ex10-1.htm


    
      
        

      

    

    
    

    Exhibit 10.1

     

    
       

      CONSULTING
AGREEMENT

       

      This
Consulting Agreement (“Agreement”) is made and entered into this 9th day of
December 2008 by and between Sunil Y. Widge, PhD (“Consultant”) of 97
Frederickville Road, Mertztown, Pennsylvania 19539 and Carpenter Technology
Corporation (“Carpenter”), a Delaware corporation that maintains its principal
place of business in Reading, Pennsylvania

       

      Recitals

       

      WHEREAS, Consultant has been
employed for many years by Carpenter in management and executive posts,
including service as Carpenter’s Chief Technology Officer; and

       

      WHEREAS, Consultant has
elected voluntarily to retire from his position as Senior Vice President and
Chief Technology Officer, effective January 31, 2009; and

       

      WHEREAS, Carpenter recognizes
that Consultant possesses certain knowledge, information, experience and
personal and business relationships that may be valuable alternatively to
Carpenter or, if he is lured elsewhere, to persons or businesses that compete
with Carpenter in trade or commerce; and

       

      WHEREAS, the parties, for
their mutual convenience and to facilitate their respective goals and
objectives, desire to, and will, enter into a written agreement that will extend
their relationship beyond the period of Carpenter’s actual employment of
Consultant.

       

      NOW, THEREFORE, in
consideration of the mutual covenants and promises detailed below, the parties
agree as follows:

       

      Services

       

      
        	
                 
      

              	
                1.

              	
                The
      Consultant shall continue to work as an at will employee of Carpenter
      until January 31, 2009.  Consultant shall continue to hold the
      title of “Senior Vice President and Chief Technology Officer” and his
      salary, benefits and other compensation terms shall not be altered by
      Carpenter during that period.  Effective January 31, 2009,
      Consultant shall voluntarily retire as an active employee of Carpenter and
      he may seek retirement benefits under one or more of the existing
      Carpenter retirement plans.  Carpenter shall accept Consultant’s
      retirement notice on that occasion and, if asked and if Consultant
      qualifies at the time, it shall facilitate Consultant’s retirement under
      one or more of its existing retirement plans.  On the occasion
      of his retirement, Carpenter shall immediately accelerate the vesting of
      Consultant’s existing restricted stock interests in accordance with the
      terms of the plans and agreements that govern or affect those equity
      interests.  The parties specifically recognize and agree that
      certain stock options that were granted to Consultant during June 2008
      shall lapse and become null, void and unenforceable on that occasion
      because Consultant has not satisfied an employment term
      predicate.

              


      

       

      
        
          
          

        

        
          - 1
-

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                2.

              	
                Beginning
      on the date he executes this Agreement and continuing until the date he
      voluntarily resigns or retires, Consultant shall report to its Chief
      Executive Officer and to other Carpenter executives designated by
      her.  The terms and conditions of Consultant’s employment
      relationship with Carpenter will not change if he complies fully
      throughout this period with the Code of Conduct applicable to all
      Carpenter employees.  If Consultant violates any material term
      of the Code of Conduct, Carpenter may discipline him, it may terminate
      Consultant as an employee, and it may then unilaterally declare all or any
      of the terms of this Agreement null, void and unenforceable.  If
      Consultant complies fully with the terms of Carpenter’s Code of Conduct
      during this period, he shall be permitted to retire as detailed above and,
      if he is eligible under existing plans, he may collect retirement benefits
      at that time or, if appropriate, at a later
  date.

              


      

       

      
        	
                 
      

              	
                3.

              	
                Beginning
      on February 1, 2009 and continuing through January 31, 2012, Consultant
      shall become an independent contractor who may use the title “Chief
      Technology Officer Emeritus” in ways that will not mislead the public
      concerning his actual status as an independent contractor and who will
      serve Carpenter, and its affiliates and subsidiaries, exclusively in the
      following roles:

              


      

       

      
        	
                 
      

              	
                a.)

              	
                He
      will assist Carpenter and members of its leadership team in all matters
      reasonably related to the analysis, evaluation and actual acquisition of
      other businesses or business interests or business relationships;
      and

              


      

       

      
        	
                 
      

              	
                b.)

              	
                He
      will provide technical consulting services to Carpenter;
    and

              


      

       

      
        	
                 
      

              	
                c.)

              	
                He
      will, as requested, represent Carpenter and its interests in industry or
      technical organizations, associations or groups;
  and

              


      

       

      
        	
                 
      

              	
                d.)

              	
                He
      shall accept such other assignments as the Carpenter Chief Executive
      Officer may from time to time deliver to him, if they reasonably relate to
      any job he held while employed by
Carpenter.

              


      

       

      Consultant
shall not accept any other job, appointment (public or private) or any paid or
unpaid consulting relationship during this term without first obtaining
Carpenter’s written consent, which shall not be unreasonably withheld if any
opportunity does not conflict with Carpenter’s business interests or the
Consultant’s ability to perform under this Agreement.  Throughout this
period, Consultant shall work on Carpenter assignments no less than an average
of eighty hours per month throughout the period of his consultancy, namely from
February 1, 2009 through the end of this Agreement.  He shall present
a written summary of his hours and tasks to Carpenter at the end of each
quarter.  Carpenter shall assign Consultant suitable space within its facilities for
use throughout the term of this Agreement.  (It is not expected that
Consultant always will work while he is physically present at a Carpenter
facility; it is expected that he occasionally will work elsewhere on Carpenter
projects.)  Upon request, Carpenter shall deliver to Consultant
sufficient supplies and equipment to perform tasks assigned to him under, or in
connection with, this Agreement.  These items will be delivered to
Consultant with the understanding that they will be used only in connection with
his work for Carpenter; that these items shall remain Carpenter’s property; and
that he has no proprietary interests in them.

       

      
        
          
          

        

        
          - 2
-

          
            

          

        

        
          
          

        

         

      

      Term

       

      
        	
                 
      

              	
                4.

              	
                Unless
      terminated earlier as detailed elsewhere in this text, the work and
      consulting terms of this Agreement shall not terminate or end before
      January 31, 2012.  Carpenter’s obligations to make these
      payments to Consultant shall continue until any termination of this
      Agreement.  Carpenter will be relieved of this obligation only
      if it a) properly terminates this Agreement as detailed below; b) if the
      Consultant becomes permanently disabled and is not able to perform the
      duties required by this Agreement; or c) if the Consultant
      dies.

              


      

       

      Consideration

       

      
        	
                 
      

              	
                5.

              	
                Carpenter
      shall pay Consultant a total of One Million Five Hundred Seventy-Five
      Thousand United States Dollars (US$1,575,000) throughout the term of this
      Agreement for his services as an independent contractor.  This
      sum shall be made in the following installments.  First,
      Carpenter shall pay Three Hundred Thirty Thousand Dollars ($330,000) to
      him no later than February 1, 2009.  Thereafter, Carpenter shall
      pay him Thirty-Five Thousand Five Hundred Seventy-One Dollars (US$35,571)
      on the last business day of each month for thirty-five months commencing
      during March 2009.  Consultant promises to pay all federal,
      state or local income taxes related to these revenues, and he promises to
      indemnify, defend and hold Carpenter harmless if his timely failure to do
      so causes Carpenter any actual or threatened
      liability.  Consultant also may recover from Carpenter all
      expenses reasonably incurred by him in connection with his assigned
      duties.  With the exception of secretarial services, Consultant
      will be reimbursed for out-of-pocket expenses in the same ways, and at the
      same rates, as persons who hold the title “Senior Vice President” or the
      equivalent at the time the expense actually is incurred by
      Consultant.  Consultant may not recover from Carpenter any
      expenses associated with secretarial or administrative support or related
      expense.  Carpenter may require Consultant to produce acceptable
      evidence of an expense before any reimbursement will be made to
      him.

              


      

       

      
        
          
          

        

        
          - 3
-

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                6.

              	
                In
      addition to the monthly cash consideration and for the duration of this
      Agreement, Carpenter will provide medical and prescription benefits to
      Consultant and eligible family members according to the same terms and
      conditions that those benefits are provided to active senior members of
      the Carpenter team.

              


      

       

      Consultant’s
Promises

       

      
        	
                 
      

              	
                7.

              	
                Throughout
      the term of this Agreement, and for a three year period following its
      termination for any reason, Consultant shall not, directly or
      indirectly:

              


      

       

      
        	
                 
      

              	
                a.)

              	
                Cause,
      induce or encourage any employee to leave his or her employment with
      Carpenter or any of its affiliates or subsidiaries;
  or

              


      

       

      
        	
                 
      

              	
                b.)

              	
                Hire
      any person who was an employee of Carpenter or any of its subsidiaries or
      affiliates as of the date of his termination, except he may hire any
      person whose employment was terminated involuntarily by Carpenter,
      provided that person was not terminated for cause;
  or

              


      

       

      
        	
                 
      

              	
                c.)

              	
                Cause,
      induce or encourage any customer, licensee or other business relation to
      cease or reduce its level of business activity with Carpenter;
      or

              


      

       

      
        	
                 
      

              	
                d.)

              	
                Affirmatively
      encourage any person or entity reasonably to conclude that he is a
      Carpenter employee following his retirement or in connection with the use
      of the title “Chief Technology Officer
  Emeritus.”

              


      

       

      
        	
                 
      

              	
                8.

              	
                Consultant
      acknowledges that Carpenter and its subsidiaries and affiliates are
      engaged in extremely competitive specialty alloys, powdered metal products
      or titanium businesses throughout the world.  Based on this
      recognition and other considerations, Consultant promises and agrees that,
      throughout the term of this Agreement and for three years after its
      termination for any reason, he will not engage, directly or indirectly, in
      any business or activity that competes in trade or commerce with Carpenter
      or any of its affiliates or subsidiaries.  This restriction on
      Consultant’s ability to compete with Carpenter or any of its affiliates or
      subsidiaries is restricted to those places where Carpenter or any of its
      affiliates or subsidiaries actually does business and to those places
      where those enterprises actively seek to do business at the time of the
      activity contemplated by Consultant or persons associated with
      him.

              


      

       

      
        	
                 
      

              	
                9.

              	
                If
      any court of competent jurisdiction concludes that either the duration or
      scope of the restrictions established by paragraph 8 are not enforceable,
      the parties agree that the court may modify those terms to impose the
      maximum term or scope allowable under the applicable
  law.

              


      

       

      
        
          
          

        

        
          - 4
-

          
            

          

        

        
          
          

        

      

       

      
        	
                 
      

              	
                10.

              	
                If
      Consultant commits a material breach of paragraphs 8 or 12, Carpenter may
      seek and obtain any remedy available under law in a court of law or
      equity.  Because the parties recognize and agree that any
      material breach of paragraphs 8 or 12 will cause Carpenter or any of its
      affiliates or subsidiaries irreparable harm, Carpenter may seek specific
      performance or injunctive relief against Consultant if the latter betrays
      his promises.  The parties agree that the proper venue to
      address and resolve any material breach of this Agreement, whether it is
      based on paragraph 8, paragraph 12 or any other part of the text, shall be
      a court of competent jurisdiction located in Berks County,
      Pennsylvania.  The parties consent to the personal jurisdiction
      of this court for this purpose and each shall refrain from objecting to
      the court’s exercise of personal jurisdiction over the
      parties.

              


      

       

      Property
Interests

       

      
        	
                 
      

              	
                11.

              	
                All
      materials or tangible or intangible property interests created, directly
      or indirectly and regardless of form, as a result of Consultant’s efforts
      or involvement following the execution of this Agreement shall become
      solely the property of Carpenter.  These property interests
      shall each be considered a work made for hire on behalf of
      Carpenter.  To the extent any person makes a claim that these
      property interests are not valid works for hire, then Consultant shall
      assign to Carpenter all interests he or his estate may claim, and he shall
      assist Carpenter in resisting similar claims made by
      others.  If, following the express and timely consent of
      Carpenter, Consultant accepts an engagement with another person or entity
      and, during the course of the engagement, creates or participates in the
      creation of certain tangible or intangible property interests, then
      Carpenter shall not have any interests in that property if
      a) Consultant did not use, or cause others improperly to use, any
      Carpenter employee, resource or facility (as described in paragraph 3 or
      otherwise) to advance or facilitate the development of any aspect of that
      property interest; or b) Consultant failed to obtain timely written
      consent from Carpenter to pursue the engagement; or c) Consultant
      failed diligently to separate activities associated with the engagement
      from his obligations, duties and responsibilities to Carpenter under this
      Agreement.

              


      

       

      
        	
                 
      

              	
                12.

              	
                During
      the term of this Agreement and for three years following its termination
      for any reason, Consultant shall protect from unauthorized disclosure all
      of Carpenter’s trade secrets, confidences and proprietary information,
      including those owned or controlled by Carpenter’s affiliates and
      subsidiaries.  The parties recognize and agree that Consultant
      will be exposed regularly to Carpenter’s trade secrets, confidences and
      proprietary information, and that Carpenter and its affiliates and
      subsidiaries have lawful rights to expect that Consultant will not
      knowingly, recklessly or negligently make or facilitate any unauthorized
      disclosure of this information to any other person or
      entity.  The parties also acknowledge that Carpenter and its
      affiliates and subsidiaries will suffer irreparable harm if Consultant makes any unauthorized
      disclosure of its trade secrets, confidences or proprietary
      information.

              


      

       

      
        
          
          

        

        
          - 5
-

          
            

          

        

        
          
          

        

      

       

      Liability

       

      
        	
                 
      

              	
                13.

              	
                Consultant
      promises at all times to exercise due care while performing his duties
      under this Agreement.  If Consultant deliberately, or as a
      result of his failure to exercise due care, causes personal injury, injury
      to property, or losses of any kind while performing services called for or
      required by this Agreement, he shall indemnify, defend and hold Carpenter
      or any of its affiliates or subsidiaries harmless from any and all damage,
      liability or loss that resulted from his
  misconduct.

              


      

       

      Compliance
with Law

       

      
        	
                 
      

              	
                14.

              	
                Consultant
      promises at all times to comply with the requirements of law while
      performing services that are called for or required by this Agreement
      wherever he is required to appear and perform his
      assignments.  Without limiting the generality of this
      declaration and its broad geographic reach, Consultant shall comply always
      with the Foreign Corrupt Practices Act, any laws related to export
      compliance, any laws concerning the control or regulation of a publicly
      traded company, among other laws or regulation existing in the United
      States and elsewhere.

              


      

       

      Termination
by Carpenter

       

      
        	
                 
      

              	
                15.

              	
                Carpenter
      may terminate this Agreement upon five days written notice to Consultant
      for any of the following reasons.  It may terminate this
      Agreement if: a) Consultant violates any portion of Carpenter’s Code of
      Conduct for its employees, a publication that Carpenter may periodically
      change or amend; or b) Consultant is convicted of a felony offense; c)
      Consultant’s permanent physical or mental disability that renders him
      unable to perform any of his duties under this Agreement; d) Consultant’s
      death; d) Consultant’s material breach of any term of this Agreement; or
      e) any act by Consultant, whether if results in a conviction or a judicial
      determination of wrongdoing or not, that constitutes fraud, deceit,
      dishonesty or willful malfeasance; or f) the insolvency or bankruptcy of
      the Consultant.  If this termination occurs after any payments
      are made under this Agreement, Carpenter’s duty to make additional
      payments to Consultant or his representatives shall immediately
      cease.

              


      

       

      
        
          
          

        

        
          - 6
-

          
            

          

        

        
          
          

        

         

      

      Termination
by Consultant

       

      
        	
                 
      

              	
                16.

              	
                Consultant
      may terminate this Agreement upon five days written notice to Carpenter
      for any of the following reasons.  He may terminate this
      Agreement if a) Carpenter or any of its affiliates or subsidiaries commits
      a material breach of any term of this Agreement; b) if Carpenter fails to
      make timely payment of any sum due him for his work or to reimburse him
      for his legitimate expenses; c) if Carpenter repeatedly asks Consultant to
      perform duties or tasks that would be unlawful or unreasonably would
      expose him to personal risk or significant financial risk; or d) the
      insolvency or bankruptcy of Carpenter.  If the basis for
      termination rests on subparagraphs a), b) or c) Consultant’s eligibility
      for medical and prescription benefits for the balance of the contract term
      shall not be affected, and Consultant may seek money damages for a
      material breach as provided by law.  In the event Consultant
      properly terminates his obligations under this Agreement in accordance
      with this paragraph, the restrictions imposed on him under paragraph 8
      shall immediately become null, void and unenforceable.  The
      restrictions created by paragraph 8 shall immediately be reinstated, on a
      temporary basis, if Carpenter, within thirty days of receipt of a notice
      of termination, seeks a judicial determination that either the purported
      termination is void and ineffective or that, notwithstanding the purported
      termination, equitable or legal considerations require the continued
      enforcement of the terms of paragraph 8 for all or part of the term
      limiting competition.

              


      

       

      Good
Faith and Fair Treatment

       

      
        	
                 
      

              	
                17.

              	
                Following
      the tender of his resignation to Carpenter, and throughout the remaining
      term of this Agreement, the parties promise at all times to treat each
      other fairly and to execute the contractual obligations created by this
      Agreement in good faith.

              


      

       

      Return
of Property

       

      
        	
                 
      

              	
                18.

              	
                Consultant
      promises within seven days of any termination of this Agreement to return
      in good condition all property issued to him by Carpenter during the term
      of this Agreement.  In the event Carpenter terminates this
      Agreement before its planned expiration, it shall cause the return of
      Consultant’s property to him or his designated representative within seven
      days.

              


      

       

      
        
          
          

        

        
          - 7
-

          
            

          

        

        
          
          

        

      

      


      Change
in Control

       

      
        	
                 
      

              	
                19.

              	
                The
      duties, responsibilities and obligations created by this Agreement shall
      not be affected by any material change in control of Carpenter that may
      occur after it is executed by Consultant.  Because it is an
      asset, Carpenter may, at its option, assign its rights under this
      Agreement to a buyer or successor as part of any transaction involving the
      conveyance of ownership or control of all or most of its business
      interests.  Consultant shall have no right whatsoever to object
      to this assignment.

              


      

       

      Notices

       

      
        	
                 
      

              	
                20.

              	
                Any
      notices required or permitted by this Agreement shall be made to Carpenter
      by prepaid certified mail, return receipt requested addressed to Carpenter
      Technology Corporation, ATTENTION: General Counsel, Post Office Box 14662,
      Reading, Pennsylvania 19612-4664 and if to the Consultant addressed to
      Sunil Y. Widge, PhD at the mailing address noted
  above.

              


      

       

      Assignment

       

      
        	
                 
      

              	
                21.

              	
                Except
      as provided in paragraph 19, this Agreement, and the rights and
      obligations created by it, shall not be transferred or assigned without
      first obtaining the written consent of the
  parties.

              


      

       

      Entire
Agreement

       

      
        	
                 
      

              	
                22.

              	
                This
      memorandum represents the parties’ entire agreement concerning the subject
      matter.  It supersedes all prior oral or written agreements
      between the parties concerning the subject matter.  Further,
      this Agreement may not be changed, modified or amended except in writing
      signed by all parties.

              


      

       

      Governing
Law

       

      
        	
                 
      

              	
                23.

              	
                This
      Agreement shall be governed and construed in accordance with the laws of
      the Commonwealth of Pennsylvania, without regard to its conflicts of law
      principles.

              


      

       

      
        
          
          

        

        
          - 8
-

          
            

          

        

        
          
          

        

         

      

      Dispute
Resolution

       

      
        	
                 
      

              	
                24.

              	
                Any
      disputes related to this Agreement shall be addressed and resolved by the
      parties in three stages, each of which must be pursued by the aggrieved
      party before advancing to the next level.  First, the offended
      party shall notify the other of the issue in writing and, unless otherwise
      agreed by the parties in writing, the parties shall, within ten days of
      the date of the notice, meet in person to discuss and resolve the
      issue.  If they fail to resolve the dispute following this
      negotiation, or if they fail to complete their negotiations within
      twenty-one days of the date of the notice, the parties shall jointly
      submit the issue to non-binding mediation.  The mediation shall
      be conducted in good faith, and it shall be held at a place selected by
      the mediator in Berks County, Pennsylvania.  If the parties are
      not able to reach agreement concerning the mediator to be engaged,
      Carpenter shall pay the Boston office of JAMS to select a mediator from a
      list of qualified mediators who live or maintain an office in
      Pennsylvania, Delaware or New Jersey.  The parties shall jointly
      pay the mediator’s fees and expenses.  Unless otherwise agreed
      by the parties, the mediation shall be concluded within ninety days of the
      notice seeking negotiation.  If the dispute is not resolved
      fully through mediation, the aggrieved party may file suit in a court of
      competent jurisdiction in Berks County, Pennsylvania, and the parties
      shall consent to the personal jurisdiction of that court for that
      purpose.

              


      

       

      EXECUTED AS A BINDING AND ENFORCEABLE
AGREEMENT IN BERKS COUNTY, PENNSYLVANIA this 9th day of
December 2008.

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	 	CARPENTER TECHNOLOGY
      CORPORATION	 
	 	 	 
	 	 	 
	
                                       

                                    	
                                      /s/
      Ann L. Stevens

                                    	 
	 	
                                      By:
      Ann L. Stevens

                                    	 
	 	
                                      Its
      Authorized Agent

                                    	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	
                                      /s/
      Sunil Y. Widge

                                    	 
	 	

                                      Sunil
      Y. Widge, Ph.D.

                                    	 


                            

                             

                             

                             

                            -
9 -