Executive Bonus Compensation Plan



 Exhibit 10(A) 
 EXECUTIVE BONUS COMPENSATION PLAN OF 
 CARPENTER TECHNOLOGY CORPORATION 
 EFFECTIVE JULY 1, 1989 
 As Restated
June 29, 2006 
 Further Amended August 24, 2006 
 To be Effective June 29, 2006 
 I. Statement and Purpose of Plan 
 The Executive Bonus Compensation Plan of Carpenter Technology Corporation provides additional compensation for selected employees based on the
Company’s financial performance. The combination of Base Pay and Executive Bonus Compensation is intended to provide a competitive cash-compensation opportunity to Participants. 
 II. Definitions 
 A. Base Pay means a Participant’s gross bi-weekly salary paid during the
Performance Period (including holidays, vacation and approved absence) plus the restoration of (1) any salary reduction resulting from any Company plan providing benefits authorized under sections 125, 401(a) or 409A of the Code and
(2) deductions from salary for jury duty pay, military pay or workers compensation payments. Eligible Base Pay during an approved absence is limited to one week per occurrence under this Plan. Excluded from Base Pay are any payments from a
third-party and cash payments from the Company not otherwise expressly included (e.g., moving allowance, mortgage interest differential allowance, imputed income, severance pay, etc.). 
 B. Board means the Board of Directors of the Company. 
 C. Code means the Internal Revenue Code of 1986, as amended. 
 D. Committee means a committee
of the Board of Directors selected to administer the Plan. With respect to Qualified Executive Bonus Compensation, the Committee shall be comprised exclusively of two or more members of the Board who are non-employee “outside directors”
within the meaning of section 162(m)(4)(C) of the Code and treasury regulation 1.162-27(e)(3) or designate a sub-committee that is so comprised. 
 E. Company means Carpenter Technology Corporation, a Delaware corporation, or any successor by merger, purchase or otherwise. 
 F. Determination Date means the date upon which the Committee determines Performance Goals and Executive Bonus Compensation opportunities. The Determination Date must be no later than (1) 90 days after the first day of the
Performance Period and (2) the date upon which 25% of the Performance Period has elapsed. 
 G. Disability means that the
Participant has been totally disabled by bodily injury or disease in the opinion of a qualified physician designated by the Company so as to be prevented thereby from engaging in any employment then available by the Company during the remainder of
the Performance Period. Disability does not include incapacity contracted, suffered or incurred while the Participant was engaged in, or resulted from the Participant’s having engaged in, a criminal enterprise. 
  

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 H. Executive Bonus Compensation means an amount that is payable to a Participant in the Plan based
on the achievement of specified Performance Goals. 
 I. Extraordinary Event means an extraordinary Company event as determined in
accordance with generally accepted accounting principles. 
 J. General Retirement Plan means the General Retirement Plan for
Employees of Carpenter Technology Corporation, effective January 1, 1950, as amended from time to time. 
 K. Participant means
any employee, who on or before April 1 of the first year of the Performance Period is also (1) designated by the Board to act as the President, Vice-Chairman, Chief Executive Officer, Chief Operating Officer or any category of
Vice-President of the Company, or (2) other key employee of the Company designated by the Committee to participate in the Plan. 
 L.
Performance Goal means an objective measure of the Company’s financial performance used to determine a Participant’s Executive Bonus Compensation that has been established by the Committee not later than the Determination Date.
Performance Goals may be measured on an absolute or relative basis. Relative performance may be measured against an external index, such as a group of peer companies, industry groups or a financial market index. Permissible Performance Goals may be
based upon: (1) the price of Common Stock, (2) the market share of the Company or its subsidiaries (or any business unit thereof), (3) sales or revenue by the Company or its subsidiaries (or any business unit thereof),
(4) earnings or diluted earnings per share of Common Stock, with or without net pension credit/expense, (5) return on shareholder equity of the Company, (6) costs of the Company or its subsidiaries (or any business unit thereof),
(7) cash flow of the Company or its subsidiaries (or any business unit thereof), (8) return on total assets of the Company or its subsidiaries (or any business unit thereof) (“ROA”), (9) return on invested capital of the
Company or its subsidiaries (or any business unit thereof), (10) return on net assets of the Company or its subsidiaries (or any business unit thereof) (“RONA”), (11) operating income of the Company or its subsidiaries (or any
business unit thereof), with or without net pension credit/expense, (12) net income of the Company or its subsidiaries (or any business unit thereof) with or without net pension credit/expense, (13) costs of capital of the Company or its
subsidiaries (or any business unit thereof), (14) earnings before interest and income taxes (“EBIT”) or earnings before interest, income taxes, depreciation and amortization (“EBITDA”) of the Company or its subsidiaries,
(15) economic profit of the Company or its subsidiaries, (16) economic value added, or (17) any other financial or other measurement deemed appropriate by the Committee, as it relates to the results of operations or other measurable
progress of the Company or its subsidiaries (or any business unit thereof). The Committee shall have discretion to determine the specific targets with respect to each of these categories of Performance Goals. 
 M. Performance Period means a period of one or more consecutive fiscal years, or portions thereof, of the Company as established by the Committee
during which the performance of the Company, any subsidiary or any department thereof, or any individual is measured for the 

  

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purpose of determining the extent to which a Performance Goal is achieved. Nothing in this Plan shall prevent the Committee from establishing a Performance
Period that commences prior to the termination of one or more other Performance Periods. 
 N. Plan means the Carpenter Technology
Corporation Executive Bonus Compensation Plan herein set forth, as amended from time to time. 
 O. Qualified Executive Bonus
Compensation means Executive Bonus Compensation that is intended to be “qualified performance-based compensation” under section 162(m) of the Code and treasury regulation 1.162-27(e), including any successor provision. 
 P. Retirement means a Participant’s termination of employment with eligibility to receive a monthly payment in the following month under
either the General Retirement Plan or the Supplemental Retirement Plan for Executives of Carpenter Technology Corporation (“SERP”). 
 III. Administration 
 The Committee shall have the authority, subject to the provisions herein, (A) to select employees
to participate in the Plan; (B) to establish and administer the Performance Goals and the Executive Bonus Compensation opportunities applicable to each Participant and certify whether the Performance Goals have been attained; (C) to
construe and interpret the Plan and any agreement or instrument entered into under or in connection with the Plan; (D) to establish, amend, and waive rules and regulations for the Plan’s administration; and (E) to make all other
determinations that may be necessary or advisable for the administration of the Plan. Any determination by the Committee pursuant to the Plan shall be final, binding and conclusive on all employees and Participants and anyone claiming under or
through any of them. 
 IV. Establishment of Performance Goals and Executive Bonus Compensation Opportunities 
 A. No later than the Determination Date for each Performance Period, the Committee shall establish in writing, the method for computing the amount of
Qualified Executive Bonus Compensation or percentage of Base Pay that may be payable under the Plan to each Participant in the Plan for such Performance Period if the Performance Goals established by the Committee for such Performance Period are
attained in whole or in part. The maximum amount that may be payable to any Participant in any calendar year under the Plan shall not exceed four (4) times the maximum deduction limit imposed by section 162(m) of the Code on compensation that
is not performance based. Such method shall be stated in terms of an objective formula or standard that precludes discretion to increase the amount of Qualified Executive Bonus Compensation or percentage of Base Pay that would otherwise be due upon
attainment of the goals and may be different for each Participant. Notwithstanding anything to the contrary contained herein, the Committee may, however, exercise negative discretion within the meaning of treasury regulation 1.162-27(e)(2)(iii)(A)
with respect to any Executive Bonus Compensation hereunder to reduce any amount that would otherwise be payable hereunder to the extent necessary to allow the Company to deduct that Executive Bonus Compensation despite the limits imposed by section
162(m) of the Code. 
  

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 B. No later than the Determination Date for each Performance Period, the Committee shall establish in
writing, the Performance Goals for such Performance Period. 
 V. Attainment of Performance Goals Required; Employment Status 
 Executive Bonus Compensation shall be paid under this Plan for any Performance Period only upon the attainment of the Performance Goals established by the
Committee with respect to such Performance Period. Executive Bonus Compensation shall also be contingent upon the Participant remaining employed by the Company or a subsidiary of the Company during such Performance Period, except as follows:

 A. A Participant may receive Executive Bonus Compensation which shall be paid at the same time as the Executive Bonus Compensation the
Participant would have received for such Performance Period had no termination of employment occurred, and which shall be equal to the amount of such Executive Bonus Compensation multiplied by a fraction the numerator of which is the number of full
and partial pay periods elapsed in such Performance Period prior to termination of employment and the denominator of which is the number of total pay periods in the Performance Period in the event termination of employment is by reason of the
Participant’s death, Disability or, unless otherwise determined by the Committee, Retirement. 
 B. A Participant whose employment
terminates prior to the end of a Performance Period for any reason not excepted above shall not be entitled to any Executive Bonus Compensation under the Plan for that Performance Period. 
 VI. Shareholder Approval and Committee Certification; Payment of Executive Bonus Compensation 
 A. Unless the Committee provides otherwise, (1) earned Executive Bonus Compensation shall be paid no later than 2 1/2 months after the end of the Performance Period with respect to which such Executive Bonus Compensation is earned,
and (2) such payment shall be made in cash (subject to any payroll tax withholding the Company may determine applies). 
 B.
Payment of any Qualified Executive Bonus Compensation under this Plan shall be contingent upon an affirmative vote of the shareholders of at least a majority of the votes cast (including abstentions) approving the Plan, including the basis upon
which Performance Goals may be established under Section II(L) hereof, sufficient to satisfy the applicable requirements of Code section 162(m) and the regulations promulgated thereunder. Unless and until such shareholder approval is obtained, no
Qualified Executive Bonus Compensation shall be paid pursuant to this Plan. 
 C. Payment of any Qualified Executive Bonus Compensation under
this Plan shall be contingent upon the Committee’s certifying in writing that the Performance Goals and any other material terms applicable to such Qualified Executive Bonus Compensation were in fact satisfied, in accordance with applicable
treasury regulations under Code section 162(m). Unless and until the Committee so certifies, such Qualified Executive Bonus Compensation shall not be paid. Notwithstanding anything to the contrary herein, the Committee may make appropriate
adjustments when certifying the attainment of Performance Goals to reflect the occurrence of 

  

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any Extraordinary Event during the Performance Period to the extent necessary to ensure that the determination of whether applicable Performance Goals were
met is consistent with the basis upon which such Performance Goals were established. 
 D. Every fifth year following shareholder approval of
this Plan, or more frequently if necessary for purposes of Code section 162(m), this Plan shall be resubmitted to shareholders for their reapproval for the relevant Performance Period(s). 
 VII. Amendment, Termination and Term of Plan 
 The
Board may amend, modify or terminate this Plan at any time. The Plan will remain in effect until terminated by the Board. 
 VIII. Interpretation and
Construction 
 A. No provision of the Plan, nor the selection of any Participant, shall constitute an employment agreement or affect the
duration of any Participant’s employment, which shall remain “employment at will” unless an employment agreement between the Company and the Participant provides otherwise. Both the Participant and the Company shall remain free to
terminate employment at any time to the same extent as if the Plan had not been adopted. 
 B. Any provision of the Plan that could be
construed to prevent Qualified Executive Bonus Compensation under the Plan from qualifying for deductibility under section 162(m) of the Code or treasury regulation 1.162-27(e) shall be administered, interpreted and construed to carry out such
intention and any provision that cannot be so administered, interpreted and construed shall to that extent be disregarded. 
 IX. Governing Law

 The terms of this Plan shall be governed by the laws of the Commonwealth of Pennsylvania, without reference to the conflicts of laws
principles thereof. 
  

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