form8k_483797.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 24, 2015
ALBEMARLE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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Virginia
(State or Other
Jurisdiction of Incorporation)
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001-12658
(Commission File Number)
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54-1692118
(I.R.S. Employer
Identification Number)
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451 Florida Street, Baton Rouge, Louisiana 70801
(Address of Principal Executive Offices, including Zip Code)
Registrant’s Telephone Number, including Area Code: (225) 388-8011
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:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
2015 Base Salaries
On February 24, 2015, the Executive Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of Albemarle Corporation (the “Company”) established the following base salaries for certain executive officers for fiscal year 2015: Luther C. Kissam, IV ($840,000); Scott A. Tozier ($505,000); D. Michael Wilson ($470,000); Karen G. Narwold ($440,000); Matthew K. Juneau ($400,000); and Susan M. Kelliher ($395,000).
2015 Annual Incentive Plan
On February 24, 2015, the Committee approved the 2015 annual incentive plan target award percentages for certain executive officers of the Company, pursuant to the Albemarle Corporation 2008 Incentive Plan (as amended, the “Incentive Plan”). Under the Incentive Plan, each of these executive officers is eligible to receive an annual cash incentive payment of zero to three times a target percentage of their respective base salaries if certain company-wide criteria established by the Committee are met for 2015. The target percentages of base salary are as follows: Luther C. Kissam, IV (120%); Scott A. Tozier (75%); D. Michael Wilson (75%); Karen G. Narwold (70%); Matthew K. Juneau (70%) and Susan M. Kelliher (70%). These executive officers earn these targeted percentages for achieving target performance levels under the Incentive Plan company-wide criteria. For superior corporate performance, up to two times target may be earned. Further, based on specific individual performance goals, an additional amount may be earned up to the set maximum potential bonus. The maximum amounts payable for 2015 are as follows: Luther C. Kissam, IV ($3,024,000); Scott A. Tozier ($1,137,000); D. Michael Wilson ($1,059,000); Karen G. Narwold ($924,000); Matthew K. Juneau ($840,000); and Susan M. Kelliher ($831,000). In order to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended, in 2015, if earnings before interest, taxes, depreciation and amortization exceeds 5% of net sales, the awards are initially determined at maximum. The annual incentive awards actually paid to these executive officers are then adjusted to a level below the plan maximum in accordance with the actual Company performance, individual performance, and award targets described above. The Committee bases the annual incentive awards for named executive officers on performance measures allowed by the Incentive Plan and uses its negative discretion to pay incentive awards for the executives at the performance level achieved against the goals. Any incentive payments earned under the Incentive Plan for 2015 will be paid in the first quarter of 2016.
2015 Long Term Incentive Grant
On February 24, 2015, the Committee approved a total grant value of up to $24 million for the 2015 long term incentive plan, comprised of: (i) Stock Options, which will vest in three equal installments over three years beginning on February 24, 2018, and which will expire February 23, 2025; and (ii) Performance Stock Units (“PSUs”) vesting in early 2018 based on the Company’s total shareholder return (“Total Shareholder Return”) relative to its peers.
Total Shareholder Return is calculated by dividing (a) the sum of the dividends paid during the performance period and the difference between the twenty-day average daily closing price of the Company’s shares at the end and the beginning of the measurement period, by (b) the
twenty-day average daily closing price of the Company’s common shares at the beginning of the performance period. The Company’s Total Shareholder Return is compared to the Total Shareholder Return of the Company’s peer group of companies in the Dow Jones Chemical Index (the “Peer Group”) calculated on the same basis. The threshold performance level for the PSUs is at the 25th percentile of the Peer Group and the target performance level for the PSUs is the 50th percentile of the Peer Group. Superior performance level begins at the 75th percentile of the Peer Group results. Awards for performance between the specified performance levels will be interpolated.
Each of the grants listed above will be awarded to certain employees of the Company, and are subject to the terms set forth in the Notice of Option Grant (Exhibit 10.1) and Notice of TSR Performance Unit Award (Exhibit 10.2), all of which are incorporated by reference herein.
As part of the grants on February 24, 2015, the Committee granted Stock Options and PSUs to the Company’s named executive officers for 2015 under the Incentive Plan. The values granted to each executive officer are set forth below, and are apportioned approximately 40% in the form of Stock Options and 60% in the form of PSUs, respectively: Luther C. Kissam IV ($4,000,000); Scott A Tozier ($900,000); D. Michael Wilson ($800,000); Karen G. Narwold ($700,000); Matthew K. Juneau ($600,000); and Susan M. Kelliher ($500,000). The value of PSUs included in the above figures reflects the approximate number of PSUs that each named executive officer would receive for target level performance by the Company multiplied by the grant date closing stock price.
Item 9.01 Financial Statements and Exhibits
10.1 Notice of Option Grant
10.2 Notice of TSR Performance Unit Award
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
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ALBEMARLE CORPORATION
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Date: March 2, 2015
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By:
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/s/ Karen G. Narwold
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Karen G. Narwold
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Senior Vice President, General Counsel, Corporate and Government Affairs, Corporate Secretary
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Exhibit
Number
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Exhibit
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10.1
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Notice of Option Grant
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10.2
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Notice of TSR Performance Unit Award
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