ALLEGHENY TECHNOLOGIES
INCORPORATED
2000 INCENTIVE PLAN
(as amended)
ARTICLE I.
PURPOSE AND ADOPTION OF THE PLAN
1.1.
Purpose. The purpose of the Allegheny Technologies
Incorporated 2000 Incentive Plan (hereinafter referred to as the
“Plan”) is to assist in attracting and retaining highly
competent employees, to act as an incentive in motivating selected
officers and other key employees of Allegheny Technologies
Incorporated and its Subsidiaries to achieve long-term corporate
objectives and to enable cash incentive awards to qualify as
performance-based for purposes of the tax deduction limitations
under Section 162(m) of the Code.
1.2.
Adoption and Term. The Plan was approved by the Board of
Directors of Allegheny Technologies Incorporated, to be effective
as of January 1, 2000 (the “Effective Date”), and
approved by the stockholders of the Company on May 11, 2000.
The Plan shall remain in effect until the tenth anniversary of the
date the stockholders of the Company approve the Plan, unless
terminated by action of the Board prior to that date, and the
provisions of Articles VII, VIII, IX and X with respect to
performance-based awards to “covered employees” under
Section 162(m) of the Code shall expire as of the fifth anniversary
of the date the stockholders of the Company approved the Plan,
until and unless reapproved by the stockholders of the
Company.
1.3. The
Prior Plan. The Company previously adopted the Allegheny
Teledyne Incorporated 1996 Incentive Plan (the “Prior
Plan”). Awards granted under the Prior Plan prior to the date
the stockholders of the Company approve the Plan shall not be
affected by the adoption of this Plan, and the Prior Plan shall
remain the effect following the date the stockholders of the
Company approve the Plan to the extent necessary to administer such
awards, but no new Awards shall be granted under the Prior Plan
after the date the stockholders of the Company approve the
Plan.
For
the purpose of this Plan, capitalized terms shall have the
following meanings:
2.1. Award means any one or a combination of
Non-Qualified Stock Options or Incentive Stock Options described in
Article VI, Stock Appreciation Rights described in
Article VI, Restricted Shares described in Article VII,
Performance Awards described in Article VIII, Awards of cash
or any other Award made under the terms of the Plan.
2.2. Award Agreement means a written agreement
between the Company and a Participant or a written acknowledgment
from the Company to a Participant specifically setting forth the
terms and conditions of an Award granted under the Plan.
2.3. Award Period means, with respect to an Award,
the period of time set forth in the Award Agreement during which
specified target performance goals must be achieved or other
conditions set forth in the Award Agreement must be
satisfied.
2.4. Beneficiary means an individual, trust or estate
who or which, by a written designation of the Participant filed
with the Company or by operation of law, succeeds to the rights and
obligations of the Participant under the Plan and the Award
Agreement upon the Participant’s death.
2.5. Board means the Board of Directors of the
Company .
2.6. Change in Control means, and shall be deemed to
have occurred upon the occurrence of, any one of the following
events:
(a)
The acquisition in one or more transactions, other than from the
Company, 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 Company Voting
Securities in excess of 25% of the Company Voting Securities unless
such acquisition has been approved by the Board;
(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 the Effective
Date and (ii) persons who were nominated for elections as
members of the Board at a time when two-thirds of the Board
consisted of persons who were members of the Board on the Effective
Date; provided, however, that any person nominated for election by
a Board at least two-thirds of whom constituted persons described
in
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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);
(c)
Approval by the stockholders of the Company 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 Common Stock and Company Voting Securities
immediately prior to such reorganization, merger or consolidation,
following such reorganization, merger or consolidation beneficially
own, directly or indirectly, more than seventy five (75%) 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 Common Stock and
Company Voting Securities immediately prior to such reorganization,
merger or consolidation, as the case may be; or
(d)
Approval by the stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a sale or
other disposition of all or substantially all the assets of the
Company.
2.7. Code means the Internal Revenue Code of 1986, as
amended. References to a section of the Code shall include that
section and any comparable section or sections of any future
legislation that amends, supplements or supersedes said
section.
2.8. Committee means the Committee defined in
Section 3.1.
2.9. Company or Corporation means
Allegheny Technologies Incorporated, a Delaware corporation, and
its successors.
2.10. Common Stock means Common Stock of the Company,
par value $.10 per share.
2.11. Company Voting Securities means the combined
voting power of all outstanding voting securities of the Company
entitled to vote generally in the election of directors to the
Board.
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2.12. Date
of Grant means the date designated by the Committee as the
date as of which it grants an Award, which shall not be earlier
than the date on which the Committee approves the granting of such
Award.
2.13.
Effective Date shall have the meaning given to such term in
Section 1.2.
2.14.
Exchange Act means the Securities Exchange Act of 1934, as
amended.
2.15.
Exercise Price means, with respect to a Stock Appreciation
Right, the amount established by the Committee in the Award
Agreement which is to be subtracted from the Fair Market Value on
the date of exercise in order to determine the amount of the
payment to be made to the Participant, as further described in
Section 6.2(b) .
2.16. Fair
Market Value means, on any date, the average of the high
and low quoted sales prices of a share of Common Stock, as reported
on the Composite Tape for New York Stock Exchange Listed Companies,
on such date or, if there were no sales on such date, on the last
date preceding such date on which a sale was reported.
2.17.
Incentive Stock Option means a stock option within the
meaning of Section 422 of the Code.
2.18.
Merger means any merger, reorganization, consolidation,
exchange, transfer of assets or other transaction having similar
effect involving the Company.
2.19.
Non-Qualified Stock Option means a stock option which is
not an Incentive Stock Option.
2.20.
Options means all Non-Qualified Stock Options and Incentive
Stock Options granted at any time under the Plan.
2.21.
Outstanding Common Stock means, at any time, the issued and
outstanding shares of Common Stock.
2.22.
Participant means a person designated to receive an Award
under the Plan in accordance with Section 5.1.
2.23.
Performance Awards means Awards granted in accordance with
Article VIII.
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2.24.
Performance Goals means operating income, operating profit,
income before taxes, earnings per share, return on investment or
working capital, return on stockholders’ equity, economic
value added (the amount, if any, by which net operating profit
after tax exceeds a reference cost of capital), balanced scorecard,
cash flow, reductions in inventory, inventory turns and on-time
delivery performance, any one of which may be measured with respect
to the Company or any one or more of its Subsidiaries or business
units and either in absolute terms or as compared to another
company or companies, and safety measures and other quantifiable,
objective measures of individual performance relevant to the
particular individual’s job responsibilities.
2.25.
Plan means the Allegheny Technologies Incorporated 2000
Incentive Plan as described herein, as the same may be amended from
time to time.
2.26. Prior
Plan shall have the meaning given to such term in
Section 1.3.
2.27.
Purchase Price , with respect to Options, shall have the
meaning set forth in Section 6.1(b).
2.28.
Restoration Option means a Non-Qualified Stock Option
granted pursuant to Section 6.1(f).
2.29.
Restricted Shares means Common Stock subject to
restrictions imposed in connection with Awards granted under
Article VII.
2.30.
Retirement means early or normal retirement under a pension
plan or arrangement of the Company or one of its Subsidiaries in
which the Participant participates.
2.31.
Rule 16b-3 means Rule 16b-3 promulgated by the
Securities and Exchange Commission under Section 16 of the
Exchange Act, as the same may be amended from time to time, and any
successor rule.
2.32. Stock
Appreciation Rights means Awards granted in accordance with
Article VI.
2.33.
Subsidiary means a subsidiary of the Company within the
meaning of Section 424(f) of the Code.
2.34.
Termination of Employment means the voluntary or
involuntary termination of a Participant’s employment with
the Company or a Subsidiary for any reason, including death,
disability, retirement or as the result of the
divestiture
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of the
Participant’s employer or any similar transaction in which
the Participant’s employer ceases to be the Company or one of
its Subsidiaries. Whether entering military or other government
service shall constitute Termination of Employment, or whether a
Termination of Employment shall occur as a result of disability,
shall be determined in each case by the Committee in its sole
discretion.
ARTICLE III.
ADMINISTRATION
3.1.
Committee. The Plan shall be administered by a committee of
the Board (“Committee”) comprised of at least two
persons. The Committee shall have exclusive and final authority in
each determination, interpretation or other action affecting the
Plan and its Participants. The Committee shall have the sole
discretionary authority to interpret the Plan, to establish and
modify administrative rules for the Plan, to impose such conditions
and restrictions on Awards as it determines appropriate and to
cancel Awards (including those made pursuant to other plans of the
Company), and to take such steps in connection with the Plan and
Awards granted hereunder as it may deem necessary or advisable. The
Committee shall not, however, have or exercise any discretion that
would disqualify amounts payable under Article X as
performance-based compensation for purposes of Section 162(m) of
the Code. The Committee may delegate such of its powers and
authority under the Plan as it deems appropriate to designated
officers or employees of the Company. In addition, the full Board
may exercise any of the powers and authority of the Committee under
the Plan. In the event of such delegation of authority or exercise
of authority by the Board, references in the Plan to the Committee
shall be deemed to refer, as appropriate, to the delegate of the
Committee or the Board. The selection of members of the Committee
or any subcommittee thereof, and any delegation by the Committee to
designated officers or employees, under this Section 3.1 shall
comply with Section 16(b) of the Exchange Act, the
performance-based provisions of Section 162(m) of the Code, and the
regulations promulgated under each of such statutory provisions, or
the respective successors to such statutory provisions or
regulations, as in effect from time to time, except to the extent
that the Board determines that such compliance is not necessary or
desirable.
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4.1. Number
of Shares Issuable. The total number of shares authorized
to be issued under the Plan shall equal 10% of the outstanding
shares of the Common Stock as of the Effective Date. If the number
of outstanding shares of Common Stock is increased after the
Effective Date, the total number of shares available under the Plan
will be increased by 10% of such increase. The number of shares
available for issuance under the Plan shall be further subject to
adjustment in accordance with Section 11.7. The shares to be
offered under the Plan shall be authorized and unissued Common
Stock, or issued Common Stock which shall have been reacquired by
the Company. Of the total number of shares authorized for grant
under the Plan, the Company may issue no more than one million
shares as awards of restricted stock, subject to adjustment in
accordance with Section 11.7.
4.2. Shares
Subject to Terminated Awards. Common Stock covered by any
unexercised portions of terminated Options (including canceled
Options) granted under Article VI, Common Stock forfeited as
provided in Section 7.2(a) and Common Stock subject to any
Awards which are otherwise surrendered by the Participant may again
be subject to new Awards under the Plan. Common Stock subject to
Options, or portions thereof, which have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not
be available for subsequent Awards under the Plan, but Common Stock
issued in payment of such Stock Appreciation Rights shall not be
charged against the number of shares of Common Stock available for
the grant of Awards hereunder. Common Stock covered by awards
granted under the Prior Plan that after the Effective Date are
terminated unexercised, forfeited or otherwise surrendered shall be
available for subsequent Awards under this Plan.
5.1.
Eligible Participants. Participants in the Plan shall be
such officers and other key employees of the Company and its
Subsidiaries, whether or not members of the Board, as the
Committee, in its sole discretion, may designate from time to time.
The Committee’s designation of a Participant in any year
shall not require the Committee to designate such person to receive
Awards or grants in any other year. The designation of a
Participant to receive awards or grants under one portion of the
Plan does not require the Committee to include such Participant
under other portions of the Plan. The Committee shall consider such
factors as it
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deems pertinent
in selecting Participants and in determining the type and amount of
their respective Awards. Notwithstanding any provision herein to
the contrary, the Committee may grant Awards under the Plan, other
than Incentive Stock Options, to non-employees who, in the judgment
of the Committee, render significant services to the Company or any
of its Subsidiaries, on such terms and conditions as the Committee
deems appropriate and consistent with the intent of the Plan.
Subject to adjustment in accordance with Section 11.7, in any
calendar year, no Participant shall be granted Awards in respect of
more than 1 million shares of Common Stock (whether through
grants of Options or Stock Appreciation Rights or other grants of
Common Stock or rights with respect thereto) and $5 million in
cash; provided, however, that any Award payable over a period of
more than one year shall be pro-rated over the applicable period in
determining the amount of the Award granted in any calendar
year.
ARTICLE VI.
STOCK OPTIONS AND STOCK APPRECIATION RIGHTS
(a) Grant of Options. The Committee may grant,
to such Participants as the Committee may select, Options entitling
the Participant to purchase shares of Common Stock from the Company
in such number, at such price, and on such terms and subject to
such conditions, not inconsistent with the terms of this Plan, as
may be established by the Committee. The terms of any Option
granted under this Plan shall be set forth in an Award
Agreement.
(b) Purchase Price of Options. The Purchase
Price of each share of Common Stock which may be purchased upon
exercise of any Option granted under the Plan shall be determined
by the Committee; provided, however, that the Purchase Price of the
Common Stock purchased pursuant to Options designated by the
Committee as Incentive Stock Options shall be equal to or greater
than the Fair Market Value on the Date of Grant as required under
Section 422 of the Code.
(c) Designation of Options. Except as otherwise
expressly provided in the Plan, the Committee may designate, at the
time of the grant of each Option, the Option as an Incentive Stock
Option or a Non-Qualified Stock Option.
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(d) Incentive Stock Option Share Limitation. No
Participant may be granted Incentive Stock Options under the Plan
(or any other plans of the Company and its Subsidiaries) which
would result in shares with an aggregate Fair Market Value
(measured on the Date of Grant) of more than $100,000 first
becoming exercisable in any one calendar year.
(e) Rights as a Stockholder. A Participant or a
transferee of an Option pursuant to Section 11.4 shall have no
rights as a stockholder with respect to Common Stock covered by an
Option until the Participant or transferee shall have become the
holder of record of any such shares, and no adjustment shall be
made for dividends in cash or other property or distributions or
other rights with respect to any such Common Stock for which the
record date is prior to the date on which the Participant or a
transferee of the Option shall have become the holder of record of
any such shares covered by the Option; provided, however, that
Participants are entitled to share adjustments to reflect capital
changes under Section 11.7.
(f) Restoration Options Upon the Exercise of a
Non-Qualified Stock Option. In the event that any
Participant delivers to the Company, or has withheld from the
shares otherwise issuable upon the exercise of a Non-Qualified
Stock Option, shares of Common Stock in payment of the Purchase
Price of any Non-Qualified Stock Option granted hereunder in
accordance with Section 6.4, the Committee shall have the
authority to grant or provide for the automatic grant of a
Restoration Option to such Participant. The grant of a Restoration
Option shall be subject to the satisfaction of such conditions or
criteria as the Committee in its sole discretion shall establish
from time to time. A Restoration Option shall entitle the holder
thereof to purchase a number of shares of Common Stock equal to the
number of such shares so delivered or withheld upon exercise of the
original Option and, in the discretion of the Committee, the number
of shares, if any, delivered or withheld to the Company to satisfy
any withholding tax liability arising in connection with the
exercise of the original Option. A Restoration Option shall have a
per share Purchase Price of not less than 100% of the per share
Fair Market Value of the Common Stock on the date of grant of such
Restoration Option, a term not longer than the remaining term of
the original Option at the time of exercise thereof, and such other
terms and conditions as the Committee in its sole discretion shall
determine.
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6.2. Stock Appreciation Rights.
(a) Stock Appreciation Right Awards. The
Committee is authorized to grant to any Participant one or more
Stock Appreciation Rights. Such Stock Appreciation Rights may be
granted either independent of or in tandem with Options granted to
the same Participant. Stock Appreciation Rights granted in tandem
with Options may be granted simultaneously with, or, in the case of
Non-Qualified Stock Options, subsequent to, the grant to such
Participant of the related Option; provided, however, that:
(i) any Option covering any share of Common Stock shall expire
and not be exercisable upon the exercise of any Stock Appreciation
Right with respect to the same share, (ii) any Stock
Appreciation Right covering any share of Common Stock shall expire
and not be exercisable upon the exercise of any related Option with
respect to the same share, and (iii) an Option and Stock
Appreciation Right covering the same share of Common Stock may not
be exercised simultaneously. Upon exercise of a Stock Appreciation
Right with respect to a share of Common Stock, the Participant
shall be entitled to receive an amount equal to the excess, if any,
of (A) the Fair Market Value of a share of Common Stock on the
date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount
shall be payable as provided in Section 6.2(c).
(b) Exercise Price. The Exercise Price
established under any Stock Appreciation Right granted under this
Plan shall be determined by the Committee, but in the case of Stock
Appreciation Rights granted in tandem with Options shall not be
less than the Purchase Price of the related Option. Upon exercise
of Stock Appreciation Rights granted in tandem with Options, the
number of shares subject to exercise under any related Option shall
automatically be reduced by the number of shares of Common Stock
represented by the Option or portion thereof which are surrendered
as a result of the exercise of such Stock Appreciation
Rights.
(c) Payment of Incremental Value. Any payment
which may become due from the Company by reason of a
Participant’s exercise of a Stock Appreciation Right may be
paid to the Participant as determined by the Committee (i) all
in cash, (ii) all in Common Stock, or (iii) in any
combination of cash and Common Stock. In the event that all or a
portion of the payment is made in Common Stock, the number of
shares of Common
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Stock delivered
in satisfaction of such payment shall be determined by dividing the
amount of such payment or portion thereof by the Fair Market Value
on the Exercise Date. No fractional share of Common Stock shall be
issued to make any payment in respect of Stock Appreciation
Rights
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