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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) MARCH 22, 2007
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HARSCO CORPORATION
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(Exact name of registrant as specified in its charter)
DE 1-3970 23-1483991
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
350 POPLAR CHURCH ROAD, CAMP HILL PA 17011
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 717-763-7064
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(Former name or former address, if changed since last report)
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))
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ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS;
APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
(e) On March 22, 2007, the Board of Directors (the "Board") of Harsco
Corporation (the "Company") approved changes to the Company's long-term
incentive compensation program under the Company's 1995 Executive Incentive
Compensation Plan (the "Plan"). Commencing with the 2010 award year, grants of
performance-based restricted stock units under the long-term incentive
compensation program will be based on increases in economic value added
(EVA(R)), which will be measured over a three-year period beginning with the
2007-2009 performance period. The Board must approve the grants prior to their
award and the grants generally vest over a three-year period subsequent to the
Board's approval. The aforementioned program is described in greater detail in
the Authorization, Terms and Conditions of Other Performance Awards attached
hereto as Exhibit 10.1 and hereby incorporated herein by reference.
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
(d) Exhibits
Exhibit 10.1 Authorization, Terms and Conditions of Other Performance
Awards under the Harsco Corporation 1995 Executive
Incentive Compensation Plan (as amended and restated)
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.
HARSCO CORPORATION
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(Registrant)
DATE March 28, 2007 /s/ Salvatore D. Fazzolari
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Salvatore D. Fazzolari
President, Chief Financial Officer
and Treasurer
EXHIBIT 10.1
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HARSCO CORPORATION
1995 EXECUTIVE INCENTIVE COMPENSATION PLAN
AUTHORIZATION, TERMS, AND CONDITIONS OF
OTHER PERFORMANCE AWARDS
(ORIGINAL DOCUMENT AS OF MARCH 22, 2007)
1. Purpose of Other Performance Awards
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The grant of Other Performance Awards ("Awards") under the 1995 Executive
Incentive Compensation Plan is intended to further the profitable growth
of Harsco Corporation (the "Company") by offering a long-term incentive
opportunity, in addition to base salary and short-term incentives, to
officers and key corporate and divisional employees of the Company and
its subsidiaries who are largely responsible for such growth, to the
benefit of the Company's stockholders. Such Awards are expected to
encourage recipients to improve their performance and remain with the
Company and its subsidiaries, and encourage other qualified persons to
seek and accept employment with the Company and its subsidiaries.
2. Overview
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This document (the "Terms and Conditions") sets forth the authorization,
terms, and conditions of Awards under the Company's 1995 Executive
Incentive Compensation Plan (the "1995 Plan"), as determined by the
Management Development and Compensation Committee (the "Committee") and
the Board of Directors. These Terms and Conditions are subject to, and
qualified in their entirety by reference to, the 1995 Plan, including
Section 6(i) of the 1995 Plan setting forth certain terms relating to
Awards. If any of the Terms and Conditions are inconsistent with the 1995
Plan, the terms of the 1995 Plan shall control. Words used in these Terms
and Conditions but not otherwise defined herein shall have the meanings
ascribed to such words in the 1995 Plan.
3. Definitions
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In addition to terms defined in Sections 1 and 2 hereof, the following
terms shall be defined as set forth below:
3.1 Base Year means the calendar year preceding a given three-year
Performance Period for which the Awards are to be computed.
3.2 Bonus Multiple means the sum of the Excess Bonus Multiple and the
Target Multiple. A Bonus Multiple greater than 1.5 will be reduced
to 1.5. A Bonus Multiple less than 0.5 will be reduced to zero.
3.3 Cumulative Three-Year Actual EVA(R) means, for any three-year
Performance Period for the consolidated Company, the sum of the EVA
performance for each of the three years. Cumulative Three-Year
Actual EVA may be a negative number.
3.4 Cumulative Three-Year EVA Interval means the difference between the
Cumulative Three-Year Actual EVA and the Cumulative Three-Year
Target EVA at the point at which the Bonus Multiple is zero. The
Cumulative Three-Year EVA Interval is also equal to the difference
between the Cumulative Three-Year Actual EVA level at which the
Bonus Multiple is 2.0 and the Cumulative Three-Year Target EVA. The
Cumulative Three-Year EVA Interval will be established by the
Committee in accordance with Section 4.1.
3.5 Cumulative Three-Year Target EVA means, for any three-year
Performance Period for the consolidated Company, the sum of the Base
Year EVA times three plus the expected EVA improvement for year one
times three plus the expected EVA improvement for year two times two
plus the expected EVA improvement for year three. Cumulative
Three-Year Target EVA is generally intended to represent a level of
performance which the Committee believes, in its sole discretion,
would merit payment of incentive compensation at a normal or median
level. The Cumulative Three-Year Target EVA shall be established by
the Committee in accordance with Section 4.1.
3.6 EVA Center means the Company as a whole or any division, subsidiary
or business unit of the Company recognized by the Committee. For
purposes of the Awards, only the consolidated Company is considered.
3.7 EVA or Economic Value Added means the level of cumulative economic
value added generated by the Company during a given three-year
Performance Period which is determined in accordance with the
procedures and guidelines established by the Company within the time
period specified in Code Section 162(m).
3.8 Excess Bonus Multiple means the quotient of the Excess Cumulative
Three-Year EVA Improvement (actual over target) divided by the
Cumulative Three-Year EVA Interval. This amount can be a negative
number.
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3.9 Excess Cumulative Three-Year EVA Improvement means the difference
between the Cumulative Three-Year Actual EVA for the Performance
Period less the Cumulative Three-Year Target EVA for that same
Performance Period. Excess Cumulative Three-Year EVA Improvement can
have a negative value.
3.10 Fair Market Value means, as of any given date, the average of the
high and the low sale prices of a share of common stock, as reported
by a reputable information service for such date or, if no such
prices are reported for such date, on the most recent trading day
prior to such date for which such prices were reported.
3.11 Participant means an officer or key employee of the Company or a
subsidiary, who has been identified by the Committee as being
eligible for a potential award.
3.12 Performance Period means the three-year period during which the
achievement of Cumulative Three-Year Target EVA with respect to a
given Award shall be measured.
3.13 Performance Units Declared means the product of the Bonus Multiple
and the Target Performance Units.
3.14 Restricted Stock Units means the currency of Awards under the 1995
Plan. The shares of common stock underlying the Restricted Stock
Units shall not be issued to a Participant until the applicable
Restricted Stock Units have vested. Terms of vesting of an Award
shall be specified in the Restricted Stock Units Agreement
acknowledging the grant and specifying certain terms regarding the
grant.
3.15 Retirement means retirement at or after age 62.
3.16 Target Multiple means, for purposes of calculating a Participant's
Award, 1.0.
3.17 Target Performance Units means the number of Restricted Stock Units
allocated to a Participant during the three-year Performance Period.
The number of Target Performance Units awarded to a Participant
varies based on the position of the participant within the Company
and is established by the Committee.
3.18 Termination means a termination of employment immediately after
which the Participant is not an employee of the Company or any
subsidiary. Conversion from full-time or part-time employment or a
leave of absence from employment, if approved by the Committee,
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shall not be deemed to be a Termination for purposes of these Terms
and Conditions.
4. Performance Objectives and Award Notification
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4.1 Performance Objectives. Within the time period specified in Code
Section 162(m), the Committee shall specify the Cumulative
Three-Year Target EVA and the Cumulative Three-Year EVA Interval for
the Company. Initially, the Cumulative Three-Year Target EVA and the
Cumulative Three-Year EVA Interval shall be established for the
subsequent three year performance cycle. Annually thereafter, the
applicable Cumulative Three-Year Target EVA and Cumulative
Three-Year EVA Interval will be established by the Committee for the
upcoming three year performance cycle.
4.2 Notification of Awards. The Company shall notify members of the
class of eligible employees of their selection for participation and
the applicable Cumulative Three-Year Target EVA and Cumulative
Three-Year EVA Interval for the Performance Period as promptly as
practicable. Such notification shall be accomplished in any
reasonable manner, in the discretion of the Committee.
5. Determination of Awards and Awards of Restricted Stock Units
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5.1 Determination of Award and Limitation Thereof. As promptly as
practicable following the end of each Performance Period, the
Company shall determine the Cumulative Three-Year EVA achieved. The
Committee shall review the EVA determinations along with the other
material terms and conditions relating to the payout of an award
under the Plan. If all conditions for the payout of an Award have
been satisfied, the Committee shall then determine the Award if any,
to be granted as a result of the Cumulative Three-Year Actual EVA
achieved by the Company for the Performance Period. The Award to be
granted shall be calculated by determining the Cumulative Three-Year
Actual EVA for the Performance Period and comparing that with the
Cumulative Three-Year Target EVA and the Cumulative Three-Year EVA
Interval to determine the Excess EVA Improvement. The Committee
shall then determine the Excess Bonus Multiple, the Bonus Multiple
and the Performance Units Declared. A sample calculation of an award
is attached as Exhibit A to this Plan.
5.2 Award of Restricted Stock Units. At the time the Committee
determines a Participant's Performance Units to be awarded under
Section 5.1, each Participant shall become entitled, subject to
Sections 5.3 and 5.4, to receive an award of Restricted Stock Units
in an amount equal to his or her Performance Units award. Such
Restricted
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Stock Units award shall be made as promptly as practicable after the
determination by the Committee of the Participant's Performance
Units award.
5.3 Committee Discretion. The Committee may, at any time prior to the
payment under Section 5.2, adjust or modify the Performance Unit
awards determined under Section 5.1: (1) in recognition of unusual
or nonrecurring events affecting the Company, or the financial
statements or results thereof, or in response to changes in
applicable laws (including tax, disclosure, and other laws),
regulations, accounting principles, or other circumstances deemed
relevant by the Committee, (2) in view of the Committee's assessment
of the business strategy of the Company, performance of comparable
organizations, economic and business conditions, personal
performance of the Participant, and other circumstances deemed
relevant by the Committee, or (3) with respect to any Participant
whose position or duties with the Company or any subsidiary has
changed; provided, however, that no such adjustment or modification
may be made with respect to an Award granted to a "covered employee"
within the meaning of Code Section 162(m) and regulations thereunder
if and to the extent that such adjustment or modification would
increase the amount of compensation payable to such covered
employee. Examples of considerations which might influence the
Committee in exercising its discretion hereunder include:
(a) Achievement of a rate of return on stockholders' equity which
was either significantly more or significantly less than the
Committee's estimate of the Company's competitive cost of
equity.
(b) A substantial change in the established strategic performance
objectives during the period.
5.4 Determination of Award In the Event of Termination. In the event of
a Participant's Termination, such Participant (or his or her
beneficiary) shall receive, in lieu of the award specified in
Section 5.2, a determination of such Participant's Award as provided
in this Section 5.4.
(a) In the event of a Participant's Termination by reason of
Retirement, death, or full and permanent disability (as
determined by the Committee) after the end of a Performance
Period to which an Award relates but prior to the Committee's
determination of the Participant's Performance Units Award, the
calculation of the Participant's Performance Unit award shall
be determined under Section 5.1 and the remaining provisions of
this Section 5.
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(b) In the event of a Participant's Termination (i) for any reason
prior to the end of a Performance Period to which an Award
relates or (ii) for any reason other than as set forth in
clause (a) above after the end of a Performance Period to which
an Award relates but prior to the Committee's determination of
the Participant's Performance Units Award, the Award of such
Participant for such Performance Period shall be forfeited.
5.5 Certification. Determinations by the Committee under this Section 5
shall be set forth in a written certification, which may include for
this purpose approved minutes of a meeting of the Committee at which
such determinations were made.
6. Administration
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Administrative details relating to Awards shall be handled by the
Administrator, which shall be one or more individuals, employed in the
Company's corporate office and designated by the Chief Executive Officer
of the Company to serve in such capacity.
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EXHIBIT A
EXAMPLE PERFORMANCE UNIT AWARD CALCULATION
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Illustrative Example
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2005 2006 2007 2008
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Prior Year EVA 40,000 40,000 40,000 40,000
Year 1 Expected Improvement 7,300 7,300 7,300
Year 2 Expected Improvement 7,700 7,700
Year 3 Expected Improvement 7,700
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Total Expected EVA 47,300 55,000 62,700
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Cumulative 3-Year EVA Target 165,000
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Actual EVA Year 1 55,000
Actual EVA Year 2 60,000
Actual EVA Year 3 65,000
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Actual Cumulative 3-Year EVA 180,000
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= Excess Cumulative 3-Year EVA 15,000
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/ Divide by Cumulative 3-Year EVA Interval 118,000
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= Excess Bonus Multiple 0.13x
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+ Target Bonus Multiple 1.00x
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= Bonus Multiple Earned 1.13x
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Actual Bonus Multiple Declared (Cap - 1.50x, Floor - 0.50x) 1.13x
x Target Performance Units 10,000
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= Performance Units Declared 11,300
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