Exhibit 10.7

THE LUBRIZOL CORPORATION

2005 STOCK INCENTIVE PLAN

PERFORMANCE SHARE AWARD

THIS PERFORMANCE SHARE AWARD, dated this      day of             , 2        ,
(the “Grant Date”) by The Lubrizol Corporation (the “Company”) to
                                        , an employee of the Company and/or a
Subsidiary (as defined in the Plan).

The following terms and provisions apply to this Performance Share Award:

1. The Company hereby grants to you, under the provisions of Section 9 of the
Company’s 2005 Stock Incentive Plan, as amended (the “Plan”), the number of
Company Common Shares, without par value, in accordance with the three-year
performance target approved by the Organization and Compensation Committee. The
Company Common Shares granted hereunder are referred to herein as the “Shares”.

2. If there is a Change in Control, as defined under the Plan, prior to the
receipt of Shares under Section 1, above, you will receive a pro-rata number of
Shares within 60 days after the Change in Control. The pro-rata number of Shares
will be determined as shown on Exhibit A attached to this Award.

3. If you separate from service due to retirement (either normal or early
retirement) prior to the receipt of Shares pursuant to Section 1, above, you
will receive a pro-rata number of Shares between the January 1 and March 15 of
the year following the end of the three-year cycle based on the number of full
months which have elapsed since the date of this Award at the time or your
separation from service or death. In no event will the payment of Shares be made
earlier than six months after your separation from service due to retirement.

If you separate from service due to death prior to the receipt of Shares
pursuant to Section 1, above, your beneficiary will receive a pro-rata number of
Shares between the January 1 and March 15 of the year following the end of the
three-year cycle based on the number of full months which have elapsed since the
date of this Award at the time or your service or death. If the Company does not
have a beneficiary election on file at the time of your death, the Shares will
be issued to your spouse, or if your spouse is not living at the time of
issuance, your children who are living, or if you have no living children at the
time of issuance, your estate.

If you separate from service (voluntarily or involuntarily) for any other reason
prior to the receipt of Shares pursuant to Section 1, above, you will forfeit
any Shares under this Award, unless otherwise specifically approved by the
Committee, upon the recommendation of the Chief Executive Officer.

4. The Award is not transferable by you during your life.

5. Prior to the issuance of Shares to you, you will not be a shareholder of the
Company and you will have no rights under the Award as a shareholder of the
Company. No dividends or other amount will be allocated or paid to you with
respect to the Award.

6. If there is a stock split, reverse stock split or stock dividend, the number
of Shares specified in Section 1, above will be increased or decreased in direct
proportion to the increase or decrease in the number of Company Shares by reason
of the stock split, reverse stock split or stock dividend.

 

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7. Shares will not be distributed under this Award if the issuance of the Shares
would violate:

 

  (a) any applicable state securities law;

 

  (b) any applicable registration or other requirements under the Securities Act
of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934,
as amended, or the listing requirements of any stock exchange on which the
Company’s Shares are listed; or

 

  (c) any similar legal requirement of any governmental authority regulating the
issuance of shares by the Company.

Further, if a Registration Statement with respect to the Shares to be issued is
not in effect or if counsel for the Company deems it necessary or desirable in
order to avoid possible violation of the Securities Act, the Company may
require, as a condition to its issuance and delivery of certificates for the
Shares, that you deliver to the Company a statement in writing that you
understand the Shares may be “restricted securities” as defined in Rule 144 of
the Securities and Exchange Commission and that any resale, transfer or other
disposition of the Shares will be accomplished only in compliance with Rule 144,
the Securities Act, or other or subsequent applicable Rules and Regulations
thereunder. Further still, the Company may place on the certificates evidencing
the Shares an appropriate legend under Rule 144.

 

8. (a) When the Common Shares are distributable to you pursuant to Section 1,
above, you may be subject to income and other taxes on the value of the Shares
on the date of distribution. The Company will withhold a sufficient number of
Shares that will provide for the federal, state and/or local income tax at the
rates then applicable for supplemental wages, unless otherwise requested by you,
but in no event less than the statutory minimums for tax withholding.

(b) For purposes of determining the number of Common Shares that are to be
withheld to provide for the tax withholding pursuant to Section 8(a), Common
Shares will be valued at the closing price of a Common Share on the New York
Stock Exchange on the date Shares are distributable to you. If the determination
of the tax withholding requires the withholding of a fractional Share, the
Company shall withhold the nearest whole number of Shares needed to pay the tax
withholding, rounded up, and remit to you in cash the amount of the excess after
the withholding taxes have been satisfied.

9. Prior to the distribution of Shares pursuant to Section 1, the Committee has
the right in its sole discretion to reduce the amount of this Award.

10. The Committee has conclusive authority, subject to the express provisions of
the Plan, as in effect from time to time, and this Award, to interpret this
Award and the Plan, and to establish, amend and rescind rules and regulations
for the administration of the Plan. The Committee may correct any defect or
supply any omission or reconcile any inconsistency in this Award in the manner
and to the extent it deems expedient to carry the Plan into effect, and it is
the sole and final judge of such expediency. The Board of Directors of the
Company may from time to time grant to the Committee such further powers and
authority as the Board determines to be necessary or desirable.

 

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11. You must hold any Shares that are distributed to you under this Award at
least until you have met your Share ownership guideline.

12. Notwithstanding any other provision of this Award, your Award will be
subject to all of the provisions of the Plan in force from time to time.

 

THE LUBRIZOL CORPORATION By  

 

  James L. Hambrick   Chairman, President and CEO

 

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EXHIBIT A

Determination of Pro-Rata Common Shares Upon a Change in Control Under Section 2

Pursuant to the terms of Section 2, the number of pro-rata Common Shares upon a
Change in Control will be determined as follows:

 

1. No payout if 12 months has not elapsed since the date of this Award.

 

2. If more than 12 months has elapsed since the date of this Award:

(a) Determine the measurement growth rate for each full year that has elapsed in
the 3-year period as of the date of the Change in Control,

(b) The 3-year cumulative measurement growth will be imputed as either the
1-year measurement growth (if the Change in Controls occurs during the second
year) or the 2-year cumulative measurement growth (if the Change in Control
occurs during the third year).

(c) Payout is then pro-rated based on number of full months that have elapsed
since the date of this Award, payable within 60 days after the Change in
Control.

 

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