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EXHIBIT 10(e)(iii)
CABOT CORPORATION
SUPPLEMENTAL RETIREMENT INCENTIVE SAVINGS PLAN
PREAMBLE
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A supplemental profit sharing program was authorized by a
vote of the Board of Directors of Cabot Corporation (the
"Corporation") on September 10, 1976. Pursuant to that vote,
letter agreements were entered into between the Corporation and
certain of the Corporation's executive officers.
A nonqualified supplemental plan (as herein amended and
restated, and as the same may hereafter be amended, the
"Supplemental Plan") was adopted pursuant to a vote of the Board
of Directors of the Corporation on February 10, 1984, its purpose
being to provide benefits to a designated group of managers who
are highly compensated employees of the Corporation or its
subsidiaries, supplemental to benefits provided under the
Corporation's qualified profit-sharing and savings program
(currently the Cabot Retirement Incentive Savings Plan, or
"CRISP"). The terms of the Supplemental Plan as amended and
restated and set forth herein are effective as of September 9,
1988; PROVIDED, that nothing herein shall be deemed to affect the
payment or computation of benefits in pay status on (or
distributed in full prior to) the date of this restatement.
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SECTION 1
Definitions
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When used herein, the words and phrases defined shall have
the following meanings unless a different meaning is clearly
required by the context. Terms used herein which are defined in
Article 1 of the CRISP shall have the meanings assigned to them
in the CRISP unless a different meaning is set forth below.
1.1. "Applicable Matching Percentage" means (i) for any
period for which Basic Matching Contributions but no
Discretionary Matching Contributions are made under the CRISP,
five and five-eighths (5.625%) percent; and (ii) for any period
for which Discretionary Matching Contributions are made under the
CRISP, 5.625% PLUS the maximum rate (expressed as a percentage of
Compensation) at which Discretionary Matching Contributions are
made for such period with respect to any participant in the
CRISP.
1.2. "Beneficiary" means the individual(s) or entity(ies)
entitled under Section 3.6 below to receive any benefits
hereunder upon the death of a Supplemental Plan Participant.
1.3. "Committee" means the Compensation Committee of the
Board of Directors, or its delegates.
1.4. "Retirement" means termination of employment with the
Corporation and other Affiliated Employers following attainment
by the Supplemental Plan Participant of his or her Early
Retirement Age or Normal Retirement Age. An individual whose
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employment has terminated by reason of Retirement shall be
treated as having "Retired."
1.5. "Supplemental Plan Participant" has the meaning
provided in Section 2 below.
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SECTION 2
Participation
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2.1. Participation. Each Participant in the CRISP (i)
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whose base salary for any year (as determined by the Committee),
before reduction for deferrals, if any, under the CRISP, the
Corporation's nonqualified Deferred Compensation Plan, or any
salary deferral under Section 125 of the Code, equals or exceeds
the dollar limitation applicable to such year under Section
401(a)(17) of the Code, and (ii) who, for such year (or for such
portion of the year during which he or she satisfies the
requirements of (i) above) has elected to participate in pre-tax
deferrals and/or after-tax contributions under CRISP to the
maximum extent required and permissible thereunder (taking into
account any limitations imposed under the CRISP to comply with
the qualification requirements of the Code) to obtain the maximum
possible Matching Contribution under CRISP, shall be eligible to
participate in and accrue benefits under this Supplemental Plan.
The eligibility requirements described at (ii) above shall apply
only with respect to periods beginning on or after October 1,
1994 and shall not apply for purposes of determining eligibility
to share in any accruals under Section 3.1(b) below. For
purposes of Section 3(36) of ERISA, the Supplemental Plan shall
be treated as two separate plans, one of which will be deemed to
provide only benefits (if any) in excess of the limitations of
section 415 of the Code.
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SECTION 3
Benefits
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3.1. Credits to Memorandum Accounts.
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(a) For each month or Plan Year for which Matching
Contributions are made to the CRISP, the Committee shall,
as soon as practicable after the close of such month or year
(as the case may be), accrue to a memorandum account
maintained by the Corporation, for each individual who is a
Supplemental Plan Participant for all or any part of such
period, an amount equal to the excess of (i) the Applicable
Matching Percentage of the Supplemental Plan Participant's
Compensation for such period (such Compensation to be
determined, solely for this purpose, without regard to the
limitations described in Section 1.21(d) of the CRISP, but
taking into account the limitations described in Section
1.21(c) of the CRISP), over (ii) the sum of (A) the amount
which is actually allocated to the Supplemental Plan
Participant's Matching Contribution Account in the CRISP
with respect to such period, plus (B) any additional credit
made for the benefit of the Supplemental Plan Participant
with respect to such period under Section 4(a)(ii) of the
Corporation's nonqualified Deferred Compensation Plan.
(b) As soon as practicable after the end of each Plan
Year, the Committee shall also accrue to a memorandum
account maintained by the Corporation, for each Supplemental
Plan Participant, an amount equal to the amount (if any)
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that would have been contributed for the benefit of the
Supplemental Plan Participant by his or her Affiliated
Employer under Section 3.5 of the CRISP for such Plan Year
had the limitations of Sections 401(a)(17) and 415 of the
Code and the corresponding limitations under the CRISP not
applied and had such contributions and allocations under the
CRISP been based on Compensation increased by deferrals (if
any) under the Corporation's nonqualified Deferred
Compensation Plan, such amount to be reduced by the amount
(if any) which is actually contributed and allocated under
Section 3.5 of the CRISP to the Supplemental Plan
Participant's account in the CRISP; provided, that with
respect to periods ending prior to October 1, 1994, no such
accrual shall be made under this paragraph to the extent
that it would cause Income for the particular year for which
it was being made, reduced by the amount of such accrual on
an after-tax basis, to be less than that percentage of
Stockholders' Equity at the beginning of such year specified
in Section 3.5 of the CRISP.
(c) Amounts accrued hereunder shall be converted to
units and treated as if invested in the Cabot Stock Fund
under the CRISP, except as provided in Sections 3.1(d) and
3.1(e) hereof.
(d) From and after the date of a Change in Control,
each memorandum account shall be treated as if invested in a
fixed-income vehicle earning interest at the rate earned by
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the most currently issued 10-year Treasury Notes; provided,
that this paragraph shall operate to change the basis for
measuring investment return on memorandum accounts upon a
Change in Control only if such change would then be
consistent with continued exemption of interests hereunder
from the definition of "derivative securities" under Rule
16a-1(c) promulgated under the Securities Exchange Act of
1934, as amended (or any successor Rule).
(e) Beginning as of the Valuation Date next following
the earliest of the Supplemental Plan Participant's
Retirement, other termination of employment, death while
employed by an Affiliated Employer, or Total and Permanent
Disability, the Supplemental Plan Participant's account
shall be treated as if invested (i) in a fixed-income
vehicle earning interest at the rate earned by the most
currently issued 10-year U.S. Treasury Notes on the date of
reference, or (ii) on such other reasonable basis (other
than one related to or derived from the common stock of the
Corporation) as the Committee shall determine from time to
time. The interest rate shall be determined and interest
accrued as of each Valuation Date until all amounts have
been paid to or on behalf of the Supplemental Plan
Participant.
3.2. Amount, Form and Timing of Benefit Payments.
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(a) In the event of a Supplemental Plan Participant's
termination of employment with the Affiliated Employers
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(other than by reason of Retirement, Total and Permanent
Disability, or death), his or her vested balance under the
Supplemental Plan shall commence to be paid as soon as
practicable on or after the Participant's Annuity Starting
Date in the form of 120 monthly installments, each
installment calculated by dividing the unpaid vested
balance, valued as of the preceding Valuation Date, by the
number of installments remaining to be paid; provided,
however, that, the Committee in its discretion may
accelerate payment of all or any portion of the account if
it determines such acceleration to be in the interests of
the Corporation. For purposes of this paragraph, the vested
balance of a Supplemental Plan Participant shall be the
product of (A) the balance of his or her memorandum account
determined under Section 3.1, times (B) the percentage
representing the vested interest of such Supplemental Plan
Participant in his or her CRISP Account (that is, Matching
Contribution Account or Company Contributions Account) as
determined under the applicable vesting rules of the CRISP.
(b) In the event of a Supplemental Plan Participant's
Retirement or termination of employment by reason of Total
and Permanent Disability, the balance of his or her
memorandum account determined under Section 3.1 shall be
distributed at the same time and in the same manner as the
Supplemental Plan Participant's benefits under the CRISP,
subject to the following special rules:
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(i) If the balance of the Supplemental Plan
Participant's memorandum account at Retirement or
termination of employment is less than $50,000, the
Committee may distribute the account in a lump sum (or
on some other accelerated basis) notwithstanding the
Supplemental Plan Participant's election under the
CRISP.
(ii) If the Supplemental Plan Participant elects
a distribution of a single-life or joint and survivor
annuity under Section 9.3(a)(iv) of the CRISP, the
Committee's discretion as described above to distribute
the memorandum account hereunder on an accelerated
basis shall apply regardless of the size of the balance
of the Supplemental Plan Participant's memorandum
account hereunder.
(iii) If the Supplemental Plan Participant elects
a lump sum payment of his or her CRISP benefit, that
election shall be effective with respect to his or her
Supplemental Plan benefit hereunder only with the
approval of the Committee. If the Committee does not
approve a lump sum payment election, the Supplemental
Plan Participant's memorandum account hereunder shall
be distributed in 120 monthly installments as described
at 3.2(a) above or on such accelerated basis as the
Committee may determine.
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(iv) If the Supplemental Plan Participant's
memorandum account is to be distributed in
installments, the amount of each installment shall be
calculated by dividing the unpaid balance, valued as of
the preceding Valuation Date, by the number of
installments remaining to be paid. Any distribution
hereunder that is to be made over the life of the
Supplemental Plan Participant or the lives of the
Supplemental Plan Participant and his or her
Beneficiary shall be based on such reasonable actuarial
assumptions as the Committee may determine (which may
be different than those applied under the Corporation's
qualified plans or those used by commercial insurance
companies).
(c) In the event of a Supplemental Plan Participant's
termination of employment with the Affiliated Employers by
reason of death, the balance of his or her memorandum
account determined under Section 3.1 shall be paid in a
single sum to the Supplemental Plan Participant's
Beneficiary as soon as practicable after the receipt by the
Supplemental Plan Participant's Affiliated Employer of
notice of the Supplemental Plan Participant's death.
(d) If a Supplemental Plan Participant described in
paragraph (a) or (b) dies prior to the complete distribution
of his or her vested benefit, the remaining installments
shall be paid to his or her Beneficiary; provided, that upon
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application by such Beneficiary showing financial hardship
or other adequate cause as determined by the Committee in
its sole discretion, the Committee may cause the remaining
balance in the decedent's memorandum account to be paid in a
lump sum to the Beneficiary in complete satisfaction of any
remaining benefit obligation to such Beneficiary hereunder.
(e) If the Supplemental Plan Participant elects to
roll over his or her vested CRISP benefit to the
Corporation's Cash Balance Plan, the vested balance of his
or her memorandum account hereunder shall be treated as
having been transferred to the Corporation's nonqualified
plan maintained as a supplement to the Corporation's Cash
Balance Plan, and paid in accordance with the terms of that
supplemental plan.
(f) All amounts payable hereunder shall be paid in
cash only.
3.3. Nature of Account. The memorandum account maintained
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by the Corporation for a Supplemental Plan Participant shall be a
book-entry account only, shall hold no actual shares of the
Corporation's stock, and shall represent no interest in or
ownership of any such stock. Supplemental Plan Participants
shall have no voting rights or any other shareholder rights by
reason of participation in this Supplemental Plan.
3.4. No Payment While Employed. No amounts accrued
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hereunder on behalf of a Supplemental Plan Participant may be
distributed prior to his or her Annuity Starting Date or death,
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as the case may be. If a Supplemental Plan Participant whose
employment has terminated returns to the employ of an Affiliated
Employer, any benefits remaining to be paid to such Supplemental
Plan Participant shall be suspended during the period of
reemployment. Upon his or her subsequent termination of
employment, the Supplemental Plan Participant's memorandum
account shall be payable in accordance with the rules set forth
in Section 3.2 above.
3.5. Benefits Unfunded. This Supplemental Plan shall not
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be construed to create a trust of any kind or a fiduciary
relationship between any Affiliated Employer and a Supplemental
Plan Participant. Neither Supplemental Plan Participants nor
their beneficiaries, nor any other person, shall have any rights
against any Affiliated Employer or its assets in respect of any
benefits hereunder, other than rights as general creditors.
Nothing in this Section 3.5, however, shall preclude an
Affiliated Employer from establishing and funding a trust for the
purpose of paying benefits hereunder, if such trust's assets are
subject to the claims of the Affiliated Employer's general
creditors in the event of bankruptcy or insolvency.
3.6. Designation of Beneficiary. A Supplemental Plan
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Participant may designate, in writing, one or more beneficiaries
under this Supplemental Plan, who may be the same as or different
than those named under the CRISP to receive benefits, if any,
payable upon the Supplemental Plan Participant's death; provided,
that in the case of a Supplemental Plan Participant who is
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married at time of death, the Supplemental Plan Participant's
surviving spouse shall be treated as the sole Beneficiary unless
he or she has consented (in accordance with procedures similar to
those in the CRISP relating to spousal consent) to the
designation of one or more other Beneficiaries. In the absence
of any beneficiary so designated, benefits payable following
death shall be paid to the Supplemental Plan Participant's
surviving spouse, if any; if none, to such person or persons
(including the decedent's estate) as are designated to receive
any benefits remaining to be paid under the CRISP; or if none of
the foregoing, to such person or persons as shall be designated
by the Committee.
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SECTION 4
Certain Forfeitures
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4.1. Termination for Cause. Notwithstanding anything to
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the contrary in this Supplemental Plan, benefits payable
hereunder shall be forfeited by the Supplemental Plan Participant
if the Supplemental Plan Participant's termination of employment
was requested by an Affiliated Employer and the termination was
determined by the Committee to be for "cause." For purposes of
this Supplemental Plan, "cause" shall mean any action or failure
to act by the Supplemental Plan Participant which the Committee
in its sole discretion determines to have constituted negligence
or misconduct in the performance of the Supplemental Plan
Participant's duty to his or her Affiliated Employer.
Notwithstanding the foregoing provisions of this Section 4.1, in
respect of any termination of a Supplemental Plan Participant's
employment requested by an Affiliated Employer within the three-
year period immediately following a Change in Control, "cause"
shall mean only (i) the willful and continued failure by the
Supplemental Plan Participant to substantially perform his or her
duties with his or her Affiliated Employer, after a written
demand for substantial performance is delivered to the
Supplemental Plan Participant by the Affiliated Employer which
demand specifies the manner in which the Affiliated Employer
believes that the Supplemental Plan Participant has not
substantially performed the Supplemental Plan Participant's
duties, or (ii) the willful engaging by the Supplemental Plan
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Participant in conduct which is demonstrably and materially
injurious to the Affiliated Employer, monetarily or otherwise.
For purposes of clauses (i) and (ii) of the preceding sentence,
no act, or failure to act, on the Supplemental Plan Participant's
part shall be deemed "willful" unless done, or omitted to be
done, by the Supplemental Plan Participant not in good faith and
without reasonable belief that the Supplemental Plan
Participant's act or failure to act was in the best interest of
the Affiliated Employer.
4.2. Other Terminations of Employment. In the event of a
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Supplemental Plan Participant's termination of employment other
than by reason of death, Retirement or Total and Permanent
Disability, that portion of his or her memorandum account balance
that is not payable under Section 3.2(a) shall be promptly
forfeited. If such Supplemental Plan Participant is later
reemployed by an Affiliated Employer under circumstances
entitling him or her to a restoration of all or a portion of his
or her account balance under the CRISP, the Committee shall make
an appropriate corresponding restorative adjustment to his or her
memorandum account hereunder.
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SECTION 5
Administration
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5.1. Duties of Committee. This Supplemental Plan shall be
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administered by the Committee in accordance with its terms and
purposes. The Committee shall determine, in accordance with
Section 3 hereunder, the amount and manner of payment of the
benefits due to or on behalf of each Supplemental Plan
Participant from this Supplemental Plan and shall cause them to
be paid by the Corporation accordingly. The Committee may
delegate its powers, duties and responsibilities to one or more
individuals (including in the Committee's discretion employees of
one or more Affiliated Employers) or one or more committees of
such individuals.
5.2. Finality of Decision. The decisions made by and the
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actions taken by the Committee in the administration of this
Supplemental Plan shall be final and conclusive with respect to
all persons, and neither the Committee nor individual members
thereof, nor its or their delegates hereunder, shall be subject
to individual liability with respect to this Supplemental Plan.
5.3. Benefit Claims; Appeal and Review.
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(a) If any person believes that he or she is being
denied any rights or benefits under this Supplemental Plan,
such person may file a claim in writing with the Committee.
The Committee will notify such person of its decision with
respect to such claim in writing. If the claim is denied by
the Committee, such notification will be written in a manner
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calculated to be understood by such person and will contain
(i) specific reasons for denial, (ii) specific reference to
pertinent plan provisions, (iii) a description of any
additional material or information necessary for such person
to perfect such claim and an explanation of why such
material or information is necessary, and (iv) information
as to the steps to be taken if the person wishes to submit a
request for review. Notification of Committee decisions
with respect to claims will be given within 90 days after
the claim is received by the Committee (or within 180 days,
if special circumstances require an extension of time for
processing the claim, and if written notice of such
extension and circumstances is given to such person within
the initial 90-day period). If such notification is not
given within such period, the claim will be considered
denied as of the last day of such period and such person may
request a review of his or her claim.
(b) Within 60 days after the date on which a person
receives a written notice of a denied claim (or, if
applicable, within 60 days after the date on which such
denial is considered to have occurred) such person (or his
or her duly authorized representative) may (i) file a
written request with the Committee for a review of his or
her denied claim and of pertinent documents and (ii) submit
written issues and comments to the Committee. The Committee
will notify such person of its decision in writing. Such
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notification will be written in a manner calculated to be
understood by such person and will contain specific reasons
for the decision as well as specific references to pertinent
Plan provisions. The decision on review will be made within
60 days after the request for review is received by the
Committee (or within 120 days, if special circumstances
require an extension of time for processing the request,
such as an election by the Committee to hold a hearing, and
if written notice of such extension and circumstances is
given to such person within the initial 60-day period). If
the decision on review is not made within such period, the
claim will be considered denied.
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SECTION 6
Amendment and Termination
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6.1. Amendment and Termination. While the Corporation
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intends to maintain this Supplemental Plan in conjunction with
the CRISP for as long as it deems necessary, the Board of
Directors reserves the right to amend and/or terminate it at any
time for whatever reasons it may deem appropriate; provided, that
no such amendment shall reduce the balance of any Supplemental
Plan Participant's memorandum account as of the Valuation Date
next preceding the date of such amendment. Amendments affecting
the accrual of benefits hereunder in respect of Supplemental Plan
Participants who are subject to the short-swing profit provisions
of Section 16 of the Securities Exchange Act of 1934, as amended,
may be made no more frequently than once every six (6) months.
Notwithstanding any other provision hereunder, during the three-
year period immediately following a Change in Control, this
Supplemental Plan may not be terminated, altered or amended in a
way that would decrease future accrual of, eligibility for, or
entitlement to, benefits hereunder. This Section 6.1 may not be
altered or amended during that same three-year period in any way
except with the prior written consent of all of the then
Supplemental Plan Participants.
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SECTION 7
Miscellaneous
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7.1. No Employment Rights. Nothing contained in this
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Supplemental Plan shall be construed as a contract of employment
between any Affiliated Employer and a Supplemental Plan
Participant, or as giving any Supplemental Plan Participant the
right to be continued in the employment of an Affiliated
Employer, or as a limitation of the right of an Affiliated
Employer to discharge any Supplemental Plan Participant, with or
without cause.
7.2. Assignment. Subject to the provisions of this
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Supplemental Plan relating to payment of benefits upon the death
of a Supplemental Plan Participant, the benefits payable under
this Supplemental Plan may not be assigned, alienated,
transferred, pledged, or encumbered.
7.3. Withholding, Etc. Benefits payable under this
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Supplemental Plan shall be subject to all applicable federal,
state or other tax withholding requirements. To the extent any
amount credited hereunder to a Supplemental Plan Participant's
account is treated as "wages" for FICA/Medicare or FUTA tax
purposes on a current basis (or when vested), rather than when
distributed, all as determined by the Committee, then the
Committee shall require that the Supplemental Plan Participant
either (i) timely pay such taxes in cash by separate check to his
or her Affiliated Employer, or (ii) make other arrangements
satisfactory to such Employer (e.g., additional withholding from
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other wage payments) for the payment of such taxes. To the
extent a Supplemental Plan Participant fails to pay or provide
for such taxes as required, the Committee may suspend the
Supplemental Plan Participant's participation in the Supplemental
Plan or reduce amounts credited or to be credited hereunder.
7.4. Schedules. The Committee may by Schedule modify the
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benefits available hereunder to one or more specified
individuals. The provisions of each such Schedule shall, with
respect to the individual or individuals thereby affected, be
deemed a part of the Supplemental Plan and shall be incorporated
herein.
7.5. Law Applicable. This Supplemental Plan shall be
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construed in accordance with the laws of the Commonwealth of
Massachusetts.
IN WITNESS WHEREOF, this instrument is executed this
20th day of December, 1994.
CABOT CORPORATION
By /s/ Karen M. Morrissey
________________________
Vice President
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