<PAGE>
EXHIBIT 10.17
ARCH CHEMICALS, INC.
SENIOR MANAGEMENT INCENTIVE COMPENSATION PLAN
(As amended through February 9, 2005)
Section 1.
Purpose. The purposes of the Senior Management Incentive
Compensation Plan (the "Plan") are (i) to
compensate certain members of senior
management of Arch Chemicals, Inc. (the
"Company") on an individual basis for
significant contributions to the Company
and its subsidiaries and (ii) to
stimulate the efforts of such members by
giving them a direct financial interest
in the performance of the Company.
Section 2.
Definitions. The following terms utilized in this Plan shall
have the following meanings:
"Cash Flow" shall mean for a fiscal year EBITDA less capital
and
investment
spending and plus or minus changes in working capital
(excluding
the effect of any reclassifications to/from long-term assets
and
liabilities, current or deferred taxes) at the end of such
fiscal
year.
"Committee" shall mean the Compensation Committee of the Board
of
Directors
of the Company or such other committee of such Board as such
Board may
from time to time designate; provided only those members of the
Compensation Committee (or other Committee designated by such
Board) who
qualify as
"Outside Directors" as defined in Section 162(m) shall
constitute
members of the Committee for purposes of the Plan.
"Consolidated Net Assets" shall mean for a fiscal year
consolidated
total
assets less consolidated non-interest bearing liabilities at the
end
of such
fiscal year.
"Earnings Per Share" shall mean for a fiscal year the actual
diluted
earnings
per share at the end of such fiscal year calculated as the net
income
available to common stockholders excluding the impact of
extraordinary expenses or losses, losses on sale of businesses,
impairment
charges
and any special charges minus any extraordinary gains, gains on
sale of
businesses or sales not in the ordinary course of business
divided
by the
weighted average number of common stock plus any potential
dilutive
common
stock (such as stock options) outstanding at the end of such
fiscal
year.
"EBIT" shall mean for a fiscal year consolidated net income
(loss)
plus
income tax expense, interest expense (including costs incurred
on
accounts receivable
securitization program if not included in interest
expense),
extraordinary expenses or losses, losses on sale of businesses,
impairment
charges and any special charges minus interest income and
Lacerenz\d&o\Sr Mgmt Incen Comp
Plan
<PAGE>
2
any
extraordinary gains, gains on sale of businesses or sales not in
the
ordinary
course of business at the end of such fiscal year.
"EBITDA" shall mean for a fiscal year consolidated net income
(loss)
plus
income tax expense, interest expense (including costs incurred
on
accounts
receivable securitization program if not included in interest
expense),
depreciation, amortization, extraordinary expenses or losses,
losses on
sale of businesses, impairment charges and any special charges
minus
interest income and any extraordinary gains, gains on sale of
businesses
or sales not in the ordinary course of business at the end of
such
fiscal year.
"EBITDA Margins" shall mean for a fiscal year EBITDA (at the end
of
such
fiscal year) divided by consolidated net sales at the end of
such
fiscal
year.
"Operating Cash Flow" per share shall mean for a fiscal year the
net
operating
activities less the impact of the accounts receivable
securitization program divided by the weighted average number of
shares of
common
stock plus any potential dilutive shares of common stock (such
as
stock
options) outstanding at the end of such fiscal year.
"Operating Income" shall mean for a fiscal year consolidated
net
income
(loss) plus income tax expense, interest expense (including
costs
incurred
on accounts receivable securitization program if not included
in
interest
expense), extraordinary expenses or losses, losses on sale of
businesses, impairment charges and any special charges minus equity
in
earnings
of affiliated companies, interest income and any extraordinary
gains,
gains on sale of businesses or sales not in the ordinary course
of
business
at the end of such fiscal year.
"Operating Margins" shall mean for a fiscal year Operating
Income
(at the
end of such fiscal year) divided by consolidated net sales at
the
end of
such fiscal year.
"Participant" shall mean for a fiscal year, each salaried
employee
who is
designated as a Participant by the Committee prior to the
commencement of such fiscal year (or such later date, if any, as
permitted
by Section
162(m)); provided for 1999, the Committee shall designate the
Participants prior to April 1, 1999.
"Performance Measures" shall mean for a fiscal year any one or
combination of the following: "Earnings Per Share," "Profit
Margin,"
"Return on
Total Assets," "Cash Flow," "Return on Equity," "EBIT,"
"EBITDA,"
"Working Capital, "Operating Income, "Operating Margins,"
"EBITDA
Margins," "Operating Cash Flow," "Working Capital as a Percent
of
Net
Sales," "Return on Net Assets," and "Return on Capital" as the
Committee
determines from time to time with respect to such fiscal year;
provided
such determination would not subject any Incentive Award to
Section
162(m). A Performance Measures can also be used on a continuing
operations
basis instead of a total Company basis as determined by the
Committee.
Lacerenz\d&o\Sr Mgmt Incen Comp
Plan
<PAGE>
3
"Profit Margin" shall mean for a fiscal year consolidated EBIT
(at
the end of
such fiscal year) divided by consolidated net sales at the end
of such
fiscal year.
"Return on Capital" shall mean for a fiscal year consolidated
net
income
plus after-tax interest expense (including costs incurred on
accounts
receivable securitization program if not included in interest
expense)
and the after-tax effect of any extraordinary expenses or
losses,
special
charges or extraordinary gains, gains on the sale of businesses
or
sales not
in the ordinary course of business and any cumulative effect of
a change
in accounting principle (at the end of such fiscal year),
divided
by average
Consolidated Net Assets (the average calculated using
Consolidated Net Assets at the beginning and end of such fiscal
year).
"Return on Equity" shall mean for a fiscal year consolidated
net
income
before the after tax effect of any extraordinary expenses or
losses,
losses on sale of businesses, impairment charges, special
charges
or
extraordinary gains, gains on the sale of businesses or sales not
in
the
ordinary course of business and any cumulative effect of any change
in
accounting
principle (at the end of such fiscal year
