Exhibit 10.J
CARPENTER TECHNOLOGY
CORPORATION
STOCK-BASED INCENTIVE
COMPENSATION PLAN
FOR OFFICERS AND KEY
EMPLOYEES
Adopted June 22,
1993
As Amended and Restated August 24,
2006
To be Effective June 29, 2006,
and as amended by the
First Amendment effective
June 30, 2009
CARPENTER TECHNOLOGY
CORPORATION
STOCK-BASED INCENTIVE
COMPENSATION PLAN
FOR OFFICERS AND KEY
EMPLOYEES
Section 1. Purpose of the
Plan . The purpose of the Plan is to assist the Company and
its Subsidiaries in attracting and retaining valued Employees by
offering them a greater stake in the Company’s success and a
closer identity with it, and to encourage ownership of the
Company’s stock by such Employees.
Section 2. Definitions
. As used herein, the following definitions shall apply:
2.1. “Award” means the
grant of Restricted Stock, Options or Restricted Stock Units under
the Plan.
2.2. “Award Agreement”
means the written agreement, instrument or document evidencing an
Award.
2.3. “Board” means the
Board of Directors of the Company.
2.4. “Cause” means the
Employee’s: (a) willful misconduct or gross negligence
in connection with the performance of the Employee’s duties
for the Company or any Subsidiary; (b) conviction of, or a
plea of guilty or nolo contendere to, a felony or a crime
involving fraud or moral turpitude; (c) engagement in any
business that directly or indirectly competes with the Company or
any Subsidiary; (d) disclosure of trade secrets, customer
lists or confidential information of the Company or any Subsidiary
to a competitor or unauthorized person; or (e) act or omission
that results in a violation of policy of either the Company or any
Subsidiary, as reasonably determined by the Board in its sole
discretion.
2.5. “Change in Control”
means and includes each of the following:
(a) The acquisition by any person,
entity, or group of persons (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 either (i) more than 50% of the
then-outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or,
(ii) within any 12 month period, 35% or more of the combined
voting power of the then-outstanding voting securities of the
Company entitled to vote generally in the election of directors
(the
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“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, or (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by
the Company or any affiliated company;
(b) individuals who, as of the date
hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board
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;
or
(c) the acquisition by any Person
during any 12 month period of assets from the Company that have a
total gross fair market value equal to or more than 50% of the
total gross fair market value of all of the assets of the Company
immediately prior to the acquisition or acquisitions. For this
purpose, gross fair market value means the value of the assets of
the Company, or the value of the assets being disposed of,
determined without regard to any liabilities associated with the
assets.
2.6. “Code” means the
Internal Revenue Code of 1986, as amended. A reference to any
provision of the Code shall include reference to any successor
provision of the Code.
2.7. “Committee” means
the committee designated by the Board to administer the Plan under
Section 4. With respect to Qualified Performance-Based Awards,
the Committee shall either be comprised exclusively of two or more
members of the Board who are Non-Employee Directors and
“outside directors” within the meaning of section
162(m)(4)(C) of the Code and treasury regulation 1.162-27(e)(3) or
designate a sub-committee that is so comprised.
2.8. “Common Stock”
means the Common Stock of the Company, par value $5.00 per
share.
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2.9. “Company” means
Carpenter Technology Corporation, a Delaware corporation, or any
successor corporation.
2.10. “Disability” means
a qualified physician designated by the Company has reviewed and
approved the determination that an Employee:
(a) 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
(b) is, 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, receiving income replacement benefits
for a period of not less than 3 months under an accident and health
plan covering employees of the Company or any Subsidiary; and, in
either case.
2.11. “Employee” means
an officer or other key employee of the Company or a Subsidiary
including a director who is such an employee.
2.12. “Exchange Act”
means the Securities Exchange Act of 1934, as amended. A reference
to any provision of the Exchange Act or rule promulgated under the
Exchange Act shall include reference to any successor provision or
rule.
2.13. “Extraordinary
Event” means an extraordinary Company event as determined in
accordance with generally accepted accounting
principles.
2.14. “Fair Market
Value” means on any given date, the closing price of a share
of Common Stock on the New York Stock Exchange, or, in the absence
of a closing price on such date, the closing price on the last
trading day preceding such date.
2.15. “Non-Employee
Director” means a member of the Board who is not an Employee
as defined in Rule 16b-3 promulgated by the U.S. Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended.
2.16. “Non-Qualified
Option” means an Option or portion thereof not intended to be
an “Incentive Stock Option” as defined in section 422
of the Code.
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2.17. “Option” means a
right granted under the Plan to purchase a specified number of
shares of Common Stock at a specified price. All Options available
under the Plan are Non-Qualified Options.
2.18. “Outside Director”
means a member of the Board within the meaning of section
162(m)(4)(C) of the Code and treasury regulation 1.162-27(e)(3), or
any successor thereto.
2.19. “Participant”
means any individual who receives an Award.
2.20. “Performance Goal”
means a goal the attainment of which is substantially uncertain at
the time the Award is granted that must be met by the end of a
period specified by the Committee. Performance Goals may be
measured on an absolute or relative basis. Relative performance may
be measured against an external index, such as a group of peer
companies, industry groups or a financial market index. Performance
Goals may be based upon: (a) the price of Common Stock,
(b) the market share of the Company or its Subsidiaries (or
any business unit thereof), (c) sales or revenue by the
Company or its Subsidiaries (or any business unit thereof),
(d) earnings or diluted earnings per share of Common Stock,
with or without net pension credit/expense, (e) return on
shareholder equity of the Company, (f) costs of the Company or
its Subsidiaries (or any business unit thereof), (g) cash flow
of the Company or its Subsidiaries (or any business unit thereof),
(h) return on total assets of the Company or its Subsidiaries
(or any business unit thereof) (“ROA”), (i) return
on invested capital of the Company or its Subsidiaries (or any
business unit thereof), (j) return on net assets of the
Company or its Subsidiaries (or any business unit thereof)
(“RONA”), (k) operating income of the Company or
its Subsidiaries (or any business unit thereof), with or without
net pension credit/expense, (l) net income of the Company or
its Subsidiaries (or any business unit thereof) with or without net
pension credit/expense, (m) costs of capital of the Company or
its Subsidiaries (or any business unit thereof), (n) earnings
before interest and income taxes (“EBIT”) or earnings
before interest, income taxes, depreciation and amortization
(“EBITDA”) of the Company or its Subsidiaries,
(o) economic profit of the Company or its Subsidiaries,
(p) total shareholder return, (q) economic value added or
(r) any other financial or other measurement deemed
appropriate by the Committee, as it relates to the results of
operations or other measurable progress of the Company or its
Subsidiaries (or any business unit thereof). The Committee shall
have discretion to determine the specific targets with respect to
each of these categories of Performance Goals.
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2.21. “Performance
Period” means a period of one or more consecutive fiscal
years, or portions thereof, of the Company specified by the
Committee during which the performance of the Company, any
Subsidiary or any department thereof, or any individual is measured
for the purpose of determining the extent to which a Performance
Goal is achieved. Nothing in this Plan shall prevent the Committee
from establishing a Performance Period that commences prior to the
termination of one or more other Performance Periods.
2.22. “Plan” means the
Carpenter Technology Corporation Stock-Based Incentive Compensation
Plan for Officers and Key Employees herein set forth, as amended
from time to time.
2.23. “Qualified
Performance-Based Award” means an Award or portion of an
Award that is intended to satisfy the requirements for
“qualified performance-based compensation” under
section 162(m) of the Code and the regulations issued thereunder.
The Committee shall designate any Qualified Performance-Based Award
as such at the time it is granted.
2.24. “Restricted Stock”
means Common Stock granted by the Committee under Section 6.1
of the Plan.
2.25. “Restricted Stock
Unit” means a book-entry unit with a value equal to one share
of Common Stock.
2.26. “Restriction
Period” means the period during which Restricted Stock
granted under Section 6.1 of the Plan or Restricted Stock
Units granted under Section 6.3 of the Plan are subject to
forfeiture.
2.27. “Retirement” means
the Participant’s termination of employment with the Company
with eligibility to receive a monthly retirement benefit payment in
the following month under either the General Retirement Plan for
Employees of Carpenter Technology Corporation or the Supplemental
Retirement Plan for Executives of Carpenter Technology
Corporation.
2.28. “Subsidiary” means
any corporation, partnership, joint venture or other business
entity of which 50% or more of the outstanding voting power is
beneficially owned, directly or indirectly, by the
Company.
2.29. “Year of Service”
means each 12-month period following the Participant’s
commencement of service with the Company or any of its Subsidiaries
during which the Participant has worked at least one hour for the
Company or any of its Subsidiaries.
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Section 3. Eligibility
. Any Employee may be selected by the Company to receive an
Award.
Section 4. Administration and
Implementation of Plan .
4.1. The Plan shall be administered
by the Committee. Any action of the Committee in administering the
Plan shall be final, conclusive and binding on all persons,
including the Company, its Subsidiaries, their employees,
Participants, persons claiming rights from or through Participants
and stockholders of the Company.
4.2. Subject to the provisions of
the Plan, and specifically including Section 3 hereof, the
Committee shall have full and final authority in its discretion
(a) to select the Employees who will receive Awards pursuant
to the Plan, (b) to determine the type or types of Awards to
be granted to each Participant, (c) to determine the number of
shares of Common Stock to which an Award will relate, the terms and
conditions of any Award granted under the Plan (including, but not
limited to, restrictions as to vesting, transferability or
forfeiture, exercisability or settlement of an Award and waivers or
accelerations thereof, and waivers of or modifications to
performance conditions relating to an Award, based in each case on
such considerations as the Committee shall determine) and all other
matters to be determined in connection with an Award; (d) to
determine whether, to what extent, and under what circumstances an
Award may be canceled, forfeited, or surrendered; (e) to
determine whether, and to certify that, Performance Goals to which
the settlement of an Award is subject are satisfied; (f) to
correct any defect or supply any omission or reconcile any
inconsistency in the Plan, and to adopt, amend and rescind such
rules and regulations as, in its opinion, may be advisable in the
administration of the Plan; and (g) to make all other
determinations as it may deem necessary or advisable for the
administration of the Plan.
4.3. The Committee may delegate to
the Company’s Chief Executive Officer (the
“CEO”), its authority under
Section 4.2(a)-(d) above, to grant or amend Awards
covering a pre-determined aggregate number of shares of Common
Stock. Such delegation is limited to the authority to grant and
amend Awards to Participants who are not subject to the
requirements of Rule 16b-3 of the Exchange Act. Any Awards granted
or amended by the CEO shall be subject to the terms of the Plan.
The CEO shall report to the Committee, in a form and manner to be
determined by the Committee, at least annually on the disposition
of shares subject to Awards granted or amended by the
CEO.
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Section 5. Shares of Common
Stock Subject to the Plan .
5.1. Subject to adjustment as
provided in Section 9, the total number of shares of Common
Stock available for Awards under the Plan as of August 18,
2006 shall be 2,300,000 shares, increased by any shares of Common
Stock that were reserved under the Plan but were either
(a) not subject to Awards or (b) subject to Awards which
were forfeited, canceled or expired unexercised, in either case
prior to this amendment and restatement. Common Stock granted under
the Plan may be reserved or made available from the Company’s
authorized and unissued Common Stock or from Common Stock
reacquired and held in the Company’s treasury.
5.2. Subject to adjustment as
provided in Section 9, the maximum number of shares that may
be granted to any Employee as Awards under the Plan during any
calendar year shall not exceed 500,000 shares.
5.3. If any shares subject to an
Award are forfeited or such Award otherwise terminates or is
settled for any reason whatsoever without an actual distribution of
shares to the Participant, any shares counted against the number of
shares available for issuance pursuant to the Plan with respect to
such Award shall, to the extent of any such forfeiture, settlement,
or termination, again be available for Awards under the Plan;
provided, however, that the Committee may adopt procedures for the
counting of shares relating to any Award to ensure appropriate
counting, avoid double counting, and provide for adjustments in any
case in which the number of shares actually distributed differs
from the number of shares previously counted in connection with
such Award.
Section 6. Awards .
Awards may be granted on the terms and conditions set forth in this
Section 6. In addition, the Committee may impose on any Award
or the exercise thereof, at the date the Award is granted or
thereafter, such additional terms and conditions, not inconsistent
with the provisions of the Plan, as the Committee shall determine,
including terms requiring forfeiture of Awards in the event of the
termination of employment or other relationship with the Company or
any Subsidiary by the Participant; provided, however, that the
Committee shall retain full power to accelerate or waive any such
additional term or condition as it may have previously imposed.
Each Award shall be evidenced by an Award Agreement. The right of a
Participant to exercise or receive a grant or settlement of any
Award, and the timing thereof, may be subject to such Performance
Goals as may be specified by the Committee consistent with
Section 6.6 hereof.
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6.1. Restricted Stock
. An Award of Restricted Stock is a grant by the Company of a
specified number of shares of Common Stock to the Participant,
which shares are subject to forfeiture upon the happening of
specified events. Such an Award shall be subject to the following
terms and conditions:
(a) Upon determination of the number
of shares of Restricted Stock to be granted to the Participant, the
Committee shall direct the Company to see that its transfer agent
and registrar for the Common Stock (“Transfer Agent”)
establishes a special account representing the number of restricted
shares of Common Stock issued to the Participant. Following the
Restriction Period, the Company will instruct the Transfer Agent to
remove the restriction from such shares of Common Stock held for
the Participant in the special account and transfer these shares to
an unrestricted account in the Participant’s name.
(b) From time to time during the
Restriction Period, the Committee may, but is not required to,
authorize the payment of an amount equivalent to a dividend
declared and paid on the Company’s Common Stock to any
Participant awarded Restricted Stock. Such payment may be made in
cash currently or deemed reinvested in Restricted Stock as
determined by the Committee in its sole discretion. During the
Restriction Period the Participant shall have the right to vote the
shares of Restricted Stock.
(c) The Award Agreement shall
specify the duration of the Restriction Period and the performance,
employment or other conditions under which the Restricted Stock may
be forfeited to
