Document:

Unassociated Document

    EXHIBIT
10.1

     

    SCHNITZER
STEEL INDUSTRIES, INC.

    1993
STOCK INCENTIVE PLAN

    (as
amended as of January 28, 2009)

    

    1.  Purpose.  The
purpose of this 1993 Stock Incentive Plan (the “Plan”) is to enable Schnitzer
Steel Industries, Inc. (the “Company”) to attract and retain the services of
(1) selected employees, officers and directors of the Company or of any
subsidiary of the Company and (2) selected nonemployee consultants and
advisors to the Company.

     

    2.  Shares Subject to the
Plan.  Subject to adjustment as provided below and in
paragraph 13, the shares to be offered under the Plan shall consist of
Class A Common Stock of the Company, and the total number of shares of
Class A Common Stock that may be issued under the Plan shall not exceed
12,200,000 shares.  The shares issued under the Plan may be authorized
and unissued shares or reacquired shares.  If an option, stock
appreciation right or performance-based award granted under the Plan expires,
terminates or is cancelled, the unissued shares subject to such option, stock
appreciation right or performance-based award shall again be available under the
Plan.  If shares sold or awarded as a bonus under the Plan are
forfeited to the Company or repurchased by the Company, the number of shares
forfeited or repurchased shall again be available under the Plan.

     

    3.  Effective Date and Duration
of Plan.

     

    (a) Effective
Date.  The Plan shall become effective when adopted by the
Board of Directors; provided, however, that prior to shareholder approval of the
Plan, any awards shall be subject to and conditioned on approval of the Plan by
a majority of the votes cast at a shareholders meeting at which a quorum is
present.  Options, stock appreciation rights and performance-based
awards may be granted and shares may be awarded as bonuses or sold under the
Plan at any time after the effective date and before termination of the
Plan.

     

    (b) Duration.  The
Plan shall continue in effect until all shares available for issuance under the
Plan have been issued and all restrictions on such shares have
lapsed.  The Board of Directors may suspend or terminate the Plan at
any time except with respect to options, performance-based awards and shares
subject to restrictions then outstanding under the Plan.  Termination
shall not affect any outstanding options, any outstanding performance-based
awards, any right
of the Company to repurchase shares or the forfeitability of shares issued under
the Plan.

     

    4.  Administration.  The
Plan shall be administered by a committee of the Board of Directors of the
Company (the “Committee”), which shall determine and designate from time to time
the individuals to whom awards shall be made, the amount of the awards, and the
other terms and conditions of the awards.  Subject to the provisions
of the Plan, the Committee may from time to time adopt and amend rules and
regulations relating to administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares (except those restrictions imposed by law) and make all
other determinations in the judgment of the Committee necessary or desirable for
the administration of the Plan.  The interpretation and construction
of the provisions of the Plan and related agreements by the Committee shall be
final and conclusive.  The Committee may correct any defect or supply
any omission or reconcile any inconsistency in the Plan or in any related
agreement in the manner and to the extent it shall deem expedient to carry the
Plan into effect, and it shall be the sole and final judge of such
expediency.

     

    5.  Types of Awards;
Eligibility.  The Committee may, from time to time, take the
following actions, separately or in combination, under the
Plan:  (i) grant Incentive Stock Options, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”),
as provided in paragraphs 6(a) and 6(b); (ii) grant options other than
Incentive Stock Options (“Non-Statutory Stock Options”) as provided in
paragraphs 6(a) and 6(c); (iii) award stock bonuses as provided in
paragraph 7; (iv) sell shares subject to restrictions as provided in
paragraph 8; (v) grant stock appreciation rights as provided in
paragraph 9; (vi) grant cash bonus rights as provided in
paragraph 10; (vii) grant performance-based awards as provided in
paragraph 11 and (viii) grant foreign qualified awards as provided in
paragraph 12.  Any such awards may be made to employees,
including employees who are officers or directors, and to other individuals
described in paragraph 1 who the Committee believes have made or will make
an important contribution to the Company or its subsidiaries; provided, however,
that only employees of the Company shall be eligible to receive Incentive Stock
Options under the Plan.  The Committee shall select the individuals to
whom awards shall be made and shall specify the action taken with respect to
each individual to 

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    whom an
award is made.  At the discretion of the Committee, an individual may
be given an election to surrender an award in exchange for the grant of a new
award.  No employee may be granted options or stock appreciation
rights under the Plan for more than 150,000 shares of Class A Common Stock
in any calendar year.

     

    6.  Option
Grants.

     

    (a) General Rules Relating to
Options.

     

    (i) Terms of
Grant.  The Committee may grant options under the
Plan.  With respect to each option grant, the Committee shall
determine the number of shares subject to the option, the option price, the
period of the option, the time or times at which the option may be exercised and
whether the option is an Incentive Stock Option or a Non-Statutory Stock
Option.  At the time of the grant of an option or at any time
thereafter, the Committee may provide that an optionee who exercised an option
with Class A Common Stock of the Company shall automatically receive a new
option to purchase additional shares equal to the number of shares surrendered
and may specify the terms and conditions of such new options.

     

    (ii) Exercise of
Options.  Except as provided in paragraph 6(a)(iv) or as
determined by the Committee, no option granted under the Plan may be exercised
unless at the time of such exercise the optionee is employed by or in the
service of the Company or any subsidiary of the Company and shall have been so
employed or provided such service continuously since the date such option was
granted.  Absence on leave or on account of illness or disability
under rules established by the Committee shall not, however, be deemed an
interruption of employment or service for this purpose.  Unless
otherwise determined by the Committee, vesting of options shall not continue
during an absence on leave (including an extended illness) or on account of
disability.  Except as provided in paragraphs 6(a)(iv) and 13,
options granted under the Plan may be exercised from time to time over the
period stated in each option in such amounts and at such times as shall be
prescribed by the Committee, provided that options shall not be exercised for
fractional shares.  Unless otherwise determined by the Committee, if
the optionee does not exercise an option in any one year with respect to the
full number of shares to which the optionee is entitled in that year, the
optionee’s rights shall be cumulative and the optionee may purchase those shares
in any subsequent year during the term of the option.

     

    (iii) Nontransferability.  Except
as provided below, each stock option granted under the Plan by its terms shall
be nonassignable and nontransferable by the optionee, either voluntarily or by
operation of law, and each option by its terms shall be exercisable during the
optionee’s lifetime only by the optionee.  A stock option may be
transferred by will or by the laws of descent and distribution of the state or
country of the optionee’s domicile at the time of death.  A
Non-Statutory Stock Option shall also be transferable pursuant to a qualified
domestic relations order as defined under the Code or Title I of the Employee
Retirement Income Security Act.  The Committee may, in its discretion,
authorize all or a portion of a Non-Statutory Stock Option to be on terms which
permit transfer by the optionee to (A) the spouse, children or
grandchildren of the optionee, including stepchildren and adopted children
(“Immediate Family Members”), (B) a trust or trusts for the exclusive
benefit of Immediate Family Members, or (C) a partnership or limited
liability company in which Immediate Family Members are the only partners or
members, provided that (X) there may be no consideration for any transfer,
(Y) the stock option agreement pursuant to which the options are granted or
an amendment thereto must expressly provide for transferability in a manner
consistent with this paragraph, and (Z) subsequent transfers of transferred
options shall be prohibited except by will or by the laws of descent and
distribution.  Following any transfer, options shall continue to be
subject to the same terms and conditions as were applicable immediately prior to
transfer, provided that for purposes of paragraphs 6(a)(v) and 13 the term
“optionee” shall be deemed to refer to the transferee.  The continued
employment requirement of paragraph 6(a)(ii) and the events of termination
of employment of paragraph 6(a)(iv) shall continue to be applied with
respect to the original optionee, and following the termination of employment of
the original optionee the options shall be exercisable by the transferee only to
the extent, and for the periods specified, and all other references to
employment, termination of employment, life or death of the optionee, shall
continue to be applied with respect to the original optionee.

     

    (iv) Termination of Employment or
Service.

     

    (A) General
Rule.  Unless otherwise determined by the Committee, in the
event the employment or service of the optionee with the Company or a subsidiary
terminates for any reason other than because of physical

     

    
      
         

      

      
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    disability,
death or retirement as provided in subparagraphs 6(a)(iv)(B), (C) and (D),
the option may be exercised at any time prior to the expiration date of the
option or the expiration of 30 days after the date of such termination,
whichever is the shorter period, but only if and to the extent the optionee was
entitled to exercise the option at the date of such termination.

     

    (B) Termination Because of Total
Disability.  Unless otherwise determined by the Committee, in
the event of the termination of employment or service because of total
disability, the option may be exercised at any time prior to the expiration date
of the option or the expiration of 12 months after the date of such
termination, whichever is the shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the date of such
termination.  The term “total disability” means a mental or physical
impairment which is expected to result in death or which has lasted or is
expected to last for a continuous period of 12 months or more and which
causes the optionee to be unable, in the opinion of the Company and two
independent physicians, to perform his or her duties as an employee, director,
officer or consultant of the Company and to be engaged in any substantial
gainful activity.  Total disability shall be deemed to have occurred
on the first day after the Company and the two independent physicians have
furnished their opinion of total disability to the Company.

     

    (C) Termination Because of
Death.  Unless otherwise determined by the Committee, in the
event of the death of an optionee while employed by or providing service to the
Company or a subsidiary, the option may be exercised at any time prior to the
expiration date of the option or the expiration of 12 months after the date
of such death, whichever is the shorter period, but only if and to the extent
the optionee was entitled to exercise the option at the date of such termination
and only by the person or persons to whom such optionee’s rights under the
option shall pass by the optionee’s will or by the laws of descent and
distribution of the state or country of domicile at the time of
death.

     

    (D) Termination Because of
Retirement.  Unless otherwise determined by the Committee, in
the event of the termination of employment or service because of (1) normal
retirement after reaching age 65, (2) early retirement after reaching age
55 and completing 10 years of service, or (3) early retirement after
completing 30 years of service without regard to age, the option may be
exercised at any time prior to the expiration date of the option or the
expiration of 12 months after the date of such termination, whichever is
the shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.

     

    (E) Amendment of Exercise Period
Applicable to Termination.  The Committee, at the time of grant
or at any time thereafter, may extend the 30-day and 12-month exercise periods
any length of time not later than the original expiration date of the option,
and may increase the portion of an option that is exercisable, subject to such
terms and conditions as the Committee may determine.

     

    (F) Failure to Exercise
Option.  To the extent that the option of any deceased optionee
or of any optionee whose employment or service terminates is not exercised
within the applicable period, all further rights to purchase shares pursuant to
such option shall cease and terminate.

     

    (v) Purchase of
Shares.  Unless the Committee determines otherwise, shares may
be acquired pursuant to an option granted under the Plan only upon receipt by
the Company of notice in writing from the optionee of the optionee’s intention
to exercise, specifying the number of shares as to which the optionee desires to
exercise the option and the date on which the optionee desires to complete the
transaction, and if required in order to comply with the Securities Act of 1933,
as amended, containing a representation that it is the optionee’s present
intention to acquire the shares for investment and not with a view to
distribution.  Unless the Committee determines otherwise, on or before
the date specified for completion of the purchase of shares pursuant to an
option, the optionee must have paid the Company the full purchase price of such
shares in cash (including, with the consent of the Committee, cash that may be
the proceeds of a loan from the Company) or, with the consent of the Committee,
in whole or in part, in Class A Common Stock of the Company valued at fair
market value, restricted stock, performance-based awards or other contingent
awards denominated in either stock or cash, deferred compensation credits,
promissory notes and other forms of consideration.  The fair market
value of Class A Common Stock provided in payment of the purchase price
shall be the closing price of the Class A Common Stock as reported in The Wall Street
Journal on the trading day preceding the date the option is exercised, or
such other reported value of the Class A Common Stock as shall be specified
by the Committee.  No shares shall be issued until full payment
therefor has been made.  With the consent of the Committee, an
optionee may request the Company to apply automatically the shares to
be

     

    
      
         

      

      
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    received
upon the exercise of a portion of a stock option (even though stock certificates
have not yet been issued) to satisfy the purchase price for additional portions
of the option.  Each optionee who has exercised an option shall
immediately upon notification of the amount due, if any, pay to the Company in
cash amounts necessary to satisfy any applicable federal, state and local tax
withholding requirements.  If additional withholding is or becomes
required beyond any amount deposited before delivery of the certificates, the
optionee shall pay such amount to the Company on demand.  If the
optionee fails to pay the amount demanded, the Company may withhold that amount
from other amounts payable by the Company to the optionee, including salary,
subject to applicable law.  With the consent of the Committee an
optionee may satisfy this obligation, in whole or in part, by having the Company
withhold from the shares to be issued upon the exercise that number of shares
that would satisfy the withholding amount due or by delivering to the Company
Class A Common Stock to satisfy the withholding amount.  Upon the
exercise of an option, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued upon exercise of the
option.

     

    (b) Incentive Stock
Options.  Incentive Stock Options shall be subject to the
following additional terms and conditions:

     

    (i) Limitation on Amount of
Grants.  No employee may be granted Incentive Stock Options
under the Plan if the aggregate fair market value, on the date of grant, of the
Class A Common Stock with respect to which Incentive Stock Options are
exercisable for the first time by that employee during any calendar year under
the Plan and under any other incentive stock option plan (within the meaning of
Section 422 of the Code) of the Company or any parent or subsidiary of the
Company exceeds $100,000.

     

    (ii) Limitations on Grants to
10 Percent Shareholders.  An Incentive Stock Option may be
granted under the Plan to an employee possessing more than 10 percent of
the total combined voting power of all classes of stock of the Company or of any
parent or subsidiary of the Company only if the option price is at least
110 percent of the fair market value of the Class A Common Stock
subject to the option on the date it is granted, as described in
paragraph 6(b)(iv), and the option by its terms is not exercisable after
the expiration of five years from the date it is granted.

     

    (iii) Duration of
Options.  Subject to paragraphs 6(a)(ii) and 6(b)(ii),
Incentive Stock Options granted under the Plan shall continue in effect for the
period fixed by the Committee, except that no Incentive Stock Option shall be
exercisable after the expiration of 10 years from the date it is
granted.

     

    (iv) Option
Price.  The option price per share shall be determined by the
Committee at the time of grant.  Except as provided in
paragraph 6(b)(ii), the option price shall not be less than
100 percent of the fair market value of the Class A Common Stock
covered by the Incentive Stock Option at the date the option is
granted.  The fair market value shall be deemed to be the closing
price of the Class A Common Stock as reported in The Wall Street
Journal on the day preceding the date the option is granted, or if there
has been no sale on that date, on the last preceding date on which a sale
occurred, or such other value of the Class A Common Stock as shall be
specified by the Committee.

     

    (v) Limitation on Time of
Grant.  No Incentive Stock Option shall be granted on or after
the tenth anniversary of the last action by the Board of Directors approving an
increase in the number of shares available for issuance under the Plan, which
action was subsequently approved within 12 months by the
shareholders.

     

    (vi) Conversion of Incentive
Stock Options.  The Committee may at any time without the
consent of the optionee convert an Incentive Stock Option to a Non-Statutory
Stock Option.

     

    (c) Non-Statutory Stock
Options.  Non-Statutory Stock Options shall be subject to the
following additional terms and conditions:

     

    (i) Option
Price.  The option price for Non-Statutory Stock Options shall
be determined by the Committee at the time of grant and may be any amount
determined by the Committee.

     

    
      
         

      

      
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    (ii) Duration of
Options.  Non-Statutory Stock Options granted under the Plan
shall continue in effect for the period fixed by the Committee.

     

    7.  Stock
Bonuses.  The Committee may award shares under the Plan as
stock bonuses.  Shares awarded as a bonus shall be subject to the
terms, conditions, and restrictions determined by the Committee.  The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with such other restrictions as may be
determined by the Committee.  The Committee may require the recipient
to sign an agreement as a condition of the award, but may not require the
recipient to pay any monetary consideration other than amounts necessary to
satisfy tax withholding requirements.  The agreement may contain any
terms, conditions, restrictions, representations and warranties required by the
Committee.  The certificates representing the shares awarded shall
bear any legends required by the Committee.  The Company may require
any recipient of a stock bonus to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements.  If the recipient fails to pay the amount demanded, the
Company may withhold that amount from other amounts payable by the Company to
the recipient, including salary or fees for services, subject to applicable
law.  With the consent of the Committee, a recipient may deliver Class
A Common Stock to the Company to satisfy this withholding
obligation.  Upon the issuance of a stock bonus, the number of shares
reserved for issuance under the Plan shall be reduced by the number of shares
issued.

     

    8.  Restricted
Stock.  The Committee may issue shares under the Plan for such
consideration (including promissory notes and services) as determined by the
Committee.  Shares issued under the Plan shall be subject to the
terms, conditions and restrictions determined by the Committee.  The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with such other
restrictions as may be determined by the Committee.  All Class A
Common Stock issued pursuant to this paragraph 8 shall be subject to a
purchase agreement, which shall be executed by the Company and the prospective
recipient of the shares prior to the delivery of certificates representing such
shares to the recipient.  The purchase agreement may contain any
terms, conditions, restrictions, representations and warranties required by the
Committee.  The certificates representing the shares shall bear any
legends required by the Committee.  The Company may require any
purchaser of restricted stock to pay to the Company in cash upon demand amounts
necessary to satisfy any applicable federal, state or local tax withholding
requirements.  If the purchaser fails to pay the amount demanded, the
Company may withhold that amount from other amounts payable by the Company to
the purchaser, including salary, subject to applicable law.  With the
consent of the Committee, a purchaser may deliver Class A Common Stock to
the Company to satisfy this withholding obligation.  Upon the issuance
of restricted stock, the number of shares reserved for issuance under the Plan
shall be reduced by the number of shares issued.

     

    9.  Stock Appreciation
Rights.

     

    (a) Grant.  Stock
appreciation rights may be granted under the Plan by the Committee, subject to
such rules, terms, and conditions as the Committee prescribes.

     

    (b) Exercise.

     

    (i) Each
stock appreciation right shall entitle the holder, upon exercise, to receive
from the Company in exchange therefor an amount equal in value to the excess of
the fair market value on the date of exercise of one share of Class A
Common Stock of the Company over its fair market value on the date of grant
(or, in the case of a stock appreciation right granted in connection with an
option, the excess of the fair market value of one share of Class A Common
Stock of the Company over the option price per share under the option to which
the stock appreciation right relates), multiplied by the number of shares
covered by the stock appreciation right or the option, or portion thereof, that
is surrendered.  Payment by the Company upon exercise of a stock
appreciation right may be made in Class A Common Stock valued at fair
market value, in cash, or partly in Class A Common Stock and partly in
cash, all as determined by the Committee.

     

    (ii) A stock
appreciation right shall be exercisable only at the time or times established by
the Committee.  If a stock appreciation right is granted in connection
with an option, the following rules shall apply:  (1) the stock
appreciation right shall be exercisable only to the extent and on the same
conditions that the related option could be exercised; (2) upon exercise of
the stock appreciation right, the option or portion thereof to which

     

     

    
      
         

      

      
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    the stock
appreciation right relates terminates; and (3) upon exercise of the option,
the related stock appreciation right or portion thereof terminates.

     

    (iii) The
Committee may withdraw any stock appreciation right granted under the Plan at
any time and may impose any conditions upon the exercise of a stock appreciation
right or adopt rules and regulations from time to time affecting the rights of
holders of stock appreciation rights.  Such rules and regulations may
govern the right to exercise stock appreciation rights granted prior to adoption
or amendment of such rules and regulations as well as stock appreciation rights
granted thereafter.

     

    (iv) For
purposes of this paragraph 9, the fair market value of the Class A
Common Stock shall be the closing price of the Class A Common Stock as
reported in The Wall
Street Journal, or such other reported value of the Class A Common
Stock as shall be specified by the Committee, on the trading day preceding the
date the stock appreciation right is exercised.

     

    (v) No
fractional shares shall be issued upon exercise of a stock appreciation
right.  In lieu thereof, cash may be paid in an amount equal to the
value of the fraction or, if the Committee shall determine, the number of shares
may be rounded downward to the next whole share.

     

    (vi) Each
stock appreciation right granted in connection with an Incentive Stock Option
and, unless otherwise determined by the Board of Directors, each other stock
appreciation right granted under the Plan by its terms shall be nonassignable
and nontransferable by the holder, either voluntarily or by operation of law,
except by will or by the laws of descent and distribution of the state or
country of the holder’s domicile at the time of death, and each stock
appreciation right by its terms shall be exercisable during the holder’s
lifetime only by the holder; provided, however, that a stock appreciation right
not granted in connection with an Incentive Stock Option shall also be
transferable pursuant to a qualified domestic relations order as defined under
the Code or Title I of the Employee Retirement Income Security Act.

     

    (vii) Each
participant who has exercised a stock appreciation right shall, upon
notification of the amount due, pay to the Company in cash amounts necessary to
satisfy any applicable federal, state and local tax withholding
requirements.  If the participant fails to pay the amount demanded,
the Company may withhold that amount from other amounts payable by the Company
to the participant including salary, subject to applicable law.  With
the consent of the Committee a participant may satisfy this obligation, in whole
or in part, by having the Company withhold from any shares to be issued upon the
exercise that number of shares that would satisfy the withholding amount due or
by delivering Class A Common Stock to the Company to satisfy the
withholding amount.

     

    (viii) Upon the
exercise of a stock appreciation right for shares, the number of shares reserved
for issuance under the Plan shall be reduced by the number of shares
issued.  Cash payments of stock appreciation rights shall not reduce
the number of shares of Class A Common Stock reserved for issuance under
the Plan.

     

    10. 
 Cash Bonus
Rights.

     

    (a) Grant.  The
Committee may grant cash bonus rights under the Plan in connection with
(i) options granted or previously granted, (ii) stock appreciation
rights granted or previously granted, (iii) stock bonuses awarded or
previously awarded and (iv) shares sold or previously sold under the
Plan.  Cash bonus rights will be subject to rules, terms and
conditions as the Committee may prescribe.  Unless otherwise
determined by the Committee, each cash bonus right granted under the Plan by its
terms shall be nonassignable and nontransferable by the holder, either
voluntarily or by operation of law, except by will or by the laws of descent and
distribution of the state or country of the holder’s domicile at the time of
death or pursuant to a qualified domestic relations order as defined under the
Code or Title I of the Employee Retirement Income Security
Act.  The payment of a cash bonus shall not reduce the number of
shares of Class A Common Stock reserved for issuance under the
Plan.

     

    (b) Cash Bonus Rights in
Connection With Options.  A cash bonus right granted in
connection with an option will entitle an optionee to a cash bonus when the
related option is exercised (or terminates in connection with the exercise of a
stock appreciation right related to the option) in whole or in
part.  If an optionee purchases shares 

     

     

    
      
         

      

      
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    upon
exercise of an option and does not exercise a related stock appreciation right,
the amount of the bonus shall be determined by multiplying the excess of the
total fair market value of the shares to be acquired upon the exercise over the
total option price for the shares by the applicable bonus
percentage.  If the optionee exercises a related stock appreciation
right in connection with the termination of an option, the amount of the bonus
shall be determined by multiplying the total fair market value of the shares and
cash received pursuant to the exercise of the stock appreciation right by the
applicable bonus percentage.  The bonus percentage applicable to a
bonus right shall be determined from time to time by the Committee but shall in
no event exceed 75 percent.

     

    (c) Cash Bonus Rights in
Connection With Stock Bonus.  A cash bonus right granted in
connection with a stock bonus will entitle the recipient to a cash bonus payable
when the stock bonus is awarded or restrictions, if any, to which the stock is
subject lapse.  If bonus stock awarded is subject to restrictions and
is repurchased by the Company or forfeited by the holder, the cash bonus right
granted in connection with the stock bonus shall terminate and may not be
exercised.  The amount and timing of payment of a cash bonus shall be
determined by the Committee.

     

    (d) Cash Bonus Rights in
Connection With Stock Purchases.  A cash bonus right granted in
connection with the purchase of stock pursuant to paragraph 8 will entitle
the recipient to a cash bonus when the shares are purchased or restrictions, if
any, to which the stock is subject lapse.  Any cash bonus right
granted in connection with shares purchased pursuant to paragraph 8 shall
terminate and may not be exercised in the event the shares are repurchased by
the Company or forfeited by the holder pursuant to applicable
restrictions.  The amount and timing of payment of a cash bonus shall
be determined by the Committee.

     

    (e) Taxes.  The
Company shall withhold from any cash bonus paid pursuant to paragraph 10
the amount necessary to satisfy any applicable federal, state and local
withholding requirements.

     

    11. 
 Performance-Based
Awards.  The Committee may grant awards intended to qualify as
qualified performance-based compensation under Section 162(m) of the Code and
the regulations thereunder.  Performance-based awards shall be
denominated at the time of grant either in Class A Common Stock (“Stock
Performance Awards”) or in dollar amounts (“Dollar Performance
Awards”).  Payment under a Stock Performance Award or a Dollar
Performance Award shall be made, at the discretion of the Committee, in Class A
Common Stock (“Performance Shares”), or in cash or in any combination
thereof.  Performance-based awards shall be subject to the following
terms and conditions:

     

    (a) Award
Period.  The Committee shall determine the period of time for
which a Performance-based award is made (the “Award Period”).

     

    (b) Performance Goals and
Payment.  The Committee shall establish in writing objectives
(“Performance Goals”) that must be met by the Company or any subsidiary,
division or other unit of the Company (“Business Unit”) during the Award Period
as a condition to payment being made under the performance-based
award.  The Performance Goals for each award shall be one or more
targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business
Unit:  economic value added (adjusted operating income less a capital
charge), number of retail locations with positive economic value added, man
hours per ton, net income, earnings per share, stock price increase, total
shareholder return (stock price increase plus dividends), return on equity,
return on assets, return on capital, revenues, sales volume, production volume,
gross margin, gross margin per ton (or other unit of weight or volume),
operating income, operating income per ton (or other unit of weight or volume),
income before income taxes, earnings before interest, taxes, depreciation and
amortization (EBITDA), inventories, inventory turns, cash flows or any of the
foregoing before the effect of acquisitions, divestitures, accounting changes,
and restructuring and special charges (determined according to criteria
established by the Committee).  The Committee shall also establish the
number of Performance Shares or the amount of cash payment to be made under a
performance-based award if the Performance Goals are met or exceeded, including
the fixing of a maximum payment (subject to paragraph 11(d)).  The
Committee may establish other restrictions to payment under a performance-based
award, such as a continued employment requirement, in addition to satisfaction
of the Performance Goals.  Some or all of the Performance Shares may
be issued at the time of the award as restricted shares subject to forfeiture in
whole or in part if Performance Goals or, if applicable, other restrictions are
not satisfied.

     

    
      
         

      

      
        7

        
          

        

      

      
         

      

    

    (c) Computation of
Payment.  During or after an Award Period, the performance of
the Company or Business Unit, as applicable, during the period shall be measured
against the Performance Goals.  If the Performance Goals are not met,
no payment shall be made under a performance-based award.  If the
Performance Goals are met or exceeded, the Committee shall certify that fact in
writing and certify the number of Performance Shares earned or the amount of
cash payment to be made under the terms of the performance-based
award.

     

    (d) Maximum
Awards.  No participant may be granted in any fiscal year Stock
Performance Awards under which the maximum aggregate amount payable under the
Awards exceeds the equivalent of 100,000 shares of Common Stock or Dollar
Performance Awards under which the maximum aggregate amount payable under the
Awards exceeds $2,000,000.

     

    (e) Tax
Withholding.  Each participant who has received Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements.  If the participant fails to pay the
amount demanded, the Company may withhold that amount from other amounts payable
by the Company to the participant, including salary, subject to applicable
law.  With the consent of the Committee, a participant may satisfy
this obligation, in whole or in part, by instructing the Company to withhold
from any shares to be issued or by delivering to the Company other shares of
Class A Common Stock; provided, however, that the number of shares so delivered
or withheld shall not exceed the minimum amount necessary to satisfy the
required withholding obligation.

     

    (f) Effect on Shares
Available.  The payment of a performance-based award in cash
shall not reduce the number of shares of Class A Common Stock reserved for
issuance under the Plan.  The number of shares reserved for issuance
under the Plan shall be reduced by the number of shares issued upon payment of
an award.

     

    12. 
 Foreign Qualified
Grants.  Awards under the Plan may be granted to such officers
and employees of the Company and its subsidiaries and such other persons
described in paragraph 1 residing in foreign jurisdictions as the Committee
may determine from time to time.  The Committee may adopt such
supplements to the Plan as may be necessary to comply with the applicable laws
of such foreign jurisdictions and to afford participants favorable treatment
under such laws; provided, however, that no award shall be granted under any
such supplement with terms which are more beneficial to the participants than
the terms permitted by the Plan.

     

    13. 
 Changes in Capital
Structure.  If the outstanding Class A Common Stock of the
Company is hereafter increased or decreased or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation by reason of any reorganization, merger, consolidation, plan
of exchange, recapitalization, reclassification, stock split-up, combination of
shares or dividend payable in shares, appropriate adjustment shall be made by
the Committee in the number and kind of shares available for awards under the
Plan.  In addition, the Committee shall make appropriate adjustment in
the number and kind of shares as to which outstanding options and stock
appreciation rights, or portions thereof then unexercised, shall be exercisable,
so that the optionee’s proportionate interest before and after the occurrence of
the event is maintained.  Notwithstanding the foregoing, the Committee
shall have no obligation to effect any adjustment that would or might result in
the issuance of fractional shares, and any fractional shares resulting from any
adjustment may be disregarded or provided for in any manner determined by the
Committee.  Any such adjustments made by the Committee shall be
conclusive.  In the event of dissolution of the Company or a merger,
consolidation or plan of exchange affecting the Company, in lieu of providing
for options and stock appreciation rights as provided above in this
paragraph 13 or in lieu of having the options and stock appreciation rights
continue unchanged, the Committee may, in its sole discretion, provide a 30-day
period prior to such event during which optionees shall have the right to
exercise options and stock appreciation rights in whole or in part without any
limitation on exercisability and upon the expiration of which 30-day period all
unexercised options and stock appreciation rights shall immediately
terminate.

     

    14. 
 Corporate Mergers,
Acquisitions, etc.  The Committee may also grant options, stock
appreciation rights, performance-based awards, stock bonuses and cash bonuses
and issue restricted stock under the Plan having terms, conditions and
provisions that vary from those specified in this Plan provided that any such
awards are granted in substitution for, or in connection with the assumption of,
existing options, stock appreciation rights, stock bonuses, cash bonuses,
restricted stock and performance-based awards granted, awarded or issued by
another corporation and assumed or otherwise agreed to be provided for by the
Company pursuant to or by reason of a transaction involving 

     

    
      
         

      

      
        8

        
          

        

      

      
         

      

    

    a
corporate merger, consolidation, acquisition of property or stock, separation,
reorganization or liquidation to which the Company or a subsidiary is a
party.

     

    15. 
 Amendment of
Plan.  The Board of Directors may at any time, and from time to
time, modify or amend the Plan in such respects as it shall deem advisable
because of changes in the law while the Plan is in effect or for any other
reason.  Except as provided in paragraphs 6(a)(iv), 9 and 13,
however, no change in an award already granted shall be made without the written
consent of the holder of such award.

     

    16. 
 Approvals.  The
obligations of the Company under the Plan are subject to the approval of state
and federal authorities or agencies with jurisdiction in the
matter.  The Company will use its best efforts to take steps required
by state or federal law or applicable regulations, including rules and
regulations of the Securities and Exchange Commission and any stock exchange on
which the Company’s shares may then be listed, in connection with the grants
under the Plan.  The foregoing notwithstanding, the Company shall not
be obligated to issue or deliver Class A Common Stock under the Plan if
such issuance or delivery would violate applicable state or federal securities
laws.

     

    17. 
 Employment and Service
Rights.  Nothing in the Plan or any award pursuant to the Plan
shall (i) confer upon any employee any right to be continued in the
employment of the Company or any subsidiary or interfere in any way with the
right of the Company or any subsidiary by whom such employee is employed to
terminate such employee’s employment at any time, for any reason, with or
without cause, or to decrease such employee’s compensation or benefits, or
(ii) confer upon any person engaged by the Company any right to be retained
or employed by the Company or to the continuation, extension, renewal, or
modification of any compensation, contract, or arrangement with or by the
Company.

     

    18. 
 Rights as a
Shareholder.  The recipient of any award under the Plan shall
have no rights as a shareholder with respect to any Class A Common Stock
until the date of issue to the recipient of a stock certificate 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
occurs prior to the date such stock certificate is issued.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        9ex10_1.htm

    EXHIBIT 10.1    2009 NON-QUALIFIED
ATTORNEYS & ACCOUNTANTS STOCK COMPENSATION PLAN

     

     

    2009 NON-QUALIFIED ATTORNEYS &
ACCOUNTANTS

    STOCK
COMPENSATION PLAN

     

    1.        
Purpose of Plan

     

    This 2009 NON-QUALIFIED ATTORNEYS & ACCOUNTANTS STOCK
COMPENSATION PLAN (the “Plan”) of GAMMA PHARMACEUTICALS INC., a Delaware corporation (the “Company”) for
attorneys and accountants associated with the Company, is intended to advance
the best interests of the Company by providing those persons who have a
substantial responsibility for its public SEC disclosure filings under the
Exchange Act, with additional incentive and by increasing their proprietary
interest in the success of the Company, thereby encouraging them to maintain
their relationships with the Company.

     

    2.        
Definitions

     

    For
Plan purposes, except where the context might clearly indicate otherwise, the
following terms shall have the meanings set forth below:

     

    “Board” shall mean the Board of Directors of the
Company.

     

    “Committee” shall mean the Compensation
Committee, or such other committee appointed by the Board, which shall be
designated by the Board to administer the Plan, or the Board if no committees
have been established.  The
Committee shall be composed of one or more persons as from time to time are
appointed to serve by the Board. 
Each member of the Committee, while serving as such, shall be a
disinterested person with the meaning of Rule 16b-3 promulgated under the
Securities Exchange Act of 1934.

     

    “Common Shares” shall mean the Company’s Common
Shares, $0.001 par value per share, or, in the event that the outstanding Common
Shares are hereafter changed into or exchanged for different shares of
securities of the Company, such other shares or securities.

     

    “Common Stock” shall mean shares of common stock
which are issued by the Company pursuant to Section 5, below.

     

    “Common Stock Agreement” means an
agreement executed by a Common Stockholder and the Company, or alternatively a
board resolution setting forth the terms of issuance, as contemplated by Section
5, below, which imposes on the shares of Common Stock held by the Common
Stockholder such restrictions as the Board or Committee deem appropriate.

     

     

    
      

    

    
       

      “Common Stockholder” means any attorney or accountant for
the Company or other person to whom shares of Common Stock are issued pursuant
to this Plan.

       

      “Company”
shall mean GAMMA PHARMACEUTICALS INC., a Delaware corporation, and any subsidiary
corporation of GAMMA PHARMACEUTICALS INC.

       

      “Fair Market Value” shall mean, with respect to
the date a given stock compensation is granted, the average of the highest and
lowest reported sales prices of the Common Shares, as reported by such
responsible reporting service as the Committee may select, or if there were not
transactions in the Common Shares on such day, then the last preceding day on
which transactions took place.  The
above withstanding, the Committee may determine the Fair Market Value in such
other manner as it may deem more equitable for Plan purposes or as is required
by applicable laws or regulations. The Fair Market Value for purposes of the
issuance of common stock under this plan has been established to be $0.08 per
share pursuant to a five day average between January 23, 2009 and through
January 29, 2009.

       

      3.        
Administration of the Plan

       

      3.1       The
Committee shall administer the Plan and accordingly, it shall have full power to
grant Common Stock, construe and interpret the Plan, establish rules and
regulations and perform all other acts, including the delegation of
administrative responsibilities, it believes reasonable and proper.

       

      3.2       The
determination of those eligible to receive Common Stock, and the amount, type
and timing of each issuance and the terms and conditions of the Common Stock
Agreements shall rest in the sole discretion of the Committee, subject to the
provisions of the Plan.

       

      3.3       The Board,
or the Committee, may correct any defect, supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent it shall deem
necessary to carry it into effect.

       

      3.4       Any
decision made, or action taken, by the Committee or the Board arising out of or
in connection with the interpretation and administration of the Plan shall be
final and conclusive.

       

      3.5       Meetings of
the Committee shall be held at such times and places as shall be determined by
the Committee.  A majority of the
members of the Committee shall constitute a quorum for the transaction of
business, and the vote of a majority of those members present at any meeting
shall decide any question brought before that meeting.  In addition, the Committee may take any
action otherwise proper under the Plan by the affirmative vote, taken without a
meeting, of a majority of its members.

       

      3.6       No member
of the Committee shall be liable for any act or omission of any other member of
the Committee or for any act or omission on his own part, including, but
not limited to, the exercise of any
power or discretion given to him under the Plan, except those resulting from his
own gross negligence or willful misconduct.

       

       

      
        

      

    

    
       

      4.        
Shares Subject to the Plan

       

      The
total number of shares of the Company available for issuance of Common Stock
under the Plan shall be 737,188 Common Shares, subject to adjustment in
accordance with Article 7 of the Plan, which shares may be either authorized but
unissued or reacquired Common Shares of the Company.

       

      5.        
Award Of Common
Stock

       

      5.1       The Board
or Committee from time to time, in its absolute discretion, may (a) award Common
Stock to attorneys and/or accountants for the Company, and such other persons as
the Board or Committee may select. 

       

      5.2       Common
Stock shall be issued only pursuant to a Common Stock, Board Resolution, or
Consulting Agreement, which shall be executed by the Common Stockholder, unless
by Board Resolution, and the Company and which shall contain such terms and
conditions as the Board or Committee shall determine consistent with this Plan,
including such restrictions on transfer as are imposed by the Common Stock or
Consulting Agreement.

       

      5.3       Upon
delivery of the shares of Common Stock to the Common Stockholder, below, the
Common Stockholder shall have, unless otherwise provided by the Board or
Committee, all the rights of a stockholder with respect to said shares, subject
to the restrictions in the Common Stock or Consulting Agreement, including the
right to receive all dividends and other distributions paid or made with respect
to the Common Stock.

       

      5.4       All shares
of Common Stock issued under this Plan (including any shares of Common Stock and
other securities issued with respect to the shares of Common Stock as a result
of stock dividends, stock splits or similar changes in the capital structure of
the Company) shall be subject to such restrictions as the Board or Committee
shall provide, which restrictions may include, without limitation, restrictions
concerning voting rights, transferability of the Common Stock and restrictions
based on duration of employment with the Company, Company performance and
individual performance; provided that the Board or Committee may, on such terms
and conditions as it may determine to be appropriate, remove any or all of such
restric­tions.  Common Stock may
not be sold or encumbered until all applicable restrictions have terminated or
expire.  The restrictions, if any,
imposed by the Board or Committee or the Board under this Section 5 need not be
identical for all Common Stock and the imposition of any restrictions with
respect to any Common Stock shall not require the imposition of the same or any
other restrictions with respect to any other Common Stock.

       

    

    
      

    

    
      6.        
Adjustments or Changes in Capitalization

       

      6.1       In the
event that the outstanding Common Shares of the Company are hereafter changed
into or exchanged for a different number or kind of shares or other securities
of the Company by reason of merger, consolidation, other reorganization,
recapitalization, reclassification, combination of shares, stock split-up or
stock dividend, within 6 months from the date hereof, and assuming the shares
issued pursuant to this plan are still owned or fully controlled by the issuee
under this plan, then in that event there shall be a like adjustment in the
number of shares held by such issuee.

       

      6.2       The
foregoing adjustments and the manner of application of the foregoing provisions
shall be determined solely by the Committee, whose determination as to what
adjustments shall be made and the extent thereof, shall be final, binding and
conclusive.  No fractional Shares
shall be issued under the Plan on account of any such adjustments.

       

      7.        
Government and Other Regulations

       

      The
obligation of the Company to issue, transfer and deliver Common Shares under the
Plan shall be subject to all applicable laws, regulations, rules, orders and
approval which shall then be in effect and required by the relevant stock
exchanges on which the Common Shares are traded and by government entities as
set forth below or as the Committee in its sole discretion shall deem necessary
or advisable.  

       

      8.        
Miscellaneous Provisions

       

      8.1       Any
expenses of administering this Plan shall be borne by the Company, except the
recipients of the common shares shall be responsible for the costs of
preparation of this registration statement and the filing thereof.

       

      8.2       The place
of administration of the Plan shall be in the State of Delaware, or such other
place as determined from time to time by the Board, and the validity,
construction, interpretation, administration and effect of the Plan and of its
rules and regulations, and rights relating to the Plan, shall be determined
solely in accordance with the laws of the State of Delaware.

       

      8.3       In addition
to such other rights of indemnification as they may have as members of the Board
or the Committee, the members of the Committee shall be indemnified by the
Company against all costs and expenses reasonably incurred by them in connection
with any action, suit or proceeding to which they or any of them may be party by
reason of any action taken or failure to act under or in connection with the
Plan against all amounts paid by them in settlement thereof (provided such
settlement is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith;  provided that upon the institution of
any such action, suit or proceeding a Committee member shall, in writing, give
the Company notice thereof and an opportunity, at its own expense, to handle and defend the
same, with counsel acceptable to the recipient,  before such Committee member undertakes
to handle and defend it on his own behalf.

       

      9.        
Written Agreement

       

      The
Common Shares issued hereunder shall be embodied in a board resolution which
shall constitute a written Stock Compensation Agreement which shall be subject
to the terms and conditions prescribed above and shall be signed by the
recipient and by the President or any Vice President of the Company, for and in
the name and on behalf of the Company.

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