Exhibit 10.2
RTI International Metals, Inc.
Executive Change in Control Severance Policy
A. Applicability
     The following executive officers (the “Executives” and each an “Executive”)
of RTI International Metals, Inc. (the “Company”) who are appointed after the
date of adoption, as set forth below, are entitled to participate in this Change
in Control Severance Policy (the “CIC Severance Policy”), as may be amended from
time to time, together with any other executive officer who is informed in
writing by the Company of participation:
     Vice Chairman and Chief Executive Officer (“CEO”); President and Chief
Operating Officer (“COO”); Senior Vice-President and Chief Financial Officer
(“CFO”); Executive Vice-President (“EVP”); and Vice-President and General
Counsel (“GC”).
     If an Executive is entitled to payments and/or benefits under this CIC
Severance Policy following Executive’s termination of employment, then this CIC
Severance Policy shall control and the Executive shall not receive the payments
and benefits provided under the Company’s Executive Non-Change in Control
Severance Policy.
B. Definitions
     (1) “Cause” shall mean termination upon (i) any material breach by
Executive of their Letter Agreement, (ii) the Executive’s gross misconduct,
(iii) the Executive’s gross neglect of their duties with the Company,
insubordination or failure to follow the lawful directives of the Board of
Directors of the Company, in each case after a demand for substantial
performance is delivered to the Executive that identifies the manner in which
the Company believes that the Executive has not acted in accordance with
requirements and the Executive has failed to resume substantial performance of
their duties within fourteen (14) days of receiving such demand, (iv) the
Executive’s commission, indictment, conviction, guilty plea, or plea of nolo
contendre to or of any felony, a misdemeanor which substantially impairs the
Executive’s ability to perform his or her duties with the Company, act of moral
turpitude, or intentional or willful securities law violation, including
Sarbanes-Oxley law violations, (v) the Executive’s act of theft or dishonesty
which is injurious to the Company, or (vi) the Executive’s violation of any
Company policy, including any substance abuse policy.
     (2) For purposes of this CIC Severance Policy, a “Change in Control” of the
Company shall be deemed to have occurred if
     (A) Any person (within the meaning of that term as used in Sections 13(d)
and 14(d) of the Exchange Act (a “Person”) is or becomes the “beneficial owner”
(as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing thirty percent (30%) or more of the
combined voting power of the Company’s then outstanding voting securities;
provided, however, that for purposes of this CIC Severance Policy the term
“Person” shall not include (i) the Company or any of its majority-owned
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company, or

 

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     (B) The following individuals cease for any reason to constitute a majority
of the number of directors then serving on the Board of Directors of the
Company; individuals who, on the date hereof are serving as directors on the
Board and any new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of directors
of the Company) whose appointment or election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/ 3 ) of the directors then still in office who either were
directors on the date hereof or whose appointment, election or nomination for
election was previously so approved, or
     (C) There is consummated a merger or consolidation of the Company or a
subsidiary thereof with any other corporation, other than a merger or
consolidation which would result in the holders of the voting securities of the
Company outstanding immediately prior thereto holding securities which represent
immediately after such merger or consolidation at least 60% of the combined
voting power of the voting securities of the entity surviving the merger or
consolidation, (or the parent of such surviving entity) or the shareholders of
the Company approve a plan of complete liquidation of the Company, or there is
consummated the sale or other disposition of all or substantially all of the
Company’s assets.
     (3) “Exchange Act” shall mean the Securities Exchange Act of 1934.
     (4) “Good Reason” shall mean, without the Executive’s express written
consent, the occurrence after a Change in Control of the Company of any one or
more of the following:
     (A) The assignment to Executive of duties inconsistent with the Executive’s
position immediately prior to the Change in Control;
     (B) A material reduction or alteration in the nature of Executive’s
position, duties, status or responsibilities from those in effect immediately
prior to the Change in Control;
     (C) The failure by the Company to continue in effect any of the Company’s
employee benefit plans, programs, policies, practices or arrangements in which
Executive participates (or substantially equivalent successor or replacement
employee benefit plans, programs, policies, practices or arrangements) or the
failure by the Company to continue Executive’s participation therein on
substantially the same basis, both in terms of the amount of benefits provided
and the level of Executive’s participation relative to other participants, as
existed immediately prior to the Change in Control;
     (D) The failure of the Company to obtain a satisfactory agreement from any
successor to the Company to assume and agree to perform Executive’s Letter
Agreement;
     (E) Any purported termination by the Company of Executive’s employment that
is not effected pursuant to the termination requirements as may be set forth in
Executive’s Letter Agreement; and
     (F) The Company’s requiring Executive to be based at a location in excess
of fifty (50) miles from the location where Executive is based immediately prior
to the Change in Control.
     (5) “Letter Agreement” shall mean the Executive’s employment letter
agreement with the Company.

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     (6) “Payment Multiple” shall mean:
     2.5, in the case of the CEO;
     2.0, in the case of the COO, CFO, EVP and GC;
     (7) “Payment Period” shall mean a number of months equal to the Payment
Multiple times 12, which for purposes of measurement shall commence upon the
Executive’s separation from service.
C. Benefits
     Following a Change in Control of the Company, upon termination of an
Executive’s employment within 24 months following the Change in Control
Executive shall be entitled to the following benefits:
     (1) If Executive’s employment shall be terminated by the Company for Cause
or by Executive other than for Good Reason, no benefits shall be payable
pursuant to this CIC Severance Policy, and the Company shall pay Executive the
benefits provided within his or her Letter Agreement.
     (2) If Executive’s employment terminates by reason of Executive’s death or
disability, no benefits shall be payable pursuant to this CIC Severance Policy,
and the Executive shall be entitled to the benefits provided within his or her
Letter Agreement and the Company’s retirement, survivor’s benefits, insurance
and other applicable programs and plans, then in effect.
     (3) If Executive’s employment by the Company is terminated (i) by the
Company other than for Cause, Executive’s death or disability, or (ii) by
Executive for Good Reason, Executive shall be entitled to the benefits provided
in subparagraphs (i) through (v) below, which shall be in lieu of and cancel any
further rights Executive has to receive any Base Salary that would be otherwise
due under his or her Letter Agreement:
     (i) The Company will pay as severance benefits, a severance payment (the
“Severance Payment”) equal to the product of the Payment Multiple times the sum
of (x) Executive’s annual Base Salary in effect immediately prior to the
occurrence of the circumstances giving rise to such termination, and (y) the
amount equal to Executive’s Annual Bonus. For purposes of the preceding
sentence, Annual Bonus means the product of (x) the greater of (aa) Executive’s
average actual Bonus Percent for the three years immediately preceding the date
of termination, or shorter period if Executive was employed for less than three
years, and (bb) Executive’s target Bonus Percent at the time of termination, and
(y) Executive’s Base Salary. For purposes of calculating Annual Bonus under the
preceding sentence, Bonus Percent means the actual or target bonus amount paid
or payable to Executive with respect to a particular year or years divided by
the Base Salary paid or payable to Executive for such year or years. The
Severance Payment shall be payable on the first day following the six month
anniversary of Executive’s separation from service; provided, however, the
Severance Payment must be repaid in full to the Company in the event that the
Employee violates his or her duty to maintain in strict confidence and not
disclose any confidential information, as set forth in his or her Letter
Agreement, or provides or engages in the dissemination of false and/or
defamatory information pertaining to the Company, to its shareholders or
otherwise;

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     (ii) The stock options previously issued to Executive under any option or
incentive plan of the Company to purchase shares of Common Stock of the Company
(Option Shares), as well as any previously unvested shares of restricted stock
granted to Executive, including any stock, cash or property into which any such
shares, or shares underlying the stock options, have been converted, shall
irrevocably vest upon any such termination;
     (iii) In the event that Executive becomes entitled to the Severance
Payments, if any of the Severance Payments or other portion of the Total
Payments (as defined below) will be subject to the tax (the “Excise Tax”)
imposed by Section 4999 of the Internal Revenue Code (the “Code”), the Company
shall pay to Executive at the time specified below, an additional amount (the
“Gross-Up Payment”) such that the net amount retained by Executive, after
deduction of (1) any Excise Tax on the Severance Payments and such other Total
Payments, and (2) any federal, state and local income tax, FICA-Health Insurance
tax, and Excise Tax upon the payment provided for by this paragraph, shall be
equal to the Severance Payments and such other Total Payments. Notwithstanding
the foregoing provisions of this subparagraph, if it shall be determined that
Executive is entitled to a Gross-Up Payment, but that the Severance Payments and
Total Payments would not be subject to the Excise Tax if such payments were
reduced by an amount that is less than 20% of the portion of the payments that
would be treated as “parachute payments” under Section 280G of the Code, then
the amounts payable to Executive under this Policy shall be reduced (but not
below zero) to the maximum amount that could be paid to Executive without giving
rise to the Excise Tax (the “Safe Harbor Cap”), and no Gross-Up Payment shall be
made to Executive. The determination of which amounts payable hereunder will be
reduced, if applicable, may be elected by Executive. For purposes of determining
whether any of the payments will be subject to the Excise Tax and the amount of
such Excise Tax, (1) any other payments or benefits received or to be received
by Executive in connection with a Change in Control of the Company or
Executive’s termination of employment whether pursuant to the terms of this
Policy or any other plan, arrangement or agreement with the Company, any person
whose actions result in a Change of Control of the Company or any person
affiliated with the Company or such person (together with the Severance Payment,
the “Total Payments”) shall be treated as “parachute payments” within the
meaning of Section 280G(b)(2) of the Code, and all “excess parachute payments”
within the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, except to the extent that in the opinion of tax counsel selected by
the Company’s independent auditors and acceptable by Executive such other
payments or benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the meaning
of Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (2) the amount of the Total Payments which shall be treated as subject to
the Excise Tax shall be equal to the lesser of (A) the total amount of the Total
Payments or (B) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) (after applying clause (1), above), and (3) the value of any
non-cash benefits or any deferred payment or benefit shall be determined by the
Company’s independent auditors in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code. For purposes of determining the amount
of the Gross-Up Payment, Executive shall be deemed to pay federal income taxes
at the highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and

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local income taxes at the highest marginal rate of taxation in the state and
locality of Executive’s residence on the date of termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the time
of termination of Executive’s employment, Executive shall repay to the Company
at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to such reduction
(plus the portion of the Gross-Up Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the Gross-Up Payment being
repaid by Executive if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest on the
amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of Executive’s employment
(including by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make an
additional Gross-Up Payment in respect of such excess (plus any interest payable
with respect to such excess) at the time that the amount of such excess is
finally determined.
The payment provided for in the paragraph above shall be made on the first day
following the six month anniversary of Executive’s date of termination;
provided, however, that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to Executive on such day
an estimate as determined in good faith by the Company of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as promptly
as practicable following calculation thereof, but in no event more than 30 days
following the initial estimate. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, Executive
shall repay such excess to the Company on the fifth day after calculation of the
correct amount and notice by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code;
     (iv) During the Payment Period, the Company will arrange to provide
Executive at the Company’s expense with life, disability, accident and health
insurance benefits substantially similar to those which Executive was receiving
immediately prior to the termination of employment; but benefits otherwise
receivable by Executive pursuant to this paragraph shall be reduced to the
extent comparable benefits are actually received by Executive during the Payment
Period following his or her termination, and any such benefits actually received
by Executive shall be reported to the Company for purposes of offset. To the
extent any such benefits cannot be provided on a non-taxable basis to Executive
and the provision thereof would cause any part of the benefits to be subject to
additional taxes and interest under Section 409A of the Code, then the provision
of such benefits shall be deferred to the earliest date upon which such benefits
can be provided without being subject to such additional taxes and interest; and
     (v) The Company shall pay Executive an additional amount equal to the
excess of (x) minus (y), where (x) equals the sum of the pension, surviving
spouse and/or survivor benefits on Executive’s behalf under the RTI Pension Plan
and the RTI Supplemental Pension Program if such benefits were calculated using
(i) Executive’s actual age at termination plus the number of months in the
Payment Period, (ii) Executive’s actual continuous service for benefit accrual

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purposes at termination plus the number of months in the Payment Period, (iii)
the interest and mortality table specified by the plans for calculating lump sum
distributions as of the date of Executive’s termination of employment, (iv) the
actuarial factors and assumptions that are in effect under the plans, using
Executive’s age at termination of employment and (y) equals the sum of pension,
surviving spouse’s benefits and/or survivor benefits which are actually payable
on Executive’s behalf under the RTI Pension Plan and the RTI Supplemental
Pension Program as of Executive’s termination of employment. For purposes of
determining the amounts in (x) and (y) above, benefits will be based upon the
amount of immediate pension payable in the form of a lump sum distribution under
the terms of the applicable plan. The additional amount payable to Executive
hereunder shall be payable in the form of a lump sum distribution on the first
day following the six month anniversary of Executive’s separation from service.
     (4) The Company shall also pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of such termination of employment,
including all such fees and expenses, if any, incurred in contesting or
disputing any such termination or in seeking to obtain or enforce any right or
benefit provided by this CIC Severance Policy or in connection with any tax
audit or proceeding to the extent attributable to the application of
Section 4999 of the Code to any payment or benefit provided hereunder.
D. Amendment or Termination
     This CIC Severance Policy may be amended or terminated at any time in the
Company’s discretion; provided, however, that no such amendment or termination
made simultaneously with or following a Change in Control shall be binding upon
the Executive, or in any way adversely affect such Executive’s rights under the
CIC Severance Policy as it existed prior to such amendment or termination.
Date of Adoption: February 22, 2007

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