Document:

Fifth Amendment to the Second Amended and Restated Credit Agreement

 
EXHIBIT 10.1

 
FIFTH AMENDMENT 
 
TO THE 
 
SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 
THIS FIFTH AMENDMENT TO THE SECOND AMENDED
AND RESTATED CREDIT AGREEMENT (the “Amendment”) dated as of April 28, 2003, is executed by and among IMCO Recycling Inc., a Delaware corporation (“Borrower”), the Subsidiary Guarantors party to the Credit Agreement
(hereinafter defined), the Lenders party to the Credit Agreement and JPMorgan Chase Bank (formerly known as The Chase Manhattan Bank, successor by merger to Chase Bank of Texas, National Association) in its capacity as Administrative Agent under the
Credit Agreement (in such capacity, “Administrative Agent”). 
 
RECITALS 
 

	A.	 	Borrower, Subsidiary Guarantors, Lenders and Administrative Agent are parties to that certain Second Amended and Restated Credit Agreement, dated as of October 25,
1999, as amended by that certain First Amendment to the Second Amended and Restated Credit Agreement dated as of January 5, 2000, as further amended by that certain Second Amendment to the Second Amended and Restated Credit Agreement dated as of
October 20, 2000, as further amended by that certain Third Amendment to the Second Amended and Restated Credit Agreement dated as of October 26, 2001, and as further amended by that certain Fourth Amendment to the Second Amended and Restated Credit
Agreement dated as of April 26, 2002 (the “Credit Agreement”). 

 

	B.	 	Borrower, Subsidiary Guarantors, Lenders and Administrative Agent desire to amend the Credit Agreement in accordance with the terms hereinafter set forth pursuant to
the amendment procedures specified in Section 12.04 of the Credit Agreement. 

 
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows: 
 
ARTICLE I 
 
Definitions 
 
1.1    Defined Terms.    All capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to such terms in the Credit Agreement. 
 

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ARTICLE II

 
Amendments 
 
2.1    Commitment Reduction; Amendment
of Annex A.    The amount of the Revolving Credit Commitments is hereby reduced to $150,000,000 and the respective Revolving Credit Commitment of each Lender is reduced accordingly as reflected in Annex A to the
Credit Agreement as amended hereby. Accordingly, Annex A to the Credit Agreement is hereby amended to read in its entirety as set forth in Annex A hereto. 
 
2.2    Amendment to Defined Terms.    The following
definitions set forth in Section 1.01 of the Credit Agreement are hereby amended to read in their respective entireties as follows: 
 
“Applicable Margin” shall mean, during each period specified below, the percentage per annum
specified for such period below: 
 

	 PERIOD

	    	 ALTERNATE
 BASE RATE LOANS

	    	 LIBOR LOANS

	 From and including April 28, 2003 to and including September 30, 2003
	    	 2.00%
	    	 3.50%

	 After September 30, 2003
	    	 2.50%
	    	 4.00%

 
“Applicable Revolving Credit Commitment Fee Percentage” shall mean 0.75% per annum. 
 
“Measurement Period” shall mean (a) for purposes of the covenant set forth in Section 9.11(g), the
applicable period specified therein, and (b) for all other purposes, the most recent four (4) full fiscal quarters of Borrower for which financial statements have been provided pursuant to Section 9.01. 
 
“Revolving Credit
Commitments” shall mean the aggregate sum of the Revolving Credit Commitment of all of the Lenders. The aggregate principal amount of the Revolving Credit Commitments as of April 28, 2003 is $150,000,000. 
 
2.3    Amendment to Section
2.05.    Section 2.05 of the Credit Agreement is hereby amended to add the following clause (d) to the end thereof, which clause (d) shall read in its entirety as follows: 
 
(d)    If the Revolving
Credit Commitment of each Lender has not been terminated and all Obligations paid and satisfied in full on or before October 6, 2003, Borrower shall pay to the Administrative Agent for the account of each Lender a contingency fee in an amount equal
to such Lender’s Revolving Credit Commitment multiplied by 0.40%, which fee shall be due and payable on October 6, 2003. 
 

2 

 
2.4    Financial Statements.    Section 9.01(a) of the Credit Agreement is hereby amended to read in its entirety as follows: 
 
(a)    (i)    as soon as available and in any event
within 45 days after the end of each of the first three quarterly fiscal periods of each fiscal year, unaudited consolidated statements of income and cash flow and consolidating statements of income of (1) Borrower and its Consolidated Subsidiaries,
(2) Borrower and the Restricted Subsidiaries, and (3) all of the Unrestricted Subsidiaries, for such period and for the period from the beginning of the respective fiscal year to the end of such period, the related consolidated and consolidating
balance sheets of (A) Borrower and its Consolidated Subsidiaries, (B) Borrower and the Restricted Subsidiaries, and (C) all of the Unrestricted Subsidiaries, as at the end of such period, setting forth in each case (other than consolidating
statements) in comparative form the corresponding consolidated statement of income for the corresponding period in the preceding fiscal year, accompanied by a certificate of a senior financial officer of Borrower, which certificate shall state that
said consolidated financial statements fairly present the consolidated financial condition and results of operations of Borrower and its Consolidated Subsidiaries and such consolidating financial statements fairly present the non-consolidated
financial condition and results of operations of the Borrower and each of its Consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments); and

 
(ii)    as
soon as available and in any event within 30 days after the end of each calendar month, unaudited consolidated statements of income and cash flow and consolidating statements of income of (1) Borrower and its Consolidated Subsidiaries, (2) Borrower
and the Restricted Subsidiaries, and (3) all of the Unrestricted Subsidiaries, for such period and for the period from the beginning of the respective fiscal year to the end of such period, the related consolidated and consolidating balance sheets
of (A) Borrower and its Consolidated Subsidiaries, (B) Borrower and the Restricted Subsidiaries, and (C) all of the Unrestricted Subsidiaries, as at the end of such period, accompanied by a certificate of a senior financial officer of Borrower,
which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of Borrower and its Consolidated Subsidiaries and such consolidating financial statements fairly
present the non-consolidated financial condition and results of operations of the Borrower and each of its Consolidated Subsidiaries in accordance with GAAP, consistently applied, as at the end of, and for, such period (subject to normal year-end
audit adjustments); 
 
2.5    Compliance Certificates.    Clause (ii) of the next to last sentence of Section 9.01 of the Credit Agreement is hereby amended to read as follows: 
 
(ii)    setting forth in
reasonable detail the computations necessary to determine whether Borrower is in compliance with Sections 9.07, 9.08, 9.09, 9.10 and 9.11 as of the end of the respective month (for Section 9.11(g) only), quarterly fiscal period or fiscal year.

 
2.6    Officer’s
Certificates.    Section 9.01 of the Credit Agreement is hereby further amended to delete the word “and” appearing at the end of clause (k), to add the following new 

 

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clauses (l) and (m), and to reletter the existing clause (l) as clause (n), which new clauses (l) and (m) shall read in their entirety, as
follows: 
 
(l)    on or before June 2, 2003, an Officers’ Certificate confirming Borrower’s engagement of a financial advisory firm of recognized national standing reasonably satisfactory to the Administrative
Agent to effect a total refinancing of the Obligations and termination of the Revolving Credit Commitments; 
 
(m)    on or before June 30, 2003, either (a) a copy of an executed, binding agreement with a Person,
other than Borrower or any Subsidiary or Affiliate of Borrower, for a substantial transaction that would result in a total refinancing of the Obligations and termination of the Revolving Credit Commitments, or (b) evidence satisfactory to the
Administrative Agent of progress in effecting a total refinancing of the Obligations and termination of the Revolving Credit Commitments pursuant to a credit facility that is not related to, conditioned upon, or for the purpose of financing any
contemplated substantial transaction or any other transaction other than the refinancing of the Obligations and termination of the Revolving Credit Commitments, which evidence shall include a final offering memorandum or an information memorandum
and summary of terms and conditions (as applicable), an execution timetable allowing for a closing prior to October 6, 2003, and such other items as reasonably requested by the Administrative Agent or the Majority Lenders. 
 
2.7    Amendment to Section
9.11.    Subsections (b) and (d) of Section 9.11 of the Credit Agreement are hereby each amended to read as follows, respectively, and Section 9.11 of the Credit Agreement is further amended to add subsection (g) to the end
thereof, which subsections (b), (d) and (g) shall read in their respective entireties as follows: 
 
(b)    Minimum Interest Coverage Ratio.    Borrower shall not permit the
Interest Coverage Ratio for each Measurement Period specified below to be less than the ratio set forth opposite such Measurement Period in the table below: 
 

	 MEASUREMENT
 PERIOD ENDING

	  	 RATIO

	 3/31/2003
	  	 2.70:1.0

	 6/30/2003
	  	 2.25:1.0

	 9/30/2003
	  	 2.00:1.0

 
(d)    Leverage Ratio.    Borrower shall not permit the Leverage Ratio for each Measurement Period specified below to exceed the ratio set forth opposite such Measurement Period in the
table below: 
 

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	 MEASUREMENT PERIOD ENDING

	 	 RATIO

	 3/31/2003
	 	 4.00:1.0

	 6/30/2003
	 	 4.20:1.0

	 9/30/2003
	 	 4.50:1.0

 
(g)    Minimum EBITDA.    Borrower shall not permit Consolidated EBITDA for each period specified below to be less than the amount set forth opposite such period in the table below:

 

	 PERIOD

	  	 MINIMUM EBITDA AMOUNT

	 Two-month period ending May 31, 2003
	  	 $
	 5,800,000

	 Three-month period ending June 30, 2003
	  	 $
	 8,800,000

	 Four-month period ending July 31,2003
	  	 $
	 11,400,000

	 Five-month period ending August 31, 2003
	  	 $
	 15,300,000

	 Six-month period ending September 30, 2003
	  	 $
	 19,300,000

	 Seven-month period ending October 31, 2003
	  	 $
	 23,000,000

	 Eight-month period ending November 30, 2003
	  	 $
	 26,400,000

 
ARTICLE III 
 
Conditions Precedent 
 
3.1    Conditions.    The effectiveness of this Amendment is subject to the satisfaction of the following conditions precedent: 
 
(a)    Amendment
Fee.    Borrower shall have paid to the Administrative Agent, for the account of each Lender that executes and delivers this Amendment on or before April 28, 2003, an amendment fee in an amount equal to the Revolving Credit
Commitment of each such Lender (as reduced by this Amendment) multiplied by 0.30%. 
 
(b)    Representations and Warranties.    The representations and
warranties contained herein and in all other Basic Documents, as amended hereby, shall be true and correct as of the date hereof as if made on the date hereof (except for those representations and warranties specifically made as of a particular date
or dates, in which case such representations and warranties shall remain true and correct with respect to the particular date or dates referred to). 
 

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(c)    No Default.    No Default or Event of Default shall have occurred and be continuing. 
 
(d)    Corporate Matters.    All corporate proceedings taken in connection
with the transactions contemplated by this Amendment and all documents, instruments, and other legal matters incident thereto shall be satisfactory to the Administrative Agent and its legal counsel, Locke Liddell & Sapp LLP. 
 
(e)    Additional
Documentation.    The Administrative Agent shall have received such additional approvals, opinions, or documents as the Administrative Agent or its legal counsel, Locke Liddell & Sapp LLP, may reasonably request.

 
(f)    Fees, Costs and Expenses.    Borrower shall have paid any and all fees, costs and expenses payable pursuant to the Credit Agreement or any fee letter or agreement entered into by
such parties. 
 
ARTICLE IV 
 
Ratifications, Representations and Warranties

 
4.1    Ratifications.    The terms and provisions set forth in this Amendment shall modify and supersede all inconsistent terms and provisions set forth in the Credit Agreement and
except as expressly modified and superseded by this Amendment, the terms and provisions of the Credit Agreement and the other Basic Documents are ratified and confirmed and shall continue in full force and effect. The Obligors agree that the Credit
Agreement, as amended hereby, and the other Basic Documents shall continue to be legal, valid, binding and enforceable in accordance with their respective terms. The Obligors ratify and confirm that all guaranties, assurances and Liens granted,
conveyed or assigned to Administrative Agent under the Basic Documents (as they may have been renewed, extended and amended) are not released, reduced or otherwise adversely affected by this Amendment and continue to guarantee, assure and secure
full payment and performance of the present and future Obligations, and agree to perform such acts and duly authorize, execute, acknowledge, deliver, file and record such additional documents and certificates as Administrative Agent may reasonably
request in order to create, perfect, preserve and protect those guaranties, assurances and Liens. 
 
4.2    Representations and Warranties.    Each Obligor hereby represents and warrants to
the Administrative Agent and the Lenders that (a) the execution, delivery, and performance by the Obligors of this Amendment and compliance with the terms and provisions hereof have been duly authorized by all requisite action on the part of each
such Person and do not and will not violate or conflict with, or result in a breach of, or require any consent under (i) the articles of incorporation, certificate of incorporation, bylaws, partnership agreement, regulations or other organizational
documents of any such Person, (ii) any applicable law, rule, or regulation or any order, writ, injunction, or decree of any Governmental Authority, or (iii) any material agreement or instrument to which any such Person is a party or by which any of
them or any of their property is bound or subject, (b) the representations and warranties contained in the Credit Agreement, as amended hereby, and any other Basic Document are true and correct on and as of the date hereof as though made on and as
of the date hereof (except for those representations and 
 

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warranties specifically made as of a particular date or dates, in which case such representations and warranties shall remain true and
correct with respect to the particular date or dates referred to), and (c) no Default or Event of Default has occurred and is continuing. 
 
ARTICLE V 
 
Miscellaneous 
 
5.1    Survival of Representations and Warranties.    All representations and warranties
made in this Amendment shall survive the execution and delivery of this Amendment, and no investigation by the Administrative Agent or any Lender or any closing shall affect the representations and warranties or the right of the Administrative Agent
or any Lender to rely upon them. 
 
5.2    Reference to Credit Agreement.    Each of the Basic Documents, including the Credit Agreement and any and all other agreements, documents, or instruments now or hereafter executed
and delivered pursuant to the terms hereof or pursuant to the terms of the Credit Agreement as amended hereby, are hereby amended so that any reference in such Basic Documents to the Credit Agreement shall mean a reference to the Credit Agreement as
amended hereby. 
 
5.3    Expenses of the Administrative Agent.    Borrower agrees to pay on demand all costs and expenses incurred by the Administrative Agent in connection with the preparation,
negotiation, and execution of this Amendment and any and all amendments, modifications, and supplements thereto, including without limitation the costs and fees of the Administrative Agent’s legal counsel, and all costs and expenses incurred by
the Administrative Agent in connection with the enforcement or preservation of any rights under the Credit Agreement, as amended hereby, or any other Basic Document, including without limitation the costs and fees of the Administrative Agent’s
legal counsel. 
 
5.4    Severability.    Any provision of this Amendment held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this
Amendment and the effect thereof shall be confined to the provision so held to be invalid or unenforceable. 
 
5.5    APPLICABLE LAW.    THIS AMENDMENT SHALL BE DEEMED TO HAVE BEEN MADE AND TO BE
PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS. 
 
5.6    Successors and Assigns.    This Amendment is binding upon and shall inure to the
benefit of the Obligors, Lenders, the Syndication Agent, the Documentation Agent, the Administrative Agent and their respective successors and assigns, except Obligors shall not assign or transfer any of their respective rights or obligations
hereunder without the prior written consent of the Administrative Agent. 
 
5.7    Counterparts.    This Amendment may be executed in one or more counterparts, each of which when so executed shall be deemed to be an original, but all of which when taken

 

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together shall constitute one and the same instrument. This Amendment shall not be effective unless and until the Administrative Agent, the
Lenders which constitute “Majority Lenders” as defined in the Credit Agreement and the Obligors have each executed and delivered a counterpart hereof and all conditions to the effectiveness hereof have been satisfied in full, whereupon
this Amendment shall become a binding agreement, enforceable in accordance with its terms and the amendments effectuated hereby shall become effective as of the date first above written. 
 
5.8    Headings.    The headings, captions, and arrangements
used in this Amendment are for convenience only and shall not affect the interpretation of this Amendment. 
 
5.9    Release of Claims.    The Obligors each hereby acknowledge and agree that none of
them has any and there are no claims or offsets against or defenses or counterclaims to the terms and provisions of or the obligations of any Obligor created or evidenced by the Credit Agreement or any of the other Basic Documents, and to the extent
any such claims, offsets, defenses or counterclaims exist, each Obligor hereby waives, and hereby releases the Administrative Agent, the Syndication Agent, the Documentation Agent and each of the Lenders from, any and all claims, offsets, defenses
and counterclaims, whether known or unknown, such waiver and release being with full knowledge and understanding of the circumstances and effects of such waiver and release and after having consulted legal counsel with respect thereto. 
 
5.10    ENTIRE
AGREEMENT.    THIS AMENDMENT, THE OTHER BASIC DOCUMENTS AND ALL OTHER INSTRUMENTS, DOCUMENTS AND AGREEMENTS EXECUTED AND DELIVERED IN CONNECTION WITH THIS AMENDMENT EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. 
 
[REMAINDER OF PAGE INTENTIONALLY BLANK] 
 
 

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EXECUTED as of the date first written above. 

	 OBLIGORS:
  
 IMCO RECYCLING INC.

	
	 
	
	 By:
	 	  

	 	 	 Name:   James B. Walburg
 Title:     Senior Vice President

	
	 IMCO INVESTMENT COMPANY
 IMCO RECYCLING OF INDIANA INC.
 IMCO ENERGY CORP.
 IMCO RECYCLING OF ILLINOIS INC.
 ALCHEM ALUMINUM,
INC.
 IMCO RECYCLING OF MICHIGAN, L.L.C.
 PITTSBURG ALUMINUM, INC.
 INTERAMERICAN ZINC, INC.
 IMCO RECYCLING OF CALIFORNIA,
INC.
 IMCO INTERNATIONAL, INC.
 IMCO RECYCLING OF OHIO INC.
 IMSAMET, INC.
 IMCO RECYCLING OF IDAHO INC.
 IMCO RECYCLING OF UTAH INC.
 ROCK CREEK ALUMINUM, INC.
 U.S. ZINC CORPORATION

GULF REDUCTION CORPORATION
 MIDWEST ZINC CORPORATION
 WESTERN ZINC CORPORATION
 METALCHEM, INC.
 U.S. ZINC EXPORT CORPORATION
 ALCHEM ALUMINUM SHELBYVILLE INC.
 INDIANA ALUMINUM INC.
 IMCO RECYCLING SERVICES COMPANY
 IMCO OPERATIONS SERVICES
COMPANY

 
 

	 
	
	 By:
	 	  

	 	 	 Name:   James B. Walburg
 Title:     Vice President of each of

 the above-named entities

 

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IMCO INDIANA PARTNERSHIP L.P. 
 
By     IMCO Energy Corp., its General Partner 

	 
	
	 By:
	 	  

	 	 	 Name:   James B. Walburg
 Title:     Vice President

 
IMCO MANAGEMENT PARTNERSHIP, L.P. 
 
By     IMCO Recycling Inc., its General Partner 
 

	 
	
	 By:
	 	  

	 	 	 Name:   James B. Walburg
 Title:     Senior Vice President

	  
 LENDERS:
  
 JPMORGAN CHASE BANK (formerly known as
 The Chase Manhattan Bank, successor by merger
to

 Chase Bank of Texas, National Association), as

 Administrative Agent and a Lender

 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
BANC OF AMERICA STRATEGIC SOLUTIONS, INC. 
(assignee of Bank of America, N.A.),

as Syndication Agent and a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

10 

 
MERRILL LYNCH CAPITAL CORPORATION 
as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
BANK OF TOKYO-MITSUBISHI, LTD., 
as a Lender 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
BANK ONE, NA (formerly known as The First 
National Bank of Chicago) (Main Office Chicago),

as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
PNC BANK, NATIONAL ASSOCIATION, 
as Documentation Agent and a Lender 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

11 

 
DZ BANK AG DEUTSCHE ZENTRAL- 
GENOSSENSCHAFTSBANK, FRANKURT AM 
MAIN (formerly DG BANK DEUTSCHE 
GENOSSENSCHAFTSBANK AG), as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
AMSOUTH BANK (including as successor in 
interest by merger to First American National

Bank), as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
NATIONAL CITY BANK, as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
COMERICA BANK, as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

12 

 
WELLS FARGO BANK TEXAS, NATIONAL 
ASSOCIATION, as a Lender 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 
BANK HAPOALIM B.M., NEW YORK 
BRANCH, as a Lender 
 
 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

	 
	
	 By:
	 	  

	 	 	 Name:

 Title:

 

13 

 
ANNEX A 
 
REVOLVING CREDIT COMMITMENTS 
 

	 INSTITUTION

	  	 REVOLVING CREDIT
COMMITMENT

	 JPMorgan Chase Bank
	  	 $
	 18,000,000

	 Banc of America Strategic Solutions, Inc.
	  	 $
	 18,000,000

	 PNC Bank, National Association
	  	 $
	 18,000,000

	 Bank One, NA
	  	 $
	 15,000,000

	 Wells Fargo Bank Texas, National Association
	  	 $
	 15,000,000

	 Comerica Bank
	  	 $
	 15,000,000

	 AmSouth Bank
	  	 $
	 12,600,000

	 Bank of Tokyo–Mitsubishi, Ltd.
	  	 $
	 9,000,000

	 DG Bank Deutsche Genossenschaftsbank, AG
	  	 $
	 9,000,000

	 National City Bank
	  	 $
	 9,000,000

	 Merrill Lynch Capital Corporation
	  	 $
	 6,000,000

	 Bank Hapoalim, San Francisco Branch
	  	 $
	 5,400,000

	 TOTAL
	  	 $
	 150,000,000

 

14Annual Incentive Program

EXHIBIT 10.2 
 
IMCO RECYCLING INC. 
ANNUAL INCENTIVE PROGRAM 
 
(As amended February 25, 1997, April 1, 1997, May 13, 1997, May 13, 1998, 
October 20, 1999, May 10, 2000 and February 12, 2001) 
 
Purpose 
 
The purpose of the IMCO Recycling Inc. Annual Incentive Program is to advance the interests of IMCO Recycling Inc. and its stockholders by providing certain key employees with a proprietary interest in the Company through
the granting of Incentive Stock Options and Nonqualified Stock Options which will increase the interest of such key employees in the Company’s welfare, furnish an incentive to such key employees to continue their services for the Company and
provide a means through which the company may attract able persons to enter its employ or serve as officers and directors. The Plan also provides for the payment of an annual retainer to the Company’s non-employee directors. 
 
ARTICLE I 
 
Definitions 
 
For the purpose of this Plan, unless the context requires
otherwise, the following terms shall have the meanings indicated: 
 
“Annual Meeting Date” has the meaning assigned to it in Section 9.3. 
 
“Annual Retainer” has the meaning assigned to it in Section 9.1. 
 
“Board” means the board of
directors of the Company. 
 
“Change in Control” means the occurrence of any of the following events: (i) there shall be consummated any merger or consolidation pursuant to which shares of the Company’s Common Stock would be converted into
cash, securities or other property, or any sale, lease, exchange or other disposition (excluding disposition by way of mortgage, pledge or hypothecation), in one transaction or a series of related transactions, of all or substantially all of the
assets of the Company (a “Business Combination”), in each case unless, following such Business Combination, all or substantially all of the holders of the outstanding Common Stock immediately prior to such Business Combination beneficially
own, directly or indirectly, more than 50.1% of the outstanding common stock or equivalent equity interests of the corporation or entity resulting from such Business Combination (including, without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of
the outstanding Common Stock, (ii) the stockholders of the Company approve any plan or proposal for the 

 

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complete liquidation or dissolution of the Company, (iii) any “person” (as such term is defined in Section 3(a)(9) or Section
13(d)(3) under the 1934 Act) or any “group” (as such term is used in Rule 13d-5 promulgated under the 1934 Act), other than the Company or any successor of the Company or any Subsidiary of the Company or any employee benefit plan of the
Company or any Subsidiary (including such plan’s trustee), becomes a beneficial owner for purposes of Rule 13d-3 promulgated under the 1934 Act, directly or indirectly, of securities of the Company representing 50.1% or more of the
Company’s then outstanding securities having the right to vote in the election of directors, or (iv) during any period of two consecutive years, individuals who, at the beginning of such period constituted the entire Board, cease for any reason
(other than death) to constitute a majority of the directors, unless the election, or the nomination for election, by the Company’s stockholders, of each new director was approved by a vote of at least a majority of the directors then still in
office who were directors at the beginning of the period. 
 
“Code” means the Internal Revenue Code of 1986, as amended. 
 
“Committee” has the meaning assigned to it in Article II. 
 
“Common Stock” means the
common stock which the Company is currently authorized to issue or may in the future be authorized to issue. 
 
“Company” means IMCO Recycling Inc., a Delaware corporation. 
 
“Date of Grant” means the
effective date on which an option is awarded to a Participant as set forth in the stock option agreement. 
 
“Discretionary Option” has the meaning assigned to it in Section 5.1. 
 
“Election” has the meaning
assigned to it in Section 9.2. 
 
“Election Portion” has the meaning assigned to it in Section 9.2. 
 
“Eligible Participant” has the meaning assigned to it in Section 6.1. 
 
“Fair Market Value” of the
Company’s shares of Common Stock means (i) the closing sale price per share on the principal securities exchange on which the Common Stock is traded (or if there is no sale on the relevant date, then on the last previous day on which a sale was
reported), or (ii) the mean between the closing or average (as the case may be) bid and asked prices per share of Common Stock on the over-the-counter market, whichever is applicable. 
 
“Incentive Stock Option” means an option to purchase shares of Common Stock
granted to an Eligible Participant pursuant to Article VI and which is intended to qualify as an incentive stock option under Section 422 of the Code. 
 

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“1934 Act” means the Securities Exchange Act of 1934, as amended. 
 
“Nonqualified Stock Option” means an option to purchase shares of Common Stock granted to a Participant
pursuant to Article V and which is not intended to qualify as an incentive stock option under Section 422 of the Code. 
 
“Option Amount” has the meaning assigned to it in Section 5.1. 
 
“Participant” means any key
employee of the Company or any of its Subsidiaries that the Committee has determined to be eligible for participation in the Plan and who, on the particular Payment Date, is, subject to Article IV of the Plan, then employed by the Company or any of
its Subsidiaries; provided that, solely for the purposes of Section 5.1 of the Plan and the Discretionary Options which may be granted pursuant thereto, “Participants” shall mean any employee of the Company or any Subsidiary of the Company
or any non-employee director, officer or consultant of the Company or any Subsidiary who is, or who is proposed to be, a recipient of a Discretionary Option. 
 
“Plan” means the IMCO Recycling Inc. Annual Incentive Program, as it may be amended from time to time.

 
“Reload Stock
Option” means a Nonqualified Stock Option or an Incentive Stock Option granted pursuant to Section 7.2. 
 
“Restricted Stock” has the meaning assigned to it in Section 7.3. 
 
“Restriction Period” has the
meaning assigned to it in Section 7.3. 
 
“Spread” has the meaning assigned to it in Article XIV. 
 
“Stock Dividend” means a dividend or other distribution declared on the shares of Common Stock payable in
(i) capital stock of the Company or any Subsidiary of the Company, or (ii) rights, options or warrants to receive or purchase capital stock of the Company or any Subsidiary of the Company, or (iii) securities convertible into or exchangeable for
capital stock of the Company or any Subsidiary of the Company, or (iv) any capital stock received upon the exercise, or with respect to, the foregoing. 
 
“Stock Options” shall mean any and all Incentive Stock Options, Nonqualified Stock Options and Reload
Stock Options granted pursuant to the Plan. 
 
“Stock Portion” has the meaning assigned to it in Section 9.2. 
 
“Subsidiary” means any corporation in an unbroken chain of corporations beginning with the Company if, at
the time of granting of the Stock Option, each of the corporations other than the last corporation in the unbroken chain owns stock possessing 

 

3 

more than 50% of the total combined voting power of all classes of stock in one of the other corporations in the chain, and
“Subsidiaries” means more than one of any such corporations. 
 
ARTICLE II 
 
Administration 
 
Subject to the terms of this Article II, the Plan shall be administered by the Compensation Committee (the “Committee”) of the Board, which shall consist of at least two members. Any member of the Committee may be removed
at any time, with or without cause, by resolution of the Board. Any vacancy occurring in the membership of the Committee may be filled by appointment by the Board. Each member of the Committee, at the time of his appointment to the Committee and
while he is a member thereof, must be an “outside director”, as that term is defined under Section 162(m) of the Code. 
 
The Board shall select one of its members to act as the Chairman of the Committee, and the Committee shall make such rules and regulations
for its operation as it deems appropriate. A majority of the Committee shall constitute a quorum, and the act of a majority of the members of the Committee present at a meeting at which a quorum is present shall be the act of the Committee. Subject
to the terms hereof, the Committee shall designate from time to time the key employees, directors, consultants, or officers of the Company to whom Stock Options will be granted, interpret the Plan, prescribe, amend, and rescind any rules and
regulations necessary or appropriate for the administration of the Plan, and make such other determinations and take such other action as it deems necessary or advisable. In this regard, the Committee may consider and give appropriate weight to
input from representatives of management of the Company regarding the contributions or potential contributions to the Company or a Subsidiary of certain of the employees, officers or consultants, or potential employees, officers or consultants, of
the Company or any Subsidiary. 
 
The Committee
shall have full authority to administer the Plan, including authority to interpret and construe any provision of the Plan and the terms of any Stock Options issued under it and to adopt such rules and regulations for administering the Plan as it may
deem necessary. The Committee may, in its absolute discretion, (i) accelerate the date on which any Stock Option granted under the Plan becomes exercisable, (ii) extend the date on which any Stock Option granted under the Plan ceases to be
exercisable and (iii) remove, suspend or alter the restrictions imposed under Section 7.3 of the Plan. Except as provided below, any interpretation, determination, or other action made or taken by the Committee shall be final, binding, and
conclusive on all interested parties, including the Company and all Participants. 
 
ARTICLE III 
 
Shares Subject to Plan 
 
Subject to the provisions of Articles XIII and XIV of the Plan, the aggregate number of shares which may be issued to Participants under grants of Stock Options made by the Committee under the Plan shall be: 
 

4 

 
(a)    1,200,000 shares of Common Stock; plus 
 
(b)    the number of shares that are delivered or tendered, or withheld from any exercise, by a
Participant as full or partial payment made to the Company in connection with the exercise price of any Stock Option or in connection with satisfying the Participant’s tax withholding obligations pursuant to Section 16.6 of the Plan, to the
extent that a Reload Stock Option is granted to purchase such number of shares so delivered to or withheld by the Company. 
 
The aggregate number of shares of Common Stock that may be represented by grants of Stock Options made to any Participant under the Plan
in any Company fiscal year may not exceed 100,000 shares. Shares to be distributed and sold under the Plan may be made available from either authorized but unissued Common Stock or Common Stock held by the Company in its treasury; provided,
however, that with regards to any Stock Options granted covering any of the additional 300,000 shares reserved under the Plan pursuant to that certain amendment to the Plan dated May 10, 2000, only Company treasury shares or shares of Common
stock repurchased by the Company may be utilized and made available with respect to the primary shares covered by such stock option grants. Shares that by reason of the expiration or unexercised termination of a Stock Option are no longer subject to
purchase may be reoffered under the Plan. Shares of Common Stock that are forfeited pursuant to the terms of the Plan shall be returned to the Plan and made available for future grant. However, in no event may the aggregate number of shares of
Common Stock that may be represented by grants of Incentive Stock Options made to Participants under the Plan exceed 900,000 shares. 
 
ARTICLE IV 
 
Eligibility 
 
The Committee shall, from time to time, but not less often than annually, select the particular key members of management of the Company
and its Subsidiaries to whom Stock Options provided for under the Plan may be granted. Employees who participate in this Plan may also participate in other incentive or benefit plans of the Company or any Subsidiary. As used herein, the term
“employee” shall mean any person employed full-time by the Company or Subsidiary on a salaried basis, and the term “employment” shall mean full-time salaried employment by the Company or a Subsidiary. In addition, the Committee
shall from time to time select the particular employees, consultants, officers and directors of the Company and its Subsidiaries to whom Discretionary Options to be granted pursuant to Section 5.1 of the Plan are to be granted. 
 
ARTICLE V 
 
Discretionary Stock Options 
 
5.1    Grants of Discretionary Stock
Options.    Notwithstanding any provision contained in this Plan to the contrary, the Committee may, in its sole discretion, at any time and from time to time, select Participants and grant Stock Options
(“Discretionary Options”) to any 
 

5 

such Participant in recognition of such Participant’s contributions or potential contributions to the Company or any Subsidiary. In this
regard, the Committee shall consider and give appropriate weight to input from representatives of management of the Company regarding the contributions or potential contributions to the Company or a Subsidiary of particular employees, officers or
consultants, or potential employees, officers or consultants of the Company or a Subsidiary. 
 
5.2    Stock Option Agreements.    Each grant of Stock Options shall be evidenced by a stock option agreement setting forth
the total number of shares subject to the Stock Option, the exercise price, the term of the Stock Option, whether such Stock Option is an Incentive Stock Option or a Nonqualified Stock Option, and such other terms and provisions as are approved by
the Committee, but, except to the extent permitted herein, are not inconsistent with the Plan. In the case of an Incentive Stock Option, the stock option agreement shall also include provisions that may be necessary to assure that the option is an
incentive stock option under Section 422 (or any successor provision) of the Code. The Company shall execute stock option agreements upon instructions from the Committee. 
 
5.3    Exercise Price.    The exercise
price for a Nonqualified Stock Option shall be equal to the Fair Market Value per share of the Common Stock on the Date of Grant. The exercise price for an Incentive Stock Option shall be determined by the Committee and shall be an amount not less
than the Fair Market Value per share of the Common Stock on the Date of Grant; the Committee shall determine the Fair Market Value of the Common Stock on the Date of Grant, and shall set forth the determination in its minutes. Notwithstanding
anything to the contrary contained in this Section 5.3, the exercise price of each Stock Option granted pursuant to the Plan shall not be less than the par value per share of the Common Stock. 
 
5.4    Option
Period and Exercisability.    Subject to Article VIII hereof, the option period will begin and terminate on the respective dates specified by the Committee, but may not terminate later than ten years from the Date of
Grant. No Stock Option granted under the Plan may be exercised at any time after its term. The Committee may provide for the exercise of Stock Options in installments and upon such terms, conditions and restrictions as it may determine. The
Committee shall have the right to accelerate the time at which any Stock Option granted to a Participant shall become exercisable. In the event of the retirement of an employee of the Company or a Subsidiary in accordance with the standard
retirement policies of the Company or the Subsidiary, as the case may be, all unmatured installments of Stock Options outstanding shall automatically be accelerated and exercisable in full in accordance with the provisions of Article VIII. In
addition, in accordance with paragraph (d) of Article XIV hereof, in the event of a Change in control of the Company, all unmatured installments of Stock Options outstanding shall thereupon automatically be accelerated and exercisable in full.

 
ARTICLE VI 
 
Limits on Incentive Stock Options 
 
6.1    Option Period.    Notwithstanding the provisions of Sections 5.4 and 7.2 hereof, if a Participant eligible to receive a
grant of an Incentive Stock Option under Section 422 of the 
 

6 

Code (an “Eligible Participant”) owns or is deemed to own (by reason of the attribution rules of Section 424(d) of the Code) more
than 10% of the combined voting power of all classes of stock of the Company (or any Subsidiary of the Company) and an Incentive Stock Option is granted to such Eligible Participant, the term of such Incentive Stock Option (to the extent required by
the Code at the time of grant) shall be no more than five years from the Date of Grant. In addition, the option exercise price of any such Incentive Stock Option granted to any such Eligible Participant owning more than 10% of the combined voting
power of all classes of stock of the Company (or any Subsidiary of the Company) shall be at least 110% of the Fair Market Value of the Common Stock on the Date of Grant. 
 
6.2    Limitation on Exercises of
Shares Subject to Incentive Stock Options.    To the extent required by the Code for incentive stock options, the exercise of Incentive Stock Options granted under the Plan shall be subject to the $100,000 calendar
year limit as set forth in Section 422(d) of the Code; to the extent that any grant exceeds such $100,000 calendar year limit, such portion of such granted Stock Option shall be deemed a Nonqualified Stock Option. 
 
6.3    Disqualifying
Disposition.    If Common Stock acquired upon exercise of an Incentive Stock Option is disposed of by an Eligible Participant prior to the expiration of either two years from the Date of Grant of such option or one
year from the transfer of shares to such Eligible Participant pursuant to the exercise of such option, or in any other disqualifying disposition within the meaning of Section 422 of the Code, such Eligible Participant shall notify the Company in
writing of the date and terms of such disposition. A disqualifying disposition by an Eligible Participant shall not affect the status of any other option granted under the Plan as an incentive stock option within the meaning of Section 422 of the
Code. 
 
6.4    Termination.    Notwithstanding the provisions of Article VIII, an Eligible Participant’s Incentive Stock Options shall terminate no later than ninety (90) days
after termination of such Participant’s employment with the Company and its Subsidiaries; provided that if such employment terminates by reason of the death or total and permanent disability (as defined in Section 22(e) of the Code) of
the Participant, then such Participant’s Incentive Stock Options shall terminate no later than one hundred eighty (180) days after such termination by reason of death or disability. 
 
6.5    Shares Available.    Grants of Incentive
Stock Options may not be made with respect to the additional 300,000 shares of Common Stock reserved under this Plan pursuant to that certain amendment to the Plan dated May 10, 2000. 
 
ARTICLE VII 
 
Exercise of Stock Options; Reload Stock Options; Restricted Stock 
 
7.1    Payment.    Full payment for shares purchased upon exercise of a Stock Option shall be made in cash or by the Participant’s delivery to the Company of shares of
Common Stock which have a Fair Market Value equal to the option exercise price (or in any combination of cash and shares of Common Stock having an aggregate Fair Market Value equal to the option exercise price). No shares may be issued until full
payment of the purchase price therefor has been made, 
 

7 

and a Participant will have none of the rights of a stockholder until shares are issued to him.
Additionally, shares covered by a Stock Option may be purchased upon exercise, in whole or in part, in accordance with the applicable stock option agreement, by authorizing a third party to sell the shares (or a sufficient portion thereof) acquired
upon exercise of a Stock Option, and assigning the delivery to the Company of a sufficient amount of the sale proceeds to pay for all the shares acquired through such exercise and any tax withholding obligations resulting from such exercise.

 
7.2    Reload
Stock Options.    Subject to the terms of this Section 7.2, in the event that shares are delivered by a Participant in payment of all or a portion of the exercise price of a Stock Option and/or shares are delivered to or
withheld by the Company in satisfaction of the Company’s tax withholding obligations upon exercise in accordance with Section 16.6, then a Participant so exercising a Nonqualified Stock Option shall automatically be granted a replacement
Nonqualified Stock Option and a Participant so exercising an Incentive Stock Option shall automatically be granted a replacement Incentive Stock Option (in either case, a “Reload Stock Option”), to purchase that number of shares so
delivered to or withheld by the Company, as the case may be, at an option exercise price equal to the Fair Market Value per share of the Common Stock on the date of exercise of the original Stock Option (subject to the provisions of Article VI
regarding Incentive Stock Options and, in any event not less than the par value per share of the Common Stock). The option period for a Reload Stock Option will commence on the Date of Grant and expire on the expiration date of the original Stock
Option it replaces (subject to the provisions in Article VI regarding Incentive Stock Options and the provisions of Article VIII), after which the Reload Stock Option cannot be exercised. The Date of Grant of a Reload Stock Option shall be the date
that the Stock Option it replaces is exercised. A Reload Stock Option shall automatically vest and be exercisable in full after the expiration of six months from its Date of Grant. It shall be a condition to the grant of a Reload Stock Option that
promptly after its Date of Grant, a stock option agreement shall be delivered to, and executed and delivered by the Participant and the Company which sets forth the total number of shares subject to the Reload Stock Option, the option exercise
price, the term of the Reload Stock Option and such other terms and provisions as are consistent with the Plan. 
 
7.3    Restricted Stock.    In the event that a Participant exercises a Stock
Option and receives a Reload Stock Option under Section 7.2, the following restrictions and conditions will apply to that number of the shares of Common Stock (the “Restricted Stock”) issued to the Participant upon exercise of such
original Stock Option, which number of shares is equal to one-half of the sum of (i) the number of shares of Common Stock delivered by the Participant to the Company in payment of the exercise price, if any, plus (ii) the number of shares of Common
Stock delivered to, or withheld by, the Company in satisfaction of the Company’s tax withholding obligations under Section 16.6, if any: 
 
(a)    Restriction Period.    Subject to the other provisions of this Plan,
each Participant shall not be permitted to sell, assign, transfer, pledge, exercise or place any encumbrance on shares of Restricted Stock and any Stock Dividends paid on or with respect to such Restricted Stock until the earliest to occur of any of
the following events (such period of restriction being referred to herein as the “Restriction Period”): 
 

8 

 
(i)    the expiration of five years from the date of issuance of the Restricted Stock in the name of the Participant; 
 
(ii)    in the case of an employee of the Company or a Subsidiary, the retirement of such Participant
from the Company or the Subsidiary in accordance with the standard retirement policies of the Company or the Subsidiary, as the case may be; 
 
(iii)    in the case of a non-employee director, officer or consultant of the Company, the cessation
of service to the Company of such Participant in such capacity; 
 
(iv)    the death of such Participant; 
 
(v)    the total and permanent disability of such Participant (as defined in Article VIII hereof); or

 
(vi)    a
Change in Control of the Company. 
 
Notwithstanding the foregoing, shares of Restricted Stock, and any Stock Dividends paid in shares of Common Stock on or with respect to Restricted Stock, may be used during the Restriction Period in payment of the exercise price of
any Stock Option and/or in satisfaction of the Company’s tax withholding obligations upon any such exercise in accordance with Section 16.6. 
 
(b)    Rights with Respect to Restricted Stock.    Except as otherwise
provided in the Plan, the Participant shall have, with respect to his or her Restricted Stock (and any Stock Dividends paid on such Restricted Stock), all of the rights of a stockholder of the Company, including the right to vote the shares and the
right to receive any dividends thereon. Each Participant who is to receive Restricted Stock shall be issued a stock certificate in respect of such shares of Restricted Stock, registered in the name of the Participant, which shall bear an appropriate
legend referring to the restrictions applicable to such Restricted Stock, to read substantially in the following form: 
 
“The transferability of this certificate and the shares of stock represented hereby are subject to the terms and
conditions of the IMCO Recycling Inc. Annual Incentive Program. A copy of such Plan is on file in the offices of IMCO Recycling Inc., 5215 North O’Connor Blvd., Suite 1500, Irving, Texas 75039.” 
 
ARTICLE VIII 
 
Termination of Employment or Service

 
In the event a Participant shall cease to be
employed by the Company or a Subsidiary, for any reason other than death, disability or retirement, such Participant’s Stock Options may be 
 

9 

exercised by the Participant for a period of one hundred eighty (180) days after the Participant’s termination of employment or service,
as the case may be, or until expiration of the applicable Option Period (if sooner) to the extent of the shares with respect to which such Stock Options could have been exercised by the Participant on the date of termination, and thereafter to the
extent not so exercised, such Stock Options shall terminate. In addition, except as provided in Section 6.4 with respect to Incentive Stock Options, a Participant’s Stock Options may be exercised as follows in the event of such
Participant’s death, disability or retirement: 
 
(a)    Death.    In the event of death while employed, the Stock Option may be exercised, for a period of one hundred eighty (180) days after the Participant’s death or
until expiration of the Stock Option period (if sooner), to the extent of the shares with respect to which the Stock Option could have been exercised by the Participant on the date of the Participant’s death, by the Participant’s estate or
personal representative, or by the person who acquired the right to exercise the Stock Option by bequest or inheritance or by reason of the Participant’s death; and 
 
(b)    Disability or Retirement.    In the
event of termination of employment of a Participant as the result of a total and permanent disability (as defined in Section 22(e) of the Code) or as the result of retirement in accordance with the standard retirement policies of the Company or the
Subsidiary, as the case may be, the Stock Option may be exercised by the Participant or his guardian for a period of one hundred eighty (180) days after such termination or until expiration of the Stock Option period (if sooner), to the extent of
the shares with respect to which the Stock Option could have been exercised by the Participant on the date of such termination, after taking into account any acceleration of unmatured installments of Stock Options pursuant to Section 5.4.

 
Notwithstanding the foregoing, individual grants
of Stock Options to Participants under the Plan may provide, pursuant to the terms of the particular stock option agreement, more restrictive terms than those contained in this Plan concerning any exercise of such Stock Options with respect to any
termination of employment or service by such Participants. 
 
ARTICLE IX 
 
Non-Employee Director Fees 
 
9.1    Annual Retainer.    Each non-employee director of the Company shall be entitled to an annual retainer in an amount as determined from time to time by
the Board, which amount may be amended at any time and from time to time at the discretion of the Board, payable in quarterly installments in accordance with this Article IX (an “Annual Retainer”). 
 
9.2    Payment
of Annual retainer.    Each individual serving as a non-employee director as of the close of business on the date of the annual meeting of the stockholders of the Company (the “Annual Meeting Date”) shall be
entitled to be paid an Annual Retainer determined as follows: 
 

10 

 
(a)     one-half (1⁄2) of the Annual Retainer payable in shares of Common Stock (the “Stock Portion”); and 
 
(b)    one-half (1⁄2) of the Annual Retainer payable in either cash or shares of Common Stock as
designated by the non-employee director’s Election (as defined herein) (the “Election Portion”). 
 
9.3    Election.    On each
Annual Meeting Date, each incumbent non-employee director shall elect and designate (each, an “Election”) to receive his Election Portion to be paid to him in either cash or in shares of Common Stock over the next twelve (12) months. The
Election Portion, as well as the Stock Portion, will be paid in four equal installments, with each installment being payable on or before that date which is fifteen (15) days after the last day of each fiscal quarter of the Company succeeding such
Annual Meeting Date, until the date of the next Annual Meeting of Stockholders. The number of shares to be issued in an installment shall be determined by dividing (i) an amount expressed in U.S. dollars equal to one-fourth (1/4) or one-eighth (1/8)
of the Annual Retainer (depending on whether the Election Portion is payable in cash or stock), by (ii) the Fair Market Value per share of Common Stock as of the close of business on the last day of such fiscal quarter. Upon the issuance of stock
certificates representing shares of Common Stock, the non-employee director shall become a stockholder of the Company with respect to such shares of Common Stock and shall be entitled to own and vote such shares in accordance with the Certificate of
Incorporation and Bylaws of the Company, each as amended. 
 
9.4     Newly-elected Directors or Newly-appointed Directors; Directors as of January 1, 2001.    If a non-employee director is elected or appointed to the
Board on any date which is not an Annual Meeting Date, such new non-employee director shall make his Election within ten (10) days of his becoming a member of the Board. Additionally, each non-employee director of the Company who is serving as a
director as of January 1, 2001, shall be entitled to make an Election within ten (10) business days of his receipt of notification to do so by the Board. 
 
9.5    Proration.    If deemed appropriate, the Committee in
its sole discretion may prorate the Annual Retainer amount for any non-employee director by any method that the Committee or Board deems fair and equitable under the circumstances. 
 
9.6    Fractional Shares.    No
fractional shares of Common Stock shall be issued to any non-employee director hereunder and any fraction of a share resulting from the payment of any Annual Retainer shall be paid in cash.” 
 
ARTICLE X 
 
Amendment or Discontinuance 
 
Subject to the limitations set forth in this Article X, the
Board may at any time and from time to time, without the consent of the Participants, alter, amend, revise, suspend, or discontinue the Plan in whole or in part; provided that no amendment which requires stockholder approval in order for the Plan to
continue to comply with Rule 16b-3 under the 1934 Act, including any 
 

11 

successor to such Rule, shall be effective unless such amendment shall be approved by the requisite vote of the stockholders of the Company
entitled to vote thereon. 
 
Subject to the
foregoing, the Board shall have the power to amend the Plan in any manner advisable in order for Stock Options granted under the Plan to qualify for the exemption provided by Rule 16b-3 (or any successor rule relating to exemption from Section 16(b)
of the 1934 Act) or to qualify as “performance-based” compensation under Section 162(m) of the Code (including amendments as a result of changes to Rule 16b-3 or Section 162(m) or the regulations thereunder to permit greater flexibility
with respect to Stock Options granted under the Plan), and any such amendment shall, to the extent deemed necessary or advisable by the Committee, be applicable to any outstanding Stock Options theretofore granted under the Plan, notwithstanding any
contrary provisions contained in any stock option agreement. In the event of any such amendment to the Plan, the holder of any Stock Option outstanding under the Plan shall, upon request of the Committee and as a condition to the exercisability
thereof, execute a conforming amendment in the form prescribed by the Committee to any stock option agreement relating thereto within such reasonable time as the Committee shall specify in such request. Notwithstanding anything contained in this
Plan to the contrary, unless required by law, no action contemplated or permitted by this Article X shall adversely affect any rights of Participants or obligations of the Company to Participants with respect to any Stock Options theretofore granted
under the Plan without the consent of the affected Participant. 
 
ARTICLE XI 
 
Effect of
the Plan 
 
Neither the adoption of this
Plan nor any action of the Board or the Committee shall be deemed to give any Participant any right to be granted a Stock Option to purchase or receive Common Stock of the Company or any other rights except, with respect to Stock Options, as may be
evidenced by a stock option agreement, or any amendment thereto, duly authorized by and executed on behalf of the Company and then only to the extent of and upon the terms and conditions expressly set forth therein. 
 
ARTICLE XII 
 
Term 
 
The effective date of this Plan shall be as of February 28,
1996, subject to stockholder approval. This Plan and any benefits granted hereunder shall be null and void if stockholder approval is not obtained at the next annual meeting of stockholders of the Company. Unless sooner terminated by action of the
Board, the Plan will terminate on the 28th day of February, 2006. Stock Options under the Plan may not be granted after that date, but Stock Options granted before that date will continue to be effective in accordance with their terms and
conditions. 
 

12 

 
ARTICLE XIII

 
Capital Adjustments

 
If at any time while the Plan is in effect
or unexercised Stock Options are outstanding there shall be any increase or decrease in the number of issued and outstanding shares of Common Stock through the declaration of a Stock Dividend or through any recapitalization, stock split, reverse
stock split, rights offering, reorganization, merger, consolidation, split-up, spin-off, combination, subdivision, repurchase, or exchange of Common Stock or other securities of the Company, issuance of warrants or other rights to purchase Common
Stock or other securities of the Company, or other similar corporate transaction or event affects the Common Stock such that an adjustment is determined by the Committee to be appropriate to prevent the dilution or enlargement of the benefits or
potential benefits intended to be made available under the Plan, then and in such event: 
 
(i)    An appropriate adjustment shall be made in the maximum number of shares of Common Stock then
subject to being awarded under Stock Options pursuant to the Plan, to the end that the same proportion of the Company’s issued and outstanding shares of Common Stock shall continue to be subject to being so awarded; 
 
(ii)    A similar
adjustment shall be made in the maximum number of shares of Common Stock issuable under Stock Options granted to any individual Participant in any Company fiscal year pursuant to Article III; and 
 
(ii)    Appropriate
adjustments shall be made in the number of shares of Common Stock and the exercise price per share thereof then subject to purchase pursuant to each such Stock Option previously granted and unexercised, to the end that the same proportion of the
Company’s issued and outstanding shares of Common Stock in each instance shall remain subject to purchase at the same aggregate exercise price. 
 
Any fractional shares resulting from any adjustment made pursuant to this Article XIII shall be eliminated for the purposes of such
adjustment. Except as otherwise expressly provided herein, the issuance by the Company of shares of its capital stock of any class, or securities convertible into shares of capital stock of any class, either in connection with direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon conversion of shares or obligations of the Company convertible into such shares or other securities, shall not affect, and no adjustment by reason thereof shall be made with respect
to, the number of or exercise price of shares of Common Stock then subject to outstanding Stock Options granted under the Plan. 
 
ARTICLE XIV 
 
Recapitalization, Merger and Consolidation 
 
(a)    The existence of this Plan and Stock Options granted hereunder
shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger
or consolidation of the 

 

13 

Company, or any issue of bonds, debentures, preferred or prior preference stocks ranking prior to or otherwise affecting the Common Stock or
the rights thereof (or any rights, options or warrants to purchase same), or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise. 
 
(b)    Subject to any required action by the stockholders, if the Company shall be the surviving or resulting corporation in any merger or consolidation, any outstanding Stock Option granted hereunder shall
pertain to and apply to the securities or rights (including cash, property or assets) to which a holder of the number of shares of Common Stock subject to the Stock Option would have been entitled. 
 
(c)    In the event of any
reorganization, merger or consolidation pursuant to which the Company is not the surviving or resulting corporation (or the Company is the surviving corporation but the voting securities of the Company are exchanged for securities, cash, property,
or other consideration of or from any other entity), or of any proposed sale of substantially all of the assets of the Company, there may be substituted for each share of Common Stock subject to the unexercised portions of such outstanding Stock
Option that number of shares of each class of stock or other securities or that amount of cash, property or assets of the surviving or consolidated company which were distributed or distributable to the stockholders of the Company in respect of each
share of Common Stock held by them, such outstanding Stock Options to be thereafter exercisable for such stock, securities, cash or property in accordance with their terms. Notwithstanding the foregoing, however, the Board, in its sole discretion,
may cancel all such Stock Options as of the effective date of any such reorganization, merger or consolidation, or of any such proposed sale of substantially all of the assets of the Company, or of any dissolution or liquidation of the Company, and
either: 
 
(i)    give notice to each holder thereof or his personal representative of its intention to cancel such Stock Options and permit the purchase during the thirty (30) day period next preceding such effective date
of any or all of the shares subject to such outstanding Stock Options, including shares as to which such Stock Options would not otherwise be exercisable; or 
 
(ii)    pay the holder thereof an amount equal to a reasonable estimate of an amount (hereinafter the
“Spread”) equal to the difference between the net amount per share payable in such transaction or as a result of such transaction, less the exercise price of such Stock Options. In estimating the Spread, appropriate adjustments to give
effect to the existence of the Stock Options shall be made, such as deeming the Stock Options to have been exercised, with the Company receiving the exercise price payable thereunder, and treating the shares receivable upon exercise of the Options
as being outstanding in determining the net amount per share. In cases where the proposed transaction consists of the acquisition of assets of the Company, the net amount per share shall be calculated on the basis of the net amount receivable with
respect to shares of Common Stock 
 

14 

upon a distribution and liquidation by the Company after giving effect to expenses and charges, including but not limited to taxes, payable
by the Company before such liquidation could be completed. 
 
(d)    In the event of a Change in Control of the Company, then, notwithstanding any other provision in the Plan to the contrary, all unmatured installments of Stock Options
outstanding shall thereupon automatically be accelerated and exercisable in full. 
 
(e)    Notwithstanding sub-Section (c) above of this Article XIV, in case the Company shall, at any
time while any Stock Option under this Plan shall be in force and remain unexpired, (i) sell all or substantially all of its property or (ii) dissolve, liquidate, or wind up its affairs, then, provided that the Board so determines in its sole
discretion, each Participant may thereafter receive upon exercise hereof (in lieu of each share of Common Stock of the Company which such Participant would have been entitled to receive) the same kind and amount of any securities or assets as may be
issuable, distributable or payable upon any such sale, dissolution, liquidation, or winding up with respect to each share of Common Stock of the Company. In the event that the Company shall, at any time prior to the expiration of any Stock Option,
make any partial distribution of its assets in the nature of a partial liquidation, whether payable in cash or in kind (but excluding the distribution of a cash dividend payable out of retained earnings or earned surplus and designated as such),
then in such event the exercise prices then in effect with respect to each option shall be reduced, as of the payment date of such distribution, in proportion to the percentage reduction in the tangible book value of the shares of the Company’s
Common Stock (determined in accordance with generally accepted accounting principles) resulting by reason of such distribution; provided, that in no event shall any adjustment of exercise prices in accordance with the terms of the Plan result in any
exercise prices being reduced below the par value per share of the Common Stock. 
 
(f)    Upon the occurrence of each event requiring an adjustment of the exercise price and/or the number of shares purchasable pursuant to Stock Options granted pursuant to the
terms of this Plan, the Company shall mail forthwith to each Participant a copy of its computation of such adjustment which shall be conclusive and shall be binding upon each such Participant, except as to any Participant who contests such
computation by written notice to the Company within thirty (30) days after receipt thereof by such Participant. 
 
ARTICLE XV 
 
Options in Substitution for Stock Options Granted by Other Corporations 
 
Stock Options may be granted under the Plan from time to time in substitution for such stock options held by employees of a corporation
who become or are about to become employees of the Company or a Subsidiary as the result of a merger or consolidation of the employing corporation with the Company or a Subsidiary or the acquisition by either of the foregoing of stock of the
employing corporation as the result of which it becomes a Subsidiary. The terms and 

 

15 

conditions of the substitute options so granted may vary from the terms and conditions set forth in this Plan to such extent as the Committee
at the time of grant may deem appropriate to conform, in whole or in part, to the provisions of the options in substitution for which they are granted. 
 
ARTICLE XVI 
 
Miscellaneous Provisions 
 
16.1    Exercise of Stock Options.    A Stock Option granted
under the Plan may be exercised during its option period, at such times and in such amounts, in accordance with the terms and conditions and subject to such restrictions as are set forth herein and in the applicable stock option agreement.

 
16.2    Non-Assignability.    No Stock Option granted to a Participant may be transferred or assigned, other than (i) by will or the laws of descent and
distribution or (ii) pursuant to the terms of a qualified domestic relations order (as defined in Section 401(a)(13) of the Code or Section 206(d)(3) of the Employee Retirement Income Security Act of 1974, as amended), provided, that in the case of
an Incentive Stock Option, such transfer or assignment may occur only to the extent it will not result in disqualifying such option as an incentive stock option under Section 422 of the Code, or any successor provision. Subject to the foregoing,
during a Participant’s lifetime, Stock Options granted to a Participant may be exercised only by the Participant or, provided the particular stock option agreement so provides, by the Participant’s guardian or legal representative.

 
16.3    Investment Intent.    The Company may require that there be presented to and filed with it by any Participant(s) under the Plan, such evidence as it
may deem necessary to establish that the Stock Options granted or the shares of Common Stock to be purchased or acquired hereunder are being acquired for investment and not with a view to their distribution. 
 
16.4    No
Right to Continue Employment.    Nothing in the Plan or in any Stock Option confers upon any employee the right to continue in the employ of the Company or interferes with or restricts in any way the right of the Company
to discharge any employee at any time (subject to any contract rights of such employee). 
 
16.5    Stockholders’ Rights.    The holder of a Stock Option shall have none of the rights or privileges of a
stockholder except with respect to shares which have been actually issued. 
 
16.6    Tax Requirements—Stock Options.    The obligations of the Company under the Plan shall be conditional on
compliance with all applicable withholding tax obligations as required by the Code and under applicable state and local law and regulation. Any employee who exercises any Stock Option shall be required to pay the Company the amount of all taxes
which the Company is required to withhold as a result of the exercise of the Stock Option. With respect to an Incentive Stock Option, in the event of a subsequent disqualifying disposition of Common Stock within the meaning of Section 422 of the
Code, such payment of taxes may be made in cash, by check or through the delivery of shares of Common Stock which the employee 

 

16 

then owns, which shares have an aggregate Fair Market Value equal to the required withholding payment, or any combination thereof. With
respect to the exercise of a Nonqualified Stock Option, the Participant’s obligation to pay such taxes may be satisfied by the following, or any combination thereof: (i) the delivery of cash to the Company in an amount that satisfies the
required tax withholding obligation of the Company; (ii) the actual delivery by the exercising Participant to the Company of shares of Common Stock which the Participant owns (excluding any Common Stock acquired within six months prior to the date
of exercise), which shares so delivered have an aggregate Fair Market Value which equals or exceeds (to avoid the issuance of fractional shares) the required tax withholding payment; or (iii) the company’s withholding of a number of shares to
be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the statutory minimum requirement for tax withholding payment. Any such withholding payments with
respect to the exercise of a Nonqualified Stock Option made by a Participant in cash or by actual delivery of shares of Common Stock shall be required to be made within thirty (30) days after the delivery to the Participant of any certificate
representing the shares of Common Stock acquired upon exercise of the Stock Option. 
 
16.7    Indemnification of Board and Committee.    No member of the Board or the Committee, nor any officer, employee or agent
of the Company acting on behalf of the Board or the Committee, shall be personally liable for any action, determination, or interpretation taken or made in good faith with respect to the Plan, and all members of the Board or the Committee and each
and every officer, employee or agent of the Company acting on their behalf shall, to the fullest extent permitted by law, be fully indemnified and protected by the Company in respect of any such action, determination or interpretation. Each member
of the Board and the Committee shall, in the performance of his or her duties under the Plan, be fully protected in relying in good faith upon the audited and unaudited financial statements of the Company as contemplated by the terms of the Plan.

 
16.8    Effect on Participation.    The grant of a Stock Option to a Participant shall not be deemed either to entitle the Participant to, or to disqualify
the Participant from, as the case may be, participation in any other future grant of Stock Options under the Plan or otherwise, or in any other compensation or benefit plan of the Company or in any of its Subsidiaries currently existing or hereafter
established. 
 
16.9    Other Compensation Agreements.    Nothing contained in this Plan shall prevent the Board from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases. 
 
16.10    Gender and
Number.    Where the context permits, words in the masculine gender shall include the feminine and neuter genders, the plural form of a word shall include the singular form, and the singular form of a
word shall include the plural form. 
 
* * * * * * *
* * 
 

17 

 
IN WITNESS
WHEREOF, the Company has caused this instrument to be executed as of the 12th day of February, 2001 by its Chief Executive Officer pursuant to prior action taken by the Board. 
 
 

	 IMCO RECYCLING INC.

	
	 By:
	 	 /s/    Don v.
Ingram        

	 	 	 Don V. Ingram
 Chief Executive Officer

 

	 Attest:

	
	 /s/    Paul V.
Dufour        

	 Paul V.
Dufour                                    
 Secretary

 

18

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