SUPPLEMENTAL RETIREMENT AGREEMENT
AGREEMENT dated as of the day of August, 1996 (the
"Agreement") by and between (the "Executive") and
Uniroyal Chemical Company, Inc., a New Jersey corporation (the
"Corporation").
WITNESSETH:
WHEREAS, the Corporation is engaged in the extremely
competitive business of developing, manufacturing and marketing
crop protection chemicals, rubber chemicals, plastic and petroleum
additives, elastomers and urethane prepolymers throughout the
United States, Canada, Western Europe and certain other areas of
the world;
WHEREAS, the Executive, as a result of training, expertise and
personal application over the years, has acquired and will continue
to acquire considerable and unique expertise and knowledge which
are of considerable value to the Corporation;
WHEREAS, the Corporation wishes to induce the Executive to
continue in its employ, recognizing that in the case of the
Executive and a limited number of other key executive employees to
whom similar contracts may be offered, the ordinary retirement
benefits provided under the Corporation's retirement systems 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
such key executive employees' services; and
WHEREAS, the Executive and the Corporation wish to terminate
the Supplemental Executive Retirement Agreement between the
Executive and the Corporation dated the first day of July, 1992,
and to enter into this Agreement with respect to supplemental
retirement benefits to be provided the Executive by the
Corporation;
NOW, THEREFORE, in consideration of the continued employment
of the Executive by the Corporation and the benefits to be derived
by the Executive hereunder, the Executive and the Corporation
hereby agree as follows:
1. Nothing herein shall be deemed a contract of employment
for any minimum fixed term, or shall restrict the freedom of the
Corporation or the Executive to terminate the employment
relationship between them at any time.
2. The Supplemental Executive Retirement Agreement between
the Executive and the Corporation dated the first day of July,
1992, is terminated effective on the date hereof and shall be of no
further force or effect.
3. For the purposes of this Agreement, the following terms
shall have the following meanings:
(a) CKC" shall mean Crompton & Xxxxxxx Corporation and its
Subsidiaries".
(b) "Actuarial Consultants" shall mean the actuarial consultants
employed by Crompton & Xxxxxxx Corporation, the parent of the
Corporation, in connection with its employee benefit plans.
(c) "Normal Retirement Date" shall mean the first day of the
month on or next after the Executive's sixty-fifth (65th) birthday.
(d) "Compensation" shall mean all of the Executive's cash
compensation paid by the Corporation or CKC for a calendar year,
including salary, any amount contributed by the Executive to a cash
or deferred plan under Section 401(k) of the Internal Revenue Code
of 1986, as amended, 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 the sign on incentive paid to the Executive pursuant to
Section 4 of an employment agreement with the Corporation dated
August 21, 1996, insurance costs or income from the exercise of
stock options.
(e) "Actuarial Equivalent" shall mean an amount of
equivalent value computed on the basis of the actuarial assumptions
used from time to time by the Actuarial Consultants in connection
with the employee benefit plans of CKC, but using an interest
assumption which is not less than the Pension Benefit Guaranty
Corporation's interest assumption, if any, in effect at the
beginning of the month as of which the computation is made.
(f) "Company Plan Benefit" shall mean the amount of benefit
payable to or in respect of the Executive from any defined benefit
pension plan maintained by CKC, calculated in the form of a
straight life annuity (regardless of the form in which such benefit
may actually be payable).
(g) "Cause" shall mean (i) the Executive'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), after a demand
for substantial performance is delivered to the Executive by the
Board of Directors of the Corporation (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. For purposes of this sub-paragraph (e), 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.
(h) "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 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 Executive; (ii) any failure by the
Corporation to comply with any of the provisions of any employment
agreement between the Executive 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
Executive; (iii) any change not concurred in by the Executive in
the location of the office at which the Executive is principally
based, except for a change to a location within a 40 mile radius of
Middlebury, CT, and 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 of the Executive's
employment otherwise than as permitted by any employment agreement
between the Executive and the Corporation.
(i) "Change in Control" shall mean (i) a change in
control of Crompton & Xxxxxxx 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 January 1, 1988, pursuant to Section 13
or 15(d) of the Securities Exchange Act of 0000 (xxx "Xxxxxxxx
Xxx"); provided that, without limitation, such a "Change in
Control" shall be deemed to have occurred if (x) 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 Crompton & Xxxxxxx, becomes the beneficial owner, directly or
indirectly, of 20% or more of the combined voting power of Crompton
& Xxxxxxx' outstanding voting securities ordinarily having the
right to vote for the election of directors of Crompton & Xxxxxxx;
(y) during any period of 24 consecutive months individuals who, at
the beginning of such consecutive 24-month period, constitute the
Board of Directors of Crompton & Xxxxxxx (the "Xxxxxxxx & Xxxxxxx
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 Crompton & Xxxxxxx Board; provided that
any person becoming a director of Crompton & Xxxxxxx subsequent to
the date hereof whose election, or nomination for election by
Crompton & Xxxxxxx' 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 Crompton & Xxxxxxx, 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 (z) Crompton &
Xxxxxxx 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; or (ii) the sale or
other disposition to a third person, including a "group" as such
term is used in Section 13(d)(3) of the Exchange Act, other than
Crompton & Xxxxxxx, a direct or indirect wholly-owned Subsidiary of
Crompton & Xxxxxxx, or the trustee of any employee benefit plan of
Crompton & Xxxxxxx or the Corporation, of (x) a majority 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 or (y) the division or Subsidiary of
the Corporation by which the Executive is employed.
(j) "Projected Compensation" shall mean (i) for any
calendar year throughout which the Executive is employed by the
Corporation, his Compensation (as defined in paragraph 3(b) hereof)
for such year, and (ii) for any calendar year during or after which
his employment by the Corporation has been terminated, the
compensation the Executive 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 by the Corporation forward at a rate 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 such
year and (B) a bonus equal to 40 of his salary as thus projected.
(k) "Subsidiary" shall mean, with respect to any
Person, (i) any corporation that is directly or indirectly through
one or more intermediaries, controlled (as such term is defined
under the Securities Act of 1933, as amended) by such Person, (ii)
any corporation more than 50% of the voting capital stock of which
is owned, directly or indirectly, by such Person or (iii) any other
Person that is directly or indirectly controlled (as such term is
defined under the Securities Act) by such Person or in which such
Person holds, directly or indirectly, a majority voting or
ownership interest.
(l) "Person" shall mean any individual, group,
corporation, partnership, joint venture, trust, joint stock
company, unincorporated organization or government or political
department or agency thereof or other entity of whatever nature.
4. If, prior to his Normal Retirement Date, the
Executive's employment with CKC shall be terminated by CKC for
Cause, he shall thereby forfeit all rights and benefits under this
Agreement. If the employment of the Executive shall be terminated
on or after his Normal Retirement Date, this Agreement shall
continue in full force and effect, and the Executive shall become
entitled to the rights and benefits hereinafter set forth upon the
occurrence of the events respectively giving rise thereto.
5. If the Executive shall remain in the employ of CKC
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 the amount by
which
(a) Fifty five percent (55%) of the Executive'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 Normal Retirement Date
exceeds
(b) the annual amount of the Company Plan Benefit
payable to the Executive, determined as of his Normal Retirement
Date.
Such supplemental retirement benefit shall commence on the
Executive's actual retirement date and shall be payable in one of
the benefit payment forms described in paragraph 8, as the
Executive shall elect.
6. If the Executive's employment by CKC shall be
terminated by CKC or the Executive (other than by reason of his
death or disability) prior to his Normal Retirement Date under
circumstances not resulting in his forfeiture of benefits and
rights under paragraph 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 five percent (55%) of the Executive'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 Executive shall have completed with CKC
(including the Corporation prior to its acquisition by Crompton &
Xxxxxxx Corporation and Uniroyal, Inc.) prior to the the
termination of his employment and the denominator shall be the
number of full years of continuous service he would have completed
with CKC (including the Corporation prior to its acquisition by
Crompton & Xxxxxxx Corporation and Uniroyal, Inc.) on his Normal
Retirement Date had he remained in the continuous service of CKC
until his Normal Retirement Date.
(c) There shall then be subtracted from the amount
thus determined the annual amount of the Company Plan Benefit
payable to the Executive, determined as of the date of the
termination of his employment.
Such reduced supplemental retirement benefit shall commence on the
first day of the month following the month in which the Executive
attains age 62 and shall be payable in one of the benefit payment
forms described in paragraph 8, as the Executive shall elect.
Anything in this paragraph or paragraph 4 to the contrary
notwithstanding, if, prior to his Normal Retirement Date but after
a Change in Control shall have occurred, CKC shall terminate the
Executive's employment other than for Cause, disability, or death
or the employment of the Executive shall be terminated voluntarily
by the Executive for Good Reason, he shall be entitled to elect to
receive a supplemental retirement benefit under this Agreement in
lieu of any benefit he is entitled to receive under sub-paragraphs
(a)-(c), inclusive, of this paragraph 6, which shall be at an
annual rate computed as follows:
(d) If the Executive has not attained the age of 55
on the date his termination of employment occurs, his benefit shall
be equal to the amount by which
(i) Fifty five percent (55%) of the Executive'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
exceeds
(ii) the annual amount of the Company Plan Benefit
payable to the Executive, determined as of the date of the
termination of his employment.
(e) If the Executive has attained age 55 on the date
his termination of employment occurs, his benefit shall be equal to
the amount determined under sub-paragraphs (a) and (c) of this
paragraph without the application of sub-paragraph (b) hereof.
Such supplemental retirement benefit under sub-paragraph (d) or (e)
hereof shall commence on the first day of the month following the
month in which the Executive attains age 65 and shall be payable in
one of the benefit payment forms described in paragraph 8, as the
Executive shall elect.
7. If the Executive becomes qualified for benefits under
any long term disability plan sponsored by the Corporation as a
result of total disability while in the employment of the
Corporation, but prior to his Normal Retirement Date, he shall
become entitled to a disability benefit hereunder which shall be at
an annual rate computed as follows:
(a) There shall first be determined the amount which
is equal to fifty five percent (55%) of the Executive'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.
(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 Executive shall have completed with CKC
(including the Corporation prior to its acquisition by Crompton &
Xxxxxxx Corporation and Uniroyal, Inc.) prior to the the
termination of his employment and the denominator shall be the
number of full years of continuous service he would have completed
with CKC (including the Corporation prior to its acquisition by
Crompton & Xxxxxxx Corporation and Uniroyal, Inc.) on his Normal
Retirement Date had he remained in the continuous service of CKC
until his Normal Retirement Date.
(c) There shall then be subtracted from the amount thus
determined the annual amount of the Company Plan Benefit payable to
the Executive, determined as of the date his disability benefit
hereunder is to commence.
Such disability benefit shall commence on the date the benefits
payable to the Executive under such long term disability plan
sponsored by the Corporation cease, if the Executive is then
living, and shall be payable in one of the benefit payment forms
described in paragraph 8, as the Executive shall elect.
8. The normal form in which the benefit payable under
paragraphs 5, 6, or 7 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 Executive 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 Executive may designate for the life of such
beneficiary. 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 Executive
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 Executive at any time prior to the
date on which benefit payments are to commence. The Executive
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 Executive'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
Executive's death, the estate of the Executive shall be the
beneficiary. Whenever any benefits hereunder become payable to the
beneficiary of the Executive, 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.
Anything in this paragraph 8 to the contrary notwithstanding,
at any time after the date on which benefit payments commence, the
Executive 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
Executive is otherwise entitled hereunder on the date as of which
such election is made.
9. If the Executive shall die while currently receiving a
benefit under the provisions of paragraphs 5, 6, or 7 of this
Agreement and the Executive 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 Executive. If the Executive shall die
after having reached his Normal Retirement Date but prior to his
actual retirement date and the Executive 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 Executive had commenced to receive benefits hereunder on
the first day of the month in which his death occurred. If the
Executive shall die while in the active employ of the Corporation
but prior to his Normal Retirement Date, or if the Executive shall
die after having become entitled to receive a disability benefit
under paragraph 7 but prior to his Normal Retirement Date, a death
benefit shall be paid to the Executive's beneficiary, in lieu of
any other benefit under this Agreement, which shall be at an annual
rate equal to twenty percent (20%) of the Executive'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 Executive'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
Executive 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
paragraph 8 in an amount which is the Actuarial Equivalent of the
form of benefit otherwise payable under this paragraph.
If the Executive shall die after having become entitled to a
benefit under sub-paragraph (d) or (e) of paragraph 6 hereof but
prior to attaining age 65, a death benefit shall be paid to the
Executive's beneficiary, in lieu of any other benefit under this
Agreement, which shall be the single sum Actuarial Equivalent value
as of the Executive's death of the benefit to which he would have
been entitled had he survived to age 65. Such death benefit shall
be payable in a lump sum as soon as practicable after the
Executive's death; provided that the beneficiary entitled thereto
may elect to have such death benefit paid in any of the forms
described in paragraph 8.
10. Anything in this Agreement to the contrary
notwithstanding, if at any time during the five year period
immediately following termination of his employment with the
Corporation the Executive shall directly or indirectly compete with
CKC, 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 CKC is
engaged at the time of the termination of the Executive'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 CKC to be conducted, CKC may suspend the
payment of any benefits hereunder to the Executive until such
competition shall have ceased, and in the event such competition by
the Executive shall not have ceased to the satisfaction of CKC
within 90 days after CKC shall have given written notice to the
Executive to cease the conduct thereof, CKC 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 CKC therein. Nothing herein, however, shall prohibit
the Executive 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.
11. 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.
CKC will make all benefit payments hereunder solely on a current
disbursement basis out of the general assets of CKC, including
without limitation from assets held in any grantor trust
established by CKC for the purpose of making some or all of such
payments.
12. 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.
13. The rights of the Executive under this Agreement shall
not be assigned, hypothecated, or otherwise transferred in any
manner.
14. This Agreement shall be governed by and construed in
accordance with the laws of the State of Connecticut.
IN WITNESS WHEREOF, the Executive has hereunto signed his name
and the Corporation has caused this instrument to be executed in
its name and on its behalf by its duly authorized officer, as of
the day and year first above written.
______________
Executive
UNIROYAL CHEMICAL COMPANY, INC.
By:
Its:
