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EXHIBIT 10.2
ALLEGHENY TECHNOLOGIES INCORPORATED
2000 INCENTIVE PLAN
ADMINISTRATIVE RULES FOR THE
TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM
EFFECTIVE AS OF JANUARY 1, 2001
(AS AMENDED EFFECTIVE AS OF JANUARY 1, 2004)
ARTICLE I. ADOPTION AND PURPOSE OF THE
PROGRAM
1.01 ADOPTION. These rules are adopted by the Personnel and
Compensation Committee and the Stock Incentive Award Subcommittee
of the
Board of
Directors as a part of the Allegheny Technologies Incorporated
2000
Incentive Plan (the "Plan") pursuant to the authority reserved
in
Section
3.01 of the Plan. The Total Shareholder Return Incentive
Compensation Program (the "TSRP") shall be the guidelines for
making
certain
Performance Awards or Other Stock-Based Awards under Article
VIII
of the
Plan. Capitalized terms used but not defined in these rules
shall
have the
same meanings as in the Plan.
1.02 PURPOSE. The purposes of the TSRP are (i) 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, (ii) to reward key management employees for the
overall
success of the Corporation as determined by the value created
for
shareholders as measured by the percentile performance of
Corporation
Common
Stock relative to a peer group and (iii) to provide a means of
encouraging key management employees to acquire and hold shares
of
Corporation Common Stock. The TSRP encourages key management
employees to
acquire
and hold shares of Corporation Common Stock by offering them an
opportunity to receive shares of Common Stock which, in accordance
with
the terms
and conditions set forth below, will be earned only if the sum
of the
price and yield of the Common Stock measured against the sums
of
prices and
yields of shares of common stock of a peer group of
corporations meets or exceeds the performance reward relationships
set at
the
beginning of an Award Period. Awards under the TSRP are 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 relative stock prices.
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ARTICLE II. DEFINITIONS
For
purposes of these rules, the capitalized terms set forth below
shall
have the
following meanings:
2.01 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 TSR
Target
Award granted to a Participant pursuant to Article VI of these
rules.
2.02 AWARD TARGETS means the percentage of a TSR Target Award
which
shall be
earned for a particular TSR Performance Period at Threshold,
Target,
Excellent and Outstanding, respectively.
2.03 BOARD means the Board of Directors of the Corporation.
2.04 BUSINESS DAY means any day on which the New York Stock
Exchange
shall be
open for trading.
2.05 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.
2.06 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
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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.
2.07 COMMITTEE means the Stock Incentive Award Committee of the
Board, in
the case of individuals who are executive officers of the
Corporation, and the Personnel and
Compensation Committee of the Board, in
the case
of individuals who are not executive officers of the
Corporation.
2.08 CORPORATION means Allegheny Technologies Incorporated, a
Delaware
corporation, and its successors.
2.09 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.
2.10 DATE OF GRANT means the date as of which a TSR Target Award
is
granted in
accordance with Article VI of these rules.
2.11 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
TSRP.
2.12 EFFECTIVE DATE means January 1, 2001.
2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
amended.
2.14 EXCELLENT means a relative level of achievement of
Performance
Reward
Criteria at which the TSR for the Corporation for a TSR
Performance
Period is
at a percentile of the TSR for the Peer Group for that
Performance Period as determined by the Committee under Section
6.02.
Excellent
shall be the next to the highest level of performance for which
a TSRP
Reward will be paid.
2.15 FAIR MARKET VALUE means, as of any given date, the average
of
the high
and low trading prices of the Common Stock on such date as
reported
on the New York Stock Exchange or, if the Common Stock is not
then
traded on the New York Stock Exchange, on such other national
securities
exchange on which the Common Stock is admitted to trade, or, if
none, on
the National Association of Securities Dealers Automated
Quotation
System if the Common Stock is admitted for quotation thereon;
provided,
however, if there were no sales reported as of such date,
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Fair
Market Value shall be computed as of the last date preceding
such
date on
which a sale was reported; provided, further, that if any such
exchange
or quotation system is closed on any day on which Fair Market
Value is
to be determined, Fair Market Value shall be determined as of
the
first date
immediately preceding such date on which such exchange or
quotation
system was open for trading.
2.16 OUTSTANDING means a relative level of Performance Reward
Criteria
at which the Corporation TSR for a particular TSR Performance
Period is
at a percentile of TSR for the Peer Group for that TSR
Performance Period as determined by the Committee under Section
6.02.
Outstanding shall be
the highest level of performance for which a TSRP
Reward
will be paid.
2.17 OUTSTANDING STOCK means, at any time, the issued and
outstanding Common Stock.
2.18 PARTICIPANT means any key management employee selected by
the
Committee,
pursuant to Section 5.01 of these rules, as eligible to
participate under the TSRP for any one or more TSR Performance
Period.
2.19 PEER GROUP means a group of corporations with publicly
traded
common
stock listed on a national securities exchange(s) deemed
comparable
to the
Corporation as the number and identity of such group is
determined
by the
Committee, in its discretion, for a particular TSR Performance
Period. In
the event of bankruptcy, delisting, merger, spin-off or other
special
circumstances affecting members of the Peer Group during a
Performance Period, the Committee shall make such adjustments in
the Peer
Group as
the Committee determines appropriate in its discretion. The
Committee
may select the number and identity of members of the Peer Group
separately
for each TSR Performance Period.
2.20 PERFORMANCE REWARD CRITERIA means the relative standing of
the
Corporation TSR, expressed in percentiles and ranked at Threshold,
Target,
Excellent
and Outstanding, as compared to the TSR for the Peer Group, in
each case
for a particular TSR Performance Period.
2.21 PERFORMANCE LEVEL means the level of actual achievement of
Performance Reward Criteria for a particular TSR Performance
Period. In
determining final Performance Levels, the Committee shall use
straight-line interpolation between Threshold and Target, Target
and
Excellent
and Excellent and Outstanding but there shall be no
interpolation above Outstanding or below Threshold.
2.22 PLAN means the Allegheny Technologies Incorporated 2000
Incentive
Plan, as the same may be amended from time to time.
2.23 RETIREMENT means a termination of employment with the
Corporation and each subsidiary of the Corporation, with the
consent of
the
Corporation, at or after (i) attaining age 55 and (ii) completing
five
years of
employment with the Corporation and/or any subsidiary of the
Corporation.
2.24 TARGET means a relative level of Performance Reward Criteria
at
which the
Corporation TSR for a particular TSR Performance Period is at a
percentile
of TSR for the Peer Group for that TSR Performance Period as
determined
by the Committee under Section 6.02.
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2.25 THRESHOLD means a relative level of Performance Reward
Criteria
at which
the Corporation TSR for a particular TSR Performance Period is
at
a
percentile of TSR for the Peer Group for that TSR Performance
Period as
determined
by the Committee under Section 6.02. Threshold shall be the
lowest
level of Performance Reward Criteria for which a Plan Reward
will
be
earned.
2.26 TSR is the percentile ranking of the sum of stock price
appreciation of and dividend reinvestment with respect to a share
of
Corporation Stock as compared to the comparable amount among the
Peer
Group for
a particular TSR Performance Period as calculated on the Fair
Market
Value of a share of Stock as of the end of the TSR Performance
Period
plus dividends paid on a share of stock during the TSR
Performance
Period
divided by the Fair Market Value of a share of Stock at the
beginning
of the TSR Performance Period using the methodology described
in
item
402(l) of Regulation S-K as promulgated under the Securities Act,
as
such act
or regulation may be amended from time to time, or any
successor
to
either.
2.27 TSRP means the Total Shareholder Return Incentive
Compensation
Program as
set forth in these rules as the same may be amended from time
to
time.
2.28 TSR PERFORMANCE PERIOD means a three calendar year period
beginning
on the January 1st designated by the Committee and continuing
until the
third December 31st thereafter.
2.29 TSR REWARDS means the number of shares of Stock earned for
a
particular
TSR Performance period after application of the Performance
Level.
2.30 TSR TARGET AWARD means an award of an opportunity to earn
a
number of
shares of Stock in a TSR Performance Period. The number of
shares for
a particular Participant shall be determined by the Committee
for each
TSR Performance Period by dividing the Participant's base
salary
at the
commencement of the TSR Performance Period or, for the
2004-2006
performance period, at the base salary set on or before the date
the
Target
Award is made, by the average Fair Market Value for the 30
Business
Days
preceding the first Business Day of that TSR Performance Period
and
multiplying the result by a decimal determined appropriate by
the
Committee
based on the Participant's responsibilities and opportunity to
contribute
to the success of the Corporation.
2.31 STOCK means Common Stock, par value $0.10 per share, of
the
Corporation.
2.32 WITHHOLDING OBLIGATIONS means the amount of federal, state
and
local
income and payroll taxes the Corporation determines in good
faith
must be
withheld with respect to a TSR Rewards. Withholding Obligations
may be
settled by the Participant, as permitted by the Committee in
its
discretion, in shares of Stock otherwise deliverable under the
TRSP, cash,
previously
owned shares of Stock or any combination of the foregoing.
ARTICLE III. ADMINISTRATION
In addition to any power reserved to the Committee under Article
III
of the
Plan, the TSRP shall be administered by the Committee, which
shall
have
exclusive and final authority and discretion in each
determination,
interpretation or other action affecting the TSRP and its
Participants,
and the
Committee shall have the sole and absolute authority and
discretion
to
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interpret
the TSRP, to modify these administrative rules for the TSRP, to
select, in
accordance with Section 5.01 of these rules, the persons who
will be
Participants hereunder, to determine all performance criteria,
levels of
awards and rewards payable, to impose such conditions and
restrictions as it determines appropriate and to take such other
actions
and make
such other determinations in connection with the TSRP as it may
deem
necessary or advisable, in all cases in accordance with, and
subject
to, the
provisions of the charter of the Committee.
ARTICLE IV. STOCK ISSUABLE UNDER THE TSRP
4.01 NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments
as
provided
in Section 11.07 of the Plan, the maximum number of shares of
Stock
available for issuance under the TSRP shall be 3,000,000. The
Stock
to be offered under the TSRP
shall be authorized and unissued Stock, or
Stock
which shall have been reacquired by the Corporation and held in
its
treasury.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock
forfeited
as provided in Section 6.03 of
these rules may again be issued under the
TSRP.
ARTICLE V. PARTICIPATION
5.01 DESIGNATION OF PARTICIPANTS. Participants in the TSRP shall
be
such key
management employees of the Corporation or of its subsidiaries
as
the
Committee, in its sole discretion, may designate as eligible to
participate in the TSRP for any one or more TSR Performance
Periods. No
later than
90 days after the commencement of each TSR Performance Period
during the
term of the TSRP, the Committee shall designate the
Participants who are eligible to participate in the TSRP during
such TSR
Performance Period. The Committee's designation of a Participant
with
respect to
any TSR Performance Period shall not require the Committee to
designate
such person as a Participant with respect to any other TSR
Performance Period. The Committee shall consider such factors as it
deems
pertinent
in selecting Participants. The Committee shall promptly provide
to each
person selected as a Participant written notice of such
selection.
ARTICLE VI. GRANTS UNDER THE TSRP
6.01 ANNUAL DETERMINATION REGARDING TSR PERFORMANCE PERIOD. No
