SCHUFF STEEL COMPANY
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN. The purpose of this 1997 Stock Option Plan, as
amended (the 'Plan'), of Schuff Steel Company, an Arizona corporation
('Company'), is to provide the Company with a means of attracting and retaining
the services of highly motivated and qualified directors and key personnel. The
Plan is intended to advance the interests of the Company by affording to
directors and key employees, upon whose skill, judgment, initiative and efforts
the Company is largely dependent for the successful conduct of its business, an
opportunity for investment in the Company and the incentives inherent in stock
ownership in the Company. In addition, the Plan contemplates the opportunity for
investment in the Company by employees of companies that do business with the
Company. For purposes of this Plan, the term Company shall include subsidiaries,
if any, of the Company.
2. LEGAL COMPLIANCE. It is the intent of the Plan that all options
granted under it ('Options') shall be either 'Incentive Stock Options' ('ISOs'),
as such term is defined in Section 422 of the Internal Revenue Code of 1986, as
amended ('Code'), or non-qualified stock options ('NQOs'); provided, however,
ISOs shall be granted only to employees of the Company. An Option shall be
identified as an ISO or an NQO in writing in the document or documents
evidencing the grant of the Option. All Options that are not so identified as
ISOs are intended to be NQOs. In addition, the Plan provides for the grant of
NQOs to employees of companies that do business with the Company. It is the
further intent of the Plan that it conform in all respects with the requirements
of Rule 16b-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended ('Rule 16b-3'). To the extent that any aspect
of the Plan or its administration shall at any time be viewed as inconsistent
with the requirements of Rule 16b-3 or, in connection with ISOs, the Code, such
aspect shall be deemed to be modified, deleted or otherwise changed as necessary
to ensure continued compliance with such provisions.
3. ADMINISTRATION OF THE PLAN.
3.1 PLAN COMMITTEE. The Plan shall be administered by the Board
of Directors (the 'Board') until such time as the board appoints a committee
('Committee'). The members of the Committee shall be appointed from time to time
by the Board and shall consist of not less than two (2) persons, each of whom
shall qualify as a 'non-employee director' under Rule 16b-3. Such persons shall
be directors of the Company. All references herein to the 'Committee' shall
include the Board prior to the time that a Committee is appointed or at any time
thereafter that the Board is authorized to act in accordance with this Plan.
3.2 GRANTS OF OPTIONS BY THE COMMITTEE. In accordance with the
provisions of the Plan, the Committee, by resolution, shall select those
eligible persons to whom Options shall be granted ('Optionees'); shall determine
the time or times at which each Option shall be granted, whether an Option is an
ISO or an NQO and the number of shares to be subject to each Option; and shall
fix the time and manner in which the Option may be exercised, the Option
exercise
price, and the Option period. The Committee shall determine the form of option
agreement to evidence the foregoing terms and conditions of each Option, which
need not be identical, in the form provided for in SECTION 7. Such option
agreement may include such other provisions as the Committee may deem necessary
or desirable consistent with the Plan, the Code and Rule 16b-3.
3.3 COMMITTEE PROCEDURES. The Committee from time to time may
adopt such rules and regulations for carrying out the purposes of the Plan as it
may deem proper and in the best interests of the Company. The Committee shall
keep minutes of its meetings and records of its actions. A majority of the
members of the Committee shall constitute a quorum for the transaction of any
business by the Committee. The Committee may act at any time by an affirmative
vote of a majority of those members voting. Such vote may be taken at a meeting
(which may be conducted in person or by any telecommunication medium) or by
written consent of Committee members without a meeting.
3.4 FINALITY OF COMMITTEE ACTION. The Committee shall resolve all
questions arising under the Plan and option agreements entered into pursuant to
the Plan. Each determination, interpretation, or other action made or taken by
the Committee shall be final and conclusive and binding on all persons,
including, without limitation, the Company, its shareholders, the Committee and
each of the members of the Committee, and the directors, officers and employees
of the Company, including Optionees and their respective successors in interest.
3.5 NON-LIABILITY OF COMMITTEE MEMBERS. No Committee member shall
be liable for any action or determination made by him or her in good faith with
respect to the Plan or any Option granted under it.
4. BOARD POWER TO AMEND, SUSPEND, OR TERMINATE THE PLAN. The Board may,
from time to time, make such changes in or additions to the Plan as it may deem
proper and in the best interests of the Company and its shareholders. The Board
may also suspend or terminate the Plan at any time, without notice, and in its
sole discretion. Notwithstanding the foregoing, no such change, addition,
suspension, or termination by the Board shall (i) materially impair any Option
previously granted under the Plan without the express written consent of the
optionee; or (ii) be undertaken without shareholder approval if such shareholder
approval is required by applicable law or regulation.
5. SHARES SUBJECT TO THE PLAN. For purposes of the Plan, the Committee
is authorized to grant Options for up to 600,000 shares of the Company's common
stock ('Common Stock'), or the number and kind of shares of stock or other
securities which, in accordance with SECTION 13, shall be substituted for such
shares of Common Stock or to which such shares shall be adjusted. The Committee
is authorized to grant Options under the Plan with respect to such shares. Any
or all unsold shares subject to an Option which for any reason expires or
otherwise terminates (excluding shares returned to the Company in payment of the
exercise price for additional shares) may again be made subject to grant under
the Plan.
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6. OPTIONEES. Options shall be granted only to officers, directors or
key employees of the Company or employees of companies that do business with the
Company designated by the Committee from time to time as Optionees. Any Optionee
may hold more than one option to purchase Common Stock, whether such option is
an Option held pursuant to the Plan or otherwise. An Optionee who is an employee
of the Company ('Employee Optionee') and who holds an Option must remain a
continuous full or part-time employee of the Company from the time of grant of
the Option to him until the time of its exercise, except as provided in SECTION
10.3.
7. GRANTS OF OPTIONS. The Committee shall have the sole discretion to
grant Options under the Plan and to determine whether any Option shall be an ISO
or an NQO, except that any Options granted to members of the Committee shall be
granted by the Board. The terms and conditions of Options granted under the Plan
may differ from one another as the Committee, in its absolute discretion, shall
determine as long as all Options granted under the Plan satisfy the requirements
of the Plan. Upon determination by the Committee that an Option is to be granted
to an Optionee, a written option agreement evidencing such Option shall be given
to the Optionee, specifying the number of shares subject to the Option, the
Option exercise price, whether the Option is an ISO or an NQO, and the other
individual terms and conditions of such Option. Such option agreement may
incorporate generally applicable provisions from the Plan, a copy of which shall
be provided to all Optionees at the time of their initial grants under the Plan
or within a reasonable period of time thereafter. The Option shall be deemed
granted as of the date specified in the grant resolution of the Committee, and
the option agreement shall be dated as of the date of such resolution.
Notwithstanding the foregoing, unless the Committee consists solely of
non-employee directors under Rule 16b-3, any Option granted to an executive
officer, director or 10% beneficial owner for purposes of Section 16 of the
Securities Exchange Act of 1934, as amended ('Section 16 of the 1934 Act'),
shall either be (a) conditioned upon the Optionee's agreement not to sell the
shares of Common Stock underlying the Option for at least six (6) months after
the date of grant or (b) approved by the entire Board or by the shareholders of
the Company. Notwithstanding the above and subject to adjustment as provided in
Section 13, the number of shares subject to options that may be granted to any
one Optionee under this Plan shall be limited to 300,000.
8. OPTION EXERCISE PRICE. The price per share to be paid by the Optionee
at the time an ISO is exercised shall not be less than one hundred percent
(100%) of the Fair Market Value (as hereinafter defined) of one share of the
optioned Common Stock on the date on which the Option is granted. No ISO may be
granted under the Plan to any person who, at the time of such grant, owns
(within the meaning of Section 424(d) of the Code) stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or of any parent thereof, unless the exercise price of such ISO is
at least equal to one hundred and ten percent (110%) of Fair Market Value on the
date of grant. The price per share to be paid by the Optionee at the time an NQO
is exercised shall be determined by the Committee. For purposes of the Plan, the
'Fair Market Value' of a share of the Company's Common Stock as of a given date
shall be: (i) the closing price of a share of the Company's Common Stock on the
principal exchange on which shares of the Company's Common Stock are then
trading, if any, on the day immediately preceding such date, or, if shares were
not traded on such date, then on the next preceding trading day during which a
sale occurred; or (ii) if the Company's Common Stock is not traded on an
exchange but is quoted on Nasdaq or a successor quotation system, (1) the last
sales price (if the Common Stock is then
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listed as a National Market Issue under the Nasdaq National Market System) or
(2) the closing representative bid price (in all other cases) for the Common
Stock on the day immediately preceding such date as reported by Nasdaq or such
successor quotation system; or (iii) if the Company's Common Stock is not
publicly traded on an exchange and not quoted on Nasdaq or a successor quotation
system, the closing bid price for the Common Stock on such date as determined in
good faith by the Committee; or (iv) if the Company's Common Stock is not
publicly traded, the fair market value established by the Committee acting in
good faith. In addition, with respect to any ISO, the Fair Market Value on any
given date shall be determined in a manner consistent with any regulations
issued by the Secretary of the Treasury for the purpose of determining fair
market value of securities subject to an ISO plan under the Code.
9. CEILING OF ISO GRANTS. The aggregate Fair Market Value (determined at
the time any ISO is granted) of the Common Stock with respect to which an
Optionee's ISOs, together with incentive stock options granted under any other
plan of the Company and any parent, are exercisable for the first time by such
Optionee during any calendar year shall not exceed $100,000. If an Optionee
holds such incentive stock options that become first exercisable (including as a
result of acceleration of exercisability under the Plan) in any one year for
shares having a Fair Market Value at the date of grant in excess of $100,000,
then the most recently granted of such ISOs, to the extent that they are
exercisable for shares having an aggregate Fair Market Value in excess of such
limit, shall be deemed to be NQOs. In addition, the maximum number of shares
under this Plan available for grant as ISOs shall be 600,000.
10. DURATION, EXERCISABILITY, AND TERMINATION OF OPTIONS.
10.1 OPTION PERIOD. The option period shall be determined by the
Committee with respect to each Option granted. In no event, however, may the
option period exceed ten (10) years from the date on which the Option is
granted, or five (5) years in the case of a grant of an ISO to an Optionee who
is a ten percent (10%) shareholder at the date on which the Option is granted as
described in SECTION 8.
10.2 EXERCISABILITY OF OPTIONS. Each Option shall be exercisable
in whole or in consecutive installments, cumulative or otherwise, during its
term as determined in the discretion of the Committee; provided, however, that
no Option shall be exercised or exercisable prior to five (5) years from the
date of grant unless the Company shall have consummated an initial public
offering of the Company's Common Stock pursuant to an effective registration
statement under the Securities Act of 1933, as amended (an 'IPO') prior to the
expiration of such five (5) year period.
10.3 TERMINATION OF OPTIONS DUE TO TERMINATION OF EMPLOYMENT,
DISABILITY, OR DEATH OF OPTIONEE. All Options granted under the Plan to any
Employee Optionee shall terminate and may no longer be exercised if the Employee
Optionee ceases, at any time during the period between the grant of the Option
and its exercise, to be an employee of the Company; provided, however, that the
Committee may, in the exercise of its discretion, extend the date to exercise
any Option to a date that extends beyond the date the Optionee terminates
employment with the Company. Notwithstanding the foregoing, (i) if the Employee
Optionee's employment terminates due to disability (as defined in Section
22(e)(3) of the Code and subject to such proof of
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disability as the Committee may require), such Option may be exercised by the
Employee Optionee (or by his guardian(s), or conservator(s), or other legal
representative(s)) before the earlier of the expiration of twelve (12) months
after such termination or the expiration of the Option (to the extent that the
Option was exercisable by him on the date of the termination of his employment);
or (ii) in the event of the Employee Optionee's death, an Option exercisable by
him at the date of his death shall be exercisable by his legal
representative(s), legatee(s), or heir(s), or by his beneficiary or
beneficiaries so designated by him, as the case may be, within the earlier of
twelve (12) months after his death or the expiration of the Option (to the
extent that the Option was exercisable by him on the date of his death).
11. MANNER OF OPTION EXERCISE; RIGHTS AND OBLIGATIONS OF OPTIONEES.
11.1 WRITTEN NOTICE OF EXERCISE. An Optionee may elect to
exercise an Option in whole or in part, from time to time, subject to the terms
and conditions contained in the Plan and in the agreement evidencing such
Option, by giving written notice of exercise to the Company at its principal
executive office.
11.2 CASH PAYMENT FOR OPTIONED SHARES. If an Option is exercised
for cash, such notice shall be accompanied by a cashier's or personal check, or
money order, made payable to the Company for the full exercise price of the
shares purchased.
11.3 STOCK SWAP FEATURE. At the time of the Option exercise, and
subject to the discretion of the Committee to accept payment in cash only, the
Optionee may determine whether the total purchase price of the shares to be
purchased shall be paid solely in cash or by transfer from the Optionee to the
Company of previously acquired shares of Common Stock, or by a combination
thereof. If the Optionee elects to pay the total purchase price in whole or in
part with previously acquired shares of Common Stock, the value of such shares
shall be equal to their Fair Market Value on the date of exercise, determined by
the Committee in the same manner used for determining Fair Market Value at the
time of grant for purposes of SECTION 8.
11.4 INVESTMENT REPRESENTATION FOR NON-REGISTERED SHARES AND
LEGALITY OF ISSUANCE. The receipt of shares of Common Stock upon the exercise of
an Option shall be conditioned upon the Optionee (or any other person who
exercises the Option on his or her behalf as permitted by SECTION 10.3)
providing to the Committee a written representation that, at the time of such
exercise, it is the intent of such person(s) to acquire the shares for
investment only and not with a view toward distribution. The certificate for
unregistered shares issued for investment shall be restricted by the Company as
to transfer unless the Company receives an opinion of counsel satisfactory to
the Company to the effect that such restriction is not necessary under then
pertaining law. The providing of such representation and such restrictions on
transfer shall not, however, be required upon any person's receipt of shares of
Common Stock under the Plan in the event that, at the time of grant of the
Option relating to such receipt or upon such receipt, whichever is the
appropriate measure under applicable federal or state securities laws, the
shares subject to the Option shall be (i) covered by an effective and current
registration statement under the Securities Act of 1933, as amended, and (ii)
either qualified or exempt from qualification under applicable state securities
laws. The Company shall, however, under no circumstances be required to sell or
issue
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any shares under the Plan if, in the opinion of the Committee, (i) the issuance
of such shares would constitute a violation by the Optionee or the Company of
any applicable law or regulation of any governmental authority, or (ii) the
consent or approval of any governmental body is necessary or desirable as a
condition of, or in connection with, the issuance of such shares.
11.5 SHAREHOLDER RIGHTS OF OPTIONEE. Upon exercise, the Optionee
(or any other person who exercises the Option on his behalf as permitted by
SECTION 10.3) shall be recorded on the books of the Company as the owner of the
shares, and the Company shall deliver to such record owner one or more duly
issued stock certificates evidencing such ownership. No person shall have any
rights as a shareholder with respect to any shares of Common Stock covered by an
Option granted pursuant to the Plan until such person shall have become the
holder of record of such shares. Except as provided in SECTION 13, no
adjustments shall be made for cash dividends or other distributions or other
rights as to which there is a record date preceding the date such person becomes
the holder of record of such shares.
11.6 HOLDING PERIODS FOR TAX PURPOSES. The Plan does not provide
that an Optionee must hold shares of Common Stock acquired under the Plan for
any minimum period of time. Optionees are urged to consult with their own tax
advisors with respect to the tax consequences to them of their individual
participation in the Plan.
12. SUCCESSIVE GRANTS. Successive grants of Options may be made to any
Optionee under the Plan.
13. ADJUSTMENTS.
(a) Except as provided herein, if the outstanding Common Stock
shall be hereafter increased or decreased, or changed into or exchanged for a
different number or kind of shares or other securities of the Company or of
another corporation, by reason of a recapitalization, reclassification,
reorganization, merger, consolidation, share exchange, or other business
combination in which the Company is the surviving parent corporation, stock
split-up, combination of shares, or dividend or other distribution payable in
capital stock or rights to acquire capital stock, appropriate adjustment shall
be made by the Committee in the number and kind of shares for which options may
be granted under the Plan. In addition, the Committee shall make appropriate
adjustment in the number and kind of shares as to which outstanding and
unexercised options shall be exercisable, to the end that the proportionate
interest of the holder of the option shall, to the extent practicable, be
maintained as before the occurrence of such event. Such adjustment in
outstanding options shall be made without change in the total price applicable
to the unexercised portion of the option but with a corresponding adjustment in
the exercise price per share.
(b) In the event of the dissolution or liquidation of the
Company, any outstanding and unexercised options shall terminate as of a future
date to be fixed by the Committee; provided, however, that the Committee shall
accelerate the exercisability of such options and shall give each Optionee at
least 30 days to exercise such options prior to their termination.
(c) In the event of a Reorganization (as hereinafter defined),
then,
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(i) If there is no plan or agreement with respect to the
Reorganization ('Reorganization Agreement'), or if the Reorganization Agreement
does not specifically provide for the adjustment, change, conversion, or
exchange of the outstanding and unexercised options for cash or other property
or securities of another corporation, then any outstanding and unexercised
options shall terminate as of a future date to be fixed by the Committee;
provided, however, that the Committee shall accelerate the exercisability of
such options and shall give each Optionee at least 30 days to exercise such
options prior to their termination; or
(ii) If there is a Reorganization Agreement, and the
Reorganization Agreement specifically provides for the adjustment, change,
conversion, or exchange of the outstanding and unexercised options for cash or
other property or securities of another corporation, then the Committee shall
adjust the shares under such outstanding and unexercised options, and shall
adjust the shares remaining under the Plan which are then available for the
issuance of options under the Plan if the Reorganization Agreement makes
specific provisions therefor, in a manner not inconsistent with the provisions
of the Reorganization Agreement for the adjustment, change, conversion, or
exchange of such options and shares.
(d) The term 'Reorganization' as used in this SECTION 13 shall
mean any reorganization, merger, consolidation, share exchange, or other
business combination pursuant to which the Company is not the surviving parent
corporation after the effective date of the Reorganization, or any sale or
lease of all or substantially all of the assets of the Company.
(e) The Committee shall provide to each optionee then holding an
outstanding and unexercised option not less than thirty (30) calendar days'
advanced written notice of any date fixed by the Committee pursuant to this
SECTION 13 and of the terms of any Reorganization Agreement providing for the
adjustment, change, conversion, or exchange of outstanding and unexercised
options.
Any adjustment to any outstanding ISO pursuant to this
SECTION 13, if made by reason of a transaction described in Section 424(a) of
the Code, shall be made so as to conform to the requirements of that Section and
the regulations thereunder. If any other transaction described in Section 424(a)
of the Code affects the Common Stock subject to any unexercised ISO theretofore
granted under the Plan (hereinafter for purposes of this SECTION 13 referred to
as the 'old option'), the Board of Directors of the Company or of any surviving
or acquiring corporation may take such action as it deems appropriate, in
conformity with the requirements of that Code Section and the regulations
thereunder, to substitute a new option for the old option, in order to make the
new option, as nearly as may be practicable, equivalent to the old option, or to
assume the old option.
(f) All adjustments and determinations under this SECTION 13
shall be made by the Committee in good faith in its sole discretion.
14. CONTINUED EMPLOYMENT. Neither the creation of the Plan nor the
granting of Option(s) under it shall be deemed to create a right in an Employee
Optionee to continued employment with the Company, and each such Employee
Optionee shall be and shall remain subject to discharge by the Company as though
the Plan had never come into existence.
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15. TAX WITHHOLDING. The exercise of any Option granted under the Plan
is subject to the condition that if at any time the Company shall determine, in
its discretion, that the satisfaction of withholding tax or other withholding
liabilities under any federal, state or local law is necessary or desirable as a
condition of, or in connection with, such exercise or a later lapsing of time or
restrictions on or disposition of the shares of Common Stock received upon such
exercise, then in such event, the exercise of the Option shall not be effective
unless such withholding shall have been effected or obtained in a manner
acceptable to the Company. When an Optionee is required to pay to the Company an
amount required to be withheld under applicable income tax laws in connection
with the exercise of any Option, the Committee may require the Optionee to
satisfy the obligation, in whole or in part, by withholding shares of Common
Stock having a value equal to the amount required to be withheld. The value of
the Common Stock withheld pursuant to the election shall be determined by the
Committee, in accordance with the criteria set forth in SECTION 8, with
reference to the date the amount of tax to be withheld is determined. The
Optionee shall pay to the Company in cash any amount required to be withheld
that would otherwise result in the withholding of a fractional share.
16. TERM OF PLAN.
16.1 EFFECTIVE DATE. Subject to shareholder approval, the Plan
shall become effective as of February 5, 1997.
16.2 TERMINATION DATE. Except as to options granted and
outstanding under the Plan prior to such time, the Plan shall terminate at
midnight on February 4, 2007, and no Option shall be granted after that time.
Options then outstanding may continue to be exercised in accordance with their
terms. The Plan may be suspended or terminated at any earlier time by the Board
within the limitations set forth in SECTION 4.
17. LIMITS ON TRANSFER. No right or interest of any Optionee in any
Option awarded under this Plan may be pledged, encumbered, or hypothecated to or
in favor of any party other than the Company, or shall be subject to any lien,
obligation, or liability of such Optionee to any other party other than the
Company. Except as otherwise provided by the Committee at the time of grant or
thereafter, no Option shall be assignable or transferable by an Optionee other
than by will or the laws of descent and distribution.
18. NON-EXCLUSIVITY OF THE PLAN. Nothing contained in the Plan is
intended to amend, modify, or rescind any previously approved compensation
plans, programs or options entered into by the Company. This Plan shall be
construed to be in addition to and independent of any and all such other
arrangements. Neither the adoption of the Plan by the Board nor the submission
of the Plan to the shareholders of the Company for approval shall be construed
as creating any limitations on the power or authority of the Board to adopt,
with or without shareholder approval, such additional or other compensation
arrangements as the Board may from time to time deem desirable.
19. GOVERNING LAW. The Plan and all rights and obligations under it
shall be construed and enforced in accordance with the laws of the State of
Arizona.
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1997 Stock Option Plan - Schuff Steel Co.
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