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                                                                    Exhibit 10.2


CABOT CORPORATION
SHORT-TERM INCENTIVE COMPENSATION PLAN

The purpose of this Short-Term Incentive Compensation Plan (this "Plan") is to
provide incentives for certain senior executives of Cabot Corporation (the
"Company") to achieve a sustained, high level of financial success for the
Company. This Plan does that by placing a portion of the senior executives'
annual compensation at risk based on Company and individual performance. This
Plan is intended to comply with the requirements for tax deductibility imposed
by Internal Revenue Code Section 162(m) as in effect from time to time ("Section
162(m)") with respect to Awards paid pursuant to this Plan.

ADMINISTRATION

This Plan will be administered by the Compensation Committee of the Board of
Directors or, if any member of the Compensation Committee is not an "outside
director" for the purposes of Section 162(m), by a subcommittee of the
Compensation Committee consisting of those members of the Compensation Committee
who are "outside directors" for such purposes. The Compensation Committee or
subcommittee administering this Plan is referred to herein as the "Committee."
The Committee may delegate to management administrative functions that do not
involve discretion. The Committee shall have the authority to interpret this
Plan, and any interpretation or decision by the Committee with regard to any
questions arising under this Plan shall be final and conclusive on all
participants in this Plan.

ELIGIBILITY; PARTICIPANTS

Only officers of the Company shall be eligible to participate in this Plan for
any fiscal year of the Company (an "Award Year"). Not later than 90 days after
the beginning of each Award Year, the Committee shall (a) select, from among
those eligible, the persons who shall participate in this Plan (the
"Participants") for the Award Year, and (b) designate for each Participant a
specific percentage of the Award Pool as the Participant's potential award (the
"Potential Award"). No Participant shall have a Potential Award exceeding 50% of
the Award Pool, and the sum of the Potential Awards specified by the Committee
for an Award Year shall not exceed 100% of the Award Pool.

FORMULA

The amount available for Awards under this Plan for each Award Year (the "Award
Pool") will be 10% of the amount, if any, by which the Company's Adjusted Net
Income for the Award Year exceeds 10% of Average Stockholders' Equity. Adjusted
Net Income for an Award Year shall be the consolidated net income of the Company
as reported to shareholders in the Company's Annual Report, excluding from the
calculation of net income all of the following items to the extent they appear
as separate line items in the

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Company's audited consolidated statement of income appearing in the Annual
Report: extraordinary or non-recurring items, changes in tax laws, items
relating to discontinued operations, items relating to divested businesses or
sales of businesses, restructuring charges, effects of accounting changes and
any other special, unusual or non-recurring gain or loss; provided, however,
that the Committee may in its discretion include any such item that causes the
Award Pool to be reduced. Where any such item to be excluded is stated in the
Company's consolidated statement of income as a pre-tax amount, the amount to be
excluded shall be adjusted to an after-tax amount using an assumed tax rate (to
cover all federal, state and foreign income taxes) equal to the maximum marginal
federal income tax rate in effect for US corporations during the Award Year,
plus 2%. Average Stockholders' Equity shall be the average of (a) the total
stockholders' equity at the end of the Award Year and (b) the total
stockholders' equity at the end of the preceding fiscal year (i.e., at the
beginning of the Award Year), in each case as reported in the Company's Annual
Report.

PAYMENTS

When the Company's financial results for the Award Year have been determined,
the Committee will evaluate the Company's financial results, determine the
dollar amounts of the Award Pool and of the Potential Award and the actual
Award, if any, for each Participant, and shall certify its determinations in
writing (the "Certification").

In determining the actual Award to be paid to each Participant, the Committee
may exercise discretion to reduce (but not increase) the Award from the amount
of the Participant's Potential Award, after taking into account the Company's
financial performance, performance of the Participant, and competitive
compensation levels. It is expected that the Committee will use its discretion
carefully and apply good and rigorous judgment in appraising the performance of
the Company and the contributions of each Participant to the Company's
performance.

A reduction in the Award paid to a Participant shall not be available to
increase the Award of any other Participant. If the total of the Awards as
finally determined for any Award Year is less than the Award Pool, the unused
portion of the Award Pool will not be carried over to the next Award Year or be
added to any future Award Pool.

Awards will be paid in cash as soon as practical after the Certification or may,
at the election of the Participant and under procedures adopted by the Committee
or any deferred compensation plans from time to time in effect and in accordance
with the regulations promulgated under Section 162(m), be deferred.

TAX WITHHOLDING

The Company will deduct any required withholding taxes from the payments under
this Plan.


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TERMINATION OF EMPLOYMENT

Any Participant who is not an employee of the Company on September 30 of an
Award Year will not receive any Award for that Award Year, except that if a
Participant's employment terminates due to death or disability the Committee may
at its discretion authorize payment of an Award to such Participant (or his or
her estate) at the time other Awards are paid in respect of that Award Year.

NO RIGHT TO AWARDS OR CONTINUED EMPLOYMENT

No person shall have any claim or right to be granted an Award, nor shall the
selection for participation in the Plan for any Award Year be construed as
giving a Participant the right to be retained in the employ of the Company for
that Award Year or for any other period.

INTERPRETATION AND AMENDMENTS

This Plan is designed to comply with Section 162(m), and all provisions in this
Plan shall be construed in a manner consistent with that intent. The Company's
Board of Directors may amend or terminate this Plan at any time, but no
amendment shall expand the class of eligible employees or increase either the
funding formula for determining the Award Pool or the maximum Award to an
individual Participant without the approval of the Company's shareholders.
Subject to the foregoing restrictions, this Plan may be amended to add
conditions or provisions required, or to remove conditions or provisions no
longer required or permitted, by Section 162(m).

Nothing in this Plan shall be deemed in any way to limit or restrict the Company
from making any award to any person (including a Participant in this Plan) under
any other plan, arrangement or understanding, whether now existing or hereafter
arising, or on an ad hoc basis, except as follows. No award to any Participant
in this Plan shall be made under any other plan, arrangement or understanding,
or on an ad hoc basis, where the amount of such other award is designed to
compensate the Participant if, and to the extent that, as a result of the
Company's performance, his or her Potential Award or actual Award under this
Plan does not reach a particular level.

PLAN TERM

This Plan shall be effective as of the date adopted, for the Award Year ending
September 30, 1999, subject to receiving shareholder approval at the 1999 Annual
Shareholders Meeting, and shall remain in effect for subsequent Award Years
until terminated by the Company's Board of Directors.