¨
|
Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
|
¨
|
Definitive
Additional Materials
|
¨
|
Soliciting
Material Pursuant to § 240.14a-12
|
ý
|
No
fee required.
|
¨
|
Fee
computed on table below per Exchange Act Rules 14a-6(i)(1) and
0-11.
|
|
1)
|
Title
of each class of securities to which transaction
applies:
|
|
2)
|
Aggregate
number of securities to which transaction
applies:
|
|
3)
|
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):
|
|
4)
|
Proposed
maximum aggregate value of
transaction:
|
|
5)
|
Total
fee paid:
|
¨
|
Fee
paid previously with preliminary
materials.
|
¨
|
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.
|
|
1)
|
Amount
Previously Paid:
|
|
2)
|
Form,
Schedule or Registration Statement
No.:
|
|
3)
|
Filing
Party:
|
|
4)
|
Date
Filed:
|
Kronos
Worldwide, Inc.
Three
Lincoln Centre
5430
LBJ Freeway, Suite 1700
Dallas,
Texas 75240-2697
|
|
(2)
|
to
transact such other business as may properly come before the meeting or
any adjournment or postponement
thereof.
|
|
TABLE
OF CONTENTS
|
|
GLOSSARY
OF TERMS
|
|
GENERAL
INFORMATION
|
|
QUESTIONS
AND ANSWERS ABOUT THE ANNUAL
MEETING
|
|
CONTROLLING
STOCKHOLDERS
|
|
SECURITY
OWNERSHIP
|
|
Ownership
of Kronos Worldwide
|
|
Ownership
of Related Companies
|
|
ELECTION
OF DIRECTORS
|
|
Nominees
for Director
|
|
EXECUTIVE
OFFICERS
|
|
CORPORATE
GOVERNANCE
|
|
Controlled
Company Status, Director Independence and
Committees
|
|
2007
Meetings and Standing Committees
of the Board of Directors
|
|
Audit
Committee
|
|
Management
Development and Compensation
Committee
|
|
Non-Management
and Independent Director Meetings
|
|
Stockholder
Proposals and Director Nominations for the 2009 Annual Meeting of
Stockholders
|
|
Communications
with Directors
|
|
Compensation
Committee Interlocks and Insider
Participation
|
|
Code
of Business Conduct and Ethics
|
|
Corporate
Governance Guidelines
|
|
Availability
of Corporate Governance Documents
|
|
COMPENSATION
OF EXECUTIVE OFFICERS AND DIRECTORS AND OTHER
INFORMATION
|
|
Compensation
Discussion and Analysis
|
|
Compensation
Committee Report
|
|
Summary
of Cash and Certain Other Compensation of Executive
Officers
|
|
2007
Grants of Plan-Based Awards
|
|
Outstanding
Equity Awards at December 31, 2007
|
|
Option
Exercises and Stock Vested
|
|
Pension
Benefits
|
|
Nonqualified
Deferred Compensation
|
|
Chief
Operations Management Consultant
|
|
Director
Compensation
|
|
SECTION
16(a) BENEFICIAL OWNERSHIP REPORTING
COMPLIANCE
|
|
CERTAIN
RELATIONSHIPS AND TRANSACTIONS
|
|
Related
Party Transaction Policy
|
|
Relationships
with Related Parties
|
|
Intercorporate
Services Agreements
|
|
Insurance
Matters
|
|
Tax
Matters
|
|
Consulting
Services
|
|
Simmons
Family Matters
|
|
AUDIT
COMMITTEE REPORT
|
|
INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
MATTERS
|
|
Independent
Registered Public Accounting Firm
|
|
Fees
Paid to PricewaterhouseCoopers LLP
|
|
Preapproval
Policies and Procedures
|
|
OTHER
MATTERS
|
|
2007
ANNUAL REPORT ON FORM 10-K
|
|
ADDITIONAL
COPIES
|
|
“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.
|
|
“Computershare” means
Computershare Trust Company, N.A., our stock transfer
agent.
|
|
“CompX” means CompX
International Inc., one of our publicly held sister corporations that
manufactures security products, furniture products and performance marine
components.
|
|
“Contran” means Contran
Corporation, the parent corporation of our consolidated tax
group.
|
|
“Dixie Rice” means Dixie
Rice Agricultural Corporation, Inc., one of our parent
corporations.
|
|
“EWI” means EWI RE,
Inc., a reinsurance brokerage and risk management company wholly owned by
NL.
|
|
“FAS 123R” means
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 123 (revised 2004) Share-Based
Payment.
|
|
“Foundation” means the
Harold Simmons Foundation, Inc., a tax-exempt foundation organized for
charitable purposes.
|
|
“independent directors”
means the following directors: Cecil H. Moore, Jr., Keith R.
Coogan, George E. Poston and R. Gerald
Turner.
|
|
“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.
|
|
“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.
|
|
“KII” means Kronos
International, Inc., one of our wholly owned subsidiaries with operations
in Germany.
|
|
“Kronos Worldwide,”
“us,” “we” or “our” means Kronos
Worldwide, Inc.
|
|
“named executive
officer” means any person named in the Summary Compensation table
in this proxy statement.
|
|
“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.
|
|
“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.
|
|
“NYSE” means the New
York Stock Exchange.
|
|
“PwC” means
PricewaterhouseCoopers LLP, our independent registered public accounting
firm.
|
|
“record date” means the
close of business on March 31, 2008, the date our board of directors set
for the determination of stockholders entitled to notice of and to vote at
the 2008 annual meeting of our
stockholders.
|
|
“SEC” means the U.S.
Securities and Exchange Commission.
|
|
“Securities Exchange
Act” means the Securities Exchange Act of 1934, as
amended.
|
|
“Tall Pines” means Tall
Pines Insurance Company, an indirect wholly owned captive insurance
subsidiary of Valhi.
|
|
“TFMC” means TIMET
Finance Management Company, a wholly owned subsidiary of
TIMET.
|
|
“TIMET” means Titanium
Metals Corporation, one of our publicly held sister corporations that is
an integrated producer of titanium metals
products.
|
|
“Valhi” means Valhi,
Inc., one of our publicly held parent corporations that is a diversified
holding company with principal investments in NL and
us.
|
|
“VHC” means Valhi
Holding Company, one of our parent
corporations.
|
A:
|
At
the annual meeting, stockholders will vote on the election of seven
directors and any other matter that may properly come before the
meeting.
|
A:
|
The
board of directors has set the close of business on March 31, 2008 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,
48,956,549 shares of our common stock were issued and
outstanding. Each share of our common stock entitles its holder
to one vote.
|
A:
|
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.
|
|
·
|
vote
in person at the annual meeting; or
|
|
·
|
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.
|
A:
|
The
board of directors has appointed Computershare, our transfer agent and
registrar, to receive proxies and ballots, ascertain the number of shares
represented, tabulate the vote and serve as inspector of election for the
meeting.
|
A:
|
Yes. All
proxy cards, ballots or voting instructions delivered to Computershare
will be kept confidential in accordance with our
bylaws.
|
A:
|
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:
|
|
·
|
delivering
to Computershare a written
revocation;
|
|
·
|
submitting
another proxy card bearing a later date;
or
|
|
·
|
voting
in person at the meeting.
|
A:
|
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.” Shares
of common stock that are voted to abstain from any business coming before
the meeting and broker/nominee non-votes will be counted as being in
attendance at the meeting for purposes of determining whether a quorum is
present.
|
A:
|
If
a quorum is present, 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 nominee for
director. The accompanying proxy card or voting instruction
form provides space for you to withhold authority to vote for any of the
nominees. 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 nominee.
|
A:
|
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. We have retained The Altman Group, Inc. to aid in
the distribution of this proxy statement and related materials at an
estimated cost of $1,300. 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.
|
Kronos
Worldwide Common Stock
|
|||
Name
of Beneficial Owner
|
Amount
and Nature of
Beneficial
Ownership (1)
|
Percent
of
Class
(1)(2)
|
|
Harold
C. Simmons
(3)
|
152,367
|
(4)
|
*
|
Valhi,
Inc.
(3)
|
28,995,021
|
(4)
|
59.2%
|
NL
Industries, Inc
(3)
|
17,516,132
|
(4)
|
35.8%
|
TIMET
Finance Management Company
(3)
|
5,203
|
(4)
|
*
|
Annette
C. Simmons
(3)
|
36,356
|
(4)
|
*
|
46,705,079
|
(4)
|
95.4%
|
|
Keith
R.
Coogan
|
1,500
|
*
|
|
Cecil
H. Moore,
Jr.
|
2,012
|
(4)
|
*
|
George
E.
Poston
|
3,000
|
*
|
|
Glenn
R.
Simmons
|
10,438
|
(4)
|
*
|
R.
Gerald
Turner
|
2,536
|
*
|
|
Steven
L.
Watson
|
5,733
|
(4)
|
*
|
Ulfert
Fiand
|
-0-
|
-0-
|
|
H.
Joseph
Maas
|
-0-
|
-0-
|
|
Gregory
M.
Swalwell
|
-0-
|
-0-
|
|
All
our directors and executive officers as a group (15
persons)
|
46,730,298
|
(4)
|
95.5%
|
(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.
|
(2)
|
The
percentages are based on 48,956,549
shares of our common stock outstanding as of the record
date.
|
(3)
|
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.
|
(4)
|
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.
|
NL
Common Stock
|
Valhi
Common Stock
|
|||||
Name
of Beneficial Owner
|
Amount
and Nature
of
Beneficial
Ownership
(1)
|
Percent
of
Class
(1)(2)
|
Amount
and Nature
of
Beneficial
Ownership
(1)
|
Percent
of
Class
(1)(3)
|
||
Harold
C. Simmons
|
879,600
|
(4)
|
1.8%
|
3,383
|
(4)
|
*
|
Valhi,
Inc.
|
40,387,531
|
(4)
|
83.1%
|
n/a
|
n/a
|
|
TIMET
Finance Management Company.
|
222,100
|
(4)
|
*
|
796,411
|
(4)
|
*
|
Valhi
Holding Company
|
-0-
|
(4)
|
-0-
|
105,320,163
|
(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)
|
*
|
43,400
|
(4)
|
*
|
Annette
Simmons Grandchildren’s Trust
|
-0-
|
(4)
|
-0-
|
36,500
|
(4)
|
*
|
41,759,006
|
85.9%
|
107,321,357
|
94.4%
|
|||
Keith
R.
Coogan.
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Cecil
H. Moore,
Jr.
|
3,000
|
*
|
-0-
|
-0-
|
||
George
E.
Poston
|
-0-
|
-0-
|
-0-
|
-0-
|
||
Glenn
R.
Simmons
|
11,000
|
(4)
|
*
|
9,060
|
(4)(6)
|
*
|
R.
Gerald
Turner
|
1,000
|
*
|
-0-
|
-0-
|
||
Steven
L.
Watson
|
11,000
|
(4)
|
*
|
17,246
|
(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 (15
persons)
|
41,795,006
|
(4)(5)
|
86.0%
|
107,448,829
|
(4)(5)(6)
|
94.4%
|
(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 48,592,634 shares of NL common stock outstanding
as of the record date.
|
(3)
|
The
percentages are based on 113,679,778 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,
3,522,967 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.
|
(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:
|
Name
of Beneficial Owner
|
Shares
of NL Common Stock Issuable Upon the Exercise of Stock Options On or
Before May 30, 2008
|
Shares
of Valhi Common Stock Issuable Upon the Exercise of Stock
Options
On
or Before May 30, 2008
|
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 (15
persons)
|
10,000
|
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 400 shares she holds in
her retirement account, with respect to all of which shares he disclaims
beneficial ownership.
|
Name
|
Age
|
Position(s)
|
Harold
C.
Simmons
|
76
|
Chairman
of the Board and Chief Executive Officer
|
Steven
L.
Watson
|
57
|
Vice
Chairman of the Board
|
Ulfert
Fiand
|
59
|
President,
Manufacturing and Technology
|
H.
Joseph
Maas
|
56
|
President,
Sales and Marketing
|
Douglas
C.
Weaver
|
66
|
Senior
Vice President, Development
|
Robert
D.
Graham
|
52
|
Vice
President and General Counsel
|
Tim
C.
Hafer
|
46
|
Vice
President and Controller
|
Kelly
D.
Luttmer.
|
44
|
Vice
President and Tax Director
|
John
A. St.
Wrba.
|
51
|
Vice
President and Treasurer
|
Gregory
M.
Swalwell
|
51
|
Vice
President, Finance and Chief Financial
Officer
|
|
·
|
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.
|
|
·
|
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.”
|
|
·
|
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.
|
|
·
|
was
an officer or employee of ours during 2007 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.
|
Name
|
Position(s)
|
Ulfert
Fiand
|
President,
Manufacturing and Technology
|
H.
Joseph Maas
|
President,
Sales and Marketing
|
|
·
|
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.
|
|
·
|
our
evaluations of the past year annual base-salary amounts with adjustments
made as a result of our financial position, 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.
|
|
·
|
Mr.
Maas of approximately 8.0% to account for an increase in his
responsibilities upon the retirement of a senior officer and an expected
2007 inflation rate in the U.S. (as compared to a 5.0% increase in 2006 to
account for the further recognition of a promotion and an expected 2006
inflation rate in the U.S.); and
|
|
·
|
Dr.
Fiand of approximately 2.4% to account for an expected 2007 inflation rate
in Europe (as compared to a 5.1% increase in 2006 to account for the
further recognition of a promotion and an expected 2006 inflation rate in
Europe).
|
|
·
|
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.
|
Threshold
Level
|
Target
Level
|
Maximum
Level
|
25%
|
50%
|
75%
|
|
·
|
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.
|
Name
|
Positions
with Kronos Worldwide
|
Harold
C. Simmons
|
Chairman
of the Board and Chief Executive Officer
|
Steven
L. Watson
|
Vice
Chairman of the Board
|
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
annualized base salary of such officer at the beginning of the
year;
|
|
·
|
the
bonus Contran paid 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 in the current year;
and
|
|
·
|
an
overhead factor (19% for 2007 as compared to 21% for 2006) applied to the
base salary for the cost of medical and life insurance benefits, social
security and medicare taxes, 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
quality of the services Contran
provides;
|
|
·
|
the
$1.0 million charge to us for the services of Harold C. Simmons as our
chief executive officer;
|
|
·
|
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.
|
|
·
|
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.
|
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
|
Name
and Principal Position
|
Year
|
Salary
|
Stock
Awards
|
Option
Awards
|
Non-Equity
Incentive Plan Compensa-tion
|
Change
in Pension Value and Nonquali-fied Deferred Compensa-tion
Earnings
|
All
Other Compen-sation
|
Total
|
||||||
Harold
C.
Simmons
|
2007
|
$1,022,000
|
(2)
|
$15,120
|
(3)
|
$ -0-
|
$ -0-
|
$ -0-
|
$ -0-
|
$1,037,120
|
||||
Chairman
of the Board and
|
2006
|
1,023,000
|
(2)
|
14,995
|
(3)
|
-0-
|
-0-
|
-0-
|
-0-
|
1,037,995
|
||||
Chief
Executive Officer
|
||||||||||||||
Steven
L.
Watson
|
2007
|
513,800
|
(2)
|
15,120
|
(3)
|
-0-
|
-0-
|
-0-
|
-0-
|
528,920
|
||||
Vice
Chairman of the Board
|
2006
|
510,700
|
(2)
|
14,995
|
(3)
|
-0-
|
-0-
|
-0-
|
-0-
|
525,695
|
||||
Ulfert
Fiand
(4)
|
2007
|
287,679
|
-0-
|
-0-
|
(5)
|
162,809
|
(6)
|
(7)
|
12,241
|
(8)
|
462,729
|
|||
President,
Manufacturing and
|
2006
|
255,339
|
-0-
|
(3,126)
|
(5)
|
178,800
|
(6)
|
7,049
|
(7)
|
11,200
|
(8)
|
449,262
|
||
Technology
|
||||||||||||||
H.
Joseph
Maas
|
2007
|
270,000
|
-0-
|
-0-
|
(5)
|
152,800
|
(6)
|
(9)
|
19,732
|
(10)
|
442,532
|
|||
President,
Sales and Marketing
|
2006
|
247,000
|
-0-
|
(3,126)
|
(5)
|
159,100
|
(6)
|
(9)
|
23,351
|
(10)
|
426,325
|
|||
Gregory
M.
Swalwell
|
2007
|
218,800
|
(2)
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
218,800
|
|||||
Vice
President, Finance and
|
2006
|
228,600
|
(2)
|
-0-
|
-0-
|
-0-
|
-0-
|
-0-
|
228,600
|
|||||
Chief
Financial Officer
|
(1)
|
Certain
non-applicable columns have been omitted from this
table.
|
(2)
|
The
amounts shown in the 2007 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. The
amount shown in the table as salary for Messrs. Simmons and Watson also
includes director cash compensation we paid to each of them in
2006. The components of salary shown in the 2007 Summary
Compensation table for each of these named executive officers are as
follows.
|
2006
|
2007
|
|||
Harold
C. Simmons
|
||||
Contran
ISA Fee
|
$1,000,000
|
$1,000,000
|
||
Kronos
Worldwide Director Fees Earned or Paid in Cash
|
23,000
|
22,000
|
||
$1,023,000
|
$1,022,000
|
|||
Steven
L. Watson
|
||||
Contran
ISA Fee
|
$
487,700
|
(a)
|
$
490,800
|
(a)
|
Kronos
Worldwide Director Fees Earned or Paid in Cash
|
23,000
|
23,000
|
||
$
510,700
|
$
513,800
|
|||
Gregory
M. Swalwell
|
||||
Contran
ISA Fee
|
$
228,600
|
(a)
|
$
218,800
|
(a)
|
|
(a)
|
Includes
amounts allocated to KII under the ISA between us and
Contran.
|
(3)
|
Stock
awards to these named executive officers in 2006 and 2007 consisted of
shares of our common stock we granted to Messrs. Simmons and Watson for
their director services. See the 2007 Grants of Plan-Based
Awards table below for more details regarding the 2007
grants. The 2006 grants consisted of the
following:
|
Shares
of our Common Stock
|
Date
of Grant
|
Closing
Price on Date of Grant
|
Grant
Date Value of Shares of our Common Stock
|
500
|
May
24, 2006
|
$29.99
|
$14,995
|
(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 $1.2486 and $1.3647 per €1.00 for 2006 and
2007, 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 and reported in this table the corresponding reduction in
compensation expense with respect to the change in stock option values
from the prior year-end. 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.
|
(6)
|
Represents
amounts we granted and awarded for services provided in the year of the
grant pursuant to our Share-in-Performance Plan. See our
discussion of the segment profit bonus awards in the Compensation
Discussion and Analysis section of this proxy statement and the 2007
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:
|
Year
|
Bayer
Pensionskasse
(a)
|
Supplemental
Pension Promise (b)
|
Individual
Pension Promise (c)
|
Total
|
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.
|
|
·
|
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 60 without reducing his
benefits;
|
|
·
|
the
commencement of the payments of his benefits under these plans at
attaining age 60;
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
discount
rates for present value calculations at September 30, 2005 and 2006 and
December 31, 2007 (the measurement dates used for financial statement
reporting purposes for the last three completed fiscal year-ends) of 4.0%,
4.5% and 5.5%, 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.
|
(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,
2005 and 2006 and December 31, 2007. 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, 2005 and 2006 and
December 31, 2007 of 5.5%, 5.8% 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.
|
(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.
|
Named
Executive Officer
|
Year
|
Savings
Plan Match
|
Savings
Plan Retirement Contributions
|
Savings
Plan Transition Contributions
|
Life
Insurance Premiums (a)
|
Total
|
H.
Joseph
Maas
|
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 $8,382 and
$10,209 at December 31, 2006 and 2007,
respectively.
|
|
·
|
the
stock awards we granted to certain of our named executive officers in 2007
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 2007 or the officer had achieved a different performance rating
for 2007.
|
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
|
||||||
Name
|
Date
|
Approval
|
Threshold
|
Target
|
Maximum
|
Units
(#) (2)
|
(2)
|
|||
Harold
C. Simmons
|
05/17/07
|
01/01/04
|
(2)
|
n/a
|
n/a
|
n/a
|
500
|
(2)
|
$15,120
|
(2)
|
Steven
L. Watson
|
05/17/07
|
01/01/04
|
(2)
|
n/a
|
n/a
|
n/a
|
500
|
(2)
|
15,120
|
(2)
|
Ulfert
Fiand (3)
|
(4)
|
(4)
|
(4)
|
$40,275
to $172,607
|
$53,796
to $244,527
|
$100,688
to $345,215
|
n/a
|
n/a
|
||
H.
Joseph Maas
|
(4)
|
(4)
|
(4)
|
$37,800
to $162,000
|
$50,490
to $229,500
|
$94,500
to $324,000
|
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
|
(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 2007 of $1.3647 per €1.00.
|
(4)
|
On
February 15, 2007, 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 85% 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 2007 segment profit
level targets and the possible ranges of the 2007 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 15% to reflect the reduced target level
award. For purposes of these calculations, the base salary used
was the actual base salary paid through 2007, which is the same amount on
which the actual segment profit bonus awards were
determined.
|
Option
Awards
|
||||||||
Name
|
Number
of Shares
Underlying
Unexercised
Options at
December
31, 2007 (#)
|
Option
Exercise Price
|
Option
Expiration Date
|
|||||
Exercisable
|
Unexercisable
|
|||||||
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.
|
Name
|
Plan
Name
|
Number
of Years of Credited Service
|
Present
Value of Accumulated Benefits
|
|
Ulfert
Fiand
|
Bayer
Pensionskasse
|
20
|
$147,900
|
(2)
|
Supplemental
Pension Promise
|
20
|
301,100
|
(2)
|
|
Individual
Pension
Promise
|
20
|
104,600
|
(2)
|
|
$553,600
|
(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 2007 of $1.3647 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, 2007 (the last
measurement date used for financial statement reporting purposes for these
plans) would not change;
|
|
·
|
his
early retirement at age 60 without reducing his
benefits;
|
|
·
|
the
commencement of the payments of his benefits under these plans at
attaining age 60;
|
|
·
|
payments
continuing for his life expectancy derived from a mortality table;
and
|
|
·
|
a
discount rate for the present value calculation at December 31, 2007 of
5.5%, 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, 2007 (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, 2007 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.
|
Name
|
Fees
Earned or Paid in Cash (2)
|
Stock
Awards (3)
|
Total
|
Keith
R.
Coogan
|
$39,000
|
$15,120
|
$54,120
|
Cecil
H. Moore,
Jr.
|
47,000
|
15,120
|
62,120
|
George
E.
Poston
|
39,000
|
15,120
|
54,120
|
Glenn
R.
Simmons
|
23,000
|
15,120
|
38,120
|
R.
Gerald
Turner
|
39,000
|
15,120
|
54,120
|
(1)
|
Certain
non-applicable columns have been omitted from this table. See
footnotes 2 and 3 to the 2007 Summary Compensation table and 2007 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 2007.
|
(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 $30.24 and May 17, 2007,
respectively.
|
|
·
|
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.
|
|
·
|
intercorporate
transactions, such as guarantees, management and expense 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.
|
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
|
|
·
|
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 2008 and the first quarter of 2009;
and
|
|
·
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audit
our annual consolidated financial statements and internal control over
financial reporting for the year ending December 31,
2008.
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Type
of Fees
|
2006
|
2007
|
Audit
Fees
(1)
|
$1,869,000
|
$1,966,000
|
Audit-Related
Fees
(2)
|
5,000
|
15,000
|
Tax
Fees
(3)
|
18,000
|
19,000
|
All
Other
Fees
|
-0-
|
-0-
|
Total
|
$1,892,000
|
$2,000,000
|
(1)
|
Fees
for the following services:
|
|
(a)
|
audits
of consolidated year-end financial statements for each year and audit of
internal control over financial
reporting;
|
|
(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;
|
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(d)
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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.
|
(3)
|
Permitted
fees for tax compliance, tax advice and tax planning
services.
|
|
·
|
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
|
|
·
|
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.
|
|
·
|
audit
services, such as certain consultations regarding accounting treatments or
interpretations and assistance in responding to certain SEC comment
letters;
|
|
·
|
audit-related
services, such as certain other consultations regarding accounting
treatments or interpretations, employee benefit plan audits, due diligence
and control reviews;
|
|
·
|
tax
services, such as tax compliance and consulting, transfer pricing, customs
and duties and expatriate tax services;
and
|
|
·
|
other
permitted non-audit services, such as assistance with corporate governance
matters and filing documents in foreign jurisdictions not involving the
practice of law.
|
|
·
|
Log
on to the Internet and go to
|
|
·
|
Follow
the steps outlined on the secured
website.
|
|
·
|
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.
|
|
·
|
Follow
the instructions provided by the recorded
message.
|
Using
a black ink pen, mark your
votes with an X as
shown in
this
example. Please do not write outside the designated areas.
|
x
|
|
1.
|
Election
of Directors:
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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 proxies are authorized to vote
upon
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such
other business as may properly come before
the
|
|
Meeting
and any adjournment or postponement
thereof.
|
Date
(mm/dd/yyyy) – Please print date below.
|
Signature
– Please keep signature within the box
|
Signature
2 – Please keep signature within the box
|
||
/ /
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