UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 9, 2006
CALUMET SPECIALTY PRODUCTS
PARTNERS, L.P.
(Exact name of registrant as specified in its charter)
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DELAWARE
(State or other jurisdiction
of incorporation)
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000-51734
(Commission File Number)
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37-1516132
(IRS Employer
Identification No.) |
2780 Waterfront Pkwy E. Drive
Suite 200
Indianapolis, Indiana 46214
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (317) 328-5660
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain
Officers; Compensatory Arrangements of Certain Officers.
On November 9, 2006, the board of directors (the “Board”) of Calumet GP, LLC, the general
partner (the “General Partner”) of Calumet Specialty Products Partners, L.P. (the “Partnership”),
approved the 2007 Incentive Compensation Plan (the “Plan”) upon the recommendation of the
compensation committee of the Board. The Plan is effective beginning with the 2007 fiscal year. The
purpose of the Plan is to aid the Partnership in retaining and motivating management employees of
high caliber and to assist the Partnership in meeting its performance objectives. The Plan provides
for incentive awards comprised of both cash and awards of equity interests in the Partnership.
The Plan provide for awards to be awarded to the Partnership’s executive officers and certain
other management employees if the Partnership meets specific performance targets based on its
distributable cash flow. Distributable cash flow is defined by the Partnership to mean Adjusted
EBITDA (as defined in the Partnership’s credit facilities) less maintenance capital expenditures,
cash interest expense and income tax expense.
Under this Plan, if the Partnership’s actual performance meets a minimum distributable cash
flow goal for the fiscal year, executive officers and certain other management employees may
receive incentive bonus payments ranging from 15% to 50% of the employee’s base salary, depending
on the participant’s position with the Partnership. If the Partnership’s performance exceeds the
defined minimum distributable cash flow goal, the cash bonus paid as percentage of the employee’s
base salary may be larger, ultimately reaching an upper range of 60% to 200% of the employee’s base
salary, depending on the participant’s position with the Partnership, if the Partnership’s
distributable cash flow for the fiscal year reaches a defined maximum level. There are a total of
three increasing distributable cash flow goals under the Plan pursuant to which participants may
receive incentive bonus payments. Cash bonuses will be prorated if actual performance falls
between the defined minimum and maximum distributable cash flow goals.
Payment of cash bonuses (if any) will be made in the first quarter following the end of the
performance period during which the bonuses were earned. Cash bonuses under the Plan will be paid
in a single lump sum, subject to tax and other withholdings.
Under this Plan, if the Partnership’s actual performance meets a target distributable cash
flow goal for the fiscal year, executive officers and certain other management employees may
receive awards ranging from 1,000 to 5,000 phantom units with distribution equivalent rights
(“DERS”), depending on the participant’s position with the Partnership. If the Partnership’s
distributable cash flow for the fiscal year reaches a defined maximum level, the participants in
the Plan may receive awards ranging from 1,500 to 7,500 phantom units with DERS, depending on the
participant’s position with the Partnership. Equity awards will not be prorated if actual
performance falls between the defined target and maximum distributable cash flow goals.
Awards
of phantom units with DERS pursuant to the Plan will be made in the first quarter
following the end of the performance period during which such awards were earned. Any awards of
phantom units with DERS will be issued pursuant to the Partnership’s Long-Term Incentive Plan (the
“LTIP”) previously adopted by the Board.
The Board also approved on November 9, 2006 a standard form of phantom unit grant agreement
with DERS to be used for phantom unit grants pursuant to the LTIP. Pursuant to the terms of the
LTIP, the Board or its compensation committee may make grants of equity awards to the employees,
consultants and directors of the General Partner and employees and consultants of its affiliates
who perform services for the General Partner. The form of phantom unit grant is attached hereto as
Exhibit 10.1.