EXHIBIT 10.3
FORM OF RESTRICTED STOCK AGREEMENT
This Restricted Stock Agreement (the "Agreement") made as of the 11th day
of March, 2004 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware
corporation (the "Corporation") and ___________________ (the "Employee").
WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies
Incorporated Stock 2000 Incentive Plan (the "Incentive Plan");
WHEREAS, the Corporation desires to encourage the Employee to remain an
employee of the Corporation and, during such employment, to contribute
substantially to the financial performance of the Corporation and, to provide
that incentive, the Corporation has awarded the Employee an aggregate of _______
shares of restricted shares of the common stock of the Corporation, $0.10 par
value per share ("Common Stock"), [equal to (I) the applicable base salary times
_________ (ii) divided by $11.385 (which is the average of the high and low
sales prices of the Common Stock on the New York Stock Exchange on March 11,
2004)] under the Incentive Plan subject to the terms and conditions set forth in
this Restricted Stock Agreement (together with any increases for dividends paid
in accordance with Paragraph 2(d) or adjustments as provided in Xxxxxxxxx 0,
xxxxx, the "Restricted Shares");
WHEREAS, half of the Restricted Shares are subject to the Corporation's
attainment of the performance requirements set forth in Paragraph 3(a) (the
"Performance Criteria"); and half of the Restricted Shares are subject to the
Employee's remaining an Employee (except in instances of death, disability or
Retirement as described below) during the Restriction Period set forth in
Paragraph 3(b), subject to accelerated termination of the Restriction in the
event of attainment of the Performance Criteria; and
WHEREAS, the Corporation and the Employee desire to evidence the award of
the Restricted Shares and the terms and conditions applicable thereto in this
Restricted Stock Agreement.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound, the Corporation and the
Employee agree as follows:
1. Grant of Restricted Shares. The Corporation hereby grants to the
Employee, as of the date first written above, the Restricted Shares subject to
the restrictions and other terms and conditions set forth herein. Simultaneously
with the execution and delivery of this Agreement, the Employee shall deliver to
the Corporation a stock power endorsed in blank relating to the Restricted
Shares (including in such power any increases or adjustments to the Restricted
Shares). As soon as practicable after the Date of Grant, the Corporation shall
direct that the Restricted Shares be registered in the name of and issued to the
Employee and initially bearing the legend described in Paragraph 6. The
Restricted Shares and any certificate or certificates representing the
Restricted Shares shall be held in the custody of the Corporation or
its designee until the expiration of the applicable Restrictions. Upon any
forfeiture in accordance with Paragraph 4 of the Restricted Shares, the
forfeited shares and any certificate or certificates representing the forfeited
Restricted Shares shall be canceled.
2. Restrictions. Employee shall have all rights and privileges of a
stockholder of the Corporation with respect to the Restricted Shares, except
that the following restrictions shall apply:
(a) None of the Restricted Shares may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the "Restriction
Period" as defined below, except to the extent of the Corporation's
earlier attainment of the Performance Criteria, as defined below.
(b) The Restricted Shares are subject to forfeiture during the Restriction
Period in accordance with Paragraph 4 of this Agreement.
(c) The Restricted Shares and any certificate representing the Restricted
Shares shall be held in custody by the Corporation or its designee until
such time as either the Performance Criteria are attained or the
Restriction Period shall have been completed.
(d) Dividends paid with respect to the Restricted Shares during the
Restriction Period shall not be paid to the Employee and, instead, shall
be converted into additional shares of Restricted Stock at the price at
which shares of common stock of the Corporation are purchased under the
Corporation's outstanding dividend reinvestment program and on the date
such purchases are made and such shares of Restricted Stock shall be
additions to the shares subject to the Restrictions hereunder, provided,
however, the Personnel and Compensation Committee of the Board of
Directors may, in its sole discretion, determine at any time or from time
to time, to pay such dividends in cash directly to the Employee.
3. Term of Restriction.
(a) Subject to the forfeiture provisions of Paragraph 4 of this Agreement,
the Restrictions shall lapse (i) with respect to half of the Restricted Shares
on the earlier of (x) January 1, 2009 if the Employee is an employee of the
Corporation on January 1, 2009, unless the Employee's cessation of employment
was due to the Employee's death, disability or Retirement (as defined below), or
(y) the attainment of the Performance Criteria and (ii) with respect to half of
the Restricted Shares, the attainment of the Performance Criteria. With respect
to the half of the Restricted Shares subject to the Performance Criteria, if the
Corporation does not attain the Performance Criteria, such half of the
Restricted Shares shall be forfeited immediately upon the completion of the
three-year measurement period for the Performance Criteria.
(b) For purposes of this Agreement, the "Performance Criteria" shall mean
that the Net Loss of the Corporation, measured under GAAP, shall not exceed, in
the aggregate, $60 million for the 2004, 2005 and 2006 fiscal years of the
Corporation. The period for measuring
the Performance Criteria shall end as of December 31, 2006 and the Personnel and
Compensation Committee or the Stock Incentive Award Subcommittee, as applicable,
shall as promptly as possible following the completion of the audit of the
Corporation for the 2006 fiscal year determine whether the Performance Criteria
have been met.
(c) The period from the Date of Grant until the lapse of the applicable of
the Restrictions with respect to the Restricted Shares is the "Restriction
Period" for purposes of this Agreement.
(d) As soon as administratively practicable following the lapse of the
Restrictions without a forfeiture of the applicable Restricted Shares, and upon
the satisfaction of all other applicable conditions as to such Restricted
Shares, including, but not limited to, the payment by the Employee of all
applicable withholding taxes, if any, the Corporation shall deliver or cause to
be delivered to the Employee shares of Common Stock, which may be in the form of
a certificate or certificates for such shares, equal in number to the applicable
Restricted Shares, which shall not be subject to the transfer restrictions set
forth above and shall not bear the legend described in Paragraph 6. Without
limiting the foregoing, (i) if the Performance Criteria are met, all Restricted
Shares shall become non-forfeitable and such Shares or the certificate
representing such non-forfeitable shares of common stock of the Corporation
shall be delivered as described above and (ii) if the Performance Criteria are
not met, (x) half of the Restricted Shares shall be forfeited immediately after
the end of the measurement period for such Performance Criteria and (y) the
remaining half of the Restricted Shares shall be non-forfeitable, if at all, at
the end of the Restriction Period.
4. Forfeiture of Restricted Shares. If Employee's employment with the
Corporation and all of its direct or indirect subsidiaries is terminated by
either party for any reason, including, but not limited to, the involuntary
termination of the Employee's employment with the Corporation for any reason,
with or without cause, other than the Employee's death, disability or retirement
with the consent of the Corporation when the Employee is at least 55 years of
age with at least five years of service ("Retirement"), (i) all rights of the
Employee to the Restricted Shares which remain subject to the Restrictions shall
terminate immediately and be forfeited in their entirety, and (ii) the forfeited
Restricted Shares and any stock certificate or certificates representing the
forfeited Restricted Shares shall be canceled. If the Employee dies or becomes
disabled during the Restriction Period, the Restricted Shares will immediately
vest. If the Employee retires with the consent of the Corporation when the
Employee is at least 55 years of age with at least five years of service, the
Employee (or the Employee's beneficiary) shall receive the Restricted Shares
when, if and to the extent, the Restrictions lapse under Paragraph 3.
5. Change of Control. All Restricted Shares shall fully vest in the event
of a Change of Control as defined in the Incentive Plan.
6. Legend. During the Restriction Period, the shares of Restricted Stock
and any share certificate or certificates evidencing the Restricted Shares shall
be endorsed with the
following legend (in addition to any legend required under applicable securities
laws or any agreement by which the Corporation is bound):
THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
SUBJECT TO THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT
ENTERED INTO BY AND BETWEEN ALLEGHENY TECHNOLOGIES INCORPORATED AND THE
HOLDER OF THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
OFFICE OF THE CORPORATION.
7. Withholding. The Corporation or its direct or indirect subsidiary may
withhold from the number of Restricted Shares or from any cash amount payable
hereunder or any other cash payments due to Employee all taxes, including social
security taxes, which the Corporation or its direct or indirect subsidiary is
required or otherwise authorized to withhold with respect to the Restricted
Shares.
8. Adjustments to Number of Shares. Any shares issued to Employee with
respect to the Restricted Shares in the event of any change in the number of
outstanding common stock of the Corporation through the declaration of a stock
dividend or a stock split or combination of shares or any other similar
capitalization change shall be deemed to be Restricted Shares subject to all the
terms set forth in this Agreement.
9. No Right to Continued Employment; Effect on Benefit Plans. This
Agreement shall not confer upon Employee any right with respect to continuance
of his or her employment or other relationship, nor shall it interfere in any
way with the right of the Corporation or its direct or indirect subsidiary to
terminate his or her employment or other relationship at any time. Income
realized by Employee pursuant to this Agreement shall not be included in
Employee's earnings for the purpose of any benefit plan in which Employee may be
enrolled or for which Employee may become eligible unless otherwise specifically
provided for in such plan.
10. Employee Representations. In connection with the issuance of the
Restricted Shares, Employee represents the following:
(a) Employee has reviewed with Employee's own tax advisors, the federal,
state, local and foreign tax consequences of this Agreement and the transactions
contemplated hereby. Employee is relying solely on such advisors and not on any
statements or representations of the Corporation or any of its agents. Employee
understands that Employee (and not the Corporation) shall be responsible for
Employee's own tax liability that may arise as a result of this Agreement and
the transactions contemplated hereby.
(b) Employee has received, read and understood this Agreement and the
Incentive Plan and agrees to abide by and be bound by their respective terms and
conditions.
11. Miscellaneous.
(a) Governing Law. This Agreement shall be governed and construed in
accordance with the domestic laws of the Commonwealth of Pennsylvania without
regard to such Commonwealth's principles of conflicts of laws.
(b) Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, permitted assigns,
heirs, executors and administrators of the parties hereto. Neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation without the consent of all parties hereto.
(c) Entire Agreement; Amendment. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
with respect to the subject matter of this Agreement. This Agreement may not be
amended or modified without the written consent of the Corporation and Employee.
(d) Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which when so executed and delivered shall be
taken to be an original and all of which together shall constitute one document.
(e) Definitions. Initially capitalized terms not otherwise defined in this
Restricted Stock Agreement shall have the meanings ascribed thereto in the
Incentive Plan.
IN WITNESS WHEREOF, the parties have executed this Restricted Shares Agreement
as of the date first written above.
ALLEGHENY TECHNOLOGIES INCORPORATED
By:
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Title: Executive Vice President, Human Resources,
Chief Legal & Compliance Officer
PARTICIPANT: WITNESS:
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