Exhibit 10.6
ALBEMARLE CORPORATION
SEVERANCE PAY PLAN
Effective as of December 13,
2006
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This document
also services as the Summary Plan Description.
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TABLE OF CONTENTS
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I.
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Purpose
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1
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II.
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Eligibility
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1
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III.
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Conditions Governing Payment
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1
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IV.
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Benefits
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2
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V.
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Confidentiality
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3
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VI.
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Plan Continuance
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3
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VII.
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Miscellaneous
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3
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VIII.
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Claim Appeal Procedures
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3
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IX.
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Rights Under ERISA
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4
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X.
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General Information
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5
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ALBEMARLE CORPORATION
SEVERANCE PAY PLAN
The purpose of The Albemarle
Corporation Severance Pay Plan (“Plan”) is to provide a
period of continued income to certain employees who are terminated
by certain actions of Albemarle Corporation (the
“Corporation”) for no fault of the employee.
Only those employees who are located
in the United States, including those on expat assignments outside
the United States, and are grade 18 or above are eligible for
inclusion under this Plan. The Chief Executive Officer of Albemarle
shall nominate employees for inclusion under this Plan and the
Executive Compensation Committee of the Board of Directors of
Albemarle shall have the authority to designate which of those
employees may participate in this Plan and such designation shall
be on file with the Administrator of this Plan. Following a Change
in Control, any employee designated for inclusion under this Plan
may not be removed from this Plan.
Those employees who have Severance
Compensation Agreements providing for certain benefits following a
Change in Control shall be eligible for participation in this Plan
but are eligible for benefits only under the conditions of Section
III.A. below.
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III.
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Conditions Governing Payment
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A.
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Severance
payments will be paid by the Corporation to an eligible employee
whose employment is permanently terminated by action of the
Corporation without cause before a Change in Control by reason of
(i) the elimination of the employee’s position, or
(ii) a change to the organizational structure of the
Corporation which results in a redesign of work processes and
individual responsibilities affecting two (2) or more
individuals.
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The “elimination of the
employee’s position” means that the responsibilities of
the employee have been eliminated or reduced to the point that the
remaining responsibilities no longer constitute a complete work
assignment and any remaining duties are reassigned to a number of
other positions, resulting in a net reduction of required
positions.
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B.
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Severance
payments will be paid by the Corporation to an eligible employee
whose employment is terminated by the Corporation without cause
following a Change in Control.
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For purposes of this paragraph B:
(i) termination for “cause” shall mean termination
of employment for willfully engaging in conduct demonstrably and
materially injurious to the Corporation, monetarily or otherwise.
No act, or failure to act, shall be deemed “willful”
unless done, or omitted to be done, not in good faith and without
reasonable belief that the action or omission was in the best
interest of the Corporation; and
(ii) severance payments will
NOT be paid to an employee:
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1)
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eligible at the
time of termination of employment for total and permanent
disability benefits;
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2)
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terminating
employment voluntarily; or
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3)
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on a leave of
absence, whether approved or unapproved.
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C.
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As a condition
of receiving Severance Pay, an employee must execute and deliver to
the Corporation a release, in the form approved by the Plan
Administrator, of any and all claims the employee may have against
the Corporation.
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A.
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Unless
otherwise expressly provided in an employment agreement between the
Corporation and an employee:
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(a) Severance Pay for an eligible
employee terminated pursuant to Section III.A above shall be equal
to the sum of (i) one year of the employee’s base pay in
effect at the time of termination of employment, and (ii) the
target cash bonus for the employee for the year in which the
employee is terminated.
(b) Severance Pay for an eligible
employee terminated pursuant to Section III.B above shall be equal
to the sum of (i) the greater of the employee’s base
salary prior to the date of termination and the employee’s
base salary immediately prior to the Change in Control, and
(ii) the greater of the amount of the employee’s actual
cash bonus for the year preceding the date on which the Change in
Control occurs and the employee’s target bonus for the year
in which the Change in Control occurs.
Payments of Severance Pay shall be
made by the Corporation in a lump sum within thirty (30) days
after termination of employment.
In case of death, any unpaid
allowance will be paid out in the following order: to the surviving
spouse, surviving children or the estate.
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B.
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An eligible
employee shall also receive outplacement assistance for a period of
one (1) year following a termination of employment by a firm
selected by the Plan Administrator.
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C.
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The benefit payable to any
employee under this Plan shall be reduced, but not below zero, by
the amount of any payment
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