x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
47-4027764
|
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
5255 Virginia Avenue
|
||
North Charleston, South Carolina 29406
|
||
(Address of principal executive offices) (Zip code)
|
Title of Each Class:
|
|
Name of Each Exchange on Which Registered:
|
Common Stock ($0.01 par value)
|
|
New York Stock Exchange
|
|
Yes
|
No
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
¨
|
x
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 of Section 15(d) of the Act.
|
¨
|
x
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
x
|
¨
|
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files.)
|
x
|
¨
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K of any amendment to this Form 10-K.
|
x
|
|
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
|
Large Accelerated Filer
o
|
|
Accelerated Filer
o
|
|
|
|
Non-Accelerated Filer
x
|
|
Smaller reporting company
o
|
Documents Incorporated by Reference
|
|||
Portions of the Company's 2017 Annual Meeting Proxy Statement are incorporated by reference into Part III of this report.
|
|
Page No.
|
|||
|
|
|||
|
|
|||
|
|
|||
|
Performance Materials
|
Performance Chemicals
|
||
Product Families
|
Carbon Technologies
|
Pavement Technologies
|
Oilfield Technologies
|
Industrial Specialties
|
Primary End Uses
|
Automotive gasoline vapor emissions control
Process purification
|
Pavement preservation
Adhesion promotion
Warm mix asphalt technology
|
Well service additives
Production and downstream chemicals
|
Adhesives
Agrochemicals
Lubricants
Publication inks
Industrial intermediates
|
2016 Revenue
|
$301 million
|
$607 million
|
Name
|
|
Age
(1)
|
|
Present Position and Business Experience
|
D. Michael Wilson
|
|
54
|
|
President and Chief Executive Officer (2015-present); Executive Vice President and President of Performance Chemicals of Albemarle (2015); President of Albemarle's Catalyst Solutions business (2013-2014); President of FMC's Specialty Chemicals group (2011-2013)
|
John C. Fortson
|
|
49
|
|
Executive Vice President, Chief Financial Officer & Treasurer (2015-present); Vice President, Chief Financial Officer and Treasurer of AAR Corporation (2013-2015); Managing Director in the Investment Banking Department of Bank of America Merrill Lynch (2007-2013)
|
Michael P. Smith
|
|
55
|
|
Executive Vice President & President of Performance Chemicals, Strategy and Business Development (2017-present); Senior Vice President Strategy and Business Development (2016-2017), Vice President of Health and Nutrition at FMC Corporation (2013-2015); Division General Manager of BioPolymer at FMC Corporation (2006-2013)
|
S. Edward Woodcock
|
|
51
|
|
Executive Vice President & President of Performance Materials (2015-present); Vice President of WestRock's Carbon Technologies business (2010-2015)
|
Katherine P. Burgeson
|
|
59
|
|
Executive Vice President, General Counsel & Secretary (2015-present); Associate General Counsel of WestRock (2015); Deputy General Counsel of MeadWestvaco (2006-2015)
|
•
|
fluctuations in foreign currency exchange rates, including the euro, Japanese yen and Chinese renminbi;
|
•
|
restrictions on, or difficulties and costs associated with, the repatriation of cash from foreign countries to the United States;
|
•
|
difficulties and costs associated with complying with a wide variety of complex laws, treaties and regulations;
|
•
|
unexpected changes in political or regulatory environments;
|
•
|
earnings and cash flows that may be subject to tax withholding requirements or the imposition of tariffs, exchange controls or other restrictions;
|
•
|
political and economic instability;
|
•
|
import and export restrictions and other trade barriers;
|
•
|
difficulties in maintaining overseas subsidiaries and international operations;
|
•
|
difficulties in obtaining approval for significant transactions;
|
•
|
government limitations on foreign ownership;
|
•
|
government takeover or nationalization of business; and
|
•
|
government mandated price controls.
|
•
|
CTO is a product of the kraft pulping process, and the global supply of CTO is inherently constrained by the volume of kraft pulping processing;
|
•
|
CTO can be burned as alternative fuels, either in support of the originating pulp mill operations, by energy companies or biofuel companies; and
|
•
|
Regulations or other incentives to mandate or encourage the consumption of biofuels as alternatives, including CTO.
|
•
|
entering into any transaction resulting in the acquisition of 50% or more of its stock (by vote or value, taking into account the stock indirectly acquired by Rock-Tenn stockholders in the Merger) or a substantial portion of its assets, whether by merger or otherwise;
|
•
|
merging, consolidating, dissolving or liquidating, or permitting any of its subsidiaries to merge, consolidate, dissolve or liquidate;
|
•
|
actual or anticipated fluctuations in Ingevity’s operating results;
|
•
|
changes in earnings estimated by securities analysts or Ingevity’s ability to meet those estimates;
|
•
|
the operating and stock price performance of comparable companies;
|
•
|
changes to the regulatory and legal environment under which Ingevity operates; and
|
•
|
domestic and worldwide economic conditions.
|
•
|
the inability of Ingevity’s stockholders to act by written consent;
|
•
|
rules regarding how stockholders may present proposals or nominate directors for election at stockholder meetings;
|
•
|
the right of Ingevity’s board to issue preferred stock without stockholder approval;
|
•
|
the ability of Ingevity’s remaining directors to fill vacancies on Ingevity’s board of directors;
|
•
|
the separation of Ingevity’s board of directors into three classes of directors, which classification will terminate beginning at the Company’s 2019 annual meeting;
|
•
|
the inability of Ingevity’s stockholders to remove directors other than for cause while the board is classified; and
|
•
|
the requirement that the affirmative vote of holders of at least 75% of Ingevity’s outstanding voting stock is required to amend certain provisions of Ingevity’s amended and restated certificate of incorporation and amended and restated bylaws.
|
|
Own / Lease
|
|
Functional Use
|
North Charleston, South Carolina
|
Own
|
|
Corporate Headquarters;
Application Labs
Performance Chemicals: Manufacturing
|
Covington, Virginia
|
Lease
|
|
Performance Materials: Manufacturing
|
DeRidder, Louisiana
|
Lease
(1)
|
|
Performance Chemicals: Manufacturing
|
Waynesboro, Georgia (70% owned JV)
|
Own
|
|
Performance Materials: Manufacturing
|
Wickliffe, Kentucky
|
Own
|
|
Performance Materials: Manufacturing
|
Wujiang, People’s Republic of China
|
Lease
|
|
Performance Materials: Manufacturing
|
Zhuhai, People’s Republic of China
|
Lease
|
|
Performance Materials: Manufacturing
|
(1)
|
Represents a capital lease with the Industrial Development Board of the City of DeRidder, Louisiana, Inc.
|
|
2016
|
||||||||||
Common stock prices
|
Second Quarter
(1)
|
|
Third Quarter
|
|
Fourth Quarter
|
||||||
High
|
$
|
35.31
|
|
|
$
|
48.30
|
|
|
$
|
55.43
|
|
Low
|
$
|
24.50
|
|
|
$
|
33.90
|
|
|
$
|
40.24
|
|
|
|
|
|
|
Publicly Announced Program
(1)
|
||||||||||||
Period
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares
|
|
Total Dollar Amount Purchased
|
|
Maximum Dollar Value of Shares that May Yet be Purchased
|
||||||||
October 1-31, 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
November 1-30, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
December 1-31, 2016
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total Q4 2016
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Year ended December 31,
|
||||||||||||||||||
In millions, except per share and share data
|
2016
|
|
2015
(1)
|
|
2014
(1)
|
|
2013
(1)
|
|
2012
|
||||||||||
Statement of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
908.3
|
|
|
$
|
958.3
|
|
|
$
|
1,035.5
|
|
|
$
|
964.4
|
|
|
$
|
939.3
|
|
Gross profit
|
274.4
|
|
|
275.4
|
|
|
318.5
|
|
|
290.4
|
|
|
297.2
|
|
|||||
Separation costs
|
17.5
|
|
|
17.2
|
|
|
0.4
|
|
|
—
|
|
|
—
|
|
|||||
Restructuring and other (income) charges, net
|
41.2
|
|
|
(7.5
|
)
|
|
(5.6
|
)
|
|
(2.4
|
)
|
|
—
|
|
|||||
Income before income taxes
|
87.0
|
|
|
136.5
|
|
|
202.1
|
|
|
180.9
|
|
|
189.5
|
|
|||||
Net income (loss) attributable to Ingevity stockholders
|
35.2
|
|
|
79.7
|
|
|
129.0
|
|
|
116.8
|
|
|
120.0
|
|
|||||
Per Share Data attributable to Ingevity stockholders
(2)
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic earnings (loss) per share
|
$
|
0.83
|
|
|
$
|
1.89
|
|
|
$
|
3.06
|
|
|
$
|
2.77
|
|
|
$
|
2.85
|
|
Diluted earnings (loss) per share
|
0.83
|
|
|
1.89
|
|
|
3.06
|
|
|
2.77
|
|
|
2.85
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance Sheet Data (at period end):
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital
(3)
|
$
|
158.3
|
|
|
$
|
196.5
|
|
|
$
|
128.7
|
|
|
$
|
119.2
|
|
|
$
|
109.3
|
|
Property, plant and equipment, net
|
422.8
|
|
|
437.5
|
|
|
410.1
|
|
|
325.6
|
|
|
300.0
|
|
|||||
Total assets
|
832.8
|
|
|
778.7
|
|
|
715.1
|
|
|
592.6
|
|
|
551.1
|
|
|||||
Long-term debt including capital lease obligations
|
481.3
|
|
|
80.0
|
|
|
85.8
|
|
|
85.8
|
|
|
85.8
|
|
|||||
Total equity
|
134.6
|
|
|
517.4
|
|
|
416.6
|
|
|
326.3
|
|
|
295.5
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Other Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
$
|
56.7
|
|
|
$
|
100.9
|
|
|
$
|
101.8
|
|
|
$
|
57.3
|
|
|
$
|
40.2
|
|
Depreciation and amortization expense
|
38.8
|
|
|
34.6
|
|
|
32.3
|
|
|
32.8
|
|
|
31.9
|
|
|||||
Weighted average common stock outstanding (in thousands)
(2)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic shares
|
42,108
|
|
|
42,102
|
|
|
42,102
|
|
|
42,102
|
|
|
42,102
|
|
|||||
Diluted shares
|
42,271
|
|
|
42,102
|
|
|
42,102
|
|
|
42,102
|
|
|
42,102
|
|
(1)
|
Certain prior period amounts have been revised to reflect the correction of certain immaterial errors. See Note 3 to our Consolidated Financial Statements included within Item 8 of this Form 10-K for more information.
|
(2)
|
On May 15, 2016, WestRock distributed
42.1 million
shares of Ingevity's common stock to holders of its common stock. Basic and diluted earnings (loss) per share for the years ended December 31, 2015, 2014, 2013 and 2012 are calculated using the number of common shares distributed on May 15, 2016. Basic and diluted earnings (loss) per share for the year ended December 31, 2016 is calculated using the weighted average number of common shares outstanding for the period beginning after the distribution date.
|
(3)
|
Defined as current assets less current liabilities.
|
•
|
we may be adversely affected by general economic and financial conditions beyond our control;
|
•
|
we are exposed to risks related to our international sales and operations;
|
•
|
our reported results could be adversely affected by currency exchange rates and currency devaluation could impair our competitiveness;
|
•
|
our operations outside the United States require us to comply with a number of U.S. and foreign regulations, violations of which could have a material adverse effect on our financial condition and results of operations;
|
•
|
we are dependent upon attracting and retaining key personnel;
|
•
|
adverse conditions in the automotive market may adversely affect demand for our automotive carbon products;
|
•
|
if increasingly more stringent air quality standards worldwide are not adopted, our growth could be impacted;
|
•
|
we may be adversely affected by government infrastructure spending;
|
•
|
the Company’s printing inks business serves customers in a market that is facing declining volumes;
|
•
|
our Performance Chemicals segment is highly dependent on crude tall oil ("CTO") which is limited in supply;
|
•
|
lack of access to sufficient CTO would impact our ability to produce CTO-based products;
|
•
|
a prolonged period of low energy prices may materially impact our results of operations;
|
•
|
we are dependent upon third parties for the provision of certain critical operating services at several of our facilities;
|
•
|
the occurrence of a natural disaster, such as a hurricane, winter or tropical storm, earthquake, tornado, flood, fire or other matters such as labor difficulties, equipment failure or unscheduled maintenance and repair, which could result in operational disruptions of varied duration;
|
•
|
our ability to protect our intellectual property and other proprietary information;
|
•
|
information technology security risks;
|
•
|
government policies and regulations, including, but not limited, to those affecting the environment, climate change, tax policies and the chemicals industry; and
|
•
|
losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes.
|
|
Year Ended December 31,
|
||||||||||
In millions, except per share data
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
908.3
|
|
|
$
|
958.3
|
|
|
$
|
1,035.5
|
|
Cost of sales
|
633.9
|
|
|
682.9
|
|
|
717.0
|
|
|||
Gross profit
|
274.4
|
|
|
275.4
|
|
|
318.5
|
|
|||
Selling, general and administrative expenses
|
114.0
|
|
|
110.1
|
|
|
107.7
|
|
|||
Separation costs
|
17.5
|
|
|
17.2
|
|
|
0.4
|
|
|||
Restructuring and other (income) charges, net
|
41.2
|
|
|
(7.5
|
)
|
|
(5.6
|
)
|
|||
Other (income) expense, net
|
(3.2
|
)
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|||
Interest expense
|
19.3
|
|
|
20.1
|
|
|
16.4
|
|
|||
Interest income
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|||
Income before income taxes
|
87.0
|
|
|
136.5
|
|
|
202.1
|
|
|||
Provision for income taxes
|
42.6
|
|
|
52.2
|
|
|
69.5
|
|
|||
Net income (loss)
|
44.4
|
|
|
84.3
|
|
|
132.6
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests
|
9.2
|
|
|
4.6
|
|
|
3.6
|
|
|||
Net income (loss) attributable to Ingevity stockholders
|
$
|
35.2
|
|
|
$
|
79.7
|
|
|
$
|
129.0
|
|
|
|
|
Percentage change vs. prior year
|
||||||||
In millions
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||
Year ended December 31, 2016
|
$
|
908.3
|
|
|
(5)%
|
|
—%
|
|
(3)%
|
|
(2)%
|
Year ended December 31, 2015
|
958.3
|
|
|
(7)%
|
|
(3)%
|
|
(2)%
|
|
(2)%
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Restructuring and other (income) charges, net
|
|
|
|
|
|
||||||
Gain on sale of assets and businesses
|
$
|
—
|
|
|
$
|
(11.5
|
)
|
|
$
|
(5.6
|
)
|
Severance and other employee-related costs
(1)
|
6.3
|
|
|
—
|
|
|
—
|
|
|||
Asset write-downs
(2)
|
30.6
|
|
|
4.0
|
|
|
—
|
|
|||
Other (income) charges, net
(3)
|
4.3
|
|
|
—
|
|
|
—
|
|
|||
Total restructuring and other (income) charges, net
|
$
|
41.2
|
|
|
$
|
(7.5
|
)
|
|
$
|
(5.6
|
)
|
(1)
|
Represents severance and employee benefit charges.
|
(2)
|
Primarily represents accelerated depreciation and impairment charges on long-lived assets, which were or are to be abandoned. To the extent incurred the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations due to facility shutdowns are also included within the asset write-downs.
|
(3)
|
Primarily represents costs associated with rental payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable developments on previously recorded exit costs as recoveries associated with restructuring activities.
|
In millions
|
|
Year Ended December 31,
|
||||||||||
|
2016
|
|
2015
|
|
2014
|
|||||||
Net sales
|
|
$
|
301.0
|
|
|
$
|
256.4
|
|
|
$
|
249.4
|
|
Segment operating profit
|
|
106.9
|
|
|
79.7
|
|
|
89.5
|
|
|
|
|
Percentage change vs. prior year
|
||||||||||||
In millions
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||||||
Year ended December 31, 2016
|
$
|
301.0
|
|
|
17
|
%
|
|
—
|
%
|
|
—
|
%
|
|
17
|
%
|
Year ended December 31, 2015
|
256.4
|
|
|
3
|
%
|
|
(1
|
)%
|
|
2
|
%
|
|
2
|
%
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
|
|
|
|
|
|
||||||
Pavement Technologies product line
|
|
$
|
148.8
|
|
|
$
|
147.5
|
|
|
$
|
132.0
|
|
Oilfield Technologies product line
|
|
58.5
|
|
|
78.0
|
|
|
126.8
|
|
|||
Industrial Specialties product line
|
|
400.0
|
|
|
476.4
|
|
|
527.3
|
|
|||
Total Performance Chemicals - Net sales
|
|
$
|
607.3
|
|
|
$
|
701.9
|
|
|
$
|
786.1
|
|
|
|
|
|
|
|
|
||||||
Segment operating profit
|
|
56.7
|
|
|
86.6
|
|
|
123.8
|
|
|
|
|
Percentage change vs. prior year
|
||||||||||||
In millions
|
Net sales
|
|
Total change
|
|
Currency
effect |
|
Price/Mix
|
|
Volume
|
||||||
Year ended December 31, 2016
|
$
|
607.3
|
|
|
(13
|
)%
|
|
—
|
%
|
|
(5
|
)%
|
|
(8
|
)%
|
Year ended December 31, 2015
|
701.9
|
|
|
(11
|
)%
|
|
(4
|
)%
|
|
(3
|
)%
|
|
(4
|
)%
|
Reconciliation of Net Income to Adjusted EBITDA
|
||||||||||||
|
|
Year Ended December 31,
|
||||||||||
In millions
|
|
2016
|
|
2015
|
|
2014
|
||||||
Net income
(GAAP)
|
|
$
|
44.4
|
|
|
$
|
84.3
|
|
|
$
|
132.6
|
|
Provision for income taxes
|
|
42.6
|
|
|
52.2
|
|
|
69.5
|
|
|||
Interest expense
|
|
19.3
|
|
|
20.1
|
|
|
16.4
|
|
|||
Interest income
|
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|||
Depreciation and amortization
|
|
38.8
|
|
|
34.6
|
|
|
32.3
|
|
|||
Separation costs
|
|
17.5
|
|
|
17.2
|
|
|
0.4
|
|
|||
Restructuring and other (income) charges
|
|
41.2
|
|
|
(7.5
|
)
|
|
(5.6
|
)
|
|||
Adjusted EBITDA
(Non-GAAP)
|
|
$
|
202.4
|
|
|
$
|
200.9
|
|
|
$
|
245.6
|
|
|
Years ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Net cash provided by (used in) operating activities
|
$
|
127.9
|
|
|
$
|
72.2
|
|
|
$
|
138.5
|
|
Net cash provided by (used in) investing activities
|
(126.4
|
)
|
|
(89.3
|
)
|
|
(96.8
|
)
|
|||
Net cash provided by (used in) financing activities
|
(3.4
|
)
|
|
27.0
|
|
|
(31.7
|
)
|
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Cash and cash equivalents
|
$
|
30.5
|
|
|
$
|
32.0
|
|
Accounts receivable, net
|
89.8
|
|
|
95.2
|
|
||
Inventories, net
|
151.2
|
|
|
148.9
|
|
||
Prepaid and other current assets
|
23.7
|
|
|
20.2
|
|
||
Total current assets
|
$
|
295.2
|
|
|
$
|
296.3
|
|
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Accounts payable
|
$
|
79.2
|
|
|
$
|
64.8
|
|
Accrued expenses
|
19.3
|
|
|
14.8
|
|
||
Accrued payroll and employee benefits
|
25.6
|
|
|
10.0
|
|
||
Notes payable and current portion of long-term debt
|
7.5
|
|
|
9.4
|
|
||
Income taxes payable
|
5.3
|
|
|
0.8
|
|
||
Total current liabilities
|
$
|
136.9
|
|
|
$
|
99.8
|
|
Capital expenditure categories
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Maintenance capital expenditures
|
$
|
32.3
|
|
|
$
|
33.3
|
|
|
$
|
28.0
|
|
Safety, health and environment
|
7.4
|
|
|
12.1
|
|
|
10.5
|
|
|||
Growth and cost improvement capital expenditures
|
17.0
|
|
|
55.5
|
|
|
63.3
|
|
|||
Total capital expenditures
|
$
|
56.7
|
|
|
$
|
100.9
|
|
|
$
|
101.8
|
|
|
Payments due in period
|
||||||||||||||||||
In millions
|
Total at December 31, 2016
|
|
2017
|
|
2018-2019
|
|
2020-2021
|
|
2022 and beyond
|
||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt maturities
|
$
|
411.9
|
|
|
$
|
7.5
|
|
|
$
|
37.5
|
|
|
$
|
366.9
|
|
|
$
|
—
|
|
Contractual interest
(1)
|
27.4
|
|
|
6.5
|
|
|
12.0
|
|
|
8.9
|
|
|
—
|
|
|||||
Capital lease obligations
(2)
|
150.0
|
|
|
6.0
|
|
|
12.0
|
|
|
12.0
|
|
|
120.0
|
|
|||||
Operating lease obligations
|
41.0
|
|
|
11.5
|
|
|
16.4
|
|
|
8.6
|
|
|
4.5
|
|
|||||
Purchase obligations
|
183.0
|
|
|
183.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total
|
$
|
813.3
|
|
|
$
|
214.5
|
|
|
$
|
77.9
|
|
|
$
|
396.4
|
|
|
$
|
124.5
|
|
(1)
|
Contractual interest is the interest we are contracted to pay on our long-term debt obligations. We had $411.9 million of long-term debt subject to variable interest rates at December 31, 2016. The rate assumed for the variable interest component of the contractual interest obligation was the rate in effect at December 31, 2016. Variable rates are determined by the market and will fluctuate over time.
|
(2)
|
Amounts include the interest payments under the capital lease as well as the principle payment due in 2027.
|
Description
|
Page No.
|
||
i.
|
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
|
ii.
|
provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles and that receipts and expenditures of the Company are being made only in accordance with authorization of management and directors of the Company; and
|
iii.
|
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use or disposition of the Company's assets that could have a material effect on the financial statements.
|
Date:
|
March 2, 2017
|
|
|
|
|
|
|
|
|
|
|
By:
|
/S/ D. MICHAEL WILSON
|
|
/S/ JOHN C. FORTSON
|
|
D. Michael Wilson
|
|
John C. Fortson
|
|
President and Chief Executive Officer
|
|
Executive Vice President and Chief Financial Officer
|
|
Year Ended December 31,
|
||||||||||
In millions, except per share data
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
$
|
908.3
|
|
|
$
|
958.3
|
|
|
$
|
1,035.5
|
|
Cost of sales
|
633.9
|
|
|
682.9
|
|
|
717.0
|
|
|||
Gross profit
|
274.4
|
|
|
275.4
|
|
|
318.5
|
|
|||
Selling, general and administrative expenses
|
114.0
|
|
|
110.1
|
|
|
107.7
|
|
|||
Separation costs
|
17.5
|
|
|
17.2
|
|
|
0.4
|
|
|||
Restructuring and other (income) charges, net
|
41.2
|
|
|
(7.5
|
)
|
|
(5.6
|
)
|
|||
Other (income) expense, net
|
(3.2
|
)
|
|
(1.0
|
)
|
|
(2.5
|
)
|
|||
Interest expense
|
19.3
|
|
|
20.1
|
|
|
16.4
|
|
|||
Interest income
|
(1.4
|
)
|
|
—
|
|
|
—
|
|
|||
Income before income taxes
|
87.0
|
|
|
136.5
|
|
|
202.1
|
|
|||
Provision for income taxes
|
42.6
|
|
|
52.2
|
|
|
69.5
|
|
|||
Net income (loss)
|
44.4
|
|
|
84.3
|
|
|
132.6
|
|
|||
Less: Net income (loss) attributable to noncontrolling interests
|
9.2
|
|
|
4.6
|
|
|
3.6
|
|
|||
Net income (loss) attributable to Ingevity stockholders
|
$
|
35.2
|
|
|
$
|
79.7
|
|
|
$
|
129.0
|
|
|
|
|
|
|
|
||||||
Per share data
|
|
|
|
|
|
||||||
Basic earnings (loss) per share attributable to Ingevity stockholders
(1)
|
$
|
0.83
|
|
|
$
|
1.89
|
|
|
$
|
3.06
|
|
Diluted earnings (loss) per share attributable to Ingevity stockholders
(1)
|
$
|
0.83
|
|
|
$
|
1.89
|
|
|
$
|
3.06
|
|
(1)
|
On May 15, 2016, WestRock distributed
42,102 thousand
shares of Ingevity's common stock to holders of its common stock. Basic and diluted earnings (loss) per share for the years ended December 31, 2015 and 2014 are calculated using the number of common shares distributed on May 15, 2016. Basic and diluted earnings (loss) per share for the year ended December 31, 2016 is calculated using the weighted average number of common shares outstanding for the period beginning after the distribution date. Refer to Note 20 for information regarding the calculation of basic and diluted earnings per share.
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss)
|
$
|
44.4
|
|
|
$
|
84.3
|
|
|
$
|
132.6
|
|
Other comprehensive income (loss), net of tax:
|
|
|
|
|
|
||||||
Foreign currency translation adjustment
(1)
|
(2.9
|
)
|
|
(9.2
|
)
|
|
(6.7
|
)
|
|||
|
|
|
|
|
|
||||||
Derivative instruments:
|
|
|
|
|
|
||||||
Unrealized gain (loss), net of tax of zero, $0.6 and $0.6
|
—
|
|
|
(1.9
|
)
|
|
(1.2
|
)
|
|||
Reclassifications of deferred derivative instruments (gain) loss, included in net income (loss), net of tax of ($0.6), ($0.6) and zero
(2)
|
1.0
|
|
|
1.9
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total derivative instruments, net of tax of ($0.6), zero and $0.6
|
1.0
|
|
|
—
|
|
|
(1.2
|
)
|
|||
|
|
|
|
|
|
||||||
Pension & Other postretirement benefits
(3)
|
|
|
|
|
|
||||||
Unrealized actuarial gains (losses) and prior service (costs) credits, net of tax of $0.3, zero and zero
(4)
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Total pension and other postretirement benefits, net of tax of $0.3, zero and zero
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Other comprehensive income (loss), net of tax of ($0.3), zero and $0.6
|
(2.5
|
)
|
|
(9.2
|
)
|
|
(7.9
|
)
|
|||
Comprehensive income (loss)
|
41.9
|
|
|
75.1
|
|
|
124.7
|
|
|||
Less: Comprehensive income (loss) attributable to noncontrolling interests
|
9.2
|
|
|
4.6
|
|
|
3.6
|
|
|||
Comprehensive income (loss) attributable to the Ingevity stockholders
|
$
|
32.7
|
|
|
$
|
70.5
|
|
|
$
|
121.1
|
|
(1)
|
Income taxes are not provided on the equity in undistributed earnings of our foreign subsidiaries or affiliates since it is our intention that such earnings will remain invested in those affiliates permanently.
|
(2)
|
Amounts reflected in "Cost of sales" on the Consolidated Statements of Operations.
|
(3)
|
During the years ended December 31, 2016, 2015 and 2014, there were no reclassifications of net actuarial gains (losses) or prior service (costs) credits.
|
(4)
|
At December 31st of each year, we remeasure our pension and other postretirement plan obligations at which time we record any actuarial gains (losses) and prior service (costs) credits to other comprehensive income.
|
|
December 31,
|
||||||
In millions, except share and par value data
|
2016
|
|
2015
|
||||
Assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
30.5
|
|
|
$
|
32.0
|
|
Accounts receivable, net
|
89.8
|
|
|
95.2
|
|
||
Inventories, net
|
151.2
|
|
|
148.9
|
|
||
Prepaid and other current assets
|
23.7
|
|
|
20.2
|
|
||
Current assets
|
295.2
|
|
|
296.3
|
|
||
Property, plant and equipment, net
|
422.8
|
|
|
437.5
|
|
||
Goodwill
|
12.4
|
|
|
11.9
|
|
||
Other intangibles, net
|
7.3
|
|
|
10.0
|
|
||
Deferred income taxes
|
3.4
|
|
|
—
|
|
||
Restricted investment
|
69.7
|
|
|
—
|
|
||
Other assets
|
22.0
|
|
|
23.0
|
|
||
Total Assets
|
$
|
832.8
|
|
|
$
|
778.7
|
|
Liabilities and equity
|
|
|
|
||||
Accounts payable
|
$
|
79.2
|
|
|
$
|
64.8
|
|
Accrued expenses
|
19.3
|
|
|
14.8
|
|
||
Accrued payroll and employee benefits
|
25.6
|
|
|
10.0
|
|
||
Notes payable and current maturities of long-term debt
|
7.5
|
|
|
9.4
|
|
||
Income taxes payable
|
5.3
|
|
|
0.8
|
|
||
Current liabilities
|
136.9
|
|
|
99.8
|
|
||
Long-term debt including capital lease obligations
|
481.3
|
|
|
80.0
|
|
||
Deferred income taxes
|
69.8
|
|
|
74.3
|
|
||
Other liabilities
|
10.2
|
|
|
7.2
|
|
||
Total Liabilities
|
698.2
|
|
|
261.3
|
|
||
Commitments and contingencies
(Note 18)
|
|
|
|
|
|
||
Equity
|
|
|
|
||||
Net parent investment
|
—
|
|
|
530.1
|
|
||
Preferred stock
(par value $0.01 per share; 50,000,000 shares authorized;
no issued and outstanding at 2016 and 2015) |
—
|
|
|
—
|
|
||
Common stock
(par value $0.01 per share; 300,000,000 shares authorized;
42,116,430 issued and 42,115,824 outstanding at 2016; no shares issued in 2015)
|
0.4
|
|
|
—
|
|
||
Additional paid-in capital
|
129.9
|
|
|
—
|
|
||
Retained earnings
|
16.0
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
(19.0
|
)
|
|
(16.5
|
)
|
||
Treasury stock, common stock, at cost
(606 shares at 2016; no shares at 2015)
|
(0.3
|
)
|
|
—
|
|
||
Total Ingevity stockholders' equity
|
127.0
|
|
|
513.6
|
|
||
Noncontrolling interests
|
7.6
|
|
|
3.8
|
|
||
Total Equity
|
134.6
|
|
|
517.4
|
|
||
Total Liabilities and Equity
|
$
|
832.8
|
|
|
$
|
778.7
|
|
|
Ingevity Stockholders'
|
|
|
|
|
|||||||||||||||||||||||||||||
|
Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
In millions, shares in thousands
|
Shares
|
|
Amount
|
|
Net parent
investment
|
|
Additional paid-in capital
|
|
Retained earnings
|
|
Accumulated other comprehensive income (loss)
|
|
Treasury stock
|
|
Noncontrolling interests
|
|
Total Equity
|
|||||||||||||||||
Balance at December 31, 2013
|
—
|
|
|
$
|
—
|
|
|
$
|
323.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.5
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
|
$
|
326.3
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
129.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3.6
|
|
|
132.6
|
|
||||||||
Other comprehensive income (loss)
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
|
—
|
|
|
—
|
|
|
(7.8
|
)
|
||||||||
Noncontrolling interest distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.1
|
)
|
|
(3.1
|
)
|
||||||||
Transactions with parent
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(31.4
|
)
|
||||||||
Balance at December 31, 2014
|
—
|
|
|
$
|
—
|
|
|
$
|
421.3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(7.3
|
)
|
|
$
|
—
|
|
|
$
|
2.6
|
|
|
$
|
416.6
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
79.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.6
|
|
|
84.3
|
|
||||||||
Other comprehensive income (loss)
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9.2
|
)
|
|
—
|
|
|
—
|
|
|
(9.2
|
)
|
||||||||
Noncontrolling interest distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3.4
|
)
|
|
(3.4
|
)
|
||||||||
Transactions with parent
|
—
|
|
|
—
|
|
|
29.1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29.1
|
|
||||||||
Balance at December 31, 2015
|
—
|
|
|
$
|
—
|
|
|
$
|
530.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(16.5
|
)
|
|
$
|
—
|
|
|
$
|
3.8
|
|
|
$
|
517.4
|
|
Net income (loss)
|
—
|
|
|
—
|
|
|
19.2
|
|
|
—
|
|
|
16.0
|
|
|
—
|
|
|
—
|
|
|
9.2
|
|
|
44.4
|
|
||||||||
Other comprehensive income (loss)
(2)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
||||||||
Issuance of common stock at separation
|
42,101.6
|
|
|
0.4
|
|
|
—
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Common stock issued - compensation plans
|
14.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.3
|
)
|
|
—
|
|
|
(0.3
|
)
|
||||||||
Cash distributed to WestRock at Separation
|
—
|
|
|
—
|
|
|
(448.5
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(448.5
|
)
|
||||||||
Net transfers to parent
|
—
|
|
|
—
|
|
|
24.8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24.8
|
|
||||||||
Reclassifications from net parent investment to additional paid in capital
|
—
|
|
|
—
|
|
|
(125.6
|
)
|
|
125.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||||
Noncontrolling interest distributions
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5.4
|
)
|
|
(5.4
|
)
|
||||||||
Share-based compensation expense
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4.7
|
|
||||||||
Balance at December 31, 2016
|
42,116.4
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
129.9
|
|
|
$
|
16.0
|
|
|
$
|
(19.0
|
)
|
|
$
|
(0.3
|
)
|
|
$
|
7.6
|
|
|
$
|
134.6
|
|
(1)
|
During the years ended December 31, 2016, 2015, 2014 and 2013, there were no Preferred shares issued and outstanding. Additionally during these periods, the dollar value of Treasury stock held was immaterial. Therefore, Preferred stock activity has been excluded from the Consolidated Statements of Stockholders' Equity.
|
(2)
|
See Consolidated Statements of Comprehensive Income (Loss).
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Cash provided by (used in) operating activities:
|
|
|
|
|
|
||||||
Net income (loss)
|
$
|
44.4
|
|
|
$
|
84.3
|
|
|
$
|
132.6
|
|
Adjustments to reconcile net income to cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
38.8
|
|
|
34.6
|
|
|
32.3
|
|
|||
Deferred income taxes
|
(7.9
|
)
|
|
8.3
|
|
|
2.2
|
|
|||
Disposal/impairment of assets
|
1.5
|
|
|
3.9
|
|
|
0.8
|
|
|||
Restructuring and other (income) charges, net
|
41.2
|
|
|
(7.5
|
)
|
|
(5.6
|
)
|
|||
Share-based compensation
|
4.7
|
|
|
—
|
|
|
—
|
|
|||
Pension and other postretirement benefit costs
|
0.7
|
|
|
—
|
|
|
—
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Accounts receivable, net
|
5.7
|
|
|
8.5
|
|
|
(4.8
|
)
|
|||
Inventories, net
|
(2.2
|
)
|
|
(24.1
|
)
|
|
(27.6
|
)
|
|||
Prepaid and other current assets
|
(3.9
|
)
|
|
(6.7
|
)
|
|
(5.3
|
)
|
|||
Accounts payable
|
(1.5
|
)
|
|
(22.3
|
)
|
|
6.9
|
|
|||
Accrued expenses
|
(1.9
|
)
|
|
1.0
|
|
|
6.4
|
|
|||
Accrued payroll and employee benefit costs
|
15.0
|
|
|
(7.8
|
)
|
|
—
|
|
|||
Income tax payable
|
4.5
|
|
|
0.8
|
|
|
—
|
|
|||
Pension contribution
|
(1.0
|
)
|
|
—
|
|
|
—
|
|
|||
Restructuring and other spending
|
(8.3
|
)
|
|
—
|
|
|
—
|
|
|||
Changes in all other operating assets and liabilities, net
|
(1.9
|
)
|
|
(0.8
|
)
|
|
0.6
|
|
|||
Net cash provided by (used in) operating activities
|
$
|
127.9
|
|
|
$
|
72.2
|
|
|
$
|
138.5
|
|
Cash provided by (used in) investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(56.7
|
)
|
|
(100.9
|
)
|
|
(101.8
|
)
|
|||
Proceeds from divestiture
|
—
|
|
|
11.0
|
|
|
6.0
|
|
|||
Restricted investment
|
(69.7
|
)
|
|
—
|
|
|
—
|
|
|||
Other investing activities, net
|
—
|
|
|
0.6
|
|
|
(1.0
|
)
|
|||
Net cash provided by (used in) investing activities
|
$
|
(126.4
|
)
|
|
$
|
(89.3
|
)
|
|
$
|
(96.8
|
)
|
Cash provided by (used in) financing activities:
|
|
|
|
|
|
||||||
Net borrowings under our revolving credit facility
|
111.9
|
|
|
—
|
|
|
—
|
|
|||
Proceeds from long-term borrowings
|
300.0
|
|
|
—
|
|
|
—
|
|
|||
Payments on long-term borrowings
|
—
|
|
|
(5.8
|
)
|
|
—
|
|
|||
Debt issuance costs
|
(3.6
|
)
|
|
—
|
|
|
—
|
|
|||
Borrowings (repayments) of notes payable and other short-term borrowings, net
|
(9.4
|
)
|
|
7.1
|
|
|
2.8
|
|
|||
Taxes withheld for employee equity award vesting
|
(0.3
|
)
|
|
—
|
|
|
—
|
|
|||
Noncontrolling interest distributions
|
(5.4
|
)
|
|
(3.4
|
)
|
|
(3.1
|
)
|
|||
Cash distributed to WestRock at Separation
|
(448.5
|
)
|
|
—
|
|
|
—
|
|
|||
Transactions with WestRock, net
|
51.9
|
|
|
29.1
|
|
|
(31.4
|
)
|
|||
Net cash provided by (used in) financing activities
|
$
|
(3.4
|
)
|
|
$
|
27.0
|
|
|
$
|
(31.7
|
)
|
Increase (decrease) in cash and cash equivalents
|
(1.9
|
)
|
|
9.9
|
|
|
10.0
|
|
|||
Effect of exchange rate changes on cash
|
0.4
|
|
|
2.2
|
|
|
(1.6
|
)
|
|||
|
|
|
|
|
|
||||||
Change in cash and cash equivalents
|
(1.5
|
)
|
|
12.1
|
|
|
8.4
|
|
|||
Cash and cash equivalents at beginning of period
|
32.0
|
|
|
19.9
|
|
|
11.5
|
|
|||
Cash and cash equivalents at end of period
|
$
|
30.5
|
|
|
$
|
32.0
|
|
|
$
|
19.9
|
|
Supplemental cash flow information:
|
|
|
|
|
|
||||||
Cash paid for interest
|
$
|
15.1
|
|
|
$
|
6.5
|
|
|
$
|
6.5
|
|
Cash paid for taxes
|
22.4
|
|
|
1.4
|
|
|
—
|
|
|||
Purchases of property, plant and equipment in accounts payable
|
$
|
3.7
|
|
|
$
|
1.3
|
|
|
$
|
15.6
|
|
|
Year ended December 31,
|
||||||||||||||||
In millions
|
2015
|
|
2014
|
||||||||||||||
|
As reported
|
Increase/(decrease)
|
Revised
|
|
As reported
|
Increase/(decrease)
|
Revised
|
||||||||||
Statement of Operations
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
$
|
967.7
|
|
(9.4
|
)
|
$
|
958.3
|
|
|
$
|
1,041.0
|
|
(5.5
|
)
|
$
|
1,035.5
|
|
Cost of sales
|
687.0
|
|
(4.1
|
)
|
682.9
|
|
|
718.3
|
|
(1.3
|
)
|
717.0
|
|
||||
Gross profit
|
280.7
|
|
(5.3
|
)
|
275.4
|
|
|
322.7
|
|
(4.2
|
)
|
318.5
|
|
||||
Selling, general and administrative expenses
|
113.8
|
|
(3.7
|
)
|
110.1
|
|
|
111.0
|
|
(3.3
|
)
|
107.7
|
|
||||
Income before income taxes
|
138.1
|
|
(1.6
|
)
|
136.5
|
|
|
203.0
|
|
(0.9
|
)
|
202.1
|
|
||||
Provision for income taxes
|
52.8
|
|
(0.6
|
)
|
52.2
|
|
|
69.8
|
|
(0.3
|
)
|
69.5
|
|
||||
Net income (loss)
|
85.3
|
|
(1.0
|
)
|
84.3
|
|
|
133.2
|
|
(0.6
|
)
|
132.6
|
|
||||
Less: Net income (loss) attributable to noncontrolling interests
|
5.0
|
|
(0.4
|
)
|
4.6
|
|
|
3.8
|
|
(0.2
|
)
|
3.6
|
|
||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
80.3
|
|
(0.6
|
)
|
$
|
79.7
|
|
|
$
|
129.4
|
|
(0.4
|
)
|
$
|
129.0
|
|
|
Year ended December 31,
|
||||||||||||||||
In millions
|
2015
|
|
2014
|
||||||||||||||
Segment Information
|
As reported
|
Increase/(decrease)
|
Revised
|
|
As reported
|
Increase/(decrease)
|
Revised
|
||||||||||
Net sales
|
|
|
|
|
|
|
|
||||||||||
Performance Materials
|
$
|
256.6
|
|
(0.2
|
)
|
$
|
256.4
|
|
|
$
|
249.4
|
|
—
|
|
$
|
249.4
|
|
Performance Chemicals
|
711.1
|
|
(9.2
|
)
|
701.9
|
|
|
791.6
|
|
(5.5
|
)
|
786.1
|
|
||||
Total net sales
|
$
|
967.7
|
|
(9.4
|
)
|
$
|
958.3
|
|
|
$
|
1,041.0
|
|
(5.5
|
)
|
$
|
1,035.5
|
|
|
|
|
|
|
|
|
|
||||||||||
Segment operating profit
|
|
|
|
|
|
|
|
||||||||||
Performance Materials
|
$
|
81.1
|
|
(1.4
|
)
|
79.7
|
|
|
$
|
90.0
|
|
(0.5
|
)
|
89.5
|
|
||
Performance Chemicals
|
86.8
|
|
(0.2
|
)
|
86.6
|
|
|
124.2
|
|
(0.4
|
)
|
123.8
|
|
||||
Total segment operating profit
|
$
|
167.9
|
|
(1.6
|
)
|
$
|
166.3
|
|
|
$
|
214.2
|
|
(0.9
|
)
|
$
|
213.3
|
|
|
Year ended December 31,
|
|||||||
In millions
|
2015
|
|||||||
Balance Sheet
|
As reported
|
Increase/(decrease)
|
Revised
|
|||||
Assets
|
|
|
|
|||||
Accounts receivable, net
|
$
|
96.2
|
|
(1.0
|
)
|
$
|
95.2
|
|
Inventories, net
|
151.0
|
|
(2.1
|
)
|
148.9
|
|
||
Current assets
|
$
|
299.4
|
|
(3.1
|
)
|
$
|
296.3
|
|
|
|
|
|
|||||
Liabilities and Equity
|
|
|
|
|||||
Accrued expenses
|
$
|
12.2
|
|
2.6
|
|
$
|
14.8
|
|
Current liabilities
|
97.2
|
|
2.6
|
|
99.8
|
|
||
Deferred income taxes
|
75.7
|
|
(1.4
|
)
|
74.3
|
|
||
Total liabilities
|
260.1
|
|
1.2
|
|
261.3
|
|
||
Net parent investment
|
533.5
|
|
(3.4
|
)
|
530.1
|
|
||
Noncontrolling interest
|
4.7
|
|
(0.9
|
)
|
3.8
|
|
||
Total equity
|
521.7
|
|
(4.3
|
)
|
517.4
|
|
||
Total liabilities and equity
|
$
|
781.8
|
|
(3.1
|
)
|
$
|
778.7
|
|
|
Year ended December 31,
|
||||||||||||||||
In millions
|
2015
|
|
2014
|
||||||||||||||
|
As reported
|
Increase/(decrease)
|
Revised
|
|
As reported
|
Increase/(decrease)
|
Revised
|
||||||||||
Statement of Cash Flows
|
|
|
|
|
|
|
|
||||||||||
Net income (loss)
|
$
|
85.3
|
|
(1.0
|
)
|
$
|
84.3
|
|
|
$
|
133.2
|
|
(0.6
|
)
|
$
|
132.6
|
|
Deferred income taxes
|
9.3
|
|
(1.0
|
)
|
8.3
|
|
|
2.4
|
|
(0.2
|
)
|
2.2
|
|
||||
Accounts receivable, net
|
8.9
|
|
(0.4
|
)
|
8.5
|
|
|
(4.2
|
)
|
(0.6
|
)
|
(4.8
|
)
|
||||
Inventories
|
(25.4
|
)
|
1.3
|
|
(24.1
|
)
|
|
(28.7
|
)
|
1.1
|
|
(27.6
|
)
|
||||
Prepaid and other current assets
|
(8.1
|
)
|
1.4
|
|
(6.7
|
)
|
|
1.6
|
|
(6.9
|
)
|
(5.3
|
)
|
||||
Accrued expenses
|
0.3
|
|
0.7
|
|
1.0
|
|
|
5.9
|
|
0.5
|
|
6.4
|
|
||||
Changes in all other operating assets and liabilities, net
|
0.5
|
|
(1.3
|
)
|
(0.8
|
)
|
|
(0.3
|
)
|
0.9
|
|
0.6
|
|
||||
Net cash provided by (used in) operating activities
|
72.5
|
|
(0.3
|
)
|
72.2
|
|
|
144.3
|
|
(5.8
|
)
|
138.5
|
|
||||
Proceeds from divestiture
|
11.0
|
|
—
|
|
11.0
|
|
|
—
|
|
6.0
|
|
6.0
|
|
||||
Net cash provided by (used in) investing activities
|
(89.3
|
)
|
—
|
|
(89.3
|
)
|
|
(102.8
|
)
|
6.0
|
|
(96.8
|
)
|
||||
Transactions with WestRock, net
|
28.8
|
|
0.3
|
|
29.1
|
|
|
(31.2
|
)
|
(0.2
|
)
|
(31.4
|
)
|
||||
Net cash provided by (used in) financing activities
|
26.7
|
|
0.3
|
|
27.0
|
|
|
(31.4
|
)
|
(0.2
|
)
|
(31.7
|
)
|
Percent of
M&E Cost
|
|
Depreciable Life in Years
|
|
Types of Assets
|
59
|
|
20
|
|
Production vessels and kilns, storage tanks, piping
|
12
|
|
15
|
|
Control systems, instrumentation, metering equipment
|
8
|
|
25 to 30
|
|
Blending equipment, storage tanks, piping, shipping equipment and platforms, safety equipment
|
18
|
|
5 to 10
|
|
Production control system equipment and hardware, laboratory testing equipment
|
3
|
|
40
|
|
Machinery & equipment support structures and foundations
|
In millions
|
Level 1
(1)
|
|
Level 2
(2)
|
|
Level 3
(3)
|
|
Total
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation arrangement
(4)
|
$
|
0.7
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.7
|
|
Separation-related Reimbursement Awards
(5)
|
$
|
2.1
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2.1
|
|
December 31, 2015
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Cash equivalents
|
$
|
10.0
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10.0
|
|
(1)
|
Quoted prices in active markets for identical assets.
|
(2)
|
Quoted prices for similar assets and liabilities in active markets.
|
(3)
|
Significant unobservable inputs.
|
(4)
|
Included within "Other liabilities" on the Consolidated Balance Sheet.
|
(5)
|
Included within "Accrued expenses" within "Other liabilities" on the Consolidated Balance Sheet. This amount represents an amount due to WestRock associated with WestRock equity awards held by Ingevity employees post Separation. In accordance with the EMA we are required to reimburse WestRock the fair market value of awards on the day Ingevity employees exercise their awards. The expense recognized during the year ended December 31, 2016 was
$1.6 million
.
|
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Raw materials
|
$
|
50.8
|
|
|
$
|
41.0
|
|
Production materials, stores and supplies
|
12.0
|
|
|
11.3
|
|
||
Finished and in-process goods
|
109.8
|
|
|
116.5
|
|
||
Subtotal
|
172.6
|
|
|
168.8
|
|
||
Less: excess of cost over LIFO cost
|
(21.4
|
)
|
|
(19.9
|
)
|
||
Inventories, net
|
$
|
151.2
|
|
|
$
|
148.9
|
|
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Machinery and equipment
|
$
|
779.0
|
|
|
$
|
658.0
|
|
Buildings and leasehold equipment
|
96.2
|
|
|
64.4
|
|
||
Land and land improvements
|
17.9
|
|
|
17.6
|
|
||
Construction in progress
(1)
|
26.3
|
|
|
142.5
|
|
||
Total cost
|
919.4
|
|
|
882.5
|
|
||
Less: accumulated depreciation
|
(496.6
|
)
|
|
(445.0
|
)
|
||
Property, plant and equipment, net
(2)
|
$
|
422.8
|
|
|
$
|
437.5
|
|
(1)
|
During the year ended December 31, 2016, we completed the start-up and have commenced commercial manufacturing operations at our activated carbon manufacturing facility in Zhuhai, China. As such, we have placed those assets in-service resulting in the decrease in construction in progress and a corresponding increase in machinery and equipment and buildings from December 31, 2015 to December 31, 2016.
|
(2)
|
Includes capital leases related to our Wickliffe, Kentucky manufacturing facility of (a) machinery and equipment of
$9.8 million
and
$13.1 million
, net of accumulated depreciation of
$74.2 million
and
$71.1 million
, and (b) buildings of
$2.7 million
and
$2.8 million
, net of accumulated depreciation of
$3.5 million
and
$3.4 million
at December 31, 2016 and 2015, respectively. Also includes capital leases related to our DeRidder, Louisiana manufacturing facility of machinery and equipment of
$17.8 million
and
$19.5 million
, net of accumulated depreciation of
$15.5 million
and
$13.8 million
at December 31, 2016 and 2015, respectively. Amortization expense associated with these capital leases is included within depreciation expense. The payments remaining under these capital leases obligations are included within Note 18.
|
|
Operating Segments
|
|
|
||||||||
In millions
|
Performance Chemicals
|
|
Performance Materials
|
|
Total
|
||||||
December 31, 2014
|
$
|
8.7
|
|
|
$
|
4.3
|
|
|
$
|
13.0
|
|
Foreign currency translation
|
(1.1
|
)
|
|
—
|
|
|
(1.1
|
)
|
|||
December 31, 2015
|
$
|
7.6
|
|
|
$
|
4.3
|
|
|
$
|
11.9
|
|
Foreign currency translation
|
0.5
|
|
|
—
|
|
|
0.5
|
|
|||
December 31, 2016
|
$
|
8.1
|
|
|
$
|
4.3
|
|
|
$
|
12.4
|
|
|
December 31, 2016
|
|
December 31, 2015
|
||||||||||||||||||||
In millions
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
|
|
Gross carrying amount
|
|
Accumulated amortization
|
|
Net
|
||||||||||||
Brands
(1)
|
$
|
13.9
|
|
|
$
|
11.3
|
|
|
$
|
2.6
|
|
|
$
|
13.7
|
|
|
$
|
10.6
|
|
|
$
|
3.1
|
|
Customer contracts and relationships
|
28.2
|
|
|
23.5
|
|
|
4.7
|
|
|
28.2
|
|
|
21.4
|
|
|
6.8
|
|
||||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.5
|
|
|
0.1
|
|
||||||
Other intangibles, net
|
$
|
42.1
|
|
|
$
|
34.8
|
|
|
$
|
7.3
|
|
|
$
|
42.5
|
|
|
$
|
32.5
|
|
|
$
|
10.0
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Amortization expense
|
$
|
3.5
|
|
|
$
|
3.2
|
|
|
$
|
3.4
|
|
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Notes payable
|
$
|
—
|
|
|
$
|
9.4
|
|
Current maturities of long-term debt
|
7.5
|
|
|
—
|
|
||
Notes payable and current maturities of long-term debt
|
$
|
7.5
|
|
|
$
|
9.4
|
|
|
December 31, 2016
|
|
December 31,
|
||||||||
In millions
|
Interest rate
|
|
Maturity date
|
|
2016
|
|
2015
|
||||
Revolving Credit Facility
(1)
|
2.20%
|
|
2021
|
|
$
|
111.9
|
|
|
$
|
—
|
|
Term Loan Facility
|
2.19%
|
|
2021
|
|
300.0
|
|
|
—
|
|
||
Capital lease obligations
|
7.67%
|
|
2027
|
|
80.0
|
|
|
80.0
|
|
||
Total debt including capital lease obligations
|
|
|
|
|
$
|
491.9
|
|
|
$
|
80.0
|
|
Less: debt issuance costs
|
|
|
|
|
(3.1
|
)
|
|
—
|
|
||
Total debt including capital lease obligations, net of debt issuance costs
|
|
|
|
|
$
|
488.8
|
|
|
$
|
80.0
|
|
Less: debt maturing within one year
|
|
|
|
|
7.5
|
|
|
—
|
|
||
Long-term debt including capital lease obligations
|
|
|
|
|
$
|
481.3
|
|
|
$
|
80.0
|
|
(1)
|
Letters of credit outstanding under the revolving credit facility were
$3.7 million
and available funds under the facility was
$284.4 million
at December 31, 2016.
|
In millions
|
|
Year Ended December 31, 2016
|
||
Share-based option expense, net of taxes of $0.3 million
|
|
$
|
0.4
|
|
Restricted stock unit expense, net of taxes of $1.6 million
|
|
2.4
|
|
|
Total share-based compensation expense, net of taxes of $1.9 million
|
|
$
|
2.8
|
|
Weighted-average assumptions used to calculate expense for stock options
|
|
For the period from Separation through December 31, 2016
|
||
Risk-free interest rate
|
|
1.6
|
%
|
|
Average life of options (years)
|
|
6.5
|
|
|
Volatility
|
|
35.0
|
%
|
|
Dividend yield
|
|
—
|
|
|
Fair value per stock option
|
|
$
|
10.61
|
|
|
|
Number of shares (in thousands)
|
|
Weighted-average exercise price (per share)
|
|
Weighted-average remaining contractual term (years)
|
|
Aggregate intrinsic value (in thousands)
|
|||||
Outstanding, May 15, 2016
|
|
—
|
|
|
N/A
|
|
|
|
|
||||
Granted
|
|
208
|
|
|
$
|
28.03
|
|
|
|
|
|
||
Exercised
|
|
—
|
|
|
N/A
|
|
|
|
|
||||
Forfeited
|
|
—
|
|
|
N/A
|
|
|
|
|
||||
Canceled
|
|
—
|
|
|
N/A
|
|
|
|
|
||||
Outstanding, December 31, 2016
|
|
208
|
|
|
$
|
28.03
|
|
|
9.4
|
|
$
|
5,573
|
|
Exercisable, December 31, 2016
|
|
—
|
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
Number of shares (in thousands)
|
|
Weighted average grant date fair value (per share)
|
|||
Nonvested, May 15, 2016
|
|
—
|
|
|
N/A
|
||
Granted
|
|
317
|
|
|
$
|
28.07
|
|
Vested
|
|
(23
|
)
|
|
$
|
27.90
|
|
Forfeited
|
|
—
|
|
|
N/A
|
||
Nonvested, December 31, 2016
|
|
294
|
|
|
$
|
28.08
|
|
In millions
|
Foreign currency adjustments
|
|
Derivative Instruments
|
|
Pension and other postretirement benefits
|
|
Total
|
||||||||
Accumulated other comprehensive income (loss), net of tax at December 31, 2013
|
$
|
0.4
|
|
|
$
|
0.2
|
|
|
$
|
—
|
|
|
$
|
0.6
|
|
2014 Activity
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
(6.7
|
)
|
|
(1.2
|
)
|
|
—
|
|
|
(7.9
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Accumulated other comprehensive income (loss), net of tax at December 31, 2014
|
$
|
(6.3
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
—
|
|
|
$
|
(7.3
|
)
|
2015 Activity
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
(9.2
|
)
|
|
(1.9
|
)
|
|
—
|
|
|
(11.1
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
||||
Accumulated other comprehensive income (loss), net of tax at December 31, 2015
|
$
|
(15.5
|
)
|
|
$
|
(1.0
|
)
|
|
$
|
—
|
|
|
$
|
(16.5
|
)
|
2016 Activity
|
|
|
|
|
|
|
|
||||||||
Other comprehensive income (loss) before reclassifications
|
(2.9
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(3.5
|
)
|
||||
Amounts reclassified from accumulated other comprehensive income (loss)
|
—
|
|
|
1.0
|
|
|
—
|
|
|
1.0
|
|
||||
Accumulated other comprehensive income (loss), net of tax at December 31, 2016
|
$
|
(18.4
|
)
|
|
$
|
—
|
|
|
$
|
(0.6
|
)
|
|
$
|
(19.0
|
)
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Cost of sales
|
$
|
5.7
|
|
|
$
|
10.3
|
|
|
$
|
9.6
|
|
Selling, general and administrative expenses
|
6.5
|
|
|
17.3
|
|
|
18.5
|
|
|||
Interest expense, net
|
7.2
|
|
|
13.5
|
|
|
9.9
|
|
|||
Total allocated cost
(1)
|
$
|
19.4
|
|
|
$
|
41.1
|
|
|
$
|
38.0
|
|
(1)
|
Allocated costs represent costs necessary to support Ingevity's operations which include governance and corporate functions such as information technology, accounting, human resources, accounts payable and other direct services including the interest on WestRock debt incurred to provide such services.
|
|
Year Ended December 31, 2016
|
||||||
In millions, except percentages
|
Pensions
|
|
Other Benefits
|
||||
Following are the weighted average assumptions used to determine the benefit obligations at December 31:
|
|
|
|
||||
Discount rate - qualified benefit plans
|
4.10
|
%
|
|
—
|
%
|
||
Discount rate - non-qualified benefit plans
|
4.15
|
%
|
|
3.95
|
%
|
||
Rate of compensation increase
|
N/A
|
|
|
N/A
|
|
||
Change in projected benefit obligation
|
|
|
|
||||
Project benefit obligation at May 15, 2016
|
$
|
24.2
|
|
|
$
|
0.8
|
|
Service cost
|
0.7
|
|
|
—
|
|
||
Interest cost
|
0.6
|
|
|
—
|
|
||
Actuarial loss (gain)
|
(1.1
|
)
|
|
(0.1
|
)
|
||
Projected benefit obligation at December 31, 2016
|
24.4
|
|
|
0.7
|
|
||
Change in plan assets
|
|
|
|
||||
Fair value of plan asset at May 15, 2016
|
19.8
|
|
|
—
|
|
||
Actual return on plan assets
|
(1.6
|
)
|
|
—
|
|
||
Company contributions
|
1.0
|
|
|
—
|
|
||
Fair value of plan assets at December 31
|
19.2
|
|
|
—
|
|
||
Funded Status
|
|
|
|
||||
Net Funded Status of the Plan Asset (Liability)
(1)
|
$
|
(5.2
|
)
|
|
$
|
(0.7
|
)
|
(1)
|
Included in "Other Liabilities" on the Consolidated Balance Sheet.
|
|
Year Ended December 31, 2016
|
||||||
In millions
|
Pensions
|
|
Other Benefits
|
||||
Pension and other postretirement benefit asset
|
$
|
—
|
|
|
$
|
—
|
|
Accrued pension and other postretirement benefit liability
|
(5.2
|
)
|
|
(0.7
|
)
|
||
Total
(1)
|
$
|
(5.2
|
)
|
|
$
|
(0.7
|
)
|
(1)
|
Included in "Other Liabilities" on the Consolidated Balance Sheet.
|
|
Year Ended December 31, 2016
|
||||||
In millions
|
Pensions
|
|
Other Benefits
|
||||
Current year net actuarial loss (gain)
|
$
|
0.9
|
|
|
$
|
(0.1
|
)
|
Current year prior service cost (credit)
|
0.1
|
|
|
—
|
|
||
Total recognized in other comprehensive (income) loss, before taxes
|
1.0
|
|
|
(0.1
|
)
|
||
Total recognized in other comprehensive (income) loss, after taxes
(1)
|
$
|
0.5
|
|
|
$
|
0.1
|
|
(1)
|
This also represents the accumulated other comprehensive income (loss), net of tax as of December 31, 2016.
|
In millions
|
December 31, 2016
|
||
Projected benefit obligations
|
$
|
24.4
|
|
Accumulated benefit obligations
|
24.4
|
|
|
Fair value of plan assets
|
$
|
19.2
|
|
|
Year Ended December 31, 2016
|
||||||
In millions, except percentages
|
Pensions
|
|
Other Benefits
|
||||
Discount rate - qualified benefit plans
(1)
|
4.00
|
%
|
|
—
|
%
|
||
Discount rate - non-qualified benefit plans
(1)
|
3.75
|
%
|
|
3.75
|
%
|
||
Expected return on plan assets
|
4.50
|
%
|
|
N/A
|
|
||
Components of net annual benefit cost:
|
|
|
|
||||
Service cost
|
$
|
0.7
|
|
|
$
|
—
|
|
Interest cost
|
0.6
|
|
|
—
|
|
||
Expected return on plan assets
|
(0.6
|
)
|
|
—
|
|
||
Net annual benefit cost
|
$
|
0.7
|
|
|
$
|
—
|
|
(1)
|
The discount rate used to calculate pension and other post-retirement obligations was based on a review of available yields on high-quality corporate bonds. In selecting a discount rate, we placed particular emphasis on a discount rate yield-curve provided by our third-party actuary which takes into consideration the projected cash flows that represent the expected timing and amount of our plans' benefit payments.
|
In millions
|
December 31, 2016
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
Significant Other Observable Inputs (Level 2)
|
|
Significant Unobservable Inputs
(Level 3)
|
||||||||
Cash and short-term investments
|
$
|
0.4
|
|
|
$
|
0.4
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Equity securities
|
|
|
|
|
|
|
|
||||||||
Common stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Preferred stock
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Mutual funds and other investments
|
2.3
|
|
|
2.3
|
|
|
—
|
|
|
—
|
|
||||
Fixed income investments
|
|
|
|
|
|
|
|
||||||||
Mutual funds
|
16.5
|
|
|
1.1
|
|
|
15.4
|
|
|
—
|
|
||||
Corporate debt instruments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Government debt
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
$
|
19.2
|
|
|
$
|
3.8
|
|
|
$
|
15.4
|
|
|
$
|
—
|
|
In millions
|
Pensions
|
|
Other Benefits
|
||||
2017
|
$
|
0.2
|
|
|
$
|
—
|
|
2018
|
0.3
|
|
|
|
|||
2019
|
0.4
|
|
|
|
|||
2020
|
0.5
|
|
|
—
|
|
||
2021
|
0.7
|
|
|
—
|
|
||
2022-2026
|
$
|
5.6
|
|
|
$
|
0.2
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Separation costs
|
$
|
17.5
|
|
|
$
|
17.2
|
|
|
$
|
0.4
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Restructuring and other (income) charges, net
|
|
|
|
|
|
||||||
Gain on sale of assets and businesses
|
$
|
—
|
|
|
$
|
(11.5
|
)
|
|
$
|
(5.6
|
)
|
Severance and other employee-related costs
(1)
|
6.3
|
|
|
—
|
|
|
—
|
|
|||
Asset write-downs
(2)
|
30.6
|
|
|
4.0
|
|
|
—
|
|
|||
Other (income) charges, net
(3)
|
4.3
|
|
|
—
|
|
|
—
|
|
|||
Total restructuring and other (income) charges, net
|
$
|
41.2
|
|
|
$
|
(7.5
|
)
|
|
$
|
(5.6
|
)
|
(1)
|
Represents severance and employee benefit charges.
|
(2)
|
Primarily represents accelerated depreciation and impairment charges on long-lived assets, which were or are to be abandoned. To the extent incurred the acceleration effect of re-estimating settlement dates and revised cost estimates associated with asset retirement obligations due to facility shutdowns are also included within the asset write-downs.
|
(3)
|
Primarily represents costs associated with rental payments, contract terminations, and other miscellaneous exit costs. Other Income primarily represents favorable developments on previously recorded exit costs as recoveries associated with restructuring activities.
|
|
Balance at
|
|
Change in
|
|
Cash
|
|
|
|
Balance at
|
|||||||
In millions
|
12/31/2015
(1)
|
|
Reserve
(2)
|
|
Payments
|
|
Other
(3)
|
|
12/31/2016
(1)
|
|||||||
Restructuring Reserves
|
$
|
—
|
|
|
10.6
|
|
|
(8.3
|
)
|
|
(0.1
|
)
|
|
$
|
2.2
|
|
(1)
|
Included in "Accrued Expenses" on the Consolidated Balance Sheet. There was
no
restructuring reserve activity during the year ended December 31, 2014.
|
(2)
|
Includes severance and other employee-related costs, exited leases, contract terminations and other miscellaneous exit costs. Any asset write-downs including accelerated depreciation and impairment charges are not included in the above table.
|
(3)
|
Primarily foreign currency translation adjustments.
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Domestic
|
$
|
118.3
|
|
|
$
|
144.6
|
|
|
$
|
201.4
|
|
Foreign
|
(31.3
|
)
|
|
(8.1
|
)
|
|
0.7
|
|
|||
Total
|
$
|
87.0
|
|
|
$
|
136.5
|
|
|
$
|
202.1
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Federal statutory tax rate
|
$
|
30.5
|
|
|
$
|
47.8
|
|
|
$
|
70.7
|
|
State and local income taxes, net of federal benefit
|
2.8
|
|
|
4.9
|
|
|
4.9
|
|
|||
Foreign income tax rate differential
|
0.8
|
|
|
(0.4
|
)
|
|
—
|
|
|||
Changes in valuation allowance
|
13.2
|
|
|
1.5
|
|
|
1.0
|
|
|||
Domestic manufacturing deduction
|
(4.0
|
)
|
|
(3.0
|
)
|
|
(5.7
|
)
|
|||
Noncontrolling interest in consolidated partnership
|
(3.1
|
)
|
|
(1.9
|
)
|
|
(1.4
|
)
|
|||
Nondeductible separation costs
|
1.5
|
|
|
2.4
|
|
|
|
||||
Nondeductible restructuring costs
|
2.2
|
|
|
—
|
|
|
—
|
|
|||
Federal and state tax credits
|
(0.6
|
)
|
|
(0.3
|
)
|
|
—
|
|
|||
Deferred rate change
|
(0.6
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
(0.1
|
)
|
|
1.2
|
|
|
—
|
|
|||
Income tax provision
|
$
|
42.6
|
|
|
$
|
52.2
|
|
|
$
|
69.5
|
|
Effective tax rate
|
49.0
|
%
|
|
38.2
|
%
|
|
34.4
|
%
|
|
Year Ended December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Deferred tax assets:
|
|
|
|
||||
Accrued restructuring
|
12.6
|
|
|
1.5
|
|
||
Employee benefits
|
12.3
|
|
|
3.4
|
|
||
Intangibles
|
5.8
|
|
|
2.9
|
|
||
Investment in partnership
|
1.4
|
|
|
0.8
|
|
||
Net operating losses
|
5.4
|
|
|
4.9
|
|
||
Start-up costs
|
1.0
|
|
|
0.2
|
|
||
Other
|
2.3
|
|
|
0.6
|
|
||
Deferred tax assets
|
$
|
40.8
|
|
|
$
|
14.3
|
|
Valuation allowance
|
(18.8
|
)
|
|
(6.6
|
)
|
||
Total net deferred tax assets
|
$
|
22.0
|
|
|
$
|
7.7
|
|
Deferred tax liabilities:
|
|
|
|
||||
Fixed assets
|
$
|
(86.9
|
)
|
|
$
|
(81.3
|
)
|
Inventory
|
(1.0
|
)
|
|
(0.7
|
)
|
||
Other
|
(0.5
|
)
|
|
—
|
|
||
Total deferred tax liabilities
|
$
|
(88.4
|
)
|
|
$
|
(82.0
|
)
|
Net deferred tax liability
|
$
|
(66.4
|
)
|
|
$
|
(74.3
|
)
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
|
|
|
|
|
|
||||||
Balance at beginning of year
|
$
|
0.7
|
|
|
$
|
0.8
|
|
|
$
|
0.9
|
|
Additions for tax positions related to current year
|
—
|
|
|
0.1
|
|
|
—
|
|
|||
Additions for tax positions related to prior years
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|||
Reductions for tax positions related to current year
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reductions for tax positions related to prior years
|
(0.2
|
)
|
|
(0.2
|
)
|
|
(0.1
|
)
|
|||
Reduction related to settlements
|
—
|
|
|
—
|
|
|
—
|
|
|||
Reduction from lapse of statute of limitation
|
—
|
|
|
(0.1
|
)
|
|
—
|
|
|||
Balance at end of year
|
$
|
0.6
|
|
|
$
|
0.7
|
|
|
$
|
0.8
|
|
In millions
|
Operating leases
|
|
Capital leases
|
||||
2017
|
$
|
11.5
|
|
|
$
|
6.0
|
|
2018
|
9.1
|
|
|
6.0
|
|
||
2019
|
7.3
|
|
|
6.0
|
|
||
2020
|
5.5
|
|
|
6.0
|
|
||
2021
|
3.1
|
|
|
6.0
|
|
||
Later years
|
4.5
|
|
|
120.0
|
|
||
Minimum lease payments
|
$
|
41.0
|
|
|
$
|
150.0
|
|
Less: amount representing interest
|
|
|
(70.0
|
)
|
|||
Capital lease obligations
|
|
|
80.0
|
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Net sales
|
|
|
|
|
|
||||||
Performance Materials
|
$
|
301.0
|
|
|
$
|
256.4
|
|
|
$
|
249.4
|
|
Performance Chemicals
|
607.3
|
|
|
701.9
|
|
|
786.1
|
|
|||
Total net sales
(1)
|
908.3
|
|
|
958.3
|
|
|
1,035.5
|
|
|||
|
|
|
|
|
|
||||||
Segment operating profit
(2)
|
|
|
|
|
|
||||||
Performance Materials
|
106.9
|
|
|
79.7
|
|
|
89.5
|
|
|||
Performance Chemicals
|
56.7
|
|
|
86.6
|
|
|
123.8
|
|
|||
Total segment operating profit
(1)
|
163.6
|
|
|
166.3
|
|
|
213.3
|
|
|||
|
|
|
|
|
|
||||||
Separation costs
(3)
|
(17.5
|
)
|
|
(17.2
|
)
|
|
(0.4
|
)
|
|||
Restructuring and other income (charges)
(4)
|
(41.2
|
)
|
|
7.5
|
|
|
5.6
|
|
|||
Interest expense
|
(19.3
|
)
|
|
(20.1
|
)
|
|
(16.4
|
)
|
|||
Interest income
|
1.4
|
|
|
—
|
|
|
—
|
|
|||
Provision for income taxes
|
(42.6
|
)
|
|
(52.2
|
)
|
|
(69.5
|
)
|
|||
Net income (loss) attributable to noncontrolling interests
|
(9.2
|
)
|
|
(4.6
|
)
|
|
(3.6
|
)
|
|||
Net income (loss) attributable to Ingevity stockholders
|
$
|
35.2
|
|
|
$
|
79.7
|
|
|
$
|
129.0
|
|
(1)
|
Relates to external customers only, all intersegment sales and related profit have been eliminated in consolidation. Refer to Note 3 for the impact of the correction to previously issued financial statements.
|
(2)
|
Segment operating profit is defined as segment revenue less segment operating expenses (segment operating expenses consist of costs of sales, selling, general and administrative expenses and other (income) expense, net). We have excluded the following items from segment operating profit: interest expense associated with corporate debt facilities, income taxes, gains (or losses) on divestitures of businesses, restructuring and other (income) charges and separation costs, and net income (loss) attributable to noncontrolling interests. Refer to Note 3 for the impact of the correction to previously issued financial statements.
|
(3)
|
See Note 15 for more information on separation costs.
|
(4)
|
Information about how restructuring and other charges (income) relate to our businesses at the segment level is discussed in Note 16.
|
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Performance Chemicals Net sales
|
|
|
|
|
|
||||||
Pavement Technologies product line
|
$
|
148.8
|
|
|
$
|
147.5
|
|
|
$
|
132.0
|
|
Oilfield Technologies product line
|
58.5
|
|
|
78.0
|
|
|
126.8
|
|
|||
Industrial Specialties product line
|
400.0
|
|
|
476.4
|
|
|
527.3
|
|
|||
Total Performance Chemicals Net sales
(1)
|
$
|
607.3
|
|
|
$
|
701.9
|
|
|
$
|
786.1
|
|
|
Depreciation and amortization
|
|
Capital expenditures
|
||||||||||||||||||||
|
Year Ended December 31,
|
|
Year Ended December 31,
|
||||||||||||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
|
2016
|
|
2015
|
|
2014
|
||||||||||||
Performance Materials
|
$
|
16.4
|
|
|
$
|
11.1
|
|
|
$
|
9.9
|
|
|
$
|
39.6
|
|
|
$
|
65.3
|
|
|
$
|
66.4
|
|
Performance Chemicals
|
22.4
|
|
|
23.5
|
|
|
22.4
|
|
|
17.1
|
|
|
35.6
|
|
|
35.4
|
|
||||||
Total
|
$
|
38.8
|
|
|
$
|
34.6
|
|
|
$
|
32.3
|
|
|
$
|
56.7
|
|
|
$
|
100.9
|
|
|
$
|
101.8
|
|
Net sales
(1)
|
Year Ended December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
North America
|
$
|
597.8
|
|
|
$
|
623.0
|
|
|
$
|
690.0
|
|
Asia Pacific
|
138.8
|
|
|
149.3
|
|
|
150.6
|
|
|||
Europe, Middle East and Africa
|
151.1
|
|
|
155.9
|
|
|
154.3
|
|
|||
South America
|
20.6
|
|
|
30.1
|
|
|
40.6
|
|
|||
Net sales
|
$
|
908.3
|
|
|
$
|
958.3
|
|
|
$
|
1,035.5
|
|
Property, plant and equipment, net
|
December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
North America
|
$
|
349.1
|
|
|
$
|
338.7
|
|
|
$
|
295.4
|
|
Asia Pacific
|
72.7
|
|
|
76.9
|
|
|
93.8
|
|
|||
Europe, Middle East and Africa
|
0.7
|
|
|
0.8
|
|
|
0.8
|
|
|||
South America
|
0.3
|
|
|
21.1
|
|
|
20.1
|
|
|||
Property, plant and equipment, net
|
$
|
422.8
|
|
|
$
|
437.5
|
|
|
$
|
410.1
|
|
Total assets
|
December 31,
|
||||||||||
In millions
|
2016
|
|
2015
|
|
2014
|
||||||
Performance Materials
|
$
|
359.5
|
|
|
$
|
355.2
|
|
|
$
|
300.7
|
|
Performance Chemicals
|
470.3
|
|
|
420.5
|
|
|
412.4
|
|
|||
Total segment assets
(2)
|
829.8
|
|
|
775.7
|
|
|
713.1
|
|
|||
Corporate and other
|
3.0
|
|
|
3.0
|
|
|
4.2
|
|
|||
Total assets
|
$
|
832.8
|
|
|
$
|
778.7
|
|
|
$
|
717.3
|
|
(1)
|
Sales are assigned to geographic areas based on location to which product was shipped to a third party.
|
(2)
|
Segment assets exclude assets not specifically managed as part of one specific segment herein referred to as "Corporate and other."
|
|
Year Ended December 31,
|
||||||||||
In millions (except share and per share data)
|
2016
|
|
2015
|
|
2014
|
||||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
35.2
|
|
|
$
|
79.7
|
|
|
$
|
129.0
|
|
|
|
|
|
|
|
||||||
Basic and Diluted earnings (loss) per share
(1)
|
|
|
|
|
|
||||||
Basic earnings (loss) per share
|
$
|
0.83
|
|
|
$
|
1.89
|
|
|
$
|
3.06
|
|
Diluted earnings (loss) per share
|
0.83
|
|
|
1.89
|
|
|
3.06
|
|
|||
|
|
|
|
|
|
||||||
Shares
(2)
|
|
|
|
|
|
||||||
Weighted average number of shares of common stock outstanding - Basic
|
42,108
|
|
|
42,102
|
|
|
42,102
|
|
|||
Weighted average additional shares assuming conversion of potential common shares
|
163
|
|
|
—
|
|
|
—
|
|
|||
Shares - diluted basis
|
42,271
|
|
|
42,102
|
|
|
42,102
|
|
(1)
|
Diluted earnings (loss) per share is calculated using net income (loss) available to common shareholders divided by diluted weighted-average shares of common shares outstanding during each period, which includes the dilutive effect of outstanding equity awards. Basic and diluted earnings (loss) per share for the year ended December 31, 2016 is calculated using the weighted average number of common shares outstanding for the period beginning after the Distribution Date. Basic and diluted earnings (loss) per share for the years ended December 31, 2015 and 2014 is calculated using the number of common shares distributed on May 15, 2016.
|
(2)
|
Shares are presented in thousands.
|
|
Year Ended December 31,
|
|||||||
In thousands
|
2016
|
|
2015
|
|
2014
|
|||
Average number of potential common shares - antidilutive
|
4
|
|
|
—
|
|
|
—
|
|
Prepaid and other current assets:
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Income and value added tax receivables
|
$
|
10.7
|
|
|
$
|
9.6
|
|
Prepaid freight and supply agreements
|
0.8
|
|
|
2.7
|
|
||
Non-trade receivables
|
5.6
|
|
|
2.8
|
|
||
Advances to suppliers
|
0.8
|
|
|
1.1
|
|
||
Other
|
5.8
|
|
|
4.0
|
|
||
|
$
|
23.7
|
|
|
$
|
20.2
|
|
Other assets:
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Deferred compensation arrangements
|
$
|
—
|
|
|
$
|
2.6
|
|
Capitalized software, net
|
5.2
|
|
|
5.0
|
|
||
Prepaid supply agreements
|
2.4
|
|
|
2.7
|
|
||
Land-use rights
|
5.6
|
|
|
5.7
|
|
||
Other
|
8.8
|
|
|
7.0
|
|
||
|
$
|
22.0
|
|
|
$
|
23.0
|
|
Accrued expenses:
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Accrued interest
|
$
|
3.2
|
|
|
$
|
2.8
|
|
Accrued taxes
|
1.5
|
|
|
1.5
|
|
||
Accrued freight
|
1.5
|
|
|
2.2
|
|
||
Accrued rebates
|
2.2
|
|
|
2.5
|
|
||
Restructuring reserves
|
2.2
|
|
|
—
|
|
||
Separation-related Reimbursement Awards
|
2.1
|
|
|
—
|
|
||
Other
|
6.6
|
|
|
5.8
|
|
||
|
$
|
19.3
|
|
|
$
|
14.8
|
|
Other liabilities:
|
December 31,
|
||||||
In millions
|
2016
|
|
2015
|
||||
Deferred compensation arrangements
|
$
|
0.7
|
|
|
$
|
2.5
|
|
Pension and other post-retirement benefit obligations
|
5.9
|
|
|
—
|
|
||
Other
|
3.6
|
|
|
4.7
|
|
||
|
$
|
10.2
|
|
|
$
|
7.2
|
|
|
2016
|
|
2015
(2)
|
||||||||||||||||||||||||||||
(in Millions, Except Share and Per Share Data)
|
1Q
(2)
|
|
2Q
(2)
|
|
3Q
(2)
|
|
4Q
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
||||||||||||||||
Net sales
|
$
|
199.6
|
|
|
$
|
245.4
|
|
|
$
|
252.4
|
|
|
$
|
210.9
|
|
|
$
|
234.5
|
|
|
$
|
259.9
|
|
|
$
|
254.8
|
|
|
$
|
209.1
|
|
Gross profit
|
63.0
|
|
|
74.7
|
|
|
80.4
|
|
|
56.3
|
|
|
67.1
|
|
|
82.1
|
|
|
76.9
|
|
|
49.3
|
|
||||||||
Income (loss) before income taxes
|
22.9
|
|
|
38.5
|
|
|
10.5
|
|
|
15.1
|
|
|
34.8
|
|
|
42.2
|
|
|
40.9
|
|
|
18.6
|
|
||||||||
Net income (loss)
|
11.7
|
|
|
25.9
|
|
|
(4.9
|
)
|
|
11.7
|
|
|
23.2
|
|
|
26.2
|
|
|
25.0
|
|
|
9.9
|
|
||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
2.5
|
|
|
1.8
|
|
|
2.3
|
|
|
2.6
|
|
|
1.2
|
|
|
0.9
|
|
|
1.2
|
|
|
1.3
|
|
||||||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
9.2
|
|
|
$
|
24.1
|
|
|
$
|
(7.2
|
)
|
|
$
|
9.1
|
|
|
$
|
22.0
|
|
|
$
|
25.3
|
|
|
$
|
23.8
|
|
|
$
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic earnings (loss) per common share attributable to Ingevity stockholders
|
$
|
0.22
|
|
|
$
|
0.57
|
|
|
$
|
(0.17
|
)
|
|
$
|
0.22
|
|
|
$
|
0.52
|
|
|
$
|
0.60
|
|
|
$
|
0.57
|
|
|
$
|
0.20
|
|
Diluted earnings (loss) per common share attributable to Ingevity stockholders
(1)
|
0.22
|
|
|
0.57
|
|
|
(0.17
|
)
|
|
0.22
|
|
|
0.52
|
|
|
0.60
|
|
|
0.57
|
|
|
0.20
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Basic
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
||||||||
Diluted
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.3
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
|
42.1
|
|
(1)
|
Diluted earnings (loss) per share is calculated using net income (loss) available to common shareholders divided by diluted weighted-average shares of common shares outstanding during each period, which includes the dilutive effect of outstanding equity awards. Basic and diluted earnings (loss) per share for periods subsequent to the Separation are calculated using the weighted average number of common shares outstanding for the period beginning after the Distribution Date. Basic and diluted earnings (loss) per share for periods prior to the Separation are calculated using the number of common shares distributed on May 15, 2016. The sum of quarterly earnings per common share may differ from the full-year amount.
|
(2)
|
Certain prior period amounts have been revised to reflect the correction of certain immaterial errors. See below for the impact of these adjustments on quarterly basis and Note 3 for the annual impact of the adjustments.
|
|
Q1 2016
|
|
Q2 2016
|
|
Q3 2016
|
||||||||||||||||||||||||||||||
(in millions, except Per Share Data)
|
Reported
|
|
Adj.
|
|
Revised
|
|
Reported
|
|
Adj.
|
|
Revised
|
|
Reported
|
|
Adj.
|
|
Revised
|
||||||||||||||||||
Net sales
|
$
|
203.9
|
|
|
$
|
(4.3
|
)
|
|
$
|
199.6
|
|
|
$
|
248.7
|
|
|
$
|
(3.3
|
)
|
|
$
|
245.4
|
|
|
$
|
252.0
|
|
|
$
|
0.4
|
|
|
$
|
252.4
|
|
Gross profit
|
60.0
|
|
|
3.0
|
|
|
63.0
|
|
|
76.1
|
|
|
(1.4
|
)
|
|
74.7
|
|
|
81.0
|
|
|
(0.6
|
)
|
|
80.4
|
|
|||||||||
Income (loss) before income taxes
|
19.8
|
|
|
3.1
|
|
|
22.9
|
|
|
38.4
|
|
|
0.1
|
|
|
38.5
|
|
|
10.5
|
|
|
—
|
|
|
10.5
|
|
|||||||||
Net income (loss)
|
9.8
|
|
|
1.9
|
|
|
11.7
|
|
|
25.8
|
|
|
0.1
|
|
|
25.9
|
|
|
(4.8
|
)
|
|
(0.1
|
)
|
|
(4.9
|
)
|
|||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
1.6
|
|
|
0.9
|
|
|
2.5
|
|
|
2.1
|
|
|
(0.3
|
)
|
|
1.8
|
|
|
2.3
|
|
|
—
|
|
|
2.3
|
|
|||||||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
8.2
|
|
|
$
|
1.0
|
|
|
$
|
9.2
|
|
|
$
|
23.7
|
|
|
$
|
0.4
|
|
|
$
|
24.1
|
|
|
$
|
(7.1
|
)
|
|
$
|
(0.1
|
)
|
|
$
|
(7.2
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Basic and diluted earnings (loss) per common share attributable to Ingevity stockholders
(1)
|
$
|
0.19
|
|
|
$
|
0.03
|
|
|
$
|
0.22
|
|
|
$
|
0.56
|
|
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
$
|
(0.17
|
)
|
|
$
|
—
|
|
|
$
|
(0.17
|
)
|
(1)
|
The sum of quarterly earnings per common share may differ from the full-year amount.
|
|
Q1 2015
|
|
Q2 2015
|
|
Q3 2015
|
|
Q4 2015
|
||||||||||||||||||||||||||||||||||||||||
(in millions, except Per Share Data)
|
Reported
|
|
Adj.
|
|
Revised
|
|
Reported
|
|
Adj.
|
|
Revised
|
|
Reported
|
|
Adj.
|
|
Revised
|
|
Reported
|
|
Adj.
|
|
Revised
|
||||||||||||||||||||||||
Net sales
|
$
|
239.2
|
|
|
$
|
(4.7
|
)
|
|
$
|
234.5
|
|
|
$
|
262.2
|
|
|
$
|
(2.3
|
)
|
|
$
|
259.9
|
|
|
$
|
256.5
|
|
|
$
|
(1.7
|
)
|
|
$
|
254.8
|
|
|
$
|
209.8
|
|
|
$
|
(0.7
|
)
|
|
$
|
209.1
|
|
Gross profit
|
69.1
|
|
|
(2.0
|
)
|
|
67.1
|
|
|
85.1
|
|
|
(3.0
|
)
|
|
82.1
|
|
|
77.6
|
|
|
(0.7
|
)
|
|
76.9
|
|
|
48.9
|
|
|
0.4
|
|
|
49.3
|
|
||||||||||||
Income (loss) before income taxes
|
36.4
|
|
|
(1.6
|
)
|
|
34.8
|
|
|
43.6
|
|
|
(1.4
|
)
|
|
42.2
|
|
|
40.5
|
|
|
0.4
|
|
|
40.9
|
|
|
17.6
|
|
|
1.0
|
|
|
18.6
|
|
||||||||||||
Net income (loss)
|
24.2
|
|
|
(1.0
|
)
|
|
23.2
|
|
|
27.1
|
|
|
(0.9
|
)
|
|
26.2
|
|
|
24.7
|
|
|
0.3
|
|
|
25.0
|
|
|
9.3
|
|
|
0.6
|
|
|
9.9
|
|
||||||||||||
Less: Net income (loss) attributable to noncontrolling interests
|
1.2
|
|
|
—
|
|
|
1.2
|
|
|
1.2
|
|
|
(0.3
|
)
|
|
0.9
|
|
|
1.3
|
|
|
(0.1
|
)
|
|
1.2
|
|
|
1.3
|
|
|
—
|
|
|
1.3
|
|
||||||||||||
Net income (loss) attributable to Ingevity stockholders
|
$
|
23.0
|
|
|
$
|
(1.0
|
)
|
|
$
|
22.0
|
|
|
$
|
25.9
|
|
|
$
|
(0.6
|
)
|
|
$
|
25.3
|
|
|
$
|
23.4
|
|
|
$
|
0.4
|
|
|
$
|
23.8
|
|
|
$
|
8.0
|
|
|
$
|
0.6
|
|
|
$
|
8.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||
Basic and diluted earnings (loss) per common share attributable to Ingevity stockholders
(1)
|
$
|
0.55
|
|
|
$
|
(0.03
|
)
|
|
$
|
0.52
|
|
|
$
|
0.62
|
|
|
$
|
(0.02
|
)
|
|
$
|
0.60
|
|
|
$
|
0.56
|
|
|
$
|
0.01
|
|
|
$
|
0.57
|
|
|
$
|
0.19
|
|
|
$
|
0.01
|
|
|
$
|
0.20
|
|
(1)
|
The sum of quarterly earnings per common share may differ from the full-year amount.
|
|
|
|
Provision/ (Benefit)
|
|
|
|
|
|||||||||
(in millions)
|
Balance, Beginning of Year
|
|
Charged to Costs and Expenses
|
|
Charged to Other Comprehensive Income
|
|
Write-offs
(1)
|
|
Balance, End of Year
|
|||||||
December 31, 2016
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for doubtful accounts
(2)
|
$
|
0.1
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
$
|
0.3
|
|
Deferred tax valuation allowance
|
$
|
6.6
|
|
|
13.2
|
|
|
(1.0
|
)
|
|
—
|
|
|
$
|
18.8
|
|
December 31, 2015
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for doubtful accounts
(2)
|
$
|
0.5
|
|
|
(0.4
|
)
|
|
—
|
|
|
—
|
|
|
$
|
0.1
|
|
Deferred tax valuation allowance
|
$
|
4.8
|
|
|
1.5
|
|
|
0.3
|
|
|
—
|
|
|
$
|
6.6
|
|
December 31, 2014
|
|
|
|
|
|
|
|
|
|
|||||||
Reserve for doubtful accounts
(2)
|
$
|
0.3
|
|
|
0.2
|
|
|
—
|
|
|
—
|
|
|
$
|
0.5
|
|
Deferred tax valuation allowance
|
$
|
3.6
|
|
|
1.0
|
|
|
0.2
|
|
|
|
|
$
|
4.8
|
|
(1)
|
Write-offs are net of recoveries.
|
(2)
|
Reserve for doubtful accounts is included within Accounts receivable, net on the Consolidated Balance Sheet.
|
Plan Category
|
Number of Securities to
be issued upon exercise of
outstanding options and
restricted stock awards
(A)
(2)
|
|
Weighted-
average
exercise price of
outstanding
options and
restricted stock
awards
(B)
(3)
|
|
Number of Securities
remaining available for
future issuance under
equity compensation
plans (excluding securities
reflected in column (A))
(C)
|
||||
Equity Compensation Plans approved by stockholders
(1)
|
502
|
|
|
$
|
28.03
|
|
|
3,476
|
|
(1)
|
Plans approved by WestRock as sole stockholder prior to the Separation while the Company was a wholly owned subsidiary.
|
(2)
|
Includes 208 stock options, 147 Restricted Stock Units (RSUs) and 127 Performance-based Restricted Stock Units (PSUs) granted to employees and 20 RSUs held by directors.
|
(3)
|
Represents the weighted-average exercise price of the outstanding stock options only. The outstanding RSUs and PSUs are not included in this calculation.
|
(a)
|
Documents filed with this Report
|
1.
|
Consolidated financial statements of Ingevity Corporation and its subsidiaries are incorporated under Item 8 of this Form 10-K.
|
2.
|
The following supplementary financial information is filed in this Form 10-K:
|
|
Page
|
Financial Statements Schedule II – Valuation and qualifying accounts and reserves for the years ended December 31, 2016, 2015 and 2014
|
3.
|
Exhibits: See attached Index of Exhibits
|
(b)
|
Exhibits
|
Exhibit No.
|
Exhibit Description
|
2.1*
|
Separation and Distribution Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
3.1*
|
Ingevity Corporation Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
3.2*
|
Ingevity Corporation Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.1*
|
Tax Matters Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.2*
|
Transition Services Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.3*
|
Employee Matters Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.4*
|
Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 11, 2016).
|
|
|
10.5*
|
Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 11, 2016).
|
|
|
Exhibit No.
|
Exhibit Description
|
10.14f*+
|
Form of Restricted Stock Unit Terms (D. Michael Wilson) under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13f to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14g+
|
Non-Employee Director Terms and Conditions for Restricted Stock Units under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.14h+
|
Non-Employee Director Terms and Conditions for Deferred Stock Units in lieu of Restricted Stock Units under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.14i+
|
Non-Employee Director Terms and Conditions for Deferred Stock Units in lieu of Annual Cash Retainer under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.15+
|
Ingevity Corporation Deferred Compensation Plan, effective January 1, 2016.
|
|
|
10.16+
|
Ingevity Corporation Non-Employee Director Deferred Compensation Plan.
|
|
|
10.17+
|
Ingevity Corporation Non-Employee Director Compensation Policy.
|
|
|
21.1
|
Ingevity Corporation List of Significant Subsidiaries
|
|
|
23.1
|
Consent of PwC
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer.
|
|
|
32.1
|
Section 1350 Certification of the company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
32.2
|
Section 1350 Certification of the company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
101
|
Interactive Data File
|
INGEVITY CORPORATION
|
|
(Registrant)
|
|
|
|
By:
|
/S/ JOHN C. FORTSON
|
|
John C. Fortson
|
|
Executive Vice President and Chief Financial Officer
|
|
(Principal Financial Officer and Duly Authorized Officer)
|
Signature
|
Title
|
Date
|
/s/ D. Michael Wilson
D. Michael Wilson
|
President and
Chief Executive Officer and Director
(Principal Executive Officer)
|
March 2, 2017
|
|
|
|
/s/ John C. Fortson
John C. Fortson
|
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
|
March 2, 2017
|
|
|
|
/s/ Phillip J. Platt
Phillip J. Platt
|
Chief Accounting Officer and
Corporate Controller
(Principal Accounting Officer) |
March 2, 2017
|
|
|
|
/s/ Richard B. Kelson
Richard B. Kelson
|
Chairman of the Board
|
March 2, 2017
|
|
|
|
/s/ Jean S. Blackwell
Jean S. Blackwell
|
Director
|
March 2, 2017
|
|
|
|
/s/ Luis Fernandez-Moreno
Luis Fernandez-Moreno
|
Director
|
March 2, 2017
|
|
|
|
/s/ J. Michael Fitzpatrick
J. Michael Fitzpatrick
|
Director
|
March 2, 2017
|
|
|
|
/s/ Frederick J. Lynch
Frederick J. Lynch
|
Director
|
March 2, 2017
|
|
|
|
/s/ Daniel F. Sansone
Daniel F. Sansone
|
Director
|
March 2, 2017
|
|
|
|
Exhibit No.
|
Exhibit Description
|
2.1*
|
Separation and Distribution Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
3.1*
|
Ingevity Corporation Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
3.2*
|
Ingevity Corporation Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.1*
|
Tax Matters Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.2*
|
Transition Services Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.3*
|
Employee Matters Agreement between Ingevity Corporation and WestRock Company (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.4*
|
Covington Plant Services Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 11, 2016).
|
|
|
10.5*
|
Covington Plant Ground Lease Agreement between Ingevity Virginia Corporation and WestRock Virginia, LLC (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 11, 2016).
|
|
|
10.6*
|
Crude Tall Oil and Black Liquor Soap Skimmings Agreement by and between Ingevity Corporation, WestRock Shared Services, LLC and WestRock MWV, LLC (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.7*
|
Credit Agreement, dated as of March 7, 2016, among Ingevity Corporation, as U.S. borrower, the lenders from time to time party thereto and Wells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.8 to the Company's Amendment No. 2 to Form 10, as filed with the U.S. Securities and Exchange Commission on March 7, 2016).
|
|
|
10.8*
|
Intellectual Property Agreement by and between WestRock Company and Ingevity Corporation (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.9*+
|
Employment Letter, dated September 18, 2015, between WestRock Company, Ingevity Corporation and John Fortson (incorporated by reference to Exhibit 10.10 to the Company's Amendment No. 3 to Form 10, as filed with the U.S. Securities and Exchange Commission on April 4, 2016).
|
|
|
10.10*+
|
Employment Letter, dated October 2, 2015, between WestRock Company, Ingevity Corporation and Katherine P. Burgeson (incorporated by reference to Exhibit 10.11 to the Company's Amendment No. 3 to Form 10, as filed with the U.S. Securities and Exchange Commission on April 4, 2016).
|
|
|
10.11*+
|
Employment Letter, dated July 24, 2015, between WestRock Company, Ingevity Corporation and Michael Wilson (incorporated by reference to Exhibit 10.12 to the Company's Amendment No. 3 to Form 10, as filed with the U.S. Securities and Exchange Commission on April 4, 2016).
|
|
|
10.12*+
|
Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 16, 2016).
|
|
|
10.13*
|
Trust Agreement, between Ingevity Corporation, The Bank of New York Mellon Trust Company, N.A. and WestRock Company (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, as filed with the U.S. Securities and Exchange Commission on May 11, 2016).
|
|
|
10.14a*+
|
Form of Option Award Term under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13a to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14b*+
|
Form of Performance-based Restricted Stock Unit Terms under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13b to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14c*+
|
Form of Replacement Cash Awards under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13c to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14d*+
|
Form of Restricted Stock Unit Terms (three year vesting) under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13d to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14e*+
|
Form of Restricted Stock Unit Terms (cliff vesting) under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13e to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14f*+
|
Form of Restricted Stock Unit Terms (D. Michael Wilson) under the Ingevity Corporation 2016 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.13f to the company’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2016).
|
|
|
10.14g+
|
Non-Employee Director Terms and Conditions for Restricted Stock Units under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.14h+
|
Non-Employee Director Terms and Conditions for Deferred Stock Units in lieu of Restricted Stock Units under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.14i+
|
Non-Employee Director Terms and Conditions for Deferred Stock Units in lieu of Annual Cash Retainer under the Ingevity Corporation 2016 Omnibus Incentive Plan.
|
|
|
10.15+
|
Ingevity Corporation Deferred Compensation Plan, effective January 1, 2016.
|
|
|
10.16+
|
Ingevity Corporation Non-Employee Director Deferred Compensation Plan.
|
|
|
10.17+
|
Ingevity Corporation Non-Employee Director Compensation Policy.
|
|
|
21.1
|
Ingevity Corporation List of Significant Subsidiaries
|
|
|
23.1
|
Consent of PwC
|
|
|
31.1
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Executive Officer.
|
|
|
31.2
|
Rule 13a-14(a)/15d-14(a) Certification of the Company’s Principal Financial Officer.
|
|
|
32.1
|
Section 1350 Certification of the company’s Principal Executive Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
32.2
|
Section 1350 Certification of the company’s Principal Financial Officer. The information contained in this Exhibit shall not be deemed filed with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by the registrant under the Securities Act of 1933, as amended.
|
|
|
101
|
Interactive Data File
|
2.1
|
Account.
Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.
|
2.2
|
Account Balance.
Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date, which is an unfunded book-entry account.
|
2.3
|
Affiliate.
Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).
|
2.4
|
Beneficiary.
Beneficiary means a natural person, estate, or trust designated by a Participant to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan. The Participant’s spouse, if living, otherwise the Participant’s estate, shall be the Beneficiary if: (i) the Participant has failed to properly designate a Beneficiary, or (ii) all designated Beneficiaries have predeceased the Participant.
|
2.5
|
Business Day
. Business Day means each day on which the New York Stock Exchange is open for business.
|
2.6
|
Change in Control
. Change in Control means, with respect to a Participating Employer that is organized as a corporation, any of the following events: (i) a change in the ownership of the Participating Employer, (ii) a change in the effective control of the Participating Employer, or (iii) a change in the ownership of a substantial portion of the assets of the Participating Employer.
|
2.7
|
Claimant.
Claimant means a Participant or Beneficiary filing a claim under Article XII of this Plan.
|
2.8
|
Code.
Code means the Internal Revenue Code of 1986, as amended from time to time.
|
2.9
|
Code Section 409A.
Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.
|
2.10
|
Committee.
Committee means the committee appointed by the Board of Directors of the Company (or the appropriate committee of such board) to administer the Plan. If no designation is made, the Chief Executive Officer of the Company or his delegate shall have and exercise the powers of the Committee.
|
2.11
|
Company.
Company means Ingevity Corporation.
|
2.12
|
Company Contribution.
Company Contribution means a credit by a Participating Employer to a Participant’s Account(s) in accordance with the provisions of Article V of the Plan. Company Contributions are credited at the sole discretion of the Participating Employer and the fact that a Company Contribution is credited in one year shall not obligate the Participating Employer to continue to make such Company Contribution in subsequent years. Unless the context clearly indicates otherwise, a reference to Company Contribution shall include Earnings attributable to such contribution.
|
2.13
|
Compensation.
Compensation means a Participant’s base salary, bonus, and such other cash or equity-based compensation (if any) approved by the Committee as Compensation that may be deferred under this Plan. Compensation shall not include any compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A.
|
2.14
|
Compensation Deferral Agreement.
Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies: (i) the amount of each component of Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, and (ii) the Payment Schedule applicable to one or more Accounts. The Committee may permit different deferral amounts for each component of Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer (i) 100% of the Restorative Savings Amount, (ii) up to 80% of base salary, and (iii) up to 100% of other types of Compensation for a Plan Year. A Compensation Deferral Agreement may also specify the investment allocation described in Section 8.4.
|
2.15
|
Death Benefit.
Death Benefit means the benefit payable under the Plan to a Participant’s Beneficiary(ies) upon the Participant’s death as provided in Section 6.1 of the Plan.
|
2.16
|
Deferral.
Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.
|
2.17
|
Earnings.
Earnings means a positive or negative adjustment to the value of an Account in accordance with Article VIII.
|
2.18
|
Effective Date.
Effective Date means January 1, 2016.
|
2.19
|
Eligible Employee.
Eligible Employee means a salaried, non-union employee in salary grade 19 or above who is a member of a “select group of management or highly compensated employees” of a Participating Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, as determined by the Committee from time to time in its sole discretion.
|
2.20
|
Employee.
Employee means a common-law employee of an Employer.
|
2.21
|
Employer.
Employer means, with respect to Employees it employs, the Company and each Affiliate.
|
2.22
|
ERISA.
ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.
|
2.23
|
Excess Compensation
. Excess Compensation means the Participant’s gross “eligible compensation” as defined in the Qualified Plan but determined without regard to the limits on compensation imposed by Code Section 401(a)(17), plus Deferrals to this Plan.
|
2.24
|
Participant.
Participant means an Eligible Employee who has received notification of his or her eligibility to defer Compensation under the Plan under Section 3.1 and any other person with an Account Balance greater than zero, regardless of whether such individual continues to be an Eligible Employee. A Participant’s continued participation in the Plan shall be governed by Section 3.2 of the Plan.
|
2.25
|
Participating Employer.
Participating Employer means the Company and each Affiliate.
|
2.26
|
Payment Schedule.
Payment Schedule means the date as of which payment of an Account under the Plan will commence and the form in which payment of such Account will be made.
|
2.27
|
Performance-Based Compensation.
Performance-Based Compensation means Compensation where the amount of, or entitlement to, the Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months. Organizational or individual performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. The determination of whether Compensation qualifies as “Performance-Based Compensation” will be made in accordance with Treas. Reg. Section 1.409A-1(e) and subsequent guidance.
|
2.28
|
Plan.
Generally, the term Plan means the “Ingevity Corporation Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also mean a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.
|
2.29
|
Plan Year.
Plan Year means January 1 through December 31.
|
2.30
|
Qualified Plan
. Qualified Plan means the Ingevity Corporation Retirement Savings Plan adopted as of January 1, 2016, as amended from time to time.
|
2.31
|
Qualified Plan Limits
. Qualified Plan Limits means the limits applicable to the Qualified Plan under Code Sections 401(a)(4), 401(a)(17), 401(k)(3), 401(m)(2), 402(g), and 415, as the same may be adjusted from time to time.
|
2.32
|
Restorative Savings Amount
. Restorative Savings Amount means base salary that a Participant has irrevocably elected to defer under the Qualified Plan for a Plan Year (whether as a “before-tax contribution” or as a Roth contribution) but that cannot be contributed to the Qualified Plan by reason of the Qualified Plan Limits.
|
2.33
|
Retirement/Termination Account.
Retirement/Termination Account means an Account established by the Committee to record amounts payable to a Participant upon Separation from Service. Unless the Participant elects otherwise, all Deferrals and Company Contributions shall be allocated to the Retirement/Termination Account on behalf of the Participant.
|
2.34
|
Separation from Service.
Separation from Service means an Employee’s termination of employment with the Employer. Whether a Separation from Service has occurred shall be determined by the Committee in accordance with Code Section 409A.
|
2.35
|
Separation from Service Benefit.
Separation from Service Benefit means the benefit payable to a Participant under the Plan following the Participant’s Separation from Service.
|
2.36
|
Specified Date Account.
Specified Date Account means an Account established by the Committee to record the amounts payable at a future date as specified in the Participant’s Compensation Deferral Agreement. Unless otherwise determined by the Committee, a Participant may establish no more than five Specified Date Accounts. A Specified Date Account may be identified in enrollment materials as an “In-Service Account” or such other name as established by the Committee without affecting the meaning thereof.
|
2.37
|
Specified Date Benefit.
Specified Date Benefit means the benefit payable to a Participant under the Plan in accordance with Section 6.1(c).
|
2.38
|
Specified Employee.
Specified Employee means an Employee who, as of the date of his or her Separation from Service, is a “key employee” of the Company or any Affiliate, any stock of which is actively traded on an established securities market or otherwise.
|
2.39
|
Specified Employee Identification Date.
Specified Employee Identification Date means December 31, unless the Employer has elected a different date through action that is legally binding with respect to all nonqualified deferred compensation plans maintained by the Employer.
|
2.40
|
Specified Employee Effective Date.
Specified Employee Effective Date means the first day of the fourth month following the Specified Employee Identification Date, or such earlier date as is selected by the Committee.
|
2.41
|
Substantial Risk of Forfeiture.
Substantial Risk of Forfeiture means the description specified in Treas. Reg. Section 1.409A-1(d).
|
2.42
|
Unforeseeable Emergency.
Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152, without regard to section 152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee.
|
2.43
|
Valuation Date.
Valuation Date means each Business Day.
|
2.44
|
Year of Service
. Year of Service means each one-year period of service as defined and determined under the Qualified Plan.
|
3.1
|
Eligibility and Participation.
An Eligible Employee becomes a Participant upon the earlier to occur of: (i) a credit of Company Contributions under Article V, or (ii) receipt of notification of eligibility to participate.
|
3.2
|
Duration.
A Participant shall be eligible to defer Compensation and receive allocations of Company Contributions, subject to the terms of the Plan, for as long as such Participant remains an Eligible Employee. A Participant who is no longer an Eligible Employee but has not Separated from Service may not defer Compensation under the Plan beyond the Plan Year in which he or she became ineligible but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero (0), and during such time may continue to make allocation elections as provided in Section 8.4. An individual shall cease being a Participant in the Plan when all benefits under the Plan to which he or she is entitled have been paid.
|
4.1
|
Deferral Elections, Generally.
|
(a)
|
A Participant may elect to defer Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Compensation shall be considered void and shall have no effect with respect to such service period or Compensation. The Committee may modify any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.
|
(b)
|
The Participant shall specify on his or her Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals to the Retirement/Termination Account or to a Specified Date Account. If no designation is made, Deferrals shall be allocated to the Retirement/Termination Account. A Participant may also specify in his or her Compensation Deferral Agreement the Payment Schedule applicable to his or her Plan Accounts. If the Payment Schedule is not specified in a Compensation Deferral Agreement, the Payment Schedule shall be the Payment Schedule specified in Section 6.2.
|
(a)
|
First Year of Eligibility.
In the case of the first year in which an Eligible Employee becomes eligible to participate in the Plan, he or she has up to 30 days following his or her initial eligibility to submit a Compensation Deferral Agreement with respect to Compensation to be earned during such year. The Compensation Deferral Agreement described in this paragraph becomes irrevocable upon the end of such 30-day period. The determination of whether an Eligible Employee may file a Compensation Deferral Agreement under this paragraph shall be determined in accordance with the rules of Code Section 409A, including the provisions of Treas. Reg. Section 1.409A-2(a)(7).
|
(b)
|
Prior Year Election.
Except as otherwise provided in this Section 4.2, Participants may defer Compensation by filing a Compensation Deferral Agreement no later than December 31 of the year prior to the year in which the Compensation to be deferred is earned. A Compensation Deferral Agreement described in this paragraph shall become irrevocable with respect to such Compensation as of January 1 of the year in which such Compensation is earned.
|
(c)
|
Performance-Based Compensation.
Participants may file a Compensation Deferral Agreement with respect to Performance-Based Compensation no later than the date that is six months before the end of the performance period, provided that:
|
(i)
|
the Participant performs services continuously from the later of the beginning of the performance period or the date the criteria are established through the date the Compensation Deferral Agreement is submitted; and
|
(ii)
|
the Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.
|
(d)
|
Short-Term Deferrals.
Compensation that meets the definition of a “short-term deferral” described in Treas. Reg. Section 1.409A-1(b)(4) may be deferred in accordance with the rules of Article VII, applied as if the date the Substantial Risk of Forfeiture lapses is the date payments were originally scheduled to commence, provided, however, that the provisions of Section 7.3 shall not apply to payments attributable to a Change in Control (as defined in Treas. Reg. Section 1.409A-3(i)(5)).
|
(e)
|
Certain Forfeitable Rights.
With respect to a legally binding right to a payment in a subsequent year that is subject to a forfeiture condition requiring the Participant’s continued services for a period of at least 12 months from the date the Participant obtains the legally binding right, an election to defer such Compensation may be made on or before the 30
th
day after the Participant obtains the legally binding right to the Compensation, provided that the election is made at least 12 months in advance of the earliest date at which the forfeiture condition could lapse. The Compensation Deferral Agreement described in this paragraph becomes irrevocable after such 30
th
day. If the forfeiture condition applicable to the payment lapses before the end of the required service period as a result of the Participant’s death or disability (as defined in Treas. Reg. Section 1.409A-3(i)(4)) or upon a Change in Control (as defined in Treas. Reg. Section 1.409A-3(i)(5)), the Compensation Deferral Agreement will be void unless it would be considered timely under another rule described in this Section.
|
(f)
|
Company Awards.
Participating Employers may unilaterally provide for deferrals of Company awards prior to the date of such awards. Deferrals of Company awards (such as sign-on, retention, or severance pay) may be negotiated with a Participant prior to the date the Participant has a legally binding right to such Compensation.
|
(g)
|
“Evergreen” Deferral Elections.
The Committee, in its discretion, may provide in the Compensation Deferral Agreement that such Compensation Deferral Agreement will continue in effect for each subsequent year or performance period. Such “evergreen” Compensation Deferral Agreements will become effective with respect to an item of Compensation on the date such election becomes irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be terminated or modified prospectively with respect to Compensation for which such election remains revocable under this Section 4.2. A Participant whose Compensation Deferral Agreement is cancelled in accordance with Section 4.6 will be required to file a new Compensation Deferral Agreement under this Article IV in order to recommence Deferrals under the Plan.
|
4.3
|
Allocation of Deferrals.
A Compensation Deferral Agreement may allocate Deferrals to one or more Specified Date Accounts and/or to the Retirement/Termination Account. The Committee may, in its discretion, establish a minimum deferral period for the establishment of a Specified Date Account (for example, the second Plan Year following the year Compensation is allocated to such accounts.).
|
4.4
|
Deductions from Pay.
The Committee has the authority to determine the payroll practices under which any component of Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Compensation.
|
4.5
|
Vesting.
Participant Deferrals shall be 100% vested at all times.
|
4.6
|
Cancellation of Deferrals.
The Committee may cancel a Participant’s Deferrals: (i) for the balance of the Plan Year in which an Unforeseeable Emergency occurs, (ii) if the Participant receives a hardship distribution under the Employer’s qualified 401(k) plan, through the end of the Plan Year in which the six month anniversary of the hardship distribution falls, and (iii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months, provided cancellation occurs by the later of the end of the taxable year of the Participant or the 15
th
day of the third month following the date the Participant incurs the disability (as defined in this paragraph (iii)).
|
5.1
|
Matching Contributions
. For each Plan Year with respect to which a Participant has made Deferrals to the Plan, the Participating Employer may make a Matching Contribution to the Participant’s Account equal to100 percent of the Participant’s Deferrals for the Plan Year up to a maximum of 6 percent of his or her Excess Compensation for such Plan Year. All Matching Contributions shall be allocated to a Participant’s Retirement/Termination Account.
|
5.2
|
Nonelective Contributions
. For each Plan Year, the Participating Employer may make a Nonelective Contribution to the Plan on behalf of each Participant in an amount equal to any nonelective contributions that would have been made to the Qualified Plan but were not made due to the Qualified Plan Limits. All Nonelective Contributions shall be allocated to a Participant’s Retirement/Termination Account.
|
5.3
|
Transition Contributions
. For each Plan Year ending on or before December 31, 2020, the Participating Employer may make a Transition Contribution for Participants who are Cash Balance Grandfathered Employees or Final Average Pay Grandfathered Employees (as such terms are defined in the Qualified Plan) in an amount equal to any transition contributions that would have been made to the Qualified Plan but were not made due to the Qualified Plan Limits.
|
5.4
|
Discretionary Contributions.
The Participating Employer may, from time to time in its sole and absolute discretion, credit Company Contributions to any Participant in any amount determined by the Participating Employer. Such contributions will be credited to a Participant’s Retirement/Termination Account.
|
5.5
|
Vesting.
Company Contributions described in Sections 5.1 and 5.3 above, and the Earnings thereon, shall be 100% vested at all times. Company Contributions described in Section 5.2, above, and the Earnings thereon, shall become vested upon the Participant’s Completion of three Years of Service and shall be 0% vested until that date; such contributions shall also become 100% vested if related contributions under the Qualified Plan become vested. Company Contributions described in Section 5.4 above, and the Earnings thereon, shall vest in accordance with the vesting schedule(s) established by the Committee at the time that the Company Contribution is made. All Company Contributions shall become 100% vested if a Participant, while actively employed, dies or experiences a Change in Control. The Participating Employer may, at any time, in its sole discretion, increase a Participant’s vested interest in a Company Contribution. The portion of a Participant’s Accounts that remains unvested upon his or her Separation from Service after the application of the terms of this Section 5.4 shall be forfeited.
|
6.1
|
Benefits, Generally.
A Participant shall be entitled to the following benefits under the Plan:
|
(a)
|
Separation from Service Benefit.
Upon the Participant’s Separation from Service for reasons other than death, he or she shall be entitled to a Separation from Service Benefit. The Separation from Service Benefit shall be equal to the vested portion of the Retirement/Termination Account, based on the value of that Account(s) as of the end of the month in which Separation from Service occurs or such later date as the Committee, in its sole discretion, shall determine. In no event shall payment to a Participant who is a Specified Employee as of the date such Participant incurs a Separation from Service be made or begin sooner than the date which follows the six-month anniversary of the date Separation from Service occurs. If the Separation from Service Benefit is to be paid in the form of installments, any subsequent installment payments to a Specified Employee will be paid on the anniversary of the date the initial installment was made.
|
(b)
|
Specified Date Benefit.
If the Participant has established one or more Specified Date Accounts, he or she shall be entitled to a Specified Date Benefit with respect to each such Specified Date Account. The Specified Date Benefit shall be equal to the vested portion of the Specified Date Account, and is valued and becomes payable on the first day of the month designated by the Participant at the time the Account was established.
|
(c)
|
Death Benefit.
In the event of the Participant’s death, his or her designated Beneficiary(ies) shall be entitled to a Death Benefit. The Death Benefit shall be equal to all remaining, vested balances in each Retirement/Termination Account and Specified Date Account, based on the value of the Accounts as of the end of the month in which death occurred, or such later date as the Committee, in its sole and absolute discretion, shall determine.
|
(d)
|
Change in Control Benefit
. If elected by the Participant on a Compensation Deferral Agreement completed in connection with his or her initial participation in the Plan, he or she shall be entitled to a Change in Control Benefit in the event a Change in Control occurs while he or she is actively employed. The Change in Control Benefit shall be equal to all remaining, vested balances in the Retirement/Termination Account and in each Specified Date Account, based on the value of the Accounts as of the date the Change in Control occurred.
|
(e)
|
Unforeseeable Emergency Payments.
A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Accounts. Whether a Participant or Beneficiary is faced with an Unforeseeable Emergency permitting an emergency payment shall be determined by the Committee based on the relevant facts and circumstances of each case, but, in any case, a distribution on account of Unforeseeable Emergency may not be made to the extent that such emergency is or may be reimbursed through insurance or otherwise, by liquidation of the Participant’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of Deferrals under this Plan. If an emergency payment is approved by the Committee, the amount of the payment shall not exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted first from the vested portion of the Retirement/Termination Account until depleted and then pro rata from the vested portion of each Specified Date Account. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee.
|
6.2
|
Form of Payment.
|
(a)
|
Separation from Service Benefit.
A Participant who is entitled to receive a Separation from Service Benefit shall receive payment of such benefit in a single lump sum, unless the Participant elects on a timely-filed Compensation Deferral Agreement to have such benefit paid in one of the following alternative forms of payment: (i) substantially equal annual installments over a period of two to ten years, as elected by the Participant, or (ii) a lump sum payment of a percentage of the balance in the Retirement/Termination Account, with the balance paid in substantially equal annual installments over a period of two to ten years, as elected by the Participant.
|
(b)
|
Specified Date Benefit.
The Specified Date Benefit shall be paid in a single lump sum, unless the Participant elects on the Compensation Deferral Agreement with which the account was established to have the Specified Date Account paid in substantially equal annual installments over a period of two to five years, as elected by the Participant.
|
(c)
|
Death Benefit.
A designated Beneficiary who is entitled to receive a Death Benefit shall receive payment of such benefit in a single lump sum.
|
(d)
|
Change in Control Benefit.
A Participant who has elected to receive a Change in Control Benefit will receive a single lump sum payment equal to the unpaid balance of all of his or her Accounts if he or she is actively employed on the date a Change in Control occurs.
|
(e)
|
Small Account Balances.
The Committee shall pay the value of the Participant’s Accounts upon a Separation from Service in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan. The Committee may at any time direct that the value of all of the Participant’s Accounts be paid in a single lump sum if the balance of such Accounts is not greater than the applicable dollar amount under Code Section 402(g)(1)(B), provided the payment represents the complete liquidation of the Participant’s interest in the Plan.
|
(f)
|
Rules Applicable to Installment Payments.
If a Payment Schedule specifies installment payments, annual payments will be made beginning as of the payment commencement date for such installments and shall continue on each anniversary thereof until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the Valuation Date and (b) equals the remaining number of installment payments.
|
6.3
|
Acceleration of or Delay in Payments.
The Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of a benefit owed to the Participant hereunder, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of a benefit owed to the Participant hereunder, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7). If the Plan receives a domestic relations order (within the meaning of Code Section 414(p)(1)(B)) directing that all or a portion of a Participant’s Accounts be paid to an “alternate payee,” any amounts to be paid to the alternate payee(s) shall be paid in a single lump sum.
|
7.1
|
Participant’s Right to Modify.
A Participant may modify any or all of the alternative Payment Schedules with respect to an Account, consistent with the permissible Payment Schedules available under the Plan, provided such modification complies with the requirements of this Article VII.
|
7.2
|
Time of Election.
The date on which a modification election is submitted to the Committee must be at least 12 months prior to the date on which payment is scheduled to commence under the Payment Schedule in effect prior to the modification.
|
7.3
|
Date of Payment under Modified Payment Schedule.
Except with respect to modifications that relate to the payment of a Death Benefit or a Disability Benefit, the date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the original Payment Schedule. Under no circumstances may a modification election result in an acceleration of payments in violation of Code Section 409A.
|
7.4
|
Effective Date.
A modification election submitted in accordance with this Article VII is irrevocable upon receipt by the Committee and becomes effective 12 months after such date.
|
7.5
|
Effect on Accounts.
An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules of any other Accounts.
|
8.1
|
Valuation.
Deferrals shall be credited to appropriate Accounts on the date such Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Company Contributions shall be credited to the Retirement/Termination Account at the times determined by the Committee. Valuation of Accounts shall be performed under procedures approved by the Committee.
|
8.2
|
Earnings Credit.
Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VIII (“investment allocation”).
|
8.3
|
Investment Options
. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.
|
8.4
|
Investment Allocations.
A Participant’s investment allocation constitutes a deemed hypothetical, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.
|
8.5
|
Unallocated Deferrals and Accounts.
If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee, the identity of which shall be communicated to the Participant in Plan communication materials.
|
9.1
|
Plan Administration
. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XII.
|
9.2
|
Administration Upon Change in Control.
Upon a Change in Control, the Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Committee. The individual who was the Chief Executive Officer of the Company (or if such person is unable or unwilling to act, the next highest ranking officer) prior to the Change in Control shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee.
|
9.3
|
Withholding.
The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from Compensation that has not been deferred to the Plan.
|
9.4
|
Indemnification.
The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.
|
9.5
|
Delegation of Authority.
In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.
|
9.6
|
Binding Decisions or Actions.
The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.
|
10.1
|
Amendment and Termination.
The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article X. Each Participating Employer may also terminate its participation in the Plan.
|
10.2
|
Amendments.
The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date) or reduce any rights of a Participant under the Plan or other Plan features with respect to Deferrals made prior to the date of any such amendment or restatement without the consent of the Participant. The Board of Directors of the Company may delegate to the Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of: (i) conforming the Plan to the requirements of law; (ii) facilitating the administration of the Plan; (iii) clarifying provisions based on the Committee’s interpretation of the document; and (iv) making such other amendments as the Board of Directors may authorize.
|
10.3
|
Termination.
The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix). If a Participating Employer terminates its participation in the Plan, the benefits of affected Employees shall be paid at the time provided in Article VI.
|
10.4
|
Accounts Taxable Under Code Section 409A.
The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A.
|
11.1
|
General Assets.
Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article XI. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.
|
11.2
|
Rabbi Trust.
A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.
|
12.1
|
Filing a Claim.
Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).
|
(a)
|
In General.
Notice of a denial of benefits will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.
|
(b)
|
Contents of Notice.
If a claim for benefits is completely or partially denied, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language. The notice shall: (i) cite the pertinent provisions of the Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on review.
|
12.2
|
Appeal of Denied Claims.
A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relevant to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information: (i) was relied upon in making a benefits determination, (ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.
|
(a)
|
In General.
Appeal of a denied benefits claim must be filed in writing with the Appeals Committee no later than 60 days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.
|
(b)
|
Contents of Notice.
If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing and shall set forth the reasons for denial in plain language.
|
12.3
|
Claims Appeals Upon Change in Control.
Upon a Change in Control, the Appeals Committee, as constituted immediately prior to such Change in Control, shall continue to act as the Appeals Committee. Upon such Change in Control, the Company may not remove any member of the Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement.
|
12.4
|
Legal Action.
A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or her administrative remedies under such claims procedures.
|
12.5
|
Discretion of Appeals Committee.
All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.
|
12.6
|
Arbitration.
|
(a)
|
Prior to Change in Control.
If, prior to a Change in Control, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XII, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator. Arbitration shall be conducted in accordance with the following procedures:
|
(b)
|
Upon Change in Control.
If, upon the occurrence of a Change in Control, any dispute, controversy or claim arises between a Participant or Beneficiary and the Participating Employer out of or relating to or concerning the provisions of the Plan, such dispute, controversy or claim shall be finally settled by a court of competent jurisdiction which, notwithstanding any other provision of the Plan, shall apply a de novo standard of review to any determination made by the Company or its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.
|
13.1
|
Assignment.
No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).
|
13.2
|
No Legal or Equitable Rights or Interest.
No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.
|
13.3
|
No Employment Contract.
Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.
|
13.4
|
Notice.
Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:
|
13.5
|
Headings.
The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.
|
13.6
|
Invalid or Unenforceable Provisions.
If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.
|
13.7
|
Lost Participants or Beneficiaries.
Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored.
|
13.8
|
Facility of Payment to a Minor.
If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof.
|
13.9
|
Governing Law.
To the extent not preempted by ERISA, the laws of the State of South Carolina shall govern the construction and administration of the Plan.
|
1.
|
General
. The Non-Employee Director Deferred Compensation Plan (the “Plan”) as set forth herein, has been adopted under the Ingevity Corporation Omnibus Incentive Plan (the “Equity Plan”) by the Board of Directors (the “Board”) of Ingevity Corporation (the “Company”). The purpose of the Plan is to promote the success and enhance the value of the Company by linking the personal interests of the members of the Board to those of the Company’s shareholders. Capitalized but undefined terms used herein shall have the meanings provided for in the Equity Plan.
|
2.
|
Administration
. The Plan will be administered by the Compensation Committee of the Board subject to the provisions of the Equity Plan and the Company’s Non-Employee Director Compensation Policy as in effect from time to time (the “Director Compensation Policy”) and subject to applicable law. The Administrator will have full power and authority to supervise the administration and interpret the provisions of the Plan and to authorize and supervise any crediting of DSUs or issuance or payment of Common Stock hereunder. Any determination or action of the Administrator in connection with the interpretation or administration of the Plan will be final, conclusive and binding on all parties. The Administrator (and each member thereof) will not be liable for any determination made, or any decision made, or action taken, with respect to the Plan.
|
3.
|
Eligibility
. Each member of the Board who is eligible to receive compensation under the Director Compensation Policy (each “Non-Employee Director”) shall be eligible to receive DSUs in accordance with the Plan. Each such eligible Non-Employee Director who elects to participate in the Plan will be referred to herein as a “Participant.”
|
4.
|
Non-Employee Director Compensation Generally
. The amount and kind of compensation paid to each Participant for service as a Non-Employee Director (“Non-Employee Compensation”) and the amount and kind of compensation eligible for a deferral election will be determined from time to time in accordance with the Director Compensation Policy, as such policy may be amended by the Board from time to time. In the event of any conflict between the terms of this Plan and the Director Compensation Policy, the terms of the Director Compensation Policy shall control except as otherwise required to comply with Section 409A of the Internal Revenue Code (the “Code”). Notwithstanding any provision of the Plan to the contrary, a Non-Employee Director shall be permitted to make a Deferral Election with respect to Director Compensation only to the extent permitted by the Director Compensation Policy.
|
5.
|
Deferral Elections
.
|
a.
|
To the extent permitted by the Director Compensation Policy or otherwise permitted by the Board, a Non-Employee Director may make an irrevocable deferral election (a “Deferral Election”) to defer payment of all of his Director Compensation in accordance with the terms of the Plan.
|
b.
|
In order to make a Deferral Election pursuant to Section 5a. of the Plan, a Non-Employee Director must deliver to the Company a written notice in a form prescribed by the Company (the “Deferral Election Form”) setting forth and clearly identifying the Director Compensation (e.g., Annual Retainer, Other Compensation or RSUs) subject to the Deferral Election acknowledging that 100% of such compensation will be deferred and paid in DSUs in accordance with the Plan.
|
c.
|
The Deferral Election must be delivered no later than (and shall become irrevocable as of) the last business day of the calendar year prior to the year for which such Director Compensation is to be paid (the “Service Year”), and will be effective with respect to Director Compensation earned for such Service Year; provided, however, that any newly eligible Director who is initially elected to the Board may deliver the Deferral Election Form within 30 days of the date on which such Director becomes a Director, and such Deferral Election Form will be irrevocable as of the close of the business on the date it is delivered, and will be effective with respect to Director Compensation earned after the date it is delivered for the remainder of the Service Year in which such Director becomes a Director.
|
d.
|
For purposes of the Plan, except as otherwise provided for in the Equity Plan or award terms and conditions, the “Deferred Payment Date” means the Participant’s Separation from Service on the Board within the meaning of Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”).
|
e.
|
Notwithstanding the foregoing, a Participant may only revoke or modify a Deferral Election Form subject to proof of an “unforeseeable emergency” (within the meaning of Treasury Regulation 1.409A-3(i)(3), as determined by the Administrator, and other limitations and restrictions as the Administrator may prescribe in its sole discretion by delivering a revised Deferral Election Form, which must be approved by the Administrator. If a Participant is allowed to discontinue a deferral election during a calendar year, he or she will not be permitted to elect a new deferral until the next calendar year.
|
6.
|
Deferred Stock Unit or DSU Accounts.
|
a.
|
If a Participant elects to receive DSUs under Section 5 of the Plan, notional shares of DSUs will be credited to a bookkeeping account in the Participant’s name as of the day the Director Compensation to which the DSU relates and would have been paid. The number of notional shares of DSU may be subject to vesting and forfeiture as provided in the Director Compensation Policy. Each notional share in a Participant’s bookkeeping account (“DSU Account”) shall represent the right to receive one share of Common Stock at such time as it provided in Section 7 below.
|
b.
|
Participants shall be entitled to Dividend Equivalents with respect to each notional share in the Participant’s DSU Account credited in similar fashion to how all dividends are treated with respect to RSUs under the terms of the Equity Plan. All Dividend Equivalents credited to any DSUs will be deferred until the Deferred Payment Date and shall be subject to the same vesting and forfeiture conditions, if any, applied to the DSU in respect of which such Dividend Equivalents were credited.
|
c.
|
Subject to Section 7b. of the Plan, DSUs will be subject to a deferral period beginning on the date of crediting to the Participant’s account and ending upon the Deferred Payment Date. During such deferral period, the Participant will have no rights as a Company shareholder with respect to his or her DSUs.
|
7.
|
Delivery of Award.
|
a.
|
Subject to Section 7b. of the Plan, the number of vested shares in the Participant’s DSU Account as of the Deferred Payment Date will be delivered on or as soon as practicable, but in no event more than 60 days after the Deferred Payment Date. The Company will deliver the shares of Common Stock a Participant is entitled to receive in accordance with the terms of the Plan and the Director Compensation Policy.
|
b.
|
Notwithstanding anything in the Plan to the contrary, if at the time of a Director’s Separation from Service, such Director is a “specified employee” as defined in Code Section 409A, as reasonably determined by the Company in accordance with Code Section 409A, and the deferral of the commencement of any distribution otherwise payable hereunder as a result of such Separation from Service is necessary in order to prevent any accelerated or additional tax under Code Section 409A, then the Company will defer any such distributions hereunder (without any reduction in the amounts ultimately distributed or provided to the Director) until the date that is at least six months following the Director’s Separation from Service with the Company) or the earliest date permitted under Code Section 409A) where upon the Company will distribute to the Director a lump sum amount equal to the cumulative amounts
|
8.
|
Amendment or Termination.
|
a.
|
The Company may at any time amend the Plan, provided that to the extent necessary and desirable to comply with any applicable law, regulation or stock exchange rule, the Company will obtain shareholder approval of any Plan amendment in such manner and to such degree as required. The Company may terminate the Plan at any time and, in connection with any such termination, may deliver to each Participant the shares of Common Stock credited to his or her account, subject to and in accordance with the requirements of Treasury Regulation Section 1.409A-3(j)(4)(ix)(or any successor provision thereto). An amendment or termination of the Plan will not adversely affect the right of a Participant to receive Common Stock issuable at the effective date of the amendment or termination.
|
b.
|
The Plan is intended to meet the requirements of Code Section 409A and will be interpreted and construed in accordance with Code Section 409A and Department of Treasury Regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of this Plan. Notwithstanding any provision of the Plan or the Director Compensation Policy to the contrary, in the event that following the effective date of this Plan the Administrator determines that any provision of the Plan could otherwise cause any person to be subject to the penalty taxes imposed under Code Section 409A, the Administrator may adopt such amendments to the Plan or adopt other policies and procedures (including amendments policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to comply with the requirements of Code Section 409A and related Department of Treasury guidance and thereby avoid the application of any penalty taxes under such Section.
|
9.
|
Miscellaneous.
|
a.
|
The rights, benefits or interests a Participant may have under this Plan are not assignable or transferable and will not be subject in any manner to alienation, sale or any encumbrances, liens, levies, attachments, pledges or charges of the Participant or his or her creditors.
|
b.
|
To the extent that the application of any formula described in the Director Compensation Policy does not result in a whole number of shares of Common Stock, the result will be rounded to the next whole number.
|
c.
|
The Plan has been adopted under the Equity Plan and shall be subject to all of the terms and conditions of the Equity Plan (and/or such successor plan, as determined by the Administrator).
|
d.
|
The adoption and maintenance of this Plan will not be deemed to be a contract between the Company and a Participant to retain his or her position as a Director.
|
1.
|
General
. The Non-Employee Director Compensation Policy (the “Policy”) as set forth herein provides for the compensation payable to the non-employee directors of Ingevity Corporation (the “Company”) certain elements of which were previously approved by the Company’s Board of Directors by Unanimous Written Consent on May 15, 2016, and ratified by the Compensation Committee of the Board of Directors of the Company on May 27, 2016. Capitalized but undefined terms used herein shall have the meanings provided for in the Ingevity Corporation 2016 Omnibus Incentive Plan (the “Plan”).
|
2.
|
Annual Retainer and Other Compensation
. Each member of the Board who is not or has not been employed by the Company or one of its subsidiaries (a “Non-Employee Director”) shall be entitled to an annual retainer as follows:
|
a.
|
The annual retainer fee for service on the Board shall be $75,000 (such amount the “Annual Retainer”) with $75,000 of the Annual Retainer payable at the Non-Employee’s direction 100% in either (i) fully vested deferred stock units (“DSUs”) (valued based on the Fair Market Value of the Common Stock on the date of grant) or (ii) cash. If no election is made, the Annual Retainer will be paid 100% in cash.
|
b.
|
The annual retainer fee for service as the Chair of the Board of Directors shall be $70,000, the annual retainer fee for service as the Chair of the Audit Committee shall be $15,000, and the annual retainer fee for service as the Chair of either the Compensation or Nominating and Governance Committee shall be $10,000 (“Other Compensation”). Other Compensation is payable at the Non-Employee’s direction 100% in either (i) fully vested DSUs (valued based on the Fair Market Value of the Common Stock on the date of grant or (ii) cash. If no election is made, the Other Compensation will be paid 100% in cash.
|
3.
|
Timing of Payment of Annual Retainer and Other Compensation
. The Annual Retainer and Other Compensation payable are intended to cover service from one annual meeting of the shareholders to the next and,
unless a deferral election is made as provided below
, shall be paid quarterly in advance on the first business day of each calendar quarter, without any requirement of additional Board action in connection therewith.
|
4.
|
Annual Stock Award
. Each Non-Employee Director shall also be entitled to receive an annual stock award in the form of Restricted Stock Units (or “RSUs”) valued at $90,000 as of the close of business on the date of grant. RSUs are granted as of the next business day after the date of the Company’s annual shareholders meeting, without any
|
5.
|
Pro- ration
. A new (or terminating) Non-Employee Director who commences service after the annual meeting of shareholders (or who retires before the next annual meeting) shall be entitled to a pro-rated Annual Retainer, Other Compensation, if applicable, and annual RSU as approved by the incumbent Non-Employee Directors in such year. Pro-ration shall be as of the first day of the calendar quarter in which service by a director commences in the case of new employees, and as of the last day of the calendar quarter in which service by a director terminates in the case of terminating directors. The amount of the pro-rated compensation shall be described in the terms and conditions applicable to the Non-Employee’s specific award, as approved by the Compensation Committee of the Board of Directors.
|
6.
|
Deferral Election
. A Non-Employee Director may elect to receive DSUs in lieu of (i) his or her Annual Retainer, (ii) Other Compensation, and (iii) RSUs. Any DSUs that relate to a Non-Employee Director’s Annual Retainer, Other Compensation or RSUs shall be subject to the same vesting provisions as set forth in Section 2 above, or as set forth in the award terms and conditions. If the Non-Employee Director elects to receive DSUs, the units will be credited to a bookkeeping account under the Company’s Non-Employee Director Deferred Compensation Plan, where each unit will be equivalent in value to one share of Common Stock, and the units will not be distributed in actual shares of Common Stock, until the Non-Employee Director terminates his service from the Board, except as otherwise provided for in the award terms or the Plan.
|
7.
|
Effect of Other Plan Provisions.
All of the provisions of the Plan shall apply to the Awards granted automatically pursuant to this Policy.
|
8.
|
Policy Subject to Amendment, Modification and Termination.
This Policy may be amended, modified or terminated by the Compensation Committee of the Board in the future at its sole discretion. Without limiting the generality of the foregoing, the Board or the Compensation Committee hereby expressly reserves the authority to terminate this Policy during any year up and until the election of directors at a given annual meeting of shareholders.
|
1.
|
Terms and Conditions
: This grant of service-based restricted stock units is made under the Ingevity Corporation 2016 Omnibus Incentive Plan (the “
Plan
”), and is subject in all respects to the terms of the Plan. All terms of the Plan are hereby incorporated into these terms and conditions (the “
Terms and Conditions
”) by reference. In the event of a conflict between one or more provisions of these Terms and Conditions and one or more provisions of the Plan, the provisions of the Plan shall govern. Each capitalized term not defined herein has the meaning assigned to such term in the Plan.
|
2.
|
Confirmation of Grant
: Effective as [April 28, 2017] (the “
Award Date
”), Ingevity Corporation (the “
Company
”) granted the Non-Employee Director whose name is set forth in the notice of grant (the “
Grantee
”) time-based Restricted Stock Units with respect to a specified number of shares of Common Stock as set forth in the Grantee’s notice of grant (the “
RSUs
”). By accepting the RSUs, the Grantee acknowledges and agrees that the RSUs are subject to the Terms and Conditions and the terms of the Plan.
|
3.
|
Stockholder Rights
:
|
a.
|
Except as provided in Section 3(b) below, the Grantee will not have any stockholder rights or privileges (including voting rights) with respect to the shares of Common Stock subject to the RSUs until such shares of Common Stock vest and are actually issued and registered in the Grantee’s name in the Company’s books and records.
|
b.
|
If the Company declares a cash dividend on its shares of Common Stock, on the payment date of the dividend, the Grantee shall be credited with dividend equivalents equal to the amount of such cash dividend per share of Common Stock multiplied by the number of shares of Common Stock subject to the RSUs. The dividend equivalents will be subject to the same terms regarding vesting and forfeiture as the RSUs and will be paid in cash at the times that the corresponding shares of Common Stock associated with the RSUs are delivered (or forfeited at the time that the RSUs are forfeited). The Grantee shall be responsible for any tax liability associated with any cash payments in accordance with Section 10 below.
|
4.
|
Automatic Forfeiture
: The RSUs (including any RSUs that have vested but not yet been settled) will automatically be forfeited and all rights of the Grantee to the RSUs shall terminate under any of the following circumstances:
|
a.
|
The Grantee’s service with the Company as a Non-employee Director is terminated by the Company for Cause.
|
b.
|
The Committee requires recoupment of the RSUs in accordance with any recoupment policy adopted or amended by the Company from time to time.
|
5.
|
Transferability
: The RSUs shall not be sold, transferred, assigned, pledged or otherwise encumbered or disposed.
|
6.
|
Vesting
: The RSUs shall vest in full on April 28, 2018; provided that the Grantee continues to serve as a Non-Employee Director with the Company through such date. In the event the Grantee ceases to be a Non-Employee Director for any reason before April 28, 2018 other than as described in Sections 4 and 7, a number of the RSUs (rounded up to the nearest whole number) awarded to the Grantee shall become vested on a pro rata basis equal to the total number of RSUs granted on the Award Date, multiplied by a fraction the numerator of which is equal to the number of full months that have elapsed from the Award Date and the denominator of which is 12, and any remaining portion of the RSUs shall be forfeited and, the vested RSUs shall be settled as described in Section 9 below.
|
7.
|
Termination of Service
: If, prior to the first anniversary of the Award Date, (i) the Grantee’s service with the Company is terminated by reason of death or Disability (as defined below), the RSUs shall become vested in full and settled as described in Section 9 below. For purposes of these Terms and Conditions “
Disability
” means permanently and totally disabled in accordance with Section 409A of the Internal Revenue Code.
|
8.
|
Change in Control
: In the event of a Change in Control, Section 14 of the Plan shall control and Section 14 of the Plan shall supersede Sections 7 and 8 of these Terms and Conditions;
provided
,
however
, in the event that, following a Change in Control in which the RSUs are assumed, the Grantee’s service is terminated by reason of the Grantee’s death or Disability, the RSUs shall vest in full and be settled as provided in
Section 9
of these Terms and Conditions.
|
9.
|
Settlement
: Any RSUs not previously forfeited shall be settled by delivery of one share of Common Stock for each RSU being settled. The RSUs shall be settled as soon as practicable after the applicable vesting date (including without limitation for this purpose vesting upon the Grantee’s termination of service as provided in Section 7 and 8, but in no event later than 60 days after the applicable vesting date. Notwithstanding the foregoing, to the extent that the RSUs are subject to Section 409A of the Internal Revenue Code, all such payments shall be made in compliance with the requirements of Section 409A of the Internal Revenue Code, including application of the six month settlement delay for any specified employee (as defined in Section 409A of the Internal Revenue Code) in the event of vesting as a result of a separation from service (as defined in Section 409A of the Internal Revenue Code).
|
10.
|
Tax Withholding
: The Grantee as a Non-Employee Director is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the RSUs, and as such the Company has no withholding obligation associated with the vested RSUs.
|
11.
|
No Right to Continued Service
: The Grantee understands and agrees that these Terms and Conditions do not impact the right of the Company or any of its affiliates retaining the Grantee to terminate or change the terms of the Grantee’s service with the Company.
|
12.
|
Captions
: Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of these Terms and Conditions.
|
13.
|
Severability
: In the event that any provision in these Terms and Conditions shall be held invalid or unenforceable for any reason, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of these Terms and Conditions.
|
1.
|
Terms and Conditions
: This grant of service-based restricted stock units is made under the Ingevity Corporation 2016 Omnibus Incentive Plan (the “
Plan
”), and is subject in all respects to the terms of the Plan, including the terms of the Non-Employee Director Deferred Compensation Plan, which is a part of the Plan. All terms of the Plan are hereby incorporated into these terms and conditions (the “
Terms and Conditions
”) by reference. In the event of a conflict between one or more provisions of these Terms and Conditions and one or more provisions of the Plan, the provisions of the Plan shall govern. Each capitalized term not defined herein has the meaning assigned to such term in the Plan.
|
2.
|
Confirmation of Grant
: Effective as April 28, 2017 (the “
Award Date
”), Ingevity Corporation (the “
Company
”) granted the Non-Employee Director whose name is set forth in the notice of grant (the “
Grantee
”) time-based Deferred Stock Units with respect to a specified number of shares of Common Stock as set forth in the Grantee’s notice of grant (the “D
SUs
”). By accepting the DSUs, the Grantee acknowledges and agrees that the DSUs are subject to the Terms and Conditions and the terms of the Plan.
|
3.
|
Stockholder Rights
:
|
a.
|
Except as provided in Section 3(b) below, the Grantee will not have any stockholder rights or privileges (including voting rights) with respect to the shares of Common Stock subject to the DSUs until such shares of Common Stock vest and are actually settled, issued and registered in the Grantee’s name in the Company’s books and records.
|
b.
|
If the Company declares a cash dividend on its shares of Common Stock, on the payment date of the dividend, the Grantee shall be credited with dividend equivalents equal to the amount of such cash dividend per share of Common Stock multiplied by the number of shares of Common Stock subject to the DSUs. The dividend equivalents will be subject to the same terms regarding vesting and forfeiture as the DSUs and will be paid in cash at the times that the corresponding shares of Common Stock associated with the DSUs are delivered (or forfeited at the time that the DSUs are forfeited). The Grantee shall be responsible for any tax liability associated with any cash payments in accordance with Section 10 below.
|
4.
|
Automatic Forfeiture
: The DSUs (including any DSUs that have vested but not yet been settled) will automatically be forfeited and all rights of the Grantee to the DSUs shall terminate under any of the following circumstances:
|
a.
|
The Grantee’s service with the Company as a Non-employee Director is terminated by the Company for Cause.
|
b.
|
The Committee requires recoupment of the DSUs in accordance with any recoupment policy adopted or amended by the Company from time to time.
|
5.
|
Transferability
: The DSUs shall not be sold, transferred, assigned, pledged or otherwise encumbered or disposed.
|
6.
|
Vesting
: The DSUs shall vest in full on April 28, 2018; provided that the Grantee continues to serve as a Non-Employee Director with the Company through such date; provided, however, that the DSUs will not be settled until the Non-Employee Director’s separation from service with the Company. In the event the Grantee ceases to be a Non-Employee Director for any reason before April 28, 2018 other than as described in Sections 4 and 7, a number of the DSUs (rounded up to the nearest whole number) awarded to the Grantee shall become vested on a pro rata basis equal to the total number of DSUs granted on the Award Date, multiplied by a fraction the numerator of which is equal to the number of full months that have elapsed from the Award Date and the denominator of which is 12, and any remaining portion of the DSUs shall be forfeited and, the vested DSUs shall be settled as described in Section 9 below.
|
7.
|
Termination of Service
: If, prior to the first anniversary of the Award Date, (i) the Grantee’s service with the Company is terminated by reason of death or Disability (as defined below), the DSUs shall become vested in full and settled as described in Section 9 below. For purposes of these Terms and Conditions “
Disability
” means permanently and totally disabled in accordance with Section 409A of the Internal Revenue Code.
|
8.
|
Change in Control
: In the event of a Change in Control, Section 14 of the Plan shall control and Section 14 of the Plan shall supersede Sections 7 and 8 of these Terms and Conditions;
provided
,
however
, in the event that, following a Change in Control in which the DSUs are assumed, the Grantee’s service is terminated by reason of the Grantee’s death or Disability, the DSUs shall vest in full and be settled as provided in
Section 9
of these Terms and Conditions.
|
9.
|
Settlement
: Any DSUs not previously forfeited shall be settled by delivery of one share of Common Stock for each DSU being settled. The DSUs shall be settled as soon as practicable after the Grantee’s termination of service with the Company, except as provided in Section 7 and 8, but in no event later than 60 days after the Grantee’s termination of service with the Company. These DSUs are subject to Section 409A of the Internal Revenue Code, and all such payments shall be made in compliance with the requirements of Section 409A of the Internal Revenue Code, including application of the six month settlement delay for any specified employee (as defined in Section 409A of the Internal Revenue Code) in the event of vesting as a result of a separation from service (as defined in Section 409A of the Internal Revenue Code).
|
10.
|
Tax Withholding
: The Grantee as a Non-Employee Director is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the DSUs, and as such the Company has no withholding obligation associated with the vested DSUs.
|
11.
|
No Right to Continued Service
: The Grantee understands and agrees that these Terms and Conditions do not impact the right of the Company or any of its affiliates retaining the Grantee to terminate or change the terms of the Grantee’s service with the Company.
|
12.
|
Captions
: Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of these Terms and Conditions.
|
13.
|
Severability
: In the event that any provision in these Terms and Conditions shall be held invalid or unenforceable for any reason, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of these Terms and Conditions.
|
1.
|
Terms and Conditions
: This grant of deferred stock units is made under the Ingevity Corporation 2016 Omnibus Incentive Plan (the “
Plan
”), and is subject in all respects to the terms of the Plan, including all the Non-employee Director Deferred Compensation Plan, which is a part of the Plan. All terms of the Plan are hereby incorporated into these terms and conditions (the “
Terms and Conditions
”) by reference. In the event of a conflict between one or more provisions of these Terms and Conditions and one or more provisions of the Plan, the provisions of the Plan shall govern. Each capitalized term not defined herein has the meaning assigned to such term in the Plan.
|
2.
|
Confirmation of Grant
: Effective as February 1, 2017 (the “
Award Date
”), Ingevity Corporation (the “
Company
”) granted the Non-Employee Director whose name is set forth in the notice of grant (the “
Grantee
”) Deferred Stock Units with respect to a specified number of shares of Common Stock as set forth in the Grantee’s notice of grant (the “
DSUs
”). By accepting the DSUs, the Grantee acknowledges and agrees that the DSUs are subject to the Terms and Conditions and the terms of the Plan.
|
3.
|
Stockholder Rights
:
|
a.
|
Except as provided in Section 3(b) below, the Grantee will not have any stockholder rights or privileges (including voting rights) with respect to the shares of Common Stock subject to the DSUs until such shares of Common Stock paid and delivered, and are actually issued and registered in the Grantee’s name in the Company’s books and records.
|
b.
|
If the Company declares a cash dividend on its shares of Common Stock, on the payment date of the dividend, the Grantee shall be credited with dividend equivalents equal to the amount of such cash dividend per share of Common Stock multiplied by the number of shares of Common Stock subject to the DSUs. The dividend equivalents will be subject to the same terms regarding settlement as the DSUs and will be paid in cash at the times that the corresponding shares of Common Stock associated with the DSUs are delivered (or forfeited at the time that the DSUs are forfeited). Such cash payment will not be subject to withholding for applicable taxes, but shall be governed by Section 10 below.
|
5.
|
Transferability
: The DSUs shall not be sold, transferred, assigned, pledged or otherwise encumbered or disposed.
|
6.
|
Vesting
: The DSUs are 100% vested; provided, however, that the DSU shall not be settled with the Grantee until his or her separation from service as a Non-Employee Director with the Company as described in Section 9 below.
|
7.
|
Termination of Service
: If the Grantee’s service with the Company is terminated by reason of death or Disability (as defined below), the DSUs shall be settled as described in Section 9 below. For purposes of these Terms and Conditions “
Disability
” means permanently and totally disabled in accordance with Section 409A of the Internal Revenue Code.
|
8.
|
Change in Control
: In the event of a Change in Control, Section 14 of the Plan shall control and Section 14 of the Plan shall supersede these Terms and Conditions;
provided
,
however
, in the event that, following a Change in Control in which the DSUs are assumed, the Grantee’s service is terminated by reason of the Grantee’s death or Disability, the DSUs shall be settled as provided in
Section 9
of these Terms and Conditions.
|
9.
|
Settlement
: Any DSUs not previously forfeited shall be settled by delivery of one share of Common Stock for each DSU being settled. The DSUs shall be settled as soon as practicable after the Grantee’s termination of service as provided in Section 7 and 8, but in no event later than 60 days after termination of service as Non-employee Director of the Company. The DSUs are subject to Section 409A of the Internal Revenue Code, and all such payments shall be made in compliance with the requirements of Section 409A of the Internal Revenue Code, including, if applicable, the application of the six month settlement delay for any specified employee (as defined in Section 409A of the Internal Revenue Code) as a result of a separation from service (as defined in Section 409A of the Internal Revenue Code).
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10.
|
Tax Withholding
: The Grantee as a Non-Employee Director is solely responsible for the satisfaction of all taxes and penalties that may arise in connection with the DSUs, and as such the Company has no withholding obligation associated with the DSUs.
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11.
|
No Right to Continued Service
: The Grantee understands and agrees that these Terms and Conditions do not impact the right of the Company or any of its affiliates retaining the Grantee to terminate or change the terms of the Grantee’s service with the Company.
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12.
|
Captions
: Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of these Terms and Conditions.
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13.
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Severability
: In the event that any provision in these Terms and Conditions shall be held invalid or unenforceable for any reason, such provision shall be severable from, and such invalidity or unenforceability shall not be construed to have any effect on, the remaining provisions of these Terms and Conditions.
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Name of Subsidiary
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Jurisdiction of Organization
|
Ingevity Corporation
|
Delaware, United States of America
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Ingevity South Carolina, LLC
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Delaware, United States of America
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Ingevity Virginia Corporation
|
Virginia, United States of America
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Ingevity Services, Inc.
|
Delaware, United States of America
|
Invia Pavement Technologies, LLC
|
Oklahoma, United States of America
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Purification Cellutions, LLC
|
Delaware, United States of America
|
Ingevity Mexico S.A. de C.V.
|
Mexico
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Ingevity Holdings Sprl
|
Belgium
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Ingevity Quimica Ltda
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Brazil
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Ingevity India Private Limited
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India
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Ingevity Japan, GK
|
Japan
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Ingevity (Shanghai) Holding Co., Ltd.
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China
|
MeadWestvaco Trading Co. (Shanghai) Ltd.
|
China
|
Ingevity Performance Materials (Zhuahi) Co., Ltd.
|
China
|
Ingevity Performance Materials (Suzhou) Co., Ltd.
|
China
|
Ingevity Hong Kong Ltd.
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Hong Kong
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/s/ PricewaterhouseCoopers LLP
|
Richmond, VA
|
March 2, 2017
|
1.
|
I have reviewed this Annual Report on Form 10-K of Ingevity Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 2, 2017
|
|
|
|
|
By:
|
/S/ D. MICHAEL WILSON
|
|
D. Michael Wilson
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K of Ingevity Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b.
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c.
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d.
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
a.
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
b.
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Date:
|
March 2, 2017
|
|
|
|
|
By:
|
/S/ JOHN C. FORTSON
|
|
John C. Fortson
|
|
Executive Vice President and Chief Financial Officer
|
|
/S/ D. MICHAEL WILSON
|
D. Michael Wilson
|
President and Chief Executive Officer
|
|
/S/ JOHN C. FORTSON
|
John C. Fortson
|
Executive Vice President and Chief Financial Officer
|