Document:

Form of incentive stock option grant

 Exhibit 10.3 
 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. 
 INCENTIVE STOCK
OPTION AGREEMENT 
  

	1.	Grant of Options 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC., a Delaware corporation (the “Company”), hereby grants to
«FirstName» «LastName» (the “Optionee”), «NumberofShares» Options (the “Options”), pursuant to the Company’s Omnibus Incentive Plan as amended (the “Plan”), to
purchase an aggregate of «NumberofShares» shares of common stock, $.001 par value per share (“Common Stock”), of the Company at a price of $         per share
(the “Exercise Price Per Share”), purchasable as set forth in and subject to the terms and conditions of this Option Agreement and the Plan. All undefined capitalized terms herein shall have the same meaning as set forth in the Plan.

  

	2.	Incentive Stock Options 

These Options are intended to qualify as incentive stock options (“Incentive Stock Options”) within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”). 
  

	3.	Exercise of Options and Provisions for Termination 

 (a) Exercisability of Options. The Options shall become exercisable and option shares may be purchased based on the number of full years of service for the Company or a Subsidiary that have expired
since the date of grant (set forth on the signature page hereof), in accordance with the following schedule: 
  

			
	 Number of Years of Service Since First Date of Grant
	  	Percentage of Option 
Shares
Available
for Purchase (Cumulative)
	 1
	  	25%
	 2
	  	50%
	 3
	  	75%
	 4
	  	100%

 Notwithstanding the foregoing, the Options shall not be exercisable unless such exercise is in compliance with the
Securities Act of 1933, as amended (the “Securities Act”), all other applicable laws and regulations (including state securities laws) and the requirements of any securities exchange on which the shares of Common Stock are listed.

 (b) Expiration Date. Except as otherwise provided in this Option Agreement or the Plan, the Options may not be exercised after the
date (hereinafter the “Expiration Date”) that is the tenth anniversary of the date of grant, or, if the Optionee is a 10% Stockholder as described in Section 6 of the Plan, the fifth anniversary of the date of grant.

 (c) Effect of Termination of Employment. The Options may not be exercised by an Optionee unless, at the time of such exercise, the
Optionee is, and continuously since the date of grant of his or her Options has been, an employee of the Company or a Subsidiary, except that subject to the Options vesting as of the date of termination of employment: 

(i) if the Optionee ceases to be an employee of the Company or a Subsidiary for any reason other than death or disability or a discharge
for “cause” (as defined in (iv) below), the right to exercise the Options shall terminate three months after such cessation; 
 (ii) if the Optionee dies while an employee of the Company or a Subsidiary, or within three months after the Optionee ceases to be such an employee, the Options may be exercised by the administrator of
the Optionee’s estate, or by the person to whom the Options are transferred by will or the laws of descent and distribution, within the period of one year after the date of death; however, Options exercised more than three months after the
Optionee ceased to be an employee may not qualify for treatment as Incentive Stock Options; 

 (iii) if the Optionee becomes disabled (within the meaning of the Plan) while an employee of
the Company or a Subsidiary, the Options may be exercised within the period of one year after the date the Optionee ceases to be an employee of the Company or Subsidiary because of such disability; and 

(iv) if the Optionee, prior to the expiration date of the Options, ceases his or her services as an employee of the Company or a
Subsidiary, because he or she is discharged for “cause” (as defined below), the right to exercise the Options shall terminate immediately upon such cessation of such services. “Cause” shall mean: willful misconduct in connection
with the Optionee’s performance of services for the Company or willful failure to perform his or her services in the best interest of the Company, as determined by the Board of Directors, which determination shall be conclusive; 

provided, however, that in no event may the Options be exercised after the expiration date thereof. 

(d) Exercise Procedure. Subject to the conditions set forth in this Agreement and, if applicable, Section 6 of the Plan, the Options shall be
exercised by the Optionee’s delivery of written notice of exercise to the Secretary of the Company, specifying the number of shares to be purchased and the Exercise Price Per Share to be paid therefor and accompanied by payment in accordance
with Section 4 hereof. The Optionee may purchase less than the total number of shares covered hereby, provided that no exercise of less than all the Options may be for less than 100 whole shares. 

 

	4.	Payment of Purchase Price 

 Payment of the
Exercise Price Per Share for shares purchased upon exercise of an Option shall be made by delivery to the Company of the purchase price, payable in cash (by check) or any other method of payment that is permitted by the Plan and specifically
authorized by the Committee on or before the time of exercise. 
  

	5.	Delivery of Shares 

 The Company shall,
upon payment of the Exercise Price Per Share for the number of shares purchased and paid for, make prompt delivery of such shares to the Optionee. No shares shall be issued and delivered upon exercise of an Option unless and until, in the opinion of
counsel for the Company, any applicable registration requirements of the Securities Act, any applicable listing requirements of any national securities exchange on which stock of the same class is then listed, and any other requirements of law,
including state securities laws, or of any regulatory bodies having jurisdiction over such issuance and delivery, shall have been fully complied with. 
  

	6.	Non-transferability of Options 

 Except as
provided in Section 3(c)(ii) hereof, the Options are personal and no rights granted hereunder may be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise), except by will or the laws of descent and
distribution, nor shall any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of an Option or of such rights contrary to the provisions hereof, or upon
the levy of any attachment or similar process upon any Option or such rights, this Option Agreement and such rights shall, at the election of the Company, become null and void. 

 

	7.	No Special Employment Rights 

 Nothing
contained in the Plan or this Option Agreement shall be construed or deemed by any person under any circumstances to bind the Company to continue the services of the Optionee for the period within which the Options may be exercised. However, during
the period in which the Optionee is rendering services, the Optionee shall render diligently and faithfully the services which are assigned to him or her from time to time by the Board of Directors or by the executive officers of the Company and
shall at no time take any action which directly or indirectly would be inconsistent with the best interests of the Company. 

  
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	8.	Rights as a Stockholder 

 The Optionee
shall have no rights as a stockholder with respect to any shares which may be purchased by exercise of the Options unless and until a certificate representing such shares is duly issued to the Optionee. Except as otherwise expressly provided in the
Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date on such stock certificate. 
  

	9.	Recapitalization 

 In the event that the
outstanding shares of Common Stock of the Company are changed into or exchanged for a different number or kind of shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, stock dividend, combination
or subdivision, an appropriate and proportionate adjustment shall be made in the number and kind of shares subject to the Plan and in the number, kind, and per share exercise price, of shares subject to unexercised Options or portions thereof
granted prior to such adjustment. Any such adjustment to an outstanding Option shall be made without change in the total price applicable to the unexercised portion of such Option as of the date of the adjustment. No such adjustment shall be made
with respect to an Option that would, within the meaning of any applicable provisions of the Code, constitute a modification, extension or renewal of any Option or a grant of additional benefits to the Optionee. 

 

	10.	Reorganization 

 In the event the Company
is merged or consolidated with another entity and the Company is not a surviving entity, or in the event all or substantially all of the assets or more than 20% of the outstanding voting stock of the Company entitled to vote for directors is
acquired by any other entity or person other than an Affiliate, or in the event of a reorganization or liquidation of the Company, prior to the Expiration Date or termination of this Option Agreement, the Optionee shall, with respect to the Options
or any unexercised portion hereof, be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 14 of the Plan. 
  

	11.	Withholding Taxes 

 The Company’s
obligation to deliver shares upon the exercise of an Option shall be subject to the Optionee’s satisfaction of all applicable federal, state and local income and employment tax withholding requirements (“Withholding Taxes”) with
respect to the Option. The Optionee shall pay the Withholding Taxes to the Company in cash prior to the issuance, or release from escrow, of shares of Common Stock. In satisfaction of the Withholding Taxes, the Committee may, in its discretion and
subject to compliance with applicable securities laws and regulations, withhold a portion of the shares issuable to the Optionee upon exercise of the Option having an aggregate Fair Value on the date preceding the date of such issuance equal to the
Withholding Taxes. 
  

	12.	Optionee Representations; Legend 

 (a)
Representations. The Optionee represents, warrants and covenants that he or she has had such opportunity as he or she has deemed adequate to obtain from representatives of the Company such information as is necessary to permit the Optionee to
evaluate the merits and risks of his or her investment in the Company. The Optionee understands that there may be restrictions on his or her ability to resell any shares acquired on exercise of an Option, including insider trading laws and the
Company’s insider trading policy, as well as other restrictions that will apply if the Optionee is an “affiliate” of the Company. By making payment upon exercise of an Option, the Optionee shall be deemed to have reaffirmed, as of the
date of such payment, the representations made in this Section 12. 

  
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 (b) Legend on Stock Certificate. The Optionee understands that, any shares of Common Stock acquired
upon exercise of an Option may not have been registered under the Securities Act nor the securities laws of any state. Accordingly, unless all such registrations are then in effect, all stock certificates representing shares of Common Stock issued
to the Optionee upon exercise of an Option shall have affixed thereto a legend substantially in the following form, in addition to any other legends required by applicable state law: 

“THE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR THE SECURITIES LAW OF ANY STATE. CONSEQUENTLY,
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, OR AN EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.” 
  

	13.	Limitation on Disposition of Incentive Stock Option Shares 

 It is understood and intended that these Options shall qualify as Incentive Stock Options, as defined in Section 422 of the Code. Accordingly, the Optionee understands that in order to obtain the
benefits of an Incentive Stock Options under Section 421 of the Code, no sale or other disposition may be made of any shares acquired upon exercise of an Option within the one year period beginning on the day after the day of the issuance of
such shares to him or her, nor within the two year period beginning on the day after the date of grant of such Option. If the Optionee disposes of any such shares (whether by sale, exchange, gift, transfer or otherwise) prior to the expiration of
either such periods, he or she will notify the Company in writing within ten days after such disposition. 
  

	14.	Miscellaneous 

 In the event that the Plan
terminates prior to the expiration date of the Options granted hereunder, this Option Agreement shall incorporate by reference all applicable provisions of the Plan until the earlier of 1. the close of business on the day the Option(s) granted
hereunder expire, or (ii) the date on which all shares available for issuance hereunder shall have been issued pursuant to the exercise of Options granted hereunder. 
 All notices under this Option Agreement shall, unless otherwise provided herein, be mailed or delivered by hand to the parties at their respective addresses set forth beneath their names below or at such
other address as may be designated in writing by either of the parties to the other. 
 This Option Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware. 
 This Option Agreement shall be binding upon and inure to the heirs, successors and
assigns of the Optionee (subject, however, to the limitations set forth herein with respect to assignment of the Options or rights therein) and the Company, and shall be construed in a manner that is consistent with the provisions of the Plan.

  

							
	Date of Grant:	 		 	UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
				
	  
	 		 	By:	 	  

				
		 		 	Name:	 	  

				
		 		 	Title:	 	  

				
		 		 	Address:	 	  

  
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 OPTIONEE’S ACCEPTANCE 
 The undersigned hereby accepts the foregoing Option Agreement and agrees to the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s Omnibus Incentive
Plan. The undersigned understands and agrees that the Option Agreement is not meant to interpret, extend, or change the Plan in any way, nor to represent the full terms of the Plan. If there is any discrepancy, conflict or omission between this
Option Agreement and the provisions of the Plan as interpreted by the Company, the provisions of the Plan shall govern. 
  

			
	OPTIONEE:
		
	By:	 	  

		
	Name:	 	«FirstName» «LastName»
		
	Title:	 	«JobTitle»
		
	Address:	 	«Address1»
		 	«Address2»
		 	«City», «State» «PostalCode»

  
 5Form of non-statutory director stock option grant

 Exhibit 10.4 
 UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC. 
 NON-STATUTORY STOCK OPTION
AGREEMENT FOR 
 ELIGIBLE DIRECTORS 
  

	1.	Grant of Options 

UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC., a Delaware corporation (the “Company”), hereby grants to
«Name» (the “Optionee”), pursuant to the Company’s Omnibus Incentive Plan (the “Plan”) as amended,                 Options
(the “Options”), to purchase an aggregate of 10,000 shares of common stock, $.001 par value per share (“Common Stock”), of the Company at a price of $            
per share (the “Exercise Price Per Share”), purchasable as set forth in and subject to the terms and conditions of this Option Agreement and the Plan. All undefined capitalized terms herein shall have the same meaning as set forth in
the Plan. 
  

	2.	Exercise of Options and Effect of Termination of Services or Death. 

 1. Exercisability of Options. The Options shall become exercisable and option shares may be purchased based on the number of full years of service for the Company or a Subsidiary that have
expired since the date of grant (set forth on the signature page hereof), in accordance with the following: 
 Director Options shall
vest based on years of service according to the following schedule: 
  

			
	 Number of Years of Service Since First Date of Grant
	  	Percentage of Award (as stated in item 2.1.B.) Available
for Exercise
(Cumulative)
	 1
	  	33 1/3%
	 2
	  	66 2/3%
	 3
	  	100%

 Notwithstanding the foregoing, the Options shall not be exercisable unless such exercise is in compliance with the
Securities Act of 1933, as amended (the “Securities Act”), all other applicable laws and regulations (including state securities laws) and the requirements of any securities exchange on which the shares of Common Stock are listed.

 2. Expiration Date. Except as otherwise provided in this Option Agreement or the Plan, the Options may not be exercised after
the date (hereinafter the “Expiration Date”) that is the tenth anniversary of the date of grant. 

3. Effect of Termination of Services or Death. If the Optionee ceases to serve as a director of the Company or a Subsidiary,
the Options that have been previously granted to the Optionee and that are vested as of the date of such cessation may be exercised by the Optionee after the date such Optionee ceases to be a director of the Company or Subsidiary. If the Optionee
dies while a director of the Company or a Subsidiary, the Options that have been previously granted to the Optionee and that are vested as of the date of such death may be exercised by the administrator of the Optionee’s estate, or by the
person to whom such Options are transferred by will or the laws of descent and distribution. In no event, however, may any Option be exercised after the Expiration Date of such Option. 

4. Exercise Procedure. Subject to the conditions set forth in this Agreement and, if applicable, Section 7 of the Plan, the Options shall
be exercised by the Optionee’s delivery of written notice of exercise to the Secretary of the Company, specifying the number of shares to be purchased and the Exercise Price Per Share to be paid therefor and accompanied by payment in accordance
with Section 3 hereof. The Optionee may purchase less than the total number of shares covered hereby, provided that no exercise of less than all the Options may be for less than 100 whole shares. 

	3.	Payment of Purchase Price 

 Payment
of the Exercise Price Per Share for shares purchased upon exercise of an Option shall be made by delivery to the Company of the purchase price, payable in cash (by check) or any other method of payment that is permitted by the Plan. 

 

	4.	Delivery of Shares 

 The Company
shall, upon payment of the Exercise Price Per Share for the number of shares purchased and paid for, make prompt delivery of such shares to the Optionee. No shares shall be issued and delivered upon exercise of an Option unless and until, in the
opinion of counsel for the Company, any applicable registration requirements of the Securities Act, any applicable listing requirements of any national securities exchange on which stock of the same class is then listed, and any other requirements
of law, including state securities laws, or of any regulatory bodies having jurisdiction over such issuance and delivery, shall have been fully complied with. 
  

	5.	Non-transferability of Options 

Except as provided in the Plan, the Options are personal and no rights granted hereunder may be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise), except by will or the laws of descent and distribution, nor shall any such rights be subject to execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or
otherwise dispose of an Option or of such rights contrary to the provisions hereof, or upon the levy of any attachment or similar process upon any Option or such rights, this Option Agreement and such rights shall, at the election of the Company,
become null and void. 
  

	6.	No Special Directorship Rights 

Nothing contained in the Plan or in this Option Agreement shall constitute evidence of any agreement or understanding, express or implied, that the
Optionee has a right to continue as a director for any period of time. 
  

	7.	Rights as a Stockholder 

 The
Optionee shall have no rights as a stockholder with respect to any shares which may be purchased by exercise of the Options unless and until a certificate representing such shares is duly issued to the Optionee. Except as otherwise expressly
provided in the Plan, no adjustment shall be made for dividends or other rights for which the record date is prior to the date on such stock certificate. 
  

	8.	Recapitalization 

In the event that the outstanding shares of Common Stock of the Company are changed into or exchanged for a different number or kind of
shares or other securities of the Company by reason of any recapitalization, reclassification, stock split, stock dividend, combination or subdivision, an appropriate and proportionate adjustment shall be made in the number and kind of shares
subject to the Plan and in the number, kind, and per share exercise price, of shares subject to unexercised Options or portions thereof granted prior to such adjustment. Any such adjustment to an outstanding Option shall be made without change in
the total price applicable to the unexercised portion of such Option as of the date of the adjustment. 
  

	9.	Reorganization 

 In the event the
Company is merged or consolidated with another entity and the Company is not a surviving entity, or in the event all or substantially all of the assets or more than 20% of the outstanding voting stock of the Company entitled to vote for directors is
acquired by any other entity or person other than an Affiliate, or in the event of a reorganization or liquidation of the Company, prior to the Expiration Date or termination of this Option Agreement, the Optionee shall, with respect to the Options
or any unexercised portion hereof, be entitled to the rights and benefits, and be subject to the limitations, set forth in Section 14 of the Plan. 

  
 2 

	10.	Withholding Taxes 

 The
Company’s obligation to deliver shares upon the exercise of an Option shall be subject to the Optionee’s satisfaction of all applicable federal, state and local income and employment tax withholding requirements, if any. 

 

	11.	Optionee Representations; Legend 

1. Representations. The Optionee represents, warrants and covenants that he or she has had such opportunity as he or she has deemed adequate
to obtain from representatives of the Company such information as is necessary to permit the Optionee to evaluate the merits and risks of his or her investment in the Company. The Optionee understands that there may be restrictions on his or her
ability to resell any shares acquired on exercise of an Option, including insider trading laws and the Company’s insider trading policy, as well as other restrictions that will apply if the Optionee is an “affiliate” of the Company.
By making payment upon exercise of an Option, the Optionee shall be deemed to have reaffirmed, as of the date of such payment, the representations made in this Section 11. 
 2. Legend on Stock Certificate. The Optionee understands that, any shares of Common Stock acquired upon exercise of an Option may not have been registered under the Securities Act nor the
securities laws of any state. Accordingly, unless all such registrations are then in effect, all stock certificates representing shares of Common Stock issued to the Optionee upon exercise of an Option shall have affixed thereto a legend
substantially in the following form, in addition to any other legends required by applicable state law: 
 “THE
SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR THE SECURITIES LAW OF ANY STATE. CONSEQUENTLY, THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION, OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH LAWS.” 
  

	12.	Miscellaneous 

 In the event
that the Plan terminates prior to the expiration date of the Options granted hereunder, this Option Agreement shall incorporate by reference all applicable provisions of the Plan until the earlier of 1.) the close of business on the day the
Option(s) granted hereunder expire, or 2.) the date on which all shares available for issuance hereunder shall have been issued pursuant to the exercise of Options granted hereunder. 
 Except as provided herein or in the Plan, this Option Agreement may not be amended or otherwise modified unless evidenced in writing and signed by the Company and the Optionee. 

All notices under this Option Agreement shall, unless otherwise provided herein, be mailed or delivered by hand to the parties at their respective
addresses set forth beneath their names below or at such other address as may be designated in writing by either of the parties to the other. 

This Option Agreement shall be governed by and construed in accordance with the laws of the State of Delaware. 

This Option Agreement shall be binding upon and inure to the heirs, successors and assigns of the Optionee (subject, however, to the limitations set
forth herein with respect to assignment of the Options or rights therein) and the Company, and shall be construed in a manner that is consistent with the provisions of the Plan. 

  
 3 

							
		 		 	Date of Grant:	 	  

		 		 	             UNIVERSAL STAINLESS & ALLOY

            PRODUCTS,
INC.

  

							
	                , 20    	 		 		 	
				
		 		 	By:	 	  

				
		 		 	Name:	 	  

				
		 		 	Title:	 	  

				
		 		 	Address:	 	  

  

			
	Optionee (for notice purposes)
		
	Name	 	 «Name»

		
	Address:	 	 «Address»

  
 4 

 OPTIONEE’S ACCEPTANCE 
 The undersigned hereby accepts the foregoing Option Agreement dated                     , and agrees to
the terms and conditions thereof. The undersigned hereby acknowledges receipt of a copy of the Company’s Omnibus Incentive Plan. The undersigned understands and agrees that the Option Agreement is not meant to interpret, extend, or change the
Plan in any way, nor to represent the full terms of the Plan. If there is any discrepancy, conflict or omission between this Option Agreement and the provisions of the Plan as interpreted by the Company, the provisions of the Plan shall govern.

  

			
		 	OPTIONEE:
		
	By:	 	  

		
	Name:	 	 «Name»

		
	Title:	 	 Director

		
	Address:	 	 «Address»

  
 5

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