-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lq7mgn7Tfv4jpdsZ235DaC7bLCDz54JWUKIl/Bo7G6e7JAN6bpwpRcd57yvnDCuA Ss1232qW/dBymRrEZWZtxg== 0000950152-05-009913.txt : 20051213 0000950152-05-009913.hdr.sgml : 20051213 20051213113212 ACCESSION NUMBER: 0000950152-05-009913 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 20051212 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051213 DATE AS OF CHANGE: 20051213 FILER: COMPANY DATA: COMPANY CONFORMED NAME: LUBRIZOL CORP CENTRAL INDEX KEY: 0000060751 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL ORGANIC CHEMICALS [2860] IRS NUMBER: 340367600 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-05263 FILM NUMBER: 051260124 BUSINESS ADDRESS: STREET 1: 29400 LAKELAND BLVD CITY: WICKLIFFE STATE: OH ZIP: 44092 BUSINESS PHONE: 2169434200 MAIL ADDRESS: STREET 1: 29400 LAKELAND BLVD CITY: WICKLIFFE STATE: OH ZIP: 44092 8-K 1 l17409ae8vk.txt LUBRIZOL CORPORATION 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) December 12, 2005 THE LUBRIZOL CORPORATION (Exact name of registrant as specified in its charter) Ohio 1-5263 34-0367600 (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) 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: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT A. On April 25, 2005, the shareholders of The Lubrizol Corporation ("Lubrizol") approved the adoption of The Lubrizol Corporation 2005 Stock Incentive Plan. The Lubrizol Corporation 2005 Stock Incentive Plan allows the grants of incentive and nonstatutory stock options, as well as stock appreciation rights and restricted and nonrestricted stock or stock unit awards. Any employee of The Lubrizol Corporation or its subsidiaries may be selected to participate in the plan. In addition, on the day of each Annual Meeting of Shareholders, outside directors are granted $60,000 worth of restricted stock units. The restriction period is one year at which time shares equal to the number of stock units will be issued. The maximum number of shares that may be granted under this plan is 4,000,000 shares, of which no more than 2,000,000 shares may be settled as full-value awards. This plan was approved by shareholders on April 25, 2005. The Lubrizol Corporation 2005 Stock Incentive Plan was filed as Exhibit 10.1 to The Lubrizol Corporation Form 8-K dated April 25, 2005, and included the form of Performance Share Award document. On December 12, 2005, the Organization and Compensation Committee of the Board of Directors of The Lubrizol Corporation approved long-term performance pay awards under the 2005 Stock Incentive Plan for the 2006-2008 performance period and established the long-term incentive pay award three-year performance goal for the 2006-2008 performance period. The award is based on three-year operating earnings per share performance goal. Participants in the long-term incentive pay award for the 2006-2008 performance period are the officers of The Lubrizol Corporation and other key employees as approved by the Organization and Compensation Committee. Payment of the awards earned pursuant to the long-term incentive pay award for the 2006-2008 performance period will be paid as Lubrizol common shares pursuant to a performance share award under The Lubrizol Corporation 2005 Stock Incentive Plan. We are amending the form of Performance Share Award document to include the approved performance measure for the 2006-2008 performance period. The amended form of Performance Share Award is attached hereto as Exhibit 10.1. B. On December 12, 2005, the Organization and Compensation Committee of the Board of Directors of The Lubrizol Corporation approved the annual incentive pay plan awards under The Lubrizol Corporation Annual Incentive Pay Plan for the 2006 performance period and established the performance goals for the 2006 performance period. Participants in the long-term incentive pay award for the 2006 performance period are the officers of The Lubrizol Corporation and other key employees as approved by the Organization and Compensation Committee. For corporate officers, the 2006 performance measures for awards under The Lubrizol Corporation Annual Incentive Plan are EPS, Accelerate Growth, Capital Management, Close Divestitures, and Strengthen the Structure and Culture. For officers who are business segment leaders, the 2006 performance measures are based 25 percent on the corporate measures described above and 75 percent on business segment measures of EBITDA, Accelerate Growth and Capital Management. The Lubrizol Corporation Annual Incentive Plan was filed as Exhibit (10)(bb) to The Lubrizol Corporation Form 8-K dated December 13, 2004, and included the form of Annual Incentive Award Letter. We are amending the original filing to include the approved 2006 performance measures for awards under The Lubrizol Corporation Annual Incentive Plan with respect to corporate officers and business segment leaders. The form of Annual Incentive Plan Award Letter with the approved performance measures is attached hereto as Exhibit 10.2. C. On December 12, 2005, the Board of Directors of The Lubrizol Corporation approved the amendment and restatement of The Lubrizol Corporation 2005 Excess Defined Contribution Plan. This plan provides for profit sharing benefits in excess of what is allowed under The Lubrizol Corporation Employees' Profit Sharing and Savings Plan, a qualified plan under Section 401(a) of the Internal Revenue Code, due to the operation of Sections 401(a)(17) and 415 of the Internal Revenue Code, or as a result of deferrals under The Lubrizol Corporation Senior Management Deferred Compensation Plan (formerly known as the 2005 Deferred Compensation Plan for Officers) or The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan. The investment return for the contributions made under the plan are the same as the participant selected investment funds under the qualified plan. Benefits are paid in a lump sum cash payment the later of six months after separation from service or 30 days after the beginning of the year that occurs after the year in which the separation from service occurs. As an alternative, a participant can elect at least 12 months in advance to have payments made in a lump sum or up to 10 annual installments, the payment of which will be made or begin five years after the original date of distribution. This plan is unfunded. D. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation 2005 Excess Defined Benefit Plan. This plan provides for pension benefits in excess of what is allowed under The Lubrizol Corporation Pension Plan, a qualified plan under Section 401(a) of the Internal Revenue Code, due to the operation of Sections 401(a)(17) and 415 of the Internal Revenue Code, or as a result of deferrals under The Lubrizol Corporation Senior Management Deferred Compensation Plan (formerly known as the 2005 Deferred Compensation Plan for Officers) or The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan. Benefits are paid in a lump sum cash payment the later of six months after separation from service or 30 days after the beginning of the year that occurs after the year in which the separation from service occurs. As an alternative, a participant can elect at least 12 months in advance to have payments made in a lump sum cash payment, a life annuity payable for at least 10 years, or a 50% or 100% joint and survivor annuity, the payment of which will be made or begin five years after the original date of distribution. This plan is unfunded. E. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation 2005 Officers' Supplemental Retirement Plan. This plan provides for benefits to officers selected by the Organization and Compensation Committee of the Board of Directors based on an average of the highest three years consecutive years of pay during the last 10 years. The plan limits years of service to 30 and computes benefits on the basis of a 10-year certain and life annuity. Benefits are reduced for Social Security and payments made under other Lubrizol benefit plans. Benefits are paid in a lump sum cash payment the later of six months after separation from service or 30 days after the beginning of the year that occurs after the year in which the separation from service occurs. As an alternative, a participant can elect at least 12 months in advance to have payments made in a lump sum cash payment, a life annuity payable for at least 10 years, a 50% or 100% joint and survivor annuity, or annual installments of up to 10 payments, the payment of which will be made or begin five years after the original date of distribution. This plan is unfunded. F. On December 12, 2005, the Board of Directors approved the amendment and restatement of the Supplemental Retirement Plan for Donald W. Bogus. This plan provides for the annual grant of 500 share units until Mr. Bogus' separation from service. The plan is credited with additional share units for quarterly dividends paid on Lubrizol 3 shares. Distribution of the shares units will be made to Mr. Bogus in a lump sum six months after his separation from service. Mr. Bogus may elect to receive the balance in cash or common shares. For units credited after January 1, 2004, the distribution will be made in cash. This plan is unfunded. G. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan. The plan allows eligible executive officers of The Lubrizol Corporation to defer any amount of their variable pay under the annual incentive pay plan. Deferred amounts are converted into share units based on the current market price of Lubrizol's shares. Lubrizol matches 25 percent of the amount deferred. Additional share units are credited for quarterly dividends paid on Lubrizol shares. At the end of the deferral period, which is at least three years, Lubrizol shares are issued equal to the number of share units in the participant's account. Units attributable to match are paid in cash. This plan is unfunded. H. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation Senior Management Deferred Compensation Plan (formerly known as the 2005 Deferred Compensation Plan for Officers). The plan allows officers and other participants selected by the Organization and Compensation Committee of the Board of Directors of The Lubrizol Corporation to defer up to 90 percent of their total annual pay and long-term incentive pay, and have these amounts credited to various cash investment accounts and/or a share unit account. The investment returns of the cash investment accounts equal the performance of the investment portfolios designated by the Organization and Compensation Committee of The Lubrizol Corporation. The number of share units credited to the share unit account is based on the price of Lubrizol shares on the day the shares units are credited to the account and includes additional share units credited for quarterly dividends paid on Lubrizol shares. At the end of the deferral period, the deferrals and earnings are distributed to the participant. Cash is distributed from the cash account and Lubrizol shares are issued equal to the number of share units in the participant's share unit account. This plan is unfunded. I. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation 2005 Deferred Compensation Plan for Directors. This plan allows outside directors of The Lubrizol Corporation to defer all or any portion of their annual compensation and annual restricted share grants and have these amounts credited to various cash investment accounts and/or a share unit account. The investment returns of the cash investment accounts equal the performance of the investment portfolios designated by the Organization and Compensation Committee of The Lubrizol Corporation. The number of share units credited to the share unit account is based on the price of Lubrizol shares on the day the shares units are credited to the account and includes additional share units credited for quarterly dividends paid on Lubrizol shares. At the end of the deferral period, the deferrals and earnings are distributed to the participant. Cash is distributed from the cash account and Lubrizol shares are issued equal to the number of share units in the participant's share unit account. This plan is unfunded. J. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation Annual Incentive Pay Plan. This plan provides for annual variable cash compensation to individuals selected by the Organization and Compensation Committee of the Board of Directors. This Committee determines a percentage of annual net income to establish the amount available for payment under this plan based objective and/or subjective performance measures pre-determined by the 4 Committee for the year. The Committee approves payments, if any, after the end of the performance year. Payments are made within 2 1/2 months after the end of the performance year. K. On December 12, 2005, the Board of Directors approved the amendment and restatement of The Lubrizol Corporation Executive Death Benefit Plan. Participants in this plan are selected by the Organization and Compensation Committee of the Board of Directors. This plan provides a benefit to the participant's designated beneficiary following the participant's death. The death benefit is a cash payment equal to 250% of the participant's fixed salary for a designated year, reducing to 150% for death at or after age 70 and 100% for death at or after age 75. ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits. The following exhibit is furnished herewith: 10.1 The Lubrizol Corporation 2005 Stock Incentive Plan Performance Share Award 10.2 The Lubrizol Corporation Annual Incentive Pay Award Letter 10.3 The Lubrizol Corporation 2005 Excess Deferred Compensation Plan (as amended) 10.4 The Lubrizol Corporation 2005 Excess Deferred Benefit Plan (as amended) 10.5 The Lubrizol Corporation 2005 Officers' Supplemental Retirement Plan (as amended) 10.6 Supplemental Retirement Plan for Donald W. Bogus (as amended) 10.7 The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan (as amended) 10.8 The Lubrizol Corporation Senior Management Plan (formerly known as the 2005 Deferred Compensation Plan for Officers) (as amended) 10.9 The Lubrizol Corporation 2005 Deferred Compensation Plan for Directors (as amended) 10.10 The Lubrizol Corporation Annual Incentive Plan (as amended) 10.11 The Lubrizol Corporation Executive Death Benefit Plan (as amended) 5 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 December 13, 2005 By: /s/ Leslie M. Reynolds ------------------------------------ Name: Leslie M. Reynolds Title: Corporate Secretary and Counsel 6 EX-10.1 2 l17409aexv10w1.txt EXHIBIT 10.1 STOCK INCENTIVE PLAN PERFORMANCE SHARE AWARD Exhibit 10.1 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 chart(s) as shown in Exhibit A attached to this Award. The Company Common Shares granted hereunder are referred to herein as the "Shares". 2. If there is a Change of Control, as defined under the Plan, prior to the receipt of Shares under Section 1, above, you will receive a pro-rata number of Shares upon the Change of Control. The pro-rata number of Shares will be determined as shown on Exhibit B attached to this Award. 3. If you separate from service due to retirement (either normal or early retirement) prior to the receipt of Shares pursuant to Section 1, above, you will receive a pro-rata number of Shares upon the end of the three-year cycle based on the number of full months which have elapsed since the date of this Award at the time or your separation from service or death. In no event will the payment of Shares be made earlier than six months after your retirement. If you separate from service due to death prior to the receipt of Shares pursuant to Section 1, above, your beneficiary will receive a pro-rata number of Shares upon the end of the three-year cycle based on the number of full months which have elapsed since the date of this Award at the time or your service or death. You may at any time specify in writing a beneficiary to receive the Shares if you die before the receipt of Shares under this Award. If the Company does not have a beneficiary election on file at the time of your death, the Shares 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 receipt of Shares pursuant to Section 1, above, you will forfeit any Shares under this Award. 4. The Award is not transferable by you during your life. 5. Prior to the issuance of Shares 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. 6. If there is a stock split, reverse stock split or stock dividend, the number of Shares specified in Section 1, above will be increased or decreased in direct proportion to the increase or decrease in the number of Company Shares by reason of the stock split, reverse stock split or stock dividend. 1 7. Shares will not be distributed under this Award if the issuance of the Shares 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 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 Shares 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. 8. (a) When the Common Shares are distributable to you pursuant to Section 1, above, you may be subject to income and other taxes on the value of the Shares on the date of distribution. The Company will withhold a sufficient number of Shares that will provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by you, but in no event less than the statutory minimums for tax withholding. (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 average of the high and low trading prices 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. 9. Prior to the distribution of Shares pursuant to Section 1, the Committee has the right in its sole discretion to reduce the amount of this Award. 10. 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 inconsistency 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. 11. You must hold any Shares that are distributed to you under this Award at least until you have met your Share ownership guideline. 2 12. 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 By ------------------------------------- James L. Hambrick President and CEO 1205lmre 3 Exhibit A Performance Measure for the 2006-2008 Performance Period Three-year EPS: _______________________ 4 EXHIBIT B Determination of Pro-Rata Common Shares Upon a Change of Control Under Section 2 Pursuant to the terms of Section 2, the number of pro-rata Common Shares upon a Change of Control will be determined as follows: 1. No payout if 12 months has not elapsed since the date of this Award. 2. If more than 12 months has elapsed since the date of this Award: (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 of Control, (b) The 3-year cumulative measurement growth will be imputed as either the 1-year measurement growth (if the Change of Controls occurs during the second year) or the 2-year cumulative measurement growth (if the Change of Control occurs during the third year). (c) Payout is then pro-rated based on number of full months that have elapsed since the date of this Award. 5 EX-10.2 3 l17409aexv10w2.txt EXHIBIT 10.2 ANNUAL INCENTIVE PAY AWARD LETTER Exhibit 10.2 The Lubrizol Corporation Annual Incentive Pay Grant Letter (for Corporate Officers) Dear _______________, For our 2006 plan we have set the following targets: - - The size of the pool used to fund performance pay will be tied to the attainment of our 2006 plan and can vary significantly based on overall performance. - - To reach a "targeted pay-out" we must meet the plan for the following metrics with the following weighting factors:
------------------------------------------------------------------------------------------------------------- Metric Target Weighting ------------------------------------------------------------------------------------------------------------- EPS 50% ------------------------------------------------------------------------------------------------------------- Growth 20% ------------------------------------------------------------------------------------------------------------- Divestitures 10% ------------------------------------------------------------------------------------------------------------- Capital Management 10% ------------------------------------------------------------------------------------------------------------- Structure and Culture 10% -------------------------------------------------------------------------------------------------------------
- - Meeting all plan objectives will result in the "targeted pay-out". - - Exceeding objectives can increase the "targeted pay-out". Missing those objectives can also significantly decrease it. - - Your individual "targeted pay-out" is a function of your level of responsibility within the corporation and your individual performance. - - The plan has a "circuit breaker" provision. If the company is below its EPS target but at or above _____________ in 2006, there will be a reduced pay out. Below _____________, there will be no annual incentive pay awards for anyone regardless of plan performance in other areas. - - The Organization & Compensation Committee of the Board of Directors reserves the right during the year, and when determining pay-out, to alter any of the provisions up or down. Our plan does not provide for guaranteed payments. What does this mean to you for 2006? Depending on the degree to which targeted performance is achieved, and provided your personal performance remains at a high level, your annual incentive pay would be in the range shown below:
- -------------------------------------------------------------------------------------------------------------------------- EPS Barely Exceeds Circuit Breaker and Meets EPS Targets and Meets Plan Exceeds EPS Targets by ____% and Exceeds Less Than Plan in All Areas in All Other Areas Plan in All Other Areas - -------------------------------------------------------------------------------------------------------------------------- $______ to $________ $______ To $______ $_______ To $________ - --------------------------------------------------------------------------------------------------------------------------
If we do not achieve ____________, your performance pay will be ZERO. As a leader, we trust that you'll treat the above information as EXTREMELY CONFIDENTIAL. Regards, James L. Hambrick President and CEO The Lubrizol Corporation Annual Incentive Pay Grant Letter (for Business Segment Leaders) Dear _______________, For our 2006 plan we have set the following targets: - - The size of the pool used to fund performance pay will be tied to the attainment of our 2006 plan and can vary significantly based on overall performance. - - To reach a "targeted pay-out" we must meet the plan for the following metrics with the following weighting factors:
CORPORATE MEASURES --------------------------------------------------------------------------------------------------------- Metric Target Weighting --------------------------------------------------------------------------------------------------------- EPS 50% --------------------------------------------------------------------------------------------------------- Growth 20% --------------------------------------------------------------------------------------------------------- Divestitures 10% --------------------------------------------------------------------------------------------------------- Capital Management 10% --------------------------------------------------------------------------------------------------------- Structure and Culture 10% ---------------------------------------------------------------------------------------------------------
BUSINESS SEGMENT MEASURES --------------------------------------------------------------------------------------------------------- Metric Target Weighting --------------------------------------------------------------------------------------------------------- EBIDA 50% --------------------------------------------------------------------------------------------------------- Growth 25% --------------------------------------------------------------------------------------------------------- Capital Management 25% ---------------------------------------------------------------------------------------------------------
- - Meeting all plan objectives will result in the "targeted pay-out". Your target is based 25% on the Corporate Measures and 75% of the Business Segment Measures. - - Exceeding objectives can increase the "targeted pay-out". Missing those objectives can also significantly decrease it. - - Your individual "targeted pay-out" is a function of your level of responsibility within the corporation and your individual performance. - - The plan has a "circuit breaker" provision. If the company is below its EPS target but at or above _____________ in 2006, there will be a reduced pay out. Below _____________, there will be no annual incentive pay awards for anyone regardless of plan performance in other areas. - - The Organization & Compensation Committee of the Board of Directors reserves the right during the year, and when determining pay-out, to alter any of the provisions up or down. Our plan does not provide for guaranteed payments. What does this mean to you for 2006? Depending on the degree to which targeted performance is achieved, and provided your personal performance remains at a high level, your annual incentive pay would be in the range shown below:
- -------------------------------------------------------------------------------------------------------------------------- EPS Barely Exceeds Circuit Breaker and Meets EPS Targets and Meets Plan Exceeds EPS Targets by ____% and Exceeds Less Than Plan in All Areas in All Other Areas Plan in All Other Areas - -------------------------------------------------------------------------------------------------------------------------- $______ to $________ $______ To $______ $_______ To $________ - --------------------------------------------------------------------------------------------------------------------------
If we do not achieve ____________, your performance pay will be ZERO. As a leader, we trust that you'll treat the above information as EXTREMELY CONFIDENTIAL. Regards, James L. Hambrick President and CEO EX-10.3 4 l17409aexv10w3.txt EXHIBIT 10.3 EXCESS DEFERRED COMPENSATION Exhibit 10.3 THE LUBRIZOL CORPORATION 2005 EXCESS DEFINED CONTRIBUTION PLAN (As Amended) The Lubrizol Corporation hereby establishes, effective as of January 1, 2005, The Lubrizol Corporation 2005 Excess Defined Contribution Plan (the "Plan") for the purpose of supplementing the benefits of certain employees, as permitted by Section 3(36) of the Employee Retirement Income Security Act of 1974 and providing deferred compensation benefits to a select group of management and highly compensated employees. ARTICLE I DEFINITIONS 1.1 Definitions. For the purposes hereof, the following words and phrases shall have the meanings indicated, unless a different meaning is plainly required by the context: (a) Beneficiary. The term "Beneficiary" shall mean the person or persons who shall be designated by a Participant to receive distribution of such Participant's interest under the Plan in the event such Participant dies before full distribution of his interest. (b) Code. The term "Code" shall mean the Internal Revenue Code as amended from time to time. Reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section. (c) Company. The term "Company" shall mean The Lubrizol Corporation, an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger of The Lubrizol Corporation with any other corporation or corporations, and any subsidiaries of The Lubrizol Corporation which adopt the Plan. (d) Executive Council Deferred Compensation Plan. The term "Executive Council Deferred Compensation Plan" shall mean The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, as shall be in effect on the date of the Participant's retirement, death, or other termination of employment. (e) Fund. The term "Fund" shall mean each separate investment fund established and maintained under the Trust Agreement. (f) Lubrizol Deferred Compensation Plan. The term "Lubrizol Deferred Compensation Plan" shall mean The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers or, effective January 1, 2006, The Lubrizol Corporation Senior Management Deferred Compensation Plan, as shall be in effect on the date of the Participant's retirement, death, or other termination of employment. (g) Participant. The term "Participant" shall mean any person employed by the Company who is designated by the Board of Directors as an officer for the purposes of Section 16 of the Securities Exchange Act of 1934, or whose benefits under the Profit-Sharing Plan are limited by the application of Section 401(a)(17) of the Internal Revenue 1 Code of 1986, as amended, or, effective January 1, 2006, who participates in The Lubrizol Corporation Deferred Compensation Plan. (h) Plan. The term "Plan" shall mean the excess defined contribution retirement plan as set forth herein, together with all amendments hereto, which Plan shall be called "The Lubrizol Corporation Excess Defined Contribution Plan." (i) Plan Year. The term "Plan Year" shall mean the calendar year. (j) Profit-Sharing Plan. The term "Profit-Sharing Plan" shall mean The Lubrizol Corporation Employees' Profit-Sharing Plan and Savings Plan as the same shall be in effect on the date of a Participant's retirement, death, or other termination of employment. (k) Supplemental Company Contributions. The term "Supplemental Company Contributions" shall mean the contributions made by the Company under the Plan in accordance with the provisions of Section 2.2. (l) Trust Agreement. The term "Trust Agreement" shall mean The Lubrizol Corporation Excess Defined Contribution Plan Trust Agreement. (m) Trust Assets. The term "Trust Assets" shall mean all property held by the Trustee pursuant to the Trust Agreement. (n) Trustee. The term "Trustee" shall mean the trustee of The Lubrizol Corporation Excess Defined Contribution Trust. (o) Valuation Date. The term "Valuation Date" shall mean the last day of each Plan Year and any other date as may be agreed upon by the Company and the Trustee. (p) Separate Accounts. The term "Separate Accounts" shall mean each account established on behalf of a Participant under the Plan and credited with Supplemental Company Contributions in accordance with the provisions of Section 2.3. 1.2 Additional Definitions. All other words and phrases used herein shall have the meanings given them in the Profit-Sharing Plan, unless a different meaning is clearly required by the context. ARTICLE II SUPPLEMENTAL CONTRIBUTIONS 2.1 Eligibility. A Participant whose benefits under the Profit-Sharing Plan are limited with respect to any Plan Year by Section 401(a)(17) or 415 of the Code, or who participated in the Lubrizol Deferred Compensation Plan or the Executive Council Deferred Compensation Plan, shall be eligible to have contributions made with respect to him under the Plan in accordance with the provisions of this Article II. 2.2 Supplemental Company Contributions. In the event that Company contributions under the Lubrizol Profit-Sharing Plan with respect to a Participant are limited for any Plan Year due to the provisions of Section 401(a)(17) or 415 of the Code, or due to the Participant's 2 participation in the Lubrizol Deferred Compensation Plan or the Executive Council Deferred Compensation Plan, the amounts by which such contributions are limited shall be credited under the Plan by the Company and shall be designated as Supplemental Company Contributions. 2.3 Allocation of Contributions. Supplemental Company Contributions shall be allocated among the Separate Accounts of the Participants on whose behalf such contributions are made. 2.4 Administration of Separate Accounts. Each Separate Account to which contributions under Sections 2.2 and 2.3 are credited and allocated shall be credited monthly with the net monthly increase (decrease) experienced by the Participant selected investment funds of the Lubrizol Profit-Sharing Plan. ARTICLE III DISTRIBUTION 3.1 Vesting. Each Participant, shall be vested in the value of his Separate Accounts under this Plan as determined in accordance with the vesting provisions of the Profit-Sharing Plan. 3.2 Distribution. (a) Each Participant who separates from service with the Company and its related corporations shall receive payment of the balance in his Separate Account in the standard form of payment of a single lump-sum payment payable the later of six months following the separation from service or 30 days following the calendar year in which Participant separated from service. (b) At least 12 months prior to the distribution date specified in paragraph (a) Participants may instead elect to receive the balance of his Separate Account in (i) a single lump-sum payment payable five years following the original distribution date specified in paragraph (a), or (ii) annual installments of up to ten payments, the first of which shall be paid five years following the original distribution date specified in paragraph (a), and subsequent installments of which shall be paid on the anniversary date of the payment of the first installment. Such installments shall be determined by dividing the value of the Participant's Separate Account by the number of installments to be. 3.3 Distribution in the Event of Death. In the event of the death of a Participant prior to distribution in full of his interest under the Plan, his Beneficiary shall receive distribution of such interest. In the event of death of a Participant prior to making an election for benefits, such Beneficiary shall receive distribution of such interest as soon as practicable after such Participant's death in the form elected by such Beneficiary pursuant to Section 3.2. The Beneficiary under this Section 3.3 shall be the person designated as the Participant's beneficiary under the Profit-Sharing Plan. If no Beneficiary survives such Participant or if no Beneficiary has been designated by such Participant, the estate of such Participant shall be the Beneficiary and receive distribution thereof. If any Beneficiary dies after becoming entitled to receive distribution hereunder and before such distribution is made in full, and if no other person or persons have been designated to receive the balance of such distribution upon the 3 happening of such contingency, the estate of such deceased Beneficiary shall become the Beneficiary as to such balance. ARTICLE IV ADMINISTRATION 4.1 Authority of the Company. The Company shall be responsible for the general administration of the Plan, for carrying out the provisions hereof, and for making, or causing the Trust to make, any required supplemental benefit payments. The Company shall have all such powers as may be necessary to carry out the provisions of the Plan, including the power to determine all questions relating to eligibility for and the amount of any supplemental pension benefit and all questions pertaining to claims for benefits and procedures for claim review; to resolve all other questions arising under the Plan, including any questions of construction; and to take such further action as the Company shall deem advisable in the administration of the Plan. The Company may delegate any of its powers, authorities, or responsibilities for the operation and administration of the Plan to any person or committee so designated in writing by it and may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder. The actions taken and the decisions made by the Company hereunder shall be final and binding upon all interested parties. 4.2 Claims Review Procedure. The Company shall notify the person who files a claim for benefits (hereinafter referred to as the "Claimant") of the Plan's adverse benefit determination within a reasonable period of time, but not later than 90 days after the receipt of the claim by the Plan, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that special circumstances require an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination. Whenever the Company decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by any Claimant, the Company shall transmit to the Claimant a written notice of the Company's decision, which shall be written in a manner calculated to be understood by the Claimant and contain a statement of the specific reasons for the denial of the claim, reference to the specific Plan provisions on which the determination was based, a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary, a description of the Plan's review procedures and the time limits applicable to such procedures, include a statement of the Claimant's right to bring civil action under Section 502(a) ERISA following an adverse benefit determination on review. Within 60 days of the date on which the Claimant receives such notice, he or his authorized representative may request that the claim denial be reviewed by filing with the Company a written request therefor, which request shall contain the following information: (a) the date on which the Claimant's request was filed with the Company; provided, however, that the date on which the Claimant's request for review was in fact filed with the Company shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph (a); 4 (b) the specific portions of the denial of his claim which the Claimant requests the Company to review; (c) a statement by the Claimant setting forth the basis upon which he believes the Company should reverse the Company's previous denial of his claim for benefits and accept his claim as made; and (d) any written comments, documents, records and other information which the Claimant desires the Company to examine in its consideration of his position as stated pursuant to paragraph (c). Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. The review of the claim will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Within no later than 60 days of the date determined pursuant to paragraph (a) of this Section 4.2, the Company shall notify Claimant of the Plan's benefit determination, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that an extension of time for processing is required, written notice of the extension will be furnished to the Claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. The Company shall provide the Claimant with a written notification of the Plan's benefit determination on review, written in a manner calculated to be understood by the Claimant, including the reasons and Plan provisions upon which its decision was based, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant's claim for benefits, and a statement of the Claimant's right to bring an action under Section 502(a) of ERISA. ARTICLE V AMENDMENT AND TERMINATION The Company reserves the right to amend or terminate the Plan in whole or in part at any time and to suspend operation of the Plan, in whole or in part, at any time, by resolution or written action of its Board of Directors or by action of a committee to which such authority has been delegated by the Board of Directors; provided, however, that no amendment shall result in the forfeiture or reduction of the interest of any Participant or person claiming under or through any one or more of them pursuant to the Plan; provided, further that, effective January 1, 2006, notwithstanding Section 3.1, upon a termination of the Plan each Participant shall be fully vested in his supplemental pension benefit under this Plan. Any amendment of the Plan shall be in writing and signed by authorized individuals. 5 ARTICLE VI MISCELLANEOUS 6.1 Non-Alienation of Retirement Rights or Benefits. No Participant shall encumber or dispose of his right to receive any payments hereunder, which payments or the right thereto are expressly declared to be non-assignable and non-transferable. If a Participant or Beneficiary attempts to assign, transfer, alienate or encumber his right to receive any payment under the Plan or permits the same to be subject to alienation, garnishment, attachment, execution, or levy of any kind, then thereafter during the life of such Participant or Beneficiary and also during any period in which any Participant or Beneficiary is incapable in the judgment of the Company of attending to his financial affairs, any payments which the Company is required to make hereunder may be made, in the discretion of the Company, directly to such Participant or Beneficiary or to any other person for his use or benefit or that of his dependents, if any, including any person furnishing goods or services to or for his use or benefit or the use or benefit of his dependents, if any. Each such payment may be made without the intervention of a guardian, the receipt of the payee shall constitute a complete acquittance to the Company with respect thereto, and the Company shall have no responsibility for the proper allocation thereof. 6.2 Plan Non-Contractual. Nothing herein contained shall be construed as a commitment or agreement on the part of any person employed by the Company to continue his employment with the Company, and nothing herein contained shall be construed as a commitment on the part of the Company to continue the employment or the annual rate of compensation of any such person for any period, and all Participants shall remain subject to discharge to the same extent as if the Plan had never been established. 6.3 Trust. In order to provide a source of payment for its obligations under the Plan, the Company has established The Lubrizol Corporation Excess Defined Contribution Plan Trust. 6.4 Interest of a Participant. Subject to the provisions of the Trust Agreement, the obligation of the Company under the Plan to provide a Participant or Beneficiary with supplemental retirement benefits merely constitutes the unsecured promise of the Company to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Company. 6.5 Controlling Status. No Participant shall be eligible for a benefit under the Plan unless such Participant is a Participant on the date of his retirement, death, or other termination of employment. 6.6 Claims of Other Persons. The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company, its officers, employees, or directors, except any such rights as are specifically provided for in the Plan or are hereafter created in accordance with the terms and provisions of the Plan. 6.7 Severability. The invalidity or unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provision were omitted herefrom. 6.8 Governing Law. The provisions of the Plan shall be governed and construed in accordance with the laws of the State of Ohio. 6 Executed at Wickliffe, Ohio , this ______ day of ________________, 2005. THE LUBRIZOL CORPORATION By: ------------------------------------ Title: --------------------------------- By: ------------------------------------ Title: --------------------------------- 7 EX-10.4 5 l17409aexv10w4.txt EXHIBIT 10.4 EXCESS DEFERRED BENEFIT PLAN Exhibit 10.4 THE LUBRIZOL CORPORATION 2005 EXCESS DEFINED BENEFIT PLAN (As Amended) The Lubrizol Corporation hereby establishes, effective January 1, 2005,The Lubrizol Corporation 2005 Excess Defined Benefit Plan (the "Plan") for the purposes of providing supplemental benefits to certain employees, as permitted by Section 3(36) of the Employee Retirement Income Security Act of l974 and providing deferred compensation benefits to a select group of management and highly compensated employees. ARTICLE I DEFINITIONS AND CONSTRUCTION 1.1 Definitions. For the purposes hereof, the following words and phrases shall have the meanings indicated, unless a different meaning is plainly required by the context: (a) Code. the term "Code" shall mean the Internal Revenue Code as amended from time to time. Reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section. (b) Company. The term "Company" shall mean The Lubrizol Corporation, an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger of The Lubrizol Corporation with any other corporation or corporations, and any subsidiaries of The Lubrizol Corporation which adopt the Plan. (c) Lubrizol Pension Plan. The term "Lubrizol Pension Plan" shall mean The Lubrizol Corporation Pension Plan as the same shall be in effect on the date of a Participant's retirement, death, or other termination of employment. (d) Participant. The term "Participant" shall mean any person employed by the Company who is designated by the Board of Directors as an officer for the purposes of Section 16 of the Securities Exchange Act of 1934, or whose benefits under the Lubrizol Pension Plan are limited by the application of Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, or, effective January 1, 2005, who participates in The Lubrizol Corporation Senior Management Deferred Compensation Plan. (e) Plan. The term "Plan" shall mean the excess defined benefit pension plan as set forth herein, together with all amendments hereto, which Plan shall be called "The Lubrizol Corporation 2005 Excess Defined Benefit Plan." (f) Trust. The term "Trust" shall mean The Lubrizol Corporation Excess Defined Benefit Plan Trust established pursuant to the Trust Agreement. (g) Trust Agreement. The term "Trust Agreement" shall mean The Lubrizol Corporation Excess Defined Benefit Plan Trust Agreement. 1.2. Additional Definitions. All other words and phrases used herein shall have the meanings given them in the Lubrizol Pension Plan, unless a different meaning is clearly required by the context. 1 ARTICLE II SUPPLEMENTAL PENSION BENEFIT 2.1 Eligibility. A Participant who separates from service with the Company and its subsidiaries and (a) whose benefits under the Lubrizol Pension Plan are limited by the provisions of Section 401(a)(17) or 415 of the Code, (b) who participated in The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers, (c) who participated in The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, or (d) effective January 1, 2006, who participated in The Lubrizol Corporation Senior Management Deferred Compensation Plan shall be eligible for a supplemental pension benefit determined in accordance with the provisions of Section 2.2. 2.2 Amount. Subject to the provisions of Article III, the monthly supplemental pension benefit payable to an eligible Participant shall be an amount which when added to the monthly pension payable to such Participant under the Lubrizol Pension Plan (prior to any reduction applicable to an optional method of payment) equals the monthly pension benefit which would have been payable under the Lubrizol Pension Plan (prior to any reduction applicable to an optional method of payment and adjusted for any amount payable under The Lubrizol Corporation 2005 Excess Defined Contribution Plan which is attributable to The Lubrizol Corporation Employees' Profit Sharing Plan and Savings Plan and which would have affected the benefit that the Participant would have received under the Lubrizol Pension Plan had it been payable from The Lubrizol Corporation Employees' Profit Sharing and Savings Plan) if the limitations of Section 401(a)(17) and 415 of the Code were not in effect and, (if he is a Participant described in Section 2.1(b), (c), or, effective January 1, 2006, (d)), if he did not participate in The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers, The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan, or, effective January 1, 2006, in The Lubrizol Corporation Senior Management Deferred Compensation Plan. 2.3 Vesting. Each Participant shall be vested in his supplemental pension benefit under this Plan as determined in accordance with the vesting provisions of the Lubrizol Pension Plan. ARTICLE III PAYMENT OF BENEFITS 3.1 Payment to Participant. 3.2 Distribution. 2 (a) Each Participant who separates from service with the Company and its related corporations shall receive payment of his supplemental pension benefit in the standard form of payment of a single lump-sum payment payable the later of six months following the separation from service or 30 days following the calendar year in which Participant separated from service. (b) At least 12 months prior to the distribution date specified in paragraph (a) Participants may instead elect to receive the actuarial equivalent of the benefit determined under Section 2.2 on the date of separation from service, and payable commencing five years after the distribution date specified in paragraph (a) above in accordance with any one of the following options: (i) Payments will be made to the Participant for his lifetime with the continuance to his Beneficiary of such amount after his death for the remainder, if any, of the 120-month term that commenced with the date as of which the first payment of such monthly benefit is made, and with any such monthly benefits remaining unpaid upon the death of the survivor of the Participant and his Beneficiary to be made to the estate of such survivor. (ii) A reduced monthly retirement benefit payable to such Participant for his lifetime with the continuance of a monthly benefit equal to fifty percent (50%) of such reduced amount after his death to the Participant's Beneficiary during the lifetime of the Beneficiary, provided that such Beneficiary is living at the time of such Participant's separation from service and survives such Participant. (iii) A reduced monthly retirement benefit payable to such Participant during his lifetime with the continuance of a monthly benefit equal to one hundred percent (100%) of such reduced amount after his death to the Participant's Beneficiary during the lifetime of the Beneficiary, provided such Beneficiary is living at the time of such Participant's separation from service and survives such Participant. (v) Effective January 1, 2005, a single lump-sum payment. The forms of payment described shall be calculated using the same actuarial factors and interest rates used under The Lubrizol Corporation Pension Plan (or its successor) as in effect on the date of separation from service. 3.2 Payment in the Event of Death Prior to Commencement of Distribution. If a Participant dies prior to commencement of benefits under the Plan, his surviving spouse, if any, shall be eligible for a survivor benefit which is equal to one-half of the reduced monthly benefit the Participant would have received under the Plan if the Participant had retired on the day before his death and had elected to receive his benefit under the Lubrizol Pension Plan in a 50 percent joint and survivor annuity form. In making the determinations and reductions required in this Section 3.2, the Company shall apply the assumptions then in use under the Lubrizol Pension Plan. For purposes hereof, a surviving spouse shall only be eligible for a benefit under this Section 3.2, if such spouse had been married to the deceased Participant for at least one year as of the date of the Participant's death. ARTICLE IV 3 ADMINISTRATION 4.1 Authority of the Company. The Company shall be responsible for the general administration of the Plan, for carrying out the provisions hereof, and for making, or causing the Trust to make, any required supplemental benefit payments. The Company shall have all such powers as may be necessary to carry out the provisions of the Plan, including the power to determine all questions relating to eligibility for and the amount of any supplemental pension benefit and all questions pertaining to claims for benefits and procedures for claim review; to resolve all other questions arising under the Plan, including any questions of construction; and to take such further action as the Company shall deem advisable in the administration of the Plan. The Company may delegate any of its powers, authorities, or responsibilities for the operation and administration of the Plan to any person or committee so designated in writing by it and may employ such attorneys, agents, and accountants as it may deem necessary or advisable to assist it in carrying out its duties hereunder. The actions taken and the decisions made by the Company hereunder shall be final and binding upon all interested parties. 4.2 Claims Review Procedure. The Company shall notify the person who files a claim for benefits (hereinafter referred to as the "Claimant") of the Plan's adverse benefit determination within a reasonable period of time, but not later than 90 days after the receipt of the claim by the Plan, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that special circumstances require an extension of time for processing is required, written notice of the extension shall be furnished to the Claimant prior to the termination of the initial 90-day period. In no event shall such extension exceed a period of 90 days from the end of such initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the benefit determination. Whenever the Company decides for whatever reason to deny, whether in whole or in part, a claim for benefits filed by any Claimant, the Company shall transmit to the Claimant a written notice of the Company's decision, which shall be written in a manner calculated to be understood by the Claimant and contain a statement of the specific reasons for the denial of the claim, reference to the specific Plan provisions on which the determination was based, a description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material or information is necessary, a description of the Plan's review procedures and the time limits applicable to such procedures, include a statement of the Claimant's right to bring civil action under Section 502(a) ERISA following an adverse benefit determination on review. Within 60 days of the date on which the Claimant receives such notice, he or his authorized representative may request that the claim denial be reviewed by filing with the Company a written request therefor, which request shall contain the following information: (a) the date on which the Claimant's request was filed with the Company; provided, however, that the date on which the Claimant's request for review was in fact filed with the Company shall control in the event that the date of the actual filing is later than the date stated by the Claimant pursuant to this paragraph (a); (b) the specific portions of the denial of his claim which the Claimant requests the Company to review; (c) a statement by the Claimant setting forth the basis upon which he believes the Company should reverse the Company's previous denial of his claim for benefits and accept his claim as made; and 4 (d) any written comments, documents, records and other information which the Claimant desires the Company to examine in its consideration of his position as stated pursuant to paragraph (c). Claimant shall be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. The review of the claim will take into account all comments, documents, records and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. Within no later than 60 days of the date determined pursuant to paragraph (a) of this Section 4.2, the Company shall notify Claimant of the Plan's benefit determination, unless the Company determines that special circumstances require an extension of time for processing the claim. If the Company determines that an extension of time for processing is required, written notice of the extension will be furnished to the Claimant prior to the termination of the initial 60-day period. In no event shall such extension exceed a period of 60 days from the end of the initial period. The extension notice shall indicate the special circumstances requiring an extension of time and the date by which the Plan expects to render the determination on review. The Company shall provide the Claimant with a written notification of the Plan's benefit determination on review, written in a manner calculated to be understood by the Claimant, including the reasons and Plan provisions upon which its decision was based, a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the Claimant's claim for benefits, and a statement of the Claimant's right to bring an action under Section 502(a) of ERISA. ARTICLE V AMENDMENT AND TERMINATION The Company reserves the right to amend or terminate the Plan in whole or in part at any time and to suspend operation of the Plan, in whole or in part, at any time, by resolution or written action of its Board of Directors or by action of a committee to which such authority has been delegated by the Board of Directors; provided, however, that no amendment shall result in the forfeiture or reduction of the interest of any Participant or person claiming under or through any one or more of them pursuant to the Plan; provided, further that, effective January 1, 2006, notwithstanding Section 2.3, upon a termination of the Plan each Participant shall be fully vested in his supplemental pension benefit under this Plan. Any amendment of the Plan shall be in writing and signed by authorized individuals. ARTICLE VI MISCELLANEOUS 6.1 Non-Alienation of Retirement Rights or Benefits. No Participant shall encumber or dispose of his right to receive any payments hereunder, which payments or the right thereto are expressly declared to be non-assignable and non-transferable. If a Participant attempts to assign, transfer, alienate or encumber his right to receive any payment hereunder or permits the same to be subject to alienation, garnishment, attachment. execution, or levy of any kind, then thereafter during the life of such Participant, and also during any period in which any Participant is incapable in the judgment of the Company of attending to his financial affairs, any payments which the Company is required to make hereunder may be made, in the discretion of the Company, directly to such Participant or to any other person for his use or benefit or that of his dependents, if any, including any person furnishing goods or services to or for his use or benefit or the use or benefit of his dependents, if any. Each such payment may be made without the intervention of a 5 guardian, the receipt of the payee shall constitute a complete acquittance to the Company with respect thereto, and the Company shall have no responsibility for the proper allocation thereof. 6.2 Plan Non-Contractual. Nothing herein contained shall be construed as a commitment or agreement on the part of any person employed by the Company to continue his employment with the Company, and nothing herein contained shall be construed as a commitment on the part of the Company to continue the employment or the annual rate of compensation of any such person for any period, and all Participants shall remain subject to discharge to the same extent as if the Plan had never been established. 6.3 Trust. In order to provide a source of payment for its obligations under the Plan, the Company has established the Trust, the terms of which are governed by the Trust Agreement. 6.4 Interest of a Participant. Subject to the provisions of the Trust Agreement, the obligation of the Company under the Plan to provide a Participant with a supplemental pension benefit constitutes the unsecured promise of the Company to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Company. 6.5 Controlling Status. No Participant shall be eligible for a benefit under the Plan unless such Participant is a Participant on the date of his retirement, death, or other termination of employment. 6.6 Claims of Other Persons. The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company, its officers, employees, or directors, except any such rights as are specifically provided for in the plan or are hereafter created in accordance with the terms and provisions of the Plan. 6.7 Severability. The invalidity or unenforceability of any particular provision of the Plan shall not affect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provision were omitted herefrom. 6.8 Governing Law. The provisions of the Plan shall be governed and construed in accordance with the laws of the State of Ohio. Executed at Wickliffe, Ohio, this ______ day of ________________, 2005. THE LUBRIZOL CORPORATION By: ------------------------------------ Title: --------------------------------- By: ------------------------------------ Title: --------------------------------- 1205lmre 6 EX-10.5 6 l17409aexv10w5.txt EXHIBIT 10.5 OFFICER'S SUPPLEMENT RETIREMENT PLAN Exhibit 10.5 THE LUBRIZOL CORPORATION 2005 OFFICERS' SUPPLEMENTAL RETIREMENT PLAN (As Amended) The Lubrizol Corporation hereby establishes, effective as of January 1, 2005, The Lubrizol Corporation 2005 Officers' Supplemental Retirement Plan (the "Plan") for the purpose of providing deferred compensation benefits to a select group of management or highly compensated employees. Section 1. Definitions. For the purposes hereof, the following words and phrases shall have the meanings indicated, unless a different meaning is plainly required by the context: (a) Beneficiary. The term "Beneficiary" shall mean a person who is designated by a Participant to receive benefits payable upon his death pursuant to the provisions of Section 6. (b) Code. The term "Code" shall mean the Internal Revenue Code as amended from time to time. Reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section. (c) Company. The term "Company" shall mean The Lubrizol Corporation, an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger of The Lubrizol Corporation with any other corporation or corporations. (d) Credited Service. The term "Credited Service" shall mean a Participant's years of service with the Company equal to the number of full and fractional years of service (to the nearest twelfth of a year) beginning on the date the Participant first performed an hour of service for the Company and ending on the date he is no longer employed by the Company. (e) Final Average Pay. The term "Final Average Pay" shall mean the aggregated amount of Basic Compensation (as that term is defined in the Lubrizol Pension Plan modified to add cash (but not shares), if any, which the Participant has elected to defer under The Lubrizol Corporation 2005 Deferred Compensation Plan for Officers or under The Lubrizol Corporation 2005 Executive Council Deferred Compensation Plan or, effective January 1, 2006, under The Lubrizol Corporation Senior Deferred Compensation Plan, received by the Participant during the three consecutive calendar years during which such Participant received the greatest aggregate amount of Basic Compensation, as defined above, within the most recent ten years of employment, divided by 36. (f) Lubrizol Pension Plan. The term "Lubrizol Pension Plan" shall mean The Lubrizol Corporation Pension Plan as the same shall be in effect on the date of a Participant's retirement, death, or other termination of employment. (g) Normal Retirement Date. The term "Normal Retirement Date" shall mean the first day of the month following the date on which a Participant attains age sixty-five (65). (h) Participant. The term "Participant" shall mean the Chief Executive Officer, the Chief Operating Officer and any other officer of the Company who is designated by the Board of Directors of the Company and the Chief Executive Officer to participate in the Plan, and who has not waived participation in the Plan. (i) Plan. The term "Plan" shall mean a deferred compensation plan set forth herein, together with all amendments hereto, which Plan shall be called "The Lubrizol Corporation 2005 Officers' Supplemental Retirement Plan." (j) Change in Control. The term "Change in Control" shall mean the occurrence of any of the following events: (i) The Company is merged, consolidated or reorganized into or with another corporation or other legal person, and immediately after such merger, consolidation or reorganization less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such transaction are held in the aggregate by the holder of the Voting Stock (as that term is hereafter defined) of the Company immediately prior to such transaction; (ii) The Company sells all or substantially all of its assets to any other corporation or other legal person, and less than a majority of the combined voting power of the then-outstanding securities of such corporation or person immediately after such sale are held in the aggregate by the holders of Voting Stock of the Company immediately prior to such sale; (iii) There is a report filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), each as promulgated pursuant to the Securities Exchange Act of 1934 ("Exchange Act"), disclosing that any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or any successor rule or regulation promulgated under the Exchange Act) of securities representing 20 percent or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Company ("Voting Stock"); (iv) The Company files a report or proxy statement with the Securities and Exchange Commission pursuant to Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) that a change of control of the Company has or may have occurred or will or may occur in the future pursuant to any then-existing contract or transaction; or (v) If during any period of two consecutive years, individuals who at the beginning of the such period constitute the Directors of the Company cease for any reason to constitute at least a majority thereof, provided, however, that for purposes of this clause (v), each Director who is first elected, or first 2 nominated by a vote of at least two thirds of the Directors of the Company (or a committee thereof) then still in office who were Directors of the Company at the beginning of any such period will be deemed to have been a Director of the Company at the beginning of such period. Notwithstanding the foregoing provisions of Section 1(j)(iii) or 1(j)(iv) hereof, unless otherwise determined in a specific case by majority vote of the Board of Directors of the Company, a "Change in Control" shall not be deemed to have occurred for purposes of this Trust Agreement solely because (i) the Company, (ii) an entity in which the Company directly or indirectly beneficially owns 50 percent or more of the voting securities, or (iii) any Company-sponsored employee stock ownership plan or any other employee benefit plan of the Company, either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because the Company reports that a change in control of the Company has or may have occurred or will or may occur in the future by reason of such beneficial ownership. Section 2. Vesting. A Participant who is the Chief Executive Officer, Chief Operating Officer or President of the Company shall be 100 percent vested in his accrued supplemental retirement benefit hereunder. All other Participants shall become 100 percent vested in his accrued supplemental retirement benefit upon the earliest of the following events: his reaching age 60; his death; his becoming disabled and receiving benefits pursuant to the Company's long-term disability plan; or a Change of Control. Section 3. Normal Retirement Benefit. Each Participant who separates from service with the Company on or after his Normal Retirement Date shall receive, subject to the provisions of Sections 6 and 7, a monthly supplemental retirement benefit which shall be equal to two percent (2%) of his Final Average Pay multiplied by his Credited Service (up to 30 years) offset by the following amounts: (a) Benefits payable to the Participant under the Lubrizol Pension Plan; (b) Benefits payable to the Participant under The Lubrizol Corporation Employees' Profit Sharing and Savings Plan, excluding benefits attributable to Matching Contributions, CODA Contributions, Supplemental Contributions, Rollover Contributions or Transferred Contributions, as defined thereunder; (c) Benefits payable to the Participant under The Lubrizol Corporation 2005 Excess Defined Contribution Plan; (e) Benefits payable to the Participant under The Lubrizol Corporation 2005 Excess Defined Benefit Plan; (f) The Participant's Social Security benefits; 3 (g) Any other employer-provided benefits not specifically excluded herein which are payable to the Participant pursuant to any qualified or nonqualified retirement plan maintained by the Company. Such offsets shall be determined using the actuarial factors provided in the Lubrizol Pension Plan. Section 4. Early Retirement Eligibility and Determination of Benefit. Each Participant who separates from service with the Company at or after age 55, but prior to his Normal Retirement Date, shall receive a percentage of his vested supplemental retirement benefit determined under Section 3, in accordance with the early retirement schedule provided in the Lubrizol Pension Plan the form specified under Section 6. Section 5. Separation from Service. If a Participant separates from service prior to age 55, he shall receive the actuarial equivalent of his vested supplemental retirement benefit determined under Section 3 in a single lump-sum payment payable six months after the separation from service; such actuarial equivalent of which shall be calculated using the same actuarial factors and interest rates used in the Lubrizol Pension Plan as in effect on the date the Participant separates from service accordance with this Section 5. Section 6. Payment to Participant. (a) Each Participant who separates from service on or after age 55 with the Company and its related corporations shall receive payment of his supplemental pension benefit in the standard form of payment of a single lump-sum payment payable the later of six months following the separation from service or 30 days following the calendar year in which Participant separated from service. (b) At least 12 months prior to the distribution date specified in paragraph (a) Participants may instead elect to receive the actuarial equivalent of the benefit determined under Section 3 on the date of separation from service, and payable commencing five years after the distribution date specified in paragraph (a) above in accordance with any one of the following options: (i) Payments will be made to the Participant for his lifetime with the continuance to his Beneficiary of such amount after his death for the remainder, if any, of the 120-month term that commenced with the date as of which the first payment of such monthly benefit is made, and with any such monthly benefits remaining unpaid upon the death of the survivor of the Participant and his Beneficiary to be made to the estate of such survivor. (ii) A reduced monthly retirement benefit payable to such Participant for his lifetime with the continuance of a monthly benefit equal to fifty percent (50%) of such reduced amount after his death to the Participant's Beneficiary during the lifetime of the Beneficiary, provided that such Beneficiary is living at the time of such Participant's separation from service and survives such Participant. (iii) A reduced monthly retirement benefit payable to such Participant during his lifetime with the continuance of a monthly benefit equal to one 4 hundred percent (100%) of such reduced amount after his death to the Participant's Beneficiary during the lifetime of the Beneficiary, provided such Beneficiary is living at the time of such Participant's separation from service and survives such Participant. (iv) Annual installments of up to ten payments. (v) A single lump-sum payment. The forms of payment described shall be calculated using the same actuarial factors and interest rates used under The Lubrizol Corporation Pension Plan (or its successor) as in effect on the date of separation from service. Section 7. Payment in the Event of Death Prior to Commencement of Distribution. If a Participant dies prior to commencement of benefits under the Plan, his surviving spouse, if any, shall be eligible for a survivor benefit which is equal to one-half of the reduced monthly benefit the Participant would have received under the Plan if the Participant was 100 percent vested in his accrued supplemental retirement benefit, had terminated employment on the day before his death and had elected to receive his benefit hereunder in the form of a 50 percent joint and survivor annuity. In making the determinations and reductions required in this Section 7, the Company shall apply the assumptions then in use under the Lubrizol Pension Plan. For purposes hereof, a surviving spouse shall only be eligible for a benefit under this Section 7, if such spouse had been married to the deceased Participant for at least one year as of the date of the Participant's death. Section 8. Actuarial Factors. All actuarial assumptions and factors used in this Plan shall be the same as those used in the Lubrizol Pension Plan. Section 9. Funding. The obligation of the Company to pay benefits provided hereunder shall be unfunded and unsecured and such benefits shall be paid by the Company out of its general funds. In order to provide a source of payment for its obligations under the Plan, the Company may cause a trust fund to be maintained and/or arrange for insurance contracts. Subject to the provisions of the trust agreement governing any such trust fund or the insurance contract, the obligation of the Company under the Plan to provide a Participant with a benefit shall nonetheless constitute the unsecured promise of the Company to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Company. Section 10. Plan Administrator. The Company shall be the plan administrator of the Plan. The plan administrator shall perform all ministerial functions with respect to the Plan. Further, the plan administrator shall have full power and authority to interpret and construe the Plan and shall determine all questions arising in the administration, interpretation, and application of the Plan. Any such determination shall be conclusive and binding on all persons. The plan administrator shall employ such advisors or agents as it may deem necessary or advisable to assist it in carrying out its duties hereunder. Section 11. Not a Contract of Continuing Employment. Nothing herein contained shall be construed as a commitment or agreement on the part of the Participant to continue his employment with the Company, and nothing herein contained shall be construed as a commitment or agreement on the part of the Company to continue the employment or the annual 5 rate of compensation of the Participant for any period, and the Participant shall remain subject to discharge to the same extent as if this Plan had never been put into effect. Section 12. Right of Amendment and Termination. The Company reserves the right to amend or terminate the Plan in whole or in part at any time and to suspend operation of the Plan, in whole or in part, at any time, by resolution or written action of its Board of Directors or by action of a committee to which such authority has been delegated by the Board of Directors; provided, however, that no amendment shall result in the forfeiture or reduction of the interest of any Participant or person claiming under or through any one or more of them pursuant to the Plan. Any amendment of the Plan shall be in writing and signed by authorized individuals. Section 13. Termination and Distribution of Accrued Benefits. The Plan may be terminated at any time by the Company, and in that event the amount of the accrued benefits as of the date of such termination shall remain an obligation of the Company and shall be payable as if the Plan had not been terminated. Section 14. Construction. Where necessary or appropriate to the meaning hereof, 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. Section 15. Severability. In the event any provision of the Plan is deemed invalid, such provision shall be deemed to be severed from the Plan, and the remainder of the Plan shall continue to be in full force and effect. Section 16. Governing Law. Except as otherwise provided, the provisions of the Plan shall be construed and enforced in accordance with the laws of the State of Ohio. Executed at Wickliffe, Ohio, this ______ day of ________________, 2005. THE LUBRIZOL CORPORATION By: ------------------------------------ Title: --------------------------------- By: ------------------------------------ Title: --------------------------------- 1205lmre 6 EX-10.6 7 l17409aexv10w6.txt EXHIBIT 10.6 SUPPLEMENTAL RETIREMENT PLAN FOR DWB Exhibit 10.6 Supplemental Retirement Plan for Donald W. Bogus (As Amended) In addition to the benefits accrued under The Lubrizol Corporation Pension Plan and Employees' Profit Sharing and Savings Plan, and any accrued benefits under the associated excess plans, Lubrizol will also establish a supplemental retirement plan on behalf of Donald W. Bogus with the following terms and conditions: 1) On Mr. Bogus' first day of employment, and on each anniversary of that date thereafter, 500 phantom shares of Lubrizol stock will be credited to a supplemental retirement account on Mr. Bogus' behalf. 2) If Mr. Bogus works until age 65, over the 12 year period a total of 6,000 phantom shares would be credited to the account. 3) Dividends on accumulated phantom shares will be posted throughout the year and will be used as the basis for purchasing additional phantom shares under the plan. 4) In the event of a change in control, as defined in the Executive Employment Agreement, or at the time of Mr. Bogus' death, Lubrizol would fully credit the account with the remaining balance of the 6,000 phantom shares. In the event of separation from service for other than the above reasons, the account balances as of the date of termination would be distributable under the plan. 5) Phantom shares accumulated under the plan will be included when considering share ownership objectives under the Executive Council Ownership Guidelines. 6) Amounts may be withheld at the time of distribution for tax purposes. Mr. Bogus, or his estate, may elect distribution in the form of shares or cash at the time of distribution for phantom shares that are attributable to deferrals prior April 1, 2004. For phantom shares that are attributable to deferrals on or after April 1, 2004, the distribution will be a cash amount equal to the number of phantom shares multiplied by the closing price per common share of The Lubrizol Corporation on the New York Stock Exchange Composite Transactions Reporting System on the date retirement or other termination. 7) As the shares are unregistered, certain restrictions on selling/trading may apply at the time of distribution. 8) The Medicare tax on the increase in the value of the account year over year will be entered into Mr. Bogus' pay on an annual basis. 9) Distribution upon Mr. Bogus' separation from service will be made in a lump sum six months after Mr. Bogus' separation from service. In the event Mr. Bogus dies prior to his separation from service, his account balance will be paid to his spouse, or if no spouse survives him, to his Estate, in a lump sum. EX-10.7 8 l17409aexv10w7.txt EXHIBIT 10.7 EXECUTIVE COUNCIL DEFERRED COMPENSATION PLAN Exhibit 10.7 THE LUBRIZOL CORPORATION 2005 EXECUTIVE COUNCIL DEFERRED COMPENSATION PLAN (As Amended) 1. Purpose. The purpose of this 2005 Executive Council Deferred Compensation Plan (the "Plan") is to permit a person who is a member of the Executive Council (sometimes hereinafter referred to as the "Member" or as the "Participant"), and who is employed by The Lubrizol Corporation (the "Company"), to defer a portion of such Member's compensation earned in calendar years beginning on or after January 1, 2005, as provided in this Plan. 2. Administration. The Plan shall be administered by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee's interpretation and construction of all provisions of the Plan shall be binding and conclusive upon all Participants and their heirs and/or successors. 3. Right to Defer Compensation. (a) A Member may, at any time prior to January 1 of a given calendar year, elect, for one or more future successive calendar years commencing with the calendar year immediately following the election (each a "Participation Year"), to defer under the Plan a pre-selected fixed dollar amount or percentage up to 90 percent of such Member's annual variable compensation, if any (the "deferred compensation"), under the Company's annual incentive plan ("Incentive Plan"), which such Participant may thereafter be entitled to receive for services performed during each elected Participation Year; provided, however that the actual amount deferred will be the elected amount less any applicable withholding taxes. Notwithstanding the foregoing, a Member may prior to March 15, 2005 make an election relating to deferred compensation with respect to services performed on or before December 31, 2005. (b) The election under this Section 3 shall take effect on the first day of the first elected Participation Year and such election shall be irrevocable for any elected Participation Year once such Participation Year shall have commenced. (c) Notwithstanding paragraphs (a) and (b), when an individual Member first becomes eligible to participate in the Plan, the newly eligible Member may make the election under this Section 3 to defer the specified compensation for services to be performed subsequent to the date specified in the election and for the remainder of the calendar year in which the election under this Section 3 is made, provided that such election is made within 30 days after the date that the Member is notified of the Member's eligibility, if otherwise allowed under Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder. (d) All elections under this Plan shall be made by written notice (on a form provided by the Company) specifying the deferred compensation, if any, determined under paragraph (a). (e) A Participant must make an election for each Participation Year. Notwithstanding paragraph (b) and the first sentence of this paragraph (e), any variable compensation earned after the end of the first month in which a Participant under this 1 Plan ceases to be a Member, as defined in Section 1, but continues to be employed by the Company, shall not be deferred, provided however, the balance in the Participant's Stock Deferral Accounts shall continue to be held and administered pursuant to the Plan. (f) All notices by a Participant under the Plan shall be in writing and shall be given to the Company's Vice President, Human Resources. 4. Stock Deferral Accounts and Stock Matching Accounts. (a) At the close of business of the day on which the Incentive Plan deferred compensation would have been payable to the Participant in the absence of the election under the Plan to defer payment thereof, there shall be credited to a separate Stock Deferral Account and Stock Matching Account for each Participant full and fractional stock equivalent units ("Units") which shall be established as hereinafter provided and shall be maintained for each Participant on the Company's records. (b) The number of full and fractional Units that shall be credited to a separate Stock Deferral Account for a Participant shall be equal to an amount determined by dividing the Participant's deferred compensation for the applicable Participation Year by the average of the closing price for Lubrizol Common Shares ("Shares") on the New York Stock Exchange ("NYSE") composite transactions reporting system ("composite tape") for each of the ten (10) consecutive trading days commencing on the fourth business day following the release of earnings for such Participation Year. (c) The number of full and fractional Units that shall be credited to a separate Stock Matching Account for a Participant shall be equal to an amount determined by multiplying the number of Units determined in paragraph (b) by ..25. (d) To the extent that, at the time Units are credited to a Stock Deferral Account Stock Matching Account of a Participant, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority. (e) The amount of deferred compensation used in the formulae set forth in paragraphs (b) and (c) shall not constitute sums due and owing to Participant. Such amounts shall be used solely as part of the formulae to determine the number of full and fractional Units. (f) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account and Stock Matching Account of a Participant with an additional number of whole and/or fractional Units equal to: (i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account and Stock Matching Account, respectively, of the Participant as of such payment date; divided by 2 (ii) the closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE- composite tape. (g) At no time prior to actual delivery of Shares pursuant to the Plan shall the Company be obligated to purchase or reserve Shares for delivery to any Participant and a Participant shall not be a shareholder or have any of the rights of a shareholder with respect to the Units credited to each separate Stock Deferral Account or Stock Matching Account of a Participant. 5. Payment of Deferred Compensation. (a) All Units credited to a separate Stock Deferral Account and Stock Matching Account of Participant, including dividend equivalents thereon, shall be payable to the Participant in a lump sum at the end of three years from the first date Units were credited to such separate Stock Deferral Account and Stock Matching Account of the Participant under Section 4(a) for a particular Participation Year unless the Participant elects at the time of deferral under Section 3 to have the Units paid six (6) months after the Participant's separation from service or upon another specified date; provided, however, that after the Participant makes the deferral election under Section 5, the Participant may elect once for any Participation Year of deferral, to change the date of distribution to another in-service year or six (6) months after the Participant has separated from service; provided further, that any such modification must be made in writing at least twelve (12) months prior to the original date of distribution; provided further, that the deferred distribution date must be at least five (5) years after the date originally selected. (b) All distributions or payments of Units to a Participant in the Participant's Stock Deferral Account shall be made in Shares equal to the number of whole Units credited to the separate Stock Deferral Account(s) of the Participant which become payable in accordance with Section 5(a). Any fractional number of Units shall be paid in cash in lieu of Shares. (c) All distributions or payments of Units to a Participant in the Participant's Stock Matching Account shall be made in cash equal to the number of whole Units credited to the separate Stock Matching Account(s) of the Participant, which become payable in accordance with Section 5(a) multiplied by the closing price for a Share on the NYSE composite tape on the date the Stock Matching Account(s) become payable. (d) To the extent that, at the time Shares are distributed to a Participant, any federal, state or local payroll withholding tax applies, tax withholding for distributions shall be made from those Shares that would provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by the Participant, but in no event less than the statutory minimums for tax withholding. For purposes of determining the number of Shares that are to be withheld to provide for the tax withholding, Shares shall be valued at the closing price on the New York Stock Exchange of a Share on the date the Shares are distributable (or if the Shares were not traded on that date, on the next preceding day on which the Shares were so traded). If the determination of the tax withholding would require the withholding of a fractional Share, the Company shall withhold the nearest whole number 3 of Shares needed to pay the tax withholding, rounded up, and remit to the Participant in cash the amount of the excess after the withholding taxes have been satisfied. (e) In the event a Participant dies prior to receiving payment of the entire amount in each separate Stock Deferral Account and Stock Matching Account of the Participant, the unpaid balance shall be paid within 60 days of the date of death to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant's legal representative or to the beneficiary designated in the Participant's last will as the one to receive such distributions. (f) To the extent the Committee deems necessary, the Shares distributed to a Participant pursuant to Section 5(a) or 6 or to a beneficiary pursuant to Section 5(e) may contain such restrictions on the right of immediate transfer as the Committee may reasonably determine. 6. Unforeseeable Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant's separate Stock Deferral Accounts and Stock Matching Accounts for reasons of an unforeseeable emergency that cannot be met using other resources. For purposes of the Plan, an unforeseeable emergency shall be deemed to exist in the event the Committee determines that a Participant needs a distribution to meet a severe hardship to the Participant resulting from a sudden or unexpected illness or accident of the Participant or a member of the Participant's family, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant. A distribution based on financial hardship shall not exceed the amount required to meet the immediate financial need created by the hardship. 7. Non-assignability. None of the rights or interests in any of the Participant's separate Stock Deferral Accounts and Stock Matching Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner. 8. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant's separate Stock Deferral Accounts and Stock Matching Accounts maintained for purposes of the Plan merely constitutes a bookkeeping entry on records of the Company, constitutes the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company's assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company's general creditors. 4 9. Miscellaneous. In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units credited to each separate Stock Deferral Account and Stock Matching Account of a Participant shall be appropriately adjusted to take into account any such event. 10. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee, may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect any Stock Deferral Account or Stock Matching Account of a Participant as it existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants. 11. Plan Implementation. This Plan is adopted and effective for deferrals of variable compensation earned for calendar years beginning on and after January 1, 2005. 1205lmre 5 EX-10.8 9 l17409aexv10w8.txt EXHIBIT 10.8 SENIOR MANAGEMENT PLAN Exhibit 10.8 THE LUBRIZOL CORPORATION Senior Management Deferred Compensation Plan (fna 2005 Deferred Compensation Plan For Officers) (As Amended) 1. Purpose. The purpose of this 2005 Senior Management Deferred Compensation Plan (the "Plan") is to permit an a person who is an officer (as identified by the Company for Section 16 purposes under the Securities Exchange Act of 1934) of The Lubrizol Corporation (the "Company") or, for amounts earned in 2005, who was an officer of the Company during 2004, or effective January 1, 2006, who is selected to participate in the Plan by the Organization and Compensation Committee of the Board of Directors of the Company ("Committee"), (hereinafter referred to as the "Participant"), who wishes, to defer a portion of such Participant's compensation earned in calendar years beginning on or after January 1, 2005, as provided in the Plan. Notwithstanding any provision to the contrary, prior to January 1, 2006, for purposes of this Plan, an "officer" or "Participant" does not include any employee of Noveon, Inc. or its affiliates. 2. Administration. The Plan shall be administered by the Committee. The Committee's interpretation and construction of all provisions of the Plan shall be binding and conclusive upon all Participants and their heirs and/or successors. 3. Right to Defer Compensation. (a) A Participant of the Company may, at any time prior to January 1 of a given calendar year, or at such other time as allowed under Section 409A of the Internal Revenue Code and by the Committee, elect, for the calendar year, to defer under the Plan a pre-selected amount of such Participant's compensation specified in paragraph (c) below, which such Participant may thereafter be entitled to receive for services performed during such elected calendar year. Notwithstanding the foregoing, if allowed by the Company, at any time up to six months prior to the payment of performance-based long-term incentive compensation, a Participant may elect to defer under the Plan a pre-selected amount of such compensation specified in (c)(iii) below, provided however, that any such election shall only be made in accordance with Section 409A of the Internal Revenue Code of 1986, as amended and the regulations thereunder. (b) The election under this Section 3 shall take effect on the first day of the calendar year following the date on which the election is made and such election shall be irrevocable for any elected calendar year after such elected calendar year shall have commenced. (c) A Participant may elect to defer up to 90 percent of one or more of the following: (i) Base salary; (ii) Annual incentive pay, if any. (iii) Stock compensation from the long term incentive plan, if any. (iv) Stock compensation pursuant to an employment agreement dated as of January 1, 2003 1 provided, however, that the actual amount deferred will be the elected amount less any applicable withholding taxes. (d) Notwithstanding paragraphs (a), (b) and (c), where a Participant first becomes eligible to participate in the Plan, the newly eligible officer may make the election under this Section 3 to defer the specified compensation for services to be performed subsequent to the election and for the remainder of the calendar year in which the election under this Section 3 is made provided such election is made within 30 days after the date the Participant first becomes eligible, if otherwise allowed under Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations thereunder. (e) Within such periods of time as the Committee shall designate, and in addition to the provisions of paragraphs (a) through (d), a Participant may elect to defer that portion or all of the Participant's cash and/or stock compensation (i) described in paragraph (c) and/or (ii) any other plan or program that provides for cash or stock compensation, to the extent that such amounts would otherwise be nondeductible by the Company pursuant to Section 162(m) of the Internal Revenue Code of 1986, as amended. For purposes of the preceding sentence, the amount to be deferred with respect to any compensation plans payable in Company shares shall be determined by taking into consideration any fixed cash compensation to be received subsequent to the date on which shares are distributable under such program. Notwithstanding any other provision of this Plan, deferrals under this paragraph (e) shall be distributable only six (6) months after the Participant separates from service in accordance with Section 6. (f) All elections under this Plan shall be made by written notice delivered to the Vice President, Human Resources, of the Company specifying (i) the portion, if any, determined under paragraph (c), of each category of the Participant's compensation to be deferred for a year, as described above, (ii), if applicable, the time of distribution, and (iii) the payment option as provided in Section 6 for distributions. (g) Notwithstanding paragraph (f), any compensation earned after the end of the first month in which a Participant under this Plan no longer is a Participant, as defined in Section 1, but continues to be employed by the Company, shall not be deferred, provided however, the balance in the Participant's Deferral Accounts shall continue to be held and administered pursuant to the Plan; provided further that the provisions of this paragraph (g) shall not apply for amounts earned in 2005. 2 4. Deferral of Cash Compensation. (a) On the date the cash compensation deferred under the Plan would have become payable to the Participant in the absence of an election under the Plan to defer payment thereof, the amount of such deferred compensation shall be credited to a Stock Deferral Account and/or any of the Cash Deferral Account investment portfolios designated as available by the Committee from time to time. All Deferral Accounts shall be established and maintained for each Participant in the Company's accounting books and records and the Company shall be under no obligation to purchase any investments designated by the Participant. To the extent that, at the time amounts are credited to a Participant's Deferral Accounts, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority. (b) Participant's Cash Deferral Accounts shall be credited with any gains or losses equal to those generated as if the Participant's Cash Deferral Account balances had been invested in the applicable investment portfolio(s) selected by the Participant (c) A Participant's deferred cash compensation credited to a Participant's Stock Deferral Account shall be used to determine the number of full and fractional units ("Units") representing Company Common Shares ("Shares") which the deferred amount would purchase at the closing price for the Shares on the New York Stock Exchange ("NYSE") composite transactions reporting system on the date that the deferred amount is credited pursuant to paragraph (a) and if Shares were not traded on that date on the NYSE, then such computation shall be made as of the first preceding day on which Shares were so traded. The Company shall credit the Participant's Stock Deferral Account with the number of full and fractional Units so determined. A Participant's Stock Deferral Account shall be administered in accordance with Section 5(b) through (e). (d) A Participant may elect pursuant to rules established by the Committee to transfer a portion or all of the balance of any Deferral Account established under this Section 4 to any other such Deferral Account. (e) Notwithstanding the foregoing, a Participant may elect to have any portion or all of the Participant's cash deferrals credited to any of the Deferral Accounts listed in paragraph (a) and may transfer balances in accordance with paragraph (d) provided that the Participant is considered, in the judgment of the Chief Executive Officer of the Company, to be on plan to meet the Participant's Company Share ownership guideline. Otherwise, a Participant must elect that at least 50% of any cash deferral hereunder be credited to a Stock Deferral Account and may not transfer any portion of the balance of the Stock Deferral Account to another Deferral Account. 5. Deferral of Stock Compensation. (a) At the time that Shares are distributable to a Participant, who has elected to defer the receipt thereof under Section 3(c) or (e), in lieu of Shares being issued, there shall be credited to a separate Stock Deferral Account for the Participant, full stock equivalent units ("Units") which shall be established and maintained on the Company's records. One Unit shall be allocated to the Stock Deferral Account for each such Share. The balance of a Stock Deferral Account established under this Section 5(a) pursuant to 3 deferrals under Section 3(c)(iii) or (iv) may not be transferred to any other Deferral Account. (b) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account of a Participant with an additional number of whole and/or fractional Units equal to: (i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account of a Participant as of such payment date; divided by (ii) The closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE-composite tape. (c) At no time prior to actual delivery of Shares pursuant to the Plan, shall the Company be obligated to purchase or reserve Shares for delivery of a Participant and the Participant shall not be a shareholder nor have any of the rights of a shareholder with respect to the Units credited to the Participant's Stock Deferral Accounts. (d) To the extent that, at the time Units are credited to a Stock Deferral Account of a Participant, any federal, state or local payroll withholding tax applies (e.g., Medicare withholding tax), the Participant shall be responsible for the payment of such amount to the Company and the Company shall promptly remit such amount to the proper taxing authority. (e) In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units in each separate Stock Deferral Account of a Participant shall be appropriately adjusted to take into account any such event. 6. Payment of Deferred Compensation. (a) In the event a Participant separates from service prior to commencing to receive scheduled withdrawal payments of the Participant's Deferral Accounts, such scheduled withdrawal payments, if any, that have not commenced pursuant to Section 7, and the amount selected by the Participant to be paid upon a separation from service, shall be paid to the Participant in: (i) a single lump sum; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years, as the Participant shall have selected pursuant to Section 3(f). Such periodic payments shall begin or the lump sum payment shall be made, as the case may be, from the Participant's Deferral Accounts, at such time, not less than six (6) nor more than twelve (12) months after the Participant's separation from service, as the Participant shall have selected pursuant to Section 3(f); provided, however, that if Participant has not selected a payment option 4 with respect to payment upon a separation from service, such amounts shall be paid in a lump sum six (6) months after Participant's separation from service. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's separation from service, to change the time or form of distribution of the Participant's Deferral Accounts upon a separation from service; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(f). (b) The amount of each installment payable to a Participant from the Participant's Cash Deferral Accounts shall be determined by dividing the aggregate balance of such Participant's Cash Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid. Until a Participant's Cash Deferral Accounts has been completely distributed, the balance thereof remaining, from time to time, shall be credited with gains and losses on a monthly basis as provided in Section 4(b). (c) The amount of any installment payable to a Participant from the Participant's Stock Deferral Accounts shall be determined by dividing the balance of the aggregate number of Units in the Participant's Stock Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid and the quotient shall be the number of Shares that are payable. If the determination of the installment payable from the Participant's Stock Deferral Accounts results in a fractional Share being payable, the installment payment shall exclude any such fractional Share payment except that, in the final installment payment, any such fractional Share shall be paid in cash in an amount as determined by the Committee. Until the Participant's Stock Deferral Accounts have been completely distributed, the balance in the Stock Deferral Accounts shall continue to be credited with the dividend equivalents on such balances as provided in Section 5(b). (d) In the event a Participant dies prior to receiving payment of the entire amount of the Participant's Deferral Accounts, the unpaid balance shall be paid to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant's legal representative or to the beneficiary designated in the Participant's last will as the one to receive such distributions. Distributions subsequent to the death of a Participant may be made in: (i) a single lump sum; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years as elected by the Participant pursuant to Section 3(f) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon death, such amounts shall be paid to Participant's beneficiary in a lump sum upon the death of the Participant. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's death, to change the time or form of distribution of the Participant's Deferral Accounts; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(f). (e) In the event a Participant becomes disabled in accordance with Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations 5 thereunder, prior to receiving payment of the entire amount of the Participant's Deferral Accounts, the unpaid balance shall be paid to the Participant in: (i) a single lump; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years as elected by the Participant pursuant to Section 3(f) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon disability, such amounts shall be paid to Participant in a single lump sum upon Participant's disability. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's disability, to change the time or form of distribution of the Participant's Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(f). (f) Tax withholding for distributions under Sections 6 and 7 of Participant's Stock Deferral Accounts shall be made from those Shares otherwise issuable and shall be such number of Shares that will provide for the federal, state and/or local income tax at the rates then applicable for supplemental wages, unless otherwise requested by the Participant, but in no event less than the statutory minimums for tax withholding. (g) For purposes under paragraph (f) of determining the number of Shares that are to be withheld to provide for the tax withholding, Shares shall be valued at the closing price on the New York Stock Exchange of a Share on the date the Shares are distributable (or if the Shares were not traded on that date, on the next preceding day on which the Shares were so traded). 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 the Participant in cash the amount of the excess after the withholding taxes have been satisfied. (h) Payments from the Cash Deferral Accounts shall be made in cash and payments from the Stock Deferral Accounts shall be made in Shares. The amount of any distribution pursuant to Sections 6 through 8 shall reduce the balance held in the Participant's corresponding Deferral Accounts as of the date of such distribution. Installment payments shall be made pro-rata from a Participant's Deferral Accounts. 7. Scheduled Withdrawal Accounts. Pursuant to Section 3 and other than for deferrals pursuant to Sections 3(c)(iv) and 3(e), a Participant may elect to receive part or all of the Participant's deferrals in accordance with Participant's elections for up to three scheduled withdrawal accounts and with respect to Participant's long term incentive compensation deferral election pursuant to Section 3(c)(iii), each of which shall commence as elected by the Participant pursuant to Section 3(f) in: (i) a single; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years and the amount of each installment shall be computed as provided in Section 6(b), and (c) as the case may be. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's date of the scheduled withdrawal, to change the time or form of distribution of the Participant's Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(f). 6 8. Unforeseeable Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant's Deferral Accounts for reasons of an unforeseeable emergency that cannot be met using other resources. For purposes of the Plan, an unforeseeable emergency shall be deemed to exist in the event the Committee determines that a Participant needs a distribution to meet a severe hardship to the Participant resulting from a sudden or unexpected illness or accident of the Participant or a member of the Participant's family, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant. A distribution based on financial hardship shall not exceed the amount required to meet the immediate financial need created by the hardship. 9. Non-assignability. None of the rights or interests in any of the Participant's Deferral Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner. 10. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant's accounts maintained for purposes of the Plan merely constitute bookkeeping entries on records of the Company, constitute the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash, shares or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company's assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company's general creditors. 11. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect a Participant's accounts as they existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants. 12. Plan Implementation. This Plan is adopted and effective for deferrals of compensation earned for calendar years beginning on or after January 1, 2005. 1205mre 7 EX-10.9 10 l17409aexv10w9.txt EXHIBIT 10.9 DEFERRED COMPENSATION PLAN FOR DIRECTORS Exhibit 10.9 THE LUBRIZOL CORPORATION 2005 Deferred Compensation Plan For Directors (As Amended) 1. Purpose. The purpose of this 2005 Deferred Compensation Plan For Directors (the "Plan") is to continue to permit any member of the Board of Directors (the "Participant") of The Lubrizol Corporation (the "Company"), to defer all or a portion of the compensation earned as a director in calendar years beginning on or after January 1, 2005, until after the Participant separates from service as a director, all as provided in the Plan. 2. Administration. The Plan shall be administered by the Organization and Compensation Committee of the Board of Directors of the Company (the "Committee"). The Committee's interpretation and construction of all provisions of this Plan shall be binding and conclusive. In the event that a Participant is a member of the Committee, such Participant shall not participate in any decision of the Committee relating to that Participant's participation in this Plan. 3. Right to Defer Compensation. (a) Any director of the Company may, at any time prior to January 1 of a given calendar year, elect to defer under this Plan all, or such portion as the director may designate, of (i) that director's annual retainer fee, (ii) the attendance fees for attending directors' meetings or committees thereof and/or (iii) stock compensation under The Lubrizol Corporation 2005 Stock Incentive Plan. All compensation deferred shall be deferred on the day that such compensation would otherwise have been paid to the director. (b) The election described in paragraph (a) shall be made by written notice delivered to the Vice President, Human Resources, of the Company specifying (i) the portion of designated compensation to be deferred for such year, (ii) time of distribution, and (iii) if applicable, the payment option. (c) The election under this Section 3 shall take effect on the first day of the calendar year following the year in which the election is made. A new election must be made for each calendar year. (d) Notwithstanding paragraphs (a), (b) and (c), where a director first becomes eligible to participate in the Plan, the newly eligible director may make the election under this Section 3 to defer the specified compensation for services to be performed subsequent to the election and for the remainder of the calendar year in which the election under this Section 3 is made provided such election is made within 30 days after the date the director first becomes eligible. 1 4. Deferral of Cash Compensation. (a) On the date the cash compensation deferred under the Plan would have become payable to the Participant in the absence of an election under the Plan to defer payment thereof, the amount of such deferred compensation shall be credited to a Stock Deferral Account and/or any of the Cash Deferral Account investment portfolios designated as available by the Committee from time to time. All Deferral Accounts shall be established and maintained for each Participant in the Company's accounting books and records and the Company shall be under no obligation to purchase any investments designated by the Participant. (b) Participant's Cash Deferral Accounts shall be credited with any gains or losses equal to those generated as if the Participant's Cash Deferral Account balances had been invested in the applicable investment portfolio(s) selected by the Participant (c) A Participant's deferred cash compensation credited to a Participant's Stock Deferral Account shall be used to determine the number of full and fractional units ("Units") representing Company Common Shares ("Shares") which the deferred amount would purchase at the closing price for the Shares on the New York Stock Exchange ("NYSE") composite transactions reporting system on the date that the deferred amount is credited pursuant to paragraph (a) and if Shares were not traded on that date on the NYSE, then such computation shall be made as of the first preceding day on which Shares were so traded. The Company shall credit the Participant's Stock Deferral Account with the number of full and fractional Units so determined. A Participant's Stock Deferral Account shall be administered in accordance with Section 5(b) through (e). (d) A Participant may elect pursuant to rules established by the Committee to transfer a portion or all of the balance of any Deferral Account established under this Section 4 to any other such Deferral Account. 5. Deferral of Stock Compensation. (a) At the time that Shares are distributable to a Participant, who has elected to defer the receipt thereof under Section 3, in lieu of Shares being issued, there shall be credited to a separate Stock Deferral Account for the Participant, full stock equivalent units ("Units") which shall be established and maintained on the Company's records. One Unit shall be allocated to the Stock Deferral Account for each such Share. The balance of a Stock Deferral Account established under this Section 5(a) pursuant to deferrals under Section 3 may not be transferred to any other Deferral Account. (b) As of each dividend payment date established by the Company for the payment of cash dividends with respect to its Shares, the Company shall credit each separate Stock Deferral Account of a Participant with an additional number of whole and/or fractional Units equal to: (i) the product of (x) the dividend per Share which is payable with respect to such dividend payment date, multiplied by (y) the number of whole and fractional Units credited to the separate Stock Deferral Account of a Participant as of such payment date; divided by 2 (ii) The closing price of a Share on the dividend payment date (or if Shares were not traded on that date, on the next preceding day on which Shares were so traded), as reported on the NYSE-composite tape. (c) At no time prior to actual delivery of Shares pursuant to the Plan, shall the Company be obligated to purchase or reserve Shares for delivery of a Participant and the Participant shall not be a shareholder nor have any of the rights of a shareholder with respect to the Units credited to the Participant's Stock Deferral Accounts. (d) In the event of any change in the number of outstanding Shares by reason of any stock dividend, stock split up, recapitalization, merger, consolidation, exchange of shares or other similar corporate change, the number of Units in each separate Stock Deferral Account of a Participant shall be appropriately adjusted to take into account any such event. 6. Payment of Deferred Compensation. (a) In the event a Participant separates from service prior to commencing to receive schedule withdrawal payments of the Participant's Deferral Accounts, such scheduled withdrawal payments, if any, that have not commenced pursuant to Section 7, and the amount selected by Participant to be paid upon a separation from service, shall be to the Participant in: (i) a single lump sum; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years, as the Participant shall have selected pursuant to Section 3(b). Such periodic payments shall begin or the lump sum payment shall be made, as the case may be, from the Participant's Deferral Accounts, at such time, not less than six (6) nor more than twelve (12) months after the Participant's separation from service, as the Participant shall have selected pursuant to Section 3(b); provided, however, that if Participant has not selected a payment option with respect to payment upon a separation from service, such amounts shall be paid in a lump sum six (6) months after Participant's separation from service. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's separation from service, to change the time or form of distribution of the Participant's Deferral Accounts upon a separation from service; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(b). (b) The amount of each installment payable to a Participant from the Participant's Cash Deferral Accounts shall be determined by dividing the aggregate balance of such Participant's Cash Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid. Until a Participant's Cash Deferral Accounts has been completely distributed, the balance thereof remaining, from time to time, shall be credited with gains and losses on a monthly basis as provided in Section 4(b). (c) The amount of any installment payable to a Participant from the Participant's Stock Deferral Accounts shall be determined by dividing the balance of the aggregate number of Units in the Participant's Stock Deferral Accounts by the number of periodic installments (including the current installment) remaining to be paid and the 3 quotient shall be the number of Shares that are payable. If the determination of the installment payable from the Participant's Stock Deferral Accounts results in a fractional Share being payable, the installment payment shall exclude any such fractional Share payment except that, in the final installment payment, any such fractional Share shall be paid in cash in an amount as determined by the Committee. Until the Participant's Stock Deferral Accounts have been completely distributed, the balance in the Stock Deferral Accounts shall continue to be credited with the dividend equivalents on such balances as provided in Section 5(b). (d) In the event a Participant dies prior to receiving payment of the entire amount of the Participant's Deferral Accounts, the unpaid balance shall be paid to such beneficiary as the Participant may have designated in writing to the Vice President, Human Resources, of the Company as the beneficiary to receive any such post-death distribution under the Plan or, in the absence of such written designation, to the Participant's legal representative or to the beneficiary designated in the Participant's last will as the one to receive such distributions. Distributions subsequent to the death of a Participant may be made in: (i) a single lump sum; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years as elected by the Participant pursuant to Section 3(b) and the amount of each installment shall be computed as provided in Section 6(b), and (d) as the case may be; provided, however, that if Participant has not selected a payment option with respect to payment upon death, such amounts shall be paid to Participant's beneficiary in a lump sum upon the death of the Participant. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's death, to change the time or form of distribution of the Participant's Deferral Accounts; provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(b). (e) Payments from the Cash Deferral Accounts shall be made in cash and payments from the Stock Deferral Accounts shall be made in Shares. The amount of any distribution pursuant to Sections 6 through 8 shall reduce the balance held in the Participant's corresponding Deferral Accounts as of the date of such distribution. Installment payments shall be made pro-rata from a Participant's Deferral Accounts. 7. Scheduled Withdrawal Accounts. Pursuant to Section 3, a Participant may elect to receive part or all of the Participant's deferrals in accordance with Participant's elections for up to three scheduled withdrawal accounts and with respect to Participant's Stock Deferral Accounts pursuant to Section 3(a)(iii), each of which shall commence as elected by the Participant pursuant to Section 3(b) in: (i) a single; (ii) periodic installments over such period, not exceeding twenty (20) years; or (iii) a lump sum followed by periodic installments over such period, not exceeding twenty (20) years and the amount of each installment shall be computed as provided in Section 6(b), and (c) as the case may be. Notwithstanding the foregoing, a Participant may elect not less than twelve (12) months prior to the Participant's date of the scheduled withdrawal, to change the time or form of distribution of the Participant's Deferral Accounts, provided, however that any such change shall be invalid if the effect of such change is to accelerate distribution; provided, further that upon any such change, the distribution shall occur five (5) years after the date originally selected pursuant to Section 3(b). 8. Unforeseen Emergency. The Committee may accelerate the distribution of part or all of one or more of a Participant's Deferral Accounts for reasons of an unforeseeable 4 emergency that cannot be met using other resources. For purposes of the Plan, an unforeseeable emergency shall be deemed to exist in the event the Committee determines that a Participant needs a distribution to meet a severe hardship to the Participant resulting from a sudden or unexpected illness or accident of the Participant or a member of the Participant's family, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant. A distribution based on financial hardship shall not exceed the amount required to meet the immediate financial need created by the hardship. 9. Non-assignability. None of the rights or interests in any of the Participant's Deferral Accounts shall, at any time prior to actual payment or distribution pursuant to the Plan, be assignable or transferable in whole or in part, either voluntarily or by operation of law or otherwise, and such rights and interest shall not be subject to payment of debts by execution, levy, garnishment, attachment, pledge, bankruptcy or in any other manner. 10. Interest of Participant. The Company shall be under no obligation to segregate or reserve any funds or other assets for purposes relating to the Plan and, except as set forth in this Plan, no Participant shall have any rights whatsoever in or with respect to any funds or other assets held by the Company for purposes of the Plan or otherwise. Each Participant's accounts maintained for purposes of the Plan merely constitute bookkeeping entries on records of the Company, constitute the unsecured promise and obligation of the Company to make payments as provided herein, and shall not constitute any allocation whatsoever of any cash, shares or other assets of the Company or be deemed to create any trust or special deposit with respect to any of the Company's assets. Notwithstanding the foregoing provisions, nothing in this Plan shall preclude the Company from setting aside Shares or funds in trust pursuant to one or more trust agreements between a trustee and the Company. However, no Participant shall have any secured interest or claim in any assets or property of the Company or any such trust and all Shares or funds contained in such trust shall remain subject to the claims of the Company's general creditors. 11. Amendment. The Board of Directors of the Company, or the Organization and Compensation Committee may, from time to time, amend or terminate the Plan, provided that no such amendment or termination of the Plan shall adversely affect a Participant's accounts as they existed immediately before such amendment or termination or the manner of distribution thereof, unless such Participant shall have consented thereto in writing. Notice of any amendment or termination of the Plan shall be given promptly to all Participants. 12. Plan Implementation. This Plan is adopted and effective for deferrals of compensation earned for calendar years beginning on or after January 1, 2005. 1105lmre 5 EX-10.10 11 l17409aexv10w10.txt EXHIBIT 10.10 ANNUAL INCENTIVE PLAN AS AMENDED Exhibit 10.10 THE LUBRIZOL CORPORATION ANNUAL INCENTIVE PAY PLAN (Amended and Restated Effective January 1, 2005) INTRODUCTION The Lubrizol Corporation (hereinafter referred to as the "Corporation") hereby establishes, effective as of January 1, 2005, 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 Foreign 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) "Foreign Employee" shall mean any person who is employed for a wage or salary by an international Subsidiary of the Corporation. (h) "Foreign Participant" shall mean any Foreign 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. 1 (i) "Individual Award" shall mean the amount paid (or to be paid) to a Participant or Foreign Participant, as the case may be, by the Corporation pursuant to the Plan. (j) "Individual Performance Shares" 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, 2005. (o) "Plan Year" shall mean each twelve-month period commencing January 1 and ending December 31. (p) "Subsidiary" shall mean any corporation, foreign 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 PERFORMANCE SHARES 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, Individual Performance Shares for each Participant. 3.02 Calculation of Individual Performance Shares. Individual Performance Shares shall be calculated in the following manner: 2 (a) The Pay of each Participant shall be multiplied by a designated percentage which shall take into account the Participant's position in the Corporation. Such designated percentage shall be determined by the Committee. (b) The product for each Participant, determined pursuant to the calculation in paragraph (a) above, shall be divided by the sum of all such amounts produced for all Participants calculated in accordance with paragraph (a) above. (c) The quotient determined for each Participant, calculated pursuant to paragraph (b) above, shall be multiplied by 100 and rounded, up or down, to the nearer whole number to produce the number of each Participant's Individual Performance Shares. Individual Performance Shares 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. ARTICLE IV DETERMINATION OF FUND 4.01 Fund. A fund shall be accrued on a monthly basis during each Plan Year, based upon a fixed percentage of the Corporation's monthly consolidated net income during such Plan Year (the "Fund"), as established by the Committee, which percentage may be increased or decreased at any time, and from time to time, prior to the end of the Plan Year at the discretion of the Committee. The Fund shall consist of bookkeeping accruals on the books of the Corporation and no cash or other property shall be set aside by the Corporation for these purposes. 4.02 Post-Plan Year Fund Adjustment. At the beginning of each Plan Year, corporate initiatives for the Plan Year will be categorized into corporate performance measures and shall be presented to the Committee by the Chief Executive Officer. In February following the Plan Year, the Chief Executive Officer shall evaluate the outcome of the performance measures for the Plan Year just concluded and shall present his evaluation to the Committee which the Committee may, at its discretion, increase or decrease the amount of the Fund. ARTICLE V INDIVIDUAL AWARDS 5.01 Allocation. Each Participant's Individual Award for a Plan Year shall be calculated in January following the close of the Plan Year and shall be an amount determined as follows: (a) Divide the total Fund, as finally approved by the Committee, by the total Individual Performance Shares of all Participants; (b) For each Participant, multiply the amount determined in paragraph (a) by such Participant's Individual Performance Shares; and (c) The product determined in paragraph (b) shall be the tentative amount of the Participant's Individual Award which may be increased or decreased in the sole discretion of the Committee. 3 The Committee may also in its sole and unrestricted discretion determine Individual Awards for Participants who were hired during the Plan Year. No Participant shall have any vested interest in, or be entitled to, any Individual Award unless and until payment is authorized by the Committee. 5.02 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 by the 15th of the third month following the close of the Plan Year. A Participant, who leaves the Corporation's employ after the Plan Year but prior to the payment of an Individual Award, except in the case of retirement under the provisions of a qualified defined benefit plan maintained by the Corporation, disability or death, will not be eligible to receive any payment under this Plan. However, an Individual Award may be made to such a Participant in those instances where recommendation for such a payment has been made by the Chief Executive Officer and approved by the Committee. In the event a Participant dies after the Plan Year but prior to the payment of any Individual Award with respect to the Plan Year, any Individual Award determined to be payable by the Committee shall be paid by the Corporation to the Participant's estate. 5.03 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 VI AWARDS FOR FOREIGN EMPLOYEES 6.01 Participation. The Committee shall determine which Foreign Employees shall participate in the Plan for each Plan Year. The Committee's selection of Foreign Participants shall be made after considering recommendations presented to it by the Chief Executive Officer. 6.02 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 Foreign Participant. 6.03 Payment of Awards. Individual Awards to each Foreign Participant shall be paid by the international Subsidiary that is the employer of such Foreign Participant at the same time as payment is made to Participants under Section 5.02. 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. 6.04 Conditions. (a) A Foreign Employee who leaves the international Subsidiary's employ after the end of the Plan Year but prior to the payment of an Individual Award, except in the case of retirement in accordance with the customary practice of such 4 Subsidiary, disability or death, will not be eligible to receive any payment under this Plan. However, an Individual Award may be made to such a Foreign Participant in those instances where recommendation for such a payment has been made by the Chief Executive Officer and approved by the Committee. (b) In the event a Foreign Participant dies after the Plan year but prior to the payment of any Individual Award with respect to the Plan Year, any Individual Award determined by the Committee to be payable, shall be paid by the international Subsidiary to the Foreign Participant's estate or in accordance with local laws. ARTICLE VII CHANGE OF CONTROL 7.01 Effect of Change in Control. In the event a Change in Control of the Corporation (as defined in Section 7.02) 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. The Fund from which Individual Awards are to be made 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 5.01 and 6.02 herein. Payment of such Individual Awards shall be made within thirty (30) days of the date on which the determination is made to compute the payments according to the terms of this Section 7.01. 7.02 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) Any one person, or more than one person acting as a group, acquires ownership of the securities of the Corporation that, together with the securities held by such person or group, constitutes more than 50 percent of the total fair market value or total voting power of the securities of the Corporation; (b) 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) assets from the Corporation that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all the asserts of the Corporation immediately prior to such acquisition or acquisitions; (c) Any person (as the term "person" is used in Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person) ownership of securities representing 35% or more of the combined voting power of the then-outstanding securities entitled to vote generally in the election of directors of the Corporation ("Voting Stock"); or (e) If during any period of 12-month period, individuals who, at the beginning of any such period constitute the Directors of the Corporation, cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Corporation's stockholders, of each Director of the Corporation first elected during such period was approved by a vote of a majority of the 5 Directors of the Corporation then still in office who were Directors of the Corporation at the beginning of any such period. 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. ARTICLE VIII ADMINISTRATION 8.01 Plan Administrator. The Committee shall be the Plan administrator. 8.02 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 Foreign Employees who are eligible for Plan participation; (2) Determination of the amount of the Fund to be distributed to Participants and Foreign Participants for each Plan Year; and (3) Determination of each Officer's actual Individual Award. (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. (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. ARTICLE IX MISCELLANEOUS 9.01 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 Foreign Participant shall have any rights whatsoever in or with respect to any funds or assets of the Corporation. 9.02 Non-Alienation. Since a Participant or Foreign Participant does not have any rights to any Individual Award under the Plan until the time that payment of such Individual Award is made, 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. If a Participant or Foreign Participant attempts to alienate, sell, transfer, assign, pledge or otherwise encumber any such anticipated Individual Award, or if he has filed or will be filing for bankruptcy, the Committee in its discretion may cause such amounts as would 6 otherwise become payable to such Participant or Foreign Participant at such time or times to be paid to or applied for the benefit of such one or more of the following as the Committee in its sole and unrestricted judgment and discretion may designate: the Participant or Foreign Participant, his spouse, child or children, or other dependents. 9.03 Unclaimed Payments. Should the whereabouts of any Participant or Foreign Participant entitled to receive any Individual Award be unknown to the Corporation, and unascertainable after reasonable inquiry by the Corporation, for a period of two years from the date of scheduled payment of the Individual Award, the right of such person to receive payments hereunder shall be terminated, and the amounts which would otherwise have been payable to such person shall be forfeited. 9.04 Actions or Decisions with Respect to the Plan. Any decision or action of the Corporation, the Board, or the Committee, arising out of or in connection with the administration and operation of this Plan, may be made or taken in their sole and unrestricted judgment and discretion, and such decision or action shall be conclusive and binding upon all Participants and Foreign Participants. 9.05 No Employment Rights. Nothing herein contained shall be construed as a commitment or agreement upon the part of any Participant, Foreign Participant, Employee or Foreign 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 Foreign Participant hereunder or any Employee or Foreign Employee for any period. 9.06 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. 9.07 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. 1205lmre 7 EX-10.11 12 l17409aexv10w11.txt EXHIBIT 10.11 EXECUTIVE DEATH BENEFIT PLAN Exhibit 10.11 THE LUBRIZOL CORPORATION EXECUTIVE DEATH BENEFIT PLAN (As Amended) The Lubrizol Executive Death Benefit Plan (hereinafter referred to as the "Plan") shall provide death benefits to the designated beneficiaries of certain executives of The Lubrizol Corporation (hereinafter referred to as the "Corporation") in accordance with the provisions hereinafter set forth. Section 1. Eligibility. Participation in the Plan shall be limited to those executives of the Corporation who are designated by the Organization and Compensation Committee of the Board of Directors of the Corporation (hereinafter referred to as the "Committee") to participate in the Plan; who complete a physical examination to the satisfaction of the Corporation as soon as reasonably possible after being so designated; and who waive participation and benefits in the basic term-life insurance coverage sponsored by the Corporation or any of its affiliates, in a form satisfactory to the Corporation. Any executive so designated shall be listed in Appendix A attached hereto and shall hereinafter be referred to as a "Participant". Section 2. Benefits. Effective July 25, 1994, upon the death of a Participant, a death benefit shall be made to the Participant's Beneficiary (as defined in Section 5) equal to a percentage of the Participant's bi-weekly salary multiplied by 26, plus quarterly pay, including any such bi-weekly salary or quarterly pay which is deferred under The Lubrizol Corporation Deferred Compensation Plan for Officers (hereinafter referred to as "Covered Pay") rounded to the nearest $1,000.00. Covered Pay for the Participants designated by the Board to participate in the Plan shall have the meaning as described in Appendix A, attached hereto. The Committee will periodically review the Plan and may, at its discretion, change the level of Covered Pay for any Participant. A death benefit shall be calculated in accordance with Paragraph (a) or (b) below, whichever is applicable. (a) The amount of the death benefit payable with respect to a Participant, who at the time of his death, (i) is employed by the Corporation, or (ii) has retired under the normal retirement provisions of a qualified defined benefit plan maintained by the Corporation, shall be as follows:
Age of Participant at Death Death Benefit - -------------------- ------------------- Less than age 70 250% of Covered Pay At least age 70, but less than age 75 150% of Covered Pay Age 75 and over 100% of Covered Pay
(b) The amount of the death benefit payable with respect to a Participant who (i) has retired under the early retirement provisions of a qualified defined benefit plan maintained by the Corporation, or (ii) has voluntarily terminated his employment with the Corporation but has not obtained competitive employment with another employer, shall be as follows:
Years after Early Retirement or Voluntary Termination Death Benefit - --------------------- ------------------- 0 through 5 250% of Covered Pay 6 through 10 150% of Covered Pay 11 or more 100% of Covered Pay
Section 3. Funding. The obligation of the Corporation to pay benefits provided hereunder shall be satisfied by the Corporation out of its general funds. In order to provide a source of payment for its obligations under the Plan, the Corporation will cause a trust fund to be maintained and/or arrange for insurance contracts. Subject to the provisions of the trust agreement governing any such trust fund or the insurance contract, the obligation of the Corporation under the Plan to provide a benefit shall nonetheless constitute the unsecured promise of the Corporation to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Corporation. Section 4. Payment of Benefits. Payment of any death benefit under the Plan shall be made to the decreased Participant's beneficiary in a single lump sum as soon as practicable after the Participant's death. Section 5. Beneficiaries. A Participant may designate any person or person as a beneficiary (hereinafter referred to as a "Beneficiary") to receive payment of the death benefit provided under the Plan. Such designation shall be made in writing in the form prescribed by the plan administrator and shall become effective only when filed by the Participant with the Corporation. A Participant may change or revoke his Beneficiary designation at any time by completing and filing with the Corporation a new Beneficiary designation. If at the time of the Participant's death there is no Beneficiary designation on file with the Corporation, or the Beneficiary does not survive to the date of distribution, the death benefit provided hereunder shall be paid to the Participant's estate. Section 6. Plan Administrator. The Corporation shall be the administrator of the Plan. The plan administrator shall perform all ministerial functions with respect to the Plan. The plan administrator shall employ such advisors or agents as it may deem necessary or advisable to assist it in carrying out its duties hereunder. The plan administrator shall have full power and authority to interpret and construe the Plan and shall determine all questions arising in the administration, interpretation, and application of the Plan. Any such determination shall be conclusive and binding on all persons. Section 7. Reduction or Termination of Benefits. The Committee reserves the right to reduce or eliminate the benefit of any Participant who is dismissed for cause, or who voluntarily terminates employment to obtain competitive employment. 2 For Plan purposes, "Cause" means (i) willful violation of a Corporation policy, or (ii) willful misconduct or gross negligence in the performance of duties, as determined by the Corporation in good faith consistently, if applicable, with its existing personnel practices. For Plan purposes, "Competitive employment" shall include employment with any employer (firm, business, or individual) engaged in selling or furnishing any product similar to that available from the Corporation at the time of termination of employment with the Corporation. Section 8. Employment. This Plan shall not constitute a contract of employment. Section 9. Severability. In the event any provision of the Plan is deemed invalid, such provision shall be deemed to be severed from the Plan, and the remainder of the Plan shall continue in full force and effect. Section 10. Governing Law. The provisions of the Plan shall be construed and enforced in accordance with the laws of the State of Ohio. Section 11. Effective Date. The Plan is effective as of June 1, 1990. 3 THE LUBRIZOL CORPORATION THE LUBRIZOL CORPORATION EXECUTIVE DEATH BENEFIT PLAN APPENDIX A December 12, 2005
PARTICIPANT COVERED PAY ----------- ----------- 1. W. G. Bares February 26, 2001 Covered Pay 2. J. L. Hambrick October 7, 2005 Covered Pay 3. G. R. Hill February 26, 2001 Covered Pay 4. J. E. Hodge February 26, 2001 Covered Pay 5. R. A. Andreas January 1, 1996 Covered Pay 6. R. Y. K. Hsu January 1, 1993 Covered Pay 7. W. D. Manning January 1, 1993 Covered Pay 8. R. J. Senz January 1, 1993 Covered Pay 9. P. L. Krug June 1, 1990 Covered Pay 10. J. A. Studebaker June 1, 1990 Covered Pay
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