ALBEMARLE CORPORATION

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 8, 2005

 


 

ALBEMARLE CORPORATION

(Exact name of Registrant as specified in charter)

 


 

Virginia   1-12658   54-1692118

(State or other jurisdiction

of incorporation)

  (Commission file number)  

(IRS employer

identification no.)

 

330 South Fourth Street, Richmond, Virginia   23219
(Address of principal executive offices)   (Zip code)

 

Registrant’s telephone number, including area code (804) 788-6000

 

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 (see General Instruction A.2. below):

 

¨ 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))

 



Section 1 — Registrant’s Business and Operations

 

Item 1.01 Entry into a Material Definitive Agreement.

 

Amendment and Restatement of Supplemental Executive Retirement Plan

 

Albemarle Corporation (the “Company”) has elected to amend its U.S. qualified retirement plan such that compensation used to determine a participant’s Final Average Compensation (as defined in the U.S. qualified retirement plan) will be frozen as of December 2010, except for those who retire after December 31, 2015 or December 2020 for whom Final Average Compensation will be frozen as of December 31, 2012 and December 31, 2014, respectively. On December 8, 2005, the Company amended and restated the Albemarle Corporation Supplemental Executive Retirement Plan (as amended and restated, the “SERP”). Some of the amendments to the SERP were made to ensure compliance with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), enacted as part of the American Jobs Creation Act of 2004 (“Code Section 409A”), which imposes new restrictions and requirements that must be satisfied in order to assure the deferred taxation of benefits as intended by the SERP. Generally, the amendments to the SERP, which are effective as of January 1, 2005, (1) freeze Final Average Compensation (as defined in the SERP) as of December 31, 2010 for participants who retire after December 31, 2010, other than for participants who retire after December 31, 2015 or December 31, 2020 for whom Final Average Compensation will be frozen as of December 31, 2012 and December 31, 2014, respectively, in conformance with the changes to the U.S. qualified retirement plan, (2) transfer all excess benefits that are linked to benefits under the Albemarle Savings Plan to the EDCP (as defined below), (3) require that payments to certain participants upon termination of employment must be delayed for six months after the termination, (4) provide that the time and form of benefits payable under the SERP must be set forth in the SERP as of the time the benefits are accrued, (5) separate benefits provided under the SERP into Excess Benefits (as defined in the SERP), Short Service Benefits (as defined in the SERP) and Supplemental Benefits (as defined in the SERP), (6) provide that Supplemental Benefits will be calculated in the same manner as Excess Benefits, except that Supplemental Benefits also take into account service with and compensation from Ethyl Corporation, (7) freeze Floyd D. Gottwald, Jr.’s benefits under the SERP as of December 31, 2002, but credit him with three additional years of service to the Company to reflect his continued service to the Company, and provide that his benefits under the SERP will be offset by his benefits payable under the Ethyl Corporation qualified and non-qualified retirement plans, (8) clarify that benefits commenced before January 1, 2005 will be calculated in accordance with the terms of the SERP in effect at the time the participant terminated employment, (9) provide that Excess Benefits, Short Service Benefits and Supplemental Benefits will be paid in a lump sum, other than the Supplemental Benefit for Floyd D. Gottwald, Jr., which will be paid as a life annuity and 100% survivor benefit with 60 monthly payments guaranteed, (10) provide that Supplemental Benefits shall be vested at all times and Short Service Benefits shall be vested upon a participant’s completion of five years of service or a Change in Control (as defined in the SERP), (11) provide that Supplemental and Short Service Benefits shall be paid on the later of age 55 (or 65 if the participant has not completed 10 years of service) or separation from service and (12) provide that in the event of a Change in Control, benefits shall be immediately paid if, within 24 months after the Change in Control, a participant’s employment is terminated by the Company or the participant resigns due to a change or diminution of responsibilities or compensation, a reduction of benefit level or eligibility, or refusal by a successor company to assume the participant’s severance agreement.

 

The preceding discussion is qualified in its entirety by reference to the terms of the SERP, which is attached hereto as Exhibit 10.1 and incorporated herein by reference.

 

Amendment and Restatement of Executive Deferred Compensation Plan

 

On December 8, 2005, the Company amended and restated the Albemarle Corporation Executive Deferred Compensation Plan (as amended and restated, the “EDCP”). Generally, the amendments to the EDCP were made to ensure compliance with Code Section 409A in order to assure the deferred taxation of benefits as intended by the EDCP. Code Section 409A is effective as to amounts deferred after 2004. The amendments to the EDCP, which are effective

 

2


as of January 1, 2005, (1) require that payments to certain participants upon termination of employment must be delayed for six months after the termination, (2) eliminate the ability of participants to receive accelerated distributions, (3) provide that any election to further defer payments must be made at least 12 months before the date the payment would otherwise be due and must be for at least an additional five years, (4) require that account balances under $50,000 at termination must be paid in a lump sum, (5) provide for a make-up of benefits under the Company’s qualified defined benefit and defined contribution plans that would otherwise be lost solely as a result of elective deferrals made under the EDCP and (6) provide that, upon termination of the EDCP, benefits under the EDCP may be paid out only if the Company terminates and pays out all benefits under all other non-qualified deferred compensation plans.

 

The preceding discussion is qualified in its entirety by reference to the terms of the EDCP, which is attached hereto as Exhibit 10.2 and incorporated herein by reference.

 

2006 Base Salaries

 

On December 8, 2005, the Executive Compensation Committee of the Company’s Board of Directors approved the following 2006 base salaries, which will become effective as of January 1, 2006, for the Company’s named executive officers (the “Named Executive Officers”): Mark C. Rohr, President and Chief Executive Officer ($825,000); John M. Steitz, Senior Vice President – Business Operations ($390,000); Richard J. Diemer, Jr., Senior Vice President and Chief Financial Officer ($375,000); Luther C. Kissam, IV, Vice President, General Counsel and Secretary ($325,000); William M. Gottwald, Chairman of the Board ($315,000); and George A. Newbill, Senior Vice President – Manufacturing Operations ($295,000).

 

2006 Incentive Plan Target Bonuses

 

On December 8, 2005, the Committee approved the 2006 target percentages for the executive officers of the Company, pursuant to the Company’s 2003 Incentive Plan (the “Incentive Plan”). Under the Incentive Plan, each of the Named Executive Officers is eligible to receive an annual cash incentive payment of 0 to two times a target percentage of their respective base salaries if certain criteria to be established by the Committee are met for 2006. The target percentages of base salary are as follows: Mark C. Rohr (80%); John M. Steitz (60%); Richard J. Diemer, Jr.(60%); Luther C. Kissam, IV (60%); William M. Gottwald (60%); and George A. Newbill (60%).

 

The Incentive Plan also contemplates the possibility of the payment of additional discretionary incentives to the Named Executive Officers, but only in the event that individual’s performance merits consideration of such additional incentives. Any incentive payments earned under the Incentive Plan for 2006 will be paid in the first quarter of 2007.

 

Section 9 — Financial Statements and Exhibits

 

Item 9.01. Financial Statement and Exhibits.

 

(c) Exhibits.

 

10.1    Amended and Restated Albemarle Corporation Supplemental Executive Retirement Plan, effective as of January 1, 2005.
10.2    Amended and Restated Albemarle Corporation Executive Deferred Compensation Plan, effective as of January 1, 2005.

 

3


SIGNATURE

 

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.

 

Date: December 14, 2005

 

ALBEMARLE CORPORATION
By:  

/s/ Luther C. Kissam, IV


    Luther C. Kissam, IV
    Vice President, General Counsel and Secretary

 

4


EXHIBIT INDEX

 

Exhibit
Number


 

Exhibit


10.1   Amended and Restated Albemarle Corporation Supplemental Executive Retirement Plan, effective as of January 1, 2005.
10.2   Amended and Restated Albemarle Corporation Executive Deferred Compensation Plan, effective as of January 1, 2005.

 

5

AMENDED AND RESTATED SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Exhibit 10.1

 

ALBEMARLE CORPORATION

 

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

As Amended and Restated

Effective January 1, 2005


TABLE OF CONTENTS

 

          Page

INTRODUCTION    1

ARTICLE I

  

    DEFINITIONS

   2

1.01

  

Actuarial Equivalent

   2

1.02

  

Affiliate

   2

1.03

  

Annuity Starting Date

   2

1.04

  

Beneficiary

   2

1.05

  

Board

   2

1.06

  

Code

   2

1.07

  

Committee

   2

1.08

  

Company

   2

1.09

  

Change in Control

   2

1.10

  

Disability or Disabled

   2

1.11

  

Eligible Employee

   2

1.12

  

Excess Benefit

   3

1.13

  

Executive Deferred Compensation Plan or EDCP

   3

1.14

  

Participant

   3

1.15

  

Plan

   3

1.16

  

Qualified Preretirement Survivor’s Annuity

   3

1.17

  

Retirement and Retire

   3

1.18

  

Retirement Plan

   3

1.19

  

Section 409A

   3

1.20

  

Short Service Benefit

   3

1.21

  

Supplemental Benefit

   3

1.22

  

Survivor Annuity means a benefit in the form of a life and 100% survivor annuity with 60 monthly payments guaranteed

   3

ARTICLE II

  

    PARTICIPATION

   4

ARTICLE III

  

    BENEFITS

   4

3.01

  

Amount of Benefit

   4

3.02

  

Death Benefits

   8

3.03

  

Timing and Form of Payment

   8

 

- i -


TABLE OF CONTENTS

(continued)

 

         Page

ARTICLE IV

 

    VESTING

   10

4.01

 

Vesting of Benefits

   10

ARTICLE V

 

    GUARANTEES

   10

ARTICLE VI

 

    TERMINATION, AMENDMENT OR MODIFICATION OF PLAN

   11

6.01

 

Plan Termination

   11

6.02

 

Notice Requirement

   11

6.03

 

Effect of Plan Termination

   11

ARTICLE VII

 

    OTHER BENEFITS AND AGREEMENTS

   11

ARTICLE VIII

 

    RESTRICTIONS ON TRANSFER OF BENEFITS

   12

ARTICLE IX

 

    ADMINISTRATION OF THE PLAN

   12

9.01

 

The Committee

   12

9.02

 

Indemnification of the Committee

   12

9.03

 

Powers of the Committee

   12

9.04

 

Information

   13

9.05

 

Claims Review Procedures

   13

ARTICLE X

 

    MISCELLANEOUS

   13

10.01

 

No Guarantee of Employment

   13

10.02

 

Binding Nature

   13

10.03

 

Governing Law

   13

10.04

 

Masculine and Feminine; Singular and Plural

   13

10.05

 

Section 409A

   14

ARTICLE XI

 

    ADOPTION

   14

APPENDIX I

       15

APPENDIX II

       16

 

- ii -


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

INTRODUCTION

 

Albemarle Corporation adopted the Albemarle Corporation Supplemental Executive Retirement Plan (the “Plan”) effective April 26, 2000. This Plan represents an amendment and restatement of the Albemarle Corporation Excess Benefit Plan and the Albemarle Corporation Supplemental Retirement Plan which were originally adopted by the Board on February 8, 1994. The Excess Benefit Plan and the Supplemental Retirement Plan were amended effective April 26, 2000, to simplify the Plans’ administration with respect to the calculation of benefits and to clarify the benefits provided to certain employees. In addition, effective as of April 26, 2000 the Excess Benefit Plan and the Supplemental Plan were merged. The resulting plan was renamed the Albemarle Corporation Supplemental Executive Retirement Plan.

 

The Board believes that the adoption of the Plan will assist it in attracting and retaining those employees, whose judgment, abilities and experience will contribute to the Company’s success.

 

The Plan is intended to be a plan that is unfunded and maintained primarily for the purpose of providing supplemental retirement benefits for a “select group of management or highly compensated employees” (as such phrase is used in the Employee Retirement Income Security Act of 1974, as amended). The Plan must be administered and construed in a manner that is consistent with that intent. The Plan is intended to comply with the provisions of Section 409A of the Code, and any and all rules and regulations promulgated thereunder.

 

The Plan provides the following benefits:

 

  1. The difference between (i) the employee’s accrued benefit under the Company’s tax-qualified defined benefit pension plan in light of the benefit limitations provided under Code section 415, and (ii) the full value of the benefits such employee would otherwise have received under such plan but for such limitation;

 

  2. The difference between (i) the employee’s accrued benefits under the Company’s tax-qualified defined benefit pension plan in light of the compensation cap provided under Code section 401(a)(17), and (ii) the full value of the benefits such employee would otherwise have received under such plan but for such limitation;

 

  3. Certain benefits lost as a result of deferrals under the Executive Deferred Compensation Plan.

 

  4. The Board also approved the provision of supplemental executive retirement benefits to designated executives whose relatively short service with the Company or an Affiliate would otherwise limit their career retirement benefits. To the extent an individual is specifically designated as entitled to these supplemental retirement benefits, those benefits are provided under this Plan.

 

1


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

ARTICLE I

 

DEFINITIONS

 

1.01 Actuarial Equivalent means a benefit of equivalent value based on the factors and assumptions employed in determining actuarial equivalencies to the normal form of benefit under the Retirement Plan.

 

1.02 Affiliate means any entity that is a member of a controlled group of corporations as defined in Code section 1563(a), determined without regard to Code sections 1563(a)(4) and 1563 (e)(3)(c), of which the Corporation is a member according to Code section 414(b), and which has, with the approval of the Board, adopted the Plan by action of its board.

 

1.03 Annuity Starting Date means the first day of the first month for which a benefit is payable under the Plan.

 

1.04 Beneficiary means the person or persons who are designated by Participant on a form provided by the Company for such purpose, to receive any benefits that may become payable under the Plan after the death of the Participant. In the absence of a designation of a Beneficiary or in the event a Participant’s designated Beneficiary predeceases him or her, the Participant’s Beneficiary shall be his or her spouse, or if there is no spouse, the Participant’s estate.

 

1.05 Board means the Board of Directors of Albemarle Corporation.

 

1.06 Code means the Internal Revenue Code of 1986, as amended.

 

1.07 Committee means the Employee Relations Committee of the Company or any successor committee, which shall, in accordance with the provisions of Article IX hereof, be responsible for the management and administration of the Plan.

 

1.08 Company means Albemarle Corporation.

 

1.09 Change in Control is defined in Appendix II attached hereto.

 

1.10 Disability or Disabled shall mean a Participant’s inability to engage in any substantial gainful activity because of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of twelve (12) months or longer.

 

1.11 Eligible Employee means an individual employed by the Company or an Affiliate who is in a select group of management or is a highly compensated employee of the Company and its Affiliates. An individual shall remain an Eligible Employee only so long as the individual remains in such select management group or continues to be highly compensated.

 

2


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

1.12 Excess Benefit means the benefit, if any, that a Participant becomes entitled to pursuant to Section 3.01(a) of this Plan.

 

1.13 Executive Deferred Compensation Plan or EDCP means the Albemarle Corporation Executive Deferred Compensation Plan, as amended from time to time.

 

1.14 Participant means, so long as he remains so designated or to the extent he has accrued a vested benefit under the Plan, an Eligible Employee who becomes a participant in the Plan in accordance with Article II.

 

1.15 Plan means this Plan which restates and amends the Albemarle Corporation Supplemental Executive Retirement Plan, which is a result of the April 26, 2000, merger of the Albemarle Corporation Supplemental Retirement Plan and the Albemarle Corporation Excess Benefit Plan, as amended from time to time.

 

1.16 Qualified Preretirement Survivor’s Annuity means the monthly benefit payable to the surviving spouse, if any, on the death of a Participant prior to his Annuity Starting Date in the form determined under Section 7.01(c)(1) or (2) of the Retirement Plan, as applicable.

 

1.17 Retirement and Retire mean separation from employment with the Company or an Affiliate at or after satisfying the requirements for retirement or early retirement under the terms of the Retirement Plan and the commencement of benefits thereunder.

 

1.18 Retirement Plan means the Albemarle Corporation Pension Plan, as amended from time to time.

 

1.19 Section 409A means Section 409A of the Code and any and all rules and regulations promulgated thereunder.

 

1.20 Short Service Benefit means the benefit, if any, that a Participant becomes entitled to pursuant to the provisions of Section 3.01(b) of this Plan.

 

1.21 Supplemental Benefit means the benefit, if any, that a Participant becomes entitled to pursuant to the provisions of Section 3.01(c) of the Plan.

 

1.22 Survivor Annuity means a benefit in the form of a life and 100% survivor annuity with 60 monthly payments guaranteed.

 

3


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

ARTICLE II

 

PARTICIPATION

 

Each Eligible Employee shall automatically become a Participant in the Plan, with respect to the Excess Benefits provided under Plan section 3.01(a), as of the date such Employee’s benefit under the Retirement Plan is first limited by Code section 401(a)(17) and/or 415 or, if earlier, the Eligible Employee makes a deferral under the EDCP. An Eligible Employee recommended by the Company’s Executive Committee and approved by the Executive Compensation Committee shall become a Participant in the Plan, with respect to the Short Service Benefit provided under Plan section 3.01(b) or the Supplemental Benefit provided under Plan Section 3.01(c), as of the effective date designated by the Company’s Executive Committee. An Eligible Employee who becomes a Participant with respect to a benefit under Plan section 3.01(b) or 3.01(c), shall continue to participate in the Plan with respect to such benefit until such date as the Company’s Executive Committee may declare the individual in question no longer eligible to participate.

 

ARTICLE III

 

BENEFITS

 

3.01 Amount of Benefit.

 

Subject to the limitations set forth in Articles IV (Vesting), V (Guarantees) and VI (Termination, Amendment, or Modification of Plan), the benefits of a Participant and his Beneficiary shall be as follows:

 

(a) Excess Benefits. A Participant shall be entitled to Excess Benefits under this Plan as follows:

 

  (i) A Participant shall be entitled to a benefit equal to the difference between (A) the benefits that accrue to the Participant under the Retirement Plan and (B) the benefits the Participant would have accrued under the Retirement Plan but for the application of Code section 415 (the annual limit on benefits under the Retirement Plan ($170,000 for 2005)).

 

  (ii) A Participant shall be entitled to a benefit equal to the difference between (A) the benefits the Participant would have accrued under the Retirement Plan but for (i) the application of the limits set forth in Code section 401(a)(17) (the annual limit on compensation taken into account under the Retirement Plan ($210,000 for 2005)) and (ii) any deferrals made by the Participant under the EDCP, and Code section 415, as applicable, and (B) the benefits that accrued to the Participant under the Retirement Plan.

 

  (iii) In no event shall a Participant accrue a duplicate benefit attributable to the same service or compensation under paragraphs (i) and (ii).

 

4


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

(b) Short Service Benefits. A Participant shall be entitled to a Short Service Benefit under this Plan as follows:

 

  (i) Participants who have completed five years of service with the Company or an Affiliate (including service with Ethyl Corporation or one of its affiliates) and who are specifically designated for this purpose, in accordance with Article II shall also accrue an additional benefit hereunder equal to (A) minus (B) below, where:

 

(A) is a benefit equal to the product of 4% times the Participant’s total years of service with the Company or an Affiliate (up to a maximum of fifteen) payable as a life annuity and 5 year certain form of benefit, expressed in years and fractions of years and measured in cumulative monthly increments from the Participant’s initial date of employment, excluding any intervening period during which the Participant was not in the employ of the Company or an Affiliate, times the Participant’s Final Average Compensation; and

 

(B) equals the sum of the Actuarial Equivalents as of the time benefits are paid, of:

 

(I) the Participant’s employer-provided Retirement Plan benefit;

 

(II) 100% of the Participant’s Primary Social Security Benefit payable at his Social Security Retirement Age, as determined under the provisions of the Social Security Act in effect at the date of the occurrence triggering the determination, assuming that the Participant had continued in the employ of the Company at the annual base salary he was earning at the time such event occurred until what would have been his Social Security Retirement Age (provided, however, that in the event of a Change in Control, the offset under this subparagraph (II) shall not apply to any Participant who has completed fewer than 10 years of service at the time of the Change in Control);

 

(III) the benefit accrued by the Participant under Plan section 3.01(a)(i); and

 

(IV) the benefit accrued by the Participant under Plan Section 3.01(a)(ii).

 

(c) Supplemental Benefits

 

For any Participant who is specifically designated by the Company, such Participant shall be entitled to a Supplemental Benefit under this Plan as follows:

 

5


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

  (i) The Participant’s Supplemental Benefit shall be calculated under Plan Sections 3.01(a)(i) and (ii) based on the formula under the Retirement Plan, and using the Participant’s service and compensation with Ethyl Corporation and the Company.

 

  (ii) Except as otherwise provided on Appendix I, benefits payable under this Section 3.01(c) shall be offset by any benefits payable under the qualified retirement plans sponsored by Ethyl Corporation and the Company and any benefits payable under non-qualified retirement plans sponsored by Ethyl Corporation and the Company.

 

  (iii) With regard to the Participants indicated on Appendix I, the benefit determined under this paragraph (c) shall be frozen as of December 31, 2002, provided, however, the frozen benefit shall include an additional three years of service.

 

(d) Special Rules on Final Average Compensation.

 

  (i) For purposes of determining a Participant’s benefit under Plan Section 3.01(b), Final Average Compensation means, effective April 26, 2000, for a Participant as of any date, one-third of the sum of (i) the Participant’s annual base salary and (ii) 100% of any annual cash bonus paid pursuant to the Albemarle Corporation 1998 Incentive Plan (or any successor Plan) and (iii) the value (as of January 31, 2002) of any vested Restricted Incentive Units awarded pursuant to the Restricted Incentive Unit Award Agreement between the Company and the Participant dated January 31, 2002 (“1/31/02 Agreement”), which salary and bonus are received by the Participant and which vested Restricted Incentive Units were granted, during the three consecutive highest paid calendar years of employment by the Company or an Affiliate during the ten consecutive calendar years or the total period of employment, if less, immediately preceding the date of the event the occurrence of which triggers the determination.

 

  (ii) Effective December 31, 2010, for Participants who retire on or after December 31, 2010, for purposes of determining such Participants’ benefits under this Plan, the amount of each Participant’s Final Average Compensation shall be frozen as of December 31, 2010; provided, however, that, for Participants who retire on or after December 31, 2015, such Participants’ Final Average Compensation shall be determined as of December 31, 2012, and for Participants who retire on or after December 31, 2020, such Participants’ Final Average Compensation shall be determined as of December 31, 2014.

 

6


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

  (iii) For purposes of determining Excess Benefits under Section 3.01(a), for Participants whose Final Average Compensation is limited under the provisions of Code Section 401(a)(17), Final Average Compensation as of December 31, 2010, December 31, 2012 or December 31, 2014, as applicable, shall be determined based on the applicable Code Section 401(a)(17) limit in effect on the relevant benefit determination date, but not in excess of the Participant’s total Compensation (without regard to the Code Section 401(a)(17) limit) as of December 31, 2010, December 31, 2012 or December 31, 2014, as applicable.

 

(e) For purposes of determining a Participant’s accrued benefits under this Plan section 3.01:

 

  (i) compensation and benefits shall be calculated without regard to any elections by a Participant to defer any amount under the Executive Deferred Compensation Plan that otherwise would have been paid to the Participant for the relevant period in the absence of such an election.

 

  (ii) compensation used in the calculation of benefits that the Participant would have accrued under the Retirement Plan but for the limitations of Sections 401(a)(17) and 415 of the Code, shall include (a) the income recognized on account of a bonus (whether in the form of cash or other property) granted to such Participant on April 24, 1996, who was a full-time employee of the Company on such date, and any cash payment made by the Company to reimburse the Participant for the federal and state income taxes resulting from such income recognition, and (b) fifty percent (50%) of the value of any vested Restricted Incentive Units awarded pursuant to the 1/31/02 Agreement, provided that the value of such vested Restricted Incentive Units shall be determined and included as compensation for purposes of this paragraph (d) for the year in which such Units were granted.

 

(f) A Participant shall accrue benefits under this Plan section 3.01, as applicable, from the effective date of his eligibility to participate in the Plan through the date of his death, Disability or Retirement or other separation from service or the date he is notified by the Company’s Executive Committee that he is no longer eligible to participate.

 

(g) For Participants whose employment was terminated and Plan benefits commenced prior to 2005, such Participants’ benefits have been calculated under the terms of the Plan as in effect when they terminated employment.

 

7


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

3.02 Death Benefits

 

(a) With respect to the vested Excess Benefits accrued by a Participant under Plan section 3.01(a), if a Participant dies prior to what would have been his Annuity Starting Date under the Retirement Plan, the Participant’s surviving spouse, if any, shall be entitled to a benefit equal to a Qualified Preretirement Survivor’s Annuity under the Retirement Plan. Benefits payable under this paragraph (a) shall be paid to the surviving spouse in a lump sum payment on what would have been the Participant’s earliest early retirement date under the Retirement Plan.

 

(b) With respect to a Participant’s vested Short Service Benefits and Supplemental Benefits accrued under Plan sections 3.01(b) and 3.01(c), if such Participant dies prior to payment of his Benefit hereunder, the Participant’s surviving spouse, if any, shall be paid a benefit that is a 100% survivor’s annuity based on the Participant’s accrued benefit under the Plan as of his date of death calculated using the actuarial assumptions and methods set forth in the Retirement Plan. Short Service and Supplemental Benefits payable under this paragraph (b) shall be paid in a lump sum on the date the Participant would have attained age 55, provided, however, that if, at the time of death, the Participant had not yet completed ten years of service with the Company (or, for the Supplemental Benefit, Ethyl Corporation), then the benefit hereunder shall be paid on the date the Participant would have attained age 65. In the event a Participant subject to this paragraph (b) has no surviving spouse, no death benefit shall be paid under this Plan.

 

(c) In the event of a Participant’s death after his Annuity Starting Date the following rules shall apply: (i) with respect to Supplemental Benefits being paid in the form of a Survivor Annuity, benefits shall be paid to the individual (designated at the time benefits commence) to receive the 100% survivor annuity, and upon the death of the survivor annuitant, or in the event such annuitant does not survive the Participant, no additional benefit shall be paid unless the Participant (and survivor annuitant) had not yet received payments for the guaranteed 60 months of payments, in which latter event payments for the remainder of the 60 month period shall be made to the Participant’s Beneficiary, and (ii) any Benefits that should have been paid to the Participant but had not been paid as of the date of the Participant’s death shall be paid in a lump sum to the Participant’s personal representative, determined in accordance with state law.

 

(d) For purposes of this Section 3.02, a lump sum shall be calculated using (i) a discount rate equal to the discount rate used by the Company for pension expense purposes for the year in which the lump sum is being calculated, and (ii) the mortality table used for pension expense purposes for such year.

 

3.03 Timing and Form of Payment

 

(a) Excess Benefits. Vested Excess Benefits under this Plan shall be paid on the later of (i) the date the Participant’s benefits commence under the Retirement Plan, or (ii) the first day of the month following the Participant’s separation from service, provided, however, that if the Participant is a Key Employee (as such term is defined in Section 409A) Excess Benefits shall in

 

8


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

no event be paid prior to six months after the Participant’s separation from service. Prior to February 1, 2006, Excess Benefits shall be paid in the same form and for the same period as benefits are paid under the Retirement Plan. Effective February 1, 2006, Excess Benefits (other than those for which payment has already commenced) shall be paid in a lump sum.

 

(b) Short Service Benefits. Vested Short Service Benefits shall be paid in a lump sum on the later of (i) the first day of the month coincident with or next following the Participant’s fifty-fifth birthday (provided, however, that if the Participant has not either completed 10 years of service for the Company or become Disabled, then the Participant’s sixty-fifth birthday), and (ii) the first day of the month following the Participant’s separation from service, provided, however, that if the Participant is a Key Employee (as such term is defined in Section 409A) Short Service Benefits under this subparagraph (ii) shall be paid no earlier than six months after the Participant’s separation from service.

 

(c) Supplemental Benefits. Supplemental Benefits shall be paid on the later of (i) the first day of the month coincident with or next following the Participant’s fifty-fifth birthday (provided, however, that if the Participant has not completed 10 years of service for the Company (or Ethyl Corporation), then Participant’s sixty-fifth birthday) and (ii) the first day of the month following the Participant’s separation from service, provided, however, that if the Participant is a Key Employee (as such term is defined in Section 409A) Supplemental Benefits under this subparagraph (ii) shall be paid no earlier than six months after the Participant’s separation from service. Supplemental Benefits shall be paid in a lump sum payment except that with respect to Participants designated on Appendix I, such Participants’ Benefits shall be paid as a Survivor Annuity.

 

(d) Change in Control. Notwithstanding any of the foregoing, in the event there is a Change in Control and a Participant’s employment is terminated within 24 months after the Change in Control due to (i) termination by the Company, (ii) a change or diminution of responsibilities or compensation, (iii) a reduction of benefit level or eligibility, or (iv) refusal by a successor company to assume the Participant’s Severance Agreement with the Company (provided, however, that the Participant’s termination of employment need not be limited to one of the circumstances listed in (i) through (iv) if it is determined that such limitation violates Section 409A), the Participant’s benefits shall be paid in a lump sum payment upon the termination of employment.

 

(e) Lump Sums. For purposes of this Section 3.03, a lump sum shall be calculated using (i) a discount rate equal to the discount rate used by the Company for pension expense purposes for the year in which the lump sum is being calculated, and (ii) the mortality table used for pension expense purposes for such year.

 

9


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

ARTICLE IV

 

VESTING

 

4.01 Vesting of Benefits

 

A Participant shall vest in his benefits under this Plan as follows:

 

(a) Excess and Supplemental Benefits. A Participant’s right to receive an Excess Benefit under Plan section 3.01(a) and a Supplemental Benefit under Plan Section 3.01(c), exists only if his employment terminates at a time or as a result of an event that would have caused such benefit to vest under the terms of the Retirement Plan, while the Plan is in effect and the Participant remains designated as a Participant.

 

(b) Short Service Benefits. No Short Service Benefits under Plan section 3.01(b) shall be vested unless the Participant has completed five years of service with the Company.

 

(c) Death. In the event a Participant dies prior to vesting in his Excess, Short Service or Supplemental Benefits under this Plan, no benefits shall be payable under this Plan.

 

(d) Forfeitures for Inappropriate Conduct. Notwithstanding any of the foregoing, a Participant shall forfeit all benefits from the Plan if the Committee determines, in its sole discretion, that his employment is terminated as a result of fraud, dishonesty, conviction of or pleading guilty to a felony, or embezzlement from the Company or an Affiliate. Further, in the event the Committee determines, in its sole discretion, that a Participant who has separated from service for any reason is guilty of fraud, or dishonesty against the Company or an Affiliate or is convicted of or pleads guilty to a felony against or embezzlement from the Company or an Affiliate shall forfeit his entitlement to any further payments or benefits under the Plan.

 

(e) Change in Control. Notwithstanding any of the foregoing, in the event of a Change in Control, all Benefits shall be fully vested.

 

ARTICLE V

 

GUARANTEES

 

Albemarle Corporation and any Affiliate participating in the Plan has only a contractual obligation to pay the benefits described in Article III. All benefits are to be satisfied solely out of the general corporate assets of the Company or the appropriate Affiliate which shall remain subject to the claims of its creditors. No assets of the Company or a participating Affiliate will be segregated or committed to the satisfaction of its obligations to any Participant or Beneficiary under this Plan. If the Company in its sole discretion, elects to purchase life insurance on the life of a Participant in connection with the Plan, the Participant must submit to a physical examination, if required by the insurer, and otherwise cooperate in the issuance of such policy or his rights under the Plan will be forfeited.

 

10


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

ARTICLE VI

 

TERMINATION, AMENDMENT OR MODIFICATION OF PLAN

 

6.01 Plan Termination

 

Except as otherwise specifically provided, the Company reserves the right to terminate, amend or modify this Plan, wholly or partially, at any time and from time to time. Any such termination, amendment or change may not affect or alter the benefits paid or obligations to any employee who died, became Disabled or Retired before the termination, amendment, or change or whose benefits vested in accordance with Article IV. Such right to terminate, amend or modify the Plan shall be exercised for the Company either by its Board or Executive Compensation Committee.

 

6.02 Notice Requirement

 

(a) Plan section 6.01 notwithstanding, no action to terminate the Plan shall be taken except upon written notice to each Participant to be affected thereby.

 

(b) Any notice which shall be or may be given under the Plan shall be in writing and shall be mailed by United States mail, postage prepaid. If notice is to be given to the Company, such notice shall be addressed to it at Post Office Box 1335, Richmond, Virginia 23218; addressed to the attention of the Corporate Secretary. If notice is to be given to a Participant, such notice shall be addressed to the Participant’s last known address.

 

6.03 Effect of Plan Termination

 

Except as provided in Plan section 6.01, upon the termination of this Plan by the Board or Executive Compensation Committee, the Plan shall no longer be of any further force or effect, and, except as provided in Plan section 6.01, neither the Company nor any Participant shall have any further obligation or right under this Plan. Likewise, except to the same extent protected in the event of termination, amendment or modification of the Plan, the rights of any individual who was a Participant and who is declared by the Committee to be no longer eligible shall cease upon such action.

 

ARTICLE VII

 

OTHER BENEFITS AND AGREEMENTS

 

The benefits provided for a Participant and his Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program of the Company or a participating Affiliate for its employees, and, except as may otherwise be expressly provided for, the Plan shall supplement and shall not supersede, modify or amend any other plan or program of the Company or a participating Affiliate in which a Participant is participating.

 

11


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

ARTICLE VIII

 

RESTRICTIONS ON TRANSFER OF BENEFITS

 

No right or benefit under the Plan shall be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or charge, and any attempt to do so shall be void. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities, or torts of the person entitled to such benefit. If any Participant or Beneficiary under the Plan should become bankrupt or attempt to anticipate, alienate, sell, assign, pledge, encumber or charge any right to a benefit hereunder, then such right or benefit, in the discretion of the Committee, shall cease and terminate, and, in such event, the Committee may hold or apply the same or any part thereof for the benefit of such Participant or Beneficiary, his or her spouse, children, or other dependents, or any of them, in such manner and in such portion as the Committee may deem proper.

 

ARTICLE IX

 

ADMINISTRATION OF THE PLAN

 

9.01 The Committee

 

The Plan shall be administered by the Committee. Subject to the provisions of the Plan, the Committee may adopt such rules and regulations as may be necessary to carry out the purposes hereof. The Committee’s interpretation and construction of any provision of the Plan shall be final and conclusive.

 

9.02 Indemnification of the Committee

 

The Company shall indemnify and save harmless each member of the Committee against any and all expenses and liabilities arising out of his membership on the Committee, excepting only expenses and liabilities arising out of his own willful misconduct. Expenses against which a member of the Committee shall be indemnified hereunder shall include without limitation, the amount of any settlement or judgment, costs, counsel fees, and related charges reasonably incurred in connection with a claim asserted, or a proceeding brought or settlement thereof. The foregoing right of indemnification shall be in addition to any other rights to which any such member may be entitled.

 

9.03 Powers of the Committee

 

In addition to the powers hereinabove specified, the Committee shall have the power to compute and certify the amount and kind of benefits from time to time payable to Participants, and Beneficiaries under the Plan, and to authorize all disbursements for such purposes.

 

12


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

9.04 Information

 

To enable the Committee to perform its functions, the Company and any participating Affiliate shall supply full and timely information to the Committee on all matters relating to the compensation of all Participants, their retirement, death or other cause for termination of employment, and such other pertinent facts as the Committee may require.

 

9.05 Claims Review Procedures

 

The benefit claims review procedure set forth in the Retirement Plan, as amended from time to time, is incorporated herein by reference and made applicable to the Plan.

 

ARTICLE X

 

MISCELLANEOUS

 

10.01 No Guarantee of Employment

 

The Plan does not in any way limit the right of the Company or any participating Affiliate at any time and for any reason to terminate the employment of a Participant in its employ. In no event shall the Plan, by its terms or by implication, constitute an employment contract of any nature whatsoever between the Company and a Participant.

 

10.02 Binding Nature

 

The Plan shall be binding upon the Company, any participating Affiliate and successors and assigns, and, subject to the powers set forth in Article VI, upon a Participant’s, his Beneficiary’s or any of their assigns, heirs, executors and administrators.

 

10.03 Governing Law

 

To the extent not preempted by federal law, the Plan shall be governed and construed under the laws of the Commonwealth of Virginia (including its choice-of-law rules, except to the extent those laws would require the application of the law of a state other than Virginia) as in effect from time to time.

 

10.04 Masculine and Feminine; Singular and Plural

 

Masculine pronouns wherever used shall include feminine pronouns and the use of the singular shall include the plural.

 

13


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

10.05 Section 409A

 

Notwithstanding any other provision of this Plan, it is intended that all post-2004 benefits under this Plan satisfy the provisions of Section 409A and this Plan shall be interpreted and administered, as necessary, to comply with such provisions.

 

ARTICLE XI

 

ADOPTION

 

The Company has adopted this Plan pursuant to action taken by the Board. With the approval of the Board, any Affiliate may adopt this Plan by action of its board of directors.

 

As evidence of its adoption of the Plan, Albemarle Corporation has caused this document to be signed by its duly authorized officer, this      day of                         , 2005, and made effective as of January 1, 2005.

 

ALBEMARLE CORPORATION

By:

 

 


 

14


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

APPENDIX I

 

PARTICIPANTS DESIGNATED FOR PLAN SECTIONS 3.01(b)(i) and 3.01(c)

 

Plan Section


  

Name


   Service Date

3.01(b)(i)

  

Mark C. Rohr

   3/22/1999

3.01(b)(i)

  

Jack P. Harsh

   11/16/1998

*3.01(c)

  

Floyd D. Gottwald

   3/1/1996

**3.01(c)

  

William M. Gottwald

   9/1/1996

3.01(b)(i)

  

John M. Steitz

   7/1/2000

3.01(b)(i)

  

George P. Manson, Jr.

   5/1/2001

3.01(b)(i)

  

Scott A. Martin

   7/1/2001

3.01(b)(i)

  

Paul F. Rocheleau

   6/17/2002

3.01(b)(i)

  

Luther C. Kissam, IV

   10/1/2003

 

(Last amended per action of the Executive Compensation Committee effective 10/1/2003.)


* Floyd D. Gottwald’s benefit was frozen in accordance with Section 3.01(c)(iii) of the Plan; when payable, his benefit shall be paid in the form of a Survivor Annuity.
** William M. Gottwald’s benefit shall not be offset by his benefit under any of the Ethyl Corporation plans, nor shall his benefit be frozen in accordance with Section 3.01(c)(iii) of the Plan.

 

15


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

APPENDIX II

 

Albemarle Corporation

Change In Control Provision

 

1. Change in Control means the occurrence of any of the following events:

 

(a) any Person, or “group” as defined in section 13(d)(3) of the Securities Exchange Act of 1934 (excluding Floyd D. Gottwald, members of his family and any Affiliate), becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding Albemarle securities that are entitled to vote generally for the election of Albemarle’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by Albemarle approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made);

 

(b) as the direct or indirect result of, or in connection with, a reorganization, merger, share exchange or consolidation (a “Business Combination”), a contested election of directors, or any combination of these transactions, Continuing Directors cease to constitute a majority of Albemarle’s board of directors, or any successor’s board of directors, within two years of the last of such transactions;

 

(c) the shareholders of Albemarle approve a Business Combination, unless immediately following such Business Combination, (1) all or substantially all of the Persons who were the Beneficial Owners of the Voting Securities outstanding immediately prior to such Business Combination Beneficially Own more than 70% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns Albemarle through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (ii) no Person (excluding Floyd D. Gottwald, members of his family and any Affiliate and any employee benefit plan or related trust of Albemarle or the Company resulting from such Business Combination) Beneficially Owns 30% or more of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Company resulting from such Business Combination and (iii) at least a majority of the members of the board of directors of the Company resulting from such Business Combination are Continuing Directors.

 

2. Definitions

 

(a) Affiliate and Associate shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended and as in effect on the date of this Agreement (the “Exchange Act”).

 

16


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

(b) Albemarle means Albemarle Corporation.

 

(c) Beneficial Owner means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities:

 

(i) that such Person or any of such Person’s Affiliates or Associates owns, directly or indirectly;

 

(ii) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to acquire (whether such right is exercisable immediately or only after the passage of time) pursuant to any agreement, arrangement or understanding (whether or not in writing) or upon the exercise of conversion rights, exchange rights, rights, warrants or options, or otherwise; provided, however, that, a Person shall not be deemed to be the “Beneficial Owner” of, or to “beneficially own,” securities tendered pursuant to a tender or exchange offer made by such Person or any such Person’s Affiliates or Associates until such tendered securities are accepted for purchase or exchange;

 

(iii) that such Person or any of such Person’s Affiliates or Associates, directly or indirectly, has the right to vote, including pursuant to any agreement, arrangement or understanding, whether or not in writing; provided, however, that a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this subsection as a result of an agreement, arrangement or understanding to vote such security if such agreement, arrangement or understanding: (1) arises solely from a revocable proxy given in response to a public proxy solicitation made pursuant to, and in accordance with the applicable provisions of the General Rules and Regulations under the Exchange Act and (2) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or

 

(iv) that are beneficially owned, directly or indirectly, by any other Person (or any Affiliate or Associates thereof) with which such Person (or any of such Person’s Affiliates or Associates) has any agreement, arrangement or understanding (whether or not in writing), for the purpose of acquiring, holding, voting (except pursuant to a revocable proxy as described in ‘the proviso to subsection (iii) of this definition) or disposing of any voting securities of Albemarle provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter of securities who acquires any securities of Albemarle through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933, shall not be deemed the “Beneficial Owner” of, or to “beneficially own,” such securities until the expiration of forty days after the date of acquisition; and provided, further, that in no case shall an officer or director of Albemarle be deemed (1)’ the beneficial owner of any securities beneficially owned by another officer or director of Albemarle solely by reason of actions undertaken by such persons in their capacity as officers or directors of Albemarle; or (2) the beneficial owner of securities held of record

 

17


Albemarle Corporation

Supplemental Executive Retirement Plan

As Amended and Restated Effective January 1, 2005

 

by the trustee of any employee benefit plan of Albemarle or any Subsidiary of Albemarle for the benefit of any employee of Albemarle or any Subsidiary of Albemarle, other than the officer or director, by reason of any influences that such officer or director may have over the voting of the securities held in the trust.

 

(d) Company means Albemarle or any successor thereto.

 

(e) Continuing Director means any member of Albemarle’s Board, while a member of that Board, and (i) who was a member of Albemarle’s Board prior to April 27, 2000, or (ii) whose subsequent nomination for election or election to Albemarle’s Board was recommended or approved by a majority of the Continuing Directors.

 

(f) Control Change Date means the date on which an event described in paragraph 1 occurs. If a Change in Control occurs on account of a series of transactions, the Control Change Date is the date of the last of such transactions.

 

(g) Person means any individual, firm, company, partnership or other entity.

 

(h) Subsidiary means, with references to any Person, any company or other entity of which an amount of voting securities sufficient to elect a majority of the directors or Persons having similar authority of such company or other entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person.

 

18

AMENDED AND RESTATED EXECUTIVE DEFERRED COMPENSATION PLAN

Exhibit 10.2

 

ALBEMARLE CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

 

As Amended and Restated January 1, 2005


TABLE OF CONTENTS

 

         Page

ARTICLE I

 

    PURPOSE AND EFFECTIVE DATE

   1

ARTICLE II

 

    DEFINITIONS

   1

2.1

 

Account

   1

2.2

 

Administrative Committee

   2

2.3

 

Beneficiary

   2

2.4

 

Board

   2

2.5

 

Company

   2

2.6

 

Deferral Election

   2

2.7

 

Disability

   2

2.8

 

Elected Deferred Compensation

   3

2.9

 

Employer

   3

2.10

 

Financial Hardship

   3

2.11

 

Hardship Distribution

   3

2.12

 

Participant

   3

2.13

 

Participation Agreement

   3

2.14

 

Plan

   4

2.15

 

Plan Year

   4

2.16

 

Retirement

   4

2.17

 

Retirement/Termination Account

   4

2.18

 

Scheduled Withdrawal

   4

2.19

 

Scheduled Withdrawal Account

   4

2.20

 

Settlement Date

   4

2.21

 

Small Account

   5

2.22

 

Valuation Date

   5

ARTICLE III

 

    PARTICIPATION, DEFERRALS AND ADDITIONAL BENEFITS

   5

3.1

 

Eligibility and Participation

   5

3.2

 

Basic Forms of Deferral

   6

3.3

 

Commencement and Duration of Deferral Election

   6

3.4

 

Modification of Deferral Elections

   7

3.5

 

Supplemental Savings Benefit

   7

3.6

 

Supplemental Pension Benefit

   8

 

-i-


TABLE OF CONTENTS

(continued)

 

          Page

3.7

  

Short Service Credit

   8

3.8

  

Pension Credit for Former Akzo Nobel Employees (acquisition effective August 1, 2004)

   9

ARTICLE IV

  

    COMPENSATION ACCOUNTS

   10

4.1

  

Accounts

   10

4.2

  

Crediting of Deferrals

   10

4.3

  

Retirement/Termination Account

   11

4.4

  

Scheduled Withdrawal Account

   11

4.5

  

Vesting of Accounts

   11

4.6

  

Statement of Accounts

   11

4.7

  

Valuation of Accounts

   12

ARTICLE V

  

    INVESTMENT AND EARNINGS

   12

5.1

  

Plan Investments

   12

5.2

  

Crediting Investment Gains and Losses

   12

ARTICLE VI

  

    PLAN BENEFITS

   13

6.1

  

Retirement Benefit

   13

6.2

  

Termination Benefit

   14

6.3

  

Death Benefit

   14

6.4

  

Disability Benefit

   15

6.5

  

Small Account

   15

6.6

  

Scheduled Withdrawal

   15

6.7

  

Hardship Distribution

   16

6.8

  

Valuation and Settlement

   17

6.9

  

Withholding and Payroll Taxes

   17

6.10

  

Payment to Guardian

   18

6.11

  

Change of Payment Form or Commencement Date

   18

ARTICLE VII

  

    DESIGNATION

   19

7.1

  

Beneficiary Designation

   19

7.2

  

Changing Beneficiary

   19

7.3

  

No Beneficiary Designation

   19

7.4

  

Effect of Payment

   19

 

-ii-


TABLE OF CONTENTS

(continued)

 

          Page

ARTICLE VIII

  

    FORFEITURES TO COMPANY

   20

8.1

  

Distribution of Participant’s Interest When Company is Unable to Locate Distributees

   20

ARTICLE IX

  

    ADMINISTRATION

   20

9.1

  

Committee; Duties

   20

9.2

  

Agents

   21

9.3

  

Binding Effect of Decisions

   21

9.4

  

Indemnity of Committee

   21

ARTICLE X

  

    CLAIMS PROCEDURE

   21

10.1

  

Claim

   21

10.2

  

Denial of Claim

   21

10.3

  

Review of Claim

   22

10.4

  

Final Decision

   22

ARTICLE XI

  

    AMENDMENT AND TERMINATION OF PLAN

   22

11.1

  

Amendment

   22

11.2

  

Company’s Right to Terminate

   23

ARTICLE XII

  

    MISCELLANEOUS

   24

12.1

  

Unfunded Plan/Compliance with Code

   24

12.2

  

Unsecured General Creditor

   25

12.3

  

Trust Fund

   25

12.4

  

Nonassignability

   25

12.5

  

Not a Contract of Employment

   26

12.6

  

Protective Provisions

   26

12.7

  

Governing Law

   26

12.8

  

Validity

   26

12.9

  

Gender

   26

12.10

  

Notice

   27

12.11

  

Successors

   27

 

-iii-


ALBEMARLE CORPORATION

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

ARTICLE I

 

PURPOSE AND EFFECTIVE DATE

 

The purpose of this Executive Deferred Compensation Plan is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain employees of Employer. It is intended that the Plan will aid in attracting and retaining employees of exceptional ability by providing them with these benefits. This amendment and restatement of the Plan shall be effective as of January 1, 2005.

 

ARTICLE II

 

DEFINITIONS

 

For the purposes of this Plan, the following terms shall have the meanings indicated, unless the content clearly indicates otherwise:

 

2.1 Account

 

“Account” means the interest of a Participant in the Plan as represented by the hypothetical bookkeeping entries kept by the Employer for each Participant. Each Participant’s interest may be divided into one or more separate Accounts which reflect, not only contributions into the Plan, but also gains and losses, allocated thereto, as well as any distributions or other withdrawals. The value of these Accounts shall be determined as of the Valuation Date. The existence of an Account or bookkeeping entries for a Participant (or his Beneficiary) does not create, suggest or imply that a Participant, Beneficiary or other person claiming through them under this Plan has a beneficial interest in any asset of the Employer.


2.2 Administrative Committee

 

“Administrative Committee” means the Employee Relations Committee of the Company or any successor committee.

 

2.3 Beneficiary

 

“Beneficiary” means the person, persons or entity (including, without limitation, any trustee) last designated by a Participant to receive the benefits specified hereunder, in the event of the Participant’s death.

 

2.4 Board

 

“Board” means the Board of Directors of the Company.

 

2.5 Company

 

“Company” means Albemarle Corporation or any successor to the business thereof.

 

2.6 Deferral Election

 

“Deferral Election” means a base salary and/or bonus deferral commitment made by a Participant to establish Retirement/Termination Accounts and/or a Scheduled Withdrawal Accounts pursuant to Article III and Sections 4.3 and 4.4 for which a Participation Agreement has been submitted by the Participant to the Administrative Committee.

 

2.7 Disability

 

“Disability” means unable to engage in any substantial gainful activity because of any medically determinable physical or mental impairment which can be expected to result in death or which has lasted, or can be expected to last, for a continuous period of twelve (12) months or longer.

 

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2.8 Elected Deferred Compensation

 

“Elected Deferred Compensation” means the amount of base salary and/or bonus that a Participant elects to defer pursuant to a Deferral Election for a Plan Year.

 

2.9 Employer

 

“Employer” means the Company and any affiliated or subsidiary corporations designated by the Board.

 

2.10 Financial Hardship

 

“Financial Hardship” means an immediate and substantial financial need of the Participant or Beneficiary, resulting from an illness or accident of the Participant or Beneficiary (or their spouse or dependent), loss of the Participant’s or Beneficiary’s property due to casualty, or other similar extraordinary and unforeseeable circumstance arising as a result of events beyond the control of the Participant or Beneficiary. Whether a “financial hardship” exists shall be determined by the Administrative Committee on the basis of written information supplied by the Participant or Beneficiary in accordance with such standards as are, from time to time, established by the Administrative Committee or applicable law.

 

2.11 Hardship Distribution

 

“Hardship Distribution” means a distribution to a Participant or a Beneficiary pursuant to Section 6.7.

 

2.12 Participant

 

“Participant” means any individual who is participating in this Plan as provided in Article III.

 

2.13 Participation Agreement

 

“Participation Agreement” means the written agreement to defer salary and/or bonus award submitted by a Participant to the Administrative Committee or its delegates.

 

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2.14 Plan

 

“Plan” means this Albemarle Corporation Executive Deferred Compensation Plan as set forth in this document and as the same may be amended, administered or interpreted from time to time.

 

2.15 Plan Year

 

“Plan Year” means each calendar year beginning on January 1 and ending on December 31.

 

2.16 Retirement

 

“Retirement” means a Participant’s voluntary termination of employment with Employer, other than by reason of death, on or after the Participant’s attainment of sixty (60) and ten (10) years of service.

 

2.17 Retirement/Termination Account

 

“Retirement/Termination Account” means an Account established pursuant to Section 4.3 to provide for distribution of benefits following Retirement.

 

2.18 Scheduled Withdrawal

 

“Scheduled Withdrawal” means a distribution prior to termination of employment pursuant to Section 6.6.

 

2.19 Scheduled Withdrawal Account

 

“Scheduled Withdrawal Account” means an Account which may be established pursuant to Section 4.4 to provide for distribution of benefits on a date selected by the Participant.

 

2.20 Settlement Date

 

“Settlement Date” means the date on which a lump-sum payment shall be made or the date on which installment payments shall commence.

 

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2.21 Small Account

 

“Small Account” means a lump-sum payment pursuant to Section 6.5.

 

2.22 Valuation Date

 

“Valuation Date” means the last day of any calendar month, or such other dates as the Administrative Committee may determine, in its sole discretion, which may be either more or less frequent for the valuation of Participants’ Accounts.

 

ARTICLE III

 

PARTICIPATION, DEFERRALS AND ADDITIONAL BENEFITS

 

3.1 Eligibility and Participation

 

(a) Eligibility. All salaried employees of the Company or an Employer employed in the U.S. who, as of their date of enrollment, receive an annual base salary of at least $120,000 shall be eligible to participate in the Plan. For Plan Years after 2004, the $120,000 eligibility level shall be increased by $3,000 each year; provided, however, that the Administrative Committee shall have the discretion to change the increase amount from time to time. In circumstances where an individual could become ineligible solely because of such increase in the eligible compensation level, the Administrative Committee shall have the discretion to determine whether to allow such individual to continue participation notwithstanding having fallen below the required compensation level.

 

(b) Participation in Voluntary Income Deferral. An individual who satisfies the requirements of (a), above, may elect to make voluntary compensation deferrals into the Plan by submitting a Participation Agreement to the Administrative Committee pursuant to procedures adopted by the Administrative Committee.

 

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3.2 Basic Forms of Deferral

 

A Participant may file a Participation Agreement to defer up to fifty percent (50%) of his base salary and/or one hundred percent (100%) (net of FICA and Medicare taxes withheld, if any) of each bonus paid in a Plan Year. The amount to be deferred shall be stated as a percentage of base salary and as a percentage of each source of deferral. With respect to the deferral of bonuses, for bonuses earned in 2005 or later, such deferral election must be made before the start of the year in which the bonus is earned.

 

3.3 Commencement and Duration of Deferral Election

 

(a) Each Deferral Election shall be effective until the Participant changes it by filing a new Participation Agreement with the Administrative Committee. The Participant’s current Deferral Election shall continue to apply for succeeding Plan Years, unless changed by the Participant prior to the start of the following Plan Year, in accordance with Section 3.4 below. A Deferral Election shall commence as of the first day of the next Plan Year following the date a Participation Agreement for such Deferral Election is filed with the Administrative Committee; provided, however, that a newly hired eligible Participant may make such election at any time within the first 30 days of employment, with such election to be with respect to base salary earned in payroll periods after that election. Notwithstanding the foregoing, the deferral of base salary shall not take effect until the Participant has contributed the maximum Pre-Tax Contribution to the Albemarle Corporation Savings Plan (the “Savings Plan”) for such year. The Participation Agreement shall specify the portion of the Elected Deferred Compensation to be credited to each Retirement/Termination Account and to each Scheduled Withdrawal Account.

 

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(b) A Deferral Election shall terminate when a Participant terminates employment for any reason or elects a Hardship Withdrawal.

 

(c) A Deferral Election for a particular Scheduled Withdrawal Account shall terminate at the end of the Plan Year preceding the Plan Year in which the Participant has elected for distribution of such Account.

 

3.4 Modification of Deferral Elections

 

Each Deferral Election shall remain in effect until it is changed by the Participant. A Participant shall not have the right to change, suspend or resume a Deferral Election which is in effect for the current Plan Year. Notwithstanding the foregoing, a Participant may change, suspend or resume his Deferral Election for any succeeding Plan Year in accordance with rules established by the Administrative Committee, provided that the modification applies only to a salary and/or bonus payment that is not yet earned. Furthermore, in light of the Plan revisions which are effective as of April 1, 2004, each Participant shall be allowed to change his Deferral Election with respect to base salary for the 2004 Plan Year earned after the date of such change, in accordance with procedures determined by the Administrative Committee.

 

3.5 Supplemental Savings Benefit

 

(a) A benefit is established for each Participant which is initially credited with the number of phantom shares of Albemarle Corporation Common Stock previously credited to the bookkeeping account maintained under Section 3.01.00(b)(ii) under the Albemarle Corporation Supplemental Executive Retirement Plan as in force on December 31, 2004, liability for which benefit is assumed by this Plan as of such date. The benefit shall be payable upon the later of the Participant’s receipt of a lump sum payment under the Savings Plan and the month following the Participant’s last month of employment.

 

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(b) In addition to any benefit a Participant receives pursuant to (a), above, a Participant shall receive a benefit each year of a number of phantom shares of Albemarle Corporation Common Stock equal in value to the Matching Contribution which would have been available under the terms of the Savings Plan if not for (i) the limitations imposed by Code Sections 401(a)(17) or 415, or (ii) base salary deferrals into this Plan. Amounts credited pursuant to this Section 3.5(b) shall be credited to the Participant’s Retirement/Termination Account A.

 

3.6 Supplemental Pension Benefit

 

(a) This credit is available only to those Participants who are eligible to receive Pension Contributions under the Savings Plan. For each Plan Year in which such Participant is eligible to participate in the Plan, the Participant will receive a credit equal to five percent (5%) of base salary in excess of the amounts which can be recognized by the Savings Plan because of (i) the limitations in Internal Revenue Code section 401(a)(17) or (ii) base salary deferrals into this Plan; plus five percent (5%) of the bonus paid in that Plan Year. For the purpose of clause (i), base salary shall be determined without reduction for any amounts contributed under Code sections 402(g) or 125. This credit shall occur at the time the base salary or bonus, as the case may be, is paid.

 

(b) Amounts credited pursuant to this Section 3.6 shall be credited to the Participant’s Retirement/Termination Account A.

 

3.7 Short Service Credit

 

(a) A Participant shall be eligible for the credit under this Section 3.7 if such Participant is recommended for such eligibility by the Administrative Committee and approved by the Executive Compensation Committee of the Board.

 

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(b) A Participant who meets the eligibility requirements of 3.7(a), above, will receive an additional credit under the Plan for each Plan Year equal to a percentage of base salary plus target bonus. The percentage shall be determined by the Executive Compensation Committee upon recommendation from the Administrative Committee.

 

(c) Amounts credited pursuant to this Section 3.7 shall be credited to the Participant’s Retirement/Termination Account A.

 

(d) A Participant who terminates employment before completing at least five years of service with the Company or an Employer (measured from date of hire to date of termination), shall forfeit all amounts previously credited under this Section 3.7, plus all earnings thereon.

 

3.8 Pension Credit for Former Akzo Nobel Employees (acquisition effective August 1, 2004)

 

(a) A Participant shall be eligible for the credit under this Section 3.8 if such Participant (a) becomes an employee of the Company or an Employer as a result of the Company’s acquisition of the Catalysts business of Akzo Nobel and (b) is recommended for such eligibility by the Administrative Committee and approved by the Executive Compensation Committee of the Board.

 

(b) A Participant who meets the eligibility requirements of Section 3.8(a), above, will receive an additional credit under the Plan as of his date of employment by the Company or an Employer in an amount determined by the Administrative Committee and documented in the records of such Committee.

 

(c) Amounts credited pursuant to this Section 3.8 shall be credited to the Participant’s Retirement/Termination Account A.

 

(d) A Participant who terminates employment before completing at least five years of service with the Company or an Employer (measured from date of hire to date of

 

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termination), shall forfeit the entire benefit provided under this Section 3.8. Notwithstanding the foregoing, if a Participant’s employment is terminated as the result of death or disability, the Participants shall be fully vested in the benefit provided under this Section 3.8. In addition, if a Participant with less than five years of employment with the Company or an Employer terminates employment after attaining age 60, and after attaining a total of at least ten years of combined employment with the Company, an Employer or Akzo Nobel, such Participant will vest in a fraction of his benefit under this Section 3.8, where the numerator of such fraction is his completed total years of employment with the Company or an Employer and the denominator of such fraction is five.

 

ARTICLE IV

 

COMPENSATION ACCOUNTS

 

4.1 Accounts

 

For recordkeeping purposes only, Employer shall maintain up to five (5) separate Accounts for each Participant. The Accounts shall be known as the Retirement/Termination Account A, Retirement/Termination Account B and up to three (3) separate Scheduled Withdrawal Accounts.

 

4.2 Crediting of Deferrals

 

Beginning January 1 of each Plan Year, a Participant’s Elected Deferred Compensation which consists of deferred base salary shall be credited to the Participant’s Accounts within three (3) business days after the date on which the corresponding nondeferred portion of the Participant’s base salary is paid or would have been paid but for the Deferral Election. Beginning January 1 of each Plan Year, a Participant’s Elected Deferred Compensation which consists of deferred bonus shall be credited to the Participant’s Accounts within three (3) business days after the date on which the bonus is paid or would have been paid but for the Deferral Election.

 

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4.3 Retirement/Termination Account

 

A Participant may have up to two Retirement/Termination Accounts under which such Participant will receive retirement benefits following Retirement. The two Retirement/Termination Accounts shall be designated as Retirement/Termination Account A and Retirement/Termination Account B, and shall be payable as described in section 6.1. With respect to a Participant who is a Key Employee as defined in Code section 416(i), benefits from such Accounts shall commence six (6) months after Retirement.

 

4.4 Scheduled Withdrawal Account

 

A Participant may establish up to three (3) Scheduled Withdrawal Accounts by filing a Participation Agreement to defer base salary and/or bonus into the applicable Scheduled Withdrawal Accounts and designating the applicable percentages allocated to each Account. No deferrals may be made into the Participant’s Scheduled Withdrawal Accounts during the Plan Year in which the Participant is receiving, or will receive, a Scheduled Withdrawal from any such Account.

 

4.5 Vesting of Accounts

 

Except as otherwise expressly provided, each Participant shall be one hundred percent (100%) vested at all times in the amounts credited to such Participant under the Plan.

 

4.6 Statement of Accounts

 

From time to time, the Administrative Committee shall give to each Participant a benefit statement setting forth the balance of the Accounts maintained for the Participant.

 

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4.7 Valuation of Accounts

 

A Participant’s Account as of each Valuation Date shall consist of the balance of the Participant’s Account as of the immediately preceding Valuation Date, plus the Participant’s Elected Deferred Compensation, if any, as such Account may be adjusted for investment gains and losses and minus any distributions made from such Account since the immediately preceding Valuation Date.

 

ARTICLE V

 

INVESTMENT AND EARNINGS

 

5.1 Plan Investments

 

A Participant shall complete a portfolio allocation form electing from among a series of hypothetical investment options designated by the Administrative Committee into which the Participant’s Elected Deferred Compensation shall be credited. The performance of the Participant’s Account(s) shall be measured based upon the investment options selected. The Participant’s Elected Deferred Compensation shall be credited with such hypothetical crediting rates calculated after the investment managers’ expenses have been deducted. Investment options may be changed monthly by executing a form available from the Administrative Committee, which form must be returned as indicated by the Administrative Committee at least five (5) days before the beginning of the month in which it is to be effective. The revised or changed investment allocations are effective the first business day of the following month, after receipt of a timely filed investment change form.

 

5.2 Crediting Investment Gains and Losses

 

Participant Accounts shall be credited daily with investment gains and losses as if Accounts were invested in one or more of the Plan’s investment options, as selected by the Participant, less administrative charges applied against the particular investment options.

 

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Accounts shall be credited with investment gains and losses through the applicable Valuation Date with respect to a particular Settlement Date (or Dates) in anticipation of, and in connection with, a Plan distribution.

 

ARTICLE VI

 

PLAN BENEFITS

 

6.1 Retirement Benefit

 

(a) Amount. If a Participant terminates employment due to Retirement, the Employer shall pay to the Participant a benefit equal to the balance in the Participant’s Retirement/Termination Accounts.

 

(b) Form. The Participant’s Retirement/Termination Accounts shall be paid as follows:

 

(i) Retirement/Termination Account A shall be paid as a single lump-sum payment; and

 

(ii) Retirement/Termination Account B shall be paid as installment payments, which shall be annual payments for a period of up to fifteen (15) years, as elected by the Participant at the time of the deferral, commencing on the first day of the Plan Year next following the Participant’s Retirement date. The first payment shall equal the Participant’s account balance as of the most recent Valuation Date divided by the number of installments elected by the Participant. The amount of each succeeding payment shall be redetermined each Plan Year as of January 1 based on the remaining Account balance as of the most recent Valuation Date divided by the remaining number of installment payments. The Account shall be credited with earnings, gains and losses pursuant to Article V. If the Participant has no valid election on file, payments from Retirement/Termination Account B shall be made in annual installments over a period of ten (10) years.

 

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(c) Timing for Key Employees. With respect to a Participant who is a Key Employee as defined in Code section 416(i), benefits from such Account shall commence six (6) months after such termination of employment due to Retirement.

 

6.2 Termination Benefit

 

(a) Amount. If a Participant terminates employment for any reason other than Retirement, death or disability, the Employer shall pay to the Participant a benefit equal to the balance in the Participant’s Retirement/Termination Accounts. If a Participant transfers his employment within the Company to a jurisdiction so that the Participant will no longer be subject to Federal income taxation in the United States, the Participant shall be deemed to have terminated employment and the Employer shall pay to the Participant a benefit equal to the balance in the Participant’s Retirement/Termination Accounts.

 

(b) Form. The Employer shall pay to the Participant the benefit due under this Section 6.2 in a single lump sum.

 

(c) Timing for Key Employees. With respect to a Participant who is a Key Employee as defined in Code section 416(i), benefits from such Account shall commence six (6) months after such termination of employment.

 

6.3 Death Benefit

 

(a) Preretirement Death Benefit. If a Participant dies while employed by Employer, the balances in the Retirement/Termination Accounts and Scheduled Withdrawal Accounts, if any, shall be paid as soon as practicable to the Participant’s Beneficiary in the form elected by the Participant with respect to his Retirement/Termination Accounts.

 

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The Beneficiary shall be permitted to make investment elections and earnings shall continue to be credited pursuant to Article V after the Participant’s death.

 

(b) Postretirement Death Benefit. If a Participant dies following the commencement of Retirement payments, the Employer shall pay to the Participant’s Beneficiary any remaining installment payments that would have been paid to the Participant had the Participant survived.

 

6.4 Disability Benefit

 

(a) Amount. If a Participant terminates employment due to Disability, the Employer shall pay to the Participant a benefit equal to the balance in the Participant’s Retirement/Termination Accounts.

 

(b) Form. A Participant may elect at the time of deferral the form in which benefits will be paid pursuant to Section 6.1(b) of the Plan in the event of a termination of employment due to Disability.

 

6.5 Small Account

 

If, on the date payments are to commence under Sections 6.1, 6.3 or 6.4 of the Plan, the Participant’s Account balance is less than fifty thousand dollars ($50,000), such Account shall be paid in a single lump-sum payment to the Participant or Beneficiary, as applicable.

 

6.6 Scheduled Withdrawal

 

(a) Form and Commencement. The entire balance of the applicable Scheduled Withdrawal Account shall be paid in either a single lump sum or in installment payments on the date or dates elected by the Participant at the time the applicable Account was established. In no event shall the payment date be prior to the completion of three (3) Plan Years from the date the applicable Account is established. A Deferral

 

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Election shall not be made with respect to the applicable Scheduled Withdrawal Account for the Plan Year in which a payment is made from such Account to the Participant. The Participant may elect to receive distributions from a Scheduled Withdrawal Account in the form of a single lump sum or in annual installments over a period not to exceed four (4) years. A distribution in the form of annual installments shall be paid in the method described in Section 6.1(b)(ii).

 

(b) Termination of Employment Prior to Scheduled Withdrawal. If a Participant with a balance in a Scheduled Withdrawal Account(s) terminates his employment with Employer due to Retirement or Disability, such Scheduled Withdrawal Account(s) shall be paid to the Participant pursuant to subparagraph (a) above. Notwithstanding the foregoing, in the event the Participant terminates his employment for a reason other than due to Retirement or Disability, the Employer shall pay to the Participant the benefit due under this Section 6.6 in a single lump sum. If a Participant transfers his employment within the Company to a jurisdiction so that the Participant will no longer be subject to Federal income taxation in the United States, the Participant shall be deemed to have terminated employment and the Employer shall pay to the Participant the benefit due under this Section 6.6 in a single lump sum.

 

6.7 Hardship Distribution

 

Upon finding that a Participant or Beneficiary has suffered a Financial Hardship, the Administrative Committee may, in its sole discretion, make distributions from an Account prior to the time specified for payment of benefits under the Plan. The Hardship Distribution shall be made ratably from all Accounts. The amount of such distributions shall be limited to the amount reasonably necessary to meet the Participant’s or Beneficiary’s requirements during the Financial Hardship. Any amounts paid to a Participant pursuant to this Section 6.7 shall be treated as distributions from the Participant’s Accounts.

 

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Following a complete distribution of the entire Account balance, a Participant and his Beneficiary shall be entitled to no further benefits under the Plan with respect to that Account.

 

Applications for Hardship Distributions and determinations thereon by the Administrative Committee shall be in writing, and a Participant or Beneficiary may be required to furnish written proof of the Financial Hardship.

 

Upon receiving a Hardship Distribution, a Participant’s Deferral Elections shall cease and such Participant shall not participate in the Plan until the next enrollment period following one (1) full year from the date of the Hardship Distribution.

 

6.8 Valuation and Settlement

 

With respect to a lump-sum payment, the Settlement Date for an Account shall be no more than thirty (30) days after the Valuation Date following such event for which the Participant or Beneficiary becomes entitled to payments on account of termination of employment. With respect to benefits that will be paid in installments pursuant to Section 6.1(b)(ii), the Settlement Date shall be the January 1 next following the Participant’s Retirement date.

 

The Settlement Date for a Hardship Distribution shall be no more than sixty (60) days after the last day of the month in which the Administrative Committee delivers a finding that the Participant or Beneficiary has suffered a Financial Hardship.

 

6.9 Withholding and Payroll Taxes

 

The Employer shall withhold from Plan payments made hereunder any taxes required to be withheld from such payments under federal, state or local law. Any withholding of

 

17


taxes or other amounts with respect to contributions through Elected Deferred Compensation or otherwise, that is required by federal, state or local law, including but not limited to FICA taxes (including both OASDI and Medicare taxes), shall be withheld from the Participant’s nondeferred base salary and/or bonus to the maximum extent possible with any excess being withheld from the Participant’s Elected Deferred Compensation. Each Participant shall bear the ultimate responsibility for payment of all taxes owed under this Plan.

 

6.10 Payment to Guardian

 

If a benefit is payable to a minor or a person declared incompetent or to a person incapable of handling the disposition of his property, the Administrative Committee may direct payment of such benefit to the guardian, conservator, legal representative or person having the care and custody of such minor, incompetent or incapacitated person. The Administrative Committee may require proof of minority, incompetency, incapacity, conservatorship or guardianship as it may deem appropriate prior to distribution of the benefit. Such distribution shall completely discharge the Administrative Committee from all liability with respect to such benefit.

 

6.11 Change of Payment Form or Commencement Date

 

A Participant may make an election to change the form in which benefits are to be paid under Sections 6.1 or 6.6 and such election will supercede his most prior election provided the election is made no later than twelve months before the payment would otherwise have commenced and provides that commencement of payments will be deferred for at least five years from the date they would otherwise have commenced. An election to change the form or commencement date of a distribution that is filed with the Administrative Committee which does not satisfy the foregoing shall be null and void and the next preceding timely election filed by the Participant shall be controlling.

 

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ARTICLE VII

 

DESIGNATION

 

7.1 Beneficiary Designation

 

Each Participant shall have the right, at any time, to designate a Beneficiary (both primary as well as contingent) to whom benefits under this Plan shall be paid if a Participant dies prior to complete distribution to the Participant of the benefits due such Participant under the Plan. Each Beneficiary designation shall be in a written form prescribed by the Administrative Committee, and will be effective only when filed with the Administrative Committee during the Participant’s lifetime.

 

7.2 Changing Beneficiary

 

Any Beneficiary designation may be changed by a Participant without the consent of the previously named Beneficiary by the filing of a new Beneficiary designation with the Administrative Committee. The filing of a new Beneficiary designation shall cancel all Beneficiary designations previously filed. If a Participant’s Compensation is community property, any Beneficiary Designation shall be valid or effective only as permitted under applicable law.

 

7.3 No Beneficiary Designation

 

In the absence of an effective Beneficiary designation, or if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant’s benefits, the Participant’s designated Beneficiary shall be deemed to be the Participant’s estate.

 

7.4 Effect of Payment

 

Payment to the Beneficiary shall completely discharge Employer’s obligations under this Plan.

 

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ARTICLE VIII

 

FORFEITURES TO COMPANY

 

8.1 Distribution of Participant’s Interest When Company is Unable to Locate Distributees

 

If the Employer is unable, within three (3) years after a payment is due to a Participant or Beneficiary, to make such payment because it cannot ascertain, after making reasonable efforts, the whereabouts of the Participant or the identity or whereabouts of the Beneficiary, and neither Participant, his Beneficiary, nor his executor or administrator has made written claim therefore before the expiration of the aforesaid time limit, then in such case, the amount due shall be forfeited to the Employer.

 

ARTICLE IX

 

ADMINISTRATION

 

9.1 Committee; Duties

 

The Administrative Committee shall have the authority to interpret and enforce all appropriate rules and regulations for the administration of the Plan and decide or resolve any and all questions, including interpretations of the Plan, as may arise in such administration. A majority vote of the Administrative Committee members in office at the time of the vote shall control any decision. The required majority action may be taken either by a vote at a meeting or without a meeting by a signed memorandum. Meetings may be conducted by telephone conference call. The Administrative Committee may, by majority action, delegate to one or more of its members the authority to execute and deliver in the name of the Administrative Committee all communications and documents which the Administrative Committee is required or authorized to provide under this Plan. Any party shall accept and rely upon any document executed in the name of the Administrative Committee.

 

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9.2 Agents

 

The Administrative Committee may employ agents and delegate to them such administrative duties as it sees fit, and may consult with counsel who may be counsel to the Company.

 

9.3 Binding Effect of Decisions

 

The decision or action of the Administrative Committee with respect to any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations promulgated hereunder shall be final, conclusive and binding upon all persons having any interest in the Plan.

 

9.4 Indemnity of Committee

 

The Company shall indemnify and hold harmless the members of the Administrative Committee against any and all claims, loss, damage, expense or liability arising from any action or failure to act with respect to this Plan on account of such person’s service on the Administrative Committee, except in the case of gross negligence or willful misconduct.

 

ARTICLE X

 

CLAIMS PROCEDURE

 

10.1 Claim

 

Any person claiming a benefit, requesting an interpretation or ruling under the Plan, or requesting information under the Plan, shall present the request in writing to the Administrative Committee which shall respond in writing within thirty (30) days.

 

10.2 Denial of Claim

 

If the claim or request is denied, the written notice of denial shall state:

 

(a) The reason for denial, with specific reference to the Plan provisions on which the denial is based.

 

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(b) A description of any additional material or information required and an explanation of why it is necessary.

 

(c) An explanation of the Plan’s claim review procedure.

 

10.3 Review of Claim

 

Any person whose claim or request is denied or who has not received a response within thirty (30) days may request review by notice given in writing to the Administrative Committee. Such notice must be received by the Administrative Committee within sixty (60) days following the end of the thirty (30) day review period. The claim or request shall be reviewed by the Administrative Committee who may, but shall not be required to, grant the claimant a hearing. On review, the claimant may have representation, examine pertinent documents, and submit issues and comments in writing.

 

10.4 Final Decision

 

The decision on review shall normally be made within sixty (60) days. If an extension of time is required for a hearing or other special circumstances, the claimant shall be notified and the time limit shall be one hundred twenty (120) days. The decision shall be in writing and shall state the reason and the relevant Plan provisions. All decisions on review shall be final and bind all parties concerned.

 

ARTICLE XI

 

AMENDMENT AND TERMINATION OF PLAN

 

11.1 Amendment

 

(a) The Executive Compensation Committee of the Board may at any time amend the Plan, in whole or in part, provided however that no amendment shall be effective to decrease or restrict the amount credited to any Account maintained under the Plan as of the adoption date or effective date of the amendment, whichever is later.

 

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(b) The Administrative Committee may adopt any technical, clerical, conforming or clarifying amendment or other change, provided:

 

(i) The Administrative Committee deems it necessary or advisable to:

 

(A) Correct any defect, supply any omission or reconcile any inconsistency in order to carry out the intent and purposes of the Plan;

 

(B) Maintain the Plan’s status as a “top-hat” plan for purposes of ERISA or maintain the Plan’s status as complying with Code section 409A; or

 

(C) Facilitate the administration of the Plan;

 

(ii) The amendment or change does not, without the consent of the Executive Compensation Committee of the Board, materially increase the cost to the Employer of maintaining the Plan; and

 

(iii) Any formal amendment adopted by the Administrative Committee shall be in writing, signed by a member of the Committee and reported to the Executive Compensation Committee of the Board.

 

(c) Changes in Earnings Rate. If the Plan is amended so that a series of investment options is not used to calculate the Participants’ investment gains and losses under the Plan, the rate of earnings to be credited to a Participant’s Account shall not be less than the monthly equivalent of the average nominal annual yield on three (3) month Treasury bills for the applicable period.

 

11.2 Company’s Right to Terminate

 

The Executive Compensation Committee of the Board may, at any time, partially or completely terminate the Plan.

 

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(a) Partial Termination. The Executive Compensation Committee of the Board may partially terminate the Plan by instructing the Administrative Committee not to accept any additional deferrals into the Plan. If such a partial termination occurs, the Plan shall continue to operate and be effective with regard to deferrals made prior to the effective date of such partial termination.

 

(b) Complete Termination. The Executive Compensation Committee of the Board may completely terminate the Plan by instructing the Administrative Committee not to accept any additional deferrals, and by terminating all ongoing Deferral Elections. If such a complete termination occurs, the Plan shall cease to operate and Employer shall distribute each Account; provided, however, that such distribution may be made only if the Employer terminates all other non-qualified deferred compensation plans which would be required to be aggregated with the Plan pursuant to Code section 409A. Payment shall be made in either the form of a lump sum payment as soon as practicable, but in no event later than 12 months after the date of such termination.

 

ARTICLE XII

 

MISCELLANEOUS

 

12.1 Unfunded Plan/Compliance with Code

 

This plan is an unfunded plan maintained primarily to provide deferred compensation benefits for a select group of “management or highly-compensated employees” within the meaning of Sections 201, 301 and 401 of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), and therefore is exempt from the provisions of Parts 2, 3 and 4 of Title I of ERISA. It is intended to comply with Code section 409A.

 

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12.2 Unsecured General Creditor

 

Participants and Beneficiaries shall be unsecured general creditors, with no secured or preferential right to any assets of Employer or any other party for payment of benefits under this Plan. Any life insurance policies, annuity contracts or other property purchased by Employer in connection with this Plan shall remain its general, unpledged and unrestricted assets. Employer’s obligation under the Plan shall be an unfunded and unsecured promise to pay money in the future.

 

12.3 Trust Fund

 

At its discretion, the Company may establish one or more trusts, with such trustees as the Company may approve, for the purpose of providing for the payment of benefits owed under the Plan. Although such a trust shall be irrevocable, its assets shall be held for payment to Employer’s general creditors in the event of insolvency or bankruptcy. To the extent any benefits provided under the Plan with respect to an Employer’s Participants are paid from any such trust, that Employer shall have no further obligation to pay them. If not paid from the trust, such benefits shall remain the obligation solely of that Employer.

 

12.4 Nonassignability

 

Except in connection with designating a Beneficiary as provided under Article VII hereof, neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in advance of actual receipt the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are, expressly declared to be unassignable and nontransferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, nor be transferable by operation of law in the event of a Participant’s or any other person’s bankruptcy or insolvency.

 

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12.5 Not a Contract of Employment

 

This Plan shall not constitute a contract of employment between Employer and the Participant. Nothing in this Plan shall give a Participant the right to be retained in the service of Employer or to interfere with the right of Employer to discipline or discharge a Participant at any time.

 

12.6 Protective Provisions

 

A Participant shall cooperate with Employer by furnishing any and all information requested by Employer in order to facilitate the payment of benefits hereunder, and by taking such physical examinations as Employer may deem necessary and taking such other action as may be requested by Employer.

 

12.7 Governing Law

 

The provisions of this Plan shall be construed and interpreted according to the laws of the Commonwealth of Virginia, except as preempted by federal law.

 

12.8 Validity

 

In case any provision of this Plan shall be held illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal and invalid provision had never been inserted herein.

 

12.9 Gender

 

The masculine gender shall include the feminine and the singular shall include the plural, except where the context expressly dictates otherwise.

 

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12.10 Notice

 

Any notice required or permitted under the Plan shall be sufficient if in writing and hand delivered or sent by registered or certified mail. Such notice shall be deemed as given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Mailed notice to the Administrative Committee shall be directed to the Company’s address. Mailed notice to a Participant or Beneficiary shall be directed to the individual’s last known address in Employer’s records.

 

12.11 Successors

 

The provisions of this Plan shall bind and inure to the benefit of Company and its successors and assigns. The term successors as used herein shall include any corporate or other business entity which shall, whether by merger, consolidation, purchase or otherwise acquire all or substantially all of the business and assets of Employer, and successors of any such corporation or other business entity.

 

ALBEMARLE CORPORATION

By:

 

 


Its:

   

Dated:

 

 


 

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