kronosproxy04-09.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14A
Proxy
Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934
Filed by
Registrant: ý
Filed by
a Party other than the
Registrant: ¨
Check the
appropriate box:
¨ Preliminary
Proxy Statement
¨
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Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
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ý Definitive
Proxy Statement
¨
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Definitive
Additional Materials
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¨
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Soliciting
Material Pursuant to § 240.14a-12
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Kronos
Worldwide, Inc.
(Name of
Registrant as Specified in Its Charter)
(Name of
Person(s) Filing Proxy Statement, if other than the
Registrant)
Payment
of Filing Fee (Check the appropriate box):
¨
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Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
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1)
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Title
of each class of securities to which transaction
applies:
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2)
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Aggregate
number of securities to which transaction
applies:
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3)
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Per
unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee
is calculated and state how it was
determined):
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4)
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Proposed
maximum aggregate value of
transaction:
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¨
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Fee
paid previously with preliminary
materials.
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¨
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Check
box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of its
filing.
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1)
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Amount
Previously Paid:
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2)
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Form,
Schedule or Registration Statement
No.:
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![](kronoslogo.jpg) |
Kronos
Worldwide, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
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April 14,
2009
To our
Stockholders:
You are
cordially invited to attend the 2009 Annual Meeting of Stockholders of Kronos
Worldwide, Inc., which will be held on Thursday, May 14, 2009, at 10:00 a.m.,
local time, at our corporate offices at Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas, Texas. The matters to be acted upon at
the meeting are described in the attached Notice of Annual Meeting of
Stockholders and Proxy Statement.
Whether
or not you plan to attend the meeting, please cast your vote as instructed on
the enclosed proxy card or voting instruction form as promptly as possible to
ensure that your shares are represented and voted in accordance with your
wishes. Your vote, whether given by proxy or in person at the
meeting, will be held in confidence by the inspector of election as provided in
our bylaws.
Sincerely,
Steven L.
Watson
Vice
Chairman of the Board and
Chief
Executive Officer
Kronos
Worldwide, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
NOTICE
OF ANNUAL MEETING OF STOCKHOLDERS
To
Be Held May 14, 2009
To the
Stockholders of Kronos Worldwide, Inc.:
The 2009
Annual Meeting of Stockholders of Kronos Worldwide, Inc. will be held on
Thursday, May 14, 2009, at 10:00 a.m., local time, at our corporate offices at
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas, for the
following purposes:
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(1)
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to
elect the seven director nominees named in this proxy statement to serve
until the 2010 Annual Meeting of Stockholders;
and
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(2)
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to
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
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The close
of business on March 31, 2009 has been set as the record date for the
meeting. Only holders of our common stock at the close of business on
the record date are entitled to notice of, and to vote at, the
meeting. A complete list of stockholders entitled to vote at the
meeting will be available for examination during normal business hours by any of
our stockholders, for purposes related to the meeting, for a period of ten days
prior to the meeting at our corporate offices.
You are
cordially invited to attend the meeting. Whether or not you plan to
attend the meeting, please cast your vote as instructed on the enclosed proxy
card or voting instruction form as promptly as possible to ensure that your
shares are represented and voted in accordance with your wishes. If
you choose, you may still vote in person at the meeting even though you
previously cast your vote.
By Order
of the Board of Directors,
A. Andrew
R. Louis, Secretary
Dallas,
Texas
April 14,
2009
Important Notice Regarding the
Availability of Proxy Materials for the
Annual
Stockholder Meeting to Be Held on May 14, 2009.
This proxy statement is available at www.kronosww.com/proxy and the annual report to
stockholders
(including Kronos Worldwide’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2008)
is available at www.kronosww.com/annrpt.
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Ownership
of Kronos Worldwide
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Ownership
of Related Companies
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Controlled
Company Status, Director Independence and
Committees
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2008
Meetings and Standing Committees
of the Board of Directors
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Management
Development and Compensation
Committee
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Non-Management
and Independent Director Meetings
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Stockholder
Proposals and Director Nominations for the 2010 Annual Meeting of
Stockholders
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Communications
with Directors
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Compensation
Committee Interlocks and Insider
Participation
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Code
of Business Conduct and Ethics
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Corporate
Governance Guidelines
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Availability
of Corporate Governance Documents
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Compensation
Discussion and Analysis
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Compensation
Committee Report
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Summary
of Cash and Certain Other Compensation of Executive
Officers
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2008
Grants of Plan-Based Awards
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Outstanding
Equity Awards at December 31, 2008
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Option
Exercises and Stock Vested
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Nonqualified
Deferred Compensation
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Related
Party Transaction Policy
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Relationships
with Related Parties
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Intercorporate
Services Agreements
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Independent
Registered Public Accounting Firm
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Fees
Paid to PricewaterhouseCoopers LLP
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Preapproval
Policies and Procedures
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“CDCT” means the Contran
Amended and Restated Deferred Compensation Trust, an irrevocable “rabbi
trust” established by Contran to assist it in meeting certain deferred
compensation obligations that it owes to Harold C.
Simmons.
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“CMRT” means The
Combined Master Retirement Trust, a trust Contran sponsors that permits
the collective investment by master trusts that maintain assets of certain
employee defined benefit plans Contran and related entities
adopt.
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“Computershare” means
Computershare Trust Company, N.A., our stock transfer
agent.
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“CompX” means CompX
International Inc., one of our publicly held sister corporations that
manufactures security products, furniture products and performance marine
components.
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“Contran” means Contran
Corporation, the parent corporation of our consolidated tax
group.
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“Dixie Rice” means Dixie
Rice Agricultural Corporation, Inc., one of our parent
corporations.
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“EWI” means EWI RE,
Inc., a reinsurance brokerage and risk management company wholly owned by
NL.
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“FAS 123R” means
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 123 (revised 2004) Share-Based
Payment.
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“Foundation” means the
Harold Simmons Foundation, Inc., a tax-exempt foundation organized for
charitable purposes.
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“independent directors”
means the following directors: Cecil H. Moore, Jr., Keith R.
Coogan, George E. Poston and R. Gerald
Turner.
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“ISA” means an
intercorporate services agreement between or among Contran related
companies pursuant to which employees of one or more related companies
provide certain services, including executive officer services, to another
related company on a fixed fee
basis.
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“Keystone” means
Keystone Consolidated Industries, Inc., one of our publicly held sister
corporations that manufactures steel fabricated wire products, industrial
wire, billets and wire rod.
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“KII” means Kronos
International, Inc., one of our wholly owned subsidiaries with operations
in Europe.
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“Kronos Worldwide,”
“us,” “we” or “our” means Kronos
Worldwide, Inc.
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“named executive
officer” means any person named in the Summary Compensation table
in this proxy statement.
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“NL” means NL
Industries, Inc., one of our publicly held parent corporations that is a
diversified holding company with principal investments in us and
CompX.
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“non-management
directors” means the following directors who are not one of our
executive officers: Cecil H. Moore, Jr., Keith R. Coogan,
George E. Poston, Glenn R. Simmons and R. Gerald
Turner.
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“NYSE” means the New
York Stock Exchange.
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“PwC” means
PricewaterhouseCoopers LLP, our independent registered public accounting
firm.
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“record date” means the
close of business on March 31, 2009, the date our board of directors set
for the determination of stockholders entitled to notice of and to vote at
the 2009 annual meeting of our
stockholders.
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“SEC” means the U.S.
Securities and Exchange Commission.
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“Securities Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
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“Tall Pines” means Tall
Pines Insurance Company, an indirect wholly owned captive insurance
subsidiary of Valhi.
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“TFMC” means TIMET
Finance Management Company, a wholly owned subsidiary of
TIMET.
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“TIMET” means Titanium
Metals Corporation, one of our publicly held sister corporations that is
an integrated producer of titanium metals
products.
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“Valhi” means Valhi,
Inc., one of our publicly held parent corporations that is a diversified
holding company with principal investments in NL and
us.
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“VHC” means Valhi
Holding Company, one of our parent
corporations.
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Kronos
Worldwide, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
———————————————
PROXY
STATEMENT
———————————————
This
proxy statement and the accompanying proxy card or voting instruction form are
being furnished in connection with the solicitation of proxies by and on behalf
of our board of directors for use at our 2009 Annual Meeting of Stockholders to
be held on Thursday, May 14, 2009, and at any adjournment or postponement of the
meeting. The accompanying notice of annual meeting of stockholders
sets forth the time, place and purposes of the meeting. The notice,
this proxy statement, the accompanying proxy card or voting instruction form and
our 2008 Annual Report to Stockholders, which includes our Annual Report on Form
10-K for the fiscal year ended December 31, 2008, are first being mailed on or
about April 14, 2009 to the holders of our common stock at the close of business
on March 31, 2009. Our principal executive offices are located at
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas, Texas
75240-2697.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING
Q: What
is the purpose of the annual meeting?
A:
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At
the annual meeting, stockholders will vote on the election of the seven
directors named in this proxy statement and any other matter that may
properly come before the meeting.
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Q: How
does the board recommend that I vote?
A:
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The
board of directors recommends that you vote FOR each of the nominees for
director named in this proxy
statement.
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Q: Who
is allowed to vote at the annual meeting?
A:
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The
board of directors has set the close of business on March 31, 2009 as the
record date for the determination of stockholders entitled to notice of
and to vote at the meeting. Only holders of record of our
common stock as of the close of business on the record date are entitled
to vote at the meeting. On the record date,
48,960,049 shares of our common stock were issued and
outstanding. Each share of our common stock entitles its holder
to one vote.
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Q: How
do I vote?
A:
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If
your shares are held by a bank, broker or other nominee (i.e., in “street
name”), you must follow the instructions from your nominee on how to vote
your shares.
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If you
are a stockholder of record, you may:
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·
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vote
over the internet at www.investorvote.com/KRO;
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·
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vote
over the telephone by using the voting procedures set forth on the proxy
card;
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instruct
the agents named on the proxy card how to vote your shares by completing,
signing and mailing the enclosed proxy card in the envelope provided;
or
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vote
in person at the annual meeting;
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If
you execute a proxy card but do not indicate how you would like your shares
voted for one or more of the director nominees named in this proxy statement,
the agents will vote FOR the election of each such director nominee and, to the
extent allowed by applicable law, in the discretion of the agents on any other
matter that may properly come before the meeting.
Q: Who
will count the votes?
A:
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The
board of directors has appointed Computershare, our transfer agent and
registrar, to receive proxy instructions and ballots, ascertain the number
of shares represented, tabulate the vote and serve as inspector of
election for the meeting.
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Q: Is
my vote confidential?
A:
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Yes. All
proxy cards, ballots or voting instructions delivered to Computershare
will be kept confidential in accordance with our
bylaws.
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Q: May
I change or revoke my proxy or voting instructions?
A:
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If
you are a stockholder of record, you may change or revoke your proxy
instructions at any time before the meeting in any of the following
ways:
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·
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delivering
to Computershare a written
revocation;
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submitting
another proxy card bearing a later
date;
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changing
your vote on www.investorvote.com/KRO;
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·
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using
the telephone voting procedures set forth on the proxy card;
or
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·
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voting
in person at the meeting.
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If your
shares are held by a bank, broker or other nominee, you must follow the
instructions from your nominee on how to change or revoke your voting
instructions.
Q: What
constitutes a quorum?
A:
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A
quorum is the presence, in person or by proxy, of the holders of a
majority of the outstanding shares of our common stock entitled to vote at
the meeting. Under the applicable rules of the NYSE and the
SEC, brokers or other nominees holding shares of record on behalf of a
client who is the actual beneficial owner of such shares are authorized to
vote on certain routine matters without receiving instructions from the
beneficial owner of the shares. If such a broker/nominee who is
entitled to vote on a routine matter delivers an executed proxy card and
votes on some matters and not others, a matter not voted on is referred to
in this proxy statement as a “broker/nominee
non-vote.” Abstentions and broker/nominee non-votes will be
counted as being in attendance at the meeting for purposes of determining
whether a quorum is present.
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Q:
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Assuming
a quorum is present, what vote is required to elect a director nominee or
approve any other matter?
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A:
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A
plurality of the affirmative votes of the holders of our outstanding
shares of common stock represented and entitled to be voted at the meeting
is necessary to elect each director nominee. The accompanying
proxy card or voting instruction form provides space for you to withhold
authority to vote for any of such director nominees. The
election of directors is a routine matter on which a broker/nominee has
discretionary authority to vote if such broker/nominee does not receive
voting instructions from the beneficial holder of the shares to be
voted. Neither shares as to which the authority to vote on the
election of directors has been withheld nor broker/nominee non-votes will
be counted as affirmative votes to elect director
nominees. However, since director nominees need only receive
the plurality of the affirmative votes from the holders represented and
entitled to vote at the meeting to be elected, a vote withheld or a
broker/nominee non-vote regarding a particular nominee will not affect the
election of such director nominee.
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Except as
applicable laws may otherwise provide, the approval of any other matter that may
properly come before the meeting will require the affirmative votes of the
holders of a majority of the outstanding shares represented and entitled to vote
at the meeting. Abstentions and broker/nominee non-votes will not be
counted as votes for or against any such other matter.
Q: Who
will pay for the cost of soliciting the proxies?
A:
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We
will pay all expenses related to the solicitation, including charges for
preparing, printing, assembling and distributing all materials delivered
to stockholders. In addition to the solicitation by mail, our
directors, officers and regular employees may solicit proxies by telephone
or in person for which such persons will receive no additional
compensation. Upon request, we will reimburse banking
institutions, brokerage firms, custodians, trustees, nominees and
fiduciaries for their reasonable out-of-pocket expenses incurred in
distributing proxy materials and voting instructions to the beneficial
owners of our common stock that such entities hold of
record.
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Valhi and
NL are the direct holders of 59.2% and 36.0%, respectively, of the outstanding
shares of our common stock as of the record date. Together, Valhi and
NL own approximately 95.2% of the outstanding shares of our common
stock. Valhi is the direct holder of 83.1% of the outstanding shares
of NL common stock. Valhi and NL have each indicated their intention
to have their shares of our common stock represented at the meeting and voted
FOR the election of each of the director nominees named in this proxy
statement. If Valhi alone attends the meeting in person or by proxy
and votes as indicated, the meeting will have a quorum present and the
stockholders will elect all the nominees to the board of directors named in this
proxy statement.
Ownership of
Kronos Worldwide. The following table and footnotes set forth
as of the record date the beneficial ownership, as defined by regulations of the
SEC, of our common stock held by each individual, entity or group known by us to
own beneficially more than 5% of the outstanding shares of our common stock,
each director, each named executive officer and all of our directors and
executive officers as a group. See footnote 4 below for information
concerning the relationships of certain individuals and entities that may be
deemed to own indirectly and beneficially more than 5% of the outstanding shares
of our common stock. All information is taken from or based upon
ownership filings made by such individuals or entities with the SEC or upon
information provided by such individuals or entities.
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Kronos
Worldwide Common Stock
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Amount
and Nature of
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Percent
of
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Harold
C. Simmons
(3)
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196,267
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(4)
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*
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Valhi,
Inc.
(3)
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28,995,021
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(4)
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59.2%
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NL
Industries, Inc
(3)
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17,609,635
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(4)
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36.0%
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TIMET
Finance Management Company
(3)
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77,903
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(4)
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*
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Annette
C. Simmons
(3)
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(4)
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*
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46,928,682
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(4)
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95.9%
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Keith
R.
Coogan
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2,000
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*
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Cecil
H. Moore,
Jr.
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2,512
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(4)
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*
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George
E.
Poston
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3,500
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*
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Glenn
R.
Simmons
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10,938
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(4)
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*
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R.
Gerald
Turner
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3,036
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*
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Steven
L.
Watson
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10,633
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(4)
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*
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Ulfert
Fiand
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-0-
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-0-
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H.
Joseph
Maas
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-0-
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-0-
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Gregory
M.
Swalwell
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-0-
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-0-
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All
our directors and executive officers as a group (16
persons)
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46,964,490
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(4)
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95.9%
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——————————
* Less
than 1%.
(1)
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Except
as otherwise noted, the listed entities, individuals or group have sole
investment power and sole voting power as to all shares set forth opposite
their names.
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(2)
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The
percentages are based on 48,960,049
shares of our common stock outstanding as of the record
date.
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(3)
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The
business address of Valhi, NL and Harold C. and Annette C. Simmons is
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697. The business address of TFMC is
1007 Orange Street, Suite 1400, Wilmington,
Delaware 19801.
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(4)
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Valhi
and TFMC are the direct holders of approximately 83.1% and 0.5%,
respectively, of the outstanding shares of NL common stock,
respectively. TIMET is the direct holder of 100% of the
outstanding shares of TFMC common
stock.
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VHC,
Annette C. Simmons, the CMRT, Harold C. Simmons, NL, Valhi, the CDCT and the
Foundation are the holders of approximately 26.1%, 12.1%, 8.5%, 4.2%, 0.8%,
0.5%, 0.4% and 0.2%, respectively, of the outstanding shares of common stock of
TIMET. NL’s percentage ownership of TIMET common stock includes 0.3%
directly held by a wholly owned subsidiary of NL.
VHC,
TFMC, the Foundation and the CMRT are the direct holders of approximately 92.6%,
1.1%, 0.9% and 0.1%, respectively, of the outstanding common stock of
Valhi. Dixie Rice is the direct holder of 100% of the outstanding
common stock of VHC. Contran is the beneficial holder of 100% of the
outstanding common stock of Dixie Rice.
Substantially
all of Contran’s outstanding voting stock is held by trusts established for the
benefit of certain children and grandchildren of Harold C. Simmons, of which Mr.
Simmons is the sole trustee, or held by Mr. Simmons or persons or other entities
related to Mr. Simmons. As sole trustee of these trusts, Mr. Simmons
has the power to vote and direct the disposition of the shares of Contran stock
held by these trusts. Mr. Simmons, however, disclaims beneficial
ownership of any Contran shares these trusts hold.
The
Foundation directly holds approximately 0.2% of the outstanding shares of TIMET
common stock and 0.9% of the outstanding shares of Valhi common
stock. The Foundation is a tax-exempt foundation organized for
charitable purposes. Harold C. Simmons is the chairman of the board
of the Foundation.
The CDCT
directly holds approximately 0.4% of the outstanding shares of TIMET common
stock. U.S. Bank National Association serves as the trustee of the
CDCT. Contran established the CDCT as an irrevocable “rabbi trust” to
assist Contran in meeting certain deferred compensation obligations that it owes
to Harold C. Simmons. If the CDCT assets are insufficient to satisfy
such obligations, Contran must satisfy the balance of such
obligations. Pursuant to the terms of the CDCT, Contran retains the
power to vote the shares held by the CDCT, retains dispositive power over such
shares and may be deemed the indirect beneficial owner of such
shares.
The CMRT
directly holds approximately 8.5% of the outstanding shares of TIMET common
stock and 0.1% of the outstanding shares of Valhi common
stock. Contran sponsors this trust to permit the collective
investment by master trusts that maintain assets of certain employee defined
benefit plans Contran and related entities adopt. Harold C. Simmons
is the sole trustee of this trust and a member of the investment committee for
this trust. Contran’s board of directors selects the trustee and
members of this trust’s investment committee. Certain of our
executive officers and Glenn R. Simmons are participants in one or more of the
employee defined benefit plans that invest through this trust. Each
of such persons disclaims beneficial ownership of any of the shares this trust
holds, except to the extent of his or her individual vested beneficial interest,
if any, in the plan assets this trust holds.
Harold C.
Simmons is the chairman of the board of each of us, TIMET, Valhi, VHC, Dixie
Rice and Contran and chairman of the board and chief executive officer of
NL.
By virtue
of the holding of the offices, the stock ownership and his services as trustee,
all as described above, (a) Harold C. Simmons may be deemed to control certain
of such entities and (b) Mr. Simmons and certain of such entities may be deemed
to possess indirect beneficial ownership of shares directly held by certain of
such other entities. However, Mr. Simmons disclaims beneficial
ownership of the shares beneficially owned, directly or indirectly, by any of
such entities, except to the extent of his vested beneficial interest, if any,
in shares held by the CDCT or the CMRT. Mr. Simmons disclaims
beneficial ownership of all shares of our common stock beneficially owned,
directly or indirectly, by Valhi, NL or TFMC.
All of
our directors or executive officers who are also directors or executive officers
of Valhi, NL, TFMC or their parent companies disclaim beneficial ownership of
the shares of our common stock that such companies directly or indirectly
hold.
Annette
C. Simmons is the wife of Harold C. Simmons. She is the direct owner
of 49,856 shares of our common stock, 269,775 shares of NL common stock,
21,825,875 shares of TIMET common stock and 200,900 shares of Valhi common
stock. Mr. Simmons may be deemed to share indirect beneficial
ownership of such shares. Mr. Simmons disclaims all such beneficial
ownership.
The
Annette Simmons Grandchildren’s Trust, a trust of which Harold C. Simmons and
Annette C. Simmons are co-trustees and the beneficiaries of which are the
grandchildren of Annette C. Simmons, is the direct holder of 17,432 shares of
TIMET common stock and 34,000 shares of Valhi common stock. Mr.
Simmons, as co-trustee of this trust, has the power to vote and direct the
disposition of the shares of Valhi common stock this trust directly
holds. Mr. Simmons disclaims beneficial ownership of any shares that
this trust holds.
Harold C.
Simmons is the direct owner of 196,267 shares of our common stock, 880,600
shares of NL common stock, 7,549,737 shares of TIMET common stock and 154,838
shares of Valhi common stock.
NL and
one of its subsidiaries directly hold 3,604,790 and 1,186,200 shares of Valhi
common stock, respectively. Since NL is a majority owned subsidiary
of Valhi, and pursuant to Delaware law, Valhi treats the shares of Valhi common
stock that NL and its subsidiary hold as treasury stock for voting
purposes. For the purposes of calculating the percentage ownership of
the outstanding shares of Valhi common stock as of the record date in this proxy
statement, such shares are not deemed outstanding.
Contran
is the sole owner of Valhi’s 6% series A preferred stock and a trust related to
Harold C. Simmons is the sole owner of VHC’s 2% convertible preferred
stock. Messrs. Harold and Glenn Simmons and Watson each hold of
record one director qualifying share of Dixie Rice.
Valhi has
pledged 19,987,305 shares of our common stock as security. VHC has
pledged 42,304,992 shares of TIMET common stock as security. Shares
owned directly by Contran or its related entities or their executive officers or
directors may be held in margin accounts at brokerage firms. Under
the terms of the margin account agreements, stocks and other assets held in
these accounts may be pledged to secure margin obligations under these
accounts.
The
business address of Contran, the CMRT, the Foundation, NL, TIMET and VHC is
Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697. The business address of Dixie Rice is
600 Pasquiere Street, Gueydan, Louisiana 70542.
We
understand that Contran and related entities may consider acquiring or disposing
of shares of our common stock through open market or privately negotiated
transactions, depending upon future developments, including, but not limited to,
the availability and alternative uses of funds, the performance of our common
stock in the market, an assessment of our business and prospects, financial and
stock market conditions and other factors deemed relevant by such
entities. We may similarly consider acquisitions of shares of our
common stock and acquisitions or dispositions of securities issued by related
entities.
Ownership of
Related Companies. Some of our directors and executive
officers own equity securities of several companies related to us.
Ownership of NL and
Valhi. The following table and footnotes set forth the
beneficial ownership, as of the record date, of the shares of NL and Valhi
common stock held by each of our directors, each named executive officer and all
of our directors and executive officers as a group. All information
is taken from or based upon ownership filings made by such individuals or
entities with the SEC or upon information provided by such individuals or
entities.
|
|
|
|
Amount
and Nature
of
Beneficial
|
Percent
of
Class
|
Amount
and Nature
of
Beneficial
|
Percent
of
Class
|
|
|
|
|
|
Harold
C. Simmons
|
880,600
|
(4)
|
1.8%
|
154,838
|
(4)
|
*
|
Valhi,
Inc.
|
40,387,531
|
(4)
|
83.1%
|
n/a
|
|
n/a
|
TIMET
Finance Management Company.
|
222,100
|
(4)
|
*
|
1,257,943
|
(4)
|
1.1%
|
Valhi
Holding Company
|
-0-
|
(4)
|
-0-
|
105,140,163
|
(4)
|
92.6%
|
Harold
Simmons Foundation, Inc
|
-0-
|
(4)
|
-0-
|
1,006,500
|
(4)
|
*
|
The
Combined Master Retirement Trust
|
-0-
|
(4)
|
-0-
|
115,000
|
(4)
|
*
|
Annette
C. Simmons
|
269,775
|
(4)
|
*
|
200,900
|
(4)
|
*
|
Annette
Simmons Grandchildren’s Trust
|
|
(4)
|
-0-
|
|
(4)
|
*
|
|
41,760,006
|
|
85.9%
|
107,909,344
|
|
95.0%
|
|
|
|
|
|
|
|
Keith
R.
Coogan.
|
-0-
|
|
-0-
|
-0-
|
|
-0-
|
Cecil
H. Moore,
Jr.
|
4,000
|
(4)
|
*
|
-0-
|
|
-0-
|
George
E.
Poston
|
-0-
|
|
-0-
|
-0-
|
|
-0-
|
Glenn
R.
Simmons
|
2,000
|
(4)
|
*
|
15,652
|
(4)(6)
|
*
|
R.
Gerald
Turner
|
1,000
|
|
*
|
2,000
|
|
*
|
Steven
L.
Watson
|
12,000
|
(4)
|
*
|
28,246
|
(4)
|
*
|
Ulfert
Fiand
|
1,200
|
(5)
|
*
|
-0-
|
|
-0-
|
H.
Joseph
Maas
|
1,200
|
(5)
|
*
|
-0-
|
|
-0-
|
Gregory
M. Swalwell
|
-0-
|
|
-0-
|
56,166
|
(5)
|
*
|
All
our directors and executive officers as a group (16
persons)
|
41,789,417
|
(4)(5)
|
86.0%
|
108,056,408
|
(4)(5)(6)
|
95.0%
|
——————————
* Less
than 1%.
(1)
|
Except
as otherwise noted, the listed entities, individuals or group have sole
investment power and sole voting power as to all shares set forth opposite
their names. The number of shares and percentage of ownership
for each individual or group assumes the exercise by such individual or
group (exclusive of others) of stock options that such individual or group
may exercise within 60 days subsequent to the record
date.
|
(2)
|
The
percentages are based on 48,602,584 shares of NL common stock outstanding
as of the record date.
|
(3)
|
The
percentages are based on 113,599,955 shares of Valhi common stock
outstanding as of the record date. For purposes of calculating
the outstanding shares of Valhi common stock as of the record date,
3,604,790 and 1,186,200 shares of Valhi common stock held by NL and a
wholly owned subsidiary of NL, respectively, are treated as treasury stock
for voting purposes and for purposes of this statement are excluded from
the amount of Valhi common stock
outstanding.
|
(4)
|
See
footnote 4 to the Ownership of Kronos Worldwide table above for a
description of certain relationships among the individuals, entities or
groups appearing in this table. All our directors or executive
officers who are also directors or executive officers of Valhi, TFMC, VHC,
the Foundation or their parent companies disclaim beneficial ownership of
the shares of NL or Valhi common stock that such entities directly or
indirectly own.
|
Other
than the securities he holds directly, Harold C. Simmons disclaims beneficial
ownership of any and all securities that his wife, Annette C. Simmons, directly
or indirectly owns.
VHC has
pledged 120,000 shares of Valhi common stock as security. Shares
owned directly by Contran or its related entities or their executive officers or
directors may be held in margin accounts at brokerage firms. Under the
terms of the margin account agreements, stocks and other assets held in these
accounts may be pledged to secure margin obligations under these
accounts.
(5)
|
The
shares of NL or Valhi common stock shown as beneficially owned by such
person or group include the following number of shares such person or
group has the right to acquire upon the exercise of stock options that
such person or group may exercise within 60 days subsequent to the record
date:
|
|
|
Shares
of NL Common Stock Issuable Upon the Exercise of Stock Options On or
Before May 30, 2009
|
Shares
of Valhi Common Stock Issuable Upon the Exercise of Stock
Options
On
or Before May 30, 2009
|
|
|
|
|
|
Ulfert
Fiand
|
1,200
|
-0-
|
|
H.
Joseph
Maas
|
1,200
|
-0-
|
|
Gregory
M.
Swalwell
|
-0-
|
55,000
|
|
All
our directors and executive officers as a group (16
persons)
|
10,400
|
100,000
|
(6)
|
The
shares of Valhi common stock shown as beneficially owned by Glenn R.
Simmons include 1,500 shares his wife holds and 1,100 shares she holds in
her retirement account, with respect to all of which shares he disclaims
beneficial ownership.
|
Our
bylaws provide that the board of directors shall consist of one or more members
as determined by our board of directors or stockholders. The board of
directors has currently set the number of directors at seven and recommends the
seven director nominees named in this proxy statement for election at our 2009
annual stockholder meeting. The directors elected at the meeting will
hold office until our 2010 Annual Meeting of Stockholders and until their
successors are duly elected and qualified or their earlier removal or
resignation.
All of
the nominees are currently members of our board of directors whose terms will
expire at the meeting. All of the nominees have agreed to serve if
elected. If any nominee is not available for election at the meeting,
all shares represented by a proxy card will be voted FOR an alternate nominee to
be selected by the board of directors, unless the stockholder executing such
proxy card withholds authority to vote for such nominee. The board of
directors believes that all of its nominees will be available for election at
the meeting and will serve if elected.
OUR BOARD
OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF THE
FOLLOWING NOMINEES FOR DIRECTOR.
Nominees for
Director. The respective nominees have provided the following
information.
Keith R. Coogan, age 56, has
served on our board of directors since 2004. From 2007 to January
2009, Mr. Coogan served as president and chief executive officer and a director
of Pomeroy IT Solutions, Inc., an information technology services and solutions
provider. From 2002 to 2006, Mr. Coogan served as chief executive
officer of Software Spectrum, Inc., a global business-to-business software
services provider that Level 3 Communications, Inc. sold to Insight Enterprises
Inc. in 2006 and that, from 1991 to 2002, was a publicly held
corporation. From 1990 to 2002, he served in various other executive
officer positions with Software Spectrum, Inc., including vice president of
finance and operations and chief operating officer. He is also a
director of TIMET and a member of TIMET’s audit committee, management
development and compensation committee and nominations committee. Mr.
Coogan is a member of our audit committee and management development and
compensation committee.
Cecil H. Moore, Jr., age 69,
has served on our board of directors since 2003. Mr. Moore is
currently a private investor and retired from KPMG LLP in 2000 after 37 years in
which he served in various capacities with the public accounting
firm. Among other positions, he served as managing partner of the
firm’s Dallas, Texas office from 1990 to 1999. Prior to 1990, Mr.
Moore was partner-in-charge of the audit and accounting practice of the firm’s
Dallas, Texas office for 12 years. Mr. Moore is also a director and
chairman of the audit committee of Perot Systems Corporation, a worldwide
provider of information technology services and business
solutions. He is chairman of our audit committee and on the board of
directors and audit committee of NL.
George E. Poston, age 73, has
served on our board of directors since 2003. He has been president of
Poston Real Estate Co., a privately held commercial real estate investment
company, and president of Poston Capital Co., a privately held investment
company, since 1970. Mr. Poston is a member of our audit committee
and management development and compensation committee.
Glenn R. Simmons, age 81, has
served on our board of directors since 2003. Mr. Simmons has been
vice chairman of the board of Valhi and Contran and chairman of the board of
CompX and Keystone since prior to 2004. He also serves on the board
of directors of NL and TIMET. In 2004, Keystone filed a voluntary
petition for reorganization under federal bankruptcy laws and emerged from the
bankruptcy proceedings in 2005. Mr. Simmons has been an executive
officer or director of various companies related to Valhi and Contran since
1969. He is a brother of Harold C. Simmons.
Harold C. Simmons, age 77, has
served as our chairman of the board since 2003. He served as our
chief executive officer from prior to 2004 to February 2009. Mr.
Simmons has served as chairman of the board and chief executive officer of NL
and chairman of the board of Valhi and Contran since prior to
2004. He also has served as chairman of the board of TIMET since
2005, chief executive officer of TIMET from 2005 to 2006 and vice chairman of
the board of TIMET from 2004 to 2005. Mr. Simmons has been an
executive officer or director of various companies related to Valhi and Contran
since 1961. He is a brother of Glenn R. Simmons.
Dr. R. Gerald Turner, age 63,
has served on our board of directors since 2003. He has served since
1995 as president of Southern Methodist University in Dallas,
Texas. He held previous executive and administrative positions at the
University of Mississippi, the University of Oklahoma and Pepperdine
University. He serves on the board of directors of J.C. Penney
Company, Inc. and American Beacon Advisors Funds. Dr. Turner is a
member of our audit committee and chairman of our management development and
compensation committee.
Steven L. Watson, age 58, has
served as our chief executive officer since February 2009, our vice chairman of
the board since 2004 and on our board of directors since 2003. Mr.
Watson has been chief executive officer of Valhi and president and a director of
Valhi and Contran since prior to 2004. He has also served as TIMET’s
chief executive officer since 2006 and its vice chairman of the board since
2005. Mr. Watson is also a director of CompX, Keystone and
NL. Mr. Watson has served as an executive officer or director of
various companies related to Valhi and Contran since 1980.
Set forth
below is certain information relating to our executive officers. Each
executive officer serves at the pleasure of the board of
directors. Biographical information with respect to Harold C. Simmons
and Steven L. Watson is set forth under the Nominees for Director subsection
above.
|
|
|
Harold
C.
Simmons
|
77
|
Chairman
of the Board
|
Steven
L.
Watson
|
58
|
Vice
Chairman of the Board and Chief Executive Officer
|
Klemens
Schlüter
|
53
|
President,
Manufacturing
|
Ulfert
Fiand
|
60
|
Chief
Technology Officer
|
H.
Joseph
Maas
|
57
|
President,
Sales and Marketing
|
Douglas
C.
Weaver
|
67
|
Senior
Vice President, Development
|
Robert
D.
Graham
|
53
|
Vice
President and General Counsel
|
Tim
C.
Hafer
|
47
|
Vice
President and Controller
|
Kelly
D.
Luttmer.
|
45
|
Vice
President and Tax Director
|
John
A. St.
Wrba.
|
52
|
Vice
President and Treasurer
|
Gregory
M.
Swalwell
|
52
|
Vice
President, Finance and Chief Financial
Officer
|
Dr. Ulfert Fiand has
served as our chief technology officer since February 2009. He
previously served as our president, manufacturing and technology since 2004 and
our senior vice president, manufacturing and technology in 2004 and prior
years. Since March 2009, he has served as chief technology officer of
KII and from prior to 2004 to March 2009 he served as its president,
manufacturing and technology. Dr. Fiand joined KII in 1988, and
previously served as group leader and director of chloride process technology,
director of process technology and vice president of production & process
technology.
Klemens Schlüter has
served as our president, manufacturing since February 2009. Since
March 2009, he has served as president, manufacturing of KII and from prior to
2004 to March 2009 he served as its vice president-manufacturing. Mr.
Schlüter has served in various engineering positions of increasing
responsibility with KII. He joined KII in 1996 as director of
corporate engineering.
H. Joseph Maas has served as
our president, sales and marketing since 2004 and served as our senior vice
president, sales and marketing form 2003 to 2004. From 1985 to 2003,
Mr. Maas served as our director of marketing and later as our vice president of
marketing. From 1978 to 2003, Mr. Maas held several positions in
commercial development, marketing and planning for various divisions of NL
(Rheox and Spencer Kellogg).
Douglas C. Weaver has served
as our senior vice president, development since 2003. Mr. Weaver
served as our vice president, development from 1998 to 2003. Prior to
that, Mr. Weaver served in various manufacturing, engineering and planning
capacities with NL since joining NL in 1973.
Robert D. Graham has served as
vice president and general counsel of us and NL since prior to 2004, executive
vice president of TIMET since 2006, vice president of TIMET from 2004 to 2006
and vice president of Valhi and Contran since 2002.
Tim C. Hafer has served as
vice president and controller of us and NL since 2006. He served as
director – finance and control of us and NL from prior to 2004 to
2006. Mr. Hafer has served in financial accounting positions with
various companies related to Valhi and Contran since 1999.
Kelly D. Luttmer has served as
vice president of us, CompX, Contran, NL and Valhi since 2004, vice president
and tax director of TIMET since 2006 and tax director of us, CompX, Contran, NL
and Valhi since prior to 2004. Ms. Luttmer has served in tax
accounting positions with various companies related to Valhi and Contran since
1989.
John A. St. Wrba has served as
our vice president since 2004 and our treasurer since prior to
2004. He has also served as vice president and treasurer of Valhi
since 2005, Contran since 2004 and NL since prior to 2004.
Gregory M. Swalwell has served
as chief financial officer of us and NL since 2004 and vice president, finance
of us and NL and vice president and controller of Valhi and Contran since prior
to 2004. Mr. Swalwell has served in accounting positions with various
companies related to Valhi and Contran since 1988.
Controlled
Company Status, Director Independence and Committees. Because
of Valhi’s direct and indirect ownership of approximately 95.3% of our common
stock, we are considered a controlled company under the listing standards of the
NYSE. Pursuant to the listing standards, a controlled company may
choose not to have a majority of independent directors, independent
compensation, nominating or corporate governance committees or charters for
these committees. We have chosen not to have an independent
nominating or corporate governance committee or charters for these
committees. Our board of directors believes that the full board of
directors best represents the interests of all of our stockholders and that it
is appropriate for all matters that would be considered by a nominating or
corporate governance committee to be considered and acted upon by the full board
of directors. Applying the NYSE director independence standards
without any additional categorical standards, the board of directors has
determined that Keith R. Coogan, Cecil H. Moore, Jr., George E. Poston and R.
Gerald Turner are independent and have no material relationship with us other
than serving as our directors. While the members of our management
development and compensation committee currently satisfy the independence
requirements of the NYSE, we have chosen not to satisfy all of the NYSE listing
standards for a compensation committee.
In
determining that Dr. Turner has no material relationship with us other than
serving as our director, the board of directors considered the following
relationship:
|
·
|
in
2007, Harold C. and Annette C. Simmons made a commitment to donate $20
million to Southern Methodist University, of which Dr. Turner is the
president;
|
|
·
|
the
commitment is for contributions of $10 million in 2008 and $5 million in
each of 2009 and 2010; and
|
|
·
|
$10
million is less than 2% of SMU’s consolidated gross revenues and
approximately 2% of SMU’s consolidated gross revenues net of scholarship
allowances for its most recently completed fiscal
year.
|
2008 Meetings and
Standing Committees of the Board of Directors. The board of
directors held three meetings and took action by written consent on one occasion
in 2008. Each director participated in all of such meetings and of
the 2008 meetings of the committees on which he served at the
time. It is expected that each director will attend our annual
meeting of stockholders, which is held immediately before the annual meeting of
the board of directors. All but one of our directors attended our
2008 annual stockholder meeting.
The board
of directors has established and delegated authority to two standing committees,
which are described below. The board of directors is expected to
elect the members of the standing committees at the board of directors annual
meeting immediately following the annual stockholder meeting. The
board of directors from time to time may establish other committees to assist it
in the discharge of its responsibilities.
Audit
Committee. Our audit committee assists with the board of
directors’ oversight responsibilities relating to our financial accounting and
reporting processes and auditing processes. The purpose, authority,
resources and responsibilities of our audit committee are more specifically set
forth in our audit committee charter. Applying the requirements of
the NYSE listing standards (without additional categorical standards) and SEC
regulations, as applicable, the board of directors has determined
that:
|
·
|
each
member of our audit committee is independent, financially literate and has
no material relationship with us other than serving as our director;
and
|
|
·
|
Mr.
Cecil H. Moore, Jr. is an “audit committee financial
expert.”
|
No member
of our audit committee serves on more than three public company audit
committees. For further information on the role of our audit
committee, see the Audit Committee Report in this proxy
statement. The current members of our audit committee are Cecil H.
Moore, Jr. (chairman), Keith R. Coogan, George E. Poston and R. Gerald
Turner. Our audit committee held seven meetings in 2008.
Management
Development and Compensation Committee. The principal
responsibilities of our management development and compensation committee
are:
|
·
|
to
recommend to the board of directors whether or not to approve any proposed
charge to us or any of our privately owned subsidiaries pursuant to an ISA
with a related party;
|
|
·
|
to
review, approve and administer certain matters regarding our employee
benefit plans or programs, including annual segment profit bonus awards
under our Share-in-Performance
Plan;
|
|
·
|
to
review, approve, administer and grant awards under our equity compensation
plan; and
|
|
·
|
to
review and administer such other compensation matters as the board of
directors may direct from time to
time.
|
As
discussed above, the board of directors has determined that each member of our
management development and compensation committee is independent by applying the
NYSE director independence standards (without additional categorical
standards). In certain instances under our 2003 Long-Term Incentive
Plan, a plan allowing for grants of cash or equity performance awards, the
management development and compensation committee may delegate its authority to
administer this plan to certain individuals, which delegation authority the
committee has not utilized. With respect to the role of our executive
officers in determining or recommending the amount or form of executive
compensation, see the Compensation Discussion and Analysis section of this proxy
statement. With respect to director compensation, our executive
officers make recommendations on such compensation directly to our board of
directors for its consideration without involving the management development and
compensation committee. The current members of our management
development and compensation committee are R. Gerald Turner (chairman),
Keith R. Coogan and George E. Poston. Our management development and
compensation committee held one meeting and took action by written consent on
one occasion in 2008.
Non-Management
and Independent Director Meetings. Pursuant to our corporate
governance guidelines, our non-management directors are entitled to meet on a
regular basis throughout the year, and will meet at least once annually, without
management participation. Our independent directors also meet at
least once annually, without management participation. The chairman
of our audit committee presides at all of these meetings. In 2008, we
complied with these requirements.
Stockholder
Proposals and Director Nominations for the 2010 Annual Meeting of
Stockholders. Stockholders may submit proposals on matters
appropriate for stockholder action at our annual stockholder meetings,
consistent with rules adopted by the SEC. We must receive such
proposals not later than December 15, 2009 to be considered for inclusion in the
proxy statement and form of proxy card relating to our annual meeting of
stockholders in 2010. Our bylaws require that the proposal must set
forth a brief description of the proposal, the name and address of the proposing
stockholder as they appear on our books, the number of shares of our common
stock the stockholder holds and any material interest the stockholder has in the
proposal.
The board
of directors will consider the director nominee recommendations of our
stockholders. Our bylaws require that a nomination set forth the name
and address of the nominating stockholder, a representation that the stockholder
will be a stockholder of record entitled to vote at the annual stockholder
meeting and intends to appear in person or by proxy at the meeting to nominate
the nominee, a description of all arrangements or understandings between the
stockholder and the nominee (or other persons pursuant to which the nomination
is to be made), such other information regarding the nominee as would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the SEC and the consent of the nominee to serve as a director if
elected.
As stated
in our corporate governance guidelines, our board of directors has no specific
minimum qualifications for director candidates. The board of
directors will consider a potential director nominee’s ability to satisfy the
need, if any, for any required expertise on the board of directors or one of its
committees. Historically, our management has recommended director
nominees to the board of directors. Because under the NYSE listing
standards we may be deemed to be a controlled company, the board of directors
believes that additional policies or procedures with regard to the consideration
of director candidates recommended by its stockholders are not
appropriate.
For
proposals or director nominations to be brought at the 2010 annual meeting of
stockholders but not included in the proxy statement for such meeting, our
bylaws require that the proposal or nomination must be delivered or mailed to
our principal executive offices in most cases no later than March 1,
2010. Proposals and nominations should be addressed to our corporate
secretary at Kronos Worldwide, Inc., Three Lincoln Centre, 5430 LBJ Freeway,
Suite 1700, Dallas, Texas 75240-2697.
Communications
with Directors. Stockholders and other interested parties who
wish to communicate with the board of directors or its non-management directors
may do so through the following procedures. Such communications not
involving complaints or concerns regarding accounting, internal accounting
controls and auditing matters related to us may be sent to the attention of our
corporate secretary at Kronos Worldwide Inc., Three Lincoln Centre, 5430 LBJ
Freeway, Suite 1700, Dallas,
Texas 75240-2697. Provided that any such
communication relates to our business or affairs and is within the function of
our board of directors or its committees, and does not relate to insignificant
or inappropriate matters, such communications, or summaries of such
communications, will be forwarded to the chairman of our audit committee, who
also serves as the presiding director of our non-management and independent
director meetings.
Complaints
or concerns regarding accounting, internal accounting controls and auditing
matters, which may be made anonymously, should be sent to the attention of our
general counsel with a copy to our chief financial officer at the same address
as our corporate secretary. These complaints or concerns will be
forwarded to the chairman of our audit committee. We will keep these
complaints or concerns confidential and anonymous, to the extent feasible,
subject to applicable law. Information contained in such a complaint
or concern may be summarized, abstracted and aggregated for purposes of analysis
and investigation.
Compensation
Committee Interlocks and Insider Participation. As discussed
above, for 2008 the management development and compensation committee was
composed of R. Gerald Turner, Keith R. Coogan and George E.
Poston. No member of the committee:
|
·
|
was
an officer or employee of ours during 2008 or any prior
year;
|
|
·
|
had
any related party relationships with us that requires disclosure under
applicable SEC rules; or
|
|
·
|
had
any interlock relationships under applicable SEC
rules.
|
For 2008,
no executive officer of ours had any interlock relationships within the scope of
the intent of applicable SEC rules. However, our chairman of the
board and vice chairman of the board are on the board of directors of Contran
and Contran employs each of them and Glenn R. Simmons, who each serve as one of
our directors.
Code of Business
Conduct and Ethics. We have adopted a code of business conduct
and ethics. The code applies to all of our directors, officers and
employees, including our principal executive officer, principal financial
officer, principal accounting officer and controller. Only the board
of directors may amend the code. Only our audit committee or other
committee of the board of directors with specific delegated authority may grant
a waiver of this code. We will disclose amendments to or waivers of
the code as required by law and the applicable rules of the NYSE.
Corporate
Governance Guidelines. We have adopted corporate governance
guidelines to assist the board of directors in exercising its
responsibilities. Among other things, the corporate governance
guidelines provide for director qualifications, for independence standards and
responsibilities, for approval procedures for ISAs and that our audit committee
chairman presides at all meetings of the non-management or independent
directors.
Availability of
Corporate Governance Documents. A copy of each of our audit
committee charter, code of business conduct and ethics and corporate governance
guidelines is available on our website at www.kronosww.com under the corporate
governance section. In addition, any person may obtain a copy of
these three documents without charge, by sending a written request to the
attention of our corporate secretary at Kronos Worldwide Inc., Three Lincoln
Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas 75240-2697.
AND
OTHER INFORMATION
Compensation
Discussion and Analysis. This compensation
discussion and analysis describes the key principles and factors underlying our
executive compensation policies for our named executive officers. We
employed two of our named executive officers in each of 2008, 2007 and
2006. The rest of our named executive officers who provided their
services to us in the last three years under our ISA with Contran were employed
and compensated directly by Contran.
Compensation of our Named Executive
Officers Employed by Us. In each of the last three years, we
employed the following named executive officers:
|
|
Position(s) |
|
|
|
|
|
Ulfert
Fiand
|
President,
Manufacturing and Technology
|
|
H.
Joseph Maas
|
President,
Sales and Marketing
|
Overview. Prior
to 2006, we decided to forego long-term compensation (other than defined benefit
and contribution retirement plans), and implemented a compensation program that
is primarily cash-based, with minimal perquisites. Our objectives for
the primarily cash-based compensation program as it relates to our named
executive officers employed by us are to:
|
·
|
have
a total individual compensation package that is easy to understand;
and
|
|
·
|
achieve
a balanced compensation package that would attract and retain highly
qualified executive officers and appropriately reflect each such officer’s
individual performance, contributions and general market
value.
|
As a
result, annual compensation for our named executive officers employed by us
primarily consists of base salaries and segment profit bonuses under our
Share-in-Performance Plan.
We do not
base our employed named executive officer compensation on any specific measure
of, or formula based upon, our financial performance other than segment profit,
as described below, with respect to segment profit bonuses and matching
contributions under our savings plan. For compensation not determined
as a result of segment profit, we consider our financial performance as one
factor, without any specific weighing of this factor, in determining such
compensation. We determine the amount of each component of such
compensation solely in our collective business judgment and experience, without
performing any independent market research. We do not enter into any
written employment agreements with our employed named executive
officers.
Base Salaries. We
have established the annual base salaries for our employed named executive
officers on a position-by-position basis based on responsibility and
experience. We pay this portion of each of our employed named
executive officer’s compensation to provide him with a reliable amount of
compensation for the year, subject to his continued at-will employment and
satisfactory performance for his services at the level of his
responsibilities. Lawrence A. Wigdor, a management consultant and our
former president and chief executive officer, has the responsibility to conduct
annual internal reviews of our employed named executive officer salary levels
and make recommendations to our chief financial officer and vice chairman of the
board on adjustments, if any, to their salaries. Our chief financial
officer and vice chairman of the board then make such changes to the
recommendations, if any, as they may deem appropriate before presenting
recommendations on salary adjustments to our chairman. Our chairman
then approves any annual adjustments to the salaries of our employed named
executive officers after making such adjustments to the recommendations, if any,
that he chooses. These salary adjustments are subsequently reported
to our management development and compensation committee. All of
these recommendations and the determinations are based on:
|
·
|
our
evaluations of the past year annual base-salary amounts with adjustments
made as a result of our past and expected future financial performance,
inflation, past and potential future individual performance and
contributions or alternative career opportunities that might be available
to our named executive officers employed by us, although we do not have
any specific formula for applying these factors;
and
|
|
·
|
our
collective business judgment and experience, without performing any
independent market research.
|
In the
first quarter of 2006, 2007 and 2008, our chairman approved an increase in the
base salary of:
|
·
|
Mr.
Maas of approximately 5.0%, 8.0% and 2.6%, respectively, in each case to
account for inflation and, with respect to the increases in 2006 and 2007,
to account for an increase in his responsibilities;
and
|
|
·
|
Dr.
Fiand of approximately 5.1%, 2.4% and 2.1%, respectively, in each case to
account for inflation and, with respect to the increase in 2006, to
account for an increase in his
responsibilities.
|
We did
not utilize any specific measure of, or formula based upon, our financial
performance in determining the amount of these increases. We do
consider our financial performance as one factor, without any specific weighing
of this factor, in determining these increases. These salaries for
our named executive officers employed by us are disclosed in their salary column
in the Summary Compensation table in this proxy statement.
In the
first quarter of 2009, we instituted a salary freeze for certain of our
employees, including all of our named executive officers employed by
us.
Segment Profit Bonuses. We pay segment
profit bonuses to our key employees, including our employed named executive
officers, to motivate them to achieve higher levels of performance in attaining
our corporate goals and reward them for such performance. Segment
profit bonuses under our Share-in-Performance Plan constitute a significant
portion of the potential annual cash compensation for our employed named
executive officers. Bonuses are based on our achieving annual
predetermined levels of segment profit. For purposes of this plan,
segment profit is defined as income before taxes, interest expense and certain
general corporate items. The general corporate items excluded from
segment profit include corporate expenses and interest income not attributable
to our titanium dioxide operations. We use segment profit to
determine our bonuses because segment profit is how we assess the performance of
our titanium dioxide operations.
In the
first quarter of each year, our chief financial officer, with the assistance of
Dr. Wigdor, makes recommendations to our board of directors regarding our
business plan for the year after reviewing market conditions and our operations,
competitive position, marketing opportunities and strategies for maximizing
financial performance. Our board of directors approves our business
plan with such modifications as it deems appropriate, if any.
Based on
the recommendations of our chief financial officer and vice chairman of the
board, with the assistance of Dr. Wigdor, our chairman of the board for each of
the last three years determined the three levels of segment profit that
management would recommend to our management development and compensation
committee. These three levels were a threshold, target and
maximum. Pursuant to the Share-in-Performance Plan, if segment
profits fell below the minimum level, we did not pay any segment profit
bonus. We paid target level bonuses if we achieved at, around or in
excess of the target level but not the maximum level. The maximum
level bonus was paid only if we achieved segment profit at or above the maximum
level. The amount of segment profit we used to determine the amount
of the segment profit bonuses paid was generally the amount of segment profit we
report for financial reporting purposes. However, in its discretion,
the committee can make adjustments to the amount of segment profit we reported
for financial reporting purposes in order to determine the segment profit used
for purposes of paying the segment profit bonuses.
For each
of the last three years, the target level was set at the segment profit
projected by the applicable business plan. The threshold level was
generally set in a range from $40 million to $55 million lower than the target
level. The maximum level was generally set in a range from $50 to $65
million higher than the target level. In considering where to set the
threshold and maximum levels, we considered the absolute dollar amount of the
target level, the key assumptions inherent in the business plan and our
expectations regarding the potential of achieving our business
plan. The key assumptions inherent in our business plan related to
the level of our titanium dioxide selling prices and sales and production
volumes, changes in our manufacturing costs and relative levels of foreign
currency exchange rates. We annually determine these ranges
solely in our collective business judgment and experience, without applying any
formulas, specific weighing of factors or performing any independent market
research. For each of the last three years, we set the segment profit
levels with an expectation that we would pay bonuses based on the target
level. The segment profit levels were then presented to our
management development and compensation committee. The committee
considered the recommended levels and approved them.
For each
of the last three years, our management development and compensation committee
approved in the first quarter of the year, based on management’s recommendation,
the following segment profit levels:
|
|
Year
|
|
Threshold
|
|
Target
(a)
|
|
|
|
|
|
|
2008
|
$40
million lower than the target level
|
Segment
profit set by the 2008 business plan
|
$65
million higher than the target level
|
2007
|
$41
million lower than the target level
|
Segment
profit set by the 2007 business plan
|
$54
million higher than the target level
|
2006
|
$53
million lower than the target level
|
Segment
profit set by the 2006 business plan
|
$57
million higher than the target
level
|
——————————
(a)
|
Based
on management’s recommendation and in order to lessen the effect of
certain uncontrollable events that might affect performance under the
business plan, the committee also approved the payment of reduced target
level bonuses if we were to achieve segment profit at the following
amounts but not achieve the target level, each of which target level
bonuses would be reduced by the pro rata amount by which the achieved
segment profit was less than the target
level:
|
|
Year
|
|
Minimum
Approximate Percentage of the Target Level that Would Entitle a
Participant to a Prorated Reduced Target Level Bonus
|
|
|
|
|
|
2008
|
70%
|
|
2007
|
85%
|
|
2006
|
90%
|
In the
first quarter of the 2009, we determined that the 2008 segment profit we
achieved for purposes of determining segment profit bonuses was 80% of the
target level, which was in excess of the 70% minimum of the target level that
the committee had determined would entitle a participant to a prorated reduced
target level bonus. Therefore, the committee approved the payment of
bonuses for 2008 at a level that approximated 80% of each target level
bonus.
As
compared to the award of bonuses for 2008, the committee awarded bonuses for
2007 in its discretion upon determining that our 2007 segment profit was
approximately 83% of the target level. Such segment profit was less
than the pre-approved minimum 85% that would have otherwise entitled the
participants to a reduced prorated target level bonus and would have resulted in
the payment of bonuses at the threshold level. However, in
determining to use its discretion to adjust the amount of bonuses paid for 2007,
the committee considered certain factors that prevented us from achieving our
2007 business plan as well as the fact that for 2008 the committee had approved
the payment of reduced target level bonuses if we were to achieve segment profit
at 70% or higher of the target level but not achieve the target
level. For further comparative purposes, in 2006 we achieved segment
profit at the target level and we granted segment profit bonuses at that
level.
For each
participant, the actual amount of the bonus awarded as a percentage of his or
her base salary is determined by using a pre-established payment matrix that we
have not changed from year to year. The factors that determine the
percentage in the payment matrix that will be used to determine the bonus
are:
|
·
|
the
participant’s individual performance
rating;
|
|
·
|
the
participant’s responsibility and experience level;
and
|
|
·
|
the
segment profit achieved.
|
If
applicable, the resulting bonus amount would be adjusted in the event of a
prorated reduced target level bonus. For each of the last three years
regarding our employed named executive officers, Dr. Wigdor, with the assistance
of our chief financial officer, determined the performance rating in the first
quarter of the following year.
As a
function of the segment profit achieved for each of the last three years and the
payment matrix, each of our employed named executive officers received the
segment profit bonuses set forth next to his name in the non-equity incentive
plan compensation column of the Summary Compensation table in this proxy
statement. The percentage ranges of base salary our employed named
executive officers would have received as a segment profit bonus award for 2008
had we achieved a different segment profit level or the officer had received a
different performance rating for 2008 is set forth in the 2008 Grants of
Plan-Based Awards table in this proxy statement.
In the
first quarter of 2009, at management’s recommendation, the committee set the
2009 threshold level (rather than the target level as in each of the prior three
years) at the segment profit projected by the 2009 business plan. We
currently expect that we would pay bonuses based on the threshold level for
2009. Among other things, we did not set target or maximum levels for
2009, and we established a range from 75% to 150% of the threshold level in
which prorated bonuses from 75% to 125% of the threshold bonus as determined by
the payment matrix would be paid.
Defined Benefit
Plans. Historically, we offered pension plan benefits to our
employees, including our employed named executive officers. However,
to reduce our pension liabilities and promote retirement savings through defined
contribution plans or as similar a plan as foreign jurisdictions may
allow:
|
·
|
in
1996, we suspended all future accruals under our domestic pension plan and
closed the plan to new participants;
and
|
|
·
|
we
closed participation in the Bayer Pensionskasse defined benefit pension
plan to employees hired by our German operations on or after January 1,
2005.
|
Mr. Maas
participates in the domestic pension plan. Dr. Fiand participates in
the Bayer Pensionskasse and is the only employed named executive officer who
participates in a pension plan that continues to accrue benefits on behalf of
its participants. The increase or decrease for financial statement
reporting purposes in the actuarial present value of these officers’ accumulated
pension benefit under these plans for each of the last three years is disclosed
in their change in pension value and nonqualified deferred compensation earnings
column (or related footnote) in the Summary Compensation table for the
applicable year.
Historically,
we offered non-qualified, unfunded, defined benefit supplemental retirement
plans to our executive officers to compensate them for certain income
restrictions that affected their participation level under our pension
plans. Prior to 2006, we terminated these supplemental retirement
plans for our domestic employees. Currently, Dr. Fiand is the only
named executive officer that continues to accrue benefits under such a
supplemental plan. Dr. Fiand’s supplement defined benefit
compensation is provided by the Supplemental Pension Promise and the Individual
Pension Promise provided by our German operations. The increase or
decrease for financial statement reporting purposes in the actuarial present
value of Dr. Fiand’s accumulated benefit under these supplemental plans for each
of the last three years is disclosed in his change in pension value and
nonqualified deferred compensation earnings column (or related footnote) in the
Summary Compensation table for the applicable year.
See the
Pension Benefits section in this proxy statement for descriptions of each of
these plans and additional information regarding Dr. Fiand’s and Mr. Maas’
benefits under them.
Defined Contribution
Plans. To promote retirement savings for our employees, we pay
annual contributions to our domestic employees, including one of our employed
named executive officers, under our savings plan, which is a 401(k) defined
contribution plan. Our annual contributions to this plan consist of
three components: matching contributions pursuant to the savings
feature of the plan, retirement contributions and transition
contributions. We added the retirement and transition contributions
to the plan to compensate our domestic employees for the termination of pension
benefits.
The same
segment profit levels approved by the management development and compensation
committee with respect to the Share-in-Performance Plan determine the amount of
the matching contribution we make to a participant’s account under our savings
plan. We contribute the following percentages of a participant’s
contributions for a plan year depending on the highest segment profit we achieve
in that year up to 8% of the participant’s annual eligible compensation as
defined in the plan:
We also
annually make:
|
·
|
retirement
contributions to a participant’s account under the savings plan equal to
4% of the participant’s annual eligible compensation as defined in the
plan; and
|
|
·
|
transition
contributions for participants actively employed by us on April 1,
1996.
|
The
transition contributions are a function of each participant’s compensation, age
and years of service on April 1, 1996. Each participant who
receives these annual contributions has a different formula for determining the
contribution. The formula for Mr. Maas is 1.5% of his annual eligible
compensation as defined in the plan.
Mr. Maas
received all of these contributions in each of the last three years under the
savings plan, which are included in his all other compensation column in the
Summary Compensation table in this proxy statement.
Equity-Based
Compensation. Prior to 2006, we decided to forego the grant of
any equity compensation to our employees, although we continue to grant annual
awards of stock to our directors as a portion of their annual
retainers. We also do not have any security ownership requirements or
guidelines for our management or directors. We do not currently
anticipate any equity-based compensation will be granted in 2009, other than the
annual grants of stock to our directors. See the Director
Compensation section in this proxy statement for a discussion of these annual
grants. The dollar amount for option awards appearing in the Summary
Compensation table represents the expense or income we recognized for financial
statement reporting purposes in each of the reported years for options to
purchase NL common stock held by the named executive officer. These
options were granted to the officer when we were a wholly owned subsidiary of
NL. The dollar amount of stock awards appearing in the Summary
Compensation table represents the value recognized for financial statement
reporting purposes of shares of our common stock we granted to Messrs. Harold
Simmons and Watson in each of the last three years for their director
services.
Perquisites and Other Personal
Benefits. In each of the last three years, we continued to pay
certain perquisites or other personal benefits to our named executive officers
employed by us because they were minimal or generally expected in the country
where the officer was employed. For each of the last three years, we
paid annual automobile expenses for Dr. Fiand and life insurance for our
domestic named executive officers employed by us. The cost of these
perquisites and other personal benefits for each of our employed named executive
officers is included in his all other compensation column of the Summary
Compensation table.
Compensation of our Named Executive
Officers Employed by Contran. For each of the last three
years, we paid Contran a fee for services provided pursuant to our ISA with
Contran, which fee was approved by our independent directors after receiving the
recommendation of our management development and compensation
committee. Such services provided under this ISA included the
services of the following executive officers of ours:
|
|
Positions
with Kronos
Worldwide
|
|
|
|
|
Harold
C. Simmons
|
Chairman
of the Board
|
|
Steven
L. Watson
|
Vice
Chairman of the Board and Chief Executive Officer
|
|
Robert
D. Graham
|
Vice
President and General Counsel
|
|
Tim
C. Hafer
|
Vice
President and Controller
|
|
Kelly
D. Luttmer
|
Vice
President and Tax Director
|
|
John
A. St. Wrba
|
Vice
President and Treasurer
|
|
Gregory
M. Swalwell
|
Vice
President, Finance and Chief Financial
Officer
|
The
nature of the duties of each of our named executive officers who are employees
of Contran are consistent with the duties normally associated with the officer
titles and positions such officer holds with us. Other than Mr.
Hafer, each of these persons also serves as an executive officer of
Contran.
The
charge under this ISA reimburses Contran for its cost of employing the personnel
who provide the services by allocating such cost to us based on the estimated
time such personnel were expected to devote to us over the year. The
amount of the fee we paid for each year under this ISA for a person who provided
services to us represents, in management’s view, the reasonable equivalent of
“compensation” for such services. See the Intercorporate Services
Agreements part of the Certain Relationships and Transactions section of this
proxy statement for the aggregate amount we paid to Contran in 2008 under this
ISA. Under the various ISAs among Contran and its subsidiaries, we
share the cost of the employment of our named executive officers employed by
Contran with Contran and certain of its other publicly held
subsidiaries. For our named executive officers employed by Contran,
the portion of the annual charge we paid for each of the last three years to
Contran under this ISA attributable to each of their services is set forth in
footnote 2 to the Summary Compensation table in this proxy
statement. Footnote 2 also sets forth the cash fees we paid to each
of Messrs. Simmons and Watson for their director services. The amount
charged under the ISA and the cash director fees are not dependent upon our
financial performance.
We
believe the cost of the services received under our ISA with Contran, after
considering the quality of the services received, is fair to us and is no less
favorable to us than we could otherwise obtain from an unrelated third party for
comparable services, based solely on our collective business judgment and
experience without performing any independent market research.
In the
last quarter of the prior year and the early part of each current year,
Contran’s senior management, including certain of our named executive officers,
estimated the number of hours (out of a standard 2,080-hour year) that each
Contran employee, including our named executive officers, was expected to devote
in such current year to Contran and its subsidiaries, including
us. Contran’s senior management then allocated Contran’s cost of
employing each of its employees among Contran and its various subsidiaries based
on the ratio of the estimated hours of service devoted to each company and the
total number of standard hours in a year. The cost of each officer’s
services that is allocated for each of the last three years was the sum of the
following:
|
·
|
the
annualized base salary of such officer at the beginning of the
year;
|
|
·
|
the
bonus Contran paid or accrued for such officer (other than bonuses for
specific matters) in the prior year, which served as a reasonable
approximation of the bonus that may be paid or accrued in the current year
for such officer; and
|
|
·
|
Contran’s
portion of the social security and medicare taxes on such base salary and
an estimated overhead factor (17% for 2008 as compared to 19% for 2007 and
21% for 2006) applied to the base salary for the cost of medical and life
insurance benefits, unemployment taxes, disability insurance, defined
benefit and defined contribution plan benefits, professional education and
licensing and costs of providing an office, equipment and supplies related
to the provision of such services.
|
The
overhead factor declined in 2007 as compared to 2006, and further declined in
2008 as compared to 2007, in each case as a result of Contran achieving some
economies of scale and being able to spread the fixed costs included in
determining the overhead factor over a greater number of employees providing
services under various ISAs. Contran’s senior management subsequently
made such adjustments to the details of the proposed ISA charge as they deemed
necessary for accuracy, overall reasonableness and fairness to us.
In the
first quarter of each year, the proposed charge for that year under our ISA with
Contran was presented to our management development and compensation committee
to determine whether the committee would recommend that our board of directors
approve the ISA charge. Among other things during such presentation,
the committee was informed of:
|
·
|
the
quality of the services Contran provides to us, including the quality of
the services certain of our executive officers provide to
us;
|
|
·
|
the
$1.0 million charge to us for the services of Harold C. Simmons as our
chairman of the board or chief executive officer, as
applicable;
|
|
·
|
the
comparison of the ISA charge and number of full-time equivalent employees
reflected in the charge by department for the prior year and proposed for
the current year;
|
|
·
|
the
comparison of the prior year and proposed current year charges by
department and in total and such amounts as a percentage of Contran’s
similarly calculated costs for its departments and in total for those
years; and
|
|
·
|
the
comparison of the prior year and proposed current year average hourly
rate.
|
In
determining whether to recommend that the board of directors approve the
proposed ISA fee, the management development and compensation committee
considers the three elements of Contran’s cost of employing the personnel who
provide services to us, including the cost of employing our named executive
officers, in the aggregate and not individually. After such
presentations and following further discussion and review, our management
development and compensation committee recommended that our board of directors
approve the proposed ISA fee after concluding that:
|
·
|
the
cost to employ the additional personnel necessary to provide the quality
of the services provided by Contran would exceed the proposed aggregate
fee to be charged by Contran to us under this ISA;
and
|
|
·
|
the
cost for such services would be no less favorable than could otherwise be
obtained from an unrelated third party for comparable
services.
|
In
reaching its recommendation, our management development and compensation
committee did not review:
|
·
|
any
ISA charge from Contran to any other publicly held parent or sister
company because such charge was separately reviewed by the management
development and compensation committee of the applicable company;
and
|
|
·
|
the
compensation policies of Contran
because:
|
|
o
|
each
of our named executive officers provides services to many companies
related to Contran, including Contran
itself;
|
|
o
|
the
fee we pay to Contran under the ISA each year does not represent all of
Contran’s cost of employing each of our named executive
officers;
|
|
o
|
Contran
and these other companies related to Contran absorb the remaining amount
of Contran’s cost of employing each of our named executive officers;
and
|
|
o
|
the
members of our management development and compensation committee consider
the other factors discussed above in determining whether to recommend that
the proposed ISA fee for each year be approved by the full board of
directors.
|
Based on
the recommendations of our committee, our independent directors approved the
proposed annual ISA charge effective January 1st of each
year, with our other directors abstaining.
For
financial reporting and income tax purposes, the ISA fee is expensed as incurred
on a quarterly basis. Contran has implemented a limit of $1.0 million
on any individual’s charge to a publicly held company in order to enhance the
deductibility by the company of the charge for tax purposes under Section 162(m)
of the Internal Revenue Code of 1986, if such section were somehow to be deemed
applicable. Section 162(m) generally disallows a tax deduction to
publicly held companies for non-performance based compensation over $1.0 million
paid to the company’s chief executive officer and four other most highly
compensated executive officers.
Deductibility of
Compensation. It is our general policy to structure the
performance-based portion of the compensation of our executive officers in a
manner that enhances our ability to deduct fully such compensation under Section
162(m) of the Internal Revenue Code.
Compensation
Committee Report. The management development and compensation
committee has reviewed with management the Compensation Discussion and Analysis
section in this proxy statement. Based on the committee’s review and
a discussion with management, the committee recommended to the board of
directors that our compensation discussion and analysis be included in this
proxy statement.
The
following individuals, in the capacities indicated, hereby submit the foregoing
report.
|
R. Gerald
Turner
Chairman
of our Management Development and Compensation Committee
|
Keith
R. Coogan
Member
of our Management Development and Compensation Committee
|
George
E. Poston
Member
of our Management Development and Compensation
Committee
|
Summary of Cash
and Certain Other Compensation of Executive Officers. The
Summary Compensation table below provides information concerning compensation we
and our subsidiaries paid or accrued for services rendered during the last three
years by our chief executive officer, chief financial officer and each of the
three other most highly compensated individuals (in certain instances, based on
ISA charges to us) who were our executive officers at December 31,
2008. Messrs. Harold C. Simmons, Steven L. Watson and Gregory M.
Swalwell were employees of Contran for the last three years and provided their
services to us and our subsidiaries pursuant to the ISA between us and
Contran. For a discussion of this ISA, see the Intercorporate
Services Agreements part of the Certain Relationships and Transactions section
of this proxy statement.
2008 SUMMARY COMPENSATION TABLE
(1)
Name
and Principal Position
|
|
|
|
|
Non-Equity
Incentive Plan Compensa-tion
|
Change
in Pension Value and Nonquali-fied Deferred Compensa-tion
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
Harold
C.
Simmons
|
2008
|
$1,022,000
|
(2)
|
$11,985
|
(3)
|
$ -0-
|
|
$ -0-
|
|
$ -0-
|
|
$ -0-
|
|
$1,033,985
|
Chairman
of the Board and
|
2007
|
1,022,000
|
(2)
|
15,120
|
(3)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
1,037,120
|
Chief
Executive Officer
|
2006
|
1,023,000
|
(2)
|
14,995
|
(3)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
1,037,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
L.
Watson
|
2008
|
611,900
|
(2)
|
11,985
|
(3)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
623,885
|
Vice
Chairman of the Board
|
2007
|
513,800
|
(2)
|
15,120
|
(3)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
528,920
|
|
2006
|
510,700
|
(2)
|
14,995
|
(3)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
525,695
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ulfert
Fiand
(4)
|
2008
|
320,999
|
|
-0-
|
|
2,298
|
(5)
|
158,225
|
(6)
|
10,181
|
(7)
|
14,918
|
(8)
|
506,621
|
President,
Manufacturing and
|
2007
|
287,679
|
|
-0-
|
|
-0-
|
(5)
|
162,809
|
(6)
|
|
(7)
|
12,241
|
(8)
|
462,729
|
Technology
|
2006
|
255,339
|
|
-0-
|
|
|
(5)
|
178,800
|
(6)
|
7,049
|
(7)
|
11,200
|
(8)
|
452,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
H.
Joseph
Maas
|
2008
|
275,250
|
|
-0-
|
|
2,298
|
(5)
|
128,400
|
(6)
|
1,711
|
(9)
|
20,255
|
(10)
|
427,914
|
President,
Sales and Marketing
|
2007
|
270,000
|
|
-0-
|
|
-0-
|
(5)
|
152,800
|
(6)
|
|
(9)
|
19,732
|
(10)
|
442,532
|
|
2006
|
247,000
|
|
-0-
|
|
|
(5)
|
159,100
|
(6)
|
|
(9)
|
23,351
|
(10)
|
429,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory
M.
Swalwell
|
2008
|
272,400
|
(2)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
272,400
|
Vice
President, Finance and
|
2007
|
218,800
|
(2)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
218,800
|
Chief
Financial Officer
|
2006
|
228,600
|
(2)
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
-0-
|
|
228,600
|
——————————
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
(2)
|
The
amounts shown in the 2008 Summary Compensation table as salary for each of
these named executive officers include the portion of the fees we paid to
Contran pursuant to the ISA between us and Contran with respect to the
services such officer rendered to us and our subsidiaries. As
further discussed in the Compensation Discussion and Analysis section of
this proxy statement, the ISA charges disclosed for Contran employees who
perform executive officer services to us and our subsidiaries are based on
the estimated hours such individual spends fulfilling such
duties. The amount shown in the table as salary for Messrs.
Simmons and Watson also includes director cash compensation we paid to
each of them for each of the last three years. The components
of salary shown in the 2008 Summary Compensation table for each of these
named executive officers are as
follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harold
C. Simmons
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contran
ISA Fee
|
|
$ |
1,000,000 |
|
|
|
$ |
1,000,000 |
|
|
|
$ |
1,000,000 |
|
|
|
Director
Fees Earned or Paid in Cash
|
|
|
23,000 |
|
|
|
|
22,000 |
|
|
|
|
22,000 |
|
|
|
|
|
$ |
1,023,000 |
|
|
|
$ |
1,022,000 |
|
|
|
$ |
1,022,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Steven
L. Watson
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contran
ISA Fee
|
|
$ |
487,700 |
|
(a)
|
|
$ |
490,800 |
|
(a)
|
|
$ |
588,900 |
|
(a)
|
|
Director
Fees Earned or Paid in Cash
|
|
|
23,000 |
|
|
|
|
23,000 |
|
|
|
|
23,000 |
|
|
|
|
|
$ |
510,700 |
|
|
|
$ |
513,800 |
|
|
|
$ |
611,900 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gregory
M. Swalwell
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contran
ISA Fee
|
|
$ |
228,600 |
|
(a)
|
|
$ |
218,800 |
|
(a)
|
|
$ |
272,400 |
|
(a)
|
|
—————————— |
|
|
(a)
Includes
amounts allocated to KII under the ISA between us and
Contran.
|
|
(3)
|
Stock
awards to these named executive officers in the last three years consisted
of shares of our common stock we granted to Messrs. Simmons and Watson for
their director services. See the 2008 Grants of Plan-Based
Awards table below for more details regarding the 2008
grants. The 2007 and 2006 grants consisted of the
following:
|
|
|
Shares
of our Common Stock
|
|
|
|
Closing
Price on Date of Grant
|
|
Grant
Date Value of Shares of our Common Stock
|
|
|
|
|
|
|
500
|
May
17, 2007
|
$30.24
|
$15,120
|
|
500
|
May
24, 2006
|
$29.99
|
$14,995
|
These
stock awards were valued at the closing price of a share of our common stock on
the date of grant.
(4)
|
Dr.
Fiand receives his cash compensation in euros. We report these
amounts in the Summary Compensation table above in U.S. dollars based on
an average exchange rate of $1.4829, $1.3647 and $1.2486 per €1.00 for
2008, 2007 and 2006, respectively.
|
(5)
|
Represents
the compensation income or expense we recognized for the respective year
for financial statement reporting purposes for the options to purchase NL
common stock held by these named executive officers. NL granted
these stock options when we were a wholly owned subsidiary of
NL. We account for these options to purchase NL common stock
using the liability method of FAS 123R, under which we re-measure the fair
value of all outstanding stock options at each balance sheet date until
the options are exercised or otherwise settled. We use the closing
market price of NL’s common stock at each balance sheet date to determine
the fair value, which fair value cannot be less than zero. For
financial statement reporting purposes, we recognize compensation expense
or income, as applicable, as a result of increases or decreases in the
aggregate fair value of all outstanding stock options. Since the
2006 year-end closing market price of NL’s common stock was lower than the
2005 year-end closing market price and the exercise price for these stock
options, we recognized compensation income related to these stock options
for 2006. However, pursuant to guidance provided by the SEC, since this
resulting 2006 year-end reduction in compensation expense (a negative
$3,126) relates to a reversal of compensation expense incurred prior to
2006, we do not report this negative amount in this table for 2006.
While the 2007 year-end closing market price of NL’s common stock was
higher than the 2006 year-end market price, the 2006 and 2007 year-end
closing market prices remained lower than the exercise price for these
stock options. Therefore, we did not recognize any compensation
income or expense related to these stock options for 2007. The
2008 year-end closing market price was higher than the exercise price for
these stock options. Accordingly, we recognized compensation
expense related to these stock options for 2008 and reported in this table
the corresponding increase in compensation income to the named executive
officer with respect to the change in stock option values from the prior
year-end.
|
(6)
|
Represents
amounts we granted and awarded for services provided in the reported year
pursuant to our Share-in-Performance Plan. See our discussion
of the segment profit bonuses in the Compensation Discussion and Analysis
section of this proxy statement and the 2008 Grants of Plan-Based Awards
table below for more details regarding these
awards.
|
(7)
|
These
amounts represent the following changes in the actuarial present value of
Dr. Fiand’s accumulated benefit under the following plans for financial
statement reporting purposes:
|
|
|
|
|
|
Supplemental
Pension Promise (b)
|
|
Individual
Pension Promise (c)
|
|
|
|
|
|
|
|
|
|
|
|
2008
|
$ 12,167
|
|
$
3,499
|
$
(5,485)
|
$
10,181
|
|
2007
|
(4,029)
|
|
(8,891)
|
(10,192)
|
(23,112)
|
|
2006
|
4,073
|
|
7,377
|
(4,401)
|
7,049
|
|
—————————— |
|
|
(a) A
defined benefit pension plan for employees of our German
operations.
|
|
|
(b)
|
A
non-qualified, unfunded defined benefit supplemental retirement plan for
employees of our German operations that supplements their pension
benefits.
|
|
(c)
|
A
non-qualified, unfunded defined benefit supplemental retirement plan for
certain highly compensated employees of our German operations that also
supplements their pension benefits.
|
For
purposes of calculating these changes in the present value of his accumulated
benefits, we assumed the following (actual benefits will be based on actual
future facts and circumstances):
|
·
|
his
credited service and eligible earnings as of the measurement date for each
fiscal year we used for financial statement reporting purposes for these
plans would not change;
|
|
·
|
his
early retirement at his current age (since he is over 60 years of age)
without reducing his benefits;
|
|
·
|
the
commencement of the payments of his benefits under these plans at his
current age (since he is over 60 years of
age);
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
discount
rates for present value calculations at September 30, 2006 and December
31, 2007 and 2008 (the measurement dates used for financial statement
reporting purposes for the last three completed fiscal year-ends) of 4.5%,
5.5% and 5.8%, respectively, which rates are the same rates we used for
financial statement reporting purposes in determining the present value of
our aggregate accumulated benefits for all participants under these
plans.
|
Pursuant
to SEC rules, we do not report any negative changes in this column, but instead
disclose the negative change in this footnote. For more details
regarding these pension plan benefits, see the Pension Benefits section of this
proxy statement.
(8)
|
Represents
an annual car allowance we pay for the benefit of Dr.
Fiand.
|
(9)
|
Represents
the change from the prior fiscal year-end measurement date to the
following year-end measurement date in the actuarial present value of Mr.
Maas’ accumulated benefit under our domestic pension plan, which
measurement dates for the last three fiscal year-ends were September 30,
2006 and December 31, 2007 and 2008. Since we suspended all
future accruals under our domestic pension plan in 1996, any increase or
decrease in the actuarial present value of Mr. Maas’ accumulated benefit
under our domestic pension plan from measurement date to measurement date
is a result of changes in our assumptions used in calculating the present
value of the benefit he accrued in 1996, such as changes in the applicable
discount rate. For purposes of calculating the change in the
present value of his accumulated benefit under this plan from one year to
the next, we assumed the following (actual benefits will be based on
actual future facts and
circumstances):
|
|
·
|
his
credited service and eligible earnings as of the measurement date for each
fiscal year we used for financial statement reporting purposes for these
plans would not change;
|
|
·
|
his
early retirement at age 62 without reducing his
benefits;
|
|
·
|
the
commencement of the payments of his benefits under this plan at attaining
age 62;
|
|
·
|
the
choice of a single life annuity as the method to receive payments under
the plan;
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
discount
rates for present value calculations at September 30, 2006 and December
31, 2007 and 2008 of 5.8%, 6.1% and 6.1%, respectively, which
rates are the same rates we used for financial statement reporting
purposes in determining the present value of our aggregate accumulated
benefits for all participants under these
plans.
|
Pursuant
to SEC rules, we do not report any negative changes in this column, but instead
disclose the negative change in this footnote. For 2007 and 2006, the
change in Mr. Maas’ accumulated benefit under our domestic pension plan was a
negative $2,286 and $2,905, respectively. For more details regarding
these pension plan benefits, see the Pension Benefits section of this proxy
statement.
(10)
|
As
shown below, all other compensation for Mr. Maas consisted of the
following payments for his benefit:
|
|
·
|
matching
contributions pursuant to the savings feature of our savings
plan;
|
|
·
|
retirement
contributions pursuant to our savings
plan;
|
|
·
|
transition
payments paid pursuant to our savings plan;
and
|
|
·
|
life
insurance premiums we paid for his
benefit.
|
|
|
|
|
Savings
Plan Retirement Contributions
|
Savings
Plan Transition Contributions
|
Life
Insurance Premiums (a)
|
|
|
|
|
|
|
|
|
|
|
H.
Joseph
Maas
|
2008
|
$4,600
|
$9,200
|
$3,450
|
$3,005
|
$20,255
|
|
|
2007
|
$4,500
|
$9,000
|
$3,375
|
$2,857
|
$19,732
|
|
|
2006
|
$8,800
|
$8,800
|
$3,300
|
$2,451
|
$23,351
|
|
—————————— |
|
|
(a)
Under
the terms of the life insurance policy provided by these premiums, Mr.
Maas was entitled to a cash surrender value of approximately $12,645,
$10,209
and $8,382 at December 31, 2008, 2007 and 2006,
respectively.
|
|
See the
discussion of our savings plan contributions in the Compensation Discussion and
Analysis section of this proxy statement.
2008 Grants of
Plan-Based Awards. The following table sets forth details
of:
|
·
|
the
stock awards we granted to certain of our named executive officers in 2008
for their services as directors;
and
|
|
·
|
the
ranges of the potential segment profit awards our employed named executive
officers could have received if we had achieved a different segment profit
level for 2008 or the officer had achieved a different performance rating
for 2008.
|
Mr.
Swalwell was not eligible to receive any of our plan-based awards in
2008.
2008 GRANTS OF PLAN-BASED AWARDS
(1)
|
Grant
|
Date
of
|
Estimated
Possible Payouts Under
Non-Equity
Incentive Plan Awards
|
All
Other Stock Awards: Number of Shares of Stock
or
|
Grant
Date Fair Value of Stock and Option Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Harold
C. Simmons
|
05/15/08
|
01/01/04
|
(2)
|
n/a
|
n/a
|
n/a
|
500
|
(2)
|
$11,985
|
(2)
|
|
|
|
|
|
|
|
|
|
|
|
Steven
L. Watson
|
05/15/08
|
01/01/04
|
(2)
|
n/a
|
n/a
|
n/a
|
500
|
(2)
|
11,985
|
(2)
|
|
|
|
|
|
|
|
|
|
Ulfert
Fiand (3)
|
(4)
|
(4)
|
(4)
|
$44,900
to $192,600
|
$49,400
to $272,900
|
$112,400
to $385,200
|
n/a
|
n/a
|
|
|
|
|
|
|
|
|
|
H.
Joseph Maas
|
(4)
|
(4)
|
(4)
|
$38,500
to $165,200
|
$42,400
to $234,000
|
$96,300
to $330,300
|
n/a
|
n/a
|
——————————
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
(2)
|
As
preapproved in 2004 by our management development and compensation
committee, on the day of each of our annual stockholder meetings each of
our directors elected on that day receives a grant of shares of our common
stock under our 2003 Long-Term Incentive Plan as determined by the
following formula based on the closing price of a share of the common
stock on the date of such meeting.
|
|
Range
of Closing Price Per
Share
on the Date of Grant
|
|
Shares
of Common
Stock
to Be Granted |
|
|
|
|
|
Under
$5.00
|
2,000
|
|
$5.00
to $9.99
|
1,500
|
|
$10.00
to $20.00
|
1,000
|
|
Over
$20.00
|
500
|
These
shares are fully vested and tradable immediately on the date of grant, other
than restrictions under applicable securities laws. For the purposes
of this table and financial statement reporting, these stock awards were valued
at the $23.97 closing price per share of our common stock on their date of
grant.
(3)
|
Dr.
Fiand receives his cash compensation in euros. We report these
amounts in the table above in U.S. dollars based on an average exchange
rate for 2008 of $1.4829 per €1.00.
|
(4)
|
On
February 14, 2008, our management development and compensation committee
approved under our Share in Performance Plan threshold, target and maximum
segment profit levels and a reduced target level if we were to achieve
segment profit at approximately 70% or higher of the target level but not
achieve the target level. The ranges of amounts reported in
this table are the ranges of segment profit bonuses each of these named
executive officers could have received based on each of the 2008 segment
profit level targets and the possible ranges of the 2008 individual
performance ratings the named executive officer might have
received. The minimum dollar amounts in the ranges for the
target level awards in this table have been reduced by 30% to reflect the
minimum reduced target level award. For purposes of these
calculations, the base salary used was the actual base salary paid through
2008, which is the same amount on which the actual segment profit bonuses
were determined.
|
On
February 12, 2009 the committee determined that we had achieved 2008 segment
profits at a level of 80% of the target level (exclusive of an approximately
$6.9 million of income related to a cumulative non-cash pension adjustment at
our German operations) and the committee approved the payment of segment profit
bonuses for 2008 at a level that approximates 80% of the target
level. For further discussion on this determination, see the
Compensation Discussion and Analysis section of this proxy
statement. As a result of this determination, we paid 2008 segment
profit bonuses to Dr. Fiand and Mr. Maas, which bonuses are reported in the
non-equity incentive plan compensation column in the Summary Compensation table
in this proxy statement.
Outstanding
Equity Awards at December 31, 2008. The following table
provides information with respect to the outstanding stock options to purchase
shares of NL common stock held by our named executive officers as of December
31, 2008 that were granted for services they provided to us when we were a
wholly owned subsidiary of NL. Dr. Fiand and Mr. Maas were the only
named executive officers that held such stock options at December 31,
2008.
OUTSTANDING EQUITY AWARDS AT DECEMBER
31, 2008 (1)
|
|
|
Number
of Shares
Underlying
Unexercised
Options at
December
31, 2008 (#)
|
|
|
|
|
|
|
|
|
|
Ulfert
Fiand
|
1,200
|
(2)
|
-0-
|
$
11.4850 |
02/07/11
|
|
|
|
|
|
|
|
H.
Joseph
Maas
|
1,200
|
(2)
|
-0-
|
11.4850 |
02/07/11
|
——————————
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
(2)
|
These
stock options vested at a rate of 20% on each of the first five
anniversary dates of the date of grant of the stock option, which date of
grant was the tenth anniversary prior to the expiration date of the stock
option.
|
Option Exercises
and Stock Vested. During 2008, no named executive officer
exercised any stock options or had any stock awards vest. For stock
awards granted to Messrs. Harold Simmons and Watson in 2008 that had no vesting
restrictions, see the 2008 Grants of Plan-Based Awards table above.
Pension
Benefits. Only Dr. Fiand and Mr. Maas are eligible for pension
benefits for which we are obligated to pay. The following table sets
forth, among other things, information regarding the actuarial present value of
their accumulated pension benefits.
2008 PENSION BENEFITS
(1)
|
|
Number
of Years Credited Service
|
Present
Value of Accumulated Benefit
|
|
|
|
|
Ulfert
Fiand
|
Bayer
Pensionskasse
|
21
|
$172,900
|
(2)
|
|
Supplemental
Pension Promise
|
21
|
330,700
|
(2)
|
|
Individual
Pension
Promise
|
21
|
108,200
|
(2)
|
|
|
|
$611,800
|
(2)
|
|
|
|
|
|
H.
Joseph Maas
|
Retirement
Program of NL Industries, Inc.
|
17.5
|
$293,700
|
(3)
|
——————————
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
(2)
|
Dr.
Fiand will receive his pension and supplemental pension benefits in
euros. We report these amounts in the table above in U.S.
dollars based on an average exchange rate for 2008 of $1.4829 per
€1.00. For purposes of calculating the present values of his
accumulated benefits, we assumed the following (actual benefits will be
based on actual future facts and
circumstances):
|
|
·
|
his
credited service and eligible earnings as of December 31, 2008 (the last
measurement date used for financial statement reporting purposes for these
plans) would not change;
|
|
·
|
his
early retirement at his current age (since he is over 60 years of age)
without reducing his benefits;
|
|
·
|
the
commencement of the payments of his benefits under these plans at his
current age (since he is over 60 years of
age);
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
a
discount rate for the present value calculation at December 31, 2008
of 5.8%, which rate is the same rate we used for financial
statement reporting purposes in determining the present value of our
aggregate accumulated benefits for all participants under these
plans.
|
(3)
|
For
purposes of calculating this present value of Mr. Maas’ accumulated
benefit, we assumed following (actual benefits will be based on actual
future facts and circumstances):
|
|
·
|
his
credited service and final eligible earnings as of December 31, 2008 (the
last measurement date used for financial statement reporting purposes for
this plan) would not change;
|
|
·
|
his
early retirement at age 62 without reducing his
benefits;
|
|
·
|
the
commencement of the payments of his benefits under these plans at
attaining age 62;
|
|
·
|
the
choice of a single life annuity as the method to receive payments under
the plan;
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
a
discount rate for the present value calculation at December 31, 2008 of
6.1%, which rate is the same rate we used for financial statement
reporting purposes in determining the present value of our aggregate
accumulated benefits for all participants under this
plan.
|
Bayer Pensionskasse, Supplemental
Pension Promise and Individual Pension Promise. Employees of
our German operations (including wage earners) who have been employees since
prior to January 1, 2005, contributed for five years and are less than 55 years
of age are covered by the Bayer Pensionskasse. Each employee
contributes 2% of eligible earnings excluding bonus, up to the social security
contribution ceiling (currently €64,800) and the Bayer Pensionskasse provides an
annual benefit of 44% of such employee’s accumulated contributions (with a
minimum benefit of approximately €13 per month). The purpose of this
plan is to provide funded, tax-qualified benefits up to the German social
security contribution ceiling, which is currently of €64,800.
The
Supplemental Pension Promise also covers all employees of the German operations
who have completed ten years of service. Our German operations accrue
11.25% of the participants’ eligible annual earnings excluding bonus in excess
of the social security contribution ceiling, up to a maximum of
€114,600. The Supplemental Pension Promise provides an annual
retirement benefit of 20% of all accruals made by our German
operations. The purpose of this plan is to provide participants with
a benefit in excess of what would be provided under the Bayer Pensionskasse due
to the German social security contribution ceiling.
The
Individual Pension Promise covers each of the sixteen department heads of our
German operations. The Individual Pension Promise provides an annual
retirement benefit of €6,135 to the sixteen department heads. The
purpose of this plan is to provide certain of our more highly compensated German
employees with a benefit in excess of what would be provided under the Bayer
Pensionskasse and the Supplemental Pension Promise due to the combined ceiling
of €114,600 of those plans.
Dr. Fiand
is eligible to receive a pension through the Bayer Pensionskasse, the
Supplemental Pension Promise and the Individual Pension
Promise. Benefits for each of these plans are payable upon retirement
and the attainment of ages specified in the plans. In each case under
these three plans, he is currently eligible to retire and receive unreduced
benefits since he is 60 years old.
Domestic Defined Benefit Pension
Plan. In 1996, we suspended all future accruals under our
domestic defined benefit pension plan and closed the plan to new
participants. The pension benefits are payable upon retirement and
attainment of ages specified in the plan. Normal retirement is 65
years of age with five years of participation in the plan. However,
participants can retire at age 62 with 30 years of service with unreduced
benefits. After retirement, married participants, unless they choose
otherwise with the consent of their spouse, receive a qualified joint and
survivor annuity in exchange for a reduced benefit payout to the participant (as
compared to the straight life annuity option). The purpose of this
plan was to provide funded, tax-qualified benefits up to specified statutory
limits on compensation and benefits. Generally, a participant’s years
of credited service under the plan equals the years he has worked for
us. However, in certain instances, we adjusted such years of credited
service on an ad hoc basis. Mr. Maas is the only named executive
officer who participates in this plan. He will be eligible to retire
and receive unreduced benefits under this plan at age 62 due to attaining 30
years of service under the plan (without any deviation from his actual service)
prior to his 62nd
birthday.
Nonqualified
Deferred Compensation. We do not owe any nonqualified deferred
compensation to our named executive officers.
Management
Consultant. Following his
resignation as our chief executive officer in 2003, Lawrence A. Wigdor entered
into a consultancy arrangement with us pursuant to which he provides ongoing
management services to our titanium dioxide operations. In 2008, Dr.
Wigdor received monthly payments of $84,000 under the
arrangement. For the remaining term of the arrangement, Dr. Wigdor
will receive annual discretionary bonuses as determined by our chief executive
officer. Under the consultancy arrangement, as amended, if we
terminate the consultancy arrangement prior to December 31, 2010, Dr. Wigdor
will receive twelve months compensation and medical and dental coverage until
the earlier of 18 months following the date of involuntary termination or
December 31, 2010. The arrangement provides Dr. Wigdor, among other
things, various other benefits, including, secretarial support at our New Jersey
office.
During
2008, Dr. Wigdor did not exercise any of his previously granted options to
purchase shares of NL common stock. At December 31, 2008, Dr. Wigdor
held options to purchase 23,000 shares of NL common stock, of which 20,000 were
exercisable at a price per share of $11.485 and expire in February 2011 and
3,000 were exercisable at a price per share of $5.625 and expire in February
2010. Since the 2008 year-end closing market price of our common
stock was higher as compared to the 2007 year-end market price, we recognized
for financial statement reporting purposes compensation expense for these stock
options in 2008 of $44,210.
Following
his resignation in 2003, Dr. Wigdor elected to receive his retirement benefits
under our domestic defined benefit pension plan at an early retirement
age. He began receiving monthly payments approximately equal to an
annual payment amount of $29,000 in 2003, which will continue for the remainder
of his life. The actuarial present value of his accumulated pension
benefits using assumptions similar as those set forth in footnote 3 to the 2008
pension benefits table (other than the assumptions applicable prior to his
retirement) was $290,300 at December 31, 2008, the last measurement date we used
for financial statement reporting purposes for this plan. Pursuant to
his employment agreement entered into in 1990, Dr. Wigdor was credited with an
additional 18 years of service under this plan, which allowed him to commence
receiving his retirement benefit when he retired two months before he turned 62
with only a small reduction for age. As already discussed, we do not
have any plans for adjusting years of credited service under a pension plan and
do this on an ad hoc basis only.
During
2008, Dr. Wigdor’s sister-in-law and son were employed by us and received
customary employee benefits, including medical insurance. Both
persons continue to be employed by us.
Director
Compensation. Our directors are entitled to receive
compensation for their services as directors. Our directors receive
an annual retainer of $20,000, paid in quarterly installments, plus a fee of
$1,000 per day for attendance at meetings of the board of directors or its
committees and at a daily rate ($125 per hour) for other services rendered on
behalf of our board of directors or its committees. In addition to
the annual retainers for service on the board of directors, the chairman of our
audit committee and any member of our audit committee whom the board identified
as an “audit committee financial expert” for purposes of the annual proxy
statement receive an annual retainer of $20,000, paid in quarterly installments
(provided that if one person serves in both capacities only one such retainer is
paid), and other members of our audit committee receive an annual retainer of
$10,000, paid in quarterly installments, for their service on the audit
committee. Members of our management development and compensation
committee also receive an annual retainer of $2,000, paid in quarterly
installments, for their service on that committee. If a director dies
while serving on our board of directors, his designated beneficiary or estate
will be entitled to receive a death benefit equal to the annual retainer then in
effect. We reimburse our directors for reasonable expenses incurred
in attending meetings and in the performance of other services rendered on
behalf of our board of directors or its committees.
As
discussed in footnote 2 to the 2008 Grants of Plan-Based Awards table, on the
day of each annual stockholder meeting, each of our directors elected on that
date receives a grant of shares of our common stock as determined by the closing
price of a share of our common stock on the date of such meeting. The
following table provides information with respect to compensation our directors
earned or received for their 2008 director services provided to us.
2008 DIRECTOR COMPENSATION
(1)
|
Fees
Earned or Paid in Cash (2)
|
|
|
|
|
|
|
Keith
R.
Coogan
|
$39,000
|
$11,985
|
$50,985
|
Cecil
H. Moore,
Jr.
|
47,000
|
11,985
|
58,985
|
George
E.
Poston
|
39,000
|
11,985
|
50,985
|
Glenn
R.
Simmons
|
23,000
|
11,985
|
34,985
|
R.
Gerald
Turner
|
39,000
|
11,985
|
50,985
|
——————————
(1)
|
Certain
non-applicable columns have been omitted from this table. See
footnotes 2 and 3 to the 2008 Summary Compensation table and 2008 Grants
of Plan-Based Awards table in this proxy statement for compensation Harold
C. Simmons and Steven L. Watson earned or received from us for director
services.
|
(2)
|
Represents
retainers and meeting fees the director received or earned for director
services he provided to us in 2008.
|
(3)
|
Represents
the value of 500 shares of our common stock we granted to each of these
directors. For the purposes of this table and financial
statement reporting, these stock awards were valued at the closing price
per share of such shares on their date of grant, which closing price and
date of grant were $23.97 and May 15, 2008,
respectively.
|
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
Section
16(a) of the Securities Exchange Act requires our executive officers, directors
and persons who own more than 10% of a registered class of our equity securities
to file reports of ownership with the SEC, the NYSE and us. Based
solely on the review of the copies of such forms and representations by certain
reporting persons, we believe that for 2008 our executive officers, directors
and 10% stockholders complied with all applicable filing requirements under
section 16(a). Do to an inadvertence by our staff, Harold C. Simmons
filed a Form 4 on January 21, 2009 after the required filing date reporting two
purchases of our common stock on January 15, 2009.
CERTAIN RELATIONSHIPS AND TRANSACTIONS
Related Party
Transaction Policy. As set forth in our code of business
conduct and ethics, from time to time, we engage in transactions with affiliated
companies. In addition, certain of our executive officers and
directors serve as executive officers and directors of affiliated
companies. With respect to transactions between or involving us and
one or more of our affiliates, it is not a violation of the code if the
transaction, in our opinion, is no less favorable to us than could be obtained
from unrelated parties, or the transaction, in the absence of stockholder
ratification or approval by our independent directors, is fair to all companies
involved. Furthermore, the code provides that:
|
·
|
directors
and officers owe a duty to us to advance our legitimate interests when the
opportunity to do so arises; and
|
|
·
|
they
are prohibited from (a) taking for themselves personally opportunities
that properly belong to us or are discovered through the use of our
property, information or position; (b) using corporate property,
information or position for improper personal gain; and (c) competing with
our interests.
|
Our
executive officers are responsible for applying this policy to related
parties. No specific procedures are in place, however, that govern
the treatment of transactions among us and our related entities, although we and
such entities may implement specific procedures as appropriate for particular
transactions. Provided, in our judgment, the standard set forth in
the code of business conduct and ethics is satisfied, we believe, given the
number of companies affiliated with Contran, that related party transactions
with our affiliates, in many instances (such as achieving economies of scale),
are in our best interest. In certain instances, our executive
officers may seek the approval or ratification of such transactions by our
independent directors, but there is no quantified threshold for seeking this
approval.
Relationships
with Related Parties. As set forth
under the Security Ownership section of this proxy statement, Harold C. Simmons,
through Contran, may be deemed to control us. We and other entities
that may be deemed to be controlled by or related to Mr. Simmons sometimes
engage in the following:
|
·
|
intercorporate
transactions, such as guarantees, management, expense and insurance
sharing arrangements, shared fee arrangements, tax sharing agreements,
joint ventures, partnerships, loans, options, advances of funds on open
account and sales, leases and exchanges of assets, including securities
issued by both related and unrelated parties;
and
|
|
·
|
common
investment and acquisition strategies, business combinations,
reorganizations, recapitalizations, securities repurchases and purchases
and sales (and other acquisitions and dispositions) of subsidiaries,
divisions or other business units, which transactions have involved both
related and unrelated parties and have included transactions that resulted
in the acquisition by one related party of an equity interest in another
related party.
|
We
periodically consider, review and evaluate and understand that Contran and
related entities periodically consider, review and evaluate such
transactions. Depending upon the business, tax and other objectives
then relevant and restrictions under indentures and other agreements, it is
possible that we might be a party to one or more of such transactions in the
future. In connection with these activities, we may consider issuing
additional equity securities or incurring additional
indebtedness. Our acquisition activities have in the past and may in
the future include participation in acquisition or restructuring activities
conducted by other companies that may be deemed to be related to Harold C.
Simmons.
Certain
directors or executive officers of CompX, Contran, Keystone, NL, TIMET or Valhi
also serve as our directors or executive officers. Such relationships
may lead to possible conflicts of interest. These possible conflicts
of interest may arise under circumstances in which such companies may have
adverse interests. In such an event, we implement such procedures as
appropriate for the particular transaction.
Intercorporate
Services Agreements. As
discussed elsewhere in this proxy statement, we and certain related companies
have entered into ISAs. Under the ISAs, employees of one company
provide certain services, including executive officer services, to the other
company on a fixed fee basis. The services rendered under the ISAs
may include executive, management, financial, internal audit, accounting, tax,
legal, insurance, real estate management, environmental management, risk
management, treasury, aviation, human resources, technical, consulting,
administrative, office, occupancy and other services as required from time to
time in the ordinary course of the recipient’s business. The fees
paid pursuant to the ISAs are generally based upon an estimate of the time
devoted by employees of the provider of the services to the business of the
recipient and the employer’s cost related to such employees, which includes the
employees’ cash compensation and an overhead component that takes into account
other employment related costs. Generally, each of the ISAs renews on
a quarterly basis, subject to the termination by either party pursuant to a
written notice delivered 30 days prior to the start of the next
quarter. Because of the number of companies related to Contran and
us, we believe we benefit from cost savings and economies of scale gained by not
having certain management, financial, legal, tax, real estate and administrative
staffs duplicated at each company, thus allowing certain individuals to provide
services to multiple companies. With respect to a publicly held
company that is a party to an ISA, the ISA and the related aggregate annual
charge are approved by the independent directors of the company after receiving
a recommendation from the company’s management development and compensation
committee. See the Compensation of our
Named Executive Officers Employed by Contran part of the Compensation Discussion
and Analysis section in this proxy statement for a more detailed discussion on
the procedures and considerations taken by our independent directors in
approving the aggregate 2008 ISA fee charged by Contran to us.
In 2008,
we paid Contran fees of $6.8 million for its services under the ISA between
Contran and us, including amounts for the services of certain of our named
executive officers that are employees of Contran, as disclosed above in the 2008
Summary Compensation table. In 2009, we expect to pay Contran fees of
$7.4 million for its services under this ISA, including the services of certain
of our named executive officers that are employees of Contran. We
also pay director compensation and expenses directly to Messrs. Harold and Glenn
Simmons and Watson for their services as our directors, as disclosed above in
the 2008 Summary Compensation table and the 2008 director compensation
table.
Insurance
Matters. We and Contran participate in a combined risk
management program. Pursuant to the program, Contran and certain of
its subsidiaries and related entities, including us and certain of our
subsidiaries and related entities, purchase certain insurance policies as a
group, with the costs of the jointly owned policies being apportioned among the
participating companies. Tall Pines and EWI provide for or broker
these insurance policies. Tall Pines is a captive insurance company
wholly owned by Valhi, and EWI is a reinsurance brokerage and risk management
company wholly owned by NL. Consistent with insurance industry
practices, Tall Pines and EWI receive commissions from insurance and reinsurance
underwriters and/or assess fees for the policies that they provide or
broker.
With
respect to certain of such jointly owned insurance policies, it is possible that
unusually large losses incurred by one or more insureds during a given policy
period could leave the other participating companies without adequate coverage
under that policy for the balance of the policy period. As a result,
Contran and certain of its subsidiaries or related companies, including us, have
entered into a loss sharing agreement under which any uninsured loss is shared
by those companies who have submitted claims under the relevant
policy. We believe the benefits in the form of reduced premiums and
broader coverage associated with the group coverage for such policies justify
the risks associated with the potential for any uninsured loss.
During
2008, we paid premiums of approximately $8.5 million for insurance policies Tall
Pines provided or EWI brokered, including approximately $1.5 million paid by
Louisiana Pigment Company, L.P., a partnership of which a wholly owned
subsidiary of ours and a subsidiary of Huntsman Corporation
(NYSE: HUN) each own 50%. These amounts principally
included payments for reinsurance and insurance premiums paid to unrelated third
parties, but also included commissions paid to Tall Pines and
EWI. Tall Pines purchases reinsurance for substantially all of the
risks it underwrites. In our opinion, the amounts that we, our
subsidiaries and Louisiana Pigment paid for these insurance policies and the
allocation among us and our related entities of relative insurance premiums are
reasonable and at least as favorable to those we or they could have obtained
through unrelated insurance companies or brokers. We expect that
these relationships with Tall Pines and EWI will continue in
2009. Because we believe there is no conflict of interest regarding
our participation in the combined risk management program, our audit committee
received a report regarding this program but our independent directors were not
asked to approve it.
Tax
Matters. We and our qualifying subsidiaries are members of the
consolidated U.S. federal tax return of which Contran is the parent company,
which we refer to as the “Contran Tax Group.” As a member of the
Contran Tax Group and pursuant to certain tax sharing agreements or policies,
each of the members and its qualifying subsidiaries compute provisions for U.S.
income taxes on a separate company basis using tax elections made by
Contran. Pursuant to the tax sharing agreements or policies and using
tax elections made by Contran, each of the parties makes payments or receives
payments in amounts it would have paid to or received from the U.S. Internal
Revenue Service had it not been a member of the Contran Tax Group but instead
had been a separate taxpayer. Refunds are generally limited to
amounts previously paid under the respective tax sharing agreement or
policy. We and our qualifying subsidiaries are also a part of
consolidated tax returns filed by Contran in certain U.S. state
jurisdictions. The terms of the applicable tax sharing agreements or
policies also apply to state payments to these jurisdictions.
Under
applicable law, we, as well as every other member of the Contran Tax Group, are
each jointly and severally liable for the aggregate federal income tax liability
of Contran and the other companies included in the group for all periods in
which we are included in the group. Under our tax agreement with
Valhi, Valhi agrees to indemnify us for any liability for income taxes of the
Contran Tax Group in excess of our tax liability previously computed and paid by
us in accordance with the tax allocation policy.
Under
certain circumstances, tax regulations could require Contran to treat items
differently than we would have treated them on a stand alone
basis. In such instances, accounting principles generally accepted in
the United States of America require us to conform to Contran’s tax
elections. In 2008, pursuant to our tax sharing agreement and
policies with Valhi, we received a net cash refund from Valhi of approximately
$2.7 million. Because the calculation of payments or refunds is
determined pursuant to the applicable tax law in accordance with such tax
sharing agreement and policies, our independent directors are not asked to
approve any such payments or refunds.
Loan from
NL. In 2008, our independent directors and NL’s independent
directors approved the terms of a loan to us from NL of up to $40.0
million. Our loan from NL under a revolving note is unsecured, bears
interest at the prime rate minus 1.5% (1.75% at March 25, 2009) with interest
payable quarterly and all principal and unpaid interest due on the earlier of
demand or December 31, 2009. The amount of our outstanding loan we
have from NL at any time is solely at NL’s discretion. During 2008,
the largest amount of principal we owed NL under this revolving note was $36.1
million. At March 25, 2009, we owed NL under this revolving note
$16.6 million of outstanding principal. We paid NL interest on this
revolving note of approximately $100,600 in 2008. While this note is
due on demand, we have the ability and intent to refinance the outstanding
amount payable by using borrowing availability under our U.S. revolving credit
facility that matures in September 2011.
Simmons Family
Matters. In addition to the services he provides under our ISA
with Contran as discussed under the Intercorporate Services Agreements section
above, certain family members of Harold C. Simmons also provide services to us
pursuant to this ISA. In 2008, L. Andrew Fleck (a step-son of Harold
Simmons) provided certain real property management services to us pursuant to
this ISA. The portion of the fees we paid to Contran in 2008 pursuant
to this ISA attributable to the services of Mr. Fleck was not enough to require
quantification under SEC rules. See the Intercorporate Services
Agreements section above for a more detailed discussion on the procedures and
considerations taken by our independent directors in approving the aggregate
2008 ISA fee Contran charged us. As disclosed in the director
compensation table in this proxy statement, Mr. Glenn Simmons (a brother of
Harold Simmons) also received compensation in cash and stock from us for his
services as a director for 2008 and is expected to continue to receive similar
compensation for 2009 for such services.
Our audit
committee of the board of directors is comprised of four directors and operates
under a written charter adopted by the board of directors. All
members of our audit committee meet the independence standards established by
the board of directors and the NYSE and promulgated by the SEC under the
Sarbanes-Oxley Act of 2002. The audit committee charter is available
on our website at www.kronosww.com under the corporate
governance section.
Our
management is responsible for, among other things, preparing our consolidated
financial statements in accordance with accounting principles generally accepted
in the United States of America, or “GAAP,” establishing and maintaining
internal control over financial reporting (as defined in Securities Exchange Act
Rule 13a-15(f)) and evaluating the effectiveness of such internal control over
financial reporting. Our independent registered public accounting
firm is responsible for auditing our consolidated financial statements in
accordance with the standards of the Public Company Accounting Oversight Board
(United States) and for expressing an opinion on the conformity of the financial
statements with GAAP. Our independent registered public accounting
firm is also responsible for auditing our internal control over financial
reporting in accordance with such standards and for expressing an opinion on our
internal control over financial reporting. Our audit committee
assists the board of directors in fulfilling its responsibility to oversee
management’s implementation of our financial reporting process. In
its oversight role, our audit committee reviewed and discussed the audited
financial statements and our internal control over financial reporting with
management and with PwC, our independent registered public accounting firm for
2008.
Our audit
committee met with PwC and discussed any issues deemed significant by our
independent registered public accounting firm, including the matters required to
be discussed by the Statement on Auditing Standards No. 61, Communication with Audit Committee,
as amended, as adopted by the Public Company Accounting Oversight
Board. PwC has provided to our audit committee written disclosures
and the letter required by applicable requirements of the Public Company
Accounting Oversight Board regarding the independent accountant’s communications
with the audit committee concerning independence, and our audit committee
discussed with PwC that firm’s independence. Our audit committee also
concluded that PwC’s provision of non-audit services to us and our related
entities is compatible with PwC’s independence.
Based
upon the foregoing considerations, our audit committee recommended to the board
of directors that our audited financial statements be included in our 2008
Annual Report on Form 10-K for filing with the SEC.
Members
of our audit committee of the board of directors respectfully submit the
foregoing report.
|
Cecil
H. Moore, Jr.
Chairman
of our Audit Committee
|
|
George
E. Poston
Member
of our Audit Committee
|
|
|
|
|
|
Keith
R. Coogan
Member
of our Audit Committee
|
|
R.
Gerald Turner
Member
of our Audit Committee
|
Independent
Registered Public Accounting Firm. PwC served as our
independent registered public accounting firm for the year ended December 31,
2008. Our audit committee has appointed PwC to review our quarterly
unaudited condensed consolidated financial statements to be included in our
Quarterly Reports on Form 10-Q for the first quarter of 2009. We
expect PwC will be considered for appointment to:
|
·
|
review
our quarterly unaudited condensed consolidated financial statements to be
included in our Quarterly Reports on Form 10-Q for the second and third
quarters of 2009 and the first quarter of 2010;
and
|
|
·
|
audit
our annual consolidated financial statements and internal control over
financial reporting for the year ending December 31,
2009.
|
Representatives
of PwC are not expected to attend the annual meeting.
Fees Paid to
PricewaterhouseCoopers LLP. The following table shows the
aggregate fees that our audit committee has authorized and PwC has billed or is
expected to bill to us for services rendered for 2007 and
2008. Additional fees for 2008 may subsequently be authorized and
paid to PwC, in which case the amounts disclosed below for fees paid to PwC for
2008 would be adjusted to reflect such additional payments in our proxy
statement relating to next year’s annual stockholder meeting.
|
|
|
2008
|
|
|
|
|
|
|
|
Audit
Fees (1)
|
$
1,966,000
|
$
2,056,000
|
|
|
Audit-Related
Fees (2)
|
15,000
|
236,000
|
|
|
Tax
Fees (3)
|
19,000
|
2,000
|
|
|
All
Other Fees
|
-0-
|
-0-
|
|
|
|
|
|
Total
|
$2,000,000
|
$2,294,000
|
|
——————————
(1)
|
Fees
for the following services:
|
|
(a)
|
audits
of consolidated year-end financial statements and of internal control over
financial reporting for each year;
|
|
(b)
|
reviews
of the unaudited quarterly financial statements appearing in Forms 10-Q
for each of the first three quarters of each
year;
|
|
(c)
|
consents
and/or assistance with registration statements filed with the
SEC;
|
|
(d)
|
normally
provided statutory or regulatory filings or engagements for each year;
and
|
|
(e)
|
the
estimated out-of-pocket costs PwC incurred in providing all of such
services, for which PwC is
reimbursed.
|
(2)
|
Fees
for assurance and related services reasonably related to the audit or
review of financial statements for each year. These services
included accounting consultations and attest services concerning financial
accounting and reporting standards and advice concerning internal controls
over financial reporting. For 2008, these fees comprise fees
for audits of revisions to prior year statutory financial statements due
to tax audit adjustments.
|
(3)
|
Permitted
fees for tax compliance, tax advice and tax planning
services.
|
Preapproval
Policies and Procedures. For the purpose of maintaining the
independence of our independent registered public accounting firm, our audit
committee has adopted policies and procedures for the preapproval of audit and
permitted non-audit services the firm provides to us or any of our
subsidiaries. We may not engage the firm to render any audit or
permitted non-audit service unless the service is approved in advance by our
audit committee pursuant to the committee’s amended and restated preapproval
policy. Pursuant to the policy:
|
·
|
the
committee must specifically preapprove, among other things, the engagement
of our independent registered public accounting firm for audits and
quarterly reviews of our financial statements, services associated with
certain regulatory filings, including the filing of registration
statements with the SEC, and services associated with potential business
acquisitions and dispositions involving us;
and
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·
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for
certain categories of permitted non-audit services of our independent
registered public accounting firm, the committee may preapprove limits on
the aggregate fees in any calendar year without specific approval of the
service.
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These permitted
non-audit services include:
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·
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audit
services, such as certain consultations regarding accounting treatments or
interpretations and assistance in responding to certain SEC comment
letters;
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·
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audit-related
services, such as certain other consultations regarding accounting
treatments or interpretations, employee benefit plan audits, due diligence
and control reviews;
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·
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tax
services, such as tax compliance and consulting, transfer pricing, customs
and duties and expatriate tax services;
and
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·
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other
permitted non-audit services, such as assistance with corporate governance
matters and filing documents in foreign jurisdictions not involving the
practice of law.
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The
policy also lists certain services for which the independent auditor is always
prohibited from providing to us under applicable requirements of the SEC or the
Public Company Accounting Oversight Board.
Pursuant
to the policy, our audit committee has delegated preapproval authority to the
chairman of the committee or his designee to approve any fees in excess of the
annual preapproved limits for these categories of permitted non-audit services
provided by our independent registered public accounting firm. The
chairman must report any action taken pursuant to this delegated authority at
the next meeting of the committee.
For 2008
our audit committee preapproved all PwC’s services provided to us or any of our
subsidiaries in compliance with our amended and restated preapproval policy
without the use of the SEC’s de minimis exception to such
preapproval requirement.
The board
of directors knows of no other business that will be presented for consideration
at the annual meeting. If any other matters properly come before the
meeting, the persons designated as agents in the enclosed proxy card or voting
instruction form will vote on such matters in accordance with their reasonable
judgment.
2008 ANNUAL REPORT ON FORM 10-K
A copy of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2008 is
included as part of the annual report mailed to our stockholders with this proxy
statement and may also be accessed on our website at www.kronosww.com.
Pursuant
to an SEC rule concerning the delivery of annual reports and proxy statements, a
single set of these documents may be sent to any household at which two or more
stockholders reside if they appear to be members of the same
family. Each stockholder continues to receive a separate proxy
card. This procedure, referred to as householding, reduces the volume
of duplicate information stockholders receive and reduces mailing and printing
expenses. A number of brokerage firms have instituted
householding. Certain beneficial stockholders who share a single
address may have received a notice that only one annual report and proxy
statement would be sent to that address unless a stockholder at that address
gave contrary instructions. If, at any time, a stockholder who holds
shares through a broker no longer wishes to participate in householding and
would prefer to receive a separate proxy statement and related materials, or if
such stockholder currently receives multiple copies of the proxy statement and
related materials at his or her address and would like to request householding
of our communications, the stockholder should notify his or her
broker. Additionally, we will promptly deliver a separate copy of our
2008 annual report or this proxy statement to any stockholder at a shared
address to which a single copy of such documents was delivered, upon the written
or oral request of the stockholder.
To obtain
copies of our 2008 annual report or this proxy statement without charge, please
mail your request to the attention of A. Andrew R. Louis, corporate secretary,
at Kronos Worldwide, Inc., Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700,
Dallas, Texas 75240-2697, or call him at 972.233.1700.
Kronos
Worldwide, Inc.
Dallas,
Texas
April 14,
2009
Kronos
Worldwide, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
Important Notice Regarding the
Availability of Proxy Materials for the
Annual
Stockholder Meeting to Be Held on May 14, 2009.
The proxy statement is available at www.kronosww.com/proxy and the annual report to
stockholders
(including Kronos Worldwide’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2008)
is available at www.kronosww.com/annrpt.
Dear
Stockholder:
Kronos
Worldwide, Inc. encourages you to take advantage of new and convenient ways by
which you can vote your shares. You can vote your shares electronically
through the internet or by telephone. This eliminates the need to return
this proxy card.
Your
electronic or telephonic vote authorizes the agents named on this proxy card to
vote in the same manner as if you marked, signed, dated and returned this proxy
card. If you vote your shares electronically or telephonically, do not
mail back this proxy card.
Your
vote is important. Thank you for voting.
▼ IF
YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD
ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE. ▼
--------------------------------------------------------------------------------------------------------------------------------------------------------------
Proxy
- Kronos Worldwide, Inc.
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF KRONOS WORLDWIDE,
INC.
FOR
THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD MAY 14, 2009
The
undersigned hereby appoints Steven L. Watson, Robert D. Graham and A. Andrew R.
Louis, and each of them, proxy and attorney-in-fact for the undersigned, with
full power of substitution, to vote on behalf of the undersigned at the 2009
Annual Meeting of Stockholders (the “Meeting”) of Kronos Worldwide, Inc., a
Delaware corporation (“Kronos Worldwide”), to be held at Kronos Worldwide’s
corporate offices at Three Lincoln Centre, 5430 LBJ Freeway, Suite 1700, Dallas,
Texas on Thursday, May 14, 2009, at 10:00 a.m. (local time), and at any
adjournment or postponement of the Meeting, all of the shares of common stock,
par value $0.01 per share, of Kronos Worldwide standing in the name of the
undersigned or that the undersigned may be entitled to vote on the proposals set
forth, and in the manner directed, on this proxy card.
THIS
PROXY AUTHORIZATION MAY BE REVOKED AS SET FORTH IN THE PROXY STATEMENT THAT
ACCOMPANIED THIS PROXY CARD.
The
agents named on this proxy card, if this card is properly executed, will vote in
the manner directed on this card. If no direction is made, the agents will
vote “FOR” all nominees named on the reverse side of this card for election as
directors and, to the extent allowed by applicable law, in the discretion of the
agents as to all other matters that may properly come before the Meeting and any
adjournment or postponement thereof.
PLEASE
SIGN, DATE AND MAIL THIS PROXY CARD PROMPTLY IN THE ENCLOSED
ENVELOPE.
SEE
REVERSE SIDE.
Electronic
Voting Instructions
You
can vote by Internet or telephone!
Available
24 hours a day, 7 days a week!
Instead
of mailing your proxy card, you may choose one of the two voting methods
outlined below to instruct how the agents named on this proxy card should vote
your shares.
VALIDATION
DETAILS ARE LOCATED BELOW IN THE TITLE BAR.
Proxy
instructions submitted by the Internet or telephone must be received by 12:01
a.m., Central Time, on May 14, 2009.
Vote
by Internet
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·
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Log
on to the Internet and go to
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www.investorvote.com/KRO
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Follow
the steps outlined on the secured
website.
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Vote
by telephone
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·
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Call
toll free 1-800-652-VOTE (8683) within the United States, Canada &
Puerto Rico any time on a touch tone telephone. There is NO CHARGE to you for the
call.
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·
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Follow
the instructions provided by the recorded
message.
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Using
a black ink pen, mark your
votes with an X as
shown in
this
example. Please do not write outside the designated areas.
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x
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Annual Meeting Proxy
Card
▼
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD
ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED
ENVELOPE. ▼
--------------------------------------------------------------------------------------------------------------------------------------------------------------
A
Proposals – The Board of Directors recommends a vote
FOR all the nominees
listed.
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For
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Withhold
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For
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Withhold
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For
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Withhold
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01
– Keith R. Coogan
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¨
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¨
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02
– Cecil H. Moore, Jr.
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¨
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¨
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03
– George E. Poston
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¨
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¨
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04
– Glenn R. Simmons
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¨
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¨
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05
– Harold C. Simmons
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¨
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¨
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06
– R. Gerald Turner
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¨
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¨
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07
– Steven L. Watson
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¨
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¨
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2.
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In
their discretion, the agents named on this proxy card are authorized to
vote upon such other business as may properly come before the Meeting and
any adjournment or postponement
thereof.
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B
Non-Voting Items
Change of Address - Please
print new address below.
C
Authorized Signature – This section must be completed for your
vote to be counted. – Date and Sign Below
NOTE: Please
sign exactly as the name that appears on this card. Joint owners
should each sign. When signing other than in an individual capacity,
please fully describe such capacity. Each signatory hereby revokes all proxies
heretofore given to vote at said Meeting and any adjournment or postponement
thereof.
Date
(mm/dd/yyyy) – Please print date below.
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Signature
1 – Please keep signature within the box
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Signature
2 – Please keep signature within the box
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/ /
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