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): November 10, 2010
Chemtura
Corporation
(Exact
name of registrant as specified in its charter)
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Delaware
(State
or other jurisdiction
of
incorporation)
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1-15339
(Commission
file number)
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52-2183153
(IRS
employer identification
number)
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1818
Market Street, Suite 3700, Philadelphia, Pennsylvania
199
Benson Road, Middlebury, Connecticut
(Address
of principal executive offices)
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19103
06749
(Zip
Code)
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(203)
573-2000
(Registrant's
telephone number, including area code)
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))
Item
1.01 Entry Into a Material Definitive Agreement.
As previously disclosed, on
March 18, 2009, Chemtura Corporation (“Chemtura”) and 26 of its U.S.
subsidiaries (collectively, with Chemtura, the “U.S. Debtors”) filed voluntary
petitions for relief, and on August 8, 2010, Chemtura Canada Co./Cie (“Chemtura
Canada,” and, collectively with the U.S. Debtors, the “Debtors”) filed a
voluntary petition for relief (collectively, the “Chapter 11 cases”) under
Chapter 11 of the U.S. Bankruptcy Code in the U.S. Bankruptcy Court for the
Southern District of New York (the “Bankruptcy Court”). On August 11,
2010, Chemtura Canada commenced ancillary recognition proceedings under Part IV
of the Companies’ Creditors Arrangement Act (the “CCAA”) in the Ontario Superior
Court of Justice, Ontario, Canada (the “Canadian Court”). On
August 5, 2010, the Debtors filed with the Bankruptcy Court the
solicitation version of their joint plan of reorganization and accompanying
disclosure statement (as amended, supplemented or modified, the “Disclosure
Statement”). The Bankruptcy Court approved the Disclosure Statement on
August 5, 2010. On September 2, 2010, Chemtura filed a
supplement to the plan of reorganization with the Bankruptcy Court, as
contemplated by the Plan (as amended, supplemented or modified, the “Plan
Supplement”). On October
21, 2010, the Bankruptcy Court entered a bench decision approving confirmation,
and on October 29, 2010, the Debtors filed the confirmation version of their
joint plan of reorganization (as amended, supplemented or modified, the
“Plan”). On November 3, 2010, the Bankruptcy Court entered a written
order confirming the Plan (the "Confirmation Order"). A request for
recognition of the Confirmation Order was filed in the Canadian Court in order
to fulfill a condition to effectiveness of the Plan so that Chemtura Canada can
emerge from its proceedings at the same time as the U.S. Debtors. That
request was granted by order entered on November 3, 2010. On
November 10, 2010 (the “Effective Date”), the Debtors substantially consummated
their reorganization through a series of transactions contemplated by the Plan
and the Plan became effective.
Senior
Asset Based Facility
On the Effective Date, Chemtura entered
into the senior secured revolving credit facility agreement (the “Senior Asset
Based Facility Agreement”), among Chemtura and certain of its subsidiaries named
therein, as borrowers, Bank of America, N.A., as administrative agent and
collateral agent (the “Administrative Agent”), the other agents party thereto
and the Initial Lenders and other Lenders party thereto. Under the
Senior Asset Based Facility Agreement, the Lenders will provide a five-year
revolving facility (the “Senior Asset Based Facility”) in an amount of $275
million, subject to availability under a borrowing base (with a $125 million
letter of credit sub-facility). The Senior Asset Based Facility has
capacity for Chemtura to increase the amount of the Senior Asset Based Facility
by up to $125 million, subject to obtaining lender commitments to provide such
increase. Chemtura entered into the Senior Asset Based Facility
Agreement as part of its exit financing package pursuant to its
Plan.
The revolving loans under the Senior
Asset Based Facility will bear interest at a rate per annum which, at Chemtura’s
option, can be either: (a) a base rate (the highest of (i) Bank of America,
N.A.’s “prime rate,” (ii) the Federal Funds Effective Rate plus 1/2 of 1% and
(iii) the one-month LIBO Rate plus 1.00%) plus a margin of between 2.25% and
1.75% based on the average excess availability under the Senior Asset Based
Facility for the preceding quarter; or (b) the current reserve adjusted LIBO
Rate plus a margin of between 3.25% and 2.75% based on the average excess
availability under the Senior Asset Based Facility for the preceding
quarter.
Chemtura’s obligations (and the
obligations of the other borrowing subsidiaries) under the Senior Asset Based
Facility will be guaranteed on a secured basis by all the Guarantors (as defined
below) that are not borrowers, and by certain of our future direct and indirect
domestic subsidiaries. The obligations and guarantees under the
Senior Asset Based Facility will be secured by (i) a first-priority security
interest in the borrowers’ and the guarantors’ existing and future inventory and
accounts receivable, together with general intangibles relating to inventory and
accounts receivable, contract rights under agreements relating to inventory and
accounts receivable, documents relating to inventory, supporting obligations and
letter-of-credit rights relating to inventory and accounts receivable,
instruments evidencing payment for inventory and accounts receivable; money,
cash, cash equivalents, securities and other property held by the Administrative
Agent or any lender under the Senior Asset Based Facility; deposit accounts,
credits and balances with any financial institution with which any borrower or
any guarantor maintains deposits and which contain proceeds of, or collections
on, inventory and accounts receivable; books, records and other property related
to or referring to any of the foregoing and proceeds of any of the foregoing
(the “Senior Asset Based Priority Collateral”); and (ii) a second-priority
security interest in substantially all of the borrowers’ and the guarantors’
other assets, including (x) 100% of the capital stock of borrowers’ and the
guarantors’ direct domestic subsidiaries held by the borrowers and the
guarantors and 100% of the non-voting capital stock of the borrowers’ and the
guarantors’ direct foreign subsidiaries held by the borrowers and the
guarantors, and (y) 65% of the voting capital stock of the borrowers’ and the
guarantors’ direct foreign subsidiaries (to the extent held by the borrowers and
the guarantors), in each case subject to certain exceptions set forth in the
Senior Asset Based Facility Agreement and the related loan
documentation.
Mandatory prepayments of the loans
under the Senior Asset Based Facility (and cash collateralization of outstanding
letters of credit) shall be required (i) to the extent the usage of the Senior
Asset Based Facility exceeds the lesser of (x) the borrowing base and (y) the
then effective commitments and (ii) subject to exceptions, thresholds and
reinvestment rights, with the proceeds of certain sales or casualty events of
assets on which the Senior Asset Based Facility has a first priority security
interest.
If at the end of any business day the
amount of unrestricted cash and cash equivalents held by the borrowers and
guarantors (excluding amounts in certain exempt accounts) exceeds $20 million in
the aggregate, mandatory prepayments of the loans under the Senior Asset Based
Facility (and cash collateralization of outstanding letters of credit) shall be
required on the following business day in an amount necessary to eliminate such
excess (net of Chemtura’s known cash uses on the date of such prepayment and for
the 2 business days thereafter).
The Senior Asset Based Facility
Agreement contains certain affirmative and negative covenants (applicable to
Chemtura, the other borrowing subsidiaries, the guarantors and their respective
subsidiaries), including, without limitation, covenants requiring financial
reporting and notices of certain events, and covenants imposing limitations on
incurrence of indebtedness and guaranties; liens; loans and investments; asset
dispositions; dividends, redemptions, and repurchases of stock and prepayments,
redemptions and repurchases of certain indebtedness; mergers, consolidations,
acquisitions, joint ventures or creation of subsidiaries; material changes in
business; transactions with affiliates; restrictions on distributions from
subsidiaries and granting of negative pledges; changes in accounting and
reporting; sale leasebacks; and speculative transactions, and a springing
financial covenant requiring a minimum trailing 12-month fixed charge coverage
ratio of 1.1 to 1.0 at all times during any period from the date when the amount
available for borrowings under the Senior Asset Based Facility falls below the
greater of (i) $34 million and (ii) 12.5% of the aggregate commitments to the
date such available amount has been equal to or greater than the greater of (i)
$34 million and (ii) 12.5% of the aggregate commitments for 45 consecutive
days.
The Senior Asset Based Facility
Agreement contains certain events of default (applicable to Chemtura, the other
borrowers, the guarantors and their respective subsidiaries), including
nonpayment of principal, interest, fees or other amounts, violation of
covenants, material inaccuracy of representations and warranties, cross-default
to material indebtedness, certain events of bankruptcy and insolvency, material
judgments, certain ERISA events, a change in control, and actual or asserted
invalidity of liens or guarantees or any collateral document, in certain cases
subject to the threshold amounts and grace periods set forth in the Senior Asset
Based Facility Agreement.
The foregoing summary of the Senior
Asset Based Facility Agreement and the related guaranty and security agreement
are qualified in their entirety by reference to the actual Senior Asset Based
Facility Agreement, guaranty and security agreement which are attached hereto as
Exhibits 4.1, 4.2 and 4.3, respectively, and are incorporated herein by
reference.
Senior
Notes Supplemental Indenture
On the Effective Date, Chemtura, BioLab
Franchise Company, LLC, Bio-Lab, Inc., Crompton Colors Incorporated, Crompton
Holding Corporation, GLCC Laurel, LLC, Great Lakes Chemical Corporation, Great
Lakes Chemical Global, Inc., GT Seed Treatment, Inc., HomeCare Labs, Inc.,
Laurel Industries Holdings, Inc., Recreational Water Products, Inc. and Weber
City Road LLC (the “Guarantors”) and U.S. Bank National Association, as trustee
(the “Trustee”), entered into a first supplemental indenture (the “First
Supplemental Indenture”), supplementing the indenture, dated as of August 27,
2010, among Chemtura and the Trustee, pursuant to which Chemtura issued $455
million in aggregate principal amount of 7.875% senior notes due 2018 (the
“Senior Notes”). A copy of the First Supplemental Indenture is
attached as Exhibit 4.4 to this Current Report on Form 8-K and is
incorporated by reference herein. Pursuant to the First Supplemental
Indenture, the Guarantors became guarantors of Chemtura’s obligations under the
Senior Notes. On the Effective Date, the proceeds from the Senior
Notes were released from escrow to Chemtura.
Term
Loan Guarantees and Security Agreement
On the Effective Date, each of the
Guarantors executed a Guarantee, pursuant to which the Guarantors became
guarantors of Chemtura’s obligations under the Senior Secured Term Facility
Credit Agreement (the “Term Loan Facility Agreement”), among Chemtura, Bank of
America, N.A., as administrative agent, the other agents party thereto and the
Initial Lenders and other Lenders party thereto. On the Effective
Date, each of the Guarantors also executed a Security Agreement and certain
other collateral agreements, pursuant to which the Guarantors secured their
obligations under the Guarantee and the Term Loan Facility Credit Agreement by
granting a first priority lien on substantially all existing and future tangible
and intangible assets of Chemtura and such Guarantors not constituting Senior
Asset Based Priority Collateral, including, among other things, equipment and
capital stock of certain direct subsidiaries of Chemtura and such Guarantors,
subject to certain exceptions set forth in the Term Loan Facility Agreement and
the related loan documentation, and a second priority lien on the Senior Asset
Based Priority Collateral. A copy of the Guarantee and Security
Agreement are attached as Exhibits 4.5 and 4.6, respectively, to this Current
Report on Form 8-K and are incorporated by reference
herein. Under the Term Loan Facility Agreement, the Lenders advanced
loans in an aggregate principal amount of $295 million (the “Term
Loan”). On the Effective Date, the proceeds from the Term Loan were
released from escrow to Chemtura.
Item
1.02 Termination of a Material Definitive
Agreement.
Debt
Securities
On the Effective Date, pursuant to the
Plan, all outstanding obligations under the following notes (collectively, the
“Prepetition Notes”) were cancelled and the indentures governing such
obligations were cancelled, except to the extent to allow the Debtors or the
relevant trustee, as applicable, to make distributions pursuant to the Plan on
account of Noteholder Claims:
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The
6.875% Debentures due 2026, issued under the Indenture, dated as of
February 1, 1993, between Witco Corporation, predecessor in interest
to Chemtura, and The Chase Manhattan Bank,
N.A.
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The
6.875% Notes due 2016, issued under the Indenture dated as of
April 24, 2006, by and among the Chemtura as Issuer, the Guarantors
named therein and Wells Fargo Bank,
N.A.
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The
7% Notes due 2009, issued under the Indenture, dated as of July 16,
1999, between Great Lakes Chemical Corporation and The First National Bank
of Chicago
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The
applicable Debtors’ obligations under the Prepetition Notes were
unsecured.
Prepetition
Secured Lender Claims
On the Effective Date, pursuant to the
Plan, all outstanding obligations under the Second Amended and Restated Pledge
and Security Agreement, dated as of December 30, 2008, among certain of the
Debtors as grantors and Citibank, N.A. as agent (the “Prepetition Credit
Agreement”), were cancelled, except to the extent to allow distributions
pursuant to the Plan on account of claims under the Prepetition Credit
Agreement.
Debtor-in-Possession
Claims
On the Effective Date, pursuant to the
Plan, all amounts outstanding under the Senior Secured
Super-Priority-Debtor-in-Possession Credit Agreement, among the Company, as
borrower, Citibank N.A., as administrative agent, and the lenders party thereto
from time to time, were paid and such agreement was terminated in accordance
with its terms.
Equity
Interests
Upon the Effective Date, by operation
of the Plan, all of the common stock, preferred stock and other instruments
evidencing an ownership interest in Chemtura or any of the Debtors, whether or
not transferable, and any option, warrant or other right, contractual or
otherwise, to acquire any such interest in Chemtura or a Debtor that existed
before the Effective Date, any phantom stock or other similar stock unit
provided pursuant to Chemtura or the Debtors’ prepetition employee compensation
programs and any claim related to the purchase of interests subject to
subordination pursuant to section 510(b) of the Bankruptcy Code was cancelled as
of the Effective Date.
Item
2.03 Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
The information regarding the Senior
Asset Based Credit Facility set forth in Item 1.01 of this Current Report on
Form 8-K is incorporated by reference in this Item 2.03.
Item
3.02 Unregistered Sale of Equity Securities.
On the Effective Date, Chemtura issued
approximately 95,418,742 shares of new common stock, par value $0.01 per share,
to holders of Allowed Claims and Interests (as defined in the Plan) and reserved
an additional 4,581,258 shares of new common stock for future issuances under
the Plan.
Based on the Plan and the Confirmation
Order from the Bankruptcy Court, the issuance of the common stock described in
the preceding sentence is exempt from registration requirements of the
Securities Act of 1933, as amended (the “Securities Act”), in reliance on
Section 1145 of the Bankruptcy Code.
Item
3.03 Material Modification to Rights of Security Holders.
The information set forth under “Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year”
is incorporated by reference into this Item 3.03.
Item
5.02 Departure of Directors; Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain
Officers.
Departure
and Appointment of Directors
Pursuant to the Plan, as of the
Effective Date, the following directors ceased to serve on Chemtura’s Board:
Nigel D. T. Andrews, Martin M. Hale, Burton M. Joyce and Bruce F.
Wesson.
Pursuant to the Plan, as of the
Effective Date, Jeffrey D. Benjamin, Timothy J. Bernlohr, Alan S. Cooper and
Jonathan F. Foster became members of the Board. Existing directors Craig A.
Rogerson, Chemtura’s Chairman, President and Chief Executive Officer, James W.
Crownover, Roger L. Headrick and John K. Wulff remain on the Board.
Pursuant to the Plan, the new and
carry-over members of the Board (other than Mr. Rogerson) were chosen by a board
selection committee established by the Debtors, the Creditors’ Committee and the
Ad Hoc Bondholders’ Committee. The board selection committee was advised by an
independent search firm.
Committees
of the Board of Directors
The committees of Chemtura’s Board
consist of an Audit Committee, Compensation Committee, Nominating &
Governance Committee, Finance & Pension Committee and Environmental, Health
& Safety Committee. The Compensation Committee and Nominating and
Governance Committee are new and their functions had previously been served by
the Organization, Compensation & Governance Committee, which the Board
decided to split into two committees on the Effective Date. On
November 10, 2010, the Board made the following committee assignments and
appointments:
Audit
Committee:
The Board appointed John K. Wulff
(Chair), Jeffery D. Benjamin, Alan S. Cooper and Roger L. Headrick as members of
the Audit Committee. The Board has determined that each member of the
Audit Committee meets the independence requirements of The New York Stock
Exchange, Inc. (the “NYSE”) and Rule 10A-3 of the Securities Exchange Act
of 1934 (the “Exchange Act”) and has the requisite financial knowledge and
experience to be considered by the Board to be financially
literate. The Board has also determined that Mr. Wulff qualifies as
an “audit committee financial expert,” as such term is defined in Item
407(d)(5)(ii) of Regulation S-K.
Compensation
Committee:
The Board appointed Jonathan F. Foster
(Chair), Timothy J. Bernlohr and James W. Crownover as members of the
Compensation Committee. The Board has determined that each member of
the Compensation Committee meets the independence requirements of the
NYSE.
Nominating
& Governance Committee:
The Board appointed Jeffrey D. Benjamin
(Chair), Timothy J. Bernlohr, James W. Crownover and Jonathan F. Foster as
members of the Nominating & Governance Committee. The Board has
determined that each member of the Nominating and Governance Committee meets the
independence requirements of the NYSE.
Finance
& Pension Committee:
The Board appointed Alan S. Cooper
(Chair), Jonathan F. Foster, Roger L. Headrick and John K. Wulff as members of
the Finance & Pension Committee.
Environmental,
Health & Safety Committee:
The Board appointed James W. Crownover
(Chair), Timothy J. Bernlohr and Jeffrey D. Benjamin as members of the
Environmental, Health & Safety Committee.
Lead Director:
The Board appointed Timothy J. Bernlohr
to serve as lead director.
Compensation
of Directors
Each non-employee member of the board
of directors will receive an annual retainer of $82,000. The lead
director receives an additional $25,000 per year and each member of the audit
committee receives an additional $7,500 per year. In addition, the
Audit Committee chair receives an additional $18,000 per year, the Compensation
Committee chair receives an additional $12,000 per year, the Nominating and
Corporate Governance chair receives an additional $8,000 per year, the Finance
and Pension Committee chair receives an additional $10,000 per year and the
Environmental, Health & Safety Committee chair receives an additional $8,000
per year. Directors do not receive fees for attendance in person or
by telephone at board or committee meetings. Each director is
reimbursed for costs incurred in connection with attendance at board and
committee meetings. Directors who are our employees do not receive
additional compensation for board participation.
Stock-Based
Compensation
On the Effective Date, Chemtura
implemented the Chemtura Corporation 2010 Long-Term Incentive Plan (the “2010
LTIP”) in the form as filed in the Plan Supplement. The 2010 LTIP
provides for grants of nonqualified stock options, incentive stock options,
stock appreciation rights, dividend equivalent rights, stock units, bonus stock,
performance awards, share awards, restricted stock and RSUs. No
awards could be granted under the 2010 LTIP until the effectiveness of the
Plan. Directors, officers and other employees of Chemtura and its
subsidiaries, as well as others performing services for Chemtura, are eligible
to receive grants under the 2010 LTIP. The 2010 LTIP has a share
reserve of 11 million shares, equal to eleven percent (11%) of Chemtura’s new
shares of common stock issued on the Effective Date or available for issuance
after the Effective Date to holders of Allowed Claims and Interests (as defined
in the Plan). As described more fully below, on the Effective Date,
Chemtura implemented the following stock-based compensation plans:
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1.
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The
EIP Settlement Plan, including the 2009 Emergence Incentive Plan and the
2010 Emergence Incentive
Plan; and
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2.
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The
2010 Emergence Award Plan.
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On June 1, 2010, the Organization,
Compensation and Governance Committee of the pre-emergence Board of Directors
(the “Committee”) adopted the 2010 Emergence Incentive Plan (“2010
EIP”). The 2010 EIP was established by order of the Bankruptcy Court,
dated May 18, 2010. The 2010 EIP provides the opportunity for
participants to earn an award that was granted on the Effective Date in the form
of time-based RSUs and stock options. The number of employees
included in the 2010 EIP and the size of the award pool are based upon specific
consolidated EBITDA levels achieved in the twelve month period immediately
preceding the effectiveness of the Plan. The maximum award pool is in
a value of $19 million.
The Committee and the Bankruptcy Court
approved a similar emergence incentive plan in 2009 (the “2009
EIP”). On June 1, 2010, the Committee also adopted an amendment to
the consolidated EBITDA measurement period under the 2009 EIP from twelve months
trailing consolidated EBITDA from emergence from Chapter 11 to twelve months
trailing consolidated EBITDA ending March 31, 2010 (the “2009 EIP
Amendment”). The 2009 EIP Amendment was established by order of the
Bankruptcy Court, dated May 18, 2010. The award pool for the 2009 EIP
is approximately $14 million. The awards under the 2009 EIP were
contingent on the effectiveness of the Plan.
On the
Effective Date, Chemtura implemented the Chemtura Corporation EIP Settlement
Plan in the form as filed with the Plan Supplement. Under the EIP
Settlement Plan, awards were granted to participants under Chemtura’s 2009 EIP
on the Effective Date and such award were composed of a combination of RSUs and
nonqualified stock options, each vesting in three pro-rata equal installments on
the date of grant and in March of each of the two years following the date of
grant. On the Effective Date, Chemtura issued 129,816 shares of
common stock to participants under the 2009 EIP for RSUs that vested on the date
of grant.
Awards
under the 2010 EIP will be made upon the achievement of the EBITDA measurement
as defined under the 2010 EIP which is anticipated to be in March
2011. The awards under the 2010 EIP are composed of a combination of
RSUs and nonqualified stock options, each vesting in three pro-rata equal
installments on the date of grant and on the first and second anniversary of the
date of grant.
On the Effective Date, pursuant to the
EIP Settlement Plan, Chemtura entered into a Nonqualified Stock Option Agreement
and Restricted Stock Unit Agreement with each of Messrs. Rogerson, Forsyth,
Mahoney and Ms. Flaherty, pursuant to which each received the following
awards:
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Craig.
A. Rogerson
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70,383 |
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140,766 |
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30,979 |
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61,958 |
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Stephen
C. Forsyth
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17,596 |
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35,191 |
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7,745 |
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15,489 |
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Billie
S. Flaherty
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9,150 |
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18,299 |
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4,027 |
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8,055 |
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Kevin
V. Mahoney
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6,334 |
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12,669 |
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2,788 |
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5,576 |
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The form
of Nonqualified Stock Option Agreement and Restricted Stock Unit Agreement are
attached hereto as Exhibits 99.1 and 99.2, respectively, and are incorporated
herein by reference.
On the Effective Date, Chemtura
implemented the Chemtura Corporation 2010 Emergence Award Plan, which provides
designated participants with the opportunity to receive an award based upon the
Company’s achievement of specified EBITDA goals for the 2011 fiscal
year. Awards granted under the 2010 Emergence Award Plan will be
settled in March 2012 upon measurement of the specified EBITDA goals set forth
in that plan in the form of up to 1 million shares of new common stock to be
issued under the 2010 LTIP.
A copy of each of the 2010 LTIP, EIP
Settlement Plan and 2010 Emergence Award Plan are attached hereto as Exhibits
99.3, 99.4 and 99.5, respectively, and are incorporated herein by
reference.
Employment
Agreements
On the Effective Date, Chemtura entered
into new employment agreements with each of Messrs. Rogerson and Forsyth and Ms.
Flaherty (the “Employment Agreements”). The Employment Agreements
provide for the continued employment of Mr. Rogerson as Chemtura’s President and
Chief Executive Officer, of Mr. Forsyth as Chemtura’s Executive Vice President
and Chief Financial Officer and of Ms. Flaherty as Chemtura’s Senior Vice
President, General Counsel and Corporate Secretary, in each case for a term
beginning on the Effective Date and continuing until December 31, 2014, and
automatically extending for additional 12 month terms thereafter until
terminated by either party (the “Employment Term”). Employment may be
terminated during the Employment Term by an executive with or without Good
Reason or by Chemtura upon an executive’s death, disability, or termination for
Cause or without Cause. Capitalized terms used but not defined within
this section have the meanings set forth in the Employment
Agreements.
The Employment Agreements provide for
an annual base salary of $1,000,000, $475,000 and $350,000 for each of Messrs.
Rogerson and Forsyth and Ms. Flaherty, respectively. The Employment
Agreements also provide that, for the 2010 fiscal year, the executives will be
eligible for a cash performance bonus under Chemtura’s 2010 Management Incentive
Plan, subject to achievement of the specified performance targets, and that
thereafter the executives will be paid an annual cash performance bonus (an
“Annual Bonus”) in respect of each fiscal year that ends during the Employment
Term, to the extent earned based on performance against objective performance
criteria. The annual bonus opportunity will be 100%, 70% and 50% of
base salary for each of Messrs. Rogerson and Forsyth and Ms. Flaherty,
respectively.
The Employment Agreements provide for
an award under the 2009 EIP of $2,500,000, $625,000 and $325,000 to each of
Messrs. Rogerson and Forsyth and Ms. Flaherty, respectively. The
executives will also participate in Chemtura’s 2010 EIP and 2010 Emergence Award
Plan and, commencing in 2011 and each year thereafter during the Employment
Period, the executives will be entitled to receive annually a grant of an
equity-based award under the 2010 LTIP with a grant date fair market value equal
to no less than the grant date fair market value of the EIP award provided to
the executive for the 2010 fiscal year.
The Employment Agreements also entitle
the executives, during the Employment Period, to paid vacation in accordance
with the applicable policies of Chemtura, and to participate in such medical,
dental and life insurance, retirement and other plans as Chemtura may have or
establish from time to time on terms and conditions applicable to other senior
executives of Chemtura generally.
If an executive's employment is
terminated by reason of his or her death or disability, Chemtura will pay the
executive or his or her estate all accrued benefits under their Employment
Agreement. If an executive's employment is terminated by Chemtura for
Cause or by the executive without Good Reason, Chemtura will pay the executive
or his or her estate all accrued benefits. If an executive's
employment is terminated by Chemtura without Cause or by the executive with Good
Reason, Chemtura will pay the executive or his or her estate: (i) all accrued
benefits; (ii) a lump sum payment of an amount equal to a pro rata portion
(based upon the number of days the executive was employed during the calendar
year in which the date of termination occurs) of the annual bonus that would
have been paid to the executive if he or she had remained employed based on
actual performance; (iii) an amount equal to the product of (x) 2.0, 1.5 or 1.0
for each of Messrs. Rogerson and Forsyth and Ms. Flaherty, respectively and (y)
the sum of the executive’s (I) base salary, (II) target bonus, and (III) annual
perquisite allowance, payable in accordance with Chemtura’s payroll policies in
effect on the date of termination for the 12 month period commencing upon the
executive’s date of termination; and (iv) outplacement services at a level
commensurate with the executive’s position in accordance with Chemtura’s
practices as in effect from time to time. In addition, all vested
outstanding equity awards will remain outstanding and exercisable, if
applicable, through their stated expiration dates, and the executive and his or
her covered dependents will be entitled to continued participation on the same
terms and conditions as applicable immediately prior to the executive’s date of
termination for the 2.0, 1.5 and 1.0 year periods, for each of Messrs. Rogerson
and Forsyth and Ms. Flaherty, respectively, following the date of termination in
such medical, dental, and hospitalization insurance coverage in which the
executive and his or her eligible dependents were participating immediately
prior to the date of termination. All amounts payable under the
Employment Agreements beyond the accrued benefits are subject to the executive’s
execution of a release of claims in favor of Chemtura.
If (i) an executive is terminated by
Chemtura, other than for Cause or disability, or resigns for Good Reason, during
the two-year period after a Change in Control (as such term is defined in the
Employment Agreements) or (ii) an executive is terminated by Chemtura prior to a
Change in Control, if the termination was at the request of a third party or
otherwise arose in anticipation of a Change in Control, then the executive or
his or her estate will receive the benefits otherwise payable in connection with
a termination by Chemtura without Cause or by the executive with Good Reason,
except that (A) in lieu of the continued payment of base salary, the executive
shall receive an amount equal to the product of (x) 3.0, in the case of Mr.
Rogerson, or 2.0 in the case of Mr. Forsyth or Ms. Flaherty, and (y) the sum of
the executive’s (I) base salary, (II) target bonus, and (III) annual perquisite
allowance and (B) executive shall be entitled to accelerated vesting of all
outstanding equity awards. The Employment Agreements
also provide for Section 280G gross-up protection for any payments and/or
benefits that might be paid as a result of a Change in Control, but only if the
payments the executive would receive upon a Change in Control exceed 310% of the
executive’s “base amount” (as defined under Section 280G). If the amount of
payments that the executive would receive upon a Change in Control is less than
310% of the executive’s base amount, then no gross-up payment will be made to
the executive and the amounts payable under the employment agreement will be
reduced to avoid the imposition of the Section 280G excise tax provided that
such reduction will only be made if such reduction results in a more favorable
after-tax position for the executive.
Pursuant to the Employment Agreements,
each of the executives also entered into a Confidentiality and IP Agreement and
a Non-Compete Agreement with Chemtura, pursuant to which each executive agreed
to certain restrictions on their use of confidential information and
intellectual property of Chemtura, as well as to refrain from solicitation of
Chemtura employees and competition with Chemtura for certain periods during and
following the Employment Term.
A copy of the Employment Agreements
with each of Messrs. Rogerson and Forsyth and Ms. Flaherty are attached hereto
as Exhibits 10.1, 10.2 and 10.3, respectively, and are incorporated by reference
herein.
Item
5.03 Amendments to Articles of Incorporation or Bylaws; Change in
Fiscal Year.
Pursuant to the Plan, on the Effective
Date, Chemtura filed with the Secretary of State of Delaware an Amended and
Restated Certificate of Incorporation (the “Certificate of
Incorporation”). Also pursuant to the Plan as of the Effective Date,
Chemtura adopted its Bylaws (the “Bylaws”). A description of the
material provisions of the Certificate of Incorporation and Bylaws is contained
in Chemtura’s Registration Statement on Form 8-A filed with the Securities and
Exchange Commission on November 9, 2010, which description is incorporated
herein by reference.
Copies of the Certificate of
Incorporation and By-laws are attached hereto as Exhibits 3.1 and 3.2,
respectively, and are incorporated herein by reference.
Item
9.01 Financial Statements and Exhibits
(d)
Exhibits
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3.1
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Amended
and Restated Certificate of Incorporation of Chemtura Corporation
(incorporated by reference to Exhibit 3.1 to Chemtura’s Registration
Statement on Form 8-A filed with the Securities and Exchange Commission on
November 9, 2010).
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3.2
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Bylaws
of Chemtura Corporation (incorporated by reference to Exhibit 3.2 to
Chemtura’s Registration Statement on Form 8-A filed with the Securities
and Exchange Commission on November 9, 2010).
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4.1*
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Senior
Secured Revolving Credit Facility Agreement, dated as of November 9, 2010,
among Chemtura Corporation and certain of its subsidiaries named therein,
as borrowers, Bank of America, N.A., as administrative agent and
collateral agent, the other agents party thereto and the Initial Lenders
and other Lenders party thereto.
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4.2*
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Guaranty,
dated as of November 9, 2010, pursuant to the Senior Secured Revolving
Facility Credit Agreement.
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4.3*
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Security
Agreement, dated as of November 9, 2010, pursuant to the Senior Secured
Revolving Facility Credit Agreement.
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4.4*
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First
Supplemental Indenture, dated as of November 9, 2010, among Chemtura
Corporation, the guarantors named therein and U.S. Bank National
Association.
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4.5*
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Guaranty,
dated as of November 9, 2010, pursuant to the Senior Secured Term Facility
Credit Agreement.
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4.6*
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Security
Agreement, dated as of November 9, 2010, pursuant to the Senior Secured
Term Facility Credit Agreement.
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10.1*
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Employment
Agreement, dated as of November 9, 2010, between Craig Rogerson and
Chemtura Corporation.
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10.2*
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Employment
Agreement, dated as of November 9, 2010, between Stephen Forsyth and
Chemtura Corporation.
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10.3*
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Employment
Agreement, dated as of November 9, 2010, between Billie Flaherty and
Chemtura Corporation.
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99.1*
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Form
of Nonqualified Stock Option Agreement
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99.2*
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Form
of Restricted Stock Unit Agreement
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99.3
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Chemtura
Corporation 2010 Long-Term Incentive Plan (incorporated by reference to
Exhibit 99.1 to Chemtura’s Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on November 9,
2010).
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99.4
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Chemtura
Corporation EIP Settlement Plan(incorporated by reference to Exhibit 99.2
to Chemtura’s Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on November 9, 2010).
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99.5
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Chemtura
Corporation Emergence Award Plan(incorporated by reference to Exhibit 99.3
to Chemtura’s Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on November 9, 2010).
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______________
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* Filed
herewith.
Signatures
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.
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Chemtura Corporation
(Registrant)
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By: /s/
Billie S. Flaherty
Name: Billie
S. Flaherty
Title: SVP,
General Counsel &
Secretary
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3.1
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Amended
and Restated Certificate of Incorporation of Chemtura Corporation
(incorporated by reference to Exhibit 3.1 to Chemtura’s Registration
Statement on Form 8-A filed with the Securities and Exchange Commission on
November 9, 2010).
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3.2
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Bylaws
of Chemtura Corporation (incorporated by reference to Exhibit 3.2 to
Chemtura’s Registration Statement on Form 8-A filed with the Securities
and Exchange Commission on November 9, 2010).
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4.1*
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Senior
Secured Revolving Credit Facility Agreement, dated as of November 9, 2010,
among Chemtura Corporation and certain of its subsidiaries named therein,
as borrowers, Bank of America, N.A., as administrative agent and
collateral agent, the other agents party thereto and the Initial Lenders
and other Lenders party thereto.
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4.2*
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Guaranty,
dated as of November 9, 2010, pursuant to the Senior Secured Revolving
Facility Credit Agreement.
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4.3*
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Security
Agreement, dated as of November 9, 2010, pursuant to the Senior Secured
Revolving Facility Credit Agreement.
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4.4*
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First
Supplemental Indenture, dated as of November 9, 2010, among Chemtura
Corporation, the guarantors named therein and U.S. Bank National
Association.
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4.5*
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Guaranty,
dated as of November 9, 2010, pursuant to the Senior Secured Term Facility
Credit Agreement.
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4.6*
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Security
Agreement, dated as of November 9, 2010, pursuant to the Senior Secured
Term Facility Credit Agreement.
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10.1*
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Employment
Agreement, dated as of November 9, 2010, between Craig Rogerson and
Chemtura Corporation.
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10.2*
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Employment
Agreement, dated as of November 9, 2010, between Stephen Forsyth and
Chemtura Corporation.
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10.3*
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Employment
Agreement, dated as of November 9, 2010, between Billie Flaherty and
Chemtura Corporation.
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99.1*
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Form
of Nonqualified Stock Option Agreement
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99.2*
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Form
of Restricted Stock Unit Agreement
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99.3
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Chemtura
Corporation 2010 Long-Term Incentive Plan (incorporated by reference to
Exhibit 99.1 to Chemtura’s Registration Statement on Form S-8 filed with
the Securities and Exchange Commission on November 9,
2010).
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99.4
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Chemtura
Corporation EIP Settlement Plan(incorporated by reference to Exhibit 99.2
to Chemtura’s Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on November 9, 2010).
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99.5
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Chemtura
Corporation Emergence Award Plan(incorporated by reference to Exhibit 99.3
to Chemtura’s Registration Statement on Form S-8 filed with the Securities
and Exchange Commission on November 9, 2010).
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______________
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* Filed
herewith.