Document:

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                                                                   Exhibit 10.36

                                                [ALLEGHENY TECHNOLOGIES LOGO]

                            THE ANNUAL INCENTIVE PLAN
                                  FOR YEAR 2001

<PAGE>   2

CONTENTS                                                                   PAGE
--------                                                                   ----

At a Glance                                                                   1
     What is the Annual Incentive Plan?                                       1
     Who is Eligible for This Plan?                                           1
     How Does the Annual Incentive Plan Work?                                 1

Calculation of the Annual Incentive Plan Award                                2
     Target Bonus Percentage                                                  2
     Performance Goals and the Target Bonus Percentage                        2
     Financial Performance Goals                                              3
     Safety Improvement Performance Goals                                     4
     Other Individual Performance Goals                                       4
How the AIP Incentive Award is Calculated When All Goals Are Achieved         5
How the AIP Incentive Award is Calculated for Other Achievement Levels        6
     o        Maximums and Minimums                                           6
     o        Formulas for Weighting Performance                              7
Putting it Together - Two Examples                                            8

Additional Guidelines for the Annual Incentive Plan                          12
     Discretionary Adjustments                                               12
     Some Special Circumstances                                              12
     Making Payments                                                         13

Administration Details                                                       13

<PAGE>   3

AT A GLANCE

WHAT IS THE ANNUAL INCENTIVE PLAN?

The Annual Incentive Plan (the "AIP" or the "Plan") provides key managers of
Allegheny Technologies Incorporated ("Allegheny Technologies" or the "Company")
and its operating companies with the opportunity to earn an incentive award when
certain pre-established goals are met at the corporate and operating company
levels and at the individual level.

WHO IS ELIGIBLE FOR THIS PLAN?

Generally, key managers who have a significant impact on the company's
operations will be eligible to participate in the Plan. Individuals eligible for
participation are determined annually, based on recommendations of the operating
company presidents, if applicable, and the Company's chief executive officer,
with the approval of the Personnel and Compensation Committee of the Company's
Board of Directors (the "Committee").

HOW DOES THE ANNUAL INCENTIVE PLAN WORK?

Under the Plan, key managers may earn an incentive award based on a percentage
of their base salary, depending on the extent to which pre-established
corporate, operating company and individual performance goals have been
achieved.

o    For purposes of the Plan, base salary is generally the manager's annual
     base salary rate as of the end of the year, excluding any commission or
     other incentive pay. For some special circumstances affecting the amount of
     base salary used in the Plan, see page 12.

o    A target bonus percentage is used in calculating the incentive award. It is
     explained on the next page. Each participating manager will have a target
     bonus percentage.

o    The target bonus percentage will be adjusted (upward or downward) based on
     the extent to which various performance goals are achieved.

Under the Plan, 80% of the target bonus percentage will be adjusted based on
corporate and operating company financial performance, 10% of the target bonus
percentage will be adjusted based on safety improvement, and 10% of the target
bonus percentage will be adjusted based on other individual performance.

Incentive award payments will generally be distributed in cash after the
year-end audit is complete.

                                     Page 1
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CALCULATION OF THE ANNUAL INCENTIVE PLAN AWARD

TARGET BONUS PERCENTAGE

The Plan establishes an incentive opportunity for each Plan participant,
calculated as a percentage of the manager's base salary. Each participant will
be provided with an initial percentage, referred to as a "target bonus
percentage."

Generally, the target bonus percentage is the percentage of base salary that can
be earned as an award under the Plan if 100% of the various performance goals
are achieved. For 2001, if 100% of the performance goals are achieved, 100% of
the target bonus percentage can be earned.

If there is a change in the key manager's job position during the year that
changes the manager's target bonus percentage, the target bonus percentage used
in the award calculation will be determined as follows:

o    If the individual has at least six months of service in the new position,
     the newly adjusted target bonus percentage will be used in calculating
     the individual's award for the full year.

o    If the individual has less than six months of service in the new position,
     the individual's award for the year will be calculated on a pro-rata basis
     using the two different target bonus percentages weighted by length of
     service in each position during the year.

Target bonus percentages, performance goals and performance achievements will be
communicated to each eligible participant. The Committee may change the goals
and objectives for the Plan at any time.

PERFORMANCE GOALS AND THE TARGET BONUS PERCENTAGE

An AIP award is based on the extent to which specified, preestablished
performance objectives are achieved. For 2001, AIP awards will be based on the
extent to which:

o    Allegheny Technologies and its operating companies achieve specified levels
     of Operating Profit and Managed Working Capital - the financial goals,

o    Allegheny Technologies and its operating companies achieve specified levels
     of improvements in safety performance - the safety goals, and

o    The participant achieves his or her own other individual performance
     objectives.

At the end of the year, the Company will measure actual performance against each
of the preestablished objectives.

                                     Page 2
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As a first step in the calculation, the Company will determine the extent to
which pre-established financial performance goals, specifically levels of
Operating Profit and Managed Working Capital for 2001, have been achieved. The
results achieved will be weighted under a formula, which in turn will impact 80%
of the target bonus percentage. The formulas for weighting financial
achievements are described on pages 5 to 7.

For the remaining 20% of the target bonus percentage, the Company will review
actual safety improvements and other individual performance against
pre-established objectives:

o    Since 10% of the target bonus percentage is based on safety improvements,
     the participant can earn up to 10% (or more) of the target bonus percentage
     based on the extent to which safety objectives are achieved. The formulas
     for weighting safety achievements are the same as for weighting financial
     achievements and are described on pages 5 to 7.

o    Since 10% of the target bonus percentage is based on other individual
     performance, the participant can earn up to 10% (or more) of the target
     bonus percentage based on the extent to which other individual performance
     objectives are achieved. The formulas for weighting other individual
     performance achievements are the same as for weighting financial
     achievements and are described on pages 5 to 7.

The weighted percentages attributable to each performance goal as noted above,
then will be added together, and that sum will be multiplied by: (1) the
individual's target bonus percentage, times (2) the individual's annual base
salary, to produce the amount of the incentive award for 2001. Note that
potential adjustments are described on page 12.

FINANCIAL PERFORMANCE GOALS

The financial performance goals for 2001 consist of two measures: Operating
Profit ("OP"), and Managed Working Capital ("MWC"), which together comprise 80%
of the target bonus percentage.

For operating company managers, note that 60% of the financial performance
goals' overall 80% weight will be based on the performance of the participant's
operating company, and 20% of the financial performance goals' overall 80%
weight will be based on corporate level performance. For corporate staff
employees, financial performance will be measured completely at the corporate
level.

More specifically, the financial performance measures comprising 80% of the
target bonus percentage will be as follows:

o    For managers at the operating companies:

     --  OP achievements at the participant's operating company:       45%
     --  MWC achievements at the participant's operating company:      15%
     --  OP achievements at Allegheny Technologies:                    12%
     --  MWC achievements at Allegheny Technologies:                    8%
                                                                       ---
                                                                       80%

                                     Page 3
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o    For corporate staff employees:

     --  OP achievements at the corporate level:                       60%
     --  MWC achievements at the corporate level:                      20%
                                                                       ---
                                                                       80%

Each year, financial performance goals will be set at the corporate and
operating company level based on the applicable business plan. With the
concurrence of the Company's chief executive officer and the Committee,
financial performance goals may be further weighted within a particular
operating company in accordance with its separate business units ("SBU's") for
key managers of those SBU's.

SAFETY IMPROVEMENT PERFORMANCE GOALS

10% of the target bonus percentage is based on the extent to which
pre-established levels of safety improvement are achieved. The Plan will
principally rely upon the percentage improvement in two metrics to measure
safety improvement: OSHA Total Recordable Incident Rate and the Lost Workday
Case Rate. Each safety metric will comprise 5% of the target bonus percentage.

Each of the safety achievement metrics - the OSHA Total Recordable Incident Rate
and the Lost Workday Case Rate - will be independently weighted for 2001 under
the same formulas as the financial performance goals.

Consistent with the overall business plan of Allegheny Technologies, the
pre-established safety goal under the Plan for 2001 is a 50% improvement vs.
1999.

Safety goals for individuals at specific sites can be adjusted to the needs of
their particular location as long as the collective goal for each operating
company is a 50% improvement in these safety metrics vs. 1999.

For corporate staff employees, the AIP award percentage for safety improvement
is based on achieving a 50% safety improvement on the weighted average of all
ATI operating companies vs. 1999.

OTHER INDIVIDUAL PERFORMANCE GOALS

10% of the target bonus percentage is based on the extent to which
pre-established individual performance goals are achieved. Each year, managers
will establish other individual performance goals with their immediate
supervisors.

The achievement of Other Individual Performance goals will be weighted under the
same formulas as the financial performance goals.

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HOW THE AIP INCENTIVE AWARD IS CALCULATED WHEN ALL GOALS ARE ACHIEVED

For the Year 2001, if 100% of the financial performance goals are achieved, then
80% of the target bonus percentage will be credited to the participant:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

FINANCIAL
OP - Operating Company         45%         100%         100%         45%
MWC - Operating Co.            15%         100%         100%         15%
OP - Corporate                 12%         100%         100%         12%
MWC - Corporate                 8%         100%         100%          8%
                              ---                                   ---
   Financial Total             80%                                   80%

         *Earned % of Target = Goal % of Target X Formula Weighting

Next, if 100% of the safety improvement goals are achieved, then an additional
10% of the target bonus percentage will be credited to the participant:

                                  Goal %      Goal        Formula    Earned % of
           Goals                 of Target  Achieved %   Weighting    Target *
           -----                 ---------  ----------   ---------    --------

SAFETY
Total Recordable Incident Rate       5%        100%        100%          5%

Lost Workday Case Rate               5%        100%        100%          5%
                                   ---                                 ---

   Safety Total                     10%                                 10%

Finally, if 100% of the individual performance goals are achieved, then an
additional 10% of the target bonus percentage will be credited to the
participant:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

INDIVIDUAL GOALS               10%         100%        100%          10%

                                     Page 5

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The sum of weighting the financial performance, safety performance, and
individual performance produces the earned percentages of target as follows:

     Financial Performance Goals             80%
     Safety Improvement Goals                10%
     Individual Performance Goals            10%
                                            ---
     Total Earned Percentage of Target      100%

In this example, assume that the operating company manager's target bonus
percentage is 20%.

The target bonus percentage of 20% is then multiplied by 100% to produce an
adjusted bonus percentage equal to 20% of base salary:

   Earned Percentage of Target                                  100%
   X  Target Bonus Percent                                       20%
                                                                ---
   Equals Percentage of Salary for                               20%
   Incentive Award

The sections below discuss the impact of achieving more or less than 100% of
various goals, and they also discuss the impact of other potential adjustments.

HOW THE AIP INCENTIVE AWARD IS CALCULATED FOR OTHER ACHIEVEMENT LEVELS

The following section describes maximum and minimum achievement levels, and the
formulas used to weight achievements at all levels.

Maximums and Minimums

o    Generally, the maximum percentage used in adjusting or weighting
     performance achievement is 200%, and the overall maximum incentive award
     that an individual can earn under the weighting formula is 200% of his or
     her target bonus percentage.

o    Where 75% of a financial, safety or other individual performance goal is
     achieved, only 25% of that goal's share will be allocated to his or her
     target bonus percentage.

o    Where less than 75% of a financial, safety or other individual performance
     goal is achieved, no amount of that goal will be allocated to his or her
     target bonus percentage.

                                     Page 6
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Formulas for Weighting Performance

The following formulas will be used to weight financial, safety, or other
individual performance under the Plan:

Formula A:

     If 75% to and including 100% of a goal is achieved, the Percent Allocated
     for that goal equals the Percentage of Goal Achieved (i.e. Actual
     Performance divided by Planned Performance) minus 75% (which is the
     threshold level of performance) times 3, plus 25%.

     Formula A examples:

     1.  Assumption: Percentage of Goal Achieved      = 90%
         Weighted Percent for that Goal               = [(90% - 75%) x 3] + 25%
                                                      = [15% x 3] + 25%
                                                      = 45% + 25%
         Percent Allocated for Goal                   = 70%

     2.  Assumption: Percentage of Goal Achieved      = 85%
         Weighted Percent for that Goal               = [(85% - 75%) x 3] + 25%
                                                      = [10% x 3] + 25%
                                                      = 30% + 25%
         Percent Allocated for Goal                   = 55%

Formula B:

     If over 100% of goal is achieved, the Percent Allocated for that goal
     equals the Percentage of Goal Achieved (i.e. Actual Performance divided by
     Planned Performance) minus 100% times 5, plus 100%. In all cases, the
     maximum Percent Earned of 200% results when 120% or more of that goal is
     achieved.

     Formula B examples:

     1.  Assumption: Percentage of Goal Achieved    = 130%
         Weighted Percent for that Goal             = [(130% - 100%) x 5] + 100%
                                                    = [30% x 5] + 100%
                                                    = 150% + 100%
         Percent Allocated for Goal                 = 250%
             However, the maximum target bonus is capped at 200%.

     2.  Assumption: Percentage of Goal Achieved    = 105%
         Weighted Percent for that Goal             = [(105% - 100%) x 5] + 100%
                                                    = [5% x 5] + 100%
                                                    = 25% + 100%
          Percent Allocated for Goal                = 125%

                                     Page 7
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PUTTING IT TOGETHER

Here are two examples of how an incentive award might be determined under the
Plan.

Example One:

Assume that the operating company manager's annual salary is $80,000 and that
the manager's target bonus percentage is 20% of base salary. Also, assume actual
performance is:

Financial goals

     o    100% of planned Operating Profit, or OP, goals at the operating
          company

     o    105% of planned Managed Working Capital, or MWC, goals at the
          operating company

     o    105% of planned Operating Profit, or OP, goals at the corporate level

     o    130% of planned Managed Working Capital, or MWC, goals at the
          corporate level

Safety goals

     o    90% of Recordable Incident Rate (improvement of 45% in metric since
          1999)

     o    100% of Lost Workday Case Rate (improvement of 50% in metric since
          1999)

Other Individual Performance goals

     o    90% of planned Individual Performance goals are met

The first step in this example is to calculate the impact of the actual
financial performance on 80% of the target bonus percentage.

Formula A on page 7 would be used for weighting OP at the operating company
level, because 100% of that goal was achieved. Formula B on page 7 would be used
for weighting the other financial metrics, because more than 100% of those goals
were achieved. Following the formulas, the 80% share of the target bonus
percentage is adjusted to 94.75%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

OP - Operating Company         45%         100%       100% (A)     45.00%
MWC - Operating Co.            15%         105%       125% (B)     18.75%
OP - Corporate                 12%         105%       125% (B)     15.00%
MWC - Corporate                 8%         130%       200% (B)     16.00%
                              ---                                  -----
Goals Total                    80%                                 94.75%

         *Earned % of Target = Goal % of Target X Formula Weighting

                                     Page 8
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The next step in this example is to calculate the impact of the actual safety
performance on 10% of the target bonus percentage.

Accordingly Formula A on page 7 would be used for weighting the safety
improvement metrics, because 100% or less of those goals were achieved.
Following the formulas, the 10% safety performance share of the target bonus
percentage is adjusted to 8.5%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

Recordable Incident Rate        5%          90%         70% (A)     3.5%
Lost Workday Case Rate          5%         100%        100% (B)     5.0%
                                                                   ----

Goals Total                    10%                                  8.5%

The last step in this example is to calculate the impact of the actual
individual performance on 10% of the target bonus percentage. Formula A on page
7 would be used for individual performance, because less than 100% of those
goals were achieved. Following the formulas, the 10% individual performance
share of the target bonus percentage is adjusted to 7%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------
Individual Performance         10%          90%       70% (A)        7%

The sum of the financial performance, safety performance, and individual
performance is:

     Financial Performance Goals              94.75%
     Safety Improvement Goals                  8.50%
     Individual Performance Goals              7.00%
                                               -----
     Total Earned Percentage of Target       110.25%

The target bonus percentage of 20% is multiplied by 110.25% to produce an
adjusted bonus percentage equal to 22.05% of base salary:

   Earned Percentage of Target                                 110.25%

   X  Target Bonus Percent                                         20%
                                                               ------

   Equals Percentage of Salary for                             22.05%
   Incentive Award

With this first example, the incentive award would be calculated as 22.05% of
the manager's base salary of $80,000, or $17,640.

                                     Page 9
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Example Two:

Assume that the operating company manager's annual salary is again $80,000 and
that the manager's target bonus percentage is 20% of base salary but that actual
achievements are:

Financial goals

     o    90% of planned Operating Profit, or OP, goals at the operating company

     o    100% of planned Managed Working Capital, or MWC, goals at the
          operating company

     o    75% of planned Operating Profit, or OP, goals at the corporate level

     o    105% of planned Managed Working Capital, or MWC, goals at the
          corporate level

Safety goals

     o    100% of Recordable Incident Rate (improvement of 50% in metric since
          1999)

     o    160% of Lost Workday Case Rate (improvement of 80% in metric since
          1999)

Other Individual Performance goals

     o    105% of planned Individual Performance goals are met

The first step in this example is to calculate the impact of the actual
financial performance on 80% of the target bonus percentage.

Formula A on page 7 would be used for weighting OP and MWC at the operating
company and OP at the corporate level, because 100% or less of those goals were
achieved. Formula B on page 7 would be used for weighting the MWC goal at the
corporate level, because over 100% of that goal was achieved. Following the
formulas, the 80% share of the target bonus percentage is adjusted to 59.50%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

OP - Operating Company         45%          90%        70% (A)     31.50%
MWC - Operating Co.            15%         100%       100% (A)     15.00%
OP - Corporate                 12%          75%        25% (A)      3.00%
MWC - Corporate                 8%         105%       125% (B)     10.00%
                               --                                  -----
Goals Total                    80%                                 59.50%

         *Earned % of Target = Goal % of Target X Formula Weighting

                                    Page 10
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The next step in this example is to calculate the impact of the actual safety
performance on 10% of the target bonus percentage.

Accordingly Formula A on page 7 would be used for weighting the Total Recordable
Incident Rate or TRIR, because 100% or less of those goals were achieved.
Formula B will be used for weighting Lost Workday Case Rate or LWCR performance
achievements as they are greater than 100% of planned improvement.

Following the formulas, the 10% safety performance share of the target bonus
percentage is adjusted to 15%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

Recordable Incident Rate       5%          100%       100% (A)       5%
Lost Workday Case Rate         5%          160%       200% (B)      10%
                              --                                   ---
Goals Total                   10%                                   15%

The last step in this example is to calculate the impact of the actual
individual performance on 10% of the target bonus percentage. Formula B on page
7 would be used for individual performance, because over 100% of those goals
were achieved.

Following the formulas, the 10% individual performance share of the target bonus
percentage is adjusted 12.5%:

                             Goal %        Goal       Formula    Earned % of
        Goals               of Target    Achieved %  Weighting    Target *
        -----               ---------    ----------  ---------    --------

Individual Performance        10%          105%       125% (B)      12.5%

The sum of the financial performance, safety performance, and individual
performance is:

     Financial Performance Goals            59.50%
     Safety Improvement Goals               15.00%
     Individual Performance Goals           12.50%
                                            ------
     Total Earned Percentage of Target      87.00%

The target bonus percentage of 20% is multiplied by 87.00% to produce an
adjusted bonus percentage equal to 17.40% of base salary:

   Earned Percentage of Target                                 87.00%
   X  Target Bonus Percent                                        20%
                                                               -----
   Equals Percentage of Salary for                             17.40%
   Incentive Award

With this first example, the incentive award would be calculated as 17.40% of
the manager's base salary of $80,000, or $13,920.

                                    Page 11
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ADDITIONAL GUIDELINES FOR THE ANNUAL INCENTIVE PLAN

In any year, a minimum Operating Profit (OP) of 75% of plan must be achieved for
annual incentives to be paid regardless of other factors.

The total of the incentive awards in any given year cannot exceed 5% of the
Operating Profit of Allegheny Technologies or the operating company, as the case
may be. If, in any year, awards exceed 5% of Operating Profit, awards of the
affected company will be reduced to eliminate the excess.

DISCRETIONARY ADJUSTMENTS

In some cases, the Plan allows for discretionary adjustments of up to +20% or
-20% of an individual's calculated award. However, the sum of discretionary
adjustments for all eligible managers of the affected company cannot exceed +5%
of the aggregate calculated awards for that company.

SOME SPECIAL CIRCUMSTANCES

The above formulas generally determine the amount of the incentive award for the
year. Other factors that may affect the actual award follow:

o    If a manager leaves the company due to retirement, death, or disability, an
     award will be calculated based on the actual base salary earned during the
     year in which the manager left--so long as the manager worked at least six
     months of that year.

o    If a manager leaves the company before the end of the plan year for any
     other reason, the manager will not receive a bonus award for that year.

o    If a manager voluntarily leaves the company after the end of the year but
     before the award is paid, the manager would receive any bonus due unless
     the employment is terminated for cause. If employment is terminated for
     cause, the manager would not be entitled to receive an award under the
     Plan.

o    Managers who are hired mid-year may earn a pro-rated award for that year,
     based on the salary earned during that year. However, managers with less
     than two months service in a plan year (i.e. hired after October 31) would
     not be eligible for an award for that year.

o    If the manager received an adjustment in base salary due to a change in job
     position (i.e. other than a merit increase), the manager's base salary for
     plan purposes will be the sum of (1) the product of the number of months
     prior to the adjustment times the rate of monthly base salary immediately
     prior to the adjustment, and (2) the product of the number of months after
     the adjustment times the rate of monthly base salary as of the end of the
     Plan Year.

                                    Page 12
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MAKING PAYMENTS

All incentive award payments will generally be paid in cash, less applicable
withholding taxes, after the year-end audit is complete. This is expected to
occur by no later than March 15.

ADMINISTRATION DETAILS

This summary relates to the Annual Incentive Plan (AIP) of Allegheny
Technologies Incorporated and its subsidiaries. The Plan is administered by the
Committee, which has full authority to:

o    Interpret the Plan;

o    Designate eligible participants and categories of eligible participants;

o    Set the terms and conditions of incentive awards; and

o    Establish and modify administrative rules for the Plan.

Plan participants may obtain additional information about the plan and the
Committee from:

Senior Vice President,
General Counsel and Secretary
Allegheny Technologies Incorporated
1000 Six PPG Place
Pittsburgh PA  15222 5479
Phone:  412-394-2836                        Fax:  412-394-2837

The Plan will remain in effect until terminated by the Committee. The Committee
may also amend the plan at its discretion.

The Plan is not subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA) and is not "qualified" under Section 401(a) of the
Internal Revenue Code.

                                    Page 13<PAGE>   1

                                                                    Exhibit 10.1

                         SERVICEWARE TECHNOLOGIES, INC.

                         Change of Control Benefit Plan

                                  Introduction

         The Board of Directors of ServiceWare Technologies, Inc. (the
"Company") recognizes that the Company may experience a Change of Control (as
hereinafter defined), and that the possibility of a Change of Control may create
uncertainty resulting in the loss or distraction of certain key employees of or
consultants to the Company to the detriment of the Company and its stockholders.

         The Board considers the avoidance of such loss and distraction to be
essential to protect and enhance the best interests of the Company and its
stockholders. The Board also believes that when a Change of Control is perceived
as imminent, or is occurring, the Board should be able to receive and rely on
disinterested service from its key employees and consultants regarding the best
interests of the Company and its stockholders without concern that such
employees or consultants might be distracted or concerned by the personal
uncertainties and risks created by the perception that a Change of Control might
be imminent.

         Accordingly, the Board has determined that appropriate steps should be
taken to assure the Company of the continued employment and dedication to duty
of certain key employees and consultants and to ensure the availability of their
continued service, notwithstanding the possibility, threat or occurrence of a
Change of Control.

         Therefore, in order to fulfill the above purposes, the ServiceWare
Technologies, Inc. Change of Control Benefit Plan is hereby adopted by the
Board.

                                    ARTICLE I
                              ESTABLISHMENT OF PLAN

         As of the Effective Date, the Company has established a plan known as
the ServiceWare Technologies, Inc. Change of Control Benefit Plan as set forth
in this document.

                                   ARTICLE II
                                   DEFINITIONS

         As used herein the following words and phrases shall have the following
respective meanings unless the context indicates otherwise:

         a)   Board.  The Board of Directors of the Company.

         b)   Change of Control.  "Change of Control" shall mean:

              (1) The acquisition, other than from the Company, by any
                  individual, entity or group (within the meaning of Section
                  13(d) (3) or 14(d) (2) of the Securities Exchange Act of 1934,
                  as amended (the "Exchange Act")) (other than the Company, a
                  Subsidiary or any of their respective benefit plans or
                  affiliates (within the meaning of Rule 144 under the
                  Securities Act of 1933, as amended)) of

<PAGE>   2

                  beneficial ownership (within the meaning of Rule 13d-3
                  promulgated under the Exchange Act) of more than 50% of the
                  combined voting power of the then outstanding voting
                  securities of the Company entitled to vote generally in the
                  election of directors (the "Company Voting Securities"); or

              (2) A reorganization, merger, consolidation or recapitalization of
                  the Company (a "Business Combination"), other than a Business
                  Combination in which more than 50% of the combined voting
                  power of the outstanding voting securities of the surviving or
                  resulting entity immediately following the Business
                  Combination is held by the persons who, immediately prior to
                  such Business Combination, were the holders of the Company
                  Voting Securities; or

              (3) A complete liquidation or dissolution of the Company, or a
                  sale of all or substantially all of the assets of the Company.

         c)   Code. The Internal Revenue Code of 1986, as amended from time to
              time.

         d)   Company. ServiceWare Technologies, Inc., a Delaware corporation,
              and any Successor.

         e)   Effective Date. March 15, 2001, or such other date as the Board
              shall designate in its resolution approving the Plan.

         f)   Participants. All Participants under the Plan.

         g)   Plan. The ServiceWare Technologies, Inc. Change of Control
              Benefit Plan as set forth herein, and as the same may be amended
              from time to time.

         h)   Plan Benefits. The benefits provided in accordance with Section
              4.2 of the Plan.

         i)   Subsidiary. Any corporation or other entity (other than the
              Company) in any unbroken chain of corporations or other entities,
              beginning with the Company, if each of the corporations or
              entities (other than the last corporation or entity in the
              unbroken chain) owns stock or other interests possessing 50% or
              more of the economic interest or the total combined voting power
              of all classes of stock or other interests in one of the other
              corporations or entities in the chain.

         j)   Successor. Another corporation or unincorporated entity or group
              of corporations or unincorporated entities which acquires
              ownership, directly or indirectly, through merger, consolidation,
              purchase or otherwise, of all or substantially all of the assets
              of the Company.

                                   ARTICLE III
                                   ELIGIBILITY

         Schedule A to this Plan provides a list of the key employees or
consultants of the Company or its Subsidiaries who have been designated by the
Board as Participants. A Participant shall cease to be a Participant in the Plan
when he ceases to be an employee of or to provide consulting services to the
Company or a Subsidiary.

                                       2

<PAGE>   3

                                   ARTICLE IV
                                  PLAN BENEFITS

         4.1   Right to Plan Benefits. A Participant shall be entitled to Plan
         Benefits as provided in Section 4.2 if a Change of Control or a
         covered termination as defined in Section 4.2(b) occurs.

         4.2   Plan Benefits. If a Change of Control or covered termination as
         defined in Section 4.2(b) occurs, the Participant shall be entitled to
         the following:

         (a)  All conditions and restrictions shall lapse immediately prior to
              the effective date of the Change of Control or on the date of
              covered termination on any shares of restricted stock granted to
              the Participant prior to January 1, 2001 under the ServiceWare
              Technologies, Inc. 2000 Stock Incentive Plan (or any predecessor
              or successor thereto) ("Stock Plan") (including without
              limitation any such restricted stock issued upon "early exercise"
              of options granted under the Stock Plan) for which such
              conditions and restrictions would not otherwise have lapsed as of
              the effective date of the Change of Control or such termination.
              All restricted stock grants held by the Participant shall be
              administered in accordance with the terms of the Stock Plan and
              the applicable grant instruments; provided, that the foregoing
              provision for accelerated vesting shall, while this Plan
              continues in effect, be deemed part of any grant instrument
              governing any restricted stock granted to a Participant prior to
              January 1, 2001, with any such grant instrument being deemed to
              have been amended as of the Effective Date to provide therefor.

         (b)  The Participants each purchased Company common stock prior to
              January 1, 2001 using a promissory note (a "Note"), under the
              terms of which the shares of stock so acquired ("Loan Shares")
              were pledged as security for the obligation to repay the Company
              evidenced by the Note. The Notes would become immediately due and
              payable in full upon any sale of the Loan Shares by the
              Participant, or upon the Participant's termination of employment
              by the Company. In order to avoid potential financial hardship to
              the Participants, (1) in the event that a Change of Control is to
              occur, and the consideration payable to the Participants in
              respect of the Loan Shares in connection with such Change of
              Control would be less than the principal plus accrued interest
              due and owing on the related Note at the effective date of the
              Change of Control, or (2) upon a covered termination of a
              Participant and the value of the Loan Shares as determined by the
              closing price of the Company's Common Stock on the date of
              termination would be less than the principal plus accrued
              interest due and owing on the related Note on such date, then,
              immediately prior to such Change of Control or on the date of the
              covered termination, unless the Participant elects otherwise in
              writing at least ten (10) days prior thereto, (i) the Loan Shares
              shall be forfeited, and (ii) the Note shall be cancelled, and the
              amount of the unpaid loan balance in excess of the value of the
              Loan Shares shall be forgiven by the Company. In addition, prior
              to or within fifteen (15) days after the effective date of the
              Change of Control or covered termination, the Company shall pay
              the Participant an amount in cash sufficient to place

                                       3

<PAGE>   4

              the Participant in the same financial position as if the loan
              forgiveness were not subject to applicable federal, state and
              local income or employment taxes. A covered termination shall
              mean (i) any involuntary termination other than for "cause" as
              defined in the Stock Plan or (ii) any resignation by the
              Participant within 30 days after the Participant has (x) been
              demoted, (y) had his compensation and benefits provided by the
              Company, taken as a whole, materially reduced, or (z) been
              advised by the Company that his principal place of employment is
              being transferred to a location more than 50 miles from his
              current principal place of employment.

              4.3   Other Benefits Payable. The Plan Benefits described in
              Section 4.2 above shall be provided in addition to, and not in
              lieu of, all other accrued or vested or earned but deferred
              compensation, rights, or other benefits which may be owed to a
              Participant following termination, including but not limited to
              severance pay, accrued vacation or sick pay amounts or benefits
              payable under any bonus or other compensation plans, stock
              purchase plan, life insurance plan, health plan, disability plan
              or similar or successor plan.

              4.4   Obligations Absolute. Upon a Change of Control or a covered
              termination as defined in Section 4.2(b), the Company's
              obligations to provide the Plan Benefits described in Section 4.2
              shall be absolute and unconditional and shall not be affected by
              any circumstances, including, without limitation, any set-off,
              counterclaim, recoupment, defense or other right which the
              Company or any of its Subsidiaries may have against any
              Participant.

              4.5   Certain Additional Payments by the Company.

                    (a)  Anything in this Plan to the contrary notwithstanding,
                         in the event it shall be determined that any payment or
                         distribution by the Company or its Subsidiaries to or
                         for the benefit of a Participant pursuant to the terms
                         of this Plan (a "Payment") would constitute an "excess
                         parachute payment" within the meaning of Section 280G
                         of the Code, then the Participant shall be paid an
                         additional amount (the "Gross-Up Payment") such that
                         the net amount retained by the Participant after
                         deduction of any excise tax imposed under Section 4999
                         of the Code, and any federal, state and local income
                         and employment taxes and excise tax imposed on the
                         Gross-Up Payment, and any interest and penalties
                         imposed upon Executive, shall be equal to the Payment.

                    (b)  All determinations required to be made under this
                         Section 4.5 shall be made by the accounting firm that
                         was the Company's primary outside public accounting
                         firm before the Change of Control (the "Accounting
                         Firm"), which shall provide detailed supporting
                         calculations both to the Company and the Participant
                         within fifteen (15) business days of the date of the
                         Change of Control or a termination as defined in
                         Section 4.2(b). Any such determination by the
                         Accounting Firm shall be binding upon the Company and
                         the Participant. Within five (5) business days of the
                         determination by

                                       4

<PAGE>   5

                         the Accounting Firm, the Company shall pay the
                         Participant the Gross-up Payment.

                    (c)  In the event that upon any audit by the Internal
                         Revenue Service, or by any state or local taxing
                         authority, of the Payment or the Gross-Up Payment, a
                         change is finally determined to be required in the
                         amount of taxes payable by Participant in respect of
                         the Payment or the Gross-Up Payment, appropriate
                         adjustments shall be made under this Plan such that the
                         net amount which is payable to Participant after taking
                         into account the provisions of Section 4999 of the Code
                         shall reflect the intent of the parties as expressed in
                         subsection (a) above, in the manner determined by the
                         Accounting Firm.

                                    ARTICLE V
                              SUCCESSOR TO COMPANY

         The Plan shall bind any Successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise), in the same manner and to the
same extent that the Company would be obligated under the Plan if no succession
had taken place. In the case of any transaction in which a Successor would not
by the foregoing provision or by operation of law be bound by the Plan, the
Company shall require such Successor expressly and unconditionally to assume and
agree to perform the Company's obligations under the Plan, in the same manner
and to the same extent that the Company would be required to perform if no such
succession had taken place.

                                   ARTICLE VI
                       DURATION, AMENDMENT AND TERMINATION

              6.1   Duration. If a Change of Control has not occurred, the Plan
              shall expire five (5) years from the Effective Date, unless
              sooner terminated as provided in Section 6.2, or unless extended
              as described below. Following the end of the five (5) year term,
              on each anniversary of the Effective Date before a Change of
              Control, the term of the Plan shall be automatically extended to
              continue for an additional one (1) year period, unless the Board
              determines before the anniversary date that the term will not be
              extended. If a Change of Control occurs during the term of this
              Plan, the Plan shall continue in full force and effect and shall
              not terminate or expire until all Participants who become
              entitled to Plan Benefits hereunder shall have received such
              benefits in full.

              6.2   Amendment and Termination. The Plan may be terminated or
              amended in any respect by resolution adopted by the Board, unless
              a Change of Control or a termination as defined in Section 4.2(b)
              has previously occurred (in the latter case, as it affects the
              terminated Participant). If a Change of Control or a termination
              as defined in Section 4.2(b) occurs, the Plan shall no longer be
              subject to amendment, change, substitution, deletion, revocation
              or termination in any respect whatsoever (in the latter case, as
              it affects the terminated Participant).

              6.3   Form of Amendment. The form of any amendment or termination
              of the Plan shall be a written instrument signed by a duly
              authorized officer or officers of the Company, certifying that
              the amendment or termination has been approved by the Board. An
              amendment of the Plan shall automatically effect a corresponding
              amendment to all Participants' rights hereunder. A termination of

                                       5

<PAGE>   6

              the Plan shall automatically effect a termination of all
              Participants' rights and benefits hereunder.

                                   ARTICLE VII
                                  MISCELLANEOUS

              7.1   Indemnification. If a Participant institutes any legal
              action seeking to obtain or enforce, or is required to defend in
              any legal action the validity or enforceability of, any right or
              benefit provided by the Plan, the Company will pay for all
              reasonable legal fees and expenses incurred by such Participant
              in the course of such action (subject to reimbursement by the
              Participant if he does not substantially prevail in such action).

              7.2   Employment Status. The Plan does not constitute a contract
              of employment or impose on the Participant or the Company or any
              of its Subsidiaries any obligation to retain the Participant as
              an employee, to change the status of the Participant's
              employment, or to change the Company's policies or those of its
              Subsidiaries regarding termination of employment.

              7.3   Validity and Severability. The invalidity or
              unenforceability of any provision of the Plan shall not affect
              the validity or enforceability of any other provision of the
              Plan, which shall remain in full force and effect, and any
              prohibition or enforceability in any jurisdiction shall not
              invalidate or render unenforceable such provision in any other
              jurisdiction.

              7.4   Governing Law. The validity, interpretation, construction
              and performance of the Plan shall in all respects be governed by
              the laws of the State of Delaware, other than the conflict of law
              provisions of such laws.

                                       6

<PAGE>   7

                                   SCHEDULE A

                              List of Participants

Rajiv Enand
Mark Tapling
Mark Finkel
Richard Joslin

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