This Employee Benefits Plan Agreement involves
Title: CARPENTER TECHNOLOGY CORPORATION DEFERRED COMPENSATION PLAN FOR NON-MANAGEMENT DIRECTORS As amended and restated, effective August 19, 2011
Governing Law: Pennsylvania Date: 8/24/2011
Industry: Iron and Steel Sector: Basic Materials
CARPENTER TECHNOLOGY CORPORATION
DEFERRED COMPENSATION PLAN
FOR NON-MANAGEMENT DIRECTORS
As amended and restated, effective August 19, 2011
This is an amendment and restatement of the Carpenter Technology Corporation Deferred Compensation Plan for Non-Management Directors (the “Plan”), effective August 19, 2011, established by Carpenter Technology Corporation and its subsidiaries expressly included herein to provide its non-employee directors with an additional method of planning for their retirement. The Plan is intended to be an unfunded plan maintained for the purpose of providing deferred compensation to the non-employee directors of Carpenter Technology Corporation.
The Plan has been amended and restated to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.
ARTICLE I - DEFINITIONS
The following words and phrases as used herein have the following meanings unless the context plainly requires a different meaning:
1.1 “Account” means the total amount credited to the bookkeeping accounts in which a Participant’s Deferral Credits are maintained, including earnings thereon. The Accounts will consist of Tranches for each type of Deferral made under Article IV, as the Plan Administrator deems necessary.
1.2 “Beneficiary” means the person that the Participant designates to receive any unpaid portion of the Participant’s Account should the Participant’s death occur before the Participant receives the entire balance to the credit of such Participant’s Account. If the Participant does not designate a beneficiary, his Beneficiary shall be his spouse if he is married at the time of his death, or his estate if he is unmarried at the time of his death.
1.3 “Board of Directors” means the board of directors of Carpenter Technology Corporation.
1.4 “Change in Control” means and includes each of the following which also constitutes a “change in the ownership or effective control of the corporation or in the ownership of a substantial portion of the assets of the corporation” within the meaning of Code Section 409A and the Treasury regulations issued thereunder:
1.4.1 The acquisition by any individual, entity, or group (within the meaning of section 13(d)(3) or 14(d)(2) of the Exchange Act) (each, a “Person”) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of more than 50% of either (i) the then-outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”) or (ii) 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, the following acquisitions shall not constitute a Change in Control: (i) any acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any affiliated company or (iv) any acquisition by any corporation pursuant to a transaction that complies with Sections 1.4.3 (i), 1.4.3 (ii) and 1.4.3(iii);
1.4.2 individuals who, as of the date hereof, constitute the Board of Directors (the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board of Directors during any 12 month period; provided, however, that any individual becoming a director subsequent to the date hereof 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 of Directors;
1.4.3 consummation of a reorganization, merger, consolidation or 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 (a “Business Combination”), in each case, unless, following such Business Combination, (i) 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 and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation 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, (ii) 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 securities of such corporation, except to the extent that such ownership existed prior to the Business Combination, and (iii) at least a majority of the members of the board of directors of the corporation 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 of Directors providing for such Business Combination.
1.5 “Code” means the Internal Revenue Code of 1986, as amended.
1.6 “Company” means the Carpenter Technology Corporation or any successor by merger, purchase or otherwise.
1.7 “Compensation” means all cash amounts that a Director receives in payment for serving on the Board of Directors. Notwithstanding the preceding sentence, Compensation shall not include amounts either granted or elected as stock units under the Carpenter Technology
Corporation Stock-Based Compensation Plan for Non-Employee Directors, or identified by the Company as expense allowances or reimbursements.
1.8 “Credits” means the amount credited to a Participant’s Account or Tranche, as appropriate, as a result of a Participant’s Deferrals plus earnings credited under Section 4.4.
1.9 “Deferral” means an amount deferred under the Plan pursuant to a Participant’s election under Article IV and credited to a Participant’s Account. No money or other assets will actually be contributed to such Accounts.
1.10 “Director” means an individual who serves on the Board of Directors.
1.11 “Disability” means a qualified physician designated by the Company has reviewed and approved the determination that a Participant:
1.11.1 is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or
1.11.2 is, by reasons of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering Directors or employees of the Company or any subsidiary.
1.12 “Effective Date” means August 19, 2011.
1.13 “Event” means any one or combination of the following elected by the Participant in writing prior to the year of deferral to govern distribution of a Tranche: Change in Control, Disability, Termination or specific date or dates (such as attainment of a specified age). When a Participant elects a combination of events, the Participant must specify whether the event that is the “earlier of” or “later of” will control distribution. In the absence of a designation by the Participant, the “earlier of” will apply to a combination of events.
1.14 “Five-Year Medium Term Note Borrowing Rate” means the Company’s Five-Year Medium Term Note Borrowing Rate, as provided by one of the Company’s investment bankers for any such medium term note that would have been issued on August 15 (or the next business day thereafter if August 15 is not a business day) of each Plan Year.
1.15 “Participant” means a Director who is eligible and elects to participate in the Plan pursuant to Article II.
1.16 “Plan Committee” means the Plan Committee appointed pursuant to the General Retirement Plan for Employees of Carpenter Technology Corporation, as constituted from time to time.
1.17 “Plan” means this Carpenter Technology Corporation Deferred Compensation Plan for Non-Management Directors, as may be amended from time to time.
1.18 “Plan Administrator” means the Plan Committee.
1.19 “Plan Year” means the 12-month period beginning October 1 and ending September 30.
1.20 “Termination” means a Participant’s termination of service as a Director with the Company which constitutes a “separation from service” within the meaning of Code Section 409A.
1.21 “Tranche” means the Deferrals and associated investment results related to each separate election made by a Participant under Article IV.
1.22 “Unforeseeable Emergency” means a severe financial hardship to the Participant or a Beneficiary resulting from an illness or accident of the Participant, the Participant’s spouse, or a dependent (as defined in Code section 152, without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)) of the Participant, loss of the Participant’s property due to casualty, need to pay for medical expenses, or need to pay for funeral expenses of a spouse, Beneficiary or dependent (as defined in Code section 152, without regard to sections 152(b)(1), (b)(2) and (d)(1)(B)), or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant.
ARTICLE II - PARTICIPATION
2.1 Eligibility to Participate . All Directors who are neither current nor past employees of the Company or any of its subsidiaries are eligible to participate in the Plan.
2.2 Participation . Any Director who elects to participate in the Plan shall become a Participant in the Plan immediately upon enrolling as a Participant by the method required by the Plan Administrator. An individual shall remain a Participant in the Plan until all amounts credited to the Participant’s Account have been distributed to the Participant or the Participant’s Beneficiary.
ARTICLE III - VESTING
Participants are always fully vested in all amounts credited to their Accounts.
ARTICLE IV - DEFERRAL CREDITS
4.1 Eligibility to Receive Deferral Credits . Subject to Section 4.2, a Participant may receive Deferral Credits in each Plan Year that the Participant is a Director and is not an employee of the Company.
4.2 Deferrals . A Participant may elect to defer receipt of up to 100% of the Participant’s Compensation and to have the Company credit that amount to the Participant’s Account under the Plan.
4.3 Elections .