Exhibit 10.10
ALBEMARLE CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective January 1, 2002
Page i
TABLE OF CONTENTS
Page
Article I PURPOSE AND EFFECTIVE DATE................................1
Article II DEFINITIONS..............................................1
2.1 Account.........................................................1
2.2 Administrative Committee....................................... 1
2.3 Beneficiary.....................................................1
2.4 Board...........................................................1
2.5 Company.........................................................1
2.6 Deferral Election...............................................2
2.7 Disability......................................................2
2.8 Elected Deferred Compensation...................................2
2.9 Employer........................................................2
2.10 Financial Hardship.............................................2
2.11 Hardship Distribution..........................................2
2.12 Participant....................................................2
2.13 Participation Agreement........................................2
2.14 Plan...........................................................3
2.15 Plan Year......................................................3
2.16 Retirement.....................................................3
2.17 Retirement/Termination Account.................................3
2.18 Scheduled Withdrawal...........................................3
2.19 Scheduled Withdrawal Account...................................3
2.20 Settlement Date................................................3
2.21 Small Account..................................................3
2.22 Valuation Date.................................................3
Article III PARTICIPATION AND DEFERRAL ELECTIONS....................4
3.1 Eligibility and Participation...................................4
3.2 Basic Forms of Deferral.........................................4
3.3 Commencement and Duration of Deferral Election..................4
3.4 Modification of Deferral Elections..............................4
Article IV COMPENSATION ACCOUNTS....................................5
4.1 Accounts........................................................5
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TABLE OF CONTENTS
(continued)
4.2 Crediting of Deferrals..........................................5
4.3 Retirement/Termination Account..................................5
4.4 Scheduled Withdrawal Account....................................5
4.5 Vesting of Accounts.............................................5
4.6 Statement of Accounts...........................................6
4.7 Valuation of Accounts...........................................6
Article V INVESTMENT AND EARNINGS...................................6
5.1 Plan Investments................................................6
5.2 Crediting Investment Gains and Losses...........................6
Article VI PLAN BENEFITS............................................6
6.1 Retirement Benefit..............................................6
6.2 Termination Benefit.............................................7
6.3 Death Benefit...................................................7
6.4 Disability Benefit..............................................8
6.5 Small Account...................................................8
6.6 Scheduled Withdrawal............................................8
6.7 Hardship Distribution...........................................9
6.8 Valuation and Settlement........................................9
6.9 Accelerated Distribution.......................................10
6.10 Withholding and Payroll Taxes.................................10
6.11 Payment to Guardian...........................................10
Article VII DESIGNATION............................................11
7.1 Beneficiary Designation........................................11
7.2 Changing Beneficiary...........................................11
7.3 No Beneficiary Designation.....................................11
7.4 Effect of Payment..............................................11
Article VIII FORFEITURES TO COMPANY................................11
8.1 Distribution of Participant's Interest When Company
is Unable to Locate Distributees...............................11
Article IX ADMINISTRATION..........................................12
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TABLE OF CONTENTS
(continued)
9.1 Committee; Duties..............................................12
9.2 Agents.........................................................12
9.3 Binding Effect of Decisions....................................12
9.4 Indemnity of Committee.........................................12
Article X CLAIMS PROCEDURE.........................................12
10.1 Claim.........................................................12
10.2 Denial of Claim...............................................13
10.3 Review of Claim...............................................13
10.4 Final Decision................................................13
Article XI AMENDMENT AND TERMINATION OF PLAN.......................13
11.1 Amendment.....................................................13
11.2 Company's Right to Terminate..................................14
Article XII SPECIAL COMPENSATION AND AWARDS........................15
12.1 Special Compensation and Awards...............................15
12.2 Participation and Deferral Elections..........................15
12.3 Compensation Accounts.........................................15
12.4 Investment and Earnings.......................................15
12.5 Distributions.................................................15
Article XIII MISCELLANEOUS.........................................16
13.1 Unfunded Plan.................................................16
13.2 Unsecured General Creditor....................................16
13.3 Trust Fund....................................................16
13.4 Nonassignability..............................................17
13.5 Not a Contract of Employment..................................17
13.6 Protective Provisions.........................................17
13.7 Governing Law.................................................17
13.8 Validity......................................................17
13.9 Gender........................................................17
13.10 Notice.......................................................17
13.11 Successors...................................................18
Appendix A: Change in Control......................................19
Page 1
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. The Plan shall be effective as of January 1,
2002.
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.
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.
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2.6 Deferral Election
Deferral Election" means a base salary, bonus and/or other special
compensation or award deferral commitment made by a Participant to
establish a Retirement/Termination Account and/or a Scheduled
Withdrawal Account 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" shall have the same meaning such term has under the
Company's long term disability plan.
2.8 Elected Deferred Compensation
Elected Deferred Compensation" means the amount of base salary, bonus
and/or other special compensation or award 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, 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 or Article XII.
2.13 Participation Agreement
"Participation Agreement" means the written agreement to defer salary,
bonus and/or other special compensation or 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.
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.
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Article III-- PARTICIPATION AND DEFERRAL ELECTIONS
3.1 Eligibility and Participation
(a) Eligibility. All executives designated by the Vice Chairman and Chief
Financial Officer or such other individual delegated by the Executive
Compensation Committee of the Board shall be entitled to participate in
the Plan.
(b) Participation. An eligible employee may elect to participate in the
Plan by submitting a Participation Agreement to the Administrative
Committee prior to the date he becomes eligible.
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%) of
each bonus paid in a Plan Year into the Retirement/Termination Account
and/or a Scheduled Withdrawal Account. The amount to be deferred shall
be stated as a percentage of base salary and bonus.
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.
The Participation Agreement shall specify the portion of the Elected
Deferred Compensation to be credited to the Retirement/Termination
Account and to each Scheduled Withdrawal Account.
(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,
bonus and/or other special compensation or award payment that is not
yet earned.
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Article IV-- COMPENSATION ACCOUNTS
4.1 Accounts
For recordkeeping purposes only, Employer shall maintain up to four (4)
separate Accounts for each Participant. The Accounts shall be known as
the Retirement/Termination Account 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 and/or any other special compensation or award shall be credited
to the Participant's Accounts within three (3) business days after the
date on which the bonus and/or such special compensation or award is
paid or would have been paid but for the Deferral Election.
4.3 Retirement/Termination Account
A Participant may establish a Retirement/Termination Account by filing
a Participation Agreement to defer base salary, bonus and/or any other
special compensation or award into the Retirement/Termination Account
and to receive retirement benefits from such Account following
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,
bonus and/or any other special compensation or award 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
Each Participant shall be one hundred percent (100%) vested at all
times in the amounts credited to such Participant's
Retirement/Termination Account and Scheduled Withdrawal Account.
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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.
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. 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 Account.
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(b) Form. The Participant may elect to receive his Retirement/Termination
Account in one of the following forms:
(i) Lump Sum. A single lump-sum payment; or
(ii) Installment payments. Installment payments in annual payments for a
period of up to fifteen (15) years, as elected by the Participant,
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.
A Participant may make an election to change the form in which benefits
are to be paid and such election will supercede his most prior election
provided the election is made no later than thirty (30) days prior to
the last day of the Plan Year immediately prior to the Plan Year in
which he commences receipt of his Retirement benefit. An election to
change the form of distribution that is filed with the Administrative
Committee which is not made at least thirty (30) days prior to the last
day of the Plan Year immediately prior to the Plan Year in which the
Participant commences receipt of his Retirement benefit shall be null
and void and the next preceding timely election filed by the
Participant shall be controlling.
If the Participant makes no election, payments from the
Retirement/Termination Account shall be made in annual installments
over a period of ten (10) years.
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 Account. 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 Account.
(b) Form. The Employer shall pay to the Participant the benefit due under
this Section 6.2 in a single lump sum.
6.3 Death Benefit
(a) Preretirement Death Benefit. If a Participant dies while employed by
Employer, the balances in the Retirement/Termination Account and
Scheduled Withdrawal Account, if any, shall be paid to the
Participant's Beneficiary in the form elected by the Participant with
respect to his Retirement/Termination Account.
Page 8
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 Account.
(b) Form. A Participant who terminates employment due to Disability shall
be permitted to elect the form in which benefits will be paid pursuant
to Section 6.1(b) of the Plan.
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), the Administrative Committee may, in its
discretion, pay such Account 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 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.
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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.
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. The amount of the
lump-sum payment for a Hardship Distribution shall be based on the
value of the Participant's Account as of the Valuation Date at the end
of the month in which the Administrative Committee delivers a finding
that the Participant or his Beneficiary has suffered a Financial
Hardship.
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6.9 Accelerated Distribution
Notwithstanding any other provision of the Plan and upon written
request to the Administrative Committee, a Participant shall be
entitled to receive a lump-sum distribution equal to ninety percent
(90%) of all Account balances as of the Valuation Date on the last day
of the month in which the Administrative Committee receives the written
request, provided the Administrative Committee receives such written
request at least three (3) business days prior to the last day of such
month. If the Administrative Committee receives the written request
during the last three (3) business days of the month, the Participant
shall be entitled to receive a lump sum distribution equal to ninety
percent (90%) of all Account balances as of the Valuation Date on the
last day of the next month. The remaining balance shall be forfeited by
the Participant. The amount payable under this section shall be paid in
a single lump sum within thirty (30) days after the Valuation Date for
such distribution, as provided above. Such Participant shall not be
eligible to make Deferral Elections until the next enrollment period
following twelve (12) months from the date of the distribution.
6.10 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 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, bonus and/or
other special compensation or award 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.
6.11 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.
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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.
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.
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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.
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.
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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.
(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.
(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:
Page 14
(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
(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.
(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. Payment shall be made in either the form of a
lump sum payment as soon as practicable or such other form of payment
as determined by the Executive Compensation Committee of the Board.
Page 15
Article XII-- SPECIAL COMPENSATION AND AWARDS
12.1 Special Compensation and Awards
Notwithstanding anything in the Plan to the contrary, the deferral of a
special compensation award shall be governed by this Article XII.
Unless directly addressed herein, the Participant's deferral of a
special compensation award shall otherwise be governed by the
requirements of the Plan.
12.2 Participation and Deferral Elections
The Executive Compensation Committee of the Board shall designate the
Participants eligible to elect a deferral under this Article XII. The
Participant must file a Participant Agreement with the Administrative
Committee for such deferral. The Participant's Deferral Election under
this Article XII shall commence as of the first day of the next Plan
Year following the date the Participant's Deferral Election is filed
with the Administrative Committee.
12.3 Compensation Accounts
The Participant may establish either a Retirement/Termination Account
or a Scheduled Withdrawal Account under this Article XII. Such Account
shall be separate and apart from any other Accounts of the Participant.
The Participant shall be entitled to have up to two (2) separate
Scheduled Withdrawal Accounts under this Article XII.
12.4 Investment and Earnings
The Participant shall not be eligible to direct the investment of his
deferral under this Article XII. The Participant's Account shall be
credited with earnings based on the increase or decrease in the value
of the common stock of the Company from the date of the Participant's
deferral. In addition, the Participant's Account shall be credited with
the value of any hypothetical dividends paid on the common stock of the
Company during the period for which the Participant's maintains an
Account established under this Article XII. The hypothetical dividends
will be reinvested when payable in additional shares of the common
stock of the Company. The value of the common stock of the Company for
the purposes of this Article XII shall mean the closing price of the
stock on the New York Stock Exchange - Composite Transaction on the
relevant date of determination.
12.5 Distributions
The Participant shall only be eligible to receive his benefits under
this Article XII in the form of Company stock. If designated into a
Retirement Account, the Participant shall be eligible to commence
receipt of his benefits in such Account in the manner described in
Section 6.1. The Retirement Benefit may be paid out in the form of a
lump sum or in installment payments. A distribution in the form of
annual installments shall be paid in the method described in Section
6.1(b)(ii).
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If designated into a Scheduled Withdrawal Account, the Participant
shall be eligible to commence receipt of his benefits in such account
on the date elected by the Participant at the time the Account was
established. In no event shall the payment date be prior to the
completion of two (2) Plan Years from the date the applicable Account
is established. The Scheduled Withdrawal Account may be paid out in a
single lump sum payment or in up to four (4) annual installments. A
distribution in the form of annual installments shall be paid in the
method described in Section 6.1(b)(ii). Notwithstanding the foregoing,
the Participant shall be entitled to make a one-time election to defer
commencement of the distributions from his Scheduled Withdrawal Account
in the event the Participant notifies the Administrative Committee in
writing of such election at least thirty (30) days prior to the close
of the Plan Year immediately preceding the Plan Year in which the
Scheduled Withdrawals were to begin. In such written election to defer
commencement, the Participant shall inform the Administrative Committee
of the new date upon which the Scheduled Withdrawals shall commence.
Article XIII -- MISCELLANEOUS
13.1 Unfunded Plan
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.
13.2 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.
13.3 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.
Page 17
13.4 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.
13.5 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.
13.6 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.
13.7 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.
13.8 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.
13.9 Gender
The masculine gender shall include the feminine and the singular shall
include the plural, except where the context expressly dictates
otherwise.
13.10 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.
Page 18
13.11 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
/s/ C.B. Walker
Vice Chairman of the Board and
Chief Financial Officer
Dated: December 21, 2001
Page 19
Appendix A
Change in Control
1. A "Change in Control" shall mean 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, Bruce C. Gottwald,
members of either of their families 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, (i) 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, Bruce C. Gottwald, members of
either of their families 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. For purposes of this Appendix A, the following terms shall
have the following meanings:
(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").
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(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 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.
Page 21
(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.