Exhibit 10.12

PAY PHILOSOPHY AND GUIDING PRINCIPLES

COVERING EXECUTIVE COMPENSATION AT

RTI INTERNATIONAL METALS, INC.

(As Amended by the Compensation Committee on July 28, 2011)

SCOPE

The pay philosophy and guiding principles described herein are applicable to the
RTI International Metals, Inc. elected executive officer positions listed below,
non-officer executives designated by the Chief Executive Officer and reviewed
annually with the Compensation Committee, as well as any other positions so
designated by the Board of Directors:

OFFICER-DIRECTORS

Vice Chair, President and Chief Executive Officer

OFFICERS

Executive Vice President(s)

Senior Vice President(s)

Vice President(s)

OVERALL PHILOSOPHY

RTI’s officer compensation programs are designed to:

 

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promote achievement of the company’s business objectives and reinforce its
strategies

 

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align the interests of the company’s officers with those of RTI’s shareholders

 

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provide pay that is externally competitive and internally equitable, that
rewards accomplishment to the extent identifiable and measurable and that
delivers significant rewards for exceptional performance without creating
incentive for the assumption of unnecessary or excessive risk.

 

•  

promote retention of performing officers and non-officer executives.

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GUIDING PRINCIPLES

 

I. Pay Program Characteristics. The Company’s compensation programs will be
managed to help communicate desired results and promote decisions and actions
that produce these results. The programs will be characterized by:

 

  A. Variability. A large portion of total compensation will be based on company
performance, recognizing the highly cyclical nature of the business and the need
to maintain conservative compensation levels during business downturns. While
salaries will generally be maintained at competitive levels, the major
opportunities for significant upward shifts in total compensation will be
provided from short- and long-term incentive programs.

 

  B. Clarity. Performance objectives for short- and long-term incentive
programs, whether quantitative or qualitative, will be clearly articulated.
Normally the objectives will be predetermined and the related performance
evaluations will be straightforward—- with little need for after-the-fact
discretionary judgment. However, the opportunity to apply such judgment, when
deemed necessary by the Board, will be provided.

 

  C. Communicability. Officers and designated non-officer executives will be
aware of and fully understand their earnings potential for a given year and what
specific actions and results are necessary to achieve that potential. Specific
areas of communication will be:

 

  1. The factors considered in determining salary levels and increases.

 

  2. Annual incentive target objectives and results.

 

  3. Annual target levels for restricted stock vesting, performance measures and
results.

 

  D. Strategic Emphasis. The development and administration of compensation
programs will include recognition of the roles of various elements of pay in
attracting, retaining and motivating employees, the aspects of performance that
each element is best suited to reward and the needs of the company and its
officers that may warrant emphasis on specific elements of pay. The Company’s
compensation programs will emphasize variable components over guaranteed fixed
components.

 

  E.

Risk Management. The Company’s compensation programs will provide appropriate
rewards for prudent risk taking, and will not create incentive for the

 

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  assumption of unnecessary and/or excessive risks that would threaten the
reputation or sustainability of the Company.

 

II. Pay Positioning and Delivery. Overall, total direct compensation (salary,
bonus and long-term incentives) for RTI’s officer and executive groups should
provide remuneration that approximates the comparator group (as described in
Section III) median when all aspects of performance are at target levels, and at
or above the comparator group median when performance levels significantly
exceed the target.

 

  A. Salary Administration

 

  1.

Salary Structure. The midpoint of the salary range for each position will be
maintained near the median of that for similar positions at appropriate
comparator companies (as described in Section III), with the maximum near the
75th percentile of the comparator group. Midpoints will also be monitored to
ensure that each reflects the relative value of the position compared with other
RTI officer and executive positions.

 

  2. Salary. The major role of salary in rewarding performance and
accomplishment is the recognition of consistent excellent performance over a
number of years. Merit budgets, as well as individual promotional increases,
will reflect such factors as general economic conditions, RTI’s performance and
the availability of funds. An individual’s salary may fall anywhere in the
range, up to and including the maximum.

 

  3. However, individual salary increase levels will reflect a variety of
factors, including relevant experience, time in position and individual
performance as measured in an annual performance review.

 

  B. Incentive Compensation

 

  1. Annual Incentive Compensation. The major role of annual incentive, or
bonus, payments is to motivate employees through the recognition of attainment
of specific key objectives and/or other strategic milestones or operational
goals. Awards are paid under RTI’s annual incentive compensation program (i.e.,
annual bonuses). Award opportunity guidelines for participants will be
maintained near the median of that for similar positions at appropriate
comparator companies (as described in Section III).

The Board of Directors will approve a financial plan at the first meeting of the
year which will serve as the basis upon which the awards are to be paid.

 

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The Board may also establish individual performance objectives for the year, as
developed by management or by the Board itself, which are relevant to the
performance of the Company.

No award will be paid to a participant whose individual performance is judged to
be unacceptable regardless of the level of corporate performance. Likewise, the
Board may pay one or more awards to recognize exceptional individual performance
regardless of the level of corporate performance.

 

  2. Long-Term Incentive Compensation. Opportunities for payouts will be
designed specifically to reward increases in shareholder wealth, as measured by
the price of RTI’s common stock and dividend levels, if any, improvement in the
financial performance of the Company or to achieve significant internal
accomplishments or milestones.

 

  (A) Grant Levels. Long-term incentive award guidelines are developed such that
the total fair value of all long-term incentive awards combined, at target
performance, approximate the median of the comparator companies. The target
grant levels are intended as rough guidance and the actual grant will be left to
the discretion of the Compensation Committee.

 

  (B) Grant Types and Valuation. Long-term incentive grants may be made in a
combination of stock and stock options. Stock may be restricted shares,
performance shares, phantom stock or non-restricted shares. Stock options may be
non-qualified or incentive stock options and the exercise price will equal the
fair market value (closing or average high/low) of RTI stock on the date of
grant.

The total long-term incentive opportunity will be allocated between the award
vehicles (stock options, restricted stock and performance based shares )The
target allocation is intended as rough guidance and the actual allocation will
be left to the discretion of the Compensation Committee. Projected grant
valuations may be based on any generally accepted methodology, including
mathematical models, including the exercise of judgment.

 

  (C) Grant Frequency. Unless otherwise determined by the Compensation
Committee, grants of stock and stock options will be made annually.

 

  (D) Vesting Considerations.

 

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  (1) Time-Vesting Restricted Stock. Unless otherwise determined by the plan
administrator, each grant of restricted stock will be released from restrictions
at a minimum rate of 20 percent a year beginning the year following the grant
year.

 

  (2) Stock Options. Unless otherwise determined by the Stock Plan Committee,
stock options will vest in equal installments over a three-year period beginning
one year following the date of grant.

 

  (3) Performance-Based Awards. The Committee, in its discretion, may grant
stock or stock option awards with vesting conditions based on the achievement of
performance conditions as established by the Committee.

 

III. Comparative Data.

 

  A. Data Selection Factors. Generally, because of the dearth of U. S. companies
that compete directly with RTI and because managerial talent can be found in
organizations other than directly competing companies, the compensation data
selected for use in company and/or individual position comparisons will include
information on a broad group of U. S. industrial companies similar to RTI. The
primary determinant of similarity will be sales volume; however, when available,
other measures of “size”, such as assets, total capital, total market value, and
number of employees, will also be included. When appropriate and available, data
specific to the metals industry or a specific position will be used.

 

  B. Sources of Comparative Data. Compensation data used in comparisons will be
obtained from nationally recognized compensation consulting firms, such as
Mercer Human Resource Consulting, Hay Group, Hewitt Associates, Towers Watson,
or such other sources as are approved by the Compensation Committee or the
Chairman of the Board of Directors.

 

  C. In addition to the survey data, compensation data may be collected from the
proxy statements for a peer group of companies as approved by the Committee.
This information will be used as a secondary data source in evaluating the
compensation arrangements of the Company’s officers and executives. The peer
group shall consist of companies appropriate in size and industry and may be a
competitor from a business or talent standpoint. The peer group may change from
time to time to align with the above criteria.

 

IV. Benefits. The objective in providing benefits for RTI’s officers and
executives will be to deliver adequate benefits in the most effective way
possible.

 

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V. Perquisites. Perquisites, which will not be emphasized, should serve a
business purpose and will be reviewed in their entirety by the Board of
Directors from time to time.

 

VI. Stock Ownership Guidelines. Each officer will be expected to maintain a
meaningful equity position in the company’s stock. The Compensation Committee
may establish target ownership levels for officers from time to time. If the
Committee in its judgment determines that an executive has not complied with its
ownership expectations, it may use its discretion to reduce or eliminate future
long-term incentive grants for the executive.

 

VII. Capital Accumulation/Estate Planning. In designing and administering
compensation programs, consideration will be given to provisions that
accommodate the capital accumulation and estate planning objectives of officers.

 

VIII. Tax/Legal/Accounting Factors. The restrictions imposed by taxing
authorities, laws and required accounting treatments will be considered in the
design and administration of compensation programs. These will be balanced by
the desirability of preserving, to the degree possible, the Board’s
decision-making flexibility.

 

IX. Decision-Making Authority. The Board of Directors (either directly or by
delegated authority) will monitor and review officer and designated non-officer
executive compensation programs, in aggregate, to ensure consistency with the
overall compensation philosophy and guiding principles. The Board, upon the
recommendation of the Compensation Committee, will approve the salaries of the
individuals holding the positions described herein as elected executive officers
and will have authority, with respect to incentives and benefits, as is
described in the relevant plan or program.

 

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