<PAGE>

                                                                   Exhibit 10.17

                            MILLENNIUM CHEMICALS INC.
                     2003 EXECUTIVE LONG TERM INCENTIVE PLAN

                                 Effective as of
                                 January 1, 2003



<PAGE>


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                          <C>
Article 1      PURPOSE...................................................     1

Article 2      DEFINITIONS...............................................     1

Article 3      ELIGIBILITY AND PARTICIPATION.............................     7

Article 4      AWARD TARGET..............................................     7

Article 5      EARNING, VESTING AND DISTRIBUTION OF AWARDS...............     8

Article 6      AWARDS....................................................     8

        6.1       Goal-based Award Targets...............................     8

        6.2       Goals..................................................     8

        6.3       Establishment of Requirements..........................     9

        6.4       Committee Certification................................     9

        6.5       Earned Awards..........................................     9

        6.6       Requirement of Employment..............................     9

Article 7      TERMINATION OF EMPLOYMENT.................................     9

        7.1       Termination of Employment..............................     9

        7.2       Certain Former Participants............................    10

Article 8      CHANGE IN CONTROL.........................................    10

Article 9      MANDATORY DEFERRALS.......................................    10

Article 10     ADJUSTMENTS...............................................    11

Article 11     ADMINISTRATION............................................    11

        11.1      Responsibility.........................................    11

        11.2      Delegation of Authority................................    11

        11.3      Determinations and Interpretations by the Committee....    11

Article 12     CLAIMS....................................................    12

        12.1      Claims Procedure.......................................    12

        12.2      Claims Review Procedure................................    12
</TABLE>


                                       i



<PAGE>


                               TABLE OF CONTENTS
                                   (continued)
<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                          <C>
Article 13     GENERAL PROVISIONS........................................    12

        13.1      Withholding Taxes......................................    12

        13.2      Assignability and Transferability......................    13

        13.3      Funding................................................    13

        13.4      No Right, Title, or Interest in Company Assets.........    13

        13.5      No Right to Continued Employment.......................    14

        13.6      Governing Law..........................................    14

Article 14     AMENDMENT AND TERMINATION.................................    14

        14.1      Right to Amend, Suspend or Terminate...................    14

        14.2      Termination............................................    14

        14.3      No Impairment..........................................    14
</TABLE>

   APPENDIX I - Strategic Goals-based Award and Shareholder Return Goals-based
               Award for the Performance Period 2003 through 2005


                                       ii



<PAGE>


                            MLLENNIUM CHEMICALS INC.
                     2003 EXECUTIVE LONG TERM INCENTIVE PLAN

                                    ARTICLE 1
                                     PURPOSE

          The purpose of this Millennium Chemicals Inc. 2003 Executive Long Term
Incentive Plan (the "Plan") is to align executive management's strategic and
operational decisions and the implementation of those decisions to successfully
create value for the shareholders and generate total shareholder return and
stock price performance that is competitive with chemical industry peers. The
Plan is also designed to provide a competitive level of long term incentive
opportunity to attract, retain and motivate certain key employees of Millennium
Chemicals Inc. (together with its successors, the "Company") and its
subsidiaries in order to increase the profitability of the Company and its
affiliates. The Plan became effective as of January 1, 2003 and shall continue,
as amended from time to time, unless terminated by the Company.

                                    ARTICLE 2
                                   DEFINITIONS

          In addition to the terms specifically defined elsewhere in the Plan,
the following terms shall have the respective meanings indicated (unless the
context indicates otherwise):

          "Affiliate" means any corporation, partnership, limited liability
company or other business entity in respect of which the Company owns, directly
or indirectly, the outstanding securities or other ownership interests
representing fifty percent (50%) or more of the combined voting power, equity or
capital interests of such entity.

          "Annual Plan" means the Millennium Chemicals Inc. Annual Performance
Incentive Plan, the Omnibus Plan or any successor plan pursuant to which annual
incentive bonus awards are granted generally to key executives of the Company
and its subsidiaries.

          "Award" means, collectively, any Strategic Goals Award and Shareholder
Return-based Award.

          "Award Date" means the date on which Awards are finally determined as
specified in Section 6.5 below following the end of a Performance Period, and
generally follows as soon as practicable the date upon which annual incentive
bonus awards are paid to executives under the Annual Plan (or, if bonuses are
not paid or earned in the last Plan Year of a Performance Period, the date that
bonuses would have been paid if bonuses were earned).


                                       1



<PAGE>


          "Award Distribution Date" means the date on which Awards are
distributed or deferred pursuant to Article 9 as soon as reasonably practicable
following the Award Date.

          "Board of Directors" means the Board of Directors of the Company.

          "Cause" means, with respect to a participant's termination of
employment with the Employer:

          (a)  in the case where there is no employment agreement, change in
               control agreement or similar agreement in effect between the
               Employer and the participant immediately prior to such
               termination of employment, or where there is an employment
               agreement, change in control agreement or similar agreement in
               effect immediately prior to such termination of employment but
               such agreement either does not define cause (or words of like
               import) or a cause termination would not be permitted under such
               agreement at that time because other conditions were not
               satisfied, termination due to a participant's dishonesty, fraud,
               insubordination, willful misconduct, refusal to perform services
               (for any reason other than illness or incapacity) or materially
               unsatisfactory performance of his or her duties for the Employer;
               or

          (b)  in the case where there is an employment agreement, change in
               control agreement or similar agreement in effect between the
               Employer and the participant immediately prior to such
               termination of employment that defines cause (or words of like
               import) and a cause termination would be permitted under such
               agreement at that time, termination that is or would be deemed to
               be for cause (or words of like import) as defined under such
               agreement; provided, that with regard to any agreement that
               conditions cause on occurrence of a change in control, such
               definition shall not apply until a change in control actually
               takes place and then only with regard to a termination on or
               after such change in control or a termination within six months
               prior thereto.

          "Change in Control" means the first of any of the following to occur
with respect to the Company:

          (a)  any "person" as such term is used in Sections 13(d) and 14(d) of
               the 1934 Act (other than the Company, any trustee or other
               fiduciary holding securities under any employee benefit plan of
               the Company or any company owned, directly or indirectly, by the
               shareholders of the Company in substantially the same proportions
               as their ownership of Common Stock of the Company), becoming


                                       2



<PAGE>


               the "beneficial owner" (as defined in Rule 13d-3 under the 1934
               Act), directly or indirectly, of securities of the Company
               representing twenty-five percent (25%) or more of the combined
               voting power of the Company's then outstanding securities;

          (b)  during any period of two consecutive years (not including any
               period prior to October 1, 1996), individuals who at the
               beginning of such period constitute the Board of Directors of the
               Company, and any new director (other than a director designated
               by a person who has entered into an agreement with the Company to
               effect a transaction described in clause (a), (c), or (d) of this
               paragraph or a director whose initial assumption of office occurs
               as a result of either an actual or threatened election contest
               (as such terms are used in Rule 14a-11 of Regulation 14A
               promulgated under the 1934 Act) or other actual or threatened
               solicitation of proxies or consents by or on behalf of a person
               other than the Board of Directors of the Company) whose election
               by the Board of Directors or nomination for election by the
               Company's shareholders was approved by a vote of at least
               two-thirds of the directors then still in office who either were
               directors at the beginning of the two-year period or whose
               election or nomination for election was previously so approved,
               cease for any reason to constitute at least a majority of the
               Board of Directors;

          (c)  the merger or consolidation of the Company with any other
               corporation, other than a merger or consolidation which would
               result in the voting securities of the Company outstanding
               immediately prior thereto continuing to represent (either by
               remaining outstanding or by being converted into voting
               securities of the surviving entity) more than fifty percent (50%)
               of the combined voting power of the voting securities of the
               Company or such surviving entity outstanding immediately after
               such merger or consolidation; provided, however, that a merger or
               consolidation effected to implement a recapitalization of the
               Company (or similar transaction) in which no person (other than
               those covered by the exceptions in (a) above) acquires more than
               twenty-five percent (25%) of the combined voting power of the
               Company's then outstanding securities shall not constitute a
               Change in Control; or

          (d)  the shareholders of the Company approve a plan of complete
               liquidation of the Company or the closing of the sale or
               disposition by the Company of all or substantially all of the
               Company's assets other than the sale or disposition of all or
               substantially all of the assets of the Company to one or more
               Subsidiaries (as defined below) of the Company or to a person or
               persons who beneficially


                                       3



<PAGE>


               own, directly or indirectly, at least fifty percent (50%) or more
               of the combined voting power of the outstanding voting securities
               of the Company at the time of the sale or disposition, provided,
               however, (y) the sale or disposition of all or any part of the
               Company's interests in Equistar Chemicals, LP ("Equistar") (and
               all subsequent sales and dispositions of any securities or assets
               received as proceeds thereof, or as proceeds of proceeds) shall
               not be deemed to constitute a Change in Control, and (z) if the
               Company sells or disposes of all or any part of the Company's
               interests in Equistar indirectly (either through the sale or
               other disposition of any entity that owns, directly or
               indirectly, all or any part of the Company's interests in
               Equistar, or otherwise), then the sale or disposition of the
               Company's interests in Equistar (and all subsequent sales and
               dispositions of any securities or assets received as proceeds
               thereof, or as proceeds of proceeds) shall be ignored and
               disregarded in determining whether any such Change in Control has
               occurred. By way of illustration, if an indirect subsidiary of
               the Company that owns the Company's interests in Equistar
               together with certain other assets is sold, then, in determining
               whether a Change in Control has occurred, all relevant
               determinations shall be made pursuant to the assumption that (y)
               such subsidiary owns only such other assets, and (z) neither such
               subsidiary nor the Company owns, either directly or indirectly,
               the interests in Equistar. "Subsidiary" has the meaning set
               forth in Section 424(f) of the Code, as amended or superseded,
               and the term shall also include any partnership, limited
               liability company or other business entity if the Company owns,
               directly or indirectly, securities or other ownership interests
               representing at least fifty percent (50%) of the ordinary voting
               power or equity or capital interests of such entity.

          "Code" means the Internal Revenue Code of 1986, as amended from time
to time.

          "Committee" means the Compensation Committee of the Board of Directors
or such other committee as may be appointed by the Board of Directors. Unless
the Board of Directors determines otherwise, the Committee shall be comprised
solely of not less than two members who each shall qualify as (a) a
"non-employee director" within the meaning of Rule 16b-3(b) (3) (or any rule
which amends or supersedes such rule) under the 1934 Act and (b) an "outside
director" within the meaning of Section 162(m) of the Code.

          "Common Stock" means the common stock, $.01 par value, of the Company,
subject to adjustment as provided in Article 10.


                                       4



<PAGE>


          "Employer" means the Company, Millennium America Holdings Inc.,
Millennium Inorganic Chemicals Inc., Millennium Petrochemicals Inc., Millennium
Specialty Chemicals Inc. and any other Affiliate authorized by the Board of
Directors to participate in the Plan, and any successor thereto.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.

          "Executive Officer" means an individual who is an employee of an
Employer holding the office of Senior Vice President or higher.

          "Fair Market Value" means, for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, as of any date, the closing price reported for a share of Common
Stock on the applicable date (a) as reported by the principal national
securities exchange in the United States on which it is then traded, or (b) if
not traded on any such national securities exchange, as quoted on an automated
quotation system sponsored by the National Association of Securities Dealers.

          "Good Reason" means, with respect to a participant's termination of
employment with the Employer:

          (a)  in the case where there is no employment agreement, change in
               control agreement or similar agreement in effect between the
               Employer and the participant immediately prior to such
               termination of employment, or where there is an employment
               agreement, change in control agreement or similar agreement in
               effect immediately prior to such termination of employment but
               such agreement either does not define good reason (or words of
               like import) or a good reason termination would not be permitted
               under such agreement at that time because other conditions were
               not satisfied, a voluntary termination due to a reduction by the
               Employer in the participant's base salary or "Individual Target
               Award" as defined in the Annual Plan (without the participant's
               written consent), other than a reduction which is part of a
               general cost reduction program affecting similarly situated
               employees of the Employer and which does not exceed twenty
               percent (20%) of the participant's base salary in the aggregate;
               or

          (b)  in the case where there is an employment agreement, change in
               control agreement or similar agreement in effect between the
               Employer and the participant immediately prior to such
               termination of employment that defines good reason (or words of
               like import) and a good reason termination would be permitted
               under such agreement at that time, termination that is or would
               be deemed to be for good reason (or words of like import) as
               defined


                                       5



<PAGE>


               under such agreement; provided, that with regard to any agreement
               that conditions good reason on occurrence of a change in control,
               such definition shall not apply until a change in control
               actually takes place and then only with regard to a termination
               on or after such change in control or a termination within six
               months prior thereto.

          "1934 Act" means the Securities Exchange Act of 1934, as amended from
time to time.

          "Officer" means an individual who is an employee of an Employer
holding the office of Vice President.

          "Omnibus Plan" means the Millennium Chemicals Inc. 2001 Omnibus
Incentive Compensation Plan effective January 26, 2001, as amended from time to
time.

          "Performance Period" means a period of three (3) consecutive Plan
Years.

          "Plan Year" means the calendar year.

          "Stock Unit" means the notational equivalent of one share of Common
Stock, the value of which is determined by and varies with the value of Common
Stock as further specified herein.

          "Shareholder Return Goal" means any objective shareholder return goal,
formula or standard in respect of a Performance Period established by the
Committee consistent with the terms hereof and the terms of the Omnibus Plan,
which shall be based on one or more of the following criteria applicable to the
Company' Common Stock, or any one or more other performance measures selected by
the Committee in its sole discretion consistent with the terms of the Omnibus
Plan: (i) Total Shareholder Return ("TSR") of the Company's Common Stock in a
Performance Period relative to the TSR of the Company's peers in the chemical
industry, the specific companies in said peer group to be determined by the
Committee, and (ii) increase in the Fair Market Value of the Company's Common
Stock over a Performance Period. The Shareholder Return Goals for the
Performance Period 2003-2005 are set out in Part B of Appendix I.

          "Strategic Goal" means any objective strategic goal, formula or
standard in respect of a Performance Period established by the Committee
consistent with the terms hereof and the terms of the Omnibus Plan, which may
incorporate (to the extent permitted under Section 162(m) of the Code)
provisions for disregarding or adjusting for changes in accounting methods,
corporate transactions (including but not limited to dispositions and
acquisitions) and other similar types of events or circumstances, and which
shall be based on one or more of the following criteria applicable to the
Company, any of its Affiliates, and any of their respective business units, or
any one or more other performance measures selected by the Committee in its sole
discretion consistent with the terms of the Omnibus Plan: (i) the attainment of
certain target levels of operating profit;


                                       6



<PAGE>


(ii) the attainment of a specified debt to capital ratio; or (iii) the
successful repositioning of Millennium's portfolio of businesses, including
effective acquisitions and disposals, consistent with the Company's strategy.
The Strategic Goals for the Performance Period 2003-2005 are set out in Part A
of Appendix I.

          "Total and permanent disability", with respect to a participant, has
the same meaning that such term (or similar term) has under the Employer's long
term disability plan applicable to such participant.

          "Total Shareholder Return" means, with respect to the Company or a
member of the Peer Group, as the case may be, the compounded return over the
three year Performance Period, including reinvested dividends. The final result
is compared to the Peer Group with a numeric ranking of peers from top TSR
return to bottom TSR return as specified in Part B of Appendix I.

          "Trustee" means the corporate trustee appointed from time to time by
the Company to administer the Millennium America Holdings Inc. Long Term
Incentive Plan and Executive Long Term Incentive Plan Trust established in
connection with the Plan.

          "Vesting Date" means the same date as the Award Distribution Date.

                                    ARTICLE 3
                          ELIGIBILITY AND PARTICIPATION

          Participation in the Plan in respect of each Plan Year shall be
determined by the Committee in its sole discretion. Eligibility for
participation in the Plan shall be limited to any individual who is employed by
an Employer as an Executive Officer or Officer. The adoption of the Plan shall
not be deemed to give any person a right to participate herein. Participation in
the Plan in respect of any Plan Year shall not be deemed to give any person a
right to participate in the Plan in any other Plan Year. All Awards granted
under this Plan are granted under and pursuant to the Omnibus Plan, and this
plan document is intended to specify the terms and conditions of the Awards as
granted under the Omnibus Plan.

                                    ARTICLE 4
                                  AWARD TARGET

          With respect to each Plan Year, the Committee shall establish in
writing the ELTIP Reference Percentage and Award Target for each participant or
class of participants.

          (a)  "ELTIP Reference Percentage" means a percentage established by
               the Committee in accordance with this Article 4.

          (b)  "Award Target" means an amount equal to the ELTIP Reference
               Percentage multiplied by a participant's base salary at the
               beginning of the relevant Performance Period.


                                       7



<PAGE>


                                    ARTICLE 5
                   EARNING, VESTING AND DISTRIBUTION OF AWARDS

          5.1 A participant shall earn an Award under the Plan by meeting the
requirements specified herein; except that (i) no award shall be earned unless
the Company has distributed dividends on its Common Stock during each quarter
year of the Performance Period at a rate per share equal to or higher than the
rate in effect during the first quarter year of the Performance Period, unless
the Board certifies that it has reduced the dividend rate for reasons that do
not involve a deterioration of the overall financial position or prospects of
the Company, and (ii) all awards are subject to final review by the Committee,
which may reduce any and all awards at its complete discretion.

          5.2 A participant shall fully vest in his or her earned Award in
respect of a Performance Period on the Award Distribution Date for that
Performance Period.

          5.3 Distribution of an Award shall be made in cash and shares of
Common Stock on the Award Distribution Date (or as soon as practicable
thereafter, once all required withholding taxes are paid as provided in Section
13.1 hereof). The adjusted amount of the Award to be distributed, withheld
pursuant to Section 13.1 hereof, and/or deferred pursuant to Article 9 hereof
(the "Adjusted Award") shall be determined by dividing the Award by the average
daily closing price of Common Stock on the New York Stock Exchange on each
trading day during the relevant Performance Period (the "Average Stock Price"),
and multiplying the result by the closing price on the New York Stock Exchange
on the trading day immediately preceding the Award Distribution Date (the
"Closing Stock Price"). The number of shares of Common Stock to be distributed
shall be determined by dividing sixty percent (60%) of the undeferred portion of
the Adjusted Award (the "Net Award") by the Closing Stock Price and rounding the
result down to the nearest whole share. The amount of cash to be utilized for
tax withholding as provided in Section 13.1 hereof, and, to the extent any such
cash is not so withheld, distributed, shall be determined by multiplying number
of whole shares to be distributed by the closing Stock Price and subtracting the
result from the Net Award.

                                    ARTICLE 6
                                     AWARDS

          6.1 Goals-based Award Targets. For each Performance Period fifty
percent (50%) of each participant's Award Target shall be the "Strategic
Goals-based Award Target", and fifty percent (50%) of each participant's Award
Target shall be the "Shareholder Return Goals-based Award Target" (together the
"Goals-based Award Targets").

          6.2 Goals. With respect to each Performance Period, the Committee
shall establish in writing one or more Strategic Goals that must be attained for
a participant or class of participants to earn all or part of the Strategic
Goals-based Award Target, and one or more Shareholder Return Goals that must be
attained for a participant or class of participants to earn all or part of the
Shareholder Return-based Award Target.


                                       8



<PAGE>


The Committee shall prescribe one or more formulas to determine the percentage
(including a maximum percentage) of each such Goals-based Award Targets, or the
individual Strategic Goals and Shareholder Return Goals that are components
thereof, that may be earned based upon the degree of attainment of the Strategic
Goals and Shareholder Return Goals during such Performance Period. The Committee
shall specify the minimum goals that shall be attained before any Goals-based
Award Target may be earned. If the Committee fails to specify such a minimum,
the Goals-based Award Targets established by the Committee shall be deemed to be
minimums, unless the Committee determines otherwise at any time in its sole
discretion. The Strategic Goals and Shareholder Return Goals for the Performance
Period 2003 through 2005 are attached hereto as Appendix I.

          6.3 Establishment of Requirements. With respect to each Performance
Period, the Committee's establishment of the ELTIP Reference Percentage, Award
Target, Goals-based Award Targets, and the formula to determine the percentage
of the Goals-based Award Targets to be earned based upon the degree of
attainment of the established Strategic Goals and Shareholder Return Goals shall
be made no later than March 31 of each the first Plan Year in each Performance
Period (or such later date as permitted by the Committee), and after such date
the Committee shall not increase the amount of the Goals-based Award Targets
established under this Section 6.3 for such Performance Period.

          6.4 Committee Certification. As soon as administratively practicable
following the end of each Performance Period, the Committee shall determine in
its sole discretion whether the Strategic Goals and Shareholder Return Goals
established for each participant or class of participants have been attained and
shall certify the degree of such attainment in writing or in the minutes of the
Committee.

          6.5 Earned Awards. The Award or Awards earned by a participant for a
Performance Period shall be equal to the percentage of such participant's such
Goals-based Award Targets established under Section 6.2 above that corresponds
with the degree of attainment certified by the Committee pursuant to Section 6.4
above . Unless otherwise specified by the Committee, no Awards shall be earned
by or distributed to a participant with respect to any Performance Period unless
the minimum Strategic Goals and/or Shareholder Return Goals for such participant
or class of participants is attained for such Performance Period.

          6.6 Requirement of Employment. Except as otherwise provided in Section
7.1 and Article 8, Awards may be earned only by a participant who is an active
employee of an Employer on the last day of the Performance Period.

                                    ARTICLE 7
                            TERMINATION OF EMPLOYMENT

          7.1 Termination of Employment. Except as otherwise provided in Article
8, a participant does not earn an Award in the event such participant terminates


                                       9



<PAGE>


employment with respect to all Employers prior to the last day of the
Performance Period with respect to such Award; provided, however, that a
participant whose employment is terminated prior to such date (a) as a result of
such participant's death or total and permanent disability, (b) on or after
attaining age 50 with at least 15 years of service, or on or after attaining 55
with at least 10 years of service, with one or more Employers and their
Affiliates and predecessors thereof (or such other age and/or service
requirements as the Committee in its sole discretion determines), (c) under such
other circumstances that the Committee in its sole discretion deems appropriate,
(d) by all Employers other than for Cause, except as provided in Section
13.2(b), or (e) by such participant for Good Reason, shall continue to
participate in the Plan subject to its terms; and, provided, further, that a
participant whose employment is terminated on or before the end of such
Performance Period for any of the reasons specified in clauses (a) through (e)
above shall continue to participate in the Plan, subject to its terms, to the
extent of a pro-rata portion of such Award based on the number of full months of
service in such Performance Period prior to such termination.

          7.2 Certain Former Participants. For purposes of the Plan, the term
"participant" shall include an individual (a) with respect to whom any Award has
been allocated but not yet vested or forfeited and (b) whose employment was
terminated with respect to all Employers prior to the Vesting Date with respect
to any Award but who is entitled to continue to participate in the Plan pursuant
to Section 7.1, above.

                                    ARTICLE 8
                                CHANGE IN CONTROL

          Not withstanding any other provision of this Plan, in the event of a
Change in Control of the Company, the Award Target with respect to the
Performance Period in which the Change in Control of the Company occurs shall
immediately be deemed to have been earned and vested, and shall be distributed,
either in shares of Common Stock or an equivalent value in cash, as determined
in the Committee's sole discretion, to the participant as soon as practicable
after a Change in Control of the Company. The number of shares of Common Stock
to be distributed to any participant shall be determined by dividing the Award
Target by the closing price of the Common Stock on the New York Stock Exchange
on the date the Change in Control occurs.

                                    ARTICLE 9
                               MANDATORY DEFERRALS

          Notwithstanding Section 5.3 and subject to Article 8, the Committee
may require a participant to defer all or a portion of any distribution of an
Award in any case where the Company anticipates that such payment or portion
thereof would be nondeductible pursuant to Section 162(m) of the Code (the
"Deferred Amount"). The Deferred Amount shall be held in cash, and interest
shall accrue on the Deferred Amount from the date of deferral (which is the
Award Distribution Date) until the date of payment at an annual rate equal to
the base commercial lending rate announced by Chase Manhattan Bank in effect
from time to time during the period of such deferral. When the


                                       10



<PAGE>


Award is paid it shall be paid in cash, or cash and Common Stock at the
discretion of the Committee based on the Fair Market Value of the Common Stock
on the Award Distribution Date.

                                   ARTICLE 10
                                   ADJUSTMENTS

          Subject to Article 8, in the event there is any change in the Common
Stock, through merger, consolidation, reorganization, recapitalization, stock
dividend, stock split, reverse stock split, split-up, split-off, spin-off,
combination of shares, exchange of shares, dividend in kind or other like change
in capital structure or cash dividends to shareholders of the Company (an
"Adjustment Event"), the number of undistributed Stock Units, if any, shall be
appropriately adjusted (rounded down to the nearest one hundredth of a share) by
the Committee in its sole judgment so as to give appropriate effect to such
Adjustment Event.

                                   ARTICLE 11
                                 ADMINISTRATION

          11.1 Responsibility. The Committee shall be the administrator of the
Plan. The Committee shall have the responsibility, in its sole discretion, to
control, operate, manage and administer the Plan in accordance with its terms
and shall have all the discretionary authority that may be necessary or helpful
to enable it to discharge its responsibilities with respect to the Plan.

          11.2 Delegation of Authority. The Committee may delegate in writing to
one or more of its members, or to one or more agents, such administrative duties
and powers, including any duty or power under Articles 3 through 6, as it may
deem advisable. In addition, the Committee or any such delegate may employ one
or more persons to render advice with respect to any responsibility the
Committee or such delegate may have under the Plan. The Committee or any such
delegate may employ such legal or other counsel, consultants and agents as it
may deem desirable for the administration of the Plan and may rely upon any
opinion or computation received from any such counsel, consultant or agent.
Notwithstanding the foregoing, the Committee may not delegate any duties if such
delegation would be in contravention of Rule 16b-3 or other applicable rules
under Section 16(b) of the 1934 Act.

          11.3 Determinations and Interpretations by the Committee. All
determinations and interpretations made by the Committee in good faith shall be
binding and conclusive on all Participants and their heirs, successors and legal
representatives. In the event this Plan conflicts in any way with any provision
of the Omnibus Plan, the terms of the Omnibus Plan shall supercede the terms of
this Plan, as this Plan and all Awards under this Plan are granted under the
Omnibus Plan.


                                       11



<PAGE>


                                   ARTICLE 12
                                     CLAIMS

          12.1 Claims Procedure. If any participant or his or her designated
beneficiary has a claim for amounts which are not being paid, such claimant may
file with the Committee a written claim, in such form as is provided or approved
by the Committee, setting forth the amount and nature of the claim, supporting
facts, and the claimant's address. The Committee shall notify each claimant of
its decision in writing by registered or certified mail within ninety (90) days
after its receipt of a claim, unless special circumstances require an extension
of time for processing the claim. If such an extension of time is required,
written notice of the extension shall be furnished to the claimant prior to the
termination of the initial ninety (90) day period, which notice shall specify
the special circumstances requiring an extension and the date by which a final
decision will be reached (which date shall not be later than one hundred eighty
(180) days after the date on which the claim was filed). If a claim is denied,
the written notice of denial shall set forth the reasons for such denial, refer
to pertinent Plan provisions on which the denial is based, describe any
additional material or information necessary for the claimant to realize the
claim, and explain the claim review procedure under the Plan.

          12.2 Claims Review Procedure. A claimant whose claim has been denied
or such claimant's duly authorized representative may file, within sixty (60)
days after notice of such denial is received by the claimant, a written request
for review of such claim by the Committee. If a request is so filed, the
Committee shall review the claim and notify the claimant in writing of its
decision within sixty (60) days after receipt of such request. In special
circumstances, the Committee may extend for up to sixty (60) additional days the
deadline for its decision. The notice of the final decision of the Committee
shall include the reasons for its decision and specific references to the
provisions of the Plan on which the decision is based. The decision of the
Committee shall be final and binding on all parties.

                                   ARTICLE 13
                               GENERAL PROVISIONS

          13.1 Withholding Taxes. By participation in the Plan, each participant
shall be deemed to (a) agree to reimburse the Employer for any taxes required by
any governmental regulatory authority to be withheld or otherwise deducted by
such entity in respect of the payment of any amounts hereunder, and (b)
authorize the Employer to withhold an amount sufficient to pay such taxes from
any Award paid or payable to the participant or on the participant's behalf in
any manner determined by the Committee in its sole discretion, including, with
respect to a Goals-based Award, by withholding from the cash portion of any
award or selling sufficient shares of Common Stock attributable to such Award at
such price(s) and on such terms as the Committee in its sole discretion may
determine, or repurchasing shares at the Fair Market Value of Common Stock. If
the Committee does not determine or specify any particular withholding
methodology, the Employer shall withhold from the cash potion of any award and,
if such amount is not sufficient, the participants shall pay the remainder
thereof in cash.


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<PAGE>


          13.2 Assignability and Transferability.

          (a)  No interest in the Plan shall be assignable or transferable by a
               participant other than by will or the laws of descent and
               distribution. Any purported assignment or transfer of an interest
               in the Plan to a creditor of a participant shall be null and
               void, and such interest may be forfeited at the discretion of the
               Committee.

          (b)  The Company may assign its obligations under the Plan with
               respect to participants whose employment is terminated and who
               are employed by a successor entity, provided that such successor
               entity agrees to assume such obligations with respect to such
               participants.

          13.3 Funding.

          (a)  The Company shall make no provision for the funding of any
               undistributed Awards under the Plan that would cause the Plan to
               be a funded plan for purposes of Section 404(a) (5) of the Code
               or Title I of ERISA, or would cause the Plan to be other than an
               "unfunded and unsecured promise to pay money or other property in
               the future" under Treasury Regulations 'SS' 1.83-3(e). Except
               following a Change in Control, the Company shall have no
               obligation to make any arrangement for the accumulation of funds
               to pay any amounts under the Plan. Subject to the preceding
               sentence, the Company, in its sole discretion, may establish one
               or more grantor trusts described in subpart E, part I, subchapter
               J, chapter 1, subtitle A of the Code to accumulate shares of
               Common Stock or other amounts to pay amounts under the Plan,
               provided that the assets of such trusts shall be required to be
               used to satisfy the claims of the Company's general creditors in
               the event of the Company's bankruptcy or insolvency.

          (b)  In the event that the Company shall decide to establish an
               advance accrual reserve on its books against the future expense
               of payments undistributed Awards, such reserve shall not under
               any circumstances be deemed any asset of the Plan but, at all
               times, shall remain a part of the general assets of the Company
               subject to the claims of the Company's general creditors.

          13.4 No Right, Title, or Interest in Company Assets. Participants
shall have no right, title, or interest whatsoever in or to any investments
which the Company


                                       13



<PAGE>


may make to aid it in meeting its obligations under the Plan. Nothing contained
in the Plan, and no action taken pursuant to its provisions, shall create a
trust of any kind, or a fiduciary relationship between the Company and any
participant, beneficiary, legal representative or any other person. To the
extent that any person acquires a right to receive payments from the Company
under the Plan, such right shall be no greater than the right of an unsecured
general creditor of the Company. All payments to be made hereunder shall be paid
from the general funds of the Company, including any grantor trust described in
Section 13.3(a). The Plan is not intended to be subject to ERISA.

          13.5 No Right to Continued Employment. The participant's rights, if
any, to continue in the employ of the Employer shall not be enlarged or
otherwise affected by his or her participation in the Plan, and the Employer
reserves the right to terminate the employment of any participant at any time,
subject to any limitations or procedures as may be set forth in a separate
employment or retention agreement between the Employer and such participant.

          13.6 Governing Law. The Plan, all awards granted hereunder, and all
actions taken in connection herewith shall be governed by and construed in
accordance with the laws of the State of New Jersey without reference to
principles of conflict of laws, except as superseded by applicable federal law.

                                   ARTICLE 14
                            AMENDMENT AND TERMINATION

          14.1 Right to Amend, Suspend or Terminate. The Board of Directors may
amend, suspend or terminate the Plan and/or reduce Awards and Award Targets at
any time with or without prior notice; provided, however, that no action
authorized by this Section 14.1 shall impair any rights or benefits which
theretofore vested hereunder without the written consent of the affected
participants.

          14.2 Termination. Upon a termination of the Plan, the Committee may,
but is not required to, pay out the Award Target or unvested Awards, either in
whole or in part, under the Plan.

          14.3 No Impairment. The following events shall not constitute an
impairment of any rights or benefits under the Plan: (a) any forfeiture of
unvested Awards upon an amendment, suspension or termination of the Plan or (b)
any amendment of the term "Change in Control," provided that such amendment
shall not be effective for at least six (6) months following its adoption.


                                       14



<PAGE>


                                   APPENDIX I

  Strategic Goals-Based Award and Shareholder Return Goals-Based Award for the
                      Performance Period 2003 through 2005

A.   Strategic Goals-based Award

     1.   Operating Profit Award - Sixty percent (60%) of the Strategic
          Goals-based Award will be based on the Company's Cumulative Operating
          Profit (the "Operating Profit Award"), determined as follows:

          a.   After the end of the 2003 through 2005 Performance Period, the
               Committee shall determine the Company's Cumulative Operating
               Profit over the Performance Period.

          b.   If the Company's Cumulative Operating Profit for the Performance
               Period is less than $525 million (the "Threshold Level"),
               participants shall earn no Operating Profit Award

          c.   If the Company's Cumulative Operating Profit for the Performance
               Period is at least $525 million but less than $600 million (the
               "Target Level"), participants shall earn fifty percent (50%) of
               the Operating Profit Award.

          d.   If the Company's Cumulative Operating Profit for the Performance
               Period is $600 million or higher but less than $720 million (the
               "Maximum Level"), participants shall earn one hundred percent
               (100%) of the Operating Profit Award

          e.   If the Company's Cumulative Operating Profit for the Performance
               Period is $720 million or above, participants shall earn one
               hundred and twenty percent (120%) of the Operating Profit Award.

          f.   The term "Cumulative Operating Profit" as used above means the
               cumulative operating profit of the Company and its consolidated
               subsidiaries for the Performance Period as determined by
               generally accepted accounting principals consistently applied.

          g.   Cumulative Operating Profit amount between the Threshold Level,
               Target Level and Maximum Level are interpolated in whole
               percentage points to calculate the Awards.

          h.   The Committee may in its sole discretion adjust the Cumulative
               Operating Profit goals set out above to reflect the acquisition
               and disposition of businesses and other unusual events occurring
               during the Performance Period.


                                       15



<PAGE>


     2.   Debt-to-Total Capital Ratio Award - Twenty percent (20%) of the
          Strategic Goals-based Award will be based on the Company's
          Debt-to-Total Capital ratio (the "Debt-to-Total Capital Award"),
          determined as follows:

          a.   After the end of the 2003 through 2005 Performance Period, the
               Committee shall determine the Company's Debt-to-Total Capital
               ratio at the end of the Performance Period.

          b.   If the Company's Debt-to-Capital ratio is less than fifty percent
               (50%), participants will earn one hundred percent (100%) of the
               Debt-to-Total Capital Award.

          c.   If the Company's Debt-to-Capital ratio is fifty percent (50%) or
               higher, participants will earn no Debt-to-Total Capital Award.

          d.   The term "Debt" as used above means the Total Indebtedness of the
               Company and its consolidated subsidiaries as defined in the
               Company's Credit Agreement with J.P. Morgan, the Bank of America,
               and other banks dated as of June 18, 2001, and amended through
               January 1, 2003, (the "Credit Agreement") for the purposes of
               determining compliance under Section 6.11 of the Credit
               Agreement.

          e.   The term "Total Capital" as used above means Debt plus total
               shareholder's equity as determined under generally accepted
               accounting principles for the Company's consolidated financial
               statements.

     3.   Business Portfolio Award - Twenty percent (20%) of the Strategic
          Goals-based Award will be based on the successful repositioning of the
          Company's portfolio of businesses (the "Business Portfolio Award"),
          determined as follows:

          a.   After the end of the 2003 through 2005 Performance Period, the
               Committee shall determine whether the Company has made
               substantial progress toward repositioning its portfolio of
               businesses, including effective acquisitions and disposals,
               consistent with the Company's strategy.

          b.   If the Committee determines that such substantial progress has
               been made, participants shall earn one hundred percent (100%) of
               the Business Portfolio Award.

          c.   If the Committee determines that such substantial progress has
               not been made, participants shall earn no Business Portfolio
               Award.


                                       16



<PAGE>


          d.   If the Committee determines that an acceptable minimum level of
               progress has been made, the Committee may determine that a
               percentage of the Business Portfolio Award less than one hundred
               percent (100%) should be earned based on progress achieved.

B.   Shareholder Return-based Award

     1.   Relative TSR Goal - After the end of the 2003 through 2005 Performance
          Period the Committee shall determine the Total Shareholder Return
          ("TSR") for each member of the group of companies listed below (the
          "Peer Group"), and shall rank the members of the Peer Group from
          highest to lowest TSR.

          a.   If the committee determines that the Company's ranking in the
               Peer Group is first or second (including a tie for second), 150%
               of the Shareholder Return-based Award is potentially available to
               be earned by participants, depending on performance against the
               Stock Price Goal set out below.

          b.   If the Committee determines that the Company's ranking in the
               Peer Group is not first or second but equals or exceeds the
               median, 100% of the Shareholder Return-based Award is potentially
               available to be earned by participants, depending on performance
               against the Stock Price Goal set out below.

          c.   If the Committee determines that the Company's ranking in the
               Peer Group is below the median, none of the Shareholder
               Return-based Award is potentially available to be earned by
               participants; except that if the Stock Price Goal set out below
               is attained, fifty percent (50%) of the Shareholder Return-based
               Award is available.

          d.   If any company in the Peer Group list set out below is not
               publicly traded on the New York Stock Exchange or NASDAQ at the
               end of the Performance Period, it will not be included as a peer
               company. If the number of companies in the Peer Group changes so
               that a single peer company cannot be determined as the median,
               the lower of the two companies ranked in the middle of the list
               will be deemed to be the median.

     2.   Stock Price Goal - After the end of the 2003 through 2005 Performance
          Period the Committee shall determine the average of the Fair Market
          Values of the Company's Common Stock on each trading day during the
          Performance Period.

          a.   If the average of such Fair Market Values during the last eleven
               calendar quarters of the Performance Period (April 1, 2003
               through


                                       17



<PAGE>


               December 31, 2005) equals or exceeds the average of such Fair
               Market Values during the first calendar quarter of the
               Performance Period (January 1 though March 31, 2003),
               participants shall earn 100% of the Awards potentially available
               under Section 1 immediately above, depending on performance
               against the TSR goals, above.

          b.   If the average of such Fair Market Values during such eleven
               calendar quarters is lower than the average of such Fair Market
               Values during such first calendar quarter, the Awards potentially
               available under Section 1 immediately above shall be reduced by
               one half, with the result that if the Company's TSR ranking in
               the Peer Group is below the median, participants earn none of the
               Shareholder Return-based Award.

C.   The Committee in its sole discretion may make adjustments to any Award
     based on acquisitions, dispositions, and any other unusual item occurring
     after the commencement of the Performance Period.

     The Peer Group consists of:

<TABLE>
          <S>                                       <C>
          Cabot Corporation                         Lyondell Chemical Company

          Celanese AG                               Millennium Chemicals Inc.

          Dow Chemical Company                      NL Industries, Inc.

          Eastman Chemical Company                  NOVA Chemicals Corporation

          E.I. du Pont de Nemours and Company       PPG Industries Inc.

          Englehard Corporation                     Rohm and Haas Company

          Great Lakes Chemical Corporation          Solutia, Inc.

          Hercules Incorporated                     W.R. Grace & Co.

          International Flavors & Fragrances Inc.
</TABLE>


                                       18