SUPPLEMENTAL RETIREMENT PLAN
FOR EXECUTIVES OF
CARPENTER TECHNOLOGY CORPORATION
EFFECTIVE DECEMBER 13, 1979
AS AMENDED APRIL 23, 1996
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SUPPLEMENTAL RETIREMENT PLAN
FOR EXECUTIVES OF
CARPENTER TECHNOLOGY CORPORATION
Effective December 13, 1979
As Amended April 23, 1996
1. Purpose
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The purpose of this Plan is to attract, retain and motivate
designated employees of Carpenter Technology Corporation
(the "Corporation") who are Participants in the Plan by
providing supplemental pension and death benefits to enhance
their economic security during their active careers with the
Corporation and in Retirement.
2. Definitions
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(A) "Annual Base Formula Retirement Benefit" shall mean the annual
benefit computed to measure total annual retirement income after
normal Retirement age, as provided in Section 6.
(B) "Annual Supplemental Retirement Benefit" shall mean the
annual benefit to be paid from the Plan, as provided in
Section 7, and shall be paid in accordance with the
provisions of Section 5.
(C) "Board" shall mean the Board of Directors of Carpenter
Technology Corporation.
(D) "Consecutive Five-Year Calculation Period" shall mean
any of the periods of five consecutive calculation
years created under the definition of "average monthly
earnings" found in the General Retirement Plan.
(E) "Disabled" shall mean totally disabled as described in, and
which results in, the Participant's eligibility to receive
benefits under the Corporation's Long Term Disability Plan.
(F) "Former Participant" shall mean any person who has
previously been a Participant in this Plan and was
either (i) a Participant for at least three years or
(ii) an employee of the Company for at least ten years.
(G) "General Retirement Plan" shall mean the Corporation's
"General Retirement Plan for Employees of Carpenter
Technology Corporation" as in effect on the last date
of a Participant's employment with the Corporation as a
participant under the General Retirement Plan.
(H) "Participant" shall mean any person included in the Plan,
as provided in Section 3 and shall also mean a Former
Participant except as otherwise provided in Section 6.
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(I) "Plan" shall mean the Supplemental Retirement Plan for
Executives of Carpenter Technology Corporation.
(J) "Retirement" shall mean the date of retirement as
defined in the General Retirement Plan.
(K) "Spouse" shall mean the Participant's spouse as defined
in section 4.5(a)(1) of the General Retirement Plan.
3. Participants
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Participants in the Plan will consist of such employees of
the Corporation as the Board in its sole discretion may from
time to time designate. Participation in the Plan will
terminate only
(A) upon termination of employment of a Participant for any
reason other than Retirement under conditions where
benefits are payable under Section 7 (except that a
Former Participant shall be eligible to receive any
previously accrued benefit under this Plan), or
(B) when further participation is canceled by the Board (except
that a Former Participant shall be eligible to receive any
previously accrued benefit under this Plan), or
(C) when a Participant performs services for the Corporation
solely as an independent contractor or consultant (except
that such Participant shall continue to receive any
previously accrued benefit under this Plan), or
(D) notwithstanding anything to the contrary contained in (A),
(B) or (C) above, when a Participant competes with the
Corporation as provided in the Supplemental Retirement
Agreement referenced in Section 4 hereof, (in which case
no further payments will be made under the Plan).
4. Supplemental Retirement Agreement
---------------------------------
Each Participant, as a condition precedent to becoming a
Participant, will enter into an agreement with the
Corporation, in a form supplied by and satisfactory to the
Corporation, which will, inter alia,
(A) set forth the provisions of the benefits of this Plan,
(B) permit the Corporation, in its sole discretion, to
insure the Participant's life under an individual life
insurance policy in which the Corporation is the owner
and beneficiary at no cost to the Participant, and
(C) contain a noncompetition provision.
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5. Benefits
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(A) Each Participant who shall retire under the conditions set
forth in Section 7 will receive an Annual Supplemental
Retirement Benefit paid from the general assets of the
Corporation for a period of fifteen years commencing as
provided herein. Such benefit will be paid in consecutive
quarter yearly payments on the first business day of January,
April, July and October (hereinafter individually referred to
as the "Quarterly Payment Date") for the immediately
preceding calendar quarters ended, December 31, March 31,
June 30 and September 30, respectively. The initial payment
shall be made on the first Quarterly Payment Date following
the Participant's Retirement, or, at the election of a
Disabled Participant, commencing upon any subsequent
Quarterly Payment Date which occurs while the Participant
remains Disabled, but in no event later than the Quarterly
Payment Date following the earlier of the Participant's
cessation of disability or the attainment of age 65.
Proration shall be made for a short calendar quarter and
calculated on a 90 day per quarter basis.
(B) In the event of the death of a Participant after Retirement
and before the entire number of said quarterly payments have
been paid, such remaining unpaid quarterly payments will be
paid to the last beneficiary designated in writing by the
Participant to, and received by, the Pension Board or, in the
absence or failure of any such designation or the designated
beneficiary fails to survive for the said fifteen year period,
to the surviving Spouse of the Participant, or in the absence
of such Spouse, to the Participant's estate. In the event the
designated beneficiary fails to survive and the Participant's
Spouse does not survive for the said fifteen years, the Pension
Board may elect to make a lump sum payment of the unpaid amount
to the Participant's estate, or the Spouse's estate, or the
beneficiary's estate, as the Pension Board may determine in its
sole discretion to be fair and equitable, said lump sum payment
being the present value of the remaining payments, determined in
accordance with the average rate of interest published by the
Pension Benefit Guaranty Corporation for immediate annuities for
the 36 months immediately preceding the date of such payment.
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(C) In the event of the death of a Participant before Retirement when
the Participant would have been eligible to receive retirement
benefits under either Section 7(A) or 7(B), the Normal or Early
Supplemental Retirement Benefit to which the Participant would
have been entitled had he retired on the date of his death will
be paid to the last beneficiary designated in writing by the
Participant to, and received by, the Pension Board or, in the
absence or failure of any such designation or the designated
beneficiary fails to survive for the said fifteen year period, to
the surviving Spouse of the Participant, or, in the absence of
such Spouse, to the Participant's estate. Such benefit will be
determined as of the date of death of the Participant and will be
paid in accordance with the payment procedures in Section 5(A).
In the event the designated beneficiary fails to survive and the
Participant's Spouse does not survive for the said fifteen years,
the Pension Board may elect to make a lump sum payment of the
unpaid amount to the Participant's estate, or the Spouse's estate,
or the beneficiary's estate, as the Pension Board may determine in
its sole discretion to be fair and equitable, said lump sum pay-
ment being the present value of the remaining payments, determined
in accordance with the average rate of interest published by the
Pension Benefit Guaranty Corporation for immediate annuities for
the 36 months immediately preceding the date of such payment.
(D) No benefit payable under this Plan shall be subject in any way to
alienation, sale, transfer, assignment, pledge, attachment,
garnishment, execution, or encumbrance of any kind, and any
attempt to accomplish the same shall be void and of no effect.
6. Annual Base Formula Retirement Benefit
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The Annual Base Formula Retirement Benefit shall be calculated at the
date of Retirement or in the case of a Former Participant at the
termination of participation and will be equal to
(A) the Participant's or Former Participant's average annual earnings
calculated by multiplying the "average monthly earnings" (as
determined for pension purposes under the General Retirement Plan)
by 12 (or in the event the Participant or Former Participant has
insufficient service to create a Consecutive Five-Year Calculation
Period, the average annual earnings calculated from such years of
service and fractions thereof, rounded to the nearest month) [in
either event, if the Participant had eligible compensation reduced
under the General Retirement Plan to comply with section 401(a)(17)
of the Internal Revenue Code of 1986, and the regulations there-
under, as amended, or has deferred compensation under any deferred
compensation plan of the Corporation, other than any deferred
compensation previously included in the definition of "earnings"
contained in the General Retirement Plan, such deferred and/or
reduced compensation shall be added, for the sole purpose of
determining the benefit under this Section, to the Participant's
earnings in the year the Participant would have been credited with
such earnings under the General Retirement Plan but for such
deferral and/or reduction],
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(B) multiplied by a percentage which is
(l) five percent for each year of service, or fraction thereof,
with the Corporation up to a maximum of ten years, that an
individual has been designated a Participant in this Plan
subsequent to December 13, 1979, plus
(2) (with respect to Participants and Former Participants who
became Participants before October 1, 1988) two percent for
each other year of service or fraction thereof with the
Corporation, or its subsidiaries; or
(3) (with respect to Participants and Former Participants who
became Participants on or after October 1, 1988 and retire
prior to January 1, 1997) 1.26 percent for each other year
of service or fraction thereof with the Corporation, or its
subsidiaries; or
(4) (with respect to Participants and Former Participants who
became Participants on or after October 1, 1988 and retire
after December 31, 1996) 1.3 percent for each year of
service up to 20 years and 1.4 percent for each additional
year of service or fraction thereof with the Corporation, or
its subsidiaries;
provided, however, that the aggregate of the percentages of this
Subparagraph 6(B) shall not exceed the sum of 60% plus one-quarter
percent per year for each year or fraction thereof for such
service exceeding 30 years,
(C) reduced by the sum of the following (such reduction to commence and
be fixed as of the respective calculation dates hereinafter stated):
(l) the Participant's accrued pension benefits calculated to be
payable from any other defined benefit pension plans (including
but not limited to the General Retirement Plan, the Benefit
Equalization Plan, the Earnings Adjustment Plan, the Officers'
Supplemental Retirement Plan, and any pension plans from other
prior employment) as of the respective date or dates of earliest
entitlement or, if later, the date of retirement under such
pension plans, before any actuarial reduction for option
election; provided, however, that any such reduction shall not
include the portion of any other pension benefit resulting from
the Participant's express contribution, nor any benefits attri-
butable to a defined contribution entitlement and
(2) the amount of the Primary Social Security Retirement Benefit
calculated to be payable as of the date of earliest entitlement
or, if later, the date of Retirement hereunder.
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7. Annual Supplemental Retirement Benefits
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(A) Normal Retirement.
(1) A Participant shall receive upon Retirement a
Normal Supplemental Retirement Benefit if he has
attained (a) age 62 or older with five or more
years of service with the Corporation or its
subsidiaries, or (b) thirty years of service with
the Corporation or its subsidiaries.
(2) The amount of such benefit will be the Annual Base Formula
Retirement Benefit, as set forth in Section 6.
(B) Early Retirement.
(1) In the event of Retirement before attainment of
eligibility for Normal Retirement, a Participant
shall receive an Early Supplemental Retirement
benefit if he is then vested under the General
Retirement Plan.
(2) The amount of such benefit will be equal to the
Annual Base Formula Retirement Benefit, as set
forth in Section 6(A) and 6(B), reduced to its
equivalent actuarial value from age 62 to the date
of initial payment to the Participant based on the
average rate of interest published by the Pension
Benefit Guaranty Corporation for immediate
annuities for the immediately preceding 36 months,
and subsequently adjusted for any further
reduction required under Section 6(C).
(C) Mutual Consent Retirement.
(1) A Participant shall receive upon Retirement
hereunder with fifteen or more years' service with
the Corporation or its subsidiaries, a Mutual
Consent Retirement if: (a) he is entitled to
retire under the General Retirement Plan, and (b)
both the Participant and the Corporation agree
that his Retirement under this Plan would be
mutually beneficial.
(2) The amount of such benefit will be the Annual Base
Formula Retirement Benefit, as set forth in
Section 6.
(D) Notwithstanding anything to the contrary contained in
this Plan, no Participant, Spouse or other beneficiary
may become entitled to benefits under this Plan without
the Participant or Former Participant first completing
five consecutive years of service with the Corporation
or its subsidiaries, unless otherwise provided in
writing and expressly authorized by Board approval.
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8. General Provisions
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(A) The administration of this Plan shall be by the Pension
Board appointed by the Board under the provisions of
the General Retirement Plan. Any interpretation of
this Plan shall be by the Compensation and Stock Option
Committee of the Board.
(B) The benefits provided by this Plan will be paid from
the general assets of the Corporation or otherwise as
the Board may from time to time determine.
(C) The Board reserves the right at any time to modify or
amend in whole or in part any or all of the provisions
of the Plan, subject to the provisions of the
Supplemental Retirement Agreement between the
Corporation and each Participant.
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