Exhibit 10.1
THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN
PERFORMANCE SHARE AWARD
THIS PERFORMANCE SHARE AWARD, dated this ______ day of ______________,
2_____, (the "Grant Date") by The Lubrizol Corporation (the "Company") to
_____________________________, an employee of the Company and/or a Subsidiary
(as defined in the Plan).
The following terms and provisions apply to this Performance Share Award:
1. The Company hereby grants to you, under the provisions of Section 9 of the
Company's 2005 Stock Incentive Plan, as amended (the "Plan"), the number of
Company Common Shares, without par value, in accordance with the three-year
performance target chart(s) as shown in Exhibit A attached to this Award. The
Company Common Shares granted hereunder are referred to herein as the "Shares".
2. If there is a Change of Control, as defined under the Plan, prior to the
receipt of Shares under Section 1, above, you will receive a pro-rata number of
Shares upon the Change of Control. The pro-rata number of Shares will be
determined as shown on Exhibit B attached to this Award.
3. If you separate from service due to retirement (either normal or early
retirement) prior to the receipt of Shares pursuant to Section 1, above, you
will receive a pro-rata number of Shares upon the end of the three-year cycle
based on the number of full months which have elapsed since the date of this
Award at the time or your separation from service or death. In no event will the
payment of Shares be made earlier than six months after your retirement.
If you separate from service due to death prior to the receipt of Shares
pursuant to Section 1, above, your beneficiary will receive a pro-rata number of
Shares upon the end of the three-year cycle based on the number of full months
which have elapsed since the date of this Award at the time or your service or
death. You may at any time specify in writing a beneficiary to receive the
Shares if you die before the receipt of Shares under this Award. If the Company
does not have a beneficiary election on file at the time of your death, the
Shares will be issued to your spouse, or if your spouse is not living at the
time of issuance, your children who are living, or if you have no living
children at the time of issuance, your estate.
If you separate from service (voluntarily or involuntarily) for any other
reason prior to the receipt of Shares pursuant to Section 1, above, you will
forfeit any Shares under this Award.
4. The Award is not transferable by you during your life.
5. Prior to the issuance of Shares to you, you will not be a shareholder of the
Company and you will have no rights under the Award as a shareholder of the
Company. No dividends or other amount will be allocated or paid to you with
respect to the Award.
6. If there is a stock split, reverse stock split or stock dividend, the number
of Shares specified in Section 1, above will be increased or decreased in direct
proportion to the increase or decrease in the number of Company Shares by reason
of the stock split, reverse stock split or stock dividend.
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7. Shares will not be distributed under this Award if the issuance of the Shares
would violate:
(a) any applicable state securities law;
(b) any applicable registration or other requirements under the Securities
Act of 1933, as amended (the "Securities Act"), the Securities
Exchange Act of 1934, as amended, or the listing requirements of any
stock exchange on which the Company's Shares are listed; or
(c) any similar legal requirement of any governmental authority regulating
the issuance of shares by the Company.
Further, if a Registration Statement with respect to the Shares to be issued is
not in effect or if counsel for the Company deems it necessary or desirable in
order to avoid possible violation of the Securities Act, the Company may
require, as a condition to its issuance and delivery of certificates for the
Shares, that you deliver to the Company a statement in writing that you
understand the Shares may be "restricted securities" as defined in Rule 144 of
the Securities and Exchange Commission and that any resale, transfer or other
disposition of the Shares will be accomplished only in compliance with Rule 144,
the Securities Act, or other or subsequent applicable Rules and Regulations
thereunder. Further still, the Company may place on the certificates evidencing
the Shares an appropriate legend under Rule 144.
8. (a) When the Common Shares are distributable to you pursuant to Section 1,
above, you may be subject to income and other taxes on the value of the
Shares on the date of distribution. The Company will withhold a sufficient
number of Shares that will provide for the federal, state and/or local
income tax at the rates then applicable for supplemental wages, unless
otherwise requested by you, but in no event less than the statutory
minimums for tax withholding.
(b) For purposes of determining the number of Common Shares that are to be
withheld to provide for the tax withholding pursuant to Section 8(a),
Common Shares will be valued at the average of the high and low trading
prices on the New York Stock Exchange on the date Shares are distributable
to you. If the determination of the tax withholding requires the
withholding of a fractional Share, the Company shall withhold the nearest
whole number of Shares needed to pay the tax withholding, rounded up, and
remit to you in cash the amount of the excess after the withholding taxes
have been satisfied.
9. Prior to the distribution of Shares pursuant to Section 1, the Committee has
the right in its sole discretion to reduce the amount of this Award.
10. The Committee has conclusive authority, subject to the express provisions of
the Plan, as in effect from time to time, and this Award, to interpret this
Award and the Plan, and to establish, amend and rescind rules and regulations
for the administration of the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Award in the manner
and to the extent it deems expedient to carry the Plan into effect, and it is
the sole and final judge of such expediency. The Board of Directors of the
Company may from time to time grant to the Committee such further powers and
authority as the Board determines to be necessary or desirable.
11. You must hold any Shares that are distributed to you under this Award at
least until you have met your Share ownership guideline.
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12. Notwithstanding any other provision of this Award, your Award will be
subject to all of the provisions of the Plan in force from time to time.
THE LUBRIZOL CORPORATION
By
-------------------------------------
James L. Hambrick
President and CEO
1205lmre
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Exhibit A
Performance Measure for the 2006-2008 Performance Period
Three-year EPS: _______________________
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EXHIBIT B
Determination of Pro-Rata Common Shares Upon a Change of Control Under Section 2
Pursuant to the terms of Section 2, the number of pro-rata Common Shares
upon a Change of Control will be determined as follows:
1. No payout if 12 months has not elapsed since the date of this Award.
2. If more than 12 months has elapsed since the date of this Award:
(a) Determine the measurement growth rate for each full year that has
elapsed in the 3-year period as of the date of the Change of Control,
(b) The 3-year cumulative measurement growth will be imputed as either the
1-year measurement growth (if the Change of Controls occurs during the
second year) or the 2-year cumulative measurement growth (if the Change of
Control occurs during the third year).
(c) Payout is then pro-rated based on number of full months that have
elapsed since the date of this Award.
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