Exhibit No. Description of Exhibit
4.1 1996 Employee Stock Purchase Plan.
5.1 Opinion of Battle Fowler LLP regarding the legality of the
securities being registered.
23.1 Consent of Price Waterhouse LLP.
23.2 Consent of Battle Fowler LLP (included in its opinion filed as
Exhibit 5.1 hereto).
24.1 Power of Attorney (included in the signature pages hereto).
C/M: 11834.0002 390366.2
UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC.
1996 EMPLOYEE STOCK PURCHASE PLAN
The Universal Stainless & Alloy Products, Inc. 1996 Employee Stock
Purchase Plan (the "Plan") is intended to provide eligible employees of the
Company and one or more of its Corporate Affiliates with the opportunity to
acquire a proprietary interest in the Company through participation in a plan
under Section 423 of the Internal Revenue Code of 1986, as amended (the
For purposes of administration of the Plan the following terms shall
have the meanings indicated:
Base Compensation means the regular base earnings paid to an Eligible
Employee by one or more Participating Companies during such individual's period
of participation in the Plan, plus (i) any salary deferral contributions made
by such individual to the Company's 401(k) Plan during such period and (ii) all
overtime payments, bonuses, commissions, and other incentive payments, but
excluding all contributions (other than Code Section 125 or Section 401(k)
contributions) made by the Company or its Corporate Affiliates for such
individual's benefit under any employee benefit or welfare plan now or
Board means the Board of Directors of the Company.
Company means Universal Stainless & Alloy Products, Inc., a Delaware
corporation, and any corporate successor to all or substantially all of the
assets or voting stock of Universal Stainless & Alloy Products, Inc. which
shall by appropriate action adopt the Plan.
Corporate Affiliate means any company that is either a "parent
corporation" or a "subsidiary corporation" of the Company (as determined in
accordance with Section 424(e) or (f), respectively, of the Code), including
any parent or subsidiary corporation which becomes such after the Effective
Effective Date means the first day of the initial purchase period
scheduled to commence upon the later of (i) July 1, 1996 or (ii) the effective
date of the S-8 Registration Statement covering the shares of Stock issuable
under the Plan. However, any Corporate Affiliate which becomes a Participating
Company in the Plan after the Effective Date shall designate a subsequent
Effective Date with respect to its employee-Participants.
Eligible Employee means any employee of the Company or any other
Participating Company person who is regularly employed for a period of more
than twenty (20) hours per week and more than five (5) months per calendar
Participant means any Eligible Employee of a Participating Company
who is actively participating in the Plan.
Participating Company means the Company and such Corporate Affiliate
or Affiliates as may be authorized from time to time by the Board to offer the
benefits of the Plan to their Eligible Employees. The Participating Companies
in the Plan as of the Effective Date are listed in attached Schedule A.
Plan Administrator shall have the meaning given such term in Article
Stock means shares of the common stock of the Company, par value
$0.001 per share.
The Plan shall be administered by the Board of Directors of the
Company (or a committee of "disinterested" directors no fewer in number than
required by Rule 16b-3 of the Securities and Exchange Commission ("Rule 16b-3")
as in effect with respect to the Company from time to time, which in either
case is referred to as the "Board") in accordance with Rule 16b-3. The Board
may from time to time select a committee or persons (the "Plan Administrators")
to be responsible for any matters for which a "disinterested administrator" is
not required by Rule 16b-3. Subject to the express provisions of the Plan, to
the overall supervision of the Board, and to the limitations of Section 423 of
the Code the Plan Administrator shall have full authority to administer and
interpret the Plan (a) in order to comply with the requirements of Section 423
of the Code and (b) in any other manner it believes to be desirable, and any
such interpretation shall be final and binding on all parties who have an
interest in the Plan.
IV. PURCHASE PERIODS
A. Stock shall be offered for purchase under the Plan through a
series of successive purchase periods until such time as (i) the maximum number
of shares of Stock available for issuance under the Plan shall have been issued
pursuant to purchase rights granted under the Plan or (ii) the Plan shall have
been sooner terminated in accordance with Article VII.J.
B. Except as set forth in this paragraph, each purchase period shall
have a duration of six months. The initial purchase period will begin upon the
later of (i) July 1, 1996 or (ii) the effective date of the S-8 Registration
Statement covering the shares of Stock issuable under the Plan, and will end on
December 31, 1996. The second purchase period
will begin on January 1, 1997 and end on June 30, 1997. Subsequent purchase
periods will begin on the successive July 1 or January 1.
C. The Participant shall be granted a separate purchase right for
each purchase period in which he or she participates. The purchase right shall
be granted on the first business day of the purchase period and shall be
automatically exercised on the last business day of the purchase period.
D. Under no circumstances shall any purchase rights granted under the
Plan be exercised, nor shall any shares of Stock be issued hereunder, until
such time as (i) the Plan shall have been approved by the Company's
stockholders and (ii) the Company shall have complied with all applicable
requirements of the Securities Act of 1933, as amended, all applicable listing
requirements of any securities exchange on which the Stock is listed and all
other applicable requirements established by law or regulation.
E. Except as required by Section 423 of the Code, the acquisition of
Stock through participation in the Plan for any purchase period shall neither
limit nor require the acquisition of Stock by the Participant in any subsequent
V. ELIGIBILITY AND PARTICIPATION
A. Each Eligible Employee of a Participating Company may begin
participation in the Plan on the first business day of any purchase period
following his or her commencement of employment with the Company or any
B. In order to participate in the Plan, an Eligible Employee must
complete the enrollment forms prescribed by the Plan Administrator (including a
purchase agreement and a payroll deduction authorization) and file such forms
with the Plan Administrator (or its designate) during the specified enrollment
period for a purchase period. Any Participant whose purchase right expires and
who has not withdrawn from the Plan will automatically be re-enrolled in the
Plan and granted a new purchase right on the first business day of the
succeeding purchase period.
C. The payroll deduction authorized by a Participant for purposes of
acquiring Stock under the Plan may be any whole percentage not in excess of ten
(10%) percent of the Base Compensation paid to be Participant during the
purchase period. The deduction rate so authorized shall continue in effect for
the entire purchase period and for each successive purchase period, unless the
Participant shall change the rate for a subsequent purchase period by filing
the appropriate form with the Plan Administrator (or its designate) prior to
the commencement of that purchase period. A Participant may discontinue his
participation in the Plan as provided in Section VII, but no other change can
be made during a purchase period and, specifically, a Participant may not alter
the amount of the Participant's payroll deductions for such purchase period.
Payroll deductions will automatically cease upon
the termination of the Participant's purchase right in accordance with Section
VII.D or E below.
VI. STOCK SUBJECT TO PLAN
A. The Stock purchasable by Participants under the Plan shall, solely
in the Board's discretion, be made available from either authorized but
unissued Stock or from reacquired Stock, including shares of Stock purchased on
the open market. The total number of shares which may be issued under the Plan
shall not exceed 90,000 shares (subject to adjustment under Section VI.B,
B. If any change is made to the Stock purchasable under the Plan by
reason of any stock divided, stock split, combination of shares,
recapitalization, or other change affecting the outstanding Common Stock of the
Company as a class without receipt of consideration, appropriate adjustments
shall be made by the Board to (i) the class and maximum number of shares
issuable over the term of the Plan, (ii) the class and maximum number of shares
purchasable per Participant under any one purchase right, and (iii) the class
and number of shares and the price per share of the Stock subject to each
purchase right at the time outstanding under the Plan.
VII. PURCHASE RIGHTS
Each Participant in the Plan for a particular purchase period shall
have the right to purchase Stock upon the terms and conditions set forth below
and shall execute a purchase agreement embodying such terms and conditions and
such other provisions (not inconsistent with the Plan) as the Plan
Administrator may deem advisable.
A. Purchase Price. The purchase price per share shall be the lesser
of (i) 85 percent of the fair market value of a share of Stock on the date on
which the purchase right is granted or (ii) 85 percent of the fair market value
of a share of Stock on the date the purchase right is exercised. For purposes
of determining such fair market value (and for all other valuation purposes
under the Plan), the fair market value of a share of Stock on any date shall be
the closing price per share of the Stock on such date, as reported on the
NASDAQ National Market system. If there are no sales of Stock on such day, then
the closing price for the Stock on the next preceding day for which such
closing price is quoted shall be the fair market value.
B. Number of Purchasable Shares. The number of shares purchasable by
a Participant upon the exercise of an outstanding purchase right shall be the
number of whole shares obtained by dividing the amount collected from the
Participant through payroll deductions during the purchase period for which
such purchase right is outstanding, together with any amount carried over from
the preceding purchase period pursuant to Section VII.F, by the purchase price
in effect for the purchase period. However, the maximum number of
shares purchasable by any Participant during any one purchase period shall not
exceed one hundred (100) shares (subject to adjustment under Section VI.B).
Under no circumstances shall purchase rights be granted under the
Plan to any Eligible Employee if such individual would, immediately after the
grant, own, (within the meaning of Code Section 424(d), or hold outstanding
options or other rights to purchase, stock possessing five (5%) percent or more
of the total combined voting power or value of all classes of stock of the
Company or any Corporate Affiliate.
C. Payment. Payment for Stock purchased under the Plan shall be
effected by means of the Participant's authorized payroll deductions. Such
deductions shall begin with the first pay check received after the commencement
date of the relevant purchase period and shall terminate with the last pay
check received during the relevant purchase period. The amounts so collected
shall be credited to the Participant's individual account under the Plan, but
no interest shall be paid on the balance from time to time outstanding in the
account. The amounts collected from a Participant may be commingled with the
general assets of the Company and may be used for general corporate purposes.
D. Termination of Purchase Rights.
(i) A Participant may terminate an outstanding purchase right under
the Plan by filing a prescribed notification form with the Plan Administrator
(or its designate) on or before ten (10) days before the end of any purchase
period (or such date as may be established by the Plan Administrator from time
to time). No further payroll deductions shall be collected from the Participant
with respect to the terminated purchase right, and the Participant shall have
the following election with respect to any payroll deductions for the purchase
period collected prior to the termination date: (a) have the Company refund the
payroll deductions which the Participant made in that purchase period with
respect to the terminated purchase right or (b) have such payroll deductions
held for the purchase of shares on the last business day of such purchase
period. If no such election is made, then such payroll deductions shall
automatically be refunded promptly after the close of such purchase period.
(ii) The termination of such purchase right shall be irrevocable. The
Participant may not subsequently rejoin the purchase period for which such
terminated purchase right was granted and may not participate in the next
purchase period. Thereafter in order to resume participation in any subsequent
purchase period, such individual must re-enroll in the Plan (by making a timely
filing of a new purchase agreement and payroll deduction authorization).
E. Termination of Employment/Change of Status. Except as otherwise
provided in this Section VII.E, if a Participant ceases to be employed by a
Participating Company while his or her purchase right remains outstanding, or
if there otherwise occurs a change in a Participant's employee status so that
the participant is no longer an Eligible
Employee while holding a purchase right, then the purchase right shall
immediately terminate upon the termination of employment or change in status,
and all sums credited to the Participant's individual account under the Plan
shall be promptly refunded to the Participant. However, if the Participant dies
or becomes permanently disabled while employed by a Participating Company, or
if the Participant ceases employment by reason of a leave of absence or
retirement, then the Participant (or the person or persons to whom the rights
of a deceased Participant under the Plan are transferred by will or the laws of
inheritance) shall have the election, exercisable until the last business day
of the purchase period in which the Participant retires, dies or becomes
permanently disabled or in which the leave of absence becomes a termination of
employment, to (i) withdraw all the funds credited to the Participants's
account at the time of his or her termination of employment or (ii) have such
funds held for the purchase of shares on the last business day of such purchase
period. If no such election is made, then such funds shall be held for the
purchase of shares on the last business day of such purchase period. In no
event, however, shall payroll deductions be added to the Participant's account
following termination of employment.
For purposes of the Plan: (i) unless the Plan Administrator
determines otherwise, a leave of absence shall be considered a termination of
employment only if (and at the time that) it exceeds 90 days and the
Participant's right to re-employment is not guaranteed by stature or contract,
(ii) the Participant shall be deemed to be permanently disabled if he/she is
unable to engage in any substantial gainful employment by reason of any
medically determinable physical or mental impairment expected to result in
death or to be of continuous duration of at least twelve (12) months, and (iii)
retirement is limited to terminations of employment occurring after a
Participant has attained age sixty-five (65).
F. Stock Purchase. The Stock subject to the purchase right of each
Participant (other than Participants whose purchase rights have previously
terminated in accordance with Section VII.D or E above) shall automatically be
purchased on the Participant's behalf on the last business day of the purchase
period. The purchase shall be effected by applying the amount credited to each
Participant's account on the last date of the purchase period to the purchase
of whole shares of Stock (subject to the limitation in Section VII.B on the
maximum number of purchasable shares) at the purchase price in effect for such
purchase period. Any amount remaining in the Participant's account after such
purchase shall be held for the purchase of Stock in the next purchase period.
However, any amount not applied to the purchase of Stock by reason of the
limitation in Section VII.B shall be refunded promptly after the close of the
G. Proration of Purchase Rights. If the total number of shares of
Stock which are to be purchased pursuant to outstanding purchase rights on any
particular date exceeds the number of shares then available for issuance under
the Plan, the Plan Administrator shall make a pro-rata allocation of the
available shares on a uniform and nondiscriminatory basis, and any amounts
credited to the accounts of Participants shall, to the extent not applied to
the purchase of Stock, be refunded to the Participants.
H. Rights as Stockholder. A Participant shall have no rights as a
stockholder with respect to shares covered by his or her outstanding purchase
right under the Plan until the shares are actually purchased on the
Participant's behalf in accordance with Section VII.F. No adjustments shall be
made for dividends, distributions or other rights for which the record date is
before the date of such purchase.
In lieu of delivering a stock certificate to each Participant, the
Plan Administrator may in its discretion implement a designated broker program
and direct the Company to issue a single stock certificate to a broker
designated by the Plan Administrator. Such designated broker shall establish an
account for each Participant in the Plan and shall effect transfers and sales
from each such account at the direction of the specified Participant. To
facilitate the designated broker program, the Plan Administrator may require,
as a condition to participation in the Plan, that a Participant agree to the
issuance of his or her stock certificates directly to the designated broker.
I. Assignability. No purchase right granted under the Plan shall be
assignable or transferable by the Participant other than by will or by the laws
of descent and distribution, and during the Participant's lifetime, the
purchase right shall be exercisable only by the Participant.
J. Merger or Liquidation of Company. In the event the Company or its
stockholders enter into an agreement to dispose of all or substantially all of
the assets or outstanding capital stock of the Company by means of:
(i) a sale, merger, or other reorganization (other than a
reorganization effected primarily to change the State in which the
Company is incorporated),
(ii) a reverse merger in which the Company is the surviving
corporation but in which all of the Company's outstanding voting
stock is transferred to the acquiring entity or its wholly owned
(iii) a liquidation of the Company,
all outstanding purchase rights under the Plan shall automatically be exercised
immediately before the effective date of such sale, merger, reorganization,
reverse merger, or liquidation by applying all sums previously collected from
Participants during the purchase period in which such transaction occurs to the
purchase of whole shares of Stock, subject however, to the applicable
limitations of Section VII.B.
VIII. ACCRUAL LIMITATIONS
A. No participant shall be entitled to accrue rights to acquire Stock
pursuant to any purchase right outstanding under the Plan if and to the extent
such accrual, when aggregated with (i) rights to purchase Stock accrued under
other purchase rights granted to the Participant under the Plan and (ii)
similar rights accrued by the Participant under other employee stock purchase
plans (within the meaning of Code Section 423) of the Company or its corporate
Affiliates, would otherwise permit the Participant to purchase more than
$25,000 in value of stock of the Company or any Corporate Affiliate (determined
on the basis of the fair market value of such stock on the date or dates such
rights re granted to the Participant) for each calendar year such rights are at
any time outstanding.
B. For purposes of applying the accrual limitations of Section
VIII.A, the right to acquire Stock pursuant to each purchase right granted
under the Plan shall accrue as follows:
(i) The right to acquire Stock under a purchase right shall
accrue as and when the purchase right first becomes exercisable on
the last business day of the purchase period for which the right is
(ii) No right to acquire Stock under any outstanding purchase
right shall accrue to the extent the Participant has already accrued
in the same calendar year the right to acquire $25,000 in value of
Stock (determined on the basis of the fair market value on the date
or dates of grant) pursuant to one or more other purchase rights
granted to the Participant during such calendar year.
(iii) If (and to the extent that) by reason of the Section
VIII.A limitations, the Participant's purchase right does not accrue
on the last business day of the particular purchase period for which
the right is granted, then the payroll deductions which the
Participant made during that purchase period with respect to such
purchase right shall be promptly refunded.
C. In the event of a conflict between the provisions of this Article
VIII and one or more provisions of the Plan or any instrument issued
thereunder, the provisions of this Article VIII shall be controlling.
IX. AMENDMENT AND TERMINATION
The Board may from time to time alter, amend, suspend, or discontinue
the Plan; provided, however, that no such action shall adversely affect
purchase rights at the time outstanding under the Plan and provided, further,
that no such action of the Board may, without the approval of the Company's
stockholders, increase the number of shares available under the Plan or the
maximum number of shares that any one Participant may purchase under the Plan
during a single purchase period (provided however, that the Plan Administrator
shall have the authority to affect adjustments pursuant to Sections VI.B and
VII.B without stockholder approval), alter the purchase price formula so as to
reduce the purchase price specified in the Plan, otherwise materially increase
the benefits accruing to Participants under the Plan, or materially modify the
requirements for eligibility to participate in the Plan.
X. GENERAL PROVISIONS
A. The Plan shall become effective on the Effective Date, provided
that (i) no purchase rights shall be granted under the Plan until the Plan
shall have been approved by the Company's stockholders and (ii) the Company
shall have complied with all applicable listing requirements of any securities
exchange on which the Stock is listed and all other applicable requirements
established by law or regulation. In the event stockholder approval is not
obtained, or such Company compliance is to effected, with twelve (12) months
after the date on which the Plan is adopted by the Board, the Plan shall
terminate and have no further force or effect and all sums collected from
Participants during the initial purchase period hereunder shall be refunded.
B. The Plan shall terminate upon the earlier of (i) the last business
days of the first purchase period ending in 2005 or (ii) the date on which all
shares available for issuance under the Plan have been sold pursuant to
purchase rights exercised under the Plan.
C. All costs and expenses incurred in the administration of the Plan
shall be paid by the Company.
D. Neither the action of the company in establishing the Plan, nor
any action taken under the Plan by the board or the Plan Administrator, nor any
provision of the Plan itself shall be construed so as to grant any person the
right to remain in the employ of the company or any Corporate Affiliate for any
period of specific duration, and any person's employment may be terminated at
any time, with or without cause.
E. The provisions of the Plan shall be governed by the laws of the
Commonwealth of Pennsylvania without resort to the State's conflict of laws
[Battle Fowler LLP letterhead]
October 4, 1996
Universal Stainless & Alloy Products, Inc.
600 Mayer Street
Bridgeville, PA 15017
Re: Universal Stainless & Alloy Products, Inc.
Registration Statement on Form S-8 Filed in
Connection with the 1996 Employee Stock Purchase Plan
Ladies and Gentlemen:
We have acted as counsel for Universal Stainless & Alloy Products,
Inc., a Delaware corporation (the "Company"), in connection with the
preparation and filing of a registration statement on Form S-8 (the "S-8
Registration Statement"), pursuant to which the Company proposes to offer and
sell up to 90,000 shares ("Employee Shares") of its common stock, par value
$0.001 per share (the "Common Stock"). You have requested that we furnish our
opinion as to the matters hereinafter set forth.
In this connection we have examined the following documents:
1. A copy of the Amended and Restated Certificate of Incorporation
of the Company, as certified by the Secretary of State of the
State of Delaware on September 3, 1996;
2. The By-Laws of the Company, as certified by the Secretary of the
3. The minute books of the Company, including (a) the resolutions
of the Board of Directors of the Company (the "Board"), dated
March 29, 1996, approving the adoption of the Company's 1996
Employee Stock Purchase Plan (the "Plan"), (b) the resolutions
C/M: 11834.0000 403502.2
Universal Stainless & Alloy Products, Inc. October 4, 1996
the Board, dated September 25, 1996, (i) reserving the Employee
Shares for future issuance pursuant to the Plan and (ii)
authorizing, among other things, the issuance of the Employee
Shares pursuant to the Plan and the filing of the S-8
4. The Plan;
5. The S-8 Registration Statement; and
6. Certificates or telegrams of public officials as to matters set
forth therein and certificates of representatives of the Company
as to matters set forth therein.
In rendering this opinion, we have assumed the capacity to sign and
the genuineness of all signatures of all persons executing agreements,
instruments or documents examined or relied upon by us, the authenticity of all
agreements, instruments or documents submitted to us as originals and the
conformity with the original agreements, instruments or documents of all
agreements, instruments or documents submitted to us as copies.
With respect to matters of fact, we have relied upon the written
statements and certificates of officers of the Company and certificates of
public officials. We have not independently verified the accuracy of the
matters set forth in the written statements or certificates upon which we have
relied, including the organization, existence, good standing, assets, business
or affairs of the Company, nor have we undertaken any lien, intellectual
property, suit or judgment searches or searches of court dockets in any
We are not admitted to the practice of law in any jurisdiction but
the State of New York, and we do not express any opinion as to the laws of
other states or jurisdictions other than the federal law of the United States
and the General Corporation Law of the State of Delaware. No opinion is
expressed as to the effect that the law of any other jurisdiction may have upon
the subject matter of the opinion expressed herein under conflicts of law
principles, rules and regulations or otherwise.
Except for the opinions set forth in the immediately following
paragraph, we express no opinions and no opinions should be implied.
C/M: 11834.0000 403502.2
Universal Stainless & Alloy Products, Inc. October 4, 1996
Based upon and subject to the foregoing, we are of the opinion that
the Employee Shares have been duly authorized for issuance pursuant to the Plan
and, when issued and delivered against payment therefor and otherwise in the
manner described in the Plan and in the resolutions of the Board authorizing
the same, will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
S-8 Registration Statement and to the use of the name of our firm therein. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required by Section 7 of the Securities Act of 1933, as
Very truly yours,
/s/ Battle Fowler LLP
C/M: 11834.0000 403502.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated January 31, 1996, which appears on
page 20 of the 1995 Annual Report to Shareholders of Universal Stainless &
Alloy Products, Inc. (the Company), which is incorporated by reference in the
Company's Annual Report on Form 10-K for the year ended December 31, 1995.
PRICE WATERHOUSE LLP
October 4, 1996
C/M 11834.0000 409756.1