RTI International Metals,
Inc.
Executive Change in Control
Severance Policy
The following
executive officers (the “Executives” and each an
“Executive”) of RTI International Metals, Inc. (the
“Company”) who are appointed after the date of
adoption, as set forth below, are entitled to participate in this
Change in Control Severance Policy (the “CIC Severance
Policy”), as may be amended from time to time, together with
any other executive officer who is informed in writing by the
Company of participation:
Vice Chairman
& Chief Executive Officer (“CEO”); President &
Chief Operating Officer (“COO”); Senior Vice President
& Chief Financial Officer (“CFO”); Senior Vice
President — Strategic Planning & Finance
(“SVP”); Executive Vice President (“EVP”);
and Vice President & General Counsel
(“GC”).
If an Executive is
entitled to payments and/or benefits under this CIC Severance
Policy following Executive’s termination of employment, then
this CIC Severance Policy shall control and the Executive shall not
receive the payments and benefits provided under the
Company’s Executive Non-Change in Control Severance
Policy.
(1) “Cause”
shall mean termination upon (i) any material breach by
Executive of their Letter Agreement, (ii) the
Executive’s gross misconduct, (iii) the
Executive’s gross neglect of their duties with the Company,
insubordination or failure to follow the lawful directives of the
Board of Directors of the Company, in each case after a demand for
substantial performance is delivered to the Executive that
identifies the manner in which the Company believes that the
Executive has not acted in accordance with requirements and the
Executive has failed to resume substantial performance of their
duties within fourteen (14) days of receiving such demand,
(iv) the Executive’s commission, indictment, conviction,
guilty plea, or plea of nolo contendre to or of any felony,
a misdemeanor which substantially impairs the Executive’s
ability to perform his or her duties with the Company, act of moral
turpitude, or intentional or willful securities law violation,
including Sarbanes-Oxley law violations, (v) the
Executive’s act of theft or dishonesty which is injurious to
the Company, or (vi) the Executive’s violation of any
Company policy, including any substance abuse policy.
(2) For
purposes of this CIC Severance Policy, a “Change in
Control” of the Company shall be deemed to have occurred
if
|
|
(A)
|
|
Any
person (within the meaning of that term as used in Sections 13(d)
and 14(d) of the Exchange Act (a “Person”) is or
becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more
of the combined voting power of the Company’s then
outstanding voting securities; provided, however,
|
|
|
|
|
that for purposes of this CIC
Severance Policy the term “Person” shall not include
(i) the Company or any of its majority-owned subsidiaries,
(ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries,
(iii) an underwriter temporarily holding securities pursuant
to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock
of the Company, or
|
|
|
(B)
|
|
The
following individuals cease for any reason to constitute a majority
of the number of directors then serving on the Board of Directors
of the Company; individuals who, on the date hereof are serving as
directors on the Board and any new director (other than a director
whose initial assumption of office is in connection with an actual
or threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of the
Company) whose appointment or election by the Board or nomination
for election by the Company’s stockholders was approved by a
vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so
approved, or
|
|
|
|
|
|
|
|
(C)
|
|
There is consummated a merger or
consolidation of the Company or a subsidiary thereof with any other
corporation, other than a merger or consolidation which would
result in the holders of the voting securities of the Company
outstanding immediately prior thereto holding securities which
represent immediately after such merger or consolidation at least
60% of the combined voting power of the voting securities of the
entity surviving the merger or consolidation, (or the parent of
such surviving entity) or the shareholders of the Company approve a
plan of complete liquidation of the Company, or there is
consummated the sale or other disposition of all or substantially
all of the Company’s assets.
|
(3) “Exchange
Act” shall mean the Securities Exchange Act of
1934.
(4) “Good
Reason” shall mean, without the Executive’s express
written consent, the occurrence after a Change in Control of the
Company of any one or more of the following:
|
|
(A)
|
|
The
assignment to Executive of duties inconsistent with the
Executive’s position immediately prior to the Change in
Control;
|
|
|
|
|
|
|
|
(B)
|
|
A
material reduction or alteration in the nature of Executive’s
position, duties, status or responsibilities from those in effect
immediately prior to the Change in Control;
|
|
|
|
|
|
|
|
(C)
|
|
The
failure by the Company to continue in effect any of the
Company’s employee benefit plans, programs, policies,
practices or arrangements in which Executive participates (or
substantially equivalent successor or replacement employee benefit
plans, programs, policies, practices or arrangements) or the
failure by the Company to continue Executive’s participation
therein on substantially the same basis, both in terms of the
amount of benefits provided and the level of
|
- 2 -
|
|
|
|
Executive’s participation
relative to other participants, as existed immediately prior to the
Change in Control;
|
|
|
(D)
|
|
The
failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform
Executive’s Letter Agreement;
|
|
|
|
|
|
|
|
(E)
|
|
Any
purported termination by the Company of Executive’s
employment that is not effected pursuant to the termination
requirements as may be set forth in Executive’s Letter
Agreement; and
|
|
|
|
|
|
|
|
(F)
|
|
The
Company’s requiring Executive to be based at a location in
excess of fifty (50) miles from the location where Executive
is based immediately prior to the Change in Control.
|
(5) “Letter
Agreement” shall mean the Executive’s employment letter
agreement with the Company.
(6) “Payment
Multiple” shall mean: 2.5, in the case of the CEO; 2.0, in
the case of the COO, CFO, SVP, EVP and GC;
(7) “Payment
Period” shall mean a number of months equal to the Payment
Multiple times twelve (12), which for purposes of measurement shall
commence upon the Executive’s separation from
service.
Following a Change
in Control of the Company, upon termination of an Executive’s
employment within twenty-four (24) months following the Change
in Control Executive shall be entitled to the following
benefits:
(1) If
Executive’s employment shall be terminated by the Company for
Cause or by Executive other than for Good Reason, no benefits shall
be payable pursuant to this CIC Severance Policy, and the Company
shall pay Executive the benefits provided within his or her Letter
Agreement.
(2) If
Executive’s employment terminates by reason of
Executive’s death or disability, no benefits shall be payable
pursuant to this CIC Severance Policy, and the Executive shall be
entitled to the benefits provided within his or her Letter
Agreement and the Company’s retirement, survivor’s
benefits, insurance and other applicable programs and plans, then
in effect.
(3) If
Executive’s employment by the Company is terminated
(i) by the Company other than for Cause or Executive’s
death or disability, or (ii) by Executive for Good Reason,
Executive shall be entitled to the benefits provided in
subparagraphs (i) through (vi) below, which shall be in
lieu of and cancel any further rights Executive has to receive any
Base Salary that would be otherwise due under his or her Letter
Agreement:
(i) The Company
will pay as severance benefits, a severance payment (the
“Severance Payment”) equal to the product of the
Payment Multiple times the sum of (x)
- 3 -
Executive’s annual Base Salary in effect
immediately prior to the occurrence of the circumstances giving
rise to such termination, and (y) the amount equal to
Executive’s Annual Bonus. For purposes of the preceding
sentence, Annual Bonus means the product of (x) the greater of
(aa) Executive’s average actual Bonus Percent for the
three years immediately preceding the date of termination, or
shorter period if Executive was employed for less than three years,
and (bb) Executive’s target Bonus Percent at the time of
termination, and (y) Executive’s Base Salary. For purposes of
calculating Annual Bonus under the preceding sentence, Bonus
Percent means the actual or target bonus amount paid or payable to
Executive with respect to a particular year or years divided by the
Base Salary paid or payable to Executive for such year or years.
The Severance Payment shall be payable on the first day following
the six month anniversary of Executive’s separation from
service; provided, however, the Severance Payment must be repaid in
full to the Company in the event that the Executive violates his or
her duty to maintain in strict confidence and not disclose any
confidential information, as set forth in his or her Letter
Agreement, or provides or engages in the dissemination of false
and/or defamatory information pertaining to the Company, to its
shareholders or otherwise; provided, further, in the event the
event giving rise to a Change in Control does not qualify as a
change in the ownership or effective control of a corporation, or a
change in the ownership of a substantial portion of the assets of a
corporation, within the meaning of Treas. Reg. §
1.409A-3(i)(5), severance payments shall be made in accordance with
the methodology specified in Paragraph 3(i) of the RTI
International Metals, Inc. Executive Non-Change in Control
Severance Policy;
|
