Document:

EX-10.24

 

Exhibit 10.24

FORM OF

PERFORMANCE/RESTRICTED STOCK AGREEMENT

     This Performance/Restricted Stock Agreement (the “Agreement”) made as of the 22nd day of
February, 2006 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation (the
“Corporation”) and

                                             (the “Employee”).

     WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies Incorporated Stock
2000 Incentive Plan (the “Incentive Plan”);

     WHEREAS, the Corporation desires to encourage the Employee to remain an employee of the
Corporation and, during such employment, to contribute substantially to the financial performance
of the Corporation and, to provide that incentive, the Corporation has awarded, subject to the
performance and employment restrictions described herein, the Employee an aggregate of                     
shares of shares of the common stock of the Corporation, $0.10 par value per share (“Common
Stock”), [equal to (i) the applicable base salary times ___% (ii) divided by $51.55 (which is the
average of the high and low sales prices of the Common Stock on the New York Stock Exchange on
February 22, 2006)] under the Incentive Plan subject to the terms and conditions set forth in this
Restricted Stock Agreement (together with any increases for dividends paid in accordance with
Paragraph 2(d) or adjustments as provided in Paragraph 8, below, the “Shares Subject to
Restrictions”);

     WHEREAS, half of the Shares Subject to Restrictions are subject to the Corporation’s
attainment of the performance requirements set forth in Paragraph 3(a) (the “Performance
Criteria”); and half of the Shares Subject to Restrictions are subject to the Employee’s remaining
an Employee (except in instances of death, disability or Retirement as described below) during the
Restriction Period set forth in Paragraph 3(b), subject to accelerated termination of the
Restriction in the event of attainment of the Performance Criteria; and

     WHEREAS, the Corporation and the Employee desire to evidence the award of the Shares Subject
to Restrictions and the terms and conditions applicable thereto in this Restricted Stock Agreement.

     NOW THEREFORE, in consideration of the mutual promises and covenants contained herein and
intending to be legally bound, the Corporation and the Employee agree as follows:

     1. Grant of Shares Subject to Restrictions. The Corporation hereby grants to the
Employee, as of the date first written above, the Shares Subject to

 

 

Restrictions subject to the restrictions and other terms and conditions set forth herein.
Simultaneously with the execution and delivery of this Agreement, the Employee shall deliver to the
Corporation a stock power endorsed in blank relating to the Shares Subject to Restrictions
(including in such power any increases or adjustments to the Shares Subject to Restrictions). As
soon as practicable after the Date of Grant, the Corporation shall direct that the Shares Subject
to Restrictions be registered in the name of and issued to the Employee and initially bearing the
legend described in Paragraph 5. The Shares Subject to Restrictions and any certificate or
certificates representing the Shares Subject to Restrictions shall be held in the custody of the
Corporation or its designee until the expiration of the applicable Restrictions. Upon any
forfeiture in accordance with Paragraph 4 of the Shares Subject to Restrictions, the forfeited
shares and any certificate or certificates representing the forfeited Shares Subject to
Restrictions shall be canceled.

     2. Restrictions. Employee shall have all rights and privileges of a stockholder of
the Corporation with respect to the Shares Subject to Restrictions, except that the following
restrictions shall apply:

     (a) None of the Shares Subject to Restrictions may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the “Restriction Period” as defined below, except to the
extent of the Corporation’s earlier attainment of the Performance Criteria, as defined below.

     (b) The Shares Subject to Restrictions are subject to forfeiture during the Restriction Period
in accordance with Paragraph 4 of this Agreement.

     (c) The Shares Subject to Restrictions and any certificate representing the Shares Subject to
Restrictions shall be held in custody by the Corporation or its designee until such time as either
the Performance Criteria are attained or the Restriction Period shall have been completed.

     (d) Dividends paid with respect to the Shares Subject to Restrictions during the Restriction
Period shall not be paid to the Employee and, instead, shall be converted into additional shares of
Restricted Stock at the price at which shares of common stock of the Corporation are purchased
under the Corporation’s outstanding dividend reinvestment program and on the date such purchases
are made and such shares of Restricted Stock shall be additions to the Shares subject to the
Restrictions hereunder, provided, however, the Personnel and Compensation Committee of the Board of
Directors may, in its sole discretion, determine at any time or from time to time, to pay such
dividends in cash directly to the Employee.

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     3. Term of Restriction.

     (a) Subject to the forfeiture provisions of Paragraph 4 of this Agreement, the Restrictions
shall lapse (i) with respect to half of the Shares Subject to Restrictions on the earlier of (x)
February 22, 2011 if the Employee is an employee of the Corporation on February 22, 2011, unless
the Employee’s cessation of employment was due to the Employee’s death, disability or Retirement
(as defined below), or (y) as soon after the completion of the audit of the Corporation for the
2008 fiscal year as it may be determined that the Performance Criteria have been attained and (ii) with
respect to half of the Shares Subject to Restrictions, as soon after the completion of the audit of
the Corporation for the 2008 fiscal year as it may be determined that the Performance Criteria have
been. With respect to the half of the Shares Subject to Restrictions subject only to the
Performance Criteria, if the Corporation does not attain the Performance Criteria on or before the
end of the three year measurement period ending December 31, 2008, such half of the Shares Subject
to Restrictions shall be forfeited immediately upon the completion of that three-year measurement
period.

     (b) For purposes of this Agreement, the “Performance Criteria” shall mean that the net income
of the Corporation, measured under GAAP, shall exceed $300 million, in the aggregate, for the 2006,
2007 and 2008 fiscal years of the Corporation. The period for measuring the Performance Criteria
shall end as of December 31, 2008 and the Personnel and Compensation Committee shall as promptly as
possible following the completion of the audit of the Corporation for the 2008 fiscal year
determine whether the Performance Criteria have been met.

     (c) The period from the Date of Grant until the lapse of the applicable of the Restrictions
with respect to the Shares Subject to Restrictions is the “Restriction Period” for purposes of this
Agreement.

     (d) As soon as administratively practicable following the lapse of the Restrictions without a
forfeiture of the applicable Shares Subject to Restrictions, and upon the satisfaction of all other
applicable conditions as to such Shares Subject to Restrictions, including, but not limited to, the
payment by the Employee of all applicable withholding taxes, if any, the Corporation shall deliver
or cause to be delivered to the Employee shares of Common Stock, which may be in the form of a
certificate or certificates for such shares, equal in number to the applicable Shares Subject to
Restrictions, which shall not be subject to the transfer restrictions set forth above and shall not
bear the legend described in Paragraph 5. Without limiting the foregoing, (i) if the Performance
Criteria are met, all Shares Subject to Restrictions shall become non-forfeitable and such Shares
or the certificate representing such non-forfeitable shares of common stock of the Corporation
shall be delivered as described above and (ii) if the Performance Criteria are not met, (x) half of
the Shares Subject to Restrictions shall be forfeited immediately after the end of the measurement
period for such

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Performance Criteria and (y) the remaining half of the Shares Subject to Restrictions shall be
non-forfeitable, if at all, at the end of the Restriction Period.

     4. Forfeiture of Shares Subject to Restrictions. If Employee’s employment with the
Corporation and all of its direct or indirect subsidiaries is terminated by either party for any
reason, including, but not limited to, the involuntary termination of the Employee’s employment
with the Corporation for any reason, with or without cause, other than the Employee’s death,
disability or retirement with the consent of the Corporation when the Employee is at least 55 years
of age with at least five years of service (“Retirement”), (i) all rights of the Employee to the
Shares Subject to Restrictions which remain subject to the Restrictions shall terminate immediately
and be forfeited in their entirety, and (ii) the forfeited Shares Subject to Restrictions and any
stock certificate or certificates representing the forfeited Shares Subject to Restrictions shall
be canceled. If the Employee dies or becomes disabled during the Restriction Period, the Shares
Subject to Restrictions will immediately vest. If the Employee retires with the consent of the
Corporation when the Employee is at least 55 years of age with at least five years of service, the
Employee (or the Employee’s beneficiary) shall receive the Shares Subject to Restrictions when, if
and to the extent, the Restrictions lapse under Paragraph 3.

     5. Change of Control. All Shares Subject to Restrictions shall fully vest in the
event of a Change of Control as defined in the Incentive Plan.

     6. Legend. During the Restriction Period, the shares of Restricted Stock and any
share certificate or certificates evidencing the Shares Subject to Restrictions shall be endorsed
with the following legend (in addition to any legend required under applicable securities laws or
any agreement by which the Corporation is bound):

THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS
AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT ENTERED INTO BY AND BETWEEN ALLEGHENY
TECHNOLOGIES INCORPORATED AND THE HOLDER OF THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS
ON FILE AT THE OFFICE OF THE CORPORATION.

     7. Withholding. The Corporation or its direct or indirect subsidiary may withhold
from the number of Shares Subject to Restrictions or from any cash amount payable hereunder or any
other cash payments due to Employee all taxes, including social security taxes, which the
Corporation or its direct or indirect subsidiary is required or otherwise authorized to withhold
with respect to the Shares Subject to Restrictions.

     8. Adjustments to Number of Shares. Any shares issued to Employee with respect to the
Shares Subject to Restrictions in the event of any change in

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the number of outstanding common stock of the Corporation through the declaration of a stock
dividend or a stock split or combination of shares or any other similar capitalization change shall
be deemed to be Shares Subject to Restrictions subject to all the terms set forth in this
Agreement.

     9. No Right to Continued Employment; Effect on Benefit Plans. This Agreement shall
not confer upon Employee any right with respect to continuance of his or her employment or other
relationship, nor shall it interfere in any way with the right of the Corporation or its direct or
indirect subsidiary to terminate his or her employment or other relationship at any time. Income
realized by Employee pursuant to this Agreement shall not be included in Employee’s earnings for
the purpose of any benefit plan in which Employee may be enrolled or for which Employee may become
eligible unless otherwise specifically provided for in such plan.

     10. Employee Representations. In connection with the issuance of the Shares Subject
to Restrictions, Employee represents the following:

     (a) Employee has reviewed with Employee’s own tax advisors, the federal, state, local and
foreign tax consequences of this Agreement and the transactions contemplated hereby. Employee is
relying solely on such advisors and not on any statements or representations of the Corporation or
any of its agents. Employee understands that Employee (and not the Corporation) shall be
responsible for Employee’s own tax liability that may arise as a result of this Agreement and the
transactions contemplated hereby.

     (b) Employee has received, read and understood this Agreement and the Incentive Plan and
agrees to abide by and be bound by their respective terms and conditions.

     11. Miscellaneous.

     (a) Governing Law. This Agreement shall be governed and construed in accordance with
the domestic laws of the Commonwealth of Pennsylvania without regard to such Commonwealth’s
principles of conflicts of laws.

     (b) Successors and Assigns. The provisions of this Agreement shall inure to the
benefit of, and be binding upon, the successors, permitted assigns, heirs, executors and
administrators of the parties hereto. Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation without the consent of all parties hereto.

     (c) Entire Agreement; Amendment. This Agreement contain the entire understanding
between the parties hereto with respect to the subject matter of this Agreement and supersedes all
prior and contemporaneous agreements and understandings, inducements or conditions, express or
implied, oral or written,

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with respect to the subject matter of this Agreement. This Agreement may not be amended or
modified without the written consent of the Corporation and Employee.

     (d) Counterparts. This Agreement may be executed simultaneously in any number of
counterparts, each of which when so executed and delivered shall be taken to be an original and all
of which together shall constitute one document.

     (e) Definitions. Initially capitalized terms not otherwise defined in this Restricted
Stock Agreement shall have the meanings ascribed thereto in the Incentive Plan.

     IN WITNESS WHEREOF, the parties have executed this Shares Subject to Restrictions Agreement as
of the date first written above.

	 	 	 	 	 
	 	 	ALLEGHENY TECHNOLOGIES

INCORPORATED
	 	 	 
	 

	 	By:	 	 
	 	 	                                                                                
	 

	 	Name:
	Jon D. Walton
	 

	 	Title:
	Executive Vice President,
	 

	 	 	Human Resources, Chief Legal
	 

	 	 	And Compliance Officer
	 	 	 
	 

	 	EMPLOYEE	 	 
	 	 	 
	 	 	                                                                                

6EX-10.25

 

Exhibit 10.25

Allegheny Technologies Incorporated

Key Executive Performance Plan

Effective as of January 1, 2004

And as amended February 24, 2005

and as further amended on February 22, 2006

Article I. Adoption and Purpose of the Key Executive Performance Plan

     1.01 Adoption. This Key Executive Performance Plan is adopted by the Personnel and
Compensation Committee of the Board of Directors as a part of the Allegheny Technologies
Incorporated executive compensation program effective January 1, 2004. The KEPP Payments,
if any, earned under this Plan are intended as performance based compensation within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, as incentive
compensation determined solely with reference to attainment in predetermined levels of
Earnings and Operational Goals within the relevant Performance Period.

     1.02 Purpose. The purposes of the KEPP are (i) to direct the focus of key management
employees to the achievement of goals deemed necessary for the success of the Corporation,
(ii) to assist the Corporation in retaining and motivating selected key management employees
of the Corporation and its subsidiaries who will contribute to the success of the
Corporation and (iii) to reward key management employees for the overall success of the
Corporation as determined with reference to predetermined levels of Earnings of the
Corporation and attainment of Operational Goals. The KEPP is intended to act as an
incentive to participating key management employees to achieve long-term objectives that
will inure to the benefit of all stockholders of the Corporation measured in terms of
achievement of predetermined levels of Earnings of the Corporation and attainment of
Operational Goals.

     1.03 Plan Document. This KEPP plan document is intended as the plan document as
adopted by the Committee, which will govern all Performance Periods of the KEPP beginning in
or after 2004.

Article II. Definitions

     For purposes of this Plan, the capitalized terms set forth below shall have the following
meanings:

     2.01 Award means an opportunity to earn a KEPP Payment in a particular Performance
Period. Each Award shall be denominated in dollars that can be earned upon
attainment of predetermined Earnings thresholds (Level 1) and the maximum amount that may be
paid with respect to Operational Goals before the application of Negative Discretion (Level
2).

 

 

     2.02 Award Agreement means a written agreement between the Corporation and a
Participant or a written acknowledgment from the Corporation specifically setting forth the
terms and conditions of a KEPP Award granted to a Participant pursuant to Article VI of this
Plan.

     2.03 Board means the Board of Directors of the Corporation.

     2.04 Cause means a determination by the Committee that a Participant has engaged in
conduct that is dishonest or illegal, involves moral turpitude or jeopardizes the
Corporation’s right to operate its business in the manner in which it is now operated.

     2.05 Change in Control means any of the events set forth below:

               (a) The acquisition in one or more transactions, other than from the Corporation, by
any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of a number of Corporation Voting Securities in excess of 25% of the
Corporation Voting Securities unless such acquisition has been approved by the Board; or

               (b) Any election has occurred of persons to the Board that causes two-thirds of the
Board to consist of persons other than (i) persons who were members of the Board on January
1, 2001 and (ii) persons who were nominated for election as members of the Board at a time
when two-thirds of the Board consisted of persons who were members of the Board on January
1, 2001; provided, however, that any person nominated for election by the Board at a time
when at least two-thirds of the members of the Board were persons described in clauses (i)
and/or (ii) or by persons who were themselves nominated by such Board shall, for this
purpose, be deemed to have been nominated by a Board composed of persons described in clause
(i); or

               (c) Approval by the stockholders of the Corporation of a reorganization, merger or
consolidation, unless, following such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were the respective beneficial owners
of the Outstanding Stock and Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation, following such reorganization, merger or
consolidation beneficially own, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from such reorganization, merger or
consolidation in substantially the same proportion as their ownership of the Outstanding
Stock and Corporation Voting Securities immediately prior to such reorganization, merger or
consolidation, as the case may be; or

               (d) Approval by the stockholders of the Corporation of (i) a complete liquidation or
dissolution of the Corporation or (ii) a sale or other disposition of all or substantially
all the assets of the Corporation.

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     2.06 Committee means the Personnel and Compensation Committee of the Board.

     2.07 Corporation means Allegheny Technologies Incorporated, a Delaware corporation, and
its successors.

     2.08 Corporation Voting Securities means the combined voting power of all outstanding
voting securities of the Corporation entitled to vote generally in the election of the
Board.

     2.09 Date of Award means the date as of which an Award is granted in accordance with
Article VI of this Plan.

     2.10 Disability means any physical or mental injury or disease of a permanent nature
which renders a Participant incapable of meeting the requirements of the employment
performed by such Participant immediately prior to the commencement of such disability. The
determination of whether a Participant is disabled shall be made by the Committee in its
sole and absolute discretion. Notwithstanding the foregoing, if a Participant’s employment
by the Corporation or an applicable subsidiary terminates by reason of a disability, as
defined in an Employment Agreement between such Participant and the Corporation or an
applicable subsidiary, such Participant shall be deemed to be disabled for purposes of the
KEPP.

     2.11 Earnings means the earnings of the Corporation determined in accordance with
generally accepted accounting principles, provided, however, for the 2005 through 2007 and
the 2006 through 2008 Performance Periods, Earnings shall be expressed in terms of income
before taxes.

     2.12 Effective Date means January 1, 2004.

     2.13 Exchange Act means the Securities Exchange Act of 1934, as amended.

     2.14 KEPP Payment means the amount actually earned by a Participant in a particular
Performance Period. Each KEPP Payment shall be the sum of the amounts earned by a
Participant during a Performance Period as Level I and Level 2 achievement or, for the
2006-2008 Performance Period, the amount under the Participant Retention Achievement Bank
under Section 8.04.

     2.15 Level 1 means that portion of an Award that may be earned based on attainment of
Earnings.

     2.16 Level 2 means that portion of an Award that may be earned, after application of
Negative Discretion by the Committee, based on attainment of Operational Goals. The
Level 2 portion of any Award shall be denominated in the maximum amount that may be earned
with respect to Operational Goals prior to the application of Negative Discretion.

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     2.17 Negative Discretion means the power of the Committee to be exercised solely in the
Committee’s discretion to reduce the Level 2 portion of any Award. It is anticipated that
the Committee will review with the Chief Executive Officer of the Corporation the
relative attainment of Operational Goals during a particular Performance Period before the
Committee exercises its Negative Discretion.

     2.18 Operational Goals means the goals set by the Committee at the commencement of a
Performance Period to be attained by the Participants during the course of a particular
Performance Period. Operational Goals will be set forth in terms of operating objectives
and/or criteria, which may or may not be earnings measures that, in the judgment of the
Committee after consultation with the Chief Executive Officer of the Corporation, will
enhance the success of the Corporation during and beyond a particular Performance Period.

     2.19 Participant means any key management employee selected by the Committee, pursuant
to Section 5.01 of this Plan, as eligible to participate under the KEPP for any one or more
Performance Period.

     2.20 Performance Period means a period of more than one fiscal year of the Corporation
over which the attainment of Earnings and Operational Goals shall be measured.

     2.21 Plan or KEPP means the Key Executive Performance Plan as set forth in this plan
document or as the same may be amended from time to time.

     2.22 Retirement means, a termination of employment with the Corporation and each
subsidiary of the Corporation at or after (i) attaining age 55 and (ii) completing five
years of employment with the Corporation and/or any subsidiary of the Corporation.

     2.23 Withholding Obligations means the amount of federal, state and local income and
payroll taxes the Corporation determines in good faith must be withheld with respect to a
KEPP Payment. Withholding Obligations may be settled by the Participant, as permitted by
the Committee in its discretion, in cash, previously owned shares of common stock of the
Corporation or any combination of the foregoing.

Article III. Administration

     In addition to any power reserved to the Committee under the governing documents of the
Corporation, the KEPP shall be administered by the Committee, which shall have exclusive and
final authority and discretion in each determination, interpretation or other action
affecting the KEPP and its Participants. The Committee shall have the sole and absolute
authority and discretion to interpret the KEPP, to amend or modify this Plan for the KEPP,
to select, in accordance with Section 5.01 of this Plan, the persons who will be
Participants hereunder, to set all Earnings thresholds and Operational Goals, to determine
all performance criteria, levels of Awards and KEPP Payments payable, to determine, after
review of the Corporation’s financial reports, the degree to which any threshold of Earnings
has been achieved for a Performance Period with respect to the Level 1 portion of any Award,
to review the attainment of Operational Goals and exercise Negative Discretion with

4

 

respect to the Level 2 portion of any Award, to impose such conditions and restrictions as
it determines appropriate and to take such other actions and make such other determinations
in connection with the KEPP as it may deem necessary or advisable.

Article IV. Overview of KEPP

     4.01 Cash Bonus Plan. KEPP is designed to pay cash bonuses to participating key
executives after the end of a Performance Period based on the level (i) of achievement of
predetermined Earnings thresholds and (ii) attainment of Operational Goals (to which the
Committee may exercise Negative Discretion).

     4.02 Levels of Awards. KEPP Awards are granted with two levels. The first level,
Level 1, is a cash bonus payment based on achievement of Earnings that the Committee has no
discretion to reduce. KEPP Payments earned under Level 1 will be earned solely with
reference to Earnings attained during the Performance Period. The second level, Level 2 is
a cash bonus payment based on level of attainment of Operational Goals that the Committee
has the Negative Discretion to reduce. The Committee’s judgment in exercising its Negative
Discretion to arrive at a KEPP Payment under Level 2 is expected to be guided by the degree
to which the Corporation generally or the participating key executives in particular have
attained predetermined Operational Goals. The Committee is expected to review the level of
attainment of Operational Goals with the Chief Executive Officer of the Corporation before
exercising any Negative Discretion. For the 2006-2008 Performance Period, the Committee has
established the Participant Retention Achievement Bank under Section 8.04.

     4.03 Participating Key Executives. It is intended that the number of participating key
executives shall be limited to those key executives with the most direct influence on the
attainment of Earnings and operational goals.

Article V. Participation

     5.01 Designation of Participants. Participants in the KEPP shall be such key
management employees of the Corporation or of its subsidiaries as the Committee, in its sole
discretion, may designate as eligible to participate in the KEPP for any one or more
Performance Periods. No later than 90 days after the commencement of each Performance
Period during the term of the KEPP, the Committee shall designate the Participants who are
eligible to participate in the KEPP during such Performance Period. The Committee’s
designation of a Participant with respect to any Performance Period shall not require the
Committee to designate such person as a Participant with respect to any other Performance
Period. The Committee shall consider such factors as it deems pertinent in selecting
Participants. The Committee shall promptly provide to each person selected as a Participant
written notice of such selection.

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Article VI. Grants under the KEPP

     6.01 Annual Determination Regarding Performance Period. No later than the
60th day of each calendar year, the Committee shall determine whether to
establish a Performance Period, provided, however, for a Performance Period established in
calendar year 2004, the Committee may make a determination under this Section 6.01
at any time prior to the 90th day of calendar year 2004.

     6.02 Determination of Grants, Awards (both Level 1 and Level 2) and Performance
Criteria. For each Performance Period, the Committee shall take the following actions no
later than the 90th day of the first calendar year of that Performance Period:

          (a) Identify Participants for that Performance Period.

          (b) Establish the level of Level 1 and Level 2 opportunities for each
Participant.

          (c) Set the Earnings target(s).

          (d) Set the Operational Goals and relative weightings after discussing such
goals and weighting with the Chief Executive Officer in order to bring the
Operational Goals as closely as possible in line with the Corporation’s business
plans.

     6.03 Termination of Employment. If a Participant terminates employment with the
Corporation and each subsidiary of the Corporation during a then uncompleted Performance
Period for reasons other than death, Disability or Retirement, any KEPP Award for any then
uncompleted Performance Period shall be forfeited automatically. If a Participant
terminates employment with the Corporation and each subsidiary of the Corporation for
reasons of death, Disability or Retirement during a then uncompleted Performance Period, the
Participant shall be entitled to receive a pro rata KEPP Payment for each then uncompleted
Performance Period determined:

          (a) when the KEPP Payments for all other Participants in such Performance
Period(s) are determined; and

          (b) based on the actual level of achievement of Earnings for that Performance
Period and the attainment of Operational Goals, after the application of Negative
Discretion.

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Article VII. Determination of Achievement of Earnings and Operational Goals

     7.01 Determination of Earnings and Operational Goals. As promptly as administratively
feasible but in no event later than the March 1st of the calendar
year following the last
calendar year of each Performance Period, the Committee shall determine Earnings of the
Corporation and the attainment of Operational Goals and the degree, if any, to which the
Committee will exercise Negative Discretion.

     7.02 Determination of KEPP Payments. KEPP Payments for a particular Performance Period
for a particular Participant shall be the result of adding (i) the amount earned by a
particular Participant under Level 1 based on the Corporation’s actual Earnings during the
Performance Period and (ii) the amount earned by a particular Participant under Level 2
based on attainment of Operational Goals and after the application, if any, by the Committee
of Negative Discretion or, for the 2006-2008 Performance Period, the Participant Retention
Achievement Bank amount determined under Section 8.04.

Article VIII. Miscellaneous

     8.01 Change in Control. In the event of a Change in Control, KEPP Payments shall be
determined for all then uncompleted Performance Periods as of the date of the Change in
Control at the highest level Earnings for each such uncompleted Performance Period and KEPP
Payments shall be delivered to the Participant as soon after the Change in Control as is
administratively feasible.

     8.02 Non-Uniform Determinations. The actions and determinations of the Committee need
not be uniform and may be taken or made by the Committee selectively among employees or
Participants, whether or not similarly situated.

     8.03 Amendment and Termination of the Plan. The Committee shall have complete power
and authority to amend or terminate this Plan at any time it is deemed necessary or
appropriate. No termination or amendment of the Plan may, without the consent of the
Participant to whom any award shall theretofore have been granted under the KEPP, adversely
affect the right of such individual under such award; provided, however, that the Committee
may, in its sole discretion, make such provision in the Award Agreement for amendments
which, in its sole discretion, it deems appropriate.

     8.04 Participant Retention Achievement Bank for 2006-2008 Performance Period. In order to
retain participants designated as eligible to participate in KEPP for the 2006-2008 Performance
Period, for that 2006-2008 Performance Period, KEPP Payments will be made under this Participant
Retention Achievement Bank provision if greater than the KEPP Payment otherwise due under the KEPP
for the 2006-2008 Performance Period. The aggregate amount in the Participant Retention
Achievement Bank shall be equal to the sum of the three amounts (none less than 0) determined as of
the close of each year in the 2006-2008 Performance Period by taking the amount of Earnings for
that year in the 2006-2008 Performance Period multiplied by three and determining the Level 1
amount due for

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that level of achievement for the entire three year, 2006-2008 Performance Period and then dividing
the KEPP Payment due under the foregoing clause by three. The resulting amount will be one of the
three amounts added together (one for each year in the 2006-2008 Performance Period) to comprise
the aggregate Participant Retention Achievement Bank. The amount of the KEPP Payment due to any
individual Participant for the 2006-2008 Performance Period will be equal to the amount determined
by multiplying the Participant Retention Achievement Bank by a fraction, the numerator of which is
the Level 1 KEPP Payment due to that Participant if actual performance for the 2006-2008
Performance Period was at the 1X Threshold Reference and the denominator of which is the sum of all
payments due at Level 1 for 1X achievement for all Participants for the 2006-2008 Performance
Period.

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