EXHIBIT 10.2
CROMPTON CORPORATION
BENEFIT EQUALIZATION PLAN
1. Purpose of the Plan. The purpose of the Plan is to
provide eligible employees of Crompton Corporation
and its subsidiaries with deferred compensation and
benefits substantially equivalent to those they would
have received under Qualified Plans of the Company in
which they participate, in the absence of certain
limitations on contributions and benefits which are
imposed by the Code on such Qualified Plans.
2. Definitions. The following terms shall have the following
meanings for purposes of the Plan:
(a) "Account" means an account described in Section 4 or 5
hereof.
(b) "Change of Control" means a change of control of the
Company 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 hereof, pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 (the "Exchange Act");
provided that, without limitation, such a "Change of 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 Company, becomes the beneficial owner,
directly or indirectly, of 20% or more of the combined voting
power of the Company's outstanding voting securities ordinarily
having the right to vote for the election of directors of the
Company; (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 Company (the "Board" generally and as of the date hereof
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 Company's shareholders, was approved by
a vote of at least three-quarters of the directors who
at the time of such election or nomination for election
comprise 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 Company, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall,
for purposes of this Agreement, be considered a member of the
Incumbent Board; (iii) the Company shall consolidate or merge
with or into another person (including any such transaction in
which the Company is the surviving entity); or (iv) the Company
shall cease to be a publicly owned corporation having its
outstanding Common Stock listed on the New York Stock Exchange
or quoted in the NASDAQ National Market System.
(c) "Code" means the Internal Revenue Code of 1986 as
presently in effect and as it may be amended from time to time
hereafter.
(d) "Committee" means the Committee referred
to in Section 17 hereof.
(e) "Company" means Crompton Corporation, a corporation
organized under the laws of the State of Delaware,
any subsidiary thereof and any successor corporation.
(f) "Compensation" means a Participant's compensation or
salary as defined under each applicable Qualified Plan
pursuant to which benefits are determined under this
Plan.
(g) "ERISA" means the Employee Retirement Income Security
Act of 1974 as presently in effect and as it may be
amended from time to time hereafter.
(h) "Participant" means any employee of the Company who
becomes eligible to receive a benefit of any type from this
Plan or whose beneficiary may be eligible to receive
any such benefit.
(h) "Plan" means the Benefit Equalization Plan of the
Company as set forth herein and as it may be amended from
time to time.
(j) "Qualified Plan" means any employee benefit plan of the
Company which constitutes a qualified plan under
Section 401 of the code, including without
limitation the Company's Employee Savings Plan
("CESP") and its Employee Stock Ownership Plan (the
"ESOP").
(k) "Section 401 (k) Limitation" means the limit (as
adjusted from time to time) imposed by Section 402(g)
of the Code on elective deferrals pursuant to a qualified
cash or deferred arrangement under Section 401 (k)
of the code which may be excluded from the gross
income of an individual for any taxable year.
(l) "Section 415 Limitation" means the annual limit imposed
by Section 415 of the code on contributions and other
additions, which may be made with respect to a
Participant under Qualified Plans in which he
participates.
3. Eligible Employees. The persons listed on Attachment A
hereto and any other persons designated by the committee
referred to in Section 19 hereof.
4. Section 401(k) Account. If the Section 401(k)
Limitation shall apply at anytime during a taxable
year to elective deferrals of a Participant
which would otherwise have been contributed to a
Qualified Plan, the Company shall thereafter allocate
to an account maintained on its books (the Participant's
"Section 401(k) Account") amounts equal to
amounts which it would have contributed to the
Qualified Plan as voluntary participant
contributions on behalf of the Participant from
time to time during the remainder of such year
in the absence of the Section 401(k) Limitation.
The Participant may direct the Company to change
the rate of his contributions and may suspend or
resume his contributions in the manner and at
the times set forth in the Qualified Plan
pursuant to which such contributions would have
been made in the absence of the Section 401(k)
Limitation.
5. Section 415 Accounts. If the Section 415
Limitation shall apply at any time during a taxable
year to employee or employer contributions which
would otherwise have been made to a Qualified Plan
by or on behalf of a Participant, the Company shall
thereafter allocate to accounts maintained on
its books (the Participant's "Section 415
Accounts") amounts equal to the amounts which it
would have withheld from the Participant's
compensation for contributions to the Qualified
Plan and which it would have contributed to the
Qualified Plan as employer contributions on
behalf of the Participant from time to time
during the remainder of such year in the absence
of the Section 415 Limitation, assuming (in the
case of matching employer contributions under
the ESOP) that the Participant continues to make
contributions to this Plan during such period.
The Company shall maintain separate Section 415
Accounts with respect to each Qualified Plan
pursuant to which amounts are allocated for the
benefit of a Participant under this Section and
a separate Account for employee and employer
contributions made with respect to each such
Qualified Plan.
6. Contributions with Respect to Bonuses. Anything
in the CESP or the ESOP to the contrary
notwithstanding, beginning in 1988, all employee and
employer contributions which would otherwise be
contributed to the CESP or the ESOP with
respect to any bonus payable to a Participant
under any Company bonus plan in which he
participates shall be made to the Plan and shall
be allocated to his appropriate Section 415
Account under the Plan. Each Participant shall
be deemed to have waived any right he may have
to participate in the CESP and the ESOP to the
extent that employee and employer contributions
with respect to any bonus payable to him are
made to the Plan (rather than to the CESP or the
ESOP) pursuant to the provisions of this
Section.
7. Treatment under other Agreements. Anything in
this Plan to the contrary notwithstanding, all
compensation earned by a Participant which is
contributed to an Account under the Plan in lieu
of being paid to the Participant or to a Qualified
Plan on his behalf shall be treated as compensation
paid to the Participant for the payroll period or
(in the case of a bonus) for the year in which
earned for purposes of any Supplemental
Retirement Agreement between the Company and
such Participant, and all amounts payable to a
Participant from the Plan which are attributable
to employer contributions (including earnings
thereon) made to this Plan in lieu of to the
CESP shall be treated as if they were payable
from the CESP for purposes of any such
Supplemental Retirement Agreement.
8. Investment of Accounts. After consulting with
each Participant, the Company shall direct the
Trustee referred to in Section 15 hereof in
writing how such Participant's Accounts under
the Plan shall be invested among the investment
media from time to time offered by the Trustee
for investment of such Accounts under the Trust
Agreement. The benefits due to each Participant
under the Plan at any time and from time to time
shall be equal to the balance of such
Participant's Accounts under the Trust
Agreement.
9. Form and Time of Benefit Payments. Amounts held
in the Accounts maintained for a Participant under
the Plan will be distributed by the Company in the
same form and at the same time as elected by the
Participant (or his spouse or beneficiary, if
applicable) for payment of benefits from the
Qualified Plan with respect to which such
amounts are payable hereunder unless the
Participant shall have elected, in a manner and
on a form approved by the Committee, not less
than six months prior to the termination of the
Participant's employment for any reason, to
receive the value of such Accounts in either
five, ten, or fifteen annual installments.
Notwithstanding the foregoing, in the event a
Participant desires to withdraw amounts held in
the Accounts maintained for such Participant
under the Plan prior to the Participant's
termination of employment with the Company
(other than a hardship withdrawal described in
Section 10(a) of the Plan), the Participant
must: (i) be eligible for an in-service
distribution from the Qualified Plan (other than
a hardship withdrawal or a loan); and (ii) have
made a written election to receive an in-service
distribution under the Plan, in a manner and on
a form approved by the Committee, not less than
six months prior to the date of such in-service
distribution; provided, however, the Participant
may elect to immediately receive the amounts
held in his Accounts under the Plan in a single
lump sum equal to ninety percent (90%) of the
value of the Participant's Accounts under the
Plan. If a Participant shall elect to receive
the value of his Accounts in installments, the
first such installment shall be paid promptly
after the termination of the Participant's
employment and each succeeding installment shall
be paid on or before the last day in January of
each succeeding year until the total number of
installments elected by the Participant shall
have been paid. Each such installment shall be
in an amount determined by multiplying the balance
of the Participant's Accounts as of the last day
of the month preceding the date of payment thereof
a fraction, the numerator of which shall be one
and the denominator of which shall be the number
of installments remaining to be paid to the
Participant. Except as provided in Section 15
hereof, all amounts payable to or on behalf of a
Participant under the Plan shall be payable form
the general assets of the Participant's
employer.
10. Withdrawals. (a) For Hardship. A Participant
may apply to the committee for a withdrawal on
account of hardship of any part or all of the
vested portion of the funds allocated to his
Accounts under the Plan. The Committee shall
determine in its sole discretion whether a
hardship exists and, if so, the amount which may
withdrawn to meet such hardship. For purposes
of this Section, hardship shall be deemed to
have occurred only in the event the Participant
shall have incurred financial needs arising as a
result of any one or more of the reasons which
are permitted to be treated as "hardship" for
purposes of withdrawals from a Qualified Plan
meeting the requirements of Section 401 (k) of
the Code.
(b) After Termination of Employment. At any time
after termination of a Participant's employment
with the Company for any reason, the Participant (or,
in the event of his death, his beneficiary) may
elect to receive all benefits to which he is
entitled hereunder in a single lump sum in an
amount which is equal to 90% of the value of the
benefits to which the Participant or his
beneficiary is otherwise entitled hereunder on
the date as of which such election is made.
11. Termination of Employment. If the employment of
a Participant shall terminate for any reason,
any amount due such Participant under this Plan,
to the extent then vested as determined under
each Qualified Plan separately, shall be held
under the terms of this Plan and paid in
accordance with the provisions of Section 9 of
this Plan. If a participant is not fully vested
under the terms of a Qualified Plan upon
termination of his employment and thereby
forfeits his right to all or a percentage of his
benefits from such Qualified Plan, the
Participant shall also forfeit the same
percentage of any benefits under this Plan which
are attributable to the Qualified Plan under
which benefits are thus forfeited.
12. Beneficiary Designation. Each participant shall
be entitled to designate in writing a
beneficiary or beneficiaries to receive the
benefits, if any, which are payable under this
Plan in the event of the Participant's death and
may change the beneficiary designation at any
time and from time to time. If there shall be
no beneficiary designated and surviving at the
Participant's death, the beneficiary of any
benefits payable from an Account under this Plan
shall be the same person or persons designated
as beneficiary under the Qualified plan with
respect to which such benefits are payable
hereunder.
13. Nonassignable-Rights. Except as otherwise
provided by this Plan, no right or benefit of a
Participant under this Plan may be assigned,
encumbered, or transferred in any manner.
14. Independence of Agreement. The benefits payable
under this Plan shall be independent of and in
addition to any other employment agreement that
may exist from time to time between the Company
and any Participant or any other compensation
payable by the Company to the Participant whether
as salary, bonus, or otherwise. This Plan shall
not be deemed to constitute a contract of
employment between any Participant and the
Company, nor shall any provision hereof restrict
the rights of any Participant to terminate his
employment.
15. Trust Agreement. The Company has established
the Crompton Corporation Benefit Equalization
Plan Trust Agreement (the "Trust Agreement")
with Fleet National Bank, N.A. as trustee ("the
Trustee") and has contributed to the trust
established thereby assets to be held therein,
subject to the claims of the Company's creditors
in the event of the Company's insolvency (as
therein defined), until paid to participants in
this Plan and their beneficiaries in the manner
and at the times specified in this Plan. All
amounts which the Company is obligated to
allocate to Accounts of Participants under Plan
shall be paid over or delivered to the Trustee,
to be held and invested as provided in the Trust
Agreement. Anything in the Plan to the contrary
notwithstanding, all benefits to which a
Participant or his beneficiary may become
entitled under the Plan, except payments to be
made by the Company as provided in Section 18
hereof, shall be payable by the Trustee
pursuant to the terms of the Trust Agreement,
and unless and until the Company becomes
insolvent (as defined in the Trust Agreement),
the sole obligation of the Company shall be to
make contributions to the Trustee as provided in
this Section 15 and, to make such payments, if
any, as may be required pursuant to Section 18
hereof.
16. Non-Secured Promise. The rights of a
Participant (or his spouse or beneficiary, if
applicable) under this Plan shall be solely
those of an unsecured creditor of the Company.
No Participant shall have any preferred claim
on, or any beneficiary ownership interest in,
any asset acquired or held by the Company in
connection with liabilities assumed by it under
the Plan or any asset held by the Trustee under
the Trust Agreement prior to the time such
assets are paid to the Participant pursuant to
the terms of the Plan or the Trust Agreement,
and all rights created under the Plan or the
Trust Agreement shall be mere unsecured
contractual rights of the Participant (or his
spouse or beneficiary against the Company or the
Trustee, as the case may be.
17. Administration. The Plan shall be administered
by the Employee Benefits Committee appointed
from time to time by the Board of Directors of
the Company. Except as limited by the express
provisions of the Plan or by the terms of the
resolution of the Board of Directors of the
Company by which the Committee shall have been
established, the Committee shall have authority
and discretion to determine the rights and
benefits of Participants under the Plan,
establish from time to time regulations for the
administration of the Plan, interpret the Plan,
and make all determinations deemed necessary or
advisable for the administration of the Plan.
18. Certain Further Payments by the Company. The
committee referred to in Section 19 hereof may
direct that the amounts held for a Participant
in any Account under this Plan be paid to the
Participant upon a Change of Control. In the
event that any amounts paid or distributed to a
Participant pursuant to this Agreement (taken
together with any amounts otherwise paid or
distributed to a Participant in connection with
a Change of Control) are subject to an excise tax
under Section 4999 of the Code or any successor or
similar provision thereto (the "Excise Tax"), the
Company shall pay to the Participant 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
Participant on the receipt of such additional
amount, the Participant is left with the same
after-tax amount the Participant would have been
left with had no Excise Tax been imposed.
19. Amendment or Termination. The Organization,
Compensation and Governance Committee of the
Board of Directors of the Company may amend,
suspend, or terminate the Plan or any portion
thereof at any time; provided, however, that no
amendment, suspension, or termination of the
Plan shall adversely affect the right of a
Participant to any benefits which accrued
pursuant to the provisions of the Plan prior to
the date such amendment, suspension, or
termination is adopted or becomes effective.
20. Governing Law. The Plan shall be governed by
and construed in accordance with the laws of the
State of Delaware insofar as such laws do not
contravene Federal laws applicable to the Plan.
IN WITNESS WHEREOF, the Company has caused this Plan
to be executed by its officer thereunto duly
authorized as of the 30th day of April, 2002.
CROMPTON CORPORATION
BY:
Title:
Adopted: January 1, 1987
Amended: October 20, 1993
Amended: April 30, 2002