SUPPLEMENTAL RETIREMENT AGREEMENT
AGREEMENT dated as of October 18, 1995 (the "Agreement") by and between
(the "Employee") and Crompton & Xxxxxxx Corporation, a Massachusetts
corporation (the "Corporation.")
WITNESSETH:
WHEREAS, the Corporation wishes to induce the Employee to continue in its
employment, recognizing that in the case of a limited number of key executive
employees to whom similar contracts may be offered 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;
NOW, THEREFORE, the Employee 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 Employee
to terminate the employment relationship between them at any time.
2. It is expressly agreed that the Employee shall be entitled to no
benefits by reason of this Agreement unless and until he shall have completed
five (5) years of continuous employment by the Corporation from the effective
date of this Agreement. All references herein to the Corporation shall be
deemed to include any subsidiary, which shall be defined as meaning any
corporation of which this Corporation owns all 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 month on
or next after the Employee's sixty-fifth (65th) birthday.
(b) "Compensation" shall mean all of 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, 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 from 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) which is attributable to contributions
made by the Corporation, calculated in the form of a straight life annuity
(regardless of the form in which such benefit may actually be payable).
(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 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: (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 14 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 or quoted in the NASDAQ National Market System.
(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 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.
4. If, prior to his Normal Retirement Date, the Employee shall voluntarily
terminate his employment with the Corporation (except as hereinafter provided)
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, or if, prior to that date but after the conditions of
paragraph 2 hereof have been satisfied, the Employee shall voluntarily
terminate his employment with the approval of the Corporation (as evidenced by
vote of its Board of Directors or the Committee thereof authorized to
administer this Agreement) or his employment 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 employment by 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 the amount by which
(a) thirty-five percent (35%) 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 Normal Retirement
Date
exceeds
(b) the annual amount of the Company Plan Benefit payable to the Employee,
determined as of his Normal 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 8, 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) 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 thirty-five
percent (35%) 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 between the effective date of this Agreement and
the termination of his employment and the denominator shall be the number of
full years of continuous service he would have completed between the effective
date of this Agreement and his Normal Retirement Date had he remained in the
continuous service of the Corporation 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 Employee, 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 Employee's termination of employment and shall be
payable in one of the benefit payment forms described in paragraph 8, as the
Employee 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 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 elect to receive a supplemental
retirement benefit under this Agreement, whether or not the Employee shall
have then satisfied the conditions of paragraph 2 hereof, 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 Employee 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) thirty-five percent (35%) 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
exceeds
(ii) the annual amount of the Company Plan Benefit payable to the
Employee, determined as of the date of the termination of his employment.
(e) If the employee 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
Employee attains age 65 and shall be payable in one of the benefit payment
forms described in paragraph 8, as the Employee shall elect.
7. If the Employee 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 and after the conditions of
paragraph 2 hereof have been satisfied, 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
thirty-five percent (35%) 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.
(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 between the effective date of this Agreement
and the date his employment terminates on account of disability and the
denominator shall be the number of full years of continuous service he would
have completed between the effective date of this Agreement and his Normal
Retirement Date had he remained in the continuous service of the Corporation
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 Employee, 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
Employee under such long term disability plan sponsored by the Corporation
cease, if the Employee is then living, and shall be payable in one of the
benefit payment forms described in paragraph 8, as the Employee 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 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. 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 8 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.
9. If the Employee shall die while currently receiving a benefit under the
provisions of paragraphs 5, 6, or 7 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 after the condition of paragraph 2 has been satisfied and 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 7 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 twenty
percent (20%) 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 8
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
sub-paragraph (d) or (e) of paragraph 6 hereof but prior to attaining age 65,
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 65. 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 8.
10. 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.
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. 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.
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 Employee 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 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 18th day of October,
1995.
Employee
CROMPTON & XXXXXXX CORPORATION
By:
