Exhibit 10.2

AWARD DESCRIPTION AND AGREEMENT FOR

PERFORMANCE UNIT AWARD

GRANTED UNDER THE ARCH CHEMICALS, INC.

2009 LONG TERM INCENTIVE PLAN

GRANTED FEBRUARY 18, 2011

 

1. Terms

The terms and conditions of the Performance Units (as defined below) are
contained in the Award Certificate evidencing the grant of such Performance
Units, this Award Agreement (as defined below) and in the Arch Chemicals, Inc.
2009 Long Term Incentive Plan (the “Plan”) and such resolutions, rules and
policies previously or hereinafter adopted by the Compensation Committee of the
Board of Directors of Arch Chemicals, Inc. from time to time; provided that all
such terms and conditions contained in documents other than this Award Agreement
are hereby incorporated in this Award Agreement. In the event of any conflict
between the terms of the Plan and the terms of this Award Agreement (including
any terms incorporated herein), the terms of the Plan shall govern.

 

2. Definitions

As used herein:

“Award Agreement” means this Award Description and Agreement.

“Award Certificate” means the Award Certificate representing the Performance
Units granted to the Participant.

“Measurement Date” means, with respect to a Performance Period, the last day of
the third fiscal year of such Performance Period.

“Non-Section 16 Employee” means any Participant who is not subject to the
requirements under Section 16 of the Securities Exchange Act of 1934, as
amended.

“Participant” means the individual designated as such in the Award Certificate.

“Payment Value” means, with respect to a Performance Unit, the amount, if any,
relating to such Performance Unit that a Participant has earned at any given
time under the Performance Formula applicable to the Performance Period relating
to such Performance Unit.

“Performance Criteria” means, with respect to a Performance Unit, the
performance measure set forth in Exhibit I hereto.

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“Performance Formula” means, with respect to a Performance Unit, the formula as
set forth in the resolutions of the Committee to determine the Payment Value of
such Performance Unit.

“Performance Goal” means, with respect to a particular Performance Unit, the
particular goal or goals established by the Committee with respect to a
particular Performance Criteria for such Performance Unit as set forth in
resolutions of the Committee as adopted from time to time.

“Performance Period” means, with respect to Performance Units, a period of three
fiscal years (beginning with the fiscal year in which such Performance Units are
granted) over which such Performance Units are to be earned in accordance with
the Performance Formula.

“Performance Units” means the Performance Units awarded to the Participant
pursuant to the Award Certificate and Section 6(e) of the Plan, where each such
Performance Unit is denominated as one phantom Share.

“Share” means a share of Company common stock, par value $1.00 per share.

“Valuation Date” means the first business day immediately prior to, as
applicable, a Change of Control or the Participant’s death (or if the Shares are
not traded on such day, the first preceding day on which the Shares are traded).

Other capitalized terms used in this Award Agreement but not defined herein
shall have the meanings specified in the Plan.

 

3. Performance Unit Awards

Performance Units that are awarded to a Participant shall have a Payment Value
during a Performance Period determined on the basis of the performance of the
Company over such Performance Period, in accordance with the applicable
Performance Formula. The Performance Period and Performance Criteria applicable
to Performance Units are set forth in Exhibit I hereto. Except as may be
otherwise set forth in the Plan or herein, no Performance Unit may be earned
prior to the Measurement Date of the applicable Performance Period and then only
to the extent set forth in the applicable Performance Formula.

 

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4. Vesting and Payment

 

(a) Except as otherwise provided in the Plan or Sections 5 or 6 of this Award
Agreement, a Participant’s interest in the Payment Value of Performance Units
awarded to him or her shall vest, if at all, only on the Measurement Date of an
applicable Performance Period, and only to the extent earned and payable at such
time in accordance with the Payment Schedule.

 

(b) The Payment Value of each of the Performance Units at a given time shall be
the amount, if any, relating to such Performance Units with respect to which
payment is required under the Performance Formula. Except as otherwise
determined by the Committee or as provided in the Plan, a percentage of the
vested Performance Units shall be payable to a Participant in cash and the
remaining percentage of the vested Performance Units shall be payable to a
Participant in Shares on a one-for-one basis. Such percentages shall be set
forth in the applicable Award Certificate. Such percentages may range from 0% to
100%.

 

(c) The portion of each Performance Unit not earned by the end of the
Performance Period shall be forfeited.

 

(d) The total amount of the Payment Value due and earned by a Participant on the
applicable Measurement Date shall be paid, to the extent vested, as soon as
practicable after such Measurement Date but no later than March 15th of the
calendar year following the year in which the Measurement Date occurs; provided
that in the case of a Participant’s death during the Performance Period, the
Payment Value shall be at the target level of the Performance Formula, with
respect to all then outstanding Performance Units, shall be paid as soon as
practicable after the Participant’s date of death and in any event not later
than March 15th of the calendar year following the year in which the death
occurs.

 

(e)

With respect to the Payment Value of Performance Units that are to be paid in
cash, except in connection with a payment arising as a result of a Participant’s
death or a Change of Control, the amount of the Performance Units earned under
the Performance Formula will be valued using the average of the “daily fair
market value” for the five trading-day period beginning on the third trading day
following the day the annual earnings press release is issued for the fiscal
year for which such Performance Units were earned and ending with the seventh
trading day following such issuance, where “daily fair market value” for this
purpose means the average of the high and low sales prices of a Share on each
trading day in that five-day period, as reported on the consolidated transaction
reporting system for New York Stock Exchange issues. In connection with a cash
payment arising as a result of a Participant’s death or a Change of Control, the
Performance Units to be paid out will be valued at the average of the high and
low quoted sales prices of a Share as reported on the consolidated transaction
reporting system for New York Stock Exchange issues on the Valuation Date. To
the extent that the Payment Value of Performance Units to be paid out will be
paid in a foreign currency, the conversion from U.S. dollars to the foreign

 

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currency will be based on the exchange rate in effect (i) in the case of a
payment arising for any reason other than a Participant’s death or a Change of
Control, at the close of business on the fifth day of the five trading day
period over which the “daily fair market value” is determined and (ii) in the
case of a payment arising as a result of a Participant’s death or a Change of
Control, the exchange rate in effect at the close of business on the Valuation
Date.

 

(f) With respect to Participants who are “covered employees” within the meaning
of Section 162(m) of the Code, the payment of the Payment Value of the
Performance Units held by such Participants is expressly conditioned, to the
extent required under Section 162(m) of the Code, upon certification by the
Committee that the performance goal(s) and other material terms of the
Performance Units were satisfied in accordance with the terms of the Award
Certificate, this Award Agreement and the Plan, and that the payout is
consistent therewith.

 

5. Termination of Employment

 

(a) In the event of a Participant’s Termination of Employment during the
Performance Period by the Company for cause (determined based on the Company’s
policies and procedures in effect at the time of such Termination of
Employment), or due to any reason other than the Participant’s death or
Disability, all outstanding Performance Units not yet earned and payable under
the Performance Formula relating to such Performance Period shall be forfeited;
provided that in the case of any such Termination of Employment other than by
the Company for cause, the Committee (or, in the case of a Participant who is a
Non-Section 16 Employee on the date of his or her Termination of Employment, the
Company’s Chief Executive Officer or Vice President of Human Resources) may
determine, in its or such officer’s (as applicable) sole discretion, that there
shall become vested the number of Performance Units determined by prorating
(based on the number of days elapsed from the beginning of the Performance
Period applicable to the Performance Units up to and including the date of the
Termination of Employment) the number of Performance Units that are determined
on the Measurement Date in accordance with the Performance Formula to have been
earned and such Performance Units shall be paid out to the Participant in
accordance with Section 4 of this Award Agreement.

 

(b) In the event of a Participant’s Termination of Employment during the
Performance Period by reason of death, all Performance Units that are not yet
earned and payable as of the date of the Participant’s death, shall become fully
vested and nonforfeitable at the target level of the Performance Formula, and
shall be paid out to the Participant in accordance with Section 4 of this Award
Agreement.

 

(c)

In the event of a Participant’s Termination of Employment during the Performance
Period by reason of Disability, the Performance Units that shall become vested
and nonforfeitable to the Participant shall be determined by

 

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prorating (based on the number of days elapsed from the beginning of the
Performance Period applicable to the Performance Units up to and including the
date of the Termination of Employment) the number of Performance Units that are
determined on the Measurement Date in accordance with the Performance Formula to
have been earned and such Performance Units shall be paid out to the Participant
in accordance with Section 4 of this Award Agreement.

 

6. Change of Control

Unless the Committee or the Board determines otherwise, upon a Change of Control
during the Performance Period, Performance Units that are not yet vested shall
become vested and deemed earned in full at the target level of the Performance
Formula, and shall be paid to the Participant in cash as soon as practicable but
no later than the tenth (10th) business day after the Change of Control, in each
case, without regard to actual Performance Criteria or Performance Goals and
notwithstanding that the applicable Performance Period shall not have been
completed.

 

7. Tax Withholding

The delivery of Shares or cash pursuant to this Award Agreement is conditioned
on satisfaction of any applicable withholding taxes in accordance with
Section 11(d) of the Plan. The Company will withhold from the payout of the
Performance Units the amount necessary to satisfy all minimum statutory
withholding tax requirements. The Company shall be authorized to take such
actions as the Company may deem necessary (including, without limitation, in
accordance with applicable law, withholding amounts from any compensation or
other amounts owing from the Company to the Participant) to satisfy all
obligations for the payment of such taxes. Notwithstanding anything herein to
the contrary, applicable withholding taxes shall first be satisfied from any
cash payment made pursuant to this Award Agreement and, to the extent such cash
payments are insufficient to satisfy such withholding taxes, the Company shall
use Shares to be delivered hereunder to satisfy any remaining withholding
requirements.

 

8. Non-Transferability

Unless otherwise provided by the Committee in its discretion, Performance Units
may not be sold, assigned, alienated, transferred, pledged, attached or
otherwise encumbered by any Participant, otherwise than by will or by the laws
of descent and distribution, and any such purported assignment, alienation,
pledge, attachment, sale, transfer or encumbrance shall be void and
unenforceable against the Company, provided that the designation of a
beneficiary shall not constitute an assignment, alienation, pledge, attachment,
sale, transfer or encumbrance.

 

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9. Dividend Equivalents

In the event Performance Units payout for any reason, an additional amount (the
“Dividend Equivalent Amount”) shall be paid in cash to the Participant at the
time of payout of the Performance Units. The Dividend Equivalent Amount shall be
equal to the aggregate amount of cash dividends that would have been paid on the
units actually being paid out in the Payment Value (whether in cash or shares)
had such units been issued as actual Shares at the start of the Performance
Period through the earlier of the (i) date the units are paid out and (ii) the
end of the Performance Period (subject to Paragraph 7 hereof). No Dividend
Equivalent Payment shall be made with respect to any unit or units forfeited
(whether by proration or otherwise). Performance Units carry no voting rights
nor shall the holder thereof be entitled to dividends or other rights enjoyed by
shareholders except as otherwise provided in this Section 9. The obligation
hereunder shall be an unfunded and unsecured obligation of the Company. No
interest shall accrue on any Dividend Equivalent Amount.

 

10. Fractional Shares

In the event a payout in the form of Shares would entitle a Participant to a
fractional share of Company’s common stock, such fractional share shall be
rounded up to the next whole number of Shares and the Performance Units to be
paid out in cash, if any, shall be reduced by the same amount of the fractional
increase to the payout in Shares.

 

11. Miscellaneous

 

(a) By acceptance of the award of Performance Units, each Participant agrees
that such award is special compensation, and that any amount paid under the
Award Agreement will not affect:

 

  (i) the amount of any pension under any pension or retirement plan in which he
or she participates as an employee of the Company,

 

  (ii) the amount of coverage under any group life insurance plan in which he or
she participates as an employee of the Company,

 

  (iii) the benefits under any other benefit plan of any kind heretofore or
hereafter in effect, under which the availability or amount of benefits is
related to compensation.

 

(b) The Participant hereby agrees and acknowledges that he has read and
understood the covenants (including the noncompetition covenant) set forth under
Section 10 of the Plan, and agreed to be bound by such covenants.

 

(c) The Company may affix to certificates for Shares (if any) issued pursuant to
this Award Agreement any legend that the Committee determines to be necessary or
advisable (including to reflect any restrictions to which any Participant may be
subject under any applicable securities laws). The Company may advise the
transfer agent to place a stop order against any legended Shares.

 

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(d) The terms and conditions of this Award Agreement shall be binding upon and
shall inure to the benefit of the Company and its successors and assigns.

 

(e) The Committee shall have full and plenary discretion with respect to any
actions to be taken or determinations to be made in connection with this Award
Agreement, and its determinations shall be final, binding and conclusive.

 

(f) The Committee may waive any conditions or rights under, amend any terms of,
or alter, suspend, discontinue, cancel or terminate this Award Agreement
prospectively or retroactively, except to the extent that any such action would
cause the Performance Units to cease to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code; provided,
however, that, except as set forth in Section 11(e) of the Plan, any such
waiver, amendment, alteration, suspension, discontinuance, cancellation or
termination that would materially and adversely impair a Participant’s vested
rights under this Award Agreement shall not to that extent be effective without
the Participant’s consent (it being understood, notwithstanding the foregoing
proviso, that this Award Agreement and the Performance Units shall be subject to
the provisions of Section 7(c) of the Plan).

 

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Exhibit I

 

Performance Period:    Ending on December 31, 2013 Performance Criteria:   
Return on Equity (“ROE”) for the fiscal year ending at a Measurement Date.   
“ROE” shall mean for a fiscal year the consolidated net income of the Company
before the after tax effect of any extraordinary expenses or losses, losses on
sale of businesses, impairment charges, special charges or extraordinary gains,
gains on the sale of businesses or sales not in the ordinary course of business
and any cumulative effect of any change in accounting principle (at the end of
such fiscal year), divided by average shareholders’ equity (the average
calculated using shareholders’ equity at the beginning and end of such fiscal
year excluding the impact on ending shareholders’ equity of extraordinary
expenses or losses, losses on sale of businesses, impairment charges, special
charges or extraordinary gains, gains on sale of businesses or sales not in the
ordinary course of business).