Exhibit 10.4


 


Execution Copy


 




 





EMPLOYEE BENEFITS AGREEMENT


 


BY AND BETWEEN


 


KERR-McGEE CORPORATION


 


AND


 


TRONOX INCORPORATED


 


DATED AS OF November 28,
2005




 





 





















 


TABLE OF CONTENTS


 


	
  Article 1.
  Definitions and Construction

  	
  2

  
	
   

  	
   

  	
   

  
	
  1.01.

  	
  Definitions.

  	
  2

  
	
  1.02.

  	
  Construction.

  	
  9

  
	
   

  	
   

  	
   

  
	
  Article 2.
  General Principles

  	
  10

  
	
   

  	
   

  	
   

  
	
  2.01.

  	
  Assumption
  of Liabilities.

  	
  10

  
	
  2.02.

  	
  Participation
  in Kerr-McGee Employee Benefit Plans.

  	
  10

  
	
  2.03.

  	
  Establishment
  and Maintenance of Tronox Employee Benefit Plans.

  	
  11

  
	
  2.04.

  	
  Terms
  of Participation in Tronox Employee Benefit Plans.

  	
  12

  
	
  2.05.

  	
  Allocation
  of Costs.

  	
  13

  
	
   

  	
   

  	
   

  
	
  Article 3.
  Terms of Employment and Compensation

  	
  14

  
	
   

  	
   

  	
   

  
	
  3.01.

  	
  Salary
  and Base Pay.

  	
  14

  
	
  3.02.

  	
  Incentive
  Awards.

  	
  14

  
	
  3.03.

  	
  Severance.

  	
  15

  
	
  3.04.

  	
  Success
  Bonus Program.

  	
  15

  
	
  3.05.

  	
  2005
  Retention Program.

  	
  15

  
	
   

  	
   

  	
   

  
	
  Article 4.
  Defined Benefit Retirement Plans

  	
  16

  
	
   

  	
   

  	
   

  
	
  4.01.

  	
  Establishment
  of Mirror Retirement Plan and Trust.

  	
  16

  
	
  4.02.

  	
  Assumption
  of Pension Plan Liabilities.

  	
  16

  
	
  4.03.

  	
  Transfer
  of Assets.

  	
  16

  
	
  4.04.

  	
  Pension
  Plan Transfer Amount.

  	
  17

  
	
   

  	
   

  	
   

  
	
  Article 5.
  Defined Contribution Retirement Plans

  	
  18

  
	
   

  	
   

  	
   

  
	
  5.01.

  	
  Establishment
  of SIP and Trust

  	
  18

  
	
  5.02.

  	
  Vesting
  in Kerr-McGee SIP.

  	
  18

  
	
  5.03.

  	
  Acceptance
  of Rollovers.

  	
  18

  
	
  5.04.

  	
  Maintenance
  of Universal Life Policy.

  	
  18

  
	
   

  	
   

  	
   

  
	
  Article 6.
  Health and Welfare Plans

  	
  19

  
	
   

  	
   

  	
   

  
	
  6.01.

  	
  Establishment
  of Health and Welfare Plans.

  	
  19

  
	
  6.02.

  	
  Health
  and Welfare Plans.

  	
  19

  
	
  6.03.

  	
  Special
  Rule for HCSA and DCSA Plans.

  	
  19

  
	
  6.04.

  	
  Vendor
  Contracts.

  	
  20

  
	
  6.05.

  	
  Disability
  Plans.

  	
  21

  
	
  6.06.

  	
  Life
  Insurance Plans.

  	
  21

  
	
  6.07.

  	
  COBRA.

  	
  21

  
	
  6.08.

  	
  Leave
  of Absence Programs and FMLA.

  	
  22

  
	
  6.09.

  	
  Kerr-McGee
  Workers’ Compensation Program.

  	
  22

  
	
  6.10.

  	
  Kerr-McGee
  Employee Assistance Program.

  	
  22

  
	
  6.11.

  	
  Unemployment
  Insurance Tax Management Program.

  	
  23

  
	
  6.12.

  	
  Administration.

  	
  23

  
	
  6.13.

  	
  UMWA
  Combined Benefit Fund.

  	
  23

  
	
  6.14.

  	
  Medicare
  Part B Reimbursements.

  	
  23

  
	
  6.15.

  	
  Reimbursements
  by Kennecott.

  	
  23

  
	
  6.16.

  	
  Application
  of Article 6 to Tronox Entities.

  	
  23

  



 





















 


	
  Article 7.
  Stock-Based Compensation

  	
  25

  
	
   

  	
   

  	
   

  
	
  7.01.

  	
  Establishment of Plan.

  	
  25

  
	
  7.02.

  	
  Stock Options.

  	
  25

  
	
  7.03.

  	
  Restricted Stock.

  	
  25

  
	
   

  	
   

  	
   

  
	
  Article 8.
  Executive Benefits

  	
  26

  
	
   

  	
   

  	
   

  
	
  8.01.

  	
  Establishment of Plans.

  	
  26

  
	
  8.02.

  	
  Kerr-McGee Benefits
  Restoration Plan.

  	
  26

  
	
  8.03.

  	
  Rabbi Trust.

  	
  26

  
	
  8.04.

  	
  Continuity Agreements.

  	
  26

  
	
  8.05.

  	
  Code Section 162(m).

  	
  27

  
	
   

  	
   

  	
   

  
	
  Article 9.
  Miscellaneous Benefits

  	
  28

  
	
   

  	
   

  	
   

  
	
  9.01.

  	
  Service Award Program.

  	
  28

  
	
  9.02.

  	
  Other Welfare Plans.

  	
  28

  
	
   

  	
   

  	
   

  
	
  Article 10.
  Non-U.S. Employees and Employee Benefit Plans

  	
  29

  
	
   

  	
   

  	
   

  
	
  10.01.

  	
  In General.

  	
  29

  
	
  10.02.

  	
  Stock Opportunity Grants.

  	
  29

  
	
  10.03.

  	
  Stock Options—Foreign Plans.

  	
  29

  
	
   

  	
   

  	
   

  
	
  Article 11.
  General and Administrative Provisions

  	
  30

  
	
   

  	
   

  	
   

  
	
  11.01.

  	
  Actuarial and Accounting
  Methodologies and Assumptions.

  	
  30

  
	
  11.02.

  	
  Sharing of Participant
  Information.

  	
  30

  
	
  11.03.

  	
  Reporting, Disclosure, and
  Communications to Participants.

  	
  30

  
	
  11.04.

  	
  Non-Termination of
  Employment, No Third-Party Beneficiaries.

  	
  31

  
	
  11.05.

  	
  Plan Audits.

  	
  31

  
	
  11.06.

  	
  Beneficiary Designations.

  	
  33

  
	
  11.07.

  	
  Cooperation in Requests for
  Rulings and DOL Opinions.

  	
  33

  
	
  11.08.

  	
  Fiduciary Matters.

  	
  33

  
	
  11.09.

  	
  Collective Bargaining.

  	
  33

  
	
  11.10.

  	
  Consent of Third Parties.

  	
  33

  
	
  11.11.

  	
  General Obligations as Plan
  Sponsors.

  	
  34

  
	
  11.12.

  	
  Adjustments to Plan
  Transfers.

  	
  34

  
	
   

  	
   

  	
   

  
	
  Article 12.
  Miscellaneous

  	
  35

  
	
   

  	
   

  	
   

  
	
  12.01.

  	
  Effect If Distribution Does
  Not Occur.

  	
  35

  
	
  12.02.

  	
  Relationship of Parties.

  	
  35

  
	
  12.03.

  	
  Affiliates.

  	
  35

  
	
  12.04.

  	
  Disputes.

  	
  35

  
	
  12.05.

  	
  Arbitration.

  	
  35

  
	
   

  	
   

  	
   

  
	
  Schedule I

  	
  Kerr-McGee U.S. Employee Benefit Plans,
  Programs, and Policies

  	
   

  
	
   

  	
   

  	
   

  
	
  Schedule II

  	
  Kerr-McGee Non-U.S. Employee Benefit Plans,
  Programs, and Policies

  	
   

  



 





















 


EMPLOYEE
BENEFITS AGREEMENT


 


This EMPLOYEE BENEFITS
AGREEMENT, dated as of November 28, 2005, is by and between Kerr-McGee and
Tronox.  Capitalized terms used in this
Agreement (other than the formal names of Kerr-McGee Plans and related trusts
of Kerr-McGee) and not otherwise defined shall have the respective meanings
assigned to them in Article 1 of this Agreement or as assigned to them in
the Principal Agreement.


 


RECITALS


 


WHEREAS, the Board of
Directors of Kerr-McGee has determined that it is in the best interests of Kerr-McGee
and its stockholders to separate Kerr-McGee’s existing business into two
independent businesses;


 


WHEREAS, in order to
separate Kerr-McGee’s existing business into two independent businesses,
Kerr-McGee and Tronox have entered into the Master Separation Agreement among Kerr-McGee Corporation, Kerr-McGee Worldwide
Corporation and Tronox Incorporated,
dated as of the same date as this Agreement (the “Principal Agreement”), and
certain other agreements that will govern matters relating to the separation,
the Distribution or Exchange, and the relationship of Kerr-McGee and Tronox and
their respective Subsidiaries following the Distribution or Exchange; and


 


WHEREAS, pursuant to the
Principal Agreement, Kerr-McGee and Tronox have agreed to enter into this
Agreement allocating assets, liabilities, and responsibilities with respect to
certain employee compensation and benefit plans and programs between them.


 


NOW, THEREFORE, in
consideration of the mutual agreements, provisions and covenants contained in this
Agreement, the parties, intending to be legally bound, agree as follows:


 


1





















 


ARTICLE 1.  DEFINITIONS
AND CONSTRUCTION


 


1.01.                     Definitions.  


 


For
purposes of this Agreement the following terms shall have the following
meanings:


 


(a)                                  Agreement.  Agreement
means this Employee Benefits Agreement, including all the Schedules and
Exhibits hereto.


 


(b)                                 Article.  Article means
an Article of this Agreement.


 


(c)                                  Award. 
Award means an award under a Stock Plan, a Short Term Incentive Plan, or
a Non-U.S. Benefit Plan.


 


(d)                                 Benefits Restoration Plan. 
Benefits Restoration Plan, when immediately preceded by “Kerr-McGee,”
means the Kerr-McGee Corporation Benefits Restoration Plan.  When immediately preceded by “Tronox,”
Benefits Restoration Plan means the non-qualified retirement plan to be
established by Tronox pursuant to Section 2.03 that corresponds to the
defined benefit portion of the Kerr-McGee Benefits Restoration Plan.


 


(e)                                  Cafeteria Plan.  Cafeteria Plan, when immediately preceded by “Kerr-McGee,”
means the cafeteria plan component of the Kerr-McGee Health and Protection
Plan, which includes the HCSA and the DCSA. 
When immediately preceded by “Tronox,” cafeteria plan means the plan
that may be established by Tronox pursuant to Section 2.03 that
corresponds to the Kerr-McGee Cafeteria Plan.


 


(f)                                    Change In Control. 
Change in Control means the occurrence, on or after the Offering Date
and before the Close of the Distribution Date, of a “Change in Control” as such
term is defined in either the (1) Kerr-McGee Corporation 2005 Long Term
Incentive Plan as amended through the date of this Agreement or (2) Tronox
Incorporated 2005 Long Term Incentive Plan.


 


(g)                                 Close of the Distribution
Date.  Close of the Distribution Date means 11:59:59 P.M.,
Eastern Standard Time or Eastern Daylight Time (whichever shall then be in
effect), on the Distribution Date.


 


(h)                                 COBRA.  COBRA
means the continuation coverage requirements for “group health plans” under
Title X of the Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended, and as codified in Code section 4980B and ERISA sections 601
through 608.


 


(i)                                     Code. 
Code means the Internal Revenue Code of 1986, as amended, or any
successor federal income tax law. 
Reference to a specific Code provision also includes any proposed,
temporary, or final regulation or other guidance of general applicability in
force under that provision.


 


(j)                                     DCSA.  DCSA, when immediately preceded by “Kerr-McGee,”
means the dependent care spending account component of the Kerr-McGee Cafeteria
Plan.  When immediately preceded by “Tronox,”
DCSA means the plan to be established by Tronox pursuant to Section 2.03
that corresponds to the Kerr-McGee DCSA.


 


2





















 


(k)                                  Disability Plans.  Disability Plans, when immediately preceded by “Kerr-McGee,”
means the short term disability and long term disability components of the
Kerr-McGee Health and Protection Plan and the Kerr-McGee Pigments (Savannah), Inc.
Personal Protection Plan.  When
immediately preceded by “Tronox,” Disability Plans means the plans to be
established by Tronox pursuant to Section 2.03 that correspond to the
respective Kerr-McGee Disability Plans.


 


(l)                                     Distribution Date. 
Distribution Date means the date on which the Distribution or Exchange
(both as defined in the Principal Agreement) occurs.


 


(m)                               DOL.  DOL means
the U.S. Department of Labor.


 


(n)                                 EAP.  EAP, when immediately preceded by “Kerr-McGee,”
means the employee assistance component of the Kerr-McGee Health and Protection
Plan and the Kerr-McGee Pigments (Savannah), Inc. Personal Protection
Plan.  When immediately preceded by “Tronox,”
EAP means the plans to be established by Tronox pursuant to Section 2.03
that correspond to the Kerr-McGee EAP.


 


(o)                                 Employee Benefit Plans. 
Employee Benefit Plans, when immediately preceded by “Kerr-McGee,” means
the Kerr-McGee Retirement Plan, the Kerr-McGee SIP, the Kerr-McGee Stock Plans,
the Kerr-McGee Executive Benefit Plans, the Kerr-McGee Short Term Incentive
Plans, the Kerr-McGee Health and Welfare Plans, the Kerr-McGee Other Benefit
Programs, and the Kerr-McGee Non-U.S. Benefit Plans.  When immediately preceded by “Tronox,”
Employee Benefit Plans means the Tronox Retirement Plan, the Tronox SIP, the
Tronox Stock Plans, the Tronox Executive Benefit Plans, the Tronox Short Term
Incentive Plans, the Tronox Health and Welfare Plans, the Tronox Other Benefit
Programs, and the Tronox Non-U.S. Benefit Plans. 


 


(p)                                 ERISA. 
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.  Reference to a specific
provision of ERISA also includes any proposed, temporary, or final regulation
or other guidance of general applicability in force under that provision.


 


(q)                                 Executive Benefit Plans. 
Executive Benefit Plans, when immediately preceded by “Kerr-McGee,”
means the Kerr-McGee Benefits Restoration Plan and the Kerr-McGee Corporation
Chemical Division Nonqualified Retirement Plan. 
When immediately preceded by “Tronox,” Executive Benefit Plans means the
non-qualified retirement plans to be established by Tronox pursuant to Section 2.03
that correspond to the defined benefit portion of the Kerr-McGee Benefits
Restoration Plan and to the Kerr-McGee Corporation Chemical Division
Nonqualified Retirement Plan.


 


(r)                                    FMLA.  FMLA
means the Family and Medical Leave Act of 1993, as amended.


 


(s)                                  HCSA.  HCSA, when immediately preceded by “Kerr-McGee,”
means the health care spending account component of the Kerr-McGee Cafeteria
Plan.  When immediately preceded by “Tronox,”
HCSA means the plan to be established by Tronox pursuant to Section 2.03
that corresponds to the Kerr-McGee HCSA.


 


(t)                                    Health and Welfare Plans. 
Health and Welfare Plans, when immediately preceded by “Kerr-McGee,”
means the Kerr-McGee Health and Protection Plan,


 


3





















 


the Kerr-McGee Retiree Health and Protection
Plan, the Kerr-McGee Pigments (Savannah), Inc. Personal Protection Plan,
and the Kerr-McGee Other Welfare Plans. 
When immediately preceded by “Tronox,” Health and Welfare Plans means
the health and welfare plans to be established by Tronox pursuant to Section 2.03
that correspond to the Kerr-McGee Health and Welfare Plans.


 


(u)                                 Health Plans.  Health Plans, when immediately preceded by “Kerr-McGee,”
means the medical, dental, and vision components of the Kerr-McGee Health and
Protection Plan, the Kerr-McGee Retiree Health and Protection Plan, and the
Kerr-McGee Pigments (Savannah), Inc. Personal Protection Plan.  When immediately preceded by “Tronox,” Health
Plans means the medical, dental, and vision plans to be established by Tronox
pursuant to Section 2.03 that correspond to the Kerr-McGee Health Plans.


 


(v)                                 HMO. 
HMO means a health maintenance organization that provides benefits under
the Kerr-McGee Health Plans or the Tronox Health Plans.


 


(w)                               Immediately after the
Distribution Date.  Immediately after the Distribution Date means
12:00 A.M., Eastern Standard Time or Eastern Daylight Time (whichever
shall then be in effect), on the day after the Distribution Date.


 


(x)                                   IPO. 
IPO means the initial public offering by Tronox of shares of Tronox
Common Stock pursuant to the IPO Registration Statement.


 


(y)                                 IRS. 
IRS means the Internal Revenue Service.


 


(z)                                   Kerr-McGee. 
Kerr-McGee means Kerr-McGee Corporation, a Delaware corporation.


 


(aa)                            Kerr-McGee Entity. 
Kerr-McGee Entity means any entity that is, at the relevant time,
controlled, directly or indirectly, by Kerr-McGee, other than, after the Close
of the Distribution Date, Tronox or any Tronox Entity.


 


(bb)                          Kerr-McGee Stock Value.  Kerr-McGee Stock Value means a price for
Kerr-McGee Common Stock on the Distribution Date, or, if such date is not a
trading day on the NYSE, on the next preceding day that was a trading day on
the NYSE, calculated using a methodology to be determined by Kerr-McGee.  Notwithstanding the foregoing, if an
adjustment is required under Article 7 with respect to a Change in
Control, Kerr-McGee Stock Value shall mean the closing price on the NYSE for
Kerr-McGee Common Stock on the Offering Date.


 


(cc)                            Leave of Absence Programs.  Leave of
Absence Programs, when immediately preceded by “Kerr-McGee,” means the
Kerr-McGee Sick Leave and Extended Sick Leave Policies, Vacation Policy,
Personal Leave Policy, Jury Duty Policy, Military Leave Program, Kerr-McGee
Funeral Leave Program, and other similar programs offered from time to time
under the personnel policies and practices of Kerr-McGee or a Kerr-McGee
Entity.  When immediately preceded by “Tronox,”
Leave of Absence Programs means the programs to be established by Tronox
pursuant to Section 2.03 that correspond to the respective Kerr-McGee
Leave of Absence Programs.


 


4





















 


(dd)                          Life Insurance Plans.  Life Insurance Plans, when immediately preceded
by “Kerr-McGee,” means (1) the accidental death and dismemberment
insurance, business travel accident insurance, dependent life insurance, and
group term life insurance components of the Kerr-McGee Health and Protection
Plan, (2) the group term life insurance component of the Kerr-McGee
Retiree Health and Protection Plan, and (3) the accidental death and
dismemberment and group term life insurance components of the Kerr-McGee
Pigments (Savannah), Inc. Personal Protection Plan.  When immediately preceded by “Tronox,” Life
Insurance Plans means the plans, if any, to be established by Tronox pursuant
to Section 2.03 that correspond to the Kerr-McGee Life Insurance Plans.


 


(ee)                            Material Feature. 
Material Feature means any feature of an Employee Benefit Plan that
could reasonably be expected to be of material importance to the sponsoring
employer or the participants and beneficiaries of the Employee Benefit Plan,
which could include, depending on the type and purpose of the particular
Employee Benefit Plan, the class or classes of employees eligible to
participate in such Employee Benefit Plan, the nature, type, form, source, and
level of benefits provided by the employer under such Employee Benefit Plan and
the amount or level of contributions, if any, required to be made by
participants (or dependents or beneficiaries) or the employer to such Employee
Benefit Plan.


 


(ff)                                Non-Employee Director. 
Non-Employee Director, when immediately preceded by “Kerr-McGee,” means
a member of Kerr-McGee’s Board of Directors who is not an employee of
Kerr-McGee, a Kerr-McGee Entity, Tronox, or a Tronox Entity.  When immediately preceded by “Tronox,”
Non-Employee Director means a member of Tronox’s Board of Directors who is not
an employee of Kerr-McGee, a Kerr-McGee Entity, Tronox or a Tronox Entity.


 


(gg)                          Non-U.S. Benefit Plans.  Non-U.S. Benefit Plans, when immediately
preceded by “Kerr-McGee,” means the employee benefit plans listed on Schedule II.  When immediately preceded by “Tronox,”
Non-U.S. Plans means employee benefit plans to be established by Tronox
pursuant to Section 2.03 that correspond to the Kerr-McGee Non-U.S.
Benefit Plans to the extent such Kerr-McGee Non-U.S. Benefit Plans provide
benefits to Tronox Individuals.


 


(hh)                          Offering Date.  Offering
Date means the Closing Date (as defined in the Principal Agreement).  


 


(ii)                                  Option. 
Option, when immediately preceded by “Kerr-McGee,” means an option to
purchase Kerr-McGee Common Stock (including any tandem stock appreciation
right).  When immediately preceded by “Tronox,”
Option means an option to purchase Tronox Common Stock (including any tandem
stock appreciation right), in each case pursuant to a Stock Plan.


 


(jj)                                  Other Benefit
Programs.  Other Benefit Programs, when immediately
preceded by “Kerr-McGee,” means the Leave of Absence Programs, Service Award
Program, Education Gift Matching Program, Automobile/Homeowners Insurance
Program, Death Benefit Policy, and any other payroll practice, program, or
policy available to Kerr-McGee employees. 
When immediately preceded by “Tronox,” Other Benefit Programs means the
plans to be established by Tronox pursuant to Section 2.03 that correspond
to Leave of Absence Programs, Service Award


 


5





















 


Program, Education Gift Matching Program,
Automobile/Homeowners Insurance Program, Death Benefit Policy, or other payroll
practice, program, or policy available to Kerr-McGee employees.


 


(kk)                            Other Welfare Plans.  Other Welfare Plans, when immediately preceded
by “Kerr-McGee,” means the Kerr-McGee Long Term Care Program and the Kerr-McGee
Educational Assistance Program, regardless of whether such plans are subject to
ERISA.  When immediately preceded by “Tronox,”
Other Welfare Plans means the welfare plans, if any, to be established by Tronox
pursuant to Section 2.03 that correspond to the Kerr-McGee Long Term Care
Program and the Kerr-McGee Educational Assistance Program, respectively.


 


(ll)                                  Participating Company. 
Participating Company means, with respect to a particular Employee
Benefit Plan, (1) Kerr-McGee, (2) any Kerr-McGee Entity that
Kerr-McGee has approved for participation in, and which is participating in,
such Employee Benefit Plan sponsored by Kerr-McGee, and (3) any entity
that by the terms of such an Employee Benefit Plan, participates in such
Employee Benefit Plan or has employees who, by the terms of such Employee
Benefit Plan, participate in or are covered by such Employee Benefit Plan.


 


(mm)                      Pension Transfer Amount. 
Pension Transfer Amount is defined in Section 4.04.


 


(nn)                          Pension Trust. 
Pension Trust, when immediately preceded by “Kerr-McGee,” means the
trust that is exempt from taxation under Code section 501(a) that
holds the assets of the Kerr-McGee Retirement Plan and forms a part of the
Kerr-McGee Retirement Plan.  When
immediately preceded by “Tronox,” Pension Trust means the trust that is exempt
from taxation under Code section 501(a) that holds the assets of the
Tronox Retirement Plan and forms a part of the Tronox Retirement Plan.


 


(oo)                          Principal Agreement. 
Principal Agreement is defined in the second recital of this Agreement.


 


(pp)                          QDRO. 
QDRO means a domestic relations order which qualifies under Code section 414(p)
and ERISA section 206(d) and which creates or recognizes an alternate
payee’s right to, or assigns to an alternate payee, all or a portion of the
benefits payable to a participant under any of the Kerr-McGee Retirement Plans
or the Kerr-McGee Savings Plan.


 


(qq)                          QMCSO. 
QMCSO means a medical child support order that qualifies under section 609(a) of
ERISA and that creates or recognizes the existence of an alternate recipient’s
right to, or assigns to an alternate recipient the right to, receive benefits
for which a participant or beneficiary is eligible under a Kerr-McGee Health
Plan.


 


(rr)                                Rabbi Trust. 
Rabbi Trust, when immediately preceded by “Kerr-McGee,” means the rabbi
trust established by Kerr-McGee Corporation. 
When immediately preceded by “Tronox,” Rabbi Trust means the grantor
trust to be established by Tronox pursuant to Section 8.03 that corresponds
to the Kerr-McGee rabbi trust.


 


6





















 


(ss)                            Ratio. 
Ratio means the amount obtained by dividing the Kerr-McGee Stock Value
by the Tronox Stock Value; provided, however, that, in determining the Ratio, adjustments
may be made to minimize the independent, determinable and verifiable effects of
events other than the Distribution or Exchange on the Kerr-McGee Stock Value
and the Tronox Stock Value.


 


(tt)                                Retirement Plan. 
Retirement Plan, when immediately preceded by “Kerr-McGee,” means the
Kerr-McGee Corporation Retirement Plan. 
When immediately preceded by “Tronox,” Retirement Plan means the
tax-qualified defined benefit retirement plan to be established by Tronox
pursuant to Section 2.03 that corresponds to the Kerr-McGee Retirement
Plan.


 


(uu)                          Section.  Section means
a section of this Agreement.


 


(vv)                          Short Term Incentive
Plans.  Short Term Incentive Plans, when immediately
preceded by “Kerr-McGee,” means the Kerr-McGee 2002 Annual Incentive
Compensation Plan and the Kerr-McGee SCORE Compensation Program (effective
2003).  When immediately preceded by “Tronox,”
Short Term Incentive Plans means the plans to be established by Tronox pursuant
to Section 2.03 that correspond to the Kerr-McGee 2002 Annual Incentive
Compensation Plan and the Kerr-McGee SCORE Compensation Program (effective
2003).


 


(ww)                      SIP. 
SIP, when immediately preceded by “Kerr-McGee,” means the Kerr-McGee
Corporation Savings Investment Plan. 
When immediately preceded by “Tronox,” SIP means the tax-qualified
defined contribution retirement plan to be established by Tronox pursuant to Section 2.03
that corresponds to the Kerr-McGee SIP.


 


(xx)                              Stock Plans. 
Stock Plans, when immediately preceded by “Kerr-McGee,” means the
Kerr-McGee Corporation 2005 Long Term Incentive Plan, the Kerr-McGee
Corporation 2002 Long Term Incentive Plan, the Kerr-McGee Corporation 2000 Long
Term Incentive Plan, the Kerr-McGee Corporation 1998 Long Term Incentive Plan,
and the Kerr-McGee Corporation Long Term Incentive Plan (adopted in 1987 and
restated in 1995), and such other stock-based incentive plans that have been
assumed by Kerr-McGee by reason of merger, acquisition, or otherwise, each as
amended through the date of this Agreement. 
Stock Plans shall also be deemed to include the stock award plans of
companies acquired by (1) Tronox or a Tronox Entity after the date of this
Agreement and before the Close of the Distribution Date, if Tronox or the
Tronox Entity assumes those plans and (2) Kerr-McGee or a Kerr-McGee
Entity after the date of this Agreement and before the Close of the
Distribution Date, if Kerr-McGee or the Kerr-McGee Entity assumes those
plans.  When immediately preceded by “Tronox,”
Stock Plans means the stock award plans to be established by Tronox pursuant to
Section 2.03.


 


(yy)                          Transferred Individual. 
Transferred Individual means any Tronox Individual other than (1) any
Tronox Individual who became an employee of Kerr-McGee or a Kerr-McGee Entity
after the latest date on which he was a Tronox Individual and before the Close
of the Distribution Date or (2) any Tronox Individual who is a Transferred
Non-U.S. Individual.


 


7





















 


(zz)                              Transferred Non-U.S.
Individual.  A Transferred Non-U.S. Individual is a Tronox
Individual who was last employed before the Close of the Distribution Date by
Kerr-McGee or a Kerr-McGee Entity located outside of the U.S. 


 


(aaa)                      Tronox. 
Tronox means Tronox Incorporated, and, with respect to periods before
the Offering Date, the chemical division of Kerr-McGee.


 


(bbb)                   Tronox Committee. 
Tronox Committee means the Executive Compensation Committee of the
Tronox Board of Directors, or such other committee as is appointed to
administer the provisions of the Tronox Stock Plans.


 


(ccc)                      Tronox Entity. 
Tronox Entity means any entity or business unit (1) that is, at the
relevant time, a subsidiary of Tronox or is otherwise controlled, directly or
indirectly, by Tronox or (2) that is or has been controlled by Kerr-McGee,
directly or indirectly, and involved in the chemical, refining, coal, offshore
contract drilling, or nuclear business units. 



 


(ddd)                   Tronox Individual. 
Tronox Individual means any individual who is—


 


(1)                                  on
the Offering Date, actively employed by (A) Tronox, (B) a Tronox Entity,
or (C) Kerr-McGee Shared Services Company, LLC, and, in the case of subsection (C),
is on a list of
individuals to be assigned to Tronox on the Offering Date,


 


(2)                                  not actively employed by Tronox or a
Tronox Entity on the Offering Date and (A) on the Offering Date, is
receiving benefits under a Kerr-McGee Leave of Absence Program or a Kerr-McGee
Disability Plan and (B) according to the human resources records of
Kerr-McGee, was actively employed by (i) Tronox, (ii) a Tronox
Entity, (iii) Kerr-McGee Shared Services Company, LLC, or (iv) the
Kerr-McGee Technology Center and, in the case of subsections (iii) and
(iv), is on a list of individuals to be assigned to
Tronox on the Offering Date,
immediately before beginning to receive benefits under a Kerr-McGee Leave of
Absence Program or the Kerr-McGee Disability Plan,


 


(3)                                  hired by Tronox or a Tronox Entity on or
after the Offering Date and before the Close of the Distribution Date, or


 


(4)                                  on
the Offering Date, a former employee of Kerr-McGee, a Kerr-McGee Entity,
Tronox, or a Tronox Entity whose last employment with Kerr-McGee or a
Kerr-McGee Entity before the Offering Date was, according to the human
resources records of Kerr-McGee, (A) with Tronox or a Tronox Entity or (B) with
Kerr-McGee Shared Services, LLC, or the Kerr-McGee Technology Center and, in
the case of this subsection (B), is on a list of individuals to be assigned to
Tronox on the Offering Date.


 


An alternate payee
under a QDRO, an alternate recipient under a QMCSO, a beneficiary or a covered
dependent, in each case of an individual described in Section 1.01(ddd)(1) through
(4) shall also be a Tronox Individual with respect to that employee’s
benefit under the applicable Plans.  Such
an alternate payee, alternate recipient, beneficiary, or covered dependent
shall not otherwise be considered a Tronox Individual with respect to his or
her own benefits under any


 


8





















 


Plan(s) unless he or
she is a Tronox Individual by virtue of his employment with Tronox or a Tronox
Entity.  


 


(eee)                      Tronox Stock Value. 
Tronox Stock Value means a price for Tronox Common Stock on the
Distribution Date or, if such date is not a trading day on the NYSE, on the
next preceding day that was a trading day on the NYSE, calculated using a
methodology to be determined by Kerr-McGee. 
Notwithstanding the foregoing, if an adjustment is required under Article 7
with respect to a Change in Control, Tronox Stock Value shall mean the price at
which shares of Tronox Common Stock are offered to purchasers in the IPO.


 


(fff)                            U.S. 
U.S. means the 50 states comprising the United States of America,
territories thereof, and the District of Columbia.


 


(ggg)                   WCP. 
WCP, when immediately preceded by “Kerr-McGee,” means the Kerr-McGee
Workers’ Compensation Program, comprised of the various arrangements
established by Kerr-McGee or a Kerr-McGee Entity to comply with the workers’
compensation requirements of the states in which Kerr-McGee and its Affiliates
conduct business.  When immediately
preceded by “Tronox,” WCP means the Tronox Workers’ Compensation Program to be
established by Tronox to administer Tronox WCP Claims (as defined in Section 6.09).


 


1.02.                     Construction.


 


For
purposes of this Agreement, unless the contrary is clearly indicated by the
context, 


 


(a)                                  the use of the masculine gender shall
also include within its meaning the feminine and vice versa,


 


(b)                                 the use of the singular shall also
include within its meaning the plural and vice versa, and


 


(c)                                  the word “include” shall mean to include
without limitation.


 


9





















 


ARTICLE 2.  GENERAL
PRINCIPLES


 


2.01.                     Assumption of Liabilities.


 


Except
as otherwise provided in this Agreement or in the Principal Agreement, Tronox
hereby agrees, as of the dates set forth herein, to assume and pay, perform,
fulfill, and discharge, or to cause a Tronox Employee Benefit Plan to assume,
pay, perform, fulfill, and discharge, in accordance with their respective
terms, all liabilities (regardless of when or where such liabilities arose or
arise or were or are incurred) to or relating to Transferred Individuals, under
or with respect to the employee compensation programs and Employee Benefit
Plans, to the extent relating to, arising out of, or resulting from future, present,
or former employment with Tronox, a Tronox Entity, Kerr-McGee, or a Kerr-McGee
Entity (including all liabilities under Kerr-McGee Employee Benefit Plans and
Tronox Employee Benefit Plans).


 


2.02.                     Participation in Kerr-McGee Employee
Benefit Plans.


 


(a)                                  In General. 
Effective as of the Offering Date and subject to the terms and
conditions of this Agreement, Tronox shall be a Participating Company in the
Kerr-McGee Employee Benefit Plans (other than, with respect to Awards granted
after the Offering Date, the Stock Plans) in effect as of the Offering
Date.  Each Tronox Entity that is, as of
the Offering Date, a Participating Company in any of such Kerr-McGee Employee
Benefit Plans shall continue as such. 
Effective as of any date on or after the Offering Date and before the
Close of the Distribution Date, a Tronox Entity not described in the preceding
sentence may, at its request and with the consent of Kerr-McGee (which shall
not be unreasonably withheld), become a Participating Company in any or all of the
Kerr-McGee Employee Benefit Plans. 
Without Kerr-McGee’s consent, neither Tronox nor any Tronox Entity shall
become a Participating Company in any such Kerr-McGee Employee Benefit Plan on
or after the Offering Date.


 


(b)                                 Obligations as
Participating Company.  With respect to its participation in the
Kerr-McGee Employee Benefit Plans, Tronox shall perform, and shall cause each
other Tronox Entity that is a Participating Company in any Kerr-McGee Employee
Benefit Plan to perform, the duties of a Participating Company as set forth in
the applicable Employee Benefit Plan document and related administrative
procedures, including: (1) assisting in the administration of claims, to
the extent requested by the claims administrator of the applicable Kerr-McGee
Employee Benefit Plan; (2) cooperating fully with benefit personnel and
benefit vendors; (3) preserving the confidentiality of all financial
arrangements Kerr-McGee has or may have with any vendors, claims
administrators, trustees or any other entity or individual with whom Kerr-McGee
has entered into an agreement relating to the Kerr-McGee Employee Benefit
Plans; and (4) preserving the confidentiality of participant health
information (including health information in relation to FMLA leaves).


 


(c)                                  Termination of
Participating Company Status.  Tronox
and each Tronox Entity shall cease to be a Participating Company in the
Kerr-McGee Employee Benefit Plans at the Close of the Distribution Date, except
to the extent the parties agree to continue Tronox or any Tronox Entity as a
Participating Company in a Kerr-McGee Employee Benefit Plan after that
date.  Notwithstanding the foregoing, in


 


10





















 


the event of a Change in Control, Tronox and
each Tronox Entity shall cease to be a Participating Company in the Kerr-McGee
Stock Plans as of the date as of which the adjustments called for by Article 7
have been made.


 


2.03.                     Establishment and Maintenance of Tronox
Employee Benefit Plans.


 


Effective
as of the Offering Date, Tronox shall adopt, or cause to be adopted, the Tronox
Stock Plans for the benefit of Tronox Individuals and other current and future
employees of Tronox and the Tronox Entities. 
Effective Immediately after the Distribution Date, Tronox shall adopt,
or cause to be adopted, the remaining Tronox Employee Benefit Plans for the
benefit of Transferred Individuals and other current and future employees (and
Non-Employee Directors) of Tronox and the Tronox Entities.  


 


The
Tronox Employee Benefit Plans, as in effect immediately after their effective
dates, need not be substantially similar in any respect to the corresponding
Kerr-McGee Employee Benefit Plans as in effect immediately before the effective
dates of the Tronox Employee Benefit Plans, except as follows:


 


(a)                                  Defined Benefit Retirement
Plans.  Tronox shall establish the Tronox Retirement
Plan, which shall be substantially similar in all Material Features to the
Kerr-McGee Retirement Plan.  In addition,
Tronox shall establish the Tronox Benefits Restoration Plan, which shall be
substantially similar in all Material Features to the defined benefit portion
of the Kerr-McGee Benefits Restoration Plan. 
Tronox may, but is not required to, establish a plan that mirrors the
defined contribution portion of the Kerr-McGee Benefits Restoration Plan.


 


(b)                                 Health Plans. 
The Tronox Health Plans shall be substantially similar in all Material
Features to the Kerr-McGee Health Plans, except that the participants’ share of
any premium payments may differ from the payment levels of participants in the
Kerr-McGee Health Plans (except as provided below with respect to the provision
of health benefits to retirees and their spouses and dependents).


 


(c)                                  Leave of Absence
Programs.  The Tronox Leave of Absence Programs
shall not cause any Transferred Individual to forfeit any accrued vacation or
leave that is transferred to Tronox or a Tronox Entity from Kerr-McGee or a
Kerr-McGee Entity that could not be forfeited under the applicable Kerr-McGee
Leave of Absence Program. 


 


(d)                                 Non-U.S.
Benefit Plans.  Tronox shall establish Non-U.S. Benefit Plans
to the extent provided in Article 10.


 


(e)                                  Incentive
Awards.  Tronox shall establish incentive plans to the
extent provided in Section 3.02.


 


(f)                                    DCSA
and HCSA Plans.  Tronox shall establish a DCSA Plan and an
HCSA Plan for the remainder of the calendar year in which the Distribution Date
occurs to the extent provided in Section 6.03.


 


(g)                                 Disability
Plans.  Tronox shall establish Disability Plans to the
extent provided in Section 6.05.


 


11





















 


Nothing
in this Agreement is intended to prohibit Tronox or any Tronox Entity from
amending or terminating any Tronox Employee Benefit Plan at any time after the
Close of the Distribution Date, provided that: (a) any such amendment or
termination is permitted by law (including under section 411(d)(6) of
the Code or section 204(g) of ERISA), (b) the Material Features
of the Tronox Health Plans and Life Insurance Plans that apply to retirees
(regardless of whether the retiree retires before the Close of the Distribution
Date) or their spouses or dependents shall not be amended before the third
anniversary of the Distribution Date, (c) any such amendment or
termination complies with Tronox’s obligations to contribute to the UMWA
Combined Benefit Fund and to provide Medicare Part B reimbursements as
required by Sections 6.13 and 6.14, and (d) any such amendment or
termination is permitted by any applicable collective bargaining agreement.


 


Those
Tronox Stock Plans as to which shareholder approval is required shall be
adopted by Tronox and approved by a Kerr-McGee Entity as sole shareholder of
Tronox, before their effective dates.  


 


2.04.                     Terms
of Participation in Tronox Employee Benefit Plans.


 


The
Tronox Employee Benefit Plans shall be, with respect to Tronox Individuals, in
all respects the successors in interest to, and shall not provide benefits that
duplicate benefits provided by, the corresponding Kerr-McGee Employee Benefit
Plans.  Kerr-McGee and Tronox shall agree
on methods and procedures to prevent Tronox Individuals and Transferred
Individuals from receiving duplicative benefits from the Kerr-McGee Employee
Benefit Plans and the Tronox Employee Benefit Plans.  


 


With
respect to Transferred Individuals, each Tronox Employee Benefit Plan that is
effective on the Offering Date (in the case of the Stock Plans) or the
Distribution Date (in the case of all Employee Benefit Plans other than the
Stock Plans) shall provide that all service, all compensation and all other
benefit-affecting determinations that, immediately before their effective
dates, were recognized under the corresponding Kerr-McGee Employee Benefit Plan
shall, as of the Offering Date or Distribution Date (as applicable), receive
full recognition, credit, and validity and be taken into account under such
Tronox Employee Benefit Plan to the same extent as if they occurred under such
Tronox Employee Benefit Plan, except to the extent that duplication of benefits
would result.


 


The
provisions of this Agreement for the transfer of assets from certain trusts
relating to Kerr-McGee Employee Benefit Plans (including Non-U.S. Benefit
Plans) to the corresponding trusts relating to Tronox Employee Benefit Plans
(including Non-U.S. Benefit Plans) are based upon the understanding of the
parties that each such Tronox Employee Benefit Plan will assume all liabilities
of the corresponding Kerr-McGee Employee Benefit Plan to or relating to
Transferred Individuals, as provided for in this Agreement.  If any such liabilities are not effectively
assumed by the appropriate Tronox Employee Benefit Plan and are retained by the
corresponding Kerr-McGee Employee Benefit Plan, then the amount of assets
transferred to the trust relating to such Tronox Employee Benefit Plan from the
trust relating to the corresponding Kerr-McGee Employee Benefit Plan shall be
recomputed, as set forth below but taking into account the retention of such
liabilities by such Kerr-McGee Employee Benefit Plan, and assets shall be
transferred by the trust relating to such Tronox Employee Benefit Plan to the
trust relating to such Kerr-McGee Employee Benefit Plan so as to place each
such trust in the position it would have been in, had the initial asset
transfer been made in accordance with such recomputed amount of assets.


 


12





















 


2.05.                     Allocation
of Costs.


 


Between
the Offering Date and the Close of the Distribution Date, all Kerr-McGee
Employee Benefit Plans will be administered by employees of Kerr-McGee or a Kerr-McGee
Entity, and Tronox or a Tronox Entity shall reimburse Kerr-McGee or the
appropriate Kerr-McGee Entity for their ratable share of such costs. 


 


13





















 


ARTICLE 3.  TERMS OF EMPLOYMENT AND COMPENSATION


 


3.01.                     Salary
and Base Pay.


 


Until
the Distribution Date, Tronox and any Tronox Entity shall continue to use
existing salary or pay structures for Transferred Individuals and Transferred
Non-U.S. Individuals.  However, nothing
in this Agreement shall prohibit Tronox or any Tronox Entity from modifying the
existing salary or pay structures prospectively in any manner Tronox or the
Tronox Entity deems appropriate after the Distribution Date.


 


3.02.                     Incentive Awards.


 


(a)                                  2005 Short Term Incentive
Awards.  For the 2005 calendar year (or such later
year during which the Offering Date occurs), Awards under the Kerr-McGee Short
Term Incentive Plans for Transferred Individuals shall be divided as follows:


 


(1)                                  The performance targets and Award amounts
in effect as of the Offering Date shall be prorated for the portion of 2005
that occurs between January 1, 2005, and the Offering Date.  Kerr-McGee, in its discretion, shall
determine the extent to which these prorated performance targets were
achieved.  Kerr-McGee shall ensure that
Tronox receives an amount sufficient to fund the prorated portion of the 2005
Awards on the earlier to occur of (A) the Distribution Date or (B) the
date on which Tronox makes payment to the Transferred Individual in connection
with such Awards.  


 


(2)                                  Tronox and the Tronox Entities shall
establish appropriate performance targets and Award amounts that shall be in
effect for the portion of 2005 that occurs between the Offering Date and December 31,
2005.  Tronox or the applicable Tronox
Entity, in its discretion, shall determine the extent to which the performance
targets were achieved. 


 


(3)                                  Tronox shall pay to each Transferred
Individual both (A) the portion of his 2005 Award prorated for the period
from January 1, 2005 to the Offering Date, and (B) the portion of his
2005 Award prorated for the period from the Offering Date to December 31,
2005, in a single payment at the time specified under the applicable Short Term
Incentive Plan.


 


(b)                                 Long Term Performance Awards with Performance Cycles that Include 2005.  For any performance cycles that include the
2005 calendar year (or such later year during which the Offering Date occurs), 


 


(1)                                  Kerr-McGee shall pay, in accordance with
its terms, all, or any portion of, a performance unit Award that is held by a
Transferred Individual and that is no longer outstanding on the Distribution
Date under the Kerr-McGee Stock Plans.


 


(2)                                  All,
or any portion of, a performance unit Award that is held by a Transferred
Individual and that is outstanding on the Distribution Date under the
Kerr-McGee Stock Plans shall be canceled.


 


14





















 


(3)                                  Tronox shall provide to each Transferred
Individual a long term performance Award (in the form of restricted stock
and/or stock options) that is equal in value to the value of the forfeited
portion of any Award as described in Section 3.02(b)(2).  As soon as practicable following the Offering
Date, Kerr-McGee shall notify Tronox of the value of the portion of any Award
that will be forfeited pursuant to this Section 3.02(b), with such value
being determined by calculating total shareholder return and associated payout
as if the entire performance cycle ended on the Offering Date.


 


(c)                                  Compliance with Section 409A
of the Code.  To the extent practicable, all incentive
Awards shall be paid in such a manner as to avoid the adverse consequences of section 409A
of the Code. 


 


3.03.                     Severance.


 


Tronox or the applicable Tronox Entity shall provide
severance benefits to any Transferred Individual whose employment with Tronox
or a Tronox Entity is terminated (other than for cause) after the Close of the
Distribution Date and before the first anniversary of the Distribution Date
that are at least as great as the severance benefits that such individual would
have received had his employment been terminated as a direct result of the
transaction consummated on the Distribution Date.  


 


3.04.                     Success
Bonus Program.


 


Kerr-McGee shall be responsible for and shall
retain all liabilities under the Kerr-McGee Corporation 2005 Success Bonus
Program and shall provide for full payment of all bonuses owed under such
program as soon as practicable after a Transferred Individual becomes entitled
to such payment.


 


3.05.                     2005
Retention Program.


 


Effective as of the
Distribution Date, Tronox shall assume and be solely responsible for all unpaid
liabilities to or relating to Transferred Individuals under the Kerr-McGee
Corporation 2005 Retention Program and shall provide for full payment of all
bonuses owed under such program as soon as feasible following the expiration of
the retention period required under such program.  As
soon as practicable after Tronox or a Tronox Entity pays any award under the
Kerr-McGee Corporation 2005 Retention Program to a Transferred Individual,
Kerr-McGee shall reimburse Tronox for the full amount of such payment
multiplied by a fraction, the numerator of which is the total number of days
from and including April 1, 2005 until the Offering Date, and the
denominator of which is the total number of days from and including April 1,
2005 until the date the award is payable under such program.


 


15





















 


ARTICLE 4.  DEFINED BENEFIT
RETIREMENT PLANS


 


4.01.                     Establishment
of Mirror Retirement Plan and Trust.


 


Effective
Immediately after the Distribution Date, Tronox shall establish, or cause to be
established, a Retirement Plan and Pension Trust qualified in accordance with
Code section 401(a), and exempt from taxation under Code section 501(a).  


 


Before
the expiration of the applicable remedial amendment period under Code section 401(b),
Tronox shall file, or shall cause to be filed, an application for a
determination from the IRS that the Tronox Retirement Plan and the Tronox
Pension Trust are qualified within the meaning of sections 401(a) and 501(a) of
the Code, respectively.  Tronox shall
timely make, or cause to be made, any modifications to the Tronox Retirement
Plan and the Tronox Pension Trust required by the IRS as a condition of issuing
a favorable determination.


 


4.02.                     Assumption of Pension Plan Liabilities.


 


Immediately
after the Distribution Date, all liabilities relating to Transferred
Individuals under the Kerr-McGee Retirement Plan shall cease to be liabilities
of the Kerr-McGee Retirement Plan and shall be transferred to and assumed by
the Tronox Retirement Plan.  


 


4.03.                     Transfer
of Assets.


 


Assets
shall be transferred from the Kerr-McGee Pension Trust to the Tronox Pension
Trust in connection with the assumption by the Tronox Retirement Plan of liabilities
relating to Transferred Individuals under the Kerr-McGee Retirement Plan in two
stages, an initial pension transfer and a final pension transfer, as described
below:


 


(a)                                  The Initial
Pension Transfer.  The initial
pension transfer shall be in an amount equal to at least ninety percent (90%) of
Kerr-McGee’s reasonable best estimate on the Offering Date of the Pension
Transfer Amount.  Kerr-McGee shall
transfer or cause to be transferred the amount of the initial pension transfer
from the Kerr-McGee Pension Trust to the Tronox Pension Trust on the first day
after the Distribution Date on which the New York Stock Exchange is open for
business (the “First Transfer Date”).  


 


(b)                                 The Final Pension
Transfer.  On a date agreed upon by Kerr-McGee and Tronox
that is no later than six months after the Distribution Date, or on such later
date as they may agree (the “Final Transfer Date”), (A) Kerr-McGee shall
transfer or cause to be transferred from the Kerr-McGee Pension Trust to the
Tronox Pension Trust assets of the Kerr-McGee Retirement Plan in an amount
equal to the excess, if any, of the Pension Transfer Amount over the amount
transferred as of the First Transfer Date, or (B) Tronox shall transfer or
cause to be transferred from the Tronox Pension Trust to the Kerr-McGee Pension
Trust assets of the Tronox Retirement Plan, in an amount equal to the excess,
if any, of the amount transferred as of the First Transfer Date over the
Pension Transfer Amount.


 


The amount to be
transferred as of the Final Transfer Date shall be adjusted by (A) the
aggregate amount of any pension benefit payments made by the Kerr-


 


16





















 


McGee Pension Trust on
behalf of the Tronox Pension Trust (and by the aggregate amount of any pension
benefit payments made by the Tronox Pension Trust on behalf of the Kerr-McGee
Pension Trust) before the Final Transfer Date, and to reflect data corrections
and computational refinements, and (B) interest calculated from the First
Transfer Date at a rate equal to the London InterBank Offered Rate (LIBOR) plus
2 percent per year.  


 


On or before the Final
Transfer Date, Kerr-McGee shall provide Tronox with a copy of the actuarial
reports relating to the determination of the Pension Transfer Amount, together
with a written certification of the Pension Transfer Amount prepared by the
enrolled actuary for the Kerr-McGee Retirement Plan.


 


4.04.                     Pension
Plan Transfer Amount.


 


(a)                                  Except as provided in Section 4.04(b),
“Pension Transfer Amount” shall mean the amount equal to the projected benefit
obligation for Transferred Individuals under such plan as of the Close of the
Distribution Date (using the actuarial methods and assumptions used to value
the plan on a termination basis). 


 


(b)                                 Notwithstanding
the foregoing provisions of this Article 4, in no event shall the Pension
Transfer Amount be less than the minimum required transfer amount for
Transferred Individuals determined in accordance with the terms of the
Kerr-McGee Retirement Plan and the requirements of section 414(l) of the
Code.


 


(c)                                  For purposes of determining all actuarial
liabilities required under this Section 4.04, active and inactive employee
data shall be based on the census data as of the Distribution Date and not the
census data as of the Offering Date.


 


17





















 


ARTICLE 5.  DEFINED CONTRIBUTION
RETIREMENT PLANS


 


5.01.                     Establishment
of SIP and Trust


 


Effective
Immediately after the Distribution Date, Tronox shall establish, or cause to be
established, a SIP and related trust qualified under Code section 401(a),
exempt from taxation under Code section 501(a), and forming part of the
Tronox SIP.


 


Before
the expiration of the applicable remedial amendment period, Tronox shall file,
or shall cause to be filed, an application for a determination from the IRS
that the Tronox SIP and the related trust are qualified within the meaning of
sections 401(a) and 501(a) of the Code, respectively.  Tronox shall timely make, or cause to be
made, any modifications to the Tronox SIP and related trust required by the IRS
as a condition of receiving a favorable determination.


 


5.02.                     Vesting
in Kerr-McGee SIP.


 


As
of the Close of the Distribution Date, Kerr-McGee shall amend, or shall cause
the amendment of, the Kerr-McGee SIP to provide that every Transferred
Individual shall be fully vested in his account in the Kerr-McGee SIP to the
extent such unvested amount has not been forfeited before the Close of the
Distribution Date.


 


5.03.                     Acceptance
of Rollovers.  


 


Effective
Immediately after the Distribution Date, the Tronox SIP shall accept the
rollover of all or any portion of the vested account balance (including any
outstanding participant loans) of any Transferred Individual who is a
participant in the Kerr-McGee SIP and who properly completes the necessary
forms to request such a rollover, provided that the Tronox SIP shall not be
required to accept the rollover of any shares of Kerr-McGee Common Stock held
in a participant’s Kerr-McGee SIP account. 
The Tronox SIP shall be solely responsible for all liabilities to or
relating to Transferred Individuals under the Kerr-McGee SIP to the extent such
Transferred Individuals roll over their account balances from the Kerr-McGee
SIP to the Tronox SIP.


 


Effective
no later than Immediately after the Distribution Date, Tronox shall enter into
agreements satisfactory to Kerr-McGee related to such rollovers, the
maintenance of the necessary participant records, the appointment of an initial
trustee under the Tronox SIP, and the engagement of an initial recordkeeper
under the Tronox SIP.  


 


5.04.                     Maintenance
of Universal Life Policy.


 


Tronox
shall assume the individual universal life insurance policies into which
certain Transferred Individuals who participate in the Kerr-McGee SIP are
entitled to contribute and shall maintain such policies under the same terms as
are in effect under the Kerr-McGee SIP on the Distribution Date.  


 


18





















 


ARTICLE 6.  HEALTH AND
WELFARE PLANS


 


6.01.                     Establishment
of Health and Welfare Plans.


 


Effective
Immediately after the Distribution Date, Tronox shall establish, or cause to be
established, Tronox Health and Welfare Plans.


 


6.02.                     Health and Welfare Plans.


 


(a)                                  The Kerr-McGee Health and Welfare Plans
shall provide coverage, subject to the provisions of such plans, for
Transferred Individuals otherwise covered under the Kerr-McGee Health and
Welfare Plans for any claim incurred by such Transferred Individuals before the
Close of the Distribution Date (regardless of whether the claim is actually
presented to Kerr-McGee or the Kerr-McGee Health and Welfare Plan for payment
before the Close of the Distribution Date). 
Tronox or the appropriate Tronox Entity shall reimburse Kerr-McGee or
the Kerr-McGee Health and Welfare Plans for any claims, expenses, costs, or
other expenditures incurred by Kerr-McGee or the Kerr-McGee Health and Welfare
Plans in providing such coverage for Transferred Individuals to the same extent
Tronox or the applicable Tronox Entity would have reimbursed Kerr-McGee or the
Kerr-McGee Health and Welfare Plan had the IPO not occurred.


 


(b)                                 Tronox shall cause its Health and Welfare
Plans to recognize and maintain all coverage and contribution elections made by
Transferred Individuals under the Kerr-McGee Health and Welfare Plans.  Tronox shall apply such elections under its
Health and Welfare Plans for the remainder of the period or periods for which
the elections are by their terms applicable. 



 


(c)                                  Tronox shall also cause its Health and
Welfare Plans to recognize and give credit for (1) all amounts applied by
Transferred Individuals under the Kerr-McGee Health and Welfare Plans to
deductibles, out-of-pocket maximums, and other applicable benefit coverage
limits with respect to which such expenses have been incurred during the
calendar year in which the Distribution Date occurs and (2) all benefits
paid to, or received by, Transferred Individuals under the Kerr-McGee Health
and Welfare Plans, in either case, for purposes of determining when such
persons have received the maximum benefits, including lifetime maximum
benefits, provided under its Health and Welfare Plans.


 


6.03.                     Special Rule for HCSA and DCSA
Plans.


 


To
the extent any Transferred Individual contributed to an account under the
Kerr-McGee HCSA Plan or DCSA Plan during the calendar year in which the
Distribution Date occurs, Kerr-McGee shall transfer, as soon as practicable
after the Distribution Date, to the corresponding Tronox Health and Welfare
Plan the account balances of the Transferred Individual for such calendar year
under the Kerr-McGee HCSA Plan or DCSA Plan, regardless of whether the account
balance is positive or negative.


 


19





















 


6.04.                     Vendor Contracts.


 


(a)                                  Third-Party ASO Contracts.


 


(1)                                  At
Tronox’s request, Kerr-McGee shall use its reasonable best efforts to cause
each third-party administrator that operates pursuant to an administrative
services only contract that relates to any of the Kerr-McGee Health and Welfare
Plans (an “ASO Contract”) in existence as of the date of this Agreement to
enter into an agreement with Tronox with substantially similar terms and
conditions.  Such terms and conditions
shall include the financial and termination provisions, performance standards,
methodology, auditing policies, quality measures, reporting requirements and
target claims.  The request by Tronox for
Kerr-McGee to negotiate such ASO Contracts shall be deemed to be the
authorization by Tronox of Kerr-McGee to act on its behalf to extend to Tronox
the terms and conditions of the ASO Contracts. 
Tronox shall use its reasonable best efforts to cooperate with
Kerr-McGee in such efforts, and Tronox shall not perform any act, including
discussing any alternative arrangements with any third party, that would
prejudice Kerr-McGee’s efforts.


 


(2)                                  If it becomes reasonably likely that
Kerr-McGee will not be successful in negotiating contract language that will
permit compliance with this Section 6.04(a), Kerr-McGee shall so notify
Tronox promptly, and after such notification, Tronox shall be released from the
restriction contained in the last sentence of Section 6.04(a)(1).  In such case, Kerr-McGee may offer a
contingency plan for the administration of the portion of the Kerr-McGee Health
and Welfare Plans affected by the unavailability of such ASO Contract,
including, if possible, an offer by the third-party administrator under the
relevant ASO Contract of its services under a separate contract with Tronox,
with terms and conditions as similar as practicable to those of the ASO
Contract with Kerr-McGee.  Tronox shall,
effective Immediately after the Distribution Date, either adopt its own
contingency plan or the contingency plan established by Kerr-McGee for such
arrangement.


 


(b)                                 Insured HMO/PPO/Expatriate Carrier Agreements.


 


(1)                                  At Tronox’s request, Kerr-McGee shall use
its reasonable best efforts to cause all HMOs, PPOs, and Expatriate Carriers
that provide medical services under the Kerr-McGee Health Plans in existence as
of the date of this Agreement to provide coverage to employees and retirees of
Tronox on terms that are substantially similar to the terms and conditions of
the letter agreement between Kerr-McGee and such carrier (“HMO Agreement”), in
each case, from the Distribution Date until December 31, 2006, or such
other date on which the parties may agree. 
Such terms and conditions shall include the financial and termination
provisions of the HMO Agreements.  The
request of Tronox as described above shall be deemed Tronox’s authorization of
Kerr-McGee to act on its behalf to extend to Tronox the terms and conditions of
the HMO Agreements.  Tronox shall use its
reasonable best efforts to cooperate with Kerr-McGee in such efforts, and
Tronox shall not perform any act, including discussing


 


20





















 


any alternative arrangements with any
third-party that would prejudice Kerr-McGee’s efforts.


 


(2)                                  Tronox shall have the sole discretion to
determine which HMOs, PPOs, or Expatriate Carriers to offer to the participants
in the Tronox Health Plans Immediately after the Distribution Date.


 


6.05.                     Disability
Plans.


 


(a)                                  At
Tronox’s request, Kerr-McGee shall use its reasonable best efforts to cause the
insurance carriers that provide coverage under the Kerr-McGee Disability Plans
in existence as of the date of this Agreement to provide coverage for the
employees of Tronox and Tronox Entities on terms that are substantially similar
to the terms and conditions of the letter agreement between Kerr-McGee and such
insurance carrier (“Disability Agreement”), in each case, from the Distribution
Date until December 31, 2006, or such other date on which the parties may
agree.  Such terms and conditions shall
include the financial and termination provisions of the Disability Agreements.  The request of Tronox as described above shall
be deemed Tronox’s authorization of Kerr-McGee to act on its behalf to
negotiate the extension to Tronox of the terms and conditions of the Disability
Agreements.  Tronox shall use its
reasonable best efforts to cooperate with Kerr-McGee in such efforts, and
Tronox shall not perform any act, including discussing any alternative
arrangements with any third-party that would prejudice Kerr-McGee’s efforts.


 


(b)                                 As
of the Distribution Date, a portion of the Kerr-McGee Disability Plans shall be
transferred to Tronox to create the Tronox Disability Plan.  Kerr-McGee and Tronox shall use their
reasonable best efforts to replace the Disability Agreements with two groups of
separate letter agreements with the insurance carriers reflecting the division
of the Kerr-McGee Disability Plans between Kerr-McGee and Tronox.  


 


6.06.                     Life Insurance Plans.


 


At
Tronox’s request, Kerr-McGee shall use its reasonable best efforts to cause the
insurance carrier that provides coverage under the Kerr-McGee Life Insurance
Plans to provide coverage for employees and retirees under the Tronox Life
Insurance Plans effective Immediately after the Distribution Date on terms that
are substantially similar to those provided under the Kerr-McGee Life Insurance
Plans. 


 


6.07.                     COBRA.


 


Through
the Close of the Distribution Date, Kerr-McGee shall be solely responsible for
administering compliance with the health care continuation coverage
requirements of COBRA and the Kerr-McGee Health and Welfare Plans with respect
to Tronox Individuals, and Tronox and the Tronox Entities shall be responsible
for filing all necessary employee change notices with respect to their
respective employees in accordance with applicable Kerr-McGee policies and
procedures.  Effective Immediately after
the Distribution Date, Tronox shall be solely responsible for providing health
care continuation coverage under COBRA with respect to any Transferred
Individual (regardless of whether such Transferred Individual first became eligible
for COBRA coverage at any time before the Close of the Distribution Date),
including any


 


21





















 


Transferred
Individual who became eligible for COBRA in connection with a Change in
Control.


 


6.08.                     Leave
of Absence Programs and FMLA.


 


(a)                                  Effective Immediately after the
Distribution Date: (1) Tronox shall honor, and shall cause each Tronox
Entity to honor, all terms and conditions of leaves of absence which have been
granted to any Transferred Individual under a Kerr-McGee Leave of Absence
Program or FMLA before the Close of the Distribution Date by Kerr-McGee, a
Kerr-McGee Entity, Tronox, or a Tronox Entity, including such leaves that are
to commence after the Distribution Date; (2) Tronox and each Tronox Entity
shall be solely responsible for administering leaves of absence and compliance
with FMLA with respect to their employees; and (3) Tronox and each Tronox
Entity shall recognize all periods of service of Transferred Individuals with
Kerr-McGee or a Kerr-McGee Entity, as applicable, to the extent such service is
recognized by Kerr-McGee for the purpose of eligibility for leave entitlement
under the Kerr-McGee Leave of Absence Programs and FMLA; provided that no
duplication of benefits shall be required by the foregoing.


 


(b)                                 As soon as administratively practicable
after the Close of the Distribution Date, Kerr-McGee shall provide to Tronox
copies of all records pertaining to the Kerr-McGee Leave of Absence Programs
and FMLA with respect to all Transferred Individuals to the extent such records
have not been provided previously to Tronox or a Tronox Entity.


 


6.09.                     Kerr-McGee Workers’ Compensation Program.


 


(a)                                  Administration of Claims.  Effective
Immediately after the Distribution Date, Tronox shall be responsible for the
administration of all claims that are, or have been, incurred under the
Kerr-McGee WCP before the Distribution Date by Tronox Individuals (“Tronox WCP
Claims”).  Tronox shall discharge its
responsibility by securing insurance coverage or, to the extent Legally
Permissible (as defined below), securing a self-insurance certificate in one or
more states.  For purposes of this Section 6.09(a),
“Legally Permissible” shall be determined on a state-by-state basis, and shall
mean that administration of Tronox WCP Claims by Tronox is permissible under
the applicable state’s workers’ compensation laws (taking into account all
relevant facts, including that Tronox may have a self-insurance certificate in
that state).


 


(b)                                 Cooperation. 
Each party shall fully cooperate with the other with respect to the
administration and reporting of Tronox WCP Claims and the transfer of the
administration of any Tronox WCP Claims to Tronox as determined under this Section 6.09.  Upon the request of Tronox, Kerr-McGee will make
reasonable efforts to support any application Tronox may make for a
self-insurance certificate in one or more states.


 


6.10.                     Kerr-McGee
Employee Assistance Program.


 


As
of the Close of the Distribution Date, the Kerr-McGee Employee Assistance
Program shall cease to have any responsibility to provide employee assistance
services for any Transferred Individuals.


 


22





















 


6.11.                     Unemployment
Insurance Tax Management Program.


 


At
Tronox’s request, Kerr-McGee shall use its reasonable best efforts to cause its
unemployment insurance tax management vendor and any successor thereto to enter
into an agreement with Tronox to provide unemployment insurance tax management
under substantially similar terms and conditions to the terms and conditions of
the agreement between Kerr-McGee and the vendor from Immediately after the
Distribution Date through December 31, 2006, or such other date on which
the parties may agree.  These efforts
shall substantially conform to the guidelines set forth in Section 6.04(a) as
if such agreements were ASO Contracts. 
Kerr-McGee shall use its reasonable best efforts to cause such
agreements to provide that Tronox’s participation shall include administration
of all unemployment compensation claims of Transferred Individuals, regardless
of whether such claims were filed before, on, or after the Distribution Date.


 


6.12.                     Administration.


 


(a)                                  Health and Welfare Plan
Subrogation Recovery.  After the Distribution Date, Kerr-McGee and
Tronox shall pay to each other any amounts recovered from time to time through
subrogation or otherwise for claims that are paid or payable by the other party
(as provided in Section 6.02).


 


(b)                                 Exchange of Historical
Data.  Kerr-McGee acknowledges that Tronox shall
have access to medical claims and eligibility data for Tronox Individuals
through the Close of the Distribution Date. 
Kerr-McGee will allow Tronox to make written requests for this
historical data to the extent permitted by law.


 


6.13.                     UMWA Combined Benefit Fund.


 


On
the Distribution Date, Tronox shall assume all liability for payments due to
the UMWA Combined Benefit Fund with respect to Transferred Individuals.  Kerr-McGee and Tronox shall cooperate in
taking all steps necessary to effectuate this assumption of liability.


 


6.14.                     Medicare Part B Reimbursements.


 


On
the Distribution Date, Tronox shall assume all liability to reimburse 43 former
Southwest Refining employees for Medicare Part B premiums.


 


6.15.                     Reimbursements
by Kennecott.


 


Beginning
on the Distribution Date, Tronox shall be entitled to receive all payments from
Kennecott Energy and Coal Company designated as reimbursements for the
provision of medical coverage to Transferred Individuals.  Kerr-McGee and Tronox shall cooperate in
taking all steps necessary to effectuate this entitlement.


 


6.16.                     Application
of Article 6 to Tronox Entities.  


 


Any
reference in this Article 6 to “Tronox” shall include a reference to a
Tronox Entity when and to the extent Tronox has caused the Tronox Entity to (a) become
a party to a vendor contract, group insurance contract, or HMO letter agreement
associated with a Tronox Health and Welfare Plan, (b) become a
self-insured entity for the purposes of one or more Tronox Health and Welfare
Plans, (c) assume all or a portion of the


 


23





















 


liabilities
or administrative responsibilities for benefits which arose before the Close of
the Distribution Date under a Kerr-McGee Health and Welfare Plan and which were
expressly assumed by Tronox pursuant to the terms of this Agreement, or (d) take
any other action, extend any coverage, assume any other liability or fulfill
any other responsibility that Tronox would otherwise be required to take under
the terms of this Article 6, unless it is clear from the context that the
particular reference is not intended to include a Tronox Entity.  In all such instances in which a reference in
this Article 6 to “Tronox” includes a reference to a Tronox Entity, Tronox
shall be responsible to Kerr-McGee for ensuring that the Tronox Entity complies
with the applicable terms of this Agreement and the Transferred Individuals
allocated to such Tronox Entity shall have the same rights and entitlements to
benefits under the applicable Tronox Health and Welfare Plans that the
Transferred Individual would have had if he or she had instead been allocated
to Tronox.


 


24





















 


ARTICLE 7.  STOCK-BASED COMPENSATION


 


7.01.                     Establishment of Plan.


 


Effective
Immediately after the Offering Date, Tronox shall establish, or cause to be established,
a Stock Plan as provided in Section 2.03.


 


7.02.                     Stock Options.  


 


(a)                                  Vested Options.  Except as otherwise provided in this Article 7,
to the extent that a Transferred Individual is holding an Award consisting of a
Kerr-McGee Option that is vested and outstanding as of the Close of the
Distribution Date, that Transferred Individual shall be treated as experiencing
a separation from service from, or otherwise terminating employment with,
Kerr-McGee.  Any such Option shall expire
unless it is exercised within the time provided in the Option itself.  


 


(b)                                 Unvested Options.  Except as otherwise provided in this Article 7,
the Executive Compensation Committee of Kerr-McGee’s Board of Directors and the
Tronox Committee shall cause each Award consisting of a Kerr-McGee Option to
the extent unvested and outstanding as of the Distribution Date and held by a
Transferred Individual to be adjusted, effective as of the Distribution Date,
by substitution of a Tronox Option under a Tronox Stock Plan.  Each such Tronox Option shall provide for the
purchase of a number of shares of Tronox Common Stock equal to the number of
shares of Kerr-McGee Common Stock subject to the corresponding Kerr-McGee
Option as of the Distribution Date, multiplied by the Ratio, with fractional
shares rounded down to the nearest whole share. 
The per-share exercise price of such Tronox Option shall equal the
per-share exercise price of the corresponding Kerr-McGee Option as of the
Distribution Date, divided by the Ratio, rounded to the nearest hundredth of a
cent.  Each such Tronox Option shall
otherwise have the same terms and conditions as were applicable to the
corresponding Kerr-McGee Option as of the Distribution Date, except that
references to Kerr-McGee, and to Kerr-McGee Entities, shall be amended to refer
to Tronox and to Tronox Entities.


 


7.03.                     Restricted Stock.  


 


The Tronox Committee shall cause each Award that
consists of restricted shares of Kerr-McGee Common Stock that is outstanding as
of the Distribution Date and is held by a Transferred Individual to be
adjusted, effective as of the Distribution Date, by substitution of a new award
under a Tronox Stock Plan consisting of a number of restricted shares of Tronox
Common Stock equal to the number of restricted shares of Kerr-McGee Common
Stock constituting such Award as of the Distribution Date multiplied by the
Ratio, with fractional shares rounded down. 
Each such adjusted Award shall otherwise have the same terms and
conditions as were applicable to the corresponding Kerr-McGee Award as of the
Distribution Date, except that references to Kerr-McGee and Kerr-McGee Entities
shall be amended to refer to Tronox and Tronox Entities.  In the event of a Change in Control, the
adjustments and substitution provided for herein shall be made as of the
Distribution Date with respect to the awards outstanding on the day before the
Change in Control and held by Tronox Individuals, based on the Ratio. 


 


25





















 


ARTICLE 8.  EXECUTIVE BENEFITS


 


8.01.                     Establishment
of Plans.


 


Effective
Immediately after the Distribution Date, Tronox and the Tronox Entities shall
assume and be solely responsible for all liabilities to or relating to
Transferred Individuals under the defined benefit portion of the Kerr-McGee
Benefits Restoration Plan and under the Kerr-McGee Corporation Chemical
Division Nonqualified Retirement Plan.  


 


8.02.                     Kerr-McGee
Benefits Restoration Plan.


 


Tronox shall establish a plan that mirrors the
defined benefits portion of the Kerr-McGee Benefits Restoration Plan in all
Material Features.  Immediately after the
Distribution Date, all liabilities relating to Transferred Individuals under
the defined benefit portion of the Kerr-McGee Benefits Restoration Plan shall
cease to be liabilities of Kerr-McGee or any Kerr-McGee Entity and shall be
assumed by Tronox or a Tronox Entity, as appropriate.


 


8.03.                     Rabbi
Trust.  


 


(a)                                  Establishment of Mirror
Rabbi Trust.  Effective no later than Immediately after
the Distribution Date, Tronox shall establish, or cause to be established, the
Tronox Rabbi Trust as a grantor trust, which shall, unless otherwise determined
by the Tronox Committee, be substantially similar in all Material Features to
the Kerr-McGee Rabbi Trust.  Tronox shall
appoint as trustee under the Tronox Rabbi Trust the then-current trustee of the
Kerr-McGee Rabbi Trust.


 


(b)                                 Funding of Tronox Rabbi
Trust.  As soon as practicable after the Close of the
Distribution Date, Kerr-McGee shall determine the amount of the liabilities
under the Kerr-McGee Executive Benefit Plans that are payable from the
Kerr-McGee Rabbi Trust as of the Distribution Date and the amount of such
liabilities attributable to Transferred Individuals.  Kerr-McGee shall then transfer to the trustee
of the Tronox Rabbi Trust an amount equal to the projected benefit obligation
of liabilities attributable to Transferred Individuals, to the extent such
liabilities are funded under the Kerr-McGee Rabbi Trust as of the Distribution
Date (the “Rabbi Trust Transfer Amount”). 
Assets shall be transferred from Kerr-McGee to the Tronox Rabbi Trust in
a manner similar to that used to transfer the assets from the Kerr-McGee
Pension Trust to the Tronox Pension Trust described in Section 4.03.


 


8.04.                     Continuity
Agreements.


 


Effective as of the Offering Date, Tronox shall
enter into Continuity Agreements with certain of its officers and key
employees.  These Continuity Agreements
shall be similar in all Material Features to the Continuity Agreements that Kerr-McGee
has in effect with its officers and key employees, as appropriate, as of the
Offering Date.  Neither the offering nor
the Distribution (or Exchange), as contemplated by the Principal Agreement,
shall entitle any Transferred Individual to any payments under a Continuity
Agreement with Kerr-McGee or Tronox.


 


26





















 


8.05.                     Code
Section 162(m).


 


Notwithstanding
any other provision of this Article 8, Kerr-McGee and the Executive
Compensation Committee of Kerr-McGee’s Board of Directors and Tronox and the
Tronox Committee may modify the procedures for approval and payment of
compensation under Article 8 to persons who are “covered employees” for
purposes of Code section 162(m), to the extent they reasonably determine
that modifications are necessary and desirable to preserve the deductibility of
compensation paid to such employees; provided, however, that no such
modification shall reduce the compensation payable to such employees below the
amount that would have been paid had there been no Distribution or Exchange.


 


27





















 


ARTICLE 9.  MISCELLANEOUS BENEFITS


 


9.01.                     Service
Award Program.


 


(a)                                  Before the Close of the Distribution
Date, at the request of Tronox, Kerr-McGee shall use its reasonable best
efforts to cause the vendor that provides service anniversary merchandise
related to the Kerr-McGee Service Award Program as of the date of this
Agreement to enter into a contract with Tronox and the Tronox Entities to
provide service anniversary merchandise under similar terms and conditions to
the terms and conditions of the contract between Kerr-McGee and the vendor
effective Immediately after the Distribution Date.  These efforts shall substantially conform
with the guidelines set forth in Section 6.04(a) as if the service
anniversary merchandise vendor contract were an ASO Contract.


 


(b)                                 Tronox and the Tronox Entities may
provide to their employees service anniversary merchandise bearing the name
and/or logo of Kerr-McGee ordered by Kerr-McGee before the date of this
Agreement and delivered under the Tronox Service Award Program to Transferred
Individuals and other employees and former employees of Tronox and the Tronox
Entities whose service anniversary occurs on or before December 31, 2005
(or such other date on which the parties shall agree), subject to the terms and
conditions of any separate agreement between Kerr-McGee and Tronox regarding
the use of the corporate names, logos, service marks, and other intellectual
property of Kerr-McGee and a Kerr-McGee Entity. 
No service anniversary merchandise bearing the corporate name and/or
logo of Kerr-McGee shall be delivered to any Transferred Individuals or other
employees and former employees of Tronox and the Tronox Entities with respect
to a service anniversary after December 31, 2005 (or such other date on
which the parties shall agree), without the express written consent of
Kerr-McGee.


 


9.02.                     Other
Welfare Plans.


 


Any Transferred Individual who is enrolled in a
course that is being reimbursed through the Kerr-McGee Corporation Educational
Assistance Program as of the Distribution Date shall be provided with continued
reimbursement without interruption for such course to the extent provided under
the Kerr-McGee Corporation Educational Assistance Program.  If Tronox does not sponsor an Employee
Benefit Plan that reimburses such Transferred Individual, Kerr-McGee’s plan
shall provide the continued reimbursement as provided under the Kerr-McGee
Corporation Educational Assistance Program, but Tronox shall reimburse Kerr-McGee
for all liabilities relating to, arising out of or resulting from such on-going
course after the Distribution Date.  


 


This Agreement shall not affect any insurance
contract providing coverage for long term care purchased by Transferred
Individual through the Kerr-McGee Long Term Care Program prior to the
Distribution Date.  As of the
Distribution Date, Tronox shall have no obligation to permit Transferred
individuals to purchase long term care coverage through payroll deductions.


 


28





















 


ARTICLE 10.  NON-U.S. EMPLOYEES AND EMPLOYEE BENEFIT PLANS


 


10.01.              In General.


 


The provisions of Section 3.01 regarding salary
and base pay shall apply with respect to Transferred Individuals and
Transferred Non-U.S. Individuals.


 


Kerr-McGee and Tronox intend that, to the fullest
extent permitted by applicable law, the Kerr-McGee Non-U.S. Benefit Plans
listed on Schedule II (other than the Kerr-McGee Plans listed as “U.K.
Plans” on Schedule II), to the extent not sponsored by Tronox or a Tronox
Entity, shall be transferred to Tronox or the applicable Tronox Entity on the
Distribution Date, and neither Kerr-McGee nor any Kerr-McGee Entity shall have
any liability with respect to such plans Immediately after the Distribution
Date.  To the extent such a transfer is
not permitted by applicable law, Kerr-McGee and Tronox shall negotiate a
resolution that results in Kerr-McGee, the Kerr-McGee Entities, Tronox, and the
Tronox Entities being in the economic position they would have been in had the
transfer been legally permitted.


 


With respect to any liabilities to Transferred
Non-U.S. Individuals other than those set forth in the two preceding paragraphs
of this Section 10.01, Kerr-McGee and Tronox shall negotiate a resolution
that results in Kerr-McGee and the Kerr-McGee Entities ceasing to have any
liabilities as of the Distribution Date.


 


10.02.              Stock
Opportunity Grants.


 


The Tronox Committee shall cause each Award that
consists of stock opportunity grants relating to shares of Kerr-McGee Common
Stock that is outstanding as of the Distribution Date and is held by a
Transferred Individual to be adjusted, effective as of the Distribution Date,
by substitution of a new award under a Tronox Stock Plan consisting of a number
of stock opportunity grants or restricted stock units relating to shares of
Tronox Common Stock equal to the number of stock opportunity grants of
Kerr-McGee Common Stock constituting such Award as of the Distribution Date
multiplied by the Ratio, with fractional shares rounded down.  Each such adjusted Award shall otherwise have
the same terms and conditions as were applicable to the corresponding
Kerr-McGee Award as of the Distribution Date, except that references to Kerr-McGee
and Kerr-McGee Entities shall be amended to refer to Tronox and Tronox Entities
and dividend equivalent payments, if any, shall be payable after the
Distribution Date with reference to dividends on Tronox Common Stock.  In the event of a Change in Control, the
adjustments and substitution provided for herein shall be made as of the
Distribution Date with respect to the awards outstanding on the day before the
Change in Control and held by Tronox Individuals, based on the Ratio.  


 


10.03.              Stock
Options—Foreign Plans.  


 


Subject to applicable law in non-U.S. jurisdictions,
outstanding awards shall be adjusted with the aim of achieving equivalent
treatment as described in Article 7. 


 


29





















 


ARTICLE 11.  GENERAL AND ADMINISTRATIVE PROVISIONS


 


11.01.              Actuarial
and Accounting Methodologies and Assumptions.


 


For
purposes of this Agreement, unless specifically indicated otherwise: (a) all
actuarial methodologies and assumptions used for a particular Employee Benefit
Plan shall (except to the extent otherwise determined by Kerr-McGee and Tronox
to be reasonable or necessary) be substantially the same as those used in the
actuarial valuation of that Employee Benefit Plan used to determine minimum
funding requirements under ERISA section 302 and Code section 412 for
2004, or, if such Employee Benefit Plan is not subject to such minimum funding
requirements, used to determine Kerr-McGee’s deductible contributions under
Code section 419A or, if such Plan is not subject to Code section 419A,
the assumptions used to prepare Kerr-McGee’s audited financial statements for
fiscal 2004, as the case may be; and (b) the value of plan assets shall be
the value established for purposes of audited financial statements of the
relevant plan or trust for the period ending on the date as of which the
valuation is to be made.  Tronox
liabilities relating to, arising out of or resulting from the status of Tronox
and the Tronox Entities as Participating Companies in Kerr-McGee Health and
Welfare Plans, as provided for in Section 2.02 and all accruals relating
thereto shall be determined by Kerr-McGee using actuarial assumptions and
methodologies (including with respect to demographics, medical trends, and
other relevant factors) determined by Kerr-McGee in a manner consistent with Kerr-McGee’s
practice as in effect on the Distribution Date and in conformance with the
generally accepted actuarial principles promulgated by the American Academy of
Actuaries, the Code, ERISA, and/or generally accepted accounting principles, as
applicable, in each case as interpreted by Kerr-McGee consistent with its past
practice.  Except as otherwise
contemplated by this Agreement or as required by law, all determinations as to
the amount or valuation of any assets of or relating to any Kerr-McGee Employee
Benefit Plan (whether or not such assets are being transferred to a Tronox
Employee Benefit Plan) shall be made pursuant to procedures to be established
by the parties before the Distribution Date.


 


11.02.              Sharing
of Participant Information.


 


Kerr-McGee
and Tronox shall share, Kerr-McGee shall cause each applicable Kerr-McGee
Entity to share, and Tronox shall cause each applicable Tronox Entity to share,
with each other and their respective agents and vendors (without obtaining
releases) all participant information necessary for the efficient and accurate
administration of each of the Kerr-McGee Employee Benefit Plans and the Tronox
Employee Benefit Plans during the respective transition periods applicable to
such Employee Benefit Plans, as permitted by applicable law, and with respect
to each of the Kerr-McGee Health and Welfare Plans and Tronox Health and
Welfare Plans, Kerr-McGee and Tronox and their respective authorized agents
shall, subject to applicable laws on confidentiality, be given reasonable and
timely access to, and may make copies of, all information relating to the
subjects of this Agreement in the custody of the other party, to the extent
necessary for such administration.


 


11.03.              Reporting,
Disclosure, and Communications to Participants.


 


While
Tronox is a Participating Company in the Kerr-McGee Employee Benefit Plans,
Tronox shall take, and shall cause each other applicable Tronox Entity to take,
all actions necessary or appropriate to facilitate the distribution of all
Kerr-McGee Employee


 


30





















 


Benefit
Plan-related communications and materials to employees, participants and
beneficiaries, including summary plan descriptions and related summaries of
material modification, summary annual reports, and notices for the Kerr-McGee
Employee Benefit Plans.  Tronox shall pay
Kerr-McGee the cost relating to the copies of all such documents provided to
Tronox.  Tronox shall assist, and Tronox
shall cause each other applicable Tronox Entity to assist, Kerr-McGee in
complying with all reporting and disclosure requirements of ERISA, including
the preparation of Form 5500 annual reports for the Kerr-McGee Employee
Benefit Plans, where applicable.


 


11.04.              Non-Termination
of Employment, No Third-Party Beneficiaries.


 


No
provision of this Agreement or the Principal Agreement shall be construed to
create any right, or accelerate entitlement, to any compensation or benefit
whatsoever on the part of any Tronox Individual or Transferred Individual or
other future, present or former employee of Kerr-McGee, a Kerr-McGee Entity,
Tronox, or a Tronox Entity under any Kerr-McGee Plan or Tronox Employee Benefit
Plan or otherwise.  Without limiting the
generality of the foregoing: (a) neither the IPO, the Distribution (or
Exchange) nor the termination of the Participating Company status of Tronox or
a Tronox Entity shall cause any employee to be deemed to have incurred a
termination of employment or layoff which entitles such individual to the
commencement of benefits under any of the Kerr-McGee Employee Benefit Plans,
any of the Tronox Plans, or any of the Individual Agreements; and (b) except
as expressly provided in this Agreement, nothing in this Agreement shall
preclude Tronox, at any time after the Close of the Distribution Date, from
amending, merging, modifying, terminating, eliminating, reducing, or otherwise
altering in any respect any Tronox Employee Benefit Plan, any benefit under any
Plan or any trust, insurance policy or funding vehicle related to any Tronox
Employee Benefit Plan.


 


11.05.              Plan
Audits.


 


(a)                                  Audit Rights with Respect to the Allocation or Transfer of Plan Assets.  The determination of the Pension Transfer
Amount and the allocation of Pension Plan assets and liabilities pursuant to Section 4.02
and the determination and transfer of assets from Kerr-McGee pursuant to Section 8.03,
may be audited on behalf of both Kerr-McGee and Tronox by a consulting firm to
be determined jointly by Kerr-McGee and Tronox. 
The scope of such audit shall be limited to the accuracy of the final
data relied upon and the accuracy of the computation and adherence to the
methodology specified in this Agreement and, except as set forth in the last
sentence of this Section 11.05(a), such audit shall not be binding on the
parties.  The auditing firm shall provide
its report to both Kerr-McGee and Tronox. 
No other audit shall be conducted with respect to the transfer or
allocation of plan assets.  The costs of
such audit shall be shared proportionately to the asset split between Kerr-McGee
and Tronox, or, at each company’s discretion and to the extent allocable
thereto, by their respective Retirement Plans. 
To the extent such audit recommends a change to the value of assets
allocated to any Tronox Plan of less than 0.25% of the amount originally
determined by Kerr-McGee’s actuaries under each of Sections 4.02 and 8.03, as
applicable to each transfer, the original determination shall be binding on the
parties and shall not be subject to the dispute resolution process provided
under the Principal Agreement.  To the
extent such audit recommends such a change of 0.25% or more, any unresolved
dispute between the parties as to whether and


 


31





















 


how to make any change
in response to such recommendation shall be subject to the dispute resolution
process provided under the Principal Agreement.


 


(b)                                 Audit Rights with Respect to Information Provided.


 


(1)                                  Each of Kerr-McGee and Tronox, and their
respective duly authorized representatives, shall have the right to conduct
audits with respect to all information provided to it by the other party.  The party conducting the audit (the “Auditing
Party”) shall have the sole discretion to determine the procedures and
guidelines for conducting audits and the selection of audit representatives
under this Section 11.05(b); provided, that audits with respect to the
allocation or transfer of plan assets and liabilities shall be subject only to Section 11.05(a).  The Auditing Party shall have the right to
make copies of any records at its expense, subject to the confidentiality
provisions set forth in the Principal Agreement, which are incorporated by
reference herein.  The party being
audited shall provide the Auditing Party’s representatives with reasonable
access during normal business hours to its operations, computer systems, and
paper and electronic files, and provide workspace to its representatives.  After any audit is completed, the party being
audited shall have the right to review a draft of the audit findings and to
comment on those findings in writing within ten business days after receiving
such draft.


 


(2)                                  The
Auditing Party’s audit rights under this Section 11.05(b) shall
include the right to audit, or participate in an audit facilitated by the party
being audited, of any subsidiaries and affiliates of the party being audited
and of any benefit providers and third parties with whom the party being
audited has a relationship, or agents of such party, to the extent any such
persons are affected by or addressed in this Agreement (collectively, the “Non-parties”).  The party being audited shall, upon written
request from the Auditing Party, provide an individual (at the Auditing Party’s
expense) to supervise any audit of a Non-party. 
The Auditing Party shall be responsible for supplying, at the Auditing
Party’s expense, additional personnel sufficient to complete the audit in a
reasonably timely manner.  The
responsibility of the party being audited shall be limited to providing, at the
Auditing Party’s expense, a single individual at each audited site for purposes
of facilitating the audit.


 


(c)                                  Audit Rights Regarding
Vendor Contracts.  From the Offering Date through the
Distribution Date, Kerr-McGee and Tronox and their duly authorized
representatives shall have the right to conduct joint audits with respect to
any vendor contracts that relate to the Kerr-McGee Employee Benefit Plans.  The scope of such audits shall encompass the
review of all correspondence, account records, claim forms, canceled drafts
(unless retained by the bank), provider bills, medical records submitted with
claims, billing corrections, vendors’ internal corrections of previous errors
and any other documents or instruments relating to the services performed by
the vendor under the applicable vendor contracts.  Kerr-McGee and Tronox shall agree on the
performance standards, audit methodology, auditing policy and quality measures
and reporting requirements relating to the audits described in this Section 11.05
and the manner in which costs incurred in connection with such audits will be
shared.


 


32





















 


11.06.              Beneficiary
Designations.


 


All
beneficiary designations made by Transferred Individuals for Kerr-McGee
Employee Benefit Plans shall be transferred to and be in full force and effect
under the corresponding Tronox Employee Benefit Plans until such beneficiary
designations are replaced or revoked by the Transferred Individual who made the
beneficiary designation.


 


11.07.              Cooperation
in Requests for Rulings and DOL Opinions.


 


Tronox shall cooperate fully with Kerr-McGee on any
issue relating to the transactions contemplated by this Agreement for which
Kerr-McGee elects to seek a determination letter or private letter ruling from
the IRS or an advisory opinion or other guidance from the DOL.  Kerr-McGee shall cooperate fully with Tronox
with respect to any request for a determination letter or private letter ruling
from the IRS or advisory opinion other guidance from the DOL with respect to
any of the Tronox Employee Benefit Plans relating to the transactions
contemplated by this Agreement.


 


11.08.              Fiduciary
Matters.


 


Kerr-McGee
and Tronox each acknowledges that actions required to be taken pursuant to this
Agreement may be subject to fiduciary duties or standards of conduct under
ERISA or other applicable law, and no party shall be deemed to be in violation
of this Agreement if it fails to comply with any provisions hereof based upon
its good faith determination that to do so would violate such a fiduciary duty
or standard.


 


11.09.              Collective
Bargaining.


 


(a)                                  A Kerr-McGee Entity is a party to a Labor
Agreement between Kerr-McGee Pigments (Savannah), Inc., Savannah, GA Plant
and District No. 96, International Association of Machinists and Aerospace
Workers (affiliated with AFL-CIO), dated May 12, 2003 (the “Labor
Agreement”).  The Labor Agreement settles
certain terms and conditions of employment for represented employees of this
Kerr-McGee Entity.  The Labor Agreement
continues for one year periods beginning on May 1 of each year unless
either party provides at least 60 days advance written notice of its intent to
terminate the agreement at the end of the then-current term.  (The current term of the Agreement expires on
April 30, 2006.)


 


(b)                                 As of the Distribution Date, Tronox or a
Tronox Entity shall assume the Kerr-McGee Entity’s rights and obligations under
the Labor Agreement.  To the extent that
any provisions of this Agreement are inconsistent with the Labor Agreement, the
provisions of the Labor Agreement shall prevail.


 


11.10.              Consent
of Third Parties.


 


If
any provision of this Agreement is dependent on the consent of any third party
(such as a vendor) and such consent is withheld, Kerr-McGee and Tronox shall
use their reasonable best efforts to implement the applicable provisions of
this Agreement to the full extent practicable. 
If any provision of this Agreement cannot be implemented due to the
failure of such third party to consent, Kerr-McGee and Tronox shall negotiate
in good faith to implement the provision in a mutually satisfactory
manner.  The phrase


 


33





















 


“reasonable
best efforts” as used herein shall not be construed to require the incurrence
of any non-routine or unreasonable expense or liability or the waiver of any
right.


 


11.11.              General
Obligations as Plan Sponsors.


 


Kerr-McGee
and Tronox, respectively, shall continue to administer, or cause to be
administered, in accordance with their terms and applicable law, their
respective Employee Benefit Plans and shall have the sole discretion and
authority to interpret their respective Employee Benefit Plans as set forth
therein.


 


11.12.              Adjustments
to Plan Transfers.


 


In
the event of transfers of employment status, or corrections to data,
calculations or methods used to calculate any liabilities or assets transferred
to the trust relating to a Tronox Employee Benefit Plan from the trust relating
to the corresponding Kerr-McGee Employee Benefit Plan that occur before December 31,
2006, such liabilities and assets shall be recomputed so as to place each such
trust in the position it would have been in, had the initial asset transfer
been made in accordance with such recomputed amount of assets.  Any such adjustments to amounts transferred
pursuant to this Agreement from a Kerr-McGee Employee Benefit Plan or trust
thereunder to a Tronox Employee Benefit Plan or a trust thereunder shall be
made between such Employee Benefit Plans or trusts.  If an employee assigned to either Tronox or
Kerr-McGee is not correctly reported on the records of any Employee Benefit
Plan, any liability arising from such error shall be the responsibility of the
employer of the individual on the date such error is identified, or of a
Employee Benefit Plan sponsored by such employer.  Determinations of what entity employs or
employed a particular individual shall be made by reference to the applicable
legal entity and/or other appropriate accounting code, to the extent possible.


 


34





















 


ARTICLE 12.  MISCELLANEOUS


 


12.01.              Effect
If Neither Distribution nor Exchange Occurs.


 


If
neither the Distribution nor the Exchange occurs, then all actions and events
that are, under this Agreement, to be taken or occur effective as of the Close
of the Distribution Date, Immediately after the Distribution Date, or otherwise
in connection with the Distribution or Exchange, shall not be taken or occur
except to the extent specifically agreed by Tronox and Kerr-McGee.


 


12.02.              Relationship
of Parties.


 


Nothing
in this Agreement shall be deemed or construed by the parties or any third
party as creating the relationship of principal and agent, partnership or joint
venture between the parties, it being understood and agreed that no provision
contained herein, and no act of the parties, shall be deemed to create any
relationship between the parties other than the relationship set forth herein.


 


12.03.              Affiliates.


 


Each
of Kerr-McGee and Tronox shall cause to be performed, and hereby guarantees the
performance of, all actions, agreements and obligations set forth in this
Agreement to be performed by a Kerr-McGee Entity or a Tronox Entity,
respectively.


 


12.04.              Disputes.  


 


The parties shall attempt to finally resolve any
claim, controversy, or dispute arising out of or relating to this Agreement, or
the threatened, alleged or actual breach or default thereof by either party, as
hereinafter set forth.  The resolution
procedures shall be invoked when either party sends a written notice to the
other party of the occurrence of a claim, controversy or dispute, or of the
threatened, alleged or actual breach of this Agreement.  The notice shall describe the nature of the
dispute and the party’s position with respect to such dispute.  The parties shall expeditiously schedule consultations
or a meeting between knowledgeable representatives designated by each party in
an effort to resolve the dispute informally. 
Such consultations or meetings shall in no event occur later than 10
days after delivery of the written notice by a party under this Section 12.04.  If the parties are unable to resolve the
dispute within 15 days after consultations commence, the dispute shall be
submitted in writing to an appropriate executive officer of each party.  The executive officers shall attempt to resolve
any dispute submitted to them for resolution in accordance with this Section 12.04
through consultation and negotiation, within 30 days after such submittal (or
such longer period as may be mutually agreed by the parties).  The executive officers may request the
assistance of an independent mediator if they believe that such a mediator
would be of assistance to the efficient resolution of the dispute.


 


12.05.              Arbitration.  


 


If the parties are unable resolve any claim,
controversy or dispute arising out of or relating to this Agreement, or the
breach hereof, pursuant to the provisions of Section 12.04, then such
claim, controversy or dispute, shall be settled by arbitration administered by
the American Arbitration Association in New York City before a single
arbitrator selected by mutual agreement of the parties under its Commercial
Arbitration


 


35





















 


Rules, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.


 


36





















 


IN
WITNESS WHEREOF, the parties have caused this Employee Benefits Agreement to be
duly executed as of the day and year first above written.


 


	
   

  	
  KERR-McGEE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Robert M. Wohleber

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name: Robert M. Wohleber

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief
  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  /s/ Thomas W. Adams

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Thomas W. Adams

  
	
   

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
						



 


37





















 


SCHEDULE I


KERR-McGEE U.S. EMPLOYEE BENEFIT
PLANS, POLICIES, AND PROGRAMS


 


1.                                       Kerr-McGee Corporation (Active Employees)
Health and Protection Plan


 


2.                                       Kerr-McGee Corporation Retiree Health and
Protection Plan


 


3.                                       Kerr-McGee Pigments (Savannah) Inc., Personal
Protection Plan


 


4.                                       Kerr-McGee Corporation Involuntary
Termination Plan for U.S. Non-Bargaining Employees


 


5.                                       Kerr-McGee Pigments (Savannah), Inc.
2004 Involuntary Severance Plan for Bargaining Unit Employees


 


6.                                       Kerr-McGee Corporation Savings Investment
Plan -- Restatement 2005


 


7.                                       Kerr-McGee Corporation Retirement Plan


 


8.                                       Kerr-McGee Corporation Benefits Restoration
Plan 


 


9.                                       Kerr-McGee Corporation Chemical Division
Nonqualified Retirement Plan


 


10.                                 Kerr-McGee Corporation Annual Incentive
Compensation Plan


 


11.                                 Kerr-McGee Corporation Performance Share
Plan*


 


12.                                 Kerr-McGee Corporation 2005 Long Term
Incentive Plan**


 


13.                                 Kerr-McGee Corporation SCORE Compensation
Program


 


14.                                 Kerr-McGee Corporation 2005 Special
Involuntary Termination Plan for U.S. Non-Bargaining Employees


 


15.                                 Kerr-McGee Corporation 2005 Retention Program
dated April 1, 2005


 


16.                                 Kerr-McGee Corporation 2005 Success Bonus
Program dated April 1, 2005


 


17.                                 Kerr-McGee Corporation Continuity Agreements
with Key Employees


 


18.                                 UMWA Combined Benefit Fund (no plan document)


 


19.                                 Medicare Part B Premiums paid for 43
former Southwest Refining employees (no plan document)


 










*The
Kerr-McGee Performance Share Plan has been terminated, but there remain
outstanding awards granted under this plan.


 


**
This is the current long term incentive plan. 
There are predecessor incentive plans that have been terminated, but
which have outstanding awards.


 


1





















 


SCHEDULE II


KERR-McGEE NON-U.S. EMPLOYEE
BENEFIT PLANS, POLICIES, AND PROGRAMS


 


	
  Australia Plans:

  	
   

  
	
   

  	
  Kerr-McGee Western Australia PLC Superannuation Plan

  
	
   

  	
  2002 Long Term Incentive Sub-Plan

  
	
   

  	
   

  
	
   

  	
   

  
	
  Austria Plans:

  	
  Basic Pension Plan (Victoria -- pension scheme)

  
	
   

  	
  Accident Insurance

  
	
   

  	
  Sickness / Medical / Long Term Care Insurance

  
	
   

  	
   

  
	
  Belgium Plans:

  	
   

  
	
   

  	
  Plannen Leven en Overlijden, Bediendenpersoneel (Retirement &
  Death in service of salaried employees including managers)

  
	
   

  	
  Plannen Leven en Overlijden, Arbeiderspersoneel (Retirement &
  Death in service for hourly employees)

  
	
   

  	
  Plannen Leven en Overlijden, Kaderpersoneel (Supplementary Plan for
  Retirement & Death benefits while in service for managers)

  
	
   

  	
  Overeenkomst Invaliditeitsrente (Disability Insurance)

  
	
   

  	
  Plan Gezondheidszorgen-de Kaders (Medical Plan for managers)

  
	
   

  	
  Plan Gezondheidszorgen-Bedienden en Arbeiders (Medical Plan for
  salaried and hourly employees)

  
	
   

  	
  Europ Assistance (Travel Assistance and Repatriation for selected
  managers)

  
	
   

  	
  Accident Insurance for salaried and hourly employees

  
	
  Germany Plans:

  	
   

  
	
   

  	
  Betriebliche Grundrente (Basic Pension Plan-Former Bayer Employees)

  
	
   

  	
  Betriebliche Grundversorgung (Basic Pension Plan - KM Employees
  joining after 3-31-98)

  
	
   

  	
  Betriebliche Zusatzrente (Supplementary Pension Plan - Former Bayer
  Employees)

  
	
   

  	
  Betriebliche Zusatzversorgung (Supplementary Pension Plan - KM
  Employees joining after 3-31-98) 

  
	
   

  	
  Einzelvertragliche Penslonszuasage (Individual Pension Promise for
  key managers)

  
	
   

  	
  Unfallversicherung (Accident Insurance)

  
	
   

  	
  Krankenversicherung (Sickness/Medica/Long Term Care Insurance)

  
	
   

  	
  Sterbageldversicherung (Funeral Insurance-i.e. death benefit)

  
	
   

  	
  Gnbadenquartelzahlungen (Special Death Benefits for salary
  continuation on death in service)

  
	
   

  	
  Vermogenswirksmeleistung (Savings Benefit)

  
	
   

  	
  Altersteilzeit (Partial Retirement)

  
	
   

  	
  Vorruhestand (Special Retirement Bridge Benefit)

  
	
   

  	
  2002 Long Term Incentive Sub-Plan

  
	
   

  	
   

  
	
  Italy Plans:

  	
  Basic Pension Plan (Fonte -- pension scheme)

  
	
   

  	
  Accident Insurance

  
	
   

  	
  Sickness / Medical / Long Term Care Insurance

  



 


1





















 


	
  Netherlands Plans:

  	
   

  
	
   

  	
  Billiton — regeling (extra pension plan: if employed before January 1,
  1976)

  
	
   

  	
  Pensioenregeling (Pension Plan)

  
	
   

  	
  Regaling Vervroegd Uittreden (Early Retirement Plan-VUT)

  
	
   

  	
  Spaarregelingen (Saving Plans)

  
	
   

  	
  Wao Excedent Regaling (Disability Excedent Insurance)

  
	
   

  	
  Wao Hiaatverzekering (Disability Gap Insurance)

  
	
   

  	
  Collectieve Ziektekostenverzekering (Medical Costs Insurance)

  
	
   

  	
  Dienstreisverzekering (Business Trip Insurance)

  
	
   

  	
  Collectieve Ongevallen Verzekering (Collective Incident Insurance)

  
	
   

  	
  Anw Hiaatverzekering (Widow/Orphan Gap Insurance)

  
	
   

  	
  2002 Long Term Incentive Sub-Plan

  
	
   

  	
   

  
	
  Singapore Plans:

  	
   

  
	
   

  	
  Group Term Life Insurance

  
	
   

  	
  Group Personal Accident Insurance

  
	
   

  	
  Group Hospital & Surgical Insurance

  
	
   

  	
  Group Travel Insurance

  
	
   

  	
   

  
	
   

  	
   

  
	
  Switzerland Plans:

  	
   

  
	
   

  	
  Retirement Plan

  
	
   

  	
  Accident and Salary Continuance Insurance

  
	
   

  	
  2002 Long Term Incentive Sub-Plan

  
	
  UK Plans:

  	
   

  
	
   

  	
  Private Patients Plan (PPP)

  
	
   

  	
  Kerr-McGee North Sea (U.K.) Limited Pension Scheme

  
	
   

  	
  Final salary scheme

  
	
   

  	
  Additional Voluntary contributions

  
	
   

  	
  Death in Service cover

  
	
   

  	
  Spouse/Dependant cover

  
	
   

  	
  Kerr-McGee North Sea (U.K.) Limited Permanent Health Insurance

  
	
   

  	
  Kerr-McGee North Sea (U.K.) Limited Share Scheme

  



 


2