EXHIBIT 10.2
ALLEGHENY TECHNOLOGIES INCORPORATED
2000 INCENTIVE PLAN
ADMINISTRATIVE RULES FOR THE
TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM
EFFECTIVE AS OF JANUARY 1, 2001
(AS AMENDED EFFECTIVE AS OF JANUARY 1, 2004)
ARTICLE I. ADOPTION AND PURPOSE OF THE PROGRAM
1.01 ADOPTION. These rules are adopted by the Personnel and
Compensation Committee and the Stock Incentive Award Subcommittee of the
Board of Directors as a part of the Allegheny Technologies Incorporated
2000 Incentive Plan (the "Plan") pursuant to the authority reserved in
Section 3.01 of the Plan. The Total Shareholder Return Incentive
Compensation Program (the "TSRP") shall be the guidelines for making
certain Performance Awards or Other Stock-Based Awards under Article VIII
of the Plan. Capitalized terms used but not defined in these rules shall
have the same meanings as in the Plan.
1.02 PURPOSE. The purposes of the TSRP are (i) to assist the
Corporation in retaining and motivating selected key management employees
of the Corporation and its subsidiaries who will contribute to the success
of the Corporation, (ii) to reward key management employees for the
overall success of the Corporation as determined by the value created for
shareholders as measured by the percentile performance of Corporation
Common Stock relative to a peer group and (iii) to provide a means of
encouraging key management employees to acquire and hold shares of
Corporation Common Stock. The TSRP encourages key management employees to
acquire and hold shares of Corporation Common Stock by offering them an
opportunity to receive shares of Common Stock which, in accordance with
the terms and conditions set forth below, will be earned only if the sum
of the price and yield of the Common Stock measured against the sums of
prices and yields of shares of common stock of a peer group of
corporations meets or exceeds the performance reward relationships set at
the beginning of an Award Period. Awards under the TSRP are intended to
act as an incentive to participating key management employees to achieve
long-term objectives that will inure to the benefit of all stockholders of
the Corporation measured in terms of relative stock prices.
ARTICLE II. DEFINITIONS
For purposes of these rules, the capitalized terms set forth below shall
have the following meanings:
2.01 AWARD AGREEMENT means a written agreement between the
Corporation and a Participant or a written acknowledgment from the
Corporation specifically setting forth the terms and conditions of a TSR
Target Award granted to a Participant pursuant to Article VI of these
rules.
2.02 AWARD TARGETS means the percentage of a TSR Target Award which
shall be earned for a particular TSR Performance Period at Threshold,
Target, Excellent and Outstanding, respectively.
2.03 BOARD means the Board of Directors of the Corporation.
2.04 BUSINESS DAY means any day on which the New York Stock Exchange
shall be open for trading.
2.05 CAUSE means a determination by the Committee that a Participant
has engaged in conduct that is dishonest or illegal, involves moral
turpitude or jeopardizes the Corporation's right to operate its business
in the manner in which it is now operated.
2.06 CHANGE IN CONTROL means any of the events set forth below:
(a) The acquisition in one or more transactions,
other than from the Corporation, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act)
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of a number of Corporation Voting Securities in
excess of 25% of the Corporation Voting Securities unless such acquisition
has been approved by the Board; or
(b) Any election has occurred of persons to the Board that
causes two-thirds of the Board to consist of persons other than (i)
persons who were members of the Board on January 1, 2001 and (ii) persons
who were nominated for election as members of the Board at a time when
two-thirds of the Board consisted of persons who were members of the Board
on January 1, 2001; provided, however, that any person nominated for
election by the Board at a time when at least two-thirds of the members of
the Board were persons described in clauses (i) and/or (ii) or by persons
who were themselves nominated by such Board shall, for this purpose, be
deemed to have been nominated by a Board composed of persons described in
clause (i); or
(c) Approval by the stockholders of the Corporation of a
reorganization, merger or consolidation, unless, following such
reorganization, merger or consolidation, all or substantially all of the
individuals and entities who were the respective beneficial owners of the
Outstanding Stock and Corporation Voting Securities immediately prior to
such reorganization, merger or consolidation, following such
reorganization, merger or consolidation beneficially own, directly or
indirectly, more than 60% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting
from such reorganization, merger or consolidation in substantially the
same proportion as their ownership of the Outstanding Stock and
Corporation Voting Securities immediately prior to such reorganization,
merger or consolidation, as the case may be; or
(d) Approval by the stockholders of the Corporation of (i) a
complete liquidation or dissolution of the Corporation or (ii) a sale or
other disposition of all or substantially all the assets of the
Corporation.
2.07 COMMITTEE means the Stock Incentive Award Committee of the
Board, in the case of individuals who are executive officers of the
Corporation, and the Personnel and Compensation Committee of the Board, in
the case of individuals who are not executive officers of the Corporation.
2.08 CORPORATION means Allegheny Technologies Incorporated, a
Delaware corporation, and its successors.
2.09 CORPORATION VOTING SECURITIES means the combined voting power
of all outstanding voting securities of the Corporation entitled to vote
generally in the election of the Board.
2.10 DATE OF GRANT means the date as of which a TSR Target Award is
granted in accordance with Article VI of these rules.
2.11 DISABILITY means any physical or mental injury or disease of a
permanent nature which renders a Participant incapable of meeting the
requirements of the employment performed by such Participant immediately
prior to the commencement of such disability. The determination of whether
a Participant is disabled shall be made by the Committee in its sole and
absolute discretion. Notwithstanding the foregoing, if a Participant's
employment by the Corporation or an applicable subsidiary terminates by
reason of a disability, as defined in an Employment Agreement between such
Participant and the Corporation or an applicable subsidiary, such
Participant shall be deemed to be disabled for purposes of the TSRP.
2.12 EFFECTIVE DATE means January 1, 2001.
2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.14 EXCELLENT means a relative level of achievement of Performance
Reward Criteria at which the TSR for the Corporation for a TSR Performance
Period is at a percentile of the TSR for the Peer Group for that
Performance Period as determined by the Committee under Section 6.02.
Excellent shall be the next to the highest level of performance for which
a TSRP Reward will be paid.
2.15 FAIR MARKET VALUE means, as of any given date, the average of
the high and low trading prices of the Common Stock on such date as
reported on the New York Stock Exchange or, if the Common Stock is not
then traded on the New York Stock Exchange, on such other national
securities exchange on which the Common Stock is admitted to trade, or, if
none, on the National Association of Securities Dealers Automated
Quotation System if the Common Stock is admitted for quotation thereon;
provided, however, if there were no sales reported as of such date,
Fair Market Value shall be computed as of the last date preceding such
date on which a sale was reported; provided, further, that if any such
exchange or quotation system is closed on any day on which Fair Market
Value is to be determined, Fair Market Value shall be determined as of the
first date immediately preceding such date on which such exchange or
quotation system was open for trading.
2.16 OUTSTANDING means a relative level of Performance Reward
Criteria at which the Corporation TSR for a particular TSR Performance
Period is at a percentile of TSR for the Peer Group for that TSR
Performance Period as determined by the Committee under Section 6.02.
Outstanding shall be the highest level of performance for which a TSRP
Reward will be paid.
2.17 OUTSTANDING STOCK means, at any time, the issued and
outstanding Common Stock.
2.18 PARTICIPANT means any key management employee selected by the
Committee, pursuant to Section 5.01 of these rules, as eligible to
participate under the TSRP for any one or more TSR Performance Period.
2.19 PEER GROUP means a group of corporations with publicly traded
common stock listed on a national securities exchange(s) deemed comparable
to the Corporation as the number and identity of such group is determined
by the Committee, in its discretion, for a particular TSR Performance
Period. In the event of bankruptcy, delisting, merger, spin-off or other
special circumstances affecting members of the Peer Group during a
Performance Period, the Committee shall make such adjustments in the Peer
Group as the Committee determines appropriate in its discretion. The
Committee may select the number and identity of members of the Peer Group
separately for each TSR Performance Period.
2.20 PERFORMANCE REWARD CRITERIA means the relative standing of the
Corporation TSR, expressed in percentiles and ranked at Threshold, Target,
Excellent and Outstanding, as compared to the TSR for the Peer Group, in
each case for a particular TSR Performance Period.
2.21 PERFORMANCE LEVEL means the level of actual achievement of
Performance Reward Criteria for a particular TSR Performance Period. In
determining final Performance Levels, the Committee shall use
straight-line interpolation between Threshold and Target, Target and
Excellent and Excellent and Outstanding but there shall be no
interpolation above Outstanding or below Threshold.
2.22 PLAN means the Allegheny Technologies Incorporated 2000
Incentive Plan, as the same may be amended from time to time.
2.23 RETIREMENT means a termination of employment with the
Corporation and each subsidiary of the Corporation, with the consent of
the Corporation, at or after (i) attaining age 55 and (ii) completing five
years of employment with the Corporation and/or any subsidiary of the
Corporation.
2.24 TARGET means a relative level of Performance Reward Criteria at
which the Corporation TSR for a particular TSR Performance Period is at a
percentile of TSR for the Peer Group for that TSR Performance Period as
determined by the Committee under Section 6.02.
2.25 THRESHOLD means a relative level of Performance Reward Criteria
at which the Corporation TSR for a particular TSR Performance Period is at
a percentile of TSR for the Peer Group for that TSR Performance Period as
determined by the Committee under Section 6.02. Threshold shall be the
lowest level of Performance Reward Criteria for which a Plan Reward will
be earned.
2.26 TSR is the percentile ranking of the sum of stock price
appreciation of and dividend reinvestment with respect to a share of
Corporation Stock as compared to the comparable amount among the Peer
Group for a particular TSR Performance Period as calculated on the Fair
Market Value of a share of Stock as of the end of the TSR Performance
Period plus dividends paid on a share of stock during the TSR Performance
Period divided by the Fair Market Value of a share of Stock at the
beginning of the TSR Performance Period using the methodology described in
item 402(l) of Regulation S-K as promulgated under the Securities Act, as
such act or regulation may be amended from time to time, or any successor
to either.
2.27 TSRP means the Total Shareholder Return Incentive Compensation
Program as set forth in these rules as the same may be amended from time
to time.
2.28 TSR PERFORMANCE PERIOD means a three calendar year period
beginning on the January 1st designated by the Committee and continuing
until the third December 31st thereafter.
2.29 TSR REWARDS means the number of shares of Stock earned for a
particular TSR Performance period after application of the Performance
Level.
2.30 TSR TARGET AWARD means an award of an opportunity to earn a
number of shares of Stock in a TSR Performance Period. The number of
shares for a particular Participant shall be determined by the Committee
for each TSR Performance Period by dividing the Participant's base salary
at the commencement of the TSR Performance Period or, for the 2004-2006
performance period, at the base salary set on or before the date the
Target Award is made, by the average Fair Market Value for the 30 Business
Days preceding the first Business Day of that TSR Performance Period and
multiplying the result by a decimal determined appropriate by the
Committee based on the Participant's responsibilities and opportunity to
contribute to the success of the Corporation.
2.31 STOCK means Common Stock, par value $0.10 per share, of the
Corporation.
2.32 WITHHOLDING OBLIGATIONS means the amount of federal, state and
local income and payroll taxes the Corporation determines in good faith
must be withheld with respect to a TSR Rewards. Withholding Obligations
may be settled by the Participant, as permitted by the Committee in its
discretion, in shares of Stock otherwise deliverable under the TRSP, cash,
previously owned shares of Stock or any combination of the foregoing.
ARTICLE III. ADMINISTRATION
In addition to any power reserved to the Committee under Article III
of the Plan, the TSRP shall be administered by the Committee, which shall
have exclusive and final authority and discretion in each determination,
interpretation or other action affecting the TSRP and its Participants,
and the Committee shall have the sole and absolute authority and
discretion to
interpret the TSRP, to modify these administrative rules for the TSRP, to
select, in accordance with Section 5.01 of these rules, the persons who
will be Participants hereunder, to determine all performance criteria,
levels of awards and rewards payable, to impose such conditions and
restrictions as it determines appropriate and to take such other actions
and make such other determinations in connection with the TSRP as it may
deem necessary or advisable, in all cases in accordance with, and subject
to, the provisions of the charter of the Committee.
ARTICLE IV. STOCK ISSUABLE UNDER THE TSRP
4.01 NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments as
provided in Section 11.07 of the Plan, the maximum number of shares of
Stock available for issuance under the TSRP shall be 3,000,000. The Stock
to be offered under the TSRP shall be authorized and unissued Stock, or
Stock which shall have been reacquired by the Corporation and held in its
treasury.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock forfeited
as provided in Section 6.03 of these rules may again be issued under the
TSRP.
ARTICLE V. PARTICIPATION
5.01 DESIGNATION OF PARTICIPANTS. Participants in the TSRP shall be
such key management employees of the Corporation or of its subsidiaries as
the Committee, in its sole discretion, may designate as eligible to
participate in the TSRP for any one or more TSR Performance Periods. No
later than 90 days after the commencement of each TSR Performance Period
during the term of the TSRP, the Committee shall designate the
Participants who are eligible to participate in the TSRP during such TSR
Performance Period. The Committee's designation of a Participant with
respect to any TSR Performance Period shall not require the Committee to
designate such person as a Participant with respect to any other TSR
Performance Period. The Committee shall consider such factors as it deems
pertinent in selecting Participants. The Committee shall promptly provide
to each person selected as a Participant written notice of such selection.
ARTICLE VI. GRANTS UNDER THE TSRP
6.01 ANNUAL DETERMINATION REGARDING TSR PERFORMANCE PERIOD. No later
than the 60th day of each calendar year, the Committee shall determine
whether to establish a TSR Performance Period, provided, however, for a
TSR Performance Period established in calendar year 2001, the Committee
may make a determination under this Section 6.01 at any time prior to the
90th day of calendar year 2001.
6.02 DETERMINATION OF GRANTS, AWARDS AND PERFORMANCE CRITERIA. For
each TSR Performance Period, the Committee shall take the following
actions no later than the 90th day of the first calendar year of that TSR
Performance Period:
(a) Identify Participants for that TSR Performance Period;
(b) Establish the level of the TSR Target Awards for each
Participant;
(c) Set the Performance Reward Criteria in terms of percentile
ranking among the Peer Group for such period at Threshold, Target,
Excellent and Outstanding, respectively;
(d) Set the Award Targets for Threshold, Target, Excellent and
Outstanding; and
(e) Determine the Peer Group for that TSR Performance Period.
6.03 TERMINATION OF EMPLOYMENT. If a Participant terminates
employment with the Corporation and each subsidiary of the Corporation
during a then uncompleted TSR Performance Period for reasons other than
death, Disability or Retirement, any TSR Target Award for any then
uncompleted TSR Performance Period shall be forfeited automatically and
the shares represented by such TSR Target Awards shall again be eligible
for awards under these Rules. If a Participant terminates employment with
the Corporation and each subsidiary of the Corporation for reasons of
death, Disability or Retirement during a then uncompleted TSR Performance
Period, the Participant shall be entitled to receive a pro rata Plan
Reward for each then uncompleted TSR Performance Period determined:
(a) when the TSR Rewards for all other Participants in such
TSR Performance Period(s) are determined;
(b) based on the actual level of achievement of Performance
Reward Criteria for that TSR Performance Period and the
Participant's TSR Target Award;
(c) pro rated by multiplying the number of shares of Stock the
Participant would have received if the Participant completed the TSR
Performance Period multiplied by a fraction, the numerator of which
is the number of months of such TSR Performance Period completed
before the Participant's termination of employment and the
denominator is 36; and
(d) certificates representing the number determined above
shall be delivered at the same time as all other certificates for
such TSR Performance Period are delivered to Participants who
completed the TSR Performance Period.
ARTICLE VII. DETERMINATION OF PERFORMANCE REWARD CRITERIA AND DELIVERY OF STOCK
7.01 DETERMINATION OF ACTUAL ACHIEVEMENT OF PERFORMANCE REWARD
CRITERIA. As promptly as administratively feasible but in no event later
than the March 1st of the calendar year following last calendar year of
each TSR Performance Period, the Committee shall determine the TSR of the
Corporation and the average TSR of each member of the Peer Group and
determine the Performance Level, if any, at which the Performance Reward
Criteria have been achieved.
7.02 DETERMINATION OF PLAN REWARDS. Plan Rewards for a particular
TSR Performance Period for a particular participant shall be the result of
multiplying that Participant's TSR Target Award by the Performance Level
for that TSR Performance Period determined under Section 7.01.
7.03 DELIVERY OF STOCK CERTIFICATES. As promptly as administratively
feasible after the but in no event later than the March 15th of the
calendar year following the last calendar year of a TSR Performance
Period, the Corporation shall prepare for each Participant due a Plan
Reward under Section 7.02 one or more stock certificates registered in the
name(s) indicated by such Participant and shall deliver such certificates
to the Participant promptly following the Participant's settlement of the
Withholding Obligations by placing such certificates or causing such
certificates to be placed in the U.S. mail, postage prepaid, to the
address indicated by the Participant.
ARTICLE VIII. MISCELLANEOUS
8.01 APPLICATION OF PROVISIONS OF PLAN. Except as set forth in these
Rules, the provisions of the Plan, including, but not limited to, Article
X, the Terms Applicable Generally to Awards Granted under the Plan, shall
apply to these Rules and are incorporated herein as if set forth at
length.
8.02 CHANGE IN CONTROL. In the event of a Change in Control, Plan
Rewards shall be determined for all then uncompleted TSR Performance
Periods as of the date of the Change in Control at the greater of (i) the
Performance Level actually attained prior to the Change in Control and
projected for the remainder of such uncompleted TSR Performance Periods or
(ii) Target for each such uncompleted TSR Performance Period and
certificates (or, with the consent of the Committee an amount in cash
representing the Fair Market Value of such certificates) representing the
Plan Rewards shall be delivered to the Participant as soon after the
Change in Control as is administratively feasible.
8.03 SECURITIES LAWS AND SECTION 162(M) RESTRICTIONS. Any TSR Award
denominated in Common Stock 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 to the granting of a TSR Award or issuance of shares of Common
Stock or cash in satisfaction thereof, such grant of an award or issuance
of shares of Common Stock may not be consummated unless such requirement
is satisfied in a manner acceptable to the Committee. It is intended,
unless the Committee determine otherwise, that the TSRP comply with Rule
16b-3 as issued by the Securities and Exchange Commission and Section
162(m) of the Code. All interpretations of the TSRP relating to Statutory
Insiders shall be consistent with that Rule 16b-3, the Exchange Act and
Section 162(m) of the Code. In order to maintain compliance with any of
Rule 16b-3, the Exchange Act or the Code, the Committee may adopt such
other rules or provide restrictions on outstanding TSR Awards as it in its
discretion shall deem necessary and such rules or restrictions shall apply
to outstanding TSR Awards as if set forth in the respective TSR Award
Agreements.
8.04 INVESTMENT REPRESENTATION. Each TSR Award Agreement may provide
that the Participant shall deliver to the Committee upon demand by the
Committee a written representation that the shares of Common Stock to be
delivered are acquired by the Participant for investment and not for
resale or with a view to the distribution thereof. Upon demand, delivery
of such representation prior to the delivery of shares of Common Stock
shall be a condition precedent to the Participant's right to receive such
shares of Common Stock.
8.05 NO RIGHTS AS STOCKHOLDERS. Participants shall have no rights as
shareholders of the Corporation prior to the actual delivery of shares of
Common Stock. The existence of these Rules and/or any TSR Awards then
outstanding shall not be a bar or affect in any way the power or authority
of the Corporation or any of its then stockholders to take any action
regarding the Corporation, its assets or its capital structure.
8.06 NON-UNIFORM DETERMINATIONS. The actions and determinations of
the Committee need not be uniform and may be taken or made by the
Committee selectively among employees or Participants, whether or not
similarly situated.
8.07 AMENDMENT AND TERMINATION OF RULES. The Committee shall have
complete power and authority to amend or terminate these Rules at any time
it is deemed necessary or appropriate. No termination or amendment of the
Rules may, without the consent of the Participant to whom any award shall
theretofore have been granted under the TSRP, adversely affect the right
of such individual under such award; provided, however, that the Committee
may, in its sole discretion, make such provision in the Award Agreement
for amendments which, in its sole discretion, it deems appropriate.
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 January 1, 2004.
Participant: [Name]
PARTICIPANT TO COMPLETE THE FOLLOWING CHART
(Please print)
Street Address
City/State/Zip Code
Social Security Number
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, as amended (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 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:
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, 2004 through December 31, 2006
TSR TARGET AWARD: [number of shares at target] Shares of Company Common Stock
[equals applicable base salary times [applicable TSR award level percentage]
(which is the Participant's target award opportunity as a percent of salary)
divided by $10.20 (which is the average Closing Price for the 30 trading days
prior to January 1, 2004)]
PERFORMANCE LEVELS: The following table shows the performance award relationship
under the TSRP for the 2004 - 2006 performance period:
OUTCOME RELATIVE TO PEER GROUP TSR
----------------------------------
THREE-YEAR PERCENTILE PERCENT OF TARGET
LEVEL OF PERFORMANCE RANKING IN TSR AWARD EARNED
- -------------------- -------------- ------------
Below Threshold Below 25th percentile 0%
Threshold 25th percentile 50%
Target 50th percentile 100%
Excellent 75th percentile 200%
Outstanding 90th percentile 300%
NOTE: Interpolation between points will be made on a straight line basis
on each scale. Below the 25th percentile and above the 90th 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.
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:_____________________________________________________________
Title: Executive Vice President, Human Resources,
Chief Legal & Compliance Officer
PARTICIPANT: WITNESS:
- ------------------------------ ------------------------------
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 amended effective
January 1, 2004, 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% but less than 90%.
"OUTSTANDING" 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 90%.
"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, with the consent of the Company, 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 equal to or
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 equal to
or greater than 25% but less than 50%.
"TSR PERFORMANCE LEVEL" means the measure of Company TSR 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, between Target and Excellent, and between
Excellent and Outstanding. No TSR Reward will be earned for a Performance Level
less than Threshold. No additional TSR Reward above Outstanding will be earned
for a Performance Level greater than Outstanding.
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.
3.2 If the Participant terminates employment with the Company and each
subsidiary of the Company during a then uncompleted TSR Performance Period for
reasons other than death, Disability or Retirement, any TSR Target Award for any
then uncompleted TSR Performance Period shall be forfeited automatically and the
shares represented by such TSR Target Awards shall again be eligible for awards
under the Rules.
3.3 If the Participant terminates employment with the Company and each
Subsidiary of the Company during a then uncompleted TSR Performance Period due
to the Participant's death, Disability, or Retirement, a pro rata award based on
the number of full months worked by the Participant during that Performance
Period will be calculated, based on goal achievement over the entire performance
period. Any award determined to be payable shall be paid after the end of the
applicable 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 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.
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.
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.
EXHIBIT 1: LIST OF PEER COMPANIES (2004 - 2006 PERFORMANCE PERIOD)
AK Steel Corporation
Alcan, Inc.
Alcoa Inc.
Carpenter Technology Corporation
Commonwealth Industries, Inc.
IPSCO Steel, Inc.
International Steel Group Inc.
Kennametal Inc.
Nucor Corporation
Quanex Corporation
Reliance Steel & Aluminum Co.
RTI International Metals
Steel Dynamics
Titanium Metals Corporation
U.S. Steel Corporation