Document:

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                                                                    Exhibit 10 H

                       CARPENTER TECHNOLOGY CORPORATION
                       STOCK-BASED COMPENSATION PLAN FOR
                            NON-EMPLOYEE DIRECTORS
                          Effective October 20, 1997
                        As last amended April 26, 2001

1.   Purpose:

     The purposes of the Plan are to attract and retain the services of
experienced and knowledgeable non-employee Directors, to encourage Eligible
Directors of Carpenter Technology Corporation (the "Company") to acquire a
proprietary and vested interest in the growth and performance of the Company,
and to generate an increased incentive for Directors to contribute to the
Company's future success and prosperity, thus enhancing the value of the Company
for the benefit of its stockholders.

  This Plan is an amendment and restatement of the Carpenter Technology
Corporation Non-Qualified Stock Option Plan for Non-Employee Directors as
adopted effective August 1, 1990 and amended October 23, 1995 and October 20,
1997. The rights of any Director whose service as a Director ended on or before
April 25, 2001 shall be governed by the terms of the Plan as in effect when that
Director's service ended.

2.   Definitions:

     As used in the Plan, the following terms shall have the meanings set forth
below:

     a)   "Annual Retainer" shall mean base compensation for services as a
Director.  Annual Retainer shall not include meeting fees, committee service
fees, if any, expense allowances or reimbursements or any other additional
compensation for services as a Director.

     b)   "Beneficiary" means the person that the Eligible Director designates
to receive any unpaid portion of the Eligible Director's Account should the
Eligible Director's death occur before the Eligible Director receives the entire
balance to the credit of such Eligible Director's Account.  If the Eligible
Director does not designate a Beneficiary, the Beneficiary shall be the person's
spouse if the person is married at the time of death, or the Eligible Director's
estate if unmarried at the time of the person's death.

     c)   "Board" shall mean the Board of Directors of the Company.

     d)   "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.

     e)   "Common Stock" shall mean the Common Stock, $5.00 par value, of the
Company.

     f)   "Company" shall mean Carpenter Technology Corporation.

     g)   "Election Date" shall mean with respect to an Option hereunder the
date of the appointment, election, or re-election of the Eligible Director that
prompted the grant of such Option.

     h)   "Eligible Director" shall mean each Director of the Company who is not
an employee of the Company or any of the Company's subsidiaries (as defined in
Section 425 (f) of the Code), or who is not otherwise excluded from
participation by agreement.

     i)   "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

     j)   "Fair Market Value" shall mean with respect to the Common Stock (I)
the last sale price of the Common Stock on the date on which such value is
determined, as reported on the consolidated tape of New York Stock Exchange
issues or, if there shall be no trades on such date, on the date nearest
preceding such date; (ii) if the Common Stock is not then listed for trading on
the New York Stock

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Exchange, the last sale price of the Common Stock on the date of which such
value is determined, as reported on another recognized securities exchange or on
the NASDAQ National Market System if the Common Stock shall then be listed and
traded upon such exchange or system or, if there shall be no trades on such
date, on the date nearest preceding such date; or (iii) the mean between the bid
and asked quotations for such stock on such date (as reported by a recognized
stock quotation services) or, in the event that there shall be no bid or asked
quotations on such date, then upon the basis of the mean between the bid and
asked quotations on the date nearest preceding such date.

     k)   "Grant Date" shall mean with respect to an Option hereunder the date
upon which such Option is granted.

     l)   "Option" shall mean any right granted to an Eligible Director allowing
such Eligible Director to purchase Shares at such price or prices and during
such period or periods as set forth under the Plan.  All Options shall be non-
qualified options not entitled to special tax treatment under Section 422A of
the Code.

     m)   "Option Letter" shall mean a written instrument evidencing an Option
granted hereunder and signed by an authorized representative of the Company.

     n)   "Performance Unit" shall mean the right to receive, following
termination of service as an Eligible Director, one share of Common Stock.
Performance Units will be awarded, if at all, based upon the attainment of a
specified goal ("Performance Goal") by the end of a period specified by the
Board based upon one or more of the following criteria: (I) price of the Common
Stock, (ii) market share of the Company, (iii) sales by the Company, (iv)
earnings per share of the Common Stock, (v) return on shareholder equity of the
Company, or (vi) costs of the Company. Such goal shall be pre-determined by the
Board at a time when it is substantially uncertain that the Performance Goals
will be met and subject to verification by the Company's independent auditors
using generally accepted accounting principles, consistently applied. For
purposes of this Plan, fractional Performance Units, measured to the nearest
four decimal places, may be credited.

     o)   "Release Date" shall mean the fifth business day occurring after the
Company's earnings release for the preceding fiscal period.  In calculating the
Release Date, the day of an earnings release shall be counted, if the earnings
release is made before the opening of trading on the New York Stock Exchange and
shall not be counted if such release is made after the opening of trading.

     p)   "Retirement" shall mean Retirement from the Board with a minimum of
three years service as an Eligible Director.

     q)   "SAR" or "Stock Appreciation Right" shall mean the right granted to an
Eligible Director to receive the increase in the Fair Market Value of a
specified number of Shares.

     r)   "Shares" shall mean Shares of Common Stock.

     s)   "Stock Unit" shall mean the right to receive, following both service
as an Eligible Director for one year following the grant of the Stock Unit and
termination of service as an Eligible Director, one share of Common Stock.  For
purposes of this Plan, fractional Stock Units, measured to the nearest four
decimal places, may be credited.

     t)   "Unit" shall mean a Performance Unit, a Stock Unit, or both, as
required by context.

     u)   "Window" shall mean a 30 calendar-day period of time beginning on a
Release Date.

3.   Administration:

     The Plan shall be administered by the Company.  Subject to the terms of the
Plan, the Board shall have the power to interpret the provisions and supervise
the administration of the Plan.

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4.   Shares Subject to the Plan:

     a)   Total Number.  Subject to adjustment as provided in this Section, the
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total number of Shares as to which Options may be granted, or Performance Units,
Stock Units and SARs awarded shall be 329,000.  Any Shares issued hereunder may
consist, in whole or in part, of authorized and unissued Shares or treasury
Shares.

     b)   Reduction of Shares Available.
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          (i)    The grant of an Option will reduce the Shares as to which
Options may be granted by the number of Shares subject to such Option.

          (ii)   Any shares issued by the Company through the assumption or
substitution of outstanding grants from an acquired company shall not reduce the
Shares available for grants under the Plan.

          (iii)  The grant of Performance Units or Stock Units will reduce the
number of Shares available for further grants by the number of Units granted.

          (iv)   The exercise of an SAR payable in Shares will reduce the number
of Shares that may be issued upon subsequent exercise of SARs.

     c)   Increase of Shares Available.  The lapse, cancellation or other
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termination of an Option, Unit or SAR that has not been fully exercised or paid
shall increase the available Shares for such Options, Units or SARs by the
number of Shares that have not been issued upon exercise of such Option or SAR
or payment of such Unit.

     d)   Other Adjustments.  The total number and kind of Shares available for
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Options, Units or SARs under the Plan or which may be allocated to any one
Eligible Director, the number and kind of Shares subject to outstanding Options,
Units or SARs, and the exercise price for such Options or SARs or the value of
Units shall be appropriately adjusted by the Board for any increase or decrease
in the number of outstanding Shares resulting from a stock dividend,
subdivision, combination of Shares, reclassification, or other change in
corporate structure affecting the Shares or for any conversion of the Shares
into or exchange of the Shares for other Shares as a result of any merger or
consolidation (including a sale of assets) or other recapitalization as may be
necessary to maintain the proportionate interest of the Option, SAR or Unit
holder.

5.   Initial Options:

     Initial Options shall be granted to Eligible Directors as follows:

     a)   Initial Grant.  Each Eligible Director who has not previously received
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a grant under this Plan shall be granted an Option to acquire 2,000 Shares as
follows: (1) on the Election Date in the event that the Election Date occurs
during a Window, or (2) on the next Release Date in the event that the Election
Date does not occur during the Window.

     b)   Terms and Conditions.  Any Option granted under this Section 5 shall
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be subject to the following terms and conditions:

          (i)    Option Price.  The purchase price per Share purchasable under
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an Option granted under Section 5 shall be 100% of the Fair Market Value of a
Share on the Grant Date.

          (ii)   Exercisability.  Unless otherwise provided by this Plan, an
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Option granted under Section 5 shall become exercisable in whole or in part one
year from the Grant Date.

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 6.  Annual Options:

     Annual Options shall be granted to Eligible Directors as follows:

     a)   Eligible Directors.  Each Eligible Director on or after the Effective
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Date of the Plan shall be granted an Option to acquire 2,000 Shares immediately
after the annual meeting of the Company's stockholders.

     b)   Terms and Conditions.  Any Option granted under this Section 6 shall
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be subject to the following terms and conditions:

          (i)  Option Price.  The purchase price per Share purchasable under an
               ------------
Option shall be 100% of the Fair Market Value of a Share on the Grant Date.

          (ii) Exercisability.  Unless otherwise provided by this Plan, an
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Option granted under this Section 6 shall become exercisable in whole or in part
one year from the Grant Date.

7.   General Terms:

     The following provisions shall apply to any Option:

     a)   Option Period.  Each Option shall expire ten years from its Grant
          -------------
Date, subject to earlier termination as hereinafter provided.

     b)   Each Option granted under this Plan shall become exercisable by the
Eligible Director only after the completion of one year of Board service
immediately following the Grant Date; provided, however, that for Annual Options
under Section 6, uninterrupted Board service by the Eligible Director until the
annual meeting of the Company's stockholders next following the Grant Date shall
be deemed completion of one year of Board service. Exercise of any or all prior
existing Options shall not be required.

     c)   No Option under this Plan may be transferable by the Eligible Director
except by will or the laws of descent and distribution. In the event of the
death of the Eligible Director more than one year after the Grant Date and not
more than three months after the termination of the Eligible Director's Board
service, the Option may be transferred to the Eligible Director's personal
representative, heirs or legatees ("Transferee") and may be exercised by the
Transferee before the earlier of (i) the expiration of one year from the date of
the death of the Eligible Director or (ii) the expiration of ten years from the
Grant Date. In the event of the Retirement from Board service of an Eligible
Director, an Option may be exercised prior to its expiration during the five
year period beginning with the date of Retirement; provided, however, that in
the event of a retiree's death during such five year period, unexercised Options
may be exercised by the Transferee before the earlier of either items (i) or
(ii) of this Section 7(c). In all other cases of termination of Board service of
an Eligible Director except for removal for cause, the Option, if otherwise
exercisable by the Eligible Director at the time of such termination, may be
exercised within three months after such termination. In the event of removal
for cause, all existing Options shall be of no force and effect.

     d)   Method of Exercise.  Any Option may be exercised by the Eligible
          ------------------
Director in whole or in part at such time or times and by such methods as the
Board may specify.  The applicable Option Letter may provide that the Eligible
Director may make payment of the Option price in cash, Shares, held for at least
six months, or such other consideration as the Board may specify, or any
combination thereof, having a Fair Market Value on the exercise date equal to
the total Option price.

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8.   Stock Units:

     a)  Grant of Stock Units.  On the date of the annual meeting of
         --------------------
  stockholders, each Eligible Director shall be awarded each year a number of
  Stock Units determined by dividing 50% of the Director's Annual Retainer by
  the Fair Market Value on that date.

     b)  Election of Stock Units.  By written election filed with the Board
         -----------------------
before the end of any calendar year, an Eligible Director may elect to increase
the percentage in a) above to 100%, and thereby have the entire Director's
Annual Retainer payable in each calendar year beginning after the date of the
election awarded in Stock Units.  An election under this Section 8 b) shall
remain in effect until changed, in writing, by the Director.  Any such change
shall be effective in the first calendar year beginning after the date of the
written notice of change.

     c)  Forfeiture of Stock Units.   Stock Units awarded at an annual meeting
         -------------------------
of stockholders will be forfeited if the Director terminates service as a
Director for any reason other than Board approved Retirement, Board determined
disability, or death, before the immediately following annual meeting of
stockholders.

     d)  Stock Units in Lieu of Pension.  Effective October 20, 1997, the
         ------------------------------
present value on that date of any Eligible Director's accrued pension benefit
under the Carpenter Technology Corporation Director Retirement Plan, excluding
any Eligible Director who is required to retire on or before the 1998 Annual
Meeting of Stockholders, shall be converted to Stock Units. The number of Stock
Units to be awarded under this Section 8 d) shall be determined by dividing
average of the Fair Market Value on the last ten business days of October 1997
into the present value of each Eligible Director's accrued pension. The present
value will be determined using the UP-84 mortality table and a 7.5% interest
rate. Stock Units awarded under this Section 8 d) shall not be subject to the
vesting schedule of Section 8 c). Instead, such Stock Units will be payable upon
the earlier of the Director's Retirement, Board determined disability, or death.

9.   Performance Units:

     a)   Grant of Performance Units.  Performance Units may be granted annually
          --------------------------
to Eligible Directors in such amounts and subject to such Performance Goals as
shall be determined by the Board. Each Performance Unit shall have an initial
value equal to the Fair Market Value of a Share (or similar fractional Share) on
the Grant Date. The Board shall set one or more Performance Goals as described
in Section 2(n) of this Plan. The extent to which those Performance Goals are
met will determine the number and value of Performance Units that will be paid
out to the Eligible Director.

     b)   Form and Timing of Payment of Performance Units.  Payment of earned
          -----------------------------------------------
Performance Units shall be made as soon as practicable following the close of
the applicable period in a manner designated by the Board, in its sole
discretion. The Board, in its sole discretion, may pay earned Performance Units
in the form of cash or in Shares (or in a combination thereof) that have an
aggregate Fair Market Value equal to the value of the earned Performance Units
at the close of the applicable period. Such Shares may be granted subject to any
restrictions deemed appropriate by the Board.

     c)   Dividends on Earned but Undistributed Shares.  Eligible Directors
          --------------------------------------------
shall be entitled to receive any dividends declared with respect to Shares that
have been earned in connection with grants of Performance Units, but not yet
distributed to Eligible Directors.

10.  Nontransferability of Units:

     Neither Performance Units nor Stock Units may be sold, transferred,
pledged, assigned or otherwise alienated, other than by will or by the laws of
descent and distribution.

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11.  Dividend Equivalents:

     An Eligible Director who has been awarded Stock Units will also be awarded
additional Units, determined on a quarterly basis.  The number of additional
Units to be awarded will be determined by multiplying the quarterly dividend per
Share for the immediately preceding quarter by the number of Units credited to
the Director on the first day of that calendar quarter and dividing the result
by the Fair Market Value on the last business day of that quarter.

12.  Payment of Units:

     a)   Following an Eligible Director's Retirement, or termination of service
on account of disability, the Director shall be paid a number of Shares equal to
the number of whole Units credited to the Director, with cash paid in lieu of
any fractional Units. The amount of cash to be paid will be based on the Fair
Market Value on the date of the Director's termination of service as a Director.
In the case of the Director's death, the payment will be made to the Director's
Beneficiary.

     b)   Manner of Payment.
          -----------------

          (1)  An Eligible Director may elect to receive Shares in payment of
Units credited to the Director's account in a lump sum or in annual installments
payable over either ten or fifteen years.

          (2)  The election shall be made by the Director, in writing, filed
with the Board no later than the end of the calendar year immediately preceding
the Director's termination of service. If no election is made, the Director's
Units will be paid in a lump sum as soon as is practicable following the
Director's termination of service.

          (3)  If a Director elects installment payments, the amount of each
annual installment will be the number of Units to the Director's credit at the
end of the immediately preceding calendar year multiplied by a fraction the
numerator of which is one and the denominator of which is the number of years
remaining in the original installment period. Dividend equivalents will continue
to be credited to the Director's account through the end of the calendar quarter
immediately preceding the final installment.

          (4)  An Eligible Director who has elected installment payment of Units
may, with the consent of the Board, which may be given or denied in the Board's
sole discretion, change that election and receive a lump sum distribution of all
remaining Units credited to the Director's account.

13.  Stock Appreciation Rights or SARs:

     SARs may be granted by the Board from time to time, subject to the
following provisions:

     a)   The Board may grant a SAR either in connection with the grant of an
Option ("Tandem SAR") or independent of the grant of an Option ("Freestanding
SAR"). The grant of any Freestanding SAR must be related to the attainment of
Performance Goals under Section 9. Each Tandem SAR shall be exercisable only
with the exercise and surrender of the related Option or portion thereof and
shall entitle the Eligible Director to receive the excess of the Fair Market
Value of the Shares on the date the Tandem SAR is exercised over the option
price under the related Option. The excess is hereafter called the "Spread" for
both Tandem SARs and Freestanding SARs. If the Eligible Director elects instead
to exercise the related Option, the Tandem SAR shall be canceled automatically.

     b)   A Tandem SAR shall be exercisable only to the extent and at the same
time that the related Option is exercisable.

     c)   A Freestanding SAR shall be exercisable pursuant to the terms and
conditions that are specified in the agreement in which the Freestanding SAR is
granted.

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     d)   Upon the exercise of a SAR, the Company shall pay to the Eligible
Director an amount equivalent to the spread (less any applicable withholding
taxes) in cash, or in Shares, or a combination of both, as the Board shall
determine. Such determination may be made at the time of the granting of the
SAR. No fractional Shares of Stock shall be issued and the Board shall determine
whether cash shall be given in lieu of such fractional Share or whether such
fractional Share shall be eliminated.

     e)   A Tandem SAR shall terminate and may no longer be exercised upon the
termination or expiration of the related Option.

     f)   Income attributable to the exercise of a SAR shall not be included in
          the calculation of any other benefits payable at any time by reason of
          the Eligible Director's service to the Company.

     g)   No SAR shall be transferable by the Eligible Director.

     h)   The agreement under which a SAR is granted shall set forth the extent
to which the Eligible Director shall have the right to exercise the SAR
following termination of the Eligible Director's service as a Director. Such
provisions shall be determined at the sole discretion of the Board and need not
be uniform among all SARs issued pursuant to this Section 13, and may reflect
distinctions based on the reasons for termination of service.

     i)   The Board may only grant Freestanding SARs pursuant to the achievement
of Performance Goals and it may impose additional restrictions upon the vesting
and exercise of such SARs on the attainment of Performance Goals. For all
purposes under this Plan, "Performance Goals" means goals that must be met by
the end of a period specified by the Board based upon one or more of the
following criteria: (i) price of the Common Stock, (ii) market share of the
Company, (iii) sales by the Company, (iv) earnings per share of the Common
Stock, (v) return on shareholder equity of the Company, or (vi) costs of the
Company.

14.  Change in Control:

     a)   Notwithstanding anything in this Plan to the contrary, in the event of
a Change in Control of the Company, the Options granted under Sections 5 and 6
and any SARs granted under Section 13 shall vest and become immediately
exercisable and any unvested Stock Units granted under Section 8 shall vest.

     b)   For purposes of this Plan, "Change in Control of the Company" means:

          (1)  The acquisition by any individual, entity or group [within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act] (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then-outstanding shares of common
stock of the Company (the "Outstanding Company Common Stock") or (B) the
combined voting power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); provided, however, that, for purposes of this
Section 14(b), the following acquisitions shall not constitute a Change in
Control: (i) any acquisition directly from the Company, (ii) any acquisition by
the Company, (iii) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any affiliated company or (iv)
any acquisition by any corporation pursuant to a transaction that complies with
Sections 14(b)(3)(A), 14(b)(3)(B) and 14(b)(3)(C);

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          (2)  individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a majority of the
Board; provided, however, that any individual becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest with respect to the election
or removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;

          (3)  consummation of a reorganization, merger, consolidation or sale
or other disposition of all or substantially all of the assets of the Company or
the acquisition of the assets or stock of another entity (a "Business
Combination"), in each case, unless, following such Business Combination, (A)
all or substantially all of the individuals and entities that were the
beneficial owners of the Outstanding Company Common Stock and the Outstanding
Company Voting Securities immediately prior to such Business Combination
beneficially own, directly or indirectly, more than 50% of 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, as
the case may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation that, as a result of such
transaction, owns the Company or all or substantially all of the Company's
assets either directly or through one or more subsidiaries) in substantially the
same proportions as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then-outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination, and (C) at least
a majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement or of the action of the Board
providing for such Business Combination; or

          (4)  approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.

     c)   Payment for Performance Units.  Within 30 days following a Change in
          -----------------------------
Control of the Company, as defined in Section 14(b) of this Plan, there shall be
paid in cash to Eligible Directors holding Performance Units a pro rata amount
based upon the assumed achievement of all relevant Performance Goals at target
levels, and upon the length of time with the performance period that has elapsed
before the Change in Control of the Company; provided, however, that if the
Board determines that actual performance to the date of the Change in Control of
the Company exceeds targeted levels, the prorated payouts shall be made using
the actual performance data; and provided further, that there shall not be an
accelerated payout with respect to Performance Units that qualify as "Derivative
Securities" under Section 16 of the Exchange Act that were granted less than six
months before the Change in Control of the Company.

                                       8
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15.  Amendments and Termination:

     a)   Board Authority.  The Board may amend or terminate the Plan at any
          ---------------
time; provided that no amendment may be made (i) without the appropriate
approval of the Company's stockholders if such approval is necessary to comply
with any tax or other regulatory requirement, including any stockholder approval
required as a condition to exemptive relief under Section 16(b) of the Exchange
Act; (ii) which would adversely impair or affect, without the consent of the
Eligible Director, any rights or obligations under any Option, Unit or SAR
theretofore granted to such Eligible Director; or (iii) more than once every six
months with respect to the timing, amount and price of Options or SARs to be
awarded to Eligible Directors, other than to comport with changes to the Code,
the Employee Retirement Income Security Act, or the rules thereunder.

     b)   Prior Stockholder and Eligible Director Approval.  Anything herein to
          ------------------------------------------------
the contrary notwithstanding, in the event that amendments to the Plan are
required in order that the Plan or any other stock-based compensation plan of
the Company comply with the requirements of Rule 16b-3 issued under the Exchange
Act, as amended from time to time, or any successor rules promulgated by the
Securities and Exchange Commission related to the treatment of benefit and
compensation plans under Section 16 of the Exchange Act, the Board is authorized
to make such amendments without the consent of Eligible Directors or the
stockholders of the Company.

16.  General Provisions:

     a)   Compliance Regulations.  All certificates for Shares delivered under
          ----------------------
this Plan pursuant to any Option, Unit or SAR shall be subject to such stock-
transfer orders and other restrictions as the Board may deem advisable under the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which the Shares are then listed, and any
applicable federal or state securities law, and the Board may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.  The Company shall not be required to issue or deliver any Shares
under the Plan prior to the completion of any registration or qualification of
such Shares under any federal or state law, or under any ruling or regulations
of any governmental body or national securities exchange that the Board in its
sole discretion shall deem to be necessary or appropriate.

     b)   Other Plans.  Nothing contained in this Plan shall prevent the Board
          -----------
from adopting other or additional compensation arrangements, subject to
stockholder approval if such approval is required by applicable law or the rules
of any stock exchange on which the Common Stock is then listed; and such
arrangements may be either generally applicable or applicable only in specific
cases.

     c)   Governing Law.  The validity, construction, and effect of the Plan and
          -------------
any rules and regulations relating to the Plan shall be determined in accordance
with the laws of the State of Delaware and applicable federal law.

     d)   Conformity With Law.  If any provision of this Plan is or becomes or
          -------------------
is deemed invalid, illegal, or unenforceable in any jurisdiction, or would
disqualify the Plan or any Option under any law deemed applicable by the Board,
such provision shall be construed or deemed amended in such jurisdiction to
conform to applicable laws or if it cannot be construed or deemed amended
without, in the determination of the Board, materially altering the intent of
the Plan, it shall be stricken and the remainder of the Plan shall remain in
full force and effect.

     e)   Insufficient Shares.  In the event there are insufficient Shares
          -------------------
remaining to satisfy all of the grants of Options, Units or SARs made on the
same day, such Options, Units or SARs shall be reduced pro-rata.

                                       9
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17.  Effective Date and Termination:

     The Plan's original effective date, as approved by the Board, was August 9,
1990, and amended by the Board on August 10, 1995; and ratified by the
stockholders at the Annual Meeting held October 23, 1995. The effective date of
this amendment is April 26, 2001, while the effective date of the previous
restatement was October 20, 1997, as ratified by the Company's stockholders at
the Annual Meeting held on October 20, 1997. The Plan will terminate upon the
date on which all outstanding Options have expired or terminated, and all
outstanding Units and SARs have been paid or otherwise provided for.

                                       10<PAGE>

                                                                    Exhibit 10 L

                       CARPENTER TECHNOLOGY CORPORATION

                  STOCK-BASED INCENTIVE COMPENSATION PLAN FOR
                          OFFICERS AND KEY EMPLOYEES

                Adopted June 22, 1993, Restated June 27, 1996,
                      And as last Amended April 26, 2001

1.   Background and Purpose.

          The Plan was previously adopted on June 22, 1993 and its purposes were
to attract, retain and motivate key employees of Carpenter Technology
Corporation and its wholly owned subsidiaries, to encourage stock ownership by
such employees by providing them with a means to acquire a proprietary interest
or to increase their proprietary interest in the success of Carpenter Technology
Corporation and its subsidiaries and to provide a greater community of interest
between such employees and the stockholders of Carpenter Technology Corporation.
For purposes of this Plan, Carpenter Technology Corporation and each subsidiary
described in Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code") shall be referred to collectively as the "Corporation".  The Plan
has been amended and restated [in 1996] to create a new category of awards,
which are referred to as Performance Units and Performance Shares, with the
intention that these awards will be directly related to the Corporation's
performance.

2.   Administration.

          The Board of Directors of Carpenter Technology Corporation (the
"Board") shall be responsible for the operation of the Plan.  The Board is
authorized, subject to the provisions of the Plan, from time to time to (i)
select employees to receive awards under the Plan, (ii) determine the type and
amount of awards to be granted to participants, (iii) determine the terms and
conditions of such awards and the terms of agreements entered into with
participants, (iv) establish such rules and regulations and to appoint such
agents as it deems appropriate for the proper administration of the Plan, and
(v) make such determinations under, and such interpretations of, and to take
such steps in connection with, the Plan or the awards granted hereunder as it
deems necessary or advisable.  Any questions of interpretation determined by the
Board shall be final and binding upon all persons.  The Board may delegate any
or all of these powers to the Human Resources Committee ("Committee") of the
Board, consisting of at least two directors, each of whom shall be "non-employee
directors" as defined in Rule 16b-3 promulgated by the U.S. Securities and
Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and each of whom shall also be "outside directors"
as defined in Treas. Reg. 1.162-27(e)(3).  In particular, the Board shall
delegate to the Committee all powers with respect to the granting of awards that
are intended to comply with the requirements of Rule 16b-3 of the Exchange Act
and section 162(m) of the Code that would exempt such awards from being subject
to short-swing liability and being subject to the annual limit on the deduction
of compensation.

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3.   Participants.

          The class of employees eligible to receive awards under the Plan shall
be limited to officers and key employees of the Corporation.  Participants in
the Plan will consist of such officers or key employees as the Board in its sole
discretion may from time to time designate.  The Board's designation of a
Participant at any time to receive benefits under the Plan shall not obligate it
to designate such person to receive benefits at any other time.  The Board shall
consider such factors as it deems pertinent in selecting Participants and in
determining the type and amount of awards granted hereunder.  As used herein,
"Participant" shall refer to an employee designated by the Board who has
received an award under the Plan.  Only the Committee may designate which
Participants shall receive awards of Performance Units and Performance Shares
under Section 10 of the Plan.

4.   Types of Awards.

          Awards under the Plan will consist of (i) incentive stock options
("ISOs" or individually an "ISO") intended to be options qualifying under
Section 422 of the Code; (ii) non-qualified stock options ("NQSOs" or
individually a "NQSO") intended to be non-statutory options not qualifying under
Section 422 or any other section of the Code; (iii) stock appreciation rights
("SARs" or individually a "SAR") intended to provide a participant with the
right to receive the increase in the fair market value of a specified number of
Shares, as defined in Section 5; (iv) shares of restricted stock ("Restricted
Stock") intended to give a participant the right to receive a specified number
of Shares without payment upon the occurrence of certain events; and (v)
Performance Shares or Performance Units intended to give a participant the right
to receive a specified number of Shares or unit equivalencies of Shares without
payment when the Corporation attains certain pre-established Performance Goals.
The Board may permit or require a participant to defer such participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due such participant resulting from awards granted under the Plan.  If any such
deferral is required or permitted, the Board shall, in its sole discretion,
establish rules and procedures for such deferrals.

5.   Shares Reserved Under the Plan.

          Subject to the provisions of Section12, the number of shares of Common
Stock of Carpenter Technology Corporation ("Stock") available for awards under
this Plan, which may consist of authorized but unissued shares or issued shares
reacquired by Carpenter Technology Corporation or a combination thereof, is
1,800,000 (such shares being referred to herein as "Shares") plus previously
ungranted shares and lapsed grants that remain from previous shareholder
authorizations; provided, however, that in no event shall the cumulative number
                --------
of Shares to be issued as ISOs granted under Section 6 exceed 500,000, nor shall
the cumulative number of Shares to be issued as Restricted Stock and Performance
Units/Shares granted under Sections 7 and 9 respectively exceed 750,000.  If any
award granted under this Plan is canceled, terminates, expires, or lapses for
any reason (with the exception of the termination of a Tandem SAR upon exercise
of the related Option, or the termination of a

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related Option upon exercise of the corresponding Tandem SAR), any Shares
subject to such award shall be available for award under the Plan.

6.   Options.

          ISOs and NQSOs (collectively "Options") may be granted by the Board
from time to time, subject to the following provisions:

          (a)  Except as otherwise determined by the Board, each Option granted
under this Plan shall become exercisable by a participant only after completion
of one year of employment immediately following the date the Option is granted
(the "Date of Grant").  Exercise of any or all prior existing Options shall not
be required.  Each agreement entered into between the participant and the
Corporation shall specify (i) when an Option may be exercised, (ii) the terms
and conditions applicable thereto, and (iii) whether the Option is an ISO or an
NQSO.  In no event, however, shall an Option granted under this Plan expire more
than ten years from the Date of Grant.

          (b)  Each Option shall specify the amount per share a participant must
pay to the Corporation to exercise the Option (the "option price").  The option
price of an Option shall be determined by the Board but shall not be less than
the fair market value of a share of Stock on the Date of Grant.  For purposes of
this Plan, the term "fair market value" shall mean the closing price of the
Stock on the New York Stock Exchange on the date in question, or, in the absence
of a closing price on such date, the closing price on the last trading day
preceding the Date of Grant, as reflected on the consolidated tape of New York
Stock Exchange-Composite Transactions.

          (c)  Except as permitted in the immediately following sentence, no
Option granted under this Plan may be transferable by the participant except by
will or the laws of descent and distribution and no Option may be exercised
during the lifetime of a participant except by that participant. Notwithstanding
the aforementioned, a NQSO Optionee may transfer a NQSO to his or her spouse,
parents, siblings, children or grandchildren (in each case, natural or adopted),
any trust for his or her benefit or the benefit of his or her spouse, parents,
siblings, children or grandchildren (in each case, natural or adopted)
(collectively, a "Permitted Transferee"), or any corporation or partnership in
which the direct and beneficial owner of all of the equity interest in such
corporation or partnership is such NQSO Optionee or any Permitted Transferee (or
any trust for the benefit of such persons).

Unless otherwise provided in the participant's agreement, the following exercise
periods will apply in the case of a separation from employment.  In the event of
the death of the participant more than one year after the Date of Grant and not
more than three months after the termination of the participant's employment by
the Corporation, an Option may be transferred to the participant's personal
representative, heirs or legatees ("transferee") and may be exercised by the
transferee before the earlier to occur of the expiration of (i) one year from
the date of the death of the participant or (ii) the term of the Option as
specified in the agreement with the participant.  In the event of a
participant's separation from service with the Corporation as a result of
Retirement [as defined in Section 9(f) of this Plan] or due to "disability"
[within the

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meaning of Section 422(c)(6) of the Code], any outstanding Option will continue
to be exercisable during the original term of the grant.  If the participant
dies within such period (following Retirement or "disability"), a transferee may
exercise any unexpired Option before the expiration of the earlier to occur of
(i) or (ii) of this Section 6(c).   In the event of a participant's separation
from service with the Corporation other than by death, disability or Retirement,
an Option must be exercised prior to its expiration during the three month
period beginning on the last day of employment.

The agreement under which an Option is granted shall set forth the extent to
which the participant shall have the right to exercise the Option following
termination of the participant's employment. Such provisions shall be determined
at the sole discretion of the Board and need not be uniform among all Options
issued pursuant to this Section 6, and may reflect distinctions based on the
reasons for termination of employment. In any case where the terms governing an
Option that is an ISO grant a longer exercise period than that permitted under
Section 422 of the Code, the Option will continue to be exercisable during the
remainder of the period as a NQSO.

          (d)  Each Option shall be exercisable for the full amount or any part
thereof, including a partial exercise from time to time; provided, however, that
                                                         --------
in no event shall ISOs granted to a participant be first exercisable in any one
calendar year with respect to Shares having an aggregate fair market value,
determined as of the Date of Grant, of more than $100,000.  The option price for
each exercised Option shall be paid in full at the time of such exercise.  The
option price may be paid in cash or shares of Stock, the value of which shall be
the fair market value on the date of the exercise of the Option, as determined
in Section 6(b) of this Plan; provided, however, that any such shares must have
                              --------
been held by a participant for a period of at least six months.  An Option may
also be exercised by delivery of the Option to a registered broker/dealer with
instructions to exercise the Option and sell a sufficient number of the shares
of Stock acquired on exercise to pay the option price and, if not previously
paid, any required tax withholdings.  In any event, the participant may elect to
deliver shares of Stock to the Company to allow any minimum tax withholding
requirements to be paid on behalf of the participant.

          (e)  The Committee may grant Options pursuant to the achievement of
Performance Goals, as described in Section 11 of this Plan, and it may impose
restrictions upon the vesting and exercise of Options based on the attainment of
Performance Goals.

7.   Restricted Stock.

          Restricted Stock may be granted by the Board from time to time,
subject to the following provisions:

          (a)  The Board shall determine the number of shares of Restricted
Stock to be granted to a participant and direct the transfer agent for the Stock
that a certificate or certificates representing such number of shares be issued
and registered in the participant's name. The certificate(s) representing such
shares shall be legended as to sale, transfer, assignment, pledge or other
encumbrance during the period the Restricted Stock is subject to

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forfeiture (such period being referred to herein as the "restriction period")
and deposited, together with a stock power with respect to the transfer thereof
executed by the participant and endorsed in blank, with the Treasurer of
Carpenter Technology Corporation, to be held in escrow during the restriction
period.

          (b)  At the Board's discretion, during the restriction period the
Board may give participants the right to receive cash payments in amounts
equivalent to the dividends from time to time declared and paid in respect of
the shares of Restricted Stock. All shares of Restricted Stock will include
voting rights during the restriction period.

          (c)  The Restricted Stock agreement shall specify the duration of the
restriction period and the performance, employment or other conditions under
which the Restricted Stock may be forfeited by the participant.  At the end of
the restriction period, the restrictions imposed hereunder shall lapse with
respect to the number of shares of Restricted Stock as determined by the Board,
and the legend shall be removed and the certificates for such number of shares
delivered from escrow to the participant.  The Board may, in its sole
discretion, modify or accelerate the vesting of shares of Restricted Stock.  The
participant's required tax withholding on newly vested shares of Restricted
Stock may be paid in cash or the participant may elect to have the Company
withhold a sufficient number of the vesting shares of Stock to pay any required
tax withholdings on behalf of the participant.

          (d)  The Restricted Stock agreement shall set forth the extent to
which the participant shall have the right to vest in shares of Restricted Stock
following termination of the participant's employment. Such provisions shall be
determined at the sole discretion of the Board and need not be uniform among all
Restricted Stock issued pursuant to this Section 7, and may reflect distinctions
based on the reasons for termination of employment.

          (e)  The Committee may grant Restricted Stock pursuant to the
achievement of Performance Goals, as described in Section 11 of this Plan, and
it may impose restrictions upon the vesting of Restricted Stock based on the
attainment of Performance Goals.

8.   Limited Authority to Grant Certain Awards.

          The Human Resources Committee may delegate, to Carpenter Technology
Corporation's Chief Executive Officer ("C.E.O."), authority to grant awards
covering a pre-determined number of shares.  Such delegation is limited to the
authority to grant NQSOs and Restricted Stock to participants who are not
subject to the requirements of Rule 16b-3 of the Exchange Act.  The option price
of any NQSO shall not be less than the fair market value of a share of Stock on
the date such grant is awarded by the C.E.O.  The C.E.O. shall report at least
annually on the disposition of these shares to the Committee in a form and
manner determined by the Committee.

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9.   Stock Appreciation Rights.

          SARs may be granted by the Board from time to time, subject to the
following provisions:

          (a)  The Board may grant a SAR either in connection with the grant of
an Option ("Tandem SAR") or independent of the grant of an Option ("Freestanding
SAR").  Each Tandem SAR shall be exercisable only with the exercise and
surrender of the related Option or portion thereof and shall entitle the
participant to receive the excess of the fair market value of the shares of
Stock on the date the Tandem SAR is exercised over the option price under the
related Option.  The excess is hereafter called the "spread" for both Tandem
SARs and Freestanding SARs.  If the participant elects instead to exercise the
related Option, the Tandem SAR shall be cancelled automatically.

          (b)  A Tandem SAR shall be exercisable only to the extent and at the
same time that the related Option is exercisable.

          (c)  A Freestanding SAR shall be exercisable pursuant to the terms and
conditions that are specified in the agreement in which the Freestanding SAR is
granted.

          (d)  Upon the exercise of a SAR, the Corporation shall pay to the
participant an amount equivalent to the spread (less any applicable withholding
taxes) in cash, or in Shares, or a combination of both, as the Board shall
determine.  Such determination may be made at the time of the granting of the
SAR.  No fractional shares of Stock shall be issued and the Board shall
determine whether cash shall be given in lieu of such fractional share or
whether such fractional share shall be eliminated.

          (e)  A Tandem SAR shall terminate and may no longer be exercised upon
the termination or expiration of the related Option.

          (f)  Income attributable to the exercise of a SAR shall not be
included in the calculation of pension or other benefits payable at any time by
reason of the participant's employment by the Corporation.

          (g)  No SAR shall be transferable by the participant except as
provided in Section 6(c) of the Plan.

          (h)  The agreement under which a SAR is granted shall set forth the
extent to which the participant shall have the right to exercise the SAR
following termination of the participant's employment.  Such provisions shall be
determined at the sole discretion of the Board and need not be uniform among all
SARs issued pursuant to this Section 9, and may reflect distinctions based on
the reasons for termination of employment.

          (i)  The Committee may grant SARs pursuant to the achievement of
Performance Goals, as described in Section 11 of this Plan, and it may impose
restrictions upon the vesting and exercise of SARs based on the attainment of
Performance Goals.

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10.  Performance Units and Performance Shares.

     Performance Units or Performance Shares may be granted to participants in
such amounts or combinations and upon such terms, and at any time and from time
to time, as shall be determined by the Committee.  Each Performance Unit shall
be that fraction of a Performance Share that is determined by the Committee at
the time of grant and shall have an initial value equal to that same fraction of
the value of a Share on the date of grant.  Each Performance Share shall have an
initial value equal to the fair market value of a Share on the Date of Grant.
The Committee shall set one or more Performance Goals as described in Section 11
of this Plan.  The extent to which those Performance Goals are met will
determine the number and value of Performance Units or Performance Shares that
will be paid out to the participant.

          (a)  Amount of Performance Units or Performance Shares.  A participant
               -------------------------------------------------
may not receive grants totaling more than 500,000 Performance Shares during any
calendar year.

          (b)  Earning of Performance Units or Performance Shares.  After the
               --------------------------------------------------
applicable Performance Period, as defined in Section 11, has ended, the holder
of Performance Units or Performance Shares shall be entitled to receive payout
on the number and value of Performance Units or Performance Shares earned by the
participant over the Performance Period, to be determined as a function of the
extent to which the corresponding Performance Goals have been achieved.

          (c)  Form and Timing of Payment of Performance Units or Performance
               --------------------------------------------------------------
Shares.  Payment of earned Performance Units or Performance Shares shall be made
------
as soon as practicable following the close of the applicable Performance Period
in a manner designated by the Committee, in its sole discretion.  The Committee,
in its sole discretion, may pay earned Performance Units or Performance Shares
in the form of cash or in Shares (or in a combination thereof) which have an
aggregate fair market value equal to the value of the earned Performance Units
or Performance Shares at the close of the applicable Performance Period.  Such
Shares may be granted subject to any restrictions deemed appropriate by the
Committee.  The participant's required tax withholding on newly awarded
Performance Shares may be paid in cash or the participant may elect to have the
Company withhold a sufficient number of the awarded Performance Shares to pay
any required tax withholdings on behalf of the participant.

          (d)  Dividend and Voting Rights.  At the discretion of the Committee,
               ---------------------------
participants may be entitled to receive any dividends declared with respect to
Shares which have been earned in connection with grants of Performance Units or
Performance Shares, but not yet distributed to participants.  Participants may
exercise voting rights with respect to such Shares.  Participants will not have
any voting rights with respect to Performance Units.

          (e)  Dividend Equivalents.  The Committee may grant dividend
               --------------------
equivalents in connection with Performance Units or Performance Shares granted
under this Plan.  Such dividend equivalents may be payable in cash or in Shares,
upon such terms as the Committee, in its sole discretion, deems appropriate.

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          (f)  Termination of Employment due to Death, Disability or Retirement.
               ----------------------------------------------------------------
Unless determined otherwise by the Committee and set forth in the participant's
award agreement, in the event the employment of a participant is terminated by
reason of death, Disability or Retirement during a Performance Period, the
participant shall receive a payout of the Performance Units or Performance
Shares which is prorated, as specified by the Committee in its discretion.
Payment of earned Performance Units or Performance Shares shall be made at a
time specified by the Committee in its sole discretion and set forth in the
participant's award agreement.  Notwithstanding the foregoing, with respect to
participants who retire during a Performance Period, payments shall be made at
the same time as payments are made to participants who did not terminate
employment during the applicable Performance Period.  For this purpose,
"Disability" shall be defined in a manner consistent with the definition of that
term in the Corporation's long-term disability plan under which the participant
participates, or at the discretion of the Committee using standards comparable
to those under the Corporation's long-term disability plans, if the participant
does not participate in any such plan.  In addition, for this purpose,
"Retirement" shall be defined as the termination of employment with the
Corporation after the participant has attained age 55 while being credited with
at least ten Years of Service, or has attained age 60 while being credited with
at least five Years of Service, or at least thirty Years of Service regardless
of age.  For purposes of this Plan, a participant shall be credited with one
Year of Service for each 12-month period following the participant's
commencement of service with the Corporation that the participant has worked at
least one hour for the Corporation.

          (g)  Termination of Employment for Other Reasons.  If a participant's
               -------------------------------------------
employment terminates for any reason other than those reasons set forth in
Section 10(f), all Performance Units or Performance Shares shall be forfeited by
the participant to Carpenter Technology Corporation unless determined otherwise
by the Committee, as set forth in the participant's award agreement.

          (h)  Nontransferability.  Except as otherwise provided in a
               ------------------
participant's award agreement, Performance Units or Performance Shares may not
be sold, transferred, pledged, assigned or otherwise alienated, other than by
will or by the laws of descent and distribution.  Further, except as otherwise
provided in a participant's award agreement, a participant's rights under the
Plan shall be exercisable during the participant's lifetime only by the
participant or the participant's legal representative.

          (i)  Payment for Performance Units and Shares upon a Change in
               ---------------------------------------------------------
Control. Within 30 days following a Change in Control Event, as defined in
-------
Section 13(b) of the Plan, there shall be paid in cash to participants holding
Performance Units and Performance Shares a pro rata amount based upon the
assumed achievement of all relevant Performance Goals at target levels, and upon
the length of time within the Performance Period that has elapsed before the
Change in Control Event; provided, however, that if the Committee determines
                         --------
that actual performance to the date of the Change in Control Event exceeds
targeted levels, the prorated payouts shall be made using the actual performance
data; and provided further, that there shall not be an accelerated payout with
          ----------------
respect to Performance Shares or Performance Units that qualify
as "derivative securities" under Section 16 of the Exchange Act that were
granted less than six months before the Change in Control Event.

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11.  Performance Goals.

          For all purposes under this Plan, "Performance Goals" means goals that
must be met by the end of a period specified by the Committee based upon one or
more of the following criteria: (i) price of the Stock, (ii) market share of the
Corporation, (iii) sales by the Corporation, (iv) earnings per share of the
Stock, (v) return on shareholder equity of the Corporation, or (vi) costs of the
Corporation. The time period during which the Performance Goals must be met
shall be called a "Performance Period." The Performance Goals shall be
interpreted in a manner that complies with the exceptions for performance-based
compensation set forth in Code [_] 162(m) and Treas. Reg. [_] 1.162-27, as in
effect during any relevant period, and must be set (a) before 25% of the
Performance Period has elapsed and (b) at a time when it is substantially
uncertain that the Performance Goals will be met.

12.  Adjustment Provisions.

          If Carpenter Technology Corporation shall at any time change the
number of issued shares of Stock without new consideration to Carpenter
Technology Corporation (such as by stock dividends, stock splits, stock
combinations, stock exchanges or recapitalization), the total number of Shares
reserved for issuance under this Plan, limits on types of awards that may be
issued, the number of Shares covered by, the option price for, and any other
relevant terms of, each outstanding award shall be adjusted so that the
aggregate consideration payable to Carpenter Technology Corporation and the
value of each award under this Plan shall not be changed.  In the event of a
merger, reorganization, acquisition, consolidation, divestiture, sale or
exchange of assets of Carpenter Technology Corporation, or similar event, the
Board shall make such adjustments with respect to awards under this Plan or take
such other action as it determines to be appropriate and such determination
shall be conclusive.

13.  Change in Control.

          (a)  Notwithstanding any provision in this Plan to the contrary, upon
the occurrence of a Change in Control Event, (i) each Option then outstanding
shall become immediately exercisable to the full extent of the Shares subject
thereto, (ii) any remaining restrictions on shares of Restricted Stock shall
immediately lapse, (iii) each SAR then outstanding shall be fully exercisable
immediately following the occurrence of the Change in Control Event using the
Change in Control Price [as defined in subsection (c)] to determine the spread,
and (iv) any Performance Units or Performance Shares shall become fully vested
and payment shall be made pursuant to the terms of Section 10(i).  In addition,
notwithstanding anything in this Plan to the contrary, if the employment of an
optionee or holder of a SAR is terminated by the Corporation without "cause" [as
defined in Section 15(a)], or, in the case of an employee who is covered by an
employment arrangement or agreement that enables such employee to terminate for
Good Reason (as defined in such arrangement or agreement), for Good Reason, in
either case during the two-year period commencing on the date of the occurrence
of a Change in Control Event, then such employee shall be able to exercise his
or her Options and SARs until the earlier of (x) the second anniversary of such
employment termination or (y) the expiration of their original term.

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          (b)  For purposes of this Plan, a "Change in Control Event" means:

               (1)  The acquisition by any individual, entity or group [within
the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act] (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (A) the then-outstanding shares of common
stock of Carpenter Technology Corporation (the "Outstanding Company Common
Stock") or (B) the combined voting power of the then-outstanding voting
securities of Carpenter Technology Corporation entitled to vote generally in the
election of directors (the "Outstanding Company Voting Securities"); provided,
however, that, for purposes of this Section 13(b), the following acquisitions
shall not constitute a Change in Control Event: (i) any acquisition directly
from Carpenter Technology Corporation, (ii) any acquisition by Carpenter
Technology Corporation, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Carpenter Technology Corporation
or any affiliated company or (iv) any acquisition by any corporation pursuant to
a transaction that complies with Sections 13(b)(3)(A), 13(b)(3)(B) and
13(b)(3)(C);

               (2)  individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board; provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for election by
Carpenter Technology Corporation's stockholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board;

               (3)  consummation of a reorganization, merger, consolidation or
sale or other disposition of all or substantially all of the assets of Carpenter
Technology Corporation or the acquisition of the assets or stock of another
entity (a "Business Combination"), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities that
were the beneficial owners of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of 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, as the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that, as a result of
such transaction, owns Carpenter Technology Corporation or all or substantially
all of Carpenter Technology Corporation's assets either directly or through one
or more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company Common
Stock and the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of Carpenter Technology Corporation
or such corporation resulting from such Business Combination)

                                     - 10 -
<PAGE>

beneficially owns, directly or indirectly, 20% or more of, respectively, the
then-outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then-outstanding voting
securities of such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement or of the action of the Board providing for such Business
Combination; or

               (4)  approval by the stockholders of Carpenter Technology
Corporation of a complete liquidation or dissolution of Carpenter Technology
Corporation.

          (c)  For purposes of SARs granted under this Plan, "Change in Control
Price" shall mean the higher of (i) the highest price paid per share of Stock in
any transaction constituting a Change in Control Event, or (ii) the highest fair
market value of the Stock at any time during the sixty-day period preceding the
occurrence of the Change in Control Event.

14.  Amendment, Modification and Termination of the Plan.

          The Board at any time may terminate, and at any time and from time to
time and in any respect, may amend or modify, the Plan; provided, however, that
                                                        --------
no such action by the Board, without approval of the stockholders, may:  (i)
increase the Shares available for award pursuant to the Plan or the maximum
number of Shares for which Options may be granted under the Plan to any one
individual, except as contemplated in Section 12, (ii) permit Options to be
granted at less than fair market value, (iii) permit any person who is not both
a  "non-employee director" and an "outside director" from serving as a member of
the Committee contemplated in Section 2, (iv) change the provisions of this
Section 14, or (v) effect other changes for which stockholder approval would be
required under Rule 16b-3 of the Exchange Act or any successor rule promulgated
by the SEC.  No amendment or modification of the Plan shall be made that would
adversely affect any award previously granted under the Plan without the prior
written consent of such holder, except such an amendment necessary to comply
with applicable law, stock exchange rules or accounting rules. The ability to
award ISOs under the Plan shall automatically terminate ten years after the
earlier of (a) the date the Plan is adopted, or (b) the date the Plan is
approved by stockholders.  Termination of the Plan pursuant to this Section 14
shall not affect awards outstanding under the Plan at the time of termination.

15.  General Provisions.

          (a)  Notwithstanding anything in the Plan to the contrary, in the
event a participant's employment with the Corporation is terminated for "cause,"
the Board may, in its sole discretion, cancel each unexercised or unvested award
granted to such participant effective upon the termination. For purposes of this
subsection, a termination for "cause" shall mean termination of a participant's
employment with the Corporation which results from either (i) the participant's
commitment of an Intolerable Offense (as defined in the Corporation's

                                     - 11 -
<PAGE>

Personnel Practices and Policies as in effect on the date of termination) or
(ii) the operation of the Corporation's Corrective Performance System (as set
forth in the Corporation's Personnel Practices and Policies as in effect on the
date of termination).

          (b) Nothing contained in the Plan, or an award granted under the Plan,
shall confer upon a participant any right with respect to continuance of
employment with the Corporation, nor interfere in any way with the right of the
Corporation to terminate such employment at any time.

          (c) For purposes of this Plan, transfer of employment between any
members of the Corporation shall not be deemed termination of employment.

          (d) Participants shall be responsible to make appropriate provisions
for all taxes in connection with any award, the exercise thereof and the
transfer of Shares pursuant to this Plan.  However, in the absence of an
alternative provision the Corporation shall withhold the number of Shares whose
aggregate fair market value on the date of such withholding equals the amount to
be withheld in satisfaction of the Corporation's obligation under all applicable
withholding taxes.  A participant may acquire such Shares by paying to the
Corporation an amount equal to the Corporation's withholding obligation.
Agreements evidencing such awards shall contain appropriate provisions to effect
withholding in this manner.

          (e) Without amending the Plan, awards may be granted to employees who
are foreign nationals or employed outside the United States or both, on such
terms and conditions different from those specified in the Plan as may, in the
judgment of the Board, be necessary or desirable to further the purpose of the
Plan.

          (f) To the extent that Federal laws (such as the Exchange Act or the
Code) do not otherwise control, the Plan and all determinations made and actions
taken pursuant hereto shall be governed by the law of the State of Delaware and
construed accordingly.

          (g) The Committee shall have the authority to improve the terms of any
granted Option, Restricted Stock agreement, SAR agreement or established
Performance Goals, subject to the limitation that the price of an Option may not
be reduced to less than fair market value.

16.  Effective Date of the Last Restated Plan Document.

     An amendment and restatement of the Plan became effective upon approval by
the Board on June 27, 1996 and was ratified by the stockholders at the Annual
Meeting held on October 21, 1996. The Plan was further amended and restated by
the Board on August 17, 2000 to increase the number of shares available for
awards by 1,800,000 shares.  This amendment was approved by the stockholders at
the Annual Meeting held on October 23, 2000.

                                     - 12 -

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