Crompton Corporation 2001 Management Incentive Plan

Summary

This agreement outlines Crompton Corporation's 2001 Management Incentive Plan for key management employees. Eligible participants are selected by company leadership and must meet employment requirements. The plan provides incentive awards based on achieving specific earnings and operating performance targets, with awards prorated for partial-year participants. Awards are only granted if at least 80% of performance goals are met, and the company retains full discretion over payments. Participation does not guarantee continued employment, and employment remains at-will.

EX-10.26 13 rexh1026.txt EXHIBIT 10.26 2001 MANAGEMENT INCENTIVE PLAN I. Eligibility A. Participation will be limited to key management personnel who are approved by the Organization, Compensation and Governance Committee of the Board of Directors and/or the President and Chief Executive Officer. Names of proposed participants, who are recommended by the Executive Vice Presidents, Senior Vice Presidents, and Regional Vice Presidents, should be received by the Senior V. P. Organization and Administration in the corporate office, by December 31st of the preceding year. Personal objectives for approved participants should be received by April 15th. B. To be eligible for the Management Incentive Plan (MIP), participants must be employees of Crompton and/or its eligible subsidiaries as of January 1st of the Plan year and remain on the payroll through the date the MIP awards, if any, are made. Exceptions may be granted to employees who are participating as of January 1st of the Plan year; complete at least six months of employment during the Plan year, and then retire or leave involuntarily (except for cause). Such participants may be eligible for prorated payments. C. Employees who are either hired as a MIP eligible participant or are promoted and become a MIP eligible participant after the beginning of the Plan year may be assigned prorated target incentives based upon salary at eligibility and the number of months in the position provided they have a minimum of sixmonths participation. II. Target Award Each participant's target award opportunity is a function of actual base salary at the beginning of the Plan year or later date of entry into the Plan. III. Earnings Performance A. One half of the target award is determined based on applicable Net Income After Tax (NIAT) or Earnings results. (See Performance Matrix). B. Threshold performance for earning an award is at 80% achievement of the applicable earnings budget. Where earnings are split, the elements of earnings will be calculated on a weighted average based on the split. The weighted average must reach 80% of budget. C. The maximum award level for earnings Performance is reached at 120% achievement of the applicable earnings budget. D. The Earnings Performance component of an Incentive award is determined from the attached Earnings Performance Schedule and is leveraged from 50% (at 80% of earnings budget) to 200% (at 120% of earnings budget). IV. Operating Performance A. One half of the target award is determined based on operating performance, other than earnings, (Return on Capital Employed, Sales, Cash Flow, Working Capital, Individual Contributions, etc.) B. The threshold for earning an award for Operating performance is 80% achievement of operating performance goals and the maximum award level, for quantifiable operating performance, is reached at 120% achievement of operating performance goals. C. The Operating Performance component of an incentive award is determined from the attached Operating Performance Schedule and is leveraged from 80% to 150% depending upon actual performance. D. Non-quantifiable Individual Contributions will be rated from 80% achievement to 100% achievement. Quantifiable Individual Contributions will be rated from 80% achievement to 150% achievement. V. No incentive for either earnings or operating Performance may be earned by an individual if the earnings performance applicable to that individual is less than 80% (Threshold). The Corporation reserves the right to determine in its sole discretion, whether, and, if so, in what amount of incentive compensation shall be paid in any year to any employee of the Corporation under the Plan. Participation in the MIP is in no way an employment agreement, and each employees' employment by Crompton remains, and shall continue to remain, at will. Nothing in the MIP changes or in any way affects an employee's right to resign his or her employment at any time, or Crompton's right to terminate such employee's employment at any time. 2001 MIP / SIP (PERFORMANCE MATRIX) SBU/ CEO Division Region SBU's Region SSBU Opns./ EVPs VPs Heads Mktg. Mktg. Mfg. Heads Heads Heads Consolidated NIAT 50% 10% Division Earnings 30% Division/ Region SBU Earnings 50% 40% 50% 50% Region Earnings 10% 50% 10% EARNINGS PERFORMANCE 50% 50% 50% 50% 50% 50% 50% Consolidated Cash Flow 20% Consolidated ROCE 20% Division/SBU Cash Flow 20% 5% 10% Region/SBU/ SSBU Sales 20% 20% 30% 30% Region/SBU Accts. Rec. & Inv. 15% 10% 10% EHS Contributions 10% 10% 10% 10% 5% 5% 15% Individual Contributions 20% 5% 5% 5% 15% 25% OPERATING PERFORMANCE 50% 50% 50% 50% 50% 50% 50% Div. Div. Div. Region Region Corp. R&D Staff Staff Staff Staff Staff Heads Finac Non-Fin Finac Non-Fin Sales Consolidated NIAT 50% Division Earnings 50% 50% 50% Division/ Region SBU Earnings Region Earnings 50% 50% 20% EARNINGS PERFORMANCE 50% 50% 50% 50% 50% 50% 20% Consolidated Cash Flow 10% Consolidated ROCE 15% Division/SBU Cash Flow 20% Region/SBU/ SSBU Sales Region/SBU Accts. Rec. & Inv. 20% 10% EHS Contributions 15% 5% 5% 5% 10% 5% 5% Individual Contributions 35% 25% 45% 25% 40% 20% 65% OPERATING PERFORMANCE 50% 50% 50% 50% 50% 50% 80% Notes: Division Earnings is defined as Gross Profit less SG&A, plus or minus Equity Income and total other Income and Expense. Division EVPs w/o Regional responsibilities Division Earnings = 40%. Regional VPs: Division Earnings as reported for all business units within the region, plus or minus the variance to budget for all corporate charges recorded by each legal entity with in the region. SBU Earnings for Operations and Manufacturing Heads will be on a weighted average based on each plant's support to the business. Individual Contributions for Operations and Manufacturing Heads will include objectives for Cost, Off-Grade, and Raw Materials Inventories and other business metrics, such as on time deliveries. Individual Contributions for Sales will be actual to Budgeted Sales in US$. (No adjustments will be made for F/X). Quantifiable Individual Objectives will be rated between 80% and 150% achievement, Non-Quantifiable between 80% and 100% achieved. Sales positions must achieve threshold of 93% of sales budget to qualify for any payout. EHS contributions will be specific and measurable per guidelines from Corporate EH&S.