Unassociated Document


     

    


    2008
      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 2008 Chemtura Corporation Management Incentive Program (the
      “2008
      MIP”).
      Unless otherwise defined below, all capitalized terms shall have the meaning
      given to such terms in or pursuant to the STIP. The 2008 MIP provides each
      Participant with an opportunity to earn a performance-based compensation Award
      for the calendar year 2008 (the “2008
      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.

    


    2.  Threshold
      Performance. 
      The Committee shall establish an objective threshold (a “Minimum
      Threshold”)
      for
      each measure of performance during the 2008 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 [the
      applicable] Exhibit “A”. 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. 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 2008 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 [the applicable]
      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 members of the Office of the Chairman,
      in
      consultation with the CEO and the applicable Business or Functional leader,
      will
      recommend to the Committee any Performance Adjustment for each other
      Participant.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    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 2008 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, 2008, 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, 2008 but
      before June 30, 2008 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 2008. Similarly, where an Eligible Employee, for whatever reason, moves
      to
      another role during calendar year 2008 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 2008. 

    


    6.      
      Other
      Conditions. 
      Eligibility for or actual participation in the 2008 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
      2008 MIP shall be subject to and administered in accordance with the terms
      and
      conditions of the STIP.

    


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      EXECUTIVE
        PARTICIPANTS

    

     

    EXHIBIT
      “A”

     

    1.  For
      each
      Executive Participant, as determined by the Committee, his or her 2008 MIP
      Award
      if any shall be calculated based on the following Performance Factors, in the
      following proportions:

    


    
      	
              75%

            	
              2008
                EBITDA for Chemtura Corporation

            	
              2008
                Free Cash Flow for Chemtura Corporation

            	
              25%

            


    

    


    2.  Set
      forth
      on page two of this Exhibit “A” is a spreadsheet 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 2008 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 2008 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 on the
      spreadsheet. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      

        BUSINESS
          PARTICIPANTS

      

    

    


    EXHIBIT
      “A”

    


    8.  For
      each
      Business Participant, as determined by the Committee, his or her 2008 MIP Award
      if any shall be calculated based on the following Performance Factors, in the
      following proportions: 

    


    
      	
              40%

            	
              2008
                EBITDA for the applicable business (identified on page two of this
                Exhibit
                “A”)

            	
              2008
                Free Cash Flow for the applicable business

            	
              25%

            
	
              10%

            	
              2008
                EBITDA for Chemtura Corporation

            	
              Individual
                performance

            	
              25%

            


    

    


    9.  With
      the
      exception of any Individual Performance Factor, described in more detail in
      Paragraph 6, set forth on page two of 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 2008 MIP, including
      the STIP and this Exhibit “A”. 

    


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

    


    11.  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 2008 MIP, including the STIP and this Exhibit “A”.
      The steps in the scale between minimum, target and maximum also are shown on
      the
      spreadsheet.

    


    12.  At
      the
      beginning of each Performance Period and within the time frames provided in
      the
      STIP, the Committee (or its designee) will confirm to each Participant those
      objectives and/or goals that comprise any Performance Factor identified above
      that is intended to measure individual performance (an “Individual
      Performance Factor”),
      with
      an emphasis on measurable and quantifiable goals and results. Unless the
      Committee (or its designee) provides otherwise in writing within the time frames
      provided in the STIP, the Individual Performance Factor for each Business
      Participant shall be comprised of the performance goals established through
      the
      Company’s regular periodic performance appraisal and goal-setting process, as
      those goals may be modified from time-to-time during the Performance Period.
      Notwithstanding the foregoing, however, with respect to any individual subject
      to Section 162(m) of the Code, the nature and timing of any such modification
      shall not be inconsistent with the requirements of Section 162(m) of the
      Code with respect to "qualified performance-based compensation". 

    


    13.  In
      no
      event will any Participant be eligible for a payout of more than 200% of target
      for any Performance Factor, including any Individual Performance
      Factor.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CORPORATE
        / FUNCTIONAL PARTICIPANTS

    

     

    EXHIBIT
      “A”

    


    14.  For
      each
      Functional Participant, as determined by the Committee, his or her 2008 MIP
      Award if any shall be calculated based on the following Performance Factors,
      in
      the following proportions:

    


    
      	
              25%

            	
              Roll-up
                of 2008 EBITDA for all Chemtura Corporation businesses

            	
              Functional
                performance

            	
              25%

            
	
              25%

            	
              2008
                EBITDA for Chemtura Corporation

            	
              Individual
                performance

            	
              25%

            


    

    


    15.  With
      the
      exception of any Functional Performance Factor and Individual Performance
      Factor, each described in more detail below in Paragraphs 6 and 7, respectively,
      set forth on page two of 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 2008 MIP, including the
      STIP
      and this Exhibit “A”. 

    


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

    


    17.  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 2008 MIP, including the STIP and this Exhibit “A”.
      The steps in the scale between minimum, target and maximum also are shown on
      the
      spreadsheet.

    


    18.  At
      the
      beginning of each Performance Period and within the time frames provided in
      the
      STIP, the Committee (or its designee) will confirm to each Participant those
      objectives and/or goals that comprise any Performance Factor identified above
      that is intended to measure functional performance (a “Functional
      Performance Factor”),
      with
      an emphasis on measurable and quantifiable goals and results.

    


    19.  At
      the
      beginning of each Performance Period and within the time frames provided in
      the
      STIP, the Committee (or its designee) will confirm to each Participant those
      objectives and/or goals that comprise any Performance Factor identified above
      that is intended to measure individual performance (an “Individual
      Performance Factor”),
      with
      an emphasis on measurable and quantifiable goals and results. Unless the
      Committee (or its designee) provides otherwise in writing within the time frames
      provided in the STIP, the Individual Performance Factor for each Functional
      Participant shall be comprised of the performance goals established through
      the
      Company’s regular, periodic performance appraisal and goal-setting process, as
      those goals may be modified from time-to-time during the Performance Period.
      Notwithstanding the foregoing, however, with respect to any individual subject
      to Section 162(m) of the Code, the nature and timing of any such modification
      must meet the requirements of Section 162(m) of the Code and the STIP.


     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

      CORPORATE
        / FUNCTIONAL PARTICIPANTS



    20.  In
      no
      event will any Participant be eligible for a payout of more than 200% of target
      for any Performance Factor, including any Functional Performance Factor and/or
      Individual Performance Factor.