Form 8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): April 16, 2013

 

 

HARSCO CORPORATION

(Exact Name of Registrant as Specified in Charter)

 

 

 

Delaware   001-03970   23-1483991

(State or Other Jurisdiction

of Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification No.)

 

350 Poplar Church Road, Camp Hill, Pennsylvania   17011
(Address of Principal Executive Offices)   (Zip Code)

Registrant’s telephone number, including area code: (717) 763-7064

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 7.01. Regulation FD Disclosure.

Harsco Corporation (the “Company”) recommends that the Company’s stockholders vote “FOR” proposal three (the advisory vote to approve named executive officer compensation, or the “Say-on-Pay Proposal”) at the Company’s 2013 Annual Meeting of Stockholders. In further support of this recommendation, the Company has prepared a presentation entitled “Additional Information to Inform 2013 Advisory Vote on Named Executive Officer Compensation” filed as Exhibit 99.1 hereto and incorporated herein by reference (the “Presentation”), which Presentation is expected to be utilized by certain Company employees between the date of this Current Report on Form 8-K and the date of the Company’s 2013 Annual Meeting of Stockholders, currently scheduled to be held on April 23, 2013, in communications with and the solicitation of votes from certain stockholders of the Company regarding the Say-on-Pay Proposal. The information in this Current Report on Form 8-K and Exhibit 99.1 attached hereto shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference.

 

Item 9.01. Financial Statements and Exhibits.

 

Exhibit
Number

  

Description

99.1    Additional Information to Inform 2013 Advisory Vote on Named Executive Officer Compensation Presentation


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

    HARSCO CORPORATION    
Date: April 16, 2013   By:  

/s/ A. Verona Dorch

 
  Name:   A. Verona Dorch  
  Title:   Vice President and General Counsel  


EXHIBIT INDEX

 

Exhibit
Number

  

Description

99.1    Additional Information to Inform 2013 Advisory Vote on Named Executive Officer Compensation Presentation
EX-99.1
WE HELP BUILD THE WORLD
Camp Hill, Pennsylvania 
April 16, 2013
Additional Information to Inform
2013 Advisory Vote on
Named Executive Officer Compensation
Security holders of Harsco Corporation (the “Company”) should read the Company’s definitive proxy statement for its 2013 Annual Meeting of
Stockholders because it contains important information.  Security holders may obtain the Company’s 2013 definitive proxy statement and 2012
Annual Report for free at www.harsco.com. This document may be deemed “soliciting material”
within the meaning of the rules and regulations
of the Securities and Exchange Commission promulgated under the Securities Exchange Act of 1934, as amended.
Exhibit 99.1


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WE HELP BUILD THE WORLD
Compensation Highlights
Our compensation programs reflect our pay-for-performance (“P4P”) philosophy:
Our annual incentive program (“AIP”) ties annual cash incentives to the achievement of pre-established
Economic Value Added (“EVA”®) performance goals, thereby linking pay directly to the creation of
stockholder value
In 2012, we increased the percentage of performance-based equity awards under our long-term incentive
program (“LTIP”) from 50% to approximately 70% through the use of stock appreciation rights (“SARs”).
SARs are inherently performance-based awards as their value is directly tied to the performance of the
Company’s stock price
ISS,
Glass
Lewis
&
Co.
and
Egan-Jones
ALL
report
that,
for
2012,
the
Company’s
pay
was
aligned
with
corporate performance
Under our new CEO, our management team continues to focus our path toward
improved performance and stockholder returns
While we have taken reasonable steps to recruit and retain those
executives who we
believe will be key to the improved success of our Company, the average level of
total direct compensation for 2012 remained below market medians, further
reflecting the link between pay and performance


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WE HELP BUILD THE WORLD
ISS and Egan-Jones
Recommend a Vote “FOR”
Say-on-Pay
Advisory Firm
Recommendation on
Proposal 3
P4P Comments
ISS
Yes
P4P quantitative screen resulted
in a “low”
level of concern
Overall, ISS found “no significant
issues
of
concern”
regarding
our
executive compensation programs
and practices
Egan-Jones
Yes
No significant comments
Glass Lewis
No
Report notes improved P4P score
and states “the Company has
adequately aligned executive pay
and corporate performance”
Specific issues raised with regard
to the change in control provisions
for certain equity awards,* certain
one-time payments to a departing
executive and changes made to
the Company’s LTIP 
* See Slide 6 for a summary of the changes being made to the Company’s equity awards in 2013


Harsco Pay and Performance are Aligned
We have taken significant steps to ensure that compensation is commensurate
with
performance,
which
ALL
THREE
proxy
advisors
acknowledge
Realizable compensation in 2012 was below target levels, consistent with our
2012 corporate-level performance
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WE HELP BUILD THE WORLD


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WE HELP BUILD THE WORLD
We Continue to Strengthen Our Executive
Leadership Team
As part of our renewed focus on optimizing financial and operational
performance, we have sought talented new executive officers to lead the
Company’s transformation
We experienced several executive officer transitions during 2012:
Sal Fazzolari departed from his position as Chairman, President and CEO in February
2012 after serving the Company for more than 30 years
Patrick
Decker
commenced
serving
as
our
new
President
and
CEO
in
September
2012
Steve Schnoor departed from his position as SVP, CFO and Treasurer in November 2012
after serving the Company for more than 24 years
Separation pay packages for Messrs. Fazzolari and Schnoor reflect market
practices:
We do not maintain employment agreements with our executives
Separation pay packages were developed with the assistance of the Management
Development and Compensation Committee’s independent compensation consultant
(Pearl
Meyer
&
Partners)
to
ensure
alignment
with
current
market
practices
Cash severance amounts were established at or below market levels while still recognizing
each executive’s significant tenure with the Company
No payout for performance-based LTIP awards that were not earned


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WE HELP BUILD THE WORLD
New CIC Acceleration Approach Under
2013 Equity and Incentive Compensation Plan
Based on a strong recommendation from our new CEO, the Management
Development and Compensation Committee has determined that all executive
equity
awards
going
forward
will
contain
“double-trigger”
change
in
control
(“CIC”) accelerated vesting provisions, as permitted under the Company’s new
2013 Equity and Incentive Compensation Plan and in-line with current market
practice
This new approach to equity awards aligns with the “double-trigger”
provisions already contained in CIC severance agreements in place with each
of our executive officers
A double-trigger provision generally functions so that, if equity awards are continued,
assumed
or
replaced
after
a
CIC,
a
participant
must
experience
a
qualifying
termination
of
employment
within
a
certain
period
of
time
after
the
CIC
to
vest
in
those
awards
on
an
accelerated basis
The use of double-trigger CIC provisions helps ensure that if a CIC were to be
contemplated, our executive officers involved in deliberations or negotiations would be
positioned to consider as objectively as possible whether the CIC transaction would be in
our
and
our
stockholders’
best
interests,
rather
than
being
motivated
solely
by
compensation interests


2012 SAR Grants Link Executive Pay With
Performance (Namely, Stock Price Appreciation)
Prior to 2012, only 50% of LTIP awards were performance-based, and those awards most often
utilized the same performance metric as the AIP (EVA achievement) 
For 2012, approximately 70% of the LTIP award opportunity was granted in the form of SARs,
which are designed to deliver value to our executives only to the extent value is being created
for
stockholders,
as
hypothetically
illustrated
in
the
following
table:
This
focus
on
sustained
stock
price
improvement
aligns
well
with
our
stockholders’
interests
and complements the AIP’s focus on EVA achievement
Base Price = $23.73
Stock Price
Realized Value
Grant Date
(3/16/12)
12/31/12
4/03/13
Hypothetical Stock Price Point
$23.73
$23.50
$23.41
$23.73
$25.00
$30.00
$35.00
$0.00
$0.00
$0.00
$0.00
$1.27
$6.27
$11.27
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WE HELP BUILD THE WORLD