Document:

Stock Incentive Plan

 
Exhibit 10.9

 
UNIVERSAL STAINLESS & ALLOY PRODUCTS,
INC. 
 
STOCK INCENTIVE PLAN

 
1. Purpose

 
The purpose of this plan (the “Plan”)
is to secure for Universal Stainless & Alloy Products, Inc. (the “Company”), and its stockholders, the benefits arising from the ownership of stock options by directors and employees (including, without limitation, officers) of the
Company or Subsidiaries (as defined in Section 18 hereof) who are expected to contribute to the Company’s future growth and success. 
 
2. Types of Plan Benefits and Administration 
 
(a) Types of Awards. Under the Plan, the Company may in its sole discretion grant, with respect to the
Company’s common stock, par value $.001 per share (“Common Stock”), options (“Options”) to employees (the “Employees”), as authorized by action of the Board of Directors of the Company (or a
committee designated by the Board of Directors), and the Company shall, subject to the terms and conditions hereof, grant to each director of the Company who is not an employee and does not own, individually or together with family members, in
excess of 5 % of outstanding Common Stock (an “Eligible Director”), Options in accordance with the formula set forth in Section 7 hereof. As used in the Plan, an “Award” shall mean an Option and an “Award
Owner” shall mean the owner of an Option. Options granted pursuant to the Plan to Employees may be either incentive stock options (“Incentive Stock Options”) meeting the requirements of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”), or non-statutory options (“Non-Statutory Stock Options”), which are not intended to or do not meet the requirements of Code Section 422. Options granted to Eligible Directors pursuant to
the Plan shall be only Non-Statutory Stock Options. 
 
(b) Administration. The Plan will be administered by the Board of Directors of the Company, except to the extent the Board of Directors appoints from among its members a committee to administer the Plan (in either case, the
group administering the Plan is hereinafter referred to as the “Committee”). The Committee’s construction and interpretation of the terms and provisions of the Plan shall be final and conclusive. The Committee may in its sole
discretion grant Options to purchase shares of the Company’s Common Stock to Employees, and issue shares upon exercise of such Options, as provided in the Plan. The Committee shall grant Options to purchase shares of the Company’s Common
Stock to the Eligible Directors, and issue shares upon exercise of such Options, as provided in the Plan. The Committee shall have authority, subject to the express provisions of the Plan, including, but not limited to Section 7 hereof, to construe
the respective Award agreements and the Plan; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of the respective Award agreements, which need not be identical; to advance the lapse of
any waiting or installment periods and exercise dates; and to make all other determinations in the sole judgment of the Committee necessary or desirable for the administration of the Plan. The Committee may correct any defect or supply any omission
or reconcile any inconsistency in the 
 

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Plan or in any Award agreement
in the manner and to the extent it shall deem expedient to carry the Plan into effect, and such determination shall be in the sole and final judgement of the Committee. No director shall be liable for any action or determination taken or made under
or with respect to the Plan or any Award in good faith. 
 
3. Eligibility 
 
(a) Generally. 
 
(i) Except as provided in paragraph (b) of this Section 3 and Section 7 hereof, Awards shall be granted only to persons selected by the Committee who are, at the time of grant, directors or employees (including, without limitation,
officers) of the Company or any Subsidiary of the Company. 
 
(ii) An Employee may be granted Incentive Stock Options and/or Non-Statutory Stock Options. An Employee who has been granted an Award may, if he or she is otherwise eligible, be granted one or more
additional Awards if the Committee shall so determine. 
 
(b) Incentive Stock Options. No person shall be granted any Incentive Stock Option under the Plan unless, at the time such Option is granted, such person is an employee of the Company or any Subsidiary of the Company, and does
not own, directly or indirectly, Common Stock of the Company possessing more than 10% of the total combined voting power of all classes of stock of the Company or of any Subsidiary (unless the requirements of Section 6(f)(i) are satisfied).

 
4. Stock Subject to Plan

 
Subject to adjustment as provided in Sections 13
and 14 below, the maximum number of shares of Common Stock of the Company that may be issued and sold pursuant to Options granted under the Plan is 900,000 shares in the aggregate (one share per Option). No individual employee shall be granted
Options to purchase more than 100,000 shares in any calendar year. The Company shall reserve for the purposes of the Plan, out of its authorized but unissued shares of Common Stock or out of shares held in the Company’s treasury, or partly out
of each, such number of shares of Common Stock as shall be determined by the Committee. If Options granted under the Plan shall expire or terminate for any reason without having been exercised in full, the shares subject to the unexercised portions
of such Options shall again be available for subsequent Award grants under the Plan. Common Stock issuable upon exercise of Options may be subject to such restrictions on transfer, repurchase rights or other restrictions as shall be determined by
the Committee. 
 
5. Form of
Option Agreements 
 
As a condition to the
grant of an Option under the Plan, each Employee recipient of an Option shall execute an Option Agreement, substantially in the form of not inconsistent with the Plan as shall be specified by the Committee at the time such Option is granted. Each
Eligible 
 

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Director, as a condition to
the grant of Options to him or her pursuant to Section 7(a) hereof, shall execute an Option Agreement, substantially in the form not inconsistent with the Plan as shall be specified by the Committee at the time such option is granted. 
 
6. Grants of Awards to Employees

 
(a) Disinterested Committee. Any Employee
who is a director or officer of the Company shall be granted Awards only if such person has been selected for participation and the terms and provisions of such Awards have been determined, solely by, and in the sole discretion of, a Committee of
two or more directors, each of whom is a “disinterested person. For purposes of the Plan, a person shall be deemed to be “disinterested” only if such person qualifies as a “disinterested person” within the meaning of
paragraph (c)(2) of Rule 16b-3 of the Securities and Exchange Commission (the “SEC”). The term “officer” shall have the same meaning as in paragraph (f) of Rule 16a-1. To the extent required to comply with the rules under Rule
16b-3, all references to the Committee in the Plan shall mean and relate to the Committee of two or more “disinterested persons” described in this Section 6(a). 
 
(b) Purchase Price. The purchase price per share of stock issuable upon the exercise of an Option
granted pursuant to this Section 6 shall be, the Fair Value on the date that such Option is granted. Notwithstanding anything to the contrary contained herein, in the case of an Incentive Stock Option, the exercise price shall not be less than 100%
of the Fair Value of such stock at the date of grant of such Option, or less than 110% of such Fair Value in the case of Options described in Section 6(f)(i). 
 
(c) Exercise Period. Each Award to an Employee shall expire on such date as the Committee shall determine on the date such Award is
granted, but in no event after the expiration of ten years from the date on which such Award is granted, and in all cases each Award shall be subject to earlier termination as provided in the Plan. 
 
(d) Vesting of Awards. An Award granted to an Employee
may be exercised, and payment shall be made upon exercise of such Award, only to the extent that such Award has vested. Awards shall vest based on the collective number of years of service with or for the Company or a Subsidiary, in accordance with
the schedule or terms set forth in the Award agreement executed by the Award Owner and a duly authorized officer of the Company. Notwithstanding the foregoing, unless the Committee specifically authorizes a different vesting schedule with respect to
an Award, an Award to an Employee shall become exercisable based on the number of full years of service that such Award Owner has completed with the Company or a Subsidiary since the date of the grant of such Award, in accordance with the following
schedule: 
 

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	 Number of Years of Service
 Since First Date of Grant

	  	 Percentage of Award Available
 for Exercise (Cumulative)

	 	  	 
	 1
	  	   25%

	 2
	  	   50%

	 3
	  	   75%

	 4
	  	 100%

 
(e)
Effect of Termination of Employment. No Award to an Employee may be exercised unless, at the time of such exercise the Employee is, and continuously since the date of grant of his or her Award has been, an employee of the Company or a
Subsidiary, except that subject to Section 6(d) and if and to the extent the Award agreement or instrument so provides: 
 
(i) if the Employee ceases to be an employee of the Company or a Subsidiary for any reason other than death or disability or a discharge
for “cause” (as defined in (iv) below), the right to exercise the Award shall terminate three months after such cessation (or within such lesser period as may be specified in the Award agreement or instrument); 
 
(ii) if the Employee dies while an employee of the Company or
a Subsidiary, or within three months after the Employee ceases to be such an employee, the Awards may be exercised by the administrator of the Employee’s estate, or by the person to whom the Options are transferred by will or the laws of
descent and distribution, within the period of one year after the date of death (or within such lesser period as may be specified in the Award agreement or instrument); 
 
(iii) if the Employee become disabled (within the meaning of Section 22(e)(3) of the Code) while an employee
of the Company or a Subsidiary, the Awards may be exercised within the period of one year after the date the Employee ceases to be an employee of the Company or Subsidiary because of such disability (or within such lesser period as may be specified
in the Award agreement or instrument); and 
 
(iv)
if the Employee, prior to the expiration date of an Award ceases his or her services as an employee of the Company or Subsidiary, because he or she is discharged for “cause” (as defined below), the right to exercise an Option shall
terminate immediately upon such cessation of such services. “Cause” shall mean: willful misconduct in connection with the Employee’s performance of services for the Company or willful failure to perform his or her services in the best
interest of the Company, determined by the Committee, which determination shall be conclusive; 
 
provided, however, that in no event may any Award be exercised after the expiration date of the Award. Any Award or portion thereof that is not exercised during the applicable time period
specified above (or any shorter period specified in the Award agreement or instrument) shall be deemed terminated at the end of the applicable time period for purposes of Section 4 hereof. 
 

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(f)
Incentive Stock Options. Options granted under the Plan that are intended to be Incentive Stock Options shall be specifically designated as intending to be Incentive Stock Options and shall be subject to the following additional terms and
conditions: 
 
(i) 10% Stockholder. If an
Employee to whom an Incentive Stock Option is to be granted under the Plan is at the time of the grant of such Option the owner of stock possessing more than 10% of the total combined voting power of all classes of stock of the Company or any
Subsidiary, then the following special provisions shall be applicable to the Incentive Stock Option granted to such individual: (x) the exercise price per share of the Common Stock subject to such Incentive Stock Option shall not be less than 110%
of the Fair Value (as defined in Section 18) of one share of Common Stock at the time of grant; and (y) the option exercise period shall not exceed five years from the date of grant. 
 
(ii) Dollar Limitation. Common Stock of the Company that is acquired pursuant to the exercise of an
Incentive Stock Option granted to an Employee under the Plan shall be deemed to be acquired pursuant to the exercise of an Incentive Stock Option under Code Section 422, only to the extent that the aggregate Fair Value (determined as of the
respective date or dates of grant) of the Common Stock with respect to which such Incentive Stock Option, and all other Incentive Stock Options that are granted to such Employee under the Plan (and under any other incentive stock option plans of the
Company or any Subsidiary), are exercisable for the first time by such Employee in any one calendar year, does not exceed $100,000. To effectuate the provisions of Section 6(f), the Committee may designate the shares of Common Stock that are treated
as acquired pursuant to the exercise of an Incentive Stock Option by issuing a separate certificate for such shares and identifying such certificates as Incentive Stock Option stock in its stock transfer records. 
 
(iii) If an Employee makes a disposition, within the meaning
of Section 424(c) of the Code and regulations promulgated thereunder, of any share or shares of Common Stock issued to such Employee pursuant to the exercise of an Incentive Stock Option within the two-year period commencing on the day after the
date of the grant or within the one-year period commencing on the day after the date of transfer of such share or shares to the Employee pursuant to such exercise, the Employee shall, within ten (10) days of such disposition, notify the Company
thereof, by delivery of written notice to the Company at its principal executive office. 
 
Except as modified by the preceding provisions of this Section 6(f), all the provisions of the Plan applicable to Options shall be applicable to Incentive Stock Options granted hereunder. 
 
7. Non-discretionary Formula Grants of
Awards to Eligible Directors 
 
(a)
Non-discretionary Grants. Notwithstanding anything to the contrary contained in this Plan, Eligible Directors shall be granted Options (“Director Options”) as follows: following each successive annual meeting of shareholders so long
as Director Options remain available for grant, each person who is elected as a Director at that meeting and is an Eligible Director, and each person who continues to serve as a director after that meeting, and is an Eligible director, shall be
granted 2,500 Director Options to purchase 2,500 shares of Common Stock in the aggregate on each of the following dates during the twelve (12) month period 
 

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following the annual meeting
of shareholders: May 31, August 31, November 30 and February 28, in recognition of service, subject to vesting as provided in Section 7(d) below, for the following year ending on the day prior to the next succeeding annual meeting of shareholders of
the Company to elect directors. 
 
(b) Purchase
Price. The purchase price per share of stock issuable upon the exercise of an Option granted pursuant to this Section 7 shall be the Fair Value on the date that such Option is granted. 
 
(c) Exercise Period. The term of each Option granted pursuant to this Section 7 shall be ten years
from the date of the grant thereof, subject to earlier termination as herein provided. Any Option that is not exercised during the applicable time period specified in this Section 7 shall be deemed terminated at the end of the applicable time period
for purposes of Section 4 hereof. In no event may any Option granted pursuant to this Section 7 be exercised after the expiration date thereof. 
 
(d) Vesting of Awards. Director Options shall be exercisable by an Eligible Director only to the extent that they have vested.

 
(i) Director Options shall vest based on years
of service as follows: 
 

	 Number of Years of Service
 Since First Date of Grant

	  	 Percentage of Award Available
 for Exercise (Cumulative)

	 	  	 
	 1
	  	 33%

	 2
	  	 66%

	 3
	  	 100%

 
(e)
Effect of Termination of Service or Death. If an Eligible Director ceases to serve as a director of the Company or a Subsidiary, the Options that have been previously granted to that Eligible Director and that are vested as of the date of
such cessation may be exercised by the Eligible Director after the date such Eligible Director ceases to be a director of the Company or Subsidiary. If an Eligible Director dies while a director of the Company or a Subsidiary, the Options that have
been previously granted to that Eligible Director and that are vested as of the date of such death may be exercised by the administrator of the Eligible Director’s estate, or by the person to whom such Options are transferred by will or the
laws of descent and distribution. In no event, however, may any Option be exercised after the expiration date of such Option. Any Option or portion thereof that is not exercised during the applicable time period specified above shall be deemed
terminated at the end of the applicable time period for purposes of Section 4 hereof. 
 
(f) Limitation on Amendments to Terms of Non-discretionary Grants. Notwithstanding anything to the contrary contained in this Plan, the provisions of this Section 7 shall not be amended more
than once every six months, other than to comport with changes in the Code, the Employee Retirement Income Security Act of 1974, as amended, or the rules 
 

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thereunder. Any reference to
Option or Options in this Section 7 shall refer to Options granted to Eligible Directors pursuant to this Section 7 
 
8. Method of Exercise 
 
An Award Owner may exercise an Option granted hereunder by delivering to the Company at its main office (to the attention of the
Secretary) written notice of exercise, which notice shall specify the number of shares with respect to which the Option is being exercised, together with payment of the purchase price in exchange for the Company’s issuance and delivery of
certificates therefor. The purchase price for any shares of Common Stock purchased pursuant to the exercise of an Option shall be paid in full upon such exercise by any one or a combination of the following: (i) cash (by check), (ii) transferring
shares of fully paid Common Stock to the Company with a Fair Value equal to the aggregate purchase price, or (iii) solely with respect to Options that are not Director Options, by cash payments in installments or pursuant to a full recourse
promissory note, in either case, upon such terms as the Committee deems appropriate. Notwithstanding the foregoing, the Committee shall have discretion to determine at the time of grant of each Option (other than a Director Option) or at any later
date (up to and including the date of exercise) the form of payment acceptable in respect of the exercise of such Option. The written notice pursuant to this Section 8 may also provide instructions to the Company that upon receipt of the purchase
price in cash from the Award Owner’s broker or dealer, designated as such on the written notice, in payment for any shares purchased pursuant to the exercise of an Option, the Company shall issue such shares directly to the designated broker or
dealer. Any shares transferred to the Company as payment of the purchase price under an Option shall be valued at their Fair Value on the day preceding the date of exercise of such Option. If requested by the Committee, the Award Owner shall deliver
the related Award agreement to the Secretary of the Company who shall endorse thereon a notation of such exercise and return such agreement to the Award Owner. No fractional shares (or cash in lieu thereof) shall be issued upon exercise of an Option
and the number of shares that may be purchased upon exercise shall be rounded to the nearest number of whole shares. 
 
9. Reload Options 
 
Options (other than Director Options) granted under the Plan may, in the discretion of the Committee, include the right to acquire a
reload option (“Reload Option”). The term “Reload Option” shall mean the right to purchase a number of shares of Common Stock equal to the number of shares tendered by an Employee in exercising an Option, and the number of whole
shares, if any, withheld by the Company in satisfaction of Withholding Taxes (as defined in Section 20). A Reload Option shall have a purchase price equal to the Fair Value of Common Stock on the date the Employee receives the Reload Option and a
term extending to the expiration date of the Option with respect to which the Reload Option was granted. 
 
10. Nontransferability of Awards 
 
No Award granted under the Plan shall be assignable or transferable by the person to whom it is granted,
either voluntarily or by operation of law, except by will or the laws of 
 

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descent and distribution.
During the life of the recipient, the Award shall be exercisable only by or on behalf of such person. 
 
11. General Restrictions 
 
(a) Award Owner Representations. The Company may require a person to whom an Award is granted, as a condition of exercising such
Award, to: 
 
(i) give such written assurances, in
substance and form satisfactory to the Company, as the Company deems necessary or appropriate in order to comply with federal and applicable state securities laws, including, without limitation, that such person is acquiring the Common Stock subject
to the Award for his or her own account for investment and not with any present intention of selling or otherwise distributing the same; 
 
(ii) with respect to Employees only, grant to the Company the right, which may be upon such terms as the Committee, in its sole
discretion, prescribes, to repurchase from the Award Owner any or all shares acquired by such Award Owner through the exercise of an Award which such Award owner may at any time desire to sell, transfer or otherwise dispose of; and 
 
(iii) if the Award Owner is a director or officer, give
written assurances, in substance and form satisfactory to the Company, that such person has consulted with competent counsel as to the application of Section 16(b) of the Securities Exchange Act of 1934 (the Exchange Act”) to such
exercise. 
 
Certificates representing shares issued upon exercise
of the Award shall bear such legends as are deemed appropriate by legal counsel to the Company, unless the Award Owner provides a written opinion of legal counsel, satisfactory to the Company, that any such legend is not required. 
 
(b) Compliance With Securities Laws. 
 
(i) Each Award shall be subject to the requirement that, if at
any time counsel to the Company shall determine that the listing, registration or qualification of such Award or the shares subject to such Award upon any securities exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of, or in connection with the grant or exercise of such Award or the issuance or purchase of shares thereunder, such Award shall not be effective or may not be accepted or exercised in
whole or in part (as applicable) unless such listing, registration, qualification, consent or approval shall have been effected or obtained on conditions acceptable to the Committee. Nothing herein shall be deemed to require the Company to apply for
or to obtain such listing, registration, qualification, consent or approval. 
 
(ii) The Company shall provide each Award Owner with such information, statements, discussions and analyses with respect to the Company in such manner and at such times as may be required under state
or federal securities laws. 
 

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12. Rights as a Stockholder 
 
The Award Owner shall have no rights as a stockholder with respect to any shares covered by the Award until the date upon which the stock certificates are issued to him or her for such shares. Except as otherwise expressly provided
in the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date on which such stock certificate is issued. 
 
13. Recapitalization 
 
In the event that the outstanding shares of Common Stock of the Company are changed into or exchanged for a
different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, stock dividend, combination or subdivision, an appropriate and proportionate adjustment shall be made in the
number and kind of shares subject to the Plan and in the number, kind, and per share exercise price, of shares subject to unexercised Options or portions thereof granted prior to such adjustment. Any such adjustment to an outstanding Option shall be
made without change in the total price applicable to the unexercised portion of such Option as of the date of the adjustment. No such adjustment shall be made with respect to an Incentive Stock Option that would, within the meaning of any applicable
provisions of the Code, constitute a modification, extension or renewal of any Option or a grant of additional benefits to the holder of an Option. 
 
14. Reorganization 
 
In the event the Company is merged or consolidated with another entity or person other than an Affiliate, and the Company is not a
surviving entity, or in the event all or substantially all of the assets or more than 20% of the outstanding stock of the Company entitled to vote for directors is acquired by any other entity or person other than an Affiliate, or in the event of a
reorganization or liquidation of the Company the Committee, or the board of directors of any corporation assuming the obligations of the Company, shall, as to outstanding Awards, either (i) in the case of a merger, consolidation or reorganization of
the Company, make appropriate provision for the protection of any such outstanding Awards by the substitution on an equivalent basis of appropriate stock of the Company, or of the merged, consolidated or otherwise reorganized corporation that will
be issuable in respect of the shares of Common Stock of the Company (provided that no additional benefit shall be conferred upon Award Owners as a result of such substitution), or (ii) upon written notice to the Award Owners, provide that all
unexercised Awards must be exercised within a specified number of days of the date of such notice or they will be terminated, or (iii) upon written notice to the Award Owners, provide that all unexercised Awards shall be purchased by the Company or
its successor within a specified number of days of the date of such notice at a price equal to the value the Award Owners would have received if they then exercised all their Awards and immediately received full payment in respect of such exercise,
as determined in good faith by the Committee. 
 

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15. No Special Employment Rights 
 
Nothing contained in the Plan or in any Award granted under the Plan shall confer upon any Award Owner any right with respect to the continuation of his or her employment by the Company (or any Subsidiary) or interfere in any way
with the right of the Company (or any Subsidiary), subject to the terms of any separate employment agreement to the contrary, at any time to terminate such employment or to increase or decrease the compensation of the Award Owner from the rate in
existence at the time of the grant of an Award. Whether an authorized leave of absence, or absence in military or government service, shall constitute termination or cessation of services for purposes of this Plan shall be determined by the
Committee. 
 
16. No Special
Directorship Rights 
 
Nothing contained in the
Plan or in any Award granted under the Plan shall constitute evidence of any agreement or understanding, express or implied, that an Eligible Director has a right to continue as a director for any period of time. 
 
17. Other Employee Benefits

 
The amount of any income deemed to be received
by an Award Owner as a result of the exercise of an Award or the sale of shares received upon such exercise will not constitute “compensation” or “earnings” with respect to which any other benefits of such person are determined
by the Company, including without limitation benefits under any pension, profit sharing, life insurance or salary continuation plan. 
 

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18. Definitions 
 
(a)
Affiliate. The term “Affiliate” shall mean a corporation or other entity or person which, at the time of reference, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control
with, the Company. 
 
(b) Fair Value. The
term “Fair Value” of a share of Common Stock shall mean (i) if the Common Stock is traded on a national securities exchange, the closing price for such stock on the day immediately preceding the date of determination or if there is no
closing price on such date, the last preceding closing price, (ii) if the Common Stock is not traded on a national securities exchange, the mean of the high bid and ask quotes of such stock as reported in the NASDAQ/NMS reports or the National
Quotation Bureau Inc.’s pink sheets or in the NASD Bulletin Board on the day immediately preceding the date of determination or if there were no high bid and ask quotes on such date, the last preceding day that there were, and (iii) if neither
(i) or (ii) are applicable, as determined in good faith by the Committee, provided, however, that if the recipient is a director or holds 10% or more of the Common Stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company (directly or beneficially), Fair Value shall be determined by an independent securities valuation firm selected by a committee of “disinterested” persons (as defined in Section 6(a) hereof) appointed by
the Committee. 
 
(c) Rule 16b-3. The term
“Rule 16b-3” shall mean Rule 16b-3 of the SEC (or any successor rule). 
 
(d) Subsidiary. The term “Subsidiary” shall mean any corporation in an unbroken chain of corporations beginning with the Company if, at the time of the grant of the Award, each of the
corporations other than the last Corporation in the unbroken chain owns stock possessing 50% or more of the total combined voting power of all classes of stock in one of the other corporations in such chain. 
 
19. Amendment of the Plan

 
(a) Except as provided in Section 7 hereof, the
Board may at any time and from time to time modify or amend the Plan in any respect, provided that, unless the Board shall have received the consent of the stockholders, the board may not make any amendments that require approval of the stockholders
under Rule 16b-3. As of September 23, 1994, Rule 16b-3 required stockholder approval of amendments that (i) materially increase the benefits accruing to individuals who participate in the Plan, (ii) materially increase the maximum number of shares
that may be issued under the Plan (except for permissible adjustments provided in the Plan), or (iii) materially modify the requirements as to eligibility for participation in the Plan. In addition, the Board shall not modify or amend the Plan in a
manner that would require stockholder approval under Section 422 of the Code, without obtaining such stockholder approval, if such amendment would affect the status of any outstanding Incentive Stock Option as an incentive stock option under Section
422 of the Code. As of September 23, 1994, Section 422 of the Code required stockholder approval of amendments that (A) increase the aggregate number of shares that may be issued pursuant to Incentive Stock Options (except for permissible
adjustments 
 

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provided in the Plan), or (B)
change the designation of employees or the class of employees eligible to receive Incentive Stock Options. The termination or any modification or amendment of the Plan shall not, without the consent of an Award Owner, affect his or her rights under
an Award previously granted to him or her. With the consent of the Award Owners affected, the Committee may amend outstanding Award agreements in a manner not inconsistent with the Plan. 
 
(b) Notwithstanding the provisions of Sections 19(a)(i) and (iii), the Board shall have the right, but not
the obligation, without the consent of the Company’s stockholders, to (i) amend or modify the terms and provisions of the Plan and of any outstanding Incentive Stock Options granted under the Plan to the extent necessary to qualify any or all
such options for such favorable federal income tax treatment (including deferral of taxation upon exercise), as may be afforded incentive stock options under Section 422 of the Code; and (ii) amend or modify the terms and provisions of the Plan and
of any outstanding Award granted under the Plan to the extent necessary to comply with any securities law to which, in the opinion of counsel to the Company, the Plan or Award is subject. 
 
20. Withholding 
 
At such times as an Award Owner recognizes taxable income in connection with the receipt of shares of Common
Stock hereunder (a “Taxable Event”), the Award Owner shall pay to the Company an amount equal to the federal, state and local income taxes and other amounts as may be required by law to be withheld by the Company in connection with the
Taxable Event (the “Withholding Taxes”) prior to the issuance, or release from escrow, of such shares. In satisfaction of the obligation to pay Withholding Taxes to the Company, the Committee may, in its discretion and subject to
compliance with applicable securities laws and regulations, withhold Common Stock having an aggregate Fair Value on the date preceding the date of such issuance equal to the Withholding Taxes. 
 
21. Effective Date and Duration of the
Plan 
 
(a) Effective Date. The Plan
shall become effective when adopted by the Board, but no award granted under the Plan (other than Director Options granted pursuant to Section 7 hereof) shall become exercisable unless and until the Plan shall have been approved by the
Company’s stockholders within twelve months before or after the date of such adoption. If such stockholder approval is not obtained within such period, any Award previously granted under the Plan (other than Director Options, which shall remain
in effect but which shall not qualify for the exemption from Section 16(b) of the Exchange Act under Rule 16b-3) shall terminate and no further Awards shall be granted. Subject to this limitation, Awards may be granted under the Plan at any time
after the effective date and before the date fixed for termination of the Plan. 
 
(b) Termination. The Plan shall terminate upon the earlier of (i) the close of business on the day next preceding the tenth anniversary of the date of its adoption by the Board or (ii) the date
on which all shares available for issuance under the Plan shall have been issued pursuant to the exercise of Awards granted under the Plan. If the date of termination is determined under (i) 
 

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above, then Awards outstanding
on such date shall continue to have force and effect in accordance with the provisions of the instruments evidencing such Awards. 
 
22. Governing Law 
 
The Plan and all Award agreements issued hereunder shall be governed by the laws of the State of Delaware. 
 
23. Expenses of Administration

 
All costs and expenses incurred in the operation
and administration of this Plan shall be borne by the Company. 
 

13FIFTH AMENDMENT TO THE SECOND RESTATED CREDIT AGREEMENT

 
Exhibit 10.19

 
FIFTH AMENDMENT 
TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT 
 
This FIFTH AMENDMENT TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (this “Amendment”) is made as
of February 18, 2003, and entered into by and between UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC., a corporation organized and existing under the laws of the state of Delaware (the “Borrower”), and PNC BANK, NATIONAL ASSOCIATION (the
“Bank”), and amends that certain Second Amended and Restated Credit Agreement dated as of January 30, 1998 by and between the Borrower and the Bank (the Second Amended and Restated Credit Agreement, as amended prior to the date hereof, is
hereinafter referred to as the “Existing Credit Agreement”). 
 
W I T N E S S E T H : 
 
WHEREAS, the Borrower and the Bank entered into the Existing Credit Agreement; and 
 
WHEREAS, upon the request of the Borrower, the Bank has agreed to modify the Existing Credit Agreement, all as more particularly set forth
herein. 
 
NOW THEREFORE, in consideration of the
foregoing premises, the mutual covenants and agreements contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and with the intent to be legally bound hereby, the parties hereto
agree as follows: 
 
ARTICLE I 
AMENDMENTS TO EXISTING CREDIT AGREEMENT 
 
Section 1.01 Amendments to Section 1.1 of the Existing Credit Agreement. (a) The following defined terms and the definitions
therefor are hereby added to Section 1.1 of the Existing Credit Agreement and inserted in correct alphabetical order: 
 
Fifth Amendment: The Fifth Amendment to Second Amended and Restated Credit Agreement entered into by and between
the Borrower and the Bank and dated as of February 18, 2003. 
 
Fifth Amendment Effective Date: February 18, 2003, or such later date as all of the conditions set forth in the Fifth Amendment have either been satisfied by the Borrower or waived in writing by
the Bank. 
 
(b) The definition for the following
defined terms contained in the Existing Credit Agreement are hereby amended and restated in their entirety as follows: 
 

 
Government Loan: Any BIDP Loan, EDF Loan, EDS Loan, Melf Loan, Redevelopment Authority Loan, any loan from the New York Job Development Authority in connection with the Dunkirk Acquisition or a deferred loan in the principal
amount of $200,000 from the Dunkirk Local Development Corporation to Dunkirk in connection with the acquisition by Dunkirk of a multiple bar shotblaster for the steel factory of Dunkirk located at 88 Howard Avenue in Dunkirk, New York. 
 
Permitted Encumbrance: Any of the
following: 
 
(i) The Encumbrances
in the Collateral granted to the Bank; 
 
(ii) Encumbrances for taxes, assessments, governmental charges or levies on any of the Borrower’s properties if such taxes, assessments, governmental charges or levies (A) are not at the time due and payable or if they can
thereafter be paid without penalty or are being contested in good faith by appropriate proceedings diligently conducted and with respect to which the Borrower has created adequate reserves, and (B) are not pursuant to any Environmental Law;

 
(iii) Pledges or deposits to
secure payment of workers’ compensation obligations, unemployment insurance, deposits or indemnities to secure public or statutory obligations or for similar purposes; provided, however, after the Bridgeville Property Acquisition
no such Encumbrance may attach to the Bridgeville Property; 
 
(iv) Encumbrances arising out of judgments or awards against the Borrower with respect to which enforcement has been stayed and such Person at the time shall currently be prosecuting an appeal or
proceeding for review in good faith by appropriate proceedings diligently conducted and with respect to which the Borrower has created adequate reserves or has adequate insurance protection; provided, however, that at no time may the
aggregate Dollar amount of such liens exceed $100,000, and after the Bridgeville Property Acquisition no such Encumbrance may attach to the Bridgeville Property; 
 
(v) Mechanics’, carriers’, workmen’s, repairmen’s and other similar
statutory liens incurred in the ordinary course of the Borrower’s business, so long as the obligation secured is not overdue or, if overdue, is being contested in good faith by appropriate actions or proceedings diligently conducted;
provided, however, after the Bridgeville Property Acquisition no such Encumbrance may attach to the Bridgeville Property; 
 
(vi) Security interests in favor of lessors of personal property, which property is the subject of a true lease between
such lessor and the Borrower; 
 
(vii) Encumbrances existing on the Closing Date and listed on Schedule 6.3; provided, however, that the Dollar amount of the obligation secured by an such Encumbrance shall not exceed the amount shown opposite
such Encumbrance on Schedule 6.3; 
 

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(viii) Security interests in favor of lenders whose loans to the Borrower are permitted pursuant to Subsections 6.1(iii); provided, however, after the Bridgeville Property Acquisition no such Encumbrance may attach to
the Bridgeville Property; and 
 
(ix) Security interest in favor of the Dunkirk Local Development Corporation to secure the repayment of the deferred loan of $200,000 by the Dunkirk Local Development Corporation to Dunkirk incurred by Dunkirk to finance the
acquisition of a multiple bar shotblaster for the steel factory of Dunkirk located at 88 Howard Avenue in Dunkirk, New York; provided, that, such lien is limited to such multiple bar shotblaster. 
 
Revolving Credit Termination Date:
April 30, 2005, as such date may be extended upon the terms and conditions set forth in Section 2.1f, or if any such day is not a Business Day, the Business Day next preceding such date. 
 
Section 1.02 Amendment to Section 2.8 of the Existing Credit Agreement. Section 2.8 of the Existing
Credit Agreement is hereby amended to add a new Subsection 2.8e which shall read as follows: 
 
2.8e Fifth Amendment Closing Fee. The Borrower shall pay to the Bank on the Fifth Amendment Effective Date an
amendment fee equal to the product determined by multiplying (x) the sum of the Term Loan outstanding on the Fifth Amendment Effective Date plus the Revolving Credit Commitment existing on the Fifth Amendment Effective Date, by (y) twenty-five (25)
basis points (.25%). 
 
Section 1.03 Amendment
to Section 6.1 of the Existing Credit Agreement. Section 6.1 of the Existing Credit Agreement is hereby amended and restated to read as follows 
 
6.1 Indebtedness. The Borrower shall not, nor shall the Borrower permit any Subsidiary of the Borrower, to
create, incur, assume, cause, permit or suffer to exist or remain outstanding, any Indebtedness, except for: 
 
(i) Indebtedness owed by the Borrower to the Bank or an affiliate of the Bank; 
 
(ii) Indebtedness in existence as of the date
hereof as set forth on Schedule 6.1, including all extensions and renewals thereof; provided, however that no such extension or renewal may involve an increase in the principal amount of such Indebtedness or any other
significant change in the terms thereof; 
 
(iii) Indebtedness due under Governmental Loans; provided, however that (A) the outstanding principal amount of all such Indebtedness shall not exceed, in the aggregate at any one time outstanding, $6,500,000, (B) all
such Indebtedness (other than Indebtedness to (x) the New York Job Development Authority incurred in connection with the Dunkirk Acquisition, or (y) the Dunkirk Local Development Corporation incurred in connection with the acquisition of a multiple
bar shotblaster for the steel factory of Dunkirk located at 88 Howard Avenue in Dunkirk, New York) must (I) be 
 

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subject to an
Intercreditor Agreement or (II) be subordinated to the repayment of the Obligations, as to security and repayment, in a manner in form and substance satisfactory to the Bank, and (C) after the Bridgeville Property Acquisition no such Indebtedness
may be secured by an Encumbrance on the Bridgeville Property; 
 
(iv) Indebtedness incurred by the Borrower, other than Indebtedness enumerated in items (i) through (iii) above, incurred after the date hereof; provided, however, that the outstanding
principal amount of such Indebtedness shall not exceed, in the aggregate at any one time, $1,500,000, and, provided further however, after the Bridgeville Property Acquisition no such Indebtedness may be secured by an Encumbrance on the Bridgeville
Property; 
 
(v) Subordinated
Indebtedness incurred by the Borrower and due to Holdings pursuant to the Holdings Credit Agreement; and 
 
(vi) Indebtedness incurred to finance a Funded Acquisition which indebtedness, if not a Government Loan, must be
subordinated to the Bank as to security and payment in a manner in form and substance reasonably satisfactory to the Bank; provided, however, after the Bridgeville Property Acquisition no such Indebtedness may be secured by an
Encumbrance on the Bridgeville Property. 
 
Section
1.04 Amendment to Subsection 6.4(iii) of the Existing Credit Agreement. Subsection 6.4(iii) of the Existing Credit Agreement is hereby amended and restated to read as follows: 
 
(iii) Leverage. (x) Prior to January 1, 2003, the Borrower’s ratio of
Consolidated Total Indebtedness to EBITDA, shall at all times not exceed 2.50:1.00, (y) on and after January 1, 2003, but prior to January 1, 2004, the Borrower’s ratio of Consolidated Total Indebtedness to EBITDA, shall at all times not exceed
3.50:1.00, and (z) on and after January 1, 2004, the Borrower’s ratio of Consolidated Total Indebtedness to EBITDA, shall at all times not exceed 2.50:1.00. 
 
Section 1.05 Amendment to Subsection 6.4(iv) of the Existing Credit Agreement. Subsection 6.4(iv) of
the Existing Credit Agreement is hereby amended and restated to read as follows: 
 
(iv) Consolidated Debt Service Ratio. (x) Prior to January 1, 2003, as at the end of each Fiscal Quarter occurring during such period, the ratio of the Borrower’s EBITDA to Consolidated
Debt Service shall not be less than 2.0:1.0, (y) on and after January 1, 2003, but prior to January 1, 2004, as at the end of each Fiscal Quarter occurring during such period, the ratio of the Borrower’s EBITDA to Consolidated Debt Service
shall not be less than 1.5:1.0, and (z) on and after January 1, 2004, as at the end of each Fiscal Quarter occurring during such period, the ratio of the Borrower’s EBITDA to Consolidated Debt Service shall not be less than 2.0:1.0.

 

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Section 1.06
No Other Amendments. The amendments to the Existing Credit Agreement set forth herein do not either implicitly or explicitly alter, waive or amend, except as expressly provided in this Amendment, the provisions of the Existing Credit
Agreement. The amendments set forth herein do not waive, now or in the future, compliance with any other covenant, term or condition to be performed or complied with nor do they impair any rights or remedies of the Bank under the Existing Credit
Agreement with respect to any such violation. Nothing in this Amendment shall be deemed or construed to be a waiver or release of, or a limitation upon, the Bank’s exercise of any of its rights and remedies under the Existing Credit Agreement
or any other document or instrument delivered in connection therewith, whether arising as a consequence of any Events of Default which may now exist or otherwise, and all such rights and remedies are hereby expressly reserved. 
 
ARTICLE II 
BORROWER’S SUPPLEMENTAL REPRESENTATIONS 
 
Section 2.01 Incorporation by Reference. As an inducement to the Bank to enter into this Amendment, (i) the Borrower hereby repeats
and remakes herein, for the benefit of the Bank, the representations and warranties made by the Borrower in Sections 4.1 through 4.23, inclusive, of the Existing Credit Agreement, as amended hereby, except that for purposes hereof such
representations and warranties shall be deemed to extend to and cover this Amendment and are remade as of the Fifth Amendment Effective Date, and (ii) the Borrower hereby represents and warrants that on and as the Fifth Amendment Effective Date that
no Default or Event of Default has occurred and is continuing. 
 
ARTICLE III 
CONDITIONS PRECEDENT 
 
Section 3.01 Conditions Precedent. Each of the following shall be a condition precedent to the
effectiveness of this Amendment: 
 
(a)     The Bank shall have received, on or before the Fifth Amendment Effective Date, the following items, each, unless otherwise indicated, dated on or before the Fifth Amendment Effective Date and in form and
substance satisfactory to the Bank: 
 
(i) A duly executed counterpart original of this Amendment; 
 
(ii) A certificate from the Secretary of the Borrower certifying that the Articles of Incorporation and Bylaws of the Borrower previously delivered to the Bank are true, complete, and correct;

 
(iii) A certificate from the
Secretary of the Borrower certifying the corporate resolutions of the Borrower authorizing the execution and delivery of this Amendment and the officers of the Borrower authorized to execute and deliver this Amendment on behalf of the Borrower;

 

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(iv) Payment to the Bank of the amendment fee set forth in Subsection 2.8e of the Agreement as amended by this Amendment; and 
 
(v) Such other instruments, documents and opinions of counsel as the Bank shall reasonably require, all of which shall be
satisfactory in form and content to the Bank 
 
(b)
The following statements shall be true and correct on the Fifth Amendment Effective Date, and the Borrower shall deliver to the Bank a certificate certifying that: 
 
(i) the representations and warranties made pursuant to this Amendment and in the other Loan
Documents, as amended hereby, are true and correct on and as of the Fifth Amendment Effective Date as though made on and as of such date; 
 
(ii) no petition by or against the Borrower or any Subsidiary of the Borrower has at any time been filed under the United
States Bankruptcy Code or under any similar act; 
 
(iii) no Event of Default or event which with the giving of notice, the passage of time or both would become an Event of Default has occurred and is continuing, or would result from the execution of or performance under this
Amendment; 
 
(iv) no material
adverse change in the properties, business, operations, financial condition or prospects of the Borrower has occurred which has not been disclosed in writing to the Bank; and 
 
(v) the Borrower has in all material respects performed all agreements, covenants and
conditions required to be performed on or prior to the date hereof under the Existing Credit Agreement and the other Loan Documents. 
 
ARTICLE IV 
GENERAL PROVISIONS 
 
Section 4.01 Ratification of Terms. Except as expressly amended by this Amendment, the Existing Credit Agreement and each and every representation, warranty, covenant, term and condition contained therein is specifically
ratified and confirmed. The Borrower hereby confirms that any collateral for the Obligations, including but not limited to liens, Encumbrances, security interests, mortgages and pledges granted by the Borrower or third parties, shall continue
unimpaired and in full force and effect. THE BORROWER EXPRESSLY RATIFIES AND CONFIRMS THE CONFESSION OF
JUDGMENT AND WAIVER OF JURY TRIAL PROVISIONS CONTAINED IN THE EXISTING
CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS. 
 

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Section 4.02
References. All notices, communications, agreements, certificates, documents or other instruments executed and delivered after the execution and delivery of this Amendment in connection with the Existing Credit Agreement, any of the other
Loan Documents or the transactions contemplated thereby may refer to the Existing Credit Agreement without making specific reference to this Amendment, but nevertheless all such references shall include this Amendment unless the context requires
otherwise. From and after the Fifth Amendment Effective Date, all references in the Existing Credit Agreement and each of the other Loan Documents to the Existing Credit Agreement shall be deemed to be references to the Existing Credit Agreement, as
amended hereby. 
 
Section 4.03 Incorporation
Into Existing Credit Agreement. This Amendment is deemed incorporated into the Existing Credit Agreement. To the extent that any term or provision of this Amendment is or may be deemed expressly inconsistent with any term or provision of the
Existing Credit Agreement, the terms and provisions hereof shall control. 
 
Section 4.04 Counterparts. This Amendment may be executed in different counterparts, each of which when executed by the Borrower and the Bank shall be regarded as an original, and all such counterparts shall
constitute one amendment. 
 
Section 4.05
Capitalized Terms. Except for proper nouns and as otherwise defined herein, capitalized terms used herein as defined terms shall have the same meanings herein as are ascribed to them in the Existing Credit Agreement, as amended hereby.

 
Section 4.06 Taxes. The Borrower shall
pay any and all stamp and other taxes and fees payable or determined to be payable in connection with the execution, delivery, filing and recording of this Amendment and such other documents and instruments as are delivered in connection herewith
and agrees to save the Bank harmless from and against any and all liabilities with respect to or resulting from any delay in paying or omission to pay such taxes and fees. 
 
Section 4.07 Costs and Expenses. The Borrower will pay all costs and expenses of the Bank (including,
without limitation, the reasonable fees and the disbursements of the Bank’s counsel, Tucker Arensberg, P.C.) in connection with the preparation, execution and delivery of this Amendment and the other documents, instruments and certificates
delivered in connection herewith. 
 
Section 4.08
GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA WITHOUT REGARD TO THE PROVISIONS THEREOF REGARDING CONFLICTS OF LAW.

 
Section 4.09 Headings. The headings of
the sections in this Amendment are for purposes of reference only and shall not be deemed to be a part hereof. 
 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK] 
 

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IN WITNESS
WHEREOF, the parties hereto, with the intent to be legally bound hereby, have caused this Fifth Amendment to Second Amended and Restated Credit Agreement to be duly executed by their respective proper and duly authorized officers as a document under
seal, as of the day and year first above written. 
 

	 ATTEST:
	 	 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.

	
	 /s/ Paul A. McGrath

	 	 By:
	 	 /s/ Richard M. Ubinger

	 	 (SEAL)

	 Name: Paul A. McGrath
	 	 Name:
	 	 Richard M. Ubinger

	 Title: Secretary
	 	 Title:
	 	 Chief Financial Officer

	
	 	 	 PNC BANK, NATIONAL ASSOCIATION

	
	 	 	 	 	 
	 	 	 	 	 By:
	 	 /s/ David B. Gookin

	 	 
	 	 	 	 	 Name:
	 	 David B. Gookin

	 	 	 	 	 Title:
	 	 Vice President

 

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