Exhibit 10.1
ALLEGHENY TECHNOLOGIES INCORPORATED
2007 INCENTIVE PLAN
FOR SELECTED OFFICERS, KEY EMPLOYEES AND
NON-EMPLOYEE DIRECTORS
Article I.
Purpose and Adoption of the Plan
1.1. Purpose. The purpose of the Allegheny Technologies Incorporated 2007
Incentive Plan (hereinafter referred to as the “Plan”) is to assist Allegheny
Technologies Incorporated and its subsidiaries (the “Company”) in attracting and
retaining highly competent employees and directors, to act as an incentive in
motivating selected officers and other key employees and non-employee directors
of the Company to achieve long-term corporate objectives and to enable cash
incentive awards to qualify as performance-based compensation for purposes of
the tax deduction limitations under Section 162(m) of the Code.
1.2. Adoption and Term. The Plan has been approved by the Board of Directors of
Allegheny Technologies Incorporated (the “Board”) on February 22, 2007 and shall
become effective on May 2, 2007 if approved by the stockholders of the Company
at its 2007 Annual Meeting of Stockholders. The Plan shall remain in effect
until the tenth anniversary of the date the stockholders of the Company approve
the Plan, unless terminated by action of the Board prior to that date, and, if
the material terms of the Performance Goals are changed from those set forth in
this Plan when initially approved by the stockholders, the provisions of
Articles VII, VIII, IX and X with respect to performance-based awards to
“covered employees” under Section 162(m) of the Code shall expire as of the
fifth anniversary of the date the stockholders of the Company approved the Plan,
unless the changed Performance Goals are approved by the stockholders of the
Company.
1.3. The Prior Plans. The Company previously adopted the Allegheny Teledyne
Incorporated 1996 Incentive Plan, the Allegheny Technologies Incorporated 2000
Incentive Plan and the Allegheny Technologies Incorporated 1996 Non-Employee
Director Stock Compensation Plan (collectively, the “Prior Plans”). Awards
granted under the Prior Plans prior to the date the stockholders of the Company
approve this Plan shall not be affected by the adoption of this Plan, and the
Prior Plans shall remain in effect following the date the stockholders of the
Company approve this Plan to the extent necessary to administer such awards, but
no new Awards shall be granted under the Prior Plans after the date the
stockholders of the Company approve this Plan.

 

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Article II.
Definitions
For the purpose of this Plan, capitalized terms shall have the following
meanings:
2.1. Award means any one or a combination of Non-Qualified Stock Options or
Incentive Stock Options described in Article VI, Stock Appreciation Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, Awards of cash or any other Award made under
the terms of the Plan.
2.2. Award Agreement means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.
2.3. Award Period means, with respect to an Award, the period of time set forth
in the Award Agreement during which specified target performance goals must be
achieved or other conditions set forth in the Award Agreement must be satisfied.
2.4. Beneficiary means an individual, trust or estate who or which, by a written
designation of the Participant filed with the Company or by operation of law,
succeeds to the rights and obligations of the Participant under the Plan and the
Award Agreement upon the Participant’s death.
2.5. Board means the Board of Directors of the Company.
2.6. Change in Control means, 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 Exchange Act) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a
number of Company Voting Securities in excess of 25% of the Company Voting
Securities unless such acquisition has been approved by the Board;     (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 the Effective Date and (ii) persons who were nominated for elections as
members of the Board at a time when two-thirds of the Board consisted of persons
who were members of the Board on the Effective Date; provided, however, that any
person nominated for election by a Board at least two-thirds of whom constituted
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);     (c)  
Approval by the stockholders 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

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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 indirectly, more than
seventy five percent (75%) 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 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 stockholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) a sale or other disposition of
all or substantially all the assets of the Company.

2.7. Code means the Internal Revenue Code of 1986, as amended. References to a
section of the Code shall include that section and any comparable section or
sections of any future legislation that amends, supplements or supersedes said
section.
2.8. Committee means the Committee defined in Section 3.1.
2.9. Company or Corporation means Allegheny Technologies Incorporated, a
Delaware corporation, and its successors.
2.10. Common Stock means Common Stock of the Company, par value $.10 per share.
2.11. Company Voting Securities means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.
2.12. Date of Grant means the date designated by the Committee as the date as of
which it grants an Award, which shall not be earlier than the date on which the
Committee approves the granting of such Award.
2.13. Effective Date shall have the meaning given to such term in Section 1.2.
2.14. Exchange Act means the Securities Exchange Act of 1934, as amended.
2.15. Exercise Price means, with respect to a Stock Appreciation Right, the
amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.2(b).
2.16. Fair Market Value means, on any date, the average of the high and low
quoted sales prices of a share of Common Stock, as reported on the Composite
Tape for New York Stock Exchange Listed Companies, on such date or, if there
were no sales on such date, on the last date preceding such date on which a sale
was reported.

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2.17. Incentive Stock Option means a stock option within the meaning of
Section 422 of the Code. Incentive Stock Options cannot be granted to directors
notwithstanding any provisions of the Plan to the contrary.
2.18. Merger means any merger, reorganization, consolidation, exchange, transfer
of assets or other transaction having similar effect involving the Company.
2.19. Non-Qualified Stock Option means a stock option which is not an Incentive
Stock Option.
2.20. Options means all Non-Qualified Stock Options and/or Incentive Stock
Options granted at any time under the Plan.
2.21. Outstanding Common Stock means, at any time, the issued and outstanding
shares of Common Stock.
2.22. Participant means a person designated to receive an Award under the Plan
in accordance with Section 5.1.
2.23. Performance Awards means Awards granted in accordance with Article VIII.
2.24. Performance Goals means operating income, operating profit, income before
taxes, earnings per share, return on investment or working capital, return on
stockholders’ equity, economic value added (the amount, if any, by which net
operating profit after tax exceeds a reference cost of capital), balanced
scorecard, cash flow, reductions in inventory, inventory turns and on-time
delivery performance, any one of which may be measured with respect to the
Company or any one or more of its Subsidiaries or business units and either in
absolute terms or as compared to another company or companies, and safety
measures and other quantifiable, objective measures of individual performance
relevant to the particular individual’s job responsibilities.
2.25. Plan means the Allegheny Technologies Incorporated 2007 Incentive Plan as
described herein, as the same may be amended from time to time.
2.26. Prior Plans shall have the meaning given to such term in Section 1.3.
2.27. Purchase Price, with respect to Options, shall have the meaning set forth
in Section 6.1(b).
2.28. [Intentionally left blank.]
2.29. Restricted Shares means Common Stock subject to restrictions imposed in
connection with Awards granted under Article VII.
2.30. Retirement means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.

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2.31. Rule 16b-3 means Rule 16b-3 promulgated by the Securities and Exchange
Commission under Section 16 of the Exchange Act, as the same may be amended from
time to time, and any successor rule.
2.32. Stock Appreciation Rights means Awards granted in accordance with
Article VI.
2.33. Subsidiary means a subsidiary of the Company within the meaning of Section
424(f) of the Code.
2.34. Termination of Employment means the voluntary or involuntary termination
of a Participant’s employment with the Company or a Subsidiary for any reason,
including death, disability, retirement or as the result of the divestiture of
the Participant’s employer or any similar transaction in which the Participant’s
employer ceases to be the Company or one of its Subsidiaries. Whether entering
military or other government service shall constitute Termination of Employment,
or whether a Termination of Employment shall occur as a result of disability,
shall be determined in each case by the Committee in its sole discretion.
Article III.
Administration
3.1. Committee. The Plan shall be administered by a committee or committees of
the Board (“Committee”) comprised solely of independent members of the Board of
Directors. The Committee shall have exclusive and final authority in each
determination, interpretation or other action affecting the Plan and its
Participants. The Committee shall have the sole discretionary authority to
interpret the Plan, to establish and modify administrative rules for the Plan,
to impose such conditions and restrictions on Awards as it determines
appropriate and to cancel Awards (including those made pursuant to other plans
of the Company), and to take such steps in connection with the Plan and Awards
granted hereunder as it may deem necessary or advisable. The Committee shall
not, however, have or exercise any discretion that would disqualify amounts
payable under Article X as performance-based compensation for purposes of
Section 162(m) of the Code. The Committee may delegate such of its powers and
authority under the Plan as it deems appropriate to designated officers or
employees of the Company. In addition, the independent members of the full Board
may exercise any of the powers and authority of the Committee under the Plan. In
the event of such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer, as
appropriate, to the delegate of the Committee or the Board. The selection of
members of the Committee or any subcommittee thereof, and any delegation by the
Committee to designated officers or employees, under this Section 3.1 shall
comply with Section 16(b) of the Exchange Act, the performance-based provisions
of Section 162(m) of the Code, and the regulations promulgated under each of
such statutory provisions, or the respective successors to such statutory
provisions or regulations, as in effect from time to time, except to the extent
that the Board determines that such compliance is not necessary or desirable.

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Article IV.
Shares
4.1. Number of Shares Issuable. The total number of shares authorized to be
issued under the Plan shall equal 2.5 million shares of the Common Stock as of
the Effective Date. The number of shares available for issuance under the Plan
shall be subject to adjustment in accordance with Section 10.7. The shares to be
offered under the Plan shall be authorized and unissued Common Stock, or issued
Common Stock which shall have been reacquired by the Company.
4.2. Shares Subject to Terminated Awards. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, Common Stock forfeited as provided in Section 7.2(a) and
Common Stock subject to any Awards which are otherwise surrendered by the
Participant may again be subject to new Awards under the Plan. Common Stock
subject to Options, or portions thereof, which have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not be available
for subsequent Awards under the Plan, but Common Stock issued in payment of such
Stock Appreciation Rights shall not be charged against the number of shares of
Common Stock available for the grant of Awards hereunder. Common Stock covered
by awards granted under the Prior Plans that after the Effective Date are
terminated unexercised, forfeited or otherwise surrendered shall be available
for subsequent Awards under this Plan. Notwithstanding anything to the contrary
contained herein: (i) shares of Common Stock tendered in payment of an Option
shall not be added to the aggregate plan limit described above; (ii) shares of
Common Stock withheld by the Company to satisfy any tax withholding obligation
shall not be added to the aggregate plan limit described above; (iii) shares of
Common Stock that are repurchased by the Company with Option proceeds shall not
be added to the aggregate plan limit described above; and (iv) all shares of
Common Stock covered by a Stock Appreciation Right, to the extent that it is
exercised and settled in shares of Common Stock, and whether or not shares of
Common Stock are actually issued to the Participant upon exercise of the Stock
Appreciation Right, shall be considered issued or transferred pursuant to the
Plan.
Article V.
Participation
5.1. Eligible Participants. Participants in the Plan shall be such officers and
other key employees of the Company and/or any one or more of its Subsidiaries as
the Committee, in its sole discretion, may designate from time to time, and
directors who are non-employee members of the Company’s Board of Directors. The
Committee’s designation of a Participant in any year shall not require the
Committee to designate such person to receive Awards or grants in any other
year. The designation of a Participant to receive awards or grants under one
portion of the Plan does not require the Committee to include such Participant
under other portions of the Plan. The Committee shall consider such factors as
it deems pertinent in selecting Participants and in determining the type and
amount of their respective Awards. Notwithstanding any provision herein to the
contrary, the Committee may grant Awards under the Plan, other than Incentive
Stock Options, to non-employees who, in the judgment of the Committee, render
significant services to the Company or any of its Subsidiaries, on such terms
and conditions as the Committee deems appropriate and consistent with the intent
of the Plan. Subject to adjustment in accordance with Section 10.7, in any
calendar year, no Participant shall be granted Awards in

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respect of more than 1 million shares of Common Stock (whether through grants of
Options or Stock Appreciation Rights or other grants of Common Stock or rights
with respect thereto) and $15 million in cash; provided, however, that any Award
payable over a period of more than one year shall be pro-rated over the
applicable period in determining the amount of the Award granted in any calendar
year.
Article VI.
Stock Options and Stock Appreciation Rights
6.1. Option Awards.

  (a)   Grant of Options. The Committee may grant, to such Participants as the
Committee may select, Options entitling the Participant to purchase shares of
Common Stock from the Company in such number, at such price, and on such terms
and subject to such conditions, not inconsistent with the terms of this Plan, as
may be established by the Committee. The terms of any Option granted under this
Plan shall be set forth in an Award Agreement.     (b)   Purchase Price of
Options. The Purchase Price of each share of Common Stock which may be purchased
upon exercise of any Option granted under the Plan shall be determined by the
Committee; provided, however, that the Purchase Price of the Common Stock
purchased pursuant to Options shall be equal to or greater than the Fair Market
Value on the Date of Grant. The Committee shall not have the authority to
decrease such price after the date of the Stock Option’s grant, except for
adjustments appropriate to reflect a change in stock or a change in
capitalization pursuant to Section 10.7.     (c)   Designation of Options.
Except as otherwise expressly provided in the Plan, the Committee may designate,
at the time of the grant of each Option, the Option as an Incentive Stock Option
or a Non-Qualified Stock Option.     (d)   Incentive Stock Option Share
Limitation. No Participant may be granted Incentive Stock Options under the Plan
(or any other plans of the Company and its Subsidiaries) which would result in
shares with an aggregate Fair Market Value (measured on the Date of Grant) of
more than $100,000 first becoming exercisable in any one calendar year.     (e)
  Rights as a Stockholder. A Participant or a transferee of an Option pursuant
to Section 10.4 shall have no rights as a stockholder with respect to Common
Stock covered by an Option until the Participant or transferee shall have become
the holder of record of any such shares, and no adjustment shall be made for
dividends in cash or other property or distributions or other rights with
respect to any such Common Stock for which the record date is prior to the date
on which the Participant or a transferee of the Option shall have become the
holder of record of any such shares covered by the Option; provided, however,
that Participants are entitled to share adjustments to reflect capital changes
under Section 10.7.

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6.2. Stock Appreciation Rights.

  (a)   Stock Appreciation Right Awards. The Committee is authorized to grant to
any Participant one or more Stock Appreciation Rights. Such Stock Appreciation
Rights may be granted either independent of or in tandem with Options granted to
the same Participant. Stock Appreciation Rights granted in tandem with Options
may be granted simultaneously with, or, in the case of Non-Qualified Stock
Options, subsequent to, the grant to such Participant of the related Option;
provided, however, that: (i) any Option covering any share of Common Stock shall
expire and not be exercisable upon the exercise of any Stock Appreciation Right
with respect to the same share, (ii) any Stock Appreciation Right covering any
share of Common Stock shall expire and not be exercisable upon the exercise of
any related Option with respect to the same share, and (iii) an Option and Stock
Appreciation Right covering the same share of Common Stock may not be exercised
simultaneously. Upon exercise of a Stock Appreciation Right with respect to a
share of Common Stock, the Participant shall be entitled to receive an amount
equal to the excess, if any, of (A) the Fair Market Value of a share of Common
Stock on the date of exercise over (B) the Exercise Price of such Stock
Appreciation Right established in the Award Agreement, which amount shall be
payable as provided in Section 6.2(c).     (b)   Exercise Price. The Exercise
Price established under any Stock Appreciation Right granted under this Plan
shall be determined by the Committee, but shall not be less than the Purchase
Price of the related Option which shall be equal to or greater than the Fair
Market Value of the underlying shares of Common Stock on the Date of Grant. Upon
exercise of Stock Appreciation Rights granted in tandem with Options, the number
of shares subject to exercise under any related Option shall automatically be
reduced by the number of             shares of Common Stock represented by the
Option or portion thereof which are surrendered as a result of the exercise of
such Stock Appreciation Rights.     (c)   Payment of Incremental Value. Any
payment which may become due from the Company by reason of a Participant’s
exercise of a Stock Appreciation Right may be paid to the Participant as
determined by the Committee (i) all in cash, (ii) all in Common Stock, or
(iii) in any combination of cash and Common Stock. In the event that all or a
portion of the payment is made in Common Stock, the number of shares of Common
Stock delivered in satisfaction of such payment shall be determined by dividing
the amount of such payment or portion thereof by the Fair Market Value on the
Exercise Date. No fractional share of Common Stock shall be issued to make any
payment in respect of Stock Appreciation Rights; if any fractional share would
be issuable, the combination of cash and Common Stock payable to the Participant
shall be adjusted as directed by the Committee to avoid the issuance of any
fractional share.

6.3. Terms of Stock Options and Stock Appreciation Rights.

  (a)   Conditions on Exercise. An Award Agreement with respect to Options
and/or Stock Appreciation Rights may contain such waiting periods, exercise
dates and restrictions on exercise (including, but not limited to, periodic
installments) as may be determined by the Committee at the time of grant
(provided that the vesting schedule for Options and

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      Stock Appreciation Rights shall provide that the awards shall vest over a
period of no less than three (3) years and except that rules regarding the
exercise and or termination of Awards upon a Participant’s Disability, death,
Termination of Employment or ceasing to be a Director will be provided in
Participant’s Award Agreement with the Company) and the Committee may grant
Options or Stock Appreciation Rights with a forfeiture period of less than three
years as it deems necessary for recruitment purposes.     (b)   Duration of
Options and Stock Appreciation Rights. Options and Stock Appreciation Rights
shall terminate after the first to occur of the following events:

  (i)   Expiration of the Option or Stock Appreciation Right as provided in the
Award Agreement; or     (ii)   Termination of the Award following the
Participant’s disability, Retirement, death or other Termination of Employment
as provided in the Award Agreement; or     (iii)   Ten years from the Date of
Grant; or     (iv)   Solely in the case of a Stock Appreciation Right granted in
tandem with an Option, upon the expiration of the related Option.

  (c)   Acceleration or Extension of Exercise Time. The Committee may (but shall
not be obligated to) permit the exercise of an Option or Stock Appreciation
Right (i) prior to the time such Option or Stock Appreciation Right would become
exercisable under the terms of the Award Agreement, (ii) after the termination
of the Option or Stock Appreciation Right under the terms of the Award
Agreement, or (iii) after the expiration of the Option or Stock Appreciation
Right.

6.4. Exercise Procedures. Each Option and Stock Appreciation Right granted under
the Plan shall be exercised by written or electronic notice to the Company or by
such other exercise procedures as may be provided in the Award Agreement which
notice or other form of exercise must be received by the officer or employee of
the Company designated in the Award Agreement on or before the close of business
on the expiration date of the Award. The Purchase Price of shares purchased upon
exercise of an Option granted under the Plan shall be paid in full in cash by
the Participant pursuant to the Award Agreement; provided, however, that the
Committee may (but shall not be required to) permit payment to be made by
delivery to the Company of either (a) Common Stock (which may, in the sole
discretion of the Committee, include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Common
Stock, or (c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program that complies with applicable law under which, if so instructed
by the Participant, Common Stock may be issued directly to the Participant’s
broker or dealer upon receipt of an irrevocable written or electronic notice of
exercise from the Participant). In the event that any Common Stock shall be
transferred to the Company to satisfy all or any part of the Purchase Price, the
part of the Purchase Price deemed to have been satisfied by such transfer of
Common Stock shall be equal to the product derived by multiplying the Fair
Market Value as of the date of exercise times the number of shares of Common
Stock transferred to the Company. The Participant may not transfer to the
Company in satisfaction of the Purchase Price any fractional share of Common
Stock. Any part of the Purchase Price paid in cash upon the exercise

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of any Option shall be added to the general funds of the Company and may be used
for any proper corporate purpose. Unless the Committee shall otherwise
determine, any Common Stock transferred to the Company as payment of all or part
of the Purchase Price upon the exercise of any Option shall be held as treasury
shares.
6.5. Change in Control. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become immediately and fully exercisable. The provisions of this
Section 6.5 shall not be applicable to any Options or Stock Appreciation Rights
granted to a Participant if any Change in Control results from such
Participant’s beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.
Article VII.
Restricted Shares
7.1. Restricted Share Awards. The Committee may grant to any Participant an
Award of Common Stock in such number of shares, and on such terms, conditions
and restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. With respect
to performance-based Awards of Restricted Shares to “covered employees” (as
defined in Section 162(m) of the Code), performance targets will be limited to
specified levels of one or more of the Performance Goals. The terms of any
Restricted Share Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.

  (a)   Issuance of Restricted Shares. As soon as practicable after the Date of
Grant of a Restricted Share Award by the Committee, the Company shall cause to
be transferred on the books of the Company, or its agent, Common Stock,
registered on behalf of the Participant, evidencing the Restricted Shares
covered by the Award, but subject to forfeiture to the Company as of the Date of
Grant if an Award Agreement with respect to the Restricted Shares covered by the
Award is not duly executed by the Participant and timely returned to the
Company. All Common Stock covered by Awards under this Article VII shall be
subject to the restrictions, terms and conditions contained in the Plan and the
Award Agreement entered into by the Participant. Until the lapse or release of
all restrictions applicable to an Award of Restricted Shares the share
certificates, if any, representing such Restricted Shares may be held in custody
by the Company, its designee, or, if the certificates bear a restrictive legend,
by the Participant; provided, however, that if the Restricted Shares are
uncertificated, other arrangements may be made, in the discretion of the
Committee, to ensure the enforcement of the restrictions on such Restricted
Shares. Upon the lapse or release of all restrictions with respect to an Award
as described in Section 7.1(d), one or more share certificates, registered in
the name of the Participant, for an appropriate number of shares as provided in
Section 7.1(d), free of any restrictions set forth in the Plan and the Award
Agreement shall be delivered to the Participant.

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  (b)   Stockholder Rights. Beginning on the Date of Grant of the Restricted
Share Award and subject to execution of the Award Agreement as provided in
Section 7.1(a), the Participant shall become a stockholder of the Company with
respect to all shares subject to the Award Agreement and shall have all of the
rights of a stockholder, including, but not limited to, the right to vote such
shares and the right to receive dividends; provided, however, that any Common
Stock distributed as a dividend or otherwise with respect to any Restricted
Shares as to which the restrictions have not yet lapsed, shall be subject to the
same restrictions as such Restricted Shares and held or restricted as provided
in Section 7.1(a).     (c)   Restriction on Transferability. None of the
Restricted Shares may be assigned or transferred (other than by will or the laws
of descent and distribution, or to an inter vivos trust with respect to which
the Participant is treated as the owner under Sections 671 through 677 of the
Code), pledged or sold prior to lapse of the restrictions applicable thereto.  
  (d)   Delivery of Shares Upon Vesting. Upon expiration or earlier termination
of the forfeiture period without a forfeiture and the satisfaction of or release
from any other conditions prescribed by the Committee, or at such earlier time
as provided under the provisions of Section 7.3, the restrictions applicable to
the Restricted Shares shall lapse. As promptly as administratively feasible
thereafter, subject to the requirements of Section 10.5, the Company shall
deliver to the Participant or, in case of the Participant’s death, to the
Participant’s Beneficiary, one or more share certificates for the appropriate
number of shares of Common Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.

7.2. Terms of Restricted Shares.

  (a)   Forfeiture Periods. A grant of Restricted Shares pursuant to this
Article VII shall be subject to a minimum forfeiture period of at least three
(3) years, or such longer period as the Committee, in its sole discretion, may
determine. Notwithstanding the foregoing, the Committee may grant shares of
Restricted Shares with a forfeiture period of at least two (2) years, or such
longer period as the Committee, in its sole discretion, may determine, so long
as vesting is based on performance criteria and the Committee may grant shares
of Restricted Shares with a forfeiture period of less than three years as it
deems necessary for recruitment purposes.     (b)   Forfeiture of Restricted
Shares. Subject to Sections 7.2(c) and 7.3, all Restricted Shares shall be
forfeited and returned to the Company and all rights of the Participant with
respect to such Restricted Shares shall terminate unless the Participant
continues in the service of the Company or a Subsidiary as an employee or
non-employee director until the expiration of the forfeiture period for such
Restricted Shares and satisfies any and all other conditions set forth in the
Award Agreement. Subject to Section 7.2(a), the Committee shall determine the
forfeiture period (which may, but need not, lapse in installments) and any other
terms and conditions applicable with respect to any Restricted Share Award.

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  (c)   Waiver of Forfeiture Period. Notwithstanding anything contained in this
Article VII to the contrary, the Committee may, in its sole discretion, waive
the forfeiture period and any other conditions set forth in any Award Agreement
under appropriate circumstances (including the death, disability or Retirement
of the Participant or a material change in circumstances arising after the date
of an Award) and subject to such terms and conditions (including forfeiture of a
proportionate number of the Restricted Shares) as the Committee shall deem
appropriate.

7.3. Change in Control. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificate or certificates for such shares in accordance with Section 7.1(d).
Article VIII.
Performance Awards
8.1. Performance Awards.

  (a)   Award Periods and Calculations of Potential Incentive Amounts. The
Committee may grant Performance Awards to Participants. A Performance Award
shall consist of the right to receive a payment (measured by the Fair Market
Value of a specified number of shares of Common Stock, increases in such Fair
Market Value during the Award Period and/or a fixed cash amount) contingent upon
the extent to which certain predetermined performance targets have been met
during an Award Period. Performance Awards may be made in conjunction with, or
in addition to, Restricted Share Awards made under Article VII. The Award Period
shall be two or more fiscal or calendar years as determined by the Committee.
The Committee, in its discretion and under such terms as it deems appropriate,
may permit newly eligible employees, such as those who are promoted or newly
hired, to receive Performance Awards after an Award Period has commenced.    
(b)   Performance Targets. The performance targets may include such goals
related to the performance of the Company or, where relevant, any one or more of
its Subsidiaries or divisions and/or the performance of a Participant as may be
established by the Committee in its discretion. In the case of Performance
Awards to “covered employees” (as defined in Section 162(m) of the Code), the
targets will be limited to specified levels of one or more of the Performance
Goals. The performance targets established by the Committee may vary for
different Award Periods and need not be the same for each Participant receiving
a Performance Award in an Award Period. Except to the extent inconsistent with
the performance-based compensation exception under Section 162(m) of the Code,
in the case of Performance Awards granted to employees to whom such section is
applicable, the Committee, in its discretion, but only under extraordinary
circumstances as determined by the Committee, may change any prior determination
of performance targets for any Award Period at any time prior to the final
determination of the Award when events or transactions occur to cause the
performance targets to be an inappropriate measure of achievement.

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  (c)   Earning Performance Awards. The Committee, at or as soon as practicable
after the Date of Grant, shall prescribe a formula to determine the percentage
of the Performance Award to be earned based upon the degree of attainment of
performance targets.     (d)   Payment of Earned Performance Awards. Subject to
the requirements of Section 10.5, payments of earned Performance Awards shall be
made in cash or Common Stock, or a combination of cash and Common Stock, in the
discretion of the Committee. The Committee, in its sole discretion, may define
such terms and conditions with respect to the payment of earned Performance
Awards as it may deem desirable.

8.2. Terms of Performance Awards.

  (a)   Termination of Employment. Unless otherwise provided below or in
Section 8.3, in the case of a Participant’s Termination of Employment prior to
the end of an Award Period, the Participant will not have earned any Performance
Awards.     (b)   Retirement. If a Participant’s Termination of Employment is
because of Retirement prior to the end of an Award Period, the Participant will
not be paid any Performance Awards, unless the Committee, in its sole and
exclusive discretion, determines that an Award should be paid. In such a case,
the Participant shall be entitled to receive a pro-rata portion of his or her
Award as determined under Subsection (d).     (c)   Death or Disability. If a
Participant’s Termination of Employment is due to death or disability (as
determined in the sole and exclusive discretion of the Committee) prior to the
end of an Award Period, the Participant or the Participant’s personal
representative shall be entitled to receive a pro-rata share of his or her Award
as determined under Subsection (d).     (d)   Pro-Rata Payment. The amount of
any payment made to a Participant whose employment is terminated by Retirement,
death or disability (under circumstances described in Subsections (b) and (c))
will be the amount determined by multiplying the amount of the Performance Award
which would have been earned, determined at the end of the Award Period, had
such employment not been terminated, by a fraction, the numerator of which is
the number of whole months such Participant was employed during the Award
Period, and the denominator of which is the total number of months of the Award
Period. Any such payment made to a Participant whose employment is terminated
prior to the end of an Award Period under this Section 8.2 shall be made at the
end of the respective Award Period, unless otherwise determined by the Committee
in its sole discretion. Any partial payment previously made or credited to a
deferred account for the benefit of a Participant as provided under
Section 8.1(d) of the Plan shall be subtracted from the amount otherwise
determined as payable as provided in this Section.     (e)   Other Events.
Notwithstanding anything to the contrary in this Article VIII, the Committee
may, in its sole and exclusive discretion, determine to pay all or any portion
of a Performance Award to a Participant who has terminated employment prior to
the end of an Award Period under certain circumstances (including the death,
disability or

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      Retirement of the Participant or a material change in circumstances
arising after the Date of Grant) and subject to such terms and conditions as the
Committee shall deem appropriate.

8.3. Change in Control. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants in accordance with Section 8.2(d)
within 30 days after such Change in Control.
8.4. Grant of Other Stock-Based Awards. Other stock-based awards, consisting of
stock purchase rights, Awards of cash, Awards of Common Stock, or Awards valued
in whole or in part by reference to, or otherwise based on, Common Stock, may be
granted either alone or in addition to or in conjunction with other Awards under
the Plan. Subject to the provisions of the Plan, the Committee shall have sole
and complete authority to determine the persons to whom and the time or times at
which such Awards shall be made, the number of shares of Common Stock to be
granted pursuant to such Awards, and all other conditions of the Awards. Any
such Award shall be confirmed by an Award Agreement executed by the Company and
the Participant, which Award Agreement shall contain such provisions as the
Committee determines to be necessary or appropriate to carry out the intent of
this Plan with respect to such Award.
8.5. Terms of Other Stock-Based Awards. In addition to the terms and conditions
specified in the Award Agreement, Awards made pursuant to this Article VIII
shall be subject to the following:

  (a)   Any Common Stock subject to Awards made under this Article VIII may not
be sold, assigned, transferred, pledged or otherwise encumbered prior to the
date on which the shares are issued, or, if later, the date on which any
applicable restriction, performance or deferral period lapses; and     (b)   If
specified by the Committee in the Award Agreement, the recipient of an Award
under this Article VIII shall be entitled to receive, currently or on a deferred
basis, interest or dividends or dividend equivalents with respect to the Common
Stock or other securities covered by the Award; and     (c)   The Award
Agreement with respect to any Award shall contain provisions dealing with the
disposition of such Award in the event of a Termination of Employment prior to
the exercise, realization or payment of such Award, whether such termination
occurs because of Retirement, disability, death or other reason, with such
provisions to take account of the specific nature and purpose of the Award.

8.6. Foreign Qualified Awards. Awards under the Plan may be granted to such
employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided,
however, that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.

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Article IX.
Short-Term Cash Incentive Awards
9.1. Eligibility. Executive officers of the Company who are from time to time
determined by the Committee to be “covered employees” for purposes of Section
162(m) of the Code will be eligible to receive short-term cash incentive awards
under this Article IX.
9.2. Awards.

  (a)   Performance Targets. For each fiscal year of the Company, the Committee
shall establish objective performance targets based on specified levels of one
or more of the Performance Goals. Such performance targets shall be established
by the Committee on a timely basis to ensure that the targets are considered
“preestablished” for purposes of Section 162(m) of the Code.     (b)   Amounts
of Awards. In conjunction with the establishment of performance targets for a
fiscal year, the Committee shall adopt an objective formula (on the basis of
percentages of Participants’ salaries, shares in a bonus pool or otherwise) for
computing the respective amounts payable under the Plan to Participants if and
to the extent that the performance targets are attained. Such formula shall
comply with the requirements applicable to performance-based compensation plans
under Section 162(m) of the Code and, to the extent based on percentages of a
bonus pool, such percentages shall not exceed 100% in the aggregate.     (c)  
Payment of Awards. Awards will be payable to Participants in cash each year upon
prior written certification by the Committee of attainment of the specified
performance targets for the preceding fiscal year.     (d)   Negative
Discretion. Notwithstanding the attainment by the Company of the specified
performance targets, the Committee shall have the discretion, which need not be
exercised uniformly among the Participants, to reduce or eliminate the award
that would be otherwise paid.     (e)   Guidelines. The Committee may adopt from
time to time written policies for its implementation of this Article IX. Such
guidelines shall reflect the intention of the Company that all payments
hereunder qualify as performance-based compensation under Section 162(m) of the
Code.     (f)   Non-Exclusive Arrangement. The adoption and operation of this
Article IX shall not preclude the Board or the Committee from approving other
short-term incentive compensation arrangements for the benefit of individuals
who are Participants hereunder as the Board or Committee, as the case may be,
deems appropriate and in the best interests of the Company.

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Article X.
Terms Applicable Generally to Awards
Granted Under the Plan
10.1. Plan Provisions Control Award Terms. The terms of the Plan shall govern
all Awards granted under the Plan, and in no event shall the Committee have the
power to grant any Award under the Plan which is contrary to any of the
provisions of the Plan. In the event any provision of any Award granted under
the Plan shall conflict with any term in the Plan as constituted on the Date of
Grant of such Award, the term in the Plan as constituted on the Date of Grant of
such Award shall control. Except as provided in Section 10.3 and Section 10.7,
the terms of any Award granted under the Plan may not be changed after the Date
of Grant of such Award so as to materially decrease the value of the Award
without the express written approval of the holder.
10.2. Award Agreement. No person shall have any rights under any Award granted
under the Plan unless and until the Company and the Participant to whom such
Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.
10.3. Modification of Award After Grant. No Award granted under the Plan to a
Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and
(b) shall be approved by the Committee.
10.4. Limitation on Transfer. Except as provided in Section 7.1(c) in the case
of Restricted Shares, a Participant’s rights and interest under the Plan may not
be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant’s personal representative) may exercise rights
under the Plan. The Participant’s Beneficiary may exercise the Participant’s
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, the Committee may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.
10.5. Taxes. The Company shall be entitled, if the Committee deems it necessary
or desirable, to withhold (or secure payment from the Participant in lieu of
withholding) the amount of any withholding or other tax required by law to be
withheld or paid by the Company with respect to any amount payable and/or shares
issuable under such Participant’s Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines
in accordance with the following rules:

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  (a)   The Participant shall have the right to elect to meet his or her
withholding requirement (i) by having withheld from such Award at the
appropriate time that number of shares of Common Stock, rounded up to the next
whole share, whose Fair Market Value is equal to the amount of withholding taxes
due, (ii) by direct payment to the Company in cash of the amount of any taxes
required to be withheld with respect to such Award or (iii) by a combination of
shares and cash.     (b)   The Committee shall have the discretion as to any
Award, to cause the Company to pay to tax authorities for the benefit of any
Participant, or to reimburse such Participant for the individual taxes which are
due on the grant, exercise or vesting of any share Award, or the lapse of any
restriction on any share Award (whether by reason of a Participant’s filing of
an election under Section 83(b) of the Code or otherwise), including, but not
limited to, Federal income tax, state income tax, local income tax and excise
tax under Section 4999 of the Code, as well as for any such taxes as may be
imposed upon such tax payment or reimbursement.     (c)   In the case of
Participants who are subject to Section 16 of the Exchange Act, the Committee
may impose such limitations and restrictions as it deems necessary or
appropriate with respect to the delivery or withholding of shares of Common
Stock to meet tax withholding obligations.

10.6. Surrender of Awards. Any Award granted under the Plan may be surrendered
to the Company for cancellation on such terms as the Committee and the holder
approve.
10.7. Adjustments to Reflect Capital Changes.

  (a)   Recapitalization. The number and kind of shares subject to outstanding
Awards, the Purchase Price or Exercise Price for such shares, the number and
kind of shares available for Awards subsequently granted under the Plan and the
maximum number of shares in respect of which Awards can be made to any
Participant in any calendar year shall be appropriately adjusted to reflect any
stock dividend, stock split, combination or exchange of shares, merger,
consolidation or other change in capitalization with a similar substantive
effect upon the Plan or the Awards granted under the Plan. The Committee shall
have the power and sole discretion to determine the amount of the adjustment to
be made in each case.     (b)   Merger. After any Merger in which the Company is
the surviving corporation, each Participant shall, at no additional cost, be
entitled upon any exercise of all Options or receipt of other Award to receive
(subject to any required action by stockholders), in lieu of the number of
shares of Common Stock receivable or exercisable pursuant to such Award, the
number and class of shares or other securities to which such Participant would
have been entitled pursuant to the terms of the Merger if, at the time of the
Merger, such Participant had been the holder of record of a number of shares
equal to the number of shares receivable or exercisable pursuant to such Award.
Comparable rights shall accrue to each Participant in the event of successive
Mergers of the character described above. In the event of a Merger in which the
Company is not the surviving corporation, the surviving, continuing, successor,
or purchasing corporation, as the case

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      may be (the “Acquiring Corporation”), shall either assume the Company’s
rights and obligations under outstanding Award Agreements or substitute awards
in respect of the Acquiring Corporation’s stock for such outstanding Awards. In
the event the Acquiring Corporation fails to assume or substitute for such
outstanding Awards, the Board shall provide that any unexercisable and/or
unvested portion of the outstanding Awards shall be immediately exercisable and
vested as of a date prior to such Merger, as the Board so determines. The
exercise and/or vesting of any Award that was permissible solely by reason of
this Section 10.7(b) shall be conditioned upon the consummation of the Merger.
Any Options which are neither assumed by the Acquiring Corporation nor exercised
as of the date of the Merger shall terminate effective as of the effective date
of the Merger.     (c)   Options to Purchase Shares or Stock of Acquired
Companies. After any Merger in which the Company or a Subsidiary shall be a
surviving corporation, the Committee may grant substituted options under the
provisions of the Plan, pursuant to Section 424 of the Code, replacing old
options granted under a plan of another party to the Merger whose shares or
stock subject to the old options may no longer be issued following the Merger.
The foregoing adjustments and manner of application of the foregoing provisions
shall be determined by the Committee in its sole discretion. Any such
adjustments may provide for the elimination of any fractional shares which might
otherwise become subject to any Options.

10.8. No Right to Employment. No employee or other person shall have any claim
of right to be granted an Award under this Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.
10.9. Awards Not Includable for Benefit Purposes. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.
10.10. Governing Law. All determinations made and actions taken pursuant to the
Plan shall be governed by the laws of the State of Delaware and construed in
accordance therewith. Any action, claim, unit or demand brought by or on behalf
of a Participant in connection with any Award under this Plan shall be brought
in a court of competent jurisdiction over actions arising in Allegheny County,
Pennsylvania, the sites of the Company’s headquarters and the general operation
of its business.
10.11. No Strict Construction. No rule of strict construction shall be implied
against the Company, the Committee, or any other person in the interpretation of
any of the terms of the Plan, any Award granted under the Plan or any rule or
procedure established by the Committee.
10.12. Compliance with Rule 16b-3. It is intended that unless the Committee
determines otherwise, Awards under the Plan be eligible for exemption under
Rule 16b-3. The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to

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comply with Rule 16b-3, as it may be amended from time to time, and to make any
other such amendments or modifications as it deems necessary or appropriate to
better accomplish the purposes of the Plan in light of any amendments made to
Rule 16b-3.
10.13. Captions. The captions (i.e., all Section headings) used in the Plan are
for convenience only, do not constitute a part of the Plan, and shall not be
deemed to limit, characterize or affect in any way any provisions of the Plan,
and all provisions of the Plan shall be construed as if no captions have been
used in the Plan.
10.14. Severability. Whenever possible, each provision in the Plan and every
Award at any time granted under the Plan shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of the Plan
or any Award at any time granted under the Plan shall be held to be prohibited
by or invalid under applicable law, then (a) such provision shall be deemed
amended to accomplish the objectives of the provision as originally written to
the fullest extent permitted by law and (b) all other provisions of the Plan and
every other Award at any time granted under the Plan shall remain in full force
and effect.
10.15. Amendment and Termination.

  (a)   Amendment. The Board shall have complete power and authority to amend
the Plan at any time; provided, however, that the Board shall not, without the
requisite affirmative approval of stockholders of the Company, make any
amendment which materially modifies the Plan by increasing the benefits accrued
to Participants under the Plan; increasing the number of securities which may be
issued under the Plan; modifying the requirements for participation in the Plan;
or including a provision allowing the Board to lapse or waive restrictions at
its discretion; or which requires stockholder approval under the Code, unless
such compliance is no longer desired under the Code, or under any other
applicable law or rule of any stock exchange which lists Common Stock or Company
Voting Securities. No termination or amendment of the Plan may, without the
consent of the Participant to whom any Award shall theretofore have been granted
under the Plan, adversely affect the right of such individual under such Award.
    (b)   Termination. The Board shall have the right and the power to terminate
the Plan at any time. No Award shall be granted under the Plan after the
termination of the Plan, but the termination of the Plan shall not have any
other effect and any Award outstanding at the time of the termination of the
Plan may be exercised after termination of the Plan at any time prior to the
expiration date of such Award to the same extent such Award would have been
exercisable had the Plan not terminated.

* * * * * *

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