EX 10.2 - Form of letter agreement


    Exhibit
      10.2

    


    [Letterhead
      of Engelhard Corporation]

    


    January
      __, 2006

     

    [Name]

    [Address]

     

     

    Dear
      ___________:

     

    This
      letter is intended to update the Change in Control Agreement between you and
      Engelhard Corporation (the “Company”) dated ______ (the “Agreement”) to reflect
      changes in the Internal Revenue Code of 1986, as amended (the “Code”) applicable
      to deferred compensation and a change in the Company’s auditors.

     

    The
      Code
      was amended to add Section 409A thereto, which governs certain deferred
      compensation arrangements. Final regulations have not yet been issued under
      Section 409A and, after final regulations are issued, amendments to the
      Agreement, the deferred compensation plans, supplemental retirement plans and
      certain other plans and agreements maintained or entered into by the Company
      may
      be required. It is not currently known when final regulations will be issued
      under Section 409A.

     

    The
      Company will amend the Agreement, the Deferred Compensation Plan for Key
      Employees of Engelhard Corporation, the Supplemental Retirement Program of
      Engelhard Corporation and any other agreement between the Company and you and
      plan maintained by the Company or its affiliates in which you participate which,
      in any such case, is or otherwise would be subject to Section 409A of the Code
      (collectively, the “DC Plans and Agreements”) in a timely manner to the extent,
      if any, necessary to avoid additional tax or interest imposed under Section
      409A
      and the regulations issued thereunder; provided,
      however,
      any
      such amendment shall be made in a manner which does not reduce the economic
      value of the DC Plans and Agreements to you, and any such amendment shall not
      defer the date of any payment, or benefit provided, to you unless Ernst &
Young LLP advises the Company in writing (which written determination is
      promptly provided to you by the Company) that there is not substantial authority
      for otherwise avoiding additional tax or interest under Section 409A and in
      no
      event will payments be deferred due to Section 409A to a date that is more
      than
      six months following your termination of employment. The Company will consult
      with you prior to making any such amendment, and you agree that your consent
      to
      an amendment that is consistent with the provisions hereof and satisfies the
      foregoing proviso will not be unreasonably withheld. You will report for income
      tax purposes with respect to Section 409A in a manner consistent with the
      Company’s reporting (as communicated in writing by the Company to you), unless
      inconsistent reporting is otherwise required after audit by the Internal Revenue
      Service. In the event of such an audit, you and the Company agree to follow
      procedures substantially similar to those set forth in Section 6 of the
      Agreement. The Company will not amend any DC Plan and Agreement in a manner
      which would cause any grandfather protection under Section 409A to be lost
      with

     


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    respect
      to a DC Plan and Agreement. The Company will indemnify and hold you harmless,
      on
      an after-tax basis (including, without limitation, income tax, additional tax,
      excise tax, employment tax and any interest or penalties with respect thereto),
      from any cost or liability resulting from any additional tax or interest imposed
      under Section 409A. Any payments required to be deferred due to Section 409A
      will be deposited in the Company’s Supplemental Retirement Trust for your
      benefit, and the Trustee thereof will be given irrevocable instructions to
      pay
      such amounts to you on the earlier of the date that is six months following
      your
      termination of employment or the first date permissible under Section 409A.
      Notwithstanding any such deposit into the Supplemental Retirement Trust, the
      Company will continue to be liable for such payments until such amounts are
      fully paid to you. The Company will make any amendments to the Supplemental
      Retirement Trust necessary to effect the provisions hereof.

     

    The
      Agreement is hereby amended by providing that the Accounting Firm (as defined
      in
      Section 6(b) thereof) will be Ernst & Young LLP. In addition,
      notwithstanding any provision thereof to the contrary, Ernst & Young LLP
      will be required to provide supporting calculations with respect to the Excise
      Tax (as defined therein) only to the Company, but the Company will promptly
      provide copies of such supporting calculations to you. If the Accounting Firm
      determines that no Excise Tax is payable by you, it will furnish the Company
      with a written opinion
      that substantial authority exists to that effect and, as a result, the Company
      is not required to withhold Excise Tax from payments to you, and the Company
      will promptly provide a copy of such opinion to you.

     

    Except
      as
      modified herein, the Agreement shall remain in full force and effect in
      accordance with its terms.

     

    Please
      acknowledge your agreement to the foregoing by signing below and returning
      an
      executed copy of this letter agreement to _____________. 

     

     

    Sincerely,

     

     

    ENGELHARD
      CORPORATION

     

     

    By:     
      __________________________

    Title:  
      __________________________

     

    Acknowledged
      and Agreed:

     

    ______________________________

    [Name]

     


    
      
         

      

      
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    Date: 
      _______________________________

     

    List
      of
      current executives who have entered into this letter agreement with the
      Company:

     

    Arthur
      A.
      Dornbusch, II

    Mark
      Dresner

    John
      C.
      Hess

    Barry
      W.
      Perry

    Michael
      A. Sperduto

    David
      M.
      Wexler

     

     

     

     

     

     

    -3-