Exhibit 10.1

 

CABOT CORPORATION

 

2018 SHORT-TERM INCENTIVE COMPENSATION PLAN

(effective November 8, 2018)

 

     The purpose of this 2018 Short-Term Incentive Compensation Plan (the
“Plan”) is to provide incentives for certain senior executives and other key
employees of Cabot Corporation (the “Company”) to achieve a sustained, high
level of financial and other measures of success for the Company.

 

I. ADMINISTRATION

 

     The Plan will be administered by the Compensation Committee of the Board of
Directors. The Compensation Committee may delegate some or all of its authority
under the Plan to one or more of its members or to such other persons as it may
determine, to the extent permitted by applicable law.  The Compensation
Committee or any of its delegates to the extent of any delegation are referred
to herein as the “Committee.”  The Committee shall have the authority to
interpret the Plan and to otherwise do all things necessary or desirable to
carry out the purposes of the Plan, and any interpretation or decision by the
Committee with regard to the Plan or any Award shall be final and binding on all
persons.

 

II. ELIGIBILITY; PARTICIPANTS

 

     Only executive officers and other key employees of the Company shall be
eligible to participate in the Plan.  The Committee shall select, from among
those eligible, the persons who shall from time to time participate in the Plan
(each, a “Participant”).  Participation by an individual with respect to one
Award under the Plan shall not entitle the individual to participate with
respect to subsequent Awards, if any.

 

III. GRANT OF AWARDS

 

     The term “Award” as used in the Plan means an award opportunity that is
granted to a Participant with respect to a performance period (the “Performance
Period”).  A Participant who is granted an Award shall be entitled to a payment,
if any, under the Award only if all conditions to payment have been satisfied in
accordance with the Plan and the terms of the Award, unless otherwise determined
by the Committee.  Except as otherwise specified by the Committee in connection
with the grant of an Award, the Performance Period applicable to Awards under
the Plan shall be the fiscal year of the Company.  For each Performance Period,
the Committee shall select the Participants, if any, who are to receive Awards
for such Performance Period and, in the case of each Award, shall establish the
following:

 

 

(a)

the Performance Goal or Goals (as defined in Section IV below) applicable to the
Award;

 

 

(b)

the amount or amounts that will be payable (subject to adjustment in accordance
with Section V) if the Performance Goal or Goals are achieved; and

 

 

(c)

such other terms and conditions as the Committee deems appropriate with respect
to the Award.

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IV. PERFORMANCE GOALS

 

     As used in the Plan, the term “Performance Goal” means a measure of
performance as determined by the Committee relating to any or any combination of
the following (measured either absolutely or by reference to a peer group or
select group of companies or an index or indices and determined either on a
consolidated basis or, as the context permits, on a divisional, subsidiary, line
of business, project or geographical basis or in combinations thereof and
subject to such adjustments, if any, as the Committee specifies), which may
include:  sales; revenues; assets; costs; earnings before or after deduction for
all or any portion of interest, taxes, depreciation or amortization, whether or
not on a continuing operations or an aggregate or per share basis; return on
equity, investment, capital or assets;  one or more operating ratios or metrics;
borrowing levels, leverage ratios or credit rating; market share; capital
expenditures; cash flow; productivity measures; one or more working capital
measures; stock price; stockholder return or shareholder value; sales of
particular products or services; customer acquisition or retention; collection
of outstanding accounts or debts; safety, health or environmental affairs
performance; compliance; acquisitions and divestitures (in whole or in part);
joint ventures and strategic alliances; spin-offs, split-ups and the like;
reorganizations; recapitalizations, restructurings, financings (issuance of debt
or equity); or refinancings.  A Performance Goal and any targets with respect
thereto need not be based on an increase, a positive or improved result or
avoidance of loss. An Award may specify more than one Performance Goal and, with
respect to any Performance Goal, may specify levels of achievement at which
different levels of payment may be earned. The Committee may adjust one or more
of the Performance Goals applicable to an Award to reflect events (for example,
the impact of charges for restructurings, discontinued operations, mergers,
acquisitions, other unusual or infrequently occurring items, and the cumulative
effects of tax or accounting changes) occurring during the applicable
Performance Period that affect the applicable Performance Goal or Goals.

 

V. AMOUNT PAYABLE UNDER AWARDS

 

     As soon as practicable after the close of a Performance Period, the
Committee shall determine whether and to what extent, if at all, the Performance
Goal or Goals applicable to each Award granted for the Performance Period have
been satisfied.  The Committee shall then determine the amount payable, if any,
under each Award.  The Committee may, in its sole and absolute discretion and
with or without specifying its reasons for doing so, after determining the
amount that would otherwise be payable under an Award for a Performance Period,
adjust (including to zero) the actual payment, if any, to be made under such
Award. The Committee may exercise the discretion described in the immediately
preceding sentence either in individual cases or in ways that affect more than
one Participant.

 

VI. PAYMENT UNDER AWARDS

 

     Except as otherwise provided in this Section VI, all payments under the
Plan will be made after the right to payment vests and in all events by March 15
of the calendar year following the calendar year in which the right to payment
vests (or, if later, by the 15th day of the third month following the end of the
Company's fiscal year in which the right to payment vests).  For purposes of the
foregoing sentence, a right to payment will be treated as having vested when it
is no longer subject to a substantial risk of forfeiture.  Payments hereunder
are intended to satisfy the short-term deferral exception to Section 409A of the
Internal Revenue Code of 1986, as amended, and the regulations and other
guidance thereunder (“Section 409A”), and shall be construed and administered
accordingly.  Notwithstanding

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the foregoing, (i) if the Award letter or other documentation evidencing the
Award provides a specified and objectively determinable payment date or schedule
that satisfies the requirements of Section 409A, payment under an award may be
made in accordance with such date or schedule, and (ii) the Committee may, but
need not, permit a Participant to defer payment of an Award (pursuant to the
Company’s  Deferred Compensation and Supplemental Retirement Plan or otherwise)
beyond the date that the Award would otherwise be payable, provided that any
such deferral shall be made in accordance with and subject to the applicable
requirements of Section 409A.  Any amount so deferred may be adjusted for
notional interest or other notional earnings on a basis determined by the
Committee.

 

VII. PAYMENT LIMITS

 

     No Participant may be paid more than $5,000,000 in any fiscal year of the
Company under Awards granted under the Plan.  In the case of an Award where
payment is deferred pursuant to Section VI above, the preceding sentence shall
be applied by assuming that payment of the Award was made at the time it would
have been paid absent the deferral.

 

VIII. TAX WITHHOLDING

 

     All payments under the Plan shall be subject to reduction for applicable
tax and other legally or contractually required withholdings.  Neither the
Company nor any of its affiliates, nor the Committee, nor any person acting on
behalf of the Company, any of its affiliates, or the Committee, will be liable
for any adverse tax or other consequences to any Participant or to the estate or
beneficiary of any Participant or to any other holder of an Award that may arise
or otherwise be asserted with respect to the Award, including, but not limited
to, by reason of the application of Section X(d) below or any acceleration of
income or any additional tax (including any interest and penalties) asserted by
reason of the failure of an Award to satisfy the requirements of 409A.

 

IX. AMENDMENT AND TERMINATION

 

     The Committee may amend or terminate the Plan at any time.

 

X. MISCELLANEOUS

 

     (a)Except as otherwise determined by the Committee at the time it grants
the Award, no payment shall be made under an Award unless the Participant is
employed by the Company on the last day of the Performance Period applicable to
the Award.  Notwithstanding the foregoing, if a Participant ceases to be
employed by the Company during a Performance Period by reason of death or
disability or as otherwise determined by the Committee, the Committee may in its
discretion authorize payment of all or a portion of any Awards held by such
Participant to the Participant (or his or her estate) at the time other Awards
are paid in respect of the Performance Period.

 

     (b)No person shall have any claim or right to be granted an Award, nor
shall the selection for participation in the Plan for any Performance Period be
construed as giving a Participant the right to be retained in the employ of the
Company for that Performance Period or for any other period.  Further, no
benefits received by any person from the grant or payment of an Award shall be
considered a component of salary for any purpose, including, without limitation,
any salary-related calculations for holiday, sick pay, termination payments,
overtime or similar payments.

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     (c)The Plan shall be governed and construed by and determined in accordance
with the laws of The Commonwealth of Massachusetts, without giving effect to any
choice of law or conflict of law provision or rule (whether of The Commonwealth
of Massachusetts or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than The Commonwealth of Massachusetts.   By
accepting an Award, each Participant shall be deemed to have submitted
irrevocably and unconditionally to the jurisdiction of the federal and state
courts located within the geographic boundaries of the United States District
Court for the District of Massachusetts for the purpose of any suit, action or
other proceeding arising out of or based on the Plan or any Award and waive any
claim that he or she is not subject personally to the jurisdiction of the
above-named courts.

(d)     The Committee may provide that Awards will be subject to forfeiture,
termination or rescission, and that a Participant will be obligated to return to
the Company payments received with respect to an Award, in connection with (i) a
breach by the Participant of Award terms or the Plan, or any non-competition,
non-solicitation, confidentiality or other covenant or agreement with the
Company or any of its affiliates or (ii) an overpayment to the Participant of
incentive compensation due to inaccurate financial data.  Without limiting the
generality of the foregoing, the Committee may recover Awards and payments under
any Award in accordance with any applicable Company clawback or recoupment
policy, including the Cabot Corporation Recoupment Policy adopted on November 9,
2012 as such policy may be amended and in effect from time to time, or as
otherwise required by applicable law or applicable stock exchange listing
standards, including, without limitation, Section 10D of the Securities Exchange
Act of 1934, as amended.  Each Participant, by accepting (or being deemed to
have accepted) an Award pursuant to the Plan, agrees to return the full amount
required under this Section X(d) at such time and in such manner as the
Committee shall determine in its sole discretion, consistent with applicable
law.

 

     (e)The Plan shall be effective as of the date adopted and shall remain in
effect until terminated by the Committee or the Company’s Board of
Directors.  This Plan supersedes and replaces any performance-based management
incentive plan previously adopted by the Company for awards granted in fiscal
years beginning on or after October 1, 2018.

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