8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) February 22, 2010

THE LUBRIZOL CORPORATION

(Exact name of registrant as specified in its charter)

Ohio	1-5263	34-0367600
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

29400 Lakeland Boulevard, Wickliffe, Ohio	44092-2298
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (440) 943-4200

Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

(e)(1) On February 22, 2010, in light of the company’s performance for 2009, during which the company had record earnings per diluted share of $7.26, the organization and compensation committee of the Board of Directors of The Lubrizol Corporation awarded a discretionary bonus for each of the following named executive officers as set forth in the table below. These amounts were in addition to the annual incentive awards made to these named executive officers pursuant to the company’s Annual Incentive Pay Plan.

James L. Hambrick—			Charles P. Cooley—		Stephen F. Kirk—
Chairman, President			Senior Vice		Senior Vice		Joseph W. Bauer—
and Chief Executive			President and Chief		President and Chief		Vice President and
Officer			Financial Officer		Operating Officer		General Counsel
	$	225,863	$	76,984	$	73,392	$	49,247

Similarly, in recognition of their contributions to the company’s success, the Chief Executive Officer approved discretionary bonuses for all plan participants for 2009.

(2)

On February 22, 2010, the Board approved amendments to The Lubrizol Corporation Annual Incentive Pay Plan, The Lubrizol Corporation 2005 Stock Incentive Plan, and the forms of the Performance Share Unit Award and the Nonstatutory Stock Option Award Agreement, each under The Lubrizol Corporation 2005 Stock Incentive Plan to: (1) eliminate the provisions that provided for automatic vesting and/or payment of awards under these plans upon a change in control of the company; and (2) add a provision that provides the organization and compensation committee the authority to: (a) cause to be forfeited any outstanding award; and (b) seek to recoup any economic gains from any participant who engages in conduct determined by the committee to not be in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the company or its subsidiaries, including conduct that leads to a restatement of the company’s financial statements.

The foregoing description of the amendments to The Lubrizol Corporation Annual Incentive Pay Plan, The Lubrizol Corporation 2005 Stock Incentive Plan, and the forms of Performance Share Unit Award and the Nonstatutory Stock Option Award Agreement is a summary and is qualified by reference to the amended language in each such document, which are filed herewith as Exhibits 10.1, 10.2, 10.3 and 10.4, respectively, and are incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are filed herewith:

10.1	The Lubrizol Corporation Annual Incentive Pay Plan, as amended.
10.2	The Lubrizol Corporation 2005 Stock Incentive Plan, as amended.
10.3	Form of Performance Share Unit Award under The Lubrizol Corporation 2005 Stock Incentive Plan, as amended.
10.4	Form of Nonstatutory Stock Option Award Agreement under The Lubrizol Corporation 2005 Stock Incentive Plan, as amended.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

THE LUBRIZOL CORPORATION
 

Date: February 24, 2010

By:	/s/ Leslie M. Reynolds
	Name:	Leslie M. Reynolds
	Title:	Corporate Secretary and Counsel

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EX-10.1

Exhibit 10.1

THE LUBRIZOL CORPORATION
ANNUAL INCENTIVE PAY PLAN
(As Amended February 22, 2010)

INTRODUCTION

     The Lubrizol Corporation (hereinafter referred to as the “Corporation”) hereby establishes, effective as of January 1, 2008, The Lubrizol Corporation Annual Incentive Pay Plan (hereinafter referred to as the “Plan”) in order to provide an award for employees which reflects the pursuit of superior performance, increased customer satisfaction and enhancement of shareholder value. Awards for participating employees under the Plan shall depend upon corporate performance measures as determined by the Committee for the Plan Year.

     Except as otherwise provided, the Plan shall be administered by the Organization and Compensation Committee (hereinafter referred to as the “Committee”) of the Board of Directors of the Corporation. The Committee shall have conclusive authority to construe and interpret the Plan and any agreements entered into under the Plan and to establish, amend, and rescind rules and regulations for its administration. The Committee shall also have any additional authority as the Board may from time to time determine to be necessary or desirable.

ARTICLE I
DEFINITIONS

     1.01 Definitions. The following terms shall have the indicated meanings for purposes of the Plan:

(a)	“Board” shall mean the Board of Directors of the Corporation.
(b)	“Chief Executive Officer” shall mean the chief executive officer of the Corporation.
(c)	“Committee” shall mean the Organization and Compensation Committee of the Board, or other designated committee of the Board, consisting of persons who are not Employees or International Employees.
(d)	“Corporation” shall mean The Lubrizol Corporation, a corporation organized under the laws of the State of Ohio.
(e)	“Director” shall mean a member of the Board.
(f)	‘“Employee” shall mean any person other than an Officer, who is employed for a wage or salary by the Corporation or a domestic Subsidiary.
(g)	“International Employee” shall mean any person who is employed for a wage or salary by an international Subsidiary of the Corporation.
(h)	“International Participant” shall mean any International Employee who has been selected by the Committee pursuant to Article VI of the Plan, and who has not for any reason becomes ineligible to participate in the Plan.

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(i)	“Individual Award” shall mean the amount paid (or to be paid) to a Participant or International Participant, as the case may be, by the Corporation pursuant to the Plan.
(j)	“Individual Target Award” shall have the definition, and shall be determined, as set forth in Section 3.02 herein.
(k)	“Officer” shall mean an employee of the Corporation or a Subsidiary who is a member of the Executive Council of the Corporation.
(l)	“Participant” shall mean all Officers, and any Employee who has been selected by the Committee pursuant to Article II herein to participate in the Plan, and have not for any reason become ineligible to participate in the Plan.
(m)	“Pay” shall be determined at the time of calculating the Individual Performance Shares and shall be the Participant’s base pay.
(n)	“Plan” shall mean The Lubrizol Corporation Annual Incentive Pay Plan, effective January 1, 2008.
(o)	“Plan Year” shall mean each twelve-month period commencing January 1 and ending December 31.
(p)	“Subsidiary” shall mean any corporation, international or domestic, that is wholly or partially (but not less than 50%) owned directly or indirectly by the Corporation.

     1.02 Construction. Where necessary or appropriate to the meaning of a word, the singular shall be deemed to include the plural, the plural to include the singular, the masculine to include the feminine, and the feminine to include the masculine.

ARTICLE II
ELIGIBILITY AND PARTICIPATION

     2.01 Eligibility. All Employees and Officers shall be eligible to participate in the Plan.

     2.02 Participation. All Officers shall participate in the Plan. In addition, the Committee shall determine which Employees shall participate in the Plan for each Plan Year. The Committee may also determine which Employees hired during the Plan Year shall participate in the Plan for such Plan Year. The Committee’s selection of Participants shall be after considering recommendations presented to it by the Chief Executive Officer.

ARTICLE III
INDIVIDUAL AWARDS

     3.01 In General. At the time the Committee selects Participants for any Plan Year, the Committee shall, after consideration of the recommendations of the Chief Executive Officer, establish, for each Plan Year, an Individual Target Award for each Participant. After the end of the Plan Year Individual Awards are paid.

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     3.02 Calculation of Individual Award. The Individual Award shall be calculated in the following manner:

(a)	The Participant’s Individual Target Award is determined by multiplying the Participant’s Pay by a designated target opportunity percentage, which shall take into account the Participant’s position in the Corporation. Such designated target opportunity percentage, as well as maximum and threshold opportunity percentages, shall be determined by the Committee.
(b)	At the beginning of each Plan Year, the Committee approves annual corporate and segment performance metric scorecards and specifies the scorecard(s) that apply to a Participant. The Chief Executive Officer approves annual performance scorecards below the segment level.
(c)	After the end of the Plan Year, the Committee certifies the amount of the Individual Awards based on actual performance for the Plan Year under the annual scorecard(s) that apply to the Participant and authorizes payment of that amount.

     Individual Target Awards may be either increased or decreased, at any time, or from time to time, during a Plan Year, for any Participant at the sole discretion of the Committee in order to reflect any change in the individual contribution under the formula set forth in this Section 3.02.

     3.03 Time and Method of Payment of Individual Awards. In the event the Committee determines that a Participant is entitled to an Individual Award, the Corporation shall pay such Individual Award to that Participant between January 1 and March 15 following the close of the Plan Year. A Participant who separates from service or dies after the Plan Year but prior to the payment of an Individual Award shall be eligible to receive any payment under this Plan. Effective September 23, 2008, a Participant who separates from service prior to the end the Plan Year will not be eligible for payment hereunder, unless otherwise specifically approved by the Committee, upon the recommendation of the Chief Executive Officer.

     3.04 Conditions. Anything contained herein to the contrary notwithstanding, the payment of Individual Awards to Participants with respect to any Plan Year is conditioned upon the availability of adequate corporate profits for the Corporation’s fiscal year coinciding with any Plan Year. The determination of whether adequate corporate profits exist shall be made by the Board in its sole and unrestricted judgment and discretion and such determination shall be conclusive and binding.

ARTICLE IV
AWARDS FOR INTERNATIONAL EMPLOYEES

     4.01 Participation. The Committee shall determine which International Employees shall participate in the Plan for each Plan Year. The Committee’s selection of International Participants shall be made after considering recommendations presented to it by the Chief Executive Officer.

     4.02 Individual Awards. At the time the Individual Awards are determined for Participants, the Committee shall, in its discretion, after consideration of the recommendations of the Chief Executive Officer, establish for each Plan Year Individual Awards for each International Participant.

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     4.03 Payment of Awards. Individual Awards to each International Participant shall be paid by the international Subsidiary that is the employer of such International Participant at the same time and under the same conditions as payment is made to Participants under Sections 3.03 and 3.04. All payments shall be converted from the U.S. dollar measurement under the Plan to the currency of the country of such Subsidiary at the currency exchange rate in effect at the time the Individual Award is determined. All applicable withholding taxes shall be withheld from the distribution and remitted by the international subsidiary to the appropriate taxing authority.

ARTICLE V
CHANGE OF CONTROL

     5.01 Effect of Change in Control. In the event a Change in Control of the Corporation (as defined in Section 5.02) occurs prior to final determination by the Committee of the amounts of Individual Awards to be paid under the Plan with respect to any Plan Year, the Committee shall calculate such Individual Awards as soon as practicable after such Change in Control. Individual Awards shall be based upon accruals by the Corporation up to the time of such Change in Control and Individual Awards shall be calculated in accordance with Sections 3.02 and 4.02 herein. Payment of such Individual Awards shall be made at the time specified in Section 3.03, except that if a Participant is separated from service by the Corporation for other than Cause (defined in Section 5.03) or separates from service for Good Reason (defined in Section 5.04) prior to the end of the Plan Year, the Participant will continue to be eligible for payment of the Individual Award calculated in accordance with this Section 5.01 at the time of payment specified in Section 3.03.

     5.02 For all purposes of the Plan, a “Change in Control of the Corporation” shall have occurred if any of the following events shall occur:

(a)	The date that any one person, or more than one person acting as a group, acquires ownership of stock of the corporation that, together with the stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Corporation.
(b)	The date any person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Corporation possessing 30% or more of the total voting power of the stock of the Corporation.
(c)	The date a majority of members of the Corporation’s Board of Directors is replaced during any 12-month period by Directors whose appointment or election is not endorsed by a majority of the members of the Corporation’s Board of Directors before the date of the appointment or election.
(d)	The date that any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Corporation that have a total gross fair market value equal to or more than 40% of the total gross fair market value of all of the assets of the Corporation immediately before the acquisition or acquisitions.

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     Notwithstanding the foregoing, a Change of Control shall have only occurred in accordance with the regulations promulgated under Section 409A of the Internal Revenue Code of 1986, as amended.

     5.03 For purposes of this Article V of the Plan, “Cause” means that, prior to any separation from service, the Participant committed:

(a)	an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Corporation;
(b)	intentional wrongful damage to property of the Corporation;
(c)	intentional wrongful disclosure of secret processes or confidential information of the Corporation; or
(d)	intentional wrongful engagement in any Competitive Activity (as defined below);

and any such act materially is harmful to the Corporation. For purposes of this Agreement, no act, or failure to act, on the part of the Participant will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his action or omission was in the best interest of the Corporation. Notwithstanding the foregoing, the Participant will not be deemed to have been separated from service for “Cause” hereunder unless and until there is delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above in this 5.03 and specifying the particulars thereof in detail. Nothing herein will limit the right of the Participant or his beneficiaries to contest the validity or propriety of any such determination.

     For purposes of this Article V of the Plan, the term “Competitive Activity” means the Participant’s participation, without the written consent of an officer of the Corporation, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Corporation and such enterprise’s sales of any product or service competitive with any product or service of the Corporation amounted to 25% of such enterprise’s net sales for its most recently completed fiscal year and if the Corporation’s net sales of said product or service amounted to 25% of the Corporation’s net sales for its most recently completed fiscal year. “Competitive Activity” does not include (i) the mere ownership of securities in any such enterprise and exercise of rights appurtenant thereto or (ii) participation in management of any such enterprise other than in connection with the competitive operations of such enterprise.

     5.04 For purposes of this Article V of the Plan, “Good Reason” means separation from service by the Participant of his employment with the Corporation after the Change in Control of the Corporation upon the occurrence of any of the following events:

(a)	Failure to elect or reelect or otherwise to maintain the Participant in the office or the position, or a substantially equivalent office or position, of or with the Corporation, which the Participant held immediately prior to a Change in Control of the Corporation.
(b)	A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Corporation that the Participant held immediately prior to the Change in Control of the Corporation, a reduction in the aggregate of the Participant’s base and incentive

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	pay opportunities, any of which is not remedied within 10 calendar days after receipt by the Corporation of written notice from the Participant of the change or reduction, as the case may be;
(c)	A determination by the Participant made in good faith that as a result of a Change in Control of the Corporation and a change in circumstances thereafter significantly affecting his position, including without limitation a change in the scope of the business or other activities for which he was responsible immediately prior to a Change in Control of the Corporation, he has been rendered substantially unable to carry out, has been substantially hindered in the performance of, or has suffered a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Participant immediately prior to the Change in Control of the Corporation, which situation is not remedied within 10 calendar days after written notice to the Corporation from the Participant of such determination;
(d)	The liquidation, dissolution, merger, consolidation or reorganization of the Corporation or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) assumes all the duties and obligations of the Corporation under this Agreement;
(e)	The Corporation relocates its principal executive offices, or requires the Participant to have his principal location of work changed, to any location which is in excess of 25 miles from the location thereof immediately prior to the Change of Control of the Corporation or to travel away from his office in the course of discharging his responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him prior to the Change of Control of the Corporation without, in either case, his prior written consent.

ARTICLE VI
ADMINISTRATION

     6.01 Plan Administrator. The Committee shall be the Plan administrator.

     6.02 Duties of Plan Administrator.

(a) The Committee shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan including, but not limited to, the following:

(1)	Determination of Employees and International Employees who are eligible for Plan participation; and
(2)	Determination of the Individual Awards to be paid to Participants for each Plan Year.

(b) The Committee shall interpret the Plan and shall resolve all questions arising in the administration, interpretation, and application of the Plan. Any such determination of the Committee shall be conclusive and binding on all persons.

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(c)	The Committee shall establish such procedures and keep such records or other data as the Committee in its discretion determines necessary or proper for the administration of the Plan.
(d)	The Committee may delegate administrative responsibilities to such person or persons as the Committee deems necessary or desirable in connection with the administration of the Plan.

     6.03 Claw-back and Forfeiture Policy. The Committee may cause to be forfeited any outstanding Individual Award and may seek to recoup any economic gains from any Participant who engages in conduct that was not in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the Company or its Subsidiaries.

ARTICLE VII
MISCELLANEOUS

     7.01 Unfunded Plan. The Corporation shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to this Plan and no Participant or International Participant shall have any rights whatsoever in or with respect to any funds or assets of the Corporation.

     7.02 Non-Alienation. No anticipated payment of any Individual Award shall be subject in any manner to alienation, sale, transfer, assignment, pledge, attachment, garnishment or encumbrance of any kind.

     7.03 No Employment Rights. Nothing herein contained shall be construed as a commitment or agreement upon the part of any Participant, International Participant, Employee or International Employee hereunder to continue his employment with the Corporation or a Subsidiary, and nothing herein contained shall be construed as a commitment on the part of the Corporation or any Subsidiary to continue the employment or rate of compensation of any Participant or International Participant hereunder or any Employee or International Employee for any period.

     7.04 Amendment of the Plan. The Corporation reserves the right, to be exercised by instruction from the Committee, to modify or amend this Plan at any time.

     7.05 Duration and Termination of the Plan. The Corporation also reserves the right, to be exercised by action of the Board, to discontinue or terminate the Plan; provided that, and subject to all the provisions of this plan, any termination shall be effective only for all Plan Years following December 31 of the Plan Year in which the decision to terminate occurs.

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EX-10.2

Exhibit 10.2

THE LUBRIZOL CORPORATION 2005 STOCK INCENTIVE PLAN
(As Amended February 22, 2010)

Section 1. Purpose.

     The purposes of The Lubrizol Corporation 2005 Stock Incentive Plan are to encourage selected employees of The Lubrizol Corporation and its Subsidiaries and Outside Directors of the Company to acquire a proprietary and vested interest in the growth and performance of the Company, to generate an increased incentive to contribute to the Company’s future success and prosperity, thus enhancing the value of the Company for the benefit of shareholders, and to enhance the ability of the Company and its Subsidiaries to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress, growth and profitability of the Company depends.

Section 2. Definitions.

     As used in the Plan, the following terms have the meanings set forth below:

     (a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, or Stock Award granted pursuant to the provisions of the Plan.

     (b) “Award Agreement” means a written document evidencing any Award granted hereunder, signed by the Company and delivered to the Participant or Outside Director, as the case may be.

     (c) “Board” means the Board of Directors of the Company.

     (d) “Code” means the Internal Revenue Code of 1986, as amended from time to time.

     (e) “Committee” means a committee of not less than three (3) Outside Directors of the Board, each of whom must be a “disinterested person” within the meaning of Rule 16b-3(d)(3) promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or any successor rule or statute; provided, however, that with respect to Awards granted to non-Section 16 officers, “Committee” may mean the Chair of the Organization and Compensation Committee of the Board of Directors and at least one other member of the Organization and Compensation Committee.

     (f) “Company” means The Lubrizol Corporation.

     (g) “Employee” means any employee of the Company or of any Subsidiary.

     (h) “Fair Market Value” means the closing price of a Share on the New York Stock Exchange on the Grant Date (in the case of a Grant), or any other relevant date.

     (i) “Full-value Awards” means Awards that result in the Company transferring the full value of any underlying Share issued in the transaction. Full-value Awards will include all Restricted Stock Awards, performance shares, performance rights, Stock-settled SARs, and certain other stock based Awards.

THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

     (j) “Grant Date” means the date on which the Board approves the grant of an Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award or Stock Award, and, with respect to a Restricted Stock Unit Award granted to an Outside Director, the date specified pursuant to Section 10 on which such Award is granted.

     (k) “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422A of the Code or any successor provision thereto.

     (l) “Non-Statutory Stock Option” means an Option that is not intended to be an Incentive Stock Option.

     (m) “Option” means an option to purchase Shares granted hereunder.

     (n) “Option Price” means the purchase price of each Share under an Option.

     (o) “Outside Director” means a member of the Board who is not an employee of the Company or of any Subsidiary.

     (p) “Participant” means an Employee who is selected by the Committee to receive an Award under the Plan.

     (q) “Plan” means The Lubrizol Corporation 2005 Stock Incentive Plan.

     (r) “Restricted Stock Award” means an award of restricted Shares under Section 8 hereof.

     (s) “Restricted Stock Unit Award” means an award of restricted stock units under Section 10 hereof.

     (t) “Restriction Period” means the period of time specified in an Award Agreement during which the following conditions remain in effect: (i) certain restrictions on the sale or other disposition of Shares awarded under the Plan, (ii) subject to the terms of the applicable Award Agreement, the continued employment of the Participant, and (iii) other conditions forth in the applicable Award Agreement.

     (u) “Shareholders’ Meeting” means the annual meeting of shareholders of the Company in each year.

     (v) “Shares” means common shares without par value of the Company.

     (w) “Stock Appreciation Right” means the right to receive a payment in cash or in Shares, or in any combination thereof, from the Company equal to the excess of the Fair Market Value of a stated number of Shares at the exercise date over a fixed price for such Shares.

     (x) “Stock Award” means the grant of Shares under the Plan.

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

     (y) “Stock-settled SAR” means the grant of a Stock Appreciation Right whereby the appreciation of the underlying Shares (the value to the Employee from the exercise of any Stock Appreciation Right grant) is settled in Shares, either for the full number of Shares or the appreciation net of any tax obligation.

     (z) “Subsidiary” means a corporation which is at least 80% owned, directly or indirectly, by the Company.

     (aa) “Voting Stock” means the then-outstanding securities entitled to vote generally in the election of directors of the Company.

Section 3. Administration.

     The Plan is administered by the Committee. Members of the Committee are appointed by and serve at the pleasure of the Board, and may resign by written notice filed with the Chairman of the Board or the Secretary of the Company. A vacancy on the Committee will be filled by the appointment of a successor member by the Board. Subject to the express provisions of this Plan, the Committee has conclusive authority to select Employees to be Participants for Awards and determine the type and number of Awards to be granted, to construe and interpret the Plan, any Award granted hereunder, and any Award Agreement entered into hereunder, and to establish, amend, and rescind rules and regulations for the administration of this Plan and has additional authority as the Board may from time to time determine to be necessary or desirable. Notwithstanding the foregoing, the Committee does not have the discretion with respect to Restricted Stock Awards granted to Outside Directors pursuant to Section 10 as to prevent any Award granted under this Plan from meeting the requirements for exemption from Section 16(b) of the Exchange Act, as set forth in Rule 16b-3 thereunder or any successor rule or statute.

Section 4. Shares Subject to the Plan.

     (a) Subject to adjustment as provided in the Plan, the maximum number of shares as to which Awards may be granted under this Plan is 4,000,000 Shares, of which no more than 2,000,000 Shares can be settled as full-value Awards; provided, however, that no more than 500,000 Shares will be available for grant to any Participant during a calendar year. In addition to the stated maximums described above, this Plan provides the Committee with the flexibility to convert the Shares reserved solely for Options and the grant of Stock Appreciation Rights into “full value” awards (e.g., restricted stock, performance shares, etc.). Specifically:

     (i) For every Option or Stock Appreciation Right granted, the number of Shares available for grant shall be reduced by one Share for every one Share granted;

     (ii) For each of the first 2,000,000 Shares granted as Awards other than Options or the grant of a Stock Appreciation Right, the number of Shares available for grant shall be reduced by one Share for every one Share granted;

     (iii) For any Awards settled as a full-value Award in excess of the 2,000,000 Share limit, the number of Shares available for grant shall be reduced by three Shares for every one Share granted

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

For example, if we issue 2,000,000 Shares as performance shares prior to exhausting our pool of shares for Options, the Committee has the flexibility to convert a portion of the remaining options into other Award types, but it must be consistent with the 3-to-1 ratio described above.

     The Company believes this provision provides for the maximum equity plan design flexibility while continuing to protect the long-term interests of shareholders.

     (b) Any Shares issued hereunder may consist, in whole or in part, of authorized and unissued Shares or treasury shares. If: (i) any Shares subject to any Award granted hereunder are forfeited, (ii) any Award otherwise terminates without the issuance of Shares or payment of other consideration in lieu of Shares; (iii) Shares are used to pay the exercise price of an Option; or (iv) Shares are withheld from issuance to pay withholding taxes, the Shares subject to the Award, to the extent of any such forfeiture, termination or withholding, will not again be available for issuance under the Plan.

     (c) The number of Shares which remain available for issuance pursuant to this Plan, together with Shares subject to outstanding Awards, at the time of any change in the Company’s capitalization, including stock splits, stock dividends, mergers, reorganizations, consolidations, recapitalizations, or other changes in corporate structure will be appropriately and proportionately adjusted to reflect such change in capitalization.

Section 5. Eligibility.

     Any Employee is eligible to be selected as a Participant.

Section 6. Stock Options.

     Non-Statutory Stock Options and Incentive Stock Options may be granted hereunder to Participants either separately or in conjunction with other Awards granted under the Plan. Any Option granted to a Participant under the Plan will be evidenced by an Award Agreement in the form as the Committee may from time to time approve. Any Option will be subject to the following terms and conditions and to any additional terms and conditions, not inconsistent with the provisions of the Plan, as the Committee deems desirable.

     (a) Option Price. The purchase price per Share under an Option will be fixed by the Committee in its sole discretion; provided that the purchase price will not be less than one hundred percent (100%) of the Fair Market Value of the Share on the Grant Date of the Option. Payment of the Option Price may be made in cash, Shares, or a combination of cash and Shares, as provided in the Award Agreement relating thereto.

     (b) Option Period. The term of each Option will be fixed by the Committee in its sole discretion; provided that no Incentive Stock Option may be exercisable after the expiration of ten years from the Grant Date.

     (c) Exercise of Option. Options may be exercisable to the extent of fifty percent (50%) of the Shares subject thereto after one year from the Grant Date, seventy-five percent (75%) of such Shares after two years from the Grant Date, and one hundred

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

percent (100%) of such Shares after three years from the Grant Date, subject to any provisions respecting the exercisability of Options that may be contained in an Award Agreement.

     (d) Incentive Stock Options. The aggregate Fair Market Value of the Shares with respect to which Incentive Stock Options held by any Participant which are exercisable for the first time by such Participant during any calendar year under the Plan (and under any other benefit plans of the Company, of any parent corporation, or Subsidiary) will not exceed $100,000 or, if different, the maximum limitation in effect at the Grant Date under Section 422A of the Code, or any successor provision, and any regulations promulgated thereunder. The terms of any Incentive Stock Option granted hereunder will comply in all respects with the provisions of Section 422A of the Code, or any successor provision, and any regulations promulgated thereunder.

Section 7. Stock Appreciation Rights.

     Stock Appreciation Rights may be granted hereunder to Participants either separately or in conjunction with other Awards granted under the Plan and may, but need not, relate to a specific Option granted under Section 6. The provisions of Stock Appreciation Rights need not be the same with respect to each Participant. Any Stock Appreciation Right related to a Non-Statutory Stock Option may be granted at the same time such Option is granted or at any time thereafter before exercise or expiration of such Option. Any Stock Appreciation Right related to an Incentive Stock Option must be granted at the same time such Option is granted. Any Stock Appreciation Right related to an Option will be exercisable only to the extent the related Option is exercisable. In the case of any Stock Appreciation Right related to any Option, the Stock Appreciation Right or applicable portion thereof terminates and is no longer exercisable upon the termination or exercise of the related Option. Similarly, upon exercise of a Stock Appreciation Right as to some or all of the Shares covered by a related Option, the related Option will be canceled automatically to the extent of the Stock Appreciation Rights exercised, and such Shares will not thereafter be eligible for grant under Section 4(a). The Committee may impose any conditions or restrictions on the exercise of any Stock Appreciation Right as it deems appropriate.

Section 8. Restricted Stock Awards.

     (a) Issuance. Restricted Stock Awards may be issued hereunder to Participants, either separately or in conjunction with other Awards granted under the Plan. Each Award under this Section 8 will be evidenced by an Award document from the Company which will specify the vesting schedule, any rights of acceleration and such other terms and conditions as the Board determines, which need not be the same with respect to each Participant.

     (b) Registration. Shares issued under this Section 8 will be evidenced by issuance of a stock certificate or certificates registered in the name of the Participant bearing the following legend and any other legend required by, or deemed appropriate under, any federal or state securities laws:

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

The sale or other transfer of the common shares represented by this certificate is subject to certain restrictions set forth in the Award document granted to                                (the registered owner) by The Lubrizol Corporation dated                          , under The Lubrizol Corporation 2005 Stock Incentive Plan. A copy of the Plan and Award document may be obtained from the Secretary of The Lubrizol Corporation.

Unless otherwise provided in the Award document from the Company, the certificates will be retained by the Company until the expiration of the Restriction Period. Upon the expiration of the Restriction Period, the Company will (i) have the legend removed from the certificates for the Shares to which a Participant is entitled in accordance with the Award document from the Company and (ii) release the Shares to the custody of the Participant.

     (c) Forfeiture. Except as otherwise determined by the Committee at the Grant Date, upon separation of service of the Participant for any reason during the Restriction Period, all Shares still subject to restriction will be forfeited by the Participant and retained by the Company; provided that in the event of a Participant’s retirement, permanent disability, death, or in cases of special circumstances, the Committee may, in its sole discretion, when it finds that a waiver would be in the best interests of the Company, waive in whole or in part any or all remaining restrictions with respect to the Participant’s Shares. In such case, unrestricted Shares will be issued to the Participant at the time determined by the Committee.

     (d) Rights as Shareholders. At all times during the Restriction Period, Participants will be entitled to full voting rights with respect to all Shares awarded under this Section 8 and will be entitled to dividends with respect to the Shares.

Section 9. Stock Awards.

     Awards of Shares may be granted hereunder to Participants, either separately or in conjunction with other Awards granted under the Plan. Subject to the provisions of the Plan, the Committee has the sole and complete authority to determine (i) the Employees to whom Awards will be granted, (ii) the time or times at which the Awards will be granted, (iii) the number of Shares to be granted pursuant to the Awards, and (iv) all other conditions of the Awards. Conditions may include issuance of Shares at the time of the Award is granted or issuance of Shares at a time or times subsequent to the time the Award is granted, which subsequent times may be specifically established by the Committee and/or may be determined by reference to the satisfaction of one or more performance measures specified by the Committee. The provisions of Stock Awards need not be the same with respect to each Participant.

Section 10. Outside Directors’ Restricted Stock Unit Awards.

     On the close of business on the date of each Annual Meeting of Shareholders, each Outside Director will automatically be granted a number of Restricted Stock Units equal to an amount calculated by dividing $75,000 by the Fair Market Value of a Share on the Grant Date, which will be subject to the following terms and conditions and to any additional terms and conditions, not inconsistent with the provisions of the Plan, as are contained in the applicable Award Agreement. For Outside Directors who are appointed to the Board of Directors on a date other than an Annual Meeting of Shareholders, there will be

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

automatically granted a number of Restricted Stock Units equal to an amount calculated by dividing $75,000 by 12 and multiplying the result by the number of remaining full months until the next Annual Meeting of Shareholders and then dividing that result by the Fair Market Value of a Share on the date the Outside Director is appointed to the Board of Directors.

     (a) Vesting. Restricted Stock Unit Awards granted pursuant to this Section 10 will vest upon the earliest to occur of the following dates:

     (i) the earlier of (A) one year after the Grant Date or (B) the next Annual Meeting of Shareholders;

     (ii) separation from service under a retirement plan or policy of the Company;

     (iii) death while serving as a director; or

     (iv) Change in Control pursuant to Section 11.

Section 11. Change in Control.

     (a) Notwithstanding any provision in this Plan to the contrary, in the event of an occurrence of a Change in Control of the Company (as defined paragraph (b)), the portion of outstanding Performance Share Unit Awards and performance-based Restricted Stock Awards that may be paid to a Participant will be determined based on performance as of the date of the Change in Control, subject to the terms of the Award agreement, and outstanding Options and Stock Appreciation Rights will become 100% exercisable, and any other outstanding Awards (other than Restricted Stock Unit Awards, Performance Share Unit Awards and performance-based Restricted Stock Awards) will become fully vested without any restrictions, upon the occurrence of one or more of the following events (regardless of whether any other reason, other than Cause (as defined below), for such separation from service exists or has occurred, including without limitation other employment):

     (i) Any separation from service of the Participant by the Company within three years following the Change in Control of the Company, which separation from service is for any reason other than for Cause, or is as a result of the death of the Participant, or is by reason of the Participant’s disability and the actual receipt of disability benefits pursuant to the long-term disability plan in effect for Employees immediately prior to the Change in Control of the Company; or

     (ii) Separation from service by the Participant of his employment with the Company and any Subsidiary within three years after the Change in Control of the Company upon the occurrence of any of the following events:

     (A) Failure to elect or reelect or otherwise to maintain the Participant in the office or the position, or a substantially equivalent office or position, of or with the Company and/or a Subsidiary, as the case may be, which the Participant held immediately prior to a Change in Control of the Company.

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

     (B) A significant adverse change in the nature or scope of the authorities, powers, functions, responsibilities or duties attached to the position with the Company and any Subsidiary that the Participant held immediately prior to the Change in Control of the Company, a reduction in the aggregate of the Participant’s base and incentive pay opportunities, any of which is not remedied within 10 calendar days after receipt by the Company of written notice from the Participant of the change or reduction, as the case may be;

     (C) A determination by the Participant made in good faith that as a result of a Change in Control of the Company and a change in circumstances thereafter significantly affecting his position, including without limitation a change in the scope of the business or other activities for which he was responsible immediately prior to a Change in Control of the Company, he has been rendered substantially unable to carry out, has been substantially hindered in the performance of, or has suffered a substantial reduction in, any of the authorities, powers, functions, responsibilities or duties attached to the position held by the Participant immediately prior to the Change in Control of the Company, which situation is not remedied within 10 calendar days after written notice to the Company from the Participant of such determination;

     (D) The liquidation, dissolution, merger, consolidation or reorganization of the Company or transfer of all or a significant portion of its business and/or assets, unless the successor or successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) assumes all the duties and obligations of the Company under this Agreement;

     (E) The Company relocates its principal executive offices, or requires the Participant to have his principal location of work changed, to any location which is in excess of 25 miles from the location thereof immediately prior to the Change of Control of the Company or to travel away from his office in the course of discharging his responsibilities or duties hereunder significantly more (in terms of either consecutive days or aggregate days in any calendar year) than was required of him prior to the Change of Control of the Company without, in either case, his prior written consent.

     (b) For purposes of this Plan, a “Change in Control of the Company” means the occurrence of any of the following events:

     (i) The date that any one person, or more than one person acting as a group, acquires ownership of stock of the Company that, together with the stock held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Company.

     (ii) The date any person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or person) ownership of stock of the Company possessing 30 percent or more of the total voting power of the stock of the Company.

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

     (iii) The date a majority of members of the Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Company’s board of directors before the date of the appointment or election.

     (iv) The date that any person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Company immediately before the acquisition or acquisitions.

For purposes of this Section 11(b) of the Plan, the terms “person” and “group” have the same meaning as provided in Section 13(d)(3) or 14(d)(2) of the Exchange Act.

     (c) For purposes of this Section 11 of the Plan, “Cause” means that, prior to any separation from service pursuant to Section 11(a) hereof, the Participant committed:

     (i) an intentional act of fraud, embezzlement or theft in connection with his duties or in the course of his employment with the Company and/or any Subsidiary;

     (ii) intentional wrongful damage to property of the Company and/or any Subsidiary;

     (iii) intentional wrongful disclosure of secret processes or confidential information of the Company and/or any Subsidiary; or

     (iv) intentional wrongful engagement in any Competitive Activity (as defined below);

and any such act materially is harmful to the Company. For purposes of this Agreement, no act, or failure to act, on the part of the Participant will be deemed “intentional” if it was due primarily to an error in judgment or negligence, but will be deemed “intentional” only if done, or omitted to be done, by the Participant not in good faith and without reasonable belief that his action or omission was in the best interest of the Company. Notwithstanding the foregoing, the Participant will not be deemed to have been separated from service for “Cause” hereunder unless and until there is delivered to the Participant a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters of the Board then in office at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with his counsel, to be heard before the Board), finding that, in the good faith opinion of the Board, the Participant had committed an act set forth above in this Section 11(c) and specifying the particulars thereof in detail. Nothing herein will limit the right of the Participant or his beneficiaries to contest the validity or propriety of any such determination.

     (d) For purposes of this Section 11 of the Plan, the term “Competitive Activity” means the Participant’s participation, without the written consent of an officer of the Company, in the management of any business enterprise if such enterprise engages in substantial and direct competition with the Company and such enterprise’s sales of any product or service competitive with any product or service of the Company amounted to 25% of such enterprise’s net sales for its most recently completed fiscal year and if the Company’s net sales of said

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

product or service amounted to 25% of the Company’s net sales for its most recently completed fiscal year. “Competitive Activity” does not include (i) the mere ownership of securities in any such enterprise and exercise of rights appurtenant thereto or (ii) participation in management of any such enterprise other than in connection with the competitive operations of such enterprise.

Section 12. Amendments and Termination.

     The Board may, at any time, amend, alter or terminate the Plan, but no amendment, alteration, or termination may be made that would impair the rights of an Outside Director or Participant under an Award previously granted, without the Outside Director’s or Participant’s consent, or that without the approval of the shareholders would:

     (a) except as is provided in Sections 4(b) and 13(c) of the Plan, increase the total number of Shares which may be issued under the Plan;

     (b) change the class of employees eligible to participate in the Plan; or

     (c) materially increase the benefits accruing to Participants under the Plan;

so long as such approval is required by law or regulation; provided that, as long as required by law or regulation, the provisions of Section 10 hereof may not be amended or altered more than once every six (6) months, other than to comport with changes in the Code, the Employee Retirement Income Security Act, or the rules thereunder.

     The Committee may amend the terms of any Award heretofore granted (except, with respect to Restricted Stock Awards granted pursuant to Section 10 hereof, only to the extent not inconsistent with Rule 16b-3 under the Exchange Act or any successor rule or statute), prospectively or retroactively, but no such amendment may impair the rights of any Participant or Outside Director without his consent.

Section 13. General Provisions.

     (a) No Option or other Award may be assignable or transferable by a Participant or an Outside Director otherwise than by will or the laws of descent and distribution, and Options and Stock Appreciation Rights may be exercised during the Participant’s lifetime only by the Participant, or, if permissible under applicable law, by the guardian or legal representative of the Participant.

     (b) The term of each Award will be for a period of months or years from its Grant Date as may be determined by the Committee or as set forth in the Plan; provided that in no event may the term of any Incentive Stock Option or any Stock Appreciation Right related to any Incentive Stock Option exceed a period of ten (10) years from the Grant Date.

     (c) In the event of a merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure such that Shares are changed into or become exchangeable for a larger or smaller number of Shares, thereafter the number of Shares subject to outstanding Awards granted to Participants and to any Shares subject to Awards to be granted to Participants pursuant to this Plan will be increased or decreased, as the case may be, in direct proportion to the increase or decrease in the number of

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

Shares by reason of such change in corporate structure; provided, however, that the number of Shares will always be a whole number, and the purchase price per Share of any outstanding Options will, in the case of an increase in the number of Shares, be proportionately reduced, and, in the case of a decrease in the number of Shares, be proportionately increased. The above adjustment will also apply to any Shares subject to Restricted Stock Awards granted to Outside Directors pursuant to the provisions of Section 10.

     (d) No Employee may have any claim to be granted any Award under the Plan and there is no obligation for uniformity of treatment of Employees or Participants under the Plan.

     (e) The prospective recipient of any Award under the Plan will not, with respect to the Award, be deemed to have become a Participant, or to have any rights with respect to the Award, until and unless the recipient complies with the then applicable terms and conditions.

     (f) All certificates for Shares delivered under the Plan pursuant to any Award will be subject to any stock-transfer orders and other restrictions as the Committee deems advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Shares are then listed, and any applicable federal or state securities law, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.

     (g) Except as otherwise required in any applicable Award document or by the terms of the Plan, Participants will not be required, under the Plan, to make any payment other than the rendering of services.

     (h) The Company is authorized to withhold from any payment under the Plan, whether the payment is in Shares or cash, all withholding taxes due in respect of the payment hereunder and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.

     (i) Nothing contained in this Plan prevents the Board from adopting other or additional compensation arrangements, subject to shareholder approval if such approval is required; and such arrangements may be either generally applicable or applicable only in specific cases.

     (j) Nothing in the Plan interferes with or limits in any way the right of the Company or any Subsidiary to terminate any Participant’s employment at any time, nor does the Plan confer upon any Participant any right to continued employment with the Company or any Subsidiary.

     (k) For Awards granted on or after February 22, 2010, the Committee may cause to be forfeited any outstanding Award and may seek to recoup any economic gains from any Participant who engages in conduct that was not in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the Company

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THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN

or its Subsidiaries, including, but limited to, conduct that leads to a restatement of the Company’s financial statements.

Section 14. Effective Date of the Plan.

     The Plan will be effective upon adoption of the Plan by the Board of Directors of the Company. The Plan will be submitted to the shareholders of the Company for approval within one year after its adoption by the Board of Directors, and if the Plan is not approved by the shareholders, the Plan will be void and of no effect. Any Awards granted under the Plan prior to the date the Plan is submitted for approval by the shareholders will be void if the shareholders do not approve the Plan.

Section 15. Expiration of the Plan.

     Awards may be granted under this Plan at any time prior to April 1, 2010, on which date the Plan will expire but without affecting any outstanding awards.

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EX-10.3

Exhibit 10.3

THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN
PERFORMANCE SHARE AWARD

     THIS PERFORMANCE SHARE AWARD, dated this                 day of                               , 2          , (the “Grant Date”) by The Lubrizol Corporation (the “Company”) to                                                              , an employee of the Company and/or a Subsidiary (as defined in the Plan).

     The following terms and provisions apply to this Performance Share Award:

1. The Company hereby grants to you, under the provisions of Section 9 of the Company’s 2005 Stock Incentive Plan, as amended (the “Plan”), the number of Company Common Shares, without par value, in accordance with the three-year performance target approved by the Organization and Compensation Committee. The Company Common Shares granted hereunder are referred to herein as the “Shares”.

2. Any Performance Share Units that are payable to you, will be paid to you in Shares between the January 1 and March 15 of the year following the end of the three-year cycle based on actual performance at the end of the performance period.

3. If there is a Change in Control, as defined in Section 12(b) of the Plan, the portion of this Award that may be paid to you will be based on performance as of the date of the Change in Control as determined by Exhibit A. Thereafter, (a) if you separate from service for Good Reason or if you are separated from service by Lubrizol for other than Cause (as defined in Section 12 of the Plan) prior to the end of the performance period, or (b) if you do not separate from service prior to the end of the performance period, you will receive payout of the portion of the Award determined by application of Exhibit A at the time specified in Section 2 of this Agreement.

4. If you separate from service due to retirement (either normal or early retirement) or die prior to the end of the performance period, you or your beneficiary will receive a pro-rata number of Performance Share Units at the time specified in Section 2 of this Agreement based on actual performance at the end of the performance period and on the number of full months which have elapsed since the beginning of the performance period at the time or your separation from service or death. If the Company does not have a beneficiary election on file at the time of your death, the Performance Share Units will be issued to your spouse, or if your spouse is not living at the time of issuance, your children who are living, or if you have no living children at the time of issuance, your estate.

     If you separate from service (voluntarily or involuntarily) for any other reason prior to the end of the performance period, you will forfeit any Performance Share Units under this Award, unless otherwise specifically approved by the Committee, upon the recommendation of the Chief Executive Officer, in which case, payment with respect to such Performance Share Units at the time specified in Section 2 of this Agreement.

     Notwithstanding the foregoing, if prior to separation from service due to retirement or death, you go on a company-approved long-term disability leave of absence prior to the end of the performance period, you will receive a pro-rata number of Shares at the time specified in Section 2 of this Agreement, based on actual performance at the end of the performance period and on the number of full months that you were considered an active employee during the three-year performance cycle.

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5. The Award is not transferable by you during your life.

6. Prior to the issuance of Performance Share Units to you, you will not be a shareholder of the Company and you will have no rights under the Award as a shareholder of the Company. No dividends or other amount will be allocated or paid to you with respect to the Award.

7. The number of Performance Share Units subject to this Award outstanding at the time of any change in the Company’s capitalization, including stock splits, stock dividends, mergers, reorganizations, consolidations, recapitalizations or other changes in corporate structure, will be adjusted in the manner the Committee deems equitable; provided, however, that the number of Shares will always be a whole number.

8. Performance Share Units will not be distributed as Shares under this Award if the issuance of the Performance Share Units would violate:

(a)	any applicable state securities law;
(b)	any applicable registration or other requirements under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended, or the listing requirements of any stock exchange on which the Company’s common shares are listed; or
(c)	any similar legal requirement of any governmental authority regulating the issuance of shares by the Company.

Further, if a Registration Statement with respect to the Performance Share Units to be issued is not in effect or if counsel for the Company deems it necessary or desirable in order to avoid possible violation of the Securities Act, the Company may require, as a condition to its issuance and delivery of certificates for the Shares, that you deliver to the Company a statement in writing that you understand the Shares may be “restricted securities” as defined in Rule 144 of the Securities and Exchange Commission and that any resale, transfer or other disposition of the Shares will be accomplished only in compliance with Rule 144, the Securities Act, or other or subsequent applicable Rules and Regulations thereunder. Further still, the Company may place on the certificates evidencing the Shares an appropriate legend under Rule 144.

9. (a) When the Common Shares are distributable to you may be subject to income and other taxes on the value of the Shares on the date of distribution. The Company is authorized to withhold from any payment under this Award, withholding taxes due in respect of the payment hereunder, but in no event more than the statutory minimum for tax withholding, to the extent required to avoid adverse accounting treatment, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes

(b) For purposes of determining the number of Common Shares that are to be withheld to provide for the tax withholding pursuant to Section 8(a), Common Shares will be valued at the closing price of a Common Share on the New York Stock Exchange on the date Shares are distributable to you. If the determination of the tax withholding requires the withholding of a fractional Share, the Company shall withhold the nearest whole number of Shares needed to pay the tax withholding, rounded up, and remit to you in cash the amount of the excess after the withholding taxes have been satisfied.

10. Notwithstanding any other provision of this Agreement, the Committee may cause any outstanding Award to be forfeited and may seek to recoup from you any

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economic gains pursuant to this Award if you engage in conduct that is not in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the Company or its Subsidiaries, including but not limited to, conduct that leads to a restatement of the Company’s financial statements.

11. Prior to the distribution of Shares the Committee has the right in its sole discretion to reduce the amount of this Award.

12. The Committee has conclusive authority, subject to the express provisions of the Plan, as in effect from time to time, and this Award, to interpret this Award and the Plan, and to establish, amend and rescind rules and regulations for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any in-consistency in this Award in the manner and to the extent it deems expedient to carry the Plan into effect, and it is the sole and final judge of such expediency. The Board of Directors of the Company may from time to time grant to the Committee such further powers and authority as the Board determines to be necessary or desirable.

13. You must hold any Shares that are distributed to you under this Award at least until you have met your Share ownership guideline.

14. Notwithstanding any other provision of this Award, your Award will be subject to all of the provisions of the Plan in force from time to time.

THE LUBRIZOL CORPORATION		EMPLOYEE
By
	James L. Hambrick Chairman, President and CEO

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EXHIBIT A

Determination of Number of Service-Based Share Units
Upon a Change in Control Under Section 3

     Pursuant to the terms of Section 3, upon a Change in Control the portion of a performance-based Award that may be paid to you will be determined as follows:

1. Zero if 12 months has not elapsed since the beginning of the performance period.

2. If more than 12 months has elapsed since the beginning of the performance period:

(a) Determine the measurement growth rate for each full year that has elapsed in the 3-year period as of the date of the Change in Control,

(b) The 3-year cumulative measurement growth will be imputed as either the 1-year measurement growth (if the Change in Controls occurs during the second year) or the 2-year cumulative measurement growth (if the Change in Control occurs during the third year).

(c) The portion of this Award that may be paid to you is the number of Units that would have been payable had the 3-year performance been as determined in (b) above.

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EX-10.4

Exhibit 10.4

THE LUBRIZOL CORPORATION
2005 STOCK INCENTIVE PLAN
NONSTATUTORY STOCK OPTION AWARD AGREEMENT

     THIS STOCK OPTION AWARD AGREEMENT, dated this            day of                                         , 2     , (the “Grant Date”) by The Lubrizol Corporation (the “Company”) to                                                              (the “Employee”), an employee of the Company and/or a Subsidiary (as defined in the Plan).

     The parties to this Agreement agree to the following terms and provisions:

1. The Company grants to you, under the provisions of Company’s 2005 Stock Incentive Plan, as amended (the “Plan”), the option of purchasing the number of Company Common Shares (“Shares”) indicated in Section 2, at the price and subject to the terms and conditions described in this Agreement. The option rights described in this Agreement will be called “Option Rights”. This Option award is not intended to be an incentive stock option under Section 422 of the Internal Revenue Code of 1986, as amended.

2. The number of Shares you may purchase is                     .

3. The option price is $                per Share.

4. (a) Except as provided in Sections 4(b), 4(c), 4(d), 4(e), 4(f) and 8 hereof, you cannot exercise any of the Option Rights until you have remained continuously employed by the Company and/or any of its subsidiaries for one year after the Grant Date. After one year, you can exercise the Option Rights up to 50% of the Shares specified above. After two years you can exercise up to 75% of the Shares and after three years, you can exercise up to 100% of the Shares.

(b) If you separate from service from the Company or any of its subsidiaries on or after age 55, you, at any time within the period specified in Section 6, may exercise the Option Rights to the extent you were entitled to exercise them immediately prior to your separation from service, or if the Organization and Compensation Committee of the Board of Directors of Lubrizol (“Committee”), upon the recommendation of the Chief Executive Officer of Lubrizol, specifically approves, you may exercise the Option Rights up to 100% of the Shares.

(c) If you separate from service with Lubrizol or any of its subsidiaries for any reason other than for reasons specified in Section 4(b) or (d), then you, at any time within three months following your separation from service (but within the period specified in Section 6, may exercise the Option Rights to the extent you were entitled to exercise them immediately prior to your cessation of employment, or if the Committee, upon the recommendation of the Chief Executive Officer, specifically approves, you may exercise the Option Rights up to 100% of the Shares.

(d) If you die while employed by Lubrizol or any of its subsidiaries, then for 12 months following the date of death, (but within the period specified in Section 6, the executor or administrator of your estate or the person entitled by will or the

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applicable laws of descent and distribution may exercise the Option Rights up to of 100% of the Shares.

(e) If there is a Change in Control and you separate from service for Good Reason or you are separated from service by Lubrizol for other than Cause, as described in Section 12 of the Plan, notwithstanding anything in this award to the contrary, you, at any time within seven months following your termination (but within the period specified in Section 6), may exercise the Option Rights in each case up to 100% of the Shares.

(f) If you, after leaving the employ of the Company, die during one of the periods described in Section 4(b), (c) or (e), the executor or administrator of your estate, or the person entitled by will or the applicable laws of descent and distribution, may exercise the Option Rights held by you at the time of your death during the applicable period, as follows:

(i). If Section 4(b) was in effect, for one (1) year after your death;

(ii). If Section 4(c) was in effect, for three (3) months after your death;

(iii). If Section 4(e) was in effect, for one (1) year after your death;

provided that, the Option Rights may not be exercised after the period specified in Section 6.

5. The Option Rights are not transferable other than by will or by the laws of descent and distribution, and are exercisable during your lifetime only by you or your guardian or legal representative. In addition, except as otherwise provided by Sections 4(b), 4(c), 4(d), 4(e) and 8, the Option Rights can be exercised only if you remain con-tinuously employed by Lubrizol or any of its subsidiaries from the Grant Date to the date of exercise.

6. Notwithstanding any other provision hereof, the Option Rights expire ten years after the Grant Date, or earlier as described in Sections 4(b), 4(c), 4(d), 4(e) or 8.

7. The number of Shares subject to this Award, as well as the Option Price per Share under this Award, at the time of any change in the Company’s capitalization, including stock splits, stock dividends, mergers, reorganizations, consolidations, recapitalizations or other changes in corporate structure, will be adjusted in the manner the Committee deems equitable; provided, however, that the number of Shares will always be a whole number.

8. If the Company liquidates or dissolves, the Company will give to you at least 30 days’ prior written notice, and you will have the right within the 30 day period (but within the period specified in Section 6 to exercise the Option Rights to the extent you otherwise are entitled to exercise the Option Rights. Any Option Rights which have not been exercised before the effective date of the liquidation or dissolution will terminate.

9. (a) You may exercise the Option Rights by delivering to the Company at the office of its Vice President, Human Resources, a signed written notice of your election to exercise the Option Rights. You must include with the notice payment of the full purchase price of the Shares to be purchased, except as provided in Section 9(b). You must also pay, within the time period specified by the

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Company, the amount, if any, of the tax to be withheld for federal, state or local tax purposes on account of the exercise of the Option Rights. You may pay the purchase price in Company Common Shares or in any combination of cash and Company Common Shares. If you use Company Common Shares to pay the purchase price of Shares being purchased: (1) you may do so either by actually delivering the share certificates or by attesting as to the ownership of the Common Shares; and (2) you must have owned them at least for six months.

(b) You may elect to pay the purchase price upon the exercise of the Option Rights by authorizing a third party to sell all the Shares (or a sufficient portion of the Shares) acquired upon the exercise of the Options Rights and to remit to the Company a sufficient portion of the sale proceeds to pay the entire purchase price and any tax withholding resulting from the exercise.

(c) All elections must be made in writing and be submitted to the Company’s Vice President, Human Resources. All elections by officers are irrevocable and are subject to the approval of the Committee.

(d) The Company is authorized to withhold from any payment under this Award, withholding taxes due in respect of the payment hereunder, but in no event more than the statutory minimum for tax withholding, and to take such other action as may be necessary in the opinion of the Company to satisfy all obligations for the payment of such taxes.

(e) For purposes of determining the number of Company Common Shares that are to be used in payment of the purchase price or to be withheld to provide for the tax withholding pursuant to Section 9(a), Company Common Shares will be valued at the closing price of a Common Share on the New York Stock Exchange on the date you exercise the Option Rights. If the determination of the tax withholding would require the withholding of a fractional Share, the Company shall withhold the nearest whole number of Shares needed to pay the tax withholding, rounded up, and remit to you in cash the amount of the excess after the withholding taxes have been satisfied. Upon payment of any tax withholding, as described above, the Option Rights are considered to be exercised as of the date the Company received your notice of the election to exercise the Option Rights, or, if applicable, the date of the sale of Shares as described in Section 9(b). Upon the proper exercise of the Option Rights, the Company will issue and deliver to you, a certificate or certificates for the Shares purchased. You agree that, as a holder of the Option Rights, you have no rights as a shareholder with respect to any of the Shares as to which this Option applies unless you effectively exercise your Option Rights in accordance with the provisions in this Section 9.

10. The Option Rights will not be exercisable if the exercise would violate:

(a) any applicable state securities law;

(b) any applicable registration or other requirements under the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended, or the listing requirements of any stock exchange; or

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(c) any similar legal requirement of any governmental authority regulating the issuance of shares by the Company.

In addition, if a Registration Statement for Shares under this Plan is not in effect or if the Company’s counsel considers it necessary or desirable in order to avoid possible violation of the Securities Act, the Company may require the delivery to the Company of your written commitment that: (1) it is your intention to acquire the Shares for your own account for investment purposes only and not with a view to resell the Shares other than in a transaction that does not require registration under the Securities Act; (2) you understand the Shares may be “restricted securities” as defined in Rule 144 under the Securities Act; and (3) that any resale, transfer or other disposition of the Shares will be accomplished only in compliance with Rule 144 under the Securities Act. In certain circumstances, the Company may place a legend on the Shares certificates reflecting the commitment described above, and the Company may refuse to permit transfer of the Share certificates until the Company has been furnished with evidence satisfactory to it that the transfer would not result in a violation of the Securities Act or the Rules and Regulations.

11. Notwithstanding any other provision of this Agreement, the Committee may cause any outstanding Award to be forfeited and may seek to recoup from you any economic gains pursuant to this Award if you engage in conduct that is not in good faith and that disrupts, damages, impairs or interferes with the business, reputation or employees of the Company or its Subsidiaries, including, but not limited to, conduct that leads to a restatement of the Company’s financial statements.

12. The Committee has conclusive authority, subject to the express provisions of the Plan as in effect from time to time and this award, to construe this award and the Plan, and to establish, amend and rescind rules and regulations for the administration of the Plan. The Committee may correct any defect or supply any omission or reconcile any in-consistency in this award in the manner and to the extent it considers expedient to carry the Plan into effect. The Board of Directors of the Company may from time to time grant to the Committee further powers and authority as the Board determines to be necessary or desirable. Notwithstanding any other provision of this award to the contrary, no amendment, construction, establishment, rescission or correction of the type referenced above which is made or adopted following a Change in Control, and which amendment, construction, establishment or correction adversely affects your rights, will be effective without your express prior written consent.

13. You must hold any Shares that are distributed to you upon the exercise of the Option under this Award, at least until you have met your Share ownership guideline.

14. Notwithstanding any other provision of this award, the Option Rights will be subject to all of the provisions of the Plan in force from time to time.

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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement in duplicate as of the day and year first above written.

THE LUBRIZOL CORPORATION		EMPLOYEE
By
	J. L. Hambrick Chairman, President and CEO

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