OLYMPIC STEEL, INC. 2007
OMNIBUS INCENTIVE PLAN
PERFORMANCE-EARNED RESTRICTED
STOCK UNIT (PERS UNIT) AGREEMENT
THIS
PERFORMANCE-EARNED RESTRICTED STOCK UNIT AGREEMENT (the
“Agreement”), is entered into as of this 2nd day of
January, 2009 (the “Effective Date”), by and between
Olympic Steel, Inc., an Ohio corporation (the
“Company”), and ___________________ (the
“Grantee”).
WHEREAS, the
Compensation Committee of the Board of Directors (the
“Compensation Committee”) administers the Olympic
Steel, Inc. 2007 Omnibus Incentive Plan (the “Plan”);
and
WHEREAS, the
Committee desires to provide the Grantee with Performance-Earned
Restricted Stock Units under the Plan upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE,
the Company and the Grantee agree as follows:
1.
Definitions . Unless the context otherwise indicates, the
following words used herein shall have the following meanings
wherever used in this Agreement;
(a) The words
“Good Cause” mean a reasonable determination by the
Board made in good faith (without the participation of the
Grantee), pursuant to the exercise of its business judgment, that
any one of the following events has occurred:
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(i)
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Grantee is found by the Board to
have engaged in (1) willful misconduct, (2) willful or
gross neglect, (3) fraud, (4) misappropriation, or
(5) embezzlement in the performance of his duties as an
employee of the Company;
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(ii)
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Grantee has materially breached any
restrictive covenant between him and the Company including, but not
limited to, any restrictive covenants regarding non-competition,
non-solicitation or confidentiality or any material provision of
any employment agreement with the Company and fails to cure such
breach within ten (10) days following written notice from the
Company specifying such breach which notice from the Company shall
be provided within thirty (30) days after said
breach;
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(iii)
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Grantee is found by the Board to
have failed to provide reasonable cooperation with any federal
government or other governmental regulatory investigation, the
reasonableness of such cooperation to be determined by reference to
statutory and regulatory authorities, Federal Sentencing
Guidelines, and relevant case law interpretations;
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(iv)
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Grantee signs or certifies
statements required to be made pursuant to Sarbanes-Oxley
Sections 302 and 906, or other similar rules or
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regulations then in effect, which
turn out to be false or inaccurate in any material respect;
provided, however, that the Board has made a reasonable
determination in good faith that the Grantee knew or should have
known that such statements were false or inaccurate in any material
respect;
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(v)
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Grantee has been indicted by a state
or federal grand jury with respect to a felony, a crime of moral
turpitude or any crime involving the Company (other than pursuant
to actions taken at the direction or with the approval of the
Board) and a special committee of the Board, chaired by an Outside
Director appointed by the Chair of the Audit Committee, considers
the matter, makes a recommendation to the Board to terminate
Grantee’s employment for Cause, and the Board concurs in that
recommendation; or
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(vi)
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Grantee is found by the Board to
have engaged in a material violation of the Code of Conduct of the
Company as then in effect.
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(b) The words
“Performance Period” mean the period set forth on
Exhibit A of this Agreement.
(c) The words
“Performance Requirements” mean the performance
requirements as set forth on Exhibit A of this
Agreement.
Notwithstanding
this Section 1 and, unless otherwise specified in the
Agreement, capitalized terms shall have the meanings attributed to
them under the Plan.
2. Grant
of Performance-Earned Restricted Stock Units . As of the
Effective Date, the Company grants to the Grantee, upon the terms
and conditions set forth in this Agreement, the right to receive
Common Shares after the completion of the Performance Period
provided that the Performance Requirements have been achieved at
the end of the Performance Period as set forth on Exhibit A
(“Performance-Earned Restricted Stock Units” or
“PERS Units”). The PERS Units are granted in accordance
with, and subject to, all the terms, conditions and restrictions of
the Plan, which is hereby incorporated by reference in its
entirety. The Grantee irrevocably agrees to, and accepts, the
terms, conditions and restrictions of the Plan and this Agreement
on his own behalf and on behalf of any heirs, successors and
assigns.
3.
Restrictions on PERS Units . The Grantee cannot sell,
transfer, assign, hypothecate or otherwise dispose of the PERS
Units or pledge them as collateral for a loan. In addition, the
PERS Units will be subject to such other restrictions as the
Compensation Committee deems necessary or appropriate.
4.
Extraordinary Dividends on PERS Units. If Common Shares are
issued after the Performance Period, they will be credited with any
extraordinary dividends paid during the period commencing with the
beginning date of the Performance Period and ending on the date of
issuance of the Common Shares, which shall be paid only in the
event that the Performance Requirements are satisfied. If the
Performance Requirements are not satisfied, no extraordinary
dividends shall be paid. The Compensation Committee shall have the
sole authority to determine whether a dividend is extraordinary and
its decision shall be final and conclusive with respect to payment
of extraordinary dividends under this Agreement.
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5.
Termination of Employment .
(a) Normal or
Early Retirement, Death, or Total Disability . If the Grantee
terminates employment as a result of a Normal or Early Retirement,
death or Disability while an employee of the Company, its
Subsidiaries or Affiliates or dies or becomes totally disabled
within thirty (30) days of the Grantee’s having ceased
to be such an employee by reason of involuntary termination of
employment not for Good Cause and prior to the last day of the
Performance Period, the Grantee (or his or her Beneficiary or
Beneficiaries) shall be entitled to a prorated issuance of Common
Shares calculated by multiplying (x) by
(y) where:
(x) is the number
of Common Shares, if any, that would have been earned by the
Grantee had he not had such termination of employment subject to
the satisfaction of the Performance Requirements set forth on
Exhibit A; and
(y) is the number
of months that the Grantee was employed (rounded up to the nearest
whole number) during the Performance Period divided by thirty-six
(36).
The
Compensation Committee shall determine in its sole and exclusive
discretion whether the Grantee’s employment with the Company,
its Subsidiaries and Affiliates has terminated because of his or
her Disability. The issuance of Common Shares, if any, for the
pro-rated award shall be at the same time as the issuance of Common
Shares under Section 7 of this Agreement.
(b) Reasons
Other Than Normal or Early Retirement, Death or Disability . If
the Compensation Committee determines in its sole and exclusive
discretion that the Grantee’s employment with the Company,
its Subsidiaries and Affiliates has terminated prior to the end of
the Performance Period for reasons other than those described in
subsection (a) above, the Grantee will forfeit his PERS Units
and any right to receive Common Shares under this Agreement except
that in the case of an involuntary termination of employment not
for Good Cause, the PERS Units and issuance of Common Shares may
not be forfeited if so provided pursuant to any severance agreement
entered into between the Grantee and the Company. If the PERS Units
are forfeited, the Grantee will have no further interests under
this Agreement.
6. Change
in Control . If a Change in Control which satisfies both a
Change in Control as defined in the Plan and a change in control
event as defined in Treasury Regulation Section 1.409A-3(i)(5)
has occurred prior to the end of the Performance Period,
then:
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(a)
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the
Performance Requirements shall be deemed to have been satisfied at
the greater of either the target level of the Performance
Requirements as set forth on Exhibit A as if the entire
Performance Period had elapsed or the level of actual achievement
of the Performance Requirements as of the date of the Change in
Control; and
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(b)
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the
appropriate amount of Common Shares, or if the Grantee so elects,
cash, determined in accordance with subparagraph (a) above
shall be issued or paid to the Grantee not later than 30 days
after the date of the Change in Control.
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In the event
there is a Change in Control which does not satisfy a change in
control event as defined in Treas. Reg. § 1.409A-3(i)(5), then
this Section 6 shall not have any force or effect and the
other Sections of this Agreement will control.
7.
Issuance of Common Shares . As soon as practicable after the
satisfaction of the Performance Requirements:
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(a)
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with respect to Common Shares earned
under Section 5 or 6 above, the Company will immediately
deliver to the Grantee (or his or her Beneficiary or Beneficiaries)
the Common Shares to which Grantee is entitled free and clear of
any restrictions (except any applicable securities law
restrictions); and
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(b)
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with respect to Common Shares
otherwise earned under this Agreement, the Company will issue to
the Grantee the Common Shares to which Grantee is entitled subject
to the one-year no sale restriction set forth in Section 8
below and any applicable securities law restrictions.
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Notwithstanding
anything in this Agreement to the contrary, Common Shares will be
issued not later than two and one-half (2 1/2) months after the
year in which the Performance Requirements are
satisfied.
8.
One-Year Holding Period for Common Shares. Except as elected
by the Grantee to satisfy withholding tax obligations as set forth
at the end of this Agreement, Grantee agrees to not sell, transfer,
or otherwise dispose of the Common Shares issued pursuant to this
Agreement during the period beginning on the last day of the
Performance Period and ending on the first anniversary of such
date; provided, however, that such one year holding period shall
not apply if the Grantee is entitled to Common Shares as a result
of Normal or Early Retirement, Death or Total Disability pursuant
to Section 5(a) or a Change in Control pursuant to Section 6
above. Any such Common Shares issued to the Grantee will bear a
legend specifying the one-year no sale restriction. If the Company
so directs, the Common Shares may be held in escrow by the Company
or a third party designated by the Company until the lapse of the
one year holding period.
9. Voting
Rights. The Grantee will not have any voting rights as a result
of the award of the PERS Units and shall only have the right to
vote Common Shares once they have been actually issued.
10.
Designation of Beneficiary . By properly executing and
delivering a Designation of Beneficiary Form to the Company, the
Grantee may designate an individual or individuals as his or her
Beneficiary or Beneficiaries under the Plan. In the event that the
Grantee fails to properly designate a Beneficiary, his or her
interests under the Plan will pass to the person or persons in the
first of the following classes in which there are any survivors:
(i) spouse at the time of death; (ii) issue, per
stirpes ; (iii) parents; and (iv) the executor or
administrator of estate. Except as the Company may determine in its
sole and exclusive discretion, a properly completed Designation of
Beneficiary Form shall be deemed to revoke all prior designations
upon its receipt and approval by the Designated
Representative.
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11.
Non-Transferability and Legends . When issued, if the Common
Shares have not been registered under the Securities Act of 1933,
as amended (the “Act”), they may not be sold,
transferred or otherwise disposed of unless a registration
statement und
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