Unassociated Document


    2009
Chemtura Corporation Management Incentive Program

    


    1.           Establishment and
Purpose.  Pursuant to its authority under the 2005 Crompton
Corporation Short-Term Incentive Plan (the “STIP”), and
consistent with the purpose of the STIP as stated therein, the Committee hereby
establishes the 2009 Chemtura Corporation Management Incentive Program (the
“2009
MIP”).  Unless otherwise defined below, all capitalized terms
shall have the meaning given to such terms in or pursuant to the
STIP.  The 2009 MIP provides each Participant with an opportunity to
earn a performance-based compensation Award for the calendar year 2009 (the
“2009 Performance
Period”), based on the attainment of pre-established performance goals,
as set forth below (a “MIP
Award”).  Where applicable, MIP Awards are intended to qualify
as “performance-based compensation” within the meaning of Section 162(m) of the
Code.

    


    Threshold
Performance.  The Committee shall establish an objective
threshold (a “Minimum
Threshold”) for each measure of performance during the 2009 Performance
Period (each, a “Performance Factor”),
below which no MIP Award or component of a MIP Award will be paid out with
respect to that Performance Factor.  Each such Minimum Threshold is
set forth in Exhibit “A”.  In addition, threshold can be adjusted to
reflect a change in corporate capitalization, such as a stock split or stock
dividend, or a corporate transaction, such as a merger, consolidation,
separation, acquisition, divestiture, reorganization or partial or complete
liquidation, or to equitably reflect the occurrence of any extraordinary event,
any change in applicable accounting rules or principles, any change in the
Company's method of accounting, any change in applicable law, any change due to
any merger, consolidation, acquisition, divestiture, reorganization, stock
split, stock dividend, combination of shares or other changes in the Company's
corporate structure or shares, or any other change of a similar
nature.  To the extent applicable in determining any MIP Award,
charges to earnings, including but not limited to fines and penalties related to
past: (i) antitrust events; (ii) environmental events; and/or (iii) corporate
restructuring, including plant closures, sale of businesses and severance, will
be excluded.

    


    2.           To
the extent applicable, the Committee, in determining any MIP Award, shall use
the information set forth in the Company's audited financial
statements.

    


    3.           MIP
Awards.  At the time of initial selection / approval by the
Committee for participation in the 2009 MIP, each Participant shall be assigned
a percentage of his or her “base pay” (as defined in the STIP) that will be used
in calculating his or her MIP Award, if any.  This percentage of base
pay shall be referred to as the “Target
Percentage”.  The amount of a Participant’s MIP Award will be
determined by multiplying the Target Percentage by the applicable Performance
Factor set forth in Exhibit “A”, subject to any Performance Adjustment described
in the following paragraph.

    


    In
determining a Participant’s MIP Award, the Committee reserves the absolute
discretion to increase or decrease the amount produced under the last sentence
of the preceding paragraph, based on the Committee’s assessment of any personal,
functional or other performance the Committee determines should be taken into
account (a “Performance
Adjustment”), provided that with respect to any individual subject to
Section 162(m) of the Code, any such Performance Adjustment may only decrease
(and may not increase) the amount produced under the last sentence of the
preceding paragraph.  The CEO will recommend to the Committee any
Performance Adjustment for each Participant who reports directly to the
CEO.  The CEO and the applicable Business or Functional leader, will
recommend to the Committee any Performance Adjustment for each other
Participant.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Notwithstanding
anything herein to the contrary, the MIP Award paid to any Participant subject
to Section 162(m) shall in no way increase as a result of the reduction of any
MIP Award paid to another Participant.

    


    4.           Changes to Target Percentage
or Performance Factor.  To the extent not inconsistent with the
requirements of Section 162(m) of the Code with respect to "qualified
performance-based compensation," the Committee may at any time prior to the
final determination of MIP Awards: (i) change the Target Percentage of any
Participant; (ii) assign a different Target Percentage to a Participant to
reflect any change in the Participant's responsibility level or position during
the course of the Performance Period; or (iii) change a Performance Factor to
reflect a change in corporate capitalization, such as a stock split or stock
dividend, or a corporate transaction, such as a merger, consolidation,
separation, acquisition, divestiture, reorganization or partial or complete
liquidation, or to equitably reflect the occurrence of any extraordinary event,
any change in applicable accounting rules or principles, any change in the
Company's method of accounting, any change in applicable law, any change due to
any merger, consolidation, acquisition, divestiture, reorganization, stock
split, stock dividend, combination of shares or other changes in the Company's
corporate structure or shares, or any other change of a similar
nature.

    


    5.           Eligibility.  The
Committee shall designate Participants in the 2009 MIP in accordance with the
terms of the STIP and as set forth herein.  Each Participant must be
an Eligible Employee as of January 1, 2009, and be actively employed as of the
date MIP Awards, if any, are paid.  Exceptions may be granted as
determined by the Committee in its sole discretion, provided such exception
complies with Section 162(m) of the Code.  Any employee who becomes an
Eligible Employee, as determined by the Committee, as a result of hire or
promotion after January 1, 2009 but before June 30, 2009 may be eligible to a
MIP Award, pro rated based on the number of whole months that the employee is an
Eligible Employee during calendar year 2009.  Similarly, where an
Eligible Employee, for whatever reason, moves to another role during calendar
year 2009 for which different performance measures apply, his or her MIP Award,
if any, will be calculated by taking into account the performance measures for
each role and the actual time that the Eligible Employee spent in each role
during calendar year 2009.

    


    6.           Other
Conditions.  Eligibility for or actual participation in the
2009 MIP shall not and in no way is intended to create an agreement of
employment for a definite term.  Nothing herein shall or is intended
to, (i) obligate the Company to offer, or offer any employee participation in, a
Management Incentive Program or similar arrangement in the future, and/or (ii)
act as a modification of any employee’s existing terms and conditions of
employment.  Except as expressly set forth herein, the 2009 MIP shall
be subject to and administered in accordance with the terms and conditions of
the STIP.

    


    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    ALL
PARTICIPANTS

     

    EXHIBIT
“A”

     

    1.           For
each Executive Participant, as determined by the Committee, his or her 2009 MIP
Award if any shall be calculated based on the following Performance Factors, in
the following proportions (each as identified in this Exhibit “A”):

    


    
      	
              1/3rd

            	
              2009
      EBITDA

            	
              2009
      Cash Flow

            	
              2/3rds

            


    

    


    2.           Set
forth in this Exhibit “A” is a schedule identifying the Minimum Threshold for
each Performance Factor identified above, as well as a scale of payout
eligibility based on performance relative to target, subject in all cases to the
other terms and conditions set forth in the 2009 MIP, including the STIP and
this Exhibit “A”.

    


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

    


    4.           Each
level of performance also is assigned a corresponding percentage (between 0% and
200%) that is eligible for payout with respect to that Performance
Factor.

    


    5.           For
example, where actual performance is equal to target performance, then 100% of
that Performance Factor is eligible for payout, subject to the other terms and
conditions set forth in the 2009 MIP, including the STIP and this Exhibit
“A”.

    


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

     

    
      	
            	
              7.           
      

            	
              The
      steps in the scale between minimum, target and maximum also are
      shown.  If performance and/or pay out percentage are not equal
      to the numbers shown below, actual pay out will be determined by
      interpolation.

            


    

    


    (Dollars
in Millions)

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	 
      	
                                                  EBITDA

                                                	 
      	
                                                  MIP
      Pay Out

                                                	 
      	
                                                  Operating
      Cash Flow

                                                
	
                                                  Threshold

                                                	
                                                  $150

                                                	 
      	
                                                  0%

                                                	 
      	
                                                  $25

                                                
	 
      	
                                                  $175

                                                	 
      	
                                                  25%

                                                	 
      	
                                                  $37

                                                
	 
      	
                                                  $200

                                                	 
      	
                                                  50%

                                                	 
      	
                                                  $50

                                                
	 
      	
                                                  $225

                                                	 
      	
                                                  75%

                                                	 
      	
                                                  $62

                                                
	
                                                  Target

                                                	
                                                  $250

                                                	 
      	
                                                  100%

                                                	 
      	
                                                  $75

                                                
	 
      	
                                                  $275

                                                	 
      	
                                                  133%

                                                	 
      	
                                                  $88

                                                
	 
      	
                                                  $300

                                                	 
      	
                                                  166%

                                                	 
      	
                                                  $102

                                                
	
                                                  Maximum

                                                	
                                                  $325

                                                	 
      	
                                                  200%

                                                	 
      	
                                                  $115

                                                


                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    


    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    


    DEFINITIONS:

     

    For
purposes of the 2009 Management Incentive Plan

     

    EBITDA

     

    “EBITDA”
means, for the calendar year of 2009, net income (or net loss) from continuing
operations(1) plus, to the extent included the calculation of net income for
such period in accordance with GAAP, the sum of (a) Interest Expense, (b) income
tax expense, (c) other expense, (d) depreciation expense, (e) amortization
expense, (f) charges related to facility closures, severance and related costs,
(g) impairments of long-lived assets, (h) charges related to the accelerated
recognition of asset retirement obligations, (i) antitrust costs, (j) any losses
from sales of assets or a business other than in the ordinary course of
business, (k) charges for the payment of premiums in connection with the early
repayment or retirement of indebtedness, (l) expenses including professional
fees associated with the issuance of indebtedness or the amendment, waiver or
restructuring of the principal and terms of existing indebtedness including such
charges related to accounts receivable facilities, (m) charges associated with
the curtailment or settlement of pension and post retirement medical plans and
(n) costs related to natural disasters such as hurricanes or earthquakes that
disrupt operations (2)  minus  (a) other income, (b) any
gains from sales of assets or a business other than in the ordinary course of
business and (c) gains associated with the curtailment or settlement of pension
and post retirement medical plans.

     

    Should
the Company divest a business(s) during the calendar year, the EBITDA Target
shall be reduced (or increased) by the amount of EBITDA that was to be
contributed by (or reduced from) the business(s) before the deduction of
allocated functional and corporate expenses for such period as the EBITDA of the
business(s) is no longer reflected in actual 2009 EBITDA from continuing
operations of the Company (“Adjusted Target”).  The Threshold and
Maximum EBITDA values and all other EBITDA values identified in the Management
Incentive Plan documentation shall be adjusted such that they are the same
percentage of the Adjusted Target as were the original values of the original
Target.

     

    Operating Cash
Flow

     

    “Operating
Cash Flow” means, for the calendar year of 2009, Net Cash (used in) provided by
operations as reflected in the Company’s Condensed Consolidated Statements of
Cash Flows (1) plus, to the extent included the calculation of the statement of
cash flows for such period in accordance with GAAP, the sum of (a) any reduction
in the value of accounts receivable sold in the period, (b) charges related to
facility closures, severance and related costs, (c) antitrust costs and
settlement payments, (d) any losses from sales of assets or a business other
than in the ordinary course of business, (e) charges for the payment of cash
premiums in connection with the early repayment or retirement of indebtedness,
(f) expenses including professional fees associated with the issuance of
indebtedness or the amendment, waiver or restructuring of the principal and
terms of existing indebtedness including such charges related to accounts
receivable facilities, and (g) any cash payments or contributions made related
to the Company’s pension and post retirement medical plans
(2)  minus  (a) any increase in the value of accounts
receivable sold in the period, (b) any gains from sales of assets or a business
other than in the ordinary course of business and (c) any cash receipts related
to the Company’s pension and post retirement medical plans.

    


    Should
the Company divest a business(s) during the calendar year, the Operating Cash
Flow Target shall be reduced (or increased) by the amount of EBITDA that was to
be contributed by (or reduced from) the business(s) before the deduction of
allocated functional and corporate expenses for such period as the EBITDA of the
business(s) is no longer reflected in actual 2009 EBITDA from continuing
operations of the Company (“Adjusted Target”).  The Threshold and
Maximum Operating Cash Flow values and all other Operating Cash Flow values
identified in the Management Incentive Plan documentation shall each be reduced
by the same amount as the amount as Adjusted Target is reduced from (or added
to) the Target.

     

    
      
         

      

      
        4