SUPPLEMENTAL RETIREMENT AGREEMENT
THIS AGREEMENT dated as of ,
("Agreement"), by and between of
, ("Employee") and CK Witco Corporation, a
Delaware corporation ("Corporation").
WITNESSETH:
WHEREAS, the Corporation and the Employee are parties to a
Supplemental Retirement Agreement dated as of ,
; and
WHEREAS, the Corporation and the Employee wish to amend and
restate in its entirety the aforementioned Supplemental Retirement
Agreement;
NOW, THEREFORE, the Employee and the Corporation hereby agree
that the Supplemental Retirement Agreement between the Employee and
the Corporation dated as of , shall be
amended and restated in its entirety to read as follows:
1. The Corporation has entered into this Agreement to
induce the Employee to continue in its employ, recognizing that in
the case of a limited number of key executive employees, including
the Employee, the ordinary retirement benefits provided under the
Corporation's retirement system do not afford sufficient incentive
in terms of economic security, when compared with retirement
arrangements available from other prospective employers who have
been, are, or may be competing for their services. Nothing herein
shall be deemed a contract of employment for any minimum fixed
term, or shall restrict the freedom of the Corporation or the
Employee to terminate the employment relationship between them at
any time.
2. All references herein to the Corporation shall be
deemed to include any subsidiary corporation as to which the
Corporation owns, directly or indirectly, one hundred percent of
the voting stock.
3. For the purposes of this Agreement, the following terms
shall have the following meanings:
(a) "Actuarial Equivalent" shall mean an amount or
benefit of equivalent value computed using the UP 1994 Mortality
Table and an interest rate equal to the average of the 10-year
Moody's Aaa Municipal Bond Yield Average for the fourth, fifth and
sixth full weeks immediately preceding the date on which payments
are to commence.
(b) "Cause" shall mean (i) the Employee's willful and
continued failure to substantially perform assigned duties with the
Corporation (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 (as defined in
subsection 3(f) hereof), after a demand for substantial performance
is delivered to the Employee by the Board of Directors of the
Corporation, specifically identifying the manner in which the Board
believes that the duties have not been substantially performed, or
(ii) the Employee's willful conduct which is demonstrably and
materially injurious to the Corporation. For purposes of this
subsection (b), 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.
(c) "Change in Control" shall mean a change in
control of the Corporation of a nature that would be required to be
reported in response to Item 1(a) of the Current Report on Form
8-K, as in effect on the date of this Agreement, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the
"Exchange Act"); provided that, without limitation, such a "Change
in Control" shall be deemed to have occurred if: (i) a third
person, including a "group" as such term is used in Section
13(d)(3) of the Exchange Act, other than the trustee of any
employee benefit plan of the Corporation, becomes the beneficial
owner, directly or indirectly, of 20% or more of the combined
voting power of the Corporation's outstanding voting securities
ordinarily having the right to vote for the election of directors
of the Corporation; (ii) during any period of 24 consecutive months
individuals who, at the beginning of such consecutive 24-month
period, constitute the Board of Directors of the Corporation (the
"Board" generally and, as of the date of this Agreement, the
"Incumbent Board") cease for any reason (other than retirement upon
reaching normal retirement age, disability, or death) to constitute
at least a majority of the Board; provided that any person becoming
a director subsequent to the date hereof whose election, or
nomination for election by the Corporation's shareholders, was
approved by a vote of at least three quarters of the directors
comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest
relating to the election of the Directors of the Corporation, as
such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the Incumbent
Board; or (iii) the Corporation shall cease to be a publicly owned
corporation having its outstanding Common Stock listed on the New
York Stock Exchange, the NASDAQ Stock Market or the American Stock
Exchange.
(d) "Company Plan Benefit" shall mean the amount of
benefit payable to or for the account of the Employee from the
Corporation's Individual Account Retirement Plan or any other
retirement plan sponsored by the Corporation which may hereafter be
adopted in lieu of or in addition to said Individual Account
Retirement Plan.
(e) "Compensation" shall mean all of the Employee's
cash compensation for a calendar year, including salary, any amount
contributed by the Employee to a cash or deferred plan under
Section 401(k) of the Internal Revenue Code of 1986, as amended
from time to time, and any incentive compensation award or bonus
with respect to such year (even if paid in a subsequent year), but
excluding any incentive compensation award or bonus paid during
such year with respect to a prior year and extraordinary earnings
such as insurance costs or gains on exercise of stock options.
(f) "Good Reason" shall mean (i) the assignment to
the Employee of any duties inconsistent in any respect with the
Employee's position (including status, offices, titles, and
reporting requirements), authority, duties, or responsibilities as
contemplated by any Employment Agreement between the Employee and
the Corporation, or any other action by the Corporation 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 promptly after receipt
of notice thereof given by the Employee; (ii) any failure by the
Corporation to comply with any of the provisions of any Employment
Agreement between the Employee and the Corporation, other than an
insubstantial and inadvertent failure which is remedied by the
Corporation promptly after receipt of notice thereof given by the
Employee; (iii) any change not concurred in by the Employee in the
location of the office at which the Employee is principally based,
except for travel reasonably required in the performance of the
Employee's responsibilities and substantially consistent with prior
business travel obligations of the Employee; or (iv) any purported
termination by the Corporation of the Employee's employment
otherwise than as permitted by any Employment Agreement between the
Employee and the Corporation.
(g) "Normal Retirement Date" shall mean the first day
of the first full month commencing on or after the Employee's
sixty-second (62nd) birthday.
(h) "Projected Compensation" shall mean (i) for any
calendar year throughout which the Employee is employed by the
Corporation, his Compensation (as defined in subsection 3(e)
hereof) for such year, and (ii) for any calendar year during or
after which his employment has been terminated, the compensation
the Employee would have received for such year if he had received
(A) salary at a rate determined by projecting his annual rate of
salary at the end of the last full calendar year of his employment
forward at an annual rate of increase equal to 5% in excess of the
annual percentage change in the Consumer Price Index as published
by the U.S. Bureau of Labor Statistics for the last full year of
his employment and (B) a bonus each year equal to fifty percent
(50%) of his salary as thus projected.
4. If, prior to his Normal Retirement Date, the Employee
shall voluntarily terminate his employment with the Corporation
without Good Reason or his employment shall be terminated by the
Corporation for Cause, he shall thereby forfeit all rights and
benefits under this Agreement. If the employment of the Employee
shall be terminated on or after his Normal Retirement Date, the
Employee shall voluntarily terminate his employment for Good Reason
or the employment of the Employee shall be terminated by the
Corporation without Cause, this Agreement shall continue in full
force and effect, and the Employee shall become entitled to the
rights and benefits hereinafter set forth upon the occurrence of
the events respectively giving rise thereto.
5. If the Employee shall remain in the employ of the
Corporation until and shall reach his Normal Retirement Date, he
shall be entitled to receive a supplemental retirement benefit
under this Agreement which shall be at an annual rate equal to
fifty percent (50%) of the Employee's average annual Compensation
during those five (5) calendar years in which such Compensation was
highest during the ten (10) calendar years immediately preceding
his actual retirement date. Such supplemental retirement benefit
shall commence on the Employee's actual retirement date and shall
be payable in one of the benefit payment forms described in
subsection 9(a), as the Employee shall elect.
6. If the Employee's employment by the Corporation shall
be terminated (other than by reason of his death or disability or
following a Change in Control as described in section 7 of this
Agreement) prior to his Normal Retirement Date under circumstances
not resulting in his forfeiture of benefits and rights under
section 4 of this Agreement, he shall be entitled to receive a
reduced supplemental retirement benefit under this Agreement which
shall be at an annual rate computed as follows:
(a) There shall first be determined the amount which
is equal to fifty percent (50%) of the Employee's average annual
Compensation during those five (5) calendar years in which such
Compensation was highest during the ten (10) calendar years
immediately preceding the year in which the termination of his
employment occurs.
(b) The amount thus determined shall be multiplied by
a fraction in which the numerator shall be the number of full years
of continuous service the Employee shall have completed with the
Corporation prior to the termination of his employment and the
denominator shall be the number of full years of continuous service
he would have completed had he remained in the continuous service
of the Corporation until his Normal Retirement Date.
Such reduced supplemental retirement benefit shall commence on the
first day of the month following the Employee's termination of
employment and shall be payable in one of the benefit payment forms
described in subsection 9(a), as the Employee shall elect.
7. Anything in sections 4 or 6 of this Agreement to the
contrary notwithstanding, if, prior to his Normal Retirement Date
but after a Change in Control of the Corporation shall have
occurred, the Corporation shall terminate the Employee's employment
other than for Cause, disability, or death or the employment of the
Employee shall be terminated voluntarily by the Employee for Good
Reason, he shall be entitled to receive one of the following
supplemental retirement benefits:
(a) If the Employee has not attained the age of 55 on
the date his termination of employment occurs, a supplemental
retirement benefit which shall be at an annual rate equal to the
amount by which fifty percent (50%) of the Employee's average
annual Projected Compensation during those five (5) calendar years
in which such Projected Compensation is highest during the ten (10)
calendar years immediately preceding the year in which he would
have attained age 55. Such supplemental retirement benefit shall
commence on the first day of the month following the month in which
the Employee attains age 62 and shall be payable in one of the
benefit payment forms described in subsection 9(a), as the Employee
shall elect.
(b) If the employee has attained age 55 on the date
his termination of employment occurs, a supplemental retirement
benefit which shall be at an annual rate equal to fifty percent
(50%) of the Employee's average annual Compensation during those
five (5) calendar years in which such Compensation was highest
during the ten (10) calendar years immediately preceding the year
in which the termination of his employment occurs. Such
supplemental retirement benefit shall commence on the first day of
the month following the month in which the Employee attains age 62
and shall be payable in one of the benefit payment forms described
in subsection 9(a), as the Employee shall elect.
(c) At the election of the Employee, a lump sum
payment in an amount which shall be the single sum Actuarial
Equivalent value as of the date of termination of the Employee's
employment by the Corporation of the benefit to which the Employee
would have been entitled under subsections 7(a) or 7(b) of this
Agreement. Such supplemental retirement benefit shall be paid to
the Employee not later than fifteen (15) days following the date of
termination of the Employee's employment by the Corporation.
8. If in the opinion of the Corporation the Employee
becomes totally and permanently disabled at any time while in the
employment of the Corporation, he shall become entitled to a
disability benefit which shall be at an annual rate equal to the
amount by which
(a) seventy-five percent (75%) of the Employee's
average annual Compensation during those five (5) calendar years in
which such Compensation was highest during the ten (10) calendar
years preceding the year in which his disability occurs
exceeds
(b) the annual benefit which the Employee would be
entitled to receive under the Corporation's long term disability
insurance program if he was then eligible for benefits thereunder
(regardless of whether he participates in said program);
provided, however, that if the Employee is not entitled to receive
any benefit under said program, the disability benefit to which he
is entitled hereunder shall be in an amount equal to forty percent
(40%) of the Employee's average annual Compensation determined as
provided in subsection 8(a) above, and provided further that the
disability benefit to which the Employee is entitled hereunder
shall in no event be less than five percent (5%) of his average
annual Compensation determined as provided in subsection 8(a)
above. Such disability benefit shall be payable in equal monthly
installments, the first payment to be made on the first day of the
month following that in which the Employee's salary is terminated
because of such disability, and payments shall be made on the first
day of each month thereafter so long as such total disability
subsists and the Employee lives; provided, however, if the Employee
lives until his Normal Retirement Date, he may thereupon elect to
receive, in lieu of the disability benefit he had been receiving
under this section 8, the supplemental retirement benefit to which
he would then be entitled under section 6 if his employment by the
Corporation had terminated other than by reason of disability on
the date his disability occurred.
9. (a) The normal form in which the benefit payable
under sections 5, 6, 7(a) or 7(b) of this Agreement shall be paid
shall be a monthly benefit payable for life and without refund. In
lieu of such normal benefit payment form, the Employee may elect to
receive his benefit hereunder in the form of a monthly benefit
payable for life with a period certain of up to 180 months, in the
form of a monthly benefit payable for a period certain, or in the
form of a monthly benefit payable for life with continuation of
such payments (or a specified percentage thereof) to such
beneficiary as the Employee may designate for the life of such
beneficiary ("Joint and Survivor Annuity"). The amount of benefit
payable under each such alternative benefit payment form shall be
the Actuarial Equivalent of the benefit payable in the normal form
to which the Employee would otherwise be entitled hereunder. Any
election of an alternative benefit payment form shall be made in
writing and may be changed or rescinded by the Employee at any time
prior to the date on which benefit payments are to commence. The
Employee shall have the right to designate in writing the
beneficiary or beneficiaries to receive the benefit, if any, which
is payable under any benefit payment form after the Employee's
death and may change his designation of beneficiary from time to
time, at any time prior to the date on which benefit payments are
to commence. If there shall be no beneficiary designated and
surviving at the Employee's death, the estate of the Employee shall
be the beneficiary. Whenever any benefits hereunder become payable
to the beneficiary of the Employee, the Corporation may, in its
discretion, authorize payment of such benefits to the beneficiary
in a single lump sum which is the Actuarial Equivalent of such
benefits.
(b) Anything in this subsection 9(a) to the contrary
notwithstanding, at any time after the date on which benefit
payments commence, the Employee may elect to receive his benefits
hereunder in a single lump sum in an amount which is equal to 90%
of the Actuarial Equivalent of the benefit payable in the normal
form to which the Employee is otherwise entitled hereunder on the
date as of which such election is made.
10. (a) If the Employee shall die while currently
receiving a benefit under the provisions of sections 5, 6, 7(a) or
7(b) of this Agreement and the Employee shall have elected a
benefit payment form other than a monthly benefit payable for life
with no period certain, any benefits payable after his death shall
be paid to his beneficiary in accordance with the provisions of the
benefit payment form elected by the Employee. If the Employee
shall die after having reached his Normal Retirement Date but prior
to his actual retirement date and the Employee shall have elected
a benefit payment form other than a monthly benefit payable for
life with no period certain, benefits shall be paid to his
beneficiary as if the Employee had commenced to receive benefits
hereunder on the first day of the month in which his death
occurred. If the Employee shall die while in the active employ of
the Corporation but prior to his Normal Retirement Date, or if the
Employee shall die after having become entitled to receive a
disability benefit under section 8 but prior to his Normal
Retirement Date, a death benefit shall be paid to the Employee's
beneficiary, in lieu of any other benefit under this Agreement,
which shall be at an annual rate equal to fifty percent (50%) of
the Employee's average annual Compensation during those five (5)
calendar years in which such Compensation was highest during the
ten (10) calendar years immediately preceding the year in which his
death occurs or the year in which his disability occurred, as the
case may be. Such death benefit, which shall be in addition to any
Company Plan Benefit or benefits under any group life insurance
plan sponsored by the Corporation which is payable on account of
the Employee's death, shall be payable in equal monthly
installments beginning on the first day of the month following that
in which the death of the Employee occurs and continuing thereafter
for a period certain of 120 months; provided that the Beneficiary
entitled thereto may elect to have such benefit paid in any of the
forms described in section 9, except a Joint and Survivor Annuity,
in an amount which is the Actuarial Equivalent of the form of
benefit otherwise payable under this section 10.
(b) If the Employee shall die after having become
entitled to a benefit under subsections 7(a) or 7(b) hereof but
prior to attaining age 62, a death benefit shall be paid to the
Employee's beneficiary, in lieu of any other benefit under this
Agreement, which shall be the single sum Actuarial Equivalent value
as of the Employee's death of the benefit to which he would have
been entitled had he survived to age 62. Such death benefit shall
be payable in a lump sum as soon as practicable after the
Employee's death; provided that the beneficiary entitled thereto
may elect to have such death benefit paid in any of the forms
described in section 9 except a Joint and Survivor Annuity.
11. Anything in this Agreement to the contrary
notwithstanding, if at any time following termination of his
employment with the Corporation the Employee shall directly or
indirectly compete with the Corporation (which shall be deemed to
include any subsidiary or affiliate of the Corporation), whether as
an individual proprietor or entrepreneur or as an officer,
employee, partner, stockholder, or in any capacity connected with
any enterprise, in any business in which the Corporation is engaged
at the time of the termination of the Employee's employment within
any state or possession of the United States of America or any
foreign country within which business is then specifically planned
by the Corporation to be conducted, the Corporation may suspend the
payment of any benefits hereunder to the Employee until such
competition shall have ceased, and in the event such competition by
the Employee shall not have ceased to the satisfaction of the
Corporation within 90 days after the Corporation shall have given
written notice to the Employee to cease the conduct thereof, the
Corporation may at any time thereafter terminate its obligations
under this Agreement. For the purpose of the preceding sentence,
conducting business, doing business, or engaging in business shall
be deemed to embrace sales to customers or performance of services
for customers who are within a relevant geographical area, without
any necessity of any presence of the Corporation therein. Nothing
herein, however, shall prohibit the Employee from acquiring or
holding any issue of stock or securities of any company which has
any securities listed on a national exchange or quoted in the daily
listing of over-the-counter market securities, provided that at any
one time he and members of his immediate family do not own more
than five percent (5%) of the voting securities of any such
company.
12. This Agreement is an unfunded plan maintained for the
purpose of providing deferred compensation for one of a select
group of management or highly compensated employees for purposes of
Title I of the Employee Retirement Income Security Act of 1974.
The Corporation will make all benefit payments hereunder solely on
a current disbursement basis out of the general assets of the
Corporation, including without limitation from assets held in any
grantor trust established by the Corporation for the purpose of
making some or all of such payments.
13. This Agreement shall bind and run to the benefit of
the successors and assigns of the Corporation, including any
corporation or other form of business organization with which it
may merge or consolidate or to which it may transfer substantially
all of its assets.
14. The rights of the Employee under this Agreement shall
not be assigned, hypothecated, or otherwise transferred in any
manner.
15. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the Employee has hereunto signed his name
and CK Witco Corporation has caused this instrument to be executed
in its name and on its behalf by its duly authorized officer, as of
the day of , .
Employee
CK WITCO CORPORATION
By:
Its: