required
            to so withhold.

     (b)    SATISFYING TAXES BY WITHHOLDING OPTIONED SHARES. Option Agreements
            under the Plan may, at the discretion of the Board or the Committee,
            contain a provision to the effect that all federal and state taxes
            required to be withheld or collected from

                                      -13-
<Page>

            a Participant upon exercise of an Option may be satisfied by the
            withholding of a sufficient number of exercised Shares that are
            subject to the Option which, valued at Fair Market Value on the date
            of exercise, would be equal to the total withholding obligation of
            the Participant for the exercise of such Option; provided, however,
            that if the Company is a public reporting corporation, no person who
            is an "officer" of the Company, as such term is defined in Rule 3b-2
            under the Exchange Act, may elect to satisfy the withholding of
            federal and state taxes upon the exercise of an Option by the
            withholding of exercised Shares that are subject to the Option,
            unless such election is made either (i) at least six (6) months
            prior to the date that the exercise of the Option becomes a taxable
            event or (ii) during any of the periods beginning on the third
            business day following the date on which the Company issues a news
            release containing the operating results of a fiscal quarter or
            fiscal year and ending on the twelfth business day following such
            date. Such election shall be deemed made upon receipt of notice
            thereof by an officer of the Company, by mail, personal delivery, or
            by facsimile message, and shall (unless notice to the contrary is
            provided to the Company) be operative for all Option exercises which
            occur during the twelve-month period following the election.

14.  EFFECTIVE DATE AND TERM OF PLAN. The Plan is effective as of the Effective
     Date and Options may be granted at any time on or after such date. No
     Options shall be granted subsequent to August 30, 2014 (which is ten (10)
     years after the effective date of the Plan).

     [Exhibit A - List of Executives has been omitted from the Agreement as
filed with the Securities and Exchange Commission (the "SEC"). The omitted
information is filed as Exhibit 10.08 to the Registration Statement. The
Registrant will furnish supplementally a copy of any of the omitted exhibit to
the SEC upon request from the SEC.]

                                      -14-

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