Document:

EX-10.1

 

    EXHIBIT 10.1

 

	 	 	 
	

    
    

	
 
	
    
    

 

 

    Procurement
    Frame Contract

    Ref.: Airbus/MAT/CON/353

    between

    

    EADS Deutschland GmbH

    Postfach

    81663 Munich/Germany

    

    - hereafter called “Purchaser” -

    

    and

    

    RTI International Metals Inc.

    P.O. Box 269

    1000 Warren Avenue

    Niles, Ohio
    44446-0269,
    U.S.A.

    

    - hereafter called “Supplier” -

 

    

    1

 

    Between

 

    EADS Deutschland GmbH

    Postfach 80 11 60

    81663 Munich / Germany

 

    German “Gesellschaft mit beschränkter Haftung”
    (GmbH) having a share capital of Ten Million Euros whose
    registered office is located in Munich, registered in the Munich
    Trade and Company register under HRB 107 648 Amtsgericht
    Muenchen and whose national V.A.T. identification number is
    DE167015661.

 

    EADS Deutschland GmbH being the corporate entity legally
    responsible for contract adherence by EADS and the Beneficiary
    Companies.

 

    Represented by Antoine GAUGLER in
    his/her
    capacity as EADS Lead Buyer for Titanium Wrought Products.

 

    Hereinafter referred to as the “Purchaser”,
    being the Lead Buyer for the EADS Group of Companies. The Lead
    Buyer for the EADS Group of Companies having the responsibility
    for contract adherence for EADS.

 

    And

 

    RTI International Metals Inc.

    P.O. Box 269

    1000 Warren Avenue

    Niles, Ohio
    44446-0269,
    U.S.A.

 

    RTI International Metals, Inc., with headquarters located at
    1000 Warren Avenue, Niles, Ohio 44446, USA, incorporated under
    the laws of the State of Ohio.

 

    Represented by David Hall in his capacity as Managing Director,
    RTI Europe Ltd, a subsidiary of RTI International Metals, Inc.

 

    Hereinafter referred to as the “Supplier”

    

    2

 

    CONTENTS

 

	 	 	 	 	 	 	 
	

    PREAMBLE

	
 
	
	
 
	

	

    Article 1.
    

	
 
	
    TERMINOLOGY
    
	
 
	
	
    5
    
	

	

    Article 2.
    

	
 
	
    OBJECT, EXPRESSION OF NEEDS, SCOPE
    OF CONTRACT, CAPACITY
    
	
 
	
	
    6
    
	

	

    Article 3.
    

	
 
	
    EFFECTIVE DATE, DURATION,
    EXTENSION OF DURATION
    
	
 
	
	
    8
    
	

	

    Article 4.
    

	
 
	
    APPLICABLE DOCUMENTS
    
	
 
	
	
    8
    
	

	

    Article 5.
    

	
 
	
    FINANCIAL PROVISIONS
    
	
 
	
	
    9
    
	

	

    Article 6.
    

	
 
	
    QUALITY
    
	
 
	
	
    10
    
	

	

    Article 7.
    

	
 
	
    LOGISTICS
    
	
 
	
	
    13
    
	

	

    Article 8.
    

	
 
	
    HAZARDOUS MATERIALS AND GOODS
    
	
 
	
	
    16
    
	

	

    Article 9.
    

	
 
	
    DELAY IN DELIVERY
    
	
 
	
	
    17
    
	

	

    Article 10.
    

	
 
	
    WARRANTIES
    
	
 
	
	
    17
    
	

	

    Article 11.
    

	
 
	
    OFFSET, SALE PROMOTIONS
    
	
 
	
	
    17
    
	

	

    Article 12.
    

	
 
	
    NOTIFICATION
    
	
 
	
	
    18
    
	

	

    Article 13.
    

	
 
	
    CIVIL LIABILITY, INSURANCE
    
	
 
	
	
    19
    
	

	

    Article 14.
    

	
 
	
    ACCESS TO SUPPLIER’S
    PREMISES, AUDITS, INFORMATION
    
	
 
	
	
    21
    
	

	

    Article 15.
    

	
 
	
    PUBLICITY
    
	
 
	
	
    21
    
	

	

    Article 16.
    

	
 
	
    INTELLECTUAL PROPERTY
    
	
 
	
	
    22
    
	

	

    Article 17.
    

	
 
	
    CONTRACT AMENDMENT
    
	
 
	
	
    23
    
	

	

    Article 18.
    

	
 
	
    ASSIGNMENT
    
	
 
	
	
    23
    
	

	

    Article 19.
    

	
 
	
    TERMINATION
    
	
 
	
	
    23
    
	

	

    Article 20.
    

	
 
	
    MODIFICATION OF THE
    SUPPLIER’S LEGAL SITUATION
    
	
 
	
	
    25
    
	

	

    Article 21.
    

	
 
	
    FORCE MAJEURE
    
	
 
	
	
    25
    
	

	

    Article 22.
    

	
 
	
    PRECEDENCE
    
	
 
	
	
    25
    
	

	

    Article 23.
    

	
 
	
    SEVERABILITY
    
	
 
	
	
    26
    
	

	

    Article 24.
    

	
 
	
    ARTICLES AND
    PARAGRAPH HEADINGS
    
	
 
	
	
    26
    
	

	

    Article 25.
    

	
 
	
    ENTIRE AGREEMENT
    
	
 
	
	
    26
    
	

	

    Article 26.
    

	
 
	
    NON WAIVER
    
	
 
	
	
    26
    
	

	

    Article 27.
    

	
 
	
    FINANCIAL INFORMATION
    
	
 
	
	
    26
    
	

	

    Article 28.
    

	
 
	
    APPLICABLE LAW AND SETTLEMENT OF
    DISPUTES
    
	
 
	
	
    26
    
	

 

    RECORD OF
    CONTRACT AMENDMENTS

 

	 	 	 	 	 
	

    Amendments

	
 
	

    Article(s) Modified

	
 
	

    Purpose of Modification

	 

    

    3

 

    PREAMBLE

 

    Whereas:

 

    EADS has been constituted from various companies with the aim to
    achieve optimum performance in all areas including the supply
    chain, one tool for improving performance being this frame
    contract;

 

    The Purchaser is in charge of coordinating the joint procurement
    of the EADS group of companies, and in the capacity of Lead
    Buyer for EADS is responsible for contract adherence for EADS
    and has the authority to act on behalf of the Beneficiary
    Companies;

 

    The Purchaser has to face a fluctuating and highly competitive
    market, implying the maintenance of its products and services at
    a high level of competitiveness and quality, and constant
    adaptation to the requirements of the Purchaser’s Customers;

 

    The Purchaser wishes to entrust the supply of Titanium Wrought
    Products to a professional supplier specialising in the said
    supply and capable of:

 

			
	 	    • 
	
    complying in the long term with the technical, commercial,
    industrial, safety, quality and support requirements such as
    specified by the Purchaser and those derived from the practices
    of the aeronautics industry;

	 
	 	    • 
	
    maintaining and constantly improving the competitiveness of its
    products and associated services, particularly in terms of
    quality and of cost and manufacturing / delivery cycle reduction
    of the said products and associated services;

	 
	 	    • 
	
    operating in an international co-operation framework;

	 
	 	    • 
	
    assuming part of the risks and constraints inherent in EADS
    programmes

 

    The Supplier is a leading producer of superior quality titanium
    mill products for the aerospace industry, which as acknowledged
    above, is a fluctuating and highly competitive market. The
    titanium industry in which the Supplier operates is also highly
    competitive and has historically operated under cyclical
    conditions.

 

    Supplier is subjected to the intense competitive nature of the
    titanium industry, as well as the cyclicality and
    competitiveness of the aerospace industry. Due to the nature of
    these industries in which Supplier participates, the impact on
    Suppliers business is subject to market impacts that can
    significantly affect Supplier’s ability to manufacture its
    products in an efficient and effective manner, consistent with
    good business practices.

 

    Supplier wishes to more efficiently and effectively manage its
    manufacturing capabilities by utilising long-term agreements for
    the sale of its products in order to optimise mill performance,
    raw material ordering and availability, and operations
    scheduling;

 

    The Supplier, having full knowledge of the high level of
    aeronautics-related requirements in terms of quality, safety,
    airworthiness, continuity and competitiveness, has replied
    favourably to the Purchaser’s request for proposals and
    declares, as a professional and specialist of this type of
    manufacture, that it possesses the technical potential, know-how
    and resources necessary to design, develop, manufacture, deliver
    and support the Products to be supplied to the Purchaser and the
    Beneficiary Companies in this context;

 

    In order to meet the commitments hereunder, the Supplier shall
    have to make capacity expansions and shall rely upon the
    benefits of the Contract to recover its investment:

 

			
	 	    • 
	
    by signing the Contract: the Supplier accepts to manufacture,
    deliver and sell the Products in compliance with the terms and
    conditions of the Contract;

	 
	 	    • 
	
    the Supplier commits to supply all EADS Beneficiary Companies
    without preference to one or the other at the best world market
    levels offered by the Supplier for similar products with similar
    technical requirements and at similar levels of service;

	 
	 	    • 
	
    the Purchaser commits to support the Sponge requirements by
    providing for, and committing, sources of titanium Sponge
    sufficient to produce the mill products requirements of this
    Contract.

    

    4

 

 

    NOW THEREFORE the Parties have agreed as follows:

 

		
	
    Article 1:  
	
    TERMINOLOGY

 

    For the purpose of Contract execution and interpretation, the
    following terms, singular or plural, shall have the following
    meanings whenever the first letter of the term is a capital
    letter:

 

    “Aerospace Related Products”:  means

 

    either: aircraft or apparatus or vehicles for launching,
    supporting or testing such aircraft including aerial drone
    aircraft

 

    or: vehicles, instruments or other apparatus capable of
    operation in the air (inside and/ or outside the earth’s
    atmosphere) including manned or unmanned spacecraft or vehicles
    or apparatus for launching, supporting or testing the foregoing,
    and including missiles

 

    or: vehicles or instruments or other apparatus or products
    intended primarily for use in the defence area.

 

    “Aviation Authorities”:  means
    Airworthiness Authorities such as DGAC, CAA, LBA, DAC, FAA.

 

    “Beneficiary Companies”:  means the
    EADS companies located in the European Union listed in
    Appendix 6 (List of Beneficiary Companies) and which are
    authorized to place Procurement Orders, provided no binding
    contracts exist between the said EADS companies and Business
    Units with the Supplier.

 

    “Business Day”:  shall mean any day
    other than Saturday, Sunday, or legal holiday in the State of
    Ohio.

 

    “Calendar Day”:  shall mean the
    consecutive days of the week or month without regard to
    Saturdays, Sundays or legal holidays.

 

    “Contract”:  means this document, all
    the Appendices hereto, as well as its Amendments as and when
    applicable.

 

    “Counter-Acceptance”:  means
    inspection by the Purchaser, or the Beneficiary Company placing
    the Procurement Order, of the apparent Product conformity,
    performed after delivery to a Plant. The Counter-Acceptance is a
    right of the Purchaser, or the Beneficiary Company, which does
    not prejudice in any manner whatsoever the right of recourse for
    faulty workmanship
    and/or
    hidden defects detected on the Product, the warranty
    and/or other
    liabilities.

 

    “Customer”:  means the Aerospace
    Related Product end user(s), whether buyers or lessees.

 

    “Defect”:  has the meaning defined by
    standard ISO 9000:2002.

 

    “Delivery Date”:  shall mean the date
    when the product arrives at the European facility designated in
    the Procurement Order.

 

    “EDI”:  Electronic Data Interchange.
    EDI consists in the transfer between two computer systems of
    data structured according to an approved standard, organised in
    machine-readable message format, which can be processed
    automatically only in one possible way in compliance with legal
    requirements, as further defined in the Interchange Agreement to
    be negotiated.

 

    Or “Web-EDI”:  in the case of
    transmission performed via Internet (Web Server and Browser) in
    compliance with the definition given in the Interchange
    Agreement.

 

    “List of Applicable Documents” or
    “List”:  means the documents listed
    in Article 4 (Applicable Documents) and Appendix 4
    (List of Applicable Documents), applicable to Product design,
    definition, manufacture, delivery and support.

 

    “NCD”:  means the Non Conformity or
    Default as defined in standard ISO 9000:2001.

 

    “Non Conformity”:  has the meaning
    defined by standard ISO 8402.

    

    5

 

    “Plant”:  means the Beneficiary
    Company’s Plant indicated in the Procurement Order and
    located in the European Union.

 

    “Procurement Order”:  means the order
    placed for the Products which refers to the Contract, issued by
    the Purchaser or an EADS Beneficiary Company and transmitted to
    the Supplier according to the provisions of Article 7
    (Logistics).

 

    “Product”:  means titanium wrought
    products and associated services to be delivered / performed by
    the Supplier in pursuance of the Contract.

 

    “Purchaser”:  means either EADS
    Deutschland GmbH or any of the EADS group companies as listed in
    Appendix 6 (List of Beneficiary Companies).

 

    “Purchaser Enabled Supplier”:  means
    any agreed Supplier of the Purchaser which the Purchaser and
    Supplier have mutually agreed in writing may take advantage of
    the conditions of this contract based on similar service levels
    for items listed in Appendix 2 (List of Products, Product
    Prices and Volume), as listed in Appendix 8
    (Purchaser’s Enabled Suppliers).

 

    “Sponge”:  means titanium sponge, or
    a comparable substitution of qualified titanium ingots. It is
    contemplated that during the term of this Contract, Purchaser
    may be in a position to substitute titanium ingots in lieu of
    titanium Sponge in comparable quantities to satisfy the Sponge
    requirements necessary to produce the mill products hereunder.
    In such case, the parties agree to mutually negotiate the
    appropriate substitution quantities and prices.

 

    “Technical Requirement
    Specifications”:  means the Purchaser’s
    document defining the Product in terms of technical requirements.

 

		
	
    Article 2:  
	
    OBJECT,
    EXPRESSION OF NEEDS, SCOPE OF CONTRACT, CAPACITY

 

		
	
    2.1  
	
    Object

 

    The Contract defines the terms and conditions under which the
    Supplier shall deliver the Products:

 

    (i) in compliance with the Purchaser’s technical
    requirements such as defined in Appendix 1 (Technical
    Requirements Specification);

 

    (ii) as listed in Appendix 2 (List of Products,
    Product Prices and Volume).

 

    Product supply shall take place according to the Procurement
    Orders placed with reference to the Contract, which will be:

 

    (i) issued to suit the Purchaser’s or Beneficiary
    Company’s needs; and

 

    (ii) sent to the Supplier in compliance with the provisions
    of Article 7 (Logistics).

 

    The Contract defines the total volume by product category that
    the Purchaser and Beneficiary Companies shall purchase on an
    annual basis. The Purchaser shall be responsible for providing
    an independent supply of raw materials known as Sponge to
    support the products as shown in Appendix 2 (List of
    Products, Product Prices and Volume).

 

    The Contract does not grant a guarantee of exclusivity.

 

		
	
    2.2  
	
    Scope of
    Contract

 

    The terms and conditions of the Contract shall apply to the
    Beneficiary Companies which will place their own Procurement
    Orders with the Supplier, with reference to the Contract,
    provided service terms and conditions do not vary.

 

    The Supplier shall apply the same price, lead time and quality
    conditions as those applicable under the Contract to the
    Beneficiary Companies placing Procurement Orders on behalf of
    the Purchaser in pursuance of an

    

    6

 

    Aerospace Related Product Programme. Procurement Orders under
    this Agreement shall conspicuously reference RTI/EADS Contract
    Airbus/MAT/CON/353.

 

		
	
    2.3  
	
    Capacity

 

    Provided the Purchaser supplies the Supplier with accurate
    forecast updated on a minimum quarterly basis, the Supplier
    shall ensure that manufacturing capacity is and remains
    available to support the Purchaser’s requirements covered
    by this Contract and any associated Procurement Orders, unless
    higher volumes are required and mutually agreed upon.

 

		
	
    2.4  
	
    Purchaser’s
    Enabled Suppliers

 

    The Supplier shall be prepared, if required by the Purchaser, to
    enter into contractual arrangements with the Purchaser’s
    Enabled Suppliers, as defined herein, and to apply the same
    prices, lead times and quality conditions as are set out in this
    Contract to its commercial relationship with such Enabled
    Suppliers. The Purchaser’s Enabled Suppliers will place
    their own orders- in accordance with the terms of this Contract
    or as provided for in Article 2.4.10 below, pursuant to the
    Product programme or any programme to which the Product relates.

 

    The Purchaser, the Supplier and certain of the Purchaser’s
    manufacturing suppliers (hereinafter “Enabled
    Suppliers”) have reached agreement regarding the Enabling
    of the supply of Products covered by this Contract from the
    Supplier to the Enabled Suppliers detailed in Appendix 8
    (Purchaser Enabled Suppliers) hereto. The terms of Enabling of
    Product shall be as follows:

 

    2.4.1 The Purchaser and the Supplier have agreed prices and
    leadtimes applicable to supply of all Product covered by this
    Contract.

 

    2.4.2 The Purchaser shall issue to the Supplier, through this
    Contract, details of its Enabled Suppliers who shall be required
    to call-off Product covered by this Contract from the Supplier.
    Enabled Suppliers as have been agreed between the Purchaser and
    the Supplier for inclusion in the Contract are detailed in
    Annex 6 and Annex 8 hereto. This Annex may be updated
    from time to time to include new or delete existing Enabled
    Suppliers by mutual agreement between the Purchaser and the
    Supplier.

 

    2.4.3 The Purchaser shall provide to the Supplier a bill of
    materials detailing, on a
    case-by-case
    basis, the Product required for each Enabled Supplier. This
    information shall be provided via the currently utilised ConBid
    allocation notification format. Individual Enabled Supplier work
    package requirements shall be allocated a specific number (the
    “Work Package Number”) and these shall be detailed via
    the current ConBid allocation notification format.

 

    2.4.4 The prices and leadtimes detailed in Appendix 2 (List
    of Products, Product Prices and Volume) hereto shall apply to
    all Product called-off, whether such call-off is initiated by
    the Purchaser or an Enabled Supplier.

 

    2.4.5 Where delivery requirements and associated costs, specific
    to an individual Enabled Supplier, are required these shall be
    negotiated and agreed between the Purchaser and the Supplier and
    the relevant details incorporated in Appendix 2 (List of
    Products, Product Prices and Volume) hereto. All associated
    costs shall be for the account of the affected Enabled Supplier.

 

    2.4.6 Orders may be issued to the Supplier by either the
    Purchaser or Enabled Suppliers in accordance with the terms of
    this Contract. In any event Orders shall detail Product
    requirements in terms of part number (where applicable), Work
    Package Number, description, specification, quantity, Delivery
    Due Dates and price. Where Orders are placed on the Supplier by
    an Enabled Supplier payment for Product delivered in accordance
    with such Orders shall be the responsibility of and for the
    account of the Enabled Supplier.

 

    2.4.7 Forecast volume requirements shall be detailed in
    Annex 9 (Forecast Volumes)hereto. The Parties recognise
    that these forecasts are for the purpose of planning deliveries
    of contract volumes only and do not constitute Orders.

    

    7

 

    2.4.8 In the event that the Supplier believes that any of the
    Enabled Suppliers are not calling-off Product against this
    Contract the Supplier shall notify the Purchaser who will
    undertake an investigation to resolve the situation as required.

 

    2.4.9 The terms of this Article 2.4 shall be reflected in
    the contracts in place between the Purchaser and the Enabled
    Suppliers.

 

    2.4.10 With the exception of Article 3 (Effective Date,
    Duration, Extension of Duration) and Article 19
    (Termination) and those elements within Article 5
    (Financial Provisions) related to agreement of the base prices
    of the Products as defined in Appendix 2 (List of Products,
    Product Prices and Leadtimes), Enabled Suppliers shall be
    entitled to invoke all the terms of this Contract in so far as
    they relate to the Product covered by and called-off against
    this Contract.

 

    2.4.11 In the unlikely event that an Enabled Supplier’s
    payment performance is consistently unacceptable to the Supplier
    in relation to Product supplied in good faith in accordance with
    the terms of this Contract, the Supplier shall be entitled to
    approach the Purchaser to jointly review such issues and decided
    whether it is appropriate to continue with the Enabling of
    Product to such Enabled Supplier or whether alternative supply
    arrangements are required. However, the Supplier shall be
    obligated to demonstrate to the Purchaser all such alleged
    financial performance issues and actions undertaken to resolve
    such issues directly with the applicable Enabled Supplier.

 

		
	
    Article 3:  
	
    EFFECTIVE
    DATE, DURATION, EXTENSION OF DURATION

 

		
	
    3.1  
	
    Effective
    Date and Duration

 

    The Contract shall be effective from 1 January 2006 and
    will remain in force until completion of the last Procurement
    Order committed for delivery before 31 December 2015
    inclusive.

 

    With effect from 1 January 2012, in the event that the
    Purchaser is unable to meet its commitment to supply Sponge
    sufficient to enable the Supplier to produce the Material
    requirements of this Contract, the Purchaser shall pay to the
    Supplier, as liquidated damages, a sum of six dollars and sixty
    cents per kilo ($6.60 / kg) for each kilogramme of Material not
    procured during the period 1 January 2012 through
    31 December 2015 inclusive up to a maximum of sixty-two
    million, four hundred and nine thousand, six hundred US dollars
    ($62,409,600)

 

		
	
    3.2  
	
    Extension
    of Duration

 

    The Parties shall meet at the latest on 1 April 2015 to
    agree on a possible extension of the duration of the Contract.
    If for the purposes of contract extension, a re-negotiation of
    Product prices is necessary, the Parties agree that the
    reference price taken as a basis for such re-negotiations shall
    be the Product prices applicable in the last delivery year. If,
    for the purpose of the Contract extension, a re-negotiation of
    Product prices is necessary, the Parties hereby agree that such
    pricing will be mutually acceptable.

 

    Any extension of the Contract duration shall be formalised by an
    Amendment to the Contract.

 

    The obligations of each Party which are to continue to apply
    after the date of Contract expiry or termination, such as but
    not limited to those relating to Confidentiality and
    Intellectual Property and Product Liability Insurance in
    particular shall remain in force between the Parties.

 

		
	
    Article 4:  
	
    APPLICABLE
    DOCUMENTS

 

		
	
    4.1  
	
    List of
    Applicable Documents and Management of Document
    Changes

 

    In addition to the documents listed in Appendix 4 (List of
    Applicable Documents), the documents below shall be considered
    as Applicable Documents:

 

    (i) the Appendices to the Contract;

    

    8

 

    (ii) the documents transmitted by the Purchaser and neces;
    sary to the Supplier to comply with the specific manufacturing
    conditions imposed by the Purchaser, in particular the documents
    relating to specific technologies;

 

    (iii) national or international standards and legal or
    regulatory documents; all relevant documents specific to the
    activity and tasks under Supplier’s responsibility. The
    Supplier is responsible for:

 

    (a) obtaining from the publishers the national and
    international standards and all documents of a legal or
    regulatory nature;

 

    (b) for complying with all such Applicable
    Documents; and

 

    (c) for applying all revisions of such documents.

 

    The supplemental List of Applicable Documents is given in
    Appendix 4 (List of Applicable Documents).

 

    Any addition of a new document to the Applicable Documents List,
    or modification of the said List, will be notified to the
    Supplier by the submission of an amendment and an update of the
    List, in two (2) original copies, signed by the Purchaser.
    Except in the case of disagreement, the Supplier undertakes to
    return one (1) of the signed copies to the Purchaser. The
    above mentioned modification shall be applicable upon receipt of
    the signed copy by the Purchaser.

 

    The date of signing of the amendment will be regarded as date of
    revision of the List.

 

    Applicable Documents and associated updates provided by the
    Purchaser shall be transmitted to the Supplier by way of
    electronic transmission. In this case, if the List has not been
    updated and no objection is received from the Supplier within
    ten (10) business days following its transmission, the new
    issue of the said Documents shall be applicable at the end of
    the said period.

 

    Unless otherwise agreed between the Parties, the Supplier
    undertakes to comply with the recommendations included in the
    said Applicable Documents and their updates, and to apply these
    Documents at their latest issue.

 

		
	
    4.2  
	
    Persons
    Responsible for Applicable Documents

 

    The Purchaser shall appoint a person responsible for ensuring
    delivery to the Supplier of the Applicable Documents and
    associated updates, and shall communicate
    his/her name
    to the Supplier.

 

    The Supplier shall appoint a person responsible for:

 

    (i) receiving all Applicable Documents;

 

    (ii) distributing them to the different Supplier’s
    in-house departments or services; and

 

    (iii) storing them under the conditions set forth in
    Article 18.1 (Assignment) and shall communicate
    his/her name
    to the Purchaser.

 

    Article 5:  FINANCIAL
    PROVISIONS

 

		
	
    5.1  
	
    Price

 

    Individual Product prices, as specified in Appendix 2 (List
    of Products, Product Prices and Volume), are DDU IncoTerms 2000
    to any destination within North America, the United Kingdom or
    mainland Europe specified by the Purchaser, all inclusive prices
    and taxes (excluding any applicable import duties or value added
    taxes), contractual, firm and non revisable under the Contract,
    except in the following cases:

 

    (i) price revisions relating to Product technical
    modifications requested and approved by the Purchaser or
    Beneficiary Company;

 

    (ii) price reductions agreed by the Parties in pursuance of
    the provisions defined in Article 5.3 (Cost Reductions);

    

    9

 

    (iii) delivery surcharge, to be agreed on a
    case-by-case
    basis, to destinations outside of North America, the United
    Kingdom or mainland Europe.

 

    The price of each Product includes in particular all expenses
    relating to Product delivery, especially packing, packaging and
    transport of the Products to the place of delivery, as well as
    all taxes (excluding value added taxes), duties (except import
    duties), fees or other related contributions applicable in the
    Supplier’s country of origin which shall be borne by the
    Supplier and are in consideration of the minimum shipment
    quantities of one thousand kilograms (1,000 kg) for billet or
    fastener bloom or five hundred kilograms (500 kg) for all other
    Materials.

 

    The Supplier shall be responsible for the costs associated with
    the procurement of Sponge, on an Enabled Supplier basis, from
    the Purchaser’s allocated Sponge supplier as detailed in
    Appendix 10 (Raw Material Supply). Sponge shall be supplied
    in accordance with the Supplier’s Sponge Specification and
    Supplier defined packaging, transportation and logistics
    requirements. The costs of such Sponge procurement activities
    are incorporated within the Product prices detailed in
    Appendix 2 (List of Products, Product Prices and Volume)
    and the Purchaser shall not be liable for any additional costs
    incurred unless agreed in writing between the Parties.

 

		
	
    5.2  
	
    Currency

 

    The currency used for invoicing and payment purposes is the
    United States Dollar ($ US).

 

		
	
    5.3  
	
    Cost
    Reductions

 

    The Supplier and the Purchaser shall work together in a
    proactive way to develop Cost Reductions. Individual Cost
    Reduction projects made by mutual agreement between the Supplier
    and the Purchaser, will detail a minimum target two percent (2%)
    of savings and timescales for completion.

 

		
	
    5.4  
	
    Invoicing

 

    Except in the case of EDI transmission, the Supplier’s
    invoices shall be issued in three (3) original copies:

 

    (i) two (2) copies of which shall be sent “For
    the Attention of the Accounts Department” of the Plant
    issuing the Procurement Order;

 

    (ii) the third copy shall be sent imperatively with the
    Product shipping documents.

 

    Each invoice shall bear:

 

    (i) the designation, reference and quantity of the Products
    delivered, the reference number(s) of each Procurement Order;

 

    (ii) the names and addresses of the Parties;

 

    (iii) any price reduction and any statutory or legal
    indication;

 

    (iv) amount inclusive of tax, VAT amount which will be
    specified as a separate line item on all invoices; and

 

    (v) reference to this Contract Airbus/MAT/CON/353(or
    similar reference clearly identifying this agreement).

 

		
	
    5.5  
	
    Payment
    Terms

 

    Unless the Products are rejected during the Counter-Acceptance,
    the invoices shall be by wire transfer within thirty
    (30) calendar days from date of invoice.

 

    This lead time runs from the effective delivery date of the
    Product to the Beneficiary Company’s Plant.

 

    Article 6:  QUALITY

 

    The Supplier agrees to comply with the provisions of the quality
    instructions of the Purchaser and the Beneficiary Companies as
    set forth in Appendix 4 (List of Applicable Documents).

    

    10

 

		
	
    6.1  
	
    Surveillance
    by the Aviation Authorities

 

    This Contract relates to a programme placed under the
    surveillance of the Aviation Authorities. Should a surveillance
    action be instigated by the Aviation Authorities or on their
    behalf, the Supplier shall:

 

    (i) communicate to the representatives of the said Aviation
    Authorities or to the persons mandated by them, any information
    of a technical nature relating to the Procurement Orders in
    progress; and

 

    (ii) provide to the above mentioned persons or their
    representatives free access to the premises where they intend to
    carry out this surveillance action.

 

    The cost, if any, of such surveillance, and all obligations or
    consequences thereof may be negotiated between the Supplier and
    Purchaser.

 

		
	
    6.2  
	
    Conditions
    Associated with the Observance of Quality Provisions

 

    6.2.1 Qualification
    of Supplier/Product Pair

 

    6.2.1.1 Since the Supplier and the Products are qualified by the
    Purchaser and if necessary by the Beneficiary Companies for the
    manufacture of the Aerospace Related Products and Aerospace
    Related Products spare parts, and since such qualification is
    required to ensure continued airworthiness, the Supplier shall:

 

    (i) deliver all Products to the Purchaser, the Beneficiary
    Companies and the Customers in compliance with the
    specifications; and

 

    (ii) use the same manufacturing and inspection processes as
    those used in the qualification tests, unless otherwise
    agreed; and

 

    (iii) not change its production site or modify the
    Products, where the process is fixed, without the approval of
    the Purchaser; and

 

    (iv) inform the Purchaser forthwith, by registered mail
    with acknowledgement of receipt, of any event likely to affect
    the Product’s definition or the manufacturing and
    inspection processes.

 

    6.2.1.2 If the Supplier/Supplier Product qualification is
    withdrawn by the Purchaser due to acts or omissions of the
    Supplier, the Parties shall work together to resolve such issues
    in a timely manner. In the event that issues related to the
    Supplier’s qualification cannot be resolved to the
    satisfaction of the Purchaser the Purchaser reserves the right
    to terminate this Contract and all associated Orders in
    accordance with Article 19.2 (Termination for
    Supplier’s Default). In the event that issues related to
    Product qualification cannot be resolved to the satisfaction of
    the Purchaser the Purchaser reserves the right to terminate
    those provisions of this Contract specifically related to the
    affected Product and all associated Orders in accordance with
    Article 19.2 (Termination for Supplier’s Default).

 

    6.2.1.3 The Supplier undertakes to collaborate to the approval
    of its Products according to the new AIMS and ABS common AIRBUS
    specifications.

 

    6.2.2 Assessments
    and Approvals

 

    The Supplier must satisfy the assessments below, performed by
    the Purchaser or for and on behalf of the Purchaser:

 

    (i) quality system of the manufacturing site according to
    the twenty topics of PREN 9100;

 

    (ii) logistic system suited to the conditions agreed with
    the Purchaser.

 

    6.2.3 Improvement
    of the Means of Production and Organisation

 

    The Supplier shall implement all improvements of the means of
    production
    and/or
    organisation:

 

    (i) deemed necessary by the Supplier to meet Contract
    requirements under optimum conditions; or

 

    (ii) agreed jointly by the Parties.

    

    11

 

    6.2.4 Supplier’s
    Responsibility

 

    The Supplier shall be solely and entirely responsible towards
    the Purchaser for the fulfilment of its obligations pursuant to
    the Contract. The qualification, inspection and surveillance
    actions carried out by the Purchaser, the Aviation Authorities
    and/or their
    authorised representatives for the purposes of the
    Contract’s
    and/or the
    Procurement Order’s fulfilment shall not reduce or release
    the Supplier’s responsibility with respect to the Products
    manufactured and delivered to the Purchaser under the Contract.

 

		
	
    6.3  
	
    Inspection,
    Acceptance, Conformity

 

    The Purchaser shall delegate to the Supplier the responsibility
    of:

 

    (i) verifying that the Products are, before delivery, in
    conformity with the requirements defined in the Technical
    Requirement Specification and the provisions set forth in each
    Procurement Order
    and/or the
    Contract;

 

    (ii) certifying such conformity by a delivery notice
    operating as a declaration of conformity;

 

    (iii) performing the Product’s acceptance.

 

    Notwithstanding such delegation of responsibility from the
    Purchaser to the Supplier, the Purchaser reserves the right to
    perform a Counter-Acceptance of the Products delivered within
    twelve (12) business days following the date of delivery.

 

    Unless a refusal is notified by the Purchaser to the Supplier
    further to a Counter-Acceptance for one of the reasons such as
    listed below, the Products delivered shall be deemed accepted as
    of the thirteenth
    (13th)
    business day following the date of delivery.

 

    If a defect or a Non Conformity is detected on a Product during
    Counter-Acceptance, the said Product shall be returned to the
    Supplier under the conditions defined in Article 7.6.1
    (Delivery) and the provisions of Article 9 (Delay in
    Delivery) shall apply.

 

		
	
    6.4  
	
    Quality
    Performance—Non Conformity/Defect

 

    6.4.1 Indicators

 

    Product’s quality performance shall be measured using the
    indicators defined in the document of Appendix 4 (List of
    Applicable Documents).

 

    6.4.2 NCD
    Detected During Counter-Acceptance or During Installation on
    Aerospace Related Product

 

    All NCDs detected by the Purchaser during Counter-Acceptance or
    installation on the Aerospace Related Product shall be notified
    in writing to the Supplier. In this case, the Products shall be
    returned under the conditions of Article 7.6.1 (Delivery)
    to the Supplier, to be replaced within the lead times required
    by the Purchaser.

 

    6.4.3 Serious,
    Repetitive NCDs or high NCD ratio

 

    In the presence of serious, repetitive NCDs or high NCD,
    detected by the Purchaser, the Purchaser shall notify the
    Supplier of the same in writing. Upon receipt of this
    notification, the Supplier shall:

 

    (i) submit to the Purchaser for approval, within eight
    (10) business days following the notification, the
    corrective actions it intends to implement; and

 

    (ii) after obtaining the Purchaser’s approval,
    implement such corrective actions within the time period agreed
    jointly by the Parties; and

 

    (iii) verify the Products to be delivered are free from any
    NCD.

 

    In the cases described in Articles 6.4.2. and 6.4.3, the
    Purchaser shall be entitled to charge the Supplier in accordance
    with Article 9 (Delay in Delivery).

    

    12

 

    6.4.3 Information
    and Communication in Case of NCDs

 

    If NCDs are detected by the Supplier, the Supplier shall inform
    forthwith the Purchaser, or Beneficiary Company placing the
    Procurement Order, in writing, specifying the type of NCD, its
    consequences and the Products delivered affected by the said
    NCD. This information shall be communicated by the Purchaser to
    the Customers and the Aviation Authorities.

 

    Any Non Conforming Product shall be subject to a request for
    concession as per the provisions of Appendix 4 (List of
    Applicable Documents).

 

    Faulty workmanship
    and/or
    hidden defects detected after Product delivery and requiring
    concessions shall be processed according to the same procedure
    as that described in Appendix 4 (List of Applicable
    Documents), and shall have the same consequences.

 

		
	
    6.5  
	
    Keeping
    Documents Specific to the Supplier

 

    Until scrapping of the last in-service Aerospace Related Product
    on which the Product is installed, the Supplier shall preserve
    all technical documents and especially all certificates of
    conformity of the Products and technical documents relating to
    the Products, and shall present them upon the Purchaser’s
    request. The Supplier agrees not to dispose of them, in any
    manner whatsoever, without the Purchaser’s prior agreement
    in writing.

 

		
	
    6.6  
	
    Failure
    of the Quality or Logistic Systems—Serious or Repetitive
    NCDs

 

    In case of failure of the Supplier’s Quality Assurance or
    Logistic system, or in the cases mentioned in Article 6.4.3
    above, and notwithstanding any other right vested in the
    Purchaser hereunder, the Purchaser reserves the right to call
    upon the services of an audit company to perform, on the
    Supplier’s premises and at Supplier’s expenses, the
    inspection or surveillance of the failing Products or processes.

 

    Such inspection or surveillance shall cease as soon as the
    corrective measures agreed by the Parties are implemented by the
    Supplier and deemed satisfactory by the Purchaser.

 

    Article 7:  LOGISTICS

 

    The conditions under which the Supplier shall deliver the
    Products shall be governed by the provisions defined in:

 

    (i) this Article 7 defining Contract performance in
    terms of logistics;

 

    (ii) the Interchange Agreement of Appendix 5, duly
    signed;

 

    (iii) the Logistic Conditions of Appendix 3.

 

		
	
    7.1  
	
    Performance
    Conditions

 

    7.1.1 Leadtimes

 

    The lead-times for all Products covered by this Contract shall
    be subject to the agreed capacity, specified by commodity per
    year. The Supplier will provide the Purchaser’s relevant
    Plants with a monthly update on current mill lead-time however,
    subject to a rolling eighteen (18) month forecast which
    reflects future needs based upon Aircraft sales, the lead-time
    shall not exceed forty (40) weeks.

 

    7.1.2 The
    Purchaser Shall:

 

    (i) improve communication to the Supplier of long term
    forecasts by transmitting by fax,
    e-mail or
    mail the updates of the Aerospace Related Product manufacturing
    programme in which the Product is integrated on a minimum
    quarterly basis for each line item and location;

 

    (ii) ensure the forecasts are as close as possible to its
    needs;

    

    13

 

    (iii) perform, in collaboration with the Supplier, a
    feasibility study, especially in case of significant increases
    of production rates or significant change to the forecasted
    needs;

 

    (iv) inform the Supplier, in writing, of any changes in its
    organisation and of any significant events likely to cause a
    rescheduling of Product that would interfere with the Suppliers
    operations;

 

    (v) inform the Supplier, in writing, of any changes to its
    contract with the Sponge supplier which may affect the
    commercial agreement between the Purchaser and the Supplier,
    including but not limited to changes to the volume of Sponge to
    be supplied or the applicable pricing, in which event no changes
    may be implemented between the Purchaser and the Sponge supplier
    without the prior approval of the Supplier.

 

    7.1.2 The
    Supplier Shall:

 

    (i) accept and execute, for the complete duration of the
    Contract, the Procurement Orders placed in compliance with the
    terms of the Contract;

 

    (ii) implement all means and procedures necessary to ensure
    total reliability of Product deliveries;

 

    (iii) adapt its industrial device to suit the changes to
    the Aerospace Related Product manufacturing Programme
    communicated by the Purchaser;

 

    (iv) inform the Purchaser within a reasonable period of
    time, in writing of any significant changes in its organisation,
    production site and, within a reasonable period of time, of any
    event likely to cause delay or interruption of the deliveries,
    and of any exceptional measures taken in order to comply with
    contractual lead times;

 

    (v) provide monthly indicators on deliveries;

 

    (vi) participate in the logistic reviews initiated
    periodically by the Purchaser to analyse delivery performance,
    logistic problems experienced during this period and
    corresponding corrective actions.

 

    (vii) inform the Purchaser of any changes in its
    requirements for Sponge, including but not limited to
    Specification, packaging, transportation or logistics
    requirements which may require an amendment to the
    Purchaser’s contract with its Sponge supplier and in
    particular may have an impact on the purchase price of the
    Sponge, in which event no changes may be implemented between the
    Supplier and the Sponge supplier without the prior approval of
    the Purchaser.

 

		
	
    7.2  
	
    Interchange
    Agreement

 

    It is the intention of the Purchaser to promote and develop
    procurement methods through EDI. Consequently, the Supplier
    commits to collaborate with the Purchaser for possible
    implementation of such methods, upon corresponding terms and
    conditions to be mutually agreed.

 

		
	
    7.3  
	
    Procurement
    Methods

 

    The Purchaser shall place Procurement Orders in compliance with
    the terms of the Contract.

 

    The Procurement Orders may be communicated to the Supplier using
    either of the following methods:

 

    (i) Procurement Orders in the form of purchase orders;

 

    (ii) Procurement Orders transmitted by EDI.

 

    Irrespective of the method used, a Procurement Order shall
    specify for each type of supply the reference, the quantity, the
    date and the place of delivery. In addition, each Procurement
    Order shall conspicuously reference
    RTI/EADS
    Contract Airbus/MAT/CON/353.

 

    7.3.1 Procurement
    Orders in Form of Purchase Orders

 

    In addition to the above, the Parties agree that any change to
    an order shall be made under the conditions defined in
    Article 17 (Contract Amendment).

    

    14

 

    7.3.2 Procurement
    Orders by EDI

 

    The Purchaser shall communicate to the Supplier, by EDI,
    Procurement plans and Delivery calls such as defined below.

 

    7.3.2.1 Procurement
    Plans

 

    These are comprised of two parts:

 

    (i) one part referred to as “flexible horizon”
    (FH) corresponding to the Purchaser’s forecasted needs for
    a given period of time. The Purchaser undertakes to order the
    total quantity specified in the FH part. The Supplier agrees
    that the delivery dates specified in this FH part may vary
    depending on the changes to the Purchaser’s needs.

 

    (ii) another part referred to as “provisional
    horizon” (PH) corresponding to the Purchaser’s
    forecasted needs beyond the period of time defined in the FH
    part. The Supplier agrees that the forecasts of the PH part do
    not imply any undertaking by the Purchaser in terms of
    quantities and lead times; they simply enable the Supplier to
    plan its production and provisioning operations.

 

    7.3.2.2 Delivery
    Calls

 

    They correspond to Procurement Orders for a firm delivery in
    terms of quantity and lead time, to an agreed place and
    according to a delivery cycle specified in the Logistic
    Conditions. A Delivery Call may be issued out of the Procurement
    Plan.

 

    7.3.2.3
    Maximum Period of Time Between Two Procurement Plans
    (PP)

 

    Apart from exceptional cases, the maximum period of time between
    two Procurement Plans has to be agreed between the Parties.

 

		
	
    7.4  
	
    Acceptance
    of Procurement Orders

 

    Subject to comply with the terms and conditions of this
    contract, Procurement Orders placed by way of purchase orders
    shall be deemed accepted without reservation by the Supplier at
    the latest fifteen (15) business days following their
    dispatch, if no refusal or reservation is notified by the
    Supplier within this period, including if no acknowledgement of
    receipt is received.

 

    For Procurement Orders placed by EDI, they shall be deemed
    accepted at a time to be specified in the Interchange Agreement.

 

		
	
    7.5  
	
    Agreed
    Procurement Method

 

    The Logistic Conditions specify the procurement method agreed
    between the Parties and the logistic data exchanged.

 

		
	
    7.6  
	
    Clauses Common
    to the Two Procurement Methods

 

    7.6.1 Delivery

 

    On the Delivery Date specified in the Procurement Order, the
    Products shall be delivered DDU as per the IncoTerms 2000 by the
    carrier designated by the Supplier, to the place indicated in
    the Procurement Order. In a case of defect or Non Conformity of
    a Product delivered to the Purchaser, or in a case of excess
    Products delivery, the Purchaser, after notifying the Supplier
    in writing, shall return the Products, the costs and risks
    associated with the transport of the Product from a Plant to the
    Supplier’s factory and back shall be borne by the Supplier.

    

    15

 

    7.6.2 Product
    Delivery Leadtimes

 

    The Delivery Dates specified in the Procurement Order are
    binding and determine the date of arrival of the Product to the
    place of delivery indicated in the Procurement Order, provided
    such dates are within the agreed forty (40) week maximum
    limit or as otherwise mutually agreed to in writing between the
    Supplier and Purchaser.

 

    The Supplier shall notify the Purchaser in writing, within
    fifteen (15) business days, of any event likely to delay
    the deliveries, and shall propose new Product delivery lead
    times as soon as practical thereafter.

 

    Depending on the facts reported and the retrofit plans set up,
    the Purchaser shall decide whether or not it will grant an
    extension of the delivery lead time, and hence a modification of
    the delivery terms defined in the Procurement Order concerned.

 

    Modification of the delivery terms shall be granted to the
    Supplier only for a delay not due to Supplier’s default or
    negligence.

 

    For the time of its duration, the sole effect of a delivery lead
    time extension shall be to avoid the application of the
    penalties for late delivery under Article 10 (Delay in
    Delivery) and the risk of Contract termination for
    Supplier’s default under the conditions set out in
    Article 19 (Termination).

 

    7.6.3 Documents
    Accompanying Products Deliveries

 

    The original of the declarations
    and/or
    certificates of conformity
    and/or of
    airworthiness shall be provided with all Product deliveries.
    Each Product delivery shall be formalised by a delivery notice
    issued in duplicate and bearing in particular the following
    information:

 

    (i) the Procurement Order number;

 

    (ii) the place of delivery;

 

    (iii) the quantities delivered.

 

    7.6.4 Packing
    and Packaging

 

    The Supplier shall comply with the Purchaser’s and
    Beneficiary Company’s requirements and instructions in
    force at the time of delivery.

 

    7.6.5 Risk
    Transfer, Title Transfer, Retention of Property
    Title

 

    The risks of loss and damages shall be transferred from the
    Supplier to the Purchaser in accordance with the IncoTerm
    defined in Article 7.6.1 above, except if the said loss or
    damages result from the non fulfilment by the Supplier of one of
    the packing and packaging obligations, or are due to the
    Supplier’s negligence.

 

    Transfer of the property title of the Products delivered by the
    Supplier to the Purchaser shall be effective upon acceptance of
    the said Products by the Purchaser, provided such acceptance
    shall take place within five(5) business days of delivery of the
    Product.

 

    Article 8:  HAZARDOUS
    MATERIALS AND GOODS

 

    The Supplier shall comply with the applicable regulations in
    force in the European Union and in such a country in which the
    Plant has its domicile. For deliveries in France, the following
    regulations will apply:

 

    (i) “ADR”: refers to the European agreement on
    international road transport of hazardous goods, and the French
    by-law (“arrêté”) of
    December 17, 1998 referred to as “ADR by-law”;

 

    (ii) “IATA”: refers to the regulations of the
    International Air Transport Association on air transport of
    hazardous goods, and the French by-law of May 12, 1997;

 

    (iii) “RID”: refers to the regulations concerning
    international rail transport of hazardous goods, and the French
    by-law of December 17, 1998 referred to as “RID”;

    

    16

 

    (iv) “IMDG”: refers to the international code for
    sea transportation of hazardous goods, and the French by-law of
    January 27, 1999;

 

    (v) “Hazardous Material”: refers to the goods,
    preparations, materials or equipment having a content of
    substances likely to harm individual health, the environment and
    the goods, for their whole life cycle and whose dangerousness
    classification may change over time.

 

    Should the Product be classified as a Hazardous Material, and
    depending on the mode of transport agreed with the Purchaser,
    the Supplier shall comply, without reservation, with the ADR,
    IATA, RID and IMDG regulations in force.

 

    Article 9:  DELAY
    IN DELIVERY

 

    Should the required Delivery Date not be met, as agreed in the
    appropriate delivery schedule, and except in case of “Force
    Majeure” or excusable delays, the Supplier shall be
    automatically deemed to have a Delay in Delivery without any
    reminder being required from the Purchaser. Excusable delays
    include, but are not limited to, reschedules at the direction of
    the Purchaser, Sponge supply related issues which are caused by
    a material breach by the Sponge supplier of its agreement with
    the Purchaser, war, riot, acts of government, fires, floods,
    epidemics, quarantine restrictions, freight embargoes, strikes,
    labor disputes, unusually severe weather and unforeseen
    equipment breakdowns.

 

    In event of a Delay in Delivery that is not excusable, the
    Purchaser shall be entitled to claim one percent (1%) of the
    sales price per week late, up to an agreed price of ten percent
    (10%) of the value of the overdue Product and respecting a grace
    period of ten (10) business days.

 

    In addition, the Supplier undertakes to build up buffer stocks
    in Europe likely to prevent any risk of shortages.

 

    Article 10:  WARRANTIES

 

    The Supplier warrants to the Purchaser that all Materials
    supplied are:

 

    (i) Free from defects in raw materials;

 

    (ii) Free from defects in workmanship, including without
    limitation manufacturing processes utilised by the Supplier;

 

    (iii) Free from defects arising from the Supplier’s
    failure to conform to the Technical Requirement Specifications.

 

    For the purpose of this Contract, the warranty period for all
    Products supplied shall be thirty six (36) months
    commencing from the date of delivery of the Product to the
    Purchaser. The warranty base shall cover the costs of all
    necessary rework or replacement as well as all reasonable
    manufacturing cost of the Purchaser, to be mutually agreed upon
    provision of written justification by Purchaser, if replacement
    is required.

 

    Article 11:  OFFSET,
    SALES PROMOTION

 

    The Supplier agrees to support the Purchaser, for the purposes
    of this Article 11 including the EADS Group and the
    Beneficiary Companies, in fulfilling its/their present and
    future offset obligations. The Lead Buyer will be responsible
    for co-ordinating all requests and additional requirements
    regarding offset on behalf of EADS and the Beneficiary Companies.

 

    When applicable and no more than twice per calendar year, the
    Purchaser shall inform the Supplier of it’s offset
    requirements. Upon request, the Supplier shall submit to the
    Purchaser within one calendar month of the original request a
    programme that meets this offset requirement.

 

    Such support from the Supplier shall include:

 

    (i) On the request of the Purchaser the Supplier shall
    provide the aggregate total value of goods purchased and
    companies purchased from in the country specified by the
    Purchaser which may be used for offset purposes by EADS. The
    total value of offset purchases made by the Supplier in the
    manufacture of the

    

    17

 

    Product for this contract in the specified country shall be
    retained solely for use in the fulfilment of the offset
    obligations of the EADS Group.

 

    (ii) With the exception of the sourcing of Sponge and
    applicable pricing, which shall be the responsibility of the
    Purchaser, the Supplier is solely responsible for all
    procurement activities related to the purchasing of goods
    and/or
    services necessary for the manufacture and supply of the
    Products from accredited companies approved by the Supplier.
    Such responsibility is subject to, but not limited to, the
    commercial viability, performance, technical competence,
    statutory legal restrictions, contractual restrictions with
    existing suppliers and production capacity of the company
    measured at the Suppliers discretion.

 

    Subject to Article 11 (ii) above, the Supplier shall
    co-operate and work with the Purchaser to make available a
    target offset value of 5% of the total sales revenue from this
    contract with the Purchaser in countries specified by the
    Purchaser.

 

    The Supplier shall inform the Purchaser of any future investment
    plans in any country which could be used to fulfil this offset
    requirement provided that information is in the public domain or
    is covered by an additional confidentiality agreement.

 

    The Purchaser shall assist the Supplier, if so requested by the
    Supplier, to identify suppliers for goods
    and/or
    services in offset countries.

 

    The Supplier agrees to support the Purchaser in obtaining the
    necessary offset credit acceptances for the purchases in the
    offset country.

 

    Article 12:  NOTIFICATION

 

    Any notification, invoice or correspondence to be given under
    this Contract
    and/or any
    Procurement Order, shall be in writing in English and delivered
    by hand or sent by the appropriate means to the addresses below
    or any other address notified in writing to the relevant Party.

 

    (i) All matters related to this Contract, its amendments
    and its administration shall be communicated between the EADS
    Lead Buyer and the Supplier. For information purposes, at the
    time of signature of this contract, the following are the points
    of contact:

 

	 	 	 
	

    Purchaser

	
 
	
    Supplier

	

    Antoine GAUGLER
    

	
 
	
    David Hall
    

	

    EADS Lead Buyer
    

	
 
	
    Managing Director
    

	
 
	
 
	
    Airbus SAS RTI Europe Limited
    

	

    31060 Toulouse Cedex,
    France

	
 
	
    Riverside Estate, Fazeley,
    Tamworth, Staffordshire  B78 3RW, ENGLAND

	

    (+33-
    561-93-57-21
    

	
 
	
    +44-1827-262266
    

	

    Copy to:
    

	
 
	
    Dawne S. Hickton,
    

	
 
	
 
	
    General Counsel,
    

	
 
	
 
	
    RTI International Metals, Inc.
    

	
 
	
 
	
    1000 Warren Avenue, Niles,
    Ohio

	
 
	
 
	
    44446, USA

	
 
	
 
	
    +1-330-544-7818
    

	
 
	
 
	
    Fax: 1 330-544-7701
    

 

    (ii) For any notification or communication in connection
    with the Procurement Orders:

 

    For the attention of the Logistic Department of the Beneficiary
    Company issuing the Procurement Order, whose postal address is
    indicated in the said Procurement Order;

    

    18

 

    (iii) For any notification or communication in connection
    with the invoices
    and/or their
    payment:

 

    For the attention of the Accounts Department of the
    Beneficiary Company concerned whose address is indicated in each
    Procurement Order.

 

    Article 13:  CIVIL
    LIABILITY, INSURANCE

 

		
	
    13.1  
	
    Civil
    Liability

 

    Unless otherwise specified in the Contract, the repair cost of
    damages caused by either Party during Contract performance shall
    be borne as follows:

 

    13.1.1 For Indemnification of Damage to the Personnel of
    Either Party:  Damages of any nature whatsoever to
    the personnel of the Purchaser or the Supplier shall be borne by
    each Party respectively even if the other Party is liable for
    the said damages, except in a case of gross negligence. These
    provisions are limited to the relationship between the Parties
    and do not prejudice the rights and legal actions which the
    accident victims, their successors, the Social Security
    Administration and the welfare organisations are entitled to
    exercise.

 

    13.1.2 For Indemnification of Damage Caused by Either Party
    to the Personnel of a Third Party:  Damages of any
    nature whatsoever caused by either Party to the personnel of a
    third party shall be settled in compliance with the rules of law.

 

    13.1.3 For Indemnification of Damage Caused by a Party to the
    Real Property and Movable Goods Property of the Other Party or a
    Third Party:  Damages of any nature whatsoever
    caused by a Party to the real property and movable goods
    property of the other Party or a third party shall be settled in
    compliance with the rules of law.

 

    The Supplier shall be solely responsible for its Products and
    the fulfilment of its manufacturing obligations.

 

    The Supplier performing work on the Purchaser’s premises
    shall provide in relation to the personnel dedicated to the said
    work:

 

    (i) a certificate stating that the personnel is employed in
    compliance with the labour law provisions;

 

    (ii) if applicable, a certificate stating that the foreign
    personnel is authorised to carry out a professional activity in
    France.

 

		
	
    13.2  
	
    Insurance

 

    13.2.1 Insurance
    Policies to be Subscribed

 

    On the date of coming into force of the Contract or before the
    start of the work performed on the Purchaser’s premises,
    the Supplier shall communicate to the Purchaser the insurance
    certificates covering:

 

    (i) General and Professional Civil Liability;

 

    (ii) damages to the goods or aircraft entrusted (Civil
    liability—damages to third parties due to the goods or
    aircraft entrusted and damages to the goods or aircraft
    entrusted);

 

    (iii) Product Civil Liability after delivery and grounding;

 

    In the last two cases, the Supplier shall be entitled, subject
    to the prior insurers’ approval and against payment of a
    premium, to adhere to the insurance policies subscribed by the
    Purchaser for and on behalf of the Purchaser.

 

    The insurance certificates shall mention the amount of the
    warranties and designate the Purchaser as the direct beneficiary
    of the indemnities in the case of damages to its property,
    without any option for deduction from the said indemnities of
    the franchise applicable to the Supplier.

 

    Under no circumstances shall the franchises applicable to the
    Supplier be enforceable against the Purchaser.

    

    19

 

    The Supplier shall be under the obligation to declare to the
    Purchaser any accident within forty eight (48) hours
    following its occurrence, or within twenty four (24) hours
    of Supplier’s knowledge of such occurrence, it being
    specified that any forfeiture opposed by the insurers against
    the Supplier due to its activity will imply the obligation for
    the Supplier to bear the full cost of the prejudice.

 

    The Supplier shall obtain from its insurers full adhesion to the
    provisions below.

 

    13.2.2 Damage
    to Goods and Aircraft Entrusted by the Purchaser

 

    The terms “Property entrusted” covers all goods or
    aircraft leased or entrusted to the Supplier for the performance
    of the work ordered.

 

    For damages to property and aircraft entrusted, the Purchaser
    shall indemnify and hold harmless the Supplier, except in cases
    of wilful damages, gross negligence or wilful misconduct, beyond
    two hundred thousand Euros (€200,000) per claim for
    property entrusted by the Purchaser, and beyond three hundred
    thousand Euros (€300,000) per claim for aircraft entrusted
    or work performed on the aircraft. The Supplier shall be solely
    responsible for subscribing an insurance to cover the property
    and aircraft entrusted for this amount (or their real value if
    the latter is less than the above threshold). This insurance
    shall cover the property and aircraft entrusted for their value
    as new, against all types of insurable risks or damages.

 

    However, if the Supplier holds an insurance the amount of which
    is higher than the above-mentioned amount, it shall notify the
    Purchaser of the said insurance and shall not reduce its
    insurance cover, whose amount shall be the limit of its
    liability.

 

    The Supplier will notify the Purchaser of any accident within
    twenty four (24) hours following its occurrence, it being
    specified that any forfeiture opposed by the insurers and due to
    the Supplier shall imply for the Supplier the obligation to bear
    the full cost of the claim.

 

    For any land motor vehicle such as (the list is not exhaustive)
    lifting or handling equipment, pallet trucks, tow motors, lift
    trucks, etc., entrusted or leased by the Purchaser, the Supplier
    will subscribe a Civil Liability insurance policy covering
    damages to third parties, replacing by subrogation, if
    applicable, the Purchaser’s insurance cover should the
    Purchaser’s insurance policy be activated.

 

    13.2.3 Damage
    to Goods Entrusted by the Supplier

 

    The Supplier and its insurers declare they waive any recourse
    they would be entitled to exercise against the Purchaser and its
    insurers following any damage that may affect the
    Supplier’s movable goods, irrespective of the nature and
    origin of the damages, except in a case of wilful misconduct by
    the Purchaser.

 

    13.2.4 General
    and Professional Civil Liability for Work Performed on the
    Purchaser’s Premises

 

    The Supplier shall provide evidence of the subscription of a
    Civil Liability insurance policy covering the damages caused to
    the Purchaser as a result of the presence of the Supplier’s
    employees on the Purchaser’s premises.

 

    This insurance shall cover an unlimited amount for body damages
    and, in the case of consequential material and immaterial
    damages, a cover at least equal to three million Euros
    (€3,000,000) per claim, beyond which sum the
    Purchaser’s insurers will not exercise any recourse against
    the Supplier.

 

    Any malicious act, gross negligence, inexcusable fault or wilful
    misconduct, will prevent the Supplier from benefiting of the
    foregoing waiver.

 

    The Supplier and its insurers agree to waive the right of
    recourse they would be entitled to exercise against the
    Purchaser and its insurers following any claim involving the
    Purchaser’s Civil Liability, except in a case of wilful
    misconduct by the Purchaser.

 

    13.2.5 Product
    Civil Liability After Delivery

 

    The Supplier shall subscribe an insurance for an amount at least
    equal to one hundred and fifty million Euros (€150,000,000)
    per event and per year of insurance to cover its liability for
    damages occurring after performance of

    

    20

 

    its services
    and/or
    Products delivery pursuant to the Contract which are connected
    to the said services
    and/or
    Products, and more generally for all consequences that may
    legally be claimed against the Supplier.

 

    This insurance limitation does not constitute a limitation of
    the Supplier’s civil liability amount after delivery to the
    Purchaser or any third party.

 

    Article 14:  ACCESS
    TO SUPPLIER’S PREMISES, AUDITS, INFORMATION

 

    The Purchaser’s representatives will have access during
    working days and hours, subject to reasonable advance notice:

 

    (i) to the premises where the Products are manufactured,
    whether these are the Purchaser’s premises or those of the
    Purchaser’s subcontractors;

 

    (ii) to all technical documentation relating to the
    Contract, especially to the Industrial Dossier relating to the
    Product manufacturing industrial process, subject to compliance
    with the conditions of Article 16.1 (Confidentiality);

 

    (iii) the right, with the Supplier’s assistance, to
    check the Product manufacturing progress status up to and
    including the Product acceptance tests performed on the
    Supplier’s premises.

 

    The representatives of the Aviation Authorities or their
    delegates, as well as the Customers’ representatives shall
    have:

 

    (i) access during working days and hours to the premises
    where the Products are manufactured, whether these are the
    Purchaser’s premises or those of the Purchaser’s
    subcontractors, subject to previous agreement
    and/or the
    presence of Purchaser’s representatives, and with
    reasonable advance notice;

 

    (ii) the right, with the Supplier’s assistance, to
    monitor Product manufacture up to their acceptance on the
    Supplier’s premises.

 

    For this purpose, the Supplier shall help and facilitate the
    issuance of all necessary authorisations to access its factories
    and those of its subcontractors.

 

    Subject to compliance with the conditions of Article 16.1
    (Confidentiality), the Supplier shall provide access to all
    information of any nature whatsoever necessary for the
    performance of quality, logistic or financial audits by
    Purchaser’s representatives or third parties duly
    authorised by the Purchaser.

 

    The Supplier shall communicate annually to the Purchaser its
    balance sheet and annual report.

 

    Article 15:  PUBLICITY

 

    Except as required by law or regulation, neither Party shall use
    the other Party’s name, the name of the Aerospace Related
    Product, or the name of the Products specific to the Purchaser
    or Supplier for publicity or commercial purposes,
    and/or for
    the promotion of its own image, or any other type of publicity,
    without the other Party’s previous written agreement.

 

    Moreover, neither party shall exhibit or distribute to third
    parties the Items specific to the other Party, except with that
    Party’s authorisation in writing.

 

    In addition, it must be noted that no publicity is authorised,
    even for internal corporate purposes, in the case of suspension
    or withdrawal of the qualification by the Purchaser, or in the
    case of Contract termination for Supplier’s default, except
    as required by law or regulation. If this Contract is determined
    to be a material contract to Supplier’s business under
    U.S. Securities laws, Supplier will abide by the public
    disclosure requirements of such laws but will take all available
    precautions to seek confidential treatment of the contract by
    the U.S. Securities and Exchange Commission.

 

    It is expressly agreed that the Supplier may make public
    announcement of this contract upon execution.

    

    21

 

    Article 16:  INTELLECTUAL
    PROPERTY

 

		
	
    16.1  
	
    Confidentiality

 

    The Parties agree to keep confidential for the whole duration of
    the Contract and ten (10) years after its expiry
    and/or
    termination, the confidential information of any nature or form
    whatsoever made available to each other in the course of
    pre-contractual negotiations and Contract performance.

 

    Each Party shall secure for the benefit of the other Party the
    assurance that the personnel of each Party will observe the
    confidential nature of the said information for the same ten
    (10) years after the Contracts expiry
    and/or
    termination. Confidential information shall include commercially
    sensitive information such as, but not limited to, quantities,
    build rates, corresponding aeroplane programme, pricing and
    cost, as well as all technological information including
    manufacturing techniques, product application, information
    regarding the aeroplane itself or aeroplane sub-components.

 

    The confidentiality obligation shall remain valid as long as:

 

    (i) the information does not belong to the public domain;

 

    (ii) the respective Party has not given its prior approval
    in writing as to such disclosure.

 

    The confidentiality obligation shall not apply to information:

 

    (i) which is publicly known to belong to the public domain
    at the time of disclosure;

 

    (ii) which is known legitimately by a Party prior to
    disclosure, providing however an evidence can be provided by the
    disclosing Party through supporting documents duly dated;

 

    (iii) which is communicated legitimately by a third party
    to the disclosing Party.

 

		
	
    16.2  
	
    Infringement

 

    The Supplier shall indemnify and hold harmless the Purchaser
    from and against any third party claims relating to the
    intellectual property of Products delivered to the Purchaser
    under this Contract, and shall bear all consequences and
    financial sanctions that may result from the said claims for the
    Purchaser.

 

    Moreover, the Supplier shall, at its own cost, either obtain the
    right for the Purchaser to continue using the Products
    delivered, or replace or modify the said Products so they cease
    to constitute an infringement, while ensuring the functions
    defined initially by the Parties, or, if the foregoing is not
    feasible take back and replace the Products delivered by
    equivalent Products approved by the Purchaser, without prejudice
    to the damages that may be claimed to compensate the prejudice
    sustained by the Purchaser.

 

    In addition, the Supplier hereby declares that any delivery to
    the Purchaser corresponds, for the Products delivered, to the
    exhaustion of its intellectual property rights for all countries
    in the world and that, consequently, no infringement action
    shall be taken against the Purchaser, its intermediaries and its
    Customers for the possession, use, repair, import
    and/or
    putting on the market of one of the Products delivered by the
    Supplier to the Purchaser under this Contract.

 

    For the purposes of this Article 16.2 the definition of
    Sponge shall specifically exclude Titanium Ingot which may be
    manufactured and supplied by the Purchaser’s Sponge
    supplier. The Supplier shall indemnify and hold harmless the
    Purchaser from and against any third party claims relating to
    the intellectual property of Sponge, procured by the Supplier
    under this Contract on an Enabled Supplier basis against the
    Purchaser’s contract for Sponge, and shall bear all
    consequences and financial sanctions that may result from the
    said claims for the Purchaser.

 

    This warranty of quiet enjoyment (“garantie
    d’éviction”) and the associated obligations
    shall remain effective as long as one of the Aerospace Related
    Products delivered is operated by the Purchaser.

    

    22

 

    Article 17:  CONTRACT
    AMENDMENT

 

    Any modification to any terms of this Contract
    and/or of a
    Procurement Order shall be formalised by an amendment signed by
    duly authorised representative(s) of each of the Parties hereto.

 

    Article 18:  ASSIGNMENT

 

    This Contract has been concluded intuitu personae between
    the Purchaser and the Supplier. The rights
    and/or
    obligations of a Party under this Contract shall under no
    circumstances be assigned or transferred, or be the subject of a
    novation, delegation, in whole or in part, without the prior
    written consent of the other Party; such consent shall not be
    unreasonably withheld.

 

    Article 19:  TERMINATION

 

		
	
    19.1  
	
    Termination
    for Force Majeure

 

    If, by reason of Force Majeure, either Party cannot resume
    normal fulfilment of its obligations within six
    (6) calendar months following the date of notification of
    the said event, this Contract
    and/or
    Procurement Orders in progress may be terminated automatically
    by the other Party without liability for direct or consequential
    damages. The termination notice shall specify the effective
    termination date. As of the effective termination date, the
    Parties shall proceed to the termination account in accordance
    with the provisions of Article 19.4 (Termination Account).

 

		
	
    19.2  
	
    Termination
    for Supplier’s Default

 

    In case of Supplier’s non compliance or non fulfilment, in
    whole or in part, of any of its obligations pursuant to this
    Contract
    and/or a
    Procurement Order for reasons other than those due to a case of
    Force Majeure, the Purchaser may, after formal notice sent by
    registered mail with acknowledgement of receipt remaining
    without effect after sixty (60) calendar days, terminate
    automatically, for Supplier’s default, the Contract
    and/or
    Procurement Orders in progress, in whole or in part, without
    prejudice to the damages the Purchaser would be entitled to
    claim as an indemnification for the damage sustained.

 

    The notification shall specify the effective date of
    termination. As of the effective termination date, the Parties
    shall proceed to the termination account in accordance with the
    provisions of Article 19.4 (Termination Account). If:

 

    (i) after initiation of insolvency proceedings against the
    Supplier, the receiver or the Supplier, with the authorisation
    of the insolvency judge (“juge-commissaire”),
    decides not to continue this Contract
    and/or
    Procurement Order fulfilment; or

 

    (ii) after initiation of liquidation proceedings due to
    discontinuance of all business by the Supplier or obvious
    incapacity of the Supplier to redress the company:

 

    the Purchaser shall be entitled to terminate forthwith this
    Contract
    and/or
    Procurement Orders in progress in whole or in part, by
    registered mail with acknowledgement of receipt, without
    compensation to the Supplier. As of the effective termination
    date, the Parties shall proceed to the termination account in
    accordance with the provisions of Article 19.4 (Termination
    Account).

 

    In the case set forth in Article 20 (Modification of
    Supplier’s Legal Situation), the Purchaser shall be
    entitled to terminate automatically this Contract
    and/or
    Procurement Orders without compensation to the Supplier by
    registered mail with acknowledgement of receipt. The
    notification shall specify the effective termination date. As of
    the effective termination date, the Parties shall proceed to the
    termination account in accordance with the provisions of
    Article 19.4 (Termination Account).

 

		
	
    19.3  
	
    Termination
    for Purchaser’s Default

 

    In the case of Purchaser’s non compliance or non
    fulfilment, in whole or in part, of any of its obligations
    pursuant to this Contract
    and/or
    Procurement Order for reasons other then those due to a case of
    Force Majeure, the Supplier may, after formal notice sent by
    registered mail with acknowledgement of receipt remaining
    without effect for sixty (60) calendar days, terminate
    automatically, for the Purchasers default, the Contract
    and/or
    Procurement

    

    23

 

    Orders in progress, in whole or in part, without prejudice to
    the damages the Supplier would be entitled to claim as an
    indemnification for the damages sustained.

 

    The notification shall specify the effective date of
    termination. As of the effective termination date, the Parties
    shall proceed to the termination account in accordance with the
    provisions of Article 19.4 (Termination Account). If:

 

    (i) after initiation of insolvency proceedings against the
    Purchaser, the receiver or Purchaser, with the authorisation of
    the insolvency judge (“juge-commissaire”),
    decides not to continue this Contract
    and/or
    Procurement Order fulfilment; or

 

    (ii) after initiation of liquidation proceedings due to
    discontinuance of all business by the Purchaser or obvious
    incapacity of the Purchaser to redress the company;

 

    the Supplier shall be entitled to terminate forthwith this
    Contract
    and/or
    Procurement Orders in progress in whole or in part, by
    registered mail with acknowledgement of receipt, without
    compensation to the Purchaser. As of the effective termination
    date, the Parties shall proceed to the termination account in
    accordance with the provisions of Article 19.4 (Termination
    Account).

 

    In the case set forth in Article 20 (Modification of
    Supplier’s Legal Situation), the Supplier shall be entitled
    to terminate automatically this Contract
    and/or
    Procurement Orders without compensation to the Purchaser by
    registered mail with acknowledgement of receipt. The
    notification shall specify the effective termination date. As of
    the effective termination date, the Parties shall proceed to the
    termination account in accordance with the provisions of
    Article 19.4 (Termination Account).

 

		
	
    19.4  
	
    Termination
    Account

 

    As of the effective termination date, the Supplier shall cease
    all operations relating to this Contract and the Procurement
    Orders so terminated, in its plants and in the plants of its own
    suppliers and subcontractors. The Supplier shall send
    immediately to the Purchaser a status report for the Products in
    progress, accompanied with all necessary justification documents.

 

    The termination account shall not include any expenses
    corresponding to Product manufacturing activities subsequent to
    the date of notification of termination, and shall be presented
    as follows:

 

    (i) At Supplier’s Debit:

 

			
	 	    • 
	
    the amounts already paid to the Supplier by the Purchaser for
    the Products delivered before the effective termination date,

	 
	 	    • 
	
    the amount of the penalties due and not paid by the
    Supplier, and

	 
	 	    • 
	
    if the termination is due to Supplier’s default:

	 
	 	    • 
	
    the amount of the expenses incurred by the Purchaser to remedy
    the Supplier’s default, including but not limited to
    expenses relating to the transfer of manufacturing to the
    Purchaser’s plants or to the plants of another supplier,
    change of site, transfer, installation and adaptation of tools
    if applicable.

	 
	 	    • 
	
    damages for all prejudices caused directly or indirectly to the
    Purchaser as a result of the termination.

 

    (ii) At Supplier’s Credit:

 

			
	 	    • 
	
    the contractual value of the Products manufactured and not
    delivered, after performance of the acceptance inspections
    within the limits of the production plan derived from the
    contractual delivery lead times and cycles;

	 
	 	    • 
	
    in the event of purchase by the Purchaser, the value of the
    Products in progress calculated according to the progress status
    on the basis of the contractual price, within the limits of the
    above-mentioned production plan, subject to compliance with the
    Quality requirements;

	 
	 	    • 
	
    the price of the procurements kept by the Supplier if any, for
    the purpose of performing the Procurement Orders terminated, if
    the Supplier cannot use them subsequently to meet third party
    needs.

    

    24

 

 

    The Supplier shall under no circumstances, under the terms of a
    termination account, receive any amount higher than the amount
    that would have been payable to it in the case of full execution
    of the Procurement Orders, or damages.

 

    The Purchaser and the Supplier shall carry out a termination
    inventory on the stocks, of raw materials, parts, equipment and
    tools. In this respect, the Purchaser shall instruct the
    Supplier to deliver or not to deliver, as appropriate, the items
    listed in the inventory.

 

    Article 20:  MODIFICATION
    OF SUPPLIER’S LEGAL SITUATION

 

    The Parties shall inform each other of any significant
    modification that may occur in the composition of the company
    capital such as changes in majority shareholding, merger,
    absorption as well as any court decision initiating insolvency
    proceedings.

 

    The Parties shall inform each other of any acquisition of
    shareholding, even in the case of a minority shareholding, by
    any company in the aerospace and defence sector, competing with
    the other party.

 

    If a third party acquires control, directly or indirectly, of
    the Supplier’s company the said third party shall guarantee
    the performance of this Contract and associated Procurement
    Orders and assume full and joint responsibility for the
    Supplier’s contractual obligations by an undertaking
    notified in writing to the Purchaser.

 

    Article 21:  FORCE
    MAJEURE

 

    A Party (“Party Affected”) shall not be held
    responsible for the non fulfilment of its contractual
    obligations due to an event of Force Majeure, i.e. an
    unforeseeable, irresistible event beyond the control of the
    Party. In this case, except in the case of a strike, subject to
    Article 21.2 here below, the contractual obligations of the
    Party Affected shall be suspended as of the date of receipt of
    the notification by the other Party.

 

    The notification and all supporting documents demonstrating the
    reality of such an event shall indicate in particular the
    foreseeable date of return to satisfactory performance of the
    Contract
    and/or
    Procurement Orders concerned, as well as the measures taken to
    remedy the consequences of the event of Force Majeure. The Party
    Affected shall keep the other Party regularly informed of the
    evolution of the situation.

 

    As soon as the hindrance due to the case of Force Majeure ceases
    to exist, and subject to the provisions of Article 19.1
    (Termination for Force Majeure), the Party Affected shall inform
    the other Party forthwith and the suspended contractual
    obligations shall resume for the remaining duration of this
    Contract
    and/or
    Procurement Orders.

 

    Any case of Force Majeure not notified in writing within fifteen
    (15) business days following its occurrence shall not vest
    in the Party claiming the case of Force Majeure the right to
    enforce this Article 21.

 

    In the event of a strike at either Party’s manufacturing
    facilities, the Party affected by the strike shall:

 

    (i) advise the other Party within five (5) business
    days;

 

    (ii) make its best endeavour to comply with delivery
    schedules in force when the strike began;

 

    (iii) in the event that the original delivery schedule will
    be affected by the strike, provide a recovery plan to be
    mutually agreed by both Parties within fifteen
    (15) business days from the notification of the strike.

 

    Article 22:  PRECEDENCE

 

    In the event of any ambiguity or conflict arising between the
    terms of the different contractual documents below, the order of
    precedence between all such terms shall be as follows:

 

    (i) the terms of this Contract with the exception of those
    defined in the Appendices;

 

    (ii) the terms of the Appendices;

 

    (iii) the terms of the Procurement Orders.

    

    25

 

    Specific technical and/or quality requirements of each
    Beneficiary Company, owing to the different nature of each
    Beneficiary Company’s business, shall be more closely
    defined in the Procurement Order. Should a technical/quality
    conflict exist between the terms of this contract and the
    Procurement Order, then the Procurement Order shall have
    precedence and this precedence shall relate to that technical /
    quality issue only and shall be valid for the duration of the
    specific Procurement Order only.

 

    Article 23:  SEVERABILITY

 

    Should any of the provisions of this Contract is found by a
    Court to be void or unenforceable, the Parties shall negotiate
    in good faith and agree, within a period of two (2) months
    commencing on the date of the said Court decision, the terms of
    a provision which has the same economic and commercial effect as
    the provision so found to be void or unenforceable. The new
    provision shall be integrated in this Contract in accordance
    with the provisions of Article 17 (Contract Amendment).

 

    The Parties agree that, should any of the provisions of this
    Contract be deemed void or unenforceable, the other provisions
    of this Contract would remain effective.

 

    Article 24:  ARTICLES AND
    PARAGRAPH HEADINGS

 

    Articles and paragraph headings in this Contract are included
    for ease reference only and shall not affect the construction of
    this Contract.

 

    Article 25:  ENTIRE
    AGREEMENT

 

    This Contract supersedes any previous declarations,
    negotiations, undertakings, communications, verbal or written,
    approvals, arrangements or other commitments made between the
    Parties in relation to the matters dealt with herein and
    represents the entire understanding between the Parties in
    relation thereto.

 

    Article 26:  NON-WAIVER

 

    Any delay or omission of any Party in exercising any of its
    right, power or privilege under this Contract
    and/or the
    Procurement Orders, shall not be construed as a waiver of the
    said rights and shall not prejudice subsequent application of
    the same.

 

    Article 27:  FINANCIAL
    INFORMATION

 

    The Supplier shall provide to the Purchaser on a regular basis
    financial information and data enabling the Purchaser to assess
    the Supplier financial soundness/standing. Such information
    includes, but is not limited to comprehensive profit and loss
    statements, balance sheets and cash flow statements. The
    Supplier agrees to provide additional information/comments as
    necessary from its Chief Financial Officer and its Auditors.
    Such information shall be regarded as Confidential Information
    in the meaning of Article 16.1 (Confidentiality) and shall
    be treated in the manner described therein; provided however, so
    long as Supplier is a public company, in no event shall Supplier
    be required to provide information beyond what it is required to
    provide to its owners.

 

    Article 28:  APPLICABLE
    LAW AND SETTLEMENT OF DISPUTES

 

    28.1 Applicable
    Law

 

    This Contract and all Procurement Orders placed in pursuance of
    the same shall be governed by and construed in accordance with
    the laws of France.

 

    28.2 Settlement
    of Disputes

 

    Subject to the provisions of this Article 28, in the event
    of a dispute, controversy or claim (“Dispute”) arising
    out of or in connection with the existence, validity,
    interpretation, performance or termination of this Contract
    and/or
    Procurement Order, the Parties shall use their best endeavours
    to resolve such dispute amicably by negotiations at senior
    management levels up to the respective Presidents of each Party.

    

    26

 

    If the Parties fail to resolve the dispute within a period of
    two (2) months, then such dispute shall be determined and
    settled by arbitration under the current Rules of Conciliation
    and Arbitration of the International Chamber of Commerce, by
    three (3) arbitrators appointed in accordance with the said
    Rules.

 

    The place of arbitration shall be London, United Kingdom and the
    arbitration award shall be final and binding on the Parties. The
    language to be used in the arbitral proceedings shall be English.

 

    28.3 Compliance
    with Laws

 

    28.3.1 Export
    Control

 

    Any and all obligations of Supplier to provide the Products, as
    well as any technical data, shall be subject in all respects to
    such United States laws and regulations as will from time to
    time govern the licence and delivery of technology and products
    abroad by persons subject to the jurisdiction of the United
    States, including the Export Administration Act of 1979, as
    amended, any successor legislation, and the Export
    Administration Regulations issued by the U.S. Department of
    Commerce, Bureau of Export Administration. Purchaser represents
    and warrants that it will not export or re-export the Products
    or technical data related thereto except in conformity with such
    laws and regulations.

    

    27

 

    IN WITNESS WHEREOF, the duly appointed representatives of
    the Parties have agreed to execute this Contract in two
    (2) original copies, each Party retaining one (1) of
    these copies for their records.

 

    Signed for and on behalf of RTI International Metals
    Incorporated

 

	 	 	 	 	 
	

    Signatures:
    

	
 
	
    

	
 
	
    

	

    Names:
    

	
 
	
    Timothy G. Rupert
    
	
 
	
    David Hall
    

	

    Titles:
    

	
 
	
    President and CEO
    
	
 
	
    Managing Director
    

	
 
	
 
	
    RTI International Metals Inc
    
	
 
	
    RTI Europe Ltd
    

	
 
	
 
	
 
	
 
	
 

	

    Date:
    

	
 
	
 
	
 
	
 

 

    Signed for and on behalf of EADS Deutschland GmbH and the
    EADS Beneficiary Companies

 

	 	 	 	 	 
	

    Signatures:
    

	
 
	
    

	
 
	
    

	

    Names:
    

	
 
	
    Craig Smith
    
	
 
	
    Antoine Gaugler
    

	

    Titles:
    

	
 
	
    Senior Vice President,
    
	
 
	
    Procurement Titanium Lead Buyer
    

	
 
	
 
	
    Airbus SAS
    
	
 
	
    EADS Deutschland GmbH
    

	
 
	
 
	
 
	
 
	
 

	

    Date:
    

	
 
	
 
	
 
	
 

    

    28EX-10.5

 

EHIBIT 10.5

FIRSTMERIT CORPORATION

2006 EQUITY PLAN

1.00 PURPOSE AND EFFECTIVE DATE

1.01 Purpose. This Plan is intended to foster and promote the long-term financial success of the
Company and Related Entities and to increase shareholder value by [1] providing Employees and
Directors an opportunity to acquire an ownership interest in the Company and [2] enabling the
Company and Related Entities to attract and retain the services of outstanding Employees and
Directors upon whose judgment, interest and special efforts the successful conduct of the Group’s
business is largely dependent.

1.02 Effective Date. The Plan will be effective upon its adoption by the Board and approval by the
affirmative vote of the Company’s shareholders under applicable rules and procedures, including
those prescribed under Code §§162(m) and 422. Any Award granted before shareholder approval will
be null and void if the shareholders do not approve the Plan within the period just described.
Subject to Section 13.00, the Plan will continue until the tenth anniversary of the date it is
adopted by the Board or approved by the Company’s shareholders, whichever is earliest. However,
the Equity Plan Board’s authority to issue any Performance Shares to Covered Officers will expire
no later than the first Annual Meeting that occurs in the fifth year following the year in which
the Company’s shareholders approve this Plan.

2.00 DEFINITIONS

When used in this Plan, the following words, terms and phrases have the meanings given to them in
this section unless another meaning is expressly provided elsewhere in this document or clearly
required by the context. When applying these definitions and any other word, term or phrase used
in this Plan, the form of any word, term or phrase will include any and all of its other forms.

Act. The Securities Exchange Act of 1934, as amended, or any successor statute of similar effect
even if the Company is not subject to the Act.

Annual Meeting. The annual meeting of the Company’s shareholders.

Award. Any Incentive Stock Option, Nonqualified Stock Option, Performance Share, Restricted Stock,
Stock Appreciation Right and Whole Share granted under the Plan.

Award Agreement. The written or electronic agreement between the Company and each Participant that
describes the terms and conditions of each Award and the manner in which it will or may be settled
if earned. If there is a conflict between the terms of this Plan and the terms of the Award
Agreement, the terms of this Plan will govern.

Beneficiary. The person a Participant designates to receive (or to exercise) any Plan benefit (or
right) that is unpaid (or unexercised) when the Participant dies. A Beneficiary may be designated
only by following the procedures described in Section 14.02; neither the Company nor the Committee
is required to infer a Beneficiary from any other source.

 

 

Board. The Company’s board of directors.

Cause. As defined in any written agreement between the Employee and the Company or any Related
Entity or, if there is no written agreement, one or more of the following acts of the Employee:

[1] Any act of fraud, intentional misrepresentation, embezzlement, misappropriation or
conversion by the Employee of the assets or business opportunities of the Company or any
Related Entity;

[2] Conviction of the Employee of (or plea by the Employee of guilty to) a felony (or a
misdemeanor that originally was charged as a felony but was reduced to a misdemeanor as part
of a plea bargain) or intentional and repeated violations by the Employee of the written
policies or procedures of the Company or the Employer, as the case may be;

[3] Disclosure, other than through mere inadvertence, to unauthorized persons of any
Confidential Information (as defined below);

[4] Intentional breach of any contract with or violation of any legal obligation owed to the
Company or any Related Entity;

[5] Dishonesty relating to the duties owed by the Employee to the Company or any Related
Entity;

[6] The Employee’s [a] willful and continued refusal to substantially perform assigned
duties (other than any refusal resulting from sickness or illness or while suffering from an
incapacity due to physical or mental illness, including a condition that does or may result
in a Disability), [b] willful engagement in gross misconduct materially and demonstrably
injurious to the Company or any Related Entity or [c] breach of any term of this Plan or an
Award Agreement; or

[7] Any intentional cooperation with any party attempting to effect a Change in Control
unless [a] the Board has approved or ratified that action before the Change in Control or
[b] that cooperation is required by law.

However, Cause will not arise solely because the Employee is absent from active employment during
periods of paid time off, consistent with the applicable paid time off policy of the Company or the
Employer, as the case may be, sickness or illness or while suffering from an incapacity due to
physical or mental illness, including a condition that does or may result in a Disability or other
period of absence initiated by the Employee and approved by the Company or the Employer, as the
case may be.

The term “Confidential Information” means any and all information (other than information in the
public domain) related to the Company’s or any Related Entity’s business, including all processes,
inventions, trade secrets, computer programs, technical data, drawings or designs, information
concerning pricing and pricing policies, marketing techniques, plans and forecasts, new product
information, information concerning methods and manner of operations and information relating to
the identity and location of all past, present and prospective customers and suppliers.

 

 

Change in Control. With respect to any Award subject to Code §409A, as defined under Code §409A.
With respect to any Award not subject to Code §409A, as defined in any written agreement between
the Employee and the Company or any Related Entity or, if there is no written agreement, the
occurrence of the earliest to occur of any one of the following events on or after the Effective
Date:

[1] Individuals who, on April 19, 2000, constituted the Board (the “Incumbent Directors”)
cease for any reason to constitute at least a majority of the Board, provided that any
person becoming a director subsequent to April 19, 2000 whose election or nomination for
election was approved by a vote of at least two-thirds of the then Incumbent Directors
(either by a specific vote or by approval of the proxy statement of the Company in which
such person is named as a nominee for director, without written objection to such
nomination) will be an Incumbent Director; provided, however, that no individual elected or
nominated as a director of the Company initially as a result of an actual or threatened
election contest with respect to directors or any other actual or threatened solicitation of
proxies or consents by or on behalf of any person other than the Board will ever be deemed
to be an Incumbent Director;

[2] Any “person” [as such term is defined in Section 3(a)(9) of the Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Act] becomes through any means (including those
described in subsections [3][a] through [3][f] of this definition) a “beneficial owner” (as
defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 50 percent or more of the combined voting power of the Company’s then
outstanding securities eligible to vote for the election of the Board (the “Company Voting
Securities”);

[3] Any “person” [as such term is defined in Section 3(a)(9) of the Act and as used in
Sections 13(d)(3) and 14(d)(2) of the Act] becomes a “beneficial owner” (as defined in Rule
13d-3 under the Act), directly or indirectly, of Company Voting Securities representing 25
percent or more (but less than 50 percent) of the Company Voting Securities; provided,
however, that the event described in this subsection [3] will not be deemed to be a Change
in Control for purposes of this subsection [3] by virtue of any of the following
acquisitions:

[a] By the Company or any Related Entity;

[b] By or through any employee benefit plan sponsored or maintained by the Company
or any Related Entity and described (or intended to be described) in Code §401(a);

[c] Directly through an equity compensation plan maintained by the Company or any
Related Entity, including this Plan and any program described in Code §423;

[d] By any underwriter temporarily holding securities pursuant to an offering of
such securities;

[e] By any entity or “person” [including a “group” as contemplated by Sections
13(d)(3) and 14(d)(2) of the Act] with respect to which that acquirer has

 

 

filed SEC Schedule 13G indicating that the securities were not acquired and are not
held for the purpose of or with the effect of changing or influencing, directly or
indirectly, the Company’s management or policies (regardless of whether such
acquisition of securities is considered to constitute the acquisition of control
under the Bank Holding Company Act of 1956 pursuant to Regulation Y promulgated
thereunder), unless and until that entity or person files SEC Schedule 13D, at which
point this exception will not apply to such Company Voting Securities, including
those previously subject to a SEC Schedule 13G filing; or

[f] Pursuant to a Non-Control Transaction (as defined in subsection [4] of this
definition).

[4] The consummation of a merger, consolidation, statutory share exchange or similar form of
corporate transaction involving the Company or any member of the Group that requires the
approval of the Company’s shareholders, whether with respect to such transaction or the
issuance of securities in connection with the transaction (a “Business Combination”), unless
immediately following such Business Combination:

[a] More than 50 percent of the total voting power of [i] the corporation resulting
from such Business Combination (the “Surviving Entity”), or [ii] if applicable, the
ultimate parent corporation that directly or indirectly has beneficial ownership of
100 percent of the voting securities eligible to elect directors (“Total Voting
Power”) of the Surviving Entity (the “Parent Entity”), is represented by Company
Voting Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, shares into which such Company Voting Securities
were converted pursuant to such Business Combination), and such voting power among
the holders thereof is in substantially the same proportion as the voting power of
such Company Voting Securities among the holders thereof immediately prior to the
Business Combination; and

[b] At least a majority of the members of the board of directors of the Parent
Entity (or, if there is no Parent Entity, the Surviving Entity) following the
consummation of the Business Combination were Incumbent Directors at the time of the
Board’s approval of the execution of the initial agreement providing for such
Business Combination.

Any Business Combination which satisfies all of the criteria specified in subsections 4[a]
and [b] of this definition will be deemed to be a “Non-Control Transaction”; or

[5] The shareholders of the Company approve a plan of complete liquidation or dissolution of
the Company.

Notwithstanding the foregoing, a Change in Control of the Company will not be deemed to occur
solely because any person acquires beneficial ownership of more than 25 percent of the Company
Voting Securities as a result of the acquisition of Company Voting Securities by the Company which
reduces the number of Company Voting Securities outstanding; provided that if after such
acquisition by the Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting

 

 

Securities beneficially owned by such person by more than one percent, a Change in Control of the
Company will then occur.

Notwithstanding any other provision of this Plan, the Employee will not be entitled to any amount
under this Plan if he or she acted in concert with any person or group (as defined above) to effect
a Change in Control, other than at the specific direction of the Board and in his/her capacity as
an employee of the Company or any Related Entity.

Change in Control Price. The highest price per share of Stock offered in conjunction with any
transaction resulting in a Change in Control (as determined in good faith by the Equity Plan Board
if any part of the offered price is payable other than in cash) or, in the case of a Change in
Control occurring solely by reason of events not related to a transfer of Stock, the highest Fair
Market Value of a share of Stock on any of the 30 consecutive trading days ending on the last
trading day before the Change in Control occurs.

Code. The Internal Revenue Code of 1986, as amended or superseded after the Effective Date and any
applicable rulings or regulations issued under the Code.

Committee. The Board’s Compensation Committee which also constitutes a “compensation committee”
within the meaning of Treas. Reg. §1.162-27(c)(4). The Committee will be comprised of at least
three persons [1] each of whom is [a] an outside director, as defined in Treas. Reg.
§1.162-27(e)(3)(i) and [b] a “non-employee” director within the meaning of Rule 16b-3 under the Act
and [2] none of whom may receive remuneration from the Company or any Related Entity in any
capacity other than as a director, except as permitted under Treas. Reg. §1.162-27(e)(3)(ii).

Company. FirstMerit Corporation, an Ohio corporation, and any and all successors to it.

Covered Officer. Those Employees whose compensation is (or likely will be) subject to limited
deductibility under Code §162(m) as of the last day of any calendar year.

Director. A person who, on an applicable Grant Date [1] is an elected member of the Board or of a
Related Board (or has been appointed to the Board or to a Related Board to fill an unexpired term
and will continue to serve at the expiration of that term only if elected by shareholders) and [2]
is not an Employee. For purposes of applying this definition, a Director’s status will be
determined as of the Grant Date applicable to each affected Award.

Director Options. Nonqualified Options issued to Directors under Section 6.00.

Disability. Unless specified otherwise in the Award Agreement:

[1] With respect to an Incentive Stock Option, as defined in Code §22(e)(3);

[2] With respect to any Award subject to Code §409A, as defined under Code §409A; and

[3] With respect to any Award not described in subsection [1] or [2] of this definition, as
defined in any long-term disability policy or benefit contract maintained by the Company
that is applicable to the Participant and in effect on the Grant Date.

 

 

Employee. Any person who, on any applicable date, is a common law employee of the Company or any
Related Entity. A worker who is classified as other than a common law employee but who is
subsequently reclassified as a common law employee of the Company for any reason and on any basis
will be treated as a common law employee only from the date that reclassification occurs and will
not retroactively be reclassified as an Employee for any purpose of this Plan.

Equity Plan Board. Those Board members who [1] are outside directors as defined in Treas. Reg.
§1.162-27(c)(3)(i), [2] are “non-employee” directors within the meaning of Rule 16b-3 under the Act
and [3] do not receive remuneration from the Company or any Related Entity in any capacity other
than as a director, except as permitted under Treas. Reg. §1.162-27(e)(3)(ii).

Employer. The member of the Group with which the Employee has a direct employment relationship.

Exercise Price. The amount, if any, a Participant must pay to exercise an Award.

Fair Market Value. The value of one share of Stock on any relevant date, determined under the
following rules:

[1] If the Stock is traded on an exchange, the reported “closing price” on the relevant
date, if it is a trading day, otherwise on the next trading day;

[2] If the Stock is traded over-the-counter with no reported closing price, the mean between
the highest bid and the lowest asked prices on that quotation system on the relevant date,
if it is a trading day, otherwise on the next trading day; or

[3] If neither subsections [1] or [2] of this definition apply, the fair market value as
determined by the Equity Plan Board in good faith and, with respect to Incentive Stock
Options, consistent with the rules prescribed under Code §422.

Full-Value Award. Performance Shares, Restricted Stock and Whole-Share Awards that, by the terms
of the Award Agreement through which they are issued, are to be settled in shares of Stock.

Grant Date. The date an Award is granted.

Group. The Company and all Related Entities. The composition of the Group will be determined as
of any relevant date.

Incentive Stock Option. Any Option that, on the Grant Date, meets the conditions imposed under
Code §422 and is not subsequently modified in a manner inconsistent with Code §422.

Nonqualified Stock Option. Any Option that is not an Incentive Stock Option.

Option. The right granted under Section 6.00 to a Participant to purchase a share of Stock at a
stated price for a specified period of time. An Option may be either [1] an Incentive Stock Option
or [2] a Nonqualified Stock Option.

 

 

Participant. Any Employee or Director to whom an Award has been granted and which is still
outstanding.

Performance Criteria. The criteria described in Section 9.02, which includes specific performance
goals for the performance metrics listed in Section 9.02[1].

Performance Period. The period over which the Equity Plan Board will determine if applicable
Performance Criteria have been met.

Performance Share. A share of Stock issued to a Participant contingent upon satisfaction of
conditions described in Section 9.00.

Plan. The FirstMerit Corporation 2006 Equity Plan.

Plan Year. The Company’s fiscal year.

Prior Plan. The FirstMerit Corporation Amended and Restated 2002 Stock Plan and the FirstMerit
Corporation 1999 Stock Plan as Amended and Restated on April 15, 2001.

Related Board. The board of directors of any incorporated Related Entity or the governing body of
any unincorporated Related Entity.

Related Entity. Any entity that is or becomes related to the Company through common ownership as
determined under Code §414(b) or (c) but modified as permitted under Prop. Treas. Reg.
§1.409A-1(b)(5)(iii)(D) and any successor to those proposed regulations.

Restricted Stock. A share of Stock issued to a Participant contingent upon satisfaction of
conditions described in Section 8.00.

Restriction Period. The period over which the Equity Plan Board will determine if a Participant
has met conditions placed on Restricted Stock.

Retirement. Unless otherwise specified in the Award Agreement, the date an Employee Terminates on
or after reaching age 55 and qualifying to receive benefits under any defined benefit type deferred
compensation arrangement [as defined in Section 3(35) of the Employee Retirement Income Security
Act of 1974, as amended, but without regard to subsections (A) and (B) of that definition], whether
or not intended to comply with Code §401(a), then maintained by the Company or any member of the
Group that is applicable to the Employee.

Stock. The Class A common shares, without par value, issued by the Company or any security issued
by the Company in substitution, exchange or in place of these shares.

Stock Appreciation Right (or “SAR”). An Award granted under Section 10.00 and consisting of the
potential appreciation of the shares of Stock underlying the Award.

Termination. A “separation from service” as defined under Code §409A.

Whole-Share. A share of Stock issued under Section 7.00.

 

 

3.00 PARTICIPATION

3.01 Awards to Employees.

[1] Consistent with the terms of the Plan and subject to Section 3.03, the Equity Plan Board
will [a] decide which Employees will be granted Awards and [b] specify the type of Award to
be granted to Employees and the terms upon which those Awards will be granted and may be
earned.

[2] The Equity Plan Board, may establish different terms and conditions [a] for each type of
Award granted to an Employee, [b] for each Employee receiving the same type of Award and [c]
for the same Employee for each Award the Employee receives, whether or not those Awards are
granted at different times.

3.02 Awards to Directors. Consistent with the terms of the Plan and subject to Section 3.03, the
Board will grant to Directors the Awards described in Sections 6.01[2] and 8.01[2].

3.03 Conditions of Participation. By accepting an Award, each Employee and Director agrees:

[1] To be bound by the terms of the Award Agreement and the Plan and to comply with other
conditions imposed by the Equity Plan Board; and

[2] That the Equity Plan Board (or the Board, as appropriate) may amend the Plan and the
Award Agreements without any additional consideration to the extent necessary to avoid
penalties arising under Code §409A, even if those amendments reduce, restrict or eliminate
rights that were granted under the Plan or Award Agreement (or both) before those
amendments.

4.00 ADMINISTRATION

4.01 Duties. The Committee is responsible for administering the Plan and has all powers
appropriate and necessary to that purpose. The Committee also may recommend the types of Awards to
be issued to Employees, the terms of those Awards and the Employees to whom they will be issued,
although the Equity Plan Board has final authority to grant Award to Employees as described in
Section 3.01 and to establish the terms of those Awards and the Board has final authority to grant
Awards to Directors as described in Section 3.02. Consistent with the Plan’s objectives, the
Board, the Equity Plan Board and the Committee may adopt, amend and rescind rules and regulations
relating to the Plan, to the extent appropriate to protect the Company’s and the Group’s interests,
and have complete discretion to make all other decisions necessary or advisable for the
administration and interpretation of the Plan. Any action by the Board or the Equity Plan Board
will be final, binding and conclusive for all purposes and upon all persons.

4.02 Delegation of Duties. In its sole discretion, the Board, the Equity Plan Board and the
Committee may delegate any ministerial duties associated with the Plan to any person (including
Employees) that it deems appropriate. However, none of the Board, the Equity Plan Board or the
Committee may delegate any duties it is required to discharge to comply with Code §162(m).

 

 

4.03 Award Agreement. As soon as administratively feasible after the Grant Date, the Committee, at
the Equity Plan Board’s (or the Board’s, if appropriate) direction will prepare and deliver an
Award Agreement to each affected Participant. The Award Agreement:

[1] Will describe the terms of the Award, including [a] the type of Award and when and how
it may be exercised or earned, [b] any Exercise Price associated with that Award and [c] how
the Award will or may be settled.

[2] To the extent different from the terms of the Plan, will describe [a] any conditions
that must be met before the Award may be exercised or earned, [b] any objective restrictions
placed on the Award and any performance-related conditions and Performance Criteria that
must be met before those restrictions will be released and [c] any other applicable terms
and conditions affecting the Award.

4.04 Restriction on Repricing. Regardless of any other provision of this Plan, none of the Board,
the Equity Plan Board, the Company or the Committee may “reprice” (as defined under rules issued by
the exchange on which the Stock is then traded) any Award without the prior approval of the
shareholders.

5.00 LIMITS ON STOCK SUBJECT TO AWARDS

5.01 Number of Authorized Shares of Stock. Subject to Section 5.04, the number of shares of Stock
subject to Awards under the terms of this Plan may not be larger than the sum of:

[1] The number of shares authorized to be granted under the Prior Plan but which are not
subject to outstanding awards under that plan on the Effective Date, but not any shares
subject to awards issued under the Prior Plan that are subsequently forfeited under the
terms of the Prior Plan; plus

[2] 3,000,000.

However, if the Plan is not approved by the Company’s shareholders, the Prior Plan will be
unaffected and will remain in effect for the balance of the term specified in the Prior Plan.

The shares of Stock to be delivered under the Plan may consist, in whole or in part, of treasury
Stock or authorized but unissued Stock not reserved for any other purpose.

5.02 Limits on Awards. Of the shares authorized under Section 5.01[2], up to 500,000 may be issued
subject to Incentive Stock Options.

5.03 Share Accounting. As appropriate, the limits imposed under Sections 5.01 and 5.02:

[1] Will be conditionally reduced by the number of shares of Stock subject to any
outstanding Award, including the full number of shares underlying SARs; and

[2] Will be absolutely reduced by [a] the number of shares of Stock issued pursuant to the
exercise of an Option, [b] the number of shares of Stock issued because the terms of a
Full-Value Award Agreement have been met and [c] by the full number of shares of Stock
underlying a SAR that has been earned and exercised; but

 

 

[3] Any shares of Stock subject to any Award that, for any reason, is forfeited, cancelled,
terminated, relinquished, exchanged or otherwise settled without the issuance of Stock or
without payment of cash equal to its Fair Market Value or the difference between the Award’s
Fair Market Value and its Exercise Price (if any) and may again be granted under the Plan.

5.04 Adjustment in Capitalization. If, after the Effective Date, there is a Stock dividend or
Stock split, recapitalization (including payment of an extraordinary dividend), merger,
consolidation, combination, spin-off, distribution of assets to shareholders, exchange of shares or
other similar corporate change affecting Stock, the Equity Plan Board will appropriately adjust [1]
the number of Awards that may or will be granted to Participants during a Plan Year, [2] the
aggregate number of shares of Stock available for Awards under Section 5.01 or subject to
outstanding Awards (as well as any share-based limits imposed under this Plan), [3] the respective
Exercise Price, number of shares and other limitations applicable to outstanding or subsequently
granted Awards and [4] any other factors, limits or terms affecting any outstanding or subsequently
granted Awards.

5.05 Limits on Awards to Covered Officers. During any Plan Year, no Covered Officer may receive
[1] Options covering more than 250,000 shares (adjusted as provided in Section 5.04), including
Awards that are cancelled [or deemed to have been cancelled under Treas. Reg.
§1.162-27(e)(2)(vi)(B)] during each Plan Year granted, [2] SARs covering more than 150,000 shares
(adjusted as provided in Section 5.04), including Awards that are cancelled [or deemed to have been
cancelled under Treas. Reg. §1.162-27(e)(2)(vi)(B)] during each Plan Year granted or [3]
Performance Shares covering more than 100,000 shares (adjusted as provided in Section 5.04).

6.00 OPTIONS

6.01 Grant of Options. Subject to Section 11.00 and the terms of the Plan and the associated Award
Agreement, at any time [1] during the term of this Plan, the Equity Plan Board may grant Incentive
Stock Options and Nonqualified Stock Options to Employees and [2] during any Plan Year, the Board
will grant 3,000 Director Options (adjusted as provided in Section 5.04) to Directors, although the
Board reserves the right to increase this number up to 10,000 Director Options (adjusted as
provided in Section 5.04).

6.02 Exercise Price. Except to the extent necessary to implement Section 6.06, each Option will
bear an Exercise Price at least equal to Fair Market Value on the Grant Date. However, the
Exercise Price associated with an Incentive Stock Option will be at least 110 percent of the Fair
Market Value of a share of Stock on the Grant Date with respect to any Incentive Stock Options
issued to an Employee who, on the Grant Date, owns [as defined in Code §424(d)] Stock possessing
more than 10 percent of the total combined voting power of all classes of stock (or the combined
voting power of any Related Entity), determined under rules issued under Code §422.

6.03 Exercise of Options. Subject to Section 11.00 and any terms, restrictions and conditions
specified in the Plan and unless specified otherwise in the Award Agreement:

[1] Options (including Director Options) will be exercisable at the time (or times)
specified in the Award Agreement.

 

 

[2] However:

[a] Any Option to purchase a fraction of a share of Stock will automatically be
converted to an Option to purchase an additional whole share.

[b] No Incentive Stock Option may be exercised more than ten years after it is
granted (five years in the case of an Incentive Stock Option granted to an Employee
who owns [as defined in Code §424(d)] on the Grant Date Stock possessing more than
10 percent of the total combined voting power of all classes of stock or the
combined voting power of any Related Entity, determined under rules issued under
Code §422).

[c] No Director Option will be exercisable more than ten years after it is granted.

[d] Nonqualified Stock Options (other than Director Options) will be exercisable for
the period specified in the Award Agreement.

6.04 Incentive Stock Options. Notwithstanding anything in the Plan to the contrary:

[1] No provision of this Plan relating to Incentive Stock Options will be interpreted,
amended or altered, nor will any discretion or authority granted under the Plan be
exercised, in a manner that is inconsistent with Code §422 or, without the consent of any
affected Participant, to cause any Incentive Stock Option to fail to qualify for the federal
income tax treatment afforded under Code §421.

[2] The aggregate Fair Market Value of the Stock (determined as of the Grant Date) with
respect to which Incentive Stock Options are exercisable for the first time by any
Participant during any calendar year (under all option plans of the Company and all Related
Entities of the Company) will not exceed $100,000 [or other amount specified in Code
§422(d)], determined under rules issued under Code §422.

[3] No Incentive Stock Option will be granted to any person who is not an Employee on the
Grant Date.

6.05 Exercise Procedures and Payment for Options. The Exercise Price associated with each Option
must be paid under procedures described in the Award Agreement. These procedures may include
payment in cash (or a cash equivalent), a cashless exercise and allowing a Participant to tender
Stock he or she already has owned for at least six months before the exercise date, either by
actual delivery of the previously owned Stock or by attestation, valued at its Fair Market Value on
the exercise date, as partial or full payment of the Exercise Price or any combination of those
procedures. A Participant may exercise an Option only by sending to the Committee (or its
designee) a completed exercise notice (in the form prescribed by the Committee) along with payment
(or designation of an approved payment procedure) of the Exercise Price. As soon as
administratively feasible after those steps are taken, the Committee will cause the appropriate
share certificates to be issued.

6.06 Substitution of Options. In the Company’s discretion, persons who become Employees as a
result of a transaction described in Code §424(a) may receive Options in exchange for

 

 

options granted by their former employer or the former Related Entity subject to the rules and
procedures prescribed under Code §424.

6.07 Rights Associated With Options.

[1] A Participant to whom an unexercised Option has been granted will have no voting or
dividend rights with respect to the shares underlying that unexercised Option and the Option
will be transferable only to the extent provided in Section 14.01.

[2] Unless otherwise specified in the Award Agreement or as otherwise specifically provided
in the Plan, Stock acquired through an Option [a] will bear all dividend and voting rights
associated with Stock and [b] will be transferable, subject to applicable federal securities
laws, the requirements of any national securities exchange or system on which shares of
Stock are then listed or traded or any blue sky or state securities laws.

7.00 WHOLE-SHARES

The Equity Plan Board may grant Whole-Shares to Employees on any basis and on any terms it deems
appropriate.

8.00 RESTRICTED STOCK

8.01 Grant of Restricted Stock. Subject to the terms, restrictions and conditions specified in the
Plan and the associated Award Agreement:

[1] At any time during the term of this Plan, [a] the Equity Plan Board may grant shares of
Restricted Stock to Employees and [b] the Board will grant shares of Restricted Stock to
Directors as provided in Section 8.01[2].

[2] The Board will grant [a] 1,000 shares of Restricted Stock to each Director on the date
immediately following their initial election as a Director and [b] 500 shares of Restricted
Stock on the date following each subsequent Annual Meeting during which they serve as a
Director. However, the Board reserves the right to increase the number of shares of
Restricted Stock issued annually to Directors up to 2,500 shares.

8.02 Earning Restricted Stock. Subject to the terms, restrictions and conditions specified in the
Plan and the associated Award Agreement and unless otherwise specified in the Award Agreement:

[1] Terms, restrictions and conditions imposed on Restricted Stock granted to Employees and
Directors will lapse as described in the Award Agreement.

[2] During the Restriction Period, Restricted Stock will be held by the Company as escrow
agent. After the end of the Restriction Period, the Restricted Stock will be:

[a] Forfeited, if all terms, restrictions and conditions described in the Award
Agreement have not been met; or

 

 

[b] Released from escrow and distributed to the Participant as soon as practicable
after the last day of the Restriction Period, if all terms, restrictions and
conditions specified in the Award Agreement have been met.

[3] Any Restricted Stock Award relating to a fractional share of Stock will be rounded to
the next whole share when settled.

8.03 Rights Associated With Restricted Stock. During the Restriction Period and unless the
associated Award Agreement specifies otherwise:

[1] Restricted Stock may not be sold, transferred, pledged, assigned or otherwise alienated
or hypothecated; but

[2] Each Participant to whom Restricted Stock has been issued:

[a] May exercise full voting rights associated with that Restricted Stock; and

[b] Will be entitled to receive all dividends and other distributions paid with
respect to that Restricted Stock; provided, however, that if any dividends or other
distributions are paid in shares of Stock, those shares will be subject to the same
restrictions on transferability and forfeitability as the shares of Restricted Stock
with respect to which they were issued.

9.00 PERFORMANCE SHARES

9.01 Generally. Performance Shares may be granted [1] to Covered Officers in a manner that
qualifies as “performance-based compensation” under Code §162(m) or [2] to Employees who are not
Covered Officers in any manner reasonably determined by the Equity Plan Board,. Subject to any
terms, restrictions and conditions specified in the Plan and the Award Agreement, the granting or
vesting of Performance Shares will, in the Equity Plan Board’s sole discretion, be based on
achieving performance objectives derived from one or more of the Performance Criteria specified in
Section 9.02. However, the Equity Plan Board’s authority to issue any Performance Shares to
Covered Officers will expire no later than the first Annual Meeting that occurs in the fifth year
following the year in which the Company’s shareholders approve this Plan.

9.02 Performance Criteria.

[1] The vesting of Performance Shares that are intended to qualify as “performance-based
compensation” under Code §162(m) will be based on one or more (or a combination) of the
following Performance Criteria and may be applied solely with reference to the Company
(and/or any Related Entity) or relatively between the Company (and/or any Related Entity)
and one or more unrelated entities:

[a] Net earnings or net income (before or after taxes);

[b] Earnings per share;

[c] Deposit or asset growth;

 

 

[d] Net operating income;

[e] Return measures (including return on assets and equity);

[f] Fee income;

[g] Earnings before or after taxes, interest, depreciation and/or amortization;

[h] Interest spread;

[i] Productivity ratios;

[j] Share price (including, but not limited to, growth measures and total
shareholder return);

[k] Expense targets;

[l] Credit quality;

[m] Efficiency ratio;

[n] Market share;

[o] Customer satisfaction; and

[p] NIACC (net income after cost of capital).

[2] The vesting of Performance Shares granted to Participants who are not Covered Officers
may be based on one or more (or a combination) of the Performance Criteria listed in Section
9.02[1] or on other factors the Equity Plan Board believes are relevant and appropriate.

[3] Different Performance Criteria may be applied to individual Employees or to groups of
Employees and, as specified by the Equity Plan Board, may be based on the results achieved
[a] separately by the Company or any Related Entity, [b] any combination of the Company and
Related Entities or [c] any combination of segments, products or divisions of the Company
and Related Entities.

[4] The Equity Plan Board:

[a] Will make appropriate adjustments to Performance Criteria to reflect the effect
on any Performance Criteria of any stock dividend or stock split affecting Stock,
recapitalization (including, without limitation, the payment of an extraordinary
dividend), merger, consolidation, combination, spin-off, distribution of assets to
shareholders, exchange of shares or similar corporate change. Also, the Equity Plan
Board, will make a similar adjustment to any portion of a Performance Criteria that
is not based on Stock but which is affected by an event having an effect similar to
those just described.

 

 

[b] To the extent permitted under Code §162(m), may make appropriate adjustments to
Performance Criteria to reflect a substantive change in an Employee’s job
description or assigned duties and responsibilities.

[5] Performance Criteria will be established in an associated Award Agreement [a] as soon as
administratively practicable after established but [b] in the case of Covered Officers, no
later than the earlier of [i] 90 days after the beginning of the applicable Performance
Period or [ii] the expiration of 25 percent of the applicable Performance Period.

9.03 Earning Performance Shares. Except as otherwise provided in the Plan or the Award Agreement,
as of the end of each Performance Period, the Committee will certify to the Equity Plan Board and
the Equity Plan Board will independently certify the extent to which the Employee has or has not
met his or her Performance Criteria and Performance Shares will be:

[1] Forfeited, to the extent that the Equity Plan Board concludes that the related
Performance Criteria have not been met at the end of the Performance Period; or

[2] To the extent that the Equity Plan Board certifies that the related Performance Criteria
have been met, distributed to the Employee in the form of shares of Stock (unless otherwise
specified in the Award Agreement) no later than the later of [a] the 15th  day of
the third month following the end of the Participant’s taxable year in which the Equity Plan
Board certifies that the related Performance Criteria have been met or [b] the 15th day of
the third month following the end of the Company’s taxable year in which the Equity Plan
Board certifies that the related Performance Criteria have been met. However, the
Performance Shares may be distributed later than the date determined under the preceding
sentence if the Company reasonably establishes that compliance with that schedule is
administratively impracticable and the distribution is made as soon as practicable.

9.04 Rights Associated with Performance Shares. During the Performance Period, and unless the
Award Agreement provides otherwise:

[1] Employees may not exercise voting rights associated with their Performance Shares; and

[2] All dividends and other distributions paid with respect to any Performance Shares will
be held by the Company as escrow agent during the Performance Period. At the end of the
Performance Period, these dividends (and other distributions) will be distributed to the
Participant or forfeited as provided in Section 9.03. No interest or other accretion will
be credited with respect to any dividends (and other distributions) held in this escrow
account. If any dividends or other distributions are paid in shares of Stock, those shares
will be subject to the same restrictions on transferability and forfeitability as the shares
of Stock with respect to which they were issued.

10.00 STOCK APPRECIATION RIGHTS

10.01 SAR Grants. Subject to the terms of the Plan and the associated Award Agreement, the Equity
Plan Board may grant SARs to Employees at any time during the term of this Plan.

 

 

10.02 Exercise Price. The Exercise Price specified in the Award Agreement will not be less than
100 percent of the Fair Market Value of a share of Stock on the Grant Date.

10.03 Exercise and Settling of SARs.

[1] SARs will be exercisable subject to the terms specified in the Award Agreement.

[2] A Participant exercising a SAR will receive a number of whole shares of Stock equal to:

[a] The difference between the Fair Market Value of a share of Stock on the exercise
date and the Exercise Price, multiplied by

[b] The number of shares of Stock with respect to which the SAR is being exercised.

The value of any fractional share of Stock produced under this formula will be settled in
cash.

11.00 TERMINATION

11.01 Retirement. Unless specified otherwise in the Award Agreement or this Plan:

[1] All Nonqualified Options and SARs then held by a Retiring Participant (whether or not
then exercisable) will be fully exercisable when the Participant Retires and may be
exercised at any time before the earlier of [a] the expiration date specified in the Award
Agreement or [b] five years after the Retirement date (or any shorter period specified in
the Award Agreement).

[2] All Incentive Stock Options then held by a Retiring Participant (whether or not then
exercisable) will be fully exercisable when the Participant Retires and may be exercised at
any time before the earlier of [a] the expiration date specified in the Award Agreement or
[b] three months after the Retirement date (or any shorter period specified in the Award
Agreement). However, an Incentive Stock Option that is not exercised within three months
after the Retirement date will be treated as a Nonqualified Stock Option and may be
exercised within the period described in Section 11.01[1].

[3] All Restricted Stock granted to a Retiring Participant that is unvested when the
Participant Retires will be fully vested when the Participant Retires.

[4] A prorated portion of all Performance Shares granted to a Retiring Participant that are
then subject to a pending Performance Period will be vested when the Participant Retires but
only if the applicable Performance Criteria are met at the end of that Performance Period.
The number of shares vested will equal the number of Performance Shares then subject to a
pending Performance Period multiplied by the number of whole months between the beginning of
the Performance Period and the date the Participant Retires and divided by the number of
whole months included in the Performance Period.

[5] All Whole-Share Awards not then vested will be vested or forfeited as provided in the
Award Agreement.

 

 

11.02 Death or Disability. Unless specified otherwise in the Award Agreement or this Plan:

[1] All Nonqualified Stock Options and SARs then held by a Participant who dies or becomes
Disabled (whether or not then exercisable) will be fully exercisable when the Participant
dies or becomes Disabled and may be exercised at any time before the earlier of [a] the
expiration date specified in the Award Agreement or [b] five years after the date of death
or Disability (or any shorter period specified in the Award Agreement).

[2] All Incentive Stock Options then held by a Disabled or dead Participant (whether or not
then exercisable) will be fully exercisable when the Participant dies or becomes Disabled
and may be exercised at any time before the earlier of [a] the expiration date specified in
the Award Agreement or [b] one year after the Termination date (or any shorter period
specified in the Award Agreement). However, an Incentive Stock Option that is not exercised
within one year after the Termination date will be treated as a Nonqualified Stock Option
and may be exercised within the period described in Section 11.02[1].

[3] All Restricted Stock granted to a Participant who dies or becomes Disabled that is
unvested when the Participant dies or becomes Disabled will be fully vested when the
Participant dies or becomes Disabled.

[4] A prorated portion of all Performance Shares granted to a Participant who dies or
becomes Disabled that are then subject to a pending Performance Period will be vested when
the Participant dies or becomes Disabled but only if the applicable Performance Criteria are
met at the end of that Performance Period. The number of shares vested will equal the
number of Performance Shares then subject to a pending Performance Period, multiplied by the
number of whole months between the beginning of the Performance Period and the date the
Participant dies or becomes Disabled and divided by the number of whole months included in
the Performance Period.

[5] All Whole-Shares Awards not then vested will be vested or forfeited as provided in the
Award Agreement.

11.03 Termination for Cause. Unless specified otherwise in the Award Agreement or this Plan, all
Awards that are outstanding (whether or not then exercisable) will be forfeited when (and if) a
Participant Terminates (or is deemed to have been Terminated) for Cause.

11.04 Termination for any Other Reason. Unless specified otherwise in the Award Agreement or this
Plan (and except as provided in the next sentence of this section) or subsequently (but only to the
extent permitted under Code §409A), any Awards that are outstanding when a Participant Terminates
for any reason not described in Sections 11.01 through 11.03 will be forfeited. However, any
Options and SARs that are outstanding when a Participant is involuntarily Terminated without Cause
and which are then exercisable may be exercised at any time before the earlier of [1] the
expiration date specified in the Award Agreement or [2] 30 days after the Termination date (or any
shorter period specified in the Award Agreement) and all Options and SARs that are not then
exercisable will terminate on the Termination date.

 

 

12.00 EFFECT OF CHANGE IN CONTROL

12.01 Accelerated Vesting and Settlement. Upon a Change in Control, all of a Participant’s Awards
will be treated as provided in the related Award Agreement or in a separate written change in
control or similar agreement between the Participant and the Company or any Related Entity.

12.02 Effect of Code §280G. Unless specified otherwise in the Award Agreement or in another
written agreement between the Participant and the Company or a Related Entity executed
simultaneously with or before any Change in Control, if the sum (or value) of the payments pursuant
to Section 12.01 constitute an “excess parachute payment” as defined in Code §280G(b)(1) when
combined with all other parachute payments attributable to the same Change in Control, the Company
or other entity making the payment (“Payor”) will reduce the Participant’s benefits under this Plan
so that the Participant’s total “parachute payment” as defined in Code §280G(b)(2)(A) under this
Plan, an Award Agreement and all other agreements will be $1.00 less than the amount that otherwise
would generate an excise tax under Code §4999. If the reduction described in the preceding
sentence applies, within 10 business days of the effective date of the event generating the
payments (or, if later, the date of the Change in Control), the Payor will apprise the Participant
of the amount of the reduction (“Notice of Reduction”). Within 10 business days of receiving that
information, the Participant may specify how and against which benefit or payment source,
(including benefits and payment sources other than this Plan) the reduction is to be applied
(“Notice of Allocation”). The Payor will be required to implement these directions within 10
business days of receiving the Notice of Allocation. If the Payor has not received a Notice of
Allocation from the Participant within 10 business days of the date of the Notice of Reduction or
if the allocation provided in the Notice of Allocation is not sufficient to fully implement the
reduction described in this section, the Payor will apply the reduction described in this section
proportionately based on the amounts otherwise payable under Section 12.01 or, if a Notice of
Allocation has been returned that does not sufficiently implement the reduction described in this
section, on the basis of the reductions specified in the Notice of Allocation.

13.00 AMENDMENT, MODIFICATION AND TERMINATION OF PLAN

The Company may terminate, suspend or amend the Plan at any time without shareholder approval
except to the extent that shareholder approval is required to satisfy applicable requirements
imposed by [1] Rule 16b-3 under the Act, or any successor rule or regulation, [2] applicable
requirements of the Code or [3] any securities exchange, market or other quotation system on or
through which the Company’s securities are listed or traded. Also, no Plan amendment may [4]
result in the loss of a Committee member’s or Equity Plan Board members’ status as a “non-employee
director” as defined in Rule 16b-3 under the Act, or any successor rule or regulation, [5] cause
the Plan to fail to meet requirements imposed by Rule 16b-3 or [6] without the consent of the
affected Participant (and except as specifically provided otherwise in this Plan or the Award
Agreement), adversely affect any Award granted before the amendment, modification or termination.
However, nothing in this section will restrict the Company’s right to amend the Plan and any Award
Agreements without any additional consideration to affected Participants to the extent necessary to
avoid penalties arising under Code §409A, even if those amendments reduce, restrict or eliminate
rights granted under the Plan or Award Agreement (or both) before those amendments.

 

 

14.00 MISCELLANEOUS

14.01 Assignability. Except as described in this section or as provided in Section 14.02, an Award
may not be transferred except by will or the laws of descent and distribution and, during the
Participant’s lifetime, may be exercised only by the Participant or the Participant’s guardian or
legal representative. However, with the permission of the Committee, a Participant or a specified
group of Participants may transfer Awards (other than Incentive Stock Options) to a revocable inter
vivos trust of which the Participant is the settlor, or may transfer Awards (other than Incentive
Stock Options) to any member of the Participant’s immediate family, any trust, whether revocable or
irrevocable, established solely for the benefit of the Participant’s immediate family, any
partnership or limited liability company whose only partners or members are members of the
Participant’s immediate family or an organization described in Code §501(c)(3) (“Permissible
Transferees”). Any Award transferred to a Permissible Transferee will continue to be subject to
all of the terms and conditions that applied to the Award before the transfer and to any other
rules prescribed by the Committee. A Permissible Transferee may not retransfer an Award except by
will or the laws of descent and distribution and then only to another Permissible Transferee.

14.02 Beneficiary Designation. Each Participant may name a Beneficiary or Beneficiaries (who may
be named contingently or successively) to receive or to exercise any vested Award that is unpaid or
unexercised at the Participant’s death. Unless otherwise provided in the Beneficiary designation,
each designation made will revoke all prior designations made by the same Participant, must be made
on a form prescribed by the Committee and will be effective only when filed in writing with the
Committee. If a Participant has not made an effective Beneficiary designation, the deceased
Participant’s Beneficiary will be his or her surviving spouse or, if none, the deceased
Participant’s estate. The identity of a Participant’s designated Beneficiary will be based only on
the information included in the latest Beneficiary designation form completed by the Participant
and will not be inferred from any other evidence.

14.03 No Guarantee of Continuing Services. Except as specifically provided elsewhere in the Plan,
nothing in the Plan may be construed as:

[1] Interfering with or limiting the right of the Company or any Related Entity to Terminate
any Employee’s employment at any time;

[2] Conferring on any Participant any right to continue as an Employee or director of the
Company or any Related Entity;

[3] Guaranteeing that any Employee will be selected to be a Participant; or

[4] Guaranteeing that any Participant will receive any future Awards.

14.04 Tax Withholding.

[1] The Company will withhold from other amounts owed to the Participant, or require a
Participant to remit to the Company, an amount sufficient to satisfy federal, state and
local withholding tax requirements on any Award, exercise or cancellation of an Award or
purchase of Stock. If these amounts are not to be withheld from other payments due to the
Participant (or if there are no other payments due to the Participant),

 

 

the Company will defer payment of cash or issuance of shares of Stock until the earlier of:

[a] Thirty days after the settlement date; or

[b] The date the Participant remits the required amount.

[2] If the Participant has not remitted the required amount within 30 days after the
settlement date, the Company will permanently withhold from the value of the Awards to be
distributed the minimum amount required to be withheld to comply with applicable federal,
state and local income, wage and employment taxes and distribute the balance to the
Participant.

[3] In its sole discretion, which may be withheld for any reason or for no reason, the
Committee may permit a Participant to elect, subject to conditions the Committee
establishes, to reimburse the Company for this tax withholding obligation through one or
more of the following methods:

[a] By having shares of Stock otherwise issuable under the Plan withheld by the
Company (but only to the extent of the minimum amount that must be withheld to
comply with applicable state, federal and local income, employment and wage tax
laws);

[b] By delivering to the Company previously acquired shares of Stock that the
Participant has owned for at least six months;

[c] By remitting cash to the Company; or

[d] By remitting a personal check immediately payable to the Company.

14.05 Indemnification. Each individual who is or was a member of the Board, the Equity Plan Board
or the Committee will be indemnified and held harmless by the Company against and from any loss,
cost, liability or expense that may be imposed upon or reasonably incurred by him or her in
connection with or resulting from any claim, action, suit or proceeding to which he or she may be
made a party or in which he or she may be involved by reason of any action taken or not taken under
the Plan as a Board, Equity Plan Board or Committee member and against and from any and all amounts
paid, with the Company’s approval, by him or her in settlement of any matter related to or arising
from the Plan as a Board, Equity Plan Board or Committee member or paid by him or her in
satisfaction of any judgment in any action, suit or proceeding relating to or arising from the Plan
against him or her as a Board, Equity Plan Board or Committee member, but only if he or she gives
the Company an opportunity, at its own expense, to handle and defend the matter before he or she
undertakes to handle and defend it in his or her own behalf. The right of indemnification
described in this section is not exclusive and is independent of any other rights of
indemnification to which the individual may be entitled under the Company’s organizational
documents, by contract, as a matter of law or otherwise.

14.06 No Limitation on Compensation. Nothing in the Plan is to be construed to limit the right of
the Company to establish other plans or to pay compensation to its employees or directors, in cash
or property, in a manner not expressly authorized under the Plan.

 

 

14.07 Requirements of Law. The grant of Awards and the issuance of shares of Stock will be subject
to all applicable laws, rules and regulations and to all required approvals of any governmental
agencies or national securities exchange, market or other quotation system. Also, no shares of
Stock will be issued under the Plan unless the Company is satisfied that the issuance of those
shares of Stock will comply with applicable federal and state securities laws. Certificates for
shares of Stock delivered under the Plan may be subject to any stock transfer orders and other
restrictions that the Equity Plan Board believes to be advisable under the rules, regulations and
other requirements of the Securities and Exchange Commission, any stock exchange or other
recognized market or quotation system upon which the Stock is then listed or traded, or any other
applicable federal or state securities law. The Committee may cause a legend or legends to be
placed on any certificates issued under the Plan to make appropriate reference to restrictions
within the scope of this section.

14.08 Governing Law. The Plan, and all agreements hereunder, will be construed in accordance with
and governed by the laws (other than laws governing conflicts of laws) of the State of Ohio.

14.09 No Impact on Benefits. Plan Awards are not compensation for purposes of calculating a
Participant’s rights under any employee benefit plan that does not specifically require the
inclusion of Awards in calculating benefits.

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