NORTHAMERICAN GALVANIZING & COATINGS, INC. 2009INCENTIVE STOCK PLAN (Amendedand Restated as of December 4, 2009)

The purpose of this Plan is to promote the interests of North American Galvanizing & Coatings, Inc., (the “Company”) by authorizing the Committee to grant Options and Stock Appreciation Rights and to make Stock Grants to Key Employees and Directors and to make Stock Unit Grants to Directors in order (1) to attract and retain Key Employees and Directors, (2) to provide an additional incentive to each Key Employee and Director to work to increase the Stock value, (3) to provide each Key Employee and Director with a stake in the future of the Company which corresponds to the stake of each of the Company’s shareholders, and (4) to tie each Director’s compensation to the long-term Stock value.  This Plan document contains various amendments approved by the Board after the Plan was approved by the shareholders July 29, 2009.  The shareholder-approved Plan replaced and superseded the North American Galvanizing & Coatings, Inc., 2004 Stock Incentive Plan, as amended.  This amended and restated Plan document also incorporates and supersedes the North American Galvanizing & Coatings, Inc., Director Stock Unit Program that was adopted in connection with the adoption of the 2004 Incentive Stock Plan July 21, 2004.  This amended and restated Plan document is effective as of October 1, 2009 and supersedes all previous versions of the Plan and the Director Stock Unit Program.

2.1 Account - means the bookkeeping account maintained by the Committee to show for each Director as of any date all Stock Unit Grant credits made for such

Director under this Plan, the adjustments to such credits and any distributions related to such Account.

2.2 Affiliate - means any organization (other than a Subsidiary) that would be treated as under common control with the Company under § 414(c) of the Code if “50 percent” were substituted for “80 percent” in the income tax regulations under § 414(c) of the Code.

 

2.4 Beneficiary - means for each Director the person designated as such by the Director on the form provided for this purpose or, if no such person is so designated or if no such person survives the Director, the Director’s estate.

2.7 Change Effective Date - - means either the date which includes the “closing” of the transaction which makes a Change in Control effective if the Change in Control is made effective through a transaction which has a “closing” or the date a Change in Control is reported in accordance with applicable law as effective to the Securities and Exchange Commission if the Change in Control is made effective other than through a transaction which has a “closing”.

2.10 Committee - means a committee of the Board which shall have at least 2 members, each of whom shall be appointed by and shall serve at the pleasure of the Board and shall come within the definition of a “non-employee director” under Rule 16b-3 and an “outside director” under § 162(m) of the Code.

2.12 Deferral Period - means the period described in § 10.4(b) and the period described in § 10.4(c).

2.13 Director - means any member of the Board.

2.14 Elective Deferral Period - means the period described in § 10.4(c).

2.15 Fair Market Value - means either (a) the NASDAQ Official Closing Price for the applicable date or (b) if the NASDAQ Official Closing Price is not available for the applicable date, the NASDAQ Official Closing Price for the immediately preceding business day or (c) if no such NASDAQ Official Closing Price quotation is available,

(c) the current fair market value of a share of Stock that the Committee acting in good faith determines through the reasonable application of a reasonable valuation method which takes into consideration in applying its methodology all available information material to the value of the Company, considering factors including (as applicable) (1) the value of the Company’s tangible and intangible assets, (2) the present value of the Company’s anticipated future cash-flows, (3) the market value of equity interests in similar companies engaged in trades or businesses substantially similar to those engaged in by the Company, the value of which can be readily determined through nondiscretionary, objective means (such as through trading prices on an established securities market or an amount paid in an arms-length private transaction), (4) recent arm’s length transactions involving the sale or transfer of shares of Stock, and (5) other relevant factors such as control premiums or discounts for lack of marketability and whether the valuation method is used for other purposes that have a material economic effect on the Company, the holders of Stock or the Company’s creditors.

 

2.18 Key Employee - means an employee of the Company or any Subsidiary or Parent or Affiliate to whom the Committee decides for reasons sufficient to the Committee to make a grant under this Plan.

2.19 NASDAQ Official Closing Price - means the price of a share of Stock as determined using the NASDAQ process for identifying the NASDAQ market-specific closing price for NASDAQ-listed issues.

2.24 Option Certificate - means the certificate (whether in electronic or written form) which sets forth the terms and conditions of an Option granted under this Plan.

2.25 Option Price - means the price which shall be paid to purchase one share of Stock upon the exercise of an Option granted under this Plan.

2.26 Outside Director - means a member of the Board who is not an employee of the Company or a Parent or Subsidiary or Affiliate.

2.27 Parent - means any corporation which is a parent corporation (within the meaning of § 424(e) of the Code) of the Company.

2.28 Plan - means this North American Galvanizing & Coatings, Inc. 2009 Incentive Stock Plan as effective as of the date approved by the shareholders of the Company and as amended from time to time thereafter.

2.29 Preexisting Plan - means the North American Galvanizing & Coatings, Inc. 2004 Incentive Stock Plan, as such plan has been amended from time to time up to the date this Plan is effective.

2.30 Rule 16b-3 - means the exemption under Rule 16b-3 to Section 16(b) of the 1934 Act or any successor to such rule.

2.31 SAR Value - means the value assigned by the Committee to a share of Stock in connection with the grant of a Stock Appreciation Right under § 8.

2.32 Stock - means the $0.10 par value common stock of the Company.

2.33 Stock Appreciation Right - means a right which is granted under § 8 to receive the appreciation in a share of Stock.

2.34 Stock Appreciation Right Certificate - means the certificate (whether in electronic or written form) which sets forth the terms and conditions of a Stock Appreciation Right which is not granted as part of an Option.

2.35 Stock Grant - means a grant under § 9 which is designed to result in the issuance of the number of shares of Stock described in such grant.

 

2.37 Stock Unit Grant - means a grant under § 10 which shall be designed to result in the issuance of whole shares of Stock and cash in lieu of any fractional share (based on the average Fair Market Value of a share of Stock over the 10 trading days immediately before the date of the issuance of such Stock).

2.38 Subsidiary - means a corporation which is a subsidiary corporation (within the meaning of § 424(f) of the Code) of the Company.

2.39 Ten Percent Shareholder - means a person who owns (after taking into account the attribution rules of § 424(d) of the Code) more than ten percent of the total combined voting power of all classes of stock of either the Company, a Subsidiary or Parent.

3.1 Shares Reserved.  There shall (subject to § 14) be reserved for issuance under this Plan (a) 2,500,000  shares of Stock plus (b) the 124,898 shares of Stock which would remain available for issuance under the Preexisting Plan if shares were issued on August 1, 2009, the effective date of this Plan, sufficient to satisfy grants then outstanding under such plan and the North American Galvanizing & Coatings, Inc. Director Stock Unit Program plus (c) the number of shares of Stock subject to grants under the Preexisting Plan which are outstanding on the effective date of this Plan and which are forfeited or expire on or after such effective date in accordance with the terms of such grants or are cancelled; provided, however, (d) no more than the number of shares of Stock described in § 3.1(a) and § 3.1(b) shall be issued in connection with the exercise of ISOs and (e) nothing in this Plan shall affect any grants under the Preexisting Plan which are outstanding on the effective date of this Plan until such time, if any, that any shares of Stock subject to such grants are forfeited or grants respecting any shares of Stock expire on or after such effective date in accordance with the terms of such grants or such grants are cancelled.

3.2 Source of Shares.  The shares of Stock described in § 3.1 shall be reserved to the extent that the Company deems appropriate from authorized but unissued shares of Stock and from shares of Stock which have been reacquired by the Company.

3.3 Reduction and Restoration of Shares Reserved.  All shares of Stock reserved for issuance under § 3.1 shall remain available for issuance under this Plan until issued pursuant to the exercise of an Option or a Stock Appreciation Right or issued pursuant to a Stock Grant or Stock Unit Grant; provided,

3.4 Use of Proceeds.  The proceeds which the Company receives from the sale of any shares of Stock under this Plan shall be used for general corporate purposes and shall be added to the general funds of the Company.

3.5 Grant Limits.  Subject to Section 14, no Key Employee or Director in any calendar year shall be granted an Option to purchase more than 200,000 shares of Stock or a Stock Appreciation Right based on the appreciation with respect to more than 200,000 shares of Stock.  If a Key Employee or Director is granted both an Option and a Stock Appreciation Right in any calendar year, however, the total of the number of Shares subject to the Option and the number of shares with respect to which the Stock appreciation is based shall not exceed 200,000.  Notwithstanding the above limits, the Committee shall have the discretion to exceed any such limits if deemed necessary or appropriate in connection with the hiring of any individual who, when hired, would be a Key Employee.

for under this Plan and, further, the Committee shall have the power to interpret this Plan and (subject to § 15 and § 16 and Rule 16b-3) to take such other action in the administration and operation of this Plan as the Committee deems equitable under the circumstances, which action shall be binding on the Company, on each affected Key Employee or Director and on each other person directly or indirectly affected by such action.  Furthermore, the Committee as a condition to making any grant under this Plan to any Key Employee or Director shall have the right to require him or her to execute an agreement which makes the Key Employee or Director subject to non-competition provisions and other restrictive covenants which run in favor of the Company.

7.1 Committee Action.  The Committee acting in its absolute discretion shall have the right to grant Options to Key Employees and to Directors under this Plan from time to time to purchase shares of Stock, and Options may be granted for any reason the Committee deems appropriate, including as a substitute for compensation otherwise payable in cash.

7.2 Option Certificate.  Each grant of an Option shall be evidenced by an Option Certificate, and each Option Certificate shall set forth whether the Option is an ISO or a Non-ISO and shall set forth such other terms and conditions of such grant as the Committee acting in its absolute discretion deems consistent with the terms of this Plan; however, (a) if the Committee grants an ISO and a Non-ISO to a Key Employee on the same date, the right of the Key Employee to exercise the ISO shall not be conditioned on his or her failure to exercise the Non-ISO and (b) no Option Certificate shall provide for the automatic grant of any new Option upon the exercise of an Option subject to such Option Certificate.

7.3 $100,000 Limit.  No Option shall be treated as an ISO to the extent that the aggregate Fair Market Value of the Stock subject to the Option which would first become exercisable in any calendar year exceeds $100,000.  Any such excess shall instead automatically be treated as a Non-ISO.  The Committee shall interpret and administer the ISO limitation set forth in this § 7.3 in accordance with § 422(d) of the Code, and the Committee shall treat this § 7.3 as in effect only for those periods for which § 422(d) of the Code is in effect.

7.4 Option Price.  The Option Price for each share of Stock subject to an Option shall be no less than the Fair Market Value of a share of Stock on the date the Option is granted; provided, however, if the Option is an ISO granted to a Key Employee who is a Ten Percent Shareholder, the Option Price for each share of Stock subject to such ISO shall be no less than 110% of the Fair Market Value of a share of Stock on the date such ISO is granted.  The Committee shall not (except in accordance with § 14 and § 15) take any action absent the approval of the Company’s shareholders

 (whether through an amendment, a cancellation, making replacement grants or exchanges or any other means) to directly or indirectly reduce the Option Price of any outstanding Option or to make a tender offer for any Option if the Option Price for such Option on the effective date of such tender offer exceeds the then Fair Market Value of a share of Stock subject to such Option.

7.5 Payment.  The Option Price shall be payable in full upon the exercise of any Option and, at the discretion of the Committee, an Option Certificate can provide for the payment of the Option Price either in cash, by check, in Stock or through any cashless exercise procedure which is acceptable to the Committee, or in any combination of such forms of payment.  Any payment made in Stock shall be treated as equal to the Fair Market Value of such Stock on the date action acceptable to the Committee is taken to tender to the Committee or its delegate.

8.1 Committee Action.  The Committee acting in its absolute discretion shall have the right to grant Stock Appreciation Rights to Key Employees and to Directors under this Plan from time to time, and each Stock Appreciation Right grant shall be evidenced by a Stock Appreciation Right Certificate or, if such Stock Appreciation Right is granted as part of an Option, shall be evidenced by the Option Certificate for the related Option.  Stock Appreciation Rights may be granted for any reason the Committee deems appropriate, including as a substitute for compensation otherwise payable in cash.  The Committee shall not (except in accordance with § 14 and § 15)

 

 take any action absent the approval of the Company’s shareholders (whether through an amendment, a cancellation, making replacement grants or exchanges or any other means) to directly or indirectly reduce the SAR Value of any outstanding Stock Appreciation Right or to make a tender offer for any Stock Appreciation Right if the SAR Value for such Stock Appreciation Right on the effective date of such tender offer exceeds the then Fair Market Value of a share of Stock with respect to which the appreciation in such Stock Appreciation Right is based.

8.3 Exercise.  A Stock Appreciation Right shall be exercisable to the extent vested only when the Fair Market Value of a share of Stock on which the right to appreciation is based exceeds the SAR Value for such share, and the payment, if any, due on exercise shall be based on such excess with respect to the number of shares of Stock to which the exercise relates.  A Key Employee or Director upon the exercise of his or her Stock Appreciation Right shall receive a payment from the Company in cash or in Stock issued under this Plan, or in a combination of cash and Stock, and the number of shares of Stock issued shall be based on the Fair Market Value of a share of Stock on the date the Stock Appreciation Right is exercised.  The Committee acting in its absolute discretion shall have the right to determine the form and time of any payment under this § 8.3.

9.1 Committee Action.  The Committee acting in its absolute discretion shall have the right to make Stock Grants to Key Employees and to Directors, and Stock Grants may be made for any reason the Committee deems appropriate, including as a substitute for compensation otherwise payable in cash.  Each Stock Grant shall be evidenced by a Stock Grant Certificate, and each Stock Grant Certificate shall set forth the conditions, if any, under which Stock will be issued under the Stock Grant and the

10.1 Outside Directors.  In order to tie each Outside Director’s compensation to the long-term value of the Stock, the Company shall defer 100% of each Outside Director’s fees each calendar year.  The deferred amounts shall be converted into a Stock Unit Grant at the average of the Fair Market Value for a share of Stock for the 10

trading days before the date the director fees for Outside Directors otherwise would have been payable in cash.

10.2 Inside Directors.  In order to tie a portion of each Inside Director’s compensation to the long-term value of the Stock, the Company shall defer for each Inside Director each calendar year a dollar amount equal to 100% of the deferred director fees for Outside Directors.  Any deferrals for Inside Directors shall be matched by the Company at the same rate that applies to the required deferrals for Outside Directors under § 10.3.  The deferrals for each Inside Director shall be effected from their base salary or other cash compensation to coincide with the deferrals for Outside Directors, and the deferrals for Inside Directors shall be converted into a Stock Unit Grant at the same time and in accordance with the same procedure followed for Outside Directors.

10.3 Matching Grants.  The Company shall match 100% of each Director’s deferred fees.  A Director’s matching grant under this § 10.3 will be deferred and converted into a Stock Unit Grant at the same time and under the same procedure as his or her deferrals are converted into a Stock Unit Grant.

10.5 Payment.  When any deferrals become payable at the end of a Deferral Period or become payable under § 10.4(d), payment shall be made (subject to applicable withholdings) in whole shares of Stock and cash in lieu of a fractional share (based on the average of the Fair Market Value for a share of Stock for the 10 trading days before the date as of which payment is made).  The Company shall make a payment as soon as practicable after a deferral becomes payable.   A payment due a Director shall be made to his or her Beneficiary if the Director dies before the payment is made.

10.6 Non-Forfeitable Account and Account Adjustments.  A Director’s interest in his or her Account shall be non-forfeitable.  The number of shares described in a Stock Unit Grant credited to a Director’s Account shall be adjusted at the same time and in the same manner as Stock Grants made under this Plan.

10.7 General Assets.  All cash distributions to, or on behalf of, a Director under this § 10 shall be made from the Company’s general assets, and any claim by a Director or by his or her Beneficiary against the Company for any cash distribution under this Plan shall be treated the same as a claim of any general and unsecured creditor of the Company.

10.8 No Liability.  No Director and no Beneficiary shall have the right to look to, or have any claim whatsoever against, any officer, director, employee or agent of the Company in his or her individual capacity for the distribution of any Account.

10.9 Rabbi Trust.  The Company, at the discretion of the Committee, may establish a revocable “rabbi trust” which is a part of this Plan and transfer a number of shares of Stock to the trustee of such trust which matches the number of Stock Unit Grants made pursuant to this § 10.

Company that he or she will not sell or offer for sale any of such Stock unless a registration statement shall be in effect with respect to such Stock under the 1933 Act and any applicable state securities law or he or she shall have furnished to the Company an opinion in form and substance satisfactory to the Company of legal counsel satisfactory to the Company that such registration is not required.  Certificates or other evidence of ownership representing the Stock transferred upon the exercise of an Option or Stock Appreciation Right or upon the lapse of the forfeiture conditions, if any, on any Stock Grant or issued pursuant to a Stock Unit Grant may at the discretion of the Company bear a legend to the effect  that such Stock has not been registered under the 1933 Act or any applicable state securities law and that such Stock cannot be sold or offered for sale in the absence of an effective registration statement as to such Stock under the 1933 Act and any applicable state securities law or an opinion in form and substance satisfactory to the Company of legal counsel satisfactory to the Company that such registration is not required.

14.1 Capital Structure.  The grant limits described in § 3.5, the number, kind or class (or any combination thereof) of shares of Stock subject to outstanding Options and Stock Appreciation Rights granted under this Plan and the Option Price of such Options and the SAR Value of such Stock Appreciation Rights as well as the number, kind or class (or any combination thereof) of shares of Stock subject to outstanding Stock Grants or Stock Unit Grants made under this Plan shall be adjusted by the Committee in a reasonable and equitable manner to preserve immediately after

14.2 Shares Reserved.  If any adjustment is made with respect to any outstanding Option, Stock Appreciation Right, Stock Grant or Stock Unit Grant under § 14.1, then the Committee shall adjust the number, kind or class (or any combination thereof) of shares of Stock reserved under § 3.1.  The Committee shall have the discretion to limit such adjustment to account only for the number, kind and class of shares of Stock subject to each such Option, Stock Appreciation Right, Stock Grant and Stock Unit Grant as adjusted under § 14.1 or to further adjust such number, kind or class (or any combination thereof) of shares of Stock reserved under § 3.1 to account for any reduction in the total number of shares of Stock then reserved under § 3.1 which would result from the events described in § 14.1(a) and § 14.1(b) if no action was taken by the Committee under this § 14.2.  The Committee may make any adjustment provided for in this § 14.2 without seeking the approval of the Company’s shareholders for such adjustment unless the Committee acting on the advice of counsel determines that such approval is required under applicable law or the rules of the stock exchange on which shares of Stock are traded.

14.3 Transactions Described in § 424 of the Code.  If there is a  corporate transaction described in § 424(a) of the Code which does not constitute a Change in Control of the Company, the Committee as part of any such transaction shall have the right to make Stock Grants and Option and Stock Appreciation Right grants (without regard to any limitations set forth under § 3.5 of this Plan) to effect the assumption of, or

the substitution for, outstanding stock grants and option and stock appreciation right grants previously made by any other corporation to the extent that such corporate transaction calls for such substitution or assumption of such outstanding stock grants and stock option and stock appreciation right grants.  Furthermore, if the Committee makes any such grants as part of any such transaction, the Committee shall have the right to increase the number of shares of Stock available for issuance under § 3.1 by the number of shares of Stock subject to such grants without seeking the approval of the Company’s shareholders for such adjustment unless such approval is required under applicable law or the rules of the stock exchange on which shares of Stock are traded.

14.4 Fractional Shares.  If any adjustment under this § 14 would create a fractional share of Stock or a right to acquire a fractional share of Stock under any Option, Stock Appreciation Right or Stock Grant, such fractional share shall be disregarded and the number of shares of Stock reserved under this Plan and the number subject to any Options, Stock Appreciation Right grants and Stock Grants shall be the next lower number of shares of Stock, rounding all fractions downward.  An adjustment made under this § 14 by the Committee shall be conclusive and binding on all affected persons.

the right (to the extent expressly required as part of such transaction) to cancel such Options, Stock Appreciation Rights and Stock Grants after providing each Key Employee and Director a reasonable period to exercise his or her Options and Stock Appreciation Rights and to take such other action as necessary or appropriate to receive the Stock subject to any Stock Grants; provided, if any issuance or forfeiture condition described in this § 15 relates to satisfying any performance goal and there is a target for such goal, such issuance or forfeiture condition shall be deemed satisfied under this § 15 only to the extent of such target unless such target has been exceeded before the Change Effective Date, in which event such issuance or forfeiture condition shall be deemed satisfied to the extent such target had been so exceeded.

17.1 Shareholder Rights.  No Key Employee or Director shall have any rights as a shareholder of the Company as a result of the grant of an Option or a Stock Appreciation Right or a Stock Unit Grant pending the actual delivery of the Stock subject to such Option or Stock Appreciation Right or Stock Unit Grant to such Key Employee or Director.  A Key Employee’s or a Director’s rights as a shareholder in the shares of Stock which remain subject to forfeiture under § 9.2(b) shall be set forth in the related Stock Grant Certificate.

17.2 No Contract of Employment.  The grant of an Option or a Stock Appreciation Right or a Stock Grant or Stock Unit Grant to a Key Employee or Director under this Plan shall not constitute a contract of employment or a right to continue to serve on the Board and shall not confer on a Key Employee or Director any rights upon his or her termination of employment or service in addition to those rights, if any, expressly set forth in this Plan or the related Option Certificate, Stock Appreciation Right Certificate, or Stock Grant Certificate.

17.3 Tax Withholding.  Each Option, Stock Appreciation Right, Stock Grant and Stock Unit Grant shall be made subject to the condition that the Key Employee or Director consents to whatever action the Committee directs to at least satisfy the statutory federal and state tax withholding requirements, if any, which the Company determines are applicable to the exercise of such Option or Stock Appreciation Right or to the satisfaction of any forfeiture condition with respect to Stock subject to a Stock

 

Grant issued in the name of the Key Employee or Director or any payment made pursuant to a Stock Unit Grant.  No withholding shall be effected under this Plan which exceeds the federal and state tax withholding requirements.

17.4 Construction.  All references to sections (§) are to sections (§) of this Plan unless otherwise indicated.  This Plan shall be construed under the laws of the State of Delaware.  Each term set forth in § 2 shall, unless otherwise stated, have the meaning set forth opposite such term for purposes of this Plan and, for purposes of such definitions, the singular shall include the plural and the plural shall include the singular.  Finally, if there is any conflict between the terms of this Plan and the terms of any Option Certificate, Stock Appreciation Right Certificate or Stock Grant Certificate, the terms of this Plan shall control.

17.5 Other Conditions.  Each Option Certificate, Stock Appreciation Right  Certificate or Stock Grant Certificate may require that a Key Employee or a Director (as a condition to the exercise of an Option or a Stock Appreciation Right or the issuance of Stock subject to a Stock Grant) enter into any agreement or make such representations prepared by the Company, including (without limitation) any agreement which restricts the transfer of Stock acquired pursuant to the exercise of an Option or a Stock Appreciation Right or a Stock Grant or provides for the repurchase of such Stock by the Company.  The Company also may condition any payment under § 10 on a Director signing such an agreement or making such representations.

17.6 Rule 16b-3.  The Committee shall have the right to amend any Option, Stock Appreciation Right, Stock Grant or Stock Unit Grant to withhold or otherwise restrict the transfer of any Stock or cash under this Plan to a Key Employee or Director as the Committee deems appropriate in order to satisfy any condition or requirement under Rule 16b-3 to the extent Rule 16 of the 1934 Act might be applicable to such grant or transfer.

17.7 Coordination with Employment Agreements and Other Agreements.  If the Company enters into an employment agreement or other agreement with a Key Employee or Director which expressly provides for the acceleration in vesting of an outstanding Option, Stock Appreciation Right or Stock Grant or for the extension of the deadline to exercise any rights under an outstanding Option, Stock Appreciation Right or Stock Grant, any such acceleration or extension shall be deemed effected pursuant to, and in accordance with, the terms of such outstanding Option, Stock Appreciation Right or Stock Grant and this Plan even if such employment agreement or other agreement is first effective after the date the outstanding Option or Stock Appreciation Right was granted or the Stock Grant was made.

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute this Plan to evidence its adoption of this Plan.