Employment Letter Agreement of David Strobel



  
 Exhibit 10(C)


 

 

 Carpenter Technology Corporation 
 PO Box 14662 
 Reading, PA 19612-4662 

Tel: 610.208.2000 

September 2, 2010 
 Via Hand
Delivery 
  

	 	Re:	Employment as SVP – Global Operations 

 Dear David Strobel, 
 On behalf of Carpenter Technology Corporation (the
“Company”), we are pleased to confirm our promotional offer to you on the terms below stated. 
  

			
	Title and Reporting	  	You will serve as the Company’s SVP – Global Operations, reporting directly to me.
		
	Effective Date	  	September 7, 2010
		
	Annual Base Salary	  	$250,000
		
	Annual Bonus	  	 You will be eligible to participate in the Company’s Executive Bonus Compensation Plan, or such successor arrangement (if any) as
the Board may from time to time establish. Your target annual bonus opportunity for the fiscal year ending June 30, 2011 will be 80% of your annual base salary received during the fiscal year. Zero to 200% of target will be earned based on
achievement of Return on Net Assets (RONA), Operating Income, Revenue, On-Time Delivery and Safety performance objectives during the fiscal year ending June 30, 2011. The relevant corporate performance objectives are determined by the Board or its
Human Resources Committee each fiscal year.
  



  
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	Annual Equity Awards	  	 The Company generally makes equity awards to its senior executives annually. The terms of those awards are determined by the Board or
its Human Resources Committee. You will receive the following equity incentives for fiscal year 2011:
  
 1) A non-qualified stock option to purchase common stock of the Company with a grant date fair value, as determined by the Company, equal to $37,500. This award is in addition to 2,956 stock options
previously received at the beginning of the fiscal year. The number of stock options will be determined by using Black-Scholes valuation, which is based on the strike price on the grant date. The exercise price of this option will be the closing
price of the Company’s common stock on the grant date. This option will vest and become exercisable as follows: 1/3 per year on each of the first, second and third anniversaries of the grant date, subject in each case to your continued service
through the applicable vesting date.
  
 The grant date for your stock option
award will be the effective date of your promotion. You will receive an award agreement setting forth the number of options granted, the exercise price and vesting terms after your promotion date.

 
 2) A one-year performance unit opportunity that, at target levels of performance,
will result in the grant of 3,005 units that convert to common stock of the Company on a 1:1 basis. This is the total target level of units, not in addition to the target units previously communicated at the beginning of the fiscal year. Zero
to 200% of these units will be earned based on the achievement of Earnings Per Share (EPS) performance objectives during the fiscal year ending June 30, 2011 and, to the extent earned, will vest as follows:  1/2 per year on each of June 30, 2012 and June 30, 2013,
subject in each case to your continued service through the applicable vesting date. The relevant corporate performance objectives are determined by the Board or its Human Resources Committee each fiscal year.

 
 3) A three-year performance unit opportunity that, at target levels of performance,
will result in the grant of 3,434 shares of common stock of the Company. This is the total target level of units, not in addition to the target units previously communicated at the beginning of the fiscal year. Zero to 200% of these units
will be earned based on your continued service and the achievement of Total Shareholder Return (TSR) performance objectives during the three year period ending June 30, 2013. The shares subject to the award will only be issued, if at all, once
earned and will be fully vested upon issuance. The relevant corporate performance objectives will be determined by the Board or its Human Resources Committee each fiscal year.

 



  
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	Employee Benefits	  	 You will continue to be eligible to participate in the employee benefit programs applicable to our salaried employees generally. Under
current programs, this would include in your case $250,000 of Company-paid group term life insurance and Accidental Death & Dismemberment, and an opportunity to purchase, at your own cost, supplemental term life insurance coverage.1

 
 In addition, you will continue participation in the Supplemental Retirement Plan for
Executives of Carpenter Technology, Corp.. As previously communicated, accruals in that plan will cease on December 31, 2012. You will also continue to participate in the Deferred Compensation Plan for Officers and Key Employees of Carpenter
Technology Corporation as well as the three excess benefit plans maintained for certain Company employees whose qualified plan benefits are curtailed by Internal Revenue Code (“Code”) limits.

 
 The Company reserves the right to amend, modify or terminate all these plans and
programs at any time, in its discretion.
  
 Except as herein provided, or as
may be hereafter approved by the Board or its Human Resources Committee, you will not be entitled to further compensation or benefits.
  

		
	 Executive Severance
 Plan
	  	 Your employment by the Company is “at will” and may be terminated by the Company or by you at any time. However, if your
employment terminates due to a termination by the Company without “cause” or a resignation by you with “good reason” (each, as defined in the attached Plan document), you will be entitled to receive the severance benefits
included in the Severance Pay Plan for Executives of Carpenter Technology Corporation attached hereto as Exhibit A.
  

		
	 Change in Control
 Severance
	  	 You will be entitled to severance benefits in the event of a change in control, details of which will be provided to you in the coming
weeks. For avoidance of doubt, benefits under this section will be in lieu of, not in addition to, the severance benefits described in the Severance Pay Plan for Executives of Carpenter Technology Corporation.

 

		
	 Intellectual

Property,
 Confidentiality
and
 Restrictive

Covenants
	  	 In your capacity as SVP – Global Operations, you will be exposed to the Company’s most sensitive and proprietary information
and technology, and will be provided with access to the Company’s most valuable and carefully cultivated business relationships. Accordingly, your employment is conditioned upon your execution of the Intellectual Property, Confidentiality and
Restrictive Covenant Agreement attached hereto as Exhibit B.
  
  

		
	Indemnification	  	 To address your right to indemnification for acts performed in your capacity as an Officer, the Company will enter into an
Indemnification Agreement with you substantially in the form attached hereto as Exhibit C.
  



 

	1	 At present, the maximum supplemental term life insurance coverage available is the lesser of (i) four times base salary or (ii) $2,000,000
less the basic Company-paid coverage amount. 



  
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	Miscellaneous	  	 You represent and warrant that there are no restrictions, agreements or understandings whatsoever that would prevent or make unlawful
your execution of this letter, that would be inconsistent or in conflict with this letter or your obligations hereunder, or that would otherwise prevent, limit or impair your ability to be employed by the Company.

 
 Your ownership of or transactions in securities of the Company will be subject to
the Company’s insider trading policies and stock ownership guidelines from time to time in effect.
  
 Reimbursement by the Company of any expense will be subject to Company policies and practices in effect from time to time and will be further subject to the requirements of Treas. Reg.
§§ 1.409A-3(i)(1)(iv)(A)(3), (4) and (5).
  
 Any payment or
transfer of property to you will be subject to tax withholding to the extent required by applicable law.
  
 This letter constitutes our entire agreement and understanding regarding the matters addressed herein, and merges and supersedes all prior or contemporaneous discussions, agreements, and understandings of
every nature between us regarding these matters.
  
 This letter will be
governed by, and enforced in accordance with, the laws of the Commonwealth of Pennsylvania, without regard to the application of the principles of conflicts of laws.

 


 Congratulations on your new role. 

 

			
	Sincerely,
	
	CARPENTER TECHNOLOGY CORPORATION
		
	By:	 	/S/ WILLIAM A. WULFSOHN
		 	William A. Wulfsohn
		 	President & CEO


 Acknowledged and agreed to
on 
 this 2nd day of September, 2010: 
  

	
	
	/S/ DAVID L. STROBEL
	David L. Strobel


  
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