Document:

Exhibit 10.1

 

STOCK OPTION AGREEMENT

 

THIS
AGREEMENT, dated as of December 14, 2007 is made by and between Rockwood
Holdings, Inc., a Delaware corporation (hereinafter referred to as the “Company”),
and [NAME] an employee of the
Company or a Subsidiary (as defined below) or Affiliate (as defined below) of
the Company, hereinafter referred to as “Optionee.”

 

WHEREAS, the
Company wishes to afford the Optionee the opportunity to purchase shares of its
common stock, par value $0.01 per share (the “Common Stock”);

 

WHEREAS, the
Company wishes to carry out the Plan (as hereinafter defined), the terms of
which are hereby incorporated by reference and made a part of this Agreement;
and

 

WHEREAS, the
committee of the Company’s board of directors appointed to administer the Plan
(the “Committee”) has determined that it would be to the advantage and best
interest of the Company and its shareholders to grant the Option provided for
herein to the Optionee as an incentive for increased efforts during his term of
office with the Company or its Subsidiaries or Affiliates, and has advised the
Company thereof and instructed the undersigned officers to issue said Option;

 

NOW,
THEREFORE, in consideration of the mutual covenants herein contained and other
good and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto do hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Whenever the
following terms are used in this Agreement, they shall have the meaning
specified in the Plan or below unless the context clearly indicates to the
contrary.

 

Section 1.1.    - Affiliate

 

“Affiliate”
shall mean, with respect to the Company, any entity directly or indirectly
controlling, controlled by, or under common control with, the Company or any
other entity designated by the Board of Directors in which the Company or an
Affiliate has an interest.

 

Section 1.2.     - Cause

 

“Cause” shall
mean (i) the Optionee’s willful and continued failure to perform duties,
which are within the control of the Optionee and consistent with such Optionee’s
title and position, that is not cured within 15 days following written notice
of such failure, (ii) the Optionee’s conviction of or plea of guilty or no
contest to a (x) felony or (y) crime involving moral turpitude, (iii) the
Optionee’s willful malfeasance or misconduct which is injurious to the Company
or its Subsidiaries, other than in a manner that is insignificant or
inconsequential, (iv) a breach by Optionee of the material terms of any
non-compete, non-solicitation or confidentiality covenants or agreements by
which the Optionee may be bound, following notice of such breach (which notice
may be oral or written) or (v) any violation by the Optionee of any
material written Company policy after written notice of such breach, if such
violation is shown by the Company to be reasonably expected to result in
material injury to the business, reputation or financial condition of the
Company.

 

 

Section 1.3.     - Change of Control

 

“Change of
Control” shall mean (i) sales of all or substantially all of the assets of
the Company to a Person who is not Kohlberg Kravis Roberts & Co. Ltd (“KKR”)
or an affiliate of KKR (collectively, the “KKR Partnerships”), (ii) a sale
by KKR or any of its respective affiliates resulting in more than 50% of the
voting stock of the Company being held by a Person or Group that does not include KKR or any of
its respective affiliates, or (iii) a merger, consolidation,
recapitalization or reorganization of the Company with or into another Person
which is not an affiliate of KKR; if, and only if, as a result of any of the
foregoing events in clauses (i), (ii) or (iii) above, the KKR
Partnerships lose the ability, without the approval of any Person (applicable
to the respective foregoing events in clauses (i), (ii) or (iii) above)
who is not an affiliate of KKR, to elect a majority of the Board of Directors
(or the board of directors of the resulting entity).  Notwithstanding the foregoing, if any of the
transactions described in clauses (i), (ii) or (iii) of the preceding
sentence shall occur and the other Person involved in such transaction (or its
ultimate parent entity) is an operating company controlled by KKR or an
affiliate of KKR prior to such transaction (an “Alternate KKR Entity”), then
the determination of whether a change of control has occurred shall be made by
determining whether an event set forth in clauses (i), (ii) or (iii) above
has occurred (including the ability to elect a majority of the Board or the
board of directors of the resulting entity) if the Alternate KKR Entity is
treated as being unaffiliated with KKR and by treating the voting power of the
Alternate KKR Entity in the Company (or the resulting entity) as if it were
held by a Person unaffiliated with KKR.

 

Section 1.4.    - Disability

 

“Disability”
shall mean a determination, made at the request of the Optionee or upon the
reasonable request of the Company set forth in a notice to the Optionee, by a
physician selected by the Company and the Optionee, that the Optionee is unable
to perform his duties as an employee of the Company or its subsidiaries and in
all reasonable medical likelihood such inability will continue for a period in
excess of 180 consecutive days.

 

Section 1.5.     - Good Reason

 

“Good Reason”
shall mean without the Optionee’s consent, (i) a reduction in the Optionee’s
base salary or annual bonus opportunity (other than a reduction in base salary
that is offset by an increase in bonus opportunity upon the attainment of
reasonable financial targets, which reduction may not exceed 10% of the
Optionee’s base salary in any 12 month period), (ii) a substantial
reduction in the Optionee’s duties and responsibilities, which continues beyond
15 days after written notice by the Optionee to the Company of such reduction, (iii) the
elimination or reduction of the Optionee’s eligibility to participate in the
Company’s benefit programs that is inconsistent with the eligibility of
similarly situated employees of the Company to participate therein, (iv) a
transfer of the Optionee’s primary workplace by more than 35 miles from the
current workplace, (v) any serious chronic mental or physical illness of
an immediate family member that requires the Optionee to terminate his or her
employment with the Company because of a substantial interference with his or
her duties at the Company or (vi) any failure by the Company to pay when
due any payment owed to the Optionee within 15 days after the date such payment
becomes due.

 

Section 1.6.    - Grant Date

 

“Grant Date”
shall mean December 14, 2007, the date on which the Option provided for in
this Agreement is granted.

 

Section 1.7.     - Group

 

“Group” shall
mean two or more Persons acting together as a partnership, limited partnership,
syndicate or other group for the purpose of acquiring, holding or disposing of
securities of the Company.

 

 

Section 1.8.    - Option

 

“Option” shall
mean the Option (which shall, in part and to the extent permitted by applicable
law and as set forth on the signature page hereto, be an “incentive stock
option”, within the meaning of Section 422 of the Code) to purchase Common
Stock granted under this Agreement.  To
the extent that, for any reason, an Option intended to be an incentive stock
option does not qualify as an incentive stock option, it shall be deemed an
option that is not an incentive stock option.

 

Section 1.9.    - Person

 

“Person” shall
mean “person”, as such term is used for purposes of Section 13(d) or
14(d) of the Securities Exchange Act of 1934, as amended (or any successor
section thereto).

 

Section 1.10.     -
Plan

 

“Plan” shall
mean the Amended and Restated 2005 Stock Purchase and Option Plan of Rockwood
Holdings, Inc. and Subsidiaries.

 

Section 1.11.      - Retirement

 

“Retirement”
shall mean retirement at age 62 or over (or such other age as may be approved
by the Board of Directors) after having been employed by the Company or a
Subsidiary for at least five full years.

 

 Section 1.12.     - Secretary

 

“Secretary”
shall mean the Secretary of the Company.

 

ARTICLE II

 

GRANT OF OPTIONS

 

Section 2.1.      - Grant of Option

 

For good and
valuable consideration, on and as of the date hereof the Company irrevocably
grants to the Optionee an Option to purchase any part or all of an aggregate of
the number of shares set forth on the signature page hereof of its Common
Stock upon the terms and conditions set forth in this Agreement.

 

Section 2.2.       - Exercise Price

 

Subject to Section 2.4,
the exercise price of the shares of Common Stock covered by the Option shall be
$32.39 per share without commission or other charge (which is the fair market
value per share of the Common Stock on the Grant Date).

 

Section 2.3.       - No 
Guarantee of Employment

 

Nothing in
this Agreement or in the Plan shall confer upon the Optionee any right to
continue in the employ of the Company or any Subsidiary or Affiliate or shall
interfere with or restrict in any way the rights of the Company and its
Subsidiaries or Affiliates, which are hereby expressly reserved, to terminate
the employment of the Optionee at any time for any reason whatsoever, with or
without cause.

 

 

Section 2.4.       - Adjustments in Option Pursuant to
Merger, Consolidation, etc.

 

(a) Subject
to Sections 8 and 9 of the Plan, in the event that the outstanding shares of
the stock subject to the Option, are, from time to time, changed into or
exchanged for a different number or kind of shares of the Company or other
securities of the Company by reason of a merger, consolidation,
recapitalization, reclassification, stock split, stock dividend, combination of
shares, or other corporate event, the Committee shall make, as appropriate and
equitable, an adjustment in the number and kind of shares and/or the amount of
consideration as to which or for which, as the case may be, such Option, or
portions thereof then unexercised, shall be exercisable and/or, other than in
an event that is a Change of Control, shall pay to the Optionee a dividend in
respect of the shares of Common Stock subject to the Option, in any event in
order to allow the Optionee to participate in such corporate event in an
equitable manner.  Any such adjustment
made by the Committee shall be final and binding upon the Optionee, the Company
and all other interested persons.

 

(b) Subject
to Sections 8 and 9 of the Plan, in the event of a Change of Control in which
all of the then outstanding Common Stock will be cancelled and converted into
the right to receive a cash payment per share of Common Stock (such cash
payment, the “Change of Control Consideration”), the Committee may, in its
discretion, either: (i) cause the Option (to the extent then outstanding
and not previously exercised) to, effective as of the effective date of such a
Change of Control, be converted into a right to receive a cash payment (payable
as soon as practicable after the Change of Control) equal to the product of (x) the
excess, if any, of (A) the Change of Control Consideration, over (B) the
exercise price per share of Common Stock subject to such Option, multiplied by (y) the
total number of shares of Common Stock subject to such Option; or (ii) cause
the Option (to the extent then outstanding and not previously exercised) to,
effective as of the effective date of such a Change of Control, be substituted
for new options to purchase shares of common stock of an acquiring or surviving
entity (or any other entity that may provide for such a substitute award under Section 424
of the Code) (or, to the extent permitted under Section 409A of the Code,
be substituted for stock appreciation rights settled in cash or other equity or
equity-based awards) that will substantially preserve the otherwise applicable
terms of the Option, as determined by the Committee in its sole
discretion.  In the event that the
exercise price of any Option is equal to or greater than the Change of Control
Consideration, such Option shall be automatically cancelled and have no further
force or effect without payment of any consideration in respect thereof.

 

(c) In
the event of a Change of Control in which Section 2.4(b) hereof does
not apply, the Committee shall take any such other actions as may be in
accordance with Sections 8 and 9 of the Plan and Section 2.4(a) of
this Agreement in connection with the Option, or portions thereof unexercised.

 

(d) All
actions taken by the Committee under this Section 2.4 shall be final and
binding upon the Optionee, the Company and all other interested persons.

 

ARTICLE III

 

PERIOD OF EXERCISABILITY

 

Section 3.1.        - Commencement of Exercisability

 

(a)           So long as the Optionee continues to
be employed by the Company or its Subsidiaries, the Option shall become
exercisable pursuant to the following schedule:

 

	
  Date Option Becomes Exercisable

  	
   

  	
  Percentage of Option Shares Granted

  As to Which Option Is Exercisable

  	
   

  
	
  December 31,
  2008

  	
   

  	
  33 1/3

  	
  %

  
	
  December 31,
  2009

  	
   

  	
  66 2/3

  	
  %

  
	
  December 31,
  2010

  	
   

  	
  100

  	
  %

  

 

 

(b)           Notwithstanding the foregoing, the
Option shall become immediately exercisable as to 100% of the shares of Common
Stock subject to such Option  as follows
(but only to the extent such Option has not otherwise terminated or become
exercisable): (i) in the event that the Optionee’s employment is
terminated by the Company and its Subsidiaries without Cause or the Optionee
resigns with Good Reason within the two-year period that commences on the
effective date of a Change of Control, but only if such termination occurs at
least six months after the Grant Date; or (ii) in the event the Optionee’s
employment is terminated as a result of the Optionee’s death or Disability.

 

(c)           Notwithstanding the foregoing, the
Option shall become immediately exercisable as to 50% of the shares of Common
Stock subject to such Option (but only to the extent such Option has not
otherwise terminated or become exercisable) in the event that the Optionee’s
employment is terminated by the Company and its Subsidiaries without Cause or
the Optionee resigns with Good Reason within the two-year period that commences
on the effective date of a Change of Control, but only if such termination
occurs within six months of the Grant Date.

 

(d)           Notwithstanding the foregoing, no Option
(which do(es) not otherwise become exercisable or vested in accordance with Section 3.1(a),
(b) or (c) above) shall become exercisable as to any additional
shares of Common Stock following the termination of employment of the Optionee
for any reason and any Option, which is unexercisable or not vested as of the
Optionee’s termination of employment, shall be immediately cancelled and/or
forfeited by the Optionee without consideration therefor.

 

Section 3.2.        - Expiration of Option

 

The Optionee may
not exercise the Option to any extent after the first to occur of the following
events:

 

(a)           The seventh anniversary of the Grant
Date, so long as the Optionee remains employed through such anniversary; or

 

(b)           The seventh anniversary of the Grant
Date, if the Optionee’s employment is terminated by reason of Retirement; or

 

(c)           The first anniversary of the date of
the Optionee’s termination of employment due to the Optionee’s death or
Disability; or

 

(d)           The first anniversary of the date of
the Optionee’s termination of employment if the Optionee’s employment is
terminated by the Company without Cause or the Optionee resigns with Good
Reason within the two-year period that commences on the effective date of a
Change of Control; or

 

(e)           Ninety (90) days after an Optionee’s
termination of employment by the Company for any reason, other than due to the
Optionee’s Disability or for Cause, or by the Optionee for any reason, except
as set forth in Section 3.2(d) above; or

 

(f)            Immediately upon termination, if the
Optionee’s employment is terminated by the Company for Cause; or

 

(g)           If the Committee so determines
pursuant to Section 2.4(b)(i), the effective date of a Change of Control;
or

 

 

(h)           If the Committee so determines
pursuant to Section 9 of the Plan, the effective date of either the merger
or consolidation of the Company into another Person, or the exchange or
acquisition by another Person of all or substantially all of the Company’s
assets or 80% or more of its then outstanding voting stock, or the recapitalization,
reclassification, liquidation or dissolution of the Company.  At least ten (10) days prior to the
effective date of such merger, consolidation, exchange, acquisition,
recapitalization, reclassification, liquidation or dissolution, the Committee
shall give the Optionee notice of such event if the Option has then neither
been fully exercised nor become unexercisable under this Section 3.2.

 

ARTICLE IV

 

EXERCISE OF OPTION

 

Section 4.1.        - Person Eligible to Exercise

 

During the
lifetime of the Optionee, only he may exercise an Option or any portion
thereof.  After the death of the
Optionee, any exercisable portion of an Option may, prior to the time when an
Option becomes unexercisable under Section 3.2, be exercised by his
personal representative or by any person empowered to do so under the Optionee’s
will or under the then applicable laws of descent and distribution.

 

Section 4.2.         - Partial Exercise

 

Any
exercisable portion of an Option or the entire Option, if then wholly exercisable,
may be exercised in whole or in part at any time prior to the time when the
Option or portion thereof becomes unexercisable under Section 3.2;
provided, however, that any partial exercise shall be for whole shares of
Common Stock only.

 

Section 4.3.         -
Manner of Exercise

 

An Option, or
any exercisable portion thereof, may be exercised solely by delivering to the
Secretary or his office all of the following prior to the time when the Option
or such portion becomes unexercisable under Section 3.2:

 

(a)           Notice in writing signed by the
Optionee or the other person then entitled to exercise the Option or portion
thereof, stating that the Option or portion thereof is thereby exercised, such
notice complying with all applicable rules established by the Committee;

 

(b)           Full payment (in cash, by check or by
a combination thereof) for the shares with respect to which such Option or
portion thereof is exercised;

 

(c)           A bona fide written representation
and agreement, in a form satisfactory to the Committee, signed by the Optionee
or other person then entitled to exercise such Option or portion thereof,
stating that the shares of stock are being acquired for his own account, for
investment and without any present intention of distributing or reselling said
shares or any of them except as may be permitted under the Securities Act of
1933, as amended (the “Act”), and then applicable rules and regulations
thereunder, and that the Optionee or other person then entitled to exercise
such Option or portion thereof will indemnify the Company against and hold it
free and harmless from any loss, damage, expense or liability resulting to the
Company if any sale or distribution of the shares by such person is contrary to
the representation and agreement referred to above; provided, however, that the
Committee may, in its reasonable discretion, take whatever additional actions
it deems reasonably necessary to ensure the observance and performance of such
representation and agreement and to effect compliance with the Act and any
other federal or state securities laws or regulations;

 

 

(d)           Full payment to the Company of all
amounts which, under federal, state or local law, it is required to withhold
upon exercise of the Option; and

 

(e)           In the event the Option or portion
thereof shall be exercised pursuant to Section 4.1 by any person or
persons other than the Optionee, appropriate proof of the right of such person
or persons to exercise the option.

 

In
addition to the foregoing, the Optionee may, in the Committee’s good faith discretion,
make payment of the exercise price (as required in Section 4.3(b) above)
in shares of Common Stock that the Optionee has held for at least six months or
otherwise pursuant to an irrevocable broker loan program established by the
Committee; and may also pay any taxes required to be withheld and paid upon any
exercise (as required in Section 4.3(d) above) pursuant to an
irrevocable broker loan program established by the Committee.

 

Without limiting the generality of the
foregoing, the Committee may require an opinion of counsel acceptable to it to
the effect that any subsequent transfer of shares acquired on exercise of an
Option does not violate the Act, and may issue stop-transfer orders covering
such shares.  Share certificates
evidencing stock issued on exercise of this Option shall bear an appropriate
legend referring to the provisions of subsection (c) above and the
agreements herein.  The written
representation and agreement referred to in 

subsection (c) above shall, however, not
be required if the shares to be issued pursuant to such exercise have been
registered under the Act, and such registration is then effective in respect of
such shares.

 

Section 4.4.         - Conditions to Issuance of Stock
Certificates

 

The shares of
stock deliverable upon the exercise of an Option, or any portion thereof, may
be either previously authorized but unissued shares or issued shares, which
have then been reacquired by the Company. 
Such shares shall be fully paid and nonassessable.  The Company shall not be required to issue or
deliver any certificate or certificates for shares of stock purchased upon the
exercise of an Option or portion thereof prior to fulfillment of all of the
following conditions:

 

(a)           The obtaining of approval or other
clearance from any state or federal governmental agency which the Committee
shall, in its reasonable and good faith discretion, determine to be necessary
or advisable; and

 

(b)           The lapse of such reasonable period
of time following the exercise of the Option as the Committee may from time to
time establish for reasons of administrative convenience.

 

Section 4.5.         - Rights as Stockholder

 

The holder of
an Option shall not be, nor have any of the rights or privileges of, a
stockholder of the Company in respect of any shares purchasable upon the
exercise of the Option or any portion thereof unless and until certificates
representing such shares shall have been issued by the Company to such holder.

 

ARTICLE V

 

MISCELLANEOUS

 

Section 5.1.         - Administrationp

 

The Committee
shall have the power to interpret the Plan and this Agreement and to adopt such
rules for the administration, interpretation and application of the Plan
as are consistent therewith and to interpret or revoke any such rules.  All actions taken and all interpretations and
determinations made by the Committee shall be final and binding upon the
Optionee, the Company and all other interested persons.  No member of the Committee shall be
personally liable for any action, determination or

 

 

interpretation
made in good faith with respect to the Plan or the Options.  In its absolute discretion, the Board of
Directors may at any time and from time to time exercise any and all rights and
duties of the Committee under the Plan and this Agreement.

 

Section 5.2.         - Option Not Transferable

 

Neither the
Option nor any interest or right therein or part thereof shall be liable for
the debts, contracts or engagements of the Optionee or his successors in
interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and
distribution.

 

Section 5.3.          - Shares to Be Reserved

 

The Company
shall at all times during the term of the Option reserve and keep available
such number of shares of stock as will be sufficient to satisfy the
requirements of this Agreement.

 

Section 5.4.          - Notices

 

Any notice to
be given under the terms of this Agreement to the Company shall be addressed to
the Company in care of its Secretary, and any notice to be given to the
Optionee shall be addressed to him at the address given beneath his signature
hereto.  By a notice given pursuant to
this Section 5.4, either party may hereafter designate a different address
for notices to be given to him.  Any notice,
which is required to be given to the Optionee, shall, if the Optionee is then
deceased, be given to the Optionee’s personal representative if such
representative has previously informed the Company of his status and address by
written notice under this Section 5.4. 
Any notice shall have been deemed duly given when enclosed in a properly
sealed envelope or wrapper addressed as aforesaid, deposited (with postage
prepaid) in a post office or branch post office regularly maintained by the
United States Postal Service.

 

Section 5.5.          - Titles

 

Titles are
provided herein for convenience only and are not to serve as a basis for
interpretation or construction of this Agreement.

 

Section 5.6.          - Applicability of Plan

 

The Option and
the shares of Common Stock issued to the Optionee upon exercise of the Option
shall be subject to all of the terms and provisions of the Plan, to the extent
applicable to the Option and such shares. 
In the event of any conflict between this Agreement and the Plan, the
terms of the Plan shall control.

 

Section 5.7.          - Amendment

 

This Agreement
may be amended only by a writing executed by the parties hereto, which
specifically states that it is amending this Agreement.

 

Section 5.8.          - Governing Law

 

The laws of the State of
Delaware shall govern the interpretation, validity and performance of the terms
of this Agreement regardless of the law that might be applied under principles
of conflicts of laws.

 

 

Section 5.9.          - Arbitration

 

In the
event of any controversy among the parties hereto arising out of, or relating
to, this Agreement which cannot be settled amicably by the parties, such
controversy shall be finally, exclusively and conclusively settled by mandatory
arbitration conducted in New York expeditiously in accordance with the American
Arbitration Association rules, by a single independent arbitrator.  If the parties are unable to agree on the
selection of an arbitrator, then any party may petition the American
Arbitration Association for the appointment of the arbitrator, which
appointment shall be made within ten days of the petition therefor.  Either the Company or the Optionee  may institute such arbitration proceeding by giving written notice to the
other party.  The arbitrator shall hold a
hearing within 30 days of his or her appointment.  In preparation for their presentation at such
hearing, each party may depose a maximum of four people.  Each such deposition shall last no more than
six hours.  Each side may file with the
arbitrator one brief, not in excess of 30 pages, excluding exhibits.  Each side shall have no more than eight hours
to present its position to the arbitrator. 
The hearing shall be no more than three days in length.  The decision of the arbitrator shall be final
and binding upon all parties hereto and shall be rendered pursuant to a written
decision, which contains a detailed recital of the arbitrator’s reasoning.  Judgment upon the award rendered may be
entered in any court having jurisdiction thereof.

 

[Signatures on next
page.]

 

 

IN WITNESS
WHEREOF, this Agreement has been executed and delivered by the parties hereto.

 

	
   

  	
   

  	
  ROCKWOOD HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  OPTIONEE:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Address

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Optionee’s
  Taxpayer Identification Number:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
							

 

	
  Aggregate
  number of shares

  of Common
  Stock for which

  the Option
  granted

  hereunder is
  exercisable

  (100% of
  total number of shares):

   

                ;
  of which

   

                
  shall be incentive stock options and

   

                  shall be non-qualified stock options.Exhibit 10.2

 

PERFORMANCE RESTRICTED STOCK UNIT AWARD AGREEMENT

 

THIS
AGREEMENT (the “Agreement”), is made, effective
as of December 14, 2007 (the “Grant Date”)
between Rockwood Holdings, Inc., a Delaware corporation (hereinafter
called the “Company”), and [NAME], an employee of
the Company or an Affiliate (as defined below) of the Company, hereinafter
referred to as the “Employee”.

 

WHEREAS, the Company desires to grant the Employee a
performance restricted stock unit award as provided for hereunder (the “Performance Restricted Stock Unit Award”), ultimately
payable in shares of common stock, par value $0.01 per share (the “Common Stock”),
pursuant to the Amended and Restated 2005 Stock Purchase and Option Plan of
Rockwood Holdings, Inc. and Subsidiaries 
(the “Plan”), the terms of which are
hereby incorporated by reference and made a part of this Agreement (capitalized
terms not otherwise defined herein (including Appendix A) shall have the same
meanings as in the Plan);

 

WHEREAS, the committee of the Company’s board of
directors appointed to administer the Plan (the “Committee”),
has determined that it would be to the advantage and best interest of the
Company and its shareholders to grant the shares of Common Stock provided for
herein to the Employee as an incentive for increased efforts during his term of
office with the Company or its Subsidiaries or Affiliates, and has advised the
Company thereof and instructed the undersigned officers to grant said
Performance Restricted Stock Unit Award;

 

NOW, THEREFORE, in consideration of the mutual
covenants herein contained and other good and valuable consideration, receipt
of which is hereby acknowledged, the parties hereto do hereby agree as follows:

 

1.             Grant
of the Performance Restricted Stock Units. 
Subject to the terms and conditions of the Plan and the additional terms
and conditions set forth in this Agreement, the Company hereby grants to the
Employee the opportunity to vest in up to [insert 200% of target number of
RSUs] Performance Restricted Stock Units (the “Maximum RSUs”),
of which [insert 100% of target number of RSUs] Performance Restricted Stock
Units represent your “Target RSUs.”  An “RSU” or a “Performance Restricted
Stock Unit” represents the right to receive one share of Common
Stock.  The Performance Restricted Stock
Units shall vest and become nonforfeitable in accordance with Section 2
hereof.

 

2.             Vesting.
The vesting of the Performance Restricted Stock Units Award shall be subject to
the satisfaction of the conditions set forth in both subsection (a) and
subsection (b) of this Section 2:

 

(a)           Service
Vesting Requirement.

 

(i)            Unless otherwise provided in this
Agreement, so long as the Employee continues to be employed by the Company or
its Subsidiaries, on December 31, 2010 (such date, the “Vesting Date”), the Employee shall become vested in a number
of Performance Restricted Stock Units (not to exceed the number set forth in Section 1
above) determined based on the formulas set forth in Section 2(b) below.  Promptly after the Determination Date (as
such term is defined in Section 2(b)(iii) below) (but in no event
later than December 31 of the year in which the Vesting Date occurs) the
Company shall distribute to the Employee a number of shares of Common Stock
equal to the number of Performance Restricted Stock Units that become vested in
accordance with Section 2(b) hereof. 
Any number of Performance Restricted Stock Units that do not become
vested in accordance with Section 2(b) hereof (to the extent not
already previously forfeited pursuant to Section 2(a)(iii) below)
shall, effective as of the Vesting Date, be forfeited by the Employee without
consideration and this Agreement shall terminate without payment in respect
thereof.

 

 

(ii)           If, prior to the Vesting Date, the
Employee’s employment with the Company and its Subsidiaries is terminated for
any reason by the Employee (other than due to the Employee’s death, Disability
or Retirement) or by the Company and its Subsidiaries for Cause, then the
Performance Restricted Stock Units shall be forfeited by the Employee without
consideration and this Agreement shall terminate without payment in respect
thereof.

 

(iii)          If, prior to the Vesting Date, the
Employee’s employment with the Company and its Subsidiaries is terminated by
the Company and its Subsidiaries other than for Cause or due to the Employee’s
death, Disability or Retirement, then this Agreement shall remain outstanding
and, on the Vesting Date, the Performance Restricted Stock Units shall become
vested as to a number of shares of Common Stock equal to the product of (i) the
number of Performance Restricted Stock Units in which the Employee would have
become vested pursuant to Section 2(b) below, if the Employee had
remained employed with the Company through the Vesting Date, and (ii) a
fraction, the numerator of which is equal to the number of days between (and
including) the Grant Date and the date such employment so terminates, and the
denominator of which is equal to 1097 (such fraction, the “Proration
Factor”); provided, however,
that the Employee shall not receive distribution of the shares of Common Stock
equal to the number of Performance Restricted Stock Units that become vested
under this Section 2(a)(iii) until the Vesting Date.

 

(b)           Performance Vesting Requirement.
The Performance Restricted Stock Unit Award shall, so long as the Employee
remains employed with the Company or its Subsidiaries through the Vesting Date
(or the provisions of Section 2(a)(iii) otherwise apply), vest on the
Vesting Date as follows:

 

(x) up
to 70% of the Maximum RSUs awarded hereunder (the “EBITDA RSUs”)
shall become vested if and to the extent that the Company’s Adjusted EBITDA is
increased above the Company’s 2007 Adjusted EBITDA, on an annualized basis,
over the three-calendar year period commencing on January 1, 2008 and
ending on December 31, 2010 (the “Performance Period”),
by certain specified percentages as set forth on Schedule I attached hereto and
incorporated by reference herein (such increase, the “Annualized
EBITDA Growth”); and

 

(y) up
to the remaining 30% of the Maximum RSUs (the “EPS RSUs”)
awarded hereunder shall become vested if and to the extent that the Company’s
Diluted Earnings Per Share is increased above the Company’s 2007 Diluted
Earnings Per Share, on an annualized basis, over the Performance Period, by
certain specified percentages as set forth on Schedule 2 attached hereto and
incorporated by reference herein (such increase, the “Annualized
EPS Growth”).

 

(i) 
The EBITDA RSUs shall vest based upon the achievement by the Company of the
applicable Annualized EBITDA Growth in respect of the Performance Period as set
forth on Schedule I.

 

(ii) 
The EPS RSUs shall vest based upon the achievement by the Company of the
applicable Annualized EPS Growth in respect of the Performance Period as set
forth on Schedule II.

 

(iii)          Whether and to what extent the EBITDA
RSUs and/or the EPS RSUs have become vested shall be determined by the
Committee at its first meeting after the Financial Statement Approval Date
following the end of the Performance Period (the “Determination
Date”), upon the Committee’s certification of the Company’s
achievement of the applicable performance goals set forth in Sections 2(b)(i) and
(ii) above.

 

(c)           Effect of Change of Control.  Notwithstanding anything set forth in Section 2(a) or
(b) above, if there occurs a Change of Control prior to the Vesting Date
and:

 

(i)            the Employee is still employed with
the Company or its Subsidiaries upon the occurrence of such Change of Control,
the Performance Restricted Stock Units shall immediately vest and become
converted into the right to receive a cash payment equal to the product of (x) the
total 

 

 

number of
Target RSUs and (y) the price per share paid for one share of Common Stock
in the Change of Control transaction (such payment, the “CIC Cashout
Amount”), which amount shall be payable on the Vesting Date; provided,
however, that if, within the one year period that commences on the
Change of Control but prior to the Vesting Date, (A) the Employee’s
employment is terminated by the Company and its Subsidiaries without Cause or
by the Employee for Good Reason, the timing of the payment of the amount
otherwise due and payable under this Section 2(c) shall be
accelerated and shall be paid to the Employee within ten (10) business
days after the date of such termination of employment; or (B) the Employee’s
employment with the Company and its Subsidiaries is terminated by the Company
and its Subsidiaries for Cause or by the Employee for any reason (other than
due to the Employee’s death, Disability, Retirement or by the Employee for Good
Reason), then the Performance Restricted Stock Units and the right to receive
any cash as set forth in this Section 2(c) shall be forfeited by the
Employee without consideration and this Agreement shall terminate without
payment in respect thereof; or

 

(ii)           the Employee has ceased to be
employed with the Company or its Subsidiaries prior to such Change of Control
under circumstances set forth in Section 2(a)(iii) above, the
Employee shall, in lieu of the shares of Common Stock otherwise distributable
pursuant to Section 2(a)(iii) on the Vesting Date, instead be
entitled to receive a cash payment, payable on the Vesting Date, equal to the
product of (x) the CIC Cashout Amount and (y) the Proration Factor.

 

(d)           For purposes of this Agreement,
capitalized terms not otherwise defined above or below, or in the Plan, shall
have the meanings set forth in Appendix A attached to this Agreement and
incorporated by reference herein.

 

3.             Dividend Equivalents.  With respect to each cash dividend or
distribution (if any) paid with respect to Common Stock to holders of record on
and after the Grant Date, the Employee shall be entitled to receive a number of
shares of Common Stock, in an amount equal to the product of (i) the
amount of such dividend or distribution paid with respect to one share of
Common Stock, multiplied by (ii) the number of vested Performance
Restricted Stock Units then held by the Employee (plus any number of shares of
Common Stock previously paid in respect of any other cash dividend or
distribution), at such time as the Employee receives a distribution of shares
of Common Stock pursuant to the applicable provision of Section 2
above.  In the event of any stock
dividend, the provisions of Section 8 of the Plan shall apply to this
Performance Restricted Stock Unit Award.

 

4.             Limitation on Obligations.  The Company’s obligation with respect to the
Performance Restricted Stock Units granted hereunder is limited solely to the
delivery to the Employee of shares of Common Stock on the date when such shares
are due to be delivered hereunder, and in no way shall the Company become
obligated to pay cash in respect of such obligation.  This Performance Restricted Stock Unit Award
shall not be secured by any specific assets of the Company or any of its
subsidiaries, nor shall any assets of the Company or any of its subsidiaries be
designated as attributable or allocated to the satisfaction of the Company’s
obligations under this Agreement.

 

5.             Rights as a Stockholder.  The Employee shall not have any rights of a
common stockholder of the Company unless and until the Employee becomes
entitled to receive the shares of Common Stock pursuant to Section 2
above.  As soon as practicable following
the date that the Employee becomes entitled to receive the shares of Common
Stock pursuant to Section 2, certificates for the Common Stock shall be
delivered to the Employee or to the Employee’s legal guardian or
representative.

 

6.             Transferability.  The Performance Restricted Stock Units shall
not be subject to alienation, garnishment, execution or levy of any kind, and
any attempt to cause any such awards to be so subjected shall not be
recognized.  The shares of Common Stock
acquired by the Employee pursuant to Section 2 of this Agreement may not
at any time be transferred, sold, assigned, pledged, hypothecated or otherwise
disposed of unless such transfer, sale, assignment, pledge, hypothecation or
other disposition complies with applicable securities laws.

 

 

7.             Purchaser’s Employment by the
Company.   Nothing contained in this
Agreement obligates the Company or any Subsidiary to employ the Employee in any
capacity whatsoever or prohibits or restricts the Company (or any Subsidiary)
from terminating the employment, if any, of the Employee at any time or for any
reason whatsoever, with or without Cause, and the Employee hereby acknowledges
and agrees that neither the Company nor any other Person has made any
representations or promises whatsoever to the Employee concerning the Employee’s
employment or continued employment by the Company or any Affiliate thereof.

 

8.             Change in Capitalization.  In the event of any change in the outstanding
Common Stock by reason of a stock split, spin-off, stock dividend, stock
combination or reclassification, recapitalization or merger, change of control,
or similar event, the provisions of Section 8 shall govern the treatment
of this Performance Restricted Stock Unit Award.

 

9.             Withholding.   It shall be a condition of the obligation of
the Company upon delivery of Common Stock to the Employee pursuant to Section 2
above that the Employee pay to the Company such amount as may be requested by
the Company for the purpose of satisfying any liability for any federal, state
or local income or other taxes required by law to be withheld with respect to
such Common Stock.  The Company shall be
authorized to take such action as may be necessary, in the opinion of the
Company’s counsel (including, without limitation, withholding Common Stock
otherwise deliverable to the Employee hereunder and/or withholding amounts from
any compensation or other amount owing from the Company to the Employee), to
satisfy the obligations for payment of the minimum amount of any such
taxes.  In addition, if the Company’s
accountants determine that there would be no adverse accounting implications to
the Company, the Employee may be permitted to elect to use Common Stock
otherwise deliverable to the Employee hereunder to satisfy any such
obligations, subject to such procedures as the Company’s accountants may
require.  The Employee is hereby advised
to seek his own tax counsel regarding the taxation of the grant of Performance
Restricted Stock Units made hereunder.

 

10.           Securities Laws.  Upon the delivery of any Common Stock to the
Employee, the Company may require the Employee to make or enter into such
written representations, warranties and agreements as the Committee may
reasonably request in order to comply with applicable securities laws or with
this Agreement.  The delivery of the
Common Stock hereunder shall be subject to all applicable laws, rules and
regulations and to such approvals of any governmental agencies as may be
required.

 

11.           Section 409A of the Code.  In the event that it is reasonably determined
by the Company that , as a result of the deferred compensation tax rules under
Section 409A of the Internal Revenue Code of 1986, as amended (and any
related regulations or other pronouncements thereunder) (“the Deferred Compensation Tax Rules”), benefits that the
Employee is entitled to under the terms of this Agreement may not be made at
the time contemplated by the terms hereof or thereof, as the case may be,
without causing Employee to be subject to tax under the Deferred Compensation
Tax Rules, the Company shall, in lieu of providing such benefit when otherwise
due under this Agreement, instead provide such benefit on the first day on
which such provision would not result in the Employee incurring any tax
liability under the Deferred Compensation Tax Rules; which day, if the Employee
is a “specified employee” within the meaning of the Deferred Compensation Tax
Rules, may, in the event the benefit to be provided is due to the Employee’s
separation from service with the Company and its Subsidiaries, shall be the
first day following the six-month period beginning on the date of such
separation from service.

 

12            Notices.  Any notice to be given under the terms of
this Agreement to the Company shall be addressed to the Company in care of its
Secretary, and any notice to be given to the Employee shall be addressed to him
at the address given beneath his signature hereto.  By a notice given pursuant to this Section 12,
either party may hereafter designate a different address for notices to be
given to him.  Any notice which is required
to be given to the Employee shall, if the Employee is then deceased, be given
to the Employee’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this Section 12.  Any notice shall have been deemed duly given
when enclosed in a properly sealed envelope or wrapper addressed as aforesaid, 

 

 

deposited
(with postage prepaid) in a post office or branch post office regularly
maintained by the United States Postal Service

 

13.           Governing Law.  The laws of the State of Delaware (or if the
Company reincorporates in another state, the laws of that state) shall govern
the interpretation, validity and performance of the terms of this Agreement
regardless of the law that might be applied under principles of conflicts of
laws.

 

14.           Performance Restricted Stock Unit
Award Subject to Plan.   The
Performance Restricted Stock Unit Award shall be subject to all applicable
terms and provisions of the Plan, to the extent applicable to the Common
Stock.   In the event of any conflict
between this Agreement and the Plan, the terms of the Plan shall control.

 

15.           Signature in Counterparts.  This Agreement may be signed in counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument.

 

[Signatures on
next page.]

 

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement effective as
of the date hereof.

 

	
   

  	
  ROCKWOOD
  HOLDINGS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  [NAME]

  

 

 

 

Appendix A

 

Definitions

 

“2007
Adjusted EBITDA” shall mean the Company’s Adjusted EBITDA as reported in the
Company’s Form 10-K filed with the Securities Exchange Commission in
respect of the 2007 fiscal year of the Company.

 

“2007
Diluted Earnings Per Share” shall mean the Company’s diluted earnings per share
of the Common Stock, as reported in the Company’s audited financial statements
included in the Company’s Form 10-K filed with the Securities Exchange
Commission in respect of the 2007 fiscal year of the Company and as adjusted
for non-recurring and unusual items.

 

“Adjusted
EBITDA” shall mean:  “Consolidated EBITDA”
as defined in the Credit Agreement dated as of July 30, 2004 among
Rockwood Specialties Group, Inc., Rockwood Specialties Limited, Rockwood
Specialties International, Inc., the lenders party thereto, Credit Suisse
First Boston, acting through its Cayman Islands Branch, as administrative agent
and collateral agent, and UBS Securities LLC and Goldman Sachs Credit Partners
L.P., as co-syndication agents thereunder, filed as Exhibit 10.1 to
Rockwood Specialties Group, Inc.’s Report on Form 8-K filed with the
Securities and Exchange Commission on August 4, 2004 (“Credit Agreement”),
except that, for the purposes of this Agreement, any component of the
Consolidated EBITDA that is translated in currencies other than United States
dollars shall be converted using exchange rates of €1.00 to $1.36 (USD) and
£1.00 to $2.00 (USD).

 

“Change
of Control” shall mean: (i) sales of all or substantially all of the
assets of the Company to a Person who is not Kohlberg Kravis Roberts &
Co. Ltd (“KKR”) or an affiliate of KKR (collectively, the “KKR Partnerships”), (ii) a
sale by KKR or any of its respective affiliates resulting in more than 50% of
the voting stock of the Company being held by a Person or Group  that does not include KKR or any of its respective affiliates, or (iii) a
merger, consolidation, recapitalization or reorganization of the Company with
or into another Person which is not an affiliate of KKR; if, and only if, as a
result of any of the foregoing events in clauses (i), (ii) or (iii) above,
the KKR Partnerships lose the ability, without the approval of any Person
(applicable to the respective foregoing events in clauses (i), (ii) or (iii) above)
who is not an affiliate of KKR, to elect a majority of the Board of Directors
(or the board of directors of the resulting entity).  Notwithstanding the foregoing, if any of the
transactions described in clauses (i), (ii) or (iii) of the preceding
sentence shall occur and the other Person involved in such transaction (or its
ultimate parent entity) is an operating company controlled by KKR or an
affiliate of KKR prior to such transaction (an “Alternate KKR Entity”), then
the determination of whether a change of control has occurred shall be made by
determining whether an event set forth in clauses (i), (ii) or (iii) above
has occurred (including the ability to elect a majority of the Board or the
board of directors of the resulting entity) if the Alternate KKR Entity is
treated as being unaffiliated with KKR and by treating the voting power of the
Alternate KKR Entity in the Company (or the resulting entity) as if it were
held by a Person unaffiliated with KKR.

 

“Diluted
Earnings Per Share” shall mean the diluted earnings per share of the Common
Stock, as reported in the Company’s audited financial statements included in
the Company’s Form 10-K filed with the Securities Exchange Commission in
respect of the applicable fiscal year of the Company and as adjusted for
non-recurring and unusual items.

 

“Disability”
shall mean a determination, made at the request of the Employee or upon the
reasonable request of the Company set forth in a notice to the Employee, by a
physician selected by the Company and the Employee, that the Employee is unable
to perform his duties as an employee of the Company or its subsidiaries and in
all reasonable medical likelihood such inability will continue for a period in
excess of 180 consecutive days.

 

 

“Financial Statement
Approval Date” shall mean the date on which the audited financial statements of
the Company for any given fiscal year of the Company have been finally approved
by the auditing firm engaged by the Company to review such statements (which
approval shall in no event occur later than March 31 of the calendar year
immediately following the applicable fiscal year of the Company).

 

“Good
Reason” shall mean without the Employee’s consent, (i) a reduction in the
Employee’s base salary or annual bonus opportunity (other than a reduction in
base salary that is offset by an increase in bonus opportunity upon the
attainment of reasonable financial targets, which reduction may not exceed 10%
of the Employee’s base salary in any 12 month period), (ii) a substantial
reduction in the Employee’s duties and responsibilities, which continues beyond
15 days after written notice by the Employee to the Company of such reduction, (iii) the
elimination or reduction of the Employee’s eligibility to participate in the
Company’s benefit programs that is inconsistent with the eligibility of
similarly situated employees of the Company to participate therein, (iv) a
transfer of the Employee’s primary workplace by more than 35 miles from the
current workplace, (v) any serious chronic mental or physical illness of
an immediate family member that requires the Employee to terminate his or her
employment with the Company because of a substantial interference with his or
her duties at the Company or (vi) any failure by the Company to pay when
due any payment owed to the Employee within 15 days after the date such payment
becomes due.

 

“Retirement” shall mean retirement at age 62 or over (or such other age
as may be approved by the Board of Directors) after having been employed by the
Company or a Subsidiary for at least five years.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]