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Exhibit 10.35
FORM OF
TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM
AWARD AGREEMENT
Allegheny Technologies Incorporated (the "COMPANY") and the award recipient
named below ("PARTICIPANT") enter into this Total Shareholder Return Incentive
Compensation Program Agreement effective as of March 23, 2001.
Participant: [full name]
PARTICIPANT TO COMPLETE THE FOLLOWING CHART
(Please print)
Street Address
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City/State/Zip Code
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Social Security Number
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WHEREAS, the Company has adopted the Allegheny Technologies Incorporated 2000
Incentive Plan (the "PLAN") and, in accordance with the Plan, has adopted
Administrative Rules for the Total Shareholder Return Incentive Compensation
Program (the "TSRP") as a portion of the Plan to (i) assist the Company retain
and motivate key management employees; (ii) reward key management employees for
the overall success of the Company; and (iii) provide a means of encouraging key
management employees to acquire and hold shares of Company Common Stock.
WHEREAS, the TSRP replaces the Performance Share Program ("PSP") portion of the
Company's compensation program and, as provided in Section 5 of the Terms and
Conditions attached hereto, as a condition to receiving this TSR Award, the
Participant must surrender each outstanding PSP Award, subject to the Change in
Control provisions of Section 5.1 of the Terms and Conditions;
WHEREAS, the TSRP provides that each TSR Target Award made under the TSRP shall
be evidenced by an Award Agreement between the Company and the key management
employee who receives a TRS Target Award under the TSRP setting forth the terms
and conditions of such TSR Target Award;
WHEREAS, the Company desires to make a TSR Target Award to the Participant and
evidence such TSR Target Award by this Award Agreement and the Participant,
having read and understood the Plan and the TSRP, is willing to enter into this
Award Agreement on the terms and conditions set forth herein.
NOW THEREFORE, in consideration of the covenants and agreements herein contained
and intending to be legally bound, the parties hereto agree with each other as
follows:
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Subject to the attainment of the Performance Levels described below and to the
terms and conditions of the Plan, the TSRP and the Terms and Conditions of Award
attached hereto and incorporated herein by reference, by which Participant
agrees to be bound, the Company awards to Participant the Award described below,
with respect to the Performance Period described below:
PERFORMANCE PERIOD: January 1, 2001 through December 31, 2003
TSR TARGET AWARD: ______ Shares of Company Common Stock
[equals base salary at 1/1/01 times ___% (which is the Participant's target
award opportunity as a percent of salary) divided by $14.75 (which is the
average closing price for the 30 trading days prior to January 1, 2001)]
PERFORMANCE LEVELS: The following table shows the performance award relationship
under the TSRP for the 2001-2003 performance period:
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Outcome Relative to Peer Group TSR
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Three-Year Percentile Percent of Target
Level of Performance Ranking in TSR Award Earned
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Below Threshold Below 35th percentile 0%
Threshold 35th percentile 50%
Target 50th percentile 100%
Excellent 75th percentile 200%
NOTE: Interpolation between points will be made on a straight
line basis on each scale. Below the 35th percentile and above
the 75th percentile, there will be no interpolation.
THE ACTUAL AWARD UNDER THE TSRP WILL EQUAL THE TSR TARGET AWARD TIMES THE
APPLICABLE PERCENT OF TARGET AWARD EARNED.
BY EXECUTING THIS TSR AWARD AGREEMENT, THE PARTICIPANT HEREBY SURRENDERS EACH
AND ANY OUTSTANDING PSP AWARD, EXCEPT TO THE EXTENT PROVIDED IN SECTION 5.1 OF
THE TERMS AND CONDITIONS ATTACHED HERETO.
IN WITNESS WHEREOF, the parties hereto have executed this Total Shareholder
Return Incentive Compensation Program Award Agreement effective the day and year
first above written.
ALLEGHENY TECHNOLOGIES INCORPORATED
By: /s/ Jon D. Walton
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Title: Senior Vice President, General Counsel and Secretary
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PARTICIPANT: WITNESS:
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TERMS AND CONDITIONS OF TSRP AWARD
Section 1: Definitions
Capitalized words used but not defined below or elsewhere in these Terms and
Conditions shall have the meanings ascribed to them in the Plan.
"ADMINISTRATIVE RULES" or "TSRP" shall mean the Administrative Rules for the
TSRP adopted by the Committee effective January 1, 2001, as the same may be
amended from time to time.
"AWARD" shall mean the grant of a TSR Target Award evidenced by this Award
Agreement.
"COMMITTEE" means the Personnel and Compensation Committee of the Board of
Directors for a Participant who is not a statutory insider of the Company for
the purposes of Section 16 of the Securities Exchange Act of 1934 and the Stock
Incentive Award Subcommittee of the Board of Directors for a Participant who is
a statutory insider.
"COMMON STOCK" shall mean the common stock, $0.10 par value per share, of
Allegheny Technologies Incorporated.
"COMPANY" shall mean Allegheny Technologies Incorporated and its subsidiaries,
unless the context requires otherwise.
"DISABILITY" shall mean the total and permanent disability of Participant as
determined by the Committee in its sole discretion.
"EXCELLENT" shall mean a relative standing of the Company's TSR as against the
TSR for the Peer Group, in each case for the TSR Performance Period, equal to or
greater than 75%.
"PEER GROUP" shall mean the corporations listed on Exhibit 1 to this Award
Agreement, subject to the adjustments to such group as permitted under the
Administrative Rules.
"RETIREMENT" means a termination of employment with the Company and each of its
subsidiaries at or after (i) attaining age 55 and (ii) completing five years of
employment with the Company and/or any subsidiary of the Company.
"TARGET" shall mean a relative standing of the Company's TSR as against the TSR
of the Peer Group, in each case for the TSR Performance Period, of greater than
50% but less than 75%.
"THRESHOLD" shall mean a relative standing of the Company's TSR as against the
TSR of the Peer Group, in each case for the TSR Performance Period, of greater
than 35% but less than 50%.
"TSR PERFORMANCE LEVEL" means the measure of Company TRS performance relative to
the Peer Group, as set forth on page 2 of this Award Agreement. In determining
the final Performance Level, the Committee shall use straight-line interpolation
between Threshold and Target and between Target and Excellent. No TSR Reward
will be earned for a Performance Level less than Threshold. No additional TSR
Reward above Excellent will be earned for a Performance Level greater than
Excellent.
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Section 2: TSRP Award
2.1 Subject to the attainment of the TSR Performance Levels and to the terms and
conditions otherwise set forth in the Plan, the TSRP and this Award Agreement,
the Company awards to Participant the TSRP Award described in the first two
pages of this Award Agreement with respect to the Performance Period described
therein.
Section 3: Payment
3.1 Subject to the withholding obligations and any requirements of Section 4
then applicable, the Company shall deliver to the Participant certificates
representing the TSR Rewards, if any, for the TSR Performance Period within 75
days after the end of the TSR Performance Period.
Section 4: Miscellaneous
4.1 General Restriction. To the extent any TSR Target Award is denominated in
Common Stock under this Award Agreement, it shall be subject to the requirement
that if at any time the Committee shall determine that any listing or
registration of the shares of Common Stock or any consent or approval of any
governmental body or any other agreement or consent is necessary or desirable as
a condition of the issuance of shares of Common Stock or cash in satisfaction
thereof, such issuance of shares of Common Stock may not be consummated unless
such requirement is satisfied in a manner acceptable to the Committee. The
Company shall in no event be obligated to register any securities pursuant to
the Securities Act of 1933 (as the same shall be in effect from time to time) or
to take any other affirmative action to cause the issuance of shares pursuant to
the distribution of TSR Rewards to comply with any law or regulation of any
governmental authority.
4.2 Non-Assignability. No TSR Target Award granted under this Award Agreement
shall be assignable or transferable by the Participant, except by will or by the
laws of descent and distribution. During the life of the Participant, any TSR
Rewards shall be payable only to the Participant. No assignment or transfer of a
TSR Target Award or of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, and immediately upon such purported assignment or
transfer, the TSR Target Awards shall terminate and become of no further effect.
4.3 Withholding Obligations. Whenever the Company makes delivery under the Plan,
in whole or in part, the Company shall notify the Participant of the amount of
withholding for tax, if any, which must be paid under federal and, where
applicable, state and local law. The Company shall, in the discretion of the
Company, but with the consent of the Committee, arrange for payment for such
withholding for taxes in any one or combination of the following ways: (i)
acceptance of an amount in cash paid by the Participant; or (ii) reduction in
the number of shares to be issued in the by that number of shares which, in
aggregate, have a value equal to such withholding amount. If the full amount of
the required withholding is not recovered in the above manner, the Participant
shall, forthwith upon receipt of notice, remit the deficiency to the Company. No
shares of Common Stock shall be issued or delivered to the Participant (and/or
the Participant's designee) until all applicable withholding obligations shall
have been satisfied in full.
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4.4 Delivery of Certificates. As soon as practicable after compliance by the
Participant with all applicable conditions including, but not limited to, the
satisfaction of the Withholding Obligations described in Section 4.3 hereof, the
Company will issue and deliver by mail, or cause delivery by mail, to the
Participant at the address specified by the Participant in writing, certificates
registered in the name of the Participant (and/or the Participant's designee)
for the number of shares of Common Stock which the Participant is entitled to
receive (subject to reduction for withholding as provided in Section 4.3 hereof)
under the provisions of this Award Agreement.
4.5 No Right to Employment. Nothing in the Plan or in this Award Agreement shall
confer upon the Participant the right to continue in the employ of the Company
or any subsidiary or affect any right that the Company or a subsidiary may have
to terminate the employment of the Participant.
4.6 Amendment or Termination of the Plan. The Plan, or any part thereof
(including the TSRP and/or Administrative Rules) may be terminated or may, from
time to time, be amended, each in accordance with the Plan, TSRP or
Administrative Rules, as applicable, provided, however, the termination or
amendment of the Plan, the Administrative Rules or TSRP shall not, without the
consent of the Participant, affect Participant's rights under this Award
Agreement.
4.7 Investment Representation. Under the federal and/or state securities laws,
the Participant may be required to deliver, and, if so, shall deliver, to the
Committee, upon demand by the Committee, at the time of any payment of Common
Stock, a written representation that the shares to be acquired are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to delivery of
any shares shall be a condition precedent to the right of the Participant to
receive any shares.
4.8 No Rights as Shareholder. The Participant shall have no rights as a
stockholder of the Company with respect to shares of Common Stock subject to the
Award evidenced this Award Agreement unless and until a certificate for shares
of Common Stock is issued to the Participant.
4.9 Adjustment of Award. In the event of any change or changes in the
outstanding Common Stock of the Company by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares or any rights offering to purchase a substantial amount of
Common Stock at a price substantially below fair market value or of any similar
change affecting the Common Stock, any of which takes effect after the first
grant of a TSR Target Award under this Award Agreement, the Committee may, in
its discretion, appropriately adjust the number of shares of Common Stock which
may be issued under this Award Agreement, the number of shares of Common Stock
subject to TSR Target Awards under this Award Agreement and any and all other
adjustments deemed appropriate by the Committee to prevent substantial dilution
or enlargement of the rights granted to the Participant in such manner as the
Committee shall deem appropriate. Any adjustment so made shall be final and
binding upon the Participant.
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4.10 Awards Not a Bar to Corporate Event. The existence of the TSR Target Awards
granted hereunder shall not affect in any way the right or the power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
4.11 Not Income for Qualified Plans. No amounts of income received by an
Participant pursuant to this Award Agreement shall be considered compensation
for purposes of any pension or retirement plan, insurance plan or any other
employee benefit plan of the Company or any of its affiliates.
4.12 Meaning of Participant. Whenever the word "Participant" is used in any
provision of this Award Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the TSR Target Awards may be transferred by will or by
the laws of descent and distribution, the word "Participant" shall be deemed to
include such person or persons.
4.13 Determinations of Committee. The actions taken and determinations of the
Committee made pursuant to this Award Agreement and of the Committee pursuant to
the Plan, the TSRP and the Administrative Rules shall be final, conclusive and
binding upon the Company and upon the Participant. No member of the Committee
shall be liable for any action taken or determination made relating to this
Award Agreement, the Plan, the TSRP, or the Administrative Rules if made in good
faith.
Section 5: Provisions Relating to the Performance Share Program
5.1 Certain Provisions Applicable Upon a Change in Control. In the event of a
Change of Control as defined in the Plan or TSRP or an agreement between the
Company and the Participant which would have caused a payment to be made to the
Participant under the Performance Share Program with respect to the award period
under such program commencing January 1, 2000 and ending December 31, 2002 (the
"2000-2002 AWARD PERIOD") and the TSRP, the Participant shall be entitled to
receive the greater of the amount payable to the Participant under the
Performance Share Program with respect to the 2000-2002 Award Period or the
amount payable to the Participant under the TSRP.
5.2 Surrender of PSP Award. As additional consideration for the Award evidenced
by this Award Agreement, the Participant hereby (i) surrenders to the Company
the award made to the Participant under the Performance Share Program for the
2000-2002 Award Period and all rights relating thereto, except as set forth in
Section 5.1 above, and (ii) agrees to execute any additional documents
evidencing the surrender of such award. Any purported assertion of rights with
respect to such units shall be void and without force and effect and the Company
shall have no obligation with respect to such units whatsoever.
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5.3 Definition of Performance Share Program. For the purposes of this Section 5,
"PERFORMANCE SHARE Program" means the Administrative Rules for the Performance
Share Program adopted by the Committee effective January 31, 2000. ##
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EXHIBIT 1: LIST OF PEER COMPANIES (2001-2003 PERFORMANCE PERIOD)
AK Steel Corporation Nucor Corporation
Alcan, Inc. Oregon Steel Mills
Alcoa Inc. Phelps Dodge Corporation
Bethlehem Steel Corp. Precision Castparts Corporation
Brush Engineered Materials Quanex Corporation
Carpenter Technology Corporation Reliance Steel and Aluminum
Commercial Metals Company RTI International Metals
Freeport McMoran Copper & Gold Ryerson Tull, Inc.
Gibraltar Steel Special Metals Corporation
Inco Limited Steel Dynamics
IPSCO Steel, Inc. Titanium Metals Corporation
Kaiser Aluminum & Chemical Corporation UCAR International, Inc.
KEMET Corporation USX--U.S. Steel
Kennametal Inc. Worthington Industries, Inc.
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