EXHIBIT 10.2
FORM OF SUPPLEMENTAL RETIREMENT AGREEMENT
THIS AGREEMENT dated as of March 22, 1999 ("Agreement"), by and between
____________ of _________, __ ("Employee") and Crompton & Xxxxxxx Corporation,
a Massachusetts corporation ("Corporation").
WITNESSETH:
WHEREAS, the Corporation and the Employee are parties to a Supplemental
Retirement Agreement dated as of October 18, 1995; 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 October 18, 1995 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) "Normal Retirement Date" shall mean the first day of the
first full month commencing on or after the Employee's sixty-second (62nd)
birthday.
(b) "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.
(c) "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 employed by the Corporation in connection
with its employee benefit plans, but using an interest assumption which is not
less than the Pension Benefit Guaranty Corporation interest assumption in
effect at the beginning of the month as of which the computation is made.
(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) "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), 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 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.
(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) "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
0000 (xxx "Xxxxxxxx Xxx"); 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.
(h) "Projected Compensation" shall mean (i) for any calendar
year throughout which the Employee 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 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 paragraph 9, 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 paragraph 7 of this Agreement) 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 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 paragraph 9, as the
Employee shall elect.
7. Anything in paragraphs 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
paragraph 9, 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 paragraph 9, 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 paragraph 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 sub-paragraph (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 sub-paragraph (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 paragraph, the
supplemental retirement benefit to which he would then be entitled under
paragraph 6 if his employment by the Corporation had terminated other than by
reason of disability on the date his disability occurred.
9. The normal form in which the benefit payable under paragraphs 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.
Anything in this paragraph 9 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. If the Employee shall die while currently receiving a benefit
under the provisions of paragraphs 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 paragraph 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 paragraph 9, except a Joint and Survivor
Annuity, in an amount which is the Actuarial Equivalent of the form of benefit
otherwise payable under this paragraph.
If the Employee shall die after having become entitled to a benefit
under paragraph 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 paragraph 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
Xxxxxxxx & Xxxxxxx Corporation has caused this instrument to be executed in
its name and on its behalf by its duly authorized officer, as of the 22 day of
March, 1999.
___________________________
Employee
CROMPTON & XXXXXXX CORPORATION
By:_________________________
Its:
