EXECUTIVE DEFERRED COMPENSATION PLAN

Exhibit 10.2

 

ALBEMARLE CORPORATION

EXECUTIVE DEFERRED COMPENSATION PLAN

 

As Amended and Restated January 1, 2005

TABLE OF CONTENTS

 

 

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TABLE OF CONTENTS

(continued)

 

 

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TABLE OF CONTENTS

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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 Part