EX 10.4 - Enhanced Salary Continuation Policy


    Exhibit
      10.4

    


     

    ENHANCED
      SALARY CONTINUATION POLICY

    (Applicable
      to Employees Band 8 and Above)

     

    Issued:
      November 1, 2005

     

    I. Purpose
      and Objective

     

    The
      Enhanced Salary Continuation Policy (hereinafter the “Policy”) provides, as set
      forth below, enhanced salary continuation and modified benefits to eligible,
      non-excluded senior level employees (Bands 8 and above) of Engelhard Corporation
      (hereinafter “Engelhard” or “Company”) whose employment is involuntarily
      terminated in certain circumstances during the period that the terms of this
      Policy are in effect. This Policy is effective November 1, 2005 and replaces
      and
      supersedes any prior enhanced Salary Continuation Policy.

     

    This
      Policy recognizes that a variety of factors (i.e.,
      age,
      service) make obtaining comparable employment at senior levels more difficult
      and may increase the duration of a job search.

     

    Any
      otherwise eligible, non-excluded senior level employee who either (1) was
      terminated from active employment prior to November 1, 2005, or (2) is receiving
      payments from any previous enhanced Salary Continuation Policy will continue
      to
      receive salary and other benefits under the terms of the applicable prior
      enhanced Salary Continuation Policy and will not qualify for any benefits under
      this Policy.

     

    II. Eligibility

     

    Eligibility
      for Enhanced Salary Continuation and modified benefits is contingent upon an
      employee:

     

    
      	 	
              1.

            	
              being
                eligible for and receiving Salary Continuation under Policy 3.11A;
                and

            


    

     

    
      	 	
              2.

            	
              agreeing
                to the obligations, terms and conditions to be set forth in a General
                Release and Waiver, including assisting in the smooth transition
                to
                Engelhard management of business knowledge, files and other information;
                and,

            


    

     

    
      	 	
              3.

            	
              if
                required by Engelhard and as determined by Engelhard, agreeing to
                not seek
                an offer of employment, consulting assignment or any other direct
                or
                indirect relationship for remuneration with certain Companies designated
                by Engelhard for a period of up to two (2) years from the date Enhanced
                Salary Continuation ends.

            


    

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    
      III. 
        Terms

    

     

    Except
      as
      otherwise specifically noted in this Policy, all Enhanced Salary Continuation
      payments will be administered and subject to the same terms and conditions
      as
      payments under Policy 3.11A.

     

    Payments
      under this Enhanced Salary Continuation Policy commence upon completion of
      any
      weeks owed under Policy 3.11A.

     

    Eligible
      Employees are entitled only to the greater of the benefits owed under either
      Policy 3.11A or this Enhanced Salary Continuation Policy.

     

    Enhanced
      Salary Continuation will be paid for up to twenty six (26) weeks, without regard
      to obtaining new employment. Thereafter, payments under this Enhanced Salary
      Continuation Policy will cease either when new employment is obtained or after
      maximum payments as indicated in the schedule below have been made, whichever
      occurs first.

     

    IV. Enhanced
      Salary Continuation Benefits Schedule

     

    
      
        	
                AGE

              	
                BANDS
                  8 -10

              	
                BAND
                  11

              	
                BANDS
                  12 -13

              
	
                Under
                  40

              	
                20
                  Weeks

              	
                36
                  Weeks

              	
                52
                  Weeks

              
	
                40
                  - 44

              	
                28
                  Weeks

              	
                40
                  Weeks

              	
                52
                  Weeks

              
	
                45
                  - 49

              	
                36
                  Weeks

              	
                44
                  Weeks

              	
                52
                  Weeks

              
	
                50
                  - 54 

              	
                44
                  Weeks

              	
                48
                  Weeks

              	
                52
                  Weeks

              
	
                55
                  and over

              	
                52
                  Weeks

              	
                52
                  Weeks

              	
                52
                  Weeks

              


      

       

    

    Except
      as
      set forth in the next succeeding paragraph (i) this Policy is not a Contract
      and
      (ii) the Company expressly reserves the right to interpret, terminate,
      suspend, revoke, withdraw, amend or modify the policies, practices, procedures
      and statements contained herein at any time, without notice.

     

    Notwithstanding
      any provision of this Enhanced Salary Continuation Policy to the contrary,
      during any period beginning on the date of a Change of Control (as defined
      in
      the Engelhard Corporation 2002 Long Term Incentive Plan, as in effect on January
      20, 2006) and ending on December 31, 2007, this Policy may not be terminated,
      suspended, revoked, withdrawn, amended or modified in a manner that adversely
      affects the rights of any employee of the Company without the prior written
      consent of the employee, and during such period any statement in the Enhanced
      Salary Continuation Policy that the Policy is not a contract shall not
      apply.

     

    V. Excise
      Tax Limitation

     

    (a) Notwithstanding
      any other provision of this Enhanced Salary Continuation Policy, in the event
      that the amount of payments to an employee under this Enhanced Salary
      Continuation Policy, together with any payments, awards or benefits payable
      under any other plan, program, arrangement or agreement maintained by the
      Company or one of its affiliates (including, without limitation, the
      acceleration of any payment or the accelerated vesting of any payment or
      other

     


    
      
        
        

      

      
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    benefit),
      would constitute an “excess parachute payment” (within the meaning of Section
      280G of the Code), the payments under this Enhanced Salary Continuation Policy
      shall be reduced (by the minimum possible amounts and not below zero) until
      no
      amount payable to the employee under this Enhanced Salary Continuation Policy
      constitutes an “excess parachute payment” (within the meaning of Section 280G of
      the Code); provided,
      however,
      that no
      such reduction shall be made if the net after-tax payment (after taking into
      account Federal, state, local or other income, employment and excise taxes)
      to
      which the employee would otherwise be entitled without such reduction would
      be
      greater than the net after-tax payment (after taking into account Federal,
      state, local or other income, employment and excise taxes) to the employee
      resulting from the receipt of such payments with such reduction. If, as a result
      of subsequent events or conditions (including a subsequent payment or absence
      of
      a subsequent payment under other plans, programs, arrangements or agreements
      maintained by the Company or one of its affiliates), it is determined that
      payments hereunder have been reduced by more than the minimum amount required
      under this Paragraph V, then an additional payment shall be promptly made to
      the
      employee in an amount equal to the excess reduction.

     

    (b) All
      determinations required to be made under this Paragraph V, including whether
      a
      payment would result in an “excess parachute payment” and the assumptions to be
      utilized in arriving at such determinations, shall be made by Ernst & Young
      LLP (the “Accounting Firm”) which shall provide detailed supporting calculations
      to the Company, which the Company shall promptly deliver to the employee. All
      fees and expenses of the Accounting Firm shall be borne solely by the Company
      and shall be paid by the Company. All determinations made by the Accounting
      Firm
      under this Paragraph V shall be made on the basis of substantial authority
      and,
      except as set forth in the last sentence of Paragraph V(a) above, shall be
      final
      and binding upon the Company and the employee.”

     

    
 

     

     

     

     

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