2009 Chemtura Corporation Management Incentive Program

1.           Establishment and Purpose.  Pursuant to its authority under the
2005 Crompton Corporation Short-Term Incentive Plan (the “STIP”), and consistent
with the purpose of the STIP as stated therein, the Committee hereby establishes
the 2009 Chemtura Corporation Management Incentive Program (the “2009
MIP”).  Unless otherwise defined below, all capitalized terms shall have the
meaning given to such terms in or pursuant to the STIP.  The 2009 MIP provides
each Participant with an opportunity to earn a performance-based compensation
Award for the calendar year 2009 (the “2009 Performance Period”), based on the
attainment of pre-established performance goals, as set forth below (a “MIP
Award”).  Where applicable, MIP Awards are intended to qualify as
“performance-based compensation” within the meaning of Section 162(m) of the
Code.

Threshold Performance.  The Committee shall establish an objective threshold (a
“Minimum Threshold”) for each measure of performance during the 2009 Performance
Period (each, a “Performance Factor”), below which no MIP Award or component of
a MIP Award will be paid out with respect to that Performance Factor.  Each such
Minimum Threshold is set forth in Exhibit “A”.  In addition, threshold can be
adjusted to reflect a change in corporate capitalization, such as a stock split
or stock dividend, or a corporate transaction, such as a merger, consolidation,
separation, acquisition, divestiture, reorganization or partial or complete
liquidation, or to equitably reflect the occurrence of any extraordinary event,
any change in applicable accounting rules or principles, any change in the
Company's method of accounting, any change in applicable law, any change due to
any merger, consolidation, acquisition, divestiture, reorganization, stock
split, stock dividend, combination of shares or other changes in the Company's
corporate structure or shares, or any other change of a similar nature.  To the
extent applicable in determining any MIP Award, charges to earnings, including
but not limited to fines and penalties related to past: (i) antitrust events;
(ii) environmental events; and/or (iii) corporate restructuring, including plant
closures, sale of businesses and severance, will be excluded.

2.           To the extent applicable, the Committee, in determining any MIP
Award, shall use the information set forth in the Company's audited financial
statements.

3.           MIP Awards.  At the time of initial selection / approval by the
Committee for participation in the 2009 MIP, each Participant shall be assigned
a percentage of his or her “base pay” (as defined in the STIP) that will be used
in calculating his or her MIP Award, if any.  This percentage of base pay shall
be referred to as the “Target Percentage”.  The amount of a Participant’s MIP
Award will be determined by multiplying the Target Percentage by the applicable
Performance Factor set forth in Exhibit “A”, subject to any Performance
Adjustment described in the following paragraph.

In determining a Participant’s MIP Award, the Committee reserves the absolute
discretion to increase or decrease the amount produced under the last sentence
of the preceding paragraph, based on the Committee’s assessment of any personal,
functional or other performance the Committee determines should be taken into
account (a “Performance Adjustment”), provided that with respect to any
individual subject to Section 162(m) of the Code, any such Performance
Adjustment may only decrease (and may not increase) the amount produced under
the last sentence of the preceding paragraph.  The CEO will recommend to the
Committee any Performance Adjustment for each Participant who reports directly
to the CEO.  The CEO and the applicable Business or Functional leader, will
recommend to the Committee any Performance Adjustment for each other
Participant.
 
 
 

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Notwithstanding anything herein to the contrary, the MIP Award paid to any
Participant subject to Section 162(m) shall in no way increase as a result of
the reduction of any MIP Award paid to another Participant.

4.           Changes to Target Percentage or Performance Factor.  To the extent
not inconsistent with the requirements of Section 162(m) of the Code with
respect to "qualified performance-based compensation," the Committee may at any
time prior to the final determination of MIP Awards: (i) change the Target
Percentage of any Participant; (ii) assign a different Target Percentage to a
Participant to reflect any change in the Participant's responsibility level or
position during the course of the Performance Period; or (iii) change a
Performance Factor to reflect a change in corporate capitalization, such as a
stock split or stock dividend, or a corporate transaction, such as a merger,
consolidation, separation, acquisition, divestiture, reorganization or partial
or complete liquidation, or to equitably reflect the occurrence of any
extraordinary event, any change in applicable accounting rules or principles,
any change in the Company's method of accounting, any change in applicable law,
any change due to any merger, consolidation, acquisition, divestiture,
reorganization, stock split, stock dividend, combination of shares or other
changes in the Company's corporate structure or shares, or any other change of a
similar nature.

5.           Eligibility.  The Committee shall designate Participants in the
2009 MIP in accordance with the terms of the STIP and as set forth herein.  Each
Participant must be an Eligible Employee as of January 1, 2009, and be actively
employed as of the date MIP Awards, if any, are paid.  Exceptions may be granted
as determined by the Committee in its sole discretion, provided such exception
complies with Section 162(m) of the Code.  Any employee who becomes an Eligible
Employee, as determined by the Committee, as a result of hire or promotion after
January 1, 2009 but before June 30, 2009 may be eligible to a MIP Award, pro
rated based on the number of whole months that the employee is an Eligible
Employee during calendar year 2009.  Similarly, where an Eligible Employee, for
whatever reason, moves to another role during calendar year 2009 for which
different performance measures apply, his or her MIP Award, if any, will be
calculated by taking into account the performance measures for each role and the
actual time that the Eligible Employee spent in each role during calendar year
2009.

6.           Other Conditions.  Eligibility for or actual participation in the
2009 MIP shall not and in no way is intended to create an agreement of
employment for a definite term.  Nothing herein shall or is intended to, (i)
obligate the Company to offer, or offer any employee participation in, a
Management Incentive Program or similar arrangement in the future, and/or (ii)
act as a modification of any employee’s existing terms and conditions of
employment.  Except as expressly set forth herein, the 2009 MIP shall be subject
to and administered in accordance with the terms and conditions of the STIP.

 
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ALL PARTICIPANTS
 
EXHIBIT “A”
 
1.           For each Executive Participant, as determined by the Committee, his
or her 2009 MIP Award if any shall be calculated based on the following
Performance Factors, in the following proportions (each as identified in this
Exhibit “A”):

1/3rd
2009 EBITDA
2009 Cash Flow
2/3rds

2.           Set forth in this Exhibit “A” is a schedule identifying the Minimum
Threshold for each Performance Factor identified above, as well as a scale of
payout eligibility based on performance relative to target, subject in all cases
to the other terms and conditions set forth in the 2009 MIP, including the STIP
and this Exhibit “A”.

3.           Each level of performance on the scale is expressed as a percentage
of actual performance relative to target performance.

4.           Each level of performance also is assigned a corresponding
percentage (between 0% and 200%) that is eligible for payout with respect to
that Performance Factor.

5.           For example, where actual performance is equal to target
performance, then 100% of that Performance Factor is eligible for payout,
subject to the other terms and conditions set forth in the 2009 MIP, including
the STIP and this Exhibit “A”.

6.           In no event will any Participant be eligible for a payout of more
than 200% of target for any Performance Factor.
 
7.           
The steps in the scale between minimum, target and maximum also are shown.  If
performance and/or pay out percentage are not equal to the numbers shown below,
actual pay out will be determined by interpolation.

(Dollars in Millions)
 

 
EBITDA
 
MIP Pay Out
 
Operating Cash Flow
Threshold
$150
 
0%
 
$25
 
$175
 
25%
 
$37
 
$200
 
50%
 
$50
 
$225
 
75%
 
$62
Target
$250
 
100%
 
$75
 
$275
 
133%
 
$88
 
$300
 
166%
 
$102
Maximum
$325
 
200%
 
$115

 
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DEFINITIONS:
 
For purposes of the 2009 Management Incentive Plan
 
EBITDA
 
“EBITDA” means, for the calendar year of 2009, net income (or net loss) from
continuing operations(1) plus, to the extent included the calculation of net
income for such period in accordance with GAAP, the sum of (a) Interest Expense,
(b) income tax expense, (c) other expense, (d) depreciation expense, (e)
amortization expense, (f) charges related to facility closures, severance and
related costs, (g) impairments of long-lived assets, (h) charges related to the
accelerated recognition of asset retirement obligations, (i) antitrust costs,
(j) any losses from sales of assets or a business other than in the ordinary
course of business, (k) charges for the payment of premiums in connection with
the early repayment or retirement of indebtedness, (l) expenses including
professional fees associated with the issuance of indebtedness or the amendment,
waiver or restructuring of the principal and terms of existing indebtedness
including such charges related to accounts receivable facilities, (m) charges
associated with the curtailment or settlement of pension and post retirement
medical plans and (n) costs related to natural disasters such as hurricanes or
earthquakes that disrupt operations (2)  minus  (a) other income, (b) any gains
from sales of assets or a business other than in the ordinary course of business
and (c) gains associated with the curtailment or settlement of pension and post
retirement medical plans.
 
Should the Company divest a business(s) during the calendar year, the EBITDA
Target shall be reduced (or increased) by the amount of EBITDA that was to be
contributed by (or reduced from) the business(s) before the deduction of
allocated functional and corporate expenses for such period as the EBITDA of the
business(s) is no longer reflected in actual 2009 EBITDA from continuing
operations of the Company (“Adjusted Target”).  The Threshold and Maximum EBITDA
values and all other EBITDA values identified in the Management Incentive Plan
documentation shall be adjusted such that they are the same percentage of the
Adjusted Target as were the original values of the original Target.
 
Operating Cash Flow
 
“Operating Cash Flow” means, for the calendar year of 2009, Net Cash (used in)
provided by operations as reflected in the Company’s Condensed Consolidated
Statements of Cash Flows (1) plus, to the extent included the calculation of the
statement of cash flows for such period in accordance with GAAP, the sum of (a)
any reduction in the value of accounts receivable sold in the period, (b)
charges related to facility closures, severance and related costs, (c) antitrust
costs and settlement payments, (d) any losses from sales of assets or a business
other than in the ordinary course of business, (e) charges for the payment of
cash premiums in connection with the early repayment or retirement of
indebtedness, (f) expenses including professional fees associated with the
issuance of indebtedness or the amendment, waiver or restructuring of the
principal and terms of existing indebtedness including such charges related to
accounts receivable facilities, and (g) any cash payments or contributions made
related to the Company’s pension and post retirement medical plans
(2)  minus  (a) any increase in the value of accounts receivable sold in the
period, (b) any gains from sales of assets or a business other than in the
ordinary course of business and (c) any cash receipts related to the Company’s
pension and post retirement medical plans.

Should the Company divest a business(s) during the calendar year, the Operating
Cash Flow Target shall be reduced (or increased) by the amount of EBITDA that
was to be contributed by (or reduced from) the business(s) before the deduction
of allocated functional and corporate expenses for such period as the EBITDA of
the business(s) is no longer reflected in actual 2009 EBITDA from continuing
operations of the Company (“Adjusted Target”).  The Threshold and Maximum
Operating Cash Flow values and all other Operating Cash Flow values identified
in the Management Incentive Plan documentation shall each be reduced by the same
amount as the amount as Adjusted Target is reduced from (or added to) the
Target.
 
 
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