Exhibit 10.2

 

ALBEMARLE CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

 

As Amended and Restated January 1, 2005

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TABLE OF CONTENTS

 

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ARTICLE I

 

    PURPOSE AND EFFECTIVE DATE

   1

ARTICLE II

 

    DEFINITIONS

   1

2.1

 

Account

   1

2.2

 

Administrative Committee

   2

2.3

 

Beneficiary

   2

2.4

 

Board

   2

2.5

 

Company

   2

2.6

 

Deferral Election

   2

2.7

 

Disability

   2

2.8

 

Elected Deferred Compensation

   3

2.9

 

Employer

   3

2.10

 

Financial Hardship

   3

2.11

 

Hardship Distribution

   3

2.12

 

Participant

   3

2.13

 

Participation Agreement

   3

2.14

 

Plan

   4

2.15

 

Plan Year

   4

2.16

 

Retirement

   4

2.17

 

Retirement/Termination Account

   4

2.18

 

Scheduled Withdrawal

   4

2.19

 

Scheduled Withdrawal Account

   4

2.20

 

Settlement Date

   4

2.21

 

Small Account

   5

2.22

 

Valuation Date

   5

ARTICLE III

 

    PARTICIPATION, DEFERRALS AND ADDITIONAL BENEFITS

   5

3.1

 

Eligibility and Participation

   5

3.2

 

Basic Forms of Deferral

   6

3.3

 

Commencement and Duration of Deferral Election

   6

3.4

 

Modification of Deferral Elections

   7

3.5

 

Supplemental Savings Benefit

   7

3.6

 

Supplemental Pension Benefit

   8

 

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TABLE OF CONTENTS

(continued)

 

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3.7

  

Short Service Credit

   8

3.8

  

Pension Credit for Former Akzo Nobel Employees (acquisition effective August 1,
2004)

   9

ARTICLE IV

  

    COMPENSATION ACCOUNTS

   10

4.1

  

Accounts

   10

4.2

  

Crediting of Deferrals

   10

4.3

  

Retirement/Termination Account

   11

4.4

  

Scheduled Withdrawal Account

   11

4.5

  

Vesting of Accounts

   11

4.6

  

Statement of Accounts

   11

4.7

  

Valuation of Accounts

   12

ARTICLE V

  

    INVESTMENT AND EARNINGS

   12

5.1

  

Plan Investments

   12

5.2

  

Crediting Investment Gains and Losses

   12

ARTICLE VI

  

    PLAN BENEFITS

   13

6.1

  

Retirement Benefit

   13

6.2

  

Termination Benefit

   14

6.3

  

Death Benefit

   14

6.4

  

Disability Benefit

   15

6.5

  

Small Account

   15

6.6

  

Scheduled Withdrawal

   15

6.7

  

Hardship Distribution

   16

6.8

  

Valuation and Settlement

   17

6.9

  

Withholding and Payroll Taxes

   17

6.10

  

Payment to Guardian

   18

6.11

  

Change of Payment Form or Commencement Date

   18

ARTICLE VII

  

    DESIGNATION

   19

7.1

  

Beneficiary Designation

   19

7.2

  

Changing Beneficiary

   19

7.3

  

No Beneficiary Designation

   19

7.4

  

Effect of Payment

   19

 

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TABLE OF CONTENTS

(continued)

 

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ARTICLE VIII

  

    FORFEITURES TO COMPANY

   20

8.1

  

Distribution of Participant’s Interest When Company is Unable to Locate
Distributees

   20

ARTICLE IX

  

    ADMINISTRATION

   20

9.1

  

Committee; Duties

   20

9.2

  

Agents

   21

9.3

  

Binding Effect of Decisions

   21

9.4

  

Indemnity of Committee

   21

ARTICLE X

  

    CLAIMS PROCEDURE

   21

10.1

  

Claim

   21

10.2

  

Denial of Claim

   21

10.3

  

Review of Claim

   22

10.4

  

Final Decision

   22

ARTICLE XI

  

    AMENDMENT AND TERMINATION OF PLAN

   22

11.1

  

Amendment

   22

11.2

  

Company’s Right to Terminate

   23

ARTICLE XII

  

    MISCELLANEOUS

   24

12.1

  

Unfunded Plan/Compliance with Code

   24

12.2

  

Unsecured General Creditor

   25

12.3

  

Trust Fund

   25

12.4

  

Nonassignability

   25

12.5

  

Not a Contract of Employment

   26

12.6

  

Protective Provisions

   26

12.7

  

Governing Law

   26

12.8

  

Validity

   26

12.9

  

Gender

   26

12.10

  

Notice

   27

12.11

  

Successors

   27

 

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ALBEMARLE CORPORATION

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

ARTICLE I

 

PURPOSE AND EFFECTIVE DATE

 

The purpose of this Executive Deferred Compensation Plan is to provide current
tax planning opportunities as well as supplemental funds upon the retirement or
death of certain employees of Employer. It is intended that the Plan will aid in
attracting and retaining employees of exceptional ability by providing them with
these benefits. This amendment and restatement of the Plan shall be effective as
of January 1, 2005.

 

ARTICLE II

 

DEFINITIONS

 

For the purposes of this Plan, the following terms shall have the meanings
indicated, unless the content clearly indicates otherwise:

 

2.1 Account

 

“Account” means the interest of a Participant in the Plan as represented by the
hypothetical bookkeeping entries kept by the Employer for each Participant. Each
Participant’s interest may be divided into one or more separate Accounts which
reflect, not only contributions into the Plan, but also gains and losses,
allocated thereto, as well as any distributions or other withdrawals. The value
of these Accounts shall be determined as of the Valuation Date. The existence of
an Account or bookkeeping entries for a Participant (or his Beneficiary) does
not create, suggest or imply that a Participant, Beneficiary or other person
claiming through them under this Plan has a beneficial interest in any asset of
the Employer.

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2.2 Administrative Committee

 

“Administrative Committee” means the Employee Relations Committee of the Company
or any successor committee.

 

2.3 Beneficiary

 

“Beneficiary” means the person, persons or entity (including, without
limitation, any trustee) last designated by a Participant to receive the
benefits specified hereunder, in the event of the Participant’s death.

 

2.4 Board

 

“Board” means the Board of Directors of the Company.

 

2.5 Company

 

“Company” means Albemarle Corporation or any successor to the business thereof.

 

2.6 Deferral Election

 

“Deferral Election” means a base salary and/or bonus deferral commitment made by
a Participant to establish Retirement/Termination Accounts and/or a Scheduled
Withdrawal Accounts pursuant to Article III and Sections 4.3 and 4.4 for which a
Participation Agreement has been submitted by the Participant to the
Administrative Committee.

 

2.7 Disability

 

“Disability” means unable to engage in any substantial gainful activity because
of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted, or can be expected to last, for
a continuous period of twelve (12) months or longer.

 

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2.8 Elected Deferred Compensation

 

“Elected Deferred Compensation” means the amount of base salary and/or bonus
that a Participant elects to defer pursuant to a Deferral Election for a Plan
Year.

 

2.9 Employer

 

“Employer” means the Company and any affiliated or subsidiary corporations
designated by the Board.

 

2.10 Financial Hardship

 

“Financial Hardship” means an immediate and substantial financial need of the
Participant or Beneficiary, resulting from an illness or accident of the
Participant or Beneficiary (or their spouse or dependent), loss of the
Participant’s or Beneficiary’s property due to casualty, or other similar
extraordinary and unforeseeable circumstance arising as a result of events
beyond the control of the Participant or Beneficiary. Whether a “financial
hardship” exists shall be determined by the Administrative Committee on the
basis of written information supplied by the Participant or Beneficiary in
accordance with such standards as are, from time to time, established by the
Administrative Committee or applicable law.

 

2.11 Hardship Distribution

 

“Hardship Distribution” means a distribution to a Participant or a Beneficiary
pursuant to Section 6.7.

 

2.12 Participant

 

“Participant” means any individual who is participating in this Plan as provided
in Article III.

 

2.13 Participation Agreement

 

“Participation Agreement” means the written agreement to defer salary and/or
bonus award submitted by a Participant to the Administrative Committee or its
delegates.

 

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2.14 Plan

 

“Plan” means this Albemarle Corporation Executive Deferred Compensation Plan as
set forth in this document and as the same may be amended, administered or
interpreted from time to time.

 

2.15 Plan Year

 

“Plan Year” means each calendar year beginning on January 1 and ending on
December 31.

 

2.16 Retirement

 

“Retirement” means a Participant’s voluntary termination of employment with
Employer, other than by reason of death, on or after the Participant’s
attainment of sixty (60) and ten (10) years of service.

 

2.17 Retirement/Termination Account

 

“Retirement/Termination Account” means an Account established pursuant to
Section 4.3 to provide for distribution of benefits following Retirement.

 

2.18 Scheduled Withdrawal

 

“Scheduled Withdrawal” means a distribution prior to termination of employment
pursuant to Section 6.6.

 

2.19 Scheduled Withdrawal Account

 

“Scheduled Withdrawal Account” means an Account which may be established
pursuant to Section 4.4 to provide for distribution of benefits on a date
selected by the Participant.

 

2.20 Settlement Date

 

“Settlement Date” means the date on which a lump-sum payment shall be made or
the date on which installment payments shall commence.

 

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2.21 Small Account

 

“Small Account” means a lump-sum payment pursuant to Section 6.5.

 

2.22 Valuation Date

 

“Valuation Date” means the last day of any calendar month, or such other dates
as the Administrative Committee may determine, in its sole discretion, which may
be either more or less frequent for the valuation of Participants’ Accounts.

 

ARTICLE III

 

PARTICIPATION, DEFERRALS AND ADDITIONAL BENEFITS

 

3.1 Eligibility and Participation

 

(a) Eligibility. All salaried employees of the Company or an Employer employed
in the U.S. who, as of their date of enrollment, receive an annual base salary
of at least $120,000 shall be eligible to participate in the Plan. For Plan
Years after 2004, the $120,000 eligibility level shall be increased by $3,000
each year; provided, however, that the Administrative Committee shall have the
discretion to change the increase amount from time to time. In circumstances
where an individual could become ineligible solely because of such increase in
the eligible compensation level, the Administrative Committee shall have the
discretion to determine whether to allow such individual to continue
participation notwithstanding having fallen below the required compensation
level.

 

(b) Participation in Voluntary Income Deferral. An individual who satisfies the
requirements of (a), above, may elect to make voluntary compensation deferrals
into the Plan by submitting a Participation Agreement to the Administrative
Committee pursuant to procedures adopted by the Administrative Committee.

 

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3.2 Basic Forms of Deferral

 

A Participant may file a Participation Agreement to defer up to fifty percent
(50%) of his base salary and/or one hundred percent (100%) (net of FICA and
Medicare taxes withheld, if any) of each bonus paid in a Plan Year. The amount
to be deferred shall be stated as a percentage of base salary and as a
percentage of each source of deferral. With respect to the deferral of bonuses,
for bonuses earned in 2005 or later, such deferral election must be made before
the start of the year in which the bonus is earned.

 

3.3 Commencement and Duration of Deferral Election

 

(a) Each Deferral Election shall be effective until the Participant changes it
by filing a new Participation Agreement with the Administrative Committee. The
Participant’s current Deferral Election shall continue to apply for succeeding
Plan Years, unless changed by the Participant prior to the start of the
following Plan Year, in accordance with Section 3.4 below. A Deferral Election
shall commence as of the first day of the next Plan Year following the date a
Participation Agreement for such Deferral Election is filed with the
Administrative Committee; provided, however, that a newly hired eligible
Participant may make such election at any time within the first 30 days of
employment, with such election to be with respect to base salary earned in
payroll periods after that election. Notwithstanding the foregoing, the deferral
of base salary shall not take effect until the Participant has contributed the
maximum Pre-Tax Contribution to the Albemarle Corporation Savings Plan (the
“Savings Plan”) for such year. The Participation Agreement shall specify the
portion of the Elected Deferred Compensation to be credited to each
Retirement/Termination Account and to each Scheduled Withdrawal Account.

 

6

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(b) A Deferral Election shall terminate when a Participant terminates employment
for any reason or elects a Hardship Withdrawal.

 

(c) A Deferral Election for a particular Scheduled Withdrawal Account shall
terminate at the end of the Plan Year preceding the Plan Year in which the
Participant has elected for distribution of such Account.

 

3.4 Modification of Deferral Elections

 

Each Deferral Election shall remain in effect until it is changed by the
Participant. A Participant shall not have the right to change, suspend or resume
a Deferral Election which is in effect for the current Plan Year.
Notwithstanding the foregoing, a Participant may change, suspend or resume his
Deferral Election for any succeeding Plan Year in accordance with rules
established by the Administrative Committee, provided that the modification
applies only to a salary and/or bonus payment that is not yet earned.
Furthermore, in light of the Plan revisions which are effective as of April 1,
2004, each Participant shall be allowed to change his Deferral Election with
respect to base salary for the 2004 Plan Year earned after the date of such
change, in accordance with procedures determined by the Administrative
Committee.

 

3.5 Supplemental Savings Benefit

 

(a) A benefit is established for each Participant which is initially credited
with the number of phantom shares of Albemarle Corporation Common Stock
previously credited to the bookkeeping account maintained under
Section 3.01.00(b)(ii) under the Albemarle Corporation Supplemental Executive
Retirement Plan as in force on December 31, 2004, liability for which benefit is
assumed by this Plan as of such date. The benefit shall be payable upon the
later of the Participant’s receipt of a lump sum payment under the Savings Plan
and the month following the Participant’s last month of employment.

 

7

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(b) In addition to any benefit a Participant receives pursuant to (a), above, a
Participant shall receive a benefit each year of a number of phantom shares of
Albemarle Corporation Common Stock equal in value to the Matching Contribution
which would have been available under the terms of the Savings Plan if not for
(i) the limitations imposed by Code Sections 401(a)(17) or 415, or (ii) base
salary deferrals into this Plan. Amounts credited pursuant to this
Section 3.5(b) shall be credited to the Participant’s Retirement/Termination
Account A.

 

3.6 Supplemental Pension Benefit

 

(a) This credit is available only to those Participants who are eligible to
receive Pension Contributions under the Savings Plan. For each Plan Year in
which such Participant is eligible to participate in the Plan, the Participant
will receive a credit equal to five percent (5%) of base salary in excess of the
amounts which can be recognized by the Savings Plan because of (i) the
limitations in Internal Revenue Code section 401(a)(17) or (ii) base salary
deferrals into this Plan; plus five percent (5%) of the bonus paid in that Plan
Year. For the purpose of clause (i), base salary shall be determined without
reduction for any amounts contributed under Code sections 402(g) or 125. This
credit shall occur at the time the base salary or bonus, as the case may be, is
paid.

 

(b) Amounts credited pursuant to this Section 3.6 shall be credited to the
Participant’s Retirement/Termination Account A.

 

3.7 Short Service Credit

 

(a) A Participant shall be eligible for the credit under this Section 3.7 if
such Participant is recommended for such eligibility by the Administrative
Committee and approved by the Executive Compensation Committee of the Board.

 

8

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(b) A Participant who meets the eligibility requirements of 3.7(a), above, will
receive an additional credit under the Plan for each Plan Year equal to a
percentage of base salary plus target bonus. The percentage shall be determined
by the Executive Compensation Committee upon recommendation from the
Administrative Committee.

 

(c) Amounts credited pursuant to this Section 3.7 shall be credited to the
Participant’s Retirement/Termination Account A.

 

(d) A Participant who terminates employment before completing at least five
years of service with the Company or an Employer (measured from date of hire to
date of termination), shall forfeit all amounts previously credited under this
Section 3.7, plus all earnings thereon.

 

3.8 Pension Credit for Former Akzo Nobel Employees (acquisition effective
August 1, 2004)

 

(a) A Participant shall be eligible for the credit under this Section 3.8 if
such Participant (a) becomes an employee of the Company or an Employer as a
result of the Company’s acquisition of the Catalysts business of Akzo Nobel and
(b) is recommended for such eligibility by the Administrative Committee and
approved by the Executive Compensation Committee of the Board.

 

(b) A Participant who meets the eligibility requirements of Section 3.8(a),
above, will receive an additional credit under the Plan as of his date of
employment by the Company or an Employer in an amount determined by the
Administrative Committee and documented in the records of such Committee.

 

(c) Amounts credited pursuant to this Section 3.8 shall be credited to the
Participant’s Retirement/Termination Account A.

 

(d) A Participant who terminates employment before completing at least five
years of service with the Company or an Employer (measured from date of hire to
date of

 

9

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termination), shall forfeit the entire benefit provided under this Section 3.8.
Notwithstanding the foregoing, if a Participant’s employment is terminated as
the result of death or disability, the Participants shall be fully vested in the
benefit provided under this Section 3.8. In addition, if a Participant with less
than five years of employment with the Company or an Employer terminates
employment after attaining age 60, and after attaining a total of at least ten
years of combined employment with the Company, an Employer or Akzo Nobel, such
Participant will vest in a fraction of his benefit under this Section 3.8, where
the numerator of such fraction is his completed total years of employment with
the Company or an Employer and the denominator of such fraction is five.

 

ARTICLE IV

 

COMPENSATION ACCOUNTS

 

4.1 Accounts

 

For recordkeeping purposes only, Employer shall maintain up to five (5) separate
Accounts for each Participant. The Accounts shall be known as the
Retirement/Termination Account A, Retirement/Termination Account B and up to
three (3) separate Scheduled Withdrawal Accounts.

 

4.2 Crediting of Deferrals

 

Beginning January 1 of each Plan Year, a Participant’s Elected Deferred
Compensation which consists of deferred base salary shall be credited to the
Participant’s Accounts within three (3) business days after the date on which
the corresponding nondeferred portion of the Participant’s base salary is paid
or would have been paid but for the Deferral Election. Beginning January 1 of
each Plan Year, a Participant’s Elected Deferred Compensation which consists of
deferred bonus shall be credited to the Participant’s Accounts within three
(3) business days after the date on which the bonus is paid or would have been
paid but for the Deferral Election.

 

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4.3 Retirement/Termination Account

 

A Participant may have up to two Retirement/Termination Accounts under which
such Participant will receive retirement benefits following Retirement. The two
Retirement/Termination Accounts shall be designated as Retirement/Termination
Account A and Retirement/Termination Account B, and shall be payable as
described in section 6.1. With respect to a Participant who is a Key Employee as
defined in Code section 416(i), benefits from such Accounts shall commence six
(6) months after Retirement.

 

4.4 Scheduled Withdrawal Account

 

A Participant may establish up to three (3) Scheduled Withdrawal Accounts by
filing a Participation Agreement to defer base salary and/or bonus into the
applicable Scheduled Withdrawal Accounts and designating the applicable
percentages allocated to each Account. No deferrals may be made into the
Participant’s Scheduled Withdrawal Accounts during the Plan Year in which the
Participant is receiving, or will receive, a Scheduled Withdrawal from any such
Account.

 

4.5 Vesting of Accounts

 

Except as otherwise expressly provided, each Participant shall be one hundred
percent (100%) vested at all times in the amounts credited to such Participant
under the Plan.

 

4.6 Statement of Accounts

 

From time to time, the Administrative Committee shall give to each Participant a
benefit statement setting forth the balance of the Accounts maintained for the
Participant.

 

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4.7 Valuation of Accounts

 

A Participant’s Account as of each Valuation Date shall consist of the balance
of the Participant’s Account as of the immediately preceding Valuation Date,
plus the Participant’s Elected Deferred Compensation, if any, as such Account
may be adjusted for investment gains and losses and minus any distributions made
from such Account since the immediately preceding Valuation Date.

 

ARTICLE V

 

INVESTMENT AND EARNINGS

 

5.1 Plan Investments

 

A Participant shall complete a portfolio allocation form electing from among a
series of hypothetical investment options designated by the Administrative
Committee into which the Participant’s Elected Deferred Compensation shall be
credited. The performance of the Participant’s Account(s) shall be measured
based upon the investment options selected. The Participant’s Elected Deferred
Compensation shall be credited with such hypothetical crediting rates calculated
after the investment managers’ expenses have been deducted. Investment options
may be changed monthly by executing a form available from the Administrative
Committee, which form must be returned as indicated by the Administrative
Committee at least five (5) days before the beginning of the month in which it
is to be effective. The revised or changed investment allocations are effective
the first business day of the following month, after receipt of a timely filed
investment change form.

 

5.2 Crediting Investment Gains and Losses

 

Participant Accounts shall be credited daily with investment gains and losses as
if Accounts were invested in one or more of the Plan’s investment options, as
selected by the Participant, less administrative charges applied against the
particular investment options.

 

12

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Accounts shall be credited with investment gains and losses through the
applicable Valuation Date with respect to a particular Settlement Date (or
Dates) in anticipation of, and in connection with, a Plan distribution.

 

ARTICLE VI

 

PLAN BENEFITS

 

6.1 Retirement Benefit

 

(a) Amount. If a Participant terminates employment due to Retirement, the
Employer shall pay to the Participant a benefit equal to the balance in the
Participant’s Retirement/Termination Accounts.

 

(b) Form. The Participant’s Retirement/Termination Accounts shall be paid as
follows:

 

(i) Retirement/Termination Account A shall be paid as a single lump-sum payment;
and

 

(ii) Retirement/Termination Account B shall be paid as installment payments,
which shall be annual payments for a period of up to fifteen (15) years, as
elected by the Participant at the time of the deferral, commencing on the first
day of the Plan Year next following the Participant’s Retirement date. The first
payment shall equal the Participant’s account balance as of the most recent
Valuation Date divided by the number of installments elected by the Participant.
The amount of each succeeding payment shall be redetermined each Plan Year as of
January 1 based on the remaining Account balance as of the most recent Valuation
Date divided by the remaining number of installment payments. The Account shall
be credited with earnings, gains and losses pursuant to Article V. If the
Participant has no valid election on file, payments from Retirement/Termination
Account B shall be made in annual installments over a period of ten (10) years.

 

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(c) Timing for Key Employees. With respect to a Participant who is a Key
Employee as defined in Code section 416(i), benefits from such Account shall
commence six (6) months after such termination of employment due to Retirement.

 

6.2 Termination Benefit

 

(a) Amount. If a Participant terminates employment for any reason other than
Retirement, death or disability, the Employer shall pay to the Participant a
benefit equal to the balance in the Participant’s Retirement/Termination
Accounts. If a Participant transfers his employment within the Company to a
jurisdiction so that the Participant will no longer be subject to Federal income
taxation in the United States, the Participant shall be deemed to have
terminated employment and the Employer shall pay to the Participant a benefit
equal to the balance in the Participant’s Retirement/Termination Accounts.

 

(b) Form. The Employer shall pay to the Participant the benefit due under this
Section 6.2 in a single lump sum.

 

(c) Timing for Key Employees. With respect to a Participant who is a Key
Employee as defined in Code section 416(i), benefits from such Account shall
commence six (6) months after such termination of employment.

 

6.3 Death Benefit

 

(a) Preretirement Death Benefit. If a Participant dies while employed by
Employer, the balances in the Retirement/Termination Accounts and Scheduled
Withdrawal Accounts, if any, shall be paid as soon as practicable to the
Participant’s Beneficiary in the form elected by the Participant with respect to
his Retirement/Termination Accounts.

 

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The Beneficiary shall be permitted to make investment elections and earnings
shall continue to be credited pursuant to Article V after the Participant’s
death.

 

(b) Postretirement Death Benefit. If a Participant dies following the
commencement of Retirement payments, the Employer shall pay to the Participant’s
Beneficiary any remaining installment payments that would have been paid to the
Participant had the Participant survived.

 

6.4 Disability Benefit

 

(a) Amount. If a Participant terminates employment due to Disability, the
Employer shall pay to the Participant a benefit equal to the balance in the
Participant’s Retirement/Termination Accounts.

 

(b) Form. A Participant may elect at the time of deferral the form in which
benefits will be paid pursuant to Section 6.1(b) of the Plan in the event of a
termination of employment due to Disability.

 

6.5 Small Account

 

If, on the date payments are to commence under Sections 6.1, 6.3 or 6.4 of the
Plan, the Participant’s Account balance is less than fifty thousand dollars
($50,000), such Account shall be paid in a single lump-sum payment to the
Participant or Beneficiary, as applicable.

 

6.6 Scheduled Withdrawal

 

(a) Form and Commencement. The entire balance of the applicable Scheduled
Withdrawal Account shall be paid in either a single lump sum or in installment
payments on the date or dates elected by the Participant at the time the
applicable Account was established. In no event shall the payment date be prior
to the completion of three (3) Plan Years from the date the applicable Account
is established. A Deferral

 

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Election shall not be made with respect to the applicable Scheduled Withdrawal
Account for the Plan Year in which a payment is made from such Account to the
Participant. The Participant may elect to receive distributions from a Scheduled
Withdrawal Account in the form of a single lump sum or in annual installments
over a period not to exceed four (4) years. A distribution in the form of annual
installments shall be paid in the method described in Section 6.1(b)(ii).

 

(b) Termination of Employment Prior to Scheduled Withdrawal. If a Participant
with a balance in a Scheduled Withdrawal Account(s) terminates his employment
with Employer due to Retirement or Disability, such Scheduled Withdrawal
Account(s) shall be paid to the Participant pursuant to subparagraph (a) above.
Notwithstanding the foregoing, in the event the Participant terminates his
employment for a reason other than due to Retirement or Disability, the Employer
shall pay to the Participant the benefit due under this Section 6.6 in a single
lump sum. If a Participant transfers his employment within the Company to a
jurisdiction so that the Participant will no longer be subject to Federal income
taxation in the United States, the Participant shall be deemed to have
terminated employment and the Employer shall pay to the Participant the benefit
due under this Section 6.6 in a single lump sum.

 

6.7 Hardship Distribution

 

Upon finding that a Participant or Beneficiary has suffered a Financial
Hardship, the Administrative Committee may, in its sole discretion, make
distributions from an Account prior to the time specified for payment of
benefits under the Plan. The Hardship Distribution shall be made ratably from
all Accounts. The amount of such distributions shall be limited to the amount
reasonably necessary to meet the Participant’s or Beneficiary’s requirements
during the Financial Hardship. Any amounts paid to a Participant pursuant to
this Section 6.7 shall be treated as distributions from the Participant’s
Accounts.

 

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Following a complete distribution of the entire Account balance, a Participant
and his Beneficiary shall be entitled to no further benefits under the Plan with
respect to that Account.

 

Applications for Hardship Distributions and determinations thereon by the
Administrative Committee shall be in writing, and a Participant or Beneficiary
may be required to furnish written proof of the Financial Hardship.

 

Upon receiving a Hardship Distribution, a Participant’s Deferral Elections shall
cease and such Participant shall not participate in the Plan until the next
enrollment period following one (1) full year from the date of the Hardship
Distribution.

 

6.8 Valuation and Settlement

 

With respect to a lump-sum payment, the Settlement Date for an Account shall be
no more than thirty (30) days after the Valuation Date following such event for
which the Participant or Beneficiary becomes entitled to payments on account of
termination of employment. With respect to benefits that will be paid in
installments pursuant to Section 6.1(b)(ii), the Settlement Date shall be the
January 1 next following the Participant’s Retirement date.

 

The Settlement Date for a Hardship Distribution shall be no more than sixty
(60) days after the last day of the month in which the Administrative Committee
delivers a finding that the Participant or Beneficiary has suffered a Financial
Hardship.

 

6.9 Withholding and Payroll Taxes

 

The Employer shall withhold from Plan payments made hereunder any taxes required
to be withheld from such payments under federal, state or local law. Any
withholding of

 

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taxes or other amounts with respect to contributions through Elected Deferred
Compensation or otherwise, that is required by federal, state or local law,
including but not limited to FICA taxes (including both OASDI and Medicare
taxes), shall be withheld from the Participant’s nondeferred base salary and/or
bonus to the maximum extent possible with any excess being withheld from the
Participant’s Elected Deferred Compensation. Each Participant shall bear the
ultimate responsibility for payment of all taxes owed under this Plan.

 

6.10 Payment to Guardian

 

If a benefit is payable to a minor or a person declared incompetent or to a
person incapable of handling the disposition of his property, the Administrative
Committee may direct payment of such benefit to the guardian, conservator, legal
representative or person having the care and custody of such minor, incompetent
or incapacitated person. The Administrative Committee may require proof of
minority, incompetency, incapacity, conservatorship or guardianship as it may
deem appropriate prior to distribution of the benefit. Such distribution shall
completely discharge the Administrative Committee from all liability with
respect to such benefit.

 

6.11 Change of Payment Form or Commencement Date

 

A Participant may make an election to change the form in which benefits are to
be paid under Sections 6.1 or 6.6 and such election will supercede his most
prior election provided the election is made no later than twelve months before
the payment would otherwise have commenced and provides that commencement of
payments will be deferred for at least five years from the date they would
otherwise have commenced. An election to change the form or commencement date of
a distribution that is filed with the Administrative Committee which does not
satisfy the foregoing shall be null and void and the next preceding timely
election filed by the Participant shall be controlling.

 

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ARTICLE VII

 

DESIGNATION

 

7.1 Beneficiary Designation

 

Each Participant shall have the right, at any time, to designate a Beneficiary
(both primary as well as contingent) to whom benefits under this Plan shall be
paid if a Participant dies prior to complete distribution to the Participant of
the benefits due such Participant under the Plan. Each Beneficiary designation
shall be in a written form prescribed by the Administrative Committee, and will
be effective only when filed with the Administrative Committee during the
Participant’s lifetime.

 

7.2 Changing Beneficiary

 

Any Beneficiary designation may be changed by a Participant without the consent
of the previously named Beneficiary by the filing of a new Beneficiary
designation with the Administrative Committee. The filing of a new Beneficiary
designation shall cancel all Beneficiary designations previously filed. If a
Participant’s Compensation is community property, any Beneficiary Designation
shall be valid or effective only as permitted under applicable law.

 

7.3 No Beneficiary Designation

 

In the absence of an effective Beneficiary designation, or if all designated
Beneficiaries predecease the Participant or die prior to complete distribution
of the Participant’s benefits, the Participant’s designated Beneficiary shall be
deemed to be the Participant’s estate.

 

7.4 Effect of Payment

 

Payment to the Beneficiary shall completely discharge Employer’s obligations
under this Plan.

 

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ARTICLE VIII

 

FORFEITURES TO COMPANY

 

8.1 Distribution of Participant’s Interest When Company is Unable to Locate
Distributees

 

If the Employer is unable, within three (3) years after a payment is due to a
Participant or Beneficiary, to make such payment because it cannot ascertain,
after making reasonable efforts, the whereabouts of the Participant or the
identity or whereabouts of the Beneficiary, and neither Participant, his
Beneficiary, nor his executor or administrator has made written claim therefore
before the expiration of the aforesaid time limit, then in such case, the amount
due shall be forfeited to the Employer.

 

ARTICLE IX

 

ADMINISTRATION

 

9.1 Committee; Duties

 

The Administrative Committee shall have the authority to interpret and enforce
all appropriate rules and regulations for the administration of the Plan and
decide or resolve any and all questions, including interpretations of the Plan,
as may arise in such administration. A majority vote of the Administrative
Committee members in office at the time of the vote shall control any decision.
The required majority action may be taken either by a vote at a meeting or
without a meeting by a signed memorandum. Meetings may be conducted by telephone
conference call. The Administrative Committee may, by majority action, delegate
to one or more of its members the authority to execute and deliver in the name
of the Administrative Committee all communications and documents which the
Administrative Committee is required or authorized to provide under this Plan.
Any party shall accept and rely upon any document executed in the name of the
Administrative Committee.

 

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9.2 Agents

 

The Administrative Committee may employ agents and delegate to them such
administrative duties as it sees fit, and may consult with counsel who may be
counsel to the Company.

 

9.3 Binding Effect of Decisions

 

The decision or action of the Administrative Committee with respect to any
question arising out of or in connection with the administration, interpretation
and application of the Plan and the rules and regulations promulgated hereunder
shall be final, conclusive and binding upon all persons having any interest in
the Plan.

 

9.4 Indemnity of Committee

 

The Company shall indemnify and hold harmless the members of the Administrative
Committee against any and all claims, loss, damage, expense or liability arising
from any action or failure to act with respect to this Plan on account of such
person’s service on the Administrative Committee, except in the case of gross
negligence or willful misconduct.

 

ARTICLE X

 

CLAIMS PROCEDURE

 

10.1 Claim

 

Any person claiming a benefit, requesting an interpretation or ruling under the
Plan, or requesting information under the Plan, shall present the request in
writing to the Administrative Committee which shall respond in writing within
thirty (30) days.

 

10.2 Denial of Claim

 

If the claim or request is denied, the written notice of denial shall state:

 

(a) The reason for denial, with specific reference to the Plan provisions on
which the denial is based.

 

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(b) A description of any additional material or information required and an
explanation of why it is necessary.

 

(c) An explanation of the Plan’s claim review procedure.

 

10.3 Review of Claim

 

Any person whose claim or request is denied or who has not received a response
within thirty (30) days may request review by notice given in writing to the
Administrative Committee. Such notice must be received by the Administrative
Committee within sixty (60) days following the end of the thirty (30) day review
period. The claim or request shall be reviewed by the Administrative Committee
who may, but shall not be required to, grant the claimant a hearing. On review,
the claimant may have representation, examine pertinent documents, and submit
issues and comments in writing.

 

10.4 Final Decision

 

The decision on review shall normally be made within sixty (60) days. If an
extension of time is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be one hundred twenty
(120) days. The decision shall be in writing and shall state the reason and the
relevant Plan provisions. All decisions on review shall be final and bind all
parties concerned.

 

ARTICLE XI

 

AMENDMENT AND TERMINATION OF PLAN

 

11.1 Amendment

 

(a) The Executive Compensation Committee of the Board may at any time amend the
Plan, in whole or in part, provided however that no amendment shall be effective
to decrease or restrict the amount credited to any Account maintained under the
Plan as of the adoption date or effective date of the amendment, whichever is
later.

 

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(b) The Administrative Committee may adopt any technical, clerical, conforming
or clarifying amendment or other change, provided:

 

(i) The Administrative Committee deems it necessary or advisable to:

 

(A) Correct any defect, supply any omission or reconcile any inconsistency in
order to carry out the intent and purposes of the Plan;

 

(B) Maintain the Plan’s status as a “top-hat” plan for purposes of ERISA or
maintain the Plan’s status as complying with Code section 409A; or

 

(C) Facilitate the administration of the Plan;

 

(ii) The amendment or change does not, without the consent of the Executive
Compensation Committee of the Board, materially increase the cost to the
Employer of maintaining the Plan; and

 

(iii) Any formal amendment adopted by the Administrative Committee shall be in
writing, signed by a member of the Committee and reported to the Executive
Compensation Committee of the Board.

 

(c) Changes in Earnings Rate. If the Plan is amended so that a series of
investment options is not used to calculate the Participants’ investment gains
and losses under the Plan, the rate of earnings to be credited to a
Participant’s Account shall not be less than the monthly equivalent of the
average nominal annual yield on three (3) month Treasury bills for the
applicable period.

 

11.2 Company’s Right to Terminate

 

The Executive Compensation Committee of the Board may, at any time, partially or
completely terminate the Plan.

 

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(a) Partial Termination. The Executive Compensation Committee of the Board may
partially terminate the Plan by instructing the Administrative Committee not to
accept any additional deferrals into the Plan. If such a partial termination
occurs, the Plan shall continue to operate and be effective with regard to
deferrals made prior to the effective date of such partial termination.

 

(b) Complete Termination. The Executive Compensation Committee of the Board may
completely terminate the Plan by instructing the Administrative Committee not to
accept any additional deferrals, and by terminating all ongoing Deferral
Elections. If such a complete termination occurs, the Plan shall cease to
operate and Employer shall distribute each Account; provided, however, that such
distribution may be made only if the Employer terminates all other non-qualified
deferred compensation plans which would be required to be aggregated with the
Plan pursuant to Code section 409A. Payment shall be made in either the form of
a lump sum payment as soon as practicable, but in no event later than 12 months
after the date of such termination.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1 Unfunded Plan/Compliance with Code

 

This plan is an unfunded plan maintained primarily to provide deferred
compensation benefits for a select group of “management or highly-compensated
employees” within the meaning of Sections 201, 301 and 401 of the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore is
exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. It is
intended to comply with Code section 409A.

 

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12.2 Unsecured General Creditor

 

Participants and Beneficiaries shall be unsecured general creditors, with no
secured or preferential right to any assets of Employer or any other party for
payment of benefits under this Plan. Any life insurance policies, annuity
contracts or other property purchased by Employer in connection with this Plan
shall remain its general, unpledged and unrestricted assets. Employer’s
obligation under the Plan shall be an unfunded and unsecured promise to pay
money in the future.

 

12.3 Trust Fund

 

At its discretion, the Company may establish one or more trusts, with such
trustees as the Company may approve, for the purpose of providing for the
payment of benefits owed under the Plan. Although such a trust shall be
irrevocable, its assets shall be held for payment to Employer’s general
creditors in the event of insolvency or bankruptcy. To the extent any benefits
provided under the Plan with respect to an Employer’s Participants are paid from
any such trust, that Employer shall have no further obligation to pay them. If
not paid from the trust, such benefits shall remain the obligation solely of
that Employer.

 

12.4 Nonassignability

 

Except in connection with designating a Beneficiary as provided under Article
VII hereof, neither a Participant nor any other person shall have any right to
commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise
encumber, transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be unassignable and nontransferable.
No part of the amounts payable shall, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency.

 

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12.5 Not a Contract of Employment

 

This Plan shall not constitute a contract of employment between Employer and the
Participant. Nothing in this Plan shall give a Participant the right to be
retained in the service of Employer or to interfere with the right of Employer
to discipline or discharge a Participant at any time.

 

12.6 Protective Provisions

 

A Participant shall cooperate with Employer by furnishing any and all
information requested by Employer in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as Employer may deem
necessary and taking such other action as may be requested by Employer.

 

12.7 Governing Law

 

The provisions of this Plan shall be construed and interpreted according to the
laws of the Commonwealth of Virginia, except as preempted by federal law.

 

12.8 Validity

 

In case any provision of this Plan shall be held illegal or invalid for any
reason, said illegality or invalidity shall not affect the remaining parts
hereof, but this Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.

 

12.9 Gender

 

The masculine gender shall include the feminine and the singular shall include
the plural, except where the context expressly dictates otherwise.

 

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12.10 Notice

 

Any notice required or permitted under the Plan shall be sufficient if in
writing and hand delivered or sent by registered or certified mail. Such notice
shall be deemed as given as of the date of delivery or, if delivery is made by
mail, as of the date shown on the postmark on the receipt for registration or
certification. Mailed notice to the Administrative Committee shall be directed
to the Company’s address. Mailed notice to a Participant or Beneficiary shall be
directed to the individual’s last known address in Employer’s records.

 

12.11 Successors

 

The provisions of this Plan shall bind and inure to the benefit of Company and
its successors and assigns. The term successors as used herein shall include any
corporate or other business entity which shall, whether by merger,
consolidation, purchase or otherwise acquire all or substantially all of the
business and assets of Employer, and successors of any such corporation or other
business entity.

 

ALBEMARLE CORPORATION

By:

 

 

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Its:

   

Dated:

 

 

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