10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2005
OR

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the Transition Period From _____ to _____

Commission File Number 1-12001

ALLEGHENY TECHNOLOGIES INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware	25-1792394
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

1000 Six PPG Place
Pittsburgh, Pennsylvania	15222-5479
(Address of Principal Executive Offices)	(Zip Code)

(412) 394-2800

(Registrant’s telephone number, including area code)

     Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes þ No o

     Indicate by check mark whether the registrant is an accelerated filer (as defined by Rule 12b-2 of the Securities Exchange Act of 1934).

Yes þ No o

At April 29, 2005, the registrant had outstanding 96,520,325 shares of its Common Stock.

ALLEGHENY TECHNOLOGIES INCORPORATED
SEC FORM 10-Q
QUARTER ENDED MARCH 31, 2005

INDEX

	Page No.
PART I. — FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets		3
Consolidated Statements of Operations		4
Consolidated Statements of Cash Flows		5
Notes to Consolidated Financial Statements		6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 3. Quantitative and Qualitative Disclosures About Market Risk		32
Item 4. Controls and Procedures		34
PART II. — OTHER INFORMATION
Item 1. Legal Proceedings		34
Item 2. Change in Securities, Use of Proceeds And Issuer Purchases of Equity Securities		35
Item 4. Submission of Matters to a Vote of Security Holders		35
Item 6. Exhibits		36
SIGNATURES		37
EXHIBIT INDEX		38
Exhibit 10.1
Exhibit 10.2
Exhibit 10.3
Exhibit 10.4
Exhibit 10.5
Exhibit 10.6
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share amounts)

	March 31,			December 31,
	2005			2004
	(Unaudited)			(Audited)
ASSETS
Cash and cash equivalents	$	231.2		$	250.8
Accounts receivable, net		425.6			357.9
Inventories, net		568.1			513.0
Prepaid expenses and other current assets		48.0			38.5
Total Current Assets		1,272.9			1,160.2
Property, plant and equipment, net		709.5			718.3
Cost in excess of net assets acquired		206.6			205.3
Deferred pension asset		122.3			122.3
Deferred income taxes		53.4			53.0
Other assets		61.4			56.6
Total Assets	$	2,426.1		$	2,315.7
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	281.4		$	271.2
Accrued liabilities		207.0			192.2
Short-term debt and current portion of long-term debt		26.7			29.4
Total Current Liabilities		515.1			492.8
Long-term debt		549.6			553.3
Accrued postretirement benefits		470.5			472.7
Pension liabilities		255.6			240.9
Other long-term liabilities		109.5			130.1
Total Liabilities		1,900.3			1,889.8
Stockholders’ Equity:
Preferred stock, par value $0.10: authorized- 50,000,000 shares; issued-none		—			—
Common stock, par value $0.10, authorized-500,000,000 shares; issued-98,951,490 shares at March 31, 2005 and December 31, 2004; outstanding-96,395,876 shares at March 31, 2005 and 95,782,011 shares at December 31, 2004		9.9			9.9
Additional paid-in capital		503.8			481.2
Retained earnings		388.3			345.5
Treasury stock: 2,555,614 shares at March 31, 2005 and 3,169,479 shares at December 31, 2004		(63.8	)		(79.4	)
Accumulated other comprehensive loss, net of tax		(312.4	)		(331.3	)
Total Stockholders’ Equity		525.8			425.9
Total Liabilities and Stockholders’ Equity	$	2,426.1		$	2,315.7

The accompanying notes are an integral part of these statements.

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ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions except per share amounts)

(Unaudited)

	Three Months Ended
	March 31,
	2005			2004
Sales	$	879.6		$	577.8
Costs and expenses:
Cost of sales		738.3			567.4
Selling and administrative expenses		66.8			53.7
Income (loss) before interest, other income (expense) and income taxes		74.5			(43.3	)
Interest expense, net		(10.4	)		(8.2	)
Other income (expense), net		(0.8	)		1.1
Income (loss) before income tax provision		63.3			(50.4	)
Income tax provision		2.3			—
Net income (loss)	$	61.0		$	(50.4	)
Basic net income (loss) per common share	$	0.64		$	(0.63	)
Diluted net income (loss) per common share	$	0.61		$	(0.63	)
Dividends declared per common share	$	0.06		$	0.06

The accompanying notes are an integral part of these statements.

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ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Three Months Ended
	March 31,
	2005			2004
Operating Activities:
Net income (loss)	$	61.0		$	(50.4	)
Adjustments to reconcile net income (loss) to net cash used in operating activities:
Depreciation and amortization		17.8			18.8
Gains on sales of investments and businesses		—			(1.6	)
Deferred income taxes		(0.4	)		—
Change in operating assets and liabilities:
Accounts receivable		(67.7	)		(62.2	)
Inventories		(55.1	)		(7.2	)
Pension assets and liabilities		14.7			17.5
Accounts payable		10.2			47.0
Postretirement benefits		(2.2	)		10.8
Accrued liabilities and other		17.0			27.1
Cash used in operating activities		(4.7	)		(0.2	)
Investing Activities:
Purchases of property, plant and equipment		(7.2	)		(12.1	)
Asset disposals and other		(0.6	)		1.2
Cash used in investing activities		(7.8	)		(10.9	)
Financing Activities:
Payments on long-term debt and capital leases		(12.5	)		(12.8	)
Borrowings on long-term debt and capital leases		5.2			8.5
Net borrowings under credit facilities		1.5			1.2
Net decrease in debt		(5.8	)		(3.1	)
Exercises of stock options		4.5			1.9
Dividends paid		(5.8	)		—
Cash used in financing activities		(7.1	)		(1.2	)
Decrease in cash and cash equivalents		(19.6	)		(12.3	)
Cash and cash equivalents at beginning of the year		250.8			79.6
Cash and cash equivalents at end of period	$	231.2		$	67.3

The accompanying notes are an integral part of these statements.

5

ALLEGHENY TECHNOLOGIES INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies

Basis of Presentation

     The interim consolidated financial statements include the accounts of Allegheny Technologies Incorporated and its subsidiaries. Unless the context requires otherwise, “Allegheny Technologies”, “ATI” and “the Company” refer to Allegheny Technologies Incorporated and its subsidiaries.

     These unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions for Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and note disclosures required by accounting principles generally accepted in the United States for complete financial statements. In management’s opinion, all adjustments (which include only normal recurring adjustments) considered necessary for a fair presentation have been included. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s 2004 Annual Report on Form 10-K. The results of operations for these interim periods are not necessarily indicative of the operating results for any future period. Certain amounts from prior periods have been reclassified to conform with the current presentation.

Stock-based Compensation

     Effective January 1, 2005, the Company adopted Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”). Under the revised standard, companies may no longer account for share-based compensation transactions, such as stock options, restricted stock, and potential payments under programs such as the Company’s Total Shareholder Return (“TSR”) plans, using the intrinsic value method as defined in APB Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”). Instead, companies are required to account for such equity transactions using an approach in which the fair value of an award is estimated at the date of grant and recognized as an expense over the requisite service period. Compensation expense is adjusted for equity awards that do not vest because service or performance conditions are not satisfied. However, compensation expense already recognized is not adjusted if market conditions are not met, such as the Company’s total shareholder return performance relative to a peer group under the Company’s TSR plans, or for stock options which expire “out-of-the-money”. The new standard was adopted using the modified prospective method and beginning with the first quarter 2005, the Company will reflect compensation expense in accordance with the SFAS 123R transition provisions. Under the modified prospective method, the effect of the standard is recognized in the period of adoption and in future periods. Prior periods are not restated to reflect the impact of adopting the new standard.

     First quarter 2005 compensation expense related to share-based incentive plans was $2.7 million compared to $1.2 million in the first quarter of 2004. First quarter 2005 share-based compensation expense includes $0.8 million related to expensing of stock options. Net income for the year ended December 31, 2004 would have been $9.6 million higher, at $29.4 million, had share-based compensation expense been accounted for under SFAS 123R, and net income per diluted share for the year ended December 31, 2004 would have been $0.33 under FAS 123R, rather than $0.22. The following table illustrates for each quarter of 2004 the effect on operating results and per share information had the

6

Company accounted for share-based compensation in accordance SFAS 123R during those periods.

In millions, except per share amounts (unaudited):

	Quarter Ended												Year Ended
	3/31/04			6/30/04			9/30/04			12/31/04			12/31/04
Net income (loss) as reported	$	(50.4	)	$	26.6		$	8.6		$	35.0		$	19.8
Add: Share-based compensation expense included in net income (loss) under APB 25, net of tax		1.2			8.9			1.8			8.7			20.6
Deduct: Net impact of SFAS 123R, net of tax		(2.4	)		(2.1	)		(2.1	)		(4.4	)		(11.0	)
Pro forma net income (loss)	$	(51.6	)	$	33.4		$	8.3		$	39.3		$	29.4
Net income (loss) per common share:
Basic – as reported	$	(0.63	)	$	0.33		$	0.10		$	0.37		$	0.23
Basic – pro forma	$	(0.64	)	$	0.41		$	0.09		$	0.41		$	0.34
Diluted – as reported	$	(0.63	)	$	0.31		$	0.09		$	0.35		$	0.22
Diluted – pro forma	$	(0.64	)	$	0.39		$	0.09		$	0.39		$	0.33

There was no effect to the statement of cash flows from the adoption of SFAS 123R due to the valuation allowance established for the Company’s net deferred tax asset.

     The Company sponsors three principal share-based incentive compensation programs. The general terms of each arrangement, the method of estimating fair value for each arrangement and 2005 activity is reported below.

Stock option awards: Options to employees were granted with graded vesting in one-third increments over three years, based on term of service. Fair value as calculated under Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation”, is used to recognize expense upon adoption of SFAS 123R. Fair values for each grant were estimated using a Black-Scholes-Merton valuation model which utilized assumptions for stock price volatility, estimated life based on historical option exercise patterns, and projected dividends. The Company has not granted any stock options, other than grants to non-employee directors, since 2003. Compensation expense related to stock option awards was $0.8 million for the first quarter 2005. Approximately $1.7 million of unrecognized compensation expense related to unvested stock option awards will be recognized, in declining amounts, through the first quarter 2006, when all existing grants will have vested.

Nonvested stock awards: Awards of nonvested stock are granted with either performance and/or service conditions. In certain grants, nonvested shares participate in cash dividends during the restriction period. In other grants, dividends are paid in the form of additional shares of nonvested stock, subject to the same vesting conditions and dividend treatment as the underlying shares. Fair value is measured based on the stock price at the grant date, adjusted for non-participating dividends, as applicable, based on the current dividend rate. In the first quarter 2005, the Company granted 151,902 shares of nonvested stock with a grant date fair value per share of $22.175, for a total grant date fair value of $3.4 million. Compensation expense related to all nonvested stock awards was $0.7 million for the 2005 first quarter. Approximately $5.5 million of unrecognized fair value

7

compensation expense relating to nonvested stock awards is expected to be recognized through 2007 based on estimates of attaining performance vesting criteria.

TSR plan awards: Awards under the TSR plans are granted at a target number of shares, and vest based on the measured return of the Company’s stock price and dividend performance at the end of three-year periods compared to the stock price and dividend performance of a group of industry peers. The 2003-2005 and 2004-2006 TSR plans performance periods were in effect at the adoption of SFAS 123R. In the first quarter 2005, the Company initiated a 2005-2007 TSR plan, with 166,749 shares as the target level award. The actual number of shares awarded may range from a minimum of zero to a maximum of two times target, in the case of the 2003-2005 TSR plan award, or three times target, in the case of the 2004-2006 and 2005-2007 TSR plans awards. Fair values for the TSR plans awards were estimated using Monte Carlo simulations of historical stock price correlation, projected dividends yields and other variables over three-year time horizons matching the TSR plans performance periods. Compensation expense of $1.2 million was recognized in the first quarter 2005 for the fair value of TSR plan awards.

The estimated fair value of each TSR plan award, including the projected shares to be awarded, and compensation expense to be recognized subsequent to the adoption of SFAS 123R for TSR plan awards was as follows:

In millions, except for shares (unaudited):

			March 31, 2005
	TSR Award		Unrecognized		Minimum		Target		Maximum
TSR Award Grant	Fair Value		Compensation		Shares		Shares		Shares
2003-2005	$	3.4	$	0.9		0		538,777		1,077,554
2004-2006	$	4.6	$	2.7		0		347,042		1,041,126
2005-2007	$	4.9	$	4.5		0		166,749		500,247
Total			$	8.1		0		1,052,568		2,618,927

Awards earned under share-based incentive compensation programs will be first paid with shares held in treasury with any additional required share payments made by the issuance of shares.

Recent Accounting Pronouncement

     In March 2005, the Financial Accounting Standards Board issued FASB Interpretation No. 47, “Accounting for Contingent Asset Retirement Obligations” (“FIN 47”), an interpretation of FASB Statement No. 143, “Asset Retirement Obligations” (“SFAS 143”). FIN 47 clarifies that the term “conditional asset retirement obligation” as used in SFAS 143 refers to a legal obligation to perform an asset retirement activity in which the timing and (or) method of settlement are conditional on a future event that may or may not be within the control of the entity. An entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated, even if conditional on a future event. FIN 47 is effective no later than the end of fiscal years ending after December 15, 2005, or ATI’s fiscal year ending December 31, 2005. For existing contingent asset retirement obligations which are determined to be recognizable under FIN 47, the effect of applying FIN 47 would be recognized as a cumulative effect of a change in accounting principle. The Company is evaluating the status of its conditional asset retirement obligations, and has not determined whether sufficient

8

information exists with regard to the timing and method of settlement to reasonably estimate the obligations.

Note 2. Acquisitions

     On June 1, 2004, a subsidiary of the Company acquired substantially all of the assets of J&L Specialty Steel, LLC (“J&L”), a producer of flat-rolled stainless steel products with operations in Midland, Pennsylvania and Louisville, Ohio, for $67.0 million in total consideration, including the assumption of certain current liabilities, and which is subject to final adjustment. The acquired operations were integrated into the Allegheny Ludlum operation, which is part of the Company’s Flat-Rolled Products business segment. The purchase price included payment of $7.5 million at closing, the issuance to the seller of a non-interest bearing $7.5 million promissory note that matures on June 1, 2005, and the issuance to the seller of a promissory note in the principal amount of $52.0 million, which is secured by the J&L property, plant and equipment acquired, and which is subject to adjustment on the terms set forth in the asset purchase agreement and has a final maturity of July 1, 2011. The purchase price is expected to be finalized in the 2005 second quarter, pending agreement between buyer and seller over certain working capital adjustments.

Note 3. Inventories

     Inventories at March 31, 2005 and December 31, 2004 were as follows (in millions):

	March 31,			December 31,
	2005			2004
	(unaudited)			(audited)
Raw materials and supplies	$	95.5		$	70.8
Work-in-process		596.5			573.6
Finished goods		111.5			99.1
Total inventories at current cost		803.5			743.5
Less allowances to reduce current cost values to LIFO basis		(229.6	)		(223.9	)
Progress payments		(5.8	)		(6.6	)
Total inventories, net	$	568.1		$	513.0

     Inventories are stated at the lower of cost (last-in, first-out (“LIFO”), first-in, first-out (“FIFO”), and average cost methods) or market, less progress payments. Most of the Company’s inventory is valued utilizing the LIFO costing methodology. Inventory of the Company’s non-U.S. operations is valued using average cost or FIFO methods. The effect of using the LIFO methodology to value inventory, rather than FIFO, increased cost of sales by $5.7 million for the first three months of 2005 compared to $48.1 million for the first three months of 2004.

9

Note 4. Supplemental Financial Statement Information

     Property, plant and equipment at March 31, 2005 and December 31, 2004 were as follows (in millions):

	March 31,			December 31,
	2005			2004
	(unaudited)			(audited)
Land	$	24.0		$	24.1
Buildings		230.3			231.4
Equipment and leasehold improvements		1,555.1			1,562.4
		1,809.4			1,817.9
Accumulated depreciation and amortization		(1,099.9	)		(1,099.6	)
Total property, plant and equipment, net	$	709.5		$	718.3

     Reserves for restructuring charges recorded in prior years involving future payments were approximately $5 million at March 31, 2005 and $6 million at December 31, 2004. The reduction in reserves resulted from cash payments to meet severance and lease payment obligations.

Note 5. Debt

     Debt at March 31, 2005 and December 31, 2004 was as follows (in millions):

	March 31,			December 31,
	2005			2004
	(unaudited)			(audited)
Allegheny Technologies $300 million 8.375% Notes due 2011, net (a)	$	308.2		$	308.4
Allegheny Ludlum 6.95% debentures, due 2025		150.0			150.0
Promissory notes for J&L asset acquisition		59.5			59.5
Domestic Bank Group $325 million secured credit agreement		—			—
Foreign credit agreements		34.7			38.6
Industrial revenue bonds, due through 2016		12.7			12.8
Capitalized leases and other		11.2			13.4
		576.3			582.7
Short-term debt and current portion of long- term debt		(26.7	)		(29.4	)
Total long-term debt	$	549.6		$	553.3

(a) Includes fair value adjustments for settled interest rate swap contracts of $13.3 million at March 31, 2005 and $13.7 million at December 31, 2004.

     The Company has a $325 million four-year senior secured domestic revolving credit facility (“the facility”), which expires in June 2007, and which is secured by all accounts receivable and inventory of its U.S. operations, and includes capacity for up to $175 million in letters of credit. As of March 31, 2005 there had been no borrowings made under the domestic credit facilities, although a portion of the facility is used to support approximately $123 million in letters of credit.

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Note 6. Per Share Information

     The following table sets forth the computation of basic and diluted net income (loss) per common share (in millions, except share and per share amounts):

	Three Months Ended
	March 31,
	2005		2004
	(unaudited)
Numerator for basic and diluted net income (loss) per common share – net income (loss)	$	61.0	$	(50.4	)
Denominator:
Denominator for basic net income (loss) per common share-weighted average shares		95.4		80.4
Effect of dilutive securities:
Option equivalents		1.9		—
Contingently issuable shares		2.6		—
Denominator for diluted net income (loss) per common share – adjusted weighted average shares and assumed conversions		99.9		80.4
Basic net income (loss) per common share	$	0.64	$	(0.63	)
Diluted net income (loss) per common share	$	0.61	$	(0.63	)

     Weighted average shares issuable upon the exercise of stock options which were antidilutive, and thus not included in the calculation, were 0.4 million in 2005 and 6.9 million in 2004.

Note 7. Comprehensive Income (Loss)

     The components of comprehensive income (loss), net of tax, were as follows (in millions):

	Three Months Ended
	March 31,
	2005		2004
	(unaudited)
Net income (loss)	$	61.0	$	(50.4	)
Foreign currency translation gains		0.4		19.5
Unrealized gains (losses) on energy, raw materials and currency hedges		18.5		(7.9	)
		18.9		11.6
Comprehensive income (loss)	$	79.9	$	(38.8	)

Note 8. Income Taxes

     First quarter 2005 results include a provision for income taxes of $2.3 million, which is principally related to foreign and state income taxes. Results of operations for the 2005 first quarter and for the 2004 period do not include an income tax provision or benefit for current or deferred taxes primarily as a result of the continuing uncertainty regarding full utilization of the Company’s net deferred tax asset, including available net operating loss carryforwards, in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes”. The Company is required to maintain a valuation allowance for the majority of its deferred tax assets until a realization event occurs to support reversal of all, or a portion of, the allowance.

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Note 9. Pension Plans and Other Postretirement Benefits

     The Company has defined benefit pension plans and defined contribution plans covering substantially all employees. Benefits under the defined benefit pension plans are generally based on years of service and/or final average pay. The Company funds the U.S. pension plans in accordance with the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code.

     The Company also sponsors several postretirement plans covering certain salaried and hourly employees. The plans provide health care and life insurance benefits for eligible retirees. In certain plans, Company contributions towards premiums are capped based on the cost as of a certain date, thereby creating a defined contribution. For the non-collectively bargained plans, the Company maintains the right to amend or terminate the plans at its discretion.

     The other postretirement benefits obligation, and postretirement benefits expense recognized through March 31, 2005, includes the expected favorable impact of the Medicare Prescription Drug, Improvement and Modernization Act (the “Act”), which was enacted on December 8, 2003. The Act provides for a federal subsidy, with tax-free payments commencing in 2006, to sponsors of retiree health care benefits plans that provide a benefit that is at least actuarially equivalent to the benefit established by the law. In January 2005, the U.S. Federal government issued final regulations which clarify how the Act is to be implemented. Based upon these regulations, it is expected that the federal subsidy included in the law will result in a reduction in the other postretirement benefits obligation of approximately $70 million. This reduction will be recognized in the financial statements over a number of years as an actuarial experience gain.

     For the 2005 and 2004 first quarters, the components of pension expense for the Company’s defined benefit plans and components of postretirement benefit expense included the following (pretax, in millions):

	Three Months Ended
	March 31,
	2005			2004
	(unaudited)
Pension Benefits:
Service cost — benefits earned during the year	$	7.0		$	7.5
Interest cost on benefits earned in prior years		31.4			31.3
Expected return on plan assets		(38.4	)		(36.8	)
Amortization of prior service cost		5.4			6.3
Amortization of net actuarial loss		10.5			10.7
Net pension expense	$	15.9		$	19.0

	Three Months Ended
	March 31,
	2005			2004
	(unaudited)
Other Postretirement Benefits:
Service cost — benefits earned during the year	$	0.8		$	2.2
Interest cost on benefits earned in prior years		8.1			13.9
Expected return on plan assets		(2.0	)		(2.2	)
Amortization of prior service cost		(6.6	)		—
Amortization of net actuarial loss		4.0			3.1
Net postretirement benefit expense	$	4.3		$	17.0
Total retirement benefit expense	$	20.2		$	36.0

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Note 10. Business Segments

     Following is certain financial information with respect to the Company’s business segments for the periods indicated (in millions):

	Three Months Ended
	March 31,
	2005			2004
	(unaudited)
Total sales:
Flat-Rolled Products	$	530.2		$	332.0
High Performance Metals		279.2			193.7
Engineered Products		97.1			71.8
		906.5			597.5
Intersegment sales:
Flat-Rolled Products		5.3			2.4
High Performance Metals		16.5			15.0
Engineered Products		5.1			2.3
		26.9			19.7
Sales to external customers:
Flat-Rolled Products		524.9			329.6
High Performance Metals		262.7			178.7
Engineered Products		92.0			69.5
	$	879.6		$	577.8
Operating profit (loss):
Flat-Rolled Products	$	39.2		$	(11.0	)
High Performance Metals		63.5			7.8
Engineered Products		11.2			3.8
Total operating profit		113.9			0.6
Corporate expenses		(10.3	)		(5.6	)
Interest expense, net		(10.4	)		(8.2	)
Other expenses, net of gains on asset sales		(9.7	)		(1.2	)
Retirement benefit expense		(20.2	)		(36.0	)
Income (loss) before income tax provision	$	63.3		$	(50.4	)

     Retirement benefit expense represents pension expense and other postretirement benefit expenses. Operating profit with respect to the Company’s business segments excludes any retirement benefit expense.

     Other expenses, net of gains on asset sales for 2005 includes litigation expense of $5.3 million relating to an unfavorable court judgment issued in April 2005, concerning a commercial dispute with a raw material supplier.

13

Note 11. Financial Information for Subsidiary and Guarantor Parent

     The payment obligations under the $150 million 6.95% debentures due 2025 issued by Allegheny Ludlum Corporation (the “Subsidiary”) are fully and unconditionally guaranteed by Allegheny Technologies Incorporated (the “Guarantor Parent”). In accordance with positions established by the Securities and Exchange Commission, the financial information in this Note 11 sets forth separately financial information with respect to the Subsidiary, the non-guarantor subsidiaries and the Guarantor Parent. The principal elimination entries eliminate investments in subsidiaries and certain intercompany balances and transactions. Investments in subsidiaries, which are eliminated in consolidation, are included in other assets on the balance sheets.

     In 1996, the defined benefit pension plans of the Subsidiary were merged with the defined benefit pension plans of Teledyne, Inc. and Allegheny Technologies became the plan sponsor. As a result, the balance sheets presented for the Subsidiary and the non-guarantor subsidiaries do not include the Allegheny Technologies deferred pension asset, pension liabilities or the related deferred taxes. The pension assets, liabilities and the related deferred taxes and pension income or expense are recognized by the Guarantor Parent. Management and royalty fees charged to the Subsidiary and to the non-guarantor subsidiaries by the Guarantor Parent have been excluded solely for purposes of this presentation.

14

Note 11. CONTINUED

Allegheny Technologies Incorporated

Financial Information for Subsidiary and Guarantor Parent

Balance Sheets

March 31, 2005 (unaudited)

	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	0.1	$	131.1	$	100.0	$	—		$	231.2
Accounts receivable, net		0.4		196.8		228.4		—			425.6
Inventories, net		—		266.2		301.9		—			568.1
Prepaid expenses and other current assets		0.3		5.2		42.5		—			48.0
Total current assets		0.8		599.3		672.8		—			1,272.9
Property, plant, and equipment, net		—		330.7		378.8		—			709.5
Cost in excess of net assets acquired		—		112.1		94.5		—			206.6
Deferred pension asset		122.3		—		—		—			122.3
Deferred income taxes		53.4		—		—		—			53.4
Investments in subsidiaries and other assets		1,528.5		483.5		522.2		(2,472.8	)		61.4
Total assets	$	1,705.0	$	1,525.6	$	1,668.3	$	(2,472.8	)	$	2,426.1
Liabilities and stockholders’ equity:
Accounts payable	$	2.7	$	143.2	$	135.5	$	—		$	281.4
Accrued liabilities		602.2		66.0		280.4		(741.6	)		207.0
Short-term debt and current portion of long-term debt		—		7.8		18.9					26.7
Total current liabilities		604.9		217.0		434.8		(741.6	)		515.1
Long-term debt		308.2		405.4		36.0		(200.0	)		549.6
Accrued postretirement benefits		—		262.8		207.7		—			470.5
Pension liabilities		255.6		—		—		—			255.6
Other long-term liabilities		10.5		26.6		72.4		—			109.5
Total liabilities		1,179.2		911.8		750.9		(941.6	)		1,900.3
Total stockholders’ equity		525.8		613.8		917.4		(1,531.2	)		525.8
Total liabilities and stockholders’ equity	$	1,705.0	$	1,525.6	$	1,668.3	$	(2,472.8	)	$	2,426.1

15

Note 11. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Statements of Operations

For the three months ended March 31, 2005 (unaudited)

							Non-
	Guarantor						guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	492.1		$	387.5		$	–		$	879.6
Cost of sales		13.4			449.7			275.2			–			738.3
Selling and administrative expenses		19.5			9.1			38.2			–			66.8
Interest expense, net		(7.3	)		(2.7	)		(0.4	)		–			(10.4	)
Other income (expense) including equity in income of unconsolidated subsidiaries		103.5			1.1			0.5			(105.9	)		(0.8	)
Income (loss) before income tax provision (benefit)		63.3			31.7			74.2			(105.9	)		63.3
Income tax provision (benefit)		2.3			—			—			—			2.3
Net income (loss)	$	61.0		$	31.7		$	74.2		$	(105.9	)	$	61.0

Condensed Statements of Cash Flows
For the three months ended March 31, 2005 (unaudited)

							Non-
	Guarantor						guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	35.0		$	(53.8	)	$	37.5		$	(23.4	)	$	(4.7	)
Cash flows provided by (used in) investing activities		(33.8	)		(2.7	)		(15.7	)		44.4			(7.8	)
Cash flows provided by (used in) financing activities		(1.3	)		11.5			3.7			(21.0	)		(7.1	)
Increase (decrease) in cash and cash equivalents	$	(0.1	)	$	(45.0	)	$	25.5		$	—		$	(19.6	)

16

Note 11. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Balance Sheets
December 31, 2004 (audited)

	Guarantor				Non-guarantor
(In millions)	Parent		Subsidiary		Subsidiaries		Eliminations			Consolidated
Assets:
Cash and cash equivalents	$	0.2	$	176.1	$	74.5	$	—		$	250.8
Accounts receivable, net		0.3		169.7		187.9		—			357.9
Inventories, net		—		266.8		246.2		—			513.0
Prepaid expenses, and other current assets		0.1		8.4		30.0		—			38.5
Total current assets		0.6		621.0		538.6		—			1,160.2
Property, plant, and equipment, net		—		336.5		381.8		—			718.3
Cost in excess of net assets acquired		—		112.1		93.2		—			205.3
Deferred pension asset		122.3		—		—		—			122.3
Deferred income taxes		53.0		—		—		—			53.0
Investment in subsidiaries and other assets		1,378.6		432.4		544.7		(2,299.1	)		56.6
Total assets	$	1,554.5	$	1,502.0	$	1,558.3	$	(2,299.1	)	$	2,315.7
Liabilities and stockholders’ equity:
Accounts payable	$	3.9	$	164.2	$	103.1	$	—		$	271.2
Accrued liabilities		547.6		63.2		283.6		(702.2	)		192.2
Short-term debt and current portion of long-term debt		—		7.5		21.9		—			29.4
Total current liabilities		551.5		234.9		408.6		(702.2	)		492.8
Long-term debt		308.4		404.8		40.1		(200.0	)		553.3
Accrued postretirement benefits		—		263.1		209.6		—			472.7
Pension liabilities		240.9		—		—		—			240.9
Other long-term liabilities		27.8		26.6		75.7		—			130.1
Total liabilities		1,128.6		929.4		734.0		(902.2	)		1,889.8
Total stockholders’ equity		425.9		572.6		824.3		(1,396.9	)		425.9
Total liabilities and stockholders’ equity	$	1,554.5	$	1,502.0	$	1,558.3	$	(2,299.1	)	$	2,315.7

17

Note 11. CONTINUED

Allegheny Technologies Incorporated
Financial Information for Subsidiary and Guarantor Parent
Statements of Operations

For the three months ended March 31, 2004 (unaudited)

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Sales	$	—		$	301.7		$	276.1		$	—		$	577.8
Cost of sales		26.6			310.0			230.8			—			567.4
Selling and administrative expenses		21.1			5.4			27.2			—			53.7
Interest expense, net		(5.1	)		(2.7	)		(0.4	)		—			(8.2	)
Other income (expense) including equity in income of unconsolidated subsidiaries		2.4			0.3			2.2			(3.8	)		1.1
Income (loss) before income tax provision (benefit)		(50.4	)		(16.1	)		19.9			(3.8	)		(50.4	)
Income tax provision (benefit)		—			—			—			—			—
Net income (loss)	$	(50.4	)	$	(16.1	)	$	19.9		$	(3.8	)	$	(50.4	)

Condensed Statements of Cash Flows

For the three months ended March 31, 2004 (unaudited)

	Guarantor						Non-guarantor
(In millions)	Parent			Subsidiary			Subsidiaries			Eliminations			Consolidated
Cash flows provided by (used in) operating activities	$	(15.2	)	$	93.7		$	(26.4	)	$	(52.3	)	$	(0.2	)
Cash flows provided by (used in) investing activities		—			(3.5	)		(9.1	)		1.7			(10.9	)
Cash flows provided by (used in) financing activities		15.0			(105.1	)		38.3			50.6			(1.2	)
Increase (decrease) in cash and cash equivalents	$	(0.2	)	$	(14.9	)	$	2.8		$	—		$	(12.3	)

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Note 12. Commitments and Contingencies

     The Company is subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants and disposal of wastes, and which may require that it investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations. The Company could incur substantial cleanup costs, fines, and civil or criminal sanctions, third party property damage or personal injury claims as a result of violations or liabilities under these laws or noncompliance with environmental permits required at its facilities. The Company is currently involved in the investigation and remediation of a number of its current and former sites, as well as third party sites.

     Environmental liabilities are recorded when the Company’s liability is probable and the costs are reasonably estimable. In many cases, however, the Company is not able to determine whether it is liable or, if liability is probable, to reasonably estimate the loss or range of loss. Estimates of the Company’s liability remain subject to additional uncertainties, including the nature and extent of site contamination, available remediation alternatives, the extent of corrective actions that may be required, and the number, participation, and financial condition of other potentially responsible parties (“PRPs”). The Company expects that it will adjust its accruals to reflect new information as appropriate. Future adjustments could have a material adverse effect on the Company’s results of operations in a given period, but the Company cannot reliably predict the amounts of such future adjustments.

     Based on currently available information, the Company does not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the sites with which the Company is currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell the Company’s securities. Future developments, administrative actions or liabilities relating to environmental matters, however, could have a material adverse effect on the Company’s financial condition or results of operations.

     At March 31, 2005, the Company’s reserves for environmental remediation obligations totaled approximately $27 million, of which approximately $9.6 million were included in other current liabilities. The reserve includes estimated probable future costs of $9.5 million for federal Superfund and comparable state-managed sites; $9.1 million for formerly owned or operated sites for which the Company has remediation or indemnification obligations; $5.7 million for owned or controlled sites at which Company operations have been discontinued; and $2.8 million for sites utilized by the Company in its ongoing operations. The Company continues to evaluate whether it may be able to recover a portion of future costs for environmental liabilities from third parties.

     The timing of expenditures depends on a number of factors that vary by site. The Company expects that it will expend present accruals over many years and that remediation of all sites with which it has been identified will be completed within thirty years.

     See Note 14. Commitments and Contingencies to the Company’s consolidated financial statements in the Company’s Annual Report on Form 10-K for its fiscal year ended December 31, 2004 for a discussion of legal proceedings affecting the Company. The following are updates to that discussion.

     TDY Industries, Inc. (“TDY”), a wholly-owned subsidiary of the Company, has conducted an environmental assessment of portions of a facility in San Diego, California that was formerly leased by one of the Company’s discontinued operations (“the San Diego facility”) from the San Diego Unified Port District (“the Port District”), at the request of the San Diego Regional Water Quality Control Board (“Regional Board”), and the Port District has commenced a site-wide environmental investigation. In October 2004, the Regional Board issued an order directing that TDY investigate contamination at the site and conduct a clean up if necessary. TDY appealed the order, which has been held in abeyance pending the outcome of the Company’s additional investigation directed

19

primarily at neighboring properties. TDY is currently complying with the order. While the outcome of these environmental matters cannot be predicted with certainty, and the Company believes that the claims against it are not meritorious, an adverse resolution of the matters relating to the San Diego facility could have a material adverse affect on the Company’s results of operations and financial condition.

     TDY is continuing negotiations with the U.S. Environmental Protection Agency and the U.S. Government in connection with the Li Tungsten Superfund Site in Glen Cove, New York. Based on information presently available, the Company believes its reserves on this matter are adequate. An adverse resolution of this matter could have a material adverse effect on the Company’s results of operations and financial condition.

     A number of other lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its currently and formerly owned businesses, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, taxes, environmental and health and safety, and stockholder matters. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

Note 13. Subsequent Events

     On April 5, 2005, the Company announced that ATI Metalworking Products acquired the assets of U.K.-based Garryson Limited (“Garryson”), a leading producer of tungsten carbide burrs, rotary tooling and specialty abrasive wheels and discs, from Elliot Industries Limited for approximately $17 million in cash. Garryson had sales of over $30 million in 2004.

     On April 29, 2005, the Company learned that an unfavorable judgment had been issued against TDY in a case filed in the United States District Court for the Northern District of Alabama (“District Court”) relating to a disputed tantalum graded powder raw material supply arrangement in late 2000. The supplier alleged that ATI Metalworking Products had failed to purchase certain tantalum graded powder under a supply contract, and TDY defended on the basis that the arrangement was a consignment with no purchase obligation. The District Court judge found against TDY. As a result, ATI’s results for the first quarter 2005 reflect a charge of $5.3 million of litigation expense, which includes compensatory damages and pre-judgment interest, and which is included in current accrued liabilities in the consolidated balance sheet at March 31, 2005. The Company plans to appeal the decision. This charge is included in selling and administrative expenses in the consolidated statement of operations, and in other expenses, net of gains on asset sales, in the Company’s business segment results.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

     Allegheny Technologies Incorporated is one of the largest and most diversified producers of specialty materials in the world. Unless the context requires otherwise, “we”, “our” and “us” refer to Allegheny Technologies Incorporated and its subsidiaries.

Results of Operations

     We operate in the following three business segments, which accounted for the following percentages of total external sales for the first three months of 2005 and 2004:

	2005		2004
Flat-Rolled Products	60	%	57	%
High Performance Metals	30	%	31	%
Engineered Products	10	%	12	%

Revenues increased 52% to $880 million in the 2005 first quarter, compared to the 2004 first quarter. This revenue increase was the result of increased demand, higher prices and higher volume of products shipped across all three business segments, as well as the increased volume attributable to the J&L asset acquisition in the 2004 second quarter.

     For the first three months of 2005, operating profit increased to $113.9 million, compared to $0.6 million for the first three months of 2004. Operating performance benefited from strong demand, higher selling prices, ongoing cost reductions and capital investments, and from ATI Business System manufacturing initiatives. Segment operating margins as a percentage of sales for the first three months of 2005 and 2004 were:

	2005			2004
Flat-Rolled Products		7.5	%		(3.3	)%
High Performance Metals		24.2	%		4.4	%
Engineered Products		12.2	%		5.5	%

Results for 2005 included a LIFO inventory valuation reserve increase of $5.7 million, compared to a first quarter 2004 LIFO inventory valuation reserve increase of $48.1 million. Cost reductions, before the effects of inflation, totaled $30 million in the first quarter 2005.

     Business conditions in most of our end markets improved significantly compared to the prior year period. Robust demand from the early stage recovery of the commercial aerospace market drove High Performance Metals segment results, resulting in higher pricing and volume for our titanium alloys, nickel-based superalloys, and vacuum-melted specialty steels. In addition, our exotic alloys business had another strong quarter due to continued government, corrosion, and medical market strength. Flat-Rolled Products segment results were good, as shipment volumes increased 9% sequentially compared to the 2004 fourth quarter, although higher operating costs and customer inventory adjustments affected operating margins. In our Engineered Products segment, operating margins increased to over 12% as a result of ATI Business System improvements and strong demand from several key markets, such as oil and gas, aerospace, and transportation markets as well as general manufacturing.

     We remain optimistic about the prospects for ATI. Backlogs in our High Performance Metals segment are at near record levels and lead times have continued to lengthen. We expect sustained demand for our materials used for jet engine after-market parts and new commercial jet engines and airframes. In addition,

21

we see continued strength for our exotic alloys. In our Flat-Rolled Products segment, capital goods markets are expected to remain strong. We believe stainless steel service center supply chain inventories are likely to be in better balance by the end of the second quarter 2005. The global electrical steel markets for power distribution are looking for added supply as that market gains momentum. Markets for our Engineered Products segment businesses remain robust.

     Retirement benefit expense was $20.2 million in the first quarter 2005 compared to $36.0 million in the first quarter 2004, primarily as a result of actions taken in the second quarter 2004 to control retiree medical costs and the favorable effect of the Medicare prescription drug legislation. First quarter 2005 results include litigation expense of $5.3 million relating to an unfavorable court judgment in April 2005 concerning a commercial dispute with a raw material supplier. First quarter 2005 results also include an income tax provision of $2.3 million, primarily for foreign and state income taxes. Results for 2004 do not include an income tax benefit as a result of the uncertainty concerning realization of the income tax benefit in the prior year. As a result of the improved market conditions and operating performance, net income for the first quarter 2005 was $61.0 million, or $0.61 per share, compared to a first quarter 2004 net loss of $50.4 million, or $(0.63) per share.

     Sales and operating profit (loss) for our three business segments are discussed below.

Flat-Rolled Products Segment

     Sales increased 59% to $524.9 million primarily due to improved demand, higher base-selling prices, higher raw material surcharges, and higher shipments including those from the Midland, PA and Louisville, OH facilities acquired in June 2004. Demand continued to be strong from the residential construction and remodeling, oil and gas, food service and equipment, and transportation markets. Demand improved from capital goods markets, such as chemical processing and power generation industries. Demand remained good from the automotive market for our specialty products, and we improved our position for automotive exhaust alloys as a result of the J&L asset acquisition.

     Segment operating income was $39.2 million, an increase of $50.2 million, primarily as a result of increased shipments, higher base-selling prices, additional surcharges, the benefits of gross cost reductions, and no LIFO inventory valuation reserve charge. First quarter 2004 results had a LIFO inventory valuation reserve charge of $37.6 million. Base prices for commodity products in the first quarter 2005 were approximately 12% higher than the first quarter 2004, and were essentially flat with the fourth quarter 2004. Results benefited from $23.1 million in gross cost reductions, before the effects of inflation.

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Certain comparative information on the segment’s products is provided in the following table (unaudited):

	Three Months Ended
	March 31,				%
	2005		2004		Change
Volume (finished tons):
Commodity		129,942		87,016		49	%
High Value		42,845		37,971		13	%
Total		172,787		124,987		38	%
Average prices (per finished ton):
Commodity	$	2,345	$	2,006		17	%
High Value	$	5,109	$	4,081		25	%
Combined Average	$	3,030	$	2,636		15	%

High Performance Metals Segment

     Sales increased 47% to $262.7 million due primarily to improved demand for titanium alloys, nickel-based superalloys, and vacuum-melted specialty steels from the aerospace, biomedical, and power generation markets. Our exotic alloys business continued to benefit from sustained high demand from government and medical markets, and from corrosion markets particularly in Asia. Backlog of confirmed orders for the segment was $495 million at March 31, 2005, a $115 million increase from December 31, 2004.

     Segment operating profit was $63.5 million, an increase of $55.7 million, primarily as a result of increased shipments for most products, higher selling prices, and the benefits of gross cost reductions. Raw material cost inflation and higher inventory levels resulted in a LIFO inventory valuation reserve charge of $6.0 million in 2005 compared to a $8.6 million charge in the first quarter of 2004. Results for 2005 benefited from $5.5 million of gross cost reductions, before the effects of inflation.

     Certain comparative information on the segment’s major products is provided in the following table (unaudited):

	Three Months Ended
	March 31,				%
	2005		2004		Change
Volume (000’s pounds):
Nickel-based and specialty steel alloys		10,349		8,944		16	%
Titanium mill products		6,137		5,023		22	%
Exotic alloys		1,027		1,185		(13	)%
Average prices (per pound):
Nickel-based and specialty steel alloys	$	9.77	$	7.73		26	%
Titanium mill products	$	17.37	$	11.41		52	%
Exotic alloys	$	40.48	$	36.32		11	%

Exotic alloys pricing and volume comparisons were significantly affected by product mix.

Engineered Products Segment

     Sales improved 32% to $92.0 million. Operating profit was $11.2 million, an increase of $7.4 million, primarily as a result of higher sales volumes, improved pricing, cost reductions and lower LIFO inventory valuation reserve charges. Changes in raw material costs and inventory levels resulted in a LIFO inventory valuation reserve gain of $0.3 million in 2005, compared to a $1.9 million charge in the first quarter of 2004. Demand for tungsten

23

products in our Metalworking Products operation remained strong from the oil and gas, aerospace, and general manufacturing markets. Demand remained strong for our forged products from the Class 8 truck, and construction and mining markets. Demand for our cast products was strong from the transportation, wind energy, and oil and gas markets. Results benefited from $1.5 million in gross cost reductions, before the effects of inflation.

Corporate Items

     Corporate expenses increased to $10.3 million for the first quarter of 2005 compared to $5.6 million for the first quarter of 2004. This increase is due primarily to expenses associated with cash and equity-based long-term performance-based incentive compensation programs. We adopted Statement of Financial Accounting Standards No. 123(R), “Share-Based Payment” (“SFAS 123R”) on January 1, 2005, using the modified prospective method. Under the modified prospective method, the effect of the standard is recognized in the period of adoption and in future periods. Prior periods, which were accounted for under Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees” (“APB 25”), are not restated to reflect the impact of adopting the new standard.

     SFAS 123R requires share-based payments to be accounted for at fair value, measured at the grant date for equity awards, and recognized as expense over the requisite service period. As a result, compensation expense recognized under SFAS 123R may be subject to less volatility than the compensation expense recognized under APB 25, which required adjustments under the intrinsic value method for variable awards where the number of shares to be awarded, or the share price, was not known at the grant date. Had we accounted for equity-based compensation under the SFAS 123R fair value expense method in 2004, we would have recorded $9.6 million of lower compensation expense for the year.

     Net interest expense increased to $10.4 million for the first quarter of 2005 from $8.2 million for the same period last year. The increase was primarily related to interest associated with the financing of the June 2004 J&L asset acquisition and higher short-term interest rates.

     Other expenses, net of gains on asset sales for 2005 includes litigation expense of $5.3 million relating to an unfavorable court judgment in April 2005 concerning a commercial dispute with a raw material supplier.

     Retirement benefit expense declined to $20.2 million in the first quarter 2005, compared to $36.0 million in the first quarter 2004, primarily as a result of actions taken in the second quarter 2004 to control retiree and medical costs and the favorable effect of the Medicare prescription drug legislation. Approximately $13.7 million of the first quarter 2005 retirement benefit expense was non-cash. For the first quarter 2005, retirement benefit expense increased cost of sales by $14.2 million, and selling and administrative expenses by $6.0 million. For the first quarter 2004, retirement benefit expense increased cost of sales by $27.6 million, and selling and administrative expenses by $8.4 million. Retirement benefit expense for the full year 2005 is expected to decline to approximately $81 million from $120 million in 2004. The pension expense portion of retirement benefit expense is expected to decrease to approximately $63 million for 2005 compared to $74 million in 2004 as actual returns on pension assets in 2004 were higher than expected. This decrease was partially offset by a lower assumed discount rate to value pension benefit liabilities. Postretirement medical expense for 2005, which is now expected to be approximately $17 million compared to $46 million for 2004, will continue to benefit from the actions taken in the second quarter 2004 to control retiree medical costs. This was partially offset by a lower assumed discount rate to value plan liabilities. The revised 2005 postretirement medical expense reflects a $7 million reduction from the previous 2005 estimate due primarily to a revision of the projected impact of the Medicare prescription drug legislation resulting from updated regulations.

24

     We are not required to make cash contributions to the defined benefit pension plan for 2005 and, based on current regulations and actuarial studies, we do not expect to be required to make cash contributions to our U.S. defined benefit pension plan during the next several years. However, we may elect, depending upon investment performance of the pension plan assets and other factors, to make voluntary cash contributions to this pension plan in the future.

Income Taxes

     The 2005 first quarter includes a provision for income taxes of $2.3 million, which is principally related to foreign and state income taxes. No income tax benefit or provision was recognized in 2004. Results of operations for the 2005 first quarter and for the 2004 period do not include any significant U.S. Federal income tax provision or benefit for current or deferred taxes primarily as a result of the continuing uncertainty regarding full utilization of our net deferred tax asset and available operating loss carryforwards. We maintain a valuation allowance for a major portion of our deferred tax assets in accordance with SFAS No. 109, “Accounting for Income Taxes”. Future tax provisions or benefits will be recognized when taxable income exceeds net operating tax loss carry-forwards resulting in cash tax payments, or when tax losses, if any, are recoverable as cash refunds, or due to changes in our judgment regarding the realizability of our deferred tax assets. As of December 31, 2004, we had a U. S. Federal income tax net operating loss carryforward of approximately $150 million, which equates to a U.S. Federal tax benefit of approximately $52 million. This carryforward is available to offset any taxable income in 2005, or in future periods through 2024.

Financial Condition and Liquidity

Cash Flow and Working Capital

     During the three months ended March 31, 2005, cash used by operations was $4.7 million, as the significant improvement in operating earnings was more than offset by a $122.2 million increase in managed working capital in the quarter. Capital expenditures were $7.2 million. The principal financing activities were $5.8 million of net debt repayments and $5.8 million of dividends paid. At March 31, 2005, cash and cash equivalents totaled $231.2 million, a decrease of $19.6 million from December 31, 2004.

     As part of managing the liquidity of our business, we focus on controlling managed working capital, which is defined as gross accounts receivable and gross inventories, less accounts payable. In measuring performance in controlling this managed working capital, we exclude the effects of LIFO inventory valuation reserves, excess and obsolete inventory reserves, and reserves for uncollectible accounts receivable which, due to their nature, are managed separately. At March 31, 2005, managed working capital was 27.2% of annualized sales compared to 29.5% of annualized sales at December 31, 2004. During the first three months of 2005, managed working capital increased by $122.2 million, to $974.8 million. The increase in managed working capital from December 31, 2004 was due to increased accounts receivable of $68.2 million, which reflects the higher level of sales in the first quarter 2005 compared to the fourth quarter 2004, and increased inventory of $63.3 million, mostly as a result of higher raw material costs and increased business volumes, which was partially offset by increased accounts payable of $9.3 million. The majority of the increase in raw material costs should be recovered through surcharges and index pricing mechanisms.

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The components of managed working capital were as follows:

	March 31,			December 31,
(Unaudited, in millions)	2005			2004			Change
Accounts receivable	$	425.6		$	357.9
Inventories		568.1			513.0
Accounts payable		(281.4	)		(271.2	)
Subtotal		712.3			599.7
Allowance for doubtful accounts		9.1			8.4
LIFO reserves		229.6			223.9
Corporate and other		23.8			20.6
Managed working capital	$	974.8		$	852.6		$	122.2
Annualized prior 2 months sales	$	3,588.0		$	2,887.0
Managed working capital as a % of annualized sales		27.2	%		29.5	%

     A regular quarterly dividend of $0.06 per share of common stock was declared on March 21, 2005, payable to stockholders of record at the close of business on March 29, 2005. The payment of dividends and the amount of such dividends depends upon matters deemed relevant by our Board of Directors, such as our results of operations, financial condition, cash requirements, future prospects, any limitations imposed by law, credit agreements or senior securities, and other factors deemed relevant and appropriate.

Debt

     At March 31, 2005, we had $576.3 million in total outstanding debt, a decrease of $6.4 million compared to December 31, 2004. The decrease was primarily due to repayments of short-term debt at our STAL joint venture.

     In managing our overall capital structure, one of the measures on which we focus is net debt to total capitalization, which is the percentage of our debt to our total invested and borrowed capital. In determining this measure, debt and total capitalization are net of cash on hand which may be available to reduce borrowings. Our net debt to total capitalization improved to 39.6% at March 31, 2005 from 43.8% at December 31, 2004. The net debt to total capitalization was determined as follows:

	March 31,			December 31,
(Unaudited - dollars in millions)	2005			2004
Total debt	$	576.3		$	582.7
Less: cash		(231.2	)		(250.8	)
Net debt	$	345.1		$	331.9
Net debt	$	345.1		$	331.9
Stockholders’ equity		525.8			425.9
Total capitalization	$	870.9		$	757.8
Net debt to total capitalization		39.6	%		43.8	%

     We did not borrow funds under our secured domestic credit facility during the first three months of 2005, or during all of 2004 or 2003. We have a $325 million four-year senior secured domestic revolving credit facility (“the facility”), which expires in June 2007, and which is secured by all accounts receivable and inventory of our U.S. operations, and includes capacity for up to $175 million in letters of credit. Outstanding letters of credit issued under the facility at March 31, 2005 were approximately $123 million.

     The facility limits capital expenditures, investments and acquisitions of businesses, new indebtedness, asset divestitures, payment of dividends, and common stock repurchases which we may incur or undertake during the term of the facility without obtaining permission of the lending group. In addition, the secured credit facility contains a financial covenant, which is not measured unless our undrawn availability as described in the facility is less

26

than $150 million. This financial covenant, when measured, requires us to maintain a ratio of consolidated earnings before interest, taxes, depreciation and amortization (“EBITDA”) to fixed charges of at least 1.0 to 1.0. EBITDA is adjusted for non-cash items such as income/loss on investments accounted for under the equity method of accounting, non-cash pension expense/income, and that portion of retiree medical and life insurance expenses paid from our VEBA trust. EBITDA is reduced by capital expenditures and cash taxes paid, and increased for cash tax refunds. Fixed charges include gross interest expense, dividends paid and scheduled debt payments. Our ability to borrow under the secured credit facility in the future could be adversely affected if we fail to maintain the applicable covenants under the agreement governing the facility.

     At March 31, 2005, we had the ability to access the entire $325 million undrawn availability under the facility, which is calculated including outstanding letters of credit and domestic cash on hand.

     We believe that internally generated funds, current cash on hand, and capacity provided from our secured credit facility will be adequate to meet our foreseeable liquidity needs.

Critical Accounting Policies

Inventory

     At March 31, 2005, we had net inventory of $568.1 million. Inventories are stated at the lower of cost (last-in, first-out (LIFO), first-in, first-out (FIFO) and average cost methods) or market, less progress payments. Costs include direct material, direct labor and applicable manufacturing and engineering overhead, and other direct costs. Most of our inventory is valued utilizing the LIFO costing methodology. Inventory of our non-U.S. operations is valued using average cost or FIFO methods. Under the LIFO inventory valuation method, changes in the cost of raw materials and production activities are recognized in cost of sales in the current period even though these material and other costs may have been incurred at significantly different values due to the length of time of our production cycle. The prices for many of the raw materials we use have recently been extremely volatile, especially during 2004 when raw material prices rose rapidly, compared to 2003. Since we value most of our inventory utilizing the LIFO inventory costing methodology, a rapid rise in raw material costs has a negative effect on our operating results. For example, in 2004 the effect of the increase in raw material costs on our LIFO inventory valuation method resulted in cost of sales which was $112.2 million higher than would have been recognized if we utilized the FIFO methodology to value our inventory. In a period of rising prices, cost of sales expense recognized under LIFO is generally higher than the cash costs incurred to acquire the inventory sold. Conversely, in a period of declining raw material prices, cost of sales recognized under LIFO is generally lower than cash costs incurred to acquire the inventory sold.

     Since the LIFO inventory valuation methodology is designed for annual determination, interim estimates of the annual LIFO valuation are required. We recognize the effects of the LIFO inventory valuation method on an interim basis by projecting the expected annual LIFO cost and allocating that projection to the interim quarters equally. These projections of the annual LIFO cost are updated quarterly and are evaluated based upon current material, labor and overhead costs and projections for such costs at the end of the year plus projections regarding year-end inventory levels.

     We evaluate product lines on a quarterly basis to identify inventory values that exceed estimated net realizable value. The calculation of a resulting reserve, if any, is recognized as an expense in the period that the need for the reserve is identified. At March 31, 2005, no such reserves were required. It is our general policy to write-down to scrap value any inventory that is identified as obsolete and any inventory that has aged or has not moved in more than twelve months. In some instances this criterion is up to twenty-four

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months due to the longer manufacturing and distribution process for such products.

Income Taxes

     Deferred income taxes result from temporary differences in the recognition of income and expense for financial and income tax reporting purposes, or differences between the fair value of assets acquired in business combinations accounted for as purchases for financial reporting purposes and their corresponding tax bases. Deferred income taxes represent future tax benefits (assets) or costs (liabilities) to be recognized when those temporary differences reverse. We evaluate on a quarterly basis whether, based on all available evidence, we believe that our deferred income tax assets will be realizable. Valuation allowances are established when it is estimated that it is probable (more likely than not) that the tax benefit of the deferred tax asset will not be realized. The evaluation, as prescribed by Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes,” includes the consideration of all available evidence, both positive and negative, regarding historical operating results including recent periods of profitability mitigated by prior years with reported losses, the estimated timing of future reversals of existing taxable temporary differences, estimated future taxable income exclusive of reversing temporary differences and carryforwards, and potential tax planning strategies which may be employed to prevent an operating loss or tax credit carryforward from expiring unused. Future realization of deferred income tax assets ultimately depends upon the existence of sufficient taxable income within the carryback, carryforward period available under tax law.

     The recognition of a valuation allowance is recorded as a non-cash charge to the income tax provision with an offsetting reserve against the deferred income tax asset. Should we generate pretax losses in future periods, a tax benefit would not be recorded and the valuation allowance recorded would increase. Under these circumstances the net loss recognized and net loss per share for that period would be larger than a comparable period when a favorable tax benefit was recorded. However, tax provisions or benefits would continue to be recognized, as appropriate, on state and local taxes, and taxes related to foreign jurisdictions. The recognition of a valuation allowance does not affect our ability to utilize the deferred tax asset in the future. If in a future period based upon our continuing profitability and other factors we determine that the deferred income tax asset, or a portion thereof, will be realizable, the existing valuation allowance will be reduced resulting in a non-cash income tax benefit, and the Company would recognize current and deferred U.S. Federal income taxes on reported earnings from that point forward.

     At March 31, 2005, we had a net deferred income tax asset, net of deferred income tax liabilities and deferred tax asset valuation allowances, of $53.4 million. A significant portion of our deferred income tax asset relates to postretirement employee benefit obligations, which have been recognized for financial reporting purposes but are not deductible for income tax reporting purposes until the benefits are paid. These benefit payments are expected to occur over an extended period of years. We have not had a federal net operating loss or tax credit carryforward expire unutilized.

Other Critical Accounting Policies

     A summary of other significant accounting policies is discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations and in Note 1 of our Annual Report on Form 10-K for the year ended December 31, 2004.

     The preparation of the financial statements in accordance with accounting principles generally accepted in the United States requires us to make judgments, estimates and assumptions regarding uncertainties that affect the reported amounts of assets and liabilities. Significant areas of uncertainty

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that require judgments, estimates and assumptions include the accounting for derivatives, retirement plans, income taxes, environmental and other contingencies as well as asset impairment, inventory valuation and collectibility of accounts receivable. We use historical and other information that we consider to be relevant to make these judgments and estimates. However, actual results may differ from those estimates and assumptions that are used to prepare our financial statements.

Garryson Acquisition

     On April 5, 2005, we announced that ATI Metalworking Products acquired the assets of U.K.-based Garryson Limited (“Garryson”), a leading producer of tungsten carbide burrs, rotary tooling and specialty abrasive wheels and discs, from Elliot Industries Limited for approximately $17 million in cash. Garryson had sales of over $30 million in 2004.

Other Matters

Product Pricing

     From time-to-time, intense competition and excess manufacturing capacity in the commodity stainless steel industry have resulted in reduced prices, excluding raw material surcharges, for many of our stainless steel products. These factors have had and may have an adverse impact on our revenues, operating results and financial condition.

     Although inflationary trends in recent years have been moderate, during the same period certain critical raw material costs, such as nickel and molybdenum, and scrap containing iron, nickel and titanium, have been volatile. While we have been able to mitigate some of the adverse impact of rising raw material costs through surcharges to customers, rapid increases in raw material costs may adversely affect our results of operations.

     We change prices on certain of our products from time-to-time. The ability to implement price increases is dependent on market conditions, economic factors, competitive factors, raw material costs and availability, operating costs, and other factors, some of which are beyond our control. The benefits of any price increases may be delayed due to long manufacturing lead times and the terms of existing contracts.

Volatility of Prices of Critical Raw Materials; Availability of Critical Raw Materials and Services

     We rely to a substantial extent on third parties to supply certain raw materials that are critical to the manufacture of our products. We also depend on third parties to provide conversion services that may be critical to the manufacture of our products. Purchase prices and availability of these critical raw materials and services are subject to volatility. At any given time, we may be unable to obtain an adequate supply of these critical raw materials or services on a timely basis, on price and other terms acceptable, or at all.

     If suppliers increase the price of critical raw materials, we may not have alternative sources of supply. In addition, to the extent that we have quoted prices to customers and accepted customer orders for products prior to purchasing necessary raw materials or have existing contracts, we may be unable to raise the price of products to cover all or part of the increased cost of the raw materials.

     The manufacture of some of our products is a complex process and requires long lead times. As a result, we may experience delays or shortages in the supply of raw materials or conversion services. If we are unable to obtain adequate and timely deliveries of required raw materials or conversion services, we may be unable to timely manufacture sufficient quantities of

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products. This could cause us to lose sales, incur additional costs, delay new product introductions or suffer harm to our reputation.

     We acquire certain important raw materials that we use to produce our specialty materials, including nickel, chrome, cobalt, titanium sponge, and ammonium paratungstate, from foreign sources. Some of these sources operate in countries that may be subject to unstable political and economic conditions. These conditions may disrupt supplies or affect the prices of these materials.

Volatility of Energy Prices; Availability of Energy Resources

     Energy resources markets are subject to conditions that may create volatility in the prices and uncertainty in the availability of energy resources. We rely upon third parties for our supply of energy resources consumed in the manufacture of products. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control. Disruptions in the supply of energy resources could temporarily impair the ability to manufacture products for customers. Further, increases in energy costs, or changes in costs relative to energy costs paid by competitors, have and may continue to adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition.

Labor Matters

     We have approximately 9,000 full-time employees. A portion of our workforce is covered by various collective bargaining agreements, principally with the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (“USWA”), including: approximately 2,950 Allegheny Ludlum production, office and maintenance employees covered by collective bargaining agreements that are effective through June 2007; approximately 220 Oremet employees covered by a collective bargaining agreement that is effective through June 2007; approximately 565 Wah Chang employees covered by a collective bargaining agreement that continues through March 2008, and approximately 180 employees at our Casting Service facility in LaPorte, Indiana, covered by a collective bargaining agreement that is effective through December 2007.

     Generally, agreements that expire may be terminated after notice by the union. After termination, the union may authorize a strike. A strike by the employees covered by one or more of the collective bargaining agreements could materially adversely affect our operating results. There can be no assurance that we will succeed in concluding collective bargaining agreements with the unions to replace those that expire. Collective bargaining agreements involving our Portland Forge facility at Portland, Indiana, covering a total of approximately 190 employees represented by three unions, expired April 30, 2005.

Environmental

     When it is probable that a liability has been incurred or an asset has been impaired, we recognize a loss if the amount of the loss can be reasonably estimated.

     We are subject to various domestic and international environmental laws and regulations that govern the discharge of pollutants into the air or water and the disposal of hazardous substances, which may require that we investigate and remediate the effects of the release or disposal of materials at sites associated with past and present operations, including sites at which we have been identified as a potentially responsible party (“PRP”) under the Federal Superfund laws, and comparable state laws. We could incur substantial cleanup costs, fines and civil or criminal sanctions, third party property damage or

30

personal injury claims as a result of violations or liabilities under these laws or non-compliance with environmental permits required at our facilities. We are currently involved in the investigation and remediation of a number of our current and former sites as well as third party sites under these laws.

     With respect to proceedings brought under the Federal Superfund laws, or similar state statutes, we have been identified as a PRP at approximately 33 of such sites, excluding those at which we believe we have no future liability. Our involvement is limited or de minimis at approximately 19 of these sites, and the potential loss exposure with respect to any of the remaining 14 individual sites is not considered to be material.

     We are a party to various cost-sharing arrangements with other PRPs at the sites. The terms of the cost-sharing arrangements are subject to non-disclosure agreements as confidential information. Nevertheless, the cost-sharing arrangements generally require all PRPs to post financial assurance of the performance of the obligations or to pre-pay into an escrow or trust account their share of anticipated site-related costs. In addition, the Federal government, through various agencies, is a party to several such arrangements.

     Environmental liabilities are recorded when our liability is probable and the costs are reasonably estimable. In many cases, investigations are not at a stage where we are able to determine whether we are liable or, if liability is probable, to reasonably estimate the loss, or certain components thereof. Accordingly, as investigation and remediation of these sites proceed and as we receive new information, we expect that we will adjust our accruals to reflect the new information. Future adjustments could have a material adverse effect on our results of operations in a given period, but we cannot reliably predict the amounts of such future adjustments. At March 31, 2005, our reserves for environmental matters totaled approximately $27 million.

     Environmental liabilities are recorded when our liability is probable and the costs are reasonably estimable, but generally not later than the completion of the feasibility study or our recommendation of a remedy or commitment to an appropriate plan of action. The accruals are reviewed periodically and, as investigations and remediations proceed, adjustments are made as necessary. Accruals for losses from environmental remediation obligations do not take into account the effects of inflation, and anticipated expenditures are not discounted to their present value. The accruals are not reduced by possible recoveries from insurance carriers or other third parties, but do reflect allocations among PRPs at Federal Superfund sites or similar state-managed sites after an assessment is made of the likelihood that such parties will fulfill their obligations at such sites and after appropriate cost-sharing or other agreements are entered. Our measurement of environmental liabilities is based on currently available facts, present laws and regulations, and current technology. Such estimates take into consideration our prior experience in site investigation and remediation, the data concerning cleanup costs available from other companies and regulatory authorities, and the professional judgment of our environmental experts in consultation with outside environmental specialists, when necessary. Estimates of our liability are further subject to additional uncertainties regarding the nature and extent of site contamination, the range of remediation alternatives available, evolving remediation standards, imprecise engineering evaluations and estimates of appropriate cleanup technology, methodology and cost, the extent of corrective actions that may be required, and the participation, number and financial condition of other PRPs, as well as the extent of their responsibility for the remediation.

     Based on currently available information, we do not believe that there is a reasonable possibility that a loss exceeding the amount already accrued for any of the matters with which we are currently associated (either individually or in the aggregate) will be an amount that would be material to a decision to buy or sell our securities. Future developments, administrative actions or

31

liabilities relating to environmental matters, however, could have a material adverse effect on our financial condition and results of operations.

Acquisition and Disposition Strategies

     We intend to continue to strategically position our businesses in order to improve our ability to compete. We plan to do this by seeking specialty niches, expanding our global presence, acquiring businesses complementary to existing strengths and continually evaluating the performance and strategic fit of existing business units. We regularly consider acquisition, joint ventures, and other business combination opportunities as well as possible business unit dispositions. From time-to-time, management holds discussions with management of other companies to explore such opportunities. As a result, the relative makeup of the businesses comprising our Company is subject to change. Acquisitions, joint ventures, and other business combinations involve various inherent risks, such as: assessing accurately the value, strengths, weaknesses, contingent and other liabilities and potential profitability of acquisition or other transaction candidates; the potential loss of key personnel of an acquired business; our ability to achieve identified financial and operating synergies anticipated to result from an acquisition or other transaction; and unanticipated changes in business and economic conditions affecting an acquisition or other transaction. International acquisitions and other transactions could be affected by export controls, exchange rate fluctuations, domestic and foreign political conditions and a deterioration in domestic and foreign economic conditions.

Internal Controls Over Financial Reporting

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Forward-Looking and Other Statements

     From time to time, we have made and may continue to make “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Certain statements in this report relate to future events and expectations and, as such, constitute forward-looking statements. Forward-looking statements include those containing such words as “anticipates,” “believes,” “estimates,” “expects,” “would,” “should,” “will,” “will likely result,” “forecast,” “outlook,” “projects,” and similar expressions. Such forward-looking statements are based on management’s current expectations and include known and unknown risks, uncertainties and other factors, many of which we are unable to predict or control, that may cause our actual results or performance to materially differ from any future results or performance expressed or implied by such statements. Various of these factors are described from time to time in our filings with the Securities and Exchange Commission, including our Report on Form 10-K for the year ended December 31, 2004. We assume no duty to update our forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

     We use derivative financial instruments from time to time to hedge ordinary business risks for product sales denominated in foreign currencies, to partially hedge against volatile energy and raw material cost fluctuations in the Flat-Rolled Products and High Performance Metals segments and to manage exposure to changes in interest rates.

     Foreign currency exchange contracts are used to limit transactional exposure to changes in currency exchange rates. We sometimes purchase foreign currency forward contracts that permit us to sell specified amounts of foreign currencies expected to be received from our export sales for pre-established

32

U.S. dollar amounts at specified dates. The forward contracts are denominated in the same foreign currencies in which export sales are denominated. These contracts are designated as hedges of the variability in cash flows of a portion of our forecasted export sales transactions in which settlement will occur in future periods and which otherwise would expose us, on the basis of aggregate net cash flows in respective currencies, to foreign currency risk. Changes in the fair value of our foreign currency derivatives are recognized in other comprehensive income until the hedged item is recognized in earnings. The ineffective portion of a derivative’s change in fair value is immediately recognized in the statement of operations.

     As part of our risk management strategy, we purchase exchange-traded futures contracts from time to time to manage exposure to changes in nickel prices, a component of raw material cost for some of our flat-rolled and high performance metals products. The nickel futures contracts obligate us to make or receive a payment equal to the net change in value of the contract at its maturity. These contracts are designated as hedges of the variability in cash flows of a portion of our forecasted purchases of nickel. Changes in the fair value of our nickel derivatives are recognized in other comprehensive income until the hedged item is recognized in the statement of operations. The ineffective portion of a derivative’s change in fair value is immediately recognized in the statement of operations.

     We use raw materials surcharge and index mechanisms to offset the impact of increased raw material costs; however, competitive factors in the marketplace may limit our ability to institute such mechanisms, and there can be a delay between the increase in the price of raw materials and the realization of the benefit of such mechanisms. For example, since we generally use in excess of 45,000 tons of nickel each year, a hypothetical change of $1.00 per pound in nickel prices would result in increased costs of approximately $90 million. In addition, we also use in excess of 340,000 tons of ferrous scrap in the production of our products and a hypothetical change of $10.00 per ton would result in increased costs of approximately $3.4 million.

     While we enter into raw materials futures contracts from time-to-time to hedge exposure to price fluctuations, such as for nickel, we cannot be certain that our hedge position adequately reduces exposure. We believe that we have adequate controls to monitor these contracts, but we may not be able to accurately assess exposure to price volatility in the markets for critical raw materials.

     Energy resources markets are subject to conditions that create uncertainty in the prices and availability of energy resources. The prices for and availability of electricity, natural gas, oil and other energy resources are subject to volatile market conditions. These market conditions often are affected by political and economic factors beyond our control. Increases in energy costs, or changes in costs relative to energy costs paid by competitors, has and may continue to adversely affect our profitability. To the extent that these uncertainties cause suppliers and customers to be more cost sensitive, increased energy prices may have an adverse effect on our results of operations and financial condition. We use approximately 10 to 12 million MMBtu’s of natural gas annually, depending upon business conditions, in the manufacture of our products. These purchases of natural gas expose us to risk of higher gas prices. For example, a hypothetical $1.00 per MMBtu increase in the price of natural gas would result in increased annual energy costs of approximately $10 to $12 million.

     We also enter into energy swap contracts as part of our overall risk management strategy. The swap contracts are used to manage exposure to changes in natural gas costs, a component of production costs for our operating units. The energy swap contracts obligate us to make or receive a payment equal to the net change in value of the contract at its maturity. These contracts are designated as hedges of the variability in cash flows of a portion of our forecasted energy payments. Changes in the fair value of our energy derivatives are recognized in other comprehensive income until the hedged item

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is recognized in the statement of operations. The ineffective portion of a derivative’s change in fair value is immediately recognized in the statement of operations.

     At March 31, 2005, we had aggregate consolidated indebtedness of approximately $576 million, most of which bears interest at fixed rates. In a period of declining interest rates, we face the risk of required interest payments exceeding those based on the then current market rate. From time-to-time, we may enter into interest rate swap contracts to manage our exposure to interest rate risks.

     We believe that adequate controls are in place to monitor these hedging activities. However, many factors, including those beyond our control such as changes in domestic and foreign political and economic conditions, as well as the magnitude and timing of interest rate, energy price and nickel price changes, could adversely affect these activities.

     We market our products to a diverse customer base, principally throughout the United States. Trade credit is extended based upon evaluations of each customer’s ability to perform its obligations, which are updated periodically. Sales of our products are dependent upon the economic condition of the markets in which we serve. Difficulties and uncertainties in the business environment may affect our customer’s creditworthiness and ability to pay their obligations.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer have evaluated the Company’s disclosure controls and procedures as of March 31, 2005, and they concluded that these controls and procedures are effective.

(b) Changes in Internal Controls

There was no change in our internal control over financial reporting identified in connection with the evaluation of the Company’s disclosure controls and procedures as of March 31, 2005, conducted by our Chief Executive Officer and Chief Financial Officer, that occurred during the quarter ended March 31, 2005 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

A number of lawsuits, claims and proceedings have been or may be asserted against the Company relating to the conduct of its business, including those pertaining to product liability, patent infringement, commercial, employment, employee benefits, environmental, health and safety, and stockholder matters. Certain of such lawsuits, claims and proceedings are described in our Annual Report on Form 10-K for the year ended December 31, 2004. While the outcome of litigation cannot be predicted with certainty, and some of these lawsuits, claims or proceedings may be determined adversely to the Company, management does not believe that the disposition of any such pending matters is likely to have a material adverse effect on the Company’s financial condition or liquidity, although the resolution in any reporting period of one or more of these matters could have a material adverse effect on the Company’s results of operations for that period.

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Item 2. Change in Securities, Use of Proceeds And Issuer Purchases of Equity Securities

				(d) Maximum
				Number (or
	(a) Total		(c) Total Number	Approximate
	Number of		of Shares (or	Dollar Value) of
	Shares		Units) Purchased	Shares (or Units)
	(or	(b) Average	as Part of	that May Yet Be
	Units)	Price Paid	Publicly	Purchased Under
	Purchased	per Share	Announced Plans	the Plans or
Period	(1)	(or Unit)	or Programs	Programs
Month 1 (1/1-1/31)
Month 2 (2/1 - 2/28)	101,499	$22.855	0	0
Month 3 (3/1 - 3/31)
Total	101,499	$22.855	0	0

(1) Shares purchased to satisfy employee tax withholding on equity compensation from nonvested and Total Shareholder Return plan stock awards.

Item 4. Submission of Matters to a Vote of Security Holders

Our 2005 annual meeting of stockholders was held on April 22, 2005. Proxies for the meeting were solicited by us pursuant to Regulation 14A under the Securities Exchange Act of 1934. At that meeting, three proposals required shareholder approval.

Item A – Election of Directors. The five nominees for election as directors named in the proxy statement for the meeting were elected, having received the following number of votes:

			Number of Votes
Name	Number of Votes For		Withheld
Robert P. Bozzone		88,319,622		431,862
James C. Diggs		88,376,684		374,800
Michael J. Joyce		86,729,421		2,022,063
W. Craig McClelland		84,721,407		2,030,077
Louis J. Thomas		88,351,533		399,951

Item B — Ratification of Ernst & Young as the independent auditors of the Company for the fiscal year ending December 31, 2005

	Number of Votes	Number of Votes
Number of Votes For	Against	Abstained
86,458,819	2,234,981	57,683

Item C – Reapproval of Performance-Based Goals Under the 2000 Incentive Plan.

	Number of Votes	Number of Votes
Number of Votes For	Against	Abstained
83,993,582	1,227,715	3,530,187

35

Item 6. Exhibits

(a) Exhibits

10.1	2005 Annual Incentive Plan (filed herewith).
10.2	Administrative Rules for the Total Shareholder Return Incentive Compensation Program (as amended as of January 1, 2005), and Form of Total Shareholder Return Incentive Compensation Plan Agreement effective as of January 1, 2005 (filed herewith).
10.3	Form of Restricted Stock Agreement dated February 24, 2005 (filed herewith).
10.4	Key Employee Performance Plan, as amended (filed herewith).
10.5	Form of Amended and Restated Change in Control Severance Agreement (filed herewith).
31.1	Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
31.2	Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
32.1	Certification pursuant to 18 U.S.C. Section 1350 (filed herewith).

36

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ALLEGHENY TECHNOLOGIES INCORPORATED
(Registrant)

Date: May 5, 2005	By	/s/ Richard J. Harshman
		Richard J. Harshman
		Executive Vice President-Finance and
		Chief Financial Officer
		(Principal Financial Officer and
		Duly Authorized Officer)
Date: May 5, 2005	By	/s/ Dale G. Reid
		Dale G. Reid
		Vice President, Controller and
		Chief Accounting Officer and Treasurer
		(Principal Accounting Officer)

37

EXHIBIT INDEX

10.1	2005 Annual Incentive Plan (filed herewith).
10.2	Administrative Rules for the Total Shareholder Return Incentive Compensation Program (as amended as of January 1, 2005), and Form of Total Shareholder Return Incentive Compensation Plan Agreement effective as of January 1, 2005 (filed herewith).
10.3	Form of Restricted Stock Agreement dated February 24, 2005 (filed herewith).
10.4	Key Employee Performance Plan, as amended (filed herewith).
10.5	Form of Amended and Restated Change in Control Severance Agreement (filed herewith).
10.6	2000 Incentive Plan (as amended) (filed herewith)
31.1	Certification of Chief Executive Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
31.2	Certification of Chief Financial Officer required by Securities and Exchange Commission Rule 13a – 14(a) or 15d – 14(a) (filed herewith).
32.1	Certification pursuant to 18 U.S.C. Section 1350 (filed herewith).

38

EX-10.1

                                                                    EXHIBIT 10.1

                                             [ALLEGHENY TECHNOLOGIES LOGO]
                                         Specialty Materials That Make Our World

                            THE ANNUAL INCENTIVE PLAN
                                  FOR YEAR 2005

                                                                        May 2005





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

Calculation of the Annual Incentive Plan Award                                      2
     Target Bonus Percentage                                                        2
     Performance Goals and the Target Bonus Percentage                              2
     2005 Performance Goals                                                         3

How the AIP Incentive Award is Calculated When All Goals                            4
Are 100% Achieved

How the AIP Incentive Award is Calculated for Other Achievement Levels              5
     Maximums and Minimums                                                          5

Additional Guidelines for the Annual Incentive Plan                                 6
     Discretionary Adjustments                                                      6
     Some Special Circumstances                                                     6
     Making Payments                                                                6

Administration Details                                                              7




AT A GLANCE

WHAT IS THE ANNUAL INCENTIVE PLAN?

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

WHO IS ELIGIBLE FOR THIS PLAN?

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

HOW DOES THE ANNUAL INCENTIVE PLAN WORK?

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

- -     For purposes of the Plan, base salary is generally the manager's annual
      base salary rate as of the end of the year, excluding any commission or
      other incentive pay. For some special circumstances affecting the amount
      of base salary used in the Plan, see page 6.

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

- -     The target bonus percentage will be adjusted (upward or downward) based on
      the extent to which various performance goals are achieved. Under the plan
      for 2005, all of the adjustment will be based on company performance.

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

                                     Page 1



CALCULATION OF THE ANNUAL INCENTIVE PLAN AWARD

TARGET BONUS PERCENTAGE

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

Generally, the target bonus percentage is the percentage of base salary that can
be earned as an award under the Plan if 100% of the various performance goals
are achieved. For 2005, if 100% of the performance goals are achieved, 100% of
the target bonus percentage can be earned.

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

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

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

The Committee may change the goals and objectives for the Plan at any time.

PERFORMANCE GOALS AND THE TARGET BONUS PERCENTAGE

An AIP award is based on the extent to which specified, preestablished
performance objectives are achieved. For 2005, AIP awards will be based on the
extent to which the participant's company achieves specified levels of
achievement as to:

- -     Operating Earnings

- -     Operating Cash Flow

- -     Manufacturing Improvements

- -     Safety and Environmental Improvements

- -     Customer Responsiveness Improvements

For operating company presidents, 80% of the goals' overall weight will be based
on the performance of the president's operating company, and 20% of the goals'
overall weight will be based on corporate level performance.

For corporate staff employees, performance will be measured completely at the
corporate level.

                                     Page 2



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

The achievements attributable to each performance goal as noted above, then will
be added together, and that sum will be multiplied by: (1) the individual's
target bonus percentage, times (2) the individual's annual base salary, to
produce the amount, if any, of the incentive award for 2005.

Note that potential adjustments are described on page 6.

2005 PERFORMANCE GOALS

The performance goals for 2005 generally consist of:

                                                        
- - Operating Earnings                                       40%
- - Operating Cash Flow                                      30%
- - Manufacturing Improvements                               10%
- - Safety and Environmental Improvements                    10%
- - Customer Responsiveness Improvements                     10%



Targeted achievements as to each performance goal above have been set for each
operating company and for corporate staff. Together the above goals comprise
100% of the target bonus percentage.

No annual incentive will be paid if the achievement of Operating Earnings is
less than the established applicable minimum of Operating Earnings,
notwithstanding the achievements as to the other applicable performance goals
for 2005.

A prerequisite to any AIP award is compliance with Allegheny Technologies'
Corporate Guidelines for Business Conduct.

                                     Page 3



HOW THE AIP INCENTIVE AWARD IS CALCULATED WHEN ALL GOALS ARE 100% ACHIEVED

For the Year 2005, if 100% of the performance goals are achieved, then 100% of
the target bonus percentage will be credited to the participant:



                                     Goal % of
             Goals                    Target       Goal Achieved %  Earned % of Target *
             -----                   ---------     ---------------  --------------------
                                                           
Operating Earnings                     40%             100%               40%

Operating Cash Flow                    30%             100%               30%

Mfg. Improvements                      10%             100%               10%

Safety and Envir. Improvements         10%             100%               10%

Customer Resp. Improvements            10%             100%               10%
                                      ---                                ---
Total                                 100%                               100%


*Earned % of Target = Goal % of Target X Goal Achieved %

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

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

                                                          
Earned Percentage of Target                                  100%

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



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

                                     Page 4



HOW THE AIP INCENTIVE AWARD IS CALCULATED FOR OTHER ACHIEVEMENT LEVELS

The percentage of a goal achieved will determine the earned percentage of target
for that particular goal. The earned percentage of target will be interpolated
for achievement between the established minimum level and the established target
level for a particular goal. Similarly, the earned percentage of target will be
interpolated for achievement between the established target level and the
established maximum level for a particular goal.

Maximums and Minimums

- -     Generally, the maximum percentage calculated as an earned percentage of
      target for any goal is 200%, and the overall maximum incentive award that
      an individual can earn under the weighting formula is 200% of his or her
      target bonus percentage.

- -     Where the established minimum of a performance goal is achieved, only 50%
      of that goal's share will be allocated to his or her target bonus
      percentage.

- -     Where less than the established minimum of a performance goal is achieved,
      no amount of that goal will be allocated to his or her target bonus
      percentage.

No annual incentive will be paid if the achievement of Operating Earnings is
less than the established applicable minimum of Operating Earnings,
notwithstanding the achievements as to the other applicable performance goals
for 2005.

                                     Page 5



ADDITIONAL GUIDELINES FOR THE ANNUAL INCENTIVE PLAN

DISCRETIONARY ADJUSTMENTS

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

SOME SPECIAL CIRCUMSTANCES

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

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

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

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

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

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

- -     A prerequisite to any AIP award is compliance with Allegheny Technologies'
      Corporate Guidelines for Business Conduct.

MAKING PAYMENTS

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


                                     Page 6



ADMINISTRATION DETAILS

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

- -     Interpret the Plan;

- -     Designate eligible participants and categories of eligible participants;

- -     Set the terms and conditions of incentive awards; and

- -     Establish and modify administrative rules for the Plan.

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

Executive Vice President,
Human Resources, Chief Legal and Compliance Officer,
General Counsel and Secretary
Allegheny Technologies Incorporated
1000 Six PPG Place
Pittsburgh PA  15222 5479
Phone: 412-394-2836              Fax: 412-394-2837

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

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

                                     Page 7

EX-10.2

                                                                    EXHIBIT 10.2

                       ALLEGHENY TECHNOLOGIES INCORPORATED

                               2000 INCENTIVE PLAN

                          ADMINISTRATIVE RULES FOR THE

             TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM

                         EFFECTIVE AS OF JANUARY 1, 2001

                  (AS AMENDED EFFECTIVE AS OF JANUARY 1, 2005)

ARTICLE I. ADOPTION AND PURPOSE OF THE PROGRAM

            1.01 ADOPTION. These rules are adopted by the Personnel and
      Compensation Committee and the Stock Incentive Award Subcommittee of the
      Board of Directors as a part of the Allegheny Technologies Incorporated
      2000 Incentive Plan (the "Plan") pursuant to the authority reserved in
      Section 3.01 of the Plan. The Total Shareholder Return Incentive
      Compensation Program (the "TSRP") shall be the guidelines for making
      certain Performance Awards or Other Stock-Based Awards under Article VIII
      of the Plan. Capitalized terms used but not defined in these rules shall
      have the same meanings as in the Plan.

            1.02 PURPOSE. The purposes of the TSRP are (i) to assist the
      Corporation in retaining and motivating selected key management employees
      of the Corporation and its subsidiaries who will contribute to the success
      of the Corporation, (ii) to reward key management employees for the
      overall success of the Corporation as determined by the value created for
      shareholders as measured by the percentile performance of Corporation
      Common Stock relative to a peer group and (iii) to provide a means of
      encouraging key management employees to acquire and hold shares of
      Corporation Common Stock. The TSRP encourages key management employees to
      acquire and hold shares of Corporation Common Stock by offering them an
      opportunity to receive shares of Common Stock which, in accordance with
      the terms and conditions set forth below, will be earned only if the sum
      of the price and yield of the Common Stock measured against the sums of
      prices and yields of shares of common stock of a peer group of
      corporations meets or exceeds the performance reward relationships set at
      the beginning of an Award Period. Awards under the TSRP are intended to
      act as an incentive to participating key management employees to achieve
      long-term objectives that will inure to the benefit of all stockholders of
      the Corporation measured in terms of relative stock prices.

ARTICLE II. DEFINITIONS

      For purposes of these rules, the capitalized terms set forth below shall
      have the following meanings:

            2.01 AWARD AGREEMENT means a written agreement between the
      Corporation and a Participant or a written acknowledgment from the
      Corporation specifically setting forth the terms and conditions of a TSR
      Target Award granted to a Participant pursuant to Article VI of these
      rules.

                                       1


            2.02 AWARD TARGETS means the percentage of a TSR Target Award which
      shall be earned for a particular TSR Performance Period at Threshold,
      Target, Excellent and Outstanding, respectively.

            2.03 BOARD means the Board of Directors of the Corporation.

            2.04 BUSINESS DAY means any day on which the New York Stock Exchange
      shall be open for trading.

            2.05 CAUSE means a determination by the Committee that a Participant
      has engaged in conduct that is dishonest or illegal, involves moral
      turpitude or jeopardizes the Corporation's right to operate its business
      in the manner in which it is now operated.

            2.06 CHANGE IN CONTROL means any of the events set forth below:

                 (a) The acquisition in one or more transactions, other than
      from the Corporation, by any individual, entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act) of a number of Corporation Voting Securities in excess of 25% of the
      Corporation Voting Securities unless such acquisition has been approved by
      the Board; or

                 (b) Any election has occurred of persons to the Board that
      causes two-thirds of the Board to consist of persons other than (i)
      persons who were members of the Board on January 1, 2001 and (ii) persons
      who were nominated for election as members of the Board at a time when
      two-thirds of the Board consisted of persons who were members of the Board
      on January 1, 2001; provided, however, that any person nominated for
      election by the Board at a time when at least two-thirds of the members of
      the Board were persons described in clauses (i) and/or (ii) or by persons
      who were themselves nominated by such Board shall, for this purpose, be
      deemed to have been nominated by a Board composed of persons described in
      clause (i); or

                 (c) Approval by the stockholders of the Corporation of a
      reorganization, merger or consolidation, unless, following such
      reorganization, merger or consolidation, all or substantially all of the
      individuals and entities who were the respective beneficial owners of the
      Outstanding Stock and Corporation Voting Securities immediately prior to
      such reorganization, merger or consolidation, following such
      reorganization, merger or consolidation beneficially own, directly or
      indirectly, more than 60% of, respectively, the then outstanding shares of
      common stock and the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors or
      trustees, as the case may be, of the entity resulting from such
      reorganization, merger or consolidation in substantially the same
      proportion as their ownership of the Outstanding Stock and Corporation
      Voting Securities immediately prior to such reorganization, merger or
      consolidation, as the case may be; or

                 (d) Approval by the stockholders of the Corporation of (i) a
      complete liquidation or dissolution of the Corporation or (ii) a sale or
      other disposition of all or substantially all the assets of the
      Corporation.

                                       2


            2.07 COMMITTEE means the Stock Incentive Award Committee of the
      Board, in the case of individuals who are executive officers of the
      Corporation, and the Personnel and Compensation Committee of the Board, in
      the case of individuals who are not executive officers of the Corporation.

            2.08 CORPORATION means Allegheny Technologies Incorporated, a
      Delaware corporation, and its successors.

            2.09 CORPORATION VOTING SECURITIES means the combined voting power
      of all outstanding voting securities of the Corporation entitled to vote
      generally in the election of the Board.

            2.10 DATE OF GRANT means the date as of which a TSR Target Award is
      granted in accordance with Article VI of these rules.

            2.11 DISABILITY means any physical or mental injury or disease of a
      permanent nature which renders a Participant incapable of meeting the
      requirements of the employment performed by such Participant immediately
      prior to the commencement of such disability. The determination of whether
      a Participant is disabled shall be made by the Committee in its sole and
      absolute discretion. Notwithstanding the foregoing, if a Participant's
      employment by the Corporation or an applicable subsidiary terminates by
      reason of a disability, as defined in an Employment Agreement between such
      Participant and the Corporation or an applicable subsidiary, such
      Participant shall be deemed to be disabled for purposes of the TSRP.

            2.12 EFFECTIVE DATE means January 1, 2001.

            2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
      amended.

            2.14 EXCELLENT means a relative level of achievement of Performance
      Reward Criteria at which the TSR for the Corporation for a TSR Performance
      Period is at a percentile of the TSR for the Peer Group for that
      Performance Period as determined by the Committee under Section 6.02.
      Excellent shall be the next to the highest level of performance for which
      a TSRP Reward will be paid.

            2.15 FAIR MARKET VALUE means, as of any given date, the closing
      price of the Common Stock on such date as reported on the New York Stock
      Exchange or, if the Common Stock is not then traded on the New York Stock
      Exchange, on such other national securities exchange on which the Common
      Stock is admitted to trade, or, if none, on the National Association of
      Securities Dealers Automated Quotation System if the Common Stock is
      admitted for quotation thereon; provided, however, if there were no sales
      reported as of such date, Fair Market Value shall be computed as of the
      last date preceding such date on which a sale was reported; provided,
      further, that if any such exchange or quotation system is closed on any
      day on which Fair Market Value is to be determined, Fair Market Value
      shall be determined as of the first date immediately preceding such date
      on which such exchange or quotation system was open for trading.

            2.16 OUTSTANDING means a relative level of Performance Reward
      Criteria at which the Corporation TSR for a particular TSR Performance
      Period is at a percentile of TSR for the Peer

                                       3


      Group for that TSR Performance Period as determined by the Committee under
      Section 6.02. Outstanding shall be the highest level of performance for
      which a TSRP Reward will be paid.

            2.17 OUTSTANDING STOCK means, at any time, the issued and
      outstanding Common Stock.

            2.18 PARTICIPANT means any key management employee selected by the
      Committee, pursuant to Section 5.01 of these rules, as eligible to
      participate under the TSRP for any one or more TSR Performance Period.

            2.19 PEER GROUP means a group of corporations with publicly traded
      common stock listed on a national securities exchange(s) deemed comparable
      to the Corporation as the number and identity of such group is determined
      by the Committee, in its discretion, for a particular TSR Performance
      Period. In the event of bankruptcy, delisting, merger, spin-off or other
      special circumstances affecting members of the Peer Group during a
      Performance Period, the Committee shall make such adjustments in the Peer
      Group as the Committee determines appropriate in its discretion. The
      Committee may select the number and identity of members of the Peer Group
      separately for each TSR Performance Period.

            2.20 PERFORMANCE REWARD CRITERIA means the relative standing of the
      Corporation TSR, expressed in percentiles and ranked at Threshold, Target,
      Excellent and Outstanding, as compared to the TSR for the Peer Group, in
      each case for a particular TSR Performance Period.

            2.21 PERFORMANCE LEVEL means the level of actual achievement of
      Performance Reward Criteria for a particular TSR Performance Period. In
      determining final Performance Levels, the Committee shall use
      straight-line interpolation between Threshold and Target, Target and
      Excellent and Excellent and Outstanding but there shall be no
      interpolation above Outstanding or below Threshold.

            2.22 PLAN means the Allegheny Technologies Incorporated 2000
      Incentive Plan, as the same may be amended from time to time.

            2.23 RETIREMENT means a termination of employment with the
      Corporation and each subsidiary of the Corporation, with the consent of
      the Corporation, at or after (i) attaining age 55 and (ii) completing five
      years of employment with the Corporation and/or any subsidiary of the
      Corporation.

            2.24 TARGET means a relative level of Performance Reward Criteria at
      which the Corporation TSR for a particular TSR Performance Period is at a
      percentile of TSR for the Peer Group for that TSR Performance Period as
      determined by the Committee under Section 6.02.

            2.25 THRESHOLD means a relative level of Performance Reward Criteria
      at which the Corporation TSR for a particular TSR Performance Period is at
      a percentile of TSR for the Peer Group for that TSR Performance Period as
      determined by the Committee under Section 6.02. Threshold shall be the
      lowest level of Performance Reward Criteria for which a Plan Reward will
      be earned.

                                       4


            2.26 TSR is the percentile ranking of the sum of stock price
      appreciation of and dividend reinvestment with respect to a share of
      Corporation Stock as compared to the comparable amount among the Peer
      Group for a particular TSR Performance Period as calculated on the Fair
      Market Value of a share of Stock as of the end of the TSR Performance
      Period plus dividends paid on a share of stock during the TSR Performance
      Period divided by the Fair Market Value of a share of Stock at the
      beginning of the TSR Performance Period using the methodology described in
      item 402(l) of Regulation S-K as promulgated under the Securities Act, as
      such act or regulation may be amended from time to time, or any successor
      to either.

            2.27 TSRP means the Total Shareholder Return Incentive Compensation
      Program as set forth in these rules as the same may be amended from time
      to time.

            2.28 TSR PERFORMANCE PERIOD means a three calendar year period
      beginning on the January 1st designated by the Committee and continuing
      until the third December 31st thereafter.

            2.29 TSR REWARDS means the number of shares of Stock earned for a
      particular TSR Performance period after application of the Performance
      Level.

            2.30 TSR TARGET AWARD means an award of an opportunity to earn a
      number of shares of Stock in a TSR Performance Period. The number of
      shares for a particular Participant shall be determined by the Committee
      for each TSR Performance Period by dividing the Participant's base salary
      at the commencement of the TSR Performance Period or, for the 2004-2006
      performance period and thereafter, at the base salary set on or before the
      date the Target Award is made, by the average Fair Market Value for the 30
      Business Days preceding the first Business Day of that TSR Performance
      Period and multiplying the result by a decimal determined appropriate by
      the Committee based on the Participant's responsibilities and opportunity
      to contribute to the success of the Corporation.

            2.31 STOCK means Common Stock, par value $0.10 per share, of the
      Corporation.

            2.32 WITHHOLDING OBLIGATIONS means the amount of federal, state and
      local income and payroll taxes the Corporation determines in good faith
      must be withheld with respect to a TSR Reward. Withholding Obligations may
      be settled by the Participant, as permitted by the Committee in its
      discretion, in shares of Stock otherwise deliverable under the TRSP, cash,
      previously owned shares of Stock or any combination of the foregoing.

ARTICLE III. ADMINISTRATION

            In addition to any power reserved to the Committee under Article III
      of the Plan, the TSRP shall be administered by the Committee, which shall
      have exclusive and final authority and discretion in each determination,
      interpretation or other action affecting the TSRP and its Participants,
      and the Committee shall have the sole and absolute authority and
      discretion to interpret the TSRP, to modify these administrative rules for
      the TSRP, to select, in accordance with Section 5.01 of these rules, the
      persons who will be Participants hereunder, to determine all performance
      criteria, levels of awards and rewards payable, to impose such conditions
      and restrictions as it determines appropriate and to take such other
      actions and make such other determinations in connection with the TSRP as
      it may deem necessary or advisable, in all cases in accordance with, and
      subject to, the provisions of the charter of the Committee.

                                       5


ARTICLE IV. STOCK ISSUABLE UNDER THE TSRP

            4.01 NUMBER OF SHARES OF STOCK ISSUABLE. Subject to adjustments as
      provided in Section 11.07 of the Plan, the maximum number of shares of
      Stock available for issuance under the TSRP shall be 4,500,000. The Stock
      to be offered under the TSRP shall be authorized and unissued Stock, or
      Stock which shall have been reacquired by the Corporation and held in its
      treasury.

            4.02 SHARES SUBJECT TO TERMINATED AWARDS. Shares of Stock forfeited
      as provided in Section 6.03 of these rules may again be issued under the
      TSRP.

ARTICLE V. PARTICIPATION

            5.01 DESIGNATION OF PARTICIPANTS. Participants in the TSRP shall be
      such key management employees of the Corporation or of its subsidiaries as
      the Committee, in its sole discretion, may designate as eligible to
      participate in the TSRP for any one or more TSR Performance Periods. No
      later than 90 days after the commencement of each TSR Performance Period
      during the term of the TSRP, the Committee shall designate the
      Participants who are eligible to participate in the TSRP during such TSR
      Performance Period. The Committee's designation of a Participant with
      respect to any TSR Performance Period shall not require the Committee to
      designate such person as a Participant with respect to any other TSR
      Performance Period. The Committee shall consider such factors as it deems
      pertinent in selecting Participants. The Committee shall promptly provide
      to each person selected as a Participant written notice of such selection.

ARTICLE VI. GRANTS UNDER THE TSRP

            6.01 ANNUAL DETERMINATION REGARDING TSR PERFORMANCE PERIOD. No later
      than the 60th day of each calendar year, the Committee shall determine
      whether to establish a TSR Performance Period, provided, however, for a
      TSR Performance Period established in calendar year 2001, the Committee
      may make a determination under this Section 6.01 at any time prior to the
      90th day of calendar year 2001.

            6.02 DETERMINATION OF GRANTS, AWARDS AND PERFORMANCE CRITERIA. For
      each TSR Performance Period, the Committee shall take the following
      actions no later than the 90th day of the first calendar year of that TSR
      Performance Period:

                  (a) Identify Participants for that TSR Performance Period;

                  (b) Establish the level of the TSR Target Awards for each
            Participant;

                  (c) Set the Performance Reward Criteria in terms of percentile
            ranking among the Peer Group for such period at Threshold, Target,
            Excellent and Outstanding, respectively;

                  (d) Set the Award Targets for Threshold, Target, Excellent and
            Outstanding; and

                                       6


                  (e) Determine the Peer Group for that TSR Performance Period.

            6.03 TERMINATION OF EMPLOYMENT. If a Participant terminates
      employment with the Corporation and each subsidiary of the Corporation
      during a then uncompleted TSR Performance Period for reasons other than
      death, Disability or Retirement, any TSR Target Award for any then
      uncompleted TSR Performance Period shall be forfeited automatically and
      the shares represented by such TSR Target Awards shall again be eligible
      for awards under these Rules. If a Participant terminates employment with
      the Corporation and each subsidiary of the Corporation for reasons of
      death, Disability or Retirement during a then uncompleted TSR Performance
      Period, the Participant shall be entitled to receive a pro rata Plan
      Reward for each then uncompleted TSR Performance Period determined:

                  (a) when the TSR Rewards for all other Participants in such
            TSR Performance Period(s) are determined;

                  (b) based on the actual level of achievement of Performance
            Reward Criteria for that TSR Performance Period and the
            Participant's TSR Target Award;

                  (c) pro rated by multiplying the number of shares of Stock the
            Participant would have received if the Participant completed the TSR
            Performance Period multiplied by a fraction, the numerator of which
            is the number of months of such TSR Performance Period completed
            before the Participant's termination of employment and the
            denominator is 36; and

                  (d) certificates representing the number determined above
            shall be delivered at the same time as all other certificates for
            such TSR Performance Period are delivered to Participants who
            completed the TSR Performance Period.

ARTICLE VII. DETERMINATION OF PERFORMANCE REWARD CRITERIA AND DELIVERY OF STOCK

            7.01 DETERMINATION OF ACTUAL ACHIEVEMENT OF PERFORMANCE REWARD
      CRITERIA. As promptly as administratively feasible but in no event later
      than the March 1st of the calendar year following last calendar year of
      each TSR Performance Period, the Committee shall determine the TSR of the
      Corporation and the average TSR of each member of the Peer Group and
      determine the Performance Level, if any, at which the Performance Reward
      Criteria have been achieved.

            7.02 DETERMINATION OF PLAN REWARDS. Plan Rewards for a particular
      TSR Performance Period for a particular participant shall be the result of
      multiplying that Participant's TSR Target Award by the Performance Level
      for that TSR Performance Period determined under Section 7.01.

            7.03 DELIVERY OF STOCK CERTIFICATES. As promptly as administratively
      feasible after the but in no event later than the March 15th of the
      calendar year following the last calendar year of a TSR Performance
      Period, the Corporation shall prepare for each Participant due a Plan
      Reward under Section 7.02 one or more stock certificates registered in the
      name(s) indicated by such Participant and shall deliver such certificates
      to the Participant promptly following the Participant's settlement of the
      Withholding Obligations by placing such certificates or causing

                                       7


      such certificates to be placed in the U.S. mail, postage prepaid, to the
      address indicated by the Participant.

ARTICLE VIII. MISCELLANEOUS

            8.01 APPLICATION OF PROVISIONS OF PLAN. Except as set forth in these
      Rules, the provisions of the Plan, including, but not limited to, Article
      X, the Terms Applicable Generally to Awards Granted under the Plan, shall
      apply to these Rules and are incorporated herein as if set forth at
      length.

            8.02 CHANGE IN CONTROL. In the event of a Change in Control, Plan
      Rewards shall be determined for all then uncompleted TSR Performance
      Periods as of the date of the Change in Control at the greater of (i) the
      Performance Level actually attained prior to the Change in Control and
      projected for the remainder of such uncompleted TSR Performance Periods or
      (ii) Target for each such uncompleted TSR Performance Period and
      certificates (or, with the consent of the Committee an amount in cash
      representing the Fair Market Value of such certificates) representing the
      Plan Rewards shall be delivered to the Participant as soon after the
      Change in Control as is administratively feasible.

            8.03 SECURITIES LAWS AND SECTION 162(m) RESTRICTIONS. Any TSR Award
      denominated in Common Stock shall be subject to the requirement that if at
      any time the Committee shall determine that any listing or registration of
      the shares of Common Stock or any consent or approval of any governmental
      body or any other agreement or consent is necessary or desirable as a
      condition to the granting of a TSR Award or issuance of shares of Common
      Stock or cash in satisfaction thereof, such grant of an award or issuance
      of shares of Common Stock may not be consummated unless such requirement
      is satisfied in a manner acceptable to the Committee. It is intended,
      unless the Committee determine otherwise, that the TSRP comply with Rule
      16b-3 as issued by the Securities and Exchange Commission and Section
      162(m) of the Code. All interpretations of the TSRP relating to Statutory
      Insiders shall be consistent with that Rule 16b-3, the Exchange Act and
      Section 162(m) of the Code. In order to maintain compliance with any of
      Rule 16b-3, the Exchange Act or the Code, the Committee may adopt such
      other rules or provide restrictions on outstanding TSR Awards as it in its
      discretion shall deem necessary and such rules or restrictions shall apply
      to outstanding TSR Awards as if set forth in the respective TSR Award
      Agreements.

            8.04 INVESTMENT REPRESENTATION. Each TSR Award Agreement may provide
      that the Participant shall deliver to the Committee upon demand by the
      Committee a written representation that the shares of Common Stock to be
      delivered are acquired by the Participant for investment and not for
      resale or with a view to the distribution thereof. Upon demand, delivery
      of such representation prior to the delivery of shares of Common Stock
      shall be a condition precedent to the Participant's right to receive such
      shares of Common Stock.

            8.05 NO RIGHTS AS STOCKHOLDERS. Participants shall have no rights as
      shareholders of the Corporation prior to the actual delivery of shares of
      Common Stock. The existence of these Rules and/or any TSR Awards then
      outstanding shall not be a bar or affect in any way the power or authority
      of the Corporation or any of its then stockholders to take any action
      regarding the Corporation, its assets or its capital structure.

                                       8


            8.06 NON-UNIFORM DETERMINATIONS. The actions and determinations of
      the Committee need not be uniform and may be taken or made by the
      Committee selectively among employees or Participants, whether or not
      similarly situated.

            8.07 AMENDMENT AND TERMINATION OF RULES. The Committee shall have
      complete power and authority to amend or terminate these Rules at any time
      it is deemed necessary or appropriate. No termination or amendment of the
      Rules may, without the consent of the Participant to whom any award shall
      theretofore have been granted under the TSRP, adversely affect the right
      of such individual under such award; provided, however, that the Committee
      may, in its sole discretion, make such provision in the Award Agreement
      for amendments which, in its sole discretion, it deems appropriate.

                                       9


                                     Form of
             TOTAL SHAREHOLDER RETURN INCENTIVE COMPENSATION PROGRAM
                                 AWARD AGREEMENT

Allegheny Technologies Incorporated (the "COMPANY") and the award recipient
named below ("PARTICIPANT") enter into this Total Shareholder Return Incentive
Compensation Program Agreement effective as of January 1, 2005.

Participant:       [name]
                   PARTICIPANT TO COMPLETE THE FOLLOWING CHART
                   (Please print)

Street Address         ____________________________________________

City/State/Zip Code    ____________________________________________

Social Security Number ____________________________________________

WHEREAS, the Company has adopted the Allegheny Technologies Incorporated 2000
Incentive Plan (the "PLAN") and, in accordance with the Plan, has adopted
Administrative Rules for the Total Shareholder Return Incentive Compensation
Program, as amended (the "TSRP") as a portion of the Plan to (i) assist the
Company retain and motivate key management employees; (ii) reward key management
employees for the overall success of the Company; and (iii) provide a means of
encouraging key management employees to acquire and hold shares of Company
Common Stock.

WHEREAS, the TSRP provides that each TSR Target Award made under the TSRP shall
be evidenced by an Award Agreement between the Company and the key management
employee who receives a TRS Target Award under the TSRP setting forth the terms
and conditions of such TSR Target Award;

WHEREAS, the Company desires to make a TSR Target Award to the Participant and
evidence such TSR Target Award by this Award Agreement and the Participant,
having read and understood the Plan and the TSRP, is willing to enter into this
Award Agreement on the terms and conditions set forth herein.

NOW THEREFORE, in consideration of the covenants and agreements herein contained
and intending to be legally bound, the parties hereto agree with each other as
follows:

Subject to the attainment of the Performance Levels described below and to the
terms and conditions of the Plan, the TSRP and the Terms and Conditions of Award
attached hereto and incorporated herein by reference, by which Participant
agrees to be bound, the Company awards to Participant the Award described below,
with respect to the Performance Period described below:

                                       10


PERFORMANCE PERIOD: January 1, 2005 through December 31, 2007

TSR TARGET AWARD: [number of shares] Shares of Company Common Stock [equals
applicable base salary times [applicable TSR Target Award Level] (which is the
Participant's target award opportunity as a percent of salary) divided by
$21.615 (which is the average Closing Price for the 30 trading days prior to
January 1, 2005)]

PERFORMANCE LEVELS: The following table shows the performance award relationship
under the TSRP for the 2005 - 2007 performance period:



                            OUTCOME RELATIVE TO PEER GROUP TSR
                        -------------------------------------------
                        THREE-YEAR PERCENTILE     PERCENT OF TARGET
LEVEL OF PERFORMANCE       RANKING IN TSR           AWARD EARNED
- --------------------    ---------------------     -----------------
                                            
Below Threshold         Below 25th percentile            0%
Threshold               25th percentile                 50%
Target                  50th percentile                100%
Excellent               75th percentile                200%
Outstanding             90th percentile                300%


                  NOTE: Interpolation between points will be made on a straight
                  line basis on each scale. Below the 25th percentile and above
                  the 90th percentile, there will be no interpolation.

THE ACTUAL AWARD UNDER THE TSRP WILL EQUAL THE TSR TARGET AWARD TIMES THE
APPLICABLE PERCENT OF TARGET AWARD EARNED.

IN WITNESS WHEREOF, the parties hereto have executed this Total Shareholder
Return Incentive Compensation Program Award Agreement effective the day and year
first above written.

ALLEGHENY TECHNOLOGIES INCORPORATED

By: _____________________________________________________
    Title: Executive Vice President, Human Resources,
           Chief Legal & Compliance Officer

PARTICIPANT:                              WITNESS:
_____________________________________     _________________________________

                                       11


                       TERMS AND CONDITIONS OF TSRP AWARD

Section 1: Definitions

Capitalized words used but not defined below or elsewhere in these Terms and
Conditions shall have the meanings ascribed to them in the Plan.

"ADMINISTRATIVE RULES" or "TSRP" shall mean the Administrative Rules for the
TSRP adopted by the Committee effective January 1, 2001, as amended effective
February 24, 2005, as the same may be amended from time to time.

"AWARD" shall mean the grant of a TSR Target Award evidenced by this Award
Agreement.

"COMMITTEE" means the Personnel and Compensation Committee of the Board of
Directors for a Participant who is not a statutory insider of the Company for
the purposes of Section 16 of the Securities Exchange Act of 1934 and the Stock
Incentive Award Subcommittee of the Board of Directors for a Participant who is
a statutory insider.

"COMMON STOCK" shall mean the common stock, $0.10 par value per share, of
Allegheny Technologies Incorporated.

"COMPANY" shall mean Allegheny Technologies Incorporated and its subsidiaries,
unless the context requires otherwise.

"DISABILITY" shall mean the total and permanent disability of Participant as
determined by the Committee in its sole discretion.

"EXCELLENT" shall mean a relative standing of the Company's TSR as against the
TSR for the Peer Group, in each case for the TSR Performance Period, equal to or
greater than 75% but less than 90%.

"OUTSTANDING" shall mean a relative standing of the Company's TSR as against the
TSR for the Peer Group, in each case for the TSR Performance Period, equal to or
greater than 90%.

"PEER GROUP" shall mean the corporations listed on Exhibit 1 to this Award
Agreement, subject to the adjustments to such group as permitted under the
Administrative Rules.

"RETIREMENT" means a termination of employment with the Company and each of its
subsidiaries, with the consent of the Company, at or after (i) attaining age 55
and (ii) completing five years of employment with the Company and/or any
subsidiary of the Company.

"TARGET" shall mean a relative standing of the Company's TSR as against the TSR
of the Peer Group, in each case for the TSR Performance Period, of equal to or
greater than 50% but less than 75%.

"THRESHOLD" shall mean a relative standing of the Company's TSR as against the
TSR of the Peer Group, in each case for the TSR Performance Period, of equal to
or greater than 25% but less than 50%.

"TSR PERFORMANCE LEVEL" means the measure of Company TSR performance relative to
the Peer Group, as set forth on page 2 of this Award Agreement. In determining
the final Performance Level, the Committee shall use straight-line interpolation
between Threshold and Target, between Target and Excellent, and between
Excellent and Outstanding. No TSR Reward will be earned for a Performance Level
less than Threshold. No additional TSR Reward above Outstanding will be earned
for a Performance Level greater than Outstanding.

                                       12


Section 2: TSRP Award

2.1 Subject to the attainment of the TSR Performance Levels and to the terms and
conditions otherwise set forth in the Plan, the TSRP and this Award Agreement,
the Company awards to Participant the TSRP Award described in the first two
pages of this Award Agreement with respect to the Performance Period described
therein.

Section 3: Payment

3.1 Subject to the withholding obligations and any requirements of Section 4
then applicable, the Company shall deliver to the Participant certificates
representing the TSR Rewards, if any, for the TSR Performance Period within 75
days after the end of the TSR Performance Period.

3.2 If the Participant terminates employment with the Company and each
subsidiary of the Company during a then uncompleted TSR Performance Period for
reasons other than death, Disability or Retirement, any TSR Target Award for any
then uncompleted TSR Performance Period shall be forfeited automatically and the
shares represented by such TSR Target Awards shall again be eligible for awards
under the Rules.

3.3 If the Participant terminates employment with the Company and each
Subsidiary of the Company during a then uncompleted TSR Performance Period due
to the Participant's death, Disability, or Retirement, a pro rata award based on
the number of full months worked by the Participant during that Performance
Period will be calculated, based on goal achievement over the entire performance
period. Any award determined to be payable shall be paid after the end of the
applicable Performance Period.

Section 4: Miscellaneous

4.1 General Restriction. To the extent any TSR Target Award is denominated in
Common Stock under this Award Agreement, it shall be subject to the requirement
that if at any time the Committee shall determine that any listing or
registration of the shares of Common Stock or any consent or approval of any
governmental body or any other agreement or consent is necessary or desirable as
a condition of the issuance of shares of Common Stock or cash in satisfaction
thereof, such issuance of shares of Common Stock may not be consummated unless
such requirement is satisfied in a manner acceptable to the Committee. The
Company shall in no event be obligated to register any securities pursuant to
the Securities Act of 1933 (as the same shall be in effect from time to time) or
to take any other affirmative action to cause the issuance of shares pursuant to
the distribution of TSR Rewards to comply with any law or regulation of any
governmental authority.

4.2 Non-Assignability. No TSR Target Award granted under this Award Agreement
shall be assignable or transferable by the Participant, except by will or by the
laws of descent and distribution. During the life of the Participant, any TSR
Rewards shall be payable only to the Participant. No assignment or transfer of a
TSR Target Award or of the rights represented thereby, whether voluntary or
involuntary, by operation of law or otherwise (except by will or the laws of
descent and distribution), shall vest in the assignee or transferee any interest
or right herein whatsoever, and immediately upon

                                       13


such purported assignment or transfer, the TSR Target Awards shall terminate and
become of no further effect.

4.3 Withholding Obligations. Whenever the Company makes delivery under the Plan,
in whole or in part, the Company shall notify the Participant of the amount of
withholding for tax, if any, which must be paid under federal and, where
applicable, state and local law. The Company shall, in the discretion of the
Company, but with the consent of the Committee, arrange for payment for such
withholding for taxes in any one or combination of the following ways: (i)
acceptance of an amount in cash paid by the Participant; or (ii) reduction in
the number of shares to be issued by that number of shares which, in aggregate,
have a value equal to such withholding amount. If the full amount of the
required withholding is not recovered in the above manner, the Participant
shall, forthwith upon receipt of notice, remit the deficiency to the Company. No
shares of Common Stock shall be issued or delivered to the Participant (and/or
the Participant's designee) until all applicable withholding obligations shall
have been satisfied in full.

4.4 Delivery of Certificates. As soon as practicable after compliance by the
Participant with all applicable conditions including, but not limited to, the
satisfaction of the Withholding Obligations described in Section 4.3 hereof, the
Company will issue and deliver by mail, or cause delivery by mail, to the
Participant at the address specified by the Participant in writing, certificates
registered in the name of the Participant (and/or the Participant's designee)
for the number of shares of Common Stock which the Participant is entitled to
receive (subject to reduction for withholding as provided in Section 4.3 hereof)
under the provisions of this Award Agreement.

4.5 No Right to Employment. Nothing in the Plan or in this Award Agreement shall
confer upon the Participant the right to continue in the employ of the Company
or any subsidiary or affect any right that the Company or a subsidiary may have
to terminate the employment of the Participant.

4.6 Amendment or Termination of the Plan. The Plan, or any part thereof
(including the TSRP and/or Administrative Rules) may be terminated or may, from
time to time, be amended, each in accordance with the Plan, TSRP or
Administrative Rules, as applicable, provided, however, the termination or
amendment of the Plan, the Administrative Rules or TSRP shall not, without the
consent of the Participant, affect Participant's rights under this Award
Agreement.

4.7 Investment Representation. Under the federal and/or state securities laws,
the Participant may be required to deliver, and, if so, shall deliver, to the
Committee, upon demand by the Committee, at the time of any payment of Common
Stock, a written representation that the shares to be acquired are to be
acquired for investment and not for resale or with a view to the distribution
thereof. Upon such demand, delivery of such representation prior to delivery of
any shares shall be a condition precedent to the right of the Participant to
receive any shares.

4.8 No Rights as Shareholder. The Participant shall have no rights as a
stockholder of the Company with respect to shares of Common Stock subject to the
Award evidenced this Award Agreement unless and until a certificate for shares
of Common Stock is issued to the Participant.

                                       14


4.9 Adjustment of Award. In the event of any change or changes in the
outstanding Common Stock of the Company by reason of any stock dividend,
recapitalization, reorganization, merger, consolidation, split-up, combination
or exchange of shares or any rights offering to purchase a substantial amount of
Common Stock at a price substantially below fair market value or of any similar
change affecting the Common Stock, any of which takes effect after the first
grant of a TSR Target Award under this Award Agreement, the Committee may, in
its discretion, appropriately adjust the number of shares of Common Stock which
may be issued under this Award Agreement, the number of shares of Common Stock
subject to TSR Target Awards under this Award Agreement and any and all other
adjustments deemed appropriate by the Committee to prevent substantial dilution
or enlargement of the rights granted to the Participant in such manner as the
Committee shall deem appropriate. Any adjustment so made shall be final and
binding upon the Participant.

4.10 Awards Not a Bar to Corporate Event. The existence of the TSR Target Awards
granted hereunder shall not affect in any way the right or the power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issue of bonds, debentures, preferred or prior preference stocks ahead of or
affecting the Common Stock or the rights thereof, or the dissolution or
liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a
similar character or otherwise.

4.11 Not Income for Qualified Plans. No amounts of income received by an
Participant pursuant to this Award Agreement shall be considered compensation
for purposes of any pension or retirement plan, insurance plan or any other
employee benefit plan of the Company or any of its affiliates.

4.12 Meaning of Participant. Whenever the word "Participant" is used in any
provision of this Award Agreement under circumstances where the provision should
logically be construed to apply to the executors, the administrators, or the
person or persons to whom the TSR Target Awards may be transferred by will or by
the laws of descent and distribution, the word "Participant" shall be deemed to
include such person or persons.

4.13 Determinations of Committee. The actions taken and determinations of the
Committee made pursuant to this Award Agreement and of the Committee pursuant to
the Plan, the TSRP and the Administrative Rules shall be final, conclusive and
binding upon the Company and upon the Participant. No member of the Committee
shall be liable for any action taken or determination made relating to this
Award Agreement, the Plan, the TSRP, or the Administrative Rules if made in good
faith.

                                       15


EXHIBIT 1: LIST OF PEER COMPANIES (2005 - 2007 PERFORMANCE PERIOD)

AK Steel Corporation
Alcan, Inc.
Alcoa Inc.
Aleris International, Inc.
Carpenter Technology Corporation
IPSCO Steel, Inc.
International Steel Group Inc.
Kennametal Inc.
Nucor Corporation
Quanex Corporation
Reliance Steel & Aluminum Co.
RTI International Metals
Steel Dynamics
Titanium Metals Corporation
U.S. Steel Corporation

                                       16

EX-10.3

                                                                    EXHIBIT 10.3

                                     FORM OF
                           RESTRICTED STOCK AGREEMENT

      This Restricted Stock Agreement (the "Agreement") made as of the 24th day
of February, 2005 by and between ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware
corporation (the "Corporation") and ______________ (the "Employee").

      WHEREAS, the Corporation sponsors and maintains the Allegheny Technologies
Incorporated Stock 2000 Incentive Plan (the "Incentive Plan");

      WHEREAS, the Corporation desires to encourage the Employee to remain an
employee of the Corporation and, during such employment, to contribute
substantially to the financial performance of the Corporation and, to provide
that incentive, the Corporation has awarded the Employee an aggregate of _______
shares of restricted shares of the common stock of the Corporation, $0.10 par
value per share ("Common Stock"), [equal to (I) the applicable base salary times
__% (ii) divided by $$22.895 (which is the average of the high and low sales
prices of the Common Stock on the New York Stock Exchange on February 24, 2005)]
under the Incentive Plan subject to the terms and conditions set forth in this
Restricted Stock Agreement (together with any increases for dividends paid in
accordance with Paragraph 2(d) or adjustments as provided in Paragraph 8, below,
the "Restricted Shares");

      WHEREAS, half of the Restricted Shares are subject to the Corporation's
attainment of the performance requirements set forth in Paragraph 3(a) (the
"Performance Criteria"); and half of the Restricted Shares are subject to the
Employee's remaining an Employee (except in instances of death, disability or
Retirement as described below) during the Restriction Period set forth in
Paragraph 3(b), subject to accelerated termination of the Restriction in the
event of attainment of the Performance Criteria; and

      WHEREAS, the Corporation and the Employee desire to evidence the award of
the Restricted Shares and the terms and conditions applicable thereto in this
Restricted Stock Agreement.

      NOW THEREFORE, in consideration of the mutual promises and covenants
contained herein and intending to be legally bound, the Corporation and the
Employee agree as follows:

      1. Grant of Restricted Shares. The Corporation hereby grants to the
Employee, as of the date first written above, the Restricted Shares subject to
the restrictions and other terms and conditions set forth herein. Simultaneously
with the execution and delivery of this Agreement, the Employee shall deliver to
the Corporation a stock power endorsed in blank relating to the Restricted
Shares (including in such power any increases or adjustments to the Restricted
Shares).



As soon as practicable after the Date of Grant, the Corporation shall direct
that the Restricted Shares be registered in the name of and issued to the
Employee and initially bearing the legend described in Paragraph 6. The
Restricted Shares and any certificate or certificates representing the
Restricted Shares shall be held in the custody of the Corporation or its
designee until the expiration of the applicable Restrictions. Upon any
forfeiture in accordance with Paragraph 4 of the Restricted Shares, the
forfeited shares and any certificate or certificates representing the forfeited
Restricted Shares shall be canceled.

      2. Restrictions. Employee shall have all rights and privileges of a
stockholder of the Corporation with respect to the Restricted Shares, except
that the following restrictions shall apply:

      (a) None of the Restricted Shares may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the "Restriction Period"
as defined below, except to the extent of the Corporation's earlier attainment
of the Performance Criteria, as defined below.

      (b) The Restricted Shares are subject to forfeiture during the Restriction
Period in accordance with Paragraph 4 of this Agreement.

      (c) The Restricted Shares and any certificate representing the Restricted
Shares shall be held in custody by the Corporation or its designee until such
time as either the Performance Criteria are attained or the Restriction Period
shall have been completed.

      (d) Dividends paid with respect to the Restricted Shares during the
Restriction Period shall not be paid to the Employee and, instead, shall be
converted into additional shares of Restricted Stock at the price at which
shares of common stock of the Corporation are purchased under the Corporation's
outstanding dividend reinvestment program and on the date such purchases are
made and such shares of Restricted Stock shall be additions to the shares
subject to the Restrictions hereunder, provided, however, the Personnel and
Compensation Committee of the Board of Directors may, in its sole discretion,
determine at any time or from time to time, to pay such dividends in cash
directly to the Employee.

      3. Term of Restriction.

      (a) Subject to the forfeiture provisions of Paragraph 4 of this Agreement,
the Restrictions shall lapse (i) with respect to half of the Restricted Shares
on the earlier of (x) February 24, 2010 if the Employee is an employee of the
Corporation on February 24, 2010, unless the Employee's cessation of employment
was due to the Employee's death, disability or Retirement (as defined below), or
(y) as soon after the completion of the audit of the Corporation for the 2007
fiscal year as it may be determined that the Performance Criteria

                                       2


has been attained and (ii) with respect to half of the Restricted Shares, as
soon after the completion of the audit of the Corporation for the 2007 fiscal
year as it may be determined that the Performance Criteria have been attained.
With respect to the half of the Restricted Shares subject only to the
Performance Criteria, if the Corporation does not attain the Performance
Criteria as of the end of the three year measurement period ending December 31,
2007, such half of the Restricted Shares shall be forfeited immediately upon the
completion of that three-year measurement period.

      (b) For purposes of this Agreement, the "Performance Criteria" shall mean
that the net income of the Corporation, measured under GAAP, shall exceed $150
million, in the aggregate, for the 2005, 2006 and 2007 fiscal years of the
Corporation. The period for measuring the Performance Criteria shall end as of
December 31, 2007 and the Personnel and Compensation Committee shall as promptly
as possible following the completion of the audit of the Corporation for the
2007 fiscal year determine whether the Performance Criteria have been met.

      (c) The period from the Date of Grant until the lapse of the applicable of
the Restrictions with respect to the Restricted Shares is the "Restriction
Period" for purposes of this Agreement.

      (d) As soon as administratively practicable following the lapse of the
Restrictions without a forfeiture of the applicable Restricted Shares, and upon
the satisfaction of all other applicable conditions as to such Restricted
Shares, including, but not limited to, the payment by the Employee of all
applicable withholding taxes, if any, the Corporation shall deliver or cause to
be delivered to the Employee shares of Common Stock, which may be in the form of
a certificate or certificates for such shares, equal in number to the applicable
Restricted Shares, which shall not be subject to the transfer restrictions set
forth above and shall not bear the legend described in Paragraph 6. Without
limiting the foregoing, (i) if the Performance Criteria are met, all Restricted
Shares shall become non-forfeitable and such Shares or the certificate
representing such non-forfeitable shares of common stock of the Corporation
shall be delivered as described above and (ii) if the Performance Criteria are
not met, (x) half of the Restricted Shares shall be forfeited immediately after
the end of the measurement period for such Performance Criteria and (y) the
remaining half of the Restricted Shares shall be non-forfeitable, if at all, at
the end of the Restriction Period.

      4. Forfeiture of Restricted Shares. If Employee's employment with the
Corporation and all of its direct or indirect subsidiaries is terminated by
either party for any reason, including, but not limited to, the involuntary
termination of the Employee's employment with the Corporation for any reason,
with or without cause, other than the Employee's death, disability or retirement
with the consent of the Corporation when the Employee is at least 55 years of
age with at least

                                       3


five years of service ("Retirement"), (i) all rights of the Employee to the
Restricted Shares which remain subject to the Restrictions shall terminate
immediately and be forfeited in their entirety, and (ii) the forfeited
Restricted Shares and any stock certificate or certificates representing the
forfeited Restricted Shares shall be canceled. If the Employee dies or becomes
disabled during the Restriction Period, the Restricted Shares will immediately
vest. If the Employee retires with the consent of the Corporation when the
Employee is at least 55 years of age with at least five years of service, the
Employee (or the Employee's beneficiary) shall receive the Restricted Shares
when, if and to the extent, the Restrictions lapse under Paragraph 3.

      5. Change of Control. All Restricted Shares shall fully vest in the event
of a Change of Control as defined in the Incentive Plan.

      6. Legend. During the Restriction Period, the shares of Restricted Stock
and any share certificate or certificates evidencing the Restricted Shares shall
be endorsed with the following legend (in addition to any legend required under
applicable securities laws or any agreement by which the Corporation is bound):

      THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS
      SUBJECT TO THE TERMS AND CONDITIONS OF A RESTRICTED STOCK AGREEMENT
      ENTERED INTO BY AND BETWEEN ALLEGHENY TECHNOLOGIES INCORPORATED AND THE
      HOLDER OF THIS CERTIFICATE. A COPY OF SUCH AGREEMENT IS ON FILE AT THE
      OFFICE OF THE CORPORATION.

      7. Withholding. The Corporation or its direct or indirect subsidiary may
withhold from the number of Restricted Shares or from any cash amount payable
hereunder or any other cash payments due to Employee all taxes, including social
security taxes, which the Corporation or its direct or indirect subsidiary is
required or otherwise authorized to withhold with respect to the Restricted
Shares.

      8. Adjustments to Number of Shares. Any shares issued to Employee with
respect to the Restricted Shares in the event of any change in the number of
outstanding common stock of the Corporation through the declaration of a stock
dividend or a stock split or combination of shares or any other similar
capitalization change shall be deemed to be Restricted Shares subject to all the
terms set forth in this Agreement.

      9. No Right to Continued Employment; Effect on Benefit Plans. This
Agreement shall not confer upon Employee any right with respect to continuance
of his or her employment or other relationship, nor shall it interfere in any
way with the right of the Corporation or its direct or indirect subsidiary to
terminate his or her employment or other relationship at any time. Income
realized by

                                       4


Employee pursuant to this Agreement shall not be included in Employee's earnings
for the purpose of any benefit plan in which Employee may be enrolled or for
which Employee may become eligible unless otherwise specifically provided for in
such plan.

      10. Employee Representations. In connection with the issuance of the
Restricted Shares, Employee represents the following:

      (a) Employee has reviewed with Employee's own tax advisors, the federal,
state, local and foreign tax consequences of this Agreement and the transactions
contemplated hereby. Employee is relying solely on such advisors and not on any
statements or representations of the Corporation or any of its agents. Employee
understands that Employee (and not the Corporation) shall be responsible for
Employee's own tax liability that may arise as a result of this Agreement and
the transactions contemplated hereby.

      (b) Employee has received, read and understood this Agreement and the
Incentive Plan and agrees to abide by and be bound by their respective terms and
conditions.

      11. Miscellaneous.

      (a) Governing Law. This Agreement shall be governed and construed in
accordance with the domestic laws of the Commonwealth of Pennsylvania without
regard to such Commonwealth's principles of conflicts of laws.

      (b) Successors and Assigns. The provisions of this Agreement shall inure
to the benefit of, and be binding upon, the successors, permitted assigns,
heirs, executors and administrators of the parties hereto. Neither this
Agreement nor any rights hereunder shall be assignable or otherwise subject to
hypothecation without the consent of all parties hereto.

      (c) Entire Agreement; Amendment. This Agreement contains the entire
understanding between the parties hereto with respect to the subject matter of
this Agreement and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
with respect to the subject matter of this Agreement. This Agreement may not be
amended or modified without the written consent of the Corporation and Employee.

      (d) Counterparts. This Agreement may be executed simultaneously in any
number of counterparts, each of which when so executed and delivered shall be
taken to be an original and all of which together shall constitute one document.

                                       5


      (e) Definitions. Initially capitalized terms not otherwise defined in this
Restricted Stock Agreement shall have the meanings ascribed thereto in the
Incentive Plan.

      IN WITNESS WHEREOF, the parties have executed this Restricted Shares
Agreement as of the date first written above.

ALLEGHENY TECHNOLOGIES INCORPORATED

By: ______________________________________________________
    Title: Executive Vice President, Human Resources,
           Chief Legal & Compliance Officer

PARTICIPANT:                                 WITNESS:
________________________________             _________________________________

                                       6

EX-10.4

                                                                    EXHIBIT 10.4

                       ALLEGHENY TECHNOLOGIES INCORPORATED

                         KEY EXECUTIVE PERFORMANCE PLAN

                         EFFECTIVE AS OF JANUARY 1, 2004
                        AND AS AMENDED FEBRUARY 24, 2005

ARTICLE I. ADOPTION AND PURPOSE OF THE KEY EXECUTIVE PERFORMANCE PLAN

            1.01 ADOPTION. This Key Executive Performance Plan is adopted by the
      Personnel and Compensation Committee of the Board of Directors as a part
      of the Allegheny Technologies Incorporated executive compensation program
      effective January 1, 2004. The KEPP Payments, if any, earned under this
      Plan are intended as performance based compensation within the meaning of
      Section 162(m) of the Internal Revenue Code of 1986, as amended, as
      incentive compensation determined solely with reference to attainment in
      predetermined levels of Earnings and Operational Goals within the relevant
      Performance Period.

            1.02 PURPOSE. The purposes of the KEPP are (i) to direct the focus
      of key management employees to the achievement of goals deemed necessary
      for the success of the Corporation, (ii) to assist the Corporation in
      retaining and motivating selected key management employees of the
      Corporation and its subsidiaries who will contribute to the success of the
      Corporation and (iii) to reward key management employees for the overall
      success of the Corporation as determined with reference to predetermined
      levels of Earnings of the Corporation and attainment of Operational Goals.
      The KEPP is intended to act as an incentive to participating key
      management employees to achieve long-term objectives that will inure to
      the benefit of all stockholders of the Corporation measured in terms of
      achievement of predetermined levels of Earnings of the Corporation and
      attainment of Operational Goals.

            1.03 PLAN DOCUMENT. This KEPP plan document is intended as the plan
      document as adopted by the Committee, which will govern all Performance
      Periods of the KEPP beginning in or after 2004.

ARTICLE II. DEFINITIONS

      For purposes of this Plan, the capitalized terms set forth below shall
have the following meanings:

            2.01 AWARD means an opportunity to earn a KEPP Payment in a
      particular Performance Period. Each Award shall be denominated in dollars
      that can be earned upon



      attainment of predetermined Earnings thresholds (Level 1) and the maximum
      amount that may be paid with respect to Operational Goals before the
      application of Negative Discretion (Level 2).

            2.02 AWARD AGREEMENT means a written agreement between the
      Corporation and a Participant or a written acknowledgment from the
      Corporation specifically setting forth the terms and conditions of a KEPP
      Award granted to a Participant pursuant to Article VI of this Plan.

            2.03 BOARD means the Board of Directors of the Corporation.

            2.04 CAUSE means a determination by the Committee that a Participant
      has engaged in conduct that is dishonest or illegal, involves moral
      turpitude or jeopardizes the Corporation's right to operate its business
      in the manner in which it is now operated.

            2.05 CHANGE IN CONTROL means any of the events set forth below:

                  (a) The acquisition in one or more transactions, other than
      from the Corporation, by any individual, entity or group (within the
      meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial
      ownership (within the meaning of Rule 13d-3 promulgated under the Exchange
      Act) of a number of Corporation Voting Securities in excess of 25% of the
      Corporation Voting Securities unless such acquisition has been approved by
      the Board; or

                  (b) Any election has occurred of persons to the Board that
      causes two-thirds of the Board to consist of persons other than (i)
      persons who were members of the Board on January 1, 2001 and (ii) persons
      who were nominated for election as members of the Board at a time when
      two-thirds of the Board consisted of persons who were members of the Board
      on January 1, 2001; provided, however, that any person nominated for
      election by the Board at a time when at least two-thirds of the members of
      the Board were persons described in clauses (i) and/or (ii) or by persons
      who were themselves nominated by such Board shall, for this purpose, be
      deemed to have been nominated by a Board composed of persons described in
      clause (i); or

                  (c) Approval by the stockholders of the Corporation of a
      reorganization, merger or consolidation, unless, following such
      reorganization, merger or consolidation, all or substantially all of the
      individuals and entities who were the respective beneficial owners of the
      Outstanding Stock and Corporation Voting Securities immediately prior to
      such reorganization, merger or consolidation, following such
      reorganization, merger or consolidation beneficially own, directly or
      indirectly, more than 60% of, respectively, the then outstanding shares of
      common stock and the combined voting power of the then outstanding voting
      securities entitled to vote generally in the election of directors or
      trustees, as the case may be, of the entity resulting from such
      reorganization, merger or consolidation in substantially the same
      proportion as their ownership of the Outstanding Stock and Corporation
      Voting Securities immediately prior to such reorganization, merger or
      consolidation, as the case may be; or

                                       2


                  (d) Approval by the stockholders of the Corporation of (i) a
      complete liquidation or dissolution of the Corporation or (ii) a sale or
      other disposition of all or substantially all the assets of the
      Corporation.

            2.06 COMMITTEE means the Personnel and Compensation Committee of the
      Board.

            2.07 CORPORATION means Allegheny Technologies Incorporated, a
      Delaware corporation, and its successors.

            2.08 CORPORATION VOTING SECURITIES means the combined voting power
      of all outstanding voting securities of the Corporation entitled to vote
      generally in the election of the Board.

            2.09 DATE OF AWARD means the date as of which an Award is granted in
      accordance with Article VI of this Plan.

            2.10 DISABILITY means any physical or mental injury or disease of a
      permanent nature which renders a Participant incapable of meeting the
      requirements of the employment performed by such Participant immediately
      prior to the commencement of such disability. The determination of whether
      a Participant is disabled shall be made by the Committee in its sole and
      absolute discretion. Notwithstanding the foregoing, if a Participant's
      employment by the Corporation or an applicable subsidiary terminates by
      reason of a disability, as defined in an Employment Agreement between such
      Participant and the Corporation or an applicable subsidiary, such
      Participant shall be deemed to be disabled for purposes of the KEPP.

            2.11 EFFECTIVE DATE means January 1, 2004 and, for the amendment for
      grants made in or after 2005, February 24, 2005.

            2.12 EARNINGS means the earnings of the Corporation determined in
      accordance with generally accepted accounting principles, provided,
      however, for the 2005 through 2007 Performance Period, Earnings shall be
      expressed in terms of income before taxes.

            2.13 EXCHANGE ACT means the Securities Exchange Act of 1934, as
      amended.

            2.14 KEPP PAYMENT means the amount actually earned by a Participant
      in a particular Performance Period. Each KEPP Payment shall be the sum of
      the amounts earned by a Participant during a Performance Period as Level I
      and Level 2 achievement.

            2.15 LEVEL 1 means that portion of an Award that may be earned based
      on attainment of Earnings.

            2.16 LEVEL 2 means that portion of an Award that may be earned,
      after application of Negative Discretion by the Committee, based on
      attainment of Operational

                                       3


      Goals. The Level 2 portion of any Award shall be denominated in the
      maximum amount that may be earned with respect to Operational Goals prior
      to the application of Negative Discretion.

            2.16 NEGATIVE DISCRETION means the power of the Committee to be
      exercised solely in the Committee's discretion to reduce the Level 2
      portion of any Award. It is anticipated that the Committee will review
      with the Chief Executive Officer of the Corporation the relative
      attainment of Operational Goals during a particular Performance Period
      before the Committee exercises its Negative Discretion.

            2.17 OPERATIONAL GOALS means the goals set by the Committee at the
      commencement of a Performance Period to be attained by the Participants
      during the course of a particular Performance Period. Operational Goals
      will be set forth in terms of operating objectives and/or criteria, which
      may or may not be earnings measures that, in the judgment of the Committee
      after consultation with the Chief Executive Officer of the Corporation,
      will enhance the success of the Corporation during and beyond a particular
      Performance Period.

            2.18 PARTICIPANT means any key management employee selected by the
      Committee, pursuant to Section 5.01 of this Plan, as eligible to
      participate under the KEPP for any one or more Performance Period.

            2.18 PERFORMANCE PERIOD means a period of more than one fiscal year
      of the Corporation over which the attainment of Earnings and Operational
      Goals shall be measured.

            2.19 PLAN or KEPP means the Key Executive Performance Plan as set
      forth in this plan document or as the same may be amended from time to
      time.

            2.20 RETIREMENT means, with the consent of the Corporation, a
      termination of employment with the Corporation and each subsidiary of the
      Corporation at or after (i) attaining age 55 and (ii) completing five
      years of employment with the Corporation and/or any subsidiary of the
      Corporation.

            2.21 WITHHOLDING OBLIGATIONS means the amount of federal, state and
      local income and payroll taxes the Corporation determines in good faith
      must be withheld with respect to a KEPP Payment. Withholding Obligations
      may be settled by the Participant, as permitted by the Committee in its
      discretion, in cash, previously owned shares of common stock of the
      Corporation or any combination of the foregoing.

ARTICLE III. ADMINISTRATION

            In addition to any power reserved to the Committee under the
      governing documents of the Corporation, the KEPP shall be administered by
      the Committee, which shall have exclusive and final authority and
      discretion in each determination, interpretation or other action affecting
      the KEPP and its Participants. The Committee shall have the sole and

                                       4


      absolute authority and discretion to interpret the KEPP, to amend or
      modify this Plan for the KEPP, to select, in accordance with Section 5.01
      of this Plan, the persons who will be Participants hereunder, to set all
      Earnings thresholds and Operational Goals, to determine all performance
      criteria, levels of Awards and KEPP Payments payable, to determine, after
      review of the Corporation's financial reports, the degree to which any
      threshold of Earnings has been achieved for a Performance Period with
      respect to the Level 1 portion of any Award, to review the attainment of
      Operational Goals and exercise Negative Discretion with respect to the
      Level 2 portion of any Award, to impose such conditions and restrictions
      as it determines appropriate and to take such other actions and make such
      other determinations in connection with the KEPP as it may deem necessary
      or advisable.

ARTICLE IV. OVERVIEW OF KEPP

            4.01 CASH BONUS PLAN. KEPP is designed to pay cash bonuses to
      participating key executives after the end of a Performance Period based
      on the level (i) of achievement of predetermined Earnings thresholds and
      (ii) attainment of Operational Goals (to which the Committee may exercise
      Negative Discretion).

            4.02 LEVELS OF AWARDS. KEPP Awards are granted with two levels. The
      first level, Level 1, is a cash bonus payment based on achievement of
      Earnings that the Committee has no discretion to reduce. KEPP Payments
      earned under Level 1 will be earned solely with reference to Earnings
      attained during the Performance Period. The second level, Level 2 is a
      cash bonus payment based on level of attainment of Operational Goals that
      the Committee has the Negative Discretion to reduce. The Committee's
      judgment in exercising its Negative Discretion to arrive at a KEPP Payment
      under Level 2 is expected to be guided by the degree to which the
      Corporation generally or the participating key executives in particular
      have attained predetermined Operational Goals. The Committee is expected
      to review the level of attainment of Operational Goals with the Chief
      Executive Officer of the Corporation before exercising any Negative
      Discretion.

            4.03 PARTICIPATING KEY EXECUTIVES. It is intended that the number of
      participating key executives shall be limited to those key executives with
      the most direct influence on the attainment of Earnings and operational
      goals.

ARTICLE V. PARTICIPATION

            5.01 DESIGNATION OF PARTICIPANTS. Participants in the KEPP shall be
      such key management employees of the Corporation or of its subsidiaries as
      the Committee, in its sole discretion, may designate as eligible to
      participate in the KEPP for any one or more Performance Periods. No later
      than 90 days after the commencement of each Performance Period during the
      term of the KEPP, the Committee shall designate the Participants who are
      eligible to participate in the KEPP during such Performance Period. The
      Committee's designation of a Participant with respect to any Performance
      Period shall not require the Committee to designate such person as a
      Participant with respect to any other Performance Period. The Committee
      shall consider such factors as it deems pertinent in selecting
      Participants. The Committee shall promptly provide to each person selected
      as a

                                       5


      Participant written notice of such selection.

ARTICLE VI. GRANTS UNDER THE KEPP

            6.01 ANNUAL DETERMINATION REGARDING PERFORMANCE PERIOD. No later
      than the 60th day of each calendar year, the Committee shall determine
      whether to establish a Performance Period, provided, however, for a
      Performance Period established in calendar year 2004, the Committee may
      make a determination under this Section 6.01 at any time prior to the 90th
      day of calendar year 2004.

            6.02 DETERMINATION OF GRANTS, AWARDS (BOTH LEVEL 1 AND LEVEL 2) AND
      PERFORMANCE CRITERIA. For each Performance Period, the Committee shall
      take the following actions no later than the 90th day of the first
      calendar year of that Performance Period:

                  (a) Identify Participants for that Performance Period.

                  (b) Establish the level of Level 1 and Level 2 opportunities
            for each Participant.

                  (c) Set the Earnings target(s).

                  (d) Set the Operational Goals and relative weightings after
            discussing such goals and weighting with the Chief Executive Officer
            in order to bring the Operational Goals as closely as possible in
            line with the Corporation's business plans.

            6.03 TERMINATION OF EMPLOYMENT. If a Participant terminates
      employment with the Corporation and each subsidiary of the Corporation
      during a then uncompleted Performance Period for reasons other than death,
      Disability or Retirement, any KEPP Award for any then uncompleted
      Performance Period shall be forfeited automatically. If a Participant
      terminates employment with the Corporation and each subsidiary of the
      Corporation for reasons of death, Disability or Retirement during a then
      uncompleted Performance Period, the Participant shall be entitled to
      receive a pro rata KEPP Payment for each then uncompleted Performance
      Period determined:

                  (a) when the KEPP Payments for all other Participants in such
            Performance Period(s) are determined; and

                  (b) based on the actual level of achievement of Earnings for
            that Performance Period and the attainment of Operational Goals,
            after the application of Negative Discretion.


                                       6



ARTICLE VII. DETERMINATION OF ACHIEVEMENT OF EARNINGS AND OPERATIONAL GOALS

            7.01 DETERMINATION OF EARNINGS AND OPERATIONAL GOALS. As promptly as
      administratively feasible but in no event later than the March 1st of the
      calendar year following last calendar year of each Performance Period, the
      Committee shall determine Earnings of the Corporation and the attainment
      of Operational Goals and the degree, if any, to which the Committee will
      exercise Negative Discretion.

            7.02 DETERMINATION OF KEPP PAYMENTS. KEPP Payments for a particular
      Performance Period for a particular Participant shall be the result of
      adding (i) the amount earned by a particular Participant under Level 1
      based on the Corporation's actual Earnings during the Performance Period
      and (ii) the amount earned by a particular Participant under Level 2 based
      on attainment of Operational Goals and after the application, if any, by
      the Committee of Negative Discretion.

ARTICLE VIII. MISCELLANEOUS

            8.01 CHANGE IN CONTROL. In the event of a Change in Control, during
      an uncompleted Performance Period, KEPP Payments (i) with respect to KEPP
      Awards made in 2004 with respect to the 2004 through 2006 Performance
      Period, shall be determined as of the date of the Change in Control at the
      highest (that is 7X) level of Earnings for the entire 2004 through 2006
      Performance Period without pro ration for any factor and KEPP Payments for
      the whole of the 2004 through 2006 Performance Period shall be delivered
      to the Participants as soon after the Change in Control as is
      administratively feasible; (ii) with respect to KEPP Awards made in 2005
      with respect to the 2005 through 2007 Performance Period, shall be
      determined as of the date of the Change in Control (x) with respect to
      Level 1, by first determining the aggregate amount of income before taxes
      actually attained by the Corporation for the period beginning on January
      1, 2005 and ending on (and including) the date of the Change in Control,
      dividing that amount by the number of days during the period beginning on
      January 1, 2005 and ending on (and including) the date of the Change in
      Control and multiplying that daily amount by the total number of days in
      calendar years 2005, 2006 and 2007 and, using the amount of income before
      taxes determined under the foregoing, determining the appropriate amount
      to be paid under Level 1 and (y) with respect to Level 2, if the amount of
      the Level 1 payment determined under the preceding clause is less than the
      maximum level for the 2005 through 2007 Performance Period, the Committee
      shall meet immediately prior to the date of the Change in Control (or as
      soon as practicable after the Committee knows of the impending Change in
      Control) and determine the amount, if any, of KEPP Payment appropriate
      under Level 2 for the 2005 through 2007 Performance Period and the KEPP
      Payments for the 2005 through 2007 Performance Period shall be delivered
      to the Participants as soon after the Change in Control as is
      administratively feasible and (iii) for any subsequent Performance Period,
      in a manner determined by the Committee at the time of the award for that
      Performance Period.

            8.02 NON-UNIFORM DETERMINATIONS. The actions and determinations of
      the Committee need not be uniform and may be taken or made by the
      Committee selectively among employees or Participants, whether or not
      similarly situated.


                                       7


            8.03 AMENDMENT AND TERMINATION OF THE PLAN. The Committee shall have
      complete power and authority to amend or terminate this Plan at any time
      it is deemed necessary or appropriate. No termination or amendment of the
      Plan may, without the consent of the Participant to whom any award shall
      theretofore have been granted under the KEPP, adversely affect the right
      of such individual under such award; provided, however, that the Committee
      may, in its sole discretion, make such provision in the Award Agreement
      for amendments which, in its sole discretion, it deems appropriate.

                                       8

EX-10.5

                                                                    EXHIBIT 10.5

                                     FORM OF

                              AMENDED AND RESTATED
                      CHANGE IN CONTROL SEVERANCE AGREEMENT

            THIS AMENDED AND RESTATED AGREEMENT ("Agreement"), initially
effective as of the 10th day of February, 2000 (the "Effective Date"), and
amended and restated in its entirety effective as of July 13, 2000 is further
amended and restated as of February 24, 2005, by and between Allegheny
Technologies Incorporated, a Delaware corporation (hereinafter referred to as
the "Company"), and the individual identified on the signature page of this
Agreement (the "Executive").

                                   WITNESSETH:

            WHEREAS, the Board of Directors of the Company (the "Board") has
approved the Company's entering into this agreement providing for certain
severance protection for the Executive following a Change in Control (as
hereinafter defined);

            WHEREAS, the Board of the Company believes that, should the
possibility of a Change in Control arise, it is imperative that the Company be
able to receive and rely upon the Executive's advice, if requested, as to the
best interests of the Company and its stockholders without concern that the
Executive might be distracted by the personal uncertainties and risks created by
the possibility of a Change in Control; and

            WHEREAS, in addition to the Executive's regular duties, the
Executive may be called upon to assist in the assessment of a possible Change in
Control, advise management and the Board of the Company as to whether such
Change in Control would be in the best interests of the Company and its
stockholders, and to take such other actions as the Board determines to be
appropriate.

            NOW, THEREFORE, to assure the Company that it will have the
continued dedication of the Executive and the availability of Executive's advice
and counsel notwithstanding the possibility, threat, or occurrence of a Change
in Control, and to induce the Executive to remain in the employ of the Company,
and for good and valuable consideration and the mutual covenants set forth
herein, the Company and the Executive, intending to be legally bound, agree as
follows:

                             Article I. Definitions

      1.1 Definitions. Whenever used in this Agreement, the following terms
shall have the meanings set forth below when the initial letter of the word or
abbreviation is capitalized:

(a) "Accrued Obligations" means, as of the Effective Date of Termination, the
sum of (i) the Executive's Base Compensation through and including the Effective
Date of Termination, (ii) the amount of any bonus, incentive compensation,
deferred compensation and other cash compensation accrued by the Executive as of
the Effective Date of Termination under the terms of any such arrangement and
not then paid, including, but not limited to, AIP accrued but not paid for a
year ending prior to the year in which occur, the Effective Date of Termination,
(iii)




unused vacation time monetized at the then rate of Base Compensation, (iv)
expense reimbursements or other cash entitlements, (v) amounts accrued,
including but not limited to amounts accrued as a result of the application of
Section 2.2(g), under any qualified, non-qualified or supplemental employee
benefit plan, payroll practice, policy or perquisite.

(b) "AIP" means the Company's Annual Incentive Plan as it exists on the date
hereof and as it may be amended, supplemented or modified from time to time or
any successor plan.

(c) "Base Compensation" shall mean (1) the highest annual rate of base salary of
the Executive within the time period consisting of two years prior to the date
of a Change in Control and the Effective Date of Termination and (2) the AIP
bonus target for performance in the calendar year that a Change in Control
occurs or the actual AIP payment for the year immediately preceding the Change
in Control, whichever is higher.

(d) "Beneficiary" shall mean the persons or entities designated or deemed
designated by the Executive pursuant to Section 7.2 herein.

(e) "Board" shall mean the Board of Directors of the Company.

(f) For purposes hereof, the term "Cause" shall mean the Executive's conviction
of a felony, breach of a fiduciary duty involving personal profit to the
Executive or intentional failure to perform stated duties reasonably associated
with the Executive's position; provided, however, an intentional failure to
perform stated duties shall not constitute Cause unless and until the Board
provides the Executive with written notice setting forth the specific duties
that, in the Board's view, the Executive has failed to perform and the Executive
is provided a period of thirty (30) days to cure such specific failure(s) to the
reasonable satisfaction of the Board.

(g) For the purposes of this Agreement, "Change in Control" shall mean, and
shall be deemed to have occurred upon the occurrence of, any of the following
events:

            (1) The Company acquires actual knowledge that (x) any Person, other
            than the Company, a subsidiary, any employee benefit plan(s)
            sponsored by the Company or a subsidiary, has acquired the
            Beneficial Ownership, directly or indirectly, of securities of the
            Company entitling such Person to 20% or more of the Voting Power of
            the Company, or (y) any Person or Persons agree to act together for
            the purpose of acquiring, holding, voting or disposing of securities
            of the Company or to act in concert or otherwise with the purpose or
            effect of changing or influencing control of the Company, or in
            connection with or as Beneficial Ownership, directly or indirectly,
            of securities of the Company entitling such Person(s) to 20% or more
            of the Voting Power of the Company; or

            (2) The completion of a Tender Offer is made to acquire securities
            of the Company entitling the holders thereof to 20% or more of the
            Voting Power of the Company; or

            (3) The occurrence of a successful solicitation subject to Rule
            14a-11 under the Securities Exchange Act of 1934 as amended (or any
            successor Rule) (the "1934 Act") relating to the election or removal
            of 50% or more of the members of the Board or any class of the Board
            shall be made by any person other than the

                                      -2-


            Company or less than 51% of the members of the Board (excluding
            vacant seats) shall be Continuing Directors; or

            (4) The occurrence of a merger, consolidation, share exchange,
            division or sale or other disposition of assets of the Company as a
            result of which the stockholders of the Company immediately prior to
            such transaction shall not hold, directly or indirectly, immediately
            following such transaction a majority of the Voting Power of (i) in
            the case of a merger or consolidation, the surviving or resulting
            corporation, (ii) in the case of a share exchange, the acquiring
            corporation or (iii) in the case of a division or a sale or other
            disposition of assets, each surviving, resulting or acquiring
            corporation which, immediately following the transaction, holds more
            than 20% of the consolidated assets of the Company immediately prior
            to the transaction;

provided, however that (A) if securities beneficially owned by Executive are
included in determining the Beneficial Ownership of a Person referred to in
Section (i), (B) if Executive is named pursuant to Item 2 of the Schedule 14D-1
(or any similar successor filing requirement) required to be filed by the bidder
making a Tender Offer referred to in Section (ii) or (C) if Executive is a
"participant" as defined in Instruction 3 to Item 4 of Schedule 14A under the
1934 Act in a solicitation referred to in Section (iii) then no Change of
Control with respect to Executive shall be deemed to have occurred by reason of
any such event.

            For the purposes of Section 1(g), the following terms shall have the
following meanings:

            (i) The term "Person" shall be used as that term is used in Section
            13(d) and 14(d) of the 1934 Act as in effect on the Effective Date
            hereof.

            (ii) "Beneficial Ownership" shall be determined as provided in Rule
            13d-3 under the 1934 Act as in effect on the Effective Date hereof.

            (iii) A specified percentage of "Voting Power" of a company shall
            mean such number of the Voting Shares as shall enable the holders
            thereof to cast such percentage of all the votes which could be cast
            in an annual election of directors (without consideration of the
            rights of any class of stock, other than the common stock of the
            company, to elect directors by a separate class vote); and "Voting
            Shares" shall mean all securities of a company entitling the holders
            thereof to vote in an annual election of directors (without
            consideration of the rights of any class of stock, other than the
            common stock of the company, to elect directors by a separate class
            vote).

            (iv) "Tender Offer" shall mean a tender offer or exchange offer to
            acquire securities of the Company (other than such an offer made by
            the Company or any subsidiary), whether or not such offer is
            approved or opposed by the Board.

            (v) "Continuing Directors" shall mean a director of the Company who
            either (x) was a director of the Company on the date hereof or (y)
            is an individual whose election, or nomination for election, as a
            director of the Company was approved by a vote of at least
            two-thirds of the directors then still in office who were

                                      -3-


            Continuing Directors (other than an individual whose initial
            assumption of office is in connection with an actual or threatened
            election contest relating to the election of directors of the
            Company which would be subject to Rule 14a-11 under the 1934 Act, or
            any successor Rule).

(h) "Code" shall mean the Internal Revenue Code of 1986, as amended.

(i) "Effective Date of Termination" shall mean the date on which the Executive's
employment terminates in a circumstance in which Section 2.1 provides for
Severance Benefits (as defined in Section 2.1).

(j) "Good Reason" shall mean, without the Executive's express written consent,
the occurrence of any one or more of the following:

      (1) A material diminution of the Executive's authorities, duties,
responsibilities, or status (including offices, titles, or reporting
relationships) as an employee of the Company from those in effect as of one
hundred eighty (180) days prior to the Change in Control or as of the date of
execution of this Agreement if a Change in Control occurs within one hundred
eighty (180) days of the execution of this Agreement (the "Reference Date") or
the assignment to the Executive of duties or responsibilities inconsistent with
his position as of the Reference Date, other than an insubstantial and
inadvertent act that is remedied by the Company promptly after receipt of notice
thereof given by the Executive, and other than any such alteration which is
consented to by the Executive in writing;

      (2) The Company's requiring the Executive to be based at a location in
excess of thirty-five (35) miles from the location of the Executive's principal
job location or office immediately prior to the Change in Control, except for
required travel on the Company's business to an extent substantially consistent
with the Executive's present business obligations;

      (3) A reduction in the Executive's annual salary or any material reduction
by the Company of the Executive's other compensation or benefits from that in
effect on the Reference Date or on the date of the Change in Control, whichever
is greater;

      (4) The failure of the Company to obtain an agreement satisfactory to the
Executive from any successor to the Company to assume and agree to perform the
Company's obligations under this Agreement, as contemplated in Article 5 herein;
and

      (5) Any purported termination by the Company of the Executive's employment
that is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 2.6 below, and for purposes of this Agreement, no such
purported termination shall be effective.

The Executive's right to terminate employment for Good Reason shall not be
affected by the Executive's (A) incapacity due to physical or mental illness or
(B) continued employment following the occurrence of any event constituting Good
Reason herein.

(k) "KEPP" means the Company's Key Executive Performance Plan as it exists on
the date hereof and as it may be amended, supplemented or modified from time to
time or any successor plan.

                                      -4-


(l) "Severance Compensation" means three times Base Compensation.

(m) "TSRP" means the Total Shareholder Return Program as it exists on the date
of the amendment and restatement of this Agreement and as it may be amended,
supplemented or modified from time to time or a successor plan.

                         Article II. Severance Benefits

      2.1 Right to Severance Benefits. The Executive shall be entitled to
receive from the Company severance benefits described in Section 2.2 below
(collectively, the "Severance Benefits") if a Change in Control shall occur and
within twenty-four (24) months after the Change in Control either of the
following shall occur:

            (a)   an involuntary termination of the Executive's employment with
                  the Company without Cause; or

            (b)   a voluntary termination of the Executive's employment with the
                  Company for Good Reason.

      2.2 Severance Benefits. In the event that the Executive becomes entitled
to receive Severance Benefits, as provided in Section 2.1, the Company shall
provide the Executive with total Severance Benefits as follows (but subject to
Sections 2.5 and 2.6):

            (a)   The Executive shall receive a single lump sum cash Severance
                  Compensation payment within thirty (30) days of the Effective
                  Date of Termination.

            (b)   The Executive shall receive the Accrued Obligations.

            (c)   The Executive shall receive as AIP for the year in which the
                  termination occurs a lump sum cash payment paid within thirty
                  (30) days of the Effective Date of Termination equal to that
                  which would have been paid if corporate and personal
                  performance had achieved 120% of target objectives established
                  for the annual period in which the Change in Control occurred,
                  multiplied by a fraction, the numerator of which is the number
                  of days elapsed in the current fiscal period to the Effective
                  Date of Termination, and the denominator of which is 365.

            (d)   The Executive shall receive a lump sum payment paid within
                  thirty (30) days of the Effective Date of Termination (i) of
                  any earned but unpaid TSRP Awards (as defined in the TSRP) and
                  (ii) with respect to any TSRP Awards for then uncompleted TSRP
                  Performance Periods (as defined in the TSRP); provided that
                  portion of the TSRP award that would be paid in stock under
                  the TSRP is to be paid in cash based on the then current
                  market value of the stock and the payment for then uncompleted
                  TSRP Performance Periods will be determined based upon a
                  deemed "Excellent" level of Total Shareholder Return (as
                  defined in the TSRP and set forth in

                                      -5-


                  the applicable TSRP agreement) for each uncompleted TSRP
                  Performance Period.

            (e)   All perquisites and welfare benefits, including medical,
                  dental, vision, life and disability benefits pursuant to plans
                  under which the Executive and/or the Executive's family is
                  eligible to receive benefits and/or coverage shall be
                  continued for a period of thirty-six (36) months after the
                  Effective Date of Termination. Such benefits shall be provided
                  to the Executive at no less than the same coverage level as in
                  effect as of the date of the Change in Control. The Company
                  shall pay the full cost of such continued benefits, except
                  that the Executive shall bear any portion of such cost as was
                  required to be borne by key executives of the Company
                  generally at the date of the Change in Control.
                  Notwithstanding the foregoing, the benefits described in this
                  Section 2.2(e) may be discontinued prior to the end of the
                  periods provided in this Section to the extent, but only to
                  the extent, that the Executive receives substantially similar
                  benefits from a subsequent employer. In the event any
                  insurance carrier shall refuse to provide coverage to a former
                  employee, the Company shall secure comparable coverage or may
                  self-insure the benefits if it pays such benefits together
                  with a payment to the Executive equal to the federal income
                  tax consequences of payments to a former highly compensated
                  employee from a discriminatory self-insured plan.

            (f)   The Executive shall be entitled to reimbursement for actual
                  payments made for professional outplacement services or job
                  search not to exceed $25,000 in the aggregate.

            (g)   In determining the Executive's pension benefit following
                  entitlement to a Severance Benefit, (i) the Executive shall be
                  deemed to have satisfied the age and service requirements for
                  full vesting under the Company's qualified (within applicable
                  legal parameters), non-qualified and supplemental pension
                  plans as of the Effective Date of Termination in which the
                  Executive then participates such that the Executive shall be
                  entitled to receive the full accrued benefit (based on actual
                  service rendered through the Effective Date of Termination
                  plus the service under subsection 2.2(g)(ii)) under all such
                  plans in effect as of the date of the Change in Control,
                  without any actuarial reduction for early payment and (ii) the
                  Executive shall be credited with years of service for all
                  purposes under each such plan equal to the number used to
                  multiply Base Compensation in Section 1.1(m) (not to exceed a
                  maximum total of ten credited years of service under the
                  Company's Supplemental Pension Plan, if applicable). To the
                  extent the amounts determined after giving effect to this
                  Section 2.2(g) cannot be paid from or under a qualified plan,
                  as determined by the administrator of the qualified plan(s),
                  such amounts shall be paid in a single cash payment with the
                  Accrued Obligations as provided in Section 2.2(b), it being
                  understood that the Executive will receive all amounts that
                  can be paid from or under a qualified plan from such plan when
                  such amounts otherwise become due.

                                      -6-


            (h)   If the Company is providing the Executive with the use of an
                  automobile on the date of the Change in Control within sixty
                  (60) days of the Effective Date of Termination, the Company
                  shall acquire title to such automobile if it does not then
                  have title, satisfy any lease obligation, lien or encumbrance
                  related to such automobile and transfer to the Executive, free
                  and clear of all encumbrances, title to the automobile.

      2.3. Stock Options. All Company stock options previously granted to the
Executive shall be fully vested and exercisable immediately upon a Change in
Control. Such options shall be exercisable for the remainder of the term
established by the Company's stock option plan as if the options had vested in
accordance with the normal vesting schedule and the Executive had remained an
employee of the Company. Company stock acquired pursuant to any such exercise
may be sold by the Executive free of any Company restrictions, whatsoever (other
than those imposed by federal and state securities laws).

      2.4. KEPP. In the event of entitlement to a Severance Benefit and the
Executive then participates in KEPP, the Company shall pay to the Executive an
amount in a single cash payment within thirty (30) days of the Effective Date of
Termination equal to the amount determined as the sum of (i) any earned but
unpaid KEPP amounts and (ii) the sum of (A) for the 2004 through 2006
measurement period under KEPP, at the 7X (maximum) level and (B) for the 2005
through 2007 measurement period under KEPP (x) with respect to Level 1, by first
determining the aggregate amount of income before taxes actually attained by the
Corporation for the period beginning on January 1, 2005 and ending on (and
including) the date of the Change in Control, dividing that amount by the number
of days during the period beginning on January 1, 2005 and ending on (and
including) the date of the Change in Control and multiplying that daily amount
by the total number of days in calendar years 2005, 2006 and 2007 and, using the
amount of income before taxes determined under the foregoing, determining the
appropriate amount to be paid under Level 1 and (y) with respect to Level 2, if
the amount of the Level 1 payment determined under the preceding clause is less
than the maximum level for the 2005 through 2007 Performance Period, the
Personnel and Compensation Committee of the Board of Directors (the "Committee")
shall meet immediately prior to the date of the Change in Control (or as soon as
practicable after the Committee knows of the impending Change in Control) and
determine the amount, if any, of KEPP Payment appropriate under Level 2 for the
2005 through 2007 Performance Period and the KEPP Payments for the 2005 through
2007 Performance Period shall be delivered to the Participants as soon after the
Change in Control as is administratively feasible.

      2.5. Termination for any Other Reason. If the Executive's employment with
the Company is terminated under any circumstances other than those set forth in
Section 2.1, including without limitation by reason of retirement, death,
disability, discharge for Cause or resignation without Good Reason, or any
termination, for any reason, that occurs prior to a Change in Control (other
than as provided below) or after twenty-four (24) months following a Change in
Control, the Executive shall have no right to receive the Severance Benefits
under this Agreement or to receive any payments in respect of this Agreement. In
such event Executive's benefits, if any, in respect of such termination shall be
determined in accordance with the Company's retirement, survivor's benefits,
insurance, and other applicable plans, programs, policies and practices then in
effect. Notwithstanding anything in this Agreement to the contrary, if the
Executive's employment with the Company is terminated at any time from three (3)
to eight (8) months prior to the date on which a Change in Control occurs either
(i) by the

                                      -7-


Company other than for Cause or (ii) by the Executive for Good Reason, and it is
reasonably demonstrated that termination of employment (a) was at the request of
an unrelated third party who has taken steps reasonably calculated to effect a
Change in Control, or (b) otherwise arose in connection with or in anticipation
of the Change in Control, then for all purposes of this Agreement the
termination shall be deemed to have occurred as if immediately following a
Change in Control for Good Reason and the Executive shall be entitled to
Severance Benefits as provided in Section 2.2 hereof. Notwithstanding anything
in this Agreement to the contrary, if the Executive's employment with the
Company is terminated at any time within three (3) months prior to the date on
which a Change in Control occurs either (i) by the Company other than for Cause
or (ii) by the Executive for Good Reason, such termination shall conclusively be
deemed to have occurred as if immediately following a Change in Control for Good
Reason and the Executive shall be entitled to Severance Benefits as provided in
Section 2.2. hereof.

      2.6. Notice of Termination. Any termination by the Company for Cause or by
the Executive for Good Reason shall be communicated by Notice of Termination to
the other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provision so indicated.

      2.7. Withholding of Taxes. The Company shall withhold from any amounts
payable under this Agreement all Federal, state, local, or other taxes that are
legally required to be withheld.

      2.8. Certain Additional Payments by the Company.

            (a)   Notwithstanding anything in this Agreement to the contrary, in
                  the event it shall be determined that any economic benefit or
                  payment or distribution by the Company to or for the benefit
                  of the Executive, whether paid or payable or distributed or
                  distributable pursuant to the terms of this Agreement or
                  otherwise (a "Payment"), would be subject to the excise tax
                  imposed by Section 4999 of the Code or any interest or
                  penalties with respect to such excise tax (such excise tax,
                  together with any such interest and penalties, are hereinafter
                  collectively referred to as the "Excise Tax"), then the
                  Executive shall be entitled to receive an additional payment
                  (a "Gross-Up-Payment") in an amount such that after payment by
                  the Executive of all taxes (including any interest or
                  penalties imposed with respect to such taxes), including any
                  Excise Tax imposed upon the Gross-Up Payment, the Executive
                  retains an amount of the Gross-Up Payment equal to the Excise
                  Tax imposed upon the Payments.

            (b)   Subject to the provisions of Section 2.8(c), all
                  determinations required to be made under this Section 2.8,
                  including whether a Gross-Up Payment is required and the
                  amount of such Gross-Up Payment, shall be made by the
                  Company's regular outside independent public accounting firm
                  (the "Accounting Firm") which shall provide detailed
                  supporting calculations both to the Company and the Executive
                  within fifteen (15) business days of the Effective Date of
                  Termination, if applicable, or such earlier time as

                                      -8-


                  is requested by the Company. The initial Gross-Up Payment, if
                  any, as determined pursuant to this Section 2.8(b), shall be
                  paid to the Executive within five (5) days of the receipt of
                  the Accounting Firm's determination. If the Accounting Firm
                  determines that no Excise Tax is payable by the Executive, it
                  shall furnish the Executive with an opinion that the Executive
                  has substantial authority not to report any Excise Tax or
                  excess parachute payments on Executive's federal income tax
                  return. Any determination by the Accounting Firm shall be
                  binding upon the Company and the Executive. As a result of the
                  uncertainty in the application of Section 4999 of the Code at
                  the time of the initial determination by the Accounting Firm
                  hereunder, it is possible that Gross-Up Payments which will
                  not have been made by the Company should have been made
                  ("Underpayment"), consistent with the calculations required to
                  be made hereunder. In the event that the Company exhausts its
                  remedies pursuant to Section 2.8(c) and the Executive
                  thereafter is required to make a payment of any Excise Tax,
                  the Accounting Firm shall determine the amount of the
                  Underpayment that has occurred and any such Underpayment shall
                  be promptly paid by the Company to or for the benefit of the
                  Executive.

            (c)   The Executive shall notify the Company in writing of any claim
                  by the Internal Revenue Service that, if successful, would
                  require the payment by the Company of the Gross-Up Payment.
                  Such notification shall be given as soon as practicable but no
                  later than ten (10) business days after the later of either
                  (i) the date the Executive has actual knowledge of such claim,
                  or (ii) ten (10) days after the Internal Revenue Service
                  issues to the Executive either a written report proposing
                  imposition of the Excise Tax or a statutory notice of
                  deficiency with respect thereto, and shall apprise the Company
                  of the nature of such claim and the date on which such claim
                  is requested to be paid. The Executive shall not pay such
                  claim prior to the expiration of the thirty-day period
                  following the date on which he gives such notice to the
                  Company (or such shorter period ending on the date that any
                  payment of taxes with respect to such claim is due). If the
                  Company notifies the Executive in writing prior to the
                  expiration of such period that the Company desires to contest
                  such claim, the Executive shall: (i) give the Company any
                  information reasonably requested by the Company relating to
                  such claim, (ii) take such action in connection with
                  contesting such claim as the Company shall reasonably request
                  in writing from time to time, including, without limitation,
                  accepting legal representation with respect to such claim by
                  an attorney reasonably selected by the Company, (iii)
                  cooperate with the Company in good faith in order effectively
                  to contest such claim, (iv) permit the Company to participate
                  in any proceedings relating to such claim; provided, however,
                  that the Company shall bear and pay directly all costs and
                  expenses (including additional interest and penalties)
                  incurred in connection with such contest and shall indemnify
                  and hold the Executive harmless, on an after-tax basis, for
                  any Excise Tax or income tax, including interest and penalties
                  with respect thereto, imposed as a result of such
                  representation and payment of costs and expenses. Without
                  limitation of the foregoing provisions of this

                                      -9-


                  Section 2.8(c), the Company shall control all proceedings
                  taken in connection with such contest and, at its sole option,
                  may pursue or forego any and all administrative appeals,
                  proceedings, hearings and conferences with the taxing
                  authority in respect of such claim and may, at its sole
                  option, either direct the Executive to request or accede to a
                  request for an extension of the statute of limitations with
                  respect only to the tax claimed, or pay the tax claimed and
                  sue for a refund or contest the claim in any permissible
                  manner, and the Executive agrees to prosecute such contest to
                  a determination before any administrative tribunal, in a court
                  of initial jurisdiction and in one or more appellate courts,
                  as the Company shall determine; provided, however, that if the
                  Company directs the Executive to pay such claim and sue for a
                  refund, the Company shall advance the amount of such payment
                  to the Executive, on an interest-free basis and shall
                  indemnify and hold the Executive harmless, on an after-tax
                  basis, from any Excise Tax or income tax, including interest
                  or penalties with respect thereto, imposed with respect to
                  such advance or with respect to any imputed income with
                  respect to such advance; and provided further that any
                  extension of the statute of limitations requested or acceded
                  to by the Executive at the Company's request and relating to
                  payment of taxes for the taxable year of the Executive with
                  respect to which such contested amount is claimed to be due is
                  limited solely to such contested amount. Furthermore, the
                  Company's control of the contest shall be limited to issues
                  with respect to which a Gross-Up Payment would be payable
                  hereunder and the Executive shall be entitled to settle or
                  contest, as the case may be, any other issue raised by the
                  Internal Revenue Service or any other taxing authority.

            (d)   If, after the receipt by the Executive of an amount advanced
                  by the Company pursuant to Section 2.8(c), the Executive
                  becomes entitled to receive any refund with respect to such
                  claim, the Executive shall (subject to the Company's complying
                  with the requirements of Section 2.8(c)) promptly pay to the
                  Company the amount of such refund (together with any interest
                  paid or credited thereon after taxes applicable thereto). If,
                  after the receipt by the Executive of an amount advanced by
                  the Company pursuant to Section 2.8(c), a determination is
                  made that the Executive shall not be entitled to any refund
                  with respect to such claim and the Company does not notify the
                  Executive in writing of its intent to contest such denial of
                  refund prior to the expiration of thirty (30) days after such
                  determination, then such advance shall be forgiven and shall
                  not be required to be repaid and the amount of such advance
                  shall offset, to the extent thereof, the amount of Gross-Up
                  Payment required to be paid.

            (e)   In the event that any state or municipality or subdivision
                  thereof shall subject any Payment to any special tax which
                  shall be in addition to the generally applicable income tax
                  imposed by such state, municipality, or subdivision with
                  respect to receipt of such Payment, the foregoing provisions
                  of this Section 2.8 shall apply, mutatis mutandis, with
                  respect to such special tax.

                                      -10-


                 Article III. The Company's Payment Obligation

      3.1 Payment Obligations Absolute. Except as otherwise provided in the last
sentence of Section 2.2(e), the Company's obligation to make the payments and
the arrangements provided for in this Agreement shall be absolute and
unconditional, and shall not be affected by any circumstances, including,
without limitation, any offset, counterclaim, recoupment, defense, or other
right that the Company may have against the Executive or any other party. All
amounts payable by the Company under this Agreement shall be paid without notice
or demand. Each and every payment made hereunder by the Company shall be final,
and the Company shall not seek to recover all or any part of such payment from
the Executive or from whomsoever may be entitled thereto, for any reasons
whatsoever. Notwithstanding any other provisions of this Agreement to the
contrary, the Company shall have no obligation to make any payment to the
Executive hereunder to the extent, but only to the extent, that such payment is
prohibited by the terms of any final order of a Federal or state court or
regulatory agency of competent jurisdiction; provided, however, that such an
order shall not affect, impair, or invalidate any provision of this Agreement
not expressly subject to such order.

      3.2 Contractual Rights to Payments and Benefits. This Agreement
establishes and vests in the Executive a contractual right to the payments and
benefits to which the Executive is entitled hereunder. Nothing herein contained
shall require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, earmark, or otherwise set aside any funds or other assets,
in trust or otherwise, to provide for any payments to be made or required
hereunder. The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in the last sentence of Section 2.2(e).

                   Article IV . Enforcement and Legal Remedies

      4.1. Consent to Jurisdiction. Each of the parties hereto irrevocably
consents to personal jurisdiction in any action brought in connection with this
Agreement in the United States District Court for the Western District of
Pennsylvania or any Pennsylvania court of competent jurisdiction. The parties
also consent to venue in the above forums and to the convenience of the above
forums. Any suit brought to enforce the provisions of this Agreement must be
brought in the aforementioned forums.

      4.2 Cost of Enforcement. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel in connection with the
enforcement of any or all of Executive's rights to Severance Benefits under
Section 2.2 of this Agreement, and provided that the Executive substantially
prevails in the enforcement of such rights, the Company, as applicable, shall
pay (or the Executive shall be entitled to recover from the Company, as the case
may be) the Executive's reasonable attorneys' fees, costs and expenses in
connection with the enforcement of Executive's rights.

                                      -11-


                      Article V. Binding Effect; Successors

      The rights of the parties hereunder shall inure to the benefit of their
respective successors, assigns, nominees, or other legal representatives. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, reorganization, consolidation, acquisition of property or stock,
liquidation, or otherwise) to all or a significant portion of the assets of the
Company, as the case may be, by agreement in form and substance reasonably
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent that the Company, as the
case may be, would be required to perform if no such succession had taken place.
Regardless of whether such agreement is executed, this Agreement shall be
binding upon any successor in accordance with the operation of law and such
successor shall be deemed the "Company", as the case may be, for purposes of
this Agreement.

                          Article VI. Term of Agreement

      The term of this Agreement shall commence on the Effective Date and shall
continue in effect for three (3) full years (the "Term") unless further extended
as provided in this Article. The Term of this Agreement shall be automatically
and without action by either party extended for one additional calendar month on
the last business day of each calendar month so that at any given time there are
no fewer than 35 nor more than 36 months remaining unless one party gives
written notice to the other that it no longer wishes to extend the Term of this
Agreement, after which written notice, the Term shall not be further extended
except as may be provided in the following sentence. However, in the event a
Change in Control occurs during the Term, this Agreement will remain in effect
for the longer of: (i) thirty-six (36) months beyond the month in which such
Change in Control occurred; or (ii) until all obligations of the Company
hereunder have been fulfilled and all benefits required hereunder have been paid
to the Executive or other party entitled thereto.

                           Article VII. Miscellaneous

      7.1 Employment Status. Neither this Agreement nor any provision hereof
shall be deemed to create or confer upon the Executive any right to be retained
in the employ of the Company or any subsidiary or other affiliate thereof.

      7.2 Beneficiaries. The Executive may designate one or more persons or
entities as the primary and/or contingent Beneficiaries of any Severance
Benefits owing to the Executive under this Agreement. Such designation must be
in the form of a signed writing acceptable to the Board of Directors of the
Company. The Executive may make or change such designation at any time.

      7.3 Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof and
amends, restates and supersedes and prior change in control agreement between
the parties. Any payments actually made under this Agreement in the event of the
Executive's termination of employment shall be in lieu of any severance benefits
payable under any severance plan, program, or policy of the Company to which the
Executive might otherwise be entitled.

                                      -12-


      7.4 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural shall
include the singular, and the singular shall include the plural.

      7.5 Notices. All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first-class
certified mail, return receipt requested, postage prepaid, to the other party,
addressed as follows:

      (a)   If to the Company:

            Allegheny Technologies Incorporated
            1000 Six PPG Place
            Pittsburgh, PA 15222-5479
            Attn: Executive Vice President, Human Resources, Chief Legal and
                  Compliance Officer, General Counsel and Corporate Secretary

      (b) If to Executive, to the Executive's address set forth at the end of
this Agreement. Addresses may be changed by written notice sent to the other
party at the last recorded address of that party.

      7.6 Execution in Counterparts. The parties hereto in counterparts may
execute this Agreement, each of which shall be deemed to be original, but all
such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart.

      7.7. Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are for convenience of
reference and not part of the provisions hereof and shall have no force and
effect.

      7.8. Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and on behalf of the Company.

      7.9. Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the Commonwealth of Pennsylvania, other than the conflict of
law provisions thereof, shall be the controlling laws in all matters relating to
this Agreement.

                                      -13-


      IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year first above written.

                            ALLEGHENY TECHNOLOGIES INCORPORATED

                            By: _______________________________________

                            Title: Executive Vice President, Human Resources,
                                 Chief Legal and Compliance Officer, General
                                 Counsel and Corporate Secretary

                            EXECUTIVE:

                            ___________________________________________

                            Name:
                            Address:

                                      -14-

EX-10.6

                                                                    EXHIBIT 10.6

                       ALLEGHENY TECHNOLOGIES INCORPORATED

                               2000 INCENTIVE PLAN
                                  (AS AMENDED)

                                   ARTICLE I.
                        PURPOSE AND ADOPTION OF THE PLAN

      1.1. PURPOSE. The purpose of the Allegheny Technologies Incorporated 2000
Incentive Plan (hereinafter referred to as the "Plan") is to assist in
attracting and retaining highly competent employees, to act as an incentive in
motivating selected officers and other key employees of Allegheny Technologies
Incorporated and its Subsidiaries to achieve long-term corporate objectives and
to enable cash incentive awards to qualify as performance-based for purposes of
the tax deduction limitations under Section 162(m) of the Code.

      1.2. ADOPTION AND TERM. The Plan was approved by the Board of Directors of
Allegheny Technologies Incorporated, to be effective as of January 1, 2000 (the
"Effective Date"), and approved by the stockholders of the Company on May 11,
2000. The Plan shall remain in effect until the tenth anniversary of the date
the stockholders of the Company approve the Plan, unless terminated by action of
the Board prior to that date, and the provisions of Articles VII, VIII, IX and X
with respect to performance-based awards to "covered employees" under Section
162(m) of the Code shall expire as of the fifth anniversary of the date the
stockholders of the Company approved the Plan, until and unless reapproved by
the stockholders of The Company.

      1.3. THE PRIOR PLAN. The Company previously adopted the Allegheny Teledyne
Incorporated 1996 Incentive Plan (the "Prior Plan"). Awards granted under the
Prior Plan prior to the date the stockholders of the Company approve the Plan
shall not be affected by the adoption of this Plan, and the Prior Plan shall
remain the effect following the date the stockholders of the Company approve the
Plan to the extent necessary to administer such awards, but no new Awards shall
be granted under the Prior Plan after the date the stockholders of the Company
approve the Plan.

                                   ARTICLE II.
                                   DEFINITIONS

            For the purpose of this Plan, capitalized terms shall have the
following meanings:



      2.1. AWARD means any one or a combination of Non-Qualified Stock Options
or Incentive Stock Options described in Article VI, Stock Appreciation Rights
described in Article VI, Restricted Shares described in Article VII, Performance
Awards described in Article VIII, Awards of cash or any other Award made under
the terms of the Plan.

      2.2. AWARD AGREEMENT means a written agreement between the Company and a
Participant or a written acknowledgment from the Company to a Participant
specifically setting forth the terms and conditions of an Award granted under
the Plan.

      2.3. AWARD PERIOD means, with respect to an Award, the period of time set
forth in the Award Agreement during which specified target performance goals
must be achieved or other conditions set forth in the Award Agreement must be
satisfied.

      2.4. BENEFICIARY means an individual, trust or estate who or which, by a
written designation of the Participant filed with the Company or by operation of
law, succeeds to the rights and obligations of the Participant under the Plan
and the Award Agreement upon the Participant's death.

      2.5. BOARD means the Board of Directors of the Company.

      2.6. CHANGE IN CONTROL means, and shall be deemed to have occurred upon
the occurrence of, any one of the following events:

            (a) The acquisition in one or more transactions, other than from the
      Company, by any individual, entity or group (within the meaning of Section
      13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within
      the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number
      of Company Voting Securities in excess of 25% of the Company Voting
      Securities unless such acquisition has been approved by the Board;

            (b) Any election has occurred of persons to the Board that causes
      two-thirds of the Board to consist of persons other than (i) persons who
      were members of the Board on the Effective Date and (ii) persons who were
      nominated for elections as members of the Board at a time when two-thirds
      of the Board consisted of persons who were members of the Board on the
      Effective Date; provided, however, that any person nominated for election
      by a Board at least two-thirds of whom constituted persons described in

                                       2


      clauses (i) and/or (ii) or by persons who were themselves nominated by
      such Board shall, for this purpose, be deemed to have been nominated by a
      Board composed of persons described in clause (i);

            (c) Approval by the stockholders of the Company of a reorganization,
      merger or consolidation, unless, following such reorganization, merger or
      consolidation, all or substantially all of the individuals and entities
      who were the respective beneficial owners of the Outstanding Common Stock
      and Company Voting Securities immediately prior to such reorganization,
      merger or consolidation, following such reorganization, merger or
      consolidation beneficially own, directly or indirectly, more than seventy
      five (75%) of, respectively, the then outstanding shares of common stock
      and the combined voting power of the then outstanding voting securities
      entitled to vote generally in the election of directors or trustees, as
      the case may be, of the entity resulting from such reorganization, merger
      or consolidation in substantially the same proportion as their ownership
      of the Outstanding Common Stock and Company Voting Securities immediately
      prior to such reorganization, merger or consolidation, as the case may be;
      or

            (d) Approval by the stockholders of the Company of (i) a complete
      liquidation or dissolution of the Company or (ii) a sale or other
      disposition of all or substantially all the assets of the Company.

      2.7. CODE means the Internal Revenue Code of 1986, as amended. References
to a section of the Code shall include that section and any comparable section
or sections of any future legislation that amends, supplements or supersedes
said section.

      2.8. COMMITTEE means the Committee defined in Section 3.1.

      2.9. COMPANY or CORPORATION means Allegheny Technologies Incorporated, a
Delaware corporation, and its successors.

      2.10. COMMON STOCK means Common Stock of the Company, par value $.10 per
share.

      2.11. COMPANY VOTING SECURITIES means the combined voting power of all
outstanding voting securities of the Company entitled to vote generally in the
election of directors to the Board.

                                       3


      2.12. DATE OF GRANT means the date designated by the Committee as the date
as of which it grants an Award, which shall not be earlier than the date on
which the Committee approves the granting of such Award.

      2.13. EFFECTIVE DATE shall have the meaning given to such term in Section
1.2.

      2.14. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended.

      2.15. EXERCISE PRICE means, with respect to a Stock Appreciation Right,
the amount established by the Committee in the Award Agreement which is to be
subtracted from the Fair Market Value on the date of exercise in order to
determine the amount of the payment to be made to the Participant, as further
described in Section 6.2(b).

      2.16. FAIR MARKET VALUE means, on any date, the average of the high and
low quoted sales prices of a share of Common Stock, as reported on the Composite
Tape for New York Stock Exchange Listed Companies, on such date or, if there
were no sales on such date, on the last date preceding such date on which a sale
was reported.

      2.17. INCENTIVE STOCK OPTION means a stock option within the meaning of
Section 422 of the Code.

      2.18. MERGER means any merger, reorganization, consolidation, exchange,
transfer of assets or other transaction having similar effect involving the
Company.

      2.19. NON-QUALIFIED STOCK OPTION means a stock option which is not an
Incentive Stock Option.

      2.20. OPTIONS means all Non-Qualified Stock Options and Incentive Stock
Options granted at any time under the Plan.

      2.21. OUTSTANDING COMMON STOCK means, at any time, the issued and
outstanding shares of Common Stock.

      2.22. PARTICIPANT means a person designated to receive an Award under the
Plan in accordance with Section 5.1.

      2.23. PERFORMANCE AWARDS means Awards granted in accordance with Article
VIII.

                                       4


      2.24. PERFORMANCE GOALS means operating income, operating profit, income
before taxes, earnings per share, return on investment or working capital,
return on stockholders' equity, economic value added (the amount, if any, by
which net operating profit after tax exceeds a reference cost of capital),
balanced scorecard, cash flow, reductions in inventory, inventory turns and
on-time delivery performance, any one of which may be measured with respect to
the Company or any one or more of its Subsidiaries or business units and either
in absolute terms or as compared to another company or companies, and safety
measures and other quantifiable, objective measures of individual performance
relevant to the particular individual's job responsibilities.

      2.25. PLAN means the Allegheny Technologies Incorporated 2000 Incentive
Plan as described herein, as the same may be amended from time to time.

      2.26. PRIOR PLAN shall have the meaning given to such term in Section 1.3.

      2.27. PURCHASE PRICE, with respect to Options, shall have the meaning set
forth in Section 6.1(b).

      2.28. RESTORATION OPTION means a Non-Qualified Stock Option granted
pursuant to Section 6.1(f).

      2.29. RESTRICTED SHARES means Common Stock subject to restrictions imposed
in connection with Awards granted under Article VII.

      2.30. RETIREMENT means early or normal retirement under a pension plan or
arrangement of the Company or one of its Subsidiaries in which the Participant
participates.

      2.31. RULE 16b-3 means Rule 16b-3 promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act, as the same may be
amended from time to time, and any successor rule.

      2.32. STOCK APPRECIATION RIGHTS means Awards granted in accordance with
Article VI.

      2.33. SUBSIDIARY means a subsidiary of the Company within the meaning of
Section 424(f) of the Code.

      2.34. TERMINATION OF EMPLOYMENT means the voluntary or involuntary
termination of a Participant's employment with the Company or a Subsidiary for
any reason, including death, disability, retirement or as the result of the
divestiture

                                       5


of the Participant's employer or any similar transaction in which the
Participant's employer ceases to be the Company or one of its Subsidiaries.
Whether entering military or other government service shall constitute
Termination of Employment, or whether a Termination of Employment shall occur as
a result of disability, shall be determined in each case by the Committee in its
sole discretion.

                                  ARTICLE III.
                                 ADMINISTRATION

      3.1. COMMITTEE. The Plan shall be administered by a committee of the Board
("Committee") comprised of at least two persons. The Committee shall have
exclusive and final authority in each determination, interpretation or other
action affecting the Plan and its Participants. The Committee shall have the
sole discretionary authority to interpret the Plan, to establish and modify
administrative rules for the Plan, to impose such conditions and restrictions on
Awards as it determines appropriate and to cancel Awards (including those made
pursuant to other plans of the Company), and to take such steps in connection
with the Plan and Awards granted hereunder as it may deem necessary or
advisable. The Committee shall not, however, have or exercise any discretion
that would disqualify amounts payable under Article X as performance-based
compensation for purposes of Section 162(m) of the Code. The Committee may
delegate such of its powers and authority under the Plan as it deems appropriate
to designated officers or employees of the Company. In addition, the full Board
may exercise any of the powers and authority of the Committee under the Plan. In
the event of such delegation of authority or exercise of authority by the Board,
references in the Plan to the Committee shall be deemed to refer, as
appropriate, to the delegate of the Committee or the Board. The selection of
members of the Committee or any subcommittee thereof, and any delegation by the
Committee to designated officers or employees, under this Section 3.1 shall
comply with Section 16(b) of the Exchange Act, the performance-based provisions
of Section 162(m) of the Code, and the regulations promulgated under each of
such statutory provisions, or the respective successors to such statutory
provisions or regulations, as in effect from time to time, except to the extent
that the Board determines that such compliance is not necessary or desirable.

                                       6


                                   ARTICLE IV.
                                     SHARES

      4.1. NUMBER OF SHARES ISSUABLE. The total number of shares authorized to
be issued under the Plan shall equal 10% of the outstanding shares of the Common
Stock as of the Effective Date. If the number of outstanding shares of Common
Stock is increased after the Effective Date, the total number of shares
available under the Plan will be increased by 10% of such increase. The number
of shares available for issuance under the Plan shall be further subject to
adjustment in accordance with Section 11.7. The shares to be offered under the
Plan shall be authorized and unissued Common Stock, or issued Common Stock which
shall have been reacquired by the Company. Of the total number of shares
authorized for grant under the Plan, the Company may issue no more than one
million shares as awards of restricted stock, subject to adjustment in
accordance with Section 11.7.

      4.2. SHARES SUBJECT TO TERMINATED AWARDS. Common Stock covered by any
unexercised portions of terminated Options (including canceled Options) granted
under Article VI, Common Stock forfeited as provided in Section 7.2(a) and
Common Stock subject to any Awards which are otherwise surrendered by the
Participant may again be subject to new Awards under the Plan. Common Stock
subject to Options, or portions thereof, which have been surrendered in
connection with the exercise of Stock Appreciation Rights shall not be available
for subsequent Awards under the Plan, but Common Stock issued in payment of such
Stock Appreciation Rights shall not be charged against the number of shares of
Common Stock available for the grant of Awards hereunder. Common Stock covered
by awards granted under the Prior Plan that after the Effective Date are
terminated unexercised, forfeited or otherwise surrendered shall be available
for subsequent Awards under this Plan.

                                   ARTICLE V.
                                  PARTICIPATION

      5.1. ELIGIBLE PARTICIPANTS. Participants in the Plan shall be such
officers and other key employees of the Company and its Subsidiaries, whether or
not members of the Board, as the Committee, in its sole discretion, may
designate from time to time. The Committee's designation of a Participant in any
year shall not require the Committee to designate such person to receive Awards
or grants in any other year. The designation of a Participant to receive awards
or grants under one portion of the Plan does not require the Committee to
include such Participant under other portions of the Plan. The Committee shall
consider such factors as it

                                       7


deems pertinent in selecting Participants and in determining the type and amount
of their respective Awards. Notwithstanding any provision herein to the
contrary, the Committee may grant Awards under the Plan, other than Incentive
Stock Options, to non-employees who, in the judgment of the Committee, render
significant services to the Company or any of its Subsidiaries, on such terms
and conditions as the Committee deems appropriate and consistent with the intent
of the Plan. Subject to adjustment in accordance with Section 11.7, in any
calendar year, no Participant shall be granted Awards in respect of more than 1
million shares of Common Stock (whether through grants of Options or Stock
Appreciation Rights or other grants of Common Stock or rights with respect
thereto) and $5 million in cash; provided, however, that any Award payable over
a period of more than one year shall be pro-rated over the applicable period in
determining the amount of the Award granted in any calendar year.

                                   ARTICLE VI.
                   STOCK OPTIONS AND STOCK APPRECIATION RIGHTS

      6.1. OPTION AWARDS.

            (a) GRANT OF OPTIONS. The Committee may grant, to such Participants
      as the Committee may select, Options entitling the Participant to purchase
      shares of Common Stock from the Company in such number, at such price, and
      on such terms and subject to such conditions, not inconsistent with the
      terms of this Plan, as may be established by the Committee. The terms of
      any Option granted under this Plan shall be set forth in an Award
      Agreement.

            (b) PURCHASE PRICE OF OPTIONS. The Purchase Price of each share of
      Common Stock which may be purchased upon exercise of any Option granted
      under the Plan shall be determined by the Committee; provided, however,
      that the Purchase Price of the Common Stock purchased pursuant to Options
      designated by the Committee as Incentive Stock Options shall be equal to
      or greater than the Fair Market Value on the Date of Grant as required
      under Section 422 of the Code.

            (c) DESIGNATION OF OPTIONS. Except as otherwise expressly provided
      in the Plan, the Committee may designate, at the time of the grant of each
      Option, the Option as an Incentive Stock Option or a Non-Qualified Stock
      Option.

                                       8


            (d) INCENTIVE STOCK OPTION SHARE LIMITATION. No Participant may be
      granted Incentive Stock Options under the Plan (or any other plans of the
      Company and its Subsidiaries) which would result in shares with an
      aggregate Fair Market Value (measured on the Date of Grant) of more than
      $100,000 first becoming exercisable in any one calendar year.

            (e) RIGHTS AS A STOCKHOLDER. A Participant or a transferee of an
      Option pursuant to Section 11.4 shall have no rights as a stockholder with
      respect to Common Stock covered by an Option until the Participant or
      transferee shall have become the holder of record of any such shares, and
      no adjustment shall be made for dividends in cash or other property or
      distributions or other rights with respect to any such Common Stock for
      which the record date is prior to the date on which the Participant or a
      transferee of the Option shall have become the holder of record of any
      such shares covered by the Option; provided, however, that Participants
      are entitled to share adjustments to reflect capital changes under Section
      11.7.

            (f) RESTORATION OPTIONS UPON THE EXERCISE OF A NON-QUALIFIED STOCK
      OPTION. In the event that any Participant delivers to the Company, or has
      withheld from the shares otherwise issuable upon the exercise of a
      Non-Qualified Stock Option, shares of Common Stock in payment of the
      Purchase Price of any Non-Qualified Stock Option granted hereunder in
      accordance with Section 6.4, the Committee shall have the authority to
      grant or provide for the automatic grant of a Restoration Option to such
      Participant. The grant of a Restoration Option shall be subject to the
      satisfaction of such conditions or criteria as the Committee in its sole
      discretion shall establish from time to time. A Restoration Option shall
      entitle the holder thereof to purchase a number of shares of Common Stock
      equal to the number of such shares so delivered or withheld upon exercise
      of the original Option and, in the discretion of the Committee, the number
      of shares, if any, delivered or withheld to the Company to satisfy any
      withholding tax liability arising in connection with the exercise of the
      original Option. A Restoration Option shall have a per share Purchase
      Price of not less than 100% of the per share Fair Market Value of the
      Common Stock on the date of grant of such Restoration Option, a term not
      longer than the remaining term of the original Option at the time of
      exercise thereof, and such other terms and conditions as the Committee in
      its sole discretion shall determine.

                                       9


      6.2. STOCK APPRECIATION RIGHTS.

            (a) STOCK APPRECIATION RIGHT AWARDS. The Committee is authorized to
      grant to any Participant one or more Stock Appreciation Rights. Such Stock
      Appreciation Rights may be granted either independent of or in tandem with
      Options granted to the same Participant. Stock Appreciation Rights granted
      in tandem with Options may be granted simultaneously with, or, in the case
      of Non-Qualified Stock Options, subsequent to, the grant to such
      Participant of the related Option; provided, however, that: (i) any Option
      covering any share of Common Stock shall expire and not be exercisable
      upon the exercise of any Stock Appreciation Right with respect to the same
      share, (ii) any Stock Appreciation Right covering any share of Common
      Stock shall expire and not be exercisable upon the exercise of any related
      Option with respect to the same share, and (iii) an Option and Stock
      Appreciation Right covering the same share of Common Stock may not be
      exercised simultaneously. Upon exercise of a Stock Appreciation Right with
      respect to a share of Common Stock, the Participant shall be entitled to
      receive an amount equal to the excess, if any, of (A) the Fair Market
      Value of a share of Common Stock on the date of exercise over (B) the
      Exercise Price of such Stock Appreciation Right established in the Award
      Agreement, which amount shall be payable as provided in Section 6.2(c).

            (b) EXERCISE PRICE. The Exercise Price established under any Stock
      Appreciation Right granted under this Plan shall be determined by the
      Committee, but in the case of Stock Appreciation Rights granted in tandem
      with Options shall not be less than the Purchase Price of the related
      Option. Upon exercise of Stock Appreciation Rights granted in tandem with
      Options, the number of shares subject to exercise under any related Option
      shall automatically be reduced by the number of shares of Common Stock
      represented by the Option or portion thereof which are surrendered as a
      result of the exercise of such Stock Appreciation Rights.

            (c) PAYMENT OF INCREMENTAL VALUE. Any payment which may become due
      from the Company by reason of a Participant's exercise of a Stock
      Appreciation Right may be paid to the Participant as determined by the
      Committee (i) all in cash, (ii) all in Common Stock, or (iii) in any
      combination of cash and Common Stock. In the event that all or a portion
      of the payment is made in Common Stock, the number of shares of Common

                                       10


      Stock delivered in satisfaction of such payment shall be determined by
      dividing the amount of such payment or portion thereof by the Fair Market
      Value on the Exercise Date. No fractional share of Common Stock shall be
      issued to make any payment in respect of Stock Appreciation Rights; if any
      fractional share would be issuable, the combination of cash and Common
      Stock payable to the Participant shall be adjusted as directed by the
      Committee to avoid the issuance of any fractional share.

      6.3. TERMS OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.

            (a) CONDITIONS ON EXERCISE. An Award Agreement with respect to
      Options and/or Stock Appreciation Rights may contain such waiting periods,
      exercise dates and restrictions on exercise (including, but not limited
      to, periodic installments) as may be determined by the Committee at the
      time of grant.

            (b) DURATION OF OPTIONS AND STOCK APPRECIATION RIGHTS. Options and
      Stock Appreciation Rights shall terminate after the first to occur of the
      following events:

                  (i) Expiration of the Option or Stock Appreciation Right as
            provided in the Award Agreement; or

                  (ii) Termination of the Award following the Participant's
            disability, Retirement, death or other Termination of Employment as
            provided in the Award Agreement; or

                  (iii) In the case of an Incentive Stock Option, ten years from
            the Date of Grant; or

                  (iv) Solely in the case of a Stock Appreciation Right granted
            in tandem with an Option, upon the expiration of the related Option.

            (c) ACCELERATION OR EXTENSION OF EXERCISE TIME. The Committee may
      (but shall not be obligated to) permit the exercise of an Option or Stock
      Appreciation Right (i) prior to the time such Option or Stock Appreciation
      Right would become exercisable under the terms of the Award Agreement,
      (ii) after the termination of the Option or Stock Appreciation Right under
      the terms of the Award Agreement, or (iii) after the expiration of the
      Option or Stock Appreciation Right.

                                       11


      6.4. EXERCISE PROCEDURES. Each Option and Stock Appreciation Right granted
under the Plan shall be exercised by written or electronic notice to the Company
or by such other exercise procedures as may be provided in the Award Agreement
which notice or other form of exercise must be received by the officer or
employee of the Company designated in the Award Agreement on or before the close
of business on the expiration date of the Award. The Purchase Price of shares
purchased upon exercise of an Option granted under the Plan shall be paid in
full in cash by the Participant pursuant to the Award Agreement; provided,
however, that the Committee may (but shall not be required to) permit payment to
be made by delivery to the Company of either (a) Common Stock (which may, in the
sole discretion of the Committee, include Restricted Shares or shares otherwise
issuable in connection with the exercise of the Option, subject to such rules as
the Committee deems appropriate) or (b) any combination of cash and Common
Stock, or (c) such other consideration as the Committee deems appropriate and in
compliance with applicable law (including payment in accordance with a cashless
exercise program under which, if so instructed by the Participant, Common Stock
may be issued directly to the Participant's broker or dealer upon receipt of an
irrevocable written or electronic notice of exercise from the Participant). In
the event that any Common Stock shall be transferred to the Company to satisfy
all or any part of the Purchase Price, the part of the Purchase Price deemed to
have been satisfied by such transfer of Common Stock shall be equal to the
product derived by multiplying the Fair Market Value as of the date of exercise
times the number of shares of Common Stock transferred to the Company. The
Participant may not transfer to the Company in satisfaction of the Purchase
Price any fractional share of Common Stock. Any part of the Purchase Price paid
in cash upon the exercise of any Option shall be added to the general funds of
the Company and may be used for any proper corporate purpose. Unless the
Committee shall otherwise determine, any Common Stock transferred to the Company
as payment of all or part of the Purchase Price upon the exercise of any Option
shall be held as treasury shares.

      6.5. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Options
outstanding on the date of such Change in Control, and all Stock Appreciation
Rights shall become immediately and fully exercisable. The provisions of this
Section 6.5 shall not be applicable to any Options or Stock Appreciation Rights
granted to a Participant if any Change in Control results from such
Participant's beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of Common Stock or Company Voting Securities.

                                       12


                                  ARTICLE VII.
                                RESTRICTED SHARES

      7.1. RESTRICTED SHARE AWARDS. The Committee may grant to any Participant
an Award of Common Stock in such number of shares, and on such terms, conditions
and restrictions, whether based on performance standards, periods of service,
retention by the Participant of ownership of purchased or designated shares of
Common Stock or other criteria, as the Committee shall establish. With respect
to performance-based Awards of Restricted Shares to "covered employees" (as
defined in Section 162(m) of the Code), performance targets will be limited to
specified levels of one or more of the Performance Goals. The terms of any
Restricted Share Award granted under this Plan shall be set forth in an Award
Agreement which shall contain provisions determined by the Committee and not
inconsistent with this Plan.

            (a) ISSUANCE OF RESTRICTED SHARES. As soon as practicable after the
      Date of Grant of a Restricted Share Award by the Committee, the Company
      shall cause to be transferred on the books of the Company, or its agent,
      Common Stock, registered on behalf of the Participant, evidencing the
      Restricted Shares covered by the Award, but subject to forfeiture to the
      Company as of the Date of Grant if an Award Agreement with respect to the
      Restricted Shares covered by the Award is not duly executed by the
      Participant and timely returned to the Company. All Common Stock covered
      by Awards under this Article VII shall be subject to the restrictions,
      terms and conditions contained in the Plan and the Award Agreement entered
      into by the Participant. Until the lapse or release of all restrictions
      applicable to an Award of Restricted Shares the share certificates, if
      any, representing such Restricted Shares may be held in custody by the
      Company, its designee, or, if the certificates bear a restrictive legend,
      by the Participant; provided, however, that if the Restricted Shares are
      uncertificated, other arrangements may be made, in the discretion of the
      Committee, to ensure the enforcement of the restrictions on such
      Restricted Shares. Upon the lapse or release of all restrictions with
      respect to an Award as described in Section 7.1(d), one or more share
      certificates, registered in the name of the Participant, for an
      appropriate number of shares as provided in Section 7.1(d), free of any
      restrictions set forth in the Plan and the Award Agreement shall be
      delivered to the Participant.

                                       13


            (b) STOCKHOLDER RIGHTS. Beginning on the Date of Grant of the
      Restricted Share Award and subject to execution of the Award Agreement as
      provided in Section 7.1(a), the Participant shall become a stockholder of
      the Company with respect to all shares subject to the Award Agreement and
      shall have all of the rights of a stockholder, including, but not limited
      to, the right to vote such shares and the right to receive dividends;
      provided, however, that any Common Stock distributed as a dividend or
      otherwise with respect to any Restricted Shares as to which the
      restrictions have not yet lapsed, shall be subject to the same
      restrictions as such Restricted Shares and held or restricted as provided
      in Section 7.1(a).

            (c) RESTRICTION ON TRANSFERABILITY. None of the Restricted Shares
      may be assigned or transferred (other than by will or the laws of descent
      and distribution, or to an inter vivos trust with respect to which the
      Participant is treated as the owner under Sections 671 through 677 of the
      Code), pledged or sold prior to lapse of the restrictions applicable
      thereto.

            (d) DELIVERY OF SHARES UPON VESTING. Upon expiration or earlier
      termination of the forfeiture period without a forfeiture and the
      satisfaction of or release from any other conditions prescribed by the
      Committee, or at such earlier time as provided under the provisions of
      Section 7.3, the restrictions applicable to the Restricted Shares shall
      lapse. As promptly as administratively feasible thereafter, subject to the
      requirements of Section 11.5, the Company shall deliver to the Participant
      or, in case of the Participant's death, to the Participant's Beneficiary,
      one or more share certificates for the appropriate number of shares of
      Common Stock, free of all such restrictions, except for any restrictions
      that may be imposed by law.

      7.2. TERMS OF RESTRICTED SHARES.

            (a) FORFEITURE OF RESTRICTED SHARES. Subject to Sections 7.2(b) and
      7.3, all Restricted Shares shall be forfeited and returned to the Company
      and all rights of the Participant with respect to such Restricted Shares
      shall terminate unless the Participant continues in the service of the
      Company or a Subsidiary as an employee until the expiration of the
      forfeiture period for such Restricted Shares and satisfies any and all
      other conditions set forth in the Award Agreement. The Committee shall
      determine the forfeiture period (which may, but need not, lapse in
      installments) and any other terms and conditions applicable with respect
      to any Restricted Share Award.

                                       14


            (b) WAIVER OF FORFEITURE PERIOD. Notwithstanding anything contained
      in this Article VII to the contrary, the Committee may, in its sole
      discretion, waive the forfeiture period and any other conditions set forth
      in any Award Agreement under appropriate circumstances (including the
      death, disability or Retirement of the Participant or a material change in
      circumstances arising after the date of an Award) and subject to such
      terms and conditions (including forfeiture of a proportionate number of
      the Restricted Shares) as the Committee shall deem appropriate.

      7.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all
restrictions applicable to the Restricted Share Award shall terminate fully and
the Participant shall immediately have the right to the delivery of share
certificate or certificates for such shares in accordance with Section 7.1(d).

                                  ARTICLE VIII.
                               PERFORMANCE AWARDS

      8.1. PERFORMANCE AWARDS.

            (a) AWARD PERIODS AND CALCULATIONS OF POTENTIAL INCENTIVE AMOUNTS.
      The Committee may grant Performance Awards to Participants. A Performance
      Award shall consist of the right to receive a payment (measured by the
      Fair Market Value of a specified number of shares of Common Stock,
      increases in such Fair Market Value during the Award Period and/or a fixed
      cash amount) contingent upon the extent to which certain predetermined
      performance targets have been met during an Award Period. Performance
      Awards may be made in conjunction with, or in addition to, Restricted
      Share Awards made under Article VII. The Award Period shall be two or more
      fiscal or calendar years as determined by the Committee. The Committee, in
      its discretion and under such terms as it deems appropriate, may permit
      newly eligible employees, such as those who are promoted or newly hired,
      to receive Performance Awards after an Award Period has commenced.

            (b) PERFORMANCE TARGETS. The performance targets may include such
      goals related to the performance of the Company or, where relevant, any
      one or more of its Subsidiaries or divisions and/or the performance of a
      Participant as may be established by the Committee in its discretion. In
      the case of Performance Awards to "covered employees" (as defined in
      Section 162(m) of the Code), the targets will be limited to specified
      levels of

                                       15


      one or more of the Performance Goals. The performance targets established
      by the Committee may vary for different Award Periods and need not be the
      same for each Participant receiving a Performance Award in an Award
      Period. Except to the extent inconsistent with the performance-based
      compensation exception under Section 162(m) of the Code, in the case of
      Performance Awards granted to employees to whom such section is
      applicable, the Committee, in its discretion, but only under extraordinary
      circumstances as determined by the Committee, may change any prior
      determination of performance targets for any Award Period at any time
      prior to the final determination of the Award when events or transactions
      occur to cause the performance targets to be an inappropriate measure of
      achievement.

            (c) EARNING PERFORMANCE AWARDS. The Committee, at or as soon as
      practicable after the Date of Grant, shall prescribe a formula to
      determine the percentage of the Performance Award to be earned based upon
      the degree of attainment of performance targets.

            (d) PAYMENT OF EARNED PERFORMANCE AWARDS. Subject to the
      requirements of Section 11.5, payments of earned Performance Awards shall
      be made in cash or Common Stock, or a combination of cash and Common
      Stock, in the discretion of the Committee. The Committee, in its sole
      discretion, may define such terms and conditions with respect to the
      payment of earned Performance Awards as it may deem desirable.

      8.2. TERMS OF PERFORMANCE AWARDS.

            (a) TERMINATION OF EMPLOYMENT. Unless otherwise provided below or in
      Section 8.3, in the case of a Participant's Termination of Employment
      prior to the end of an Award Period, the Participant will not have earned
      any Performance Awards.

            (b) RETIREMENT. If a Participant's Termination of Employment is
      because of Retirement prior to the end of an Award Period, the Participant
      will not be paid any Performance Awards, unless the Committee, in its sole
      and exclusive discretion, determines that an Award should be paid. In such
      a case, the Participant shall be entitled to receive a pro-rata portion of
      his or her Award as determined under Subsection (d).

                                       16


            (c) DEATH OR DISABILITY. If a Participant's Termination of
      Employment is due to death or disability (as determined in the sole and
      exclusive discretion of the Committee) prior to the end of an Award
      Period, the Participant or the Participant's personal representative shall
      be entitled to receive a pro-rata share of his or her Award as determined
      under Subsection (d).

            (d) PRO-RATA PAYMENT. The amount of any payment made to a
      Participant whose employment is terminated by Retirement, death or
      disability (under circumstances described in Subsections (b) and (c)) will
      be the amount determined by multiplying the amount of the Performance
      Award which would have been earned, determined at the end of the Award
      Period, had such employment not been terminated, by a fraction, the
      numerator of which is the number of whole months such Participant was
      employed during the Award Period, and the denominator of which is the
      total number of months of the Award Period. Any such payment made to a
      Participant whose employment is terminated prior to the end of an Award
      Period under this Section 8.2 shall be made at the end of the respective
      Award Period, unless otherwise determined by the Committee in its sole
      discretion. Any partial payment previously made or credited to a deferred
      account for the benefit of a Participant as provided under Section 8.1(d)
      of the Plan shall be subtracted from the amount otherwise determined as
      payable as provided in this Section.

            (e) OTHER EVENTS. Notwithstanding anything to the contrary in this
      Article VIII, the Committee may, in its sole and exclusive discretion,
      determine to pay all or any portion of a Performance Award to a
      Participant who has terminated employment prior to the end of an Award
      Period under certain circumstances (including the death, disability or
      Retirement of the Participant or a material change in circumstances
      arising after the Date of Grant) and subject to such terms and conditions
      as the Committee shall deem appropriate.

      8.3. CHANGE IN CONTROL. Unless otherwise provided by the Committee in the
applicable Award Agreement, in the event of a Change in Control, all Performance
Awards for all Award Periods shall immediately become fully payable to all
Participants and shall be paid to Participants in accordance with Section 8.2(d)
within 30 days after such Change in Control.

                                       17


                                   ARTICLE IX.
                            OTHER STOCK-BASED AWARDS

      8.4. GRANT OF OTHER STOCK-BASED AWARDS. Other stock-based awards,
consisting of stock purchase rights (with or without loans to Participants by
the Company containing such terms as the Committee shall determine), Awards of
cash, Awards of Common Stock, or Awards valued in whole or in part by reference
to, or otherwise based on, Common Stock, may be granted either alone or in
addition to or in conjunction with other Awards under the Plan. Subject to the
provisions of the Plan, the Committee shall have sole and complete authority to
determine the persons to whom and the time or times at which such Awards shall
be made, the number of shares of Common Stock to be granted pursuant to such
Awards, and all other conditions of the Awards. Any such Award shall be
confirmed by an Award Agreement executed by the Company and the Participant,
which Award Agreement shall contain such provisions as the Committee determines
to be necessary or appropriate to carry out the intent of this Plan with respect
to such Award.

      8.5. TERMS OF OTHER STOCK-BASED AWARDS. In addition to the terms and
conditions specified in the Award Agreement, Awards made pursuant to this
Article 10 shall be subject to the following:

            (a) Any Common Stock subject to Awards made under this Article IX
      may not be sold, assigned, transferred, pledged or otherwise encumbered
      prior to the date on which the shares are issued, or, if later, the date
      on which any applicable restriction, performance or deferral period
      lapses; and

            (b) If specified by the Committee in the Award Agreement, the
      recipient of an Award under this Article IX shall be entitled to receive,
      currently or on a deferred basis, interest or dividends or dividend
      equivalents with respect to the Common Stock or other securities covered
      by the Award; and

            (c) The Award Agreement with respect to any Award shall contain
      provisions dealing with the disposition of such Award in the event of a
      Termination of Employment prior to the exercise, realization or payment of
      such Award, whether such termination occurs because of Retirement,
      disability, death or other reason, with such provisions to take account of
      the specific nature and purpose of the Award.

                                       18


      8.6. FOREIGN QUALIFIED AWARDS. Awards under the Plan may be granted to
such employees of the Company and its Subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Plan as may be necessary
or appropriate to comply with the applicable laws of such foreign jurisdictions
and to afford Participants favorable treatment under such laws; provided,
however, that no Award shall be granted under any such supplement with terms or
conditions inconsistent with the provision set forth in the Plan.

                                   ARTICLE IX.
                        SHORT-TERM CASH INCENTIVE AWARDS

      9.1. ELIGIBILITY. Executive officers of the Company who are from time to
time determined by the Committee to be "covered employees" for purposes of
Section 162(m) of the Code will be eligible to receive short-term cash incentive
awards under this Article X.

      9.2. AWARDS.

            (a) PERFORMANCE TARGETS. For each fiscal year of the Company, the
      Committee shall establish objective performance targets based on specified
      levels of one or more of the Performance Goals. Such performance targets
      shall be established by the Committee on a timely basis to ensure that the
      targets are considered "preestablished" for purposes of Section 162(m) of
      the Code.

            (b) AMOUNTS OF AWARDS. In conjunction with the establishment of
      performance targets for a fiscal year, the Committee shall adopt an
      objective formula (on the basis of percentages of Participants' salaries,
      shares in a bonus pool or otherwise) for computing the respective amounts
      payable under the Plan to Participants if and to the extent that the
      performance targets are attained. Such formula shall comply with the
      requirements applicable to performance-based compensation plans under
      Section 162(m) of the Code and, to the extent based on percentages of a
      bonus pool, such percentages shall not exceed 100% in the aggregate.

            (c) PAYMENT OF AWARDS. Awards will be payable to Participants in
      cash each year upon prior written certification by the Committee of
      attainment of the specified performance targets for the preceding fiscal
      year.

                                       19


            (d) NEGATIVE DISCRETION. Notwithstanding the attainment by the
      Company of the specified performance targets, the Committee shall have the
      discretion, which need not be exercised uniformly among the Participants,
      to reduce or eliminate the award that would be otherwise paid.

            (e) GUIDELINES. The Committee may adopt from time to time written
      policies for its implementation of this Article X. Such guidelines shall
      reflect the intention of the Company that all payments hereunder qualify
      as performance-based compensation under Section 162(m) of the Code.

            (f) NON-EXCLUSIVE ARRANGEMENT. The adoption and operation of this
      Article X shall not preclude the Board or the Committee from approving
      other short-term incentive compensation arrangements for the benefit of
      individuals who are Participants hereunder as the Board or Committee, as
      the case may be, deems appropriate and in the best interests of the
      Company.

                                   ARTICLE X.
                      TERMS APPLICABLE GENERALLY TO AWARDS
                             GRANTED UNDER THE PLAN

      10.1. PLAN PROVISIONS CONTROL AWARD TERMS. The terms of the Plan shall
govern all Awards granted under the Plan, and in no event shall the Committee
have the power to grant any Award under the Plan which is contrary to any of the
provisions of the Plan. In the event any provision of any Award granted under
the Plan shall conflict with any term in the Plan as constituted on the Date of
Grant of such Award, the term in the Plan as constituted on the Date of Grant of
such Award shall control. Except as provided in Section 11.3 and Section 11.7,
the terms of any Award granted under the Plan may not be changed after the Date
of Grant of such Award so as to materially decrease the value of the Award
without the express written approval of the holder.

      10.2. AWARD AGREEMENT. No person shall have any rights under any Award
granted under the Plan unless and until the Company and the Participant to whom
such Award shall have been granted shall have executed and delivered an Award
Agreement or received any other Award acknowledgment authorized by the Committee
expressly granting the Award to such person and containing provisions setting
forth the terms of the Award.

                                       20


      10.3. MODIFICATION OF AWARD AFTER GRANT. No Award granted under the Plan
to a Participant may be modified (unless such modification does not materially
decrease the value of the Award) after the Date of Grant except by express
written agreement between the Company and the Participant, provided that any
such change (a) shall not be inconsistent with the terms of the Plan, and (b)
shall be approved by the Committee.

      10.4. LIMITATION ON TRANSFER. Except as provided in Section 7.1(c) in the
case of Restricted Shares, a Participant's rights and interest under the Plan
may not be assigned or transferred other than by will or the laws of descent and
distribution, and during the lifetime of a Participant, only the Participant
personally (or the Participant's personal representative) may exercise rights
under the Plan. The Participant's Beneficiary may exercise the Participant's
rights to the extent they are exercisable under the Plan following the death of
the Participant. Notwithstanding the foregoing, the Committee may grant
Non-Qualified Stock Options that are transferable, without payment of
consideration, to immediate family members of the Participant or to trusts or
partnerships for such family members, and the Committee may also amend
outstanding Non-Qualified Stock Options to provide for such transferability.

      10.5. TAXES. The Company shall be entitled, if the Committee deems it
necessary or desirable, to withhold (or secure payment from the Participant in
lieu of withholding) the amount of any withholding or other tax required by law
to be withheld or paid by the Company with respect to any amount payable and/or
shares issuable under such Participant's Award, or with respect to any income
recognized upon a disqualifying disposition of shares received pursuant to the
exercise of an Incentive Stock Option, and the Company may defer payment or
issuance of the cash or shares upon exercise or vesting of an Award unless
indemnified to its satisfaction against any liability for any such tax. The
amount of such withholding or tax payment shall be determined by the Committee
and shall be payable by the Participant at such time as the Committee determines
in accordance with the following rules:

            (a) The Participant shall have the right to elect to meet his or her
      withholding requirement (i) by having withheld from such Award at the
      appropriate time that number of shares of Common Stock, rounded up to the
      next whole share, whose Fair Market Value is equal to the amount of
      withholding taxes due, (ii) by direct payment to the Company in cash of
      the amount of any taxes required to be withheld with respect to such Award
      or (iii) by a combination of shares and cash.

                                       21


            (b) The Committee shall have the discretion as to any Award, to
      cause the Company to pay to tax authorities for the benefit of any
      Participant, or to reimburse such Participant for the individual taxes
      which are due on the grant, exercise or vesting of any share Award, or the
      lapse of any restriction on any share Award (whether by reason of a
      Participant's filing of an election under Section 83(b) of the Code or
      otherwise), including, but not limited to, Federal income tax, state
      income tax, local income tax and excise tax under Section 4999 of the
      Code, as well as for any such taxes as may be imposed upon such tax
      payment or reimbursement.

            (c) In the case of Participants who are subject to Section 16 of the
      Exchange Act, the Committee may impose such limitations and restrictions
      as it deems necessary or appropriate with respect to the delivery or
      withholding of shares of Common Stock to meet tax withholding obligations.

      10.6. SURRENDER OF AWARDS. Any Award granted under the Plan may be
surrendered to the Company for cancellation on such terms as the Committee and
the holder approve.

      10.7. ADJUSTMENTS TO REFLECT CAPITAL CHANGES.

            (a) RECAPITALIZATION. The number and kind of shares subject to
      outstanding Awards, the Purchase Price or Exercise Price for such shares,
      the number and kind of shares available for Awards subsequently granted
      under the Plan and the maximum number of shares in respect of which Awards
      can be made to any Participant in any calendar year shall be appropriately
      adjusted to reflect any stock dividend, stock split, combination or
      exchange of shares, merger, consolidation or other change in
      capitalization with a similar substantive effect upon the Plan or the
      Awards granted under the Plan. The Committee shall have the power and sole
      discretion to determine the amount of the adjustment to be made in each
      case.

            (b) MERGER. After any Merger in which the Company is the surviving
      corporation, each Participant shall, at no additional cost, be entitled
      upon any exercise of all Options or receipt of other Award to receive
      (subject to any required action by stockholders), in lieu of the number of
      shares of Common Stock receivable or exercisable pursuant to such Award,
      the number and class of shares or other securities to which such
      Participant would have been entitled pursuant to the terms of the Merger
      if, at the time

                                       22


      of the Merger, such Participant had been the holder of record of a number
      of shares equal to the number of shares receivable or exercisable pursuant
      to such Award. Comparable rights shall accrue to each Participant in the
      event of successive Mergers of the character described above. In the event
      of a Merger in which the Company is not the surviving corporation, the
      surviving, continuing, successor, or purchasing corporation, as the case
      may be (the "Acquiring Corporation"), shall either assume the Company's
      rights and obligations under outstanding Award Agreements or substitute
      awards in respect of the Acquiring Corporation's stock for such
      outstanding Awards. In the event the Acquiring Corporation fails to assume
      or substitute for such outstanding Awards, the Board shall provide that
      any unexercisable and/or unvested portion of the outstanding Awards shall
      be immediately exercisable and vested as of a date prior to such Merger,
      as the Board so determines. The exercise and/or vesting of any Award that
      was permissible solely by reason of this Section 11.7(b) shall be
      conditioned upon the consummation of the Merger. Any Options which are
      neither assumed by the Acquiring Corporation nor exercised as of the date
      of the Merger shall terminate effective as of the effective date of the
      Merger.

            (c) OPTIONS TO PURCHASE SHARES OR STOCK OF ACQUIRED COMPANIES. After
      any Merger in which the Company or a Subsidiary shall be a surviving
      corporation, the Committee may grant substituted options under the
      provisions of the Plan, pursuant to Section 424 of the Code, replacing old
      options granted under a plan of another party to the Merger whose shares
      or stock subject to the old options may no longer be issued following the
      Merger. The foregoing adjustments and manner of application of the
      foregoing provisions shall be determined by the Committee in its sole
      discretion. Any such adjustments may provide for the elimination of any
      fractional shares which might otherwise become subject to any Options.

      10.8. NO RIGHT TO EMPLOYMENT. No employee or other person shall have any
claim of right to be granted an Award under this Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any employee any right to be
retained in the employ of the Company or any of its Subsidiaries.

      10.9. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES. Payments received by a
Participant pursuant to the provisions of the Plan shall not be included in the
determination of benefits under any pension, group insurance or other benefit
plan applicable to the Participant which is maintained by the Company or any of
its Subsidiaries, except as may be provided under the terms of such plans or
determined by the Board.

                                       23


      10.10. GOVERNING LAW. All determinations made and actions taken pursuant
to the Plan shall be governed by the laws of the State of Delaware and construed
in accordance therewith.

      10.11. NO STRICT CONSTRUCTION. No rule of strict construction shall be
implied against the Company, the Committee, or any other person in the
interpretation of any of the terms of the Plan, any Award granted under the Plan
or any rule or procedure established by the Committee.

      10.12. COMPLIANCE WITH RULE 16b-3. It is intended that unless the
Committee determines otherwise, Awards under the Plan be eligible for exemption
under Rule 16b-3. The Board is authorized to amend the Plan and to make any such
modifications to Award Agreements to comply with Rule 16b-3, as it may be
amended from time to time, and to make any other such amendments or
modifications as it deems necessary or appropriate to better accomplish the
purposes of the Plan in light of any amendments made to Rule 16b-3.

      10.13. CAPTIONS. The captions (i.e., all Section headings) used in the
Plan are for convenience only, do not constitute a part of the Plan, and shall
not be deemed to limit, characterize or affect in any way any provisions of the
Plan, and all provisions of the Plan shall be construed as if no captions have
been used in the Plan.

      10.14. SEVERABILITY. Whenever possible, each provision in the Plan and
every Award at any time granted under the Plan shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision
of the Plan or any Award at any time granted under the Plan shall be held to be
prohibited by or invalid under applicable law, then (a) such provision shall be
deemed amended to accomplish the objectives of the provision as originally
written to the fullest extent permitted by law and (b) all other provisions of
the Plan and every other Award at any time granted under the Plan shall remain
in full force and effect.

      10.15. AMENDMENT AND TERMINATION.

            (a) AMENDMENT. The Board shall have complete power and authority to
      amend the Plan at any time; provided, however, that the Board shall not,
      without the requisite affirmative approval of stockholders of the Company,
      make any amendment which requires stockholder approval under the Code,
      unless such compliance is no longer desired under the Code, or under any
      other applicable law or rule of any stock exchange which lists

                                       24


      Common Stock or Company Voting Securities. No termination or amendment of
      the Plan may, without the consent of the Participant to whom any Award
      shall theretofore have been granted under the Plan, adversely affect the
      right of such individual under such Award.

            (b) TERMINATION. The Board shall have the right and the power to
      terminate the Plan at any time. No Award shall be granted under the Plan
      after the termination of the Plan, but the termination of the Plan shall
      not have any other effect and any Award outstanding at the time of the
      termination of the Plan may be exercised after termination of the Plan at
      any time prior to the expiration date of such Award to the same extent
      such Award would have been exercisable had the Plan not terminated.

                                   * * * * * *

                                       25

EX-31.1

EXHIBIT 31.1
CERTIFICATIONS

I, L. Patrick Hassey, President and Chief Executive Officer of Allegheny Technologies Incorporated, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2005

/s/ L. Patrick Hassey  

L. Patrick Hassey 

President and Chief Executive Officer 

EX-31.2

EXHIBIT 31.2
CERTIFICATIONS

I, Richard J. Harshman, Executive Vice President–Finance and Chief Financial Officer of Allegheny Technologies Incorporated, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Allegheny Technologies Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.   The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)   All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)   Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2005

/s/ Richard J. Harshman  

Richard J. Harshman 

Executive Vice President-Finance
and Chief Financial Officer 

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Allegheny Technologies Incorporated (the “Company”) on Form 10-Q for the period ended March 31, 2005 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned, in the capacities and on the dates indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1.   The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.   The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2005	/s/ L. Patrick Hassey
	L. Patrick Hassey
	President and Chief Executive Officer

Date: May 5, 2005	/s/ Richard J. Harshman
	Richard J. Harshman
	Executive Vice President-Finance and Chief Financial Officer