EXHIBIT 10.27
Form of Amended and Restated 1996-1998 Long Term
Performance Award Agreement
This Agreement, dated as of March 31, 1997, is made by and
between Crompton & Xxxxxxx Corporation (the "Corporation") and
________ (the "Executive").
WHEREAS, the Corporation has adopted the 1988 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;
WHEREAS, the Executive, a key employee of the Corporation or
a subsidiary of the Corporation, was granted the opportunity to
earn shares of common stock of the Corporation in accordance with
the terms and conditions of the Plan and an Agreement dated
January 23, 1996, entitled 1996-1998 Long Term Performance Award
Agreement (the "January 23 Agreement"); and.
WHEREAS, the Corporation and the Executive wish to amend and
restate in its entirety the January 23 Agreement;
NOW, THEREFORE, the parties hereby amend and restate the
January 23 Agreement to read as set forth herein.
1. The Executive is granted the opportunity to earn a
maximum ______ of Maximum Shares 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, 1996, to December 31, 1998.
(b) "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(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 and the subsidiary
corporation, if any, by which the Executive is
employed.
(c) "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, 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 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.
(d) "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 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 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; (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 the
Corporation (the "Crompton & 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 lease a majority of the Crompton &
Xxxxxxx Board; provided that any person becoming
a director of the Corporation 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 (z) the
Corporation 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.
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 Capital Objective
This objective, which must be achieved in order
for the Executive to earn an Award, shall be the
achievement by the Corporation of an average
annual return on capital for the Performance
Period equal to or greater than the lesser of (i)
twelve percent (12%) or (ii) the average annual
return on capital achieved by a select group of
specialty chemical companies as monitored by the
Corporation.
(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 $3.06 per
common share.
The following table shows by way of example the
cumulative earnings per share which will be
realized by the Corporation if the earnings per
share increase annually during the Performance
Period at rates of ten, thirteen and fifteen
percent from the 1995 base of $.84 per share and
the Award associated with cumulative earnings per
share at each of those levels:
Threshold Award Target Award Maximum Award
Cumulative EPS $3.06 $3.22 $3.36
Award Earned Threshold Shares Target Shares Maximum Shares
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, retirement, the Executive
Compensation Committee of the Crompton & Xxxxxxx
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 share and
cumulative earnings per share quantities
specified in section 3 hereof. The Executive
shall be entitled to a prorated Award pursuant to
this subsection (b) without regard to whether or
not the Corporation has achieved the return on
capital 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. 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 Crompton & Xxxxxxx
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. The Executive shall be paid, at the time any shares
earned by him are transferred to him, such sum of
money or, at the sole discretion of the Corporation,
such additional shares or other property, as shall be
equal to the Executive's pro rata share of the Trust
earnings to the date of and attributable to such
payment, but less such cash or shares, if any, as the
Corporation shall in its sole discretion determine
are required to be withheld to pay taxes due on the
cash or shares then being transferred to the
Executive. The Executive shall have the right to
defer any portion of the earned Award.
7. 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:
25% on December 31, 1998
25% on December 31, 1999
25% on December 31, 2000
25% on Retirement of the Executive
Notwithstanding any other provision of this Section 7, upon
the termination of the Executive's employment with the
Corporation on or after December 31, 1998, due to death,
disability, retirement or for any reason following a Change
in Control occurring after December 31, 1998, any Award
theretofore earned by the Executive hereunder shall
immediately become fully vested in him. Termination of the
Executive's employment with the Corporation on or after
December 31, 1998, 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.
8. 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.
CROMPTON & XXXXXXX CORPORATION
By: _________________________
___________________
Executive
