Document:

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

  

 

2Exhibit 10.5

 

Execution
Copy

 

TRANSITION SERVICES AGREEMENT (this “Agreement”), dated November 28, 2005, among Kerr-McGee
Corporation, a Delaware corporation (the “Parent”), Kerr-McGee
Worldwide Corporation, a Delaware corporation (“Worldwide”),
and Tronox Incorporated, a Delaware corporation (the “Tronox”).

 

INTRODUCTION

 

The Board of Directors of Parent (the “Board”)
has determined that it is in the best interests of Parent and its stockholders
to transfer certain existing businesses of Parent and its subsidiaries to Tronox.

 

In order to ensure an orderly transition of the such businesses to Tronox,
as described in the Master Separation Agreement (as defined below), each party
desires to provide to the other the services described herein for a
transitional period.

 

The parties hereby agree as follows:

 

Section 1.                                            Definitions.  
For purposes of this Agreement, the following terms shall have the meanings set
forth or as referenced below:

 

“Affiliate” has the meaning given such
term in the Master Separation Agreement.

 

“Closing Date” has the meaning given such
term in the Master Separation Agreement.

 

“Governmental Authorities” has the
meaning given such term in the Master Separation Agreement.

 

“Group” means either the Parent Group or
the Tronox Group, as the context requires.

 

“Information” has the meaning given such
term in the Master Separation Agreement.

 

 “Liabilities”
has the meaning given such term in the Master Separation Agreement.

 

 “Master
Separation Agreement” means the Master Separation Agreement, dated
as of the date hereof, by and among Kerr-McGee Corporation, Kerr-McGee
Worldwide Corporation and Tronox Incorporated.

 

“Providing Party”
means, with respect to any Service, the party providing such Service.

 

“Parent Group” has the meaning given such
term in the Master Separation Agreement.

 

 

“Receiving Party”
means, with respect to any Service, the party receiving such Service.

 

“Separation” means,
with respect to any Service, the separation, duplication, installation or
substitution of the subject matter of such Service as utilized by the Receiving
Party as of the Closing Date (unless another date is expressly provided for
with respect to a particular Service), such that the Receiving Party is reasonably
able to provide for itself or through alternative service providers the
benefits of such subject matter in a sustainable manner substantially similar
to that provided to, or on behalf of, the Receiving Party as of the Closing
Date (unless another date is expressly provided for with respect to a particular
Service).

 

“Service Costs” means, with respect to each
Service provided under the terms and subject to the conditions of this
Agreement, an amount equal to the sum of such of the following items as may
apply:

 

(i)                                     the
fully burdened labor costs incurred by the Providing Party in respect of the
individual employees of such Providing Party who are engaged in the provision
of such Service without management fee (as applicable to the individual and/or
the Service) for the portion of their work time engaged in the provision of
such Service;

 

(ii)                                  the
costs charged to the Providing Party by a third party provider in connection
with such Service;

 

(iii)                               the
out-of-pocket and other expenses (other than expenses included in Transition Costs
and the costs charged under item (i) above) incurred by the Providing
Party in connection with such Service;

 

(iv)                              taxes
(other than Transfer Taxes) as set forth in Section 9(e) incurred by
the Providing Party in connection with such Service; and

 

(v)                                 any
costs expressly included as Service Costs in this Agreement, including costs as
set forth in Section 3.7 of Exhibit A.

 

“Transfer Taxes” means all recordation,
transfer, documentary, excise, sales, value added, use, stamp, conveyance or
other similar taxes, duties or governmental charges, and all recording or
filing fees or similar costs, imposed or levied by reason of, in connection
with or attributable to the Separation of any Service.

 

“Transition Costs” means the one-time,
initial set up, costs and expenses that are incurred by Parent Group in order
to initiate the process of obtaining the Separation of any Service as
contemplated by (and subject to) the terms and conditions of this Agreement and
the costs of obtaining and, if applicable, modifying any contractual rights described
in Section 6(c) of this Agreement, including such costs and expenses
incurred prior to the date hereof by the Providing Party in preparation for the
provision of the Services (for the avoidance of doubt, Transition Costs shall
not include any annual or
recurring fees, including without limitation, license fees, or any maintenance
fees, support services fees, subscription fees or other costs relating to
ongoing use).

 

2

 

“Tronox Group” has the meaning given such
term in the Master Separation Agreement.

 

Section 2.                                            Certain
Transferred Personnel.  Parent hereby
acknowledges and agrees that the individuals listed on Schedule 2 are
identified as prospective Tronox Individuals (as such term is defined in the Employee
Benefits Agreement (as defined in the Master Separation Agreement)) each of
whom may become, if not already, employees of the Tronox Group as of the
Closing Date.  Each party agrees that,
for a period of  one year after the
Closing Date, neither party nor its respective Affiliates shall recruit, offer
employment to, hire or engage as a consultant any Person who is an employee of
the other party immediately after the Closing Date; provided
that the foregoing provision will not prohibit any general solicitation of
employment not specifically directed toward employees of either Group or the
soliciting or hiring of any individual who terminated his or her own employment
with any member of the other Group or whose employment was terminated by any
member of the other Group prior to such solicitation or hiring.

 

Section 3.                                            Services.

 

(a)                                  Except
as otherwise provided herein, on the terms and subject to the conditions set
forth herein, Parent shall provide, or cause one or more members of its Group
to provide, the Tronox Group with each of the services listed on Exhibit A
and Tronox shall provide, or cause one or more members of its Group to provide,
the Parent Group with each of the services listed on Exhibit B
(each service listed on Exhibit A or Exhibit B being a “Service” and, collectively, the “Services”),
in each case beginning on the “Start Date”
set forth on Exhibit A or Exhibit B for such Service
and ending on the earlier of (i) the “End Date” set
forth on Exhibit A or Exhibit B for such Service, (ii) the
termination of this Agreement, or (iii) the termination of such Service
pursuant to Section 11(b) (each such duration, a “Service Term”). For the avoidance of doubt, it is understood
that services included as “Services” may include, subject to the terms and
conditions of this Agreement, the transfer and installation of certain
hardware, software, related licenses and applications, and other items as set
forth on Exhibit A, Exhibit B or pursuant to the Master
Separation Agreement.

 

(b)                                 Subject
to the provisos set forth in this Section 3(b), the Transition Costs
incurred by the Parent Group in connection with Separation of the Services to
be provided to the Tronox Group shall be borne 100% by the Parent Group and
such Transition Costs shall not be included in the calculation of Service Costs
payable by the Tronox Group for such Services; provided,
however, that, with respect to each line
item set forth in Exhibit C, in no event shall Parent Group have
any obligation to incur any Transition Costs in excess of the specific amount
allocated to each such line item set forth on Exhibit C (with
respect to each line item on Exhibit C, the “Per Line Maximum
Amount of Transition Costs”) and in no event in an aggregate amount
in excess of $11 million; provided, further,
that any Transition Costs in excess of the applicable Per Line Maximum Amount
of Transition Costs shall be borne 100% by Tronox Group.  All Transfer Taxes incurred in connection
with the Separation of the Services shall be borne 100% by the Parent Group,
subject to Section 9(e).  Such
Transition Costs shall not be included in the calculation of Service Costs
payable by the Tronox Group for such Services.

 

(c)                                  It
is understood and agreed amongst the parties that, notwithstanding any
provision to the contrary in this Agreement, the Providing Party shall have no
obligation whatsoever to upgrade systems, invest in product enhancements or
increase staffing, capacity,

 

3

 

functionality,
reliability or any other aspect of any Service beyond the level that exists as
of the date hereof with respect to any Service.

 

(d)                                 Notwithstanding anything to the
contrary contained herein, during the Term, a Receiving Party may from time to
time request that a Providing Party provide special services or projects in
addition to the Services, and (subject to the mutual agreement of the parties
hereto) such Providing Party shall make commercially reasonable efforts to
provide such additional services or projects. 
If such Providing Party agrees to provide such additional services or
projects, the parties shall negotiate in good faith to establish the terms
(including, without limitation, price) for providing such additional services
or projects and, following agreement on such terms, Exhibit A or Exhibit B hereof
shall be amended, as applicable, to include such additions.

 

Section 4.                                            Standards
of Performance; Level of Services.  

 

(a)                                  Each
Providing Party, with respect to any Service, shall perform such Service
exercising the same degree of care, at the same general level and at the same general
degree of accuracy and responsiveness, in each case as it exercises in
performing the same or similar services for its own account, with priority
equal to that provided to its own businesses and members of its Group.  

 

(b)                                 In
no event shall any party, as Receiving Party with respect to any Service, be
entitled to increase its use of such Service above that level of use specified
in the exhibit related thereto without the prior written consent of the
Providing Party.  Notwithstanding
anything to the contrary in this Agreement, the Providing Party shall not be
required to provide the Receiving Party with levels of such Service above the
levels that existed prior to the date hereof or with the advantage of systems,
equipment, facilities, training, services or improvements procured, obtained or
made after the date hereof.  

 

(c)                                  Notwithstanding
anything to the contrary contained herein, the Providing Party with respect to
any Service may, but is not required to, make changes from time to time in the
manner in which such Service is provided if (i) the Providing Party is
making similar changes in the manner in which such Service is provided to it
and members of its own Group, (ii) the Providing Party furnishes to the
Receiving Party substantially the same notice the Providing Party provides to
members of its own Group with respect to such changes, and (iii) such
changes shall not create a substantial risk of a material disruption of the
Receiving Party’s business or of the Receiving Party’s incurring a material
loss or liability. 

 

(d)                                 Each
Group shall nominate a representative to act as the primary contact person for
the provision of all of the Services (the “Service Coordinators”).  The initial Service Coordinators shall be Kenneth
Crouch for the Parent Group and Mary Mikkelson for the Tronox Group.  Each party shall notify the other party in
writing of any change in the Service Coordinators.  The parties agree that all communications
relating to the provision of the Services shall be directed to the Service
Coordinators.

 

(e)                                  In order to monitor, coordinate and
facilitate implementation of the terms and conditions of this Agreement, the
parties shall establish (i) a “Steering Committee”
consisting of at least one (1) senior manager from each of Parent Group
and Tronox Group and whereby each such Group is equally represented and (ii) an
“Operating Committee” consisting,

 

4

 

as necessary, of one (1) representative
of each of Parent Group and Tronox Group from each functional area that is the
subject of Exhibits A and B (for such time as Service Terms within
such functional areas are in effect). 
The Steering Committee shall provide general oversight of the terms and
conditions of this Agreement and shall work in good faith to resolve any
disputes arising under this Agreement as set forth under Section 7. The
Operating Committee shall be responsible for the day-to-day operations related
to the implementation of the terms and conditions of this Agreement and the exhibits
hereto.  The initial Steering Committee
representatives shall be (i) for the Parent Group, Al Harris, Fran
Heartwell and John M. Rauh and
(ii) for Tronox Group, Tom Adams, Mary Mikkelson and Robert Y. Brown.  The initial Operating Committee
representatives shall be (i) for the Parent Group, Ray
Gonzales, Steve Miller and Ron McCauley and (ii) for Tronox Group, Mark Meadors, Candace Kahle,
Melody Walke, Bill Snider and Cliff Dolton. 
The initial Steering Committee and Operating Committee representatives
shall not be changed by either Group on less than ten (10) days’ prior
written notice to the Service Coordinator of the other Group. The Steering
Committee and Operating Committee representatives shall meet at least monthly
(or more frequently if needed) during the Term of this Agreement; provided, the members of the Steering Committee and the
Operating Committee may participate in meetings of such
committees by means of conference telephone, videoconferencing or other
communications equipment by means of which all persons participating in the
meeting can hear each other.
The Steering Committee and Operating Committee representative for each Group
shall stay reasonably apprised of the activities of the employees, agents and
contractors of such Group who are providing or receiving the Services in order
to maximize efficiency in the provision and receipt of the Services. Actions of
the Steering Committee shall require the approval of Steering Committee representatives
from each of the Parent Group and the Tronox Group.

 

Section 5.                                            Resources.  In connection with the Services, the
Receiving Party shall make reasonably available for consultation with the
Providing Party those retained employees and consultants or other service
providers of the Receiving Party reasonably necessary for the effective
provision of such Services.

 

Section 6.                                            Third
Parties.

 

(a)                                  The
Providing Party with respect to a particular Service shall make reasonably
available such personnel, facilities, equipment, systems and management as are
required to provide such Service. 
Subject to Section 4, the Providing Party shall have the right to
designate which such resources it shall assign to perform such Service and
shall have the right to remove and replace any such resources at any time or
designate any other members of its Group or a third party provider to perform
such Service; provided, however, that (i) the
Providing Party shall use commercially reasonable efforts to prevent the
disruption to the Receiving Party in the transition of the Service to different
resources or another provider and (ii) with respect to Services that are
not currently outsourced by a Providing Party to a third party, any
substitution of a third party provider in connection with the provision of such
Service shall be subject to the approval of the Steering Committee.  Notwithstanding the foregoing, each Providing
Party shall remain solely responsible, in accordance with the terms of this
Agreement, for the performance of any Service it is required to provide
hereunder.

 

(b)                                 With
respect to Services that are currently outsourced by Parent Group to third
parties, Parent Group shall reasonably assist the Tronox Group in seeking to
cause such third parties to provide such Services to the Tronox Group.  In the event Parent Group is not able

 

5

 

to secure the
agreement of any third parties to provide Services to the Tronox Group, Parent Group
shall reasonably assist the Tronox Group in seeking to obtain substantially similar
services from another source
on substantially similar terms and conditions as those currently being
provided.

 

(c)                                  If,
and to the extent, required, the Tronox Group, on the one hand, and the Parent
Group, on the other hand, shall cooperate in good faith in seeking to obtain
any required transfer or assignment agreements or any other agreements
necessary to transfer contractual rights of the Parent Group, that existed
immediately prior to the Closing Date, to receive services or license software,
to the extent (i) such agreements or rights are necessary for the
provision of Services to the Tronox Group and (ii) such rights were
utilized by the Tronox Group prior to the Closing Date. 
Such agreements shall be in the name or for the benefit of the
applicable member, or members, of the Tronox Group.  The cooperation required hereunder shall be
included in the Service to which it is related. 
For the avoidance of doubt, the parties agree and acknowledge that a
Providing Party shall not be liable under this Agreement for any annual or
recurring fees, including without limitation license fees, or any maintenance
fees, support services fees, subscription fees or other costs relating to
ongoing use by a Receiving Party stemming from a transfer to such Receiving
Party pursuant to a Service hereunder.

 

(d)                                 A
Providing Party shall not enter into any agreement or contract with any third
party to provide any Services hereunder pursuant to which the Receiving Party
would remain obligated to such third party upon the conclusion of this
Agreement without such Receiving Party’s prior written consent, such consent
not to be unreasonably withheld, delayed or conditioned.

 

(e)                                  Without
prejudice to the obligations of the Parent Group under Section 3(b) and
Exhibit C of this Agreement, the Receiving Party shall be solely
responsible for acquiring or otherwise obtaining all assets and rights for
third party services not otherwise obtained as a result of the expenditure of
such Transition Costs, including without limitation, hardware, software,
information systems and other materials and third party services, reasonably
necessary in connection with the Separation of any Service as contemplated by
this Agreement.

 

Section 7.                                            Good
Faith Cooperation; Dispute Resolution.

 

(a)                                  The
parties shall cooperate in good faith in all matters relating to the provision
and receipt of the Services.  Such
cooperation shall include exchanging information, providing access to
personnel, equipment, office space, electronic systems and other property,
performing true-ups and adjustments and obtaining all consents, licenses,
sublicenses or approvals necessary to permit each party to perform its
obligations hereunder.

 

(b)                                 In
the event of a dispute under this Agreement, either Group may give notice to
the other Group requesting that the Steering Committee in good faith try to
resolve (but without any obligation to resolve) such dispute.  Not later than 10 days after said notice,
each Group shall submit to the other Group a written statement setting forth
such Group’s description of the dispute and of the respective positions of the
Groups on such dispute and such Group’s recommended resolution and the reasons
why such Group feels its recommended resolution is fair and equitable in light
of the terms and spirit of this Agreement. 
Such statements represent part of a good-faith effort to resolve a
dispute and as such, no statements prepared by a Group

 

6

 

pursuant to
this Section 7 may be introduced as evidence or used as an admission
against interest in any arbitral or judicial resolution of such dispute.

 

(c)                                  If
the dispute continues unresolved for a period of five days (or such longer
period as the Steering Committee may otherwise agree upon) after the
simultaneous exchange of such written statements, then the Steering Committee
shall promptly commence good-faith negotiations to resolve such dispute but
without any obligation to resolve it. 
The initial negotiating meeting may be conducted by teleconference.

 

(d)                                 Not
later than seven days after the commencement of good-faith negotiations under Section 7(c) above:  (i) if the Steering Committee renders an
agreed resolution on the matter in dispute, then both Groups shall be bound
thereby; and (ii) if the Steering Committee does not render an agreed
resolution, then the dispute shall be submitted for resolution pursuant to Section 7(e).

 

(e)                                  Disputes
arising under this Agreement and not resolved by the Steering Committee within seven
days under clause (i) of Section 7(d) 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 7(e) 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.

 

(f)                                    Subject
to Section 11(c), during the course of resolution of any dispute, the rights
and obligations of the parties under this Agreement, including with respect to
the subject matter of such dispute, shall continue.

 

(g)                                 If
the parties fail to resolve any dispute pursuant to this Section 7, then
the provisions of Section 18 shall apply.

 

Section 8.                                            Exceptions
to Providing Party’s Obligation to Perform.

 

(a)                                  The
Providing Party with respect to any Service shall not be required to provide
such Service to the extent the performance of such Service would require the
Providing Party to violate any applicable Law or would result in the breach of
any software license or other Contract with a Person not a member of the
Providing Party’s Group.  If the
Providing Party with respect to any Service reasonably determines that it is
unable to provide such Service in accordance with the terms hereof, the parties
shall cooperate to determine the best alternative approach.  Until such alternative approach is found or
the problem is otherwise resolved to the satisfaction of the parties, the
Providing Party shall use commercially reasonable efforts to continue to
provide such Service. To the extent the parties agree upon an alternative
approach that requires payment of amounts above and beyond what the Receiving
Party is required to pay under this Agreement for such Service, such excess
amounts shall be borne by the Receiving Party, or as otherwise agreed by the
parties.

 

(b)                                 Notwithstanding
anything to the contrary contained herein,

 

7

 

(i)                                     if
the Receiving Party (A) elects to decommission, replace, modify or change
its information technology or communications systems or any other aspect of its
business relationship relating to a Service in a manner that prevents the
Providing Party from providing such Service as required hereunder (in the
understanding that the Receiving Party shall provide the Providing Party with
five (5) Business Days prior notice of any such election), or (B) fails
to acquire the hardware, software, information systems or other materials or
third party services reasonably necessary for the Separation of any Service
pursuant to Section 6(e) of this Agreement and such failure prevents
the Providing Party from providing such Service as required hereunder, then, in
each case, the Providing Party shall have no liability whatsoever with respect
to the effectiveness or quality of such Service and, following five (5) Business
Days prior written notice to the Receiving Party, shall be excused from the
performance of such Service;

 

(ii)                                  if
the Tronox Group is unable, despite the reasonable assistance of the Parent
Group in accordance with Section 6(b) of this Agreement and the good
faith cooperation of the Parent Group in accordance with Section 7(a) of
this Agreement, to secure the agreement of third parties with whom Parent Group
has outsourced certain Services to provide such Services to the Tronox Group,
the Parent Group shall have no liability whatsoever with respect to the
effectiveness or quality of any Service that is prevented, hindered, or delayed
thereby and, following five (5) Business Days prior written notice to the
Receiving Party, shall be excused from the performance of such Service; and

 

(iii)                               if
the Tronox Group is unable, despite the good faith cooperation of the Parent
Group in accordance with Sections 6(c) and 7(a) of this Agreement, to
obtain any required transfer or assignment agreements or any other agreements
necessary to transfer contractual rights of the Parent Group, that existed
immediately prior to the Closing Date, the Parent Group shall have no liability
whatsoever with respect to the effectiveness or quality of any Service that is
prevented, hindered, or delayed thereby and, following five (5) Business
Days prior written notice to the Receiving Party, shall be excused from the
performance of such Service; and

 

(iv)                              the
Parent Group may suspend performance and the Tronox Group’s access to
information technology or communications systems used by the Parent Group if,
in the Parent Group’s reasonable judgment, the integrity, security or
performance of such systems, or any data stored thereon, is being or is likely
to be jeopardized by the activities of any member of the Tronox Group, its
employees, agents, representatives or contractors.

 

Section 9.                                            Payment
and Audit Rights.

 

(a)                                  Generally.  In consideration of each Service provided
hereunder, during the Term of this Agreement, the Receiving Party shall pay the
Providing Party, on a monthly basis, an amount equal to the Service Costs
attributable to the Services provided by the Providing Party during the prior
month period.  Upon a material reduction
in the Services to be provided to the Receiving Party by the Providing Party
(through Separation), such payment amounts shall be commensurately
reduced.  With respect to any particular
Service, if any, requiring additional payment by the Receiving Party, the
Receiving Party shall pay the Providing Party in accordance with the
specifications set forth on the exhibit describing such Service.  To the extent that during

 

8

 

the Term of
this Agreement the parties mutually agree to modify, amend, delete or add to
the Services, the parties shall cooperate to determine in good faith an
equitable adjustment to the amounts paid by the Receiving Party to the
Providing Party.

 

(b)                                 Invoices.  With respect to the Services actually
provided, the Providing Party shall invoice the Receiving Party on a monthly
basis for all amounts due the Providing Party hereunder with respect to such
Services. For the avoidance of doubt, it is hereby understood that, unless
mutually agreed in writing amongst the parties hereto, amounts due hereunder
shall consist solely of Service Costs. Such invoices shall be accompanied by a
reasonable accounting of all invoiced amounts, all third party invoices and
receipts related to such invoiced amounts and such other supporting documentation
as may be reasonably requested by the Receiving Party.

 

(c)                                  Payment.  Each party shall pay the other party for any
properly invoiced amounts within 30 days of receipt of the invoice and other
information required by Section 9(b); provided, however,
that if such paying party shall have a bona fide dispute with the amount
invoiced, then such paying party shall pay only the undisputed amount at such
time and the parties shall seek to resolve such dispute in accordance with Section 7
of this Agreement. All payments hereunder shall be made by deposit of United
States Dollars in the requisite amount to such bank account as the party
receiving such payment may from time to time designate by notice to the paying
party.  Late payments of undisputed
amounts shall bear interest at the published one-month LIBOR Rate plus 2% per
annum.

 

(d)                                 Audit
Rights.  With respect to a particular
Service, the Receiving Party shall have the right to audit the financial and
other records of the Providing Party and any member of the Providing Party’s
Group related to the provision of such Service, the systems and undertakings (including
testing protocols) used to provide such Service and the incurrence of
Transition Costs; provided, however,
that such right to audit shall exist only for so long as such financial or
other records are retained by the Providing Party under its records retention
policies or practices; provided, further, that such
financial and other records shall be retained for a minimum of two years after
the termination of this Agreement.  If
any such audit reveals any excess amounts paid by the Receiving Party, the
Providing Party shall, promptly after receipt of the results of such audit, (a) pay
to the Receiving Party any such excess amounts, with interest from the date of
payment due at the published one-month LIBOR Rate plus 2% per annum, and (b) if
such excess amounts represent more than 2% of the total amount actually owed
under this Agreement with respect to such Service, reimburse the Receiving
Party for the reasonable out-of-pocket cost of such audit.

 

(e)                                  Taxes.  Any taxes (other than Transfer Taxes) assessed
on the provision of any Service hereunder shall be included in the Service
Costs of such Services.

 

Section 10.                                      Confidentiality.

 

(a)                                  With
respect to any Service, the Receiving Party with respect thereto agrees that (i) all
software, hardware or data store, procedures and materials provided to such
Receiving Party by or on behalf of the Providing Party in connection with such
Service are solely for the use of the Receiving Party and members of its Group solely
for purposes of using such Services during the Term (provided that benefits
received by third parties in the ordinary course of business conducted with a
Receiving Party shall not be subject to this Section 10); (ii) title
to

 

9

 

any software,
hardware or data store or any other intellectual property or proprietary right
of any kind used in performing such Service shall, as between such Receiving
Party and the Providing Party, remain in the Providing Party; (iii) such
Receiving Party shall not copy, modify, reverse engineer, decompile, distribute
or in any way alter or make derivative works of any software, hardware or data
store used in performing such Service without the Providing Party’s prior
written consent, and (iv) such Receiving Party shall comply with any and
all usage guidelines pertaining to any Service and provided by or on behalf of
a Providing Party, including without limitation, any and all usage guidelines
pertaining to software, data, or other intellectual property or proprietary
rights. Notwithstanding the foregoing, (x) the hardware and software licenses
set forth in Schedules 2.2(j), 2.2(k) and 2.2(l) shall not be subject to this Section 10(a) (and
the Tronox Group shall be solely responsible for complying with all terms and
conditions applicable to such hardware and software licenses) and (y) any
software, hardware, data store, procedures or materials purchased for the
Receiving Party pursuant to Section 3(b) of this Agreement in
connection with the Separation of a Service or the independent functionality of
the Receiving Party, and any assets acquired or purchased by a Receiving Party
for its own account, shall not be subject to this Section 10(a).

 

(b)                                 Each
party shall use the other party’s data solely to exercise its rights or perform
its obligations, as applicable, under this Agreement.  No party shall sell, assign, lease,
disseminate or otherwise dispose of any of the other party’s data received or
accessed as a consequence of the receipt or performance of Services pursuant to
this Agreement.  No party shall possess
or assert any property interest in, or any lien, security interest or other
right against or to, any of the other party’s data, and each party shall afford
to the other party’s data the same level of security that is afforded to its
own data.  Nothing in this Agreement or
in the performance or use of the Services hereunder shall be deemed to
transfer, assign or otherwise convey any rights, title or interests in or to
any intellectual property or proprietary rights of one party to the other party; provided, however, each party shall grant to the other
party a non-exclusive, limited purpose, non-transferable, non-assignable, non-sublicenseable
license to any intellectual property set forth in Schedule 2.2(m)
of Exhibit A and any software interfaces owned exclusively and developed
in-house by the Providing Party and used to provide Services hereunder
(collectively, the “Licensed Intellectual
Property”), to the extent such intellectual property license is
necessary, in the case of a Receiving Party, to utilize the Services in
accordance with this Agreement, and in the case of a Providing Party, such
license is necessary to perform its obligations under this Agreement, which
license shall terminate on the earlier of the date (x) the party granting such
license shall no longer have the right to license such Licensed Intellectual
Property as contemplated herein, and (y) the recipient of such license ceases
to use such Licensed Intellectual Property in connection with the Services
described in this Agreement in the manner expressly contemplated and described
in this Agreement. Each party expressly reserves all rights, title and
interests in and to its intellectual property that are not licensed in
accordance with this Agreement.   Each
party shall not possess or assert any interest in or any lien or security
interest or other right against or to any of the other party’s intellectual
property beyond any licenses granted pursuant to this Agreement.  Notwithstanding any other provision of this
Agreement, each party shall be free to use for itself and for others, in any
manner, the general knowledge, skill or experience acquired by that party in
the course of the performance of this Agreement, including using that knowledge
for any present or future customer or other business partner.

 

10

 

(c)                                  The
parties hereto acknowledge that, pursuant to the mutual provision of Services
or as a result of the transfer of certain business operations and assets
(including information technology, software and hardware) contemplated by the
Master Separation Agreement, each Group shall possess or have access (intentionally
or inadvertently) to information that belongs to the other Group or has
commercial value in that other Group’s business, and is not in the public
domain, including information relating to its customers, suppliers, finances,
operations, facilities and markets (“Confidential Information”).  Neither Group shall disclose, use, sell,
assign, lease or otherwise dispose of the other Group’s Confidential
Information, except as otherwise expressly permitted by this Agreement or the Master
Separation Agreement. A Providing Party hereunder shall not, and shall use its
commercially reasonable efforts to ensure that Providing Party’s employees,
contractors and other agents do not use the Services to access any of a
Receiving Party’s Confidential Information that is outside the scope of the
Service provided.  Nothing in this Section 10(c) shall
be construed as obligating any party hereto to disclose its Confidential
Information to any other party, or as granting to or conferring on another
party, expressly or by implication, any rights or license to its Confidential
Information, provided that the parties acknowledge that, in order to perform
the Services, a Providing Party shall have custody of and usage of certain of a
respective Receiving Party’s Confidential Information and each party hereby
grants to each other party acting as a Providing Party to it the right to do so
in accordance with this Agreement.

 

(d)                                 Notwithstanding
Section 10(c), Information is not Confidential Information to the extent
that: (i) the Information is or becomes publicly available through no
fault of the party which received the Information from the other party, (ii) the
same Information is rightfully in the possession of a party prior to receipt of
that Information from another party; provided, however
that Tronox Group Information or data that is in the Parent Group’s possession
prior to the Closing Date and is otherwise Confidential Information of the Tronox
Group shall be Confidential Information, (iii) the same Information is
independently developed (without the use of another party’s Confidential
Information) by the party which received that information from such other
party, or (iv) the same Information becomes available to a party on a
non-confidential basis from a source other than another party hereto, which
source, to the knowledge of the disclosing party, is not prohibited from
disclosing that information by a legal, contractual or fiduciary obligations to
the party about whom such Information pertains.

 

(e)                                  Notwithstanding
Section 10(c), a party hereto shall not have violated the terms of this Section 10
for disclosing Confidential Information:

 

(i)                                     to
third parties performing services required under this Agreement where (A) 
use of that Confidential Information by that third party is authorized under
this Agreement; or (B) disclosure is reasonably necessary or typically
occurs in the natural course of the third party’s duties; provided,
in each case, that the third party has executed
a written confidentiality agreement under which the third party is obligated to
maintain the confidentiality of the Confidential Information in a manner substantially
equivalent to this Agreement;

 

(ii)                                  in
order to comply with any applicable Laws, provided that
as soon as practicable and legally permitted the disclosing party shall notify
the party whose Confidential Information was or is to be disclosed of the
disclosure or possible disclosure under this subsection; or

 

11

 

(iii)                               to
the disclosing party’s independent auditors under an obligation of
confidentiality.

 

Section 11.                                      Term.

 

(a)                                  The
term of this Agreement (the “Term”) shall
commence on the date hereof, and, unless earlier terminated in accordance with Section 11(b),
shall continue until the first anniversary of the Closing Date.  This agreement may only be extended by written
agreement of the parties as evidenced by the signature of authorized
representatives of such parties.

 

(b)                                 Notwithstanding
the foregoing, the commencement dates and, if sooner than the first anniversary
of the Closing Date, the termination dates of any Service shall be as set forth
in the applicable exhibit; provided, however,  that where such dates are not specified in the
exhibits, the term of a Service shall coincide with the term of this Agreement;
provided, further, that the Receiving
Party with respect to any Service may terminate the term of such Service upon
thirty (30) days notice to the Providing Party.

 

(c)                                  Notwithstanding
anything to the contrary set forth in this Agreement, if any party hereto
defaults in any of its material obligations with respect to a Service
hereunder, and such default is not cured within 30 days after the resolution,
pursuant to Section 7, of a dispute entered as a result of such default,
the party not in default shall be entitled, without prejudice to any of its
other rights conferred on it by this Agreement, and in addition to any other
remedies available to it by law or in equity, to terminate its obligations with
respect to such Service.

 

Section 12.                                      Consequences
of Termination.

 

(a)                                  Termination
or expiration of this Agreement for any reason shall be without prejudice to
any rights that shall have accrued to the benefit of a party prior to such
termination or expiration.  Such
termination, relinquishment, or expiration shall not relieve a party from
obligations that are expressly indicated to survive the termination or
expiration of this Agreement.

 

(b)                                 Upon
termination or expiration of this Agreement, each party, at the request of the
other, shall return all relevant records and materials in its possession or
control containing or comprising the other party’s Information and to which the
returning party does not retain rights hereunder (except one copy of which may
be retained in such files for archival purposes).

 

Section 13.                                      Disclaimer of
Warranties.  EACH PARTY EXPRESSLY
DISCLAIMS ALL WARRANTIES, EXPRESS, STATUTORY AND IMPLIED, INCLUDING, BUT NOT
LIMITED TO, WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
TITLE, NON-INFRINGEMENT, QUIET ENJOYMENT, NO ENCUMBRANCES, SYSTEM INTEGRATION,
ACCURACY, WORKMANLIKE EFFORT AND WARRANTIES ARISING THROUGH COURSE OF DEALING
OR USAGE OF TRADE.  NEITHER PARTY MAKES
ANY REPRESENTATIONS OR WARRANTIES AS TO THE QUALITY, SUITABILITY, AVAILABILITY,
RELIABILITY, SECURITY, PERFORMANCE OR ADEQUACY OF THE SERVICES.

 

12

 

Section 14.                                      Damages.  NOTWITHSTANDING ANYTHING TO THE CONTRARY
CONTAINED HEREIN, EXCEPT AS EXPRESSLY SET FORTH HEREIN, NO PARTY HERETO SHALL BE
LIABLE TO ANY OTHER PARTY HERETO (INCLUDING ITS RESPECTIVE HEIRS, LEGAL
REPRESENTATIVES, SUCCESSORS OR ASSIGNS, AS THE CASE MAY BE, HEREUNDER) FOR
ANY LOSSES THAT ARE NOT REASONABLY FORESEEABLE OR ANY DAMAGES FOR THE LOSS OF
PROFITS, BUSINESS, ANTICIPATED SAVINGS, GOODWILL, OR THE LOSS OF OR DAMAGE TO
DATA OR ANY OTHER INCIDENTAL, CONSEQUENTIAL, SPECIAL OR PUNITIVE DAMAGES
ARISING OUT OF THIS AGREEMENT OR ITS TERMINATION OR ANY TRANSACTION
CONTEMPLATED BY THIS AGREEMENT, WHETHER FOR BREACH OF REPRESENTATION OR
WARRANTY OR COVENANT OR OTHER AGREEMENT OR ANY OBLIGATION ARISING THEREFROM OR
OTHERWISE, WHETHER LIABILITY IS ASSERTED IN CONTRACT OR TORT (INCLUDING GROSS
NEGLIGENCE, NEGLIGENCE AND STRICT PRODUCT LIABILITY) AND REGARDLESS OF WHETHER
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE.  EACH PARTY HERETO HEREBY WAIVES ANY CLAIMS
THAT THESE EXCLUSIONS DEPRIVE SUCH PARTY OF AN ADEQUATE REMEDY.

 

Section 15.                                      Indemnification.
The Providing Party with respect to a particular Service shall not have any
liability to the Receiving Party with respect thereto for the furnishing of or
failure to furnish such Service hereunder, including for Liabilities arising
out of the gross negligence or willful misconduct of the Providing Party or a
member of its Group.  The Receiving Party
shall indemnify, defend and hold harmless the Providing Party and each of its Affiliates
and each of their respective officers, directors, employees, stockholders,
agents and representatives (each an “Indemnitee”) in
respect of all Liabilities related to, arising from, asserted against or
associated with any Service.

 

Section 16.                                      Subrogation.  If any liability arises from the performance
of any Service hereunder by a third party contractor, the Receiving Party with
respect to such Service shall be subrogated to such rights, if any, as the
Providing Party may have against such third party contractor.

 

Section 17.                                      Counterparts;
Entire Agreement.

 

(a)                                  This
Agreement may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party.

 

(b)                                 This
Agreement, and the exhibits and schedules hereto, contain the entire agreement
between the parties with respect to the subject matter hereof, supersede all
previous agreements, negotiations, discussions, writings, understandings,
commitments and conversations with respect to such subject matter and there are
no agreements or understandings between the parties other than those set forth
or referred to herein or therein.

 

13

 

Section 18.                                      Governing Law;
Jurisdiction; Jury Trial Waiver.

 

(a)                                  This
Agreement shall be governed by, and construed in accordance with, the laws of
the State of New York without giving effect to principles of conflicts of laws
thereof.

 

(b)                                 Each
of the parties hereto (i) consents to submit itself to the personal
jurisdiction of the United States District Court for the Southern District of
New York or the Supreme Court of The State of New York, New York County in the
event any dispute arises out of this Agreement or any of the transactions
contemplated hereby, (ii) agrees that it will not attempt to deny or
defeat such personal jurisdiction by motion or other request for leave from any
such court, and (iii) agrees that it will not bring any action relating to
this agreement or any of the transactions contemplated hereby in any court
other than the United States District Court for the Southern District of New
York or the Supreme Court of the State of New York, New York County.

 

(c)                                  EACH
OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR BY
THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 19.                                      Assignability.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and
permitted assigns; provided, however, that, without prejudice to the provisions of Section 6
of this Agreement, no party hereto may assign its respective rights or delegate
its respective obligations under this Agreement without the express prior
written consent of the other parties hereto, except that any party may assign
any of its rights or obligations under this Agreement to any member of its
Group without the prior written consent of the other party.

 

Section 20.                                      Third Party
Beneficiaries.

 

(a)                                  Except
for the indemnification rights under this Agreement of any Indemnitee in its
capacity as such, (a) the provisions of this Agreement are solely for the
benefit of the parties hereto and are not intended to confer upon any other any
rights or remedies hereunder and (b) there are no third party
beneficiaries of this Agreement and this shall not provide any third person
with any remedy, claim, liability, reimbursement, claim of action or other
right in excess of those existing without reference to this Agreement.

 

(b)                                 Unless
otherwise expressly provided herein (other than in the ordinary course of
business of the Receiving Party), (i) each Service shall be provided
solely for the benefit of the applicable Receiving Party and members of its
Group and (ii) no party may sell, transfer, assign or otherwise use the
Services provided to it hereunder or its right to receive such Services, in
whole or in part, for the benefit of any Person other than a member of its
Group.

 

Section 21.                                      Notices.  All notices or other communications under
this Agreement shall be in writing (including by telecopy) and shall be deemed
to be duly given or made when delivered, or, in the case of telecopy, when
received, addressed as follows or to such other address as may be hereafter
notified by the respective party:

 

14

 

	
  To Parent or
  any

  member of the

  Parent Group:

  	
   

  	
  Kerr-McGee
  Corporation

  Kerr-McGee Worldwide Corporation

  Kerr-McGee Center

  123 Robert S. Kerr Avenue

  Oklahoma City, Oklahoma 73102

  Facsimile:   405-270-3649

  Attention:   General Counsel

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Covington &
  Burling

  1330 Avenue of the Americas

  New York, New York 10019

  Facsimile:   212-841-1010

  Attention:   Scott F. Smith

  
	
   

  	
   

  	
   

  
	
  To Tronox or
  any

  member of the

  Tronox Group:

  	
   

  	
  Tronox
  Incorporated

  123 Robert S. Kerr Avenue

  Oklahoma City, Oklahoma 73102

  Facsimile:   405-270-4504

  Attention:   Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
  Tronox
  Incorporated

  123 Robert S. Kerr Avenue

  Oklahoma City, Oklahoma 73102

  Facsimile:   405-270-4101

  Attention:   General Counsel

  

 

Section 22.                                      Independent
Contractor.  At all times during the term of this Agreement, the
Providing Party shall be an  independent
contractor in providing the Services hereunder with the sole right to
supervise, manage, operate, control and direct the performance of the Services
and the sole obligation to employ, compensate and manage its employees and
business affairs.  Nothing contained in
this Agreement shall be deemed or construed to create a partnership or joint venture,
to create the relationships of employee/employer or principal/agent, or
otherwise create any liability whatsoever of any party with respect to the
indebtedness, Liabilities, obligations or actions of the other party or any of
its respective officers, directors, employees, stockholders, agents or
representatives, or any other person or entity.

 

Section 23.                                      Severability.  If any provision of this Agreement or the
application thereof to any Person or circumstance is determined by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining
provisions hereof, or the application of such provision to Persons or
circumstances or in jurisdictions other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall in no
way be affected, impaired or invalidated thereby, so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination, the parties shall
negotiate in good faith in an effort to agree upon such a suitable and
equitable provision to effect the original intent of the parties.

 

Section 24.                                      Force Majeure.  The Providing Party shall not be in default
hereunder by reason of any failure or delay in the performance of its obligations
hereunder where such failure or delay is due to any cause beyond its control,
including strikes, labor disputes, civil

 

15

 

disturbances,
riot, rebellion, invasion, epidemic, hostilities, war, embargo, natural
disaster, acts of God, flood, fire, sabotage, accident, delay in
transportation, loss and destruction of property, intervention by Governmental Authorities,
change in laws, regulations or orders, other events or any other circumstances
or causes beyond the Providing Party’s control. In the event that any Providing
Party reasonably expects a failure or delay in the performance of its
obligations hereunder, such Providing Party shall promptly notify the Receiving
Party of such expectation and shall set forth in such notice, if practicable,
such Providing Party’s reasonable estimate of the nature, extent and duration
of such expected failure or delay. Notwithstanding anything to the contrary
contained herein, any Providing Party that experiences any shortage,
interruption, delay inadequacy or limitation in the availability of any of the
Services (by reason of force majeure or otherwise) and is unable to fulfill the
Receiving Party’s requirements for those Services shall ensure that the
Receiving Party is treated no less favorably than any member of the Providing
Party’s Group in the allocation by the Providing Party between such Group
members and the Receiving Party of such affected Services.

 

Section 25.                                      Headings.  The article, section and paragraph headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.

 

Section 26.                                      Survival.  The provisions of Sections 9, 10 (other than
the licenses granted thereunder), as well as the related provisions of
Sections 12 through 28, shall survive the expiration or earlier
termination of this Agreement for any reason whatsoever.

 

Section 27.                                      Amendments.  No provisions of this Agreement shall be
deemed waived, amended, supplemented or modified by any party, unless such
waiver, amendment, supplement or modification is in writing and signed by the
authorized representative of the party against whom it is sought to enforce
such waiver, amendment, supplement or modification.

 

Section 28.                                      Interpretation.  Words in the singular shall be held to
include the plural and vice versa and words of one gender shall be held to
include the other genders as the context requires. The terms “hereof”, “herein”,
and “herewith” and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement  as
a whole (including all of the Schedules and Exhibits hereto) and not to any
particular provision of this Agreement. Article, Section, Exhibit and Schedule references
are to the Articles, Sections, Exhibits and Schedules to this Agreement unless
otherwise specified. The word “including” and words of similar import when used
in this Agreement shall mean “including, without limitation,” unless the
context otherwise requires or unless otherwise specified. The word “or” shall
not be exclusive.

 

16

 

IN WITNESS WHEREOF, each of the parties has caused this Agreement to be
duly executed and delivered 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

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KERR-MCGEE
  WORLDWIDE 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

  

 

 

EXHIBIT A

 

Services
Provided by Parent Group to Tronox Group

 

1.              Accounting
and Finance Matters

 

1.1                               Accounts
Payable

 

1.1.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to provide information
technology systems hosting services in respect of accounts payable functions.

 

1.1.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 1.1 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

1.1.3                     Systems.  For the purposes of this Section 1.1, Parent
Group shall share and permit access to its systems and data and shall provide
the Tronox Group with information and processing promptly and in conformance
with the standards set forth in the Agreement.

 

1.2                               Credit
Accounting 

 

1.2.1                     Start
Date.  Beginning on the Closing Date
and subject to the terms and conditions of this Agreement, Parent Group shall use
commercially reasonable efforts to transfer to the Tronox Group the Dun &
Bradstreet credit analysis system.

 

1.2.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 1.2 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

1.2.3                     Services.
Subject to provisions of applicable law and contracts, Parent Group shall
provide to the Tronox Group a full listing of customer accounts, approved credit limits and
relevant Parent Group files and documentation related to the business credit
function of the Tronox Group.

 

1.3                               Payroll
/ Employee Benefits / Human Resources 

 

1.3.1                     Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to assist the Tronox Group with respect to general
accounting services with respect to payroll and employee benefits matters.

 

1.3.2                     End
Date.  Parent Group’s obligations pursuant
to this Section 1.3 shall continue until the earlier of Separation or the
first anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

1.3.3                     Services.
Subject to the terms and conditions of the Agreement, Parent Group’s services
provided pursuant to this Section 1.3 shall include the following:

 

A-1

 

(a)                                  Parent
Group shall share with the Tronox Group systems implemented and in production for
the Tronox Group as of the Closing Date.

 

(b)                                 Payroll
administration

 

(c)                                  Benefits
administration

 

1.4                               General
Accounting

 

1.4.1                     Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to assist the Tronox Group with respect to general
accounting services, including general accounting services necessary for Tronox
Group to comply with its SEC obligations.

 

1.4.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 1.4 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

1.4.3                     Services.
Subject to the terms and conditions of this Agreement, beginning on the Closing
Date, Parent Group shall make reasonably available its general accounting
personnel for consultation on matters relating to or affecting the Tronox Group
or any of its members and on which such personnel have relevant familiarity or
expertise and provide information technology hosting in respect of general
accounting matters.

 

1.5                               Tax
Matters Relating to Employee Benefit Plans, Ad Valorem and other Tax Items

 

1.5.1                     Start
Date. Beginning on the Closing Date, Parent Group shall cooperate with the Tronox
Group in obtaining tax compliance for the Tronox Group.

 

1.5.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 1.5 shall continue until the earlier of
Separation or the first anniversary of the Closing Date, unless extended in
accordance with Section 11 of the Agreement.

 

1.5.3                     Services.  Subject to the terms and conditions of the
Agreement, Parent Group shall provide the following services and assistance to
the Tronox Group:

 

(a)                                  Access
to information regarding legacy plans, including any savings plans worldwide,
employees and the tax and accounting treatment thereof, including authority to
consult with current and former third-party providers in connection with such
information.

 

(b)                                 Preparation
of W-2 information for employees of the Tronox Group with respect to the period
prior to Closing if requested.

 

(c)                                  Consultation
and access to Parent Group’s current and former internal and third-party
providers in connection with Plans and employees.

 

A-2

 

(d)                                 Assistance
with, and access to records in connection with, ad valorem tax matters.  Assistance in the collection and transfer of
related historical data to Tronox Group or designated service provider.

 

(e)                                  Additional
assistance, and access to records, in regard to other tax matters pursuant to
historical practices.

 

1.6                               Internal
Audit Matters

 

1.6.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to assist the Tronox
Group with respect to internal audit matters.

 

1.6.2                     End
Date. Parent Group’s obligations pursuant to this Section 1.6 shall
continue until  the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

1.6.3                     Services.
Subject to the terms and conditions of the Agreement, Parent Group shall permit
access to information systems with respect to retained properties as necessary
for the completion of the auditing activities subject of this Section 1.6
and to personnel for consultation with respect to such matters and Parent Group
shall permit the use of its systems for the collection, processing and
reporting of such audits.

 

1.7                               Access
to Accounts, Bank Systems and Funds

 

1.7.1                     Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to assist the Tronox Group with respect to the coordination
of transferred accounts and bank systems.

 

1.7.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 1.7 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

1.7.3                     Services.  Subject to the terms and conditions of the
Agreement, Parent Group’s services provided pursuant to this Section 1.7
shall include the following:

 

(a)                                  Parent
Group shall cooperate with the Tronox Group in facilitating access to
information and transactions involving bank accounts and bank systems
transferred, or intended to be transferred, to the Tronox Group pursuant to the
transactions contemplated by the Master  Separation
Agreement or containing or receiving funds so transferred to the Tronox Group
or otherwise belonging to the Tronox Group.

 

(b)                                 Parent
Group shall permit the Tronox Group access to information regarding accounts of
Parent Group limited to transactions therein which involve funds relating to
the Tronox Group whether prior to, or after, the Closing.

 

A-3

 

(c)                                  If
an account is used by both the Tronox Group and the Parent Group as of the date
hereof, a new bank account shall be created for the benefit of, and in the name
of, the Tronox Group, or certain of its members, as applicable.  Such accounts shall replicate the accounts in
use by the Tronox Group as of the Closing Date. 
If any such accounts are created after the Closing, funds attributable
to the Tronox Group in accounts which are being replicated shall be transferred
to such new accounts upon the establishment of such new accounts.

 

(d)                                 Prior
to the closing, Parent Group shall facilitate the preparation of appropriate
account or bank system transfer documentation, such transfers to be effective
as of the Closing Date or as soon as practicable thereafter.  Subsequent to the Closing Date, Parent Group
shall make its personnel available for consultation and shall execute documents
or assign authority to the Tronox Group where necessary to allow the Tronox
Group to complete any account or bank system transfers.

 

1.8                               Stray
Funds

 

1.8.1                     Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to assist the Tronox Group in the directing of funds
intended to be remitted to the Tronox Group.

 

1.8.2                     Services.  In the event that remittances received into
Parent Group bank accounts relate to sales or services provided by the Tronox
Group (or otherwise intended for the Tronox Group), Parent Group shall promptly
segregate such remittance amounts and whenever the balance of such amounts
exceeds $100,000 or once a week, whichever occurs first, Parent Group shall
remit by wire transfer
the balance collected on behalf of the Tronox Group to the Tronox Group.

 

1.9                               Migration
of Fleet Rental Services

 

1.9.1                     Start
Date.  Beginning on the date hereof, Parent
Group shall use commercially reasonable efforts to cause (or assist, as
applicable) the Tronox Group to have Separation with respect to the fleet
rental services available to the Tronox 
Group as of the date hereof (the “Fleet Rental Services”).

 

1.9.2                     End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.9
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.9 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.9.3                     Services.  Parent Group’s services provided pursuant to
this Section 1.9 shall include the following:

 

(a)                                  Establishment
of a separate account, or accounts, for the Tronox Group with respect to the
Fleet Rental Services.

 

A-4

 

(b)                                 Provide
surety, guarantee, or other credit support or assurance for the Tronox Group’s
obligations pursuant to the Fleet Rental Services as, and for such time, as
reasonably required by the Fleet Rental Services’ service providers.

 

1.10                        Fleet
Rental Services

 

1.10.1              Start
Date. Beginning on the Closing Date, Parent Group shall provide fleet
rental services to the Tronox Group.

 

1.10.2              End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.10
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.10 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.10.3              Services.  Parent Group shall permit the use by Tronox
Group personnel of Parent Group’s fleet rental services as existing and under
the terms applicable as of the date hereof. 
Parent Group shall process the charges and use of such fleet rental
services and shall present to the Tronox Group an accounting of any charges
made on behalf of the Tronox Group after the Closing Date for reimbursement
thereof.

 

1.10.4              Applicable
Service Costs.  Reimbursement
amounts, as set forth in Section 1.10.3, shall be included, without
duplication, in Service Costs.

 

1.11                        Migration
of American Express Travel Charge Cards and Travel Service

 

1.11.1              Start
Date.  Beginning on the date hereof, Parent
Group shall use commercially reasonable efforts to cause (or assist, as
applicable) the Tronox Group to have Separation with respect to the American
Express Travel Charge Card services and American Express Travel services
(together, the “AMEX Services”) available to the
Tronox Group as of the date hereof.

 

1.11.2              End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.11
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.11 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.11.3              Services.  Parent Group’s services provided pursuant to
this Section 1.11 shall include the following:

 

(a)                                  Establishment
of a separate account, or accounts, for the Tronox Group with respect to the
AMEX Services.

 

(b)                                 Provide
surety, guarantee, or other credit support or assurance for the Tronox Group’s
obligations pursuant to the AMEX Services as, and for such time, as reasonably
required by the AMEX Services’ service providers.

 

A-5

 

1.12                        Travel
and Entertainment Expense Reporting

 

1.12.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to provide travel and
entertainment expense reporting and processing services to the Tronox Group.

 

1.12.2              End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.12
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.12 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.12.3              Services.  Parent Group’s services provided pursuant to
this Section 1.12 shall include the following:

 

(a)                                  Parent
Group shall permit the use by Tronox Group personnel of American Express travel
charge cards and American Express Travel services under the terms applicable as
of the date hereof.

 

(b)                                 Parent
Group shall process the charges and use of such cards and services and shall
present to the Tronox Group an accounting of any charges for payment made on
behalf of the Tronox Group after the Closing Date until Separation for
reimbursement thereof.

 

1.12.4              Applicable
Service Cost.  Reimbursement amounts,
as set forth in Section 1.12.3(b), shall be included, without duplication,
in Service Costs.

 

1.13                        Migration of Procurement Card Services

 

1.13.1              Start
Date.  Beginning on the date hereof, Parent
Group shall use commercially reasonable efforts to cause (or assist, as
applicable) the Tronox Group to have Separation with respect to the procurement
card services available to the Tronox Group 
as of the date hereof (the “Procurement Card Services”).

 

1.13.2              End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.13
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.13 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.13.3              Services.  Parent Group’s services provided pursuant to
this Section 1.13 shall include, without limitation, the following:

 

(a)                                  Establishment
of a separate account, or accounts, for the Tronox Group with respect to the
Procurement Card Services.

 

A-6

 

(b)                                 Provide
surety, guarantee, or other credit support or assurance for the Tronox Group’s
obligations pursuant to the Procurement Card Services as, and for such time, as
reasonably required by the Procurement Card Services’ service providers.

 

1.14                        Procurement
Card Management

 

1.14.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to provide procurement
card reporting and processing services to the Tronox Group.

 

1.14.2              End
Date.  Parent Group shall use
commercially reasonable efforts to complete the Services set forth in this Section 1.14
within 180 days after the Closing Date; provided Parent
Group’s obligations pursuant to this Section 1.14 shall continue until the
earlier of Separation or the first anniversary of the Closing Date, unless
extended in accordance with Section 11 of the Agreement.

 

1.14.3              Services.
Parent Group’s services to be provided to the Tronox Group pursuant to this Section 1.14
shall include, without limitation:

 

(a)                                  Parent
Group shall permit the use by Tronox Group personnel of procurement charge
cards under the terms applicable as of the date hereof.

 

(b)                                 Parent
Group shall process the charges and use of such cards and shall present to the Tronox
Group an accounting of any charges made on behalf of the Tronox Group after the
Closing Date for reimbursement thereof.

 

1.14.4              Applicable
Service Cost.  Reimbursement amounts,
as set forth in Section 1.14.3(b), shall be included, without duplication,
in Service Costs.

 

1.15                        Forecasting
Services

 

1.15.1              Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to provide forecasting services (but not budgeting services)
with respect to shared costs for IM&T to the Tronox Group.

 

1.15.2              End
Date.  Parent Group’s obligations
pursuant to this Section 1.15 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

1.16                        Accounting
Testing.  Parent Group and Tronox
Group shall use commercially reasonable efforts to test and demonstrate a full
accounting close of the financial books of the Tronox Group consistent with historical
practices and reports, including, but not limited to, income statements and
balance sheets.  It is understood and
agreed that, notwithstanding any provision to the contrary in this Agreement,
the Tronox Group shall be exclusively responsible for complying with the
requirements of the Sarbanes Oxley Act of 2002 (including with respect to its
testing of internal controls and disclosure controls).

 

A-7

 

2.              Information Management &
Technology.

 

For purposes hereof, the following provisions
shall be known, collectively, as the “IT Separation Standards”
and, unless otherwise provided herein, shall apply to the provision of all
Services described in Section 2 of this Exhibit A:

 

(a)                                  Start
Date.  On or prior to the Closing
Date, Parent Group shall commence commercially reasonable efforts to segregate,
install, implement and provide consulting services for transferred software and
applications set forth in Schedule 2.2(j) (including hardware, enterprise
software and required applications, each an “IT System”),
in each case if and to the extent owned by the Parent Group and utilized by
Tronox Group in its global production environment, as of the date hereof.

 

(b)                                 End
Date.  Parent Group’s obligation
pursuant to Section 2 of this Exhibit A shall end on the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

(c)                                  Personnel.  In connection with the Services to be
provided pursuant to Section 2 of this Exhibit A, beginning on the
Closing Date, each Group shall make reasonably available for consultation with
the other Group those retained employees and consultants or other service
providers of such Group as are reasonably necessary for the provision of such
Services.

 

(d)                                 System
Test.  Parent Group and Tronox Group
shall test each IT System for successful functionality and shall use
commercially reasonable efforts to demonstrate functionality consistent with
historical functionality.  Such testing
shall be conducted by Parent Group and Tronox Group in cooperation with each
other and results of such testing, accompanied by proposed follow-up action,
shall be shared by the Tronox Group and Parent Group.  In the event that such tests and demonstrations
are not deemed successful, the parties’ obligations under this paragraph shall
continue, and such tests shall be repeated at intervals of not more than 15
days, until such time as such tests are successful.  The parties agree that a test of an IT System
shall be deemed successful when such IT System operates, on a stand-alone
basis, in a manner consistent with its operation immediately prior to the
Closing Date.  Once such tests are deemed
successful in accordance with the terms of this paragraph, Parent Group’s
obligations under Section 2 of this Exhibit A shall terminate.

 

2.1                               Elements
of IT System Migration and Replicating. 
Subject to the terms and conditions of this Agreement, the Parent Group
shall take the following steps in connection with the migration and replication
of each IT System:

 

(a)                                  Hardware.  Certain servers, terminals, network
equipment, data storage systems and additional hardware related to each IT
System shall be segregated for the exclusive use of the Tronox Group and each
IT System shall be installed, developed and tested thereon.  Such segregated hardware shall be integrated
into

 

A-8

 

the other
information technology systems that the Parent Group has migrated and
replicated for the Tronox Group in accordance with this Agreement.

 

(b)                                 Software.  All necessary software shall be installed on
the segregated hardware for the complete and independent operation of each IT
System.

 

(c)                                  Data.  All data, reasonably required, subject to the
Parent Group’s records retention policy, for the operation of each IT System by
the Tronox Group, including existing information with respect to historic
operations of the Tronox Group (including historic data and records of all
businesses, including prior businesses, and their transaction details).

 

(d)                                 System
Integration.  The Parent Group shall
assist the Tronox Group in  integrating
each IT System with the other IT Systems that Parent Group migrates and
replicates for the Tronox Group in accordance with this Agreement.

 

(e)                                  System
Modules and Applications. System modules and applications implemented by the Parent
Group for the benefit of the Tronox Group shall be migrated to the Tronox
Group.

 

2.2                               Information
Technology Systems Migration

 

Services.
 Beginning on the Closing Date, Parent
Group shall provide the following services in accordance with the IT Separation
Standards:

 

(a)                                  Deliver
(as necessary), configure and install IT System components as required for
Separation pursuant to this Exhibit A.

 

(b)                                 Jointly
with the Tronox Group, appoint
qualified project managers to manage the transition and Separation
projects.

 

(c)                                  Jointly
with the Tronox Group, develop detailed transition plans for infrastructure,
applications and business processes.

 

(d)                                 Load
pertinent shared applications, databases and data onto Tronox Group hardware
and prior to loading, conduct
appropriate tests jointly with Tronox Group personnel to check whether such
shared applications and data are fully operational in connection
with the comparable hardware and software as used in the Tronox Group systems
and applications that the Parent Group migrates and replicates for the Tronox
Group in accordance with this Agreement.

 

(e)                                  Extract
appropriate data out of Parent Group’s enterprise systems and other
applications in a mutually agreed format for normalization, testing and loading
into Tronox Group systems and applications that the Parent Group migrates and
replicates for the Tronox Group in accordance with this Agreement.

 

A-9

 

(f)                                    Establish
WAN, LAN, and other information technology systems elements to move the Tronox
Group from the Parent Group network to the Tronox Group network, retaining
access to necessary applications.

 

(g)                                 Transition
Tronox Group master data, open balances and transactional data based upon a
mutually agreed plan.

 

(h)                                 Provide
documentation and any other necessary information related to the information
technology systems (including telephone and networking equipment), networks and
applications.

 

(i)                                     Continue
current services, including relevant third-party services, pertaining to
cellphone and calling card programs and shall present to the Tronox Group an
accounting of any charges for payment made on behalf of the Tronox Group in
connection with such programs after the Closing Date until Separation for
reimbursement thereof.

 

(j)                                     Use
commercially reasonable efforts to transfer to the Tronox Group the software
and applications listed on Schedule 2.2(j) hereto.

 

(k)                                  Use
commercially reasonable efforts to transfer the information and technology
assets listed in Schedule 2.2(k) hereto.

 

(l)                                     Use
commercially reasonable efforts to transfer the licenses listed in Schedule 2.2(l)
hereto.

 

2.3                               Information
Technology Systems Services

 

Services: 
Beginning on the Closing Date, Parent Group shall provide the following
Services in accordance with the IT Separation Standards.

 

(a)                                  Infrastructure
(hardware, software, networks, etc.).

 

(b)                                 Access
to data, including databases, datawarehouse, reporting system, processing and
networking.

 

(c)                                  Consultation,
maintenance, support and systems administration.

 

(d)                                 Call-center/help-desk
user support.

 

(e)                                  Monitoring,
managing, operating and maintaining: (i) Data center, including all
servers for data processing and other supporting equipment, (ii) wide area
network (WAN), (iii) local area network (LAN), (iv) telephony
infrastructure, (v) web sites, (vi) business-to-business connections,
including existing EDI and XML partners, (viii) legacy application systems,
(ix) all other interfaces between internal and external applications and
systems, and (xi) chemical datawarehouse and associated databases.

 

A-10

 

(f)                                    Reasonable access
to, or reasonable access to data from, the legacy systems, networks and
applications for data collection and analysis.

 

(g)                                 In
a manner consistent with its records retention policy, retain electronic data
in its enterprise, accounting and other principal systems and applications
relating to the Tronox Group.

 

2.4                               Information
Technology Security

 

Services.  Beginning on the Closing Date, Parent Group
shall provide the following services in accordance with the IT Separation
Standards:

 

(a)                                  firewall
monitoring, administration, configuration and reporting.

 

(b)                                 VPN
and remote-access monitoring, administration, configuration management and
support.

 

(c)                                  E-mail
virus protection, spam filtering and attack monitoring, prevention and
reporting.

 

(d)                                 Real-time
monitoring and updating of virus definitions on all hosts and clients
(including laptops).

 

(e)                                  Host
intrusion detection, protection, configuration, maintenance and support.

 

(f)                                    network
intrusion detection, protection, configuration, maintenance and support.

 

(g)                                 Establishment
of systems access protocols.

 

(h)                                 Computer
incident response.

 

3.              Miscellaneous
Matters

 

3.1                               Legal
Matters

 

3.1.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its internal and external legal
counsel for consultation on matters relating to or affecting the Tronox Group
or any of its members and on which such personnel have relevant familiarity or
expertise.

 

3.1.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.1 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.2                               Medical
Services

 

3.2.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its medical services personnel for
consultation on matters relating to or

 

A-11

 

affecting the Tronox
Group or any of its members and on which such personnel have relevant
familiarity or expertise.

 

3.2.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.2 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.3                               Security

 

3.3.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its security personnel for
consultation with the Tronox Group.

 

3.3.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.3 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.4                               Records
Retention

 

3.4.1                     Start
Date.  Beginning as of the Closing
Date, Parent Group shall use commercially reasonable efforts to retain,
organize and store, records relating to the Tronox Group and not transferred to
the Tronox Group in a manner consistent with its current document retention
policy or practice.  For purposes of this
Section 3.4, the term “records” shall include all formats (electronic,
film, paper, and otherwise) of such records and shall include shared records
not pertaining exclusively to the Tronox Group.

 

3.4.2                     Services.  If and to the extent in existence as of the
date hereof and in possession and control of the Parent Group as of the date
hereof and without imposing any obligation on the Parent Group to create any of
the documents or records described below and subject to the Parent Group’s
document retention policy, Parent Group’s services provided pursuant to this Section 3.4
shall include the following:

 

(a)                                  Parent
Group shall provide the Tronox Group with documentation of records retained by
Parent Group and shall provide the Tronox Group with access to records storage
facilities maintained by Parent Group.

 

(b)                                 Parent
Group shall assist the Tronox Group in the separation of historic records
relating to the Tronox Group in respect of the Chemical Business (as defined in
the Master Separation Agreement) and the other legacy businesses of the Tronox
Group from the common records of the Parent Group and its affiliates as of the Closing
Date, including with respect to the generation of new records documentation
specific to the Tronox Group.

 

(c)                                  Parent
Group shall assist the Tronox Group in the identification, documentation,
removal and duplication of records pertaining to the Tronox Group.

 

A-12

 

(d)                                 Parent
Group shall retain records relating to the following matters for the term of
the Agreement at which time such records which remain shall be delivered to the
Tronox Group, or, if such records are to be discarded or destroyed pursuant to
the practices of the Parent Group, shall deliver such records to the Tronox
Group:

 

(i)                                     Property;

 

(ii)                                  Tax;

 

(iii)                               Environmental
reports and remediation matters;

 

(iv)                              Employee
matters; and

 

(v)                                 Relevant
business documents.

 

3.4.3                     Personnel.  In connection with the Services to be
provided pursuant to this Section 3.4, beginning on the Closing Date,
Parent Group and Tronox Group, as the case may be, shall make reasonably available
for consultation with the Tronox Group and the Parent Group, as the case may
be, those retained employees and consultants or other service providers of the
Parent Group or the Tronox Group, as the case may be, reasonably necessary for
the provision of such Services.

 

3.5                               Government
Affairs

 

3.5.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its government affairs personnel
for consultation on matters relating to or affecting the Tronox Group or any of
its members and on which such personnel have relevant familiarity or expertise.

 

3.5.2                     End
Date.  Services provided pursuant to
this Section 3.5 shall be provided until the earlier of Separation or the
first anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

3.6                               Communications
and Community Affairs

 

3.6.1                     Start
Date. Beginning on the Closing Date, Parent Group shall make reasonably
available its communications and community affairs personnel for consultation
with the Tronox Group.

 

3.6.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.6 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.7                               Office
Services 

 

3.7.1                     Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to provide office services to the Tronox Group in a form and
manner consistent with past practices.

 

A-13

 

3.7.2                     End
Date.  The Tronox Group may terminate
any specific service provided pursuant to this Section 3.7 upon 30 days
notice, and, in the event of such termination, any costs charged to the Tronox
Group shall be commensurately reduced.

 

3.7.3                     Services.  Such office services shall include, but not
be limited to:

 

(a)                                  Those
services historically provided by Trammel Crow or otherwise in the ordinary
course of business (which services shall be billed at actual cost as incurred).

 

(b)                                 Office
space, together with utilities, insurance and related services (which items shall
be billed pro rata to the square footage of space occupied by the Tronox Group).

 

(c)                                  Cafeteria
and catering services (which services shall be billed at actual cost based on usage).

 

3.7.4                     Third-Party
Costs. Costs incurred in the provision of such office services shall be
allocated pursuant to historical practices.

 

3.7.5                     Rent.  The Tronox Group shall pay Parent as rent an
amount per annum equal to $12 per square foot of space of real property owned
by Parent Group and occupied by the Tronox Group, which amount shall be subject
to annual review and adjustment based on the rents of comparable office space
in the local market.  Notwithstanding
anything to the contrary contained herein, the Tronox Group, upon thirty-days
written notice, may reduce, in whole or in part, the amount of such space.  Parking spaces used, as of the Closing Date,
by Tronox Group shall be made available to Tronox Group at no additional charge.  The monthly portion of rent payable pursuant
to this Section 3.7.5 shall be included in Service Costs.

 

3.8                               Risk
Management

 

3.8.1                     Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to provide assistance in
claims administration, including, in particular, with respect to claims
existing as of the Closing Date and claims which are not separable from claims
of the Parent Group.

 

3.8.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.8 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.8.3                     Services.
Subject to the terms and conditions of the Agreement, Parent Group’s services
provided pursuant to this Section 3.8 shall include, but not be limited
to, access to its records and personnel (including third party consultants and
service providers) for purposes of claims administration and consulting with
respect to claims relating to the Tronox Group.

 

A-14

 

3.8.4                     Personnel.  In connection with the Services to be
provided pursuant to this Section 3.8, beginning on the Closing Date, Parent
Group and Tronox Group, as the case may be, shall make reasonably available for
consultation with the Tronox Group and the Parent Group, as the case may be,
those retained employees and consultants or other service providers of the
Parent Group or the Tronox Group, as the case may be, reasonably necessary for
the provision of such Services.

 

3.9                               Human
Resources

 

3.9.1                     Start
Date.  Beginning as of the Closing
Date, Parent Group shall use commercially reasonable efforts to separate the
personnel and resources applicable to human resources administration in
connection with the Tronox Group such that such separate personnel and
resources may independently conduct such human resource administration.

 

3.9.2                     End
Date.  Parent Group’s obligations
pursuant to this Section 3.9 shall continue until  the earlier of Separation or the first anniversary
of the Closing Date, unless extended in accordance with Section 11 of the
Agreement.

 

3.9.3                     Services.  Subject to the terms and conditions of the
Agreement, Parent Group’s services provided pursuant to this Section 3.9
shall include the following:

 

(a)                                  Separation
of personnel, systems, records, applications and data related to the Tronox
Group.

 

(b)                                 Assistance
in the integration of human resource activities and resources into the
information technology system of the Tronox Group.

 

(c)                                  Provision
of human resource administration services, including payroll and benefits
matters, (through personnel, systems, service providers, or otherwise) to the
extent required to maintain such services, on behalf of the Tronox Group, to
the extent and at the level provided to the Tronox Group as of the Closing Date.

 

(d)                                 Processing
and payment of payroll obligations, including remittance of payroll taxes to
the appropriate taxing authority.

 

3.9.4                     Personnel.  In connection with the Services to be provided
pursuant to this Section 3.9, beginning on the Closing Date, Parent Group
and Tronox Group, as the case may be, shall make reasonably available for
consultation with the Tronox Group and the Parent Group, as the case may be,
those retained employees and consultants or other service providers of the
Parent Group or the Tronox Group, as the case may be, reasonably necessary for
the provision of such Services.

 

3.10                        Emergency
Response Services and Disaster Recovery Services

 

3.10.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall use commercially reasonable efforts to provide assistance
with, and use of, disaster recovery

 

A-15

 

services and
personnel (including with respect to process, systems and communications
issues).

 

3.10.2              End
Date.  Parent Group’s obligations
pursuant to this Section 3.10 shall continue until the earlier of Separation
or the first anniversary of the Closing Date, unless extended in accordance
with Section 11 of the Agreement.

 

3.10.3              Services.  Parent Group’s services provided pursuant to
this Section 3.10 shall include, the provision of disaster recovery
services available as of the Closing Date.

 

3.11                        Relocation
and Expatriate Services

 

3.11.1              Start
Date. Beginning on the Closing Date, Parent Group shall use commercially
reasonable efforts to provide the Tronox Group with consultation and assistance
in relocation and expatriate services and shall transfer to the Tronox Group
records relevant to such services and the Tronox Group.

 

3.11.2              End
Date.  Parent Group’s obligations
pursuant to this Section 3.11 shall continue for a period of 90 days
following the Closing Date.

 

3.12                        Investor
Relations

 

3.12.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its investor personnel for consultation
with the Tronox Group.

 

3.12.2              End
Date.  Services provided pursuant to
this Section 3.12 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.13                        Electrolytic

 

3.13.1              Start
Date. Beginning on the Closing Date, the Parent Group shall make reasonably
available its retained managerial personnel with respect to the electrolytic
business for consultation with the Tronox Group.

 

3.13.2              End
Date.  Services provided pursuant to
this Section 3.13 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.14                        Gas
Hedging 

 

3.14.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall (i) make reasonably available its oil and gas marketing
group personnel for the purpose of gas hedging consultation and (ii) with respect to commodity swap transaction cash settlements associated
with the Tronox Group, continue to process settlements with trading partners
outstanding as of the Closing Date in accordance with

 

A-16

 

existing terms and conditions and, after the Closing Date, forward
promptly to Tronox Group any associated cash proceeds or payables.

 

3.14.2              End
Date.  Parent Group’s obligations
pursuant to this Section 3.14 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

3.15                        Corporate
Planning

 

3.15.1              Start
Date. Beginning on the Closing Date, Parent Group shall make reasonably
available its consulting personnel for consultation with the Tronox Group in
connection with investor relations and cash-flow consolidation support and
consultation.

 

3.15.2              End
Date.  Parent Group’s obligations
pursuant to this Section 3.15 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

3.16                        Personnel

 

3.16.1              Start
Date.  Beginning on the Closing Date,
Parent Group shall make reasonably available its personnel from time to time
for consultation on matters relating to or affecting the Tronox Group or any of
its members and on which such personnel have relevant familiarity or expertise.

 

3.16.2              End
Date.  Parent Group’s obligations
pursuant to this Section 3.16 shall continue until the earlier of
Separation or the first anniversary of the Closing Date, unless extended in
accordance with Section 11 of the Agreement.

 

3.17                        Letters
of Credit; Surety Bonds or Financial Assurance

 

If Parent Group maintains any letters of credit, surety bonds or like
instruments for the benefit of the Tronox Group, the Tronox Group shall
reimburse Parent Group for the costs and fees associated with such instruments.  If requested by Tronox Group, Parent Group
shall use commercially reasonable efforts to assist Tronox Group in
establishing substitute letters of credit, surety bonds or like instruments for
the benefit of Tronox Group; provided, however, that Parent Group shall have no obligation
whatsoever to post any collateral or other financial guarantee in favor of the
Tronox Group in connection with the Services described in this Section 3.14.

 

3.18                        Workers
Compensation

 

The Tronox Group shall reimburse Parent Group for any worker
compensation claims paid by Parent Group in respect of the businesses of the Tronox
Group from and after the Closing Date.

 

A-17

 

3.19                        Insurance
Premiums

 

The Tronox Group shall reimburse Parent Group for Tronox Group’s pro rata share of any insurance premiums incurred by Parent
Group under any Parent Insurance Policy (as defined in the Master Separation
Agreement) for the period of time during which members of the Tronox Group are
covered under such policy pursuant to Section 2.6 of the Master Separation
Agreement; provided, however, that the Tronox Group shall not
be required to reimburse Parent Group for (i) any incremental premium
surcharge billed by Oil Insurance Limited in the fourth quarter of 2005 or (ii) any
premiums incurred by Parent Group with respect to directors’ and officers’
liability insurance policies covering matters occurring prior to the Closing
Date.

 

A-18

 

EXHIBIT B

 

Services Provided by Tronox Group to Parent Group

 

1.              Accounting
and Finance Matters

 

1.1                               Accounts
Payable 

 

1.1.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall use commercially reasonable efforts to provide accounts
payable services to the Parent Group if requested.

 

1.1.2                     End
Date.  The Tronox Group’s obligations
pursuant to this Section 1.1 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

1.1.3                     Services.
The Tronox Group shall use commercially reasonable efforts to assist the Parent
Group in the processing of accounts payable matters relevant to activities
prior to, and after, the Closing Date, including with respect to:

 

(a)                                  Processing
vendor invoices, including interfacing with accounting and other systems,
including Oracle;

 

(b)                                 Processing
travel expense reports;

 

(c)                                  Stop
payment coordination;

 

(d)                                 1099
Misc. reporting;

 

(e)                                  Invoice
filing; and

 

(f)                                    Document
retention.

 

1.1.4                     Systems.  For the purposes of this Section 1.1,
the Tronox Group shall share and permit access to its systems and data and
shall provide the Parent Group with information and processing promptly and in
conformance with the standards set forth in the Agreement.

 

1.2                               Stray
Funds

 

1.2.1                     Start
Date. Beginning on the Closing Date, the Tronox Group shall assist the Parent
Group in the directing of funds intended to be remitted to the Parent Group.

 

1.2.2                     Services.  In the event that remittances received into Tronox
Group bank accounts relate to sales or services provided by the Parent Group
(or otherwise intended for the Parent Group), the Tronox Group shall promptly
segregate such remittance amounts and whenever the balance of such amounts
exceeds $100,000 or once a week, whichever occurs first, the Tronox Group shall
remit by wire transfer
the balance collected on behalf of the Parent Group to the Parent Group.

 

B-1

 

1.3                               General
Accounting

 

1.3.1                     Start
Date. Beginning on the Closing Date, the Tronox Group shall use
commercially reasonable efforts to assist the Parent Group with respect to
general accounting services, including general accounting services necessary
for Parent Group to comply with its SEC obligations.

 

1.3.2                     End
Date.  Tronox Group’s obligations
pursuant to this Section 1.3 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement.

 

1.3.3                     Services.
Subject to the terms and conditions of this Agreement, beginning on the Closing
Date, Tronox Group shall make reasonably available its general accounting
personnel for consultation on matters relating to or affecting the Parent Group
or any of its members and on which such personnel have relevant familiarity or
expertise and provide information technology hosting in respect of general
accounting matters.

 

2.              Information
Technology and Management

 

2.1                               Disaster
Recovery Services

 

2.1.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall use commercially reasonable efforts to provide
assistance to the Parent Group with respect to disaster recovery services
available through the research and development center of the Tronox Group.

 

2.1.2                     End
Date.   The Tronox Group’s
obligations pursuant to this Section 2.1 shall continue until  the earlier of Separation or the first
anniversary of the Closing Date, unless extended in accordance with Section 11
of the Agreement..

 

2.1.3                     Services.  The Tronox Group’s services provided pursuant
to this Section 2.1 shall include the provision of disaster recovery
services consistent with the services available as of the Closing Date.

 

2.1.4                     Personnel.  In connection with the Services to be
provided pursuant to this Section 2.1, beginning on the Closing Date,
Parent Group and Tronox Group, as the case may be, shall make reasonably
available for consultation with the Tronox Group and the Parent Group, as the
case may be, those retained employees and consultants or other service
providers of the Parent Group or the Tronox Group, as the case may be,
reasonably necessary for the provision of such Services.

 

2.2                               IM&T
Personnel

 

2.2.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall make reasonably available its retained IM&T
personnel for consultation or other IM&T services needed from time to time
by the Parent Group.

 

B-2

 

2.2.2                     End
Date.  Services provided pursuant to
this Section 2.2 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.              Miscellaneous

 

3.1                               Risk
Management 

 

3.1.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall make reasonably available its retained risk management
personnel for the purpose of consultation, assistance with insurance program
procurement or other risk management services needed by the Parent Group.

 

3.1.2                     End
Date.  Services provided pursuant to
this Section 3.1 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.2                               Real
Property

 

3.2.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall make reasonably available its retained real property
personnel for consultation or other real property administration services
needed from time to time by the Parent Group.

 

3.2.2                     End
Date.  Services provided pursuant to
this Section 3.2 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.3                               Intellectual
Property Legal Matters

 

3.3.1                     Start
Date.  Beginning on the Closing Date,
the Tronox Group shall make reasonably available its retained intellectual
property legal personnel for consultation with the Parent Group.

 

3.3.2                     End
Date.  Services provided pursuant to
this Section 3.3 shall be provided until 
the earlier of Separation or the first anniversary of the Closing Date,
unless extended in accordance with Section 11 of the Agreement.

 

3.4                               Legal
Matters

 

3.4.1                     Start
Date.  Beginning on the Closing Date,
Tronox Group shall make reasonably available its internal and external legal
counsel for consultation on matters relating to or affecting the Parent Group
or any of its members and on which such personnel have relevant familiarity or
expertise.

 

3.4.2                     End
Date.  Tronox Group’s obligations
pursuant to this Section 3.4 shall continue until the earlier of
Separation or the first anniversary of the Closing Date, unless extended in
accordance with Section 11 of the Agreement.

 

B-3

 

3.5                               Personnel

 

3.5.1                     Start
Date.  Beginning on the Closing Date,
Tronox Group shall make reasonably available its personnel from time to time
for consultation on matters relating to or affecting the Parent Group or any of
its members and on which such personnel have relevant familiarity or expertise.

 

3.5.2                     End
Date.  Tronox Group’s obligations
pursuant to this Section 3.5 shall continue until the earlier of
Separation or the first anniversary of the Closing Date, unless extended in
accordance with Section 11 of the Agreement.

 

B-4

 

Exhibit C

 

Amount of Transition
Costs
(amounts in
USD thousands)

 

	
  Treasury

  	
   

  	
   

  	
   

  	
   

  
	
  XRT-CERG Conversion

  	
   

  	
  $

  	
  .1

  	
   

  
	
  IMT

  	
   

  	
   

  	
   

  
	
  (includes
  Hardware, Software, Consulting, Misc. Other Expenses and Contingency)

  	
   

  	
  9.8

  	
   

  

 

Accounting

 

	
  Oracle conversion

  	
   

  	
  Included in

  IMT Costs

  	
   

  
	
  Human Resources

  	
   

  	
   

  	
   

  
	
  Benefits
  plans (assumed set up plans that mirror existing KM pension, medical)

  	
   

  	
  1.1

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total One-Time Transition Costs

  	
   

  	
  $

  	
  11.0

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00094-of-00352.parquet"}]]