7.	Equity Plans :

Restricted Stock Units and Performance Share Units

Pursuant to the Amended and Restated Olympic Steel

2007

Omnibus Incentive Plan (Plan), the Company

may

grant stock options, stock appreciation rights, restricted shares, restricted share units, performance shares, and other stock- and cash-based awards to employees and Directors of, and consultants to, the Company and its affiliates. Under the Plan,

1,000,000

shares of common stock are available for equity grants.

March

13,

2017

and

May

2016,

the Compensation Committee of the Company’s Board of Directors approved the grant of

3,501

and

3,094

restricted stock units (RSUs), respectively, to each non-employee Director. Subject to the terms of the Plan and the RSU agreement, the RSUs vest after

one

year of service (from the date of grant). The RSUs are not converted into shares of common stock until the director either resigns or is terminated from the Board of Directors. The fair value of each RSU was estimated to be the closing price of the Company’s common stock on the date of the grant, which was

$19.99

and

$22.62

March

31,

2017

and

May

2016,

respectively.

July

2016,

the Company created a new Senior Management Stock Incentive Program (the New Plan) for certain participants. Under the New Plan, each participant is awarded RSUs with a dollar value equal to

10%

of the participant’s base salary, up to an annual

maximum of

$17,500.

The RSUs have a

five

-year vesting period and the RSUs will convert into the right to receive shares of common stock upon a participant’s retirement, or earlier upon the participant’s death or disability or upon a change in control of the Company. The carbon and specialty metals flat products segments adopted the New Plan on

July

2016

and the tubular and pipe products segment adopted the New Plan on

January

2017.

Prior to

July

2016,

the Company’s Senior Management Compensation Program included an equity component in order to encourage more ownership of common stock by the senior management (the Old Plan). The Old Plan imposed stock ownership requirements upon the participants. Each participant was required to own at least

750

shares of common stock for each year that the participant participated in the Old Plan. Any participant that failed to meet the stock ownership requirements would be ineligible to receive any equity awards under the Company’s equity compensation plans, including the Plan, until the participant satisfied the ownership requirements. To assist participants in meeting the stock ownership requirements, on an annual basis, if a participant purchased

500

shares of common stock on the open market, the Company awarded that participant

250

shares of common stock. During

2016

and

2015,

the Company matched

2,500

and

9,000

shares, respectively. Additionally, any participant who continued to comply with the stock ownership requirements as of the

five

-year,

-year and

-year anniversaries of the participant’s participation in the Senior Management Compensation Program would receive a restricted stock unit award with a dollar value of

$25

thousand,

$50

thousand,

$75

thousand,

$100

thousand and

$100

thousand, respectively. Restricted stock unit awards would convert into the right to receive shares of common stock upon a participant’s retirement, or earlier upon the participant’s death or disability or upon a change in control of the Company. The carbon and specialty metals flat products segments terminated this plan on

July

2016

and the tubular and pipe products segment terminated the plan on

January

2017.

As part of the termination of the Old Plan and the transition to the New Plan, participants were paid the RSU grants that were earned to date, or a pro-rata amount of the RSUs earned, depending on the participants’ length of time they participated in the plan. After the payment of the RSUs noted above, the remaining liability of approximately

$1.0

million was reversed during

2016

in accordance with ASC No.

718.

During the

third

quarter of

2016,

the Company adopted a formal RSU award program for employees who are promoted to an executive level position. During the

third

quarter of

2016,

Andrew Greiff received

10,573

RSUs upon his promotion to Executive Vice President and Chief Operating Officer. These RSUs vest on the

fifth

anniversary of his promotion.

Stock-based compensation expense recognized on RSUs for the

three

months ended

March

31,

2017

and

2016,

respectively, is summarized in the following table:

	For the Three Months Ended
	March 31,
(in thousands, except per share data)	2017		2016
RSU expense before taxes of New Plan	$	120	$	-
RSU expense before taxes of Old Plan	$	-	$	239
RSU expense after taxes	$	73	$	146

All pre-tax charges related to RSUs were included in the caption “Administrative and general” on the accompanying Consolidated Statements of Comprehensive Income.

The following table summarizes the activity related to RSUs for the

three

months ended

March

31,

2017:

	Number of			Weighted Average
	Shares			Granted Price
Outstanding at December 31, 2016		421,486		$	19.92
Granted		50,033			20.47
Converted into shares		(2,798	)		15.18
Forfeited		-			-
Outstanding at March 31, 2017		468,721		$	20.01
Vested at March 31, 2017		426,069		$	19.73