Allegheny Technologies
Incorporated
Key
Executive Performance Plan
Effective as of January 1,
2004
And as amended February 24, 2005
and as further amended on February 22, 2006
Article I. Adoption and Purpose of the Key
Executive Performance Plan
1.01
Adoption. This Key Executive Performance Plan is adopted by
the Personnel and Compensation Committee of the Board of Directors
as a part of the Allegheny Technologies Incorporated executive
compensation program effective January 1, 2004. The KEPP
Payments, if any, earned under this Plan are intended as
performance based compensation within the meaning of Section 162(m)
of the Internal Revenue Code of 1986, as amended, as incentive
compensation determined solely with reference to attainment in
predetermined levels of Earnings and Operational Goals within the
relevant Performance Period.
1.02
Purpose. The purposes of the KEPP are (i) to direct the
focus of key management employees to the achievement of goals
deemed necessary for the success of the Corporation, (ii) 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 and (iii) to
reward key management employees for the overall success of the
Corporation as determined with reference to predetermined levels of
Earnings of the Corporation and attainment of Operational Goals.
The KEPP is 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 achievement of predetermined levels of
Earnings of the Corporation and attainment of Operational
Goals.
1.03 Plan
Document. This KEPP plan document is intended as the plan
document as adopted by the Committee, which will govern all
Performance Periods of the KEPP beginning in or after
2004.
For purposes of
this Plan, the capitalized terms set forth below shall have the
following meanings:
2.01 Award
means an opportunity to earn a KEPP Payment in a particular
Performance Period. Each Award shall be denominated in dollars that
can be earned upon attainment of predetermined Earnings thresholds
(Level 1) and the maximum amount that may be paid with respect to
Operational Goals before the application of Negative Discretion
(Level 2).
2.02 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 KEPP Award
granted to a Participant pursuant to Article VI of this
Plan.
2.03 Board
means the Board of Directors of the Corporation.
2.04 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.
2.05 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.
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2.06
Committee means the Personnel and Compensation Committee of
the Board.
2.07
Corporation means Allegheny Technologies Incorporated, a
Delaware corporation, and its successors.
2.08
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.
2.09 Date of
Award means the date as of which an Award is granted in
accordance with Article VI of this Plan.
2.10
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
KEPP.
2.11
Earnings means the earnings of the Corporation determined in
accordance with generally accepted accounting principles,
provided, however, for the 2005 through 2007 and the 2006
through 2008 Performance Periods, Earnings shall be expressed in
terms of income before taxes.
2.12 Effective
Date means January 1, 2004.
2.13 Exchange
Act means the Securities Exchange Act of 1934, as
amended.
2.14 KEPP
Payment means the amount actually earned by a Participant in a
particular Performance Period. Each KEPP Payment shall be the sum
of the amounts earned by a Participant during a Performance Period
as Level I and Level 2 achievement or, for the 2006-2008
Performance Period, the amount under the Participant Retention
Achievement Bank under Section 8.04.
2.15 Level
1 means that portion of an Award that may be earned based on
attainment of Earnings.
2.16 Level
2 means that portion of an Award that may be earned, after
application of Negative Discretion by the Committee, based on
attainment of Operational Goals. The Level 2 portion of any Award
shall be denominated in the maximum amount that may be earned with
respect to Operational Goals prior to the application of Negative
Discretion.
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2.17 Negative
Discretion means the power of the Commit
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