PROPOSAL
THREE
APPROVAL
OF OUR 2008 EQUITY INCENTIVE PLAN
Our
2008
Equity Incentive Plan (the “2008 Plan”) was approved by the Board of Directors
on June 19, 2008, subject to approval by our stockholders. A copy of our 2008
Plan is attached to this Proxy Statement as
Appendix
A
.
Our
2008 Plan is intended to encourage ownership of Common Stock by selected
employees, directors and consultants of the Company and our subsidiaries and
affiliates and to provide an additional incentive to such employees, directors
and consultants to promote our success. The 2008 Plan will be administered
by
our Compensation Committee (the “Committee”).
This
proposal is also being submitted to stockholders for approval to ensure
qualification of our 2008 Plan under NYSE Arca rules and to allow us to grant
incentive stock options under the plan. In addition, if the 2008 Plan is
approved by our stockholders and the other conditions of Internal Revenue Code
Section 162(m) relating to performance-based compensation are satisfied,
compensation paid to covered employees pursuant to the 2008 Plan will be
deductible under Section 162(m).
Description
of Principal Features of our 2008 Plan
We
may
generally grant five types of awards under our 2008 Plan: restricted stock,
stock options (including both incentive stock options (“ISOs”) within the
meaning of Section 422 of the Internal Revenue Code and nonqualified options
(“NQSOs”), which are options that do not qualify as ISOs), phantom stock, stock
bonus awards and other awards (including stock appreciation rights). In
addition, the Committee may, in its discretion, make other awards valued in
whole or in part by reference to, or otherwise based on, our common stock.
We
have
reserved a total of 1,000,000 shares of Common Stock for issuance under our
2008
Plan, subject to equitable adjustment upon the occurrence of any stock dividend
or other distribution, recapitalization, reclassification, stock split,
subdivision reorganization, merger, consolidation, combination, repurchase,
or
share exchange, or other similar corporate transaction or event. Officers,
including our named executive officers, employees, directors and consultants
are
eligible to receive awards under the 2008 Plan, in the discretion of the
Committee. To date, no awards have been granted under our 2008 Plan. Awards
will
become exercisable or otherwise vest at the times and upon the conditions that
the Committee may determine, as reflected in the applicable award agreement,
except that awards of restricted stock, phantom stock, stock bonuses and Other
Awards (as defined below) other than stock appreciation rights granted in
connection with stock options must vest over the minimum periods, if any,
required by the 2008 Plan, as described below. The Committee has the authority
to accelerate the vesting and/or exercisability of any outstanding award,
provided that the Committee determines that such acceleration is necessary
or
desirable in light of extraordinary circumstances. Awards also accelerate
automatically under the 2008 Plan upon the occurrence of certain events, as
described below under “Other Features of the 2008 Plan.” Because awards under
the 2008 Plan are discretionary, it is not possible to determine the size of
future awards.
Restricted
Stock.
The
Committee may grant restricted shares of Common Stock to such persons, in such
amounts, at such price, if any, and subject to such terms and conditions as
the
Committee may determine in its discretion. Except for restrictions on transfer
and such other restrictions as the Committee may impose, participants will
have
all the rights of a stockholder with respect to the restricted stock. Unless
the
Committee determines otherwise, termination of employment during the restricted
period will result in the forfeiture by the participant of all shares still
subject to restrictions. If a participant’s employment is terminated “For Cause”
(as defined in the 2008 Plan), then the participant will immediately forfeit
all
shares not vested as of the date of termination.
Stock
Options.
Options
entitle the holder to purchase shares of Common Stock during a specified period
at a purchase price specified by the Committee. Such price shall not be less
than 100% of the fair market value of the shares as determined on the date
the
option is granted. Each option granted under the 2008 Plan will be exercisable
for a period of 10 years from the date of grant, or such lesser period as the
Committee shall determine. Options may be exercised in whole or in part by
the
payment of cash of the full option price of the shares purchased. The 2008
Plan
provides that the Committee may stipulate in the applicable agreement that
the
option may be subject to cancellation by the Company. If a participant’s
employment is terminated “For Cause”, then the participant will immediately lose
the right to exercise any unexercised options.
Phantom
Stock.
A
phantom stock award is an award of the right to receive upon the vesting date
of
the award an amount of cash, Common Stock or other property based upon an
increase in the value of the shares during the term of the award. Phantom stock
awards will be subject to a minimum one year vesting period. If a participant’s
employment is terminated “For Cause,” then the participant will forfeit all
unvested phantom stock awards.
Stock
Bonus Awards.
A stock
bonus award is an award of Common Stock made at the discretion of the Committee.
Stock bonus awards will only be granted in lieu of salary or cash bonus
otherwise payable to a participant. Otherwise, stock bonus awards will be made
upon such terms and conditions (if any) as the Committee may determine. If
a
participant’s employment is terminated “For Cause,” then the participant will
forfeit all unvested stock.
Other
Awards (including Stock Appreciation Rights).
Other
forms of awards (including any stock appreciation rights, referred to as “Other
Awards”) valued in whole or in part by reference to, or otherwise based on,
shares may be granted either alone or in addition to other awards under the
2008
Plan. Subject to the provisions of the 2008 Plan, the Committee shall have
sole
and complete authority to determine the persons to whom and the time or times
at
which such Other Awards shall be granted, the number of shares to be granted
pursuant to such Other Awards and all other conditions of such Other Awards,
except that Other Awards (other than stock appreciation rights granted in
connection with stock options) will be subject to a minimum one year vesting
period. A stock appreciation right may be granted in connection with an option,
either at the time of grant or at any time thereafter during the term of the
option, or may be granted unrelated to an option. If a participant’s employment
is terminated “For Cause,” then the participant will immediately lose the right
to exercise any unexercised stock appreciation rights or Other Awards.
Other
Features of the 2008 Plan
The
2008
Plan may be amended by our Board of Directors, subject to stockholder approval
where necessary to satisfy applicable laws or regulatory requirements and for
amendments which increase the number of shares available under the 2008 Plan,
materially change the class of persons eligible under the 2008 Plan, would
have
the effect of materially increasing the benefits accruing to participants under
the 2008 Plan or materially alter the vesting provisions for awards of
restricted stock. No award outstanding under our 2008 Plan may be repriced,
regranted through cancellation or otherwise amended to reduce the exercise
price
without the approval of our stockholders
The
2008
Plan provides that a participant who terminates employment other than for cause,
death, disability or retirement shall generally have three months to exercise
the vested portion of his or her award except for NQSOs for which such exercise
period shall be six months. If a participant dies or his or her employment
ceases due to total and permanent disability (as determined by the Committee),
the award shall become fully exercisable and the participant or his or her
representative may generally exercise the award within one year of the
participant’s cessation.
The
2008
Plan provides that upon a participant’s retirement (as defined in the 2008
Plan), awards granted to such participant under the 2008 Plan accelerate and
become fully vested for 50% of the number of shares covered by the unvested
awards and for an additional 10% for every full year of employment beyond ten
years. Upon retirement, awards may generally be exercised within one year of
retirement to the extent vested upon retirement.
Awards
granted under the 2008 Plan are non-transferable, other than by will, by the
laws of descent and distribution, pursuant to a qualified domestic relations
order or as otherwise permitted by the Committee.
Awards
granted under the 2008 Plan terminate upon our dissolution or liquidation (other
than in connection with a merger, consolidation or reorganization). The
participant may exercise, immediately prior to the dissolution or liquidation,
the award to the extent then exercisable on the date immediately prior to such
dissolution or liquidation.
The
2008
Plan provides that if awards are assumed or replaced in a non-hostile change
of
control and a designated employee (including all of our executive officers)
is
either terminated other than “For Cause” or leaves for good reason at any time
within two years following a non-hostile change of control, his or her awards,
as assumed or replaced, will accelerate and become fully vested or exercisable,
as the case may be. Options and stock appreciation rights held by the designated
employee are then exercisable until the earlier of one year following the
designated employee’s termination date and the expiration date of the option or
stock appreciation right, as the case may be. The 2008 Plan also provides that
if we elect to terminate the 2008 Plan or cash out stock options or stock
appreciation rights prior to a non-hostile change of control, then each affected
award of executive officers as well as all other employees will accelerate
and
become fully exercisable immediately prior to the change of control. In the
event of a hostile change of control, the 2008 Plan provides that awards to
executive officers as well as all other employees, directors and consultants
will accelerate and become fully exercisable immediately prior to the change
of
control.
Certain
Federal Income Tax Consequences
Set
forth
below is a discussion of certain United States federal income tax consequences
with respect to awards that may be granted pursuant to the 2008 Plan. The
following discussion is a brief summary only, and reference is made to the
Internal Revenue Code and the regulations and interpretations issued thereunder
for a complete statement of all relevant federal tax consequences. This summary
is not intended to be exhaustive and does not describe state, local or foreign
tax consequences of participation in the 2008 Plan.
Incentive
Stock Options.
In
general, no taxable income is realized by a participant upon the grant of an
ISO. Shares are issued to participants upon the exercise of options (“Option
Shares”). If Option Shares are issued to a participant pursuant to the exercise
of an ISO and the participant does not dispose of the Option Shares within
the
two-year period after the date of grant or within one year after the receipt
of
such Option Shares by the participant (a “disqualifying disposition”), then,
generally (i) the participant will not realize ordinary income with respect
to
the option and (ii) upon sale of such Option Shares, any amount realized in
excess of the exercise price paid for the Option Shares will be taxed to such
participant as capital gain. The amount by which the fair market value of the
shares on the exercise date of an ISO exceeds the purchase price generally
will,
however, constitute an item which increases the participant’s “alternative
minimum taxable income.”
If
Option
Shares acquired upon the exercise of an ISO are disposed of in a disqualifying
disposition, the participant generally would include in ordinary income in
the
year of disposition an amount equal to the excess of the fair market value
of
the Option Shares at the time of exercise (or, if less, the amount realized
on
the disposition of the Option Shares) over the exercise price paid for the
Option Shares.
Subject
to certain exceptions, an ISO generally will not be treated as an ISO if it
is
exercised more than three months following termination of employment. If an
ISO
is exercised at a time when it no longer qualifies as an ISO, such option will
be treated as an NQSO as discussed below.
Nonqualified
Stock Options.
In
general, no taxable income is realized by a participant upon the grant of an
NQSO. Upon exercise of an NQSO, the participant generally would include in
ordinary income at the time of exercise an amount equal to the excess, if any,
of the fair market value of the Option Shares at the time of exercise over
the
exercise price paid for the Option Shares.
In
the
event of a subsequent sale of Option Shares received upon the exercise of an
NQSO, any appreciation after the date on which taxable income is realized by
the
participant in respect of the option exercise should be taxed as capital gain
in
an amount equal to the excess of the sales proceeds for the Option Shares over
the participant’s basis in such Option Shares. The participant’s basis in the
Option Shares will generally equal the amount paid for the Option Shares plus
the amount included in ordinary income by the participant upon exercise of
the
NQSO.
Restricted
Stock.
A
participant will not recognize any income upon the receipt of restricted stock
unless the holder elects under Section 83(b) of the Internal Revenue Code,
within thirty days of such receipt, to recognize ordinary income in an amount
equal to the fair market value of the restricted stock at the time of receipt,
less any amount paid for the shares. If the election is made, the holder will
not be allowed a deduction for amounts subsequently required to be returned
to
us. If the election is not made, the holder will generally recognize ordinary
income, on the date that the restrictions to which the restricted stock are
subject are removed, in an amount equal to the fair market value of such shares
on such date, less any amount paid for the shares. At the time the holder
recognizes ordinary income, we generally will be entitled to a deduction in
the
same amount.
Generally,
upon a sale or other disposition of restricted stock with respect to which
the
holder has recognized ordinary income (i.e., a Section 83(b) election was
previously made or the restrictions were previously removed), the holder will
recognize capital gain or loss in an amount equal to the difference between
the
amount realized on such sale or other disposition and the holder’s basis in such
shares.
Other
Types of Awards.
The
grant of a stock appreciation right will not result in income for the grantee
or
in a tax deduction for us. Upon the settlement of such a right or the payment
of
a stock bonus award, the participant will recognize ordinary income equal to
the
aggregate value of the payment received, and we generally will be entitled
to a
tax deduction in the same amount.
VOTE
REQUIRED AND BOARD OF DIRECTORS
RECOMMENDATION
The
affirmative vote of a majority of votes cast at the Annual Meeting at which
a
quorum is present and voting, either in person or by proxy, is required for
approval of this proposal. When the accompanying proxy is properly executed
and
returned, the shares it represents will be voted in accordance with the
directions indicated thereon or, if no direction is indicated, the shares will
not be voted
.
THE
BOARD OF DIRECTORS DEEMS THE RATIFICATION AND APPROVAL OF THE COMPANY’S 2008
EQUITY INCENTIVE PLAN TO BE IN THE BEST INTERESTS OF THE COMPANY AND THE
STOCKHOLDERS AND RECOMMENDS A VOTE “FOR” APPROVAL
THEREOF.
STOCKHOLDER
PROPOSALS
Proposals
of Stockholders intended to be presented at the Annual Meeting of Stockholders
in 2009 must be received by February 20, 2009 in order to be considered for
inclusion in our Proxy Statement and form of proxy to that meeting. Stockholder
requests should be directed to our Secretary, John Chen at our address set
forth
on the first page of this Proxy Statement.
A
stockholder of the Company may wish to have a proposal presented at the Annual
Meeting of Stockholders in 2009, but not to have such proposal included in
our
Proxy Statement and form of proxy relating to that meeting. If notice of any
such proposal is not received by us at our address set forth on the first page
of this Proxy Statement by May 19, 2009 then such proposal will be deemed
“untimely” for purposes of Rule 14a-5(e) promulgated under the Exchange Act and,
therefore, we will have the right to exercise discretionary voting authority
with respect to such proposal.
SOLICITATION
OF PROXIES
The
accompanying form of proxy is being solicited on behalf of our Board of
Directors. The expenses of solicitation of proxies for the Annual Meeting will
be paid by us. In addition to the mailing of proxy material, such solicitation
may be made in person, by telephone, facsimile, or electronic mail by directors,
officers, and our regular employees, none of whom will receive additional
compensation for such solicitation.
AVAILABILITY
OF CERTAIN DOCUMENTS
Our
Code
of Ethics, Corporate Governance Guidelines and the Charters for the Audit,
Compensation, and Nominating Committees of the Company’s Board of Directors are
published on the Company’s website at
http://www.gshi-steel.com
.
The
Company is not including the information contained on or available through
its
website as a part of, or incorporating such information by reference into,
this
proxy statement.
“HOUSEHOLDING”
OF PROXY MATERIALS
Recent
changes in the regulations regarding the delivery of copies of proxy materials
and annual reports to stockholders permit the Company and brokerage firms
to
send one annual report and proxy statement to multiple stockholders who share
the same address under certain circumstances. Stockholders who hold their
shares
through a broker may have consented to reducing the number of copies of
materials delivered to their address. In the event that a stockholder wishes
to
revoke such a consent previously provided to a broker, that stockholder must
contact the broker to revoke the consent. If, at any time, a stockholder
wishes
to receive a separate proxy statement and our annual report, the stockholder
may
receive copies by contacting John Chen, Secretary of the Company at +86(10)
58797346, General Steel Holdings, Inc., Kuntai International Mansion Building,
Suite 2315, Yi No. 12 Chaoyangmenwai Avenue, Chaoyang District, Beijing 100020.
Stockholders receiving multiple copies of these documents at the same address
can request delivery of a single copy of these documents by contacting the
Company in the same manner. Stockholders holding shares through a broker
can
request a single copy by contacting the broker.
APPENDIX
A
GENERAL
STEEL HOLDINGS, INC.
2008
EQUITY INCENTIVE PLAN
|
1.
|
Purpose;
Establishment
|
The
General Steel Holdings, Inc. 2008 Equity Incentive Plan (the “Plan”) is intended
to encourage ownership of shares of the Company’s Common Stock by selected
Employees, Directors, and Consultants of the Company and its Affiliates and
to
provide an additional incentive to those Employees, Directors, and Consultants
to promote the success of the Company and its Affiliates. The Plan has been
adopted and approved by the Board of Directors and the stockholders of the
Company and is effective as of June __, 2008.
As
used
in the Plan, the following definitions apply to the terms indicated below:
(a) “Affiliate”
means any entity if, at the time of granting of an Award (A) the Company,
directly or indirectly, owns at least 50% of the combined voting power of all
classes of stock of such entity or at least 50% of the ownership interests
in
such entity or (B) such entity, directly or indirectly, owns at least 50%
of the combined voting power of all classes of stock of the Company.
(b) “Agreement”
shall mean either the written agreement between the Company and a Participant
or
a written notice from the Company to a Participant evidencing an Award.
(c) “Award”
shall mean any Option, Restricted Stock, Phantom Stock, Stock Bonus, Stock
Appreciation Right or Other Award granted pursuant to the terms of the Plan.
(d) “Board
of Directors” shall mean the Board of Directors of the Company.
(e) “Code”
shall mean the Internal Revenue Code of 1986, as amended from time to time,
and
any regulations promulgated thereunder.
(f) “Committee”
shall mean, at the discretion of the Board of Directors, the full Board of
Directors or the Compensation Committee of the Board of Directors.
(g) “Company”
shall mean General Steel Holdings, Inc., a Nevada corporation.
(h) “Common
Stock” shall mean the common stock of the Company, par value $0.001 per share.
(i) “Consultant”
shall mean any individual or entity who is performing advisory or other
consulting services for the Company.
(j) A
“Corporate Change in Control” shall be deemed to have occurred:
(i) upon
the acquisition of beneficial ownership (as determined pursuant to the
provisions of Rule 13d-3 under the Exchange Act and Treas. Reg. §1.409A-3(i)(5))
(“Treasury Regulation”) of securities of the Company representing more than
fifty percent (50%) of the combined voting power of the Company’s then
outstanding securities by a person, entity or “group”, within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act and the Treasury
Regulation (excluding for this purpose, the Company or its Affiliates, or any
employee benefit plan of the Company), pursuant to a transaction or series
of
related transactions which the Board of Directors does not approve; or
(ii)
at
such time as individuals who as of January 1, 2008 constitute the Board of
Directors (the “Incumbent Board”) cease during any 12-month period for any
reason to constitute a majority of the Board of Directors, provided that any
person becoming a director subsequent to January 1, 2008 whose election or
nomination for election by the Company’s stockholders was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board, shall,
for purposes of the Plan, be considered as though such person were a member
of
the Incumbent Board (unless such individual is an individual whose initial
assumption of office is in connection with an actual or threatened election
contest related to the election of the directors of the Company, as such terms
are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act
and
the Treasury Regulation); or
(iii) the
occurrence of any other event which is considered a Corporate Change in Control
under the Treasury Regulation.
(k) “Corporate
Transaction” shall mean the following unless and until the transaction becomes a
Corporate Change in Control:
(i) a
reorganization, recapitalization, merger or consolidation unless more than
fifty
percent (50%) of the Company’s outstanding voting stock or the voting stock
of the corporation resulting from the transaction (or the parent of such
corporation) is held subsequent to the transaction by the persons who held
the
stock of the Company immediately prior to such transaction, or
(ii) the
sale, transfer or other disposition of all or substantially all of the assets
of
the Company to a successor in interest to the business of the Company.
(l) “Covered
Employee” shall have the meaning set forth in Section 162(m) of the Code.
(m) “Designated
Employee” shall mean an Employee designated by the Committee, in its sole
discretion, as a “Designated Employee” for purposes of the Plan at any time
prior to the effective date of a Corporate Transaction.
(n) “Director”
shall mean a member of the Board of Directors.
(o) “Effective
Date” shall mean June __, 2008.
(p) “Employee”
shall mean an individual employed by the Company or an Affiliate as a common
law
employee (determined under the regular personnel policies, practices and
classifications of the Company or the Affiliate, as applicable). An individual
is not considered an Employee for purposes of the Plan if the individual is
classified as a consultant or contractor under the Company or an Affiliate’s
regular personnel classifications and practices, or if the individual is a
party
to an agreement to provide services to the Company or an Affiliate without
participating in the Plan, notwithstanding that such individual may be treated
as a common law employee for payroll tax, coverage requirements under
Section 410(b) of the Code, nondiscrimination requirements under
Section 401(a)(4) of the Code or other legal purposes.
(q) “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.
(r) “Fair
Market Value” of a share of Common Stock of the Company as of a specified date
for the purposes of the Plan shall mean the closing price of a share of the
Common Stock on the principal securities exchange (including the NYSE Arca)
on
which such shares are traded on the date of grant, or if the shares are not
traded on a securities exchange, Fair Market Value shall be deemed to be the
average of the high bid and low asked prices of the shares in the
over-the-counter market on the date of grant. If the shares are not publicly
traded, Fair Market Value of a share of Common Stock (including, in the case
of
any repurchase of shares, any distributions with respect thereto which would
be
repurchased with the shares) shall be determined in good faith by the Board
of
Directors or the Committee in accordance with the Treasury Regulation. In no
case shall Fair Market Value be determined with regard to restrictions other
than restrictions which, by their terms, will never lapse.
(s) “Incentive
Stock Option” shall mean an Option that is an “incentive stock option” within
the meaning of Section 422 of the Code, or any successor provision, and
that is designated by the Committee as an incentive stock option.
(t) “Nonqualified
Stock Option” shall mean an Option other than an Incentive Stock Option.
(u) “Option”
shall mean an option to purchase shares of Common Stock granted pursuant to
Section 7.
(v) “Other
Award” shall mean an award granted pursuant to Section 11.
(w) “Participant”
shall mean an Employee, Director or Consultant to whom an Award is granted
pursuant to the Plan.
(x) “Phantom
Stock” shall mean the right, granted pursuant to Section 9, to receive in
cash, shares or other property an amount, the value of which is related to
the
Fair Market Value of a share of Common Stock.
(y) “Restricted
Stock” shall mean a share of Common Stock which is granted pursuant to the terms
of Section 8 and which is subject to restrictions as set forth in
Section 8(d).
(z) “Rule
16b-3” shall mean Rule 16b-3 promulgated under the Exchange Act, as amended from
time to time.
(aa) “Securities
Act” shall mean the Securities Act of 1933, as amended from time to time.
(bb) “Stock
Appreciation Right” shall mean the right to receive an amount equal to the
excess of the Fair Market Value of a share of Common Stock (as determined on
the
date of exercise), over (i) if the Stock Appreciation Right is not related
to an Option, the purchase price of a share of Common Stock on the date the
Stock Appreciation Right was granted, or (ii) if the Stock Appreciation
Right is related to an Option, the purchase price of a share of Common Stock
specified in the related Option, and pursuant to such further terms and
conditions as are provided under Section 11.
(cc) “Stock
Bonus” shall mean a bonus payable in shares of Common Stock granted pursuant to
Section 10.
(dd)
Treasury Regulation” shall mean the regulations under 26 U.S.C. §1.409A and any
section or subsection thereof specified herein.
(ee) “Vesting
Date” shall mean the date established by the Committee on which an Award shall
vest.
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3.
|
Stock
Subject to the Plan
|
(a)
Shares
Available for Awards.
The
maximum number of shares of Common Stock reserved for issuance under the Plan
shall be 1,000,000 shares (subject to adjustment as provided herein). Such
shares may be authorized but unissued Common Stock or authorized and issued
Common Stock held in the Company’s treasury. The Committee may direct that any
stock certificate evidencing shares issued pursuant to the Plan shall bear
a
legend setting forth such restrictions on transferability as may apply to such
shares pursuant to the Plan.
(b)
Adjustment
for Change in Capitalization.
In
the event that any dividend or other distribution is declared (whether in the
form of cash, Common Stock, or other property), or there occurs any
recapitalization, reclassification, stock split, reverse stock split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, unless
otherwise determined by the Committee in its sole and absolute discretion,
(1) the number and kind of shares of stock which may thereafter be issued
in connection with Awards, (2) the number and kind of shares of stock or
other property issued or issuable in respect of outstanding Awards, (3) the
exercise price, grant price or purchase price relating to any outstanding Award,
and (4) the maximum number of shares subject to Awards which may be awarded
to any Participant during any tax year of the Company shall be equitably
adjusted as necessary to prevent the dilution or enlargement of the rights
of
Participants; provided that, with respect to Incentive Stock Options, such
adjustment shall be made in accordance with Section 424 of the Code.
(c)
Adjustment
for Change or Exchange of Shares for Other Consideration.
In
the event the outstanding shares of Common Stock shall be changed into or
exchanged for any other class or series of capital stock or cash, securities
or
other property pursuant to a recapitalization, reclassification, reorganization,
merger, consolidation, spin-off, combination, repurchase, or share exchange,
or
other similar corporate transaction or event (“Transaction”), then, unless
otherwise determined by the Committee in its sole and absolute discretion,
(1) each outstanding Option shall thereafter become exercisable for the
number and/or kind of capital stock, and/or the amount of cash, securities
or
other property so distributed, into which the shares of Common Stock subject
to
the Option would have been changed or exchanged had the Option been exercised
in
full prior to such transaction, provided that, if necessary, the provisions
of
the Option shall be appropriately adjusted so as to be applicable, as nearly
as
may reasonably be, to any shares of capital stock, cash, securities or other
property thereafter issuable or deliverable upon exercise of the Option, and
(2) each outstanding Award that is not an Option and that is not
automatically changed in connection with the Transaction shall represent the
number and/or kind of shares of capital stock, and/or the amount of cash,
securities or other property so distributed, into which the number of shares
of
Common Stock covered by the outstanding Award would have been changed or
exchanged had they been held by a shareholder of the Company.
(d)
Reuse
of Shares.
The
following shares of Common Stock shall again become available for Awards:
(1) any shares subject to an Award that remain unissued upon the
cancellation, surrender, exchange or termination of such award for any reason
whatsoever; (2) any shares of Restricted Stock forfeited and (3) any
previously owned or withheld shares of Common Stock obtained by the Participant
pursuant to an Award and received by the Company in exchange for Option shares
upon a Participant’s exercise of an Option, as permitted under
Section 7(c)(ii).
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4.
|
Administration
of the Plan
|
The
Plan
shall be administered by the Committee. The Committee shall have the authority
in its sole discretion, subject to and not inconsistent with the express
provisions of the Plan, to administer the Plan and to exercise all the powers
and authorities either specifically granted to it under the Plan or necessary
or
advisable in the administration of the Plan, including, without limitation,
the
authority to grant Awards; to determine the persons to whom and the time or
times at which Awards shall be granted; to determine the type and number of
Awards to be granted, the number of shares of Common Stock to which an Award
may
relate and the terms, conditions, restrictions and performance criteria relating
to any Award; to determine whether, to what extent, and under what circumstances
an Award may be settled, cancelled, forfeited, exchanged, or surrendered; to
make adjustments in any applicable performance goals in recognition of unusual
or nonrecurring events affecting the Company or the financial statements of
the
Company, or in response to changes in applicable laws, regulations, or
accounting principles; to construe and interpret the Plan and any Award; to
prescribe, amend and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of Agreements; and to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
The
Committee may, in its sole and absolute discretion, without amendment to the
Plan, waive or amend the operation of Plan provisions respecting exercise after
termination of employment or service to the Company or an Affiliate and, except
as otherwise provided herein, adjust any of the terms of any Award. The
Committee may also (a) accelerate the date on which any Award granted under
the Plan becomes exercisable or (b) accelerate the Vesting Date or waive or
adjust any condition imposed hereunder with respect to the vesting or
exercisability of an Award, provided that the Committee determines that such
acceleration, waiver or other adjustment is necessary or desirable in light
of
extraordinary circumstances and does not trigger the application of §409A of the
Internal Revenue Code of 1986, as amended (“Code”). Notwithstanding anything in
the Plan to the contrary, no Award outstanding under the Plan may be repriced,
regranted through cancellation or otherwise amended to reduce the exercise
price
applicable thereto (other than with respect to adjustments made in connection
with a Transaction or other change in the Company’s capitalization) without the
approval of the Company’s stockholders.
The
persons who shall be eligible to receive Awards pursuant to the Plan shall
be
such Employees (including officers of the Company, whether or not they are
members of the Board of Directors), Directors and Consultants as the Committee
shall select from time to time. The grant of an Award hereunder in any year
to
any Employee, Director or Consultant shall not entitle such person to a grant
of
an Award in any future year.
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6.
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Awards
Under the Plan; Agreements
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The
Committee may grant Options, shares of Restricted Stock, shares of Phantom
Stock, Stock Bonuses, Stock Appreciation Rights and Other Awards in such amounts
and with such terms and conditions as the Committee shall determine, subject
to
the provisions of the Plan. Each Award granted under the Plan shall be evidenced
by an Agreement which shall contain such provisions as the Committee may in
its
sole discretion deem necessary or desirable which are not in conflict with
the
terms of the Plan. By accepting an Award, a Participant thereby agrees that
the
Award shall be subject to all of the terms and provisions of the Plan and the
applicable Agreement.
(a)
Identification
of Options.
Each
Option shall be clearly identified in the applicable Agreement as either an
Incentive Stock Option or a Nonqualified Stock Option. Each Option shall state
the number of shares of the Common Stock to which it pertains. Incentive Stock
Options may only be granted to Employees.
(b)
Exercise
Price.
Each
Agreement with respect to an Option shall set forth the amount (the “option
exercise price”) payable by the grantee to the Company upon exercise of the
Option. Subject to Section 7(d) (if applicable), the option exercise price
per share shall be determined by the Committee at the time of grant and shall
be
in an amount at least equal to the Fair Market Value on the date of grant.
(c)
Term
and Exercise of Options.
(i) Each
Option shall become exercisable at the pre-determined time or times determined
by the Committee or upon the achievement of the performance objectives
determined by the Committee, in each case as set forth in the applicable
Agreement. Subject to Section 7(d) (if applicable), the expiration date of
each Option shall be ten (10) years from the date of the grant thereof, or
at such earlier or later time as the Committee shall expressly state in the
applicable Agreement.
(ii) An
Option shall be exercised by delivering written notice of exercise to the
Company on any business day, at the Company’s principal office, on the form
specified by the Company. Such notice shall specify the number of shares of
Common Stock with respect to which the Option is being exercised and which
exercise method shall be used, as determined by the Committee in its sole
discretion, and the Committee may approve payment in whole or in part by an
alternative method, including (i) by means of any cashless exercise procedure
approved by the Committee, (ii) in the form of unrestricted shares of Common
Stock already owned by the Participant on the date of surrender to the extent
the shares of Common Stock having a Fair Market Value on the date of surrender
equal to the aggregate exercise price of the shares as to which such Option
shall be exercised,
provided
that,
in
the case of an Incentive Stock Option, the right to make payment in the form
of
already owned shares of Common Stock may be authorized only at the time of
grant, (iii) by check or payroll deduction or (iv) any combination of the
foregoing.
(iii) Certificates
for shares of Common Stock purchased upon the exercise of an Option shall be
issued in the name of or for the account of the Participant or other person
entitled to receive such shares, and delivered to the Participant or such other
person as soon as practicable following the effective date on which the Option
is exercised.
(iv) An
Agreement may stipulate that an Option which becomes exercisable shall be
subject to cancellation. In such event, the Committee shall determine the date
or dates, or event or events, upon which such cancellation shall become
effective, as the case may be, and those provisions shall be set forth in the
applicable Agreement.
(d)
Limitations
on Incentive Stock Options.
(i) The
exercise price per share of Common Stock deliverable upon the exercise of an
Incentive Stock Option shall be not less than the Fair Market Value of a share
of Common Stock as determined on the date of grant.
(ii) To
the extent that the aggregate Fair Market Value of shares of Common Stock with
respect to which Incentive Stock Options are exercisable for the first time
by a
Participant during any calendar year under the Plan and any other stock option
plan of the Company or an Affiliate shall exceed $100,000, such Options shall
be
treated as Nonqualified Stock Options. Such Fair Market Value shall be
determined as of the date on which each such Incentive Stock Option is granted.
(e)
No
Incentive Stock Option may be granted to an individual if, at the time of the
proposed grant, such individual owns (or is deemed to own under the Code) stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company unless (A) the exercise price of such
Incentive Stock Option is at least 110% of the Fair Market Value of a share
of
Common Stock at the time such Incentive Stock Option is granted and
(B) such Incentive Stock Option is not exercisable after the expiration of
five years from the date such Incentive Stock Option is granted.
(a)
Price.
At
the time of the grant of shares of Restricted Stock that do not represent
deferred compensation, the Committee shall determine the price, if any, to
be
paid by the Participant for each share of Restricted Stock subject to the Award.
(b)
Vesting
Date.
At
the time of the grant of shares of Restricted Stock, the Committee may establish
a Vesting Date or Vesting Dates with respect to such shares. The Committee
may
divide such shares into classes and assign a different Vesting Date for each
class. Provided that all conditions to the vesting of a share of Restricted
Stock imposed pursuant to Section 8(c) are satisfied, and except as
provided in Section 8(h), upon the occurrence of the Vesting Date with
respect to a share of Restricted Stock, such share shall vest and the
restrictions of Section 8(d) shall lapse.
(c)
Conditions
to Vesting.
At
the time of the grant of shares of Restricted Stock, the Committee may impose
such restrictions or conditions to the vesting of such shares as it, in its
absolute discretion, deems appropriate.
(d)
Restrictions
on Transfer Prior to Vesting.
Prior
to the vesting of a share of Restricted Stock, no transfer of a Participant’s
rights with respect to such share, whether voluntary or involuntary, by
operation of law or otherwise, shall be permitted. Immediately upon any attempt
to transfer such rights, such share, and all of the rights related thereto,
shall be forfeited by the Participant.
(e)
Dividends
on Restricted Stock.
The
Committee in its discretion may require that any dividends paid on shares of
Restricted Stock be held in escrow until all restrictions on such shares have
lapsed.
(f)
Issuance
of Certificates.
Following
the date of grant with respect to shares of Restricted Stock, the Company shall
cause to be issued a stock certificate, registered in the name of or for the
account of the Participant to whom such shares were granted, evidencing such
shares. Each such stock certificate shall bear the following legend:
The
transferability of this certificate and the shares of stock represented hereby
are subject to the restrictions, terms and conditions (including forfeiture
provisions and restrictions against transfer) contained in or imposed pursuant
to the General Steel Holdings, Inc. 2008 Equity Incentive
Plan.
Such
legend shall not be removed until such shares vest pursuant to the terms hereof.
Each
certificate issued pursuant to this Section 8(f), together with the stock
powers relating to the shares of Restricted Stock evidenced by such certificate,
shall be held by the Company unless the Committee determines otherwise.
(g)
Consequences
of Vesting.
Upon
the vesting of a share of Restricted Stock pursuant to the terms hereof, the
restrictions of Section 8(d) shall lapse with respect to such share.
Following the date on which a share of Restricted Stock vests, the Company
shall
cause to be delivered to the Participant to whom such shares were granted,
a
certificate evidencing such share, free of the legend set forth in
Section 8(f).
(h)
Effect
of Termination of Employment or Service.
Except
as set forth in Section 12(c), (d) or (e) or as set forth in the
applicable Agreement, upon the termination of a Participant’s employment or
service, for any reason other than For Cause, any and all shares to which
restrictions on transferability apply shall be immediately forfeited by the
Participant and transferred to, and reacquired by, the Company together with
any
dividends paid on such shares; provided that if the Committee, in its sole
and
absolute discretion, shall within thirty (30) days after such termination
of employment or service, notify the Participant in writing of its decision
not
to terminate the Participant’s rights in such shares, then the Participant shall
continue to be the owner of such shares subject to such continuing restrictions
as the Committee may prescribe in such notice. In the event of a forfeiture
of
shares pursuant to this section, the Company shall repay to the Participant
(or
the Participant’s estate) any amount paid by the Participant for such shares. In
the event that the Company requires a return of shares, it shall also have
the
right to require the return of all dividends paid on such shares, whether by
termination of any escrow arrangement under which such dividends are held or
otherwise.
(i) In
the event of the termination of a Participant’s employment or service For Cause,
any and all shares which have not vested shall be immediately forfeited by
the
Participant and transferred to, and reacquired by, the Company, together with
any dividends paid on such shares, in return for which the Company shall repay
to the Participant any amount paid by the Participant for such shares.
(j)
Special
Provisions Regarding Awards.
Notwithstanding
anything to the contrary contained herein, Restricted Stock granted pursuant
to
this Section 8 to Covered Employees, Consultants or Directors may be based
on the attainment of performance goals pre-established by the Committee. To
the
extent permitted under Section 162(m) of the Code (including, without
limitation, compliance with any requirements for shareholder approval), the
Committee may designate additional business criteria on which the performance
goals may be based or adjust, modify or amend the aforementioned business
criteria. Such shares of Restricted Stock shall be released from restrictions
only after the attainment of such performance measures has been certified by
the
Committee.
(a)
General.
Grants
of units of Phantom Stock may be granted by the Committee in its discretion,
provided that any such Award shall (except as otherwise provided in
Section 12, 13 or 14 hereof) have a final Vesting Date not earlier than the
first anniversary of the date of grant of the Award.
(b)
Vesting
Date.
At
the time of the grant of units of Phantom Stock, the Committee shall establish
a
Vesting Date or Vesting Dates with respect to such units (subject to the
provisions of Section 9(a) hereof). The Committee may divide such units
into classes and assign a different Vesting Date for each class. Provided that
all conditions to the vesting of a share of Phantom Stock imposed pursuant
to
Section 9(c) are satisfied, and except as provided in Section 9(d),
upon the occurrence of the Vesting Date with respect to a share of Phantom
Stock, such unit shall vest.
(c)
Benefit
Upon Vesting.
Upon
the vesting of a unit of Phantom Stock, the Participant shall be paid, within
30
days of the date on which such unit vests, an amount, in cash and/or shares
of
Common Stock, as determined by the Committee, equal to the sum of (1) the
Fair Market Value of a share of Common Stock on the date on which such share
of
Phantom Stock vests and (2) the aggregate amount of cash dividends paid
with respect to a share of Common Stock during the period commencing on the
date
on which the unit of Phantom Stock was granted and terminating on the date
on
which such unit vests.
(d)
Conditions
to Vesting.
At
the time of the grant of units of Phantom Stock, the Committee may impose such
restrictions or conditions to the vesting of such units as it, in its absolute
discretion, deems appropriate, to be contained in the Agreement.
(e)
Effect
of Termination of Employment or Service.
Except
as set forth in Section 12(c), (d) or (e) or as otherwise
provided in the applicable Agreement, units of Phantom Stock that have not
vested, together with any dividends credited on such units, shall be forfeited
upon the Participant’s termination of employment or service, for any reason.
(f)
Special
Provisions Regarding Awards.
Notwithstanding
anything to the contrary contained herein, the vesting of Phantom Stock granted
pursuant to this Section 9 to Covered Employees, Consultants or Directors
may be based on the attainment of performance criteria as described in
Section 8(j), in each case, as determined in accordance with generally
accepted accounting principles. No payment in respect of any such Phantom Stock
award shall be paid to a Covered Employee, Consultant or Director, until the
attainment of the respective performance measures have been certified by the
Committee.
Stock
Bonus Awards may be granted by the Committee in its discretion, provided that
any such Award shall be granted only in lieu of salary or cash bonuses payable
to the Participant and shall (except as otherwise provided in Section 12,
13 or 14 hereof) have a final Vesting Date not earlier than the first
anniversary of the date of grant of the Award. In the event that the Committee
grants a Stock Bonus, a certificate for the shares of Common Stock constituting
such Stock Bonus shall be issued in the name of the Participant to whom such
grant was made and delivered to such Participant as soon as practicable after
the date on which such Stock Bonus is payable. Each Stock Bonus Award granted
hereunder shall be payable within the earlier of (i) two and one half months
after the end of the fiscal year of the Company it is granted, or (ii) the
date
the related salary or cash bonus was otherwise to be paid.
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11.
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Other
Awards; Stock Appreciation Rights
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(a)
Other
forms of Awards (including any Stock Appreciation Rights, hereinafter “Other
Awards”) valued in whole or in part by reference to, or otherwise based on,
Common Stock may be granted either alone or in addition to other Awards under
the Plan. Other Awards may be granted by the Committee in its discretion,
provided that any such Other Award shall (except as otherwise provided in
Section 12, 13 or 14 hereof or with respect to Stock Appreciation Rights
granted in connection with an Option) have a final Vesting Date not earlier
than
the first anniversary of the date of grant of the Award. Subject to the
provisions of the Plan (including those set forth in the preceding sentence),
the Committee shall have sole and complete authority to determine the persons
to
whom and the time or times at which such Other Awards shall be granted, the
number of shares of Common Stock to be granted pursuant to such Other Awards
and
all other conditions of such Other Awards.
(b) A
Stock Appreciation Right may be granted in connection with an Option, either
at
the time of grant or at any time thereafter during the term of the Option,
or
may be granted unrelated to an Option.
(c) A
Stock Appreciation Right related to an Option shall require the holder, upon
exercise, to surrender such Option with respect to the number of shares as
to
which such Stock Appreciation Right is exercised, in order to receive cash
payment of any amount computed pursuant to Section 11(f). Such Option will,
to the extent surrendered, then cease to be exercisable.
(d) In
the case of Stock Appreciation Rights granted in relation to Options, if the
Appreciation Right covers as many shares as the related Option, the exercise
of
a related Option shall cause the number of shares covered by the Stock
Appreciation Right to be reduced by the number of shares with respect to which
the related Option is exercised. If the Stock Appreciation Right covers fewer
shares than the related Option, when a portion of the related Option is
exercised, the number of shares subject to the unexercised Stock Appreciation
Right shall be reduced only to the extent necessary so that the number of
remaining shares subject to the Stock Appreciation Right is not more than the
remaining shares subject to the Option.
(e) Subject
to Section 11(k) and to such rules and restrictions as the Committee may
impose, a Stock Appreciation Right granted in connection with an Option will
be
exercisable at such time or times, and only to the extent that a related Option
is exercisable, and will not be transferable except to the extent that such
related Option may be transferable.
(f) Upon
the exercise of a Stock Appreciation Right related to an Option, the holder
will
be entitled to receive payment of an amount determined by multiplying:
(i) The
difference obtained by subtracting the exercise price of a share of Common
Stock
specified in the related Option from the Fair Market Value of a share of Common
Stock on the date of exercise of such Stock Appreciation Right, by
(ii) The
number of shares as to which such Stock Appreciation Rights will have been
exercised.
Notwithstanding
anything herein to the contrary, payment of any Stock Appreciation Rights shall
comply with §409A of the Internal Revenue Code of 1986, as amended.
(g) A
Stock Appreciation Right granted without relationship to an Option will be
payable at such times as are specified in the Plan or any separate Agreement
with the Participant, but in no event after ten years from the date of grant.
(h) A
Stock Appreciation Right granted without relationship to an Option will entitle
the holder, upon exercise of the Stock Appreciation Right, to receive payment
of
an amount determined by multiplying:
(i) The
difference obtained by subtracting the Fair Market Value of a share of Common
Stock on the date the Stock Appreciation Right is granted from the Fair Market
Value of a share of Common Stock on the date of exercise of such Stock
Appreciation Right, by
(ii) the
number of shares as to which such Stock Appreciation Rights will have been
exercised.
(i) Notwithstanding
subsections (f) and (h) above, the Committee may place a limitation on
the amount payable upon exercise of a Stock Appreciation Right. Any such
limitation must be determined as of the date of grant and noted on the
instrument evidencing the Participant’s Stock Appreciation Right granted
hereunder.
(j) Payment
of the amount determined under subsections (f) and (h) above may be
made solely in whole shares of Common Stock valued at their Fair Market Value
on
the date of exercise of the Stock Appreciation Right or alternatively, in the
sole discretion of the Committee, solely in cash or a combination of cash and
shares. If the Committee decides that full payment will be made in shares of
Common Stock, and the amount payable results in a fractional share, payment
for
the fractional share will be made in cash.
(k) The
Committee may impose such additional conditions or limitations on the exercise
of a Stock Appreciation Right as it may deem necessary or desirable to secure
for holders of Stock Appreciation Rights the benefits of Rule 16b-3, or any
successor provision in effect at the time of grant or exercise of a Stock
Appreciation Right, to prevent the application of tax Code §409A or as it may
otherwise deem advisable.
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12.
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Termination
of Employment or Service
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(a) A
Participant who ceases (for any reason other than death, total and permanent
disability, Retirement or termination of employment For Cause) to be an
Employee, Consultant or Director of the Company or of an Affiliate may exercise
any Option, Stock Appreciation Right or Other Award to the extent that such
Award has vested on the date of such termination. Except for Nonqualified Stock
Options which shall be exercisable only within six (6) months after such
date of termination, and except as set forth in the next sentence or as
otherwise set forth in the Plan, such Option, Stock Appreciation Right or Other
Award shall be exercisable only within three (3) months after such date of
termination, or, if earlier, within the originally prescribed term of the Award,
unless the Committee shall set forth a different period in the applicable
Agreement. For purposes of the Plan, employment or service shall not be deemed
terminated by reason of a transfer to another employer which is the Company
or
an Affiliate. If any Option, Stock Appreciation Right or Other Award is not
exercised following the Participant’s termination within the time specified, the
Award shall terminate and the shares covered by such Option, Stock Appreciation
Right or Other Award shall revert to the Plan.
(b) A
Participant whose employment or service with the Company or an Affiliate is
terminated For Cause shall forthwith immediately upon notice of such termination
cease to have any right to exercise any Award, and the Award shall terminate
and
the shares covered by such Award shall revert to the Plan. For purposes of
the
Plan, termination “For Cause” shall be deemed to include (and is not limited to)
dishonesty with respect to the Company or any Affiliate, insubordination,
substantial malfeasance or non-feasance of duty, unauthorized disclosure of
confidential information, breach by a Participant of any provision of any
employment, nondisclosure, non-competition or similar agreement between the
Participant and the Company or any Affiliate, and conduct substantially
prejudicial to the business of the Company or an Affiliate. The determination
of
the Committee as to the existence of circumstances warranting a termination
For
Cause shall be conclusive. Any definition in an agreement between a Participant
and the Company or an Affiliate, which contains a conflicting definition of
For
Cause and which is in effect at the time of such termination, shall supersede
the definition in the Plan with respect to the Participant.
(c) If
a Participant ceases to be an Employee, Consultant or Director of the Company
or
of an Affiliate by reason of total and permanent disability, as determined
by
the Committee, any Award held by him or her on the date of disability shall
be
fully exercisable as of the date of such cessation. A disabled Participant
may
exercise such Award only within a period of one (1) year after the date of
such cessation or within such different period as may be determined by the
Committee and set forth in the applicable Agreement, or, if earlier, within
the
originally prescribed term of the Award. If any Award is not exercised following
the Participant’s total and permanent disability within the time specified, the
Award shall terminate and the shares covered by such Award shall revert to
the
Plan. For purposes of the Plan, a Participant shall be deemed to have a total
and permanent disability if such Participant is entitled to receive benefits
under the applicable long-term disability program of the Company, or, if no
such
program is in effect with respect to such Participant, if the Participant has
become totally and permanently disabled within the meaning of Section
409A(a)(2)(c) of the Code.
(d) If
a Participant dies while the Participant is an Employee, Consultant or Director
of the Company or of an Affiliate, any Award held by him at the date of death
shall be fully exercisable as of the date of the Participant’s death. A deceased
Participant’s legal representatives or one who acquires the Award by will or by
the laws of descent and distribution may exercise such Award only within a
period of one (1) year after the date of death or within such different
period as may be determined by the Committee and set forth in the applicable
Agreement, or, if earlier, within the originally prescribed term of the award.
If any Award is not exercised following the Participant’s death within the time
specified, the Award shall terminate and the shares covered by such Award shall
revert to the Plan.
(e) Unless
otherwise set forth in the applicable Agreement and to be applicable only to
Participants who are Employees, immediately upon a Participant’s Retirement,
such individual’s then unvested Awards, including those held by a permitted
transferee of such individual, shall automatically accelerate and become fully
vested for fifty percent (50%) of the number of shares covered by such
unvested Awards and for an additional ten percent (10%) of the number of
shares covered by such unvested Awards for every full year of employment by
the
Company or any of its Affiliates beyond ten (10) years, up to the remaining
amount of the unvested Award.
Except
as
set forth in the following paragraph, upon Retirement of a Participant, such
retired Participant (or permitted transferee of such individual)
may
exercise any then outstanding Awards to the extent vested only within a period
of one (1) year after the date of Retirement or within such different
period as may be determined by the Committee and set forth in the applicable
Agreement or, if earlier, within the originally prescribed term of the
Award.
If any
Award is not exercised following the Participant’s Retirement within the time
specified, the Award shall terminate and the shares covered by such Award shall
revert to the Plan. For purposes of this second paragraph of Section 12(e),
the term “Retirement” as to any Employee of the Company or any of its Affiliates
shall mean such person’s leaving the employment of the Company and its
Affiliates after reaching age 55 with ten (10) years of service with the
Company or its Affiliates, but not including pursuant to any termination For
Cause or pursuant to any termination for insufficient performance, as determined
by the Company.
Upon
Retirement of a Participant who is required to file statements with respect
to
securities of the Company pursuant to Section 16 of the Securities Exchange
Act of 1934, such retired Participant (or permitted transferee of such
individual) may exercise any then outstanding options held by such Participant,
to the extent vested as of the retirement date, that are Nonqualified Stock
Options for a period equal to the shorter of (x) the remaining term of the
applicable option on the retirement date; or (y) three (3) years from
the retirement date. If any such option is not exercised following the
Participant’s Retirement within the time specified, such Nonqualified Stock
Option shall terminate and the shares covered by such Nonqualified Stock Option
shall revert to the Plan. For purposes of this third paragraph of
Section 12(e), the term “Retirement” shall mean such termination of his or
her service or employment with the Company and its affiliates after reaching
age
55 and having either (i) ten (10) years of total service with the
Company or its affiliates or (ii) reached any age limit over the age of 55
that has been established by the Board of Directors of the Company as the
required age for retirement, but not including pursuant to any termination
For
Cause, as determined by the Company.
(f)
Leave
of Absence.
A
Participant to whom an Award has been granted under the Plan who is absent
from
work with the Company or with an Affiliate because of temporary disability,
or
who is on a permitted leave of absence for any purpose, shall not, during the
period of any such absence, be deemed by virtue of such absence alone, to have
terminated his employment with the Company or with an Affiliate except as the
Committee may otherwise expressly provide in the applicable Agreement.
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13.
|
Effect
of Corporate Transaction
|
(a)
Options.
In
the event of a Corporate Transaction, the Committee shall, prior to the
effective date of the Corporate Transaction, as to each outstanding Option
under
the Plan either (i) make appropriate provisions for the Options to be
assumed by the successor corporation or its parent or be replaced with a
comparable option to purchase shares of the capital stock of the successor
corporation or its parent; or (ii) upon written notice to the Participants
provide that all Options must be exercised and the Plan will terminate (all
Options having been made fully exercisable as set forth below in this
Section 13(f); or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the then aggregate Fair Market Value of the
shares subject to such Options (all Options having been made fully exercisable
as set forth below in this Section 13) over the aggregate Option price
thereof. Each outstanding Option under the Plan which is assumed in connection
with a Corporate Transaction or is otherwise to continue in effect shall be
appropriately adjusted, immediately after such Corporate Transaction, to apply
and pertain to the number and class of securities which would have been issued,
in consummation of such Corporate Transaction, to an actual holder of the same
number of shares of the Common Stock as are subject to such Option immediately
prior to such Corporate Transaction. Appropriate adjustments shall also be
made
to the Option price payable per share, provided the aggregate Option price
payable for such securities shall remain the same.
(b)
Other
Awards.
In
the event of a Corporate Transaction, the Committee shall, prior to the
effective date of the Corporate Transaction, as to each outstanding Award (other
than an Option) under the Plan either (i) make appropriate provisions for
the Awards to be assumed by the successor corporation or its parent or be
replaced with comparable Awards with respect to the successor corporation or
its
parent; (ii) provide that such Awards shall be fully vested and
exercisable, as applicable, prior to such Corporate Transaction and, to the
extent that such Awards (other than awards of Restricted Stock) are not
exercised prior to such Corporate Transaction, shall terminate upon the
consummation of the Corporate Transaction or (iii) terminate all such
Awards in exchange for a cash payment equal to the then aggregate Fair Market
Value of the shares subject to such Award (all Awards having been made fully
exercisable as set forth below in this Section 13), less any applicable
exercise price.
(c)
Involuntary
Employment Action.
If
at any time within two (2) years of the effective date of a Corporate
Transaction there is an Involuntary Employment Action with respect to any
Designated Employee, each then outstanding Award assumed or replaced under
this
Section and held by such Designated Employee (or a permitted transferee of
such
person) shall, upon the occurrence of such Involuntary Employment Action,
automatically accelerate so that each such Award shall immediately become fully
vested or exercisable, as applicable. Upon the occurrence of an Involuntary
Employment Action with respect to a Designated Employee, any outstanding Options
or Stock Appreciation Right held by such Designated Employee (and his or her
permitted transferees) shall be exercisable within one (1) year of the
Involuntary Employment Action or, if earlier, within the originally prescribed
term of the Option or Stock Appreciation Right. An “Involuntary Employment
Action” as to an Designated Employee shall mean the involuntary termination of
the Designated Employee’s employment with the Company or an Affiliate other than
For Cause, or the termination by the Designated Employee of his employment
with
the Company and its Affiliates upon the occurrence, without the Participant’s
express written consent, of any of the following circumstances unless such
circumstances are corrected (provided such circumstances are capable of
correction): (i) any adverse and material alteration and diminution in the
Participant’s position, title or responsibilities (other than a mere change in
title or reporting relationship) as they existed immediately prior to the
Corporate Transaction or as the same may be increased from time to time
thereafter, (ii) a reduction of the Participant’s annual base salary or
targeted bonus opportunity, in each case as in effect on the date prior to
the
Corporate Transaction or as the same may be increased from time to time
thereafter, or (iii) relocation of the offices at which the Participant is
employed which increases the Participant’s daily commute by more than 100 miles
on a round trip basis.
(d)
Determination
of Comparability.
The
determination of comparability under this Section shall be made by the Committee
and its determination shall be final, binding and conclusive.
(e)
Other
Adjustments.
The
class and number of securities available for issuance under the Plan on both
an
aggregate and per participant basis shall be appropriately adjusted by the
Committee to reflect the effect of the Corporate Transaction upon the Company’s
capital structure.
(f)
Termination
of the Plan.
In
the event the Company terminates the Plan or elects to cash out Options or
Stock
Appreciation Rights in accordance with clauses (ii) and (iii) of
paragraph (a) or (b) of this Section 13, then the exercisability
of each affected Award outstanding under the Plan shall be automatically
accelerated so that each such Award shall immediately prior to such Corporate
Transaction, become fully vested and may be exercised prior to such Corporate
Transaction for all or any portion of such Award. The Committee shall, in its
discretion, determine the timing and mechanics required to implement the
foregoing sentence.
|
14.
|
Acceleration
Upon Corporate Change in Control
|
In
the
event of a Corporate Change in Control then the exercisability or vesting of
each Award outstanding under the Plan shall be automatically accelerated so
that
each such Award shall immediately prior to such Corporate Change in Control,
become fully vested or exercisable for the full number of shares of the Common
Stock purchasable under an Option to the extent not previously exercised and
may
be exercised for all or any portion of such shares within the originally
prescribed term of the Option.
|
15.
|
Rights
as a Shareholder
|
No
person
shall have any rights as a shareholder with respect to any shares of Common
Stock covered by or relating to any Award until the date of issuance of a stock
certificate with respect to such shares. Except as otherwise expressly provided
in Section 3(b), no adjustment to any Award shall be made for dividends or
other rights for which the record date occurs prior to the date such stock
certificate is issued.
|
16.
|
No
Employment Rights; No Right to Award
|
Nothing
contained in the Plan or any Agreement shall confer upon any Participant any
right with respect to the continuation of employment by the Company or an
Affiliate or interfere in any way with the right of the Company or an Affiliate,
subject to the terms of any separate employment agreement to the contrary,
at
any time to terminate such employment or to increase or decrease the
compensation of the Participant. No person shall have any claim or right to
receive an Award hereunder. The Committee’s granting of an Award to a
Participant at any time shall neither require the Committee to grant any other
Award to such Participant or other person at any time or preclude the Committee
from making subsequent grants to such Participant or any other person.
(a) Notwithstanding
anything herein to the contrary, the Company shall not be obligated to cause
to
be issued or delivered any certificates evidencing shares of Common Stock
pursuant to the Plan unless and until the Company is advised by its counsel
that
the issuance and delivery of such certificates is in compliance with all
applicable laws, regulations of governmental authority and the requirements
of
any securities exchange on which shares of Common Stock are traded. The
Committee may require, as a condition of the issuance and delivery of
certificates evidencing shares of Common Stock pursuant to the terms hereof,
that the recipient of such shares make such agreements and representations,
and
that such certificates bear such legends, as the Committee, in its sole
discretion, deems necessary or desirable.
(b) The
transfer of any shares of Common Stock hereunder shall be effective only at
such
time as counsel to the Company shall have determined that the issuance and
delivery of such shares is in compliance with all applicable laws, regulations
of governmental authority and the requirements of any securities exchange on
which shares of Common Stock are traded. The Committee may, in its sole
discretion, defer the effectiveness of any transfer of shares of Common Stock
hereunder in order to allow the issuance of such shares to be made pursuant
to
registration or an exemption from registration or other methods for compliance
available under federal or state securities laws. The Committee shall inform
the
Participant in writing of its decision to defer the effectiveness of a transfer.
During the period of such deferral in connection with the exercise of an Option,
the Participant may, by written notice, withdraw such exercise and obtain the
refund of any amount paid with respect thereto.
Whenever
cash is to be paid pursuant to an Award, the Company or Affiliate by which
the
Participant is employed shall have the right to deduct therefrom an amount
sufficient to satisfy any federal, state and local withholding tax requirements
related thereto. Whenever shares of Common Stock are to be delivered pursuant
to
an Award, the Company shall have the right to require the Participant to remit
to the Company or Affiliate by which the Participant is employed in cash an
amount sufficient to satisfy any federal, state and local withholding tax
requirements related thereto.
|
19.
|
Notification
of Election Under Section 83(b) of the Code
|
If
any
Participant shall, in connection with the acquisition of shares of Common Stock
under the Plan, make the election permitted under Section 83(b) of the
Code, such Participant shall notify the Company of such election within 10
days
of filing notice of the election with the Internal Revenue Service.
|
20.
|
Notification
Upon Disqualifying Disposition Under Section 421(b) of the Code
|
With
respect to an Incentive Stock Option, the Participant holding such Option shall
notify the Company of any disposition of shares of Common Stock issued pursuant
to the exercise of such Option under the circumstances described in
Section 421(b) of the Code (relating to certain disqualifying
dispositions), within 10 days of such disposition. Each Agreement with respect
to an Incentive Stock Option shall require the Participant to notify the Company
of any disposition of shares of Common Stock issued pursuant to the exercise
of
such Option under the circumstances described in Section 421(b) of the Code
(relating to certain disqualifying dispositions), within 10 days of such
disposition.
|
21.
|
Amendment
or Termination of the Plan
|
No
amendment to the Plan which (i) increases the number of shares of Common
Stock issuable under the Plan (ii) materially changes the class of persons
eligible to participate in the Plan, (iii) would have the effect of
materially increasing the benefits accruing under the Plan to Participants
or
(iv) materially alters the provisions of the second paragraph of
Section 4 shall be effective without approval by the stockholders of the
Company. Except as set forth in the preceding sentence, the Board of Directors
may, at any time, suspend or terminate the Plan or revise or amend it in any
respect whatsoever; provided, however, that shareholder approval shall also
be
required for any such amendment if and to the extent the Board of Directors
determines that such approval is appropriate for purposes of satisfying Sections
162(m) or 422 of the Code or Rule 16b-3 or other applicable law or the
requirements of any securities exchange upon which the securities of the Company
trade. Nothing herein shall restrict the Committee’s ability to exercise its
discretionary authority pursuant to Section 4, which discretion may be
exercised without amendment to the Plan. No action hereunder may, without the
consent of a Participant, reduce the Participant’s rights under any outstanding
Award. Notwithstanding anything herein to the contrary, any amendment shall
be
invalid if it triggers taxation under §409A or otherwise violates sections of
the Internal Revenue Code of 1986, as amended, under which the Plan otherwise
intends to comply, including, but not limited to §83, §421 and
§422.
Awards
granted under the Plan shall not be transferable by a participant other than
(i) by will or by the laws of descent and distribution, or (ii) with
respect to Awards other than Incentive Stock Options, pursuant to a qualified
domestic relations order, as defined by the Code or Title 1 of the Employee
Retirement Income Security Act or the rules thereunder, or (iii) as
otherwise determined by the Committee. The designation of a beneficiary of
an
Award by a Participant shall not be deemed a transfer prohibited by this
Section. Except as provided in the preceding sentence, an Award shall be
exercisable, during a Participant’s lifetime, only by the Participant (or by his
or her legal representative) and shall not be assigned, pledged, or hypothecated
in any way (whether by operation of law or otherwise) and shall not be subject
to execution, attachment or similar process. Any attempted transfer, assignment,
pledge, hypothecation, or other disposition of any Award contrary to the
provisions of this Section, or the levy of any attachment or similar process
upon an Award, shall be null and void. Upon the death of a Participant,
outstanding Awards granted to such Participant may be exercised only by the
executor or administrator of the Participant’s estate or by a person who shall
have acquired the right to such exercise by will or by the laws of descent
and
distribution. No transfer of an Award by will or the laws of descent and
distribution shall be effective to bind the Company unless the Committee shall
have been furnished with (a) written notice thereof and with a copy of the
will and/or such evidence as the Committee may deem necessary to establish
the
validity of the transfer and (b) an agreement by the transferee to comply
with all the terms and conditions of the Award that are or would have been
applicable to the Participant and to be bound by the acknowledgments made by
the
Participant in connection with the grant of the Award.
|
23.
|
Dissolution
or Liquidation of the Company
|
Upon the dissolution or liquidation of the Company other than in connection
with
transactions to which Section 13 is applicable, all Awards granted
hereunder shall terminate and become null and void; provided, however, that
if
the rights hereunder of a Participant or one who acquired an Award by will
or by
the laws of descent and distribution have not otherwise terminated and expired,
the Participant or such person shall have the right immediately prior to such
dissolution or liquidation to exercise any Award granted hereunder to the extent
that the right to exercise such Award has accrued as of the date immediately
prior to such dissolution or liquidation. Awards of Restricted Stock that have
not vested as of the date of such dissolution or liquidation shall be forfeited
as of the date of such dissolution or liquidation.
|
24.
|
Effective
Date and Term of Plan
|
The
Plan
shall be subject to the requisite approval of the stockholders of the Company.
In the absence of such approval, any Awards shall be null and void. Unless
extended or earlier terminated by the Board of Directors, the right to grant
Awards under the Plan shall terminate on the tenth anniversary of the Effective
Date. No extension of the Plan shall operate to permit the grant of Incentive
Stock options following the tenth anniversary of the Effective Date. Awards
outstanding at Plan termination shall remain in effect according to their terms
and the provisions of the Plan.
The
Plan
shall be construed and enforced in accordance with the law of the State of
Nevada, without reference to its principles of conflicts of law, except to
the
extent that federal law supersedes such state law.
No
Participant shall have any claim to be granted any award under the Plan, and
there is no obligation for uniformity of treatment for Participants. Except
as
provided specifically herein, a Participant or a transferee of an Award shall
have no rights as a shareholder with respect to any shares covered by any Award
until the date of the issuance of a Common Stock certificate to him or her
for
such shares.
|
27.
|
Unfunded
Status of Awards
|
The
Plan
is intended to constitute an “unfunded” plan for incentive and deferred
compensation. With respect to any payments not yet made to a Participant
pursuant to an Award, nothing contained in the Plan or any Agreement shall
give
any such Participant any rights that are greater than those of a general
creditor of the Company.
No
fractional shares of Common Stock shall be issued or delivered pursuant to
the
Plan. The Committee shall determine whether cash, other Awards, or other
property shall be issued or paid in lieu of such fractional shares or whether
such fractional shares or any rights thereto shall be forfeited or otherwise
eliminated.
A
Participant may file with the Committee a written designation of a beneficiary
on such form as may be prescribed by the Committee and may, from time to time,
amend or revoke such designation. If no designated beneficiary survives the
Participant, the executor or administrator of the Participant’s estate shall be
deemed to be the Participant’s beneficiary.
The
Plan
is designed and intended to comply, to the extent applicable, with
Section 162(m) of the Code, and all provisions hereof shall be construed in
a manner to so comply.
If
any
provision of the Plan is held to be invalid or unenforceable, the other
provisions of the Plan shall not be affected but shall be applied as if the
invalid or unenforceable provision had not been included in the Plan.
The
foregoing General Steel Holdings, Inc. 2008 Equity Incentive Plan was duly
adopted by the Board of Directors of the Company on the 19
th
day of
June, 2008.
Proxy
Solicited on Behalf of the Board of Directors of
General
Steel Holdings, Inc.
the
Annual Meeting of Stockholders
To
Be Held At 10:00 A.M. On July 25, 2008
The
stockholder of General Steel Holdings, Inc. by signing this card hereby appoints
Zuosheng Yu and John Chen proxies for this card, with full power of
substitution, to vote on behalf of the shares of common stock of General Steel
Holdings, Inc. that the stockholder is entitled to vote at the Annual Meeting
of
Stockholders to be held on July 25, 2008, at 10:00 A.M. at the Kuntai
International Mansion Building, Suite 2315, Yi No. 12 Chaoyangmenwai Avenue,
Chaoyang District, Beijing, China 100020, and any adjournments
thereof.
This
Proxy, when properly executed, will be voted by the Proxies in the manner
designated below. If this Proxy is returned signed but without a clear voting
designation, the Proxies will vote FOR Items 1 and 2.
1.
To
elect nine directors of the Company to serve until the next Annual Meeting
of
shareholders and until their successors are duly elected and
qualified.
Directors:
Zuosheng Yu, John Chen, Danli Zhang, Ross Warner, John Wong, Qinghai Du,
Zhongkui Cao, Chris Wang, Fred Hsu
FOR
ALL
o
AGAINST
ALL
o
ABSTAIN
o
To
vote
against an individual director please write the name on the line.
___________________________________________________
2.
To
approve and ratify the appointment of Moore Stephens Wurth Frazer and Torbet,
LLP as the Company's independent auditors for the fiscal year ending December
31, 2008.
FOR
o
AGAINST
o
ABSTAIN
o
3.
To
approve and ratify the Company’s 2008 Equity Incentive Plan.
FOR
o
AGAINST
o
ABSTAIN
o
4.
To
transact such other business as may properly come before the Annual Meeting
or
any adjournment or postponement.
Whether
or not you plan to attend the Annual Meeting and regardless of the number of
shares you own, please date, sign and return this proxy card in the enclosed
envelope (which requires no postage if mailed in the United States).
(continued
on other side)
Reverse
side
THIS
PROXY WILL BE VOTED AS SPECIFIED ON THE REVERSE SIDE.
IF
NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 and
2.
The
undersigned hereby revokes any proxy or proxies heretofore given to vote upon
or
act with respect to such stock and hereby ratifies and confirms all that said
proxies, their substitutes, or any of them, may lawfully do by virtue hereof.
THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY.