Document:

First Supplemental Indenture - February 8, 2002

 

 

EXHIBIT
4.3

MIDAMERICAN
ENERGY COMPANY

and

THE
BANK OF NEW YORK,

as
Trustee

________________

6.750% Notes due
2031

________________

First
Supplemental Indenture

_________________

Dated as
of February 8, 2002

FIRST
SUPPLEMENTAL INDENTURE, dated as of February 8, 2002 (herein called the
First
Supplemental Indenture”),
between MIDAMERICAN ENERGY COMPANY, a corporation duly organized and existing
under the laws of the State of Iowa (herein called the “Company”), and
THE BANK OF NEW YORK, a national banking association duly organized and existing
under the laws of the United States of America, as Trustee (herein called the
“Trustee”), under
the Original Indenture referred to below.

WITNESSETH:

WHEREAS,
the Company has heretofore executed and delivered to the Trustee an indenture
dated as of February 8, 2002 (herein called the “Original
Indenture”), to
provide for the issuance from time to time of its unsubordinated debentures,
notes or other evidences of indebtedness, the form and terms of which are to be
established as set forth in Sections 2.01 and 3.01 of the Original
Indenture;

WHEREAS,
Section 9.01 of the Original Indenture provides, among other things, that the
Company and the Trustee may enter into indentures supplemental to the Original
Indenture for, among other things, (i) the purpose of establishing the form and
terms of the Securities (as defined in the Original Indenture) of any series as
permitted by Sections 2.01 and 3.01 of the Original Indenture, and (ii) to add
to the covenants of the Company for the benefit of the Holders of all or any
series of Securities (as defined in the Original Indenture);

  
WHEREAS, the Company desires to create one series of securities in an aggregate
principal amount of four hundred million dollars ($400,000,000) to be designated
the “6.750% Notes due
2031” (the “Securities”), and
all action on the part of the Company necessary to authorize the issuance of the
Securities under the Original Indenture and this First Supplemental Indenture
has been duly taken;

  
WHEREAS, the Company and the Trustee desire to make certain amendments to the
Original Indenture in conformance with the requirements described above;
and

  
WHEREAS, all acts and things necessary to make the Securities, when executed by
the Company and authenticated and delivered by the Trustee as provided in the
Original Indenture, the valid and binding obligations of the Company and to
constitute these presents a valid and binding supplemental indenture and
agreement 

according
to its terms, have been done and performed.

1

NOW,
THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE

WITNESSETH:

That in
consideration of the premises and of the acceptance and purchase of the
Securities by the holders thereof and of the acceptance of this trust by the
Trustee, the Company covenants and agrees with the Trustee, for the equal
benefit of holders of the Securities, as follows:

ARTICLE
I

DEFINITIONS

The use
of the terms and expressions herein is in accordance with the definitions, uses
and constructions contained in the Original Indenture and the form of Security
attached hereto as Exhibit
A.

ARTICLE
II

TERMS AND
ISSUANCE OF THE SECURITIES

Section
2.01. Issue
of Securities. One
series of notes, which shall be designated the “6.750% Notes due
2031”, shall be executed, authenticated and delivered in accordance with the
provisions of, and shall in all respects be subject to, the terms, conditions
and covenants of the Original Indenture and this First Supplemental Indenture
(including the form of Security set forth in Exhibit
A). The
aggregate principal amount of the 6.750% Notes due 2031 which may be
authenticated and delivered under this First Supplemental Indenture shall not
exceed $400,000,000.

Section
2.02. Optional
Redemption. The
Securities may be redeemed, in whole or in part, at the option of the Company
pursuant to the terms set forth in Annex
1 to the
Securities to be redeemed. The provisions of Article XI of the Original
Indenture shall also apply to any optional redemption of Securities by the
Company.

Section
2.03.
Defeasance and Discharge. The
provisions of Section 14.02 of the Original Indenture shall be applicable to the
Securities.

Section
2.04. Covenant
Defeasance. The
provisions of Section 14.03 of the
Original Indenture shall be applicable to the Securities.

Section
2.05.
Place of Payment. The Place
of Payment in respect of the Securities will be in The City of New York,
initially at the Corporate Trust Office of The Bank of New York (which as of the
date hereof is located at 101 Barclay Street, 21 West, New York, New York 10286,
Attention: Corporate Trust Administration).

 

 

2

Section
2.06. Form
of Securities; Incorporation of Terms. The form
of the Securities shall be substantially in the form of Exhibit
A, the
terms of which are herein incorporated by reference and which are part of this
First Supplemental Indenture. The Securities shall be issued as one or more
Global Securities in filly registered form, as determined in accordance with
Section 2.01 of the Original Indenture. The Global Securities shall be delivered
by the Trustee to the Depositary, as the Holder thereof, or a nominee or
custodian therefore, to be held by the Depositary in accordance with the

Original
Indenture.

Section
2.07. Exchange
of the Global Securities. Each of
the Global Securities shall be exchangeable for definitive Securities only as
provided in Section 3.05 of the Original Indenture.

Section
2.08. Regular Record Date for the Securities. The Regular Record Date for the
Securities shall be the June 15 or December 15 immediately prior to each
Interest Payment Date.

Section
2.09. Authorized
Denominations. Beneficial
interests in Global Securities, as well as definitive Securities, may be held
only in denominations of $1,000 and integral multiples of $1,000 in excess
thereof.

ARTICLE
III

DEPOSITARY

Section
3.01. Depositary.
The
Depositary Trust Company, its nominees and their respective successors are
hereby appointed Depositary with respect to the Global Securities.

ARTICLE
IV

AMENDMENTS
TO ORIGINAL INDENTURE

Section
4.01. Amendments.
The
Original Indenture is hereby amended as follows:

(a)    Section
1.01 of the Original Indenture is hereby amended to add or modify the following
definitions, as the case may be:

“Common
Shareholders Equity” means,
at any time, the total shareholders’ equity of the Company and its consolidated
subsidiaries, determined on a consolidated basis in accordance with generally
accepted accounting principles, as of the end of the most recently completed
fiscal quarter of the Company for which financial information is then
available.”

 

3

“Iowa-Illinois
Indenture” means
the Indenture of Mortgage and Deed of Trust, dated as of March 1, 1947, from
Iowa-Illinois Gas and Electric Company to Harris Trust and Savings Bank and Lynn
Lloyd (C. Potter, successor individual trustee), as trustees, and indentures
supplemental thereto.”

“Midwest
Power Indenture” means
the General Mortgage Indenture and Deed of Trust, dated as of January 1, 1993,
between Midwest Power Systems Inc. and Morgan Guaranty Trust Company of New
York, trustee (Harris Trust and Savings Bank, successor trustee), and indentures
supplemental thereto.”

“Permitted
Encumbrances”
means:

 

     (a)    (i) any
mortgage, pledge or other lien or encumbrance on any property hereafter acquired
or constructed by the Company or a Subsidiary, or on which property so
constructed is located, and created prior to, contemporaneously with or within
360 days after, such acquisition or construction or the commencement of
commercial operation of such property to secure or provide for the payment of
any part of the purchase or construction price of such property, or (ii) any
property subject to any mortgage, pledge, or other lien or encumbrance upon such
property existing at the time of acquisition thereof by the Company or any
Subsidiary, whether or not assumed by the Company or such Subsidiary, or (iii)
any mortgage, pledge or other lien or encumbrance existing on the property,
shares of stock, membership interests or indebtedness of a corporation or
limited liability company at the time such corporation or limited liability
company shall become a Subsidiary or any pledge of the shares of stock or
membership interests of such corporation or limited liability company prior to,
contemporaneously with or within 360 days after such corporation or limited
liability company shall become a Subsidiary to secure or provide for the payment
of any part of the purchase price of such stock or membership interests, or (iv)
any conditional sales agreement or other title retention agreement with respect
to any property hereafter acquired or constructed; provided
that, in
the case of clauses (i) through (iv), the lien of any such mortgage, pledge or
other lien does not spread to property owned prior to such acquisition or
construction or to other property thereafter acquired or constructed other than
additions to such acquired or constructed property and other than property on
which property so constructed is located; and provided,
further, that if a
firm commitment from a bank, insurance company or other lender or investor (not
including the Company, a Subsidiary or an Affiliate of the Company) for the
financing of the acquisition or construction of property is made prior to
contemporaneously with or within the 360-day period hereinabove referred to, the
applicable mortgage, pledge, lien or encumbrance shall be deemed to be permitted
by this clause (a) whether or not created or assumed within such
period;

 

4

(b)     any
mortgage, pledge or other lien or encumbrance created for the sole purpose of
extending, renewing or refunding any mortgage, pledge, lien or encumbrance
permitted by clause (a) of this definition; provided,
however, that the
principal amount of indebtedness secured thereby shall not exceed the principal
amount of indebtedness so secured at the time of such extension, renewal or
refunding and that such extension, renewal or refunding mortgage, pledge, lien
or encumbrance shall be limited to all or any part of the same property that
secured the mortgage, pledge or other lien or encumbrance extended, renewed or
refunded;

(c)     liens for
taxes or assessments or governmental charges or levies not then due and
delinquent or the validity of which is being contested in good faith, and
against which an adequate reserve has been established; liens on any property
created in connection with pledges or deposits to secure public or statutory
obligations or to secure performance in connection with bids or contracts;
materialmen’s, mechanics’, carrier’s, workmen’s, repairmen’s or other like
liens; or liens on any property created in connection with deposits to obtain
the release of such liens; liens on any property created in connection with
deposits to secure surety, stay, appeal or customs bonds; liens created by or
resulting from any litigation or legal proceeding which is currently being
contested in good faith by appropriate proceedings; leases and liens, rights of
reverter and other possessory rights of the lessor thereunder; zoning
restrictions, easements, rights-of-way or other restrictions on the use of real
property or minor irregularities in the title thereto; and any other liens and
encumbrances similar to those described in this clause (c), the existence of
which, in the opinion of the board of directors of the Company, does not
materially impair the use by the Company or a Subsidiary of the affected
property in the operation of the business of the Company or a Subsidiary, or the
value of such property for the purposes of such business;

 

   
(d)    any
mortgage, pledge or other lien or encumbrance created after February 8, 2002 on
any property leased to or purchased by the Company or a Subsidiary after that
date and securing, directly or indirectly, obligations issued by a State, a
territory or a possession of the United States, or any political subdivision of
any of the foregoing, or the District of Columbia, to finance the cost of
acquisition or cost of construction of such property; provided
that the
interest paid on such obligations is entitled to be excluded from gross income
of the recipient pursuant to Section 103(a)(l) of the Internal Revenue Code of
1986, as amended (or any successor to such provision), as in effect at the time
of the issuance of such obligations;

 

5

    

       
(e)    any
mortgage, pledge or other lien or encumbrance on any property now owned or
hereafter acquired or constructed by the Company or a Subsidiary, or on which
property so owned, acquired or constructed is located, to secure or provide for
the payment of any part of the construction price or cost of improvements of
such property, and created prior to, contemporaneously with or within 360 days
after, such construction or improvement; provided
that if a
firm commitment from a bank, insurance company or other lender or investor (not
including the Company, a Subsidiary or an Affiliate of the Company) for the
financing of the acquisition or construction of property is made prior to,
contemporaneously with or within the 360-day period hereinabove referred to, the
applicable mortgage, pledge, lien or encumbrance shall be deemed to be permitted
by this clause (e) whether or not created or assumed within such period;
and

   
(f)    any
mortgage, pledge or other lien or encumbrance not otherwise described in clauses
(a) through (e); provided
that the
aggregate amount of indebtedness secured by all such mortgages, pledges, liens
or encumbrances does not exceed the greater of $100,000,000 or 10% of Common
Shareholders’ Equity.”

“Principal
Facility” means
the real property, fixtures, machinery and equipment relating to any facility
owned by the Company or any Subsidiary, except any facility that is not of
material importance to the business conducted by the Company and its
Subsidiaries, taken as a whole.”

  
“Regulated
Subsidiary” means
any Subsidiary which owns or operates facilities used for the generation,
transmission or distribution of electric energy and is subject to the
jurisdiction of any governmental authority of the United States or any state or
political subdivision thereof, as to any of its: rates; services; accounts;
issuances of securities; affiliate transactions; or construction, acquisition or
sale of any such facilities, except that any “exempt wholesale generator”, as
defined in 15 USC 79z-5a(a)(l), “qualifying facility”, as defined in 18 CFR
29z,l0l(b)(l), “foreign utility company”, as defined in 15 USC 79z-5b(a)(3), and
“power marketer”, as defined in NORTHWEST POWER MARKETING COMPANY, LL.C.,
75
FERC PARA
61,281, shall not be a Regulated Subsidiary.”

 

6

“Subsidiary” means a
corporation or limited liability company more than 50% of the outstanding voting
stock or voting membership interests of which is or are owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries. For the purposes of this definition,
(1) “voting stock” means stock which ordinarily has voting power for the
election of directors, whether at all times or only so long as no senior class
of stock has such voting power by reason of any contingency and (2) “voting
membership interests” means membership interests which ordinarily have voting
power for the election of directors (or the equivalent thereof), whether at all
times or only so long as no senior class of membership interests have such
voting power by reason of any contingency.

 

“Wholly-Owned
Subsidiary” means a
Subsidiary of which all of the outstanding voting stock or voting membership
interests (other than directors’ qualifying shares) is or are at the time,
directly or indirectly, owned by the Company, or by one or more Wholly-Owned
Subsidiaries of the Company or by the Company and one or more Wholly-Owned
Subsidiaries.”

(b)    Section
1.12 of the Indenture is amended by replacing the words “without regard to
conflicts of laws and rules of said state” with the words “without regard to
conflicts of laws rules of said state”.

(c)    Section
10.06 of the Original Indenture is hereby amended by replacing the reference to
Section 10.04 therein with a reference to Section 10.08.

(d)    Article X
of the Original Indenture is amended by adding a new Section 10.08 thereto
immediately following Section 10.07 thereof, such Section 10.08 to read as
follows:

“Section
10.08.  Limitation
upon Mortgages and Liens.

The
Company will not at any time directly or indirectly create or assume and will
not cause or permit a Subsidiary directly or indirectly to create or assume,
except in favor of the Company or a Wholly-Owned Subsidiary, any mortgage,
pledge or other lien or encumbrance upon any Principal Facility or any interest
it may have therein or upon any stock of any Regulated Subsidiary or any
indebtedness of any Subsidiary to the Company or any other Subsidiary, whether
now owned or hereafter acquired, without making effective provision (and the
Company covenants that in such case it will make or cause to be made, effective
provision) whereby the outstanding Securities and any other indebtedness of the
Company then entitled thereto shall be secured by such mortgage, pledge, lien or
encumbrance equally and ratably with any and all other obligations and
indebtedness thereby secured, so long as any such other obligations and
indebtedness shall be so secured (provided,

 

7

that for
the purpose of providing such equal and ratable security, the principal amount
of outstanding Original Issue Discount Securities shall be the amount of the
principal thereof that would be due and payable as of the date of such
determination upon a declaration of acceleration of the Maturity thereof
pursuant to Section 5.02);
provided, however, that the
foregoing covenant shall not be applicable to (I) the lien of the Iowa-Illinois
Indenture, (2) the lien of the Midwest Power Indenture, (3) Permitted
Encumbrances or (4) any transfer, lease, use or other encumbrance of or on the
Company’s or any Subsidiary’s transmission assets (a) substantially in
accordance with the filings made with the Federal Energy Regulatory Commission
on September 28. 2001 and given docket numbers ECO I - 156-000 and ERO
1-3154-000 and/or (b) as otherwise required by applicable state or federal
order, regulation, rule or statute.”

(e)    The first
sentence of Section 14.03 of the Original Indenture is hereby amended by
replacing the references to Section 10.04 therein with references to Section
10.08 in each place where such references appear in such sentence.

Section
4.02. Application
of Amendments. The
amendments to the Original Indenture set forth in Section 4.01 hereof shall be
applicable only to the Securities, and shall not be applicable to any other
series of securities issued under the Indenture.

ARTICLE
V

MISCELLANEOUS

Section
5.01. Execution
as Supplemental Indenture. This
First Supplemental Indenture is executed and shall be construed as an indenture
supplemental to the Original Indenture and, as provided in the Original
Indenture, this First Supplemental Indenture forms a part thereof.

Section
5.02. Effect
of Headings. The
Article and Section headings herein are for convenience only and shall not
affect the construction hereof.

Section
5.03.
Successors and Assigns. All
covenants and agreements contained in this First Supplemental Indenture made by
the Company shall bind its successors and assigns, whether so expressed or
not.

Section
5.04. Separability
Clause. In case
any provision in this First Supplemental Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired
thereby.

 

8

Section
5.05.
Benefits of First Supplemental Indenture. Nothing
in this First Supplemental Indenture or in the Securities, express or implied,
shall give to any person, other than the parties hereto and their successors
hereunder and the Holders of the Securities, any benefit or any legal or
equitable right, remedy or claim under this First Supplemental
Indenture.

Section
5.06. Execution
and Counterparts. This
First Supplemental Indenture may be executed in any number of counterparts, each
of which shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.

Section
5.07.
Trustee Not Responsible/or Recitals. The
recitals herein contained are made by the Company and not by the Trustee, and
the Trustee assumes no responsibility for the correctness thereof. The Trustee
makes no representation as to the validity or sufficiency of this First
Supplemental Indenture or of the Securities. The Trustee shall not be
accountable for the use or application by the Company of the Securities or the
proceeds thereof.

(SIGNATURE
PAGE FOLLOWS)

 

9

IN
WITNESS WHEREOF, the parties hereof have caused this First Supplemental
Indenture to be duly executed by their respective officers or directors duly
authorized thereto, all as of the day and year first above written.

	 	 	
      MIDAMERICAN
      ENERGY COMPANY

	 	 	
      By:
      /s/
      Brian K. Hankel

	 	 	
      Name: Brian
      K. Hankel

	 	 	
      Title:

	 	 	 
	 	 	
      THE
      BANK OF NEW YORK,

	 	 	
      as
      Trustee

	 	 	
      By:
      /s/
      Robert A. Massimillo

	 	 	
      Name: Robert
      A. Massimillo

	 	 	
      Title: Vice
      PresidentPREAMBLE

CROMPTON CORPORATION

SUPPLEMENTAL SAVINGS PLAN

Effective January 1, 2005

TABLE OF CONTENTS

                                                                                                                                                                                            Page

	
ARTICLE I  DEFINITIONS
	
1

	
1.1
	
"Account"
	
1

	
1.2
	
"Beneficiary"
	
1

	
1.3
	
"Board" or "Board of Directors"
	
1

	
1.4
	
"Bonus Deferral"
	
1

	
1.5
	
"Bonus Deferrals Account"
	
2

	
1.6
	
"CESP"
	
2

	
1.7
	
"Change in Control"
	
2

	
1.8
	
"Code"
	
2

	
1.9
	
"Committee"
	
2

	
1.10
	
"Compensation"
	
2

	
1.11
	
"Corporation"
	
2

	
1.12
	
"ESOP"
	
2

	
1.13
	
"Effective Date"
	
2

	
1.14
	
"Eligible Employee"
	
2

	
1.15
	
"Employee"
	
2

	
1.16
	
"Key Employee"
	
2

	
1.17
	
"Matching Contributions"
	
2

	
1.18
	
"Matching Contributions Account"
	
2

	
1.19
	
"Participant"
	
2

	
1.20
	
"Participating Employer"
	
2

	
1.21
	
"Plan"
	
3

	
1.22
	
"Plan Year"
	
3

	
1.23
	
"Qualified Plans"
	
3

	
1.24
	
"Rabbi Trust"
	
3

	
1.25
	
"Valuation Date"
	
3

	
1.26
	
"401(k) Contribution"
	
3

	
1.27
	
"401(k) Contribution Account"
	
3

	
1.28
	
"415 Limitation"
	
3

	
ARTICLE II  PARTICIPATION
	
3

	
2.1
	
Eligible Class
	
3

	
2.2
	
Commencement of Participation
	
3

	
2.3
	
Participation
	
4

	
ARTICLE III  PARTICIPANT CONTRIBUTIONS AND MAXIMUM AMOUNTS
	
4

	
3.1
	
401(k) Contributions
	
4

	
3.2
	
Bonus Deferral
	
4

	
3.3
	
Section 415 Limitations
	
5

	
3.4
	
Change in Compensation
	
5

	
3.5
	
[Suspension and Resumption of Contributions
	
5

	
3.6
	
Participant Contributions
	
5

	
ARTICLE IV  MATCHING CONTRIBUTIONS
	
5

	
4.1
	
Section 415 Limitations for Matching Contributions
	
5

	
ARTICLE V  INVESTMENT, VALUATION AND DISTRIBUTION OF ACCOUNTS
	
6

	
5.1
	
Investment of Accounts
	
6

	
5.2
	
Valuation of Accounts
	
6

	
5.3
	
Distribution of Accounts
	
6

	
5.4
	
Subsequent Election.
	
6

	
5.5
	
Involuntary Distributions
	
6

	
5.6
	
Change in Control
	
7

	
ARTICLE VI  VESTING
	
7

	
ARTICLE VII  ADMINSTRATION
	
7

	
ARTICLE VIII  FUNDING
	
7

	
ARTICLE IX  AMENDMENT AND TERMINATION
	
7

	
ARTICLE X  GENERAL PROVISIONS
	
8

	
10.1
	
Payment to Minors and Incompetents
	
8

	
10.2
	
No Contract
	
8

	
10.3
	
Use of Masculine and Feminine; Singular and Plural
	
8

	
10.4
	
Non-Alienation of Benefits
	
8

	
10.5
	
Governing Law
	
8

	
10.6
	
Captions
	
8

PREAMBLE

Previously, Crompton Corporation (the "Corporation") established the Crompton Corporation Benefit Equalization Plan ("BEP") as a nonqualified defined contribution restoration plan.

The purpose of this Plan is threefold:
(a)to provide eligible employees with deferred compensation and benefits substantially equivalent to those they would have received under the Qualified Plans of the Company in which they participate, in the absence of certain limitations on contributions and benefits which are imposed by the Code; and

(b)to permit eligible employees to make pre-tax deferrals to this Plan instead of making after-tax contributions to the ESOP; and

(c)to obtain the tax benefits available under Section 409A of the Code.

It is intended that funds accumulated under this Plan will be used to provide benefits payable to the Employee upon his or her retirement, death, disability, or termination of employment.

Accounts under the Plan are intended to be invested under a Rabbi Trust, the corpus of which is available to the Corporation's creditors in the event of bankruptcy.

The Plan is hereby effective January 1, 2005.

ARTICLE I

DEFINITIONS

The following words and phrases when in the Plan shall have the following meanings, unless a different meaning is plainly required by the context:
1.1"Account" means the credit balance of a Participant under the Plan represented by his or her 401(k) Contribution Account, Matching Contribution Account, and Bonus Deferrals  Account, if applicable, and investment 

1.2"Beneficiary" means the person or persons designated by the Participant or former Participant to receive benefits under this Plan in the event of the Participant's death. If the Participant does not designate a Beneficiary under this Plan, the Beneficiary shall be the beneficiary designated by the Participant under the CESP or ESOP, whichever is applicable.

1.3"Board" or "Board of Directors" means the Board of Directors of Crompton Corporation or of a Participating Employer, as the text shall indicate.

1.4"Bonus Deferral" means a deferral of a Participant's Bonus made by a Participant pursuant to Section 3.2 of the Plan.

1.5"Bonus Deferrals Account" means a Participant's interest in the Plan attributable to Bonus Deferrals.

1.6"CESP" means the Crompton Employee Savings Plan.

1.7 "Change in Control" means a change in control as defined under Section 409A of the Code.

1.8"Code" means the Internal Revenue Code of 1986, as amended from time to time and any regulations or other guidance issued thereunder.  Reference to any section of the Code shall include any successor provision thereto.

1.9"Committee" means the committee designated by the Corporation to administer the Plan in accordance with Section 8 of this Plan.

1.10"Compensation" means the annual compensation that would otherwise be recognized under the Qualified Plan for salary deferral purposes without regard to the limit on pensionable compensation under Code Section 401(a)(17).

1.11"Corporation" means Crompton Corporation, a Delaware corporation, or its successor or successors.

1.12 "ESOP" means the Crompton Corporation Employee Stock Ownership Plan.

1.13 "Effective Date" means January 1, 2005.

1.14"Eligible Employee" means an Employee who is included in the eligible class described in Section 2.1.

1.15 "Employee" means any person employed on a regular full-time basis by a Participating Employer.

1.16"Key Employee" means an individual who is considered a key employee under Sections 409A and 416 of the Code.

1.17"Matching Contributions" means a credit made on behalf of a Participant as described in Section 4.2.

1.18 "Matching Contributions Account" means the Participant's interest in the Plan attributable to Matching Contributions.

1.19"Participant" means an Eligible Employee who is participating in the Plan pursuant to Section 2.3.

1.20 "Participating Employer" means the Corporation or any subsidiary which has been authorized by the Board of Directors of the Corporation to participate in the Plan and has elected to do so.

1.21"Plan" means the Crompton Corporation Supplemental Savings Plan as set forth in this document and as amended from time to time.

1.22 "Plan Year" means each calendar year.

1.23"Qualified Plans" means the CESP and the ESOP only.

1.24 "Rabbi Trust" means a trust established by the Corporation for the accumulation and investment of 401(k) Contributions, Matching Contributions, and Bonus Deferrals, the terms of which are governed by a separate trust agreement.

1.25 "Valuation Date" means each business day, or such other dates established by the Committee.

1.26 "401(k) Contribution" means a salary reduction contribution made on behalf of a Participant pursuant to Section 3.1.

1.27 "401(k) Contribution Account" means a Participant's interest in the Plan attributable to 401(k) Contributions.

1.28 "401(k) Limitation" means the annual limit imposed by Section 402(g) of the Code on contributions which may be made by a Participant under the CESP.

ARTICLE II

PARTICIPATION
2.1 Eligible Class.

The persons listed on Attachment A hereto and any other persons designated by The Employee Benefits Committee.

2.2 Commencement of Participation.  Each Eligible Employee shall become a Participant (or if his participation has terminated, shall again become a Participant) during the pay period coinciding with or next following the later of:
(a)the date such Participant first meets the requirements of Section 2.1; or

(b)the January 1 upon which such Participant first meets the requirements of Section 2.1 and has a valid Compensation deferral election in effect pursuant to Section 3.1.

2.3 Participation.

(a)Active participation shall end on the earlier of: (i) the Employee's termination of employment, or (ii) the later of the date no Matching Contributions are being made by the Participating Employer on the Participant's behalf or the date on which the Participant has no Compensation deferral election in effect under Section 3.2.

(b)Each Participant who is no longer receiving Matching Contributions or who does not have a Compensation deferral election in effect for a given calendar year pursuant to Section 3.2, but who has an Account which is not fully distributed, shall be an inactive Participant until his or her Account is fully distributed.

ARTICLE III

PARTICIPANT CONTRIBUTIONS AND MAXIMUM AMOUNTS
3.1 401(k) Contributions.  A Participant may authorize a Participating Employer to defer a portion of his or her Compensation to the Plan under the rules and procedures established under this Article III.

Such Compensation deferral shall be known as a 401(k) Contribution. 401(k) Contributions are intended to be invested under a Rabbi Trust and remain part of the general assets of the Corporation.

Persons eligible under this Section 3.1 to make 401(k) Contributions may elect to contribute up to the maximum percentage of Compensation specified in the CESP for any calendar year.  Participants who wish to defer Compensation to this Plan must first elect to defer up to the 401(k) Limitation to the CESP and such election under the CESP will be irrevocable for the calendar year.
(a)Written election of a Compensation deferral under this Section must be made by the Participant prior to the calendar year for which such Compensation is to be paid, provided, however, that for the initial year in which the Eligible Employee may participate in the Plan, such election must be made within 30 days after the Eligible Employee is first eligible to participate in the Plan.  The deferral election is effective and must remain in effect for the entire calendar year.

(b)The Committee may establish other rules and procedures which shall govern the election of 401(k) Contributions under this Section.  Such rules and procedures shall be binding upon all Participants.

3.2 Bonus Deferral.  A Participant may authorize the Participating Employer to irrevocably defer part of or all of his or her Bonus to the Plan under the rules and procedures established under Article III.  Such deferral is intended to be known as a Bonus Deferral.  Bonus Deferrals are intended to be invested under a Rabbi Trust and be part of the general assets of the Corporation.  Such a deferral election must be made by June 30 preceding the tax year in which the Bonus is paid.  Notwithstanding the foregoing, bonuses paid in 2005 but earned in 2004 may be elected to be deferred to the Plan on or before December 31, 2004.

3.3 ESOP Contributions.  In lieu of contributions to the ESOP, a Participant may authorize a Participating Employer to defer a portion of his or her Compensation to the Plan under the rules and procedures established under this Article III.  Such Compensation deferral shall be known as a 401(k) Contribution.

Persons eligible under this Section 3.3 to make 401(k) Contributions may elect to contribute up to the maximum percentage of Compensation specified in the ESOP for any calendar year.  

3.4Change in Compensation.  In the event of a change in the Compensation of a Participant, the percentage of Compensation that such Participant has authorized as a 401(k) Contribution shall be applied as soon as practicable with respect to such changed Compensation without action by the Participant.

3.5Suspension and Resumption of Contributions.  In the case of a hardship withdrawal under the CESP or ESOP, to the extent permitted under Section 409A of the Code, 401(k) Contributions hereunder shall automatically be suspended for six months. If eligible under Section 2.1, the Participant may resume 401(k) Contributions effective as of the first pay period following any subsequent January l.

3.6Participant Contributions.  At the end of each payroll period during which the Employee has a Compensation deferral election in effect pursuant to Section 3.1, Section 3.2, or Section 3.3, the elected amount of 401(k) Contributions and Bonus Deferrals will be deferred from the Participant's Compensation and invested as soon as practicable in accordance with the Participant's election under Section 5.1, and credited to such Participant's 401(k) Account or Bonus Deferral Account on the next Valuation Date.

ARTICLE IV

MATCHING CONTRIBUTIONS
4.1 Matching Contributions.  A Matching Contribution which would otherwise have been made to the ESOP on behalf of a Participant shall be made to this Plan as a Matching Contribution with respect to monies deferred pursuant to Section 3.3.

4.2Crediting Matching Contributions.  The amount of Matching Contributions credited to a Participant will invested as soon as practicable in accordance with the Participant's election under Section 5.1, and credited to such Participant's Matching Contribution Account on the next Valuation Date.

ARTICLE V

INVESTMENT, VALUATION AND DISTRIBUTION OF ACCOUNTS
5.1 Investment of Accounts.  A Participant's Account shall be invested at the Participant's election in 1% increments in one or more investment funds offered under the Plan.  The terms, conditions and procedures under which a Participant may elect to invest his or her Account hereunder shall be specified by the Committee, in its sole discretion, from time to time.  Investment income or losses credited to such account shall reflect the actual experience of the funds in which the Participant's Account is invested.  During the absence of a valid election by a Participant in this Plan, the contributions made by or on behalf of any Participant pursuant to this Plan shall be credited to the fund with the least investment risk.

5.2 Valuation of Accounts.  A Participant's Account shall be valued as of each Valuation Date under procedures established by the Committee.

5.3 Distribution of Accounts.  A Participant's vested Account shall only be distributable to the Participant (or his or her Beneficiary in the case of the Participant's death) in cash or in kind after the Participant terminates employment with the Corporation and any subsidiary or affiliate thereof.  Upon initial participation in the Plan or any valid subsequent election, the Participant shall make a written election concerning the form of payment for his or her Account.  Payment shall be made as elected by the Participant following the earlier of: termination of employment (six months after termination in the case of a Key Employee), death or disability.  Forms of payment available under the Plan are:
(a)A full lump sum;

(b)Five annual installments (of roughly equal amounts); and

(c)Ten annual installments (of roughly equal amounts).

5.4Subsequent Election.  A Participant may change his or her initial election of the manner of payment so long as such election is made (i) at least 12 months prior to the date it is to be effective, (ii) at least 12 months prior to the date any payment would be made under the Plan, and (ii) such subsequent election defers payment for at least 5 years after the initial date payment would otherwise be made.  These restrictions will not apply in the case of any distribution due to disability or death.

5.5 Involuntary Distributions.  Notwithstanding the foregoing provisions of this Article V, the Committee shall distribute to any Participant (or to a designated beneficiary in the event of the Participant's death) all of the Participant's Account balance in a single lump payment following termination of employment if the Account balance does not exceed $10,000.  

5.6 Change in Control.  Upon the occurrence of a Change in Control, all amounts held in the Accounts of Participants in the Plan shall be distributed as soon as practicable to such Participants in a lump sum.

ARTICLE VI

VESTING

Subject to Article IX, a Participant has a nonforfeitable interest in his or her Account, except the Matching Contribution Account, under this Plan at all times.  A Participant shall have a vested interest in the Matching Contribution Account in the same percentage as set forth in the ESOP for matching contributions.

ARTICLE VII

ADMINISTRATION

This Plan shall be administered by the Corporation through the Committee in a manner consistent with the administration of the CESP as set forth in the CESP, except as specifically provided herein.

The Committee shall have full discretion to interpret and administer this Plan and its decision in any matter involving the interpretation and application of this Plan shall be final and binding on all parties.

ARTICLE VIII

FUNDING

This Plan will be unfunded. Benefits under this Plan will be paid from the general assets of the Participating Employers and from Corporation-held assets intended to be held under the Rabbi Trust.  The rights of a Participant or Beneficiary shall be those of an unsecured creditor of the Corporation and the Participating Employers.

ARTICLE IX

AMENDMENT AND TERMINATION

The Corporation reserves the right to amend, modify, suspend or terminate this Plan in whole or in part at any time by action of its Board or the Board's duly appointed delegate.  No amendment shall reduce the Account credited to a Participant under this Plan as of the amendment date, except to the extent that the Participant agrees in writing to such reduction.  Notwithstanding the foregoing, except in the event of a Change in Control, no such termination shall accelerate the payment of amounts under the Plan.

ARTICLE X

GENERAL PROVISIONS
10.1Payment to Minors and Incompetents. If any Participant or Beneficiary entitled to receive any benefits hereunder is a minor or is deemed by the Committee or is adjudged to be legally incapable of giving valid receipt and discharge for such benefits, payment will be made to such person or institution as the Committee may designate or to the duly appointed guardian.  Such payment shall, to the extent made, be deemed a complete discharge of any such payment under the Plan.

10.2 No Contract.  This Plan shall not be deemed a contract of employment with any Participant, nor shall any provision of the Plan affect the right of the Corporation or any Participating Employer to terminate a Participant's employment.

10.3Use of Masculine and Feminine; Singular and Plural.  Wherever used in this Plan, the masculine gender will include the feminine gender and the singular will include the plural, unless the context indicates otherwise.

10.4 Non-Alienation of Benefits.  No amount payable to, or held under the Plan for the account of, any Participant or Beneficiary shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be void; nor shall any amount payable to, or held under the Plan for the account of, any Participant be in any manner liable for his or her debts, contracts, liabilities, engagements, or torts, or be subject to any legal process to levy upon or attach.

10.5 Governing Law.  The provisions of the Plan shall be interpreted, construed, and administered in accordance with the laws of the State of Connecticut.

10.6 Captions.  The captions contained in the Plan are inserted only as a matter of convenience and for reference and in no way define, limit, enlarge, or describe the scope or intent of the Plan nor in any way affect the construction of any provision of the Plan.

IN WITNESS WHEREOF, the Corporation has caused this Plan to be executed by its duly qualified offerer as of the __________ day of ______________, 2005.

CROMPTON CORPORATION

 

 

By:

Its

CROMPTON CORPORATION SUPPLEMENTAL SAVINGS PLAN

SCHEDULE A

Effective for Plan year 2005, eligibility for participation in the Supplemental Savings Plan will be limited to the position of Chief Executive Officer (CEO) and those highly compensated positions that report to the CEO.

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