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 30th day of October, 1989,
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 30th day of October,
1989, 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) "Alternate Benefit Amount" shall mean the sum of $
, plus interest thereon from the date of this Agreement to
the date of termination of the Executive's employment with the
Corporation, calculated for each six month period commencing on
January 1 and July 1 at an interest rate per annum equal to the six
month London interbank offerred rate for prime banks on deposits in
U.S. dollars as published in a newspaper of daily circulation in
London, England on the day preceding the date of this Agreement
(in the case of the period from the date of this Agreement to and
including December 31, 1996), and, thereafter, on the December 31
or June 30 (or, if no such rate is published on any such date, on
the last day prior thereto that such an interest rate is so
published) immediately preceding each such six month period , plus
0.75%.
(l) "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.
(m) "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. Anything in this Agreement to the contrary
notwithstanding, and provided that the Executive has not received
payment pursuant to paragraph 7 of this Agreement and does not
elect pursuant to sub-paragraph 8(b) or paragraph 6 to receive a
benefit described in paragraphs 5 or 6 of this Agreement, upon the
termination of the Executive's employment with CKC for any reason,
the Executive shall be entitled to receive a supplemental
retirement benefit equal to the Alternate Benefit Amount payable in
the forms described in paragraph 8.
5. If the Executive shall remain in the employ of CKC
until and shall reach his Normal Retirement Date and does not
receive the Alternate Benefit Amount as a supplemental retirement
benefit pursuant to paragraph 4 of this Agreement, 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.
6. If the Executive's employment by CKC shall be
terminated (other than by reason of his death or disability or by
CKC for Cause) prior to his Normal Retirement Date and he does not
receive the Alternate Benefit Amount as a supplemental retirement
benefit pursuant to 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 Cromption &
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.
Anything in this paragraph to the contrary notwithstanding,
if, prior to his Normal Retirement Date but after a Change in
Control shall have occurred, the Executive's employment by CKC
shall terminate other than by reason of his death or disability
the Executive 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 or otherwise under the terms of this Agreement,
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.
7. If the Executive is not eligible to receive or, if
eligible, waives his right to any payments and is not receiving any
payments pursuant to this Agreement, if the Executive becomes
qualified for benefits under any long term disability plan
sponsored by CKC as a result of total disability while in the
employment of CKC, CKC, if it has not done so already, shall pay to
the Executive in a lump sum as soon as practicable following the
commencement of such disability the Alternate Benefit Amount.
8. (a) The normal form in which the benefit payable
under this Agreement shall be paid shall be a lump sum payment of
the Alternate Benefit Amount which the Corporation shall pay to the
Executive not later than ten days following the termination of the
Executive's employment by CKC. In lieu of such lump sum payment of
the Alternate Benefit Amount, the Executive may elect to receive
the Actuarial Equivalent of such lump sum payment (as determined by
the Actuarial Consultants) payable either (i) as an annuity
providing for monthly payments for life and without refund, (ii) as
an annuity providing for monthly payments for life with a period
certain of up to 180 months, in the form of a monthly benefit
payable for a period certain, or (iii) 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.
(b) In lieu of the benefit described in sub-paragraph
8(a) the Executive, if eligible, may elect to receive a benefit as
provided in paragraph 5 or sub-paragraphs 6(a)-(e) of this
Agreement, in the form of a monthly benefit payable for life and
without refund.
(c) The Executive may further elect to receive any
benefit described in sub-paragraph 8(b) 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 form to which the Executive would
otherwise be entitled under sub-paragraph 8(b).
(d) The elections described in sub-paragraphs 8(a),
8(b) or 8(c) shall be made in writing delivered to the Secretary of
the corporation employing Executive not less than one year prior to
the termination of the Executive's employment by the corporation
employing Executive and may not be changed or rescinded thereafter.
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 unpaid 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 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 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 prior to receiving a benefit under this
Agreement, the Alternate Benefit Amount shall be paid in a lump sum
to his beneficiary as a death benefit as soon as practicable
following the Executive's death in lieu of any other benefit under
this Agreement ; 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. Such
death benefit 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.
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 CKC, 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:
