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Exhibit 10K
AMENDED AND
RESTATED
CARPENTER TECHNOLOGY
CORPORATION
CHANGE OF CONTROL
SEVERANCE PLAN
INTRODUCTION
As is the case with many
publicly held corporations, there exists the possibility of a
Change of Control of the Company. This possibility and the
uncertainty it creates may result in the loss or distraction of
employees of the Company and its Subsidiaries to the detriment of
the Company and its stockholders. The avoidance of such loss and
distraction is essential to protecting and enhancing the best
interests of the Company and its stockholders.
When a Change of Control is
perceived as imminent, or is occurring, the Company should be able
to receive and rely on disinterested service from employees
regarding the best interests of the Company and its stockholders
without concern that employees might be distracted or concerned by
the personal uncertainties and risks created by the perception of
an imminent or occurring Change of Control.
It is consistent with the
employment practices and policies of the Company and its
Subsidiaries and in the best interests of the Company and its
stockholders to treat fairly its employees whose employment
terminates in connection with or following a Change of Control.
Accordingly, it has been determined that appropriate steps should
be taken to assure the Company and its Subsidiaries of the
continued employment and attention and dedication to duty of their
employees and to seek to ensure the availability of their continued
service, notwithstanding the possibility, threat or occurrence of a
Change of Control.
Therefore, in order to
fulfill the above purposes, the Carpenter Technology Corporation
Change Of Control Severance Plan was developed and
adopted.
The Company now desires to
make certain amendments to the Carpenter Technology Corporation
Change Of Control Severance Plan as deemed advisable to prevent an
inclusion of income or imposition of penalties under
Section 409A of the Internal Revenue Code of 1986, as amended
(the “ Code ”) or as deemed advisable to
facilitate compliance with Section 409A of the
Code.
Therefore, in order to
fulfill the immediately preceding purpose, the Carpenter Technology
Corporation Change Of Control Severance Plan has been amended and
restated in its entirety.
ARTICLE I
ESTABLISHMENT OF
PLAN
As of the Effective Date, the
Company hereby establishes a separation compensation plan known as
the Carpenter Technology Corporation Change of Control Severance
Plan, as set forth in this document.
ARTICLE II
DEFINITIONS
As used herein the following
words and phrases shall have the following meanings unless the
context clearly indicates otherwise:
(a) Affiliated Company
. Any company controlled by, controlling or under common control
with the Company.
(b) Annual Salary .
The Participant’s regular annual base salary immediately
prior to his or her termination of employment, including
compensation converted to other benefits under a flexible pay
arrangement maintained by the Company or any Subsidiary or deferred
pursuant to a written plan or agreement with the Company or any
Subsidiary, but excluding overtime pay, allowances, premium pay,
compensation paid or payable under any Company bonus or incentive
plan of the Company or any Subsidiary or any similar
payment.
(c) Board . The Board
of Directors of Carpenter Technology Corporation.
(d) Cause . With
respect to any Participant: (i) the willful and continued
failure of the Participant to perform substantially the
Participant’s duties with the Company or any Subsidiary
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to the Participant by an executive officer
of the Company which specifically identifies the manner in which
the executive officer believes that the Participant has not
substantially performed the Participant’s duties, or
(ii) the willful engaging by the Participant in illegal
conduct or gross misconduct which is materially and demonstrably
injurious to the Company or any Subsidiary. For purposes of this
definition, no act or failure to act on the part of the Participant
shall be considered “willful” unless it is done, or
omitted to be done, by the Participant in bad faith or without
reasonable belief that the Participant’s action or omission
was in the best interests of the Company or any Subsidiary. Any act
or failure to act based upon authority (A) given pursuant to a
resolution duly adopted by the Board, or if the Company is not the
ultimate parent corporation of the Affiliated Companies and is not
publicly-traded, the board of directors of the ultimate parent of
the Company, (B) upon the instructions of the Chief Executive
Officer or another executive officer of the Company or any
Subsidiary or (C) based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Participant in good faith and in the best interests of
the Company.
(e) Change of Control
. The occurrence of any of the following events:
(i) Any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the “
Exchange Act ”)) (a “ Person ”)
becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated
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under the Exchange Act) of
20% or more of either (x) the then-outstanding shares of
common stock of the Company (the “ Outstanding Company
Common Stock ”) or (y) the combined voting power of
the then-outstanding voting securities of the Company entitled to
vote generally in the election of directors (the “
Outstanding Company Voting Securities ”);
provided , however , that, for purposes of this
subsection (i), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any Affiliated Company,
or (D) any acquisition pursuant to a transaction that complies
with clauses (A), (B), and (C) of paragraph (iii) of this
definition of Change of Control;
(ii) Individuals who, as of
the Effective Date, constitute the Board (the “ Incumbent
Board ”) cease for any reason to constitute at least a
majority of the Board; provided , however , that any
individual becoming a director subsequent to the Effective Date
whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered
as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the
Board;
(iii) Consummation of a
reorganization, merger, statutory share exchange or consolidation
or similar transaction involving the Company or any of its
subsidiaries, a sale or other disposition of all or substantially
all of the assets of the Company or the acquisition of the assets
or stock of another entity by the Company or any of its
subsidiaries (each, a “ Business Combination ”),
in each case, unless, following such Business Combination,
(A) all or substantially all of the individuals and entities
that were the beneficial owners of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of the then-outstanding shares of common
stock (or, for a non-corporate entity, equivalent securities) and
the combined voting power of the then-outstanding voting securities
entitled to vote generally in the election of directors (or, for a
non-corporate entity, equivalent governing body), as the case may
be, of the entity resulting from such Business Combination
(including, without limitation, an entity that, as a result of such
transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (excluding any
corporation resulting from such Business Combination or any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such Business Combination) beneficially
owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting
power of the then-outstanding voting
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securities of such
corporation, except to the extent that such ownership existed prior
to the Business Combination, and (C) at least a majority of
the members of the board of directors (or, for a non-corporate
entity, equivalent governing body) of the entity resulting from
such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement or of the action
of the Board providing for such Business Combination; or
(iv) Approval by the
stockholders of the Company of a complete liquidation or
dissolution of the Company.
(f) Code . The
Internal Revenue Code of 1986, as amended from time to
time.
(g) Committee . The
Human Resources Committee of the Board.
(h) Company .
Carpenter Technology Corporation and any successor or assignee to
the business or assets which becomes bound by this Plan by reason
of Article V.
(i) Date of
Termination . The date on which a Participant ceases to be an
Employee of an Employer.
(j) Disability . A
condition such that the Participant has terminated employment with
the Participant’s Employer with a qualifying disability and
has immediately begun receiving benefits from a long-term
disability plan of the Company or any Employer.
(k) Effective Date .
August 20, 2007.
(l) Employee . A
full-time employee of an Employer.
(m) Employer . The
Company or any Subsidiary (or any parent corporation of the Company
or any of such parent corporation’s subsidiaries) by which a
Participant is employed.
(n) ERISA . The
Employee Retirement Income Security Act of 1974, as amended from
time to time.
(o) Good Reason . With
respect to any Participant, without such Participant’s
written consent, actions taken by the Company resulting in a
material negative change in the employment relationship. For these
purposes, a “material negative change in the employment
relationship” includes: (i) any reduction in the
Participant’s Annual Salary or Target Annual Bonus
opportunity, as in effect during the 120-day period immediately
preceding the Change of Control (or as such amounts may be
increased from time to time), other than as a result of an isolated
and inadvertent action not taken in bad faith ; (ii) the
Employer requiring the Participant to relocate his or her principal
place of business to a location which is more than 35 miles from
his or her previous principal place of business; (iii) the
assignment to the Participant of any
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duties inconsistent in any material and
adverse respect with the duties assigned to the Participant during
the 120-day period immediately prior to a Change of Control, other
than an isolated, insubstantial and inadvertent action that is not
taken in bad faith; or (iv) any material reduction in benefits
of the Participant, as in effect during the 120-day period
immediately preceding the Change of Control, other than as a result
of an isolated and inadvertent action not taken in bad faith;
provided , however , that no material reduction shall
be deemed to have occurred following a Change of Control if the
benefits provided to the Participant are (A) reasonably
equivalent to the benefits provided to similarly situated employees
of the company resulting from a Business Combination and its
subsidiaries, and (B) comparable to the benefits provided to
the Participant immediately prior to the Change of Control;
(v) any purported termination of the Plan otherwise than as
expressly permitted by the Plan; or (vi) any failure by the
Employer to comply with and satisfy Article VI of the Plan.
Notwithstanding the foregoing, a Participant’s mental or
physical incapacity following the occurrence of material negative
change in the employment relationship shall not affect a
Participant’s ability to terminate employment for Good
Reason. In order to invoke a termination for Good Reason, the
Participant shall provide written notice to the Company of the
existence of one or more of the conditions described in clauses
(i) through (iv) within 90 days after the Participant has
knowledge of such condition or conditions, and the Company shall
have 30 days following receipt of such written notice (the
“Cure Period”) during which it may remedy the
condition. In the event that the Company fails to remedy the
condition constituting Good Reason during the Cure Period, the
Participant must terminate employment, if at all, within 90 days
following the Cure Period in order to terminate employment for Good
Reason.
(p) Participant . Any
individual whose employment is classified as job class 19 or above
and any other individual employed by the Company or any of its
Affiliated Companies in an equivalent position who is designated as
a Participant by the Chief Executive Officer of the Company;
provided , however , that no individual who is a
party to a separately executed change of control or similar
agreement with the Company or any of its Affiliated Companies
entered into prior to a Change of Control shall be a Participant so
long as such agreement remains in force. Each individual who is a
Participant immediately prior to a Change of Control shall remain a
Participant at least until the second anniversary of the Change of
Control. Notwithstanding the foregoing, individuals employed
primarily outside of the United States are not eligible to be
Participants.
(q) Plan . Amended and
Restated Carpenter Technology Corporation Change of Control
Severance Plan.
(r) Separation
Benefits . The benefits described in Section 4.2 that are
provided to qualifying Participants under the Plan.
(s) Subsidiary . Any
corporation in which the Company, directly or indirectly, holds a
majority of the voting power of such corporation’s
outstanding shares of capital stock.
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(t) Target Annual
Bonus . The Participant’s target bonus under the
Company’s annual incentive plans for the fiscal year in which
such Participant’s Date of Termination occurs (or, if no
target bonus has been set for such fiscal year, the
Participant&
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