UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended July 3, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from .............. to ...........
COMMISSION FILE NUMBER 1-9498
ALLEGHENY LUDLUM CORPORATION
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1364894
------------ ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1000 Six PPG Place, Pittsburgh,PA 15222-5479
- - --------------------------------- ----------
(Address of principal executive offices) (Zip Code)
412-394-2800
- - ------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months(or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes x No
--- ---
Number of shares of Common Stock outstanding as of August 2, 1994
70,795,187
Exhibit Index Appears at Page 17
-1-
<PAGE>
ALLEGHENY LUDLUM CORPORATION
SEC FORM 10-Q
FISCAL QUARTER ENDED July 3, 1994
INDEX
Page No.
PART I. - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Condensed Consolidated Balance Sheets 5
Condensed Consolidated Statement of Cash Flows 7
Notes to Condensed Consolidated Financial
Statements 9
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 11
Item 4. Submission of Matters to a Vote of
Security Holders 14
PART II. - OTHER INFORMATION
Item 6. Exhibits and Report on Form 8-K 15
Signatures 16
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In thousands of dollars except per share amounts)
Fiscal Fiscal Fiscal Fiscal
Quarter Quarter Six Mos. Six Mos.
Ended Ended Ended Ended
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
--------- -------- -------- ---------
NET SALES $172,187 $279,547 $486,119 $569,489
Costs and expenses:
Cost of products sold 191,283 216,168 437,000 449,535
Research, development
and technology 9,094 10,152 19,205 21,312
Commercial and
administrative 11,761 11,550 24,646 23,545
Depreciation and
amortization 9,462 7,301 18,936 14,673
------- ------- ------- -------
221,600 245,171 499,787 509,065
------- ------- ------- -------
(LOSS) INCOME FROM STEEL
OPERATIONS (49,413) 34,376 (13,668) 60,424
Other income (expense):
Interest expense - net (1,157) (347) (2,534) (1,059)
(Loss) gain from
limited partnership - (2,479) (2,590) 3,071
Other -- net 84 (607) (131) (1,196)
------- ------- ------- -------
(1,073) (3,433) (5,255) 816
------- ------- ------- -------
(Loss) income before income
taxes (50,486) 30,943 (18,923) 61,240
Income taxes (21,307) 12,342 (7,862) 24,367
------- ------- ------- -------
NET (LOSS) INCOME $(29,179) $ 18,601 $(11,061) $ 36,873
======== ======= ======= =======
3
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PART I - FINANCIAL INFORMATION
ITEM 1 -- FINANCIAL STATEMENTS
ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
(In thousands of dollars except per share amounts)
- Continued -
Fiscal Fiscal Fiscal Fiscal
Quarter Quarter Six Mos. Six Mos.
Ended Ended Ended Ended
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
--------- -------- -------- ---------
Per common share:
Primary $(.41) $.28 $(.15) $.56
======== ======= ======= =======
Fully diluted N.D. $.27 N.D. $.54
======= ======= ======== ========
Dividends declared
per common share $.12 $.12 $.24 $.23
======= ======= ======== ========
N.D. Non-Dilutive
See notes to condensed consolidated financial statements
4
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands of dollars)
July 3, January 2,
1994 1994
--------- ----------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 22,252 $ 48,107
Short-term investments 34,377 50,466
Trade receivables--net 67,346 110,962
Inventories (Note 2) 208,080 254,764
Prepaid expenses and other current
assets 7,569 5,489
--------- ---------
TOTAL CURRENT ASSETS 339,624 469,788
Properties, plants and equipment--net 454,906 447,942
Cost in excess of net assets
acquired 142,386 144,132
Investment in limited partnership - 22,764
Deferred income taxes 59,921 54,220
Assets acquired from Athlone and
held for sale 29,037 29,117
Other assets 6,655 6,086
--------- ---------
TOTAL ASSETS $1,032,529 $1,174,049
========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 2,167 $ 3,158
Senior secured notes assumed in
Athlone acquisition - 25,000
Accounts payable 43,863 83,752
Accrued compensation and benefits 70,056 50,864
Income taxes payable and deferred 2,752 20,634
Other accrued expenses 22,358 27,469
--------- ---------
TOTAL CURRENT LIABILITIES 141,196 210,877
Long-term debt, less current portion 137,592 138,870
Pensions 98,056 106,227
Postretirement benefit liability 264,023 285,122
Other 22,051 29,531
--------- ---------
TOTAL LIABILITIES 662,918 770,627
5
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(in thousands of dollars)
- Continued -
July 3, January 2,
1994 1994
--------- ----------
SHAREHOLDERS' EQUITY:
Preferred stock, par value $1:
authorized--50,000,000 shares;
issued--none
Common stock, par value $ .10:
authorized--250,000,000 shares;
issued--72,878,242 shares 7,288 7,288
Additional capital 270,099 269,112
Retained earnings 124,096 152,258
Equity adjustment related to
minimum liability for pension plans (2,353) (2,353)
Common stock in treasury at cost--
2,157,195 and 1,844,381 shares (29,519) (22,883)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 369,611 403,422
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $1,032,529 $1,174,049
========= =========
See notes to condensed consolidated financial statements
6
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands of dollars)
Fiscal Fiscal
Six Months Six Months
Ended Ended
July 3,1994 July 4,1993
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income $(11,061) $ 36,873
Adjustment to reconcile net income
to cash flow from operating activities:
Depreciation and amortization 18,936 14,673
Limited partnership loss (gain) 2,590 (3,071)
Deferred taxes (790) (2,510)
Change in operating assets
and liabilities:
Long-term retirement liabilities (9,899) 2,733
Trade receivables 43,616 (21,452)
Inventories 46,684 37,770
Trade payables (39,889) (8,781)
Net change in other current assets
and current liabilities (10,654) (5,343)
Other changes (6,900) (1,587)
------- -------
CASH FROM OPERATING ACTIVITIES 32,633 49,305
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of properties, plants
and equipment--net (24,156) (17,812)
Sales (purchases) of
short-term investments 16,089 (16,418)
Long-term investments - (3,079)
Increase in notes receivable (401) (780)
------- -------
CASH USED BY
INVESTING ACTIVITIES (8,468) (38,089)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on senior secured debt
assumed in Athlone acquisition (25,000) -
Payments on long-term debt and
capital leases (2,269) (1,125)
Dividends paid (16,996) (15,147)
Purchases of treasury stock (7,539) -
Employee stock plans 1,784 1,600
------- -------
CASH USED BY FINANCING ACTIVITIES (50,020) (14,672)
7
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ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(in thousands of dollars)
- Continued -
Fiscal Fiscal
Six Months Six Months
Ended Ended
July 3,1994 July 4,1993
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS (25,855) (3,456)
Balance of cash and cash equivalents at
beginning of period 48,107 51,437
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,252 $ 47,981
======= =======
See notes to condensed consolidated financial statements
8
<PAGE>
ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1--FINANCIAL STATEMENTS
This financial information should be read in conjunction with the
financial statements and notes thereto for the fiscal year ended
January 2, 1994. The accompanying unaudited condensed consolidated
financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial
information and with the instructions for Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments (consisting only of normal accruals)
considered necessary for a fair presentation have been included.
Operating results for the fiscal quarter and six months ended July
3, 1994 are not necessarily indicative of results of operations
that may be expected for the fiscal year ending January 1, 1995.
Net income per common share was computed based on the weighted
average number of shares of common stock outstanding during the
periods: 70,792,035 and 70,865,486 shares for the fiscal quarter
and six months, respectively, ended July 3, 1994 and 65,874,150 and
65,851,610 shares for the fiscal quarter and six months,
respectively, ended July 4, 1993.
The Company's fiscal year and fiscal quarters end on the Sunday
closest to the last day of the calendar month.
NOTE 2--INVENTORIES
Inventories consisted of the following:
July 3, January 2,
1994 1994
-------- ---------
(in thousands of dollars)
Raw materials $ 31,567 $ 55,647
Work-in-process and finished products 190,613 208,648
Supplies 15,661 16,609
------- -------
Total inventories at current cost 237,841 280,904
Less allowances to reduce current
cost values to LIFO basis 29,761 26,140
------- -------
$208,080 $254,764
======= =======
Substantially all of the Company's inventories are determined by
the LIFO method.
9
<PAGE>
NOTE 3--LITIGATION
The Company is involved in various lawsuits from time to time
arising in the ordinary course of business and otherwise. In April
1994, the United States District Court for the Western District of
Pennsylvania issued an order adverse to the Company in a case filed
in 1989. The order, which granted a motion for summary judgment
filed by Sunbeam-Oster Company, Inc., would require Allegheny
Ludlum to pay approximately $8 million to Sunbeam-Oster. The
Company has filed an appeal of the District Court's judgment with
the United States Court of Appeals for the Third Circuit. The
Company continues to believe that Sunbeam-Oster's claims are
without merit and will continue to defend the case vigorously.
10
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
This discussion should be read in conjunction with the
information in the Condensed Consolidated Financial Statements and
Notes to the Condensed Consolidated Financial Statements.
LABOR STRIKE
As previously disclosed, following the expiration of the Labor
Contract with the United Steelworkers of America (USWA), the Union
called a strike at most plants on April 1, 1994. An agreement was
reached and employees began returning to work on June 9. A new 4-
year labor contract was subsequently ratified. Excluding a $3,000
per employee signing bonus, the Company estimates that the annual
cost increase of this contract will average approximately 3%. The
strike had a significant adverse impact on the Company's sales and
earnings and caused the first quarterly operating loss in its
history. All costs related to the strike were expensed in the 1994
second quarter including signing bonuses and related benefits for
both hourly and salary personnel ($.14 per share) and cost premiums
to purchase semi-finished steel coils to meet customer needs during
the strike ($.02 per share). The Company cannot predict the future
impact of the strike on its sales and operations but many customers
have indicated that they had to make interim commitments to other
suppliers. The timing and extent of the Company's return to
previous profit levels depends on how quickly sales volumes can be
restored.
RESULTS OF OPERATIONS
Net sales by product line were as follows:
Fiscal Quarter Fiscal Six Months
Ended Ended
---------------------- -------------------
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
------- ------- -------- --------
(millions) (millions)
Stainless steel $136.2 $229.0 $382.2 $463.3
Silicon electrical steel 18.0 39.5 60.9 81.9
Other specialty alloy 18.0 11.0 43.0 24.3
----- ----- ----- -----
Total net sales $172.2 $279.5 $486.1 $569.5
===== ===== ===== =====
11
<PAGE>
Net sales decreased 38% in the second fiscal quarter of 1994
compared to the second fiscal quarter of 1993 and decreased 15% in
the first six months of 1994 compared to the same 1993 period.
Shipments were 72,115 tons and 217,176 tons in the 1994 second
quarter and six months, respectively, compared to 132,860 tons and
270,133 tons in the 1993 periods. The decreases were the result of
the strike. Partially offsetting the effects of the strike were
the inclusion of the Washington Plant (Jessop) sales, limited
production and shipments by the salaried work force at plants
affected by strike along with sales from nonstriking operations
including ALstrip, Inc. and Claremore, Oklahoma.
The decreases in stainless steel and silicon electrical steel
sales in the 1994 periods compared to the 1993 periods were a
direct result of the strike.
Other specialty alloy sales increased 64% and 77% in the
second quarter and first six months of 1994, respectively, compared
to the 1993 periods. The increases were due to the inclusion of
tool and other alloy sales from the Washington Plant (Jessop) in
the 1994 periods.
Cost of products sold exceeded sales in the 1994 second
quarter as a result of reduced sales due to the strike, continuing
fixed costs, the expense for the hourly signing bonus resulting
from the new contract and a related bonus for salaried employees.
The same factors caused cost of products sold as a percent of sales
in the 1994 first six months to be 11.0 percentage points higher
than in the 1993 period.
Research, development and technology costs decreased in the
second quarter and first six months of 1994 compared to the 1993
periods primarily due to the effects of the labor strike.
Commercial and administrative expenses increased in the 1994
periods compared to the 1993 periods primarily due to the inclusion
of Washington Plant (Jessop) expenditures and the payment of the
salary bonus. These costs were partially offset by lower expense
for incentive compensation plans and overall reduced spending due
to the labor strike.
Interest expense-net increased in the 1994 periods as a result
of lower interest income due to lower cash balances available for
investment.
12
<PAGE>
Loss or gain from the limited partnership investment reflected
the recording of equity valuation decreases or increases for the
partnership investment. At the end of the first quarter of 1994,
the Company voluntarily contributed an investment in the limited
partnership fund to an irrevocable trust established for the
purpose of partially funding the retiree medical benefits
obligation the Company has to its employees represented by the
United Steelworkers of America. The Company has also contributed
$5 million in cash and a $3.5 million capital contribution to a
second limited partnership fund to the trust. Returns from
investments in this trust will be amortized in accordance with FAS
No. 106. This resulted in a $900,000 reduction in cost of sales in
the second quarter of 1994.
The effective tax rates of 42.2% and 41.5% in the 1994 second
quarter and first six months, respectively, compare to effective
tax rates of 39.9% and 39.8% in the 1993 periods. The primary
causes of the increase include the amortization of cost in excess
of net assets acquired which is not deductible for tax purposes and
a 1% increase in the statutory Federal income tax rate which was
enacted in the third quarter of 1993. The increase also reflects a
decrease in the Pennsylvania corporate net income tax rate from
12.25% to 9.99% over the years 1994 through 1997. Since the
Company has a deferred tax asset, this change in rates reduced
previously recorded deferred tax benefits and required the Company
to record a one-time charge for additional tax expense of
approximately $1 million in the second quarter of 1994.
FINANCIAL CONDITION AND LIQUIDITY
Working capital decreased to $198.4 million at the end of the
second quarter of 1994 compared to $258.9 million at the end of
1993. The current ratio increased to 2.4 from 2.2 in the same
periods. The change was primarily due to decreases in accounts
receivable and inventories during the strike which were only
partially offset by decreases in accounts payable and accrued
income taxes.
At the end of the second quarter of 1994, the Company held
cash and short-term investments of $56.6 million. In the first six
months of 1994, cash on hand coupled with cash generated from
working capital reductions during the strike was used to pay down
$27.3 million of debt, invest $24.2 million in capital equipment,
pay dividends of $17.0 million, and purchase $7.5 million in
treasury stock. The Company continues to anticipate that
internally generated funds and current cash on hand will be
adequate to meet foreseeable needs. In addition, the Company has
$150 million of unused credit lines. The Company believes that its
ongoing financial strength has not been impaired by the labor
strike.
The Company estimates that capital expenditures will be
approximately $50.0 million for the full year of 1994.
13
<PAGE>
MANAGEMENT CHANGES
Arthur H. Aronson became the President and Chief Executive
Officer of the Company effective August 1, 1994. He succeeds
Robert P. Bozzone who retired as President and Chief Executive
Officer. Mr. Bozzone has been named Vice Chairman of the Board and
has agreed to serve as an active consultant to the Company.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's 1994 annual meeting of shareholders was held on
May 20, 1994. At that meeting, the five nominees named in the
proxy statement for the meeting were elected, having received the
following number of votes:
Name No. of Votes For No. of Votes Withheld
Arthur H. Aronson 59,429,191 386,429
W. Craig McClelland 59,475,038 340,582
Richard K. Pitler 59,458,950 356,670
James E. Rohr 59,475,998 339,622
George W. Tippins 59,471,204 344,416
The shareholders also voted on and approved and adopted an
amendment of Article Fifth of the Company's Restated Articles of
Incorporation to increase the authorized Common Stock of the
Company from 100,000,000 shares to 250,000,000 shares. The number
of votes cast for approval of the amendment was 50,828,401, and
against was 8,828,513, the number abstaining was 158,506 and there
were 200 broker non-votes in connection with the approval of the
amendment.
The shareholders also voted on and approved the Allegheny
Ludlum Corporation Stock Acquisition and Retention Plan. The
number of votes cast for approval of the Plan was 57,791,389, and
against was 1,838,563, the number abstaining was 185,468 and there
were 200 broker non-votes in connection with the approval of the
Plan.
In addition, the shareholders voted on and approved the
ratification of the selection of Ernst & Young as independent
auditors of the Company and its subsidiaries for fiscal year 1994.
The number of votes cast for approval was 59,500,004, and against
was 184,809, the number abstaining was 130,607 and there were 200
broker non-votes in connection with the ratification of the
selection of Ernst & Young.
14
<PAGE>
Item 6. Exhibits and Report on Form 8-K
(a) Exhibits
(4) Restated and Amended Articles of Incorporation
(10)(a) Amendment as of June 30, 1994 to Amended
and Restated Credit Agreement dated as of
December 28, 1990
(10)(b) Allegheny Ludlum Corporation Stock Acquisition
and Retention Plan
(10)(c) Consulting Agreement dated as of August 1, 1994
between Allegheny Ludlum Corporation and
R. P. Bozzone
(10)(d) Allegheny Ludlum Corporation 1987 Stock Option
Incentive Plan, as amended and restated
(10)(e) Performance Share Plan for Key Employees of
Allegheny Ludlum Corporation and Subsidiaries,
as amended and restated
(11) Computation of Per Share Earnings
(b) Report on Form 8-K
The Company filed a report on Form 8-K
dated June 8, 1994, regarding the settlement of a
10 week strike called by the United Steelworkers
of America against the Company.
15
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ALLEGHENY LUDLUM CORPORATION
By /s/ J.L. Murdy
----------------------------
J. L. Murdy
Senior Vice President - Finance
and Chief Financial Officer
(Duly Authorized Officer and
Principal Financial Officer)
August 16, 1994
16
<PAGE>
EXHIBIT INDEX
Exhibit
Number
_______
(4) Restated and Amended Articles of Incorporation
(10)(a) Amendment as of June 30, 1994 to Amended and Restated
Credit Agreement dated as of December 28, 1990
(10)(b) Allegheny Ludlum Corporation Stock Acquisition and
Retention Plan
(10)(c) Consulting Agreement dated as of August 1, 1994 between
Allegheny Ludlum Corporation and R. P. Bozzone
(10)(d) Allegheny Ludlum Corporation 1987 Stock Option Incentive
Plan, as amended and restated
(10)(e) Performance Share Plan for Key Employees of Allegheny
Ludlum Corporation and Subsidiaries, as amended and
restated
(11) Computation of Per Share Earnings
17
<PAGE>
Exhibit 4
RESTATED ARTICLES OF
INCORPORATION OF
ALLEGHENY LUDLUM CORPORATION
(COMPOSITE)
FIRST: The name of the Corporation is ALLEGHENY
LUDLUM CORPORATION.
SECOND: The location and post office address of the
registered office of the Corporation in this Commonwealth is 10th
Floor Six PPG Place, Pittsburgh, Pennsylvania 15222.
THIRD: The Corporation is incorporated under the
Business Corporation Law of the Commonwealth of Pennsylvania for
the purpose or purposes of having unlimited power to engage in
and to do any lawful act concerning any or all lawful business
for which corporations may be incorporated under said Business
Corporation Law, including, but not limited to, the right to
engage in manufacturing, processing, research and development.
FOURTH: The term for which the Corporation is to
exist is perpetual.
FIFTH: The aggregate number of shares which the
Corporation shall have authority to issue is Three Hundred
Million (300,000,000) shares, as follows:
A. Two Hundred Fifty Million (250,000,000) shares of
Common Stock, of the par value of 10 cents ($0.10) per
share.
Except for and subject to those rights as may be
expressly granted to the holders of Preferred Stock
pursuant to the authority vested by these Articles of
Incorporation in the Board of Directors of the
Corporation, or except as may be provided by the laws
of the Commonwealth of Pennsylvania, the holders of
Common Stock shall have exclusively all rights of
shareholders.
B. Fifty Million (50,000,000) shares of
Preferred Stock, of the par value of one dollar ($1.00)
per share.
Authority is hereby expressly vested in the
Board of Directors of the Corporation at any time and
from time to time by resolution to divide into and
issue the Common Stock and the Preferred Stock in one
or more series and, in establishing such series, to fix
the following:
(a) The voting rights of such series which
may be full, limited, fractional or none, but
which may not be multiple;
<PAGE>
(b) The designation of such series and the
number of shares constituting such series, which
number may at any time or from time to time be
increased or decreased, but not below the number
of shares then outstanding;
(c) The rate at which dividends are to be
payable on shares of such series and, if the
resolution or resolutions establishing such series
determine that such dividends shall be cumulative,
the date from which such dividends shall be
cumulative;
(d) Whether the shares of such series shall
be redeemable and, if so, the price or prices at
which, and the terms and conditions on which, such
shares may be redeemed;
(e) The amounts payable on shares of such
series upon voluntary or involuntary liquidation,
dissolution, winding up or reduction of capital;
(f) Whether the shares of such series shall
be entitled to the benefit of a sinking or
retirement fund to be applied to the purchase or
redemption of such shares, and if so entitled, the
amount of such fund and the manner of its
application, including the price or prices at
which such shares may be redeemed or purchased
through the application of such fund;
(g) The right, if any, of the holders of
shares of such series to convert the same into
shares of Common Stock or Preferred Stock and the
terms and conditions of such conversion;
(h) The price or other consideration for
which the shares of such series shall be issued;
and
(i) Such other terms, limitations and
relative rights and preferences, if any, of any
such series as the Board of Directors may at the
time of such resolution lawfully fix and determine
under the laws of the Commonwealth of
Pennsylvania.
In all other respects each series of the
Common Stock shall be identical and Preferred Stock
shall be identical.
SIXTH: The directors of the Corporation shall be
divided into three classes: Class I, Class II and Class III.
Each class shall consist, as nearly as may be possible, of one-
-2-
<PAGE>
third of the whole number of the Board of Directors. The Class I
directors shall be elected to hold office for a term to expire at
the first annual meeting of the shareholders thereafter; the
Class II directors shall be elected to hold office for a term to
expire at the second annual meeting of the shareholders
thereafter; and the Class III directors shall be elected to hold
office for a term to expire at the third annual meeting of the
shareholders thereafter, and in the case of each class, until
their respective successors are duly elected and qualified. At
each annual election the directors elected to succeed those whose
terms expire shall be identified as being of the same class as
the directors they succeed and shall be elected to hold office
for a term to expire at the third annual meeting of the
shareholders after their election, and until their respective
successors are duly elected and qualified. If the number of
directors is changed, any increase or decrease in directors shall
be apportioned among the classes so as to maintain all classes as
equal in number as possible, and any additional director elected
to any class shall hold office for a term which shall coincide
with the terms of the other directors in such class and until his
successor is duly elected and qualified.
Subject to the rights of holders of any series of
Preferred Stock then outstanding, in the case of any increase in
the number of directors of the corporation the additional
director or directors shall be elected by the Board of Directors.
No decrease in the number of directors of the Corporation shall
shorten the term of any incumbent director.
SEVENTH: In addition to the requirements of (i) law,
and (ii) the other provisions of these Articles of Incorporation,
as amended, the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Common Stock of the
Corporation entitled to vote shall be required for the adoption
or authorization of a Fundamental Change unless the Fundamental
Change has been approved at a meeting of the Board of Directors
by the vote of more than two-thirds of the incumbent members of
the Board of Directors.
As used in this Article Seventh, "Fundamental Change"
shall mean (1) any merger or consolidation of the Corporation
with or into any other corporation, (2) any sale, lease,
exchange, transfer or other disposition, but excluding a mortgage
or any other security device, of all or substantially all of the
assets of the Corporation, (3) any merger of a Significant
Shareholder into the Corporation or a direct or indirect
subsidiary of the Corporation, (4) any sale, lease, exchange,
transfer or other disposition to the Corporation or to a direct
or indirect subsidiary of the Corporation of any Common Stock of
the Corporation held by a Significant Shareholder or any other
assets of a Significant Shareholder which, if included with all
other dispositions consummated during the same fiscal year of the
Corporation by the same Significant Shareholder, would result in
dispositions of assets having an aggregate fair value in excess
-3-
<PAGE>
of five percent of the total consolidated assets of the
Corporation as shown on its certified balance sheet as of the
end of the fiscal year preceding the proposed disposition, (5)
any reclassification of Common Stock of the Corporation, or any
recapitalization involving Common Stock of the Corporation,
consummated within five years after a Significant Shareholder
becomes a Significant Shareholder, whereby the number of
outstanding shares of Common Stock is reduced or any of such
shares are converted into or exchanged for cash or other
securities, (6) any dissolution and (7) any agreement, contract
or other arrangement providing for any of the transactions
described in this definition of Fundamental Change but,
notwithstanding anything to the contrary herein, Fundamental
Change shall not include any merger pursuant to the Pennsylvania
Business Corporation Law, as amended from time to time, which
does not require a vote of the Corporation's shareholders for
approval.
As used in this Article Seventh, "Significant
Shareholder" shall mean any person who or which beneficially owns
a number of shares of Common Stock of the Corporation, whether or
not such number includes shares not then outstanding or entitled
to vote, which exceeds a number equal to ten percent of the
outstanding shares of Common Stock of the Corporation entitled to
vote, any and all affiliates of such person and any and all
associates and family members of such person or any such
affiliate.
EIGHTH: In addition to the requirements of (i) law,
and (ii) the other provisions of these Articles of Incorporation,
as amended, the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Common Stock of the
Corporation entitled to vote shall be required to amend these
Articles of Incorporation so as to delete, amend or supplement
any term or provision of Articles Fourth, Sixth, Seventh or
Eighth hereof.
-4-
<PAGE>
9439-12B
Microfilm Number Filed with the Department of State on JUN 13 1994
---- -----------
Entity Number 7612 /s/ Robert M. Grant
---- -------------------------------------------------
ACTING Secretary of the Commonwealth
ARTICLES OF AMENDMENT - DOMESTIC BUSINESS CORPORATION
In compliance with the requirements of 15 Pa.C.S. Section 1915
(relating to articles of amendment), the undersigned business
corporation, desiring to amend its Articles, hereby states that:
1. The name of the Corporation is: Allegheny Ludlum Corporation
--------------------------------
2. The address of the Corporation's current registered office in
this Commonwealth is: 10th Floor, Six PPG Place
-----------------------------------------
Pittsburgh, PA 15222 (Allegheny County)
-----------------------------------------
3. The statute by or under which it was incorporated is: Act of
----------
May 5, 1933, P.L. 364, as amended.
-----------------------------------------------------------------
4. The original date of its incorporation is: April 24, 1980
--------------------
5. This amendment shall be effective upon filing these Articles of
Amendment in the Secretary of the Commonwealth.
6. This amendment was adopted by the board of directors and the
shareholders pursuant to 15 Pa.C.S. Section 1914(a) and (b).
7. The amendment adopted by the corporation, set forth in full, is
as follows:
The first paragraph and Section A of Article Fifth of the
Company's Restated Articles of Incorporation are amended to
read as follows:
FIFTH: The aggregate number of shares which the
Corporation shall have the authority to issue is Three
Hundred Million (300,000,000) shares, as follows:
A. Two Hundred Fifty Million (250,000,000) shares
of Common Stock, of the par value of 10 cents
($0.10) per share.
Except for and subject to those rights as may
be expressly granted to the holders of
Preferred Stock pursuant to the authority
vested by these Articles of Incorporation in
the Board of Directors of the Corporation, or
except as may be provided by the laws of the
Commonwealth of Pennsylvania, the holders of
Common Stock shall have exclusively all
rights of shareholders.
IN TESTIMONY WHEREOF, the undersigned Corporation has caused
these Articles of Amendment to be signed by a duly authorized officer
thereof this 7th day of June , 1994.
--------
ALLEGHENY LUDLUM CORPORATION
By: /s/ J. D. Walton
-------------------------
Title: Vice President-General
Counsel and Secretary
-------------------------
JUN 13 94
PA Dept. of State
<PAGE>
Applicant's Account No. Filed this day of
-------- --------
DSCB BCL 806 (Rev 8-72) MAR 13 1987 , A.D. 19
------------------
Filing Fee: $40 Commonwealth of Pennsylvania
AB2
Department of State
/s/ James J. Haggerty
Secretary of the Commonwealth
Articles of COMMONWEALTH OF PENNSYLVANIA
Amendment - DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
- - ----------------------------------------------------------------------
In compliance with the requirements of section 806 of the
Business Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S.
Section 1806), the undersigned corporation, desiring to amend its Articles,
does hereby certify that:
1. The name of the corporation is:
ALLEGHENY LUDLUM CORPORATION
- - ----------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is
(the Department of State is hereby authorized to correct the following
statement to conform to the records of the Department):
10th Floor Six PPG Place
- - ----------------------------------------------------------------------
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
- - ----------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The statute by or under which it was incorporated is:
Act of May 5, 1933, P.L. 364, as amended
- - ----------------------------------------------------------------------
4. The date of its incorporation is: April 24, 1980
--------------------------------
5. (Check, and if appropriate, complete one of the following):
XX The meeting of the shareholders of the corporation at which
--- the amendment was adopted was held at the time and place and
pursuant to the kind and period of notice herein stated.
Time: The 10th day of March , 1987 .
---------- -------------- ------
Place: 10th Floor, Six PPG Place, Pittsburgh, PA
-----------------------------------------------------------
Kind and period of notice written notice was sent to the
----------------------------------------
shareholders on January 30, 1987
- - ----------------------------------------------------------------------
The amendment was adopted by a consent in writing, setting
--- forth the action so taken, signed by all of the shareholders
entitled to vote thereon and filed with the Secretary of the
corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
65,000 shares of common stock
- - ----------------------------------------------------------------------
(b) The number of shares entitled to vote was:
65,000 shares of common stock
- - ----------------------------------------------------------------------
<PAGE>
DSCB BCL 806 (Rev 8-72)-2
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
65,000 shares of common stock
- - ----------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
None
- - ----------------------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, is
as follows:
The Restated Articles of Incorporation of Allegheny Ludlum
Corporation are amended to add thereto new Articles Sixth,
Seventh and Eighth as set forth in Exhibit A attached hereto.
IN TESTIMONY WHEREOF, the undersigned corporation has caused
these Articles of Amendment to be signed by a duly authorized officer
and its corporate seal, duly attested by another such officer, to be
hereunto affixed this day of March 12 , 1987.
--------------- --
ALLEGHENY LUDLUM CORPORATION
----------------------------
(NAME OF CORPORATION)
Attest: By: /s/ Richard P. Simmons
----------------------------
/s/ Jon D. Walton (SIGNATURE)
- - ------------------------------
(SIGNATURE) CHAIRMAN OF THE BOARD
------------------------------
General Counsel & Secretary (TITLE: PRESIDENT, VICE PRESIDENT,
- - ------------------------------ ETC.)
(TITLE: SECRETARY,
ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
EXHIBIT A
SIXTH: The directors of the Corporation shall be divided into three
- - -----
classes: Class I, Class II and Class III. Each class shall consist,
as nearly as may be possible, of one-third of the whole number of the
Board of Directors. The Class I directors shall be elected to hold
office for a term to expire at the first annual meeting of the
shareholders thereafter; the Class II directors shall be elected to
hold office for a term to expire at the second annual meeting of the
shareholders thereafter; and the Class III directors shall be elected
to hold office for a term to expire at the third annual meeting of the
shareholders thereafter, and in the case of each class, until their
respective successors are duly elected and qualified. At each annual
election the directors elected to succeed those whose terms expire
shall be identified as being of the same class as the directors they
succeed and shall be elected to hold office for a term to expire at
the third annual meeting of the shareholders after their election, and
until their respective successors are duly elected and qualified. If
the number of directors is changed, any increase or decrease in
directors shall be apportioned among the classes so as to maintain all
classes as equal in number as possible, and any additional director
elected to any class shall hold office for a term which shall coincide
with the terms of the other directors in such class and until his
successor is duly elected and qualified.
Subject to the rights of holders of any series of Preferred Stock
then outstanding, in the case of any increase in the number of
directors of the corporation the additional director or directors
shall be elected by the Board of Directors. No decrease in the number
of directors of the Corporation shall shorten the term of any
incumbent director.
SEVENTH: In addition to the requirements of (i) law, and (ii) the
- - -------
other provisions of these Articles of Incorporation, as amended, the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of Common Stock of the Corporation entitled to vote
shall be required for the adoption or authorization of a Fundamental
Change unless the Fundamental Change has been approved at a meeting of
the Board of Directors by the vote of more than two-thirds of the
incumbent members of the Board of Directors.
As used in this Article Seventh, "Fundamental Change" shall mean
(1) any merger or consolidation of the Corporation with or into any
other corporation, (2) any sale, lease, exchange, transfer or other
disposition, but excluding a mortgage or any other security device, of
all or substantially all of the assets of the Corporation, (3) any
merger of a Significant Shareholder into the Corporation or a direct
or indirect subsidiary of the Corporation, (4) any sale, lease,
exchange, transfer or other disposition to the Corporation or to a
direct or indirect subsidiary of the Corporation of any Common Stock
of the Corporation held by a Significant Shareholder or any other
assets of a Significant Shareholder which, if included with all other
dispositions consummated during the same fiscal year of the
Corporation by the same Significant Shareholder, would result in
dispositions of assets having an aggregate fair value in excess of
five percent of the total consolidated assets of the Corporation as
shown on its certified balance sheet as of the
<PAGE>
end of the fiscal year preceding the proposed disposition, (5) any
reclassification of Common Stock of the Corporation, or any
recapitalization involving Common Stock of the Corporation,
consummated within five years after a Significant Shareholder becomes
a Significant Shareholder, whereby the number of outstanding shares of
Common Stock is reduced or any of such shares are converted into or
exchanged for cash or other securities, (6) any dissolution and (7)
any agreement, contract or other arrangement providing for any of the
transactions described in this definition of Fundamental Change but,
notwithstanding anything to the contrary herein, Fundamental Change
shall not include any merger pursuant to the Pennsylvania Business
Corporation Law, as amended from time to time, which does not require
a vote of the Corporation's shareholders for approval.
As used in this Article Seventh, "Significant Shareholder" shall
mean any person who or which beneficially owns a number of shares of
Common Stock of the Corporation, whether or not such number includes
shares not then outstanding or entitled to vote, which exceeds a
number equal to ten percent of the outstanding shares of Common Stock
of the Corporation entitled to vote, any and all affiliates of such
person and any and all associates and family members of such person or
any such affiliate.
EIGHTH: In addition to the requirements of (i) law, and (ii) the
- - ------
other provisions of these Articles of Incorporation, as amended, the
affirmative vote of the holders of at least two-thirds of the
outstanding shares of Common Stock of the Corporation entitled to vote
shall be required to amend these Articles of Incorporation so as to
delete, amend or supplement any term or provision of Articles Fourth,
Sixth, Seventh or Eighth hereof.
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
Department of State
To All to Whom These Presents Shall Come, Greeting:
Whereas, In and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domini one thousand nine hundred
and thirty-three, P. L. 364, as amended, the Department of State is
authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment of the Articles of Incorporation of a
business corporation organized under or subject to the provisions of
that Law, and
Whereas, The stipulations and conditions of that Law pertaining
to the amendment of Articles of Incorporation have been fully complied
with by
ALLEGHENY LUDLUM CORPORATION
Therefore, Know Ye, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law,
I do by these presents, which I have caused to be sealed with the
Great Seal of the Commonwealth, extend the rights and powers of the
corporation named above, in accordance with the terms and provisions
of the Articles of Amendment presented by it to the Department of
State, with full power and authority to use and enjoy such rights and
powers, subject to all the provisions and restrictions of the Business
Corporation Law and all other applicable laws of this Commonwealth.
Given under my Hand and the Great Seal of the
Commonwealth, at the City of Harrisburg, this
13th day of March in the year of our Lord one
thousand nine hundred and eighty-seven and of
the Commonwealth the two hundred eleventh.
/s/ James J. Haggerty
---------------------------------------------
Secretary of the Commonwealth
pjd
<PAGE>
Applicant's Account No. Filed this 23rd day of
-------- --------
DSCB BCL 806 (Rev 8-72) January
------------------, A.D. 1987
Filing Fee: $40
AB2 Commonwealth of Pennsylvania
Department of State
/s/ James J. Haggerty
Secretary of the Commonwealth
Articles of COMMONWEALTH OF PENNSYLVANIA
Amendment - DEPARTMENT OF STATE
Domestic Business Corporation CORPORATION BUREAU
- - ----------------------------------------------------------------------
In compliance with the requirements of section 806 of the
Business Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. Section
1806), the undersigned corporation, desiring to amend its Articles,
does hereby certify that:
1. The name of the corporation is:
ALLEGHENY LUDLUM CORPORATION
- - ----------------------------------------------------------------------
2. The location of its registered office in this Commonwealth is
(the Department of State is hereby authorized to correct the following
statement to conform to the records of the Department):
10th Floor Six PPG Place
- - ----------------------------------------------------------------------
(NUMBER) (STREET)
Pittsburgh Pennsylvania 15222
- - ----------------------------------------------------------------------
(CITY) (ZIP CODE)
3. The statute by or under which it was incorporated is:
Act of May 5, 1933, P.L. 364, as amended
- - ----------------------------------------------------------------------
4. The date of its incorporation is: April 24, 1980
--------------------------------
5. (Check, and if appropriate, complete one of the following):
XX The meeting of the shareholders of the corporation at which
--- the amendment was adopted was held at the time and place and
pursuant to the kind and period of notice herein stated.
Time: The 22nd day of December , 1986 .
---------- -------------- ------
Place: 10th Floor Six PPG Place, Pittsburgh, PA
-----------------------------------------------------------
Kind and period of notice written notice was sent to the
----------------------------------------
shareholders on December 11, 1986.
- - ----------------------------------------------------------------------
The amendment was adopted by a consent in writing, setting
--- forth the action so taken, signed by all of the shareholders
entitled to vote thereon and filed with the Secretary of the
corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was:
465,000 shares of common stock; 179,600 shares of 10% Preference Stock
- - ----------------------------------------------------------------------
(b) The number of shares entitled to vote was:
465,000 shares of common stock; 179,600 shares of 10% Preference Stock
- - ----------------------------------------------------------------------
<PAGE>
DSCB BCL 806 (Rev 8-72)-2
7. In the action taken by the shareholders:
(a) The number of shares voted in favor of the amendment was:
465,000 shares of common stock; 179,600 shares of 10% Preference Stock
- - ----------------------------------------------------------------------
(b) The number of shares voted against the amendment was:
none
- - ----------------------------------------------------------------------
8. The amendment adopted by the shareholders, set forth in full, is
as follows:
The Restated Articles of Incorporation of Allegheny Ludlum
Corporation were amended and restated in their entirety and are
attached hereto as Exhibit A.
IN TESTIMONY WHEREOF, the undersigned corporation has caused
these Articles of Amendment to be signed by a duly authorized officer
and its corporate seal, duly attested by another such officer, to be
hereunto affixed this day of 1/21 , 1987.
--------------- --
ALLEGHENY LUDLUM CORPORATION
----------------------------
(NAME OF CORPORATION)
Attest: By: /s/ R. P. Simmons
----------------------------
/s/ Jon D. Walton (SIGNATURE)
- - ------------------------------
(SIGNATURE) CHAIRMAN
------------------------------
General Counsel & Secretary (TITLE: PRESIDENT, VICE PRESIDENT,
- - ------------------------------ ETC.)
(TITLE: SECRETARY,
ASSISTANT SECRETARY, ETC.)
(CORPORATE SEAL)
<PAGE>
RESTATED ARTICLES OF
INCORPORATION OF
ALLEGHENY LUDLUM CORPORATION
FIRST: The name of the Corporation is ALLEGHENY LUDLUM
-----
CORPORATION.
SECOND: The location and post office address of the registered
------
office of the Corporation in this Commonwealth is 10th Floor Six PPG
Place, Pittsburgh, Pennsylvania 15222.
THIRD: The Corporation is incorporated under the Business
-----
Corporation Law of the Commonwealth of Pennsylvania for the purpose or
purposes of having unlimited power to engage in and to do any lawful
act concerning any or all lawful business for which corporations may
be incorporated under said Business Corporation Law, including, but
not limited to, the right to engage in manufacturing, processing,
research and development.
FOURTH: The term for which the Corporation is to exist is
------
perpetual.
FIFTH: The aggregate number of shares which the Corporation
-----
shall have authority to issue is One Hundred Fifty Million
(150,000,000) shares, as follows:
A. One Hundred Million (100,000,000) shares of
Common Stock, of the par value of 10 cents ($0.10) per
share.
EXHIBIT A
<PAGE>
Except for and subject to those rights as may be expressly
granted to the holders of Preferred Stock pursuant to the
authority vested by these Articles of Incorporation in the Board
of Directors of the Corporation, or except as may be provided by
the laws of the Commonwealth of Pennsylvania, the holders of
Common Stock shall have exclusively all rights of shareholders.
B. Fifty Million (50,000,000) shares of Preferred Stock,
of the par value of one dollar ($1.00) per share.
Authority is hereby expressly vested in the Board of
Directors of the Corporation at any time and from time to time by
resolution to divide into and issue the Common Stock and the
Preferred Stock in one or more series and, in establishing such
series, to fix the following:
(a) The voting rights of such series which may be
full, limited, fractional or none, but which may not be
multiple;
(b) The designation of such series and the number of
shares constituting such series, which number may at any
time or from time to time be increased or decreased, but not
below the number of shares then outstanding;
-2-
<PAGE>
(c) The rate at which dividends are to be payable on
shares of such series and, if the resolution or resolutions
establishing such series determine that such dividends shall
be cumulative, the date from which such dividends shall be
cumulative;
(d) Whether the shares of such series shall be
redeemable and, if so, the price or prices at which, and the
terms and conditions on which, such shares may be redeemed;
(e) The amounts payable on shares of such series upon
voluntary or involuntary liquidation, dissolution, winding
up or reduction of capital;
(f) Whether the shares of such series shall be
entitled to the benefit of a sinking or retirement fund to
be applied to the purchase or redemption of such shares, and
if so entitled, the amount of such fund and the manner of
its application, including the price or prices at which such
shares may be redeemed or purchased through the application
of such fund;
(g) The right, if any, of the holders of shares of
such series to convert the same into shares of Common Stock
or Preferred Stock and the terms and conditions of such
conversion;
-3-
<PAGE>
(h) The price or other consideration for which the
shares of such series shall be issued; and
(i) Such other terms, limitations and relative rights
and preferences, if any, of any such series as the Board of
Directors may at the time of such resolution lawfully fix
and determine under the laws of the Commonwealth of
Pennsylvania.
In all other respects each series of the Common Stock
shall be identical and Preferred Stock shall be identical.
-4-
<PAGE>
COMMONWEALTH OF PENNSYLVANIA
Department of State
To All to Whom These Presents Shall Come, Greeting:
Whereas, In and by Article VIII of the Business Corporation Law,
approved the fifth day of May, Anno Domini one thousand nine hundred
and thirty-three, P. L. 364, as amended, the Department of State is
authorized and required to issue a
CERTIFICATE OF AMENDMENT
evidencing the amendment and restatement of the Articles of
Incorporation in their entirety of a business corporation organized
under or subject to the provisions of that Law, and
Whereas, The stipulations and conditions of that Law pertaining
to the amendment of Articles of Incorporation have been fully complied
with by
ALLEGHENY LUDLUM CORPORATION
Henceforth The "Articles," as defined in Article I of the
Business Corporation Law, shall not include any prior documents;
Therefore, Know Ye, That subject to the Constitution of this
Commonwealth and under the authority of the Business Corporation Law,
I do by these presents, which I have caused to be Sealed with the
Great Seal of the Commonwealth, extend the rights and powers of the
corporation named above, in accordance with the terms and provisions
of the Articles of Amendment presented by it to the Department of
State, with full power and authority to use and enjoy such rights and
powers, subject to all the provisions and restrictions of the Business
Corporation Law and all other applicable laws of this Commonwealth.
Given under my Hand and the Great Seal of the
Commonwealth, at the City of Harrisburg, this
23rd day of January in the year of our Lord
one thousand nine hundred and eighty-seven
and of the Commonwealth the two hundred
eleventh.
/s/ James J. Haggerty
---------------------------------------------
Secretary of the Commonwealth
pjd
Exhibit 10(a)
FIFTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
AMONG
ALLEGHENY LUDLUM CORPORATION
as the Company
and
PNC BANK, NATIONAL ASSOCIATION
(formerly Pittsburgh National Bank)
CONTINENTAL BANK
(formerly Continental Bank N.A.)
MELLON BANK, N.A.
THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION)
INTEGRA BANK/PITTSBURGH
(formerly Integra National Bank/Pittsburgh and
The Union National Bank of Pittsburgh)
THE FIRST NATIONAL BANK OF BOSTON
as the Banks
and
PNC BANK, NATIONAL ASSOCIATION
(formerly Pittsburgh National Bank)
as the Agent
June 30, 1994
b&f 13464:2
<PAGE>
FIFTH AMENDMENT TO AMENDED AND RESTATED
CREDIT AGREEMENT
THIS FIFTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT dated as of the 30th day of June, 1994 (the "Fifth
Amendment") is made by and among ALLEGHENY LUDLUM CORPORATION,
a corporation organized and existing under the laws of the
Commonwealth of Pennsylvania (the "Company"), PNC BANK, NATIONAL
ASSOCIATION (formerly Pittsburgh National Bank), CONTINENTAL BANK
(formerly Continental Bank N.A.), MELLON BANK, N.A., THE CHASE
MANHATTAN BANK (NATIONAL ASSOCIATION), INTEGRA BANK/PITTSBURGH
(formerly Integra National Bank/Pittsburgh and The Union National
Bank of Pittsburgh) and THE FIRST NATIONAL BANK OF BOSTON, as the
Banks party hereto (the "Banks"), and PNC BANK, NATIONAL
ASSOCIATION (formerly Pittsburgh National Bank), as the agent for
the Banks (the "Agent") to that certain Amended and Restated
Credit Agreement dated as of December 28, 1990 (the "Original
Agreement"), as amended by that certain First Amendment to
Amended and Restated Credit Agreement dated as of June 30, 1991
(the "First Amendment"), that certain Second Amendment to Amended
and Restated Credit Agreement dated as of October 31, 1991 (the
"Second Amendment"), that certain letter amendment dated as of
December 17, 1991 (the "Letter Amendment"), that certain Third
Amendment to Amended and Restated Credit Agreement dated as of
June 30, 1992 (the "Third Amendment"), that certain Consent #1 to
Amended and Restated Credit Agreement dated May 28, 1993 (the
"Consent #1"), that certain Fourth Amendment to Amended and
Restated Credit Agreement dated as of June 30, 1993 (the "Fourth
Amendment") and that certain letter amendment dated as of
November 11, 1993 (the "Letter Amendment #2") (the Original
Agreement, the First Amendment, the Second Amendment, the Letter
Amendment, the Third Amendment, the Consent #1, the Fourth
Amendment and the Letter Amendment #2 together with all further
amendments and modifications thereto and thereof shall
hereinafter be referred to as the "Existing Agreement").
WITNESSETH:
WHEREAS, the Company, the Banks and the Agent entered into
the Original Agreement pursuant to which the Banks agreed to
extend credit to the Company consisting of certain revolving
credit and term loan facilities, as more fully described therein,
the aggregate principal amount of which shall not exceed
$110,000,000;
WHEREAS, the Term Loans were paid in full, in accordance
with their terms, on December 27, 1991 and the credit facilities
currently available to the Company pursuant to the terms and
conditions of the Existing Agreement consist of a Tranche A
Revolving Credit Commitment the aggregate principal amount of
which shall not exceed $60,000,000 and a Tranche B Revolving
Credit Commitment the aggregate principal amount of which shall
not exceed $40,000,000;
<PAGE>
WHEREAS, the Company has requested that the Banks extend
their Commitments under the Tranche A Revolving Credit Commitment
and the Tranche B Revolving Credit Commitment for an additional
one-year period;
WHEREAS, the Banks are willing to extend their Commitments
for such an additional period; and
WHEREAS, the Company, the Banks and the Agent wish to amend
the Existing Agreement to make such changes.
NOW THEREFORE, in consideration of the mutual premises and
intending to be legally bound hereby, the parties hereto agree to
amend the Existing Agreement as follows:
FIRST: Section 1.1 of the Existing Agreement is hereby
amended such that the definition "Fifth Amendment Effective Date"
shall be added thereto which such definition shall read in its
entirety as follows:
"Fifth Amendment Effective Date" shall mean June 30, 1994.
SECOND: Pursuant to Subsection 2.1b(ii) of the Existing
Agreement, the Banks hereby agree to extend the term of the
Tranche A Revolving Credit Commitment for an additional one-year
period. From and after the Fifth Amendment Effective Date, the
Tranche A Maturity Date shall be deemed to be June 30, 1997 or
such later date as is ultimately determined in accordance with
Subsection 2.1b of the Agreement.
THIRD: Pursuant to Subsection 2.1c(iii) of the Existing
Agreement, the Banks hereby agree to extend the term of the
Tranche B Revolving Credit Commitment for an additional one-year
period. From and after the Fifth Amendment Effective Date, the
Tranche B Maturity Date shall be deemed to be June 30, 1995 or
such later date as is ultimately determined in accordance with
Subsection 2.1c of the Agreement.
FOURTH: Except as expressly amended by this Fifth
Amendment, the Existing Agreement and each and every
representation, warranty, covenant, term and condition contained
therein is specifically ratified and confirmed.
FIFTH: Each capitalized term used herein as a defined term
which is not defined herein, but which is defined in the Existing
Agreement, shall have the meaning given it in the Existing
Agreement.
SIXTH: This Fifth Amendment may be executed in as many
different counterparts as are convenient to the parties hereto,
each of which when executed by the Company, the Banks and the
Agent shall be regarded as an original and all such counterparts
shall constitute one Fifth Amendment.
-2-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be
legally bound have caused this Fifth Amendment to be duly
executed by their proper and duly authorized representatives the
day first above written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By: /s/ C. L. Schmidt By: /s/ R. S. Park
--------------------------- ---------------------------
Name: C. L. Schmidt Name: R. S. Park
------------------------- -------------------------
Title: Assistant Secretary Title: Vice President, Treasurer
------------------------ ------------------------
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By: /s/ R. H. Friend By:
--------------------------- ---------------------------
Name: R. H. Friend Name:
------------------------- -------------------------
Title: AVP Title:
------------------------ ------------------------
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By: By: /s/ John M. Dillon
--------------------------- ---------------------------
Name: Name: John M. Dillon
------------------------- -------------------------
Title: Title: Vice President
------------------------ ------------------------
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By: /s/ R. K. James By:
--------------------------- ---------------------------
Name: Richard K. James Name:
------------------------- -------------------------
Title: Vice President Title:
------------------------ ------------------------
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By: By: /s/ Alexander S. Rapetski II
--------------------------- ---------------------------
Name: Name: Alexander S. Rapetski II
------------------------- -------------------------
Title: Title: Vice President
------------------------ ------------------------
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By:____________________________ By:___________________________
Name:__________________________ Name:_________________________
Title:_________________________ Title:________________________
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By: /s/ Paul A. Sakalik By:
--------------------------- ---------------------------
Name: Paul A. Sakalik Name:
------------------------- -------------------------
Title: Vice President Title:
----------------------- ------------------------
b&f 13464:2
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-3-
<PAGE>
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound have caused this Fifth Amendment to be duly executed by their
proper and duly authorized representatives the day first above
written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
PNC BANK, NATIONAL ASSOCIATION, CONTINENTAL BANK,
(formerly Pittsburgh National (formerly Continental Bank N.A.),
Bank), as a Bank and as the Agent as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
MELLON BANK, N.A., THE CHASE MANHATTAN BANK
as a Bank (NATIONAL ASSOCIATION),
as a Bank
By:___________________________ By:___________________________
Name:_________________________ Name:_________________________
Title:________________________ Title:________________________
INTEGRA BANK/PITTSBURGH, THE FIRST NATIONAL BANK
(formerly Integra National Bank/ OF BOSTON, as a Bank
Pittsburgh and The Union National
Bank of Pittsburgh),
By: By: /s/ Karen Lanastaff
--------------------------- ---------------------------
Name: Name: Karen Lanastaff
------------------------- -------------------------
Title: Title: Director
----------------------- ------------------------
b&f 13464:2
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-3-
<PAGE>
Exhibit 10(b)
ALLEGHENY LUDLUM CORPORATION
STOCK ACQUISITION AND RETENTION PLAN
ARTICLE I. PURPOSE AND ADOPTION OF THE PLAN
1.01 PURPOSE. The purpose of the Allegheny Ludlum
Corporation Stock Acquisition and Retention Plan is to
assist the Corporation (as hereinafter defined) in retaining and
motivating selected key management employees who will contribute
to the Corporation's success. The Plan encourages eligible
employees to hold a proprietary interest in the Corporation by
offering them an opportunity to receive grants of restricted
shares of Stock (as hereinafter defined) which, in accordance
with the terms and conditions set forth below, will vest only if
the employees retain, for a specified period of time, ownership
of (i) shares of Stock purchased pursuant to this Plan or (ii)
already-owned shares of Stock which such employees identify as
being subject to this Plan. Awards under the Plan will act as an
incentive to participating employees to achieve long-term
objectives which will inure to the benefit of all shareholders of
the Corporation.
1.02 ADOPTION AND EFFECTIVE DATE. The Plan has been approved
by the Board subject to the approval of the Corporation's
shareholders at the 1994 annual meeting of shareholders. The Plan
will become effective as of January 1, 1994 if at such meeting a
quorum is present and the votes of the holders of a majority of
the securities of the Corporation present or represented at such
meeting and entitled to vote with respect to the Plan shall be
cast in favor of its approval.
ARTICLE II. DEFINITIONS
For purposes of this Plan, the capitalized terms set forth below
shall have the following meanings:
2.01 AWARD AGREEMENT means a written agreement between the
Corporation and a Participant or a written acknowledgment from
the Corporation specifically setting forth the terms and
conditions of an award of Restricted Stock granted to a
Participant pursuant to Article VII of the Plan.
2.02 BOARD means the Board of Directors of the Corporation.
2.03 BUSINESS DAY means any day on which the New York Stock
Exchange shall be open for trading.
2.04 CAUSE means a determination by the Committee that a
Participant has engaged in conduct that is dishonest or illegal,
involves moral turpitude or jeopardizes the Corporation's right
<PAGE>
to operate its business in the manner in which it is now
operated.
2.05 CHANGE IN CONTROL means any of the events set forth
below:
(a) The acquisition in one or more transactions, other
than from the Corporation, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Exchange Act) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
a number of Corporation Voting Securities in excess of 30%
of the Corporation Voting Securities unless such acquisition
has been approved by the Board; or
(b) Any election has occurred of persons to the Board
that causes two-thirds of the Board to consist of persons
other than (i) persons who were members of the Board on
August 1, 1993 and (ii) persons who were nominated for
election as members of the Board at a time when two-thirds
of the Board consisted of persons who were members of the
Board on August 1, 1993; provided, however, that any person
nominated for election by the Board at a time when at least
two-thirds of the members of the Board were persons
described in clauses (i) and/or (ii) or by persons who were
themselves nominated by such Board shall, for this purpose,
be deemed to have been nominated by a Board composed of
persons described in clause (i); or
(c) Approval by the shareholders of the Corporation of
a reorganization, merger or consolidation, unless, following
such reorganization, merger or consolidation, all or
substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Stock
and Corporation Voting Securities immediately prior to such
reorganization, merger or consolidation, following such
reorganization, merger or consolidation beneficially own,
directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors or
trustees, as the case may be, of the entity resulting from
such reorganization, merger or consolidation in
substantially the same proportion as their ownership of the
Outstanding Stock and Corporation Voting Securities
immediately prior to such reorganization, merger of
consolidation, as the case may be; or
(d) Approval by the shareholders of the Corporation of
(i) a complete liquidation or dissolution of the Corporation
or (ii) a sale or other disposition of all or substantially
all the assets of the Corporation.
- 2 -
<PAGE>
2.06 COMMITTEE means the Personnel and Compensation
Committee of the Board.
2.07 CORPORATION means Allegheny Ludlum Corporation, a
Pennsylvania corporation, and its successors.
2.08 CORPORATION VOTING SECURITIES means the combined voting
power of all outstanding voting securities of the Corporation
entitled to vote generally in the election of the Board.
2.09 DATE OF GRANT means the date as of which an award
of Restricted Stock is granted in accordance with Article VII.
2.10 DESIGNATED STOCK means shares of Stock already owned by
a Participant that the Participant identifies as being subject to
the Plan, thereby triggering the grant of Restricted Stock to
such Participant pursuant to Article VII.
2.11 DESIGNATION NOTICE means a written notice, in a form
acceptable to the Committee, by which a Participant designates
previously-acquired shares of Stock as Designated Stock.
2.12 DISABILITY means any physical or mental injury or
disease of a permanent nature which renders a Participant
incapable of meeting the requirements of the employment performed
by such Participant immediately prior to the commencement of such
disability. The determination of whether a Participant is
disabled shall be made by the Committee in its sole and absolute
discretion. Notwithstanding the foregoing, if a Participant's
employment by the Corporation terminates by reason of a
disability, as defined in an Employment Agreement between such
Participant and the Corporation, such Participant shall be deemed
to be disabled for purposes of the Plan.
2.13 EFFECTIVE DATE means the date as of which the Plan
shall become effective, as determined in accordance with Section
1.02.
2.14 EXCHANGE ACT means the Securities Exchange Act of 1934,
as amended.
2.15 FAIR MARKET VALUE means, as of any given date, the
average of the high and low trading prices of the Stock on such
date as reported on the New York Stock Exchange or, if the Stock
is not then traded on the New York Stock Exchange, on such other
national securities exchange on which the Stock is admitted to
trade, or, if none, on the National Association of Securities
Dealers Automated Quotation System if the Stock is admitted for
quotation thereon; provided, however, if there were no sales
reported as of such date, Fair Market Value shall be computed as
of the last date preceding such date on which a sale was
reported; provided, further, that if any such exchange or
- 3 -
<PAGE>
quotation system is closed on any day on which Fair Market Value
is to be determined, Fair Market Value shall be determined as of
the first date immediately preceding such date on which such
exchange or quotation system was open for trading.
2.16 OUTSTANDING STOCK means, at any time, the issued and
outstanding Stock.
2.17 PARTICIPANT means any person selected by the Committee,
pursuant to Section 5.01, as eligible to participate under the
Plan.
2.18 PERMITTED TRANSFEREE means a Participant's spouse, or
(by blood, adoption or marriage) parent, child, stepchild,
descendant or sibling, or the estate, any guardian, custodian,
conservator or committee of, or any trust for the benefit of, the
Participant or any of the foregoing persons.
2.19 PLAN means the Allegheny Ludlum Corporation Stock
Acquisition and Retention Plan, as the same may be amended from
time to time.
2.20 PLAN YEAR means each of the calendar years 1994 through
and including 1998.
2.21 PURCHASE AMOUNT means the dollar amount that a
Participant specifies in a Purchase Notice with respect to a
particular Purchase Date.
2.22 PURCHASE DATE means, with respect to any Window Period,
the Business Day immediately following the last day of the Window
Period.
2.23 PURCHASED STOCK means Stock purchased by a Participant
pursuant to Article VI, which triggers the grant of Restricted
Stock to such Participant pursuant to Article VII.
2.24 PURCHASE LOAN means a loan provided to a Participant by
the Corporation to facilitate the Participant's purchase of Stock
pursuant hereto.
2.25 PURCHASE NOTICE means a written notice, in a form
acceptable to the Committee, by which a Participant may elect to
purchase Stock as of a Purchase Date in accordance with Section
6.01.
2.26 RELATED STOCK means, with respect to any share of
Restricted Stock, the two shares of Purchased Stock or Designated
Stock, as the case may be, which entitle such Participant to
receive such share of Restricted Stock pursuant to Article VII.
- 4 -
<PAGE>
2.27 RESTRICTED STOCK means shares of Stock awarded to a
Participant subject to restrictions as described in Article VII.
2.28 STOCK means the common stock, par value $0.10 per
share, of the Corporation.
2.29 WINDOW PERIOD means each of the four (4) periods in
each year consisting of the ten (10) consecutive Business Days
beginning on the third (3rd) Business Day following the release
by the Corporation of its quarterly or annual summary statements
of sales and earnings and ending on the twelfth (12th) Business
Day following such date. Notwithstanding the foregoing, for Plan
Year 1994, the Plan will apply only with respect to Window
Periods that occur after the date of the 1994 annual meeting of
shareholders.
ARTICLE III. ADMINISTRATION
The Plan shall be administered by the Committee which shall have
exclusive and final authority and discretion in each determination,
interpretation or other action affecting the Plan and its
Participants. The Committee shall have the sole and absolute authority
and discretion to interpret the Plan, to establish and modify
administrative rules for the Plan, to select, in accordance with
Section 5.01, the persons who will be Participants hereunder, to
impose such conditions and restrictions as it determines appropriate
and to take such other actions and makes such other determinations in
connection with the Plan as it may deem necessary or advisable.
ARTICLE IV. STOCK ISSUABLE UNDER THE PLAN
4.01 NUMBER OF SHARES OF STOCK ISSUABLE. Subject to
adjustments as provided in Section 8.03, the maximum number of
shares of Stock available for issuance under the Plan shall be 1
million. The Stock to be offered under the Plan shall be
authorized and unissued Stock, or Stock which shall have been
reacquired by the Corporation and held in its treasury.
4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock
forfeited as provided in Section 7.02 may again be issued under
the Plan.
ARTICLE V. PARTICIPATION
5.01 DESIGNATION OF PARTICIPANTS. Participants in the Plan
shall be such officers of the Corporation at the level of Vice
President or higher as the Committee, in its sole discretion, may
designate as eligible to participate in the Plan. Prior to the
commencement of each Plan Year during the term of this Plan, the
- 5 -
<PAGE>
Committee shall designate the Participants who are eligible to
participate in the Plan during such Plan Year; provided, however,
that with respect to the initial Plan Year of the Plan, such
designations shall be made no later than thirty (30) days
following the Effective Date. The Committee's designation of a
Participant with respect to any Plan Year shall not require the
Committee to designate such person as a Participant with respect
to any other Plan Year. The Committee shall consider such factors
as it deems pertinent in selecting Participants. The Committee
shall promptly provide to each person selected as a Participant
written notice of such selection. The designation of a person as
a Participant with respect to a Plan Year shall permit such
person to elect to submit one or more Purchase Notices and/or
Designation Notices during such Plan Year irrespective of
whether, in the case of Purchase Notices, the applicable Purchase
Date(s) fall within such Plan Year.
5.02 PARTICIPANT ELECTIONS. A person who is designated as a
Participant in accordance with Section 5.01 shall be entitled to
purchase Stock by delivering one or more Purchase Notices in
accordance with Article VI, and such Stock purchases shall result
in the award of Restricted Stock to such Participant in
accordance with Article VII. In addition, a Participant shall be
entitled to designate as Designated Stock, in one or more
Designation Notices delivered to the Corporation at any time
during a Plan Year, any even number of shares of Stock then owned
by the Participant, other than shares of Purchased Stock, shares
of Stock credited to the Participant's account under the
Allegheny Ludlum Corporation Retirement Savings Plan (RSP) and
shares of Stock subject to outstanding and as yet unexercised
stock options. Such designation of shares as Designated Stock
shall result in the award of Restricted Stock to the Participant
in accordance with Article VII. The sum of (i) the aggregate
Purchase Amounts elected by a Participant pursuant to one or more
Purchase Notices submitted within any one Plan Year and (ii) the
Fair Market Value of the Designated Stock designated by the
Participant pursuant to one or more Designation Notices submitted
within such Plan Year (such Fair Market Value being determined as
of the date the applicable Designation Notice is delivered),
shall not exceed such Participant's gross annual salary as in
effect on the first day of such Plan Year.
ARTICLE VI. STOCK PURCHASES
6.01 STOCK PURCHASE ELECTIONS. A Participant shall have the
right to purchase Stock in accordance with the terms of this
Article VI. A Participant may elect to purchase Stock under this
Plan by delivering to the Corporation a Purchase Notice and cash
and/or a promissory note executed by the participant in an amount
equal to the purchase price designated in such Participant's
Purchase Notice. Such Purchase Notice shall set forth, among
- 6 -
<PAGE>
other things, the Purchase Amount elected by the Participant.
Such promissory note, which shall evidence such Participant's
Purchase Loan in accordance with Section 6.03, shall be in a
principal amount equal to the Purchase Amount designated in such
Participant's Purchase Notice and shall by its terms become
effective as of the applicable Purchase Date. All elections under
this Section 6.01 shall be irrevocable. If an election is
submitted during a Window Period, such election shall take effect
as of the Purchase Date immediately following the close of such
Window Period. If an election is not submitted during a Window
Period, such election shall take effect as of the first Purchase
Date which occurs at least six (6) months after the date the
election is submitted.
6.02 ISSUANCE OF AND PAYMENT FOR STOCK. As of each Purchase
Date, the Corporation shall credit to each Participant the number
of shares of Purchased Stock purchased pursuant to the Purchase
Notice submitted by such Participant. The number of shares of
Purchased Stock to be so credited shall be determined by dividing
the Purchase Amount designated by such Participant in his or her
Purchase Notice by a purchase price per share equal to the
average Fair Market Value during the Window Period. As of any
Purchase Date, only an even number of shares of Purchased Stock
can be purchased by a Participant and in no event shall the
Corporation be required to issue fractional shares. The Purchase
Amount elected by a Participant, and the principal amount of the
related promissory note, shall be automatically reduced (and if
the entire Purchase Amount is paid in cash, cash shall be
returned to the Participant) to the minimum extent necessary in
order that an even number of whole shares of Purchased Stock is
credited to such Participant as of the Purchase Date. The
purchase price for shares of Purchased Stock credited to a
Participant as of a Purchase Date shall be paid in cash and/or by
means of a Purchase Loan made by the Corporation to the
Participant in accordance with Section 6.03. The Participant
shall have all of the rights of a shareholder with respect to the
shares of Purchased Stock credited to him under this Section 6.02
including, but not limited to, the right to vote such shares and
the right to receive dividends (or dividend equivalents) paid
with respect to such shares.
6.03 TERMS OF PURCHASE LOAN
(a) Purchase Loan. The promissory note delivered to the
Corporation by a Participant in accordance with Section 6.01
shall evidence a Purchase Loan in principal amount equal to
such Participant's Purchase Amount reduced by the amount of
cash paid, if any. Unless the Committee shall otherwise
determine prior to the applicable Purchase Date, each
Purchase Loan shall have a term not to exceed ten years, and
be secured by the shares of Purchased Stock acquired with
such Purchase Loan.
- 7 -
<PAGE>
(b) Interest on Purchase Loan. Until the Participant's
Purchase Loan is paid in full, or otherwise satisfied or
discharged in full, interest on the outstanding balance of
the Purchase Loan shall accrue at a fixed rate per annum
equal to the lesser of the following rates, determined as of
the applicable Purchase Date, as certified by the Treasurer
of the Corporation: (i) the average annual borrowing rate of
the Corporation and (ii) the prime lending rate of PNC Bank,
National Association; provided, however, that in no event
shall such interest rate be less than the minimum rate
required to avoid imputed interest under the applicable
provisions of the Internal Revenue Code of 1986.
(c) Repayment of Purchase Loan. No principal or
interest payments with respect to a Purchase Loan shall be
required prior to the fifth anniversary of the date such
Purchase Loan is made; provided, however, that prior to such
fifth anniversary, cash dividends on shares of Purchased
Stock held as security for such Purchase Loan, and on the
related shares of Restricted Stock, shall be applied to pay
accrued interest on the Purchase Loan (any non-cash
dividends shall remain as part of the collateral securing
such Purchase Loan). After such fifth anniversary, level
monthly payments of principal and accrued interest with
respect to a Purchase Loan shall be required for the
remaining term thereof. Unless otherwise determined by the
Committee, all outstanding principal and interest on a
Participant's Purchase Loan shall be immediately due and
payable in full upon termination of the Participant's
employment with the Corporation and its affiliates. All or
any portion of the principal and/or interest due under a
Purchase Loan may, at the election of the Participant, be
paid by the delivery to the Corporation by the Participant
of whole shares of Stock, other than shares of Designated
Stock and Purchased Stock, shares of Stock credited to the
Participant's account under the Allegheny Ludlum Corporation
Retirement Savings Plan (RSP) and shares of Stock subject to
outstanding and as yet unexercised stock options. For
purposes of the immediately preceding sentence, shares of
Stock shall be valued at the Fair Market Value of such
shares on the Business Day immediately preceding the date
such shares are delivered to the Corporation.
(d) Other Terms. The promissory notes evidencing the
Purchase Loans shall contain such other terms and conditions
as the Committee may determine, including, without
limitation, any special terms relating to the retirement of
a Participant prior to the expiration of the term of one or
more Purchase Loans.
6.04 STOCK CERTIFICATES. As promptly as administratively
feasible after each Purchase Date, the Corporation shall
- 8 -
<PAGE>
deliver to each Participant one or more stock certificates for
the number of shares of Stock purchased by such Participant as of
such Purchase Date in accordance with this Article VI. The
Participant shall then deliver certificates representing a number
of shares with a value equal to the principal amount of the
Purchase Loan to the Corporation in pledge for the related
Purchase Loan along with an executed security agreement in such
form as the Committee shall specify. Upon satisfaction in full of
the Purchase Loan, the certificates shall be delivered to the
Participant free and clear of any restrictions except for any
restrictions that may be imposed by law.
ARTICLE VII. RESTRICTED STOCK
7.01 RESTRICTED STOCK AWARDS. As of each Purchase Date,
there shall automatically be granted to any Participant who
purchases Purchased Stock as of such Purchase Date pursuant to
Article VI an award of one share of Restricted Stock for each two
shares of Purchased Stock. The Purchase Date shall be the Date of
Grant of such Restricted Stock. As of any date that a Participant
delivers a Designation Notice to the Corporation, in accordance
with Section 5.02, designating shares of Stock as Designated
Stock, there shall automatically be granted to such Participant
an award of one share of Restricted Stock for each two shares of
Designated Stock. The date of delivery of such Designation Notice
shall be the Date of Grant of such Restricted Stock. The terms of
all such Restricted Stock awards shall be set forth in an Award
Agreement between the Corporation and the Participant which shall
contain such forfeiture periods and conditions, restrictions and
other provisions, not inconsistent with this Plan, as shall be
determined by the Committee.
(a) Issuance of Restricted Stock. As soon as
practicable after the Date of Grant of Restricted Stock, the
Corporation shall cause to be transferred on the books of
the Corporation shares of Stock, registered on behalf of the
Participant, evidencing such Restricted Stock, but subject
to forfeiture to the Corporation retroactive to the Date of
Grant if an Award Agreement delivered to the Participant by
the Corporation with respect to the Restricted Stock is not
duly executed by the Participant and timely returned to the
Corporation. Until the lapse or release of all restrictions
applicable to an award of Restricted Stock, the stock
certificates representing such Restricted Stock shall be
held in custody by the Corporation or its designee.
(b) Shareholder Rights. Beginning on the Date of Grant
of the Restricted Stock and subject to execution of the
Award Agreement as provided in Section 7.01(a), the
Participant shall become a shareholder of the Corporation
with respect to all Stock subject to the Award Agreement and
- 9 -
<PAGE>
shall have all of the rights of a shareholder, including,
but not limited to, the right to vote such Stock and the
right to receive dividends (or dividend equivalents) paid
with respect to such Stock; provided, however, that any
Stock distributed as a dividend or otherwise with respect to
any Restricted Stock as to which the restrictions have not
yet lapsed shall be subject to the same restrictions as such
Restricted Stock and shall be held as prescribed in Section
7.01(a).
(c) Restriction on Transferability. None of the
Restricted Stock may be assigned, transferred (other than by
will or the laws of descent and distribution), pledged, sold
or otherwise disposed of prior to lapse or release of the
restrictions applicable thereto.
(d) Delivery of Stock Upon Release of Restrictions.
Upon expiration or earlier termination of the forfeiture
period without a forfeiture, the satisfaction of the
Purchase Loan, if any, for the Related Stock and the
satisfaction of or release from any other conditions
prescribed by the Committee, the restrictions applicable to
the Restricted Stock shall lapse. As promptly as
administratively feasible thereafter, subject to the
requirements of Section 8.02, the Corporation shall deliver
to the Participant or, in case of the Participant's death,
to the Participant's legal representatives, one or more
stock certificates for the appropriate number of shares of
Stock, free of all such restrictions, except for any
restrictions that may be imposed by law.
7.02 TERMS OF RESTRICTED STOCK.
(a) Forfeiture of Restricted Stock. Subject to Section
7.02(b), all Restricted Stock shall be forfeited and
returned to the Corporation and all rights of the
Participant with respect to such Restricted Stock shall
cease and terminate in their entirety if during the
forfeiture period (i) the Participant transfers, sells or
otherwise disposes of the Related Stock other than to a
Permitted Transferee or in a transaction constituting a
Change in Control or (ii) the employment of the Participant
with the Corporation and its affiliates terminates for any
reason or (iii) the Participant defaults on the Purchase
Loan, if any, for the Related Stock. Unless the Committee,
in its sole discretion, provides otherwise in the applicable
Award Agreement, the forfeiture period for any shares of
Restricted Stock shall be five years from the Date of Grant
of such Restricted Stock. Notwithstanding the foregoing, in
the event of the discharge by the Corporation of a
Participant without Cause or termination of a Participant's
employment by reason of death, Disability or retirement
- 10 -
<PAGE>
pursuant to the retirement policy of the Corporation, all
forfeiture restrictions imposed on Restricted Stock shall
immediately and fully lapse. In addition, upon the
occurrence of a Change in Control, all forfeiture
restrictions imposed on Restricted Stock shall immediately
and fully lapse.
(b) Waiver of Forfeiture Period. Notwithstanding
anything contained in this Article VII to the contrary, the
Committee may, in its sole discretion, waive the forfeiture
conditions set forth in any Award Agreement under
appropriate circumstances and subject to such terms and
conditions (including forfeiture of a proportionate number
of the shares of Restricted Stock) as the Committee may deem
appropriate, provided that the Participant shall at that
time have completed at least one year of employment after
the Date of Grant.
ARTICLE VIII. MISCELLANEOUS
8.01 LIMITATIONS ON TRANSFER. The rights and interest of a
Participant under the Plan may not be assigned or transferred
other than by will or the laws of descent and distribution.
During the lifetime of a Participant, only the Participant
personally may exercise rights under the Plan.
8.02 TAXES. The Corporation shall be entitled to withhold
(or secure payment from the Participant in lieu of withholding)
the amount of any withholding or other tax required by law to be
withheld or paid by the Corporation with respect to any Stock
issuable under this Plan, or with respect to any income
recognized upon the lapse of restrictions applicable to
Restricted Stock, and the Corporation may defer issuance of Stock
hereunder until and unless indemnified to its satisfaction
against any liability for any such tax. The amount of such
withholding or tax payment shall be determined by the Committee
or its delegate and shall be payable by the Participant at such
time as the Committee determines. The Committee shall prescribe
in each Award Agreement one or more methods by which the
Participant will be permitted to satisfy his or her tax
withholding obligation, which methods may include, without
limitation, the payment of cash by the Participant to the
Corporation and the withholding, at the appropriate time, of
shares of Stock otherwise issuable to the Participant in a number
sufficient, based upon the Fair Market Value of such Stock, to
satisfy such tax withholding requirements. The Committee shall be
authorized, in its sole discretion, to establish such rules and
procedures relating to any such withholding methods as it deems
necessary or appropriate, including, without limitation, rules
and procedures relating to elections by Participants who are
- 11 -
<PAGE>
subject to the provisions of Section 16 of the Exchange Act to
have Stock withheld to meet such tax withholding obligations.
8.03 ADJUSTMENTS TO REFLECT CAPITAL CHANGES. The amount and
kind of Stock available for issuance under the Plan shall be
appropriately adjusted to reflect any stock dividend, stock
split, combination or exchange of shares, merger, consolidation
or other change in capitalization with a similar substantive
effect upon the Plan. The Committee shall have the power and sole
discretion to determine the nature and amount of the adjustment,
if any, to be made pursuant to this Section 8.03.
8.04 NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT. No employee
or other person shall have any claim of right to be permitted to
participate or be granted an award under this Plan. Neither the
Plan nor any action taken hereunder shall be construed as giving
any employee any right to be retained in the employ of the
Corporation.
8.05 AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Income
recognized by a Participant pursuant to the provisions of the
Plan shall not be included in the determination of benefits under
any employee pension benefit plan (as such term is defined in
Section 3(2) of the Employee Retirement Income Security Act of
1974) or group insurance or other benefit plans applicable to the
Participant which are maintained by the Corporation, except as
may be provided under the terms of such plans or determined by
resolution of the Board.
8.06 GOVERNING LAW. The Plan and all determinations made and
actions taken pursuant to the Plan shall be governed by the laws
of the Commonwealth of Pennsylvania other than the conflict of
laws provisions of such laws, and shall be construed in
accordance therewith.
8.07 NO STRICT CONSTRUCTION. No rule of strict construction
shall be implied against the Corporation, the Committee, or any
other person in the interpretation of any of the terms of the
Plan, any award granted under the Plan or any rule or procedure
established by the Committee.
8.08 CAPTIONS. The captions (i.e., all Section and
subsection headings) used in the Plan are for convenience only,
do not constitute a part of the Plan, and shall not be deemed to
limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no
captions had been used in the Plan.
8.09 SEVERABILITY. Whenever possible, each provision in the
Plan and every Award Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if
any provision of the Plan or any Award Agreement shall be held to
- 12 -
<PAGE>
be prohibited by or invalid under applicable law, then (a) such
provision shall be deemed amended to accomplish the objectives of
the provision as originally written to the fullest extent
permitted by law and (b) all other provisions of the Plan and
every Award Agreement at shall remain in full force and effect.
8.10 LEGENDS. All certificates for Stock delivered under the
Plan shall be subject to such transfer restrictions set forth in
the Plan and such other restrictions as the Committee may deem
advisable under the rules, regulations and other requirements of
the Securities and Exchange Commission, any stock exchange upon
which the Stock is then listed and any applicable federal or
state securities law, and the Committee may cause a legend or
legends to be endorsed on any such certificates making
appropriate references to such restrictions.
8.11 AMENDMENT AND TERMINATION.
(a) Amendment. The Board shall have complete power and
authority to amend the Plan at any time it is deemed
necessary or appropriate. No termination or amendment of the
Plan may, without the consent of the Participant to whom any
award shall theretofore have been granted under the Plan,
adversely affect the right of such individual under such
award; provided, however, that the Committee may, in its
sole discretion, make such provision in the Award Agreement
for amendments which, in its sole discretion, it deems
appropriate.
(b) Termination. The Board shall have the right and the
power to terminate the Plan at any time. Unless sooner
terminated by action of the Board, the Plan shall
automatically terminate, without further action of the Board
or the Corporation's shareholders, on December 31, 1998. No
Designation Notice shall be effective, no Purchase Notice
shall be valid for a Purchase Date that will occur, and no
award shall be granted, under the Plan after the termination
of the Plan, but the termination of the Plan shall not have
any other effect and any award outstanding at the time of
the termination of the Plan may be exercised after
termination of the Plan at any time prior to the expiration
date of such award to the same extent such award would have
been exercisable had the Plan not terminated.
- 13 -
Exhibit 10(c)
CONSULTING AGREEMENT
by and between
ALLEGHENY LUDLUM CORPORATION
and
ROBERT P. BOZZONE
August 1, 1994
<PAGE>
CONSULTING AGREEMENT
____________________
THIS CONSULTING AGREEMENT made and entered into as of
August 1, 1994, by and between ALLEGHENY LUDLUM CORPORATION, a
Pennsylvania corporation with its principal office in Pittsburgh,
Pennsylvania (the "Company"),
AND
ROBERT P. BOZZONE, an individual residing in
Westmoreland County, Pennsylvania (the "Consultant");
WHEREAS, the Consultant has served as an executive
officer of the Corporation (most recently as its President and
Chief Executive Officer) for many years; and
WHEREAS, the Consultant wishes to retire as an employee
of the Corporation; and
WHEREAS, although the Consultant will continue to serve
as a Director of the Corporation, the Corporation wishes to
retain the services of the Consultant on a compensated part-time
basis to benefit from his experience and knowledge of the
Corporation's business and affairs, recognizing that the demands
the Corporation expects to place on the Consultant's time will be
substantially greater than those placed on other Directors of the
Corporation; and
WHEREAS, the Consultant is willing to provide
consulting services to the Corporation on the terms stated
herein.
NOW, THEREFORE, in consideration of the premises and
the mutual promises and covenants contained herein, and intending
<PAGE>
to be legally bound hereby, the parties hereto agree as follows:
1. Engagement and Term. Subject to the provisions
for termination hereinafter set forth, the Corporation hereby
engages the Consultant, and the Consultant hereby accepts such
engagement by the Corporation, as a consultant, on the basis of
an independent contractor, for a term commencing on the date
hereof and ending on July 31, 1995 (the "Term"). Such Term shall
be extended automatically for one additional year as of August 1,
1995 and each annual anniversary thereof unless, no later than
sixty (60) days prior to any such renewal date, either the Board
of Directors of the Corporation (the "Board"), on behalf of the
Corporation, or the Consultant gives written notice or the other,
in accordance with paragraph 7, that the Term shall not be so
extended.
2. Duties. During the Term, the Consultant shall,
with the agreement of the Chairman and the Chief Executive
Officer, focus on those areas of the affairs of the Corporation
that all three shall deem to be most important. The Consultant
will be available to provide such consulting services for
approximately 480 hours per year. Such services will be in
addition to services provided by the Consultant as a Director of
the Corporation.
3. Fees and Expenses. For the due and faithful
performance of the services contemplated by this Agreement, the
Corporation will pay to the Consultant during the Term a
consulting fee in the amount of $100,000 per year, payable in
- 2 -
<PAGE>
monthly installments, within ten days after the end of each month
during the Term. The Corporation will reimburse the Consultant
for his reasonable and necessary business expenses related to the
performance of his duties hereunder.
4. Termination of Agreement. Notwithstanding any
other provision of this Agreement to the contrary, the
Consultant's engagement hereunder and fees shall terminate and
cease to accrue forthwith upon the first to occur of the
following: (a) any failure or inability of the Consultant to
observe or perform the agreements, obligations or covenants
herein contained upon written notice by the Corporation to the
Consultant or, if the Consultant is deceased, to his beneficiary,
or (b) expiration of the Term.
5. Integration. This Agreement constitutes and
expresses the entire agreement of the parties with respect to the
subject matter hereof and supersedes and cancels all prior
negotiations, discussions, agreements and understandings relating
to such subject matter. This Agreement may not be modified or
amended except by an instrument in writing executed by both
parties hereto.
6. Independent Contractor. The Consultant shall be
and remain only an independent contractor. Nothing contained
herein shall be deemed or construed to create an
employer/employee relationship. In addition to his services
hereunder, the Consultant will serve as a Director of the
Corporation, subject to election by the shareholders. The
- 3 -
<PAGE>
Consultant shall be entitled to receive such fees, compensation
and other benefits as may be paid by the Corporation from time to
time to non-employee directors and any compensation paid
hereunder shall be paid in addition to any compensation paid to
the Consultant in his capacity as a Director of the Corporation
or any of its affiliates.
7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed
to have been duly given if delivered by hand or mailed within the
continental United States by first class certified mail, return
receipt requested, postage prepaid, addressed as follows:
(a) if to the Board or the Corporation, to:
Allegheny Ludlum Corporation
1000 Six PPG Place
Pittsburgh, PA 15222
Attention: Chairman, Personnel and
Compensation Committee
(b) to the Consultant, to:
Robert P. Bozzone
311 Hillcrest Drive
Lower Burrell, PA 15068
Such addresses may be changed by written notice sent to the other
party at the last recorded address of that party.
8. Miscellaneous.
(a) The invalidity or unenforceability of any
particular provisions of this Agreement shall not affect the
other provisions hereof; and this Agreement shall be construed in
all respects as if such invalid or unenforceable provisions were
omitted.
- 4 -
<PAGE>
(b) This Agreement is not assignable by either party
and no payment to be made hereunder shall be subject to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or other charge.
(c) This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed to be an
original, but all such counterparts shall constitute one and the
same instrument, and all signatures need not appear on any one
counterpart.
(d) Jurisdiction over disputes with regard to this
Agreement shall be exclusively in the courts of the Commonwealth
of Pennsylvania, and this Agreement shall be construed and
interpreted in accordance with and governed by the laws of the
- 5 -
<PAGE>
Commonwealth of Pennsylvania other than the conflict of laws
provisions of such laws.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.
ATTEST: ALLEGHENY LUDLUM CORPORATION
s/ Jon D. Walton s/ R.P. Simmons
______________________________ By: _________________________
Secretary Chairman of the Board
(Corporate Seal)
WITNESS: CONSULTANT
s/ Carol J. Mueller s/ Robert P. Bozzone
______________________________ ______________________________
Robert P. Bozzone
MBL000353
- 6 -
Exhibit 10(d)
ALLEGHENY LUDLUM CORPORATION
1987 STOCK OPTION INCENTIVE PLAN
--------------------------------
(Amended and Restated)
Article I. Purposes of the Plan
The purposes of the Allegheny Ludlum Corporation 1987
Stock Option Incentive Plan are to promote the growth and
profitability of Allegheny Ludlum Corporation, to provide key
employees of Allegheny Ludlum Corporation and of any corporation
the majority of the voting stock of which is owned by Allegheny
Ludlum Corporation with an incentive to achieve long-term
corporate objectives, to attract and retain key employees of
outstanding competence and to provide key employees with an
opportunity to acquire an equity interest in Allegheny Ludlum
Corporation.
Article II. Definitions
As used herein, the following terms shall have the
meanings set forth:
2.01 "Award" shall mean the grant of a Stock Option
and/or a Stock Appreciation Right under the Plan.
2.02 "Award Agreement" shall mean the agreement
between the Optionee and the Company evidencing the grant of
Stock Options and/or Stock Appreciation Rights under the Plan,
which Award Agreement shall contain such terms, conditions and
restrictions as the Committee may deem advisable; provided,
however, Award Agreements entered into at different times or with
different Optionees need not contain similar provisions.
2.03 "Board" shall mean the Board of Directors of the
Company.
2.04 "CEO" shall mean the Chief Executive Officer
of the Company.
2.05 "Committee" shall mean the Personnel and
Compensation Committee of the Board, subject to the provisions of
Section 3.4(a) hereof.
2.06 "Common Stock" shall mean common stock, $0.10 par
value per share, of the Company.
2.07 "Company" shall mean Allegheny Ludlum
Corporation.
<PAGE>
2.08 "Eligible Participants" shall mean (i) those
officers and key employees of the Company, or of any corporation
the majority of the voting stock of which is owned by the
Company, designated by the Board in accordance with the
procedures set forth in Article III hereof as eligible to receive
an Award under the Plan, and (ii) subject to the following
sentence, all Executive Officers of the Company. Directors of
the Company who are not otherwise officers or employees of the
Company and Directors who are members of the Committee may not be
designated as Eligible Participants.
2.09 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
2.10 "Executive Officer" shall mean an "officer" of
the Company as defined in Rule 16a-1(f) as promulgated by the
Securities and Exchange Commission under the Exchange Act, as
such Rule may be amended from time to time.
2.11 "Fair Market Value" shall mean the fair market
value of shares of Common Stock, as determined by the Committee
in its discretion. The Committee may change from time to time
any method or formula by which it determines Fair Market Value.
2.12 "Optionee" shall mean an Eligible Participant who
has received a grant of Stock Options and/or Stock Appreciation
Rights under the Plan. Whenever the word "Optionee" is used in
any provision of the Plan in circumstances where the provision
should logically be construed to apply to executors,
administrators or the person or persons to whom the Stock Options
and/or Stock Appreciation Rights may be transferred by will or
the laws of descent or distribution, the word "Optionee" shall be
deemed to include such executors, administrators or person or
persons.
2.13 "Option Period" shall mean the period or periods
beginning on the date on which a Stock Option or Stock
Appreciation Right is granted and ending on the last day on which
such Stock Option or Stock Appreciation Right may be exercised by
an Optionee, as determined by the Committee upon recommendation
of the CEO and as set forth in the Award Agreement; provided,
however, no Option Period may extend beyond the tenth anniversary
of the date of granting the related Stock Option or Stock
Appreciation Right.
2.14 "Option Price" shall mean (i) with respect to
Stock Options, the price at which a share of Common Stock may be
purchased pursuant to Stock Options granted under the Plan upon
exercise thereof, and (ii) with respect to Stock Appreciation
Rights, the price at which a Stock Appreciation Right may be
exercised, as such Option Price may be adjusted from time to time
- 2 -
<PAGE>
in accordance with the provisions of Article V and Section 9.8
hereof and the terms of the Award Agreement.
2.15 "Plan" shall mean the Allegheny Ludlum
Corporation 1987 Stock Option Incentive Plan, as amended from
time to time pursuant to Section 9.10 hereof.
2.16 "Rule 16b-3" shall mean Rule 16b-3 as promulgated
by the Securities and Exchange Commission under the Exchange Act,
as in effect prior to May 1, 1991 until the Committee elects
otherwise and thereafter as such Rule may be amended from time to
time.
2.17 "Stock Appreciation Right" shall mean a right
which upon exercise shall entitle the Optionee to receive for
each share of Common Stock subject to such Stock Appreciation
Right the excess, if any, of the Fair Market Value of a share of
Common Stock as of the date of such exercise over the Option
Price.
2.18 "Stock Option" shall mean the right and option of
an Optionee to purchase the aggregate number of shares of Common
Stock as is set forth in the Award Agreement.
2.19 "Termination Date" shall mean the date upon which
this Plan terminates, which shall be January 1, 1997.
Article III. Operation of the Plan
3.1 Designation of Eligible Participants
------------------------------------
(a) Designation by Board
The Board, upon recommendation made in accordance
with Section 3.1(b) hereof, shall determine and designate those
officers and key employees of the Company or of any corporation
the majority of the voting stock of which is owned by the
Company, in addition to the Executive Officers, who shall be
eligible to participate in the Plan. The Board shall make such
determination and designation only from those individuals, job
classifications or other descriptions of officers and key
employees recommended to the Board in accordance with
Section 3.1(b) hereof.
(b) Procedure for Recommendation to the Board
(i) Recommendation by CEO
Any and all recommendations concerning eligibility
to participate in the Plan shall be initiated by the CEO. The
CEO may, at such times and from time to time as he may determine
- 3 -
<PAGE>
in his discretion, recommend to the Committee those officers and
key employees, by naming such individuals, by describing job
classifications or otherwise describing the persons or classes of
employees, whom the CEO in his discretion considers to be
officers or key employees eligible to participate in the Plan.
The CEO may, from time to time, as he may determine in his
discretion, recommend the addition of such individuals, job
classifications or other descriptions of employees to those
previously designated as Eligible Participants or the deletion of
Eligible Participants from those previously designated as
eligible to participate.
(ii) Review by Committee
The Committee shall review each recommenda-
tion of the CEO as soon as practicable after presentation of such
recommendation by the CEO. Upon such review, the Committee shall
recommend to the Board those individuals, job classifications or
other descriptions of employees from among those recommended by
the CEO which the Committee, in its discretion, considers to be
officers or key employees eligible to participate in the Plan.
(c) Designation of Eligibility Does Not Require
Grant of Options
Designation of an officer or key employee as an
Eligible Participant shall not require the CEO to recommend the
grant of an Award or the Committee to grant an Award to such
Eligible Participant, either upon initial designation or from
time to time thereafter.
3.2 Grant of Stock Options and/or Stock Appreciation
------------------------------------------------
Rights
------
(a) Grant by Committee
The Committee, upon recommendation made in
accordance with Section 3.2(b) hereof, may grant Stock Options
and/or Stock Appreciation Rights under the Plan to any Eligible
Participant recommended to receive an Award whether or not such
Eligible Participant has previously received an Award under the
Plan, in respect to an amount of shares and subject to such
restrictions as the Committee may deem appropriate, in its
discretion but only upon the recommendation of the CEO in
accordance with Section 3.2(b) hereof.
(b) Procedure for Recommendation
Any and all recommendations concerning the grant
of an Award under the Plan, including but not limited to the
identity of the Eligible Participant, the form of the Award and
the number of shares subject to Stock Options or Stock
- 4 -
<PAGE>
Appreciation Rights in an Award granted to an Eligible
Participant, shall be initiated by the CEO. The CEO may, at such
times and from time to time as he may determine, recommend to the
Committee the identity of the Eligible Participant(s) to whom an
Award should be granted together with (i) the number of shares
subject to Stock Options and/or Stock Appreciation Rights to be
granted to each Eligible Participant so recommended, (ii) the
respective Option Periods applicable thereto and (iii) any
restrictions or other terms and conditions applicable to Stock
Options and/or Stock Appreciation Rights. The Committee shall
review each recommendation of the CEO as soon as practicable
after presentation of such recommendation by the CEO.
(c) General
The CEO, in recommending, and the Committee, in
granting, such Awards and determining their form and amount,
shall give consideration to the functions and responsibilities of
the Eligible Participant, his or her contributions to profit-
ability and sound growth of the Company and such other factors as
the CEO and the Committee, as the case may be, may deem
appropriate. An Optionee, upon receipt of a grant of an Award,
shall state his or her good faith intention to continue as an
employee of the Company for such period (but not less than six
months) from the date of the grant of the Award as shall be
provided in the Award Agreement, subject to the right of the
Company to terminate the employment of the Optionee at any time.
No Award may be granted to an Eligible Participant within six
months of the Eligible Participant's expected retirement date.
No Stock Option or Stock Appreciation Right may be granted under
the Plan after December 31, 1996, or such earlier date as may be
determined by the Board.
3.3 Vesting of Stock Options and/or Stock Appreciation
--------------------------------------------------
Rights
------
Stock Options and Stock Appreciation Rights granted
under the Plan shall not be immediately exercisable but shall
become exercisable in accordance with a vesting schedule set
forth in the Award Agreement evidencing such grant. Except as
permitted by the Committee upon recommendation of the CEO, no
Award Agreement may set forth a vesting schedule which provides
for vesting more rapid than the rate of one third of the number
of shares subject to such Award Agreement on each of the third,
fourth and fifth anniversaries of the grant of such Award. Stock
Options and Stock Appreciation Rights, to the extent vested under
the schedule set forth in the Award Agreement, shall be
separately exercisable in whole or in part.
- 5 -
<PAGE>
3.4 General Administration
----------------------
(a) The Plan shall be administered by the
Committee. A person who is not a disinterested person for the
purposes of Rule 16b-3 or, effective as of the 1995 annual
meeting of shareholders, who is not an "outside director" for the
purposes of Section 162(m) of the Internal Revenue Code of 1986
and the regulations promulgated thereunder, shall not be a member
of the Committee, and shall not participate in the administration
of the Plan, for any purpose relating to any Executive Officer
participant or participants in the Plan. Such disqualification
shall be effective immediately prior to the occurrence of any
event or circumstance that causes the person to lose the status
of disinterested person or outside director, as the case may be.
(b) The Committee shall have the authority in its
sole discretion from time to time: (i) upon recommendation of
the CEO, to grant Awards provided for in the Plan; (ii) to
prescribe such limitations, restrictions and conditions upon any
such Stock Options and/or Stock Appreciation Rights as the
Committee, upon recommendation of the CEO, shall deem
appropriate; and (iii) to interpret the Plan, to adopt, amend and
rescind rules and regulations relating to the Plan, and to make
all other determinations and to take all other actions necessary
or advisable for the implementation and administration of the
Plan. A majority of the Committee shall constitute a quorum, and
the action of a majority of members of the Committee present at
any meeting at which a quorum is present, or acts unanimously
adopted in writing without the holding of a meeting, shall be the
acts of the Committee.
(c) All such actions of the Committee shall be
final, conclusive and binding upon Eligible Participants and
Optionees. No member of the Committee shall be liable for any
action taken or decision made in good faith relating to the Plan
or any grant hereunder.
Article IV. Aggregate Limitation on Shares Subject to Plan
Shares of Common Stock which may be issued pursuant to
Stock Options or Stock Appreciation Rights granted under the Plan
may be either authorized and unissued shares or authorized and
issued shares of Common Stock held by the Company as treasury
shares. The number of shares of Common Stock reserved for
issuance under the Plan shall not exceed 2,700,000 shares, as
adjusted to reflect the 3-for-2 stock split effective July 2,
1990 and the 2-for-1 stock split effective July 1, 1993, subject
to further adjustment pursuant to Section 9.8 hereof; provided,
however, if any Stock Option or Stock Appreciation Right shall
expire or be cancelled prior to its exercise in full for any
- 6 -
<PAGE>
reason, the shares subject to such Stock Option or Stock
Appreciation Right shall be thereafter available under the Plan.
Article V. Option Price
5.1 Option Price on Date of Grant
-----------------------------
The Option Price on the date of grant of Stock
Options or Stock Appreciation Right under the Plan shall be
determined by the Committee upon recommendation of the CEO and
shall be an amount not less than the Fair Market Value of a share
of Common Stock at the time such Stock Option or Stock
Appreciation Right is granted.
5.2 Adjustments to Option Price
---------------------------
In addition to the adjustments provided in
Section 9.8, upon recommendation by the CEO the Committee may
grant Stock Options and/or Stock Appreciation Rights which
provide that the Option Price on the date of exercise shall be
determined by subtracting from the Option Price on the date of
grant, as determined under Section 5.1 and set forth in the Award
Agreement, a percentage of the excess, if any, of (i) the Fair
Market Value of a share of Common Stock as of the date of
exercise over (ii) the Option Price on the date of grant,
provided, however, that in no event may the Option Price, as
adjusted, be less than $1.00.
Article VI. Option Periods; Rights Upon Retirement, Death or
Disability
6.1 Option Period
-------------
Each Award Agreement shall state the period or
periods within which a Stock Option or Stock Appreciation Right
may, to the extent then vested, be exercised or surrendered by
the Optionee, in whole or in part, which period shall be as
determined by the Committee upon recommendation of the CEO;
provided, however, except as otherwise determined by the
Committee upon recommendation of the CEO, each Option Period
shall cease upon termination of an Optionee's employment with the
Company. Except as so determined by the Committee upon
recommendation of the CEO, an Optionee may not exercise a Stock
Option or Stock Appreciation Right, in whole or in part, after
such termination of employment.
6.2 Rights in the Event of Retirement
---------------------------------
Notwithstanding Section 6.1 hereof, if an Optionee
retires with the consent of the Company without having fully
- 7 -
<PAGE>
exercised or surrendered the then vested portion of a Stock
Option or Stock Appreciation Right, no additional shares shall
vest after the date of such retirement unless otherwise provided
by the Committee but the Optionee shall have the right to
exercise the outstanding and then exercisable portion of such
Stock Option and/or Stock Appreciation Rights, or to surrender
the outstanding and then exercisable portion of such Stock Option
and/or Stock Appreciation Right pursuant to Article VII hereof at
any time prior to the earlier of (i) the end of the Option Period
set forth in the Award Agreement or (ii) the third anniversary of
the date of such retirement.
6.3 Rights in the Event of Death or Disability
------------------------------------------
Notwithstanding Section 6.1 hereof, if an Optionee
dies or becomes disabled without having fully exercised or
surrendered the then vested portion of a Stock Option and/or
Stock Appreciation Right, no additional shares shall vest after
the date of such death or disability unless otherwise provided by
the Committee but the Optionee and the executors, administrators,
legatees or distributees of the Optionee shall have the right, to
the extent of their respective custody and control, to exercise
the outstanding and then exercisable portion of such Stock Option
and/or Stock Appreciation Right, or to surrender the outstanding
and then exercisable portion of the Stock Option and/or Stock
Appreciation Right, pursuant to Article VII hereof, at any time
prior to the earlier of (i) the end of the Option Period set
forth in the Award Agreement or (ii) the third anniversary of the
date of death or disability. Disability shall mean full,
permanent disability as determined by the Committee. The date of
disability shall be determined by the Committee.
Article VII. Surrender of Options and Stock Appreciation Rights
In addition to the rights to surrender Stock Options
and/or Stock Appreciation Rights, to the extent then exercisable,
as provided in Section 6.2 hereof and Section 6.3 hereof, the
Committee may authorize, upon such conditions and restrictions as
it deems advisable, the surrender, to the extent then exercis-
able, of the right to exercise a Stock Option and/or Stock
Appreciation Right, or any portion thereof, and the payment by
the Company in exchange therefor of an amount, after withholding
for taxes as provided in Section 8.4 hereof, equal to the excess
of the Fair Market Value of the shares of Common Stock covered by
the Stock Option and/or Stock Appreciation Right, or portion
thereof, surrendered over the aggregate Option Price of such
shares. Such payment may be made in shares of Common Stock
valued at Fair Market Value or in cash or partly in cash and
partly in shares of Common Stock, as the Committee deems advis-
able. The shares of Common Stock covered by any Stock Option or
Stock Appreciation Right, or portion of either, as to which the
- 8 -
<PAGE>
right to exercise shall have been so surrendered shall not again
be available for purposes of the Plan. Any shares of Common
Stock delivered upon any such surrender may be authorized
unissued or reacquired Common Stock and shall not be charged
against the number of shares of Common Stock available for grant
of Stock Options under the Plan.
Article VIII. Manner of Exercise, Payment of Purchase Price and
Withholding
8.1 Exercise of Options
-------------------
A Stock Option may be exercised by an Optionee
from time to time, in whole or in part, independent of any Stock
Appreciation Right to the extent then exercisable by delivering
written notice to the Committee of his or her intent to exercise
the Stock Option with respect to a specified number of shares.
The specified number of shares will be issued and transferred to
the Optionee upon receipt by the Committee of (i) such notice and
(ii) payment, including applicable taxes, for such shares.
8.2 Payment of Purchase Price
-------------------------
The purchase price of the shares for which a Stock
Option may be exercised shall be paid to the Company, at the time
of exercise in the form of, at the discretion of the Optionee,
(i) cash, (ii) whole shares of Common Stock already owned by the
Optionee, valued at their Fair Market Value as of the day
immediately preceding the date of exercise or (iii) a combination
of cash and Common Stock equal in value to the purchase price.
8.3 Exercise of Stock Appreciation Rights
-------------------------------------
A Stock Appreciation Right may be exercised
independently of any Stock Option by an Optionee from time to
time, in whole or in part, to the extent then exercisable by
delivering written notice to the Committee of his or her intent
to exercise the Stock Appreciation Right with respect to a
specified number of shares. Upon exercise of a Stock
Appreciation Right, the amount realized by the Optionee may be
payable, in the discretion of the Committee, in the form of
shares of Common Stock valued at their then Fair Market Value or
cash or a combination of Common Stock and cash. The amount of
cash or number of shares payable upon exercise of a Stock
Appreciation Right, as determined by the Committee, will be
delivered to the Optionee upon receipt of such notice and receipt
of payment for, or withholding of, applicable taxes.
- 9 -
<PAGE>
8.4 Withholding
-----------
In each case where an Optionee shall exercise a
Stock Option and/or Stock Appreciation Right, in whole or in
part, the Company shall notify the Optionee of the amount of
withholding tax, if any, which must be paid under federal, state
and local law. The Company shall, in the discretion of the
Company, but with the consent of the Committee, arrange for
payment for such withholding taxes in any one or combination of
the following ways: (i) acceptance of an amount in cash paid by
the Optionee, (ii) deduction of amounts for withholding taxes
from Optionee's regular salary payments, (iii) deduction of
amounts for withholding taxes from amounts of cash payable to
Optionee upon exercise, (iv) reduction in the number of shares to
be issued pursuant to such exercise by that number of shares
having a Fair Market Value equal to the amount the Company is
required to withhold and/or (v) acceptance of whole shares of
Common Stock already owned by the Optionee having a Fair Market
Value equal to the amount the Company is required to withhold.
If the full amount of the withholding tax is not recovered in the
above manner, the Optionee shall, forthwith upon receipt of
notice, remit the deficiency to the Company. No certificates for
shares acquired pursuant to exercise of a Stock Option or Stock
Appreciation Right shall be issued or delivered to an Optionee
until all applicable withholding taxes shall have been satisfied
in full.
8.5 Delivery of Certificates and/or Cash
------------------------------------
As soon as practicable after each exercise and
upon compliance by an Optionee with all applicable conditions,
the Company will issue and deliver by mail, or cause delivery by
mail to the Optionee at the address specified, certificates
registered in the name of the Optionee for the number of shares
of Common Stock and/or the Company's check for the amount of cash
which the Optionee is entitled to receive (subject to reduction
for withholding tax as provided in Section 8.4 hereof) under the
provisions of the Plan and the Award Agreement.
Article IX. Miscellaneous
9.1 General Restriction
-------------------
Any Award granted under the Plan shall be subject
to the requirement that, if at any time the Committee shall
determine that any listing or registration of the shares of
Common Stock or any consent or approval of any governmental body,
or any other agreement or consent is necessary or desirable as a
condition of the granting of a Stock Option or issuance of shares
of Common Stock or cash in satisfaction of the exercise of an
Award, such grant of a Stock Option or issuance of shares of
- 10 -
<PAGE>
Common Stock may not be consummated unless such requirement is
satisfied in a manner acceptable to the Committee.
9.2 Awards to Executive Officers
----------------------------
For the purposes of the Plan, and notwithstanding
any provision of the Plan to the contrary, the selection of
Executive Officers to receive Awards, and decisions concerning
the timing, pricing, and amount of Awards to Executive Officers,
shall be made solely by the Committee in its discretion. The
Committee shall receive and review recommendations of the CEO
relating to Executive Officers under the Plan, but shall not be
bound by such recommendations and may initiate action under the
Plan with respect to Executive Officers although not initiated by
the CEO.
9.3 Non-Assignability
-----------------
No Stock Option or Stock Appreciation Right
granted under the Plan shall be assignable or transferable by the
recipient thereof, except by will or by the laws of descent and
distribution. During the life of the recipient, any Stock Option
or Stock Appreciation Right shall be exercisable only by such
individual. No assignment or transfer of a Stock Option or Stock
Appreciation Right, or of the rights represented thereby, whether
voluntary or involuntary, by operation of law or otherwise
(except by will or the laws of descent and distribution), shall
vest in the assignee or transferee any interest or right herein
whatsoever, but immediately upon such assignment or transfer the
Stock Option or Stock Appreciation Right shall terminate and
become of no further effect.
9.4 Investment Representation
-------------------------
Each Award Agreement may provide that the Optionee
or recipient shall deliver to the Committee, upon demand by the
Committee, at the time of any exercise of any Stock Option or
Stock Appreciation Right for which the Committee elects to issue
certificates representing shares of Common Stock a written
representation that the shares to be acquired are to be acquired
for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such
representation prior to delivery of any shares shall be a
condition precedent to the right of the Optionee or such other
person to acquire any shares.
9.5 No Right to Employment
----------------------
Nothing in the Plan or in any agreement entered
into pursuant to it shall confer upon any Optionee or Eligible
Participant the right to continue in the employment of the
- 11 -
<PAGE>
Company or affect any right which the Company may have to
terminate the employment of such Participant.
9.6 Non-Uniform Determinations
--------------------------
The recommendations of the CEO and the Committee
and the determinations of the Board and the Committee under the
Plan (including without limitation the respective determinations
or recommendations of the persons to receive an Award, the form,
amount and timing of such Awards and the terms and provisions of
such Awards) need not be uniform and may be made selectively
among persons who receive, or are eligible to receive, an Award
under the Plan, whether or not such persons are similarly
situated.
9.7 No Rights as Shareholders
-------------------------
Recipients of Stock Options and/or Stock
Appreciation Rights under the Plan shall have no rights as
shareholders of the Company with respect thereto unless and until
certificates for shares of Common Stock are issued to them.
9.8 Adjustments of Stock Options and Stock
--------------------------------------
Appreciation Rights
-------------------
In the event of any change or changes in the
outstanding Common Stock of the Company by reason of any stock
dividend, recapitalization, reorganization, merger,
consolidation, split-up, combination or exchange of shares or any
rights offering to purchase a substantial amount of Common Stock
at below Fair Market Value or of any similar change affecting the
Common Stock, any of which takes effect after the first grant of
an Award under the Plan, the Committee may, in its discretion,
appropriately adjust the number of shares of Common Stock which
may be issued under the Plan, the number of shares of Common
Stock subject to Stock Options and/or Stock Appreciation Rights
theretofore granted under the Plan, the Option Price of such
Stock Options or Stock Appreciation Rights, and any and all other
adjustments deemed appropriate by the Committee to prevent
substantial dilution or enlargement of the rights granted to an
employee in such manner as the Committee shall deem appropriate.
9.9 Options and/or Stock Appreciation Rights Not A Bar
--------------------------------------------------
to Corporate Event
------------------
The existence of the Stock Options and/or Stock
Appreciation Rights granted hereunder shall not affect in any way
the right or the power of the Company or its shareholders to make
or authorize any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the
Company, or any issue of bonds, debentures, preferred or prior
- 12 -
<PAGE>
preference stocks ahead of or affecting the Common Stock or the
rights thereof, or the dissolution or liquidation of the Company,
or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a
similar character or otherwise.
9.10 Amendment or Termination of the Plan
------------------------------------
The Board may at any time terminate the Plan or
any part thereof and may from time to time amend the Plan as it
may deem advisable; provided, however, that without shareholder
approval, the Board may not (i) increase the aggregate number of
shares of Common Stock which may be issued under the Plan (other
than increases permitted under Paragraph 9.8 hereof), (ii) extend
the term of the Plan, or (iii) extend the period during which
Stock Options or Stock Appreciation Rights may be exercised. The
termination or amendment of the Plan shall not, without the
consent of an Optionee, affect such Optionee's rights under a
previous grant of Stock Options or Stock Appreciation Rights.
Article X. Effective Date of the Plan; Contingent Effectiveness
The effective date of the Plan shall be the date upon
which the latter of the following occurs: (i) the closing on an
initial public offering by the Company of shares of Common Stock
in a transaction registered under the Securities Act of 1933 on
Form S-1 and (ii) the approval, at a regular or special meeting,
by the shareholders of the Company holding not less than a
majority of the issued and outstanding shares of Common Stock.
Notwithstanding the foregoing, if the Plan shall have been
approved by the Board prior to such shareholder approval, Stock
Options and/or Stock Appreciation Rights may be granted hereunder
subject to subsequent shareholder approval. Notwithstanding
approval by the Board and the shareholders, in the event that no
such offering takes place prior to January 1, 1988, the Plan,
together with all actions taken and agreements executed in
relation thereto, shall be null and void and without further
effect.
Article XI. Termination of Plan
The Plan shall expire on January 1, 1997.
Article XII. Rule 16b-3 Compliance.
It is intended that the Plan comply with Rule 16b-3 and
that all interpretations of the Plan relating to Executive
Officers shall be consistent with such Rule and the Exchange Act.
In order to maintain compliance with such Rule and the Exchange
- 13 -
<PAGE>
Act and to facilitate and promote the conformity of the
transactions of Executive Officer participants under the Plan
with such Rule, the Committee may adopt such rules and policies
as it deems advisable, including, but not limited to, rules and
policies restricting the timing of a surrender of a Stock Option
for cash or of an exercise of a Stock Appreciation Right for cash
or of the reduction in the number of shares to be issued pursuant
to the exercise of a Stock Option pursuant to Section 8.4 hereof
and elections with respect thereto.
- 14 -
Exhibit 10(e)
PERFORMANCE SHARE PLAN FOR KEY EMPLOYEES OF
ALLEGHENY LUDLUM CORPORATION AND SUBSIDIARIES
(As Amended and Restated)
ARTICLE I
---------
Purpose
-------
The purposes of the Performance Share Plan For Key
Employees of Allegheny Ludlum Corporation and Subsidiaries are to
promote the growth and profitability of Allegheny Ludlum
Corporation and its subsidiaries, to provide key employees with
an incentive to achieve long-term corporate objectives and to
attract and retain key employees of outstanding competence.
ARTICLE II
Definitions
-----------
The following terms shall have the meanings shown:
2.01 "Award Period" shall mean the time period
established by the Board of Directors pursuant to Article IV of
the Plan for the purpose of measuring attainment of performance
objectives.
2.02 "Board of Directors" shall mean the Board of
Directors of the Corporation.
2.03 "Chief Executive Officer" shall mean the chief
executive officer of the Corporation.
2.04 "Committee" shall mean the Personnel and
Compensation Committee of the Board of Directors which may be
appointed from time to time by the Board of Directors, subject to
the provisions of Section 3.1(a) hereof.
<PAGE>
2.05 "Common Stock" shall mean common stock, $0.10 par
value per share, of the Corporation.
2.06 "Corporation" shall mean Allegheny Ludlum
Corporation.
2.07 "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
2.08 "Executive Officer" shall mean an "officer" of
the Corporation as defined in Rule 16a-1(f) as promulgated by the
Securities and Exchange Commission under the Exchange Act, as
such Rule may be amended from time to time.
2.09 "Fair Market Value" shall mean the fair market
value of shares of Common Stock, as determined by the Committee
in its discretion. The Committee may change from time to time
any method or formula by which it determines Fair Market Value.
2.10 "Grantee" shall mean a Key Employee to whom a
Unit or Units have been granted.
2.11 "Key Employee" shall mean (a) an employee who is
an Executive Officer (subject to the second sentence of this sub-
section) and (b) any other employee of the Corporation or a
Subsidiary who is, in the judgment of the Chief Executive
Officer, responsible to a material extent for the profitability
and continued growth of the Corporation and Subsidiaries.
Directors of the Corporation who are not otherwise officers or
employees of the Corporation and directors who are members of the
Committee may not be designated as Key Employees.
- 2 -
<PAGE>
2.12 "Plan" shall mean the Performance Share Plan For
Key Employees of Allegheny Ludlum Corporation and Subsidiaries.
2.13 "Rule 16b-3" shall mean Rule 16b-3 as promulgated
by the Securities and Exchange Commission under the Exchange Act,
as in effect prior to May 1, 1991 until the Committee elects
otherwise and thereafter as such Rule may be amended from time to
time.
2.14 "Subsidiary" shall mean any corporation at least
a majority of whose outstanding voting shares shall at the time
be owned by the Corporation or by one or more Subsidiaries.
2.15 "Unit" shall mean a unit denominated in dollars
and/or shares of Common Stock in such form and amount as the
Committee shall determine as of the date of grant of such Unit in
accordance with the provisions hereof.
ARTICLE III
-----------
General
-------
3.1 Administration.
--------------
(a) The Plan shall be administered by the
Committee. A person who is not a disinterested
person for the purposes of Rule 16b-3 or,
effective as of the 1995 annual meeting of
shareholders, who is not an "outside director" for
the purposes of Section 162(m) of the Internal
Revenue Code of 1986 and the regulations
promulgated thereunder, shall not be a member of
the Committee, and shall not participate in the
- 3 -
<PAGE>
administration of the Plan, for any purpose
relating to any Executive Officer participant or
participants in the Plan. Such disqualification
shall be effective immediately prior to the
occurrence of any event or circumstance that
causes the person to lose the status of
disinterested person or outside director, as the
case may be.
(b) The Chief Executive Officer shall
designate which employees, in addition to the
Executive Officers, are Key Employees. The
Committee shall (i) grant awards pursuant to the
Plan; (ii) prescribe such limitations and restric-
tions as the Committee shall deem appropriate; and
(iii) interpret the Plan, adopt, amend and rescind
rules and regulations relating to the Plan, and
make all other determinations and take all other
action necessary or advisable for the implementa-
tion and administration of the Plan.
(c) All such actions shall be final,
conclusive and binding upon the Key Employees.
Neither the Chief Executive Officer nor any member
of the Committee shall be liable for any action
taken or decision made in good faith relating to
the Plan or any award thereunder.
- 4 -
<PAGE>
3.2 Grant of Units. The Committee shall select from
--------------
among the Key Employees those individuals who shall be granted
awards under the Plan. The Committee shall determine the number,
form and amount of Units to be granted to a Grantee. In granting
such awards and determining their form and amount, consideration
shall be given to the recommendations of the Chief Executive
Officer, the functions and responsibilities of the Grantee, the
Grantee's potential contributions to the profitability and sound
growth of the Corporation and such other factors as shall be
deemed relevant.
ARTICLE IV
----------
Establishment of Corporate Objectives
-------------------------------------
During the first three months of a fiscal year or prior
to such fiscal year, the Board of Directors shall determine
whether to establish an Award Period commencing with the
beginning of such fiscal year and the appropriate length of the
Award Period. If the Board of Directors establishes an Award
Period, the Chief Executive Officer, with the advice of the
Committee, shall determine the financial objectives of the
Corporation and its Subsidiaries to be achieved during such Award
Period and the basis on which Units granted for such Award Period
shall vest upon either partial achievement of the corporate
objectives or upon the meeting or surpassing of the corporate
objectives.
- 5 -
<PAGE>
ARTICLE V
---------
Grant of Units
--------------
5.1 Grant of Units. The Committee, subject to the
--------------
provisions of the Plan, may grant Units, or fractions thereof, to
Key Employees and determine (and the Performance Unit Agreement
shall state) the number, form and amount of Units granted to the
respective Grantees and such other terms and conditions as the
Committee may consider appropriate. In taking such action,
consideration shall be given to the recommendations of the Chief
Executive Officer.
5.2 Performance Unit Agreements. Units granted to a
---------------------------
Key Employee under the Plan shall be evidenced by a written
"Performance Unit Agreement", to be entered into between the
Corporation and the Key Employee and to contain such terms and
conditions as the Committee may consider appropriate in each
case.
5.3 Grantee Account. At such time after the close of
---------------
an Award Period as it shall be determined by the Committee that
the objectives for such Award Period shall have been fully or
partially achieved, the Corporation shall establish and maintain
a bookkeeping account for each Grantee who shall have been
granted Units for such Award Period and shall credit to such
account a dollar amount and/or the number of shares of Common
Stock equal to the dollar value and/or the number of shares of
Common Stock of the Units to which the Grantee becomes entitled
pursuant to his Performance Unit Agreement.
- 6 -
<PAGE>
5.4 Payment of Grantee Account. The dollar amount
--------------------------
and/or the number of shares of Common Stock credited to a
Grantee's bookkeeping account shall be paid to the Grantee in
installments; provided, however, that a Grantee must be then and
have continuously been an employee of the Corporation or any of
its Subsidiaries from the date of the grant of the Units to the
date of each installment payment. The installment payments shall
be in the amount and/or the number of shares of Common Stock as
follows: thirty-three and one-third percent (33-1/3%) of the
total dollar amount and the number of shares of Common Stock
credited to the Grantee's account on the first day of the
calendar month following the calendar month in which the amount
was credited to the account and an additional thirty-three and
one-third percent (33-1/3%) on January 1 of each succeeding
calendar year thereafter, until such amount is completely
distributed. Fractional shares shall not be distributed but
shall be aggregated and paid in the last maturing installment.
Notwithstanding the foregoing, in the event of the death of the
Grantee, total disability of the Grantee (as determined by the
Committee in its sole discretion) or retirement of the Grantee
(with the consent of the Chief Executive Officer), pursuant to a
pension plan maintained by the Corporation or a Subsidiary, any
unpaid installments payable to the Grantee shall be paid to the
Grantee or his estate, as the case may be, in due course as if
the Grantee had remained an employee of the Corporation.
- 7 -
<PAGE>
ARTICLE VI
----------
Aggregate Limitation on Shares Subject to Plan
----------------------------------------------
Shares of Common Stock which may be issued pursuant to
Units granted under the Plan may be either authorized and
unissued shares or authorized and issued shares of Common Stock
held by the Corporation as treasury shares. The number of shares
of Common Stock reserved for issuance under the Plan shall not
exceed 900,000 shares, which amount has been adjusted to reflect
the 3-for-2 stock split effective July 2, 1990 and the 2-for-1
stock split effective July 1, 1993, subject to further adjustment
pursuant to Section 7.10 hereof; provided, however, if any Units
shall be cancelled prior to the expiration of the Award Period
and prior to its exercise in full for any reason, the shares
subject to such Units shall be thereafter available under the
Plan.
ARTICLE VII
-----------
Miscellaneous
-------------
7.1 General Restriction. Any Unit denominated in
-------------------
Common Stock under the Plan shall be subject to the requirement
that if at any time the Committee shall determine that any
listing or registration of the shares of Common Stock or any
consent or approval of any governmental body or any other
agreement or consent is necessary or desirable as a condition of
the granting of a Unit or issuance of shares of Common Stock or
cash in satisfaction thereof, such grant of a Unit or issuance of
shares of Common Stock may not be consummated unless such
requirement is satisfied in a manner acceptable to the Committee.
- 8 -
<PAGE>
7.2 Non-Assignability. No Unit granted under the Plan
-----------------
shall be assignable or transferable by the recipient thereof,
except by will or by the laws of descent and distribution.
During the life of the recipient, any Unit shall be exercisable
only by such individual. No assignment or transfer of a Unit or
of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise (except by will or
the laws of descent and distribution), shall vest in the assignee
or transferee any interest or right herein whatsoever, but
immediately upon such assignment or transfer the Units shall
terminate and become of no further effect.
7.3 Withholding Taxes. Whenever the Corporation makes
-----------------
payments under the Plan, in whole or in part, the Corporation
shall notify the Key Employee of the amount of withholding tax,
if any, which must be paid under federal and, where applicable,
state and local law. The Corporation shall, in the discretion of
the Corporation, but with the consent of the Committee, arrange
for payment for such withholding taxes in any one or combination
of the following ways: (i) acceptance of an amount in cash paid
by the Key Employee, (ii) deduction of amounts for withholding
taxes from Key Employee's regular salary payments, (iii) deduc-
tion of amounts for withholding taxes from amounts of cash
payable as an installment under the Plan, (iv) reduction in the
number of shares to be issued in an installment by that number of
shares having a Fair Market Value equal to the amount which the
Corporation is required to withhold and/or (v) acceptance of
- 9 -
<PAGE>
whole shares of Common Stock already owned by the Key Employee,
having a Fair Market Value equal to the amount the Corporation is
required to withhold. If the full amount of the withholding tax
is not recovered in the above manner, the Key Employee shall,
forthwith upon receipt of notice, remit the deficiency to the
Corporation. No certificates for shares of Common Stock shall be
issued or delivered to a Key Employee under the Plan until all
applicable taxes shall have been satisfied in full.
7.4 Delivery of Certificates. As soon as practicable
------------------------
after compliance by a Key Employee with all applicable
conditions, the Corporation will issue and deliver by mail, or
cause delivery by mail to the Key Employee at the address
specified, certificates registered in the name of the Key
Employee for the number or shares of Common Stock which the Key
Employee is entitled to receive (subject to reduction for
withholding tax as provided in Section 7.3 hereof) under the
provisions of the Plan and the Performance Unit Agreement.
7.5 No Right to Employment. Nothing in the Plan or in
----------------------
any agreement entered into pursuant to it shall confer upon any
employee the right to continue in the employ of the Corporation
or Subsidiary or affect any right which the Corporation or a
Subsidiary may have to terminate the employment of any employee.
7.6 Non-Uniform Determinations. The actions and
--------------------------
recommendations of the Chief Executive Officer and the determina-
tions by the Committee under the Plan (including without limita-
tion the determinations by the Chief Executive Officer and the
- 10 -
<PAGE>
Committee of the persons to receive awards, and the determina-
tions by the Committee of the form, amount and timing of such
awards, and the terms and provisions of such awards) need not be
uniform and may be made by the Chief Executive Officer or the
Committee, as the case may be, selectively among persons who
receive, or are eligible to receive awards under the Plan,
whether or not such persons are similarly situated.
7.7 Amendment or Termination of the Plan. The Board
------------------------------------
may at any time terminate the Plan or any part thereof and may
from time to time amend the Plan as it may deem advisable;
provided, however, that without shareholder approval, the Board
of Directors may not (i) increase the aggregate number of shares
of Common Stock which may be issued under the Plan (other than
increases permitted under Paragraph 7.10 hereof), (ii) extend the
term of the Plan, or (iii) extend the period during which Units
may be granted. The termination or amendment of the Plan shall
not, without the consent of a Grantee, affect such Grantee's
rights under a previous grant of Units.
7.8 Investment Representation. Each Performance Unit
-------------------------
Agreement may provide that the Key Employee shall deliver to the
Committee, upon demand by the Committee, at the time of any
payment of an installment which contains shares of Common Stock a
written representation that the shares to be acquired are to be
acquired for investment and not for resale or with a view to the
distribution thereof. Upon such demand, delivery of such
representation prior to delivery of any shares shall be a
- 11 -
<PAGE>
condition precedent to the right of the Key Employee to receive
any shares.
7.9 No Rights as Shareholders. Recipients of Units
-------------------------
denominated in Common Stock under the Plan shall have no rights
as shareholders of the Corporation with respect thereto unless
and until certificates for shares of Common Stock are issued to
them.
7.10 Adjustment of Units. In the event of any change
-------------------
or changes in the outstanding Common Stock of the Corporation by
reason of any stock dividend, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of
shares or any rights offering to purchase a substantial amount of
Common Stock at below fair market value or of any similar change
affecting the Common Stock, any of which takes effect after the
first grant of a Unit under the Plan, the Committee may, in its
discretion, appropriately adjust the number of shares of Common
Stock which may be issued under the Plan, the number of shares of
Common Stock subject to Units theretofore granted under the Plan,
and any and all other adjustments deemed appropriate by the
Committee to prevent substantial dilution or enlargement of the
rights granted to a Key Employee in such manner as the Committee
shall deem appropriate.
7.11 Units Not a Bar to Corporate Event. The
----------------------------------
existence of the Units granted hereunder shall not affect in any
way the right or the power of the Corporation or its shareholders
to make or authorize any or all adjustments, recapitalizations,
- 12 -
<PAGE>
reorganizations or other changes in the Corporation's capital
structure or its business, or any merger or consolidation of the
Corporation, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Common Stock or
the rights thereof, or the dissolution or liquidation of the
Corporation, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding,
whether of a similar character or otherwise.
ARTICLE VIII
------------
Effective Date of the Plan; Contingent Effectiveness
----------------------------------------------------
The effective date of the Plan shall be the date upon
which the latter of the following occurs: (i) the closing on an
initial public offering by the Corporation of shares of Common
Stock in a transaction registered under the Securities Act of
1933 on Form S-1 and (ii) the approval, at a regular or special
meeting, by the shareholders of the Corporation holding not less
than a majority of the issued and outstanding shares of Common
Stock. Notwithstanding the foregoing, if the Plan shall have
been approved by the Board of Directors prior to such shareholder
approval, Units may be granted hereunder subject to subsequent
shareholder approval. Notwithstanding approval by the Board and
the shareholders, in the event that no such offering takes place
prior to January 1, 1988, the Plan, together with all actions
taken and agreements executed in relation thereto, shall be null
and void and without further effect.
- 13 -
<PAGE>
ARTICLE IX
----------
Termination of the Plan
-----------------------
The Plan shall expire on January 1, 1997.
ARTICLE X
----------
RULE 16b-3 COMPLIANCE
---------------------
It is intended that the Plan comply with Rule 16b-3,
and that all interpretations of the Plan relating to Executive
Officers shall be consistent with such Rule and the Exchange Act.
In order to maintain compliance with such Rule and the Exchange
Act and to facilitate and promote the conformity of the
transactions of Executive Officers under the Plan with such Rule,
the Committee may adopt such rules and policies as it deems
advisable, including, but not limited to, rules and policies
restricting the timing of the reduction in the number of shares
to be issued in an installment pursuant to Section 7.3 hereof,
and any related rules or policies delaying payments pursuant to
Section 5.4 hereof, and any election with respect thereto.
- 14 -
Allegheny Ludlum Corporation Exhibit 11
Computation Per Share Earnings
(Dollars and Shares in Thousands
Except Per Share Amounts)
Fiscal Quarter Ended Six Months Ended
----------------------- ---------------------
July 3, July 4, July 3, July 4,
1994 1993 1994 1993
--------- -------- --------- ---------
PRIMARY
Net (loss) income $(29,179) $18,601 $(11,061) $36,873
-------- ------ -------- ------
Weighted average number
of common shares 70,792 65,874 70,865 65,852
Per share of common stock:
Net (loss) income $(.41) $.28 $(.15) $.56
======= ====== ======= ======
FULLY DILUTED(1)
- - -------------
Net income $18,601 $36,873
Tax effected interest
related to 5-7/8%
convertible subor-
dinated debentures 886 1,775
------ ------
Adjusted Net Income $19,487 $38,645
====== ======
Weighted average number
of common shares 65,874 65,852
Weighted average number
of convertible
subordinated debenture
common shares on an
"if converted" basis 4,938 4,938
Weighted average number
of common shares
related to employee
stock plans(2) 452 452
------ ------
71,264 71,242
Net income per share of
common stock $.27 $.54
====== ======
(1) Anti-dilutive in the 1994 periods.
(2) Not used in primary calculation due to dilution being
less than 3%
