EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of August 26,
2003 and is entered into by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a
Delaware corporation (the "Company"), and L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ (the "Employee").
WHEREAS, the Company offered and the Employee accepted the position as
President and Chief Executive Officer of the Company ("CEO") and a member of the
Board of Directors of the Company ("Director"), such employment and positions to
begin on October 1, 2003 (the "Effective Date");
WHEREAS, the Company made a number of commitments and representations
to the Employee in order to recruit him as CEO and a Director; and
WHEREAS, acknowledging that the Employee has certain confidentiality
and non-solicitation obligations to a prior employer, the Company and the
Employee intend to document the terms and conditions of the Employee's
employment in this Agreement.
NOW, THEREFORE, the parties hereby agree as follows:
1. Employment. On the Effective Date, the Company will begin
employing the Employee and Employee hereby accepts employment from Company
beginning on the Effective Date upon the terms and conditions hereinafter set
forth.
2. Term. This Agreement and the employment of the Employee
hereunder shall commence on the Effective Date, and, except as this Agreement
and the Employee's employment hereunder are earlier terminated as provided in
Section 9, shall continue until the third anniversary of the Effective Date. The
Term shall automatically be extended for one additional month commencing on the
last business day of the first month of the Term and, if
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initially extended, on the last business day of each succeeding month (each, an
"Extension Date") so that at any given time the Term shall be no less than 35
nor more than 36 months, unless one party gives written notice to the other on
or before an Extension Date of its intention not to extend the Term. If one
party gives written notice to the other of its intention not to extend the Term,
the Term shall end on the last day of the month that is thirty five months after
the month in which such notice not to extend is received. The date upon which
the Term hereof, as extended from time to time, shall expire is hereinafter
referred to as the "Expiration Date".
3. Duties. During the Term hereof, the Employee shall serve as
President and Chief Executive Officer of the Company and shall serve as a member
of the Board of Directors of the Company (the "Board"). The Employee shall
report to the Board, shall be primarily responsible for the executive management
of the Company and shall perform such duties as are consistent with the role of
the President and Chief Executive Officer of the Company and such other duties,
not inconsistent therewith, as may be reasonably assigned by the Board. Subject
to vacation and approved absences from his duties, the Employee shall devote his
full business time and attention to the performance of his duties hereunder,
provided, with the consent of the Board, the Employee may (i) devote a
reasonable amount of time and effort to charitable, industry and community
groups and (ii) serve as a director of other companies which do not compete with
the Company. For purposes of this Agreement, no approval of the Board shall be
required for investments by the Employee in his personal portfolio except for
the acquisition or holding of 3% or more of the capital stock or partnership
interests of an entity that competes with the Company.
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4. Compensation.
(a) Base Salary. The Company shall pay Employee a base salary of
$850,000 per year or such greater amount as may from time to time be authorized
by the Board or any authorized committee thereof. The amount in effect under
this subsection 4(a) at a relevant time is hereinafter referred to as "Base
Salary". The Base Salary shall be payable in such installments and at such times
as conform to the general payroll practices of the Company.
(b) Annual Incentive Plan. Beginning January 1, 2004 and each
January 1st during the Term, Employee shall be eligible to participate in and
shall be granted an opportunity to earn incentive compensation under the
Company's Annual Incentive Plan or any other annual incentive plan as shall be
in effect for executive level salaried employees of the Company from time to
time during the Term (each, a "Bonus Plan") at a level commensurate with his
position as President and Chief Executive Officer of Company. As of the
Effective Date, the opportunity for the CEO to earn incentive compensation under
the Bonus Plan is 80% of Base Salary at the level of performance designated
"Target" by the Company. The Employee shall have input into the process by which
the Company establishes its business objective for each year during the Term and
the performance measures under the AIP. For the period from the Effective Date
to December 31, 2003, the Company shall pay the Employee a bonus in an amount
equal to $170,000 (that is, $850,000 x 80% x 0.25) in a single lump sum when AIP
payments are ordinarily paid to AIP participants.
(c) Sign On and Retention Bonuses. On the Effective Date, the
Company shall pay the Employee a Sign On Bonus in an amount that, when added to
all other
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applicable employee compensation within the meaning of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code") paid or to be paid
hereunder during 2003, causes the sum of all applicable employee compensation to
be equal to $1,000,000. On February 16, 2004, the Company shall pay the Employee
a Retention Bonus in an amount equal to the difference between $500,000 and the
amount of the Sign On Bonus paid in 2003 under the previous sentence, provided,
however, if, in the reasonable judgment of the Company, the sum of all
applicable compensation paid or to be paid to the Employee in 2004 would exceed
$1,000,000, the Company shall defer payment of such Retention Bonus until the
next succeeding year in which the sum of all applicable employee compensation
will not exceed $1,000,000.
(d) Grant of Options. On the Effective Date, the Company shall
grant to the Employee the right to purchase up to 120,000 shares of the common
stock of the Company at a price equal to the average of the high and low trading
prices on the trading day prior to the Effective Date. Such grant shall be
evidenced by a written agreement prepared by the Company that shall comply with
applicable law. In addition, the Employee shall be eligible to receive grants of
stock options from time to time as determined appropriate by the Company's Stock
Incentive Award Subcommittee.
(e) Total Shareholder Return Plan. Beginning on the Effective
Date, the Employee shall participate in and be granted an opportunity to earn
incentive compensation, paid in the form of shares of common stock of the
Company, under the Company's Total Shareholder Return Plan (the "TSRP") in
accordance with the Company's policies and the determination of the Stock
Incentive Award Subcommittee. As of the Effective Date, the target award for the
CEO under the TSRP is a number of
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shares, determined with reference to the average of the high and low trading
prices on the trading day prior to the date of grant, with a value equal to 60%
of the CEO's Base Salary.
(f) Other Equity-Based Plan. The Employee shall participate in and
be granted the opportunity to earn incentive compensation, payable in the form
of equity-based awards, under a to-be-designed and implemented equity based
compensation plan intended to provide compensation opportunities equivalent to
the compensation opportunities provided under the discontinued Stock Acquisition
and Retention Plan of the Company. The Employee shall have input into the design
of such plan but final decisions on the design of such plan shall be made by the
Personnel and Compensation Committee.
(g) Other Benefit Programs. Company shall provide, during the Term
hereof, coverage for Employee under any plan qualified within the meaning of
Section 401(a) of the Code, including the Allegheny Technologies Incorporated
Retirement Security Plan (the "Retirement Plan"), and each and all welfare
plans, as defined in Section 3(1) of the Employee Retirement Income Security Act
("ERISA"), and each other or successor benefit programs whether or not so
qualified or covered by ERISA, as applicable from time to time to its executive
level salaried employees
(h) Supplemental Employee Retirement Plan. Employee shall be
entitled to participate in the Company's Supplemental Pension Plan or any
successor plan thereto (the "SPP") as the application of the SPP to the Employee
is varied by this subsection (g). Notwithstanding any provision of the SPP, as
of the Effective Date, the Employee shall accrue one year of payments under the
SPP for each year the Employee serves as CEO up
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to a maximum of ten such years of payments, the maximum permitted under the
SPP. The Employee shall be fully vested in his SPP benefit to the extent accrued
as of any time on and after the first anniversary of the Effective Date.
(i) Time Away from the Headquarters Office. The Employee shall be
entitled to schedule time away from the Pittsburgh Headquarters Office (in
addition to time devoted to business travel) equal to two weeks per each
calendar quarter and the period from Christmas Eve Day to the first business day
of the subsequent year. For such scheduled time that exceeds the normal vacation
periods due to the Employee under the applicable Company policies, the Employee
shall be provided and shall make use of a lap-top computer and cell phone at the
cost and expense of the Company.
(j) Special Travel Arrangements. The Company shall permit, arrange
for and bear the cost and expense of the judicious and reasonable use by the
Employee of an airplane for business, personal and family travel, including as
an element of such cost and expense the federal, state and local income tax
consequences to the Employee of the use of such airplane for non-business
purposes.
(k) Perquisites. Employee shall be eligible for, and shall
participate in, such perquisites as are generally available to executive level
salaried employees of the Company from time to time.
(l) Indemnification. The Employee shall be entitled to be
indemnified, and the Company hereby does indemnify the Employee, for all
liability, damages, costs, fees and expenses from all causes of actions (whether
criminal, civil, administrative or otherwise) that arise or are alleged to arise
during the course of his employment with the Company or service on the Board to
the fullest extent permitted under the laws of the
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State of Delaware and the Company's charter. Employee shall not be
required to advance such damages, costs, fees and expenses (including
the costs and expenses of defense) but such expenses shall be paid
directly by the Company as incurred. Employer also agrees to keep
suitable Directors' and Officers' liability insurance in force
throughout the term of this Agreement sufficient to cover the
activities of Employee.
5. Confidentiality. Except (i) as directed by the Board or (ii)
as may be required, in the reasonable judgment of the Company, by legal process
or for SEC disclosure or similar requirement or (iii) in the ordinary course of
furthering the interests of the Company, the Employee will not, during or after
the Term or at any time thereafter, divulge, furnish, disclose or make
accessible to anyone for use in any way confidential or secret knowledge or
information of the Company which the Employee has acquired or became acquainted
with during or prior to the Term. The foregoing shall not apply to such secrets
and processes that are then in the public domain (provided that he was not
responsible, directly or indirectly, for such secrets or processes entering the
public domain without Company's consent).
6. Non-Competition; Non-Interference. During the Term and for one
year thereafter, Employee shall not:
(a) to the detriment of he Company, (i) interfere with
any of the Company's relationships with, or endeavor to employ or
entice away from the Company, any person who at any time on or after
the Effective Date is, was or becomes an employee of the Company or
interfere with or (ii) seek to alter the Company's relationship with,
solicit, or divert any supplier, licensee or distributor of the
Company;
(b) directly or indirectly, as an owner, partner,
venturer, employee, agent, servant or contractor, engage in or
facilitate or support others to engage in the production,
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sale or distribution of any products or services relating to any
business in which the Company or any of its subsidiaries is engaged at
the Date of Termination anywhere in the world or solicit or attempt to
solicit, directly or indirectly, business in competition with the
Company or any of its subsidiaries, any suppliers, clients or customers
with whom the Company or any of its subsidies have done or then propose
to do business; or
(c) seek or obtain employment with or provide services to
any customer or client of the Company with whom Employee interacted
during the Term.
For purposes of Sections 5, 6 or 7 hereof unless the context otherwise
requires, the term "Company" shall include divisions, subsidiaries and
controlled affiliated entities of the Company, and "businesses" of
Company shall include businesses of any of such entities.
7. Nondisparagement. For the period commencing on the Effective
Date and continuing for 24 months following the Date of Termination, Employee
will not, in any form, disparage Company, its officers or directors or otherwise
make comment adverse to Company concerning any aspect of the business or
practices, past or present, of Company.
8. Injunctive Relief. If there is a breach or threatened breach
by Employee of any of the provisions of Sections 5, 6 or 7 of this Agreement,
Employee acknowledges and agrees that the Company will have no adequate remedy
at law and monetary damages will be insufficient compensation and the Company
shall be entitled to request an injunction from a court of competent
jurisdiction restraining Employee from such breach or to provide such other
equitable remedy as the Company may request and such court may provide. Nothing
herein shall be construed as prohibiting Company from pursuing any other
remedies against Employee for such breach or threatened breach.
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9. Termination. Unless earlier terminated in accordance with the
following provisions of this Paragraph 9, the Company shall continue to employ
the Employee and the Employee shall remain employed by the Company during the
entire Term (as extended from time to time) as set forth in Paragraph 1.
Paragraph 10 hereof sets forth certain obligations of the Company in the event
that the Employee's employment hereunder is terminated. Certain capitalized
terms used in this Paragraph 9 and Paragraph 10 hereof are defined in Paragraph
9(c) below.
(a) Death or Disability. Except to the extent otherwise
expressly stated herein, including without limitation, as provided in
Paragraph 10(a) with respect to certain post-Date of Termination
payment obligations of the Company, this Agreement shall terminate
immediately as of the Date of Termination in the event of the
Employee's death or in the event that the Employee becomes Disabled.
(b) Notification of Discharge for Cause or Resignation.
In accordance with the procedures hereinafter set forth, the Company
may discharge the Employee from his employment hereunder for Cause and
the Employee may resign from his employment hereunder for Good Reason
or otherwise. Any discharge of the Employee by the Company for Cause or
resignation by the Employee for Good Reason shall be communicated by a
Notice of Termination to the Employee (in the case of discharge) or the
Company (in the case of resignation) given in accordance with Paragraph
11 of this Agreement. The Employee may resign without Good Reason by
delivering a Notice of Termination. For purposes of a voluntary
resignation without Good Reason, the Notice of Termination may take the
form of a One Year Notice. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the
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specific termination provision in this Agreement relied upon, (ii) sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Employee's employment under the
provision so indicated and (iii) if the Date of Termination is to be
other than the date of receipt of such notice, specifies the Date of
Termination (which date shall in all events be within fifteen (15) days
after the giving of such notice). No purported termination of the
Employee's employment for Cause shall be effective without a Notice of
Termination. The failure by the Employee to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of
Good Reason shall not waive any right of the Employee hereunder or
preclude the Employee from asserting such fact or circumstances in
enforcing the Employee's rights hereunder.
(c) Definitions. For purposes of this Paragraph 9 and of
Paragraph 10 hereof, the following capitalized terms shall have the
meanings set forth below:
(i) "Accrued Obligations" shall mean, as of the
Date of Termination, the sum of (A) the Employee's base salary
under Section 4(a) through the Date of Termination to the
extent not theretofore paid, (B) the amount of any bonus then
due under Section 4(b), and any incentive compensation,
deferred compensation and other cash compensation accrued by
or on behalf of the Employee as of the Date of Termination to
the extent not theretofore paid, (C) any vacation pay, expense
reimbursements and other cash entitlements accrued by the
Employee as of the Date of Termination to the extent not
theretofore paid and (D) any accrued benefits or rights
required by law under any plan, program or arrangement in
which the Employee participated at the Date of Termination.
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(ii) "Cause" shall mean (A) the willful and
continued failure of the Employee to perform substantially his
duties with the Company or one of its affiliates (other than
any such failure resulting from incapacity due to physical or
mental illness), after a written demand for substantial
performance is delivered to the Employee by the Board which
demand specifically identifies the manner in which the Board
believes that the Employee has not substantially performed his
duties, or (B) the willful engaging by the Employee in illegal
conduct or gross misconduct which is materially and
demonstrably injurious to the Company; or (C) breach of a
fiduciary duty involving personal profit to the Employee.
For purposes of this provision, no act or failure to act on the part of the
Employee shall be considered "willful" unless it is done, or omitted to be done,
by the Employee in bad faith or without reasonable belief that the Employee's
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board or based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Employee in good faith and in
the best interests of the Company. The cessation of employment of the Employee
shall not be deemed to be for Cause unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the affirmative
vote of not less than three-quarters of the entire membership of the Board at a
meeting of the Board called and held for such purpose, after reasonable notice
is provided to the Employee and the Employee is given an opportunity, together
with counsel, to be heard before the Board, finding that, in the good faith
opinion of the Board, the Employee is guilty of the conduct described in
subparagraph (A) or (B) above, and specifying the particulars thereof in detail.
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(iii) A "Change in Control" shall mean, 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 Securities
Exchange Act of 1934, as amended (the "Exchange
Act")) of beneficial ownership (within the meaning of
Rule 13d-3 promulgated under the Exchange Act) of
shares of Company stock which, when aggregated with
any other shares of Company stock owned by such
individual, entity or group, represents 20% or more
of the voting power of all shares of Company stock
then outstanding; provided, that the following shall
not constitute a Change in Control: any acquisition
by (1) the Company or any of its subsidiaries, any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries,
or (2) any corporation with respect to which,
following such acquisition, more than 20% of,
respectively, the then outstanding shares of common
stock of such corporation and the combined voting
power of the then outstanding voting securities of
such corporation entitled to vote generally in the
election of directors is then beneficially owned,
directly or indirectly, by all or substantially all
of the individuals and entities who were the
beneficial owners, respectively, of the outstanding
Company stock immediately prior to such acquisition
in substantially the same proportion as their
ownership, immediately prior to
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such acquisition, of the outstanding common stock and
company voting securities, as the case may be; or
(B) Individuals who constitute the
Board as of the date of this Agreement (the
"Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however,
that any individual becoming a director subsequent to
the date of this Agreement whose election or
nomination for election by the Company was approved
by a vote of at least a majority of the directors
then comprising the Incumbent Board or was approved
by a stockholder beneficially owning in excess of 51%
of the outstanding common stock at the date hereof
and at the date of such nomination or election
(unless such nomination or election (1) was at the
request of an unrelated third party who has taken
steps reasonably calculated to effect a Change in
Control, or (2) otherwise arose in connection with or
in anticipation of the Change in Control) shall be
considered as though such individual were a member of
the Incumbent Board; or
(C) Approval by the shareholders 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
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indirectly, more than 20% 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, as the case may be, of the corporation
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 shareholders of the
Company of (1) a complete liquidation or dissolution
of the Company or (2) a sale or other disposition of
60% or more by value of the assets of the Company
other than to a corporation with respect to which,
following such sale or disposition, more than 70% 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 is then owned
beneficially, directly or indirectly, by all or
substantially all of the individuals and entities who
were the beneficial owners, respectively, of the
outstanding common stock and company voting
securities immediately prior to such sale or
disposition in substantially the same proportion as
their ownership of the outstanding common stock and
company voting securities, as the case may be,
immediately prior to such sale or disposition; or
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(E) the happening of any of the
foregoing within ninety (90) days prior to the Date
of Termination shall be conclusively presumed to be a
Change in Control affecting the Employee.
(iv) "Date of Termination" shall mean (A) in the
event of a discharge of the Employee by the Company for Cause
or a resignation by the Employee for Good Reason or a One Year
Notice as defined in Section 9(c)(vii), the date the Employee
(in the case of discharge) or the Company (in the case of
resignation) receives a Notice of Termination, or any later
date specified in such Notice of Termination or the One Year
Notice, as the case may be, (B) in the event of a discharge of
the Employee without Cause or a resignation by the Employee
without Good Reason, the date the Employee (in the case of
discharge) or the Company (in the case of resignation)
receives notice of such termination of employment, (C) in the
event of the Employee's death, the date of the Employee's
death, and (D) in the event of termination of the Employee's
employment by reason of disability pursuant to Subsection
9(c)(vi), the date the Employee receives written notice of
such termination.
(v) "Disability" shall mean upon 30 days prior
notice in writing in the event Employee has been so
incapacitated that he has been unable to perform the services
required of him hereunder for a period of at least 150 of 180
consecutive calendar days and such inability is continuing at
the time of the giving of such notice. Company, at its sole
cost and expense, shall continue to provide and keep in force
during the period of incapacity which remains after the Date
of Termination, but not after Employee attains age 65, income
replacement, sickness
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and accident and health insurance coverages for Employee and
his dependents of the types provided by the group benefit
plans of Company for executive level employees of the Company
the in effect.
(vi) "Good Reason" shall mean any of the
following: (A) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 3 of this Agreement, or any other
action by the Company which results in a diminution in such
position, authority, duties or responsibilities or which
renders such position to be of less dignity, responsibility or
scope, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice
thereof given by the Employee; (B) any failure by the Company
to pay when due or otherwise comply with any of the provisions
of Section 4 of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Employee; (C) the
Company's requiring the Employee to be based at any office or
location other than the Company's headquarters in Pittsburgh,
Pennsylvania or the Company's requiring the Employee to travel
on Company business to a substantially greater extent than
required immediately prior to the Effective Date; (D) any
purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this
Agreement; or (E) any failure by the
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Company to cause a successor corporation to adopt this
Agreement and agree to perform the duties and obligations of
the Company hereunder.
(vii) "One Year Notice" shall mean a written
notice from the Employee to the Company indicating his
voluntary resignation and setting a Date of Termination twelve
months after the giving of such One Year Notice. If the
Employee gives a One Year Notice, his employment hereunder
shall continue until the Date of Termination set forth in the
One Year Notice.
10. Obligations of the Company Upon Termination.
(a) Discharge for Cause, Resignation without Good Reason,
Death or Disability. In the event of a discharge of the Employee for
Cause or resignation by the Employee without Good Reason or in the
event Employee gives a One Year Notice as defined in Section 9(c)(vii),
or in the event this Agreement terminates by reason of the death or
Disability of the Employee:
(i) the Company shall pay all Accrued
Obligations to the Employee, or to his heirs or estate in the
event of the Employee's death, in a lump sum in cash within
thirty (30) days after the Date of Termination; and
(ii) the Employee, or his beneficiary, heirs or
estate in the event of the Employee's death, shall be entitled
to receive all benefits accrued by him as of the Date of
Termination under the plans programs and arrangements
sponsored by the Company, whether or not qualified within the
meaning of the Code, in such manner and at such time as are
provided under the terms of such plans and arrangements; and
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(iii) all other obligations of the Company
hereunder shall cease forthwith (or upon the expiration of the
one year term in the event of a One Year Notice), except as
specifically set forth in this Agreement.
(b) Discharge without Cause or Resignation for Good
Reason Prior to a Change in Control. If the Employee is discharged
other than for Cause or disability or the Employee resigns with Good
Reason within two years of the happening of an event of Good Reason and
such discharge or resignation occurs prior to a Change in Control:
(i) the Company shall pay to the Employee in a
lump sum in cash within thirty (30) days after the Date of
Termination the aggregate of the following amounts:
(A) all Accrued Obligations; and
(B) Within thirty (30) days of the Date
of Termination, an amount, in a single cash payment, equal to
three times the sum of (i) the Employee's annual Base Salary
at the rate then in effect and (ii) the amount of AIP payable
for the year in which the Date of Termination occurs
determined as if the Company's performance for the year in
which the Date of Termination occurs is equal to the greater
of (x) actual to-date performance of the Company for the year
in which the Date of Termination occurs or (y) Target level
performance for the year in which the Date of Termination
occurs.
(ii) the Employee shall be entitled to receive
all benefits accrued by him as of the Date of Termination
under all qualified and nonqualified retirement, pension,
profit sharing and similar plans of the Company in such manner
and at such time as are provided under the terms of such
plans; and
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(iii) all stock options and other stock interests
or stock-based rights awarded to the Employee by the Company
on or before the Date of Termination shall become fully vested
and nonforfeitable as of the Date of Termination and shall
remain exercisable until the earlier of (i) the expiration
date of such option, stock interest or stock-based rights as
set forth at the time of grant, or (ii) the third anniversary
of the Date of Termination;
(iv) with respect to the TSRP and any
equity-based awards, the Company shall deliver to the Employee
any earned but not yet paid awards (in cash or shares as
denominated in the respective awards), within thirty (30) days
of the Date of Termination;
(v) the Company shall provide or arrange to
provide the Employee and his dependents with all health and life
insurance benefits at the respective levels in effect on the Date of
Termination for a period of thirty-six (36) months at a monthly cost to
the Employee no greater than the smallest monthly cost charged to any
salaried employee of the Company;
(vi) except as otherwise provided above or in
Paragraph 17 hereof, all other obligations of the Company
hereunder shall cease forthwith.
(c) Discharge Without Cause or Resignation for Good
Reason After a Change in Control. If the Employee is discharged other
than for Cause or disability or the Employee resigns for Good Reason,
within one year of the happening of Good Reason and such discharge or
resignation occurs within one year after a Change in Control:
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(i) the Company shall pay to the Employee in a
lump sum in cash within thirty (30) days after the Date of
Termination the aggregate of the following amounts:
(A) all Accrued Obligations; and
(B) Within thirty (30) days of the Date
of Termination, an amount, in a single cash payment,
equal to three times the sum of (i) the Employee's
annual Base Salary at the rate then in effect and
(ii) the amount of AIP payable for the year in which
the Date of Termination occurs determined as if the
Company's performance for the year in which the Date
of Termination occurs is equal to the greater of (x)
actual to-date performance of the Company for the
year in which the Date of termination occurs or (y)
target level performance for the year in which the
Date of Termination occurs;
(ii) the Employee shall be entitled to receive
all benefits accrued by him as of the Date of Termination
under all qualified and nonqualified retirement, pension,
profit sharing and similar plans of the Company in such manner
and at such time as are provided under the terms of such
plans; and
(iii) all stock options and other stock interests
or stock-based rights awarded to the Employee by the Company
on or before the Date of Termination shall become fully vested
and nonforfeitable as of the Date of Termination and shall
remain exercisable for at least three years following the Date
of Termination;
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(iv) with respect to the TSRP, within thirty (30)
days of the Date of Termination, the Company shall deliver to
the Employee any shares earned but not delivered under the
TSRP for a completed award period and, for uncompleted award
periods, the Company shall deliver a number of shares equal to
the number that would be paid under the TSRP if such
uncompleted periods were then completed and based on the
Company's actual to-date performance as measured by the TSRP
for the uncompleted award period;
(v) with respect to any other equity-based
awards, within thirty (30) days of the Date of Termination,
such shares or other awards shall be deemed vested and
performance achieved at target level and the Company shall
deliver such shares or the value of such awards, as provided
under the plan, to the Employee;
(vi) the Company shall provide or arrange to
provide the Employee and his dependants with all health and
life insurance benefits at the level in effect on the Date of
Termination for a period of thirty-six (36) months from the
Date of Termination at a monthly cost to the Employee equal to
the smallest cost charged to any salaried employee;
(vii) in the event the Employee is assessed an
excise tax under Section 4999 of the Code, promptly upon
notice of such assessment the Company shall either (i) pay the
Employee an amount equal to the sum of (x) the excise tax
assessed and (y) an amount necessary to pay all federal, state
and local income taxes on thee receipt of such payment with
respect to the excise tax and with respect to he amount
contemplated by this clause (y) or (ii) contest such
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assessment, provided, however, to the extent the Company's
contest of the assessment is unsuccessful, the Company shall
pay the Employee the amount described in (i) (as adjusted in
connection with the contest) plus all costs, penalties and
interest incurred by the Employee in connection with the
contest of the assessment of excise tax; and
(viii) except as otherwise provided above or in
Paragraph 17 hereof, all other obligations of the Company
hereunder shall cease forthwith.
(d) Payment Obligations Absolute. The Company's
obligation to make the payments and the arrangements provided for
herein shall be absolute and unconditional, and shall not be affected
by any circumstances, including, without limitation, any offset,
counterclaim, recoupment, defense, or other right which the Company may
have against the Employee or any other party. Each and every payment
made hereunder by the Company shall be final, and the Company shall not
seek to recover all or any part of such payment from the Employee or
from whomsoever may be entitled thereto, for any reasons whatsoever.
(e) Contractual Rights to Benefits. This Agreement
establishes and vests in the Employee a contractual right to the
benefits to which he is entitled hereunder. The Employee shall not be
obligated to seek other employment in mitigation of the amounts payable
or arrangements made under any provision of this Agreement, and the
obtaining of any such other employment shall in no event effect any
reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement.
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11. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class certified mail, return receipt requested, postage prepaid,
addressed as follows:
(a) to the Board or the Company, to:
Allegheny Technologies Incorporated
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Senior Vice-President,
Chief Legal and Administrative Officer
(b) to the Employee, to:
L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
c/o Allegheny Technologies Incorporated
▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇
Addresses may be changed by written notice sent to the other party at
the last recorded address of that party.
12. Waiver of Breach. A waiver by Company or Employee of a breach
of any provision of this Agreement by the other party shall be in writing and
shall not operate or be construed as a waiver of any subsequent breach by the
other party.
13. Dispute Resolution. Any disputes arising under this Agreement
shall be resolved by discussions between the parties and, failing such
resolution, by resort to a court of competent jurisdiction with venue in
Allegheny County, Pennsylvania.
14. Legal Fees and Expenses. Company shall promptly reimburse
Employee for the reasonable legal fees and expenses incurred by Employee in
connection with enforcing any right of Employee pursuant to and afforded by this
Agreement; provided, however, that Company
23
only will reimburse Employee for such legal fees and expenses if, in connection
with enforcing any right of Employee pursuant to and afforded by this Agreement,
either (i) a judgment has been rendered in favor of the Employee by a duly
authorized court of law; or (ii) Company and Employee have entered into a
settlement agreement providing for the payment to Employee of any or all amounts
due hereunder.
15. Entire Agreement; Governing Law. This Agreement contains the
entire agreement of the parties, superseding any prior agreement or arrangement
between the parties concerning the employment of Employee by Company, whether
written or oral, and any such agreements are null and void except that any prior
stock option agreements between the Company and the Employee shall continue to
be obligations of Company and Employee. This Agreement may be changed only by a
writing signed by the party against whom enforcement is sought. This Agreement
shall be governed by the laws of the Commonwealth of Pennsylvania, without
regard to its principles of conflicts of laws.
16. Severability. If any provision of this Agreement or the
application thereof to any circumstance shall to any extent be held invalid or
unenforceable, the remainder of this Agreement shall not be affected thereby and
shall be valid and enforceable to the fullest extent permitted by law, but only
if and to the extent such enforcement would not materially and adversely
frustrate the parties' essential objectives as expressed herein.
17. Survival of Obligations. Except as otherwise specifically set
forth in this Agreement or as otherwise prohibited by law, all rights and
obligations of Employee, except such obligations as are created by Sections 5,
6, 7, 8, 9 and 10 hereof, and all obligations of Company under this Agreement,
shall cease on, and as of, the Date of Termination.
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IN WITNESS WHEREOF, the parties have executed this agreement as of the
day first hereinabove written.
ALLEGHENY TECHNOLOGIES INCORPORATED
ATTEST: By /s/ ▇. ▇. ▇▇▇▇▇▇▇
-----------------------------------------
Title: Chairman of the Board of Directors
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
WITNESS: /s/ L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------
L. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------
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