Changes to Executive Incentive Compensation Plan
In March 2012, Harsco Corporation (the “Company”) amended and restated the Company’s 1995 Executive Incentive Compensation Plan (the “Plan”), as authorized by the Company’s Board of Directors on January 24, 2012, to better align the Plan with corporate governance best practices. The Plan was principally amended as follows:
| · | to prohibit the repricing of underwater stock options and stock appreciation rights, including the purchase of underwater stock options for cash, without stockholder approval; |
| · | to expressly prohibit transfers for value of incentive-based compensation awards to third parties; |
| · | to expressly prohibit “reload options,” which are stock options that provide for automatic grants of additional stock options whenever exercised using shares of stock, rather than cash, to satisfy the exercise price; |
| · | to require that future awards under the Plan will be subject to any clawback or recoupment policy adopted by the Company or implemented under the Dodd-Frank Wall Street Reform and Consumer Protection Act; and |
| · | to revise the annual per person limit on equity awards granted to any participant to reflect the automatic adjustment to that limit resulting from the Company’s March 2007 two-for-one stock split. |
The full text of the amended and restated Plan is attached hereto as Exhibit 10.1.
Adoption of Clawback Policy
Also in March 2012, as authorized by the Board of Directors on January 24, 2012, the Company adopted a compensation “clawback” policy (the “Policy”) for the recovery of compensation from its current or former executive officers under certain circumstances. Pursuant to the Policy, the Company will use reasonable efforts to recover any incentive-based compensation paid or granted to an executive officer (i) in the event of an accounting restatement due to material noncompliance by the Company with the financial reporting requirements of federal securities laws and (ii) where the willful fraud, dishonesty or recklessness of the executive officer contributed to such noncompliance, as determined by the Board of Directors. Under the Policy, the Company will seek to recover the difference between the amount of the incentive-based compensation received by the executive officer and the amount of incentive-based compensation such officer would have received had the amount been calculated based on the restated financial statements. The Policy is attached hereto as Exhibit 99.1.
Changes to Insider Trading Policy
In March 2012, the Company amended its Insider Trading Policy to prohibit its directors, officers and employees from engaging in hedging or monetization transactions involving the Company’s securities, such as prepaid variable forward contracts, equity swaps, collars or exchange funds. The Company’s Insider Trading Policy is attached hereto as Exhibit 99.2.
