-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WZdILxvPxrWanoppeTNE5UGOMx43KqFzLnjGv5fFV8DOm7v8arYgDEG6X8+1MpHx NpU/+PO7Jz6Iq4UFvJrhjQ== 0000898431-96-000030.txt : 19960410 0000898431-96-000030.hdr.sgml : 19960410 ACCESSION NUMBER: 0000898431-96-000030 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19960409 EFFECTIVENESS DATE: 19960428 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALLEGHENY LUDLUM CORP ET AL CENTRAL INDEX KEY: 0000811929 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 251364894 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-02371 FILM NUMBER: 96545481 BUSINESS ADDRESS: STREET 1: 1000 SIX PPG PL CITY: PITTSBURGH STATE: PA ZIP: 15222 BUSINESS PHONE: 4123942800 S-8 1 As filed with the Securities and Exchange Commission on April 9, 1996 Registration No. 33- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM S-8 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ALLEGHENY LUDLUM CORPORATION (Exact name of registrant as specified in its charter) PENNSYLVANIA 25-1364894 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) 1000 SIX PPG PLACE, PITTSBURGH, PENNSYLVANIA 15222-5479 (Address of principal executive offices) (Zip code) 40l(k) SAVINGS ACCOUNT PLAN ("Plan") (Full title of the plan) Jon D. Walton, Esquire Vice President - General Counsel and Secretary Allegheny Ludlum Corporation 1000 Six PPG Place Pittsburgh, Pennsylvania 15222 (Name and address of agent for service) (412) 394-2800 (Telephone number, including area code, of agent for service) Copies to: Charles M. Grimstad, Esquire Kirkpatrick & Lockhart LLP 1500 Oliver Building Pittsburgh, Pennsylvania 15222 CALCULATION OF REGISTRATION FEE Proposed Proposed Maximum Maximum Amount Title of Amount Offering Aggregate of Securities to be to be Price Offering Registration Registered(1) Registered per Share(2) Price(2) Fee Common Stock par value $0.10 100,000 per share shares $1,750,000 $1,750,000 $603.45 (1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, this registration statement also covers an indeterminate amount of interests to be offered or sold pursuant to the employee benefit plan described herein. (2) Estimated pursuant to Securities and Exchange Commission Rule 457(c) only for the purpose of calculating the registration fee; based on the average of the high and low price per share of Common Stock of Allegheny Ludlum Corporation on April 8, 1996, as published in the NYSE-Composite Transactions quotations. EXHIBIT INDEX APPEARS ON PAGE II-11 PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT Item 3. Incorporation of Documents by Reference. --------------------------------------- The following documents filed by Allegheny Ludlum Corporation (the "Company") with the Securities and Exchange Commission (the "Commission") are hereby incorporated by reference in this Registration Statement: 1. The Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995. 2. The description of the Company's Common Stock, par value $0.10 per share (the "Common Stock"), contained in the Company's Registration Statement filed under Section 12 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including all amendments and reports updating such description. The consolidated financial statements incorporated in this Registration Statement by reference to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1995, have been so incorporated in reliance on the report of Ernst & Young LLP, independent auditors, given on the authority of said firm as experts in auditing and accounting. All documents subsequently filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date of this Registration Statement, but prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered by this Registration Statement have been sold or which deregisters all such securities then remaining unsold, shall be deemed to be incorporated by reference into this Registration Statement. Each document incorporated by reference into this Registration Statement shall be deemed to be a part of this Registration Statement from the date of the filing of such document with the Commission until the information contained therein is superseded or updated by any subsequently filed document which is incorporated by reference into this Registration Statement or by any document which constitutes part of the prospectus relating to the Allegheny Ludlum Corporation 401(k) Plan (the "Plan") meeting the requirements of Section 10(a) of the Securities Act of 1933, as amended. Item 4. Description of Securities. ------------------------- The class of securities to be offered under this Registration Statement is registered under Section 12 of the Exchange Act. II-1 Item 5. Interests of Named Experts and Counsel. -------------------------------------- The legality of the Common Stock to which this Registration Statement relates has been passed upon for the Company by Jon D. Walton, Vice President-General Counsel and Secretary. Mr. Walton is paid a salary by the Company and participates in benefit plans of the Company other than the plan being registered hereunder, and beneficially owns 65,364 shares of Common Stock, including presently exercisable options to purchase 27,500 shares of Common Stock. Item 6. Indemnification of Directors and Officers. ----------------------------------------- Sections 1741 and 1742 of the Pennsylvania Business Corporation Law (the "BCL") provide that a business corporation shall have the power to indemnify any person who was or is a party, or is threatened to be made a party, to any proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that such person is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such proceeding, if such person acted in good faith and in a manner he reasonably believed to be in, or not opposed to, the best interests of the corporation, and, with respect to any criminal proceeding, had no reasonable cause to believe his conduct was unlawful. In the case of an action by or in the right of the corporation, such indemnification is limited to expenses (including attorneys' fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action, except that no indemnification shall be made in respect of any claim, issue or matter as to which such person has been adjudged to be liable to the corporation unless, and only to the extent that, a court determines upon application that, despite the adjudication of liability but in view of all the circumstances, such person is fairly and reasonably entitled to indemnity for the expenses that the court deems proper. BCL Section 1744 provides that, unless ordered by a court, any indemnification referred to above shall be made by the corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the indemnitee has met the applicable standard of conduct. Such determination shall be made: (1) by the Board of Directors by a majority vote of a quorum consisting of directors who were not parties to the proceeding; or II-2 (2) if such a quorum is not obtainable, or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion; or (3) by the shareholders. Notwithstanding the above, BCL Section 1743 provides that to the extent a director, officer, employee or agent of a business corporation is successful on the merits or otherwise in defense of any proceeding referred to above, or in defense of any claim, issue or matter therein, such person shall be indemnified against expenses (including attorneys' fees) actually and reasonably incurred by such person in connection therewith. BCL Section 1745 provides that expenses (including attorneys' fees) incurred by a director, officer, employee or agent of a business corporation in defending any such proceeding may be paid by the corporation in advance of the final disposition of the proceeding upon receipt of an undertaking to repay the amount advanced if it is ultimately determined that the indemnitee is not entitled to be indemnified by the corporation. BCL Section 1746 provides that the indemnification and advancement of expenses provided by, or granted pursuant to, the foregoing provisions is not exclusive of any other rights to which a person seeking indemnification may be entitled under any bylaw, agreement, vote of shareholders or disinterested directors or otherwise, and that indemnification may be granted under any law, agreement, vote of shareholders or directors or otherwise for any action taken or any failure to take any action whether or not the corporation would have the power to indemnify the person under any other provision of law and whether or not the indemnified liability arises or arose from any action by or in the right of the corporation, provided, however, that no indemnification may be made in any case where the act or failure to act giving rise to the claim for indemnification is determined by a court to have constituted willful misconduct or recklessness. Section 1 of Article VIA of the Registrant's By-Laws, as amended, provides that the Registrant shall indemnify, to the fullest extent permitted by law, each director or officer (including each former director or officer) of the Registrant who was or is made a party to or a witness in or is threatened to be made a party to or a witness in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an authorized representative of the Registrant, against all expenses (including attorneys' fees and disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. II-3 Section 2 of Article VIA of the Registrant's By-Laws, as amended, further provides that the Registrant shall pay expenses (including attorneys' fees and disbursements) incurred by a director or officer of the Registrant referred to in Section 1 of such Article in defending or appearing as a witness in any civil or criminal action, suit or proceeding described in Section 1 of such Article in advance of the final disposition of such action, suit or proceeding. The expenses incurred by such director or officer shall be paid by the Registrant in advance of the final disposition of such action, suit or proceeding only upon receipt of an undertaking by or on behalf of such director or officer to repay all amounts advanced if it shall ultimately be determined that he is not entitled to be indemnified by the Registrant. The Registrant's By-Laws provide that the rights of indemnification and advancement of expenses provided for therein shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may otherwise be entitled. The Registrant has entered into indemnification agreements with each of its directors in which the Registrant agrees to indemnify each of its directors to the fullest extent permitted by law both as to action in his official capacity and as to action in another capacity and agrees to purchase and maintain insurance on the terms and conditions described therein. BCL Section 1747 permits a Pennsylvania business corporation to purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee or agent of another corporation or other enterprise, against any liability asserted against such person and incurred by him in any such capacity, or arising out of his status as such, whether or not the corporation would have the power to indemnify the person against such liability under the provisions described above. Section 5 of Article IVA of the Registrant's By-Laws, as amended, provides that, except in the circumstances set forth in Section 5, the Registrant shall purchase and maintain insurance on behalf of each director and officer against any liability asserted against or incurred by such officer or director in any capacity, or arising out of such director's or officer's status as such, whether or not the Registrant would have the power to indemnify such person against such liability under the provisions of Article IVA. The Registrant maintains directors' and officers' liability insurance covering its directors and officers with respect to liabilities, including liabilities under the Securities Act of 1933, as amended, which they may incur in connection with their serving as such. Such insurance provides coverage for the directors and officers against certain liabilities even though such liabilities may not be covered by the foregoing By-Law indemnification provision. As permitted by BCL Section 1713, the By-Laws of the Registrant provide that no director shall be personally liable for monetary damages for any action taken, or failure to take any action, except to the extent that such elimination or limitation of liability is II-4 PAGE expressly prohibited by the act of November 28, 1986 (P. L. No. 145) as in effect at the time of the alleged action or failure to take action by the director. The BCL states that this exculpation from liability does not apply where the director has breached or failed to perform the duties of his office and the breach or failure to perform constitutes self-dealing, willful misconduct or recklessness, and does not apply to the responsibility or liability of a director pursuant to any criminal statute or the liability of a director for payment of taxes pursuant to Federal, state or local law. It may also not apply to liabilities imposed upon directors by the Federal securities laws. Item 7. Exemption for Registration Claimed. ---------------------------------- Not applicable. Item 8. Exhibits. -------- Exhibit Number Description ------- ----------- 4(a) Restated and Amended Articles of Incorporation, incorporated by reference to Exhibit 4 to the Company's Quarterly Report on Form 10-Q for the quarter ended July 3, 1994. 4(b) By-Laws, as amended, incorporated by reference to Exhibit 3(b) to the Company's Annual Report on Form 10-K for the year ended January 1, 1995. 4(c) 401(k) Savings Account Plan 5 Opinion of Jon D. Walton, Vice President - General Counsel and Secretary of the Company relating to the legality of the shares registered under the Plan. The registrant will submit the Plan and any amendment thereto to the Internal Revenue Service (IRS) in a timely manner and will make all changes required by the IRS in order to qualify the Plan. 23(a) Consent of Jon D. Walton is contained in the Opinion of Counsel filed as Exhibit 5 23(b) Consent of Ernst & Young LLP 24 Power of Attorney (included on page II-8) Item 9. Undertakings. ------------ (a) The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: II-5 (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and -------- ------- (a)(1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned registrant hereby undertakes that, for the purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. * * * (h) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the II-6 registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. II-7 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on the 9th day of April, 1996. ALLEGHENY LUDLUM CORPORATION (Registrant) By: /s/ James L. Murdy -------------------------- James L. Murdy Senior Vice President-Finance and Chief Financial Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints J. L. Murdy, J. D. Walton, and M. W. Snyder and each of them, his or her true and lawful attorneys- in-fact and agents, with full power of substitution and revocation, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated on the 9th day of April, 1996. Signature Title --------- ----- /s/ Arthur H. Aronson ------------------------- President and Chief Executive Officer Arthur H. Aronson and Director /s/ James L. Murdy ------------------------- Senior Vice President-Finance and James L. Murdy Chief Financial Officer and Director /s/ Richard R. Roeser ------------------------- Vice President-Controller and Richard R. Roeser Chief Accounting Officer II-8 PAGE /s/ Richard P. Simmons ------------------------- Chairman of the Board and Director Richard P. Simmons /s/ Robert P. Bozzone ------------------------- Vice Chairman and Director Robert P. Bozzone /s/ Paul S. Brentlinger ------------------------- Director Paul S. Brentlinger /s/ C. Fred Fetterolf ------------------------- Director C. Fred Fetterolf /s/ Thomas Marshall ------------------------- Director Thomas Marshall /s/ W. Craig McClelland ------------------------- Director W. Craig McClelland /s/ Richard K. Pitler ------------------------- Director Richard K. Pitler /s/ Anne Pol ------------------------- Director Anne Pol /s/ Charles J. Queenan, Jr. ------------------------- Director Charles J. Queenan, Jr. /s/ James E. Rohr ------------------------- Director James E. Rohr /s/ George W. Tippins ------------------------- Director George W. Tippins /s/ Steven C. Wheelwright ------------------------- Director Steven C. Wheelwright II-9 PAGE 40l(k) SAVINGS ACCOUNT PLAN --------------------------- Pursuant to the requirements of the Securities Act of 1933, the 401(k) Savings Account Plan has caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Pittsburgh, Commonwealth of Pennsylvania, on the 9th day of April, 1996. 401(k) SAVINGS ACCOUNT PLAN By: /s/ Bruce A. McGillivray -------------------------- Title: Plan Administrator II-10 EXHIBIT INDEX Exhibit Number Item ------- ---- 4(c) 401(k) Savings Account Plan 5 Opinion of Jon D. Walton, Vice President - General Counsel and Secretary of the Company relating to the legality of the shares registered under the Plan 23(a) Consent of Jon D. Walton is contained in the Opinion of Counsel filed as Exhibit 5 23(b) Consent of Ernst & Young LLP II-11 EX-4 2 Exhibit 4(c) 401(K) SAVINGS ACCOUNT PLAN for Employees of the Washington Plant Pursuant to Agreement Between Allegheny Ludlum Corporation and the United Steelworkers of America for the benefit of members of Local Unions 1141, 3891 and Guard Union 502 Effective April 1, 1996 TABLE OF CONTENTS PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . 1 ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . 3 ARTICLE II EFFECTIVE DATE . . . . . . . . . . . . . 12 ARTICLE III ELIGIBILITY AND ENROLLMENT . . . . . . . 12 3.1 Participation in the Plan . . . . . . . . 12 3.2 Enrollment . . . . . . . . . . . . . . . 13 3.3 Cessation of Participation . . . . . . . 13 ARTICLE IV PARTICIPANT CONTRIBUTIONS . . . . . . . . 14 4.1 Deferred Savings . . . . . . . . . . . . 14 4.2 Change in Deferred Savings Rate . . . . . 16 4.3 Limitation on Deferred Savings . . . . . 16 4.4 Return of Excess Deferred Savings . . . . 17 4.5 Limits of Actual Deferral Percentage . . 18 4.6 Reduction of Deferred Savings . . . . . . 18 4.7 Rollover Contributions and Trustee-to-Trustee Transfers . . . . . . 19 ARTICLE V EMPLOYER CONTRIBUTIONS . . . . . . . . . 20 ARTICLE VI ACCOUNTS AND ALLOCATIONS . . . . . . . . 20 6.1 Accounts . . . . . . . . . . . . . . . . 20 6.2 Determination of Value . . . . . . . . . 21 6.3 Credits to Participant 401(k) Savings Accounts . . . . . . . . . . . . 22 6.4 Debits to Participant 401(k) Savings Accounts . . . . . . . . . . . . 23 6.5 Allocation Limitations . . . . . . . . . 23 ARTICLE VII VESTING . . . . . . . . . . . . . . . . . 26 ARTICLE VIII INVESTMENTS . . . . . . . . . . . . . . . 26 8.1 Investment of 401(k) Savings Accounts . . 26 8.2 Investment Directions . . . . . . . . . . 28 8.3 Voting of Company Stock . . . . . . . . . 29 8.4 Account Statements . . . . . . . . . . . 29 ARTICLE IX WITHDRAWALS WHILE EMPLOYED . . . . . . . 29 9.1 Withdrawals from 401(k) Savings Accounts . . . . . . . . . . . . . . . . 29 9.2 Withdrawals While Loan Outstanding . . . 31 9.3 Timing and Payment of Withdrawals . . . . 31 i 9.4 No Replacement . . . . . . . . . . . . . 31 9.5 Participant Loans . . . . . . . . . . . . 31 ARTICLE X DISTRIBUTION UPON RETIREMENT OR TERMINATION OF EMPLOYMENT . . . . . . 35 10.1 Retirement or Termination of Employment . . . . . . . . . . . . . . . 35 10.2 Method of Distribution . . . . . . . . . 35 10.3 Form of Distribution . . . . . . . . . . 35 10.4 Time of Distribution . . . . . . . . . . 36 10.5 Distributions at Age 70-1/2 . . . . . . . 37 10.6 Beneficiary . . . . . . . . . . . . . . . 38 ARTICLE XI ADMINISTRATION OF THE PLAN . . . . . . . 39 11.1 Board of Directors' Responsibilities . . 39 11.2 Employer's Duties . . . . . . . . . . . . 40 11.3 Trustee's Duties . . . . . . . . . . . . 41 11.4 Delegation of Fiduciary Responsibility . 41 11.5 Administrative Bonding . . . . . . . . . 42 11.6 Expenses of the Plan . . . . . . . . . . 43 11.7 Indemnification . . . . . . . . . . . . . 43 ARTICLE XII AMENDMENT AND TERMINATION . . . . . . . . 43 12.1 Authority . . . . . . . . . . . . . . . . 43 12.2 Distribution Upon Termination . . . . . . 44 ARTICLE XIII DIRECT ROLLOVERS . . . . . . . . . . . . 44 13.1 Direct Rollovers . . . . . . . . . . . . 44 ARTICLE XIV MISCELLANEOUS . . . . . . . . . . . . . . 46 14.1 Incapacity of Recipient of Benefits . . . 46 14.2 Merger, Consolidation or Discontinuance . 47 14.3 Merger or Consolidation of the Plan . . . 47 14.4 Assets in Trust Fund Owned by Trustee . . 47 14.5 Employment Rights Not Affected by the Plan . . . . . . . . . . . . . . . . . . 48 14.6 Trust Fund for Sole Benefit of Participants and Beneficiaries . . . . . 48 14.7 Information to be Furnished by the Employer . . . . . . . . . . . . . . . . 49 14.8 Service of Process . . . . . . . . . . . 49 14.9 Appeals Procedure . . . . . . . . . . . . 49 14.10 Governing Law . . . . . . . . . . . . . . 49 ii The 401(K) SAVINGS ACCOUNT PLAN for EMPLOYEES OF the WASHINGTON PLANT PREAMBLE ________ The 401(k) Savings Plan for Employees of the Washington Plant (the "Plan") is a defined contribution plan within the meaning of Section 3(34) of the Employee Retirement Income Security Act of 1974, as amended (the "Act"), and is adopted by Allegheny Ludlum Corporation (the "Employer") effective April 1, 1996 pursuant to an agreement between the Employer and the United Steelworkers of America with respect to Employees of the Washington Plant who are members of Local Unions 1141, 3891 and Guard Union 502. The Plan is a collectively bargained plan which includes a cash or deferred arrangement under section 401(k) of the Internal Revenue Code of 1986, as amended (the "Code"). It is intended to qualify under the Code, initially and thereafter, as a combination profit sharing and stock bonus plan so that contributions to the Plan as well as earnings thereon are not taxable to participants until distributed. The Plan, as well as appropriate forms, schedules and demonstrations, have been submitted to the Internal Revenue Service together with a request for an determination letter with respect to the Plan's qualified status. The purpose of the Plan is to assist eligible employees to accumulate a fund to supplement retirement income and to 1 encourage employee thrift by permitting eligible employees to defer receipt, on a voluntary basis, of a part of their compensation from the Employer and direct that contributions be made to this Plan in the amount of such deferrals. The Plan is intended to reflect all applicable provisions of the Act and the Code as in effect on the Effective Date of the Plan. - 2 - ARTICLE I DEFINITIONS ___________ In this Plan, whenever the context so indicates, the singular or plural and the masculine, feminin<>>e or neuter gender shall each be deemed to include the others; the terms "he", "his", and "him" shall refer to an Employee or a Participant; references to the Act or the Code shall include any subsequent amendments to such sections and any regulations promulgated thereunder; and the capitalized terms shall have the following meanings: 1.1 "Account" shall mean the 401(k) Savings Account established for each Participant. 1.2 "Account Balance" shall mean, as of any Valuation Date, the amount in a Participant's 401(k) Savings Account. 1.3 "Act" shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time. 1.4 "Actual Deferral Percentage" shall mean for any specified group of employees for any Plan Year, the average of the following ratios, calculated separately for each Eligible Employee in the group: (i) Deferred Savings, if any, made by or on behalf of the Eligible Employee for the Plan Year, to (ii) the Eligible Employee's Section 415 Compensation for the Plan Year. 1.5 "Affiliated Employer" shall mean any corporation or other entity that is a member of a controlled group of corporations or other entities within the meaning of sections - 3 - 414(b), 414(c), and 414(m) of the Code or as described in Treasury Regulations issued pursuant to section 414(o) of the Code of which the Employer is a component member; provided that no such corporation or other entity shall be considered as an Affiliated Employer at any time prior to or subsequent to the period of time during which it satisfies such definition. 1.6 "Annual Addition" shall mean the sum of the Employer Contributions and Deferred Savings made on the Participant's behalf or allocated to his or her Accounts for such Plan Year and Employer Contributions, employee contributions and forfeitures allocated to a Participant's accounts under all other defined contribution plan maintained by Employer or an Affiliated Employer. 1.7 "Basic Agreement" shall mean a labor agreement between the Employer and the United Steelworkers of America (or any other group of represented employees whose members agree to accept participation in this Plan on the same terms and conditions as the United Steelworkers of America) covering rates of pay, hours of work, and other basic terms and conditions of employment which is in effect from time to time and is applicable to Local Unions 1141, 3891 and Guard Union 502 and such other bargaining unit listed in Exhibit A, which is attached hereto and made a part hereof; and where used with respect to an Employee such term shall mean the Basic Agreement applicable to him. 1.8 "Board of Directors" shall mean the Board of Directors of Allegheny Ludlum Corporation. - 4 - 1.9 "Code" shall mean the Internal Revenue Code of 1986, as the same may be amended from time to time. 1.10 "Committee" shall mean the person or persons designated by the Board of Directors to serve as the Employer pursuant to Article XI. 1.11 "Company Stock" shall mean common stock, $0.10 par value, of the Employer. 1.12 "Company Stock Fund" shall mean the investment fund provided for in Section 8.1. 1.13 "Deferred Savings" shall mean the payments an Eligible Employee elects to make pursuant to Section 4.1 hereof which may be excluded from the Eligible Employee's gross income for federal income tax purposes pursuant to section 401(k) of the Code. 1.14 "Deferred Savings Portion" shall mean, as of any Valuation Date, the then current value, determined in accordance with Section 6.2 hereof, of a Participant's Deferred Savings and earnings thereon credited to the Participant's 401(k) Savings Account. 1.15 "Diversified Fund" shall mean the investment fund provided for in Sections 8.1. 1.16 "Effective Date" shall be the date specified in Article II. 1.17 "Eligible Employee" shall mean any Employee who has satisfied the eligibility requirements for making Deferred Savings contributions set forth in Section 3.1, whether or not - 5 - such Employee has elected to make Deferred Savings contributions to the Plan pursuant to Article IV. 1.18 "Eligible Pay" shall mean the total regular compensation paid by an Employer to a Participant for each Plan Year, including overtime, shift differentials, profit sharing payments and bonuses (excluding, however, payments under the Employer's Longevity Incentive Payment Plan) but exclusive of gifts, gratuities, expense allowances and Employer contributions under this Plan or any other deferred compensation plan, or under any other employee benefit plan as defined in the Act. For the purposes of Section 4.1 hereof, "Eligible Pay" shall be the pay of a Participant prior to any reduction for amounts deferred into this Plan or any other salary reduction plan or arrangement of the Employer. Notwithstanding the foregoing, the aggregate Eligible Pay taken into account for any Employee under this Plan for any Plan Year shall not exceed $150,000, subject to such adjustments as may be made from time to time pursuant to sections 401(a)(17)(B) and 415(d) of the Code (the "OBRA '93 Limit"). In determining the Eligible Pay of a Participant for purposes of the $150,000 limitation, the rules of section 414(q)(6) of the Code shall apply; provided that the term "family" used in section 414(q)(6) shall include only the Participant's spouse and lineal descendants who have not attained age 19 before the end of the Plan Year. The cost-of-living adjustment in effect for a calendar year applies to any period, not exceeding 12 months, over which compensation is determined (determination period) - 6 - beginning in such calendar year. If a determination period consists of fewer than 12 months, the OBRA '93 Limit will be multiplied by a fraction, the numerator of which is the number of months in the determination period, and the denominator of which is 12. Any reference in this Plan to the limitation under Section 401(a)(17) of the Code shall mean the OBRA '93 Limit set forth herein. 1.19 "Employee" shall mean any common law employee of the Employer who from time to time during the term of this Plan shall be in any bargaining unit covered by a Basic Agreement. The term Employee shall exclude any salaried employee and any hourly employee of the Employer who is not a member of such bargaining units. No Leased Employee shall become an Employee for purposes of this Plan until such time as such Leased Employee becomes a common law employee of the Employer and a member of a collective bargaining unit covered by a Basic Agreement, regardless of whether he or she is covered by a safe harbor plan within the meaning of Treasury Regulation section 1.414(n)-2. 1.20 "Employer" shall mean Allegheny Ludlum Corporation, and any Affiliated Employer which has adopted the Plan. 1.21 "Employer Contributions" shall mean the Employer contributions made pursuant to Article V. 1.22 "Employment Commencement Date" shall mean the date on which an Employee first performs an Hour of Service. - 7 - 1.23 "Equity Fund" shall mean the investment fund provided for in Sections 8.1. 1.24 "401(k) Savings Account" shall mean the account established for each Participant pursuant to Section 6.1 hereof to which Deferred Savings and Rollover Contributions are credited. If a Rollover Contribution has been made, a Participant's 401(k) Savings Account shall consist of a Deferred Savings Portion and a Rollover Portion. 1.25 "Fixed Income Fund" shall mean the investment fund provided for in Sections 8.1. 1.26 "Funds" shall mean the Diversified Fund, Stock Index Fund, Equity Fund, Fixed Income Fund and the Company Stock Fund. 1.27 "Highly Compensated Employee" shall mean any Employee who is a "highly compensated employee" within the meaning of section 414(q) of the Code. 1.28 (a) "Hour of Service" shall mean each hour for which the Employee is paid, or entitled to payment, by the Employer for the performance of duties for the Employer. Hours of Service hereunder shall be calculated and credited in accordance with 29 C.F.R. section 2530.200b, which is incorporated herein by this reference. (b) The number of an Employee's Hours of Service and the Plan Year or other computation period to which they are to be credited shall be determined in accordance with sections 2530.200b-2(b) and (c) of the Rules and Regulations for Minimum - 8 - Standards for Employee Pension Benefit Plans, which sections are incorporated herein by this reference. (c) If a Leased Employee shall become an Employee pursuant to Section 1.19, he or she shall be credited with all Hours of Service previously performed for the Employer as a Leased Employee. 1.29 "Hour Worked" shall mean actual hours worked for the Employer and for the United Steelworkers of America; provided, however, that an hour worked for the United Steelworkers of America shall be considered an "Hour Worked" only if it has reimbursed the Employer for the contribution resulting from the "Hour Worked." 1.30 "Leased Employee" shall mean any individual (other than a common law employee of an Employer) who (i) performs services for an Employer pursuant to an agreement between the Employer and any other person which is a leasing organization within the meaning of Treasury Regulation section 1.414(n)-1 or any successor regulation, (ii) who has performed such services for the Employer on a substantially full-time basis for a period of at least one year, provided that (iii) such services are of a type historically performed, in the Employer's industry, by common law employees. For this purpose, an individual will be considered to have performed services for an Employer on a substantially full-time basis during any twelve consecutive month period if he or she has completed a number of Hours of Service for the Employer at least equal to the lesser of - 9 - (a) 1,500 Hours of Service or (b) 75% of the median number of Hours of Service completed by Employees (other than Leased Employees) of the Employer in equivalent positions during such twelve month period. 1.31 "Normal Retirement Date" shall mean the last day of the month in which the Participant attains age 65. 1.32 "Non-Highly Compensated Employee" shall mean and Employee who is not a Highly Compensated Employee. 1.33 "Participant" shall mean (i) any individual who has satisfied the eligibility requirements of Section 3.1, including any individual who is an Eligible Employee and has elected to make Deferred Savings pursuant to Section 3.3, and (ii) any other individual who has an amount credited to his or her Accounts. 1.34 "Permanent Disability" shall mean a disability by bodily injury or disease, either occupational or nonoccupational in cause, preventing a Participant, on the basis of medical evidence, from engaging in any occupation or employment with the Employer. If any difference shall arise between the Employer and any Participant as to whether such Participant is or continues to have a Permanent Disability, such difference shall be resolved as under the following procedure. The Participant shall be examined by a physician appointed for the purpose by the Employer and by a physician appointed for the purposes by the duly authorized representative of the United Steelworkers of America. If they shall disagree concerning whether the participant is permanently - 10 - incapacitated, that question shall be submitted to a third physician selected by such two physicians. The medical opinion of the third physician, after examination of the participant and consultation with the other two physicians, shall decide such question. The fees and expenses of the third physician shall be shared equally by the Employer and the United Steelworkers of America. 1.35 "Plan" shall mean the 401(k) Savings Account Plan for Employees of the Washington Plant, as amended and supplemented from time to time. 1.36 "Plan Administrator" shall mean the person or persons, if any, designated by the Employer to serve as the Plan Administrator pursuant to Article XI. 1.37 "Plan Year" shall mean each twelve (12) month period ending on December 31st. 1.38 "Retirement" shall mean a Participant's retirement from employment by the Employer in accordance with the terms and conditions of the Employer's pension plan covering such Participant. 1.39 "Rollover Contribution" shall mean any amounts transferred to a Participant's 401(k) Savings Account pursuant to Section 4.7 hereof. 1.40 "Rollover Portion" shall mean, as of any Valuation Date, the then current value of a Participant's Rollover Contributions, detemined in acorrdance with section - 11 - 6.02, and earnings thereon credited to the Participant's 401(k) Savings Account. 1.41 "Section 415 Compensation" shall mean compensation as defined in section 415(c)(3) of the Code. 1.42 "Trustee" shall mean the trustee or trustees of the Trust Fund appointed by the Board of Directors pursuant to Section 11.1(b) hereof, and any and all successors to such trustee or trustees. 1.43 "Trust Agreement" shall mean the agreement of trust by and between the Trustee and the Employer. 1.44 "Trust Fund" shall mean the trust fund or trust funds established pursuant to the Trust Agreement, for purposes of receiving and holding in trust the assets held under the Plan. 1.45 "Valuation Date" shall mean the last day of each calendar month, or such other date occurring more frequently than monthly if determined feasible by the Plan Administrator, on which the Trustee determines the fair market value of the Trust Fund determined in accordance with Section 6.02. ARTICLE II EFFECTIVE DATE ______________ The Effective Date of the Plan is April 1, 1996. ARTICLE III ELIGIBILITY AND ENROLLMENT __________________________ 3.1 Participation in the Plan. (a) Deferred Savings. Each Employee who had completed his or her probationary period under the Basic Agreement (which - 12 - shall not in any event exceed a calendar year period in which the employee renders 1,000 Hours of Service) shall be eligible to make Deferred Savings to the Plan on the Effective Date. Each other Employee shall be eligible to make Deferred Savings to the Plan upon satisfying the requirements of Section 3.1 and upon completing one year of continuous service consisting of a period of twelve consecutive months of employment with the Employer following his or her Employment Commencement Date or in any Plan Year thereafter, including the Plan Year in which occurs the first anniversary of his or her Employment Commencement Date, in which the Employee completes one thousand (1,000) Hours of Service. (b) Rollover Contributions. Each Employee shall be eligible to make Rollover Contributions to the Plan upon becoming an Employee. Rollover Contributions may be made prior to the time an Employee is eligible to enroll for Deferred Savings. No enrollment is required to make Rollover Contributions. Rollover Contributions must be accompanied by a form approved for such purpose by the Plan Administrator and such other information as may be reasonably requested by the Plan Administrator. 3.2 Enrollment. Each Eligible Employee may elect to begin Deferred Savings by completing and returning an enrollment form to the Employer not later than thirty (30) days before the beginning of the first payroll period next following or coincident with the Valuation Date on which he or she desires to have Deferred Savings begin. - 13 - 3.3 Cessation of Participation. A Participant shall cease to be a Participant if he or she ceases to be an Employee for any reason. However, a former Participant with an Account Balance in the Plan shall be credited with his or her share of any income and gains of his or her Accounts pursuant to Section 6.3, and shall be debited with withdrawals and distributions from, and with his or her share of any losses of his or her Accounts pursuant to Section 6.4. A former Participant who ceases to be an Employee due to promotion to salaried employment shall retain all rights of a Participant hereunder (except the right to receive Employer Contributions and to make Deferred Savings) and shall have the right, at his or her discretion, to have his or her Account Balance in this Plan transferred to the defined contribution plan covering such employee after the transfer. ARTICLE IV PARTICIPANT CONTRIBUTIONS _________________________ 4.1 Deferred Savings. (a)(i) Deferrals of Eligible Pay. A Participant may elect to defer and designate as his or her Deferred Savings a portion of the Eligible Pay payable to the Participant for each pay period in whole percentage amounts of not less than one percent (1%) and not more than eighteen percent (18%) of such Eligible Pay. Such Deferred Savings shall be deducted from the Participant's Eligible Pay each payroll period and paid to the - 14 - Trustee no later than fifteen (15) days after the last day of the month in which such payroll is paid. (a)(ii) Deferrals of Longevity Incentive Payment Plan and Profit Sharing Amounts. A Participant may elect to defer and designate as his or her Deferred Savings all or any portion, in whole percentage amounts, of amounts payable to the Participant under the Longevity Incentive Payment Plan and/or Profit Sharing. Any Deferred Savings elected to be deferred under this Section 4.1(a)(ii) shall be deducted from the amounts otherwise payable to the Participant under the Longevity Incentive Payment Plan and/or Profit Sharing, and shall be paid to the Trustee no later than fifteen (15) days after the last day of the month in which such payroll is paid. An election to defer amounts payable from the Longevity Incentive Payment Plan or Profit Sharing must be made each year and such elections shall not carry over from year to year. For any year in which the Participant does not make an election to defer Longevity Incentive Payment Plan amounts or Profit Sharing amounts, the Participant shall be deemed to have elected not to defer amounts received in such year. An election to defer Longevity Incentive Payment Plan amounts shall be made separately from an election to defer Profit Sharing amounts, and both of such elections shall be made separately from a Participant's election to defer Eligible Pay amounts. (b) Notwithstanding the foregoing, no Participant shall be permitted to have Deferred Savings contributed to his or her 401(k) Savings Account during any one calendar year which are - 15 - in excess of $9,240 (or such other amount as may be in effect for such calendar year as a result of cost-of-living adjustments to this limit pursuant to sections 402(g)(5) and 415(d) of the Code), including elective deferrals (within the meaning of section 402(g)(3) of the Code) made during such calendar year on the Participant's behalf under any other plan or annuity contract, whether sponsored by the Employer or any other employer. 4.2 Change in Deferred Savings Rate. Not more than once each calendar month, a Participant may, upon not less than thirty (30) days' prior written notice, elect to increase or decrease (in whole percentage amounts) the percentage of Eligible Pay designated as Deferred Savings as of the beginning of the first payroll period next following or coincident with any subsequent Valuation Date. At any time, a Participant may elect to suspend or discontinue Deferred Savings by written notice. Such suspension shall be effective as of the first payroll period of the month following receipt of such written notice. A Participant who has suspended or discontinued Deferred Savings from his or her Eligible Pay may, upon not less than thirty (30) days prior written notice, resume Deferred Savings from his or her Eligible Pay as of the beginning of the first payroll period next following or coincident with any subsequent Valuation Date. 4.3 Limitation on Deferred Savings. For any Plan Year the amount of a Participant's Deferred Savings may be limited by the application of Sections 4.5 and 6.5 hereof. In addition, - 16 - Deferred Savings may be made by a Participant only to the extent that such contributions will be permitted as a federal income tax deduction for the Employer pursuant to Section 404 of the Code. 4.4 Return of Excess Deferred Savings. In the event that a Participant has, during a calendar year, contributed Deferred Savings to the Plan which, when aggregated with all other elective deferrals (within the meaning of section 402(g) of the Code) made by or on behalf of the Participant under any plan maintained by any employer during such calendar year, exceed $9,240 (or such cost-of-living adjustments to this limit as may be made by the Secretary of the Treasury pursuant to sections 402(g)(5) and 415(d) of the Code), the Participant may request a corrective distribution from the Plan by filing a written statement with the Employer on or before March 1st of the next calendar year. Such written notice shall: (i) state that the Participant has had elective deferrals made on his or her behalf for the calendar year in excess of the maximum permitted annual amount; (ii) specify the total amount of such excess elective deferrals; and (iii) specify the amount of the portion of such total excess deferrals, not in excess of the Participant's Deferred Savings under the Plan for the calendar year, which the Participant will allocate to the Plan. If the Employer receives such a notice, in proper form from the Participant on or before March 1st of the next calendar year, the Plan shall distribute to the affected Participant the amount of excess Deferred Savings designated in such notice as allocated to - 17 - the Plan, plus any earnings attributable thereto, not later than April 15 of such calendar year. Such distribution may be made without regard to any other provisions of this Plan. In addition to the distribution permitted above, in the event it is reasonably expected that Deferred Savings for any Participant, when added to any amounts required to be aggregated with Deferred Savings for such purpose, will exceed the limitation described above as then in effect, the Employer may reduce or suspend the amount of Deferred Savings such Participant is permitted to make for the remainder of such year in order to prevent the limitation set forth in this Section 4.4 from being exceeded. 4.5 Limits of Actual Deferral Percentage. The Actual Deferral Percentage for Highly Compensated Employees may not exceed the greater of: (i) One hundred twenty-five (125%) of the Actual Deferral Percentage for Non-Highly Compensated Employeess, or (ii) The lesser of two hundred percent (200%) of the Actual Deferral Percentage for Non-Highly Compensated Employees or the Actual Deferral Percentage for Non-Highly Compensated Employees plus two (2) percentage points. (The limit set forth in this paragraph (ii) shall be adjusted in accordance with Treasury Regulation section 1.401(m)-2, as necessary, to avoid duplicative use of this limit for any Highly Compensated Employee in violation of section 401(m)(9) of the Code.) 4.6 Reduction of Deferred Savings. In the event that it is determined for any Plan Year that the Actual Deferral Percentage for the Highly Compensated Employees exceeds or may be reasonably expected to exceed the limits set forth in Section 4.5 hereof, then the Deferred Savings of those Participants in the - 18 - Plan who are Highly Compensated Employees shall be reduced by, in the discretion of the Employer, either or both of the following methods: (i) distribution of the excess Deferred Savings to Highly Compensated Employees on the basis of the respective portions of the excess Deferred Savings attributable to each of such employees in a manner determined by the Employer and consistent with Code section 401(k)(8) and any Treasury Regulations thereunder, so that the limits of Section 4.5 are satisfied; or (ii) reduction or suspension, as directed by the Employer, of the amount of Deferred Savings which may be made by a Highly Compensated Employee for the remainder of such year. 4.7 Rollover Contributions and Trustee-to-Trustee Transfers. Any Participant may at any time file a written petition with the Employer requesting that the Trustee accept into the Trust Fund a Rollover Contribution from such Participant or a direct transfer from the trustee of another qualified plan. The Employer, in its sole discretion, shall determine whether such Participant shall be permitted to contribute a Rollover Contribution or have an amount transferred from another qualified plan to the Trust Fund. Any written petition filed pursuant to this Section 4.7 with respect to a Rollover Contribution shall set forth the amount of such Rollover Contribution and a statement, satisfactory to the Employer, that such contribution constitutes a Rollover Contribution as defined in this Plan. In the event a Rollover Contribution or other transfer is accepted, the Employer shall account for such amount separately and take - 19 - such other actions as may be required by law or be deemed advisable by the Employer. ARTICLE V EMPLOYER CONTRIBUTIONS ______________________ Within forty-five (45) days following each calendar month, the Employer shall contribute on behalf of each Participant an amount indicated in the schedule of Employer Contributions in Exhibit B for each Hour Worked by the Participant during such payroll month. Such Employer Contributions shall be made only from current income or accumulated earnings of the Employer. ARTICLE VI ACCOUNTS AND ALLOCATIONS ________________________ 6.1 Accounts. The Employer shall create and maintain a separate account for each Participant with adequate records to disclose the interest in the Trust Fund of each Participant. Such account shall be the Participant's 401(k) Savings Account and shall reflect each Participant's Deferred Savings and Rollover Contributions, if any. Such records shall reflect the balance in each Participant's Account, and credits and debits shall be made to such Account in the manner herein described. When appropriate, a Participant's 401(k) Savings Account shall accurately reflect a Deferred Savings Portion and a Rollover Portion. The maintenance of separate accounts and portions thereof is only for accounting purposes, and a segregation of the - 20 - assets of the Trust Fund for any such account shall not be required. 6.2 Determination of Value. Except for Company Stock, at each Valuation Date, the Trustee shall determine or cause to be determined the fair market value of all assets comprising the Trust Fund. The Trustee shall determine the fair market value of Company Stock held in the Company Stock Fund as of the last day of each Plan Year and at such other times as the Employer may direct. For purposes of determining the value of Company Stock in respect of (i) a transfer pursuant to Section 8.2(b), (ii) a withdrawal pursuant to Section 9.1 or (iii) a distribution pursuant to Section 10.1, Company Stock shall be valued at the net amount actually received by the Trustee upon sale of the shares of Company Stock, after deduction of reasonable expenses, including brokerage commissions, attributable to such sale; provided, however, the Trustee may be directed to offset the number of shares, in whole or in part, otherwise to be sold upon such transfer, withdrawal or distribution against the number of shares, in whole or in part, which would otherwise be purchased in respect to amounts contributed and allocated to the Company Stock Fund or transferred to the Company Stock Fund and, in such event, the shares so offset shall be valued at the trading price of Company stock on the date of such offset and no brokerage commission shall be charged. In the event that all shares of Company Stock to be sold, purchased or offset upon such the occurence of such events may not be sold, purchased or offset at - 21 - a single time or on a single trading date, all shares of Company Stock comprising such transactions shall be valued at the weighted average of the net amount realized or paid upon all such sales, purchases and/or offsets. In the event the Trustee is directed to sell shares of Company Stock, the Trustee shall sell such shares as soon as practical, but shall use its discretion in the timing of such sales considering such factors as market conditions and trading volume of such stock. 6.3 Credits to Participant 401(k) Savings Accounts. As of each Valuation Date, each Participant's 401(k) Savings Account shall be credited with (i) any Deferred Savings pursuant to Section 4.1 hereof and any Rollover Contributions pursuant to Section 4.7 hereof made by or on behalf of the Participant for the preceding calendar month, and (ii) the Participant's share of the investment income and any realized and unrealized capital gains of the Funds for the period commencing on the immediately preceding Valuation Date and ending on the then current Valuation Date. The respective share of the investment income and realized and unrealized capital gains of each Fund which shall be credited to each Participant's 401(k) Savings Account shall be that portion of the total investment income and realized and unrealized capital gains of the respective Fund which bears the same ratio to such total investment income and realized and unrealized capital gains that the balance of each such Participant's 401(k) Savings Account invested in such Fund bears to the total of the balances of all 401(k) Savings Accounts - 22 - invested in that respective Fund on the immediately preceding Valuation Date. 6.4 Debits to Participant 401(k) Savings Accounts. As of each Valuation Date, each Participant's 401(k) Savings Account shall be debited with any amount withdrawn by such Participant pursuant to Section 9.2, and with any amount distributed to such Participant pursuant to Section 10.1 in the preceding calendar month or deemed distributed in connection with a default under a loan as described in Section 9.6. Amounts so withdrawn or distributed shall be allocated among the Deferred Savings Portion and the Rollover Portion in accordance with the provisions of the Plan. Each Participant's 401(k) Savings Account shall also be debited as of each Valuation Date with the Participant's share of any realized or unrealized capital losses of the Funds for the period commencing on the prior Valuation Date and ending on the then current Valuation Date. The respective share of each Fund's realized and unrealized capital losses which shall be debited to each Participant's 401(k) Savings Account shall be determined in the manner specified for allocating income and gains in Section 6.3(b). 6.5 Allocation Limitations. (a) For each Plan Year, the Annual Addition to a Participant's Account under this Plan, when added to any contributions made by a Participant or the Employer to a Participant's account for such Plan Year under any other defined - 23 - contribution plan maintained by the Employer, shall not exceed the lesser of: (i) $30,000, or such other amount as may then be permitted under Treasury Regulations prescribed under section 415(d) of the Code or any successor provision; or (ii) twenty-five percent (25%) of such Participant's Section 415 Compensation during such Plan Year. (b) In the event that it is determined that the Annual Addition which would otherwise be allocated to a Participant's Accounts for any Plan Year would exceed the limits set forth in Section 6.5(a), the amount the Participant may contribute to this Plan as Deferred Savings for the remainder of such Plan Year shall be reduced by an amount necessary to reduce the Participant's Annual Addition for such Plan Year to an amount which would be consistent with Section 6.5(a) hereof, before any reduction of Employer Contributions by or on behalf of the Participant is made under this Plan or under any other defined contribution plan of the Employer. (c) Combined Limitations. In the event a Participant in the Plan is or was covered by a defined benefit plan to which the Employer contributes, the sum of the Participant's defined benefit plan fraction (as defined in section 415(e)(2) of the Code) and the Participant's defined contribution plan fraction (as defined in section 415(e)(3) of the Code) may not exceed 1.0 in any Plan Year. If, in any Plan Year, the sum of the Participant's defined benefit plan fraction and the Participant's - 24 - defined contribution plan fraction will exceed 1.0, the rate of Annual Additions permitted for such Plan Year under this Plan will be reduced so that the sum of the fractions equals 1.0. (d) Application of Limitations. If for any Plan Year as a result of a reasonable error in estimating a Participant's annual Section 415 Compensation, or such other facts and circumstances which the Internal Revenue Service will permit, a Participant's Annual Addition exceeds the limits set forth in Section 6.5(a) for such Plan Year, such excess (called the "Excess Addition") shall not be allocated to such Participant's Accounts but shall be treated in the following manner: (1) The Participant's Annual Addition (if any) from Deferred Savings, including earnings thereon, to the Plan shall be returned to the Participant and not allocated to the extent necessary to reduce the Excess Addition to zero. (2) If after the application of the above paragraph an Excess Addition remains, the Excess Addition will be held unallocated in a suspense account. The suspense account will be allocated and reallocated among Participants in the next Plan Year, and each succeeding Plan Year, if necessary, in the manner provided in Section 6.3. (3) No Employer Contributions or Deferred Savings will be made to the Plan so long as amounts remain credited to the suspense account. - 25 - (4) If a suspense account is in existence at any time during a Plan Year, it will not participate in the allocation of the Trust Fund's investment gains and losses for such year. (5) If upon termination of the Plan there remains any amount properly allocated to the suspense account, such amount shall be allocated to the Participants in the same proportion that their account balance bears to all account balances. ARTICLE VII VESTING _______ A Participant shall at all times have a fully vested and nonforfeitable interest in his or her 401(k) Savings Account. ARTICLE VIII INVESTMENTS ___________ 8.1 Investment of 401(k) Savings Accounts. Each Participant's 401(k) Savings Account shall be invested by the Trustee as directed by the Participant pursuant to Section 8.2, in increments of 1%, in one or more of the following investment funds: (i) Fixed Income Fund. A fund invested principally in investment contracts (both simple and compound interest contracts) issued by insurance companies (sometimes referred to as "GICs"), investment contracts issued by banks ("BICs"), structured or synthetic contracts issued by banks and insurance companies and other issuers ("SICs") and securities supporting such SICs, and other similar instruments which are intended to maintain a constant net asset value while permitting participant initiated benefit withdrawals. Fund assets not invested in GICs, BICs or SICs pending investment or distribution will be invested in high quality, short term liquid investments. - 26 - (ii) Equity Fund. An equity fund, or a fund of common stock or a commingled trust fund established for the collective investment of funds of employee benefit plans qualified under Section 401(a) of the Code, designed to invest primarily in growth-oriented common stock. (iii) Diversified Fund. A diversified fund, or a fund of common or preferred capital stocks, bonds, notes and/or debentures or a commingled trust fund established for the collective investment of funds of employee benefit plans qualified under Section 401(a) of the Code, excluding, however, any stocks or other securities of the Corporation, or any affiliated company designed to provide a balance between growth- oriented securities and income-oriented securities. (iv) Company Stock Fund. A fund comprised of Company Stock. (v) Stock Index Fund. A fund invested in securities representing one or more of the commonly available and utilized indexes of stock market performance. (vi) Other. Such other investment Fund or Funds as the Board of Directors may determine and announce to the Participants. The Employer may change the investment funds available under this Plan for investment from time to time on sixty (60) days' written notice to the Participants. Earnings or gains experienced with respect to any investment fund shall be reinvested in that investment fund. In the absence of Participant direction, the Trustee shall invest a Participant's Account Balance in the Fixed Income Fund as provided in Section 8.2(a). In the event of contributions, withdrawals or transfers in or out of a particular fund as of a certain date, the Administrator may debit amounts attributable to Participant(s) who have elected withdrawals or transfer out of such fund to a Participant(s) who has elected a contribution to or transfer to - 27 - such fund without selling assets attributable to such fund and use the amount of cash contributed to fund the withdrawal or transfer as directed by such other Participants; provided, however, all such debits and credits shall be at fair market value and no commission shall be paid to any party. 8.2 Investment Directions. (a) Investment of Contributions. As of the time his or her participation in the Plan commences, each Participant shall file with the Employer a written direction in a form approved by the Employer (and the Employer shall inform the Trustee), setting forth the investment fund or funds, in increments of 1%, in which amounts contributed to his or her 401(k) Savings Account shall be invested in the funds and in the manner described in Section 8.1. Thereafter, each Participant may change or amend such direction, if elected by the Participant, as often as once each month by filing with the Employer a written direction no later than thirty (30) days before the last day of the month, effective as of the first day of the month next following timely receipt by the Employer of such written direction, in a form approved for such purpose, setting forth the investment fund or funds, in increments of 1%, in which his or her Accounts are to be invested. In the event a Participant fails to file a written direction or if, for any reason such direction is deemed to be ineffective, the Participant shall be deemed to have elected to direct that all amounts contributed be invested in the Fixed Income Fund. - 28 - (b) Change in Investment of Amounts Previously Contributed. A Participant may, as often as once each month and effective as of the first day of the month next following timely receipt by the Employer of a written direction (which must be received by the Employer no later than thirty (30) days before the last day of the month), elect to transfer, in increments of 1%, amounts previously credited to 401(k) Savings Account from any of the funds described in Section 8.1 to any other of the funds described in Section 8.1. 8.3 Voting of Company Stock. The Trustee shall have the right to exercise all rights relating to Company Stock held in the Company Stock Fund. However, each Participant shall have the right to direct the Trustee concerning the manner of exercise of voting and other rights (including, but not limited to, with respect to a merger) pertaining to whole shares of Company Stock, vested and unvested, allocated to his or her Account. The Administrator shall set uniform procedures for securing directions of Participants under this Section 8.3. 8.4 Account Statements. Quarterly, the Plan Administrator shall provide each Participant with an individual statement showing the Participant's Account Balance. Such statement shall be delivered as soon as practicable following the end of each quarter. - 29 - ARTICLE IX WITHDRAWALS WHILE EMPLOYED __________________________ 9.1 Withdrawals from 401(k) Savings Accounts. (a) Withdrawals After Age 59-1/2. Subject to Section 9.2, a Participant who is age 59-1/2 or older may withdraw any amount from his or her 401(k) Savings Account, upon written request to the Employer. (b) Withdrawals Before Age 59-1/2. Subject to Section 9.2, at the discretion of the Employer, a Participant who has not attained age 59-1/2 may withdraw any amount from the Deferred Savings Portion of his or her 401(k) Savings Account, in the event of financial hardship. Financial hardship will be deemed to exist when the following conditions are satisfied: (i) the withdrawal will be used to pay immediate and heavy financial needs, including (A) deductible medical expenses incurred by the Participant, his or her spouse or any dependents; (B) down payment on the principal residence of the Participant; (C) tuition for the next twelve months of post-secondary education for the Participant, his or her spouse, or any dependents; (D) to prevent eviction of the Participant from his or her principal residence or foreclosure on the mortgage of the Participant's principal residence; or (E) such other events of immediate and heavy financial need properly established and meeting the criteria of applicable law; (ii) the amount withdrawn, less any income and penalty taxes, must be less than or equal to the amount identified by the Participant as required for the above financial needs; (iii) the Participant must have represented to the Employer that the financial need cannot be relieved through other resources reasonably available to the Participant; and (iv) the Participant will be ineligible and must acknowledge that he or she is ineligible to make - 30 - Deferred Savings or any pre-tax or after-tax contributions under this or any other plan maintained by the Employer: (A) for twelve (12) months from the date of a hardship withdrawal pursuant to this Section 9.1(b); and (B) such that the sum of any Deferred Savings made in the calendar year in which such hardship withdrawal is made pursuant to this Section 9.1(b) plus any Deferred Savings made in the calendar year after the calendar year in which the hardship withdrawal is made is less than or equal to the limit set forth in Code section 402(g)(1) as applicable in the calendar year after the calendar year in which such hardship withdrawal is made. 9.2 Withdrawals While Loan Outstanding. No withdrawal shall be permitted under Sections 9.1 by a Participant who has a loan outstanding pursuant to Section 9.5 if such withdrawal would result in the amount of the loan outstanding exceeding one-half of the balance in the Participant's Account. 9.3 Timing and Payment of Withdrawals. All withdrawals shall be made as of the first business day of the calendar month next following the forty-fifth (45th) day after written application for withdrawal is received. The amount of any withdrawal shall be paid in a single lump sum payment. 9.4 No Replacement. A Participant may not replace by subsequent repayment to the Plan any amounts withdrawn from the Participant's Accounts under Section 9.1 hereof. Notwithstanding the preceding sentence, a Participant's right to make Deferred Savings contributions shall not be impaired by any withdrawal from his or her Account under Sections 9.1. 9.5 Participant Loans. A Participant who is a "party-in-interest", as defined in Section 3(14) of ERISA (a "Party-in-Interest"), may apply for a loan in accordance with the - 31 - terms contained in this Section 9.5. A Participant is generally a Party-in-Interest if he or she is (a) a current employee of the Employer, (b) a former employee of the Employer who is a director or 10% stockholder of the Employer, or (c) a former employee of the Employer who is an officer, director or 10% stockholder of a corporation or partnership owned 50% or more by the Employer. Each loan shall be treated as an investment earmarked to the borrower's Account in the Plan. A Party-in-Interest who wishes to borrow money under this Section 9.5 must obtain from the Plan Administrator a loan application (the "Loan Application"), which contains, among other things, the eligibility criteria that must be satisfied to obtain a loan. A Party-in-Interest who satisfies the eligibility requirements described in the Loan Application may apply for a loan by completing the Loan Application and returning it to the Plan Administrator. The Plan Administrator shall review the Loan Application and shall approve or deny a loan, in its sole discretion, in a uniform and nondiscriminatory manner in accordance with the standards contained in the Loan Application. If approved, the loan shall be documented by a promissory note, a payroll withholding authorization and certain other forms executed by the Party-in-Interest, which are described in the Loan Application. The Loan Application may also contains the following information: (a) the person authorized to administer loans made under this Section; (b) the procedure for applying for loans; - 32 - (c) the basis on which loans will be approved or denied; (d) limitations on the types and amount of loans available; (e) how the interest rate will be determined; (f) the collateral required for a loan; and (g) events constituting a default and the action that will be taken by the Plan in the event of a default. The Plan Administrator is authorized to amend the Loan Application and the other forms used to document and secure loans in such manner and at such times as the Plan Administrator, in its discretion, deems necessary or appropriate. The Loan Application is incorporated herein by reference and deemed to be a part of this Plan. Loans shall be available from a Party-in-Interest's 401(k) Savings Account. Each loan shall be in an initial principal amount of no less than $500.00. The minimum monthly repayment (attributable to two (2) bi-monthly pay periods or four (4) weekly pay periods) shall be no less than $50.00. In no event shall a loan exceed the lesser of one-half of a Party-in-Interest's Account Balance in his or her Accounts or $50,000. A loan shall be secured by the Account Balance in the Plan, which security shall give the Trustee a first lien in such entire Account Balance (including all amounts that become part of such Account Balance before the loan is repaid) to the extent of the entire outstanding amount of such loan, unpaid interest thereon, and all costs of collection. A Party-in-Interest who - 33 - receives a loan against his or her Account shall not be permitted to make withdrawals if such withdrawals would cause the amount of the loan outstanding to exceed one-half of the Party-in-Interest's Account Balance. In the event of a default on the loan, as described in the Loan Application, any balance due on the loan shall immediately be due and payable and shall be repaid out of the Party-in-Interest's Balance, and his or her Account Balance shall be reduced accordingly; provided, however, that no recourse shall be available against his or her Accounts in the event of a default until distribution of such Account is permitted by law. As described in the Loan Application, each Party-in- Interest who makes an application for a loan from the Plan must execute and deliver to the Plan Administrator, by the end of the month in which a loan is requested, a written consent acknowledging that the Participant and his or her spouse, if any, are consenting to the loan and agreeing that a default on the loan may reduce the amount of any benefits payable to the Participant and his or her spouse, if any, under the Plan. Such consent must be notarized by a notary public. In addition to the limitations contained in the Loan Application, the Plan Administrator may further limit the amount of a loan made to any Party-in-Interest in order to maintain a reserve chargeable against his or her Account Balance for income taxes which may have to be withheld by the Trustee if the loan becomes a deemed distribution to the Party-in-Interest. Any such - 34 - taxes required to be withheld by the Trustee (whether or not such a reserve has been created) shall be charged to and shall reduce the Party-in-Interest's Account Balance to the extent possible, and any excess tax shall be treated as an administrative expense of the Plan which shall be reimbursed by the Party-in-Interest in question. ARTICLE X DISTRIBUTION UPON RETIREMENT OR TERMINATION OF EMPLOYMENT ____________________________ 10.1 Retirement or Termination of Employment. (a) A Participant whose employment with the Employer terminates by reason of death, Permanent Disability, Retirement, or any other reason shall be entitled to receive a distribution of such Participant's entire Account Balance in the manner described in Section 10.2 hereof. (b) A Participant will not be deemed to have a termination of employment for the purpose of Section 10.1(a) as long as such Participant is an employee of an Employer, whether as an Employee or otherwise. If an Employee ceases to be an Employee by reason of a transfer, but becomes eligible to participate in another defined contribution plan maintained by the Employer which accepts direct trustee to trustee transfers, then such employee may request the Company to transfer his or her Account Balance to the trustee of such other defined contribution plan. - 35 - 10.2 Method of Distribution. Any amount distributable under the Plan shall be paid in a single lump-sum payment. 10.3 Form of Distribution. Distributions shall be paid in cash, except that distributions from amounts invested in the Company Stock Fund shall be in the form, at the election of the Participant, of either (i) an amount of cash equal to the fair market value, determined as of the distribution date, of the shares of Company Stock distributable to the Participant, or (ii) a certificate or certificates representing the number of whole shares of Company Stock distributable to the Participant and an amount of cash equal to the fair market value, determined as of the distribution date, of any fractional shares of Company Stock so distributable. 10.4 Time of Distribution. (a) Amounts shall be paid as soon as practicable after they become payable under Section 10.1 but no later than the sixtieth (60th) day after the close of the Plan Year in which such amounts become distributable. The amount to be paid shall be determined as of the Valuation Date coinciding with or immediately preceding the date of distribution. A Participant may elect to defer receipt of his or her distribution to a time in the future but no later than the date described for commencement of distributions under Section 10.5 hereof. In the event a Participant elects to defer distribution, he or she may cause the amount to be distributed to him or her in a single lump sum (but only a single lump sum) by filing a withdrawal request - 36 - in writing no less than ninety (90) days before the proposed distribution date. (b) During any period between the date on which a Participant first becomes entitled to a distribution under Section 10.1 and the time at which the final distribution from the Participant's Accounts is made, the Participant's Accounts shall continue to be credited on each Valuation Date with its proportionate share of the investment income or loss and capital gains or losses of the Plan in accordance with Sections 6.3 and 6.4. (c) Notwithstanding the foregoing, unless a Participant elects to defer payment of his or her Account Balance to a later date pursuant to Section 10.4(a), distribution of a Participant's Account Balance shall begin not later than the sixtieth (60th) day after the end of the Plan Year which includes the latest of: (i) the date on which the Participant attains his or her Normal Retirement Date; (ii) the tenth (10th) anniversary of the date on which the Participant commenced participation in the Plan; or (iii) the date of the Participant terminates his or her service with the Employer. (d) Notwithstanding any provision of this Plan to the contrary, if the value of a Participant's Account Balance is in excess of $3,500, including all prior distributions, distribution of such Account Balance shall not be made prior to age sixty-five (65) unless (i) the Participant has consented in writing to such - 37 - distribution, or (ii) the distribution is by reason of the Participant's death. 10.5 Distributions at Age 70-1/2. Notwithstanding any other provision in this Article I, (i) the entire Account Balance of a Participant who had then or previously retired shall be distributed in a single lump sum on the date the Participant attains age 70 1/2; and (ii) the account balance of a participant who has not then retired will be distributed or commence to be distributed in an annual amount no less than necessary to satisfy Section 401(a)(9) of the Code no later than the first day of April of the calendar year which follows the calendar year in which the Participant attains age 70-1/2, regardless of whether such Participant has then retired from his or her service with the Employer or not. 10.6 Beneficiary. (a) A Participant may file with the Employer a written designation of a beneficiary or beneficiaries with respect to the assets in the Accounts of the Participant. The written designation of a beneficiary filed with the Employer may be changed or revoked by the sole action of the Participant. Upon the death of a Participant, the assets in his or her Accounts shall be distributed to the beneficiary or beneficiaries so designated. In the absence of a designation, the beneficiary of a Participant shall be his or her surviving spouse, if any; otherwise his or her surviving children and issue of deceased children, if any; otherwise his or her personal representative, - 38 - if any; and if none, those persons entitled to his or her estate under intestate laws of the state in which the Participant is domiciled at the time of his or her death. All beneficiary designations filed with the Employer pursuant to the Prior Plan shall remain in effect, notwithstanding the amendment and restatement of the Prior Plan, until changed or revoked by the sole action of the Participant who filed such designation. (b) Notwithstanding any provision of this Plan to the contrary, any beneficiary designation or change by a Participant which would result in the designation of a beneficiary other than the Participant's spouse shall not be effective unless the Participant's spouse consents in writing. The spouse's consent must be witnessed by a notary public. If the Participant establishes to the satisfaction of the Employer that such written consent cannot be obtained because there is no spouse or the spouse cannot be located, the written consent of the Participant will be deemed sufficient. A consent will be valid only with respect to the spouse who signs the consent, or in the event of a deemed consent, the designated spouse. A revocation of a prior non-spouse designation or change may be made by the Participant without the consent of the spouse at any time before the commencement of benefits. The number of revocations shall not be limited. - 39 - ARTICLE XI ADMINISTRATION OF THE PLAN __________________________ 11.1 Board of Directors' Responsibilities. (a) The Board of Directors shall have overall responsibility for the establishment, amendment, termination, administration and operation of the Plan, which responsibility it may discharge by the appointment of "named fiduciaries" pursuant to Section 11.1(b). (b) The Board of Directors shall discharge its responsibility by the appointment and removal (with or without cause) of: (i) The Employer, to which is delegated the overall responsibility for the administration and operation of the Plan, and (ii) The Trustee, to which is delegated the responsibility for the investment and safekeeping of the assets of the Plan. 11.2 Employer's Duties. The Employer on behalf of the Participants and all other beneficiaries of the Plan and the Trust Fund shall enforce the Plan and the Trust Agreement in accordance with the terms of the Plan and the Trust Agreement and, in its sole and absolute discretion, shall have all powers necessary to accomplish that purpose, including, but not by way of limitation, the following: (i) To issue rules and regulations necessary for the proper administration of the Plan and to change, alter, or amend such rules and regulations; (ii) To construe the Plan and Trust Agreement; - 40 - (iii) To determine all questions arising in the administration of the Plan, including those relating to eligibility, rights of Participants and their beneficiaries, and entitlement to payment of Accounts; (iv) To compute and certify to the Trustee, unless delegated to the Trustee, the amount of benefits payable to Participants or their beneficiaries; (v) To authorize all disbursements of the Trustee from the Trust Fund in accordance with the provisions of the Plan; (vi) To employ and suitably compensate such accountants, attorneys and other persons to render advice, and clerical employees, as it may deem necessary to the performance of its duties; (vii) To disseminate to Employees information concerning Plan standards and requirements, including those concerning eligibility, and to notify the Employer whenever Employees become eligible to participate in the Plan; (viii) To keep records relating to Participants and other matters applicable to the Plan, provided that the Company may, with the consent of the Trustee, by a separate written agreement, delegate such duty to the Trustee and/or Plan Administrator; (ix) To make available to Participants, upon request for examination during business hours, such records as pertain exclusively to the examining Participant; (x) To prescribe procedures to be followed by Participants and beneficiaries in claiming benefits; (xi) To develop and make available forms for use by Participants and beneficiaries for making elections provided by the Plan; (xii) To make available for inspection and to provide upon request at such charge as may be permitted and determined by the Company, documents and instruments required to be disclosed by the Act; and (xiii) To determine, from time to time, the investment funds available under the Plan. - 41 - 11.3 Trustee's Duties. The powers, duties and responsibilities of a Trustee shall be as stated in the Trust Agreement, subject to any limitations imposed by this Plan, the Act, or other applicable law. 11.4 Delegation of Fiduciary Responsibility. (a) The Company and the Trustee shall have the authority to delegate, from time to time, by written instrument, all or any part of their responsibilities under the Plan to such person or persons or other entities as they may deem advisable and in the same manner to revoke any such delegation of responsibility. Upon such delegation, any action of the delegatee in the exercise of such delegated responsibilities shall have the same force and effect for all purposes hereunder as if such action had been taken by the Company or Trustee, as the case may be. Neither the Company nor the Trustee shall be liable for any acts or omissions of any such delegatee. In particular, the Company may delegate the authority, power and duty regarding day to day administration of the Plan to a person or group (who may be employees of the Company) and, if such is delegated, such person or persons shall be referred to as the Plan Administrator. In the absence of such delegation, the Company shall be the Plan Administrator. The delegatee shall report periodically to the Company or the Trustee, as the case may be, concerning the discharge of the delegated responsibilities. - 42 - (b) Fiduciary duties and responsibilities which have been delegated pursuant to the terms of the Plan or Trust or paragraph (a) above are intended to limit the liability of the Company and Trustee in accordance with the provisions of section 405(c)(2) of the Act. 11.5 Administrative Bonding. The Employer and Trustee (and the Plan Administrator, if appointed) shall serve without bond (except as otherwise required by federal law) and without compensation for their services as such (provided that any member of the Employer, the Plan Administrator or the Trustee who is not employed by an Employer on a substantially full-time basis may be compensated). 11.6 Expenses of the Plan. The expenses incurred by the Company, Plan Administrator and/or the Trustee in the administration of the Plan shall be paid from the Trust Fund, except to the extent that the Employer, in its discretion, decides to pay such expenses. 11.7 Indemnification. To the extent permitted by the Act, the Employer shall indemnify the members of the Employer, the Plan Administrator and Trustee (other than a trustee who is not an Employee of an Employer) against any liabilities incurred by them in the exercise and performance on their powers and duties under the Plan and Trust Agreement by the purchase of insurance or otherwise. The indemnification which may be provided under this Section 11.7 shall not be deemed exclusive of - 43 - any other rights to which the members of the Employer, the Plan Administrator or Trustee may be entitled under law or any by-law or agreement. ARTICLE XII AMENDMENT AND TERMINATION _________________________ 12.1 Authority. The Board of Directors shall have the right to amend or terminate this Plan at any time; provided, however, that, subject to the following sentence, no such action shall be effective to permit any part of the corpus or income of the Trust Fund established in connection herewith to be used for, or diverted to, purposes other than the exclusive benefit of the Participants and their beneficiaries, and defraying the reasonable expenses of administering the Plan. The Employer retains the right to amend, suspend or terminate the Plan at any time, retroactively in effect if necessary, to obtain an initial qualification letter that the Plan meets the requirements of section 401(a) of the Code, and that the Trust Fund meets the requirements of section 501(a) of the Code, so that the Plan and the Trust Fund are qualified and exempt, respectively, or to meet any of the requirements of the Act, or the corresponding provisions of any subsequent or amendatory Federal legislation which is applicable. 12.2 Distribution Upon Termination. In the event that the Plan shall be completely or partially terminated, the Company shall, after making proper governmental notification required by the Act and subject to the requirements of the Act, direct either - 44 - (i) that the Trustee continue to hold the Account of each Participant in the Trust Fund in accordance with the provisions of this Plan without regard to such termination until the entire Account Balance of each Participant has been distributed in accordance with such provisions, or (ii) that the Trustee immediately distribute to each Participant their respective Account Balance as a lump sum. ARTICLE XIII DIRECT ROLLOVERS ________________ 13.1 Direct Rollovers. This Article applies to distributions made on or after January 1, 1993. Notwithstanding any provision of the Plan to the contrary that would otherwise limit a Distributee's election under this Section, a Distributee may elect, at the time and in the manner prescribed by the Company, to have any portion of an Eligible Rollover Distribution paid directly to an Eligible Retirement Plan specified by the Distributee in a Direct Rollover. For the purposes of this Article, the following capitalized terms shall have the following meanings: (a) "Direct Rollover" means a payment by the Plan to the Eligible Retirement Plan specified by the Distributee. (b) "Distributee" means an Employee or former Employee. In addition, the Employee's or former Employee's surviving spouse and the Employee's or former Employee's spouse or former spouse who is the alternate payee under a qualified domestic relations order, as defined in Section 414(p) of the - 45 - Code, are Distributees with regard to the interest of the spouse or former spouse. (c) "Eligible Retirement Plan" means an individual retirement account described in Section 408(a) of the Code, an individual retirement annuity described in Section 408(b) of the Code, an annuity plan described in Section 403(a) of the Code, or a qualified trust described in Section 401(a) of the Code, that accepts the Distributee's Eligible Rollover Distribution. However, in the case of an Eligible Rollover Distribution to the surviving spouse, an Eligible Retirement Plan is an individual retirement plan or individual retirement annuity. (d) "Eligible Rollover Distribution" means any distribution of all or any portion of the balance to the credit of the Distributee, except that an Eligible Rollover Distribution does not include: any distribution that is one of a series of substantially equal periodic payments (not less frequently than annually) made for life (or life expectancy) of the Distributee or the joint lives (or joint life expectancies) of the Distributee and the Distributee's designated Beneficiary, or for a specified period of ten years or more; any distribution to the extent such distribution is required under Section 401(a)(9) of the Code; and the portion of any distribution that is not includable in gross income (determined without regard to the exclusion for net unrealized appreciation with respect to employer securities). - 46 - ARTICLE XIV MISCELLANEOUS _____________ 14.1 Incapacity of Recipient of Benefits. If any person entitled to receive benefits shall be physically or mentally incapable of receiving or acknowledging receipt of any payment of benefits, the Trustee, upon the receipt of satisfactory evidence that such incapacitated person is so incapacitated and that another person or institution is maintaining him and that no guardian or committee has been appointed for him, may provide for such payment of benefits hereunder to such person or institution so maintaining him, and any such payments so made shall be deemed for every purpose to have been made to such incapacitated person. 14.2 Merger, Consolidation or Discontinuance. In the event that the Employer shall at any time become insolvent, or in the event of the dissolution of, or a merger or consolidation involving the Employer, without any provision being made for the continuance of the Plan, the Plan and the Trust Fund thereunder shall terminate and the Trustee shall proceed in the manner provided herein in the event of a termination of the Plan. In the event of a dissolution, merger or consolidation involving the Employer, provisions may be made by the Employer's successor, if any, for the continuance of the Plan. In such event, said successor shall be substituted hereunder in place of the Employer by proper action of such successor. - 47 - 14.3 Merger or Consolidation of the Plan. In the case of any merger or consolidation of the Plan with, or transfer of assets or liabilities of the Plan to, any other plan, each Participant or beneficiary in the Plan shall (if the Plan had then terminated) receive a benefit hereunder immediately after such merger, consolidation or transfer which is no less than the benefit he or she would have been entitled to receive immediately before such merger, consolidation or transfer (if the Plan had then terminated). 14.4 Assets in Trust Fund Owned by Trustee. Nothing contained herein shall be deemed to give any Participant or his or her beneficiary any interest in any specific property of the Trust Fund or any right in the Trust Fund, other than the right to receive distributions as are expressly provided for in this Plan. 14.5 Employment Rights Not Affected by the Plan. Participation in this Plan shall not give any right to any Employee to be retained in the employ of the Employer nor shall it interfere with the right of the Employer to discharge any Employee and to deal with him without regard to the existence of this Plan and without regard to the effect that such treatment might have upon him as a Participant in this Plan. 14.6 Trust Fund for Sole Benefit of Participants and Beneficiaries. The income and principal of the Trust Fund are for the sole use and benefit of the Participants and beneficiaries of this Plan, and, to the extent permitted by law, - 48 - shall be free, clear, and discharged of and from, and are not to be in any way liable for, debts, contracts or agreements, now contracted or which may hereafter be contracted, and from all claims and liabilities now or hereafter incurred by any Participant or beneficiary. Other than as permitted by the Act, and as expressly set forth in the Plan, no contributions made by Employer to the Trust Fund under the Plan shall at any time revert to the Employer. No Participant or beneficiary of a Participant under this Plan shall have the right to commute, withdraw, surrender, encumber, alienate or assign any of the income or principal of the Trust Fund or any of the benefits to become due unto any person or persons under the agreement of trust or this Plan except as specifically provided by the terms of the Trust Agreement or this Plan. The limitations contained in this Section 13.6 shall apply to the creation, assignment or recognition of a right to any benefit payable with respect to a Participant pursuant to a domestic relations order unless such order is determined to be a qualified domestic relations order as defined in section 414(p) of the Code, or is a domestic relations order entered before January 1, 1985. 14.7 Information to be Furnished by the Employer. The Employer shall furnish to the Employer and the Trustee such information in the Employer's possession as the Employer and the Trustee shall require from time to time to perform their duties under the Plan and the Trust Agreement. - 49 - 14.8 Service of Process. The Employer is the designated agent of the Plan for the service of process in connection with all matters affecting the Plan. 14.9 Appeals Procedure. Any dispute between the Employer and a Participant as to a Participant's eligibility for an allocation or the amount of his or her Accounts, is to be resolved by the Employer and the United Steelworkers of America, or the Employer and the United Steelworkers of America may submit it to arbitration. 14.10 Governing Law. This Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania to the extent that any of such laws have not been preempted by the Act or other Federal law. - 50 - EX-5 3 Exhibit 5 [ALLEGHENY LUDLUM CORPORATION LOGO] Jon D. Walton Vice President - General Counsel and Secretary 412-394-2836 April 9, 1996 Allegheny Ludlum Corporation 1000 Six PPG Place Pittsburgh, PA 15222-5479 Re: Registration Statement on Form S-8 Ladies and Gentlemen: I am Vice President - General Counsel and Secretary of Allegheny Ludlum Corporation, a Pennsylvania corporation (the "Company") and in such capacity, I have acted as counsel for the Company in connection with the Registration Statement on Form S-8 (the "Registration Statement") to be filed with the Securities and Exchange Commission in connection with the registration pursuant to the Securities Act of 1933, as amended (the "Act") of the issuance of up to 100,000 shares (the "Shares") of Common Stock, par value $0.10 per share, of the Company, pursuant to the 401(k) Savings Account Plan (the "Plan"). I am furnishing this opinion for use in accordance with Item 601(b)(5) of Regulation S-K promulgated under the Act, for filing as Exhibit 5 to the Registration Statement. In preparation for this opinion, I have examined (a) the Plan, (b) the Registration Statement and (c) the corporate documents of the Company. I am familiar with the proceedings taken by the Company in connection with the authorization, registration, issuance and sale of the Shares pursuant to the Plan. Based on the foregoing, I am of the opinion that the Shares have been duly authorized for issuance and sale pursuant to the Plan, and when issued and delivered by the Company pursuant to the Plan, the Shares will be validly issued, fully paid and nonassessable. Allegheny Ludlum Corporation April 9, 1996 Page 2 This opinion is rendered as of the date hereof, and I have not undertaken to supplement this opinion with respect to factual matters or changes in the law that may occur hereafter. I consent to the use of this opinion as an Exhibit to the Registration Statement and to the reference to the undersigned in the Registration Statement. Very truly yours, /s/ Jon D. Walton Jon D. Walton JDW/pt MEM978.b EX-23 4 Exhibit 23(b) We consent to the reference to our firm under the caption "Item 3.- Incorporation of Documents by Reference" in the Registration Statement on Form S-8 of Allegheny Ludlum Corporation for the registration of 100,000 shares of its common stock and to the incorporation by reference therein of our report dated January 30, 1996, with respect to the consolidated financial statements of Allegheny Ludlum Corporation incorporated by reference in its Form 10-K for the fiscal year ended December 31, 1995 and the related financial statement schedules included therein, filed with the Securities and Exchange Commission. Ernst & Young LLP Pittsburgh, Pennsylvania April 9, 1996 -----END PRIVACY-ENHANCED MESSAGE-----