Albemarle Corp 10-Q for FY2025 Q3
Albemarle Corp (ALB)
10-Q
2025-11-05
For: 2025-09-30
View Original
Added on
April 09, 2026
About this 10-Q
Albemarle Corp filed this 10-Q on November 5, 2025, covering the quarter ended September 30, 2025 (FY2025 Q3).
Headline figures
Quarter ended September 30, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.31B
- down 3.5% from $1.35B a year earlier
- Net loss
- $160.69M
- compared with a net loss of $1.07B a year earlier
- Diluted EPS
- -$1.72
- compared with -$9.45 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________________________
FORM 10-Q
_________________________________________________
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For Quarterly Period Ended September 30, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number 1-12658
_________________________________________________
(Exact name of registrant as specified in its charter)
_________________________________________________
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code - (980) 299-5700
_________________________________________________
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:
| ☒ | Accelerated filer | ☐ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Number of shares of common stock, $.01 par value, outstanding as of October 29, 2025: 117,697,540
ALBEMARLE CORPORATION
INDEX – FORM 10-Q
| Page Number(s) | ||||||||
| EXHIBITS | ||||||||
3
PART I. FINANCIAL INFORMATION
| Item 1. | Financial Statements (Unaudited). | ||||
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF LOSS
(In Thousands, Except Per Share Amounts)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold(a) | |||||||||||||||||||||||
| Gross profit (loss) | ( | ( | |||||||||||||||||||||
| Selling, general and administrative expenses | |||||||||||||||||||||||
| Goodwill impairment charges | |||||||||||||||||||||||
| Restructuring charges and asset write-offs | |||||||||||||||||||||||
| Research and development expenses | |||||||||||||||||||||||
| Operating loss | ( | ( | ( | ( | |||||||||||||||||||
| Interest and financing expenses | ( | ( | ( | ( | |||||||||||||||||||
| Other income (expenses), net | ( | ||||||||||||||||||||||
| Loss before income taxes and equity in net income of unconsolidated investments | ( | ( | ( | ( | |||||||||||||||||||
| Income tax (benefit) expense | ( | ( | |||||||||||||||||||||
| Loss before equity in net income of unconsolidated investments | ( | ( | ( | ( | |||||||||||||||||||
| Equity in net income of unconsolidated investments (net of tax) | |||||||||||||||||||||||
| Net loss | ( | ( | ( | ( | |||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation | ( | ( | ( | ( | |||||||||||||||||||
| Mandatory convertible preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Basic loss per share attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted loss per share attributable to common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Weighted-average common shares outstanding – basic | |||||||||||||||||||||||
| Weighted-average common shares outstanding – diluted | |||||||||||||||||||||||
(a)Included purchases from related unconsolidated affiliates of $146.9 million and $441.1 million for the three-month periods ended September 30, 2025 and 2024, respectively, and $425.3 million and $1.6 billion for the nine-month periods ended September 30, 2025 and 2024, respectively.
See accompanying Notes to the Condensed Consolidated Financial Statements.
4
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In Thousands)
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Other comprehensive (loss) income, net of tax: | |||||||||||||||||||||||
| Foreign currency translation and other | ( | ||||||||||||||||||||||
| Cash flow hedge | ( | ( | ( | ||||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ||||||||||||||||||||||
| Comprehensive (loss) income | ( | ( | ( | ||||||||||||||||||||
| Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
| Comprehensive (loss) income attributable to Albemarle Corporation | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
5
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands, Except Per Share Amounts)
(Unaudited)
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Assets | |||||||||||
| Current assets: | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Trade accounts receivable, less allowance for credit losses (2025 – $ | |||||||||||
| Other accounts receivable | |||||||||||
| Inventories | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Property, plant and equipment, at cost | |||||||||||
| Less accumulated depreciation and amortization | |||||||||||
| Net property, plant and equipment | |||||||||||
| Investments | |||||||||||
| Other assets | |||||||||||
| Goodwill | |||||||||||
| Other intangibles, net of amortization | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities And Equity | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable to third parties | $ | $ | |||||||||
| Accounts payable to related parties | |||||||||||
| Accrued expenses | |||||||||||
| Current portion of long-term debt | |||||||||||
| Dividends payable | |||||||||||
| Income taxes payable | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Postretirement benefits | |||||||||||
| Pension benefits | |||||||||||
| Other noncurrent liabilities | |||||||||||
| Deferred income taxes | |||||||||||
Commitments and contingencies (Note 7) | |||||||||||
| Equity: | |||||||||||
| Albemarle Corporation shareholders’ equity: | |||||||||||
Common stock, $ | |||||||||||
Mandatory convertible preferred stock, Series A, no par value, $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Retained earnings | |||||||||||
| Total Albemarle Corporation shareholders’ equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
6
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(In Thousands, Except Per Share Amounts)
(Unaudited)
| (In Thousands, Except Share Data) | Mandatory Convertible Preferred Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Albemarle Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amounts | Shares | Amounts | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends declared, $ | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in ownership interest of noncontrolling interest | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at June 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends declared, $ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
7
| (In Thousands, Except Share Data) | Mandatory Convertible Preferred Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Retained Earnings | Total Albemarle Shareholders’ Equity | Noncontrolling Interests | Total Equity | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amounts | Shares | Amounts | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends declared, $ | ( | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Change in ownership interest of noncontrolling interest | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | ( | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2025 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Net (loss) income | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Common stock dividends declared, $ | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mandatory convertible preferred stock cumulative dividends | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of mandatory convertible preferred stock, net | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Withholding taxes paid on stock-based compensation award distributions | ( | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at September 30, 2024 | $ | $ | $ | $ | ( | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
8
ALBEMARLE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash and cash equivalents at beginning of year | $ | $ | |||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | ( | ( | |||||||||
| Adjustments to reconcile net loss to cash flows from operating activities: | |||||||||||
| Depreciation and amortization | |||||||||||
| Non-cash goodwill impairment charges | |||||||||||
| Non-cash restructuring and asset write-offs | |||||||||||
| Stock-based compensation and other | |||||||||||
| Equity in net income of unconsolidated investments (net of tax) | ( | ( | |||||||||
| Dividends received from unconsolidated investments and nonmarketable securities | |||||||||||
| Pension and postretirement expense | |||||||||||
| Pension and postretirement contributions | ( | ( | |||||||||
| Realized loss on investments in marketable securities | |||||||||||
| Unrealized (gain) loss on investments in marketable securities | ( | ||||||||||
| Deferred income taxes | ( | ||||||||||
| Working capital changes | |||||||||||
| Noncurrent liability changes and other, net | ( | ||||||||||
| Net cash provided by operating activities | |||||||||||
| Cash flows from investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Proceeds from sale of property and equipment | |||||||||||
| Proceeds from sale of available for sale debt securities | |||||||||||
| Proceeds (payments) from settlement of foreign currency forward contracts, net | ( | ||||||||||
| Sales of marketable securities, net | |||||||||||
| Investments in equity investments and nonmarketable securities | ( | ( | |||||||||
| Net cash provided by (used in) investing activities | ( | ||||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from issuance of mandatory convertible preferred stock, net of issuance costs | |||||||||||
| Repayments of long-term debt and credit agreements | ( | ( | |||||||||
| Proceeds from borrowings of long-term debt and credit agreements | |||||||||||
| Other debt repayments, net | ( | ( | |||||||||
| Dividends paid to common shareholders | ( | ( | |||||||||
| Dividends paid to mandatory convertible preferred shareholders | ( | ( | |||||||||
| Dividends paid to noncontrolling interests | ( | ( | |||||||||
| Proceeds from exercise of stock options | |||||||||||
| Withholding taxes paid on stock-based compensation award distributions | ( | ( | |||||||||
| Other | ( | ( | |||||||||
| Net cash (used in) provided by financing activities | ( | ||||||||||
| Net effect of foreign exchange on cash and cash equivalents | |||||||||||
| Increase in cash and cash equivalents | |||||||||||
| Cash and cash equivalents at end of period | $ | $ | |||||||||
See accompanying Notes to the Condensed Consolidated Financial Statements.
9
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1—Basis of Presentation:
In the opinion of management, the accompanying unaudited condensed consolidated financial statements of Albemarle Corporation and our wholly-owned, majority-owned and controlled subsidiaries (collectively, “Albemarle,” “we,” “us,” “our” or the “Company”) contain all adjustments necessary for a fair statement, in all material respects, of our consolidated balance sheets as of September 30, 2025 and December 31, 2024, our consolidated statements of loss, consolidated statements of comprehensive (loss) income and consolidated statements of changes in equity for the three-month and nine-month periods ended September 30, 2025 and 2024 and our condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2025 and 2024. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission (“SEC”) on February 12, 2025. The December 31, 2024 consolidated balance sheet data herein was derived from audited financial statements, but does not include all disclosures required by generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). The results of operations for the three-month and nine-month periods ended September 30, 2025 are not necessarily indicative of the results to be expected for the full year.
Revision of Previously Issued Financial Information
As previously reported in the Company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025, during the second quarter of 2025, the Company identified an error in classification within its condensed consolidated statements of cash flows related to the proceeds from settlement and unrealized gains or losses from foreign currency forward contracts, affecting the cash flows from operating activities section, the cash flows from investing activities section and the Net effect of foreign exchange on cash and cash equivalents line of the statements of cash flows. The identified misclassification impacted our previously filed annual financial statements for the fiscal years ended December 31, 2024, 2023 and 2022, and quarterly financial statements for each of the fiscal quarters of fiscal year 2024 and the first fiscal quarter of fiscal year 2025 (collectively, the “Prior Financial Statements”). In addition, the Company made adjustments to correct for other previously identified immaterial errors. The Company assessed the materiality of the error in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and determined that the resulting misclassification was not material in any of the Prior Financial Statements, individually or in the aggregate. This revision had no impact on the consolidated balance sheets, consolidated statements of income (loss), consolidated statements of comprehensive income (loss), or consolidated statements of changes in equity of the Prior Financial Statements or notes thereto.
A summary of the revisions to the impacted periods presented in this Quarterly Report on Form 10-Q are shown below (in thousands):
| Nine Months Ended September 30, 2024 | |||||||||||||||||
| As Reported | Revision | As Revised | |||||||||||||||
| Working capital changes | $ | $ | $ | ||||||||||||||
| Other, net | ( | ( | ( | ||||||||||||||
| Net cash provided by operating activities | ( | ||||||||||||||||
| Capital expenditures | $ | ( | $ | ( | $ | ( | |||||||||||
| Payments for settlement of foreign currency forward contracts, net | ( | ( | |||||||||||||||
| Net cash provided by (used in) investing activities | ( | ( | ( | ||||||||||||||
| Net effect of foreign exchange on cash and cash equivalents | $ | ( | $ | $ | |||||||||||||
10
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 2—Inventories:
The following table provides a breakdown of inventories at September 30, 2025 and December 31, 2024 (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Finished goods | $ | $ | |||||||||
Raw materials and work in process(a) | |||||||||||
| Stores, supplies and other | |||||||||||
Total(b) | $ | $ | |||||||||
(a)Includes $310.5 million and $290.6 million at September 30, 2025 and December 31, 2024, respectively, of work in process in our Energy Storage segment.
The Company purchases certain of its inventory from its equity method investments (primarily the Windfield Holdings Pty. Ltd. (“Windfield”) joint venture) and eliminates the balance of intra-entity profits on purchases of such inventory that remains unsold at the balance sheet date in Inventories, specifically finished goods and equally reduces Equity in net income of unconsolidated investments (net of tax) on the consolidated statements of loss. The balance of intra-entity profits on inventory purchased from equity method investments in Inventories totaled $34.8 million and $66.8 million at September 30, 2025 and December 31, 2024, respectively. The intra-entity profit is recognized in Equity in net income of unconsolidated investments (net of tax) in the period that converted inventory is sold to a third-party customer. In the same period, the intra-entity profit is also recognized as higher Cost of goods sold on the consolidated statements of loss.
NOTE 3—Investments:
Unconsolidated Joint Ventures
The following table details the Company’s equity in net income of unconsolidated investments (net of tax) for the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Windfield | $ | $ | $ | $ | |||||||||||||||||||
| Other joint ventures | |||||||||||||||||||||||
| Total | $ | $ | $ | $ | |||||||||||||||||||
The Company holds a 49 % equity interest in Windfield, where the ownership parties share risks and benefits disproportionate to their voting interests. As a result, the Company considers Windfield to be a variable interest entity (“VIE”), however this investment is not consolidated as the Company is not the primary beneficiary. The carrying amount of the Company’s 49 % equity interest in Windfield, which is the Company’s most significant VIE, was $674.5 million and $583.6 million at September 30, 2025 and December 31, 2024, respectively. The Company’s unconsolidated VIEs are reported in Investments on the consolidated balance sheets. The Company does not guarantee debt for, or have other financial support obligations to, these entities, and its maximum exposure to loss in connection with its continuing involvement with these entities is limited to the carrying value of the investments.
The following table summarizes the unaudited results of operations for the Windfield joint venture, which met the significant subsidiary test for subsidiaries not consolidated or 50% or less owned persons under Rule 10-01 of Regulation S-X, for the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
11
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Net sales | $ | $ | $ | $ | |||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
Public Equity Securities
Included in the Company’s investments balance are holdings in equity securities of public companies. The fair value is measured using publicly available share prices of the investments, with any changes reported in Other income (expenses), net in our consolidated statements of loss. During the three-month and nine-month periods ended September 30, 2025, the Company recorded unrealized mark-to-market gains of $7.9 million and $3.1 million, respectively, in Other income (expenses), net for all public equity securities held at the end of the balance sheet date. During the three-month and nine-month periods ended September 30, 2024, the Company recorded unrealized mark-to-market losses of $5.0 million and $32.2 million, respectively, in Other income (expenses), net for all public equity securities held at the end of the balance sheet date.
In January 2024, the Company sold equity securities of a public company for proceeds of approximately $81.5 million. As a result of the sale, the Company realized a loss of $33.7 million in Other income (expenses), net during the nine months ended September 30, 2024.
Other
As part of the proceeds from the sale of the fine chemistry services (“FCS”) business on June 1, 2021, W.R. Grace & Co. (“Grace”) issued Albemarle preferred equity of a Grace subsidiary having an aggregate stated value of $270 million. The preferred equity began accruing payment-in-kind (“PIK”) dividends at an annual rate of 12 % on June 1, 2023. In June 2025, the Company redeemed the preferred equity from Grace for an aggregate value of $307.4 million, comprised of $288.0 million in cash received in June 2025 for the redemption and $19.4 million in cash previously received for tax liabilities. As a result, the Company recorded a loss of $38.0 million within Other income (expenses), net during the nine months ended September 30, 2025, representing the difference between the cash received and the recorded fair value of $326.0 million prior to redemption.
NOTE 4—Goodwill and Other Intangibles:
The following table summarizes the changes in goodwill by reportable segment for the nine-month period ended September 30, 2025 (in thousands):
| Energy Storage | Specialties | Ketjen | Total | ||||||||||||||||||||||||||
Balance at December 31, 2024(a) | $ | $ | $ | $ | |||||||||||||||||||||||||
Impairment charges(b) | ( | ( | |||||||||||||||||||||||||||
| Foreign currency translation adjustments | |||||||||||||||||||||||||||||
Balance at September 30, 2025(c) | $ | $ | $ | $ | |||||||||||||||||||||||||
(a) Balance at December 31, 2024 included an accumulated impairment loss of $6.8 million from the Performance Catalyst Solutions reporting unit within the Ketjen segment. As a result, the balance of Ketjen goodwill at December 31, 2024 fully consisted of goodwill related to the Refining Solutions reporting unit.
(b) During the three months ended September 30, 2025, the Company made significant progress on the potential divestiture of the Refining Solutions reporting unit. The progression of related discussions indicated it was more likely than not that the fair value of the Refining Solutions reporting unit was less than its carrying value as of September 30, 2025. Accordingly, the Company performed an interim goodwill impairment test as of that date. Subsequent to the balance sheet date, the Company entered into definitive agreements on October 23, 2025 and October 25, 2025 to divest its 50 % ownership interest in Eurecat S.A., a joint venture within the Refining Solutions reporting unit, and to divest the controlling ownership interest in the remaining Refining Solutions business, respectively (see Note 20, "Subsequent Events," for further details). The agreed upon transaction prices in these agreements corroborate the conclusion reached in the interim impairment analysis that the carrying value of the Refining Solutions reporting unit exceeded its fair value as of September 30, 2025. As a result, the Company recorded a $181.1 million non-cash goodwill impairment charge, representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment.
12
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(c) Balance at September 30, 2025 included an accumulated impairment loss of $187.9 million from the Refining Solutions and Performance Catalyst Solutions reporting units within the Ketjen segment.
The following table summarizes the changes in other intangibles and related accumulated amortization for the nine-month period ended September 30, 2025 (in thousands):
| Customer Lists and Relationships | Trade Names and Trademarks(a) | Patents and Technology | Other | Total | |||||||||||||||||||||||||
| Gross Asset Value | |||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Foreign currency translation adjustments and other | |||||||||||||||||||||||||||||
Balance at September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Accumulated Amortization | |||||||||||||||||||||||||||||
Balance at December 31, 2024 | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
| Amortization | ( | ( | ( | ( | |||||||||||||||||||||||||
| Foreign currency translation adjustments and other | ( | ( | ( | ( | |||||||||||||||||||||||||
Balance at September 30, 2025 | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||||||
Net Book Value at December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Net Book Value at September 30, 2025 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(a) Net Book Value includes only indefinite-lived intangible assets.
NOTE 5—Long-Term Debt:
Long-term debt at September 30, 2025 and December 31, 2024 consisted of the following (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| $ | $ | ||||||||||
| Interest-free loan | |||||||||||
| Variable-rate foreign bank loans | |||||||||||
| Finance lease obligations | |||||||||||
| Other | |||||||||||
| Unamortized discount and debt issuance costs | ( | ( | |||||||||
| Total long-term debt | |||||||||||
| Less amounts due within one year | |||||||||||
| Long-term debt, less current portion | $ | $ | |||||||||
Accounts Receivable Purchase Agreement
We are party to a master receivables purchase agreement, under which we may sell up to approximately $94 million of available and eligible outstanding customer accounts receivable generated by sales to certain customers. The agreement is uncommitted and can be terminated by us or the purchaser upon notice in accordance with the terms of the agreement.
13
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the consolidated balance sheets as of the effective time of the sales transaction. During the three-month and nine-month periods ended September 30, 2025, the Company sold and removed approximately $45.8 million and $106.6 million, respectively, of accounts receivable under this master receivables purchase agreement. The Company incurred approximately $0.2 million and $0.3 million, respectively, of fees associated with the master receivables purchase agreement during the three-month and nine-month periods ended September 30, 2025. Costs associated with the sales of receivables are reflected in the consolidated statements of loss for the periods in which the sales occur.
NOTE 6—Other Noncurrent Liabilities:
Other noncurrent liabilities consist of the following at September 30, 2025 and December 31, 2024 (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
Transition tax on foreign earnings(a) | $ | $ | |||||||||
| Liabilities related to uncertain tax positions | |||||||||||
| Executive deferred compensation plan obligation | |||||||||||
Environmental liabilities(c) | |||||||||||
| Asset retirement obligations | |||||||||||
Tax indemnification liability(d) | |||||||||||
| Deferred revenue | |||||||||||
Capital expenditure incentive payables(e) | |||||||||||
Other(f) | |||||||||||
| Total | $ | $ | |||||||||
(a)Noncurrent portion of one-time transition tax on foreign earnings.
(b)See Note 13, “Leases.”
(c)See Note 7, “Commitments and Contingencies.”
(d)Indemnification of certain income and non-income tax liabilities, primarily associated with the Chemetall Surface Treatment entities sold in 2017.
(e)When constructing new facilities or making major enhancements to existing facilities, we may have the opportunity to enter into incentive agreements with local government agencies in order to reduce certain state and local tax expenditures. Under these agreements, we transfer the related assets to various local government entities and receive bonds. We immediately lease the facilities from the local government entities and have an option to repurchase the facilities for a nominal amount upon tendering the bonds to the local government entities at various predetermined dates. The bonds and the associated obligations for the leases of the facilities offset values, and the underlying assets are recorded in property, plant and equipment.
(f)No individual component exceeds 5% of total liabilities.
In the normal course of business, amounts received from customers in advance of the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue, and are recognized within Net sales as the Company satisfies the related performance obligation. During the nine-month period ended September 30, 2025, the Company received $350 million from a customer for the delivery of specified amounts of spodumene and lithium salts over the next 5 years. $65.6 million of deferred revenue is expected to be recognized within Net sales over the next twelve months and is reported in Accrued expenses on the consolidated balance sheet. There was no
14
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 7—Commitments and Contingencies:
Environmental
The following activity was recorded in environmental liabilities for the nine months ended September 30, 2025 (in thousands):
Beginning balance at December 31, 2024 | $ | ||||
| Expenditures | ( | ||||
| Accretion of discount | |||||
| Foreign currency translation adjustments and other | |||||
Ending balance at September 30, 2025 | |||||
| Less amounts reported in Accrued expenses | |||||
| Amounts reported in Other noncurrent liabilities | $ | ||||
Environmental remediation liabilities included discounted liabilities of $16.9 million and $16.8 million at September 30, 2025 and December 31, 2024, respectively, discounted at rates with a weighted-average of 4.0 34.2 million and $34.5 million at September 30, 2025 and December 31, 2024, respectively.
The amounts recorded represent our future remediation and other anticipated environmental liabilities. These liabilities typically arise during the normal course of our operational and environmental management activities or at the time of acquisition of the site, and are based on internal analysis as well as input from outside consultants. As evaluations proceed at each relevant site, changes in risk assessment practices, remediation techniques and regulatory requirements can occur, therefore such liability estimates may be adjusted accordingly. The timing and duration of remediation activities at these sites will be determined when evaluations are completed. Although it is difficult to quantify the potential financial impact of these remediation liabilities, management estimates (based on the latest available information) that there is a reasonable possibility that future environmental remediation costs associated with our past operations could represent an additional $40 million before income taxes, in excess of amounts already recorded.
We believe that any sum we may be required to pay in connection with environmental remediation matters in excess of the amounts recorded would likely occur over a period of time and would likely not have a material adverse effect upon our results of operations, financial condition or cash flows on a consolidated annual basis although any such sum could have a material adverse impact on our results of operations, financial condition or cash flows in a particular quarterly reporting period.
Litigation
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as the federal Comprehensive Environmental Response, Compensation and Liability Act, commonly known as CERCLA or Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Costs for legal services are generally expensed as incurred.
In April 2025, the Company concluded its non-prosecution agreement with the U.S. Department of Justice (“DOJ”) prior to the end of its term in recognition that the terms of the agreement had been satisfied. The non-prosecution agreement was implemented in September 2023 following the Company’s self-reporting of a matter that occurred in 2018.
Indemnities
We are indemnified by third parties in connection with certain matters related to acquired and divested businesses. Although we believe that the financial condition of those parties who may have indemnification obligations to the Company is generally sound, in the event the Company seeks indemnity under any of these agreements or through other means, there can be no assurance that any party who may have obligations to indemnify us will adhere to their obligations and we may have to resort to legal action to enforce our rights under the indemnities.
The Company may be subject to indemnity claims relating to properties or businesses it divested, including properties or businesses of acquired businesses that were divested prior to the completion of the acquisition. In the opinion of management, and based upon information currently available, the ultimate resolution of any indemnification obligations owed to the Company or by the Company is not expected to have a material effect on the Company’s financial condition, results of
15
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
operations or cash flows. The Company had approximately $12.0 million and $12.6 million at September 30, 2025 and December 31, 2024, respectively, recorded in Other noncurrent liabilities, primarily related to the indemnification of certain income and non-income tax liabilities associated with the Chemetall Surface Treatment entities sold in 2017.
Other
The Company has contracts with certain of its customers which serve as guarantees of product delivery and performance according to customer specifications that can cover both shipments on an individual basis, as well as blanket coverage of multiple shipments under certain customer supply contracts. The financial coverage provided by these guarantees is typically based on a percentage of net sales value. The Company is unable to estimate the maximum amount of the potential future liability under performance guarantees. However, the Company accrues for any potential loss for which we believe a future payment is probable and a range of loss can be reasonably estimated. At September 30, 2025, the Company believes its liability under such obligations is immaterial.
NOTE 8—Equity:
Common Stock
On July 22, 2025, the Company’s board of directors declared a cash dividend of $0.405 per share. This dividend was paid on October 1, 2025 to shareholders of record at the close of business as of September 12, 2025. On October 27, 2025, the Company’s board of directors declared a cash dividend of $0.405 per share, which is payable on January 2, 2026 to shareholders of record at the close of business as of December 12, 2025.
Mandatory Convertible Preferred Stock
On March 8, 2024, the Company issued 46,000,000 depositary shares (“Depositary Shares”), each representing a 1/20th interest in a share of Series A Mandatory Convertible Preferred Stock (“Mandatory Convertible Preferred Stock”). The 2,300,000 shares of Mandatory Convertible Preferred Stock issued had a $1,000 per share liquidation preference. As a result of this transaction, the Company received cash proceeds of approximately $2.2 billion, net of underwriting fees and offering costs.
Dividends on the Mandatory Convertible Preferred Stock are payable on a cumulative basis when, as and if declared by the Albemarle board of directors, or an authorized committee thereof, at an annual rate of 7.25 % on the liquidation preference of $1,000 per share, and may be paid in cash or, subject to certain limitations, in shares of common stock or, subject to certain limitations, any combination of cash and shares of common stock. Dividends that are declared on the Mandatory Convertible Preferred Stock will be payable quarterly to the holders of record on the February 15, May 15, August 15 and November 15 of each year, immediately preceding the relevant dividend payment date, whether or not such holders convert their Depositary Shares, or such Depositary Shares are automatically converted, after a record date and on or prior to the immediately succeeding dividend payment date. The Company pays a quarterly cash dividend of $18.125 per share of Mandatory Convertible Preferred Stock. Dividends are expected to be paid on March 1, June 1, September 1 and December 1 of each year ending on, and including, March 1, 2027.
The Company may not redeem the shares of the Mandatory Convertible Preferred Stock. However, at its option, the Company may purchase the Mandatory Convertible Preferred Stock from time to time on the open market, by tender offer, exchange offer or otherwise.
Unless converted earlier in accordance with its terms, each share of Mandatory Convertible Preferred Stock will automatically convert on the mandatory conversion date, which is expected to be March 1, 2027, into between 7.618 shares and 9.140 shares of common stock, in each case, subject to customary anti-dilution adjustments described in the certificate of designations related to the Mandatory Convertible Preferred Stock (the “Certificate of Designations”). The number of shares of common stock issuable upon conversion will be determined based on the average volume weighted average price per share of common stock over the 20 consecutive trading day period beginning on, and including, the 21st scheduled trading day immediately prior to March 1, 2027.
Holders of shares of Mandatory Convertible Preferred Stock have the option to convert all or any portion of their shares of the Mandatory Convertible Preferred Stock at any time. The conversion rate applicable to any early conversion may in certain circumstances be increased to compensate holders of the Mandatory Convertible Preferred Stock for certain unpaid accumulated dividends as described in the Certificate of Designations.
16
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
If a Fundamental Change, as defined in the Certificate of Designations, occurs on or prior to March 1, 2027, then holders of the Mandatory Convertible Preferred Stock will be entitled to convert all or any portion of their Mandatory Convertible Preferred Stock at the fundamental change conversion rate, as defined in the Certificate of Designations, as for a specified period of time and to also receive an amount to compensate them for certain unpaid accumulated dividends and any remaining future scheduled dividend payments.
There were 2,300,000
Accumulated Other Comprehensive Loss
The components and activity in Accumulated other comprehensive loss (net of deferred income taxes) consisted of the following during the periods indicated below (in thousands):
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation and Other | Cash Flow Hedge(a) | Total | Foreign Currency Translation and Other | Cash Flow Hedge(a) | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | ( | $ | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss (income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, end of period | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation and Other | Cash Flow Hedge(a) | Total | Foreign Currency Translation and Other | Cash Flow Hedge(a) | Total | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, beginning of period | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss) before reclassifications | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Amounts reclassified from accumulated other comprehensive loss | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive loss (income) attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance, end of period | $ | ( | $ | $ | ( | $ | ( | $ | $ | ( | |||||||||||||||||||||||||||||||||||||||||||||||||
(a)We previously entered into a foreign currency forward contract, which was designated and accounted for as a cash flow hedge under ASC 815, Derivatives and Hedging. During 2024, the Company dedesignated the remaining foreign currency forward contracts accounted for as cash flow hedges. The related loss was reclassified to Other income (expenses), net during the nine-month period ended September 30, 2024. The balance of the settled hedged foreign currency forward contracts will be reclassified to earnings over the life of the related assets. See Note 9, “Restructuring Charges and Asset Write-offs,” and Note 14, “Fair Value of Financial Instruments,” for additional information.
17
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The amount of income tax benefit (expense) allocated to each component of Other comprehensive (loss) income for the three-month and nine-month periods ended September 30, 2025 and 2024 is provided in the following tables (in thousands):
| Three Months Ended September 30, 2025 | Three Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation and Other | Cash Flow Hedge | Total | Foreign Currency Translation and Other | Cash Flow Hedge | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income, before tax | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income, net of tax | $ | ( | $ | ( | $ | ( | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | Nine Months Ended September 30, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Foreign Currency Translation and Other | Cash Flow Hedge | Total | Foreign Currency Translation and Other | Cash Flow Hedge | Total | ||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), before tax | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive income (loss), net of tax | $ | $ | ( | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||||||||||||||||
NOTE 9—Restructuring Charges and Asset Write-offs:
Second Half 2024 Restructuring
In July 2024, the Company announced a comprehensive review of its cost and operating structure to proactively respond to ongoing industry headwinds, particularly in the lithium value chain, and to maintain a competitive position. As part of this review, the Company made the decision to stop construction of Kemerton Train 3 in Western Australia, and put Kemerton Train 2 into care and maintenance, as the Company determined the current lithium price environment makes it less economical to expand conversion in Australia. Kemerton Train 1 will continue to operate and activity around it is currently focused on commercialization efforts. Additionally, as part of this restructuring plan, the Company placed the Chengdu, China conversion plant into care and maintenance during the first half of 2025. Production from the Chengdu site has been transferred to another processing facility in China.
The Company’s actions regarding Kemerton are part of a broader effort focused on preserving its world-class resource advantages, optimizing its global conversion network, improving the Company’s cost competitiveness and efficiency by lowering operating costs, reducing capital intensity and enhancing the Company’s financial flexibility. As part of this effort, effective November 1, 2024, the Company transitioned its operating structure to a fully integrated functional model (excluding Ketjen) from a global business unit model. As a result, the Company implemented a global workforce reduction that impacted 6 -7 % of total headcount during the second half of 2024.
Since inception the Company has recorded charges for this plan consisting of asset write-offs of $726.0 million, severance and employee benefits of $53.4 million, contract cancellation costs of $38.7 million and other (primarily consisting of the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss) of $38.7 million. Charges related to Second Half 2024 Restructuring were primarily recorded in the Energy Storage segment, with the exception of severance and employee benefits, which were recorded globally in Corporate and all segments. The Company does not expect any further material costs associated with the Second Half 2024 Restructuring.
First Half 2024 Restructuring
In January 2024, the Company announced measures to unlock near-term cash flow and generate long-term financial flexibility by re-phasing organic growth investments and optimizing its cost structure. As part of these measures, during the second quarter of 2024, the Company indefinitely suspended construction of Kemerton Train 4, as well as deferred spending
18
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
and investments with respect to certain other capital projects, primarily within the Energy Storage segment. In addition, the Company recorded severance costs for employees in Corporate and each of the businesses as part of these announced measures. As a result, since inception the Company has recorded charges for this plan consisting of asset write-offs of $280.6 million, severance and employee benefits of $18.9 million, contract cancellation costs of $24.9 million and other (primarily consisting of the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss) of $5.4 million. No further costs associated with the First Half 2024 Restructuring are expected to be recorded as this restructuring plan was completed in the first half of 2024.
Detail of Restructuring Charges and Liabilities
The following table provides details of our restructuring related charges for the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
Asset Write-offs(a) | Severance and Employee Benefits(b) | Contract Cancellation Costs(c) | Other(d) | Total | |||||||||||||||||||||||||
Second Half 2024 Restructuring(e) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
Asset Write-offs(a) | Severance and Employee Benefits(b) | Contract Cancellation Costs(c) | Other(d) | Total | |||||||||||||||||||||||||
First Half 2024 Restructuring(e) | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
Second Half 2024 Restructuring(e) | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||||||||
Asset Write-offs(a) | Severance and Employee Benefits(b) | Contract Cancellation Costs(c) | Other(d) | Total | |||||||||||||||||||||||||
Second Half 2024 Restructuring(e) | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||||||||
Asset Write-offs(a) | Severance and Employee Benefits(b) | Contract Cancellation Costs(c) | Other(d) | Total | |||||||||||||||||||||||||
First Half 2024 Restructuring(e) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Second Half 2024 Restructuring(e) | |||||||||||||||||||||||||||||
| $ | $ | $ | $ | $ | |||||||||||||||||||||||||
(a) In 2025, the Company received proceeds for certain Kemerton equipment and updated its estimates concerning the progress of construction activities and related contractual obligations, resulting in a net favorable adjustment of asset write-offs. In 2024, asset write-offs included $16.5 million recorded in Cost of goods sold, primarily related to work in process inventory with no future value as a result of the decommissioning of Kemerton Train 2 that was placed into care and maintenance. The remainder of the asset write-offs primarily related to property, plant and equipment of the in-construction Kemerton Trains 3 and 4, and Kemerton Train 2 that was placed into care and maintenance. Asset write-off charges not related to inventories and changes in estimates were recorded in Restructuring charges and asset write-offs.
(b) Severance and employee benefit charges for global employees terminated during the various restructuring programs were recorded in Restructuring charges and asset write-offs.
(c) Includes cancellation fees for contractors and required payments under take or pay contracts. All contract cancellation costs and favorable adjustments were recorded in Restructuring charges and asset write-offs.
(d) Other includes costs to put Kemerton Train 2 and the Chengdu, China conversion plant into care and maintenance and similar restructuring costs, and are recorded in Restructuring charges and asset write-offs. In addition, Other also includes the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss. A loss of $16.2 million was recorded in Other income (expenses), net, for the three-month and nine-month periods ended September 30, 2024 related to the Second Half 2024
19
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Restructuring and a loss of $5.4 million was recorded in Other income (expenses), net for the nine-month period ended September 30, 2024 related to the First Half 2024 Restructuring.
(e) Severance and employee benefits related to Corporate and all segments. All other restructuring costs were primarily recorded in the Energy Storage segment.
The following tables summarize the changes in restructuring liabilities for the nine-month period ended September 30, 2025 (in thousands):
| Second Half 2024 Restructuring | Asset Write-offs | Severance and Employee Benefits | Contract Cancellation Costs | Other | Total | ||||||||||||||||||||||||
Beginning balance at December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Change in estimate(a) | ( | ( | ( | ||||||||||||||||||||||||||
| Cash payments | ( | ( | ( | ( | |||||||||||||||||||||||||
| Asset write-off/hedge dedesignation | ( | ( | |||||||||||||||||||||||||||
| Foreign currency translation adjustments and other | ( | ( | ( | ||||||||||||||||||||||||||
Ending balance at September 30, 2025(b) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| First Half 2024 Restructuring | Asset Write-offs | Severance and Employee Benefits | Contract Cancellation Costs | Other | Total | ||||||||||||||||||||||||
Beginning balance at December 31, 2024 | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
| Cash payments | ( | ( | |||||||||||||||||||||||||||
| Other | ( | ( | |||||||||||||||||||||||||||
Ending balance at September 30, 2025(b) | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
(a) In 2025, the Company received proceeds for certain Kemerton equipment and updated its estimates concerning the progress of construction activities and related contractual obligation, as well as updated estimates of severance charges in the U.S., resulting in a favorable adjustment of asset write-offs and severance and employee benefits. Additionally, the Company negotiated revised contract cancellation costs with key suppliers, which resulted in adjustments of the restructuring related charges.
(b) Approximately $19.0 million of the remaining balance is expected to be paid in the next twelve months and are recorded in Accrued expenses as of September 30, 2025. $12.4 million of the liability is recorded in Other noncurrent liabilities as of September 30, 2025, and relates to certain take or pay liabilities that will be paid in line with the terms of the original contract through 2027.
20
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 10—Pension Plans and Other Postretirement Benefits:
The components of pension and postretirement benefits cost (credit) for the three-month and nine-month periods ended September 30, 2025 and 2024 were as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Pension Benefits Cost (Credit): | |||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Expected return on assets | ( | ( | ( | ( | |||||||||||||||||||
| Amortization of prior service benefit | |||||||||||||||||||||||
| Total net pension benefits cost | $ | $ | $ | $ | |||||||||||||||||||
| Postretirement Benefits Cost: | |||||||||||||||||||||||
| Service cost | $ | $ | $ | $ | |||||||||||||||||||
| Interest cost | |||||||||||||||||||||||
| Total net postretirement benefits cost | $ | $ | $ | $ | |||||||||||||||||||
| Total net pension and postretirement benefits cost | $ | $ | $ | $ | |||||||||||||||||||
All components of net benefit cost, other than service cost, are included in Other income (expenses), net on the consolidated statements of loss.
During the three-month and nine-month periods ended September 30, 2025, the Company made contributions of $5.9 million and $15.8 million, respectively, to its qualified and nonqualified plans and the U.S. postretirement benefit plan. During the three-month and nine-month periods ended September 30, 2024, the Company made contributions of $3.9 million and $13.3 million, respectively, to its qualified and nonqualified pension plans and the U.S. postretirement benefit plan.
NOTE 11—Income Taxes:
The effective income tax rates for the three-month and nine-month periods ended September 30, 2025 were 12.8 % and 0.2 %, respectively, compared to (9.4 )% and (4.2 )% for the three-month and nine-month periods ended September 30, 2024, respectively. The Company’s effective income tax rate fluctuates based on, among other factors, the amount and location of income. The change in effective tax rate in the three-month and nine-month periods ended September 30, 2025, compared to the three-month and nine-month periods ended September 30, 2024, was due to the impact of 2025 earnings in various jurisdictions. The difference between the U.S. federal statutory income tax rate of 21 % and Company’s effective income tax rate for the three-month and nine-month periods ended September 30, 2025 was due to the net impact of the location in which income was earned, including the impact of valuation allowances for losses in the Company’s consolidated Australian entities and certain entities in China. The goodwill impairment charge recorded during the three-month and nine-month periods ended September 30, 2025 was primarily non-deductible and resulted in a minimal income tax benefit. The difference between the U.S. federal statutory income tax rate of 21 % and the Company’s effective income tax rate for the three-month and nine-month periods ended September 30, 2024 was impacted by a variety of factors, primarily the location in which income was earned, including the valuation allowance for losses in our consolidated Australian entities and certain entities in China, and an uncertain tax position recorded in Chile.
21
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 12—Earnings Per Share:
Basic and diluted loss per share for the three-month and nine-month periods ended September 30, 2025 and 2024 are calculated as follows (in thousands, except per share amounts):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Basic loss per share | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss attributable to Albemarle Corporation | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Mandatory convertible preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average common shares for basic loss per share | |||||||||||||||||||||||
| Basic loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Diluted loss per share | |||||||||||||||||||||||
| Numerator: | |||||||||||||||||||||||
| Net loss attributable to Albemarle Corporation | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Mandatory convertible preferred stock dividends | ( | ( | ( | ( | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation common shareholders | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
| Denominator: | |||||||||||||||||||||||
| Weighted-average common shares for diluted loss per share | |||||||||||||||||||||||
| Diluted loss per share | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
The following table summarizes the number of shares, calculated on a weighted average basis, not included in the computation of diluted earnings per share because their effect would have been anti-dilutive (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Shares assuming the conversion of the mandatory convertible preferred stock | |||||||||||||||||||||||
| Shares under the stock compensation plans | |||||||||||||||||||||||
NOTE 13—Leases:
We lease certain office space, buildings, transportation and equipment in various countries. The initial lease terms generally range from 1 to 30 years for real estate leases, and from 2 15 years for non-real estate leases. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we recognize lease expense for these leases on a straight-line basis over the lease term.
Many leases include options to terminate or renew, with renewal terms that can extend the lease term from 1 50 years or more. The exercise of lease renewal options is at our sole discretion. Certain leases also include options to purchase the leased property. The depreciable life of assets and leasehold improvements are limited by the expected lease term, unless there is a transfer of title or purchase option reasonably certain of exercise. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.
22
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The following table provides details of our lease contracts for the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Operating lease cost | $ | $ | $ | $ | |||||||||||||||||||
| Finance lease cost: | |||||||||||||||||||||||
| Amortization of right of use assets | |||||||||||||||||||||||
| Interest on lease liabilities | |||||||||||||||||||||||
| Total finance lease cost | |||||||||||||||||||||||
| Short-term lease cost | |||||||||||||||||||||||
| Variable lease cost | |||||||||||||||||||||||
| Total lease cost | $ | $ | $ | $ | |||||||||||||||||||
Supplemental cash flow information related to our lease contracts for the nine-month periods ended September 30, 2025 and 2024 is as follows (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | |||||||||||
| Operating cash flows from operating leases | $ | $ | |||||||||
| Operating cash flows from finance leases | |||||||||||
| Financing cash flows from finance leases | |||||||||||
| Right-of-use assets obtained in exchange for lease obligations: | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
Supplemental balance sheet information related to our lease contracts, including the location on balance sheet, at September 30, 2025 and December 31, 2024 is as follows (in thousands, except as noted):
23
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
| September 30, 2025 | December 31, 2024 | ||||||||||
| Operating leases: | |||||||||||
| Other assets | $ | $ | |||||||||
| Accrued expenses | |||||||||||
| Other noncurrent liabilities | |||||||||||
| Total operating lease liabilities | |||||||||||
| Finance leases: | |||||||||||
| Net property, plant and equipment | |||||||||||
| Current portion of long-term debt | |||||||||||
| Long-term debt | |||||||||||
| Total finance lease liabilities | |||||||||||
| Weighted average remaining lease term (in years): | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| Weighted average discount rate (%): | |||||||||||
| Operating leases | % | % | |||||||||
| Finance leases | % | % | |||||||||
Maturities of lease liabilities at September 30, 2025 were as follows (in thousands):
| Operating Leases | Finance Leases | ||||||||||
| Remainder of 2025 | $ | $ | |||||||||
| 2026 | |||||||||||
| 2027 | |||||||||||
| 2028 | |||||||||||
| 2029 | |||||||||||
| Thereafter | |||||||||||
| Total lease payments | |||||||||||
| Less imputed interest | |||||||||||
| Total | $ | $ | |||||||||
NOTE 14—Fair Value of Financial Instruments:
In assessing the fair value of financial instruments, we use methods and assumptions that are based on market conditions and other risk factors existing at the time of assessment. Fair value information for our financial instruments is as follows:
Long-Term Debt—the fair values of our notes are estimated using Level 1 inputs and account for the difference between the recorded amount and fair value of our long-term debt. The carrying value of our remaining long-term debt reported in the accompanying consolidated balance sheets approximates fair value as substantially all of such debt bears interest based on prevailing variable market rates currently available in the countries in which we have borrowings.
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Recorded Amount | Fair Value | Recorded Amount | Fair Value | ||||||||||||||||||||
| (In thousands) | |||||||||||||||||||||||
| Long-term debt | $ | $ | $ | $ | |||||||||||||||||||
24
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
During the fourth quarter of 2019, we entered into a foreign currency forward contract to hedge the cash flow exposure of non-functional currency purchases during the construction of the Kemerton plant in Australia. This derivative financial instrument is used to manage risk and is not used for trading or other speculative purposes. This foreign currency forward contract has been designated as a hedging instrument under Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging. As a result of the actions taken at Kemerton Trains 3 and 4 during 2024, the Company dedesignated the remaining hedged foreign currency forward contracts. During the three-month and nine-month periods ended September 30, 2024, the Company recorded a loss in Other income, net of $16.2 million and $21.6 million, respectively, from the reclassification of the hedged balance from Accumulated other comprehensive loss. The balance of the settled hedged foreign currency forward contracts associated with the construction of Kemerton Trains 1 and 2 assets placed into service will be reclassified to earnings over the life of the related assets.
In connection with our risk management strategies, we also enter into other derivative financial instruments that have not been designated as hedging instruments under ASC 815, Derivatives and Hedging. These derivative financial instruments are used to manage risk and are not used for trading or other speculative purposes. At September 30, 2025 and December 31, 2024, we had outstanding non-designated derivative financial instruments with notional values totaling $3.9 billion and $6.9 billion, respectively. The non-designated derivative financial instruments are primarily comprised of foreign currency forward contracts that attempt to minimize the financial impact of changes in foreign currency exchange rates. The fair values of our non-designated foreign currency forward contracts are estimated based on current settlement values. At September 30, 2025, these foreign currency forward contracts hedge our exposure to various currencies including the Chinese Renminbi, Euro and Australian Dollar.
The following table summarizes the fair value of our derivative financial instruments included in the consolidated balance sheets as of September 30, 2025 and December 31, 2024 (in thousands):
| September 30, 2025 | December 31, 2024 | ||||||||||||||||||||||
| Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||
| Not designated as hedging instruments | |||||||||||||||||||||||
| Other current assets | $ | $ | — | $ | $ | — | |||||||||||||||||
| Accrued expenses | — | — | |||||||||||||||||||||
| Other noncurrent liabilities | — | — | |||||||||||||||||||||
| Total not designated as hedging instruments | $ | $ | $ | $ | |||||||||||||||||||
The following table summarizes the net (losses) gains recognized for our derivative financial instruments during the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Designated as hedging instruments | |||||||||||||||||||||||
Loss recognized in Other comprehensive (loss) income | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
Gain (loss) recognized in Other income (expenses), net | $ | $ | ( | $ | $ | ( | |||||||||||||||||
| Not designated as hedging instruments | |||||||||||||||||||||||
(Loss) gain recognized in Other income (expenses), net(a) | $ | ( | $ | ( | $ | $ | ( | ||||||||||||||||
(a) Fluctuations in the value of our foreign currency forward contracts not designated as hedging instruments are generally expected to be offset by changes in the value of the underlying exposures being hedged, which are also reported in Other income (expenses), net.
In addition, for the nine-month periods ended September 30, 2025 and 2024, we recorded net cash receipts of $144.5 million and $5.5 million, respectively, in Proceeds (payments) from settlement of foreign currency forward contracts, net, in our condensed consolidated statements of cash flows.
Unrealized gains and losses related to the cash flow hedges will be reclassified to earnings over the life of the related assets when settled and the related assets are placed into service.
25
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
The counterparties to our foreign currency forward contracts are major financial institutions with which we generally have other financial relationships. We are exposed to credit loss in the event of nonperformance by these counterparties. However, we do not anticipate nonperformance by the counterparties.
NOTE 15—Fair Value Measurement:
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). The inputs used to measure fair value are classified into the following hierarchy:
| Level 1 | Unadjusted quoted prices in active markets for identical assets or liabilities | ||||
| Level 2 | Unadjusted quoted prices in active markets for similar assets or liabilities, or unadjusted quoted prices for identical or similar assets or liabilities in markets that are not active, or inputs other than quoted prices that are observable for the asset or liability | ||||
| Level 3 | Unobservable inputs for the asset or liability | ||||
We endeavor to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The following tables set forth our financial assets and liabilities that were accounted for at fair value on a recurring basis as of September 30, 2025 and December 31, 2024 (in thousands):
| September 30, 2025 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Investments under executive deferred compensation plan(a) | $ | $ | $ | $ | |||||||||||||||||||
Public equity securities(b) | $ | $ | $ | $ | |||||||||||||||||||
Private equity securities measured at net asset value(c)(d) | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments(e) | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Obligations under executive deferred compensation plan(a) | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments(e) | $ | $ | $ | $ | |||||||||||||||||||
| December 31, 2024 | Quoted Prices in Active Markets for Identical Items (Level 1) | Quoted Prices in Active Markets for Similar Items (Level 2) | Unobservable Inputs (Level 3) | ||||||||||||||||||||
| Assets: | |||||||||||||||||||||||
Available for sale debt securities(f) | $ | $ | $ | $ | |||||||||||||||||||
Investments under executive deferred compensation plan(a) | $ | $ | $ | $ | |||||||||||||||||||
Public equity securities(b) | $ | $ | $ | $ | |||||||||||||||||||
Private equity securities measured at net asset value(c)(d) | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments(e) | $ | $ | $ | $ | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||
Obligations under executive deferred compensation plan(a) | $ | $ | $ | $ | |||||||||||||||||||
Derivative financial instruments(e) | $ | $ | $ | $ | |||||||||||||||||||
(a)We maintain an Executive Deferred Compensation Plan (“EDCP”) that was adopted in 2001 and subsequently amended. The purpose of the EDCP is to provide current tax planning opportunities as well as supplemental funds upon the retirement or death of certain of our employees. The EDCP is intended to aid in attracting and retaining employees of exceptional ability by providing them with these benefits. We also maintain a Benefit Protection Trust (the “Trust”) that was created to provide a source of funds to assist in meeting the
26
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
obligations of the EDCP, subject to the claims of our creditors in the event of our insolvency. Assets of the Trust are consolidated in accordance with authoritative guidance. The assets of the Trust consist primarily of mutual fund investments (which are accounted for as trading securities and are marked-to-market on a monthly basis through the consolidated statements of loss) and cash and cash equivalents. As such, these assets and obligations are classified within Level 1.
(b)Holdings in equity securities of public companies reported in Investments in the consolidated balance sheets. The fair value is measured using publicly available share prices of the investments, and as a result these balances are classified within Level 1. Any changes are reported in Other income (expenses), net in our consolidated statements of loss. See Note 3, “Investments,” for further details.
(c)Primarily consists of private equity securities reported in Investments in the consolidated balance sheets. The changes in fair value are reported in Other income (expenses), net in our consolidated statements of loss.
(d)Holdings in certain private equity securities are measured at fair value using the net asset value per share (or its equivalent) practical expedient and have not been categorized in the fair value hierarchy.
(e)The derivative financial instruments are primarily comprised of foreign currency forward contracts. As a result of our global operating and financing activities, we are exposed to market risks from changes in foreign currency exchange rates which may adversely affect our operating results and financial position. When deemed appropriate, we minimize our risks from foreign currency exchange rate fluctuations through the use of foreign currency forward contracts. The foreign currency forward contracts are valued using broker quotations or market transactions in either the listed or over-the-counter markets. As such, these derivative instruments are classified within Level 2. See Note 14, “Fair Value of Financial Instruments,” for further details about our foreign currency forward contracts.
(f)Preferred equity of a Grace subsidiary acquired as a portion of the proceeds of the FCS sale on June 1, 2021. A third-party estimate of the fair value was prepared using expected future cash flows over the period up to when the asset was likely to be redeemed, applying a discount rate that appropriately captures a market participant's view of the risk associated with the investment. These were considered to be Level 3 inputs. In June 2025, the Company redeemed the preferred equity and we derecognized the investment from the consolidated balance sheet. See Note 3, “Investments,” for further details.
The following table sets forth the reconciliation of the beginning and ending balance for the Level 3 recurring fair value measurements (in thousands):
| Available for Sale Debt Securities | |||||
Beginning balance at December 31, 2024 | $ | ||||
| PIK dividends | |||||
| Cash received for tax liability | ( | ||||
| Cash proceeds from redemption of preferred equity | ( | ||||
| Realized loss from redemption of preferred equity | ( | ||||
Ending balance at September 30, 2025 | $ | ||||
NOTE 16—Related Party Transactions:
Our consolidated statements of loss include sales to and purchases from unconsolidated affiliates in the ordinary course of business as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Sales to unconsolidated affiliates | $ | $ | $ | $ | |||||||||||||||||||
Purchases from unconsolidated affiliates(a) | $ | $ | $ | $ | |||||||||||||||||||
(a)Purchases from unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture.
Our consolidated balance sheets include accounts receivable due from and payable to unconsolidated affiliates in the ordinary course of business as follows (in thousands):
| September 30, 2025 | December 31, 2024 | ||||||||||
| Receivables from unconsolidated affiliates | $ | $ | |||||||||
Payables to unconsolidated affiliates(a) | $ | $ | |||||||||
(a)Payables to unconsolidated affiliates primarily relate to spodumene purchased from the Company’s Windfield joint venture under normal payment terms.
27
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 17—Segment Information:
The Company has three
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and other post-employment benefit (“OPEB”) service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes inter-segment transfers of raw materials at cost and allocations for certain corporate costs.
The CODM uses adjusted EBITDA (as defined below) to assess the ongoing performance of the Company’s business segments and to allocate resources by considering the variance in the actual results to the forecasts on a monthly basis. The annual operating budget and ongoing forecasting process use adjusted EBITDA as a key metric in assessing the segments performance. In addition, the CODM uses adjusted EBITDA for business and enterprise planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company’s definition of adjusted EBITDA is earnings before interest and financing expenses, income tax expenses, the proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges and asset write-offs, facility divestiture charges, certain litigation and arbitration costs and charges, non-operating pension and OPEB items and other significant non-recurring items. This calculation is consistent with the definition of adjusted EBITDA used in the leverage financial covenant calculation in the Company’s credit agreement, which is a material agreement for the Company and aligns the information presented to various stakeholders.
28
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
See below for a reconciliation of segment Net sales to adjusted EBITDA by segment showing significant segment expenses regularly reviewed by the CODM for the three-month and nine-month periods ended September 30, 2025 and 2024 (in thousands):
| Energy Storage | Specialties | Ketjen | Total Segments | ||||||||||||||||||||
| Three Months Ended September 30, 2025 | |||||||||||||||||||||||
Net sales(a) | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold(b) | ( | ( | ( | ( | |||||||||||||||||||
Selling, general and administrative expenses(b) | ( | ( | ( | ( | |||||||||||||||||||
Other segment items(c) | ( | ( | ( | ( | |||||||||||||||||||
Equity in net income of unconsolidated investments(d) | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Adjusted EBITDA by segment | $ | $ | $ | $ | |||||||||||||||||||
| Three Months Ended September 30, 2024 | |||||||||||||||||||||||
Net sales(a) | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold(b) | ( | ( | ( | ( | |||||||||||||||||||
Selling, general and administrative expenses(b) | ( | ( | ( | ( | |||||||||||||||||||
Other segment items(c) | ( | ( | ( | ( | |||||||||||||||||||
Equity in net income of unconsolidated investments(d) | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Adjusted EBITDA by segment | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, 2025 | |||||||||||||||||||||||
Net sales(a) | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold(b) | ( | ( | ( | ( | |||||||||||||||||||
Selling, general and administrative expenses(b) | ( | ( | ( | ( | |||||||||||||||||||
Other segment items(c) | ( | ( | ( | ( | |||||||||||||||||||
Equity in net income of unconsolidated investments(d) | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Adjusted EBITDA by segment | $ | $ | $ | $ | |||||||||||||||||||
| Nine Months Ended September 30, 2024 | |||||||||||||||||||||||
Net sales(a) | $ | $ | $ | $ | |||||||||||||||||||
Cost of goods sold(b) | ( | ( | ( | ( | |||||||||||||||||||
Selling, general and administrative expenses(b) | ( | ( | ( | ( | |||||||||||||||||||
Other segment items(c) | ( | ( | ( | ( | |||||||||||||||||||
Equity in net income of unconsolidated investments(d) | |||||||||||||||||||||||
| Net income attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
| Adjusted EBITDA by segment | $ | $ | $ | $ | |||||||||||||||||||
(a)Intersegment sales are not considered material.
(b)The significant expense categories and amounts align with the segment information that is regularly provided to the CODM. Excludes depreciation and amortization, and non-operating, non-recurring or unusual items as described in the reconciliation of total segment adjusted EBITDA to consolidated Net loss attributable to Albemarle Corporation below.
(c)Other segment items are comprised of Research and development expenses excluding depreciation and amortization.
(d)Excludes Albemarle’s 49 % ownership interest in the income tax expense of the Windfield joint venture.
The Company reconciles the total segment adjusted EBITDA to the consolidated Net loss attributable to Albemarle Corporation given the impact of equity in net income from unconsolidated investments, the majority of which relates to the Windfield joint venture. This reconciliation reflects the strategic and operational significance of the Company’s joint ventures and aligns with our allocation of equity in net income from unconsolidated investments at the segment level, representing each
29
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
segment's contribution to the Company's overall financial performance. See below for a reconciliation of total segment adjusted EBITDA to consolidated Net loss attributable to Albemarle Corporation (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Total segment adjusted EBITDA | $ | $ | $ | $ | |||||||||||||||||||
| Corporate expenses, net | ( | ( | ( | ||||||||||||||||||||
| Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
| Interest and financing expenses | ( | ( | ( | ( | |||||||||||||||||||
| Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
Proportionate share of Windfield income tax expense(a) | ( | ( | ( | ( | |||||||||||||||||||
Acquisition and integration related costs(b) | ( | ( | ( | ( | |||||||||||||||||||
Restructuring charges and asset write-offs(c) | ( | ( | ( | ( | |||||||||||||||||||
Goodwill impairment charges(d) | ( | ( | |||||||||||||||||||||
| Non-operating pension and OPEB items | ( | ( | |||||||||||||||||||||
Gain (loss) in fair value of public equity securities(e) | ( | ( | |||||||||||||||||||||
Other(f) | ( | ( | |||||||||||||||||||||
| Net loss attributable to Albemarle Corporation | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||||
(a)Albemarle’s 49 % ownership interest in the reported income tax expense of the Windfield joint venture.
(b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in Selling, general and administrative expenses (“SG&A”).
(c)See Note 9, “Restructuring Charges and Asset Write-offs,” for further details.
(d)See Note 4, “Goodwill and Other Intangibles,” for further details.
(e)Represents the net change in fair value of investments in public equity securities for the three-month and nine-month periods ended September 30, 2025, recorded in Other income (expenses), net. The three-month and nine-month periods ended September 30, 2024 included losses of $5.0 million and $32.2 million, respectively, recorded in Other income (expenses), net, resulting from the net change in fair value of investments in public equity securities and a loss of $33.7 million recorded in Other income (expenses), net, for the nine months ended September 30, 2024 resulting from the sale of investments in public equity securities.
(f)Included amounts for the three months ended September 30, 2025 recorded in:
•SG&A - $2.0 million of severance expenses not related to a restructuring plan, $1.4 million of expenses related to the redemption of preferred equity in a Grace subsidiary, $1.4 million related to the write-off of certain fixed assets and $1.3 million of expenses related to certain historical legal matters, partially offset by $1.9 million of gains from the sale of assets not part of our production operations.
•Other income (expenses), net - $0.5 million gain resulting from the adjustment of indemnification related to a previously disposed business.
Included amounts for the three months ended September 30, 2024 recorded in:
•SG&A - $0.1 million of expenses related to certain historical legal matters.
•Other income (expenses), net - $9.2 million of income from PIK dividends of preferred equity in a Grace subsidiary, partially offset by a $2.0 million loss resulting from the adjustment of indemnification related to a previously disposed business.
Included amounts for the nine months ended September 30, 2025 recorded in:
•SG&A - $13.3 million of gains from the sale of assets not part of our production operations, partially offset by $3.8 million of severance expenses not related to a restructuring plan, $1.9 million of expenses related to certain historical legal matters, $1.4 million of expenses related to the redemption of preferred equity in a Grace subsidiary and $1.4 million related to the write-off of certain fixed assets.
•Other income (expenses), net - $38.0 million loss resulting from the redemption of preferred equity in a Grace subsidiary and $1.9 million of charges for asset retirement obligations at a site not part of our operations, partially offset by $19.8 million of income from PIK dividends of the preferred equity in a Grace subsidiary prior to redemption and a $2.4 million gain primarily resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the nine months ended September 30, 2024 recorded in:
•Cost of goods sold - $1.4 million of expenses related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
•SG&A - $5.3 million of expenses related to certain historical legal and environmental matters.
•Other income (expenses), net - $26.8 million of income from PIK dividends of preferred equity in a Grace subsidiary, a $17.3 million gain primarily from the sale of assets at a site not part of our operations, a $0.6 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations and a $0.4 million net gain primarily resulting from the
30
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
adjustment of indemnification related to previously disposed businesses, partially offset by $2.9 million of charges for asset retirement obligations at a site not part of our operations.
Total assets and investments in equity method investees by segment at September 30, 2025 and December 31, 2024 were as follows (in thousands):
| September 30, | December 31, | ||||||||||
| 2025 | 2024 | ||||||||||
| Assets: | |||||||||||
| Energy Storage | $ | $ | |||||||||
| Specialties | |||||||||||
| Ketjen | |||||||||||
| Total segment assets | |||||||||||
| Corporate | |||||||||||
| Total assets | $ | $ | |||||||||
| Investments in equity method investees: | |||||||||||
| Energy Storage | $ | $ | |||||||||
| Ketjen | |||||||||||
| Total investments in equity method investees | $ | $ | |||||||||
Additional segment information for the three-month and nine-month periods ended September 30, 2025 and 2024 was as follows (in thousands):
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
| 2025 | 2024 | 2025 | 2024 | ||||||||||||||||||||
| Depreciation and amortization: | |||||||||||||||||||||||
| Energy Storage | $ | $ | $ | $ | |||||||||||||||||||
| Specialties | |||||||||||||||||||||||
| Ketjen | |||||||||||||||||||||||
| Total segment depreciation and amortization | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | $ | |||||||||||||||||||
| Equity in net income of unconsolidated investments (net of tax): | |||||||||||||||||||||||
| Energy Storage | $ | $ | $ | $ | |||||||||||||||||||
| Ketjen | |||||||||||||||||||||||
| Total segment equity in net income of unconsolidated investments (net of tax) | |||||||||||||||||||||||
Corporate(a) | |||||||||||||||||||||||
| Total equity in net income of unconsolidated investments (net of tax) | $ | $ | $ | $ | |||||||||||||||||||
| Capital expenditures: | |||||||||||||||||||||||
Energy Storage(b) | $ | $ | $ | $ | |||||||||||||||||||
| Specialties | |||||||||||||||||||||||
| Ketjen | |||||||||||||||||||||||
| Total segment capital expenditures | |||||||||||||||||||||||
| Corporate | |||||||||||||||||||||||
| Total capital expenditures | $ | $ | $ | $ | |||||||||||||||||||
31
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
(a)Corporate equity in net income of unconsolidated investments (net of tax) relates to foreign exchange gains or losses from the Windfield joint venture.
(b)Energy Storage capital expenditures for the three-month and nine-month periods ended September 30, 2024 include adjustments to correct previously identified immaterial errors. See Note 1, “Basis of Presentation,” for further details.
NOTE 18—Supplemental Cash Flow Information:
Supplemental information related to the condensed consolidated statements of cash flows is as follows (in thousands):
| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Supplemental non-cash disclosure related to investing and financing activities: | |||||||||||
| Capital expenditures included in Accounts payable | $ | $ | |||||||||
Common stock issued for annual incentive bonus plan(a) | |||||||||||
(a)During the nine-month period ended September 30, 2024, the Company issued 95,003 shares of common stock to certain employees in lieu of cash as payment of a portion of their 2023 annual incentive bonus plan.
Noncurrent liability changes and other, net within Cash flows from operating activities on the condensed consolidated statements of cash flows for the nine-month period ended September 30, 2025 included the receipt of a $350.0 million customer prepayment. See Note 6, “Other Noncurrent Liabilities,” for further details. Noncurrent liability changes and other, net within Cash flows from operating activities on the condensed consolidated statements of cash flows for the nine-month periods ended September 30, 2025 and 2024 included $44.6 million and $82.7 million, respectively, representing the reclassification of the current portion of the one-time transition tax resulting from the enactment of the U.S. Tax Cuts and Jobs Act from Other noncurrent liabilities to Income taxes payable within current liabilities.
NOTE 19—Recently Issued or Adopted Accounting Pronouncements:
In August 2023, the FASB issued guidance which will require a joint venture to recognize and initially measure its assets, including goodwill, and liabilities using a new basis of accounting upon formation. Initial measurement of a joint venture’s total net assets will be equal to the fair value of one hundred percent of the joint venture’s equity. In addition, a joint venture will be permitted to apply the measurement period guidance of ASC 805-10 if the initial accounting for the joint venture formation is incomplete by the end of the reporting period in which the formation occurs. This guidance is effective prospectively for all joint venture formations with a formation date on or after January 1, 2025. The Company currently does not expect this guidance to have a significant impact on its consolidated financial statements.
In November 2023, the FASB issued guidance to update qualitative and quantitative reportable segment disclosure requirements, including enhanced disclosures about significant segment expenses and increased interim disclosure requirements, among others. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company has adopted this guidance and provided the required disclosures in this Quarterly Report on Form 10-Q. See Note 17, “Segment Information,” for further details.
In December 2023, the FASB issued guidance to require qualitative and quantitative updates to the rate reconciliation and income taxes paid disclosures, among others, in order to enhance the transparency of income tax disclosures, including consistent categories and greater disaggregation of information in the rate reconciliation and disaggregation by jurisdiction of income taxes paid. This guidance is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
In November 2024, the FASB issued guidance to require tabular disclosures disaggregating certain types of expenses presented on the income statement within continuing operations, as well as disclosures about selling expenses. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and the amendments should be applied prospectively; however, retrospective application is also permitted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures.
32
ALBEMARLE CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 20—Subsequent Events:
On October 25, 2025, the Company signed a definitive agreement to divest the controlling ownership interest of its Refining Solutions business (as defined below) to ChemCat AcquisitionCo, LLC and contribute the remaining ownership interest to ChemCat Holdings, LP, a newly-formed limited partnership (“Holdco”). The Refining Solutions business being divested is defined as the Company’s Ketjen reportable segment, excluding its PCS business and the Company’s 50 % ownership interest in Eurecat S.A. (which the Company expects to divest in a separate transaction as described below). Following the completion of the transactions contemplated in the definitive agreement (collectively, the “Refining Solutions Business Transaction”), the Company will receive approximately $536 million in cash and will own 49 % of the common units of Holdco. The Company expects the Refining Solutions Business Transaction to be completed in the first half of 2026, subject to customary and regulatory closing conditions.
The Company’s ownership interest in Holdco, initially representing a 49 % interest, will consist of common units that will be junior to the preferred equity in Holdco held by other ownership groups. The preferred equity will accrue dividends, regardless of whether or not declared, for the first five years after the closing of the Refining Solutions Business Transaction, will be convertible into common equity of Holdco at the option of the holder.
In a separate transaction, on October 23, 2025, the Company entered into a definitive agreement to divest its 50 % ownership interest in Eurecat S.A., a joint venture included in the Refining Solutions reporting unit, for approximately €105 million (approximately $122 million using September 30, 2025 foreign exchange rates) in cash to Axens SA. The Company expects this transaction to be completed in the first half of 2026, subject to customary and regulatory closing conditions.
In connection with these transactions, on October 25, 2025, the Company concluded the Refining Solutions reporting unit (the “Disposal Group”) met the criteria to be classified as held for sale in the Company’s consolidated financial statements. Upon classification as held for sale, the Disposal Group is measured at the lower of its carrying amount or its fair value less costs to sell, which could result in future non-cash impairment charges in the consolidated financial statements. The considerations above are based on management’s estimates and assumptions and may change as the transactions progress.
The PCS business will continue to be operated by the Company following these transactions. When the Company determines a reintegration plan for the PCS business, this change in circumstances for the PCS business may indicate that the carrying value of PCS’s long-lived assets are not recoverable and may constitute a triggering event to test for impairment in accordance with Accounting Standards Codification (“ASC”) 360. As of September 30, 2025, the carrying value of the PCS assets was approximately $181 million. If a triggering event were to be identified, the Company would perform an impairment assessment, and if an impairment loss is determined to exist, the Company may record a non-cash impairment loss during the period in which the triggering event occurs.
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| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | ||||
Forward-looking Statements
Some of the information presented in this Quarterly Report on Form 10-Q, including the documents incorporated by reference herein, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements are based on our current expectations, which are in turn based on assumptions that we believe are reasonable based on our current knowledge of our business and operations. We have used words such as “ambition,” “anticipate,” “believe,” “could,” “estimate,” “expect,” “goal,” “intend,” “may,” “should,” “would,” “will” and variations of such words and similar expressions to identify such forward-looking statements.
These forward-looking statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict and many of which are beyond our control. There can be no assurance that our actual results will not differ materially from the results and expectations expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation, information related to:
•changes in economic and business conditions;
•product development;
•changes in financial and operating performance of our major customers and industries and markets served by us;
•the timing of orders received from customers;
•the gain or loss of significant customers;
•fluctuations in lithium market pricing, which could impact our revenues and profitability particularly due to our increased exposure to index-referenced and variable-priced contracts for battery grade lithium sales;
•inflationary trends in our input costs, such as raw materials, transportation and energy, and their effects on our business and financial results;
•changes with respect to contract renegotiations;
•potential production volume shortfalls;
•competition from other manufacturers;
•changes in the demand for our products or the end-user markets in which our products are sold;
•limitations or prohibitions on the manufacture and sale of our products;
•availability of raw materials;
•increases in the cost of raw materials and energy, and our ability to pass through such increases to our customers;
•technological change and development;
•changes in our markets in general;
•fluctuations in foreign currencies;
•changes in laws and government regulation impacting our operations or our products;
•changes in trade policies and tariffs;
•the occurrence of regulatory actions, proceedings, claims or litigation (including with respect to the U.S. Foreign Corrupt Practices Act and foreign anti-corruption laws);
•the occurrence of cyber-security breaches, terrorist attacks, industrial accidents or natural disasters;
•the effects of climate change, including any regulatory changes to which we might be subject;
•hazards associated with chemicals manufacturing;
•the inability to maintain current levels of insurance, including product or premises liability insurance, or the denial of such coverage;
•political unrest affecting the global economy, including adverse effects from terrorism or hostilities;
•political instability affecting our manufacturing operations or joint ventures;
•changes in accounting standards;
•the inability to achieve results from our global manufacturing cost reduction initiatives as well as our ongoing continuous improvement and rationalization programs;
•changes in the jurisdictional mix of our earnings and changes in tax laws and rates or interpretation;
34
•changes in monetary policies, inflation or interest rates that may impact our ability to raise capital or increase our cost of funds, impact the performance of our pension fund investments and increase our pension expense and funding obligations;
•the ability to apply for and obtain government funding to support new operations;
•volatility and uncertainties in the debt and equity markets;
•technology or intellectual property infringement, including cyber-security breaches, and other innovation risks;
•decisions we may make in the future;
•future acquisition and divestiture transactions, including the ability to successfully execute, operate and integrate acquisitions and divestitures and incurring additional indebtedness;
•expected benefits and expenses related to our new operating structure and asset optimization activities;
•timing of active and proposed restructuring and cost optimization projects;
•impact of any future pandemics;
•impacts of the situation in the Middle East and the military conflict between Russia and Ukraine, and the global response to it;
•performance of our partners in joint ventures and other projects;
•changes in credit ratings; and
•the other factors detailed from time to time in the reports we file with the Securities and Exchange Commission (“SEC”).
These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q. We assume no obligation to provide any revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws. The following discussion should be read together with our condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q.
The following is a discussion and analysis of our results of operations for the three-month and nine-month periods ended September 30, 2025 and 2024. A discussion of our consolidated financial condition and sources of additional capital is included under a separate heading, “Financial Condition and Liquidity.”
Overview
We are a world leader in transforming essential resources into critical ingredients for mobility, energy, connectivity, and health. Our purpose is to enable a more resilient world. We partner to pioneer new ways to move, power, connect, and protect. The end markets we serve include grid storage, automotive, aerospace, conventional energy, electronics, construction, agriculture and food, pharmaceuticals and medical devices. We believe that our world-class resources with reliable and consistent supply, our leading process chemistry, high-impact innovation, customer centricity and focus on people and planet will enable us to maintain a leading position in the industries in which we operate.
Secular trends favorably impacting demand within the end markets that we serve combined with our diverse product portfolio, cost discipline, broad geographic presence and customer-focused solutions will continue to be key drivers of our future earnings. We continue to build upon our existing green solutions portfolio and our ongoing mission to provide innovative, yet commercially viable, clean energy products and services to the marketplace to contribute to our sustainability-based revenue. For example, our Energy Storage business contributes to the growth of clean miles driven with electric vehicles and more efficient use of renewable energy through grid storage; Specialties enables the prevention of fires starting in electronic equipment, greater fuel efficiency from rubber tires and the reduction of emissions from coal fired power plants; and our Ketjen business enhances the efficiency of natural resources through more usable products from a single barrel of oil, enables safer, greener production of alkylates used to produce more environmentally-friendly fuels, and reduced emissions through cleaner transportation fuels. We believe our disciplined cost reduction efforts and ongoing productivity improvements, among other factors, position us well to take advantage of strengthening economic conditions as they occur, while softening the negative impact of the current challenging global economic environment.
Third Quarter 2025
During the third quarter of 2025:
•Our net sales for the quarter were $1.3 billion; volumes grew by 6% year-over-year in total, driven by 8% growth in both Energy Storage and Ketjen; adjusted EBITDA improved 7% year-over-year, driven by Specialties.
•Our cash flows from operations for the quarter were $355.6 million, up 57% from the prior-year period; cash flows from operations during the first nine months of 2025 were $893.8 million, an increase of 29% from the prior year.
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•Our board of directors declared a quarterly dividend of $0.405 per share on July 22, 2025, which was paid on October 1, 2025 to common shareholders of record at the close of business as of September 12, 2025.
Outlook
The current global business environment presents a diverse set of opportunities and challenges in the markets we serve. In particular, we believe that the global market for lithium battery and energy storage, particularly for electric vehicles (“EV”), remains strong, providing the opportunity to continue to develop high quality and innovative products while managing the high cost of expanding capacity. The other markets we serve continue to present various opportunities for value and growth as we have positioned ourselves to manage the impact on our business of changing global conditions, such as trade policies and tariffs, slow and uneven global growth, currency exchange volatility, crude oil price fluctuation, a dynamic pricing environment, an ever-changing landscape in electronics, the continuous need for cutting edge catalysts and technology by our refinery customers and increasingly stringent environmental standards. During the course of 2023, 2024 and through the first nine months of 2025, lithium index pricing dropped significantly. Amidst these dynamics, and despite recent downward lithium price pressure, we believe our long-term business fundamentals are sound and that we are strategically well-positioned as we remain focused on increasing sales volumes, optimizing and improving the value of our portfolio primarily through pricing and product development, managing costs and delivering value to our customers and shareholders. We believe that our businesses remain well-positioned to capitalize on new business opportunities and long-term trends driving growth within our end markets and to respond quickly to changes in economic conditions in these markets.
In order to optimize our cost structure and strengthen our financial flexibility, we have taken proactive actions, including certain restructuring activities and reducing planned capital expenditures. As part of these actions, we announced a new operating structure, effective November 1, 2024, that transitioned from two core global business units to a fully integrated functional model (excluding Ketjen) designed to increase agility, deliver significant cost savings and maintain long-term competitiveness. We continue to report results across our three existing operating segments of Energy Storage, Specialties and Ketjen. If lithium index pricing trends further downward or remains at low levels for an extended time, we may need to take additional measures to support growth and financial flexibility, including further restructuring actions.
The Company continues to monitor the potential impact of tariffs proposed or imposed by the U.S. and internationally. At this time we do not expect a material, direct impact to our financial statements from the tariffs announced to date. The potential direct exposure of the Energy Storage segment to proposed or imposed tariffs is expected to be minimal as most of our China production is sold into China or other Asian countries, and some critical materials are fully or partially exempt from tariffs in their currently proposed form. While there may be an impact to the Specialties and Ketjen businesses, we do not expect it to be material due to our global footprint and planned mitigation actions. In July 2025, legislation commonly known as the “One Big Beautiful Bill Act” was signed into law. Among other potential impacts, this bill included a number of tax provisions including extending existing provisions that were set to expire, substantive changes in international tax rules, and the repeal or phase outs of certain energy tax credits. We are evaluating the impacts of this legislation on our financial statements. In addition, relating to the current situation in the Middle East, our business operations have continued as normal with some shipping and raw material delays. We are monitoring the situation and will continue to make efforts to protect the safety of our employees and the health of our business.
Energy Storage: We expect Energy Storage net sales and profitability to decrease year-over-year in 2025 as lithium market prices are at lower levels compared to 2024. Because many of our contracts are index-referenced and variable-priced, our business is generally aligned with changes in market and index pricing. As a result, increases or further decreases in lithium market pricing could have a material impact on our results. We expect sales volume to be higher than prior year as a result of record integrated production, strong spodumene sales and reduced inventory. We could record inventory valuation charges in 2025 if lithium prices continue to deteriorate during the projected period of conversion and sale. Global EV sales are expected to continue to increase over the prior year, driving continued demand for lithium batteries.
As part of the above-mentioned actions to optimize our cost structure and strengthen our financial flexibility, we have stopped construction of the Kemerton Trains 3 and 4. In addition, we have put Kemerton Train 2 and the Chengdu, China conversion facilities into care and maintenance. Kemerton Train 1 will continue to operate and activity around it is currently focused on commercialization efforts. Production from the Chengdu site has been transferred to another processing facility in China.
On a longer-term basis, we believe that demand for lithium will continue to grow as new lithium applications advance and the use of plug-in hybrid EVs and full battery EVs increases. This demand for lithium is supported by a favorable backdrop of steadily declining lithium-ion battery costs, increasing battery performance, continuing significant investments in the battery and EV supply chain by cathode and battery producers and automotive OEMs and favorable global public policy toward e-mobility/renewable energy usage. Our outlook is also bolstered by long-term supply agreements with key strategic customers,
36
reflecting our standing as a preferred global lithium partner, highlighted by our scale, access to geographically diverse, low-cost resources and long-term track record of reliability of supply and operating execution.
Specialties: We expect both net sales and profitability to be higher in 2025 year-over-year as we recover from reduced customer demand in certain markets, including consumer and industrial electronics. In addition, we expect to maintain strong demand in other end-markets, such as pharmaceuticals, agriculture and oilfield services.
On a longer-term basis, we continue to believe that improving global standards of living, widespread digitization, increasing demand for data management capacity and the potential for increasingly stringent fire safety regulations in developing markets are likely to drive continued demand for fire safety, bromine and lithium specialties products. We are focused on profitably growing our globally competitive production networks to serve all major bromine and lithium specialties consuming products and markets. The combination of our solid, long-term business fundamentals, strong cost position, product innovations and effective management of raw material costs should enable us to manage our business through end-market challenges and to capitalize on opportunities that are expected with favorable market trends in select end markets.
Ketjen: Total Ketjen results in 2025 are expected to increase year-over-year due to favorable fluidized catalytic cracking (“FCC”) volumes, partially offset by lower clean fuel technologies (“CFT”) volumes due to order timing. The FCC market is expected to remain stable. Hydroprocessing catalysts (“HPC”) demand is project-driven, based on the refineries taking turnarounds.
On a longer-term basis, we believe increased global demand for transportation fuels, new refinery start-ups, ongoing adoption of cleaner fuels and the continuous growth in chemical derivatives from petroleum products will be the primary drivers of growth in our Ketjen business. We believe delivering superior end-use performance continues to be the most effective way to create sustainable value in the refinery catalysts industry. We also believe our technologies continue to provide significant performance and financial benefits to refiners challenged to meet tighter regulations around the world.
On October 25, 2025, the Company signed a definitive agreement to divest the controlling ownership interest of its Refining Solutions business (as defined below) and will initially retain a 49% ownership interest upon completion of the transaction. The Refining Solutions business being divested is defined as the Company’s Ketjen reportable segment, excluding its PCS business and the Company’s 50% ownership interest in Eurecat S.A. In a separate transaction, on October 23, 2025, the Company signed a definitive agreement to divest its 50% ownership interest in Eurecat. The Company expects these transactions to be completed in the first half of 2026, subject to customary and regulatory closing conditions. The PCS business will continue to be operated by the Company following these transactions.
Corporate: We continue to focus on cash generation, working capital management and process efficiencies. We expect our global effective tax rate will vary based on the locales in which income is actually earned and remains subject to potential volatility from changing legislation in the United States. In 2024, we took actions as part of an effort that will focus on preserving our world-class resource advantages, optimizing our global conversion network, improving our cost competitiveness and efficiency, reducing capital intensity and enhancing our financial flexibility. As part of these measures, we stopped construction or deferred spending on certain capital projects, such as the Kemerton conversion plant noted above. In addition, we will incur severance and other restructuring charges associated with the Company’s transition to a new fully integrated functional operating model.
From time to time, we may evaluate the merits of any opportunities that may arise for acquisitions or other business development activities that will complement our business footprint. Additional information regarding our products, markets and financial performance is provided at our website, www.albemarle.com. Our website is not a part of this document nor is it incorporated herein by reference.
Results of Operations
The following data and discussion provides an analysis of certain significant factors affecting our results of operations during the periods included in the accompanying consolidated statements of loss. Certain percentage changes are considered not meaningful (“NM”).
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Third Quarter 2025 Compared to Third Quarter 2024
Net Sales
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 1,307,829 | $ | 1,354,692 | $ | (46,863) | (3) | % | |||||||||||||||
•$131.7 million decrease primarily attributable to lower lithium carbonate and hydroxide market pricing in Energy Storage •$75.7 million increase primarily attributable to higher sales volume in Energy Storage and Ketjen •$9.2 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
Gross Profit (Loss)
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Gross profit (loss) | $ | 117,610 | $ | (104,034) | $ | 221,644 | NM | ||||||||||||||||
| Gross profit (loss) margin | 9.0 | % | (7.7) | % | |||||||||||||||||||
•Lower average input costs, driven by lower lithium market pricing dynamics in Energy Storage. The lower cost of goods sold of spodumene purchased from Windfield is offset in the equity in net income of unconsolidated investments in the period the converted inventory is sold to third-party customers •Higher sales volume primarily attributable to Energy Storage and Ketjen •Favorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
Selling, General and Administrative (“SG&A”) Expenses
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Selling, general and administrative expenses | $ | 138,577 | $ | 154,253 | $ | (15,676) | (10) | % | |||||||||||||||
| Percentage of Net sales | 10.6 | % | 11.4 | % | |||||||||||||||||||
•Reduced expenses as part of cost reduction efforts, including compensation costs, outside services and travel and entertainment costs | |||||||||||||||||||||||
Goodwill Impairment Charges
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Goodwill impairment charges | $ | 181,070 | $ | — | $ | 181,070 | NM | ||||||||||||||||
•Non-cash goodwill impairment charge recorded in 2025 representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment, following the signing of a definitive agreement to divest the controlling ownership interest in its Refining Solutions business | |||||||||||||||||||||||
Restructuring Charges and Asset Write-Offs
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Restructuring charges and asset write-offs | $ | 2,275 | $ | 828,146 | $ | (825,871) | (100) | % | |||||||||||||||
•2025 primarily included adjustments to contract cancellation costs with key suppliers and costs to put Kemerton Train 2 into care and maintenance as part of the restructuring plan •2024 included capital project asset write-offs and associated contract cancellation costs for our Kemerton facility, and severance and employee benefit costs at Corporate and each of the segments | |||||||||||||||||||||||
Research and Development Expenses
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Research and development expenses | $ | 12,674 | $ | 22,397 | $ | (9,723) | (43) | % | |||||||||||||||
| Percentage of Net sales | 1.0 | % | 1.7 | % | |||||||||||||||||||
•Reduction primarily driven by lower research and development spending in Specialties and Energy Storage as part of cost reduction efforts | |||||||||||||||||||||||
38
Interest and Financing Expenses
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Interest and financing expenses | $ | (50,959) | $ | (47,760) | $ | (3,199) | 7 | % | |||||||||||||||
•Lower capitalized interest in 2025 resulting from stopping construction of Kemerton Trains 3 and 4 and other projects, as well as the overall reduction of capital expenditure spending | |||||||||||||||||||||||
Other Income (Expenses), Net
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Other income (expenses), net | $ | 28,799 | $ | (22,256) | $ | 51,055 | NM | ||||||||||||||||
•$51.7 million increase attributable to foreign exchange impacts from lower losses recorded in 2025. Foreign exchange impact in 2024 includes a loss of $16.2 million due to the reclass from accumulated other comprehensive loss related to the dedesignation of cash flow hedge. •$7.2 million decrease attributable to interest income from lower interest rates in 2025 •2025 included a gain of $8.0 million related to the fair market value adjustment of equity securities in public companies compared to $5.0 million of losses for similar fair value adjustments in 2024 | |||||||||||||||||||||||
Income Tax (Benefit) Expense
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Income tax (benefit) expense | $ | (30,565) | $ | 110,853 | $ | (141,418) | NM | ||||||||||||||||
| Effective income tax rate | 12.8 | % | (9.4) | % | |||||||||||||||||||
•Change in 2025 primarily driven by the geographic mix of earnings, including the impact from the valuation allowance for losses in our consolidated Australian entities and certain China entities •The goodwill impairment charge recorded during the 2025 was primarily non-deductible and resulted in a minimal income tax benefit •2024 included the impact from the valuation allowance for losses in our consolidated Australian entities and certain China entities | |||||||||||||||||||||||
Equity in Net Income of Unconsolidated Investments
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Equity in net income of unconsolidated investments | $ | 60,640 | $ | 229,058 | $ | (168,418) | (74) | % | |||||||||||||||
•Decreased earnings primarily due to lower pricing from the Windfield joint venture. The impact of lower spodumene pricing driving the decrease in equity in net income of Windfield is offset in cost of goods sold as lower input costs •$13.9 million decrease attributable to unfavorable foreign exchange impacts from the Windfield joint venture | |||||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net income attributable to noncontrolling interests | $ | (12,753) | $ | (8,351) | $ | (4,402) | 53 | % | |||||||||||||||
•Increase in consolidated income related to our Jordan Bromine Company Limited (“JBC”) joint venture primarily due to increased sales volume, partially offset by lower pricing | |||||||||||||||||||||||
39
Net Loss Attributable to Albemarle Corporation
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation | $ | (160,694) | $ | (1,068,992) | $ | 908,298 | 85 | % | |||||||||||||||
| Percentage of Net sales | (12.3) | % | (78.9) | % | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation common shareholders | $ | (202,382) | $ | (1,110,679) | $ | 908,297 | 82 | % | |||||||||||||||
| Basic loss per share attributable to common shareholders | $ | (1.72) | $ | (9.45) | $ | 7.73 | 82 | % | |||||||||||||||
| Diluted loss per share attributable to common shareholders | $ | (1.72) | $ | (9.45) | $ | 7.73 | 82 | % | |||||||||||||||
•Increase in 2025 results due to reasons noted above •Net loss attributable to Albemarle Corporation common shareholders includes reductions of $41.7 million for mandatory convertible preferred stock dividends in both 2025 and 2024 | |||||||||||||||||||||||
Other Comprehensive (Loss) Income, Net of Tax
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Other comprehensive (loss) income, net of tax | $ | (4,094) | $ | 167,939 | $ | (172,033) | NM | ||||||||||||||||
•Foreign currency translation and other | $ | (3,987) | $ | 158,724 | $ | (162,711) | NM | ||||||||||||||||
•2025 included unfavorable movements in the Taiwanese Dollar of approximately $5 million, the Japanese Yen of approximately $4 million and a net unfavorable variance in various other currencies of less than $1 million, partially offset by favorable movements in the Chinese Renminbi of approximately $4 million and the Euro of approximately $2 million •2024 included favorable movements in the Euro of approximately $153 million, the Japanese Yen of approximately $12 million, the Taiwanese Dollar of approximately $3 million and a net favorable variance in various other currencies of $4 million, partially offset by unfavorable movements in the Chinese Renminbi of approximately $12 million | |||||||||||||||||||||||
•Cash flow hedge | $ | (107) | $ | 9,215 | $ | (9,322) | NM | ||||||||||||||||
Segment Information Overview. We have identified three reportable segments according to the nature and economic characteristics of our products as well as the manner in which the information is used internally by the Company’s chief operating decision maker to evaluate performance and make resource allocation decisions. Our reportable business segments consist of: (1) Energy Storage, (2) Specialties and (3) Ketjen.
The Corporate category is not considered to be a segment and includes corporate-related items not allocated to the operating segments. Pension and OPEB service cost (which represents the benefits earned by active employees during the period) and amortization of prior service cost or benefit are allocated to the reportable segments and Corporate, whereas the remaining components of pension and OPEB benefits cost or credit (“Non-operating pension and OPEB items”) are included in Corporate. Segment data includes intersegment transfers of raw materials at cost and allocations for certain corporate costs.
Our chief operating decision maker (“CODM”) assesses the ongoing performance of the Company’s business segments and allocates resources by considering the variance in the actual results to the forecasts on a monthly basis. The annual operating budget and ongoing forecasting process use adjusted EBITDA as a key metric in assessing the segments performance. In addition, the CODM uses adjusted EBITDA for business and enterprise planning purposes and as a significant component in the calculation of performance-based compensation for management and other employees. The Company’s definition of adjusted EBITDA is earnings before interest and financing expenses, income tax expenses, the proportionate share of Windfield income tax expense, depreciation and amortization, as adjusted on a consistent basis for certain non-operating, non-recurring or unusual items on a segment basis. These non-operating, non-recurring or unusual items may include acquisition and integration related costs, gains or losses on sales of businesses, restructuring charges and asset write-offs, facility divestiture charges, certain litigation and arbitration costs and charges, non-operating pension and OPEB items and other significant non-recurring items. This calculation is consistent with the definition of adjusted EBITDA used in the leverage financial covenant calculation in the Company’s credit agreement, which is a material agreement for the Company. Total adjusted EBITDA is a financial measure that is not required by, or presented in accordance with, the generally accepted accounting principles in the United States (“U.S. GAAP”). Total adjusted EBITDA should not be considered as an alternative to Net loss attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP, or any other financial measure reported in accordance with U.S. GAAP.
40
| Three Months Ended September 30, | Percentage Change | ||||||||||||||||||||||||||||
| 2025 | % | 2024 | % | 2025 vs 2024 | |||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||
| Energy Storage | $ | 708,755 | 54.2 | % | $ | 767,291 | 56.6 | % | (8) | % | |||||||||||||||||||
| Specialties | 344,960 | 26.4 | % | 342,376 | 25.3 | % | 1 | % | |||||||||||||||||||||
| Ketjen | 254,114 | 19.4 | % | 245,025 | 18.1 | % | 4 | % | |||||||||||||||||||||
| Total net sales | $ | 1,307,829 | 100.0 | % | $ | 1,354,692 | 100.0 | % | (3) | % | |||||||||||||||||||
| Adjusted EBITDA: | |||||||||||||||||||||||||||||
| Energy Storage | $ | 124,077 | 55.0 | % | $ | 142,887 | 67.5 | % | (13) | % | |||||||||||||||||||
| Specialties | 75,544 | 33.5 | % | 56,273 | 26.6 | % | 34 | % | |||||||||||||||||||||
| Ketjen | 33,566 | 14.9 | % | 35,473 | 16.8 | % | (5) | % | |||||||||||||||||||||
| Total segment adjusted EBITDA | 233,187 | 103.4 | % | 234,633 | 110.9 | % | (1) | % | |||||||||||||||||||||
| Corporate | (7,557) | (3.4) | % | (23,135) | (10.9) | % | (67) | % | |||||||||||||||||||||
| Total adjusted EBITDA | $ | 225,630 | 100.0 | % | $ | 211,498 | 100.0 | % | 7 | % | |||||||||||||||||||
See below for a reconciliation of total segment adjusted EBITDA to consolidated Net loss attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
| Three Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Total segment adjusted EBITDA | $ | 233,187 | $ | 234,633 | |||||||
| Corporate expenses, net | (7,557) | (23,135) | |||||||||
| Depreciation and amortization | (164,483) | (163,502) | |||||||||
| Interest and financing expenses | (50,959) | (47,760) | |||||||||
| Income tax benefit (expense) | 30,565 | (110,853) | |||||||||
Proportionate share of Windfield income tax expense(a) | (20,023) | (99,523) | |||||||||
Acquisition and integration related costs(b) | (1,883) | (439) | |||||||||
Restructuring charges and asset write-offs(c) | (2,321) | (860,864) | |||||||||
Goodwill impairment charges(d) | (181,070) | — | |||||||||
| Non-operating pension and OPEB items | (367) | 331 | |||||||||
Gain (loss) in fair value of public equity securities(e) | 7,980 | (4,983) | |||||||||
Other(f) | (3,763) | 7,103 | |||||||||
| Net loss attributable to Albemarle Corporation | $ | (160,694) | $ | (1,068,992) | |||||||
(a)Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture.
(b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in SG&A.
(c)See Note 9, “Restructuring Charges and Asset Write-offs,” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
(d)See Note 4, “Goodwill and Other Intangibles,” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
(e)Represents the net change in fair value of investments in public equity securities for the three-month periods ended September 30, 2025 and 2024, recorded in Other income (expenses), net.
(f)Included amounts for the three months ended September 30, 2025 recorded in:
•SG&A - $2.0 million of severance expenses not related to a restructuring plan, $1.4 million of expenses related to the redemption of preferred equity in a Grace subsidiary, $1.4 million related to the write-off of certain fixed assets and $1.3 million of expenses related to certain historical legal matters, partially offset by $1.9 million of gains from the sale of assets not part of our production operations.
•Other income (expenses), net - $0.5 million gain resulting from the adjustment of indemnification related to a previously disposed business.
Included amounts for the three months ended September 30, 2024 recorded in:
•SG&A - $0.1 million of expenses related to certain historical legal matters.
•Other income (expenses), net - $9.2 million of income from PIK dividends of preferred equity in a Grace subsidiary, partially offset by a $2.0 million loss resulting from the adjustment of indemnification related to a previously disposed business.
41
Energy Storage
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 708,755 | $ | 767,291 | $ | (58,536) | (8) | % | |||||||||||||||
•$119.0 million decrease attributable to unfavorable pricing impacts, primarily in battery- and tech-grade carbonate and hydroxide sold under index-referenced and variable-priced contracts •$58.1 million increase attributable to higher sales volume driven by customer demand, partially offset by reduced tolling volumes •$2.4 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 124,077 | $ | 142,887 | $ | (18,810) | (13) | % | |||||||||||||||
•Unfavorable pricing impacts in lithium carbonate and hydroxide •Decreased equity earnings from lower pricing from the Windfield joint venture. The impact of lower spodumene pricing offsets lower input costs in cost of goods sold •Savings from designed restructuring and productivity improvements •Decreased commission expenses in Chile resulting from the lower pricing | |||||||||||||||||||||||
Specialties
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 344,960 | $ | 342,376 | $ | 2,584 | 1 | % | |||||||||||||||
•Pricing was essentially flat with favorable pricing in bromine and derivatives, and flame retardants, offset by unfavorable pricing in lithium specialties •$2.2 million decrease attributable to lower sales volumes related to timing of sales •$4.7 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 75,544 | $ | 56,273 | $ | 19,271 | 34 | % | |||||||||||||||
•Lower input costs from raw materials •Savings from restructuring and productivity improvements •Lower sales volume related to timing of sales | |||||||||||||||||||||||
Ketjen
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 254,114 | $ | 245,025 | $ | 9,089 | 4 | % | |||||||||||||||
•$19.8 million increase attributable to higher sales volume driven by FCC •$12.8 million decrease attributable to unfavorable pricing impacts, primarily in CFT and FCC •$2.1 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 33,566 | $ | 35,473 | $ | (1,907) | (5) | % | |||||||||||||||
•Unfavorable pricing impacts •Higher sales volume driven by FCC •Favorable equity in earnings from unconsolidated investments in CFT •$1.6 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies | |||||||||||||||||||||||
Corporate
| In thousands | Q3 2025 | Q3 2024 | $ Change | % Change | |||||||||||||||||||
| Adjusted EBITDA | $ | (7,557) | $ | (23,135) | $ | 15,578 | (67) | % | |||||||||||||||
•$21.7 million increase attributable to favorable currency exchange impacts, net of a $13.9 million decrease in foreign exchange impacts from our Windfield joint venture •Reduced expenses as part of cost reduction efforts, including compensation costs, outside services and travel and entertainment costs | |||||||||||||||||||||||
42
First Nine Months 2025 Compared to First Nine Months 2024
Net Sales
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 3,714,702 | $ | 4,145,813 | $ | (431,111) | (10) | % | |||||||||||||||
•$654.5 million decrease primarily attributable to lower lithium carbonate and hydroxide market pricing in Energy Storage •$220.4 million increase attributable to higher sales volume in Energy Storage and Specialties •$3.0 million of favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
Gross Profit (Loss)
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Gross profit (loss) | $ | 470,785 | $ | (75,674) | $ | 546,459 | NM | ||||||||||||||||
| Gross profit (loss) margin | 12.7 | % | (1.8) | % | |||||||||||||||||||
•Lower average input costs, driven by lower lithium market pricing dynamics in Energy Storage. The lower cost of goods sold of spodumene purchased from Windfield is offset in the equity in net income of unconsolidated investments in the period the converted inventory is sold to third-party customers •Higher sales volume in Energy Storage and Specialties •Favorable currency exchange impacts resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
Selling, General and Administrative Expenses
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Selling, general and administrative expenses | $ | 394,536 | $ | 482,052 | $ | (87,516) | (18) | % | |||||||||||||||
| Percentage of Net sales | 10.6 | % | 11.6 | % | |||||||||||||||||||
•Reduced expenses as part of cost reduction efforts, including compensation costs, outside services and travel and entertainment costs •$13.3 million of gains from the sale of assets not part of our production operations in 2025 •$5.3 million of expenses related to certain historical legal and environmental matters in 2024 | |||||||||||||||||||||||
Goodwill Impairment Charges
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Goodwill impairment charges | $ | 181,070 | $ | — | $ | 181,070 | NM | ||||||||||||||||
•Non-cash goodwill impairment charge recorded in 2025 representing the full value of goodwill associated with the Refining Solutions reporting unit within the Ketjen segment, following the signing of a definitive agreement to divest the controlling ownership interest in its Refining Solutions business | |||||||||||||||||||||||
Restructuring Charges and Asset Write-Offs
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Restructuring charges and asset write-offs | $ | 5,660 | $ | 1,156,522 | $ | (1,150,862) | (100) | % | |||||||||||||||
•2025 primarily included adjustments to contract cancellation costs with key suppliers and costs to put the Chengdu, China conversion facility and Kemerton Train 2 into care and maintenance as part of the restructuring plan. These costs were partially offset by proceeds for certain Kemerton equipment, and updated its estimates concerning the progress of construction activities and related contractual obligations, resulting in a favorable adjustment of asset write-offs •2024 included capital project asset write-offs and associated contract cancellation costs for our Kemerton facility and certain other projects, and severance and employee benefit costs at Corporate and each of the segments | |||||||||||||||||||||||
Research and Development Expenses
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Research and development expenses | $ | 39,217 | $ | 66,699 | $ | (27,482) | (41) | % | |||||||||||||||
| Percentage of Net sales | 1.1 | % | 1.6 | % | |||||||||||||||||||
•Reduction primarily driven by lower research and development spending in Specialties and Energy Storage as part of cost reduction efforts | |||||||||||||||||||||||
43
Interest and Financing Expenses
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Interest and financing expenses | $ | (149,875) | $ | (120,916) | $ | (28,959) | 24 | % | |||||||||||||||
•Lower capitalized interest in 2025 resulting from stopping construction of Kemerton Trains 3 and 4 and other projects, as well as the overall reduction of capital expenditure spending •Partially offset by lower debt balances in 2025 with commercial paper outstanding during the first quarter of 2024 | |||||||||||||||||||||||
Other Income, Net
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Other income, net | $ | 32,490 | $ | 61,311 | $ | (28,821) | (47) | % | |||||||||||||||
•$38.0 million loss resulting from the redemption of preferred equity in a Grace subsidiary in 2025 •$18.8 million decrease attributable to interest income from lower interest rates in 2025 •$16.5 million decrease attributable to foreign exchange impacts from losses recorded in 2025 compared to gains recorded in 2024 •2025 included gains of $3.1 million related to the fair market value adjustment of equity securities in public companies compared to $65.9 million of losses for similar fair value adjustments and sales of equity securities in 2024 •$17.3 million gain in 2024 primarily from the sale of assets at a site not part of our operations | |||||||||||||||||||||||
Income Tax (Benefit) Expense
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Income tax (benefit) expense | $ | (449) | $ | 76,472 | $ | (76,921) | NM | ||||||||||||||||
Effective income tax rate | 0.2 | % | (4.2) | % | |||||||||||||||||||
•Change in 2025 primarily driven by the geographic mix of earnings, including the impact from the valuation allowance for losses in our consolidated Australian entities and certain China entities •The goodwill impairment charge recorded during the 2025 was primarily non-deductible and resulted in a minimal income tax benefit •2024 included the impact from the valuation allowance for losses in our consolidated Australian entities and certain entities in China | |||||||||||||||||||||||
Equity in Net Income of Unconsolidated Investments
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Equity in net income of unconsolidated investments | $ | 203,184 | $ | 696,436 | $ | (493,252) | (71) | % | |||||||||||||||
•Decreased earnings primarily due to lower pricing from the Windfield joint venture. The impact of lower spodumene pricing driving the decrease in equity in net income of Windfield is offset above in cost of goods sold as lower input costs •$11.8 million increase attributable to favorable foreign exchange impacts from the Windfield joint venture | |||||||||||||||||||||||
Net Income Attributable to Noncontrolling Interests
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net income attributable to noncontrolling interests | $ | (32,999) | $ | (34,154) | $ | 1,155 | (3) | % | |||||||||||||||
•Decrease in consolidated income related to our JBC joint venture primarily due to lower pricing | |||||||||||||||||||||||
44
Net Loss Attributable to Albemarle Corporation
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation | $ | (96,449) | $ | (1,254,742) | $ | 1,158,293 | NM | ||||||||||||||||
| Percentage of Net sales | (2.6) | % | (30.3) | % | |||||||||||||||||||
| Net loss attributable to Albemarle Corporation common shareholders | $ | (221,512) | $ | (1,349,701) | $ | 1,128,189 | 84 | % | |||||||||||||||
| Basic loss per share | $ | (1.88) | $ | (11.49) | $ | 9.61 | 84 | % | |||||||||||||||
| Diluted loss per share | $ | (1.88) | $ | (11.49) | $ | 9.61 | 84 | % | |||||||||||||||
•Increase in 2025 results due to reasons noted above •Net loss attributable to Albemarle Corporation common shareholders includes reductions of $125.1 million and $95.0 million for mandatory convertible preferred stock dividends in 2025 and 2024, respectively | |||||||||||||||||||||||
Other Comprehensive Income, Net of Tax
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Other comprehensive income, net of tax | $ | 373,465 | $ | 58,925 | $ | 314,540 | NM | ||||||||||||||||
•Foreign currency translation and other | $ | 373,786 | $ | 61,753 | $ | 312,033 | NM | ||||||||||||||||
•2025 included favorable movements in the Euro of approximately $342 million, the Taiwanese Dollar of approximately $9 million, the Chinese Renminbi of approximately $8 million, the Brazilian Real of approximately $7 million, the Japanese Yen of approximately $5 million and a net favorable variance in various other currencies of approximately $4 million •2024 included favorable movements in the Euro of approximately $79 million, partially offset by unfavorable movements in the Brazilian Real of approximately $8 million, the Chinese Renminbi of approximately $3 million, the Taiwanese Dollar of approximately $3 million and a net unfavorable variance in various other currencies of $4 million | |||||||||||||||||||||||
•Cash flow hedge | $ | (321) | $ | (2,828) | $ | 2,507 | (89) | % | |||||||||||||||
Segment Information Overview. Summarized financial information concerning our reportable segments is shown in the following tables.
| Nine Months Ended September 30, | Percentage Change | ||||||||||||||||||||||||||||
| 2025 | % | 2024 | % | 2025 vs 2024 | |||||||||||||||||||||||||
| (In thousands, except percentages) | |||||||||||||||||||||||||||||
| Net sales: | |||||||||||||||||||||||||||||
| Energy Storage | $ | 1,950,976 | 52.5 | % | $ | 2,398,299 | 57.8 | % | (19) | % | |||||||||||||||||||
| Specialties | 1,017,534 | 27.4 | % | 993,041 | 24.0 | % | 2 | % | |||||||||||||||||||||
| Ketjen | 746,192 | 20.1 | % | 754,473 | 18.2 | % | (1) | % | |||||||||||||||||||||
| Total net sales | $ | 3,714,702 | 100.0 | % | $ | 4,145,813 | 100.0 | % | (10) | % | |||||||||||||||||||
| Adjusted EBITDA: | |||||||||||||||||||||||||||||
| Energy Storage | $ | 530,157 | 64.0 | % | $ | 623,862 | 70.2 | % | (15) | % | |||||||||||||||||||
| Specialties | 207,187 | 25.0 | % | 155,629 | 17.5 | % | 33 | % | |||||||||||||||||||||
| Ketjen | 100,721 | 12.1 | % | 95,288 | 10.7 | % | 6 | % | |||||||||||||||||||||
| Total segment adjusted EBITDA | 838,065 | 101.1 | % | 874,779 | 98.4 | % | (4) | % | |||||||||||||||||||||
| Corporate | (8,816) | (1.1) | % | 14,315 | 1.6 | % | NM | ||||||||||||||||||||||
| Total adjusted EBITDA | $ | 829,249 | 100.0 | % | $ | 889,094 | 100.0 | % | (7) | % | |||||||||||||||||||
See below for a reconciliation of total segment adjusted EBITDA to consolidated Net loss attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with U.S. GAAP (in thousands):
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| Nine Months Ended September 30, | |||||||||||
| 2025 | 2024 | ||||||||||
| Total segment adjusted EBITDA | $ | 838,065 | $ | 874,779 | |||||||
| Corporate expenses, net | (8,816) | 14,315 | |||||||||
| Depreciation and amortization | (494,968) | (425,532) | |||||||||
| Interest and financing expenses | (149,875) | (120,916) | |||||||||
| Income tax benefit (expense) | 449 | (76,472) | |||||||||
Proportionate share of Windfield income tax expense(a) | (78,499) | (292,992) | |||||||||
Acquisition and integration related costs(b) | (5,091) | (3,927) | |||||||||
Restructuring charges and asset write-offs(c) | (5,772) | (1,194,614) | |||||||||
Goodwill impairment charges(d) | (181,070) | — | |||||||||
| Non-operating pension and OPEB items | (978) | 993 | |||||||||
Gain (loss) in fair value on public equity securities(e) | 3,144 | (65,922) | |||||||||
Other(f) | (13,038) | 35,546 | |||||||||
| Net loss attributable to Albemarle Corporation | $ | (96,449) | $ | (1,254,742) | |||||||
(a)Albemarle’s 49% ownership interest in the reported income tax expense of the Windfield joint venture.
(b)Costs related to the acquisition, integration and potential divestitures for various significant projects, recorded in SG&A.
(c)See Note 9, “Restructuring Charges and Asset Write-offs,” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
(d)See Note 4, “Goodwill and Other Intangibles,” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q for further details.
(e)Loss of $33.7 million recorded in Other income, net for the nine months ended September 30, 2024 resulting from the sale of investments in public equity securities and a gain (loss) of $3.1 million and ($32.2) million recorded in Other income, net for the nine months ended September 30, 2025 and 2024, respectively, resulting from the change in fair value of investments in public equity securities.
(f)Included amounts for the nine months ended September 30, 2025 recorded in:
•SG&A - $13.3 million of gains from the sale of assets not part of our production operations, partially offset by $3.8 million of severance expenses not related to a restructuring plan, $1.9 million of expenses related to certain historical legal matters, $1.4 million of expenses related to the redemption of preferred equity in a Grace subsidiary and $1.4 million related to the write-off of certain fixed assets.
•Other income, net - $38.0 million loss resulting from the redemption of preferred equity in a Grace subsidiary and $1.9 million of charges for asset retirement obligations at a site not part of our operations, partially offset by $19.8 million of income from PIK dividends of the preferred equity in a Grace subsidiary prior to redemption and a $2.4 million gain primarily resulting from the adjustment of indemnification related to previously disposed businesses.
Included amounts for the nine months ended September 30, 2024 recorded in:
•Cost of goods sold - $1.4 million of expenses related to non-routine labor and compensation related costs that are outside normal compensation arrangements.
•SG&A - $5.3 million of expenses related to certain historical legal and environmental matters.
•Other income, net - $26.8 million of income from PIK dividends of preferred equity in a Grace subsidiary, a $17.3 million gain primarily from the sale of assets at a site not part of our operations, a $0.6 million gain from an updated cost estimate of an environmental reserve at a site not part of our operations and a $0.4 million net gain primarily resulting from the adjustment of indemnification related to previously disposed businesses, partially offset by $2.9 million of charges for asset retirement obligations at a site not part of our operations.
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Energy Storage
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 1,950,976 | $ | 2,398,299 | $ | (447,323) | (19) | % | |||||||||||||||
•$627.4 million decrease attributable to unfavorable pricing impacts, primarily in battery- and tech-grade carbonate and hydroxide sold under index-referenced and variable-priced contracts •$181.1 million increase attributable to higher sales volume driven by customer demand •$1.0 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 530,157 | $ | 623,862 | $ | (93,705) | (15) | % | |||||||||||||||
•Unfavorable pricing impacts in lithium carbonate and hydroxide •Decreased equity earnings from lower pricing from the Windfield joint venture in Energy Storage. The impact of lower spodumene pricing offsets lower input costs in cost of goods sold •Savings from restructuring and productivity improvements •Decreased commission expenses in Chile resulting from the lower pricing •$8.8 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
Specialties
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 1,017,534 | $ | 993,041 | $ | 24,493 | 2 | % | |||||||||||||||
•$50.9 million increase attributable to higher sales volume related to increased demand •$29.4 million decrease primarily attributable to unfavorable pricing impacts in lithium specialties, partially offset by favorable pricing in bromine and derivatives •$3.1 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 207,187 | $ | 155,629 | $ | 51,558 | 33 | % | |||||||||||||||
•Higher sales volume related to increased demand •Savings from restructuring and productivity improvements •Lower input costs from raw materials •Unfavorable pricing impacts •$2.0 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies | |||||||||||||||||||||||
Ketjen
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Net sales | $ | 746,192 | $ | 754,473 | $ | (8,281) | (1) | % | |||||||||||||||
•$11.6 million decrease attributable to lower sales volume, primarily in CFT •$2.3 million increase attributable to favorable pricing impacts, primarily in CFT and PCS •$1.0 million increase attributable to favorable currency translation resulting from the weaker U.S. Dollar against various currencies | |||||||||||||||||||||||
| Adjusted EBITDA | $ | 100,721 | $ | 95,288 | $ | 5,433 | 6 | % | |||||||||||||||
•Favorable pricing impacts driven by CFT and PCS •Favorable equity in earnings from unconsolidated investments in CFT •$2.6 million decrease attributable to unfavorable currency translation resulting from the stronger U.S. Dollar against various currencies | |||||||||||||||||||||||
Corporate
| In thousands | YTD 2025 | YTD 2024 | $ Change | % Change | |||||||||||||||||||
| Adjusted EBITDA | $ | (8,816) | $ | 14,315 | $ | (23,131) | NM | ||||||||||||||||
•$20.8 million decrease attributable to unfavorable currency exchange impacts, net of a $11.8 million increase in foreign exchange impacts from our Windfield joint venture •Reduced expenses as part of cost reduction efforts, including compensation costs, outside services and travel and entertainment costs | |||||||||||||||||||||||
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Financial Condition and Liquidity
Overview
The principal uses of cash in our business generally have been capital investments and resource development costs, funding working capital, and service of debt. We also make contributions to our defined benefit pension plans, pay dividends to our shareholders and have the ability to repurchase shares of our common stock. Historically, cash to fund the needs of our business has been principally provided by cash from operations, debt financing and equity issuances.
We are continually focused on working capital efficiency particularly in the areas of accounts receivable, payables and inventory. We anticipate that cash on hand, cash provided by operating activities, proceeds from divestitures and borrowings will be sufficient to pay our operating expenses, satisfy debt service obligations, fund capital expenditures and other investing activities, fund pension contributions and pay dividends for the foreseeable future.
Cash Flow
During the first nine months of 2025, cash on hand, cash provided by operations and $288.0 million received from the redemption of preferred equity funded $434.4 million of capital expenditures for plant, machinery and equipment, dividends to common shareholders of $142.9 million and dividends to mandatory convertible preferred shareholders of $125.1 million. Our operations provided $893.8 million of cash flows during the first nine months of 2025, as compared to $692.3 million for the first nine months of 2024. The change compared to prior year was primarily due to the receipt of an Energy Storage customer prepayment of $350 million during the first quarter of 2025 and increased earnings from Specialties and Ketjen, partially offset by a decrease in cash flows from working capital changes, lower dividends received from unconsolidated investments and decreased earnings from the Energy Storage segment, driven by lower lithium market prices. Net cash inflows from working capital changes in 2025 were primarily driven by lower accounts receivable from lower lithium prices. The lower lithium pricing drove a material increase in working capital changes in 2024 driving lower inventory, accounts receivable and payable balances. Overall, our cash and cash equivalents increased by $739.5 million to $1.9 billion at September 30, 2025 from $1.2 billion at December 31, 2024.
Capital expenditures for the nine-month period ended September 30, 2025 of $434.4 million were primarily associated with plant, machinery and equipment. We expect our capital expenditures to be approximately $600 million in 2025, reflecting the announced new level of spending to unlock cash flow over the near term and generate long-term financial flexibility. The forecasted lower capital expenditures compared to prior years reflect reduced sustaining growth and capital spend, while continuing safety and critical maintenance expenditures.
On October 25, 2025, we signed a definitive agreement to divest the controlling ownership interest of our Refining Solutions business (as defined below) to ChemCat AcquisitionCo, LLC and contribute the remaining ownership interest to ChemCat Holdings, LP, a newly-formed limited partnership (“Holdco”). The Refining Solutions business being divested is defined as our Ketjen reportable segment, excluding its PCS business and our 50% ownership interest in Eurecat S.A. Following the completion of the transactions contemplated in the definitive agreement (collectively, the “Refining Solutions Business Transaction”), we will receive approximately $536 million in cash and will own 49% of the common units of Holdco. We expect the Refining Solutions Business Transaction to be completed in the first half of 2026, subject to customary and regulatory closing conditions.
In a separate transaction, on October 23, 2025, we entered into a definitive agreement to divest our 50% ownership interest in Eurecat S.A. for approximately €105 million (approximately $122 million using September 30, 2025 foreign exchange rates) in cash to Axens SA. We expect this transaction to be completed in the first half of 2026, subject to customary and regulatory closing conditions.
Upon closing of both divestitures, we expect to receive an approximate total of $660 million in cash proceeds. We expect to use these proceeds for debt reduction and other general corporate purposes. As a result of entering into these definitive agreements, we recorded a non-cash goodwill impairment charge in the third quarter of 2025 of $181.1 million, representing the full value of goodwill associated with the Refining Solutions reporting unit as of September 30, 2025.
In June 2025, the Company redeemed the preferred equity of a Grace subsidiary (originally issued as part of the proceeds from the sale of the FCS business in 2021) for an aggregate value of $307.4 million, comprised of $288.0 million in cash received in June 2025 for the redemption and $19.4 million in cash previously received for tax liabilities. Prior to its redemption, the preferred equity had a fair value of $326.0 million, which was reported in Investments in the consolidated balance sheets. Following the redemption, we recorded a loss of $38.0 million within Other income (expenses), net for the three-month and nine-month periods ended September 30, 2025, representing the difference between the cash received and the recorded fair value.
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In the normal course of business, amounts received from customers in advance of the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue, and are recognized within Net sales as the Company satisfies the related performance obligation. During the nine-month period ended September 30, 2025, the Company received $350 million from a customer for the delivery of specified amounts of spodumene and lithium salts over the next 5 years.
Beginning in 2024, we took proactive actions to optimize our cost structure and strengthen our financial flexibility, including certain restructuring activities and reducing planned capital expenditures. As part of these actions, we transitioned to a new operating structure from two core global business units to a fully integrated functional model (excluding Ketjen), stopped construction of Kemerton Train 3 and 4, placed Kemerton Train 2 into care and maintenance, as well as deferred spending and investments in certain other capital projects. Additionally, as part of this restructuring plan, we placed the Chengdu, China conversion plant into care and maintenance during the first half of 2025. Since inception, we have recorded charges for these actions consisting of asset write-offs of $1.0 billion, severance and employee benefits of $72.3 million, contract cancellation costs of $63.6 million and other costs (primarily consisting of the reclassification of the related dedesignated cash flow hedge from Accumulated other comprehensive loss) of $44.1 million.
Net current assets were $2.6 billion and $1.9 billion at September 30, 2025 and December 31, 2024, respectively. The increase is primarily due to an increased cash balance from the receipt of an Energy Storage customer prepayment of $350.0 million and $288.0 million from the redemption of the Grace preferred stock in 2025. Additional changes in the components of net current assets are primarily due to the timing of the sale of goods and other ordinary transactions leading up to the balance sheet dates. The additional changes are not the result of any policy changes by the Company, and do not reflect any change in either the quality of our net current assets or our expectation of success in converting net working capital to cash in the ordinary course of business.
On July 22, 2025, our board of directors declared a cash dividend of $0.405, which was paid on October 1, 2025 to shareholders of record at the close of business as of September 12, 2025.
At September 30, 2025 and December 31, 2024, our cash and cash equivalents included $1.0 billion and $833.7 million, respectively, held by our foreign subsidiaries. The majority of these foreign cash balances are associated with earnings that we have asserted are indefinitely reinvested and which we plan to use to support our continued growth plans outside the U.S. through funding of capital expenditures, acquisitions, research, operating expenses or other similar cash needs of our foreign operations. From time to time, we repatriate cash associated with earnings from our foreign subsidiaries to the U.S. for normal operating needs through intercompany dividends, but only from subsidiaries whose earnings we have not asserted to be indefinitely reinvested or whose earnings qualify as “previously taxed income” as defined by the Internal Revenue Code. During the first nine months of 2024, we repatriated $28.8 million of cash as part of these foreign earnings cash repatriation activities. There were no cash repatriations during the first nine months of 2025.
While we continue to closely monitor our cash generation, working capital management and capital spending in light of continuing uncertainties in the global economy, we believe that we will continue to have the financial flexibility and capability to opportunistically fund future growth initiatives. Additionally, we anticipate that future capital spending, including business acquisitions and other cash outlays, should be financed primarily with cash flow provided by operations, cash on hand and additional issuances of debt or equity securities, as needed.
Long-Term Debt
We currently have the following notes outstanding:
| Issue Month/Year | Principal (in millions) | Interest Rate | Interest Payment Dates | Maturity Date | |||||||||||||||||||||||||
| November 2019 | €377.1 | 1.125% | November 25 | November 25, 2025 | |||||||||||||||||||||||||
May 2022(a) | $650.0 | 4.65% | June 1 and December 1 | June 1, 2027 | |||||||||||||||||||||||||
| November 2019 | €500.0 | 1.625% | November 25 | November 25, 2028 | |||||||||||||||||||||||||
November 2019(a) | $171.6 | 3.45% | May 15 and November 15 | November 15, 2029 | |||||||||||||||||||||||||
May 2022(a) | $600.0 | 5.05% | June 1 and December 1 | June 1, 2032 | |||||||||||||||||||||||||
November 2014(a) | $350.0 | 5.45% | June 1 and December 1 | December 1, 2044 | |||||||||||||||||||||||||
May 2022(a) | $450.0 | 5.65% | June 1 and December 1 | June 1, 2052 | |||||||||||||||||||||||||
(a) Denotes senior notes.
Our senior notes are senior unsecured obligations and rank equally with all our other senior unsecured indebtedness from time to time outstanding. The notes are effectively subordinated to all of our existing or future secured indebtedness and to the
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existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each series of notes outstanding has terms that allow us to redeem the notes before maturity, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of these notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest thereon (exclusive of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis using the comparable government rate (as defined in the indentures governing these notes) plus between 25 and 40 basis points, depending on the series of notes, plus, in each case, accrued interest thereon to the date of redemption. Holders may require us to purchase such notes at 101% upon a change of control triggering event, as defined in the indentures. These notes are subject to typical events of default, including bankruptcy and insolvency events, nonpayment and the acceleration of certain subsidiary indebtedness of $40 million or more caused by a nonpayment default.
Our Euro notes issued in 2019 are unsecured and unsubordinated obligations and rank equally in right of payment to all our other unsecured senior obligations. The Euro notes are effectively subordinated to all of our existing or future secured indebtedness and to the existing and future indebtedness of our subsidiaries. As is customary for such long-term debt instruments, each series of notes outstanding has terms that allow us to redeem the notes before their maturity, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the notes to be redeemed and (ii) the sum of the present values of the remaining scheduled payments of principal thereof and interest thereon (exclusive of interest accrued to, but excluding, the date of redemption) discounted to the redemption date on an annual basis using the bond rate (as defined in the indentures governing these notes) plus between 25 and 35 basis points, depending on the series of notes, plus, in each case, accrued and unpaid interest on the principal amount being redeemed to, but excluding, the date of redemption. Holders may require us to purchase such notes at 101% upon a change of control triggering event, as defined in the indentures. These notes are subject to typical events of default, including bankruptcy and insolvency events, nonpayment and the acceleration of certain subsidiary indebtedness exceeding $100 million caused by a nonpayment default.
Given economic conditions, specifically around the market pricing of lithium, and the related impact on the Company’s earnings, on October 31, 2024, we further amended the 2022 Credit Agreement, which provides for borrowings of up to $1.5 billion and matures on October 28, 2027. Borrowings under the 2022 Credit Agreement bear interest at variable rates based on a benchmark rate depending on the currency in which the loans are denominated, plus an applicable margin which ranges from 0.910% to 1.375%, depending on the Company’s credit rating from Standard & Poor’s Ratings Services LLC, Moody’s Investors Services, Inc. and Fitch Ratings, Inc. With respect to loans denominated in U.S. dollars, interest is calculated using the term Secured Overnight Financing Rate (“SOFR”) plus a term SOFR adjustment of 0.10%, plus the applicable margin. The applicable margin on the facility was 1.20% as of September 30, 2025. As of September 30, 2025 there were no borrowings outstanding under the 2022 Credit Agreement.
Borrowings under the 2022 Credit Agreement are conditioned upon satisfaction of certain customary conditions precedent, including the absence of defaults. The October 2024 amendment was entered into to modify the financial covenants under the 2022 Credit Agreement to avoid a potential covenant violation over the following 18 months given the market pricing of lithium. The amended 2022 Credit Agreement subjects the Company to two financial covenants, as well as customary affirmative and negative covenants. The amended first financial covenant requires that the ratio of (a) (i) the Company’s consolidated net funded debt plus a proportionate amount of Windfield’s net funded debt less (ii) the Company’s unrestricted cash and cash equivalents plus a proportionate amount of Windfield’s unrestricted cash and cash equivalents (up to a specified amount) to (b) consolidated Windfield-Adjusted EBITDA (as such terms are defined in the 2022 Credit Agreement) be less than or equal to (i) 5.50:1.0 as of the end of the third quarter of 2025, (ii) 5.00:1.0 as of the end of fourth quarter of 2025, (iii) 4.75:1.0 as of the end of each of first and second quarter of 2026, and (iv) 3.50:1.0 as of the end of the third quarter of 2026 and each fiscal quarter thereafter through the third quarter of 2027. The maximum permitted leverage ratios described above are subject to adjustment in accordance with the terms of the 2022 Credit Agreement upon the consummation of an acquisition after June 30, 2026 if the consideration includes cash proceeds from the issuance of funded debt in excess of $500 million.
Beginning in the fourth quarter of 2024, the amended second financial covenant requires that the ratio of the Company’s consolidated EBITDA to consolidated interest charges (as such terms are defined in the 2022 Credit Agreement) be no less than (i) 2.00:1 for the third quarter of 2025, (ii) 2.50:1 for the fourth quarter of 2025, and (iii) 3.00:1.0 for all fiscal quarters thereafter. The 2022 Credit Agreement also contains customary default provisions, including defaults for non-payment, breach of representations and warranties, insolvency, non-performance of covenants and cross-defaults to other material indebtedness. The occurrence of an event of default under the 2022 Credit Agreement could result in all loans and other obligations becoming immediately due and payable and the commitments under the 2022 Credit Agreement being terminated. Following the $2.2 billion issuance of mandatory convertible preferred stock in March 2024 and the amendments to the financial covenants, the Company expects to maintain compliance with the amended financial covenants in the near future. However, a significant downturn in lithium market prices or demand could impact the Company’s ability to maintain compliance with its amended financial covenants and it could require the Company to seek additional amendments to the 2022 Credit Agreement and/or issue debt or equity securities to fund its activities and maintain financial flexibility. If the Company were unable to obtain such
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necessary additional amendments, this could lead to an event of default and its lenders could require the Company to repay its outstanding debt. In that situation, the Company may not be able to raise sufficient debt or equity capital, or divest assets, to refinance or repay the lenders.
On May 29, 2013, we entered into agreements to initiate a commercial paper program on a private placement basis under which we may issue unsecured commercial paper notes (the “Commercial Paper Notes”) from time-to-time. The maximum aggregate face amount of Commercial Paper Notes outstanding at any time is $1.5 billion, with none outstanding as of September 30, 2025.
In the second quarter of 2023, the Company received a loan of $300.0 million to be repaid in five equal annual installments beginning on December 31, 2026. This interest-free loan was discounted using an imputed interest rate of 5.5% and the Company will amortize that discount through Interest and financing expenses over the term of the loan.
When constructing new facilities or making major enhancements to existing facilities, we may have the opportunity to enter into incentive agreements with local government agencies in order to reduce certain state and local tax expenditures. Under these agreements, we transfer the related assets to various local government entities and receive bonds. We immediately lease the facilities from the local government entities and have an option to repurchase the facilities for a nominal amount upon tendering the bonds to the local government entities at various predetermined dates. The bonds and the associated obligations for the leases of the facilities offset, and the underlying assets are recorded in property, plant and equipment. We currently have the ability to transfer up to $540 million in assets under these arrangements. At September 30, 2025 and December 31, 2024 there were $159.4 million and $74.5 million, respectively, of bonds outstanding under these arrangements.
The non-current portion of our long-term debt amounted to $3.2 billion at September 30, 2025, compared to $3.1 billion at December 31, 2024. In addition, at September 30, 2025, we had the ability to borrow $1.5 billion under our commercial paper program and the 2022 Credit Agreement, and $106.5 million under other existing credit lines, subject to various financial covenants under the 2022 Credit Agreement. We have the ability and intent to refinance our borrowings under our other existing credit lines with borrowings under the 2022 Credit Agreement, as applicable. Therefore, the amounts outstanding under those credit lines, if any, are classified as long-term debt. We believe that at September 30, 2025 we were, and currently are, in compliance with all of our debt covenants.
Off-Balance Sheet Arrangements
In the ordinary course of business with customers, vendors and others, we have entered into off-balance sheet arrangements, including bank guarantees and letters of credit, which totaled approximately $91.9 million at September 30, 2025. None of these off-balance sheet arrangements has, or is likely to have, a material effect on our current or future financial condition, results of operations, liquidity or capital resources.
Other Obligations
Our contractual obligations have not significantly changed, based on our ordinary business activities and projected capital expenditures noted above, from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2024.
Total expected 2025 contributions to our domestic and foreign qualified and nonqualified pension plans, including the Albemarle Corporation Supplemental Executive Retirement Plan, are expected to approximate $17 million. We may choose to make additional pension contributions in excess of this amount. We have made contributions of $14.4 million to our domestic and foreign pension plans (both qualified and nonqualified) during the nine-month period ended September 30, 2025.
The liability related to uncertain tax positions, including interest and penalties, recorded in Other noncurrent liabilities totaled $254.7 million at September 30, 2025 and $259.6 million at December 31, 2024. Related assets for corresponding offsetting benefits recorded in Other assets totaled $75.9 million at September 30, 2025 and $74.8 million at December 31, 2024. We cannot estimate the amounts of any cash payments associated with these liabilities for the remainder of 2025 or the next twelve months, and we are unable to estimate the timing of any such cash payments in the future at this time.
We are subject to federal, state, local and foreign requirements regulating the handling, manufacture and use of materials (some of which may be classified as hazardous or toxic by one or more regulatory agencies), the discharge of materials into the environment and the protection of the environment. To our knowledge, we are currently complying, and expect to continue to comply, in all material respects with applicable environmental laws, regulations, statutes and ordinances. Compliance with existing federal, state, local and foreign environmental protection laws is not expected to have a material effect on capital expenditures, earnings or our competitive position, but the costs associated with increased legal or regulatory requirements could have an adverse effect on our operating results.
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Among other environmental requirements, we are subject to the federal Superfund law, and similar state laws, under which we may be designated as a potentially responsible party (“PRP”), and may be liable for a share of the costs associated with cleaning up various hazardous waste sites. Management believes that in cases in which we may have liability as a PRP, our liability for our share of cleanup is de minimis. Further, almost all such sites represent environmental issues that are quite mature and have been investigated, studied and in many cases settled. In de minimis situations, our policy generally is to negotiate a consent decree and to pay any apportioned settlement, enabling us to be effectively relieved of any further liability as a PRP, except for remote contingencies. In other than de minimis PRP matters, our records indicate that unresolved PRP exposures should be immaterial. We accrue and expense our proportionate share of PRP costs. Because management has been actively involved in evaluating environmental matters, we are able to conclude that the outstanding environmental liabilities for unresolved PRP sites should not have a material adverse effect upon our results of operations or financial condition.
Liquidity Outlook
We generally use cash on hand and cash provided by operating activities, divestitures and borrowings to pay our operating expenses, satisfy debt service obligations, fund any capital expenditures, make acquisitions, make pension contributions and pay dividends. For example, as noted above, in the first half of 2026, we expect to close on two divestitures and receive approximately $660 million in cash proceeds to be used for debt reduction and other general corporate purposes. We also could issue additional debt or equity securities to fund these activities in an effort to maintain our financial flexibility. Our main focus in the short-term, during the continued uncertainty surrounding the global economy, including lithium market pricing and recent inflationary trends, is to continue to maintain financial flexibility by continuing our cost savings initiative, committing to shareholder returns and maintaining an investment grade rating. Over the next three years, in terms of uses of cash, we will focus on deleveraging, investing in growth of the businesses and returning value to shareholders. Additionally, we will continue to evaluate the merits of any opportunities that may arise for acquisitions of businesses or assets, which may require additional liquidity. Financing the purchase price of any such acquisitions could involve borrowing under existing or new credit facilities and/or the issuance of debt or equity securities, in addition to cash on hand.
We expect our capital expenditures to be approximately $600 million in 2025, down from $1.7 billion in 2024. Lower capital expenditures in 2025 reflects the announced new level of spending to unlock cash flow over the near term and generate long-term financial flexibility and is driven by reduced sustaining growth and capital spend, while continuing safety and critical maintenance expenditures.
The Company’s actions regarding Kemerton are part of a broader effort focused on preserving its world-class resource advantages, optimizing its global conversion network, improving the Company’s cost competitiveness and efficiency, reducing capital intensity and enhancing the Company’s financial flexibility. We have achieved our $400 million per year cost and productivity improvement target resulting from the comprehensive review of our cost and operating structure.
In the normal course of business, amounts received from customers in advance of the Company’s satisfaction of its contractual performance obligations are recorded as deferred revenue, and are recognized within Net sales as the Company satisfies the related performance obligation. In January 2025, the Company received $350 million from a customer for the delivery of specified amounts of spodumene and lithium salts over the next 5 years.
We are party to a master receivables purchase agreement, under which we may sell up to approximately $94 million of available and eligible outstanding customer accounts receivable generated by sales to certain customers. The agreement is uncommitted and can be terminated by us or the purchaser with certain notice as defined in the contract. Transactions under this agreement are accounted for as sales of accounts receivable, and the receivables sold are removed from the consolidated balance sheets at the time of the sales transaction. During the three-month and nine-month periods ended September 30, 2025, the Company sold and removed approximately $45.8 million and $106.6 million, respectively, of accounts receivable under this master receivables purchase agreement. The Company incurred approximately $0.2 million and $0.3 million, respectively, of fees associated with the master receivables purchase agreement during the three-month and nine-month periods ended September 30, 2025. Costs associated with the sales of receivables are reflected in the consolidated statements of loss for the periods in which the sales occur.
In 2022, we announced we had been awarded a nearly $150 million grant from the U.S. Department of Energy to expand domestic manufacturing of batteries for EVs and the electrical grid and for materials and components currently imported from other countries. The grant funding is intended to support a portion of the anticipated cost to construct a new, commercial-scale U.S.-based lithium concentrator facility at our Kings Mountain, North Carolina, location. We expect the concentrator facility to create hundreds of construction and full-time jobs and to produce approximately 420,000 tons of spodumene concentrate annually. To further support the restart of the Kings Mountain mine, in 2023, we announced a $90 million critical materials award from the U.S. Department of Defense. Since inception, the Company has received $24.3 million of these funds.
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Our cash flows from operations may be negatively affected by adverse consequences to our customers and the markets in which we compete as a result of moderating global economic conditions, continuing inflationary trends and reduced capital availability. We have experienced, and may continue to experience, volatility and increases in the price of certain raw materials and in transportation and energy costs as a result of global market and supply chain disruptions and the broader inflationary environment. As a result, we are planning for various economic scenarios and actively monitoring our balance sheet to maintain the financial flexibility needed.
Although we maintain business relationships with a diverse group of financial institutions as sources of financing, an adverse change in their credit standing could lead them to not honor their contractual credit commitments to us, decline funding under our existing but uncommitted lines of credit with them, not renew their extensions of credit or not provide new financing to us. While the global corporate bond and bank loan markets remain strong, periods of elevated uncertainty related to the stability of the banking system, future pandemics or global economic and/or geopolitical concerns may limit efficient access to such markets for extended periods of time. If such concerns heighten, we may incur increased borrowing costs and reduced credit capacity as our various credit facilities mature. If the U.S. Federal Reserve or similar national reserve banks in other countries decide to continue tightening the monetary supply, we may incur increased borrowing costs (as interest rates increase on our variable rate credit facilities, as our various credit facilities mature or as we refinance any maturing fixed rate debt obligations), although these cost increases would be partially offset by increased income rates on portions of our cash deposits.
Overall, with generally strong cash-generative businesses we believe we have, and will be able to maintain, a solid liquidity position. We expect that cash on hand will be sufficient to repay our €377.1 principal amount of 1.125% senior notes due November 2025. We have no additional significant long-term debt maturities before 2027.
We had cash and cash equivalents totaling $1.9 billion at September 30, 2025, of which $1.0 billion is held by our foreign subsidiaries. This cash represents an important source of our liquidity and is invested in bank accounts or money market investments with no limitations on access. The cash held by our foreign subsidiaries is intended for use outside of the U.S. We anticipate that any needs for liquidity within the U.S. in excess of our cash held in the U.S. can be readily satisfied with borrowings under our existing U.S. credit facilities or our commercial paper program.
Guarantor Financial Information
Albemarle Wodgina Pty Ltd Issued Notes
Albemarle Wodgina Pty Ltd (the “Issuer”), a wholly-owned subsidiary of Albemarle Corporation, issued $300.0 million aggregate principal amount of 3.45% Senior Notes due 2029 (the “3.45% Senior Notes”) in November 2019. The 3.45% Senior Notes are fully and unconditionally guaranteed (the “Guarantee”) on a senior unsecured basis by Albemarle Corporation (the “Parent Guarantor”). No direct or indirect subsidiaries of the Parent Guarantor guarantee the 3.45% Senior Notes (such subsidiaries are referred to as the “Non-Guarantors”).
In 2019, we completed the acquisition of a 60% interest in Wodgina in Western Australia and formed an unincorporated joint venture with MRL, named MARBL Lithium Joint Venture, for the exploration, development, mining, processing and production of lithium and other minerals (other than iron ore and tantalum) from the Wodgina spodumene mine and for the operation of the Kemerton assets in Western Australia. We participate in Wodgina through our ownership interest in the Issuer. On October 18, 2023 we amended the joint venture agreements, resulting in a decrease of our ownership interest in the MARBL joint venture and Wodgina to 50%.
Prior to January 1, 2024, the Parent Guarantor conducted its U.S. Specialties and Ketjen operations directly, and conducted its other operations (other than operations conducted through the Issuer) through the Non-Guarantors. Effective January 1, 2024, the Company split its U.S. Ketjen operations to a separate non-guarantor subsidiary and its results are no longer included within the summarized Parent Guarantor and Issuer financial information below for the 2024 periods presented.
The 3.45% Senior Notes are the Issuer’s senior unsecured obligations and rank equally in right of payment to the senior indebtedness of the Issuer, effectively subordinated to all of the secured indebtedness of the Issuer, to the extent of the value of the assets securing that indebtedness, and structurally subordinated to all indebtedness and other liabilities of its subsidiaries. The Guarantee is the senior unsecured obligation of the Parent Guarantor and ranks equally in right of payment to the senior indebtedness of the Parent Guarantor, effectively subordinated to the secured debt of the Parent Guarantor to the extent of the value of the assets securing the indebtedness and structurally subordinated to all indebtedness and other liabilities of its subsidiaries.
For cash management purposes, the Parent Guarantor transfers cash among itself, the Issuer and the Non-Guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Issuer and/or the Parent Guarantor’s outstanding debt, common stock dividends and
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common stock repurchases. There are no significant restrictions on the ability of the Issuer or the Parent Guarantor to obtain funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Parent Guarantor and the Issuer on a combined basis after elimination of (i) intercompany transactions and balances among the Issuer and the Parent Guarantor and (ii) equity in earnings from and investments in any subsidiary that is a Non-Guarantor. Each entity in the combined financial information follows the same accounting policies as described herein and in our Annual Report on Form 10-K for the year ended December 31, 2024.
Summarized Statement of Operations
| $ in thousands | Nine Months Ended September 30, 2025 | Year Ended December 31, 2024 | |||||||||
Net sales(a) | $ | 550,756 | $ | 861,876 | |||||||
| Gross profit (loss) | 173,512 | (66,144) | |||||||||
Loss before income taxes and equity in net income of unconsolidated investments(b) | (227,217) | (593,433) | |||||||||
| Net loss attributable to the Parent Guarantor and the Issuer | (239,870) | (442,751) | |||||||||
(a) Includes net sales to Non-Guarantors of $313.5 million and $460.6 million for the nine months ended September 30, 2025 and year ended December 31, 2024, respectively.
(b) Includes intergroup expenses to Non-Guarantors of $10.8 million and $46.6 million for the nine months ended September 30, 2025 and year ended December 31, 2024, respectively.
Summarized Balance Sheet
| $ in thousands | September 30, 2025 | December 31, 2024 | |||||||||
Current assets(a) | $ | 1,456,463 | $ | 921,221 | |||||||
| Net property, plant and equipment | 1,931,530 | 2,005,613 | |||||||||
Other noncurrent assets(b) | 2,471,232 | 2,912,866 | |||||||||
Current liabilities(c) | $ | 2,887,961 | $ | 2,190,646 | |||||||
| Long-term debt | 2,254,238 | 2,253,328 | |||||||||
Other noncurrent liabilities(d) | 7,178,747 | 7,157,705 | |||||||||
(a) Includes receivables from Non-Guarantors of $429.9 million and $411.2 million at September 30, 2025 and December 31, 2024, respectively.
(b) Includes noncurrent receivables from Non-Guarantors of $2.1 billion and $2.3 billion at September 30, 2025 and December 31, 2024, respectively.
(c) Includes current payables to Non-Guarantors of $2.5 billion and $1.9 billion at September 30, 2025 and December 31, 2024, respectively.
(d) Includes noncurrent payables to Non-Guarantors of $6.8 billion and $6.8 billion at September 30, 2025 and December 31, 2024, respectively.
The 3.45% Senior Notes are structurally subordinated to the indebtedness and other liabilities of the Non-Guarantors. The Non-Guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to the 3.45% Senior Notes or the Indenture under which the 3.45% Senior Notes were issued, or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that the Parent Guarantor has to receive any assets of any of the Non-Guarantors upon the liquidation or reorganization of any Non-Guarantor, and the consequent rights of holders of the 3.45% Senior Notes to realize proceeds from the sale of any of a Non-Guarantor’s assets, would be effectively subordinated to the claims of such Non-Guarantor’s creditors, including trade creditors and holders of preferred equity interests, if any, of such Non-Guarantor. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of the Non-Guarantors, the Non-Guarantors will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute any of their assets to the Parent Guarantor.
The 3.45% Senior Notes are obligations of the Issuer. The Issuer’s cash flow and ability to make payments on the 3.45% Senior Notes could be dependent upon the earnings it derives from the production from MARBL for Wodgina. Absent income received from sales of its share of production from MARBL, the Issuer’s ability to service the 3.45% Senior Notes could be
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dependent upon the earnings of the Parent Guarantor’s subsidiaries and other joint ventures and the payment of those earnings to the Issuer in the form of equity, loans or advances and through repayment of loans or advances from the Issuer.
The Issuer’s obligations in respect of MARBL are guaranteed by the Parent Guarantor. Further, under MARBL pursuant to a deed of cross security between the Issuer, the joint venture partner and the manager of the project (the “Manager”), each of the Issuer, and the joint venture partner have granted security to each other and the Manager for the obligations each of the Issuer and the joint venture partner have to each other and to the Manager. The claims of the joint venture partner, the Manager and other secured creditors of the Issuer will have priority as to the assets of the Issuer over the claims of holders of the 3.45% Senior Notes.
Albemarle Corporation Issued Notes
In March 2021, Albemarle New Holding GmbH (the “Subsidiary Guarantor”), a wholly-owned subsidiary of Albemarle Corporation, added a full and unconditional guarantee (the “Upstream Guarantee”) to all securities of Albemarle Corporation (the “Parent Issuer”) issued and outstanding as of such date and, subject to the terms of the applicable amendment or supplement, securities issuable by the Parent Issuer pursuant to the Indenture, dated as of January 20, 2005, as amended and supplemented from time to time (the “Indenture”). No other direct or indirect subsidiaries of the Parent Issuer guarantee these securities (such subsidiaries are referred to as the “Upstream Non-Guarantors”). See Long-term debt section above for a description of the securities issued by the Parent Issuer.
The current securities outstanding under the Indenture are the Parent Issuer’s unsecured and unsubordinated obligations and rank equally in right of payment with all other unsecured and unsubordinated indebtedness of the Parent Issuer. All securities currently outstanding under the Indenture are effectively subordinated to the Parent Issuer’s existing and future secured indebtedness to the extent of the value of the assets securing that indebtedness. With respect to any series of securities issued under the Indenture that is subject to the Upstream Guarantee (which series of securities does not include the series of notes issued by the Company on May 13, 2022 in the aggregate principal amounts of $650.0 million, $600.0 million and $450.0 million (collectively, the “2022 Notes”)), the Upstream Guarantee is, and will be, an unsecured and unsubordinated obligation of the Subsidiary Guarantor, ranking pari passu with all other existing and future unsubordinated and unsecured indebtedness of the Subsidiary Guarantor. All securities currently outstanding under the Indenture (other than the 2022 Notes) are effectively subordinated to all existing and future indebtedness and other liabilities of the Parent’s Subsidiaries other than the Subsidiary Guarantor. The 2022 Notes are effectively subordinated to all existing and future indebtedness and other liabilities of the Parent’s Subsidiaries, including the Subsidiary Guarantor.
For cash management purposes, the Parent Issuer transfers cash among itself, the Subsidiary Guarantor and the Upstream Non-Guarantors through intercompany financing arrangements, contributions or declaration of dividends between the respective parent and its subsidiaries. The transfer of cash under these activities facilitates the ability of the recipient to make specified third-party payments for principal and interest on the Parent Issuer and/or the Subsidiary Guarantor’s outstanding debt, common stock dividends and common stock repurchases. There are no significant restrictions on the ability of the Parent Issuer or the Subsidiary Guarantor to obtain funds from subsidiaries by dividend or loan.
The following tables present summarized financial information for the Subsidiary Guarantor and the Parent Issuer on a combined basis after elimination of (i) intercompany transactions and balances among the Parent Issuer and the Subsidiary Guarantor and (ii) equity in earnings from and investments in any subsidiary that is an Upstream Non-Guarantor. Each entity in the combined financial information follows the same accounting policies as described herein and in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
Summarized Statement of Operations
| $ in thousands | Nine Months Ended September 30, 2025 | Year Ended December 31, 2024 | |||||||||
Net sales(a) | $ | 398,339 | $ | 639,866 | |||||||
| Gross profit (loss) | 226,234 | (12,059) | |||||||||
Loss before income taxes and equity in net income of unconsolidated investments(b) | (107,390) | (400,246) | |||||||||
| Income (loss) attributable to the Subsidiary Guarantor and the Parent Issuer | (130,915) | (353,248) | |||||||||
(a) Includes net sales to Non-Guarantors of $161.0 million and $238.6 million for the nine months ended September 30, 2025 and year ended December 31, 2024, respectively.
(b) Includes intergroup income to Non-Guarantors of $10.4 million and $148.3 million for the nine months ended September 30, 2025 and year ended December 31, 2024, respectively.
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Summarized Balance Sheet
| $ in thousands | September 30, 2025 | December 31, 2024 | |||||||||
Current assets(a) | $ | 1,671,776 | $ | 1,104,082 | |||||||
| Net property, plant and equipment | 780,406 | 800,913 | |||||||||
Other non-current assets(b) | 1,608,816 | 2,188,306 | |||||||||
Current liabilities(c) | $ | 3,278,758 | $ | 2,559,256 | |||||||
| Long-term debt | 2,615,500 | 2,551,714 | |||||||||
Other noncurrent liabilities(d) | 6,138,903 | 6,303,456 | |||||||||
(a) Includes receivables from Non-Guarantors of $687.7 million and $646.3 million at September 30, 2025 and December 31, 2024, respectively.
(b) Includes noncurrent receivables from Non-Guarantors of $1.2 billion and $1.6 billion at September 30, 2025 and December 31, 2024, respectively.
(c) Includes current payables to Non-Guarantors of $2.5 billion and $1.9 billion at September 30, 2025 and December 31, 2024, respectively.
(d) Includes noncurrent payables to Non-Guarantors of $5.8 billion and $6.0 billion at September 30, 2025 and December 31, 2024, respectively.
These securities are structurally subordinated to the indebtedness and other liabilities of the Upstream Non-Guarantors. The Upstream Non-Guarantors are separate and distinct legal entities and have no obligation, contingent or otherwise, to pay any amounts due pursuant to these securities or the Indenture under which these securities were issued, or to make any funds available therefor, whether by dividends, loans, distributions or other payments. Any right that the Subsidiary Guarantor has to receive any assets of any of the Upstream Non-Guarantors upon the liquidation or reorganization of any Upstream Non-Guarantors, and the consequent rights of holders of these securities to realize proceeds from the sale of any of an Upstream Non-Guarantor’s assets, would be effectively subordinated to the claims of such Upstream Non-Guarantor’s creditors, including trade creditors and holders of preferred equity interests, if any, of such Upstream Non-Guarantor. Accordingly, in the event of a bankruptcy, liquidation or reorganization of any of the Upstream Non-Guarantors, the Upstream Non-Guarantors will pay the holders of their debts, holders of preferred equity interests, if any, and their trade creditors before they will be able to distribute any of their assets to the Subsidiary Guarantor.
Summary of Critical Accounting Policies and Estimates
There have been no significant changes in our critical accounting policies and estimates from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2024.
Recent Accounting Pronouncements
For a description of recent accounting pronouncements, see Item 1 Financial Statements – Note 19, “Recently Issued Accounting Pronouncements” to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | ||||
There have been no significant changes in our interest rate risk, foreign currency exchange rate exposure, marketable securities price risk or raw material price risk from the information we provided in our Annual Report on Form 10-K for the year ended December 31, 2024, except as noted below.
We had variable interest rate borrowings of $18.7 million outstanding at September 30, 2025, bearing a weighted average interest rate of 1.37% and representing 1% of our total outstanding debt. A hypothetical 100 basis point increase in the interest rate applicable to these borrowings would change our annualized interest expense by $0.2 million as of September 30, 2025. We may enter into interest rate swaps, collars or similar instruments with the objective of reducing interest rate volatility relating to our borrowing costs.
Our financial instruments, which are subject to foreign currency exchange risk, primarily consist of foreign currency forward contracts with an aggregate notional value of $3.9 billion and with a fair value representing a net liability position of $6.6 million at September 30, 2025. Fluctuations in the value of these contracts are generally offset by the value of the
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underlying exposures being hedged. We conducted a sensitivity analysis on the fair value of our foreign currency hedge portfolio assuming an instantaneous 10% change in select foreign currency exchange rates from their levels as of September 30, 2025, with all other variables held constant. A 10% appreciation of the U.S. Dollar against foreign currencies that we hedge would result in an increase of approximately $5.1 million in the fair value of our foreign currency forward contracts. A 10% depreciation of the U.S. Dollar against these foreign currencies would result in a decrease of approximately $5.2 million in the fair value of our foreign currency forward contracts. The sensitivity of the fair value of our foreign currency hedge portfolio represents changes in fair values estimated based on market conditions as of September 30, 2025, without reflecting the effects of underlying anticipated transactions. When those anticipated transactions are realized, actual effects of changing foreign currency exchange rates could have a material impact on our earnings and cash flows in future periods.
| Item 4. | Controls and Procedures. | ||||
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this report. Based on this evaluation, our principal executive officer and principal financial officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
No change in our internal control over financial reporting (as such term is defined in Exchange Act Rule 13a-15(f)) occurred during the third quarter ended September 30, 2025 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
| Item 1. | Legal Proceedings. | ||||
We are involved from time to time in legal proceedings of types regarded as common in our business, including administrative or judicial proceedings seeking remediation under environmental laws, such as Superfund, products liability, breach of contract liability and premises liability litigation. Where appropriate, we may establish financial reserves for such proceedings. We also maintain insurance to mitigate certain of such risks. Additional information with respect to this Item 1 is contained in Note 7 to the Notes to the Condensed Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
| Item 1A. | Risk Factors. | ||||
While we attempt to identify, manage and mitigate risks and uncertainties associated with our business to the extent practical under the circumstances, some level of risk and uncertainty will always be present. The risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024 describe some of the risks and uncertainties associated with our business. These risks and uncertainties have the potential to materially affect our results of operations and our financial condition. We do not believe that there have been any material changes to the risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2024.
| Item 5. | Other Information. | ||||
| Item 6. | Exhibits. | ||||
(a) Exhibits
| *#10.1 | ||||||||
| *#10.2 | ||||||||
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| *#10.3 | ||||||||
| *#10.4 | ||||||||
| *#10.5 | ||||||||
| *31.1 | ||||||||
| *31.2 | ||||||||
| *32.1 | ||||||||
| *32.2 | ||||||||
| *101 | Interactive Data File (Quarterly Report on Form 10-Q, for the quarterly period ended September 30, 2025, furnished in XBRL (eXtensible Business Reporting Language)). | |||||||
| *104 | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). | |||||||
| # | Management contract or compensatory plan or arrangement. | ||||
| * | Included with this filing. | ||||
Attached as Exhibit 101 to this report are the following documents formatted in XBRL: (i) the Consolidated Statements of Loss for the three and nine months ended September 30, 2025 and 2024, (ii) the Consolidated Statements of Comprehensive (Loss) Income for the three and nine months ended September 30, 2025 and 2024, (iii) the Consolidated Balance Sheets at September 30, 2025 and December 31, 2024, (iv) the Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2025 and 2024, (v) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 and (vi) the Notes to the Condensed Consolidated Financial Statements.
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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 thereunto duly authorized.
| ALBEMARLE CORPORATION | |||||||||||||||||
| (Registrant) | |||||||||||||||||
| Date: | November 5, 2025 | By: | /s/ NEAL R. SHEOREY | ||||||||||||||
| Neal R. Sheorey | |||||||||||||||||
| Executive Vice President and Chief Financial Officer | |||||||||||||||||
| (principal financial officer) | |||||||||||||||||
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Exhibit 10.1
ALBEMARLE CORPORATION EXECUTIVE SEVERANCE PLAN
(as amended October 27, 2025)
Albemarle Corporation, a Virginia corporation (together with its successors and assigns, the “Corporation”), has adopted this Executive Severance Plan (this “Plan”) as of July 22, 2025, and has amended this Plan as of October 27, 2025 (the “Effective Date”). Capitalized terms used but not defined in this Plan are defined in Paragraph 27 of this Plan.
1.Eligibility. An individual will become a participant (“Participant”) in this Plan when such individual is (a) designated as a participant in this Plan by the Corporation and (b) such individual executes a Participation Agreement in such form as provided by the Corporation (the “Participation Agreement”).
2.Compensation Upon Termination Prior to a Change in Control. Prior to a Change in Control, the Participant shall be entitled to the following benefits:
a.Termination Benefits. If the Participant’s employment by the Corporation shall be terminated prior to the Change in Control by the Corporation other than a Termination for Cause, then the Participant shall be entitled to the benefits provided below, without regard to any contrary provision of any plan:
(i)Accrued Salary. The Corporation shall pay the Participant, not later than the fifth (5th) day following the Date of Termination, the Participant’s full base salary and vacation pay accrued through the Date of Termination at the rate in effect at the time the Notice of Termination is given.
(ii)Outplacement Counseling. The Corporation shall make available to the Participant, at the Corporation’s expense, outplacement counseling. The Participant may select the organization that will provide the outplacement counseling, provided that the Corporation must approve the expense in advance (which approval will not be withheld if such expense is reasonable as determined by the Corporation in its discretion). This counseling must be used, if at all, no later than the one-year anniversary of the Participant’s Date of Termination.
(iii)Financial Counseling. Following the Participant’s Date of Termination, the Corporation shall make available to the Participant, for the remaining unexpired portion of the year in which the Participant’s Date of Termination falls, financial counseling services which may include tax counseling services. The Participant may select the organization that will provide the Participant with the financial and tax counseling services, provided that the Corporation’s obligation to provide the Participant benefits under this subsection
shall be limited to $14,000 (taking into account financial counseling expenses paid by the Corporation for the Participant during such year prior to such Date of Termination).
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(iv)Severance Payment. The Corporation shall pay as severance pay to the Participant, not later than the thirtieth (30th) day following the Date of Termination, a lump sum severance payment equal to 1.5 (one and one-half) times the following:
(A)the Participant’s annual base compensation which was payable to the Participant by the Corporation immediately prior to the Date of Termination, whether or not such annual base compensation was includible in the Participant’s gross income for federal income tax purposes; plus
(B)the Participant’s target annual variable compensation that was in place immediately prior to the Date of Termination (whether or not such award was includible in the Participant’s gross income for federal income tax purposes).
(v)Insurance Coverage. If the Participant elects to receive COBRA benefits, the Corporation shall provide the Participant (and the Participant’s enrolled dependents, as applicable) with such benefits matching those in which the Participant was enrolled during employment, at the same cost incurred during employment, for a period of eighteen (18) months following the Participant’s loss of medical, dental, and vision coverage through the Company.
(vi)The severance benefits under this Paragraph 2 are in lieu of any severance benefits that might be payable under the Corporation’s Severance Pay Plan or any other severance program or policy of the Corporation (other than any severance benefits provided for in this Plan). The severance benefits under this Paragraph 2 do not apply to a termination of employment due to death or a termination of employment by the Corporation due to the Participant’s Total Disability.
3.Compensation Upon Termination on or Following a Change in Control. On or following a Change in Control, the Participant shall be entitled to the following benefits:
a.Termination Benefits. If the Participant’s employment by the Corporation shall be terminated on or subsequent to the Change in Control, and under circumstances that would qualify as a “separation from service” under Section 409A, (a) by reason of the Participant’s death or Total Disability after the Participant has received a Notice of Termination that the Corporation has determined to terminate the Participant’s employment with the Corporation other than a Termination for Cause, (b) by the Corporation other than a Termination for Cause, or (c) by the Participant for Change in Control Good Reason for Resignation, then the Participant shall be entitled to the benefits provided below, without regard to any contrary provision of any plan:
(i)Accrued Salary. The Corporation shall pay the Participant, not later than the fifth (5th) day following the Date of Termination, the Participant’s full base salary and vacation pay accrued through the Date of Termination at the rate
2
in effect at the time the Notice of Termination is given (or at the rate in effect immediately prior to a Change in Control, if such amounts were higher).
(ii)Accrued Incentive Compensation. The Corporation shall pay the Participant, not later than five (5) days following the Participant’s Date of Termination, the amount of the Participant’s accrued Incentive Compensation which consists of the annual cash bonus. If the Date of Termination is after the end of a Variable Compensation Year, but before such Incentive Compensation for said Variable Compensation Year has been paid, the Corporation shall pay the Participant Incentive Compensation for that Variable Compensation Year based upon the calculated company score and the Participant’s individual performance modifier. If an individual performance modifier has not been determined as of the Date of Termination, it will be set at one hundred percent (100%).
In addition, if the Date of Termination is other than the first day of a Variable Compensation Year, the Corporation shall pay the Participant Incentive Compensation for the Variable Compensation Year in which the Date of Termination occurs, equal to the target variable compensation for the year in which the Change in Control occurs, multiplied by a fraction, the numerator of which is the total number of days which have elapsed in the current Variable Compensation Year to the Date of Termination, and the denominator of which is three hundred sixty-five (365). Payments under this clause (ii) shall be made to the Participant not later than five (5) days after the Date of Termination.
If there is more than one Incentive Compensation Program, the Participant’s accrued Incentive Compensation shall be calculated separately for each Program.
For the purpose of this Paragraph 3.a.(ii), “Incentive Compensation Program” means any of the Incentive Compensation Plans defined in Paragraph 27 and any other plan or program for the payment of incentive compensation, variable compensation, bonus, benefits or awards for which the Participant was, or the Participant’s position was, eligible to participate; “Incentive Compensation” means any compensation, variable compensation, bonus, benefit or award paid or payable under an Incentive Compensation Program; and “Variable Compensation Year” means a calendar or fiscal plan year of an Incentive Compensation Program.
(iii)Insurance Coverage. The Corporation shall arrange to provide the Participant (and the Participant’s dependents, if applicable) with the following:
(A)If the Participant is eligible, the Participant shall participate in the Corporation’s retiree medical benefit plans as if the Participant retired from the Corporation on the Participant’s Date of Termination, except that the Corporation shall provide such medical coverage at no cost to the Participant for twenty four (24) months following the Participant’s Date of Termination and thereafter, the Participant shall participate therein on the same terms as other
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retired employees (to the extent these benefits are provided by a self-insured plan, any reimbursements for claims incurred shall be made as soon as practicable, but in no event can they be made later than the end of the calendar year following the calendar year in which the claim was incurred);
(B)If the Participant is not eligible for the retiree medical plans, the Participant will no longer continue to participate in the Corporation’s medical, dental, or vision plans, as applicable, except for COBRA. If the Participant elects to receive COBRA benefits, the Corporation shall provide the Participant with such benefits at no cost to the Participant for twenty four (24) months following the Participant’s loss of medical, dental, and vision coverage, as applicable.
(iv)Retirement Benefits. The Supplemental Pension Benefit Credits made on the Participant’s behalf under the Albemarle Corporation Executive Deferred Compensation Plan (“EDCP”) as well as all earnings accrued on such amounts, shall be immediately vested and non-forfeitable and shall be paid in accordance with the terms of the EDCP.
(v)Outplacement Counseling. The Corporation shall make available to the Participant, at the Corporation’s expense, outplacement counseling. The Participant may select the organization that will provide the outplacement counseling, however, the Corporation’s obligation to provide the Participant benefits under this subsection (v) shall be limited to $25,000. This counseling must be used, if at all, no later than the end of the second calendar year after the year of the Participant’s Date of Termination.
(vi)Financial Counseling. Following the Participant’s Date of Termination, the Corporation shall make available to the Participant, two years (plus the remaining unexpired portion of the year in which the Participant’s Date of Termination falls) of financial counseling services which may include tax counseling services. The Participant may select the organization that will provide the Participant with the financial and tax counseling services, however, the Corporation’s obligation to provide the Participant benefits under this subsection
(vi) shall be limited to $25,000. To be eligible for reimbursement, the financial counseling must begin in the calendar year of the Participant’s Date of Termination, unless such Date of Termination is less than 60 days before the end of such calendar year, in which case the financial counseling must begin no later than during the following calendar year.
(vii)Severance Payment. The Corporation shall pay as severance pay to the Participant, not later than the fifth (5th) day following the Date of Termination, a lump sum severance payment (the “Severance Payment”) equal to the Severance Multiple times the following:
(A)the greater of the Participant’s annual base compensation which was payable to the Participant by the Corporation immediately prior to the
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Date of Termination and the Participant’s annual base compensation which was payable to the Participant by the Corporation immediately prior to a Change in Control, whether or not such annual base compensation was includible in the Participant’s gross income for federal income tax purposes; plus
(B)the greater of the Participant’s target annual variable compensation that was in place immediately prior to a Change in Control, or the Participant’s target annual variable compensation that was in place immediately prior to the Date of Termination (whether or not such award was includible in the Participant’s gross income for federal income tax purposes).
The Severance Payment shall be reduced by the amount paid to the Participant under Paragraph 13(d) below.
(viii)Reduction of Payments. If the payments or benefits to which the Participant will be entitled under this Paragraph 3 (referred to in this Paragraph as the “Payments”) would cause the Participant to be liable for the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 (“Excise Tax”), then the Payments shall be reduced (or repaid to the Corporation, if previously paid or provided) as provided below. In no event shall the Participant be entitled to receive any kind of gross-up payment or Excise Tax reimbursement from the Corporation. For purposes of this Paragraph (viii), the terms “excess parachute payment” and “parachute payment” will have the meanings assigned to them by Section 280G of the Code.
If the Participant’s Payments exceed 2.99 times the Participant’s “Base Amount” (as defined in Code Section 280G), a “reduced payment amount” shall be calculated by reducing the Payments to the minimum extent necessary so that no portion of any Payment, as so reduced or repaid, constitutes an “excess parachute payment.” If it is determined that any Excise Tax is payable by the Participant, the Participant shall receive either (i) all Payments otherwise due to the Participant or (ii) the reduced payment amount described in the preceding sentence, whichever will provide the Participant with the greater after-tax economic benefit taking into account for these purposes any applicable Excise Tax.
Whether Payments to the Participant are to be reduced, pursuant to this Paragraph, and the extent to which they are to be so reduced, will be determined by the Corporation in good faith and the Corporation will notify the Participant in writing of its determination. Any such notice shall describe in reasonable detail the basis of the Corporation’s determination. If the Participant accepts the Corporation’s determination, the Participant shall so advise the Corporation of the Participant’s determination within thirty (30) days of receipt of notice from the Corporation. If the Participant object to such determination within thirty (30) days of receipt of notice from the Corporation, the Corporation will retain, at its expense, a nationally recognized public accounting firm, employment consulting firm or law firm selected by the Corporation and reasonably acceptable
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to the Participant to review the matter. Such firm shall meet with the Participant and the Participant’s representatives and the Corporation and its representatives and thereafter render its written opinion as to the extent, if any, that in such firm’s reasonable judgment the payments and benefits otherwise due to the Participant hereunder must be reduced hereunder. The decision of such firm concerning the extent of any required reduction in such payments and benefits shall be final and binding on both the Participant and the Corporation.
(ix)Relocation. Following the Participant’s Date of Termination, the Corporation shall provide the Participant with relocation benefits available under the Corporation’s U.S. Domestic Executive Relocation Policy, but only to the extent the Participant (i) had relocated in connection with the Participant’s employment with the Corporation within two (2) years before the Participant’s Date of Termination and (ii) the Participant is moving back to a state where the Participant had relocated from within the two (2) years before the Participant’s Date of Termination. The benefits described in this subparagraph (ix) must be used, if at all, no later than the end of the second year after the year that contains the Participant’s Date of Termination. To the extent any relocation expenses will be reimbursed to the Participant, the reimbursement must be paid to the Participant no later than the end of the third year after the year that contains the Participant’s Date of Termination.
b.Except as set forth in Paragraph 3.a.(a), the severance benefits under this Paragraph 3 do not apply to a termination of employment due to death or termination of employment due to the Participant’s Total Disability.
4.Payments if Termination for Cause or by the Participant Except With Change in Control Good Reason for Resignation. Except as otherwise expressly provided for in this Plan, if the Participant’s employment shall be terminated by the Corporation for a Termination for Cause or by the Participant other than with Change in Control Good Reason for Resignation, the Corporation shall pay the Participant the Participant’s full base salary and accrued vacation pay then in effect through the Date of Termination, at the rate in effect at the time Notice of Termination is given plus any benefits or awards which have been earned or become payable but which have not yet been paid to the Participant. The Participant shall receive any payment due under this Paragraph 4 on the Participant’s Date of Termination. Thereafter the Corporation shall have no further obligation to the Participant under this Plan.
5.Payments While Disabled. During any period prior to the Date of Termination that the Participant is unable to perform the Participant’s full-time duties with the Corporation, whether as a result of the Participant’s Total Disability or as a result of a physical or mental disability that is not total or is not permanent and therefore is not a Total Disability, the Participant shall continue to receive the Participant’s base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits that are payable or provided under the Corporation’s benefit plans, including its disability plans. After the Date of Termination, the Participant’s benefits shall be determined in accordance with the Corporation’s benefits, insurance and other applicable programs. In addition, the Corporation shall pay the Participant, not later than the fifth (5th) day following the Date of Termination, the
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Participant’s full base salary and vacation pay accrued through the Date of Termination at the rate in effect at the time the Notice of Termination is given (or, if the Date of Termination occurs on or following a Change in Control, at the rate in effect immediately prior to a Change in Control, if such amounts were higher). If the Date of Termination occurs on or following a Change in Control, the compensation and benefits, other than salary, payable or provided pursuant to this Paragraph shall be the greater of (x) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect immediately prior to a Change in Control and (y) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect at the time the compensation and benefits are paid. If the Participant’s employment by the Corporation shall be terminated on or subsequent to the Change in Control by the Corporation by reason of the Participant’s Total Disability, and such termination is not covered by Paragraph 3.a.(a), the Participant shall be entitled to receive any prior year annual cash bonus that has not been paid when such bonus is paid to the Corporation’s executives generally, provided that the Participant would have otherwise been eligible to earn such bonus.
6.After Death. If the Participant’s employment shall be terminated by reason of the Participant’s death, the Corporation shall pay the Participant, not later than the fifth (5th) day following the Date of Termination, the Participant’s full base salary and vacation pay accrued through the Date of Termination at the rate in effect at the time the Notice of Termination is given (or at the rate in effect immediately prior to a Change in Control, if such amounts were higher). Except for a termination covered by Paragraph 3.a.(a), if the Participant’s employment shall be terminated by reason of the Participant’s death, the Participant’s benefits shall be determined in accordance with the Corporation’s benefits and insurance programs then in effect except that if the Participant’s death occurs after the execution of a definitive agreement which results in a Change in Control, then the Participant’s beneficiary shall be entitled to the benefits under Paragraph 3 of this Plan as if the Participant’s employment was terminated by the Corporation other than a Termination for Cause.
7.No Duty to Mitigate. The Participant shall not be required to mitigate the amount of any payment provided for in this Plan by seeking other employment or otherwise, nor shall the amount of any payment or benefit hereunder be reduced by any compensation earned by the Participant as the result of employment by another employer or by retirement benefits after the Date of Termination.
8.Six Month Delay. If, as of the Date of Termination, the Participant is considered a Specified Employee (as such term is defined in Section 409A), any payments or benefits due upon, or within the six month period following and due to, a termination of the Participant’s employment that constitutes a “deferral of compensation” within the meaning of Section 409A and which do not otherwise qualify under the exemptions under Treas. Reg. Section 1.409A-1, shall be paid or provided to the Participant in a lump sum on the earlier of (i) the first day of the month following the six month anniversary of the Participant’s separation from service (as such term is defined in Section 409A) for any reason other than death, and (ii) the date of the Participant’s death, and any remaining payments and benefits shall be paid or provided in accordance with the normal payment dates specified for such payment or benefit.
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9.Treatment of Incentive Plan Awards Upon Termination or a Change in Control. Except as expressly set forth in this Plan, upon a termination of the Participant’s employment for any reason or a Change in Control, any outstanding awards granted under one or more of the Incentive Compensation Plans shall be treated in accordance with the terms of the Notices granting such awards. In the event a Notice of Award does not provide for how the award will be treated upon a termination of the Participant’s employment for any reason or a Change in Control, the provisions of the applicable Plan shall govern.
10.Term of Plan. As to the severance opportunities provided in connection with a termination of employment on or following a Change in Control, the term of this Plan shall continue in effect through December 31 of each year; provided, however, that commencing on January 1 following such year, and each January 1 thereafter, such term shall automatically be extended for one additional year unless, not later than September 30 of the preceding year and prior to a Change in Control, the Corporation shall have given notice that it does not wish to extend such term. In the event of a Change in Control prior to the expiration of such term, such term shall expire on the second (2nd) anniversary of the date of the Change in Control. As to the severance opportunities provided in connection with a termination of employment on or following a Change in Control, the term of this Plan shall terminate if the Participant’s employment is terminated by the Participant or the Corporation prior to a Change in Control. As to the severance opportunities provided in connection with a termination of employment prior to a Change in Control, and subject to Paragraph 25, such opportunities shall continue until the termination of the applicable Participant’s employment with the Corporation.
11.Successors; Binding Plan.
a.Successors of the Corporation. The Corporation will require any Successor to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree, by an agreement in form and substance satisfactory to each Participant, to perform the Corporation’s obligations under this Plan in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. Failure of the Corporation to obtain such assent at least five business days prior to the time a person becomes a Successor (or where the Corporation does not have at least five business days advance notice that a person may become a Successor, within three business days after having notice that such person may become or has become a Successor) shall constitute, if a Change in Control has occurred or thereafter occurs, a Change in Control Good Reason for Resignation and shall entitle such Participant immediately to the corresponding benefits upon delivery by such Participant of a Notice of Termination which the Corporation, by adopting this Plan, hereby assents to. For purposes of this Plan, “Successor” shall mean any person that purchases all or substantially all of the assets of the Corporation or the surviving Corporation (and parent Corporation, if applicable) or obtains or succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Corporation’s business directly, by merger or consolidation, or indirectly, by purchase of voting securities of the Corporation or by acquisition of rights to vote voting securities of the Corporation or otherwise, including but not limited to any person or group that acquires the beneficial ownership or voting rights described in Paragraph 27.a.(ii).
b.The Participant’s Successor. This Plan shall inure to the benefit of and be enforceable by the Participant’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devises and legatees. If the Participant should die following the
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Participant’s Date of Termination while any amount would still be payable to the Participant hereunder if the Participant had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Plan to the Participant’s devisee, legatee or other designee or, if there is no such designee, to the Participant’s estate.
12.Confidentiality.
a.The Participant acknowledges that: (i) the business conducted by the Corporation and its subsidiaries (the “Business”) is intensely competitive and the Participant’s position with the Corporation has exposed the Participant to knowledge of Confidential Information (as defined below); (ii) the direct and indirect disclosure of any such Confidential Information to existing or potential competitors of the Corporation would place the Corporation at a competitive disadvantage and would do damage, monetary or otherwise, to the Corporation’s business; and (iii) the engaging by the Participant in any of the activities prohibited by this Plan may constitute improper appropriation and/or use of Confidential Information. For purposes of this Plan, “Confidential Information” shall mean trade secrets, know-how and other proprietary information of the Corporation known to the Participant, and which gives the Corporation a competitive advantage, relating to the Corporation’s business, but shall not include information generally available to or known by the public or information that is or becomes available to the Participant on a non-confidential basis from a source other than the Corporation or its directors, officers or employees (other than by reason of a breach of any obligation of confidentiality).
b.From and after the Date of Termination on or following a Change in Control until the second anniversary of such termination (the “Non-Competition Period”), the Participant shall not, directly or indirectly, whether individually, as a director, stockholder, owner, partner, employee, consultant, principal or agent of any business, or in any other capacity, make known, disclose, furnish make available or utilize any of the Confidential Information, other than in the proper performance of the duties contemplated herein, or as required by law or by a court of competent jurisdiction or other administrative or legislative body; provided that if required to disclose any of the Confidential Information by law or by a court or other administrative or legislative body, the Participant shall promptly notify the Corporation so that the Corporation may seek a protective order or other appropriate remedy. Notwithstanding anything in this Plan or any code of conduct or ethics, disclosure policy or other code, policy or similar document of the Corporation to the contrary, nothing herein or therein shall restrict the Participant from reporting to the Securities and Exchange Commission, or communicating directly with its staff, about a possible securities law violation.
c.The Participant also agrees to comply with the Employee Non-Solicitation, Non-Compete and Confidentiality Plan, Information Security Plan, Intellectual Property Plan, and Conflicts-of-Interest Questionnaire, previously signed by the Participant and delivered to the Corporation, including those provisions which are applicable after the Participant’s Date of Termination. The Participant’s obligations under Paragraphs 12 through 14 shall not abrogate, and shall be in addition to, any restrictive covenants in such Plans, Questionnaire and any agreements (or plans) covering equity-based awards or compensation received by the Participant.
13.Non-Compete; Consideration.
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a.During the Non-Competition Period, the Participant shall not engage in Competition (as defined below) with the Corporation. For purposes of this Plan, “Competition” by the Participant shall mean the Participant’s engaging in, or otherwise directly or indirectly being employed by or acting as a consultant to, or being a director, officer, employee, principal, agent, stockholder, member, owner, joint venturer or partner of, or permitting the Participant’s name to be used in connection with the competitive activities of any other business or organization in competition with the business of the Corporation as the same shall be constituted on the date of the Change in Control; provided that it shall not be a violation of this Plan for the Participant to:
(i) become the registered or beneficial owner of less than five percent (5%) of any class of the capital stock of a competing corporation registered under the Securities Exchange Act of 1934, as amended, provided that the Participant does not actively participate in the business of such corporation until the expiration of the Non-Competition Period; (ii) be involved with the activities of any other business or organization which did not compete, directly or indirectly, with the business of the Corporation as the same shall be constituted on the date of the Change in Control; or (iii) be engaged in any business from which the Corporation derives no more than five percent (5%) of its revenues if the Participant was not directly engaged in such business at the Corporation prior to the Date of Termination.
b. The “business of the Corporation” is defined as the development, manufacture, and marketing of chemical products and the technologies that are associated with such development and manufacturing. The categories of products that the Corporation creates, and which are included in this definition, include, but are not limited to, lithium and lithium compounds, bromine and derivatives, catalysts and fine chemistry services used in consumer electronics, flame retardants, metal processing, plastics, contemporary and alternative transportation vehicles, refining, pharmaceuticals, agriculture, construction, and customer chemistry services.
c. Without limiting the generality of the foregoing, during the Non- Competition Period, the Participant agrees that the Participant will not, directly or indirectly, for the Participant’s benefit or for the benefit of any other person, firm or entity, do any of the following:
i.solicit from any customer doing business with the Corporation, business of the same or of a similar nature to the business conducted between the Corporation and such customer; or
ii.solicit the employment or services of, or hire, any person who at the time is employed by or a consultant to the Corporation.
iii.solicit the services of any consultant engaged in competitive activities for the Corporation.
d. In consideration for the Participant’s agreement to the provisions of this Paragraph 13, the Corporation shall pay the Participant, not later than the fifth (5th) day following the Determination Date (as defined below) the amount determined to be the value of
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the Participant’s agreement to the provisions of this Paragraph 13 during the Non-Competition Period (the “Non-Competition Payment”). The value of the Participant’s Non-Competition Payment for these purposes shall be determined by an unrelated third party in the business of valuing non- competition payments (the “Valuation Firm”). All costs for obtaining and defending the valuation shall be borne by the Corporation. The date the Valuation Firm finalizes the Non-Competition Payment amount will be the “Determination Date”.
The payment made to the Participant pursuant to this Paragraph 13 is intended to constitute reasonable compensation for purposes of the Code. The Participant shall notify the Corporation in writing of any written claim, objection, litigation, assessment, etc. by any federal, state, or local taxing authority regarding the Non-Competition Payment and its treatment as reasonable compensation under the Code. The notification shall apprise the Corporation of the nature of such claim and shall include a copy of any written correspondence from the relevant taxing authority. Such notification shall be given as soon as practicable but no later than thirty (30) business days after the Participant actually receive notice in writing of such claim. The Corporation shall be responsible for hiring qualified legal counsel and other professionals acceptable to the Participant to defend any challenge and pursue litigation regarding the Non-Competition Payment’s status as reasonable compensation under the Code until the matter is concluded. Any expenditure by the Corporation in any year to defend against the claim shall not have any impact on the expenses the Corporation may incur in defending against the claim in any subsequent year. The Corporation shall pay any expenses related to defense of the claim no later than the year after the year the expense was incurred. The Corporation’s obligations under this Paragraph 13(d) shall exist until the date of the Participant’s death. The obligation of the Corporation to defend against any claim may not be subject to liquidation or exchanged for any other benefit. The Corporation’s obligations under this section shall be performed by the Corporation in good faith.
14.Remedies.
a.The Participant acknowledges that the Participant’s agreement to the matters set forth in Paragraphs 12 and 13 is being entered into in connection with the consummation of a transaction involving a Change in Control of the Corporation and that the services rendered by the Participant to the Corporation are of a special and unique character, which gives this agreement a particular value to the Corporation, the loss of which may not be reasonably or adequately compensated for by damages in an action at law; and that a material breach or threatened breach by the Participant of any of the provisions contained in Paragraphs 12 or 13 of this Plan will cause the Corporation irreparable injury. The Participant therefore agrees that, upon breach by the Participant of Paragraph 12 or 13 of this Plan, the Corporation shall be entitled, in addition to any other right or remedy, to a temporary, preliminary and permanent injunction, without the necessity of proving the inadequacy of monetary damages or the posting of any bond or security, enjoining or restraining the Participant from any such breach or threatened breaches.
b.In addition, in the event of a material breach by the Participant of the provisions of clauses a or c of Paragraph 13, the Corporation shall be entitled to obtain from the Participant the amounts paid to the Participant under Paragraph 13.
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c.The Participant further acknowledges and agrees that due to the uniqueness of the Participant’s services and confidential nature of the information the Participant possesses, the covenants set forth herein are reasonable and necessary for the protection of the business and goodwill of the Corporation. It is the intent of the Corporation and the Participant that if in the opinion of any court of competent jurisdiction any provision set forth in this Plan is not reasonable in any respect, such court shall have the right, power and authority to modify any and all such provisions as to such court shall appear not unreasonable and to enforce the remainder of this Plan as so modified.
15.Notice to Corporation to Cure. In the event that the Participant believes that the Participant has a Change in Control Good Reason for Resignation, the Participant shall notify the Corporation in writing of such fact and the reasons therefore no later than 90 days after the relevant event has occurred. The Corporation may within thirty (30) days after the Participant’s notice, elect to take such steps that would be necessary so that the Participant would no longer have a Change in Control Good Reason for Resignation. Failure to satisfy the requirements of this Paragraph 15 will result in there not being any Change in Control Good Reason for Resignation.
16.Relationship to Other Agreements. This Plan (i) contains the entire understanding, as of the Effective Date, of the Participant and the Corporation relating to severance opportunities under the termination circumstances described in this Plan, and (ii) supersedes any other agreement, arrangement or understanding, as of the Effective Date, between the Participant and the Corporation relating thereto. Notwithstanding the foregoing sentence, the treatment of equity awards under the termination circumstances described in this Plan shall be determined by the terms of the corresponding equity award agreement (including any related notice of equity award) and the corresponding equity plan, as applicable. To the extent that any provision of any agreement between the Corporation and the Participant entered into following the Effective Date shall limit, qualify or be inconsistent with any provision of this Plan, then such provision shall control.
17.Nature of Payments. All payments to the Participant under this Plan shall be considered either payments in consideration of the Participant’s continued service to the Corporation or severance payments in consideration of the Participant’s past service to the Corporation. All payments to the Participant under this Plan shall be subject to required withholdings and deductions. All payments received from the Corporation under this Plan shall be subject to the Corporation’s Incentive-Based Compensation Recovery Policy and the Company’s Amended and Restated Compensation Recoupment and Forfeiture Policy, in each case as may be amended from time to time.
18.Validity. If any provision or term (or part thereof) of this Plan shall be, or be found by any authority or court of competent jurisdiction to be, invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision or term (or part thereof) in that jurisdiction or the whole of this Plan in any other jurisdiction, all of which shall remain in full force and effect.
19.Notice. Any purported termination of the Participant’s employment by the Corporation or by the Participant shall be communicated to the other party by a Notice of
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Termination. A Notice of Termination shall indicate the specific termination provision in this Plan relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Participant’s employment under the provision so indicated. For the purpose of this Plan, notices and all other communications provided for in this Plan shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the Participation Agreement, provided that all notices to the Corporation shall be directed to the attention of the Corporation’s Board of Directors (the “Board”) with a copy to the Secretary of the Corporation or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
20.Fees and Expenses. The Corporation shall pay all legal fees and related expenses incurred by the Participant: (i) as a result of the Participant’s termination on or following a Change in Control, (ii) in seeking to obtain or enforce any right or benefit provided by this Plan relating to a termination on or following a Change in Control (including all fees and expenses, if any, incurred in contesting or disputing any such termination or incurred by the Participant in seeking advice in connection therewith), (iii) in making the determinations under Paragraph 3.a.(viii), (iv) in seeking advice to determine whether the Participant has a Change in Control Good Reason for Resignation and providing the related notice to the Corporation under Paragraph 15, (v) and contesting any claim by the Corporation under Paragraph 14; provided that such fees are incurred no later than the end of the second calendar year after the year of the Participant’s Date of Termination.
21.Release. In order to receive or retain payment of the amounts under Paragraph 3.a.(i), (ii), (iv) and (vii), the Participant shall execute and deliver to the Corporation a General Release which shall contain the provisions set forth in Exhibit A to this Plan and which shall otherwise be in a form reasonably acceptable to the Participant and the Corporation. Such General Release must be executed within the ninety (90) day period following the Participant’s termination, provided, however, that to the extent any amounts payable under Paragraph 3.a.(i), (ii), (iv) or (vii) constitute deferred compensation for purposes of Section 409A, and the ninety
(90) day period referred to herein shall commence in one tax year and end in the subsequent tax year, the payments described in Paragraph 3.a.(i), (ii), (iv) or (vii) shall be made solely in the subsequent tax year. In order to receive payment of the amounts under Paragraph 2.a.(iv), the Participant shall have executed and delivered (not revoked) the Corporation’s standard release of any and all claims the Participant may have regarding the Corporation and its affiliates, provided, however, that to the extent any amounts payable under Paragraph 2.a.(iv) constitute deferred compensation for purposes of Section 409A, and the release consideration period shall commence in one tax yar and end in the subsequent tax year, the payments described in Paragraph 2.a.(iv) shall be made solely in the subsequent tax year.
22.Survival. The respective obligations of, and benefits afforded to, the Corporation and the Participant as provided in Paragraphs 2 through 17, 20 and 21 of this Plan shall survive termination of this Plan.
23.Miscellaneous. No provision of this Plan may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the
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Participant and such officer as may be specifically designated by the Board, provided that the severance opportunities set forth in Paragraph 2.a.(iv) may be amended without the Participant’s prior consent. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Plan to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Plan.
24.Governing Law.
a.The validity, interpretation, construction and performance of this Plan shall be governed by the laws of the State of Virginia.
b.Notwithstanding anything herein to the contrary, this Plan shall be interpreted and applied so that the payments and benefits set forth herein shall either be exempt from or shall comply with the requirements of Section 409A.
To the extent that the Corporation determines that any provision of this Plan would cause the Participant to incur any additional tax or interest under Section 409A, the Corporation shall be entitled to reform such provision to attempt to comply with or be exempt from Section 409A. To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to the Participant and the Corporation without violating the provisions of Section 409A. Each payment under this Plan shall be considered a separate payment for purposes of Section 409A.
In no event may the Participant, directly or indirectly, designate the calendar year of any payment to be made under this Plan or otherwise which constitutes a “deferral of compensation” within the meaning of Section 409A. With respect to reimbursements or in-kind benefits provided under this Plan or under any other compensatory Corporation arrangement: (a) the Corporation will not provide for cash in lieu of a right to reimbursement or in-kind benefits to which the Participant has a right under this Plan or under any other compensatory Corporation arrangement, (b) any reimbursement of provision of in-kind benefits made during the Participant’s lifetime (or such shorter period prescribed by a specific provision of this Plan or of any other compensatory Corporation arrangement) shall be made not later than December 31st of the year following the year in which the Participant incurs the expense, and (c) in no event will the amount of expenses so reimbursed, or in-kind benefits provided, by the Corporation in one year affect the amount of expenses eligible for reimbursement or in-kind benefits to be provided, in any other taxable year.
25.Amendment. No amendment to this Plan shall be effective unless in writing and signed by both the Participant and the Corporation, provided that the severance opportunities set forth in Paragraph 2.a.(iv) may be amended without the Participant’s prior consent.
26.Headings; Construction. The headings used in this Plan have been inserted for convenience of reference only and do not define or limit the provisions hereof. Any Attachments to this Plan are incorporated herein by reference and shall be deemed a part of it.
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27.Definitions.
a.“Change in Control” means the occurrence of any of the following events:
(i)any Person, or “group” as defined in section 13(d)(3) of the Securities Exchange Act of 1934, becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding securities of the Corporation that are entitled to vote generally for the election of the Corporation’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by the Corporation approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person or “group” becomes the Beneficial Owner of 20% or more, and less than 30%, of the Voting Securities, the Continuing Directors may determine, by a vote of at least two-thirds of the Continuing Directors, that the same does not constitute a Change in Control;
(ii)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 the Corporation’s board of directors, or any successor’s board of directors, within two years of the last of such transactions;
(iii)the shareholders of the Corporation approve a Business Combination that is consummated, unless immediately following such Business Combination, (1) 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 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Corporation resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns the Corporation through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (2) no Person (excluding any employee benefit plan or related trust of the Corporation or the Corporation 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 Corporation resulting from such Business Combination, and (3) at least a majority of the members of the board of directors of the Corporation resulting from such Business Combination are Continuing Directors.
For purposes of this Paragraph 27.a and other provisions of this Plan, the following terms shall have the meanings set forth below:
(A)“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and
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Regulations under the Securities Exchange Act of 1934, as amended and as in effect on the date of this Plan (the “Exchange Act”).
(B)“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 the Corporation provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter of securities who acquires any securities of the Corporation 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 the Corporation be deemed (1) the beneficial owner of any securities beneficially owned by another officer or director of the Corporation solely by reason of actions undertaken by such persons in their capacity as officers or directors of the Corporation; or (2) the beneficial owner of securities held of record by the trustee
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of any employee benefit plan of the Corporation or any Subsidiary of the Corporation for the benefit of any employee of the Corporation or any Subsidiary of the Corporation, 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.
(C) “Continuing Directors” means any member of the Corporation’s Board, while a member of that Board, and (i) who was a member of the Corporation’s Board prior to December 7, 2022, or (ii) whose subsequent nomination for election or election to the Corporation’s Board was recommended or approved by a majority of the Continuing Directors.
(D) “Person” means any individual, firm, company, partnership
or other entity.
(E) “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.
b. “Change in Control Good Reason for Resignation” shall mean, without the Participant’s express written consent, any of the following:
(i) a change in the Participant’s position with the Corporation which in the Participant’s reasonable judgment does not represent a promotion from the Participant’s status or position immediately prior to the Change in Control or the assignment to the Participant of any duties or responsibilities or diminution of duties or responsibilities which in the Participant’s reasonable judgment are inconsistent with the Participant’s position with the Corporation in effect immediately prior to the Change in Control, it being understood that any of the foregoing in connection with termination of the Participant’s employment for Cause or Total Disability shall not constitute Change in Control Good Reason for Resignation;
(ii) a reduction by the Corporation in the annual rate of the Participant’s base salary as in effect immediately prior to the date of a Change in Control;
(iii) the Corporation’s requiring the Participant’s office nearest to the Participant’s principal residence in Charlotte to be located at a different place which is more than thirty-five (35) miles from where such office is located immediately prior to a Change in Control;
(iv) the failure by the Corporation to continue in effect compensation or benefit plans in which the Participant participates, which in the aggregate provide the Participant compensation and benefits substantially equivalent to those prior to a Change in Control;
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(v) the failure of the Corporation to obtain a satisfactory agreement from any Successor (as defined in Paragraph 11.a hereof) to assume and agree to perform this Plan, as contemplated in Paragraph 11.a hereof;
(vi) any purported termination of the Participant’s employment which is not effected pursuant to a Notice of Termination satisfying the requirements hereof; for purposes of this Plan, no such purported termination shall be effective for any purpose except to constitute a Change in Control Good Reason for Resignation.
Any of the foregoing events shall constitute Change in Control Good Reason for Resignation only if, and to the extent, there exists “good reason” as such term is defined under Section 409A.
c. “Code” shall mean the Internal Revenue Code of 1986, as amended.
d. “Date of Termination” shall mean:
(i) in case the Participant’s employment is terminated for Total Disability thirty (30) days after Notice of Termination is given (provided that the Participant shall not have returned to the full-time performance of the Participant’s duties during such thirty (30) day period), and
(ii) in all other cases, the date specified in the Notice of Termination (which shall not be less than thirty (30) nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).
e. “Incentive Compensation Plans” shall mean any variable compensation or other incentive compensation plans maintained by the Corporation, in which awards are paid in cash, stock or other property including, but not limited to: (i) the Albemarle Corporation 2017 Incentive Plan, as amended (ii) any variable compensation plan, (iii) or any successor plan thereto.
f. “Normal Retirement Date” shall mean the first day of the calendar month next following the date on which a Participant attains the age of 65.
g. “Notice of Termination” shall mean a written notice as provided in Paragraph 19 hereof.
h. “Section 409A” means Section 409A of the Code and the Treasury Regulations issued thereunder.
i. “Termination for Cause” shall mean termination of the Participant’s employment upon the Participant’s willfully engaging in conduct demonstrably and materially injurious to the Corporation, monetarily or otherwise, provided that there shall have been delivered to the Participant a copy of a resolution duly adopted by the unanimous affirmative
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vote of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to the Participant and an opportunity for the Participant, together with the Participant’s counsel, to be heard before the Board), finding that in the good faith opinion of the Board the Participant were guilty of the conduct set forth and specifying the particulars thereof in detail.
For purposes of this Paragraph i, no act, or failure to act, on the Participant’s part shall be deemed “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Corporation. Any act or failure to act based upon authority given pursuant to a resolution duly adopted by the Board or based upon the advice of counsel for the Corporation shall be conclusively presumed to be done or omitted to be done by the Participant in good faith and in the best interests of the Corporation.
j. “Severance Multiple” shall mean the lesser of (a) two (2), and (b) the number obtained by multiplying two (2) by a fraction, the numerator of which is the number of days from the Date of Termination to the Participant’s Normal Retirement Date and the denominator of which is 730 but such number under this clause (j) shall not be less than one (1).
k. “Total Disability” shall mean total physical or mental disability rendering the Participant unable to perform the duties of the Participant’s employment for a continuous period of six (6) months. Any question as to the existence of the Participant’s Total Disability upon which the Participant and the Corporation cannot agree shall be determined by a qualified physician not employed by the Corporation and selected by the Participant (or, if the Participant is unable to make such selection, it shall be made by any adult member of the Participant’s immediate family), and approved by the Corporation. The determination of such physician made in writing to the Corporation and to the Participant shall be final and conclusive for all purposes of this Plan.
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EXHIBIT A GENERAL RELEASE
1.This General Release is given by (“Employee”) to Albemarle Corporation (the “Corporation”) and its successors.
2.Employee agrees to and hereby does release and discharge the Corporation, its subsidiaries and affiliates, and its and their successors, assigns, directors, officers, representatives and employees (collectively, “Releasees”) from any and all claims, causes of action and demands of any kind, whether known or unknown, which Employee has or ever has had, which are based on acts or omissions occurring up to and including the date this General Release is fully executed. In this General Release, Employee further releases the Corporation and its subsidiaries and affiliates from any and all compensation owed to Employee, including vacation pay and any attorneys’ fees, damages and costs Employee could recover under any statute or common law theory, except arising under the Executive Severance Plan between Employee and the Corporation and any employee benefit plan of the Corporation. Included within this release, without limiting its scope, are claims arising out of Employee’s employment or the termination of Employee’s employment based on Title VII of the Civil Rights Acts of 1964 as amended, the Americans with Disabilities Act of 1990 as amended, the Age Discrimination in Employment Act as amended, the Older Workers Benefit Protection Act as amended, the Fair Labor Standards Act of 1938 as amended by the Equal Pay Act of 1963, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974 as amended, the Civil Rights Act of 1991, [insert appropriate reference or Virginia law], the U.S. Patriot Act, the Sarbanes-Oxley Act of 2002, and any other federal, state or local civil rights, disability, discrimination, retaliation or labor law, or any theory of contract or tort law.
3.Notwithstanding anything to the contrary, nothing herein shall be construed to release, terminate or discharge Employee’s rights (i) to indemnification, advancement of expenses and exculpation as provided in the articles or certificate of incorporation, bylaws or other organizational documents of the Corporation or any of its subsidiaries or affiliates, or as provided or permitted under any applicable law, or as provided in any indemnification agreement or (ii) under any policy of directors’ and officers’ liability, errors and omissions liability or other insurance maintained by the Corporation or any of its subsidiaries and affiliates, in each case where Employee was or is a party or otherwise involved or is threatened to be made a party to or otherwise involved in any threatened, pending or completed action, proceeding, investigation, inquiry or other matter, whether civil, criminal, administrative or otherwise, by reason of the fact that Employee is or was a director, officer, employee or agent of the Corporation or any of its subsidiaries or affiliates (including Employee’s conduct with respect to an employee benefit plan) or is or was serving at the request of the Corporation or any of its subsidiaries or affiliates as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise.
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Exhibit 10.2
AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is made on July 30, 2025 by and between Albemarle Corporation, a Virginia corporation, and J. Kent Masters, Jr. (the “Executive”). References herein to the “Company” shall mean Albemarle Corporation and, where appropriate, each and any of its divisions, affiliates or subsidiaries.
WHEREAS the Company and the Executive previously entered into an Amended and Restated Executive Employment Agreement, dated as of March 15, 2023 (the “Prior Agreement”);
WHEREAS the Company and the Executive desire to amend and restate the Prior Agreement, effective as of the Effective Date, in order to extend the term of the Prior Agreement and implement certain other changes to the Prior Agreement, as set forth herein; and
WHEREAS, as of the date hereof, the Executive is the Company’s President and Chief Executive Officer and serves as the Chairman of the Board of Directors of the Company.
NOW, THEREFORE, in consideration for the promises of the parties set forth below and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and the Executive hereby agree as follows:
1. Term. Subject to the provisions of Section 6 of this Agreement, the term of employment of the Executive by the Company under this Agreement shall be as follows:
(a) Initial Term. The initial term of employment of the Executive by the Company under this Agreement shall begin on July 30, 2025 (the “Effective Date”) and end on March 30, 2027 (the “Initial Term”), unless extended or terminated earlier in accordance with this Agreement. The Initial Term and any Extension (as defined below) shall be the “Term of Employment.”
(b) Extension Notice. No fewer than ninety (90) days prior to the expiration of the Term of Employment, the Executive shall advise the Board of Directors of the Company (the “Board”) whether the Executive desires to extend the Term of Employment. If the Executive does not timely notify the Board of his desire to extend the Term of Employment, then such action shall be deemed to result in the Executive’s Termination without Cause upon Expiration of the Term of Employment under Section 6(g) of this Agreement as of the last day of the Term of Employment.
(c) Extension of Employment. Provided that, in accordance with Section 1(b) above, the Executive has timely notified the Board of the Executive’s desire to extend the Term of Employment by one (1) year, the Board will consider in its sole and absolute discretion whether to offer the Executive such extension. If the Board decides in its sole and absolute discretion to offer the Executive an extension of his employment, the Board will so notify the Executive in writing (an “Extension Notice”) no fewer than sixty (60) days prior to the expiration of the Term of Employment. If the Board timely provides an Extension Notice and the Executive and the Company agree to enter into such extension, the Term of Employment will be extended by one (1) year (such period of time, the “Extension”). If for any reason the Board does not
timely provide to the Executive an Extension Notice, or if the Executive does not agree to enter into such extension if provided, such action or inaction shall be deemed to result in the Executive’s Termination without Cause upon Expiration of the Term of Employment under Section 6(g) of this Agreement as of the last day of the Term of Employment.
2. Position and Duties. During the Term of Employment, (i) the Executive shall continue to serve as the Company’s President and Chief Executive Officer (“CEO”) and (ii) the Company shall nominate the Executive for re-election as a member of the Board; provided that, in the event the Executive’s employment as CEO terminates for any reason, unless mutually agreed by the Executive and the Company, the Executive shall immediately resign from the Board and shall execute and deliver any written documentation reasonably requested by the Company to the Company to give effect to such resignation. During the Term of Employment, the Executive may engage in not-for-profit outside activities provided such activities (including but not limited to membership on boards of directors of not-for-profit organizations) do not conflict in any material respect with the Executive’s duties and responsibilities under this Agreement. The Executive may also continue during the Term of Employment to serve as a member of the board of the for-profit organization on which he serves as of the date hereof (it being acknowledged that such membership is the board of directors of Vibrantz Technologies, Inc.). The Executive may, subject to prior written approval from the Board in accordance with the Company’s corporate governance guidelines (with such approval not to be unreasonably withheld), serve as a member of the board of directors of up to one additional for-profit organization (which may be a publicly traded corporation).
3. Principal Place of Employment. The Executive shall be employed at the Company’s principal offices in Charlotte, North Carolina, except for required travel on the Company’s business to an extent substantially consistent with the present business travel obligations of the Executive’s position.
4. Compensation and Related Matters.
(a) Salary. During the Term of Employment, the Company shall pay to the Executive a salary at a rate of not less than one million and four hundred thousand dollars ($1,400,000.00) per annum. The Executive’s salary shall be payable in substantially equal installments in accordance with the Company’s normal payroll practices applicable to senior executives and subject to all applicable statutory deductions and authorized withholdings. Subject to the first sentence of this Section 4(a), the Executive’s salary may be increased from time to time at the sole and absolute discretion of the Board (or an authorized committee thereof).
(b) Annual Incentive Program. During the Term of Employment, the Executive will be eligible for a target bonus under the Company’s Annual Incentive Plan (“AIP”) equal to 150% of his annual base salary (with a maximum bonus under the AIP equal to 200% of Executive’s target bonus). The amount of the bonus will be based on the achievement of metrics determined in the sole discretion of the Board (or an authorized committee thereof) after consultation with the Executive and will be measured using Company and/or individual performance factors. It is understood that the Company determines eligibility for awards and the terms of awards on an annual basis, and that information about awards will be communicated to
the Executive in accordance with Company practice. AIP bonuses will be paid no later than March 15th of the following fiscal year.
(c) Expenses. During the Term of Employment, the Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Executive in performing services hereunder, including, but not limited to, all reasonable expenses of travel and living while away from home, provided that such expenses are incurred and accounted for in accordance with the policies and procedures established by the Company and consistent with those policies and procedures in effect as of the date hereof.
(d) Benefits. The Executive will be eligible for the comprehensive benefits package typically made available to similarly situated employees of the Company. An overview of the package will be provided to the Executive separately, and notwithstanding anything in the overview materials, the terms of the plan documents will control. The Company’s benefit plans and policies that shall be available shall include, but not be limited to, the following:
(i) The Albemarle Savings Plan (“401(k) Plan”), which currently allows eligible employees to defer part of their salaries, provides a matching contribution and provides an additional employer contribution based on participants’ pay. Notwithstanding anything in this Agreement or any overview materials provided on the 401(k) Plan, the terms of the 401(k) Plan document will control;
(ii) The Albemarle Executive Deferred Compensation Plan (“EDCP”), which allows participants to defer up to 50% of base salary and up to 100% of their annual bonus (net of FICA and Medicare taxes) each year. Deferrals are credited to one or more accounts which may be distributed either at retirement or at a specified future date (which may be while the participant is still employed), based on participants’ elections. Notwithstanding anything in this Agreement or any overview materials provided on the EDCP, the terms of the EDCP document will control;
(iii) Albemarle’s executive physical program;
(iv) Albemarle’s executive financial planning program;
(v) Albemarle’s U.S. Domestic Relocation Policy; and
(vi) Albemarle’s Health and Welfare Program.
(e) Long Term Incentive Awards. The Executive will be eligible for LTI award grants under the Albemarle Long Term Incentive Plan (“LTIP”) for 2026. The form and design of LTI award grants (including any applicable performance-based vesting conditions) will be determined in the sole discretion of the Board (or an authorized committee thereof), but are expected to consist of a combination of Performance Share Units (“PSUs”), restricted stock units (“RSUs”) and stock options, but the proportion of performance-based awards granted to the Executive shall be substantially similar to that of the members of the Company’s Executive Leadership Team. Except as provided in the following sentence regarding vesting of the Executive’s award grants made under this paragraph (e), the standard provisions governing all LTI award grants made by the Company shall apply to the Executive’s future LTI award grants, including but not limited to, provisions on exercisability of stock options, payment of RSUs, and
earning and payment of PSUs. With regard to the vesting of the Executive’s LTI award grants made under this paragraph (e), provided the Executive remains employed by the Company through March 30, 2027, he will become fully vested in his LTI grants made pursuant to this paragraph (e) on that date (subject to the achievement of any applicable performance-based vesting goals). The specific terms of the LTI award grants made pursuant to this paragraph (e) shall be described and governed by the separate Notices of Award the Executive will be provided after the grants are made, which shall be consistent with the terms and conditions set forth on Exhibit A attached hereto. Notwithstanding anything to the contrary in this Agreement, the terms of the LTIP documents, including the LTIP Plan document and separate award agreements, will control unless the special vesting and exercisability provisions for the LTI award grants in this Agreement are more favorable to the Executive, in which case the more favorable vesting and exercisability provisions in this Agreement will control. The Executive acknowledges and agrees that the Executive has received the LTI award grants for 2025 in satisfaction of all Company obligations with respect thereto.
(f) Paid Time Off. During the Term of Employment, the Executive shall be entitled to five (5) weeks of paid time off in each calendar year, determined in accordance with the Company’s Corporate Vacation Policy; provided, however, that the Executive’s use of paid time off shall not interfere with the performance of his duties under this Agreement, subject to applicable law.
5. Confidential Information and Intellectual Property.
(a) This Agreement is intended to supplement, and not to supersede, any rights the Company may have in law or equity with respect to the protection of trade secrets or confidential or proprietary information.
(b) For purposes of this Agreement, “Confidential Information” means any and all information regarding the Company and any of its subsidiaries, divisions and affiliates that is not generally known to the public and which the Company deems proprietary or confidential, including any information received from or concerning, directly or indirectly, the Company and its customers, vendors, suppliers or distributors, regardless of the form in which such information is maintained, whether in hard-copy or electronic form, and regardless of whether such information constitutes an original or a copy. Confidential Information shall include, without limitation: trade secrets, ideas, inventions, trademarks, business information, know-how, processes, techniques, improvements, designs, redesigns, creations, discoveries, research, technical plans, drawings, technical data, technologies or information, formulae and developments; information concerning customers, suppliers, vendors and distributors, including any lists thereof; pricing information, strategies, schemes and lists; market and technical research; financial, purchasing, and business planning information; methods of distribution or supply chain information; financial, business and sales projections, forecasts or plans; information concerning mergers, purchases, sales, acquisitions or other corporate transactions involving the Company or any of its affiliates or proposed affiliates, and proposed targets for merger, purchase, acquisition, merger or other corporate transaction; marketing and promotional information, ideas and strategies; marketing surveys and analyses; budgets; invoices; tax matters or other taxation- related information; actual and projected revenues, profits or losses; information relating to the Company’s personnel or any other personnel data or information; the
content, terms or structure of the Company’s contracts and agreements, including contracts and agreements with customers, suppliers or vendors, including drafts thereof or term sheets; information relating to the Company’s products and services; and any and all other information relating to the Company and its products, services, performance or plans that the Executive acquired as a result of his employment or other association (as a Board member or otherwise) with the Company and that is not generally known or available to the public or within the Company’s industry; provided, however, Confidential Information shall not include information relating to the Company or its subsidiaries, affiliates or divisions that (1) became or becomes a matter of public knowledge through sources independent of the Executive, (2) has been or is disclosed by the Company or its subsidiaries, affiliates or divisions without restriction on its use, or (3) has been or is required or specifically permitted to be disclosed by law or governmental order, regulation or investigation, provided that the disclosure does not exceed the extent of disclosure required by such law, order, regulation or investigation. It is understood that notwithstanding anything in this Agreement or any code of conduct or ethics or other policy of the Company to the contrary, nothing herein or therein shall restrict the Executive from reporting matters to the Securities and Exchange Commission (“SEC”), or communicating directly with its staff, about a possible securities law violation.
(c) The provisions of this Section 5 shall not preclude the Executive from disclosing such information to the Executive’s professional tax advisor or legal counsel solely to the extent necessary for the rendering of their professional services to the Executive if such individuals agree to keep such information confidential, and/or if reasonably appropriate in connection with a legal dispute between the Executive and the Company. The Executive may also disclose Confidential Information in the ordinary course of his employment with the Company and its subsidiaries, divisions and affiliates.
(d) This Agreement is not intended to limit or restrict, and shall not be interpreted in any manner that limits or restricts, Executive from exercising any legally protected whistleblower rights (including pursuant to Section 21F of the Securities Exchange Act of 1934 (“Section 21F”)) or receiving an award for information provided to any government agency under any legally protected whistleblower rights. Notwithstanding anything in this Agreement to the contrary, nothing in or about this Agreement prohibits the Executive from: (i) filing and, as provided for under Section 21F, maintaining the confidentiality of a claim with the SEC; (ii) providing Confidential Information to the SEC, or providing the SEC with information that would otherwise violate this Section 5, to the extent permitted by Section 21F; (iii) cooperating, participating or assisting in an SEC investigation or proceeding without notifying the Company; or (iv) receiving a monetary award as set forth in Section 21F.
(e) Notwithstanding any of the foregoing, it is understood that the U.S. Defend Trade Secrets Act of 2016 (“DTSA”) provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (iii) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. In addition, DTSA provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation
of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (A) files any document containing the trade secret under seal; and (B) does not disclose the trade secret, except pursuant to court order.
(f) The Executive agrees that, following his separation from the Company for any reason and under any circumstance whatsoever, he will not communicate directly or indirectly with, or give statements to, any member of the media (including print, television, radio or social media) relating to any matter (including pending or threatened lawsuits or administrative investigations) about which the Executive has knowledge or information (other than knowledge or information that is not Confidential Information) as a result of employment with the Company. The Executive further agrees to notify the Board or its designee as soon as practicable after being contacted by any member of the media with respect to any matter covered under this Section.
(g) The Executive agrees that all information, inventions and discoveries, whether or not patented or patentable, protected by a copyright or copyrightable, or registered as a trademark or eligible to be registered as a trademark, made or conceived by the Executive or any Company employee or contractor, either alone or with others, at any time while employed by the Company, which arise out of such employment and is pertinent to any field of business or research in which, during such employment, the Company, its subsidiaries, affiliates or divisions is engaged or (if such is known to or ascertainable by the Executive) is considering engaging (“Intellectual Property”) shall (i) be and remain the sole property of the Company and the Executive shall not seek a patent or copyright or trademark protection with respect to such Intellectual Property without the prior consent of an authorized representative of the Company and (ii) be disclosed promptly to an authorized representative of the Company along with all information the Executive possesses with regard to possible applications and uses. Further, at the request of the Company, and without expense or additional compensation to the Executive, the Executive agrees to, during and after his or her employment, execute such documents and perform such other acts as the Company deems reasonably necessary to obtain, perfect, maintain, protect and enforce patents on such Intellectual Property in a jurisdiction or jurisdictions designated by the Company, and to assign and transfer to the Company or its designee all such Intellectual Property rights and all patent applications and patents relating thereto. The Executive hereby irrevocably grants the Company power of attorney to execute and deliver any such documents on the Executive’s behalf in his or her name and to do all other lawfully permitted acts to transfer the work product to the Company and further the transfer, issuance, prosecution, and maintenance of all Intellectual Property rights therein, to the full extent permitted by law, if the Executive does not promptly cooperate with the Company’s request (without limiting the rights the Company shall have in such circumstances by operation of law). The power of attorney is coupled with an interest and shall not be affected by the Executive’s subsequent incapacity.
(h) The Executive represents and warrants that, as of the Effective Date, there is no Intellectual Property that: (i) has been created by or on behalf of the Executive, and/or (ii) is owned exclusively by the Executive or jointly by the Executive with others or in which the Executive has an interest, and that relate in any way to any of the Company’s actual or proposed businesses, products, services, or research and development, and which are not assigned to the Company under this Agreement.
(i) The Executive and the Company agree that the Executive intends all original works of authorship within the purview of the copyright laws of the United States authored or created by the Executive in the course of the Executive’s employment with the Company will be works for hire within the meaning of such copyright law.
(j) Upon termination of the Executive’s employment, or at any time upon request of the Company, the Executive will (i) promptly return to the Company all Confidential Information and Intellectual Property and all copies thereof (including without limitation books, handbooks, proposals, procedures, protocols, manuals, files, papers, memoranda, letters, facsimiles, photographs/images, audio recordings/files, electronically stored information) in any form whatsoever, and regardless of the format, medium or location in which such information has been stored, viewed or accessed (including without limitation any Company-maintained electronic system(s), personal computer or computer system(s), personal email account(s), and any external disk(s), flash drive(s), cloud storage services, or any other location, format or medium in which information can be stored, maintained or accessed), and (ii) delete or destroy all copies of any such documents and materials not returned to the Company that remain in the Executive’s possession or control, including those stored on any non-Company devices, networks, storage locations, and media in the Executive’s possession or control.
(k) The Executive acknowledges and agrees that the injury the Company will suffer in the event of the breach by the Executive of any of the provisions of this Section 5 will cause the Company irreparable injury that cannot be adequately ascertained or compensated by monetary damages alone. Therefore, the Executive agrees that the Company, without limiting any other legal or equitable remedies available to it, shall be entitled to obtain equitable relief by injunction or otherwise, without the posting of any bond, from any court of competent jurisdiction, including, without limitation, injunctive relief to prevent the Executive’s failure to comply with the terms and conditions of this Section 5.
6. Termination. The Executive’s employment with the Company shall terminate immediately upon the expiration of the Term of Employment. In addition, the Term of Employment and the Executive’s employment with the Company may be terminated by the Company or the Executive for any reason at any time prior to the expiration of the Term of Employment. Upon termination of the Executive’s employment during the Term of Employment, the Executive shall be entitled to the compensation and benefits described in the applicable provisions of this Section 6 and shall have no further rights to any compensation or any other benefits from the Company or any of its affiliates. Defined terms for purposes of this Section 6 shall have the meanings set forth in subparagraph (i) hereof.
(a) Termination by the Company without Cause (other than due to Death or Total Disability) or by Executive with Good Reason Outside of a Change in Control Period. If, outside of a Change in Control Period, the Executive’s employment is terminated by the Company without Cause (other than (i) due to the Executive’s death, Total Disability (as defined below) or (ii) upon the appointment of a Successor CEO or expiration of the Term of Employment) or by the Executive with Good Reason, then, subject to Section 6(e), Section 20, and the Executive’s continued compliance in all material respects with all applicable restrictive covenants in this Agreement and any other agreement between the Executive and the Company (provided that the Executive shall be provided with written notice by the Company of any such
noncompliance and not less than thirty (30) days to cure, if curable), the Executive shall be entitled to receive the following benefits:
(i) Accrued Benefits. The Company shall (A) pay the Executive his full base salary and accrued vacation pay then in effect through the Date of Termination, at the rate in effect at the time Notice of Termination is given, on the Company’s first regular payroll date following the Date of Termination; (B) pay or provide any benefits or awards which have been earned or become payable but which have not yet been paid to the Executive and any earned annual bonus for the prior fiscal year which has not yet been paid (with any subjective goals being treated as achieved at not less than target) when annual bonus amounts for such year are paid to other eligible employees of the Company (the “Prior Year Bonus”); and (C) reimburse the Executive for any unreimbursed expenses pursuant to the Company’s expense reimbursement policy (clauses (A) through (C), collectively, the “Accrued Benefits”).
(ii) Severance Payment. The Company shall pay as severance pay to the Executive an amount (the “Severance Payment”) equal to 2.0 times the sum of (1) the Executive’s annual base salary for the year of termination (not taking into account any reductions of annual base salary which would constitute Good Reason or were made in the six (6) months prior to the Date of Termination) plus (2) the Executive’s target bonus under the AIP for the year of termination (not taking into account any reductions of target bonus which would constitute Good Reason or were made in the six (6) months prior to the Date of Termination). The Severance Payment will be paid to the Executive in a lump sum thirty (30) days following the Date of Termination or, if later, the Release Effective Date (as defined below).
(iii) Pro Rata AIP. The Company shall pay the Executive an AIP bonus for the year of termination equal to the product of (x) the calculated Company score and the Executive’s individual performance modifier set by the Company (treating all subjective performance metrics as having been met at not less than 100% at target) and (y) a fraction, the numerator of which is the number of days during such calendar year that the Executive was employed by the Company and the denominator of which is 365, payable at the time the Company pays the AIP bonus amounts for such year to other eligible employees of the Company (no later than March 15th of the following year) (the “Prorated Bonus”);
(iv) Financial Counseling. For each of the calendar year in which the Executive’s Date of Termination occurs and the immediately following calendar year, the Company shall make available to Executive financial counseling services, which may include tax counseling services, and Executive may select the organization that will provide such services (“Financial Counseling”); provided, however, that (A) the Company’s obligation to reimburse or provide Financial Counseling under this subparagraph (iv) shall be limited to an amount no greater than $12,500 for each such calendar year and (B) in the event that the Date of Termination is less than 60 days before the end of the calendar year in which the Date of Termination occurs, then the availability of such Financial Counseling shall be available beginning January 1 of the calendar year following such Date of Termination.
(v) Relocation Expense Reimbursement. The Company shall reimburse the Executive for his expenses incurred in connection with relocating from his Charlotte, North Carolina residence to another residence within the United States after his Termination. Expenses covered under this paragraph shall not include any expenses incurred in connection with the Executive’s sale of a residence purchased in Charlotte, North Carolina other than any real estate closing costs and commissions owed in connection with selling the Charlotte residence (the “Relocation Benefits”). For purposes of clarification only, the Company shall have no obligation to purchase the Executive’s residence in Charlotte. Except as otherwise provided in this subparagraph (v), the Relocation Benefits shall be in accordance with the Company’s U.S. Domestic Relocation Policy. The Relocation Benefits must be used, if at all, no later than the end of the second year after the year that contains the Executive’s Date of Termination, and the reimbursement of expenses must be paid to the Executive no later than the end of the third year after the year that contains the Date of Termination.
(vi) Benefits Continuation. If the Executive timely elects COBRA coverage for himself or his eligible dependents under the Company’s group medical, dental or vision plans, the Company shall pay 100% of the premiums for such coverage at no cost to the Executive until the earliest of (A) the second anniversary of the termination of the Executive’s employment, (B) the date the Executive becomes eligible for comparable coverage under plans under another employer’s policies and (C) the date the Executive becomes eligible for coverage under Medicare.
(b) Termination due to Total Disability. During any period prior to the Date of Termination and during the Term of Employment that the Executive is unable to perform his full time duties with the Company, whether as a result of Total Disability or as a result of a physical or mental disability that is not total or is not permanent and therefore is not a Total Disability, the Executive shall continue to receive his base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits that are payable or provided under the Company’s benefit plans, including its disability plans. After the Date of Termination, the Executive’s benefits shall be determined in accordance with the Company’s benefits, insurance and other applicable programs, and the Company shall pay or provide the Executive the Accrued Benefits and the Prorated Bonus for the year of termination. The compensation and benefits, other than salary, payable or provided pursuant to this Section 6(b) shall be the greater of (x) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect immediately prior to a Change in Control (as defined in the Amended and Restated Change in Control Agreement), if applicable, and (y) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect at the time the compensation and benefits are paid; provided that, the Executive’s outstanding equity awards under the LTIP shall be treated in accordance with the terms of the applicable Notices of Award for such awards. “Total Disability” means total physical or mental disability rendering the Executive unable to perform the duties of his employment for a continuous period of six (6) months. Any question as to the existence of Total Disability upon which the Executive and the Company cannot agree shall be determined by a qualified physician not employed by the Company and selected by the Executive (or, if the Executive is unable to make such selection, it shall be made by any adult member of the Executive’s immediate family), and approved by the
Company (such approval not to be unreasonably withheld). The determination of such physician made in writing to the Company and to the Executive shall be final and conclusive for all purposes of this Agreement.
(c) Termination by the Company for Cause or by the Executive other than with Good Reason Outside of a Change in Control Period. If, outside of a Change in Control Period, the Executive’s employment is terminated by the Company for Cause or by the Executive other than with Good Reason, the Company shall pay or provide the Executive his Accrued Benefits (excluding, in the event of a termination by the Company for Cause, the Prior Year Bonus (if any)). Thereafter, the Company shall have no further obligation to the Executive under this Agreement.
(d) Termination due to Death Outside of a Change in Control Period. If the Executive’s employment is terminated due to the Executive’s death other than during a Change in Control Period, the Executive’s benefits shall be determined in accordance with the Company’s benefits and insurance programs then in effect, and the Company shall pay or provide the Executive the Accrued Benefits and the Prorated Bonus for the year of termination; provided that, the Executive’s outstanding equity awards under the LTIP shall be treated in accordance with the terms of the applicable Notices of Award for such awards. If the Executive’s employment is terminated due to the Executive’s death during a Change in Control Period, the effects of such termination of employment shall be as described in the Amended and Restated Change in Control Agreement.
(e) Release of Claims. In order to receive payment of the amounts set forth in Section 6 (unless otherwise prohibited by law), the Executive must execute and deliver to the Company a general release in the form attached hereto as Exhibit B (the “Release”). The Release must be executed and become effective and irrevocable within the ninety (90) day period following the Date of Termination; provided, however, that to the extent any amounts payable under Section 6 constitute nonqualified deferred compensation for purposes of Section 409A, and such ninety (90) day period commences in one calendar year and ends in the subsequent calendar year, such amounts shall not be paid to the Executive until the later of the Release Effective Date and the Company’s first regular payroll date in such subsequent calendar year.
(f) Notice of Termination. Any termination of the Executive’s employment by the Company or the Executive shall be communicated to the other party in a written Notice of Termination. The Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated. The Notice of Termination shall be provided in accordance with the notice requirements of Section 12.
(g) Termination without Cause upon Expiration of the Term of Employment. If, outside of a Change in Control Period, the Executive’s employment is terminated by the Company without Cause or by the Executive upon (i) expiration of the Term of Employment or (ii) the appointment of a Successor CEO who commences employment prior to the expiration of the Term of Employment (the date of such commencement, the “New CEO Start Date”), then, in each case, subject to Section 6(e), Section 20, and the Executive’s
continued compliance in all material respects with all applicable restrictive covenants in this Agreement and any other agreement between the Executive and the Company (provided that the Executive shall be provided with written notice by the Company of any such noncompliance and not less than thirty (30) days to cure, if curable) (“Continued Compliance”), which compliance, in the event of a termination covered by the foregoing clause (ii), shall count as service towards vesting for the Executive’s outstanding equity awards under the LTIP made pursuant to Section 4(e), the Executive shall be entitled to receive the following benefits:
(i) The Company shall pay or provide the Executive the Accrued Benefits.
(ii) The Company shall pay the Executive either (i) if such termination occurs in 2026, an AIP bonus for the 2026 AIP year based upon the calculated company score and the Executive’s individual performance modifier set by the Company at the time the Company pays the AIP bonus amounts for such year to other eligible employees of the Company (no later than March 15th, 2026) or (ii) if such termination occurs in 2027, a Prorated Bonus for the year of termination.
(iii) If such termination occurs in 2026, the Company shall pay the Executive an amount equal to the Executive’s base salary that would have been paid to the Executive through the end of 2026, in a lump sum thirty (30) days following the Date of Termination or, if later, the Release Effective Date.
(iv) The Executive’s outstanding equity awards under the LTIP shall be treated in accordance with the first paragraph of this Section 6(g) and the terms of the applicable Notices of Award for such awards.
(v) The Company shall provide the Executive with Financial Counseling and the Relocation Benefits in accordance with the terms of Section 6(a) of this Agreement.
(vi) If a New CEO Start Date occurs prior to the Executive receiving a grant of LTI awards for the calendar year 2026, the Board, in its sole discretion, will consider in good faith granting to the Executive a one-time special LTI award grant with a value commensurate with the LTI award grant the Executive would have received for such calendar year had the Executive remained CEO.
(h) Termination of Employment During a Change in Control Period. Notwithstanding anything herein to the contrary, the effects of a termination of employment by the Company without Cause (other than due to death or Total Disability) or by Executive with Good Reason during a Change in Control Period shall be determined in accordance with the Amended and Restated Change in Control Agreement. In the event that, within 180 days following a termination by the Company without Cause (other than due to death or Total Disability) or by Executive with Good Reason, there occurs a Change in Control of the Company that is a “change in control event” within the meaning of Section 409A, the Executive shall be entitled to the payments and benefits as set forth in the Amended and Restated Change in Control Agreements; provided that such payments and benefits shall be made without duplication of (i.e.,
shall be reduced by) the amount of any payments or benefits paid or provided under Section 6(a) of this Agreement, on or within thirty (30) days following the date of such Change in Control.
(i) Definitions. For purposes of this Agreement:
(i) “Amended and Restated Change in Control Agreement” means that certain letter agreement by and between the Executive and the Company dated as of the Effective Date regarding the effects of certain terminations of employment during a Change in Control Period.
(ii) “Cause” means:
A. the Executive’s willful failure to perform the Executive’s duties (other than any such failure resulting from incapacity due to physical or mental illness);
B. the Executive’s willful failure to comply with any valid and legal directive of the Board, engagement in dishonesty or other misconduct, which is, in each case, injurious to the Company or any of its affiliates;
C. the Executive’s embezzlement, misappropriation or fraud, whether or not related to the Executive’s employment with the Company;
D. the Executive’s conviction of or plea of guilty or nolo contendere to a crime that constitutes a felony (or state law equivalent) or a crime that constitutes a misdemeanor involving moral turpitude or other illegal conduct (excluding any vehicle or traffic-related misdemeanors to the extent not resulting in imprisonment or material reputational harm to the Company);
E. the Executive’s intentional material violation of the Company’s Code of Conduct or a material policy of the Company; or
F. the Executive’s material breach of any obligation under this Agreement or any other written agreement between the Executive and the Company.
Poor performance shall not in and of itself constitute Cause. No action or inaction shall be treated as willful unless done or not done in bad faith and without a reasonable belief such action or inaction was in the best interests of the Company or its affiliates. Cause shall not result from any action or inaction based upon direction from the Board or advice of counsel to the Company or any of its affiliates. The Executive shall not be terminated for Cause absent a majority resolution of the independent directors of the Board and the opportunity for the Executive to be heard before the Board with his counsel present if he so elects.
(iii) “Change in Control Period” means (A) the two-year period commencing on the date of a Change in Control (as defined in the Amended and Restated Change in Control Agreement) and (B) solely in the event such Change in Control constitutes a “change in control event” within the meaning of Section 409A, subject to the consummation of such Change in Control, the 180-day period prior to the date of such Change in Control.
(iv) “Date of Termination” means:
A. if the Executive’s employment is terminated for Total Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive’s duties during such thirty (30) day period), and
B. in all other cases, the date specified in the Notice of Termination (which shall not be less than thirty (30) nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).
(v) “Good Reason” shall mean:
A. a material adverse change in the Executive’s title, position or authorities, or the assignment to the Executive of any material duties or material responsibilities that are materially inconsistent with the Executive’s position (including a failure by the Company to nominate the Executive to the Board during the Term of Employment, other than due to a termination for Cause); provided that, prior to the consummation of a Change in Control, Good Reason shall not exist as a result of (i) the Board assigning (in consultation with the Executive) specified duties of the Executive to any Company employee identified in good faith by the Board as a potential Successor CEO or (ii) the appointment, or commencement of employment of, a Successor CEO;
B. a reduction by the Company in the annual rate of Executive’s base salary or target bonus or long term incentive opportunity;
C. the Company’s requiring Executive’s office nearest to Executive’s principal residence to be located at a different place which is more than thirty-five (35) miles from where such office is located;
D. the failure by the Company to continue in effect compensation or benefit plans in which Executive participates, which in the aggregate provide Executive substantially equivalent compensation and benefits;
E. a material breach by the Company of this Agreement or the Executive’s Amended and Restated Change in Control Agreement or other material written agreement with the Company; or
F. the failure of the Company to obtain a satisfactory agreement from any applicable successor entity to assume and agree to perform under any applicable employment or severance compensation agreement.
In order for one of the foregoing events in clauses (A) through (F) to constitute Good Reason, (I) the Executive must notify the Company in writing no later than 90 days after the Executive’s knowledge that the relevant event stating which Good Reason event has occurred, (II) the Company shall not have corrected the Good Reason event within thirty (30) days after Executive’s notice and (III) the Executive must terminate employment within sixty (60) days after the expiration of the Company’s notice period.
(vi) “Notice of Termination” shall mean a written notice as provided in Section 6(f).
(vii) “Release Effective Date” means the date on which the Release becomes effective and irrevocable.
(viii) “Successor CEO” means an individual who succeeds the Executive as a permanent CEO and who is identified, selected and appointed by the Board in a process with the full participation of the Executive (including in his capacity as a member of the Board), excluding any individual who is appointed as interim or acting CEO.
For the avoidance of doubt, the definitions of Cause and Good Reason set forth herein shall apply for purposes of (1) any outstanding LTI award agreement between the Executive and (2) the Company Amended and Restated Change in Control Agreement.
7. Cooperation. The Executive and the Company agree that certain matters in which the Executive will be involved during the Term of Employment may necessitate the Executive’s cooperation in the future. Accordingly, following the termination of the Executive’s employment for any reason, to the extent reasonably requested by the Board, the Executive shall reasonably cooperate with the Company in connection with litigation or governmental investigation matters arising out of the Executive’s service to the Company; provided that, such cooperation shall be subject to the Executive’s personal and business commitments, the Executive shall not be required to cooperate against the Executive’s own interests and the Company shall make reasonable efforts to minimize disruption of the Executive’s other activities. The Company shall reimburse the Executive for reasonable expenses incurred in connection with such cooperation (including reasonable legal fees incurred by the Executive’s counsel if the Executive in good faith believes independent counsel to be appropriate) and, to the extent that the Executive is required to spend substantial time on such matters, the Company shall compensate the Executive at a mutually agreed upon hourly rate.
8. Restrictive Covenants.
(a) Executive Acknowledgement. The Company and the Executive acknowledge that (i) the Company has a special interest in and derives significant benefit from the unique skills and experience of the Executive; (ii) as a result of the Executive’s service with the Company, the Executive will use and have access to Confidential Information during the course of the Executive’s employment; (iii) the Confidential Information has been developed and created by the Company at substantial expense and constitutes valuable proprietary assets of the Company, and the Company will suffer substantial damage and irreparable harm which will be difficult to compute if, during the term of the Executive’s employment or thereafter, the Executive should disclose or improperly use such Confidential Information in violation of the provisions of this Agreement; (iv) the Company will suffer substantial damage and irreparable harm which will be difficult to compute if the Executive competes with the Company in violation of this Agreement; (v) the Company will suffer substantial damage which will be difficult to compute if the Executive solicits or interferes with the Company’s employees, clients, or customers; (vi) the provisions of this Agreement are reasonable and necessary for the protection of the business of the Company; and (vii) the provisions of this Agreement will not preclude the Executive from obtaining other gainful employment or service.
(b) No Solicitation of Employees. The Executives agrees that, both during the Term of Employment and for a period of three (3) years following the termination of the Executive’s employment with the Company, at any time and for any reason, the Executive will not, directly or indirectly, on his own behalf or on behalf of any other person or entity (regardless of who first initiates the communication), hire or solicit to hire for employment or consulting or other provision of services, any person who is actively employed or exclusively engaged (or in the preceding six (6) months was actively employed or exclusively engaged) by the Company. This obligation includes, but is not limited to, inducing or attempting to induce, or influencing or attempting to influence, any person employed or engaged by the Company to terminate his or her relationship with the Company, assisting any other person or entity to identify or evaluate Company employees for recruitment away from the Company, and assisting any person or entity hire an employee away from the Company. This provision shall not be violated by providing a personal reference upon request or by a general advertisement for employees or consultants not focused specifically on employees or consultants of the Company.
(c) No Solicitation of Customers. The Executive agrees that, both during the Term of Employment and for a period of three (3) years following the termination of the Executive’s employment with the Company at any time and for any reason, the Executive will not directly or indirectly, on his own behalf or on behalf of any other person or entity:
(i) solicit the business of, or provide services or goods similar to, the services or goods provided by the Company to any customer of the Company or any other entity with which the Company has an agreement to perform services or provide goods during the twelve (12) month period prior to the Executive’s Date of Termination, in each case, on behalf of a Competing Business;
(ii) contact any customer of the Company for the purpose of soliciting such customer to purchase a product or service that is the same as, similar to or in competition with those products and/or services offered, made, or rendered by the Company, in each case, on behalf of a Competing Business; or
(iii) induce or attempt to induce any customer, supplier or vendor of the Company to cease or limit the business it does or may plan to do with the Company or to otherwise interfere in the Company’s business relationship with such customer, supplier or vendor.
This provision shall not be violated by general advertisements and marketing not focused specifically on any customer, supplier or vendor of the Company.
(d) Non-Competition. During the Term of Employment and for a period of three (3) years following the termination of the Executive’s employment with the Company at any time and for any reason, the Executive shall not, on his own behalf or on behalf of others, directly or indirectly (whether as an employee, consultant, investor, partner, sole proprietor or otherwise), be employed by, perform any services for, or hold any ownership interest in any Competing Business. “Competing Business” means any individual, corporation, partnership, business or other entity which operates or attempts to operate a business which provides, designs, develops, markets, engages, invests in, produces or sells any products, services or businesses
which are the same or similar to the core products, services or businesses produced, marketed, invested in or sold by the Company, in each case, that (A) are related to lithium- or bromine-based energy storage, speculation and/or catalysts or (B) account for 10% or more of the Company’s consolidated revenue as reported in the Company’s most recent quarterly or annual financial statements. Notwithstanding the foregoing, the Executive’s ownership, for investment purposes, of up to one percent (1%) of the total outstanding equity securities of a publicly traded company or the passive ownership of up to one percent (1%) of the total outstanding equity securities of a non-publicly traded entity, shall not be considered a violation of this subparagraph (d). The Executive’s provision of services to a unit, division or subsidiary of an entity engaging in a Competing Business shall not be in violation of this subparagraph (d) if such unit, division or subsidiary does not engage in a Competing Business.
(e) Enforcement.
(i) The Executive acknowledges that the restrictions contained in this Section 8 are necessary to protect the Company’s confidential and proprietary information, trade secrets, intellectual property and other legally protectable business information; and further acknowledges and agrees that each and every restriction in this Section 8 is reasonable in all respects, including duration, territory and scope of activity.
(ii) The Executive agrees that the restrictions contained in this Section 8 shall be construed as separate agreements independent of any other provision of this Agreement or any other agreement between the Executive and the Company. To the extent that any restriction of this Section 8 is determined by any court of competent jurisdiction to be unenforceable, the Executive and the Company expressly agree and intend that such restriction be reduced in scope to the extent permitted by law, and that such remaining restriction be enforced, and that the other restrictions of this Section 8 remain in full force and effect.
(iii) The Executive agrees that the existence of any claim or cause of action by the Executive against the Company, under this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and restrictions in this Section 8.
(iv) The Executive acknowledges and agrees that the injury the Company will suffer in the event of the breach by the Executive of any of the provisions of this Section 8 will cause the Company irreparable injury that cannot be adequately ascertained or compensated by monetary damages alone. Therefore, the Executive agrees that the Company, without limiting any other legal or equitable remedies available to it, shall be entitled to obtain equitable relief by injunction or otherwise, without the posting of any bond, from any court of competent jurisdiction, including, without limitation, injunctive relief to prevent the Executive’s failure to comply with the terms and conditions of this Section 8. The periods of time referenced in each of subparagraphs (b), (c) and (d) above shall be tolled as applicable on a day-for-day basis for each day during which the Executive violates the provisions of subparagraphs (b), (c) or (d) in any respect so long as the Company takes actions to prevent or challenge such violation, so that the
Executive is restricted from engaging in the activities prohibited by subparagraphs (b), (c) and (d) for the full time period.
(f) Other Covenants Superseded. Notwithstanding anything to the contrary in any outstanding LTI award agreement between the Executive and the Company, to the extent such other agreement contains similar covenants as contained in this Section 8, such covenants shall be superseded by the covenants contained in this Section 8.
9. Equity Awards Following Termination. Except as otherwise provided herein (including Section 4(e) hereof), the effect of a termination of employment on the Executive’s outstanding RSUs, PSUs, stock options and other equity compensation awards shall be determined in accordance with the terms and conditions of the applicable award agreement.
10. Successors; Binding Agreement. This Agreement and all rights of the Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts payable to the Executive under this Agreement have not yet been paid, all such amounts shall be paid in accordance with the terms of this Agreement and applicable law to the Executive’s beneficiary pursuant to a valid written designation of beneficiary, as determined by the Company in its discretion, or, if there is no effective written designation of beneficiary by the Executive, to the Executive’s estate.
11. Insurance and Indemnity. The Company shall, to the extent permitted by law, include the Executive during the Term of Employment under any directors and officers’ liability insurance policy maintained for its directors and officers, with coverage at least as favorable to the Executive in amount and each other material respect as the coverage of other officers covered thereby. The Company’s obligation to provide insurance and indemnify the Executive shall survive expiration or termination of this Agreement with respect to proceedings or threatened proceedings based on acts or omissions of the Executive occurring during the Executive’s employment with the Company. Such obligations shall be binding upon the Company’s successors and assigns and shall inure to the benefit of the Executive’s heirs and personal representatives.
12. Notice. For the purposes of this Agreement, notices, demands and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or (unless otherwise specified) mailed by United States registered mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: To the Executive’s most recent home address on file with the
Company
If to the Company: Albemarle Corporation
4250 Congress Street, Suite 900
Charlotte, NC 28209
Attention: General Counsel
4250 Congress Street, Suite 900
Charlotte, NC 28209
Attention: General Counsel
or to such other address as any party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
13. Complete Agreement; Modification, Waiver. This Agreement, along with any compensation and benefits summary, RSU, PSU, stock option, or other equity compensation award agreements between the parties, as well as the Amended and Restated Change in Control Agreement, represent the complete agreement of the parties with respect to the subject matter of this Agreement and supersede all prior and contemporaneous agreements, promises or representations of the parties, including the Prior Agreement, the Prior Change in Control Agreement (as defined in the Amended and Restated Change in Control Agreement) and any other prior employment agreement or similar agreement between the parties hereto. For the avoidance of doubt, the entry into this agreement and termination of the Prior Agreement shall not constitute a termination of the Executive’s employment or entitle him to any payment or benefit in connection with a termination of employment, including under Section 6 of the Prior Agreement. To the extent that the bonus payment provisions (i.e., post-termination bonus payments) provided in this Agreement differ from the provisions of the Company’s incentive bonus plans, such bonus payments shall be paid pursuant to the provisions of this Agreement except to the extent expressly prohibited by law. Except as provided by Section 20, no provision of this Agreement may be amended or modified except in a document signed by the Executive and such person as may be designated by the Company. No waiver by the Executive or the Company of any breach of, or lack of compliance with, any condition or provision of this Agreement by the other party shall be considered a waiver of any other condition or provision or the same condition or provision at another time. To the extent that this Agreement is in any way deemed to be inconsistent with any prior or contemporaneous compensation and benefits summary, RSU, PSU, stock option, or other equity compensation award agreements between the parties, or term sheet referencing such specific awards, the terms of this Agreement shall control. No agreements or representations, oral or otherwise, with respect to any subject matter of this Agreement have been made by either party which are not set forth expressly in this Agreement.
14. Severability. If any provision of this Agreement shall be held or deemed to be invalid, illegal, or unenforceable in any jurisdiction, for any reason, the invalidity of that provision shall not have the effect of rendering the provision in question unenforceable in any other jurisdiction or in any other case or of rendering any other provisions herein unenforceable, but the invalid provision shall be substituted with a valid provision which most closely approximates the intent and the economic effect of the invalid provision and which would be enforceable to the maximum extent permitted in such jurisdiction or in such case.
15. No Duty to Mitigate. The Executive shall not be required to mitigate the amount of any payment provided for Section 6 by seeking other employment or otherwise, nor shall the amount of any payment or benefit hereunder be reduced by any compensation earned by the Executive as the result of employment by another employer or by retirement benefits after the Date of Termination.
16. Withholding. All payments required to be made by the Company hereunder to the Executive or the Executive’s estate or beneficiaries shall be subject to the withholding of such amounts as the Company may reasonably determine are required to be withheld pursuant to any applicable law. To the extent permitted by the Company in its sole discretion, the Executive may provide all or any part of any necessary withholding by contributing Company common stock with value, determined on the date such withholding is due, equal to the number of shares
contributed multiplied by the closing price per share as reported on the securities exchange constituting the primary market for the Company’s stock on the date preceding the date the withholding is determined.
17. Jurisdiction and Venue. The validity, interpretation, construction, performance, and enforcement of this Agreement shall be governed by the laws of the state of Virginia, without regard to conflicts of law principles. Any action or proceeding by either of the parties to enforce this Agreement shall be brought only in a state or federal court of competent jurisdiction sitting in the state of Virginia, and the parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue.
18. Attorney’s Fees. Except as otherwise provided herein, each party shall bear its own attorney’s fees and costs incurred in any action or dispute arising out of this Agreement. Notwithstanding anything herein to the contrary, the Company shall pay all legal fees and related expenses incurred by the Executive: (i) as a result of the Executive’s termination of employment by the Company without Cause or with Good Reason, (ii) in seeking to obtain or enforce any right or benefit provided by this Agreement (including all fees and expenses, if any, incurred in contesting or disputing any such termination or incurred by the Executive in seeking advice in connection therewith), and (iii) contesting any claim by the Company that the Executive has breached the Executive’s obligations under any restrictive covenant; provided that such fees are incurred no later than the end of the second calendar year after the year of the Date of Termination. The Company shall pay or reimburse Executive for the reasonable cost of Executive’s attorney’s fees incurred in the negotiation of this Agreement and related agreements, within thirty (30) days of receipt of documentation reasonably satisfactory to the Company of the incurrence of such attorney’s fees.
19. Miscellaneous. No right or interest to, or in, any payments shall be assignable by the Executive; provided, however, that the Executive shall not be precluded from designating in writing one or more beneficiaries to receive any amount that may be payable after the Executive’s death and the legal representative of the Executive’s estate shall not be precluded from assigning any right hereunder to the person or persons entitled thereto. This Agreement shall be binding upon and shall inure to the benefit of the Executive, the Executive’s heirs and legal representatives and, the Company and its successors.
20. Compliance with Section 409A. Notwithstanding any other provision of this Agreement to the contrary, the provision, time and manner of payment or distribution of all compensation and benefits provided by this Agreement that constitute nonqualified deferred compensation subject to and not exempted from the requirements of Section 409A (“Section 409A Deferred Compensation”) of the Internal Revenue Code of 1986, as amended (the “Code”), shall be subject to, limited by and construed in accordance with the requirements of Code Section 409A and all regulations and other guidance promulgated by the Secretary of the Treasury pursuant to such Section (such Section, regulations and other guidance being referred to herein as “Section 409A”), including the following:
(a) Separation from Service. Payments and benefits constituting Section 409A Deferred Compensation otherwise payable or provided pursuant to Section 6 upon the
Executive’s termination of employment shall be paid or provided only at the time of a termination of the Executive’s employment that constitutes a Separation from Service. For the purposes of this Agreement, a “Separation from Service” is a separation from service within the meaning of Treasury Regulation Section 1.409A-1(h).
(b) Six-Month Delay Applicable to Specified Employees. If, at the time of a Separation from Service of the Executive, the Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) (a “Specified Employee”), then any payments and benefits constituting Section 409A Deferred Compensation to be paid or provided pursuant to Section 6 upon the Separation from Service of the Executive shall be paid or provided commencing on the later of (i) the date that is six months after the date of such Separation from Service or, if earlier, the date of death of the Executive (in either case, the “Delayed Payment Date”), or (ii) the date or dates on which such Section 409A Deferred Compensation would otherwise be paid or provided in accordance with Section 6. All such amounts that would, but for this Section 20(b), become payable prior to the Delayed Payment Date shall be accumulated and paid on the Delayed Payment Date.
(c) Health Care Benefits. In the event that all or any of the health care benefits to be provided pursuant to this Agreement as a result of a Participant’s Separation from Service constitute Section 409A Deferred Compensation, the Company shall provide for such benefits constituting Section 409A Deferred Compensation in a manner that complies with Section 409A. To the extent necessary to comply with Section 409A, the Company shall determine the health care premium cost necessary to provide such benefits constituting Section 409A Deferred Compensation for the applicable coverage period and shall pay such premium cost which becomes due and payable during the applicable coverage period on the applicable due date for such premiums; provided, however, that if the Executive is a Specified Employee, the Company shall not pay any such premium cost until the Delayed Payment Date. If the Company’s payment pursuant to the previous sentence is subject to a Delayed Payment Date, the Executive shall pay the premium cost otherwise payable by the Company prior to the Delayed Payment Date, and on the Delayed Payment Date the Company shall reimburse the Executive for such Company premium cost paid by the Executive and shall pay the balance of the Company’s premium cost necessary to provide such benefit coverage for the remainder of the applicable coverage period as and when it becomes due and payable over the applicable period.
(d) Stock-Based Awards. The vesting of any stock-based compensation awards which constitute Section 409A Deferred Compensation and are held by the Executive, if the Executive is a Specified Employee, shall be accelerated in accordance with this Agreement to the extent applicable; provided, however, that the payment in settlement of any such awards shall occur on the Delayed Payment Date to the extent required by Section 409A.
(e) Installments. Executive’s right to receive any installment payments payable hereunder shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment for purposes of Section 409A.
(f) Reimbursements. To the extent that any reimbursements payable to Executive pursuant to this Agreement are subject to the provisions of Section 409A, such
reimbursements shall be paid to Executive no later than December 31 of the year following the year in which the cost was incurred; the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year; and Executive’s right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
(g) Rights of the Company; Release of Liability. It is the mutual intention of the Executive and the Company that the provision of all payments and benefits pursuant to this Agreement be made in compliance with or be exempt from the requirements of Section 409A, and this Agreement shall be interpreted accordingly. To the extent that the provision of any such payment or benefit pursuant to the terms and conditions of this Agreement would fail to comply with the applicable requirements of Section 409A, the Company and the Executive shall in good faith determine if the parties shall make modifications to the timing or manner of providing such payment and/or benefit to comply with the requirements of Section 409A. Any such modifications made by the Company shall, to the maximum extent permitted in compliance with the requirements of Section 409A, preserve the aggregate monetary face value of such payments and/or benefits provided by this Agreement in the absence of such modification; provided, however, that the Company shall in no event be obligated to pay any interest or other compensation in respect of any delay in the provision of such payments or benefits in order to comply with the requirements of Section 409A. The Executive acknowledges that (i) the provisions of this Section 20 may result in a delay in the time at which payments would otherwise be made pursuant to this Agreement and (ii) the Company is authorized to amend this Agreement, to void or amend any election made by the Executive under this Agreement and/or to delay the payment of any monies and/or provision of any benefits in such manner as may be determined by the Company, in its discretion, to be necessary or appropriate to comply with Section 409A (including any transition or grandfather rules thereunder) without prior notice to or consent of the Executive. The Executive hereby releases and holds harmless the Company, its directors, officers and stockholders from any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Executive as a result of the application of Section 409A.
21. Counterparts. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Executive Employment Agreement effective as of the Effective Date.
ALBEMARLE CORPORATION
/s/ Melissa H. Anderson
Name: Melissa H. Anderson
Title: EVP, Chief People & Transformation Officer
Name: Melissa H. Anderson
Title: EVP, Chief People & Transformation Officer
J. KENT MASTERS, JR.
/s/ J. Kent Masters, Jr.
/s/ J. Kent Masters, Jr.
EXHIBIT A
The following sets forth the vesting provisions for long-term incentive awards that will be made to J. Kent Masters (“Participant”) during the Term of Employment. Annex A hereto includes relevant defined terms for the provisions set forth below. Capitalized terms used but not defined herein or in Annex A hereto shall have the meaning ascribed thereto in the Albemarle Corporation 2017 Incentive Plan (“Plan”).
Restricted Stock Unit Awards
1. Normal Vesting Schedule. The Restricted Stock Units shall be unvested and subject to forfeiture as of the Grant Date but shall vest in full as of March 30, 2027 (the “Vesting Date”), subject to Participant’s continued employment with the Company or an Affiliate through the Vesting Date.
2. Accelerated Vesting Upon a Qualifying Termination Event Prior to a Change in Control. Notwithstanding paragraph 1, if, prior to the Vesting Date and the occurrence of a Change in Control, Participant experiences a Qualifying Termination Event, any unvested portion of the Restricted Stock Units shall vest on the Vesting Date, subject to Participant’s Continued Compliance (as defined in the Employment Agreement) through the Vesting Date.
3. Accelerated Vesting in Connection with a Change in Control. Notwithstanding paragraph 1, if, prior to the Vesting Date, a Change in Control occurs, the provisions of this paragraph 3 shall apply in addition to the provisions of Article 17 (and related provisions) of the Plan.
a. If no Replacement Award is received by Participant in connection with the Change in Control, the unvested portion of this Award shall become vested as of immediately prior to the consummation of the Change in Control, and any payment Participant would have received as a result of such acceleration in connection with such Change in Control shall be paid to Participant as soon as practicable (but in no event later than 30 days) after the Vesting Date subject to Participant’s Continued Compliance through the Vesting Date.
b. If a Replacement Award is received by Participant in connection with the Change in Control, such Replacement Award shall be deemed to replace this Award in full satisfaction of the Company’s obligations under this Award; provided, however, that, in the event that the Company’s shares remain traded on the New York Stock Exchange or another established securities market following such Change in Control, this Award shall remain outstanding in accordance with this Agreement except that if Participant experiences a Qualifying Termination Event prior to the Vesting Date and concurrent with or after the date of the Change in Control, then the Replacement Award shall vest in full on the Vesting Date, subject to Participant’s Continued Compliance through the Vesting Date.
c. Notwithstanding the foregoing, upon a Change in Control, the Committee may determine that this Award shall be canceled and terminated for consideration in accordance with Article 17.1(e) of the Plan and subject to paragraph 10.
4.Settlement. Except as set forth in paragraph 3(a), as soon as practicable (but in no event later than 30 days) after any Restricted Stock Unit has vested, the Company shall deliver to Participant one whole Share in full settlement of such vested Restricted Stock Unit.
Performance Unit Awards
1. Grant Date. On [●] (the “Grant Date”), the Company granted Participant this incentive award (this “Award”) in the form of Performance Units covering a target number of Shares equal to [●] (the “Target Units”), subject to the terms and conditions of the Plan and this Agreement.
2. Normal Vesting Schedule. The Target Units shall be unvested and subject to forfeiture as of the Grant Date but a percentage of the Target Units shall be eligible to vest (if at all) subject to (i) actual achievement of the Performance Goal over the measurement period (the “Measurement Period”) as determined by the Committee in accordance with the table set forth below (the number of Target Units so earned (if any) based on such percentage, the “Earned Units” and, the date of such determination by the Committee, the “Award Date”) and (ii) Participant’s continued employment with the Company or an Affiliate through March 30, 2027 (the “Vesting Date”). Any remaining unvested portion of this Award shall be immediately forfeited without consideration.
Performance Level | Performance Goal Achievement | Percentage of Target Units Earned* | |||||||||||||||||||||||||||||||||
Poor | [●] | [●]% | |||||||||||||||||||||||||||||||||
Threshold | [●] | [●]% | |||||||||||||||||||||||||||||||||
Target | [●] | [●]% | |||||||||||||||||||||||||||||||||
Superior | [●] | [●]% | |||||||||||||||||||||||||||||||||
* If achievement level with respect to the Performance Goal falls between any of the levels above, then the percentage of Target Units earned shall be determined based on linear interpolation. The number of Earned Units will be rounded to the nearest whole number.
3. Accelerated Vesting Upon a Qualifying Termination Event Prior to a Change in Control. Notwithstanding paragraph 2, if, prior to the occurrence of a Change in Control:
a. Participant experiences a Qualifying Termination Event (other than due to Participant’s death or Disability) that occurs prior to the Vesting Date, then the Earned Units (if any) shall vest (if at all) as of the end of the Measurement Period (without regard to the termination of Participant’s employment) based on the actual level of achievement of the Performance Goal over the Measurement Period and the remaining portion of this Award shall be immediately forfeited without consideration;
b. Participant dies prior to the Vesting Date, then the Earned Units (if any) shall vest (if at all) as of the end of the Measurement Period (without regard to Participant’s termination of employment) based on the actual level of achievement of the Performance Goal over the Measurement Period and, in each case, the remaining portion of this Award shall be immediately forfeited without consideration;
c. Participant experiences a Disability prior to the Vesting Date, then the Target Units shall vest (without regard to the actual achievement of the Performance Goal) as of the Vesting Date, subject to Participant’s Continued Compliance through the Vesting Date; or
4.Accelerated Vesting in Connection with a Change in Control. Notwithstanding paragraph 2, if, prior to the end of the Measurement Period, a Change in Control occurs, the provisions of this paragraph 4 shall apply in addition to the provisions of Article 17 (and related provisions) of the Plan.
a. If no Replacement Award is received by Participant in connection with the Change in Control, then the Target Units shall vest (without regard to the actual achievement of the Performance Goal) as of immediately prior to the consummation of the Change in Control, and any payment Participant would have received as a result of such acceleration in connection with such Change in Control shall be paid (and the Target Units shall be deemed vested for purposes of paragraph 5) to Participant on the Vesting Date (if such Change in Control occurs on or prior to the Vesting Date) or the date of such Change in Control (if such Change in Control occurs on or following the Vesting Date), subject to Participant’s Continued Compliance through the Vesting Date.
b. If a Replacement Award is received by Participant in connection with the Change in Control, such Replacement Award shall be deemed to replace this Award in full satisfaction of the Company’s obligations under this Award; provided, however, that, in the event that the Company’s shares remain traded on the New York Stock Exchange or another established securities market following such Change in Control, this Award shall remain outstanding in accordance with this Agreement, except that if Participant experiences a Qualifying Termination Event (other than due to death or Disability) prior to the Vesting Date and concurrent with or after the date of the Change in Control, the Target Units shall vest (without regard to the actual achievement of the Performance Goal) on the Vesting Date, subject to Participant’s Continued Compliance through the Vesting Date.
c. Notwithstanding the foregoing, upon a Change in Control, the Committee may determine that this Award shall be canceled and terminated for consideration in accordance with Article 17.1(e) of the Plan and subject to paragraph 10.
5. Settlement. In full settlement of any Performance Unit that vests hereunder (whether a Target Unit or Earned Unit), the Company shall deliver to Participant one whole Share as soon as practicable (but in no event later than 90 days) after the end of the Measurement Period; provided, however, that in the event any Performance Unit vests due to Participant’s Disability, such delivery shall be made as soon as practicable (but in no event later than 90 days) after the Vesting Date.
Stock Option Awards
1. Normal Vesting Schedule. The Option shall vest in full as of March 30, 2027 (the “Vesting Date”), subject to Participant’s continued employment with the Company or an Affiliate through the Vesting Date.
2. Accelerated Vesting Upon a Qualifying Termination Event Prior to a Change in Control. Notwithstanding paragraph 1, if, prior to the Vesting Date and the occurrence of a Change in Control, Participant experiences a Qualifying Termination Event, any unvested portion of the Option shall vest in full as of the Vesting Date, subject to Participant’s Continued Compliance through the Vesting Date.
3. Accelerated Vesting in Connection with a Change in Control. Notwithstanding paragraph 1, if, prior to the Vesting Date, a Change in Control occurs, the provisions of this paragraph 3 shall apply in addition to the provisions of Article 17 (and related provisions) of the Plan.
a. If no Replacement Award is received by Participant in connection with the Change in Control, the Option shall vest in full as of immediately prior to the consummation of the Change in Control, and any payment Participant would have received as a result of such acceleration in connection with such Change in Control shall be paid to Participant on the Vesting Date subject to Participant’s Continued Compliance through the Vesting Date.
b. If a Replacement Award is received by Participant in connection with the Change in Control, such Replacement Award shall be deemed to replace this Award in full satisfaction of the Company’s obligations under this Award; provided, however, that, in the event that the Company’s shares remain traded on the New York Stock Exchange or another established securities market following such Change in Control, this Award shall remain outstanding in accordance with this Agreement except that if Participant experiences a Qualifying Termination Event prior to the Vesting Date and concurrent with or after the date of the Change in Control, then the Replacement Award shall vest in full on the Vesting Date, subject to Participant’s Continued Compliance through the Vesting Date.
c. Notwithstanding the foregoing, upon a Change in Control, the Committee may determine that this Award shall be canceled and terminated for consideration in accordance with Article 17.1(e) of the Plan.
4. Exercisability.
a. The expiration date of the Option is the tenth anniversary of the Grant Date (the “Expiration Date”). The Option shall be forfeited without consideration on, and may not be exercised on or after, the Expiration Date.
b. Upon the vesting of the Option pursuant to paragraph 1, the Option shall become immediately exercisable and thereafter shall remain exercisable until the Expiration Date; provided, however, that if, after the Option becomes exercisable pursuant to this paragraph 4(b), Participant experiences (i) a Qualifying Termination Event, then the
Option shall remain exercisable until the Expiration Date or (ii) a termination for any reason other than a Qualifying Termination Event, then the Option shall cease to be exercisable on the sixtieth (60th) day following the date on which Participant ceases to provide services to the Company. On the date the Option ceases to be exercisable pursuant to this paragraph 4(b), any portion of the Option that remains unexercised shall be forfeited without consideration.
c. Upon the vesting of any portion of the Option pursuant to paragraph 2, such vested portion of the Option shall first become exercisable on the third anniversary of the Grant Date and thereafter shall remain exercisable until the Expiration Date. On the date the Option ceases to be exercisable pursuant to this paragraph 4(c), any portion of the Option that remains unexercised shall be forfeited without consideration.
d. Upon the vesting of any portion of the Option pursuant to paragraph 3, such vested portion of the Option shall be immediately exercisable and thereafter shall remain exercisable until the Expiration Date. On the date the Option ceases to be exercisable pursuant to this paragraph 4(d), any portion of the Option that remains unexercised shall be forfeited without consideration.
Annex A
1. “Cause” has the meaning set forth in the Employment Agreement as in effect on the date hereof.
2. “Disability” shall mean Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code and within the meaning of Treas. Reg. Section 1.409A-3(i)(4).
3. “Employment Agreement” means the Amended and Restated Executive Employment Agreement, by and between Participant and the Company, dated July 30, 2025.
4. “Good Reason” has the meaning set forth in the Employment Agreement as in effect on the date hereof.
5. “Performance Goal” means the [●]1.
6. “Qualifying Termination Event” shall mean the termination of Participant’s employment by reason of Participant’s death or Disability; termination by the Company or an Affiliate other than for Cause (including upon a termination of employment due to the expiration of the term of Participant’s employment as provided under an individual employment agreement between Participant and the Company) or a voluntary resignation for Good Reason.
7. “Replacement Award” shall mean, in connection with a Change in Control, an award that replaces or substitutes for this Award and meets the following requirements: (a) it has a value at least equal to the value of this Award; (b) it relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control (including any entity that becomes the direct or indirect parent of the Company in connection with the Change in Control); (c) it provides that if Participant experiences a Qualifying Termination Event concurrent with or after the date of the Change in Control, any unvested portion of the Replacement Award shall vest in full as of the date of such Qualifying Termination Event; and (d) its other terms and conditions are not less favorable to Participant than the terms and conditions of this Award (including the provisions that would apply in the event of a subsequent Change in Control). The determination of whether the requirements of a Replacement Award are satisfied shall be made by the Company immediately before the Change in Control, in its sole discretion.
1 Performance goals for the applicable performance unit award to be determined by the Company in the ordinary course and included in the full agreement document.
EXHIBIT B
FORM OF RELEASE
This WAIVER AND RELEASE OF CLAIMS (this “Release”) is entered into on [●], by and between Albemarle Corporation, a Virginia corporation (the “Company”), and J. Kent Masters (“Executive”).
WHEREAS, the Company and Executive entered into the Amended and Restated Executive Employment Agreement, dated as of July 30, 2025 (the “Employment Agreement”) pursuant to which Executive is eligible for payment of the amounts and benefits described in Section 6 of the Employment Agreement (collectively, the “Severance”), and
WHEREAS, defined terms used but not defined herein shall have the meanings given thereto in the Employment Agreement.
NOW, THEREFORE, in consideration of such payments due to Executive under the Employment Agreement, the Company and Executive hereby agree as follows:
1. Waiver and Release. For valuable consideration from the Company, receipt of which is hereby acknowledged, Executive waives, releases, and forever discharges the Company and its current and former parents, subsidiaries, affiliates, divisions, shareholders, owners, members, officers, directors, attorneys, agents, employees, insurers, successors, and assigns, and the Company’s parents’, subsidiaries’, and affiliates’ divisions, shareholders, owners, members, officers, directors, attorneys, agents, employees, insurers, successors, and assigns (collectively, referred to as the “Company Releasees”) from any and all rights, causes of action, claims or demands, whether express or implied, known or unknown, that arise on or before the date that Executive executes this Release, which Executive has or may have against the Company and/or the Company Releasees in connection with Executive’s employment or the termination thereof, including, without limitation, any rights, causes of action, claims, or demands relating to or arising out of the following:
(a) anti-discrimination, anti-harassment, and anti-retaliation laws, such as the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, and Executive Order 11141, which prohibit employment discrimination based on age; Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Equal Pay Act, and Executive Order 11246, which prohibit discrimination based on race, color, national origin, religion, or sex (including sexual harassment or sexual abuse); the Genetic Information Nondiscrimination Act, which prohibits discrimination on the basis of genetic information; the Americans With Disabilities Act and §§ 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination based on disability; and any other federal, state, or local laws prohibiting employment or wage discrimination; other employment laws, such as the Worker Adjustment and Retraining Notification Act, which requires that advance notice be given of certain workforce reductions; the Executive Retirement Income Security Act of 1974, which, among other things, protects employee benefits; the Family and Medical Leave Act, which requires employers to provide leaves of absence under certain circumstances; state laws which regulate wage and hour matters, including all forms of compensation, vacation pay, sick pay, compensatory time, overtime, commissions, bonuses, and meal and break periods; state family, medical, and military leave laws, which require employers to provide leaves of absence under
certain circumstances; the Sarbanes Oxley Act; and any other federal, state, or local laws relating to employment;
(b) tort, contract, and quasi-contract claims, such as claims for wrongful discharge, physical or personal injury, sexual harassment or sexual abuse, intentional or negligent infliction of emotional distress, fraud, fraud in the inducement, negligent misrepresentation, defamation, invasion of privacy, interference with contract or with prospective economic advantage, breach of express or implied contract, unjust enrichment, promissory estoppel, breach of covenants of good faith and fair dealing, negligent hiring, negligent supervision, negligent retention, and similar or related claims;
all remedies of any type, including, without limitation, damages and injunctive relief, in any action that may be brought on Executive’s behalf against the Company and/or the Company Releasees by any government agency or other entity or person; and
(c) subject to Section 2 of this Release, any compensation or benefits, whether provided for under the Employment Agreement or otherwise.
Executive understands that Executive is releasing claims about which Executive may not know anything at the time Executive executes this Release. Executive acknowledges that it is Executive’s intent to release such unknown claims, even though Executive recognizes that someday Executive might learn new facts relating to Executive’s employment or learn that some or all of the facts Executive currently believes to be true are untrue, and even though Executive might then regret having signed this Release. Nevertheless, Executive acknowledges Executive’s awareness of that risk and agrees that this Release shall remain effective in all respects in any such case. Executive expressly waives all rights Executive might have under any laws intended to protect Executive from waiving unknown claims except as provided otherwise in this Release.
2. Excluded Claims. Notwithstanding anything to the contrary in this Release, this Release, including the waiver and release contained herein, shall not include, adversely affect, alter or extinguish, in each case, (a) any rights of Executive as a shareholder with respect to any shares of Company common stock owned by Executive or as an equity-award or unit award holder with respect to shares of Company common stock in accordance with the terms of the applicable award agreement (as amended and/or restated); (b) awards to Executive from or by a government agency for providing information or any rights or claims that may arise after the date on which Executive executes this Release; (c) any rights or claims for the Severance or to enforce the Employment Agreement (including all rights to accrued benefits) in accordance with its terms; (d) any rights or claims to seek enforcement of the terms and conditions of this Release; (e) any rights to indemnification or to fiduciary liability insurance coverage under the Employment Agreement, the Company’s charter, bylaws or similar agreements; or (f) any rights or claims that cannot be released under applicable law, including Executive’s rights to file a charge with an administrative agency or to participate in an agency investigation, including but not limited to the right to file a charge with, or participate in an investigation or proceeding conducted by, the Equal Employment Opportunity Commission (such rights or claims under clauses (a) to (f), the “Reserved Rights”).
Executive agrees that the Company and its affiliates have no obligation to hire or rehire Executive at any time in the future. Executive forever releases, waives, and relinquishes any right or claim to be hired by, or to reinstatement with, the Company or its affiliates. Executive agrees that this Release is a lawful, non-discriminatory, and non-retaliatory basis upon which the Company and its affiliates may refuse to hire or rehire Executive.
3. Executive agrees that no promise or inducement to enter into this Release has been offered or made except as set forth herein and that Executive is entering into this Release without any threat or coercion and without reliance on any statement or representation made on behalf of the Company or its affiliates or by any person employed by or representing the Company or its affiliates, except for the written provisions and promises contained in this Release.
The parties agree that damages incurred as a result of a breach of this Release will be difficult to measure. It is, therefore, further agreed that, in addition to the remedy set forth herein or any other remedies, equitable relief will be available in the case of a breach of this Release.
4. The parties agree and acknowledge that this Release, and the settlement and termination of any asserted or unasserted claims against the Company Releasees pursuant to the Release, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Company Releasees to Executive.
No Other Claims; Representations.
(a) No Claims Have Been Filed. Executive represents and warrants that Executive has filed no claims, lawsuits, charges, grievances, or causes of action of any kind against the Company and/or any of the Company Releasees.
Review Period. Executive represents and warrants that he has been informed that he has the right to consider this Release for a period of forty-five (45) days from receipt, and Executive has signed on the date indicated below after concluding that this Release is satisfactory to Executive.
(b) Representations. Neither the Company, nor any of its directors, employees, or attorneys, has made any representations to Executive concerning the terms or effects of this Release other than those contained herein.
5. Executive acknowledges that Executive may later discover facts different from or in addition to those which Executive knows or believes to be true now, and Executive agrees that, in such event, this Release shall nevertheless remain effective in all respects, notwithstanding such different or additional facts or the discovery of those facts.
This Release may not be introduced in any legal or administrative proceeding, or other similar forum, except one concerning a breach of this Release (including, for the avoidance of doubt, with respect to the Reserved Rights).
6. If all or any part of this Release is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other portion of this Release. Any section or a part of a section declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of the section to the fullest extent possible while remaining lawful and valid.
This Release shall not be altered, amended, or modified except by written instrument executed by the Company and Executive. A waiver of any portion of this Release shall not be deemed a waiver of any other portion of this Release.
7. This Release may be signed in counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. A signature made on a faxed or electronically mailed copy of the Release or a signature transmitted by facsimile or electronic mail will have the same effect as an original signature.
This Release shall be governed by and construed and interpreted in accordance with the laws of the State of Virginia without regard to its choice of law principles.
8. Executive also understands that Executive has the right to revoke this Release within seven (7) days after execution, and that this Release will not become effective or enforceable until the revocation period has expired, by giving written notice by regular mail to the following:
Albemarle Corporation
Attention: General Counsel
4250 Congress Street, Suite 900
Charlotte, NC 28209
4250 Congress Street, Suite 900
Charlotte, NC 28209
(Signature Page To Follow)
IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties execute the foregoing Waiver and Release of Claims.
EXECUTIVE
___
Date:
COMPANY
By:
Title:
Date:
[Signature Page to Waiver and Release of Claims]
Exhibit 10.3
Albemarle Corporation
4250 Congress Street, Suite 900
Charlotte, NC 28209
4250 Congress Street, Suite 900
Charlotte, NC 28209
July 30, 2025
J. Kent Masters, Jr.
Dear Kent:
The Board of Directors (the “Board”) of Albemarle Corporation (the “Corporation”) recognizes that the possibility of a Change in Control of the Corporation exists, and the uncertainty and questions which it may raise among management may result in the departure or distraction of management personnel to the detriment of the Corporation.
The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Corporation’s management, including yourself, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from a possible Change in Control of the Corporation.
In order to induce you to remain in the employ of the Corporation and in consideration of your continued service to the Corporation pursuant to the Amended and Restated Executive Employment Agreement, between you and the Corporation, effective as of the date hereof (the “Employment Agreement”), the Corporation agrees that you shall receive certain benefits in the event of a Change in Control and certain severance benefits in the event your employment with the Corporation is terminated subsequent to or in anticipation of a Change in Control, as set forth in this Amended and Restated Severance Compensation Agreement (this “Agreement”).
This Agreement amends and restates in its entirety the previous Severance Compensation Agreement, entered into by you and the Corporation on March 15, 2023 (the “Prior Change in Control Agreement”).
1.Definitions.
a.“Cause” has the meaning set forth in the Employment Agreement as in effect on the date hereof.
b.“Change in Control” means the occurrence of any of the following events:
(i)any Person, or “group” as defined in section 13(d)(3) of the Securities Exchange Act of 1934, becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding securities of the Corporation that are entitled to vote generally for the election of the Corporation’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by the Corporation
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approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person or “group” becomes the Beneficial Owner of 20% or more, but less than 30%, of the Voting Securities, the Continuing Directors may determine, by a vote of at least two-thirds of the Continuing Directors, that the same does not constitute a Change in Control;
(ii)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 the Corporation’s board of directors, or any successor’s board of directors within two years of the last of such transactions; or
(iii)the shareholders of the Corporation approve a Business Combination, unless immediately following such Business Combination, (1) all or substantially all of the Persons who were the Beneficial Owners of the Voting Securities outstanding immediately prior to such Business Combination will Beneficially Own more than 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the Corporation resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns the Corporation through one or more Subsidiaries) in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (2) no Person (excluding any employee benefit plan or related trust of the Corporation or the Corporation resulting from such Business Combination) will Beneficially Own 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 Corporation resulting from such Business Combination, and (3) at least a majority of the members of the board of directors of the Corporation resulting from such Business Combination will be Continuing Directors.
(iv)For purposes of Paragraph 1.b. and other provisions of this Agreement, the following terms shall have the meanings set forth below:
(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”).
(B)“Beneficial Owner” means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities:
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(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 subparagraph 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 subparagraph (iii) of this definition) or disposing of any voting securities of the Corporation provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter of securities who acquires any securities of the Corporation through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act of 1933,
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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 the Corporation be deemed (1) the beneficial owner of any securities beneficially owned by another officer or director of the Corporation solely by reason of actions undertaken by such persons in their capacity as officers or directors of the Corporation; or (2) the beneficial owner of securities held of record by the trustee of any employee benefit plan of the Corporation or any Subsidiary of the Corporation for the benefit of any employee of the Corporation or any Subsidiary of the Corporation, 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.
(C)“Continuing Directors” means any member of the Corporation’s Board, while a member of that Board, and (i) who was a member of the Corporation’s Board prior to the date of this Agreement, or (ii) whose subsequent nomination for election or election to the Corporation’s Board was recommended or approved by a majority of the Continuing Directors, but in each case, excluding any member whose initial nomination or election was in connection with any actual or threatened proxy contest and/or a settlement with any activist investor.
(D)“Person” means any individual, firm, company, partnership or other entity.
(E)“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.
c.“Change in Control Period” means (i) the two-year period commencing on a Change in Control and (ii) solely in the event such Change in Control constitutes a “change in control event” within the meaning of Section 409A, subject to the consummation of such Change in Control, the 180-day period prior to the date of a Change in Control (such 180-day period, the “Pre-CIC Period”).
d.“Code” shall mean the Internal Revenue Code of 1986, as amended.
e.“Date of Termination” shall mean:
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(i)in case your employment is terminated for Total Disability, thirty (30) days after Notice of Termination is given (provided that you shall not have returned to the full-time performance of your duties during such thirty (30) day period), and
(ii)in all other cases, the date specified in the Notice of Termination (which shall not be less than thirty (30) nor more than sixty (60) days, respectively, from the date such Notice of Termination is given).
f.“Good Reason” has the meaning set forth in the Employment Agreement as in effect on the date hereof.
g.“Incentive Compensation Award” shall mean payment or payments under Incentive Compensation Plans.
h.“Incentive Compensation Plans” shall mean any variable compensation or other incentive compensation plans maintained by the Corporation, in which awards are paid in cash, stock or other property including, but not limited to: (i) the Albemarle Corporation 2017 Incentive Plan, as amended; (ii) any variable compensation plan; or (iii) any successor plan thereto.
i.“Non-Competition Period” means the three-year period following any termination of your employment with the Corporation.
j.“Normal Retirement Date” shall mean the first day of the calendar month next following the date on which you attain the age of 65.
k.“Notice of Termination” shall mean a written notice as provided in Paragraph 14 hereof.
l.“Total Disability” shall mean total physical or mental disability rendering you unable to perform the duties of your employment for a continuous period of six (6) months. Any question as to the existence of your Total Disability upon which you and the Corporation cannot agree shall be determined by a qualified physician not employed by the Corporation and selected by you (or, if you are unable to make such selection, it shall be made by any adult member of your immediate family), and approved by the Corporation (such approval not unreasonably withheld). The determination of such physician made in writing to the Corporation and to you shall be final and conclusive for all purposes of this Agreement.
2.Compensation Upon Termination. In connection with a Change in Control, you shall be entitled to the following benefits:
a.Termination Benefits. If your employment by the Corporation shall be terminated during the Change in Control Period, and under circumstances that would qualify as a “separation from service” under Section 409A, (a) by reason of your death or
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Total Disability after you have received a Notice of Termination by the Corporation other than for Cause, (b) by the Corporation other than (1) for Cause or (2) upon the expiration of the Term of Employment (as set forth in your Employment Agreement), or (c) by you for Good Reason, then you shall be entitled to the benefits provided below, without regard to any contrary provision of any plan:
(i)Accrued Payments. The Corporation, not later than the fifth (5th) day following the Date of Termination, shall (a) pay your full base salary and vacation pay accrued through the Date of Termination at the rate in effect at the time the Notice of Termination is given (or at the rate in effect immediately prior to a Change in Control, if such amounts were higher) and (b) reimburse you for any unreimbursed expenses pursuant to the Corporation’s expense reimbursement policy (clauses (a) and (b), together, the “Accrued Benefits”).
(ii)Accrued Annual Incentive Compensation. The Corporation shall pay you, not later than five (5) days following your Date of Termination, the amount of your accrued but unpaid annual Incentive Compensation which consists of the annual cash bonus (a “Prior Year Bonus”). If the Date of Termination is after the end of a Variable Compensation Year, but before such Incentive Compensation for said Variable Compensation Year has been paid, the Corporation shall pay you Incentive Compensation for that Variable Compensation Year based upon actual performance (including with respect to your applicable individual performance metric) as determined by the Corporation prior to the Change in Control in its sole discretion. If an applicable individual performance metric has not been determined as of the Date of Termination, it will be deemed achieved at target level of performance (and, in any event, with any subjective goals treated as attained at not less than target).
In addition, if the Date of Termination is other than the first day of a Variable Compensation Year, the Corporation shall pay you your annual Incentive Compensation for the Variable Compensation Year in which the Date of Termination occurs at the time the Corporation pays such amounts for such year to other eligible employees of the Corporation (no later than March 15th of the following year), in an amount equal to the Incentive Compensation for the year in which the Change in Control occurs determined based on the actual level of performance, multiplied by a fraction, the numerator of which is the total number of days which have elapsed in the current Variable Compensation Year to the Date of Termination, and the denominator of which is three hundred sixty-five (365) (such bonus, the “Prorated Bonus”).
If there is more than one annual Incentive Compensation Program, your accrued and target annual Incentive Compensation shall be calculated separately for each Program.
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For the purpose of this Paragraph 2.a.(ii), “Incentive Compensation Program” means any of the Incentive Compensation Plans defined in Paragraph 1.h and any other plan or program for the payment of annual incentive compensation, variable compensation, bonus, benefits or awards for which you were, or your position was, eligible to participate other than long term incentive equity awards that are addressed under Paragraph 3 of this Agreement; “Incentive Compensation” means any compensation, variable compensation, bonus, benefit or award paid or payable under an annual Incentive Compensation Program; and “Variable Compensation Year” means a calendar or fiscal plan year of an Incentive Compensation Program.
(iii)Insurance Coverage. If you timely elect COBRA coverage for yourself or your eligible dependents under the Corporation’s group medical, dental or vision plans, the Corporation shall pay 100% of the premiums for such coverage at no cost to you until the earliest of (i) the second anniversary of the termination of your employment, (ii) the date you become eligible for comparable coverage under plans under another employer’s policies and (iii) the date you become eligible for coverage under Medicare.
(iv)Retirement Benefits. The Supplemental Pension Benefit Credits made on your behalf under the Albemarle Corporation Executive Deferred Compensation Plan (“EDCP”) as well as all earnings accrued on such amounts, shall be immediately vested and non-forfeitable and shall be paid in accordance with the terms of the EDCP.
(v)Outplacement Counseling. The Corporation shall make available to you, at the Corporation’s expense, outplacement counseling. You may select the organization that will provide the outplacement counseling, however, the Corporation’s obligation to provide you benefits under this subparagraph (v) shall be limited to $25,000. This counseling must be used, if at all, no later than the end of the second calendar year after the year of your Date of Termination.
(vi)Financial Counseling. For each of the calendar year in which your Date of Termination occurs and the immediately following calendar year, the Corporation shall make available to you financial counseling services, which may include tax counseling services, and you may select the organization that will provide you with such services; provided, however, that (i) the Corporation’s obligation to reimburse or provide the benefits under this subparagraph (vi) shall be limited to an amount no greater than $12,500 for each such calendar year and (ii) in the event that your Date of Termination is less than 60 days before the end of the calendar year in which the Date of Termination occurs, then the availability of such benefits shall be available beginning January 1 of the calendar year following such Date of Termination.
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(vii)Severance Payment. The Corporation shall pay as severance pay to you, not later than the fifth (5th) day following the Release Effective Date (as defined below), a lump sum severance payment (the “Severance Payment”) equal to three (3) times the following:
(a) the greater of your annual base compensation which was payable to you by the Corporation immediately prior to the Date of Termination and your annual base compensation which was payable to you by the Corporation immediately prior to a Change in Control (not taking into account any reductions of annual base salary which would constitute Good Reason or were made in the six (6) months prior to the Date of Termination) whether or not such annual base compensation was includible in your gross income for federal income tax purposes; plus
(b) the greater of your target annual variable compensation that was in place immediately prior to a Change in Control (not taking into account any reductions of target annual variable compensation which would constitute Good Reason or made in the six (6) months prior to the Date of Termination) or your target annual variable compensation that was in place immediately prior to the Date of Termination (whether or not such award was includible in your gross income for federal income tax purposes).
The Severance Payment shall be reduced by the amount paid to you under Paragraph 7.b below.
Notwithstanding the foregoing, in the event the termination of employment described in this Paragraph 2.a occurs during the Pre-CIC Period, the amounts payable to you pursuant to this Agreement shall be made without duplication of (i.e., shall be reduced by) the amount of any payments or benefits paid or provided under Section 6(a) of the Employment Agreement, on or within thirty (30) days following the date of the Change in Control.
(viii)Reduction of Payments.
If the payments or benefits to which you will be entitled under this Agreement (referred to in this Paragraph as the “Payments”) would cause you to be liable for the federal excise tax levied on certain “excess parachute payments” under Code Section 4999 (“Excise Tax”), then the Payments shall be reduced (or repaid to the Corporation, if previously paid or provided) as provided below. In no event shall you be entitled to receive any kind of gross-up payment or Excise Tax reimbursement from the Corporation. For purposes of this Paragraph 2.a.(viii), the terms “excess parachute payment” and “parachute payment” will have the meanings assigned to them by Section 280G of the Code.
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If your Payments exceed 2.99 times your “Base Amount” (as defined in Code Section 280G), a “reduced payment amount” shall be calculated by reducing the Payments to the minimum extent necessary so that no portion of any Payment, as so reduced or repaid, constitutes an “excess parachute payment.” If it is determined that any Excise Tax is payable by you, you shall receive either (i) all Payments otherwise due to you or (ii) the reduced payment amount described in the preceding sentence, whichever will provide you with the greater after-tax economic benefit taking into account for these purposes any applicable Excise Tax and any applicable income and employment taxes at the highest marginal rate.
Whether Payments to you are to be reduced, pursuant to this Paragraph 2.a.(viii), and the extent to which they are to be so reduced, will be determined by the 280G Firm (as defined below) and the Corporation will notify you in writing of its determination. Any such notice shall describe in reasonable detail the basis of the 280G Firm’s determination. The Corporation will retain, at its expense, a nationally recognized accounting firm or compensation consultant selected by the Corporation and reasonably acceptable to you to review the matter (the “280G Firm”). Such 280G Firm shall meet with you and your representatives and the Corporation and its representatives and thereafter render its written opinion as to the extent, if any, that in such firm’s reasonable judgment the payments and benefits otherwise due to you hereunder must be reduced hereunder. The decision of such firm concerning the extent of any required reduction in such payments and benefits shall be final and binding on both you and the Corporation absent manifest error.
The Corporation and you shall cooperate in case of a potential change in ownership or control of the Corporation to consider alternatives to mitigate any Section 280G exposure, including the valuation of any noncompetition covenants and/or acceleration of incentive compensation, although the Corporation cannot guarantee any such alternatives will be available or approved by the Corporation and neither you nor the Corporation shall be obligated to enter into them.
(ix)No Duty to Mitigate. You shall not be required to mitigate the amount of any payment provided for in this Paragraph 2 by seeking other employment or otherwise, nor shall the amount of any payment or benefit hereunder be reduced by any compensation earned by you as the result of employment by another employer or by retirement benefits after the Date of Termination.
(x)Six Month Delay. If, as of the Date of Termination, you are considered a Specified Employee (as such term is defined in Section 409A), any payments or benefits due upon, or within the six month period following and due to, a termination of your employment that constitutes a “deferral of compensation” within the meaning of Section 409A and which do not
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otherwise qualify under the exemptions under Treas. Reg. Section 1.409A-1, shall be paid or provided to you in a lump sum on the earlier of (i) the first day of the month following the six month anniversary of your separation from service (as such term is defined in Section 409A) for any reason other than death, and (ii) the date of your death, and any remaining payments and benefits shall be paid or provided in accordance with the normal payment dates specified for such payment or benefit.
(xi)Relocation. The Corporation shall reimburse you for your expenses incurred in connection with relocating from your Charlotte, North Carolina residence to another residence within the United States after your termination of employment, provided such relocation occurs by the end of the second year after the year that contains your Date of Termination. Expenses covered under this Paragraph shall not include any expenses incurred in connection with the sale of your residence purchased in Charlotte, North Carolina other than any real estate closing costs and commissions owed in connection with selling the Charlotte residence. For purposes of clarification only, the Corporation shall have no obligation to purchase your residence in Charlotte. Except as otherwise provided in this subparagraph (xi), the benefits provided for hereunder shall be in accordance with the Corporation’s U.S. Domestic Relocation Policy. The benefits described in this subparagraph (xi) must be used, if at all, no later than the end of the second year after the year that contains your Date of Termination, and the reimbursement of expenses must be paid to you no later than the end of the third year after the year that contains the Date of Termination.
b.Payments While Disabled. During any period prior to the Date of Termination and during the Change in Control Period (other than the Pre-CIC Period) that you are unable to perform your full-time duties with the Corporation, whether as a result of your Total Disability or as a result of a physical or mental disability that is not total or is not permanent and therefore is not a Total Disability, you shall continue to receive your base salary at the rate in effect at the commencement of any such period, together with all other compensation and benefits that are payable or provided under the Corporation’s benefit plans, including its disability plans. After the Date of Termination, your benefits shall be determined in accordance with the Corporation’s benefits, insurance and other applicable programs. The compensation and benefits, other than salary, payable or provided pursuant to this Paragraph 2.b shall be (x) the greater of (1) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect immediately prior to a Change in Control and (2) the amounts computed under the disability benefit plans, insurance and other applicable programs in effect at the time the compensation and benefits are paid, (y) the Prior Year Bonus and (z) the Prorated Bonus for the year of termination.
c.Payments if Termination by the Corporation for Cause, or by You Other Than With Good Reason. If your employment is terminated by the Corporation for
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Cause or by you other than with Good Reason, the Corporation shall pay you (x) your accrued but unpaid base salary and vacation pay through the Date of Termination, at the rate in effect at the time Notice of Termination is given and (y) solely upon a resignation by you other than with Good Reason, the Prior Year Bonus. You shall receive any payment due under this Paragraph 2.c on the Corporation’s first regular payroll date following the Date of Termination. Thereafter the Corporation shall have no further obligation to you under this Agreement.
d.After Death. If your employment shall be terminated by reason of your death, your benefits shall be determined in accordance with the Corporation’s benefits and insurance programs then in effect except that if your death occurs after the execution of a definitive agreement that results in a Change in Control, then your beneficiary shall be entitled to the benefits under this Agreement as if the Corporation issued you a Notice of Termination terminating your employment without Cause thirty (30) days after a Change in Control. The compensation and benefits, other than the benefits determined in accordance with the immediately preceding sentence, payable or provided pursuant to this Paragraph 2.d shall consist of (x) the Prior Year Bonus and (y) the Prorated Bonus in the year of termination.
e.Termination by the Corporation without Cause upon Expiration of the Term of Employment. If, during the Change in Control Period (other than the Pre-CIC Period), your employment is terminated by the Corporation without Cause upon expiration of the Term of Employment, then you shall be entitled to the benefits provided below:
(i)The Corporation shall pay you the Accrued Benefits.
(ii)If the Date of Termination is on or after the end of a compensation year under the AIP (as defined in the Employment Agreement), but before the AIP bonuses for such AIP year have been paid, the Corporation shall pay you an AIP bonus for such AIP year based upon the calculated company score and your individual performance modifier set by the Corporation at the time the Corporation sets the AIP bonus amounts for such year for all other eligible employees of the Corporation (with any subjective individual goals being treated as attained at not less than target).
(iii)Your outstanding equity awards under the LTIP (as defined in your Employment Agreement) shall be treated in accordance with the terms of your Employment Agreement and the applicable Notices of Award for such awards.
(iv)The Corporation shall reimburse you for your expenses incurred in connection with relocating from your Charlotte, North Carolina residence to another residence within the United States after your termination of employment. Expenses covered under this subparagraph (iv) shall not
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include any expenses incurred in connection with your sale of a residence purchased in Charlotte, North Carolina other than any real estate closing costs and commissions owed in connection with selling the Charlotte residence. For purposes of clarification only, the Corporation shall have no obligation to purchase your residence in Charlotte. Except as otherwise provided in this subparagraph (iv), the benefits provided for hereunder shall be in accordance with the Corporation’s U.S. Domestic Relocation Policy. The benefits described in this subparagraph (iv) must be used, if at all, no later than the end of the second year after the year that contains the Date of Termination, and the reimbursement of expenses must be paid to you no later than the end of the third year after the year that contains the Date of Termination.
(v)For each of the calendar year in which your Date of Termination occurs and the immediately following calendar year, the Corporation shall make available to you financial counseling services, which may include tax counseling services, and you may select the organization that will provide you with such services; provided, however, that (i) the Corporation’s obligation to reimburse or provide the benefits under this subparagraph (vi) shall be limited to an amount no greater than $12,500 for each such calendar year and (ii) in the event that your Date of Termination is less than 60 days before the end of the calendar year in which the Date of Termination occurs, then the availability of such benefits shall be available beginning January 1 of the calendar year following such Date of Termination.
Payments and benefits under this Section 2 are intended to be paid or provided, as the case may be, without duplication of amounts paid or benefits provided to you under your Employment Agreement. In the event that you received payments or benefits under the corresponding provisions of your Employment Agreement as a result of a termination by the Corporation without Cause or by you with Good Reason for periods prior to the a Change in Control, then the forgoing amounts will be reduced accordingly, with any additional amounts payable hereunder paid in full on or within five (5) days of the Change in Control, and without the requirement of execute a new Release of claims.
3.Treatment of Long Term Incentive Plan Awards Upon a Change in Control. Upon a Change in Control, any outstanding long term incentive awards granted under one or more of the Incentive Compensation Plans shall be treated in accordance with the terms of the Notices granting such awards and the vesting provisions with regard to such awards set forth in your Employment Agreement. In the event a Notice of Award does not provide for how the award will be treated upon a Change in Control, the provisions of the applicable Plan shall govern.
4.Term of Agreement. This Agreement shall commence on the date hereof and shall continue in effect through March 30, 2027; provided, however, that commencing on March 31, 2027 and each anniversary of such date thereafter, the term of this Agreement
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shall automatically be extended for one additional year unless, not later than December 31 of the preceding year, the Corporation or you shall have given notice that it or you do not wish to extend this Agreement. Notwithstanding any such notice by the Corporation or you not to extend the Agreement, if a Change in Control shall have occurred (or a definitive transaction agreement, the consummation of which would result in a Change in Control, shall have been signed) prior to such termination of this Agreement, the attempted termination of this Agreement shall be deemed ineffective and this Agreement shall continue in full force and effect. In any event, the term of this Agreement shall expire on the second (2nd) anniversary of the date of the Change in Control. In addition, this Agreement shall terminate if your employment is terminated by you with Good Reason or by the Corporation without Cause prior to a Change in Control and no Change in Control occurs within 180 days following such termination.
5.Successors; Binding Agreement.
a.Successors of the Corporation. The Corporation will require any Successor to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree, by an agreement in form and substance satisfactory to you, to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. Failure of the Corporation to obtain such assent at least five business days prior to the time a person becomes a Successor (or where the Corporation does not have at least five business days advance notice that a person may become a Successor, within three business days after having notice that such person may become or has become a Successor) shall constitute Good Reason by you and, if a Change in Control has occurred or thereafter occurs, shall entitle you immediately to the benefits provided in Paragraph 2.a hereof upon delivery by you of a Notice of Termination which the Corporation, by executing this Agreement, hereby assents to. For purposes of this Agreement, “Successor” shall mean any person that purchases all or substantially all of the assets of the Corporation or the Surviving Corporation (and Parent Corporation, if applicable) or obtains or succeeds to, or has the practical ability to control (either immediately or with the passage of time), the Corporation’s business directly, by merger or consolidation, or indirectly, by purchase of voting securities of the Corporation or by acquisition of rights to vote voting securities of the Corporation or otherwise, including but not limited to any person or group that acquires the beneficial ownership or voting rights described in Paragraph 1.b.(i).
b.Your Successor. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devises and legatees. If you should die following your Date of Termination while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate.
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6.Confidentiality. You acknowledge and agree that the covenants contained in Section 5 of the Employment Agreement are incorporated herein by reference (such covenants, the “Confidentiality Covenants”).
7.Restrictive Covenants; Consideration.
a.You acknowledge and agree that the covenants contained in Section 8 of the Employment Agreement are incorporated herein by reference (such covenants, the “Restrictive Covenants”).
b.In consideration for your agreement to the covenants incorporated by reference in Paragraph 7.a, the Corporation shall pay you, not later than the fifth (5th) day following the Release Effective Date, the amount determined to be the value of your agreement to the Restrictive Covenants during the Non-Competition Period (the “Non-Competition Payment”); provided that, for the avoidance of doubt, the Non-Competition Payment shall not be a value greater than the Severance Payment. The value of your Non-Competition Payment for these purposes shall be determined by an unrelated third party in the business of valuing non-competition payments (the “Valuation Firm”). All costs for obtaining and defending the valuation shall be borne by the Corporation.
The payment made to you pursuant to this Paragraph 7 is intended to constitute reasonable compensation for purposes of the Code. You shall notify the Corporation in writing of any written claim, objection, litigation, assessment, etc. by any federal, state, or local taxing authority regarding the Non-Competition Payment and its treatment as reasonable compensation under the Code. The notification shall apprise the Corporation of the nature of such claim and shall include a copy of any written correspondence from the relevant taxing authority. Such notification shall be given as soon as practicable but no later than thirty (30) business days after you actually receive notice in writing of such claim. The Corporation shall be responsible for hiring qualified legal counsel and other professionals acceptable to you to defend any challenge and pursue litigation regarding the Non-Competition Payment’s status as reasonable compensation under the Code until the matter is concluded. Any expenditure by the Corporation in any year to defend against the claim shall not have any impact on the expenses the Corporation may incur in defending against the claim in any subsequent year. The Corporation shall pay any expenses related to defense of the claim no later than the year after the year the expense was incurred. The obligation of the Corporation to defend against any claim may not be subject to liquidation or exchanged for any other benefit. The Corporation’s obligations under this Paragraph 7 shall be performed by the Corporation in good faith.
8.Remedies.
a.You acknowledge that the restrictions contained in the Confidentiality Covenants and the Restrictive Covenants above are necessary to protect the Corporation’s confidential and proprietary information, trade secrets, intellectual property and
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other legally protectable business information; and you further acknowledge and agree that each and every restriction in the Confidentiality Covenants and the Restrictive Covenants is reasonable in all respects, including duration, territory and scope of activity.
b.You agree that the restrictions contained in the Confidentiality Covenants and the Restrictive Covenants above shall be construed as separate agreements independent of any other provision of this Agreement or any other agreement between you and the Corporation. To the extent that any restriction of the Confidentiality Covenants and the Restrictive Covenants is determined by any court of competent jurisdiction to be unenforceable, you and the Corporation expressly agree and intend that such restriction be reduced in scope to the extent permitted by law, and that such remaining restriction be enforced, and that the other restrictions of the Confidentiality Covenants and the Restrictive Covenants remain in full force and effect.
c.You agree that the existence of any claim or cause of action by you against the Corporation, under this Agreement or otherwise, shall not constitute a defense to the enforcement by the Corporation of the covenants and restrictions in the Confidentiality Covenants and the Restrictive Covenants.
d.You acknowledge and agree that the injury the Corporation will suffer in the event of the breach by you of any of the Confidentiality Covenants and the Restrictive Covenants will cause the Corporation irreparable injury that cannot be adequately ascertained or compensated by monetary damages alone. Therefore, you agree that the Corporation, without limiting any other legal or equitable remedies available to it, shall be entitled to obtain equitable relief by injunction or otherwise, without the posting of any bond, from any court of competent jurisdiction, including, without limitation, injunctive relief to prevent your failure to comply with the terms and conditions the Confidentiality Covenants and the Restrictive Covenants. The periods of time referenced in each of the Restrictive Covenants shall be tolled on a day-for-day basis for each day during which you violate the Restrictive Covenants in any respect, so that you are restricted from engaging in the activities prohibited by the Restrictive Covenants for the full time period.
9.Notice to Corporation to Cure. In the event that you believe that you have a Good Reason, you shall notify the Corporation in writing of such fact and the reasons therefore no later than 90 days after your knowledge that the relevant event has occurred. The Corporation may within thirty (30) days after your notice, elect to take such steps that would be necessary so that you would no longer have a Good Reason. If the Corporation has not cured the basis for Good Reason, you may terminate employment for Good Reason within sixty (60) days following the end of the cure period. Failure by you to satisfy the requirements of the first sentence of this Paragraph 9 will result in there not being any Good Reason for purposes of this Agreement. Conversely, in the event that the Corporation believes that you have engaged in conduct constituting Cause or any material breach of the terms and conditions of the Confidentiality Covenants and the Restrictive
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Covenants, the Corporation shall notify you in writing of such fact and the reasons therefore no later than 90 days after the Corporation’s knowledge that relevant event has occurred. You may within thirty (30) days after your notice, elect to take such steps that would be necessary so that Cause for termination of your employment by the Corporation would no longer exist. Failure of the Corporation to satisfy the requirements of the fifth sentence of this Paragraph 9 will result in there not being any Cause for termination of your employment by the Corporation for purposes of this Agreement.
10.Relationship to Other Agreements. To the extent that any provision of any other agreement between the Corporation and you shall limit, qualify or be inconsistent with any provision of this Agreement, then for purposes of this Agreement, while the same shall remain in force, the provision of this Agreement shall control and such provision of such other agreement, including the Prior Change in Control Agreement, shall be deemed to have been superseded, and to be of no force or effect, as if such other agreement had been formally amended to the extent necessary to accomplish such purpose. Notwithstanding the foregoing, nothing in this Agreement shall supersede any provision of the Employment Agreement except as expressly provided in the Employment Agreement.
11.Nature of Payments. All payments to you under this Agreement shall be considered severance payments in consideration of your past service to the Corporation.
12.Validity. If any provision or term (or part thereof) of this Agreement shall be, or be found by any authority or court of competent jurisdiction to be, invalid, illegal or unenforceable, such invalidity, illegality or unenforceability shall not affect any other provision or term (or part thereof) in that jurisdiction or the whole of the Agreement in any other jurisdiction, all of which shall remain in full force and effect.
13.Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.
14.Notice. Any purported termination of your employment by the Corporation or by you following a Change in Control shall be communicated to the other party by a Notice of Termination. A Notice of Termination shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to the respective addresses set forth on the first page of this Agreement, provided that all notices to the Corporation shall be directed to the attention of the Board of the Corporation with a copy to the Secretary and General Counsel of the Corporation or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.
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15.Fees and Expenses. The Corporation shall pay all legal fees and related expenses incurred by you: (i) as a result of your termination following a Change in Control, (ii) in seeking to obtain or enforce any right or benefit provided by this Agreement (including all fees and expenses, if any, incurred in contesting or disputing any such termination or incurred by you in seeking advice in connection therewith), (iii) in making the determinations under Paragraph 2.a.(viii), (iv) in seeking advice to determine whether you have a Good Reason and providing the notice to the Corporation under Paragraph 9, (v) and contesting any claim by the Corporation under Paragraph 8; provided that such fees are incurred no later than the end of the second calendar year after the year of your Date of Termination. The Corporation shall pay or reimburse you for the reasonable cost of your attorney’s fees incurred in the negotiation of this Agreement and related agreements, within thirty (30) days of receipt of documentation reasonably satisfactory to the Corporation of the incurrence of such attorney’s fees.
16.Release. In order to receive payment of the amounts under Paragraph 2.a.(ii), (iii), (iv), (v), (vi) and (vii) and Paragraph 2.g.(ii) and (iv), you shall execute and deliver to the Corporation a General Release in the form reasonably attached hereto as Exhibit A. Such General Release must be executed and become effective and irrevocable within the sixty (60)-day period following your termination (such effective date, the “Release Effective Date”), provided, however, that to the extent any amounts payable under Paragraph 2.a.(ii), (iii), (iv), (v), (vi) or (vii) or Paragraph 2.g.(ii) or (iv) constitute deferred compensation for purposes of Section 409A, and the sixty (60)-day period referred to herein shall commence in one tax year and end in the subsequent tax year, the payments described in this Paragraph 16 shall be made solely in the subsequent tax year.
17.Survival. The respective obligations of, and benefits afforded to, the Corporation and you as provided in Paragraphs 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 15 and 16 of this Agreement shall survive termination of this Agreement.
18.Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by you and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not expressly set forth in this Agreement.
19.Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Virginia.
20.Section 409A Compliance.
a.The intent of the parties is that payments and benefits under this letter are either exempt from or comply with Section 409A of the Internal Revenue Code (“Section 409A”), and this letter will be interpreted accordingly. If payments
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under this Agreement constitute “deferred compensation” within the meaning of Section 409A of the Code, it is the intention and belief of the Corporation that, to the extent required to avoid taxes or penalties under Section 409A of the Code, the payments provided under this Agreement comply in all respects with Section 409A of the Code, and all payments under this Agreement shall be construed and interpreted in a manner consistent with the requirements for avoiding taxes and penalties under Section 409A of the Code. To the extent that the Corporation and you in good faith determines that any provision of this Agreement would cause you to incur any additional tax or interest under Section 409A, the Corporation and you shall reform such provision to attempt to comply with or be exempt from Section 409A with your consent. To the extent that any provision hereof is modified in order to comply with Section 409A, such modification shall be made in good faith and shall, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Corporation without violating the provisions of Section 409A.
In no event may you, directly or indirectly, designate the calendar year of any payment to be made under this Agreement or otherwise which constitutes a “deferral of compensation” within the meaning of Section 409A. References in this Agreement to a “termination,” “termination of employment” or similar terms shall mean “separation from service” (within the meaning of Section 409A of the Code).
b.If, at the time of your “separation from service” (within the meaning of Section 409A of the Code), (i) you are a “specified employee” (within the meaning of Section 409A of the Code and using the identification methodology selected by the Corporation from time to time) and (ii) the Corporation shall make a good faith determination that an amount payable pursuant to this Agreement constitutes deferred compensation (within the meaning of Section 409A of the Code) the payment of which is required to be delayed pursuant to the six-month delay rule set forth in Section 409A of the Code in order to avoid taxes or penalties under Section 409A of the Code, then the Corporation shall not pay such amount on the otherwise scheduled payment date but shall instead pay it on the first business day after such six-month period (the “Delayed Payment Date”). Except as otherwise determined by the Corporation in its sole discretion, such amount shall be paid without interest.
c.In the event that all or any of the health care benefits to be provided pursuant to this Agreement as a result of your “separation from service” constitute “deferred compensation” under Section 409A, the Corporation shall provide for such benefits constituting such deferred compensation in a manner that complies with Section 409A. To the extent necessary to comply with Section 409A of the Code, the Corporation shall determine the health care premium cost necessary to provide such benefits constituting deferred compensation for the applicable coverage period and shall pay such premium cost that becomes due and payable during the applicable coverage period on the applicable due date for such premiums; provided, however, that if you are a “specified employee”, the Corporation shall
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not pay any such premium cost until the Delayed Payment Date. If the Corporation’s payment pursuant to the previous sentence is subject to a Delayed Payment Date, you shall pay the premium cost otherwise payable by the Corporation prior to the Delayed Payment Date, and on the Delayed Payment Date the Corporation shall reimburse you for such Corporation premium cost paid by you and shall pay the balance of the Corporation’s premium cost necessary to provide such benefit coverage for the remainder of the applicable coverage period as and when it becomes due and payable over the applicable period.
d.To the extent that any reimbursements payable to you pursuant to this Agreement are subject to the provisions of Section 409A, such reimbursements shall be paid to you no later than December 31 of the year following the year in which the cost was incurred; the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year; and your right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.
e.Your right to receive any installment payments payable hereunder shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment for purposes of Section 409A.
f.The vesting of any stock-based compensation awards which constitute Section 409A “deferred compensation” and are held by you, if you are a Specified Employee, shall be accelerated in accordance with this Agreement to the extent applicable; provided, however, that the payment in settlement of any such awards shall occur on the Delayed Payment Date to the extent required by Section 409A
21.Amendment. No amendment to this Agreement shall be effective unless in writing and signed by both you and the Corporation.
22.Headings; Construction. The headings used in this Agreement have been inserted for convenience of reference only and do not define or limit the provisions hereof. Any Attachments to this Agreement are incorporated herein by reference and shall be deemed a part of it.
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If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Corporation the enclosed copy of this letter which will then constitute our agreement on this subject.
Sincerely,
| ALBEMARLE CORPORATION | |||||
| By | /s/ Melissa H. Anderson | ||||
| Name: | Melissa H. Anderson EVP, Chief People & Transformation Officer | ||||
Agreed to this 30th day
of July, 2025
of July, 2025
/s/ J. Kent Masters, Jr.
J. Kent Masters, Jr.
J. Kent Masters, Jr.
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EXHIBIT A
FORM OF RELEASE
This WAIVER AND RELEASE OF CLAIMS (this “Release”) is entered into on [●], by and between Albemarle Corporation, a Virginia corporation (the “Company”), and J. Kent Masters (“Executive”).
WHEREAS, the Company and Executive entered into the Amended and Restated Severance Compensation Agreement, dated as of July 30, 2025 (the “Severance Agreement”) pursuant to which Executive is eligible for payment of the amounts and benefits described in Section 2 of the Severance Agreement (collectively, the “Severance”), and
WHEREAS, defined terms used but not defined herein shall have the meanings given thereto in the Severance Agreement.
NOW, THEREFORE, in consideration of such payments due to Executive under the Severance Agreement, the Company and Executive hereby agree as follows:
1.Waiver and Release. For valuable consideration from the Company, receipt of which is hereby acknowledged, Executive waives, releases, and forever discharges the Company and its current and former parents, subsidiaries, affiliates, divisions, shareholders, owners, members, officers, directors, attorneys, agents, employees, insurers, successors, and assigns, and the Company’s parents’, subsidiaries’, and affiliates’ divisions, shareholders, owners, members, officers, directors, attorneys, agents, employees, insurers, successors, and assigns (collectively, referred to as the “Company Releasees”) from any and all rights, causes of action, claims or demands, whether express or implied, known or unknown, that arise on or before the date that Executive executes this Release, which Executive has or may have against the Company and/or the Company Releasees in connection with Executive’s employment or the termination thereof, including, without limitation, any rights, causes of action, claims, or demands relating to or arising out of the following:
a.anti-discrimination, anti-harassment, and anti-retaliation laws, such as the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, and Executive Order 11141, which prohibit employment discrimination based on age; Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866 (42 U.S.C. § 1981), the Equal Pay Act, and Executive Order 11246, which prohibit discrimination based on race, color, national origin, religion, or sex (including sexual harassment or sexual abuse); the Genetic Information Nondiscrimination Act, which prohibits discrimination on the basis of genetic information; the Americans With Disabilities Act and §§ 503 and 504 of the Rehabilitation Act of 1973, which prohibit discrimination based on disability; and any other federal, state, or local laws prohibiting employment or wage discrimination;
other employment laws, such as the Worker Adjustment and Retraining Notification Act, which requires that advance notice be given of certain workforce reductions; the Executive Retirement Income Security Act of 1974, which, among other things, protects
employee benefits; the Family and Medical Leave Act, which requires employers to provide leaves of absence under certain circumstances; state laws which regulate wage and hour matters, including all forms of compensation, vacation pay, sick pay, compensatory time, overtime, commissions, bonuses, and meal and break periods; state family, medical, and military leave laws, which require employers to provide leaves of absence under certain circumstances; the Sarbanes Oxley Act; and any other federal, state, or local laws relating to employment;
b.tort, contract, and quasi-contract claims, such as claims for wrongful discharge, physical or personal injury, sexual harassment or sexual abuse, intentional or negligent infliction of emotional distress, fraud, fraud in the inducement, negligent misrepresentation, defamation, invasion of privacy, interference with contract or with prospective economic advantage, breach of express or implied contract, unjust enrichment, promissory estoppel, breach of covenants of good faith and fair dealing, negligent hiring, negligent supervision, negligent retention, and similar or related claims;
all remedies of any type, including, without limitation, damages and injunctive relief, in any action that may be brought on Executive’s behalf against the Company and/or the Company Releasees by any government agency or other entity or person; and
c.subject to Section 2 of this Release, any compensation or benefits, whether provided for under the Severance Agreement or otherwise.
Executive understands that Executive is releasing claims about which Executive may not know anything at the time Executive executes this Release. Executive acknowledges that it is Executive’s intent to release such unknown claims, even though Executive recognizes that someday Executive might learn new facts relating to Executive’s employment or learn that some or all of the facts Executive currently believes to be true are untrue, and even though Executive might then regret having signed this Release. Nevertheless, Executive acknowledges Executive’s awareness of that risk and agrees that this Release shall remain effective in all respects in any such case. Executive expressly waives all rights Executive might have under any laws intended to protect Executive from waiving unknown claims except as provided otherwise in this Release.
2.Excluded Claims. Notwithstanding anything to the contrary in this Release, this Release, including the waiver and release contained herein, shall not include, adversely affect, alter or extinguish, in each case, (a) any rights of Executive as a shareholder with respect to any shares of Company common stock owned by Executive or as an equity-award or unit award holder with respect to shares of Company common stock in accordance with the terms of the applicable award agreement (as amended and/or restated); (b) awards to Executive from or by a government agency for providing information or any rights or claims that may arise after the date on which Executive executes this Release; (c) any rights or claims for the Severance or to enforce the Severance Agreement (including all rights to accrued benefits) in accordance with its terms; (d) any rights or claims to seek enforcement of the terms and conditions of this Release; (e) any rights to indemnification or to fiduciary liability insurance coverage under the Severance Agreement, the Company’s charter, bylaws or similar agreements; or (f) any rights or claims that cannot be released under applicable law, including Executive’s rights to file a charge with an administrative agency or to participate in an agency investigation, including but not limited to the
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right to file a charge with, or participate in an investigation or proceeding conducted by, the Equal Employment Opportunity Commission (such rights or claims under clauses (a) to (f), the “Reserved Rights”).
Executive agrees that the Company and its affiliates have no obligation to hire or rehire Executive at any time in the future. Executive forever releases, waives, and relinquishes any right or claim to be hired by, or to reinstatement with, the Company or its affiliates. Executive agrees that this Release is a lawful, non-discriminatory, and non-retaliatory basis upon which the Company and its affiliates may refuse to hire or rehire Executive.
3.Executive agrees that no promise or inducement to enter into this Release has been offered or made except as set forth herein and that Executive is entering into this Release without any threat or coercion and without reliance on any statement or representation made on behalf of the Company or its affiliates or by any person employed by or representing the Company or its affiliates, except for the written provisions and promises contained in this Release.
The parties agree that damages incurred as a result of a breach of this Release will be difficult to measure. It is, therefore, further agreed that, in addition to the remedy set forth herein or any other remedies, equitable relief will be available in the case of a breach of this Release.
4.The parties agree and acknowledge that this Release, and the settlement and termination of any asserted or unasserted claims against the Company Releasees pursuant to the Release, are not and shall not be construed to be an admission of any violation of any federal, state or local statute or regulation, or of any duty owed by any of the Company Releasees to Executive.
No Other Claims; Representations.
a.No Claims Have Been Filed. Executive represents and warrants that Executive has filed no claims, lawsuits, charges, grievances, or causes of action of any kind against the Company and/or any of the Company Releasees.
Review Period. Executive represents and warrants that he has been informed that he has the right to consider this Release for a period of forty-five (45) days from receipt, and Executive has signed on the date indicated below after concluding that this Release is satisfactory to Executive.
b.Representations. Neither the Company, nor any of its directors, employees, or attorneys, has made any representations to Executive concerning the terms or effects of this Release other than those contained herein.
5.Executive acknowledges that Executive may later discover facts different from or in addition to those which Executive knows or believes to be true now, and Executive agrees that, in such event, this Release shall nevertheless remain effective in all respects, notwithstanding such different or additional facts or the discovery of those facts.
This Release may not be introduced in any legal or administrative proceeding, or other similar forum, except one concerning a breach of this Release (including, for the avoidance of doubt, with respect to the Reserved Rights).
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6.If all or any part of this Release is declared by any court or governmental authority to be unlawful or invalid, such unlawfulness or invalidity shall not invalidate any other portion of this Release. Any section or a part of a section declared to be unlawful or invalid shall, if possible, be construed in a manner which will give effect to the terms of the section to the fullest extent possible while remaining lawful and valid.
This Release shall not be altered, amended, or modified except by written instrument executed by the Company and Executive. A waiver of any portion of this Release shall not be deemed a waiver of any other portion of this Release.
7.This Release may be signed in counterparts, each of which shall be deemed an original but all of which, taken together, shall constitute one and the same instrument. A signature made on a faxed or electronically mailed copy of the Release or a signature transmitted by facsimile or electronic mail will have the same effect as an original signature.
This Release shall be governed by and construed and interpreted in accordance with the laws of the State of Virginia without regard to its choice of law principles.
8.Executive also understands that Executive has the right to revoke this Release within seven (7) days after execution, and that this Release will not become effective or enforceable until the revocation period has expired, by giving written notice by regular mail to the following:
Albemarle Corporation
Attention: General Counsel
4250 Congress Street, Suite 900
Charlotte, NC 28209
4250 Congress Street, Suite 900
Charlotte, NC 28209
(Signature Page To Follow)
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IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties execute the foregoing Waiver and Release of Claims.
EXECUTIVE
Date:
COMPANY
By:
Title:
Date:
[Signature Page to Waiver and Release of Claims]
Exhibit 10.4
KETJEN CORPORATION
AMENDED AND RESTATED CUMULATIVE FREE CASH FLOW INCENTIVE PLAN
Set forth below are the terms and conditions of the Ketjen Corporation Amended and Restated Cumulative Free Cash Flow Incentive Plan (the “CFCF Plan”).
| Certain Definitions: | “Administrator” means the Executive Compensation and Talent Development Committee of the Board or a subcommittee thereof. “Award” has the meaning set forth in the applicable Participant’s Award Letter. “Award Letter” means an individual agreement granting a Participant an Award under the CFCF Plan. “Award Percentage” has the meaning set forth in the applicable Participant’s Award Letter. For the avoidance of doubt, a Participant’s Award Percentage may differ for each Plan Year. “Beneficial Owner” or “Beneficial Ownership” has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. “Board” means the Board of Directors of Parent. “Cause” means, unless otherwise specified in an applicable employment agreement or award agreement between Parent (or any subsidiary thereof) and a Participant, with respect to a Participant, as determined by the Administrator in its sole discretion: (a)Willful failure to substantially perform his or her duties as an employee (for reasons other than physical or mental illness) after reasonable notice to the Participant of that failure; (b)Misconduct that materially injures Parent or any subsidiary or affiliate thereof; (c)Conviction of, or entering into a plea of nolo contendere to, a felony; or (d)Breach of any written covenant or agreement with Parent or any subsidiary or affiliate thereof. “Code” means the U.S. Internal Revenue Code of 1986 and all treasury regulations thereunder, as amended from time to time. “Company” means Ketjen Corporation. “Cumulative FCF” (or “CFCF”) means, with respect to any fiscal year, the sum of the Free Cash Flow for such fiscal year and each prior fiscal year beginning with the 2023 fiscal year. “Disability” means a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code. “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended. “Free Cash Flow” (or “FCF”) means, with respect to any fiscal year, as applicable, (i) the operating cash flow of the Company (or the Catalysts business of Parent) reported in Parent’s annual report on Form 10-K for such fiscal year or (ii) the projected operating cash flow of the Company (or the Catalysts business of Parent) for such fiscal year, as determined by the Administrator in its sole discretion, in either case, adjusted for capital expenditures and pension contributions, as determined by the Administrator in its sole discretion. For purposes of determining FCF, net value of Amsterdam (AMS) land (net of remediation or other costs to sell or make ready to sell), as reasonably determined by the Administrator in its sole discretion, will be excluded. “IPO” means (i) the first underwritten public offering of any equity securities of the Company or any successor entity pursuant to an effective registration statement filed under the Securities Act, (ii) any transaction (including a “direct listing” transaction) pursuant to which the Company or any successor entity first becomes subject to the periodic reporting requirements of Section 13 or 15(d) of the Exchange Act or (iii) an acquisition of the Company or any successor entity by, or consolidation, amalgamation, merger, reorganization or other business combination involving the Company or any successor entity with or into, a special purpose acquisition company that is publicly listed on a national or foreign securities exchange and that does not conduct any material business or maintain any material assets other than cash or an affiliate of such special purpose acquisition company. “Other Corporate Transaction” means any spin-off, split-off or extraordinary dividend distribution in respect of the Company’s equity securities, or any exchange of the Company’s equity securities, or any similar, unusual or extraordinary corporate transaction in respect of the Company’s equity securities. The determination of whether any Other Corporate Transaction constitutes a Transaction will be determined by the Administrator in its sole discretion. “Parent” means Albemarle Corporation, a Virginia corporation, and any successor thereto. “Parent Change of Control” means the occurrence of any of the following events: (i)any Person becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding securities of Parent that are entitled to vote generally for the election of Parent’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by Parent approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person becomes the Beneficial Owner of 20% or more, and less than 30%, of the Voting Securities, the Continuing Directors (as defined below) may determine, by a vote of a least two-thirds of the Continuing Directors, that the same does not constitute a Parent Change of Control; (ii)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 the Board, or any successor’s board of directors, within two years of the last of such transactions; (iii)the shareholders of Parent approve a Business Combination and such Business Combination is consummated, unless immediately following such Business Combination, (A) 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 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of Parent resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns Parent through one or more subsidiaries) in substantially the same portions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (B) no Person (excluding any employee benefit plan or related trust of Parent or Parent 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 Parent resulting from such Business Combination, and (C) at least a majority of the members of the board of directors of Parent resulting from such Business Combination are Continuing Directors. For purposes of this “Parent Change of Control”, the following terms have the meanings set forth below: (A)“affiliate” or “associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. (B)Beneficial Owner means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities: 1)that such Person or any of such Person’s affiliates or associates owns, directly or indirectly; 2)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; 3)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: (x) 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 (y) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or 4)that are beneficially owned, directly or indirectly, by any other Person (or any affiliate or associates thereof) with which 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 3) of this definition) or disposing of any voting securities of Parent provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter or securities who acquires any securities of Parent through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act, 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 Parent be deemed (x) the beneficial owner of any securities beneficially owned by another officer or director of Parent solely by reason of actions undertaken by such persons in their capacity as officers or directors of Parent; or (y) the beneficial owner of securities held of record by the trustee of any employee benefit plan of Parent or any subsidiary of Parent for the benefit of any employee of Parent or any subsidiary of Parent, 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. (C)“Continuing Directors” means any member of Parent’s board of directors (1) who was a member of Parent’s board of directors as of December 31, 2016, or (2) whose subsequent nomination for election or election to Parent’s board of directors was recommended or approved by a majority of the Continuing Directors. (D)“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. “Participant” means an employee of the Company who is designated by the Administrator to be eligible to participate in the CFCF Plan pursuant to an Award Letter. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof. “Plan Year” means each of the 2023, 2024, 2025, 2026 and 2027 fiscal years. “Projected Cumulative FCF” (or “Projected CFCF”) means, (i) for each completed Plan Year prior to a Transaction, the Free Cash Flow for such Plan Year based on actual results, plus (ii) for any incomplete Plan Year as of a Transaction, including the Plan Year in which a Transaction occurs (if incomplete at the time of such Transaction), the Free Cash Flow for such Plan Year based on projected Free Cash Flow as determined by the Administrator in its sole discretion at the time of such Transaction. “Retirement” means a termination of employment after having attained age 55 and completed at least 10 years of service, or age 60 and completed at least 5 years of service, with Parent, the Company or any of their respective affiliates. “Sale” means a transaction or series of related transactions pursuant to which any independent third party or affiliated group of independent third parties acquires all or substantially all of the outstanding equity securities of the Company or the assets of the Company, in each case, as determined by the Administrator in its sole discretion. “Securities Act” means the U.S. Securities Act of 1933, as amended. “Transaction” means the consummation of (i) a Sale, (ii) an IPO or (iii) any Other Corporate Transaction. | ||||
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“Code” means the U.S. Internal Revenue Code of 1986 and all treasury regulations thereunder, as amended from time to time. “Company” means Ketjen Corporation. “Cumulative FCF” (or “CFCF”) means, with respect to any fiscal year, the sum of the Free Cash Flow for such fiscal year and each prior fiscal year beginning with the 2023 fiscal year. “Disability” means a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code. “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended. “Free Cash Flow” (or “FCF”) means, with respect to any fiscal year, as applicable, (i) the operating cash flow of the Company (or the Catalysts business of Parent) reported in Parent’s annual report on Form 10-K for such fiscal year or (ii) the projected operating cash flow of the Company (or the Catalysts business of Parent) for such fiscal year, as determined by the Administrator in its sole discretion, in either case, adjusted for capital expenditures and pension contributions, as determined by the Administrator in its sole discretion. For purposes of determining FCF, net value of Amsterdam (AMS) land (net of remediation or other costs to sell or make ready to sell), as reasonably determined by the Administrator in its sole discretion, will be excluded. “IPO” means (i) the first underwritten public offering of any equity securities of the Company or any successor entity pursuant to an effective registration statement filed under the Securities Act, (ii) any transaction (including a “direct listing” transaction) pursuant to which the Company or any successor entity first becomes subject to the periodic reporting requirements of Section 13 or 15(d) of the Exchange Act or (iii) an acquisition of the Company or any successor entity by, or consolidation, amalgamation, merger, reorganization or other business combination involving the Company or any successor entity with or into, a special purpose acquisition company that is publicly listed on a national or foreign securities exchange and that does not conduct any material business or maintain any material assets other than cash or an affiliate of such special purpose acquisition company. “Other Corporate Transaction” means any spin-off, split-off or extraordinary dividend distribution in respect of the Company’s equity securities, or any exchange of the Company’s equity securities, or any similar, unusual or extraordinary corporate transaction in respect of the | |||||
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Company’s equity securities. The determination of whether any Other Corporate Transaction constitutes a Transaction will be determined by the Administrator in its sole discretion. “Parent” means Albemarle Corporation, a Virginia corporation, and any successor thereto. “Parent Change of Control” means the occurrence of any of the following events: (i) any Person becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding securities of Parent that are entitled to vote generally for the election of Parent’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by Parent approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person becomes the Beneficial Owner of 20% or more, and less than 30%, of the Voting Securities, the Continuing Directors (as defined below) may determine, by a vote of a least two-thirds of the Continuing Directors, that the same does not constitute a Parent Change of Control; (ii) 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 the Board, or any successor’s board of directors, within two years of the last of such transactions; (iii) the shareholders of Parent approve a Business Combination and such Business Combination is consummated, unless immediately following such Business Combination, (A) 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 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of Parent resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns Parent through one or more subsidiaries) in substantially the same portions as their ownership, immediately prior to such | |||||
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Business Combination, of the Voting Securities, (B) no Person (excluding any employee benefit plan or related trust of Parent or Parent 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 Parent resulting from such Business Combination, and (C) at least a majority of the members of the board of directors of Parent resulting from such Business Combination are Continuing Directors. For purposes of this “Parent Change of Control”, the following terms have the meanings set forth below: (A) “affiliate” or “associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. (B) Beneficial Owner means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities: 1) that such Person or any of such Person’s affiliates or associates owns, directly or indirectly; 2) 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; 3) 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 | |||||
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security under this subsection as a result of an agreement, arrangement or understanding: (x) 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 (y) is not also then reportable by such Person on Schedule 13D under the Exchange Act (or any comparable or successor report); or 4) that are beneficially owned, directly or indirectly, by any other Person (or any affiliate or associates thereof) with which 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 3) of this definition) or disposing of any voting securities of Parent provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter or securities who acquires any securities of Parent through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act, 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 Parent be deemed (x) the beneficial owner of any securities beneficially owned by another officer or director of Parent solely by reason of actions undertaken by such persons in their capacity as officers or directors of Parent; or (y) the beneficial owner of securities held of record by the trustee of any employee benefit plan of Parent or any subsidiary of Parent for the benefit of any employee of Parent or any subsidiary of Parent, 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. (C) “Continuing Directors” means any member of Parent’s board of directors (1) who was a member of Parent’s board of directors as of December 31, 2016, or (2) whose subsequent nomination for election or election to Parent’s | |||||
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board of directors was recommended or approved by a majority of the Continuing Directors. (D) “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. “Participant” means an employee of the Company who is designated by the Administrator to be eligible to participate in the CFCF Plan pursuant to an Award Letter. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof. “Plan Year” means each of the 2023, 2024, 2025, 2026 and 2027 fiscal years. “Projected Cumulative FCF” (or “Projected CFCF”) means, (i) for each completed Plan Year prior to a Transaction, the Free Cash Flow for such Plan Year based on actual results, plus (ii) for any incomplete Plan Year as of a Transaction, including the Plan Year in which a Transaction occurs (if incomplete at the time of such Transaction), the Free Cash Flow for such Plan Year based on projected Free Cash Flow as determined by the Administrator in its sole discretion at the time of such Transaction. “Retirement” means a termination of employment after having attained age 55 and completed at least 10 years of service, or age 60 and completed at least 5 years of service, with Parent, the Company or any of their respective affiliates. “Sale” means a transaction or series of related transactions pursuant to which any independent third party or affiliated group of independent third parties acquires all or substantially all of the outstanding equity securities of the Company or the assets of the Company, in each case, as determined by the Administrator in its sole discretion. “Securities Act” means the U.S. Securities Act of 1933, as amended. “Transaction” means the consummation of (i) a Sale, (ii) an IPO or (iii) any Other Corporate Transaction. | |||||
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| Bonus Payments: | With respect to each Plan Year completed prior to a Transaction, each Participant is eligible to receive a portion of the Bonus Pool (as defined below) for such Plan Year (each, a “Bonus Pool Payment”), subject to the terms and conditions of the CFCF Plan and the Participant’s Award Letter. Each Bonus Pool Payment (if any) is calculated by multiplying (i) the applicable Participant’s Award Percentage by (ii) the amount of the Bonus Pool for the applicable Plan Year. | ||||
| Bonus Pool: | With respect to each Plan Year completed prior to a Transaction, the aggregate amount payable to all Participants in the CFCF Plan (a “Bonus Pool”) is equal to 5.75% of the excess (if any) of (i) Cumulative FCF for such Plan Year over (ii) Cumulative FCF for the prior Plan Year. For the avoidance of doubt, (A) if Cumulative FCF for such Plan Year is less than Cumulative FCF for the prior Plan Year, the applicable Bonus Pool will be zero and (B) no Bonus Pool Payment will be payable with respect to the 2023 Plan Year. In the event Cumulative FCF for any Plan Year is a negative amount, the Administrator will make appropriate adjustments to the calculation of Cumulative FCF for subsequent Plan Years in its sole discretion. | ||||
| Transaction Bonus Pool | Notwithstanding the foregoing, if a Transaction occurs prior to the end of the 2027 Plan Year, each applicable Participant is eligible to receive a one-time bonus payment (the “Transaction Bonus Pool Payment”) based on an alternative bonus pool (the “Transaction Bonus Pool”). The aggregate amount of the Transaction Bonus Pool payable to all Participants is equal to 5.75% of the Projected Cumulative FCF. For the avoidance of doubt, if (i) the Projected Cumulative FCF is negative or (ii) a Transaction does not occur prior to the end of the 2027 Plan Year, in either case, no Transaction Bonus Pool Payments will be made. For each Participant, the Transaction Bonus Pool Payment is calculated by multiplying (i) the applicable Participant’s Award Percentage, pro-rated based on the number of full months he or she was employed with the Company and a Participant in the CFC Plan from January 1, 2023 through a Transaction, divided by sixty (60) (such pro-rated percentage, the “Transaction Pro-Rata Award Percentage”), by (ii) the amount of the Transaction Bonus Pool (if any); provided that, any previously paid, or earned but unpaid, Bonus Pool Payments to such Participant will be deducted from the Transaction Bonus Pool Payment. On or following a Transaction, no payments will be made under the CFCF Plan (other than any earned Transaction Bonus Pool Payments). | ||||
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| Form of Payment: | Each Bonus Pool Payment and Transaction Bonus Pool Payment, if any, will be payable in cash. | ||||
| Timing of Payment: | With respect to each applicable Plan Year, any Bonus Pool Payment shall be paid to the applicable Participant as soon as practicable during, but no later than March 15 of, the subsequent fiscal year. Any Transaction Bonus Pool Payment shall be paid to the applicable Participant as soon as practicable following the Transaction (but no later than March 15 of the calendar year following the calendar year in which such Transaction occurs). No Participant shall have the right to subject any amount payable under the CFCF Plan to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. | ||||
| Vesting; Certain Terminations of Employment: | Each Participant will vest in the Participant’s full Award Percentage with respect to each Plan Year (or with respect to the Transaction Bonus Pool Payment) if he or she is continuously employed by the Company through the last day of the applicable Plan Year or the Transaction, as applicable. In the event of a Participant’s termination of employment with the Company for any reason prior to the last day of a Plan Year or the Transaction, as applicable, the Participant’s participation in the CFCF Plan with respect to such Plan Year and each subsequent Plan Year shall be terminated. Notwithstanding the foregoing, or except as otherwise set forth in a separation or termination agreement between a Participant and the Company or its affiliates, in the event of a Participant’s termination of employment with the Company due to (i) a termination by the Company without Cause, (ii) such Participant’s Retirement, (iii) Disability or (iv) a transfer of employment from the Company to an affiliate of the Company (including Parent), in each case, during a Plan Year and prior to a Transaction, the Participant shall retain a portion of his or her Award Percentage (the “Termination Pro-Rata Award Percentage”) with respect to such Plan Year and each subsequent Plan Year calculated on a prorated basis based on the number of full months he or she was employed with the Company and a Participant from January 1, 2023 through such termination date, divided by sixty (60). Such Participant will be eligible for payment, if any, under the CFCF Plan based on his or her Termination Pro-Rata Award Percentage in accordance with its terms and paid at the same time as other Participants under the CFCF Plan, including any payment of a Transaction Bonus Pool Payment; provided that, for purposes of calculating any Transaction Bonus Pool Payment, such Participant’s Transaction Pro-Rata Award Percentage will be deemed to be equal to such | ||||
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| Participant’s Termination Pro-Rata Award Percentage. The Participant will forfeit his or her portion of the Award Percentage which is not a Termination Pro-Rata Award Percentage, with such forfeited Award Percentage to be available for future awards under the CFCF Plan in the sole discretion of the Administrator. In addition, notwithstanding the foregoing, in the event of a Participant’s termination of employment with the Company due to death during a Plan Year and prior to a Transaction, the Participant will be eligible for a Bonus Pool Payment with respect to such Plan Year and each subsequent Plan Year equal to (i) the Target LTI, multiplied by (ii) a quotient, which is equal to the number of full months he or she was employed with the Company and a Participant from January 1, 2023 through such termination date, divided by sixty (60). The aggregate amount of the Bonus Pool Payment(s) calculated under this paragraph will be payable in a single lump-sum within 60 days following such termination of employment. For the avoidance of doubt, any such Participant will not be eligible for a Transaction Bonus Pool Payment. | |||||
| Certain Termination of Employment in Connection with a Parent Change of Control: | If a Parent Change of Control occurs prior the termination of the CFCF Plan, the CFCF Plan will be assumed by the acquiror or successor of Parent. Notwithstanding anything to the contrary herein, in the event of a Participant’s termination of employment by the Company without Cause following a Parent Change of Control, the Participant will be eligible for a Bonus Pool Payment equal to (i)(A) the Target LTI, multiplied by (B) five (5), less (ii) the aggregate amount of Bonus Pool Payments paid with respect to any Plan Years preceding the Plan Year in which the Parent Change of Control occurs, if any. The Bonus Pool Payment calculated under this paragraph will be payable in a single lump-sum within 60 days following such termination of employment. | ||||
| Unallocated Award Percentages: | The Administrator has the sole discretion to grant Awards and Award Percentages to Participants. The aggregate Award Percentage underlying all outstanding Awards under the CFCF Plan may not exceed 100%. Unless otherwise determined by the Administrator in its sole discretion, any unallocated Award Percentage shall not be reallocated to other Participants or result in the increase of any Bonus Pool Payments or Transaction Bonus Pool Payment that any Participant is eligible to receive at any time. | ||||
| Termination of CFCF Plan: | Unless otherwise determined by the Administrator, the CFCF Plan shall automatically terminate upon the earlier of (i) a Transaction and (ii) the end of the 2027 Plan Year. As of such termination, no Participant shall have | ||||
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| any further rights with respect to the CFCF Plan other than any earned but unpaid Bonus Pool Payment or Transaction Bonus Pool Payment. | |||||
| Miscellaneous: | The CFCF Plan will not be treated as salary or taken into account for purposes of determining any other compensation or benefits that may be provided to a Participant. Nothing herein shall constitute an employment contract or agreement or a guarantee of continued employment. No provision of this CFCF Plan shall be deemed to be an amendment to or incorporated in any employment agreement, separation agreement or similar compensatory agreement between the Company and any Participant. The CFCF Plan does not represent a legally binding commitment of the Board, the Administrator or the Company and the Board, the Administrator and the Company reserve the right to amend or terminate the CFCF Plan, any term or condition of the CFCF Plan or any Award or Award Percentage under the CFCF Plan at any time and for any reason in its sole discretion, in each case, including, without limitation, with or without payment with respect to any open Plan Years upon such amendment or termination. The Administrator shall have the right to make all determinations under the CFCF Plan and to interpret any term of the CFCF Plan in its sole discretion and all such decisions shall be final and binding on applicable Participants. All rights hereunder are personal to the Participant and are not transferable (and any purported transfer in violation of the foregoing shall be null and void) except that, in the event of such Participant’s death, such rights are transferable to such Participant’s legal representatives, heirs, or legatees. The CFCF Plan shall inure to the benefit of and be binding upon the Company and its successors and assigns and the Participant and the Participant’s legal representatives, heirs, and legatees. The Participant is required to keep in strict confidence all information about the CFCF Plan (including, without limitation, the existence of the CFCF Plan, the Award and all information regarding the strategic alternatives for the Company). Any unauthorized disclosure of information regarding the CFCF Plan, Parent, the Company or any of their respective shareholders or affiliates will result in immediate forfeiture of the Participant’s rights under the CFCF Plan and the Award without consideration. Payments, if any, under the CFCF Plan shall be subject to all applicable withholding and other deductions required by applicable law. Participants are fully responsible for the full and timely payment of any personal taxes or similar obligations due on awards under the CFCF Plan under all applicable laws in the relevant jurisdiction. The Company may modify or | ||||
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| supplement the terms of the CFCF Plan as may be necessary or advisable to comply with local tax and other legal requirements. Notwithstanding anything to the contrary herein, payments, if any, may be made by the Company under the CFCF Plan at any time only upon full compliance with all then-applicable requirements of law. It is intended that the provisions of the CFCF Plan are exempt from, or comply with, Section 409A of the Code and shall be construed in accordance with such intent. Notwithstanding the foregoing, the Company does not represent or warrant that the terms of the CFCF Plan complies with any provision of federal, state, local or other tax law. The Company has no responsibility for the tax treatment under the CFCF Plan and the Participant shall be solely responsible for all tax consequences relating to the CFCF Plan. For purposes of Section 409A of the Code, any right to a series of installment payments under the CFCF Plan shall be treated as a right to a series of separate payments. | |||||
| Applicable Law and Jurisdiction: | The CFCF Plan and all Awards made thereunder shall be governed by the laws of the State of Virginia, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the CFCF Plan to the substantive law of another jurisdiction. Participants under the CFCF Plan are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Virginia, to resolve any and all issues that may arise out of or relation to the CFCF Plan or any Award thereunder. | ||||
| Non-Compete Agreement: | Each Participant has signed prior to the Award Date or will sign concurrent with the Award Letter a separate EMPLOYEE NON-SOLICITATION, NON-COMPETE AND CONFIDENTIALITY AGREEMENT (the “Non-Compete Agreement”). In the event of a breach of any of the terms of the Non-Compete Agreement on the Participant’s part, before or after vesting and/or settlement of the Award, in addition to any and all consequences otherwise set forth in the Non-Compete Agreement, the Participant shall immediately forfeit any and all rights under the Award, and to the extent any portion of the Award shall have already been paid to the Participant, the Company shall have the right to recoup such Award in full. | ||||
| Recoupment: | In addition to any other applicable provision of the CFCF Plan or as required by applicable law, the Award and any prior award granted to the Participant under the CFCF Plan is subject to the terms of the separate Albemarle Corporation Recoupment Policy, as such Policy may be amended from time to time, and the terms of any similar Parent or Company policy (including, for the avoidance of doubt, any policy adopted | ||||
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| for purposes of complying with Rule 10D-1 of the Exchange Act) adopted by Parent or the Company from time to time. | |||||
Exhibit 10.5
KETJEN CORPORATION
AMENDED AND RESTATED TRANSACTION VALUE PLAN
Set forth below are the terms and conditions of the Ketjen Corporation Amended and Restated Transaction Value Plan (the “TVP”).
| Certain Definitions: | “Adjusted EBITDA” means the amount of Adjusted EBITDA of the Company (or the Catalysts business of Parent) reported in Parent’s annual report on Form 10-K or Parent’s quarterly report on Form 10-Q for the applicable fiscal quarter. Adjusted EBITDA may be adjusted to reflect any acquisitions, asset disposals, capital raising or other one-time non-recurring impacts as determined by the Administrator in its discretion. “Average Adjusted EBITDA” equals the sum of (i)(A) sixty percent (60%), multiplied by (B) the aggregate amount of Adjusted EBITDA over the four completed fiscal quarters ending immediately prior to the TVP Expiration Date, and (ii)(A) forty percent (40%), multiplied by (B) the aggregate amount of Adjusted EBITDA over the four completed fiscal quarters ending immediately prior to the period described in clause (i)(B). “Administrator” means the Executive Compensation and Talent Development Committee of the Board or a subcommittee thereof. “Award” has the meaning set forth in the applicable Participant’s Award Letter. “Award Date” has the meaning set forth in the applicable Participant’s Award Letter. “Beneficial Owner” or “Beneficial Ownership” has the meaning ascribed to such term in Rule 13d-3 of the General Rules and Regulations under the Exchange Act. “Board” means the Board of Directors of Parent. “Cause” means, unless otherwise specified in an applicable employment agreement or award agreement between Parent (or any subsidiary thereof) and a Participant, with respect to a Participant, as determined by the Administrator in its sole discretion: (i)Willful failure to substantially perform his or her duties as an employee (for reasons other than physical or mental illness) after reasonable notice to the Participant of that failure; | |||||||
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(ii)Misconduct that materially injures Parent or any subsidiary or affiliate thereof; (iii)Conviction of, or entering into a plea of nolo contendere to, a felony; or (iv)Breach of any written covenant or agreement with Parent or any subsidiary or affiliate thereof. “Code” means the U.S. Internal Revenue Code of 1986 and all treasury regulations thereunder, as amended from time to time. “Company” means Ketjen Corporation. “Disability” means a Participant’s permanent and total disability within the meaning of Section 22(e)(3) of the Code. “Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended. “IPO” means (i) the first underwritten public offering of any equity securities of the Company or any successor entity pursuant to an effective registration statement filed under the Securities Act, (ii) any transaction (including a “direct listing” transaction) pursuant to which the Company or any successor entity first becomes subject to the periodic reporting requirements of Section 13 or 15(d) of the Exchange Act or (iii) an acquisition of the Company or any successor entity by, or consolidation, amalgamation, merger, reorganization or other business combination involving the Company or any successor entity with or into, a special purpose acquisition company that is publicly listed on a national or foreign securities exchange and that does not conduct any material business or maintain any material assets other than cash or an affiliate of such special purpose acquisition company. “Other Corporate Transaction” means any spin-off, split-off or extraordinary dividend distribution in respect of the Company’s equity securities, or any exchange of the Company’s equity securities, or any similar, unusual or extraordinary corporate transaction in respect of the Company’s equity securities. The determination of whether any Other Corporate Transaction constitutes a Transaction will be determined by the Administrator in its sole discretion. “Parent” means Albemarle Corporation, a Virginia corporation, and any successor thereto. | ||||||||
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“Parent Change of Control” means the occurrence of any of the following events: (i) any Person becomes, directly or indirectly, the Beneficial Owner of 20% or more of the combined voting power of the then outstanding securities of Parent that are entitled to vote generally for the election of Parent’s directors (the “Voting Securities”) (other than as a result of an issuance of securities by Parent approved by Continuing Directors, or open market purchases approved by Continuing Directors at the time the purchases are made). However, if any such Person becomes the Beneficial Owner of 20% or more, and less than 30%, of the Voting Securities, the Continuing Directors (as defined below) may determine, by a vote of a least two-thirds of the Continuing Directors, that the same does not constitute a Parent Change of Control; (ii) 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 the Board, or any successor’s board of directors, within two years of the last of such transactions; (iii) the shareholders of Parent approve a Business Combination and such Business Combination is consummated, unless immediately following such Business Combination, (A) 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 60% of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of Parent resulting from such Business Combination (including, without limitation, a company which as a result of such transaction owns Parent through one or more subsidiaries) in substantially the same portions as their ownership, immediately prior to such Business Combination, of the Voting Securities, (B) no Person (excluding any employee benefit plan or related trust of Parent or Parent 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 Parent resulting from such Business Combination, and (C) at least a majority | ||||||||
4
of the members of the board of directors of Parent resulting from such Business Combination are Continuing Directors. For purposes of this “Parent Change of Control”, the following terms have the meanings set forth below: (A) “affiliate” or “associate” shall have the respective meanings ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange Act. (B) Beneficial Owner means that a Person shall be deemed the “Beneficial Owner” and shall be deemed to “beneficially own,” any securities: 1) that such Person or any of such Person’s affiliates or associates owns, directly or indirectly; 2) 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; 3) 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: (x) 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 (y) is not also then reportable by such Person on | ||||||||
5
Schedule 13D under the Exchange Act (or any comparable or successor report); or 4) that are beneficially owned, directly or indirectly, by any other Person (or any affiliate or associates thereof) with which 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 3 of this definition) or disposing of any voting securities of Parent provided, however, that notwithstanding any provision of this definition, any Person engaged in business as an underwriter or securities who acquires any securities of Parent through such Person’s participation in good faith in a firm commitment underwriting registered under the Securities Act, 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 Parent be deemed (x) the beneficial owner of any securities beneficially owned by another officer or director of Parent solely by reason of actions undertaken by such persons in their capacity as officers or directors of Parent; or (y) the beneficial owner of securities held of record by the trustee of any employee benefit plan of Parent or any subsidiary of Parent for the benefit of any employee of Parent or any subsidiary of Parent, 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. (C) “Continuing Directors” means any member of Parent’s board of directors (1) who was a member of Parent’s board of directors as of December 31, 2016, or (2) whose subsequent nomination for election or election to Parent’s board of directors was recommended or approved by a majority of the Continuing Directors. (D) “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 | ||||||||
6
entity is beneficially owned, directly or indirectly, by such Person, or otherwise controlled by such Person. “Participant” means an employee of the Company who is designated by the Administrator to be eligible to participate in the TVP pursuant to the Award Letter. “Person” shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including a “group” as defined in Section 13(d) thereof. “Retirement” means a termination of employment after having attained age 55 and completed at least 10 years of service, or age 60 and completed at least 5 years of service, with Parent, the Company or any of their respective affiliates. “Sale” means a transaction or series of related transactions pursuant to which any independent third party or affiliated group of independent third parties acquires all or substantially all of the outstanding equity securities of the Company or the assets of the Company, in each case, as determined by the Administrator in its sole discretion. “Securities Act” means the U.S. Securities Act of 1933, as amended. “Transaction” means the consummation of (i) a Sale, (ii) an IPO or (iii) any Other Corporate Transaction. “Transaction Value” means: (i) In connection with a Sale, the sum of the total proceeds and other consideration received and to be received by the selling equityholders of the Company, including, without limitation, (A) cash, (B) notes, securities and other property valued at the fair market value thereof as measured as of the date of the Sale, and (C) any extraordinary dividends or distributions of cash or property paid. In the event less than all of the outstanding equity securities of the Company or assets of the Company are transferred in connection with such transaction, Transaction Value will be determined by the Administrator in its sole discretion on the basis that all such securities or assets had been transferred at values consistent with the value of the proceeds actually received. (ii) In connection with a Transaction that is not a Sale, Transaction Value will be determined by the Administrator in its sole discretion based on all facts and circumstances, including, without limitation, the initial offering | ||||||||
7
price of shares offered in an IPO, initial trading price of securities issued in a spin-off or other similar values. (iii) In the event no Transaction occurs prior to the TVP Expiration Date, Transaction Value will be deemed to equal six (6) times the Average Adjusted EBITDA as determined by the Administrator in its sole discretion. For the avoidance of doubt, net value of Amsterdam (AMS) land (net of remediation or other costs to sell or make ready to sell), as reasonably determined by the Administrator in its sole discretion, will be included in the determination of Transaction Value. For purposes of clauses (i) and (ii), any contingency payments or amounts held in escrow in connection with a Transaction shall be included in the Transaction Value based on estimates reasonably determined by the Administrator in its sole discretion. “TVP Expiration Date” means the earlier of (i) December 31, 2029 and (ii) the date the Board approves the decision to no longer seek a Transaction in its sole discretion. “Unit” means a unit of measurement used solely as a device for the determination of payment under the TVP. | ||||||||
| Bonus Amount: | Each Participant is eligible to receive a portion of the TVP Bonus Pool (the “TVP Bonus Amount”), based on the number of vested Units held by the Participant and subject to the terms and conditions of the TVP and the Participant’s Award Letter. Upon the earlier of a Transaction and the TVP Expiration Date, each Participant’s TVP Bonus Amount is calculated by multiplying (i) the number of vested Units held by the Participant as of the Transaction or TVP Expiration Date, as applicable, by (ii) the TVP Bonus Pool (as defined below) divided by 1,000,000; provided that, if a Transaction occurs prior to December 31, 2027 and the TVP Expiration Date, the amount of each Participant’s TVP Bonus Amount will be pro-rated based on the number of full months he or she was employed with the Company and a Participant from January 1, 2023 through such Transaction, divided by sixty (60). | |||||||
| TVP Bonus Pool: | The total amount of the bonus pool (the “TVP Bonus Pool”) will be determined as a percentage of the Transaction Value as set forth in the table below. | |||||||
| Transaction Value | TVP Bonus Pool | |||||||
8
| < $800 million | $0 | |||||||
| ≥ $800 million | $2 million plus 3% of Transaction Value over $800 million | |||||||
| Form of Payment: | Each TVP Bonus Amount, if any, will be payable in cash. | |||||||
Timing of Payment: | Any TVP Bonus Amount shall be paid to the applicable Participant as soon as practicable following the earlier of a Transaction and TVP Expiration Date but in no event later than March 15 of the calendar year following the calendar year in which a Transaction occurs or the TVP Expiration Date. No Participant shall have the right to subject any amount payable under the TVP to any anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment. | |||||||
| Vesting of Units; Certain Terminations of Employment: | The Participant will fully vest in the Units awarded under the Award Letter if he or she is continuously employed by the Company through the earlier of a Transaction and the TVP Expiration Date. In the event of a Participant’s termination of employment with the Company for any reason prior to the earlier of a Transaction and the TVP Expiration Date, the Participant’s participation in the TVP shall be terminated and the Units shall automatically be forfeited, with such forfeited Units to be available for future awards under the TVP in the sole discretion of the Administrator. If a Participant’s employment with the Company is terminated but such Participant remains actively employed by an affiliate of the Company (including Parent), the Participant shall retain a portion of his or her Units calculated on a prorated basis based on the number of full months he or she was employed with the Company and a Participant from the January 1, 2023 through such termination date, divided by sixty (60). Such remaining Units will be eligible for payout, if any, under the TVP in accordance with its terms and paid at the same time as other Participants under the TVP. Notwithstanding the foregoing, or except as otherwise set forth in a separation or termination agreement between a Participant and the Company or its affiliates, in the event of a Participant’s termination of employment with the Company due to (i) a termination by the Company without Cause, (ii) such Participant’s Retirement or (iii) Disability, in each case, prior to the earlier of a Transaction and the TVP Expiration Date, such Participant shall retain a portion of his or her Units calculated on a prorated basis based on the number of full months he or she was employed with the Company and a Participant from the January 1, 2023 through such termination date, divided by sixty (60). Such remaining Units will be | |||||||
9
| eligible for payout, if any, under the TVP in accordance with its terms and paid at the same time as other Participants under the TVP. In addition, notwithstanding the foregoing, in the event of a Participant’s termination of employment with the Company due to death prior to the earlier of a Transaction and the TVP Expiration Date, the Participant will be eligible for a TVP Bonus Amount, payable within 60 days following such termination, assuming (i) a value of $8.00 per Unit and (ii) he or she held vested Units calculated on a prorated basis based on the number of full months he or she was employed with the Company and a Participant from the January 1, 2023 through such termination date, divided by sixty (60). The Participant will forfeit his or her portion of the Units which is not retained pursuant to this section, with such forfeited Units to be available for future awards under the TVP in the sole discretion of the Administrator. | ||||||||
| Certain Termination of Employment in Connection with a Parent Change of Control | If a Parent Change of Control occurs prior to a Transaction and the TVP Expiration Date, the TVP will be assumed by the acquiror or successor of Parent. Notwithstanding anything to the contrary herein, in the event of a Participant’s termination of employment by the Company without Cause following a Parent Change of Control, the Participant will be eligible for a TVP Bonus Amount, payable within 60 days following such termination, assuming (i) a value of $8.00 per Unit and (ii) the Units are fully vested as of such termination date. | |||||||
| Units Pool | The Administrator has the sole and absolute discretion to grant Units to Participants. At any given time, the aggregate number of Units outstanding shall not exceed 1,000,000 Units. Unless otherwise determined by the Administrator in its sole discretion, any unallocated Units at the time of a Transaction or the TVP Expiration Date shall not be reallocated to other Participants or result in the increase of the TVP Bonus Amount that any Participant is eligible to receive at such time. | |||||||
| Termination of TVP: | Unless otherwise determined by the Administrator, the TVP shall automatically terminate on the earlier of a Transaction and the TVP Expiration Date, and as of such date, no Participant shall have any rights with respect to the TVP (other than TVP Bonus Amounts, if any, payable pursuant to the terms of the TVP). | |||||||
| Miscellaneous: | The Award will not be treated as salary or taken into account for purposes of determining any other compensation or benefits that may be provided to a Participant. Nothing herein shall constitute an employment contract or agreement or a guarantee of continued employment. No provision of this | |||||||
10
| TVP shall be deemed to be an amendment to or incorporated in any employment agreement, separation agreement or similar compensatory agreement between the Company and any Participant. The TVP does not represent a legally binding commitment of the Board, the Administrator or the Company and the Board, the Administrator and the Company reserve the right to amend or terminate the TVP, any term or condition of the TVP or any award under the TVP at any time and for any reason in its sole discretion. The Administrator shall have the right to make all determinations under the TVP and to interpret any term of the TVP in its sole discretion and all such decisions shall be final and binding on applicable Participants. All rights hereunder are personal to the Participant and are not transferable (and any purported transfer in violation of the foregoing shall be null and void) except that, in the event of such Participant’s death, such rights are transferable to such Participant’s legal representatives, heirs, or legatees. The TVP shall inure to the benefit of and be binding upon the Company and its successors and assigns and the Participant and the Participant’s legal representatives, heirs, and legatees. The Participant is required to keep in strict confidence all information about the TVP (including, without limitation, the existence of the TVP, any awards thereunder and all information regarding the value of, or a potential divestiture of, the Company). Any unauthorized disclosure of information regarding the TVP, Parent, the Company or any of their respective shareholders or affiliates will result in immediate forfeiture of the Participant’s rights under the TVP and the Award without consideration. Payments, if any, under the TVP shall be subject to all applicable withholding and other deductions required by applicable law. Participants are fully responsible for the full and timely payment of any personal taxes or similar obligations due on awards under the TVP under all applicable laws in the relevant jurisdiction. The Company may modify or supplement the terms of the TVP as may be necessary or advisable to comply with local tax and other legal requirements. Notwithstanding anything to the contrary herein, payments, if any, may be made by the Company under the TVP at any time only upon full compliance with all then-applicable requirements of law. It is intended that the provisions of the TVP are exempt from, or comply with, Section 409A of the Code and shall be construed in accordance with such intent. Notwithstanding the foregoing, the Company does not represent or warrant that the terms of the TVP complies with any provision of federal, state, local or other tax law. The Company has no responsibility for the tax treatment under the TVP and the Participant shall be solely responsible for | ||||||||
11
| all tax consequences relating to the TVP. For purposes of Section 409A of the Code, any right to a series of installment payments under the TVP shall be treated as a right to a series of separate payments. | ||||||||
| Applicable Law and Jurisdiction: | The TVP and all awards made thereunder shall be governed by the laws of the State of Virginia, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the TVP to the substantive law of another jurisdiction. Participants under the TVP are deemed to submit to the exclusive jurisdiction and venue of the federal or state courts of Virginia, to resolve any and all issues that may arise out of or relation to the TVP or any award thereunder. | |||||||
| Non-Compete Agreement: | The Participant acknowledges that he or she has signed prior to the Award Date or will sign concurrent with the Award Letter a separate EMPLOYEE NON-SOLICITATION, NON-COMPETE AND CONFIDENTIALITY AGREEMENT (the “Non-Compete Agreement”). The Participant further acknowledges and agrees that in the event of a breach of any of the terms of the Non-Compete Agreement on the Participant’s part, before or after vesting and/or settlement of the Award, in addition to any and all consequences otherwise set forth in the Non-Compete Agreement, the Participant shall immediately forfeit any and all rights under the Award, and to the extent any portion of the Award shall have already been paid to the Participant, the Company shall have the right to recoup such Award in full. | |||||||
| Recoupment: | In addition to any other applicable provision of the TVP or as required by applicable law, the Award and any prior award granted to the Participant under the TVP is subject to the terms of the separate Albemarle Corporation Recoupment Policy, as such Policy may be amended from time to time, and the terms of any similar Parent or Company policy (including, for the avoidance of doubt, any policy adopted for purposes of complying with Rule 10D-1 of the Exchange Act) adopted by Parent or the Company from time to time. | |||||||
EXHIBIT 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
I, J. Kent Masters, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended September 30, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | November 5, 2025 | ||||
/s/ J. KENT MASTERS | ||
| J. Kent Masters | ||
| Chairman, President and Chief Executive Officer | ||
EXHIBIT 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
I, Neal R. Sheorey, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of Albemarle Corporation for the period ended September 30, 2025;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date: | November 5, 2025 | ||||
/s/ NEAL R. SHEOREY | ||
| Neal R. Sheorey | ||
| Executive Vice President and Chief Financial Officer | ||
EXHIBIT 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Albemarle Corporation (the “Company”) for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Kent Masters, principal executive officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ J. KENT MASTERS | ||
| J. Kent Masters | ||
| Chairman, President and Chief Executive Officer | ||
| November 5, 2025 | ||
EXHIBIT 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Albemarle Corporation (the “Company”) for the period ended September 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Neal R. Sheorey, principal financial officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
/s/ NEAL R. SHEOREY | ||
Neal R. Sheorey | ||
| Executive Vice President and Chief Financial Officer | ||
| November 5, 2025 | ||