EXHIBIT 10.5
FORM OF
AMENDED AND RESTATED
CHANGE IN CONTROL SEVERANCE AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), initially
effective as of the 10th day of February, 2000 (the "Effective Date"), and
amended and restated in its entirety effective as of July 13, 2000 is further
amended and restated as of February 24, 2005, by and between Allegheny
Technologies Incorporated, a Delaware corporation (hereinafter referred to as
the "Company"), and the individual identified on the signature page of this
Agreement (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company (the "Board") has
approved the Company's entering into this agreement providing for certain
severance protection for the Executive following a Change in Control (as
hereinafter defined);
WHEREAS, the Board of the Company believes that, should the
possibility of a Change in Control arise, it is imperative that the Company be
able to receive and rely upon the Executive's advice, if requested, as to the
best interests of the Company and its stockholders without concern that the
Executive might be distracted by the personal uncertainties and risks created by
the possibility of a Change in Control; and
WHEREAS, in addition to the Executive's regular duties, the
Executive may be called upon to assist in the assessment of a possible Change in
Control, advise management and the Board of the Company as to whether such
Change in Control would be in the best interests of the Company and its
stockholders, and to take such other actions as the Board determines to be
appropriate.
NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of Executive's advice
and counsel notwithstanding the possibility, threat, or occurrence of a Change
in Control, and to induce the Executive to remain in the employ of the Company,
and for good and valuable consideration and the mutual covenants set forth
herein, the Company and the Executive, intending to be legally bound, agree as
follows:
Article I. Definitions
1.1 Definitions. Whenever used in this Agreement, the following terms
shall have the meanings set forth below when the initial letter of the word or
abbreviation is capitalized:
(a) "Accrued Obligations" means, as of the Effective Date of Termination, the
sum of (i) the Executive's Base Compensation through and including the Effective
Date of Termination, (ii) the amount of any bonus, incentive compensation,
deferred compensation and other cash compensation accrued by the Executive as of
the Effective Date of Termination under the terms of any such arrangement and
not then paid, including, but not limited to, AIP accrued but not paid for a
year ending prior to the year in which occur, the Effective Date of Termination,
(iii)
unused vacation time monetized at the then rate of Base Compensation, (iv)
expense reimbursements or other cash entitlements, (v) amounts accrued,
including but not limited to amounts accrued as a result of the application of
Section 2.2(g), under any qualified, non-qualified or supplemental employee
benefit plan, payroll practice, policy or perquisite.
(b) "AIP" means the Company's Annual Incentive Plan as it exists on the date
hereof and as it may be amended, supplemented or modified from time to time or
any successor plan.
(c) "Base Compensation" shall mean (1) the highest annual rate of base salary of
the Executive within the time period consisting of two years prior to the date
of a Change in Control and the Effective Date of Termination and (2) the AIP
bonus target for performance in the calendar year that a Change in Control
occurs or the actual AIP payment for the year immediately preceding the Change
in Control, whichever is higher.
(d) "Beneficiary" shall mean the persons or entities designated or deemed
designated by the Executive pursuant to Section 7.2 herein.
(e) "Board" shall mean the Board of Directors of the Company.
(f) For purposes hereof, the term "Cause" shall mean the Executive's conviction
of a felony, breach of a fiduciary duty involving personal profit to the
Executive or intentional failure to perform stated duties reasonably associated
with the Executive's position; provided, however, an intentional failure to
perform stated duties shall not constitute Cause unless and until the Board
provides the Executive with written notice setting forth the specific duties
that, in the Board's view, the Executive has failed to perform and the Executive
is provided a period of thirty (30) days to cure such specific failure(s) to the
reasonable satisfaction of the Board.
(g) For the purposes of this Agreement, "Change in Control" shall mean, and
shall be deemed to have occurred upon the occurrence of, any of the following
events:
(1) The Company acquires actual knowledge that (x) any Person, other
than the Company, a subsidiary, any employee benefit plan(s)
sponsored by the Company or a subsidiary, has acquired the
Beneficial Ownership, directly or indirectly, of securities of the
Company entitling such Person to 20% or more of the Voting Power of
the Company, or (y) any Person or Persons agree to act together for
the purpose of acquiring, holding, voting or disposing of securities
of the Company or to act in concert or otherwise with the purpose or
effect of changing or influencing control of the Company, or in
connection with or as Beneficial Ownership, directly or indirectly,
of securities of the Company entitling such Person(s) to 20% or more
of the Voting Power of the Company; or
(2) The completion of a Tender Offer is made to acquire securities
of the Company entitling the holders thereof to 20% or more of the
Voting Power of the Company; or
(3) The occurrence of a successful solicitation subject to Rule
14a-11 under the Securities Exchange Act of 1934 as amended (or any
successor Rule) (the "1934 Act") relating to the election or removal
of 50% or more of the members of the Board or any class of the Board
shall be made by any person other than the
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Company or less than 51% of the members of the Board (excluding
vacant seats) shall be Continuing Directors; or
(4) The occurrence of a merger, consolidation, share exchange,
division or sale or other disposition of assets of the Company as a
result of which the stockholders of the Company immediately prior to
such transaction shall not hold, directly or indirectly, immediately
following such transaction a majority of the Voting Power of (i) in
the case of a merger or consolidation, the surviving or resulting
corporation, (ii) in the case of a share exchange, the acquiring
corporation or (iii) in the case of a division or a sale or other
disposition of assets, each surviving, resulting or acquiring
corporation which, immediately following the transaction, holds more
than 20% of the consolidated assets of the Company immediately prior
to the transaction;
provided, however that (A) if securities beneficially owned by Executive are
included in determining the Beneficial Ownership of a Person referred to in
Section (i), (B) if Executive is named pursuant to Item 2 of the Schedule 14D-1
(or any similar successor filing requirement) required to be filed by the bidder
making a Tender Offer referred to in Section (ii) or (C) if Executive is a
"participant" as defined in Instruction 3 to Item 4 of Schedule 14A under the
1934 Act in a solicitation referred to in Section (iii) then no Change of
Control with respect to Executive shall be deemed to have occurred by reason of
any such event.
For the purposes of Section 1(g), the following terms shall have the
following meanings:
(i) The term "Person" shall be used as that term is used in Section
13(d) and 14(d) of the 1934 Act as in effect on the Effective Date
hereof.
(ii) "Beneficial Ownership" shall be determined as provided in Rule
13d-3 under the 1934 Act as in effect on the Effective Date hereof.
(iii) A specified percentage of "Voting Power" of a company shall
mean such number of the Voting Shares as shall enable the holders
thereof to cast such percentage of all the votes which could be cast
in an annual election of directors (without consideration of the
rights of any class of stock, other than the common stock of the
company, to elect directors by a separate class vote); and "Voting
Shares" shall mean all securities of a company entitling the holders
thereof to vote in an annual election of directors (without
consideration of the rights of any class of stock, other than the
common stock of the company, to elect directors by a separate class
vote).
(iv) "Tender Offer" shall mean a tender offer or exchange offer to
acquire securities of the Company (other than such an offer made by
the Company or any subsidiary), whether or not such offer is
approved or opposed by the Board.
(v) "Continuing Directors" shall mean a director of the Company who
either (x) was a director of the Company on the date hereof or (y)
is an individual whose election, or nomination for election, as a
director of the Company was approved by a vote of at least
two-thirds of the directors then still in office who were
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Continuing Directors (other than an individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of directors of the
Company which would be subject to Rule 14a-11 under the 1934 Act, or
any successor Rule).
(h) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(i) "Effective Date of Termination" shall mean the date on which the Executive's
employment terminates in a circumstance in which Section 2.1 provides for
Severance Benefits (as defined in Section 2.1).
(j) "Good Reason" shall mean, without the Executive's express written consent,
the occurrence of any one or more of the following:
(1) A material diminution of the Executive's authorities, duties,
responsibilities, or status (including offices, titles, or reporting
relationships) as an employee of the Company from those in effect as of one
hundred eighty (180) days prior to the Change in Control or as of the date of
execution of this Agreement if a Change in Control occurs within one hundred
eighty (180) days of the execution of this Agreement (the "Reference Date") or
the assignment to the Executive of duties or responsibilities inconsistent with
his position as of the Reference Date, other than an insubstantial and
inadvertent act that is remedied by the Company promptly after receipt of notice
thereof given by the Executive, and other than any such alteration which is
consented to by the Executive in writing;
(2) The Company's requiring the Executive to be based at a location in
excess of thirty-five (35) miles from the location of the Executive's principal
job location or office immediately prior to the Change in Control, except for
required travel on the Company's business to an extent substantially consistent
with the Executive's present business obligations;
(3) A reduction in the Executive's annual salary or any material reduction
by the Company of the Executive's other compensation or benefits from that in
effect on the Reference Date or on the date of the Change in Control, whichever
is greater;
(4) The failure of the Company to obtain an agreement satisfactory to the
Executive from any successor to the Company to assume and agree to perform the
Company's obligations under this Agreement, as contemplated in Article 5 herein;
and
(5) Any purported termination by the Company of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 2.6 below, and for purposes of this Agreement, no such
purported termination shall be effective.
The Executive's right to terminate employment for Good Reason shall not be
affected by the Executive's (A) incapacity due to physical or mental illness or
(B) continued employment following the occurrence of any event constituting Good
Reason herein.
(k) "KEPP" means the Company's Key Executive Performance Plan as it exists on
the date hereof and as it may be amended, supplemented or modified from time to
time or any successor plan.
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(l) "Severance Compensation" means three times Base Compensation.
(m) "TSRP" means the Total Shareholder Return Program as it exists on the date
of the amendment and restatement of this Agreement and as it may be amended,
supplemented or modified from time to time or a successor plan.
Article II. Severance Benefits
2.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company severance benefits described in Section 2.2 below
(collectively, the "Severance Benefits") if a Change in Control shall occur and
within twenty-four (24) months after the Change in Control either of the
following shall occur:
(a) an involuntary termination of the Executive's employment with
the Company without Cause; or
(b) a voluntary termination of the Executive's employment with the
Company for Good Reason.
2.2 Severance Benefits. In the event that the Executive becomes entitled
to receive Severance Benefits, as provided in Section 2.1, the Company shall
provide the Executive with total Severance Benefits as follows (but subject to
Sections 2.5 and 2.6):
(a) The Executive shall receive a single lump sum cash Severance
Compensation payment within thirty (30) days of the Effective
Date of Termination.
(b) The Executive shall receive the Accrued Obligations.
(c) The Executive shall receive as AIP for the year in which the
termination occurs a lump sum cash payment paid within thirty
(30) days of the Effective Date of Termination equal to that
which would have been paid if corporate and personal
performance had achieved 120% of target objectives established
for the annual period in which the Change in Control occurred,
multiplied by a fraction, the numerator of which is the number
of days elapsed in the current fiscal period to the Effective
Date of Termination, and the denominator of which is 365.
(d) The Executive shall receive a lump sum payment paid within
thirty (30) days of the Effective Date of Termination (i) of
any earned but unpaid TSRP Awards (as defined in the TSRP) and
(ii) with respect to any TSRP Awards for then uncompleted TSRP
Performance Periods (as defined in the TSRP); provided that
portion of the TSRP award that would be paid in stock under
the TSRP is to be paid in cash based on the then current
market value of the stock and the payment for then uncompleted
TSRP Performance Periods will be determined based upon a
deemed "Excellent" level of Total Shareholder Return (as
defined in the TSRP and set forth in
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the applicable TSRP agreement) for each uncompleted TSRP
Performance Period.
(e) All perquisites and welfare benefits, including medical,
dental, vision, life and disability benefits pursuant to plans
under which the Executive and/or the Executive's family is
eligible to receive benefits and/or coverage shall be
continued for a period of thirty-six (36) months after the
Effective Date of Termination. Such benefits shall be provided
to the Executive at no less than the same coverage level as in
effect as of the date of the Change in Control. The Company
shall pay the full cost of such continued benefits, except
that the Executive shall bear any portion of such cost as was
required to be borne by key executives of the Company
generally at the date of the Change in Control.
Notwithstanding the foregoing, the benefits described in this
Section 2.2(e) may be discontinued prior to the end of the
periods provided in this Section to the extent, but only to
the extent, that the Executive receives substantially similar
benefits from a subsequent employer. In the event any
insurance carrier shall refuse to provide coverage to a former
employee, the Company shall secure comparable coverage or may
self-insure the benefits if it pays such benefits together
with a payment to the Executive equal to the federal income
tax consequences of payments to a former highly compensated
employee from a discriminatory self-insured plan.
(f) The Executive shall be entitled to reimbursement for actual
payments made for professional outplacement services or job
search not to exceed $25,000 in the aggregate.
(g) In determining the Executive's pension benefit following
entitlement to a Severance Benefit, (i) the Executive shall be
deemed to have satisfied the age and service requirements for
full vesting under the Company's qualified (within applicable
legal parameters), non-qualified and supplemental pension
plans as of the Effective Date of Termination in which the
Executive then participates such that the Executive shall be
entitled to receive the full accrued benefit (based on actual
service rendered through the Effective Date of Termination
plus the service under subsection 2.2(g)(ii)) under all such
plans in effect as of the date of the Change in Control,
without any actuarial reduction for early payment and (ii) the
Executive shall be credited with years of service for all
purposes under each such plan equal to the number used to
multiply Base Compensation in Section 1.1(m) (not to exceed a
maximum total of ten credited years of service under the
Company's Supplemental Pension Plan, if applicable). To the
extent the amounts determined after giving effect to this
Section 2.2(g) cannot be paid from or under a qualified plan,
as determined by the administrator of the qualified plan(s),
such amounts shall be paid in a single cash payment with the
Accrued Obligations as provided in Section 2.2(b), it being
understood that the Executive will receive all amounts that
can be paid from or under a qualified plan from such plan when
such amounts otherwise become due.
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(h) If the Company is providing the Executive with the use of an
automobile on the date of the Change in Control within sixty
(60) days of the Effective Date of Termination, the Company
shall acquire title to such automobile if it does not then
have title, satisfy any lease obligation, lien or encumbrance
related to such automobile and transfer to the Executive, free
and clear of all encumbrances, title to the automobile.
2.3. Stock Options. All Company stock options previously granted to the
Executive shall be fully vested and exercisable immediately upon a Change in
Control. Such options shall be exercisable for the remainder of the term
established by the Company's stock option plan as if the options had vested in
accordance with the normal vesting schedule and the Executive had remained an
employee of the Company. Company stock acquired pursuant to any such exercise
may be sold by the Executive free of any Company restrictions, whatsoever (other
than those imposed by federal and state securities laws).
2.4. KEPP. In the event of entitlement to a Severance Benefit and the
Executive then participates in KEPP, the Company shall pay to the Executive an
amount in a single cash payment within thirty (30) days of the Effective Date of
Termination equal to the amount determined as the sum of (i) any earned but
unpaid KEPP amounts and (ii) the sum of (A) for the 2004 through 2006
measurement period under KEPP, at the 7X (maximum) level and (B) for the 2005
through 2007 measurement period under KEPP (x) with respect to Level 1, by first
determining the aggregate amount of income before taxes actually attained by the
Corporation for the period beginning on January 1, 2005 and ending on (and
including) the date of the Change in Control, dividing that amount by the number
of days during the period beginning on January 1, 2005 and ending on (and
including) the date of the Change in Control and multiplying that daily amount
by the total number of days in calendar years 2005, 2006 and 2007 and, using the
amount of income before taxes determined under the foregoing, determining the
appropriate amount to be paid under Level 1 and (y) with respect to Level 2, if
the amount of the Level 1 payment determined under the preceding clause is less
than the maximum level for the 2005 through 2007 Performance Period, the
Personnel and Compensation Committee of the Board of Directors (the "Committee")
shall meet immediately prior to the date of the Change in Control (or as soon as
practicable after the Committee knows of the impending Change in Control) and
determine the amount, if any, of KEPP Payment appropriate under Level 2 for the
2005 through 2007 Performance Period and the KEPP Payments for the 2005 through
2007 Performance Period shall be delivered to the Participants as soon after the
Change in Control as is administratively feasible.
2.5. Termination for any Other Reason. If the Executive's employment with
the Company is terminated under any circumstances other than those set forth in
Section 2.1, including without limitation by reason of retirement, death,
disability, discharge for Cause or resignation without Good Reason, or any
termination, for any reason, that occurs prior to a Change in Control (other
than as provided below) or after twenty-four (24) months following a Change in
Control, the Executive shall have no right to receive the Severance Benefits
under this Agreement or to receive any payments in respect of this Agreement. In
such event Executive's benefits, if any, in respect of such termination shall be
determined in accordance with the Company's retirement, survivor's benefits,
insurance, and other applicable plans, programs, policies and practices then in
effect. Notwithstanding anything in this Agreement to the contrary, if the
Executive's employment with the Company is terminated at any time from three (3)
to eight (8) months prior to the date on which a Change in Control occurs either
(i) by the
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Company other than for Cause or (ii) by the Executive for Good Reason, and it is
reasonably demonstrated that termination of employment (a) was at the request of
an unrelated third party who has taken steps reasonably calculated to effect a
Change in Control, or (b) otherwise arose in connection with or in anticipation
of the Change in Control, then for all purposes of this Agreement the
termination shall be deemed to have occurred as if immediately following a
Change in Control for Good Reason and the Executive shall be entitled to
Severance Benefits as provided in Section 2.2 hereof. Notwithstanding anything
in this Agreement to the contrary, if the Executive's employment with the
Company is terminated at any time within three (3) months prior to the date on
which a Change in Control occurs either (i) by the Company other than for Cause
or (ii) by the Executive for Good Reason, such termination shall conclusively be
deemed to have occurred as if immediately following a Change in Control for Good
Reason and the Executive shall be entitled to Severance Benefits as provided in
Section 2.2. hereof.
2.6. Notice of Termination. Any termination by the Company for Cause or by
the Executive for Good Reason shall be communicated by Notice of Termination to
the other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.
2.7. Withholding of Taxes. The Company shall withhold from any amounts
payable under this Agreement all Federal, state, local, or other taxes that are
legally required to be withheld.
2.8. Certain Additional Payments by the Company.
(a) Notwithstanding anything in this Agreement to the contrary, in
the event it shall be determined that any economic benefit or
payment or distribution by the Company to or for the benefit
of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or
otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Code or any interest or
penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the
Executive shall be entitled to receive an additional payment
(a "Gross-Up-Payment") in an amount such that after payment by
the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including any
Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise
Tax imposed upon the Payments.
(b) Subject to the provisions of Section 2.8(c), all
determinations required to be made under this Section 2.8,
including whether a Gross-Up Payment is required and the
amount of such Gross-Up Payment, shall be made by the
Company's regular outside independent public accounting firm
(the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive
within fifteen (15) business days of the Effective Date of
Termination, if applicable, or such earlier time as
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is requested by the Company. The initial Gross-Up Payment, if
any, as determined pursuant to this Section 2.8(b), shall be
paid to the Executive within five (5) days of the receipt of
the Accounting Firm's determination. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with an opinion that the Executive
has substantial authority not to report any Excise Tax or
excess parachute payments on Executive's federal income tax
return. Any determination by the Accounting Firm shall be
binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at
the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to
be made hereunder. In the event that the Company exhausts its
remedies pursuant to Section 2.8(c) and the Executive
thereafter is required to make a payment of any Excise Tax,
the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment.
Such notification shall be given as soon as practicable but no
later than ten (10) business days after the later of either
(i) the date the Executive has actual knowledge of such claim,
or (ii) ten (10) days after the Internal Revenue Service
issues to the Executive either a written report proposing
imposition of the Excise Tax or a statutory notice of
deficiency with respect thereto, and shall apprise the Company
of the nature of such claim and the date on which such claim
is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the thirty-day period
following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the
expiration of such period that the Company desires to contest
such claim, the Executive shall: (i) give the Company any
information reasonably requested by the Company relating to
such claim, (ii) take such action in connection with
contesting such claim as the Company shall reasonably request
in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company, (iii)
cooperate with the Company in good faith in order effectively
to contest such claim, (iv) permit the Company to participate
in any proceedings relating to such claim; provided, however,
that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation of the foregoing provisions of this
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Section 2.8(c), the Company shall control all proceedings
taken in connection with such contest and, at its sole option,
may pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct the Executive to request or accede to a
request for an extension of the statute of limitations with
respect only to the tax claimed, or pay the tax claimed and
sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court
of initial jurisdiction and in one or more appellate courts,
as the Company shall determine; provided, however, that if the
Company directs the Executive to pay such claim and sue for a
refund, the Company shall advance the amount of such payment
to the Executive, on an interest-free basis and shall
indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and provided further that any
extension of the statute of limitations requested or acceded
to by the Executive at the Company's request and relating to
payment of taxes for the taxable year of the Executive with
respect to which such contested amount is claimed to be due is
limited solely to such contested amount. Furthermore, the
Company's control of the contest shall be limited to issues
with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 2.8(c), the Executive
becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company's complying
with the requirements of Section 2.8(c)) promptly pay to the
Company the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 2.8(c), a determination is
made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the
Executive in writing of its intent to contest such denial of
refund prior to the expiration of thirty (30) days after such
determination, then such advance shall be forgiven and shall
not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
(e) In the event that any state or municipality or subdivision
thereof shall subject any Payment to any special tax which
shall be in addition to the generally applicable income tax
imposed by such state, municipality, or subdivision with
respect to receipt of such Payment, the foregoing provisions
of this Section 2.8 shall apply, mutatis mutandis, with
respect to such special tax.
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Article III. The Company's Payment Obligation
3.1 Payment Obligations Absolute. Except as otherwise provided in the last
sentence of Section 2.2(e), the Company's obligation to make the payments and
the arrangements provided for in this Agreement shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right that the Company may have against the Executive or any other party. All
amounts payable by the Company under this Agreement shall be paid without notice
or demand. Each and every payment made hereunder by the Company shall be final,
and the Company shall not seek to recover all or any part of such payment from
the Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever. Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall have no obligation to make any payment to the
Executive hereunder to the extent, but only to the extent, that such payment is
prohibited by the terms of any final order of a Federal or state court or
regulatory agency of competent jurisdiction; provided, however, that such an
order shall not affect, impair, or invalidate any provision of this Agreement
not expressly subject to such order.
3.2 Contractual Rights to Payments and Benefits. This Agreement
establishes and vests in the Executive a contractual right to the payments and
benefits to which the Executive is entitled hereunder. Nothing herein contained
shall require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, earmark, or otherwise set aside any funds or other assets,
in trust or otherwise, to provide for any payments to be made or required
hereunder. The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in the last sentence of Section 2.2(e).
Article IV . Enforcement and Legal Remedies
4.1. Consent to Jurisdiction. Each of the parties hereto irrevocably
consents to personal jurisdiction in any action brought in connection with this
Agreement in the United States District Court for the Western District of
Pennsylvania or any Pennsylvania court of competent jurisdiction. The parties
also consent to venue in the above forums and to the convenience of the above
forums. Any suit brought to enforce the provisions of this Agreement must be
brought in the aforementioned forums.
4.2 Cost of Enforcement. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel in connection with the
enforcement of any or all of Executive's rights to Severance Benefits under
Section 2.2 of this Agreement, and provided that the Executive substantially
prevails in the enforcement of such rights, the Company, as applicable, shall
pay (or the Executive shall be entitled to recover from the Company, as the case
may be) the Executive's reasonable attorneys' fees, costs and expenses in
connection with the enforcement of Executive's rights.
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Article V. Binding Effect; Successors
The rights of the parties hereunder shall inure to the benefit of their
respective successors, assigns, nominees, or other legal representatives. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) to all or a significant portion of the assets of the
Company, as the case may be, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company, as the
case may be, would be required to perform if no such succession had taken place.
Regardless of whether such agreement is executed, this Agreement shall be
binding upon any successor in accordance with the operation of law and such
successor shall be deemed the "Company", as the case may be, for purposes of
this Agreement.
Article VI. Term of Agreement
The term of this Agreement shall commence on the Effective Date and shall
continue in effect for three (3) full years (the "Term") unless further extended
as provided in this Article. The Term of this Agreement shall be automatically
and without action by either party extended for one additional calendar month on
the last business day of each calendar month so that at any given time there are
no fewer than 35 nor more than 36 months remaining unless one party gives
written notice to the other that it no longer wishes to extend the Term of this
Agreement, after which written notice, the Term shall not be further extended
except as may be provided in the following sentence. However, in the event a
Change in Control occurs during the Term, this Agreement will remain in effect
for the longer of: (i) thirty-six (36) months beyond the month in which such
Change in Control occurred; or (ii) until all obligations of the Company
hereunder have been fulfilled and all benefits required hereunder have been paid
to the Executive or other party entitled thereto.
Article VII. Miscellaneous
7.1 Employment Status. Neither this Agreement nor any provision hereof
shall be deemed to create or confer upon the Executive any right to be retained
in the employ of the Company or any subsidiary or other affiliate thereof.
7.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Board of Directors of the
Company. The Executive may make or change such designation at any time.
7.3 Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof and
amends, restates and supersedes and prior change in control agreement between
the parties. Any payments actually made under this Agreement in the event of the
Executive's termination of employment shall be in lieu of any severance benefits
payable under any severance plan, program, or policy of the Company to which the
Executive might otherwise be entitled.
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7.4 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular, and the singular shall include the plural.
7.5 Notices. All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first-class
certified mail, return receipt requested, postage prepaid, to the other party,
addressed as follows:
(a) If to the Company:
Allegheny Technologies Incorporated
1000 Six PPG Place
Pittsburgh, PA 15222-5479
Attn: Executive Vice President, Human Resources, Chief Legal and
Compliance Officer, General Counsel and Corporate Secretary
(b) If to Executive, to the Executive's address set forth at the end of
this Agreement. Addresses may be changed by written notice sent to the other
party at the last recorded address of that party.
7.6 Execution in Counterparts. The parties hereto in counterparts may
execute this Agreement, each of which shall be deemed to be original, but all
such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart.
7.7. Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are for convenience of
reference and not part of the provisions hereof and shall have no force and
effect.
7.8. Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and on behalf of the Company.
7.9. Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the Commonwealth of Pennsylvania, other than the conflict of
law provisions thereof, shall be the controlling laws in all matters relating to
this Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.
ALLEGHENY TECHNOLOGIES INCORPORATED
By: _______________________________________
Title: Executive Vice President, Human Resources,
Chief Legal and Compliance Officer, General
Counsel and Corporate Secretary
EXECUTIVE:
___________________________________________
Name:
Address:
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