2000-2002 Long Term Performance Award Agreement
This Agreement, dated as of February 24, 2000, (the
"Agreement") is made by and between CK Witco Corporation (the
"Corporation") and Name (the "Executive") of Town.
WHEREAS, the Corporation has adopted the 1998 Long Term
Incentive Plan (the "Plan") for the purpose of attracting,
motivating and retaining key employees by offering them long term
performance-based incentives and an opportunity to acquire
ownership of shares of the Corporation's common stock.
NOW, THEREFORE, the Executive, a key employee of the
Corporation, is granted the opportunity to earn shares of common
stock of the Corporation in accordance with the terms and
conditions of the Plan and this Agreement.
1. The Executive is granted the opportunity to earn a
maximum of Maximum shares of the common stock of the Corporation
(the actual number of shares earned by the Executive, if any,
hereinafter being called the "Award") during the Performance
Period.
2. Definitions
For purposes of this Agreement, the following terms shall have
the following meanings:
(a) "Performance Period" shall mean the period January
1, 2000, to December 31, 2002.
(b) "Retirement" shall mean cessation of the Executive's
employment with the Corporation or a subsidiary of the
Corporation occurring on or after the Executive's sixty-second
(62nd) birthday.
(c) "Cause" shall mean (i) the Executive's willful and
continued failure to substantially perform assigned duties with
the Corporation or its subsidiary corporations (other than any
such failure resulting from incapacity due to physical or mental
illness or any such actual or anticipated failure resulting from
termination for Good Reason), after a demand for substantial
performance is delivered to the Executive by the Board of
Directors of the Corporation by which the Executive is employed
(the "Board"), specifically identifying the manner in which the
Board believes that the duties have not been substantially
performed, or (ii) the Executive's willful conduct which is
demonstrably and materially injurious to the Corporation or any
subsidiary corporation by which the Executive is employed. For
purposes of this subsection 2(c), no act, or failure to act,
shall be considered "willful" unless done, or omitted to be done,
not in good faith and without reasonable belief that such action
or omission was in the best interest of the Corporation and the
subsidiary corporation, if any, by which the Executive is
employed.
(d) "Good Reason" shall mean (i) the assignment to the
Executive of any duties inconsistent in any respect with the
Executive's position (including status, offices, titles, and
reporting requirements), authority, duties or responsibilities as
contemplated by any employment agreement between the Executive
and the Corporation or a subsidiary of the Corporation, or any
other action by the Corporation or the subsidiary corporation, if
any, by which the Executive is employed which results in a
diminishment in such position, authority, duties, or
responsibilities, other than an insubstantial and inadvertent
action which is remedied by the Corporation or such subsidiary
corporation promptly after receipt of notice thereof given by the
Executive; (ii) any failure by the Corporation or the subsidiary
corporation, if any, by which the Executive is employed to comply
with any of the provisions of any employment agreement between
the Executive and the Corporation or such subsidiary corporation,
other than an insubstantial and inadvertent failure which is
remedied by the Corporation or such subsidiary corporation
promptly after receipt of notice thereof given by the Executive;
(iii) any change not concurred in by the Executive in the
location of the office at which the Executive is principally
based on the date hereof, except for travel reasonably required
in the performance of the Executive's responsibilities and
substantially consistent with prior business travel obligations
of the Executive; or (iv) any purported termination by the
Corporation or the subsidiary corporation, if any, by which the
Executive is employed of the Executive's employment otherwise
than as permitted by any employment agreement between the
Executive and the Corporation or such subsidiary corporation.
(e) "Change in Control" shall have the meaning set forth
in Section 10 of the Crompton & Knowles Corporation 1998 Long
Term Incentive Plan (the "Plan").
(f) "Fair Market Value" shall have the meaning set forth
in Section 2 (j) of the Plan
3. Performance Objectives
There shall be two Performance Objectives used to determine the
amount of the Award, if any, earned by the Executive, as follows:
(a) Return on Equity Objective
This objective, which must be achieved in order for
the Executive to earn an Award, shall be the achievement by the
Corporation of a return on equity for the fiscal year ending
December 31, 2002, of not less than seventeen and a half percent
(17.5%).
(b) Earnings Per Share ("EPS") Objective
This objective shall be the achievement by the
Corporation of cumulative earnings per share for the Performance
Period of not less than $4.32 per common share.
The following table shows the Award associated with
cumulative earnings per share for the Performance Period at three
different levels:
Threshold Award Target Award Maximum Award
Cumulative $4.32 $4.49 $4.65
EPS
Award Earned Threshold Target Maximum
The actual Award, if any, earned by the Executive shall be based
upon the actual cumulative earnings per share achieved by the
Corporation during the Performance Period, and except in the
event that cumulative earnings per share for the Performance
Period are equal to the amounts shown in the above table, shall
be determined by interpolation from the values shown in the
table.
4. Termination of Employment During Performance Period
(a) If the Executive's employment with the Corporation or
a subsidiary of the Corporation terminates during the Performance
Period because of death, disability or Retirement, the Executive
Compensation Committee of the CK Witco Board (the "Committee")
may, in its sole discretion, make a pro rata Award to the
Executive.
(b) If, following a Change in Control occurring after
the date of this Agreement, the Executive's employment with the
Corporation or a subsidiary of the Corporation is terminated
during the Performance Period by the Executive for Good Reason or
by the Corporation by which the Executive is employed other than
for Cause, the Executive shall become immediately vested in, and
shall be promptly paid a pro rata Award which Award shall be
determined on the basis of the cumulative earnings per share
achieved by the Corporation during the Performance Period through
the date of such termination of the Executive's employment and a
proration (based on the number of days in the Performance Period
which have elapsed on the date of such termination of the
Executive's employment) of the cumulative earnings per share
objectives specified in section 3 hereof. In no case shall the
Award be less than the Target Award. The Executive shall be
entitled to an Award pursuant to this subsection (b) without
regard to whether or not the Corporation has achieved the return
on equity objective specified in section 3 hereof.
(c) In the event that the Executive's employment with
the Corporation terminates during the Performance Period for any
reason other than as specified in subsections 4(a) and 4(b)
hereof, the Executive shall not be entitled to receive any Award
for the Performance Period.
5. Voting of Shares
After the date of any Award to the Executive
hereunder, and prior to the transfer to the Executive of all of
the shares of the Corporation comprising the Award, the Executive
shall have the right to instruct the trustee of the CK Witco
Corporation Long Term Incentive Plan Trust (the "Trustee") as to
the voting of such number of shares of the Corporation comprising
the Award as are held by the Trustee, together with any other
shares held by the Trustee in any account which may be
established by the Trustee on or after the date of the Award in
the name of the Executive.
6. Vesting and Payment of Award
Any Award made to the Executive hereunder shall vest in
the Executive and the Executive shall be entitled to receive the
Award only as follows:
33.3% on January 1, 2003
33.3% on January 1, 2004
33.3% on January 1, 2005
Notwithstanding any other provision of this Section 6, upon
the termination of the Executive's employment with the
Corporation on or after December 31, 2002, due to death,
disability, Retirement or for any reason following a Change in
Control occurring after December 31, 2002, any Award theretofore
earned by the Executive hereunder shall immediately become fully
vested in him, and be payable in shares, or the cash equivalent
of the Fair Market Value of the shares constituting the Award on
the date so vested. Termination of the Executive's employment
with the Corporation on or after December 31, 2002, for any
reason other than those specified in the preceding sentence shall
cause the forfeiture of any portion of an Award not vested prior
to the date of such termination of employment.
7. Certain Further Payments by the Company.
In the event that any amount paid or distributed to the
Executive pursuant to this Agreement (taken together with any
amounts otherwise paid or distributed to the Executive in
connection with a change of control referred to in Section
280G(b)(i)) is subject to an excise tax under Section 4999 of the
Code or any successor or similar provision thereto (the "Excise
Tax"), the Corporation shall pay to the Executive an additional
amount such that, after taking into account all taxes (including
federal, state, local and foreign income, excise and other taxes)
incurred by the Executive on the receipt of such additional
amount, the Executive is left with the same after-tax amount the
Executive would have been left with had no Excise Tax been
imposed.
8. At Will Employment
This Agreement does not alter the "at will" nature of the
Executive's employment, which employment may be terminated at any
time by the Executive or the Corporation by which the Executive
is employed.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first above written.
CK WITCO CORPORATION
By:
Its:
Name